Victoria,
I am writing to follow up on the second mediation session held on Monday, March 25, 2024, in Miami, conducted by Raymond Alcazar of Alcazar Dispute Resolution LLC, and our brief telephone call yesterday afternoon. The purpose of this email is to confirm in writing the framework terms the parties reached at mediation, so that we have a written memorialization of the parties' understanding pending negotiation and execution of a formal binding term sheet and definitive documentation.
Based on our discussions, the parties agreed to the following framework:
1. **Redemption Price.** Pellegrino Capital Group LLC ("PCG") will purchase Meridian Shores Hospitality LLC's ("MSH") 35% membership interest in Palmetto Grand Ventures LLC ("PGV") for a total redemption price of $52,850,000 (fifty-two million eight hundred fifty thousand dollars).
2. **Payment Terms.** The full redemption price of $52,850,000 will be paid by lump sum wire transfer at closing. There will be no installment payments, escrow holdback, or earnout component.
3. **Closing Timeline.** The parties will target closing within approximately ninety (90) days of execution of a definitive Redemption Agreement, subject to satisfaction of customary closing conditions, including receipt of lender consent from Gulf Atlantic National Bank with respect to the existing credit facility (Loan No. CRE-2017-06284).
4. **Mutual Release.** At closing, the parties — including PCG, MSH, Dominic R. Pellegrino, Nathaniel Cordero, and Elena Cordero — will execute a mutual release and settlement agreement providing a full and final release of all claims, counterclaims, cross-claims, and causes of action arising out of or relating to (a) the Operating Agreement of PGV dated June 15, 2017, (b) the exercise of the call option thereunder, and (c) the arbitration proceeding referenced herein.
5. **Dismissal of Arbitration.** Promptly following closing, the parties will file a joint stipulation of dismissal with prejudice of the arbitration proceeding, JAMS Ref. No. 1440032871, currently pending before the Hon. Margaret Liu Chen (Ret.).
6. **Fees and Costs.** Each party will bear its own attorneys' fees, costs, and expenses incurred in connection with the arbitration and the settlement — a mutual walk-away on fees.
7. **Withdrawal of Claims.** MSH will withdraw its bad-faith penalty claim under Section 12.7 of the Operating Agreement, and PCG will withdraw its counterclaim for declaratory relief.
8. **Amended Operating Agreement.** Following closing, PCG will execute an Amended and Restated Operating Agreement of PGV reflecting PCG as the sole member and manager.
9. **Confidentiality.** The terms of the settlement will be subject to customary confidentiality provisions, the specific terms of which will be set forth in the definitive agreements.
**Next Steps.** We propose that Calderwood & Harkness prepare an initial draft of a binding term sheet for circulation by the end of the week of April 1, 2024, with the expectation that the term sheet will be executed promptly thereafter. We will also undertake preparation of the first drafts of the definitive Redemption Agreement, Mutual Release and Settlement Agreement, Assignment of Membership Interest, and related closing documents, which we will circulate separately.
I would appreciate it if you could confirm at your earliest convenience whether this summary accurately reflects MSH's understanding of the framework terms, and please do not hesitate to flag any points of disagreement so that we can address them before we begin drafting.
This communication is without prejudice and is subject in all respects to the negotiation and execution of definitive documentation. No binding obligation shall arise unless and until the parties have executed such definitive documentation.
Victoria, I want to express our appreciation for the constructive engagement of you and your clients throughout the mediation process. We look forward to working with you and Ryan to bring this to a prompt and efficient resolution.
Best regards,
**Francesca Morano** Partner Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131 Tel: (305) 554-8100 Email: fmorano@calderwoodharkness.com
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