Common use of FACTUAL BACKGROUND AND RECITALS Clause in Contracts

FACTUAL BACKGROUND AND RECITALS. 1. On or around December 27, 2023, HBSC was a target of a cybersecurity incident involving unauthorized access to certain third-party applications utilized by HBSC. When HBSC detected the incident, it took action to contain it and remediate any issues related to the incident. 2. Following the December 2023 cybersecurity incident, multiple putative class action lawsuits were filed against HBSC. 3. On April 15, 2024, Plaintiff ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ filed a putative class action complaint against HBSC in the Tulare County Superior Court with the caption ▇▇▇▇▇▇▇▇▇ v. Hapy Bear Surgery Center, LLC, Case No. VCU307987 (“▇▇▇▇▇▇▇▇▇”). ▇▇▇▇▇▇▇▇▇ brought claims against HBSC related to the December 2023 cybersecurity incident. 4. On April 22, 2024, Plaintiff ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ filed a putative class action complaint against HBSC in the Tulare County Superior Court with the caption ▇▇▇▇▇▇▇ v. Hapy Bear Surgery Center, LLC, Case No. VCU308221 (“▇▇▇▇▇▇▇”). ▇▇▇▇▇▇▇ brought claims against HBSC related to the December 2023 cybersecurity incident. 5. On June 24, 2024, the ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ actions were consolidated before Judge ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of the Tulare County Superior Court under the caption of the first filed ▇▇▇▇▇▇▇▇▇ case titled In re Hapy Bear Surgery Center Data Security Incident Litigation, Case No. VCU307987 (the “Action”). 6. Plaintiffs collectively filed a consolidated complaint on July 24, 2024. 7. The Parties’ Counsel are experienced litigators in consumer protection, data privacy, and data breach litigation. The Parties exchanged confidential information related to the December 27, 2023 cybersecurity incident that allowed the Parties to assess all aspects of the case and meaningfully engage in arms-length settlement negotiations. HBSC provided informal discovery responses that included a summary of the facts based on the investigation into the cybersecurity incident as well as its recovery and restoration process and hardening measures. HBSC also provided and directed Plaintiffs to information regarding the approximate total number of US customers impacted by the incident. These discussions eventually led to a private mediation. 8. On July 19, 2024, the Parties conducted an all-day mediation with the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. Jones of Resolute Dispute Resolution in an effort to reach a settlement agreement. The Parties reached a settlement agreement during the mediation.