1010-00004 · Arbor Health Technologies Inc · Engagement & Administration

engagement-letter-aht-executed.docx DOCUMENT Funds

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CALDERWOOD & HARKNESS LLP Attorneys at Law

One International Place, Suite 3400 Boston, Massachusetts 02110

Telephone: (617) 555-8200 Facsimile: (617) 555-8201 www.calderwoodharkness.com

July 13, 2022

VIA ELECTRONIC MAIL AND HAND DELIVERY

Aaron Whitfield, Esq. General Counsel Arbor Health Technologies Inc. 400 Brattle Commerce Park, Suite 1200 Cambridge, MA 02138

Re: Engagement of Calderwood & Harkness LLP — Executive Employment Agreement Package for Dr. Marcus J. Elliston, Prospective Chief Operating Officer

Our Matter No.: 1010-00004 Our Client No.: 81-30294

Dear Mr. Whitfield:

We are pleased to confirm that Arbor Health Technologies Inc. ("AHT" or the "Company"), a Delaware corporation with its principal offices located in Cambridge, Massachusetts, has engaged Calderwood & Harkness LLP ("the Firm," "we," "us," or "C&H") to represent the Company in connection with the matters described below. This letter sets forth the terms and conditions of our engagement and is intended to memorialize the understanding between the Company and the Firm regarding the scope of our representation, our fees and billing arrangements, and other matters relevant to this engagement. We ask that you review this letter carefully, and if you are in agreement with its terms, that you sign and return the enclosed copy to our offices at your earliest convenience.

1. Purpose and Scope of Engagement

The Company has retained the Firm to represent AHT in connection with the drafting, negotiation, and finalization of a comprehensive executive employment agreement package for Dr. Marcus J. Elliston (the "Executive"), who is being recruited to serve as Chief Operating Officer of Arbor Health Technologies Inc. In that capacity, Dr. Elliston would report directly to the Company's Chief Executive Officer, Priya Chandrasekaran. It is our understanding that Dr. Elliston's proposed start date is November 1, 2022, and that the Company desires to have the full employment agreement package executed in advance of that date to allow for orderly onboarding and transition from the Executive's current employer.

The scope of our engagement in this matter encompasses the following:

(a) Executive Employment Agreement. Drafting of a comprehensive Executive Employment Agreement, including all schedules and exhibits thereto, which shall include, without limitation, a position description and statement of duties, a prior inventions disclosure form, and a form of general release of claims to be executed by the Executive in connection with any future separation from the Company.

(b) Employee Non-Competition Agreement. Drafting of a standalone Employee Non-Competition Agreement designed to comply in all material respects with the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149, § 24L, including the statutory requirements for garden leave pay or other mutually agreed-upon consideration, the twelve-month maximum duration limitation, and the requirement that the agreement be supported by independent consideration where it is entered into after the commencement of employment. The agreement will also address the related non-solicitation and non-disclosure covenants that are customary for a C-suite executive in the life sciences and health technology industry.

(c) Equity Award Agreements. Drafting of equity award agreements, specifically a stock option award agreement and a restricted stock unit ("RSU") award agreement, each to be granted under the AHT 2020 Equity Incentive Plan, as amended in May 2021 (the "Equity Plan"), and to incorporate the terms and conditions of the Equity Plan. These agreements will address vesting schedules, treatment upon termination of employment and change in control, exercise mechanics (in the case of stock options), and such other terms as the Company's Board of Directors or Compensation Committee may direct.

(d) Massachusetts Employment Law Compliance. Analysis of and advice regarding the Company's compliance with Massachusetts employment law as it relates to the Executive's employment, including but not limited to the Massachusetts Wage Act (M.G.L. c. 149, §§ 148–150), the enforceability of non-solicitation and non-competition provisions under Massachusetts law, and the procedural and substantive requirements governing restrictive covenants applicable to employees in the Commonwealth.

(e) Federal Tax Matters. Analysis of and advice regarding federal tax matters related to the Executive's compensation package, including compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to any deferred compensation elements of the Executive's arrangement, and a preliminary analysis under Sections 280G and 4999 of the Code (the so-called "golden parachute" provisions) to assess whether any payments to the Executive upon a change in control of the Company could give rise to excise tax liability and non-deductibility, and to advise on potential mitigation strategies, including "best-net" cutback provisions or gross-up arrangements.

(f) Negotiation with Executive's Counsel. Negotiation of the terms of the employment agreement package with the Executive's personal counsel, Fielding & Rowe LLP, represented by Catherine A. Fielding, Partner, on behalf of the Company. We anticipate that the negotiation process will involve the exchange of redlined drafts, telephone conferences, and potentially one or more in-person sessions, and we will keep the Company apprised of the status of negotiations on a regular basis.

(g) Coordination with Corporate Counsel. Coordination, as needed and at the Company's direction, with AHT's regular outside corporate counsel, Wentworth & Gage LLP, represented by Richard D. Gage, Partner, regarding background corporate governance documents, existing equity incentive plan provisions and any plan amendments that may be required, the Company's Certificate of Incorporation and Bylaws, and the terms and conditions of the Ridgeline Capital Partners Stockholders' Agreement (including any consent or approval rights that may be implicated by the appointment of a new Chief Operating Officer or the grant of equity awards of the magnitude contemplated).

(h) Coordination with Tax/Accounting Advisors. Coordination, as needed, with the Company's tax and accounting advisors, Hargrove & Sinclair CPAs, represented by Malcolm R. Sinclair, CPA, regarding the quantitative aspects of any Section 280G and Section 409A analysis, including the calculation of the Executive's base amount, the determination of parachute payment values, and the modeling of various compensation scenarios.

It is important that we clearly define the boundaries of this engagement. The engagement described in this letter does not include representation of AHT in any litigation, arbitration, regulatory investigation or proceeding, corporate transaction (including, without limitation, any merger, acquisition, financing, or recapitalization), intellectual property matter, or any other legal matter falling outside the specific scope described above, unless the Company and the Firm separately agree in writing to expand the scope of this engagement or to establish a new engagement for such additional matters.

In addition, please note that the scope of this engagement does not extend to the representation of any individual officer, director, employee, or stockholder of AHT in his or her personal capacity, nor does it extend to the representation of Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, or any of their respective affiliates, general partners, limited partners, portfolio companies, or representatives. Each of these persons and entities should retain separate counsel as needed with respect to any matters arising from or related to the Executive's employment or the transactions contemplated by this engagement.

2. Engagement Team and Staffing

The Firm has assembled a team of experienced attorneys to handle this matter efficiently and effectively. The members of the core engagement team, and their respective roles, are as follows:

Bernard Crawford — Partner, Labor & Employment Group. Mr. Crawford will serve as the Responsible Partner for this engagement and will be your primary point of contact for strategic and substantive matters. Mr. Crawford has over twenty-five years of experience representing public and private companies in the negotiation and documentation of executive employment arrangements, with particular expertise in the life sciences and technology sectors.

Renata Vasquez — Partner, Labor & Employment Group. Ms. Vasquez will serve as the Billing Partner for this engagement and will be the primary contact for billing, administrative, and staffing matters. Ms. Vasquez will also contribute substantive work on an as-needed basis, particularly with respect to Massachusetts employment law compliance and restrictive covenant analysis.

Devon Archer — Associate, Labor & Employment Group. Mr. Archer will serve as the Lead Associate on this engagement and will be responsible for the day-to-day drafting of the employment agreement package and for serving as the lead negotiator in communications with the Executive's counsel, under the supervision of Mr. Crawford.

Nadia Petrov — Associate, Labor & Employment Group. Ms. Petrov will provide research, compliance analysis, and drafting support throughout the engagement. Ms. Petrov has significant experience with Massachusetts Wage Act compliance and restrictive covenant analysis and will be principally responsible for the initial drafts of the non-competition agreement and the compliance memoranda.

In addition to the core engagement team, the following Firm attorneys may be consulted on specific aspects of the engagement as needed:

Gregory Tan — Partner, Tax Group. Mr. Tan will provide advice on equity compensation structuring, Section 409A compliance, and Section 280G/4999 analysis. Mr. Tan's involvement is anticipated to be focused during the initial structuring phase and during any negotiations regarding change-in-control and severance provisions.

Sandra Okafor — Counsel, Corporate/M&A Group. Ms. Okafor will provide assistance with the review of change-in-control provisions as they intersect with the Company's corporate governance documents, the interpretation of the Equity Plan, and the analysis of the interaction between the employment agreement package and the Ridgeline Capital Partners Stockholders' Agreement.

The Firm may assign additional attorneys or paraprofessionals (including legal assistants, law clerks, and contract attorneys) to this matter as reasonably necessary to ensure the efficient and timely completion of the work. We will notify you of any material changes to the composition of the core engagement team, including the departure of any team member from the Firm or the reassignment of primary responsibilities.

3. Client Identification

We wish to confirm that the Firm's client in this matter is Arbor Health Technologies Inc., the corporate entity, and not any individual officer, director, employee, or agent of the Company. Without limitation, our client is not any individual board member, including Thomas R. Glenwood (Board Chair), nor any stockholder or investor of the Company, including Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, or any of their respective affiliates, general partners, limited partners, or representatives. This clarification is important because, in matters involving executive compensation, the interests of the corporate entity, its management, its board of directors, and its stockholders may not always be perfectly aligned, and we want to ensure that there is no misunderstanding regarding whom we represent.

The Company's primary contacts for this engagement are Aaron Whitfield, General Counsel, and Lisa Murakami, Chief Human Resources Officer. We will direct the substance of our communications to Mr. Whitfield and Ms. Murakami unless otherwise instructed by the Company. We understand that Mr. Whitfield has the authority to direct our work, approve expenditures, and make decisions on behalf of the Company in connection with this engagement, subject to such internal approvals as may be required by the Company's own governance procedures.

We further understand that, in the course of this engagement, it may be necessary or desirable for the Firm to communicate with Thomas R. Glenwood, in his capacity as Board Chair and as the representative of Ridgeline Capital Partners on the Company's Board of Directors, and with other members of the Board of Directors or the Compensation Committee, regarding the terms of the Executive's employment package. Any such communications will be undertaken at the direction of the General Counsel and will be made on behalf of the Company as our client. Mr. Glenwood and the other Board members should understand that the Firm does not represent them individually and that our duty of loyalty runs to the Company.

4. Fees and Billing Arrangements

The Firm will bill for services rendered in connection with this engagement on an hourly basis at the following current standard rates for each timekeeper assigned to this matter:

These hourly rates are subject to periodic adjustment, which typically occurs on an annual basis, effective January 1 of each calendar year. We will notify the Company in advance of any changes to the rates of the timekeepers assigned to this matter, and any adjusted rates will apply only to time incurred after the effective date of the adjustment.

Based on the Firm's experience with executive employment engagements of comparable complexity in the life sciences and health technology sector, and taking into account the scope of work described in Section 1 above, we estimate that the total professional fees for this engagement will be in the range of $85,000 to $125,000. This estimate assumes a moderate level of negotiation with the Executive's personal counsel; a typical level of interaction with the Company's corporate counsel and tax advisors; and that the transaction proceeds in substantially the manner currently contemplated. We emphasize that this figure is an estimate only and is provided for budgeting and planning purposes. It is not a cap on fees, a fixed fee, or a "not-to-exceed" amount. Actual fees may be higher or lower than the estimated range depending on a number of factors that are difficult to predict at the outset of the engagement, including the extent and complexity of negotiations with the Executive's counsel, the number and nature of client-requested revisions to the documentation, the complexity of the tax analysis (particularly the Section 280G modeling), the level of coordination required with the Company's other advisors, and other factors beyond the Firm's control. We will endeavor to keep you apprised of fee accumulation relative to the estimate, and we encourage you to contact Ms. Vasquez at any time if you have questions regarding fees or billing.

In addition to professional fees, the Firm will bill the Company for reasonable out-of-pocket disbursements incurred in connection with this engagement. Such disbursements may include, without limitation, document reproduction and printing charges, messenger and courier services, travel expenses (if any, which we do not currently anticipate), electronic research charges (e.g., Westmark Data Systems, Calderon Systems, Cascade Services Inc.), filing fees, and similar costs. All disbursements will be billed at the Firm's actual cost, without markup.

Invoices will be rendered on a monthly basis, generally within fifteen (15) business days following the end of each calendar month, and will set forth in reasonable detail the services performed by each timekeeper, the hours expended, and any disbursements incurred during the billing period. Payment of each invoice is due within thirty (30) calendar days of the invoice date. Invoices should be remitted to Renata Vasquez at the Firm's address set forth above, or by wire transfer pursuant to instructions that will be provided upon request.

In the event that any invoice remains unpaid for more than sixty (60) days after its due date, the Firm reserves the right, upon reasonable written notice to the Company, to withdraw from this engagement, subject to the Firm's professional obligations under applicable rules of professional conduct, including any requirements regarding orderly transition of the matter to successor counsel and the avoidance of prejudice to the client's interests.

5. Conflicts of Interest

The Firm conducted a conflicts of interest check as of July 11, 2022, in connection with this proposed engagement. The conflicts check covered the following persons and entities, as well as their known affiliates and related parties: Arbor Health Technologies Inc.; Ridgeline Capital Partners, LP; Helix Ventures Fund III, LP; Dr. Marcus J. Elliston; Pinnacle Care Systems, Inc. (Dr. Elliston's current employer); Catherine A. Fielding and Fielding & Rowe LLP (the Executive's personal counsel); and such other parties and affiliates as the Firm identified through the information provided by the Company and through publicly available sources.

Based on the information currently available to us, the Firm has identified no conflicts of interest that would prevent it from undertaking this representation under the Massachusetts Rules of Professional Conduct or any other applicable ethical rules.

Notwithstanding the foregoing, we note that conflicts of interest may arise during the course of an engagement that were not apparent at its inception. If the Firm identifies or becomes aware of any actual or potential conflict of interest at any time during this engagement, we will promptly notify the Company and discuss with you the appropriate steps to address the situation. Depending on the nature and severity of the conflict, such steps may include obtaining the informed written consent of all affected parties (where permissible under the applicable rules), implementing appropriate screening or ethical wall procedures within the Firm, or, if the conflict cannot be adequately addressed through consent or screening, withdrawal from the representation, in whole or in part.

We ask that the Company promptly inform the Firm of any additional parties, relationships, transactions, or circumstances that may be relevant to our ongoing conflict analysis, including any changes to the Company's ownership structure, board composition, or investor base, and any prior or existing relationships between the Company (or its affiliates) and Dr. Elliston, Pinnacle Care Systems, Inc., or Fielding & Rowe LLP that may not have been disclosed to us.

6. Confidentiality and Privilege

Communications between the Company and the Firm in connection with this engagement, including oral and written communications, memoranda, draft documents, legal analyses, and related materials, are protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. These protections are critical to the Company's ability to obtain candid, comprehensive legal advice, and we encourage the Company to take appropriate steps to preserve them.

The attorney-client privilege belongs to the Company as our client, and it can only be waived by the Company. We will not disclose privileged communications or work product to any third party without the Company's prior authorization, except as may be required by law or by the applicable rules of professional conduct.

The Firm will maintain the confidentiality of all information received from the Company in connection with this engagement, consistent with the Firm's professional obligations under the Massachusetts Rules of Professional Conduct and applicable law. We will not use confidential information received from the Company for any purpose other than the performance of our obligations under this engagement, and we will implement reasonable measures to protect such information from unauthorized access or disclosure.

We wish to draw your attention to the risk of inadvertent waiver of the attorney-client privilege through the disclosure of privileged communications to third parties who are not within the scope of the privilege. We recommend that all privileged materials be clearly marked as "Privileged and Confidential — Attorney-Client Communication" (or words to that effect) and that distribution of such materials within the Company be limited to individuals who have a genuine need to know the content of those communications in connection with this matter. In particular, care should be taken when sharing privileged materials with the Company's board members, investors, or their respective counsel, as such disclosures may, depending on the circumstances, result in a waiver of the privilege.

7. Document Retention

Upon the conclusion or dormancy of this engagement, the Firm will maintain the matter file — including drafts, correspondence, memoranda, work product, research materials, and related documents — in accordance with the Firm's document retention policy, which currently provides for a minimum retention period of seven (7) years from the date of matter closure or dormancy. After the expiration of the retention period, the Firm may dispose of the matter file without further notice to the Company, unless the Company has requested that the file be preserved for a longer period.

The Company may request copies of any documents in the matter file at any time during the course of the engagement or during the retention period. Any original documents provided to the Firm by the Company will be returned to the Company upon written request. The Firm may, at its discretion, retain copies of documents in the matter file for its own records, including for the purpose of demonstrating the nature and quality of the services rendered, complying with applicable professional responsibility obligations, or defending against any claims arising from the engagement.

8. Governing Law

This engagement letter, and the relationship between the Company and the Firm, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflicts-of-law principles. Any dispute arising out of or relating to this engagement letter or the Firm's representation of the Company in connection with this matter shall be subject to the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts sitting in Suffolk County, or the United States District Court for the District of Massachusetts.

9. Termination of Engagement

Either party may terminate this engagement at any time upon written notice to the other party. In the case of termination by the Firm, such termination shall be subject to the Firm's professional obligations under the applicable rules of professional conduct, including the obligation to take reasonable steps to protect the Company's interests, to provide reasonable notice, to allow time for the Company to retain successor counsel, and to promptly return any papers and property to which the Company is entitled.

Upon termination of the engagement, regardless of the reason for termination, the Company shall remain responsible for the payment of all fees for professional services rendered and all disbursements incurred through the effective date of termination. The Firm will render a final invoice as promptly as practicable following the effective date of termination.

The Firm's obligations under this engagement letter with respect to confidentiality and attorney-client privilege, as set forth in Section 6, shall survive the termination of the engagement and shall continue in full force and effect thereafter.

10. Limitation of Scope / No Guarantee of Outcome

The Firm's engagement is limited to the specific scope of work described in Section 1 of this letter and does not extend to any other legal matters, whether related or unrelated, unless separately agreed in writing. The Company should not assume that the Firm is monitoring developments in law or regulation outside the scope of this engagement, nor that the Firm is providing advice with respect to any matter not expressly encompassed by this letter.

While the Firm will use its best professional efforts to provide high-quality legal services in connection with this engagement, we cannot and do not guarantee any particular outcome, including the successful completion of negotiations with the Executive or his counsel, the enforceability of any particular contractual provision, the absence of any tax liability to the Company or the Executive, or any other result. Legal matters are inherently uncertain, and outcomes may be affected by factors that are outside the Firm's knowledge or control, including changes in applicable law, the positions taken by the Executive's counsel, the decisions of regulatory authorities, and the actions of third parties.

11. Acceptance and Counterparts

We ask that the Company indicate its agreement to the terms of this engagement letter by having an authorized representative sign and return the enclosed duplicate original to the Firm at the address set forth above. Alternatively, a signed copy may be returned via electronic mail to Bernard Crawford at bcrawford@calderwoodharkness.com. Upon receipt of the signed letter, we will consider the engagement to be formally accepted and will begin work promptly.

This letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic or PDF signatures shall be deemed to have the same legal effect as original ink signatures for all purposes.

We sincerely appreciate the opportunity to represent Arbor Health Technologies Inc. in this important matter. We are confident that our team's depth of experience in executive employment arrangements, Massachusetts employment law, and equity compensation matters will enable us to deliver an employment agreement package that protects the Company's interests while facilitating the successful recruitment of Dr. Elliston. We look forward to working with you, Ms. Murakami, and the broader AHT team in the weeks ahead.

Should you have any questions about this engagement letter or the scope of our representation, please do not hesitate to contact me directly at (617) 555-8217 or bcrawford@calderwoodharkness.com.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Bernard Crawford Partner, Labor & Employment Calderwood & Harkness LLP One International Place, Suite 3400 Boston, MA 02110 Telephone: (617) 555-8217

Email: bcrawford@calderwoodharkness.com

ACKNOWLEDGED AND AGREED:

By signing below, the undersigned confirms that he or she has the authority to execute this engagement letter on behalf of Arbor Health Technologies Inc. and that the Company agrees to the terms and conditions set forth herein.

ARBOR HEALTH TECHNOLOGIES INC.

By: ________

Name: Aaron Whitfield

Title: General Counsel

Date: ________

Enclosure: Duplicate original for Company's records

cc: Renata Vasquez, Billing Partner, Calderwood & Harkness LLP cc: Lisa Murakami, Chief Human Resources Officer, Arbor Health Technologies Inc.

For the avoidance of doubt, the Client, Arbor Health Technologies Inc., is a portfolio company of Pinnacle Venture Fund II LP, and certain consents and reporting obligations to the sponsor may apply in connection with this matter.

Timekeeper	Role	Hourly Rate
Bernard Crawford	Partner, Labor & Employment	$1,150
Renata Vasquez	Partner, Labor & Employment	$1,050
Devon Archer	Associate, Labor & Employment	$625
Nadia Petrov	Associate, Labor & Employment	$525
Gregory Tan	Partner, Tax	$1,100
Sandra Okafor	Counsel, Corporate/M&A	$875

CALDERWOOD & HARKNESS LLP Attorneys at Law
One International Place, Suite 3400 Boston, Massachusetts 02110
Telephone: (617) 555-8200 Facsimile: (617) 555-8201 www.calderwoodharkness.com
July 13, 2022
VIA ELECTRONIC MAIL AND HAND DELIVERY
Aaron Whitfield, Esq. General Counsel Arbor Health Technologies Inc. 400 Brattle Commerce Park, Suite 1200 Cambridge, MA 02138
Re: Engagement of Calderwood & Harkness LLP — Executive Employment Agreement Package for Dr. Marcus J. Elliston, Prospective Chief Operating Officer
Our Matter No.: 1010-00004 Our Client No.: 81-30294
Dear Mr. Whitfield:
We are pleased to confirm that Arbor Health Technologies Inc. ("AHT" or the "Company"), a Delaware corporation with its principal offices located in Cambridge, Massachusetts, has engaged Calderwood & Harkness LLP ("the Firm," "we," "us," or "C&H") to represent the Company in connection with the matters described below. This letter sets forth the terms and conditions of our engagement and is intended to memorialize the understanding between the Company and the Firm regarding the scope of our representation, our fees and billing arrangements, and other matters relevant to this engagement. We ask that you review this letter carefully, and if you are in agreement with its terms, that you sign and return the enclosed copy to our offices at your earliest convenience.
1. Purpose and Scope of Engagement
The Company has retained the Firm to represent AHT in connection with the drafting, negotiation, and finalization of a comprehensive executive employment agreement package for Dr. Marcus J. Elliston (the "Executive"), who is being recruited to serve as Chief Operating Officer of Arbor Health Technologies Inc. In that capacity, Dr. Elliston would report directly to the Company's Chief Executive Officer, Priya Chandrasekaran. It is our understanding that Dr. Elliston's proposed start date is November 1, 2022, and that the Company desires to have the full employment agreement package executed in advance of that date to allow for orderly onboarding and transition from the Executive's current employer.
The scope of our engagement in this matter encompasses the following:
(a) Executive Employment Agreement. Drafting of a comprehensive Executive Employment Agreement, including all schedules and exhibits thereto, which shall include, without limitation, a position description and statement of duties, a prior inventions disclosure form, and a form of general release of claims to be executed by the Executive in connection with any future separation from the Company.
(b) Employee Non-Competition Agreement. Drafting of a standalone Employee Non-Competition Agreement designed to comply in all material respects with the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149, § 24L, including the statutory requirements for garden leave pay or other mutually agreed-upon consideration, the twelve-month maximum duration limitation, and the requirement that the agreement be supported by independent consideration where it is entered into after the commencement of employment. The agreement will also address the related non-solicitation and non-disclosure covenants that are customary for a C-suite executive in the life sciences and health technology industry.
(c) Equity Award Agreements. Drafting of equity award agreements, specifically a stock option award agreement and a restricted stock unit ("RSU") award agreement, each to be granted under the AHT 2020 Equity Incentive Plan, as amended in May 2021 (the "Equity Plan"), and to incorporate the terms and conditions of the Equity Plan. These agreements will address vesting schedules, treatment upon termination of employment and change in control, exercise mechanics (in the case of stock options), and such other terms as the Company's Board of Directors or Compensation Committee may direct.
(d) Massachusetts Employment Law Compliance. Analysis of and advice regarding the Company's compliance with Massachusetts employment law as it relates to the Executive's employment, including but not limited to the Massachusetts Wage Act (M.G.L. c. 149, §§ 148–150), the enforceability of non-solicitation and non-competition provisions under Massachusetts law, and the procedural and substantive requirements governing restrictive covenants applicable to employees in the Commonwealth.
(e) Federal Tax Matters. Analysis of and advice regarding federal tax matters related to the Executive's compensation package, including compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to any deferred compensation elements of the Executive's arrangement, and a preliminary analysis under Sections 280G and 4999 of the Code (the so-called "golden parachute" provisions) to assess whether any payments to the Executive upon a change in control of the Company could give rise to excise tax liability and non-deductibility, and to advise on potential mitigation strategies, including "best-net" cutback provisions or gross-up arrangements.
(f) Negotiation with Executive's Counsel. Negotiation of the terms of the employment agreement package with the Executive's personal counsel, Fielding & Rowe LLP, represented by Catherine A. Fielding, Partner, on behalf of the Company. We anticipate that the negotiation process will involve the exchange of redlined drafts, telephone conferences, and potentially one or more in-person sessions, and we will keep the Company apprised of the status of negotiations on a regular basis.
(g) Coordination with Corporate Counsel. Coordination, as needed and at the Company's direction, with AHT's regular outside corporate counsel, Wentworth & Gage LLP, represented by Richard D. Gage, Partner, regarding background corporate governance documents, existing equity incentive plan provisions and any plan amendments that may be required, the Company's Certificate of Incorporation and Bylaws, and the terms and conditions of the Ridgeline Capital Partners Stockholders' Agreement (including any consent or approval rights that may be implicated by the appointment of a new Chief Operating Officer or the grant of equity awards of the magnitude contemplated).
(h) Coordination with Tax/Accounting Advisors. Coordination, as needed, with the Company's tax and accounting advisors, Hargrove & Sinclair CPAs, represented by Malcolm R. Sinclair, CPA, regarding the quantitative aspects of any Section 280G and Section 409A analysis, including the calculation of the Executive's base amount, the determination of parachute payment values, and the modeling of various compensation scenarios.
It is important that we clearly define the boundaries of this engagement. The engagement described in this letter does not include representation of AHT in any litigation, arbitration, regulatory investigation or proceeding, corporate transaction (including, without limitation, any merger, acquisition, financing, or recapitalization), intellectual property matter, or any other legal matter falling outside the specific scope described above, unless the Company and the Firm separately agree in writing to expand the scope of this engagement or to establish a new engagement for such additional matters.
In addition, please note that the scope of this engagement does not extend to the representation of any individual officer, director, employee, or stockholder of AHT in his or her personal capacity, nor does it extend to the representation of Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, or any of their respective affiliates, general partners, limited partners, portfolio companies, or representatives. Each of these persons and entities should retain separate counsel as needed with respect to any matters arising from or related to the Executive's employment or the transactions contemplated by this engagement.
2. Engagement Team and Staffing
The Firm has assembled a team of experienced attorneys to handle this matter efficiently and effectively. The members of the core engagement team, and their respective roles, are as follows:
Bernard Crawford — Partner, Labor & Employment Group. Mr. Crawford will serve as the Responsible Partner for this engagement and will be your primary point of contact for strategic and substantive matters. Mr. Crawford has over twenty-five years of experience representing public and private companies in the negotiation and documentation of executive employment arrangements, with particular expertise in the life sciences and technology sectors.
Renata Vasquez — Partner, Labor & Employment Group. Ms. Vasquez will serve as the Billing Partner for this engagement and will be the primary contact for billing, administrative, and staffing matters. Ms. Vasquez will also contribute substantive work on an as-needed basis, particularly with respect to Massachusetts employment law compliance and restrictive covenant analysis.
Devon Archer — Associate, Labor & Employment Group. Mr. Archer will serve as the Lead Associate on this engagement and will be responsible for the day-to-day drafting of the employment agreement package and for serving as the lead negotiator in communications with the Executive's counsel, under the supervision of Mr. Crawford.
Nadia Petrov — Associate, Labor & Employment Group. Ms. Petrov will provide research, compliance analysis, and drafting support throughout the engagement. Ms. Petrov has significant experience with Massachusetts Wage Act compliance and restrictive covenant analysis and will be principally responsible for the initial drafts of the non-competition agreement and the compliance memoranda.
In addition to the core engagement team, the following Firm attorneys may be consulted on specific aspects of the engagement as needed:
Gregory Tan — Partner, Tax Group. Mr. Tan will provide advice on equity compensation structuring, Section 409A compliance, and Section 280G/4999 analysis. Mr. Tan's involvement is anticipated to be focused during the initial structuring phase and during any negotiations regarding change-in-control and severance provisions.
Sandra Okafor — Counsel, Corporate/M&A Group. Ms. Okafor will provide assistance with the review of change-in-control provisions as they intersect with the Company's corporate governance documents, the interpretation of the Equity Plan, and the analysis of the interaction between the employment agreement package and the Ridgeline Capital Partners Stockholders' Agreement.
The Firm may assign additional attorneys or paraprofessionals (including legal assistants, law clerks, and contract attorneys) to this matter as reasonably necessary to ensure the efficient and timely completion of the work. We will notify you of any material changes to the composition of the core engagement team, including the departure of any team member from the Firm or the reassignment of primary responsibilities.
3. Client Identification
We wish to confirm that the Firm's client in this matter is Arbor Health Technologies Inc., the corporate entity, and not any individual officer, director, employee, or agent of the Company. Without limitation, our client is not any individual board member, including Thomas R. Glenwood (Board Chair), nor any stockholder or investor of the Company, including Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, or any of their respective affiliates, general partners, limited partners, or representatives. This clarification is important because, in matters involving executive compensation, the interests of the corporate entity, its management, its board of directors, and its stockholders may not always be perfectly aligned, and we want to ensure that there is no misunderstanding regarding whom we represent.
The Company's primary contacts for this engagement are Aaron Whitfield, General Counsel, and Lisa Murakami, Chief Human Resources Officer. We will direct the substance of our communications to Mr. Whitfield and Ms. Murakami unless otherwise instructed by the Company. We understand that Mr. Whitfield has the authority to direct our work, approve expenditures, and make decisions on behalf of the Company in connection with this engagement, subject to such internal approvals as may be required by the Company's own governance procedures.
We further understand that, in the course of this engagement, it may be necessary or desirable for the Firm to communicate with Thomas R. Glenwood, in his capacity as Board Chair and as the representative of Ridgeline Capital Partners on the Company's Board of Directors, and with other members of the Board of Directors or the Compensation Committee, regarding the terms of the Executive's employment package. Any such communications will be undertaken at the direction of the General Counsel and will be made on behalf of the Company as our client. Mr. Glenwood and the other Board members should understand that the Firm does not represent them individually and that our duty of loyalty runs to the Company.
4. Fees and Billing Arrangements
The Firm will bill for services rendered in connection with this engagement on an hourly basis at the following current standard rates for each timekeeper assigned to this matter:
These hourly rates are subject to periodic adjustment, which typically occurs on an annual basis, effective January 1 of each calendar year. We will notify the Company in advance of any changes to the rates of the timekeepers assigned to this matter, and any adjusted rates will apply only to time incurred after the effective date of the adjustment.
Based on the Firm's experience with executive employment engagements of comparable complexity in the life sciences and health technology sector, and taking into account the scope of work described in Section 1 above, we estimate that the total professional fees for this engagement will be in the range of $85,000 to $125,000. This estimate assumes a moderate level of negotiation with the Executive's personal counsel; a typical level of interaction with the Company's corporate counsel and tax advisors; and that the transaction proceeds in substantially the manner currently contemplated. We emphasize that this figure is an estimate only and is provided for budgeting and planning purposes. It is not a cap on fees, a fixed fee, or a "not-to-exceed" amount. Actual fees may be higher or lower than the estimated range depending on a number of factors that are difficult to predict at the outset of the engagement, including the extent and complexity of negotiations with the Executive's counsel, the number and nature of client-requested revisions to the documentation, the complexity of the tax analysis (particularly the Section 280G modeling), the level of coordination required with the Company's other advisors, and other factors beyond the Firm's control. We will endeavor to keep you apprised of fee accumulation relative to the estimate, and we encourage you to contact Ms. Vasquez at any time if you have questions regarding fees or billing.
In addition to professional fees, the Firm will bill the Company for reasonable out-of-pocket disbursements incurred in connection with this engagement. Such disbursements may include, without limitation, document reproduction and printing charges, messenger and courier services, travel expenses (if any, which we do not currently anticipate), electronic research charges (e.g., Westmark Data Systems, Calderon Systems, Cascade Services Inc.), filing fees, and similar costs. All disbursements will be billed at the Firm's actual cost, without markup.
Invoices will be rendered on a monthly basis, generally within fifteen (15) business days following the end of each calendar month, and will set forth in reasonable detail the services performed by each timekeeper, the hours expended, and any disbursements incurred during the billing period. Payment of each invoice is due within thirty (30) calendar days of the invoice date. Invoices should be remitted to Renata Vasquez at the Firm's address set forth above, or by wire transfer pursuant to instructions that will be provided upon request.
In the event that any invoice remains unpaid for more than sixty (60) days after its due date, the Firm reserves the right, upon reasonable written notice to the Company, to withdraw from this engagement, subject to the Firm's professional obligations under applicable rules of professional conduct, including any requirements regarding orderly transition of the matter to successor counsel and the avoidance of prejudice to the client's interests.
5. Conflicts of Interest
The Firm conducted a conflicts of interest check as of July 11, 2022, in connection with this proposed engagement. The conflicts check covered the following persons and entities, as well as their known affiliates and related parties: Arbor Health Technologies Inc.; Ridgeline Capital Partners, LP; Helix Ventures Fund III, LP; Dr. Marcus J. Elliston; Pinnacle Care Systems, Inc. (Dr. Elliston's current employer); Catherine A. Fielding and Fielding & Rowe LLP (the Executive's personal counsel); and such other parties and affiliates as the Firm identified through the information provided by the Company and through publicly available sources.
Based on the information currently available to us, the Firm has identified no conflicts of interest that would prevent it from undertaking this representation under the Massachusetts Rules of Professional Conduct or any other applicable ethical rules.
Notwithstanding the foregoing, we note that conflicts of interest may arise during the course of an engagement that were not apparent at its inception. If the Firm identifies or becomes aware of any actual or potential conflict of interest at any time during this engagement, we will promptly notify the Company and discuss with you the appropriate steps to address the situation. Depending on the nature and severity of the conflict, such steps may include obtaining the informed written consent of all affected parties (where permissible under the applicable rules), implementing appropriate screening or ethical wall procedures within the Firm, or, if the conflict cannot be adequately addressed through consent or screening, withdrawal from the representation, in whole or in part.
We ask that the Company promptly inform the Firm of any additional parties, relationships, transactions, or circumstances that may be relevant to our ongoing conflict analysis, including any changes to the Company's ownership structure, board composition, or investor base, and any prior or existing relationships between the Company (or its affiliates) and Dr. Elliston, Pinnacle Care Systems, Inc., or Fielding & Rowe LLP that may not have been disclosed to us.
6. Confidentiality and Privilege
Communications between the Company and the Firm in connection with this engagement, including oral and written communications, memoranda, draft documents, legal analyses, and related materials, are protected by the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. These protections are critical to the Company's ability to obtain candid, comprehensive legal advice, and we encourage the Company to take appropriate steps to preserve them.
The attorney-client privilege belongs to the Company as our client, and it can only be waived by the Company. We will not disclose privileged communications or work product to any third party without the Company's prior authorization, except as may be required by law or by the applicable rules of professional conduct.
The Firm will maintain the confidentiality of all information received from the Company in connection with this engagement, consistent with the Firm's professional obligations under the Massachusetts Rules of Professional Conduct and applicable law. We will not use confidential information received from the Company for any purpose other than the performance of our obligations under this engagement, and we will implement reasonable measures to protect such information from unauthorized access or disclosure.
We wish to draw your attention to the risk of inadvertent waiver of the attorney-client privilege through the disclosure of privileged communications to third parties who are not within the scope of the privilege. We recommend that all privileged materials be clearly marked as "Privileged and Confidential — Attorney-Client Communication" (or words to that effect) and that distribution of such materials within the Company be limited to individuals who have a genuine need to know the content of those communications in connection with this matter. In particular, care should be taken when sharing privileged materials with the Company's board members, investors, or their respective counsel, as such disclosures may, depending on the circumstances, result in a waiver of the privilege.
7. Document Retention
Upon the conclusion or dormancy of this engagement, the Firm will maintain the matter file — including drafts, correspondence, memoranda, work product, research materials, and related documents — in accordance with the Firm's document retention policy, which currently provides for a minimum retention period of seven (7) years from the date of matter closure or dormancy. After the expiration of the retention period, the Firm may dispose of the matter file without further notice to the Company, unless the Company has requested that the file be preserved for a longer period.
The Company may request copies of any documents in the matter file at any time during the course of the engagement or during the retention period. Any original documents provided to the Firm by the Company will be returned to the Company upon written request. The Firm may, at its discretion, retain copies of documents in the matter file for its own records, including for the purpose of demonstrating the nature and quality of the services rendered, complying with applicable professional responsibility obligations, or defending against any claims arising from the engagement.
8. Governing Law
This engagement letter, and the relationship between the Company and the Firm, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflicts-of-law principles. Any dispute arising out of or relating to this engagement letter or the Firm's representation of the Company in connection with this matter shall be subject to the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts sitting in Suffolk County, or the United States District Court for the District of Massachusetts.
9. Termination of Engagement
Either party may terminate this engagement at any time upon written notice to the other party. In the case of termination by the Firm, such termination shall be subject to the Firm's professional obligations under the applicable rules of professional conduct, including the obligation to take reasonable steps to protect the Company's interests, to provide reasonable notice, to allow time for the Company to retain successor counsel, and to promptly return any papers and property to which the Company is entitled.
Upon termination of the engagement, regardless of the reason for termination, the Company shall remain responsible for the payment of all fees for professional services rendered and all disbursements incurred through the effective date of termination. The Firm will render a final invoice as promptly as practicable following the effective date of termination.
The Firm's obligations under this engagement letter with respect to confidentiality and attorney-client privilege, as set forth in Section 6, shall survive the termination of the engagement and shall continue in full force and effect thereafter.
10. Limitation of Scope / No Guarantee of Outcome
The Firm's engagement is limited to the specific scope of work described in Section 1 of this letter and does not extend to any other legal matters, whether related or unrelated, unless separately agreed in writing. The Company should not assume that the Firm is monitoring developments in law or regulation outside the scope of this engagement, nor that the Firm is providing advice with respect to any matter not expressly encompassed by this letter.
While the Firm will use its best professional efforts to provide high-quality legal services in connection with this engagement, we cannot and do not guarantee any particular outcome, including the successful completion of negotiations with the Executive or his counsel, the enforceability of any particular contractual provision, the absence of any tax liability to the Company or the Executive, or any other result. Legal matters are inherently uncertain, and outcomes may be affected by factors that are outside the Firm's knowledge or control, including changes in applicable law, the positions taken by the Executive's counsel, the decisions of regulatory authorities, and the actions of third parties.
11. Acceptance and Counterparts
We ask that the Company indicate its agreement to the terms of this engagement letter by having an authorized representative sign and return the enclosed duplicate original to the Firm at the address set forth above. Alternatively, a signed copy may be returned via electronic mail to Bernard Crawford at bcrawford@calderwoodharkness.com. Upon receipt of the signed letter, we will consider the engagement to be formally accepted and will begin work promptly.
This letter may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic or PDF signatures shall be deemed to have the same legal effect as original ink signatures for all purposes.
We sincerely appreciate the opportunity to represent Arbor Health Technologies Inc. in this important matter. We are confident that our team's depth of experience in executive employment arrangements, Massachusetts employment law, and equity compensation matters will enable us to deliver an employment agreement package that protects the Company's interests while facilitating the successful recruitment of Dr. Elliston. We look forward to working with you, Ms. Murakami, and the broader AHT team in the weeks ahead.
Should you have any questions about this engagement letter or the scope of our representation, please do not hesitate to contact me directly at (617) 555-8217 or bcrawford@calderwoodharkness.com.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Bernard Crawford Partner, Labor & Employment Calderwood & Harkness LLP One International Place, Suite 3400 Boston, MA 02110 Telephone: (617) 555-8217
Email: bcrawford@calderwoodharkness.com
ACKNOWLEDGED AND AGREED:
By signing below, the undersigned confirms that he or she has the authority to execute this engagement letter on behalf of Arbor Health Technologies Inc. and that the Company agrees to the terms and conditions set forth herein.
ARBOR HEALTH TECHNOLOGIES INC.
By: ________
Name: Aaron Whitfield
Title: General Counsel
Date: ________
Enclosure: Duplicate original for Company's records
cc: Renata Vasquez, Billing Partner, Calderwood & Harkness LLP cc: Lisa Murakami, Chief Human Resources Officer, Arbor Health Technologies Inc.
For the avoidance of doubt, the Client, Arbor Health Technologies Inc., is a portfolio company of Pinnacle Venture Fund II LP, and certain consents and reporting obligations to the sponsor may apply in connection with this matter.
Timekeeper | Role | Hourly Rate
Bernard Crawford | Partner, Labor & Employment | $1,150
Renata Vasquez | Partner, Labor & Employment | $1,050
Devon Archer | Associate, Labor & Employment | $625
Nadia Petrov | Associate, Labor & Employment | $525
Gregory Tan | Partner, Tax | $1,100
Sandra Okafor | Counsel, Corporate/M&A | $875

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA ELECTRONIC MAIL AND HAND DELIVERY

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGED AND AGREED:

ARBOR HEALTH TECHNOLOGIES INC.

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