Contract analysis

I. Introduction and Purpose Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") was retained by the Audit Committee of the Board of Directors (the "Audit Committee") of Verimark Hospitality Group Inc. ("VHG") pursuant to the engagement letter executed by Audit Committee Chair Diane Kowalski on July 17, 2023 (the "Engagement Letter"). The Firm was retained to conduct an independent internal investigation

II. Scope of the Investigation — Summary The full scope of the Investigation is defined in the Investigation Scope Memorandum & Work Plan dated July 24, 2023 (the "Work Plan"), which was distributed separately to the Audit Committee. This Section provides a summary overview for purposes of contextualizing the protocols and procedures that follow. A. The Two Workstreams The Investigation encompasses two distinct but p

1. Garrett W. Daskine — Division President, Verimark Coastal Resorts LLC. Mr. Daskine has overall operational and financial responsibility for VCR and reports to VHG's Chief Executive Officer, Margaret Calder.

2. Nicole Prescott — Vice President of Finance, Verimark Coastal Resorts LLC. Ms. Prescott oversees VCR's financial reporting, budgeting, and accounting functions and reports to Mr. Daskine with a dotted-line reporting relationship to VHG's CFO, Thomas Rhett Griffith.

3. Ryan Mateo Serrano — Controller, Verimark Coastal Resorts LLC. Mr. Serrano is responsible for VCR's day-to-day accounting operations, including revenue recognition and accounts payable processing, and reports to Ms. Prescott. The designation of these individuals as "subjects" means that evidence developed to date indicates that their conduct is within the scope of the Investigation and that they may bear some degr

III. The Client Relationship and Privilege Framework A. Identity of the Client It is critical to establish, at the outset, the precise contours of the attorney-client relationship in this matter. Calderwood & Harkness LLP represents the Audit Committee of VHG's Board of Directors. The Firm does not represent VHG's management, including the Chief Executive Officer, the Chief Financial Officer, or the General Counsel.

1. Document Markings. All privileged documents generated in connection with the Investigation — including memoranda, correspondence, reports, notes, and electronic communications — will bear the legend: "PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT." This marking serves as a visible indicator of the privileged nature of the document and supports the assertion of privilege in any sub

2. Secure Storage. All privileged materials will be stored on secured, access-controlled systems. Electronic materials will be maintained on encrypted servers and platforms accessible only to authorized personnel. Physical materials, to the extent they exist, will be maintained in locked files at Calderwood & Harkness's Miami office. Distribution of privileged materials will be strictly limited to the following autho

3. Privilege Log. A comprehensive privilege log will be maintained by the investigation team for all documents withheld or redacted on privilege grounds during the course of the Investigation. The privilege log will be prepared in accordance with applicable federal and state procedural requirements and will include, for each withheld or redacted document: the document identifier, custodian, date, author and recipient

4. No Sharing Without Authorization. No privileged materials — including memoranda, reports, interview summaries, legal analyses, or work product of any kind — may be shared with VHG management (including the CEO, CFO, or General Counsel), HSA, Westlake Burris, or any other third party without prior written authorization from the Audit Committee. This restriction is essential to prevent inadvertent waiver of the Audi

IV. Upjohn Warning Procedures A. Legal Background The Upjohn warning procedure derives from the Supreme Court's decision in Upjohn Co. v. United States, 449 U.S. 383 (1981). In Upjohn, the Court recognized that in the corporate context, the attorney-client privilege protects communications between corporate counsel and employees of the corporation when those communications are made for the purpose of obtaining legal

V. Witness Interview Protocols A. Interview Scheduling and Logistics Calderwood & Harkness will manage the scheduling of all witness interviews. The investigation team estimates that the Investigation will require approximately twenty to twenty-five interviews of fifteen to twenty unique witnesses. Some witnesses — particularly subjects and key management witnesses — may be interviewed more than once as the Investiga

1. Subject counsel may not attend interviews of other witnesses. Each attorney's attendance is limited to interviews of his or her own client.

2. Subject counsel may not direct or instruct the witness not to answer questions posed by the investigation team, except to the extent that the witness invokes a personal constitutional privilege, such as the Fifth Amendment privilege against self-incrimination. If a witness invokes the Fifth Amendment, the invocation will be noted on the record and reported to the Audit Committee.

3. Subject counsel may not engage in coaching, prompting, or otherwise directing the witness's testimony during the interview. Subject counsel may request breaks for the purpose of private consultation with their client, and such requests will be accommodated within reason.

4. Subject counsel will be expected to adhere to the confidentiality protocols described in Section XI of this memorandum, including the obligation not to disclose the substance of the interview to other subjects or their counsel. Calderwood & Harkness will establish these ground rules with each subject's personal counsel in writing prior to the first interview of each subject. If any dispute arises regarding the gro

1. The refusal or invocation will be documented in the memorandum of interview and reported promptly to the Audit Committee.

2. In the context of the Investigation's internal findings and recommendations, adverse inferences may be drawn from a subject's refusal to cooperate or invocation of the Fifth Amendment. The investigation team notes, however, that such adverse inferences are appropriate only in the internal corporate context and may not be drawn in any subsequent government proceeding.

3. The Audit Committee will be consulted regarding any personnel actions that may be appropriate in response to non-cooperation. If a subject is placed on administrative leave or terminated during the course of the Investigation, the investigation team will assess the extent to which cooperation obligations survive the termination of employment. To the extent that the subject's employment agreement, separation agreem

VI. Interactions with Subjects' Individual Counsel A. Communications Protocol All communications with the subjects of the Investigation regarding the substance of the Investigation will be conducted exclusively through their respective personal counsel: • Communications regarding Garrett W. Daskine will be directed to James Corwin Merritt, Merritt & Dunleavy LLP, Miami, FL. • Communications regarding Nicole Prescott

VII. Coordination with VHG General Counsel A. Role of Patricia Navarro Patricia Navarro serves as the General Counsel of VHG. Ms. Navarro is not a subject of the Investigation and is not believed to have any personal involvement in the matters under review. However, as the chief legal officer of VHG, Ms. Navarro occupies a unique position that requires careful delineation of her role in relation to the Investigation.

VIII. Coordination with Independent Auditor — Hargrove, Steen & Aldrich LLP A. Background. Hargrove, Steen & Aldrich LLP ("HSA") serves as the independent registered public accounting firm for VHG. HSA's lead engagement partner for the VHG audit is William "Bill" Gentry, CPA, and HSA's office responsible for the engagement is located at 101 East Kennedy Boulevard, Suite 3200, Tampa, FL 33602. As described in Section

1. Factual Information. Factual information — such as transaction data, financial records, journal entries, supporting documentation, and similar non-privileged materials — may be shared with HSA in furtherance of HSA's audit responsibilities, provided that such sharing does not result in the waiver of the Audit Committee's attorney-client privilege or attorney work-product protection. The investigation team will rev

2. Legal Conclusions and Work Product. Calderwood & Harkness's legal conclusions, mental impressions, analytical memoranda, and attorney work product will not be shared with HSA. HSA is a third party for privilege purposes, and the disclosure of privileged materials to HSA could result in waiver of the attorney-client privilege and/or the work-product protection, particularly in light of the SEC's position that volun

3. HSA Work Papers and Findings. HSA may be asked to share its audit work papers, interim review findings, and other materials relevant to the revenue-recognition issues and internal-controls assessment with the investigation team. Calderwood & Harkness will coordinate such requests through HSA's engagement partner, William Gentry, and will comply with PCAOB rules governing access to audit work papers. C. Interview o

IX. Coordination with Outside Securities Counsel — Westlake Burris & Holt LLP A. Role of Westlake Burris Westlake Burris & Holt LLP ("Westlake Burris") serves as VHG's regular outside securities counsel. The lead partner on the VHG relationship is Irene Castellanos, and Westlake Burris's offices are located at 600 Brickell Avenue, Suite 3100, Miami, FL 33131. Westlake Burris advises VHG on its ongoing SEC disclosure

1. Form 8-K Filings. If the Investigation determines that VHG's previously filed financial statements contain material misstatements and cannot be relied upon, VHG may be required to file a Form 8-K under Item 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review). Calderwood & Harkness will provide Westlake Burris with the factual findings necessary for We

2. Periodic Reports. To the extent that the Investigation's findings affect VHG's ongoing periodic reporting obligations — including the accuracy of financial statements included in Forms 10-K and 10-Q, the adequacy of disclosure controls and procedures, and the effectiveness of internal controls over financial reporting — Calderwood & Harkness will coordinate with Westlake Burris to ensure that VHG's disclosures are

3. Restatement Considerations. If a restatement of previously filed financial statements is determined to be necessary, Calderwood & Harkness and Westlake Burris will coordinate on the scope and timing of the restatement, the content of the related disclosures, and the notification of HSA and the SEC as required by applicable rules. Calderwood & Harkness and Westlake Burris will maintain a common-interest relationshi

X. Document Collection, Preservation, and Review A. Preservation Notices Document-preservation notices were issued on July 24, 2023, the date on which the Investigation was formally opened. Two categories of preservation notices were distributed:

1. Company-Wide Notice. A general preservation notice was issued to all VHG officers and relevant corporate-level personnel, directing them to preserve all documents and ESI potentially relevant to the Investigation.

2. Targeted Custodian Notices. Targeted preservation notices were issued to specific VCR custodians, including Garrett W. Daskine, Nicole Prescott, Ryan Mateo Serrano, and other identified VCR finance and operations staff whose files may contain documents relevant to the Investigation. The preservation obligations communicated in these notices cover all documents and electronically stored information created, sent, r