1025-00009 · Calderwood & Harkness LLP · Engagement

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

1221 Avenue of the Americas, 34th Floor New York, New York 10020

Telephone: (212) 554-7800 Facsimile: (212) 554-7801

Hartford Office: 100 Pearl Street, Suite 800, Hartford, CT 06103 Telephone: (860) 241-3300

March 4, 2024

Via Email and U.S. Mail

Patricia Okonkwo, Esq. General Counsel Quorum Insurance Holdings Corp. 280 Constitution Plaza, Suite 1400 Hartford, CT 06103

Re: Engagement of Calderwood & Harkness LLP — Enterprise SaaS Subscription Agreement with Clearpoint Analytics, Inc. Matter Number: 1025-00009

Dear Ms. Okonkwo:

We appreciate the confidence that Quorum Insurance Holdings Corp. ("Quorum" or the "Company") has placed in Calderwood & Harkness LLP ("the Firm," "we," "us," or "C&H") by retaining the Firm in connection with this matter. This letter is intended to confirm the terms and conditions under which the Firm will represent Quorum as licensee in the negotiation and execution of an Enterprise SaaS Subscription Agreement (the "SaaS Agreement") with Clearpoint Analytics, Inc. ("Clearpoint"), a Delaware corporation headquartered in Chicago, Illinois, for the enterprise-wide deployment of Clearpoint's ClaimsIQ™ claims-analytics platform. This engagement is being opened under Matter Number 1025-00009 in the Firm's records. We understand that Quorum is a Delaware-incorporated, publicly traded insurance and financial technology holding company whose common stock is listed on the Nasdaq Stock Market under the ticker symbol QIHC.

The purpose of this engagement letter is to set forth, in a clear and comprehensive manner, the scope of our representation, the members of the Firm who will be principally responsible for this matter, our fee arrangements, and the respective responsibilities of the Firm and the Company. We ask that you review this letter carefully and, if its terms are acceptable, sign and return a copy to us as indicated below.

1. Scope of Representation

The Firm will represent Quorum in the review, negotiation, and execution of the SaaS Agreement and all related ancillary agreements with Clearpoint for the licensing of the ClaimsIQ™ claims-analytics platform. We understand that the anticipated total contract value of the SaaS Agreement is approximately Seven Million Dollars ($7,000,000) over a five-year initial subscription term, and that the transaction involves enterprise-wide deployment across Quorum's operating subsidiaries and affiliated entities.

Specifically, the services to be provided by the Firm in connection with this engagement include the following:

(a) Review and Analysis of Initial Form Agreement. Review and analysis of Clearpoint's initial form SaaS Subscription Agreement (and all exhibits, schedules, appendices, and order forms referenced therein) to identify provisions that are inconsistent with Quorum's standard licensing requirements, risk tolerances, and regulatory obligations.

(b) Negotiation and Drafting of Redlines. Negotiation and drafting of all revisions (redlines) to the SaaS Agreement, including iterative markup and comment exchanges with Clearpoint and its outside counsel, through to execution-ready final form.

(c) Data-Rights Provisions. Negotiation and drafting of comprehensive data-rights provisions, including, without limitation, provisions establishing Quorum's ownership of all Customer Data (as such term will be defined in the SaaS Agreement), provisions ensuring full data portability upon termination or expiration of the SaaS Agreement (including the right to export Customer Data in ACORD XML and CSV formats within a commercially reasonable timeframe), and restrictions on Clearpoint's use of aggregated, anonymized, or derived data generated from or in connection with Quorum's use of the ClaimsIQ™ platform.

(d) Indemnification Provisions. Negotiation of indemnification provisions, including the structuring of mutual indemnification obligations, the establishment of appropriate indemnification caps and baskets, the negotiation of carve-outs from any general limitation of liability (including, in particular, a carve-out for data-breach indemnification obligations), and the specification of indemnification procedures, notice requirements, and defense-and-settlement mechanics.

(e) Service Level Commitments. Negotiation of service level agreement (SLA) provisions, including the establishment of platform uptime thresholds (expressed as a monthly and/or annual availability percentage), the design of a service credit methodology (including credit calculation formulas and accrual caps), and the negotiation of chronic-failure termination rights permitting Quorum to terminate the SaaS Agreement without penalty in the event of repeated or sustained failures to meet agreed-upon service levels.

(f) Data Processing Addendum. Negotiation and drafting of a data processing addendum (DPA) to the SaaS Agreement, addressing compliance with applicable data privacy and data security laws and regulations, including, without limitation, the Connecticut Data Privacy Act (CTDPA, Conn. Gen. Stat. §§ 42-515 through 42-525), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the regulations promulgated thereunder (as applicable to Quorum's workers' compensation lines of business), and the NAIC Insurance Data Security Model Law as adopted and implemented in the State of Connecticut.

(g) Security Requirements. Review and negotiation of information security requirements to be imposed on Clearpoint, including, without limitation, requirements for Clearpoint to maintain a current SOC 2 Type II audit report (conducted by an independent, nationally recognized auditing firm), requirements for periodic penetration testing of the ClaimsIQ™ platform and infrastructure, requirements for Clearpoint to maintain adequate cyber-liability and errors-and-omissions insurance coverage, and encryption standards for data at rest and in transit (including, at minimum, AES-256 encryption for data at rest and TLS 1.2 or higher for data in transit).

(h) Source Code Escrow. Negotiation and review of source code escrow arrangements with a qualified third-party escrow agent, including the specification of release conditions that would trigger delivery of the escrowed source code and related materials to Quorum, with particular attention to release conditions addressing vendor insolvency (including voluntary and involuntary bankruptcy filings), cessation of business operations, material breach of the SaaS Agreement by Clearpoint, and failure to provide ongoing maintenance and support.

(i) Change of Control and Assignment. Review and negotiation of change-of-control and assignment provisions, including restrictions on Clearpoint's ability to assign the SaaS Agreement or undergo a change of control without Quorum's prior written consent, and the negotiation of appropriate protections for Quorum in the event of an acquisition of Clearpoint by a competitor of Quorum or by an entity that does not meet Quorum's vendor qualification standards.

(j) Subprocessor Rights. Review and negotiation of subprocessor consent and objection rights, including the right of Quorum to receive advance notice of proposed new subprocessors, the right to object to the engagement of specific subprocessors on reasonable grounds, and the obligation of Clearpoint to maintain appropriate flow-down contractual protections with all subprocessors processing Quorum's data.

(k) Coordination with Privacy Consultant. Coordination with Quorum's external data-privacy consultant, Dravello Data Compliance Advisors LLC, regarding data-mapping and privacy-impact assessment of the ClaimsIQ™ platform, and incorporation of findings and recommendations from such assessment into the SaaS Agreement and DPA as appropriate.

(l) Internal Memoranda. Preparation of internal memoranda for the benefit of Quorum's legal department and management, including a negotiation issues analysis identifying key risk areas and recommended positions, deal-points summaries for review by senior management and the board of directors (as applicable), and such other analytical memoranda as may be reasonably requested.

(m) Closing Procedures. Preparation of closing checklists, signature packages, and closing confirmation correspondence, and coordination of execution logistics with Clearpoint's counsel to facilitate timely closing of the SaaS Agreement.

(n) Other Related Services. Such other services as may be reasonably requested by Quorum in connection with this transaction and mutually agreed upon by the Firm and the Company.

It is understood and agreed that the scope of this engagement is limited to the SaaS transaction described herein. This engagement does not extend to any other matter unless separately agreed upon in a supplemental engagement letter or other written agreement executed by both the Firm and the Company. Without limiting the generality of the foregoing, this engagement does not include representation of Quorum in connection with any litigation, arbitration, or other dispute resolution proceedings; any regulatory proceedings, investigations, or examinations; any tax advice or tax-related opinions; or any intellectual property prosecution, registration, or portfolio management.

2. Engagement Team and Staffing

The Firm has assembled the following team of attorneys to handle this matter. Each team member has been selected for his or her relevant experience and familiarity with the legal and commercial issues that are anticipated to arise in connection with this transaction.

(a) Renata Vasquez, Partner — Ms. Vasquez will serve as the Responsible Partner for this engagement. Ms. Vasquez is a member of the Firm's Labor & Employment practice group and has been cross-staffed to this technology transaction given her deep familiarity with Quorum's operations, organizational structure, and regulatory environment, developed through her work on ongoing employment matters for the Company. In this capacity, Ms. Vasquez will provide overall strategic direction and supervision of the engagement team, participate in key negotiation sessions, and serve as the primary point of escalation for significant issues arising during the course of the transaction.

(b) Bernard Crawford, Partner — Mr. Crawford will serve as the Billing Partner for this engagement. Mr. Crawford is a member of the Firm's Labor & Employment practice group. In his capacity as Billing Partner, Mr. Crawford will manage the client billing relationship and financial administration of the engagement, including the review and approval of monthly invoices, the monitoring of fee expenditures against internal budgets, and the resolution of any billing questions or concerns that may arise.

(c) Nathan Ikeda, Associate — Mr. Ikeda will serve as the Lead Associate on this matter. Mr. Ikeda is a member of the Firm's Bankruptcy & Restructuring practice group and has been detailed to this engagement for his expertise in creditor-protection and data-rights issues. Mr. Ikeda has particular experience in structuring source code escrow arrangements and negotiating vendor insolvency protections in the context of technology transactions, and will take the lead on those aspects of the SaaS Agreement. Mr. Ikeda will also contribute to the analysis and negotiation of limitation of liability, indemnification, and termination provisions.

(d) Gabrielle Moss, Associate — Ms. Moss will serve as the Working Associate on this matter and will be the primary drafter of all redlines, memoranda, and correspondence generated by the Firm in connection with this engagement. Ms. Moss is a member of the Firm's Bankruptcy & Restructuring practice group. Ms. Moss will serve as the day-to-day contact for Quorum on this matter and will be responsible for coordinating the flow of documents and information between the Firm, Quorum, Clearpoint's counsel, and any third parties involved in the transaction.

The Firm reserves the right to assign additional attorneys or staff to this matter as may be necessary or appropriate, and will provide prior notice to Quorum of any material changes to the engagement team. Any such additional team members will be billed at their then-current standard hourly rates.

Day-to-day communications regarding this engagement should be directed to Gabrielle Moss at gmoss@calderwoodharkness.com or (860) 241-3318, with copies to Nathan Ikeda at nikeda@calderwoodharkness.com and Renata Vasquez at rvasquez@calderwoodharkness.com, as appropriate given the nature and urgency of the communication.

For your reference, we have identified the following as counterparty counsel in this transaction: Whitfield Greer & Associates LLP, represented by Damian Cho, Partner (Technology Transactions), and Leona Burris, Associate, located at 71 South Dearborn Street, Suite 4400, Chicago, IL 60603.

3. Fees and Billing Arrangements

The Firm will bill for this engagement on an hourly basis at the Firm's standard rates for the attorneys and professional staff assigned to this matter. The current hourly rates for the members of the engagement team are as follows:

These rates are the Firm's standard rates and are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. Should any rate adjustment take effect during the course of this engagement, the Firm will provide Quorum with advance written notice of the revised rates.

Invoices for fees and disbursements will be rendered on a monthly basis and will include reasonable detail regarding the nature of the services performed, the identity of the timekeepers, the hours expended, and the disbursements incurred. Invoices are payable within thirty (30) days of receipt. If Quorum has any questions or concerns regarding an invoice, the Company is encouraged to contact Bernard Crawford promptly so that any issues can be addressed in a timely manner.

In addition to professional fees, the Firm will bill for reasonable out-of-pocket expenses incurred in connection with this engagement. Such expenses may include, but are not limited to, travel expenses (including transportation, lodging, and meals for travel required in connection with the engagement), filing fees, messenger and courier services, long-distance telephone and video conference charges, document reproduction and printing costs, computerized legal research charges, and similar disbursements. The Firm does not impose administrative surcharges on disbursements.

The Firm estimates that total fees for this engagement will fall within a range that is customary and appropriate for a technology licensing transaction of this nature and scope. However, actual fees will depend on a number of factors, including the complexity and duration of negotiations with Clearpoint and its counsel, the responsiveness of Clearpoint and Whitfield Greer & Associates LLP in returning comments and revised drafts, the number and significance of open issues that require extended negotiation, and any unforeseen legal or regulatory issues that may arise during the course of the transaction. As a result, the Firm is unable to provide a fixed fee or guaranteed fee cap for this engagement. The Firm is committed to staffing this matter efficiently and will endeavor to minimize unnecessary expenditures.

The Billing Partner, Bernard Crawford, is available at bcrawford@calderwoodharkness.com or (212) 554-7812 to discuss any billing questions, concerns, or requests for alternative fee arrangements at any time during the course of this engagement.

4. Client Responsibilities

In order for the Firm to provide effective and efficient legal services in connection with this engagement, Quorum's cooperation and timely assistance will be essential. Specifically:

(a) Internal Points of Contact. Quorum will designate internal points of contact for the Firm with respect to this engagement. We currently understand that the following individuals will serve in that capacity:

(i) Patricia Okonkwo, General Counsel — primary legal contact and authorized decision-maker with respect to legal strategy and approval of final agreement terms;

(ii) Derek Langston, Chief Information Officer — internal business sponsor for the ClaimsIQ™ deployment, responsible for coordinating technical due diligence and providing the Firm with information regarding Quorum's IT infrastructure, security requirements, and integration specifications; and

(iii) Malcolm Tsai, Vice President of Procurement — lead commercial negotiator, responsible for coordinating the business and financial terms of the SaaS Agreement and providing the Firm with background on prior commercial discussions with Clearpoint.

(b) Documents and Information. Quorum will promptly provide the Firm with all relevant documents, information, data, and access to personnel necessary for the Firm to perform the services described herein. This includes, but is not limited to, copies of any prior correspondence, term sheets, proposals, or draft agreements exchanged between Quorum and Clearpoint; information regarding Quorum's internal data governance and privacy policies; relevant insurance regulatory requirements applicable to Quorum's use of third-party analytics platforms; and any reports or assessments prepared by Dravello Data Compliance Advisors LLC.

(c) Timely Review and Feedback. Quorum will review and provide timely feedback on all drafts, redlines, memoranda, and other work product circulated by the Firm. Delays in providing feedback may impact the Firm's ability to meet target timelines for the transaction and may result in additional fees.

5. Confidentiality

The Firm will maintain the confidentiality of all information provided by Quorum in connection with this engagement, consistent with the Firm's professional obligations under the Connecticut Rules of Professional Conduct, the New York Rules of Professional Conduct, and all other applicable rules of professional conduct governing the attorneys assigned to this matter. The Firm will not disclose confidential information of the Company to any third party without the Company's prior written consent, except as may be required by law, court order, or applicable professional responsibility rules, or as may be necessary in connection with the performance of the Firm's services hereunder (for example, the sharing of negotiation positions with counterparty counsel in the ordinary course of the transaction).

The Firm acknowledges that Quorum is a publicly traded company whose securities are listed on the Nasdaq Stock Market. The Firm and all members of the engagement team are aware of their obligations under the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, with respect to material non-public information concerning Quorum that may come into the Firm's possession during the course of this engagement. The Firm maintains internal policies and procedures designed to prevent the misuse of material non-public information and will ensure that all members of the engagement team are reminded of these obligations.

6. Conflicts of Interest

The Firm has conducted a conflicts check in accordance with its standard procedures and, based on the information currently available to the Firm, has identified no conflicts of interest that would preclude the Firm from undertaking this engagement. Specifically, the Firm confirms that it does not currently represent Clearpoint Analytics, Inc., Ridgeway Capital Partners, LP (which we understand to be Clearpoint's majority institutional investor), or any of their respective affiliates, subsidiaries, officers, or directors in any matter, whether pending or contemplated.

If a conflict of interest arises during the course of this engagement, the Firm will promptly notify Quorum of the nature and circumstances of the conflict and will take appropriate action consistent with applicable rules of professional responsibility, which may include seeking a waiver from the affected parties or, if a waiver is not obtainable or appropriate, withdrawing from the engagement. The Firm appreciates Quorum's cooperation in promptly providing information that may be relevant to the Firm's ongoing conflicts-monitoring obligations.

7. Document Retention

The Firm will maintain all files, documents, and work product related to this engagement in accordance with the Firm's standard document retention policies, which are available for review upon request. These policies provide for the retention of closed-matter files for a period of ten (10) years following the conclusion of the engagement, after which the files may be destroyed in the ordinary course without further notice to the Company, unless the Company has previously requested the return of such files or has provided written instructions to the contrary.

Upon the conclusion of the engagement, the Firm will, upon Quorum's written request, return all original client documents to the Company. Copies of documents and work product generated by the Firm may be retained in accordance with the Firm's document retention policies and applicable professional responsibility obligations.

8. Termination of Engagement

Either the Firm or Quorum may terminate this engagement at any time upon written notice to the other party. In the event of termination by either party, Quorum will remain responsible for the payment of all fees and expenses incurred by the Firm through the effective date of termination, and the Firm will render a final invoice for such amounts within thirty (30) days following the effective date of termination.

Upon termination, the Firm will take all reasonable steps necessary to protect Quorum's interests during any transition period, including cooperating with successor counsel, transferring files and work product, and providing such other assistance as may be reasonably necessary to facilitate an orderly transition. The Firm's obligations under Sections 5 (Confidentiality) and 7 (Document Retention) of this letter shall survive the termination of this engagement.

9. Governing Law

This engagement letter and the relationship between the Firm and Quorum arising hereunder shall be governed by and construed in accordance with the laws of the State of Connecticut, 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 Quorum hereunder shall be subject to the exclusive jurisdiction of the state and federal courts located in Hartford County, Connecticut.

10. Acceptance and Acknowledgment

We respectfully request that you signify Quorum's agreement to the terms set forth in this engagement letter by signing the acknowledgment below and returning a signed copy of this letter to the Firm at your earliest convenience. A signed copy may be returned via email (as a scanned PDF) to Gabrielle Moss at gmoss@calderwoodharkness.com, with a hard copy to follow by U.S. mail to the Firm's Hartford office at the address set forth above.

The signed engagement letter will constitute the entire agreement between the Firm and Quorum with respect to the scope and terms of this engagement and supersedes any prior discussions, understandings, or agreements, whether written or oral, relating to the subject matter hereof. No amendment or modification of this engagement letter shall be effective unless made in writing and signed by both parties.

We are pleased to have the opportunity to represent Quorum in connection with this important technology transaction and look forward to working with you, Mr. Langston, Mr. Tsai, and the broader Quorum team to achieve a favorable outcome.

Sincerely,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Renata Vasquez

Title: Partner — Responsible Partner

Date: March 4, 2024

By: ________

Name: Bernard Crawford

Title: Partner — Billing Partner

Date: March 4, 2024

AGREED AND ACCEPTED

The undersigned, duly authorized on behalf of Quorum Insurance Holdings Corp., hereby agrees to and accepts the terms and conditions set forth in the foregoing engagement letter, dated March 4, 2024, and confirms the engagement of Calderwood & Harkness LLP to represent the Company in connection with the matters described therein.

QUORUM INSURANCE HOLDINGS CORP.

By: ________

Name: Patricia Okonkwo

Title: General Counsel

Date: ________

Matter Number: 1025-00009

CONFIDENTIALITY NOTICE: This engagement letter and any accompanying documents are confidential and may be subject to the attorney-client privilege. This communication is intended solely for the use of the individual or entity to whom it is addressed. If you are not the intended recipient, or an employee or agent responsible for delivering this communication to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify Calderwood & Harkness LLP immediately by telephone at (212) 554-7800 and return the original communication to us at the address set forth above.

Attorney	Position	Current Hourly Rate
Renata Vasquez	Partner	$1,150
Bernard Crawford	Partner	$1,100
Nathan Ikeda	Associate (6th Year)	$785
Gabrielle Moss	Associate (4th Year)	$685
Paralegals / Legal Assistants	Staff	$325–$395

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
1221 Avenue of the Americas, 34th Floor New York, New York 10020
Telephone: (212) 554-7800 Facsimile: (212) 554-7801
Hartford Office: 100 Pearl Street, Suite 800, Hartford, CT 06103 Telephone: (860) 241-3300
March 4, 2024
Via Email and U.S. Mail
Patricia Okonkwo, Esq. General Counsel Quorum Insurance Holdings Corp. 280 Constitution Plaza, Suite 1400 Hartford, CT 06103
Re: Engagement of Calderwood & Harkness LLP — Enterprise SaaS Subscription Agreement with Clearpoint Analytics, Inc. Matter Number: 1025-00009
Dear Ms. Okonkwo:
We appreciate the confidence that Quorum Insurance Holdings Corp. ("Quorum" or the "Company") has placed in Calderwood & Harkness LLP ("the Firm," "we," "us," or "C&H") by retaining the Firm in connection with this matter. This letter is intended to confirm the terms and conditions under which the Firm will represent Quorum as licensee in the negotiation and execution of an Enterprise SaaS Subscription Agreement (the "SaaS Agreement") with Clearpoint Analytics, Inc. ("Clearpoint"), a Delaware corporation headquartered in Chicago, Illinois, for the enterprise-wide deployment of Clearpoint's ClaimsIQ™ claims-analytics platform. This engagement is being opened under Matter Number 1025-00009 in the Firm's records. We understand that Quorum is a Delaware-incorporated, publicly traded insurance and financial technology holding company whose common stock is listed on the Nasdaq Stock Market under the ticker symbol QIHC.
The purpose of this engagement letter is to set forth, in a clear and comprehensive manner, the scope of our representation, the members of the Firm who will be principally responsible for this matter, our fee arrangements, and the respective responsibilities of the Firm and the Company. We ask that you review this letter carefully and, if its terms are acceptable, sign and return a copy to us as indicated below.
1. Scope of Representation
The Firm will represent Quorum in the review, negotiation, and execution of the SaaS Agreement and all related ancillary agreements with Clearpoint for the licensing of the ClaimsIQ™ claims-analytics platform. We understand that the anticipated total contract value of the SaaS Agreement is approximately Seven Million Dollars ($7,000,000) over a five-year initial subscription term, and that the transaction involves enterprise-wide deployment across Quorum's operating subsidiaries and affiliated entities.
Specifically, the services to be provided by the Firm in connection with this engagement include the following:
(a) Review and Analysis of Initial Form Agreement. Review and analysis of Clearpoint's initial form SaaS Subscription Agreement (and all exhibits, schedules, appendices, and order forms referenced therein) to identify provisions that are inconsistent with Quorum's standard licensing requirements, risk tolerances, and regulatory obligations.
(b) Negotiation and Drafting of Redlines. Negotiation and drafting of all revisions (redlines) to the SaaS Agreement, including iterative markup and comment exchanges with Clearpoint and its outside counsel, through to execution-ready final form.
(c) Data-Rights Provisions. Negotiation and drafting of comprehensive data-rights provisions, including, without limitation, provisions establishing Quorum's ownership of all Customer Data (as such term will be defined in the SaaS Agreement), provisions ensuring full data portability upon termination or expiration of the SaaS Agreement (including the right to export Customer Data in ACORD XML and CSV formats within a commercially reasonable timeframe), and restrictions on Clearpoint's use of aggregated, anonymized, or derived data generated from or in connection with Quorum's use of the ClaimsIQ™ platform.
(d) Indemnification Provisions. Negotiation of indemnification provisions, including the structuring of mutual indemnification obligations, the establishment of appropriate indemnification caps and baskets, the negotiation of carve-outs from any general limitation of liability (including, in particular, a carve-out for data-breach indemnification obligations), and the specification of indemnification procedures, notice requirements, and defense-and-settlement mechanics.
(e) Service Level Commitments. Negotiation of service level agreement (SLA) provisions, including the establishment of platform uptime thresholds (expressed as a monthly and/or annual availability percentage), the design of a service credit methodology (including credit calculation formulas and accrual caps), and the negotiation of chronic-failure termination rights permitting Quorum to terminate the SaaS Agreement without penalty in the event of repeated or sustained failures to meet agreed-upon service levels.
(f) Data Processing Addendum. Negotiation and drafting of a data processing addendum (DPA) to the SaaS Agreement, addressing compliance with applicable data privacy and data security laws and regulations, including, without limitation, the Connecticut Data Privacy Act (CTDPA, Conn. Gen. Stat. §§ 42-515 through 42-525), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the regulations promulgated thereunder (as applicable to Quorum's workers' compensation lines of business), and the NAIC Insurance Data Security Model Law as adopted and implemented in the State of Connecticut.
(g) Security Requirements. Review and negotiation of information security requirements to be imposed on Clearpoint, including, without limitation, requirements for Clearpoint to maintain a current SOC 2 Type II audit report (conducted by an independent, nationally recognized auditing firm), requirements for periodic penetration testing of the ClaimsIQ™ platform and infrastructure, requirements for Clearpoint to maintain adequate cyber-liability and errors-and-omissions insurance coverage, and encryption standards for data at rest and in transit (including, at minimum, AES-256 encryption for data at rest and TLS 1.2 or higher for data in transit).
(h) Source Code Escrow. Negotiation and review of source code escrow arrangements with a qualified third-party escrow agent, including the specification of release conditions that would trigger delivery of the escrowed source code and related materials to Quorum, with particular attention to release conditions addressing vendor insolvency (including voluntary and involuntary bankruptcy filings), cessation of business operations, material breach of the SaaS Agreement by Clearpoint, and failure to provide ongoing maintenance and support.
(i) Change of Control and Assignment. Review and negotiation of change-of-control and assignment provisions, including restrictions on Clearpoint's ability to assign the SaaS Agreement or undergo a change of control without Quorum's prior written consent, and the negotiation of appropriate protections for Quorum in the event of an acquisition of Clearpoint by a competitor of Quorum or by an entity that does not meet Quorum's vendor qualification standards.
(j) Subprocessor Rights. Review and negotiation of subprocessor consent and objection rights, including the right of Quorum to receive advance notice of proposed new subprocessors, the right to object to the engagement of specific subprocessors on reasonable grounds, and the obligation of Clearpoint to maintain appropriate flow-down contractual protections with all subprocessors processing Quorum's data.
(k) Coordination with Privacy Consultant. Coordination with Quorum's external data-privacy consultant, Dravello Data Compliance Advisors LLC, regarding data-mapping and privacy-impact assessment of the ClaimsIQ™ platform, and incorporation of findings and recommendations from such assessment into the SaaS Agreement and DPA as appropriate.
(l) Internal Memoranda. Preparation of internal memoranda for the benefit of Quorum's legal department and management, including a negotiation issues analysis identifying key risk areas and recommended positions, deal-points summaries for review by senior management and the board of directors (as applicable), and such other analytical memoranda as may be reasonably requested.
(m) Closing Procedures. Preparation of closing checklists, signature packages, and closing confirmation correspondence, and coordination of execution logistics with Clearpoint's counsel to facilitate timely closing of the SaaS Agreement.
(n) Other Related Services. Such other services as may be reasonably requested by Quorum in connection with this transaction and mutually agreed upon by the Firm and the Company.
It is understood and agreed that the scope of this engagement is limited to the SaaS transaction described herein. This engagement does not extend to any other matter unless separately agreed upon in a supplemental engagement letter or other written agreement executed by both the Firm and the Company. Without limiting the generality of the foregoing, this engagement does not include representation of Quorum in connection with any litigation, arbitration, or other dispute resolution proceedings; any regulatory proceedings, investigations, or examinations; any tax advice or tax-related opinions; or any intellectual property prosecution, registration, or portfolio management.
2. Engagement Team and Staffing
The Firm has assembled the following team of attorneys to handle this matter. Each team member has been selected for his or her relevant experience and familiarity with the legal and commercial issues that are anticipated to arise in connection with this transaction.
(a) Renata Vasquez, Partner — Ms. Vasquez will serve as the Responsible Partner for this engagement. Ms. Vasquez is a member of the Firm's Labor & Employment practice group and has been cross-staffed to this technology transaction given her deep familiarity with Quorum's operations, organizational structure, and regulatory environment, developed through her work on ongoing employment matters for the Company. In this capacity, Ms. Vasquez will provide overall strategic direction and supervision of the engagement team, participate in key negotiation sessions, and serve as the primary point of escalation for significant issues arising during the course of the transaction.
(b) Bernard Crawford, Partner — Mr. Crawford will serve as the Billing Partner for this engagement. Mr. Crawford is a member of the Firm's Labor & Employment practice group. In his capacity as Billing Partner, Mr. Crawford will manage the client billing relationship and financial administration of the engagement, including the review and approval of monthly invoices, the monitoring of fee expenditures against internal budgets, and the resolution of any billing questions or concerns that may arise.
(c) Nathan Ikeda, Associate — Mr. Ikeda will serve as the Lead Associate on this matter. Mr. Ikeda is a member of the Firm's Bankruptcy & Restructuring practice group and has been detailed to this engagement for his expertise in creditor-protection and data-rights issues. Mr. Ikeda has particular experience in structuring source code escrow arrangements and negotiating vendor insolvency protections in the context of technology transactions, and will take the lead on those aspects of the SaaS Agreement. Mr. Ikeda will also contribute to the analysis and negotiation of limitation of liability, indemnification, and termination provisions.
(d) Gabrielle Moss, Associate — Ms. Moss will serve as the Working Associate on this matter and will be the primary drafter of all redlines, memoranda, and correspondence generated by the Firm in connection with this engagement. Ms. Moss is a member of the Firm's Bankruptcy & Restructuring practice group. Ms. Moss will serve as the day-to-day contact for Quorum on this matter and will be responsible for coordinating the flow of documents and information between the Firm, Quorum, Clearpoint's counsel, and any third parties involved in the transaction.
The Firm reserves the right to assign additional attorneys or staff to this matter as may be necessary or appropriate, and will provide prior notice to Quorum of any material changes to the engagement team. Any such additional team members will be billed at their then-current standard hourly rates.
Day-to-day communications regarding this engagement should be directed to Gabrielle Moss at gmoss@calderwoodharkness.com or (860) 241-3318, with copies to Nathan Ikeda at nikeda@calderwoodharkness.com and Renata Vasquez at rvasquez@calderwoodharkness.com, as appropriate given the nature and urgency of the communication.
For your reference, we have identified the following as counterparty counsel in this transaction: Whitfield Greer & Associates LLP, represented by Damian Cho, Partner (Technology Transactions), and Leona Burris, Associate, located at 71 South Dearborn Street, Suite 4400, Chicago, IL 60603.
3. Fees and Billing Arrangements
The Firm will bill for this engagement on an hourly basis at the Firm's standard rates for the attorneys and professional staff assigned to this matter. The current hourly rates for the members of the engagement team are as follows:
These rates are the Firm's standard rates and are subject to periodic adjustment, typically on an annual basis effective January 1 of each year. Should any rate adjustment take effect during the course of this engagement, the Firm will provide Quorum with advance written notice of the revised rates.
Invoices for fees and disbursements will be rendered on a monthly basis and will include reasonable detail regarding the nature of the services performed, the identity of the timekeepers, the hours expended, and the disbursements incurred. Invoices are payable within thirty (30) days of receipt. If Quorum has any questions or concerns regarding an invoice, the Company is encouraged to contact Bernard Crawford promptly so that any issues can be addressed in a timely manner.
In addition to professional fees, the Firm will bill for reasonable out-of-pocket expenses incurred in connection with this engagement. Such expenses may include, but are not limited to, travel expenses (including transportation, lodging, and meals for travel required in connection with the engagement), filing fees, messenger and courier services, long-distance telephone and video conference charges, document reproduction and printing costs, computerized legal research charges, and similar disbursements. The Firm does not impose administrative surcharges on disbursements.
The Firm estimates that total fees for this engagement will fall within a range that is customary and appropriate for a technology licensing transaction of this nature and scope. However, actual fees will depend on a number of factors, including the complexity and duration of negotiations with Clearpoint and its counsel, the responsiveness of Clearpoint and Whitfield Greer & Associates LLP in returning comments and revised drafts, the number and significance of open issues that require extended negotiation, and any unforeseen legal or regulatory issues that may arise during the course of the transaction. As a result, the Firm is unable to provide a fixed fee or guaranteed fee cap for this engagement. The Firm is committed to staffing this matter efficiently and will endeavor to minimize unnecessary expenditures.
The Billing Partner, Bernard Crawford, is available at bcrawford@calderwoodharkness.com or (212) 554-7812 to discuss any billing questions, concerns, or requests for alternative fee arrangements at any time during the course of this engagement.
4. Client Responsibilities
In order for the Firm to provide effective and efficient legal services in connection with this engagement, Quorum's cooperation and timely assistance will be essential. Specifically:
(a) Internal Points of Contact. Quorum will designate internal points of contact for the Firm with respect to this engagement. We currently understand that the following individuals will serve in that capacity:
(i) Patricia Okonkwo, General Counsel — primary legal contact and authorized decision-maker with respect to legal strategy and approval of final agreement terms;
(ii) Derek Langston, Chief Information Officer — internal business sponsor for the ClaimsIQ™ deployment, responsible for coordinating technical due diligence and providing the Firm with information regarding Quorum's IT infrastructure, security requirements, and integration specifications; and
(iii) Malcolm Tsai, Vice President of Procurement — lead commercial negotiator, responsible for coordinating the business and financial terms of the SaaS Agreement and providing the Firm with background on prior commercial discussions with Clearpoint.
(b) Documents and Information. Quorum will promptly provide the Firm with all relevant documents, information, data, and access to personnel necessary for the Firm to perform the services described herein. This includes, but is not limited to, copies of any prior correspondence, term sheets, proposals, or draft agreements exchanged between Quorum and Clearpoint; information regarding Quorum's internal data governance and privacy policies; relevant insurance regulatory requirements applicable to Quorum's use of third-party analytics platforms; and any reports or assessments prepared by Dravello Data Compliance Advisors LLC.
(c) Timely Review and Feedback. Quorum will review and provide timely feedback on all drafts, redlines, memoranda, and other work product circulated by the Firm. Delays in providing feedback may impact the Firm's ability to meet target timelines for the transaction and may result in additional fees.
5. Confidentiality
The Firm will maintain the confidentiality of all information provided by Quorum in connection with this engagement, consistent with the Firm's professional obligations under the Connecticut Rules of Professional Conduct, the New York Rules of Professional Conduct, and all other applicable rules of professional conduct governing the attorneys assigned to this matter. The Firm will not disclose confidential information of the Company to any third party without the Company's prior written consent, except as may be required by law, court order, or applicable professional responsibility rules, or as may be necessary in connection with the performance of the Firm's services hereunder (for example, the sharing of negotiation positions with counterparty counsel in the ordinary course of the transaction).
The Firm acknowledges that Quorum is a publicly traded company whose securities are listed on the Nasdaq Stock Market. The Firm and all members of the engagement team are aware of their obligations under the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, with respect to material non-public information concerning Quorum that may come into the Firm's possession during the course of this engagement. The Firm maintains internal policies and procedures designed to prevent the misuse of material non-public information and will ensure that all members of the engagement team are reminded of these obligations.
6. Conflicts of Interest
The Firm has conducted a conflicts check in accordance with its standard procedures and, based on the information currently available to the Firm, has identified no conflicts of interest that would preclude the Firm from undertaking this engagement. Specifically, the Firm confirms that it does not currently represent Clearpoint Analytics, Inc., Ridgeway Capital Partners, LP (which we understand to be Clearpoint's majority institutional investor), or any of their respective affiliates, subsidiaries, officers, or directors in any matter, whether pending or contemplated.
If a conflict of interest arises during the course of this engagement, the Firm will promptly notify Quorum of the nature and circumstances of the conflict and will take appropriate action consistent with applicable rules of professional responsibility, which may include seeking a waiver from the affected parties or, if a waiver is not obtainable or appropriate, withdrawing from the engagement. The Firm appreciates Quorum's cooperation in promptly providing information that may be relevant to the Firm's ongoing conflicts-monitoring obligations.
7. Document Retention
The Firm will maintain all files, documents, and work product related to this engagement in accordance with the Firm's standard document retention policies, which are available for review upon request. These policies provide for the retention of closed-matter files for a period of ten (10) years following the conclusion of the engagement, after which the files may be destroyed in the ordinary course without further notice to the Company, unless the Company has previously requested the return of such files or has provided written instructions to the contrary.
Upon the conclusion of the engagement, the Firm will, upon Quorum's written request, return all original client documents to the Company. Copies of documents and work product generated by the Firm may be retained in accordance with the Firm's document retention policies and applicable professional responsibility obligations.
8. Termination of Engagement
Either the Firm or Quorum may terminate this engagement at any time upon written notice to the other party. In the event of termination by either party, Quorum will remain responsible for the payment of all fees and expenses incurred by the Firm through the effective date of termination, and the Firm will render a final invoice for such amounts within thirty (30) days following the effective date of termination.
Upon termination, the Firm will take all reasonable steps necessary to protect Quorum's interests during any transition period, including cooperating with successor counsel, transferring files and work product, and providing such other assistance as may be reasonably necessary to facilitate an orderly transition. The Firm's obligations under Sections 5 (Confidentiality) and 7 (Document Retention) of this letter shall survive the termination of this engagement.
9. Governing Law
This engagement letter and the relationship between the Firm and Quorum arising hereunder shall be governed by and construed in accordance with the laws of the State of Connecticut, 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 Quorum hereunder shall be subject to the exclusive jurisdiction of the state and federal courts located in Hartford County, Connecticut.
10. Acceptance and Acknowledgment
We respectfully request that you signify Quorum's agreement to the terms set forth in this engagement letter by signing the acknowledgment below and returning a signed copy of this letter to the Firm at your earliest convenience. A signed copy may be returned via email (as a scanned PDF) to Gabrielle Moss at gmoss@calderwoodharkness.com, with a hard copy to follow by U.S. mail to the Firm's Hartford office at the address set forth above.
The signed engagement letter will constitute the entire agreement between the Firm and Quorum with respect to the scope and terms of this engagement and supersedes any prior discussions, understandings, or agreements, whether written or oral, relating to the subject matter hereof. No amendment or modification of this engagement letter shall be effective unless made in writing and signed by both parties.
We are pleased to have the opportunity to represent Quorum in connection with this important technology transaction and look forward to working with you, Mr. Langston, Mr. Tsai, and the broader Quorum team to achieve a favorable outcome.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Renata Vasquez
Title: Partner — Responsible Partner
Date: March 4, 2024
By: ________
Name: Bernard Crawford
Title: Partner — Billing Partner
Date: March 4, 2024
AGREED AND ACCEPTED
The undersigned, duly authorized on behalf of Quorum Insurance Holdings Corp., hereby agrees to and accepts the terms and conditions set forth in the foregoing engagement letter, dated March 4, 2024, and confirms the engagement of Calderwood & Harkness LLP to represent the Company in connection with the matters described therein.
QUORUM INSURANCE HOLDINGS CORP.
By: ________
Name: Patricia Okonkwo
Title: General Counsel
Date: ________
Matter Number: 1025-00009
CONFIDENTIALITY NOTICE: This engagement letter and any accompanying documents are confidential and may be subject to the attorney-client privilege. This communication is intended solely for the use of the individual or entity to whom it is addressed. If you are not the intended recipient, or an employee or agent responsible for delivering this communication to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify Calderwood & Harkness LLP immediately by telephone at (212) 554-7800 and return the original communication to us at the address set forth above.
Attorney | Position | Current Hourly Rate
Renata Vasquez | Partner | $1,150
Bernard Crawford | Partner | $1,100
Nathan Ikeda | Associate (6th Year) | $785
Gabrielle Moss | Associate (4th Year) | $685
Paralegals / Legal Assistants | Staff | $325–$395

CONFIDENTIAL

CALDERWOOD & HARKNESS LLP

AGREED AND ACCEPTED

QUORUM INSURANCE HOLDINGS CORP.

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