franchise-surrender-notice-template.docx

1021-00006 · Client 1021 · Closing

franchise-surrender-notice-template.docx DOCUMENT Litigation

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VERIMARK HOSPITALITY GROUP INC. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, Florida 33301 Telephone: (954) 555-7200 Facsimile: (954) 555-7201

April 25, 2024

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL

Coastal Palms Franchise Holdings LLC

Attn: Randall Brecker, Managing Member

9500 Gulf Shore Drive, Suite 450 Naples, FL 34108

With a copy to:

Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, FL 33131

[Property-Level Operating Entity: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_] [Address of Property-Level Operating Entity: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_] [Attn: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]

Note to drafter: For each individual surrender notice, insert the applicable property-level entity addressee above (e.g., Gulf Breeze Hospitality LLC for Florida properties or Savannah Lodging Partners LLC for Georgia properties, as indicated on Exhibit B to the Settlement Agreement).

Re: Notice of Franchise Surrender — [Property Name / Property Address — to be customized per Exhibit A]

Franchise License Agreement dated [\_\_\_\_\_\_\_\_\_\_\_\_\_\_] (ranging from June 15, 2007 through September 3, 2019, as applicable)

Settlement Agreement and Mutual Release dated April 22, 2024 (the "Settlement Agreement")

Case No. 1021-00006, Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida

Dear Mr. Brecker:

This letter constitutes Verimark Hospitality Group Inc.'s formal Notice of Franchise Surrender with respect to the property identified herein and in the attached Exhibit A. Please review this notice carefully and in its entirety, as it sets forth binding obligations and deadlines that require your immediate attention and compliance.

SECTION 1: PURPOSE AND AUTHORITY

This Notice of Franchise Surrender (this "Notice") is issued by Verimark Hospitality Group Inc. ("Verimark") pursuant to Section 7.2 of that certain Settlement Agreement and Mutual Release dated April 22, 2024 (the "Settlement Agreement"), executed among Verimark Hospitality Group Inc., Coastal Palms Franchise Holdings LLC ("Coastal Palms"), Randall Brecker, individually, Theresa Brecker, individually, Nolan Prescott, individually, Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and Suncoast Room Management Inc. (collectively, the "Settling Parties"). The Settlement Agreement was entered into in connection with the resolution of the action styled Verimark Hospitality Group Inc. v. Coastal Palms Franchise Holdings LLC et al., Case No. 1021-00006, pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the "Litigation").

The purpose of this Notice is to formally notify Coastal Palms, and each applicable property-level operating entity, that the Franchise License Agreement (the "FLA") identified herein and in Exhibit A to this Notice pertains to one of the fourteen (14) hotel properties specifically designated for franchise surrender under Exhibit B to the Settlement Agreement. Accordingly, Coastal Palms is required to surrender all franchise rights with respect to the identified property and to complete all de-identification requirements within the timeframe specified in Section 4 of this Notice, as further detailed below.

This Notice constitutes Verimark's exercise of its rights under the Settlement Agreement and under the applicable FLA, including, without limitation, the termination provisions set forth in Section 15.3 of the FLA (Termination Upon Surrender) and the material breach provisions of Sections 14.1 (Events of Default) and 14.2(c) (Remedies Upon Material Breach) of the FLA. Nothing in this Notice shall be construed to limit or modify the terms of the Settlement Agreement, which shall control in the event of any inconsistency between this Notice and the Settlement Agreement.

Verimark has simultaneously issued or will simultaneously issue corresponding franchise surrender notices with respect to each of the remaining thirteen (13) properties designated for surrender under Exhibit B to the Settlement Agreement. Each such notice is issued independently and pertains solely to the specific property identified therein; however, Coastal Palms' obligations with respect to the aggregate group of fourteen (14) surrendered properties are cumulative and concurrent, as set forth in the Settlement Agreement.

SECTION 2: IDENTIFICATION OF SURRENDERED PROPERTY

The property that is the subject of this Notice is identified as follows:

Complete property-specific details for the surrendered property are set forth in Exhibit A attached hereto and incorporated herein by reference.

For reference and context, the fourteen (14) properties designated for franchise surrender under Exhibit B to the Settlement Agreement are located across the following markets: Sarasota, Florida (three properties); Fort Myers, Florida (four properties); Jacksonville, Florida (two properties); Savannah, Georgia (three properties); and Brunswick, Georgia (two properties). This Notice pertains only to the single property identified in the table above and in Exhibit A.

Note to drafter: Each individual surrender notice is to be customized with the specific property information corresponding to the applicable line item on Exhibit B of the Settlement Agreement. The information set forth above and in Exhibit A must be confirmed against the executed Settlement Agreement and the original FLA for accuracy prior to issuance.

SECTION 3: EFFECTIVE DATE OF FRANCHISE TERMINATION

3.1 Termination Effective Date. The franchise rights granted to Coastal Palms under the FLA with respect to the property identified in Section 2 above are hereby terminated, effective as of April 22, 2024 (the "Effective Date"), which corresponds to the effective date of the Settlement Agreement. For the avoidance of doubt, the franchise termination with respect to this property is self-executing and became effective upon the execution of the Settlement Agreement by all Settling Parties, without the requirement of any further action by Verimark beyond delivery of this Notice.

3.2 Cessation of Franchise Operations. From and after the Effective Date, Coastal Palms has no right, license, or authorization to operate the property identified herein under any Verimark brand flag, including, without limitation, the Verimark Suites, Verimark Select, and Verimark Grand brand identifications, or any derivative, variation, or abbreviation thereof. Coastal Palms' rights to use the Verimark System (as defined in the FLA) in connection with the surrendered property have ceased in their entirety.

3.3 Prohibited Activities. Effective immediately and continuing in perpetuity unless otherwise authorized in writing by Verimark, Coastal Palms, the applicable property-level operating entity, and their respective officers, directors, members, managers, employees, and agents shall not, with respect to the surrendered property:

(a) hold themselves out as a franchisee, licensee, or affiliate of Verimark or any Verimark brand;

(b) accept, process, or fulfill any reservations through any Verimark booking platform, including the Verimark Central Reservation System, Verimark's proprietary website, or any Verimark loyalty-program channel;

(c) use any Verimark trademarks, service marks, trade names, logos, trade dress, design elements, color schemes, or other brand identifiers in connection with the property, whether in physical form, digital form, or otherwise;

(d) represent to any guest, prospective guest, vendor, lender, government authority, online travel agency, or other third party that the property is a Verimark-branded property or is in any way associated with Verimark; or

(e) participate in or derive any benefit from the Verimark Rewards loyalty program, including honoring, issuing, or redeeming loyalty points or tier benefits.

3.4 Cessation of Fee Obligations. All financial obligations under the FLA arising solely from the ongoing franchise relationship, including royalty payments calculated at five percent (5%) of Gross Room Revenue ("GRR") as defined in and required by Section 4.1 of the FLA, marketing-fund contributions of two and one-half percent (2.5%) of GRR as required by Section 4.2 of the FLA, and technology fees of twelve dollars and fifty cents ($12.50) per available room per month as required by Section 4.3 of the FLA, shall cease to accrue as of the Effective Date. This cessation of fee obligations is without prejudice to any claims, counterclaims, or defenses that were resolved, released, or otherwise addressed by the mutual release provisions of the Settlement Agreement, and is further subject to the continued fee liability provisions set forth in Section 6.1 of this Notice in the event of non-compliance with de-identification obligations.

SECTION 4: DE-IDENTIFICATION REQUIREMENTS

Coastal Palms acknowledges and agrees that the comprehensive and timely removal of all Verimark branding, trade dress, proprietary technology, and confidential materials from the surrendered property is an essential obligation under both the Settlement Agreement and the FLA. The following de-identification requirements are mandatory and must be completed in strict accordance with the deadlines and specifications set forth below.

4.1 De-Identification Compliance Deadline

Coastal Palms shall complete all de-identification obligations set forth in this Section 4, in their entirety and to Verimark's reasonable satisfaction, within one hundred twenty (120) calendar days of the Effective Date of the Settlement Agreement. Accordingly, the de-identification compliance deadline is August 20, 2024 (the "De-Identification Deadline").

This deadline is firm and non-extendable, except upon the prior written consent of Verimark, which may be withheld in Verimark's sole and absolute discretion. No oral representations, informal communications, or course of dealing shall be construed as extending or modifying the De-Identification Deadline. Requests for extension, if any, must be submitted in writing to both Deidre Langston and Verimark's outside counsel identified in Section 8 below no fewer than thirty (30) calendar days prior to the De-Identification Deadline and must set forth, in reasonable detail, the grounds for the requested extension, the specific de-identification tasks remaining, and a proposed revised timeline for completion.

4.2 Removal of Exterior Signage and Branding

Coastal Palms shall remove, at its sole cost and expense, all exterior signage bearing the Verimark name, any Verimark logo or design mark, or any Verimark brand identifier, including, without limitation, the "Verimark Suites" and "Verimark Select" marks, from the surrendered property. This obligation encompasses the complete physical removal of such signage, not merely the covering, obscuring, or de-energizing thereof, unless Verimark's Franchise Operations team provides prior written approval for an alternative method of de-identification for a specific sign type.

Without limiting the generality of the foregoing, the exterior signage removal obligation includes the following categories:

(a) Monument signs. All free-standing monument or pylon signs located on the property or on adjacent roadways or easements that bear any Verimark branding, including sign faces, cabinet panels, and directional elements.

(b) Building-mounted channel letters and illuminated signs. All channel-letter signage, backlit signage, halo-lit signage, neon signage, and any other illuminated or non-illuminated signage affixed to the building exterior, fascia, parapet, or rooftop that bears Verimark branding.

(c) Directional signage. All on-site directional, wayfinding, or informational signs (including parking lot, entrance, exit, loading dock, and guest-services signs) that reference or display Verimark marks.

(d) Highway and roadway signs. All highway billboard panels, interstate logo signs, tourism-district signs, and any other off-site roadway signage referencing Verimark affiliation, to the extent within Coastal Palms' control or subject to Coastal Palms' permit or lease obligations.

(e) Flagpole banners and flags. All branded flags, pennants, and banners displayed on flagpoles, light poles, or other exterior standards.

(f) Window decals and door signage. All window clings, decals, etched-glass treatments, vinyl lettering, and door-mounted signage bearing Verimark marks, including entrance-door loyalty-program decals and AAA/rating-organization co-branded signage referencing Verimark.

(g) Vehicle wraps and decals. All Verimark branding on property shuttle vehicles, courtesy cars, maintenance vehicles, and any other vehicles owned, leased, or operated by or on behalf of the property, including full wraps, partial wraps, magnetic signs, and vinyl decals.

Following the removal of all exterior Verimark signage, Coastal Palms shall repair any damage to the building exterior, landscaping, concrete bases, electrical conduit, or other physical infrastructure resulting from the sign-removal process, and shall ensure that the property's exterior presents a clean and professional appearance free of any remnants, shadows, outlines, or discoloration associated with previously installed Verimark signage.

4.3 Removal of Interior Branding and Trade Dress

All interior trade-dress elements specific to the Verimark brand system must be removed from the surrendered property or permanently covered in a manner approved in advance by Verimark's Franchise Operations team. The interior de-identification obligation extends to all public areas, guest rooms, back-of-house areas, and any other spaces within or associated with the property that contain Verimark-branded elements. Without limitation, the following categories of interior branding must be addressed:

(a) Lobby signage, logos, and branded artwork. All Verimark logos, brand medallions, framed brand-standard artwork, lobby feature walls, and reception-desk branding elements must be removed or replaced.

(b) Guest-room collateral. All items bearing the Verimark name or logo located within guest rooms must be removed, replaced, or destroyed, including key cards and key-card sleeves, in-room guest directories and compendiums, letterhead and notepads, pens and pencils, laundry bags and laundry slips, "Do Not Disturb" / "Make Up Room" door hangers, toiletry labels and amenity packaging (shampoo, conditioner, body wash, lotion, soap, shower caps, sewing kits, and similar items), television welcome-screen programming, and minibar or snack-service branding.

(c) Branded linens, towels, bathrobes, and amenity packaging. All bed linens, bath towels, hand towels, washcloths, bath mats, pool towels, bathrobes, and slippers bearing embroidered, woven, or printed Verimark marks must be removed from service and replaced with unbranded or independently branded alternatives. Similarly, all branded amenity packaging, gift-shop merchandise, and retail items must be removed from sale and from guest areas.

(d) Restaurant, bar, and food-and-beverage branding. All menus, menu covers, table tents, beverage napkins, coasters, signage, hostess-stand branding, branded serviceware (plates, cups, glassware), and any other food-and-beverage outlet elements bearing Verimark marks must be removed or replaced.

(e) Fitness center, pool area, and meeting-room branding. All signage, towel bins, branded equipment labels, pool rules signs, spa menus, meeting-room name plates, conference-service branding, and event-planning collateral bearing Verimark marks in these areas must be removed or replaced.

(f) Elevator and hallway directional signage. All elevator cab panels, floor-indicator signs, hallway wayfinding signs, floor maps, exit-route placards, and stairwell signs bearing Verimark marks must be removed or replaced with unbranded alternatives.

(g) Branded staff uniforms. All employee uniforms, name badges, aprons, and related apparel bearing the Verimark name, logo, or brand identifiers must be collected and either returned to Verimark or destroyed. Coastal Palms shall provide replacement uniforms that do not reference or imply any Verimark affiliation.

4.4 Removal of Proprietary Technology Systems

Coastal Palms shall promptly disconnect, disable, uninstall, and/or return, as applicable, all Verimark proprietary technology systems and related hardware and software installed at or utilized in connection with the surrendered property. This obligation includes, without limitation, the following:

(a) Verimark Central Reservation System (CRS) connectivity. All data connections, application programming interfaces (APIs), and communication links between the property's reservation systems and the Verimark CRS must be severed. Coastal Palms shall coordinate with Verimark's IT department to ensure an orderly disconnection that does not result in data loss or disruption to Verimark's centralized reservation operations.

(b) Verimark Property Management System (PMS) software modules. Any PMS software modules that are proprietary to Verimark or licensed by Verimark to the property must be uninstalled and all associated license keys deactivated. This does not apply to third-party PMS platforms (e.g., Opera, Maestro, or Mews) that are independently licensed by the property, provided that all Verimark-specific integrations, plug-ins, and data feeds within such platforms are removed.

(c) Verimark loyalty-program enrollment terminals and integration. All Verimark Rewards loyalty-program enrollment kiosks, terminals, card readers, and point-of-sale integrations must be disconnected and, to the extent they constitute Verimark-owned hardware, returned to Verimark.

(d) Verimark-branded Wi-Fi landing pages and guest portal interfaces. All captive-portal splash pages, guest-facing Wi-Fi login screens, and in-room entertainment portal interfaces bearing Verimark branding must be replaced with unbranded or independently branded alternatives.

(e) Revenue-management and rate-optimization tools. Any revenue-management systems, rate-shopping tools, demand-forecasting platforms, or channel-management solutions provided by Verimark or integrated with Verimark's centralized pricing infrastructure must be disconnected.

(f) Real-time POS integration feeds. All point-of-sale system data feeds that transmit transactional information to Verimark's centralized reporting or accounting systems must be terminated.

All proprietary hardware that is owned by Verimark and located at the surrendered property must be identified, inventoried, carefully packaged, and returned to Verimark at the following address within the 120-day De-Identification Period: Verimark Hospitality Group Inc., Attn: Technology Asset Recovery, 2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, FL 33301. All shipping, freight, insurance, and handling costs associated with the return of Verimark-owned hardware shall be borne solely by Coastal Palms.

4.5 Digital and Online De-Identification

Coastal Palms shall ensure the prompt and complete removal of all Verimark branding from all digital and online channels associated with the surrendered property. The digital de-identification obligation includes, without limitation, the following:

(a) Property website(s). All Verimark logos, brand references, brand-standard design elements, hyperlinks to Verimark's corporate website or booking engine, and any other content implying Verimark affiliation must be removed from the property's website(s). If the property's primary website is hosted on a Verimark-controlled domain or subdomain, the property must migrate to an independent domain and hosting platform.

(b) Third-party OTA listings. The property must be delisted from all Verimark group or chain-level listings on online travel agencies (OTAs) including, without limitation, Aldermere Technologies, Bramwell Holdings, Drayton Software, Penmark Industries, Northpoint Corporation, Drayton Corporation, and Greaves Group. If Coastal Palms elects to re-list the property independently on any OTA platform, the listing must not reference, suggest, or imply any current or former Verimark affiliation, and must not use Verimark photographs, descriptions, or marketing content.

(c) Social media accounts. All social media accounts (including Kestrel Services Inc., Northpoint Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., Crowne Albany Partners LLC, and Pinterest) that reference Verimark affiliation must be updated to remove all Verimark branding, or deactivated entirely.

(d) Severin Industries Business and mapping-service listings. All Severin Industries Business Profile listings, Tidewater Industries Maps listings, Ashgrove Industries Places listings, Yelp listings, Kestrel Group listings, and similar directory or mapping-service entries must be updated to remove references to Verimark brand flags and to reflect the property's independent (unbranded) status.

(e) Email addresses. All email addresses using any Verimark-controlled domain (including @verimarksuites.com, @verimarkselect.com, @verimarkhotels.com, and any subdomains thereof) must be deactivated and replaced with email addresses on independently controlled domains.

Special Note Regarding gulfcoastrooms.com: The unbranded website gulfcoastrooms.com, which is operated by Suncoast Room Management Inc., may continue to operate after the Effective Date only if it does not reference, display, or use any Verimark marks, trade dress, logos, design elements, or other brand identifiers, and does not, expressly or by implication, suggest any affiliation between the property and Verimark. Verimark reserves the right to review gulfcoastrooms.com at any time during or after the De-Identification Period and to demand immediate removal of any content that, in Verimark's reasonable judgment, implies or suggests Verimark affiliation.

4.6 Print and Advertising Materials

All printed advertising materials, brochures, business cards, rack cards, promotional flyers, rate sheets, group-sales kits, wedding and event brochures, stationery, envelopes, mailing labels, fax cover sheets, and any other printed or pre-printed materials bearing the Verimark name, logo, or any Verimark marks must be permanently destroyed or defaced such that the Verimark marks are no longer visible or legible. Destruction may be accomplished by shredding, recycling, or other appropriate means; provided, however, that Coastal Palms shall maintain a brief written record of the materials destroyed and the date of destruction for Verimark's inspection.

No future marketing, advertising, promotional, or public-relations materials produced by or on behalf of Coastal Palms, the property-level operating entity, or any successor operator may reference any current or former Verimark affiliation, brand membership, quality rating, or award received in connection with the Verimark brand system, without the express prior written consent of Verimark.

4.7 Proprietary Standards Manuals and Confidential Information

All copies of Verimark's brand-standards manuals, design-standards guides, operating-procedures manuals, quality-assurance checklists, training curricula, employee handbooks containing Verimark proprietary content, franchise operations bulletins, revenue-management playbooks, and any other documents or materials containing Verimark's confidential, proprietary, or trade-secret information (collectively, "Confidential Materials") must be returned to Verimark or certified as destroyed within the De-Identification Period.

This obligation extends to Confidential Materials in any and all formats, including printed hard copies, photocopies, electronic files (including PDF, Word, Excel, and Northgate Services Inc. files), email attachments, files stored on local hard drives, network servers, cloud storage platforms, USB drives, external hard drives, and any other storage media. Coastal Palms shall conduct a diligent and thorough search of all physical and electronic storage locations to identify and collect all Confidential Materials.

Upon completion of the return or destruction of Confidential Materials, an authorized representative of Coastal Palms shall execute the Certification of Completion form attached as part of Exhibit B to this Notice, affirming under penalty of perjury that all Confidential Materials have been returned to Verimark or destroyed, and that no copies have been retained in any format.

SECTION 5: VERIMARK INSPECTION RIGHTS

5.1 Inspection Authorization. Verimark reserves the right to conduct one or more inspections of the surrendered property at any time during the 120-day De-Identification Period and at any time during the twelve (12) months following the De-Identification Deadline to verify Coastal Palms' compliance with the de-identification requirements set forth in this Notice and in the Settlement Agreement. Coastal Palms hereby acknowledges and confirms that Verimark's inspection rights are a material element of the Settlement Agreement and the franchise surrender process.

5.2 Notice of Inspection. Inspections may be conducted upon five (5) business days' prior written notice to Coastal Palms, delivered to the address set forth in the preamble of this Notice or to such other address as Coastal Palms may designate in writing. Notice may be provided via email to Randall Brecker and to the general manager of the surrendered property, with a copy to Nathan Whitfield III. Coastal Palms shall ensure that Verimark's inspection team is granted reasonable access to all areas of the surrendered property, including guest rooms, back-of-house areas, storage rooms, technology closets, and any off-site storage facilities used to house property-related materials.

5.3 Deficiency Notice and Cure Period. If any inspection conducted by Verimark or its designees reveals that de-identification has not been fully completed — whether due to the presence of remaining Verimark signage, branding, technology systems, digital references, printed materials, or Confidential Materials — Verimark shall provide Coastal Palms with a written notice of deficiencies (a "Deficiency Notice") specifying in reasonable detail each area of non-compliance identified during the inspection. Upon receipt of a Deficiency Notice, Coastal Palms shall have fifteen (15) business days to cure all identified deficiencies and to provide written confirmation of cure to Verimark.

5.4 Inspection Costs. Verimark may engage third-party inspectors, brand-compliance consultants, or other professional service providers at its discretion to assist with the inspection process. The costs and expenses of any such inspection, including travel, lodging, and professional fees, shall be borne by Verimark; provided, however, that if the inspection reveals any deficiency in Coastal Palms' de-identification compliance, all costs and expenses of such inspection (and any subsequent re-inspection) shall be borne by Coastal Palms and shall be payable within thirty (30) days of Verimark's written invoice therefor.

SECTION 6: CONSEQUENCES OF NON-COMPLIANCE

Coastal Palms is hereby placed on notice that the failure to comply with the de-identification obligations set forth in this Notice and in the Settlement Agreement may result in significant financial and legal consequences, including, without limitation, the following:

6.1 Ongoing Royalty and Fee Liability

If Coastal Palms fails to complete de-identification of the surrendered property by the De-Identification Deadline of August 20, 2024, Coastal Palms shall remain liable for, and shall promptly pay to Verimark, all royalty payments (calculated at five percent (5%) of GRR), marketing-fund contributions (calculated at two and one-half percent (2.5%) of GRR), and technology fees (calculated at twelve dollars and fifty cents ($12.50) per available room per month) for the surrendered property, as if the FLA remained in full force and effect, for the entire period from the De-Identification Deadline through the date on which de-identification is fully and satisfactorily completed (the "Non-Compliant Period"). Such fees shall be calculated based on the actual gross room revenues generated by the surrendered property during the Non-Compliant Period, and shall be payable monthly within fifteen (15) days after the end of each calendar month, accompanied by the financial reporting required under Section 5.2 of the FLA.

6.2 Trademark Infringement

The continued use of any Verimark marks — including the Verimark name, the Verimark Suites mark, the Verimark Select mark, the Verimark Grand mark, any Verimark logo or design mark, and any Verimark trade dress — beyond the De-Identification Deadline without Verimark's express written authorization shall constitute willful trademark infringement and unfair competition under federal law (15 U.S.C. §§ 1114, 1125(a)), the Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. §§ 501.201 et seq.), and the common law of the State of Florida. In such event, Verimark expressly reserves all rights and remedies available at law and in equity, including, without limitation, the right to seek temporary, preliminary, and permanent injunctive relief, treble damages, statutory damages, disgorgement of profits, and recovery of reasonable attorneys' fees and costs.

6.3 Acceleration Under the Settlement Agreement

Non-compliance with the de-identification obligations set forth in this Notice and in the Settlement Agreement may constitute an "Event of Default" as defined in Section 12.1 of the Settlement Agreement. Upon the occurrence and during the continuance of an Event of Default, Verimark shall have the right, at its election, to accelerate all remaining structured settlement payments owed by Coastal Palms under the Settlement Agreement. As of the date of this Notice, the remaining structured payment obligation consists of eight (8) semi-annual installments of Seven Million Eight Hundred Twelve Thousand Five Hundred Dollars ($7,812,500.00) each, for an aggregate remaining principal balance of Sixty-Two Million Five Hundred Thousand Dollars ($62,500,000.00), together with simple interest accruing at the rate of six and one-half percent (6.5%) per annum on the outstanding principal balance. Upon acceleration, the entire outstanding principal balance, together with all accrued and unpaid interest, shall become immediately due and payable in full, without further notice or demand. The specific acceleration-trigger provisions are set forth in Sections 12.1(c) and 12.2 of the Settlement Agreement.

6.4 Enforcement of Security Interest and Personal Guaranties

In addition to the foregoing remedies, Verimark's rights upon an Event of Default include the right to enforce its first-priority security interest (as granted under Section 9.1 of the Settlement Agreement) in eight (8) unencumbered hotel properties owned by Coastal Palms and its affiliates, which properties have an aggregate appraised value of approximately Seventy-One Million Two Hundred Thousand Dollars ($71,200,000.00) as determined by independent appraisals obtained in connection with the Settlement Agreement. Verimark further reserves the right to enforce the personal guaranties of payment and performance executed by Randall Brecker and Nolan Prescott pursuant to Section 9.3 of the Settlement Agreement, which guaranties are unconditional, absolute, and continuing, and which guaranty the full and timely payment of all amounts owed under the Settlement Agreement.

SECTION 7: OBLIGATIONS SURVIVING FRANCHISE TERMINATION

Coastal Palms acknowledges and agrees that the termination of the FLA with respect to the surrendered property does not terminate or diminish the following obligations, each of which survives franchise termination in accordance with its terms:

(a) Non-Competition. To the extent the FLA contains post-termination non-competition provisions (including the restrictions set forth in Section 17.1 of the FLA regarding the operation of a competing hotel within a specified radius of the surrendered property for a specified period following termination), such provisions survive termination and remain in full force and effect in accordance with their stated terms, subject to applicable law.

(b) Confidentiality. The confidentiality obligations set forth in Section 16 of the FLA and in Section 14 of the Settlement Agreement remain in full force and effect following franchise termination and are perpetual in duration. Coastal Palms, the property-level operating entity, and their respective officers, members, managers, employees, and agents shall not disclose, use, or permit the disclosure or use of any Verimark Confidential Information (as defined in the FLA) at any time following the Effective Date.

(c) Non-Disparagement. The mutual non-disparagement clause set forth in Section 15.4 of the Settlement Agreement applies to all Settling Parties and remains in full force and effect for a period of three (3) years from the Effective Date of the Settlement Agreement (i.e., through April 22, 2027). During such period, neither Coastal Palms nor any of its affiliates, members, managers, or agents shall make any public or private statements that disparage, defame, or cast in a negative light Verimark, its brands, its officers, directors, or employees, and Verimark shall not make any such statements regarding Coastal Palms, its members, or its affiliated entities.

(d) Indemnification. Coastal Palms' indemnification obligations under Section 18 of the FLA with respect to claims, losses, damages, liabilities, costs, and expenses arising out of or relating to the operation of the surrendered property during the franchise term (i.e., pre-termination liabilities) survive termination in accordance with the FLA and shall not be affected by the franchise surrender.

(e) Cooperation with Claims and Litigation. Coastal Palms shall cooperate fully with Verimark in connection with any pending or future guest claims, personal-injury claims, premises-liability claims, employment claims, regulatory inquiries, or other litigation or administrative proceedings arising from or relating to the operation of the surrendered property during the franchise term, including by providing access to records, making witnesses available for depositions and trial testimony, and assisting with the defense or prosecution of any such matters.

SECTION 8: CONTACT INFORMATION FOR DE-IDENTIFICATION COORDINATION

All communications, questions, reports, and submissions regarding the de-identification process for the surrendered property should be directed to:

Operational Contact:

Deidre Langston Senior Vice President, Franchise Operations Verimark Hospitality Group Inc. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, FL 33301 Telephone: (954) 555-7218

Email: dlangston@verimarkhotels.com

All legal inquiries, disputes, or formal correspondence regarding this Notice, the de-identification requirements, or the interpretation or enforcement of the Settlement Agreement should be directed to:

Legal Contact:

Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Florida Bar No. 0087451 Telephone: (954) 555-3400

Email: panand@calderwoodharkness.com

Coastal Palms is encouraged to designate a single point of contact for de-identification coordination at the property level and to communicate such designation in writing to Ms. Langston within ten (10) business days of receipt of this Notice.

SECTION 9: RESERVATION OF RIGHTS

This Notice does not constitute, and shall not be construed as, a waiver, modification, or limitation of any of Verimark's rights, remedies, claims, or defenses under the Settlement Agreement, the FLA, any ancillary agreement, or applicable federal, state, or local law. Verimark expressly reserves all rights and remedies available to it under the Settlement Agreement executed April 22, 2024, including, without limitation, the enforcement rights set forth in Sections 9, 10, 11, and 12 thereof.

The mutual release set forth in Section 6 of the Settlement Agreement applies to claims arising through the Effective Date, as specified therein, but does not release, discharge, or otherwise affect any party's obligations arising under the Settlement Agreement itself, including the structured payment obligations, the security interest, the personal guaranties, the de-identification obligations, or any other covenants, representations, or warranties contained in the Settlement Agreement.

Capitalized terms used but not otherwise defined in this Notice shall have the meanings ascribed to them in the Settlement Agreement or, to the extent not defined therein, in the applicable FLA.

SECTION 10: GOVERNING LAW AND VENUE

This Notice and the obligations described herein shall be governed by, construed in accordance with, and enforced under the laws of the State of Florida, without regard to its conflict-of-laws principles. Consistent with the mandatory venue provision set forth in Section 22.1 of the FLA and Section 17.2 of the Settlement Agreement, any dispute, claim, or proceeding arising out of or relating to this Notice, the de-identification obligations, or the franchise surrender shall be brought exclusively in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, or, if federal subject-matter jurisdiction exists, in the United States District Court for the Southern District of Florida, Fort Lauderdale Division. Each party irrevocably waives any objection to such venue, including any objection based on inconvenient forum.

This Notice is effective as of the date first set forth above. Please govern yourself accordingly.

Very truly yours,

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Renata Solis-Vega

Title: Senior Vice President & General Counsel

Date: April 25, 2024

cc (via email and first-class mail):

Priya Anand, Esq., Calderwood & Harkness LLP Douglas Carmichael, Esq., Calderwood & Harkness LLP Yuki Nakamura, Esq., Calderwood & Harkness LLP Nathan Whitfield III, Esq., Whitfield, Barrow & Crane LLP Deidre Langston, SVP, Franchise Operations, Verimark Hospitality Group Inc. Martin Holcomb, EVP & CFO, Verimark Hospitality Group Inc.

EXHIBIT A

PROPERTY-SPECIFIC INFORMATION

(To Be Attached to Each Individual Surrender Notice)

The following property-specific information is extracted from Exhibit B to the Settlement Agreement and Mutual Release dated April 22, 2024, and pertains to the property that is the subject of the accompanying Notice of Franchise Surrender.

Note to drafter: Complete all fields above using information from the executed Exhibit B to the Settlement Agreement. Verify all details against the original FLA and any amendments. If the property has any unique de-identification considerations (e.g., shared signage with a co-located facility, shared parking structure with another Verimark-branded property that is not being surrendered, or third-party sign leases), describe those considerations in the final row and address them in coordination with Deidre Langston and Verimark's outside counsel.

EXHIBIT B

DE-IDENTIFICATION CHECKLIST

(To Be Completed at the Property Level and Submitted Upon Completion)

Property Name: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

Property Address: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\

De-Identification Deadline: August 20, 2024

Part 1: Exterior Signage Removal

Part 2: Interior Branding Removal

Part 3: Technology Systems disconnection / Return

Part 4: Digital Channel De-Listing

Part 5: Print Material Destruction

Part 6: Confidential Materials Return

Certification of Completion

I, the undersigned, am an authorized representative of Coastal Palms Franchise Holdings LLC and/or the property-level operating entity identified in Exhibit A. I hereby certify that, as of the date set forth below, all de-identification tasks listed in this Exhibit B have been completed in their entirety with respect to the property identified in Exhibit A. I further certify that all Verimark Confidential Materials have been returned to Verimark or destroyed, and that no copies have been retained in any format — paper, electronic, or otherwise.

I understand that this certification is being relied upon by Verimark Hospitality Group Inc. and that any material misstatement or omission herein may constitute a breach of the Settlement Agreement and Mutual Release dated April 22, 2024.

COASTAL PALMS FRANCHISE HOLDINGS LLC

By: ________

Name: ________

Title: ________

Date: ________

[PROPERTY-LEVEL OPERATING ENTITY NAME]

By: ________

Name: ________

Title: ________

Date: ________

Submit completed and signed Certification of Completion to:

Deidre Langston, SVP, Franchise Operations Verimark Hospitality Group Inc. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, FL 33301

Email: dlangston@verimarkhotels.com

With a copy to:

Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301

Email: panand@calderwoodharkness.com

Deadline for Submission: No later than August 20, 2024.

Field	Information
Property Name	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property Street Address	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
City, State, ZIP Code	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Execution Date	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Brand Flag	[Verimark Suites / Verimark Select — specify as applicable]
Number of Guest Rooms	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Level Operating Entity	[e.g., Gulf Breeze Hospitality LLC / Savannah Lodging Partners LLC]
Field	Information
Full Legal Name of Property	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property Street Address	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
City, State, ZIP Code	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
County	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Applicable FLA Execution Date	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Amendment(s) (if any)	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Brand Flag	[Verimark Suites / Verimark Select]
Number of Guest Rooms	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Level Operating Entity	[e.g., Gulf Breeze Hospitality LLC / Savannah Lodging Partners LLC]
State of Formation of Operating Entity	[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Specific De-Identification Considerations	[e.g., shared monument sign with adjacent retail; co-located fitness facility with non-surrendered property; shared parking structure signage — describe as applicable, or state "None"]
Item No.	Task	Date Completed	Initials
1.1	Monument sign(s) — all Verimark branding removed	\\\\\\\\\\	\\\\\_
1.2	Building-mounted channel letters / Illuminated signs removed	\\\\\\\\\\	\\\\\_
1.3	Directional / wayfinding signs — all Verimark references removed	\\\\\\\\\\	\\\\\_
1.4	Highway / roadway signs — all Verimark references removed or permits cancelled	\\\\\\\\\\	\\\\\_

1.5	Flagpole banners and flags removed	\\\\\\\\\\	\\\\\_
1.6	Window decals and door signage removed	\\\\\\\\\\	\\\\\_
1.7	Vehicle wraps / decals removed from all property vehicles	\\\\\\\\\\	\\\\\_
1.8	Exterior surfaces repaired and cleaned following sign removal	\\\\\\\\\\	\\\\\_
Item No.	Task	Date Completed	Initials
2.1	Lobby — all Verimark signage, logos, and branded artwork removed	\\\\\\\\\\	\\\\\_
2.2	Front desk / reception area — all Verimark branding removed	\\\\\\\\\\	\\\\\_
2.3	Guest rooms — key cards, sleeves, and card readers de-branded	\\\\\\\\\\	\\\\\_
2.4	Guest rooms — in-room directories and compendiums removed/replaced	\\\\\\\\\\	\\\\\_
2.5	Guest rooms — stationery, pens, notepads, laundry bags removed	\\\\\\\\\\	\\\\\_
2.6	Guest rooms — toiletry labels and amenity packaging replaced	\\\\\\\\\\	\\\\\_
2.7	Guest rooms — branded linens, towels, bathrobes removed from service	\\\\\\\\\\	\\\\\_
2.8	Guest rooms — television welcome screens and in-room entertainment de-branded	\\\\\\\\\\	\\\\\_
2.9	Guest rooms — door hangers (DND/MUR) replaced	\\\\\\\\\\	\\\\\_
2.10	Food & Beverage outlets — menus, table tents, napkins, serviceware de-branded	\\\\\\\\\\	\\\\\_
2.11	Fitness center — all Verimark branding removed	\\\\\\\\\\	\\\\\_
2.12	Pool area and spa — all Verimark branding removed	\\\\\\\\\\	\\\\\_
2.13	Meeting rooms and business center — all Verimark branding removed	\\\\\\\\\\	\\\\\_
2.14	Elevators, hallways, and stairwells — all Verimark signage removed	\\\\\\\\\\	\\\\\_
2.15	Back-of-house areas — all Verimark posters, notices, and signage removed	\\\\\\\\\\	\\\\\_
2.16	Staff uniforms and name badges — all Verimark-branded items collected and destroyed/returned	\\\\\\\\\\	\\\\\_
2.17	Gift shop / retail — all Verimark-branded merchandise removed from sale	\\\\\\\\\\	\\\\\_
Item No.	Task	Date Completed	Initials
3.1	CRS connectivity severed	\\\\\\\\\\	\\\\\_
3.2	Verimark PMS software modules uninstalled / license keys deactivated	\\\\\\\\\\	\\\\\_

3.3	Loyalty-program terminals disconnected and returned (if Verimark-owned)	\\\\\\\\\\	\\\\\_
3.4	Wi-Fi captive portal / guest portal de-branded	\\\\\\\\\\	\\\\\_
3.5	Revenue-management and rate-optimization tools disconnected	\\\\\\\\\\	\\\\\_
3.6	POS integration data feeds to Verimark terminated	\\\\\\\\\\	\\\\\_
3.7	All Verimark-owned hardware inventoried, packaged, and shipped	\\\\\\\\\\	\\\\\_
3.8	Shipping tracking number(s) provided to Verimark IT department	\\\\\\\\\\	\\\\\_
Item No.	Task	Date Completed	Initials
4.1	Property website — all Verimark branding and links removed	\\\\\\\\\\	\\\\\_
4.2	OTA listings — property delisted from Verimark group listings	\\\\\\\\\\	\\\\\_
4.3	Social media accounts — Verimark references removed or accounts deactivated	\\\\\\\\\\	\\\\\_
4.4	Severin Industries Business / mapping services — Verimark brand references removed	\\\\\\\\\\	\\\\\_
4.5	Email addresses on Verimark domains deactivated	\\\\\\\\\\	\\\\\_
4.6	Kestrel Group listing — Verimark chain affiliation removed	\\\\\\\\\\	\\\\\_
Item No.	Task	Date Completed	Initials
5.1	Brochures and rack cards — destroyed	\\\\\\\\\\	\\\\\_
5.2	Business cards — destroyed	\\\\\\\\\\	\\\\\_
5.3	Stationery, envelopes, and letterhead — destroyed	\\\\\\\\\\	\\\\\_
5.4	Promotional and advertising materials — destroyed	\\\\\\\\\\	\\\\\_
5.5	Group-sales kits and event materials — destroyed	\\\\\\\\\\	\\\\\_
5.6	Written record of destroyed materials maintained	\\\\\\\\\\	\\\\\_
Item No.	Task	Date Completed	Initials
6.1	Brand-standards manuals (all editions) — returned or certified destroyed	\\\\\\\\\\	\\\\\_
6.2	Operating-procedures manuals — returned or certified destroyed	\\\\\\\\\\	\\\\\_
6.3	Training curricula and materials — returned or certified destroyed	\\\\\\\\\\	\\\\\_
6.4	Quality-assurance checklists — returned or certified destroyed	\\\\\\\\\\	\\\\\_

6.5	Revenue-management playbooks — returned or certified destroyed	\\\\\\\\\\	\\\\\_
6.6	Electronic copies — deleted from all devices, servers, and cloud storage	\\\\\\\\\\	\\\\\_
6.7	Search of all physical and electronic storage locations completed	\\\\\\\\\\	\\\\\_

VERIMARK HOSPITALITY GROUP INC. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, Florida 33301 Telephone: (954) 555-7200 Facsimile: (954) 555-7201
April 25, 2024
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL
Coastal Palms Franchise Holdings LLC
Attn: Randall Brecker, Managing Member
9500 Gulf Shore Drive, Suite 450 Naples, FL 34108
With a copy to:
Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, FL 33131
[Property-Level Operating Entity: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_] [Address of Property-Level Operating Entity: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_] [Attn: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Note to drafter: For each individual surrender notice, insert the applicable property-level entity addressee above (e.g., Gulf Breeze Hospitality LLC for Florida properties or Savannah Lodging Partners LLC for Georgia properties, as indicated on Exhibit B to the Settlement Agreement).
Re: Notice of Franchise Surrender — [Property Name / Property Address — to be customized per Exhibit A]
Franchise License Agreement dated [\_\_\_\_\_\_\_\_\_\_\_\_\_\_] (ranging from June 15, 2007 through September 3, 2019, as applicable)
Settlement Agreement and Mutual Release dated April 22, 2024 (the "Settlement Agreement")
Case No. 1021-00006, Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida
Dear Mr. Brecker:
This letter constitutes Verimark Hospitality Group Inc.'s formal Notice of Franchise Surrender with respect to the property identified herein and in the attached Exhibit A. Please review this notice carefully and in its entirety, as it sets forth binding obligations and deadlines that require your immediate attention and compliance.
SECTION 1: PURPOSE AND AUTHORITY
This Notice of Franchise Surrender (this "Notice") is issued by Verimark Hospitality Group Inc. ("Verimark") pursuant to Section 7.2 of that certain Settlement Agreement and Mutual Release dated April 22, 2024 (the "Settlement Agreement"), executed among Verimark Hospitality Group Inc., Coastal Palms Franchise Holdings LLC ("Coastal Palms"), Randall Brecker, individually, Theresa Brecker, individually, Nolan Prescott, individually, Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and Suncoast Room Management Inc. (collectively, the "Settling Parties"). The Settlement Agreement was entered into in connection with the resolution of the action styled Verimark Hospitality Group Inc. v. Coastal Palms Franchise Holdings LLC et al., Case No. 1021-00006, pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the "Litigation").
The purpose of this Notice is to formally notify Coastal Palms, and each applicable property-level operating entity, that the Franchise License Agreement (the "FLA") identified herein and in Exhibit A to this Notice pertains to one of the fourteen (14) hotel properties specifically designated for franchise surrender under Exhibit B to the Settlement Agreement. Accordingly, Coastal Palms is required to surrender all franchise rights with respect to the identified property and to complete all de-identification requirements within the timeframe specified in Section 4 of this Notice, as further detailed below.
This Notice constitutes Verimark's exercise of its rights under the Settlement Agreement and under the applicable FLA, including, without limitation, the termination provisions set forth in Section 15.3 of the FLA (Termination Upon Surrender) and the material breach provisions of Sections 14.1 (Events of Default) and 14.2(c) (Remedies Upon Material Breach) of the FLA. Nothing in this Notice shall be construed to limit or modify the terms of the Settlement Agreement, which shall control in the event of any inconsistency between this Notice and the Settlement Agreement.
Verimark has simultaneously issued or will simultaneously issue corresponding franchise surrender notices with respect to each of the remaining thirteen (13) properties designated for surrender under Exhibit B to the Settlement Agreement. Each such notice is issued independently and pertains solely to the specific property identified therein; however, Coastal Palms' obligations with respect to the aggregate group of fourteen (14) surrendered properties are cumulative and concurrent, as set forth in the Settlement Agreement.
SECTION 2: IDENTIFICATION OF SURRENDERED PROPERTY
The property that is the subject of this Notice is identified as follows:
Complete property-specific details for the surrendered property are set forth in Exhibit A attached hereto and incorporated herein by reference.
For reference and context, the fourteen (14) properties designated for franchise surrender under Exhibit B to the Settlement Agreement are located across the following markets: Sarasota, Florida (three properties); Fort Myers, Florida (four properties); Jacksonville, Florida (two properties); Savannah, Georgia (three properties); and Brunswick, Georgia (two properties). This Notice pertains only to the single property identified in the table above and in Exhibit A.
Note to drafter: Each individual surrender notice is to be customized with the specific property information corresponding to the applicable line item on Exhibit B of the Settlement Agreement. The information set forth above and in Exhibit A must be confirmed against the executed Settlement Agreement and the original FLA for accuracy prior to issuance.
SECTION 3: EFFECTIVE DATE OF FRANCHISE TERMINATION
3.1 Termination Effective Date. The franchise rights granted to Coastal Palms under the FLA with respect to the property identified in Section 2 above are hereby terminated, effective as of April 22, 2024 (the "Effective Date"), which corresponds to the effective date of the Settlement Agreement. For the avoidance of doubt, the franchise termination with respect to this property is self-executing and became effective upon the execution of the Settlement Agreement by all Settling Parties, without the requirement of any further action by Verimark beyond delivery of this Notice.
3.2 Cessation of Franchise Operations. From and after the Effective Date, Coastal Palms has no right, license, or authorization to operate the property identified herein under any Verimark brand flag, including, without limitation, the Verimark Suites, Verimark Select, and Verimark Grand brand identifications, or any derivative, variation, or abbreviation thereof. Coastal Palms' rights to use the Verimark System (as defined in the FLA) in connection with the surrendered property have ceased in their entirety.
3.3 Prohibited Activities. Effective immediately and continuing in perpetuity unless otherwise authorized in writing by Verimark, Coastal Palms, the applicable property-level operating entity, and their respective officers, directors, members, managers, employees, and agents shall not, with respect to the surrendered property:
(a) hold themselves out as a franchisee, licensee, or affiliate of Verimark or any Verimark brand;
(b) accept, process, or fulfill any reservations through any Verimark booking platform, including the Verimark Central Reservation System, Verimark's proprietary website, or any Verimark loyalty-program channel;
(c) use any Verimark trademarks, service marks, trade names, logos, trade dress, design elements, color schemes, or other brand identifiers in connection with the property, whether in physical form, digital form, or otherwise;
(d) represent to any guest, prospective guest, vendor, lender, government authority, online travel agency, or other third party that the property is a Verimark-branded property or is in any way associated with Verimark; or
(e) participate in or derive any benefit from the Verimark Rewards loyalty program, including honoring, issuing, or redeeming loyalty points or tier benefits.
3.4 Cessation of Fee Obligations. All financial obligations under the FLA arising solely from the ongoing franchise relationship, including royalty payments calculated at five percent (5%) of Gross Room Revenue ("GRR") as defined in and required by Section 4.1 of the FLA, marketing-fund contributions of two and one-half percent (2.5%) of GRR as required by Section 4.2 of the FLA, and technology fees of twelve dollars and fifty cents ($12.50) per available room per month as required by Section 4.3 of the FLA, shall cease to accrue as of the Effective Date. This cessation of fee obligations is without prejudice to any claims, counterclaims, or defenses that were resolved, released, or otherwise addressed by the mutual release provisions of the Settlement Agreement, and is further subject to the continued fee liability provisions set forth in Section 6.1 of this Notice in the event of non-compliance with de-identification obligations.
SECTION 4: DE-IDENTIFICATION REQUIREMENTS
Coastal Palms acknowledges and agrees that the comprehensive and timely removal of all Verimark branding, trade dress, proprietary technology, and confidential materials from the surrendered property is an essential obligation under both the Settlement Agreement and the FLA. The following de-identification requirements are mandatory and must be completed in strict accordance with the deadlines and specifications set forth below.
4.1 De-Identification Compliance Deadline
Coastal Palms shall complete all de-identification obligations set forth in this Section 4, in their entirety and to Verimark's reasonable satisfaction, within one hundred twenty (120) calendar days of the Effective Date of the Settlement Agreement. Accordingly, the de-identification compliance deadline is August 20, 2024 (the "De-Identification Deadline").
This deadline is firm and non-extendable, except upon the prior written consent of Verimark, which may be withheld in Verimark's sole and absolute discretion. No oral representations, informal communications, or course of dealing shall be construed as extending or modifying the De-Identification Deadline. Requests for extension, if any, must be submitted in writing to both Deidre Langston and Verimark's outside counsel identified in Section 8 below no fewer than thirty (30) calendar days prior to the De-Identification Deadline and must set forth, in reasonable detail, the grounds for the requested extension, the specific de-identification tasks remaining, and a proposed revised timeline for completion.
4.2 Removal of Exterior Signage and Branding
Coastal Palms shall remove, at its sole cost and expense, all exterior signage bearing the Verimark name, any Verimark logo or design mark, or any Verimark brand identifier, including, without limitation, the "Verimark Suites" and "Verimark Select" marks, from the surrendered property. This obligation encompasses the complete physical removal of such signage, not merely the covering, obscuring, or de-energizing thereof, unless Verimark's Franchise Operations team provides prior written approval for an alternative method of de-identification for a specific sign type.
Without limiting the generality of the foregoing, the exterior signage removal obligation includes the following categories:
(a) Monument signs. All free-standing monument or pylon signs located on the property or on adjacent roadways or easements that bear any Verimark branding, including sign faces, cabinet panels, and directional elements.
(b) Building-mounted channel letters and illuminated signs. All channel-letter signage, backlit signage, halo-lit signage, neon signage, and any other illuminated or non-illuminated signage affixed to the building exterior, fascia, parapet, or rooftop that bears Verimark branding.
(c) Directional signage. All on-site directional, wayfinding, or informational signs (including parking lot, entrance, exit, loading dock, and guest-services signs) that reference or display Verimark marks.
(d) Highway and roadway signs. All highway billboard panels, interstate logo signs, tourism-district signs, and any other off-site roadway signage referencing Verimark affiliation, to the extent within Coastal Palms' control or subject to Coastal Palms' permit or lease obligations.
(e) Flagpole banners and flags. All branded flags, pennants, and banners displayed on flagpoles, light poles, or other exterior standards.
(f) Window decals and door signage. All window clings, decals, etched-glass treatments, vinyl lettering, and door-mounted signage bearing Verimark marks, including entrance-door loyalty-program decals and AAA/rating-organization co-branded signage referencing Verimark.
(g) Vehicle wraps and decals. All Verimark branding on property shuttle vehicles, courtesy cars, maintenance vehicles, and any other vehicles owned, leased, or operated by or on behalf of the property, including full wraps, partial wraps, magnetic signs, and vinyl decals.
Following the removal of all exterior Verimark signage, Coastal Palms shall repair any damage to the building exterior, landscaping, concrete bases, electrical conduit, or other physical infrastructure resulting from the sign-removal process, and shall ensure that the property's exterior presents a clean and professional appearance free of any remnants, shadows, outlines, or discoloration associated with previously installed Verimark signage.
4.3 Removal of Interior Branding and Trade Dress
All interior trade-dress elements specific to the Verimark brand system must be removed from the surrendered property or permanently covered in a manner approved in advance by Verimark's Franchise Operations team. The interior de-identification obligation extends to all public areas, guest rooms, back-of-house areas, and any other spaces within or associated with the property that contain Verimark-branded elements. Without limitation, the following categories of interior branding must be addressed:
(a) Lobby signage, logos, and branded artwork. All Verimark logos, brand medallions, framed brand-standard artwork, lobby feature walls, and reception-desk branding elements must be removed or replaced.
(b) Guest-room collateral. All items bearing the Verimark name or logo located within guest rooms must be removed, replaced, or destroyed, including key cards and key-card sleeves, in-room guest directories and compendiums, letterhead and notepads, pens and pencils, laundry bags and laundry slips, "Do Not Disturb" / "Make Up Room" door hangers, toiletry labels and amenity packaging (shampoo, conditioner, body wash, lotion, soap, shower caps, sewing kits, and similar items), television welcome-screen programming, and minibar or snack-service branding.
(c) Branded linens, towels, bathrobes, and amenity packaging. All bed linens, bath towels, hand towels, washcloths, bath mats, pool towels, bathrobes, and slippers bearing embroidered, woven, or printed Verimark marks must be removed from service and replaced with unbranded or independently branded alternatives. Similarly, all branded amenity packaging, gift-shop merchandise, and retail items must be removed from sale and from guest areas.
(d) Restaurant, bar, and food-and-beverage branding. All menus, menu covers, table tents, beverage napkins, coasters, signage, hostess-stand branding, branded serviceware (plates, cups, glassware), and any other food-and-beverage outlet elements bearing Verimark marks must be removed or replaced.
(e) Fitness center, pool area, and meeting-room branding. All signage, towel bins, branded equipment labels, pool rules signs, spa menus, meeting-room name plates, conference-service branding, and event-planning collateral bearing Verimark marks in these areas must be removed or replaced.
(f) Elevator and hallway directional signage. All elevator cab panels, floor-indicator signs, hallway wayfinding signs, floor maps, exit-route placards, and stairwell signs bearing Verimark marks must be removed or replaced with unbranded alternatives.
(g) Branded staff uniforms. All employee uniforms, name badges, aprons, and related apparel bearing the Verimark name, logo, or brand identifiers must be collected and either returned to Verimark or destroyed. Coastal Palms shall provide replacement uniforms that do not reference or imply any Verimark affiliation.
4.4 Removal of Proprietary Technology Systems
Coastal Palms shall promptly disconnect, disable, uninstall, and/or return, as applicable, all Verimark proprietary technology systems and related hardware and software installed at or utilized in connection with the surrendered property. This obligation includes, without limitation, the following:
(a) Verimark Central Reservation System (CRS) connectivity. All data connections, application programming interfaces (APIs), and communication links between the property's reservation systems and the Verimark CRS must be severed. Coastal Palms shall coordinate with Verimark's IT department to ensure an orderly disconnection that does not result in data loss or disruption to Verimark's centralized reservation operations.
(b) Verimark Property Management System (PMS) software modules. Any PMS software modules that are proprietary to Verimark or licensed by Verimark to the property must be uninstalled and all associated license keys deactivated. This does not apply to third-party PMS platforms (e.g., Opera, Maestro, or Mews) that are independently licensed by the property, provided that all Verimark-specific integrations, plug-ins, and data feeds within such platforms are removed.
(c) Verimark loyalty-program enrollment terminals and integration. All Verimark Rewards loyalty-program enrollment kiosks, terminals, card readers, and point-of-sale integrations must be disconnected and, to the extent they constitute Verimark-owned hardware, returned to Verimark.
(d) Verimark-branded Wi-Fi landing pages and guest portal interfaces. All captive-portal splash pages, guest-facing Wi-Fi login screens, and in-room entertainment portal interfaces bearing Verimark branding must be replaced with unbranded or independently branded alternatives.
(e) Revenue-management and rate-optimization tools. Any revenue-management systems, rate-shopping tools, demand-forecasting platforms, or channel-management solutions provided by Verimark or integrated with Verimark's centralized pricing infrastructure must be disconnected.
(f) Real-time POS integration feeds. All point-of-sale system data feeds that transmit transactional information to Verimark's centralized reporting or accounting systems must be terminated.
All proprietary hardware that is owned by Verimark and located at the surrendered property must be identified, inventoried, carefully packaged, and returned to Verimark at the following address within the 120-day De-Identification Period: Verimark Hospitality Group Inc., Attn: Technology Asset Recovery, 2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, FL 33301. All shipping, freight, insurance, and handling costs associated with the return of Verimark-owned hardware shall be borne solely by Coastal Palms.
4.5 Digital and Online De-Identification
Coastal Palms shall ensure the prompt and complete removal of all Verimark branding from all digital and online channels associated with the surrendered property. The digital de-identification obligation includes, without limitation, the following:
(a) Property website(s). All Verimark logos, brand references, brand-standard design elements, hyperlinks to Verimark's corporate website or booking engine, and any other content implying Verimark affiliation must be removed from the property's website(s). If the property's primary website is hosted on a Verimark-controlled domain or subdomain, the property must migrate to an independent domain and hosting platform.
(b) Third-party OTA listings. The property must be delisted from all Verimark group or chain-level listings on online travel agencies (OTAs) including, without limitation, Aldermere Technologies, Bramwell Holdings, Drayton Software, Penmark Industries, Northpoint Corporation, Drayton Corporation, and Greaves Group. If Coastal Palms elects to re-list the property independently on any OTA platform, the listing must not reference, suggest, or imply any current or former Verimark affiliation, and must not use Verimark photographs, descriptions, or marketing content.
(c) Social media accounts. All social media accounts (including Kestrel Services Inc., Northpoint Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., Crowne Albany Partners LLC, and Pinterest) that reference Verimark affiliation must be updated to remove all Verimark branding, or deactivated entirely.
(d) Severin Industries Business and mapping-service listings. All Severin Industries Business Profile listings, Tidewater Industries Maps listings, Ashgrove Industries Places listings, Yelp listings, Kestrel Group listings, and similar directory or mapping-service entries must be updated to remove references to Verimark brand flags and to reflect the property's independent (unbranded) status.
(e) Email addresses. All email addresses using any Verimark-controlled domain (including @verimarksuites.com, @verimarkselect.com, @verimarkhotels.com, and any subdomains thereof) must be deactivated and replaced with email addresses on independently controlled domains.
Special Note Regarding gulfcoastrooms.com: The unbranded website gulfcoastrooms.com, which is operated by Suncoast Room Management Inc., may continue to operate after the Effective Date only if it does not reference, display, or use any Verimark marks, trade dress, logos, design elements, or other brand identifiers, and does not, expressly or by implication, suggest any affiliation between the property and Verimark. Verimark reserves the right to review gulfcoastrooms.com at any time during or after the De-Identification Period and to demand immediate removal of any content that, in Verimark's reasonable judgment, implies or suggests Verimark affiliation.
4.6 Print and Advertising Materials
All printed advertising materials, brochures, business cards, rack cards, promotional flyers, rate sheets, group-sales kits, wedding and event brochures, stationery, envelopes, mailing labels, fax cover sheets, and any other printed or pre-printed materials bearing the Verimark name, logo, or any Verimark marks must be permanently destroyed or defaced such that the Verimark marks are no longer visible or legible. Destruction may be accomplished by shredding, recycling, or other appropriate means; provided, however, that Coastal Palms shall maintain a brief written record of the materials destroyed and the date of destruction for Verimark's inspection.
No future marketing, advertising, promotional, or public-relations materials produced by or on behalf of Coastal Palms, the property-level operating entity, or any successor operator may reference any current or former Verimark affiliation, brand membership, quality rating, or award received in connection with the Verimark brand system, without the express prior written consent of Verimark.
4.7 Proprietary Standards Manuals and Confidential Information
All copies of Verimark's brand-standards manuals, design-standards guides, operating-procedures manuals, quality-assurance checklists, training curricula, employee handbooks containing Verimark proprietary content, franchise operations bulletins, revenue-management playbooks, and any other documents or materials containing Verimark's confidential, proprietary, or trade-secret information (collectively, "Confidential Materials") must be returned to Verimark or certified as destroyed within the De-Identification Period.
This obligation extends to Confidential Materials in any and all formats, including printed hard copies, photocopies, electronic files (including PDF, Word, Excel, and Northgate Services Inc. files), email attachments, files stored on local hard drives, network servers, cloud storage platforms, USB drives, external hard drives, and any other storage media. Coastal Palms shall conduct a diligent and thorough search of all physical and electronic storage locations to identify and collect all Confidential Materials.
Upon completion of the return or destruction of Confidential Materials, an authorized representative of Coastal Palms shall execute the Certification of Completion form attached as part of Exhibit B to this Notice, affirming under penalty of perjury that all Confidential Materials have been returned to Verimark or destroyed, and that no copies have been retained in any format.
SECTION 5: VERIMARK INSPECTION RIGHTS
5.1 Inspection Authorization. Verimark reserves the right to conduct one or more inspections of the surrendered property at any time during the 120-day De-Identification Period and at any time during the twelve (12) months following the De-Identification Deadline to verify Coastal Palms' compliance with the de-identification requirements set forth in this Notice and in the Settlement Agreement. Coastal Palms hereby acknowledges and confirms that Verimark's inspection rights are a material element of the Settlement Agreement and the franchise surrender process.
5.2 Notice of Inspection. Inspections may be conducted upon five (5) business days' prior written notice to Coastal Palms, delivered to the address set forth in the preamble of this Notice or to such other address as Coastal Palms may designate in writing. Notice may be provided via email to Randall Brecker and to the general manager of the surrendered property, with a copy to Nathan Whitfield III. Coastal Palms shall ensure that Verimark's inspection team is granted reasonable access to all areas of the surrendered property, including guest rooms, back-of-house areas, storage rooms, technology closets, and any off-site storage facilities used to house property-related materials.
5.3 Deficiency Notice and Cure Period. If any inspection conducted by Verimark or its designees reveals that de-identification has not been fully completed — whether due to the presence of remaining Verimark signage, branding, technology systems, digital references, printed materials, or Confidential Materials — Verimark shall provide Coastal Palms with a written notice of deficiencies (a "Deficiency Notice") specifying in reasonable detail each area of non-compliance identified during the inspection. Upon receipt of a Deficiency Notice, Coastal Palms shall have fifteen (15) business days to cure all identified deficiencies and to provide written confirmation of cure to Verimark.
5.4 Inspection Costs. Verimark may engage third-party inspectors, brand-compliance consultants, or other professional service providers at its discretion to assist with the inspection process. The costs and expenses of any such inspection, including travel, lodging, and professional fees, shall be borne by Verimark; provided, however, that if the inspection reveals any deficiency in Coastal Palms' de-identification compliance, all costs and expenses of such inspection (and any subsequent re-inspection) shall be borne by Coastal Palms and shall be payable within thirty (30) days of Verimark's written invoice therefor.
SECTION 6: CONSEQUENCES OF NON-COMPLIANCE
Coastal Palms is hereby placed on notice that the failure to comply with the de-identification obligations set forth in this Notice and in the Settlement Agreement may result in significant financial and legal consequences, including, without limitation, the following:
6.1 Ongoing Royalty and Fee Liability
If Coastal Palms fails to complete de-identification of the surrendered property by the De-Identification Deadline of August 20, 2024, Coastal Palms shall remain liable for, and shall promptly pay to Verimark, all royalty payments (calculated at five percent (5%) of GRR), marketing-fund contributions (calculated at two and one-half percent (2.5%) of GRR), and technology fees (calculated at twelve dollars and fifty cents ($12.50) per available room per month) for the surrendered property, as if the FLA remained in full force and effect, for the entire period from the De-Identification Deadline through the date on which de-identification is fully and satisfactorily completed (the "Non-Compliant Period"). Such fees shall be calculated based on the actual gross room revenues generated by the surrendered property during the Non-Compliant Period, and shall be payable monthly within fifteen (15) days after the end of each calendar month, accompanied by the financial reporting required under Section 5.2 of the FLA.
6.2 Trademark Infringement
The continued use of any Verimark marks — including the Verimark name, the Verimark Suites mark, the Verimark Select mark, the Verimark Grand mark, any Verimark logo or design mark, and any Verimark trade dress — beyond the De-Identification Deadline without Verimark's express written authorization shall constitute willful trademark infringement and unfair competition under federal law (15 U.S.C. §§ 1114, 1125(a)), the Florida Deceptive and Unfair Trade Practices Act (Fla. Stat. §§ 501.201 et seq.), and the common law of the State of Florida. In such event, Verimark expressly reserves all rights and remedies available at law and in equity, including, without limitation, the right to seek temporary, preliminary, and permanent injunctive relief, treble damages, statutory damages, disgorgement of profits, and recovery of reasonable attorneys' fees and costs.
6.3 Acceleration Under the Settlement Agreement
Non-compliance with the de-identification obligations set forth in this Notice and in the Settlement Agreement may constitute an "Event of Default" as defined in Section 12.1 of the Settlement Agreement. Upon the occurrence and during the continuance of an Event of Default, Verimark shall have the right, at its election, to accelerate all remaining structured settlement payments owed by Coastal Palms under the Settlement Agreement. As of the date of this Notice, the remaining structured payment obligation consists of eight (8) semi-annual installments of Seven Million Eight Hundred Twelve Thousand Five Hundred Dollars ($7,812,500.00) each, for an aggregate remaining principal balance of Sixty-Two Million Five Hundred Thousand Dollars ($62,500,000.00), together with simple interest accruing at the rate of six and one-half percent (6.5%) per annum on the outstanding principal balance. Upon acceleration, the entire outstanding principal balance, together with all accrued and unpaid interest, shall become immediately due and payable in full, without further notice or demand. The specific acceleration-trigger provisions are set forth in Sections 12.1(c) and 12.2 of the Settlement Agreement.
6.4 Enforcement of Security Interest and Personal Guaranties
In addition to the foregoing remedies, Verimark's rights upon an Event of Default include the right to enforce its first-priority security interest (as granted under Section 9.1 of the Settlement Agreement) in eight (8) unencumbered hotel properties owned by Coastal Palms and its affiliates, which properties have an aggregate appraised value of approximately Seventy-One Million Two Hundred Thousand Dollars ($71,200,000.00) as determined by independent appraisals obtained in connection with the Settlement Agreement. Verimark further reserves the right to enforce the personal guaranties of payment and performance executed by Randall Brecker and Nolan Prescott pursuant to Section 9.3 of the Settlement Agreement, which guaranties are unconditional, absolute, and continuing, and which guaranty the full and timely payment of all amounts owed under the Settlement Agreement.
SECTION 7: OBLIGATIONS SURVIVING FRANCHISE TERMINATION
Coastal Palms acknowledges and agrees that the termination of the FLA with respect to the surrendered property does not terminate or diminish the following obligations, each of which survives franchise termination in accordance with its terms:
(a) Non-Competition. To the extent the FLA contains post-termination non-competition provisions (including the restrictions set forth in Section 17.1 of the FLA regarding the operation of a competing hotel within a specified radius of the surrendered property for a specified period following termination), such provisions survive termination and remain in full force and effect in accordance with their stated terms, subject to applicable law.
(b) Confidentiality. The confidentiality obligations set forth in Section 16 of the FLA and in Section 14 of the Settlement Agreement remain in full force and effect following franchise termination and are perpetual in duration. Coastal Palms, the property-level operating entity, and their respective officers, members, managers, employees, and agents shall not disclose, use, or permit the disclosure or use of any Verimark Confidential Information (as defined in the FLA) at any time following the Effective Date.
(c) Non-Disparagement. The mutual non-disparagement clause set forth in Section 15.4 of the Settlement Agreement applies to all Settling Parties and remains in full force and effect for a period of three (3) years from the Effective Date of the Settlement Agreement (i.e., through April 22, 2027). During such period, neither Coastal Palms nor any of its affiliates, members, managers, or agents shall make any public or private statements that disparage, defame, or cast in a negative light Verimark, its brands, its officers, directors, or employees, and Verimark shall not make any such statements regarding Coastal Palms, its members, or its affiliated entities.
(d) Indemnification. Coastal Palms' indemnification obligations under Section 18 of the FLA with respect to claims, losses, damages, liabilities, costs, and expenses arising out of or relating to the operation of the surrendered property during the franchise term (i.e., pre-termination liabilities) survive termination in accordance with the FLA and shall not be affected by the franchise surrender.
(e) Cooperation with Claims and Litigation. Coastal Palms shall cooperate fully with Verimark in connection with any pending or future guest claims, personal-injury claims, premises-liability claims, employment claims, regulatory inquiries, or other litigation or administrative proceedings arising from or relating to the operation of the surrendered property during the franchise term, including by providing access to records, making witnesses available for depositions and trial testimony, and assisting with the defense or prosecution of any such matters.
SECTION 8: CONTACT INFORMATION FOR DE-IDENTIFICATION COORDINATION
All communications, questions, reports, and submissions regarding the de-identification process for the surrendered property should be directed to:
Operational Contact:
Deidre Langston Senior Vice President, Franchise Operations Verimark Hospitality Group Inc. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, FL 33301 Telephone: (954) 555-7218
Email: dlangston@verimarkhotels.com
All legal inquiries, disputes, or formal correspondence regarding this Notice, the de-identification requirements, or the interpretation or enforcement of the Settlement Agreement should be directed to:
Legal Contact:
Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Florida Bar No. 0087451 Telephone: (954) 555-3400
Email: panand@calderwoodharkness.com
Coastal Palms is encouraged to designate a single point of contact for de-identification coordination at the property level and to communicate such designation in writing to Ms. Langston within ten (10) business days of receipt of this Notice.
SECTION 9: RESERVATION OF RIGHTS
This Notice does not constitute, and shall not be construed as, a waiver, modification, or limitation of any of Verimark's rights, remedies, claims, or defenses under the Settlement Agreement, the FLA, any ancillary agreement, or applicable federal, state, or local law. Verimark expressly reserves all rights and remedies available to it under the Settlement Agreement executed April 22, 2024, including, without limitation, the enforcement rights set forth in Sections 9, 10, 11, and 12 thereof.
The mutual release set forth in Section 6 of the Settlement Agreement applies to claims arising through the Effective Date, as specified therein, but does not release, discharge, or otherwise affect any party's obligations arising under the Settlement Agreement itself, including the structured payment obligations, the security interest, the personal guaranties, the de-identification obligations, or any other covenants, representations, or warranties contained in the Settlement Agreement.
Capitalized terms used but not otherwise defined in this Notice shall have the meanings ascribed to them in the Settlement Agreement or, to the extent not defined therein, in the applicable FLA.
SECTION 10: GOVERNING LAW AND VENUE
This Notice and the obligations described herein shall be governed by, construed in accordance with, and enforced under the laws of the State of Florida, without regard to its conflict-of-laws principles. Consistent with the mandatory venue provision set forth in Section 22.1 of the FLA and Section 17.2 of the Settlement Agreement, any dispute, claim, or proceeding arising out of or relating to this Notice, the de-identification obligations, or the franchise surrender shall be brought exclusively in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, or, if federal subject-matter jurisdiction exists, in the United States District Court for the Southern District of Florida, Fort Lauderdale Division. Each party irrevocably waives any objection to such venue, including any objection based on inconvenient forum.
This Notice is effective as of the date first set forth above. Please govern yourself accordingly.
Very truly yours,
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Renata Solis-Vega
Title: Senior Vice President & General Counsel
Date: April 25, 2024
cc (via email and first-class mail):
Priya Anand, Esq., Calderwood & Harkness LLP Douglas Carmichael, Esq., Calderwood & Harkness LLP Yuki Nakamura, Esq., Calderwood & Harkness LLP Nathan Whitfield III, Esq., Whitfield, Barrow & Crane LLP Deidre Langston, SVP, Franchise Operations, Verimark Hospitality Group Inc. Martin Holcomb, EVP & CFO, Verimark Hospitality Group Inc.
EXHIBIT A
PROPERTY-SPECIFIC INFORMATION
(To Be Attached to Each Individual Surrender Notice)
The following property-specific information is extracted from Exhibit B to the Settlement Agreement and Mutual Release dated April 22, 2024, and pertains to the property that is the subject of the accompanying Notice of Franchise Surrender.
Note to drafter: Complete all fields above using information from the executed Exhibit B to the Settlement Agreement. Verify all details against the original FLA and any amendments. If the property has any unique de-identification considerations (e.g., shared signage with a co-located facility, shared parking structure with another Verimark-branded property that is not being surrendered, or third-party sign leases), describe those considerations in the final row and address them in coordination with Deidre Langston and Verimark's outside counsel.
EXHIBIT B
DE-IDENTIFICATION CHECKLIST
(To Be Completed at the Property Level and Submitted Upon Completion)
Property Name: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Property Address: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
De-Identification Deadline: August 20, 2024
Part 1: Exterior Signage Removal
Part 2: Interior Branding Removal
Part 3: Technology Systems disconnection / Return
Part 4: Digital Channel De-Listing
Part 5: Print Material Destruction
Part 6: Confidential Materials Return
Certification of Completion
I, the undersigned, am an authorized representative of Coastal Palms Franchise Holdings LLC and/or the property-level operating entity identified in Exhibit A. I hereby certify that, as of the date set forth below, all de-identification tasks listed in this Exhibit B have been completed in their entirety with respect to the property identified in Exhibit A. I further certify that all Verimark Confidential Materials have been returned to Verimark or destroyed, and that no copies have been retained in any format — paper, electronic, or otherwise.
I understand that this certification is being relied upon by Verimark Hospitality Group Inc. and that any material misstatement or omission herein may constitute a breach of the Settlement Agreement and Mutual Release dated April 22, 2024.
COASTAL PALMS FRANCHISE HOLDINGS LLC
By: ________
Name: ________
Title: ________
Date: ________
[PROPERTY-LEVEL OPERATING ENTITY NAME]
By: ________
Name: ________
Title: ________
Date: ________
Submit completed and signed Certification of Completion to:
Deidre Langston, SVP, Franchise Operations Verimark Hospitality Group Inc. 2400 East Las Olas Boulevard, Suite 3100 Fort Lauderdale, FL 33301
Email: dlangston@verimarkhotels.com
With a copy to:
Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301
Email: panand@calderwoodharkness.com
Deadline for Submission: No later than August 20, 2024.
Field | Information
Property Name | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property Street Address | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
City, State, ZIP Code | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Execution Date | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Brand Flag | [Verimark Suites / Verimark Select — specify as applicable]
Number of Guest Rooms | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Level Operating Entity | [e.g., Gulf Breeze Hospitality LLC / Savannah Lodging Partners LLC]
Field | Information
Full Legal Name of Property | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property Street Address | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
City, State, ZIP Code | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
County | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Applicable FLA Execution Date | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
FLA Amendment(s) (if any) | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Brand Flag | [Verimark Suites / Verimark Select]
Number of Guest Rooms | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Level Operating Entity | [e.g., Gulf Breeze Hospitality LLC / Savannah Lodging Partners LLC]
State of Formation of Operating Entity | [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]
Property-Specific De-Identification Considerations | [e.g., shared monument sign with adjacent retail; co-located fitness facility with non-surrendered property; shared parking structure signage — describe as applicable, or state "None"]
Item No. | Task | Date Completed | Initials
1.1 | Monument sign(s) — all Verimark branding removed | \\\\\\\\\\ | \\\\\_
1.2 | Building-mounted channel letters / Illuminated signs removed | \\\\\\\\\\ | \\\\\_
1.3 | Directional / wayfinding signs — all Verimark references removed | \\\\\\\\\\ | \\\\\_
1.4 | Highway / roadway signs — all Verimark references removed or permits cancelled | \\\\\\\\\\ | \\\\\_
1.5 | Flagpole banners and flags removed | \\\\\\\\\\ | \\\\\_
1.6 | Window decals and door signage removed | \\\\\\\\\\ | \\\\\_
1.7 | Vehicle wraps / decals removed from all property vehicles | \\\\\\\\\\ | \\\\\_
1.8 | Exterior surfaces repaired and cleaned following sign removal | \\\\\\\\\\ | \\\\\_
Item No. | Task | Date Completed | Initials
2.1 | Lobby — all Verimark signage, logos, and branded artwork removed | \\\\\\\\\\ | \\\\\_
2.2 | Front desk / reception area — all Verimark branding removed | \\\\\\\\\\ | \\\\\_
2.3 | Guest rooms — key cards, sleeves, and card readers de-branded | \\\\\\\\\\ | \\\\\_
2.4 | Guest rooms — in-room directories and compendiums removed/replaced | \\\\\\\\\\ | \\\\\_
2.5 | Guest rooms — stationery, pens, notepads, laundry bags removed | \\\\\\\\\\ | \\\\\_
2.6 | Guest rooms — toiletry labels and amenity packaging replaced | \\\\\\\\\\ | \\\\\_
2.7 | Guest rooms — branded linens, towels, bathrobes removed from service | \\\\\\\\\\ | \\\\\_
2.8 | Guest rooms — television welcome screens and in-room entertainment de-branded | \\\\\\\\\\ | \\\\\_
2.9 | Guest rooms — door hangers (DND/MUR) replaced | \\\\\\\\\\ | \\\\\_
2.10 | Food & Beverage outlets — menus, table tents, napkins, serviceware de-branded | \\\\\\\\\\ | \\\\\_
2.11 | Fitness center — all Verimark branding removed | \\\\\\\\\\ | \\\\\_
2.12 | Pool area and spa — all Verimark branding removed | \\\\\\\\\\ | \\\\\_
2.13 | Meeting rooms and business center — all Verimark branding removed | \\\\\\\\\\ | \\\\\_
2.14 | Elevators, hallways, and stairwells — all Verimark signage removed | \\\\\\\\\\ | \\\\\_
2.15 | Back-of-house areas — all Verimark posters, notices, and signage removed | \\\\\\\\\\ | \\\\\_
2.16 | Staff uniforms and name badges — all Verimark-branded items collected and destroyed/returned | \\\\\\\\\\ | \\\\\_
2.17 | Gift shop / retail — all Verimark-branded merchandise removed from sale | \\\\\\\\\\ | \\\\\_
Item No. | Task | Date Completed | Initials
3.1 | CRS connectivity severed | \\\\\\\\\\ | \\\\\_
3.2 | Verimark PMS software modules uninstalled / license keys deactivated | \\\\\\\\\\ | \\\\\_
3.3 | Loyalty-program terminals disconnected and returned (if Verimark-owned) | \\\\\\\\\\ | \\\\\_
3.4 | Wi-Fi captive portal / guest portal de-branded | \\\\\\\\\\ | \\\\\_
3.5 | Revenue-management and rate-optimization tools disconnected | \\\\\\\\\\ | \\\\\_
3.6 | POS integration data feeds to Verimark terminated | \\\\\\\\\\ | \\\\\_
3.7 | All Verimark-owned hardware inventoried, packaged, and shipped | \\\\\\\\\\ | \\\\\_
3.8 | Shipping tracking number(s) provided to Verimark IT department | \\\\\\\\\\ | \\\\\_
Item No. | Task | Date Completed | Initials
4.1 | Property website — all Verimark branding and links removed | \\\\\\\\\\ | \\\\\_
4.2 | OTA listings — property delisted from Verimark group listings | \\\\\\\\\\ | \\\\\_
4.3 | Social media accounts — Verimark references removed or accounts deactivated | \\\\\\\\\\ | \\\\\_
4.4 | Severin Industries Business / mapping services — Verimark brand references removed | \\\\\\\\\\ | \\\\\_
4.5 | Email addresses on Verimark domains deactivated | \\\\\\\\\\ | \\\\\_
4.6 | Kestrel Group listing — Verimark chain affiliation removed | \\\\\\\\\\ | \\\\\_
Item No. | Task | Date Completed | Initials
5.1 | Brochures and rack cards — destroyed | \\\\\\\\\\ | \\\\\_
5.2 | Business cards — destroyed | \\\\\\\\\\ | \\\\\_
5.3 | Stationery, envelopes, and letterhead — destroyed | \\\\\\\\\\ | \\\\\_
5.4 | Promotional and advertising materials — destroyed | \\\\\\\\\\ | \\\\\_
5.5 | Group-sales kits and event materials — destroyed | \\\\\\\\\\ | \\\\\_
5.6 | Written record of destroyed materials maintained | \\\\\\\\\\ | \\\\\_
Item No. | Task | Date Completed | Initials
6.1 | Brand-standards manuals (all editions) — returned or certified destroyed | \\\\\\\\\\ | \\\\\_
6.2 | Operating-procedures manuals — returned or certified destroyed | \\\\\\\\\\ | \\\\\_
6.3 | Training curricula and materials — returned or certified destroyed | \\\\\\\\\\ | \\\\\_
6.4 | Quality-assurance checklists — returned or certified destroyed | \\\\\\\\\\ | \\\\\_
6.5 | Revenue-management playbooks — returned or certified destroyed | \\\\\\\\\\ | \\\\\_
6.6 | Electronic copies — deleted from all devices, servers, and cloud storage | \\\\\\\\\\ | \\\\\_
6.7 | Search of all physical and electronic storage locations completed | \\\\\\\\\\ | \\\\\_

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL

SECTION 1: PURPOSE AND AUTHORITY

SECTION 2: IDENTIFICATION OF SURRENDERED PROPERTY

SECTION 3: EFFECTIVE DATE OF FRANCHISE TERMINATION

SECTION 4: DE-IDENTIFICATION REQUIREMENTS

SECTION 5: VERIMARK INSPECTION RIGHTS

SECTION 6: CONSEQUENCES OF NON-COMPLIANCE

SECTION 7: OBLIGATIONS SURVIVING FRANCHISE TERMINATION

SECTION 8: CONTACT INFORMATION FOR DE-IDENTIFICATION COORDINATION

SECTION 9: RESERVATION OF RIGHTS

SECTION 10: GOVERNING LAW AND VENUE

VERIMARK HOSPITALITY GROUP INC.

EXHIBIT A

PROPERTY-SPECIFIC INFORMATION

EXHIBIT B

DE-IDENTIFICATION CHECKLIST

COASTAL PALMS FRANCHISE HOLDINGS LLC

Record

Parties

Dates

Amounts