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AMENDED AND RESTATED OPERATING AGREEMENT

PALMETTO GRAND VENTURES LLC

a Florida Limited Liability Company

Effective as of July 15, 2024

AMENDED AND RESTATED OPERATING AGREEMENT

PALMETTO GRAND VENTURES LLC

a Florida Limited Liability Company

This Amended and Restated Operating Agreement (this "Agreement") of Palmetto Grand Ventures LLC, a Florida limited liability company (the "Company" or "PGV"), is entered into and effective as of July 15, 2024 (the "Effective Date"), by Pellegrino Capital Group LLC, a Florida limited liability company ("PCG"), as the sole member of the Company.

This Agreement amends, restates, and supersedes in its entirety the Operating Agreement of Palmetto Grand Ventures LLC dated as of June 15, 2017 (the "Original Operating Agreement"), as amended from time to time prior to the date hereof. From and after the Effective Date, the Original Operating Agreement shall be of no further force or effect, and the rights, duties, and obligations of the Company and its Member shall be governed exclusively by this Agreement and the Act (as defined below).

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RECITALS

WHEREAS, Palmetto Grand Ventures LLC (the "Company" or "PGV") is a Florida limited liability company duly formed on June 15, 2017, by the filing of Articles of Organization with the Secretary of State of the State of Florida under Filing No. L17000124583, and is governed by the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes, as amended from time to time (the "Act");

WHEREAS, the Company was originally formed pursuant to that certain Operating Agreement dated as of June 15, 2017 (the "Original Operating Agreement"), entered into by and between Pellegrino Capital Group LLC ("PCG"), a Florida limited liability company, and Meridian Shores Hospitality LLC ("MSH"), a Delaware limited liability company, as the original members of the Company;

WHEREAS, under the Original Operating Agreement, PCG held a sixty-five percent (65%) Membership Interest in the Company and MSH held a thirty-five percent (35%) Membership Interest in the Company;

WHEREAS, the Company was formed for the primary purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort property located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767 (the "Property");

WHEREAS, the Company acquired the Property on August 1, 2017, for a total purchase price of Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000), financed in part by a loan from Gulf Atlantic National Bank in the original principal amount of Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000) (Loan No. CRE-2017-06284) (the "GANB Loan"), with the balance funded by equity contributions from PCG and MSH;

WHEREAS, PCG duly exercised its call option under Section 12.4 of the Original Operating Agreement by written notice to MSH dated January 9, 2023, to purchase MSH's entire thirty-five percent (35%) Membership Interest in the Company;

WHEREAS, following a dispute between PCG and MSH regarding the fair market valuation of MSH's Membership Interest for purposes of the call option, and a binding arbitration proceeding administered by JAMS (Ref. No. 1440032871), PCG and MSH entered into that certain Redemption Agreement dated as of May 20, 2024 (the "Redemption Agreement"), and that certain Mutual Release and Settlement Agreement dated as of May 20, 2024, pursuant to which PCG agreed to acquire, and MSH agreed to sell, MSH's entire thirty-five percent (35%) Membership Interest in the Company for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000);

WHEREAS, the closing of the redemption of MSH's Membership Interest (the "Redemption") occurred on June 28, 2024, and MSH duly assigned and transferred its entire Membership Interest in the Company to PCG pursuant to an Assignment of Membership Interest dated June 28, 2024, and all conditions to closing under the Redemption Agreement were satisfied or waived;

WHEREAS, as a result of the Redemption, PCG is now the sole member of the Company, holding one hundred percent (100%) of the Membership Interests in the Company, and PCG desires to amend and restate the Original Operating Agreement in its entirety to reflect the current ownership structure, governance, and operational framework of the Company as a single-member limited liability company; and

NOW, THEREFORE, PCG, as the sole Member of the Company, hereby adopts this Amended and Restated Operating Agreement, effective as of July 15, 2024, upon the terms and conditions set forth herein.

ARTICLE I — DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them elsewhere in this Agreement.

Section 1.1 "Act" means the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes, as amended from time to time, and any successor statute thereto.

Section 1.2 "Agreement" means this Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, as it may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.

Section 1.3 "Aurelian Franchise Agreement" means that certain Franchise Agreement, dated as of July 15, 2017, between the Company and Aurelian Hotels & Resorts Inc., a Delaware corporation ("Aurelian"), with an initial term of twenty (20) years (expiring on July 14, 2037), pursuant to which the Company operates the Property under the Aurelian Hotels & Resorts brand and is obligated to pay a franchise fee equal to five percent (5%) of gross room revenue, together with a marketing fund contribution equal to two percent (2%) of gross room revenue.

Section 1.4 "Capital Contribution" means any cash, property, or other assets contributed to the Company by the Member (or any predecessor member), as reflected in the books and records of the Company.

Section 1.5 "Company" means Palmetto Grand Ventures LLC, a Florida limited liability company, formed under the Act with Filing No. L17000124583 with the Secretary of State of the State of Florida.

Section 1.6 "Effective Date" means July 15, 2024.

Section 1.7 "EIN" means the Company's federal employer identification number, which is 82-5063921.

Section 1.8 "GANB Loan" means the loan from Gulf Atlantic National Bank (Loan No. CRE-2017-06284), originally dated August 1, 2017, in the original principal amount of Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000), bearing interest at SOFR plus 2.25% per annum (converted from LIBOR plus 2.25% per annum pursuant to a rate conversion amendment effective January 1, 2022), with a maturity date of August 1, 2027, as amended and supplemented from time to time, including by that certain First Amendment to Loan Agreement dated June 2024, pursuant to which the Lender approved an incremental draw in the amount of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) in connection with the Redemption and consented to the transfer of MSH's Membership Interest to PCG.

Section 1.9 "GAAP" means United States generally accepted accounting principles as in effect from time to time, consistently applied.

Section 1.10 "Manager" means PCG, in its capacity as the sole manager of the Company, and any successor manager appointed in accordance with this Agreement.

Section 1.11 "Member" means PCG, as the sole member of the Company, and any Person admitted as an additional or substitute member of the Company in accordance with this Agreement and the Act.

Section 1.12 "Membership Interest" means the entire ownership interest of a member in the Company, including all economic rights (including the right to share in profits, losses, and distributions), all governance rights (including voting and consent rights), and all other rights and obligations arising under this Agreement or the Act.

Section 1.13 "MSH" means Meridian Shores Hospitality LLC, a Delaware limited liability company, a former member of the Company whose thirty-five percent (35%) Membership Interest was redeemed and assigned to PCG effective June 28, 2024.

Section 1.14 "Original Operating Agreement" means the Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017, entered into by and between PCG and MSH, as amended prior to the Effective Date, which is hereby superseded in its entirety by this Agreement.

Section 1.15 "PCG" means Pellegrino Capital Group LLC, a Florida limited liability company, with its principal office at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, and federal employer identification number 83-2147605.

Section 1.16 "Person" means any individual, corporation, limited liability company, partnership, limited partnership, joint venture, trust, estate, unincorporated association, governmental authority, or other entity.

Section 1.17 "Property" means The Palmetto Grand Resort & Spa, a 312-room luxury beachfront resort (including forty-two (42) suites), together with all improvements, fixtures, furniture, equipment, and personal property associated therewith, located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more particularly described in Exhibit B attached hereto.

Section 1.18 "Redemption" means the purchase by PCG of MSH's thirty-five percent (35%) Membership Interest in the Company for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), which closed on June 28, 2024, pursuant to the terms of the Redemption Agreement.

Section 1.19 "Redemption Agreement" means that certain Redemption Agreement, dated as of May 20, 2024, by and between PCG and MSH, pursuant to which PCG agreed to purchase, and MSH agreed to sell, MSH's entire thirty-five percent (35%) Membership Interest in the Company.

Section 1.20 "Treasury Regulations" means the regulations promulgated under the Internal Revenue Code of 1986, as amended, by the United States Department of the Treasury, as in effect from time to time.

ARTICLE II — ORGANIZATION

Section 2.1 — Formation. The Company was formed as a Florida limited liability company on June 15, 2017, by the filing of Articles of Organization with the Secretary of State of the State of Florida, and was assigned Filing No. L17000124583. The Company is, and shall continue to be, governed by the Act and this Agreement. In the event of any conflict between the provisions of this Agreement and the non-mandatory provisions of the Act, the provisions of this Agreement shall control to the maximum extent permitted by law. All actions taken in connection with the formation and organization of the Company prior to the Effective Date are hereby ratified and confirmed.

Section 2.2 — Name. The legal name of the Company is "Palmetto Grand Ventures LLC." The Manager may cause the Company to conduct business under such assumed or fictitious names as the Manager may determine from time to time, provided that appropriate filings are made in accordance with applicable law.

Section 2.3 — Registered Office and Registered Agent.

(a) The registered office of the Company in the State of Florida is located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606.

(b) The registered agent of the Company for service of process in the State of Florida is CT Agents of Florida LLC, located at 1201 Hays Street, Tallahassee, Florida 32301.

(c) The Manager may change the registered office or the registered agent of the Company at any time and from time to time in accordance with the Act by filing the appropriate amendment or statement with the Secretary of State of the State of Florida.

Section 2.4 — Principal Office. The principal office of the Company shall be located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other place or places as the Manager may designate from time to time. The Manager shall give notice to all Persons entitled thereto of any change in the Company's principal office.

Section 2.5 — Purpose. The Company is organized for the purpose of:

(a) Owning, operating, managing, maintaining, renovating, improving, financing, refinancing, encumbering, and disposing of The Palmetto Grand Resort & Spa, a 312-room full-service luxury beachfront resort located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, including its forty-two (42) suites, two (2) restaurants, rooftop bar, approximately 18,000-square-foot spa and wellness center, approximately 22,000 square feet of meeting and event space, beachfront cabana service, and all related amenities, improvements, and facilities; and

(b) Engaging in any and all lawful activities that are incidental, necessary, or convenient to the foregoing purpose, or that are otherwise permitted for a limited liability company under the Act.

Nothing in this Agreement shall be construed to limit the Company's authority to engage in any lawful business or activity permitted under the Act; provided, however, that the Manager shall use commercially reasonable efforts to ensure that the Company's activities are at all times consistent with the purposes described above and with the terms and conditions of the GANB Loan documents, the Aurelian Franchise Agreement, and any other material agreements to which the Company is a party.

Section 2.6 — Term. The Company shall have perpetual existence and shall continue in full force and effect until dissolved and terminated in accordance with the provisions of Article IX of this Agreement or the Act. The death, dissolution, retirement, resignation, expulsion, or bankruptcy of a Member shall not cause the dissolution of the Company.

Section 2.7 — EIN and Tax Classification.

(a) The Company's federal employer identification number is 82-5063921.

(b) For so long as the Company has a single member, the Company shall be treated as a disregarded entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3, unless PCG, as the sole Member, elects otherwise by filing IRS Form 8832 (Entity Classification Election). In the event that PCG makes such an election, or in the event that additional members are admitted to the Company, the tax classification of the Company shall be as determined by the Manager in accordance with applicable law.

(c) The Company shall make all filings and take all actions necessary to effectuate and maintain its desired tax classification.

ARTICLE III — MEMBER

Section 3.1 — Sole Member. The sole member of the Company as of the Effective Date is:

Pellegrino Capital Group LLC A Florida limited liability company Principal Address: 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606 Federal EIN: 83-2147605 Membership Interest: 100%

PCG holds one hundred percent (100%) of the Membership Interests in the Company, including all economic rights, governance rights, and all other rights and interests arising under this Agreement and the Act. The information regarding PCG's Membership Interest and Capital Contributions is set forth on Exhibit A attached hereto and incorporated herein by reference.

Section 3.2 — Admission of Additional Members. No additional members shall be admitted to the Company except with the prior written consent of the Manager (i.e., PCG in its capacity as sole Manager) and upon the execution of an amendment to this Agreement reflecting the admission of such additional member and the terms upon which such member is admitted, including the Membership Interest to be held by such additional member, any Capital Contributions required, and any modifications to the governance, distribution, and allocation provisions of this Agreement. Any admission of additional members shall be effected in compliance with the Act and all applicable laws, and shall be subject to the terms and conditions of any third-party agreements binding upon the Company, including the GANB Loan documents.

Section 3.3 — Liability of Member. PCG, as the sole Member, shall not be personally liable for the debts, obligations, or liabilities of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a member or manager of the Company. The liability of PCG shall be limited to the fullest extent provided under the Act, including Sections 605.04073 and 605.0304 of the Florida Statutes. Nothing in this Section 3.3 shall be construed to limit the liability of PCG (a) for any obligation that PCG has specifically agreed to guarantee or for which PCG has otherwise assumed personal liability in writing (including any guaranty executed in connection with the GANB Loan), or (b) as may be imposed by applicable law irrespective of the terms of this Agreement.

ARTICLE IV — CAPITAL CONTRIBUTIONS

Section 4.1 — Prior Capital Contributions. For purposes of historical reference and completeness of the Company's records, the following Capital Contributions were made to the Company prior to the Effective Date:

(a) Acquisition Capital. At the time of the Company's acquisition of the Property on August 1, 2017, the total equity required (after application of proceeds from the GANB Loan in the original principal amount of $61,250,000) was Twenty-Six Million Two Hundred Fifty Thousand Dollars ($26,250,000). PCG contributed Eighteen Million Five Hundred Sixty-Two Thousand Five Hundred Dollars ($18,562,500) (representing 65% of the required equity), and MSH contributed Ten Million Dollars ($10,000,000) (representing approximately 35% of the required equity, together with certain acquisition-fee credits and pro-rated adjustments). The total acquisition price for the Property was Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000).

(b) Renovation Capital. During the period from 2017 through 2019, the Company undertook a comprehensive renovation and repositioning of the Property, requiring total renovation capital of Twenty-Four Million Three Hundred Thousand Dollars ($24,300,000). PCG contributed Fifteen Million Seven Hundred Ninety-Five Thousand Dollars ($15,795,000) (representing 65% of the total renovation capital), and MSH contributed Eight Million Five Hundred Five Thousand Dollars ($8,505,000) (representing 35% of the total renovation capital).

(c) Redemption. As a result of the Redemption, which closed on June 28, 2024, MSH's entire Membership Interest was acquired by PCG for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000). The Redemption was funded through a combination of (i) PCG's direct equity contribution of Twenty-Two Million Dollars ($22,000,000) from PCG's own liquidity, and (ii) the incremental draw of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) under the GANB Loan, as approved by Gulf Atlantic National Bank pursuant to Lender Consent dated June 2024. MSH's capital account has been reduced to zero, and all Membership Interests formerly held by MSH have been assigned to PCG pursuant to the Assignment of Membership Interest dated June 28, 2024. MSH is no longer reflected in the capital accounts of the Company.

The cumulative Capital Contributions of PCG to the Company (exclusive of amounts contributed at the Company level via the GANB Loan incremental draw) total Thirty-Four Million Three Hundred Fifty-Seven Thousand Five Hundred Dollars ($34,357,500), comprising the $18,562,500 acquisition contribution and the $15,795,000 renovation contribution, as further detailed on Exhibit A attached hereto.

Section 4.2 — Additional Capital Contributions. PCG may, in its sole and absolute discretion, make additional Capital Contributions to the Company at any time and from time to time. PCG shall have no obligation to make any additional Capital Contributions to the Company unless PCG, in its capacity as sole Member and Manager, determines otherwise. Any additional Capital Contributions made by PCG shall be credited to PCG's capital account in accordance with this Agreement and applicable Treasury Regulations.

Section 4.3 — Capital Account. A single capital account shall be maintained for PCG in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (to the extent applicable) and the provisions of this Agreement. The capital account shall reflect all Capital Contributions made by PCG, all allocations of income, gain, loss, deduction, and credit to PCG, all distributions made to PCG, and all adjustments resulting from the Redemption and the elimination of MSH's capital account. In the event the Company is reclassified as a partnership for federal income tax purposes, the capital accounts shall be maintained in strict compliance with the applicable Treasury Regulations.

Section 4.4 — No Interest on Capital. No interest shall accrue or be paid on any Capital Contribution made by PCG or any other member. The Company shall have no obligation to pay any return on any Capital Contribution, except as may be distributed in accordance with Article V of this Agreement.

Section 4.5 — No Return of Capital. PCG shall not have the right to withdraw or demand the return of its Capital Contribution, in whole or in part, except (a) as may be distributed to PCG in accordance with Article V of this Agreement, or (b) upon the dissolution and winding up of the Company in accordance with Article IX of this Agreement. No member shall have any priority over any other member with respect to the return of capital contributions, except as expressly provided herein.

ARTICLE V — ALLOCATIONS AND DISTRIBUTIONS

Section 5.1 — Allocations. All items of income, gain, loss, deduction, and credit of the Company for any taxable year or other period shall be allocated one hundred percent (100%) to PCG, as the sole Member. For so long as the Company is treated as a single-member limited liability company that is disregarded as an entity separate from PCG for federal income tax purposes, all items of income, gain, loss, deduction, and credit of the Company shall be reported on PCG's federal and applicable state income tax returns. In the event that additional members are admitted to the Company, this Section 5.1 shall be amended to provide for allocations among the members in accordance with their respective Membership Interests and the applicable provisions of the Internal Revenue Code and Treasury Regulations.

Section 5.2 — Distributions.

(a) The Manager may, in its sole and absolute discretion, cause the Company to make distributions to PCG at any time and in any amount, subject to (i) the requirements of applicable law, including Section 605.04061 of the Florida Statutes (prohibiting distributions that would render the Company unable to pay its debts as they become due in the ordinary course of business), and (ii) the terms and conditions of the GANB Loan documents, including any covenants restricting the timing, amount, or conditions of distributions from the Company (including, without limitation, debt service coverage ratio requirements, minimum liquidity covenants, and cash management requirements).

(b) Distributions shall be made in cash or in kind, as the Manager shall determine in its sole discretion. Any distribution in kind shall be valued at fair market value as reasonably determined by the Manager.

(c) The distribution waterfall provisions contained in Sections 5.1, 5.2, and 5.3 of the Original Operating Agreement (including the preferred return to MSH, the promote splits, and the catch-up provisions) are no longer applicable given the single-member structure of the Company. Those provisions are hereby superseded in their entirety and shall have no further force or effect.

Section 5.3 — Tax Distributions. The Manager shall cause the Company to distribute to PCG, at least quarterly (and in any event no later than the fifteenth (15th) day preceding each quarterly estimated tax payment due date), amounts sufficient to cover PCG's estimated tax liability attributable to Company income, calculated at the highest applicable combined federal and state marginal tax rates for the relevant taxable period. Tax distributions shall be treated as advances against, and shall reduce the amount of, any subsequent distributions to which PCG would otherwise be entitled under Section 5.2. Tax distributions shall be subject to the same limitations set forth in Section 5.2(a) above, including compliance with the GANB Loan covenants.

ARTICLE VI — MANAGEMENT

Section 6.1 — Manager. The Company shall be managed by PCG, which shall serve as the sole Manager of the Company. PCG, acting in its capacity as Manager, shall have full, exclusive, and complete authority, power, and discretion to manage, control, and direct the business and affairs of the Company, including all powers granted to a manager of a limited liability company under the Act. No Person other than the Manager shall have any authority to bind the Company or to act on its behalf, except as may be expressly delegated by the Manager in accordance with Section 6.4 of this Agreement.

The following individuals are authorized to act as representatives of the Manager in the conduct of the Company's business:

(a) Dominic R. Pellegrino, in his capacity as Managing Member of PCG, who is authorized to execute all agreements, instruments, and documents on behalf of the Company and to take all actions as may be necessary or appropriate in connection with the management of the Company and the Property;

(b) Adriana Pellegrino-Voss, in her capacity as Senior Vice President of Investments of PCG, who is authorized to execute agreements, instruments, and documents on behalf of the Company and to take such actions as may be delegated to her by Dominic R. Pellegrino or as may be necessary or appropriate in connection with the management of the Company and the Property; and

(c) Marcus Thiel, in his capacity as Chief Financial Officer of PCG, who is an authorized signatory for financial transactions of the Company, including the execution of bank documents, loan documents, and other financial instruments, and who is authorized to manage the Company's banking relationships and financial reporting.

Section 6.2 — Authority of Manager. Without limiting the generality of Section 6.1, the Manager shall have the authority, on behalf of the Company, to:

(a) Acquire, own, hold, operate, manage, improve, renovate, mortgage, pledge, hypothecate, lease, sublease, license, sell, exchange, or otherwise dispose of the Property and any other assets of the Company, upon such terms and conditions as the Manager shall determine;

(b) Borrow money and incur indebtedness on behalf of the Company, execute and deliver promissory notes, loan agreements, mortgages, deeds of trust, security agreements, guaranties, and other instruments of indebtedness or security in the name of the Company, including draws under the GANB Loan and any refinancing, modification, or extension thereof;

(c) Enter into, modify, amend, renew, extend, or terminate the Aurelian Franchise Agreement or any other management agreement, franchise agreement, license agreement, or operating agreement relating to the Property, upon such terms and conditions as the Manager shall determine;

(d) Open and maintain one or more bank accounts, brokerage accounts, and other deposit or investment accounts in the name of the Company, and invest Company funds in such investments as the Manager shall determine, including certificates of deposit, money market accounts, United States government securities, and other short-term liquid investments;

(e) Engage, retain, compensate, and terminate employees, agents, independent contractors, consultants, property managers, accountants (including the Company's accountants, Grantham, Pryce & Associates CPAs, located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, Florida 33607, with lead partner Howard Grantham, CPA), legal counsel, architects, engineers, appraisers, and such other advisors and service providers as the Manager deems necessary or appropriate for the conduct of the Company's business;

(f) Commence, prosecute, defend, settle, compromise, submit to arbitration, or otherwise resolve any and all litigation, arbitration, mediation, or other legal or administrative proceedings, claims, or disputes involving or relating to the Company, the Property, or the Company's business, upon such terms as the Manager shall determine;

(g) Execute, acknowledge, deliver, record, file, and perform all agreements, contracts, deeds, leases, licenses, instruments, certificates, and documents of every kind and description that the Manager deems necessary or convenient to carry out the purposes of the Company;

(h) Determine, approve, and implement capital expenditure programs, renovations, improvements, and maintenance schedules for the Property, including the establishment of reserves for capital expenditures, furniture, fixtures, and equipment replacement, and deferred maintenance;

(i) Make, change, or revoke any tax elections for the Company, including elections under Sections 754, 179, 168(k), and any other applicable provisions of the Internal Revenue Code, and execute and file any tax returns, forms, or statements on behalf of the Company;

(j) Obtain and maintain insurance coverage for the Company and the Property, including property, casualty, liability, business interruption, and managers' liability insurance, in such amounts and with such carriers as the Manager shall determine; and

(k) Take such other actions and exercise such other powers as are necessary, convenient, or incidental to the conduct, promotion, and attainment of the business, purposes, and activities of the Company.

Section 6.3 — Consent Rights (Superseded). The consent and approval rights of MSH under the Original Operating Agreement, including, without limitation, consent rights with respect to (a) capital calls in excess of Two Million Dollars ($2,000,000), (b) dispositions of all or substantially all of the Company's assets, (c) refinancings of the GANB Loan or any other indebtedness of the Company, (d) the incurrence of new indebtedness, (e) the admission of additional members, and (f) amendments to the Aurelian Franchise Agreement, are no longer in effect as MSH is no longer a Member of the Company. From and after the Effective Date, the Manager, as sole Member of the Company, may act without any consent requirement other than as may be imposed by applicable law or by the terms of third-party agreements to which the Company is a party, including the covenants and restrictions contained in the GANB Loan documents and the Aurelian Franchise Agreement.

Section 6.4 — Officers. The Manager may, from time to time, appoint one or more officers, agents, or delegates of the Company, with such titles, responsibilities, and duties as the Manager shall determine in its sole discretion. Any officer so appointed shall serve at the pleasure of the Manager and may be removed by the Manager at any time, with or without cause. The appointment of an officer shall not, in itself, create any contractual right in favor of such officer. Officers may include, without limitation, a President, Vice President, Secretary, Treasurer, or such other officers as the Manager deems appropriate for the efficient management of the Company's affairs.

Section 6.5 — Compensation.

(a) The Manager shall not receive any compensation from the Company for serving in its capacity as Manager, except as the Manager may determine in its sole discretion and in accordance with applicable law; provided, that any compensation paid to the Manager shall be on terms that are fair and reasonable and consistent with the terms of any applicable third-party agreements.

(b) The Company shall reimburse the Manager for all reasonable and documented out-of-pocket expenses incurred by the Manager in connection with the management of the Company and the Property, including travel expenses, legal fees, accounting fees, and other costs directly attributable to Company business. Such reimbursements shall be made promptly upon submission of appropriate documentation.

Section 6.6 — Standard of Care and Exculpation.

(a) The Manager shall manage the business and affairs of the Company in good faith and in a manner that the Manager reasonably believes to be in the best interests of the Company. The Manager shall exercise such care as an ordinarily prudent person in a like position would exercise under similar circumstances.

(b) Notwithstanding the foregoing, the Manager shall not be liable to the Company or to any Member for any act or omission taken or suffered by the Manager in connection with the business or affairs of the Company, unless such act or omission constitutes fraud, intentional misconduct, willful violation of law, or gross negligence. The Manager may consult with legal counsel, accountants, financial advisors, and other professionals, and any act or omission by the Manager taken or suffered in good faith in reliance upon the advice or opinion of such professionals shall be fully protected and shall not constitute a breach of the Manager's duties hereunder.

(c) To the maximum extent permitted under Section 605.04091 of the Florida Statutes, the fiduciary duties of the Manager (including the duties of care and loyalty) are hereby modified, restricted, and, to the extent permitted by law, eliminated. Without limiting the generality of the foregoing, the Manager shall be permitted to engage in other business activities, including activities that may compete with the Company, and shall have no obligation to present business opportunities to the Company or to refrain from engaging in competing enterprises.

Section 6.7 — Indemnification.

(a) The Company shall indemnify, defend, and hold harmless the Manager, its members, managers, officers, employees, and agents (including, without limitation, Dominic R. Pellegrino, Adriana Pellegrino-Voss, and Marcus Thiel) (each, an "Indemnified Person") from and against any and all losses, claims, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reasonable attorneys' fees and costs of investigation and litigation) arising out of or relating to any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred by this Agreement or the Act; provided, however, that no Indemnified Person shall be entitled to indemnification hereunder with respect to any act or omission that constitutes fraud, intentional misconduct, willful violation of law, or gross negligence on the part of such Indemnified Person.

(b) Indemnification provided under this Section 6.7 shall be to the fullest extent permitted by the Act and other applicable law, and shall include the advancement of reasonable attorneys' fees and other expenses incurred by an Indemnified Person in connection with the defense of any action, suit, or proceeding, subject to the Indemnified Person's undertaking to repay such amounts if it is ultimately determined that such Indemnified Person is not entitled to indemnification hereunder.

(c) The Company shall maintain managers' liability insurance (or equivalent coverage) with Atlantic Omnivrel Insurance Company (or another carrier of comparable financial strength as selected by the Manager), currently maintained under Policy No. AFML-2022-08745, with coverage limits of not less than Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate. The Manager shall use commercially reasonable efforts to maintain such insurance in full force and effect at all times during the existence of the Company.

(d) The indemnification provided under this Section 6.7 shall survive the dissolution, winding up, and termination of the Company, and shall be in addition to (and not in limitation of) any other indemnification rights that an Indemnified Person may have under any separate agreement, insurance policy, or applicable law.

ARTICLE VII — BOOKS, RECORDS, AND TAX MATTERS

Section 7.1 — Books and Records. The Manager shall cause to be maintained full, complete, and accurate books and records of the Company at the Company's principal office, located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other location as the Manager may determine. The books and records of the Company shall be maintained on an accrual basis in accordance with GAAP, consistently applied, and shall include, without limitation:

(a) A current list of the full name and last known business, residence, or mailing address of each Member;

(b) A copy of the Company's Articles of Organization, as amended, and all amendments thereto;

(d) Copies of the Company's federal, state, and local income tax returns and financial statements for the three (3) most recent fiscal years;

(e) Copies of all material agreements, contracts, and documents to which the Company is a party, including the GANB Loan documents, the Aurelian Franchise Agreement, and any management agreements; and

(f) Such other records as may be required by the Act or as the Manager deems necessary or appropriate.

PCG, as the sole Member, shall have the right to inspect and copy the books and records of the Company at any time during normal business hours, upon reasonable notice to the Manager.

Section 7.2 — Fiscal Year. The fiscal year of the Company shall be the calendar year, beginning on January 1 and ending on December 31 of each year.

Section 7.3 — Tax Matters.

(a) PCG shall serve as the "Tax Matters Member" of the Company (or "Partnership Representative" within the meaning of Section 6223 of the Internal Revenue Code, if applicable, in the event the Company is reclassified as a partnership for federal income tax purposes) and shall have full authority to act on behalf of the Company in connection with any tax audit, examination, proceeding, or dispute with the Internal Revenue Service or any state or local taxing authority.

(b) The Company's accounting and tax compliance services shall be provided by Grantham, Pryce & Associates CPAs, located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, Florida 33607, under the supervision of lead partner Howard Grantham, CPA, or such other accounting firm as the Manager may designate from time to time.

(c) All tax returns, forms, and filings of the Company shall reference the Company's federal employer identification number (EIN 82-5063921).

(d) For so long as the Company is treated as a disregarded entity for federal income tax purposes, all items of income, gain, loss, deduction, and credit of the Company shall be reported on PCG's federal and applicable state income tax returns. In the event the Company's tax classification changes, the Manager shall cause the Company to file all required tax returns and make all required tax payments.

Section 7.4 — Bank Accounts. All funds of the Company shall be deposited in one or more bank accounts, money market accounts, or other deposit accounts maintained at financial institutions selected by the Manager. As of the Effective Date, the Company maintains operating accounts and reserve accounts at Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. The Manager may, in its sole discretion, change the financial institutions at which Company accounts are maintained, open additional accounts, or close existing accounts. No funds of the Company shall be commingled with the personal funds of any Member, Manager, officer, or agent.

ARTICLE VIII — PROPERTY AND INDEBTEDNESS

Section 8.1 — Company Property. The principal asset of the Company is The Palmetto Grand Resort & Spa (the "Property"), located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more fully described in Exhibit B attached hereto and incorporated herein by reference. The Property includes:

(a) A 312-room luxury beachfront resort, including forty-two (42) suites;

(b) Two (2) full-service restaurants, one (1) rooftop bar, and related food and beverage facilities;

(d) Approximately 22,000 square feet of meeting and event space;

(e) Beachfront cabana service and related beach amenities;

(f) All personal property, furniture, fixtures, equipment (including kitchen and laundry equipment), and other tangible assets located on or associated with the Property; and

(g) All intangible assets associated with the Property, including goodwill, licenses, permits, approvals, and all rights of the Company under the Aurelian Franchise Agreement dated July 15, 2017 (twenty-year term expiring July 14, 2037; franchise fee of five percent (5%) of gross room revenue plus a two percent (2%) marketing fund contribution).

Title to all Company property, whether real, personal, or mixed, tangible or intangible, shall be held in the name of the Company and no Member shall have any ownership interest in any Company property in its individual name or right. The Membership Interest of PCG is personal property, and PCG shall have no interest in specific Company property.

Section 8.2 — Existing Indebtedness. As of the Effective Date, the Company's existing indebtedness consists of the GANB Loan, the material terms of which are as follows:

(a) Lender: Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. Loan Officer: Christine Delacroix, Senior Vice President, Commercial Real Estate.

(b) Loan Number: CRE-2017-06284.

(d) Original Principal Amount: Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000), representing approximately seventy percent (70%) loan-to-value on the original acquisition price of $87,500,000.

(e) Interest Rate: SOFR plus 2.25% per annum (converted from LIBOR plus 2.25% per annum pursuant to a rate conversion amendment effective January 1, 2022).

(f) Maturity Date: August 1, 2027.

(g) Outstanding Balance as of December 31, 2022: Forty-Eight Million Six Hundred Thousand Dollars ($48,600,000) (prior to the incremental draw described below).

(h) Incremental Draw: In connection with the Redemption, Gulf Atlantic National Bank approved an incremental draw in the amount of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) pursuant to that certain First Amendment to Loan Agreement and Lender Consent dated June 2024, which, among other things, authorized the incremental advance of funds and consented to the transfer of MSH's Membership Interest to PCG.

(i) Total Outstanding Following Redemption: Approximately Seventy-Nine Million Four Hundred Fifty Thousand Dollars ($79,450,000) (subject to subsequent amortization, repayment, and any refinancing). A summary of the existing indebtedness is set forth in Exhibit C attached hereto.

The Manager is authorized, in its sole discretion, to refinance, repay (in whole or in part), modify, amend, supplement, extend, or otherwise restructure the GANB Loan, or to incur new indebtedness on behalf of the Company, upon such terms and conditions as the Manager deems appropriate, subject to compliance with applicable law.

Section 8.3 — Capital Expenditures and Maintenance. The Manager shall maintain the Property in first-class condition consistent with the standards required by the Aurelian Hotels & Resorts brand and commensurate with competitive luxury resort properties located on the Gulf Coast of Florida. Without limiting the foregoing, the Manager shall:

(a) Establish and fund reserves for capital expenditures, including the replacement of furniture, fixtures, and equipment ("FF&E"), as the Manager deems appropriate and in compliance with the requirements of the Aurelian Franchise Agreement and the GANB Loan documents;

(b) Implement and oversee deferred maintenance programs and preventive maintenance schedules designed to preserve and enhance the physical condition, functionality, and value of the Property; and

(c) Approve and direct capital improvement projects for the Property as the Manager determines to be in the best interests of the Company, taking into consideration the competitive positioning of the Property, guest satisfaction, revenue optimization, and long-term asset preservation.

For purposes of historical reference, the Company invested a total of Twenty-Four Million Three Hundred Thousand Dollars ($24,300,000) in renovation capital during the period from 2017 through 2019, representing a comprehensive renovation and repositioning of the Property following its acquisition.

ARTICLE IX — DISSOLUTION, WINDING UP, AND TERMINATION

Section 9.1 — Events of Dissolution. The Company shall be dissolved upon the first to occur of the following events:

(a) The written determination and election of PCG, as the sole Member of the Company, to dissolve the Company;

(b) The sale, transfer, or other disposition of all or substantially all of the assets of the Company, unless PCG elects to continue the Company for purposes of winding up;

(c) The entry of a judicial decree of dissolution under Section 605.0702 of the Florida Statutes or any successor provision of the Act; or

(d) The occurrence of any event that makes it unlawful for the business of the Company to be carried on.

The death, dissolution, termination, bankruptcy, insolvency, or incompetence of the Member shall not cause the dissolution of the Company. The Company shall not be dissolved by the admission of additional members.

Section 9.2 — Winding Up. Upon the dissolution of the Company, the Manager (or, if the Manager is unable or unwilling to serve in such capacity, a liquidating agent appointed by PCG) shall proceed to wind up the affairs of the Company and to liquidate the Company's assets. During the winding-up period, the Company shall continue solely for the purpose of winding up its affairs and shall not engage in any business activities except as necessary for the orderly liquidation of its assets and the satisfaction of its obligations. The assets of the Company shall be applied and distributed in the following order of priority:

(i) First, to the payment and discharge of all debts, obligations, and liabilities of the Company (other than liabilities to the Member), including the satisfaction and repayment of the GANB Loan and all other outstanding indebtedness, and the payment of all expenses of winding up and liquidation;

(ii) Second, to the establishment of such reserves as the Manager (or liquidating agent) reasonably deems necessary or appropriate for contingent or unforeseen liabilities or obligations of the Company, which reserves may be held for such period as the Manager (or liquidating agent) shall determine and, upon expiration of such period, shall be distributed in accordance with clause (iii) below; and

(iii) Third, the balance, if any, to PCG, in accordance with PCG's positive capital account balance, or as otherwise determined by the Manager.

Section 9.3 — Articles of Dissolution. Upon the completion of the winding up of the Company's affairs and the distribution of all of its remaining assets, the Manager (or liquidating agent) shall cause to be filed with the Secretary of State of the State of Florida the Articles of Dissolution of the Company in accordance with Section 605.0702 or Section 605.0709 of the Florida Statutes (or any successor provision), and shall take such other actions as may be necessary or appropriate to terminate the Company's existence.

Section 9.4 — No Restoration of Capital. Except as otherwise provided in this Agreement, PCG shall look solely to the assets of the Company for all distributions (including distributions upon dissolution and winding up) and shall have no recourse against any other Person for the return of its Capital Contributions or for any distributions to which it may be entitled hereunder.

ARTICLE X — TRANSFER OF MEMBERSHIP INTEREST

Section 10.1 — Restrictions on Transfer. PCG may freely transfer, assign, pledge, hypothecate, or otherwise dispose of all or any portion of its Membership Interest in the Company without restriction, subject to (a) compliance with all applicable federal and state securities laws and regulations, (b) compliance with the terms and conditions of the GANB Loan documents (including any provisions requiring lender consent to a transfer of membership interests), and (c) compliance with any other agreements to which the Company is a party that restrict or condition transfers of membership interests. Any transferee admitted as a Member of the Company shall execute a joinder to, or an amendment of, this Agreement reflecting such transferee's admission and the terms of such transferee's Membership Interest.

Section 10.2 — Call Option and Put Option Provisions (Superseded). The call option, put option, and related provisions set forth in the Original Operating Agreement, including Sections 12.4 (Call Option), 12.4(c) (Third Appraiser), 12.5 (Closing Mechanics), and 12.7 (Bad Faith Determination), are hereby superseded in their entirety and shall have no further force or effect. As set forth in the Recitals to this Agreement, PCG exercised its call option under Section 12.4 of the Original Operating Agreement by written notice to MSH dated January 9, 2023. The resulting valuation dispute was resolved through binding arbitration (JAMS Ref. No. 1440032871) and the execution of the Redemption Agreement dated May 20, 2024. MSH's thirty-five percent (35%) Membership Interest was fully redeemed at the closing of the Redemption on June 28, 2024, for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000). MSH has no further rights, obligations, or interests in or with respect to the Company. There is no longer a minority member whose interest may be subject to a call or put option.

ARTICLE XI — DISPUTE RESOLUTION

Section 11.1 — Governing Law. This Agreement, and all claims, disputes, and other matters arising out of or relating to this Agreement or the Company (whether in contract, tort, or otherwise), shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-law rules or principles that would cause the application of the laws of any other jurisdiction.

Section 11.2 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, including the breach, termination, or validity hereof, shall be resolved by binding arbitration administered by JAMS, seated in Jacksonville, Florida, in accordance with the JAMS Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with the JAMS rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including specific performance, injunctive relief, and monetary damages. The decision of the arbitrator shall be final and binding upon the parties and may be entered and enforced in any court of competent jurisdiction. This arbitration provision carries forward the dispute-resolution mechanism originally set forth in Section 15.2 of the Original Operating Agreement, as adjusted for the single-member structure of the Company. This provision shall be primarily applicable in the event that additional members are admitted to the Company or in connection with disputes with former members or third parties arising under or related to this Agreement.

Section 11.3 — Attorneys' Fees. In any action, proceeding, or arbitration to enforce or interpret any provision of this Agreement, or arising out of or relating to any dispute under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party its reasonable attorneys' fees, costs, and expenses (including expert witness fees, court costs, and costs of investigation), in addition to any other relief to which such prevailing party may be entitled.

Section 11.4 — Jurisdiction and Venue. To the extent that any dispute, controversy, claim, or matter is not subject to arbitration pursuant to Section 11.2 above (including any action to compel arbitration or to enforce an arbitral award), the parties hereby irrevocably consent to the exclusive jurisdiction and venue of the state courts of the State of Florida located in Hillsborough County, Florida, or the United States District Court for the Middle District of Florida, Tampa Division. Each party hereby irrevocably waives any objection to the laying of venue in such courts and any claim that any such action or proceeding has been brought in an inconvenient forum.

ARTICLE XII — GENERAL PROVISIONS

Section 12.1 — Entire Agreement. This Agreement, together with the Exhibits attached hereto, constitutes the entire agreement of the Member with respect to the Company and supersedes all prior and contemporaneous agreements, understandings, negotiations, and communications, whether written or oral, relating to the subject matter hereof, including the Original Operating Agreement dated as of June 15, 2017, and all amendments, supplements, and modifications thereto. For the avoidance of doubt, the Redemption Agreement, the Mutual Release and Settlement Agreement, and the Assignment of Membership Interest, each dated as set forth in the Recitals, shall remain in full force and effect in accordance with their respective terms and shall not be deemed superseded by this Agreement.

Section 12.2 — Amendments. This Agreement may be amended, modified, supplemented, or restated only by a written instrument executed by PCG, as the sole Member of the Company. In the event that additional members are admitted to the Company, the amendment provisions of this Agreement shall be amended to reflect the consent requirements applicable to a multi-member limited liability company.

Section 12.3 — Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, shall be held by a court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and the remaining provisions of this Agreement shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had never been contained herein. To the extent permitted by applicable law, the parties hereby waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect.

Section 12.4 — Notices. All notices, requests, demands, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given and effective (a) upon personal delivery, (b) one (1) business day after deposit with a nationally recognized overnight courier service (with proof of delivery), (c) three (3) business days after deposit in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, or (d) upon transmission by electronic mail (with confirmation of receipt), in each case addressed as follows:

If to the Company or to PCG:

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

Attn: Dominic R. Pellegrino, Managing Member

Email: dpellegrino@pellegrinocapital.com

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

Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, Florida 33131

Attn: Francesca Morano, Esq.

Email: fmorano@calderwoodharkness.com

Any party may change its address for purposes of this Section 12.4 by giving written notice of such change to the other parties in the manner provided herein.

Section 12.5 — Waiver. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the party granting such waiver. No failure or delay by any party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.

Section 12.6 — Headings. The headings and captions of the Articles, Sections, and Exhibits of this Agreement are included for convenience of reference only and shall not be deemed to constitute a part of this Agreement or to affect the construction, meaning, or interpretation of any provision hereof.

Section 12.7 — Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic transmission (including by PDF or other electronic format) shall be effective as delivery of a manually executed counterpart.

Section 12.8 — No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of PCG (as the sole Member) and the Company. Except as expressly provided in Section 6.7 with respect to the indemnification of Indemnified Persons, no Person who is not a party to this Agreement shall have any right to enforce any term or provision of this Agreement, and no third party is intended to be, or shall be deemed to be, a third-party beneficiary of this Agreement or any provision hereof.

Section 12.9 — Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company or any creditor of PCG. No creditor of the Company or of PCG who makes a loan to the Company shall have or acquire, by reason of making such loan, any direct interest in the profits, losses, or distributions of the Company (other than as may be specifically agreed in a separate written instrument executed by the Company).

[Signature Page Follows]

AMENDED AND RESTATED OPERATING AGREEMENT
OF
PALMETTO GRAND VENTURES LLC
a Florida Limited Liability Company
Effective as of July 15, 2024
AMENDED AND RESTATED OPERATING AGREEMENT
OF
PALMETTO GRAND VENTURES LLC
a Florida Limited Liability Company
This Amended and Restated Operating Agreement (this "Agreement") of Palmetto Grand Ventures LLC, a Florida limited liability company (the "Company" or "PGV"), is entered into and effective as of July 15, 2024 (the "Effective Date"), by Pellegrino Capital Group LLC, a Florida limited liability company ("PCG"), as the sole member of the Company.
This Agreement amends, restates, and supersedes in its entirety the Operating Agreement of Palmetto Grand Ventures LLC dated as of June 15, 2017 (the "Original Operating Agreement"), as amended from time to time prior to the date hereof. From and after the Effective Date, the Original Operating Agreement shall be of no further force or effect, and the rights, duties, and obligations of the Company and its Member shall be governed exclusively by this Agreement and the Act (as defined below).
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RECITALS
WHEREAS, Palmetto Grand Ventures LLC (the "Company" or "PGV") is a Florida limited liability company duly formed on June 15, 2017, by the filing of Articles of Organization with the Secretary of State of the State of Florida under Filing No. L17000124583, and is governed by the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes, as amended from time to time (the "Act");
WHEREAS, the Company was originally formed pursuant to that certain Operating Agreement dated as of June 15, 2017 (the "Original Operating Agreement"), entered into by and between Pellegrino Capital Group LLC ("PCG"), a Florida limited liability company, and Meridian Shores Hospitality LLC ("MSH"), a Delaware limited liability company, as the original members of the Company;
WHEREAS, under the Original Operating Agreement, PCG held a sixty-five percent (65%) Membership Interest in the Company and MSH held a thirty-five percent (35%) Membership Interest in the Company;
WHEREAS, the Company was formed for the primary purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort property located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767 (the "Property");
WHEREAS, the Company acquired the Property on August 1, 2017, for a total purchase price of Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000), financed in part by a loan from Gulf Atlantic National Bank in the original principal amount of Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000) (Loan No. CRE-2017-06284) (the "GANB Loan"), with the balance funded by equity contributions from PCG and MSH;
WHEREAS, PCG duly exercised its call option under Section 12.4 of the Original Operating Agreement by written notice to MSH dated January 9, 2023, to purchase MSH's entire thirty-five percent (35%) Membership Interest in the Company;
WHEREAS, following a dispute between PCG and MSH regarding the fair market valuation of MSH's Membership Interest for purposes of the call option, and a binding arbitration proceeding administered by JAMS (Ref. No. 1440032871), PCG and MSH entered into that certain Redemption Agreement dated as of May 20, 2024 (the "Redemption Agreement"), and that certain Mutual Release and Settlement Agreement dated as of May 20, 2024, pursuant to which PCG agreed to acquire, and MSH agreed to sell, MSH's entire thirty-five percent (35%) Membership Interest in the Company for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000);
WHEREAS, the closing of the redemption of MSH's Membership Interest (the "Redemption") occurred on June 28, 2024, and MSH duly assigned and transferred its entire Membership Interest in the Company to PCG pursuant to an Assignment of Membership Interest dated June 28, 2024, and all conditions to closing under the Redemption Agreement were satisfied or waived;
WHEREAS, as a result of the Redemption, PCG is now the sole member of the Company, holding one hundred percent (100%) of the Membership Interests in the Company, and PCG desires to amend and restate the Original Operating Agreement in its entirety to reflect the current ownership structure, governance, and operational framework of the Company as a single-member limited liability company; and
NOW, THEREFORE, PCG, as the sole Member of the Company, hereby adopts this Amended and Restated Operating Agreement, effective as of July 15, 2024, upon the terms and conditions set forth herein.
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them elsewhere in this Agreement.
Section 1.1 "Act" means the Florida Revised Limited Liability Company Act, Chapter 605, Florida Statutes, as amended from time to time, and any successor statute thereto.
Section 1.2 "Agreement" means this Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, as it may be further amended, restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof.
Section 1.3 "Aurelian Franchise Agreement" means that certain Franchise Agreement, dated as of July 15, 2017, between the Company and Aurelian Hotels & Resorts Inc., a Delaware corporation ("Aurelian"), with an initial term of twenty (20) years (expiring on July 14, 2037), pursuant to which the Company operates the Property under the Aurelian Hotels & Resorts brand and is obligated to pay a franchise fee equal to five percent (5%) of gross room revenue, together with a marketing fund contribution equal to two percent (2%) of gross room revenue.
Section 1.4 "Capital Contribution" means any cash, property, or other assets contributed to the Company by the Member (or any predecessor member), as reflected in the books and records of the Company.
Section 1.5 "Company" means Palmetto Grand Ventures LLC, a Florida limited liability company, formed under the Act with Filing No. L17000124583 with the Secretary of State of the State of Florida.
Section 1.6 "Effective Date" means July 15, 2024.
Section 1.7 "EIN" means the Company's federal employer identification number, which is 82-5063921.
Section 1.8 "GANB Loan" means the loan from Gulf Atlantic National Bank (Loan No. CRE-2017-06284), originally dated August 1, 2017, in the original principal amount of Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000), bearing interest at SOFR plus 2.25% per annum (converted from LIBOR plus 2.25% per annum pursuant to a rate conversion amendment effective January 1, 2022), with a maturity date of August 1, 2027, as amended and supplemented from time to time, including by that certain First Amendment to Loan Agreement dated June 2024, pursuant to which the Lender approved an incremental draw in the amount of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) in connection with the Redemption and consented to the transfer of MSH's Membership Interest to PCG.
Section 1.9 "GAAP" means United States generally accepted accounting principles as in effect from time to time, consistently applied.
Section 1.10 "Manager" means PCG, in its capacity as the sole manager of the Company, and any successor manager appointed in accordance with this Agreement.
Section 1.11 "Member" means PCG, as the sole member of the Company, and any Person admitted as an additional or substitute member of the Company in accordance with this Agreement and the Act.
Section 1.12 "Membership Interest" means the entire ownership interest of a member in the Company, including all economic rights (including the right to share in profits, losses, and distributions), all governance rights (including voting and consent rights), and all other rights and obligations arising under this Agreement or the Act.
Section 1.13 "MSH" means Meridian Shores Hospitality LLC, a Delaware limited liability company, a former member of the Company whose thirty-five percent (35%) Membership Interest was redeemed and assigned to PCG effective June 28, 2024.
Section 1.14 "Original Operating Agreement" means the Operating Agreement of Palmetto Grand Ventures LLC, dated as of June 15, 2017, entered into by and between PCG and MSH, as amended prior to the Effective Date, which is hereby superseded in its entirety by this Agreement.
Section 1.15 "PCG" means Pellegrino Capital Group LLC, a Florida limited liability company, with its principal office at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, and federal employer identification number 83-2147605.
Section 1.16 "Person" means any individual, corporation, limited liability company, partnership, limited partnership, joint venture, trust, estate, unincorporated association, governmental authority, or other entity.
Section 1.17 "Property" means The Palmetto Grand Resort & Spa, a 312-room luxury beachfront resort (including forty-two (42) suites), together with all improvements, fixtures, furniture, equipment, and personal property associated therewith, located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more particularly described in Exhibit B attached hereto.
Section 1.18 "Redemption" means the purchase by PCG of MSH's thirty-five percent (35%) Membership Interest in the Company for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), which closed on June 28, 2024, pursuant to the terms of the Redemption Agreement.
Section 1.19 "Redemption Agreement" means that certain Redemption Agreement, dated as of May 20, 2024, by and between PCG and MSH, pursuant to which PCG agreed to purchase, and MSH agreed to sell, MSH's entire thirty-five percent (35%) Membership Interest in the Company.
Section 1.20 "Treasury Regulations" means the regulations promulgated under the Internal Revenue Code of 1986, as amended, by the United States Department of the Treasury, as in effect from time to time.
ARTICLE II — ORGANIZATION
Section 2.1 — Formation. The Company was formed as a Florida limited liability company on June 15, 2017, by the filing of Articles of Organization with the Secretary of State of the State of Florida, and was assigned Filing No. L17000124583. The Company is, and shall continue to be, governed by the Act and this Agreement. In the event of any conflict between the provisions of this Agreement and the non-mandatory provisions of the Act, the provisions of this Agreement shall control to the maximum extent permitted by law. All actions taken in connection with the formation and organization of the Company prior to the Effective Date are hereby ratified and confirmed.
Section 2.2 — Name. The legal name of the Company is "Palmetto Grand Ventures LLC." The Manager may cause the Company to conduct business under such assumed or fictitious names as the Manager may determine from time to time, provided that appropriate filings are made in accordance with applicable law.
Section 2.3 — Registered Office and Registered Agent.
(a) The registered office of the Company in the State of Florida is located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606.
(b) The registered agent of the Company for service of process in the State of Florida is CT Agents of Florida LLC, located at 1201 Hays Street, Tallahassee, Florida 32301.
(c) The Manager may change the registered office or the registered agent of the Company at any time and from time to time in accordance with the Act by filing the appropriate amendment or statement with the Secretary of State of the State of Florida.
Section 2.4 — Principal Office. The principal office of the Company shall be located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other place or places as the Manager may designate from time to time. The Manager shall give notice to all Persons entitled thereto of any change in the Company's principal office.
Section 2.5 — Purpose. The Company is organized for the purpose of:
(a) Owning, operating, managing, maintaining, renovating, improving, financing, refinancing, encumbering, and disposing of The Palmetto Grand Resort & Spa, a 312-room full-service luxury beachfront resort located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, including its forty-two (42) suites, two (2) restaurants, rooftop bar, approximately 18,000-square-foot spa and wellness center, approximately 22,000 square feet of meeting and event space, beachfront cabana service, and all related amenities, improvements, and facilities; and
(b) Engaging in any and all lawful activities that are incidental, necessary, or convenient to the foregoing purpose, or that are otherwise permitted for a limited liability company under the Act.
Nothing in this Agreement shall be construed to limit the Company's authority to engage in any lawful business or activity permitted under the Act; provided, however, that the Manager shall use commercially reasonable efforts to ensure that the Company's activities are at all times consistent with the purposes described above and with the terms and conditions of the GANB Loan documents, the Aurelian Franchise Agreement, and any other material agreements to which the Company is a party.
Section 2.6 — Term. The Company shall have perpetual existence and shall continue in full force and effect until dissolved and terminated in accordance with the provisions of Article IX of this Agreement or the Act. The death, dissolution, retirement, resignation, expulsion, or bankruptcy of a Member shall not cause the dissolution of the Company.
Section 2.7 — EIN and Tax Classification.
(a) The Company's federal employer identification number is 82-5063921.
(b) For so long as the Company has a single member, the Company shall be treated as a disregarded entity for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3, unless PCG, as the sole Member, elects otherwise by filing IRS Form 8832 (Entity Classification Election). In the event that PCG makes such an election, or in the event that additional members are admitted to the Company, the tax classification of the Company shall be as determined by the Manager in accordance with applicable law.
(c) The Company shall make all filings and take all actions necessary to effectuate and maintain its desired tax classification.
ARTICLE III — MEMBER
Section 3.1 — Sole Member. The sole member of the Company as of the Effective Date is:
Pellegrino Capital Group LLC A Florida limited liability company Principal Address: 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606 Federal EIN: 83-2147605 Membership Interest: 100%
PCG holds one hundred percent (100%) of the Membership Interests in the Company, including all economic rights, governance rights, and all other rights and interests arising under this Agreement and the Act. The information regarding PCG's Membership Interest and Capital Contributions is set forth on Exhibit A attached hereto and incorporated herein by reference.
Section 3.2 — Admission of Additional Members. No additional members shall be admitted to the Company except with the prior written consent of the Manager (i.e., PCG in its capacity as sole Manager) and upon the execution of an amendment to this Agreement reflecting the admission of such additional member and the terms upon which such member is admitted, including the Membership Interest to be held by such additional member, any Capital Contributions required, and any modifications to the governance, distribution, and allocation provisions of this Agreement. Any admission of additional members shall be effected in compliance with the Act and all applicable laws, and shall be subject to the terms and conditions of any third-party agreements binding upon the Company, including the GANB Loan documents.
Section 3.3 — Liability of Member. PCG, as the sole Member, shall not be personally liable for the debts, obligations, or liabilities of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a member or manager of the Company. The liability of PCG shall be limited to the fullest extent provided under the Act, including Sections 605.04073 and 605.0304 of the Florida Statutes. Nothing in this Section 3.3 shall be construed to limit the liability of PCG (a) for any obligation that PCG has specifically agreed to guarantee or for which PCG has otherwise assumed personal liability in writing (including any guaranty executed in connection with the GANB Loan), or (b) as may be imposed by applicable law irrespective of the terms of this Agreement.
ARTICLE IV — CAPITAL CONTRIBUTIONS
Section 4.1 — Prior Capital Contributions. For purposes of historical reference and completeness of the Company's records, the following Capital Contributions were made to the Company prior to the Effective Date:
(a) Acquisition Capital. At the time of the Company's acquisition of the Property on August 1, 2017, the total equity required (after application of proceeds from the GANB Loan in the original principal amount of $61,250,000) was Twenty-Six Million Two Hundred Fifty Thousand Dollars ($26,250,000). PCG contributed Eighteen Million Five Hundred Sixty-Two Thousand Five Hundred Dollars ($18,562,500) (representing 65% of the required equity), and MSH contributed Ten Million Dollars ($10,000,000) (representing approximately 35% of the required equity, together with certain acquisition-fee credits and pro-rated adjustments). The total acquisition price for the Property was Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000).
(b) Renovation Capital. During the period from 2017 through 2019, the Company undertook a comprehensive renovation and repositioning of the Property, requiring total renovation capital of Twenty-Four Million Three Hundred Thousand Dollars ($24,300,000). PCG contributed Fifteen Million Seven Hundred Ninety-Five Thousand Dollars ($15,795,000) (representing 65% of the total renovation capital), and MSH contributed Eight Million Five Hundred Five Thousand Dollars ($8,505,000) (representing 35% of the total renovation capital).
(c) Redemption. As a result of the Redemption, which closed on June 28, 2024, MSH's entire Membership Interest was acquired by PCG for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000). The Redemption was funded through a combination of (i) PCG's direct equity contribution of Twenty-Two Million Dollars ($22,000,000) from PCG's own liquidity, and (ii) the incremental draw of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) under the GANB Loan, as approved by Gulf Atlantic National Bank pursuant to Lender Consent dated June 2024. MSH's capital account has been reduced to zero, and all Membership Interests formerly held by MSH have been assigned to PCG pursuant to the Assignment of Membership Interest dated June 28, 2024. MSH is no longer reflected in the capital accounts of the Company.
The cumulative Capital Contributions of PCG to the Company (exclusive of amounts contributed at the Company level via the GANB Loan incremental draw) total Thirty-Four Million Three Hundred Fifty-Seven Thousand Five Hundred Dollars ($34,357,500), comprising the $18,562,500 acquisition contribution and the $15,795,000 renovation contribution, as further detailed on Exhibit A attached hereto.
Section 4.2 — Additional Capital Contributions. PCG may, in its sole and absolute discretion, make additional Capital Contributions to the Company at any time and from time to time. PCG shall have no obligation to make any additional Capital Contributions to the Company unless PCG, in its capacity as sole Member and Manager, determines otherwise. Any additional Capital Contributions made by PCG shall be credited to PCG's capital account in accordance with this Agreement and applicable Treasury Regulations.
Section 4.3 — Capital Account. A single capital account shall be maintained for PCG in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) (to the extent applicable) and the provisions of this Agreement. The capital account shall reflect all Capital Contributions made by PCG, all allocations of income, gain, loss, deduction, and credit to PCG, all distributions made to PCG, and all adjustments resulting from the Redemption and the elimination of MSH's capital account. In the event the Company is reclassified as a partnership for federal income tax purposes, the capital accounts shall be maintained in strict compliance with the applicable Treasury Regulations.
Section 4.4 — No Interest on Capital. No interest shall accrue or be paid on any Capital Contribution made by PCG or any other member. The Company shall have no obligation to pay any return on any Capital Contribution, except as may be distributed in accordance with Article V of this Agreement.
Section 4.5 — No Return of Capital. PCG shall not have the right to withdraw or demand the return of its Capital Contribution, in whole or in part, except (a) as may be distributed to PCG in accordance with Article V of this Agreement, or (b) upon the dissolution and winding up of the Company in accordance with Article IX of this Agreement. No member shall have any priority over any other member with respect to the return of capital contributions, except as expressly provided herein.
ARTICLE V — ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 — Allocations. All items of income, gain, loss, deduction, and credit of the Company for any taxable year or other period shall be allocated one hundred percent (100%) to PCG, as the sole Member. For so long as the Company is treated as a single-member limited liability company that is disregarded as an entity separate from PCG for federal income tax purposes, all items of income, gain, loss, deduction, and credit of the Company shall be reported on PCG's federal and applicable state income tax returns. In the event that additional members are admitted to the Company, this Section 5.1 shall be amended to provide for allocations among the members in accordance with their respective Membership Interests and the applicable provisions of the Internal Revenue Code and Treasury Regulations.
Section 5.2 — Distributions.
(a) The Manager may, in its sole and absolute discretion, cause the Company to make distributions to PCG at any time and in any amount, subject to (i) the requirements of applicable law, including Section 605.04061 of the Florida Statutes (prohibiting distributions that would render the Company unable to pay its debts as they become due in the ordinary course of business), and (ii) the terms and conditions of the GANB Loan documents, including any covenants restricting the timing, amount, or conditions of distributions from the Company (including, without limitation, debt service coverage ratio requirements, minimum liquidity covenants, and cash management requirements).
(b) Distributions shall be made in cash or in kind, as the Manager shall determine in its sole discretion. Any distribution in kind shall be valued at fair market value as reasonably determined by the Manager.
(c) The distribution waterfall provisions contained in Sections 5.1, 5.2, and 5.3 of the Original Operating Agreement (including the preferred return to MSH, the promote splits, and the catch-up provisions) are no longer applicable given the single-member structure of the Company. Those provisions are hereby superseded in their entirety and shall have no further force or effect.
Section 5.3 — Tax Distributions. The Manager shall cause the Company to distribute to PCG, at least quarterly (and in any event no later than the fifteenth (15th) day preceding each quarterly estimated tax payment due date), amounts sufficient to cover PCG's estimated tax liability attributable to Company income, calculated at the highest applicable combined federal and state marginal tax rates for the relevant taxable period. Tax distributions shall be treated as advances against, and shall reduce the amount of, any subsequent distributions to which PCG would otherwise be entitled under Section 5.2. Tax distributions shall be subject to the same limitations set forth in Section 5.2(a) above, including compliance with the GANB Loan covenants.
ARTICLE VI — MANAGEMENT
Section 6.1 — Manager. The Company shall be managed by PCG, which shall serve as the sole Manager of the Company. PCG, acting in its capacity as Manager, shall have full, exclusive, and complete authority, power, and discretion to manage, control, and direct the business and affairs of the Company, including all powers granted to a manager of a limited liability company under the Act. No Person other than the Manager shall have any authority to bind the Company or to act on its behalf, except as may be expressly delegated by the Manager in accordance with Section 6.4 of this Agreement.
The following individuals are authorized to act as representatives of the Manager in the conduct of the Company's business:
(a) Dominic R. Pellegrino, in his capacity as Managing Member of PCG, who is authorized to execute all agreements, instruments, and documents on behalf of the Company and to take all actions as may be necessary or appropriate in connection with the management of the Company and the Property;
(b) Adriana Pellegrino-Voss, in her capacity as Senior Vice President of Investments of PCG, who is authorized to execute agreements, instruments, and documents on behalf of the Company and to take such actions as may be delegated to her by Dominic R. Pellegrino or as may be necessary or appropriate in connection with the management of the Company and the Property; and
(c) Marcus Thiel, in his capacity as Chief Financial Officer of PCG, who is an authorized signatory for financial transactions of the Company, including the execution of bank documents, loan documents, and other financial instruments, and who is authorized to manage the Company's banking relationships and financial reporting.
Section 6.2 — Authority of Manager. Without limiting the generality of Section 6.1, the Manager shall have the authority, on behalf of the Company, to:
(a) Acquire, own, hold, operate, manage, improve, renovate, mortgage, pledge, hypothecate, lease, sublease, license, sell, exchange, or otherwise dispose of the Property and any other assets of the Company, upon such terms and conditions as the Manager shall determine;
(b) Borrow money and incur indebtedness on behalf of the Company, execute and deliver promissory notes, loan agreements, mortgages, deeds of trust, security agreements, guaranties, and other instruments of indebtedness or security in the name of the Company, including draws under the GANB Loan and any refinancing, modification, or extension thereof;
(c) Enter into, modify, amend, renew, extend, or terminate the Aurelian Franchise Agreement or any other management agreement, franchise agreement, license agreement, or operating agreement relating to the Property, upon such terms and conditions as the Manager shall determine;
(d) Open and maintain one or more bank accounts, brokerage accounts, and other deposit or investment accounts in the name of the Company, and invest Company funds in such investments as the Manager shall determine, including certificates of deposit, money market accounts, United States government securities, and other short-term liquid investments;
(e) Engage, retain, compensate, and terminate employees, agents, independent contractors, consultants, property managers, accountants (including the Company's accountants, Grantham, Pryce & Associates CPAs, located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, Florida 33607, with lead partner Howard Grantham, CPA), legal counsel, architects, engineers, appraisers, and such other advisors and service providers as the Manager deems necessary or appropriate for the conduct of the Company's business;
(f) Commence, prosecute, defend, settle, compromise, submit to arbitration, or otherwise resolve any and all litigation, arbitration, mediation, or other legal or administrative proceedings, claims, or disputes involving or relating to the Company, the Property, or the Company's business, upon such terms as the Manager shall determine;
(g) Execute, acknowledge, deliver, record, file, and perform all agreements, contracts, deeds, leases, licenses, instruments, certificates, and documents of every kind and description that the Manager deems necessary or convenient to carry out the purposes of the Company;
(h) Determine, approve, and implement capital expenditure programs, renovations, improvements, and maintenance schedules for the Property, including the establishment of reserves for capital expenditures, furniture, fixtures, and equipment replacement, and deferred maintenance;
(i) Make, change, or revoke any tax elections for the Company, including elections under Sections 754, 179, 168(k), and any other applicable provisions of the Internal Revenue Code, and execute and file any tax returns, forms, or statements on behalf of the Company;
(j) Obtain and maintain insurance coverage for the Company and the Property, including property, casualty, liability, business interruption, and managers' liability insurance, in such amounts and with such carriers as the Manager shall determine; and
(k) Take such other actions and exercise such other powers as are necessary, convenient, or incidental to the conduct, promotion, and attainment of the business, purposes, and activities of the Company.
Section 6.3 — Consent Rights (Superseded). The consent and approval rights of MSH under the Original Operating Agreement, including, without limitation, consent rights with respect to (a) capital calls in excess of Two Million Dollars ($2,000,000), (b) dispositions of all or substantially all of the Company's assets, (c) refinancings of the GANB Loan or any other indebtedness of the Company, (d) the incurrence of new indebtedness, (e) the admission of additional members, and (f) amendments to the Aurelian Franchise Agreement, are no longer in effect as MSH is no longer a Member of the Company. From and after the Effective Date, the Manager, as sole Member of the Company, may act without any consent requirement other than as may be imposed by applicable law or by the terms of third-party agreements to which the Company is a party, including the covenants and restrictions contained in the GANB Loan documents and the Aurelian Franchise Agreement.
Section 6.4 — Officers. The Manager may, from time to time, appoint one or more officers, agents, or delegates of the Company, with such titles, responsibilities, and duties as the Manager shall determine in its sole discretion. Any officer so appointed shall serve at the pleasure of the Manager and may be removed by the Manager at any time, with or without cause. The appointment of an officer shall not, in itself, create any contractual right in favor of such officer. Officers may include, without limitation, a President, Vice President, Secretary, Treasurer, or such other officers as the Manager deems appropriate for the efficient management of the Company's affairs.
Section 6.5 — Compensation.
(a) The Manager shall not receive any compensation from the Company for serving in its capacity as Manager, except as the Manager may determine in its sole discretion and in accordance with applicable law; provided, that any compensation paid to the Manager shall be on terms that are fair and reasonable and consistent with the terms of any applicable third-party agreements.
(b) The Company shall reimburse the Manager for all reasonable and documented out-of-pocket expenses incurred by the Manager in connection with the management of the Company and the Property, including travel expenses, legal fees, accounting fees, and other costs directly attributable to Company business. Such reimbursements shall be made promptly upon submission of appropriate documentation.
Section 6.6 — Standard of Care and Exculpation.
(a) The Manager shall manage the business and affairs of the Company in good faith and in a manner that the Manager reasonably believes to be in the best interests of the Company. The Manager shall exercise such care as an ordinarily prudent person in a like position would exercise under similar circumstances.
(b) Notwithstanding the foregoing, the Manager shall not be liable to the Company or to any Member for any act or omission taken or suffered by the Manager in connection with the business or affairs of the Company, unless such act or omission constitutes fraud, intentional misconduct, willful violation of law, or gross negligence. The Manager may consult with legal counsel, accountants, financial advisors, and other professionals, and any act or omission by the Manager taken or suffered in good faith in reliance upon the advice or opinion of such professionals shall be fully protected and shall not constitute a breach of the Manager's duties hereunder.
(c) To the maximum extent permitted under Section 605.04091 of the Florida Statutes, the fiduciary duties of the Manager (including the duties of care and loyalty) are hereby modified, restricted, and, to the extent permitted by law, eliminated. Without limiting the generality of the foregoing, the Manager shall be permitted to engage in other business activities, including activities that may compete with the Company, and shall have no obligation to present business opportunities to the Company or to refrain from engaging in competing enterprises.
Section 6.7 — Indemnification.
(a) The Company shall indemnify, defend, and hold harmless the Manager, its members, managers, officers, employees, and agents (including, without limitation, Dominic R. Pellegrino, Adriana Pellegrino-Voss, and Marcus Thiel) (each, an "Indemnified Person") from and against any and all losses, claims, damages, liabilities, judgments, fines, penalties, costs, and expenses (including reasonable attorneys' fees and costs of investigation and litigation) arising out of or relating to any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred by this Agreement or the Act; provided, however, that no Indemnified Person shall be entitled to indemnification hereunder with respect to any act or omission that constitutes fraud, intentional misconduct, willful violation of law, or gross negligence on the part of such Indemnified Person.
(b) Indemnification provided under this Section 6.7 shall be to the fullest extent permitted by the Act and other applicable law, and shall include the advancement of reasonable attorneys' fees and other expenses incurred by an Indemnified Person in connection with the defense of any action, suit, or proceeding, subject to the Indemnified Person's undertaking to repay such amounts if it is ultimately determined that such Indemnified Person is not entitled to indemnification hereunder.
(c) The Company shall maintain managers' liability insurance (or equivalent coverage) with Atlantic Omnivrel Insurance Company (or another carrier of comparable financial strength as selected by the Manager), currently maintained under Policy No. AFML-2022-08745, with coverage limits of not less than Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate. The Manager shall use commercially reasonable efforts to maintain such insurance in full force and effect at all times during the existence of the Company.
(d) The indemnification provided under this Section 6.7 shall survive the dissolution, winding up, and termination of the Company, and shall be in addition to (and not in limitation of) any other indemnification rights that an Indemnified Person may have under any separate agreement, insurance policy, or applicable law.
ARTICLE VII — BOOKS, RECORDS, AND TAX MATTERS
Section 7.1 — Books and Records. The Manager shall cause to be maintained full, complete, and accurate books and records of the Company at the Company's principal office, located at 1900 Bayshore Boulevard, Suite 1400, Tampa, Florida 33606, or at such other location as the Manager may determine. The books and records of the Company shall be maintained on an accrual basis in accordance with GAAP, consistently applied, and shall include, without limitation:
(a) A current list of the full name and last known business, residence, or mailing address of each Member;
(b) A copy of the Company's Articles of Organization, as amended, and all amendments thereto;
(c) A copy of this Agreement, as amended, and all prior operating agreements of the Company;
(d) Copies of the Company's federal, state, and local income tax returns and financial statements for the three (3) most recent fiscal years;
(e) Copies of all material agreements, contracts, and documents to which the Company is a party, including the GANB Loan documents, the Aurelian Franchise Agreement, and any management agreements; and
(f) Such other records as may be required by the Act or as the Manager deems necessary or appropriate.
PCG, as the sole Member, shall have the right to inspect and copy the books and records of the Company at any time during normal business hours, upon reasonable notice to the Manager.
Section 7.2 — Fiscal Year. The fiscal year of the Company shall be the calendar year, beginning on January 1 and ending on December 31 of each year.
Section 7.3 — Tax Matters.
(a) PCG shall serve as the "Tax Matters Member" of the Company (or "Partnership Representative" within the meaning of Section 6223 of the Internal Revenue Code, if applicable, in the event the Company is reclassified as a partnership for federal income tax purposes) and shall have full authority to act on behalf of the Company in connection with any tax audit, examination, proceeding, or dispute with the Internal Revenue Service or any state or local taxing authority.
(b) The Company's accounting and tax compliance services shall be provided by Grantham, Pryce & Associates CPAs, located at 4221 West Boy Scout Boulevard, Suite 600, Tampa, Florida 33607, under the supervision of lead partner Howard Grantham, CPA, or such other accounting firm as the Manager may designate from time to time.
(c) All tax returns, forms, and filings of the Company shall reference the Company's federal employer identification number (EIN 82-5063921).
(d) For so long as the Company is treated as a disregarded entity for federal income tax purposes, all items of income, gain, loss, deduction, and credit of the Company shall be reported on PCG's federal and applicable state income tax returns. In the event the Company's tax classification changes, the Manager shall cause the Company to file all required tax returns and make all required tax payments.
Section 7.4 — Bank Accounts. All funds of the Company shall be deposited in one or more bank accounts, money market accounts, or other deposit accounts maintained at financial institutions selected by the Manager. As of the Effective Date, the Company maintains operating accounts and reserve accounts at Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. The Manager may, in its sole discretion, change the financial institutions at which Company accounts are maintained, open additional accounts, or close existing accounts. No funds of the Company shall be commingled with the personal funds of any Member, Manager, officer, or agent.
ARTICLE VIII — PROPERTY AND INDEBTEDNESS
Section 8.1 — Company Property. The principal asset of the Company is The Palmetto Grand Resort & Spa (the "Property"), located at 650 Mandalay Avenue, Clearwater Beach, Florida 33767, as more fully described in Exhibit B attached hereto and incorporated herein by reference. The Property includes:
(a) A 312-room luxury beachfront resort, including forty-two (42) suites;
(b) Two (2) full-service restaurants, one (1) rooftop bar, and related food and beverage facilities;
(c) An approximately 18,000-square-foot spa and wellness center;
(d) Approximately 22,000 square feet of meeting and event space;
(e) Beachfront cabana service and related beach amenities;
(f) All personal property, furniture, fixtures, equipment (including kitchen and laundry equipment), and other tangible assets located on or associated with the Property; and
(g) All intangible assets associated with the Property, including goodwill, licenses, permits, approvals, and all rights of the Company under the Aurelian Franchise Agreement dated July 15, 2017 (twenty-year term expiring July 14, 2037; franchise fee of five percent (5%) of gross room revenue plus a two percent (2%) marketing fund contribution).
Title to all Company property, whether real, personal, or mixed, tangible or intangible, shall be held in the name of the Company and no Member shall have any ownership interest in any Company property in its individual name or right. The Membership Interest of PCG is personal property, and PCG shall have no interest in specific Company property.
Section 8.2 — Existing Indebtedness. As of the Effective Date, the Company's existing indebtedness consists of the GANB Loan, the material terms of which are as follows:
(a) Lender: Gulf Atlantic National Bank, 201 East Pine Street, Orlando, Florida 32801. Loan Officer: Christine Delacroix, Senior Vice President, Commercial Real Estate.
(b) Loan Number: CRE-2017-06284.
(c) Original Loan Date: August 1, 2017.
(d) Original Principal Amount: Sixty-One Million Two Hundred Fifty Thousand Dollars ($61,250,000), representing approximately seventy percent (70%) loan-to-value on the original acquisition price of $87,500,000.
(e) Interest Rate: SOFR plus 2.25% per annum (converted from LIBOR plus 2.25% per annum pursuant to a rate conversion amendment effective January 1, 2022).
(f) Maturity Date: August 1, 2027.
(g) Outstanding Balance as of December 31, 2022: Forty-Eight Million Six Hundred Thousand Dollars ($48,600,000) (prior to the incremental draw described below).
(h) Incremental Draw: In connection with the Redemption, Gulf Atlantic National Bank approved an incremental draw in the amount of Thirty Million Eight Hundred Fifty Thousand Dollars ($30,850,000) pursuant to that certain First Amendment to Loan Agreement and Lender Consent dated June 2024, which, among other things, authorized the incremental advance of funds and consented to the transfer of MSH's Membership Interest to PCG.
(i) Total Outstanding Following Redemption: Approximately Seventy-Nine Million Four Hundred Fifty Thousand Dollars ($79,450,000) (subject to subsequent amortization, repayment, and any refinancing). A summary of the existing indebtedness is set forth in Exhibit C attached hereto.
The Manager is authorized, in its sole discretion, to refinance, repay (in whole or in part), modify, amend, supplement, extend, or otherwise restructure the GANB Loan, or to incur new indebtedness on behalf of the Company, upon such terms and conditions as the Manager deems appropriate, subject to compliance with applicable law.
Section 8.3 — Capital Expenditures and Maintenance. The Manager shall maintain the Property in first-class condition consistent with the standards required by the Aurelian Hotels & Resorts brand and commensurate with competitive luxury resort properties located on the Gulf Coast of Florida. Without limiting the foregoing, the Manager shall:
(a) Establish and fund reserves for capital expenditures, including the replacement of furniture, fixtures, and equipment ("FF&E"), as the Manager deems appropriate and in compliance with the requirements of the Aurelian Franchise Agreement and the GANB Loan documents;
(b) Implement and oversee deferred maintenance programs and preventive maintenance schedules designed to preserve and enhance the physical condition, functionality, and value of the Property; and
(c) Approve and direct capital improvement projects for the Property as the Manager determines to be in the best interests of the Company, taking into consideration the competitive positioning of the Property, guest satisfaction, revenue optimization, and long-term asset preservation.
For purposes of historical reference, the Company invested a total of Twenty-Four Million Three Hundred Thousand Dollars ($24,300,000) in renovation capital during the period from 2017 through 2019, representing a comprehensive renovation and repositioning of the Property following its acquisition.
ARTICLE IX — DISSOLUTION, WINDING UP, AND TERMINATION
Section 9.1 — Events of Dissolution. The Company shall be dissolved upon the first to occur of the following events:
(a) The written determination and election of PCG, as the sole Member of the Company, to dissolve the Company;
(b) The sale, transfer, or other disposition of all or substantially all of the assets of the Company, unless PCG elects to continue the Company for purposes of winding up;
(c) The entry of a judicial decree of dissolution under Section 605.0702 of the Florida Statutes or any successor provision of the Act; or
(d) The occurrence of any event that makes it unlawful for the business of the Company to be carried on.
The death, dissolution, termination, bankruptcy, insolvency, or incompetence of the Member shall not cause the dissolution of the Company. The Company shall not be dissolved by the admission of additional members.
Section 9.2 — Winding Up. Upon the dissolution of the Company, the Manager (or, if the Manager is unable or unwilling to serve in such capacity, a liquidating agent appointed by PCG) shall proceed to wind up the affairs of the Company and to liquidate the Company's assets. During the winding-up period, the Company shall continue solely for the purpose of winding up its affairs and shall not engage in any business activities except as necessary for the orderly liquidation of its assets and the satisfaction of its obligations. The assets of the Company shall be applied and distributed in the following order of priority:
(i) First, to the payment and discharge of all debts, obligations, and liabilities of the Company (other than liabilities to the Member), including the satisfaction and repayment of the GANB Loan and all other outstanding indebtedness, and the payment of all expenses of winding up and liquidation;
(ii) Second, to the establishment of such reserves as the Manager (or liquidating agent) reasonably deems necessary or appropriate for contingent or unforeseen liabilities or obligations of the Company, which reserves may be held for such period as the Manager (or liquidating agent) shall determine and, upon expiration of such period, shall be distributed in accordance with clause (iii) below; and
(iii) Third, the balance, if any, to PCG, in accordance with PCG's positive capital account balance, or as otherwise determined by the Manager.
Section 9.3 — Articles of Dissolution. Upon the completion of the winding up of the Company's affairs and the distribution of all of its remaining assets, the Manager (or liquidating agent) shall cause to be filed with the Secretary of State of the State of Florida the Articles of Dissolution of the Company in accordance with Section 605.0702 or Section 605.0709 of the Florida Statutes (or any successor provision), and shall take such other actions as may be necessary or appropriate to terminate the Company's existence.
Section 9.4 — No Restoration of Capital. Except as otherwise provided in this Agreement, PCG shall look solely to the assets of the Company for all distributions (including distributions upon dissolution and winding up) and shall have no recourse against any other Person for the return of its Capital Contributions or for any distributions to which it may be entitled hereunder.
ARTICLE X — TRANSFER OF MEMBERSHIP INTEREST
Section 10.1 — Restrictions on Transfer. PCG may freely transfer, assign, pledge, hypothecate, or otherwise dispose of all or any portion of its Membership Interest in the Company without restriction, subject to (a) compliance with all applicable federal and state securities laws and regulations, (b) compliance with the terms and conditions of the GANB Loan documents (including any provisions requiring lender consent to a transfer of membership interests), and (c) compliance with any other agreements to which the Company is a party that restrict or condition transfers of membership interests. Any transferee admitted as a Member of the Company shall execute a joinder to, or an amendment of, this Agreement reflecting such transferee's admission and the terms of such transferee's Membership Interest.
Section 10.2 — Call Option and Put Option Provisions (Superseded). The call option, put option, and related provisions set forth in the Original Operating Agreement, including Sections 12.4 (Call Option), 12.4(c) (Third Appraiser), 12.5 (Closing Mechanics), and 12.7 (Bad Faith Determination), are hereby superseded in their entirety and shall have no further force or effect. As set forth in the Recitals to this Agreement, PCG exercised its call option under Section 12.4 of the Original Operating Agreement by written notice to MSH dated January 9, 2023. The resulting valuation dispute was resolved through binding arbitration (JAMS Ref. No. 1440032871) and the execution of the Redemption Agreement dated May 20, 2024. MSH's thirty-five percent (35%) Membership Interest was fully redeemed at the closing of the Redemption on June 28, 2024, for a total redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000). MSH has no further rights, obligations, or interests in or with respect to the Company. There is no longer a minority member whose interest may be subject to a call or put option.
ARTICLE XI — DISPUTE RESOLUTION
Section 11.1 — Governing Law. This Agreement, and all claims, disputes, and other matters arising out of or relating to this Agreement or the Company (whether in contract, tort, or otherwise), shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-law rules or principles that would cause the application of the laws of any other jurisdiction.
Section 11.2 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, including the breach, termination, or validity hereof, shall be resolved by binding arbitration administered by JAMS, seated in Jacksonville, Florida, in accordance with the JAMS Comprehensive Arbitration Rules and Procedures then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with the JAMS rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including specific performance, injunctive relief, and monetary damages. The decision of the arbitrator shall be final and binding upon the parties and may be entered and enforced in any court of competent jurisdiction. This arbitration provision carries forward the dispute-resolution mechanism originally set forth in Section 15.2 of the Original Operating Agreement, as adjusted for the single-member structure of the Company. This provision shall be primarily applicable in the event that additional members are admitted to the Company or in connection with disputes with former members or third parties arising under or related to this Agreement.
Section 11.3 — Attorneys' Fees. In any action, proceeding, or arbitration to enforce or interpret any provision of this Agreement, or arising out of or relating to any dispute under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party its reasonable attorneys' fees, costs, and expenses (including expert witness fees, court costs, and costs of investigation), in addition to any other relief to which such prevailing party may be entitled.
Section 11.4 — Jurisdiction and Venue. To the extent that any dispute, controversy, claim, or matter is not subject to arbitration pursuant to Section 11.2 above (including any action to compel arbitration or to enforce an arbitral award), the parties hereby irrevocably consent to the exclusive jurisdiction and venue of the state courts of the State of Florida located in Hillsborough County, Florida, or the United States District Court for the Middle District of Florida, Tampa Division. Each party hereby irrevocably waives any objection to the laying of venue in such courts and any claim that any such action or proceeding has been brought in an inconvenient forum.
ARTICLE XII — GENERAL PROVISIONS
Section 12.1 — Entire Agreement. This Agreement, together with the Exhibits attached hereto, constitutes the entire agreement of the Member with respect to the Company and supersedes all prior and contemporaneous agreements, understandings, negotiations, and communications, whether written or oral, relating to the subject matter hereof, including the Original Operating Agreement dated as of June 15, 2017, and all amendments, supplements, and modifications thereto. For the avoidance of doubt, the Redemption Agreement, the Mutual Release and Settlement Agreement, and the Assignment of Membership Interest, each dated as set forth in the Recitals, shall remain in full force and effect in accordance with their respective terms and shall not be deemed superseded by this Agreement.
Section 12.2 — Amendments. This Agreement may be amended, modified, supplemented, or restated only by a written instrument executed by PCG, as the sole Member of the Company. In the event that additional members are admitted to the Company, the amendment provisions of this Agreement shall be amended to reflect the consent requirements applicable to a multi-member limited liability company.
Section 12.3 — Severability. If any provision of this Agreement, or the application of any such provision to any Person or circumstance, shall be held by a court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and the remaining provisions of this Agreement shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had never been contained herein. To the extent permitted by applicable law, the parties hereby waive any provision of law that renders any provision of this Agreement invalid, illegal, or unenforceable in any respect.
Section 12.4 — Notices. All notices, requests, demands, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given and effective (a) upon personal delivery, (b) one (1) business day after deposit with a nationally recognized overnight courier service (with proof of delivery), (c) three (3) business days after deposit in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, or (d) upon transmission by electronic mail (with confirmation of receipt), in each case addressed as follows:
If to the Company or to PCG:
Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, Florida 33606
Attn: Dominic R. Pellegrino, Managing Member
Email: dpellegrino@pellegrinocapital.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, Florida 33131
Attn: Francesca Morano, Esq.
Email: fmorano@calderwoodharkness.com
Any party may change its address for purposes of this Section 12.4 by giving written notice of such change to the other parties in the manner provided herein.
Section 12.5 — Waiver. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the party granting such waiver. No failure or delay by any party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.
Section 12.6 — Headings. The headings and captions of the Articles, Sections, and Exhibits of this Agreement are included for convenience of reference only and shall not be deemed to constitute a part of this Agreement or to affect the construction, meaning, or interpretation of any provision hereof.
Section 12.7 — Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic transmission (including by PDF or other electronic format) shall be effective as delivery of a manually executed counterpart.
Section 12.8 — No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of PCG (as the sole Member) and the Company. Except as expressly provided in Section 6.7 with respect to the indemnification of Indemnified Persons, no Person who is not a party to this Agreement shall have any right to enforce any term or provision of this Agreement, and no third party is intended to be, or shall be deemed to be, a third-party beneficiary of this Agreement or any provision hereof.
Section 12.9 — Creditors. None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Company or any creditor of PCG. No creditor of the Company or of PCG who makes a loan to the Company shall have or acquire, by reason of making such loan, any direct interest in the profits, losses, or distributions of the Company (other than as may be specifically agreed in a separate written instrument executed by the Company).
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Operating Agreement of Palmetto Grand Ventures LLC, effective as of the Effective Date first written above.
SOLE MEMBER AND MANAGER:
PELLEGRINO CAPITAL GROUP LLC a Florida limited liability company
By: ________
Name: Dominic R. Pellegrino
Title: Managing Member
Date: July 15, 2024
EXHIBIT A
MEMBER INFORMATION
The following table sets forth the name, Membership Interest, cumulative Capital Contributions, and principal address of the sole Member of the Company as of the Effective Date:
Notes to Exhibit A:
1.  The cumulative Capital Contribution figure of $34,357,500 reflects PCG's direct equity contributions to the Company for the acquisition of the Property ($18,562,500) and renovation capital ($15,795,000), as described in Section 4.1 of this Agreement.
2.  In connection with the Redemption of MSH's 35% Membership Interest, which closed on June 28, 2024, PCG funded the $52,850,000 redemption price through a combination of (a) $22,000,000 in direct equity from PCG's own liquidity, and (b) $30,850,000 from an incremental draw under the GANB Loan at the Company level (Loan No. CRE-2017-06284). The incremental draw constitutes Company-level indebtedness and is not reflected as a Capital Contribution of PCG.
3.  MSH's prior capital account (reflecting MSH's acquisition contribution of $10,000,000 and renovation contribution of $8,505,000, net of distributions and allocations) has been reduced to zero and is no longer carried on the books and records of the Company as a result of the Redemption.
EXHIBIT B
DESCRIPTION OF COMPANY PROPERTY
The Palmetto Grand Resort & Spa
Address: 650 Mandalay Avenue, Clearwater Beach, Florida 33

AMENDED AND RESTATED OPERATING AGREEMENT

PALMETTO GRAND VENTURES LLC

AMENDED AND RESTATED OPERATING AGREEMENT

PALMETTO GRAND VENTURES LLC

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