PURCHASE AND SALE AGREEMENT
455 South Ocean Boulevard Delray Beach, Florida 33483
"The Marisol — A Saltaire Hotel"
by and between
SALTAIRE HOSPITALITY HOLDINGS LLC a Delaware limited liability company
as Seller
and
PCG DELRAY HOTEL LLC a Florida limited liability company
as Buyer
Dated as of July 7, 2025
Prepared by:
Calderwood & Harkness LLP 1450 Brickell Avenue, Suite 3100 Miami, Florida 33131
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as of July 7, 2025 (the "Effective Date"), by and between:
SALTAIRE HOSPITALITY HOLDINGS LLC, a Delaware limited liability company registered to do business in the State of Florida, with its principal place of business at 777 South Flagler Drive, Suite 600, West Palm Beach, Florida 33401 ("Seller"),
and
PCG DELRAY HOTEL LLC, a Florida limited liability company, with its principal address c/o Pellegrino Capital Group LLC, 2400 Ponce de Leon Boulevard, Suite 1100, Coral Gables, Florida 33134 ("Buyer").
Seller and Buyer are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Seller is Saltaire Hospitality Holdings LLC, a Delaware limited liability company duly organized and validly existing under the laws of the State of Delaware and registered to transact business in the State of Florida, with its principal place of business at 777 South Flagler Drive, Suite 600, West Palm Beach, Florida 33401;
WHEREAS, Seller is the owner of that certain real property and improvements located at 455 South Ocean Boulevard, Delray Beach, Florida 33483, Palm Beach County Parcel ID 12-43-46-27-01-005-0010, consisting of approximately 1.87 acres (approximately 81,457 square feet) of oceanfront land improved with a 42-key, four-story boutique hotel known as "The Marisol — A Saltaire Hotel," together with a rooftop restaurant and bar known as "Terrazza," a spa facility of approximately 3,200 square feet, a 60-space surface parking lot, and direct private beach access (collectively, the "Property");
WHEREAS, Seller acquired the Property in 2018 for a purchase price of Twenty-Two Million Four Hundred Thousand and 00/100 Dollars ($22,400,000.00) and thereafter completed a comprehensive renovation of the Property at an aggregate cost of approximately Eight Million Six Hundred Thousand and 00/100 Dollars ($8,600,000.00) during the period from 2018 through 2019, bringing the total invested capital to approximately Thirty-One Million and 00/100 Dollars ($31,000,000.00);
WHEREAS, Saltaire Opportunity Fund I LLC, the indirect owner of Seller, has reached the end of its investment period, and Seller desires to sell, convey, transfer, assign, and deliver the Property and all associated personal property, intangible assets, permits, licenses, and contracts to a qualified purchaser in order to effect an orderly disposition of the Property;
WHEREAS, Buyer is PCG Delray Hotel LLC, a Florida limited liability company newly formed as a single-member limited liability company whose sole member is Pellegrino Capital Group LLC, a Florida limited liability company headquartered at 2400 Ponce de Leon Boulevard, Suite 1100, Coral Gables, Florida 33134 (the "Buyer's Parent"), and Buyer desires to acquire the Property and all associated personal property, intangible assets, permits, licenses, and contracts from Seller on the terms and subject to the conditions set forth herein;
WHEREAS, the Parties executed a non-binding Letter of Intent dated June 12, 2025 (the "LOI"), setting forth the general terms upon which they would negotiate this Agreement, and the Parties have now concluded such negotiations and desire to set forth herein the definitive terms and conditions of the purchase and sale of the Property;
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Earnest Money Deposit and other deposits to be made by Buyer hereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used herein but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement.
"Additional Deposit" means the sum of Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($875,000.00) to be deposited by Buyer with Escrow Agent in accordance with Section 3.3.
"Advance Bookings" means all guest reservations, bookings, and confirmed accommodations for dates on or after the Closing Date that have been made or accepted by or on behalf of Seller or the Hotel prior to the Closing Date, together with all deposits and prepayments received in connection therewith.
"Applicable Law" means all federal, state, and local statutes, laws, rules, regulations, ordinances, codes, orders, judgments, decrees, injunctions, and directives applicable to the Property or the ownership, use, occupancy, or operation thereof, including without limitation the City of Delray Beach Land Development Regulations, the Florida Building Code, the Florida Fire Prevention Code, all environmental laws and regulations, and the Americans with Disabilities Act.
"Assigned Contracts" means, collectively, the Hotel Contracts, the Booking Agreements, and the Permits and Licenses, but specifically excluding the Management Agreement.
"Balance" means Thirty-Two Million Three Hundred Seventy-Five Thousand and 00/100 Dollars ($32,375,000.00), being the Purchase Price less the Total Deposits, as such amount may be adjusted for prorations and adjustments at Closing as set forth in Article X.
"Bill of Sale" means the instrument in substantially the form attached hereto as Exhibit H, pursuant to which Seller shall convey the Personal Property to Buyer at Closing.
"Booking Agreements" means all contracts, agreements, and arrangements with online travel agencies, global distribution systems, booking platforms, and similar intermediaries for the marketing and booking of accommodations at the Hotel, as set forth on Exhibit D.
"Buyer" means PCG Delray Hotel LLC, a Florida limited liability company, or its permitted assigns under Section 15.4.
"Buyer's Counsel" means Calderwood & Harkness LLP, 1450 Brickell Avenue, Suite 3100, Miami, Florida 33131.
"Buyer's Parent" means Pellegrino Capital Group LLC, a Florida limited liability company, with its principal offices at 2400 Ponce de Leon Boulevard, Suite 1100, Coral Gables, Florida 33134.
"CC&R Declaration" means that certain Declaration of Covenants, Conditions, and Restrictions recorded at Official Records Book 18904, Page 455, of the Official Records of Palm Beach County, Florida, restricting the use of the Property to hotel and resort purposes and imposing such other covenants, conditions, and restrictions as set forth therein.
"Closing" means the consummation of the transactions contemplated by this Agreement, including the delivery of the Deed, the payment of the Balance, and the performance of all other obligations required to be performed at Closing.
"Closing Date" means September 15, 2025, or such earlier or later date as the Parties may agree in writing pursuant to Section 9.1.
"Deed" means the Special Warranty Deed in substantially the form attached hereto as Exhibit F, to be delivered by Seller at Closing, conveying the Real Property to Buyer subject only to the Permitted Exceptions.
"Due-Diligence Period" means the forty-five (45) day period commencing on the Effective Date and expiring at 5:00 p.m. Eastern Time on August 21, 2025.
"Earnest Money Deposit" means the sum of One Million Seven Hundred Fifty Thousand and 00/100 Dollars ($1,750,000.00) to be deposited by Buyer with Escrow Agent in accordance with Section 3.2.
"Effective Date" means July 7, 2025, the date first written above.
"Employees" means the sixty-four (64) full-time-equivalent employees employed at the Hotel as of the Effective Date, as identified on the Employee Schedule attached hereto as Exhibit E.
"Escrow Agent" means Palmetto Title & Escrow Company, located at 200 Clematis Street, Suite 400, West Palm Beach, Florida 33401, acting through its Title Officer, Denise Lafleur.
"Existing Mortgage" means that certain first-mortgage lien held by Seaview National Lending Corp. encumbering the Property, securing indebtedness in the original principal amount of Sixteen Million Eight Hundred Thousand and 00/100 Dollars ($16,800,000.00), with an approximate outstanding payoff balance as of the Closing Date of Fourteen Million Three Hundred Fifty Thousand and 00/100 Dollars ($14,350,000.00).
"FF&E" means all furniture, fixtures, and equipment located at, installed in, or used in connection with the Hotel, including without limitation guest room furnishings, lobby furnishings, restaurant and bar equipment and furnishings, spa equipment, front desk and back-of-house equipment, laundry equipment, kitchen equipment, audiovisual equipment, telecommunications equipment, computer hardware and point-of-sale systems, signage, artwork, window treatments, floor coverings, and all other items of tangible personal property of a similar nature.
"Flood Zone" means Zone AE (Special Flood Hazard Area), as designated by the Federal Emergency Management Agency ("FEMA") on Flood Insurance Rate Map ("FIRM") Panel No. 12099C0826J, effective date December 4, 2020.
"Hotel" or "The Marisol" means the 42-key boutique hotel operated on the Property under the name "The Marisol — A Saltaire Hotel," together with all associated amenities, facilities, and operations, including the rooftop restaurant and bar known as "Terrazza," the spa facility, and the parking lot.
"Hotel Contracts" means all vendor, service, maintenance, supply, equipment lease, and similar contracts and agreements relating to the operation, maintenance, or servicing of the Hotel, as set forth on Exhibit D.
"Improvements" means all buildings, structures, and improvements situated on the Land, including without limitation the 42-key, four-story boutique hotel building of approximately 38,600 gross square feet, the rooftop restaurant and bar known as "Terrazza," the spa facility of approximately 3,200 square feet, the 60-space surface parking lot, walkways, landscaping, fencing, beach access improvements, utility connections, and all other improvements of every kind and description.
"Intangible Property" means all right, title, and interest of Seller in and to all intangible assets relating to the Hotel, including without limitation trade names (including the name "The Marisol"), trademarks, service marks, goodwill, websites, domain names, social media accounts, telephone numbers, email addresses, customer lists, guest databases, reservation records, marketing materials, and all other intangible assets of every kind and description; provided, however, that the term "Intangible Property" shall expressly exclude the name "Saltaire" and all Saltaire-branded marks, logos, trade dress, and derivatives thereof.
"Land" means the 1.87-acre parcel of real property legally described in Exhibit A attached hereto and made a part hereof, situated at 455 South Ocean Boulevard, Delray Beach, Florida 33483, Palm Beach County Parcel ID 12-43-46-27-01-005-0010, together with all rights, privileges, easements, hereditaments, and appurtenances pertaining thereto, including without limitation all right, title, and interest of Seller in and to any land lying in the bed of any street, road, highway, or avenue in front of or adjoining the Land, and any strips or gores of land adjacent to the Land.
"Lender" means Meridian Coast Bank, N.A., a national banking association, with offices at 100 West Bay Street, Suite 1500, Jacksonville, Florida 32202.
"Loan" means the first-mortgage acquisition loan from Lender to Buyer in the principal amount of Twenty-Four Million Five Hundred Thousand and 00/100 Dollars ($24,500,000.00), representing a loan-to-value ratio of approximately seventy percent (70%).
"Management Agreement" means that certain Hotel Management Agreement dated as of October 1, 2018, by and between Seller and Saltaire Management Co. LLC, pursuant to which Saltaire Management Co. LLC manages and operates the Hotel, as amended from time to time.
"Permitted Exceptions" means those encumbrances, easements, restrictions, and other matters affecting title to the Property that are identified in Section 5.3 hereof and listed on Exhibit K, together with such other exceptions to title as Buyer may accept or approve in writing during the title review period.
"Permits and Licenses" means all permits, licenses, certificates, approvals, authorizations, and entitlements issued by any governmental authority in connection with the ownership, use, occupancy, or operation of the Property and the Hotel, including without limitation Florida DBPR Liquor License No. BEV-5812947, Palm Beach County Elevator Permit No. EL-2019-003417, certificates of occupancy, business tax receipts, health department permits, fire safety certificates, and all similar permits and approvals.
"Personal Property" means, collectively, the FF&E, inventories, supplies, linens, towels, bedding, food and beverage stocks, cleaning supplies, maintenance supplies, guest amenities, operating supplies, and all other tangible personal property located on or used in connection with the Property as of the Closing Date.
"Property" means, collectively, the Land, the Improvements, the Personal Property, the Intangible Property, the Assigned Contracts, and the Permits and Licenses, as more particularly described in Section 2.2.
"Purchase Price" means Thirty-Five Million and 00/100 Dollars ($35,000,000.00), as set forth in Section 3.1.
"Real Property" means, collectively, the Land and the Improvements.
"Seller" means Saltaire Hospitality Holdings LLC, a Delaware limited liability company.
"Seller's Counsel" means Hargrove, Kessler & Blaine LLP, 515 North Flagler Drive, Suite 800, West Palm Beach, Florida 33401.
"Title Commitment" means the commitment for title insurance to be issued by Palmetto Title & Escrow Company, as agent for Commonwealth Southern Title Insurance Company as underwriter, in accordance with Section 5.1.
"Title Objection Deadline" means August 7, 2025, being thirty (30) days after the Effective Date.
"Title Officer" means Denise Lafleur of Palmetto Title & Escrow Company.
"Title Underwriter" means Commonwealth Southern Title Insurance Company.
"Total Deposits" means Two Million Six Hundred Twenty-Five Thousand and 00/100 Dollars ($2,625,000.00), being the sum of the Earnest Money Deposit ($1,750,000.00) and the Additional Deposit ($875,000.00).
"Transition Period" means the sixty (60) day period commencing on September 15, 2025, and ending on November 14, 2025, as described in Article XIV.
Section 1.2 — Rules of Construction
The following rules of construction shall apply to this Agreement:
(a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not be deemed to constitute a part of this Agreement or to affect the meaning or interpretation of any provision hereof.
(b) Unless the context otherwise requires, words importing the singular number shall include the plural and vice versa, and words importing any gender shall include all other genders.
(c) References herein to "Articles," "Sections," "Exhibits," and "Schedules" are references to Articles, Sections, Exhibits, and Schedules of and to this Agreement, unless otherwise specified.
(d) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" whether or not such phrase is expressly stated.
(e) The words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision of this Agreement.
(f) References to any statute, rule, regulation, or ordinance shall include all amendments, modifications, replacements, and successor provisions thereto.
(g) This Agreement shall be construed in accordance with, and governed by, the laws of the State of Florida, without regard to principles of conflicts of law.
(h) Each Party and its counsel have reviewed and revised this Agreement, and the rule of construction that ambiguities are to be resolved against the drafting party shall not apply to the interpretation of this Agreement.
(i) All references to dollar amounts herein shall mean lawful currency of the United States of America.
(j) References to "business days" mean days other than Saturdays, Sundays, and days on which banks in the State of Florida are authorized or required to close. If the last day of any period provided for herein falls on a day that is not a business day, such period shall be extended to the next succeeding business day.
ARTICLE II — AGREEMENT OF SALE AND PURCHASE
Section 2.1 — Agreement to Sell and Purchase
Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell, convey, transfer, assign, and deliver to Buyer, and Buyer hereby agrees to purchase and accept from Seller, all of Seller's right, title, and interest in and to the Property, as more particularly described in Section 2.2 below, for the Purchase Price and upon the terms and conditions set forth herein. The Parties acknowledge and agree that the transaction contemplated by this Agreement is a direct asset acquisition and is not an acquisition of any ownership interest in Seller or any affiliate of Seller. Upon Closing, Buyer shall receive fee simple title to the Real Property, together with title to all Personal Property, Intangible Property, Assigned Contracts, and Permits and Licenses, subject only to the Permitted Exceptions and the other terms and conditions of this Agreement.
Section 2.2 — Property Description
The term "Property," as used herein, shall mean and include the following:
(a) Real Property. The Land, as legally described in Exhibit A attached hereto and incorporated herein by reference, situated at 455 South Ocean Boulevard, Delray Beach, Florida 33483, Palm Beach County Parcel ID: 12-43-46-27-01-005-0010, comprising approximately 1.87 acres (approximately 81,457 square feet), together with all easements, rights-of-way, privileges, hereditaments, and appurtenances benefiting or pertaining to the Land, and together with all of Seller's right, title, and interest in and to any land lying in the bed of any street, road, highway, or avenue, open or proposed, in front of or adjoining the Land, to the centerline thereof.
(b) Improvements. All buildings, structures, and other improvements located on the Land, including without limitation:
(i) the 42-key, four-story boutique hotel building of approximately 38,600 gross square feet, originally constructed in 1972 and substantially renovated during the period from 2018 through 2019 at an aggregate cost of approximately $8,600,000.00;
(ii) the rooftop restaurant and bar known as "Terrazza," located on the fourth floor and rooftop level of the hotel building;
(iii) the spa facility of approximately 3,200 square feet, located on the ground floor of the hotel building;
(iv) the 60-space surface parking lot located on the western portion of the Land;
(v) all site improvements, including walkways, landscaping, fencing, lighting, signage, beach access paths, retaining walls, drainage systems, and utility infrastructure; and
(vi) all other improvements of every kind and description located on the Land.
(c) Personal Property. All FF&E, inventories, supplies, linens, towels, bedding, food and beverage stocks, cleaning supplies, maintenance supplies, guest amenities, uniforms, operating supplies, and all other tangible personal property of every kind and description located on, installed in, or used in connection with the Property as of the Closing Date, as more particularly described in the Personal Property Schedule attached hereto as Exhibit C. The Personal Property shall be conveyed by Bill of Sale in the form attached hereto as Exhibit H.
(d) Intangible Property. All right, title, and interest of Seller in and to all intangible assets relating to the Hotel, including without limitation:
(i) the trade name "The Marisol" (but specifically excluding the name "Saltaire" and all derivatives, variations, and combinations thereof);
(ii) goodwill associated with the Hotel and its operations;
(iii) all websites, domain names, social media accounts, and email addresses relating to the Hotel;
(iv) all telephone numbers and facsimile numbers relating to the Hotel;
(v) all guest databases, customer lists, reservation records, mailing lists, and loyalty program data;
(vi) all marketing materials, promotional content, photographs, and advertising copy relating to the Hotel; and
(vii) all other intangible personal property of every kind relating to the Hotel.
(e) Assigned Contracts. All Hotel Contracts, Booking Agreements, and Permits and Licenses, as scheduled and identified on Exhibit D attached hereto and incorporated herein by reference, excluding the Management Agreement with Saltaire Management Co. LLC (which shall be terminated at Closing pursuant to Section 7.3). The Assigned Contracts shall be assigned to Buyer and assumed by Buyer pursuant to the Assignment and Assumption of Contracts in the form attached hereto as Exhibit I.
(f) Permits and Licenses. All permits, licenses, certificates, approvals, authorizations, and entitlements issued by any governmental authority in connection with the ownership, use, occupancy, or operation of the Property and the Hotel, to the extent transferable by Seller to Buyer, including without limitation:
(i) Florida Department of Business and Professional Regulation ("DBPR") Liquor License No. BEV-5812947 (subject to applicable governmental transfer and approval requirements under Chapter 561, Florida Statutes);
(ii) Palm Beach County Elevator Permit No. EL-2019-003417;
(iii) certificates of occupancy issued by the City of Delray Beach;
(iv) local business tax receipts and occupational licenses; and
(v) all other permits and licenses necessary for the continued operation of the Hotel as presently conducted.
Section 2.3 — Excluded Assets
Notwithstanding anything to the contrary contained herein, the following assets are expressly excluded from the Property and shall not be conveyed or transferred to Buyer hereunder:
(a) The name "Saltaire" and all Saltaire-branded marks, logos, trade dress, service marks, and all derivatives, variations, and combinations thereof. Seller and its affiliates shall retain all right, title, and interest in and to the "Saltaire" name and all associated intellectual property.
(b) The Management Agreement with Saltaire Management Co. LLC, which shall be terminated effective as of the Closing Date pursuant to Section 7.3 hereof.
(c) Seller's corporate and entity records, organizational documents, tax returns, financial statements, and other records that do not relate exclusively to the Property or the Hotel, including without limitation the books and records of Saltaire Hospitality Holdings LLC, Saltaire Opportunity Fund I LLC, and their respective affiliates (other than records relating specifically to the ownership, operation, and maintenance of the Property).
(d) Cash on hand and cash equivalents of Seller (other than guest deposits and prepaid reservation amounts to be credited to Buyer at Closing), accounts receivable of Seller accruing prior to the Closing Date, and Seller's bank accounts.
(e) Any insurance policies maintained by Seller with respect to the Property (it being understood that Buyer shall obtain its own insurance policies effective as of the Closing Date).
ARTICLE III — PURCHASE PRICE AND DEPOSITS
Section 3.1 — Purchase Price
The purchase price for the Property shall be Thirty-Five Million and 00/100 Dollars ($35,000,000.00) (the "Purchase Price"), payable as set forth in this Article III, subject to prorations and adjustments at Closing as set forth in Article X.
Section 3.2 — Earnest Money Deposit
Within three (3) business days after the Effective Date (i.e., on or before July 10, 2025), Buyer shall deposit the sum of One Million Seven Hundred Fifty Thousand and 00/100 Dollars ($1,750,000.00) (the "Earnest Money Deposit") with Escrow Agent by wire transfer of immediately available funds to the account designated by Escrow Agent. Escrow Agent shall, upon receipt of the Earnest Money Deposit, deposit such funds into an interest-bearing escrow account at Palmetto Title & Escrow Company. All interest earned on the Earnest Money Deposit shall be deemed a part of the Earnest Money Deposit and shall be credited and distributed to the Party entitled to receive the Earnest Money Deposit. If the transaction contemplated herein is consummated, all interest earned shall be credited to Buyer. The federal tax identification number of the Party receiving any interest earned shall be provided to Escrow Agent for purposes of tax reporting. Buyer's failure to timely deposit the Earnest Money Deposit shall constitute a default by Buyer under this Agreement, and Seller shall have the right, upon written notice to Buyer, to terminate this Agreement.
Section 3.3 — Additional Deposit
Within two (2) business days after the expiration of the Due-Diligence Period (i.e., on or before August 25, 2025), Buyer shall deposit an additional sum of Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($875,000.00) (the "Additional Deposit") with Escrow Agent by wire transfer of immediately available funds. Upon receipt by Escrow Agent, the Additional Deposit shall be combined with and held in the same interest-bearing escrow account as the Earnest Money Deposit. The Earnest Money Deposit and the Additional Deposit are collectively referred to herein as the "Total Deposits," which Total Deposits equal Two Million Six Hundred Twenty-Five Thousand and 00/100 Dollars ($2,625,000.00). The Additional Deposit shall be held and disbursed by Escrow Agent in accordance with the terms and conditions of this Agreement. Buyer's failure to timely deposit the Additional Deposit (provided that Buyer has not exercised its right to terminate this Agreement during the Due-Diligence Period) shall constitute a default by Buyer under this Agreement.
Section 3.4 — Non-Refundability of Deposits
The Total Deposits shall become non-refundable (i.e., shall "go hard") upon the expiration of the Due-Diligence Period at 5:00 p.m. Eastern Time on August 21, 2025, except in the event of any of the following:
(a) a default by Seller under this Agreement, in which event the Total Deposits shall be refunded to Buyer in accordance with Section 12.2;
(b) a failure of a condition to Buyer's obligation to close that is expressly set forth in Section 8.1 hereof (other than conditions that are within Buyer's sole control), in which event the Total Deposits shall be refunded to Buyer; or
(c) a termination of this Agreement expressly permitted under the provisions of this Agreement applicable to events occurring after the expiration of the Due-Diligence Period, including without limitation Sections 5.5(iii), 11.1(a), and such other Sections as may expressly provide for the return of the Total Deposits.
Prior to the expiration of the Due-Diligence Period, Buyer may terminate this Agreement for any reason or no reason whatsoever in Buyer's sole and absolute discretion in accordance with Section 4.4 and receive a full refund of the Earnest Money Deposit (less the $100.00 independent consideration described in Section 3.6 below).
Section 3.5 — Balance Due at Closing
At Closing, Buyer shall pay the balance of the Purchase Price in the amount of Thirty-Two Million Three Hundred Seventy-Five Thousand and 00/100 Dollars ($32,375,000.00) (being the Purchase Price of $35,000,000.00 less the Total Deposits of $2,625,000.00), subject to prorations and adjustments as set forth in Article X hereof (the "Balance"), by wire transfer of immediately available funds to Escrow Agent for disbursement in accordance with the settlement statement approved by the Parties. The Balance shall be funded from (i) Buyer equity in the approximate amount of Seven Million Eight Hundred Seventy-Five Thousand and 00/100 Dollars ($7,875,000.00), and (ii) the proceeds of the Loan from Meridian Coast Bank, N.A. in the amount of Twenty-Four Million Five Hundred Thousand and 00/100 Dollars ($24,500,000.00). Notwithstanding the foregoing, Buyer's obligation to close is not conditioned upon receipt of the Loan or any other financing, as more fully set forth in Section 8.4.
Section 3.6 — Independent Consideration
One Hundred and 00/100 Dollars ($100.00) of the Earnest Money Deposit (the "Independent Consideration") has been bargained for and agreed to as independent consideration for Seller's execution and delivery of this Agreement and for Seller's grant to Buyer of the Due-Diligence Period and the inspection, termination, and other rights afforded to Buyer under this Agreement. The Independent Consideration is non-refundable to Buyer under all circumstances, including without limitation termination of this Agreement by Buyer during the Due-Diligence Period or otherwise. At Closing, the Independent Consideration shall be credited toward the Purchase Price. The Parties acknowledge that the Independent Consideration is adequate and sufficient consideration to support the enforceability of this Agreement.
Section 3.7 — Escrow Provisions
(a) Escrow Agent's Duties. Escrow Agent shall hold and disburse the Total Deposits (and any interest earned thereon) in accordance with the terms and conditions of this Agreement and the Escrow Agreement/Escrow Instructions attached hereto as Exhibit L. Escrow Agent shall have only those duties and obligations as are expressly set forth in this Agreement and in Exhibit L, and shall have no implied duties, obligations, or responsibilities.
(b) Limitation of Liability. Escrow Agent shall not be liable for any act or omission taken in good faith and in accordance with this Agreement, except for acts or omissions constituting willful misconduct, gross negligence, or fraud. The Parties hereby agree, jointly and severally, to indemnify and hold harmless Escrow Agent from and against any and all claims, losses, costs, damages, and expenses (including reasonable attorneys' fees) arising out of or in connection with Escrow Agent's performance of its duties hereunder, except for claims arising from Escrow Agent's willful misconduct, gross negligence, or fraud.
(c) Disputes. In the event of any dispute between the Parties with respect to the disposition of the Total Deposits, Escrow Agent shall have the right, at its election, to (i) continue to hold the Total Deposits until the dispute is resolved by written agreement of the Parties or by final, non-appealable order of a court of competent jurisdiction, or (ii) deposit the Total Deposits with the clerk of the circuit court of Palm Beach County, Florida, by interpleader action or otherwise, and upon such deposit, Escrow Agent shall be relieved of all further liability and responsibility with respect to the Total Deposits.
(d) Tax Reporting. Escrow Agent shall be responsible for issuing IRS Form 1099-S or any other required tax reporting forms in connection with the Closing. Each Party shall provide Escrow Agent with its taxpayer identification number and such other information as may be required for tax reporting purposes. Seller's EIN is 82-4613278.
(e) Escrow Agent's Fees. Escrow Agent's fees for escrow services shall be shared equally by Seller and Buyer as set forth in Sections 10.6 and 10.7, unless otherwise provided.
ARTICLE IV — DUE-DILIGENCE PERIOD
Section 4.1 — Due-Diligence Period
Buyer shall have a period of forty-five (45) days commencing on the Effective Date and expiring at 5:00 p.m. Eastern Time on August 21, 2025 (the "Due-Diligence Period"), within which to conduct such inspections, investigations, studies, tests, analyses, and inquiries with respect to the Property as Buyer, in its sole and absolute discretion, deems necessary or appropriate, including without limitation review of all physical, environmental, structural, mechanical, electrical, plumbing, and life-safety conditions of the Property; review of all title, survey, zoning, and land-use matters; review of all financial, operational, and tax information relating to the Property and the Hotel; and such other inquiries and investigations as Buyer may elect to undertake. The Due-Diligence Period is Buyer's exclusive period for investigation, and Buyer's election to proceed beyond the Due-Diligence Period shall constitute Buyer's satisfaction with the results of its due diligence, subject only to the express conditions to Closing set forth in this Agreement.
Section 4.2 — Access and Inspections
(a) Access. From and after the Effective Date through the earlier of the Closing Date or termination of this Agreement, Seller shall provide Buyer and Buyer's agents, consultants, contractors, engineers, attorneys, accountants, lenders, and other representatives (collectively, "Buyer's Representatives") with reasonable access to the Property during normal business hours (between 8:00 a.m. and 6:00 p.m., Monday through Friday, and between 9:00 a.m. and 1:00 p.m. on Saturdays) upon not less than twenty-four (24) hours' prior written notice to Seller (which notice may be given by email). Access shall be provided without material disruption to the ongoing operations of the Hotel and its guests. Seller or Seller's designated representative shall have the right to accompany Buyer and Buyer's Representatives during any on-site inspections.
(b) Scope of Inspections. Buyer and Buyer's Representatives may conduct such physical inspections, tests, investigations, studies, and inquiries as Buyer deems necessary or desirable, including without limitation:
(i) A Phase I Environmental Site Assessment to be performed by Verdana Environmental Group LLC, with Dr. Anita Robles, P.E., serving as project manager, in accordance with ASTM Standard E1527-21;
(ii) An ALTA/NSPS Land Title Survey to be prepared by Crestline Surveying & Mapping, Inc., with George Tavares, PSM, as principal surveyor, in compliance with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys;
(iii) An appraisal of the Property to be performed by Saylor & Beckett Valuation Services LLC, with Martin Saylor, MAI, as lead appraiser, in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP);
(iv) Review of insurance and risk assessments, to be coordinated by Harborview Risk Advisors LLC;
(v) Audit and review of financial records, to be coordinated by Whitman Aldridge & Co. LLP;
(vi) Structural, mechanical, electrical, plumbing, and roofing inspections;
(vii) Review of all permits, licenses, certificates, and governmental approvals;
(viii) Interviews with Hotel management and employees (subject to Seller's prior consent, not to be unreasonably withheld);
(ix) Review of all Hotel Contracts, Booking Agreements, and vendor relationships; and
(x) Such other inspections, tests, and investigations as Buyer may elect.
(c) Insurance and Indemnification. Prior to entering the Property for any inspection or testing, Buyer shall deliver to Seller evidence that Buyer (or Buyer's Representatives, as applicable) maintains commercial general liability insurance with limits of not less than $2,000,000.00 per occurrence and $5,000,000.00 in the aggregate, naming Seller as an additional insured. Buyer shall indemnify, defend, and hold harmless Seller from and against any and all claims, losses, damages, costs, and expenses (including reasonable attorneys' fees) arising out of or resulting from any entry upon or inspection of the Property by Buyer or Buyer's Representatives, including without limitation any damage to the Property or injury to persons caused by such entry or inspection; provided, however, that such indemnification shall not extend to any pre-existing conditions at the Property that are merely discovered by Buyer during the course of its inspections. Buyer shall promptly restore the Property to substantially the same condition as existed prior to any testing or inspection. The obligations set forth in this Section 4.2(c) shall survive any termination of this Agreement.
(d) Phase II Restriction. Buyer shall not conduct any Phase II environmental testing, including without limitation any invasive testing, soil borings, groundwater sampling, or monitoring well installations, without Seller's prior written consent, which consent may be withheld in Seller's reasonable discretion. If Seller consents to any Phase II testing, Buyer shall provide Seller with a copy of the scope of work and all results.
Section 4.3 — Seller's Delivery of Due-Diligence Materials
Within five (5) business days after the Effective Date (i.e., on or before July 14, 2025), Seller shall deliver to Buyer (or make available to Buyer for inspection and copying at Seller's offices or through a secure electronic data room) copies of the following documents and materials, to the extent in Seller's possession or control:
(a) Seller's existing owner's title insurance policy or prior title commitment, together with legible copies of all instruments identified as exceptions therein;
(b) Any and all existing surveys of the Property;
(c) Any and all Phase I Environmental Site Assessments (and Phase II assessments, if any) previously prepared with respect to the Property;
(d) Real property tax bills for the tax years 2022, 2023, and 2024. The 2024 assessed value of the Property, as determined by the Palm Beach County Property Appraiser, is as follows: Land: $14,200,000.00; Improvements: $9,800,000.00; Total Assessed Value: $24,000,000.00. Annual real property taxes for the 2024 tax year were approximately $432,000.00;
(e) Hotel operating statements, profit-and-loss statements, and income/expense reports for the prior three (3) fiscal years (2022, 2023, and 2024) and year-to-date through June 30, 2025. For informational purposes, the trailing twelve-month ("TTM") operating metrics as of the most recent reporting period are as follows: TTM Revenue: approximately $9,800,000.00; TTM Net Operating Income ("NOI"): approximately $3,120,000.00; Average Daily Rate ("ADR"): approximately $485.00; Occupancy Rate: approximately 74%; Revenue Per Available Room ("RevPAR"): approximately $359.00;
(f) Capital expenditure records, including detailed documentation of the $8,600,000.00 renovation completed during 2018-2019, capital reserve account statements, and records of all capital expenditures during the prior three (3) years;
(g) Copies of all Hotel Contracts, service agreements, vendor agreements, maintenance agreements, supply agreements, and equipment lease agreements, together with any amendments or modifications thereto;
(h) Copies of all Booking Agreements with online travel agencies, global distribution systems, and booking platforms, together with advance reservation data and booking reports;
(i) A complete copy of the Management Agreement with Saltaire Management Co. LLC, together with all amendments, side letters, and related correspondence;
(j) A complete employee roster identifying all sixty-four (64) FTE employees, their positions, dates of hire, current compensation rates (salary or hourly wages), benefit information, and employment status, as set forth on Exhibit E;
(k) Copies of all Permits and Licenses, including without limitation Florida DBPR Liquor License No. BEV-5812947, Palm Beach County Elevator Permit No. EL-2019-003417, certificates of occupancy, business tax receipts, health department permits, and fire safety certificates;
(l) Copies of all property and casualty insurance policies maintained by Seller with respect to the Property, together with certificates of insurance and a five-year claims history. Seller's property and casualty insurance is currently placed through Harborview Risk Advisors LLC with Atlantic Keystone Insurance Company as the insurer;
(m) Zoning confirmation from the City of Delray Beach confirming the Property's zoning classification as CBD — Central Business District, together with any letters, determinations, or opinions regarding the Property's conformity with applicable zoning regulations, and any coastal construction control line documentation and setback requirements;
(n) FEMA Flood Zone documentation, including any Elevation Certificates, Letters of Map Amendment or Revision, and documentation confirming the Property's location within Flood Zone AE as depicted on FIRM Panel No. 12099C0826J (effective date December 4, 2020);
(o) Building plans, architectural drawings, as-built drawings, engineering reports, structural assessments, and all certificates of occupancy (original and any amendments or renewals);
(p) A summary of all pending or threatened litigation, claims, disputes, and administrative proceedings affecting the Property, the Hotel, or Seller's ability to consummate the transactions contemplated hereby;
(q) Copies of the CC&R Declaration recorded at OR Book 18904, Page 455, Official Records, Palm Beach County, Florida, and any other declarations, covenants, conditions, or restrictions affecting the Property;
(r) Copies of all easement agreements, access agreements, and shared-use agreements affecting the Property;
(s) Guest satisfaction scores, online reviews summaries, and any brand-compliance audit reports; and
(t) Any and all other documents, records, materials, and information relating to the Property or the Hotel that are in Seller's possession or control and that may be reasonably requested by Buyer from time to time during the Due-Diligence Period.
Seller shall promptly notify Buyer if Seller becomes aware of any additional documents or information that are responsive to Buyer's requests and shall supplement the due-diligence materials as soon as reasonably practicable.
Section 4.4 — Buyer's Right to Terminate During Due-Diligence Period
At any time prior to 5:00 p.m. Eastern Time on August 21, 2025 (the last day of the Due-Diligence Period), Buyer may, in its sole and absolute discretion, for any reason or for no reason whatsoever, elect to terminate this Agreement by delivering written notice of termination to Seller and Escrow Agent. Such notice may be delivered by email, overnight courier, or hand delivery in accordance with Section 15.3. Upon delivery of such termination notice:
(a) Escrow Agent shall promptly return the Earnest Money Deposit, together with all interest earned thereon, less the Independent Consideration of $100.00, to Buyer by wire transfer of immediately available funds to the account designated by Buyer;
(b) this Agreement shall be deemed terminated and of no further force or effect, except for those provisions that expressly survive termination, including without limitation Buyer's indemnification obligations under Section 4.2(c) and the confidentiality obligations set forth in Section 15.11; and
(c) neither Party shall have any further rights, obligations, or liabilities under this Agreement, except as expressly provided in the surviving provisions.
If Buyer does not deliver a termination notice prior to the expiration of the Due-Diligence Period, Buyer shall be deemed to have elected to proceed with the transaction, and the Total Deposits shall become non-refundable in accordance with Section 3.4.
ARTICLE V — TITLE AND SURVEY
Section 5.1 — Title Commitment
Within ten (10) days after the Effective Date, Seller shall cause Palmetto Title & Escrow Company (title officer: Denise Lafleur), acting as agent for Commonwealth Southern Title Insurance Company, to issue to Buyer a commitment for an ALTA Owner's Policy of Title Insurance (the "Title Commitment") in the amount of the Purchase Price ($35,000,000.00), together with legible copies of all instruments identified as exceptions therein. The Title Commitment shall set forth the condition of title to the Real Property and shall identify all liens, encumbrances, easements, restrictions, and other matters affecting title. Buyer shall also order, at Buyer's expense, a commitment for an ALTA Loan Policy of Title Insurance in the amount of Twenty-Four Million Five Hundred Thousand and 00/100 Dollars ($24,500,000.00) (simultaneous issue) for the benefit of Meridian Coast Bank, N.A., as lender. Seller shall promptly provide Title Officer with such information and documents as may be reasonably required for the issuance of the Title Commitment.
Section 5.2 — Survey
Buyer shall obtain, at Buyer's sole cost and expense, a current ALTA/NSPS Land Title Survey of the Property (the "Survey") prepared by Crestline Surveying & Mapping, Inc. (George Tavares, PSM), certified to Buyer (PCG Delray Hotel LLC), Buyer's Counsel (Calderwood & Harkness LLP), Lender (Meridian Coast Bank, N.A.), Escrow Agent (Palmetto Title & Escrow Company), and Title Underwriter (Commonwealth Southern Title Insurance Company). The Survey shall comply with the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, jointly established and adopted by ALTA and NSPS, and shall include such Table A optional survey items as may be directed by Buyer and Lender. The Survey shall depict all boundaries, easements, rights-of-way, encroachments, setback lines (including the coastal construction control line), improvements, access points, parking areas, utilities, flood zone boundaries, and such other matters as may be required by Buyer, Lender, and Title Underwriter. The estimated cost of the Survey is $18,500.00, which amount shall be for Buyer's account.
Section 5.3 — Permitted Exceptions
The following matters shall constitute "Permitted Exceptions" and shall not be grounds for objection to title by Buyer or termination of this Agreement by Buyer:
(a) Real-estate taxes and assessments for the year 2025 and subsequent years, which taxes are not yet due and payable, subject to proration at Closing in accordance with Section 10.2;
(b) The beach access easement in favor of the City of Delray Beach, Florida, recorded at Official Records Book 31245, Page 1822, of the Official Records of Palm Beach County, Florida, granting to the public the right of pedestrian access across a designated portion of the Property to the Atlantic Ocean beach;