1027-00005 · Client 1027 · Engagement

engagement-letter-pcg.docx DOCUMENT Antitrust

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CALDERWOOD & HARKNESS LLP Attorneys at Law

701 Brickell Avenue, Suite 3100 Miami, Florida 33131

September 18, 2025

VIA HAND DELIVERY AND EMAIL

Pellegrino Capital Group LLC 2400 Salzedo Street, Suite 1200 Coral Gables, Florida 33134

Attention: Salvatore A. Pellegrino, Managing Member

Re: Engagement of Calderwood & Harkness LLP — Intra-Family Wealth Transfer of Hospitality Interests via Sale to Intentionally Defective Grantor Trust Matter Number: 1027-00005 Billing Code: 78500.00014

Dear Mr. Pellegrino:

1. Introduction and Purpose

Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to serve as legal counsel to Pellegrino Capital Group LLC ("PCG") in connection with the proposed intra-family wealth transfer transaction described below. We are pleased to have the opportunity to work with you and look forward to a productive engagement.

The purpose of this letter is to confirm the terms and conditions of the Firm's engagement to represent PCG in connection with the structuring, documentation, and implementation of an intra-family wealth transfer involving a portfolio of hospitality membership interests. Specifically, the proposed transaction contemplates the transfer of membership interests held, directly or indirectly, in a portfolio of hospitality-related limited liability companies, with an aggregate fair market value (after the application of applicable valuation discounts for lack of marketability and lack of control) of approximately Forty Million Dollars ($40,000,000), from Salvatore A. Pellegrino ("Salvatore" or the "Grantor"), through PCG, to a newly established intentionally defective grantor trust (the "2025 IDGT" or the "Trust"), to be known as The Salvatore A. Pellegrino 2025 Family Trust. The 2025 IDGT will be established for the primary benefit of Salvatore's three adult children — Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino — and their respective descendants, per stirpes. The transfer will be structured as a sale of the hospitality membership interests to the 2025 IDGT in exchange for a secured promissory note, preceded by an initial seed gift to capitalize the Trust.

The parties have identified a target closing date of December 15, 2025, to allow sufficient time for the completion of the qualified appraisal, the negotiation and execution of all transactional documents, and the coordination with the independent trustee and its counsel. This engagement is effective as of September 18, 2025, the date of this letter.

The terms and conditions set forth in this engagement letter, together with the Firm's Standard Terms of Engagement attached hereto as Exhibit A and incorporated herein by reference, constitute the entire agreement between the Firm and PCG with respect to this engagement. In the event of any conflict between the terms of this letter and the Standard Terms of Engagement, the terms of this letter shall control.

2. Identification of the Client

The Firm's client in this engagement is Pellegrino Capital Group LLC, a Florida limited liability company (EIN 65-1238074), with its principal office located at 2400 Salzedo Street, Suite 1200, Coral Gables, Florida 33134. All duties of loyalty, confidentiality, and competence arising under the applicable Rules of Professional Conduct run to PCG as the Firm's client in this matter.

Salvatore A. Pellegrino, in his capacity as Managing Member of PCG and as the Grantor of the 2025 IDGT, will serve as the primary point of contact for this engagement. All substantive communications, instructions, and approvals relating to the transaction will be directed to and received from Salvatore in that dual capacity, unless PCG designates an alternative contact person in writing.

It is important that all parties understand the scope of the Firm's representation. The Firm does not represent, and shall not be deemed to represent, any other person or entity in connection with this matter. Without limiting the generality of the foregoing, the Firm's representation expressly does not extend to any of the following:

(a) The Salvatore A. Pellegrino 2025 Family Trust (the "2025 IDGT"), once established, or any trustee, successor trustee, trust protector, or trust advisor thereof, in any capacity;

(b) Cornerstone Fiduciary Services, Inc., which has been selected to serve as the independent trustee of the 2025 IDGT and which has retained its own independent legal counsel, Ridgeway & Callahan LLP, of Jacksonville, Florida;

(c) Any individual beneficiary of the 2025 IDGT, including Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino, in his or her individual capacity;

(d) Adriana M. Pellegrino, Salvatore's spouse, in her individual capacity, including with respect to any spousal consent, community-property, or split-gift election matters;

(e) Any of the hospitality portfolio entities, including Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC (collectively, the "Hospitality Entities"), in their respective entity capacities;

(f) Any third-party advisor retained by or on behalf of PCG, Salvatore, or the Pellegrino family in connection with this transaction, including without limitation Hargrove & Lindquist LLP (valuation firm), Baxter Whitfield CPA Group, P.A. (family accountants), and Prescott National Bank (depository bank); or

(g) Any other family member, trust, partnership, corporation, or limited liability company affiliated with Salvatore or the Pellegrino family that is not expressly identified as a client in this letter.

Each of the foregoing persons and entities may have interests that differ from, or are potentially adverse to, those of PCG in connection with this transaction. The Firm strongly recommends that any party whose interests may diverge from those of PCG obtain independent legal counsel to advise such party regarding the transaction and its implications for such party's individual rights, obligations, and tax position. The Firm's engagement by PCG does not create an attorney-client relationship with, or impose any duty upon the Firm in favor of, any non-client, regardless of whether the Firm's work product may incidentally benefit such non-client.

3. Scope of Representation

The Firm's representation of PCG in this matter shall encompass the services described in Sections 3.1 through 3.6 below. The scope of the engagement is limited to the services described herein, and any expansion of the scope will require the mutual written agreement of PCG and the Firm. Services that are expressly excluded from the scope of this engagement are identified in Section 3.7 below.

3.1 Transaction Structuring and Tax Planning

The Firm will provide legal advice and counsel regarding the overall structuring of the sale of hospitality membership interests from Salvatore, through PCG, to the 2025 IDGT. This work will include a comprehensive analysis of the proposed transaction structure and the identification and evaluation of alternative approaches, if appropriate, to maximize the efficiency of the wealth transfer while minimizing estate, gift, and generation-skipping transfer tax exposure.

As a central component of this engagement, the Firm will prepare a confidential tax planning memorandum (the "Tax Memorandum") addressed to PCG and protected by the attorney-client privilege and work-product doctrine. The Tax Memorandum will address the following topics in detail:

(i) An analysis of the grantor-trust status of the 2025 IDGT under Internal Revenue Code ("IRC") Sections 671 through 679, including the specific "defect" mechanism to be incorporated in the Trust instrument;

(ii) The estate-tax, gift-tax, and generation-skipping transfer tax ("GSTT") implications of the proposed transaction, including the application of the Grantor's available applicable exclusion amount and GST exemption;

(iii) The income-tax neutrality of the sale of assets between the Grantor and the 2025 IDGT, as recognized under Rev. Rul. 85-13 and its progeny, and the implications for recognition (or non-recognition) of gain or loss;

(iv) Compliance with the applicable federal rate ("AFR") requirements under IRC Section 7872, based on the September 2025 mid-term AFR of 4.40% per annum (annual compounding), as published by the Internal Revenue Service;

(v) Analysis and support for the valuation discounts to be applied to the hospitality membership interests, including the combined twenty percent (20%) discount for lack of marketability ("DLOM") and lack of control ("DLOC"), and the relationship between the discount methodology and applicable IRS guidance and case law;

(vi) Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) reporting obligations arising from the seed gift and the sale transaction, including adequate-disclosure requirements under Treasury Regulation Section 301.6501(c)-1(f); and

(vii) Such other tax issues as may arise during the course of the engagement and fall within the scope of representation described herein.

In addition, the Firm will coordinate with Baxter Whitfield CPA Group, P.A. (Sandra T. Whitfield, CPA, Managing Partner) regarding the preparation of Salvatore's Form 709 for the 2025 tax year and other tax return matters, to the extent such coordination is necessary to ensure consistency between the transaction documentation and the family's tax reporting positions. For the avoidance of doubt, the Firm will not itself prepare any tax returns; that responsibility rests with the family's accountants.

3.2 Trust Instrument Drafting

The Firm will draft and negotiate the irrevocable trust agreement establishing The Salvatore A. Pellegrino 2025 Family Trust under the laws of the State of Florida. The Trust instrument will be designed to accomplish the following objectives, among others:

(a) Establishment of the Trust as an intentionally defective grantor trust for federal income-tax purposes through the incorporation of a grantor-trust "defect" provision under IRC Section 675(4)(C), specifically a power retained by Salvatore, exercisable in a non-fiduciary capacity and without the approval or consent of any person in a fiduciary capacity, to reacquire the trust corpus by substituting other property of an equivalent value;

(b) Provision for the administration and distribution of Trust assets for the benefit of Salvatore's three adult children and their descendants, in accordance with the Grantor's dispositive intent as communicated to the Firm;

(c) Appointment of Cornerstone Fiduciary Services, Inc. as the initial independent trustee, with provisions for successor trustee appointment, removal, and replacement;

(d) Inclusion of appropriate spendthrift provisions, trustee powers, and administrative provisions consistent with Florida law and the Grantor's objectives; and

(e) Incorporation of such other provisions as may be appropriate in light of the transaction structure and the Grantor's estate plan.

The Firm will circulate drafts of the Trust instrument to PCG and, with PCG's authorization, to the independent trustee and its counsel for review and comment. The Firm will negotiate and incorporate reasonable comments from the independent trustee's counsel, subject to PCG's approval.

3.3 Transaction Documentation

The Firm will prepare, negotiate, and finalize the following transactional documents in connection with the proposed wealth transfer:

(a) Seed Gift Assignment Agreement — documenting the initial cash contribution of Two Million Dollars ($2,000,000) from Salvatore to the 2025 IDGT, which will serve as the Trust's initial equity capitalization (representing approximately five percent (5%) of the aggregate purchase price of the hospitality membership interests);

(b) Membership Interest Purchase Agreement (the "MIPA") — documenting the sale of membership interests in Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC from the Grantor (through PCG) to the 2025 IDGT at an aggregate purchase price of Forty Million Dollars ($40,000,000), based on the qualified appraisal to be prepared by Hargrove & Lindquist LLP, and incorporating customary representations, warranties, covenants, and closing conditions;

(c) Secured Promissory Note — in the principal amount of Forty Million Dollars ($40,000,000), bearing interest at the rate of 4.40% per annum (equal to the September 2025 mid-term AFR, annual compounding), with a nine-year (9-year) term commencing on the closing date, providing for interest-only payments during the term and a balloon payment of the entire outstanding principal balance at maturity on December 15, 2034;

(d) Pledge and Security Agreement — granting the Grantor (or PCG, as applicable) a first-priority perfected security interest in the membership interests transferred to the 2025 IDGT, together with an assignment of all distributions and other payments receivable by the Trust from the Hospitality Entities, to secure the Trust's obligations under the Secured Promissory Note;

(e) Assignments of Membership Interests — short-form assignment documents for each of the three Hospitality Entities (Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC), effectuating the transfer of membership interests from the Grantor to the 2025 IDGT; and

(f) Amended and Restated Operating Agreements — for each of the Hospitality Entities, reflecting the admission of the 2025 IDGT as the new holder of the membership interests previously held by the Grantor, and incorporating such other amendments as may be appropriate in light of the transaction.

All transactional documents will be circulated in draft form to PCG for review and approval prior to distribution to the independent trustee and its counsel.

3.4 Valuation Coordination

The Firm will coordinate with Hargrove & Lindquist LLP (Dennis W. Hargrove, ASA, CFA, Managing Director, Atlanta, Georgia) regarding the preparation of the qualified appraisal of the hospitality membership interests. This coordination will include, without limitation:

(a) Providing the valuation firm with relevant legal documentation, including the current operating agreements and organizational documents of the Hospitality Entities, to inform the appraisal analysis;

(b) Reviewing and commenting on the appraisal methodology employed by Hargrove & Lindquist LLP, including the income approach, market approach, and/or asset-based approach, as applicable;

(c) Reviewing and advising PCG regarding the appropriateness and supportability of the twenty percent (20%) combined discount for lack of marketability ("DLOM") and lack of control ("DLOC") proposed by the valuation firm, in light of applicable IRS guidance, Tax Court precedent, and current market practice; and

(d) Ensuring that the appraisal report meets the requirements for a "qualified appraisal" under IRC Section 170(f)(11)(E) and Treasury Regulation Section 1.170A-13(c), to the extent applicable for adequate-disclosure purposes on Form 709.

The Firm does not itself provide valuation or appraisal services, and PCG acknowledges that all valuation opinions and conclusions are the sole responsibility of Hargrove & Lindquist LLP. The Firm's role is limited to legal review, coordination, and counsel regarding the tax-law implications of the valuation methodology and conclusions.

3.5 Trustee and Third-Party Coordination

The Firm will coordinate with Cornerstone Fiduciary Services, Inc. (Helena R. Matsuda, Senior Trust Officer, Jacksonville, Florida) and its independent counsel, Ridgeway & Callahan LLP (Patricia N. Callahan, Partner, Jacksonville, Florida), regarding the independent trustee's review, due diligence, and acceptance of the transaction documents and the overall transaction structure. This coordination will include the following:

(a) Distribution of drafts of the Trust instrument, MIPA, Secured Promissory Note, Pledge and Security Agreement, and other transaction documents to the independent trustee and its counsel for review and comment;

(b) Negotiation and resolution of comments received from the independent trustee's counsel, subject to PCG's approval of all material terms;

(c) Preparation of a letter addressed to the independent trustee, on behalf of PCG, summarizing the transaction structure, the tax analysis underlying the sale to the 2025 IDGT, and the basis for the Firm's conclusion that the sale constitutes an arm's-length transaction for fair market value, to assist the independent trustee in its fiduciary evaluation of the transaction; and

(d) Coordination with the independent trustee regarding execution of the transaction documents and closing logistics.

3.6 Closing and Post-Closing

The Firm will prepare a comprehensive closing checklist identifying all documents, deliverables, and conditions required to be satisfied on or prior to the target closing date of December 15, 2025. The Firm will coordinate the closing process, including the assembly and execution of all closing documents. In connection with the closing and post-closing matters, the Firm will prepare or coordinate the preparation of the following:

(a) UCC-1 financing statements to be filed with the Florida Secured Transaction Registry (Florida Department of State, Division of Corporations) to perfect the security interest granted under the Pledge and Security Agreement;

(b) Member consents and resolutions for each of the Hospitality Entities, as required under the respective operating agreements, approving the transfer of membership interests and the admission of the 2025 IDGT as a member;

(c) Officer and/or manager certificates for PCG and the Hospitality Entities, as applicable, certifying the authority of the signatories and the accuracy of organizational documents;

(d) A closing binder containing fully executed originals or copies of all transaction documents, to be distributed to PCG and the independent trustee following the closing; and

(e) Post-closing coordination with Baxter Whitfield CPA Group, P.A. (Sandra T. Whitfield, CPA, Managing Partner) regarding the preparation and filing of Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) for the 2025 tax year, which will be due on or before April 15, 2026 (subject to any extension of the Grantor's individual income tax return filing deadline).

3.7 Exclusions from Scope

The following matters are expressly excluded from the scope of this engagement. If PCG requires assistance with any of the following matters, a separate engagement letter and fee arrangement will be required:

(a) Representation of PCG, Salvatore, the 2025 IDGT, or any other person or entity in connection with any audit, examination, or controversy proceeding initiated by the Internal Revenue Service, the Florida Department of Revenue, or any other taxing authority;

(b) Real property title matters, zoning, land use, permitting, or environmental compliance matters relating to any real property owned, leased, or operated by the Hospitality Entities or any of their affiliates;

(c) Securities law advice, including advice under the Securities Act of 1933, the Securities Exchange Act of 1934, or any state "blue sky" laws, with respect to the membership interests or any other securities;

(d) Any litigation, arbitration, mediation, or other dispute resolution proceeding, whether between family members, between PCG and any third party, or otherwise;

(e) Legal advice to any party other than PCG, including without limitation any individual beneficiary of the 2025 IDGT, the independent trustee, or any of the Hospitality Entities; and

(f) Preparation of federal or state income tax returns, estate tax returns (other than coordination regarding Form 709 as described in Section 3.6), or any other tax returns or reports for Salvatore, Adriana M. Pellegrino, PCG, the 2025 IDGT, or any of the Hospitality Entities.

4. Engagement Team

The following attorneys have been assigned to this matter and will be primarily responsible for the delivery of the legal services described in Section 3 above:

George Trujillo will serve as the Responsible Partner for this engagement and will function as the primary relationship partner and senior supervisory attorney. Mr. Trujillo will be your principal point of contact for substantive matters relating to the transaction, will oversee the work of the engagement team, and will be responsible for the overall quality and coordination of the Firm's legal services.

Kevin Ostrowski will serve as the Billing Partner for this engagement and will be responsible for billing administration, invoice preparation, and all fee-related inquiries. Mr. Ostrowski may be contacted directly with any questions regarding billing, payment, or retainer matters.

Rafael Dominguez will serve as the Lead Associate on the transaction and will have day-to-day responsibility for the drafting and negotiation of the transactional documents, coordination with third parties, and management of the closing process. Cynthia Ho will assist Mr. Dominguez with document preparation, due diligence, and ancillary closing deliverables.

Leonard Cross will serve as the Specialist Partner providing estate-planning, gift-tax, and trust-related tax advice. Mr. Cross will prepare the confidential Tax Memorandum described in Section 3.1 and will advise on all tax-sensitive aspects of the transaction structure, including grantor-trust compliance, AFR requirements, valuation discount issues, and Form 709 reporting.

From time to time, other attorneys, paralegals, or professional staff of the Firm may be called upon to assist with the engagement as needed. The Firm will notify PCG of any material changes to the composition of the engagement team, including any change in the Responsible Partner or the Lead Associate.

5. Fees and Billing

5.1 Hourly Rates

The Firm's services in this engagement will be billed on an hourly basis at the Firm's current standard hourly rates for the attorneys and professional staff assigned to the matter. The current hourly rates for the attorneys on this engagement team are as follows:

Partners (George Trujillo, Kevin Ostrowski, Leonard Cross): $1,150 per hour

Associates (Rafael Dominguez, Cynthia Ho): $650 per hour

Paralegal and other professional staff time, if applicable, will be billed at rates ranging from $275 to $450 per hour, depending on the experience level and function of the professional staff member involved.

These hourly rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each calendar year. The Firm will provide PCG with advance written notice of any changes to the applicable hourly rates before such changes take effect. Any rate adjustment will apply only to services performed on or after the effective date of the adjustment.

5.2 Fee Estimate

Based on the Firm's current understanding of the anticipated scope of work described in Section 3, including the complexity of the transaction structure, the number of transactional documents to be prepared and negotiated, and the expected level of coordination with the independent trustee and its counsel, the valuation firm, and the family's accountants, the Firm estimates that total legal fees for this engagement will be in the range of $185,000 to $225,000.

This estimate is provided solely for PCG's internal planning and budgeting purposes and does not constitute a cap, a maximum fee, or a fixed-fee arrangement. Actual fees will depend upon a number of factors, many of which are not within the Firm's control, including without limitation the complexity and duration of the matter, the responsiveness and cooperativeness of third parties (including the independent trustee, its counsel, and the valuation firm), any changes in the scope of the engagement, the extent of negotiations required to finalize the transaction documents, and any unforeseen legal or factual issues that may arise during the course of the representation.

If, at any point during the engagement, circumstances suggest that actual fees are likely to materially exceed the upper end of this estimate, the Firm will notify PCG promptly and discuss the reasons for the anticipated increase and any steps that may be taken to manage costs.

5.3 Retainer. PCG has deposited a retainer in the amount of Fifty Thousand Dollars ($50,000) with the Firm. This retainer is being held in the Firm's client trust account (IOTA account) at Prescott National Bank in accordance with the requirements of Rule 5-1.1 of the Rules Regulating The Florida Bar.

The retainer will be applied against legal fees and disbursements as they are incurred and invoiced. Each monthly invoice will reflect the application of retainer funds, if applicable, and the remaining retainer balance. PCG agrees to replenish the retainer to Fifty Thousand Dollars ($50,000) within ten (10) business days of the Firm's written request if the retainer balance falls below Fifteen Thousand Dollars ($15,000) at any time during the engagement.

Upon the conclusion of the engagement or the termination thereof, any unused portion of the retainer remaining after the application of all outstanding fees and disbursements will be refunded to PCG promptly.

5.4 Disbursements and Expenses

In addition to legal fees for professional time, the Firm will bill PCG for reasonable out-of-pocket disbursements and expenses incurred in connection with this engagement. Such disbursements may include, without limitation:

• Filing fees (including UCC filing fees, state recording fees, and any other governmental charges);

• Courier, express mail, and overnight delivery charges;

• Travel expenses (airfare, ground transportation, hotel, and meals) incurred in connection with meetings, closings, or other engagement-related travel, subject to the Firm's standard travel policies;

• Document reproduction, scanning, and binding charges;

• Electronic legal research charges (Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and similar services); and

• Long-distance telephone and videoconference charges, if applicable.

Third-party professional fees and costs — including, by way of example, appraisal fees payable to Hargrove & Lindquist LLP, trustee fees payable to Cornerstone Fiduciary Services, Inc., and accounting fees payable to Baxter Whitfield CPA Group, P.A. — are the direct responsibility of PCG and are not included in the Firm's fee estimate or invoiced through the Firm. PCG will engage and pay such third-party providers directly under separate arrangements.

5.5 Billing Procedures

The Firm will render monthly invoices describing, in reasonable detail, the legal services performed and the disbursements incurred during the preceding billing period. Each invoice will include a narrative description of the work performed, the name and hourly rate of each timekeeper, the number of hours billed by each timekeeper, and an itemization of disbursements. All invoices will reference Matter Number 1027-00005 and Billing Code 78500.00014 for PCG's internal tracking purposes.

Payment of each invoice is due within thirty (30) days of the invoice date. Invoices may be paid by check, wire transfer, or ACH payment to the account specified on the invoice. Payments should reference the Firm's matter number to ensure proper application of funds.

The Firm reserves the right to suspend work on this engagement or to withdraw from the representation if any invoice remains unpaid for more than sixty (60) days after the invoice date, subject to the Firm's obligations under the applicable Rules of Professional Conduct and the provisions of Section 9 below regarding termination of the engagement.

6. Conflict of Interest Disclosures

The Firm has conducted a comprehensive conflicts check in accordance with its internal policies and procedures and the requirements of the Rules of Professional Conduct applicable to the Firm's attorneys in each jurisdiction in which they are admitted to practice.

Based on the information currently available to the Firm, including the identities of the parties, entities, and individuals described in this engagement letter, the Firm has identified no conflicts of interest that would preclude the Firm from undertaking this representation under the applicable Rules of Professional Conduct.

Specifically, the Firm has confirmed that it does not currently represent, and has not within the past two (2) years represented, Cornerstone Fiduciary Services, Inc., Ridgeway & Callahan LLP, Hargrove & Lindquist LLP, Baxter Whitfield CPA Group, P.A., or Prescott National Bank in any matter adverse to PCG or in any matter substantially related to this transaction.

PCG acknowledges that Calderwood & Harkness LLP is a large law firm with offices in multiple jurisdictions and that the Firm represents numerous clients across a wide range of industries and practice areas in diverse matters. It is possible that the Firm currently represents, or may in the future represent, other clients in matters unrelated to this engagement where the interests of such clients may differ from those of PCG. By executing this engagement letter, PCG acknowledges and consents to the Firm's representation of other clients in matters unrelated to this engagement, provided that such representation does not involve a direct adversity to PCG in this specific matter or in any matter substantially related to this engagement. This advance consent applies only to unrelated matters and does not constitute a waiver of PCG's right to object to any representation that would create a direct conflict of interest in this engagement or a substantially related matter.

If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify PCG and discuss appropriate steps to address the conflict. Such steps may include seeking informed written consent from all affected parties, implementing an ethical screen within the Firm, or, if the conflict cannot be adequately resolved, withdrawing from the representation in accordance with Section 9 below.

7. Confidentiality and Privilege

All communications between PCG (including Salvatore A. Pellegrino in his capacity as Managing Member and Grantor) and the Firm in connection with this engagement are intended to be protected by the attorney-client privilege and/or the work-product doctrine to the fullest extent permitted by applicable law. The Firm will take reasonable steps to preserve the privileged and confidential nature of all such communications.

The Firm will maintain the confidentiality of all information provided by PCG in connection with this engagement, whether oral, written, or in electronic form, and will not disclose such information to any third party except as authorized by PCG or as required by applicable law, court order, or the Rules of Professional Conduct. The Firm's confidentiality obligations extend to all nonpublic information received from PCG, including financial information, family information, business strategies, entity structures, and the terms and conditions of the proposed transaction.

PCG acknowledges that the effective execution of this engagement will require certain information to be shared with third parties in the ordinary course, including without limitation:

(a) Cornerstone Fiduciary Services, Inc. and its counsel, Ridgeway & Callahan LLP, in connection with the independent trustee's review and acceptance of the transaction;

(b) Hargrove & Lindquist LLP, in connection with the preparation of the qualified appraisal;

(d) Prescott National Bank, in connection with the retainer deposit, wire transfers, and any depository matters related to the transaction.

Such disclosures will be made only with PCG's prior authorization (which authorization may be general or specific, as circumstances require) and, where appropriate, will be subject to common-interest agreements, joint-defense agreements, or other privilege-preserving arrangements designed to maintain the confidentiality and privileged nature of the information shared.

8. Document Retention

Upon the conclusion of this engagement, the Firm will retain the client file — including copies of all correspondence, memoranda, work papers, drafts, and final documents — in accordance with the Firm's document retention policy. Under the Firm's current policy, client files are retained for a period of ten (10) years from the date the matter is formally closed in the Firm's records management system.

Original documents belonging to PCG that are in the Firm's possession will be returned to PCG upon written request at any time during or after the engagement, at PCG's expense for any shipping or reproduction costs.

PCG is strongly encouraged to retain its own copies of all important documents generated or received in connection with this engagement, including the executed Trust instrument, transaction documents, the Tax Memorandum, the qualified appraisal, and all closing deliverables. Following the expiration of the Firm's document retention period, the Firm may destroy or dispose of the client file without further notice to PCG, and the Firm shall have no obligation to retain any documents beyond the stated retention period.

9. Termination of Engagement

Either PCG or the Firm may terminate this engagement at any time by providing written notice to the other party. No reason need be stated for termination by PCG. The Firm's right to withdraw is subject to the requirements and limitations of the applicable Rules of Professional Conduct and any applicable court rules.

In the event of termination, whether by PCG or by the Firm:

(a) PCG will remain responsible for the payment of all fees and disbursements incurred through the effective date of termination, and the Firm will render a final invoice for all unbilled time and expenses;

(b) The Firm will take such steps as are reasonably necessary to protect PCG's interests, including providing reasonable advance notice of withdrawal (where the Firm initiates the termination), allowing PCG a reasonable period of time to engage successor counsel, and cooperating with the transition of the matter;

(c) Upon PCG's written request, the Firm will transfer the client file, including all work product, to PCG or to successor counsel designated by PCG, subject to the Firm's right to retain copies for its own records and to assert any applicable lien for unpaid fees; and

(d) The retainer held by the Firm will be applied to any outstanding balance for fees and disbursements, and any excess retainer funds will be refunded to PCG promptly following the rendering of the final invoice and the satisfaction of all outstanding obligations.

Termination of the engagement shall not affect the Firm's continuing obligations of confidentiality to PCG, which survive termination indefinitely, nor shall it relieve PCG of its obligation to pay for services rendered and disbursements incurred prior to termination.

10. Limitation of Liability

The legal advice and counsel provided by the Firm in connection with this engagement is based on the facts and circumstances as communicated to the Firm by PCG and on the laws, regulations, rulings, and judicial precedents in effect at the time such advice is rendered. The Firm does not guarantee any particular result or outcome in connection with this engagement, including without limitation any particular tax treatment, IRS acceptance of the transaction structure, or valuation conclusion.

PCG acknowledges and understands that the federal estate, gift, and generation-skipping transfer tax laws are subject to change at any time as a result of legislative action by Congress, regulatory action by the U.S. Department of the Treasury or the Internal Revenue Service, or judicial decisions. In particular, and without limitation, the Firm notes that:

(a) The applicable estate and gift-tax exemption amounts (currently $13,990,000 per individual for 2025) are scheduled to be reduced significantly after December 31, 2025, under the sunset provisions of the Tax Cuts and Jobs Act of 2017, unless Congress acts to extend or modify the current exemption levels;

(b) The IRS has periodically challenged the use and magnitude of valuation discounts for lack of marketability and lack of control in connection with intra-family transfers, and future regulatory or legislative action could restrict or eliminate the availability of such discounts; and

(c) The tax treatment of sales to intentionally defective grantor trusts, including the income-tax neutrality of such transactions under Rev. Rul. 85-13, remains a matter of administrative guidance rather than statutory law and could be modified or reversed by future IRS action or judicial decision.

PCG acknowledges these risks and agrees that the Firm shall not be liable for any adverse consequences resulting from changes in law, regulation, or administrative or judicial interpretation that occur after the Firm's advice is rendered or after the closing of the transaction.

11. Governing Law and Dispute Resolution

This engagement letter shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict-of-laws principles.

Any dispute, claim, or controversy arising out of or relating to this engagement letter, the Firm's services hereunder, or the attorney-client relationship between the Firm and PCG (including, without limitation, disputes regarding fees, the quality of services, or alleged malpractice) shall be resolved by binding arbitration in Miami-Dade County, Florida, administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted by a single arbitrator mutually selected by the parties, or, if the parties are unable to agree, appointed by the American Arbitration Association. The arbitrator's decision shall be final and binding, and judgment on the award may be entered in any court of competent jurisdiction.

Notwithstanding the foregoing, the parties may mutually agree in writing to utilize an alternative dispute resolution mechanism, including mediation or non-binding arbitration, prior to or in lieu of binding arbitration.

Nothing in this Section 11 shall be construed to limit the Firm's right to seek judicial relief in a court of competent jurisdiction to enforce its lien for unpaid fees or to collect amounts owed by PCG for services rendered and disbursements incurred.

12. Acceptance and Execution

We respectfully request that you, as Managing Member of Pellegrino Capital Group LLC, review this engagement letter carefully and, if the terms set forth herein are acceptable, execute and return one copy of this letter to the Firm to confirm PCG's agreement to the terms and conditions of the engagement. A PDF copy transmitted by email to the undersigned will be accepted for purposes of confirming the engagement, provided that a signed original is delivered to the Firm within ten (10) business days thereafter.

The retainer deposit of Fifty Thousand Dollars ($50,000) should be remitted by wire transfer to Calderwood & Harkness LLP's client trust account at Prescott National Bank. Detailed wire transfer instructions are set forth in Exhibit B attached to this letter. Please reference Matter Number 1027-00005 in the wire transfer instructions to ensure proper identification and application of the funds.

This engagement letter, together with the Firm's Standard Terms of Engagement (Exhibit A), constitutes the complete agreement between the Firm and PCG with respect to the subject matter hereof and supersedes all prior oral or written communications, understandings, and agreements relating to the engagement.

IN WITNESS WHEREOF, the parties have executed this Engagement Letter as of the date first written above.

CALDERWOOD & HARKNESS LLP

By: ________

Name: George Trujillo

Title: Partner (Responsible Partner)

Date: ________

ACKNOWLEDGED AND AGREED:

PELLEGRINO CAPITAL GROUP LLC

By: ________

Name: Salvatore A. Pellegrino

Title: Managing Member

Date: ________

Enclosures

The following exhibits are attached hereto and incorporated by reference into this Engagement Letter:

Exhibit A: Firm Standard Terms of Engagement (incorporated by reference)

Exhibit B: Wire Transfer Instructions for Retainer Deposit (Calderwood & Harkness LLP Client Trust Account at Prescott National Bank)

We sincerely appreciate the opportunity to assist Pellegrino Capital Group LLC and the Pellegrino family with this important wealth-transfer transaction. We are committed to providing the highest quality legal counsel throughout the engagement and look forward to working closely with you to achieve a successful closing.

Should you have any questions regarding the terms of this engagement letter or any other aspect of the representation, please do not hesitate to contact either of the undersigned at the Firm's Miami office:

George Trujillo, Partner (Responsible Partner) Calderwood & Harkness LLP 701 Brickell Avenue, Suite 3100 Miami, Florida 33131 Direct: (305) 555-4820

Email: gtrujillo@calderwoodharkness.com

Kevin Ostrowski, Partner (Billing Partner) Calderwood & Harkness LLP 701 Brickell Avenue, Suite 3100 Miami, Florida 33131 Direct: (305) 555-4837

Email: kostrowski@calderwoodharkness.com

Very truly yours,

CALDERWOOD & HARKNESS LLP

Attorney	Role	Practice Group
George Trujillo	Responsible Partner	Energy & Infrastructure
Kevin Ostrowski	Billing Partner	Privacy & Data Security
Rafael Dominguez	Lead Associate	Real Estate
Cynthia Ho	Working Associate	Real Estate
Leonard Cross	Specialist Partner	Tax

CALDERWOOD & HARKNESS LLP Attorneys at Law
701 Brickell Avenue, Suite 3100 Miami, Florida 33131
September 18, 2025
VIA HAND DELIVERY AND EMAIL
Pellegrino Capital Group LLC 2400 Salzedo Street, Suite 1200 Coral Gables, Florida 33134
Attention: Salvatore A. Pellegrino, Managing Member
Re: Engagement of Calderwood & Harkness LLP — Intra-Family Wealth Transfer of Hospitality Interests via Sale to Intentionally Defective Grantor Trust Matter Number: 1027-00005 Billing Code: 78500.00014
Dear Mr. Pellegrino:
1. Introduction and Purpose
Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to serve as legal counsel to Pellegrino Capital Group LLC ("PCG") in connection with the proposed intra-family wealth transfer transaction described below. We are pleased to have the opportunity to work with you and look forward to a productive engagement.
The purpose of this letter is to confirm the terms and conditions of the Firm's engagement to represent PCG in connection with the structuring, documentation, and implementation of an intra-family wealth transfer involving a portfolio of hospitality membership interests. Specifically, the proposed transaction contemplates the transfer of membership interests held, directly or indirectly, in a portfolio of hospitality-related limited liability companies, with an aggregate fair market value (after the application of applicable valuation discounts for lack of marketability and lack of control) of approximately Forty Million Dollars ($40,000,000), from Salvatore A. Pellegrino ("Salvatore" or the "Grantor"), through PCG, to a newly established intentionally defective grantor trust (the "2025 IDGT" or the "Trust"), to be known as The Salvatore A. Pellegrino 2025 Family Trust. The 2025 IDGT will be established for the primary benefit of Salvatore's three adult children — Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino — and their respective descendants, per stirpes. The transfer will be structured as a sale of the hospitality membership interests to the 2025 IDGT in exchange for a secured promissory note, preceded by an initial seed gift to capitalize the Trust.
The parties have identified a target closing date of December 15, 2025, to allow sufficient time for the completion of the qualified appraisal, the negotiation and execution of all transactional documents, and the coordination with the independent trustee and its counsel. This engagement is effective as of September 18, 2025, the date of this letter.
The terms and conditions set forth in this engagement letter, together with the Firm's Standard Terms of Engagement attached hereto as Exhibit A and incorporated herein by reference, constitute the entire agreement between the Firm and PCG with respect to this engagement. In the event of any conflict between the terms of this letter and the Standard Terms of Engagement, the terms of this letter shall control.
2. Identification of the Client
The Firm's client in this engagement is Pellegrino Capital Group LLC, a Florida limited liability company (EIN 65-1238074), with its principal office located at 2400 Salzedo Street, Suite 1200, Coral Gables, Florida 33134. All duties of loyalty, confidentiality, and competence arising under the applicable Rules of Professional Conduct run to PCG as the Firm's client in this matter.
Salvatore A. Pellegrino, in his capacity as Managing Member of PCG and as the Grantor of the 2025 IDGT, will serve as the primary point of contact for this engagement. All substantive communications, instructions, and approvals relating to the transaction will be directed to and received from Salvatore in that dual capacity, unless PCG designates an alternative contact person in writing.
It is important that all parties understand the scope of the Firm's representation. The Firm does not represent, and shall not be deemed to represent, any other person or entity in connection with this matter. Without limiting the generality of the foregoing, the Firm's representation expressly does not extend to any of the following:
(a) The Salvatore A. Pellegrino 2025 Family Trust (the "2025 IDGT"), once established, or any trustee, successor trustee, trust protector, or trust advisor thereof, in any capacity;
(b) Cornerstone Fiduciary Services, Inc., which has been selected to serve as the independent trustee of the 2025 IDGT and which has retained its own independent legal counsel, Ridgeway & Callahan LLP, of Jacksonville, Florida;
(c) Any individual beneficiary of the 2025 IDGT, including Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino, in his or her individual capacity;
(d) Adriana M. Pellegrino, Salvatore's spouse, in her individual capacity, including with respect to any spousal consent, community-property, or split-gift election matters;
(e) Any of the hospitality portfolio entities, including Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC (collectively, the "Hospitality Entities"), in their respective entity capacities;
(f) Any third-party advisor retained by or on behalf of PCG, Salvatore, or the Pellegrino family in connection with this transaction, including without limitation Hargrove & Lindquist LLP (valuation firm), Baxter Whitfield CPA Group, P.A. (family accountants), and Prescott National Bank (depository bank); or
(g) Any other family member, trust, partnership, corporation, or limited liability company affiliated with Salvatore or the Pellegrino family that is not expressly identified as a client in this letter.
Each of the foregoing persons and entities may have interests that differ from, or are potentially adverse to, those of PCG in connection with this transaction. The Firm strongly recommends that any party whose interests may diverge from those of PCG obtain independent legal counsel to advise such party regarding the transaction and its implications for such party's individual rights, obligations, and tax position. The Firm's engagement by PCG does not create an attorney-client relationship with, or impose any duty upon the Firm in favor of, any non-client, regardless of whether the Firm's work product may incidentally benefit such non-client.
3. Scope of Representation
The Firm's representation of PCG in this matter shall encompass the services described in Sections 3.1 through 3.6 below. The scope of the engagement is limited to the services described herein, and any expansion of the scope will require the mutual written agreement of PCG and the Firm. Services that are expressly excluded from the scope of this engagement are identified in Section 3.7 below.
3.1 Transaction Structuring and Tax Planning
The Firm will provide legal advice and counsel regarding the overall structuring of the sale of hospitality membership interests from Salvatore, through PCG, to the 2025 IDGT. This work will include a comprehensive analysis of the proposed transaction structure and the identification and evaluation of alternative approaches, if appropriate, to maximize the efficiency of the wealth transfer while minimizing estate, gift, and generation-skipping transfer tax exposure.
As a central component of this engagement, the Firm will prepare a confidential tax planning memorandum (the "Tax Memorandum") addressed to PCG and protected by the attorney-client privilege and work-product doctrine. The Tax Memorandum will address the following topics in detail:
(i) An analysis of the grantor-trust status of the 2025 IDGT under Internal Revenue Code ("IRC") Sections 671 through 679, including the specific "defect" mechanism to be incorporated in the Trust instrument;
(ii) The estate-tax, gift-tax, and generation-skipping transfer tax ("GSTT") implications of the proposed transaction, including the application of the Grantor's available applicable exclusion amount and GST exemption;
(iii) The income-tax neutrality of the sale of assets between the Grantor and the 2025 IDGT, as recognized under Rev. Rul. 85-13 and its progeny, and the implications for recognition (or non-recognition) of gain or loss;
(iv) Compliance with the applicable federal rate ("AFR") requirements under IRC Section 7872, based on the September 2025 mid-term AFR of 4.40% per annum (annual compounding), as published by the Internal Revenue Service;
(v) Analysis and support for the valuation discounts to be applied to the hospitality membership interests, including the combined twenty percent (20%) discount for lack of marketability ("DLOM") and lack of control ("DLOC"), and the relationship between the discount methodology and applicable IRS guidance and case law;
(vi) Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) reporting obligations arising from the seed gift and the sale transaction, including adequate-disclosure requirements under Treasury Regulation Section 301.6501(c)-1(f); and
(vii) Such other tax issues as may arise during the course of the engagement and fall within the scope of representation described herein.
In addition, the Firm will coordinate with Baxter Whitfield CPA Group, P.A. (Sandra T. Whitfield, CPA, Managing Partner) regarding the preparation of Salvatore's Form 709 for the 2025 tax year and other tax return matters, to the extent such coordination is necessary to ensure consistency between the transaction documentation and the family's tax reporting positions. For the avoidance of doubt, the Firm will not itself prepare any tax returns; that responsibility rests with the family's accountants.
3.2 Trust Instrument Drafting
The Firm will draft and negotiate the irrevocable trust agreement establishing The Salvatore A. Pellegrino 2025 Family Trust under the laws of the State of Florida. The Trust instrument will be designed to accomplish the following objectives, among others:
(a) Establishment of the Trust as an intentionally defective grantor trust for federal income-tax purposes through the incorporation of a grantor-trust "defect" provision under IRC Section 675(4)(C), specifically a power retained by Salvatore, exercisable in a non-fiduciary capacity and without the approval or consent of any person in a fiduciary capacity, to reacquire the trust corpus by substituting other property of an equivalent value;
(b) Provision for the administration and distribution of Trust assets for the benefit of Salvatore's three adult children and their descendants, in accordance with the Grantor's dispositive intent as communicated to the Firm;
(c) Appointment of Cornerstone Fiduciary Services, Inc. as the initial independent trustee, with provisions for successor trustee appointment, removal, and replacement;
(d) Inclusion of appropriate spendthrift provisions, trustee powers, and administrative provisions consistent with Florida law and the Grantor's objectives; and
(e) Incorporation of such other provisions as may be appropriate in light of the transaction structure and the Grantor's estate plan.
The Firm will circulate drafts of the Trust instrument to PCG and, with PCG's authorization, to the independent trustee and its counsel for review and comment. The Firm will negotiate and incorporate reasonable comments from the independent trustee's counsel, subject to PCG's approval.
3.3 Transaction Documentation
The Firm will prepare, negotiate, and finalize the following transactional documents in connection with the proposed wealth transfer:
(a) Seed Gift Assignment Agreement — documenting the initial cash contribution of Two Million Dollars ($2,000,000) from Salvatore to the 2025 IDGT, which will serve as the Trust's initial equity capitalization (representing approximately five percent (5%) of the aggregate purchase price of the hospitality membership interests);
(b) Membership Interest Purchase Agreement (the "MIPA") — documenting the sale of membership interests in Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC from the Grantor (through PCG) to the 2025 IDGT at an aggregate purchase price of Forty Million Dollars ($40,000,000), based on the qualified appraisal to be prepared by Hargrove & Lindquist LLP, and incorporating customary representations, warranties, covenants, and closing conditions;
(c) Secured Promissory Note — in the principal amount of Forty Million Dollars ($40,000,000), bearing interest at the rate of 4.40% per annum (equal to the September 2025 mid-term AFR, annual compounding), with a nine-year (9-year) term commencing on the closing date, providing for interest-only payments during the term and a balloon payment of the entire outstanding principal balance at maturity on December 15, 2034;
(d) Pledge and Security Agreement — granting the Grantor (or PCG, as applicable) a first-priority perfected security interest in the membership interests transferred to the 2025 IDGT, together with an assignment of all distributions and other payments receivable by the Trust from the Hospitality Entities, to secure the Trust's obligations under the Secured Promissory Note;
(e) Assignments of Membership Interests — short-form assignment documents for each of the three Hospitality Entities (Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC), effectuating the transfer of membership interests from the Grantor to the 2025 IDGT; and
(f) Amended and Restated Operating Agreements — for each of the Hospitality Entities, reflecting the admission of the 2025 IDGT as the new holder of the membership interests previously held by the Grantor, and incorporating such other amendments as may be appropriate in light of the transaction.
All transactional documents will be circulated in draft form to PCG for review and approval prior to distribution to the independent trustee and its counsel.
3.4 Valuation Coordination
The Firm will coordinate with Hargrove & Lindquist LLP (Dennis W. Hargrove, ASA, CFA, Managing Director, Atlanta, Georgia) regarding the preparation of the qualified appraisal of the hospitality membership interests. This coordination will include, without limitation:
(a) Providing the valuation firm with relevant legal documentation, including the current operating agreements and organizational documents of the Hospitality Entities, to inform the appraisal analysis;
(b) Reviewing and commenting on the appraisal methodology employed by Hargrove & Lindquist LLP, including the income approach, market approach, and/or asset-based approach, as applicable;
(c) Reviewing and advising PCG regarding the appropriateness and supportability of the twenty percent (20%) combined discount for lack of marketability ("DLOM") and lack of control ("DLOC") proposed by the valuation firm, in light of applicable IRS guidance, Tax Court precedent, and current market practice; and
(d) Ensuring that the appraisal report meets the requirements for a "qualified appraisal" under IRC Section 170(f)(11)(E) and Treasury Regulation Section 1.170A-13(c), to the extent applicable for adequate-disclosure purposes on Form 709.
The Firm does not itself provide valuation or appraisal services, and PCG acknowledges that all valuation opinions and conclusions are the sole responsibility of Hargrove & Lindquist LLP. The Firm's role is limited to legal review, coordination, and counsel regarding the tax-law implications of the valuation methodology and conclusions.
3.5 Trustee and Third-Party Coordination
The Firm will coordinate with Cornerstone Fiduciary Services, Inc. (Helena R. Matsuda, Senior Trust Officer, Jacksonville, Florida) and its independent counsel, Ridgeway & Callahan LLP (Patricia N. Callahan, Partner, Jacksonville, Florida), regarding the independent trustee's review, due diligence, and acceptance of the transaction documents and the overall transaction structure. This coordination will include the following:
(a) Distribution of drafts of the Trust instrument, MIPA, Secured Promissory Note, Pledge and Security Agreement, and other transaction documents to the independent trustee and its counsel for review and comment;
(b) Negotiation and resolution of comments received from the independent trustee's counsel, subject to PCG's approval of all material terms;
(c) Preparation of a letter addressed to the independent trustee, on behalf of PCG, summarizing the transaction structure, the tax analysis underlying the sale to the 2025 IDGT, and the basis for the Firm's conclusion that the sale constitutes an arm's-length transaction for fair market value, to assist the independent trustee in its fiduciary evaluation of the transaction; and
(d) Coordination with the independent trustee regarding execution of the transaction documents and closing logistics.
3.6 Closing and Post-Closing
The Firm will prepare a comprehensive closing checklist identifying all documents, deliverables, and conditions required to be satisfied on or prior to the target closing date of December 15, 2025. The Firm will coordinate the closing process, including the assembly and execution of all closing documents. In connection with the closing and post-closing matters, the Firm will prepare or coordinate the preparation of the following:
(a) UCC-1 financing statements to be filed with the Florida Secured Transaction Registry (Florida Department of State, Division of Corporations) to perfect the security interest granted under the Pledge and Security Agreement;
(b) Member consents and resolutions for each of the Hospitality Entities, as required under the respective operating agreements, approving the transfer of membership interests and the admission of the 2025 IDGT as a member;
(c) Officer and/or manager certificates for PCG and the Hospitality Entities, as applicable, certifying the authority of the signatories and the accuracy of organizational documents;
(d) A closing binder containing fully executed originals or copies of all transaction documents, to be distributed to PCG and the independent trustee following the closing; and
(e) Post-closing coordination with Baxter Whitfield CPA Group, P.A. (Sandra T. Whitfield, CPA, Managing Partner) regarding the preparation and filing of Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) for the 2025 tax year, which will be due on or before April 15, 2026 (subject to any extension of the Grantor's individual income tax return filing deadline).
3.7 Exclusions from Scope
The following matters are expressly excluded from the scope of this engagement. If PCG requires assistance with any of the following matters, a separate engagement letter and fee arrangement will be required:
(a) Representation of PCG, Salvatore, the 2025 IDGT, or any other person or entity in connection with any audit, examination, or controversy proceeding initiated by the Internal Revenue Service, the Florida Department of Revenue, or any other taxing authority;
(b) Real property title matters, zoning, land use, permitting, or environmental compliance matters relating to any real property owned, leased, or operated by the Hospitality Entities or any of their affiliates;
(c) Securities law advice, including advice under the Securities Act of 1933, the Securities Exchange Act of 1934, or any state "blue sky" laws, with respect to the membership interests or any other securities;
(d) Any litigation, arbitration, mediation, or other dispute resolution proceeding, whether between family members, between PCG and any third party, or otherwise;
(e) Legal advice to any party other than PCG, including without limitation any individual beneficiary of the 2025 IDGT, the independent trustee, or any of the Hospitality Entities; and
(f) Preparation of federal or state income tax returns, estate tax returns (other than coordination regarding Form 709 as described in Section 3.6), or any other tax returns or reports for Salvatore, Adriana M. Pellegrino, PCG, the 2025 IDGT, or any of the Hospitality Entities.
4. Engagement Team
The following attorneys have been assigned to this matter and will be primarily responsible for the delivery of the legal services described in Section 3 above:
George Trujillo will serve as the Responsible Partner for this engagement and will function as the primary relationship partner and senior supervisory attorney. Mr. Trujillo will be your principal point of contact for substantive matters relating to the transaction, will oversee the work of the engagement team, and will be responsible for the overall quality and coordination of the Firm's legal services.
Kevin Ostrowski will serve as the Billing Partner for this engagement and will be responsible for billing administration, invoice preparation, and all fee-related inquiries. Mr. Ostrowski may be contacted directly with any questions regarding billing, payment, or retainer matters.
Rafael Dominguez will serve as the Lead Associate on the transaction and will have day-to-day responsibility for the drafting and negotiation of the transactional documents, coordination with third parties, and management of the closing process. Cynthia Ho will assist Mr. Dominguez with document preparation, due diligence, and ancillary closing deliverables.
Leonard Cross will serve as the Specialist Partner providing estate-planning, gift-tax, and trust-related tax advice. Mr. Cross will prepare the confidential Tax Memorandum described in Section 3.1 and will advise on all tax-sensitive aspects of the transaction structure, including grantor-trust compliance, AFR requirements, valuation discount issues, and Form 709 reporting.
From time to time, other attorneys, paralegals, or professional staff of the Firm may be called upon to assist with the engagement as needed. The Firm will notify PCG of any material changes to the composition of the engagement team, including any change in the Responsible Partner or the Lead Associate.
5. Fees and Billing
5.1 Hourly Rates
The Firm's services in this engagement will be billed on an hourly basis at the Firm's current standard hourly rates for the attorneys and professional staff assigned to the matter. The current hourly rates for the attorneys on this engagement team are as follows:
Partners (George Trujillo, Kevin Ostrowski, Leonard Cross): $1,150 per hour
Associates (Rafael Dominguez, Cynthia Ho): $650 per hour
Paralegal and other professional staff time, if applicable, will be billed at rates ranging from $275 to $450 per hour, depending on the experience level and function of the professional staff member involved.
These hourly rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each calendar year. The Firm will provide PCG with advance written notice of any changes to the applicable hourly rates before such changes take effect. Any rate adjustment will apply only to services performed on or after the effective date of the adjustment.
5.2 Fee Estimate
Based on the Firm's current understanding of the anticipated scope of work described in Section 3, including the complexity of the transaction structure, the number of transactional documents to be prepared and negotiated, and the expected level of coordination with the independent trustee and its counsel, the valuation firm, and the family's accountants, the Firm estimates that total legal fees for this engagement will be in the range of $185,000 to $225,000.
This estimate is provided solely for PCG's internal planning and budgeting purposes and does not constitute a cap, a maximum fee, or a fixed-fee arrangement. Actual fees will depend upon a number of factors, many of which are not within the Firm's control, including without limitation the complexity and duration of the matter, the responsiveness and cooperativeness of third parties (including the independent trustee, its counsel, and the valuation firm), any changes in the scope of the engagement, the extent of negotiations required to finalize the transaction documents, and any unforeseen legal or factual issues that may arise during the course of the representation.
If, at any point during the engagement, circumstances suggest that actual fees are likely to materially exceed the upper end of this estimate, the Firm will notify PCG promptly and discuss the reasons for the anticipated increase and any steps that may be taken to manage costs.
5.3 Retainer.  PCG has deposited a retainer in the amount of Fifty Thousand Dollars ($50,000) with the Firm. This retainer is being held in the Firm's client trust account (IOTA account) at Prescott National Bank in accordance with the requirements of Rule 5-1.1 of the Rules Regulating The Florida Bar.
The retainer will be applied against legal fees and disbursements as they are incurred and invoiced. Each monthly invoice will reflect the application of retainer funds, if applicable, and the remaining retainer balance. PCG agrees to replenish the retainer to Fifty Thousand Dollars ($50,000) within ten (10) business days of the Firm's written request if the retainer balance falls below Fifteen Thousand Dollars ($15,000) at any time during the engagement.
Upon the conclusion of the engagement or the termination thereof, any unused portion of the retainer remaining after the application of all outstanding fees and disbursements will be refunded to PCG promptly.
5.4 Disbursements and Expenses
In addition to legal fees for professional time, the Firm will bill PCG for reasonable out-of-pocket disbursements and expenses incurred in connection with this engagement. Such disbursements may include, without limitation:
•  Filing fees (including UCC filing fees, state recording fees, and any other governmental charges);
•  Courier, express mail, and overnight delivery charges;
•  Travel expenses (airfare, ground transportation, hotel, and meals) incurred in connection with meetings, closings, or other engagement-related travel, subject to the Firm's standard travel policies;
•  Document reproduction, scanning, and binding charges;
•  Electronic legal research charges (Westmark Data Systems, Sundial Solutions, Cascade Services Inc., and similar services); and
•  Long-distance telephone and videoconference charges, if applicable.
Third-party professional fees and costs — including, by way of example, appraisal fees payable to Hargrove & Lindquist LLP, trustee fees payable to Cornerstone Fiduciary Services, Inc., and accounting fees payable to Baxter Whitfield CPA Group, P.A. — are the direct responsibility of PCG and are not included in the Firm's fee estimate or invoiced through the Firm. PCG will engage and pay such third-party providers directly under separate arrangements.
5.5 Billing Procedures
The Firm will render monthly invoices describing, in reasonable detail, the legal services performed and the disbursements incurred during the preceding billing period. Each invoice will include a narrative description of the work performed, the name and hourly rate of each timekeeper, the number of hours billed by each timekeeper, and an itemization of disbursements. All invoices will reference Matter Number 1027-00005 and Billing Code 78500.00014 for PCG's internal tracking purposes.
Payment of each invoice is due within thirty (30) days of the invoice date. Invoices may be paid by check, wire transfer, or ACH payment to the account specified on the invoice. Payments should reference the Firm's matter number to ensure proper application of funds.
The Firm reserves the right to suspend work on this engagement or to withdraw from the representation if any invoice remains unpaid for more than sixty (60) days after the invoice date, subject to the Firm's obligations under the applicable Rules of Professional Conduct and the provisions of Section 9 below regarding termination of the engagement.
6. Conflict of Interest Disclosures
The Firm has conducted a comprehensive conflicts check in accordance with its internal policies and procedures and the requirements of the Rules of Professional Conduct applicable to the Firm's attorneys in each jurisdiction in which they are admitted to practice.
Based on the information currently available to the Firm, including the identities of the parties, entities, and individuals described in this engagement letter, the Firm has identified no conflicts of interest that would preclude the Firm from undertaking this representation under the applicable Rules of Professional Conduct.
Specifically, the Firm has confirmed that it does not currently represent, and has not within the past two (2) years represented, Cornerstone Fiduciary Services, Inc., Ridgeway & Callahan LLP, Hargrove & Lindquist LLP, Baxter Whitfield CPA Group, P.A., or Prescott National Bank in any matter adverse to PCG or in any matter substantially related to this transaction.
PCG acknowledges that Calderwood & Harkness LLP is a large law firm with offices in multiple jurisdictions and that the Firm represents numerous clients across a wide range of industries and practice areas in diverse matters. It is possible that the Firm currently represents, or may in the future represent, other clients in matters unrelated to this engagement where the interests of such clients may differ from those of PCG. By executing this engagement letter, PCG acknowledges and consents to the Firm's representation of other clients in matters unrelated to this engagement, provided that such representation does not involve a direct adversity to PCG in this specific matter or in any matter substantially related to this engagement. This advance consent applies only to unrelated matters and does not constitute a waiver of PCG's right to object to any representation that would create a direct conflict of interest in this engagement or a substantially related matter.
If an actual or potential conflict of interest arises during the course of this engagement, the Firm will promptly notify PCG and discuss appropriate steps to address the conflict. Such steps may include seeking informed written consent from all affected parties, implementing an ethical screen within the Firm, or, if the conflict cannot be adequately resolved, withdrawing from the representation in accordance with Section 9 below.
7. Confidentiality and Privilege
All communications between PCG (including Salvatore A. Pellegrino in his capacity as Managing Member and Grantor) and the Firm in connection with this engagement are intended to be protected by the attorney-client privilege and/or the work-product doctrine to the fullest extent permitted by applicable law. The Firm will take reasonable steps to preserve the privileged and confidential nature of all such communications.
The Firm will maintain the confidentiality of all information provided by PCG in connection with this engagement, whether oral, written, or in electronic form, and will not disclose such information to any third party except as authorized by PCG or as required by applicable law, court order, or the Rules of Professional Conduct. The Firm's confidentiality obligations extend to all nonpublic information received from PCG, including financial information, family information, business strategies, entity structures, and the terms and conditions of the proposed transaction.
PCG acknowledges that the effective execution of this engagement will require certain information to be shared with third parties in the ordinary course, including without limitation:
(a) Cornerstone Fiduciary Services, Inc. and its counsel, Ridgeway & Callahan LLP, in connection with the independent trustee's review and acceptance of the transaction;
(b) Hargrove & Lindquist LLP, in connection with the preparation of the qualified appraisal;
(c) Baxter Whitfield CPA Group, P.A., in connection with tax return preparation and tax planning coordination; and
(d) Prescott National Bank, in connection with the retainer deposit, wire transfers, and any depository matters related to the transaction.
Such disclosures will be made only with PCG's prior authorization (which authorization may be general or specific, as circumstances require) and, where appropriate, will be subject to common-interest agreements, joint-defense agreements, or other privilege-preserving arrangements designed to maintain the confidentiality and privileged nature of the information shared.
8. Document Retention
Upon the conclusion of this engagement, the Firm will retain the client file — including copies of all correspondence, memoranda, work papers, drafts, and final documents — in accordance with the Firm's document retention policy. Under the Firm's current policy, client files are retained for a period of ten (10) years from the date the matter is formally closed in the Firm's records management system.
Original documents belonging to PCG that are in the Firm's possession will be returned to PCG upon written request at any time during or after the engagement, at PCG's expense for any shipping or reproduction costs.
PCG is strongly encouraged to retain its own copies of all important documents generated or received in connection with this engagement, including the executed Trust instrument, transaction documents, the Tax Memorandum, the qualified appraisal, and all closing deliverables. Following the expiration of the Firm's document retention period, the Firm may destroy or dispose of the client file without further notice to PCG, and the Firm shall have no obligation to retain any documents beyond the stated retention period.
9. Termination of Engagement
Either PCG or the Firm may terminate this engagement at any time by providing written notice to the other party. No reason need be stated for termination by PCG. The Firm's right to withdraw is subject to the requirements and limitations of the applicable Rules of Professional Conduct and any applicable court rules.
In the event of termination, whether by PCG or by the Firm:
(a) PCG will remain responsible for the payment of all fees and disbursements incurred through the effective date of termination, and the Firm will render a final invoice for all unbilled time and expenses;
(b) The Firm will take such steps as are reasonably necessary to protect PCG's interests, including providing reasonable advance notice of withdrawal (where the Firm initiates the termination), allowing PCG a reasonable period of time to engage successor counsel, and cooperating with the transition of the matter;
(c) Upon PCG's written request, the Firm will transfer the client file, including all work product, to PCG or to successor counsel designated by PCG, subject to the Firm's right to retain copies for its own records and to assert any applicable lien for unpaid fees; and
(d) The retainer held by the Firm will be applied to any outstanding balance for fees and disbursements, and any excess retainer funds will be refunded to PCG promptly following the rendering of the final invoice and the satisfaction of all outstanding obligations.
Termination of the engagement shall not affect the Firm's continuing obligations of confidentiality to PCG, which survive termination indefinitely, nor shall it relieve PCG of its obligation to pay for services rendered and disbursements incurred prior to termination.
10. Limitation of Liability
The legal advice and counsel provided by the Firm in connection with this engagement is based on the facts and circumstances as communicated to the Firm by PCG and on the laws, regulations, rulings, and judicial precedents in effect at the time such advice is rendered. The Firm does not guarantee any particular result or outcome in connection with this engagement, including without limitation any particular tax treatment, IRS acceptance of the transaction structure, or valuation conclusion.
PCG acknowledges and understands that the federal estate, gift, and generation-skipping transfer tax laws are subject to change at any time as a result of legislative action by Congress, regulatory action by the U.S. Department of the Treasury or the Internal Revenue Service, or judicial decisions. In particular, and without limitation, the Firm notes that:
(a) The applicable estate and gift-tax exemption amounts (currently $13,990,000 per individual for 2025) are scheduled to be reduced significantly after December 31, 2025, under the sunset provisions of the Tax Cuts and Jobs Act of 2017, unless Congress acts to extend or modify the current exemption levels;
(b) The IRS has periodically challenged the use and magnitude of valuation discounts for lack of marketability and lack of control in connection with intra-family transfers, and future regulatory or legislative action could restrict or eliminate the availability of such discounts; and
(c) The tax treatment of sales to intentionally defective grantor trusts, including the income-tax neutrality of such transactions under Rev. Rul. 85-13, remains a matter of administrative guidance rather than statutory law and could be modified or reversed by future IRS action or judicial decision.
PCG acknowledges these risks and agrees that the Firm shall not be liable for any adverse consequences resulting from changes in law, regulation, or administrative or judicial interpretation that occur after the Firm's advice is rendered or after the closing of the transaction.
11. Governing Law and Dispute Resolution
This engagement letter shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict-of-laws principles.
Any dispute, claim, or controversy arising out of or relating to this engagement letter, the Firm's services hereunder, or the attorney-client relationship between the Firm and PCG (including, without limitation, disputes regarding fees, the quality of services, or alleged malpractice) shall be resolved by binding arbitration in Miami-Dade County, Florida, administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and Mediation Procedures then in effect. The arbitration shall be conducted by a single arbitrator mutually selected by the parties, or, if the parties are unable to agree, appointed by the American Arbitration Association. The arbitrator's decision shall be final and binding, and judgment on the award may be entered in any court of competent jurisdiction.
Notwithstanding the foregoing, the parties may mutually agree in writing to utilize an alternative dispute resolution mechanism, including mediation or non-binding arbitration, prior to or in lieu of binding arbitration.
Nothing in this Section 11 shall be construed to limit the Firm's right to seek judicial relief in a court of competent jurisdiction to enforce its lien for unpaid fees or to collect amounts owed by PCG for services rendered and disbursements incurred.
12. Acceptance and Execution
We respectfully request that you, as Managing Member of Pellegrino Capital Group LLC, review this engagement letter carefully and, if the terms set forth herein are acceptable, execute and return one copy of this letter to the Firm to confirm PCG's agreement to the terms and conditions of the engagement. A PDF copy transmitted by email to the undersigned will be accepted for purposes of confirming the engagement, provided that a signed original is delivered to the Firm within ten (10) business days thereafter.
The retainer deposit of Fifty Thousand Dollars ($50,000) should be remitted by wire transfer to Calderwood & Harkness LLP's client trust account at Prescott National Bank. Detailed wire transfer instructions are set forth in Exhibit B attached to this letter. Please reference Matter Number 1027-00005 in the wire transfer instructions to ensure proper identification and application of the funds.
This engagement letter, together with the Firm's Standard Terms of Engagement (Exhibit A), constitutes the complete agreement between the Firm and PCG with respect to the subject matter hereof and supersedes all prior oral or written communications, understandings, and agreements relating to the engagement.
IN WITNESS WHEREOF, the parties have executed this Engagement Letter as of the date first written above.
CALDERWOOD & HARKNESS LLP
CALDERWOOD & HARKNESS LLP
By: ________
Name: George Trujillo
Title: Partner (Responsible Partner)
Date: ________
ACKNOWLEDGED AND AGREED:
PELLEGRINO CAPITAL GROUP LLC
PELLEGRINO CAPITAL GROUP LLC
By: ________
Name: Salvatore A. Pellegrino
Title: Managing Member
Date: ________
Enclosures
The following exhibits are attached hereto and incorporated by reference into this Engagement Letter:
Exhibit A: Firm Standard Terms of Engagement (incorporated by reference)
Exhibit B: Wire Transfer Instructions for Retainer Deposit (Calderwood & Harkness LLP Client Trust Account at Prescott National Bank)
We sincerely appreciate the opportunity to assist Pellegrino Capital Group LLC and the Pellegrino family with this important wealth-transfer transaction. We are committed to providing the highest quality legal counsel throughout the engagement and look forward to working closely with you to achieve a successful closing.
Should you have any questions regarding the terms of this engagement letter or any other aspect of the representation, please do not hesitate to contact either of the undersigned at the Firm's Miami office:
George Trujillo, Partner (Responsible Partner) Calderwood & Harkness LLP 701 Brickell Avenue, Suite 3100 Miami, Florida 33131 Direct: (305) 555-4820
Email: gtrujillo@calderwoodharkness.com
Kevin Ostrowski, Partner (Billing Partner) Calderwood & Harkness LLP 701 Brickell Avenue, Suite 3100 Miami, Florida 33131 Direct: (305) 555-4837
Email: kostrowski@calderwoodharkness.com
Very truly yours,
CALDERWOOD & HARKNESS LLP
Attorney | Role | Practice Group
George Trujillo | Responsible Partner | Energy & Infrastructure
Kevin Ostrowski | Billing Partner | Privacy & Data Security
Rafael Dominguez | Lead Associate | Real Estate
Cynthia Ho | Working Associate | Real Estate
Leonard Cross | Specialist Partner | Tax

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA HAND DELIVERY AND EMAIL

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

PELLEGRINO CAPITAL GROUP LLC

PELLEGRINO CAPITAL GROUP LLC

CALDERWOOD & HARKNESS LLP

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