1027-00004 · Pellegrino Capital Group · Diligence/Title

title-objection-letter.docx DOCUMENT Real Estate

5 / 12 ← → ✕

Contract analysis Extract to table

PRIVILEGED AND CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

1450 Brickell Avenue, Suite 3100 Miami, Florida 33131

Telephone: (305) 884-7200 Facsimile: (305) 884-7201 www.calderwoodharkness.com

Matter No. 40225.00001

August 7, 2025

VIA ELECTRONIC MAIL AND FEDERAL EXPRESS

Patricia "Trish" Blaine, Esq. Hargrove, Kessler & Blaine LLP 515 North Flagler Drive, Suite 800 West Palm Beach, Florida 33401

Re: Title Objections — Purchase and Sale Agreement dated July 7, 2025, between Saltaire Hospitality Holdings LLC ("Seller") and PCG Delray Hotel LLC ("Buyer")

Property: 455 South Ocean Boulevard, Delray Beach, Florida 33483 Palm Beach County Parcel ID: 12-43-46-27-01-005-0010 Commonly known as: "The Marisol — A Saltaire Hotel"

Dear Ms. Blaine:

1. Introduction and Purpose

This firm represents PCG Delray Hotel LLC, a Florida limited liability company and wholly owned subsidiary of Pellegrino Capital Group LLC ("Buyer"), in connection with Buyer's acquisition of the above-referenced property (the "Property") pursuant to that certain Purchase and Sale Agreement dated July 7, 2025 (the "PSA"), by and between Saltaire Hospitality Holdings LLC, a Delaware limited liability company registered to do business in the State of Florida ("Seller"), as seller, and PCG Delray Hotel LLC, as buyer. The PSA provides for the purchase of the Property at a purchase price of Thirty-Five Million and No/100 Dollars ($35,000,000.00), with a scheduled closing date of September 15, 2025.

The purpose of this letter is to provide Buyer's formal written notice of title objections pursuant to Section 6.2 of the PSA, within the thirty (30)-day title objection period that commenced on the date of execution of the PSA, July 7, 2025, and expires on August 7, 2025. This letter constitutes Buyer's timely objection to certain matters reflected in the title commitment and the ALTA/NSPS Land Title Survey described below.

As provided in Section 6.3 of the PSA, upon receipt of this letter, Seller shall have a fifteen (15)-day cure period (the "Cure Period") in which to cure, remove, or otherwise resolve the objectionable exceptions identified herein to Buyer's reasonable satisfaction. Based on the date of this letter, the Cure Period is anticipated to expire on or about August 22, 2025. Buyer respectfully requests that Seller confirm in writing, prior to the expiration of the Cure Period, which objections Seller is able and willing to cure and the manner in which Seller proposes to effect such cure.

2. Documents Reviewed

In connection with the preparation of this letter, we have reviewed the following documents, copies of which have been made available to Seller's counsel:

Title Commitment. Commitment for Title Insurance issued by Palmetto Title & Escrow Company (title officer: Denise Lafleur), located at 200 Clematis Street, Suite 400, West Palm Beach, Florida 33401, Commitment No. PTE-2025-07892, with an effective date of July 14, 2025, at 8:00 a.m. (the "Title Commitment"). The proposed title insurance underwriter is Commonwealth Southern Title Insurance Company. The Title Commitment contemplates the issuance of (a) an ALTA Owner's Policy of Title Insurance (Form 2021) in the amount of $35,000,000.00, which is equal to the purchase price set forth in the PSA, in favor of Buyer, and (b) an ALTA Loan Policy of Title Insurance (Form 2021) in the amount of $24,500,000.00, to be issued simultaneously with the Owner's Policy for the benefit of Meridian Coast Bank, N.A., as lender, in connection with its first-mortgage acquisition loan to Buyer.

ALTA/NSPS Land Title Survey. ALTA/NSPS Land Title Survey dated July 18, 2025, prepared by Crestline Surveying & Mapping, Inc., under the direction and supervision of George Tavares, PSM (Florida Professional Surveyor and Mapper License No. 6847), for the Property located at 455 South Ocean Boulevard, Delray Beach, Florida 33483 (the "Survey"). The Survey depicts the Property as consisting of approximately 1.87 acres (approximately 81,457 square feet) and reflects the following improvements: a 42-key, four-story boutique hotel containing approximately 38,600 gross square feet of floor area; a rooftop restaurant and bar commonly known as "Terrazza"; a spa facility of approximately 3,200 square feet; and a 60-space surface parking lot. The Survey reflects a flood zone designation of Zone AE (Special Flood Hazard Area), as depicted on the Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM) Panel No. 12099C0826J, with an effective date of December 4, 2020. The Survey further reflects the coastal construction control line setback applicable to the parcel, as established by the Florida Department of Environmental Protection.

We have also reviewed the recorded instruments referenced in the Schedule B exceptions of the Title Commitment, to the extent such instruments were available through the Official Records of Palm Beach County, Florida.

3. Objectionable Title Exceptions

Based upon our review of the Title Commitment and the Survey, Buyer hereby objects to the following matters, each of which constitutes an objectionable title exception that must be cured, removed, or otherwise resolved by Seller at or prior to the closing of the transaction contemplated by the PSA:

3.1 First-Mortgage Lien — Seaview National Lending Corp.

Description of Exception. The Title Commitment reflects as a Schedule B-II exception a Mortgage, Assignment of Rents, and Security Agreement in favor of Seaview National Lending Corp., a Delaware corporation, securing indebtedness in the original principal amount of Sixteen Million Eight Hundred Thousand and No/100 Dollars ($16,800,000.00), recorded in Official Records Book 34892, Page 2217, of the Official Records of Palm Beach County, Florida, together with any and all amendments, modifications, assignments, and renewals thereof. Based on information provided by Seller during the due-diligence period, the approximate current payoff balance of the indebtedness secured by this mortgage is Fourteen Million Three Hundred Fifty Thousand and No/100 Dollars ($14,350,000.00).

Objection. Buyer objects to this encumbrance in its entirety. Buyer requires that Seller cause this mortgage lien to be paid in full and satisfied, and that a Satisfaction of Mortgage be recorded in the Official Records of Palm Beach County, Florida, at or prior to the closing on September 15, 2025. Specifically, Buyer requires that Palmetto Title & Escrow Company receive a written payoff letter directly from Seaview National Lending Corp. (or its authorized servicer) confirming the exact payoff amount as of the anticipated closing date, the applicable per diem interest accrual, any prepayment penalties or fees, and the wire transfer instructions for remittance of the payoff amount. This payoff letter must be received by the title company in sufficient time to facilitate the disbursement of the payoff amount from Seller's closing proceeds and to enable the recording of a Satisfaction of Mortgage simultaneously with, or immediately following, the recording of the special warranty deed conveying title to Buyer. The ALTA Owner's Policy and the ALTA Loan Policy must each be issued free and clear of this exception, without qualification, limitation, or exclusion.

3.2 Judgments, Liens, and Monetary Encumbrances

Description of Exception. Buyer objects to any and all judgments, mechanic's liens, construction liens (as defined in Chapter 713, Florida Statutes), tax liens (other than the lien for ad valorem real-estate taxes and assessments not yet due and payable, which is addressed as a Permitted Exception below), assessment liens, or other monetary encumbrances of any kind or nature whatsoever against the Property, against Seller (Saltaire Hospitality Holdings LLC), or against any prior owners of the Property, as may appear of record in the Official Records of Palm Beach County, Florida, in the applicable judgment indices maintained by the Clerk of the Circuit Court of Palm Beach County, or in any other public records that may affect title to the Property.

Objection. Buyer objects to any such monetary encumbrances and requires that Seller cause any and all such liens, judgments, or monetary encumbrances to be fully satisfied and released of record, or, where appropriate, bonded off pursuant to applicable Florida law, at or prior to the closing. Seller shall provide evidence satisfactory to Buyer and to Commonwealth Southern Title Insurance Company, in its capacity as the proposed title insurance underwriter, that no unsatisfied judgments, liens, or monetary encumbrances of record affect the Property or Seller. Such evidence shall include, without limitation, appropriate lien and judgment searches of the applicable indices and, to the extent any such matters are identified, recorded satisfactions, releases, or statutory bonds demonstrating that such matters have been resolved.

3.3 Open or Expired Building Permits

Description of Exception. Buyer objects to any open, expired, or unresolved building permits, code violations, or governmental orders relating to the Property, including but not limited to any permits issued by the City of Delray Beach or Palm Beach County in connection with the 2018–2019 renovation of the hotel (which, based on information provided during Buyer's due-diligence review, was part of Saltaire Hospitality Holdings LLC's approximately $8,600,000 renovation program encompassing guest room renovations, the addition of the rooftop restaurant and bar, spa improvements, and exterior and landscaping upgrades).

Objection. Buyer objects to any open, expired, or unresolved building permits, code enforcement actions, or unresolved governmental orders affecting the Property and requires that Seller cause all such matters to be resolved, closed out, or otherwise cleared to the reasonable satisfaction of Buyer and Commonwealth Southern Title Insurance Company at or prior to the closing. Without limiting the generality of the foregoing, Seller shall provide to Buyer final certificates of occupancy, certificates of completion, or certificates of compliance, as applicable, for all work performed on the Property, including the 2018–2019 renovation work and any subsequent improvements, alterations, or repairs undertaken by Seller or its contractors. Seller shall further demonstrate that no outstanding notices of violation, stop-work orders, or other governmental enforcement actions are pending or threatened with respect to the Property.

3.4 Survey Encroachments

Description of Exception. Buyer objects to any encroachments by improvements located on the Property onto adjacent parcels, easement areas, setback areas, or public rights-of-way, or encroachments by improvements located on adjacent parcels onto the Property, as depicted on the Survey prepared by Crestline Surveying & Mapping, Inc. Buyer draws Seller's specific attention to the following matters reflected on the Survey:

(a) Any improvements on the Property that encroach into the ten (10)-foot utility easement running along the western boundary of the Property in favor of Vireo Group ("FPL"), as more particularly described in the easement agreement recorded in Official Records Book 22017, Page 934, Official Records of Palm Beach County, Florida;

(b) Any improvements on the Property that encroach into the beach access easement area granted in favor of the City of Delray Beach, as more particularly described in the easement recorded in Official Records Book 31245, Page 1822, Official Records of Palm Beach County, Florida; and

(c) Any improvements on the Property that extend beyond the coastal construction control line setback, as established by the Florida Department of Environmental Protection and depicted on the Survey.

Objection. Buyer objects to any and all such encroachments and requires that Seller cure the same at or prior to the closing. Acceptable methods of cure shall include, without limitation: (i) the physical removal or relocation of the encroaching improvement so that it is wholly within the boundaries of the Property and outside any easement area, setback line, or right-of-way; (ii) the procurement and delivery to Buyer of a written consent, waiver, or release from the benefited party (including, as applicable, FPL, the City of Delray Beach, or the Florida Department of Environmental Protection) acknowledging and permitting the encroachment to remain in place; or (iii) the procurement and delivery to Buyer of an endorsement from Commonwealth Southern Title Insurance Company affirmatively insuring over the encroachment to Buyer's reasonable satisfaction and in form and substance acceptable to Buyer and its counsel. Any such endorsement must also be acceptable to Meridian Coast Bank, N.A., and its counsel for purposes of the ALTA Loan Policy.

3.5 Reservation of Right to Object to Additional or Supplemental Title Exceptions

Buyer expressly reserves the right to object to any additional matters that may appear in any update, supplement, continuation, or amendment of the Title Commitment or any revision or update to the Survey between the date hereof and the closing date of September 15, 2025. In the event any new exceptions, defects, liens, encumbrances, or other matters affecting title to the Property arise or are first disclosed after the date of this letter, Buyer shall have the right to deliver supplemental written objections to Seller, and Seller shall have a reasonable period, as provided in the PSA, to cure such additional objections. Nothing in this letter shall be construed to limit or waive Buyer's right to raise such supplemental objections.

4. Permitted Exceptions — Acknowledged and Accepted

Notwithstanding the foregoing objections, Buyer hereby acknowledges and accepts the following matters as "Permitted Exceptions" under the PSA. These matters shall not constitute title objections, and Buyer does not require that Seller cure or remove these exceptions as a condition of closing. The ALTA Owner's Policy and ALTA Loan Policy may be issued subject to these Permitted Exceptions:

4.1 Beach Access Easement — City of Delray Beach

Easement in favor of the City of Delray Beach for public beach access, recorded in Official Records Book 31245, Page 1822, Official Records of Palm Beach County, Florida. Buyer accepts this easement as a Permitted Exception. This easement is consistent with the Property's oceanfront location and the current hotel operations conducted thereon, and, in Buyer's assessment, does not materially impair or interfere with Buyer's intended use of the Property for hotel and resort purposes. Buyer's acceptance of this easement as a Permitted Exception is subject to and without prejudice to Buyer's objection to any encroachments of improvements into the easement area, as set forth in Section 3.4 above.

4.2 Utility Easement — Vireo Group (FPL)

Easement in favor of Vireo Group, ten (10) feet in width, running along the western boundary of the Property, recorded in Official Records Book 22017, Page 934, Official Records of Palm Beach County, Florida. Buyer accepts this easement as a Permitted Exception. This is a standard utility easement that, so long as no improvements encroach therein, does not materially interfere with the improvements on or operations of the Property. Buyer's acceptance of this easement as a Permitted Exception is expressly subject to Seller's obligation to cure any encroachments of improvements into the easement area, as set forth in Section 3.4 above.

4.3 Declaration of Covenants, Conditions, and Restrictions (CC&Rs)

Declaration of Covenants, Conditions, and Restrictions recorded by the original developer of the Property in Official Records Book 18904, Page 455, Official Records of Palm Beach County, Florida, which restricts use of the Property to hotel and resort purposes and imposes certain architectural and maintenance standards. Buyer accepts this Declaration as a Permitted Exception. The restrictions contained in the Declaration are consistent with Buyer's intended use of the Property as a boutique hotel, and Buyer does not consider the Declaration to be an impediment to the contemplated transaction or to Buyer's planned operations.

4.4 Real Estate Taxes and Assessments Not Yet Due and Payable

The lien for ad valorem real-estate taxes and assessments for the year 2025 and subsequent years, not yet due and payable. For reference, the 2024 assessed value of the Property, as reflected on the records of the Palm Beach County Property Appraiser, is approximately $24,000,000.00, and the 2024 annual taxes were approximately $432,000.00. Buyer estimates 2025 annual taxes at approximately $440,000.00. Real-estate taxes for the year 2025 shall be prorated between Seller and Buyer as of the closing date of September 15, 2025, in accordance with the proration provisions of the PSA.

4.5 Zoning and Governmental Regulations

CBD (Central Business District) zoning classification under the City of Delray Beach Land Development Regulations, and all applicable governmental laws, regulations, ordinances, and orders affecting the Property, including without limitation coastal construction control line setback requirements established by the Florida Department of Environmental Protection, provided that the current improvements on the Property are in compliance therewith. Buyer's acceptance of this Permitted Exception is conditioned upon the absence of any existing violations of applicable zoning or governmental regulations affecting the Property.

5. Required Seller Actions and Cure Period

In summary, Buyer requires Seller to take the following actions in order to cure the objectionable title exceptions identified in Section 3 of this letter:

1. First-Mortgage Lien (Section 3.1). Obtain and deliver to Palmetto Title & Escrow Company a written payoff letter from Seaview National Lending Corp. (or its authorized servicer), confirming the exact payoff amount, per diem interest, applicable fees, and wire transfer instructions, and arrange for the satisfaction and discharge of the first-mortgage lien and the recording of a Satisfaction of Mortgage in the Official Records of Palm Beach County, Florida, at or contemporaneously with the closing on September 15, 2025.

2. Judgments, Liens, and Monetary Encumbrances (Section 3.2). Cause all judgments, liens, and monetary encumbrances of any kind (if any) affecting the Property or Seller to be fully satisfied, released of record, or bonded off pursuant to applicable Florida law, and provide satisfactory evidence thereof to Buyer and Commonwealth Southern Title Insurance Company.

3. Open or Expired Building Permits (Section 3.3). Cause all open, expired, or unresolved building permits and code violations (if any) affecting the Property to be resolved, closed out, or otherwise cleared, and provide to Buyer final certificates of occupancy, completion, or compliance, as applicable, for all work performed on the Property, including the 2018–2019 renovation.

4. Survey Encroachments (Section 3.4). Cure any encroachments depicted on the Survey by removal of the encroaching improvements, procurement of consents or waivers from the benefited parties, or procurement of title insurance endorsements from Commonwealth Southern Title Insurance Company insuring over the encroachments to Buyer's reasonable satisfaction and in form and substance acceptable to Buyer, its counsel, Meridian Coast Bank, N.A., and its counsel.

As noted above, Seller's Cure Period under Section 6.3 of the PSA is fifteen (15) days from receipt of this letter, which Cure Period is expected to expire on or about August 22, 2025. Buyer respectfully requests that Seller confirm in writing, prior to the expiration of the Cure Period, which objections Seller is able and willing to cure and the specific manner of the proposed cure for each.

If Seller fails or is unable to cure any objectionable exception within the Cure Period to Buyer's reasonable satisfaction, Buyer shall have the right to exercise its remedies under the PSA, including, without limitation, the right to terminate the PSA by written notice to Seller and to receive a full and immediate return of the Earnest Money Deposit in the amount of One Million Seven Hundred Fifty Thousand and No/100 Dollars ($1,750,000.00), currently held in escrow by Palmetto Title & Escrow Company. Buyer notes for the record that the Additional Deposit in the amount of Eight Hundred Seventy-Five Thousand and No/100 Dollars ($875,000.00) is not due under the PSA until August 25, 2025, which is two (2) business days after the expiration of the due-diligence period on August 21, 2025, and therefore has not yet been deposited as of the date of this letter.

6. Requirement for Clean Title at Closing

At closing on September 15, 2025, Seller must deliver to Buyer fee simple title to the Property by duly executed and acknowledged special warranty deed, subject only to the Permitted Exceptions set forth in Section 4 of this letter and as defined in the PSA. The conveyance of title must be free and clear of all liens, encumbrances, defects, and exceptions other than such Permitted Exceptions.

As a condition of closing, Commonwealth Southern Title Insurance Company must be prepared to issue, simultaneously with the recording of the special warranty deed: (a) the ALTA Owner's Policy of Title Insurance (Form 2021) in the amount of Thirty-Five Million and No/100 Dollars ($35,000,000.00), insuring fee simple title in Buyer, subject only to the Permitted Exceptions and without exception for any of the objectionable matters identified in Section 3 of this letter; and (b) the ALTA Loan Policy of Title Insurance (Form 2021) in the amount of Twenty-Four Million Five Hundred Thousand and No/100 Dollars ($24,500,000.00), issued for the benefit of Meridian Coast Bank, N.A., in connection with its first-mortgage acquisition loan to Buyer (Loan Reference No. MCB-CRE-2025-07184), insuring the priority of the lender's mortgage lien, subject only to the Permitted Exceptions and without exception for any of the objectionable matters identified herein.

Buyer may request that Commonwealth Southern Title Insurance Company issue appropriate ALTA endorsements to both the Owner's Policy and the Loan Policy to address specific matters identified in the Title Commitment and the Survey, including, without limitation, survey/location endorsements, access endorsements, zoning endorsements, environmental protection lien endorsements, and such other endorsements as Buyer and its lender may reasonably require. Buyer will coordinate directly with Palmetto Title & Escrow Company and Commonwealth Southern Title Insurance Company regarding the specific endorsements to be issued, and Buyer requests Seller's cooperation in connection therewith.

7. Reservation of Rights

This letter does not constitute a waiver of any rights Buyer may have under the PSA, at law, or in equity, with respect to title or survey matters or otherwise. Buyer expressly reserves all rights and remedies under the PSA, including, without limitation: (a) the right to terminate the PSA and receive a return of the Earnest Money Deposit if the title objections set forth herein are not cured to Buyer's reasonable satisfaction within the applicable Cure Period; (b) the right to elect to close notwithstanding any uncured objection, with such election not constituting a waiver of any claim or remedy arising from the uncured objection; and (c) the right to seek specific performance, damages, or other remedies as may be available under the PSA or applicable law.

Buyer further expressly reserves the right to raise additional objections in the event of any update, supplement, continuation, or amendment to the Title Commitment, or any revision or update to the Survey, that discloses new exceptions, defects, liens, encumbrances, or other matters affecting title to the Property or the Survey, in each case in accordance with the provisions of the PSA.

Nothing contained in this letter shall be deemed to expand, limit, modify, or amend the definition of "Permitted Exceptions" as set forth in the PSA, nor shall anything herein be construed to impose obligations on Seller beyond those already required under the PSA. This letter is intended solely as Buyer's notice of title objections pursuant to the PSA and is not intended to modify or amend the PSA in any respect.

8. Contact Information and Closing

Seller and Seller's counsel are requested to direct all responses, correspondence, and communications regarding this letter and the title objections set forth herein to the undersigned:

Angela Fontaine, Esq. Calderwood & Harkness LLP 1450 Brickell Avenue, Suite 3100 Miami, Florida 33131 Telephone: (305) 884-7218

Email: afontaine@calderwoodharkness.com

With a copy to:

Veronica Suárez-Pellegrino, Esq. General Counsel Pellegrino Capital Group LLC 2400 Ponce de Leon Boulevard, Suite 1100 Coral Gables, Florida 33134 Telephone: (305) 442-5500

Email: vsp@pellegrinocapital.com

We respectfully request prompt acknowledgment of receipt of this letter. We are available to discuss the objections set forth herein at your convenience and stand ready to coordinate with Seller's counsel, Palmetto Title & Escrow Company, and all other relevant parties in connection with the cure of the objectionable exceptions. We believe that prompt communication and cooperation between the parties will facilitate the efficient resolution of these matters in advance of the scheduled closing date.

We thank you for your attention to this matter and look forward to your timely response.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Angela Fontaine, Esq. Partner, Real Estate Direct: (305) 884-7218

Email: afontaine@calderwoodharkness.com

cc (via electronic mail):

Veronica Suárez-Pellegrino, Esq. — General Counsel, Pellegrino Capital Group LLC Rafael Dominguez, Esq. — Calderwood & Harkness LLP Cynthia Ho, Esq. — Calderwood & Harkness LLP Denise Lafleur — Palmetto Title & Escrow Company Jonathan Ng, Esq. — Braddock Reeves LLP (Lender's Counsel for Meridian Coast Bank, N.A.)

Enclosure: Copy of Schedule B Exceptions from Palmetto Title & Escrow Company Commitment No. PTE-2025-07892 (for reference)

PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
1450 Brickell Avenue, Suite 3100 Miami, Florida 33131
Telephone: (305) 884-7200 Facsimile: (305) 884-7201 www.calderwoodharkness.com
Matter No. 40225.00001
August 7, 2025
VIA ELECTRONIC MAIL AND FEDERAL EXPRESS
Patricia "Trish" Blaine, Esq. Hargrove, Kessler & Blaine LLP 515 North Flagler Drive, Suite 800 West Palm Beach, Florida 33401
Re: Title Objections — Purchase and Sale Agreement dated July 7, 2025, between Saltaire Hospitality Holdings LLC ("Seller") and PCG Delray Hotel LLC ("Buyer")
Property: 455 South Ocean Boulevard, Delray Beach, Florida 33483 Palm Beach County Parcel ID: 12-43-46-27-01-005-0010 Commonly known as: "The Marisol — A Saltaire Hotel"
Dear Ms. Blaine:
1. Introduction and Purpose
This firm represents PCG Delray Hotel LLC, a Florida limited liability company and wholly owned subsidiary of Pellegrino Capital Group LLC ("Buyer"), in connection with Buyer's acquisition of the above-referenced property (the "Property") pursuant to that certain Purchase and Sale Agreement dated July 7, 2025 (the "PSA"), by and between Saltaire Hospitality Holdings LLC, a Delaware limited liability company registered to do business in the State of Florida ("Seller"), as seller, and PCG Delray Hotel LLC, as buyer. The PSA provides for the purchase of the Property at a purchase price of Thirty-Five Million and No/100 Dollars ($35,000,000.00), with a scheduled closing date of September 15, 2025.
The purpose of this letter is to provide Buyer's formal written notice of title objections pursuant to Section 6.2 of the PSA, within the thirty (30)-day title objection period that commenced on the date of execution of the PSA, July 7, 2025, and expires on August 7, 2025. This letter constitutes Buyer's timely objection to certain matters reflected in the title commitment and the ALTA/NSPS Land Title Survey described below.
As provided in Section 6.3 of the PSA, upon receipt of this letter, Seller shall have a fifteen (15)-day cure period (the "Cure Period") in which to cure, remove, or otherwise resolve the objectionable exceptions identified herein to Buyer's reasonable satisfaction. Based on the date of this letter, the Cure Period is anticipated to expire on or about August 22, 2025. Buyer respectfully requests that Seller confirm in writing, prior to the expiration of the Cure Period, which objections Seller is able and willing to cure and the manner in which Seller proposes to effect such cure.
2. Documents Reviewed
In connection with the preparation of this letter, we have reviewed the following documents, copies of which have been made available to Seller's counsel:
Title Commitment. Commitment for Title Insurance issued by Palmetto Title & Escrow Company (title officer: Denise Lafleur), located at 200 Clematis Street, Suite 400, West Palm Beach, Florida 33401, Commitment No. PTE-2025-07892, with an effective date of July 14, 2025, at 8:00 a.m. (the "Title Commitment"). The proposed title insurance underwriter is Commonwealth Southern Title Insurance Company. The Title Commitment contemplates the issuance of (a) an ALTA Owner's Policy of Title Insurance (Form 2021) in the amount of $35,000,000.00, which is equal to the purchase price set forth in the PSA, in favor of Buyer, and (b) an ALTA Loan Policy of Title Insurance (Form 2021) in the amount of $24,500,000.00, to be issued simultaneously with the Owner's Policy for the benefit of Meridian Coast Bank, N.A., as lender, in connection with its first-mortgage acquisition loan to Buyer.
ALTA/NSPS Land Title Survey. ALTA/NSPS Land Title Survey dated July 18, 2025, prepared by Crestline Surveying & Mapping, Inc., under the direction and supervision of George Tavares, PSM (Florida Professional Surveyor and Mapper License No. 6847), for the Property located at 455 South Ocean Boulevard, Delray Beach, Florida 33483 (the "Survey"). The Survey depicts the Property as consisting of approximately 1.87 acres (approximately 81,457 square feet) and reflects the following improvements: a 42-key, four-story boutique hotel containing approximately 38,600 gross square feet of floor area; a rooftop restaurant and bar commonly known as "Terrazza"; a spa facility of approximately 3,200 square feet; and a 60-space surface parking lot. The Survey reflects a flood zone designation of Zone AE (Special Flood Hazard Area), as depicted on the Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM) Panel No. 12099C0826J, with an effective date of December 4, 2020. The Survey further reflects the coastal construction control line setback applicable to the parcel, as established by the Florida Department of Environmental Protection.
We have also reviewed the recorded instruments referenced in the Schedule B exceptions of the Title Commitment, to the extent such instruments were available through the Official Records of Palm Beach County, Florida.
3. Objectionable Title Exceptions
Based upon our review of the Title Commitment and the Survey, Buyer hereby objects to the following matters, each of which constitutes an objectionable title exception that must be cured, removed, or otherwise resolved by Seller at or prior to the closing of the transaction contemplated by the PSA:
3.1 First-Mortgage Lien — Seaview National Lending Corp.
Description of Exception. The Title Commitment reflects as a Schedule B-II exception a Mortgage, Assignment of Rents, and Security Agreement in favor of Seaview National Lending Corp., a Delaware corporation, securing indebtedness in the original principal amount of Sixteen Million Eight Hundred Thousand and No/100 Dollars ($16,800,000.00), recorded in Official Records Book 34892, Page 2217, of the Official Records of Palm Beach County, Florida, together with any and all amendments, modifications, assignments, and renewals thereof. Based on information provided by Seller during the due-diligence period, the approximate current payoff balance of the indebtedness secured by this mortgage is Fourteen Million Three Hundred Fifty Thousand and No/100 Dollars ($14,350,000.00).
Objection. Buyer objects to this encumbrance in its entirety. Buyer requires that Seller cause this mortgage lien to be paid in full and satisfied, and that a Satisfaction of Mortgage be recorded in the Official Records of Palm Beach County, Florida, at or prior to the closing on September 15, 2025. Specifically, Buyer requires that Palmetto Title & Escrow Company receive a written payoff letter directly from Seaview National Lending Corp. (or its authorized servicer) confirming the exact payoff amount as of the anticipated closing date, the applicable per diem interest accrual, any prepayment penalties or fees, and the wire transfer instructions for remittance of the payoff amount. This payoff letter must be received by the title company in sufficient time to facilitate the disbursement of the payoff amount from Seller's closing proceeds and to enable the recording of a Satisfaction of Mortgage simultaneously with, or immediately following, the recording of the special warranty deed conveying title to Buyer. The ALTA Owner's Policy and the ALTA Loan Policy must each be issued free and clear of this exception, without qualification, limitation, or exclusion.
3.2 Judgments, Liens, and Monetary Encumbrances
Description of Exception. Buyer objects to any and all judgments, mechanic's liens, construction liens (as defined in Chapter 713, Florida Statutes), tax liens (other than the lien for ad valorem real-estate taxes and assessments not yet due and payable, which is addressed as a Permitted Exception below), assessment liens, or other monetary encumbrances of any kind or nature whatsoever against the Property, against Seller (Saltaire Hospitality Holdings LLC), or against any prior owners of the Property, as may appear of record in the Official Records of Palm Beach County, Florida, in the applicable judgment indices maintained by the Clerk of the Circuit Court of Palm Beach County, or in any other public records that may affect title to the Property.
Objection. Buyer objects to any such monetary encumbrances and requires that Seller cause any and all such liens, judgments, or monetary encumbrances to be fully satisfied and released of record, or, where appropriate, bonded off pursuant to applicable Florida law, at or prior to the closing. Seller shall provide evidence satisfactory to Buyer and to Commonwealth Southern Title Insurance Company, in its capacity as the proposed title insurance underwriter, that no unsatisfied judgments, liens, or monetary encumbrances of record affect the Property or Seller. Such evidence shall include, without limitation, appropriate lien and judgment searches of the applicable indices and, to the extent any such matters are identified, recorded satisfactions, releases, or statutory bonds demonstrating that such matters have been resolved.
3.3 Open or Expired Building Permits
Description of Exception. Buyer objects to any open, expired, or unresolved building permits, code violations, or governmental orders relating to the Property, including but not limited to any permits issued by the City of Delray Beach or Palm Beach County in connection with the 2018–2019 renovation of the hotel (which, based on information provided during Buyer's due-diligence review, was part of Saltaire Hospitality Holdings LLC's approximately $8,600,000 renovation program encompassing guest room renovations, the addition of the rooftop restaurant and bar, spa improvements, and exterior and landscaping upgrades).
Objection. Buyer objects to any open, expired, or unresolved building permits, code enforcement actions, or unresolved governmental orders affecting the Property and requires that Seller cause all such matters to be resolved, closed out, or otherwise cleared to the reasonable satisfaction of Buyer and Commonwealth Southern Title Insurance Company at or prior to the closing. Without limiting the generality of the foregoing, Seller shall provide to Buyer final certificates of occupancy, certificates of completion, or certificates of compliance, as applicable, for all work performed on the Property, including the 2018–2019 renovation work and any subsequent improvements, alterations, or repairs undertaken by Seller or its contractors. Seller shall further demonstrate that no outstanding notices of violation, stop-work orders, or other governmental enforcement actions are pending or threatened with respect to the Property.
3.4 Survey Encroachments
Description of Exception. Buyer objects to any encroachments by improvements located on the Property onto adjacent parcels, easement areas, setback areas, or public rights-of-way, or encroachments by improvements located on adjacent parcels onto the Property, as depicted on the Survey prepared by Crestline Surveying & Mapping, Inc. Buyer draws Seller's specific attention to the following matters reflected on the Survey:
(a) Any improvements on the Property that encroach into the ten (10)-foot utility easement running along the western boundary of the Property in favor of Vireo Group ("FPL"), as more particularly described in the easement agreement recorded in Official Records Book 22017, Page 934, Official Records of Palm Beach County, Florida;
(b) Any improvements on the Property that encroach into the beach access easement area granted in favor of the City of Delray Beach, as more particularly described in the easement recorded in Official Records Book 31245, Page 1822, Official Records of Palm Beach County, Florida; and
(c) Any improvements on the Property that extend beyond the coastal construction control line setback, as established by the Florida Department of Environmental Protection and depicted on the Survey.
Objection. Buyer objects to any and all such encroachments and requires that Seller cure the same at or prior to the closing. Acceptable methods of cure shall include, without limitation: (i) the physical removal or relocation of the encroaching improvement so that it is wholly within the boundaries of the Property and outside any easement area, setback line, or right-of-way; (ii) the procurement and delivery to Buyer of a written consent, waiver, or release from the benefited party (including, as applicable, FPL, the City of Delray Beach, or the Florida Department of Environmental Protection) acknowledging and permitting the encroachment to remain in place; or (iii) the procurement and delivery to Buyer of an endorsement from Commonwealth Southern Title Insurance Company affirmatively insuring over the encroachment to Buyer's reasonable satisfaction and in form and substance acceptable to Buyer and its counsel. Any such endorsement must also be acceptable to Meridian Coast Bank, N.A., and its counsel for purposes of the ALTA Loan Policy.
3.5 Reservation of Right to Object to Additional or Supplemental Title Exceptions
Buyer expressly reserves the right to object to any additional matters that may appear in any update, supplement, continuation, or amendment of the Title Commitment or any revision or update to the Survey between the date hereof and the closing date of September 15, 2025. In the event any new exceptions, defects, liens, encumbrances, or other matters affecting title to the Property arise or are first disclosed after the date of this letter, Buyer shall have the right to deliver supplemental written objections to Seller, and Seller shall have a reasonable period, as provided in the PSA, to cure such additional objections. Nothing in this letter shall be construed to limit or waive Buyer's right to raise such supplemental objections.
4. Permitted Exceptions — Acknowledged and Accepted
Notwithstanding the foregoing objections, Buyer hereby acknowledges and accepts the following matters as "Permitted Exceptions" under the PSA. These matters shall not constitute title objections, and Buyer does not require that Seller cure or remove these exceptions as a condition of closing. The ALTA Owner's Policy and ALTA Loan Policy may be issued subject to these Permitted Exceptions:
4.1 Beach Access Easement — City of Delray Beach
Easement in favor of the City of Delray Beach for public beach access, recorded in Official Records Book 31245, Page 1822, Official Records of Palm Beach County, Florida. Buyer accepts this easement as a Permitted Exception. This easement is consistent with the Property's oceanfront location and the current hotel operations conducted thereon, and, in Buyer's assessment, does not materially impair or interfere with Buyer's intended use of the Property for hotel and resort purposes. Buyer's acceptance of this easement as a Permitted Exception is subject to and without prejudice to Buyer's objection to any encroachments of improvements into the easement area, as set forth in Section 3.4 above.
4.2 Utility Easement — Vireo Group (FPL)
Easement in favor of Vireo Group, ten (10) feet in width, running along the western boundary of the Property, recorded in Official Records Book 22017, Page 934, Official Records of Palm Beach County, Florida. Buyer accepts this easement as a Permitted Exception. This is a standard utility easement that, so long as no improvements encroach therein, does not materially interfere with the improvements on or operations of the Property. Buyer's acceptance of this easement as a Permitted Exception is expressly subject to Seller's obligation to cure any encroachments of improvements into the easement area, as set forth in Section 3.4 above.
4.3 Declaration of Covenants, Conditions, and Restrictions (CC&Rs)
Declaration of Covenants, Conditions, and Restrictions recorded by the original developer of the Property in Official Records Book 18904, Page 455, Official Records of Palm Beach County, Florida, which restricts use of the Property to hotel and resort purposes and imposes certain architectural and maintenance standards. Buyer accepts this Declaration as a Permitted Exception. The restrictions contained in the Declaration are consistent with Buyer's intended use of the Property as a boutique hotel, and Buyer does not consider the Declaration to be an impediment to the contemplated transaction or to Buyer's planned operations.
4.4 Real Estate Taxes and Assessments Not Yet Due and Payable
The lien for ad valorem real-estate taxes and assessments for the year 2025 and subsequent years, not yet due and payable. For reference, the 2024 assessed value of the Property, as reflected on the records of the Palm Beach County Property Appraiser, is approximately $24,000,000.00, and the 2024 annual taxes were approximately $432,000.00. Buyer estimates 2025 annual taxes at approximately $440,000.00. Real-estate taxes for the year 2025 shall be prorated between Seller and Buyer as of the closing date of September 15, 2025, in accordance with the proration provisions of the PSA.
4.5 Zoning and Governmental Regulations
CBD (Central Business District) zoning classification under the City of Delray Beach Land Development Regulations, and all applicable governmental laws, regulations, ordinances, and orders affecting the Property, including without limitation coastal construction control line setback requirements established by the Florida Department of Environmental Protection, provided that the current improvements on the Property are in compliance therewith. Buyer's acceptance of this Permitted Exception is conditioned upon the absence of any existing violations of applicable zoning or governmental regulations affecting the Property.
5. Required Seller Actions and Cure Period
In summary, Buyer requires Seller to take the following actions in order to cure the objectionable title exceptions identified in Section 3 of this letter:
1.  First-Mortgage Lien (Section 3.1). Obtain and deliver to Palmetto Title & Escrow Company a written payoff letter from Seaview National Lending Corp. (or its authorized servicer), confirming the exact payoff amount, per diem interest, applicable fees, and wire transfer instructions, and arrange for the satisfaction and discharge of the first-mortgage lien and the recording of a Satisfaction of Mortgage in the Official Records of Palm Beach County, Florida, at or contemporaneously with the closing on September 15, 2025.
2.  Judgments, Liens, and Monetary Encumbrances (Section 3.2). Cause all judgments, liens, and monetary encumbrances of any kind (if any) affecting the Property or Seller to be fully satisfied, released of record, or bonded off pursuant to applicable Florida law, and provide satisfactory evidence thereof to Buyer and Commonwealth Southern Title Insurance Company.
3.  Open or Expired Building Permits (Section 3.3). Cause all open, expired, or unresolved building permits and code violations (if any) affecting the Property to be resolved, closed out, or otherwise cleared, and provide to Buyer final certificates of occupancy, completion, or compliance, as applicable, for all work performed on the Property, including the 2018–2019 renovation.
4.  Survey Encroachments (Section 3.4). Cure any encroachments depicted on the Survey by removal of the encroaching improvements, procurement of consents or waivers from the benefited parties, or procurement of title insurance endorsements from Commonwealth Southern Title Insurance Company insuring over the encroachments to Buyer's reasonable satisfaction and in form and substance acceptable to Buyer, its counsel, Meridian Coast Bank, N.A., and its counsel.
As noted above, Seller's Cure Period under Section 6.3 of the PSA is fifteen (15) days from receipt of this letter, which Cure Period is expected to expire on or about August 22, 2025. Buyer respectfully requests that Seller confirm in writing, prior to the expiration of the Cure Period, which objections Seller is able and willing to cure and the specific manner of the proposed cure for each.
If Seller fails or is unable to cure any objectionable exception within the Cure Period to Buyer's reasonable satisfaction, Buyer shall have the right to exercise its remedies under the PSA, including, without limitation, the right to terminate the PSA by written notice to Seller and to receive a full and immediate return of the Earnest Money Deposit in the amount of One Million Seven Hundred Fifty Thousand and No/100 Dollars ($1,750,000.00), currently held in escrow by Palmetto Title & Escrow Company. Buyer notes for the record that the Additional Deposit in the amount of Eight Hundred Seventy-Five Thousand and No/100 Dollars ($875,000.00) is not due under the PSA until August 25, 2025, which is two (2) business days after the expiration of the due-diligence period on August 21, 2025, and therefore has not yet been deposited as of the date of this letter.
6. Requirement for Clean Title at Closing
At closing on September 15, 2025, Seller must deliver to Buyer fee simple title to the Property by duly executed and acknowledged special warranty deed, subject only to the Permitted Exceptions set forth in Section 4 of this letter and as defined in the PSA. The conveyance of title must be free and clear of all liens, encumbrances, defects, and exceptions other than such Permitted Exceptions.
As a condition of closing, Commonwealth Southern Title Insurance Company must be prepared to issue, simultaneously with the recording of the special warranty deed: (a) the ALTA Owner's Policy of Title Insurance (Form 2021) in the amount of Thirty-Five Million and No/100 Dollars ($35,000,000.00), insuring fee simple title in Buyer, subject only to the Permitted Exceptions and without exception for any of the objectionable matters identified in Section 3 of this letter; and (b) the ALTA Loan Policy of Title Insurance (Form 2021) in the amount of Twenty-Four Million Five Hundred Thousand and No/100 Dollars ($24,500,000.00), issued for the benefit of Meridian Coast Bank, N.A., in connection with its first-mortgage acquisition loan to Buyer (Loan Reference No. MCB-CRE-2025-07184), insuring the priority of the lender's mortgage lien, subject only to the Permitted Exceptions and without exception for any of the objectionable matters identified herein.
Buyer may request that Commonwealth Southern Title Insurance Company issue appropriate ALTA endorsements to both the Owner's Policy and the Loan Policy to address specific matters identified in the Title Commitment and the Survey, including, without limitation, survey/location endorsements, access endorsements, zoning endorsements, environmental protection lien endorsements, and such other endorsements as Buyer and its lender may reasonably require. Buyer will coordinate directly with Palmetto Title & Escrow Company and Commonwealth Southern Title Insurance Company regarding the specific endorsements to be issued, and Buyer requests Seller's cooperation in connection therewith.
7. Reservation of Rights
This letter does not constitute a waiver of any rights Buyer may have under the PSA, at law, or in equity, with respect to title or survey matters or otherwise. Buyer expressly reserves all rights and remedies under the PSA, including, without limitation: (a) the right to terminate the PSA and receive a return of the Earnest Money Deposit if the title objections set forth herein are not cured to Buyer's reasonable satisfaction within the applicable Cure Period; (b) the right to elect to close notwithstanding any uncured objection, with such election not constituting a waiver of any claim or remedy arising from the uncured objection; and (c) the right to seek specific performance, damages, or other remedies as may be available under the PSA or applicable law.
Buyer further expressly reserves the right to raise additional objections in the event of any update, supplement, continuation, or amendment to the Title Commitment, or any revision or update to the Survey, that discloses new exceptions, defects, liens, encumbrances, or other matters affecting title to the Property or the Survey, in each case in accordance with the provisions of the PSA.
Nothing contained in this letter shall be deemed to expand, limit, modify, or amend the definition of "Permitted Exceptions" as set forth in the PSA, nor shall anything herein be construed to impose obligations on Seller beyond those already required under the PSA. This letter is intended solely as Buyer's notice of title objections pursuant to the PSA and is not intended to modify or amend the PSA in any respect.
8. Contact Information and Closing
Seller and Seller's counsel are requested to direct all responses, correspondence, and communications regarding this letter and the title objections set forth herein to the undersigned:
Angela Fontaine, Esq. Calderwood & Harkness LLP 1450 Brickell Avenue, Suite 3100 Miami, Florida 33131 Telephone: (305) 884-7218
Email: afontaine@calderwoodharkness.com
With a copy to:
Veronica Suárez-Pellegrino, Esq. General Counsel Pellegrino Capital Group LLC 2400 Ponce de Leon Boulevard, Suite 1100 Coral Gables, Florida 33134 Telephone: (305) 442-5500
Email: vsp@pellegrinocapital.com
We respectfully request prompt acknowledgment of receipt of this letter. We are available to discuss the objections set forth herein at your convenience and stand ready to coordinate with Seller's counsel, Palmetto Title & Escrow Company, and all other relevant parties in connection with the cure of the objectionable exceptions. We believe that prompt communication and cooperation between the parties will facilitate the efficient resolution of these matters in advance of the scheduled closing date.
We thank you for your attention to this matter and look forward to your timely response.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Angela Fontaine, Esq. Partner, Real Estate Direct: (305) 884-7218
Email: afontaine@calderwoodharkness.com
cc (via electronic mail):
Veronica Suárez-Pellegrino, Esq. — General Counsel, Pellegrino Capital Group LLC Rafael Dominguez, Esq. — Calderwood & Harkness LLP Cynthia Ho, Esq. — Calderwood & Harkness LLP Denise Lafleur — Palmetto Title & Escrow Company Jonathan Ng, Esq. — Braddock Reeves LLP (Lender's Counsel for Meridian Coast Bank, N.A.)
Enclosure: Copy of Schedule B Exceptions from Palmetto Title & Escrow Company Commitment No. PTE-2025-07892 (for reference)

PRIVILEGED AND CONFIDENTIAL

VIA ELECTRONIC MAIL AND FEDERAL EXPRESS

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts