1021-00005 · Verimark Hospitality Group · Transaction Documents

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT / COMMON INTEREST PRIVILEGE

COMMON INTEREST AND JOINT DEFENSE AGREEMENT

By and Between

Verimark Hospitality Group Inc.

and

Palomar Realty Partners LLC

Prepared by: Calderwood & Harkness LLP 100 Southeast Second Street, Suite 3400 Miami, FL 33131

Matter Number: 1021-00005

Date: [_], 2026

COMMON INTEREST AND JOINT DEFENSE AGREEMENT

This Common Interest and Joint Defense Agreement (this "Agreement") is entered into as of [_], 2026 (the "Effective Date"), by and between:

Verimark Hospitality Group Inc., a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol VMHG, with its principal offices at 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629 ("VHG" or "Verimark");

and

Palomar Realty Partners LLC, a Florida limited liability company, with its principal offices at 1901 West Cypress Street, Suite 400, Tampa, FL 33607 ("Palomar"), acting through its Managing Member, Ricardo E. Montalvo.

VHG and Palomar are referred to collectively herein as the "Parties" and individually as a "Party."

RECITALS

WHEREAS, VHG and Palomar entered into that certain Hotel Management Agreement dated June 1, 2021 (Reference: HMA-2021-0601-PC) (the "HMA"), pursuant to which VHG manages the hotel property known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property");

WHEREAS, under the HMA, VHG directly employs all on-site staff at the Property, including approximately two hundred sixty (260) total employees, of whom approximately one hundred ninety (190) are non-exempt hourly workers, and VHG is responsible for human resources policies, payroll administration, scheduling, supervision, and the day-to-day operational management of the Property;

WHEREAS, Palomar is the fee-simple owner of the Property and has engaged VHG to manage and operate the Property in accordance with the terms of the HMA;

WHEREAS, on January 14, 2026, Garza, Linden & Okafor LLP ("GLO"), plaintiff-side employment counsel located at 600 Brickell Avenue, Suite 2200, Miami, FL 33131, sent a demand letter on behalf of former VHG employee Daniela M. Serrano (former front-desk associate at the Verimark Regency Tampa property, Employee ID VHG-EMP-20220314-5587, employed by VHG from March 14, 2022 through August 22, 2025) (the "Demand Letter");

WHEREAS, the Demand Letter threatens a collective action and/or class action under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and Article X, Section 24 of the Florida Constitution, on behalf of a putative class and collective of all current and former hourly, non-exempt employees at Verimark-branded properties in the State of Florida from January 2023 to the present, a group estimated to encompass approximately 4,100 to 5,900 individuals;

WHEREAS, the Demand Letter asserts five categories of alleged violations: (1) failure to pay overtime compensation in accordance with 29 U.S.C. § 207(a); (2) illegal automatic thirty (30)-minute meal-break deductions from compensable time notwithstanding that employees were required to remain on-call during meal periods; (3) failure to compensate employees for pre-shift and post-shift work averaging fifteen (15) to twenty-five (25) minutes per shift; (4) failure to pay the Florida minimum wage for tipped employees, specifically the improper application of a tip credit of $3.02 per hour, requiring a tipped minimum wage of $10.98 per hour as of September 30, 2025; and (5) willful misclassification of certain "lead" and "senior" hourly positions as exempt from FLSA overtime requirements under the administrative exemption of 29 U.S.C. § 213(a)(1);

WHEREAS, the Demand Letter demands total compensation in the amount of $18,500,000, inclusive of back pay, liquidated damages, and attorneys' fees, and sets a response deadline of February 28, 2026;

WHEREAS, the Property and its approximately 260 employees are encompassed within the scope of the violations alleged in the Demand Letter;

WHEREAS, because Palomar owns the Property and VHG employs all on-site staff at the Property under the HMA, the Parties face potential joint-employer liability under the FLSA's economic-reality test, and both Parties therefore have a shared legal interest in analyzing their respective roles, coordinating their defense, and sharing privileged information regarding the wage-and-hour claims as they pertain to the Property;

WHEREAS, VHG has engaged Calderwood & Harkness LLP, with offices at 100 Southeast Second Street, Suite 3400, Miami, FL 33131 ("Calderwood & Harkness"), as its outside counsel in connection with a pre-litigation wage-and-hour audit and the defense of the threatened claims, with Bernard Crawford serving as the Responsible Partner (Calderwood & Harkness Matter No. 1021-00005);

WHEREAS, Palomar is separately represented by its own independent legal counsel, which Palomar shall designate in writing prior to or contemporaneously with the execution of this Agreement, and such designation shall be reflected in Section 1.3 and Exhibit C hereto;

WHEREAS, the Parties desire to enter into this Common Interest and Joint Defense Agreement to protect the confidentiality and privilege of information shared between them in connection with the threatened wage-and-hour litigation and related matters involving the Property; and

WHEREAS, this Agreement is entered into pursuant to the common-interest doctrine (also known as the joint-defense privilege or allied-litigant privilege) as recognized under federal common law and the laws of the State of Florida, for the purpose of advancing the Parties' shared legal interests in defending against the threatened claims.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

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

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

Section 1.2 — "Common Interest Materials." "Common Interest Materials" means all documents, communications, analyses, memoranda, data, work product, legal opinions, factual assessments, strategic assessments, and any other information or materials shared between or among the Parties and/or their respective Counsel in connection with the Matter, whether oral or written, in any format (including, without limitation, electronic, digital, or hard copy), and whether created before or after the Effective Date of this Agreement, to the extent shared pursuant to the terms hereof.

Section 1.3 — "Counsel."

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

(b) For Palomar: [Palomar's outside counsel — to be designated and inserted prior to execution of this Agreement]. Palomar shall provide written notice to VHG and Calderwood & Harkness LLP identifying its designated counsel, including the name of the responsible attorney, firm name, and contact information, no later than the date of execution of this Agreement.

(c) Any additional attorneys or law firms that either Party may engage in connection with the Matter, provided that the engaging Party delivers prior written notice to the other Party and its Counsel identifying such additional attorneys or law firms, and provided further that such additional attorneys or law firms agree in writing to be bound by the terms of this Agreement.

Section 1.4 — "Matter." "Matter" means the threatened wage-and-hour collective action and/or class action arising from or related to the Demand Letter dated January 14, 2026, sent by Garza, Linden & Okafor LLP on behalf of Daniela M. Serrano and the putative class and/or collective described therein, including without limitation any pre-litigation audit, investigation, negotiation, mediation, litigation, arbitration, regulatory proceeding, or appeal related thereto, to the extent that such matter involves or may involve the Property and/or the employment relationships at the Property. The Matter is tracked internally at Calderwood & Harkness LLP under Matter Number 1021-00005. A more detailed description of the Matter is set forth in Exhibit A attached hereto.

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

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

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

ARTICLE II — COMMON INTEREST AND PURPOSE

Section 2.1 — Common Legal Interest. The Parties acknowledge and agree that they share a common legal interest in defending against the threatened wage-and-hour claims asserted in the Demand Letter to the extent such claims relate to or may affect the Property. The Parties' common legal interest arises from the interrelated nature of their respective roles under the HMA and the potential for joint-employer liability under the FLSA economic-reality test, which examines the totality of the circumstances to determine whether two or more entities share sufficient control over the terms and conditions of employment to be deemed joint employers. The Parties' common interest specifically includes, but is not limited to: (a) analyzing the allocation of employer responsibilities under the HMA as between VHG (as the manager and direct employer of on-site staff) and Palomar (as the property owner); (b) assessing the Parties' respective degree of control over hiring, firing, scheduling, wage determination, supervision, record-keeping, and overall working conditions at the Property; (c) developing coordinated legal strategies to defend against the threatened claims; and (d) sharing factual information, legal analyses, and work product necessary to advance their shared defense. The Parties acknowledge that the efficient resolution of the threatened claims as they pertain to the Property will be materially advanced by the sharing of privileged and confidential information between them.

Section 2.2 — No Joint Representation. Notwithstanding any provision of this Agreement, each Party is and shall remain represented by its own independent Counsel in connection with the Matter. Nothing in this Agreement shall be construed to create, and no Party intends to create, an attorney-client relationship between one Party's Counsel and the other Party. Calderwood & Harkness LLP represents VHG exclusively, and Palomar's designated counsel represents Palomar exclusively. Each Party's Counsel owes its duties of loyalty, competence, confidentiality, and candor solely to its own client. No conflicts waiver is intended, implied, or effected by this Agreement. In the event that either Party's Counsel determines that a conflict of interest exists or may arise between the Parties, the affected Counsel shall promptly notify its client and the other Party's Counsel, and the Parties shall address any such conflict in accordance with Section 8.4 hereof.

Section 2.3 — Independence of Legal Strategies. Each Party retains the absolute and unrestricted right to pursue its own independent legal strategies, to negotiate its own settlements, and to assert its own defenses in connection with the Matter, subject only to the confidentiality and privilege obligations set forth in this Agreement. No Party shall be bound by any decision, concession, admission, stipulation, or litigation position taken by the other Party in any proceeding arising from or related to the Matter. Neither Party shall have any obligation to coordinate with, defer to, or seek the approval of the other Party with respect to its own strategic decisions, except as expressly provided herein. Nothing in this Agreement shall be construed to create a joint venture, partnership, agency relationship, or fiduciary duty between the Parties, except as may already exist under the HMA or applicable law.

ARTICLE III — SCOPE OF INFORMATION SHARING

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

(a) Legal Memoranda and Analyses. Legal memoranda, research memoranda, and legal analyses prepared by either Party's Counsel regarding the wage-and-hour allegations set forth in the Demand Letter, including, without limitation, analyses of FLSA overtime compliance under 29 U.S.C. § 207(a), the legality of automatic meal-break deduction practices, the compensability of pre-shift and post-shift work under the continuous workday doctrine, tipped-employee minimum wage compliance under the FLSA and Article X, Section 24 of the Florida Constitution, and exemption classification issues under the FLSA administrative exemption (29 U.S.C. § 213(a)(1)), in each case to the extent such analyses pertain to the Property and its employees.

(b) Joint-Employer Analysis. Analyses and assessments prepared by either Party's Counsel addressing the joint-employer question under the FLSA economic-reality test, including assessment of the HMA (HMA-2021-0601-PC), the Parties' respective control over hiring, firing, scheduling, pay rates, supervision, record-keeping, and working conditions at the Property, and any other factors relevant to the economic-reality analysis as applied to the Parties' relationship with respect to the Property.

(c) Factual Employment Information. Factual information regarding employment practices, timekeeping procedures, payroll data, scheduling records, human resources policies, job descriptions, disciplinary records, and related documentation pertaining to the Property, to the extent such information is relevant to the defense of the Matter.

(d) Timekeeping System Information. Information regarding the Luminos TimeTrack timekeeping system maintained by VHG (account number LTT-VHG-2022-0041), including the configuration of automatic deduction rules (specifically rule AR-MEAL-030, relating to the automatic thirty-minute meal-break deduction), time-punch data, exception reports, and payroll registers for employees at the Property.

(e) Employee Handbook and Property-Level Policies. Copies of, or relevant excerpts from, VHG's Employee Handbook (current version v.7.2, effective January 1, 2025) and any property-level policies, standard operating procedures, or memoranda applicable to the Property, to the extent relevant to the claims alleged in the Demand Letter.

(f) Exposure Assessments and Damages Modeling. Exposure assessments, damages estimates, and financial modeling prepared by either Party's Counsel or their consultants, including Calderwood & Harkness's preliminary exposure analysis (which projects a range from Scenario A — $8,147,700 under a narrow interpretation of the putative class — to Scenario B — an approximately $202,400,000 theoretical maximum exposure — with a mid-range estimate of $22,000,000 to $38,000,000), to the extent such analyses are allocable to or informed by the claims as they pertain to the Property.

(g) Forensic Consulting Information. Information regarding the proposed engagement of, or work product produced by, Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF), the forensic payroll consulting firm under consideration by VHG (estimated engagement cost of $85,000 to $120,000), to the extent that the work of Ridgepoint Advisory Group LLC encompasses the Property, its employees, or its payroll and timekeeping records.

(h) Insurance Coverage Information. Information regarding insurance coverage relevant to the Matter, to the extent pertinent to the allocation of defense costs and indemnification obligations between the Parties, including information regarding VHG's Employment Practices Liability insurance policy issued by Pinnacle Indemnity Corp. (Policy No. PIN-EPL-2025-44781; $10,000,000 per occurrence / $25,000,000 aggregate; $500,000 self-insured retention per claim; policy period July 1, 2025 through June 30, 2026).

Section 3.2 — Limitations on Scope. The scope of information sharing under this Agreement is subject to the following limitations:

(a) No Obligation to Share. This Agreement does not obligate either Party to share any particular information or category of information. The sharing of Common Interest Materials under this Agreement is voluntary, and each Party retains sole discretion to determine what information it will share, subject to its Counsel's professional judgment regarding the furtherance of the common legal interest.

(b) Relevance to Matter and Property. Information unrelated to the Matter or to the Property is not within the scope of this Agreement and shall not be shared pursuant to its terms.

(c) Exclusion of Inter-Party Disputes. Information related to disputes between VHG and Palomar, including without limitation disputes arising under or relating to the HMA (HMA-2021-0601-PC) or any indemnification or contribution claims between the Parties, is expressly excluded from the scope of Common Interest Materials. Neither Party shall be required to share information that its Counsel determines, in the exercise of professional judgment, could be adverse to its interests in any actual or potential dispute with the other Party.

(d) Other VHG Properties. Information regarding VHG's six (6) other properties identified as potentially at-issue in the Demand Letter — namely, the Verimark Regency Tampa, Verimark Grand Orlando, Verimark Bayfront St. Petersburg, Verimark Resort & Spa Boca Raton, Verimark Oceanview Fort Lauderdale, and Verimark Key West Collection — shall only be shared with Palomar to the extent that such information is directly relevant to and necessary for the common defense of the claims as they pertain to the Property. VHG reserves all rights to withhold information relating to other properties that does not bear directly on the Property or Palomar's interests.

Section 3.3 — Procedures for Sharing. The Parties agree to observe the following procedures when sharing Common Interest Materials:

(a) Marking. All Common Interest Materials shared in written or electronic form shall bear the following legend on each page or, in the case of electronic communications, in the header or subject line: "COMMON INTEREST PRIVILEGED AND CONFIDENTIAL — SUBJECT TO COMMON INTEREST AGREEMENT." Failure to affix such legend shall not, by itself, constitute a waiver of any privilege, provided that the disclosing Party takes reasonable steps to rectify the omission upon discovery.

(b) Designated Channels for Written Materials. Written and electronic Common Interest Materials shall be transmitted exclusively between the designated contacts identified in Exhibit C. For VHG, all written Common Interest Materials shall be transmitted through Calderwood & Harkness LLP, specifically Bernard Crawford or Nadia Petrov. For Palomar, all written Common Interest Materials shall be transmitted through Palomar's designated Counsel as identified in Exhibit C. Direct transmission of Common Interest Materials between VHG in-house personnel and Palomar business personnel, without the involvement of their respective Counsel, is discouraged and should be avoided to the extent practicable.

(c) Oral Communications. Oral communications regarding Common Interest Materials shall be limited to the Parties' respective Counsel and specifically authorized representatives. For VHG, authorized representatives for purposes of oral common-interest communications are Devin K. Arroyo, General Counsel of VHG, and such other individuals as VHG's Counsel may designate in writing from time to time. For Palomar, authorized representatives for purposes of oral common-interest communications are Ricardo E. Montalvo, Managing Member, or his designee as authorized in writing by Palomar's Counsel. Each Party shall maintain a log of oral common-interest communications to the extent practicable, noting the date, participants, and general subject matter of each communication.

ARTICLE IV — PRIVILEGE AND CONFIDENTIALITY PROTECTIONS

Section 4.1 — Preservation of Privilege. All Common Interest Materials shared under this Agreement shall retain their privileged character — whether arising under the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection — and the sharing of such materials between the Parties and their respective Counsel pursuant to this Agreement shall not be deemed a waiver of any privilege or protection. The Parties intend that this Agreement satisfies all requirements for the invocation of the common-interest doctrine under applicable federal common law and the laws of the State of Florida, such that the exchange of Privileged Information between the Parties in furtherance of their shared legal interest shall be treated as a communication within the scope of the attorney-client privilege and/or work-product protection. Each Party shall take all reasonable steps to maintain the confidentiality and privileged status of Common Interest Materials, including implementing appropriate access controls, limiting dissemination to individuals with a need to know, and storing Common Interest Materials in a manner that preserves their confidential and privileged character.

Section 4.2 — Non-Disclosure to Third Parties. Neither Party shall disclose Common Interest Materials to any third party without the prior written consent of the other Party and the other Party's Counsel. For purposes of this Section, "third party" includes, but is not limited to:

(a) opposing counsel, including Garza, Linden & Okafor LLP, and any other attorneys or firms representing any plaintiff, putative class member, or collective action opt-in participant in connection with the Matter;

(b) any court, tribunal, arbitrator, or mediator;

(c) any federal, state, or local government agency, including the U.S. Department of Labor, the Florida Department of Economic Opportunity, or any similar regulatory body;

(d) any other parties to any litigation, arbitration, or regulatory proceeding;

(e) any of VHG's or Palomar's other business partners, lenders, investors, shareholders, creditors, landlords, tenants, franchisees, counterparties, or affiliates, except to the extent that disclosure to such persons is necessary to effectuate the purposes of this Agreement and is approved in writing by the other Party; and

(f) the media, press, or any member of the public.

The foregoing non-disclosure obligation is subject only to the exception for compelled disclosure set forth in Section 4.3 below.

Section 4.3 — Compelled Disclosure. If either Party or its Counsel receives a subpoena, court order, discovery request, regulatory demand, or other legal process seeking the production or disclosure of Common Interest Materials (a "Compelled Disclosure Request"), the receiving Party shall:

(a) promptly notify the other Party and its Counsel in writing within five (5) business days of receipt of the Compelled Disclosure Request, providing a copy of the request and identifying the specific Common Interest Materials sought;

(b) cooperate fully with the other Party and its Counsel in seeking a protective order, motion to quash, or other appropriate relief to prevent or limit the disclosure of Common Interest Materials;

(c) not produce, disclose, or otherwise make available any Common Interest Materials in response to the Compelled Disclosure Request until the other Party has had a reasonable opportunity (not less than ten (10) business days from receipt of notice under clause (a) above, unless a shorter period is mandated by the applicable legal process) to seek judicial or other appropriate protection; and

(d) if, after exhausting all reasonable efforts to resist disclosure, a court or tribunal of competent jurisdiction issues a final, non-appealable order compelling disclosure of Common Interest Materials, disclose only those specific materials required by such order and in the narrowest manner consistent with such order.

In no event shall a Party voluntarily produce Common Interest Materials in response to discovery requests, informal requests, or other demands without first exhausting all reasonable privilege objections and other available grounds for resisting disclosure.

Section 4.4 — No Waiver by Inadvertent Disclosure. The inadvertent disclosure of Common Interest Materials to any person not authorized to receive them under this Agreement shall not constitute a waiver of any applicable privilege or protection, provided that the disclosing Party takes prompt and reasonable steps to remedy the disclosure upon learning of it. The Parties intend that this provision shall be interpreted consistently with, and shall provide protections at least as protective as, Federal Rule of Evidence 502(b). In the event of any inadvertent disclosure, the disclosing Party shall promptly notify the other Party, and the recipient of the inadvertent disclosure shall promptly return, sequester, or destroy all copies of the inadvertently disclosed materials and shall not use or disclose the contents thereof.

Section 4.5 — Use Restrictions. Common Interest Materials may be used solely in connection with the Matter and for no other purpose. Without limiting the generality of the foregoing, Common Interest Materials shall not be used by either Party against the other Party in any dispute between them, including without limitation any dispute arising under the HMA (HMA-2021-0601-PC), any indemnification or contribution claim, any coverage dispute, or any other legal or business controversy between the Parties, except as expressly provided in Article VI or as required by order of a court of competent jurisdiction. Any attempt to use Common Interest Materials in violation of this Section shall be subject to all available remedies, including injunctive relief and a motion to exclude.

ARTICLE V — JOINT-EMPLOYER ANALYSIS AND COORDINATION

Section 5.1 — Cooperation on Joint-Employer Defense. The Parties agree to cooperate in good faith in analyzing the joint-employer question under the FLSA economic-reality test as it applies to their respective roles at the Property. The Parties acknowledge that the joint-employer analysis is a critical component of the defense of the Matter as it pertains to the Property and that a coordinated approach to this analysis will benefit both Parties. The relevant factors under the economic-reality test include, but are not limited to: (a) which Party has the power to hire and fire employees at the Property; (b) which Party supervises and controls employee work schedules and conditions of employment; (c) which Party determines the rate and method of payment of wages; (d) which Party maintains employment records; and (e) the overall economic reality of the Parties' relationship as established by the HMA (HMA-2021-0601-PC) and the actual course of dealing between the Parties. The Parties acknowledge that VHG directly employs all approximately 260 on-site employees at the Property and that Palomar's role is primarily that of property owner, subject to further factual analysis of the specific terms of the HMA and the actual day-to-day practices at the Property.

Section 5.2 — Information Sharing for Joint-Employer Analysis. In furtherance of the cooperative joint-employer analysis contemplated by Section 5.1:

(a) VHG agrees to share with Palomar's Counsel relevant provisions of the HMA, employment policies, job descriptions, organizational charts, supervisory structures, and operational procedures at the Property to the extent necessary to assist in the joint-employer analysis.

(b) Palomar agrees to share with VHG's Counsel information regarding any role that Palomar or its representatives play in staffing decisions at the Property, budgetary approvals affecting employee compensation, operational oversight, or any other aspect of the employment relationship at the Property that may be relevant to the joint-employer analysis.

(c) Both Parties agree to cooperate with Calderwood & Harkness LLP's pre-litigation audit and, if Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF) is engaged, with Ridgepoint's forensic payroll review, to the extent necessary for the joint-employer analysis of the employment relationships at the Property.

Section 5.3 — Reservation of Rights Regarding Joint-Employer Status. Nothing in this Agreement shall constitute, or be construed as, an admission by either Party that it is or is not a joint employer of the employees at the Property or at any other Verimark-branded location. Each Party expressly reserves all rights to argue that it is not a joint employer, to assert any affirmative defense regarding its employer status, or to take any other position regarding the nature and scope of the employment relationships at the Property. The Parties' cooperation under this Article V shall not create any estoppel or waiver with respect to any Party's rights to contest joint-employer status in any forum.

ARTICLE VI — ALLOCATION OF LIABILITY AND INDEMNIFICATION

Section 6.1 — Reservation of Cross-Claims and Indemnification Rights. This Agreement does not limit, waive, modify, or in any way affect any indemnification obligations, contribution rights, subrogation rights, or other allocation mechanisms that may exist as between the Parties under the HMA (HMA-2021-0601-PC), any other agreement between the Parties, or applicable law. Each Party expressly reserves all rights to seek indemnification, contribution, defense, or allocation of liability from the other Party in connection with any wage-and-hour claims, judgments, settlements, penalties, or other liabilities relating to the Property, whether arising under the HMA, under common-law principles of indemnification and contribution, or under any applicable statute. The assertion of any such cross-claims, indemnification demands, or contribution claims by either Party shall not constitute a breach of this Agreement, provided that Common Interest Materials are not used in connection with any such cross-claim or demand in violation of Section 4.5, except to the extent that a court of competent jurisdiction orders the production or use of specific Common Interest Materials after full briefing on the privilege issue.

Section 6.2 — Separate Settlements. Either Party may independently negotiate or enter into a settlement of any claims asserted against it in connection with the Matter, provided that:

(a) the settling Party gives the non-settling Party at least ten (10) business days' prior written notice of any proposed settlement that could reasonably be expected to affect the non-settling Party's rights, defenses, or exposure in connection with the Matter;

(b) the settling Party does not, in connection with any such settlement, admit liability, stipulate to facts, or make factual concessions on behalf of, or binding upon, the non-settling Party;

(c) the settling Party uses commercially reasonable best efforts to obtain a release, dismissal, or other resolution that does not increase the non-settling Party's exposure or prejudice the non-settling Party's defenses; and

(d) the settling Party provides the non-settling Party with a copy of the final executed settlement agreement (subject to any confidentiality restrictions imposed by the settlement) within five (5) business days following execution.

Nothing in this Section 6.2 shall create a right of either Party to veto or block the other Party's settlement of claims asserted against it. The notice obligations in this Section are intended to facilitate coordination and do not give rise to any right of approval or consent by the non-settling Party.

ARTICLE VII — COSTS AND EXPENSES

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

(a) VHG shall be responsible for all fees and expenses incurred by Calderwood & Harkness LLP in connection with the Matter, which are charged at the following discounted hourly rates: Bernard Crawford (Partner), $945.00 per hour; Renata Vasquez (Senior Associate), $895.50 per hour; Nadia Petrov (Associate), $607.50 per hour; and James Underwood (Associate), $472.50 per hour. VHG shall also be responsible for any fees incurred in connection with the potential engagement of Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF) as a forensic payroll consultant, which engagement is estimated to cost between $85,000 and $120,000.

(b) Palomar shall be responsible for all fees and expenses incurred by its own designated Counsel in connection with the Matter.

Section 7.2 — Shared Costs (If Any). If the Parties mutually agree to share costs for any joint activities undertaken in furtherance of the common defense — for example, the joint retention of expert witnesses, the joint commissioning of forensic analyses specific to the Property, or the joint retention of mediators or other dispute resolution professionals — such cost-sharing arrangement shall be documented in a separate written agreement signed by both Parties (or their respective Counsel on their behalf). Such separate written agreement shall specify the scope of the joint activity, the allocation of costs between the Parties, and the terms of payment. Absent such a separate written agreement, no cost-sharing obligation shall be implied by this Agreement or by the Parties' cooperation hereunder.

Section 7.3 — Insurance.

(a) VHG maintains an Employment Practices Liability ("EPL") insurance policy issued by Pinnacle Indemnity Corp. (Policy No. PIN-EPL-2025-44781), with a per-occurrence limit of $10,000,000, an aggregate limit of $25,000,000, and a self-insured retention of $500,000 per claim. The policy period is July 1, 2025 through June 30, 2026.

(b) VHG's tender of the Demand Letter and any related claims to Pinnacle Indemnity Corp. under the EPL Policy, and any coverage determinations, reservations of rights, or coverage disputes arising therefrom, shall not create any obligation of VHG to share insurance proceeds with Palomar, except as may be expressly required by the terms of the HMA (HMA-2021-0601-PC) or applicable law.

(c) Palomar is solely responsible for obtaining and maintaining its own insurance coverage, including any employment practices liability coverage, commercial general liability coverage, or umbrella/excess coverage that may be applicable to the claims alleged in the Matter. VHG makes no representation or warranty regarding the availability or sufficiency of insurance coverage for Palomar's potential exposure in connection with the Matter.

ARTICLE VIII — TERM AND TERMINATION

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

Section 8.2 — Term. This Agreement shall remain in effect until the earliest of:

(a) the final resolution of the Matter as it relates to the Property, including the exhaustion of all appeals, the expiration of all applicable appeal periods, and the satisfaction of any judgments or settlements entered in connection therewith;

(b) the written agreement of both Parties to terminate this Agreement, executed by both Parties and their respective Counsel; or

(c) the withdrawal of either Party from this Agreement upon not less than thirty (30) days' prior written notice to the other Party and the other Party's Counsel, delivered in accordance with Section 10.6.

Section 8.3 — Effect of Termination. Upon termination of this Agreement for any reason:

(a) Survival of Confidentiality and Privilege Obligations. The confidentiality and privilege obligations set forth in Articles III and IV shall survive the termination of this Agreement and shall remain in full force and effect indefinitely, regardless of the reason for termination. No Party shall be relieved of its obligations to maintain the confidentiality and privileged status of Common Interest Materials by reason of the termination of this Agreement.

(b) Return or Destruction of Materials. Within thirty (30) days following the effective date of termination, each Party shall, at the election of the disclosing Party, either return to the disclosing Party or destroy all Common Interest Materials received from the other Party or the other Party's Counsel, and shall certify in writing to the other Party that it has done so. Notwithstanding the foregoing, a Party may retain copies of Common Interest Materials to the extent required by applicable law, regulation, or court order, or to the extent necessary for the Party's Counsel to comply with applicable rules of professional conduct or the Party's document retention policies, provided that such retained copies remain subject to the confidentiality and privilege protections of this Agreement.

(c) Preservation of Accrued Rights. Termination of this Agreement shall not affect any rights or obligations that accrued prior to the effective date of termination, including any rights to seek indemnification or contribution under Article VI.

Section 8.4 — Conflicts Arising During Term. If an actual conflict of interest arises between the Parties with respect to the Matter — including, by way of example and not limitation, if one Party asserts cross-claims or indemnification demands against the other Party, or if the Parties adopt materially adverse litigation positions — the Parties shall promptly discuss in good faith whether to amend, modify, or terminate this Agreement. Notwithstanding any such conflict or termination, the confidentiality and privilege protections set forth in Articles III and IV shall survive and shall continue to apply to all Common Interest Materials shared prior to the date on which the conflict arose or the date of termination, whichever is earlier.

ARTICLE IX — REPRESENTATIONS AND WARRANTIES

Section 9.1 — Authority. Each Party represents and warrants to the other Party as follows:

(a) VHG. VHG represents that the execution, delivery, and performance of this Agreement have been authorized by Devin K. Arroyo, General Counsel of VHG, and that such authorization is within the scope of the board authorization granted by VHG's Audit Committee at its meeting on January 29, 2026. VHG further represents that Devin K. Arroyo has the authority to execute this Agreement on behalf of VHG and to bind VHG to the terms and conditions set forth herein.

(b) Palomar. Palomar represents that Ricardo E. Montalvo, as Managing Member of Palomar Realty Partners LLC, has full power and authority under Palomar's operating agreement and applicable law to execute this Agreement on behalf of Palomar and to bind Palomar to the terms and conditions set forth herein. Palomar further represents that no additional approvals, consents, or authorizations are required for the execution and performance of this Agreement.

Section 9.2 — Independent Advice. Each Party represents and warrants that it has consulted with its own independent Counsel regarding the terms, conditions, and implications of this Agreement, including the effect of this Agreement on the attorney-client privilege, the work-product doctrine, and other applicable privileges and protections. Each Party acknowledges that it is entering into this Agreement voluntarily, with a full understanding of its rights and obligations hereunder, and that neither Party has relied upon any representation or advice of the other Party's Counsel in deciding to enter into this Agreement.

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

ARTICLE X — GENERAL PROVISIONS

Section 10.1 — Governing Law. This Agreement shall be governed by and construed in accordance with federal common law regarding the attorney-client privilege, the work-product doctrine, and the common-interest doctrine, to the extent that such federal common law applies to the claims and proceedings arising under the FLSA. To the extent that federal common law does not govern a particular issue arising under this Agreement, or to the extent that state law applies to matters of privilege, confidentiality, or contractual interpretation, this Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict-of-laws principles.

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

Section 10.3 — Entire Agreement. This Agreement, together with its Exhibits, constitutes the entire understanding and agreement of the Parties with respect to the common-interest arrangement described herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether written or oral, relating to the subject matter hereof. For the avoidance of doubt, the HMA (HMA-2021-0601-PC) and any indemnification, contribution, or allocation provisions contained therein remain in full force and effect and are not modified, superseded, or otherwise affected by this Agreement.

Section 10.4 — Severability. If any provision of this Agreement, or the application thereof to any Party or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect. The Parties shall negotiate in good faith to replace any invalid or unenforceable provision with a valid and enforceable provision that achieves, to the greatest extent possible, the economic, business, and legal objectives of the original provision.

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

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

If to VHG:

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

With a copy (which shall not constitute notice) to:

Bernard Crawford, Esq. Calderwood & Harkness LLP 100 Southeast Second Street, Suite 3400 Miami, FL 33131

If to Palomar:

Ricardo E. Montalvo Managing Member Palomar Realty Partners LLC 1901 West Cypress Street, Suite 400 Tampa, FL 33607

With a copy (which shall not constitute notice) to:

[Palomar's designated counsel — to be inserted prior to execution]

Either Party may change its address for notice purposes by giving written notice of such change to the other Party in accordance with this Section.

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

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

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the Parties have executed this Common Interest and Joint Defense Agreement as of the date first written above.

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Devin K. Arroyo

Title: General Counsel

Date: ________

Address: 2400 Bayshore Boulevard, Suite 1100

Tampa, FL 33629

PALOMAR REALTY PARTNERS LLC

By: ________

Name: Ricardo E. Montalvo

Title: Managing Member

Date: ________

Address: 1901 West Cypress Street, Suite 400

Tampa, FL 33607

ACKNOWLEDGED AND AGREED — COUNSEL

The undersigned counsel acknowledge and agree to the terms of this Common Interest and Joint Defense Agreement and agree to be bound by the confidentiality and privilege provisions set forth herein.

CALDERWOOD & HARKNESS LLP Counsel for Verimark Hospitality Group Inc.

By: ________

Name: Bernard Crawford

Title: Partner, Labor & Employment Practice Group

Date: ________

Address: 100 Southeast Second Street, Suite 3400

Miami, FL 33131

[COUNSEL FOR PALOMAR — TO BE DESIGNATED] Counsel for Palomar Realty Partners LLC

By: ________

Name: ________

Title: ________

Date: ________

Address: ________

EXHIBIT A

DESCRIPTION OF THE MATTER

This Exhibit A is attached to and incorporated by reference into the Common Interest and Joint Defense Agreement dated [_], 2026, by and between Verimark Hospitality Group Inc. and Palomar Realty Partners LLC.

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

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

3. Categories of Alleged Violations. The Demand Letter asserts five categories of alleged wage-and-hour violations:

(a) Overtime Violations. Failure to pay overtime compensation in accordance with 29 U.S.C. § 207(a), specifically alleging that VHG failed to compensate non-exempt hourly employees at a rate of one and one-half times their regular rate of pay for hours worked in excess of forty (40) hours per workweek.

(b) Automatic Meal-Break Deductions. Illegal automatic deduction of thirty (30) minutes per shift from compensable time for meal breaks, notwithstanding that employees were allegedly required to remain on-call and available to respond to guest and operational needs during meal periods, rendering such time compensable under the FLSA.

(c) Pre-Shift and Post-Shift Work. Failure to compensate employees for pre-shift and post-shift work, including uniform changes, equipment checks, system logins, briefings, and closing procedures, averaging fifteen (15) to twenty-five (25) minutes per shift.

(d) Tipped Employee Minimum Wage. Failure to pay the Florida minimum wage for tipped employees, specifically alleging improper application of a tip credit of $3.02 per hour, which under the applicable Florida minimum wage as of September 30, 2025, required a direct cash wage (tipped minimum wage) of $10.98 per hour. The Demand Letter alleges that VHG failed to satisfy the requirements for claiming a tip credit under both the FLSA and Article X, Section 24 of the Florida Constitution.

(e) Misclassification of Exempt Employees. Willful misclassification of certain "lead" and "senior" hourly positions (e.g., Lead Front Desk Agent, Senior Housekeeping Attendant) as exempt from FLSA overtime requirements under the administrative exemption of 29 U.S.C. § 213(a)(1), despite the fact that these positions allegedly did not satisfy the salary-basis test or the duties test for the administrative exemption.

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

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

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

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

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

9. Applicable Limitations Periods. The Demand Letter implicates the following limitations periods:

(a) Two (2) years for non-willful violations of the FLSA (29 U.S.C. § 255(a));

(b) Three (3) years for willful violations of the FLSA (29 U.S.C. § 255(a));

(c) Five (5) years for claims arising under Article X, Section 24 of the Florida Constitution (pursuant to Fla. Stat. § 95.11(2)(b), applicable to actions founded on a liability created by statute).

EXHIBIT B

DESCRIPTION OF THE PROPERTY AND CONTRACTUAL RELATIONSHIP

This Exhibit B is attached to and incorporated by reference into the Common Interest and Joint Defense Agreement dated [_], 2026, by and between Verimark Hospitality Group Inc. and Palomar Realty Partners LLC.

1. Property. The property subject to this Agreement is the hotel known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property").

2. Property Characteristics. The Property is a full-service beachfront hotel consisting of approximately 210 guest rooms, together with ancillary food and beverage outlets, meeting and event spaces, spa and fitness facilities, a pool complex, and associated back-of-house operations.

3. Employees. As of the date of this Agreement, the Property employs approximately two hundred sixty (260) individuals, of whom approximately one hundred ninety (190) are non-exempt hourly workers. Hourly positions include, but are not limited to, front desk agents, housekeeping attendants, food and beverage servers, bartenders, banquet staff, maintenance technicians, pool attendants, spa attendants, and various support roles. Non-exempt employees at the Property fall within the scope of the putative class and collective described in the Demand Letter.

4. Owner. The Property is owned by Palomar Realty Partners LLC, a Florida limited liability company, with offices at 1901 West Cypress Street, Suite 400, Tampa, FL 33607. Palomar acquired the Property in 2021 and entered into the HMA with VHG contemporaneously with the closing of the acquisition.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT / COMMON INTEREST PRIVILEGE
COMMON INTEREST AND JOINT DEFENSE AGREEMENT
By and Between
Verimark Hospitality Group Inc.
and
Palomar Realty Partners LLC
Prepared by: Calderwood & Harkness LLP 100 Southeast Second Street, Suite 3400 Miami, FL 33131
Matter Number: 1021-00005
Date: [_], 2026
COMMON INTEREST AND JOINT DEFENSE AGREEMENT
This Common Interest and Joint Defense Agreement (this "Agreement") is entered into as of [_], 2026 (the "Effective Date"), by and between:
Verimark Hospitality Group Inc., a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol VMHG, with its principal offices at 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629 ("VHG" or "Verimark");
and
Palomar Realty Partners LLC, a Florida limited liability company, with its principal offices at 1901 West Cypress Street, Suite 400, Tampa, FL 33607 ("Palomar"), acting through its Managing Member, Ricardo E. Montalvo.
VHG and Palomar are referred to collectively herein as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, VHG and Palomar entered into that certain Hotel Management Agreement dated June 1, 2021 (Reference: HMA-2021-0601-PC) (the "HMA"), pursuant to which VHG manages the hotel property known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property");
WHEREAS, under the HMA, VHG directly employs all on-site staff at the Property, including approximately two hundred sixty (260) total employees, of whom approximately one hundred ninety (190) are non-exempt hourly workers, and VHG is responsible for human resources policies, payroll administration, scheduling, supervision, and the day-to-day operational management of the Property;
WHEREAS, Palomar is the fee-simple owner of the Property and has engaged VHG to manage and operate the Property in accordance with the terms of the HMA;
WHEREAS, on January 14, 2026, Garza, Linden & Okafor LLP ("GLO"), plaintiff-side employment counsel located at 600 Brickell Avenue, Suite 2200, Miami, FL 33131, sent a demand letter on behalf of former VHG employee Daniela M. Serrano (former front-desk associate at the Verimark Regency Tampa property, Employee ID VHG-EMP-20220314-5587, employed by VHG from March 14, 2022 through August 22, 2025) (the "Demand Letter");
WHEREAS, the Demand Letter threatens a collective action and/or class action under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), and Article X, Section 24 of the Florida Constitution, on behalf of a putative class and collective of all current and former hourly, non-exempt employees at Verimark-branded properties in the State of Florida from January 2023 to the present, a group estimated to encompass approximately 4,100 to 5,900 individuals;
WHEREAS, the Demand Letter asserts five categories of alleged violations: (1) failure to pay overtime compensation in accordance with 29 U.S.C. § 207(a); (2) illegal automatic thirty (30)-minute meal-break deductions from compensable time notwithstanding that employees were required to remain on-call during meal periods; (3) failure to compensate employees for pre-shift and post-shift work averaging fifteen (15) to twenty-five (25) minutes per shift; (4) failure to pay the Florida minimum wage for tipped employees, specifically the improper application of a tip credit of $3.02 per hour, requiring a tipped minimum wage of $10.98 per hour as of September 30, 2025; and (5) willful misclassification of certain "lead" and "senior" hourly positions as exempt from FLSA overtime requirements under the administrative exemption of 29 U.S.C. § 213(a)(1);
WHEREAS, the Demand Letter demands total compensation in the amount of $18,500,000, inclusive of back pay, liquidated damages, and attorneys' fees, and sets a response deadline of February 28, 2026;
WHEREAS, the Property and its approximately 260 employees are encompassed within the scope of the violations alleged in the Demand Letter;
WHEREAS, because Palomar owns the Property and VHG employs all on-site staff at the Property under the HMA, the Parties face potential joint-employer liability under the FLSA's economic-reality test, and both Parties therefore have a shared legal interest in analyzing their respective roles, coordinating their defense, and sharing privileged information regarding the wage-and-hour claims as they pertain to the Property;
WHEREAS, VHG has engaged Calderwood & Harkness LLP, with offices at 100 Southeast Second Street, Suite 3400, Miami, FL 33131 ("Calderwood & Harkness"), as its outside counsel in connection with a pre-litigation wage-and-hour audit and the defense of the threatened claims, with Bernard Crawford serving as the Responsible Partner (Calderwood & Harkness Matter No. 1021-00005);
WHEREAS, Palomar is separately represented by its own independent legal counsel, which Palomar shall designate in writing prior to or contemporaneously with the execution of this Agreement, and such designation shall be reflected in Section 1.3 and Exhibit C hereto;
WHEREAS, the Parties desire to enter into this Common Interest and Joint Defense Agreement to protect the confidentiality and privilege of information shared between them in connection with the threatened wage-and-hour litigation and related matters involving the Property; and
WHEREAS, this Agreement is entered into pursuant to the common-interest doctrine (also known as the joint-defense privilege or allied-litigant privilege) as recognized under federal common law and the laws of the State of Florida, for the purpose of advancing the Parties' shared legal interests in defending against the threatened claims.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
Section 1.1 — "Agreement." "Agreement" means this Common Interest and Joint Defense Agreement, including all exhibits attached hereto and incorporated herein by reference, and any amendments or modifications made in accordance with Section 10.2 hereof.
Section 1.2 — "Common Interest Materials." "Common Interest Materials" means all documents, communications, analyses, memoranda, data, work product, legal opinions, factual assessments, strategic assessments, and any other information or materials shared between or among the Parties and/or their respective Counsel in connection with the Matter, whether oral or written, in any format (including, without limitation, electronic, digital, or hard copy), and whether created before or after the Effective Date of this Agreement, to the extent shared pursuant to the terms hereof.
Section 1.3 — "Counsel."
(a) For VHG: Calderwood & Harkness LLP, specifically including Bernard Crawford (Responsible Partner), Renata Vasquez (Senior Associate), Nadia Petrov (Associate), and James Underwood (Associate), located at 100 Southeast Second Street, Suite 3400, Miami, FL 33131, together with any other attorneys at Calderwood & Harkness LLP who are assigned to Matter No. 1021-00005 with written notice to Palomar.
(b) For Palomar: [Palomar's outside counsel — to be designated and inserted prior to execution of this Agreement]. Palomar shall provide written notice to VHG and Calderwood & Harkness LLP identifying its designated counsel, including the name of the responsible attorney, firm name, and contact information, no later than the date of execution of this Agreement.
(c) Any additional attorneys or law firms that either Party may engage in connection with the Matter, provided that the engaging Party delivers prior written notice to the other Party and its Counsel identifying such additional attorneys or law firms, and provided further that such additional attorneys or law firms agree in writing to be bound by the terms of this Agreement.
Section 1.4 — "Matter." "Matter" means the threatened wage-and-hour collective action and/or class action arising from or related to the Demand Letter dated January 14, 2026, sent by Garza, Linden & Okafor LLP on behalf of Daniela M. Serrano and the putative class and/or collective described therein, including without limitation any pre-litigation audit, investigation, negotiation, mediation, litigation, arbitration, regulatory proceeding, or appeal related thereto, to the extent that such matter involves or may involve the Property and/or the employment relationships at the Property. The Matter is tracked internally at Calderwood & Harkness LLP under Matter Number 1021-00005. A more detailed description of the Matter is set forth in Exhibit A attached hereto.
Section 1.5 — "Privileged Information." "Privileged Information" means information protected by the attorney-client privilege, the work-product doctrine (as defined in Fed. R. Civ. P. 26(b)(3) and applicable case law), or any other applicable privilege, protection, or immunity from disclosure under federal law or the laws of the State of Florida, including but not limited to attorney mental impressions, legal strategies, legal theories, and case assessments.
Section 1.6 — "Property." "Property" means the hotel property known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767, as more fully described in Exhibit B attached hereto.
Section 1.7 — "HMA." "HMA" means the Hotel Management Agreement dated June 1, 2021, by and between VHG and Palomar, bearing Reference Number HMA-2021-0601-PC, as may have been amended, supplemented, or restated from time to time.
ARTICLE II — COMMON INTEREST AND PURPOSE
Section 2.1 — Common Legal Interest. The Parties acknowledge and agree that they share a common legal interest in defending against the threatened wage-and-hour claims asserted in the Demand Letter to the extent such claims relate to or may affect the Property. The Parties' common legal interest arises from the interrelated nature of their respective roles under the HMA and the potential for joint-employer liability under the FLSA economic-reality test, which examines the totality of the circumstances to determine whether two or more entities share sufficient control over the terms and conditions of employment to be deemed joint employers. The Parties' common interest specifically includes, but is not limited to: (a) analyzing the allocation of employer responsibilities under the HMA as between VHG (as the manager and direct employer of on-site staff) and Palomar (as the property owner); (b) assessing the Parties' respective degree of control over hiring, firing, scheduling, wage determination, supervision, record-keeping, and overall working conditions at the Property; (c) developing coordinated legal strategies to defend against the threatened claims; and (d) sharing factual information, legal analyses, and work product necessary to advance their shared defense. The Parties acknowledge that the efficient resolution of the threatened claims as they pertain to the Property will be materially advanced by the sharing of privileged and confidential information between them.
Section 2.2 — No Joint Representation. Notwithstanding any provision of this Agreement, each Party is and shall remain represented by its own independent Counsel in connection with the Matter. Nothing in this Agreement shall be construed to create, and no Party intends to create, an attorney-client relationship between one Party's Counsel and the other Party. Calderwood & Harkness LLP represents VHG exclusively, and Palomar's designated counsel represents Palomar exclusively. Each Party's Counsel owes its duties of loyalty, competence, confidentiality, and candor solely to its own client. No conflicts waiver is intended, implied, or effected by this Agreement. In the event that either Party's Counsel determines that a conflict of interest exists or may arise between the Parties, the affected Counsel shall promptly notify its client and the other Party's Counsel, and the Parties shall address any such conflict in accordance with Section 8.4 hereof.
Section 2.3 — Independence of Legal Strategies. Each Party retains the absolute and unrestricted right to pursue its own independent legal strategies, to negotiate its own settlements, and to assert its own defenses in connection with the Matter, subject only to the confidentiality and privilege obligations set forth in this Agreement. No Party shall be bound by any decision, concession, admission, stipulation, or litigation position taken by the other Party in any proceeding arising from or related to the Matter. Neither Party shall have any obligation to coordinate with, defer to, or seek the approval of the other Party with respect to its own strategic decisions, except as expressly provided herein. Nothing in this Agreement shall be construed to create a joint venture, partnership, agency relationship, or fiduciary duty between the Parties, except as may already exist under the HMA or applicable law.
ARTICLE III — SCOPE OF INFORMATION SHARING
Section 3.1 — Types of Common Interest Materials. The Parties anticipate that the following categories of information and materials may be shared as Common Interest Materials under this Agreement, provided that the sharing of any such materials is consistent with the procedures set forth in Section 3.3 and is undertaken in furtherance of the Parties' common legal interest:
(a) Legal Memoranda and Analyses. Legal memoranda, research memoranda, and legal analyses prepared by either Party's Counsel regarding the wage-and-hour allegations set forth in the Demand Letter, including, without limitation, analyses of FLSA overtime compliance under 29 U.S.C. § 207(a), the legality of automatic meal-break deduction practices, the compensability of pre-shift and post-shift work under the continuous workday doctrine, tipped-employee minimum wage compliance under the FLSA and Article X, Section 24 of the Florida Constitution, and exemption classification issues under the FLSA administrative exemption (29 U.S.C. § 213(a)(1)), in each case to the extent such analyses pertain to the Property and its employees.
(b) Joint-Employer Analysis. Analyses and assessments prepared by either Party's Counsel addressing the joint-employer question under the FLSA economic-reality test, including assessment of the HMA (HMA-2021-0601-PC), the Parties' respective control over hiring, firing, scheduling, pay rates, supervision, record-keeping, and working conditions at the Property, and any other factors relevant to the economic-reality analysis as applied to the Parties' relationship with respect to the Property.
(c) Factual Employment Information. Factual information regarding employment practices, timekeeping procedures, payroll data, scheduling records, human resources policies, job descriptions, disciplinary records, and related documentation pertaining to the Property, to the extent such information is relevant to the defense of the Matter.
(d) Timekeeping System Information. Information regarding the Luminos TimeTrack timekeeping system maintained by VHG (account number LTT-VHG-2022-0041), including the configuration of automatic deduction rules (specifically rule AR-MEAL-030, relating to the automatic thirty-minute meal-break deduction), time-punch data, exception reports, and payroll registers for employees at the Property.
(e) Employee Handbook and Property-Level Policies. Copies of, or relevant excerpts from, VHG's Employee Handbook (current version v.7.2, effective January 1, 2025) and any property-level policies, standard operating procedures, or memoranda applicable to the Property, to the extent relevant to the claims alleged in the Demand Letter.
(f) Exposure Assessments and Damages Modeling. Exposure assessments, damages estimates, and financial modeling prepared by either Party's Counsel or their consultants, including Calderwood & Harkness's preliminary exposure analysis (which projects a range from Scenario A — $8,147,700 under a narrow interpretation of the putative class — to Scenario B — an approximately $202,400,000 theoretical maximum exposure — with a mid-range estimate of $22,000,000 to $38,000,000), to the extent such analyses are allocable to or informed by the claims as they pertain to the Property.
(g) Forensic Consulting Information. Information regarding the proposed engagement of, or work product produced by, Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF), the forensic payroll consulting firm under consideration by VHG (estimated engagement cost of $85,000 to $120,000), to the extent that the work of Ridgepoint Advisory Group LLC encompasses the Property, its employees, or its payroll and timekeeping records.
(h) Insurance Coverage Information. Information regarding insurance coverage relevant to the Matter, to the extent pertinent to the allocation of defense costs and indemnification obligations between the Parties, including information regarding VHG's Employment Practices Liability insurance policy issued by Pinnacle Indemnity Corp. (Policy No. PIN-EPL-2025-44781; $10,000,000 per occurrence / $25,000,000 aggregate; $500,000 self-insured retention per claim; policy period July 1, 2025 through June 30, 2026).
Section 3.2 — Limitations on Scope. The scope of information sharing under this Agreement is subject to the following limitations:
(a) No Obligation to Share. This Agreement does not obligate either Party to share any particular information or category of information. The sharing of Common Interest Materials under this Agreement is voluntary, and each Party retains sole discretion to determine what information it will share, subject to its Counsel's professional judgment regarding the furtherance of the common legal interest.
(b) Relevance to Matter and Property. Information unrelated to the Matter or to the Property is not within the scope of this Agreement and shall not be shared pursuant to its terms.
(c) Exclusion of Inter-Party Disputes. Information related to disputes between VHG and Palomar, including without limitation disputes arising under or relating to the HMA (HMA-2021-0601-PC) or any indemnification or contribution claims between the Parties, is expressly excluded from the scope of Common Interest Materials. Neither Party shall be required to share information that its Counsel determines, in the exercise of professional judgment, could be adverse to its interests in any actual or potential dispute with the other Party.
(d) Other VHG Properties. Information regarding VHG's six (6) other properties identified as potentially at-issue in the Demand Letter — namely, the Verimark Regency Tampa, Verimark Grand Orlando, Verimark Bayfront St. Petersburg, Verimark Resort & Spa Boca Raton, Verimark Oceanview Fort Lauderdale, and Verimark Key West Collection — shall only be shared with Palomar to the extent that such information is directly relevant to and necessary for the common defense of the claims as they pertain to the Property. VHG reserves all rights to withhold information relating to other properties that does not bear directly on the Property or Palomar's interests.
Section 3.3 — Procedures for Sharing. The Parties agree to observe the following procedures when sharing Common Interest Materials:
(a) Marking. All Common Interest Materials shared in written or electronic form shall bear the following legend on each page or, in the case of electronic communications, in the header or subject line: "COMMON INTEREST PRIVILEGED AND CONFIDENTIAL — SUBJECT TO COMMON INTEREST AGREEMENT." Failure to affix such legend shall not, by itself, constitute a waiver of any privilege, provided that the disclosing Party takes reasonable steps to rectify the omission upon discovery.
(b) Designated Channels for Written Materials. Written and electronic Common Interest Materials shall be transmitted exclusively between the designated contacts identified in Exhibit C. For VHG, all written Common Interest Materials shall be transmitted through Calderwood & Harkness LLP, specifically Bernard Crawford or Nadia Petrov. For Palomar, all written Common Interest Materials shall be transmitted through Palomar's designated Counsel as identified in Exhibit C. Direct transmission of Common Interest Materials between VHG in-house personnel and Palomar business personnel, without the involvement of their respective Counsel, is discouraged and should be avoided to the extent practicable.
(c) Oral Communications. Oral communications regarding Common Interest Materials shall be limited to the Parties' respective Counsel and specifically authorized representatives. For VHG, authorized representatives for purposes of oral common-interest communications are Devin K. Arroyo, General Counsel of VHG, and such other individuals as VHG's Counsel may designate in writing from time to time. For Palomar, authorized representatives for purposes of oral common-interest communications are Ricardo E. Montalvo, Managing Member, or his designee as authorized in writing by Palomar's Counsel. Each Party shall maintain a log of oral common-interest communications to the extent practicable, noting the date, participants, and general subject matter of each communication.
ARTICLE IV — PRIVILEGE AND CONFIDENTIALITY PROTECTIONS
Section 4.1 — Preservation of Privilege. All Common Interest Materials shared under this Agreement shall retain their privileged character — whether arising under the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection — and the sharing of such materials between the Parties and their respective Counsel pursuant to this Agreement shall not be deemed a waiver of any privilege or protection. The Parties intend that this Agreement satisfies all requirements for the invocation of the common-interest doctrine under applicable federal common law and the laws of the State of Florida, such that the exchange of Privileged Information between the Parties in furtherance of their shared legal interest shall be treated as a communication within the scope of the attorney-client privilege and/or work-product protection. Each Party shall take all reasonable steps to maintain the confidentiality and privileged status of Common Interest Materials, including implementing appropriate access controls, limiting dissemination to individuals with a need to know, and storing Common Interest Materials in a manner that preserves their confidential and privileged character.
Section 4.2 — Non-Disclosure to Third Parties. Neither Party shall disclose Common Interest Materials to any third party without the prior written consent of the other Party and the other Party's Counsel. For purposes of this Section, "third party" includes, but is not limited to:
(a) opposing counsel, including Garza, Linden & Okafor LLP, and any other attorneys or firms representing any plaintiff, putative class member, or collective action opt-in participant in connection with the Matter;
(b) any court, tribunal, arbitrator, or mediator;
(c) any federal, state, or local government agency, including the U.S. Department of Labor, the Florida Department of Economic Opportunity, or any similar regulatory body;
(d) any other parties to any litigation, arbitration, or regulatory proceeding;
(e) any of VHG's or Palomar's other business partners, lenders, investors, shareholders, creditors, landlords, tenants, franchisees, counterparties, or affiliates, except to the extent that disclosure to such persons is necessary to effectuate the purposes of this Agreement and is approved in writing by the other Party; and
(f) the media, press, or any member of the public.
The foregoing non-disclosure obligation is subject only to the exception for compelled disclosure set forth in Section 4.3 below.
Section 4.3 — Compelled Disclosure. If either Party or its Counsel receives a subpoena, court order, discovery request, regulatory demand, or other legal process seeking the production or disclosure of Common Interest Materials (a "Compelled Disclosure Request"), the receiving Party shall:
(a) promptly notify the other Party and its Counsel in writing within five (5) business days of receipt of the Compelled Disclosure Request, providing a copy of the request and identifying the specific Common Interest Materials sought;
(b) cooperate fully with the other Party and its Counsel in seeking a protective order, motion to quash, or other appropriate relief to prevent or limit the disclosure of Common Interest Materials;
(c) not produce, disclose, or otherwise make available any Common Interest Materials in response to the Compelled Disclosure Request until the other Party has had a reasonable opportunity (not less than ten (10) business days from receipt of notice under clause (a) above, unless a shorter period is mandated by the applicable legal process) to seek judicial or other appropriate protection; and
(d) if, after exhausting all reasonable efforts to resist disclosure, a court or tribunal of competent jurisdiction issues a final, non-appealable order compelling disclosure of Common Interest Materials, disclose only those specific materials required by such order and in the narrowest manner consistent with such order.
In no event shall a Party voluntarily produce Common Interest Materials in response to discovery requests, informal requests, or other demands without first exhausting all reasonable privilege objections and other available grounds for resisting disclosure.
Section 4.4 — No Waiver by Inadvertent Disclosure. The inadvertent disclosure of Common Interest Materials to any person not authorized to receive them under this Agreement shall not constitute a waiver of any applicable privilege or protection, provided that the disclosing Party takes prompt and reasonable steps to remedy the disclosure upon learning of it. The Parties intend that this provision shall be interpreted consistently with, and shall provide protections at least as protective as, Federal Rule of Evidence 502(b). In the event of any inadvertent disclosure, the disclosing Party shall promptly notify the other Party, and the recipient of the inadvertent disclosure shall promptly return, sequester, or destroy all copies of the inadvertently disclosed materials and shall not use or disclose the contents thereof.
Section 4.5 — Use Restrictions. Common Interest Materials may be used solely in connection with the Matter and for no other purpose. Without limiting the generality of the foregoing, Common Interest Materials shall not be used by either Party against the other Party in any dispute between them, including without limitation any dispute arising under the HMA (HMA-2021-0601-PC), any indemnification or contribution claim, any coverage dispute, or any other legal or business controversy between the Parties, except as expressly provided in Article VI or as required by order of a court of competent jurisdiction. Any attempt to use Common Interest Materials in violation of this Section shall be subject to all available remedies, including injunctive relief and a motion to exclude.
ARTICLE V — JOINT-EMPLOYER ANALYSIS AND COORDINATION
Section 5.1 — Cooperation on Joint-Employer Defense. The Parties agree to cooperate in good faith in analyzing the joint-employer question under the FLSA economic-reality test as it applies to their respective roles at the Property. The Parties acknowledge that the joint-employer analysis is a critical component of the defense of the Matter as it pertains to the Property and that a coordinated approach to this analysis will benefit both Parties. The relevant factors under the economic-reality test include, but are not limited to: (a) which Party has the power to hire and fire employees at the Property; (b) which Party supervises and controls employee work schedules and conditions of employment; (c) which Party determines the rate and method of payment of wages; (d) which Party maintains employment records; and (e) the overall economic reality of the Parties' relationship as established by the HMA (HMA-2021-0601-PC) and the actual course of dealing between the Parties. The Parties acknowledge that VHG directly employs all approximately 260 on-site employees at the Property and that Palomar's role is primarily that of property owner, subject to further factual analysis of the specific terms of the HMA and the actual day-to-day practices at the Property.
Section 5.2 — Information Sharing for Joint-Employer Analysis. In furtherance of the cooperative joint-employer analysis contemplated by Section 5.1:
(a) VHG agrees to share with Palomar's Counsel relevant provisions of the HMA, employment policies, job descriptions, organizational charts, supervisory structures, and operational procedures at the Property to the extent necessary to assist in the joint-employer analysis.
(b) Palomar agrees to share with VHG's Counsel information regarding any role that Palomar or its representatives play in staffing decisions at the Property, budgetary approvals affecting employee compensation, operational oversight, or any other aspect of the employment relationship at the Property that may be relevant to the joint-employer analysis.
(c) Both Parties agree to cooperate with Calderwood & Harkness LLP's pre-litigation audit and, if Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF) is engaged, with Ridgepoint's forensic payroll review, to the extent necessary for the joint-employer analysis of the employment relationships at the Property.
Section 5.3 — Reservation of Rights Regarding Joint-Employer Status. Nothing in this Agreement shall constitute, or be construed as, an admission by either Party that it is or is not a joint employer of the employees at the Property or at any other Verimark-branded location. Each Party expressly reserves all rights to argue that it is not a joint employer, to assert any affirmative defense regarding its employer status, or to take any other position regarding the nature and scope of the employment relationships at the Property. The Parties' cooperation under this Article V shall not create any estoppel or waiver with respect to any Party's rights to contest joint-employer status in any forum.
ARTICLE VI — ALLOCATION OF LIABILITY AND INDEMNIFICATION
Section 6.1 — Reservation of Cross-Claims and Indemnification Rights. This Agreement does not limit, waive, modify, or in any way affect any indemnification obligations, contribution rights, subrogation rights, or other allocation mechanisms that may exist as between the Parties under the HMA (HMA-2021-0601-PC), any other agreement between the Parties, or applicable law. Each Party expressly reserves all rights to seek indemnification, contribution, defense, or allocation of liability from the other Party in connection with any wage-and-hour claims, judgments, settlements, penalties, or other liabilities relating to the Property, whether arising under the HMA, under common-law principles of indemnification and contribution, or under any applicable statute. The assertion of any such cross-claims, indemnification demands, or contribution claims by either Party shall not constitute a breach of this Agreement, provided that Common Interest Materials are not used in connection with any such cross-claim or demand in violation of Section 4.5, except to the extent that a court of competent jurisdiction orders the production or use of specific Common Interest Materials after full briefing on the privilege issue.
Section 6.2 — Separate Settlements. Either Party may independently negotiate or enter into a settlement of any claims asserted against it in connection with the Matter, provided that:
(a) the settling Party gives the non-settling Party at least ten (10) business days' prior written notice of any proposed settlement that could reasonably be expected to affect the non-settling Party's rights, defenses, or exposure in connection with the Matter;
(b) the settling Party does not, in connection with any such settlement, admit liability, stipulate to facts, or make factual concessions on behalf of, or binding upon, the non-settling Party;
(c) the settling Party uses commercially reasonable best efforts to obtain a release, dismissal, or other resolution that does not increase the non-settling Party's exposure or prejudice the non-settling Party's defenses; and
(d) the settling Party provides the non-settling Party with a copy of the final executed settlement agreement (subject to any confidentiality restrictions imposed by the settlement) within five (5) business days following execution.
Nothing in this Section 6.2 shall create a right of either Party to veto or block the other Party's settlement of claims asserted against it. The notice obligations in this Section are intended to facilitate coordination and do not give rise to any right of approval or consent by the non-settling Party.
ARTICLE VII — COSTS AND EXPENSES
Section 7.1 — Separate Responsibility for Costs. Except as otherwise agreed in writing pursuant to Section 7.2, each Party shall bear its own legal fees, costs, and expenses incurred in connection with the Matter, including the fees and expenses of its own Counsel and any consultants, experts, or other professionals retained by or on behalf of such Party. By way of illustration and not limitation:
(a) VHG shall be responsible for all fees and expenses incurred by Calderwood & Harkness LLP in connection with the Matter, which are charged at the following discounted hourly rates: Bernard Crawford (Partner), $945.00 per hour; Renata Vasquez (Senior Associate), $895.50 per hour; Nadia Petrov (Associate), $607.50 per hour; and James Underwood (Associate), $472.50 per hour. VHG shall also be responsible for any fees incurred in connection with the potential engagement of Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF) as a forensic payroll consultant, which engagement is estimated to cost between $85,000 and $120,000.
(b) Palomar shall be responsible for all fees and expenses incurred by its own designated Counsel in connection with the Matter.
Section 7.2 — Shared Costs (If Any). If the Parties mutually agree to share costs for any joint activities undertaken in furtherance of the common defense — for example, the joint retention of expert witnesses, the joint commissioning of forensic analyses specific to the Property, or the joint retention of mediators or other dispute resolution professionals — such cost-sharing arrangement shall be documented in a separate written agreement signed by both Parties (or their respective Counsel on their behalf). Such separate written agreement shall specify the scope of the joint activity, the allocation of costs between the Parties, and the terms of payment. Absent such a separate written agreement, no cost-sharing obligation shall be implied by this Agreement or by the Parties' cooperation hereunder.
Section 7.3 — Insurance.
(a) VHG maintains an Employment Practices Liability ("EPL") insurance policy issued by Pinnacle Indemnity Corp. (Policy No. PIN-EPL-2025-44781), with a per-occurrence limit of $10,000,000, an aggregate limit of $25,000,000, and a self-insured retention of $500,000 per claim. The policy period is July 1, 2025 through June 30, 2026.
(b) VHG's tender of the Demand Letter and any related claims to Pinnacle Indemnity Corp. under the EPL Policy, and any coverage determinations, reservations of rights, or coverage disputes arising therefrom, shall not create any obligation of VHG to share insurance proceeds with Palomar, except as may be expressly required by the terms of the HMA (HMA-2021-0601-PC) or applicable law.
(c) Palomar is solely responsible for obtaining and maintaining its own insurance coverage, including any employment practices liability coverage, commercial general liability coverage, or umbrella/excess coverage that may be applicable to the claims alleged in the Matter. VHG makes no representation or warranty regarding the availability or sufficiency of insurance coverage for Palomar's potential exposure in connection with the Matter.
ARTICLE VIII — TERM AND TERMINATION
Section 8.1 — Effective Date. This Agreement shall be effective upon execution by both Parties and their respective Counsel. The date of execution shall be the date on which the last signatory executes this Agreement, which date shall be inserted on the first page hereof.
Section 8.2 — Term. This Agreement shall remain in effect until the earliest of:
(a) the final resolution of the Matter as it relates to the Property, including the exhaustion of all appeals, the expiration of all applicable appeal periods, and the satisfaction of any judgments or settlements entered in connection therewith;
(b) the written agreement of both Parties to terminate this Agreement, executed by both Parties and their respective Counsel; or
(c) the withdrawal of either Party from this Agreement upon not less than thirty (30) days' prior written notice to the other Party and the other Party's Counsel, delivered in accordance with Section 10.6.
Section 8.3 — Effect of Termination. Upon termination of this Agreement for any reason:
(a) Survival of Confidentiality and Privilege Obligations. The confidentiality and privilege obligations set forth in Articles III and IV shall survive the termination of this Agreement and shall remain in full force and effect indefinitely, regardless of the reason for termination. No Party shall be relieved of its obligations to maintain the confidentiality and privileged status of Common Interest Materials by reason of the termination of this Agreement.
(b) Return or Destruction of Materials. Within thirty (30) days following the effective date of termination, each Party shall, at the election of the disclosing Party, either return to the disclosing Party or destroy all Common Interest Materials received from the other Party or the other Party's Counsel, and shall certify in writing to the other Party that it has done so. Notwithstanding the foregoing, a Party may retain copies of Common Interest Materials to the extent required by applicable law, regulation, or court order, or to the extent necessary for the Party's Counsel to comply with applicable rules of professional conduct or the Party's document retention policies, provided that such retained copies remain subject to the confidentiality and privilege protections of this Agreement.
(c) Preservation of Accrued Rights. Termination of this Agreement shall not affect any rights or obligations that accrued prior to the effective date of termination, including any rights to seek indemnification or contribution under Article VI.
Section 8.4 — Conflicts Arising During Term. If an actual conflict of interest arises between the Parties with respect to the Matter — including, by way of example and not limitation, if one Party asserts cross-claims or indemnification demands against the other Party, or if the Parties adopt materially adverse litigation positions — the Parties shall promptly discuss in good faith whether to amend, modify, or terminate this Agreement. Notwithstanding any such conflict or termination, the confidentiality and privilege protections set forth in Articles III and IV shall survive and shall continue to apply to all Common Interest Materials shared prior to the date on which the conflict arose or the date of termination, whichever is earlier.
ARTICLE IX — REPRESENTATIONS AND WARRANTIES
Section 9.1 — Authority. Each Party represents and warrants to the other Party as follows:
(a) VHG. VHG represents that the execution, delivery, and performance of this Agreement have been authorized by Devin K. Arroyo, General Counsel of VHG, and that such authorization is within the scope of the board authorization granted by VHG's Audit Committee at its meeting on January 29, 2026. VHG further represents that Devin K. Arroyo has the authority to execute this Agreement on behalf of VHG and to bind VHG to the terms and conditions set forth herein.
(b) Palomar. Palomar represents that Ricardo E. Montalvo, as Managing Member of Palomar Realty Partners LLC, has full power and authority under Palomar's operating agreement and applicable law to execute this Agreement on behalf of Palomar and to bind Palomar to the terms and conditions set forth herein. Palomar further represents that no additional approvals, consents, or authorizations are required for the execution and performance of this Agreement.
Section 9.2 — Independent Advice. Each Party represents and warrants that it has consulted with its own independent Counsel regarding the terms, conditions, and implications of this Agreement, including the effect of this Agreement on the attorney-client privilege, the work-product doctrine, and other applicable privileges and protections. Each Party acknowledges that it is entering into this Agreement voluntarily, with a full understanding of its rights and obligations hereunder, and that neither Party has relied upon any representation or advice of the other Party's Counsel in deciding to enter into this Agreement.
Section 9.3 — No Admission. Nothing in this Agreement, and no action taken by either Party pursuant to this Agreement, shall be construed as an admission of liability, wrongdoing, fault, or joint-employer status by either Party, or as an admission that any of the allegations set forth in the Demand Letter have merit. This Agreement is entered into solely for the purpose of facilitating the Parties' common defense and preserving the confidentiality and privilege of information shared in furtherance thereof.
ARTICLE X — GENERAL PROVISIONS
Section 10.1 — Governing Law. This Agreement shall be governed by and construed in accordance with federal common law regarding the attorney-client privilege, the work-product doctrine, and the common-interest doctrine, to the extent that such federal common law applies to the claims and proceedings arising under the FLSA. To the extent that federal common law does not govern a particular issue arising under this Agreement, or to the extent that state law applies to matters of privilege, confidentiality, or contractual interpretation, this Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflict-of-laws principles.
Section 10.2 — Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument signed by both Parties and acknowledged by their respective Counsel. No oral modification of this Agreement shall be effective for any purpose.
Section 10.3 — Entire Agreement. This Agreement, together with its Exhibits, constitutes the entire understanding and agreement of the Parties with respect to the common-interest arrangement described herein and supersedes all prior and contemporaneous discussions, negotiations, understandings, and agreements, whether written or oral, relating to the subject matter hereof. For the avoidance of doubt, the HMA (HMA-2021-0601-PC) and any indemnification, contribution, or allocation provisions contained therein remain in full force and effect and are not modified, superseded, or otherwise affected by this Agreement.
Section 10.4 — Severability. If any provision of this Agreement, or the application thereof to any Party or circumstance, is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect. The Parties shall negotiate in good faith to replace any invalid or unenforceable provision with a valid and enforceable provision that achieves, to the greatest extent possible, the economic, business, and legal objectives of the original provision.
Section 10.5 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, electronic mail (including PDF), or other electronic means shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.
Section 10.6 — Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, when sent by overnight courier service (with confirmation of delivery), or when sent by email (with confirmation of receipt), addressed as follows:
If to VHG:
Devin K. Arroyo General Counsel Verimark Hospitality Group Inc. 2400 Bayshore Boulevard, Suite 1100 Tampa, FL 33629
With a copy (which shall not constitute notice) to:
Bernard Crawford, Esq. Calderwood & Harkness LLP 100 Southeast Second Street, Suite 3400 Miami, FL 33131
If to Palomar:
Ricardo E. Montalvo Managing Member Palomar Realty Partners LLC 1901 West Cypress Street, Suite 400 Tampa, FL 33607
With a copy (which shall not constitute notice) to:
[Palomar's designated counsel — to be inserted prior to execution]
Either Party may change its address for notice purposes by giving written notice of such change to the other Party in accordance with this Section.
Section 10.7 — No Third-Party Beneficiaries. This Agreement is entered into for the sole and exclusive benefit of the Parties and their respective Counsel. Nothing in this Agreement, express or implied, is intended to confer upon any other person or entity any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement. No third party shall have standing to enforce any provision of this Agreement.
Section 10.8 — Waiver. The failure of either Party to enforce any provision of this Agreement, or to exercise any right or remedy hereunder, shall not constitute a waiver of such provision, right, or remedy, or of any other provision, right, or remedy under this Agreement. Any waiver of any provision of this Agreement must be in writing and signed by the waiving Party. A waiver on one occasion shall not be deemed a waiver on any subsequent occasion.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the Parties have executed this Common Interest and Joint Defense Agreement as of the date first written above.
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Devin K. Arroyo
Title: General Counsel
Date: ________
Address: 2400 Bayshore Boulevard, Suite 1100
Tampa, FL 33629
PALOMAR REALTY PARTNERS LLC
By: ________
Name: Ricardo E. Montalvo
Title: Managing Member
Date: ________
Address: 1901 West Cypress Street, Suite 400
Tampa, FL 33607
ACKNOWLEDGED AND AGREED — COUNSEL
The undersigned counsel acknowledge and agree to the terms of this Common Interest and Joint Defense Agreement and agree to be bound by the confidentiality and privilege provisions set forth herein.
CALDERWOOD & HARKNESS LLP Counsel for Verimark Hospitality Group Inc.
By: ________
Name: Bernard Crawford
Title: Partner, Labor & Employment Practice Group
Date: ________
Address: 100 Southeast Second Street, Suite 3400
Miami, FL 33131
[COUNSEL FOR PALOMAR — TO BE DESIGNATED] Counsel for Palomar Realty Partners LLC
By: ________
Name: ________
Title: ________
Date: ________
Address: ________
EXHIBIT A
DESCRIPTION OF THE MATTER
This Exhibit A is attached to and incorporated by reference into the Common Interest and Joint Defense Agreement dated [_], 2026, by and between Verimark Hospitality Group Inc. and Palomar Realty Partners LLC.
1. Demand Letter. On January 14, 2026, Garza, Linden & Okafor LLP ("GLO"), located at 600 Brickell Avenue, Suite 2200, Miami, FL 33131, transmitted a written demand letter (the "Demand Letter") to Verimark Hospitality Group Inc. The Demand Letter was addressed to Devin K. Arroyo, General Counsel of VHG.
2. Named Claimant. The Demand Letter was sent on behalf of Daniela M. Serrano, a former front-desk associate at the Verimark Regency Tampa property. Ms. Serrano was employed by VHG under Employee ID VHG-EMP-20220314-5587 from March 14, 2022 through August 22, 2025.
3. Categories of Alleged Violations. The Demand Letter asserts five categories of alleged wage-and-hour violations:
(a) Overtime Violations. Failure to pay overtime compensation in accordance with 29 U.S.C. § 207(a), specifically alleging that VHG failed to compensate non-exempt hourly employees at a rate of one and one-half times their regular rate of pay for hours worked in excess of forty (40) hours per workweek.
(b) Automatic Meal-Break Deductions. Illegal automatic deduction of thirty (30) minutes per shift from compensable time for meal breaks, notwithstanding that employees were allegedly required to remain on-call and available to respond to guest and operational needs during meal periods, rendering such time compensable under the FLSA.
(c) Pre-Shift and Post-Shift Work. Failure to compensate employees for pre-shift and post-shift work, including uniform changes, equipment checks, system logins, briefings, and closing procedures, averaging fifteen (15) to twenty-five (25) minutes per shift.
(d) Tipped Employee Minimum Wage. Failure to pay the Florida minimum wage for tipped employees, specifically alleging improper application of a tip credit of $3.02 per hour, which under the applicable Florida minimum wage as of September 30, 2025, required a direct cash wage (tipped minimum wage) of $10.98 per hour. The Demand Letter alleges that VHG failed to satisfy the requirements for claiming a tip credit under both the FLSA and Article X, Section 24 of the Florida Constitution.
(e) Misclassification of Exempt Employees. Willful misclassification of certain "lead" and "senior" hourly positions (e.g., Lead Front Desk Agent, Senior Housekeeping Attendant) as exempt from FLSA overtime requirements under the administrative exemption of 29 U.S.C. § 213(a)(1), despite the fact that these positions allegedly did not satisfy the salary-basis test or the duties test for the administrative exemption.
4. Scope of Putative Class/Collective. The Demand Letter defines the putative class and collective as all current and former hourly, non-exempt employees at Verimark-branded properties in the State of Florida from January 2023 to the present. GLO estimates this group to encompass approximately 4,100 to 5,900 individuals across seven Verimark-branded properties in Florida.
5. Demand Amount. The Demand Letter demands total compensation in the amount of $18,500,000, inclusive of back pay, liquidated damages under 29 U.S.C. § 216(b), and attorneys' fees and costs.
6. Response Deadline. The Demand Letter sets a response deadline of February 28, 2026, and states that if VHG fails to respond or fails to engage in good-faith pre-litigation discussions, GLO intends to file a complaint in the United States District Court for the Middle District of Florida, Tampa Division.
7. VHG's Outside Counsel Engagement. VHG engaged Calderwood & Harkness LLP on January 30, 2026, to serve as outside counsel in connection with a pre-litigation wage-and-hour audit and the defense of the threatened claims. The matter is assigned Calderwood & Harkness Matter Number 1021-00005, with Bernard Crawford serving as Responsible Partner.
8. Litigation Hold. VHG triggered a litigation hold on January 16, 2026, two days after receipt of the Demand Letter. An internal litigation hold memorandum was issued on January 17, 2026, directing the preservation of all documents and electronically stored information relating to the allegations in the Demand Letter. Twenty-three (23) custodians have been identified for preservation purposes, spanning all seven Verimark-branded Florida properties.
9. Applicable Limitations Periods. The Demand Letter implicates the following limitations periods:
(a) Two (2) years for non-willful violations of the FLSA (29 U.S.C. § 255(a));
(b) Three (3) years for willful violations of the FLSA (29 U.S.C. § 255(a));
(c) Five (5) years for claims arising under Article X, Section 24 of the Florida Constitution (pursuant to Fla. Stat. § 95.11(2)(b), applicable to actions founded on a liability created by statute).
EXHIBIT B
DESCRIPTION OF THE PROPERTY AND CONTRACTUAL RELATIONSHIP
This Exhibit B is attached to and incorporated by reference into the Common Interest and Joint Defense Agreement dated [_], 2026, by and between Verimark Hospitality Group Inc. and Palomar Realty Partners LLC.
1. Property. The property subject to this Agreement is the hotel known as Verimark Shores Clearwater, located at 455 Mandalay Avenue, Clearwater Beach, FL 33767 (the "Property").
2. Property Characteristics. The Property is a full-service beachfront hotel consisting of approximately 210 guest rooms, together with ancillary food and beverage outlets, meeting and event spaces, spa and fitness facilities, a pool complex, and associated back-of-house operations.
3. Employees. As of the date of this Agreement, the Property employs approximately two hundred sixty (260) individuals, of whom approximately one hundred ninety (190) are non-exempt hourly workers. Hourly positions include, but are not limited to, front desk agents, housekeeping attendants, food and beverage servers, bartenders, banquet staff, maintenance technicians, pool attendants, spa attendants, and various support roles. Non-exempt employees at the Property fall within the scope of the putative class and collective described in the Demand Letter.
4. Owner. The Property is owned by Palomar Realty Partners LLC, a Florida limited liability company, with offices at 1901 West Cypress Street, Suite 400, Tampa, FL 33607. Palomar acquired the Property in 2021 and entered into the HMA with VHG contemporaneously with the closing of the acquisition.
5. Manager. The Property is managed and operated by Verimark Hospitality Group Inc., a Delaware corporation, with headquarters at 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629, pursuant to the terms of the HMA.
6. Governing Agreement. The relationship between the owner and manager is governed by the Hotel Management Agreement dated June 1, 2021, bearing Reference Number HMA-2021-0601-PC (the "HMA"). The HMA sets forth the respective rights and obligations of Palomar and VHG with respect to the management and operation of the Property.
7. Key Terms Relevant to Joint-Employer Analysis. The following provisions of the HMA are relevant to the joint-employer analysis under the FLSA economic-reality test:
(a) Employment of On-Site Staff. Under the HMA, VHG directly employs all on-site staff at the Property. All employees at the Property are employees of VHG and are carried on VHG's payroll.
(b) HR Policies and Administration. VHG is responsible for establishing and administering all human resources policies applicable to Property employees, including VHG's Employee Handbook (current version v.7.2, effective January 1, 2025) and any property-level policies specific to the Clearwater location.
(c) Payroll Processing. Payroll for Property employees is processed by VHG through Luminos Payroll Solutions Inc., and timekeeping data is maintained in the Luminos TimeTrack system (account LTT-VHG-2022-0041).
(d) Scheduling and Supervision. VHG is responsible for scheduling, supervising, and directing the day-to-day work of all Property employees. VHG's on-site general manager and department heads exercise direct supervisory authority over Property staff.
(e) Day-to-Day Operations. VHG is responsible for the day-to-day management and operation of the Property in accordance with the standards and requirements set forth in the HMA and applicable Verimark brand standards.
(f) Palomar's Role as Property Owner. Palomar's role under the HMA is primarily that of property owner. Palomar retains certain approval rights over annual operating budgets, capital expenditure plans, and the selection and retention of key personnel (including the on-site general manager), as further detailed in the HMA. The extent to which Palomar's approval rights constitute "control" over employment conditions for purposes of the FLSA economic-reality test is a subject of the ongoing joint-employer analysis.
EXHIBIT C
DESIGNATED CONTACTS FOR COMMON INTEREST COMMUNICATIONS
This Exhibit C is attached to and incorporated by reference into the Common Interest and Joint Defense Agreement dated [_], 2026, by and between Verimark Hospitality Group Inc. and Palomar Realty Partners LLC.
All Common Interest Materials shared pursuant to this Agreement shall be transmitted through the following designated contacts. Any changes to the designated contacts shall be communicated in writing to the other Party's primary contact and Counsel.
Verimark Hospitality Group Inc.
Palomar Realty Partners LLC
Note: Ricardo E. Montalvo's designation as the Palomar Secondary Contact is limited to non-legal communications authorized by Palomar's designated Counsel. All Common Interest Materials in written or electronic form shall be transmitted through the Palomar Primary Contact (Palomar's designated Counsel) in the first instance.
[End of Exhibit C]
[End of Document]
Role | Name | Organization | Contact Information
VHG Primary Contact | Bernard Crawford, Esq. | Calderwood & Harkness LLP, 100 SE 2nd St., Ste. 3400, Miami, FL 33131 | Email: [to be inserted]; Phone: [to be inserted]
VHG Secondary Contact | Nadia Petrov, Esq. | Calderwood & Harkness LLP, 100 SE 2nd St., Ste. 3400, Miami, FL 33131 | Email: [to be inserted]; Phone: [to be inserted]
VHG In-House Contact | Devin K. Arroyo, Esq. | Verimark Hospitality Group Inc., 2400 Bayshore Blvd., Ste. 1100, Tampa, FL 33629 | Email: [to be inserted]; Phone: [to be inserted]
Role | Name | Organization | Contact Information
Palomar Primary Contact | [To be designated] | [Palomar's outside counsel — to be inserted] | Email: [to be inserted]; Phone: [to be inserted]
Palomar Secondary Contact | Ricardo E. Montalvo | Palomar Realty Partners LLC, 1901 W. Cypress St., Ste. 400, Tampa, FL 33607 | Email: [to be inserted]; Phone: [to be inserted]

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT / COMMON INTEREST PRIVILEGE

COMMON INTEREST AND JOINT DEFENSE AGREEMENT

COMMON INTEREST AND JOINT DEFENSE AGREEMENT

RECITALS

VERIMARK HOSPITALITY GROUP INC.

PALOMAR REALTY PARTNERS LLC

EXHIBIT A

DESCRIPTION OF THE MATTER

EXHIBIT B

DESCRIPTION OF THE PROPERTY AND CONTRACTUAL RELATIONSHIP

Record

Parties

Dates

Amounts