**Calderwood & Harkness LLP Redline Comments on **
DRAFT — FOR DISCUSSION PURPOSES ONLY
Circulated to:
Thomas Kundra, Esq. and Allison Cho, Esq. Harcourt Shaw & DeVries LLP (M&A Counsel to Buyer) 51 West 52nd Street New York, NY 10019
Patricia Engelman, Esq. and Kevin Driscoll, Esq. Whitford & Gaines LLP (Counsel to Sellers / Target) 1735 Market Street, Suite 2800 Philadelphia, PA 19103
Client:
Ardent Capital Partners III LP 600 Lexington Avenue, 38th Floor New York, NY 10022
Attention: Marcus Pellegrino, Partner, Healthcare
Note: This draft reflects Calderwood & Harkness's proposed redline changes to the Seller Draft dated March 3, 2024. Additions are shown in underline; deletions in strikethrough. Bracketed comments marked [C&H Comment] denote explanatory notes for discussion and are not intended for inclusion in the final agreement.
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INTRODUCTORY TRANSMITTAL NOTE
Thomas Kundra, Esq. Harcourt Shaw & DeVries LLP 51 West 52nd Street New York, NY 10019
Patricia Engelman, Esq. Whitford & Gaines LLP 1735 Market Street, Suite 2800 Philadelphia, PA 19103
Re: Acquisition of Pinnacle Health Services Group LLC —
Dear Tom and Trish:
We write on behalf of our client, Ardent Capital Partners III LP ("Buyer"), in connection with the proposed acquisition of one hundred percent (100%) of the membership interests in Pinnacle Health Services Group LLC (the "Company," EIN 82-1947632), a Delaware limited liability company taxed as a partnership for federal income tax purposes. Calderwood & Harkness LLP has completed its review of the of the Seller Draft of the Agreement and Plan of Merger (the "Merger Agreement") circulated by Whitford & Gaines LLP on March 3, 2024.
As you are aware, the transaction is structured as a reverse merger of Ardent Healthcare Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of Ardent Healthcare Intermediate Inc. (the "Blocker"), a Delaware C-corporation, with and into the Company, with the Company surviving as a wholly owned subsidiary of the blocker. The blocker is, in turn, wholly owned by Ardent Healthcare Holdings LLC (the "Holdings LLC"), a Delaware limited liability company taxed as a partnership for federal income tax purposes. The agreed enterprise value is $412,000,000 and the equity value is $339,400,000 (enterprise value minus net debt of $72,600,000). The anticipated signing date is March 15, 2024, with an anticipated closing date of May 31, 2024, subject to satisfaction of all closing conditions, including receipt of all required state regulatory approvals.
Our redline markup focuses on the following core areas: (i)
We have endeavored to present our comments in a manner that is comprehensive yet practical, and we believe that the modifications proposed herein reflect market practice for transactions of this type and size in the healthcare services sector. In several instances, we have included explanatory notes (designated "[C&H Comment]") that are intended to facilitate discussion and are not proposed for inclusion in the definitive agreement.
We would appreciate the opportunity to schedule a
We look forward to your response.
Very truly yours,
CALDERWOOD & HARKNESS LLP
Leonard Cross Partner, Tax (212) 555-7840 lcross@calderwoodharkness.com
Robert Jansen (212) 555-7862 rjansen@calderwoodharkness.com
C&H SUMMARY OF KEY COMMENTS AND OPEN POINTS
Summary Table of Proposed Changes
The following table summarizes Calderwood & Harkness's principal proposed modifications to the Seller Draft dated March 3, 2024. All items are designated "Open" pending discussion with the parties.
Additional Open Items for Discussion
The following items require further discussion among the parties and are not yet reflected in the redline markup. Calderwood & Harkness recommends that these items be addressed in the next draft exchange or resolved during the scheduled call.
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SIGNATURE BLOCK / CIRCULATION FOOTER
DRAFT — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This document has been prepared by Calderwood & Harkness LLP in its capacity as Tax counsel to Ardent Capital Partners III LP in connection with the proposed acquisition of Pinnacle Health Services Group LLC. This document constitutes attorney work product, is protected by the attorney-client privilege, and is furnished solely for the purpose of facilitating discussion among the parties and their respective counsel. This document does not constitute a binding agreement or commitment by any party, and all terms and provisions set forth herein remain subject to negotiation and the execution of definitive documentation.
CALDERWOOD & HARKNESS LLP
One Liberty Plaza, 45th Floor New York, NY 10006
Leonard Cross Partner, Tax Telephone: (212) 555-7840
Email: lcross@calderwoodharkness.com
Robert Jansen Telephone: (212) 555-7862
Email: rjansen@calderwoodharkness.com
Circulated to:
Harcourt Shaw & DeVries LLP
Attention: Thomas Kundra, Esq. and Allison Cho, Esq.
51 West 52nd Street New York, NY 10019
Whitford & Gaines LLP
Attention: Patricia Engelman, Esq. and Kevin Driscoll, Esq.
1735 Market Street, Suite 2800 Philadelphia, PA 19103
Please direct all comments to Leonard Cross and Robert Jansen at the contact information provided above.
© 2024 Calderwood & Harkness LLP. All rights reserved. This document and the information contained herein are proprietary and confidential. Any unauthorized use, disclosure, distribution, or copying of this document or its contents, in whole or in part, is strictly prohibited.
| Matter: | Acquisition of Pinnacle Health Services Group LLC by Ardent Capital Partners III LP |
| Matter Number: | 1001-00006 |
| Engagement Number: | 1001-00006 |
Date:
Prepared by:
Calderwood & Harkness LLP
One Liberty Plaza, 45th Floor
New York, NY 10006
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| Matter Number: | 1001-00006 |
| Engagement Number: | 1001-00006 |