1021-00005 · Verimark Hospitality Group · Engagement

engagement-letter-vhg.docx DOCUMENT Finance & Banking

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PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP Attorneys at Law 100 Southeast Second Street, Suite 3400 Miami, FL 33131 Telephone: (305) 555-7200 Facsimile: (305) 555-7201 www.calderwoodharkness.com

January 30, 2026

Devin K. Arroyo, Esq. General Counsel Verimark Hospitality Group Inc. 2400 Bayshore Boulevard, Suite 1100 Tampa, FL 33629

Re: Engagement of Calderwood & Harkness LLP — Pre-Litigation Wage-and-Hour Audit (Scoping Phase) Matter Number: 1021-00005 Client: Verimark Hospitality Group Inc.

Dear Mr. Arroyo:

Section 1: Purpose and Confirmation of Engagement

This letter confirms the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Verimark Hospitality Group Inc. ("VHG" or the "Company"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol VMHG, with its principal executive offices located at 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629 (Employer Identification Number: 84-3291076). We are grateful for your selection of C&H to serve as outside counsel to VHG in connection with this important matter, and we are committed to providing the highest quality of legal service throughout the course of this engagement.

This engagement arises from the demand letter dated January 14, 2026, sent by the law firm of Garza, Linden & Okafor LLP on behalf of their client, Daniela M. Serrano, a former hourly, non-exempt employee of VHG. The demand letter alleges systemic wage-and-hour violations across several Verimark-branded hotel and resort properties located in the State of Florida. Among other things, the demand letter contends that VHG engaged in a pattern and practice of underpaying its hourly, non-exempt workforce through various policies and practices that are alleged to violate both federal and state wage-and-hour laws.

Specifically, the demand letter threatens the initiation of a collective action and/or class action against VHG under the Fair Labor Standards Act of 1938, as amended ("FLSA"), 29 U.S.C. § 201 et seq., and the minimum-wage provisions of the Florida Constitution, Article X, Section 24. The demand letter demands monetary compensation on behalf of Ms. Serrano individually and on behalf of a putative class and/or collective of similarly situated current and former employees, and it seeks an aggregate settlement amount of $18.5 million in alleged damages, inclusive of unpaid wages, liquidated damages, and attorney's fees.

The demand letter sets forth a response deadline of February 28, 2026, and warns that if the parties are unable to reach a resolution within that timeframe, Garza, Linden & Okafor LLP intends to file suit in the United States District Court for the Middle District of Florida, Tampa Division.

On January 29, 2026, VHG's Audit Committee of the Board of Directors authorized the engagement of outside counsel to conduct a comprehensive pre-litigation wage-and-hour audit of the Company's pay practices at the affected properties. The Audit Committee established an aggregate budget authorization of up to Three Hundred Fifty Thousand Dollars ($350,000) for the initial scoping phase of this engagement, inclusive of legal fees payable to C&H and consultant costs for any expert or consulting firm retained in connection with the audit.

For internal tracking and billing purposes, this matter has been assigned C&H Matter Number 1021-00005. All correspondence, invoices, and communications relating to this engagement should reference this matter number.

Section 2: Scope of Representation

C&H is engaged to perform a comprehensive pre-litigation wage-and-hour audit during the scoping phase of this engagement. The purpose of this audit is to assess the merits and potential exposure arising from the allegations set forth in the January 14, 2026 demand letter, to evaluate VHG's compliance with applicable federal and state wage-and-hour laws, and to develop a strategic framework for responding to the demand letter and preparing for possible litigation. The scoping phase shall include the following work streams:

2.1 Analysis of Demand Letter Allegations

C&H will conduct a thorough review and analysis of the five categories of allegations raised in the January 14, 2026 demand letter from Garza, Linden & Okafor LLP. These categories are summarized as follows:

1. Overtime Violations. The demand letter alleges that VHG failed to pay overtime compensation at one-and-one-half times the regular rate of pay for all hours worked in excess of forty (40) hours per workweek, in violation of Section 207(a) of the FLSA, 29 U.S.C. § 207(a). The demand letter asserts that this violation was pervasive across multiple properties and job categories and was facilitated by timekeeping and scheduling practices that systematically underreported compensable hours.

2. Illegal Automatic Meal-Break Deductions. The demand letter alleges that VHG maintained a company-wide policy of automatically deducting thirty (30) minutes from each employee's recorded time for each shift to account for an unpaid meal break, despite the fact that employees were allegedly required to remain on-call during such meal periods and were frequently interrupted or unable to take an uninterrupted, bona fide meal break. The demand letter contends that this practice resulted in systematic underpayment of wages owed to hourly employees.

3. Failure to Compensate for Pre-Shift and Post-Shift Off-the-Clock Work. The demand letter alleges that VHG failed to compensate hourly, non-exempt employees for time spent on pre-shift and post-shift activities that were integral and indispensable to their principal work activities. These activities are alleged to include, but are not limited to, donning and doffing required uniforms and personal protective equipment, booting up and logging into computer systems and point-of-sale terminals, and participating in mandatory shift-handover briefings. The demand letter estimates that such uncompensated time amounted to approximately fifteen (15) to twenty-five (25) minutes per shift per affected employee.

4. Failure to Pay Florida Minimum Wage for Tipped Employees. The demand letter alleges that VHG failed to pay the applicable Florida minimum wage to tipped employees, including servers, bartenders, and room-service attendants. Specifically, the demand letter contends that VHG improperly claimed a tip credit without satisfying the notice and recordkeeping requirements under Florida law and that, in certain instances, tipped employees' total compensation (direct wages plus tips) fell below the applicable Florida minimum wage.

5. Willful Misclassification of Hourly Roles as Exempt. The demand letter alleges that VHG willfully misclassified certain "lead" and "senior" hourly roles—including Lead Housekeeper, Senior Front Desk Agent, Lead Banquet Server, and Senior Maintenance Technician—as exempt from overtime under the FLSA's administrative exemption, despite the fact that these employees allegedly did not satisfy the salary-basis test or the duties test for the administrative exemption as set forth in the applicable regulations.

C&H will analyze the factual basis and legal sufficiency of each of these allegations, assess the degree of risk each presents, and identify areas where additional factual investigation or data analysis is required during the audit.

2.2 Preliminary Exposure Assessment

C&H will prepare a preliminary exposure assessment to quantify VHG's potential financial liability under multiple scenarios. This modeling will encompass the following scenarios:

• Narrow Scenario: A two-year lookback period for non-willful FLSA violations under 29 U.S.C. § 255(a), limited to those job categories and properties for which the demand letter provides the strongest evidentiary support.

• Mid-Range Scenario: A blended analysis incorporating both the two-year and three-year FLSA lookback periods, depending on the likelihood that a court would find willfulness with respect to specific categories of violations, together with applicable Florida constitutional claims within the applicable limitations period.

• Broad Scenario: A three-year lookback period for willful FLSA violations under 29 U.S.C. § 255(a), combined with a five-year lookback for claims arising under the Florida Constitution's minimum-wage provisions, as permitted under Florida law.

In each scenario, C&H will model potential exposure both on an individual basis and on a collective/class-wide basis, taking into account estimated opt-in and class-membership rates, hours-worked data, applicable pay rates, and the potential for liquidated damages, attorney's fees, and costs. C&H will evaluate the demand amount of $18.5 million set forth in the demand letter and assess the realistic range of VHG's exposure in light of the available facts and applicable law.

2.3 Legal Research

C&H will conduct legal research on the following topics, which are central to the assessment of VHG's potential liability and the development of a defense strategy:

• Applicable statutes of limitations for FLSA claims under 29 U.S.C. §§ 255(a) and 216(b), including the distinction between willful and non-willful violations and the standard for establishing willfulness, as well as the statute of limitations for claims arising under the Florida Constitution's minimum-wage provisions under Florida Statutes § 95.11(2)(b).

• Analysis of the FLSA administrative exemption, 29 C.F.R. § 541.200, as applied to VHG's role classifications, including an evaluation of whether the duties and compensation of the "lead" and "senior" positions identified in the demand letter satisfy the salary-basis and duties tests for exemption.

• Analysis of VHG's automatic meal-break deduction practices under 29 C.F.R. § 785.19, including the requirements for a bona fide meal period, the employer's obligation to relieve employees of all duties during a meal break, and the legal consequences of automatic deductions where employees are not fully relieved of duties.

• Analysis of Florida tipped-employee minimum-wage compliance under Article X, Section 24 of the Florida Constitution and applicable implementing regulations, including the requirements for claiming a tip credit, the notice obligation, and the calculation of the tipped minimum wage.

• Research on the compensability of pre-shift and post-shift activities under the Portal-to-Portal Act of 1947, 29 U.S.C. §§ 251–262, and the continuous-workday doctrine, including the standard for determining whether donning and doffing, system boot-up time, and shift-handover briefings are integral and indispensable to an employee's principal activities.

• Analysis of FLSA collective-action conditional certification standards as applied in the United States District Court for the Middle District of Florida, including an assessment of the likelihood that the putative collective described in the demand letter would meet the "similarly situated" standard under 29 U.S.C. § 216(b) and applicable precedent.

2.4 Data Collection and Preservation

C&H will coordinate the collection of documents, data, and electronically stored information ("ESI") necessary to perform the pre-litigation audit. This work stream will include the following activities:

• Coordination of document and data collection from VHG's internal systems, including human resources records, employee handbooks, written policies and procedures, timekeeping records (maintained through the Luminos TimeTrack system), scheduling records, payroll registers, tip-pool records, meal-break acknowledgment forms, employment agreements, and role and job-description documents.

• Coordination of data collection from Luminos Payroll Solutions Inc., VHG's outsourced payroll processor (account number LTT-VHG-2022-0041), including historical payroll data, time-and-attendance records, wage statements, and related documentation for the relevant lookback period.

• Verification and supplementation of VHG's internal litigation hold, which was issued on January 17, 2026, in response to receipt of the demand letter. C&H will review the scope of the existing litigation hold, confirm that it adequately covers all relevant custodians and data sources, and recommend any necessary modifications. C&H's preliminary review has identified twenty-three (23) custodians whose documents and communications are subject to preservation, and C&H will work with VHG's IT and HR departments to ensure that preservation obligations are being met.

• Issuance of data-preservation requests to Luminos Payroll Solutions Inc. to ensure that all relevant data in the possession of VHG's outsourced payroll processor is preserved and available for production in connection with the audit.

2.5 Audit Scope Design

C&H will develop a proposed audit scope and methodology for the comprehensive wage-and-hour audit, covering the seven Verimark-branded properties identified in the demand letter as the subject of the alleged violations. These properties are:

1. Verimark Regency Tampa (Tampa, Florida)

2. Verimark Grand Orlando (Orlando, Florida)

3. Verimark Shores Clearwater (Clearwater, Florida)

4. Verimark Bayfront St. Petersburg (St. Petersburg, Florida)

5. Verimark Resort & Spa Boca Raton (Boca Raton, Florida)

6. Verimark Oceanview Fort Lauderdale (Fort Lauderdale, Florida)

7. Verimark Key West Collection (Key West, Florida)

The audit methodology will be designed as a phased approach encompassing four principal stages: (i) document collection and data aggregation from each property and from centralized corporate systems; (ii) statistical sampling of timekeeping, payroll, and scheduling data to identify patterns and anomalies indicative of potential violations; (iii) employee interviews and management consultations at each property, designed to assess actual workplace practices and compare them to written policies; and (iv) remediation recommendations identifying any policies or practices that should be modified or discontinued to achieve compliance and reduce litigation exposure. C&H will present the proposed audit scope and methodology to VHG's General Counsel and Audit Committee for review and approval before commencing the full audit.

2.6 Joint-Employer Analysis

C&H will analyze the potential for joint-employer liability between VHG and Palomar Realty Partners LLC ("Palomar") with respect to the Verimark Shores Clearwater property. This property is operated under a Hotel Management Agreement between VHG and Palomar, designated as HMA-2021-0601-PC, dated June 1, 2021. C&H will review the terms of the management agreement and assess whether the relationship between VHG and Palomar with respect to the Clearwater property's workforce could give rise to joint-employer status under the FLSA and applicable Department of Labor guidance and case law. This analysis will include an evaluation of the degree of control exercised by each party over the terms and conditions of employment, scheduling, hiring and termination decisions, payroll administration, and supervision of the affected hourly employees.

2.7 Insurance Tender

C&H will prepare and submit a notice of claim and tender letter to VHG's Employment Practices Liability ("EPL") insurer, Pinnacle Indemnity Corp., under policy number PIN-EPL-2025-44781. The relevant policy provides coverage with the following limits and terms:

• Per-occurrence limit: $10,000,000

• Aggregate limit: $25,000,000

• Self-insured retention per claim: $500,000

C&H will analyze the EPL policy to determine the extent of coverage available for the wage-and-hour claims asserted in the demand letter, including any exclusions, conditions, or limitations that may affect the availability of coverage. The Firm will ensure that the notice of claim is submitted in compliance with the policy's notice requirements, which require notice to the carrier within sixty (60) days of VHG's receipt of the demand. Given that VHG received the demand letter on or about January 14, 2026, the policy notice deadline is March 15, 2026, and C&H will take all necessary steps to ensure timely compliance with this deadline.

2.8 Response to Demand Letter

C&H will draft a response to the January 14, 2026 demand letter from Garza, Linden & Okafor LLP for VHG's review and approval prior to submission. The draft response will be designed to preserve all of VHG's rights and defenses while opening lines of communication with opposing counsel in a manner consistent with VHG's strategic objectives. Given the volume of work required during the scoping phase, C&H anticipates that VHG may wish to request a reasonable extension of the February 28, 2026 response deadline, and C&H will include a proposed extension request as part of the draft response, subject to VHG's approval.

2.9 Board and Management Advisory

C&H will prepare and deliver a presentation to VHG's Board of Directors and/or Audit Committee summarizing the findings of the scoping-phase audit, including the preliminary exposure assessment, the results of the legal research, the status of data collection and preservation efforts, and the proposed audit scope and methodology for the next phase of the engagement. The presentation will include advice regarding remediation options that VHG may consider to address identified compliance gaps and a litigation-avoidance strategy designed to minimize VHG's financial exposure and reputational risk.

2.10 Evaluation and Engagement of Consultants

C&H will evaluate the qualifications and suitability of Ridgepoint Advisory Group LLC ("Ridgepoint") to serve as a forensic payroll analytics and damages-modeling consultant in connection with this engagement. The anticipated lead consultant from Ridgepoint is Dr. Alicia Tran, CPA, CFF, who has extensive experience in wage-and-hour disputes in the hospitality industry. If, upon completion of C&H's evaluation, VHG approves the engagement of Ridgepoint, the engagement will be structured under the direction and control of C&H to preserve attorney-client privilege and work-product protection over Ridgepoint's work product and communications with C&H. The estimated fees for Ridgepoint's services during the scoping phase are $85,000 to $120,000, depending on the volume of data analyzed and the complexity of the damages modeling required.

Section 3: Scope Limitations

The parties acknowledge and agree that this engagement is limited in scope as described in this Section 3. VHG should be aware of these limitations in order to ensure that it obtains all necessary advice and representation from other professionals as appropriate.

This engagement is limited to the scoping phase of the pre-litigation wage-and-hour audit as described in Section 2 above. The Firm's representation of VHG is confined to the work streams identified in that Section and does not extend beyond the completion of the scoping phase and delivery of the scoping-phase report and recommendations.

This engagement does not include representation of VHG in any litigation, arbitration, administrative proceeding, or other dispute-resolution process. Should litigation be filed by Garza, Linden & Okafor LLP or any other party, or should litigation become imminent in the judgment of C&H or VHG, the scope and terms of C&H's engagement will be revisited and documented in a supplemental engagement letter, which will address, among other things, the scope of litigation representation, staffing, fees, budgeting, and other terms and conditions applicable to the litigation phase.

This engagement does not include advice on tax, accounting, or securities-disclosure matters, including but not limited to any obligations VHG may have to disclose the pending demand or any related contingent liabilities in its periodic filings with the U.S. Securities and Exchange Commission. VHG should consult its independent auditors, Hargrove Kessler & Co. LLP, and its securities counsel and other advisors as appropriate regarding such matters.

This engagement does not include representation of any VHG affiliate, subsidiary, officer, director, employee, or agent in their individual capacity unless separately agreed in writing between C&H and such individual. To the extent any individual associated with VHG has or may have interests that differ from those of the Company, C&H recommends that such individual obtain independent legal counsel.

Section 4: Engagement Team

The following attorneys will form the core engagement team for this matter:

Bernard Crawford will serve as the Responsible Partner and primary point of contact for VHG on this engagement. Mr. Crawford will have overall responsibility for the strategic direction and quality of the Firm's work product and will be available to VHG's General Counsel and other designated contacts for consultations and status updates throughout the course of the engagement.

Renata Vasquez will serve as the Billing Partner and will be responsible for overseeing the Firm's compliance with the fee arrangements and budget parameters set forth in this letter. Ms. Vasquez will also contribute substantive work on the engagement, particularly with respect to the legal research and exposure assessment work streams.

Nadia Petrov will serve as the Lead Associate and will manage the day-to-day execution of the engagement, including coordination of data collection, supervision of document review, preparation of memoranda and analyses, and liaison with VHG personnel and outside consultants.

James Underwood will serve as the Working Associate and will provide support across all work streams, including legal research, drafting, and data analysis.

Additional attorneys, paralegals, or support staff may be assigned to this matter as the needs of the engagement require. C&H will provide advance notice to VHG before assigning any additional timekeepers, and all such timekeepers will bill at rates consistent with the discount structure described in Section 5 below.

VHG's primary contacts for this engagement are:

• Devin K. Arroyo, General Counsel

• Carla S. Whitfield, Vice President, Human Resources

• Enrique J. Fuentes, Director, Payroll & Workforce Compliance

C&H understands that Malik P. Jefferson, Senior Vice President of Operations, may also be consulted as necessary regarding property-level operations and practices.

Section 5: Fees and Billing Arrangements

5.1 Billing Basis

Fees for legal services rendered by C&H in connection with this engagement will be charged on an hourly basis, calculated by multiplying the number of hours or fractions thereof worked by each timekeeper by the applicable discounted hourly rate. Time will be recorded in increments of one-tenth of an hour (six minutes). Fees for each billing period will reflect the actual time spent by each timekeeper on matters reasonably related to the scope of this engagement.

5.2 Hourly Rates

In recognition of the existing client relationship between C&H and VHG, and in appreciation of VHG's continued confidence in the Firm, C&H is pleased to offer a ten percent (10%) courtesy discount off the Firm's standard hourly rates for all timekeepers assigned to this matter. The standard rates, discounts, and resulting discounted rates for the core engagement team are as follows:

Paralegal and legal-support-staff rates will be communicated separately to VHG at the time of assignment and will also reflect the ten percent (10%) courtesy discount off the Firm's standard rates for such timekeepers.

The Firm reserves the right to adjust its standard hourly rates annually, effective on January 1 of each year, with not less than thirty (30) days' prior written notice to VHG. Any such adjustment shall be subject to the same ten percent (10%) courtesy discount described herein.

5.3 Scoping-Phase Budget Estimate

Based on C&H's preliminary assessment of the scope of work required during the scoping phase, the estimated legal fees for C&H's services are in the range of $175,000 to $225,000. This estimate encompasses all of the work streams described in Section 2 above, including the analysis of the demand letter, the preliminary exposure assessment, legal research, data collection and preservation coordination, audit scope design, joint-employer analysis, insurance tender, demand-letter response, board and management advisory, and consultant evaluation.

This estimate is exclusive of costs associated with any outside consultants retained in connection with the engagement. If VHG approves the engagement of Ridgepoint Advisory Group LLC, the estimated fees for Ridgepoint's services during the scoping phase are $85,000 to $120,000, as described in Section 2.10 above.

The combined legal fees and consultant costs are expected to fall within the aggregate budget of $350,000 authorized by VHG's Audit Committee on January 29, 2026.

This estimate is provided for budgeting purposes only and does not constitute a fee cap, a flat fee, or a guaranteed maximum price. Actual fees will depend on a number of factors, including the nature and volume of work required, the scope and complexity of the data collected, the complexity of the legal issues encountered, the level and frequency of interaction with VHG personnel and third parties, and any developments in the underlying matter that may require additional work. C&H will promptly notify VHG if actual fees are expected to materially exceed the estimate provided herein and will seek authorization from VHG before incurring fees that would cause total engagement costs to exceed the board-authorized budget cap of $350,000.

5.4 Disbursements and Expenses

In addition to professional fees, VHG will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by C&H in connection with this matter. Such expenses may include, but are not limited to, the following:

• Travel expenses (airfare, lodging, ground transportation, meals) for any necessary travel to VHG properties or other locations in connection with the audit

• Court reporter fees, transcript costs, and videography fees (if applicable)

• Photocopying and document reproduction charges

• Electronic legal research charges (e.g., Westmark Data Systems, Sundial Solutions)

• Express delivery and courier charges

• Long-distance telephone and video-conferencing charges

• Filing fees

• Other reasonable costs directly related to the engagement

Third-party consultant fees, including any fees charged by Ridgepoint Advisory Group LLC, will be billed separately and directly to VHG by the consultant, or, if the parties agree, will be passed through C&H's invoices. In the event that consultant fees are passed through C&H's invoices, such fees will be separately itemized and will not include any markup by the Firm.

5.5 Invoicing and Payment Terms

C&H will issue monthly invoices to VHG for professional fees and disbursements incurred during the preceding calendar month. Each invoice will include a detailed description of the services rendered, broken down by timekeeper, including the name and billing rate of each timekeeper, the number of hours worked, a narrative description of the tasks performed, and the total fees for each timekeeper. Disbursements will be separately itemized on each invoice.

Payment of each invoice is due within thirty (30) days of the invoice date. Invoices should be remitted to C&H's accounts-receivable department at the address set forth in the letterhead above, or by electronic transfer to a bank account designated by C&H, the details of which will be provided upon request.

Any invoice that remains unpaid beyond thirty (30) days from the invoice date will accrue interest at the rate of one percent (1%) per month (twelve percent (12%) per annum) on the unpaid balance, or the maximum rate permitted by applicable law, whichever is less. The accrual of interest shall begin on the thirty-first day following the invoice date and shall continue until the outstanding balance is paid in full.

Section 6: Client Responsibilities

The success of this engagement depends in significant part on VHG's timely cooperation and responsiveness. VHG agrees to cooperate fully with C&H in connection with this engagement, including by undertaking the following responsibilities:

• Document and Data Access. VHG will provide C&H with timely access to all documents, data, and electronically stored information relevant to the engagement, including but not limited to Luminos TimeTrack records, payroll registers, employee handbooks, written HR policies and procedures, scheduling records and shift assignments, tip-pool records and tip-reporting data, employee personnel files, employment agreements, role descriptions and classification memoranda, training records, meal-break acknowledgment forms, and such other materials as C&H may specify in data collection requests issued during the course of the engagement.

• Personnel Availability. VHG will make relevant Company personnel available for interviews, consultations, and meetings with C&H on a reasonably prompt basis. This includes the twenty-three (23) identified custodians whose documents are subject to the litigation hold, as well as VHG's designated key contacts for this engagement: Devin K. Arroyo, General Counsel; Carla S. Whitfield, Vice President, Human Resources; Enrique J. Fuentes, Director, Payroll & Workforce Compliance; and Malik P. Jefferson, Senior Vice President of Operations.

• Prompt Notification. VHG will promptly notify C&H of any new developments, communications, or events relevant to the matter, including but not limited to any additional communications from Garza, Linden & Okafor LLP, the filing of any lawsuit or administrative complaint, any contact from regulatory agencies, any media inquiries relating to the demand or the underlying allegations, and any internal developments that may affect the scope or direction of the engagement.

• Litigation Hold Compliance. VHG will maintain and enforce the litigation hold issued on January 17, 2026, in accordance with C&H's advisory letter and any supplemental preservation instructions issued by C&H. VHG will take all reasonable steps to ensure that relevant documents and ESI are not destroyed, altered, or discarded, and will promptly report to C&H any known or suspected breaches of the litigation hold.

Section 7: Attorney-Client Privilege and Confidentiality

All communications between C&H and VHG in connection with this engagement, including oral communications, written correspondence, memoranda, analyses, and work product, are intended to be confidential and protected by the attorney-client privilege and/or the work-product doctrine to the fullest extent permitted by applicable law. These protections are vital to ensuring the candor and completeness of communications between the Firm and VHG, and both parties recognize the importance of preserving these protections throughout the engagement.

VHG should take care not to disclose privileged communications or work product to third parties without the prior consent of C&H, as such disclosure may result in a waiver of the attorney-client privilege or work-product protection, which could have significant consequences in the event of litigation or other proceedings. VHG should ensure that privileged materials are shared only with those individuals within VHG who have a need to know in connection with the subject matter of this engagement.

In the event VHG approves the engagement of Ridgepoint Advisory Group LLC or any other consultant in connection with this matter, C&H recommends that such engagement be structured under the direction and control of C&H to preserve attorney-client privilege and work-product protection over the consultant's work product, analyses, and communications with C&H. To this end, C&H will prepare a consulting agreement between C&H and Ridgepoint (or such other consultant) that includes appropriate confidentiality and privilege-protection provisions, and C&H will direct and supervise the consultant's work in a manner designed to maximize the applicability of the work-product doctrine.

If a common-interest agreement or joint-defense agreement is entered into with Palomar Realty Partners LLC or any other party in connection with this matter, C&H will advise VHG on appropriate privilege-protection protocols, including the terms of any such agreement, the scope of shared information, and the steps necessary to avoid inadvertent waiver of applicable privileges.

Section 8: Conflicts of Interest

C&H has conducted a comprehensive conflicts-of-interest check in connection with this engagement in accordance with the Firm's standard procedures and the applicable rules of professional conduct. Based on the results of this check, the Firm has determined that no current conflicts of interest exist that would preclude C&H from representing VHG in this matter.

The conflicts search encompassed the following parties and their known affiliates:

• Garza, Linden & Okafor LLP (opposing counsel)

• Daniela M. Serrano (claimant)

• Palomar Realty Partners LLC (potential joint employer)

• Luminos Payroll Solutions Inc. (VHG's outsourced payroll processor)

• Pinnacle Indemnity Corp. (VHG's EPL insurer)

The results of the conflicts check were reviewed and cleared by Bernard Crawford on January 29, 2026. A copy of the Conflicts Clearance Memorandum is enclosed with this letter for VHG's records.

VHG acknowledges that C&H is a large, multi-office law firm with numerous practice groups and client relationships spanning a wide range of industries and legal disciplines. C&H may currently represent, or may in the future represent, other clients in matters that are wholly unrelated to VHG or to the subject matter of this engagement. Such representations do not give rise to a conflict of interest with respect to this engagement. In the event that a potential conflict of interest arises during the course of this engagement, C&H will promptly notify VHG and discuss appropriate steps to address the conflict, which may include obtaining an informed written waiver from all affected parties or, if the conflict cannot be resolved, withdrawal from the representation in accordance with Section 9 below.

Section 9: Termination

Either party may terminate this engagement at any time upon written notice to the other party. C&H's obligation to continue providing legal services under this engagement letter will cease upon the effective date of such termination, subject to the Firm's ethical obligations as described below.

In the event of termination by VHG, VHG will remain responsible for payment of all fees and expenses incurred by C&H through the date of termination, in accordance with the fee arrangements set forth in Section 5 above. C&H will issue a final invoice reflecting all outstanding fees and expenses within thirty (30) days following the date of termination.

In the event of termination by C&H, the Firm will take reasonable steps to protect VHG's interests during the transition period, including providing VHG with reasonable notice of the termination, cooperating in the orderly transfer of files, documents, and work product to successor counsel designated by VHG, and complying with all applicable ethical obligations governing withdrawal from representation.

Termination of this engagement, whether initiated by VHG or by C&H, will not affect (i) C&H's continuing duty to maintain the confidentiality of VHG's information and to protect the attorney-client privilege and work-product protections applicable to the Firm's work on this matter, or (ii) VHG's obligation to pay all outstanding invoices for fees and expenses incurred prior to the date of termination.

Section 10: Document Retention

Upon conclusion of the engagement, C&H will retain client files—including both physical and electronic files—in accordance with the Firm's document-retention policy. Physical and electronic files will be maintained for a period of seven (7) years following the close of the matter, unless VHG requests the return of original documents or a longer retention period. At the expiration of the seven-year retention period, C&H reserves the right to destroy the files in its possession, without further notice to VHG, unless VHG has previously requested that the files be returned or retained for a longer period.

VHG may request the return of its files at any time during or after the engagement, subject to payment of all outstanding fees and expenses owed to C&H. Upon receipt of such a request and payment of any outstanding balance, C&H will promptly return or make available for pickup the requested files. C&H may retain copies of the files for its own records, subject to its continuing confidentiality obligations.

Section 11: Limitation of Liability

C&H's aggregate liability to VHG in connection with this engagement, whether arising in contract, tort, or otherwise, shall not exceed the total amount of fees actually paid by VHG to C&H under this engagement letter. This limitation applies to all claims arising out of or relating to the Firm's performance or non-performance of services under this engagement, including but not limited to claims for negligence, breach of contract, or breach of fiduciary duty. Notwithstanding the foregoing, this limitation of liability shall not apply to claims arising from the Firm's gross negligence or willful misconduct. In no event shall C&H be liable for any consequential, incidental, indirect, special, or punitive damages in connection with this engagement, regardless of the theory of liability.

Section 12: 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 or the services provided hereunder, including any dispute concerning the interpretation, validity, or enforceability of this letter, shall be resolved by binding arbitration in Miami, Florida, administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with such rules. The arbitrator's decision shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorney's fees in connection with the arbitration, unless the arbitrator determines that an award of costs or fees is warranted under applicable law.

Section 13: Entire Agreement / Amendments

This engagement letter constitutes the entire agreement between C&H and VHG with respect to the engagement described herein. This letter sets forth the complete understanding of the parties regarding the scope, terms, and conditions of C&H's representation of VHG in connection with the pre-litigation wage-and-hour audit (scoping phase) referenced in Section 1 above.

This letter supersedes any and all prior oral or written communications, negotiations, proposals, or understandings between the parties regarding the same subject matter, whether formal or informal.

This letter may not be amended, modified, or supplemented except by a written instrument duly executed by authorized representatives of both C&H and VHG. No waiver of any provision of this letter shall be effective unless made in writing and signed by the party granting the waiver.

Section 14: Acceptance and Countersignature

We respectfully request that VHG indicate its acceptance of the terms and conditions set forth in this engagement letter by executing the acknowledgment and acceptance block below and returning a signed copy of this letter to the Firm. A signed copy may be returned by hand delivery, overnight courier, U.S. mail, or electronic transmission (including PDF via email) to Bernard Crawford at the address or email set forth in the Firm's letterhead.

This engagement shall be deemed effective as of January 30, 2026, upon the Firm's receipt of the countersigned copy of this letter.

We greatly appreciate VHG's confidence in Calderwood & Harkness LLP, and we look forward to working with you, Ms. Whitfield, Mr. Fuentes, and the entire VHG team on this important matter. Please do not hesitate to contact me directly at (305) 555-7215 or bcrawford@calderwoodharkness.com if you have any questions regarding the terms of this letter or any other aspect of the engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Bernard Crawford Partner, Labor & Employment Calderwood & Harkness LLP Telephone: (305) 555-7215

Email: bcrawford@calderwoodharkness.com

By: ________

Renata Vasquez Partner, Labor & Employment Calderwood & Harkness LLP Telephone: (305) 555-7218

Email: rvasquez@calderwoodharkness.com

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Verimark Hospitality Group Inc., hereby acknowledges receipt of this engagement letter dated January 30, 2026, confirms that the undersigned is duly authorized to execute this letter on behalf of the Company, and accepts the terms and conditions set forth herein.

ACKNOWLEDGED AND ACCEPTED:

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Devin K. Arroyo, Esq.

Title: General Counsel

Date: ________

By: ________

Name: Theodore R. Langford

Title: Chief Executive Officer

Date: ________

Enclosures:

• Conflicts Clearance Memorandum (for VHG's records)

cc: (via email)

• Theodore R. Langford, Chief Executive Officer, Verimark Hospitality Group Inc.

• Marguerite A. Dunning, Chief Financial Officer, Verimark Hospitality Group Inc.

• Carla S. Whitfield, Vice President, Human Resources, Verimark Hospitality Group Inc.

• Renata Vasquez, Partner, Calderwood & Harkness LLP

• Nadia Petrov, Senior Associate, Calderwood & Harkness LLP

• James Underwood, Associate, Calderwood & Harkness LLP

Attorney	Role	Title
Bernard Crawford	Responsible Partner	Partner, Labor & Employment
Renata Vasquez	Billing Partner	Partner, Labor & Employment
Nadia Petrov	Lead Associate	Senior Associate, Labor & Employment
James Underwood	Working Associate	Associate, Labor & Employment
Timekeeper	Standard Rate	discount (10%)	discounted Rate
Bernard Crawford (Partner)	$1,050/hr	$105.00/hr	$945.00/hr
Renata Vasquez (Partner)	$995/hr	$99.50/hr	$895.50/hr
Nadia Petrov (Sr. Associate)	$675/hr	$67.50/hr	$607.50/hr
James Underwood (Associate)	$525/hr	$52.50/hr	$472.50/hr

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP Attorneys at Law 100 Southeast Second Street, Suite 3400 Miami, FL 33131 Telephone: (305) 555-7200 Facsimile: (305) 555-7201 www.calderwoodharkness.com
January 30, 2026
Devin K. Arroyo, Esq. General Counsel Verimark Hospitality Group Inc. 2400 Bayshore Boulevard, Suite 1100 Tampa, FL 33629
Re: Engagement of Calderwood & Harkness LLP — Pre-Litigation Wage-and-Hour Audit (Scoping Phase) Matter Number: 1021-00005 Client: Verimark Hospitality Group Inc.
Dear Mr. Arroyo:
Section 1: Purpose and Confirmation of Engagement
This letter confirms the engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Verimark Hospitality Group Inc. ("VHG" or the "Company"), a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol VMHG, with its principal executive offices located at 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629 (Employer Identification Number: 84-3291076). We are grateful for your selection of C&H to serve as outside counsel to VHG in connection with this important matter, and we are committed to providing the highest quality of legal service throughout the course of this engagement.
This engagement arises from the demand letter dated January 14, 2026, sent by the law firm of Garza, Linden & Okafor LLP on behalf of their client, Daniela M. Serrano, a former hourly, non-exempt employee of VHG. The demand letter alleges systemic wage-and-hour violations across several Verimark-branded hotel and resort properties located in the State of Florida. Among other things, the demand letter contends that VHG engaged in a pattern and practice of underpaying its hourly, non-exempt workforce through various policies and practices that are alleged to violate both federal and state wage-and-hour laws.
Specifically, the demand letter threatens the initiation of a collective action and/or class action against VHG under the Fair Labor Standards Act of 1938, as amended ("FLSA"), 29 U.S.C. § 201 et seq., and the minimum-wage provisions of the Florida Constitution, Article X, Section 24. The demand letter demands monetary compensation on behalf of Ms. Serrano individually and on behalf of a putative class and/or collective of similarly situated current and former employees, and it seeks an aggregate settlement amount of $18.5 million in alleged damages, inclusive of unpaid wages, liquidated damages, and attorney's fees.
The demand letter sets forth a response deadline of February 28, 2026, and warns that if the parties are unable to reach a resolution within that timeframe, Garza, Linden & Okafor LLP intends to file suit in the United States District Court for the Middle District of Florida, Tampa Division.
On January 29, 2026, VHG's Audit Committee of the Board of Directors authorized the engagement of outside counsel to conduct a comprehensive pre-litigation wage-and-hour audit of the Company's pay practices at the affected properties. The Audit Committee established an aggregate budget authorization of up to Three Hundred Fifty Thousand Dollars ($350,000) for the initial scoping phase of this engagement, inclusive of legal fees payable to C&H and consultant costs for any expert or consulting firm retained in connection with the audit.
For internal tracking and billing purposes, this matter has been assigned C&H Matter Number 1021-00005. All correspondence, invoices, and communications relating to this engagement should reference this matter number.
Section 2: Scope of Representation
C&H is engaged to perform a comprehensive pre-litigation wage-and-hour audit during the scoping phase of this engagement. The purpose of this audit is to assess the merits and potential exposure arising from the allegations set forth in the January 14, 2026 demand letter, to evaluate VHG's compliance with applicable federal and state wage-and-hour laws, and to develop a strategic framework for responding to the demand letter and preparing for possible litigation. The scoping phase shall include the following work streams:
2.1 Analysis of Demand Letter Allegations
C&H will conduct a thorough review and analysis of the five categories of allegations raised in the January 14, 2026 demand letter from Garza, Linden & Okafor LLP. These categories are summarized as follows:
1.  Overtime Violations. The demand letter alleges that VHG failed to pay overtime compensation at one-and-one-half times the regular rate of pay for all hours worked in excess of forty (40) hours per workweek, in violation of Section 207(a) of the FLSA, 29 U.S.C. § 207(a). The demand letter asserts that this violation was pervasive across multiple properties and job categories and was facilitated by timekeeping and scheduling practices that systematically underreported compensable hours.
2.  Illegal Automatic Meal-Break Deductions. The demand letter alleges that VHG maintained a company-wide policy of automatically deducting thirty (30) minutes from each employee's recorded time for each shift to account for an unpaid meal break, despite the fact that employees were allegedly required to remain on-call during such meal periods and were frequently interrupted or unable to take an uninterrupted, bona fide meal break. The demand letter contends that this practice resulted in systematic underpayment of wages owed to hourly employees.
3.  Failure to Compensate for Pre-Shift and Post-Shift Off-the-Clock Work. The demand letter alleges that VHG failed to compensate hourly, non-exempt employees for time spent on pre-shift and post-shift activities that were integral and indispensable to their principal work activities. These activities are alleged to include, but are not limited to, donning and doffing required uniforms and personal protective equipment, booting up and logging into computer systems and point-of-sale terminals, and participating in mandatory shift-handover briefings. The demand letter estimates that such uncompensated time amounted to approximately fifteen (15) to twenty-five (25) minutes per shift per affected employee.
4.  Failure to Pay Florida Minimum Wage for Tipped Employees. The demand letter alleges that VHG failed to pay the applicable Florida minimum wage to tipped employees, including servers, bartenders, and room-service attendants. Specifically, the demand letter contends that VHG improperly claimed a tip credit without satisfying the notice and recordkeeping requirements under Florida law and that, in certain instances, tipped employees' total compensation (direct wages plus tips) fell below the applicable Florida minimum wage.
5.  Willful Misclassification of Hourly Roles as Exempt. The demand letter alleges that VHG willfully misclassified certain "lead" and "senior" hourly roles—including Lead Housekeeper, Senior Front Desk Agent, Lead Banquet Server, and Senior Maintenance Technician—as exempt from overtime under the FLSA's administrative exemption, despite the fact that these employees allegedly did not satisfy the salary-basis test or the duties test for the administrative exemption as set forth in the applicable regulations.
C&H will analyze the factual basis and legal sufficiency of each of these allegations, assess the degree of risk each presents, and identify areas where additional factual investigation or data analysis is required during the audit.
2.2 Preliminary Exposure Assessment
C&H will prepare a preliminary exposure assessment to quantify VHG's potential financial liability under multiple scenarios. This modeling will encompass the following scenarios:
•  Narrow Scenario: A two-year lookback period for non-willful FLSA violations under 29 U.S.C. § 255(a), limited to those job categories and properties for which the demand letter provides the strongest evidentiary support.
•  Mid-Range Scenario: A blended analysis incorporating both the two-year and three-year FLSA lookback periods, depending on the likelihood that a court would find willfulness with respect to specific categories of violations, together with applicable Florida constitutional claims within the applicable limitations period.
•  Broad Scenario: A three-year lookback period for willful FLSA violations under 29 U.S.C. § 255(a), combined with a five-year lookback for claims arising under the Florida Constitution's minimum-wage provisions, as permitted under Florida law.
In each scenario, C&H will model potential exposure both on an individual basis and on a collective/class-wide basis, taking into account estimated opt-in and class-membership rates, hours-worked data, applicable pay rates, and the potential for liquidated damages, attorney's fees, and costs. C&H will evaluate the demand amount of $18.5 million set forth in the demand letter and assess the realistic range of VHG's exposure in light of the available facts and applicable law.
2.3 Legal Research
C&H will conduct legal research on the following topics, which are central to the assessment of VHG's potential liability and the development of a defense strategy:
•  Applicable statutes of limitations for FLSA claims under 29 U.S.C. §§ 255(a) and 216(b), including the distinction between willful and non-willful violations and the standard for establishing willfulness, as well as the statute of limitations for claims arising under the Florida Constitution's minimum-wage provisions under Florida Statutes § 95.11(2)(b).
•  Analysis of the FLSA administrative exemption, 29 C.F.R. § 541.200, as applied to VHG's role classifications, including an evaluation of whether the duties and compensation of the "lead" and "senior" positions identified in the demand letter satisfy the salary-basis and duties tests for exemption.
•  Analysis of VHG's automatic meal-break deduction practices under 29 C.F.R. § 785.19, including the requirements for a bona fide meal period, the employer's obligation to relieve employees of all duties during a meal break, and the legal consequences of automatic deductions where employees are not fully relieved of duties.
•  Analysis of Florida tipped-employee minimum-wage compliance under Article X, Section 24 of the Florida Constitution and applicable implementing regulations, including the requirements for claiming a tip credit, the notice obligation, and the calculation of the tipped minimum wage.
•  Research on the compensability of pre-shift and post-shift activities under the Portal-to-Portal Act of 1947, 29 U.S.C. §§ 251–262, and the continuous-workday doctrine, including the standard for determining whether donning and doffing, system boot-up time, and shift-handover briefings are integral and indispensable to an employee's principal activities.
•  Analysis of FLSA collective-action conditional certification standards as applied in the United States District Court for the Middle District of Florida, including an assessment of the likelihood that the putative collective described in the demand letter would meet the "similarly situated" standard under 29 U.S.C. § 216(b) and applicable precedent.
2.4 Data Collection and Preservation
C&H will coordinate the collection of documents, data, and electronically stored information ("ESI") necessary to perform the pre-litigation audit. This work stream will include the following activities:
•  Coordination of document and data collection from VHG's internal systems, including human resources records, employee handbooks, written policies and procedures, timekeeping records (maintained through the Luminos TimeTrack system), scheduling records, payroll registers, tip-pool records, meal-break acknowledgment forms, employment agreements, and role and job-description documents.
•  Coordination of data collection from Luminos Payroll Solutions Inc., VHG's outsourced payroll processor (account number LTT-VHG-2022-0041), including historical payroll data, time-and-attendance records, wage statements, and related documentation for the relevant lookback period.
•  Verification and supplementation of VHG's internal litigation hold, which was issued on January 17, 2026, in response to receipt of the demand letter. C&H will review the scope of the existing litigation hold, confirm that it adequately covers all relevant custodians and data sources, and recommend any necessary modifications. C&H's preliminary review has identified twenty-three (23) custodians whose documents and communications are subject to preservation, and C&H will work with VHG's IT and HR departments to ensure that preservation obligations are being met.
•  Issuance of data-preservation requests to Luminos Payroll Solutions Inc. to ensure that all relevant data in the possession of VHG's outsourced payroll processor is preserved and available for production in connection with the audit.
2.5 Audit Scope Design
C&H will develop a proposed audit scope and methodology for the comprehensive wage-and-hour audit, covering the seven Verimark-branded properties identified in the demand letter as the subject of the alleged violations. These properties are:
1.  Verimark Regency Tampa (Tampa, Florida)
2.  Verimark Grand Orlando (Orlando, Florida)
3.  Verimark Shores Clearwater (Clearwater, Florida)
4.  Verimark Bayfront St. Petersburg (St. Petersburg, Florida)
5.  Verimark Resort & Spa Boca Raton (Boca Raton, Florida)
6.  Verimark Oceanview Fort Lauderdale (Fort Lauderdale, Florida)
7.  Verimark Key West Collection (Key West, Florida)
The audit methodology will be designed as a phased approach encompassing four principal stages: (i) document collection and data aggregation from each property and from centralized corporate systems; (ii) statistical sampling of timekeeping, payroll, and scheduling data to identify patterns and anomalies indicative of potential violations; (iii) employee interviews and management consultations at each property, designed to assess actual workplace practices and compare them to written policies; and (iv) remediation recommendations identifying any policies or practices that should be modified or discontinued to achieve compliance and reduce litigation exposure. C&H will present the proposed audit scope and methodology to VHG's General Counsel and Audit Committee for review and approval before commencing the full audit.
2.6 Joint-Employer Analysis
C&H will analyze the potential for joint-employer liability between VHG and Palomar Realty Partners LLC ("Palomar") with respect to the Verimark Shores Clearwater property. This property is operated under a Hotel Management Agreement between VHG and Palomar, designated as HMA-2021-0601-PC, dated June 1, 2021. C&H will review the terms of the management agreement and assess whether the relationship between VHG and Palomar with respect to the Clearwater property's workforce could give rise to joint-employer status under the FLSA and applicable Department of Labor guidance and case law. This analysis will include an evaluation of the degree of control exercised by each party over the terms and conditions of employment, scheduling, hiring and termination decisions, payroll administration, and supervision of the affected hourly employees.
2.7 Insurance Tender
C&H will prepare and submit a notice of claim and tender letter to VHG's Employment Practices Liability ("EPL") insurer, Pinnacle Indemnity Corp., under policy number PIN-EPL-2025-44781. The relevant policy provides coverage with the following limits and terms:
•  Per-occurrence limit: $10,000,000
•  Aggregate limit: $25,000,000
•  Self-insured retention per claim: $500,000
C&H will analyze the EPL policy to determine the extent of coverage available for the wage-and-hour claims asserted in the demand letter, including any exclusions, conditions, or limitations that may affect the availability of coverage. The Firm will ensure that the notice of claim is submitted in compliance with the policy's notice requirements, which require notice to the carrier within sixty (60) days of VHG's receipt of the demand. Given that VHG received the demand letter on or about January 14, 2026, the policy notice deadline is March 15, 2026, and C&H will take all necessary steps to ensure timely compliance with this deadline.
2.8 Response to Demand Letter
C&H will draft a response to the January 14, 2026 demand letter from Garza, Linden & Okafor LLP for VHG's review and approval prior to submission. The draft response will be designed to preserve all of VHG's rights and defenses while opening lines of communication with opposing counsel in a manner consistent with VHG's strategic objectives. Given the volume of work required during the scoping phase, C&H anticipates that VHG may wish to request a reasonable extension of the February 28, 2026 response deadline, and C&H will include a proposed extension request as part of the draft response, subject to VHG's approval.
2.9 Board and Management Advisory
C&H will prepare and deliver a presentation to VHG's Board of Directors and/or Audit Committee summarizing the findings of the scoping-phase audit, including the preliminary exposure assessment, the results of the legal research, the status of data collection and preservation efforts, and the proposed audit scope and methodology for the next phase of the engagement. The presentation will include advice regarding remediation options that VHG may consider to address identified compliance gaps and a litigation-avoidance strategy designed to minimize VHG's financial exposure and reputational risk.
2.10 Evaluation and Engagement of Consultants
C&H will evaluate the qualifications and suitability of Ridgepoint Advisory Group LLC ("Ridgepoint") to serve as a forensic payroll analytics and damages-modeling consultant in connection with this engagement. The anticipated lead consultant from Ridgepoint is Dr. Alicia Tran, CPA, CFF, who has extensive experience in wage-and-hour disputes in the hospitality industry. If, upon completion of C&H's evaluation, VHG approves the engagement of Ridgepoint, the engagement will be structured under the direction and control of C&H to preserve attorney-client privilege and work-product protection over Ridgepoint's work product and communications with C&H. The estimated fees for Ridgepoint's services during the scoping phase are $85,000 to $120,000, depending on the volume of data analyzed and the complexity of the damages modeling required.
Section 3: Scope Limitations
The parties acknowledge and agree that this engagement is limited in scope as described in this Section 3. VHG should be aware of these limitations in order to ensure that it obtains all necessary advice and representation from other professionals as appropriate.
This engagement is limited to the scoping phase of the pre-litigation wage-and-hour audit as described in Section 2 above. The Firm's representation of VHG is confined to the work streams identified in that Section and does not extend beyond the completion of the scoping phase and delivery of the scoping-phase report and recommendations.
This engagement does not include representation of VHG in any litigation, arbitration, administrative proceeding, or other dispute-resolution process. Should litigation be filed by Garza, Linden & Okafor LLP or any other party, or should litigation become imminent in the judgment of C&H or VHG, the scope and terms of C&H's engagement will be revisited and documented in a supplemental engagement letter, which will address, among other things, the scope of litigation representation, staffing, fees, budgeting, and other terms and conditions applicable to the litigation phase.
This engagement does not include advice on tax, accounting, or securities-disclosure matters, including but not limited to any obligations VHG may have to disclose the pending demand or any related contingent liabilities in its periodic filings with the U.S. Securities and Exchange Commission. VHG should consult its independent auditors, Hargrove Kessler & Co. LLP, and its securities counsel and other advisors as appropriate regarding such matters.
This engagement does not include representation of any VHG affiliate, subsidiary, officer, director, employee, or agent in their individual capacity unless separately agreed in writing between C&H and such individual. To the extent any individual associated with VHG has or may have interests that differ from those of the Company, C&H recommends that such individual obtain independent legal counsel.
Section 4: Engagement Team
The following attorneys will form the core engagement team for this matter:
Bernard Crawford will serve as the Responsible Partner and primary point of contact for VHG on this engagement. Mr. Crawford will have overall responsibility for the strategic direction and quality of the Firm's work product and will be available to VHG's General Counsel and other designated contacts for consultations and status updates throughout the course of the engagement.
Renata Vasquez will serve as the Billing Partner and will be responsible for overseeing the Firm's compliance with the fee arrangements and budget parameters set forth in this letter. Ms. Vasquez will also contribute substantive work on the engagement, particularly with respect to the legal research and exposure assessment work streams.
Nadia Petrov will serve as the Lead Associate and will manage the day-to-day execution of the engagement, including coordination of data collection, supervision of document review, preparation of memoranda and analyses, and liaison with VHG personnel and outside consultants.
James Underwood will serve as the Working Associate and will provide support across all work streams, including legal research, drafting, and data analysis.
Additional attorneys, paralegals, or support staff may be assigned to this matter as the needs of the engagement require. C&H will provide advance notice to VHG before assigning any additional timekeepers, and all such timekeepers will bill at rates consistent with the discount structure described in Section 5 below.
VHG's primary contacts for this engagement are:
•  Devin K. Arroyo, General Counsel
•  Carla S. Whitfield, Vice President, Human Resources
•  Enrique J. Fuentes, Director, Payroll & Workforce Compliance
C&H understands that Malik P. Jefferson, Senior Vice President of Operations, may also be consulted as necessary regarding property-level operations and practices.
Section 5: Fees and Billing Arrangements
5.1 Billing Basis
Fees for legal services rendered by C&H in connection with this engagement will be charged on an hourly basis, calculated by multiplying the number of hours or fractions thereof worked by each timekeeper by the applicable discounted hourly rate. Time will be recorded in increments of one-tenth of an hour (six minutes). Fees for each billing period will reflect the actual time spent by each timekeeper on matters reasonably related to the scope of this engagement.
5.2 Hourly Rates
In recognition of the existing client relationship between C&H and VHG, and in appreciation of VHG's continued confidence in the Firm, C&H is pleased to offer a ten percent (10%) courtesy discount off the Firm's standard hourly rates for all timekeepers assigned to this matter. The standard rates, discounts, and resulting discounted rates for the core engagement team are as follows:
Paralegal and legal-support-staff rates will be communicated separately to VHG at the time of assignment and will also reflect the ten percent (10%) courtesy discount off the Firm's standard rates for such timekeepers.
The Firm reserves the right to adjust its standard hourly rates annually, effective on January 1 of each year, with not less than thirty (30) days' prior written notice to VHG. Any such adjustment shall be subject to the same ten percent (10%) courtesy discount described herein.
5.3 Scoping-Phase Budget Estimate
Based on C&H's preliminary assessment of the scope of work required during the scoping phase, the estimated legal fees for C&H's services are in the range of $175,000 to $225,000. This estimate encompasses all of the work streams described in Section 2 above, including the analysis of the demand letter, the preliminary exposure assessment, legal research, data collection and preservation coordination, audit scope design, joint-employer analysis, insurance tender, demand-letter response, board and management advisory, and consultant evaluation.
This estimate is exclusive of costs associated with any outside consultants retained in connection with the engagement. If VHG approves the engagement of Ridgepoint Advisory Group LLC, the estimated fees for Ridgepoint's services during the scoping phase are $85,000 to $120,000, as described in Section 2.10 above.
The combined legal fees and consultant costs are expected to fall within the aggregate budget of $350,000 authorized by VHG's Audit Committee on January 29, 2026.
This estimate is provided for budgeting purposes only and does not constitute a fee cap, a flat fee, or a guaranteed maximum price. Actual fees will depend on a number of factors, including the nature and volume of work required, the scope and complexity of the data collected, the complexity of the legal issues encountered, the level and frequency of interaction with VHG personnel and third parties, and any developments in the underlying matter that may require additional work. C&H will promptly notify VHG if actual fees are expected to materially exceed the estimate provided herein and will seek authorization from VHG before incurring fees that would cause total engagement costs to exceed the board-authorized budget cap of $350,000.
5.4 Disbursements and Expenses
In addition to professional fees, VHG will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by C&H in connection with this matter. Such expenses may include, but are not limited to, the following:
•  Travel expenses (airfare, lodging, ground transportation, meals) for any necessary travel to VHG properties or other locations in connection with the audit
•  Court reporter fees, transcript costs, and videography fees (if applicable)
•  Photocopying and document reproduction charges
•  Electronic legal research charges (e.g., Westmark Data Systems, Sundial Solutions)
•  Express delivery and courier charges
•  Long-distance telephone and video-conferencing charges
•  Filing fees
•  Other reasonable costs directly related to the engagement
Third-party consultant fees, including any fees charged by Ridgepoint Advisory Group LLC, will be billed separately and directly to VHG by the consultant, or, if the parties agree, will be passed through C&H's invoices. In the event that consultant fees are passed through C&H's invoices, such fees will be separately itemized and will not include any markup by the Firm.
5.5 Invoicing and Payment Terms
C&H will issue monthly invoices to VHG for professional fees and disbursements incurred during the preceding calendar month. Each invoice will include a detailed description of the services rendered, broken down by timekeeper, including the name and billing rate of each timekeeper, the number of hours worked, a narrative description of the tasks performed, and the total fees for each timekeeper. Disbursements will be separately itemized on each invoice.
Payment of each invoice is due within thirty (30) days of the invoice date. Invoices should be remitted to C&H's accounts-receivable department at the address set forth in the letterhead above, or by electronic transfer to a bank account designated by C&H, the details of which will be provided upon request.
Any invoice that remains unpaid beyond thirty (30) days from the invoice date will accrue interest at the rate of one percent (1%) per month (twelve percent (12%) per annum) on the unpaid balance, or the maximum rate permitted by applicable law, whichever is less. The accrual of interest shall begin on the thirty-first day following the invoice date and shall continue until the outstanding balance is paid in full.
Section 6: Client Responsibilities
The success of this engagement depends in significant part on VHG's timely cooperation and responsiveness. VHG agrees to cooperate fully with C&H in connection with this engagement, including by undertaking the following responsibilities:
•  Document and Data Access. VHG will provide C&H with timely access to all documents, data, and electronically stored information relevant to the engagement, including but not limited to Luminos TimeTrack records, payroll registers, employee handbooks, written HR policies and procedures, scheduling records and shift assignments, tip-pool records and tip-reporting data, employee personnel files, employment agreements, role descriptions and classification memoranda, training records, meal-break acknowledgment forms, and such other materials as C&H may specify in data collection requests issued during the course of the engagement.
•  Personnel Availability. VHG will make relevant Company personnel available for interviews, consultations, and meetings with C&H on a reasonably prompt basis. This includes the twenty-three (23) identified custodians whose documents are subject to the litigation hold, as well as VHG's designated key contacts for this engagement: Devin K. Arroyo, General Counsel; Carla S. Whitfield, Vice President, Human Resources; Enrique J. Fuentes, Director, Payroll & Workforce Compliance; and Malik P. Jefferson, Senior Vice President of Operations.
•  Prompt Notification. VHG will promptly notify C&H of any new developments, communications, or events relevant to the matter, including but not limited to any additional communications from Garza, Linden & Okafor LLP, the filing of any lawsuit or administrative complaint, any contact from regulatory agencies, any media inquiries relating to the demand or the underlying allegations, and any internal developments that may affect the scope or direction of the engagement.
•  Litigation Hold Compliance. VHG will maintain and enforce the litigation hold issued on January 17, 2026, in accordance with C&H's advisory letter and any supplemental preservation instructions issued by C&H. VHG will take all reasonable steps to ensure that relevant documents and ESI are not destroyed, altered, or discarded, and will promptly report to C&H any known or suspected breaches of the litigation hold.
Section 7: Attorney-Client Privilege and Confidentiality
All communications between C&H and VHG in connection with this engagement, including oral communications, written correspondence, memoranda, analyses, and work product, are intended to be confidential and protected by the attorney-client privilege and/or the work-product doctrine to the fullest extent permitted by applicable law. These protections are vital to ensuring the candor and completeness of communications between the Firm and VHG, and both parties recognize the importance of preserving these protections throughout the engagement.
VHG should take care not to disclose privileged communications or work product to third parties without the prior consent of C&H, as such disclosure may result in a waiver of the attorney-client privilege or work-product protection, which could have significant consequences in the event of litigation or other proceedings. VHG should ensure that privileged materials are shared only with those individuals within VHG who have a need to know in connection with the subject matter of this engagement.
In the event VHG approves the engagement of Ridgepoint Advisory Group LLC or any other consultant in connection with this matter, C&H recommends that such engagement be structured under the direction and control of C&H to preserve attorney-client privilege and work-product protection over the consultant's work product, analyses, and communications with C&H. To this end, C&H will prepare a consulting agreement between C&H and Ridgepoint (or such other consultant) that includes appropriate confidentiality and privilege-protection provisions, and C&H will direct and supervise the consultant's work in a manner designed to maximize the applicability of the work-product doctrine.
If a common-interest agreement or joint-defense agreement is entered into with Palomar Realty Partners LLC or any other party in connection with this matter, C&H will advise VHG on appropriate privilege-protection protocols, including the terms of any such agreement, the scope of shared information, and the steps necessary to avoid inadvertent waiver of applicable privileges.
Section 8: Conflicts of Interest
C&H has conducted a comprehensive conflicts-of-interest check in connection with this engagement in accordance with the Firm's standard procedures and the applicable rules of professional conduct. Based on the results of this check, the Firm has determined that no current conflicts of interest exist that would preclude C&H from representing VHG in this matter.
The conflicts search encompassed the following parties and their known affiliates:
•  Garza, Linden & Okafor LLP (opposing counsel)
•  Daniela M. Serrano (claimant)
•  Palomar Realty Partners LLC (potential joint employer)
•  Luminos Payroll Solutions Inc. (VHG's outsourced payroll processor)
•  Pinnacle Indemnity Corp. (VHG's EPL insurer)
The results of the conflicts check were reviewed and cleared by Bernard Crawford on January 29, 2026. A copy of the Conflicts Clearance Memorandum is enclosed with this letter for VHG's records.
VHG acknowledges that C&H is a large, multi-office law firm with numerous practice groups and client relationships spanning a wide range of industries and legal disciplines. C&H may currently represent, or may in the future represent, other clients in matters that are wholly unrelated to VHG or to the subject matter of this engagement. Such representations do not give rise to a conflict of interest with respect to this engagement. In the event that a potential conflict of interest arises during the course of this engagement, C&H will promptly notify VHG and discuss appropriate steps to address the conflict, which may include obtaining an informed written waiver from all affected parties or, if the conflict cannot be resolved, withdrawal from the representation in accordance with Section 9 below.
Section 9: Termination
Either party may terminate this engagement at any time upon written notice to the other party. C&H's obligation to continue providing legal services under this engagement letter will cease upon the effective date of such termination, subject to the Firm's ethical obligations as described below.
In the event of termination by VHG, VHG will remain responsible for payment of all fees and expenses incurred by C&H through the date of termination, in accordance with the fee arrangements set forth in Section 5 above. C&H will issue a final invoice reflecting all outstanding fees and expenses within thirty (30) days following the date of termination.
In the event of termination by C&H, the Firm will take reasonable steps to protect VHG's interests during the transition period, including providing VHG with reasonable notice of the termination, cooperating in the orderly transfer of files, documents, and work product to successor counsel designated by VHG, and complying with all applicable ethical obligations governing withdrawal from representation.
Termination of this engagement, whether initiated by VHG or by C&H, will not affect (i) C&H's continuing duty to maintain the confidentiality of VHG's information and to protect the attorney-client privilege and work-product protections applicable to the Firm's work on this matter, or (ii) VHG's obligation to pay all outstanding invoices for fees and expenses incurred prior to the date of termination.
Section 10: Document Retention
Upon conclusion of the engagement, C&H will retain client files—including both physical and electronic files—in accordance with the Firm's document-retention policy. Physical and electronic files will be maintained for a period of seven (7) years following the close of the matter, unless VHG requests the return of original documents or a longer retention period. At the expiration of the seven-year retention period, C&H reserves the right to destroy the files in its possession, without further notice to VHG, unless VHG has previously requested that the files be returned or retained for a longer period.
VHG may request the return of its files at any time during or after the engagement, subject to payment of all outstanding fees and expenses owed to C&H. Upon receipt of such a request and payment of any outstanding balance, C&H will promptly return or make available for pickup the requested files. C&H may retain copies of the files for its own records, subject to its continuing confidentiality obligations.
Section 11: Limitation of Liability
C&H's aggregate liability to VHG in connection with this engagement, whether arising in contract, tort, or otherwise, shall not exceed the total amount of fees actually paid by VHG to C&H under this engagement letter. This limitation applies to all claims arising out of or relating to the Firm's performance or non-performance of services under this engagement, including but not limited to claims for negligence, breach of contract, or breach of fiduciary duty. Notwithstanding the foregoing, this limitation of liability shall not apply to claims arising from the Firm's gross negligence or willful misconduct. In no event shall C&H be liable for any consequential, incidental, indirect, special, or punitive damages in connection with this engagement, regardless of the theory of liability.
Section 12: 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 or the services provided hereunder, including any dispute concerning the interpretation, validity, or enforceability of this letter, shall be resolved by binding arbitration in Miami, Florida, administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules then in effect. The arbitration shall be conducted by a single arbitrator selected in accordance with such rules. The arbitrator's decision shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorney's fees in connection with the arbitration, unless the arbitrator determines that an award of costs or fees is warranted under applicable law.
Section 13: Entire Agreement / Amendments
This engagement letter constitutes the entire agreement between C&H and VHG with respect to the engagement described herein. This letter sets forth the complete understanding of the parties regarding the scope, terms, and conditions of C&H's representation of VHG in connection with the pre-litigation wage-and-hour audit (scoping phase) referenced in Section 1 above.
This letter supersedes any and all prior oral or written communications, negotiations, proposals, or understandings between the parties regarding the same subject matter, whether formal or informal.
This letter may not be amended, modified, or supplemented except by a written instrument duly executed by authorized representatives of both C&H and VHG. No waiver of any provision of this letter shall be effective unless made in writing and signed by the party granting the waiver.
Section 14: Acceptance and Countersignature
We respectfully request that VHG indicate its acceptance of the terms and conditions set forth in this engagement letter by executing the acknowledgment and acceptance block below and returning a signed copy of this letter to the Firm. A signed copy may be returned by hand delivery, overnight courier, U.S. mail, or electronic transmission (including PDF via email) to Bernard Crawford at the address or email set forth in the Firm's letterhead.
This engagement shall be deemed effective as of January 30, 2026, upon the Firm's receipt of the countersigned copy of this letter.
We greatly appreciate VHG's confidence in Calderwood & Harkness LLP, and we look forward to working with you, Ms. Whitfield, Mr. Fuentes, and the entire VHG team on this important matter. Please do not hesitate to contact me directly at (305) 555-7215 or bcrawford@calderwoodharkness.com if you have any questions regarding the terms of this letter or any other aspect of the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Bernard Crawford Partner, Labor & Employment Calderwood & Harkness LLP Telephone: (305) 555-7215
Email: bcrawford@calderwoodharkness.com
By: ________
Renata Vasquez Partner, Labor & Employment Calderwood & Harkness LLP Telephone: (305) 555-7218
Email: rvasquez@calderwoodharkness.com
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Verimark Hospitality Group Inc., hereby acknowledges receipt of this engagement letter dated January 30, 2026, confirms that the undersigned is duly authorized to execute this letter on behalf of the Company, and accepts the terms and conditions set forth herein.
ACKNOWLEDGED AND ACCEPTED:
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Devin K. Arroyo, Esq.
Title: General Counsel
Date: ________
By: ________
Name: Theodore R. Langford
Title: Chief Executive Officer
Date: ________
Enclosures:
•  Conflicts Clearance Memorandum (for VHG's records)
cc: (via email)
•  Theodore R. Langford, Chief Executive Officer, Verimark Hospitality Group Inc.
•  Marguerite A. Dunning, Chief Financial Officer, Verimark Hospitality Group Inc.
•  Carla S. Whitfield, Vice President, Human Resources, Verimark Hospitality Group Inc.
•  Renata Vasquez, Partner, Calderwood & Harkness LLP
•  Nadia Petrov, Senior Associate, Calderwood & Harkness LLP
•  James Underwood, Associate, Calderwood & Harkness LLP
Attorney | Role | Title
Bernard Crawford | Responsible Partner | Partner, Labor & Employment
Renata Vasquez | Billing Partner | Partner, Labor & Employment
Nadia Petrov | Lead Associate | Senior Associate, Labor & Employment
James Underwood | Working Associate | Associate, Labor & Employment
Timekeeper | Standard Rate | discount (10%) | discounted Rate
Bernard Crawford (Partner) | $1,050/hr | $105.00/hr | $945.00/hr
Renata Vasquez (Partner) | $995/hr | $99.50/hr | $895.50/hr
Nadia Petrov (Sr. Associate) | $675/hr | $67.50/hr | $607.50/hr
James Underwood (Associate) | $525/hr | $52.50/hr | $472.50/hr

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

ACKNOWLEDGED AND ACCEPTED:

VERIMARK HOSPITALITY GROUP INC.

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