1001-00001 · Ardent Capital Partners · Engagement & Administration

engagement-letter-ardent-capital.docx DOCUMENT Antitrust

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CALDERWOOD & HARKNESS LLP Attorneys at Law

600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com

January 29, 2024

Ardent Capital Partners III LP c/o Ardent Capital Management LLC 399 Park Avenue, 41st Floor New York, New York 10022

Attention: Julian Desmond, Co-Founder & Managing Partner

Priya Chandrasekar, Co-Founder & Managing Partner

Re: Engagement of Calderwood & Harkness LLP — Antitrust and Hart-Scott-Rodino Advisory Services in Connection with the Acquisition of Pinnacle Health Systems, Inc.

Matter No.: 1001-00001

Dear Mr. Desmond and Ms. Chandrasekar:

1. Introduction and Engagement Overview

We are pleased to confirm that Calderwood & Harkness LLP ("the Firm," "Calderwood & Harkness," "we," or "us") has been engaged by Ardent Capital Partners III LP ("Ardent Capital," "Fund III," or "you"), a Delaware limited partnership, to provide antitrust and competition law advisory services in connection with Ardent Capital's proposed acquisition of one hundred percent (100%) of the outstanding equity interests of Pinnacle Health Systems, Inc. ("Pinnacle" or "PHS"), a Delaware corporation headquartered in Charlotte, North Carolina. Pinnacle is a specialty healthcare services platform that owns and operates a network of ambulatory surgical centers ("ASCs") and physician practice management entities across nine states. Pinnacle's operations span a broad geographic footprint, with significant concentrations in the southeastern United States, and the company has established itself as a meaningful participant in the delivery of outpatient surgical and practice management services.

We understand that the proposed transaction is structured as a stock purchase pursuant to which Ardent Capital, through one or more acquisition vehicles, will acquire all of the outstanding shares of common stock and preferred stock of Pinnacle from the current holders thereof, including Veltrano Equity Holdings LLC, certain management stockholders, and other minority equity participants. The enterprise value of Pinnacle for purposes of the proposed transaction is approximately Nine Hundred Fifty-Two Million Dollars ($952,000,000). An Equity Purchase Agreement (the "EPA") reflecting the definitive terms of the proposed acquisition is expected to be executed by the parties on or about January 31, 2024.

We understand that Whitfield & Crane LLP, led by David Ostrander as Lead Partner, is serving as lead transaction counsel to Ardent Capital in connection with the proposed acquisition. Calderwood & Harkness's engagement is limited to the antitrust and Hart-Scott-Rodino ("HSR") workstream as more fully described in Section 2 below. We look forward to coordinating closely with Mr. Ostrander and his team to ensure that the antitrust workstream proceeds in alignment with the overall transaction timeline and closing conditions.

For the avoidance of doubt, we acknowledge that Ardent Capital Management LLC, a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940, serves as the registered investment adviser and manager of Fund III, and that Ardent Capital GP III LLC, a Delaware limited liability company, serves as the general partner of Fund III. The relationships among these entities are relevant to the HSR filing analysis, including the determination of the "Ultimate Parent Entity" for purposes of the premerger notification, and will be addressed as part of our engagement.

This engagement letter sets forth the terms and conditions of our representation, including the scope of the engagement, the engagement team, our fee arrangements, and other matters relevant to the attorney-client relationship. We ask that you review this letter carefully and confirm your agreement to its terms by executing and returning a countersigned copy as provided in Section 12 below.

2. Scope of Engagement

The Firm's engagement encompasses the following services in connection with the proposed acquisition of Pinnacle:

2.1 HSR Premerger Notification Filing

The Firm will prepare and file the Hart-Scott-Rodino Act premerger notification form (the "HSR Form") on behalf of the acquiring person — Ardent Capital Partners III LP — with both the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "DOJ"). For purposes of the HSR filing, Ardent Capital Management LLC will be identified as the Ultimate Parent Entity ("UPE") of the acquiring person, consistent with the Firm's analysis of the applicable beneficial ownership and control relationships among Fund III, its general partner, and its investment manager.

As part of the HSR filing process, the Firm will conduct a thorough analysis of the applicable jurisdictional thresholds under the HSR Act and the implementing regulations promulgated by the FTC, as revised for calendar year 2024. Specifically, the Firm will analyze the size-of-transaction threshold, which for 2024 is set at $111.4 million. Given that the enterprise value of the proposed transaction is approximately $952 million, the size-of-transaction threshold is clearly exceeded. The Firm will also conduct the size-of-person analysis for both the acquiring person and the acquired person to determine whether the higher filing thresholds are applicable and to confirm the correct filing fee tier.

With respect to filing fees, the Firm has determined on a preliminary basis that the transaction value of approximately $952 million falls within the $500 million to $999.9 million tier under the 2024 FTC fee schedule, resulting in an applicable filing fee of $280,000. The Firm will confirm this determination upon finalization of the transaction value and prior to submission of the HSR Form.

The Firm will coordinate with Pinnacle's antitrust counsel, Greenvale Durneval LLP, led by Jonathan Felder as Lead Partner, to facilitate the simultaneous filing of the acquired person notification form. Timely coordination with target-side counsel is critical to avoid delays in the commencement of the statutory waiting period, and the Firm will work diligently to ensure that both filings are submitted on the same business day.

A central component of the HSR filing preparation will be the identification, collection, and production of documents responsive to Item 4(c) and Item 4(d) of the HSR Form. Item 4(c) requires the production of documents prepared by or for officers or directors of the filing person that analyze the transaction with respect to markets, market shares, competition, competitors, potential for sales growth, or expansion into new product or geographic markets. Item 4(d) requires the production of certain studies, surveys, analyses, and reports that analyze market shares, competition, competitors, or markets for any product or service of the filing person that also relates to products or services of the other party to the transaction. The Firm will work with Ardent Capital's deal team and investment professionals to identify all potentially responsive documents, will conduct a thorough privilege review of such documents, and will prepare appropriate redactions and privilege logs as necessary to protect attorney-client privileged and work product materials from disclosure.

2.2 Early Termination Request

The Firm will prepare and submit, on behalf of Ardent Capital, a request for early termination of the initial thirty (30) day statutory waiting period under the HSR Act, 15 U.S.C. § 18a(b)(1). Early termination, if granted by both the FTC and the DOJ, would allow the parties to consummate the transaction prior to the expiration of the full thirty-day waiting period, thereby potentially accelerating the closing timeline.

In support of the early termination request, the Firm will prepare a voluntary submission, commonly referred to as a "white paper," for submission to FTC staff in the Premerger Notification Office and the relevant Bureau of Competition division. The white paper will present a detailed substantive competitive analysis of the proposed transaction, including a discussion of the relevant product and geographic markets, the competitive landscape, the absence of meaningful competitive overlaps, and the procompetitive efficiencies anticipated to result from the transaction. The purpose of the white paper is to provide the reviewing agency with sufficient information to conclude that the transaction does not raise competitive concerns warranting further investigation, thereby supporting the grant of early termination or, at minimum, facilitating the smooth expiration of the statutory waiting period without the issuance of a Second Request.

2.3 Substantive Antitrust Analysis

The Firm will conduct a comprehensive substantive antitrust analysis of the proposed transaction, addressing the following areas:

Relevant Product Markets. The Firm will analyze the relevant product markets implicated by the proposed transaction. Based on our preliminary understanding of Pinnacle's operations, the primary relevant product markets are expected to include (i) ambulatory surgical center services, encompassing outpatient surgical procedures performed in freestanding ASC facilities, and (ii) physician practice management services, encompassing the management, administrative support, and operational services provided to physician practices under management services agreements or similar arrangements. The Firm will evaluate the appropriate product market definitions in light of applicable case law, FTC and DOJ enforcement actions in the healthcare sector, and the 2023 Merger Guidelines.

Relevant Geographic Markets. The Firm will conduct a Metropolitan Statistical Area ("MSA")-level geographic market analysis across Pinnacle's nine-state operational footprint, which includes facilities and operations in North Carolina, South Carolina, Virginia, Tennessee, Georgia, Florida, Alabama, Ohio, and Texas. The geographic market analysis will assess the competitive conditions in each MSA in which Pinnacle operates one or more ASCs or manages physician practices, taking into account patient travel patterns, payor contracting dynamics, and referral source characteristics.

Horizontal Overlap Analysis. The Firm will analyze potential horizontal competitive overlaps between Pinnacle and Ardent Capital's existing healthcare portfolio companies, specifically: (i) Marlowe Asset Management Rehabilitation Holdings LLC ("Marlowe Asset Management"), which operates outpatient physical therapy clinics in Texas, Florida, and Georgia; and (ii) Clearpath Diagnostics Inc. ("Clearpath"), which provides clinical laboratory services in Pennsylvania, New Jersey, and New York. Although the services provided by Marlowe Asset Management (outpatient physical therapy) and Clearpath (clinical laboratory services) are distinct from the services provided by Pinnacle (ASC services and physician practice management), the Firm will assess whether any theory of horizontal competition could be advanced by the reviewing agency, including with respect to any ancillary service lines or overlapping payor relationships.

HHI Concentration Analysis. The Firm will calculate Herfindahl-Hirschman Index ("HHI") concentration levels for each relevant geographic market in which Pinnacle operates, both pre-transaction and post-transaction, to assess whether the proposed transaction would result in concentration levels or changes in concentration that could raise presumptive competitive concerns under the 2023 Merger Guidelines.

Vertical Relationships Analysis. The Firm will analyze potential vertical relationships between Ardent Capital's existing portfolio companies and Pinnacle. In particular, the Firm will evaluate referral patterns and referral relationships between Marlowe Asset Management Rehabilitation Holdings LLC's physical therapy clinics and Pinnacle's ASCs in the three states (Texas, Florida, and Georgia) where both companies maintain operations. The Firm will assess whether any such vertical relationships could give rise to theories of competitive harm, including foreclosure or raising rivals' costs, and will prepare appropriate responsive analysis.

Competitor Identification and Market Participant Mapping. The Firm will identify and map the principal competitors and market participants in each relevant product and geographic market, drawing upon publicly available data, proprietary healthcare industry databases, and information provided by the Ardent Capital deal team. This market participant mapping will support both the HHI analysis and the preparation of the voluntary submission to FTC staff.

2.4 Regulatory Correspondence and Advocacy

The Firm will handle all communications with the FTC Bureau of Competition, the Premerger Notification Office, and/or the DOJ Antitrust Division in connection with the HSR filing and the review of the proposed transaction. This includes, without limitation, responses to questions from agency staff regarding the HSR Form, informal requests for additional information or clarification, and any meetings or telephone conferences with agency personnel.

In the event that the FTC or DOJ issues a formal request for additional information and documentary material (a "Second Request") pursuant to 15 U.S.C. § 18a(e), the Firm will advise Ardent Capital regarding the scope and implications of the Second Request and the available strategic options. As discussed further in Section 2.6 below, the scope of this engagement would need to be expanded by mutual agreement to encompass Second Request compliance, and the Firm would provide a separate fee estimate for that additional work.

The Firm will coordinate with Greenvale Durneval LLP (target's antitrust counsel) and Fendowell Thornton LLP, led by Catherine "Kate" Yardley as Lead Partner (counsel to the target/seller, Veltrano Equity Holdings LLC), as required in connection with the filing process, regulatory communications, and any agency review of the proposed transaction. Such coordination may include joint advocacy efforts, information sharing for filing purposes, and alignment on timing and procedural matters.

2.5 Closing Deliverables

Upon expiration or early termination of the HSR waiting period, the Firm will prepare an HSR clearance certificate in the form of an officer's certificate confirming the expiration or early termination of the applicable HSR waiting period. This certificate will be delivered at closing as required by the Equity Purchase Agreement and will serve as evidence of the satisfaction of the antitrust closing condition.

The Firm will also provide written confirmation of the satisfaction of the antitrust closing condition set forth in Section 6.1(c) of the EPA, including any supporting documentation reasonably required by transaction counsel or the parties in connection with the closing.

2.6 Scope Limitations

It is important that the scope of this engagement be clearly understood. This engagement does not include representation of Ardent Capital with respect to the negotiation, drafting, or documentation of the Equity Purchase Agreement or any ancillary transaction documents; debt financing, including any credit facilities, commitment letters, or related arrangements; tax structuring, planning, or advisory services; employment, benefits, or compensation matters; intellectual property due diligence, prosecution, or licensing; real estate due diligence, title, survey, or environmental matters; or any other legal workstream not directly related to the antitrust and HSR matters described in Sections 2.1 through 2.5 above.

This engagement also does not include representation of Ardent Capital before any state antitrust authority or in connection with any state-level merger notification requirements that may be applicable to the proposed transaction, unless separately agreed in writing between the Firm and Ardent Capital. If state-level filings or approvals are required, the Firm would be pleased to discuss the scope of any additional engagement on mutually agreeable terms.

If a Second Request is issued by the FTC or DOJ in connection with the proposed transaction, the scope of this engagement will be expanded by mutual written agreement between the Firm and Ardent Capital. In such event, the Firm will promptly provide Ardent Capital with a separate scope of work and fee estimate for Second Request compliance, including any necessary document collection, custodian interviews, data submissions, and advocacy before the reviewing agency. Second Request compliance engagements typically involve substantially greater time, resources, and expense, and it is therefore important that the parties agree in advance on the scope and fee arrangements for any such expanded engagement.

3. Engagement Team

The following attorneys have been assigned to this engagement and will be principally responsible for the delivery of the services described in Section 2:

Howard Bellamy — Responsible Partner and Billing Partner, Antitrust & Competition Practice Group. Mr. Bellamy is a partner in the Firm's Antitrust & Competition Practice Group and has extensive experience advising private equity sponsors, strategic acquirors, and other clients on HSR filings, merger clearance, and antitrust regulatory matters across a wide range of industries, including healthcare services. Mr. Bellamy will serve as the primary relationship partner for Ardent Capital and will have overall responsibility for the strategic direction, quality, and supervision of the engagement. Mr. Bellamy will personally participate in all material communications with the reviewing agency and will lead any advocacy efforts before the FTC or DOJ.

Monica Reyes — Lead Associate, Antitrust & Competition Practice Group. Ms. Reyes is a senior associate in the Firm's Antitrust & Competition Practice Group with particular expertise in HSR premerger notification filings and healthcare antitrust matters. Ms. Reyes will have day-to-day responsibility for the preparation of the HSR filing, supervision of the Item 4(c) and Item 4(d) document collection and review process, and drafting of the substantive antitrust analysis memoranda and the voluntary submission (white paper) to FTC staff.

Elliot Nguyen — Working Associate, Antitrust & Competition Practice Group. Mr. Nguyen is an associate in the Firm's Antitrust & Competition Practice Group. Mr. Nguyen will assist with market research, HHI concentration calculations, regulatory analysis, NAICS code identification, competitor mapping, and document review. Mr. Nguyen will work under the supervision of Mr. Bellamy and Ms. Reyes.

Additional attorneys, paralegals, or staff may be assigned to this engagement as necessary to ensure the timely and efficient delivery of services. The Firm will provide prior notice to Ardent Capital of any additional personnel assigned to the matter, along with the applicable billing rates for such personnel.

4. Fees and Billing Arrangements

4.1 Hourly Rates

The Firm will bill for its services on an hourly basis. The Firm's current standard hourly rates for the attorneys assigned to this matter are as follows:

In the event that additional attorneys or paralegals are assigned to the engagement, their applicable hourly rates will be communicated to Ardent Capital at the time of assignment. Paralegal rates at the Firm currently range from $350 to $475 per hour, depending on the seniority and experience of the paralegal.

The hourly rates set forth above are the Firm's standard rates for calendar year 2024. Hourly rates are subject to annual adjustment, which typically takes effect on January 1 of each year. Any rate adjustments applicable to this engagement for calendar year 2025 or thereafter will be communicated to Ardent Capital in advance of their effective date. Given our current expectation that this engagement will be completed within the first half of 2024, we do not anticipate that any rate adjustments will apply during the course of this engagement.

4.2 Billing Cycle and Payment Terms

Invoices for professional fees and disbursements will be rendered on a monthly basis, typically within fifteen (15) business days following the end of each calendar month. All invoices are due and payable within thirty (30) days of the invoice date. The Firm reserves the right to charge interest on past due amounts at the rate of one percent (1.0%) per month, or the maximum rate permitted by applicable law, whichever is less.

Each invoice will include a detailed description of the services rendered during the billing period, the identity of each timekeeper who performed services, the number of hours worked by each timekeeper, the applicable hourly rate, and the total fees for the period. All invoices will reference Matter No. 1001-00001 and should be directed to the attention of the Ardent Capital finance or accounting team at the address set forth above, or to such other address or electronic billing system as Ardent Capital may designate in writing.

4.3 Expenses and Disbursements

In addition to professional fees, Ardent Capital will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements may include, but are not limited to, the following: filing fees (including the HSR filing fee); overnight delivery and courier charges; travel expenses (including airfare, hotel, ground transportation, and meals) incurred in connection with meetings with the FTC or DOJ or other engagement-related travel; copying, printing, and scanning costs; charges for online legal research services (such as Westmark Data Systems, Calderon Systems, and Cascade Services Inc.); messenger services; and long-distance telephone charges. All expenses will be billed at cost, without markup, and will be itemized on the applicable monthly invoice.

With respect to the HSR filing fee, the Firm has determined on a preliminary basis that the applicable filing fee for the proposed transaction is $280,000, based on a transaction value of approximately $952 million falling within the $500 million to $999.9 million tier under the 2024 FTC fee schedule. This filing fee will be paid directly by Ardent Capital to the FTC through the FTC's electronic filing system, consistent with Ardent Capital's obligation under Section 5.4(a) of the Equity Purchase Agreement. Alternatively, if requested by Ardent Capital, the Firm may advance the filing fee on the client's behalf, in which case Ardent Capital shall promptly reimburse the Firm upon receipt of an invoice reflecting the advanced amount. The Firm will coordinate with Ardent Capital's finance team to determine the preferred approach for payment of the filing fee.

4.4 Fee Estimate

Based on our current understanding of the proposed transaction, the anticipated scope of the antitrust and HSR workstream, and the assumption that no Second Request is issued by the FTC or DOJ, the Firm estimates that total professional fees for this engagement will be in the range of $125,000 to $200,000, exclusive of the $280,000 HSR filing fee and other out-of-pocket expenses and disbursements. This estimate reflects the Firm's assessment of the work likely required to prepare and file the HSR Form, conduct the substantive antitrust analysis, prepare the voluntary submission (white paper), manage regulatory communications with the reviewing agency, and deliver the closing deliverables described in Section 2.5.

This fee estimate is provided for budgeting and planning purposes only and does not constitute a cap, fixed fee, or guaranteed maximum fee for this engagement. Actual fees will depend on a number of factors, including the complexity of the competitive analysis, the volume of Item 4(c) and Item 4(d) responsive documents, the nature and extent of any agency inquiries or information requests, and the degree of coordination required with other counsel. If at any time during the engagement it appears that actual fees are likely to materially exceed the upper end of this estimate, the Firm will promptly notify Ardent Capital and discuss the anticipated scope and cost of the remaining work.

5. Client Identity and Relationship

The Firm's client in this engagement is Ardent Capital Partners III LP. The attorney-client relationship established by this engagement letter exists solely between the Firm and Fund III.

The Firm does not represent, and this engagement does not extend to, any of the following: Ardent Capital Management LLC (except in its capacity as the entity identified as the Ultimate Parent Entity for HSR filing purposes); Ardent Capital GP III LLC; any affiliate, subsidiary, or portfolio company of Ardent Capital, including without limitation Marlowe Asset Management Rehabilitation Holdings LLC and Clearpath Diagnostics Inc.; any individual partner, member, officer, director, employee, or agent of any of the foregoing entities; Pinnacle Health Systems, Inc.; Veltrano Equity Holdings LLC; or any other party to the proposed transaction. If any such entity or individual requires separate legal representation in connection with the proposed transaction or any related matter, such representation would need to be established pursuant to a separate engagement letter, subject to the Firm's conflicts review and acceptance procedures.

Instructions and direction regarding this engagement may be provided by Julian Desmond and/or Priya Chandrasekar, or their designated representatives, on behalf of Ardent Capital. The Firm will be entitled to rely on instructions received from Mr. Desmond or Ms. Chandrasekar (or their designees) as having been duly authorized by Ardent Capital, unless and until Ardent Capital notifies the Firm in writing to the contrary.

6. Confidentiality

All communications between the Firm and Ardent Capital, and all work product prepared by the Firm in connection with this engagement, will be treated as confidential and, to the fullest extent permitted by applicable law, will be protected by the attorney-client privilege and the work product doctrine. The Firm recognizes the sensitive and proprietary nature of the information that may be shared with the Firm in connection with this engagement, including information relating to Ardent Capital's investment strategy, portfolio company operations, financial projections, and competitive positioning.

The Firm will not disclose confidential information received from or on behalf of Ardent Capital to any third party without Ardent Capital's prior written consent, except as may be required by applicable law, regulation, or court order, or as necessary in connection with the HSR filing and related governmental submissions made to the FTC and/or the DOJ. In the event the Firm receives a subpoena, court order, or other compulsory process requiring the disclosure of confidential information relating to this engagement, the Firm will, to the extent permitted by applicable law, promptly notify Ardent Capital and cooperate with Ardent Capital in seeking appropriate protective relief.

To the extent that information is shared with Greenvale Durneval LLP (target's antitrust counsel), Fendowell Thornton LLP (seller's counsel), or other counsel in connection with the coordinated HSR filing process, the Firm will use reasonable efforts to limit such sharing to non-privileged, factual information necessary for filing coordination and regulatory compliance, unless Ardent Capital provides broader written authorization for the sharing of privileged or otherwise confidential information. The Firm will consult with Ardent Capital before entering into any joint defense, common interest, or information-sharing agreements with such other counsel.

7. Conflicts of Interest

The Firm has conducted a conflicts check in connection with this proposed engagement in accordance with its standard conflicts clearance procedures and the applicable provisions of the New York Rules of Professional Conduct. Based on the information currently available to the Firm, including the identities of the parties to the proposed transaction, their affiliates, and the key individuals involved, the Firm has not identified any conflicts of interest that would preclude our representation of Ardent Capital in this matter. A memorandum documenting the results of the Firm's internal conflicts review, dated January 28, 2024, has been prepared and is maintained in the Firm's conflicts records.

If at any time during the course of this engagement a conflict of interest arises or is identified — whether as a result of the Firm's acceptance of a new client engagement, a change in the circumstances of this engagement, or otherwise — the Firm will promptly notify Ardent Capital and discuss the appropriate course of action. Depending on the nature and severity of the conflict, the Firm and Ardent Capital may agree to address the conflict through the execution of an informed written waiver by the affected parties, or, if the conflict cannot be appropriately waived, through the Firm's withdrawal from the engagement and the orderly transition of the matter to successor counsel.

8. Document Retention

Upon completion of this engagement, the Firm will retain client files, work product, and related materials in accordance with the Firm's standard document retention policy, which currently provides for the retention of closed matter files for a period of ten (10) years following the date of matter closure. During the retention period, the Firm will maintain the files in a secure manner consistent with its obligations of confidentiality and data security.

Original documents provided to the Firm by Ardent Capital in connection with this engagement, as well as original filing receipts, agency correspondence, and other original materials generated in the course of the engagement, will be returned to Ardent Capital upon request or retained in the Firm's files at the client's direction. If Ardent Capital does not request the return of original documents, such documents will be retained and ultimately disposed of in accordance with the Firm's standard retention policy.

The Firm reserves the right to destroy client files and related materials after the expiration of the applicable retention period, unless Ardent Capital instructs the Firm in writing to retain such files for a longer period. The Firm will make reasonable efforts to provide advance notice to Ardent Capital before destroying any files relating to this engagement, but the Firm shall have no liability for the destruction of files following the expiration of the retention period in the absence of a written instruction to the contrary.

9. Limitation of Liability

To the fullest extent permitted by applicable law, the Firm's aggregate liability to Ardent Capital and any other person or entity in connection with this engagement, whether arising in contract, tort (including negligence), strict liability, or otherwise, shall not exceed the total amount of professional fees actually paid by Ardent Capital to the Firm for services rendered under this engagement letter. This limitation of liability applies to any and all claims, losses, damages, costs, and expenses arising out of or relating to the Firm's performance or non-performance of the services contemplated by this engagement letter.

In no event shall the Firm be liable to Ardent Capital or any other person or entity for any consequential, incidental, indirect, special, exemplary, or punitive damages of any kind, including without limitation lost profits, lost business opportunities, diminution in value, or any other damages not constituting direct, actual damages, regardless of whether such damages are foreseeable and regardless of whether the Firm has been advised of the possibility of such damages.

Nothing in this Section 9 shall limit or exclude the Firm's liability for fraud, willful misconduct, or any liability that cannot be limited or excluded as a matter of applicable law or professional regulation.

10. Termination

Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Written notice of termination may be delivered by email, overnight courier, or certified mail to the applicable address set forth in this engagement letter, or to such other address as either party may designate in writing.

Upon termination of this engagement, Ardent Capital shall remain responsible for the payment of all professional fees and disbursements incurred by the Firm through the date of termination, in accordance with the fee and billing arrangements set forth in Section 4. The Firm will render a final invoice within thirty (30) days following the effective date of termination, and payment of such final invoice shall be due in accordance with the payment terms set forth in Section 4.2.

In the event of termination, the Firm will cooperate with Ardent Capital in the orderly transition of the matter to successor counsel, including the prompt transfer of client files, work product, and other materials, subject to the Firm's right to retain copies of such materials for its records and as required by applicable law and professional regulations. The Firm's obligations under Sections 6 (Confidentiality), 9 (Limitation of Liability), and 11 (Governing Law and Dispute Resolution) shall survive the termination of this engagement.

11. Governing Law and Dispute Resolution

This engagement letter and the terms and conditions set forth herein shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.

Any dispute, controversy, or claim arising out of or relating to this engagement letter or the Firm's provision of services hereunder, including without limitation any dispute regarding the interpretation, validity, enforceability, or termination of this engagement letter, or any claim for breach of fiduciary duty, malpractice, or other professional liability, shall be resolved by binding arbitration in New York, New York, administered by the American Arbitration Association (the "AAA") in accordance with the AAA's then-current Commercial Arbitration Rules. The arbitration shall be conducted before a single arbitrator selected in accordance with the AAA's rules. The arbitrator's award shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration proceeding, unless the arbitrator determines that the prevailing party is entitled to recover its reasonable costs and fees from the non-prevailing party.

12. Acceptance and Execution

We are grateful for the opportunity to serve as antitrust counsel to Ardent Capital in connection with this important transaction. We trust that the terms set forth in this engagement letter accurately reflect our mutual understanding and agreement regarding the scope and terms of the Firm's representation.

We kindly request that Ardent Capital confirm its acceptance of the terms of this engagement letter by having an authorized representative of Ardent Capital execute the countersignature block below and return a signed copy of this letter to the undersigned at the address set forth above or by email to hbellamy@calderwoodharkness.com. The Firm may commence work upon receipt of the executed engagement letter.

If Ardent Capital does not object to the terms of this engagement letter in writing within fifteen (15) days of the date hereof, the terms set forth in this engagement letter shall be deemed accepted by Ardent Capital.

This engagement letter, together with any exhibits and attachments hereto, constitutes the entire agreement between the Firm and Ardent Capital with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, whether written or oral, with respect thereto.

We look forward to working with you and your team on this matter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Bellamy Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7200

Email: hbellamy@calderwoodharkness.com

AGREED AND ACCEPTED:

ARDENT CAPITAL PARTNERS III LP

By: Ardent Capital GP III LLC, its General Partner

By: Ardent Capital Management LLC, its Sole Member

By: ________

Name: Julian Desmond

Title: Co-Founder & Managing Partner

Date: January 29, 2024

Address:

399 Park Avenue, 41st Floor New York, New York 10022

Enclosures: None

cc: Priya Chandrasekar, Co-Founder & Managing Partner, Ardent Capital Management LLC cc: David Ostrander, Whitfield & Crane LLP (transaction counsel to Ardent Capital)

Timekeeper	Title	Hourly Rate
Howard Bellamy	Partner	$1,650
Monica Reyes	Senior Associate	$875
Elliot Nguyen	Associate	$725

CALDERWOOD & HARKNESS LLP Attorneys at Law
600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7000 Facsimile: (212) 554-7001 www.calderwoodharkness.com
January 29, 2024
Ardent Capital Partners III LP c/o Ardent Capital Management LLC 399 Park Avenue, 41st Floor New York, New York 10022
Attention: Julian Desmond, Co-Founder & Managing Partner
Priya Chandrasekar, Co-Founder & Managing Partner
Re: Engagement of Calderwood & Harkness LLP — Antitrust and Hart-Scott-Rodino Advisory Services in Connection with the Acquisition of Pinnacle Health Systems, Inc.
Matter No.: 1001-00001
Dear Mr. Desmond and Ms. Chandrasekar:
1. Introduction and Engagement Overview
We are pleased to confirm that Calderwood & Harkness LLP ("the Firm," "Calderwood & Harkness," "we," or "us") has been engaged by Ardent Capital Partners III LP ("Ardent Capital," "Fund III," or "you"), a Delaware limited partnership, to provide antitrust and competition law advisory services in connection with Ardent Capital's proposed acquisition of one hundred percent (100%) of the outstanding equity interests of Pinnacle Health Systems, Inc. ("Pinnacle" or "PHS"), a Delaware corporation headquartered in Charlotte, North Carolina. Pinnacle is a specialty healthcare services platform that owns and operates a network of ambulatory surgical centers ("ASCs") and physician practice management entities across nine states. Pinnacle's operations span a broad geographic footprint, with significant concentrations in the southeastern United States, and the company has established itself as a meaningful participant in the delivery of outpatient surgical and practice management services.
We understand that the proposed transaction is structured as a stock purchase pursuant to which Ardent Capital, through one or more acquisition vehicles, will acquire all of the outstanding shares of common stock and preferred stock of Pinnacle from the current holders thereof, including Veltrano Equity Holdings LLC, certain management stockholders, and other minority equity participants. The enterprise value of Pinnacle for purposes of the proposed transaction is approximately Nine Hundred Fifty-Two Million Dollars ($952,000,000). An Equity Purchase Agreement (the "EPA") reflecting the definitive terms of the proposed acquisition is expected to be executed by the parties on or about January 31, 2024.
We understand that Whitfield & Crane LLP, led by David Ostrander as Lead Partner, is serving as lead transaction counsel to Ardent Capital in connection with the proposed acquisition. Calderwood & Harkness's engagement is limited to the antitrust and Hart-Scott-Rodino ("HSR") workstream as more fully described in Section 2 below. We look forward to coordinating closely with Mr. Ostrander and his team to ensure that the antitrust workstream proceeds in alignment with the overall transaction timeline and closing conditions.
For the avoidance of doubt, we acknowledge that Ardent Capital Management LLC, a Delaware limited liability company registered as an investment adviser under the Investment Advisers Act of 1940, serves as the registered investment adviser and manager of Fund III, and that Ardent Capital GP III LLC, a Delaware limited liability company, serves as the general partner of Fund III. The relationships among these entities are relevant to the HSR filing analysis, including the determination of the "Ultimate Parent Entity" for purposes of the premerger notification, and will be addressed as part of our engagement.
This engagement letter sets forth the terms and conditions of our representation, including the scope of the engagement, the engagement team, our fee arrangements, and other matters relevant to the attorney-client relationship. We ask that you review this letter carefully and confirm your agreement to its terms by executing and returning a countersigned copy as provided in Section 12 below.
2. Scope of Engagement
The Firm's engagement encompasses the following services in connection with the proposed acquisition of Pinnacle:
2.1 HSR Premerger Notification Filing
The Firm will prepare and file the Hart-Scott-Rodino Act premerger notification form (the "HSR Form") on behalf of the acquiring person — Ardent Capital Partners III LP — with both the Federal Trade Commission (the "FTC") and the Antitrust Division of the United States Department of Justice (the "DOJ"). For purposes of the HSR filing, Ardent Capital Management LLC will be identified as the Ultimate Parent Entity ("UPE") of the acquiring person, consistent with the Firm's analysis of the applicable beneficial ownership and control relationships among Fund III, its general partner, and its investment manager.
As part of the HSR filing process, the Firm will conduct a thorough analysis of the applicable jurisdictional thresholds under the HSR Act and the implementing regulations promulgated by the FTC, as revised for calendar year 2024. Specifically, the Firm will analyze the size-of-transaction threshold, which for 2024 is set at $111.4 million. Given that the enterprise value of the proposed transaction is approximately $952 million, the size-of-transaction threshold is clearly exceeded. The Firm will also conduct the size-of-person analysis for both the acquiring person and the acquired person to determine whether the higher filing thresholds are applicable and to confirm the correct filing fee tier.
With respect to filing fees, the Firm has determined on a preliminary basis that the transaction value of approximately $952 million falls within the $500 million to $999.9 million tier under the 2024 FTC fee schedule, resulting in an applicable filing fee of $280,000. The Firm will confirm this determination upon finalization of the transaction value and prior to submission of the HSR Form.
The Firm will coordinate with Pinnacle's antitrust counsel, Greenvale Durneval LLP, led by Jonathan Felder as Lead Partner, to facilitate the simultaneous filing of the acquired person notification form. Timely coordination with target-side counsel is critical to avoid delays in the commencement of the statutory waiting period, and the Firm will work diligently to ensure that both filings are submitted on the same business day.
A central component of the HSR filing preparation will be the identification, collection, and production of documents responsive to Item 4(c) and Item 4(d) of the HSR Form. Item 4(c) requires the production of documents prepared by or for officers or directors of the filing person that analyze the transaction with respect to markets, market shares, competition, competitors, potential for sales growth, or expansion into new product or geographic markets. Item 4(d) requires the production of certain studies, surveys, analyses, and reports that analyze market shares, competition, competitors, or markets for any product or service of the filing person that also relates to products or services of the other party to the transaction. The Firm will work with Ardent Capital's deal team and investment professionals to identify all potentially responsive documents, will conduct a thorough privilege review of such documents, and will prepare appropriate redactions and privilege logs as necessary to protect attorney-client privileged and work product materials from disclosure.
2.2 Early Termination Request
The Firm will prepare and submit, on behalf of Ardent Capital, a request for early termination of the initial thirty (30) day statutory waiting period under the HSR Act, 15 U.S.C. § 18a(b)(1). Early termination, if granted by both the FTC and the DOJ, would allow the parties to consummate the transaction prior to the expiration of the full thirty-day waiting period, thereby potentially accelerating the closing timeline.
In support of the early termination request, the Firm will prepare a voluntary submission, commonly referred to as a "white paper," for submission to FTC staff in the Premerger Notification Office and the relevant Bureau of Competition division. The white paper will present a detailed substantive competitive analysis of the proposed transaction, including a discussion of the relevant product and geographic markets, the competitive landscape, the absence of meaningful competitive overlaps, and the procompetitive efficiencies anticipated to result from the transaction. The purpose of the white paper is to provide the reviewing agency with sufficient information to conclude that the transaction does not raise competitive concerns warranting further investigation, thereby supporting the grant of early termination or, at minimum, facilitating the smooth expiration of the statutory waiting period without the issuance of a Second Request.
2.3 Substantive Antitrust Analysis
The Firm will conduct a comprehensive substantive antitrust analysis of the proposed transaction, addressing the following areas:
Relevant Product Markets. The Firm will analyze the relevant product markets implicated by the proposed transaction. Based on our preliminary understanding of Pinnacle's operations, the primary relevant product markets are expected to include (i) ambulatory surgical center services, encompassing outpatient surgical procedures performed in freestanding ASC facilities, and (ii) physician practice management services, encompassing the management, administrative support, and operational services provided to physician practices under management services agreements or similar arrangements. The Firm will evaluate the appropriate product market definitions in light of applicable case law, FTC and DOJ enforcement actions in the healthcare sector, and the 2023 Merger Guidelines.
Relevant Geographic Markets. The Firm will conduct a Metropolitan Statistical Area ("MSA")-level geographic market analysis across Pinnacle's nine-state operational footprint, which includes facilities and operations in North Carolina, South Carolina, Virginia, Tennessee, Georgia, Florida, Alabama, Ohio, and Texas. The geographic market analysis will assess the competitive conditions in each MSA in which Pinnacle operates one or more ASCs or manages physician practices, taking into account patient travel patterns, payor contracting dynamics, and referral source characteristics.
Horizontal Overlap Analysis. The Firm will analyze potential horizontal competitive overlaps between Pinnacle and Ardent Capital's existing healthcare portfolio companies, specifically: (i) Marlowe Asset Management Rehabilitation Holdings LLC ("Marlowe Asset Management"), which operates outpatient physical therapy clinics in Texas, Florida, and Georgia; and (ii) Clearpath Diagnostics Inc. ("Clearpath"), which provides clinical laboratory services in Pennsylvania, New Jersey, and New York. Although the services provided by Marlowe Asset Management (outpatient physical therapy) and Clearpath (clinical laboratory services) are distinct from the services provided by Pinnacle (ASC services and physician practice management), the Firm will assess whether any theory of horizontal competition could be advanced by the reviewing agency, including with respect to any ancillary service lines or overlapping payor relationships.
HHI Concentration Analysis. The Firm will calculate Herfindahl-Hirschman Index ("HHI") concentration levels for each relevant geographic market in which Pinnacle operates, both pre-transaction and post-transaction, to assess whether the proposed transaction would result in concentration levels or changes in concentration that could raise presumptive competitive concerns under the 2023 Merger Guidelines.
Vertical Relationships Analysis. The Firm will analyze potential vertical relationships between Ardent Capital's existing portfolio companies and Pinnacle. In particular, the Firm will evaluate referral patterns and referral relationships between Marlowe Asset Management Rehabilitation Holdings LLC's physical therapy clinics and Pinnacle's ASCs in the three states (Texas, Florida, and Georgia) where both companies maintain operations. The Firm will assess whether any such vertical relationships could give rise to theories of competitive harm, including foreclosure or raising rivals' costs, and will prepare appropriate responsive analysis.
Competitor Identification and Market Participant Mapping. The Firm will identify and map the principal competitors and market participants in each relevant product and geographic market, drawing upon publicly available data, proprietary healthcare industry databases, and information provided by the Ardent Capital deal team. This market participant mapping will support both the HHI analysis and the preparation of the voluntary submission to FTC staff.
2.4 Regulatory Correspondence and Advocacy
The Firm will handle all communications with the FTC Bureau of Competition, the Premerger Notification Office, and/or the DOJ Antitrust Division in connection with the HSR filing and the review of the proposed transaction. This includes, without limitation, responses to questions from agency staff regarding the HSR Form, informal requests for additional information or clarification, and any meetings or telephone conferences with agency personnel.
In the event that the FTC or DOJ issues a formal request for additional information and documentary material (a "Second Request") pursuant to 15 U.S.C. § 18a(e), the Firm will advise Ardent Capital regarding the scope and implications of the Second Request and the available strategic options. As discussed further in Section 2.6 below, the scope of this engagement would need to be expanded by mutual agreement to encompass Second Request compliance, and the Firm would provide a separate fee estimate for that additional work.
The Firm will coordinate with Greenvale Durneval LLP (target's antitrust counsel) and Fendowell Thornton LLP, led by Catherine "Kate" Yardley as Lead Partner (counsel to the target/seller, Veltrano Equity Holdings LLC), as required in connection with the filing process, regulatory communications, and any agency review of the proposed transaction. Such coordination may include joint advocacy efforts, information sharing for filing purposes, and alignment on timing and procedural matters.
2.5 Closing Deliverables
Upon expiration or early termination of the HSR waiting period, the Firm will prepare an HSR clearance certificate in the form of an officer's certificate confirming the expiration or early termination of the applicable HSR waiting period. This certificate will be delivered at closing as required by the Equity Purchase Agreement and will serve as evidence of the satisfaction of the antitrust closing condition.
The Firm will also provide written confirmation of the satisfaction of the antitrust closing condition set forth in Section 6.1(c) of the EPA, including any supporting documentation reasonably required by transaction counsel or the parties in connection with the closing.
2.6 Scope Limitations
It is important that the scope of this engagement be clearly understood. This engagement does not include representation of Ardent Capital with respect to the negotiation, drafting, or documentation of the Equity Purchase Agreement or any ancillary transaction documents; debt financing, including any credit facilities, commitment letters, or related arrangements; tax structuring, planning, or advisory services; employment, benefits, or compensation matters; intellectual property due diligence, prosecution, or licensing; real estate due diligence, title, survey, or environmental matters; or any other legal workstream not directly related to the antitrust and HSR matters described in Sections 2.1 through 2.5 above.
This engagement also does not include representation of Ardent Capital before any state antitrust authority or in connection with any state-level merger notification requirements that may be applicable to the proposed transaction, unless separately agreed in writing between the Firm and Ardent Capital. If state-level filings or approvals are required, the Firm would be pleased to discuss the scope of any additional engagement on mutually agreeable terms.
If a Second Request is issued by the FTC or DOJ in connection with the proposed transaction, the scope of this engagement will be expanded by mutual written agreement between the Firm and Ardent Capital. In such event, the Firm will promptly provide Ardent Capital with a separate scope of work and fee estimate for Second Request compliance, including any necessary document collection, custodian interviews, data submissions, and advocacy before the reviewing agency. Second Request compliance engagements typically involve substantially greater time, resources, and expense, and it is therefore important that the parties agree in advance on the scope and fee arrangements for any such expanded engagement.
3. Engagement Team
The following attorneys have been assigned to this engagement and will be principally responsible for the delivery of the services described in Section 2:
Howard Bellamy — Responsible Partner and Billing Partner, Antitrust & Competition Practice Group. Mr. Bellamy is a partner in the Firm's Antitrust & Competition Practice Group and has extensive experience advising private equity sponsors, strategic acquirors, and other clients on HSR filings, merger clearance, and antitrust regulatory matters across a wide range of industries, including healthcare services. Mr. Bellamy will serve as the primary relationship partner for Ardent Capital and will have overall responsibility for the strategic direction, quality, and supervision of the engagement. Mr. Bellamy will personally participate in all material communications with the reviewing agency and will lead any advocacy efforts before the FTC or DOJ.
Monica Reyes — Lead Associate, Antitrust & Competition Practice Group. Ms. Reyes is a senior associate in the Firm's Antitrust & Competition Practice Group with particular expertise in HSR premerger notification filings and healthcare antitrust matters. Ms. Reyes will have day-to-day responsibility for the preparation of the HSR filing, supervision of the Item 4(c) and Item 4(d) document collection and review process, and drafting of the substantive antitrust analysis memoranda and the voluntary submission (white paper) to FTC staff.
Elliot Nguyen — Working Associate, Antitrust & Competition Practice Group. Mr. Nguyen is an associate in the Firm's Antitrust & Competition Practice Group. Mr. Nguyen will assist with market research, HHI concentration calculations, regulatory analysis, NAICS code identification, competitor mapping, and document review. Mr. Nguyen will work under the supervision of Mr. Bellamy and Ms. Reyes.
Additional attorneys, paralegals, or staff may be assigned to this engagement as necessary to ensure the timely and efficient delivery of services. The Firm will provide prior notice to Ardent Capital of any additional personnel assigned to the matter, along with the applicable billing rates for such personnel.
4. Fees and Billing Arrangements
4.1 Hourly Rates
The Firm will bill for its services on an hourly basis. The Firm's current standard hourly rates for the attorneys assigned to this matter are as follows:
In the event that additional attorneys or paralegals are assigned to the engagement, their applicable hourly rates will be communicated to Ardent Capital at the time of assignment. Paralegal rates at the Firm currently range from $350 to $475 per hour, depending on the seniority and experience of the paralegal.
The hourly rates set forth above are the Firm's standard rates for calendar year 2024. Hourly rates are subject to annual adjustment, which typically takes effect on January 1 of each year. Any rate adjustments applicable to this engagement for calendar year 2025 or thereafter will be communicated to Ardent Capital in advance of their effective date. Given our current expectation that this engagement will be completed within the first half of 2024, we do not anticipate that any rate adjustments will apply during the course of this engagement.
4.2 Billing Cycle and Payment Terms
Invoices for professional fees and disbursements will be rendered on a monthly basis, typically within fifteen (15) business days following the end of each calendar month. All invoices are due and payable within thirty (30) days of the invoice date. The Firm reserves the right to charge interest on past due amounts at the rate of one percent (1.0%) per month, or the maximum rate permitted by applicable law, whichever is less.
Each invoice will include a detailed description of the services rendered during the billing period, the identity of each timekeeper who performed services, the number of hours worked by each timekeeper, the applicable hourly rate, and the total fees for the period. All invoices will reference Matter No. 1001-00001 and should be directed to the attention of the Ardent Capital finance or accounting team at the address set forth above, or to such other address or electronic billing system as Ardent Capital may designate in writing.
4.3 Expenses and Disbursements
In addition to professional fees, Ardent Capital will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements may include, but are not limited to, the following: filing fees (including the HSR filing fee); overnight delivery and courier charges; travel expenses (including airfare, hotel, ground transportation, and meals) incurred in connection with meetings with the FTC or DOJ or other engagement-related travel; copying, printing, and scanning costs; charges for online legal research services (such as Westmark Data Systems, Calderon Systems, and Cascade Services Inc.); messenger services; and long-distance telephone charges. All expenses will be billed at cost, without markup, and will be itemized on the applicable monthly invoice.
With respect to the HSR filing fee, the Firm has determined on a preliminary basis that the applicable filing fee for the proposed transaction is $280,000, based on a transaction value of approximately $952 million falling within the $500 million to $999.9 million tier under the 2024 FTC fee schedule. This filing fee will be paid directly by Ardent Capital to the FTC through the FTC's electronic filing system, consistent with Ardent Capital's obligation under Section 5.4(a) of the Equity Purchase Agreement. Alternatively, if requested by Ardent Capital, the Firm may advance the filing fee on the client's behalf, in which case Ardent Capital shall promptly reimburse the Firm upon receipt of an invoice reflecting the advanced amount. The Firm will coordinate with Ardent Capital's finance team to determine the preferred approach for payment of the filing fee.
4.4 Fee Estimate
Based on our current understanding of the proposed transaction, the anticipated scope of the antitrust and HSR workstream, and the assumption that no Second Request is issued by the FTC or DOJ, the Firm estimates that total professional fees for this engagement will be in the range of $125,000 to $200,000, exclusive of the $280,000 HSR filing fee and other out-of-pocket expenses and disbursements. This estimate reflects the Firm's assessment of the work likely required to prepare and file the HSR Form, conduct the substantive antitrust analysis, prepare the voluntary submission (white paper), manage regulatory communications with the reviewing agency, and deliver the closing deliverables described in Section 2.5.
This fee estimate is provided for budgeting and planning purposes only and does not constitute a cap, fixed fee, or guaranteed maximum fee for this engagement. Actual fees will depend on a number of factors, including the complexity of the competitive analysis, the volume of Item 4(c) and Item 4(d) responsive documents, the nature and extent of any agency inquiries or information requests, and the degree of coordination required with other counsel. If at any time during the engagement it appears that actual fees are likely to materially exceed the upper end of this estimate, the Firm will promptly notify Ardent Capital and discuss the anticipated scope and cost of the remaining work.
5. Client Identity and Relationship
The Firm's client in this engagement is Ardent Capital Partners III LP. The attorney-client relationship established by this engagement letter exists solely between the Firm and Fund III.
The Firm does not represent, and this engagement does not extend to, any of the following: Ardent Capital Management LLC (except in its capacity as the entity identified as the Ultimate Parent Entity for HSR filing purposes); Ardent Capital GP III LLC; any affiliate, subsidiary, or portfolio company of Ardent Capital, including without limitation Marlowe Asset Management Rehabilitation Holdings LLC and Clearpath Diagnostics Inc.; any individual partner, member, officer, director, employee, or agent of any of the foregoing entities; Pinnacle Health Systems, Inc.; Veltrano Equity Holdings LLC; or any other party to the proposed transaction. If any such entity or individual requires separate legal representation in connection with the proposed transaction or any related matter, such representation would need to be established pursuant to a separate engagement letter, subject to the Firm's conflicts review and acceptance procedures.
Instructions and direction regarding this engagement may be provided by Julian Desmond and/or Priya Chandrasekar, or their designated representatives, on behalf of Ardent Capital. The Firm will be entitled to rely on instructions received from Mr. Desmond or Ms. Chandrasekar (or their designees) as having been duly authorized by Ardent Capital, unless and until Ardent Capital notifies the Firm in writing to the contrary.
6. Confidentiality
All communications between the Firm and Ardent Capital, and all work product prepared by the Firm in connection with this engagement, will be treated as confidential and, to the fullest extent permitted by applicable law, will be protected by the attorney-client privilege and the work product doctrine. The Firm recognizes the sensitive and proprietary nature of the information that may be shared with the Firm in connection with this engagement, including information relating to Ardent Capital's investment strategy, portfolio company operations, financial projections, and competitive positioning.
The Firm will not disclose confidential information received from or on behalf of Ardent Capital to any third party without Ardent Capital's prior written consent, except as may be required by applicable law, regulation, or court order, or as necessary in connection with the HSR filing and related governmental submissions made to the FTC and/or the DOJ. In the event the Firm receives a subpoena, court order, or other compulsory process requiring the disclosure of confidential information relating to this engagement, the Firm will, to the extent permitted by applicable law, promptly notify Ardent Capital and cooperate with Ardent Capital in seeking appropriate protective relief.
To the extent that information is shared with Greenvale Durneval LLP (target's antitrust counsel), Fendowell Thornton LLP (seller's counsel), or other counsel in connection with the coordinated HSR filing process, the Firm will use reasonable efforts to limit such sharing to non-privileged, factual information necessary for filing coordination and regulatory compliance, unless Ardent Capital provides broader written authorization for the sharing of privileged or otherwise confidential information. The Firm will consult with Ardent Capital before entering into any joint defense, common interest, or information-sharing agreements with such other counsel.
7. Conflicts of Interest
The Firm has conducted a conflicts check in connection with this proposed engagement in accordance with its standard conflicts clearance procedures and the applicable provisions of the New York Rules of Professional Conduct. Based on the information currently available to the Firm, including the identities of the parties to the proposed transaction, their affiliates, and the key individuals involved, the Firm has not identified any conflicts of interest that would preclude our representation of Ardent Capital in this matter. A memorandum documenting the results of the Firm's internal conflicts review, dated January 28, 2024, has been prepared and is maintained in the Firm's conflicts records.
If at any time during the course of this engagement a conflict of interest arises or is identified — whether as a result of the Firm's acceptance of a new client engagement, a change in the circumstances of this engagement, or otherwise — the Firm will promptly notify Ardent Capital and discuss the appropriate course of action. Depending on the nature and severity of the conflict, the Firm and Ardent Capital may agree to address the conflict through the execution of an informed written waiver by the affected parties, or, if the conflict cannot be appropriately waived, through the Firm's withdrawal from the engagement and the orderly transition of the matter to successor counsel.
8. Document Retention
Upon completion of this engagement, the Firm will retain client files, work product, and related materials in accordance with the Firm's standard document retention policy, which currently provides for the retention of closed matter files for a period of ten (10) years following the date of matter closure. During the retention period, the Firm will maintain the files in a secure manner consistent with its obligations of confidentiality and data security.
Original documents provided to the Firm by Ardent Capital in connection with this engagement, as well as original filing receipts, agency correspondence, and other original materials generated in the course of the engagement, will be returned to Ardent Capital upon request or retained in the Firm's files at the client's direction. If Ardent Capital does not request the return of original documents, such documents will be retained and ultimately disposed of in accordance with the Firm's standard retention policy.
The Firm reserves the right to destroy client files and related materials after the expiration of the applicable retention period, unless Ardent Capital instructs the Firm in writing to retain such files for a longer period. The Firm will make reasonable efforts to provide advance notice to Ardent Capital before destroying any files relating to this engagement, but the Firm shall have no liability for the destruction of files following the expiration of the retention period in the absence of a written instruction to the contrary.
9. Limitation of Liability
To the fullest extent permitted by applicable law, the Firm's aggregate liability to Ardent Capital and any other person or entity in connection with this engagement, whether arising in contract, tort (including negligence), strict liability, or otherwise, shall not exceed the total amount of professional fees actually paid by Ardent Capital to the Firm for services rendered under this engagement letter. This limitation of liability applies to any and all claims, losses, damages, costs, and expenses arising out of or relating to the Firm's performance or non-performance of the services contemplated by this engagement letter.
In no event shall the Firm be liable to Ardent Capital or any other person or entity for any consequential, incidental, indirect, special, exemplary, or punitive damages of any kind, including without limitation lost profits, lost business opportunities, diminution in value, or any other damages not constituting direct, actual damages, regardless of whether such damages are foreseeable and regardless of whether the Firm has been advised of the possibility of such damages.
Nothing in this Section 9 shall limit or exclude the Firm's liability for fraud, willful misconduct, or any liability that cannot be limited or excluded as a matter of applicable law or professional regulation.
10. Termination
Either party may terminate this engagement at any time, with or without cause, upon written notice to the other party. Written notice of termination may be delivered by email, overnight courier, or certified mail to the applicable address set forth in this engagement letter, or to such other address as either party may designate in writing.
Upon termination of this engagement, Ardent Capital shall remain responsible for the payment of all professional fees and disbursements incurred by the Firm through the date of termination, in accordance with the fee and billing arrangements set forth in Section 4. The Firm will render a final invoice within thirty (30) days following the effective date of termination, and payment of such final invoice shall be due in accordance with the payment terms set forth in Section 4.2.
In the event of termination, the Firm will cooperate with Ardent Capital in the orderly transition of the matter to successor counsel, including the prompt transfer of client files, work product, and other materials, subject to the Firm's right to retain copies of such materials for its records and as required by applicable law and professional regulations. The Firm's obligations under Sections 6 (Confidentiality), 9 (Limitation of Liability), and 11 (Governing Law and Dispute Resolution) shall survive the termination of this engagement.
11. Governing Law and Dispute Resolution
This engagement letter and the terms and conditions set forth herein shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.
Any dispute, controversy, or claim arising out of or relating to this engagement letter or the Firm's provision of services hereunder, including without limitation any dispute regarding the interpretation, validity, enforceability, or termination of this engagement letter, or any claim for breach of fiduciary duty, malpractice, or other professional liability, shall be resolved by binding arbitration in New York, New York, administered by the American Arbitration Association (the "AAA") in accordance with the AAA's then-current Commercial Arbitration Rules. The arbitration shall be conducted before a single arbitrator selected in accordance with the AAA's rules. The arbitrator's award shall be final and binding on the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration proceeding, unless the arbitrator determines that the prevailing party is entitled to recover its reasonable costs and fees from the non-prevailing party.
12. Acceptance and Execution
We are grateful for the opportunity to serve as antitrust counsel to Ardent Capital in connection with this important transaction. We trust that the terms set forth in this engagement letter accurately reflect our mutual understanding and agreement regarding the scope and terms of the Firm's representation.
We kindly request that Ardent Capital confirm its acceptance of the terms of this engagement letter by having an authorized representative of Ardent Capital execute the countersignature block below and return a signed copy of this letter to the undersigned at the address set forth above or by email to hbellamy@calderwoodharkness.com. The Firm may commence work upon receipt of the executed engagement letter.
If Ardent Capital does not object to the terms of this engagement letter in writing within fifteen (15) days of the date hereof, the terms set forth in this engagement letter shall be deemed accepted by Ardent Capital.
This engagement letter, together with any exhibits and attachments hereto, constitutes the entire agreement between the Firm and Ardent Capital with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, whether written or oral, with respect thereto.
We look forward to working with you and your team on this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Bellamy Partner, Antitrust & Competition Practice Group Calderwood & Harkness LLP 600 Lexington Avenue New York, New York 10022 Telephone: (212) 554-7200
Email: hbellamy@calderwoodharkness.com
AGREED AND ACCEPTED:
ARDENT CAPITAL PARTNERS III LP
By: Ardent Capital GP III LLC, its General Partner
By: Ardent Capital Management LLC, its Sole Member
By: ________
Name: Julian Desmond
Title: Co-Founder & Managing Partner
Date: January 29, 2024
Address:
399 Park Avenue, 41st Floor New York, New York 10022
Enclosures: None
cc: Priya Chandrasekar, Co-Founder & Managing Partner, Ardent Capital Management LLC cc: David Ostrander, Whitfield & Crane LLP (transaction counsel to Ardent Capital)
Timekeeper | Title | Hourly Rate
Howard Bellamy | Partner | $1,650
Monica Reyes | Senior Associate | $875
Elliot Nguyen | Associate | $725

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

AGREED AND ACCEPTED:

ARDENT CAPITAL PARTNERS III LP

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