Contract analysis

Section 1: Overview of the D&O Insurance Tower 1.1 Tower Structure Summary The D&O insurance program placed in connection with the IPO consists of a three-carrier tower providing an aggregate total tower limit of $100,000,000. The tower is structured as follows: The Primary Policy has an effective date of February 8, 2024, coinciding with the date the Registration Statement was declared effective by the Securities an

Section 2: Insuring Agreements — Side A/B/C Coverage Structure The Primary Policy provides coverage under three distinct insuring agreements, commonly referred to as "Side A," "Side B," and "Side C." Each insuring agreement covers a different category of loss and has different features regarding applicability of retentions, priority of payment, and the identity of the covered party. We discuss each in turn. 2.1 Side

Section 3: Key Policy Definitions The scope and effectiveness of any D&O policy depend critically on the breadth and precision of its key defined terms. We have reviewed the following definitions in the Primary Policy and offer the following observations and recommendations. 3.1 "Insured Persons" The Primary Policy defines "Insured Persons" to include all past, present, and future directors, officers, and equivalent

Section 4: Claims-Made Basis and Reporting Requirements 4.1 Claims-Made and Reported Policy Structure The Primary Policy is written on a claims-made and reported basis. This is standard for D&O insurance and means that coverage applies only to claims that satisfy two temporal requirements: (a) the claim must be first made against an insured person during the policy period (February 8, 2024 through February 8, 2025);

Section 5: Retroactive Date and Prior Acts 5.1 Retroactive Date Every claims-made D&O policy includes a retroactive date (sometimes referred to as the "prior acts date"), which establishes the temporal boundary for covered wrongful acts. Only wrongful acts that occur on or after the retroactive date are eligible for coverage under the policy. Wrongful acts that occurred before the retroactive date are excluded, regar

Section 6: Key Exclusions D&O policies contain a series of exclusions that narrow the scope of coverage. Exclusions define the boundaries of what the policy will not cover, and in many coverage disputes, the insurer's defense is grounded in one or more policy exclusions. We have reviewed the principal exclusions in the Primary Policy and offer the following observations and recommendations. 6.1 IPO-Specific Exclusion

Section 7: Defense and Settlement Provisions 7.1 Duty to Defend vs. Non-Duty-to-Defend (Reimbursement) Policy D&O policies are typically structured as non-duty-to-defend or "pay on behalf of" policies. Under this structure, unlike a general liability policy where the insurer assumes the obligation to defend the insured and selects defense counsel, the insured retains the right and responsibility to select and retain

Section 8: Subrogation Waivers Standard D&O policies include subrogation rights that entitle the insurer, after paying a covered claim, to step into the shoes of the insured and pursue recovery against third parties responsible for the loss. While subrogation rights are a standard feature of insurance contracts, in the D&O context, it is important that the insurer waive its subrogation rights against the Company and

Section 9: Change of Control Provisions The Primary Policy is expected to contain a change of control provision that addresses the effect on coverage of a fundamental change in the ownership or structure of AHT. Typically, upon the occurrence of a "change of control" event — such as a merger, acquisition, consolidation, or sale of substantially all of the Company's assets — the policy automatically converts to a run-

Section 10: Application Warranty and Severability 10.1 Application as Warranty The policy application submitted in connection with the Primary Policy, which was signed by an authorized officer of AHT (we understand this to be David Halderman, Chief Financial Officer, or Rachel Moynihan, General Counsel and Corporate Secretary), serves as a warranty of the accuracy and completeness of all statements made therein. The