1027-00003 · Calderwood & Harkness LLP · Closing

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CLOSING CERTIFICATE OF PELLEGRINO CAPITAL GROUP LLC

Delivered Pursuant to the Redemption Agreement Dated as of May 20, 2024

June 28, 2024

This Closing Certificate (this "Certificate") is delivered by Pellegrino Capital Group LLC, a Florida limited liability company ("PCG"), pursuant to Section 8.2(d) of that certain Redemption Agreement, dated as of May 20, 2024 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Redemption Agreement"), by and between PCG and Meridian Shores Hospitality LLC, a Delaware limited liability company ("MSH"). This Certificate is being delivered in connection with 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"), Florida Filing No. L17000124583, EIN 82-5063921. This Certificate is executed by Marcus Thiel, Chief Financial Officer of Pellegrino Capital Group LLC, and is delivered at the Closing (as defined in the Redemption Agreement) on the date hereof.

Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Redemption Agreement.

RECITALS

WHEREAS, PCG is a Florida limited liability company duly organized and existing under the laws of the State of Florida, with its principal office located at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606, Employer Identification Number 83-2147605;

WHEREAS, PCG is the holder of a sixty-five percent (65%) membership interest in PGV and serves as the sole Manager of PGV pursuant to the terms and conditions of that certain Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017, by and between PCG and MSH, as the same has been amended, restated, supplemented, or otherwise modified from time to time (the "Operating Agreement");

WHEREAS, MSH is the holder of a thirty-five percent (35%) membership interest in PGV, representing the Redeemed Interest;

WHEREAS, PGV is a Florida limited liability company formed on June 15, 2017, whose sole material asset is The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort property located at 650 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property"), together with all related tangible and intangible assets, permits, licenses, entitlements, and goodwill associated therewith;

WHEREAS, on January 9, 2023, PCG exercised its call option under Section 12.4 of the Operating Agreement to purchase MSH's entire thirty-five percent (35%) membership interest in PGV in accordance with the terms and conditions set forth therein;

WHEREAS, following the exercise of such call option, a dispute arose between PCG and MSH regarding the proper valuation of MSH's membership interest in PGV, including disagreements concerning the applicable valuation methodology, the treatment of certain capital expenditure reserves, and the appropriate discount rate to be applied in connection with the determination of the fair market value of the Redeemed Interest, which dispute resulted in the commencement of arbitration proceedings before JAMS, Inc. (JAMS Reference No. 1440032871) (the "Arbitration");

WHEREAS, following extensive negotiations and with the benefit of the mediation conducted under the auspices of JAMS, the parties entered into the Redemption Agreement, dated as of May 20, 2024, which provides for the redemption of the Redeemed Interest by PGV at an aggregate Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) (the "Redemption Price"), subject to the satisfaction or waiver of certain conditions to Closing set forth therein;

WHEREAS, contemporaneously with the execution and delivery of the Redemption Agreement, the parties also executed and delivered a Mutual Release and Settlement Agreement, dated as of May 20, 2024 (the "Release Agreement"), providing for the mutual release of all claims, counterclaims, and causes of action arising out of or relating to the Arbitration and certain related disputes; and

WHEREAS, this Certificate is being delivered at the Closing on the date hereof in satisfaction of the conditions to Closing set forth in Section 8.2(d) and related provisions of the Redemption Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained in the Redemption Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby certifies as follows:

SECTION 1: AUTHORITY AND AUTHORIZATION

1.1 The undersigned, Marcus Thiel, is the duly appointed Chief Financial Officer of PCG, has held such position continuously since March 1, 2020, and is duly authorized to execute and deliver this Certificate on behalf of PCG in connection with the transactions contemplated by the Redemption Agreement and the other Transaction Documents. The undersigned has actual knowledge of the matters set forth herein and makes the certifications contained in this Certificate based upon such knowledge and upon reasonable inquiry and investigation.

1.2 PCG is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida. PCG has not been dissolved, revoked, or suspended, and no proceedings for such dissolution, revocation, or suspension have been commenced or, to the knowledge of the undersigned, are threatened. PCG's articles of organization were filed with the Florida Department of State, Division of Corporations, and PCG remains in active status as reflected in the records of such office.

1.3 PCG's registered agent for service of process in the State of Florida is CT Agents of Florida LLC, located at 1201 Hays Street, Tallahassee, FL 32301. Such registered agent appointment is current, valid, and has not been revoked, terminated, or otherwise modified.

1.4 The execution, delivery, and performance by PCG of the Redemption Agreement, the Release Agreement, this Certificate, and all other ancillary closing documents, instruments, and certificates required to be executed and delivered by PCG in connection with the transactions contemplated by the Redemption Agreement (the Redemption Agreement, the Release Agreement, this Certificate, and all such ancillary documents, collectively, the "Transaction Documents") have been duly authorized by all necessary limited liability company action on the part of PCG. Without limiting the generality of the foregoing, the execution, delivery, and performance of the Transaction Documents have been duly approved by Dominic R. Pellegrino, in his capacity as Managing Member of PCG, by written consent dated May 18, 2024, which written consent was executed in accordance with the requirements of PCG's operating agreement and applicable provisions of the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes.

1.5 No further consent, approval, authorization, or other action by any member, manager, officer, or other person or entity (whether internal or external to PCG), and no filing with or notice to any governmental authority, is required in connection with the execution, delivery, or performance by PCG of the Transaction Documents or the consummation by PCG of the transactions contemplated thereby, except for such filings and notices as have already been made or given on or prior to the date hereof.

SECTION 2: REPRESENTATIONS AND WARRANTIES

2.1 Bring-Down Certification. The undersigned hereby certifies, on behalf of PCG and not in any individual capacity, that each of the representations and warranties of PCG contained in Article V 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 such representations and warranties 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 or a specific date, in which case such representation or warranty is true and correct in all material respects as of such earlier date or specific date, as applicable. For the avoidance of doubt, any representation or warranty that is qualified by "materiality," "material adverse effect," or similar qualifications shall be true and correct in all respects (without duplication of such materiality qualifiers).

2.2 Specific Certifications. Without limiting the generality of Section 2.1 above, the undersigned specifically certifies, on behalf of PCG, as follows:

(a) Power and Authority. PCG has full limited liability company power and authority to enter into the Transaction Documents, to perform its obligations thereunder, and to consummate the transactions contemplated thereby. PCG has all requisite organizational power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted.

(b) Valid and Binding Obligations. Each of the Transaction Documents to which PCG is a party constitutes, or upon execution and delivery thereof will constitute, the valid and binding obligation of PCG, enforceable against PCG in accordance with its respective terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law), including principles of commercial reasonableness, good faith, and fair dealing.

(c) No Conflicts. The execution, delivery, and performance by PCG of the Transaction Documents, and the consummation of the transactions contemplated thereby, do not and will not (i) violate, conflict with, or result in a breach of any provision of PCG's articles of organization, as amended, or PCG's operating agreement, as amended; (ii) violate, conflict with, or result in a breach or default under (or give rise to any right of termination, cancellation, acceleration, or loss of any benefit under) any material agreement, contract, instrument, permit, license, order, judgment, writ, injunction, or decree to which PCG is a party or by which PCG or any of its properties or assets is bound or affected; or (iii) violate any applicable law, rule, regulation, order, or governmental requirement applicable to PCG.

(d) No Adverse Litigation. There is no action, suit, claim, investigation, arbitration, or proceeding pending before any court, arbitrator, or governmental authority, or to the knowledge of PCG, threatened against PCG or any of its affiliates, that would reasonably be expected to (i) materially impair or delay PCG's ability to consummate the transactions contemplated by the Transaction Documents, (ii) challenge the validity or enforceability of any Transaction Document, or (iii) seek to restrain or prohibit the Closing, other than the Arbitration (JAMS Reference No. 1440032871), which is being dismissed with prejudice by the parties contemporaneously with the Closing pursuant to the terms of the Release Agreement and the joint stipulation of dismissal filed with JAMS on the date hereof.

(e) No Liens on Membership Interest. PCG has not granted, created, incurred, assumed, suffered to exist, or permitted any lien, pledge, charge, encumbrance, security interest, option, right of first refusal, or other restriction or adverse claim of any kind or nature whatsoever on or with respect to its sixty-five percent (65%) membership interest in PGV that would adversely affect, impair, or prevent the consummation of the transactions contemplated by the Redemption Agreement or the vesting in PCG (following the redemption of the Redeemed Interest) of one hundred percent (100%) of the membership interests in PGV, free and clear of all liens and encumbrances (other than restrictions on transfer contained in the Operating Agreement and the loan documents with Gulf Atlantic National Bank).

SECTION 3: SATISFACTION OF CLOSING CONDITIONS

3.1 The undersigned hereby certifies, on behalf of PCG and not in any individual capacity, that all conditions to Closing required to be satisfied or performed by PCG (or caused to be satisfied or performed by PCG) under Article VIII and other applicable provisions of the Redemption Agreement have been duly satisfied or, where applicable, have been validly waived in writing by MSH, as of the Closing Date. Without limiting the generality of the foregoing, the undersigned specifically certifies that the following conditions have been satisfied:

(a) Payment of Redemption Price. PCG has caused the aggregate Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000.00) to be paid to MSH (or to MSH's designated account) by wire transfer of immediately available funds on the Closing Date (June 28, 2024), in accordance with the wire transfer instructions provided by MSH to PCG pursuant to Section 3.2 of the Redemption Agreement. The Redemption Price was funded from the following sources:

(i) Twenty-Two Million Dollars ($22,000,000.00) from PCG's existing liquidity, which funds were transferred from PCG's operating account maintained at Tidewater Bancorp, N.A. (Account No. ending in 7842) to the closing escrow account maintained at Dunmore Insurance on June 27, 2024, and disbursed to MSH's designated account on the Closing Date; and

(ii) Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000.00) from an incremental draw on PGV's existing revolving credit facility with Gulf Atlantic National Bank, a national banking association ("GANB") (Loan No. CRE-2017-06284), with GANB's principal office located at 201 East Pine Street, Orlando, FL 32801, which incremental draw was funded on June 27, 2024, and disbursed from PGV's operating account to the closing escrow account on June 27, 2024, and subsequently disbursed to MSH's designated account on the Closing Date, all as approved by GANB pursuant to the Lender Consent Letter referenced in Section 3.1(c) below.

(b) Execution and Delivery of Transaction Documents. PCG has duly executed and delivered (or has caused to be duly executed and delivered by its duly authorized officers and representatives) each of the following Transaction Documents, as required by the Redemption Agreement:

(i) The Redemption Agreement (executed by PCG on May 20, 2024);

(ii) The Mutual Release and Settlement Agreement (executed by PCG on May 20, 2024);

(iii) This Closing Certificate;

(iv) The Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, reflecting PCG as the sole member of PGV effective as of the Closing Date;

(v) The Joint Stipulation and Order of Dismissal with Prejudice in connection with JAMS Reference No. 1440032871;

(vi) IRS Form W-9 of PCG, duly completed and executed; and

(vii) Such other documents, instruments, affidavits, and certificates as reasonably required under the Redemption Agreement or as reasonably requested by MSH or the title company in connection with the Closing.

(c) Lender Consent. PCG has obtained, and has delivered to MSH (or MSH's counsel), the written consent of Gulf Atlantic National Bank (the "Lender Consent Letter"), dated June 21, 2024, executed by Christine Delacroix, Senior Vice President, Commercial Real Estate Lending, on behalf of GANB, consenting to:

(i) the transfer and redemption of MSH's thirty-five percent (35%) membership interest in PGV to and by PCG (or PGV, as applicable), such that following the Closing, PCG shall be the sole member of PGV; and

(ii) the incremental draw of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000.00) on PGV's revolving credit facility (Loan No. CRE-2017-06284), thereby increasing PGV's total outstanding indebtedness under such facility from Forty-Eight Million Six Hundred Thousand Dollars ($48,600,000.00) to Seventy-Nine Million Four Hundred Fifty Thousand Dollars ($79,450,000.00), subject to the terms and conditions set forth in the Lender Consent Letter and the existing loan documents.

The Lender Consent Letter confirms that, upon the Closing and the satisfaction of the conditions set forth therein, no default or event of default under the loan documents will result from the consummation of the transactions contemplated by the Redemption Agreement.

(d) No Material Adverse Change. Since the date of the Redemption Agreement (May 20, 2024) through and including the Closing Date (June 28, 2024), there has been no material adverse change in the business, operations, financial condition, results of operations, prospects, or assets of PGV or The Palmetto Grand Resort & Spa. Without limiting the generality of the foregoing, (i) no casualty, condemnation, or force majeure event has occurred with respect to the Property, (ii) the Property continues to operate in the ordinary course of business consistent with past practices, (iii) no key management employee of the Property has resigned or been terminated, and (iv) no material contract relating to the Property has been terminated, materially modified, or materially breached.

(e) No Injunction or Restraining Order. No court, arbitrator, administrative agency, or other governmental authority of competent jurisdiction has issued, entered, promulgated, or enforced any order, writ, injunction, decree, judgment, stipulation, determination, or award, whether temporary, preliminary, or permanent, that restrains, enjoins, or otherwise prohibits the consummation of the transactions contemplated by the Transaction Documents, and no proceeding seeking any such relief is pending or, to the knowledge of the undersigned, threatened.

(f) Insurance. The managers' liability insurance policy issued by Atlantic Omnivrel Insurance Company (Policy No. AFML-2022-08745) providing coverage of Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate remains in full force and effect as of the Closing Date. All premiums due and payable under such policy through the Closing Date have been timely paid, and no notice of cancellation, non-renewal, or material modification has been received by PCG or PGV with respect to such policy. PCG has further confirmed that all property and casualty insurance, commercial general liability insurance, and other insurance policies maintained by PGV with respect to the Property remain in full force and effect as of the Closing Date.

SECTION 4: NO DEFAULT

4.1 The undersigned hereby certifies, on behalf of PCG, that as of the Closing Date: (a) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PCG under the Redemption Agreement or any other Transaction Document; (b) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PCG or PGV under the Operating Agreement; and (c) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PGV under the loan documents with Gulf Atlantic National Bank (Loan No. CRE-2017-06284), which loan bears interest at a rate per annum equal to the Secured Overnight Financing Rate (SOFR) plus two hundred twenty-five basis points (2.25%), with a scheduled maturity date of August 1, 2027.

4.2 As of the Closing Date, all payments of principal, interest, fees, and other amounts due and payable under the loan documents with GANB have been paid in full when due, including all amounts required to be paid in connection with the incremental draw referenced in Section 3.1(a)(ii) above. PGV is in compliance with all financial covenants, reporting requirements, and other material obligations under such loan documents.

SECTION 5: OFFICERS AND AUTHORIZED SIGNATORIES

5.1 The following persons are the duly appointed and serving officers and authorized signatories of PCG as of the Closing Date, holding the respective titles set forth opposite their names, and each such person is duly authorized to execute documents and take actions on behalf of PCG in connection with the transactions contemplated by the Transaction Documents:

5.2 The specimen signatures of the foregoing persons set forth in the incumbency certificate delivered by PCG in connection with the Transaction Documents are true and correct and are the genuine signatures of such individuals. Each such person held the office or position indicated as of the date of execution of the applicable Transaction Documents and continues to hold such office or position as of the Closing Date.

SECTION 6: GOVERNING LAW

6.1 This Certificate shall be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-laws rules, provisions, or principles (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida, consistent with the governing law provisions of the Redemption Agreement and the Operating Agreement.

6.2 This Certificate is delivered solely in connection with, and for the purposes of satisfying the conditions to Closing set forth in, the Redemption Agreement, and shall not be deemed to create any rights or obligations other than as expressly set forth herein or in the Redemption Agreement.

[Remainder of Page Intentionally Left Blank — Signature Page Follows]

SIGNATURE PAGE TO CLOSING CERTIFICATE OF PELLEGRINO CAPITAL GROUP LLC

IN WITNESS WHEREOF, the undersigned has duly executed this Closing Certificate on behalf of Pellegrino Capital Group LLC as of the date first written above.

PELLEGRINO CAPITAL GROUP LLC

By: ________

Name: Marcus Thiel

Title: Chief Financial Officer

Date: June 28, 2024

Address for Notices:

Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, FL 33606

Attention: Marcus Thiel, Chief Financial Officer

Telephone: (813) 555-0174

Email: mthiel@pellegrinocapital.com

With a copy to (which shall not constitute notice):

Tolliver & Aldgate LLP 100 North Tampa Street, Suite 4100 Tampa, FL 33602

Attention: Real Estate Transaction Group

Name	Title
Dominic R. Pellegrino	Managing Member
Adriana Pellegrino-Voss	Senior Vice President of Investments
Marcus Thiel	Chief Financial Officer

CLOSING CERTIFICATE OF PELLEGRINO CAPITAL GROUP LLC
Delivered Pursuant to the Redemption Agreement Dated as of May 20, 2024
June 28, 2024
This Closing Certificate (this "Certificate") is delivered by Pellegrino Capital Group LLC, a Florida limited liability company ("PCG"), pursuant to Section 8.2(d) of that certain Redemption Agreement, dated as of May 20, 2024 (as the same may be amended, supplemented, or otherwise modified from time to time, the "Redemption Agreement"), by and between PCG and Meridian Shores Hospitality LLC, a Delaware limited liability company ("MSH"). This Certificate is being delivered in connection with 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"), Florida Filing No. L17000124583, EIN 82-5063921. This Certificate is executed by Marcus Thiel, Chief Financial Officer of Pellegrino Capital Group LLC, and is delivered at the Closing (as defined in the Redemption Agreement) on the date hereof.
Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Redemption Agreement.
RECITALS
WHEREAS, PCG is a Florida limited liability company duly organized and existing under the laws of the State of Florida, with its principal office located at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606, Employer Identification Number 83-2147605;
WHEREAS, PCG is the holder of a sixty-five percent (65%) membership interest in PGV and serves as the sole Manager of PGV pursuant to the terms and conditions of that certain Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017, by and between PCG and MSH, as the same has been amended, restated, supplemented, or otherwise modified from time to time (the "Operating Agreement");
WHEREAS, MSH is the holder of a thirty-five percent (35%) membership interest in PGV, representing the Redeemed Interest;
WHEREAS, PGV is a Florida limited liability company formed on June 15, 2017, whose sole material asset is The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort property located at 650 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property"), together with all related tangible and intangible assets, permits, licenses, entitlements, and goodwill associated therewith;
WHEREAS, on January 9, 2023, PCG exercised its call option under Section 12.4 of the Operating Agreement to purchase MSH's entire thirty-five percent (35%) membership interest in PGV in accordance with the terms and conditions set forth therein;
WHEREAS, following the exercise of such call option, a dispute arose between PCG and MSH regarding the proper valuation of MSH's membership interest in PGV, including disagreements concerning the applicable valuation methodology, the treatment of certain capital expenditure reserves, and the appropriate discount rate to be applied in connection with the determination of the fair market value of the Redeemed Interest, which dispute resulted in the commencement of arbitration proceedings before JAMS, Inc. (JAMS Reference No. 1440032871) (the "Arbitration");
WHEREAS, following extensive negotiations and with the benefit of the mediation conducted under the auspices of JAMS, the parties entered into the Redemption Agreement, dated as of May 20, 2024, which provides for the redemption of the Redeemed Interest by PGV at an aggregate Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) (the "Redemption Price"), subject to the satisfaction or waiver of certain conditions to Closing set forth therein;
WHEREAS, contemporaneously with the execution and delivery of the Redemption Agreement, the parties also executed and delivered a Mutual Release and Settlement Agreement, dated as of May 20, 2024 (the "Release Agreement"), providing for the mutual release of all claims, counterclaims, and causes of action arising out of or relating to the Arbitration and certain related disputes; and
WHEREAS, this Certificate is being delivered at the Closing on the date hereof in satisfaction of the conditions to Closing set forth in Section 8.2(d) and related provisions of the Redemption Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained in the Redemption Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby certifies as follows:
SECTION 1: AUTHORITY AND AUTHORIZATION
1.1 The undersigned, Marcus Thiel, is the duly appointed Chief Financial Officer of PCG, has held such position continuously since March 1, 2020, and is duly authorized to execute and deliver this Certificate on behalf of PCG in connection with the transactions contemplated by the Redemption Agreement and the other Transaction Documents. The undersigned has actual knowledge of the matters set forth herein and makes the certifications contained in this Certificate based upon such knowledge and upon reasonable inquiry and investigation.
1.2 PCG is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida. PCG has not been dissolved, revoked, or suspended, and no proceedings for such dissolution, revocation, or suspension have been commenced or, to the knowledge of the undersigned, are threatened. PCG's articles of organization were filed with the Florida Department of State, Division of Corporations, and PCG remains in active status as reflected in the records of such office.
1.3 PCG's registered agent for service of process in the State of Florida is CT Agents of Florida LLC, located at 1201 Hays Street, Tallahassee, FL 32301. Such registered agent appointment is current, valid, and has not been revoked, terminated, or otherwise modified.
1.4 The execution, delivery, and performance by PCG of the Redemption Agreement, the Release Agreement, this Certificate, and all other ancillary closing documents, instruments, and certificates required to be executed and delivered by PCG in connection with the transactions contemplated by the Redemption Agreement (the Redemption Agreement, the Release Agreement, this Certificate, and all such ancillary documents, collectively, the "Transaction Documents") have been duly authorized by all necessary limited liability company action on the part of PCG. Without limiting the generality of the foregoing, the execution, delivery, and performance of the Transaction Documents have been duly approved by Dominic R. Pellegrino, in his capacity as Managing Member of PCG, by written consent dated May 18, 2024, which written consent was executed in accordance with the requirements of PCG's operating agreement and applicable provisions of the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes.
1.5 No further consent, approval, authorization, or other action by any member, manager, officer, or other person or entity (whether internal or external to PCG), and no filing with or notice to any governmental authority, is required in connection with the execution, delivery, or performance by PCG of the Transaction Documents or the consummation by PCG of the transactions contemplated thereby, except for such filings and notices as have already been made or given on or prior to the date hereof.
SECTION 2: REPRESENTATIONS AND WARRANTIES
2.1 Bring-Down Certification. The undersigned hereby certifies, on behalf of PCG and not in any individual capacity, that each of the representations and warranties of PCG contained in Article V 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 such representations and warranties 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 or a specific date, in which case such representation or warranty is true and correct in all material respects as of such earlier date or specific date, as applicable. For the avoidance of doubt, any representation or warranty that is qualified by "materiality," "material adverse effect," or similar qualifications shall be true and correct in all respects (without duplication of such materiality qualifiers).
2.2 Specific Certifications. Without limiting the generality of Section 2.1 above, the undersigned specifically certifies, on behalf of PCG, as follows:
(a) Power and Authority. PCG has full limited liability company power and authority to enter into the Transaction Documents, to perform its obligations thereunder, and to consummate the transactions contemplated thereby. PCG has all requisite organizational power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted.
(b) Valid and Binding Obligations. Each of the Transaction Documents to which PCG is a party constitutes, or upon execution and delivery thereof will constitute, the valid and binding obligation of PCG, enforceable against PCG in accordance with its respective terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law), including principles of commercial reasonableness, good faith, and fair dealing.
(c) No Conflicts. The execution, delivery, and performance by PCG of the Transaction Documents, and the consummation of the transactions contemplated thereby, do not and will not (i) violate, conflict with, or result in a breach of any provision of PCG's articles of organization, as amended, or PCG's operating agreement, as amended; (ii) violate, conflict with, or result in a breach or default under (or give rise to any right of termination, cancellation, acceleration, or loss of any benefit under) any material agreement, contract, instrument, permit, license, order, judgment, writ, injunction, or decree to which PCG is a party or by which PCG or any of its properties or assets is bound or affected; or (iii) violate any applicable law, rule, regulation, order, or governmental requirement applicable to PCG.
(d) No Adverse Litigation. There is no action, suit, claim, investigation, arbitration, or proceeding pending before any court, arbitrator, or governmental authority, or to the knowledge of PCG, threatened against PCG or any of its affiliates, that would reasonably be expected to (i) materially impair or delay PCG's ability to consummate the transactions contemplated by the Transaction Documents, (ii) challenge the validity or enforceability of any Transaction Document, or (iii) seek to restrain or prohibit the Closing, other than the Arbitration (JAMS Reference No. 1440032871), which is being dismissed with prejudice by the parties contemporaneously with the Closing pursuant to the terms of the Release Agreement and the joint stipulation of dismissal filed with JAMS on the date hereof.
(e) No Liens on Membership Interest. PCG has not granted, created, incurred, assumed, suffered to exist, or permitted any lien, pledge, charge, encumbrance, security interest, option, right of first refusal, or other restriction or adverse claim of any kind or nature whatsoever on or with respect to its sixty-five percent (65%) membership interest in PGV that would adversely affect, impair, or prevent the consummation of the transactions contemplated by the Redemption Agreement or the vesting in PCG (following the redemption of the Redeemed Interest) of one hundred percent (100%) of the membership interests in PGV, free and clear of all liens and encumbrances (other than restrictions on transfer contained in the Operating Agreement and the loan documents with Gulf Atlantic National Bank).
SECTION 3: SATISFACTION OF CLOSING CONDITIONS
3.1 The undersigned hereby certifies, on behalf of PCG and not in any individual capacity, that all conditions to Closing required to be satisfied or performed by PCG (or caused to be satisfied or performed by PCG) under Article VIII and other applicable provisions of the Redemption Agreement have been duly satisfied or, where applicable, have been validly waived in writing by MSH, as of the Closing Date. Without limiting the generality of the foregoing, the undersigned specifically certifies that the following conditions have been satisfied:
(a) Payment of Redemption Price. PCG has caused the aggregate Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000.00) to be paid to MSH (or to MSH's designated account) by wire transfer of immediately available funds on the Closing Date (June 28, 2024), in accordance with the wire transfer instructions provided by MSH to PCG pursuant to Section 3.2 of the Redemption Agreement. The Redemption Price was funded from the following sources:
(i) Twenty-Two Million Dollars ($22,000,000.00) from PCG's existing liquidity, which funds were transferred from PCG's operating account maintained at Tidewater Bancorp, N.A. (Account No. ending in 7842) to the closing escrow account maintained at Dunmore Insurance on June 27, 2024, and disbursed to MSH's designated account on the Closing Date; and
(ii) Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000.00) from an incremental draw on PGV's existing revolving credit facility with Gulf Atlantic National Bank, a national banking association ("GANB") (Loan No. CRE-2017-06284), with GANB's principal office located at 201 East Pine Street, Orlando, FL 32801, which incremental draw was funded on June 27, 2024, and disbursed from PGV's operating account to the closing escrow account on June 27, 2024, and subsequently disbursed to MSH's designated account on the Closing Date, all as approved by GANB pursuant to the Lender Consent Letter referenced in Section 3.1(c) below.
(b) Execution and Delivery of Transaction Documents. PCG has duly executed and delivered (or has caused to be duly executed and delivered by its duly authorized officers and representatives) each of the following Transaction Documents, as required by the Redemption Agreement:
(i) The Redemption Agreement (executed by PCG on May 20, 2024);
(ii) The Mutual Release and Settlement Agreement (executed by PCG on May 20, 2024);
(iii) This Closing Certificate;
(iv) The Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, reflecting PCG as the sole member of PGV effective as of the Closing Date;
(v) The Joint Stipulation and Order of Dismissal with Prejudice in connection with JAMS Reference No. 1440032871;
(vi) IRS Form W-9 of PCG, duly completed and executed; and
(vii) Such other documents, instruments, affidavits, and certificates as reasonably required under the Redemption Agreement or as reasonably requested by MSH or the title company in connection with the Closing.
(c) Lender Consent. PCG has obtained, and has delivered to MSH (or MSH's counsel), the written consent of Gulf Atlantic National Bank (the "Lender Consent Letter"), dated June 21, 2024, executed by Christine Delacroix, Senior Vice President, Commercial Real Estate Lending, on behalf of GANB, consenting to:
(i) the transfer and redemption of MSH's thirty-five percent (35%) membership interest in PGV to and by PCG (or PGV, as applicable), such that following the Closing, PCG shall be the sole member of PGV; and
(ii) the incremental draw of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000.00) on PGV's revolving credit facility (Loan No. CRE-2017-06284), thereby increasing PGV's total outstanding indebtedness under such facility from Forty-Eight Million Six Hundred Thousand Dollars ($48,600,000.00) to Seventy-Nine Million Four Hundred Fifty Thousand Dollars ($79,450,000.00), subject to the terms and conditions set forth in the Lender Consent Letter and the existing loan documents.
The Lender Consent Letter confirms that, upon the Closing and the satisfaction of the conditions set forth therein, no default or event of default under the loan documents will result from the consummation of the transactions contemplated by the Redemption Agreement.
(d) No Material Adverse Change. Since the date of the Redemption Agreement (May 20, 2024) through and including the Closing Date (June 28, 2024), there has been no material adverse change in the business, operations, financial condition, results of operations, prospects, or assets of PGV or The Palmetto Grand Resort & Spa. Without limiting the generality of the foregoing, (i) no casualty, condemnation, or force majeure event has occurred with respect to the Property, (ii) the Property continues to operate in the ordinary course of business consistent with past practices, (iii) no key management employee of the Property has resigned or been terminated, and (iv) no material contract relating to the Property has been terminated, materially modified, or materially breached.
(e) No Injunction or Restraining Order. No court, arbitrator, administrative agency, or other governmental authority of competent jurisdiction has issued, entered, promulgated, or enforced any order, writ, injunction, decree, judgment, stipulation, determination, or award, whether temporary, preliminary, or permanent, that restrains, enjoins, or otherwise prohibits the consummation of the transactions contemplated by the Transaction Documents, and no proceeding seeking any such relief is pending or, to the knowledge of the undersigned, threatened.
(f) Insurance. The managers' liability insurance policy issued by Atlantic Omnivrel Insurance Company (Policy No. AFML-2022-08745) providing coverage of Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate remains in full force and effect as of the Closing Date. All premiums due and payable under such policy through the Closing Date have been timely paid, and no notice of cancellation, non-renewal, or material modification has been received by PCG or PGV with respect to such policy. PCG has further confirmed that all property and casualty insurance, commercial general liability insurance, and other insurance policies maintained by PGV with respect to the Property remain in full force and effect as of the Closing Date.
SECTION 4: NO DEFAULT
4.1 The undersigned hereby certifies, on behalf of PCG, that as of the Closing Date: (a) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PCG under the Redemption Agreement or any other Transaction Document; (b) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PCG or PGV under the Operating Agreement; and (c) no event has occurred and no condition exists that constitutes, or that with the giving of notice or the lapse of time or both would constitute, an event of default by PGV under the loan documents with Gulf Atlantic National Bank (Loan No. CRE-2017-06284), which loan bears interest at a rate per annum equal to the Secured Overnight Financing Rate (SOFR) plus two hundred twenty-five basis points (2.25%), with a scheduled maturity date of August 1, 2027.
4.2 As of the Closing Date, all payments of principal, interest, fees, and other amounts due and payable under the loan documents with GANB have been paid in full when due, including all amounts required to be paid in connection with the incremental draw referenced in Section 3.1(a)(ii) above. PGV is in compliance with all financial covenants, reporting requirements, and other material obligations under such loan documents.
SECTION 5: OFFICERS AND AUTHORIZED SIGNATORIES
5.1 The following persons are the duly appointed and serving officers and authorized signatories of PCG as of the Closing Date, holding the respective titles set forth opposite their names, and each such person is duly authorized to execute documents and take actions on behalf of PCG in connection with the transactions contemplated by the Transaction Documents:
5.2 The specimen signatures of the foregoing persons set forth in the incumbency certificate delivered by PCG in connection with the Transaction Documents are true and correct and are the genuine signatures of such individuals. Each such person held the office or position indicated as of the date of execution of the applicable Transaction Documents and continues to hold such office or position as of the Closing Date.
SECTION 6: GOVERNING LAW
6.1 This Certificate shall be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-laws rules, provisions, or principles (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida, consistent with the governing law provisions of the Redemption Agreement and the Operating Agreement.
6.2 This Certificate is delivered solely in connection with, and for the purposes of satisfying the conditions to Closing set forth in, the Redemption Agreement, and shall not be deemed to create any rights or obligations other than as expressly set forth herein or in the Redemption Agreement.
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SIGNATURE PAGE TO CLOSING CERTIFICATE OF PELLEGRINO CAPITAL GROUP LLC
IN WITNESS WHEREOF, the undersigned has duly executed this Closing Certificate on behalf of Pellegrino Capital Group LLC as of the date first written above.
PELLEGRINO CAPITAL GROUP LLC
By: ________
Name: Marcus Thiel
Title: Chief Financial Officer
Date: June 28, 2024
Address for Notices:
Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, FL 33606
Attention: Marcus Thiel, Chief Financial Officer
Telephone: (813) 555-0174
Email: mthiel@pellegrinocapital.com
With a copy to (which shall not constitute notice):
Tolliver & Aldgate LLP 100 North Tampa Street, Suite 4100 Tampa, FL 33602
Attention: Real Estate Transaction Group
Name | Title
Dominic R. Pellegrino | Managing Member
Adriana Pellegrino-Voss | Senior Vice President of Investments
Marcus Thiel | Chief Financial Officer