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MUTUAL RELEASE AND SETTLEMENT AGREEMENT

This Mutual Release and Settlement Agreement (this "Agreement") is entered into as of May 20, 2024 (the "Effective Date"), by and among:

PELLEGRINO CAPITAL GROUP LLC, a Florida limited liability company ("PCG"), with its principal office at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606;

MERIDIAN SHORES HOSPITALITY LLC, a Delaware limited liability company ("MSH"), with its principal office at 220 Royal Palm Way, Suite 300, Palm Beach, FL 33480;

DOMINIC R. PELLEGRINO, an individual residing in the State of Florida, in his capacity as Managing Member of PCG ("D. Pellegrino");

NATHANIEL CORDERO, an individual residing in the State of Florida, in his capacity as Managing Member of MSH ("N. Cordero"); and

ELENA CORDERO, an individual residing in the State of Florida, in her capacity as a Member of MSH ("E. Cordero").

PCG, MSH, D. Pellegrino, N. Cordero, and E. Cordero are each referred to herein as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. Palmetto Grand Ventures LLC ("PGV"), a Florida limited liability company (Florida Department of State Filing No. L17000124583; EIN: 82-5063921), was formed on June 15, 2017, pursuant to an Operating Agreement of Palmetto Grand Ventures LLC dated June 15, 2017 (the "Operating Agreement" or "OA"), by and between PCG and MSH, for the purposes and on the terms and conditions set forth therein;

B. Under the Operating Agreement, PCG holds a sixty-five percent (65%) membership interest in PGV and serves as the sole Manager of PGV, with exclusive authority over the day-to-day management, operations, and affairs of PGV, and MSH holds a thirty-five percent (35%) membership interest in PGV;

C. PGV was formed for the purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort located at 650 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property"), which PGV acquired on August 1, 2017, for a purchase price of Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000), funded in part by a loan from Gulf Atlantic National Bank ("GANB") 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");

D. The Property has been and continues to be operated under a franchise agreement with Aurelian Hotels & Resorts Inc. dated July 15, 2017 (the "Franchise Agreement"), which governs the brand standards, reservation systems, and operational requirements applicable to the Property;

E. On January 9, 2023, PCG delivered written notice to MSH exercising its call option under Section 12.4 of the Operating Agreement to purchase MSH's entire thirty-five percent (35%) membership interest in PGV at Fair Market Value, as that term is defined in Section 12.4(a) of the Operating Agreement;

F. In connection with its exercise of the call option, PCG retained Whitfield Realty Advisors LLC ("Whitfield") to prepare an independent appraisal of PGV's real property and operating assets, and Whitfield delivered an appraisal report dated February 15, 2023, concluding that the Fair Market Value of one hundred percent (100%) of PGV's real property and operating assets was One Hundred Eighteen Million Dollars ($118,000,000) as of December 31, 2022;

G. Based on the Whitfield appraisal and the applicable provisions of the Operating Agreement, PCG calculated the buyout price for MSH's thirty-five percent (35%) membership interest as Forty-One Million Three Hundred Thousand Dollars ($41,300,000), comprising Twenty-Four Million Two Hundred Ninety Thousand Dollars ($24,290,000) attributable to MSH's thirty-five percent (35%) equity share and Seventeen Million Ten Thousand Dollars ($17,010,000) in accrued preferred return, and tendered that amount to MSH on March 1, 2023;

H. MSH rejected PCG's tender on March 10, 2023, and independently retained Beacon Valuation Group Inc. ("Beacon") to prepare a competing appraisal of PGV's assets, and Beacon delivered an appraisal report dated March 5, 2023, concluding that the Fair Market Value of one hundred percent (100%) of PGV's assets was One Hundred Fifty-One Million Five Hundred Thousand Dollars ($151,500,000) as of December 31, 2022, and MSH asserted a buyout price demand of Seventy Million Dollars ($70,000,000), inclusive of a claimed bad-faith penalty under Section 12.7 of the Operating Agreement;

I. On March 20, 2023, MSH filed a Demand for Arbitration with JAMS (JAMS Ref. No. 1440032871), asserting claims against PCG for (i) bad-faith valuation under Section 12.7 of the Operating Agreement, (ii) breach of fiduciary duty by PCG in its capacity as Manager of PGV, and (iii) breach of Section 8.3 of the Operating Agreement regarding capital expenditure and deferred-maintenance obligations, including an alleged Eight Million Two Hundred Thousand Dollars ($8,200,000) in deferred maintenance (the "Arbitration");

J. On April 5, 2023, PCG filed its Response and Counterclaim in the Arbitration, denying all of MSH's claims and seeking declaratory relief that the Forty-One Million Three Hundred Thousand Dollar ($41,300,000) buyout price constituted the proper Fair Market Value under Section 12.4 of the Operating Agreement and that PCG had complied with all of its obligations thereunder;

K. Hon. Margaret Liu Chen (Ret.) was appointed as the sole arbitrator in the Arbitration on April 28, 2023, and a preliminary conference was held on May 15, 2023, at which the arbitrator established a procedural schedule for the conduct of the proceedings;

L. Pursuant to Section 12.4(c) of the Operating Agreement, which provides for the retention of a neutral third appraiser in the event the Parties' respective appraisals diverge by more than fifteen percent (15%), the Parties jointly retained Linden Park Advisory LLC ("Linden Park") as such neutral third appraiser, and Linden Park delivered a preliminary indication of value in the range of One Hundred Thirty Million Dollars ($130,000,000) to One Hundred Thirty-Eight Million Dollars ($138,000,000) for one hundred percent (100%) of PGV's assets as of December 31, 2022;

M. The Parties engaged in extensive discovery in the Arbitration, including the production and exchange of documents, the taking of depositions of Gerald K. Whitfield (of Whitfield Realty Advisors LLC), Dr. Priya Ramanathan (of Beacon Valuation Group Inc.), Dominic R. Pellegrino, and Nathaniel Cordero, and briefing on a motion to compel production of certain financial records and internal communications, which motion was partially granted by the arbitrator on November 30, 2023;

N. On January 15, 2024, the Parties agreed to submit their dispute to mediation, and the Parties participated in two mediation sessions with Raymond Alcazar of Alcazar Dispute Resolution LLC, the first held on February 12, 2024, and the second held on March 25, 2024, at which the Parties reached a framework for settlement of all outstanding claims and disputes;

O. On April 8, 2024, the Parties executed a binding Term Sheet (the "Term Sheet") setting forth the principal terms of the settlement, including the agreed-upon redemption price, the structure of the redemption transaction, and the mutual release of all claims;

P. Contemporaneously with the execution of this Agreement, the Parties are executing a Redemption Agreement dated May 20, 2024 (the "Redemption Agreement"), providing for PCG's purchase of MSH's entire thirty-five percent (35%) membership interest in PGV for a redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) (the "Redemption Price"), on the terms and subject to the conditions set forth therein; and

Q. The Parties desire to fully and finally settle, compromise, and resolve any and all claims, disputes, controversies, and causes of action between and among them arising out of or relating to the Operating Agreement, the call-option exercise, the Arbitration, and PGV, on the terms and conditions set forth herein, and to provide for the mutual release of all such claims so that the Parties may conclude their business relationship with finality and certainty.

NOW, THEREFORE, in consideration of the mutual covenants, releases, and agreements contained herein, the payment of the Redemption Price pursuant to the Redemption Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the Parties, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 — Definitions. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.

(a) "Arbitration" means the arbitration proceeding captioned Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC, JAMS Ref. No. 1440032871, pending before Hon. Margaret Liu Chen (Ret.) in Jacksonville, Florida.

(b) "Claims" means any and all claims, demands, actions, causes of action, suits, damages, losses, liabilities, costs, expenses (including attorneys' fees and disbursements), obligations, judgments, liens, penalties, fines, debts, accounts, offsets, rights, promises, agreements, and controversies, of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising under statute, contract, tort, or any other legal or equitable theory, whether arising under federal, state, or local law.

(d) "GANB" means Gulf Atlantic National Bank.

(e) "GANB Loan" means the loan from GANB to PGV in the original principal amount of $61,250,000, evidenced by Loan No. CRE-2017-06284.

(f) "MSH Released Parties" means MSH, Nathaniel Cordero, Elena Cordero, and each of their respective members, managers, officers, directors, employees, agents, representatives, heirs, executors, administrators, successors, and assigns.

(g) "Operating Agreement" means the Operating Agreement of Palmetto Grand Ventures LLC dated June 15, 2017, by and between PCG and MSH, as the same may have been amended, modified, or supplemented from time to time.

(h) "PCG Released Parties" means PCG, PGV, Dominic R. Pellegrino, Adriana Pellegrino-Voss, Marcus Thiel, and each of their respective members, managers, officers, directors, employees, agents, representatives, heirs, executors, administrators, successors, and assigns.

(i) "PGV" means Palmetto Grand Ventures LLC, a Florida limited liability company (Florida Department of State Filing No. L17000124583; EIN: 82-5063921).

(j) "Property" means The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort located at 650 Mandalay Avenue, Clearwater Beach, FL 33767, together with all improvements, fixtures, furniture, equipment, and personal property located thereon or used in connection therewith.

(k) "Redemption Agreement" means that certain Redemption Agreement dated as of May 20, 2024, by and between PCG and MSH, providing for the purchase by PCG of MSH's thirty-five percent (35%) membership interest in PGV.

(l) "Redemption Price" means Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), payable in accordance with the terms of the Redemption Agreement.

(m) "Released Claims" has the meaning set forth in Section 2.1 of this Agreement.

(n) "Term Sheet" means the binding term sheet executed by the Parties on April 8, 2024, setting forth the principal terms of the settlement contemplated by this Agreement and the Redemption Agreement.

Section 1.2 — Interpretation. Unless the context otherwise requires, the following rules of construction shall apply to this Agreement:

(a) References to "Sections," "Articles," and "Exhibits" are to sections, articles, and exhibits of this Agreement unless otherwise indicated.

(b) The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(c) The word "including" (and correlative words such as "include" and "includes") means "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(d) Words in the singular shall include the plural and vice versa, and words in one gender shall include all genders, as the context may require.

(e) References to "dollars" or "$" are to United States dollars.

(f) References to any statute, rule, or regulation shall include any amendment, modification, or successor thereto.

(g) The word "or" is not exclusive.

(h) The words "herein," "hereof," "hereby," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.

(i) The term "person" includes any individual, corporation, limited liability company, partnership, trust, association, governmental authority, or other entity.

ARTICLE II — RELEASES

Section 2.1 — Release by MSH, N. Cordero, and E. Cordero. MSH, Nathaniel Cordero, and Elena Cordero (collectively, the "MSH Releasors"), on behalf of themselves and their respective heirs, executors, administrators, legal representatives, successors, assigns, agents, and representatives, hereby irrevocably and unconditionally release, acquit, and forever discharge the PCG Released Parties from any and all Claims that the MSH Releasors, or any of them, ever had, now have, or hereafter may have, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising out of, relating to, or in connection with any of the following:

(a) The Operating Agreement, including any amendments, modifications, or supplements thereto, and any rights, obligations, or entitlements arising thereunder;

(b) The formation, governance, management, administration, and operations of PGV, including any decisions made or actions taken by PCG in its capacity as sole Manager of PGV;

(c) The acquisition, renovation, improvement, operation, management, and maintenance of the Property, including the initial acquisition on August 1, 2017, all capital improvements and renovations undertaken thereafter, and all decisions relating to the day-to-day operations and management of the Property;

(d) PCG's exercise of the call option under Section 12.4 of the Operating Agreement, including the January 9, 2023 call-option notice, the procedures followed in connection therewith, and the determination of Fair Market Value;

(e) The Whitfield appraisal and any other valuation, appraisal, or assessment of PGV's assets, including the methodology, assumptions, conclusions, and use thereof;

(f) The alleged bad-faith valuation under Section 12.7 of the Operating Agreement, including all allegations that PCG intentionally or recklessly undervalued PGV's assets in connection with the call-option exercise;

(g) The alleged breach of fiduciary duty by PCG in its capacity as Manager of PGV, including all allegations of self-dealing, conflicts of interest, failure to disclose material information, and breach of the duty of loyalty and the duty of care;

(h) The alleged breach of Section 8.3 of the Operating Agreement regarding capital expenditure and deferred-maintenance obligations, including the Eight Million Two Hundred Thousand Dollar ($8,200,000) deferred-maintenance claim and all related allegations of mismanagement, deferred repairs, and failure to maintain the Property in accordance with brand standards;

(i) The Arbitration, including all claims, counterclaims, motions, discovery disputes, orders, and proceedings in JAMS Ref. No. 1440032871 before Hon. Margaret Liu Chen (Ret.);

(j) Any distributions, preferred returns, profit allocations, capital contributions, capital account adjustments, or other economic entitlements under the Operating Agreement, whether arising before, on, or after the Effective Date;

(k) The Redemption Agreement and the transactions contemplated thereby, including the payment of the Redemption Price and the transfer of MSH's membership interest in PGV; and

(l) Any other matter, act, omission, event, transaction, agreement, communication, or circumstance of any kind or nature whatsoever, arising from or relating to the relationship among the Parties in connection with PGV, the Property, or the Operating Agreement, from the inception of that relationship through and including the Effective Date.

The Claims released pursuant to this Section 2.1 are collectively referred to herein as the "Released Claims."

Section 2.2 — Release by PCG, PGV, and D. Pellegrino. PCG, PGV (acting through PCG as its sole Manager), and Dominic R. Pellegrino (collectively, the "PCG Releasors"), on behalf of themselves and their respective heirs, executors, administrators, legal representatives, successors, assigns, agents, and representatives, hereby irrevocably and unconditionally release, acquit, and forever discharge the MSH Released Parties from any and all Claims that the PCG Releasors, or any of them, ever had, now have, or hereafter may have, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising out of, relating to, or in connection with any of the matters described in clauses (a) through (l) of Section 2.1 above, mutatis mutandis, including without limitation:

(a) PCG's counterclaim for declaratory relief filed in the Arbitration on April 5, 2023, seeking a declaration that the Forty-One Million Three Hundred Thousand Dollar ($41,300,000) buyout price constituted the proper Fair Market Value under Section 12.4 of the Operating Agreement;

(b) Any claims relating to MSH's retention of Beacon Valuation Group Inc. and the Beacon appraisal, including any allegations that MSH acted in bad faith in connection with the valuation dispute;

(c) Any claims relating to MSH's filing of the Demand for Arbitration and the prosecution of the Arbitration, including any claims for frivolous or bad-faith litigation conduct; and

(d) Any other claims, whether arising under the Operating Agreement, at common law, in equity, or under any applicable statute, that the PCG Releasors may have against the MSH Released Parties arising out of or relating to the matters described in Section 2.1(a) through (l) above.

Section 2.3 — Scope of Releases. The releases set forth in Sections 2.1 and 2.2 of this Agreement are intended to be as broad and comprehensive as permitted by applicable law and shall be construed to effectuate a complete and final resolution of all disputes between and among the Parties. Without limiting the generality of the foregoing:

(a) The releases encompass all Claims whether arising under contract, tort, statute (including Chapter 605, Florida Statutes, the Florida Revised Limited Liability Company Act, and any predecessor or successor statute), equity, or any other legal or equitable theory, and whether arising under federal, state, or local law;

(b) The releases encompass all Claims arising out of or relating to any act or omission occurring from the inception of the Parties' relationship with respect to PGV through and including the Effective Date, regardless of when such Claims may first become known, mature, or accrue; and

(c) Each Party acknowledges and agrees that it may discover facts different from, or in addition to, those that it now knows or believes to be true with respect to the Released Claims, and each Party expressly agrees that this Agreement and the releases contained herein shall remain in full force and effect in all respects notwithstanding any such discovery of different or additional facts.

Section 2.4 — Waiver of Unknown Claims. Each Party expressly waives and relinquishes, to the fullest extent permitted by applicable law, any and all rights and benefits that it may have under any statute, rule, regulation, or common-law principle of any jurisdiction that would otherwise limit the scope of a release to those Claims that are known or suspected to exist at the time of execution of such release. Each Party understands and acknowledges the significance of this waiver and has been advised by its legal counsel concerning its effect. Each Party confirms that this waiver of unknown claims is a knowing and voluntary waiver, made after full consultation with legal counsel, and that such waiver is an essential and material term of this Agreement, without which the other Parties would not have entered into this Agreement.

Section 2.5 — Exceptions to Release. Notwithstanding any provision of this Article II to the contrary, the releases set forth in Sections 2.1 and 2.2 shall not extend to or release:

(a) Any obligations arising under this Agreement, including the covenants, representations, warranties, and indemnification obligations set forth herein;

(b) Any obligations arising under the Redemption Agreement, including the obligation to pay the Redemption Price and all other obligations of the respective parties thereto;

(c) Any obligations arising under the Assignment of Membership Interest executed by MSH in connection with the closing of the Redemption;

(d) Any claims arising from actual fraud committed by a Party in connection with the negotiation, execution, or performance of this Agreement or the Redemption Agreement; and

(e) The indemnification obligations set forth in Article IV of this Agreement.

ARTICLE III — DISMISSAL OF ARBITRATION; COVENANT NOT TO SUE

Section 3.1 — Dismissal of Arbitration. Within ten (10) business days following the closing of the Redemption under the Redemption Agreement (the "Closing"), the Parties shall jointly file with JAMS in Jacksonville, Florida, a Stipulation of Dismissal with Prejudice of the Arbitration, JAMS Ref. No. 1440032871, substantially in the form attached hereto as Exhibit A (the "Stipulation of Dismissal"), dismissing with prejudice all claims, counterclaims, motions, and proceedings pending in the Arbitration. The Stipulation of Dismissal shall provide that each Party shall bear its own costs, fees, and expenses in connection with the Arbitration.

Counsel of record for the respective Parties shall execute and file the Stipulation of Dismissal as follows: Francesca Morano, Partner, Calderwood & Harkness LLP, as counsel for PCG, and Victoria Castillo, Partner, Hargrove, Dunlap & Castillo LLP, as counsel for MSH. Each Party shall cause its respective counsel to cooperate in the timely preparation, execution, and filing of the Stipulation of Dismissal and shall take all actions reasonably necessary to effectuate the dismissal of the Arbitration with prejudice.

For the avoidance of doubt, the Stipulation of Dismissal was filed with JAMS on August 9, 2024, and the Arbitration has been dismissed with prejudice in its entirety.

Section 3.2 — Covenant Not to Sue. Each Party hereby irrevocably covenants and agrees that it will not, directly or indirectly, commence, maintain, prosecute, participate in, contribute to, or assist any action, suit, arbitration, mediation, administrative proceeding, or other proceeding of any kind against any Released Party, or cause or encourage any other person or entity to commence, maintain, prosecute, participate in, contribute to, or assist any such proceeding, based upon, arising out of, or relating to any of the Released Claims. This covenant not to sue is an independent obligation of each Party and is in addition to, and not in substitution for, the releases set forth in Article II.

In the event that any Party violates this Section 3.2 by commencing, maintaining, or prosecuting any proceeding in contravention of this covenant not to sue, the breaching Party shall be liable for and shall reimburse the non-breaching Party for all costs, expenses, and reasonable attorneys' fees incurred by the non-breaching Party in defending against such action or proceeding, including any costs incurred in enforcing this Section 3.2. Such obligation to reimburse shall be in addition to any other remedies available to the non-breaching Party at law or in equity.

Section 3.3 — No Assignment of Claims. Each Party represents and warrants to each other Party that, as of the Effective Date, such Party has not heretofore assigned, transferred, conveyed, pledged, hypothecated, or otherwise encumbered any of the Released Claims to any person or entity, and that such Party is the sole and exclusive owner of all Released Claims that such Party is releasing pursuant to this Agreement. Each Party further covenants that it shall not, at any time after the Effective Date, assign, transfer, convey, or otherwise encumber any of the Released Claims or any rights arising in connection therewith.

ARTICLE IV — INDEMNIFICATION

Section 4.1 — Indemnification by MSH Releasors. MSH, N. Cordero, and E. Cordero shall, jointly and severally, indemnify, defend, and hold harmless the PCG Released Parties from and against any and all Claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees, court costs, and expenses of investigation and litigation) arising out of or resulting from:

(a) Any breach by any of the MSH Releasors of any representation, warranty, covenant, or agreement made by any of the MSH Releasors in this Agreement; or

(b) Any claim, demand, action, or proceeding brought by any third party against any PCG Released Party that relates to or arises from any of the Released Claims and that is based upon, or results from, an alleged assignment, transfer, conveyance, or encumbrance of any Released Claim by any MSH Releasor in violation of Section 3.3 of this Agreement.

Section 4.2 — Indemnification by PCG Releasors. PCG, PGV, and D. Pellegrino shall, jointly and severally, indemnify, defend, and hold harmless the MSH Released Parties from and against any and all Claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees, court costs, and expenses of investigation and litigation) arising out of or resulting from:

(a) Any breach by any of the PCG Releasors of any representation, warranty, covenant, or agreement made by any of the PCG Releasors in this Agreement; or

(b) Any claim, demand, action, or proceeding brought by any third party against any MSH Released Party that relates to or arises from any of the Released Claims and that is based upon, or results from, an alleged assignment, transfer, conveyance, or encumbrance of any Released Claim by any PCG Releasor in violation of Section 3.3 of this Agreement.

Section 4.3 — Indemnification Procedures. Any Party seeking indemnification under this Article IV (an "Indemnified Party") shall promptly notify the indemnifying Party (the "Indemnifying Party") in writing of any claim, demand, or proceeding for which indemnification is sought, provided that the failure to give such notice shall not relieve the Indemnifying Party of its indemnification obligations except to the extent the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall have the right, at its sole cost and expense, to assume the defense of any such claim, demand, or proceeding with counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall cooperate fully with the Indemnifying Party in the defense of any such claim. The Indemnifying Party shall not settle any claim without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned, or delayed, unless such settlement includes a complete and unconditional release of the Indemnified Party from all liability in respect of such claim and does not impose any obligation (other than confidentiality obligations) upon the Indemnified Party.

ARTICLE V — ATTORNEYS' FEES AND COSTS

Section 5.1 — Each Party Bears Its Own Fees and Costs. Except as otherwise expressly provided in this Agreement, each Party shall bear and pay its own attorneys' fees, costs, expenses, and disbursements incurred in connection with the Arbitration, the mediation sessions conducted by Raymond Alcazar of Alcazar Dispute Resolution LLC on February 12, 2024 and March 25, 2024, the negotiation, preparation, and execution of this Agreement and the Redemption Agreement, and all related matters. Without limitation, this includes:

(a) Fees and costs of legal counsel, including fees and costs of Calderwood & Harkness LLP (counsel for PCG) and Hargrove, Dunlap & Castillo LLP (counsel for MSH);

(b) Fees and costs of experts, appraisers, and consultants, including fees and costs of Whitfield Realty Advisors LLC (retained by PCG), Beacon Valuation Group Inc. (retained by MSH), and each Party's respective share of the fees and costs of Linden Park Advisory LLC (jointly retained as the neutral third appraiser);

(d) Mediator fees and costs of Alcazar Dispute Resolution LLC; and

(e) All other costs, expenses, and disbursements of any kind or nature incurred by any Party in connection with the disputes between and among the Parties.

Neither Party shall seek reimbursement, contribution, or recovery from any other Party for any such fees, costs, expenses, or disbursements, and each Party hereby irrevocably waives any right to recover the same from any other Party.

Section 5.2 — Prevailing Party in Enforcement. Notwithstanding the provisions of Section 5.1, in the event of any action, suit, arbitration, or other proceeding brought by any Party to enforce any provision of this Agreement or to obtain damages for the breach hereof, the prevailing Party in such action or proceeding shall be entitled to recover from the non-prevailing Party its reasonable attorneys' fees, costs, and expenses incurred in connection with such enforcement action or proceeding, in addition to any other relief to which such prevailing Party may be entitled.

ARTICLE VI — REPRESENTATIONS AND WARRANTIES

Section 6.1 — Mutual Representations and Warranties. Each Party hereby represents and warrants to each other Party, as of the Effective Date, as follows:

(a) Authority. Such Party has the full right, power, legal capacity, and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. In the case of PCG, the execution and delivery of this Agreement and the performance of PCG's obligations hereunder have been duly authorized by Dominic R. Pellegrino in his capacity as Managing Member of PCG, and no other authorization, consent, or approval is required. In the case of MSH, the execution and delivery of this Agreement and the performance of MSH's obligations hereunder have been duly authorized by Nathaniel Cordero in his capacity as Managing Member of MSH and by Elena Cordero in her capacity as a Member of MSH holding forty percent (40%) of MSH's membership interests, and no other authorization, consent, or approval is required.

(b) Binding Obligation. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

(c) No Conflicts. The execution, delivery, and performance of this Agreement by such Party does not and will not (i) violate, conflict with, or result in a breach of any provision of the organizational documents of such Party (if applicable), (ii) violate, conflict with, or result in a breach of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or law to which such Party is a party or by which such Party or its assets are bound, or (iii) require any consent, approval, authorization, or filing that has not been obtained or made.

(d) No Assignment. Such Party has not assigned, transferred, conveyed, pledged, hypothecated, or otherwise encumbered any of the Released Claims or any interest therein to any person or entity, and such Party is the sole and exclusive owner of all Released Claims being released by such Party pursuant to this Agreement.

(e) Legal Representation. Such Party has been represented throughout the negotiation, drafting, and execution of this Agreement by independent legal counsel of its own choosing. Specifically, PCG and D. Pellegrino have been represented by Francesca Morano of Calderwood & Harkness LLP, 801 Brickell Avenue, Suite 2800, Miami, FL 33131, and MSH, N. Cordero, and E. Cordero have been represented by Victoria Castillo of Hargrove, Dunlap & Castillo LLP, 1395 Brickell Avenue, Suite 3100, Miami, FL 33131. Each Party has had a full and fair opportunity to review and understand the terms and conditions of this Agreement and has consulted with its legal counsel regarding the legal effect and consequences of this Agreement.

(f) Voluntary Execution. Such Party is executing this Agreement voluntarily and of its own free will, without coercion, duress, or undue influence by any person or entity. Each Party has carefully read this Agreement, understands its contents, and agrees to be bound by its terms.

(g) No Reliance. Such Party is not relying on any representation, statement, promise, inducement, or agreement of any kind made by any Released Party or any other person or entity, other than as expressly set forth in this Agreement, in entering into this Agreement. Each Party acknowledges that it has conducted its own independent investigation and analysis of the matters giving rise to this Agreement and is relying solely upon its own judgment and the advice of its counsel.

(h) No Pending Claims. Except for the Arbitration (which is being dismissed pursuant to Section 3.1), such Party has no pending action, suit, arbitration, or other proceeding against any Released Party arising out of or relating to the Released Claims, and such Party is not aware of any threatened action, suit, arbitration, or other proceeding by any third party relating to the Released Claims.

Section 6.2 — Specific Representations by Individual Parties. In addition to the foregoing mutual representations and warranties:

(a) D. Pellegrino represents and warrants that he executes this Agreement both in his individual capacity and in his capacity as Managing Member of PCG, and that he has full authority to execute this Agreement on behalf of PCG and to bind PCG and PGV to the terms and conditions hereof. D. Pellegrino further represents that no other consent, approval, or authorization of any member, manager, officer, or other person is required in connection with the execution and delivery of this Agreement by PCG or PGV.

(b) N. Cordero represents and warrants that he executes this Agreement both in his individual capacity and in his capacity as Managing Member of MSH, and that he has full authority to execute this Agreement on behalf of MSH and to bind MSH to the terms and conditions hereof. N. Cordero further represents that, together with the consent and authorization of E. Cordero, all necessary approvals for the execution and delivery of this Agreement by MSH have been obtained.

(c) E. Cordero represents and warrants that she executes this Agreement in her individual capacity and in her capacity as a Member of MSH holding forty percent (40%) of MSH's membership interests, and that she has the full right and authority to execute this Agreement in such capacities. E. Cordero further represents that she has authorized the execution and delivery of this Agreement by MSH and the performance by MSH of its obligations hereunder.

ARTICLE VII — CONFIDENTIALITY

Section 7.1 — Confidentiality of Terms. The terms and conditions of this Agreement, the Redemption Agreement, the Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), and all negotiations, discussions, and correspondence leading to the execution of this Agreement and the Redemption Agreement (collectively, the "Confidential Information") shall be maintained in strict confidence by each of the Parties and shall not be disclosed, published, or disseminated to any person or entity, except:

(a) As required by applicable law, regulation, or court or arbitral order, provided that the disclosing Party shall, to the extent reasonably practicable, provide prompt written notice to the other Parties prior to any such required disclosure and shall cooperate with the other Parties in seeking a protective order or other appropriate relief to limit the scope of such disclosure;

(b) As necessary to effectuate the transactions contemplated by this Agreement and the Redemption Agreement, including disclosure to Gulf Atlantic National Bank in connection with the lender consent and any incremental draw on the GANB Loan, to Grantham, Pryce & Associates CPAs in connection with the preparation of tax returns and related filings, and to Atlantic Omnivrel Insurance Company in connection with any insurance claim relating to the Property;

(c) To such Party's legal counsel, accountants, tax advisors, financial advisors, and lenders on a need-to-know basis, provided that such persons agree to maintain the confidentiality of the Confidential Information on terms no less restrictive than those set forth in this Section 7.1; and

(d) With the prior written consent of all other Parties.

Each Party shall be responsible for any breach of this Section 7.1 by its representatives, advisors, or agents, and shall take all reasonable measures to ensure compliance with the confidentiality obligations set forth herein.

Section 7.2 — Non-Disparagement. Each Party hereby agrees that it shall not, and shall cause its officers, directors, managers, members, employees, agents, and representatives not to, make or publish any disparaging, derogatory, defamatory, or otherwise negative statements, whether oral, written, or electronic, concerning any Released Party in connection with the matters that are the subject of this Agreement, including the Operating Agreement, the formation and operations of PGV, the valuation dispute, the Arbitration, the mediation, and the settlement reflected in this Agreement and the Redemption Agreement. This non-disparagement obligation shall survive the execution and delivery of this Agreement and shall remain in full force and effect in perpetuity.

Section 7.3 — Permitted Statements. Notwithstanding the confidentiality and non-disparagement obligations set forth in Sections 7.1 and 7.2, if asked about the dispute, any Party may state publicly or privately that the matter has been resolved amicably and to the mutual satisfaction of the Parties, without disclosing the financial terms of the settlement, the Redemption Price, or any other Confidential Information. Any such statement shall be limited to the foregoing and shall not include any characterization of the merits of any Party's claims or defenses in the Arbitration or any other proceeding.

ARTICLE VIII — TAX MATTERS

Section 8.1 — Tax Treatment. The Parties agree that the Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) shall be treated for federal and state income tax purposes as consideration paid for the redemption of MSH's thirty-five percent (35%) membership interest in PGV, in accordance with the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 731, 736, 741, and 751 thereof, and the Treasury Regulations promulgated thereunder, as well as any applicable state or local tax laws. The Parties shall report the transactions contemplated by this Agreement and the Redemption Agreement on their respective federal, state, and local tax returns in a manner consistent with this Section 8.1, and no Party shall take any position on any tax return, amended return, or claim for refund that is inconsistent with such treatment unless required by a final determination (within the meaning of Section 1313 of the Code) or unless the other Parties consent in writing.

Each Party shall be solely responsible for its own tax obligations, including any income taxes, capital gains taxes, transfer taxes, or other taxes, arising from or in connection with the transactions contemplated by this Agreement and the Redemption Agreement. Neither Party makes any representation or warranty to any other Party regarding the tax consequences of this Agreement, the Redemption Agreement, or any of the transactions contemplated hereby or thereby. Each Party acknowledges that it has relied solely on the advice of its own tax advisors in connection with such matters.

Section 8.2 — Cooperation on Tax Matters. The Parties agree to cooperate in good faith with one another in connection with any tax filings, audits, assessments, examinations, or inquiries by any governmental authority relating to PGV for all tax years through and including the date of the Closing, including the provision of information, the execution of documents, and the making of elections as may be reasonably requested by any Party. Such cooperation shall include, without limitation, making available relevant books, records, documents, and other information in the possession or control of such Party, and making available personnel (including officers, directors, and employees) for interviews, depositions, or testimony as may be reasonably required. The requesting Party shall reimburse the cooperating Party for any reasonable out-of-pocket costs and expenses incurred in connection with such cooperation, upon request and reasonable documentation thereof.

ARTICLE IX — MISCELLANEOUS PROVISIONS

Section 9.1 — Entire Agreement. This Agreement, together with the Redemption Agreement, the Assignment of Membership Interest executed in connection with the closing of the Redemption, and the other documents and instruments executed and delivered in connection with the Closing (collectively, the "Transaction Documents"), constitutes the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous negotiations, representations, understandings, discussions, term sheets, letters of intent, and agreements, whether oral or written, between or among the Parties with respect to such subject matter, including the Term Sheet dated April 8, 2024, which is hereby superseded in its entirety. No Party has been induced to enter into this Agreement by, nor is any Party relying on, any representation, warranty, covenant, or agreement outside those expressly set forth in the Transaction Documents.

Section 9.2 — Amendments. This Agreement may not be amended, modified, supplemented, restated, or waived except by a written instrument duly executed by each of the Parties hereto. No oral amendment, modification, or waiver of any provision of this Agreement shall be effective for any purpose.

Section 9.3 — Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without giving effect to any choice-of-law or conflicts-of-law principles that would cause the application of the laws of any jurisdiction other than the State of Florida.

Section 9.4 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, including the interpretation, breach, termination, or validity hereof, shall be resolved by final and binding arbitration administered by JAMS in Jacksonville, Florida, in accordance with the JAMS Comprehensive Arbitration Rules and Procedures then in effect, consistent with the dispute resolution provisions set forth in Section 15.2 of the Operating Agreement. The arbitration shall be conducted before a single arbitrator selected in accordance with the applicable JAMS rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order, including injunctive or other equitable relief and specific performance. Judgment upon any award rendered by the arbitrator may be entered in any court of competent jurisdiction. The provisions of this Section 9.4 shall survive the termination or expiration of this Agreement.

Section 9.5 — Waiver. No waiver by any Party of any breach or default of any provision of this Agreement shall be effective unless set forth in a written instrument executed by the waiving Party. No waiver of any breach or default shall constitute a waiver of any other or subsequent breach or default, whether of the same or a different provision of this Agreement. No failure or delay by any Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

Section 9.6 — Severability. If any provision of this Agreement, or the application thereof to any person, entity, or circumstance, is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. In the event that any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision so as to effect the original intent of the Parties as closely as possible in a manner that is valid, legal, and enforceable.

Section 9.7 — Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of all other Parties, and any purported assignment or delegation without such consent shall be null and void and of no force or effect.

Section 9.8 — No Admission of Liability. This Agreement is a compromise and settlement of disputed claims. Nothing contained herein shall be deemed, construed, or interpreted as an admission of liability, fault, wrongdoing, or violation of law by any Party. Each Party specifically denies any liability or wrongdoing with respect to the matters giving rise to the Arbitration and the disputes resolved by this Agreement. The Parties have entered into this Agreement solely to avoid the uncertainty, expense, and burden of continued arbitration and litigation and to achieve a final and amicable resolution of their disputes.

Section 9.9 — Counterparts and Electronic Execution. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by portable document format (PDF), electronic signature (including signatures created through DocuSign, Ashford Health IT, or similar electronic signature platforms), or facsimile transmission shall be deemed original signatures and shall be fully effective and binding for all purposes.

Section 9.10 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) one (1) business day after being sent by nationally recognized overnight courier service (with confirmation of delivery), or (c) when sent by email with confirmation of receipt (excluding automated "out of office" or similar responses), to the following addresses (or to such other address as a Party may designate by written notice to the other Parties in accordance with this Section 9.10):

If to PCG or D. Pellegrino:

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

Attn: Dominic R. Pellegrino, Managing Member

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

Francesca Morano, Esq. Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131

If to MSH, N. Cordero, or E. Cordero:

Meridian Shores Hospitality LLC 220 Royal Palm Way, Suite 300 Palm Beach, FL 33480

Attn: Nathaniel Cordero, Managing Member

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

Victoria Castillo, Esq. Hargrove, Dunlap & Castillo LLP 1395 Brickell Avenue, Suite 3100 Miami, FL 33131

Section 9.11 — Third-Party Beneficiaries. Except for the PCG Released Parties and the MSH Released Parties, each of whom is an intended third-party beneficiary of the releases set forth in Article II of this Agreement with full rights to enforce such releases, nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity other than the Parties and their permitted successors and assigns any legal or equitable right, benefit, remedy, or claim under or by reason of this Agreement.

Section 9.12 — Construction. This Agreement was negotiated at arm's length by the Parties, each represented by independent legal counsel, and shall not be construed more strictly against any Party on the ground that such Party or its counsel drafted or prepared this Agreement or any portion hereof. Each Party has participated in the drafting and negotiation of this Agreement, and any ambiguities shall not be construed against any Party as the drafter. The Parties acknowledge and agree that they are sophisticated parties who have had the benefit of legal counsel and have bargained for and agreed to all of the terms set forth herein.

Section 9.13 — Further Assurances. Each Party shall, at any time and from time to time after the Effective Date, upon the reasonable request of any other Party, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably necessary or desirable to carry out the purposes and intent of this Agreement and to consummate and make effective the transactions contemplated hereby, including the dismissal of the Arbitration, the effectuation of the releases set forth in Article II, and the completion of the Redemption.

[Remainder of Page Intentionally Left Blank — Signature Pages Follow]

IN WITNESS WHEREOF, the Parties have executed this Mutual Release and Settlement Agreement as of the date first written above.

PELLEGRINO CAPITAL GROUP LLC, a Florida limited liability company

By: ________

Name: Dominic R. Pellegrino

Title: Managing Member

Date: ________

MERIDIAN SHORES HOSPITALITY LLC, a Delaware limited liability company

By: ________

Name: Nathaniel Cordero

Title: Managing Member

Date: ________

INDIVIDUAL SIGNATORIES:

________________________________________

Dominic R. Pellegrino, Individually

Date: ________

________________________________________

Nathaniel Cordero, Individually

Date: ________

________________________________________

Elena Cordero, Individually

Date: ________

ACKNOWLEDGED AND APPROVED AS TO FORM:

CALDERWOOD & HARKNESS LLP

By: ________

Name: Francesca Morano

Title: Partner

Counsel for Pellegrino Capital Group LLC

Date: ________

HARGROVE, DUNLAP & CASTILLO LLP

By: ________

Name: Victoria Castillo

Title: Partner

Counsel for Meridian Shores Hospitality LLC

Date: ________

EXHIBIT A

FORM OF JOINT STIPULATION OF DISMISSAL WITH PREJUDICE

JAMS ARBITRATION

JAMS Ref. No. 1440032871

Before Hon. Margaret Liu Chen (Ret.)

MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement (this "Agreement") is entered into as of May 20, 2024 (the "Effective Date"), by and among:
PELLEGRINO CAPITAL GROUP LLC, a Florida limited liability company ("PCG"), with its principal office at 1900 Bayshore Boulevard, Suite 1400, Tampa, FL 33606;
MERIDIAN SHORES HOSPITALITY LLC, a Delaware limited liability company ("MSH"), with its principal office at 220 Royal Palm Way, Suite 300, Palm Beach, FL 33480;
DOMINIC R. PELLEGRINO, an individual residing in the State of Florida, in his capacity as Managing Member of PCG ("D. Pellegrino");
NATHANIEL CORDERO, an individual residing in the State of Florida, in his capacity as Managing Member of MSH ("N. Cordero"); and
ELENA CORDERO, an individual residing in the State of Florida, in her capacity as a Member of MSH ("E. Cordero").
PCG, MSH, D. Pellegrino, N. Cordero, and E. Cordero are each referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. Palmetto Grand Ventures LLC ("PGV"), a Florida limited liability company (Florida Department of State Filing No. L17000124583; EIN: 82-5063921), was formed on June 15, 2017, pursuant to an Operating Agreement of Palmetto Grand Ventures LLC dated June 15, 2017 (the "Operating Agreement" or "OA"), by and between PCG and MSH, for the purposes and on the terms and conditions set forth therein;
B. Under the Operating Agreement, PCG holds a sixty-five percent (65%) membership interest in PGV and serves as the sole Manager of PGV, with exclusive authority over the day-to-day management, operations, and affairs of PGV, and MSH holds a thirty-five percent (35%) membership interest in PGV;
C. PGV was formed for the purpose of acquiring, renovating, and operating The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort located at 650 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property"), which PGV acquired on August 1, 2017, for a purchase price of Eighty-Seven Million Five Hundred Thousand Dollars ($87,500,000), funded in part by a loan from Gulf Atlantic National Bank ("GANB") 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");
D. The Property has been and continues to be operated under a franchise agreement with Aurelian Hotels & Resorts Inc. dated July 15, 2017 (the "Franchise Agreement"), which governs the brand standards, reservation systems, and operational requirements applicable to the Property;
E. On January 9, 2023, PCG delivered written notice to MSH exercising its call option under Section 12.4 of the Operating Agreement to purchase MSH's entire thirty-five percent (35%) membership interest in PGV at Fair Market Value, as that term is defined in Section 12.4(a) of the Operating Agreement;
F. In connection with its exercise of the call option, PCG retained Whitfield Realty Advisors LLC ("Whitfield") to prepare an independent appraisal of PGV's real property and operating assets, and Whitfield delivered an appraisal report dated February 15, 2023, concluding that the Fair Market Value of one hundred percent (100%) of PGV's real property and operating assets was One Hundred Eighteen Million Dollars ($118,000,000) as of December 31, 2022;
G. Based on the Whitfield appraisal and the applicable provisions of the Operating Agreement, PCG calculated the buyout price for MSH's thirty-five percent (35%) membership interest as Forty-One Million Three Hundred Thousand Dollars ($41,300,000), comprising Twenty-Four Million Two Hundred Ninety Thousand Dollars ($24,290,000) attributable to MSH's thirty-five percent (35%) equity share and Seventeen Million Ten Thousand Dollars ($17,010,000) in accrued preferred return, and tendered that amount to MSH on March 1, 2023;
H. MSH rejected PCG's tender on March 10, 2023, and independently retained Beacon Valuation Group Inc. ("Beacon") to prepare a competing appraisal of PGV's assets, and Beacon delivered an appraisal report dated March 5, 2023, concluding that the Fair Market Value of one hundred percent (100%) of PGV's assets was One Hundred Fifty-One Million Five Hundred Thousand Dollars ($151,500,000) as of December 31, 2022, and MSH asserted a buyout price demand of Seventy Million Dollars ($70,000,000), inclusive of a claimed bad-faith penalty under Section 12.7 of the Operating Agreement;
I. On March 20, 2023, MSH filed a Demand for Arbitration with JAMS (JAMS Ref. No. 1440032871), asserting claims against PCG for (i) bad-faith valuation under Section 12.7 of the Operating Agreement, (ii) breach of fiduciary duty by PCG in its capacity as Manager of PGV, and (iii) breach of Section 8.3 of the Operating Agreement regarding capital expenditure and deferred-maintenance obligations, including an alleged Eight Million Two Hundred Thousand Dollars ($8,200,000) in deferred maintenance (the "Arbitration");
J. On April 5, 2023, PCG filed its Response and Counterclaim in the Arbitration, denying all of MSH's claims and seeking declaratory relief that the Forty-One Million Three Hundred Thousand Dollar ($41,300,000) buyout price constituted the proper Fair Market Value under Section 12.4 of the Operating Agreement and that PCG had complied with all of its obligations thereunder;
K. Hon. Margaret Liu Chen (Ret.) was appointed as the sole arbitrator in the Arbitration on April 28, 2023, and a preliminary conference was held on May 15, 2023, at which the arbitrator established a procedural schedule for the conduct of the proceedings;
L. Pursuant to Section 12.4(c) of the Operating Agreement, which provides for the retention of a neutral third appraiser in the event the Parties' respective appraisals diverge by more than fifteen percent (15%), the Parties jointly retained Linden Park Advisory LLC ("Linden Park") as such neutral third appraiser, and Linden Park delivered a preliminary indication of value in the range of One Hundred Thirty Million Dollars ($130,000,000) to One Hundred Thirty-Eight Million Dollars ($138,000,000) for one hundred percent (100%) of PGV's assets as of December 31, 2022;
M. The Parties engaged in extensive discovery in the Arbitration, including the production and exchange of documents, the taking of depositions of Gerald K. Whitfield (of Whitfield Realty Advisors LLC), Dr. Priya Ramanathan (of Beacon Valuation Group Inc.), Dominic R. Pellegrino, and Nathaniel Cordero, and briefing on a motion to compel production of certain financial records and internal communications, which motion was partially granted by the arbitrator on November 30, 2023;
N. On January 15, 2024, the Parties agreed to submit their dispute to mediation, and the Parties participated in two mediation sessions with Raymond Alcazar of Alcazar Dispute Resolution LLC, the first held on February 12, 2024, and the second held on March 25, 2024, at which the Parties reached a framework for settlement of all outstanding claims and disputes;
O. On April 8, 2024, the Parties executed a binding Term Sheet (the "Term Sheet") setting forth the principal terms of the settlement, including the agreed-upon redemption price, the structure of the redemption transaction, and the mutual release of all claims;
P. Contemporaneously with the execution of this Agreement, the Parties are executing a Redemption Agreement dated May 20, 2024 (the "Redemption Agreement"), providing for PCG's purchase of MSH's entire thirty-five percent (35%) membership interest in PGV for a redemption price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) (the "Redemption Price"), on the terms and subject to the conditions set forth therein; and
Q. The Parties desire to fully and finally settle, compromise, and resolve any and all claims, disputes, controversies, and causes of action between and among them arising out of or relating to the Operating Agreement, the call-option exercise, the Arbitration, and PGV, on the terms and conditions set forth herein, and to provide for the mutual release of all such claims so that the Parties may conclude their business relationship with finality and certainty.
NOW, THEREFORE, in consideration of the mutual covenants, releases, and agreements contained herein, the payment of the Redemption Price pursuant to the Redemption Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the Parties, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Definitions. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.
(a) "Arbitration" means the arbitration proceeding captioned Meridian Shores Hospitality LLC v. Pellegrino Capital Group LLC, JAMS Ref. No. 1440032871, pending before Hon. Margaret Liu Chen (Ret.) in Jacksonville, Florida.
(b) "Claims" means any and all claims, demands, actions, causes of action, suits, damages, losses, liabilities, costs, expenses (including attorneys' fees and disbursements), obligations, judgments, liens, penalties, fines, debts, accounts, offsets, rights, promises, agreements, and controversies, of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising under statute, contract, tort, or any other legal or equitable theory, whether arising under federal, state, or local law.
(c) "Effective Date" means May 20, 2024.
(d) "GANB" means Gulf Atlantic National Bank.
(e) "GANB Loan" means the loan from GANB to PGV in the original principal amount of $61,250,000, evidenced by Loan No. CRE-2017-06284.
(f) "MSH Released Parties" means MSH, Nathaniel Cordero, Elena Cordero, and each of their respective members, managers, officers, directors, employees, agents, representatives, heirs, executors, administrators, successors, and assigns.
(g) "Operating Agreement" means the Operating Agreement of Palmetto Grand Ventures LLC dated June 15, 2017, by and between PCG and MSH, as the same may have been amended, modified, or supplemented from time to time.
(h) "PCG Released Parties" means PCG, PGV, Dominic R. Pellegrino, Adriana Pellegrino-Voss, Marcus Thiel, and each of their respective members, managers, officers, directors, employees, agents, representatives, heirs, executors, administrators, successors, and assigns.
(i) "PGV" means Palmetto Grand Ventures LLC, a Florida limited liability company (Florida Department of State Filing No. L17000124583; EIN: 82-5063921).
(j) "Property" means The Palmetto Grand Resort & Spa, a 312-room luxury beachfront hotel and resort located at 650 Mandalay Avenue, Clearwater Beach, FL 33767, together with all improvements, fixtures, furniture, equipment, and personal property located thereon or used in connection therewith.
(k) "Redemption Agreement" means that certain Redemption Agreement dated as of May 20, 2024, by and between PCG and MSH, providing for the purchase by PCG of MSH's thirty-five percent (35%) membership interest in PGV.
(l) "Redemption Price" means Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), payable in accordance with the terms of the Redemption Agreement.
(m) "Released Claims" has the meaning set forth in Section 2.1 of this Agreement.
(n) "Term Sheet" means the binding term sheet executed by the Parties on April 8, 2024, setting forth the principal terms of the settlement contemplated by this Agreement and the Redemption Agreement.
Section 1.2 — Interpretation. Unless the context otherwise requires, the following rules of construction shall apply to this Agreement:
(a) References to "Sections," "Articles," and "Exhibits" are to sections, articles, and exhibits of this Agreement unless otherwise indicated.
(b) The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(c) The word "including" (and correlative words such as "include" and "includes") means "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(d) Words in the singular shall include the plural and vice versa, and words in one gender shall include all genders, as the context may require.
(e) References to "dollars" or "$" are to United States dollars.
(f) References to any statute, rule, or regulation shall include any amendment, modification, or successor thereto.
(g) The word "or" is not exclusive.
(h) The words "herein," "hereof," "hereby," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.
(i) The term "person" includes any individual, corporation, limited liability company, partnership, trust, association, governmental authority, or other entity.
ARTICLE II — RELEASES
Section 2.1 — Release by MSH, N. Cordero, and E. Cordero. MSH, Nathaniel Cordero, and Elena Cordero (collectively, the "MSH Releasors"), on behalf of themselves and their respective heirs, executors, administrators, legal representatives, successors, assigns, agents, and representatives, hereby irrevocably and unconditionally release, acquit, and forever discharge the PCG Released Parties from any and all Claims that the MSH Releasors, or any of them, ever had, now have, or hereafter may have, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising out of, relating to, or in connection with any of the following:
(a) The Operating Agreement, including any amendments, modifications, or supplements thereto, and any rights, obligations, or entitlements arising thereunder;
(b) The formation, governance, management, administration, and operations of PGV, including any decisions made or actions taken by PCG in its capacity as sole Manager of PGV;
(c) The acquisition, renovation, improvement, operation, management, and maintenance of the Property, including the initial acquisition on August 1, 2017, all capital improvements and renovations undertaken thereafter, and all decisions relating to the day-to-day operations and management of the Property;
(d) PCG's exercise of the call option under Section 12.4 of the Operating Agreement, including the January 9, 2023 call-option notice, the procedures followed in connection therewith, and the determination of Fair Market Value;
(e) The Whitfield appraisal and any other valuation, appraisal, or assessment of PGV's assets, including the methodology, assumptions, conclusions, and use thereof;
(f) The alleged bad-faith valuation under Section 12.7 of the Operating Agreement, including all allegations that PCG intentionally or recklessly undervalued PGV's assets in connection with the call-option exercise;
(g) The alleged breach of fiduciary duty by PCG in its capacity as Manager of PGV, including all allegations of self-dealing, conflicts of interest, failure to disclose material information, and breach of the duty of loyalty and the duty of care;
(h) The alleged breach of Section 8.3 of the Operating Agreement regarding capital expenditure and deferred-maintenance obligations, including the Eight Million Two Hundred Thousand Dollar ($8,200,000) deferred-maintenance claim and all related allegations of mismanagement, deferred repairs, and failure to maintain the Property in accordance with brand standards;
(i) The Arbitration, including all claims, counterclaims, motions, discovery disputes, orders, and proceedings in JAMS Ref. No. 1440032871 before Hon. Margaret Liu Chen (Ret.);
(j) Any distributions, preferred returns, profit allocations, capital contributions, capital account adjustments, or other economic entitlements under the Operating Agreement, whether arising before, on, or after the Effective Date;
(k) The Redemption Agreement and the transactions contemplated thereby, including the payment of the Redemption Price and the transfer of MSH's membership interest in PGV; and
(l) Any other matter, act, omission, event, transaction, agreement, communication, or circumstance of any kind or nature whatsoever, arising from or relating to the relationship among the Parties in connection with PGV, the Property, or the Operating Agreement, from the inception of that relationship through and including the Effective Date.
The Claims released pursuant to this Section 2.1 are collectively referred to herein as the "Released Claims."
Section 2.2 — Release by PCG, PGV, and D. Pellegrino. PCG, PGV (acting through PCG as its sole Manager), and Dominic R. Pellegrino (collectively, the "PCG Releasors"), on behalf of themselves and their respective heirs, executors, administrators, legal representatives, successors, assigns, agents, and representatives, hereby irrevocably and unconditionally release, acquit, and forever discharge the MSH Released Parties from any and all Claims that the PCG Releasors, or any of them, ever had, now have, or hereafter may have, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, liquidated or unliquidated, at law or in equity, arising out of, relating to, or in connection with any of the matters described in clauses (a) through (l) of Section 2.1 above, mutatis mutandis, including without limitation:
(a) PCG's counterclaim for declaratory relief filed in the Arbitration on April 5, 2023, seeking a declaration that the Forty-One Million Three Hundred Thousand Dollar ($41,300,000) buyout price constituted the proper Fair Market Value under Section 12.4 of the Operating Agreement;
(b) Any claims relating to MSH's retention of Beacon Valuation Group Inc. and the Beacon appraisal, including any allegations that MSH acted in bad faith in connection with the valuation dispute;
(c) Any claims relating to MSH's filing of the Demand for Arbitration and the prosecution of the Arbitration, including any claims for frivolous or bad-faith litigation conduct; and
(d) Any other claims, whether arising under the Operating Agreement, at common law, in equity, or under any applicable statute, that the PCG Releasors may have against the MSH Released Parties arising out of or relating to the matters described in Section 2.1(a) through (l) above.
Section 2.3 — Scope of Releases. The releases set forth in Sections 2.1 and 2.2 of this Agreement are intended to be as broad and comprehensive as permitted by applicable law and shall be construed to effectuate a complete and final resolution of all disputes between and among the Parties. Without limiting the generality of the foregoing:
(a) The releases encompass all Claims whether arising under contract, tort, statute (including Chapter 605, Florida Statutes, the Florida Revised Limited Liability Company Act, and any predecessor or successor statute), equity, or any other legal or equitable theory, and whether arising under federal, state, or local law;
(b) The releases encompass all Claims arising out of or relating to any act or omission occurring from the inception of the Parties' relationship with respect to PGV through and including the Effective Date, regardless of when such Claims may first become known, mature, or accrue; and
(c) Each Party acknowledges and agrees that it may discover facts different from, or in addition to, those that it now knows or believes to be true with respect to the Released Claims, and each Party expressly agrees that this Agreement and the releases contained herein shall remain in full force and effect in all respects notwithstanding any such discovery of different or additional facts.
Section 2.4 — Waiver of Unknown Claims. Each Party expressly waives and relinquishes, to the fullest extent permitted by applicable law, any and all rights and benefits that it may have under any statute, rule, regulation, or common-law principle of any jurisdiction that would otherwise limit the scope of a release to those Claims that are known or suspected to exist at the time of execution of such release. Each Party understands and acknowledges the significance of this waiver and has been advised by its legal counsel concerning its effect. Each Party confirms that this waiver of unknown claims is a knowing and voluntary waiver, made after full consultation with legal counsel, and that such waiver is an essential and material term of this Agreement, without which the other Parties would not have entered into this Agreement.
Section 2.5 — Exceptions to Release. Notwithstanding any provision of this Article II to the contrary, the releases set forth in Sections 2.1 and 2.2 shall not extend to or release:
(a) Any obligations arising under this Agreement, including the covenants, representations, warranties, and indemnification obligations set forth herein;
(b) Any obligations arising under the Redemption Agreement, including the obligation to pay the Redemption Price and all other obligations of the respective parties thereto;
(c) Any obligations arising under the Assignment of Membership Interest executed by MSH in connection with the closing of the Redemption;
(d) Any claims arising from actual fraud committed by a Party in connection with the negotiation, execution, or performance of this Agreement or the Redemption Agreement; and
(e) The indemnification obligations set forth in Article IV of this Agreement.
ARTICLE III — DISMISSAL OF ARBITRATION; COVENANT NOT TO SUE
Section 3.1 — Dismissal of Arbitration. Within ten (10) business days following the closing of the Redemption under the Redemption Agreement (the "Closing"), the Parties shall jointly file with JAMS in Jacksonville, Florida, a Stipulation of Dismissal with Prejudice of the Arbitration, JAMS Ref. No. 1440032871, substantially in the form attached hereto as Exhibit A (the "Stipulation of Dismissal"), dismissing with prejudice all claims, counterclaims, motions, and proceedings pending in the Arbitration. The Stipulation of Dismissal shall provide that each Party shall bear its own costs, fees, and expenses in connection with the Arbitration.
Counsel of record for the respective Parties shall execute and file the Stipulation of Dismissal as follows: Francesca Morano, Partner, Calderwood & Harkness LLP, as counsel for PCG, and Victoria Castillo, Partner, Hargrove, Dunlap & Castillo LLP, as counsel for MSH. Each Party shall cause its respective counsel to cooperate in the timely preparation, execution, and filing of the Stipulation of Dismissal and shall take all actions reasonably necessary to effectuate the dismissal of the Arbitration with prejudice.
For the avoidance of doubt, the Stipulation of Dismissal was filed with JAMS on August 9, 2024, and the Arbitration has been dismissed with prejudice in its entirety.
Section 3.2 — Covenant Not to Sue. Each Party hereby irrevocably covenants and agrees that it will not, directly or indirectly, commence, maintain, prosecute, participate in, contribute to, or assist any action, suit, arbitration, mediation, administrative proceeding, or other proceeding of any kind against any Released Party, or cause or encourage any other person or entity to commence, maintain, prosecute, participate in, contribute to, or assist any such proceeding, based upon, arising out of, or relating to any of the Released Claims. This covenant not to sue is an independent obligation of each Party and is in addition to, and not in substitution for, the releases set forth in Article II.
In the event that any Party violates this Section 3.2 by commencing, maintaining, or prosecuting any proceeding in contravention of this covenant not to sue, the breaching Party shall be liable for and shall reimburse the non-breaching Party for all costs, expenses, and reasonable attorneys' fees incurred by the non-breaching Party in defending against such action or proceeding, including any costs incurred in enforcing this Section 3.2. Such obligation to reimburse shall be in addition to any other remedies available to the non-breaching Party at law or in equity.
Section 3.3 — No Assignment of Claims. Each Party represents and warrants to each other Party that, as of the Effective Date, such Party has not heretofore assigned, transferred, conveyed, pledged, hypothecated, or otherwise encumbered any of the Released Claims to any person or entity, and that such Party is the sole and exclusive owner of all Released Claims that such Party is releasing pursuant to this Agreement. Each Party further covenants that it shall not, at any time after the Effective Date, assign, transfer, convey, or otherwise encumber any of the Released Claims or any rights arising in connection therewith.
ARTICLE IV — INDEMNIFICATION
Section 4.1 — Indemnification by MSH Releasors. MSH, N. Cordero, and E. Cordero shall, jointly and severally, indemnify, defend, and hold harmless the PCG Released Parties from and against any and all Claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees, court costs, and expenses of investigation and litigation) arising out of or resulting from:
(a) Any breach by any of the MSH Releasors of any representation, warranty, covenant, or agreement made by any of the MSH Releasors in this Agreement; or
(b) Any claim, demand, action, or proceeding brought by any third party against any PCG Released Party that relates to or arises from any of the Released Claims and that is based upon, or results from, an alleged assignment, transfer, conveyance, or encumbrance of any Released Claim by any MSH Releasor in violation of Section 3.3 of this Agreement.
Section 4.2 — Indemnification by PCG Releasors. PCG, PGV, and D. Pellegrino shall, jointly and severally, indemnify, defend, and hold harmless the MSH Released Parties from and against any and all Claims, losses, damages, liabilities, judgments, settlements, costs, and expenses (including reasonable attorneys' fees, court costs, and expenses of investigation and litigation) arising out of or resulting from:
(a) Any breach by any of the PCG Releasors of any representation, warranty, covenant, or agreement made by any of the PCG Releasors in this Agreement; or
(b) Any claim, demand, action, or proceeding brought by any third party against any MSH Released Party that relates to or arises from any of the Released Claims and that is based upon, or results from, an alleged assignment, transfer, conveyance, or encumbrance of any Released Claim by any PCG Releasor in violation of Section 3.3 of this Agreement.
Section 4.3 — Indemnification Procedures. Any Party seeking indemnification under this Article IV (an "Indemnified Party") shall promptly notify the indemnifying Party (the "Indemnifying Party") in writing of any claim, demand, or proceeding for which indemnification is sought, provided that the failure to give such notice shall not relieve the Indemnifying Party of its indemnification obligations except to the extent the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall have the right, at its sole cost and expense, to assume the defense of any such claim, demand, or proceeding with counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall cooperate fully with the Indemnifying Party in the defense of any such claim. The Indemnifying Party shall not settle any claim without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, conditioned, or delayed, unless such settlement includes a complete and unconditional release of the Indemnified Party from all liability in respect of such claim and does not impose any obligation (other than confidentiality obligations) upon the Indemnified Party.
ARTICLE V — ATTORNEYS' FEES AND COSTS
Section 5.1 — Each Party Bears Its Own Fees and Costs. Except as otherwise expressly provided in this Agreement, each Party shall bear and pay its own attorneys' fees, costs, expenses, and disbursements incurred in connection with the Arbitration, the mediation sessions conducted by Raymond Alcazar of Alcazar Dispute Resolution LLC on February 12, 2024 and March 25, 2024, the negotiation, preparation, and execution of this Agreement and the Redemption Agreement, and all related matters. Without limitation, this includes:
(a) Fees and costs of legal counsel, including fees and costs of Calderwood & Harkness LLP (counsel for PCG) and Hargrove, Dunlap & Castillo LLP (counsel for MSH);
(b) Fees and costs of experts, appraisers, and consultants, including fees and costs of Whitfield Realty Advisors LLC (retained by PCG), Beacon Valuation Group Inc. (retained by MSH), and each Party's respective share of the fees and costs of Linden Park Advisory LLC (jointly retained as the neutral third appraiser);
(c) JAMS arbitration fees, administrative fees, and arbitrator compensation;
(d) Mediator fees and costs of Alcazar Dispute Resolution LLC; and
(e) All other costs, expenses, and disbursements of any kind or nature incurred by any Party in connection with the disputes between and among the Parties.
Neither Party shall seek reimbursement, contribution, or recovery from any other Party for any such fees, costs, expenses, or disbursements, and each Party hereby irrevocably waives any right to recover the same from any other Party.
Section 5.2 — Prevailing Party in Enforcement. Notwithstanding the provisions of Section 5.1, in the event of any action, suit, arbitration, or other proceeding brought by any Party to enforce any provision of this Agreement or to obtain damages for the breach hereof, the prevailing Party in such action or proceeding shall be entitled to recover from the non-prevailing Party its reasonable attorneys' fees, costs, and expenses incurred in connection with such enforcement action or proceeding, in addition to any other relief to which such prevailing Party may be entitled.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.1 — Mutual Representations and Warranties. Each Party hereby represents and warrants to each other Party, as of the Effective Date, as follows:
(a) Authority. Such Party has the full right, power, legal capacity, and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. In the case of PCG, the execution and delivery of this Agreement and the performance of PCG's obligations hereunder have been duly authorized by Dominic R. Pellegrino in his capacity as Managing Member of PCG, and no other authorization, consent, or approval is required. In the case of MSH, the execution and delivery of this Agreement and the performance of MSH's obligations hereunder have been duly authorized by Nathaniel Cordero in his capacity as Managing Member of MSH and by Elena Cordero in her capacity as a Member of MSH holding forty percent (40%) of MSH's membership interests, and no other authorization, consent, or approval is required.
(b) Binding Obligation. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(c) No Conflicts. The execution, delivery, and performance of this Agreement by such Party does not and will not (i) violate, conflict with, or result in a breach of any provision of the organizational documents of such Party (if applicable), (ii) violate, conflict with, or result in a breach of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or law to which such Party is a party or by which such Party or its assets are bound, or (iii) require any consent, approval, authorization, or filing that has not been obtained or made.
(d) No Assignment. Such Party has not assigned, transferred, conveyed, pledged, hypothecated, or otherwise encumbered any of the Released Claims or any interest therein to any person or entity, and such Party is the sole and exclusive owner of all Released Claims being released by such Party pursuant to this Agreement.
(e) Legal Representation. Such Party has been represented throughout the negotiation, drafting, and execution of this Agreement by independent legal counsel of its own choosing. Specifically, PCG and D. Pellegrino have been represented by Francesca Morano of Calderwood & Harkness LLP, 801 Brickell Avenue, Suite 2800, Miami, FL 33131, and MSH, N. Cordero, and E. Cordero have been represented by Victoria Castillo of Hargrove, Dunlap & Castillo LLP, 1395 Brickell Avenue, Suite 3100, Miami, FL 33131. Each Party has had a full and fair opportunity to review and understand the terms and conditions of this Agreement and has consulted with its legal counsel regarding the legal effect and consequences of this Agreement.
(f) Voluntary Execution. Such Party is executing this Agreement voluntarily and of its own free will, without coercion, duress, or undue influence by any person or entity. Each Party has carefully read this Agreement, understands its contents, and agrees to be bound by its terms.
(g) No Reliance. Such Party is not relying on any representation, statement, promise, inducement, or agreement of any kind made by any Released Party or any other person or entity, other than as expressly set forth in this Agreement, in entering into this Agreement. Each Party acknowledges that it has conducted its own independent investigation and analysis of the matters giving rise to this Agreement and is relying solely upon its own judgment and the advice of its counsel.
(h) No Pending Claims. Except for the Arbitration (which is being dismissed pursuant to Section 3.1), such Party has no pending action, suit, arbitration, or other proceeding against any Released Party arising out of or relating to the Released Claims, and such Party is not aware of any threatened action, suit, arbitration, or other proceeding by any third party relating to the Released Claims.
Section 6.2 — Specific Representations by Individual Parties. In addition to the foregoing mutual representations and warranties:
(a) D. Pellegrino represents and warrants that he executes this Agreement both in his individual capacity and in his capacity as Managing Member of PCG, and that he has full authority to execute this Agreement on behalf of PCG and to bind PCG and PGV to the terms and conditions hereof. D. Pellegrino further represents that no other consent, approval, or authorization of any member, manager, officer, or other person is required in connection with the execution and delivery of this Agreement by PCG or PGV.
(b) N. Cordero represents and warrants that he executes this Agreement both in his individual capacity and in his capacity as Managing Member of MSH, and that he has full authority to execute this Agreement on behalf of MSH and to bind MSH to the terms and conditions hereof. N. Cordero further represents that, together with the consent and authorization of E. Cordero, all necessary approvals for the execution and delivery of this Agreement by MSH have been obtained.
(c) E. Cordero represents and warrants that she executes this Agreement in her individual capacity and in her capacity as a Member of MSH holding forty percent (40%) of MSH's membership interests, and that she has the full right and authority to execute this Agreement in such capacities. E. Cordero further represents that she has authorized the execution and delivery of this Agreement by MSH and the performance by MSH of its obligations hereunder.
ARTICLE VII — CONFIDENTIALITY
Section 7.1 — Confidentiality of Terms. The terms and conditions of this Agreement, the Redemption Agreement, the Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000), and all negotiations, discussions, and correspondence leading to the execution of this Agreement and the Redemption Agreement (collectively, the "Confidential Information") shall be maintained in strict confidence by each of the Parties and shall not be disclosed, published, or disseminated to any person or entity, except:
(a) As required by applicable law, regulation, or court or arbitral order, provided that the disclosing Party shall, to the extent reasonably practicable, provide prompt written notice to the other Parties prior to any such required disclosure and shall cooperate with the other Parties in seeking a protective order or other appropriate relief to limit the scope of such disclosure;
(b) As necessary to effectuate the transactions contemplated by this Agreement and the Redemption Agreement, including disclosure to Gulf Atlantic National Bank in connection with the lender consent and any incremental draw on the GANB Loan, to Grantham, Pryce & Associates CPAs in connection with the preparation of tax returns and related filings, and to Atlantic Omnivrel Insurance Company in connection with any insurance claim relating to the Property;
(c) To such Party's legal counsel, accountants, tax advisors, financial advisors, and lenders on a need-to-know basis, provided that such persons agree to maintain the confidentiality of the Confidential Information on terms no less restrictive than those set forth in this Section 7.1; and
(d) With the prior written consent of all other Parties.
Each Party shall be responsible for any breach of this Section 7.1 by its representatives, advisors, or agents, and shall take all reasonable measures to ensure compliance with the confidentiality obligations set forth herein.
Section 7.2 — Non-Disparagement. Each Party hereby agrees that it shall not, and shall cause its officers, directors, managers, members, employees, agents, and representatives not to, make or publish any disparaging, derogatory, defamatory, or otherwise negative statements, whether oral, written, or electronic, concerning any Released Party in connection with the matters that are the subject of this Agreement, including the Operating Agreement, the formation and operations of PGV, the valuation dispute, the Arbitration, the mediation, and the settlement reflected in this Agreement and the Redemption Agreement. This non-disparagement obligation shall survive the execution and delivery of this Agreement and shall remain in full force and effect in perpetuity.
Section 7.3 — Permitted Statements. Notwithstanding the confidentiality and non-disparagement obligations set forth in Sections 7.1 and 7.2, if asked about the dispute, any Party may state publicly or privately that the matter has been resolved amicably and to the mutual satisfaction of the Parties, without disclosing the financial terms of the settlement, the Redemption Price, or any other Confidential Information. Any such statement shall be limited to the foregoing and shall not include any characterization of the merits of any Party's claims or defenses in the Arbitration or any other proceeding.
ARTICLE VIII — TAX MATTERS
Section 8.1 — Tax Treatment. The Parties agree that the Redemption Price of Fifty-Two Million Eight Hundred Fifty Thousand Dollars ($52,850,000) shall be treated for federal and state income tax purposes as consideration paid for the redemption of MSH's thirty-five percent (35%) membership interest in PGV, in accordance with the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 731, 736, 741, and 751 thereof, and the Treasury Regulations promulgated thereunder, as well as any applicable state or local tax laws. The Parties shall report the transactions contemplated by this Agreement and the Redemption Agreement on their respective federal, state, and local tax returns in a manner consistent with this Section 8.1, and no Party shall take any position on any tax return, amended return, or claim for refund that is inconsistent with such treatment unless required by a final determination (within the meaning of Section 1313 of the Code) or unless the other Parties consent in writing.
Each Party shall be solely responsible for its own tax obligations, including any income taxes, capital gains taxes, transfer taxes, or other taxes, arising from or in connection with the transactions contemplated by this Agreement and the Redemption Agreement. Neither Party makes any representation or warranty to any other Party regarding the tax consequences of this Agreement, the Redemption Agreement, or any of the transactions contemplated hereby or thereby. Each Party acknowledges that it has relied solely on the advice of its own tax advisors in connection with such matters.
Section 8.2 — Cooperation on Tax Matters. The Parties agree to cooperate in good faith with one another in connection with any tax filings, audits, assessments, examinations, or inquiries by any governmental authority relating to PGV for all tax years through and including the date of the Closing, including the provision of information, the execution of documents, and the making of elections as may be reasonably requested by any Party. Such cooperation shall include, without limitation, making available relevant books, records, documents, and other information in the possession or control of such Party, and making available personnel (including officers, directors, and employees) for interviews, depositions, or testimony as may be reasonably required. The requesting Party shall reimburse the cooperating Party for any reasonable out-of-pocket costs and expenses incurred in connection with such cooperation, upon request and reasonable documentation thereof.
ARTICLE IX — MISCELLANEOUS PROVISIONS
Section 9.1 — Entire Agreement. This Agreement, together with the Redemption Agreement, the Assignment of Membership Interest executed in connection with the closing of the Redemption, and the other documents and instruments executed and delivered in connection with the Closing (collectively, the "Transaction Documents"), constitutes the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous negotiations, representations, understandings, discussions, term sheets, letters of intent, and agreements, whether oral or written, between or among the Parties with respect to such subject matter, including the Term Sheet dated April 8, 2024, which is hereby superseded in its entirety. No Party has been induced to enter into this Agreement by, nor is any Party relying on, any representation, warranty, covenant, or agreement outside those expressly set forth in the Transaction Documents.
Section 9.2 — Amendments. This Agreement may not be amended, modified, supplemented, restated, or waived except by a written instrument duly executed by each of the Parties hereto. No oral amendment, modification, or waiver of any provision of this Agreement shall be effective for any purpose.
Section 9.3 — Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without giving effect to any choice-of-law or conflicts-of-law principles that would cause the application of the laws of any jurisdiction other than the State of Florida.
Section 9.4 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, including the interpretation, breach, termination, or validity hereof, shall be resolved by final and binding arbitration administered by JAMS in Jacksonville, Florida, in accordance with the JAMS Comprehensive Arbitration Rules and Procedures then in effect, consistent with the dispute resolution provisions set forth in Section 15.2 of the Operating Agreement. The arbitration shall be conducted before a single arbitrator selected in accordance with the applicable JAMS rules. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order, including injunctive or other equitable relief and specific performance. Judgment upon any award rendered by the arbitrator may be entered in any court of competent jurisdiction. The provisions of this Section 9.4 shall survive the termination or expiration of this Agreement.
Section 9.5 — Waiver. No waiver by any Party of any breach or default of any provision of this Agreement shall be effective unless set forth in a written instrument executed by the waiving Party. No waiver of any breach or default shall constitute a waiver of any other or subsequent breach or default, whether of the same or a different provision of this Agreement. No failure or delay by any Party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 9.6 — Severability. If any provision of this Agreement, or the application thereof to any person, entity, or circumstance, is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. In the event that any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify such provision so as to effect the original intent of the Parties as closely as possible in a manner that is valid, legal, and enforceable.
Section 9.7 — Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of all other Parties, and any purported assignment or delegation without such consent shall be null and void and of no force or effect.
Section 9.8 — No Admission of Liability. This Agreement is a compromise and settlement of disputed claims. Nothing contained herein shall be deemed, construed, or interpreted as an admission of liability, fault, wrongdoing, or violation of law by any Party. Each Party specifically denies any liability or wrongdoing with respect to the matters giving rise to the Arbitration and the disputes resolved by this Agreement. The Parties have entered into this Agreement solely to avoid the uncertainty, expense, and burden of continued arbitration and litigation and to achieve a final and amicable resolution of their disputes.
Section 9.9 — Counterparts and Electronic Execution. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by portable document format (PDF), electronic signature (including signatures created through DocuSign, Ashford Health IT, or similar electronic signature platforms), or facsimile transmission shall be deemed original signatures and shall be fully effective and binding for all purposes.
Section 9.10 — Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) one (1) business day after being sent by nationally recognized overnight courier service (with confirmation of delivery), or (c) when sent by email with confirmation of receipt (excluding automated "out of office" or similar responses), to the following addresses (or to such other address as a Party may designate by written notice to the other Parties in accordance with this Section 9.10):
If to PCG or D. Pellegrino:
Pellegrino Capital Group LLC 1900 Bayshore Boulevard, Suite 1400 Tampa, FL 33606
Attn: Dominic R. Pellegrino, Managing Member
With a copy (which shall not constitute notice) to:
Francesca Morano, Esq. Calderwood & Harkness LLP 801 Brickell Avenue, Suite 2800 Miami, FL 33131
If to MSH, N. Cordero, or E. Cordero:
Meridian Shores Hospitality LLC 220 Royal Palm Way, Suite 300 Palm Beach, FL 33480
Attn: Nathaniel Cordero, Managing Member
With a copy (which shall not constitute notice) to:
Victoria Castillo, Esq. Hargrove, Dunlap & Castillo LLP 1395 Brickell Avenue, Suite 3100 Miami, FL 33131
Section 9.11 — Third-Party Beneficiaries. Except for the PCG Released Parties and the MSH Released Parties, each of whom is an intended third-party beneficiary of the releases set forth in Article II of this Agreement with full rights to enforce such releases, nothing in this Agreement, express or implied, is intended to or shall confer upon any person or entity other than the Parties and their permitted successors and assigns any legal or equitable right, benefit, remedy, or claim under or by reason of this Agreement.
Section 9.12 — Construction. This Agreement was negotiated at arm's length by the Parties, each represented by independent legal counsel, and shall not be construed more strictly against any Party on the ground that such Party or its counsel drafted or prepared this Agreement or any portion hereof. Each Party has participated in the drafting and negotiation of this Agreement, and any ambiguities shall not be construed against any Party as the drafter. The Parties acknowledge and agree that they are sophisticated parties who have had the benefit of legal counsel and have bargained for and agreed to all of the terms set forth herein.
Section 9.13 — Further Assurances. Each Party shall, at any time and from time to time after the Effective Date, upon the reasonable request of any other Party, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably necessary or desirable to carry out the purposes and intent of this Agreement and to consummate and make effective the transactions contemplated hereby, including the dismissal of the Arbitration, the effectuation of the releases set forth in Article II, and the completion of the Redemption.
[Remainder of Page Intentionally Left Blank — Signature Pages Follow]
IN WITNESS WHEREOF, the Parties have executed this Mutual Release and Settlement Agreement as of the date first written above.
PELLEGRINO CAPITAL GROUP LLC, a Florida limited liability company
By: ________
Name: Dominic R. Pellegrino
Title: Managing Member
Date: ________
MERIDIAN SHORES HOSPITALITY LLC, a Delaware limited liability company
By: ________
Name: Nathaniel Cordero
Title: Managing Member
Date: ________
INDIVIDUAL SIGNATORIES:
________________________________________
Dominic R. Pellegrino, Individually
Date: ________
________________________________________
Nathaniel Cordero, Individually
Date: ________
________________________________________
Elena Cordero, Individually
Date: ________
ACKNOWLEDGED AND APPROVED AS TO FORM:
CALDERWOOD & HARKNESS LLP
By: ________
Name: Francesca Morano
Title: Partner
Counsel for Pellegrino Capital Group LLC
Date: ________
HARGROVE, DUNLAP & CASTILLO LLP
By: ________
Name: Victoria Castillo
Title: Partner
Counsel for Meridian Shores Hospitality LLC
Date: ________
EXHIBIT A
FORM OF JOINT STIPULATION OF DISMISSAL WITH PREJUDICE
JAMS ARBITRATION
JAMS Ref. No. 1440032871
Before Hon. Margaret Liu Chen (Ret.)
Jacksonville, Florida
MERIDIAN SHORES HOSPITALITY LLC,
Claimant,
v.
PELLEGRINO CAPITAL GROUP LLC,
Respondent/Counter-Claimant.
JOINT STIPULATION OF DISMISSAL WITH PREJUDICE
Claimant Meridian Shores Hospitality LLC ("MSH") and Respondent/Counter-Claimant Pellegrino Capital Group LLC ("PCG"), by and through their respective undersigned counsel of record, hereby jointly stipulate and agree as follows:
1.  All claims asserted by MSH in its Demand for Arbitration filed on March 20, 2023, including (a) the claim for bad-faith valuation under Section 12.7 of the Operating Agreement of Palmetto Grand Ventures LLC dated June 15, 2017, (b) the claim for breach of fiduciary duty by PCG in its capacity as Manager of Palmetto Grand Ventures LLC, and (c) the claim for breach of Section 8.3 of the Operating Agreement regarding capital expenditure and deferred-maintenance obligations, are hereby dismissed with prejudice.
2.  All counterclaims asserted by PCG in its Response and Counterclaim filed on April 5, 2023, including PCG's counterclaim for declaratory relief regarding the proper buyout price under Section 12.4 of the Operating Agreement, are hereby dismissed with prejudice.
3.  All motions, discovery disputes, and other proceedings pending in this Arbitration are hereby withdrawn and terminated.
4.  Each Party shall bear its own attorneys' fees, costs, expenses, and disbursements incurred in connection with this Arbitration, the mediation sessions, and all related matters, and neither Party shall seek reimbursement, contribution, or recovery of any such fees, costs, expenses, or disbursements from the other Party.
5.  This Stipulation of Dismissal is filed pursuant to the terms of the Mutual Release and Settlement Agreement dated May 20, 2024, by and among PCG, MSH, Dominic R. Pellegrino, Nathaniel Cordero, and Elena Cordero.
6.  The Parties respectfully request that the Arbitrator enter an order confirming the dismissal of all claims, counterclaims, and proceedings in this Arbitration with prejudice and closing the case file.
Filed: August 9, 2024
COUNSEL FOR CLAIMANT MERIDIAN SHORES HOSPITALITY LLC
HARGROVE, DUNLAP & CASTILLO LLP
By: ________
Name: Victoria Castillo
Title: Partner
1395 Brickell Avenue, Suite 3100 Miami, FL 33131
COUNSEL FOR RESPONDENT/COUNTER-CLAIMANT PELLEGRINO CAPITAL GROUP LLC
CALDERWOOD & HARKNESS LLP
By: ________
Name: Francesca Morano
Title: Partner
801 Brickell Avenue, Suite 2800 Miami, FL 33131
This Joint Stipulation of Dismissal with Prejudice was filed with JAMS on August 9, 2024, and the Arbitration, JAMS Ref. No. 1440032871, has been dismissed with prejudice in its entirety by Order of the Arbitrator dated August 12, 2024.

MUTUAL RELEASE AND SETTLEMENT AGREEMENT

RECITALS

WHEREAS:

INDIVIDUAL SIGNATORIES:

ACKNOWLEDGED AND APPROVED AS TO FORM:

CALDERWOOD & HARKNESS LLP

HARGROVE, DUNLAP & CASTILLO LLP

EXHIBIT A

FORM OF JOINT STIPULATION OF DISMISSAL WITH PREJUDICE

JAMS ARBITRATION

Record

Parties

Dates

Amounts