Contract analysis

I. Executive Summary This memorandum summarizes the findings of the employee benefits and ERISA diligence review conducted by Calderwood & Harkness LLP in connection with the proposed acquisition (the "Transaction") of MedVance Health Systems, Inc. (the "Company" or "Target") by Ardent Healthcare Holdings Inc. (the "Purchaser"), a portfolio company of Ardent Capital Partners III LP ("Ardent GP"). The Transaction cont

II. Scope and Methodology A. Documents Reviewed The following is a summary of the principal categories of documents reviewed in connection with this diligence engagement. Individual documents are referenced by their data room index numbers where appropriate throughout this memorandum. • MedVance Health Systems, Inc. 401(k) Profit Sharing Plan document (as amended and restated effective January 1, 2022) and all subseq

III. Company Workforce Overview The following workforce statistics are relevant to the employee benefits analysis and provide necessary context for evaluating the Company's plan eligibility requirements, ACA obligations, and overall benefits cost structure. • Total Employees. The Company employs approximately 4,800 individuals across four states: Tennessee (principal operations and corporate headquarters in Nashville

IV. Qualified Retirement Plans A. MedVance Health Systems, Inc. 401(k) Profit Sharing Plan

1. Plan Design and Terms. The Company sponsors and maintains the MedVance Health Systems, Inc. 401(k) Profit Sharing Plan (the "401(k) Plan" or the "Plan"), a tax-qualified defined contribution plan under IRC § 401(a) that includes a cash-or-deferred arrangement under IRC § 401(k). The material terms of the Plan are as follows: Plan Type. The Plan is a Section 401(k) profit sharing plan with participant-directed inve

2. Determination Letter and Plan Document Compliance. The 401(k) Plan received a favorable IRS Determination Letter dated March 14, 2022, which confirmed the Plan's qualified status under IRC § 401(a) and the tax-exempt status of the Plan's trust under IRC § 501(a). The determination letter was issued in connection with the Plan's amendment and restatement effective January 1, 2022. Because the Plan is maintained on

3. Form 5500 Filings. We reviewed the Form 5500 Annual Return/Report of Employee Benefit Plan filings for the 401(k) Plan for the three most recent plan years. A summary of key data from these filings is set forth below: All three filings were submitted on a timely basis with no extensions noted. As a "large plan filer" (more than 100 participants at the beginning of the plan year), the 401(k) Plan is subject to the

4. Nondiscrimination Testing. The 401(k) Plan does not utilize a safe harbor contribution formula (i.e., it does not satisfy the requirements of IRC § 401(k)(12) or § 401(k)(13)), and accordingly, the Plan is required to satisfy the annual nondiscrimination testing requirements under IRC §§ 401(k)(3) and 401(m)(2), commonly referred to as the Actual Deferral Percentage ("ADP") test and the Actual Contribution Percent

5. Fiduciary and Service Provider Matters. Trustee and Recordkeeper. Brightwater Capital Management serves as both the trustee and the recordkeeper for the 401(k) Plan. The Plan's assets are held in trust by Westvale Solutions. The custodial and recordkeeping services agreement between the Company and Fidelity was entered into in connection with the 2022 Plan restatement and is terminable by either party upon 90 days

6. Identified Issues. Our review identified the following discrete compliance items relating to the 401(k) Plan. While neither issue presents a material risk to the Transaction, we note them for completeness and recommend that they be addressed prior to or promptly following the closing. Late Deposit of Employee Deferrals. During the second quarter of 2023 (specifically, the payroll cycles ending April 14, 2023 and A

V. Health and Welfare Plans A. Medical / Health Plans

1. Plan Structure. The Company provides group medical coverage to eligible employees and their dependents through two fully insured arrangements, as described below. BlueLine Health Plan of Tennessee (the "BlueLine Plan"). The Company's primary medical coverage is provided through a fully insured group health insurance policy issued by BlueLine Health Plan of Tennessee. The BlueLine Plan covers approximately 2,900 en

2. Premiums and Cost Sharing. The approximate annual premium costs for the Company's medical plans are as follows: BlueLine Plan: • Approximate annual gross premium: $18.4 million • Employer contribution: approximately 70% of the premium for employee-only coverage and approximately 55% of the premium for dependent coverage (employee + spouse, employee + child(ren), and family tiers) • Resulting approximate annual emp

3. ACA Compliance. The Company is an "applicable large employer" ("ALE") within the meaning of IRC § 4980H, having employed an average of more than 50 full-time employees (including full-time equivalent employees) during the preceding calendar year. As an ALE, the Company is subject to the employer shared responsibility provisions of the ACA (commonly referred to as the "employer mandate" or "pay or play" rules), whi

Section 125 Cafeteria Plan. The Company maintains a Section 125 cafeteria plan (within the meaning of IRC § 125) that permits eligible employees to pay their share of group health, dental, and vision insurance premiums on a pre-tax basis. The cafeteria plan also includes a health flexible spending account ("Health FSA") component, which permits employees to set aside up to $3,200 (the 2025 limit under IRC § 125(i)) o

VI. Executive Compensation Arrangements A. Employment Agreements

1. Summary of Named Executive Employment Agreements. The Company has entered into written employment agreements with four of its five named executive officers. The material terms of each agreement are summarized below. Daniel Burch, President and Chief Executive Officer: • Effective Date: March 1, 2020, as amended effective January 1, 2023 • Base Salary: $625,000 per annum, subject to annual review and increase (but

2. Severance Provisions in Employment Agreements. Each of the four employment agreements described above provides for severance benefits upon the executive's termination of employment by the Company without "Cause" or the executive's resignation for "Good Reason" (each as defined in the respective employment agreement). The definitions of Cause and Good Reason are substantially similar across all four agreements, wit

3. Change-of-Control Provisions in Employment Agreements. Each of the four employment agreements includes a definition of "Change of Control" that will be satisfied by the Transaction. The definitions are substantially identical across all four agreements and include, among other triggering events, the sale, transfer, or other disposition of more than 50% of the outstanding equity securities of the Company, the merge

4. IRC § 280G / 4999 Analysis. Payments and benefits provided to the named executives in connection with the Transaction may constitute "parachute payments" under IRC § 280G. Section 280G denies a tax deduction to the Company (or its successor) for any "excess parachute payment" made to a "disqualified individual" (generally, officers, shareholders, and highly compensated employees) in connection with a change in own