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COOPERATION AGREEMENT

VERIMARK HOSPITALITY GROUP INC.

and

RYAN MATEO SERRANO

Dated as of November 15, 2023

COOPERATION AGREEMENT

This Cooperation Agreement (this "Agreement") is entered into as of November 15, 2023 (the "Effective Date"), by and between Verimark Hospitality Group Inc., a Delaware corporation, with its principal executive offices located at 4100 Bayshore Boulevard, Suite 1200, Tampa, Florida 33611 ("VHG" or the "Company"), whose common stock is listed and publicly traded on the Nasdaq Stock Market under the ticker symbol VMRK, and Ryan Mateo Serrano, an individual residing in the State of Florida ("Serrano" or the "Cooperating Party"). VHG and Serrano are each referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. Background of the Company and the Division. VHG is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices in Tampa, Florida. VHG's shares of common stock are listed and traded on the Nasdaq Stock Market under the ticker symbol VMRK. VHG is engaged in the business of hospitality management, commercial and resort real estate development, timeshare-interest sales and marketing, and hotel and resort management across multiple properties in the southeastern United States and the Caribbean. Verimark Coastal Resorts LLC ("VCR") is a Florida limited liability company and a wholly owned subsidiary of VHG, with its principal office located at 7820 Gulf Breeze Parkway, Suite 400, Destin, Florida 32541. VCR operates and manages resort and timeshare properties along the Gulf Coast of Florida. Serrano has been employed by VCR as Division Controller since approximately 2018, making him a five-year veteran of the VHG family of companies. In that capacity, Serrano has had responsibility for financial reporting, expense management, accounts payable, vendor management, and revenue-recognition processes at VCR and its managed properties.

B. The Investigation. On or about July 24, 2023, the Audit Committee of the Board of Directors of VHG (the "Audit Committee"), comprised of independent directors Diane Kowalski (Chair), Reginald Faulkner, and Sandra Yeung, commenced an independent internal investigation (the "Investigation") into certain expense-reporting irregularities and revenue-recognition practices at VCR. In connection with the Investigation, the Audit Committee retained Calderwood & Harkness LLP ("C&H"), a nationally recognized law firm with offices at 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131, as independent investigation counsel. C&H, in turn, retained Crestline Forensic Advisory LLC ("Crestline") as a forensic accounting advisor under the Kovel doctrine, to assist Investigation Counsel in the forensic analysis of financial records, transactional data, and accounting entries relevant to the Investigation. The Investigation concerns, among other things: (i) the premature recognition of revenue from timeshare-interest deposit sales at VCR properties, including Coral Dune Resort & Residences, located at 14200 Emerald Coast Parkway, Destin, Florida 32541, and Palmetto Bluff Club, located at 3950 Longboat Key Drive, Sarasota, Florida 34228; and (ii) expense-reimbursement irregularities involving fictitious vendor invoices and purchase orders directed to certain entities that appear to have been created for the purpose of diverting Company funds.

C. Serrano's Status. Serrano was placed on paid administrative leave effective August 7, 2023, pending the outcome of the Investigation. Serrano was subsequently interviewed by C&H on September 27, 2023, with his independent counsel, Marco A. Ruiz of Coletti & Ruiz PA, present. During that interview and in subsequent communications through counsel, Serrano expressed his willingness to cooperate fully and truthfully with the Investigation and any related governmental inquiries. Serrano acknowledges his involvement in certain conduct under investigation, including but not limited to the creation and processing of fictitious purchase orders attributed to purported vendors, as described in greater detail herein.

D. Purpose. The Parties desire to set forth the terms and conditions of Serrano's cooperation with the Investigation and any Related Proceedings (as defined below), and to address the terms of Serrano's separation from employment with VCR and VHG, in consideration of the mutual promises, covenants, and agreements set forth herein.

E. Counsel. Serrano is represented in connection with the negotiation and execution of this Agreement by Marco A. Ruiz of Coletti & Ruiz PA, Tampa, Florida. VHG is represented in connection with this Agreement by Calderwood & Harkness LLP, 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131 (Howard Quinn, Responsible Partner; matter number 1021-00008), acting at the direction of and under the authority of the Audit Committee. Patricia Navarro, General Counsel of VHG, is authorized to execute this Agreement on behalf of VHG, with the approval and at the direction of the Audit Committee.

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

ARTICLE I — DEFINITIONS

Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement.

(a) "Agreement" means this Cooperation Agreement, including all recitals and exhibits hereto, as may be amended or modified from time to time in accordance with Section 10.2.

(b) "Audit Committee" means the Audit Committee of the Board of Directors of VHG, as constituted from time to time. As of the Effective Date, the Audit Committee is comprised of Diane Kowalski (Chair), Reginald Faulkner, and Sandra Yeung, each of whom is an independent director within the meaning of Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3 under the Securities Exchange Act of 1934, as amended.

(c) "Company" means Verimark Hospitality Group Inc., a Delaware corporation, together with its subsidiaries and affiliates, including without limitation Verimark Coastal Resorts LLC.

(d) "Cooperation Period" means the period commencing on the Effective Date and continuing through the later of (i) the date on which the Investigation is formally closed by action of the Audit Committee, or (ii) the conclusion of any and all Related Proceedings, including the exhaustion or expiration of all applicable appeal periods.

(e) "Crestline" means Crestline Forensic Advisory LLC, the forensic accounting advisory firm retained by C&H under the Kovel doctrine to assist Investigation Counsel in connection with the Investigation.

(f) "Effective Date" means November 15, 2023.

(g) "Government Authority" means any federal, state, or local governmental authority, department, agency, commission, bureau, regulatory body, or self-regulatory organization, including but not limited to the United States Securities and Exchange Commission (the "SEC"), including the Division of Enforcement thereof, the United States Department of Justice (the "DOJ"), the Internal Revenue Service (the "IRS"), the Financial Industry Regulatory Authority ("FINRA"), and any state attorney general or state securities regulator.

(h) "Investigation" means the independent internal investigation commenced by the Audit Committee on or about July 24, 2023, as described in Recital B, and any continuation, extension, expansion, or reopening thereof.

(i) "Investigation Counsel" means Calderwood & Harkness LLP, acting in its capacity as independent investigation counsel retained by and reporting to the Audit Committee in connection with the Investigation.

(j) "Related Proceedings" means any governmental investigation, regulatory examination, regulatory proceeding, enforcement action, civil action, arbitration, or other legal proceeding arising out of or relating to the subject matter of the Investigation, including without limitation SEC preliminary inquiry File No. HO-14237, and any proceedings that may be commenced by the DOJ, the IRS, or any other Government Authority.

(k) "C&H" means Calderwood & Harkness LLP, 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131.

(l) "Separation" has the meaning ascribed to such term in Section 3.1.

(m) "Serrano's Counsel" means Marco A. Ruiz of Coletti & Ruiz PA, Tampa, Florida, or such other counsel as Serrano may designate in writing to VHG from time to time.

(n) "Shell Entities" means, collectively, (i) Gulf Standard Contracting LLC, a Florida limited liability company, (ii) Clearwater Design Collective Inc., a Florida corporation, and (iii) Suncoast Property Services LLC, a Florida limited liability company, each of which was identified during the Investigation as a purported vendor of VCR that received payments based on fictitious purchase orders and vendor invoices.

(o) "Subjects" means Garrett W. Daskine, Vice President of Resort Operations at VCR, and Nicole Prescott, Senior Director of Procurement at VCR, and any other individuals who may become subjects or targets of the Investigation or any Related Proceedings, as designated from time to time by the Audit Committee or Investigation Counsel.

(p) "VCR" means Verimark Coastal Resorts LLC, a Florida limited liability company and wholly owned subsidiary of VHG.

ARTICLE II — COOPERATION OBLIGATIONS

Section 2.1 — General Cooperation Obligation. Serrano agrees to cooperate fully, truthfully, completely, and promptly with the Company, Investigation Counsel, Crestline, and the Audit Committee in connection with the Investigation and any Related Proceedings. Such cooperation shall be provided without the necessity of a subpoena or other compulsory process, and Serrano shall use his best efforts to make himself available at reasonable times and places as requested by Investigation Counsel. Serrano's cooperation obligation shall encompass all matters relating to the subject matter of the Investigation, including but not limited to: (i) the premature recognition of timeshare-interest deposit revenue at VCR, including at Coral Dune Resort & Residences and Palmetto Bluff Club; (ii) the creation, approval, processing, and payment of fictitious purchase orders and vendor invoices; (iii) the formation, ownership structure, operations, bank accounts, and fund flows involving the Shell Entities—specifically, Gulf Standard Contracting LLC, Clearwater Design Collective Inc., and Suncoast Property Services LLC; and (iv) the conduct, knowledge, involvement, and communications of Garrett W. Daskine, Nicole Prescott, and any other persons involved in or with knowledge of the matters under investigation. Serrano acknowledges that his cooperation is a material inducement for VHG to enter into this Agreement and to provide the consideration described herein.

Section 2.2 — Truthful Testimony and Statements. Serrano shall provide complete, truthful, and accurate information in all interviews, testimony, depositions, declarations, affidavits, and communications with Investigation Counsel, Crestline, the Audit Committee, and any Government Authority. Serrano shall not knowingly make any false, misleading, or materially incomplete statement of fact in connection with the Investigation or any Related Proceedings, whether in written or oral form. In the event that Serrano becomes aware, at any time, that any prior statement he has made in connection with the Investigation or any Related Proceedings was inaccurate, incomplete, or misleading in any material respect, Serrano shall promptly notify Investigation Counsel and Serrano's Counsel of such inaccuracy, incompleteness, or misleading nature, and shall take all reasonable steps to correct such prior statement. This obligation extends to any testimony Serrano may be called upon to provide before the SEC, including in connection with preliminary inquiry File No. HO-14237, the DOJ, or any other Government Authority.

Section 2.3 — Interviews. Serrano shall make himself available for additional interviews by Investigation Counsel, and by Crestline at the direction of Investigation Counsel, at reasonable times and locations upon reasonable advance notice, which shall generally be not less than five (5) business days. Serrano acknowledges that his first interview in connection with the Investigation occurred on September 27, 2023, at the offices of C&H in Miami, Florida, and that his counsel, Marco A. Ruiz, was present during that interview. Serrano shall participate in follow-up interviews as reasonably requested by Investigation Counsel. The Parties acknowledge that a second interview has been scheduled for December 5, 2023. Serrano's Counsel, Marco A. Ruiz, or his designee from the firm of Coletti & Ruiz PA, shall be permitted to attend all interviews conducted pursuant to this Agreement. Serrano acknowledges and understands that Upjohn warnings were administered during his prior interview on September 27, 2023, and that the attorney-client privilege with respect to the Investigation belongs to VHG and not to Serrano individually. Serrano further acknowledges and understands that VHG, through the Audit Committee, retains the sole authority to assert or waive the attorney-client privilege with respect to communications arising out of the Investigation, and that Serrano has no individual privilege in such communications.

Section 2.4 — Document Production. Serrano shall promptly produce to Investigation Counsel all documents, records, electronically stored information ("ESI"), and tangible things in his possession, custody, or control that are requested by Investigation Counsel and that relate to the subject matter of the Investigation. This obligation includes, without limitation, the production of documents and information relating to:

(a) the forty-seven (47) fictitious purchase orders attributed to Gulf Standard Contracting LLC, Clearwater Design Collective Inc., and Suncoast Property Services LLC, including all drafts, supporting documentation, approvals, and related communications;

(b) the formation, organization, registration, and operation of each of the Shell Entities, including articles of organization, operating agreements, corporate resolutions, registered agent designations, and annual reports;

(c) bank account records, wire transfer records, ACH transaction records, payment records, cancelled checks, and deposit records for accounts held by or for the benefit of the Shell Entities, including but not limited to any accounts at Coastal Commerce Bank, Sundial National Bank, or any other financial institution;

(d) all communications, whether by email, text message, messaging application, telephone, or other means, between Serrano and Garrett W. Daskine and between Serrano and Nicole Prescott, or any agent or representative of either, regarding the matters under investigation, including communications regarding the creation of purchase orders, the approval of vendor invoices, the disbursement of funds, and the disposition of proceeds;

(e) VCR revenue-recognition practices for timeshare-interest sales, including any memoranda, spreadsheets, journal entries, accounting work papers, or communications relating to the timing of revenue recognition for deposit receipts at Coral Dune Resort & Residences and Palmetto Bluff Club; and

(f) any other documents or information reasonably requested by Investigation Counsel.

Serrano shall not destroy, conceal, alter, mutilate, or tamper with any documents, records, ESI, or tangible things that are or may be relevant to the Investigation, and shall take all reasonable steps to preserve such materials. Serrano represents that he has implemented a litigation hold with respect to all such materials as of the date of his administrative leave.

Section 2.5 — Cooperation with Government Authorities. If requested by the Company or Investigation Counsel, or if compelled by lawful subpoena, court order, or other legal process, Serrano shall cooperate with any Government Authority investigating matters related to the subject matter of the Investigation, including the SEC Division of Enforcement in connection with preliminary inquiry File No. HO-14237 and any formal investigation or enforcement proceeding that may arise therefrom. The Company and Serrano shall consult with each other, through their respective counsel, in advance of any voluntary communications with Government Authorities to the extent permitted by law and not otherwise prohibited by such Government Authority. Serrano shall promptly notify Investigation Counsel if he receives any subpoena, document request, interrogatory, civil investigative demand, or other compulsory process from any Government Authority relating to the matters under investigation. Nothing in this Agreement shall be construed to require Serrano to waive his rights under the Fifth Amendment to the United States Constitution, or any other constitutional, statutory, or common-law privilege, in connection with any interview, testimony, or proceeding before any Government Authority.

Section 2.6 — No Contact with Subjects. During the Cooperation Period, Serrano shall not, directly or indirectly, communicate with Garrett W. Daskine, Nicole Prescott, or their respective counsel—Merritt & Dunleavy LLP (representing Daskine) and Langford Pace LLP (representing Prescott)—or any agent, representative, or family member of either Subject, regarding the subject matter of the Investigation, the existence or terms of this Agreement, or any Related Proceedings, without the prior written consent of Investigation Counsel. This restriction shall not apply to communications compelled by lawful process of a court or Government Authority, provided that Serrano shall provide prompt written notice to Investigation Counsel of any such compelled communication.

Section 2.7 — Confidentiality of Cooperation. Serrano shall maintain the confidentiality of the Investigation, including the substance of his interviews and any documents produced, and of his cooperation under this Agreement. Serrano shall not disclose the existence or terms of this Agreement, or any information learned in the course of his cooperation, except:

(a) to Serrano's Counsel, Marco A. Ruiz, and attorneys and staff of Coletti & Ruiz PA with a need to know;

(b) to Serrano's immediate family members on a need-to-know basis, provided that Serrano shall inform such family members of the confidentiality obligations hereunder and shall be responsible for any breach by such family members;

(c) as required by applicable law, regulation, or legal process, including any subpoena or court order, provided that Serrano shall provide prompt written notice to Investigation Counsel in advance of any such disclosure to the extent legally permissible; or

(d) as authorized in writing by Investigation Counsel.

Serrano acknowledges that public disclosure of certain aspects of the Investigation may be required by VHG's obligations under the Securities Exchange Act of 1934, the Securities Act of 1933, and applicable SEC rules and regulations, including but not limited to disclosure in VHG's periodic reports on Forms 10-K, 10-Q, and 8-K, and that such disclosures by VHG do not constitute a breach of this provision by VHG.

ARTICLE III — EMPLOYMENT TERMINATION

Section 3.1 — Termination of Employment. VHG shall terminate Serrano's employment with VCR on a non-cause basis (the "Separation"), effective on a date to be determined by the Company in its sole discretion, which date shall be no later than December 31, 2023 (the "Separation Date"). The Company shall provide Serrano with written notice of the Separation Date at least five (5) business days in advance thereof. The characterization of Serrano's termination as "non-cause" is expressly conditioned upon Serrano's continued full, truthful, and complete cooperation in accordance with this Agreement. Serrano acknowledges and agrees that, notwithstanding the non-cause characterization of his Separation, he engaged in conduct during his employment at VCR that may have constituted grounds for termination for cause under VCR's employment policies and applicable law, including but not limited to the creation and processing of fictitious purchase orders and the diversion of Company funds to the Shell Entities.

Section 3.2 — Separation Benefits. Subject to (i) Serrano's execution and non-revocation of the General Release set forth in Article V, (ii) Serrano's continued compliance with the terms of this Agreement, including his cooperation obligations under Article II, and (iii) the occurrence of the Separation Date, VHG shall provide Serrano with the following separation benefits:

(a) Salary Continuation. Continuation of Serrano's base salary as in effect immediately prior to his placement on administrative leave, for a period of six (6) months following the Separation Date. Such salary continuation shall be payable in accordance with VHG's normal payroll practices and schedule, subject to applicable tax withholdings and deductions, and shall commence on the first regular payroll date following the Separation Date (or, if applicable, following the expiration of the ADEA revocation period described in Section 5.3).

(b) Health Insurance Continuation. Continuation of Serrano's health insurance benefits (medical, dental, and vision) under VHG's group health plan at active-employee rates for a period of six (6) months following the Separation Date, subject to Serrano's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"). VHG shall subsidize the difference between the COBRA premium and the active-employee contribution rate for the applicable coverage during such six (6) month period. Following the expiration of the six (6) month subsidy period, Serrano shall be solely responsible for the full cost of any continued COBRA coverage for the remainder of the applicable COBRA continuation period.

(c) Unemployment Insurance. VHG shall not contest Serrano's application for unemployment insurance benefits with the Florida Department of Economic Opportunity or any successor agency, if any such application is filed by Serrano.

Serrano acknowledges and agrees that the separation benefits described in this Section 3.2 exceed any compensation or benefits to which he would otherwise be entitled upon termination of his employment, whether under his offer letter, VCR's employee handbook, VHG's severance policies (if any), or applicable law, and that such separation benefits constitute adequate and sufficient consideration for Serrano's execution of this Agreement, including the releases, covenants, and representations contained herein.

Section 3.3 — No Additional Compensation. Except as expressly provided in Section 3.2 of this Agreement, Serrano shall not be entitled to receive, and hereby waives any claim to, any further compensation, severance pay, bonus (including any annual or quarterly incentive bonus), commission, equity award (including stock options, restricted stock units, or other equity-based compensation), vacation pay (other than accrued and unused vacation pay to the extent required by applicable law), or other benefit from VHG, VCR, or any of their affiliates, whether arising under any employment agreement, plan, program, policy, or arrangement. Serrano acknowledges that any unvested equity awards, if applicable, including without limitation any unvested restricted stock units granted under the VHG 2021 Equity Incentive Plan, are automatically forfeited as of the Separation Date in accordance with the terms of the applicable award agreement and the VHG 2021 Equity Incentive Plan.

Section 3.4 — Return of Company Property. Within five (5) business days following the Separation Date, Serrano shall return to the Company all Company property in his possession, custody, or control, including but not limited to laptop computers, tablet devices, mobile phones, access badges, identification cards, keys, key fobs, credit cards, files, documents (whether in paper or electronic format), electronically stored information, proprietary data, and any other tangible or intangible property belonging to VHG or VCR. The return of Company property shall be coordinated through Investigation Counsel to ensure the proper chain of custody and preservation of documents and materials that may constitute relevant evidence in connection with the Investigation or any Related Proceedings. Serrano shall not retain any copies, duplicates, reproductions, or excerpts of Company documents or information, except as may be expressly authorized in writing by Investigation Counsel.

Section 3.5 — Clawback Reservation. Notwithstanding the non-cause characterization of the Separation or any other provision of this Agreement, VHG expressly reserves all rights under any applicable clawback policy, including without limitation the VHG Executive Compensation Clawback Policy adopted in compliance with Section 10D of the Securities Exchange Act of 1934, SEC Rule 10D-1, and Nasdaq Listing Rule 5608, to recover incentive-based compensation previously paid or awarded to Serrano to the extent required by applicable law, SEC rules, or Nasdaq listing standards, including in the event of a financial restatement. Nothing in this Agreement shall be construed as a waiver of, or limitation on, VHG's rights under any such clawback policy or applicable law.

ARTICLE IV — COMPANY OBLIGATIONS

Section 4.1 — Non-Cause Characterization. VHG agrees that, so long as Serrano is in material compliance with the terms and conditions of this Agreement, VHG shall characterize and treat Serrano's Separation as a non-cause termination for all purposes, including in any communications with third parties, responses to background inquiries, and employment references. In the event VHG receives a reference inquiry regarding Serrano, VHG shall confirm only Serrano's dates of employment, job title, and the non-cause nature of his Separation, unless otherwise required by law or authorized in writing by Serrano.

Section 4.2 — Reasonable Cooperation by VHG. VHG shall, through Investigation Counsel, provide Serrano and Serrano's Counsel with reasonable advance notice of interview requests, reasonable scheduling accommodations to minimize disruption to Serrano's personal and professional affairs, and reasonable access to relevant documents in the Company's possession, custody, or control that Serrano may reasonably need to review in order to prepare for interviews, testimony, or other cooperation activities under this Agreement. VHG shall not unreasonably refuse or delay requests by Serrano's Counsel for access to documents or information necessary for Serrano's preparation. The Company's obligations under this Section 4.2 shall be subject to the attorney-client privilege, work-product doctrine, and any other applicable privileges or protections, as determined by Investigation Counsel in its reasonable discretion.

Section 4.3 — Indemnification and Advancement. To the extent provided by VHG's Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, and applicable law, including Section 145 of the Delaware General Corporation Law, Serrano shall be entitled to advancement of reasonable legal fees and expenses incurred by Serrano in connection with Related Proceedings, subject to the execution by Serrano of an undertaking to repay such amounts if it is ultimately determined, by final adjudication or otherwise, that Serrano is not entitled to indemnification under VHG's governing documents or applicable law. Nothing in this Agreement shall be construed to expand, limit, or modify Serrano's indemnification or advancement rights beyond those provided by VHG's governing documents and applicable Delaware law as in effect from time to time.

Serrano acknowledges that VHG maintains directors and officers liability insurance with North Atlantic Indemnity Corp. (Policy No. NAI-DOL-2023-004891; primary tower limit of $25,000,000 per claim and $50,000,000 in the aggregate; policy period January 1, 2023 through December 31, 2023) and Side A Difference-in-Conditions ("DIC") coverage with Ironbridge Specialty Insurance Ltd. (limit of $15,000,000). Serrano acknowledges and understands that coverage under such policies is subject to the terms, conditions, exclusions, and limitations set forth therein, and that VHG makes no representation or warranty regarding the applicability or availability of coverage to Serrano under any such policy. VHG shall not take any action to cause such policies to be amended or modified in a manner that would intentionally and adversely affect Serrano's coverage thereunder; provided, however, that VHG shall not be obligated to renew, extend, or maintain any particular policy or coverage level.

Section 4.4 — No Voluntary Referral. VHG agrees that it will not voluntarily refer Serrano to any Government Authority for criminal prosecution based solely on information provided by Serrano pursuant to this Agreement; provided, however, that:

(a) this provision shall not apply, and VHG shall have no obligation hereunder, if Serrano breaches his cooperation obligations under Article II, provides false or misleading information in connection with the Investigation or any Related Proceedings, or otherwise fails to comply in any material respect with the terms and conditions of this Agreement; and

(b) nothing in this provision shall prevent VHG from complying with any lawful subpoena, civil investigative demand, court order, regulatory directive, or other legal or regulatory requirement to produce information, documents, or testimony to any Government Authority, and VHG shall not be in breach of this provision by reason of any such compliance.

For the avoidance of doubt, this provision shall not limit the right of any Government Authority to independently investigate or prosecute Serrano based on information obtained through its own investigative efforts, or to compel VHG to produce information pursuant to legal process.

ARTICLE V — MUTUAL RELEASES

Section 5.1 — Release by Serrano. Effective upon the Separation Date, and in consideration of the separation benefits provided under Section 3.2 and the other promises and covenants contained in this Agreement, Serrano, on behalf of himself and his heirs, executors, administrators, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges VHG, VCR, and each of their respective past, present, and future parents, subsidiaries, affiliates, predecessors, successors, and assigns, and each of their respective past, present, and future officers, directors, employees, agents, attorneys, advisors, consultants, and representatives, including without limitation the individual members of the Audit Committee (Diane Kowalski, Reginald Faulkner, and Sandra Yeung), Calderwood & Harkness LLP and its partners, associates, and employees, and Crestline Forensic Advisory LLC and its principals and employees (collectively, the "Company Released Parties"), from any and all claims, actions, causes of action, suits, demands, debts, obligations, promises, liabilities, damages, losses, costs, and expenses of every kind and nature whatsoever, whether at law or in equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, matured or unmatured, accrued or not yet accrued, that Serrano has or may have, or that may hereafter accrue, arising out of or relating in any way to Serrano's employment with VCR, VHG, or any of their affiliates, the termination of such employment, or any event, act, omission, or circumstance occurring on or before the Effective Date.

The foregoing release shall not apply to, and Serrano expressly excludes from such release, the following:

(a) any claim for separation benefits payable under Section 3.2 of this Agreement;

(b) any claim for indemnification or advancement of expenses under Section 4.3 of this Agreement or under VHG's governing documents or applicable Delaware law;

(c) any claim for vested benefits under any ERISA-qualified employee benefit plan maintained by VHG or VCR, including the VHG 401(k) Retirement Savings Plan;

(d) any claim that cannot be waived or released as a matter of applicable law, including workers' compensation claims; and

(e) any claim arising under this Agreement itself.

Without limiting the generality of the foregoing, Serrano expressly waives and releases any and all claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967 (subject to the Older Workers Benefit Protection Act provisions set forth in Section 5.3), the Fair Labor Standards Act, the Family and Medical Leave Act, the Florida Civil Rights Act, the Florida Whistleblower Act (to the extent waivable), and any other analogous federal, state, or local statute, regulation, or ordinance, in each case as amended, to the extent applicable to Serrano's employment with VCR or VHG or the termination thereof.

Section 5.2 — Release by VHG. Effective upon the Separation Date and expressly conditioned on Serrano's continued compliance with the terms of this Agreement, including his cooperation obligations under Article II, VHG, on behalf of itself and VCR, hereby releases Serrano from civil claims for monetary damages arising solely from the expense-reimbursement irregularities identified in the Investigation, specifically the forty-seven (47) fictitious purchase orders identified by Investigation Counsel and Crestline, totaling approximately One Million Eight Hundred Thirty Thousand Dollars ($1,830,000), directed to the following Shell Entities:

(i) Gulf Standard Contracting LLC — nineteen (19) invoices totaling approximately Eight Hundred Twelve Thousand Four Hundred Dollars ($812,400);

(ii) Clearwater Design Collective Inc. — sixteen (16) invoices totaling approximately Five Hundred Eighty-Seven Thousand Six Hundred Dollars ($587,600); and

(iii) Suncoast Property Services LLC — twelve (12) invoices totaling approximately Four Hundred Thirty Thousand Dollars ($430,000).

The foregoing release by VHG shall not extend to, and VHG expressly reserves and does not release, the following:

(a) any claims arising from Serrano's breach of any provision of this Agreement, including his cooperation, confidentiality, and non-disparagement obligations;

(b) any claims asserted by any Government Authority, it being understood that VHG cannot release or waive claims belonging to Government Authorities;

(c) any claims arising from conduct by Serrano that has not been disclosed by Serrano to Investigation Counsel during the Investigation as of the Effective Date;

(d) any clawback rights reserved under Section 3.5 of this Agreement;

(e) any claims for injunctive relief, specific performance, or other equitable relief; and

(f) any claims arising from the revenue-recognition irregularities at VCR to the extent that Serrano's involvement in, knowledge of, or responsibility for those matters exceeds what has been disclosed by Serrano to Investigation Counsel as of the Effective Date.

VHG expressly reserves all rights to seek recovery, whether by civil action, counterclaim, cross-claim, third-party action, or otherwise, against Garrett W. Daskine, Nicole Prescott, the Shell Entities, and any other parties who may be involved in or responsible for the matters under investigation.

Section 5.3 — ADEA / OWBPA Compliance. To the extent that Serrano's release in Section 5.1 encompasses any claims under the Age Discrimination in Employment Act of 1967 ("ADEA"), the following provisions shall apply in accordance with the Older Workers Benefit Protection Act ("OWBPA"):

(a) Serrano acknowledges that he has been advised, and hereby is advised, to consult with an attorney prior to executing this Agreement.

(b) Serrano acknowledges that he has been given a period of at least twenty-one (21) days from the date of receipt of this Agreement within which to consider and review this Agreement before executing it. If Serrano elects to execute this Agreement prior to the expiration of the twenty-one (21) day consideration period, Serrano certifies that his decision to do so was knowing, voluntary, and not induced by fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of such period.

(c) Serrano shall have a period of seven (7) calendar days following his execution of this Agreement within which to revoke his release of ADEA claims by delivering written notice of revocation to Investigation Counsel. The release of ADEA claims shall not become effective or enforceable until such seven (7) day revocation period has expired without revocation (the "ADEA Effective Date").

(d) This Agreement does not waive or release any rights or claims under the ADEA that may arise after the date Serrano executes this Agreement.

ARTICLE VI — REPRESENTATIONS AND WARRANTIES

Section 6.1 — Representations and Warranties by Serrano. Serrano hereby represents and warrants to VHG, the Audit Committee, and Investigation Counsel, as of the Effective Date, as follows:

(a) Full Disclosure. Serrano has made full and truthful disclosure to Investigation Counsel of all material facts within his knowledge relating to the matters under investigation, including without limitation the creation and processing of the forty-seven (47) fictitious purchase orders directed to the Shell Entities, his role as registered agent for Gulf Standard Contracting LLC (Florida Department of State Document No. L23000156789) and Clearwater Design Collective Inc. (Florida Department of State Document No. P22000084561), and his knowledge of the formation, beneficial ownership, and operations of Suncoast Property Services LLC, whose registered agent is Panhandle Agent Services Inc. and whose sole member is Garrett W. Daskine. Serrano has not knowingly withheld or concealed any material fact or circumstance relating to the matters under investigation.

(b) Preservation of Documents. Serrano has not destroyed, concealed, altered, mutilated, or tampered with any documents, records, electronically stored information, or tangible things relevant to the Investigation since becoming aware of the Investigation on or about August 7, 2023, the date of his placement on administrative leave, and has taken reasonable steps to preserve all such materials.

(c) Legal Capacity. Serrano has the legal capacity, competence, and authority to enter into this Agreement and to perform his obligations hereunder.

(d) Independent Counsel. Serrano has been represented by independent counsel, Marco A. Ruiz of Coletti & Ruiz PA, in negotiating, reviewing, and entering into this Agreement. Serrano has had a full and adequate opportunity to review and discuss the terms and conditions of this Agreement with his counsel. Serrano is not relying on any advice or representation of VHG, the Audit Committee, Investigation Counsel, or Crestline in entering into this Agreement.

(e) No Undisclosed Consideration. Serrano has not been promised, and has not received, any consideration, benefit, inducement, or compensation other than as expressly set forth in this Agreement in exchange for his cooperation, his execution of this Agreement, or his release of claims hereunder.

Section 6.2 — Representations and Warranties by VHG. VHG hereby represents and warrants to Serrano, as of the Effective Date, as follows:

(a) Authority. Patricia Navarro, as General Counsel of VHG, is duly authorized to negotiate and execute this Agreement on behalf of VHG and VCR, acting at the direction and with the approval of the Audit Committee.

(b) Authorization. The execution, delivery, and performance of this Agreement by VHG have been duly authorized by the Audit Committee, and no further corporate action or approval is required for VHG to enter into and perform its obligations under this Agreement.

(c) Valid and Binding Obligation. This Agreement constitutes a valid and binding obligation of VHG, enforceable against VHG in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.

ARTICLE VII — BREACH AND REMEDIES

Section 7.1 — Material Breach by Serrano. A material breach of this Agreement by Serrano shall include, without limitation, any of the following:

(a) failure to cooperate fully, truthfully, and promptly as required by Article II of this Agreement;

(b) providing false, misleading, or materially incomplete information or testimony in connection with the Investigation or any Related Proceedings;

(c) destroying, concealing, altering, or tampering with documents, records, or other materials relevant to the Investigation;

(d) unauthorized disclosure of confidential information in violation of Section 2.7 or Section 8.1 of this Agreement; and

(e) communication with Garrett W. Daskine, Nicole Prescott, or their respective counsel regarding the subject matter of the Investigation in violation of Section 2.6 of this Agreement.

Upon a material breach of this Agreement by Serrano, VHG shall provide Serrano with written notice specifying the nature of the breach and, to the extent the breach is reasonably susceptible of cure, Serrano shall have a period of ten (10) business days from receipt of such notice within which to cure the breach. If the breach is not cured within such period, or if the breach is of a nature that is not susceptible of cure (including, without limitation, providing false testimony or destroying documents), VHG may, in its sole discretion, exercise any or all of the following remedies:

(i) reclassify Serrano's termination from a non-cause termination to a termination for cause, with retroactive effect to the Separation Date;

(ii) immediately cease payment of any unpaid separation benefits under Section 3.2;

(iii) seek repayment of all separation benefits previously paid to Serrano under Section 3.2, which amounts shall constitute a debt owed by Serrano to VHG;

(iv) revoke the release granted by VHG in Section 5.2 and pursue all claims, actions, and causes of action against Serrano arising from or related to the matters under investigation, including claims for the full amount of losses attributable to the fictitious purchase orders; and

(v) pursue any and all other remedies available at law or in equity, including claims for compensatory damages, consequential damages, and injunctive relief.

The remedies set forth in this Section 7.1 are cumulative and are in addition to any other remedies available to VHG under applicable law.

Section 7.2 — Determination of Breach. Any initial determination regarding whether a material breach has occurred shall be made by the Audit Committee in consultation with Investigation Counsel. The Audit Committee shall provide Serrano and Serrano's Counsel with a written statement setting forth the factual basis for its determination. Serrano shall have the right to challenge any such determination through the dispute-resolution procedures set forth in Article IX. Pending the resolution of any such dispute, VHG may suspend, but shall not be required to continue, payment of separation benefits under Section 3.2, and any amounts withheld shall be paid to Serrano with interest at the rate of five percent (5%) per annum if it is ultimately determined that no material breach occurred.

ARTICLE VIII — RESTRICTIVE COVENANTS

Section 8.1 — Confidentiality. Serrano shall not, during the Cooperation Period or at any time thereafter, use, disclose, or permit the disclosure of any Confidential Information (as defined below) of VHG, VCR, or any of their affiliates, except as required in connection with his cooperation obligations under Article II or as compelled by applicable law or legal process. For purposes of this Agreement, "Confidential Information" means all non-public information relating to VHG, VCR, and their affiliates, including without limitation trade secrets, proprietary business methodologies, financial data, financial projections, business strategies, marketing plans, customer lists, guest data, vendor relationships, pricing information, personnel information, information relating to the Investigation, and any other information that derives economic value from not being generally known to the public or to competitors. Confidential Information does not include information that (i) is or becomes publicly available through no fault of Serrano, or (ii) is required to be disclosed by applicable law, regulation, or legal process, provided that Serrano provides Investigation Counsel with prompt prior written notice of any such required disclosure to the extent legally permissible.

Section 8.2 — Non-Disparagement. Serrano shall not, during the Cooperation Period or at any time thereafter, make or publish, or cause or encourage any other person to make or publish, any statement, whether written or oral, that disparages, defames, or casts in an unfavorable light VHG, VCR, or any of their past, present, or future officers, directors, employees, agents, products, services, business practices, or reputation. VHG shall instruct its executive officers and directors not to make or publish, or cause or encourage any other person to make or publish, any statement, whether written or oral, that disparages, defames, or casts in an unfavorable light Serrano or his reputation; provided, however, that truthful statements made in connection with the Investigation, Related Proceedings, SEC filings, regulatory inquiries, court proceedings, or as otherwise required by law, regulation, or legal process shall not constitute a violation of this non-disparagement provision by either Party.

Section 8.3 — Protected Rights. Notwithstanding any other provision of this Agreement, nothing in this Agreement shall prohibit or restrict Serrano from:

(a) reporting possible violations of federal, state, or local law or regulation to any Government Authority, including the SEC, the DOJ, the IRS, or any state attorney general, or making any other disclosures that are protected under the whistleblower provisions of federal or state law;

(b) filing a charge with, or participating in any investigation or proceeding conducted by, any Government Authority, including the Equal Employment Opportunity Commission, the National Labor Relations Board, or any state or local human rights agency;

(c) making disclosures that are protected under the whistleblower provisions of federal securities laws, including Section 21F of the Securities Exchange Act of 1934 and Rule 21F-17 thereunder, or any other applicable whistleblower protection statute; Serrano is hereby notified that, pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal; or

(d) exercising any right that cannot be waived as a matter of applicable law.

Serrano shall not be required to notify VHG or Investigation Counsel prior to making any report or disclosure described in this Section 8.3.

ARTICLE IX — DISPUTE RESOLUTION

Section 9.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-laws rules or provisions (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida. Notwithstanding the foregoing, questions relating to VHG's corporate governance, including indemnification and advancement of expenses, shall be governed by the General Corporation Law of the State of Delaware.

Section 9.2 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be resolved in accordance with the following procedures:

(a) Negotiation. The Parties shall first attempt to resolve the dispute through good-faith negotiation between their respective counsel, commencing upon written notice by one Party to the other Party describing the nature of the dispute in reasonable detail. The Parties shall negotiate in good faith for a period of not less than thirty (30) calendar days following the date of such notice.

(b) Binding Arbitration. If the dispute is not resolved through negotiation within the thirty (30) day period described above, either Party may submit the dispute to final and binding arbitration in Tampa, Florida, administered by JAMS (or, if JAMS is unavailable, by the American Arbitration Association) under the then-current JAMS Comprehensive Arbitration Rules and Procedures. The arbitration shall be conducted by a single neutral arbitrator selected by mutual agreement of the Parties or, if the Parties cannot agree, in accordance with the applicable rules of the arbitration organization. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including compensatory damages, injunctive relief, and specific performance. The arbitrator's decision shall be final and binding, and judgment on the award may be entered in any court of competent jurisdiction. The arbitration proceedings and all related documents shall be treated as confidential by the Parties and the arbitrator.

Nothing in this Section 9.2 shall prevent either Party from seeking temporary restraining orders, preliminary injunctions, or other interim or provisional equitable relief in a court of competent jurisdiction to prevent irreparable harm pending the resolution of the dispute through arbitration.

Section 9.3 — Attorneys' Fees. In any arbitration, litigation, or other proceeding to enforce, interpret, or construe any provision of this Agreement, the substantially prevailing Party shall be entitled to recover from the non-prevailing Party its reasonable attorneys' fees and costs, including expert witness fees, arbitration fees, and costs of appeal, in addition to any other relief to which such Party may be entitled.

ARTICLE X — GENERAL PROVISIONS

Section 10.1 — Entire Agreement. This Agreement, together with any exhibits, schedules, or attachments hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, understandings, agreements, and communications, whether written or oral, between the Parties relating to the subject matter hereof. There are no representations, warranties, covenants, or agreements between the Parties with respect to the subject matter hereof other than those expressly set forth or referred to in this Agreement.

Section 10.2 — Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by both Parties. No oral modification or waiver of any provision of this Agreement shall be effective for any purpose.

Section 10.3 — Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included herein. In the event that any provision is held to be overbroad or unreasonable in scope, duration, or geographic application, such provision shall be modified and construed to the minimum extent necessary to render it valid and enforceable.

Section 10.4 — Waiver. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or the right of such Party to enforce such provision at a later time. No waiver of any provision of this Agreement shall be effective unless such waiver is in writing and signed by the Party against whom the waiver is sought to be enforced. No single or partial exercise of any right or remedy shall preclude any other or further exercise thereof, or the exercise of any other right or remedy. No waiver of any breach of this Agreement shall constitute a continuing waiver or a waiver of any subsequent breach.

Section 10.5 — Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by registered or certified mail, postage prepaid, return receipt requested, (c) sent by a nationally recognized overnight courier service with tracking capability, or (d) sent by email with confirmation of receipt, to the following addresses (or to such other address as a Party may designate by written notice in accordance with this Section):

If to VHG:

Patricia Navarro, General Counsel Verimark Hospitality Group Inc. 4100 Bayshore Boulevard, Suite 1200 Tampa, Florida 33611

Email: pnavarro@verimarkhospitality.com

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

Howard Quinn, Partner Calderwood & Harkness LLP 200 South Biscayne Boulevard, Suite 4400 Miami, Florida 33131

Email: hquinn@calderwoodharkness.com

Reference: Matter No. 1021-00008

If to Serrano:

Marco A. Ruiz, Esq. Coletti & Ruiz PA 2202 North Westshore Boulevard, Suite 200 Tampa, Florida 33607

Email: mruiz@colettiruiz.com

and to:

Ryan Mateo Serrano At the address on file with VHG's Human Resources Department

Section 10.6 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, portable document format (PDF), or other electronic means shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.

Section 10.7 — Assignment. This Agreement is personal to Serrano and may not be assigned, transferred, or delegated by Serrano in whole or in part, whether by operation of law or otherwise, without the prior written consent of VHG. Any purported assignment by Serrano in violation of this provision shall be void and of no force or effect. VHG may assign its rights and obligations under this Agreement to any successor entity, whether by merger, consolidation, reorganization, sale of all or substantially all of its assets, or otherwise, without the consent of Serrano; provided that any such assignee shall assume all of VHG's obligations under this Agreement.

Section 10.8 — Third-Party Beneficiaries. Except as expressly provided in this Section, nothing in this Agreement is intended to, or shall be construed to, confer upon any person other than the Parties any right, benefit, or remedy of any kind. The individual members of the Audit Committee (Diane Kowalski, Reginald Faulkner, and Sandra Yeung, and any successors thereto), Calderwood & Harkness LLP, and Crestline Forensic Advisory LLC are intended third-party beneficiaries of Serrano's release set forth in Section 5.1 and Serrano's cooperation obligations set forth in Article II, and shall be entitled to enforce such provisions as if they were parties to this Agreement; provided, however, that no such third-party beneficiary is a party to this Agreement and no such third-party beneficiary shall have any rights under any other provision of this Agreement.

Section 10.9 — Survival. The provisions of Article II (Cooperation Obligations), Article V (Mutual Releases), Article VI (Representations and Warranties), Article VII (Breach and Remedies), Article VIII (Restrictive Covenants), and Article IX (Dispute Resolution) shall survive the expiration of the Cooperation Period and the termination or expiration of this Agreement for any reason, and shall remain in full force and effect in accordance with their respective terms.

Section 10.10 — Construction. This Agreement has been negotiated by the Parties and their respective counsel and shall not be construed against either Party as the drafter. The headings and captions used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any provision hereof. References to "Sections" and "Articles" are to sections and articles of this Agreement unless otherwise specified. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." References to the singular include the plural and vice versa, and references to any gender include all genders.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this Cooperation Agreement as of the date first written above.

VERIMARK HOSPITALITY GROUP INC.

By: ________

Name: Patricia Navarro

Title: General Counsel

Date: November 15, 2023

COOPERATING PARTY

________________________________________

Ryan Mateo Serrano

Date: November 15, 2023

ACKNOWLEDGED AND CONSENTED TO BY SERRANO'S COUNSEL:

________________________________________

Marco A. Ruiz, Esq. Coletti & Ruiz PA 2202 North Westshore Boulevard, Suite 200 Tampa, Florida 33607

Date: November 15, 2023

APPROVED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF VERIMARK HOSPITALITY GROUP INC.:

________________________________________

Diane Kowalski

Title: Chair, Audit Committee

Date: November 15, 2023

COOPERATION AGREEMENT
VERIMARK HOSPITALITY GROUP INC.
and
RYAN MATEO SERRANO
Dated as of November 15, 2023
COOPERATION AGREEMENT
This Cooperation Agreement (this "Agreement") is entered into as of November 15, 2023 (the "Effective Date"), by and between Verimark Hospitality Group Inc., a Delaware corporation, with its principal executive offices located at 4100 Bayshore Boulevard, Suite 1200, Tampa, Florida 33611 ("VHG" or the "Company"), whose common stock is listed and publicly traded on the Nasdaq Stock Market under the ticker symbol VMRK, and Ryan Mateo Serrano, an individual residing in the State of Florida ("Serrano" or the "Cooperating Party"). VHG and Serrano are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. Background of the Company and the Division. VHG is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices in Tampa, Florida. VHG's shares of common stock are listed and traded on the Nasdaq Stock Market under the ticker symbol VMRK. VHG is engaged in the business of hospitality management, commercial and resort real estate development, timeshare-interest sales and marketing, and hotel and resort management across multiple properties in the southeastern United States and the Caribbean. Verimark Coastal Resorts LLC ("VCR") is a Florida limited liability company and a wholly owned subsidiary of VHG, with its principal office located at 7820 Gulf Breeze Parkway, Suite 400, Destin, Florida 32541. VCR operates and manages resort and timeshare properties along the Gulf Coast of Florida. Serrano has been employed by VCR as Division Controller since approximately 2018, making him a five-year veteran of the VHG family of companies. In that capacity, Serrano has had responsibility for financial reporting, expense management, accounts payable, vendor management, and revenue-recognition processes at VCR and its managed properties.
B. The Investigation. On or about July 24, 2023, the Audit Committee of the Board of Directors of VHG (the "Audit Committee"), comprised of independent directors Diane Kowalski (Chair), Reginald Faulkner, and Sandra Yeung, commenced an independent internal investigation (the "Investigation") into certain expense-reporting irregularities and revenue-recognition practices at VCR. In connection with the Investigation, the Audit Committee retained Calderwood & Harkness LLP ("C&H"), a nationally recognized law firm with offices at 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131, as independent investigation counsel. C&H, in turn, retained Crestline Forensic Advisory LLC ("Crestline") as a forensic accounting advisor under the Kovel doctrine, to assist Investigation Counsel in the forensic analysis of financial records, transactional data, and accounting entries relevant to the Investigation. The Investigation concerns, among other things: (i) the premature recognition of revenue from timeshare-interest deposit sales at VCR properties, including Coral Dune Resort & Residences, located at 14200 Emerald Coast Parkway, Destin, Florida 32541, and Palmetto Bluff Club, located at 3950 Longboat Key Drive, Sarasota, Florida 34228; and (ii) expense-reimbursement irregularities involving fictitious vendor invoices and purchase orders directed to certain entities that appear to have been created for the purpose of diverting Company funds.
C. Serrano's Status. Serrano was placed on paid administrative leave effective August 7, 2023, pending the outcome of the Investigation. Serrano was subsequently interviewed by C&H on September 27, 2023, with his independent counsel, Marco A. Ruiz of Coletti & Ruiz PA, present. During that interview and in subsequent communications through counsel, Serrano expressed his willingness to cooperate fully and truthfully with the Investigation and any related governmental inquiries. Serrano acknowledges his involvement in certain conduct under investigation, including but not limited to the creation and processing of fictitious purchase orders attributed to purported vendors, as described in greater detail herein.
D. Purpose. The Parties desire to set forth the terms and conditions of Serrano's cooperation with the Investigation and any Related Proceedings (as defined below), and to address the terms of Serrano's separation from employment with VCR and VHG, in consideration of the mutual promises, covenants, and agreements set forth herein.
E. Counsel. Serrano is represented in connection with the negotiation and execution of this Agreement by Marco A. Ruiz of Coletti & Ruiz PA, Tampa, Florida. VHG is represented in connection with this Agreement by Calderwood & Harkness LLP, 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131 (Howard Quinn, Responsible Partner; matter number 1021-00008), acting at the direction of and under the authority of the Audit Committee. Patricia Navarro, General Counsel of VHG, is authorized to execute this Agreement on behalf of VHG, with the approval and at the direction of the Audit Committee.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Agreement.
(a) "Agreement" means this Cooperation Agreement, including all recitals and exhibits hereto, as may be amended or modified from time to time in accordance with Section 10.2.
(b) "Audit Committee" means the Audit Committee of the Board of Directors of VHG, as constituted from time to time. As of the Effective Date, the Audit Committee is comprised of Diane Kowalski (Chair), Reginald Faulkner, and Sandra Yeung, each of whom is an independent director within the meaning of Nasdaq Listing Rule 5605(a)(2) and Rule 10A-3 under the Securities Exchange Act of 1934, as amended.
(c) "Company" means Verimark Hospitality Group Inc., a Delaware corporation, together with its subsidiaries and affiliates, including without limitation Verimark Coastal Resorts LLC.
(d) "Cooperation Period" means the period commencing on the Effective Date and continuing through the later of (i) the date on which the Investigation is formally closed by action of the Audit Committee, or (ii) the conclusion of any and all Related Proceedings, including the exhaustion or expiration of all applicable appeal periods.
(e) "Crestline" means Crestline Forensic Advisory LLC, the forensic accounting advisory firm retained by C&H under the Kovel doctrine to assist Investigation Counsel in connection with the Investigation.
(f) "Effective Date" means November 15, 2023.
(g) "Government Authority" means any federal, state, or local governmental authority, department, agency, commission, bureau, regulatory body, or self-regulatory organization, including but not limited to the United States Securities and Exchange Commission (the "SEC"), including the Division of Enforcement thereof, the United States Department of Justice (the "DOJ"), the Internal Revenue Service (the "IRS"), the Financial Industry Regulatory Authority ("FINRA"), and any state attorney general or state securities regulator.
(h) "Investigation" means the independent internal investigation commenced by the Audit Committee on or about July 24, 2023, as described in Recital B, and any continuation, extension, expansion, or reopening thereof.
(i) "Investigation Counsel" means Calderwood & Harkness LLP, acting in its capacity as independent investigation counsel retained by and reporting to the Audit Committee in connection with the Investigation.
(j) "Related Proceedings" means any governmental investigation, regulatory examination, regulatory proceeding, enforcement action, civil action, arbitration, or other legal proceeding arising out of or relating to the subject matter of the Investigation, including without limitation SEC preliminary inquiry File No. HO-14237, and any proceedings that may be commenced by the DOJ, the IRS, or any other Government Authority.
(k) "C&H" means Calderwood & Harkness LLP, 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131.
(l) "Separation" has the meaning ascribed to such term in Section 3.1.
(m) "Serrano's Counsel" means Marco A. Ruiz of Coletti & Ruiz PA, Tampa, Florida, or such other counsel as Serrano may designate in writing to VHG from time to time.
(n) "Shell Entities" means, collectively, (i) Gulf Standard Contracting LLC, a Florida limited liability company, (ii) Clearwater Design Collective Inc., a Florida corporation, and (iii) Suncoast Property Services LLC, a Florida limited liability company, each of which was identified during the Investigation as a purported vendor of VCR that received payments based on fictitious purchase orders and vendor invoices.
(o) "Subjects" means Garrett W. Daskine, Vice President of Resort Operations at VCR, and Nicole Prescott, Senior Director of Procurement at VCR, and any other individuals who may become subjects or targets of the Investigation or any Related Proceedings, as designated from time to time by the Audit Committee or Investigation Counsel.
(p) "VCR" means Verimark Coastal Resorts LLC, a Florida limited liability company and wholly owned subsidiary of VHG.
ARTICLE II — COOPERATION OBLIGATIONS
Section 2.1 — General Cooperation Obligation. Serrano agrees to cooperate fully, truthfully, completely, and promptly with the Company, Investigation Counsel, Crestline, and the Audit Committee in connection with the Investigation and any Related Proceedings. Such cooperation shall be provided without the necessity of a subpoena or other compulsory process, and Serrano shall use his best efforts to make himself available at reasonable times and places as requested by Investigation Counsel. Serrano's cooperation obligation shall encompass all matters relating to the subject matter of the Investigation, including but not limited to: (i) the premature recognition of timeshare-interest deposit revenue at VCR, including at Coral Dune Resort & Residences and Palmetto Bluff Club; (ii) the creation, approval, processing, and payment of fictitious purchase orders and vendor invoices; (iii) the formation, ownership structure, operations, bank accounts, and fund flows involving the Shell Entities—specifically, Gulf Standard Contracting LLC, Clearwater Design Collective Inc., and Suncoast Property Services LLC; and (iv) the conduct, knowledge, involvement, and communications of Garrett W. Daskine, Nicole Prescott, and any other persons involved in or with knowledge of the matters under investigation. Serrano acknowledges that his cooperation is a material inducement for VHG to enter into this Agreement and to provide the consideration described herein.
Section 2.2 — Truthful Testimony and Statements. Serrano shall provide complete, truthful, and accurate information in all interviews, testimony, depositions, declarations, affidavits, and communications with Investigation Counsel, Crestline, the Audit Committee, and any Government Authority. Serrano shall not knowingly make any false, misleading, or materially incomplete statement of fact in connection with the Investigation or any Related Proceedings, whether in written or oral form. In the event that Serrano becomes aware, at any time, that any prior statement he has made in connection with the Investigation or any Related Proceedings was inaccurate, incomplete, or misleading in any material respect, Serrano shall promptly notify Investigation Counsel and Serrano's Counsel of such inaccuracy, incompleteness, or misleading nature, and shall take all reasonable steps to correct such prior statement. This obligation extends to any testimony Serrano may be called upon to provide before the SEC, including in connection with preliminary inquiry File No. HO-14237, the DOJ, or any other Government Authority.
Section 2.3 — Interviews. Serrano shall make himself available for additional interviews by Investigation Counsel, and by Crestline at the direction of Investigation Counsel, at reasonable times and locations upon reasonable advance notice, which shall generally be not less than five (5) business days. Serrano acknowledges that his first interview in connection with the Investigation occurred on September 27, 2023, at the offices of C&H in Miami, Florida, and that his counsel, Marco A. Ruiz, was present during that interview. Serrano shall participate in follow-up interviews as reasonably requested by Investigation Counsel. The Parties acknowledge that a second interview has been scheduled for December 5, 2023. Serrano's Counsel, Marco A. Ruiz, or his designee from the firm of Coletti & Ruiz PA, shall be permitted to attend all interviews conducted pursuant to this Agreement. Serrano acknowledges and understands that Upjohn warnings were administered during his prior interview on September 27, 2023, and that the attorney-client privilege with respect to the Investigation belongs to VHG and not to Serrano individually. Serrano further acknowledges and understands that VHG, through the Audit Committee, retains the sole authority to assert or waive the attorney-client privilege with respect to communications arising out of the Investigation, and that Serrano has no individual privilege in such communications.
Section 2.4 — Document Production. Serrano shall promptly produce to Investigation Counsel all documents, records, electronically stored information ("ESI"), and tangible things in his possession, custody, or control that are requested by Investigation Counsel and that relate to the subject matter of the Investigation. This obligation includes, without limitation, the production of documents and information relating to:
(a) the forty-seven (47) fictitious purchase orders attributed to Gulf Standard Contracting LLC, Clearwater Design Collective Inc., and Suncoast Property Services LLC, including all drafts, supporting documentation, approvals, and related communications;
(b) the formation, organization, registration, and operation of each of the Shell Entities, including articles of organization, operating agreements, corporate resolutions, registered agent designations, and annual reports;
(c) bank account records, wire transfer records, ACH transaction records, payment records, cancelled checks, and deposit records for accounts held by or for the benefit of the Shell Entities, including but not limited to any accounts at Coastal Commerce Bank, Sundial National Bank, or any other financial institution;
(d) all communications, whether by email, text message, messaging application, telephone, or other means, between Serrano and Garrett W. Daskine and between Serrano and Nicole Prescott, or any agent or representative of either, regarding the matters under investigation, including communications regarding the creation of purchase orders, the approval of vendor invoices, the disbursement of funds, and the disposition of proceeds;
(e) VCR revenue-recognition practices for timeshare-interest sales, including any memoranda, spreadsheets, journal entries, accounting work papers, or communications relating to the timing of revenue recognition for deposit receipts at Coral Dune Resort & Residences and Palmetto Bluff Club; and
(f) any other documents or information reasonably requested by Investigation Counsel.
Serrano shall not destroy, conceal, alter, mutilate, or tamper with any documents, records, ESI, or tangible things that are or may be relevant to the Investigation, and shall take all reasonable steps to preserve such materials. Serrano represents that he has implemented a litigation hold with respect to all such materials as of the date of his administrative leave.
Section 2.5 — Cooperation with Government Authorities. If requested by the Company or Investigation Counsel, or if compelled by lawful subpoena, court order, or other legal process, Serrano shall cooperate with any Government Authority investigating matters related to the subject matter of the Investigation, including the SEC Division of Enforcement in connection with preliminary inquiry File No. HO-14237 and any formal investigation or enforcement proceeding that may arise therefrom. The Company and Serrano shall consult with each other, through their respective counsel, in advance of any voluntary communications with Government Authorities to the extent permitted by law and not otherwise prohibited by such Government Authority. Serrano shall promptly notify Investigation Counsel if he receives any subpoena, document request, interrogatory, civil investigative demand, or other compulsory process from any Government Authority relating to the matters under investigation. Nothing in this Agreement shall be construed to require Serrano to waive his rights under the Fifth Amendment to the United States Constitution, or any other constitutional, statutory, or common-law privilege, in connection with any interview, testimony, or proceeding before any Government Authority.
Section 2.6 — No Contact with Subjects. During the Cooperation Period, Serrano shall not, directly or indirectly, communicate with Garrett W. Daskine, Nicole Prescott, or their respective counsel—Merritt & Dunleavy LLP (representing Daskine) and Langford Pace LLP (representing Prescott)—or any agent, representative, or family member of either Subject, regarding the subject matter of the Investigation, the existence or terms of this Agreement, or any Related Proceedings, without the prior written consent of Investigation Counsel. This restriction shall not apply to communications compelled by lawful process of a court or Government Authority, provided that Serrano shall provide prompt written notice to Investigation Counsel of any such compelled communication.
Section 2.7 — Confidentiality of Cooperation. Serrano shall maintain the confidentiality of the Investigation, including the substance of his interviews and any documents produced, and of his cooperation under this Agreement. Serrano shall not disclose the existence or terms of this Agreement, or any information learned in the course of his cooperation, except:
(a) to Serrano's Counsel, Marco A. Ruiz, and attorneys and staff of Coletti & Ruiz PA with a need to know;
(b) to Serrano's immediate family members on a need-to-know basis, provided that Serrano shall inform such family members of the confidentiality obligations hereunder and shall be responsible for any breach by such family members;
(c) as required by applicable law, regulation, or legal process, including any subpoena or court order, provided that Serrano shall provide prompt written notice to Investigation Counsel in advance of any such disclosure to the extent legally permissible; or
(d) as authorized in writing by Investigation Counsel.
Serrano acknowledges that public disclosure of certain aspects of the Investigation may be required by VHG's obligations under the Securities Exchange Act of 1934, the Securities Act of 1933, and applicable SEC rules and regulations, including but not limited to disclosure in VHG's periodic reports on Forms 10-K, 10-Q, and 8-K, and that such disclosures by VHG do not constitute a breach of this provision by VHG.
ARTICLE III — EMPLOYMENT TERMINATION
Section 3.1 — Termination of Employment. VHG shall terminate Serrano's employment with VCR on a non-cause basis (the "Separation"), effective on a date to be determined by the Company in its sole discretion, which date shall be no later than December 31, 2023 (the "Separation Date"). The Company shall provide Serrano with written notice of the Separation Date at least five (5) business days in advance thereof. The characterization of Serrano's termination as "non-cause" is expressly conditioned upon Serrano's continued full, truthful, and complete cooperation in accordance with this Agreement. Serrano acknowledges and agrees that, notwithstanding the non-cause characterization of his Separation, he engaged in conduct during his employment at VCR that may have constituted grounds for termination for cause under VCR's employment policies and applicable law, including but not limited to the creation and processing of fictitious purchase orders and the diversion of Company funds to the Shell Entities.
Section 3.2 — Separation Benefits. Subject to (i) Serrano's execution and non-revocation of the General Release set forth in Article V, (ii) Serrano's continued compliance with the terms of this Agreement, including his cooperation obligations under Article II, and (iii) the occurrence of the Separation Date, VHG shall provide Serrano with the following separation benefits:
(a) Salary Continuation. Continuation of Serrano's base salary as in effect immediately prior to his placement on administrative leave, for a period of six (6) months following the Separation Date. Such salary continuation shall be payable in accordance with VHG's normal payroll practices and schedule, subject to applicable tax withholdings and deductions, and shall commence on the first regular payroll date following the Separation Date (or, if applicable, following the expiration of the ADEA revocation period described in Section 5.3).
(b) Health Insurance Continuation. Continuation of Serrano's health insurance benefits (medical, dental, and vision) under VHG's group health plan at active-employee rates for a period of six (6) months following the Separation Date, subject to Serrano's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"). VHG shall subsidize the difference between the COBRA premium and the active-employee contribution rate for the applicable coverage during such six (6) month period. Following the expiration of the six (6) month subsidy period, Serrano shall be solely responsible for the full cost of any continued COBRA coverage for the remainder of the applicable COBRA continuation period.
(c) Unemployment Insurance. VHG shall not contest Serrano's application for unemployment insurance benefits with the Florida Department of Economic Opportunity or any successor agency, if any such application is filed by Serrano.
Serrano acknowledges and agrees that the separation benefits described in this Section 3.2 exceed any compensation or benefits to which he would otherwise be entitled upon termination of his employment, whether under his offer letter, VCR's employee handbook, VHG's severance policies (if any), or applicable law, and that such separation benefits constitute adequate and sufficient consideration for Serrano's execution of this Agreement, including the releases, covenants, and representations contained herein.
Section 3.3 — No Additional Compensation. Except as expressly provided in Section 3.2 of this Agreement, Serrano shall not be entitled to receive, and hereby waives any claim to, any further compensation, severance pay, bonus (including any annual or quarterly incentive bonus), commission, equity award (including stock options, restricted stock units, or other equity-based compensation), vacation pay (other than accrued and unused vacation pay to the extent required by applicable law), or other benefit from VHG, VCR, or any of their affiliates, whether arising under any employment agreement, plan, program, policy, or arrangement. Serrano acknowledges that any unvested equity awards, if applicable, including without limitation any unvested restricted stock units granted under the VHG 2021 Equity Incentive Plan, are automatically forfeited as of the Separation Date in accordance with the terms of the applicable award agreement and the VHG 2021 Equity Incentive Plan.
Section 3.4 — Return of Company Property. Within five (5) business days following the Separation Date, Serrano shall return to the Company all Company property in his possession, custody, or control, including but not limited to laptop computers, tablet devices, mobile phones, access badges, identification cards, keys, key fobs, credit cards, files, documents (whether in paper or electronic format), electronically stored information, proprietary data, and any other tangible or intangible property belonging to VHG or VCR. The return of Company property shall be coordinated through Investigation Counsel to ensure the proper chain of custody and preservation of documents and materials that may constitute relevant evidence in connection with the Investigation or any Related Proceedings. Serrano shall not retain any copies, duplicates, reproductions, or excerpts of Company documents or information, except as may be expressly authorized in writing by Investigation Counsel.
Section 3.5 — Clawback Reservation. Notwithstanding the non-cause characterization of the Separation or any other provision of this Agreement, VHG expressly reserves all rights under any applicable clawback policy, including without limitation the VHG Executive Compensation Clawback Policy adopted in compliance with Section 10D of the Securities Exchange Act of 1934, SEC Rule 10D-1, and Nasdaq Listing Rule 5608, to recover incentive-based compensation previously paid or awarded to Serrano to the extent required by applicable law, SEC rules, or Nasdaq listing standards, including in the event of a financial restatement. Nothing in this Agreement shall be construed as a waiver of, or limitation on, VHG's rights under any such clawback policy or applicable law.
ARTICLE IV — COMPANY OBLIGATIONS
Section 4.1 — Non-Cause Characterization. VHG agrees that, so long as Serrano is in material compliance with the terms and conditions of this Agreement, VHG shall characterize and treat Serrano's Separation as a non-cause termination for all purposes, including in any communications with third parties, responses to background inquiries, and employment references. In the event VHG receives a reference inquiry regarding Serrano, VHG shall confirm only Serrano's dates of employment, job title, and the non-cause nature of his Separation, unless otherwise required by law or authorized in writing by Serrano.
Section 4.2 — Reasonable Cooperation by VHG. VHG shall, through Investigation Counsel, provide Serrano and Serrano's Counsel with reasonable advance notice of interview requests, reasonable scheduling accommodations to minimize disruption to Serrano's personal and professional affairs, and reasonable access to relevant documents in the Company's possession, custody, or control that Serrano may reasonably need to review in order to prepare for interviews, testimony, or other cooperation activities under this Agreement. VHG shall not unreasonably refuse or delay requests by Serrano's Counsel for access to documents or information necessary for Serrano's preparation. The Company's obligations under this Section 4.2 shall be subject to the attorney-client privilege, work-product doctrine, and any other applicable privileges or protections, as determined by Investigation Counsel in its reasonable discretion.
Section 4.3 — Indemnification and Advancement. To the extent provided by VHG's Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, and applicable law, including Section 145 of the Delaware General Corporation Law, Serrano shall be entitled to advancement of reasonable legal fees and expenses incurred by Serrano in connection with Related Proceedings, subject to the execution by Serrano of an undertaking to repay such amounts if it is ultimately determined, by final adjudication or otherwise, that Serrano is not entitled to indemnification under VHG's governing documents or applicable law. Nothing in this Agreement shall be construed to expand, limit, or modify Serrano's indemnification or advancement rights beyond those provided by VHG's governing documents and applicable Delaware law as in effect from time to time.
Serrano acknowledges that VHG maintains directors and officers liability insurance with North Atlantic Indemnity Corp. (Policy No. NAI-DOL-2023-004891; primary tower limit of $25,000,000 per claim and $50,000,000 in the aggregate; policy period January 1, 2023 through December 31, 2023) and Side A Difference-in-Conditions ("DIC") coverage with Ironbridge Specialty Insurance Ltd. (limit of $15,000,000). Serrano acknowledges and understands that coverage under such policies is subject to the terms, conditions, exclusions, and limitations set forth therein, and that VHG makes no representation or warranty regarding the applicability or availability of coverage to Serrano under any such policy. VHG shall not take any action to cause such policies to be amended or modified in a manner that would intentionally and adversely affect Serrano's coverage thereunder; provided, however, that VHG shall not be obligated to renew, extend, or maintain any particular policy or coverage level.
Section 4.4 — No Voluntary Referral. VHG agrees that it will not voluntarily refer Serrano to any Government Authority for criminal prosecution based solely on information provided by Serrano pursuant to this Agreement; provided, however, that:
(a) this provision shall not apply, and VHG shall have no obligation hereunder, if Serrano breaches his cooperation obligations under Article II, provides false or misleading information in connection with the Investigation or any Related Proceedings, or otherwise fails to comply in any material respect with the terms and conditions of this Agreement; and
(b) nothing in this provision shall prevent VHG from complying with any lawful subpoena, civil investigative demand, court order, regulatory directive, or other legal or regulatory requirement to produce information, documents, or testimony to any Government Authority, and VHG shall not be in breach of this provision by reason of any such compliance.
For the avoidance of doubt, this provision shall not limit the right of any Government Authority to independently investigate or prosecute Serrano based on information obtained through its own investigative efforts, or to compel VHG to produce information pursuant to legal process.
ARTICLE V — MUTUAL RELEASES
Section 5.1 — Release by Serrano. Effective upon the Separation Date, and in consideration of the separation benefits provided under Section 3.2 and the other promises and covenants contained in this Agreement, Serrano, on behalf of himself and his heirs, executors, administrators, successors, and assigns, hereby irrevocably and unconditionally releases and forever discharges VHG, VCR, and each of their respective past, present, and future parents, subsidiaries, affiliates, predecessors, successors, and assigns, and each of their respective past, present, and future officers, directors, employees, agents, attorneys, advisors, consultants, and representatives, including without limitation the individual members of the Audit Committee (Diane Kowalski, Reginald Faulkner, and Sandra Yeung), Calderwood & Harkness LLP and its partners, associates, and employees, and Crestline Forensic Advisory LLC and its principals and employees (collectively, the "Company Released Parties"), from any and all claims, actions, causes of action, suits, demands, debts, obligations, promises, liabilities, damages, losses, costs, and expenses of every kind and nature whatsoever, whether at law or in equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, matured or unmatured, accrued or not yet accrued, that Serrano has or may have, or that may hereafter accrue, arising out of or relating in any way to Serrano's employment with VCR, VHG, or any of their affiliates, the termination of such employment, or any event, act, omission, or circumstance occurring on or before the Effective Date.
The foregoing release shall not apply to, and Serrano expressly excludes from such release, the following:
(a) any claim for separation benefits payable under Section 3.2 of this Agreement;
(b) any claim for indemnification or advancement of expenses under Section 4.3 of this Agreement or under VHG's governing documents or applicable Delaware law;
(c) any claim for vested benefits under any ERISA-qualified employee benefit plan maintained by VHG or VCR, including the VHG 401(k) Retirement Savings Plan;
(d) any claim that cannot be waived or released as a matter of applicable law, including workers' compensation claims; and
(e) any claim arising under this Agreement itself.
Without limiting the generality of the foregoing, Serrano expressly waives and releases any and all claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967 (subject to the Older Workers Benefit Protection Act provisions set forth in Section 5.3), the Fair Labor Standards Act, the Family and Medical Leave Act, the Florida Civil Rights Act, the Florida Whistleblower Act (to the extent waivable), and any other analogous federal, state, or local statute, regulation, or ordinance, in each case as amended, to the extent applicable to Serrano's employment with VCR or VHG or the termination thereof.
Section 5.2 — Release by VHG. Effective upon the Separation Date and expressly conditioned on Serrano's continued compliance with the terms of this Agreement, including his cooperation obligations under Article II, VHG, on behalf of itself and VCR, hereby releases Serrano from civil claims for monetary damages arising solely from the expense-reimbursement irregularities identified in the Investigation, specifically the forty-seven (47) fictitious purchase orders identified by Investigation Counsel and Crestline, totaling approximately One Million Eight Hundred Thirty Thousand Dollars ($1,830,000), directed to the following Shell Entities:
(i) Gulf Standard Contracting LLC — nineteen (19) invoices totaling approximately Eight Hundred Twelve Thousand Four Hundred Dollars ($812,400);
(ii) Clearwater Design Collective Inc. — sixteen (16) invoices totaling approximately Five Hundred Eighty-Seven Thousand Six Hundred Dollars ($587,600); and
(iii) Suncoast Property Services LLC — twelve (12) invoices totaling approximately Four Hundred Thirty Thousand Dollars ($430,000).
The foregoing release by VHG shall not extend to, and VHG expressly reserves and does not release, the following:
(a) any claims arising from Serrano's breach of any provision of this Agreement, including his cooperation, confidentiality, and non-disparagement obligations;
(b) any claims asserted by any Government Authority, it being understood that VHG cannot release or waive claims belonging to Government Authorities;
(c) any claims arising from conduct by Serrano that has not been disclosed by Serrano to Investigation Counsel during the Investigation as of the Effective Date;
(d) any clawback rights reserved under Section 3.5 of this Agreement;
(e) any claims for injunctive relief, specific performance, or other equitable relief; and
(f) any claims arising from the revenue-recognition irregularities at VCR to the extent that Serrano's involvement in, knowledge of, or responsibility for those matters exceeds what has been disclosed by Serrano to Investigation Counsel as of the Effective Date.
VHG expressly reserves all rights to seek recovery, whether by civil action, counterclaim, cross-claim, third-party action, or otherwise, against Garrett W. Daskine, Nicole Prescott, the Shell Entities, and any other parties who may be involved in or responsible for the matters under investigation.
Section 5.3 — ADEA / OWBPA Compliance. To the extent that Serrano's release in Section 5.1 encompasses any claims under the Age Discrimination in Employment Act of 1967 ("ADEA"), the following provisions shall apply in accordance with the Older Workers Benefit Protection Act ("OWBPA"):
(a) Serrano acknowledges that he has been advised, and hereby is advised, to consult with an attorney prior to executing this Agreement.
(b) Serrano acknowledges that he has been given a period of at least twenty-one (21) days from the date of receipt of this Agreement within which to consider and review this Agreement before executing it. If Serrano elects to execute this Agreement prior to the expiration of the twenty-one (21) day consideration period, Serrano certifies that his decision to do so was knowing, voluntary, and not induced by fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of such period.
(c) Serrano shall have a period of seven (7) calendar days following his execution of this Agreement within which to revoke his release of ADEA claims by delivering written notice of revocation to Investigation Counsel. The release of ADEA claims shall not become effective or enforceable until such seven (7) day revocation period has expired without revocation (the "ADEA Effective Date").
(d) This Agreement does not waive or release any rights or claims under the ADEA that may arise after the date Serrano executes this Agreement.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.1 — Representations and Warranties by Serrano. Serrano hereby represents and warrants to VHG, the Audit Committee, and Investigation Counsel, as of the Effective Date, as follows:
(a) Full Disclosure. Serrano has made full and truthful disclosure to Investigation Counsel of all material facts within his knowledge relating to the matters under investigation, including without limitation the creation and processing of the forty-seven (47) fictitious purchase orders directed to the Shell Entities, his role as registered agent for Gulf Standard Contracting LLC (Florida Department of State Document No. L23000156789) and Clearwater Design Collective Inc. (Florida Department of State Document No. P22000084561), and his knowledge of the formation, beneficial ownership, and operations of Suncoast Property Services LLC, whose registered agent is Panhandle Agent Services Inc. and whose sole member is Garrett W. Daskine. Serrano has not knowingly withheld or concealed any material fact or circumstance relating to the matters under investigation.
(b) Preservation of Documents. Serrano has not destroyed, concealed, altered, mutilated, or tampered with any documents, records, electronically stored information, or tangible things relevant to the Investigation since becoming aware of the Investigation on or about August 7, 2023, the date of his placement on administrative leave, and has taken reasonable steps to preserve all such materials.
(c) Legal Capacity. Serrano has the legal capacity, competence, and authority to enter into this Agreement and to perform his obligations hereunder.
(d) Independent Counsel. Serrano has been represented by independent counsel, Marco A. Ruiz of Coletti & Ruiz PA, in negotiating, reviewing, and entering into this Agreement. Serrano has had a full and adequate opportunity to review and discuss the terms and conditions of this Agreement with his counsel. Serrano is not relying on any advice or representation of VHG, the Audit Committee, Investigation Counsel, or Crestline in entering into this Agreement.
(e) No Undisclosed Consideration. Serrano has not been promised, and has not received, any consideration, benefit, inducement, or compensation other than as expressly set forth in this Agreement in exchange for his cooperation, his execution of this Agreement, or his release of claims hereunder.
Section 6.2 — Representations and Warranties by VHG. VHG hereby represents and warrants to Serrano, as of the Effective Date, as follows:
(a) Authority. Patricia Navarro, as General Counsel of VHG, is duly authorized to negotiate and execute this Agreement on behalf of VHG and VCR, acting at the direction and with the approval of the Audit Committee.
(b) Authorization. The execution, delivery, and performance of this Agreement by VHG have been duly authorized by the Audit Committee, and no further corporate action or approval is required for VHG to enter into and perform its obligations under this Agreement.
(c) Valid and Binding Obligation. This Agreement constitutes a valid and binding obligation of VHG, enforceable against VHG in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
ARTICLE VII — BREACH AND REMEDIES
Section 7.1 — Material Breach by Serrano. A material breach of this Agreement by Serrano shall include, without limitation, any of the following:
(a) failure to cooperate fully, truthfully, and promptly as required by Article II of this Agreement;
(b) providing false, misleading, or materially incomplete information or testimony in connection with the Investigation or any Related Proceedings;
(c) destroying, concealing, altering, or tampering with documents, records, or other materials relevant to the Investigation;
(d) unauthorized disclosure of confidential information in violation of Section 2.7 or Section 8.1 of this Agreement; and
(e) communication with Garrett W. Daskine, Nicole Prescott, or their respective counsel regarding the subject matter of the Investigation in violation of Section 2.6 of this Agreement.
Upon a material breach of this Agreement by Serrano, VHG shall provide Serrano with written notice specifying the nature of the breach and, to the extent the breach is reasonably susceptible of cure, Serrano shall have a period of ten (10) business days from receipt of such notice within which to cure the breach. If the breach is not cured within such period, or if the breach is of a nature that is not susceptible of cure (including, without limitation, providing false testimony or destroying documents), VHG may, in its sole discretion, exercise any or all of the following remedies:
(i) reclassify Serrano's termination from a non-cause termination to a termination for cause, with retroactive effect to the Separation Date;
(ii) immediately cease payment of any unpaid separation benefits under Section 3.2;
(iii) seek repayment of all separation benefits previously paid to Serrano under Section 3.2, which amounts shall constitute a debt owed by Serrano to VHG;
(iv) revoke the release granted by VHG in Section 5.2 and pursue all claims, actions, and causes of action against Serrano arising from or related to the matters under investigation, including claims for the full amount of losses attributable to the fictitious purchase orders; and
(v) pursue any and all other remedies available at law or in equity, including claims for compensatory damages, consequential damages, and injunctive relief.
The remedies set forth in this Section 7.1 are cumulative and are in addition to any other remedies available to VHG under applicable law.
Section 7.2 — Determination of Breach. Any initial determination regarding whether a material breach has occurred shall be made by the Audit Committee in consultation with Investigation Counsel. The Audit Committee shall provide Serrano and Serrano's Counsel with a written statement setting forth the factual basis for its determination. Serrano shall have the right to challenge any such determination through the dispute-resolution procedures set forth in Article IX. Pending the resolution of any such dispute, VHG may suspend, but shall not be required to continue, payment of separation benefits under Section 3.2, and any amounts withheld shall be paid to Serrano with interest at the rate of five percent (5%) per annum if it is ultimately determined that no material breach occurred.
ARTICLE VIII — RESTRICTIVE COVENANTS
Section 8.1 — Confidentiality. Serrano shall not, during the Cooperation Period or at any time thereafter, use, disclose, or permit the disclosure of any Confidential Information (as defined below) of VHG, VCR, or any of their affiliates, except as required in connection with his cooperation obligations under Article II or as compelled by applicable law or legal process. For purposes of this Agreement, "Confidential Information" means all non-public information relating to VHG, VCR, and their affiliates, including without limitation trade secrets, proprietary business methodologies, financial data, financial projections, business strategies, marketing plans, customer lists, guest data, vendor relationships, pricing information, personnel information, information relating to the Investigation, and any other information that derives economic value from not being generally known to the public or to competitors. Confidential Information does not include information that (i) is or becomes publicly available through no fault of Serrano, or (ii) is required to be disclosed by applicable law, regulation, or legal process, provided that Serrano provides Investigation Counsel with prompt prior written notice of any such required disclosure to the extent legally permissible.
Section 8.2 — Non-Disparagement. Serrano shall not, during the Cooperation Period or at any time thereafter, make or publish, or cause or encourage any other person to make or publish, any statement, whether written or oral, that disparages, defames, or casts in an unfavorable light VHG, VCR, or any of their past, present, or future officers, directors, employees, agents, products, services, business practices, or reputation. VHG shall instruct its executive officers and directors not to make or publish, or cause or encourage any other person to make or publish, any statement, whether written or oral, that disparages, defames, or casts in an unfavorable light Serrano or his reputation; provided, however, that truthful statements made in connection with the Investigation, Related Proceedings, SEC filings, regulatory inquiries, court proceedings, or as otherwise required by law, regulation, or legal process shall not constitute a violation of this non-disparagement provision by either Party.
Section 8.3 — Protected Rights. Notwithstanding any other provision of this Agreement, nothing in this Agreement shall prohibit or restrict Serrano from:
(a) reporting possible violations of federal, state, or local law or regulation to any Government Authority, including the SEC, the DOJ, the IRS, or any state attorney general, or making any other disclosures that are protected under the whistleblower provisions of federal or state law;
(b) filing a charge with, or participating in any investigation or proceeding conducted by, any Government Authority, including the Equal Employment Opportunity Commission, the National Labor Relations Board, or any state or local human rights agency;
(c) making disclosures that are protected under the whistleblower provisions of federal securities laws, including Section 21F of the Securities Exchange Act of 1934 and Rule 21F-17 thereunder, or any other applicable whistleblower protection statute; Serrano is hereby notified that, pursuant to the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or that is made in a complaint or other document filed in a lawsuit or other proceeding if such filing is made under seal; or
(d) exercising any right that cannot be waived as a matter of applicable law.
Serrano shall not be required to notify VHG or Investigation Counsel prior to making any report or disclosure described in this Section 8.3.
ARTICLE IX — DISPUTE RESOLUTION
Section 9.1 — Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Florida, without giving effect to any choice-of-law or conflict-of-laws rules or provisions (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida. Notwithstanding the foregoing, questions relating to VHG's corporate governance, including indemnification and advancement of expenses, shall be governed by the General Corporation Law of the State of Delaware.
Section 9.2 — Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be resolved in accordance with the following procedures:
(a) Negotiation. The Parties shall first attempt to resolve the dispute through good-faith negotiation between their respective counsel, commencing upon written notice by one Party to the other Party describing the nature of the dispute in reasonable detail. The Parties shall negotiate in good faith for a period of not less than thirty (30) calendar days following the date of such notice.
(b) Binding Arbitration. If the dispute is not resolved through negotiation within the thirty (30) day period described above, either Party may submit the dispute to final and binding arbitration in Tampa, Florida, administered by JAMS (or, if JAMS is unavailable, by the American Arbitration Association) under the then-current JAMS Comprehensive Arbitration Rules and Procedures. The arbitration shall be conducted by a single neutral arbitrator selected by mutual agreement of the Parties or, if the Parties cannot agree, in accordance with the applicable rules of the arbitration organization. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could award, including compensatory damages, injunctive relief, and specific performance. The arbitrator's decision shall be final and binding, and judgment on the award may be entered in any court of competent jurisdiction. The arbitration proceedings and all related documents shall be treated as confidential by the Parties and the arbitrator.
Nothing in this Section 9.2 shall prevent either Party from seeking temporary restraining orders, preliminary injunctions, or other interim or provisional equitable relief in a court of competent jurisdiction to prevent irreparable harm pending the resolution of the dispute through arbitration.
Section 9.3 — Attorneys' Fees. In any arbitration, litigation, or other proceeding to enforce, interpret, or construe any provision of this Agreement, the substantially prevailing Party shall be entitled to recover from the non-prevailing Party its reasonable attorneys' fees and costs, including expert witness fees, arbitration fees, and costs of appeal, in addition to any other relief to which such Party may be entitled.
ARTICLE X — GENERAL PROVISIONS
Section 10.1 — Entire Agreement. This Agreement, together with any exhibits, schedules, or attachments hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, understandings, agreements, and communications, whether written or oral, between the Parties relating to the subject matter hereof. There are no representations, warranties, covenants, or agreements between the Parties with respect to the subject matter hereof other than those expressly set forth or referred to in this Agreement.
Section 10.2 — Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by both Parties. No oral modification or waiver of any provision of this Agreement shall be effective for any purpose.
Section 10.3 — Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is held by a court or arbitrator of competent jurisdiction to be invalid, illegal, or unenforceable for any reason, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect and shall be construed and enforced as if the invalid, illegal, or unenforceable provision had not been included herein. In the event that any provision is held to be overbroad or unreasonable in scope, duration, or geographic application, such provision shall be modified and construed to the minimum extent necessary to render it valid and enforceable.
Section 10.4 — Waiver. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or the right of such Party to enforce such provision at a later time. No waiver of any provision of this Agreement shall be effective unless such waiver is in writing and signed by the Party against whom the waiver is sought to be enforced. No single or partial exercise of any right or remedy shall preclude any other or further exercise thereof, or the exercise of any other right or remedy. No waiver of any breach of this Agreement shall constitute a continuing waiver or a waiver of any subsequent breach.
Section 10.5 — Notices. All notices, requests, demands, consents, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by registered or certified mail, postage prepaid, return receipt requested, (c) sent by a nationally recognized overnight courier service with tracking capability, or (d) sent by email with confirmation of receipt, to the following addresses (or to such other address as a Party may designate by written notice in accordance with this Section):
If to VHG:
Patricia Navarro, General Counsel Verimark Hospitality Group Inc. 4100 Bayshore Boulevard, Suite 1200 Tampa, Florida 33611
Email: pnavarro@verimarkhospitality.com
with a copy to (which shall not constitute notice):
Howard Quinn, Partner Calderwood & Harkness LLP 200 South Biscayne Boulevard, Suite 4400 Miami, Florida 33131
Email: hquinn@calderwoodharkness.com
Reference: Matter No. 1021-00008
If to Serrano:
Marco A. Ruiz, Esq. Coletti & Ruiz PA 2202 North Westshore Boulevard, Suite 200 Tampa, Florida 33607
Email: mruiz@colettiruiz.com
and to:
Ryan Mateo Serrano At the address on file with VHG's Human Resources Department
Section 10.6 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by facsimile, portable document format (PDF), or other electronic means shall be deemed to be, and shall have the same legal effect as, execution and delivery of an original signed copy.
Section 10.7 — Assignment. This Agreement is personal to Serrano and may not be assigned, transferred, or delegated by Serrano in whole or in part, whether by operation of law or otherwise, without the prior written consent of VHG. Any purported assignment by Serrano in violation of this provision shall be void and of no force or effect. VHG may assign its rights and obligations under this Agreement to any successor entity, whether by merger, consolidation, reorganization, sale of all or substantially all of its assets, or otherwise, without the consent of Serrano; provided that any such assignee shall assume all of VHG's obligations under this Agreement.
Section 10.8 — Third-Party Beneficiaries. Except as expressly provided in this Section, nothing in this Agreement is intended to, or shall be construed to, confer upon any person other than the Parties any right, benefit, or remedy of any kind. The individual members of the Audit Committee (Diane Kowalski, Reginald Faulkner, and Sandra Yeung, and any successors thereto), Calderwood & Harkness LLP, and Crestline Forensic Advisory LLC are intended third-party beneficiaries of Serrano's release set forth in Section 5.1 and Serrano's cooperation obligations set forth in Article II, and shall be entitled to enforce such provisions as if they were parties to this Agreement; provided, however, that no such third-party beneficiary is a party to this Agreement and no such third-party beneficiary shall have any rights under any other provision of this Agreement.
Section 10.9 — Survival. The provisions of Article II (Cooperation Obligations), Article V (Mutual Releases), Article VI (Representations and Warranties), Article VII (Breach and Remedies), Article VIII (Restrictive Covenants), and Article IX (Dispute Resolution) shall survive the expiration of the Cooperation Period and the termination or expiration of this Agreement for any reason, and shall remain in full force and effect in accordance with their respective terms.
Section 10.10 — Construction. This Agreement has been negotiated by the Parties and their respective counsel and shall not be construed against either Party as the drafter. The headings and captions used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any provision hereof. References to "Sections" and "Articles" are to sections and articles of this Agreement unless otherwise specified. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." References to the singular include the plural and vice versa, and references to any gender include all genders.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have executed this Cooperation Agreement as of the date first written above.
VERIMARK HOSPITALITY GROUP INC.
By: ________
Name: Patricia Navarro
Title: General Counsel
Date: November 15, 2023
COOPERATING PARTY
________________________________________
Ryan Mateo Serrano
Date: November 15, 2023
ACKNOWLEDGED AND CONSENTED TO BY SERRANO'S COUNSEL:
________________________________________
Marco A. Ruiz, Esq. Coletti & Ruiz PA 2202 North Westshore Boulevard, Suite 200 Tampa, Florida 33607
Date: November 15, 2023
APPROVED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF VERIMARK HOSPITALITY GROUP INC.:
________________________________________
Diane Kowalski
Title: Chair, Audit Committee
Date: November 15, 2023

COOPERATION AGREEMENT

VERIMARK HOSPITALITY GROUP INC.

RYAN MATEO SERRANO

COOPERATION AGREEMENT

RECITALS

WHEREAS:

VERIMARK HOSPITALITY GROUP INC.

COOPERATING PARTY

ACKNOWLEDGED AND CONSENTED TO BY SERRANO'S COUNSEL:

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