CALDERWOOD & HARKNESS LLP
INTERNAL MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
701 Brickell Avenue, Suite 3100 Miami, FL 33131
September 18, 2025
TO: George Trujillo, Responsible Partner
FROM: Rafael Dominguez, Lead Associate
RE: Conflict Check Results and New-Matter Memorandum — Pellegrino Capital Group LLC — Intra-Family Wealth Transfer via Sale to Intentionally Defective Grantor Trust
MATTER NUMBER: 1027-00005
BILLING CODE: 78500.00014
STATUS: APPROVED
Approved: ________ George Trujillo, Responsible Partner
Date: September 18, 2025
I. PURPOSE
This memorandum documents the results of the firm's conflicts check and records the new-matter opening for the above-referenced engagement. It is prepared in accordance with Calderwood & Harkness LLP's internal Conflicts and New-Matter Policies, as set forth in the Firm Policy Manual (revised January 2025), and is submitted for review and final approval to George Trujillo in his capacity as responsible partner for this engagement.
Calderwood & Harkness LLP has been engaged by Pellegrino Capital Group LLC ("PCG") to structure, document, and close an intra-family wealth transfer of approximately $40,000,000 in hospitality membership interests from Salvatore A. Pellegrino to an intentionally defective grantor trust (the "2025 IDGT" or the "Trust") for the benefit of his three adult children — Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino — and their descendants. The transaction is designed to remove substantial appreciation in hospitality assets from Mr. Pellegrino's taxable estate while preserving the grantor trust's income-tax treatment, thereby maximizing the transfer-tax efficiency of the structure.
The engagement letter reflecting the terms of this representation was executed by Salvatore A. Pellegrino on behalf of PCG on September 18, 2025. This memorandum accompanies the engagement file and provides the conflicts clearance necessary to proceed with the opening of the matter and the commencement of substantive work.
All information contained herein is based on materials furnished by the client, publicly available records, and internal firm records. This memorandum is intended solely for internal use and is protected by the attorney-client privilege and the work-product doctrine.
II. CLIENT IDENTIFICATION
A. Engagement Client
Client Entity: Pellegrino Capital Group LLC ("PCG")
Entity Type: Florida Limited Liability Company, organized pursuant to the Florida Revised Limited Liability Company Act (Chapter 605, Florida Statutes) in 2006.
EIN: 65-1238074
Principal Office: 2400 Salzedo Street, Suite 1200, Coral Gables, FL 33134
Managing Member: Salvatore A. Pellegrino
Nature of Business: PCG serves as the Pellegrino family office, managing approximately $215 million in diversified assets across hospitality, commercial real estate, and alternative investments. The family office employs a staff of approximately fourteen professionals, including investment analysts, property managers, and administrative personnel. PCG's hospitality portfolio — which comprises the assets at issue in this engagement — accounts for a significant portion of the overall family wealth and includes boutique resort properties and food-and-beverage venues located along the Gulf Coast and Florida Keys.
Note Regarding Scope of Representation: The firm's client in this matter is PCG. The firm does not represent the independent trustee, any beneficiary in his or her individual capacity, or any third party in connection with this matter. This limitation is expressly set forth in the executed engagement letter and has been communicated to Salvatore A. Pellegrino in his capacity as managing member of PCG. Each beneficiary and third party has been advised of the firm's limited role and encouraged to seek independent legal counsel to the extent any such party deems it necessary or advisable.
B. Individual Principal — Grantor
Name: Salvatore A. Pellegrino
Age: 71
Citizenship / Residency: United States citizen; domiciled and resident in Coral Gables, Miami-Dade County, Florida.
Home Address: 610 Casuarina Concourse, Coral Gables, FL 33143
SSN (last four): XXX-XX-8217
Role in Transaction: Salvatore A. Pellegrino is the grantor of the 2025 IDGT, the sole managing member of PCG, and the seller of the hospitality membership interests that will be conveyed to the Trust. Mr. Pellegrino exercises managerial control over each of the hospitality portfolio entities through his managing-member authority within PCG. His role in the contemplated transaction is central: he will execute the trust instrument establishing the 2025 IDGT, fund the seed gift, and consummate the installment sale of the hospitality interests to the Trust in exchange for a secured promissory note.
Estimated Gross Estate: Approximately $285,000,000, inclusive of the hospitality assets, commercial real estate holdings, alternative-investment positions, liquid securities, personal real property, and other tangible and intangible assets. This estimate is based on the most recent internal valuation performed by the PCG investment team in the second quarter of 2025 and is consistent with the asset schedule attached to the engagement letter.
C. Grantor's Spouse
Name: Adriana M. Pellegrino
Age: 68
Residency: Coral Gables, Florida (same address as Salvatore A. Pellegrino: 610 Casuarina Concourse, Coral Gables, FL 33143).
Role: Adriana M. Pellegrino is the spouse of the grantor. Mrs. Pellegrino holds no direct ownership interest in any of the hospitality entities being transferred as part of this transaction. Mrs. Pellegrino is, however, the grantor of a spousal limited access trust (the "SLAT"), which was established in 2021 for the benefit of Salvatore and administered by Cornerstone Fiduciary Services, Inc. The SLAT will serve as the initial "seed" contributor concept for the 2025 IDGT, inasmuch as certain structural elements of the existing SLAT framework informed the drafting of the proposed 2025 IDGT instrument. The seed gift itself, however, will be made directly by Salvatore from his individual assets.
Note Regarding Property Law: Florida is a common-law property state. Community property principles are not at issue in this transaction. Mrs. Pellegrino's consent to the transfer is not legally required under Florida property law; however, as a matter of practice and consistent with the family's existing estate-planning protocols, Mrs. Pellegrino has been informed of the contemplated transaction and has acknowledged the same.
III. TRUST BENEFICIARIES
The following individuals are the named beneficiaries of The Salvatore A. Pellegrino 2025 Family Trust. Each beneficiary's descendants are contingent remainder beneficiaries on a per stirpes basis. The firm does not represent any beneficiary individually, and each beneficiary has been notified in writing of this limitation on the scope of representation. The beneficiaries have been encouraged to engage independent counsel if they wish to receive individualized legal advice regarding their interests under the Trust or the effect of the contemplated transaction.
Marco A. Pellegrino currently serves as Chief Operating Officer of Meridian Shores Hospitality LLC, one of the entities whose membership interests will be transferred as part of this transaction. His operational involvement with the resort property is an important consideration in the overall succession planning rationale underlying the wealth-transfer structure. Lucia Pellegrino-Vasquez serves as an independent board member of several PCG portfolio companies but does not hold a management role within any of the hospitality entities. Dante R. Pellegrino serves as Vice President of Acquisitions at PCG and is actively involved in the family office's real estate investment activities.
None of the named beneficiaries hold a direct ownership interest in any of the hospitality portfolio entities. All such interests are held by Salvatore A. Pellegrino through PCG, as further described in Section IV.B below.
IV. PARTIES SEARCHED IN CONFLICTS SYSTEM
The following parties were run through the firm's global conflicts database (the "ConflictShield" system) on September 18, 2025. The search covered current and former client records, adverse-party records, engagement-declined records, personnel records, and outside-activity disclosures. Variant-name searches, including common abbreviations, alternative spellings, known aliases, d/b/a names, and maiden names, were conducted for all individual and entity parties. The search was performed by Rafael Dominguez, Lead Associate, in accordance with the firm's Standard Operating Procedure for Conflicts Searches (SOP-CFS-2024-Rev.3).
A. Client-Side Parties
The following parties were searched as client-side parties:
1. Pellegrino Capital Group LLC (including all known variants: "PCG," "Pellegrino Capital," "Pellegrino Capital Group," and any registered d/b/a names on file with the Florida Division of Corporations).
2. Salvatore A. Pellegrino (including variants: "Sal Pellegrino," "S. Pellegrino," "Salvatore Pellegrino").
3. Adriana M. Pellegrino (including variants: "A. Pellegrino," "Adriana Pellegrino"; maiden name search conducted under "Adriana M. Ruiz" based on client-provided information).
4. Marco A. Pellegrino (including variants: "M. Pellegrino," "Marco Pellegrino").
5. Lucia Pellegrino-Vasquez (including variants: "Lucia Pellegrino," "L. Pellegrino-Vasquez," "Lucia P. Vasquez," "Lucia Vasquez").
6. Dante R. Pellegrino (including variants: "D. Pellegrino," "Dante Pellegrino").
7. The Salvatore A. Pellegrino 2025 Family Trust (to be formed; searched as a precautionary measure to identify any pre-existing entity with a similar name).
B. Hospitality Portfolio Entities (Subject Assets)
The following entities constitute the hospitality portfolio whose membership interests are the subject assets of the contemplated transaction. Each entity was searched as a party of interest in the conflicts system:
1. Meridian Shores Hospitality LLC
• Entity Type: Florida Limited Liability Company
• EIN: 59-4021867
• Property Description: 142-room boutique resort located at 4500 Gulf Shore Boulevard, Naples, FL 34102; the property includes a full-service spa, two restaurants, a private marina, and approximately 18,000 square feet of event and meeting space
• Ownership: Salvatore A. Pellegrino holds a 92% Class A membership interest through PCG; the remaining 8% Class B membership interests are held by a non-family minority investor (not a party to this transaction)
2. Costa Luma Resort Holdings LLC
• Entity Type: Florida Limited Liability Company
• EIN: 59-4173920
• Property Description: 96-room oceanfront property located at 81700 Overseas Highway, Islamorada, FL 33036; the resort features waterfront dining, a dive center, and a private beach
• Ownership: Salvatore A. Pellegrino holds a 100% membership interest through PCG
3. Azulia Beach Club LLC
• Entity Type: Florida Limited Liability Company
• EIN: 59-4285413
• Property Description: Upscale beachfront food-and-beverage and events venue located at 22 Baymont Drive, Clearwater Beach, FL 33767; the venue hosts private events and seasonal dining programs
• Ownership: Salvatore A. Pellegrino holds an 88% Class A membership interest through PCG; the remaining 12% Class B membership interests are held by a non-family minority investor (not a party to this transaction)
C. Independent Trustee
Entity: Cornerstone Fiduciary Services, Inc.
Entity Type: Licensed Florida trust company organized as a corporation under the laws of the State of Florida.
FL Trust Company License No.: FTC-2014-00287
Address: 200 West Forsyth Street, Suite 1500, Jacksonville, FL 32202
Principal Contact: Helena R. Matsuda, Senior Trust Officer
Role: Cornerstone Fiduciary Services, Inc. will serve as the independent trustee of the 2025 IDGT. In that capacity, Cornerstone will execute the trust instrument on behalf of the Trust, receive the seed gift, negotiate the terms of the promissory note and membership-interest purchase agreement on behalf of the Trust as purchaser, and exercise ongoing fiduciary discretion in the administration of the Trust's assets following the closing. Cornerstone currently serves as trustee of the existing Adriana M. Pellegrino SLAT and has an established fiduciary relationship with the Pellegrino family.
D. Trustee's Independent Counsel
Firm: Ridgeway & Callahan LLP
Entity Type: Limited Liability Partnership organized under the laws of the State of Florida.
Address: 50 North Laura Street, Suite 2200, Jacksonville, FL 32202
Lead Attorney: Patricia N. Callahan, Partner
Role: Ridgeway & Callahan LLP has been engaged by Cornerstone Fiduciary Services, Inc. to provide independent legal advice to the trustee in connection with the Trust's acquisition of the hospitality membership interests. Trustee's counsel will review the trust instrument, the membership-interest purchase agreement, the promissory note, the pledge and security agreement, and the appraisal report on behalf of Cornerstone. The engagement of trustee's independent counsel is a critical element of the transaction structure, as it ensures arm's-length negotiation and protects against challenges by the Internal Revenue Service based on the theory that the sale price does not reflect fair market value.
E. Valuation Firm / Qualified Appraiser
Firm: Hargrove & Lindquist LLP
Entity Type: Limited Liability Partnership organized under the laws of the State of Georgia.
Address: 3344 Peachtree Road NE, Suite 900, Atlanta, GA 30326
Principal Contact: Dennis W. Hargrove, ASA, CFA, Managing Director
Role: Hargrove & Lindquist LLP has been retained to prepare a qualified appraisal of the hospitality membership interests in accordance with the requirements of IRC § 170(f)(11) and Treasury Regulation § 1.170A-17 (applied by analogy for gift/estate tax valuation purposes). The appraisal will establish the fair market value of each membership interest, including the application of appropriate discounts for lack of marketability ("DLOM") and discounts for lack of control ("DLOC"). The valuation engagement letter is expected to be signed on or about October 6, 2025, with the final appraisal report expected to be delivered by November 3, 2025.
F. Family Accountants / Tax Preparers
Firm: Baxter Whitfield CPA Group, P.A.
Entity Type: Professional Association organized under the laws of the State of Florida.
Address: 150 Alhambra Circle, Suite 800, Coral Gables, FL 33134
Principal Contact: Sandra T. Whitfield, CPA, Managing Partner
Role: Baxter Whitfield CPA Group, P.A. serves as the Pellegrino family's tax accountants and return preparers. The firm has prepared the family's individual and entity tax returns for the past twelve years and is intimately familiar with the family's overall tax posture. In connection with this transaction, Baxter Whitfield will prepare Salvatore A. Pellegrino's 2025 Form 709 (United States Gift (and Generation-Skipping Transfer) Tax Return), which is due on April 15, 2026. Baxter Whitfield will also coordinate with Calderwood & Harkness on the income-tax reporting consequences of the grantor trust structure during the term of the promissory note.
G. Depository Bank
Bank: Prescott National Bank
Entity Type: National Banking Association, organized and existing under the laws of the United States, with its principal office in the State of Florida.
Address: 401 East Las Olas Boulevard, Fort Lauderdale, FL 33301
Principal Contact: Thomas J. Andersen, Senior Vice President, Private Banking Division
Role: Prescott National Bank will provide the arm's-length interest-rate benchmark for the promissory note (confirming the applicable federal rate published by the Internal Revenue Service for the month of closing). Additionally, Prescott National Bank will serve as the depository institution for the promissory note and will administer any escrow arrangements required in connection with the closing, including the receipt and disbursement of the seed gift and the maintenance of a reserve account for the Trust's initial interest-payment obligations.
V. CONFLICTS CHECK RESULTS
A. Search Methodology
Full-name and variant searches were conducted on all parties listed in Section IV of this memorandum through the firm's global conflicts database, ConflictShield, which encompasses the firm's entire network of domestic and international offices. The searches were performed on September 18, 2025, by Rafael Dominguez, Lead Associate, and reviewed by the firm's Conflicts Department under the supervision of Elaine M. Pokorny, Director of Conflicts and Risk Management.
The scope of the searches covered the following categories of records:
(i) Current client matters — all open and active matters across all practice groups and offices of the firm;
(ii) Former client matters — all matters closed within the past ten (10) years, consistent with the firm's record-retention policy and the requirements of the Florida Rules of Professional Conduct;
(iii) Adverse-party records — all parties identified as adverse or potentially adverse in any current or former matter;
(iv) Engagement-declined records — all prospective-client inquiries that were declined by the firm within the past ten (10) years, including records of any preliminary confidential information received in connection with such inquiries;
(v) Firm personnel records — current and former attorneys, of counsel, and professional staff, to identify any familial, financial, or other personal relationships with the searched parties; and
(vi) Outside-activity disclosures — outside board memberships, advisory roles, investment holdings, and other disclosed relationships of current firm attorneys and professional staff.
In addition to the electronic database search, a manual inquiry was circulated via the firm's internal conflicts notification system (e-mail distribution) to all partners and of counsel in the Miami, Tampa, Jacksonville, Atlanta, and New York offices, requesting that any attorney with knowledge of a prior or current relationship with any of the searched parties report the same within twenty-four (24) hours. No responsive notifications were received.
B. Results
No conflicts identified. No current or former representation of any party on the adverse side of this transaction was identified. No current representation of any party in a matter that could create a substantial relationship or materially adverse interest within the meaning of Rules 4-1.7 and 4-1.9 of the Florida Rules of Professional Conduct was identified.
Specifically, the search confirmed the following:
• The firm has not previously represented Cornerstone Fiduciary Services, Inc. in any capacity, whether as client, adverse party, or interested party.
• The firm has not previously represented Ridgeway & Callahan LLP or any of its partners or associates in any capacity.
• The firm has not previously represented Hargrove & Lindquist LLP or any of its partners or associates in any capacity.
• The firm has not previously represented Baxter Whitfield CPA Group, P.A. or any of its members in any capacity.
• The firm has not previously represented Prescott National Bank in any capacity.
• The firm has no prior or current engagement involving Pellegrino Capital Group LLC, any member of the Pellegrino family, or any of the hospitality portfolio entities identified in Section IV.B above.
The results of the conflicts search have been documented in the ConflictShield system under search reference number CS-2025-MIA-09182 and are available for review by the responsible partner and the Conflicts Department.
C. Potential Issues Considered and Resolved
Although no actual conflicts were identified, the following potential issues were considered and resolved prior to clearing this matter for opening:
1. Multiple Pellegrino Family Members. The contemplated transaction involves multiple members of the Pellegrino family in various capacities — Salvatore as grantor and seller, Adriana as the grantor's spouse, and Marco, Lucia, and Dante as trust beneficiaries. Under Florida Rule of Professional Conduct 4-1.7, a concurrent conflict of interest exists if there is a significant risk that the representation of a client will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.
This potential issue has been resolved as follows: The firm represents PCG as the entity client. Salvatore A. Pellegrino is the sole managing member and the grantor, and he has engaged the firm through PCG. The beneficiaries — Marco, Lucia, and Dante — are not individually represented by the firm. The engagement letter expressly limits the scope of representation to PCG and does not extend to the trustee, any beneficiary individually, or any third party. No individual representation of any family member has been undertaken, and no attorney-client relationship exists between the firm and any family member in his or her individual capacity. Accordingly, no waiver or informed-consent letter is required under Rule 4-1.7, because the firm's representation is limited to a single client (PCG) and no concurrent representation of multiple clients exists.
As an additional precaution, each beneficiary has been sent a written notice (via the engagement letter's Exhibit C — Notice to Non-Client Parties) advising that (a) the firm represents only PCG, (b) the firm does not represent any beneficiary individually, and (c) each beneficiary is encouraged to consult with independent counsel regarding his or her individual interests.
2. Independent Trustee Interests. Cornerstone Fiduciary Services, Inc., in its capacity as the independent trustee of the 2025 IDGT, will serve as the purchaser of the hospitality membership interests. The trustee and the grantor have potentially divergent interests with respect to the purchase price, the terms of the promissory note, and the adequacy of the collateral securing the note. This divergence is a necessary feature of the transaction structure and is essential to establishing the arm's-length character of the sale for federal transfer-tax purposes.
This potential issue has been resolved as follows: Cornerstone Fiduciary Services, Inc. has retained its own independent counsel — Ridgeway & Callahan LLP, with Patricia N. Callahan as lead attorney — to provide independent legal advice to the trustee in connection with the Trust's acquisition of the hospitality interests. The firm does not represent Cornerstone in any capacity, and no attorney-client relationship exists between the firm and Cornerstone or any of its officers or employees. The presence of trustee's independent counsel eliminates any concern that the firm's representation of the grantor's entity (PCG) on the selling side of the transaction could give rise to a conflict with the trustee-purchaser's interests.
No additional potential issues were identified, and no waivers, consents, or ethical screens are required in connection with this engagement.
VI. MATTER DESCRIPTION AND TRANSACTION SUMMARY
A. Transaction Overview
The contemplated transaction involves the sale of approximately $40,000,000 (Discounted fair market value) in hospitality membership interests from Salvatore A. Pellegrino (acting through PCG) to The Salvatore A. Pellegrino 2025 Family Trust, an intentionally defective grantor trust to be established under the laws of the State of Florida. The transaction is designed to transfer the future appreciation of the hospitality assets out of Salvatore's taxable estate while preserving the grantor's ability to bear the income-tax burden attributable to the Trust's assets during the term of the promissory note, thereby maximizing the after-tax value of the transferred wealth for the benefit of the next generation.
The key economic terms of the transaction are as follows:
Aggregate Gross Fair Market Value of Hospitality Interests:
Valuation discounts: A combined discount for lack of marketability ("DLOM") and discount for lack of control ("DLOC") of 20% will be applied to the aggregate gross fair market value, reducing the total purchase price to $40,000,000. The discount percentages will be supported by the qualified appraisal to be prepared by Hargrove & Lindquist LLP.
Purchase Price and Payment Terms: The purchase price of $40,000,000 will be payable via a secured promissory note bearing interest at 4.40% per annum, which represents the September 2025 mid-term applicable federal rate ("AFR") under IRC § 1274(d), compounded annually. The note will have a nine (9)-year term, maturing on December 15, 2034. During the term of the note, the Trust will make annual interest-only payments of $1,760,000 to Salvatore (or his estate), with the full principal balance of $40,000,000 due and payable as a balloon payment at maturity.
Seed Gift: The Trust will be funded initially with a $2,000,000 cash gift from Salvatore, which will establish the minimum 10% equity cushion necessary to support the bona fide sale characterization of the installment transaction under the principles set forth in Karmazin v. Commissioner, T.C. Memo 2003-41, and subsequent Tax Court authorities. The seed gift will consume $2,000,000 of Salvatore's remaining $7,850,000 lifetime gift and estate tax exemption, leaving a post-seed remaining exemption of $5,850,000.
Grantor Trust Status: The 2025 IDGT will be designed to qualify as a grantor trust for federal income-tax purposes under IRC §§ 671–679. Specifically, the trust instrument will include a provision granting Salvatore the power to substitute assets of equivalent value, rendering the Trust "defective" under IRC § 675(4)(C). This grantor trust treatment ensures that (a) the installment sale to the Trust is disregarded for income-tax purposes (i.e., no gain is recognized on the sale, and the interest payments are not includable in Salvatore's income), and (b) Salvatore bears the income-tax liability attributable to the Trust's income during the term of the note, effectively making tax-free gifts to the beneficiaries equal to the amount of income tax paid. Critically, despite the grantor trust treatment for income-tax purposes, the Trust will be designed to be excluded from Salvatore's gross estate for estate-tax purposes under IRC §§ 2036 and 2038, because the trust instrument will not retain any estate-tax-triggering powers.
Target Closing Date: December 15, 2025.
B. Scope of Calderwood & Harkness Engagement
The firm's engagement in connection with this matter encompasses the following services:
1. Transaction Structuring. Advising PCG and Salvatore A. Pellegrino on the overall design and structuring of the IDGT wealth-transfer transaction, including the selection of the appropriate grantor trust "defect," the determination of seed gift amount and equity cushion requirements, the establishment of promissory note terms, and the analysis of valuation discount positions.
2. Drafting and Negotiation of Transaction Documents. Preparing the following documents:
(a) Trust instrument for The Salvatore A. Pellegrino 2025 Family Trust;
(b) Seed gift assignment;
(c) Membership Interest Purchase Agreement ("MIPA") for the sale of the hospitality interests from PCG/Salvatore to the Trust;
(d) Secured promissory note in the principal amount of $40,000,000;
(e) Pledge and security agreement securing the promissory note with the transferred membership interests and other Trust assets;
(f) Assignments of membership interests for each of the three hospitality portfolio entities; and
(g) Amended and restated operating agreements for Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC, reflecting the change in ownership of the transferred interests.
3. Coordination with Third Parties. Coordinating with the valuation firm (Hargrove & Lindquist LLP), the family accountants (Baxter Whitfield CPA Group, P.A.), the independent trustee (Cornerstone Fiduciary Services, Inc.), and the trustee's independent counsel (Ridgeway & Callahan LLP / Patricia N. Callahan) throughout the transaction process.
4. Tax Analysis and Planning Memorandum. Preparing an internal tax analysis and planning memorandum addressing the income-tax, gift-tax, estate-tax, and generation-skipping transfer tax implications of the contemplated transaction, including the grantor trust "defect" analysis, the installment sale characterization, and the adequate-consideration defense.
5. Closing and Post-Closing Administration. Managing the closing process, including the execution and delivery of all transaction documents, the funding of the seed gift, the transfer of membership interests, and the recording of any required filings. Post-closing, the firm will coordinate with Baxter Whitfield CPA Group, P.A. on the preparation of Salvatore's 2025 Form 709 (United States Gift Tax Return), due April 15, 2026, and will provide ongoing advice as needed regarding the administration of the Trust and the servicing of the promissory note during its term.
VII. ENGAGEMENT TEAM
The following attorneys have been assigned to this engagement:
George Trujillo will serve as the responsible partner for this engagement and will maintain overall supervisory responsibility for the quality, timeliness, and client-relationship aspects of the representation. Kevin Ostrowski will serve as billing partner and will oversee the billing, invoicing, and fee-collection processes. Rafael Dominguez will serve as the lead associate responsible for the day-to-day management of the matter, including document drafting, coordination with third parties, and maintenance of the deal timetable. Cynthia Ho will support Mr. Dominguez in document preparation, due diligence, and closing logistics. Leonard Cross will serve as the firm's tax specialist on this engagement, providing substantive tax analysis and advice with respect to the grantor trust structure, the installment sale characterization, and the gift/estate tax reporting requirements.
Additional attorneys, paralegals, or professional staff may be assigned to this engagement as needed, subject to clearance through the firm's conflicts system and approval by the responsible partner.
VIII. BILLING ARRANGEMENTS
The billing arrangements for this engagement are as set forth in the executed engagement letter dated September 18, 2025, and are summarized below:
Fee Structure: Hourly billing. The firm will bill for all professional time expended on behalf of the client in connection with this matter at the applicable hourly rates set forth below, recorded in increments of one-tenth of an hour.
Partner Rate: $1,150 per hour
Associate Rate: $650 per hour
Estimated Total Fees: $185,000 – $225,000. This estimate is based on the anticipated scope of services described in Section VI.B above and assumes a transaction timeline consistent with the key dates set forth in Section IX below. The estimate is subject to adjustment in the event of material changes in scope, unanticipated complications, or delays caused by third parties. The engagement letter provides that the firm will notify the client promptly if it appears that fees are likely to exceed the high end of the estimated range.
Retainer Deposited: $50,000, received and deposited into the firm's client trust account (IOTA account) on September 18, 2025. The retainer will be applied against invoiced fees and costs as they are incurred, in accordance with the firm's standard billing procedures. The client has agreed to replenish the retainer to $50,000 upon written request from the firm if the balance falls below $10,000.
Billing Code: 78500.00014
Billing Client / Invoice Addressee:
Pellegrino Capital Group LLC 2400 Salzedo Street, Suite 1200 Coral Gables, FL 33134
Attention: Salvatore A. Pellegrino
Engagement Letter Date: September 18, 2025
Invoices will be issued on a monthly basis and are due and payable within thirty (30) days of the invoice date. The engagement letter provides for the accrual of interest on past-due balances at a rate of 1.5% per month (18% per annum), or the maximum rate permitted by applicable law, whichever is less.
IX. KEY DATES
The following table sets forth the anticipated timeline for the transaction, subject to adjustment as circumstances require:
The lead associate will maintain a detailed deal-management calendar and will distribute weekly status updates to the engagement team and the responsible partner commencing on September 25, 2025.
X. GOVERNING LAW
All transaction documents will be governed by and construed in accordance with the laws of the State of Florida, including the Florida Trust Code (Chapter 736, Florida Statutes), the Florida Revised Limited Liability Company Act (Chapter 605, Florida Statutes), and applicable federal tax law (including the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder). The trust instrument will specify Florida as the situs of the Trust and will designate the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, as the forum for any judicial proceedings relating to the Trust's administration.
XI. APPROVALS
A. Conflicts Clearance
Conflicts check conducted by: Rafael Dominguez, Lead Associate
Date of search: September 18, 2025
ConflictShield Search Reference No.: CS-2025-MIA-09182
Result: No conflicts identified. This matter is cleared for opening in accordance with the firm's Conflicts and New-Matter Policies.
Confirmed: ________ Rafael Dominguez, Lead Associate
Date: September 18, 2025
B. New-Matter Approval
Responsible Partner Approval:
APPROVED:
________________________________________
George Trujillo, Responsible Partner
Date: September 18, 2025
Billing Partner Acknowledgment:
ACKNOWLEDGED:
________________________________________
Kevin Ostrowski, Billing Partner
Date: September 18, 2025
C. Distribution
Copies of this memorandum shall be distributed as follows: