Contract analysis

I. EXECUTIVE SUMMARY Calderwood & Harkness LLP has been retained by Arbor Health Technologies Inc. ("AHT" or the "Company"), a Delaware corporation headquartered at 230 Federal Street, Suite 1400, Boston, Massachusetts 02110, to evaluate and pursue claims against Desmond R. Farris ("Farris"), AHT's former Chief Revenue Officer, arising from multiple breaches of his Separation Agreement and General Release dated Augus

II. FACTUAL BACKGROUND A. The Parties

1. Arbor Health Technologies Inc. Arbor Health Technologies Inc. is a corporation organized under the laws of the State of Delaware, qualified to do business in the Commonwealth of Massachusetts, and headquartered at 230 Federal Street, Suite 1400, Boston, Massachusetts 02110. AHT's federal Employer Identification Number is 84-3291057. Its registered agent in Delaware is National Registered Agents Inc., located at 16

2. Desmond R. Farris Desmond Reese Farris (date of birth: March 14, 1978) resides at 47 Briarcliff Lane, Wellesley, Massachusetts 02481. Farris served as Chief Revenue Officer of AHT from September 8, 2020 through August 9, 2024. As CRO, Farris was a member of AHT's executive leadership team and reported directly to CEO Dr. Johansson. In his role, Farris was responsible for all revenue-generating activities, includin

3. Meridian Healthworks, Inc. Meridian Healthworks, Inc. is a Delaware corporation headquartered in Cambridge, Massachusetts. Meridian is a direct competitor of AHT in the healthcare information technology and population health analytics market. According to publicly available information, Meridian's estimated fiscal year 2024 revenue is approximately $135 million in annual recurring revenue. Meridian's Chief Executi

1. Phase 1 — Social Media Disparagement (November 2024 – February 2025) On November 3, 2024, approximately two months after the Effective Date of the Separation Agreement and approximately two weeks after commencing employment at Meridian Healthworks, Farris published the following post on his Westmark Health IT profile, which is publicly accessible and had approximately 12,400 followers at the time: "I spent four ye

2. Phase 2 — Podcast Appearances (January – March 2025) In addition to his social media activity, Farris made two guest appearances on industry podcasts, during which he made additional disparaging and confidential disclosures. On January 15, 2025, Farris appeared as a guest on The Digital Health Download, a healthcare technology industry podcast with approximately 28,000 monthly listeners. During the interview, Farr

3. Phase 3 — Client Solicitation (October 2024 – Present) Following his hiring by Meridian Healthworks on October 21, 2024, Farris personally contacted at least four AHT enterprise clients in an effort to solicit their business on behalf of Meridian. Each of the four entities was an AHT customer during the twelve months preceding the Effective Date of the Separation Agreement and therefore falls within the definition

4. Phase 4 — Employee Solicitation (Suspected) In addition to soliciting AHT's clients, Farris is believed to have solicited at least two AHT employees in violation of § 9 of the Separation Agreement. On February 10, 2025, Renata Solis, Senior Sales Director at AHT, resigned her position. On February 24, 2025, Jerome Ashworth, also a Senior Sales Director at AHT, resigned. Both Solis and Ashworth subsequently joined

5. Additional Reputational Harm Beyond the direct client and employee losses described above, Farris's public statements have caused measurable harm to AHT's sales pipeline and market reputation. AHT's sales pipeline conversion rate — the percentage of qualified pipeline opportunities that convert to signed contracts — declined from 34% in the third quarter of fiscal year 2024 (the last full quarter before Farris's p

III. ANALYSIS OF CLAIMS A. Count I: Breach of Contract — Non-Disparagement (Separation Agreement § 6)

1. Elements Under Massachusetts Law To prevail on a claim for breach of contract under Massachusetts law, a plaintiff must establish: (1) the existence of a valid and binding contract; (2) a specific obligation under the contract; (3) breach of that obligation by the defendant; and (4) damages resulting from the breach. See Singarella v. City of Boston, 342 Mass. 385, 387 (1961); Brooks v. Vireo Assurance SunAmerica

2. Application to Facts Valid and binding contract. The Separation Agreement is a valid, binding contract between AHT and Farris. It was executed by both parties, supported by adequate consideration of $1,016,866 (substantially exceeding anything Farris was entitled to receive absent the agreement), and complies with all applicable legal requirements, including the OWBPA/ADEA consideration and revocation periods. Far

3. Likelihood of Success We assess the likelihood of success on Count I as strong. The contractual language is clear and unambiguous. Farris's statements are not subject to reasonable interpretive dispute — they are plainly disparaging by any ordinary reading. The evidentiary record is robust, consisting of preserved screenshots, audio recordings, and transcripts. Massachusetts courts have consistently enforced non-d

1. Elements. The elements of this claim are the same as for Count I: valid contract, specific obligation, breach, and damages. The applicable contractual provision is § 7 (Confidentiality) rather than § 6 (Non-Disparagement).

Section 7 of the Separation Agreement obligates Farris to maintain in strict confidence all Confidential Information, as defined, for a period of five years following the Effective Date — through August 30, 2029. The definition of Confidential Information expressly encompasses client-specific pricing, financial results and projections, and other proprietary business data. Farris has breached § 7 on at least three occ

3. Likelihood of Success We assess the likelihood of success on Count II as very strong. The information disclosed by Farris falls squarely within the express definition of Confidential Information. There is no ambiguity about whether client-specific pricing data and financial performance metrics constitute confidential information — they are the paradigmatic examples. Farris had no authorization to disclose this inf

1. Elements. To prevail on a claim for breach of a non-solicitation covenant, AHT must establish: (1) the existence of a valid and enforceable restrictive covenant; (2) that the defendant engaged in solicitation activity prohibited by the covenant; (3) that the solicitation occurred within the restricted period; and (4) damages resulting from the breach. The enforceability analysis under Massachusetts law requires co

2. Application to Facts The non-solicitation of clients covenant in § 8 prohibits Farris from soliciting, diverting, or servicing any "Client" — defined as any AHT customer during the twelve months preceding the Effective Date or any active prospective customer in AHT's pipeline as of the Effective Date — for a period of twenty-four months following the Effective Date (through August 30, 2026). Each of the four docum

3. Enforceability Under Massachusetts Law Massachusetts law on restrictive covenants has been significantly clarified by the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149, § 24L (effective October 1, 2018). However, as an initial matter, it is important to note that § 24L principally governs "noncompetition agreements" — defined as agreements that restrict an individual from engaging in competitive activi

4. Likelihood of Success We assess the likelihood of success on Count III as strong. The documentary evidence of direct solicitation is compelling — a written email, Westmark Health IT messages, a confirmed phone call, and a documented in-person meeting. The definition of "Client" is clear and is matched by verifiable customer relationships. The confirmed business losses at Northbridge and Lakeview provide tangible e

Section 9 of the Separation Agreement prohibits Farris from recruiting, soliciting, or hiring any AHT employee, or encouraging any AHT employee to leave the Company, for the same twenty-four month restricted period (through August 30, 2026). Two senior AHT sales directors — Renata Solis and Jerome Ashworth — resigned from AHT on February 10 and February 24, 2025, respectively. Both joined Meridian Healthworks shortly

2. Evidentiary Considerations The strength of Count IV depends in significant part on the content and authentication of the text messages between Farris and Solis and Ashworth. Several evidentiary considerations are relevant: • Authentication: The text messages must be properly authenticated under Massachusetts Rules of Evidence. AHT possesses copies of the messages as provided by Solis (who retained them on her pers

3. Likelihood of Success We assess the likelihood of success on Count IV as moderate to strong. The text messages, if authenticated and if their content confirms active solicitation by Farris, will provide direct evidence of breach. The circumstantial evidence — two former direct reports resigning within two weeks of each other and both joining Farris's new employer — is itself suggestive. The strength of this count

1. Elements. The Massachusetts Trade Secrets Act, M.G.L. c. 93, §§ 42–42G (the "MTSA"), provides a cause of action for misappropriation of trade secrets. To establish a claim under the MTSA, a plaintiff must demonstrate: (1) the existence of a "trade secret" as defined by the statute; (2) "misappropriation" of that trade secret (through improper acquisition, disclosure, or use); and (3) damages resulting from the mis

2. Application to Facts The information disclosed by Farris falls within the statutory definition of trade secrets. Specifically: • Client-specific pricing data ($4.3M ACV for a top-5 health system client): Client-specific contract values are paradigmatic trade secrets. This information derives independent economic value from its confidentiality — knowledge of AHT's pricing enables competitors to undercut its rates a

3. Additional Remedies Available The MTSA provides enhanced remedies beyond ordinary breach of contract damages: • Injunctive relief: M.G.L. c. 93, § 42A authorizes courts to grant injunctive relief to prevent actual or threatened misappropriation. • Damages: M.G.L. c. 93, § 42B provides for recovery of both actual loss caused by misappropriation and unjust enrichment caused by misappropriation that is not taken into

4. Likelihood of Success We assess the likelihood of success on Count V as moderate to strong. The key litigation issue will be whether AHT took "reasonable measures" to protect the secrecy of the disclosed information and whether the information constitutes a "trade secret" as opposed to general industry knowledge. Client-specific pricing data and detailed financial metrics (churn rate, gross margin) are strong cand

1. Elements Under Massachusetts Law Under Massachusetts law, a claim for tortious interference with business relations requires: (1) the existence of a business relationship or a reasonably anticipated business relationship between the plaintiff and a third party; (2) the defendant's knowledge of that relationship; (3) the defendant's intentional and improper interference with that relationship; and (4) actual loss o

2. Application to Facts Existing business relationships. AHT had existing contractual relationships with each of the four solicited clients: Lakeview Regional Health System ($4.3M ACV), Prairieland Medical Group ($2.1M ACV), Summit Atlantic Health Partners ($3.7M ACV), and Northbridge Community Health Network ($1.6M ACV). These were active, revenue-generating customer relationships governed by multi-year agreements.

4. Likelihood of Success We assess the likelihood of success on Count VI as strong, particularly as to the four solicited clients with documented contacts and resulting business losses. The evidence of intentional, targeted solicitation of known AHT clients using improper means (breach of contract, use of confidential information, and publication of false statements) is well-documented. The causal connection between

1. Elements. Under Massachusetts law, a claim for defamation requires: (1) a false and defamatory statement of fact concerning the plaintiff; (2) publication of the statement to one or more third parties; (3) fault on the part of the defendant (at minimum, negligence; actual malice if the plaintiff is a public figure or the statement involves a matter of public concern); and (4) either damages presumed by law (defama

2. Application to Facts — Specific False Statements AHT should focus its defamation claim on statements by Farris that are demonstrably false assertions of fact, as distinguished from expressions of opinion or rhetorical hyperbole. The strongest candidates are: • Churn rate claim (December 12, 2024 X post): Farris stated that AHT's churn rate is "14% and climbing." AHT's actual FY 2024 gross logo churn rate is 8.2%,