Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below:

Section 1.1 — "Agreement." "Agreement" means this Common Interest and Joint Defense Agreement, including all exhibits attached hereto and incorporated herein by reference, and any amendments or modifications made in accordance with Section 10.2 hereof.

Section 1.2 — "Common Interest Materials." "Common Interest Materials" means all documents, communications, analyses, memoranda, data, work product, legal opinions, factual assessments, strategic assessments, and any other information or materials shared between or among the Parties and/or their respective Counsel in connection with the Matter, whether oral or written, in any format (including, without limitation, el

Section 1.3 — "Counsel." (a) For VHG: Calderwood & Harkness LLP, specifically including Bernard Crawford (Responsible Partner), Renata Vasquez (Senior Associate), Nadia Petrov (Associate), and James Underwood (Associate), located at 100 Southeast Second Street, Suite 3400, Miami, FL 33131, together with any other attorneys at Calderwood & Harkness LLP who are assigned to Matter No. 1021-00005 with written notice to P

Section 1.4 — "Matter." "Matter" means the threatened wage-and-hour collective action and/or class action arising from or related to the Demand Letter dated January 14, 2026, sent by Garza, Linden & Okafor LLP on behalf of Daniela M. Serrano and the putative class and/or collective described therein, including without limitation any pre-litigation audit, investigation, negotiation, mediation, litigation, arbitration,

Section 1.5 — "Privileged Information." "Privileged Information" means information protected by the attorney-client privilege, the work-product doctrine (as defined in Fed. R. Civ. P. 26(b)(3) and applicable case law), or any other applicable privilege, protection, or immunity from disclosure under federal law or the laws of the State of Florida, including but not limited to attorney mental impressions, legal strateg

Section 1.6 — "Property." "Property" means the hotel property known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767, as more fully described in Exhibit B attached hereto.

Section 1.7 — "HMA." "HMA" means the Hotel Management Agreement dated June 1, 2021, by and between VHG and Palomar, bearing Reference Number HMA-2021-0601-PC, as may have been amended, supplemented, or restated from time to time.

ARTICLE II — COMMON INTEREST AND PURPOSE

Section 2.1 — Common Legal Interest. The Parties acknowledge and agree that they share a common legal interest in defending against the threatened wage-and-hour claims asserted in the Demand Letter to the extent such claims relate to or may affect the Property. The Parties' common legal interest arises from the interrelated nature of their respective roles under the HMA and the potential for joint-employer liability

Section 2.2 — No Joint Representation. Notwithstanding any provision of this Agreement, each Party is and shall remain represented by its own independent Counsel in connection with the Matter. Nothing in this Agreement shall be construed to create, and no Party intends to create, an attorney-client relationship between one Party's Counsel and the other Party. Calderwood & Harkness LLP represents VHG exclusively, and

Section 2.3 — Independence of Legal Strategies. Each Party retains the absolute and unrestricted right to pursue its own independent legal strategies, to negotiate its own settlements, and to assert its own defenses in connection with the Matter, subject only to the confidentiality and privilege obligations set forth in this Agreement. No Party shall be bound by any decision, concession, admission, stipulation, or li

ARTICLE III — SCOPE OF INFORMATION SHARING

Section 3.1 — Types of Common Interest Materials. The Parties anticipate that the following categories of information and materials may be shared as Common Interest Materials under this Agreement, provided that the sharing of any such materials is consistent with the procedures set forth in Section 3.3 and is undertaken in furtherance of the Parties' common legal interest: (a) Legal Memoranda and Analyses. Legal memo

Section 3.2 — Limitations on Scope. The scope of information sharing under this Agreement is subject to the following limitations: (a) No Obligation to Share. This Agreement does not obligate either Party to share any particular information or category of information. The sharing of Common Interest Materials under this Agreement is voluntary, and each Party retains sole discretion to determine what information it wil

Section 3.3 — Procedures for Sharing. The Parties agree to observe the following procedures when sharing Common Interest Materials: (a) Marking. All Common Interest Materials shared in written or electronic form shall bear the following legend on each page or, in the case of electronic communications, in the header or subject line: "COMMON INTEREST PRIVILEGED AND CONFIDENTIAL — SUBJECT TO COMMON INTEREST AGREEMENT."

ARTICLE IV — PRIVILEGE AND CONFIDENTIALITY PROTECTIONS

Section 4.1 — Preservation of Privilege. All Common Interest Materials shared under this Agreement shall retain their privileged character — whether arising under the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection — and the sharing of such materials between the Parties and their respective Counsel pursuant to this Agreement shall not be deemed a waiver of any pri

Section 4.2 — Non-Disclosure to Third Parties. Neither Party shall disclose Common Interest Materials to any third party without the prior written consent of the other Party and the other Party's Counsel. For purposes of this Section, "third party" includes, but is not limited to: (a) opposing counsel, including Garza, Linden & Okafor LLP, and any other attorneys or firms representing any plaintiff, putative class me

Section 4.3 — Compelled Disclosure. If either Party or its Counsel receives a subpoena, court order, discovery request, regulatory demand, or other legal process seeking the production or disclosure of Common Interest Materials (a "Compelled Disclosure Request"), the receiving Party shall: (a) promptly notify the other Party and its Counsel in writing within five (5) business days of receipt of the Compelled Disclosu

Section 4.4 — No Waiver by Inadvertent Disclosure. The inadvertent disclosure of Common Interest Materials to any person not authorized to receive them under this Agreement shall not constitute a waiver of any applicable privilege or protection, provided that the disclosing Party takes prompt and reasonable steps to remedy the disclosure upon learning of it. The Parties intend that this provision shall be interpreted

Section 4.5 — Use Restrictions. Common Interest Materials may be used solely in connection with the Matter and for no other purpose. Without limiting the generality of the foregoing, Common Interest Materials shall not be used by either Party against the other Party in any dispute between them, including without limitation any dispute arising under the HMA (HMA-2021-0601-PC), any indemnification or contribution claim

ARTICLE V — JOINT-EMPLOYER ANALYSIS AND COORDINATION

Section 5.1 — Cooperation on Joint-Employer Defense. The Parties agree to cooperate in good faith in analyzing the joint-employer question under the FLSA economic-reality test as it applies to their respective roles at the Property. The Parties acknowledge that the joint-employer analysis is a critical component of the defense of the Matter as it pertains to the Property and that a coordinated approach to this analys

Section 5.2 — Information Sharing for Joint-Employer Analysis. In furtherance of the cooperative joint-employer analysis contemplated by Section 5.1: (a) VHG agrees to share with Palomar's Counsel relevant provisions of the HMA, employment policies, job descriptions, organizational charts, supervisory structures, and operational procedures at the Property to the extent necessary to assist in the joint-employer analys

Section 5.3 — Reservation of Rights Regarding Joint-Employer Status. Nothing in this Agreement shall constitute, or be construed as, an admission by either Party that it is or is not a joint employer of the employees at the Property or at any other Verimark-branded location. Each Party expressly reserves all rights to argue that it is not a joint employer, to assert any affirmative defense regarding its employer stat

ARTICLE VI — ALLOCATION OF LIABILITY AND INDEMNIFICATION

Section 6.1 — Reservation of Cross-Claims and Indemnification Rights. This Agreement does not limit, waive, modify, or in any way affect any indemnification obligations, contribution rights, subrogation rights, or other allocation mechanisms that may exist as between the Parties under the HMA (HMA-2021-0601-PC), any other agreement between the Parties, or applicable law. Each Party expressly reserves all rights to se

Section 6.2 — Separate Settlements. Either Party may independently negotiate or enter into a settlement of any claims asserted against it in connection with the Matter, provided that: (a) the settling Party gives the non-settling Party at least ten (10) business days' prior written notice of any proposed settlement that could reasonably be expected to affect the non-settling Party's rights, defenses, or exposure in c

ARTICLE VII — COSTS AND EXPENSES

Section 7.1 — Separate Responsibility for Costs. Except as otherwise agreed in writing pursuant to Section 7.2, each Party shall bear its own legal fees, costs, and expenses incurred in connection with the Matter, including the fees and expenses of its own Counsel and any consultants, experts, or other professionals retained by or on behalf of such Party. By way of illustration and not limitation: (a) VHG shall be re

Section 7.2 — Shared Costs (If Any). If the Parties mutually agree to share costs for any joint activities undertaken in furtherance of the common defense — for example, the joint retention of expert witnesses, the joint commissioning of forensic analyses specific to the Property, or the joint retention of mediators or other dispute resolution professionals — such cost-sharing arrangement shall be documented in a sep

Section 7.3 — Insurance. (a) VHG maintains an Employment Practices Liability ("EPL") insurance policy issued by Pinnacle Indemnity Corp. (Policy No. PIN-EPL-2025-44781), with a per-occurrence limit of $10,000,000, an aggregate limit of $25,000,000, and a self-insured retention of $500,000 per claim. The policy period is July 1, 2025 through June 30, 2026. (b) VHG's tender of the Demand Letter and any related claims t

ARTICLE VIII — TERM AND TERMINATION

Section 8.1 — Effective Date. This Agreement shall be effective upon execution by both Parties and their respective Counsel. The date of execution shall be the date on which the last signatory executes this Agreement, which date shall be inserted on the first page hereof.

Section 8.2 — Term. This Agreement shall remain in effect until the earliest of: (a) the final resolution of the Matter as it relates to the Property, including the exhaustion of all appeals, the expiration of all applicable appeal periods, and the satisfaction of any judgments or settlements entered in connection therewith; (b) the written agreement of both Parties to terminate this Agreement, executed by both Parti

Section 8.3 — Effect of Termination. Upon termination of this Agreement for any reason: (a) Survival of Confidentiality and Privilege Obligations. The confidentiality and privilege obligations set forth in Articles III and IV shall survive the termination of this Agreement and shall remain in full force and effect indefinitely, regardless of the reason for termination. No Party shall be relieved of its obligations to

Section 8.4 — Conflicts Arising During Term. If an actual conflict of interest arises between the Parties with respect to the Matter — including, by way of example and not limitation, if one Party asserts cross-claims or indemnification demands against the other Party, or if the Parties adopt materially adverse litigation positions — the Parties shall promptly discuss in good faith whether to amend, modify, or termin

ARTICLE IX — REPRESENTATIONS AND WARRANTIES

Section 9.1 — Authority. Each Party represents and warrants to the other Party as follows: (a) VHG. VHG represents that the execution, delivery, and performance of this Agreement have been authorized by Devin K. Arroyo, General Counsel of VHG, and that such authorization is within the scope of the board authorization granted by VHG's Audit Committee at its meeting on January 29, 2026. VHG further represents that Devi

Section 9.2 — Independent Advice. Each Party represents and warrants that it has consulted with its own independent Counsel regarding the terms, conditions, and implications of this Agreement, including the effect of this Agreement on the attorney-client privilege, the work-product doctrine, and other applicable privileges and protections. Each Party acknowledges that it is entering into this Agreement voluntarily, w

Section 9.3 — No Admission. Nothing in this Agreement, and no action taken by either Party pursuant to this Agreement, shall be construed as an admission of liability, wrongdoing, fault, or joint-employer status by either Party, or as an admission that any of the allegations set forth in the Demand Letter have merit. This Agreement is entered into solely for the purpose of facilitating the Parties' common defense and

ARTICLE X — GENERAL PROVISIONS

Section 10.1 — Governing Law. This Agreement shall be governed by and construed in accordance with federal common law regarding the attorney-client privilege, the work-product doctrine, and the common-interest doctrine, to the extent that such federal common law applies to the claims and proceedings arising under the FLSA. To the extent that federal common law does not govern a particular issue arising under this Agr

Section 10.2 — Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument signed by both Parties and acknowledged by their respective Counsel. No oral modification of this Agreement shall be effective for any purpose.

Section 10.3 — Entire Agreement. This Agreement, together with its Exhibits, constitutes the entire understanding and agreement of the Parties with respect to the common-interest arrangement described herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether written or oral, relating to the subject matter hereof. For the avoidance of doubt, the HMA (HMA-202

Section 10.4 — Severability. If any provision of this Agreement, or the application thereof to any Party or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect. The Parties shall negotiate in good fa

Section 10.5 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, electronic mail (including PDF), or other electronic means shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original s

Section 10.6 — Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by overnight courier service (with confirmation of delivery), or when sent by email (with confirmation of receipt), addressed as follows: If to VHG: Devin K. Arroyo General Counsel Verimark Hospi

Section 10.7 — No Third-Party Beneficiaries. This Agreement is entered into for the sole and exclusive benefit of the Parties and their respective Counsel. Nothing in this Agreement, express or implied, is intended to confer upon any other person or entity any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement. No third party shall have standing to enforce any provision of thi

Section 10.8 — Waiver. The failure of either Party to enforce any provision of this Agreement, or to exercise any right or remedy hereunder, shall not constitute a waiver of such provision, right, or remedy, or of any other provision, right, or remedy under this Agreement. Any waiver of any provision of this Agreement must be in writing and signed by the waiving Party. A waiver on one occasion shall not be deemed a w

1. Demand Letter. On January 14, 2026, Garza, Linden & Okafor LLP ("GLO"), located at 600 Brickell Avenue, Suite 2200, Miami, FL 33131, transmitted a written demand letter (the "Demand Letter") to Verimark Hospitality Group Inc. The Demand Letter was addressed to Devin K. Arroyo, General Counsel of VHG.

2. Named Claimant. The Demand Letter was sent on behalf of Daniela M. Serrano, a former front-desk associate at the Verimark Regency Tampa property. Ms. Serrano was employed by VHG under Employee ID VHG-EMP-20220314-5587 from March 14, 2022 through August 22, 2025.

3. Categories of Alleged Violations. The Demand Letter asserts five categories of alleged wage-and-hour violations: (a) Overtime Violations. Failure to pay overtime compensation in accordance with 29 U.S.C. § 207(a), specifically alleging that VHG failed to compensate non-exempt hourly employees at a rate of one and one-half times their regular rate of pay for hours worked in excess of forty (40) hours per workweek.

4. Scope of Putative Class/Collective. The Demand Letter defines the putative class and collective as all current and former hourly, non-exempt employees at Verimark-branded properties in the State of Florida from January 2023 to the present. GLO estimates this group to encompass approximately 4,100 to 5,900 individuals across seven Verimark-branded properties in Florida.

5. Demand Amount. The Demand Letter demands total compensation in the amount of $18,500,000, inclusive of back pay, liquidated damages under 29 U.S.C. § 216(b), and attorneys' fees and costs.

6. Response Deadline. The Demand Letter sets a response deadline of February 28, 2026, and states that if VHG fails to respond or fails to engage in good-faith pre-litigation discussions, GLO intends to file a complaint in the United States District Court for the Middle District of Florida, Tampa Division.

7. VHG's Outside Counsel Engagement. VHG engaged Calderwood & Harkness LLP on January 30, 2026, to serve as outside counsel in connection with a pre-litigation wage-and-hour audit and the defense of the threatened claims. The matter is assigned Calderwood & Harkness Matter Number 1021-00005, with Bernard Crawford serving as Responsible Partner.

8. Litigation Hold. VHG triggered a litigation hold on January 16, 2026, two days after receipt of the Demand Letter. An internal litigation hold memorandum was issued on January 17, 2026, directing the preservation of all documents and electronically stored information relating to the allegations in the Demand Letter. Twenty-three (23) custodians have been identified for preservation purposes, spanning all seven Ver

9. Applicable Limitations Periods. The Demand Letter implicates the following limitations periods: (a) Two (2) years for non-willful violations of the FLSA (29 U.S.C. § 255(a)); (b) Three (3) years for willful violations of the FLSA (29 U.S.C. § 255(a)); (c) Five (5) years for claims arising under Article X, Section 24 of the Florida Constitution (pursuant to Fla. Stat. § 95.11(2)(b), applicable to actions founded on