Contract analysis

I. EXECUTIVE SUMMARY AND TRANSACTION OVERVIEW A. Purpose and Scope Calderwood & Harkness LLP ("C&H" or the "Firm") was engaged by Ardent Capital Partners III LP ("Ardent Capital" or the "Buyer Fund") and Ardent Capital Management III LLC ("Ardent GP" and, together with Ardent Capital, the "Client") to conduct comprehensive legal due diligence in connection with the proposed acquisition (the "Transaction" or the "Prop

1. Change of Control Consent Requirements. We have identified a total of fourteen (14) change of control consent requirements across the Company's material contracts and facility leases that are triggered by the Proposed Acquisition. These consent requirements are distributed across managed care and commercial payor agreements, key vendor contracts (including the Vertex Health Technologies EHR platform agreement), an

2. Pending Medical Malpractice Litigation. Two medical malpractice lawsuits are currently pending against MedVance and/or its subsidiaries, with an aggregate estimated exposure of approximately $4,200,000. Both suits are fully reserved on the Company's financial statements and are covered under the Company's professional liability insurance policy, subject to applicable deductibles and retentions. The details of each

3. Open EEOC Charge. One charge of discrimination is currently pending before the Equal Employment Opportunity Commission ("EEOC") alleging race-based discrimination by a former employee at the Company's Birmingham, Alabama facility. The charge was filed in June 2024 and remains under investigation. The details of this charge are set forth in Part VI, Section C of this Report. We recommend inclusion of this matter as

4. State Licensure Transfer Approvals. The Transaction will require licensure transfer or change-of-ownership approvals from healthcare regulatory authorities in each of the Company's four operating states: Tennessee, Alabama, Georgia, and Kentucky. The anticipated approval timelines are set forth in Part X, Section B and range from approximately March 5, 2025 (Tennessee) to April 10, 2025 (Kentucky). The Kentucky ap

5. HSR Act Compliance. The HSR pre-merger notification filing was submitted on December 18, 2024, under Reference Number HSR-2024-7231. As of the date of this Report, the initial waiting period has not yet expired; however, we note for the record that early termination of the waiting period was subsequently granted on January 22, 2025, and no second request for additional information was issued by either the Federal

6. Indemnity Protections. We recommend specific indemnity protections in the SPA addressing the foregoing risk items, as well as customary protections for pre-closing tax liabilities, environmental matters, healthcare regulatory compliance, and employee benefit plan matters. The detailed recommendations are set forth in Section XIII of this Report. No issues have been identified in the course of our legal due diligen

II. PART I — CORPORATE AND ORGANIZATIONAL A. Formation and Good Standing MedVance Health Systems, Inc. is a corporation organized and existing under the laws of the State of Delaware. The Company was originally incorporated on March 17, 2009, under the name "Ryland Healthcare Services, Inc." and subsequently changed its name to "MedVance Health Systems, Inc." effective June 14, 2013, in connection with the investment

III. PART II — MATERIAL CONTRACTS A. Overview of Material Contract Review C&H has conducted a comprehensive review of the material contracts of MedVance and its subsidiaries. For purposes of this diligence review, "material contracts" include: (a) all contracts involving aggregate consideration or annual payments in excess of $500,000; (b) all contracts with a remaining term (including renewal options) in excess of t