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MEMORANDUM

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT

From: Christopher Aiken, Lead Associate, and Amy Whitfield, Working Associate, Calderwood & Harkness LLP

To: Joel Strauss, Responsible Partner, Calderwood & Harkness LLP; Marcus D. Pruitt, J.D., General Counsel, Thornwick Medical Research Institute, Inc.

Date: February 10, 2026

Re: Analysis of Contested Indemnification Provisions — Clinical Trial Agreement for the Cadence-3 Trial (ThornValve MV-200 System) between Thornwick Medical Research Institute, Inc. and Hargrove University Medical Center, Inc.

Matter No.: 1029-00001

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I. Executive Summary

The purpose of this memorandum is to provide a comprehensive analysis of the contested indemnification provisions in the draft Clinical Trial Agreement ("CTA") between Thornwick Medical Research Institute, Inc. ("TMRI") and Hargrove University Medical Center, Inc. ("HUMC") for the Cadence-3 Trial. The Cobalt Ridge Health IT-3 Trial is a prospective, single-arm, open-label feasibility study of the ThornValve MV-200 System for transcatheter mitral valve repair (ClinicalTrials.gov Identifier NCT06198234; Investigational Device Exemption No. G260012). The total CTA value is $6,000,000, funded through TMRI internal grant award TMRI-CV-2025-018.

On February 7, 2026, Pemberton, Yates & Caldwell LLP ("PY&C"), outside counsel to HUMC, circulated a comprehensive redline of the initial draft CTA that had been transmitted by Calderwood & Harkness on January 28, 2026. The PY&C redline proposes significant expansions to TMRI's indemnification obligations under the CTA and, correspondingly, seeks to narrow HUMC's reciprocal indemnification obligations to TMRI. If accepted in their current form, the PY&C proposals would materially alter the risk allocation framework of the CTA in HUMC's favor and expose TMRI to indemnification obligations that are disproportionate to its role as a nonprofit research sponsor and inconsistent with the insurance coverage it maintains.

This memorandum compares the parties' respective positions across five contested sub-issues within the indemnification article:

1. Scope of Indemnification — the triggering events and causal standards defining when TMRI's indemnification obligation arises;

2. Aggregate Indemnification Cap — the maximum dollar amount of TMRI's indemnification exposure over the life of the CTA;

3. Notice Period for Claims — the time frame within which HUMC must notify TMRI of claims or threatened claims triggering indemnification;

4. Defense Control and Right to Participate — the allocation of authority over the defense and settlement of indemnified claims, including HUMC's right to engage separate counsel; and

5. Mutual Indemnification Standard — the applicable standard of conduct (ordinary negligence versus gross negligence) governing HUMC's reciprocal indemnification obligation to TMRI, and the treatment of protocol deviations and informed consent failures.

For each sub-issue, we set forth TMRI's current draft position, HUMC's redline position, a comparative analysis grounded in Massachusetts law and industry practice, and a recommended compromise position designed to protect TMRI's core interests while providing a framework for productive negotiation.

In summary, we recommend that TMRI be prepared to offer meaningful concessions on the aggregate cap amount (from $10,000,000 to $15,000,000) and on the notice period (from 15 business days to 20 business days with a prejudice qualifier), while holding firm on scope limitations that tie TMRI's indemnification obligation to enumerated categories of device-related and sponsor-fault claims and declining the "arising out of or relating to" formulation proposed by PY&C. TMRI should also retain primary control of the defense of indemnified claims, while accommodating HUMC's request for participation rights through separate counsel in cases of actual conflict of interest, subject to reasonable guardrails and fee caps. On the mutual indemnification standard, TMRI should insist on an ordinary negligence standard for protocol deviations and informed consent failures, even if a higher standard is accepted for other categories of HUMC conduct.

These recommended compromise positions are intended for use in the negotiation call scheduled for February 12, 2026, with PY&C attorneys Rebecca S. Norcross, Partner, and Daniel F. Huang, Associate. We respectfully request authorization from Mr. Pruitt and Dr. Elaine K. Sutherland, TMRI's Chief Scientific Officer, to present these positions on the call.

II. Background and Procedural History

A. The Cadence-3 Trial

Cobalt Ridge Health IT-3 is TMRI's third investigator-initiated feasibility study evaluating the ThornValve MV-200 System, a transcatheter mitral valve repair device designed for percutaneous treatment of moderate-to-severe mitral regurgitation. The ThornValve MV-200 System is a proprietary device developed by TMRI's Cardiovascular Device Division and is currently available only for investigational use under an Investigational Device Exemption ("IDE") issued by the U.S. Food and Drug Administration (IDE No. G260012). The two prior feasibility studies — Cadence-1 (completed 2022) and Cadence-2 (completed 2024) — demonstrated acceptable safety profiles and preliminary evidence of efficacy, and the Cadence-3 study is designed to evaluate the updated MV-200 System platform (incorporating design modifications based on Cadence-1 and Cobalt Ridge Health IT-2 data) in a broader patient population.

The Cadence-3 Trial is a single-site study to be conducted at Hargrove University Medical Center, located at 1400 Sterling Heights Boulevard, New Haven, Connecticut 06510. HUMC was selected as the sole clinical site based on its nationally recognized structural heart interventions program, which performs approximately 650 transcatheter valve procedures annually, and the expertise of the proposed Principal Investigator.

The planned enrollment is 45 subjects, each of whom will undergo implantation of the ThornValve MV-200 System and be followed for a minimum of 24 months post-procedure. The estimated total study duration from first patient enrollment to last patient last visit is 36 months. Based on current projections, first patient enrollment is estimated for April 7, 2026, with estimated study completion on June 30, 2029.

The designated Principal Investigator is Dr. Julian M. Castañeda, M.D., FACC, Professor of Cardiovascular Medicine at Hargrove University School of Medicine and Director of the Structural Heart Interventions Program at HUMC. Dr. Castañeda is an internationally recognized authority in transcatheter mitral valve therapies and has published extensively on novel device platforms for mitral regurgitation. The designated Sub-Investigator is Dr. Hannah L. Forsberg, M.D., Associate Professor of Cardiovascular Medicine at Hargrove University School of Medicine, who specializes in cardiac imaging and intraprocedural guidance for structural heart interventions.

The Cadence-3 Protocol received approval from the HUMC Institutional Review Board on December 18, 2025 (Protocol No. HUMC-IRB-2025-0847). The IRB approval letter authorizes the commencement of subject screening and enrollment upon execution of all required agreements between TMRI and HUMC, including the CTA at issue.

Separately, TMRI has engaged Meridian Clinical Sciences, Inc. as the contract research organization ("CRO") for the Cadence-3 Trial. Meridian will be responsible for data management, electronic data capture system deployment, biostatistical analysis, and safety monitoring support. The Meridian master services agreement was executed on November 22, 2025. An independent Data Safety Monitoring Board ("DSMB") was constituted in November 2025, chaired by Dr. Garrett P. Lindholm, M.D., Ph.D., Professor of Biostatistics and Epidemiology at Ellsworth University, and is tasked with ongoing review of safety data and the authority to recommend trial suspension or termination based on predefined stopping rules.

B. Negotiation Timeline

Calderwood & Harkness's engagement on this matter was formally opened on January 15, 2026, following a retention letter executed by Mr. Pruitt on behalf of TMRI. The engagement scope encompasses drafting and negotiation of the CTA, as well as related ancillary agreements (including the informed consent form addendum and the data transfer agreement), and advisory services regarding indemnification, intellectual property, and publication rights.

The first draft of the CTA was prepared by Calderwood & Harkness and circulated to HUMC's outside counsel, PY&C, on January 28, 2026. The initial draft was developed in consultation with Mr. Pruitt, Dr. Sutherland, and Dr. Meredith A. Klein (TMRI's Vice President for Clinical Affairs), and reflected TMRI's established template for investigator-initiated feasibility trial agreements, with modifications specific to the Cobalt Ridge Health IT-3 protocol and the ThornValve MV-200 device platform.

PY&C's comprehensive redline was received on February 7, 2026, accompanied by a cover letter from Ms. Norcross summarizing HUMC's principal concerns. The redline contains substantial revisions to the indemnification provisions (Article IX), the intellectual property provisions (Article VII), and the publication rights provisions (Article VIII). This memorandum addresses only the indemnification provisions; intellectual property and publication rights will be analyzed in a separate memorandum to be circulated by Calderwood & Harkness on or before February 18, 2026.

A negotiation call focused on the indemnification provisions is scheduled for February 12, 2026, at 2:00 p.m. Eastern Time. Participants on the TMRI side are expected to include Mr. Pruitt, Mr. Strauss, and Mr. Aiken. PY&C participants are expected to include Ms. Norcross and Mr. Huang. The parties have agreed that the February 12 call will be limited to indemnification issues, with intellectual property and publication rights to be addressed on a separate call tentatively scheduled for February 21, 2026.

The target execution date for the CTA is March 2, 2026. This date is driven by TMRI's need to include the fully executed CTA as part of its IDE supplement filing with the FDA, which must be submitted by March 15, 2026, to avoid delays to the Cobalt Ridge Health IT-3 enrollment timeline. Both parties have acknowledged the importance of meeting this execution target, and the negotiation schedule has been structured accordingly.

C. TMRI's Status as Sponsor

TMRI is a Massachusetts nonprofit corporation organized under Massachusetts General Laws Chapter 180, holding tax-exempt status under Section 501(c)(3) of the Internal Revenue Code (Employer Identification Number 04-3871256). TMRI is headquartered at 280 Longmeadow Drive, Cambridge, Massachusetts 02139. The Institute's annual research budget for fiscal year 2025 was approximately $74 million, funded through a combination of federal grants (approximately 42%), institutional endowment income (approximately 28%), industry-sponsored research agreements (approximately 18%), and philanthropic contributions (approximately 12%).

TMRI occupies a dual role in the Cobalt Ridge Health IT-3 Trial that is relevant to the indemnification analysis: it serves as both the developer of the ThornValve MV-200 System and the regulatory sponsor of the clinical trial under the IDE. This dual role distinguishes TMRI from a purely academic institution conducting a study with a device manufactured by a separate commercial entity. Because TMRI designed and manufactured the ThornValve MV-200 System, it bears product liability exposure in addition to the standard obligations of a clinical trial sponsor. This dual exposure is a central factor in the indemnification negotiation, as it means that TMRI cannot credibly disclaim responsibility for the safety characteristics of the device and must accept some level of device-related indemnification beyond narrow defect claims. At the same time, TMRI's nonprofit status and finite financial resources distinguish it from a for-profit device manufacturer with access to deeper reserves and broader insurance programs.

HUMC is a Connecticut nonprofit corporation (Employer Identification Number 06-2194738) operating a 726-bed academic medical center affiliated with Hargrove University School of Medicine. HUMC's structural heart program is one of the highest-volume programs in the northeastern United States, performing approximately 650 transcatheter valve procedures annually and maintaining active participation in multiple investigator-initiated and industry-sponsored clinical trials. HUMC's institutional stature and the expertise of Dr. Castañeda are significant factors in the Cobalt Ridge Health IT-3 Trial; the credibility and quality of the study data are directly linked to the site's capabilities. This mutual dependence is relevant context for the negotiation, as both parties have strong incentives to reach agreement on acceptable terms.

III. Comparison of the Parties' Indemnification Positions

This section provides a detailed comparison of the parties' positions on each of the five contested sub-issues within the indemnification article, together with our analysis of the merits of each position and the relevant legal and practical considerations.

A. Scope of Indemnification

1. TMRI's Position (Current Draft — January 28, 2026)

Under the initial draft CTA circulated by Calderwood & Harkness, TMRI will provide indemnification to HUMC, the Principal Investigator (Dr. Castañeda), the Sub-Investigator (Dr. Forsberg), and HUMC's authorized study staff who are directly involved in the conduct of the Cobalt Ridge Health IT-3 Trial (collectively, the "Indemnified Parties"). The indemnification obligation extends to third-party claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and costs of defense) arising from:

(a) The design, manufacture, or inherent defect of the ThornValve MV-200 System, including any claim that the device was defective in design, manufacturing, or materials; and

(b) TMRI's negligence or willful misconduct in performing its obligations under the CTA, including its obligations as trial sponsor under 21 C.F.R. Part 812 and applicable FDA guidance.

This formulation reflects a narrow, enumerated-trigger approach that ties TMRI's indemnification obligation specifically to two categories of claims: (i) product-related claims based on defect in the investigational device, and (ii) claims based on TMRI's own fault in its capacity as sponsor. The language was drafted to provide meaningful protection for the Indemnified Parties against the core risks associated with participation in an investigational device trial — namely, that the device itself may prove to be defective or that the sponsor may fail to meet its regulatory and contractual obligations — while limiting TMRI's exposure to claims that are causally connected to TMRI's conduct or its device.

2. HUMC's Position (PY&C Redline — February 7, 2026)

The PY&C redline substantially expands the scope of TMRI's indemnification obligation. Under the redline, TMRI would indemnify the Indemnified Parties for all third-party claims "arising out of or relating to" the investigational device, "including but not limited to" claims based on:

(a) The design, manufacture, defect, labeling, instructions for use, or any characteristic of the ThornValve MV-200 System;

(b) Any adverse event, serious adverse event, unanticipated adverse device effect, or patient injury associated with the use of the investigational device;

(d) Any regulatory action, government investigation, or enforcement proceeding relating to the investigational device or the conduct of the trial; and

(e) Any recall, corrective action, or field safety notice relating to the investigational device.

The critical difference between the parties' positions is the overarching causal standard. TMRI's draft uses "arising from" with specific enumerated triggers limited to defect and sponsor fault. HUMC's redline uses "arising out of or relating to" as the overarching standard, followed by an illustrative (non-exhaustive) list of covered claims introduced by "including but not limited to." The phrase "arising out of or relating to" is a term of art in indemnification drafting that courts have consistently interpreted as imposing a broader causal nexus than "arising from" or "caused by." The addition of "relating to" in particular sweeps in claims that have only an attenuated connection to the enumerated triggers and could encompass claims that are not directly caused by a defect in the device or by TMRI's fault.

Moreover, the PY&C redline adds several categories of claims not present in TMRI's draft. Subclause (b) would require TMRI to indemnify HUMC for any adverse event "associated with" use of the device, regardless of whether the event resulted from a defect in the device, physician error, patient comorbidities, or other causes unrelated to TMRI's conduct. This formulation effectively converts TMRI's indemnification obligation into a form of strict liability for all adverse outcomes associated with the investigational device. Subclause (d) extends indemnification to regulatory actions and government investigations, which could include FDA inspections, warning letters, or enforcement actions that may relate as much to HUMC's site-level compliance failures as to the device itself. Subclause (e) covers recalls and corrective actions, which, while more closely tied to TMRI's product responsibilities, could impose indemnification obligations for actions taken voluntarily by TMRI as a matter of prudent risk management rather than in response to a proven defect.

3. Analysis. The breadth of HUMC's proposed "arising out of or relating to" language, coupled with the expansive illustrative list, would expose TMRI to indemnification obligations in circumstances where the ThornValve MV-200 System performed exactly as designed but a patient nonetheless experienced an adverse clinical outcome. In the context of a feasibility study involving a novel transcatheter device in patients with significant underlying cardiac disease, adverse events are an expected component of the clinical data. Not all adverse events are attributable to device defects; they may result from patient-specific anatomical or physiological factors, procedural technique, concomitant medications, or the natural progression of the underlying disease. TMRI should not be required to indemnify HUMC for adverse outcomes that are inherent in the clinical context and not causally linked to a deficiency in the device or TMRI's conduct.

This concern is heightened by the investigator-initiated nature of the Cobalt Ridge Health IT-3 Trial. In investigator-initiated studies, the Principal Investigator exercises substantially greater autonomy in patient selection, procedural planning, device sizing, implantation technique, and post-procedural management compared to industry-sponsored trials, where the sponsor's protocol and monitoring activities exert more direct control over clinical decision-making. The PI's exercise of independent clinical judgment in an investigator-initiated trial means that outcomes are influenced by factors within the PI's and the institution's control, and it would be inappropriate for TMRI to bear indemnification responsibility for the full spectrum of claims "relating to" the device without regard to the source of the adverse outcome.

At the same time, TMRI's dual role as both device developer and trial sponsor means that it cannot credibly limit its indemnification obligation solely to claims based on proven manufacturing defects. TMRI designed the ThornValve MV-200 System, developed its instructions for use, and determined its safety profile based on the prior Cobalt Ridge Health IT-1 and Cobalt Ridge Health IT-2 studies. TMRI bears inherent responsibility for the safety characteristics of the device platform, including known risks that are disclosed in the investigator's brochure and informed consent form. Some broadening of the indemnification scope beyond the narrow "inherent defect" formulation is therefore reasonable and may be necessary to reach agreement with HUMC.

We recommend, as discussed in Section VII.A below, a moderate broadening that adds "safety characteristics" of the device to the enumerated triggers and includes TMRI's material breach of the CTA as an additional trigger, while rejecting the "arising out of or relating to" formulation and the expansion to regulatory actions, government investigations, and all adverse events regardless of causation.

B. Aggregate Indemnification Cap

1. TMRI's Position (Current Draft — January 28, 2026)

The initial draft CTA proposes an aggregate indemnification cap of $10,000,000. This figure was selected to match the per-occurrence limit under TMRI's clinical trial liability insurance policy with Commonwealth Specialty Underwriters, Inc. (Policy No. CTL-2025-08843), which provides coverage of $10,000,000 per occurrence and $25,000,000 in the aggregate for the policy period of January 1, 2026, through December 31, 2027.

TMRI's rationale for aligning the cap with the per-occurrence limit is straightforward: as a nonprofit research institution with finite financial resources, TMRI must limit its contractual indemnification exposure to amounts that are fully insured. The per-occurrence limit of $10,000,000 represents the maximum amount recoverable under the policy for any single claim or group of related claims, and TMRI's position is that this amount provides substantial protection for HUMC while ensuring that TMRI's indemnification commitment is backed by insurance coverage. Any indemnification obligation exceeding insured limits would be payable from TMRI's general operating funds, which are restricted by the Institute's nonprofit mission and fiduciary obligations.

2. HUMC's Position (PY&C Redline — February 7, 2026)

HUMC proposes two alternative positions on the aggregate cap, either of which it considers acceptable:

(a) Primary position: Remove the aggregate cap entirely, resulting in an uncapped indemnification obligation; or

(b) Alternative position: Increase the aggregate cap to $25,000,000, matching TMRI's aggregate policy limit under the Commonwealth Specialty policy.

In PY&C's cover letter accompanying the redline, Ms. Norcross argues that capping TMRI's indemnification obligation at the per-occurrence limit of $10,000,000 fails to protect HUMC adequately in a multi-claim scenario. She notes that a 45-subject trial with a 24-month follow-up period creates the possibility of multiple independent claims arising from separate adverse events in different subjects, and that the aggregate of such claims could exceed $10,000,000. Ms. Norcross further argues that TMRI's aggregate coverage of $25,000,000 under the Commonwealth Specialty policy represents the "true ceiling" of TMRI's insured indemnification capacity and that TMRI should be willing to commit to indemnification at the full level of its insurance coverage.

3. Analysis. HUMC's primary position — uncapped indemnification — is inappropriate for a nonprofit sponsor and inconsistent with prevailing industry norms for investigator-initiated clinical trial agreements. An uncapped indemnification obligation would expose TMRI to theoretically unlimited financial liability, which is fundamentally incompatible with the fiduciary obligations of TMRI's directors and officers to manage the Institute's resources in accordance with its charitable mission. Moreover, uncapped indemnification is rarely seen even in industry-sponsored trials conducted by well-capitalized commercial device manufacturers; it is virtually unheard of in the investigator-initiated trial context, where the risk allocation framework typically reflects the shared nature of the undertaking.

HUMC's alternative position — a $25,000,000 cap equal to TMRI's aggregate policy limit — is more reasonable on its face but presents significant practical concerns. The aggregate limit of $25,000,000 under the Commonwealth Specialty policy is not specific to the Cobalt Ridge Health IT-3 Trial; it represents the total aggregate coverage available to TMRI across its entire portfolio of insured clinical trials during the policy period. As of the date of this memorandum, TMRI has four other active clinical trials insured under the same policy. Setting the Cobalt Ridge Health IT-3 CTA cap at $25,000,000 would mean that a single trial could, in theory, consume the entirety of TMRI's aggregate coverage, leaving no insurance capacity for claims arising from the other insured trials. This would be imprudent from a portfolio risk management perspective and could expose TMRI's other clinical programs to uninsured liability.

The $10,000,000 per-occurrence cap proposed by TMRI, when used as an aggregate cap, is admittedly conservative for a 45-subject trial with a 36-month total duration. While the per-occurrence limit provides robust coverage for any single claim, the aggregate exposure across multiple subjects and multiple potential claims could exceed this amount. HUMC's concern about multi-claim scenarios is not unreasonable — a systemic device issue affecting multiple subjects, for example, could generate claims with a combined value exceeding $10,000,000.

We therefore recommend, as set forth in Section VII.B below, a compromise aggregate cap of $15,000,000, which exceeds the per-occurrence limit, provides meaningful multi-claim protection for HUMC, and remains within TMRI's aggregate policy capacity while preserving headroom for other trial exposures.

TMRI's annual research budget of approximately $74 million provides useful context for assessing financial capacity but should not be overstated. Research budgets are largely committed to ongoing programs and grant obligations, and the proportion available for contingent indemnification liabilities is limited. TMRI's nonprofit status further constrains its ability to absorb large uninsured losses, as any material financial impairment could affect the Institute's ability to fulfill its charitable mission and maintain its tax-exempt status.

C. Notice Period for Claims

1. TMRI's Position (Current Draft — January 28, 2026)

The initial draft CTA requires HUMC to provide prompt written notice to TMRI within fifteen (15) business days of the date on which HUMC first obtains knowledge of a claim or threatened claim that may give rise to an indemnification obligation under the CTA. The notice must include a description of the claim, the identity of the claimant, the amount of damages sought (if known), and copies of any relevant correspondence, pleadings, or other documents received by HUMC.

TMRI's rationale for the 15-business-day notice period is grounded in practical considerations of insurance coordination and defense preparation. Prompt notice is essential for TMRI to fulfill its own notice obligations to Commonwealth Specialty under Policy CTL-2025-08843 and to ensure that coverage is not jeopardized by late reporting. Additionally, early awareness of claims enables TMRI to investigate the underlying facts, preserve relevant evidence (including device-related records, clinical data, and manufacturing documentation), and engage defense counsel before positions have hardened or evidence has been lost.

2. HUMC's Position (PY&C Redline — February 7, 2026)

HUMC's redline extends the notice period to thirty (30) business days. In PY&C's cover letter, Mr. Huang explains that HUMC's internal processes for identifying and escalating potential claims involve multiple layers of review and approval, including initial assessment by HUMC's Office of Risk Management, review by the legal department under the supervision of HUMC's Senior Vice President for Research Administration, Leonard B. Ostrowski, and consultation with institutional counsel. Mr. Huang contends that 15 business days is insufficient for this multi-layered review process, particularly for claims that initially present as clinical complaints or patient grievances and only later crystallize into potential legal claims, and that the 30-business-day period is necessary to ensure that HUMC provides substantive and accurate notice rather than premature or incomplete notifications.

3. Analysis. Both positions have merit, and this issue lends itself to compromise. Fifteen business days (equivalent to approximately three calendar weeks) is an aggressive notice period for an academic medical center with the organizational complexity of HUMC. Large teaching hospitals and research institutions typically have multi-tiered risk management structures in which potential claims must be identified, evaluated, and escalated through several departments before a formal notice of claim is issued to a contractual indemnitor. The practical reality is that many potential claims in the clinical trial context do not present themselves as clear legal demands upon first notice; they may begin as adverse event reports, patient complaints, or communications from patients' counsel that require investigation and assessment before their indemnification implications can be determined.

On the other hand, 30 business days (equivalent to approximately six calendar weeks) is generous by industry standards and could materially impair TMRI's ability to respond promptly to claims. A six-week delay between HUMC's first knowledge of a claim and notification to TMRI could result in loss of critical evidence, allow the claimant's position to solidify, and complicate TMRI's engagement of defense counsel and development of a defense strategy. More importantly, Commonwealth Specialty's policy likely contains its own notice-of-claim requirements, and a delay by TMRI in reporting claims to its insurer — caused by late notice from HUMC — could result in a coverage denial, which would undermine the entire purpose of maintaining the insurance and effectively shift the indemnification obligation from the insurer to TMRI's operating funds.

In our review of comparable CTAs for investigator-initiated trials, notice periods range from 10 to 30 business days, with the most common range being 15 to 20 business days. A period of 20 business days (approximately four calendar weeks) represents a reasonable middle ground that accommodates HUMC's institutional processes while providing TMRI with sufficient time to coordinate with its insurer and prepare a response.

We further recommend the inclusion of a "prejudice" qualifier in the notice provision. Under this approach, HUMC's failure to provide timely notice within the agreed period would not automatically release TMRI from its indemnification obligation; rather, TMRI would be relieved of its obligation only if it can demonstrate that it was materially prejudiced by the delay in notice. This formulation is consistent with the modern trend in indemnification drafting, particularly in the academic medical center context, and provides an equitable balance: HUMC is protected from the harsh consequence of losing its indemnification rights due to a technical notice failure, while TMRI retains the ability to assert a defense if late notice actually impairs its position. The prejudice standard also aligns with Massachusetts law principles governing notice under insurance policies, where the trend has been toward requiring a showing of actual prejudice before denying coverage based on late notice.

D. Defense Control and Right to Participate

1. TMRI's Position (Current Draft — January 28, 2026)

Under the initial draft CTA, TMRI has the sole right to control the defense and settlement of any claim for which indemnification is sought under the agreement. This includes the right to select defense counsel, direct litigation strategy, make all tactical and strategic decisions in the course of the defense, and exercise full settlement authority, including the authority to settle claims on terms TMRI deems appropriate. HUMC and the other Indemnified Parties may participate in the defense at their own expense through counsel of their choosing, but they may not direct or control the defense strategy or settlement discussions.

This formulation reflects the standard approach to defense control in indemnification provisions: the party bearing the financial obligation of indemnification (the indemnitor) controls the defense and settlement of the indemnified claims. This principle is both economically logical — the party paying for the defense should control its conduct — and practically necessary to ensure coherent and efficient defense management.

2. HUMC's Position (PY&C Redline — February 7, 2026)

HUMC does not dispute TMRI's right to control the defense in the ordinary course. However, PY&C's redline adds a provision granting HUMC the right to participate in the defense through separate counsel at TMRI's expense if a conflict of interest exists between TMRI and HUMC, or between TMRI and the Principal Investigator or Sub-Investigator. In PY&C's cover letter, Ms. Norcross characterizes this as a "standard provision in academic medical center clinical trial agreements" and argues that it is necessary to protect HUMC's institutional interests, which she identifies as including institutional reputation, accreditation status with The Joint Commission and other accrediting bodies, medical staff credentialing, and the individual professional interests of Dr. Castañeda and Dr. Forsberg.

Ms. Norcross's letter does not specify the circumstances under which a conflict of interest would be deemed to exist, nor does it propose any cap on the fees of HUMC's separate counsel.

3. Analysis. HUMC's request for the right to participate in the defense with separate counsel at TMRI's expense when a conflict of interest exists is a well-recognized provision in clinical trial agreements involving academic medical centers, and it is defensible from HUMC's perspective. The concern underlying this request is that TMRI's interests as both device developer and trial sponsor may, in certain claim scenarios, diverge from the interests of HUMC and its investigators in ways that make it inappropriate for TMRI to serve as the sole voice in the defense.

The most commonly cited conflict scenario in this context is one in which TMRI's defense strategy involves attributing an adverse outcome to the PI's procedural technique, patient selection decisions, or post-procedural management rather than to a defect or safety issue with the ThornValve MV-200 System. In such a scenario, TMRI's interest in deflecting product liability exposure would directly conflict with the PI's interest in defending his or her professional conduct and reputation, and with HUMC's interest in protecting its institutional standing and the credentialing status of its physicians. Under these circumstances, it would be unreasonable to expect HUMC and its physicians to rely on counsel selected and directed by TMRI to protect their interests.

We therefore recommend that TMRI accommodate HUMC's request for conflict-of-interest participation rights, subject to the following guardrails designed to prevent abuse and manage costs:

(a) The conflict of interest must be actual, not merely theoretical or speculative. HUMC must provide written notice to TMRI identifying the specific conflict and the factual basis for its determination that the conflict exists.

(b) Upon receipt of HUMC's conflict notice, TMRI should have a reasonable opportunity (not less than ten business days) to cure or address the conflict — for example, by modifying its defense strategy to eliminate the conflict, by retaining joint counsel acceptable to both parties, or by other means.

(c) If the conflict cannot be resolved, TMRI will bear the reasonable fees and expenses of HUMC's separate counsel, subject to a cap of $250,000 per claim absent mutual written agreement on a higher amount. This cap ensures that TMRI's defense costs remain manageable and that HUMC's separate counsel engagement is proportionate to the interests at stake.

(d) HUMC's separate counsel must cooperate with TMRI's lead defense counsel and may not take positions in the litigation that are materially inconsistent with the overall defense strategy, except to the extent necessary to protect the specific interests giving rise to the conflict.

Additionally, the settlement provision should be modified to require that no settlement of an indemnified claim may be entered into that imposes non-monetary obligations on, admits liability by, or attributes fault to HUMC, the PI, or any member of the study staff without HUMC's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. This is a standard protection for indemnitees and is distinct from the defense control issue; TMRI should retain ultimate settlement authority as to monetary terms while ensuring that settlements do not prejudice HUMC's institutional or reputational interests.

E. Mutual Indemnification Standard

1. TMRI's Position (Current Draft — January 28, 2026)

Under the initial draft CTA, HUMC will indemnify TMRI and its directors, officers, employees, and agents for third-party claims arising from:

(a) HUMC's negligence or willful misconduct in performing its obligations under the CTA;

(b) The PI's or Sub-Investigator's negligence or willful misconduct in the conduct of the Cobalt Ridge Health IT-3 Trial;

(c) Any material deviation by HUMC, the PI, the Sub-Investigator, or authorized study staff from the approved Protocol (HUMC-IRB-2025-0847); or

(d) Any failure by HUMC, the PI, the Sub-Investigator, or authorized study staff to obtain, document, or maintain valid informed consent from study subjects in accordance with 21 C.F.R. Part 50 and the approved informed consent form.

This formulation applies an ordinary negligence standard to HUMC's reciprocal indemnification obligation and expressly enumerates protocol deviation and informed consent failure as separate triggers, independent of the general negligence analysis.

2. HUMC's Position (PY&C Redline — February 7, 2026)

HUMC's redline narrows the reciprocal indemnification in two significant ways:

First, HUMC replaces the ordinary negligence standard with a gross negligence/willful misconduct standard. Under HUMC's proposed language, HUMC would indemnify TMRI only for claims arising from HUMC's or its personnel's "gross negligence or willful misconduct" in the performance of their obligations under the CTA.

Second, HUMC deletes the express enumeration of protocol deviation and informed consent failure as separate indemnification triggers. PY&C's position, as articulated in Mr. Huang's markup comments, is that protocol deviations and informed consent failures are subsumed within the general negligence/gross negligence analysis and do not warrant separate treatment as independent triggers. Mr. Huang's comment notes that "any protocol deviation or informed consent failure that gives rise to a third-party claim would necessarily involve negligent or grossly negligent conduct, making separate enumeration redundant and potentially creating ambiguity."

3. Analysis. The gap between ordinary negligence and gross negligence is significant under Massachusetts law, which will govern the CTA. Ordinary negligence requires only a showing that the defendant failed to exercise the degree of care that a reasonably prudent person would exercise under similar circumstances. Gross negligence, by contrast, requires a showing of conduct that amounts to "a heedless and palpable violation of legal duty respecting the rights of others" — a substantially higher bar that approaches reckless or intentional misconduct. See Altman v. Aronson, 231 Mass. 588, 591 (1919); see also Lev v. Beverly Enters.-Massachusetts, Inc., 457 Mass. 234, 243 (2010) (defining gross negligence as "substantially and appreciably higher in magnitude than ordinary negligence").

The practical consequence of adopting HUMC's proposed gross negligence standard is that TMRI would be unable to seek indemnification from HUMC for a wide range of conduct that, while falling below the standard of reasonable care, does not rise to the level of reckless disregard. In the clinical trial context, this gap is particularly significant with respect to protocol compliance and informed consent.

Protocol deviations are common in clinical trials, even those conducted by experienced investigators at leading institutions. They range from minor (e.g., scheduling a follow-up visit outside the protocol-specified window) to major (e.g., enrolling a subject who does not meet the inclusion/exclusion criteria, or administering a prohibited concomitant medication). While minor deviations rarely give rise to adverse outcomes or third-party claims, major deviations can have significant clinical consequences and can form the basis for claims by injured subjects. Under an ordinary negligence standard, TMRI could seek indemnification from HUMC if a protocol deviation attributable to the PI or study staff contributed to an adverse outcome and resulted in a third-party claim, even if the deviation did not rise to the level of gross negligence. Under HUMC's proposed standard, TMRI would bear the full cost of defending and satisfying such a claim unless it could demonstrate that the deviation reflected reckless disregard of the protocol requirements — a showing that would be difficult to make in most cases.

Similarly, informed consent is a foundational obligation in clinical research that is independently regulated under 21 C.F.R. Part 50 and is separately actionable under state law theories of lack of informed consent. A failure to obtain, document, or maintain valid informed consent — whether through an incomplete consent discussion, use of an outdated consent form, or failure to re-consent a subject after a protocol amendment — is a recognized independent basis for liability that is distinct from medical negligence in the traditional sense. PY&C's argument that informed consent failures are "subsumed" within the general negligence analysis is legally inaccurate: lack of informed consent is a separate cause of action that does not require proof of negligence in the performance of the medical procedure itself. See, e.g., Harnish v. Children's Hospital Medical Center, 387 Mass. 152 (1982) (recognizing informed consent as an independent basis for liability under Massachusetts law).

For these reasons, we believe that TMRI has a strong basis for insisting that protocol deviation and informed consent failure remain as expressly enumerated triggers in the reciprocal indemnification provision, separate from the general standard of care analysis. These are critical trial integrity obligations that go to the core of HUMC's role as the clinical site and the PI's role as the investigator, and they warrant a lower threshold than the general conduct standard.

We recommend, as set forth in Section VII.E below, that TMRI hold firm on ordinary negligence as the standard for protocol deviation and informed consent failure triggers. If HUMC resists ordinary negligence across the board, a potential fallback position would accept gross negligence/willful misconduct for general conduct claims while retaining ordinary negligence for protocol deviation and informed consent failures specifically. This tiered approach would provide HUMC with the elevated standard it seeks for general institutional conduct while preserving TMRI's ability to seek indemnification for the specific conduct categories most directly tied to trial integrity.

IV. Massachusetts Law Considerations

A. Contractual Indemnification Under Massachusetts Law

The CTA designates Massachusetts as the governing law, and this choice of law will control the interpretation and enforcement of the indemnification provisions. Massachusetts law generally enforces contractual indemnification provisions as a matter of freedom of contract, including provisions in which one party agrees to indemnify the other for losses arising from the other party's own negligence, provided the contractual language is "clear and unequivocal" in its expression of the parties' intent to allocate such risk. See Decker v. Black & Decker Manufacturing Co., 389 Mass. 35, 39 (1983); see also Speakman v. Foremost Insurance Co., 31 Mass. App. Ct. 560, 565 (1991).

Massachusetts courts construe indemnification clauses strictly against the party seeking indemnification — that is, the indemnitee. This canon of construction means that any ambiguity in the scope of the indemnification obligation will be resolved in favor of the indemnitor (the party providing indemnification) and against the indemnitee seeking broad coverage. See Araujo v. Woods Hole, Martha's Vineyard & Nantucket Steamship Authority, 693 F.2d 1, 2 (1st Cir. 1982) (applying Massachusetts law). This interpretive principle has practical implications for the drafting of the indemnification article: the more precisely the scope, triggers, and limitations of the indemnification obligation are defined, the more likely the provision will be enforced as written and the less room there will be for post-hoc disputes over its meaning.

Importantly, Massachusetts does not have an anti-indemnification statute that would apply to clinical trial agreements. Certain states have enacted anti-indemnification statutes that restrict or prohibit contractual indemnification in specific contexts — most commonly in the construction industry, where statutes in many states void indemnification provisions that require one party to indemnify another for the other's own negligence. Massachusetts has enacted such a statute for construction contracts (M.G.L. c. 149, § 29C), but this statute is limited to construction agreements and does not extend to research agreements, clinical trial agreements, or other commercial contracts. There are no Massachusetts statutory provisions that would restrict the enforceability of the indemnification provisions contemplated in the CTA.

B. Nonprofit Status Considerations

Both TMRI and HUMC are nonprofit corporations, and their nonprofit status introduces additional considerations relevant to the indemnification negotiation. Massachusetts law does not prohibit nonprofit corporations from entering into contractual indemnification agreements, and there is no general-law principle that limits the scope of indemnification commitments that a nonprofit may undertake. However, the directors and officers of Massachusetts nonprofit corporations owe fiduciary duties of care and loyalty to the corporation and its charitable mission, and these fiduciary obligations require that indemnification commitments be proportionate to the institution's financial capacity and insured risk exposure. See M.G.L. c. 180, § 6C (permitting indemnification of directors and officers of nonprofit corporations); see also Stern v. Lucy Webb Hayes National Training School of Deaconesses & Missionaries, 381 F. Supp. 1003 (D.D.C. 1974) (articulating fiduciary obligations of nonprofit directors in the context of institutional risk management).

An uncapped indemnification obligation for a nonprofit sponsor — as proposed in HUMC's primary position — could raise questions about prudent financial management and board oversight. If a claim or series of claims were to exhaust the available insurance coverage, the excess liability would be payable from TMRI's general operating funds, potentially diverting resources from the Institute's research mission. The TMRI Board of Trustees, under the leadership of Dr. Ansel R. Varnham, President and CEO, has a fiduciary obligation to ensure that any indemnification commitment does not expose the Institute to disproportionate financial risk. While the board has not been directly involved in the CTA negotiation to date, Mr. Pruitt should consider whether board-level review or approval is warranted for the final indemnification terms, particularly if the aggregate cap exceeds $15,000,000.

Similar fiduciary considerations apply to HUMC, although HUMC's interests in this negotiation are primarily those of an indemnitee seeking broad protection. HUMC's board and institutional leadership likewise have obligations to ensure that the institution's participation in the Cobalt Ridge Health IT-3 Trial is supported by adequate indemnification and insurance protections, given the inherent risks of investigational device research.

C. Anti-Subrogation and Insurance Interaction

The indemnification provisions of the CTA must be evaluated in conjunction with the parties' respective insurance coverages to ensure that the contractual risk allocation is consistent with the insurance framework and that there are no gaps or conflicts between the two.

TMRI maintains clinical trial liability insurance with Commonwealth Specialty Underwriters, Inc. (Policy No. CTL-2025-08843), providing coverage of $10,000,000 per occurrence and $25,000,000 in the aggregate for the policy period of January 1, 2026, through December 31, 2027. HUMC maintains professional liability insurance with Pinnacle Mutual Insurance Company (Policy No. PML-HU-2025-4471), providing coverage of $5,000,000 per occurrence and $15,000,000 in the aggregate.

In Massachusetts, contractual indemnification provisions are generally enforceable alongside insurance coverage, and there is no absolute anti-subrogation rule that would prevent an insurer from seeking recovery from an indemnitor. However, careful coordination is needed to ensure that the indemnification terms are consistent with the terms of the underlying policies. Specifically:

First, TMRI's insurer, Commonwealth Specialty, may require that the CTA's indemnification terms be reviewed and approved to ensure consistency with the policy terms. Certain insurers require advance notice of contractual indemnification commitments and reserve the right to deny coverage for claims arising under indemnification agreements that exceed the scope of the policy or that are inconsistent with the policy's terms and conditions. TMRI should confirm with its insurance broker whether the CTA terms require insurer approval and, if so, factor this requirement into the negotiation timeline.

Second, the CTA should be drafted to avoid creating conflicts between TMRI's indemnification obligation to HUMC and Commonwealth Specialty's coverage obligations to TMRI. For example, if the CTA indemnification scope is broader than the scope of coverage under the Commonwealth Specialty policy, TMRI could face a gap in which it is contractually obligated to indemnify HUMC but its insurer denies coverage on the ground that the claim falls outside the policy's coverage terms.

Third, the CTA should address the interaction between TMRI's indemnification obligation and HUMC's own professional liability coverage. In scenarios where a third-party claim implicates both TMRI's device-related responsibility and HUMC's institutional/PI negligence, the question of primary and excess coverage obligations must be clearly addressed to avoid disputes over which party's insurer bears the initial responsibility.

We recommend that the CTA include a provision requiring both parties to maintain specified minimum insurance coverage levels throughout the duration of the study and for a specified tail period following study completion, and to provide evidence of such coverage to the other party upon request. This provision should specify that TMRI will maintain clinical trial liability insurance with per-occurrence and aggregate limits not less than the amounts specified in the CTA, and that HUMC will maintain professional liability insurance with per-occurrence and aggregate limits not less than its current coverage levels.

V. Insurance Coverage Alignment Analysis

A. TMRI's Clinical Trial Liability Insurance

TMRI's clinical trial liability insurance is provided by Commonwealth Specialty Underwriters, Inc. under Policy No. CTL-2025-08843. The key terms of the policy are as follows:

The policy period of January 1, 2026, through December 31, 2027, covers the anticipated enrollment period of the Cobalt Ridge Health IT-3 Trial (estimated first enrollment April 7, 2026, through estimated last enrollment approximately June 30, 2027). However, the policy expires on December 31, 2027, which is approximately 18 months before the estimated study completion date of June 30, 2029. The follow-up period for subjects enrolled near the end of the enrollment window will extend well beyond the current policy expiration date.

This temporal gap between the policy expiration and the estimated study completion is a critical consideration for the negotiation. Any indemnification commitment that extends to study completion — as is standard in clinical trial agreements — must be backed by insurance coverage through at least June 30, 2029, and preferably for an additional period of 12 to 24 months following last patient last visit to account for latent claims. TMRI will need to renew or extend the Commonwealth Specialty policy, or obtain replacement coverage, to ensure that the insurance backstop remains in place for the full duration of TMRI's indemnification obligations under the CTA. We recommend that the CTA include a provision requiring TMRI to maintain clinical trial liability insurance through at least 24 months after the last patient last visit, and that Mr. Pruitt initiate discussions with TMRI's insurance broker regarding the renewal or extension of the Commonwealth Specialty policy.

The per-occurrence limit of $10,000,000 represents the maximum payout under the policy for any single claim or group of related claims arising from a single occurrence. The aggregate limit of $25,000,000 represents the maximum total payout for all claims during the policy period, across all clinical trials insured under the policy. As noted above, TMRI currently has four other active clinical trials insured under the same policy, which means that the $25,000,000 aggregate is shared among five trials (including Cobalt Ridge Health IT-3).

TMRI's proposed CTA cap of $10,000,000 aligns with the per-occurrence limit but effectively treats this amount as the aggregate cap for the CTA. While this provides full insurance coverage for any single claim (up to $10,000,000), it does not address the multi-claim scenario. HUMC's proposed cap of $25,000,000 aligns with the aggregate policy limit but, as discussed above, would consume the entire aggregate capacity if fully triggered, potentially leaving TMRI's other trials without insurance coverage.

B. HUMC's Professional Liability Insurance

HUMC maintains professional liability insurance with Pinnacle Mutual Insurance Company under Policy No. PML-HU-2025-4471. The key terms are as follows:

HUMC's professional liability coverage provides a backstop for claims arising from institutional or PI negligence in the conduct of the Cobalt Ridge Health IT-3 Trial. In scenarios where a third-party claim is attributable in whole or in part to HUMC's or the PI's conduct, HUMC's own insurance coverage would be the primary source of defense and indemnity, reducing the practical risk to TMRI if HUMC's reciprocal indemnification obligation under the CTA is triggered. The existence of HUMC's professional liability coverage is relevant to the analysis of the reciprocal indemnification standard: because HUMC maintains substantial insurance, the practical risk to TMRI of accepting a gross negligence standard (rather than ordinary negligence) for general conduct claims is mitigated to some extent, as HUMC's insurer would bear the initial exposure for most claims arising from PI or institutional negligence.

The CTA should include a provision requiring both parties to maintain specified minimum insurance levels throughout the study duration and for any applicable tail period. We recommend that the minimum coverage requirements be set at the current coverage levels for each party — $10,000,000 per occurrence/$25,000,000 aggregate for TMRI's clinical trial liability coverage, and $5,000,000 per occurrence/$15,000,000 aggregate for HUMC's professional liability coverage — and that each party be required to provide the other with certificates of insurance upon execution of the CTA and annually thereafter.

C. Gap Analysis

Based on our review of the parties' insurance programs, we have identified two significant gaps that must be addressed in the CTA and in TMRI's insurance planning:

Temporal Gap. TMRI's Commonwealth Specialty policy expires on December 31, 2027. The estimated study completion date is June 30, 2029. This creates an 18-month period during which TMRI would have no insurance coverage to back its indemnification obligations under the CTA, unless the policy is renewed or extended. Additionally, claims related to medical device implants may not surface until months or years after the procedure, particularly in a 24-month follow-up study. The CTA should require TMRI to maintain clinical trial liability insurance coverage through at least 24 months after the last patient last visit — that is, through approximately June 30, 2031 — or to purchase an extended reporting period ("tail") endorsement if the policy is not renewed. Mr. Pruitt should be advised to consult with TMRI's insurance broker, and if necessary with Commonwealth Specialty directly, regarding the availability and cost of policy renewal or tail coverage extending through the required period.

Capacity Gap. If the indemnification cap in the CTA is set at $25,000,000 (HUMC's requested amount), this would equal the full aggregate limit of TMRI's Commonwealth Specialty policy, which covers all of TMRI's clinical trials during the policy period. In a worst-case scenario where the full $25,000,000 cap is triggered on Cobalt Ridge Health IT-3 claims, TMRI would have no remaining aggregate capacity under the policy to cover claims arising from its other four active trials. A compromise cap of $15,000,000, as we recommend, would leave $10,000,000 of aggregate capacity available for other trial exposures — a meaningful cushion, though one that underscores the importance of TMRI's overall portfolio risk management.

The gap analysis reinforces our recommendation that the CTA include robust insurance maintenance obligations for both parties and that TMRI proactively address the temporal gap by initiating renewal discussions with Commonwealth Specialty well in advance of the policy expiration.

VI. Industry Precedents and Risk Allocation in Clinical Trial Agreements

A. Standard Practices in Investigator-Initiated Trial CTAs

The risk allocation framework in clinical trial agreements varies significantly depending on the nature of the trial, the identity of the sponsor, and the respective roles of the parties. In sponsor-initiated industry trials — where a commercial device or pharmaceutical company sponsors a study conducted at one or more clinical sites — it is common for the sponsor to provide broad indemnification for device-related or drug-related claims, often with uncapped or very high-cap commitments backed by the sponsor's corporate resources and comprehensive insurance programs. In this context, the sponsor has designed and manufactured the investigational product, controls the protocol, and exercises substantial oversight over the conduct of the trial, making it appropriate for the sponsor to bear primary financial responsibility for product-related adverse outcomes.

In investigator-initiated trials, the risk allocation is typically different, reflecting the shared nature of the undertaking and the greater autonomy exercised by the PI and the institution. In

MEMORANDUM
PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT
From: Christopher Aiken, Lead Associate, and Amy Whitfield, Working Associate, Calderwood & Harkness LLP
To: Joel Strauss, Responsible Partner, Calderwood & Harkness LLP; Marcus D. Pruitt, J.D., General Counsel, Thornwick Medical Research Institute, Inc.
Date: February 10, 2026
Re: Analysis of Contested Indemnification Provisions — Clinical Trial Agreement for the Cadence-3 Trial (ThornValve MV-200 System) between Thornwick Medical Research Institute, Inc. and Hargrove University Medical Center, Inc.
Matter No.: 1029-00001
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I. Executive Summary
The purpose of this memorandum is to provide a comprehensive analysis of the contested indemnification provisions in the draft Clinical Trial Agreement ("CTA") between Thornwick Medical Research Institute, Inc. ("TMRI") and Hargrove University Medical Center, Inc. ("HUMC") for the Cadence-3 Trial. The Cobalt Ridge Health IT-3 Trial is a prospective, single-arm, open-label feasibility study of the ThornValve MV-200 System for transcatheter mitral valve repair (ClinicalTrials.gov Identifier NCT06198234; Investigational Device Exemption No. G260012). The total CTA value is $6,000,000, funded through TMRI internal grant award TMRI-CV-2025-018.
On February 7, 2026, Pemberton, Yates & Caldwell LLP ("PY&C"), outside counsel to HUMC, circulated a comprehensive redline of the initial draft CTA that had been transmitted by Calderwood & Harkness on January 28, 2026. The PY&C redline proposes significant expansions to TMRI's indemnification obligations under the CTA and, correspondingly, seeks to narrow HUMC's reciprocal indemnification obligations to TMRI. If accepted in their current form, the PY&C proposals would materially alter the risk allocation framework of the CTA in HUMC's favor and expose TMRI to indemnification obligations that are disproportionate to its role as a nonprofit research sponsor and inconsistent with the insurance coverage it maintains.
This memorandum compares the parties' respective positions across five contested sub-issues within the indemnification article:
1.  Scope of Indemnification — the triggering events and causal standards defining when TMRI's indemnification obligation arises;
2.  Aggregate Indemnification Cap — the maximum dollar amount of TMRI's indemnification exposure over the life of the CTA;
3.  Notice Period for Claims — the time frame within which HUMC must notify TMRI of claims or threatened claims triggering indemnification;
4.  Defense Control and Right to Participate — the allocation of authority over the defense and settlement of indemnified claims, including HUMC's right to engage separate counsel; and
5.  Mutual Indemnification Standard — the applicable standard of conduct (ordinary negligence versus gross negligence) governing HUMC's reciprocal indemnification obligation to TMRI, and the treatment of protocol deviations and informed consent failures.
For each sub-issue, we set forth TMRI's current draft position, HUMC's redline position, a comparative analysis grounded in Massachusetts law and industry practice, and a recommended compromise position designed to protect TMRI's core interests while providing a framework for productive negotiation.
In summary, we recommend that TMRI be prepared to offer meaningful concessions on the aggregate cap amount (from $10,000,000 to $15,000,000) and on the notice period (from 15 business days to 20 business days with a prejudice qualifier), while holding firm on scope limitations that tie TMRI's indemnification obligation to enumerated categories of device-related and sponsor-fault claims and declining the "arising out of or relating to" formulation proposed by PY&C. TMRI should also retain primary control of the defense of indemnified claims, while accommodating HUMC's request for participation rights through separate counsel in cases of actual conflict of interest, subject to reasonable guardrails and fee caps. On the mutual indemnification standard, TMRI should insist on an ordinary negligence standard for protocol deviations and informed consent failures, even if a higher standard is accepted for other categories of HUMC conduct.
These recommended compromise positions are intended for use in the negotiation call scheduled for February 12, 2026, with PY&C attorneys Rebecca S. Norcross, Partner, and Daniel F. Huang, Associate. We respectfully request authorization from Mr. Pruitt and Dr. Elaine K. Sutherland, TMRI's Chief Scientific Officer, to present these positions on the call.
II. Background and Procedural History
A. The Cadence-3 Trial
Cobalt Ridge Health IT-3 is TMRI's third investigator-initiated feasibility study evaluating the ThornValve MV-200 System, a transcatheter mitral valve repair device designed for percutaneous treatment of moderate-to-severe mitral regurgitation. The ThornValve MV-200 System is a proprietary device developed by TMRI's Cardiovascular Device Division and is currently available only for investigational use under an Investigational Device Exemption ("IDE") issued by the U.S. Food and Drug Administration (IDE No. G260012). The two prior feasibility studies — Cadence-1 (completed 2022) and Cadence-2 (completed 2024) — demonstrated acceptable safety profiles and preliminary evidence of efficacy, and the Cadence-3 study is designed to evaluate the updated MV-200 System platform (incorporating design modifications based on Cadence-1 and Cobalt Ridge Health IT-2 data) in a broader patient population.
The Cadence-3 Trial is a single-site study to be conducted at Hargrove University Medical Center, located at 1400 Sterling Heights Boulevard, New Haven, Connecticut 06510. HUMC was selected as the sole clinical site based on its nationally recognized structural heart interventions program, which performs approximately 650 transcatheter valve procedures annually, and the expertise of the proposed Principal Investigator.
The planned enrollment is 45 subjects, each of whom will undergo implantation of the ThornValve MV-200 System and be followed for a minimum of 24 months post-procedure. The estimated total study duration from first patient enrollment to last patient last visit is 36 months. Based on current projections, first patient enrollment is estimated for April 7, 2026, with estimated study completion on June 30, 2029.
The designated Principal Investigator is Dr. Julian M. Castañeda, M.D., FACC, Professor of Cardiovascular Medicine at Hargrove University School of Medicine and Director of the Structural Heart Interventions Program at HUMC. Dr. Castañeda is an internationally recognized authority in transcatheter mitral valve therapies and has published extensively on novel device platforms for mitral regurgitation. The designated Sub-Investigator is Dr. Hannah L. Forsberg, M.D., Associate Professor of Cardiovascular Medicine at Hargrove University School of Medicine, who specializes in cardiac imaging and intraprocedural guidance for structural heart interventions.
The Cadence-3 Protocol received approval from the HUMC Institutional Review Board on December 18, 2025 (Protocol No. HUMC-IRB-2025-0847). The IRB approval letter authorizes the commencement of subject screening and enrollment upon execution of all required agreements between TMRI and HUMC, including the CTA at issue.
Separately, TMRI has engaged Meridian Clinical Sciences, Inc. as the contract research organization ("CRO") for the Cadence-3 Trial. Meridian will be responsible for data management, electronic data capture system deployment, biostatistical analysis, and safety monitoring support. The Meridian master services agreement was executed on November 22, 2025. An independent Data Safety Monitoring Board ("DSMB") was constituted in November 2025, chaired by Dr. Garrett P. Lindholm, M.D., Ph.D., Professor of Biostatistics and Epidemiology at Ellsworth University, and is tasked with ongoing review of safety data and the authority to recommend trial suspension or termination based on predefined stopping rules.
B. Negotiation Timeline
Calderwood & Harkness's engagement on this matter was formally opened on January 15, 2026, following a retention letter executed by Mr. Pruitt on behalf of TMRI. The engagement scope encompasses drafting and negotiation of the CTA, as well as related ancillary agreements (including the informed consent form addendum and the data transfer agreement), and advisory services regarding indemnification, intellectual property, and publication rights.
The first draft of the CTA was prepared by Calderwood & Harkness and circulated to HUMC's outside counsel, PY&C, on January 28, 2026. The initial draft was developed in consultation with Mr. Pruitt, Dr. Sutherland, and Dr. Meredith A. Klein (TMRI's Vice President for Clinical Affairs), and reflected TMRI's established template for investigator-initiated feasibility trial agreements, with modifications specific to the Cobalt Ridge Health IT-3 protocol and the ThornValve MV-200 device platform.
PY&C's comprehensive redline was received on February 7, 2026, accompanied by a cover letter from Ms. Norcross summarizing HUMC's principal concerns. The redline contains substantial revisions to the indemnification provisions (Article IX), the intellectual property provisions (Article VII), and the publication rights provisions (Article VIII). This memorandum addresses only the indemnification provisions; intellectual property and publication rights will be analyzed in a separate memorandum to be circulated by Calderwood & Harkness on or before February 18, 2026.
A negotiation call focused on the indemnification provisions is scheduled for February 12, 2026, at 2:00 p.m. Eastern Time. Participants on the TMRI side are expected to include Mr. Pruitt, Mr. Strauss, and Mr. Aiken. PY&C participants are expected to include Ms. Norcross and Mr. Huang. The parties have agreed that the February 12 call will be limited to indemnification issues, with intellectual property and publication rights to be addressed on a separate call tentatively scheduled for February 21, 2026.
The target execution date for the CTA is March 2, 2026. This date is driven by TMRI's need to include the fully executed CTA as part of its IDE supplement filing with the FDA, which must be submitted by March 15, 2026, to avoid delays to the Cobalt Ridge Health IT-3 enrollment timeline. Both parties have acknowledged the importance of meeting this execution target, and the negotiation schedule has been structured accordingly.
C. TMRI's Status as Sponsor
TMRI is a Massachusetts nonprofit corporation organized under Massachusetts General Laws Chapter 180, holding tax-exempt status under Section 501(c)(3) of the Internal Revenue Code (Employer Identification Number 04-3871256). TMRI is headquartered at 280 Longmeadow Drive, Cambridge, Massachusetts 02139. The Institute's annual research budget for fiscal year 2025 was approximately $74 million, funded through a combination of federal grants (approximately 42%), institutional endowment income (approximately 28%), industry-sponsored research agreements (approximately 18%), and philanthropic contributions (approximately 12%).
TMRI occupies a dual role in the Cobalt Ridge Health IT-3 Trial that is relevant to the indemnification analysis: it serves as both the developer of the ThornValve MV-200 System and the regulatory sponsor of the clinical trial under the IDE. This dual role distinguishes TMRI from a purely academic institution conducting a study with a device manufactured by a separate commercial entity. Because TMRI designed and manufactured the ThornValve MV-200 System, it bears product liability exposure in addition to the standard obligations of a clinical trial sponsor. This dual exposure is a central factor in the indemnification negotiation, as it means that TMRI cannot credibly disclaim responsibility for the safety characteristics of the device and must accept some level of device-related indemnification beyond narrow defect claims. At the same time, TMRI's nonprofit status and finite financial resources distinguish it from a for-profit device manufacturer with access to deeper reserves and broader insurance programs.
HUMC is a Connecticut nonprofit corporation (Employer Identification Number 06-2194738) operating a 726-bed academic medical center affiliated with Hargrove University School of Medicine. HUMC's structural heart program is one of the highest-volume programs in the northeastern United States, performing approximately 650 transcatheter valve procedures annually and maintaining active participation in multiple investigator-initiated and industry-sponsored clinical trials. HUMC's institutional stature and the expertise of Dr. Castañeda are significant factors in the Cobalt Ridge Health IT-3 Trial; the credibility and quality of the study data are directly linked to the site's capabilities. This mutual dependence is relevant context for the negotiation, as both parties have strong incentives to reach agreement on acceptable terms.
III. Comparison of the Parties' Indemnification Positions
This section provides a detailed comparison of the parties' positions on each of the five contested sub-issues within the indemnification article, together with our analysis of the merits of each position and the relevant legal and practical considerations.
A. Scope of Indemnification
1. TMRI's Position (Current Draft — January 28, 2026)
Under the initial draft CTA circulated by Calderwood & Harkness, TMRI will provide indemnification to HUMC, the Principal Investigator (Dr. Castañeda), the Sub-Investigator (Dr. Forsberg), and HUMC's authorized study staff who are directly involved in the conduct of the Cobalt Ridge Health IT-3 Trial (collectively, the "Indemnified Parties"). The indemnification obligation extends to third-party claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and costs of defense) arising from:
(a) The design, manufacture, or inherent defect of the ThornValve MV-200 System, including any claim that the device was defective in design, manufacturing, or materials; and
(b) TMRI's negligence or willful misconduct in performing its obligations under the CTA, including its obligations as trial sponsor under 21 C.F.R. Part 812 and applicable FDA guidance.
This formulation reflects a narrow, enumerated-trigger approach that ties TMRI's indemnification obligation specifically to two categories of claims: (i) product-related claims based on defect in the investigational device, and (ii) claims based on TMRI's own fault in its capacity as sponsor. The language was drafted to provide meaningful protection for the Indemnified Parties against the core risks associated with participation in an investigational device trial — namely, that the device itself may prove to be defective or that the sponsor may fail to meet its regulatory and contractual obligations — while limiting TMRI's exposure to claims that are causally connected to TMRI's conduct or its device.
2. HUMC's Position (PY&C Redline — February 7, 2026)
The PY&C redline substantially expands the scope of TMRI's indemnification obligation. Under the redline, TMRI would indemnify the Indemnified Parties for all third-party claims "arising out of or relating to" the investigational device, "including but not limited to" claims based on:
(a) The design, manufacture, defect, labeling, instructions for use, or any characteristic of the ThornValve MV-200 System;
(b) Any adverse event, serious adverse event, unanticipated adverse device effect, or patient injury associated with the use of the investigational device;
(c) TMRI's negligence or willful misconduct in performing its obligations under the CTA;
(d) Any regulatory action, government investigation, or enforcement proceeding relating to the investigational device or the conduct of the trial; and
(e) Any recall, corrective action, or field safety notice relating to the investigational device.
The critical difference between the parties' positions is the overarching causal standard. TMRI's draft uses "arising from" with specific enumerated triggers limited to defect and sponsor fault. HUMC's redline uses "arising out of or relating to" as the overarching standard, followed by an illustrative (non-exhaustive) list of covered claims introduced by "including but not limited to." The phrase "arising out of or relating to" is a term of art in indemnification drafting that courts have consistently interpreted as imposing a broader causal nexus than "arising from" or "caused by." The addition of "relating to" in particular sweeps in claims that have only an attenuated connection to the enumerated triggers and could encompass claims that are not directly caused by a defect in the device or by TMRI's fault.
Moreover, the PY&C redline adds several categories of claims not present in TMRI's draft. Subclause (b) would require TMRI to indemnify HUMC for any adverse event "associated with" use of the device, regardless of whether the event resulted from a defect in the device, physician error, patient comorbidities, or other causes unrelated to TMRI's conduct. This formulation effectively converts TMRI's indemnification obligation into a form of strict liability for all adverse outcomes associated with the investigational device. Subclause (d) extends indemnification to regulatory actions and government investigations, which could include FDA inspections, warning letters, or enforcement actions that may relate as much to HUMC's site-level compliance failures as to the device itself. Subclause (e) covers recalls and corrective actions, which, while more closely tied to TMRI's product responsibilities, could impose indemnification obligations for actions taken voluntarily by TMRI as a matter of prudent risk management rather than in response to a proven defect.
3. Analysis.  The breadth of HUMC's proposed "arising out of or relating to" language, coupled with the expansive illustrative list, would expose TMRI to indemnification obligations in circumstances where the ThornValve MV-200 System performed exactly as designed but a patient nonetheless experienced an adverse clinical outcome. In the context of a feasibility study involving a novel transcatheter device in patients with significant underlying cardiac disease, adverse events are an expected component of the clinical data. Not all adverse events are attributable to device defects; they may result from patient-specific anatomical or physiological factors, procedural technique, concomitant medications, or the natural progression of the underlying disease. TMRI should not be required to indemnify HUMC for adverse outcomes that are inherent in the clinical context and not causally linked to a deficiency in the device or TMRI's conduct.
This concern is heightened by the investigator-initiated nature of the Cobalt Ridge Health IT-3 Trial. In investigator-initiated studies, the Principal Investigator exercises substantially greater autonomy in patient selection, procedural planning, device sizing, implantation technique, and post-procedural management compared to industry-sponsored trials, where the sponsor's protocol and monitoring activities exert more direct control over clinical decision-making. The PI's exercise of independent clinical judgment in an investigator-initiated trial means that outcomes are influenced by factors within the PI's and the institution's control, and it would be inappropriate for TMRI to bear indemnification responsibility for the full spectrum of claims "relating to" the device without regard to the source of the adverse outcome.
At the same time, TMRI's dual role as both device developer and trial sponsor means that it cannot credibly limit its indemnification obligation solely to claims based on proven manufacturing defects. TMRI designed the ThornValve MV-200 System, developed its instructions for use, and determined its safety profile based on the prior Cobalt Ridge Health IT-1 and Cobalt Ridge Health IT-2 studies. TMRI bears inherent responsibility for the safety characteristics of the device platform, including known risks that are disclosed in the investigator's brochure and informed consent form. Some broadening of the indemnification scope beyond the narrow "inherent defect" formulation is therefore reasonable and may be necessary to reach agreement with HUMC.
We recommend, as discussed in Section VII.A below, a moderate broadening that adds "safety characteristics" of the device to the enumerated triggers and includes TMRI's material breach of the CTA as an additional trigger, while rejecting the "arising out of or relating to" formulation and the expansion to regulatory actions, government investigations, and all adverse events regardless of causation.
B. Aggregate Indemnification Cap
1. TMRI's Position (Current Draft — January 28, 2026)
The initial draft CTA proposes an aggregate indemnification cap of $10,000,000. This figure was selected to match the per-occurrence limit under TMRI's clinical trial liability insurance policy with Commonwealth Specialty Underwriters, Inc. (Policy No. CTL-2025-08843), which provides coverage of $10,000,000 per occurrence and $25,000,000 in the aggregate for the policy period of January 1, 2026, through December 31, 2027.
TMRI's rationale for aligning the cap with the per-occurrence limit is straightforward: as a nonprofit research institution with finite financial resources, TMRI must limit its contractual indemnification exposure to amounts that are fully insured. The per-occurrence limit of $10,000,000 represents the maximum amount recoverable under the policy for any single claim or group of related claims, and TMRI's position is that this amount provides substantial protection for HUMC while ensuring that TMRI's indemnification commitment is backed by insurance coverage. Any indemnification obligation exceeding insured limits would be payable from TMRI's general operating funds, which are restricted by the Institute's nonprofit mission and fiduciary obligations.
2. HUMC's Position (PY&C Redline — February 7, 2026)
HUMC proposes two alternative positions on the aggregate cap, either of which it considers acceptable:
(a) Primary position: Remove the aggregate cap entirely, resulting in an uncapped indemnification obligation; or
(b) Alternative position: Increase the aggregate cap to $25,000,000, matching TMRI's aggregate policy limit under the Commonwealth Specialty policy.
In PY&C's cover letter accompanying the redline, Ms. Norcross argues that capping TMRI's indemnification obligation at the per-occurrence limit of $10,000,000 fails to protect HUMC adequately in a multi-claim scenario. She notes that a 45-subject trial with a 24-month follow-up period creates the possibility of multiple independent claims arising from separate adverse events in different subjects, and that the aggregate of such claims could exceed $10,000,000. Ms. Norcross further argues that TMRI's aggregate coverage of $25,000,000 under the Commonwealth Specialty policy represents the "true ceiling" of TMRI's insured indemnification capacity and that TMRI should be willing to commit to indemnification at the full level of its insurance coverage.
3. Analysis.  HUMC's primary position — uncapped indemnification — is inappropriate for a nonprofit sponsor and inconsistent with prevailing industry norms for investigator-initiated clinical trial agreements. An uncapped indemnification obligation would expose TMRI to theoretically unlimited financial liability, which is fundamentally incompatible with the fiduciary obligations of TMRI's directors and officers to manage the Institute's resources in accordance with its charitable mission. Moreover, uncapped indemnification is rarely seen even in industry-sponsored trials conducted by well-capitalized commercial device manufacturers; it is virtually unheard of in the investigator-initiated trial context, where the risk allocation framework typically reflects the shared nature of the undertaking.
HUMC's alternative position — a $25,000,000 cap equal to TMRI's aggregate policy limit — is more reasonable on its face but presents significant practical concerns. The aggregate limit of $25,000,000 under the Commonwealth Specialty policy is not specific to the Cobalt Ridge Health IT-3 Trial; it represents the total aggregate coverage available to TMRI across its entire portfolio of insured clinical trials during the policy period. As of the date of this memorandum, TMRI has four other active clinical trials insured under the same policy. Setting the Cobalt Ridge Health IT-3 CTA cap at $25,000,000 would mean that a single trial could, in theory, consume the entirety of TMRI's aggregate coverage, leaving no insurance capacity for claims arising from the other insured trials. This would be imprudent from a portfolio risk management perspective and could expose TMRI's other clinical programs to uninsured liability.
The $10,000,000 per-occurrence cap proposed by TMRI, when used as an aggregate cap, is admittedly conservative for a 45-subject trial with a 36-month total duration. While the per-occurrence limit provides robust coverage for any single claim, the aggregate exposure across multiple subjects and multiple potential claims could exceed this amount. HUMC's concern about multi-claim scenarios is not unreasonable — a systemic device issue affecting multiple subjects, for example, could generate claims with a combined value exceeding $10,000,000.
We therefore recommend, as set forth in Section VII.B below, a compromise aggregate cap of $15,000,000, which exceeds the per-occurrence limit, provides meaningful multi-claim protection for HUMC, and remains within TMRI's aggregate policy capacity while preserving headroom for other trial exposures.
TMRI's annual research budget of approximately $74 million provides useful context for assessing financial capacity but should not be overstated. Research budgets are largely committed to ongoing programs and grant obligations, and the proportion available for contingent indemnification liabilities is limited. TMRI's nonprofit status further constrains its ability to absorb large uninsured losses, as any material financial impairment could affect the Institute's ability to fulfill its charitable mission and maintain its tax-exempt status.
C. Notice Period for Claims
1. TMRI's Position (Current Draft — January 28, 2026)
The initial draft CTA requires HUMC to provide prompt written notice to TMRI within fifteen (15) business days of the date on which HUMC first obtains knowledge of a claim or threatened claim that may give rise to an indemnification obligation under the CTA. The notice must include a description of the claim, the identity of the claimant, the amount of damages sought (if known), and copies of any relevant correspondence, pleadings, or other documents received by HUMC.
TMRI's rationale for the 15-business-day notice period is grounded in practical considerations of insurance coordination and defense preparation. Prompt notice is essential for TMRI to fulfill its own notice obligations to Commonwealth Specialty under Policy CTL-2025-08843 and to ensure that coverage is not jeopardized by late reporting. Additionally, early awareness of claims enables TMRI to investigate the underlying facts, preserve relevant evidence (including device-related records, clinical data, and manufacturing documentation), and engage defense counsel before positions have hardened or evidence has been lost.
2. HUMC's Position (PY&C Redline — February 7, 2026)
HUMC's redline extends the notice period to thirty (30) business days. In PY&C's cover letter, Mr. Huang explains that HUMC's internal processes for identifying and escalating potential claims involve multiple layers of review and approval, including initial assessment by HUMC's Office of Risk Management, review by the legal department under the supervision of HUMC's Senior Vice President for Research Administration, Leonard B. Ostrowski, and consultation with institutional counsel. Mr. Huang contends that 15 business days is insufficient for this multi-layered review process, particularly for claims that initially present as clinical complaints or patient grievances and only later crystallize into potential legal claims, and that the 30-business-day period is necessary to ensure that HUMC provides substantive and accurate notice rather than premature or incomplete notifications.
3. Analysis.  Both positions have merit, and this issue lends itself to compromise. Fifteen business days (equivalent to approximately three calendar weeks) is an aggressive notice period for an academic medical center with the organizational complexity of HUMC. Large teaching hospitals and research institutions typically have multi-tiered risk management structures in which potential claims must be identified, evaluated, and escalated through several departments before a formal notice of claim is issued to a contractual indemnitor. The practical reality is that many potential claims in the clinical trial context do not present themselves as clear legal demands upon first notice; they may begin as adverse event reports, patient complaints, or communications from patients' counsel that require investigation and assessment before their indemnification implications can be determined.
On the other hand, 30 business days (equivalent to approximately six calendar weeks) is generous by industry standards and could materially impair TMRI's ability to respond promptly to claims. A six-week delay between HUMC's first knowledge of a claim and notification to TMRI could result in loss of critical evidence, allow the claimant's position to solidify, and complicate TMRI's engagement of defense counsel and development of a defense strategy. More importantly, Commonwealth Specialty's policy likely contains its own notice-of-claim requirements, and a delay by TMRI in reporting claims to its insurer — caused by late notice from HUMC — could result in a coverage denial, which would undermine the entire purpose of maintaining the insurance and effectively shift the indemnification obligation from the insurer to TMRI's operating funds.
In our review of comparable CTAs for investigator-initiated trials, notice periods range from 10 to 30 business days, with the most common range being 15 to 20 business days. A period of 20 business days (approximately four calendar weeks) represents a reasonable middle ground that accommodates HUMC's institutional processes while providing TMRI with sufficient time to coordinate with its insurer and prepare a response.
We further recommend the inclusion of a "prejudice" qualifier in the notice provision. Under this approach, HUMC's failure to provide timely notice within the agreed period would not automatically release TMRI from its indemnification obligation; rather, TMRI would be relieved of its obligation only if it can demonstrate that it was materially prejudiced by the delay in notice. This formulation is consistent with the modern trend in indemnification drafting, particularly in the academic medical center context, and provides an equitable balance: HUMC is protected from the harsh consequence of losing its indemnification rights due to a technical notice failure, while TMRI retains the ability to assert a defense if late notice actually impairs its position. The prejudice standard also aligns with Massachusetts law principles governing notice under insurance policies, where the trend has been toward requiring a showing of actual prejudice before denying coverage based on late notice.
D. Defense Control and Right to Participate
1. TMRI's Position (Current Draft — January 28, 2026)
Under the initial draft CTA, TMRI has the sole right to control the defense and settlement of any claim for which indemnification is sought under the agreement. This includes the right to select defense counsel, direct litigation strategy, make all tactical and strategic decisions in the course of the defense, and exercise full settlement authority, including the authority to settle claims on terms TMRI deems appropriate. HUMC and the other Indemnified Parties may participate in the defense at their own expense through counsel of their choosing, but they may not direct or control the defense strategy or settlement discussions.
This formulation reflects the standard approach to defense control in indemnification provisions: the party bearing the financial obligation of indemnification (the indemnitor) controls the defense and settlement of the indemnified claims. This principle is both economically logical — the party paying for the defense should control its conduct — and practically necessary to ensure coherent and efficient defense management.
2. HUMC's Position (PY&C Redline — February 7, 2026)
HUMC does not dispute TMRI's right to control the defense in the ordinary course. However, PY&C's redline adds a provision granting HUMC the right to participate in the defense through separate counsel at TMRI's expense if a conflict of interest exists between TMRI and HUMC, or between TMRI and the Principal Investigator or Sub-Investigator. In PY&C's cover letter, Ms. Norcross characterizes this as a "standard provision in academic medical center clinical trial agreements" and argues that it is necessary to protect HUMC's institutional interests, which she identifies as including institutional reputation, accreditation status with The Joint Commission and other accrediting bodies, medical staff credentialing, and the individual professional interests of Dr. Castañeda and Dr. Forsberg.
Ms. Norcross's letter does not specify the circumstances under which a conflict of interest would be deemed to exist, nor does it propose any cap on the fees of HUMC's separate counsel.
3. Analysis.  HUMC's request for the right to participate in the defense with separate counsel at TMRI's expense when a conflict of interest exists is a well-recognized provision in clinical trial agreements involving academic medical centers, and it is defensible from HUMC's perspective. The concern underlying this request is that TMRI's interests as both device developer and trial sponsor may, in certain claim scenarios, diverge from the interests of HUMC and its investigators in ways that make it inappropriate for TMRI to serve as the sole voice in the defense.
The most commonly cited conflict scenario in this context is one in which TMRI's defense strategy involves attributing an adverse outcome to the PI's procedural technique, patient selection decisions, or post-procedural management rather than to a defect or safety issue with the ThornValve MV-200 System. In such a scenario, TMRI's interest in deflecting product liability exposure would directly conflict with the PI's interest in defending his or her professional conduct and reputation, and with HUMC's interest in protecting its institutional standing and the credentialing status of its physicians. Under these circumstances, it would be unreasonable to expect HUMC and its physicians to rely on counsel selected and directed by TMRI to protect their interests.
We therefore recommend that TMRI accommodate HUMC's request for conflict-of-interest participation rights, subject to the following guardrails designed to prevent abuse and manage costs:
(a) The conflict of interest must be actual, not merely theoretical or speculative. HUMC must provide written notice to TMRI identifying the specific conflict and the factual basis for its determination that the conflict exists.
(b) Upon receipt of HUMC's conflict notice, TMRI should have a reasonable opportunity (not less than ten business days) to cure or address the conflict — for example, by modifying its defense strategy to eliminate the conflict, by retaining joint counsel acceptable to both parties, or by other means.
(c) If the conflict cannot be resolved, TMRI will bear the reasonable fees and expenses of HUMC's separate counsel, subject to a cap of $250,000 per claim absent mutual written agreement on a higher amount. This cap ensures that TMRI's defense costs remain manageable and that HUMC's separate counsel engagement is proportionate to the interests at stake.
(d) HUMC's separate counsel must cooperate with TMRI's lead defense counsel and may not take positions in the litigation that are materially inconsistent with the overall defense strategy, except to the extent necessary to protect the specific interests giving rise to the conflict.
Additionally, the settlement provision should be modified to require that no settlement of an indemnified claim may be entered into that imposes non-monetary obligations on, admits liability by, or attributes fault to HUMC, the PI, or any member of the study staff without HUMC's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. This is a standard protection for indemnitees and is distinct from the defense control issue; TMRI should retain ultimate settlement authority as to monetary terms while ensuring that settlements do not prejudice HUMC's institutional or reputational interests.
E. Mutual Indemnification Standard
1. TMRI's Position (Current Draft — January 28, 2026)
Under the initial draft CTA, HUMC will indemnify TMRI and its directors, officers, employees, and agents for third-party claims arising from:
(a) HUMC's negligence or willful misconduct in performing its obligations under the CTA;
(b) The PI's or Sub-Investigator's negligence or willful misconduct in the conduct of the Cobalt Ridge Health IT-3 Trial;
(c) Any material deviation by HUMC, the PI, the Sub-Investigator, or authorized study staff from the approved Protocol (HUMC-IRB-2025-0847); or
(d) Any failure by HUMC, the PI, the Sub-Investigator, or authorized study staff to obtain, document, or maintain valid informed consent from study subjects in accordance with 21 C.F.R. Part 50 and the approved informed consent form.
This formulation applies an ordinary negligence standard to HUMC's reciprocal indemnification obligation and expressly enumerates protocol deviation and informed consent failure as separate triggers, independent of the general negligence analysis.
2. HUMC's Position (PY&C Redline — February 7, 2026)
HUMC's redline narrows the reciprocal indemnification in two significant ways:
First, HUMC replaces the ordinary negligence standard with a gross negligence/willful misconduct standard. Under HUMC's proposed language, HUMC would indemnify TMRI only for claims arising from HUMC's or its personnel's "gross negligence or willful misconduct" in the performance of their obligations under the CTA.
Second, HUMC deletes the express enumeration of protocol deviation and informed consent failure as separate indemnification triggers. PY&C's position, as articulated in Mr. Huang's markup comments, is that protocol deviations and informed consent failures are subsumed within the general negligence/gross negligence analysis and do not warrant separate treatment as independent triggers. Mr. Huang's comment notes that "any protocol deviation or informed consent failure that gives rise to a third-party claim would necessarily involve negligent or grossly negligent conduct, making separate enumeration redundant and potentially creating ambiguity."
3. Analysis.  The gap between ordinary negligence and gross negligence is significant under Massachusetts law, which will govern the CTA. Ordinary negligence requires only a showing that the defendant failed to exercise the degree of care that a reasonably prudent person would exercise under similar circumstances. Gross negligence, by contrast, requires a showing of conduct that amounts to "a heedless and palpable violation of legal duty respecting the rights of others" — a substantially higher bar that approaches reckless or intentional misconduct. See Altman v. Aronson, 231 Mass. 588, 591 (1919); see also Lev v. Beverly Enters.-Massachusetts, Inc., 457 Mass. 234, 243 (2010) (defining gross negligence as "substantially and appreciably higher in magnitude than ordinary negligence").
The practical consequence of adopting HUMC's proposed gross negligence standard is that TMRI would be unable to seek indemnification from HUMC for a wide range of conduct that, while falling below the standard of reasonable care, does not rise to the level of reckless disregard. In the clinical trial context, this gap is particularly significant with respect to protocol compliance and informed consent.
Protocol deviations are common in clinical trials, even those conducted by experienced investigators at leading institutions. They range from minor (e.g., scheduling a follow-up visit outside the protocol-specified window) to major (e.g., enrolling a subject who does not meet the inclusion/exclusion criteria, or administering a prohibited concomitant medication). While minor deviations rarely give rise to adverse outcomes or third-party claims, major deviations can have significant clinical consequences and can form the basis for claims by injured subjects. Under an ordinary negligence standard, TMRI could seek indemnification from HUMC if a protocol deviation attributable to the PI or study staff contributed to an adverse outcome and resulted in a third-party claim, even if the deviation did not rise to the level of gross negligence. Under HUMC's proposed standard, TMRI would bear the full cost of defending and satisfying such a claim unless it could demonstrate that the deviation reflected reckless disregard of the protocol requirements — a showing that would be difficult to make in most cases.
Similarly, informed consent is a foundational obligation in clinical research that is independently regulated under 21 C.F.R. Part 50 and is separately actionable under state law theories of lack of informed consent. A failure to obtain, document, or maintain valid informed consent — whether through an incomplete consent discussion, use of an outdated consent form, or failure to re-consent a subject after a protocol amendment — is a recognized independent basis for liability that is distinct from medical negligence in the traditional sense. PY&C's argument that informed consent failures are "subsumed" within the general negligence analysis is legally inaccurate: lack of informed consent is a separate cause of action that does not require proof of negligence in the performance of the medical procedure itself. See, e.g., Harnish v. Children's Hospital Medical Center, 387 Mass. 152 (1982) (recognizing informed consent as an independent basis for liability under Massachusetts law).
For these reasons, we believe that TMRI has a strong basis for insisting that protocol deviation and informed consent failure remain as expressly enumerated triggers in the reciprocal indemnification provision, separate from the general standard of care analysis. These are critical trial integrity obligations that go to the core of HUMC's role as the clinical site and the PI's role as the investigator, and they warrant a lower threshold than the general conduct standard.
We recommend, as set forth in Section VII.E below, that TMRI hold firm on ordinary negligence as the standard for protocol deviation and informed consent failure triggers. If HUMC resists ordinary negligence across the board, a potential fallback position would accept gross negligence/willful misconduct for general conduct claims while retaining ordinary negligence for protocol deviation and informed consent failures specifically. This tiered approach would provide HUMC with the elevated standard it seeks for general institutional conduct while preserving TMRI's ability to seek indemnification for the specific conduct categories most directly tied to trial integrity.
IV. Massachusetts Law Considerations
A. Contractual Indemnification Under Massachusetts Law
The CTA designates Massachusetts as the governing law, and this choice of law will control the interpretation and enforcement of the indemnification provisions. Massachusetts law generally enforces contractual indemnification provisions as a matter of freedom of contract, including provisions in which one party agrees to indemnify the other for losses arising from the other party's own negligence, provided the contractual language is "clear and unequivocal" in its expression of the parties' intent to allocate such risk. See Decker v. Black & Decker Manufacturing Co., 389 Mass. 35, 39 (1983); see also Speakman v. Foremost Insurance Co., 31 Mass. App. Ct. 560, 565 (1991).
Massachusetts courts construe indemnification clauses strictly against the party seeking indemnification — that is, the indemnitee. This canon of construction means that any ambiguity in the scope of the indemnification obligation will be resolved in favor of the indemnitor (the party providing indemnification) and against the indemnitee seeking broad coverage. See Araujo v. Woods Hole, Martha's Vineyard & Nantucket Steamship Authority, 693 F.2d 1, 2 (1st Cir. 1982) (applying Massachusetts law). This interpretive principle has practical implications for the drafting of the indemnification article: the more precisely the scope, triggers, and limitations of the indemnification obligation are defined, the more likely the provision will be enforced as written and the less room there will be for post-hoc disputes over its meaning.
Importantly, Massachusetts does not have an anti-indemnification statute that would apply to clinical trial agreements. Certain states have enacted anti-indemnification statutes that restrict or prohibit contractual indemnification in specific contexts — most commonly in the construction industry, where statutes in many states void indemnification provisions that require one party to indemnify another for the other's own negligence. Massachusetts has enacted such a statute for construction contracts (M.G.L. c. 149, § 29C), but this statute is limited to construction agreements and does not extend to research agreements, clinical trial agreements, or other commercial contracts. There are no Massachusetts statutory provisions that would restrict the enforceability of the indemnification provisions contemplated in the CTA.
B. Nonprofit Status Considerations
Both TMRI and HUMC are nonprofit corporations, and their nonprofit status introduces additional considerations relevant to the indemnification negotiation. Massachusetts law does not prohibit nonprofit corporations from entering into contractual indemnification agreements, and there is no general-law principle that limits the scope of indemnification commitments that a nonprofit may undertake. However, the directors and officers of Massachusetts nonprofit corporations owe fiduciary duties of care and loyalty to the corporation and its charitable mission, and these fiduciary obligations require that indemnification commitments be proportionate to the institution's financial capacity and insured risk exposure. See M.G.L. c. 180, § 6C (permitting indemnification of directors and officers of nonprofit corporations); see also Stern v. Lucy Webb Hayes National Training School of Deaconesses & Missionaries, 381 F. Supp. 1003 (D.D.C. 1974) (articulating fiduciary obligations of nonprofit directors in the context of institutional risk management).
An uncapped indemnification obligation for a nonprofit sponsor — as proposed in HUMC's primary position — could raise questions about prudent financial management and board oversight. If a claim or series of claims were to exhaust the available insurance coverage, the excess liability would be payable from TMRI's general operating funds, potentially diverting resources from the Institute's research mission. The TMRI Board of Trustees, under the leadership of Dr. Ansel R. Varnham, President and CEO, has a fiduciary obligation to ensure that any indemnification commitment does not expose the Institute to disproportionate financial risk. While the board has not been directly involved in the CTA negotiation to date, Mr. Pruitt should consider whether board-level review or approval is warranted for the final indemnification terms, particularly if the aggregate cap exceeds $15,000,000.
Similar fiduciary considerations apply to HUMC, although HUMC's interests in this negotiation are primarily those of an indemnitee seeking broad protection. HUMC's board and institutional leadership likewise have obligations to ensure that the institution's participation in the Cobalt Ridge Health IT-3 Trial is supported by adequate indemnification and insurance protections, given the inherent risks of investigational device research.
C. Anti-Subrogation and Insurance Interaction
The indemnification provisions of the CTA must be evaluated in conjunction with the parties' respective insurance coverages to ensure that the contractual risk allocation is consistent with the insurance framework and that there are no gaps or conflicts between the two.
TMRI maintains clinical trial liability insurance with Commonwealth Specialty Underwriters, Inc. (Policy No. CTL-2025-08843), providing coverage of $10,000,000 per occurrence and $25,000,000 in the aggregate for the policy period of January 1, 2026, through December 31, 2027. HUMC maintains professional liability insurance with Pinnacle Mutual Insurance Company (Policy No. PML-HU-2025-4471), providing coverage of $5,000,000 per occurrence and $15,000,000 in the aggregate.
In Massachusetts, contractual indemnification provisions are generally enforceable alongside insurance coverage, and there is no absolute anti-subrogation rule that would prevent an insurer from seeking recovery from an indemnitor. However, careful coordination is needed to ensure that the indemnification terms are consistent with the terms of the underlying policies. Specifically:
First, TMRI's insurer, Commonwealth Specialty, may require that the CTA's indemnification terms be reviewed and approved to ensure consistency with the policy terms. Certain insurers require advance notice of contractual indemnification commitments and reserve the right to deny coverage for claims arising under indemnification agreements that exceed the scope of the policy or that are inconsistent with the policy's terms and conditions. TMRI should confirm with its insurance broker whether the CTA terms require insurer approval and, if so, factor this requirement into the negotiation timeline.
Second, the CTA should be drafted to avoid creating conflicts between TMRI's indemnification obligation to HUMC and Commonwealth Specialty's coverage obligations to TMRI. For example, if the CTA indemnification scope is broader than the scope of coverage under the Commonwealth Specialty policy, TMRI could face a gap in which it is contractually obligated to indemnify HUMC but its insurer denies coverage on the ground that the claim falls outside the policy's coverage terms.
Third, the CTA should address the interaction between TMRI's indemnification obligation and HUMC's own professional liability coverage. In scenarios where a third-party claim implicates both TMRI's device-related responsibility and HUMC's institutional/PI negligence, the question of primary and excess coverage obligations must be clearly addressed to avoid disputes over which party's insurer bears the initial responsibility.
We recommend that the CTA include a provision requiring both parties to maintain specified minimum insurance coverage levels throughout the duration of the study and for a specified tail period following study completion, and to provide evidence of such coverage to the other party upon request. This provision should specify that TMRI will maintain clinical trial liability insurance with per-occurrence and aggregate limits not less than the amounts specified in the CTA, and that HUMC will maintain professional liability insurance with per-occurrence and aggregate limits not less than its current coverage levels.
V. Insurance Coverage Alignment Analysis
A. TMRI's Clinical Trial Liability Insurance
TMRI's clinical trial liability insurance is provided by Commonwealth Specialty Underwriters, Inc. under Policy No. CTL-2025-08843. The key terms of the policy are as follows:
The policy period of January 1, 2026, through December 31, 2027, covers the anticipated enrollment period of the Cobalt Ridge Health IT-3 Trial (estimated first enrollment April 7, 2026, through estimated last enrollment approximately June 30, 2027). However, the policy expires on December 31, 2027, which is approximately 18 months before the estimated study completion date of June 30, 2029. The follow-up period for subjects enrolled near the end of the enrollment window will extend well beyond the current policy expiration date.
This temporal gap between the policy expiration and the estimated study completion is a critical consideration for the negotiation. Any indemnification commitment that extends to study completion — as is standard in clinical trial agreements — must be backed by insurance coverage through at least June 30, 2029, and preferably for an additional period of 12 to 24 months following last patient last visit to account for latent claims. TMRI will need to renew or extend the Commonwealth Specialty policy, or obtain replacement coverage, to ensure that the insurance backstop remains in place for the full duration of TMRI's indemnification obligations under the CTA. We recommend that the CTA include a provision requiring TMRI to maintain clinical trial liability insurance through at least 24 months after the last patient last visit, and that Mr. Pruitt initiate discussions with TMRI's insurance broker regarding the renewal or extension of the Commonwealth Specialty policy.
The per-occurrence limit of $10,000,000 represents the maximum payout under the policy for any single claim or group of related claims arising from a single occurrence. The aggregate limit of $25,000,000 represents the maximum total payout for all claims during the policy period, across all clinical trials insured under the policy. As noted above, TMRI currently has four other active clinical trials insured under the same policy, which means that the $25,000,000 aggregate is shared among five trials (including Cobalt Ridge Health IT-3).
TMRI's proposed CTA cap of $10,000,000 aligns with the per-occurrence limit but effectively treats this amount as the aggregate cap for the CTA. While this provides full insurance coverage for any single claim (up to $10,000,000), it does not address the multi-claim scenario. HUMC's proposed cap of $25,000,000 aligns with the aggregate policy limit but, as discussed above, would consume the entire aggregate capacity if fully triggered, potentially leaving TMRI's other trials without insurance coverage.
B. HUMC's Professional Liability Insurance
HUMC maintains professional liability insurance with Pinnacle Mutual Insurance Company under Policy No. PML-HU-2025-4471. The key terms are as follows:
HUMC's professional liability coverage provides a backstop for claims arising from institutional or PI negligence in the conduct of the Cobalt Ridge Health IT-3 Trial. In scenarios where a third-party claim is attributable in whole or in part to HUMC's or the PI's conduct, HUMC's own insurance coverage would be the primary source of defense and indemnity, reducing the practical risk to TMRI if HUMC's reciprocal indemnification obligation under the CTA is triggered. The existence of HUMC's professional liability coverage is relevant to the analysis of the reciprocal indemnification standard: because HUMC maintains substantial insurance, the practical risk to TMRI of accepting a gross negligence standard (rather than ordinary negligence) for general conduct claims is mitigated to some extent, as HUMC's insurer would bear the initial exposure for most claims arising from PI or institutional negligence.
The CTA should include a provision requiring both parties to maintain specified minimum insurance levels throughout the study duration and for any applicable tail period. We recommend that the minimum coverage requirements be set at the current coverage levels for each party — $10,000,000 per occurrence/$25,000,000 aggregate for TMRI's clinical trial liability coverage, and $5,000,000 per occurrence/$15,000,000 aggregate for HUMC's professional liability coverage — and that each party be required to provide the other with certificates of insurance upon execution of the CTA and annually thereafter.
C. Gap Analysis
Based on our review of the parties' insurance programs, we have identified two significant gaps that must be addressed in the CTA and in TMRI's insurance planning:
Temporal Gap. TMRI's Commonwealth Specialty policy expires on December 31, 2027. The estimated study completion date is June 30, 2029. This creates an 18-month period during which TMRI would have no insurance coverage to back its indemnification obligations under the CTA, unless the policy is renewed or extended. Additionally, claims related to medical device implants may not surface until months or years after the procedure, particularly in a 24-month follow-up study. The CTA should require TMRI to maintain clinical trial liability insurance coverage through at least 24 months after the last patient last visit — that is, through approximately June 30, 2031 — or to purchase an extended reporting period ("tail") endorsement if the policy is not renewed. Mr. Pruitt should be advised to consult with TMRI's insurance broker, and if necessary with Commonwealth Specialty directly, regarding the availability and cost of policy renewal or tail coverage extending through the required period.
Capacity Gap. If the indemnification cap in the CTA is set at $25,000,000 (HUMC's requested amount), this would equal the full aggregate limit of TMRI's Commonwealth Specialty policy, which covers all of TMRI's clinical trials during the policy period. In a worst-case scenario where the full $25,000,000 cap is triggered on Cobalt Ridge Health IT-3 claims, TMRI would have no remaining aggregate capacity under the policy to cover claims arising from its other four active trials. A compromise cap of $15,000,000, as we recommend, would leave $10,000,000 of aggregate capacity available for other trial exposures — a meaningful cushion, though one that underscores the importance of TMRI's overall portfolio risk management.
The gap analysis reinforces our recommendation that the CTA include robust insurance maintenance obligations for both parties and that TMRI proactively address the temporal gap by initiating renewal discussions with Commonwealth Specialty well in advance of the policy expiration.
VI. Industry Precedents and Risk Allocation in Clinical Trial Agreements
A. Standard Practices in Investigator-Initiated Trial CTAs
The risk allocation framework in clinical trial agreements varies significantly depending on the nature of the trial, the identity of the sponsor, and the respective roles of the parties. In sponsor-initiated industry trials — where a commercial device or pharmaceutical company sponsors a study conducted at one or more clinical sites — it is common for the sponsor to provide broad indemnification for device-related or drug-related claims, often with uncapped or very high-cap commitments backed by the sponsor's corporate resources and comprehensive insurance programs. In this context, the sponsor has designed and manufactured the investigational product, controls the protocol, and exercises substantial oversight over the conduct of the trial, making it appropriate for the sponsor to bear primary financial responsibility for product-related adverse outcomes.
In investigator-initiated trials, the risk allocation is typically different, reflecting the shared nature of the undertaking and the greater autonomy exercised by the PI and the institution. In

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