MEMBERSHIP INTEREST PURCHASE AGREEMENT
Among
Salvatore A. Pellegrino, acting through Pellegrino Capital Group LLC, as Seller,
and
Cornerstone Fiduciary Services, Inc., as Trustee of The Salvatore A. Pellegrino 2025 Family Trust, as Purchaser
Dated as of December 15, 2025
Relating to the Sale of Membership Interests in
Meridian Shores Hospitality LLC Costa Luma Resort Holdings LLC Azulia Beach Club LLC
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made and entered into as of December 15, 2025 (the "Effective Date"), by and between:
SELLER:
Salvatore A. Pellegrino, a natural person, a citizen of the United States and a resident of Coral Gables, Miami-Dade County, Florida, with his principal residence at 610 Casuarina Concourse, Coral Gables, FL 33143, acting individually and through Pellegrino Capital Group LLC, a Florida limited liability company, in his capacity as sole Managing Member thereof (collectively, the "Seller");
and
PURCHASER:
Cornerstone Fiduciary Services, Inc., a Florida corporation, in its capacity as Trustee of The Salvatore A. Pellegrino 2025 Family Trust, an irrevocable trust established under the laws of the State of Florida on November 10, 2025, with its principal office at 200 West Forsyth Street, Suite 1500, Jacksonville, FL 32202 (the "Purchaser").
Seller and Purchaser are sometimes individually referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Salvatore A. Pellegrino is the sole Managing Member and holder of a controlling membership interest in Pellegrino Capital Group LLC ("PCG"), a Florida limited liability company headquartered at 2400 Salzedo Street, Suite 1200, Coral Gables, FL 33134;
WHEREAS, PCG is the record and beneficial owner of the following membership interests (collectively, the "Company Interests") in three Florida limited liability companies engaged in the hospitality industry (collectively, the "Company Entities"):
(i) a ninety-two percent (92%) Class A membership interest in Meridian Shores Hospitality LLC, a Florida limited liability company;
(ii) a one hundred percent (100%) membership interest in Costa Luma Resort Holdings LLC, a Florida limited liability company; and
(iii) an eighty-eight percent (88%) Class A membership interest in Azulia Beach Club LLC, a Florida limited liability company;
WHEREAS, Salvatore A. Pellegrino established The Salvatore A. Pellegrino 2025 Family Trust (the "Trust") on November 10, 2025, as an irrevocable grantor trust under the laws of the State of Florida, for the benefit of his children — Marco A. Pellegrino, Lucia Pellegrino-Vasquez, and Dante R. Pellegrino — and their descendants, and appointed Cornerstone Fiduciary Services, Inc. as the Independent Trustee thereof;
WHEREAS, in connection with the establishment of the Trust, Salvatore A. Pellegrino contributed a cash seed gift of Two Million Dollars ($2,000,000) to the Trust on November 10, 2025 (the "Seed Gift"), which is currently held on deposit at Prescott National Bank;
WHEREAS, Hargrove & Lindquist LLP, an independent qualified appraisal firm, has prepared a Qualified Appraisal dated November 3, 2025, determining the aggregate pre-discount fair market value of the Company Interests to be Fifty Million Dollars ($50,000,000) and, after application of a combined twenty percent (20%) discount for lack of marketability and lack of control, the aggregate post-discount fair market value to be Forty Million Dollars ($40,000,000);
WHEREAS, the Seller desires to sell the Company Interests to the Trust, and the Purchaser (acting through the Independent Trustee) desires to purchase the Company Interests from the Seller, on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the entire Purchase Price shall be paid by the Purchaser's delivery to the Seller of a secured promissory note in the principal amount of Forty Million Dollars ($40,000,000), bearing interest at the applicable federal rate, secured by a first-priority pledge of the Company Interests;
WHEREAS, for federal income-tax purposes, the Trust is treated as a "grantor trust" under Sections 671 through 679 of the Internal Revenue Code of 1986, as amended, and accordingly the sale of the Company Interests to the Trust is not a taxable event for federal income-tax purposes; and
WHEREAS, each of the Seller and the Purchaser has been represented by independent legal counsel in connection with the negotiation and execution of this Agreement and the Transaction Documents.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the respective meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. This definition shall be interpreted consistently with the standards set forth in Section 607.0102 of the Florida Business Corporation Act and Section 605.0102 of the Florida Revised Limited Liability Company Act, as applicable.
"Aggregate Purchase Price" or "Purchase Price" means Forty Million Dollars ($40,000,000), the aggregate consideration to be paid by the Purchaser to the Seller for the Company Interests, as more fully described in Section 2.2 of this Agreement.
"Applicable AFR" means four and forty one-hundredths percent (4.40%) per annum, which is the mid-term Applicable Federal Rate for September 2025, as published by the Internal Revenue Service in Revenue Ruling 2025-17 (or the applicable revenue ruling for such period), compounded annually.
"Appraisal" or "Qualified Appraisal" means the independent qualified appraisal report dated November 3, 2025, prepared by Hargrove & Lindquist LLP, with offices at 3344 Peachtree Road NE, Suite 900, Atlanta, GA 30326, under the direction of Dennis W. Hargrove, ASA, CFA, Managing Director, which report sets forth the fair market value of each Company Interest as of the valuation date and satisfies the requirements of a "qualified appraisal" under Section 170(f)(11)(E) of the Code and Treasury Regulation Section 1.170A-13(c)(3), to the extent applicable.
"Assignment Instruments" means the three (3) separate short-form Assignment of Membership Interests to be executed and delivered at the Closing for each Company Entity, substantially in the forms attached hereto as Exhibit C-1, Exhibit C-2, and Exhibit C-3, respectively.
"Azulia" means Azulia Beach Club LLC, a Florida limited liability company, with Employer Identification Number 59-4285413, formed under the laws of the State of Florida and having its principal place of business at 22 Baymont Drive, Clearwater Beach, FL 33767.
"Azulia Interest" means the eighty-eight percent (88%) Class A membership interest in Azulia held by the Seller through PCG.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in the State of Florida are authorized or obligated by law, regulation, or executive order to close.
"Closing" means the consummation of the purchase and sale of the Company Interests and the other transactions contemplated by this Agreement and the Transaction Documents.
"Closing Date" means December 15, 2025, or such other date as the Parties may mutually agree in writing.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, together with all regulations, rulings, and interpretations promulgated thereunder.
"Combined discount" means the aggregate twenty percent (20%) discount applied uniformly to the Pre-discount FMV of each Company Interest, reflecting a combined discount for lack of marketability ("DLOM") and discount for lack of control ("DLOC"), as determined and supported by the Qualified Appraisal.
"Company Entities" means, collectively, Meridian Shores Hospitality LLC, Costa Luma Resort Holdings LLC, and Azulia Beach Club LLC, and each individually a "Company Entity."
"Company Interests" means, collectively, the Meridian Shores Interest, the Costa Luma Interest, and the Azulia Interest, and each individually a "Company Interest."
"Costa Luma" means Costa Luma Resort Holdings LLC, a Florida limited liability company, with Employer Identification Number 59-4173920, formed under the laws of the State of Florida and having its principal place of business at 81700 Overseas Highway, Islamorada, FL 33036.
"Costa Luma Interest" means the one hundred percent (100%) membership interest in Costa Luma held by the Seller through PCG.
"Encumbrance" means any lien, pledge, mortgage, deed of trust, security interest, charge, claim, easement, encroachment, restriction, option, right of first refusal, right of first offer, preemptive right, community property interest, or other encumbrance of any kind or nature whatsoever, whether imposed by agreement, law, equity, or otherwise.
"GAAP" means generally accepted accounting principles in the United States as in effect from time to time.
"Governing Documents" means, with respect to any Company Entity, its articles of organization (or certificate of formation), operating agreement, and any amendments, supplements, or restatements of any of the foregoing, in each case as in effect as of the date hereof or as amended as contemplated by this Agreement.
"Governmental Authority" means any federal, state, local, or foreign government or political subdivision thereof, or any agency, authority, bureau, commission, department, official, court, tribunal, or instrumentality of any such government or political subdivision, or any self-regulatory organization.
"Grantor Trust" or "Trust" means The Salvatore A. Pellegrino 2025 Family Trust, an irrevocable trust established under the laws of the State of Florida on November 10, 2025, pursuant to a Trust Agreement of even date between Salvatore A. Pellegrino, as Grantor, and Cornerstone Fiduciary Services, Inc., as Trustee.
"Independent Trustee" means Cornerstone Fiduciary Services, Inc., a Florida corporation duly organized, validly existing, and in good standing under the laws of the State of Florida, licensed under FL Trust Company License No. FTC-2014-00287 issued by the Florida Office of Financial Regulation, acting through Helena R. Matsuda, Senior Trust Officer, in its capacity as the trustee of the Trust.
"Knowledge" or "Knowledge of the Seller" means the actual knowledge of Salvatore A. Pellegrino, after reasonable inquiry of the officers, managers, and senior employees of each Company Entity.
"Material Adverse Effect" means any change, event, occurrence, effect, condition, or development that, individually or in the aggregate, (a) has had, or would reasonably be expected to have, a material adverse effect on the business, financial condition, assets, liabilities, or results of operations of any Company Entity or the Company Entities taken as a whole, or (b) would prevent, materially delay, or materially impair the ability of the Seller to consummate the transactions contemplated by this Agreement; provided, however, that none of the following, alone or in combination, shall be deemed to constitute or be taken into account in determining whether there has been a Material Adverse Effect: (i) changes in general economic, financial market, or political conditions in the United States or the State of Florida; (ii) changes in conditions generally affecting the hospitality, lodging, or food-and-beverage industries; (iii) changes in applicable law or GAAP; (iv) natural disasters, epidemics, pandemics, acts of terrorism, or hostilities (including any escalation thereof); (v) any failure to meet internal projections, forecasts, or budgets (though the underlying causes thereof may be considered); or (vi) actions taken or omitted at the written request or with the written consent of the Purchaser.
"Meridian Shores" means Meridian Shores Hospitality LLC, a Florida limited liability company, with Employer Identification Number 59-4021867, formed under the laws of the State of Florida and having its principal place of business at 4500 Gulf Shore Boulevard, Naples, FL 34102.
"Meridian Shores Interest" means the ninety-two percent (92%) Class A membership interest in Meridian Shores held by the Seller through PCG.
"Note" or "Promissory Note" means the Secured Promissory Note in the original principal amount of Forty Million Dollars ($40,000,000), to be executed and delivered by the Purchaser in favor of the Seller at the Closing, substantially in the form attached hereto as Exhibit A.
"Operating Agreements" means, collectively, the existing operating agreements of each Company Entity as in effect on the date hereof, and with respect to Meridian Shores, the Amended and Restated Operating Agreement to be effective as of the Closing Date in the form attached hereto as Exhibit D, and each individually an "Operating Agreement."
"Outside Date" means January 31, 2026.
"Party" or "Parties" means the Seller and the Purchaser, individually or collectively, as the context may require.
"PCG" means Pellegrino Capital Group LLC, a Florida limited liability company, with Employer Identification Number 65-1238074, formed under the laws of the State of Florida in 2006 and headquartered at 2400 Salzedo Street, Suite 1200, Coral Gables, FL 33134, of which Salvatore A. Pellegrino is the sole Managing Member.
"Permitted Encumbrances" means (a) Encumbrances arising under or created pursuant to the Pledge Agreement and the Promissory Note, (b) restrictions on transfer set forth in the Operating Agreements, and (c) restrictions arising under applicable federal and state securities laws.
"Person" means a natural person, corporation, limited liability company, partnership, limited partnership, limited liability partnership, joint venture, trust, estate, unincorporated organization, association, Governmental Authority, or any other entity.
"Pledge Agreement" means the Pledge and Security Agreement to be executed and delivered at the Closing by the Purchaser in favor of the Seller, substantially in the form attached hereto as Exhibit B.
"Pre-discount FMV" means the aggregate pre-discount fair market value of the Company Interests as determined by the Qualified Appraisal, equal to Fifty Million Dollars ($50,000,000), allocated as follows: Twenty-Two Million Four Hundred Thousand Dollars ($22,400,000) to the Meridian Shores Interest; Eighteen Million Five Hundred Thousand Dollars ($18,500,000) to the Costa Luma Interest; and Nine Million One Hundred Thousand Dollars ($9,100,000) to the Azulia Interest.
"Purchaser" means Cornerstone Fiduciary Services, Inc., a Florida corporation, in its capacity as Trustee of The Salvatore A. Pellegrino 2025 Family Trust, with its principal office at 200 West Forsyth Street, Suite 1500, Jacksonville, FL 32202.
"Schedules" means the disclosure schedules delivered by the Seller to the Purchaser concurrently with the execution and delivery of this Agreement, as the same may be amended or supplemented in accordance with the terms hereof.
"Seed Gift" means the Two Million Dollars ($2,000,000) cash contribution made by Salvatore A. Pellegrino, as Grantor, to the Trust on November 10, 2025, which was deposited into the Trust's account at Prescott National Bank and remains on deposit therein as of the date hereof.
"Seller" means Salvatore A. Pellegrino, a natural person, a citizen of the United States and a resident of Coral Gables, Miami-Dade County, Florida, with his principal residence at 610 Casuarina Concourse, Coral Gables, FL 33143, acting individually and through Pellegrino Capital Group LLC in his capacity as sole Managing Member thereof.
"Seller's Counsel" means Calderwood & Harkness LLP, 701 Brickell Avenue, Suite 3100, Miami, FL 33131 (Matter No. 1027-00005), with George Trujillo and Rafael Dominguez serving as lead counsel for the Seller.
"Tax" or "Taxes" means any and all federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto.
"Tax Advisor" means Baxter Whitfield CPA Group, P.A., with offices at 150 Alhambra Circle, Suite 800, Coral Gables, FL 33134, with Sandra T. Whitfield, CPA, serving as Managing Partner.
"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and any amendment thereof, filed or required to be filed with any Governmental Authority.
"Transaction Documents" means, collectively, this Agreement, the Note, the Pledge Agreement, the Assignment Instruments, the Amended and Restated Operating Agreement for Meridian Shores, and all other agreements, certificates, instruments, and documents to be executed and delivered in connection with the transactions contemplated hereby.
"Treasury Regulations" means the regulations promulgated under the Code by the United States Department of the Treasury.
"Trustee's Counsel" means Ridgeway & Callahan LLP, 50 North Laura Street, Suite 2200, Jacksonville, FL 32202, with Patricia N. Callahan, Partner, serving as lead counsel for the Independent Trustee and the Purchaser.
Section 1.2 — Rules of Construction
The following rules of construction shall apply to this Agreement:
(a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(b) Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation."
(c) Words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other genders as the context requires.
(d) The terms "hereof," "herein," "herewith," "hereby," and "hereunder" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.
(e) The word "or" shall not be exclusive.
(f) References to Articles, Sections, Exhibits, and Schedules are to Articles and Sections of, and Exhibits and Schedules to, this Agreement, unless otherwise specified. Each Exhibit and Schedule referred to herein is incorporated by reference and made a part hereof for all purposes.
(g) References to any statute, rule, or regulation shall include all amendments thereto, all rules and regulations promulgated thereunder, and any successor statutes, rules, or regulations.
(h) All dollar amounts are expressed in, and all payments shall be made in, the lawful currency of the United States of America.
(i) The word "extent" in the phrase "to the extent" means the degree to which a subject or other thing extends, and such phrase shall not mean simply "if."
(j) References to a "day" or number of "days" (without the explicit qualification of "Business Day") shall refer to a calendar day or calendar days. If any action is to be taken or if any notice is to be given on or by a particular calendar day that is not a Business Day, then such action shall be taken or such notice shall be given on or by the next succeeding Business Day.
ARTICLE II — SALE AND PURCHASE OF COMPANY INTERESTS
Section 2.1 — Agreement to Sell and Purchase
Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Seller hereby agrees to sell, assign, transfer, convey, and deliver to the Purchaser, and the Purchaser hereby agrees to purchase, acquire, and accept from the Seller, free and clear of all Encumbrances (other than Permitted Encumbrances), all of the Seller's right, title, and interest in and to the following Company Interests:
(a) the Meridian Shores Interest, consisting of a ninety-two percent (92%) Class A membership interest in Meridian Shores Hospitality LLC;
(b) the Costa Luma Interest, consisting of a one hundred percent (100%) membership interest in Costa Luma Resort Holdings LLC; and
(c) the Azulia Interest, consisting of an eighty-eight percent (88%) Class A membership interest in Azulia Beach Club LLC.
The sale, assignment, transfer, and delivery of the Company Interests shall be effected by the execution and delivery of the Assignment Instruments in the forms attached hereto as Exhibit C-1, Exhibit C-2, and Exhibit C-3, and by such other instruments as may be necessary or appropriate under the Governing Documents or applicable law to transfer record and beneficial ownership of the Company Interests to the Purchaser.
Section 2.2 — Aggregate Purchase Price
The aggregate purchase price for the Company Interests shall be Forty Million Dollars ($40,000,000) (the "Purchase Price"). The Purchase Price reflects the aggregate Pre-discount Fair Market Value of Fifty Million Dollars ($50,000,000), as determined by the Qualified Appraisal prepared by Hargrove & Lindquist LLP dated November 3, 2025, less the Combined discount of twenty percent (20%) for lack of marketability and lack of control, yielding the following allocated values:
(a) Meridian Shores Interest: Pre-discount FMV of $22,400,000, less a 20% Combined discount of $4,480,000, resulting in a post-discount allocated purchase price of $17,920,000;
(b) Costa Luma Interest: Pre-discount FMV of $18,500,000, less a 20% Combined discount of $3,700,000, resulting in a post-discount allocated purchase price of $14,800,000; and
(c) Azulia Interest: Pre-discount FMV of $9,100,000, less a 20% Combined discount of $1,820,000, resulting in a post-discount allocated purchase price of $7,280,000.
The aggregate of the foregoing allocated purchase prices equals Forty Million Dollars ($40,000,000). The Purchase Price is supported by, and has been determined in reliance upon, the Qualified Appraisal. The Qualified Appraisal employed a capitalization-of-income methodology based upon a 7.0× multiple applied to the net operating income of each Company Entity, together with such other valuation methodologies as the appraiser deemed appropriate, and included appropriate adjustments for marketability and control considerations.
Section 2.3 — Payment of Purchase Price
The entire Purchase Price of Forty Million Dollars ($40,000,000) shall be paid at the Closing by the Purchaser's execution and delivery to the Seller of the Promissory Note in the original principal amount of Forty Million Dollars ($40,000,000), substantially in the form attached hereto as Exhibit A. No cash shall be paid at the Closing; the Purchase Price shall be satisfied entirely by the delivery of the Note. The material terms of the Promissory Note are as follows:
(a) Principal Amount: $40,000,000.
(b) Interest Rate: 4.40% per annum, which is the September 2025 mid-term Applicable Federal Rate, compounded annually. The Parties acknowledge that the interest rate has been set at or above the Applicable AFR to ensure that the Note is treated as bearing adequate stated interest for purposes of Sections 1274 and 7872 of the Code.
(c) Interest Payments: Interest shall accrue from and after the Closing Date and shall be payable annually in arrears on each anniversary of the Closing Date, commencing on December 15, 2026. The annual interest payment shall be One Million Seven Hundred Sixty Thousand Dollars ($1,760,000) per year (calculated as $40,000,000 × 4.40%).
(d) Principal Payment: The entire outstanding principal balance of $40,000,000 shall be due and payable in full as a balloon payment on December 15, 2034 (the maturity date).
(e) Term: Nine (9) years from the Closing Date.
(f) Prepayment: The Promissory Note shall permit prepayment of principal, in whole or in part, at any time without premium or penalty.
(g) Security: The Promissory Note shall be secured by the Pledge Agreement, pursuant to which the Purchaser shall grant to the Seller a first-priority security interest in the Company Interests and all distributions, proceeds, and cash flow attributable thereto.
(h) Default: The Promissory Note shall include customary events of default, including failure to pay interest when due, failure to pay principal at maturity, and breach of the Pledge Agreement.
Section 2.4 — Allocation of Purchase Price
The Purchase Price shall be allocated among the Company Interests as set forth on Schedule 2.4 attached hereto, which allocation is consistent with the Qualified Appraisal. The Parties agree to report the allocation of the Purchase Price consistently with Schedule 2.4 for all federal, state, and local tax purposes, including on any Tax Returns, and neither Party shall take any position on any Tax Return or in any proceeding before any Governmental Authority that is inconsistent with such allocation, unless otherwise required by a final determination by a court of competent jurisdiction or by the Internal Revenue Service.
ARTICLE III — CLOSING
Section 3.1 — Closing Date and Location
The Closing shall occur on December 15, 2025 (the "Closing Date"), at the offices of Calderwood & Harkness LLP, 701 Brickell Avenue, Suite 3100, Miami, FL 33131, or at such other location, or by remote exchange of executed documents via overnight courier, electronic mail, or other means, as the Parties may mutually agree in writing. The Closing shall be deemed to have occurred as of 11:59 p.m. Eastern Time on the Closing Date.
Section 3.2 — Seller's Closing Deliverables
At or prior to the Closing, the Seller shall deliver or cause to be delivered to the Purchaser each of the following:
(a) Assignment Instruments. Executed counterparts of the Assignment of Membership Interests for each of the three Company Interests, in the forms attached hereto as Exhibit C-1, Exhibit C-2, and Exhibit C-3, duly executed by the Seller (acting through PCG) and, to the extent required, by each Company Entity;
(b) PCG Resolutions. A certified copy of the resolutions of PCG (adopted by Salvatore A. Pellegrino in his capacity as sole Managing Member), authorizing the execution, delivery, and performance of this Agreement and each other Transaction Document to which PCG is a party, and the consummation of the transactions contemplated hereby and thereby;
(c) Certificates of Good Standing. A certificate of good standing (or equivalent status certificate) for each Company Entity issued by the Florida Department of State, Division of Corporations, each dated within ten (10) days of the Closing Date;
(d) Amended and Restated Operating Agreement. The Amended and Restated Operating Agreement for Meridian Shores Hospitality LLC, in the form attached hereto as Exhibit D, duly executed by all required parties and effective as of the Closing Date;
(e) Member Consents. Written consents of each non-selling member of Meridian Shores (holders of the 8% Class B membership interest) and each non-selling member of Azulia (holders of the 12% Class B membership interest) to the transfer of the Meridian Shores Interest and the Azulia Interest, respectively, to the Purchaser, to the extent such consents are required under the applicable Operating Agreements;
(f) Qualified Appraisal. A complete copy of the Qualified Appraisal report dated November 3, 2025, prepared by Hargrove & Lindquist LLP under the direction of Dennis W. Hargrove, ASA, CFA, together with all appendices, schedules, and supporting data;
(g) Officer/Manager Certificates. A certificate executed by an officer or manager of each Company Entity, certifying as to (i) the organizational documents of such Company Entity, (ii) the incumbency of the officers, managers, or authorized signatories of such Company Entity, and (iii) the adoption of any resolutions required to authorize the transfer of the applicable Company Interest;
(h) Bring-Down Certificate. A certificate executed by the Seller, dated as of the Closing Date, certifying that (i) the representations and warranties of the Seller contained in Article IV are true and correct in all material respects as of the Closing Date (except for representations and warranties that are made as of a specific date, which shall be true and correct in all material respects as of such date), and (ii) the Seller has performed in all material respects all covenants and agreements required to be performed by the Seller at or prior to the Closing;
(i) UCC-3 Termination Statements. To the extent applicable, duly executed UCC-3 termination statements or other releases sufficient to terminate and release any existing financing statements, security interests, or other Encumbrances filed or recorded against the Company Interests or the assets of the Company Entities (other than Permitted Encumbrances);
(j) Additional Documents. Such other certificates, instruments, and documents as may be reasonably requested by the Purchaser or Trustee's Counsel to effectuate the transactions contemplated by this Agreement.
Section 3.3 — Purchaser's Closing Deliverables
At or prior to the Closing, the Purchaser shall deliver or cause to be delivered to the Seller each of the following:
(a) Promissory Note. The executed Promissory Note in the original principal amount of Forty Million Dollars ($40,000,000), substantially in the form attached hereto as Exhibit A, duly executed by the Purchaser (through the Independent Trustee);
(b) Pledge and Security Agreement. The executed Pledge and Security Agreement, substantially in the form attached hereto as Exhibit B, granting to the Seller a first-priority security interest in the Company Interests and all distributions, proceeds, and cash flow attributable thereto, duly executed by the Purchaser (through the Independent Trustee);
(c) Trustee Authorization. A trustee resolution or certificate executed by Helena R. Matsuda, Senior Trust Officer, on behalf of Cornerstone Fiduciary Services, Inc., confirming (i) the authority of the Independent Trustee to enter into and perform this Agreement and each other Transaction Document on behalf of the Trust, and (ii) that such authority is consistent with and authorized by the Trust Agreement dated November 10, 2025;
(d) Seed Gift Confirmation. A certificate or bank statement confirming that the Seed Gift of Two Million Dollars ($2,000,000) has been received and is held in the Trust's account at Prescott National Bank;
(e) UCC-1 Financing Statements. Duly executed UCC-1 financing statement(s) in form suitable for filing with the Florida Secured Transaction Registry (or such other filing office as may be appropriate under the Florida Uniform Commercial Code), naming the Purchaser as debtor and the Seller as secured party, covering the Company Interests and all proceeds thereof, together with authorization by the Purchaser for the filing of such financing statements;
(f) Bring-Down Certificate. A certificate executed by the Purchaser (through the Independent Trustee), dated as of the Closing Date, certifying that (i) the representations and warranties of the Purchaser contained in Article V are true and correct in all material respects as of the Closing Date (except for representations and warranties that are made as of a specific date, which shall be true and correct in all material respects as of such date), and (ii) the Purchaser has performed in all material respects all covenants and agreements required to be performed by the Purchaser at or prior to the Closing;
(g) Legal Opinion / Confirmation Letter. Written confirmation from Ridgeway & Callahan LLP that it has reviewed the Transaction Documents on behalf of the Independent Trustee and that, in its opinion, the Transaction Documents are consistent with the terms of the Trust Agreement and the fiduciary duties of the Independent Trustee under applicable Florida law;
(h) Additional Documents. Such other certificates, instruments, and documents as may be reasonably requested by the Seller or Seller's Counsel to effectuate the transactions contemplated by this Agreement.
Section 3.4 — Simultaneous Deliveries
All deliveries and actions to be taken at the Closing shall be deemed to occur simultaneously, and no delivery or action shall be deemed to have been taken or made until all deliveries and actions required at the Closing have been completed. No delivery or performance by either Party shall be deemed complete unless and until all other deliveries and performances at the Closing have been completed or duly waived by the Party entitled to the benefit thereof.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as of the date hereof and as of the Closing Date (except where a representation or warranty is expressly made as of a specific date, in which case such representation and warranty shall be made only as of such date) as follows:
Section 4.1 — Organization and Good Standing
(a) PCG is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida, having been organized in 2006 and continuously maintained in good standing since its date of organization. PCG has full power and authority to own, lease, and operate its properties and to carry on its business as presently conducted.
(b) Each Company Entity is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida. Each Company Entity has full power and authority to own, lease, and operate its properties and to carry on its business as presently conducted. Each Company Entity is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing, or operation of its properties makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect.
Section 4.2 — Authority; Enforceability
(a) The Seller has full power, authority, and legal capacity to execute and deliver this Agreement and each other Transaction Document to which the Seller is a party, and to perform his obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Salvatore A. Pellegrino, as the sole Managing Member of PCG, has the full right, power, and authority to act on behalf of PCG in connection with the execution, delivery, and performance of this Agreement and the Transaction Documents, and no other action, consent, or approval on the part of PCG or its members is required in connection therewith.
(b) This Agreement has been duly executed and delivered by the Seller and constitutes the legal, valid, and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights generally, and (ii) general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity).
(c) Each other Transaction Document to which the Seller is or will be a party, when executed and delivered by the Seller, will constitute the legal, valid, and binding obligation of the Seller, enforceable against the Seller in accordance with its respective terms, subject to the qualifications set forth in clause (b) above.
Section 4.3 — Title to Company Interests
(a) The Seller (acting through PCG) is the sole record and beneficial owner of each of the following Company Interests:
(i) a ninety-two percent (92%) Class A membership interest in Meridian Shores Hospitality LLC;
(ii) a one hundred percent (100%) membership interest in Costa Luma Resort Holdings LLC; and
(iii) an eighty-eight percent (88%) Class A membership interest in Azulia Beach Club LLC.
(b) The Company Interests are owned by the Seller free and clear of all Encumbrances, other than (i) restrictions on transfer set forth in the existing Operating Agreements and (ii) restrictions arising under applicable federal and state securities laws.
(c) Upon the consummation of the transactions contemplated by this Agreement, including the delivery of the Assignment Instruments and compliance with any applicable transfer provisions of the Governing Documents, the Purchaser will acquire good and valid title to the Company Interests, free and clear of all Encumbrances other than the Permitted Encumbrances.
(d) There are no outstanding agreements, arrangements, or understandings with respect to the sale, transfer, or other disposition of any Company Interest, other than this Agreement and the Transaction Documents.
Section 4.4 — No Conflicts; Consents
(a) The execution and delivery by the Seller of this Agreement and each other Transaction Document to which the Seller is a party, and the performance by the Seller of his obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby, will not (i) violate, conflict with, or result in a breach or default under any provision of the Governing Documents of PCG or any Company Entity, (ii) violate, conflict with, or result in a breach of any order, judgment, injunction, decree, or ruling of any court or Governmental Authority to which the Seller, PCG, or any Company Entity is subject, (iii) violate any applicable law, rule, or regulation, or (iv) violate, conflict with, result in a breach or default under, or give rise to a right of termination, cancellation, acceleration, or modification of any obligation under, or result in the creation of any Encumbrance on any of the Company Interests or any assets of any Company Entity under, any material agreement, contract, lease, license, permit, or other instrument to which the Seller, PCG, or any Company Entity is a party or by which any of their respective properties or assets are bound.
(b) Except as set forth on Schedule 4.4, no consent, approval, authorization, order, registration, filing, qualification, license, permit, or action of or with any court, Governmental Authority, or other Person is required in connection with the execution and delivery by the Seller of this Agreement and the other Transaction Documents, or the performance of the Seller's obligations hereunder or thereunder, or the consummation of the transactions contemplated hereby or thereby.
Section 4.5 — Company Entity Capitalization
(a) Schedule 4.5 sets forth a complete and accurate description of the authorized and outstanding membership interests of each Company Entity, including the classes, designations, and ownership percentages thereof. The capitalization of each Company Entity is as follows:
(i) Meridian Shores Hospitality LLC: The authorized membership interests consist of Class A membership interests and Class B membership interests. Ninety-two percent (92%) of the Class A membership interests are held by the Seller (through PCG), and eight percent (8%) of the Class B membership interests are held by other members as identified on Schedule 4.5.
(ii) Costa Luma Resort Holdings LLC: The authorized membership interests consist of a single class of membership interests. One hundred percent (100%) of the membership interests are held by the Seller (through PCG). There are no minority members or other interest holders.
(iii) Azulia Beach Club LLC: The authorized membership interests consist of Class A membership interests and Class B membership interests. Eighty-eight percent (88%) of the Class A membership interests are held by the Seller (through PCG), and twelve percent (12%) of the Class B membership interests are held by other members as identified on Schedule 4.5.
(b) There are no outstanding options, warrants, conversion rights, rights of exchange, subscriptions, preemptive rights, rights of first refusal, phantom equity, profits interests, or other rights, agreements, or commitments of any kind obligating any Company Entity to issue, sell, or otherwise dispose of, or to repurchase, redeem, or otherwise acquire, any membership interests or other equity interests in such Company Entity. There are no outstanding membership-interest appreciation rights, stock appreciation rights, or similar rights with respect to any Company Entity.
Section 4.6 — Financial Information
(a) The Seller has made available to the Purchaser and the Independent Trustee the unaudited financial statements and operating statements of each Company Entity for the fiscal year ended December 31, 2024, including balance sheets, income statements, and cash flow statements, together with such interim financial information as has been prepared through the date hereof (collectively, the "Financial Information"). The Financial Information has been prepared in accordance with the accounting methods consistently applied by each Company Entity and, except as may be disclosed in the notes or schedules thereto, fairly presents in all material respects the financial condition and results of operations of each Company Entity as of the dates and for the periods indicated.
(b) The 2024 net operating income ("NOI") of each Company Entity, as reflected in the Financial Information and confirmed by the Qualified Appraisal, is as follows:
(c) The estimated annual distributable cash flow from the Company Entities, on a combined basis, is approximately Four Million Eight Hundred Thousand Dollars ($4,800,000), based on the 2024 operating results and adjusted for estimated capital expenditure reserves and debt service on third-party indebtedness.
Section 4.7 — Absence of Undisclosed Liabilities
No Company Entity has any material liability, obligation, or commitment (whether accrued, absolute, contingent, unliquidated, or otherwise, and whether due or to become due) that is not reflected or reserved against in the Financial Information or disclosed on the Schedules hereto, except for (a) liabilities and obligations that have arisen in the ordinary course of business consistent with past practice since the date of the most recent Financial Information, (b) liabilities and obligations arising under this Agreement or the Transaction Documents, and (c) liabilities and obligations that, individually or in the aggregate, are not material.
Section 4.8 — Absence of Material Adverse Change
Since December 31, 2024, (a) each Company Entity has conducted its business in the ordinary course consistent with past practice, (b) there has been no Material Adverse Effect on any Company Entity, and (c) none of the Company Entities has taken any action or failed to take any action that, if taken or failed to be taken after the date of this Agreement, would require the consent of the Purchaser under Section 6.1.
Section 4.9 — Real Property
(a) Schedule 4.9 sets forth a complete and accurate description of all real property owned, leased, or otherwise occupied or used by each Company Entity (collectively, the "Real Property"). The Real Property associated with each Company Entity is as follows:
(i) Meridian Shores Hospitality LLC: The Meridian Shores Resort & Spa, a 142-room boutique resort located at 4500 Gulf Shore Boulevard, Naples, FL 34102, situated on approximately 8.6 acres of beachfront property along the Gulf of Mexico. The property includes guest rooms, suites, a full-service spa, two restaurants, conference facilities, a swimming pool, and associated amenities.
(ii) Costa Luma Resort Holdings LLC: The Costa Luma Resort, a 96-room oceanfront property located at 81700 Overseas Highway, Islamorada, FL 33036, situated in the Florida Keys on approximately 5.2 acres of oceanfront property. The property includes guest rooms, villas, a marina with 28 slips, a restaurant, a tiki bar, and water-sports facilities.
(iii) Azulia Beach Club LLC: The Azulia Beach Club, an upscale beachfront food-and-beverage and events venue located at 22 Baymont Drive, Clearwater Beach, FL 33767, situated on approximately 1.8 acres of Gulf-front property. The facility includes an open-air restaurant, event pavilion, private cabanas, and support facilities.
(b) Each Company Entity has good and marketable title to all Real Property that it owns, free and clear of all Encumbrances other than Permitted Encumbrances and such other Encumbrances as do not materially impair the use, occupancy, or value of the Real Property. With respect to any Real Property that is leased, each Company Entity holds a valid and enforceable leasehold interest therein.
(c) All Real Property is in compliance in all material respects with applicable zoning, land-use, building, health, fire, safety, and environmental laws, regulations, and ordinances. All permits, licenses, and approvals necessary for the current use and operation of the Real Property have been obtained and are in full force and effect.
(d) There are no pending or, to the Knowledge of the Seller, threatened condemnation, eminent domain, or similar proceedings affecting any portion of the Real Property.
Section 4.10 — Compliance with Laws
Each Company Entity is, and since January 1, 2022 has been, in material compliance with all applicable federal, state, and local laws, rules, regulations, ordinances, codes, and orders applicable to its business, operations, and properties, including all laws and regulations relating to liquor licensing, food service, health and safety, fire prevention, environmental protection, building codes, accessibility, employment, labor, hospitality-industry regulation, and the Florida Division of Hotels and Restaurants requirements. Each Company Entity holds all licenses, permits, and authorizations necessary for the conduct of its business as presently conducted, and all such licenses, permits, and authorizations are in full force and effect.
Section 4.11 — Tax Matters
(a) Each Company Entity has timely filed (taking into account any extensions of time within which to file) all Tax Returns required to be filed by it under applicable law. All such Tax Returns are true, correct, and complete in all material respects.
(b) Each Company Entity has timely paid all Taxes due and payable by it, whether or not shown on a Tax Return. There are no Encumbrances for Taxes on any assets of any Company Entity, other than statutory liens for Taxes not yet due and payable.
(c) No audits, examinations, investigations, or proceedings are pending or, to the Knowledge of the Seller, threatened before the Internal Revenue Service, the Florida Department of Revenue, or any other taxing authority with respect to any Company Entity or any Tax Return filed by or on behalf of any Company Entity.
(d) The Employer Identification Numbers of the Company Entities are confirmed as follows: Meridian Shores Hospitality LLC (59-4021867), Costa Luma Resort Holdings LLC (59-4173920), and Azulia Beach Club LLC (59-4285413).
(e) Each Company Entity is classified as a partnership (or, in the case of a single-member entity, a disregarded entity) for federal income-tax purposes and has not elected to be classified as a corporation or association taxable as a corporation.
Section 4.12 — Litigation
Except as set forth on Schedule 4.12, there is no material litigation, lawsuit, claim, action, proceeding, arbitration, mediation, or governmental investigation or inquiry pending or, to the Knowledge of the Seller, threatened against any Company Entity, any officer, manager, or member of any Company Entity in their capacity as such, or any of the Real Property. There are no outstanding orders, judgments, injunctions, decrees, stipulations, or awards against any Company Entity that would reasonably be expected to have a Material Adverse Effect.
Section 4.13 — Material Contracts
(a) Schedule 4.13 sets forth a complete and accurate list of all material contracts, agreements, leases, commitments, and arrangements to which any Company Entity is a party or by which any Company Entity or its assets are bound (collectively, the "Material Contracts"), including management agreements, franchise agreements, brand or affiliation agreements, equipment leases, vendor supply agreements, construction contracts, loan agreements, guarantees, employment agreements, and other contracts involving annual payments or receipts in excess of One Hundred Thousand Dollars ($100,000) or having a term in excess of one (1) year.
(b) Each Material Contract is a valid, binding, and enforceable obligation of the applicable Company Entity and, to the Knowledge of the Seller, of the other parties thereto, in each case in accordance with its terms, subject to applicable bankruptcy, insolvency, and equitable principles. No Company Entity is in material breach or default under any Material Contract, and, to the Knowledge of the Seller, no other party to any Material Contract is in material breach or default thereunder. No Company Entity has received written notice of any termination, cancellation, or material modification of any Material Contract.
Section 4.14 — Insurance
Each Company Entity maintains, and has at all relevant times maintained, insurance coverage with reputable insurance companies in amounts and covering risks that are adequate and customary for companies engaged in the hospitality industry in the State of Florida, including commercial general liability, property and casualty, business interruption, workers' compensation, and umbrella or excess liability insurance. All such insurance policies are in full force and effect, all premiums with respect thereto are current, and no Company Entity has received any notice of cancellation or non-renewal of any such policy. No Company Entity has any pending insurance claim that would reasonably be expected to have a Material Adverse Effect.