1027-00003 · Calderwood & Harkness LLP · Engagement

litigation-hold-notice.docx DOCUMENT Litigation

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP Attorneys at Law

801 Brickell Avenue, Suite 2800 Miami, Florida 33131 Telephone: (305) 814-7200 Facsimile: (305) 814-7201 www.calderwoodharkness.com

March 23, 2023

VIA EMAIL AND OVERNIGHT COURIER

Dominic R. Pellegrino, Managing Member Adriana Pellegrino-Voss, Senior Vice President of Investments Marcus Thiel, Chief Financial Officer Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, FL 33606

Re: LITIGATION HOLD NOTICE — Preservation of Documents and Electronically Stored Information

Matter: Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC JAMS Ref. No.: 1440032871 Calderwood & Harkness Matter No.: 1027-00003

Dear Mr. Pellegrino, Ms. Pellegrino-Voss, and Mr. Thiel:

I. PURPOSE AND LEGAL OBLIGATION

Calderwood & Harkness LLP represents Pellegrino Capital Group LLC ("PCG") in connection with the arbitration demand filed by Meridian Shores Hospitality LLC ("MSH") on March 20, 2023, before JAMS (JAMS Ref. No. 1440032871). The dispute concerns the valuation methodology and buyout price for MSH's thirty-five percent (35%) membership interest in Palmetto Grand Ventures LLC ("PGV"), arising from PCG's exercise of its contractual call option under Section 12.4 of the Operating Agreement of Palmetto Grand Ventures LLC, dated June 15, 2017 (the "Operating Agreement").

This letter constitutes a formal litigation hold notice. It imposes an immediate and continuing obligation on PCG, its officers, employees, agents, consultants, and any other persons under its direction or control to preserve all documents, electronically stored information ("ESI"), and tangible things that are or may be relevant to this dispute. This obligation extends to information in all forms and media, whether stored electronically, on paper, or in any other format, and applies regardless of where such information is located.

This obligation arises under Florida law and federal common law governing the duty to preserve evidence once litigation or arbitration is reasonably anticipated. As you are aware, MSH filed its Demand for Arbitration on March 20, 2023, and PCG's duty to preserve all potentially relevant materials attached no later than that date. Failure to comply with this obligation may result in adverse inferences, monetary sanctions, spoliation findings, or other penalties imposed by the arbitrator or a court of competent jurisdiction.

This hold supersedes any document retention, recycling, or destruction policies that PCG or PGV may have in place that would otherwise result in the alteration, modification, disposal, or destruction of potentially relevant materials. Any such policies must be suspended immediately, to the extent they affect documents and ESI within the scope of this notice, and must remain suspended until further written notice from this firm.

The hold is effective immediately as of the date of this letter — March 23, 2023 — and will remain in full force and effect until Calderwood & Harkness LLP provides express written notice that the hold has been lifted. No individual at PCG, PGV, or any related entity is authorized to release or modify this hold without prior approval from the undersigned counsel.

We recognize that compliance with a litigation hold may require additional effort and may be inconvenient. However, the legal obligation to preserve evidence is absolute and non-discretionary. We appreciate your full cooperation and are available to answer any questions you may have about the scope or implementation of this hold.

II. BACKGROUND OF THE DISPUTE

To provide context for the categories of documents and ESI subject to preservation, the following is a summary of the key facts and events giving rise to this dispute:

Formation of PGV and the Operating Agreement. On June 15, 2017, PCG and MSH entered into the Operating Agreement to form PGV, a Florida limited liability company (Florida Filing No. L17000124583), for the purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a full-service luxury resort located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767. Under the Operating Agreement, PCG holds a sixty-five percent (65%) membership interest and serves as the sole Manager of PGV, while MSH holds a thirty-five percent (35%) membership interest.

The Call Option. Section 12.4 of the Operating Agreement grants PCG a call option to purchase all or any portion of MSH's membership interest in PGV at fair market value, as determined in accordance with the valuation provisions of the Operating Agreement. The call option became exercisable on June 15, 2022, the fifth anniversary of the Operating Agreement's effective date.

Exercise of the Call Option. On January 9, 2023, PCG delivered written notice to MSH exercising its call option under Section 12.4 to purchase MSH's entire thirty-five percent (35%) membership interest in PGV. In accordance with the Operating Agreement's valuation procedures, PCG engaged Whitfield Realty Advisors LLC (Gerald K. Whitfield, MAI) to perform an independent appraisal of PGV's assets.

The Whitfield Appraisal. On February 10, 2023, Whitfield Realty Advisors LLC completed its appraisal, concluding that the fair market value of one hundred percent (100%) of PGV's assets was $118.0 million as of the December 31, 2022 valuation date. Based on this appraisal, and after application of the applicable valuation adjustments contemplated by the Operating Agreement, PCG calculated a buyout price for MSH's thirty-five percent (35%) interest of $41.3 million.

Tender and Rejection. On March 1, 2023, PCG tendered the buyout price of $41.3 million to MSH. MSH rejected the tender on March 10, 2023, asserting that the buyout price materially understated the fair market value of MSH's interest and that the valuation was conducted in bad faith.

The Arbitration Demand. On March 20, 2023, MSH filed a Demand for Arbitration with JAMS alleging, among other things, that: (a) PCG's call-option valuation was conducted in bad faith in violation of Section 12.7 of the Operating Agreement; (b) the Whitfield appraisal materially understated the fair market value of PGV's assets; (c) PCG breached its fiduciary duties to MSH as a co-member of PGV; and (d) PCG breached Section 8.3 of the Operating Agreement by failing to make required capital expenditures and allowing the deferral of approximately $8.2 million in necessary maintenance and repairs at The Palmetto Grand Resort & Spa, thereby depressing the property's value for purposes of the call-option valuation. MSH claims a buyout price of approximately $70.0 million, representing a $28.7 million gap from PCG's tendered price.

MSH is represented by Victoria Castillo, Partner, and Ryan Matsuda, Associate, at Hargrove, Dunlap & Castillo LLP.

PCG's Response. PCG intends to file its Response and Counterclaim on or about April 5, 2023. PCG denies MSH's allegations and will assert that the call-option exercise and valuation were conducted in strict compliance with the terms of the Operating Agreement. Calderwood & Harkness LLP is currently preparing the Response and Counterclaim on PCG's behalf.

Given the nature and breadth of MSH's claims — and the substantial amount in controversy — it is critical that all potentially relevant documents and ESI be preserved in their original form and in their entirety.

III. SCOPE OF PRESERVATION — CATEGORIES OF DOCUMENTS AND ESI

The following categories of documents and ESI must be preserved. This list is intended to be illustrative and not exhaustive. If you are uncertain whether a particular document or category of information falls within the scope of this hold, you should err on the side of preservation and contact Calderwood & Harkness LLP for guidance.

The relevant time period for preservation purposes spans from June 2017 to the present, unless a specific category below indicates otherwise.

3.1 Operating Agreement and Related Formation Documents

All documents relating to the formation, organization, and governance of PGV, including but not limited to:

(a) The Operating Agreement of Palmetto Grand Ventures LLC, dated June 15, 2017, including all amendments, restatements, exhibits, schedules, annexes, and side letters, whether executed or in draft form;

(b) The Articles of Organization and any amendments thereto filed with the Florida Department of State (Florida Filing No. L17000124583);

(c) All capital contribution records for both PCG and MSH, including documentation of the original capital contributions (PCG: $18,562,500; MSH: $10,000,000, as set forth in Section 4.1 of the Operating Agreement) and all subsequent capital contributions, including those relating to the $24.3 million renovation of The Palmetto Grand Resort & Spa (PCG: $15,795,000; MSH: $8,505,000);

(d) All distribution records, preferred return calculations, and capital account statements maintained under Sections 4 and 5 of the Operating Agreement, including calculations of the eight percent (8%) cumulative compounding preferred return;

(e) All correspondence, memoranda, and negotiations relating to the formation of PGV and the negotiation and execution of the Operating Agreement; and

(f) Any amendments, waivers, consents, or modifications to any provision of the Operating Agreement, whether formal or informal.

3.2 Call Option Exercise and Valuation Materials

All documents relating to the exercise of the call option and the determination of the buyout price, including but not limited to:

(a) PCG's call-option exercise notice dated January 9, 2023, including all drafts, internal memoranda, and communications relating to the preparation, review, and delivery of such notice;

(b) All communications with Whitfield Realty Advisors LLC (Gerald K. Whitfield, MAI), including but not limited to engagement letters, fee agreements, data requests, data submissions, draft reports, comments on draft reports, the final appraisal report dated February 10, 2023 (concluding a fair market value of $118.0 million for 100% of PGV's assets), and any supplemental analyses or correspondence;

(c) All internal PCG analyses, memoranda, spreadsheets, financial models, presentations, discussion materials, and working papers relating to the valuation of PGV's assets, the call-option exercise, the determination of the buyout price of $41.3 million, and any alternative valuation scenarios or sensitivity analyses;

(d) All investment committee memoranda, meeting minutes, agendas, presentations, and vote records relating to the call-option exercise, the valuation strategy, the selection of the valuation date, or the determination of the buyout price;

(e) All documents relating to the selection and engagement of Whitfield Realty Advisors LLC as the appraiser, including any consideration of alternative appraisers, requests for proposals, and comparisons of appraiser qualifications or fees;

(f) All communications with MSH regarding the call-option exercise, the valuation process, the Whitfield appraisal, or the buyout price; and

(g) All documents reflecting any prior discussions, analyses, or evaluations of the potential exercise of the call option at any time prior to January 9, 2023.

3.3 The Palmetto Grand Resort & Spa — Property and Operations

All documents relating to the acquisition, renovation, management, and operation of The Palmetto Grand Resort & Spa (650 Mandalay Avenue, Clearwater Beach, FL 33767), including but not limited to:

(a) All documents relating to the acquisition of the property on August 1, 2017, for a purchase price of $87.5 million, including the purchase and sale agreement, title documents, environmental assessments, property condition reports, closing statements, and related correspondence;

(b) All renovation and capital improvement records relating to the $24.3 million renovation conducted between 2017 and 2019, including construction contracts, change orders, draw requests, invoices, architect and engineering plans, inspection reports, completion certificates, and warranties;

(c) All financial statements (audited and unaudited), budgets, forecasts, operating reports, variance analyses, and management reports for PGV and/or the hotel, including but not limited to: (i) 2022 annual revenue of $62.8 million; (ii) 2022 net operating income ("NOI") of $18.4 million; (iii) 2022 EBITDA of $19.7 million; (iv) 2022 revenue per available room ("RevPAR") of $289; and (v) all comparable data for prior fiscal years from 2017 through the present;

(d) All capital expenditure records, maintenance logs, deferred maintenance reports, reserve studies, property condition assessments, engineering reports, and facilities inspection records — these documents are particularly critical given MSH's allegation of approximately $8.2 million in deferred maintenance and PCG's alleged breach of Section 8.3 of the Operating Agreement regarding capital expenditure and maintenance obligations;

(e) The franchise agreement with Aurelian Hotels & Resorts Inc., dated July 15, 2017 (twenty-year term expiring July 14, 2037; franchise fee of five percent (5%) of gross room revenue plus two percent (2%) marketing fund contribution), and all amendments, correspondence, brand standard compliance reports, quality assurance inspection results, and performance reviews;

(f) All STR (Penmark Enterprises) reports, competitive set analyses, market studies, and benchmarking data relating to the hotel's performance relative to its competitive set; and

(g) All management agreements, property management contracts, general manager reports, and staffing records, to the extent they relate to operational decisions affecting the property's financial performance or physical condition.

3.4 Loan and Financing Documents

All documents relating to the financing of PGV's acquisition and operation of the hotel property, including but not limited to:

(a) The loan agreement with Gulf Atlantic National Bank, dated August 1, 2017 (Loan No. CRE-2017-06284), and all amendments, modifications, extensions, waivers, supplements, and related correspondence;

(b) The original loan amount of $61,250,000 (representing a seventy percent (70%) loan-to-value ratio) and all records documenting the outstanding principal balance, which was $48,600,000 as of December 31, 2022;

(c) All loan payment records, amortization schedules, interest rate documentation (SOFR + 2.25%), maturity-related correspondence (maturity date: August 1, 2027), and any refinancing analyses or proposals;

(d) All draw requests, disbursement records, and funding documentation, including records of draws for the renovation;

(e) All compliance certificates, financial covenant reporting, borrowing base certificates, and any notices of default or cure;

(f) All correspondence between PCG, PGV, and Gulf Atlantic National Bank, including communications relating to the call-option exercise or any required lender consent; and

(g) All appraisals, environmental reports, or property condition assessments prepared for or delivered to Gulf Atlantic National Bank.

3.5 Communications with Meridian Shores Hospitality LLC

All communications between any PCG representative and any MSH representative, including but not limited to:

(a) All emails, letters, memoranda, text messages, instant messages, voicemail messages, video or teleconference recordings, and meeting notes exchanged between any PCG personnel and Nathaniel "Nate" Cordero, Elena Cordero, or any other officer, employee, agent, or representative of MSH;

(b) All communications with counsel for MSH, including Victoria Castillo, Ryan Matsuda, or any other attorney or staff member at Hargrove, Dunlap & Castillo LLP;

(c) All communications relating to the tender of the buyout price of $41.3 million on March 1, 2023, and MSH's rejection of the tender on March 10, 2023;

(d) All communications relating to the operating relationship between PCG and MSH, including any disputes or disagreements regarding management decisions, capital expenditures, distributions, or governance of PGV; and

(e) All communications relating to any prior proposals or discussions regarding a buyout of MSH's interest, whether or not in connection with the call option.

3.6 Insurance Materials

All insurance-related documents, including but not limited to:

(a) The managers' liability / directors and officers ("D&O") insurance policy issued by Atlantic Omnivrel Insurance Company (Policy No. AFML-2022-08745), with coverage limits of $10 million per occurrence and $10 million in the aggregate, including all prior policy periods and all declarations pages, endorsements, and exclusions;

(b) All correspondence with Atlantic Omnivrel Insurance Company or its agents, including any claim notices, reservation of rights letters, coverage opinions, and defense cost authorizations;

(c) Any other insurance policies that may provide coverage for claims arising from this dispute, including general liability, errors and omissions, and fiduciary liability policies; and

(d) All correspondence with any insurance broker or agent regarding the placement, renewal, or claims activity under any such policies.

3.7 Accounting and Tax Records

All accounting, tax, and financial records relating to PGV, including but not limited to:

(a) All records, audit work papers, review reports, and communications with Grantham, Pryce & Associates CPAs (Howard Grantham, CPA), located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, FL 33607, relating to PGV;

(b) All federal and state tax returns filed by PGV, including Schedules K-1 issued to PCG and MSH;

(c) All capital account statements, preferred return calculations, waterfall distribution analyses, and investor reporting materials;

(d) All internal accounting records, general ledger entries, journal entries, trial balances, and bank statements for PGV; and

(e) Any communications with tax advisors or accountants regarding the tax treatment of the call-option exercise, the buyout transaction, or any valuation-related matters.

3.8 Governance and Decision-Making Records

All governance and decision-making records for PGV, including but not limited to:

(a) All board or manager meeting minutes, agendas, presentations, and attendance records;

(b) All consent resolutions, written consents, and actions taken without a meeting;

(d) All documents evidencing PCG's exercise of authority as sole Manager of PGV under the Operating Agreement, including decisions regarding capital expenditures, distributions, personnel, vendor contracts, and strategic direction; and

(e) All documents reflecting any required member approvals, consent rights, or information rights of MSH under the Operating Agreement.

IV. TYPES OF MEDIA AND STORAGE LOCATIONS SUBJECT TO HOLD

The preservation obligation encompasses all documents and ESI, regardless of format or storage location. The following is a non-exhaustive list of the types of media and storage locations that must be preserved:

Paper documents: All physical files maintained at PCG's offices at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606, any off-site storage or records retention facilities, and any documents maintained at the hotel property at 650 Mandalay Avenue, Clearwater Beach, FL 33767. This includes correspondence, contracts, handwritten notes, memoranda, printed reports, financial statements, and any other tangible documents.

Email: All email accounts — both active and archived — of Dominic R. Pellegrino, Adriana Pellegrino-Voss, Marcus Thiel, and any other PCG employee or agent who sent or received communications regarding PGV, the call option, the Whitfield appraisal, MSH, The Palmetto Grand Resort & Spa, or any other subject within the scope of this hold. This includes all emails in inbox, sent, archived, and deleted or trash folders, as well as emails that may have been moved to local storage files (e.g., .pst or .ost files).

Electronic files: All files stored on hard drives, shared network drives, cloud storage platforms (including any cloud-based document management systems, file-sharing platforms such as Larkspur Technologies, Hollowell Health IT, Cobalt Ridge Systems, Aldermere Systems, or box, and any collaboration tools such as Meridian Solutions, Northgate Data Systems, or similar platforms), laptops, desktops, tablets, mobile devices, USB drives, external hard drives, and backup tapes or images.

Text messages, instant messages, and messaging applications: All text messages (SMS and Westmark Software), instant messages, and communications sent or received through any messaging applications, including Meridian Services Inc., Signal, Kestrel Data Systems, or any other platform used for internal or external communications about PGV, MSH, or any subject within the scope of this hold.

Voicemail recordings: All voicemail recordings on office phone systems, mobile devices, and any cloud-based voicemail services.

Financial and accounting systems: All data stored in enterprise resource planning ("ERP") software, property management systems ("PMS"), revenue management systems, point-of-sale systems, and any other financial, accounting, or operational technology platforms used for the management and operation of the hotel or PGV.

Social media accounts: Any posts, messages, or communications on social media platforms (including Westmark Health IT, Kestrel Services Inc., Ashford Systems, Northpoint Services Inc., and any other platforms) that relate to the dispute, PGV, MSH, The Palmetto Grand Resort & Spa, or any subject within the scope of this hold.

Personal devices: Personal laptops, smartphones, tablets, and other devices of key custodians (identified in Section V below), to the extent such devices were used for business communications or the storage of business documents relating to PGV, MSH, the call option, or any subject within the scope of this hold.

V. KEY CUSTODIANS

The following individuals are identified as key custodians whose documents and ESI are subject to this hold. This list may be supplemented as additional custodians are identified:

1. Dominic R. Pellegrino, Managing Member, Pellegrino Capital Group LLC

2. Adriana Pellegrino-Voss, Senior Vice President of Investments, Pellegrino Capital Group LLC

3. Marcus Thiel, Chief Financial Officer, Pellegrino Capital Group LLC

4. All administrative assistants, executive assistants, analysts, associates, and other staff members who managed, created, received, or maintained files, documents, or communications related to PGV, MSH, the call option, the Whitfield appraisal, The Palmetto Grand Resort & Spa, or any subject within the scope of this hold

5. Any PGV or hotel-level employees (including, without limitation, the hotel general manager, director of finance, director of engineering, and any asset management personnel) who possess relevant operational, financial, capital expenditure, or maintenance records, to the extent PCG controls such records in its capacity as sole Manager of PGV

Each key custodian bears personal responsibility for preserving all documents and ESI within his or her possession, custody, or control that fall within the scope of this hold. Key custodians must not delete, alter, discard, or destroy any such materials, and must immediately notify Calderwood & Harkness LLP if they become aware of any threat to the preservation of such materials.

VI. IMMEDIATE ACTIONS REQUIRED

PCG must take the following actions immediately upon receipt of this notice:

1. Suspend all routine document destruction. Immediately suspend all routine document destruction, recycling, shredding, or deletion policies, schedules, and practices for all categories of documents and ESI identified in this notice. This suspension must remain in effect for the duration of this hold.

2. Notify all key custodians. Distribute a copy of this Litigation Hold Notice to all key custodians identified in Section V above. Obtain written confirmation from each custodian acknowledging receipt of the notice and understanding of the preservation obligations. The Acknowledgment and Confirmation Form attached hereto as Attachment A must be completed, signed, and returned by each custodian within five (5) business days of receipt.

3. Disable auto-delete features. Immediately disable any auto-delete, auto-archive, or auto-purge features on all email accounts, messaging platforms, voicemail systems, and other electronic communication tools used by the key custodians. Coordinate with PCG's IT department or managed IT services provider to ensure these features are disabled at the system level.

4. Preserve backup tapes and archived data. Ensure that all backup tapes, archived data repositories, and disaster recovery copies covering the relevant time period (June 2017 to present) are preserved and are not overwritten, recycled, or destroyed in accordance with any rotation schedule or retention policy.

5. Implement technical preservation measures. Contact PCG's IT department or managed IT services provider to implement appropriate technical measures to prevent the inadvertent destruction, overwriting, or alteration of documents and ESI within the scope of this hold. Such measures may include, without limitation, placing legal holds on email accounts through the email system's administrative tools, imaging or cloning hard drives of key custodians, and preserving snapshots of cloud storage repositories.

6. Notify third-party custodians. Circulate this notice (or an appropriate version thereof) to any third parties who maintain documents or ESI on behalf of PCG or PGV that fall within the scope of this hold. This includes, but is not limited to:

(a) Grantham, Pryce & Associates CPAs (Howard Grantham, CPA), 4221 West Boy Scout Boulevard, Suite 600, Tampa, FL 33607 — with respect to all accounting, tax, and financial records relating to PGV;

(b) Any property management company, hotel management company, or hotel general manager at The Palmetto Grand Resort & Spa — with respect to operational, financial, capital expenditure, and maintenance records; and

(c) Any other third-party vendors, consultants, or service providers who possess documents or ESI relating to PGV, the hotel property, or any subject within the scope of this hold.

7. Direct questions to Calderwood & Harkness. Forward to Calderwood & Harkness LLP any questions about whether specific documents, data, or categories of information fall within the scope of this hold. When in doubt, preserve. It is far better to preserve too much than too little.

VII. DURATION AND MODIFICATION

This litigation hold remains in full force and effect until Calderwood & Harkness LLP issues a written release expressly terminating the hold. No oral communication, whether from a PCG employee, officer, or any other person, shall be deemed to release or modify this hold.

The scope of this hold may be expanded or narrowed as the arbitration proceedings develop and as discovery obligations are further defined. Calderwood & Harkness LLP will issue supplemental hold notices as necessary to address any changes in scope, the identification of additional custodians, or the identification of additional categories of documents and ESI.

Calderwood & Harkness LLP will issue periodic reminders of this hold to all key custodians at regular intervals throughout the pendency of the arbitration to ensure continued compliance. Key custodians are reminded that the obligation to preserve is ongoing and does not diminish over time.

VIII. CONSEQUENCES OF NON-COMPLIANCE

The importance of compliance with this litigation hold cannot be overstated. We wish to emphasize the following:

The destruction, alteration, concealment, or failure to preserve relevant documents or ESI — whether intentional or negligent — may constitute spoliation of evidence. Spoliation is a serious legal violation that carries significant consequences.

Under Florida law, JAMS arbitration rules, and applicable federal common law, spoliation may give rise to adverse inference instructions (permitting the arbitrator to instruct that the destroyed evidence would have been unfavorable to PCG), monetary sanctions, issue sanctions, preclusion of evidence, or other penalties as the arbitrator deems appropriate.

Additionally, individual PCG personnel who fail to comply with this hold, whether through affirmative destruction or neglect, may expose the company to significant legal and financial consequences — including increased litigation costs, unfavorable rulings, and potential personal liability.

PCG has a duty not only to refrain from destroying documents but also to take affirmative steps to preserve documents and ESI. Passive failure to act — such as allowing auto-delete functions to continue operating or failing to notify relevant custodians — may be treated as spoliation.

We trust that all recipients of this notice appreciate the gravity of these obligations and will act accordingly.

IX. CONTACT INFORMATION AND QUESTIONS

All questions regarding this litigation hold, its scope, its implementation, or the preservation obligations described herein should be directed to:

Francesca Morano, Partner (Responsible Partner) Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131 Direct: (305) 814-7218

Email: fmorano@calderwoodharkness.com

Simone Laroche, Associate (Lead Associate) Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131 Direct: (305) 814-7244

Email: slaroche@calderwoodharkness.com

Calderwood & Harkness Matter No. 1027-00003

Please do not hesitate to contact us with any questions, concerns, or requests for clarification. We are committed to assisting PCG in meeting its preservation obligations fully and efficiently. Prompt communication with this firm regarding any preservation issues is essential to the defense of PCG's interests in this matter.

We appreciate your immediate attention to this matter and your commitment to full compliance with this litigation hold. Please ensure that the Acknowledgment and Confirmation Forms (Attachment A) are completed and returned to Simone Laroche within five (5) business days.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Francesca Morano, Partner

Date: March 23, 2023

Enclosure: Attachment A — Acknowledgment and Confirmation Form

cc: Samuel Eklund, Billing Partner, Calderwood & Harkness LLP Simone Laroche, Lead Associate, Calderwood & Harkness LLP Jeffrey Park, Associate, Calderwood & Harkness LLP

ATTACHMENT A

ACKNOWLEDGMENT AND CONFIRMATION OF RECEIPT OF LITIGATION HOLD NOTICE

Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC JAMS Ref. No. 1440032871 Calderwood & Harkness Matter No. 1027-00003

I, the undersigned, hereby acknowledge and confirm the following:

1. Receipt of Litigation Hold Notice. I have received and carefully reviewed the Litigation Hold Notice dated March 23, 2023 (the "Notice"), prepared by Calderwood & Harkness LLP in connection with the above-referenced arbitration proceeding.

2. Understanding of Preservation Obligations. I understand that I am obligated to preserve all documents and electronically stored information ("ESI") within my possession, custody, or control that fall within the scope of the categories described in the Notice. I understand that this obligation applies to documents and ESI in all formats and media, including paper documents, emails, electronic files, text messages, instant messages, voicemail recordings, and information stored on personal devices to the extent used for business communications relating to Palmetto Grand Ventures LLC, Meridian Shores Hospitality LLC, The Palmetto Grand Resort & Spa, or any other subject identified in the Notice.

3. Suspension of Document Destruction Policies. I commit to immediately suspending any and all document retention, recycling, shredding, or deletion policies, practices, and schedules that would otherwise result in the alteration, modification, or destruction of documents and ESI within the scope of the Notice. I will not delete, alter, discard, destroy, or otherwise dispose of any such materials.

4. Identification of Repositories. I have identified the following repositories, storage locations, devices, and/or accounts in my possession, custody, or control that may contain documents or ESI within the scope of the Notice:

________________________________________

(If additional space is needed, please attach a supplemental page.)

5. Ongoing Obligation. I understand that this preservation obligation is ongoing and will remain in effect until I receive express written notice from Calderwood & Harkness LLP that the hold has been lifted. I understand that periodic reminders will be issued, and I will continue to comply with the Notice regardless of whether I receive such reminders.

6. Notification of Questions or Concerns. I agree to promptly notify Calderwood & Harkness LLP if I have any questions regarding the scope of the Notice, if I become aware of any documents or ESI that may be at risk of destruction, or if I identify additional repositories of potentially relevant materials.

ACKNOWLEDGED AND CONFIRMED:

Name: ________

Title: ________

Signature: ________

Date: ________

Custodian Signature blocks:

________________________________________

Dominic R. Pellegrino Managing Member Pellegrino Capital Group LLC

Date: ________

________________________________________

Adriana Pellegrino-Voss Senior Vice President of Investments Pellegrino Capital Group LLC

Date: ________

________________________________________

Marcus Thiel Chief Financial Officer Pellegrino Capital Group LLC

Date: ________

RETURN INSTRUCTIONS: Completed and signed Acknowledgment and Confirmation Forms must be returned to Simone Laroche, Calderwood & Harkness LLP, via email at slaroche@calderwoodharkness.com, or via overnight courier to Calderwood & Harkness LLP, 801 Brickell Avenue, Suite 2800, Miami, FL 33131, within five (5) business days of receipt of the Litigation Hold Notice. If you have any questions about completing this form, please contact Ms. Laroche at (305) 814-7244.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION Calderwood & Harkness Matter No. 1027-00003

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Attorneys at Law
801 Brickell Avenue, Suite 2800 Miami, Florida 33131 Telephone: (305) 814-7200 Facsimile: (305) 814-7201 www.calderwoodharkness.com
March 23, 2023
VIA EMAIL AND OVERNIGHT COURIER
Dominic R. Pellegrino, Managing Member Adriana Pellegrino-Voss, Senior Vice President of Investments Marcus Thiel, Chief Financial Officer Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, FL 33606
Re: LITIGATION HOLD NOTICE — Preservation of Documents and Electronically Stored Information
Matter: Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC JAMS Ref. No.: 1440032871 Calderwood & Harkness Matter No.: 1027-00003
Dear Mr. Pellegrino, Ms. Pellegrino-Voss, and Mr. Thiel:
I. PURPOSE AND LEGAL OBLIGATION
Calderwood & Harkness LLP represents Pellegrino Capital Group LLC ("PCG") in connection with the arbitration demand filed by Meridian Shores Hospitality LLC ("MSH") on March 20, 2023, before JAMS (JAMS Ref. No. 1440032871). The dispute concerns the valuation methodology and buyout price for MSH's thirty-five percent (35%) membership interest in Palmetto Grand Ventures LLC ("PGV"), arising from PCG's exercise of its contractual call option under Section 12.4 of the Operating Agreement of Palmetto Grand Ventures LLC, dated June 15, 2017 (the "Operating Agreement").
This letter constitutes a formal litigation hold notice. It imposes an immediate and continuing obligation on PCG, its officers, employees, agents, consultants, and any other persons under its direction or control to preserve all documents, electronically stored information ("ESI"), and tangible things that are or may be relevant to this dispute. This obligation extends to information in all forms and media, whether stored electronically, on paper, or in any other format, and applies regardless of where such information is located.
This obligation arises under Florida law and federal common law governing the duty to preserve evidence once litigation or arbitration is reasonably anticipated. As you are aware, MSH filed its Demand for Arbitration on March 20, 2023, and PCG's duty to preserve all potentially relevant materials attached no later than that date. Failure to comply with this obligation may result in adverse inferences, monetary sanctions, spoliation findings, or other penalties imposed by the arbitrator or a court of competent jurisdiction.
This hold supersedes any document retention, recycling, or destruction policies that PCG or PGV may have in place that would otherwise result in the alteration, modification, disposal, or destruction of potentially relevant materials. Any such policies must be suspended immediately, to the extent they affect documents and ESI within the scope of this notice, and must remain suspended until further written notice from this firm.
The hold is effective immediately as of the date of this letter — March 23, 2023 — and will remain in full force and effect until Calderwood & Harkness LLP provides express written notice that the hold has been lifted. No individual at PCG, PGV, or any related entity is authorized to release or modify this hold without prior approval from the undersigned counsel.
We recognize that compliance with a litigation hold may require additional effort and may be inconvenient. However, the legal obligation to preserve evidence is absolute and non-discretionary. We appreciate your full cooperation and are available to answer any questions you may have about the scope or implementation of this hold.
II. BACKGROUND OF THE DISPUTE
To provide context for the categories of documents and ESI subject to preservation, the following is a summary of the key facts and events giving rise to this dispute:
Formation of PGV and the Operating Agreement. On June 15, 2017, PCG and MSH entered into the Operating Agreement to form PGV, a Florida limited liability company (Florida Filing No. L17000124583), for the purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a full-service luxury resort located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767. Under the Operating Agreement, PCG holds a sixty-five percent (65%) membership interest and serves as the sole Manager of PGV, while MSH holds a thirty-five percent (35%) membership interest.
The Call Option. Section 12.4 of the Operating Agreement grants PCG a call option to purchase all or any portion of MSH's membership interest in PGV at fair market value, as determined in accordance with the valuation provisions of the Operating Agreement. The call option became exercisable on June 15, 2022, the fifth anniversary of the Operating Agreement's effective date.
Exercise of the Call Option. On January 9, 2023, PCG delivered written notice to MSH exercising its call option under Section 12.4 to purchase MSH's entire thirty-five percent (35%) membership interest in PGV. In accordance with the Operating Agreement's valuation procedures, PCG engaged Whitfield Realty Advisors LLC (Gerald K. Whitfield, MAI) to perform an independent appraisal of PGV's assets.
The Whitfield Appraisal. On February 10, 2023, Whitfield Realty Advisors LLC completed its appraisal, concluding that the fair market value of one hundred percent (100%) of PGV's assets was $118.0 million as of the December 31, 2022 valuation date. Based on this appraisal, and after application of the applicable valuation adjustments contemplated by the Operating Agreement, PCG calculated a buyout price for MSH's thirty-five percent (35%) interest of $41.3 million.
Tender and Rejection. On March 1, 2023, PCG tendered the buyout price of $41.3 million to MSH. MSH rejected the tender on March 10, 2023, asserting that the buyout price materially understated the fair market value of MSH's interest and that the valuation was conducted in bad faith.
The Arbitration Demand. On March 20, 2023, MSH filed a Demand for Arbitration with JAMS alleging, among other things, that: (a) PCG's call-option valuation was conducted in bad faith in violation of Section 12.7 of the Operating Agreement; (b) the Whitfield appraisal materially understated the fair market value of PGV's assets; (c) PCG breached its fiduciary duties to MSH as a co-member of PGV; and (d) PCG breached Section 8.3 of the Operating Agreement by failing to make required capital expenditures and allowing the deferral of approximately $8.2 million in necessary maintenance and repairs at The Palmetto Grand Resort & Spa, thereby depressing the property's value for purposes of the call-option valuation. MSH claims a buyout price of approximately $70.0 million, representing a $28.7 million gap from PCG's tendered price.
MSH is represented by Victoria Castillo, Partner, and Ryan Matsuda, Associate, at Hargrove, Dunlap & Castillo LLP.
PCG's Response. PCG intends to file its Response and Counterclaim on or about April 5, 2023. PCG denies MSH's allegations and will assert that the call-option exercise and valuation were conducted in strict compliance with the terms of the Operating Agreement. Calderwood & Harkness LLP is currently preparing the Response and Counterclaim on PCG's behalf.
Given the nature and breadth of MSH's claims — and the substantial amount in controversy — it is critical that all potentially relevant documents and ESI be preserved in their original form and in their entirety.
III. SCOPE OF PRESERVATION — CATEGORIES OF DOCUMENTS AND ESI
The following categories of documents and ESI must be preserved. This list is intended to be illustrative and not exhaustive. If you are uncertain whether a particular document or category of information falls within the scope of this hold, you should err on the side of preservation and contact Calderwood & Harkness LLP for guidance.
The relevant time period for preservation purposes spans from June 2017 to the present, unless a specific category below indicates otherwise.
3.1 Operating Agreement and Related Formation Documents
All documents relating to the formation, organization, and governance of PGV, including but not limited to:
(a) The Operating Agreement of Palmetto Grand Ventures LLC, dated June 15, 2017, including all amendments, restatements, exhibits, schedules, annexes, and side letters, whether executed or in draft form;
(b) The Articles of Organization and any amendments thereto filed with the Florida Department of State (Florida Filing No. L17000124583);
(c) All capital contribution records for both PCG and MSH, including documentation of the original capital contributions (PCG: $18,562,500; MSH: $10,000,000, as set forth in Section 4.1 of the Operating Agreement) and all subsequent capital contributions, including those relating to the $24.3 million renovation of The Palmetto Grand Resort & Spa (PCG: $15,795,000; MSH: $8,505,000);
(d) All distribution records, preferred return calculations, and capital account statements maintained under Sections 4 and 5 of the Operating Agreement, including calculations of the eight percent (8%) cumulative compounding preferred return;
(e) All correspondence, memoranda, and negotiations relating to the formation of PGV and the negotiation and execution of the Operating Agreement; and
(f) Any amendments, waivers, consents, or modifications to any provision of the Operating Agreement, whether formal or informal.
3.2 Call Option Exercise and Valuation Materials
All documents relating to the exercise of the call option and the determination of the buyout price, including but not limited to:
(a) PCG's call-option exercise notice dated January 9, 2023, including all drafts, internal memoranda, and communications relating to the preparation, review, and delivery of such notice;
(b) All communications with Whitfield Realty Advisors LLC (Gerald K. Whitfield, MAI), including but not limited to engagement letters, fee agreements, data requests, data submissions, draft reports, comments on draft reports, the final appraisal report dated February 10, 2023 (concluding a fair market value of $118.0 million for 100% of PGV's assets), and any supplemental analyses or correspondence;
(c) All internal PCG analyses, memoranda, spreadsheets, financial models, presentations, discussion materials, and working papers relating to the valuation of PGV's assets, the call-option exercise, the determination of the buyout price of $41.3 million, and any alternative valuation scenarios or sensitivity analyses;
(d) All investment committee memoranda, meeting minutes, agendas, presentations, and vote records relating to the call-option exercise, the valuation strategy, the selection of the valuation date, or the determination of the buyout price;
(e) All documents relating to the selection and engagement of Whitfield Realty Advisors LLC as the appraiser, including any consideration of alternative appraisers, requests for proposals, and comparisons of appraiser qualifications or fees;
(f) All communications with MSH regarding the call-option exercise, the valuation process, the Whitfield appraisal, or the buyout price; and
(g) All documents reflecting any prior discussions, analyses, or evaluations of the potential exercise of the call option at any time prior to January 9, 2023.
3.3 The Palmetto Grand Resort & Spa — Property and Operations
All documents relating to the acquisition, renovation, management, and operation of The Palmetto Grand Resort & Spa (650 Mandalay Avenue, Clearwater Beach, FL 33767), including but not limited to:
(a) All documents relating to the acquisition of the property on August 1, 2017, for a purchase price of $87.5 million, including the purchase and sale agreement, title documents, environmental assessments, property condition reports, closing statements, and related correspondence;
(b) All renovation and capital improvement records relating to the $24.3 million renovation conducted between 2017 and 2019, including construction contracts, change orders, draw requests, invoices, architect and engineering plans, inspection reports, completion certificates, and warranties;
(c) All financial statements (audited and unaudited), budgets, forecasts, operating reports, variance analyses, and management reports for PGV and/or the hotel, including but not limited to: (i) 2022 annual revenue of $62.8 million; (ii) 2022 net operating income ("NOI") of $18.4 million; (iii) 2022 EBITDA of $19.7 million; (iv) 2022 revenue per available room ("RevPAR") of $289; and (v) all comparable data for prior fiscal years from 2017 through the present;
(d) All capital expenditure records, maintenance logs, deferred maintenance reports, reserve studies, property condition assessments, engineering reports, and facilities inspection records — these documents are particularly critical given MSH's allegation of approximately $8.2 million in deferred maintenance and PCG's alleged breach of Section 8.3 of the Operating Agreement regarding capital expenditure and maintenance obligations;
(e) The franchise agreement with Aurelian Hotels & Resorts Inc., dated July 15, 2017 (twenty-year term expiring July 14, 2037; franchise fee of five percent (5%) of gross room revenue plus two percent (2%) marketing fund contribution), and all amendments, correspondence, brand standard compliance reports, quality assurance inspection results, and performance reviews;
(f) All STR (Penmark Enterprises) reports, competitive set analyses, market studies, and benchmarking data relating to the hotel's performance relative to its competitive set; and
(g) All management agreements, property management contracts, general manager reports, and staffing records, to the extent they relate to operational decisions affecting the property's financial performance or physical condition.
3.4 Loan and Financing Documents
All documents relating to the financing of PGV's acquisition and operation of the hotel property, including but not limited to:
(a) The loan agreement with Gulf Atlantic National Bank, dated August 1, 2017 (Loan No. CRE-2017-06284), and all amendments, modifications, extensions, waivers, supplements, and related correspondence;
(b) The original loan amount of $61,250,000 (representing a seventy percent (70%) loan-to-value ratio) and all records documenting the outstanding principal balance, which was $48,600,000 as of December 31, 2022;
(c) All loan payment records, amortization schedules, interest rate documentation (SOFR + 2.25%), maturity-related correspondence (maturity date: August 1, 2027), and any refinancing analyses or proposals;
(d) All draw requests, disbursement records, and funding documentation, including records of draws for the renovation;
(e) All compliance certificates, financial covenant reporting, borrowing base certificates, and any notices of default or cure;
(f) All correspondence between PCG, PGV, and Gulf Atlantic National Bank, including communications relating to the call-option exercise or any required lender consent; and
(g) All appraisals, environmental reports, or property condition assessments prepared for or delivered to Gulf Atlantic National Bank.
3.5 Communications with Meridian Shores Hospitality LLC
All communications between any PCG representative and any MSH representative, including but not limited to:
(a) All emails, letters, memoranda, text messages, instant messages, voicemail messages, video or teleconference recordings, and meeting notes exchanged between any PCG personnel and Nathaniel "Nate" Cordero, Elena Cordero, or any other officer, employee, agent, or representative of MSH;
(b) All communications with counsel for MSH, including Victoria Castillo, Ryan Matsuda, or any other attorney or staff member at Hargrove, Dunlap & Castillo LLP;
(c) All communications relating to the tender of the buyout price of $41.3 million on March 1, 2023, and MSH's rejection of the tender on March 10, 2023;
(d) All communications relating to the operating relationship between PCG and MSH, including any disputes or disagreements regarding management decisions, capital expenditures, distributions, or governance of PGV; and
(e) All communications relating to any prior proposals or discussions regarding a buyout of MSH's interest, whether or not in connection with the call option.
3.6 Insurance Materials
All insurance-related documents, including but not limited to:
(a) The managers' liability / directors and officers ("D&O") insurance policy issued by Atlantic Omnivrel Insurance Company (Policy No. AFML-2022-08745), with coverage limits of $10 million per occurrence and $10 million in the aggregate, including all prior policy periods and all declarations pages, endorsements, and exclusions;
(b) All correspondence with Atlantic Omnivrel Insurance Company or its agents, including any claim notices, reservation of rights letters, coverage opinions, and defense cost authorizations;
(c) Any other insurance policies that may provide coverage for claims arising from this dispute, including general liability, errors and omissions, and fiduciary liability policies; and
(d) All correspondence with any insurance broker or agent regarding the placement, renewal, or claims activity under any such policies.
3.7 Accounting and Tax Records
All accounting, tax, and financial records relating to PGV, including but not limited to:
(a) All records, audit work papers, review reports, and communications with Grantham, Pryce & Associates CPAs (Howard Grantham, CPA), located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, FL 33607, relating to PGV;
(b) All federal and state tax returns filed by PGV, including Schedules K-1 issued to PCG and MSH;
(c) All capital account statements, preferred return calculations, waterfall distribution analyses, and investor reporting materials;
(d) All internal accounting records, general ledger entries, journal entries, trial balances, and bank statements for PGV; and
(e) Any communications with tax advisors or accountants regarding the tax treatment of the call-option exercise, the buyout transaction, or any valuation-related matters.
3.8 Governance and Decision-Making Records
All governance and decision-making records for PGV, including but not limited to:
(a) All board or manager meeting minutes, agendas, presentations, and attendance records;
(b) All consent resolutions, written consents, and actions taken without a meeting;
(c) All governance documents, including certificates of formation, operating agreement amendments, and member registers;
(d) All documents evidencing PCG's exercise of authority as sole Manager of PGV under the Operating Agreement, including decisions regarding capital expenditures, distributions, personnel, vendor contracts, and strategic direction; and
(e) All documents reflecting any required member approvals, consent rights, or information rights of MSH under the Operating Agreement.
IV. TYPES OF MEDIA AND STORAGE LOCATIONS SUBJECT TO HOLD
The preservation obligation encompasses all documents and ESI, regardless of format or storage location. The following is a non-exhaustive list of the types of media and storage locations that must be preserved:
Paper documents: All physical files maintained at PCG's offices at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606, any off-site storage or records retention facilities, and any documents maintained at the hotel property at 650 Mandalay Avenue, Clearwater Beach, FL 33767. This includes correspondence, contracts, handwritten notes, memoranda, printed reports, financial statements, and any other tangible documents.
Email: All email accounts — both active and archived — of Dominic R. Pellegrino, Adriana Pellegrino-Voss, Marcus Thiel, and any other PCG employee or agent who sent or received communications regarding PGV, the call option, the Whitfield appraisal, MSH, The Palmetto Grand Resort & Spa, or any other subject within the scope of this hold. This includes all emails in inbox, sent, archived, and deleted or trash folders, as well as emails that may have been moved to local storage files (e.g., .pst or .ost files).
Electronic files: All files stored on hard drives, shared network drives, cloud storage platforms (including any cloud-based document management systems, file-sharing platforms such as Larkspur Technologies, Hollowell Health IT, Cobalt Ridge Systems, Aldermere Systems, or box, and any collaboration tools such as Meridian Solutions, Northgate Data Systems, or similar platforms), laptops, desktops, tablets, mobile devices, USB drives, external hard drives, and backup tapes or images.
Text messages, instant messages, and messaging applications: All text messages (SMS and Westmark Software), instant messages, and communications sent or received through any messaging applications, including Meridian Services Inc., Signal, Kestrel Data Systems, or any other platform used for internal or external communications about PGV, MSH, or any subject within the scope of this hold.
Voicemail recordings: All voicemail recordings on office phone systems, mobile devices, and any cloud-based voicemail services.
Financial and accounting systems: All data stored in enterprise resource planning ("ERP") software, property management systems ("PMS"), revenue management systems, point-of-sale systems, and any other financial, accounting, or operational technology platforms used for the management and operation of the hotel or PGV.
Social media accounts: Any posts, messages, or communications on social media platforms (including Westmark Health IT, Kestrel Services Inc., Ashford Systems, Northpoint Services Inc., and any other platforms) that relate to the dispute, PGV, MSH, The Palmetto Grand Resort & Spa, or any subject within the scope of this hold.
Personal devices: Personal laptops, smartphones, tablets, and other devices of key custodians (identified in Section V below), to the extent such devices were used for business communications or the storage of business documents relating to PGV, MSH, the call option, or any subject within the scope of this hold.
V. KEY CUSTODIANS
The following individuals are identified as key custodians whose documents and ESI are subject to this hold. This list may be supplemented as additional custodians are identified:
1.  Dominic R. Pellegrino, Managing Member, Pellegrino Capital Group LLC
2.  Adriana Pellegrino-Voss, Senior Vice President of Investments, Pellegrino Capital Group LLC
3.  Marcus Thiel, Chief Financial Officer, Pellegrino Capital Group LLC
4.  All administrative assistants, executive assistants, analysts, associates, and other staff members who managed, created, received, or maintained files, documents, or communications related to PGV, MSH, the call option, the Whitfield appraisal, The Palmetto Grand Resort & Spa, or any subject within the scope of this hold
5.  Any PGV or hotel-level employees (including, without limitation, the hotel general manager, director of finance, director of engineering, and any asset management personnel) who possess relevant operational, financial, capital expenditure, or maintenance records, to the extent PCG controls such records in its capacity as sole Manager of PGV
Each key custodian bears personal responsibility for preserving all documents and ESI within his or her possession, custody, or control that fall within the scope of this hold. Key custodians must not delete, alter, discard, or destroy any such materials, and must immediately notify Calderwood & Harkness LLP if they become aware of any threat to the preservation of such materials.
VI. IMMEDIATE ACTIONS REQUIRED
PCG must take the following actions immediately upon receipt of this notice:
1.  Suspend all routine document destruction. Immediately suspend all routine document destruction, recycling, shredding, or deletion policies, schedules, and practices for all categories of documents and ESI identified in this notice. This suspension must remain in effect for the duration of this hold.
2.  Notify all key custodians. Distribute a copy of this Litigation Hold Notice to all key custodians identified in Section V above. Obtain written confirmation from each custodian acknowledging receipt of the notice and understanding of the preservation obligations. The Acknowledgment and Confirmation Form attached hereto as Attachment A must be completed, signed, and returned by each custodian within five (5) business days of receipt.
3.  Disable auto-delete features. Immediately disable any auto-delete, auto-archive, or auto-purge features on all email accounts, messaging platforms, voicemail systems, and other electronic communication tools used by the key custodians. Coordinate with PCG's IT department or managed IT services provider to ensure these features are disabled at the system level.
4.  Preserve backup tapes and archived data. Ensure that all backup tapes, archived data repositories, and disaster recovery copies covering the relevant time period (June 2017 to present) are preserved and are not overwritten, recycled, or destroyed in accordance with any rotation schedule or retention policy.
5.  Implement technical preservation measures. Contact PCG's IT department or managed IT services provider to implement appropriate technical measures to prevent the inadvertent destruction, overwriting, or alteration of documents and ESI within the scope of this hold. Such measures may include, without limitation, placing legal holds on email accounts through the email system's administrative tools, imaging or cloning hard drives of key custodians, and preserving snapshots of cloud storage repositories.
6.  Notify third-party custodians. Circulate this notice (or an appropriate version thereof) to any third parties who maintain documents or ESI on behalf of PCG or PGV that fall within the scope of this hold. This includes, but is not limited to:
(a) Grantham, Pryce & Associates CPAs (Howard Grantham, CPA), 4221 West Boy Scout Boulevard, Suite 600, Tampa, FL 33607 — with respect to all accounting, tax, and financial records relating to PGV;
(b) Any property management company, hotel management company, or hotel general manager at The Palmetto Grand Resort & Spa — with respect to operational, financial, capital expenditure, and maintenance records; and
(c) Any other third-party vendors, consultants, or service providers who possess documents or ESI relating to PGV, the hotel property, or any subject within the scope of this hold.
7.  Direct questions to Calderwood & Harkness. Forward to Calderwood & Harkness LLP any questions about whether specific documents, data, or categories of information fall within the scope of this hold. When in doubt, preserve. It is far better to preserve too much than too little.
VII. DURATION AND MODIFICATION
This litigation hold remains in full force and effect until Calderwood & Harkness LLP issues a written release expressly terminating the hold. No oral communication, whether from a PCG employee, officer, or any other person, shall be deemed to release or modify this hold.
The scope of this hold may be expanded or narrowed as the arbitration proceedings develop and as discovery obligations are further defined. Calderwood & Harkness LLP will issue supplemental hold notices as necessary to address any changes in scope, the identification of additional custodians, or the identification of additional categories of documents and ESI.
Calderwood & Harkness LLP will issue periodic reminders of this hold to all key custodians at regular intervals throughout the pendency of the arbitration to ensure continued compliance. Key custodians are reminded that the obligation to preserve is ongoing and does not diminish over time.
VIII. CONSEQUENCES OF NON-COMPLIANCE
The importance of compliance with this litigation hold cannot be overstated. We wish to emphasize the following:
The destruction, alteration, concealment, or failure to preserve relevant documents or ESI — whether intentional or negligent — may constitute spoliation of evidence. Spoliation is a serious legal violation that carries significant consequences.
Under Florida law, JAMS arbitration rules, and applicable federal common law, spoliation may give rise to adverse inference instructions (permitting the arbitrator to instruct that the destroyed evidence would have been unfavorable to PCG), monetary sanctions, issue sanctions, preclusion of evidence, or other penalties as the arbitrator deems appropriate.
Additionally, individual PCG personnel who fail to comply with this hold, whether through affirmative destruction or neglect, may expose the company to significant legal and financial consequences — including increased litigation costs, unfavorable rulings, and potential personal liability.
PCG has a duty not only to refrain from destroying documents but also to take affirmative steps to preserve documents and ESI. Passive failure to act — such as allowing auto-delete functions to continue operating or failing to notify relevant custodians — may be treated as spoliation.
We trust that all recipients of this notice appreciate the gravity of these obligations and will act accordingly.
IX. CONTACT INFORMATION AND QUESTIONS
All questions regarding this litigation hold, its scope, its implementation, or the preservation obligations described herein should be directed to:
Francesca Morano, Partner (Responsible Partner) Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131 Direct: (305) 814-7218
Email: fmorano@calderwoodharkness.com
Simone Laroche, Associate (Lead Associate) Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131 Direct: (305) 814-7244
Email: slaroche@calderwoodharkness.com
Calderwood & Harkness Matter No. 1027-00003
Please do not hesitate to contact us with any questions, concerns, or requests for clarification. We are committed to assisting PCG in meeting its preservation obligations fully and efficiently. Prompt communication with this firm regarding any preservation issues is essential to the defense of PCG's interests in this matter.
We appreciate your immediate attention to this matter and your commitment to full compliance with this litigation hold. Please ensure that the Acknowledgment and Confirmation Forms (Attachment A) are completed and returned to Simone Laroche within five (5) business days.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano, Partner
Date: March 23, 2023
Enclosure: Attachment A — Acknowledgment and Confirmation Form
cc: Samuel Eklund, Billing Partner, Calderwood & Harkness LLP Simone Laroche, Lead Associate, Calderwood & Harkness LLP Jeffrey Park, Associate, Calderwood & Harkness LLP
ATTACHMENT A
ACKNOWLEDGMENT AND CONFIRMATION OF RECEIPT OF LITIGATION HOLD NOTICE
Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC JAMS Ref. No. 1440032871 Calderwood & Harkness Matter No. 1027-00003
I, the undersigned, hereby acknowledge and confirm the following:
1. Receipt of Litigation Hold Notice. I have received and carefully reviewed the Litigation Hold Notice dated March 23, 2023 (the "Notice"), prepared by Calderwood & Harkness LLP in connection with the above-referenced arbitration proceeding.
2. Understanding of Preservation Obligations. I understand that I am obligated to preserve all documents and electronically stored information ("ESI") within my possession, custody, or control that fall within the scope of the categories described in the Notice. I understand that this obligation applies to documents and ESI in all formats and media, including paper documents, emails, electronic files, text messages, instant messages, voicemail recordings, and information stored on personal devices to the extent used for business communications relating to Palmetto Grand Ventures LLC, Meridian Shores Hospitality LLC, The Palmetto Grand Resort & Spa, or any other subject identified in the Notice.
3. Suspension of Document Destruction Policies. I commit to immediately suspending any and all document retention, recycling, shredding, or deletion policies, practices, and schedules that would otherwise result in the alteration, modification, or destruction of documents and ESI within the scope of the Notice. I will not delete, alter, discard, destroy, or otherwise dispose of any such materials.
4. Identification of Repositories. I have identified the following repositories, storage locations, devices, and/or accounts in my possession, custody, or control that may contain documents or ESI within the scope of the Notice:
________________________________________
________________________________________
________________________________________
________________________________________
________________________________________
(If additional space is needed, please attach a supplemental page.)
5. Ongoing Obligation. I understand that this preservation obligation is ongoing and will remain in effect until I receive express written notice from Calderwood & Harkness LLP that the hold has been lifted. I understand that periodic reminders will be issued, and I will continue to comply with the Notice regardless of whether I receive such reminders.
6. Notification of Questions or Concerns. I agree to promptly notify Calderwood & Harkness LLP if I have any questions regarding the scope of the Notice, if I become aware of any documents or ESI that may be at risk of destruction, or if I identify additional repositories of potentially relevant materials.
ACKNOWLEDGED AND CONFIRMED:
Name: ________
Title: ________
Signature: ________
Date: ________
Custodian Signature blocks:
________________________________________
Dominic R. Pellegrino Managing Member Pellegrino Capital Group LLC
Date: ________
________________________________________
Adriana Pellegrino-Voss Senior Vice President of Investments Pellegrino Capital Group LLC
Date: ________
________________________________________
Marcus Thiel Chief Financial Officer Pellegrino Capital Group LLC
Date: ________
RETURN INSTRUCTIONS: Completed and signed Acknowledgment and Confirmation Forms must be returned to Simone Laroche, Calderwood & Harkness LLP, via email at slaroche@calderwoodharkness.com, or via overnight courier to Calderwood & Harkness LLP, 801 Brickell Avenue, Suite 2800, Miami, FL 33131, within five (5) business days of receipt of the Litigation Hold Notice. If you have any questions about completing this form, please contact Ms. Laroche at (305) 814-7244.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION Calderwood & Harkness Matter No. 1027-00003

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

VIA EMAIL AND OVERNIGHT COURIER

I. PURPOSE AND LEGAL OBLIGATION

II. BACKGROUND OF THE DISPUTE

IV. TYPES OF MEDIA AND STORAGE LOCATIONS SUBJECT TO HOLD

V. KEY CUSTODIANS

VI. IMMEDIATE ACTIONS REQUIRED

VII. DURATION AND MODIFICATION

VIII. CONSEQUENCES OF NON-COMPLIANCE

IX. CONTACT INFORMATION AND QUESTIONS

CALDERWOOD & HARKNESS LLP

ATTACHMENT A

ACKNOWLEDGMENT AND CONFIRMATION OF RECEIPT OF LITIGATION HOLD NOTICE

ACKNOWLEDGED AND CONFIRMED:

Record

Parties

Dates

Amounts