1001-00001 · Ardent Capital Partners · Engagement & Administration

conflicts-check-memorandum.docx DOCUMENT Antitrust

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

TO: Howard Bellamy, Partner, Antitrust & Competition Practice Group

FROM: Monica Reyes, Associate, Antitrust & Competition Practice Group Elliot Nguyen, Associate, Antitrust & Competition Practice Group

DATE: January 28, 2024

RE: Conflicts Clearance — Proposed Representation of Ardent Capital Partners III LP in Connection with Acquisition of Pinnacle Health Systems, Inc.

PROPOSED MATTER NO.: 1001-00001

This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by the attorneys and personnel of Calderwood & Harkness LLP in evaluating the proposed representation described herein. This memorandum should not be disclosed to any person outside the firm without the prior written approval of the Calderwood & Harkness General Counsel's Office.

I. Purpose

This memorandum documents the results of the conflicts clearance process conducted in connection with the proposed engagement of Calderwood & Harkness LLP ("the Firm" or "Calderwood & Harkness") by Ardent Capital Partners III LP ("Ardent Capital" or the "Client") to serve as antitrust counsel in connection with Ardent Capital's proposed acquisition of one hundred percent (100%) of the outstanding equity of Pinnacle Health Systems, Inc. ("Pinnacle" or "PHS") (the "Transaction"). The conflicts clearance process was undertaken in accordance with Calderwood & Harkness's General Counsel Conflicts Policy (revised September 2023) and the applicable provisions of the New York Rules of Professional Conduct.

The scope of the proposed engagement would encompass the following categories of antitrust advisory work: (a) preparation, review, and filing of Hart-Scott-Rodino ("HSR") premerger notification forms with the Federal Trade Commission ("FTC") and the Antitrust Division of the United States Department of Justice ("DOJ"); (b) preparation and submission of a request for early termination of the statutory thirty-day waiting period under the HSR Act, 15 U.S.C. § 18a; (c) substantive antitrust analysis of the Transaction's competitive implications, including market definition, competitive overlap analysis, and assessment of potential theories of competitive harm; (d) if applicable, response to any request for additional information or documentary material ("Second Request") issued by the reviewing agency; and (e) coordination with antitrust counsel to the target and seller regarding the acquired person's HSR notification filing and related submissions.

It is anticipated that the engagement letter between Ardent Capital Partners III LP and Calderwood & Harkness LLP will be executed on or about January 29, 2024. The Equity Purchase Agreement among Ardent Capital Partners III LP, Veltrano Equity Partners Fund V LP, and Pinnacle Health Systems, Inc. is expected to be executed on or about January 31, 2024, with HSR filings to follow promptly thereafter.

This memorandum identifies all parties to the Transaction and related entities, describes the searches conducted of the Firm's conflicts database, sets forth the results of those searches, analyzes any potential conflicts under the applicable ethical rules, and presents our conclusion and recommendation regarding conflicts clearance.

II. Transaction Summary

The following is a summary of the material terms of the proposed Transaction and the principal parties thereto, based on information provided by the Client, the draft Equity Purchase Agreement (circulated January 24, 2024), and publicly available sources.

Transaction Type: 100% stock purchase (equity acquisition) of Pinnacle Health Systems, Inc. The Transaction is structured as a purchase by Ardent Capital Partners III LP (or a wholly-owned acquisition subsidiary to be formed prior to closing) of all of the issued and outstanding shares of common stock of Pinnacle Health Systems, Inc. from the existing stockholders, including Veltrano Equity Partners Fund V LP (majority holder) and certain management stockholders.

Enterprise Value: Approximately $952 million, inclusive of approximately $418 million in net funded debt assumed or refinanced at closing.

Equity Value: Approximately $534 million, consisting of cash consideration of approximately $505.5 million payable at closing plus management rollover equity of approximately $28.5 million contributed by certain members of Pinnacle's existing management team who are rolling over a portion of their existing equity interests into the post-closing capital structure.

Acquirer / Client

Ardent Capital Partners III LP, a Delaware limited partnership; principal office at 399 Park Avenue, 41st Floor, New York, NY 10022. Ardent Capital Partners III LP is a private equity fund organized to make leveraged buyout and growth equity investments primarily in the healthcare services, financial services, and business services sectors.

General Partner of Acquirer: Ardent Capital GP III LLC, a Delaware limited liability company, serves as the general partner of Ardent Capital Partners III LP and has sole authority to manage the affairs of the fund, including to authorize the execution of the Equity Purchase Agreement and the engagement of legal counsel in connection with the Transaction.

Investment Manager / Fund Sponsor: Ardent Capital Management LLC, a Delaware limited liability company, serves as the investment manager and registered investment adviser (SEC File No. 801-119247) to Ardent Capital Partners III LP and its affiliated funds. Ardent Capital Management LLC is managed by its Co-Founders, Julian Desmond and Priya Chandrasekar, who together serve as Managing Partners and control the day-to-day operations of the firm and its portfolio of managed funds.

Fund Size (Fund III): Ardent Capital Partners III LP reached its final close in November 2021 with aggregate committed capital of approximately $4.8 billion. Fund III is Ardent Capital Management's third institutional fund and its largest to date.

Target / Acquired Person

Pinnacle Health Systems, Inc., a Delaware corporation; principal office at 2200 Lakeshore Boulevard, Suite 500, Charlotte, NC 28202. Pinnacle Health Systems is a diversified ambulatory healthcare services platform. The company's Chief Executive Officer and Chairman of the Board of Directors is Dr. Marcus Ellsworth. The company's Chief Financial Officer is Sandra Trevino.

Target Operations: Pinnacle operates a network of forty-two (42) ambulatory surgical centers ("ASCs") and thirty-one (31) affiliated physician practice management entities across nine states: North Carolina, South Carolina, Virginia, Tennessee, Georgia, Florida, Alabama, Ohio, and Texas. The company employs approximately 4,700 individuals across its platform, including employed and affiliated physicians, nurses, surgical technicians, administrative staff, and corporate personnel. For its fiscal year ended December 31, 2023, Pinnacle reported total revenue of approximately $637.4 million. The company's operations are classified under North American Industry Classification System ("NAICS") codes 621111 (Offices of Physicians — except Mental Health Specialists) and 621493 (Freestanding Ambulatory Surgical and Emergency Centers).

Selling Sponsor. Veltrano Equity Holdings LLC, a Delaware limited liability company, through its affiliated fund Veltrano Equity Partners Fund V LP; principal office at 1400 Elm Street, Suite 3200, Dallas, TX 75201. The Managing Member and Senior Partner of Veltrano Equity Holdings LLC is Theodore "Ted" Hargrove. Veltrano acquired Pinnacle Health Systems in 2017 at an enterprise value of approximately $340 million and has overseen a period of significant growth through a combination of organic expansion and tuck-in acquisitions.

Rollover Participant. Dr. Marcus Ellsworth, CEO and Chairman of Pinnacle, is expected to roll over approximately $28.5 million of his existing equity in Pinnacle into the post-closing capital structure, representing approximately 3.0% of post-closing equity. Dr. Ellsworth will continue to serve as CEO following the closing of the Transaction.

III. Parties Searched in Conflicts System

Search Methodology. In accordance with Calderwood & Harkness's General Counsel Conflicts Policy, we conducted a comprehensive conflicts search using the Firm's New Matter Intake / Conflicts System ("NMICS"). NMICS is the Firm's centralized conflicts database covering all current and former client representations, adverse parties, related entities, and key individuals across all offices and practice groups of Calderwood & Harkness LLP. The database is updated on a continuous basis as new matters are opened, existing matters are modified, and matters are closed.

Searches were conducted using full-text search functionality, including exact name matches, partial name matches, wildcard searches, and phonetic similarity matching. Each entity and individual was searched using all known full legal names, short names, trade names, and common abbreviations. Employer Identification Numbers ("EINs") were used as supplemental search criteria where available. The searches were conducted over the period of January 26–28, 2024. The complete list of all search terms entered into NMICS is set forth in the Appendix to this memorandum.

The following is a comprehensive listing of all parties and individuals searched in the conflicts system, organized by role in the Transaction:

A. Acquiring Person and Related Entities

1. Ardent Capital Partners III LP (and short names: Ardent Capital, Ardent CP, Fund III) — EIN 87-3421098

2. Ardent Capital GP III LLC — EIN 86-2198403

3. Ardent Capital Management LLC — EIN 84-5567312

4. Julian Desmond, Co-Founder & Managing Partner, Ardent Capital Management LLC

5. Priya Chandrasekar, Co-Founder & Managing Partner, Ardent Capital Management LLC

B. Acquirer's Portfolio Companies in Healthcare Sector

Given that the proposed engagement involves antitrust advisory services in connection with a healthcare acquisition, we identified and searched Ardent Capital's existing portfolio companies operating in the healthcare sector to assess whether any competitive overlap or related-party issue might arise:

1. Marlowe Asset Management Rehabilitation Holdings LLC — outpatient physical therapy and rehabilitation clinics; headquartered at 8950 Westheimer Road, Suite 600, Houston, TX 77063; operates seventy-four (74) locations across Texas, Florida, and Georgia

2. Clearpath Diagnostics Inc. — independent clinical laboratory services; headquartered at 1700 Market Street, Suite 3400, Philadelphia, PA 19103; operations in Pennsylvania, New Jersey, and New York; annual revenue of approximately $218 million

C. Target and Related Entities

1. Pinnacle Health Systems, Inc. (and short names: Pinnacle, PHS) — EIN 56-4389201

2. Dr. Marcus Ellsworth, CEO & Chairman, Pinnacle Health Systems, Inc.

3. Sandra Trevino, CFO, Pinnacle Health Systems, Inc.

D. Selling Sponsor and Related Entities

1. Veltrano Equity Holdings LLC — EIN 75-6012389

2. Veltrano Equity Partners Fund V LP

3. Theodore "Ted" Hargrove, Managing Member / Senior Partner, Veltrano Equity Holdings LLC

E. Counterparty Counsel

1. Fendowell Thornton LLP (Transaction Counsel to Target / Seller) — 227 West Trade Street, Suite 2800, Charlotte, NC 28202; Lead Partner: Catherine "Kate" Yardley

2. Greenvale Durneval LLP (Antitrust Counsel to Target / Seller) — 1800 M Street NW, Suite 1100, Washington, DC 20036; Lead Partner: Jonathan Felder

F. Transaction Counsel to Acquirer

1. Whitfield & Crane LLP — 51 West 52nd Street, New York, NY 10019; Lead Partner: David Ostrander (Corporate / M&A). Whitfield & Crane is serving as lead transaction counsel to Ardent Capital on the corporate aspects of the acquisition, including negotiation and execution of the Equity Purchase Agreement.

G. Financial Advisors

1. Meridian Partners LLC (Buy-side Financial Advisor to Ardent Capital) — 280 Park Avenue, 18th Floor, New York, NY 10017; Managing Director: Grant Hollister

2. Crestline Baird & Co. (Sell-side Financial Advisor to Veltrano / Pinnacle) — 300 South Tryon Street, Suite 2500, Charlotte, NC 28202; Managing Director: Natasha Khoury

H. Lenders and Financing Sources

1. Provident National Bank, N.A. (Lead Arranger / Administrative Agent) — 1500 JFK Boulevard, Philadelphia, PA 19102; Relationship Manager: Paul Ewing; commitment of $410 million Senior Secured First Lien Term Loan B and $55 million Revolving Credit Facility

2. Atlas Credit Opportunities Fund LP (Mezzanine / Second Lien Lender) — 200 Clarendon Street, 47th Floor, Boston, MA 02116; Managing Director: Rebecca Solis; commitment of $95 million Second Lien Term Loan

I. Other Service Providers

1. Harland & Marsh CPAs LLP (Independent Auditor to Pinnacle Health Systems, Inc.) — 100 South Elm Street, Suite 400, Greensboro, NC 27401; Engagement Partner: Timothy Griggs

2. Apex Advisory Group LLC (Quality of Earnings Provider, engaged by Ardent Capital) — One Liberty Plaza, 165 Broadway, New York, NY 10006; Managing Director: Christine Varga

J. Regulatory Bodies

The following governmental entities are identified for informational purposes and completeness. As governmental agencies, they are not subject to traditional conflicts analysis, but are noted here consistent with Firm policy:

• Federal Trade Commission, Bureau of Competition, Premerger Notification Office

• United States Department of Justice, Antitrust Division

IV. Search Results and Analysis

Set forth below are the results of the conflicts searches conducted in NMICS for each party and individual identified in Section III above, together with our analysis of any results returned and our conclusions regarding the existence or absence of any conflict of interest.

A. Ardent Capital Partners III LP and Affiliates

Search Result: No current or prior representations of Ardent Capital Partners III LP, Ardent Capital GP III LLC, or Ardent Capital Management LLC were identified in the Firm's conflicts system. Calderwood & Harkness has not previously represented any Ardent Capital fund, general partner entity, management company, or any other affiliated entity of the Ardent Capital platform in any capacity. No prior adverse representations against any Ardent Capital entity were identified in any matter currently or formerly pending in the Firm's records.

The individual names of Julian Desmond and Priya Chandrasekar were also searched. Neither individual appears as an individual client, adverse party, witness, or other interested person in any existing or former matter in the Firm's records.

Analysis: Because Calderwood & Harkness has no prior or current relationship with any Ardent Capital entity or its principals, no conflict of interest arises under Rule 1.7 (current clients) or Rule 1.9 (former clients) of the New York Rules of Professional Conduct. The proposed representation of Ardent Capital Partners III LP is a new client relationship.

Conclusion: No conflict.

B. Marlowe Asset Management Rehabilitation Holdings LLC

Search Result: No current or prior representation of Marlowe Asset Management Rehabilitation Holdings LLC was identified in the Firm's conflicts system. No adverse matters involving Marlowe Asset Management Rehabilitation Holdings LLC, its subsidiaries, or any affiliated entity were identified. No individual associated with Marlowe Asset Management Rehabilitation appeared in the Firm's records.

Analysis: Marlowe Asset Management Rehabilitation is a portfolio company of Ardent Capital operating in the healthcare sector (outpatient physical therapy). Although Marlowe Asset Management Rehabilitation operates in a different sub-segment of healthcare services than Pinnacle (physical therapy clinics versus ambulatory surgical centers), it was searched as a precaution given the common ownership and potential for competitive overlap analysis in the antitrust review. No conflict exists.

Conclusion: No conflict.

C. Clearpath Diagnostics Inc.

Search Result: No current or prior representation of Clearpath Diagnostics Inc. was identified in the Firm's conflicts system. No adverse matters involving Clearpath Diagnostics or any affiliated entity were identified. No individual associated with Clearpath Diagnostics appeared in the Firm's records.

Analysis: Clearpath Diagnostics is a portfolio company of Ardent Capital operating in the healthcare sector (independent clinical laboratory services). Like Marlowe Asset Management Rehabilitation, it was searched as a precaution due to common ownership and potential relevance in the antitrust analysis. The absence of any current or prior relationship eliminates any potential conflict.

Conclusion: No conflict.

D. Pinnacle Health Systems, Inc. and Related Individuals

Search Result: No current or prior representation of Pinnacle Health Systems, Inc. was identified in the Firm's conflicts system. No current representation of Dr. Marcus Ellsworth or Sandra Trevino in any capacity — whether as individual clients, corporate officers, witnesses, or adverse parties — was identified.

Analysis: Pinnacle Health Systems, Inc. is the target of the proposed acquisition and will be the "acquired person" for purposes of the HSR filing. Pinnacle is not Calderwood & Harkness's client in this engagement; our client is the acquirer, Ardent Capital Partners III LP. The Transaction is a negotiated acquisition in which the buyer and the seller have agreed upon the terms of sale, and both parties share a common interest in obtaining HSR clearance and completing the Transaction. No adversity to Pinnacle Health Systems is anticipated in connection with our HSR filing and antitrust advisory scope. To the extent any issue were to arise with respect to the FTC or DOJ's review of the Transaction, our role would be limited to representing the acquirer's interests in demonstrating the pro-competitive or competitively neutral effects of the Transaction, which is aligned with — not adverse to — Pinnacle's interests.

Because Calderwood & Harkness has never represented Pinnacle, no former-client conflict exists under Rule 1.9. Because Pinnacle is not a current client of the Firm, no current-client conflict exists under Rule 1.7.

Conclusion: No conflict.

E. Veltrano Equity Holdings LLC and Veltrano Equity Partners Fund V LP

Search Result: No current or prior representation of Veltrano Equity Holdings LLC or Veltrano Equity Partners Fund V LP was identified in the Firm's conflicts system. No adverse matters involving Veltrano Equity Holdings LLC, Veltrano Equity Partners Fund V LP, or Theodore "Ted" Hargrove were identified in any existing or former matter.

Analysis: Veltrano is the selling sponsor in the Transaction. Although the seller is technically a counterparty to the buyer in the Equity Purchase Agreement, our engagement as antitrust counsel is limited in scope to HSR filing and antitrust advisory services. Our antitrust advisory role does not place Calderwood & Harkness in an adverse position to Veltrano. To the contrary, Veltrano's interests as the selling sponsor are directly aligned with those of Ardent Capital in obtaining HSR clearance and consummating the Transaction. Both buyer and seller share the mutual objective of completing the Transaction and clearing any regulatory hurdles. Additionally, because Calderwood & Harkness has never represented Veltrano in any matter, no former-client conflict arises under Rule 1.9.

Conclusion: No conflict.

F. Fendowell Thornton LLP

Search Result: A search for Fendowell Thornton LLP returned no current matters in which Calderwood & Harkness and Fendowell Thornton LLP represent adverse parties. No prior co-counsel or opposing counsel relationships were identified that would create a disqualifying conflict or any appearance of impropriety. Calderwood & Harkness has appeared opposite Fendowell Thornton in certain prior matters (general commercial litigation matters in the Southern District of New York in 2019 and 2021), but those matters are now closed and involved entirely different clients and subject matter. No continuing duty or obligation arising from those matters would affect the proposed engagement.

Analysis: Fendowell Thornton serves as sell-side transaction counsel to Pinnacle and Veltrano in connection with the Equity Purchase Agreement and related transaction documents. Our role as antitrust counsel to the acquirer is distinct from and not directly adverse to Fendowell Thornton's representation of the seller. No current matter conflict exists. The prior instances of appearing on opposite sides of litigation matters are not disqualifying, as they involved unrelated clients, unrelated subject matter, and no confidential information was shared between the firms in those matters.

Conclusion: No conflict.

G. Greenvale Durneval LLP

Search Result: No current matters in which Calderwood & Harkness and Greenvale Durneval LLP represent adverse parties were identified. No prior co-counsel or opposing counsel relationships of any kind were identified in the Firm's records.

Analysis: Greenvale Durneval serves as antitrust counsel to the target and seller in connection with the Transaction. Greenvale Durneval will be responsible for preparing and filing the acquired person's HSR notification form and will coordinate with our team regarding timing of filing, substantive antitrust issues, and any agency inquiries or requests for additional information. Both firms' clients share a common interest in obtaining HSR clearance for the Transaction. Accordingly, no adversity is anticipated between Calderwood & Harkness and Greenvale Durneval in this engagement. In practice, antitrust counsel on opposite sides of a negotiated acquisition routinely cooperate in the HSR filing process and share a mutual objective of obtaining clearance.

Conclusion: No conflict.

H. Whitfield & Crane LLP

Search Result: Whitfield & Crane LLP was identified in the Firm's conflicts system as serving as transaction counsel to Ardent Capital Partners III LP (our proposed client) on this acquisition. The lead partner at Whitfield & Crane is David Ostrander (Corporate / M&A). Calderwood & Harkness and Whitfield & Crane are serving as co-counsel representing the same client on different aspects of the same transaction — Whitfield & Crane on the corporate and transactional aspects, and Calderwood & Harkness on the antitrust and regulatory aspects. No adverse relationship exists between the two firms in this context.

Analysis: A co-counsel relationship in which two law firms jointly represent the same client on the same matter, or represent the same client on different aspects of the same transaction, does not create a conflict of interest. The interests of Calderwood & Harkness and Whitfield & Crane are aligned, and both firms owe duties of loyalty and confidentiality to the same client, Ardent Capital Partners III LP.

Conclusion: No conflict.

I. Meridian Partners LLC

Search Result: No current or prior representation of Meridian Partners LLC was identified in the Firm's conflicts system. No adverse matters involving Meridian Partners LLC or Grant Hollister were identified.

Analysis: Meridian Partners is serving as the buy-side financial advisor to Ardent Capital in connection with the Transaction. As an advisor to our client, Meridian Partners' interests are aligned with those of Ardent Capital and Calderwood & Harkness. No conflict arises from this relationship.

Conclusion: No conflict.

J. Crestline Baird & Co.

Search Result: No current or prior representation of Crestline Baird & Co. was identified in the Firm's conflicts system. No adverse matters involving Crestline Baird & Co. or Natasha Khoury were identified.

Analysis: Crestline Baird is serving as the sell-side financial advisor to Veltrano and Pinnacle in connection with the Transaction. Although Crestline Baird represents the seller's interests, the sell-side financial advisor's interests are aligned with all parties in obtaining HSR clearance and consummating the Transaction. No conflict arises from the involvement of Crestline Baird in the Transaction.

Conclusion: No conflict.

K. Provident National Bank, N.A.

Search Result: A search for Provident National Bank, N.A. returned several entries in the Firm's conflicts system. Calderwood & Harkness currently represents a number of clients in matters involving Provident National Bank, including certain commercial lending transactions and securitization matters in which Provident National Bank serves as a lender or trustee. However, in none of these matters does Calderwood & Harkness represent Provident National Bank itself as a client. Furthermore, none of the existing matters involves any subject matter related to the proposed Transaction, and in no existing matter is Calderwood & Harkness adverse to Provident National Bank in a manner that would be affected by the proposed representation of Ardent Capital.

Analysis: Provident National Bank is the lead arranger and administrative agent for the acquisition debt financing in this Transaction. Provident's commitment includes a $410 million Senior Secured First Lien Term Loan B and a $55 million Revolving Credit Facility. Provident's interests as a lender are aligned with the successful closing of the Transaction. Calderwood & Harkness's role as antitrust counsel to the acquirer does not create any adversity to Provident National Bank. Because Calderwood & Harkness does not currently represent Provident National Bank as a client in any matter, no current-client conflict arises under Rule 1.7. No former-client conflict exists under Rule 1.9.

Conclusion: No conflict.

L. Atlas Credit Opportunities Fund LP

Search Result: No current or prior representation of Atlas Credit Opportunities Fund LP was identified in the Firm's conflicts system. No adverse matters involving Atlas Credit Opportunities Fund LP or Rebecca Solis were identified.

Analysis: Atlas Credit Opportunities Fund LP is providing a $95 million Second Lien Term Loan as part of the acquisition financing. As a mezzanine lender, Atlas Credit's interests are aligned with the successful closing of the Transaction. No conflict arises.

Conclusion: No conflict.

M. Harland & Marsh CPAs LLP

Search Result: No current or prior representation of Harland & Marsh CPAs LLP was identified in the Firm's conflicts system. No adverse matters involving Harland & Marsh or Timothy Griggs were identified.

Analysis: Harland & Marsh serves as the independent auditor to Pinnacle Health Systems, Inc. Harland & Marsh's role is limited to providing audit and accounting services to the target company. No adversity between Calderwood & Harkness and Harland & Marsh is anticipated in connection with the proposed engagement.

Conclusion: No conflict.

N. Apex Advisory Group LLC

Search Result: No current or prior representation of Apex Advisory Group LLC was identified in the Firm's conflicts system. No adverse matters involving Apex Advisory Group LLC or Christine Varga were identified.

Analysis: Apex Advisory Group LLC has been engaged by Ardent Capital to prepare the buy-side quality of earnings report in connection with the Transaction. Apex Advisory is a service provider to our client and its interests are aligned with those of Ardent Capital. No conflict arises from this relationship.

Conclusion: No conflict.

V. Ethical Rules Considered

In conducting the conflicts analysis set forth in Section IV above, we considered the following provisions of the New York Rules of Professional Conduct, which govern the professional responsibilities of attorneys admitted to practice in the State of New York and apply to Calderwood & Harkness LLP and its attorneys:

Rule 1.7 — Conflict of Interest: Current Clients. Rule 1.7(a) provides that, except as otherwise permitted by the Rule, a lawyer shall not represent a client if a reasonable lawyer would conclude that (1) the representation will involve the lawyer in representing differing interests, or (2) there is a significant risk that the lawyer's professional judgment on behalf of a client will be adversely affected by the lawyer's own financial, business, property, or other personal interests. We have confirmed that no current-client conflict exists under Rule 1.7(a). Calderwood & Harkness does not currently represent any party to the Transaction (other than the proposed client, Ardent Capital) that has interests adverse to Ardent Capital. There is no significant risk that the proposed representation of Ardent Capital will be materially limited by Calderwood & Harkness's responsibilities to any other current client.

Rule 1.9 — Duties to Former Clients. Rule 1.9(a) provides that a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed consent, confirmed in writing. We have confirmed that Calderwood & Harkness has not formerly represented any party identified in Section III in a matter that is the same as or substantially related to the proposed representation of Ardent Capital. No former-client conflict exists under Rule 1.9.

Rule 1.10 — Imputation of Conflicts of Interest. Rule 1.10(a) provides that while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9. Because no individual attorney within Calderwood & Harkness has been identified as having a personal conflict that would be subject to imputation under Rule 1.10, no imputed conflict exists.

We have also considered the Firm's internal policies regarding lateral attorney screening and side-letter conflicts waivers. No lateral attorney currently employed by Calderwood & Harkness is subject to any screening obligation or side-letter restriction that would affect the proposed representation.

VI. Conclusion and Clearance

Based on the comprehensive conflicts search and analysis set forth in this memorandum, no conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed representation of Ardent Capital Partners III LP in connection with the HSR filing and antitrust advisory services relating to the acquisition of Pinnacle Health Systems, Inc.

All parties to the Transaction, their respective counsel, financial advisors, lenders, and other service providers have been searched in the Firm's New Matter Intake / Conflicts System. None of the search results identified any current-client conflict under Rule 1.7, any former-client conflict under Rule 1.9, or any imputed conflict under Rule 1.10 of the New York Rules of Professional Conduct. The Firm is free and clear to proceed with the proposed engagement.

The matter is hereby cleared for opening under the following designations:

The engagement letter may proceed for execution on or about January 29, 2024, consistent with the terms discussed between Howard Bellamy and Julian Desmond on January 23, 2024.

Should any new parties, entities, or individuals become involved in the Transaction after the date of this memorandum, a supplemental conflicts search should be conducted and the results documented before any work is undertaken on behalf of or in connection with such additional parties.

VII. Approval

By signing below, the undersigned confirm that the conflicts clearance process documented in this memorandum has been completed in accordance with Calderwood & Harkness's General Counsel Conflicts Policy and the applicable New York Rules of Professional Conduct, and that the proposed representation of Ardent Capital Partners III LP in Matter No. 1001-00001 is approved for opening.

RESPONSIBLE PARTNER APPROVAL:

CALDERWOOD & HARKNESS LLP Antitrust & Competition Practice Group

By: ________

Name: Howard Bellamy

Title: Partner, Antitrust & Competition Practice Group

Date: ________

GENERAL COUNSEL'S OFFICE APPROVAL:

CALDERWOOD & HARKNESS LLP Office of the General Counsel

By: ________

Name: ________

Title: Deputy General Counsel / Conflicts Counsel

Date: ________

Date of Approval: January 28, 2024

VIII. Appendix — Conflicts Search Terms

The following is a comprehensive listing of all search terms entered into the Firm's New Matter Intake / Conflicts System (NMICS) during the conflicts clearance process documented in this memorandum. Searches were conducted on January 26–28, 2024. Each entity was searched using all known full legal names, short names, trade names, common abbreviations, and alternative spellings. Employer Identification Numbers (EINs) were used as supplemental search criteria where available.

A. Acquiring Person and Related Entities

B. Acquirer's Portfolio Companies in Healthcare Sector

C. Target and Related Entities

D. Selling Sponsor and Related Entities

E. Counterparty Counsel

F. Transaction Counsel to Acquirer

G. Financial Advisors

H. Lenders and Financing Sources

I. Other Service Providers

END OF MEMORANDUM

Prepared by Monica Reyes and Elliot Nguyen, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. All searches conducted January 26–28, 2024. This memorandum and the conflicts analysis contained herein are subject to the attorney-client privilege and the work product doctrine. Do not distribute outside of Calderwood & Harkness LLP without prior authorization from the Office of the General Counsel.

Field	Detail
Proposed Matter No.	1001-00001
Client Name	Ardent Capital Partners III LP
Matter Description	HSR Filing and Antitrust Advisory — Acquisition of Pinnacle Health Systems, Inc.
Responsible Partner / Billing Partner	Howard Bellamy, Partner, Antitrust & Competition Practice Group
Lead Associate	Monica Reyes, Associate, Antitrust & Competition Practice Group
Working Associate	Elliot Nguyen, Associate, Antitrust & Competition Practice Group
Anticipated Engagement Date	January 29, 2024
Billing Rate Structure	Per engagement letter (to be executed)
Search Term	Type
Ardent Capital Partners III LP	Full legal name
Ardent Capital Partners III	Variant
Ardent Capital Partners	Short name
Ardent Capital	Short name
Ardent CP	Abbreviation
Fund III (Ardent)	Short name with qualifier
Ardent	Single-word search
87-3421098	EIN
Ardent Capital GP III LLC	Full legal name
Ardent Capital GP III	Variant
Ardent GP	Short name
86-2198403	EIN
Ardent Capital Management LLC	Full legal name
Ardent Capital Management	Variant
Ardent Management	Short name

ACM LLC	Abbreviation
84-5567312	EIN
Julian Desmond	Individual name
Desmond, Julian	Individual name (reversed)
J. Desmond	Individual name (Abbreviated)
Priya Chandrasekar	Individual name
Chandrasekar, Priya	Individual name (reversed)
P. Chandrasekar	Individual name (Abbreviated)
Chandrasekar	Single-name search
Chandrasekhar	Alternative spelling
Search Term	Type
Marlowe Asset Management Rehabilitation Holdings LLC	Full legal name
Marlowe Asset Management Rehabilitation Holdings	Variant
Marlowe Asset Management Rehabilitation	Short name
Marlowe Asset Management Rehab	Abbreviation
Marlowe Asset Management Rehab Holdings	Variant
VRH LLC	Abbreviation
Clearpath Diagnostics Inc.	Full legal name
Clearpath Diagnostics Inc	Variant (no period)
Clearpath Diagnostics	Short name
Clearpath Dx	Abbreviation
ClearPath	Alternative capitalization
Search Term	Type
Pinnacle Health Systems, Inc.	Full legal name
Pinnacle Health Systems Inc	Variant (no comma/period)

Pinnacle Health Systems	Short name
Pinnacle Health	Short name
Pinnacle	Single-word search
PHS	Abbreviation
PHS Inc	Abbreviation variant
56-4389201	EIN
Marcus Ellsworth	Individual name
Ellsworth, Marcus	Individual name (reversed)
Dr. Marcus Ellsworth	Individual name (with title)
M. Ellsworth	Individual name (Abbreviated)
Sandra Trevino	Individual name
Trevino, Sandra	Individual name (reversed)
S. Trevino	Individual name (Abbreviated)
Search Term	Type
Veltrano Equity Holdings LLC	Full legal name
Veltrano Equity Holdings	Variant
Veltrano Equity	Short name
Veltrano	Single-word search
REH LLC	Abbreviation
75-6012389	EIN
Veltrano Equity Partners Fund V LP	Full legal name
Veltrano Equity Partners Fund V	Variant
Veltrano Fund V	Short name
Veltrano Partners Fund V	Variant
Theodore Hargrove	Individual name

Hargrove, Theodore	Individual name (reversed)
Ted Hargrove	Individual name (informal)
T. Hargrove	Individual name (Abbreviated)
Search Term	Type
Fendowell Thornton LLP	Full legal name
Fendowell Thornton	Short name
Fendowell & Thornton	Variant
Catherine Yardley	Individual name
Kate Yardley	Individual name (informal)
Yardley, Catherine	Individual name (reversed)
C. Yardley	Individual name (Abbreviated)
Greenvale Durneval LLP	Full legal name
Greenvale Durneval	Short name
Greenvale & Durneval	Variant
Jonathan Felder	Individual name
Felder, Jonathan	Individual name (reversed)
J. Felder	Individual name (Abbreviated)
Search Term	Type
Whitfield & Crane LLP	Full legal name
Whitfield and Crane LLP	Variant
Whitfield Crane	Short name
Whitfield & Crane	Variant
David Ostrander	Individual name
Ostrander, David	Individual name (reversed)
D. Ostrander	Individual name (Abbreviated)

Search Term	Type
Meridian Partners LLC	Full legal name
Meridian Partners	Short name
Grant Hollister	Individual name
Hollister, Grant	Individual name (reversed)
G. Hollister	Individual name (Abbreviated)
Crestline Baird & Co.	Full legal name
Crestline Baird & Co	Variant (no period)
Crestline Baird	Short name
Crestline Baird and Co	Variant
Natasha Khoury	Individual name
Khoury, Natasha	Individual name (reversed)
N. Khoury	Individual name (Abbreviated)
Search Term	Type
Provident National Bank, N.A.	Full legal name
Provident National Bank NA	Variant (no periods)
Provident National Bank	Short name
Provident National	Short name
Provident Bank	Short name
PNB	Abbreviation
Paul Ewing	Individual name
Ewing, Paul	Individual name (reversed)
P. Ewing	Individual name (Abbreviated)
Atlas Credit Opportunities Fund LP	Full legal name
Atlas Credit Opportunities Fund	Variant

Atlas Credit Opportunities	Short name
Atlas Credit	Short name
ACOF LP	Abbreviation
Rebecca Solis	Individual name
Solis, Rebecca	Individual name (reversed)
R. Solis	Individual name (Abbreviated)
Search Term	Type
Harland & Marsh CPAs LLP	Full legal name
Harland and Marsh CPAs LLP	Variant
Harland & Marsh	Short name
Harland Marsh	Variant
H&M CPAs	Abbreviation
Timothy Griggs	Individual name
Griggs, Timothy	Individual name (reversed)
T. Griggs	Individual name (Abbreviated)
Tim Griggs	Individual name (informal)
Apex Advisory Group LLC	Full legal name
Apex Advisory Group	Short name
Apex Advisory	Short name
AAG LLC	Abbreviation
Christine Varga	Individual name
Varga, Christine	Individual name (reversed)
C. Varga	Individual name (Abbreviated)

MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
TO: Howard Bellamy, Partner, Antitrust & Competition Practice Group
FROM: Monica Reyes, Associate, Antitrust & Competition Practice Group Elliot Nguyen, Associate, Antitrust & Competition Practice Group
DATE: January 28, 2024
RE: Conflicts Clearance — Proposed Representation of Ardent Capital Partners III LP in Connection with Acquisition of Pinnacle Health Systems, Inc.
PROPOSED MATTER NO.: 1001-00001
This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by the attorneys and personnel of Calderwood & Harkness LLP in evaluating the proposed representation described herein. This memorandum should not be disclosed to any person outside the firm without the prior written approval of the Calderwood & Harkness General Counsel's Office.
I. Purpose
This memorandum documents the results of the conflicts clearance process conducted in connection with the proposed engagement of Calderwood & Harkness LLP ("the Firm" or "Calderwood & Harkness") by Ardent Capital Partners III LP ("Ardent Capital" or the "Client") to serve as antitrust counsel in connection with Ardent Capital's proposed acquisition of one hundred percent (100%) of the outstanding equity of Pinnacle Health Systems, Inc. ("Pinnacle" or "PHS") (the "Transaction"). The conflicts clearance process was undertaken in accordance with Calderwood & Harkness's General Counsel Conflicts Policy (revised September 2023) and the applicable provisions of the New York Rules of Professional Conduct.
The scope of the proposed engagement would encompass the following categories of antitrust advisory work: (a) preparation, review, and filing of Hart-Scott-Rodino ("HSR") premerger notification forms with the Federal Trade Commission ("FTC") and the Antitrust Division of the United States Department of Justice ("DOJ"); (b) preparation and submission of a request for early termination of the statutory thirty-day waiting period under the HSR Act, 15 U.S.C. § 18a; (c) substantive antitrust analysis of the Transaction's competitive implications, including market definition, competitive overlap analysis, and assessment of potential theories of competitive harm; (d) if applicable, response to any request for additional information or documentary material ("Second Request") issued by the reviewing agency; and (e) coordination with antitrust counsel to the target and seller regarding the acquired person's HSR notification filing and related submissions.
It is anticipated that the engagement letter between Ardent Capital Partners III LP and Calderwood & Harkness LLP will be executed on or about January 29, 2024. The Equity Purchase Agreement among Ardent Capital Partners III LP, Veltrano Equity Partners Fund V LP, and Pinnacle Health Systems, Inc. is expected to be executed on or about January 31, 2024, with HSR filings to follow promptly thereafter.
This memorandum identifies all parties to the Transaction and related entities, describes the searches conducted of the Firm's conflicts database, sets forth the results of those searches, analyzes any potential conflicts under the applicable ethical rules, and presents our conclusion and recommendation regarding conflicts clearance.
II. Transaction Summary
The following is a summary of the material terms of the proposed Transaction and the principal parties thereto, based on information provided by the Client, the draft Equity Purchase Agreement (circulated January 24, 2024), and publicly available sources.
Transaction Type: 100% stock purchase (equity acquisition) of Pinnacle Health Systems, Inc. The Transaction is structured as a purchase by Ardent Capital Partners III LP (or a wholly-owned acquisition subsidiary to be formed prior to closing) of all of the issued and outstanding shares of common stock of Pinnacle Health Systems, Inc. from the existing stockholders, including Veltrano Equity Partners Fund V LP (majority holder) and certain management stockholders.
Enterprise Value: Approximately $952 million, inclusive of approximately $418 million in net funded debt assumed or refinanced at closing.
Equity Value: Approximately $534 million, consisting of cash consideration of approximately $505.5 million payable at closing plus management rollover equity of approximately $28.5 million contributed by certain members of Pinnacle's existing management team who are rolling over a portion of their existing equity interests into the post-closing capital structure.
Acquirer / Client
Ardent Capital Partners III LP, a Delaware limited partnership; principal office at 399 Park Avenue, 41st Floor, New York, NY 10022. Ardent Capital Partners III LP is a private equity fund organized to make leveraged buyout and growth equity investments primarily in the healthcare services, financial services, and business services sectors.
General Partner of Acquirer: Ardent Capital GP III LLC, a Delaware limited liability company, serves as the general partner of Ardent Capital Partners III LP and has sole authority to manage the affairs of the fund, including to authorize the execution of the Equity Purchase Agreement and the engagement of legal counsel in connection with the Transaction.
Investment Manager / Fund Sponsor: Ardent Capital Management LLC, a Delaware limited liability company, serves as the investment manager and registered investment adviser (SEC File No. 801-119247) to Ardent Capital Partners III LP and its affiliated funds. Ardent Capital Management LLC is managed by its Co-Founders, Julian Desmond and Priya Chandrasekar, who together serve as Managing Partners and control the day-to-day operations of the firm and its portfolio of managed funds.
Fund Size (Fund III): Ardent Capital Partners III LP reached its final close in November 2021 with aggregate committed capital of approximately $4.8 billion. Fund III is Ardent Capital Management's third institutional fund and its largest to date.
Target / Acquired Person
Pinnacle Health Systems, Inc., a Delaware corporation; principal office at 2200 Lakeshore Boulevard, Suite 500, Charlotte, NC 28202. Pinnacle Health Systems is a diversified ambulatory healthcare services platform. The company's Chief Executive Officer and Chairman of the Board of Directors is Dr. Marcus Ellsworth. The company's Chief Financial Officer is Sandra Trevino.
Target Operations: Pinnacle operates a network of forty-two (42) ambulatory surgical centers ("ASCs") and thirty-one (31) affiliated physician practice management entities across nine states: North Carolina, South Carolina, Virginia, Tennessee, Georgia, Florida, Alabama, Ohio, and Texas. The company employs approximately 4,700 individuals across its platform, including employed and affiliated physicians, nurses, surgical technicians, administrative staff, and corporate personnel. For its fiscal year ended December 31, 2023, Pinnacle reported total revenue of approximately $637.4 million. The company's operations are classified under North American Industry Classification System ("NAICS") codes 621111 (Offices of Physicians — except Mental Health Specialists) and 621493 (Freestanding Ambulatory Surgical and Emergency Centers).
Selling Sponsor.  Veltrano Equity Holdings LLC, a Delaware limited liability company, through its affiliated fund Veltrano Equity Partners Fund V LP; principal office at 1400 Elm Street, Suite 3200, Dallas, TX 75201. The Managing Member and Senior Partner of Veltrano Equity Holdings LLC is Theodore "Ted" Hargrove. Veltrano acquired Pinnacle Health Systems in 2017 at an enterprise value of approximately $340 million and has overseen a period of significant growth through a combination of organic expansion and tuck-in acquisitions.
Rollover Participant.  Dr. Marcus Ellsworth, CEO and Chairman of Pinnacle, is expected to roll over approximately $28.5 million of his existing equity in Pinnacle into the post-closing capital structure, representing approximately 3.0% of post-closing equity. Dr. Ellsworth will continue to serve as CEO following the closing of the Transaction.
III. Parties Searched in Conflicts System
Search Methodology.  In accordance with Calderwood & Harkness's General Counsel Conflicts Policy, we conducted a comprehensive conflicts search using the Firm's New Matter Intake / Conflicts System ("NMICS"). NMICS is the Firm's centralized conflicts database covering all current and former client representations, adverse parties, related entities, and key individuals across all offices and practice groups of Calderwood & Harkness LLP. The database is updated on a continuous basis as new matters are opened, existing matters are modified, and matters are closed.
Searches were conducted using full-text search functionality, including exact name matches, partial name matches, wildcard searches, and phonetic similarity matching. Each entity and individual was searched using all known full legal names, short names, trade names, and common abbreviations. Employer Identification Numbers ("EINs") were used as supplemental search criteria where available. The searches were conducted over the period of January 26–28, 2024. The complete list of all search terms entered into NMICS is set forth in the Appendix to this memorandum.
The following is a comprehensive listing of all parties and individuals searched in the conflicts system, organized by role in the Transaction:
A. Acquiring Person and Related Entities
1.  Ardent Capital Partners III LP (and short names: Ardent Capital, Ardent CP, Fund III) — EIN 87-3421098
2.  Ardent Capital GP III LLC — EIN 86-2198403
3.  Ardent Capital Management LLC — EIN 84-5567312
4.  Julian Desmond, Co-Founder & Managing Partner, Ardent Capital Management LLC
5.  Priya Chandrasekar, Co-Founder & Managing Partner, Ardent Capital Management LLC
B. Acquirer's Portfolio Companies in Healthcare Sector
Given that the proposed engagement involves antitrust advisory services in connection with a healthcare acquisition, we identified and searched Ardent Capital's existing portfolio companies operating in the healthcare sector to assess whether any competitive overlap or related-party issue might arise:
1.  Marlowe Asset Management Rehabilitation Holdings LLC — outpatient physical therapy and rehabilitation clinics; headquartered at 8950 Westheimer Road, Suite 600, Houston, TX 77063; operates seventy-four (74) locations across Texas, Florida, and Georgia
2.  Clearpath Diagnostics Inc. — independent clinical laboratory services; headquartered at 1700 Market Street, Suite 3400, Philadelphia, PA 19103; operations in Pennsylvania, New Jersey, and New York; annual revenue of approximately $218 million
C. Target and Related Entities
1.  Pinnacle Health Systems, Inc. (and short names: Pinnacle, PHS) — EIN 56-4389201
2.  Dr. Marcus Ellsworth, CEO & Chairman, Pinnacle Health Systems, Inc.
3.  Sandra Trevino, CFO, Pinnacle Health Systems, Inc.
D. Selling Sponsor and Related Entities
1.  Veltrano Equity Holdings LLC — EIN 75-6012389
2.  Veltrano Equity Partners Fund V LP
3.  Theodore "Ted" Hargrove, Managing Member / Senior Partner, Veltrano Equity Holdings LLC
E. Counterparty Counsel
1.  Fendowell Thornton LLP (Transaction Counsel to Target / Seller) — 227 West Trade Street, Suite 2800, Charlotte, NC 28202; Lead Partner: Catherine "Kate" Yardley
2.  Greenvale Durneval LLP (Antitrust Counsel to Target / Seller) — 1800 M Street NW, Suite 1100, Washington, DC 20036; Lead Partner: Jonathan Felder
F. Transaction Counsel to Acquirer
1.  Whitfield & Crane LLP — 51 West 52nd Street, New York, NY 10019; Lead Partner: David Ostrander (Corporate / M&A). Whitfield & Crane is serving as lead transaction counsel to Ardent Capital on the corporate aspects of the acquisition, including negotiation and execution of the Equity Purchase Agreement.
G. Financial Advisors
1.  Meridian Partners LLC (Buy-side Financial Advisor to Ardent Capital) — 280 Park Avenue, 18th Floor, New York, NY 10017; Managing Director: Grant Hollister
2.  Crestline Baird & Co. (Sell-side Financial Advisor to Veltrano / Pinnacle) — 300 South Tryon Street, Suite 2500, Charlotte, NC 28202; Managing Director: Natasha Khoury
H. Lenders and Financing Sources
1.  Provident National Bank, N.A. (Lead Arranger / Administrative Agent) — 1500 JFK Boulevard, Philadelphia, PA 19102; Relationship Manager: Paul Ewing; commitment of $410 million Senior Secured First Lien Term Loan B and $55 million Revolving Credit Facility
2.  Atlas Credit Opportunities Fund LP (Mezzanine / Second Lien Lender) — 200 Clarendon Street, 47th Floor, Boston, MA 02116; Managing Director: Rebecca Solis; commitment of $95 million Second Lien Term Loan
I. Other Service Providers
1.  Harland & Marsh CPAs LLP (Independent Auditor to Pinnacle Health Systems, Inc.) — 100 South Elm Street, Suite 400, Greensboro, NC 27401; Engagement Partner: Timothy Griggs
2.  Apex Advisory Group LLC (Quality of Earnings Provider, engaged by Ardent Capital) — One Liberty Plaza, 165 Broadway, New York, NY 10006; Managing Director: Christine Varga
J. Regulatory Bodies
The following governmental entities are identified for informational purposes and completeness. As governmental agencies, they are not subject to traditional conflicts analysis, but are noted here consistent with Firm policy:
•  Federal Trade Commission, Bureau of Competition, Premerger Notification Office
•  United States Department of Justice, Antitrust Division
IV. Search Results and Analysis
Set forth below are the results of the conflicts searches conducted in NMICS for each party and individual identified in Section III above, together with our analysis of any results returned and our conclusions regarding the existence or absence of any conflict of interest.
A. Ardent Capital Partners III LP and Affiliates
Search Result: No current or prior representations of Ardent Capital Partners III LP, Ardent Capital GP III LLC, or Ardent Capital Management LLC were identified in the Firm's conflicts system. Calderwood & Harkness has not previously represented any Ardent Capital fund, general partner entity, management company, or any other affiliated entity of the Ardent Capital platform in any capacity. No prior adverse representations against any Ardent Capital entity were identified in any matter currently or formerly pending in the Firm's records.
The individual names of Julian Desmond and Priya Chandrasekar were also searched. Neither individual appears as an individual client, adverse party, witness, or other interested person in any existing or former matter in the Firm's records.
Analysis: Because Calderwood & Harkness has no prior or current relationship with any Ardent Capital entity or its principals, no conflict of interest arises under Rule 1.7 (current clients) or Rule 1.9 (former clients) of the New York Rules of Professional Conduct. The proposed representation of Ardent Capital Partners III LP is a new client relationship.
Conclusion: No conflict.
B. Marlowe Asset Management Rehabilitation Holdings LLC
Search Result: No current or prior representation of Marlowe Asset Management Rehabilitation Holdings LLC was identified in the Firm's conflicts system. No adverse matters involving Marlowe Asset Management Rehabilitation Holdings LLC, its subsidiaries, or any affiliated entity were identified. No individual associated with Marlowe Asset Management Rehabilitation appeared in the Firm's records.
Analysis: Marlowe Asset Management Rehabilitation is a portfolio company of Ardent Capital operating in the healthcare sector (outpatient physical therapy). Although Marlowe Asset Management Rehabilitation operates in a different sub-segment of healthcare services than Pinnacle (physical therapy clinics versus ambulatory surgical centers), it was searched as a precaution given the common ownership and potential for competitive overlap analysis in the antitrust review. No conflict exists.
Conclusion: No conflict.
C. Clearpath Diagnostics Inc.
Search Result: No current or prior representation of Clearpath Diagnostics Inc. was identified in the Firm's conflicts system. No adverse matters involving Clearpath Diagnostics or any affiliated entity were identified. No individual associated with Clearpath Diagnostics appeared in the Firm's records.
Analysis: Clearpath Diagnostics is a portfolio company of Ardent Capital operating in the healthcare sector (independent clinical laboratory services). Like Marlowe Asset Management Rehabilitation, it was searched as a precaution due to common ownership and potential relevance in the antitrust analysis. The absence of any current or prior relationship eliminates any potential conflict.
Conclusion: No conflict.
D. Pinnacle Health Systems, Inc. and Related Individuals
Search Result: No current or prior representation of Pinnacle Health Systems, Inc. was identified in the Firm's conflicts system. No current representation of Dr. Marcus Ellsworth or Sandra Trevino in any capacity — whether as individual clients, corporate officers, witnesses, or adverse parties — was identified.
Analysis: Pinnacle Health Systems, Inc. is the target of the proposed acquisition and will be the "acquired person" for purposes of the HSR filing. Pinnacle is not Calderwood & Harkness's client in this engagement; our client is the acquirer, Ardent Capital Partners III LP. The Transaction is a negotiated acquisition in which the buyer and the seller have agreed upon the terms of sale, and both parties share a common interest in obtaining HSR clearance and completing the Transaction. No adversity to Pinnacle Health Systems is anticipated in connection with our HSR filing and antitrust advisory scope. To the extent any issue were to arise with respect to the FTC or DOJ's review of the Transaction, our role would be limited to representing the acquirer's interests in demonstrating the pro-competitive or competitively neutral effects of the Transaction, which is aligned with — not adverse to — Pinnacle's interests.
Because Calderwood & Harkness has never represented Pinnacle, no former-client conflict exists under Rule 1.9. Because Pinnacle is not a current client of the Firm, no current-client conflict exists under Rule 1.7.
Conclusion: No conflict.
E. Veltrano Equity Holdings LLC and Veltrano Equity Partners Fund V LP
Search Result: No current or prior representation of Veltrano Equity Holdings LLC or Veltrano Equity Partners Fund V LP was identified in the Firm's conflicts system. No adverse matters involving Veltrano Equity Holdings LLC, Veltrano Equity Partners Fund V LP, or Theodore "Ted" Hargrove were identified in any existing or former matter.
Analysis: Veltrano is the selling sponsor in the Transaction. Although the seller is technically a counterparty to the buyer in the Equity Purchase Agreement, our engagement as antitrust counsel is limited in scope to HSR filing and antitrust advisory services. Our antitrust advisory role does not place Calderwood & Harkness in an adverse position to Veltrano. To the contrary, Veltrano's interests as the selling sponsor are directly aligned with those of Ardent Capital in obtaining HSR clearance and consummating the Transaction. Both buyer and seller share the mutual objective of completing the Transaction and clearing any regulatory hurdles. Additionally, because Calderwood & Harkness has never represented Veltrano in any matter, no former-client conflict arises under Rule 1.9.
Conclusion: No conflict.
F. Fendowell Thornton LLP
Search Result: A search for Fendowell Thornton LLP returned no current matters in which Calderwood & Harkness and Fendowell Thornton LLP represent adverse parties. No prior co-counsel or opposing counsel relationships were identified that would create a disqualifying conflict or any appearance of impropriety. Calderwood & Harkness has appeared opposite Fendowell Thornton in certain prior matters (general commercial litigation matters in the Southern District of New York in 2019 and 2021), but those matters are now closed and involved entirely different clients and subject matter. No continuing duty or obligation arising from those matters would affect the proposed engagement.
Analysis: Fendowell Thornton serves as sell-side transaction counsel to Pinnacle and Veltrano in connection with the Equity Purchase Agreement and related transaction documents. Our role as antitrust counsel to the acquirer is distinct from and not directly adverse to Fendowell Thornton's representation of the seller. No current matter conflict exists. The prior instances of appearing on opposite sides of litigation matters are not disqualifying, as they involved unrelated clients, unrelated subject matter, and no confidential information was shared between the firms in those matters.
Conclusion: No conflict.
G. Greenvale Durneval LLP
Search Result: No current matters in which Calderwood & Harkness and Greenvale Durneval LLP represent adverse parties were identified. No prior co-counsel or opposing counsel relationships of any kind were identified in the Firm's records.
Analysis: Greenvale Durneval serves as antitrust counsel to the target and seller in connection with the Transaction. Greenvale Durneval will be responsible for preparing and filing the acquired person's HSR notification form and will coordinate with our team regarding timing of filing, substantive antitrust issues, and any agency inquiries or requests for additional information. Both firms' clients share a common interest in obtaining HSR clearance for the Transaction. Accordingly, no adversity is anticipated between Calderwood & Harkness and Greenvale Durneval in this engagement. In practice, antitrust counsel on opposite sides of a negotiated acquisition routinely cooperate in the HSR filing process and share a mutual objective of obtaining clearance.
Conclusion: No conflict.
H. Whitfield & Crane LLP
Search Result: Whitfield & Crane LLP was identified in the Firm's conflicts system as serving as transaction counsel to Ardent Capital Partners III LP (our proposed client) on this acquisition. The lead partner at Whitfield & Crane is David Ostrander (Corporate / M&A). Calderwood & Harkness and Whitfield & Crane are serving as co-counsel representing the same client on different aspects of the same transaction — Whitfield & Crane on the corporate and transactional aspects, and Calderwood & Harkness on the antitrust and regulatory aspects. No adverse relationship exists between the two firms in this context.
Analysis: A co-counsel relationship in which two law firms jointly represent the same client on the same matter, or represent the same client on different aspects of the same transaction, does not create a conflict of interest. The interests of Calderwood & Harkness and Whitfield & Crane are aligned, and both firms owe duties of loyalty and confidentiality to the same client, Ardent Capital Partners III LP.
Conclusion: No conflict.
I. Meridian Partners LLC
Search Result: No current or prior representation of Meridian Partners LLC was identified in the Firm's conflicts system. No adverse matters involving Meridian Partners LLC or Grant Hollister were identified.
Analysis: Meridian Partners is serving as the buy-side financial advisor to Ardent Capital in connection with the Transaction. As an advisor to our client, Meridian Partners' interests are aligned with those of Ardent Capital and Calderwood & Harkness. No conflict arises from this relationship.
Conclusion: No conflict.
J. Crestline Baird & Co.
Search Result: No current or prior representation of Crestline Baird & Co. was identified in the Firm's conflicts system. No adverse matters involving Crestline Baird & Co. or Natasha Khoury were identified.
Analysis: Crestline Baird is serving as the sell-side financial advisor to Veltrano and Pinnacle in connection with the Transaction. Although Crestline Baird represents the seller's interests, the sell-side financial advisor's interests are aligned with all parties in obtaining HSR clearance and consummating the Transaction. No conflict arises from the involvement of Crestline Baird in the Transaction.
Conclusion: No conflict.
K. Provident National Bank, N.A.
Search Result: A search for Provident National Bank, N.A. returned several entries in the Firm's conflicts system. Calderwood & Harkness currently represents a number of clients in matters involving Provident National Bank, including certain commercial lending transactions and securitization matters in which Provident National Bank serves as a lender or trustee. However, in none of these matters does Calderwood & Harkness represent Provident National Bank itself as a client. Furthermore, none of the existing matters involves any subject matter related to the proposed Transaction, and in no existing matter is Calderwood & Harkness adverse to Provident National Bank in a manner that would be affected by the proposed representation of Ardent Capital.
Analysis: Provident National Bank is the lead arranger and administrative agent for the acquisition debt financing in this Transaction. Provident's commitment includes a $410 million Senior Secured First Lien Term Loan B and a $55 million Revolving Credit Facility. Provident's interests as a lender are aligned with the successful closing of the Transaction. Calderwood & Harkness's role as antitrust counsel to the acquirer does not create any adversity to Provident National Bank. Because Calderwood & Harkness does not currently represent Provident National Bank as a client in any matter, no current-client conflict arises under Rule 1.7. No former-client conflict exists under Rule 1.9.
Conclusion: No conflict.
L. Atlas Credit Opportunities Fund LP
Search Result: No current or prior representation of Atlas Credit Opportunities Fund LP was identified in the Firm's conflicts system. No adverse matters involving Atlas Credit Opportunities Fund LP or Rebecca Solis were identified.
Analysis: Atlas Credit Opportunities Fund LP is providing a $95 million Second Lien Term Loan as part of the acquisition financing. As a mezzanine lender, Atlas Credit's interests are aligned with the successful closing of the Transaction. No conflict arises.
Conclusion: No conflict.
M. Harland & Marsh CPAs LLP
Search Result: No current or prior representation of Harland & Marsh CPAs LLP was identified in the Firm's conflicts system. No adverse matters involving Harland & Marsh or Timothy Griggs were identified.
Analysis: Harland & Marsh serves as the independent auditor to Pinnacle Health Systems, Inc. Harland & Marsh's role is limited to providing audit and accounting services to the target company. No adversity between Calderwood & Harkness and Harland & Marsh is anticipated in connection with the proposed engagement.
Conclusion: No conflict.
N. Apex Advisory Group LLC
Search Result: No current or prior representation of Apex Advisory Group LLC was identified in the Firm's conflicts system. No adverse matters involving Apex Advisory Group LLC or Christine Varga were identified.
Analysis: Apex Advisory Group LLC has been engaged by Ardent Capital to prepare the buy-side quality of earnings report in connection with the Transaction. Apex Advisory is a service provider to our client and its interests are aligned with those of Ardent Capital. No conflict arises from this relationship.
Conclusion: No conflict.
V. Ethical Rules Considered
In conducting the conflicts analysis set forth in Section IV above, we considered the following provisions of the New York Rules of Professional Conduct, which govern the professional responsibilities of attorneys admitted to practice in the State of New York and apply to Calderwood & Harkness LLP and its attorneys:
Rule 1.7 — Conflict of Interest: Current Clients. Rule 1.7(a) provides that, except as otherwise permitted by the Rule, a lawyer shall not represent a client if a reasonable lawyer would conclude that (1) the representation will involve the lawyer in representing differing interests, or (2) there is a significant risk that the lawyer's professional judgment on behalf of a client will be adversely affected by the lawyer's own financial, business, property, or other personal interests. We have confirmed that no current-client conflict exists under Rule 1.7(a). Calderwood & Harkness does not currently represent any party to the Transaction (other than the proposed client, Ardent Capital) that has interests adverse to Ardent Capital. There is no significant risk that the proposed representation of Ardent Capital will be materially limited by Calderwood & Harkness's responsibilities to any other current client.
Rule 1.9 — Duties to Former Clients. Rule 1.9(a) provides that a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed consent, confirmed in writing. We have confirmed that Calderwood & Harkness has not formerly represented any party identified in Section III in a matter that is the same as or substantially related to the proposed representation of Ardent Capital. No former-client conflict exists under Rule 1.9.
Rule 1.10 — Imputation of Conflicts of Interest. Rule 1.10(a) provides that while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9. Because no individual attorney within Calderwood & Harkness has been identified as having a personal conflict that would be subject to imputation under Rule 1.10, no imputed conflict exists.
We have also considered the Firm's internal policies regarding lateral attorney screening and side-letter conflicts waivers. No lateral attorney currently employed by Calderwood & Harkness is subject to any screening obligation or side-letter restriction that would affect the proposed representation.
VI. Conclusion and Clearance
Based on the comprehensive conflicts search and analysis set forth in this memorandum, no conflicts of interest have been identified that would preclude Calderwood & Harkness LLP from undertaking the proposed representation of Ardent Capital Partners III LP in connection with the HSR filing and antitrust advisory services relating to the acquisition of Pinnacle Health Systems, Inc.
All parties to the Transaction, their respective counsel, financial advisors, lenders, and other service providers have been searched in the Firm's New Matter Intake / Conflicts System. None of the search results identified any current-client conflict under Rule 1.7, any former-client conflict under Rule 1.9, or any imputed conflict under Rule 1.10 of the New York Rules of Professional Conduct. The Firm is free and clear to proceed with the proposed engagement.
The matter is hereby cleared for opening under the following designations:
The engagement letter may proceed for execution on or about January 29, 2024, consistent with the terms discussed between Howard Bellamy and Julian Desmond on January 23, 2024.
Should any new parties, entities, or individuals become involved in the Transaction after the date of this memorandum, a supplemental conflicts search should be conducted and the results documented before any work is undertaken on behalf of or in connection with such additional parties.
VII. Approval
By signing below, the undersigned confirm that the conflicts clearance process documented in this memorandum has been completed in accordance with Calderwood & Harkness's General Counsel Conflicts Policy and the applicable New York Rules of Professional Conduct, and that the proposed representation of Ardent Capital Partners III LP in Matter No. 1001-00001 is approved for opening.
RESPONSIBLE PARTNER APPROVAL:
CALDERWOOD & HARKNESS LLP Antitrust & Competition Practice Group
By: ________
Name: Howard Bellamy
Title: Partner, Antitrust & Competition Practice Group
Date: ________
GENERAL COUNSEL'S OFFICE APPROVAL:
CALDERWOOD & HARKNESS LLP Office of the General Counsel
By: ________
Name: ________
Title: Deputy General Counsel / Conflicts Counsel
Date: ________
Date of Approval: January 28, 2024
VIII. Appendix — Conflicts Search Terms
The following is a comprehensive listing of all search terms entered into the Firm's New Matter Intake / Conflicts System (NMICS) during the conflicts clearance process documented in this memorandum. Searches were conducted on January 26–28, 2024. Each entity was searched using all known full legal names, short names, trade names, common abbreviations, and alternative spellings. Employer Identification Numbers (EINs) were used as supplemental search criteria where available.
A. Acquiring Person and Related Entities
B. Acquirer's Portfolio Companies in Healthcare Sector
C. Target and Related Entities
D. Selling Sponsor and Related Entities
E. Counterparty Counsel
F. Transaction Counsel to Acquirer
G. Financial Advisors
H. Lenders and Financing Sources
I. Other Service Providers
END OF MEMORANDUM
Prepared by Monica Reyes and Elliot Nguyen, Antitrust & Competition Practice Group, Calderwood & Harkness LLP. All searches conducted January 26–28, 2024. This memorandum and the conflicts analysis contained herein are subject to the attorney-client privilege and the work product doctrine. Do not distribute outside of Calderwood & Harkness LLP without prior authorization from the Office of the General Counsel.
Field | Detail
Proposed Matter No. | 1001-00001
Client Name | Ardent Capital Partners III LP
Matter Description | HSR Filing and Antitrust Advisory — Acquisition of Pinnacle Health Systems, Inc.
Responsible Partner / Billing Partner | Howard Bellamy, Partner, Antitrust & Competition Practice Group
Lead Associate | Monica Reyes, Associate, Antitrust & Competition Practice Group
Working Associate | Elliot Nguyen, Associate, Antitrust & Competition Practice Group
Anticipated Engagement Date | January 29, 2024
Billing Rate Structure | Per engagement letter (to be executed)
Search Term | Type
Ardent Capital Partners III LP | Full legal name
Ardent Capital Partners III | Variant
Ardent Capital Partners | Short name
Ardent Capital | Short name
Ardent CP | Abbreviation
Fund III (Ardent) | Short name with qualifier
Ardent | Single-word search
87-3421098 | EIN
Ardent Capital GP III LLC | Full legal name
Ardent Capital GP III | Variant
Ardent GP | Short name
86-2198403 | EIN
Ardent Capital Management LLC | Full legal name
Ardent Capital Management | Variant
Ardent Management | Short name
ACM LLC | Abbreviation
84-5567312 | EIN
Julian Desmond | Individual name
Desmond, Julian | Individual name (reversed)
J. Desmond | Individual name (Abbreviated)
Priya Chandrasekar | Individual name
Chandrasekar, Priya | Individual name (reversed)
P. Chandrasekar | Individual name (Abbreviated)
Chandrasekar | Single-name search
Chandrasekhar | Alternative spelling
Search Term | Type
Marlowe Asset Management Rehabilitation Holdings LLC | Full legal name
Marlowe Asset Management Rehabilitation Holdings | Variant
Marlowe Asset Management Rehabilitation | Short name
Marlowe Asset Management Rehab | Abbreviation
Marlowe Asset Management Rehab Holdings | Variant
VRH LLC | Abbreviation
Clearpath Diagnostics Inc. | Full legal name
Clearpath Diagnostics Inc | Variant (no period)
Clearpath Diagnostics | Short name
Clearpath Dx | Abbreviation
ClearPath | Alternative capitalization
Search Term | Type
Pinnacle Health Systems, Inc. | Full legal name
Pinnacle Health Systems Inc | Variant (no comma/period)
Pinnacle Health Systems | Short name
Pinnacle Health | Short name
Pinnacle | Single-word search
PHS | Abbreviation
PHS Inc | Abbreviation variant
56-4389201 | EIN
Marcus Ellsworth | Individual name
Ellsworth, Marcus | Individual name (reversed)
Dr. Marcus Ellsworth | Individual name (with title)
M. Ellsworth | Individual name (Abbreviated)
Sandra Trevino | Individual name
Trevino, Sandra | Individual name (reversed)
S. Trevino | Individual name (Abbreviated)
Search Term | Type
Veltrano Equity Holdings LLC | Full legal name
Veltrano Equity Holdings | Variant
Veltrano Equity | Short name
Veltrano | Single-word search
REH LLC | Abbreviation
75-6012389 | EIN
Veltrano Equity Partners Fund V LP | Full legal name
Veltrano Equity Partners Fund V | Variant
Veltrano Fund V | Short name
Veltrano Partners Fund V | Variant
Theodore Hargrove | Individual name
Hargrove, Theodore | Individual name (reversed)
Ted Hargrove | Individual name (informal)
T. Hargrove | Individual name (Abbreviated)
Search Term | Type
Fendowell Thornton LLP | Full legal name
Fendowell Thornton | Short name
Fendowell & Thornton | Variant
Catherine Yardley | Individual name
Kate Yardley | Individual name (informal)
Yardley, Catherine | Individual name (reversed)
C. Yardley | Individual name (Abbreviated)
Greenvale Durneval LLP | Full legal name
Greenvale Durneval | Short name
Greenvale & Durneval | Variant
Jonathan Felder | Individual name
Felder, Jonathan | Individual name (reversed)
J. Felder | Individual name (Abbreviated)
Search Term | Type
Whitfield & Crane LLP | Full legal name
Whitfield and Crane LLP | Variant
Whitfield Crane | Short name
Whitfield & Crane | Variant
David Ostrander | Individual name
Ostrander, David | Individual name (reversed)
D. Ostrander | Individual name (Abbreviated)
Search Term | Type
Meridian Partners LLC | Full legal name
Meridian Partners | Short name
Grant Hollister | Individual name
Hollister, Grant | Individual name (reversed)
G. Hollister | Individual name (Abbreviated)
Crestline Baird & Co. | Full legal name
Crestline Baird & Co | Variant (no period)
Crestline Baird | Short name
Crestline Baird and Co | Variant
Natasha Khoury | Individual name
Khoury, Natasha | Individual name (reversed)
N. Khoury | Individual name (Abbreviated)
Search Term | Type
Provident National Bank, N.A. | Full legal name
Provident National Bank NA | Variant (no periods)
Provident National Bank | Short name
Provident National | Short name
Provident Bank | Short name
PNB | Abbreviation
Paul Ewing | Individual name
Ewing, Paul | Individual name (reversed)
P. Ewing | Individual name (Abbreviated)
Atlas Credit Opportunities Fund LP | Full legal name
Atlas Credit Opportunities Fund | Variant
Atlas Credit Opportunities | Short name
Atlas Credit | Short name
ACOF LP | Abbreviation
Rebecca Solis | Individual name
Solis, Rebecca | Individual name (reversed)
R. Solis | Individual name (Abbreviated)
Search Term | Type
Harland & Marsh CPAs LLP | Full legal name
Harland and Marsh CPAs LLP | Variant
Harland & Marsh | Short name
Harland Marsh | Variant
H&M CPAs | Abbreviation
Timothy Griggs | Individual name
Griggs, Timothy | Individual name (reversed)
T. Griggs | Individual name (Abbreviated)
Tim Griggs | Individual name (informal)
Apex Advisory Group LLC | Full legal name
Apex Advisory Group | Short name
Apex Advisory | Short name
AAG LLC | Abbreviation
Christine Varga | Individual name
Varga, Christine | Individual name (reversed)
C. Varga | Individual name (Abbreviated)

MEMORANDUM

PROPOSED MATTER NO.: 1001-00001

RESPONSIBLE PARTNER APPROVAL:

GENERAL COUNSEL'S OFFICE APPROVAL:

END OF MEMORANDUM

Record

Parties

Dates

Amounts