Contract analysis

From: Christopher Aiken <caiken@calderwoodharkness.com> To: "Marcus D. Pruitt" <mpruitt@thornwick.org> Cc: Joel Strauss <jstrauss@calderwoodharkness.com> Date: Thu, 12 Feb 2026 05:47:00 -0000 Subject: Cadence-3 CTA — Summary of Today's Indemnification Negotiation Call with Pemberton, Yates & Caldwell

I hope this message finds you well. I am writing to provide a summary of this afternoon's negotiation call regarding the indemnification provisions of the Clinical Trial Agreement ("CTA") between Thornwick Medical Research Institute, Inc. ("TMRI") and Hargrove University Medical Center, Inc. ("HUMC") for the Cadence-3 Trial (ThornValve MV-200 System). **Matter No. 1029-00001.**

Participating on the call were Amy Whitfield and me on behalf of TMRI, and Rebecca S. Norcross (Partner) and Daniel F. Huang (Associate) of Pemberton, Yates & Caldwell LLP on behalf of HUMC. The call lasted approximately 75 minutes and covered each of the contested indemnification terms flagged in HUMC's February 7, 2026 redline. Below is a detailed summary of each issue, the parties' respective positions, and our re

**1. Indemnification Cap — Area of Movement**

TMRI's current draft provides for an aggregate indemnification cap of $10,000,000, which is aligned with the per-occurrence limit under TMRI's clinical trial liability policy with Commonwealth Specialty Underwriters, Inc. (Policy No. CTL-2025-08843). HUMC's February 7 redline proposed removal of the cap entirely or, in the alternative, an increase to $25,000,000 to match TMRI's aggregate policy limit.

On today's call, HUMC's counsel showed meaningful flexibility on this issue. Rebecca Norcross indicated that HUMC would be willing to consider a compromise cap of **$15,000,000**. HUMC's rationale is that $15M sits between the per-occurrence and aggregate limits and provides the institution with adequate protection for a 45-subject feasibility study involving a transcatheter cardiac device with inherent procedural ri

**Recommendation:** We believe the $15,000,000 cap is acceptable and recommend that TMRI agree to it. The cap remains well within the $25,000,000 aggregate coverage under the Commonwealth Specialty policy and represents a significant reduction from HUMC's opening position. From a risk standpoint, multiple per-occurrence claims exceeding $10M on a 45-subject trial would be unusual, and the higher cap provides HUMC wit

**2. Indemnification Scope — HUMC Remained Firm**

TMRI's draft limits indemnification to claims arising from (a) the design, manufacture, or inherent defect of the ThornValve MV-200 System, and (b) TMRI's negligence or willful misconduct. HUMC's redline broadened the scope to cover all claims "arising out of or relating to" the investigational device, without limitation to design, manufacture, or defect.

HUMC was firm on broadening the scope. Norcross argued that an investigator-initiated trial involving a novel transcatheter device presents risks that extend beyond manufacturing defects — including, for example, risks related to device instructions for use, training materials, labeling, or unforeseen device-tissue interactions — and that the narrower formulation would leave meaningful coverage gaps for the site. HUM

**Recommendation:** We suggest TMRI consider accepting a moderately broadened scope formulation — for example, indemnification for claims "arising out of the design, manufacture, labeling, or use of the ThornValve MV-200 System in accordance with the Protocol." This language captures HUMC's legitimate concern about device-related risks beyond pure manufacturing defects (such as labeling inadequacies or unanticipated

TMRI's draft requires 15 business days for written notice of a claim. HUMC's redline extends the notice period to 30 business days.

This issue was discussed briefly on the call; neither side appeared to view it as a dealbreaker.

**Recommendation:** We propose a compromise of **20 business days**. This is consistent with the standard we see in comparable academic medical center CTAs and should be readily acceptable to both parties.

**4. Defense Control and Right to Participate with Separate Counsel**

TMRI's draft provides TMRI with the sole right to control the defense and settlement of indemnified claims. HUMC's redline adds a right for HUMC to participate in the defense with separate counsel at TMRI's expense if a conflict of interest exists between TMRI and HUMC in the defense of a claim.

HUMC was firm on this point. Norcross characterized the right to participate with separate counsel as a non-negotiable institutional policy for HUMC.

**Recommendation:** This is a common provision in clinical trial agreements with academic medical centers, and we do not believe it presents an unreasonable risk to TMRI. We suggest TMRI accept HUMC's right to participate with separate counsel, but propose two qualifications: (1) the right should be triggered only where an **actual** (not merely potential) conflict of interest exists, and (2) the reasonable fees and

TMRI's draft provides that HUMC will indemnify TMRI for claims arising from HUMC's or the PI's negligence, applying an ordinary negligence standard. HUMC's redline limits HUMC's indemnification obligation to claims arising from HUMC's **gross negligence or willful misconduct**.

This issue was discussed but not resolved. Norcross indicated that the gross negligence/willful misconduct standard is consistent with Hargrove University's standard institutional policy and that HUMC is unlikely to move to an ordinary negligence standard.

**Recommendation:** We recommend that TMRI consider accepting the gross negligence/willful misconduct standard for HUMC's indemnification obligation. While the higher threshold does narrow the circumstances under which TMRI could seek indemnification from HUMC, this standard is common at large academic institutions, and the practical risk is substantially offset by HUMC's professional liability coverage through Pinna

Subject to your approval of the recommendations above, our team will prepare a **revised second draft of the CTA by Saturday, February 14, 2026**, incorporating the compromise positions outlined in this email.

To stay on schedule, we would appreciate it if Marcus and Elaine could **confirm TMRI's comfort level with the proposed compromises by close of business tomorrow, Friday, February 13**. In particular, we are looking for direction on the following three items:

- Acceptance of the **$15,000,000 indemnification cap**; - Acceptance of the **broadened indemnification scope** with the Protocol-compliance qualifier; and - Acceptance of the **gross negligence/willful misconduct standard** for HUMC's mutual indemnification obligation.

Please note that the **IP ownership, licensing, and publication rights provisions** remain open and will be addressed in a separate negotiation session, which we anticipate scheduling for the week of February 17.

As a reminder, the **target execution date for the CTA remains March 2, 2026**. Timely resolution of the indemnification provisions is critical to staying on track for the IDE supplement filing deadline of **March 15, 2026** (IDE G260012), and the estimated first patient enrollment of **April 7, 2026**.

I am available to discuss any of the above by phone tomorrow morning if that would be helpful. Amy Whitfield is also preparing an updated comparison chart tracking each party's positions alongside our recommended compromises, which will accompany the second draft for your review.

Please do not hesitate to reach out with any questions or concerns in the meantime.

**Christopher Aiken** Associate Calderwood & Harkness LLP One Post Office Square, Suite 4100 Boston, MA 02109 T: (617) 555-2840 F: (617) 555-2841 E: caiken@calderwoodharkness.com

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