CONFIDENTIAL
RIDGELINE NATIONAL BANK, N.A. 225 Liberty Street New York, New York 10281
PINNACLE COMMERCIAL CREDIT CORP. 100 Federal Street Boston, Massachusetts 02110
February 10, 2025
Ardent Healthcare Holdings Inc. c/o Ardent Capital Management III LLC 599 Lexington Avenue, 34th Floor New York, New York 10022
Attention: Graham Whitfield, Managing Partner & Co-Founder
Priya Ranganathan, Partner, Healthcare Investing
Re: Commitment Letter — Senior Secured Credit Facilities (Project MedVance)
Ladies and Gentlemen:
Ridgeline National Bank, N.A. ("Ridgeline") and Pinnacle Commercial Credit Corp. ("Pinnacle" and, together with Ridgeline, the "Commitment Parties," "we," or "us") are pleased to submit this commitment letter (together with all exhibits and annexes hereto, this "Commitment Letter") to Ardent Healthcare Holdings Inc. (the "Borrower" or "you") setting forth the terms and conditions upon which the Commitment Parties are willing to provide the senior secured credit facilities described herein in connection with the Acquisition (as defined below). Capitalized terms used but not otherwise defined in this Commitment Letter shall have the meanings ascribed to them in the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet").
1. Commitment
Ridgeline (in its capacity as Administrative Agent, Lead Arranger, and Bookrunner) and Pinnacle (in its capacity as Co-Lender) are pleased to advise you of their commitment to provide to the Borrower senior secured credit facilities in an aggregate principal amount of $390,000,000 (the "Facilities"), consisting of:
(a) a $340,000,000 Senior Secured Term Loan B Facility (the "Term Loan B" or "TLB"); and
(b) a $50,000,000 Senior Secured Revolving Credit Facility (the "Revolver" and, together with the Term Loan B, the "Facilities").
The commitments described herein are being made in connection with the Borrower's proposed acquisition (the "Acquisition") of all of the outstanding equity interests of MedVance Health Systems, Inc., a Delaware corporation (the "Target"), for an aggregate purchase price of $620,000,000, pursuant to that certain Stock Purchase Agreement dated as of February 10, 2025 (the "Acquisition Agreement"), by and among the Borrower, Crestline Growth Equity Fund II LP, Ryland Family Holdings LLC, the management sellers party thereto, and MedVance Health Systems, Inc. The Acquisition, the funding of the Facilities, the equity contribution by the Sponsor (as defined below), and the other transactions contemplated hereby are collectively referred to herein as the "Transactions."
The respective commitment allocations of the Commitment Parties are as follows:
The terms and conditions of the Facilities are more fully described in the Term Sheet attached hereto as Exhibit A, which is hereby incorporated by reference and made a part of this Commitment Letter. In addition, certain fees payable in connection with the Facilities are set forth in a separate fee letter of even date herewith (the "Fee Letter") between the Commitment Parties and the Borrower, which Fee Letter is also incorporated by reference and made a part of this Commitment Letter for all purposes. In the event of any inconsistency between the terms of this Commitment Letter and the Term Sheet, the Term Sheet shall govern.
2. Titles and Roles
Ridgeline shall act as sole Administrative Agent under the Credit Agreement to be entered into among the Borrower, the Guarantors, the Administrative Agent, and the Lenders (the "Credit Agreement"). In such capacity, Ridgeline shall perform the duties and exercise the rights customarily associated with such role, including the administration of the Facilities, the maintenance of the register of Lenders, the distribution of payments, and the enforcement of remedies on behalf of the Lenders.
Ridgeline shall also act as sole Lead Arranger and sole Bookrunner with respect to the Facilities. In such capacity, Ridgeline shall have sole responsibility for the syndication of the Facilities, including the selection and approval of syndicate members, the allocation of commitments among syndicate members, the determination of the titles and roles of syndicate members, and the preparation and distribution of information to prospective syndicate lenders.
Pinnacle shall hold the title of Co-Lender. No additional agents, co-agents, arrangers, bookrunners, managers, or similar titles shall be appointed or awarded to any person without the prior written consent of both Ridgeline and Pinnacle. The Borrower agrees that no other titles will be awarded and no compensation (other than that expressly contemplated by this Commitment Letter and the Fee Letter) will be paid to any person in connection with the Facilities, in each case without the prior written consent of Ridgeline and Pinnacle.
3. Syndication
Ridgeline, in its capacity as Lead Arranger and Bookrunner, reserves the right, both prior to and after the Closing Date (as defined in the Term Sheet), to syndicate all or a portion of the Facilities to one or more financial institutions (each, an "Additional Lender") that are reasonably acceptable to the Borrower (such consent of the Borrower not to be unreasonably withheld, conditioned, or delayed); provided that (i) no syndication, assignment, or participation shall relieve Ridgeline or Pinnacle of their respective funding obligations hereunder and (ii) Ridgeline shall retain not less than the roles and titles described in Section 2 above, unless otherwise agreed.
The Borrower agrees to use commercially reasonable efforts to assist Ridgeline in completing a timely syndication of the Facilities in a manner and upon terms reasonably satisfactory to Ridgeline, which assistance shall include, without limitation:
(a) providing and causing the Target and the Sponsor to provide all information with respect to the Borrower, the Target, and the Transactions reasonably deemed necessary or advisable by Ridgeline to complete the syndication successfully, including information and projections customarily provided to prospective lenders in connection with the syndication of senior secured credit facilities for leveraged acquisition financings;
(b) using commercially reasonable efforts to ensure that the syndication efforts benefit from the existing lending and investment banking relationships of the Borrower and the Sponsor;
(c) making senior management and representatives of the Borrower, the Target, and the Sponsor available to participate in meetings, conference calls, road shows, and due diligence sessions with prospective Additional Lenders at reasonable times and locations upon reasonable prior notice;
(d) assisting in the preparation of a confidential information memorandum and other marketing materials reasonably requested by Ridgeline; and
(e) obtaining, at the Borrower's expense, at least one public corporate family rating and public facility rating for the Facilities from each of Moody's Investors Service, Inc. and S&P Global Ratings (or their respective successors), and using commercially reasonable efforts to obtain such ratings prior to the commencement of general syndication.
During a period of 30 business days following the Closing Date (the "Clear Market Period"), the Borrower shall not, and shall not permit any of its subsidiaries or affiliates to, directly or indirectly, issue, offer, sell, place, or market any debt securities or bank loan facilities (including any renewal or refinancing of existing indebtedness) in the public or private markets, whether in the United States or elsewhere, if such issuance, offering, sale, placement, or marketing would, in the reasonable judgment of Ridgeline, materially impair the primary syndication of the Facilities; provided that this restriction shall not apply to (x) drawings under the Revolver in the ordinary course of business and (y) ordinary-course trade payables and similar obligations. The Borrower's obligation to assist with the syndication process described in this Section 3 shall not constitute a condition to funding of the Facilities on the Closing Date.
4. Information
The Borrower and Ardent Capital Management III LLC (the "Ardent GP") shall have furnished, or caused to be furnished, to the Commitment Parties all financial and other information reasonably requested by the Commitment Parties in connection with the Facilities and the Transactions. The Commitment Parties hereby acknowledge receipt of, among other things, the following materials:
(a) the confidential information memorandum prepared by Ridgeline in connection with the syndication of the Facilities;
(b) the financial model prepared by Ardent Capital Management III LLC (the "Sponsor Model"), including base case, upside, and downside scenarios, together with supporting assumptions;
(c) the quality of earnings report prepared by Blackwell Thornton LLP, dated January 15, 2025, with respect to the Target's financial performance for the trailing twelve-month period ended September 30, 2024;
(d) the audited consolidated financial statements of the Target for the fiscal years ended December 31, 2022, December 31, 2023, and December 31, 2024, each audited by Prumvane & Reese LLP; and
(e) such other financial, business, and legal information concerning the Borrower, the Target, the Sponsor, and the Transactions as the Commitment Parties have reasonably requested.
The Borrower represents and warrants that all written information (other than projections, pro forma financial information, and information of a general economic or industry-specific nature) that has been or will be made available to the Commitment Parties by or on behalf of the Borrower or any of its representatives in connection with the Transactions (the "Borrower Information"), when taken as a whole, does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were made (giving effect to all supplements and updates thereto). The Borrower acknowledges that the Commitment Parties may share the Borrower Information and other information with prospective Additional Lenders and other syndicate participants, subject to customary confidentiality arrangements (including click-through confidentiality agreements for electronic data rooms).
5. Conditions Precedent to Funding
The funding of the Facilities on the Closing Date shall be subject solely to the satisfaction (or waiver in writing by the Commitment Parties) of the conditions set forth in this Section 5 (collectively, the "Funding Conditions"). For the avoidance of doubt, the Funding Conditions set forth below are the only conditions to the obligations of the Commitment Parties to fund the Facilities on the Closing Date, and no additional conditions shall be implied.
5(a). Acquisition Agreement
The Acquisition Agreement shall have been executed and delivered by all parties thereto and shall be in full force and effect as of the Closing Date. The Acquisition shall be consummated substantially simultaneously with, and as a condition to, the initial funding under the Facilities, in accordance with the terms and conditions of the Acquisition Agreement, without giving effect to any amendment, modification, supplement, or waiver thereof (or any consent thereunder) that is materially adverse to the interests of the Lenders in their capacity as such, unless such amendment, modification, supplement, waiver, or consent has been consented to by Ridgeline (such consent not to be unreasonably withheld, conditioned, or delayed). The aggregate purchase price for the Acquisition, including any purchase price adjustments, earn-out obligations, or deferred consideration, shall not exceed $620,000,000 in the aggregate.
5(b). Absence of Material Adverse Effect
Since September 30, 2024 (being the reference date specified in the Acquisition Agreement), no event, circumstance, condition, development, occurrence, or change shall have occurred that, individually or in the aggregate, has had or would reasonably be expected to have a "Material Adverse Effect" as such term is defined in the Acquisition Agreement as in effect on the date hereof, without giving effect to any amendment, modification, supplement, or waiver of such definition not consented to by Ridgeline (such consent not to be unreasonably withheld, conditioned, or delayed).
5(c). Accuracy of Specified Representations
(i) The "Specified Acquisition Agreement Representations" shall be true and correct to the extent required by the Acquisition Agreement as a condition to the Borrower's obligation to consummate the Acquisition. As used herein, "Specified Acquisition Agreement Representations" means those representations and warranties made by or on behalf of the Target and the sellers under the Acquisition Agreement that are material to the interests of the Lenders in their capacity as such (but only to the extent that the Borrower (or any of its affiliates) has the right to decline to consummate the Acquisition as a result of a breach of such representations and warranties).
(ii) The "Specified Representations" (as defined in the Term Sheet) made by or on behalf of the Borrower and each Guarantor in the Credit Agreement shall be true and correct in all material respects (or, in the case of any Specified Representation that is qualified by materiality or material adverse effect, in all respects) on and as of the Closing Date (or, to the extent any such Specified Representation relates to a specific date, as of such date).
5(d). Solvency. Ridgeline shall have received a solvency certificate, dated the Closing Date, from the Chief Financial Officer (or equivalent senior financial officer) of the Borrower, in form and substance reasonably satisfactory to Ridgeline, certifying that, after giving effect to the consummation of the Acquisition, the funding of the Facilities, the equity contribution by the Sponsor, the repayment of existing indebtedness of the Target, and the payment of all fees, expenses, and other transaction costs on the Closing Date, the Borrower and its subsidiaries, on a consolidated basis, are Solvent (as defined in the Term Sheet).
5(e). Equity Contribution
Ardent Capital Partners III LP (the "Sponsor") shall have made, or shall substantially simultaneously with the initial funding of the Facilities make, an equity contribution to the Borrower in cash in an amount not less than $290,000,000 (the "Equity Contribution"), representing at least 46.8% of the total sources of funds for the Transactions. The Equity Contribution, together with the net proceeds of the Term Loan B, and together with any cash on the balance sheet of the Target available at Closing, shall be sufficient in the aggregate to (a) fund the aggregate purchase price for the Acquisition, (b) retire and satisfy in full the Target's existing indebtedness at Granton Savings Bank, N.A. (in the approximate amount of $41,300,000), (c) pay all fees, costs, premiums (if any), and expenses incurred in connection with the Transactions, and (d) provide working capital to the Borrower and its subsidiaries following the Closing Date.
5(f). Credit Documentation
The definitive Credit Agreement (Reference No. RNB-HC-2025-0418) and related Loan Documents (including, without limitation, the Security Agreement, the Pledge Agreement, the Guaranty Agreement, and any ancillary documents contemplated thereby) shall have been executed and delivered by all parties thereto, in form and substance consistent with the Term Sheet and this Commitment Letter and otherwise reasonably satisfactory to Ridgeline and the Borrower. Uniform Commercial Code lien searches, UCC-1 financing statement filings, intellectual property security agreement filings with the United States Patent and Trademark Office and the United States Copyright Office, and all other filings, registrations, and recordings necessary to create and perfect the security interests contemplated by the Loan Documents shall have been completed or arrangements reasonably satisfactory to Ridgeline shall have been made for the completion thereof promptly following the Closing Date. Customary legal opinions of counsel to the Borrower and the Guarantors (Calderwood & Harkness LLP) shall have been delivered to the Administrative Agent and the Lenders, covering such matters as are customary for transactions of this type.
5(g). Security and Guarantees
The Borrower shall have granted, or shall substantially simultaneously grant, to the Administrative Agent (for the ratable benefit of the Lenders) a first-priority perfected security interest (subject only to customary permitted liens and exceptions as set forth in the Term Sheet) in substantially all assets of the Borrower and each Guarantor, including, without limitation, accounts receivable, inventory, equipment, intellectual property, general intangibles, contract rights, deposit accounts, securities accounts, investment property, instruments, chattel paper, letter-of-credit rights, commercial tort claims, and equity interests in direct subsidiaries (limited to 65% of the voting equity interests of any first-tier foreign subsidiary), in each case to the extent such security interests can be perfected by the filing of UCC financing statements, the delivery of certificated securities, or the entry into control agreements, subject to the exceptions set forth in the Term Sheet.
Each direct and indirect domestic subsidiary of the Borrower existing on the Closing Date (including the Target and each of its domestic subsidiaries following consummation of the Acquisition) shall have executed and delivered the Guaranty Agreement, pursuant to which such subsidiary shall have unconditionally guaranteed the payment and performance of all obligations of the Borrower under the Credit Agreement and the other Loan Documents.
5(h). Regulatory Approvals
All governmental and regulatory approvals, consents, authorizations, and filings necessary or advisable in connection with the consummation of the Acquisition and the Facilities shall have been obtained, made, or given, and shall be in full force and effect, including, without limitation:
(i) early termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the rules and regulations promulgated thereunder (reference HSR filing reference no. HSR-2024-7231; early termination was granted on January 22, 2025); and
(ii) state healthcare licensure transfer approvals, change-of-ownership notifications, and related regulatory consents required in connection with the change of control of the Target and its subsidiaries in the states of Tennessee, Alabama, Georgia, and Kentucky (or, in the alternative, evidence reasonably satisfactory to Ridgeline that such approvals are not required or that the Target and its subsidiaries may lawfully operate pending receipt of such approvals).
5(i). Insurance. The Administrative Agent shall have received evidence of insurance coverage in amounts, with deductibles, and from carriers reasonably satisfactory to Ridgeline, including, without limitation, property insurance, casualty insurance, comprehensive general liability insurance, professional liability (medical malpractice) insurance, workers' compensation insurance, and directors' and officers' liability insurance, in each case naming the Administrative Agent as additional insured and lender loss payee, as applicable, on terms and in form customary for financings of this type.
5(j). No Default
No Event of Default or Default (each as defined in the Credit Agreement) shall exist on the Closing Date, or would result from the initial funding of the Facilities or the consummation of the other Transactions on the Closing Date.
5(k). Fees and Expenses
All fees, costs, and expenses due and payable on the Closing Date pursuant to this Commitment Letter, the Fee Letter, and the Credit Agreement shall have been paid, or shall be paid substantially simultaneously with the initial funding of the Facilities on the Closing Date (which amounts may, at the Borrower's election, be funded from the proceeds of the Term Loan B). Such fees and expenses shall include, without limitation, the arrangement fee, the upfront fee, the agency fee, the commitment fee, and all reasonable and documented out-of-pocket expenses of the Commitment Parties and the Administrative Agent (including the fees, charges, and disbursements of legal counsel to the Commitment Parties) as required by Section 9 of this Commitment Letter.
5(l). Payoff of Existing Indebtedness
The Borrower (or the Target, as applicable) shall have delivered to the Administrative Agent a customary payoff letter (in form and substance reasonably satisfactory to Ridgeline) from Granton Savings Bank, N.A. with respect to the full satisfaction and discharge of the Target's existing approximately $41,300,000 term loan facility, together with wire transfer instructions for the delivery of payoff funds and arrangements for the execution and filing of UCC-3 termination statements and the delivery of lien release documentation, in each case to be effective upon receipt of payoff funds on the Closing Date. The Borrower shall ensure that, upon receipt of such payoff funds, all liens and security interests of Granton Savings Bank, N.A. in the assets of the Target and its subsidiaries shall be released and terminated.
6. "Certain Funds" / Limited Conditionality
The Commitment Parties hereby confirm that the Funding Conditions set forth in Section 5 are the only conditions to the obligations of the Commitment Parties to fund the Facilities on the Closing Date, and there are no conditions (whether implied or otherwise) to funding beyond those expressly set forth in Section 5. Without limiting the foregoing, the terms and conditions of this Commitment Letter (including the Term Sheet) shall be interpreted in a manner consistent with the "limited conditionality" or "certain funds" provisions customary for acquisition financings of this type and consistent with the Documentation Principles (as defined in the Term Sheet). It is the intent of the Commitment Parties that the only representations and warranties the accuracy of which shall be a condition to the initial funding on the Closing Date are the Specified Acquisition Agreement Representations and the Specified Representations, and the only default (or event of default) the non-existence of which shall be a condition to the initial funding on the Closing Date is the absence of a payment or bankruptcy Event of Default (in each case as determined after giving pro forma effect to the consummation of the Transactions).
In the event of any ambiguity, inconsistency, or conflict between the provisions of this Commitment Letter, the Term Sheet, or the Credit Agreement with respect to the conditions to funding on the Closing Date, the limited conditionality principle described in this Section 6 shall govern.
7. Duration and Termination
7(a). Expiration. This Commitment Letter and the commitments and other obligations of the Commitment Parties hereunder shall automatically expire and terminate at 5:00 p.m. (New York City time) on the earliest of:
(i) April 30, 2025 (the "Outside Date"), if the Closing Date shall not have occurred on or before such date;
(ii) the closing of the Acquisition without the use of the Facilities contemplated hereby;
(iii) the termination of the Acquisition Agreement in accordance with its terms, whether by mutual consent of the parties thereto, by the exercise of a termination right, or otherwise;
(iv) the closing of the Acquisition with the use of alternative financing (whether from other lenders, through the issuance of debt securities, or otherwise) without the prior written consent of the Commitment Parties; or
(v) written notice of termination delivered by the Borrower to the Commitment Parties.
Upon any such expiration or termination, the Commitment Parties shall have no further obligations hereunder (except as provided in Section 7(b) below), and all commitments hereunder shall be automatically reduced to zero.
7(b). Surviving Provisions
The provisions of Section 8 (Indemnification), Section 9 (Expenses), Section 10 (Confidentiality), Section 11 (Limitation of Liability), Section 14 (Governing Law), and Section 15 (Jurisdiction; Waiver of Jury Trial) shall survive any expiration or termination of this Commitment Letter and shall remain in full force and effect regardless of whether the Closing Date occurs, until the latest of (x) the date that is two years following the date of such expiration or termination, (y) with respect to Section 8, the date on which all applicable statutes of limitation have expired, and (z) with respect to Section 10, the date that is two years following the date of such expiration or termination.
8. Indemnification
The Borrower and the Sponsor (jointly and severally) shall indemnify, defend, and hold harmless each Commitment Party and each of their respective affiliates, and the directors, officers, employees, agents, advisors, representatives, and controlling persons of each of the foregoing (each, an "Indemnified Person"), from and against any and all losses, claims, damages, liabilities, costs, and expenses (including, without limitation, reasonable and documented fees, charges, and disbursements of one primary counsel for all Indemnified Persons taken as a whole, and, if necessary, one local counsel in each relevant jurisdiction, and, solely in the case of an actual or perceived conflict of interest, one additional counsel for each group of affected Indemnified Persons similarly situated) (collectively, "Losses"), joint or several, that may be incurred by, imposed upon, or asserted against any Indemnified Person arising out of, relating to, or in connection with:
(a) this Commitment Letter, the Fee Letter, the Term Sheet, the Credit Agreement, the Loan Documents, and the Transactions;
(b) the Facilities and the use of proceeds thereof;
(c) the Acquisition and the other transactions contemplated by the Acquisition Agreement; or
(d) any claim, litigation, investigation, or proceeding (whether or not such Indemnified Person is a party thereto and whether or not such claim, litigation, investigation, or proceeding is brought by a third party or by the Borrower or any of its affiliates) relating to any of the foregoing;
provided, however, that no Indemnified Person shall be entitled to indemnification under this Section 8 to the extent that such Losses are determined by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnified Person (or any of its Related Indemnified Persons). The Borrower and the Sponsor shall not be liable for any settlement of any claim, litigation, investigation, or proceeding effected without the Borrower's prior written consent (which consent shall not be unreasonably withheld, conditioned, or delayed), but if settled with such consent, or if there is a final judgment for the plaintiff, the Borrower and the Sponsor agree to indemnify each Indemnified Person from and against any and all Losses by reason of such settlement or judgment.
9. Expenses
Whether or not the Closing Date occurs or any credit is extended under the Facilities, the Borrower shall pay or reimburse on the Closing Date (or, if the Closing Date does not occur, promptly upon demand by the applicable Commitment Party) all reasonable and documented out-of-pocket costs and expenses of the Commitment Parties and the Administrative Agent incurred in connection with the Facilities, the preparation, negotiation, execution, and delivery of this Commitment Letter, the Fee Letter, the Credit Agreement, the Loan Documents, and any amendments, modifications, waivers, or consents thereunder, and the syndication of the Facilities, including, without limitation:
(a) fees, charges, and disbursements of legal counsel to Ridgeline and the Administrative Agent;
(b) due diligence costs, including fees of consultants, appraisers, and other advisors;
(c) Uniform Commercial Code, tax, judgment, bankruptcy, and intellectual property lien search fees in all relevant jurisdictions;
(d) appraisal fees, environmental assessment fees, and field examination fees;
(e) syndication expenses, including costs of lender meetings, road shows, and travel;
(f) printing, reproduction, binding, and telecommunication costs; and
(g) filing fees, recording taxes, and other charges imposed by governmental authorities.
The aggregate amount of pre-Closing Date fees and disbursements of legal counsel to Ridgeline shall not exceed $500,000 (exclusive of filing fees, recording charges, and other governmental charges and disbursements), unless the scope of the Transactions or the documentation required in connection therewith materially expands beyond that contemplated as of the date hereof, in which case such cap shall be subject to mutual agreement of the parties. For the avoidance of doubt, the foregoing cap applies only to legal counsel fees and does not limit the reimbursement of other categories of expenses described in this Section 9.
10. Confidentiality
Each party hereto agrees to maintain the confidentiality of this Commitment Letter, the Fee Letter, the Term Sheet, and the terms and conditions set forth herein and therein, and shall not disclose the contents thereof (or the contents of any draft or term sheet related thereto) to any person, except:
(i) to its own officers, directors, employees, members, partners, accountants, attorneys, financial advisors, and other professional advisors, in each case on a "need-to-know" basis and subject to their agreement to maintain the confidentiality of such information;
(ii) as required by applicable law, regulation, or judicial or administrative process (including by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand, or other similar process), provided that the disclosing party shall, to the extent permitted by law and practicable, provide prior written notice of such required disclosure to the other parties;
(iii) to the extent necessary in connection with the exercise of any remedy under this Commitment Letter, the Fee Letter, or the Loan Documents;
(iv) to prospective Additional Lenders and other syndicate participants, subject to their execution of customary confidentiality agreements or "click-through" confidentiality acknowledgments;
(v) to the extent required or permitted by the Acquisition Agreement (including disclosure to the sellers, the Target, and their respective representatives); or
(vi) with the prior written consent of the other parties hereto.
Notwithstanding the foregoing, the Borrower may disclose the existence of the commitments hereunder and the aggregate amount thereof (but not the specific economic terms, fee arrangements, or flex provisions) to any person. The provisions of this Section 10 shall not apply to information that (a) is or becomes publicly available other than as a result of a breach of this Section 10, (b) is or becomes available to the receiving party on a non-confidential basis from a source other than the disclosing party, or (c) is independently developed by the receiving party without reference to confidential information.
11. Limitation of Liability
In no event shall any Commitment Party, or any of its affiliates, directors, officers, employees, agents, advisors, or representatives, or the Borrower or any of its affiliates, directors, officers, employees, agents, advisors, or representatives, be liable for any indirect, special, punitive, exemplary, or consequential damages (including, without limitation, any loss of profits, business, or anticipated savings) in connection with this Commitment Letter, the Fee Letter, the Facilities, or any of the Transactions, regardless of the form of action and whether or not any such damages were foreseeable; provided, however, that the foregoing limitation shall not limit the Borrower's or the Sponsor's indemnification obligations under Section 8 to the extent that such indirect, special, punitive, exemplary, or consequential damages are included in any third-party claim against an Indemnified Person for which indemnification is available under Section 8.
12. Assignments
The commitments and obligations of the Commitment Parties hereunder are not assignable by any party hereto without the prior written consent of each of the other parties hereto, and any purported assignment without such consent shall be null and void; except that:
(a) Ridgeline or Pinnacle may, without the consent of the Borrower, assign all or a portion of its commitments and obligations hereunder to one or more of its affiliates; provided that no such assignment shall relieve Ridgeline or Pinnacle (as applicable) of its funding obligations hereunder;
(b) in connection with the syndication of the Facilities contemplated by Section 3 hereof, Ridgeline or Pinnacle may assign all or a portion of its commitments to one or more eligible assignee lenders reasonably acceptable to the Borrower; provided that no such assignment shall relieve Ridgeline or Pinnacle (as applicable) of its funding obligations hereunder prior to and including the Closing Date; and
(c) the Borrower may not assign its rights or obligations under this Commitment Letter without the prior written consent of each of the Commitment Parties.
13. Amendments; No Waiver
This Commitment Letter (including the Term Sheet) may not be amended, supplemented, or otherwise modified except by a written instrument signed by each of the Commitment Parties and the Borrower. No failure or delay by any party hereto in exercising any right, power, or privilege under this Commitment Letter shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege hereunder. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that any party would otherwise have at law or in equity.
14. Governing Law
This Commitment Letter and any claim, controversy, dispute, or cause of action (whether in contract, tort, or otherwise) based upon, arising out of, or relating to this Commitment Letter and the transactions contemplated hereby shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts-of-law principles thereof (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
15. Jurisdiction; Waiver of Jury Trial
Each party hereto irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan, the County of New York, and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in any action, suit, or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, or the transactions contemplated hereby or thereby, and each party hereto irrevocably and unconditionally agrees that all claims in respect of any such action, suit, or proceeding may be heard and determined in such New York state court or, to the fullest extent permitted by applicable law, in such federal court. Each party hereto agrees that a final judgment in any such action, suit, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS COMMITMENT LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
16. Counterparts; Electronic Execution
This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document (including Brightwater Software, Ashford Health IT, or similar platforms) shall be effective as delivery of a manually executed original counterpart thereof.
17. Patriot Act / BSA Notice
Each of Ridgeline and Pinnacle hereby notifies the Borrower that, pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56, as amended) and the Bank Secrecy Act (31 U.S.C. §§ 5311 et seq.), as amended, and the regulations promulgated thereunder, each Lender is required to obtain, verify, and record information that identifies the Borrower, the Guarantors, and each other Loan Party, which information includes the name, address, tax identification number, and other information that will allow each Lender to identify such persons in accordance with said acts. The Borrower agrees to provide, and to cause its subsidiaries to provide, such information and documentation as may be reasonably requested by any Lender for purposes of compliance with applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Bank Secrecy Act.
For reference, the Borrower's Employer Identification Number (EIN) is 93-2047861.
18. Entire Agreement
This Commitment Letter (together with the Term Sheet attached hereto as Exhibit A, the Conditions Annex attached hereto as Exhibit B, and the Fee Letter of even date herewith) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, communications, discussions, understandings, and agreements (whether written or oral) among the parties with respect to such subject matter. There are no representations, warranties, covenants, or agreements among the parties relating to the subject matter hereof other than those expressly set forth or referred to in this Commitment Letter, the Term Sheet, the Conditions Annex, and the Fee Letter.
19. Acceptance
We are pleased to have the opportunity to work with you and the Sponsor on this important transaction. If the foregoing terms and conditions are acceptable to you, please evidence your acceptance by executing and returning to us the enclosed copy of this Commitment Letter (together with the Fee Letter) no later than 5:00 p.m. (New York City time) on February 10, 2025. This offer will automatically expire if the Commitment Parties have not received a fully executed copy of this Commitment Letter and the Fee Letter by such time.
We look forward to working with you on Project MedVance.
[Remainder of Page Intentionally Left Blank — Signature Pages Follow]
SIGNATURE PAGE TO COMMITMENT LETTER (PROJECT MEDVANCE)
Very truly yours,
RIDGELINE NATIONAL BANK, N.A. as Administrative Agent, Lead Arranger, Bookrunner, and a Lender
By: ________
Name: Laura Fitzpatrick
Title: Managing Director, Healthcare Lending
Date: February 10, 2025
PINNACLE COMMERCIAL CREDIT CORP. as a Lender
By: ________
Name: David R. Chisholm
Title: Senior Vice President, Sponsor Finance
Date: February 10, 2025
ACCEPTED AND AGREED as of the date first written above:
ARDENT HEALTHCARE HOLDINGS INC.
By: ________
Name: Graham Whitfield
Title: President
Date: February 10, 2025
Acknowledged solely with respect to the obligations of the Sponsor set forth in Sections 5(e) and 8 hereof:
ARDENT CAPITAL PARTNERS III LP
By: Ardent Capital Management III LLC, its General Partner
By: ________
Name: Graham Whitfield
Title: Managing Partner & Co-Founder
Date: February 10, 2025
EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS (TERM SHEET)
Project MedVance — Senior Secured Credit Facilities
February 10, 2025
CONFIDENTIAL
This Summary of Terms and Conditions (this "Term Sheet") is attached to and forms part of the Commitment Letter dated February 10, 2025 (the "Commitment Letter"), among Ridgeline National Bank, N.A. ("Ridgeline"), Pinnacle Commercial Credit Corp. ("Pinnacle"), and Ardent Healthcare Holdings Inc. (the "Borrower"). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Commitment Letter. This Term Sheet is subject in all respects to the terms and conditions of the Commitment Letter.
I. Parties.
II. Facilities.
A. Term Loan B. Type: Senior secured first lien term loan (the "Term Loan B" or "TLB").
Aggregate Principal Amount: $340,000,000.
Availability: The Term Loan B shall be available in a single draw on the Closing Date. Amounts repaid or prepaid under the Term Loan B may not be re-borrowed.
Maturity: Seven (7) years from the Closing Date (the "TLB Maturity Date"). Based on a target Closing Date of April 18, 2025, the TLB Maturity Date would be April 18, 2032.
Amortization: The Term Loan B shall amortize in equal quarterly installments in an aggregate annual amount equal to 1.00% of the original principal amount of the Term Loan B (i.e., $3,400,000 per annum, or $850,000 per quarter), payable on the last business day of each March, June, September, and December, commencing with the first full fiscal quarter ending after the Closing Date. The remaining outstanding principal balance of the Term Loan B shall be due and payable in full on the TLB Maturity Date.
Interest Rate: At the Borrower's election, the Term Loan B shall bear interest at a rate per annum equal to:
(a) Term SOFR (as published by CME Group Benchmark Administration Limited (or a successor administrator)) for interest periods of 1, 3, or 6 months, as selected by the Borrower, with a floor of 0.50% per annum, plus an applicable margin of 4.25% (425 basis points) per annum; or
(b) an ABR (Alternate Base Rate) equal to the greatest of (i) the Federal Funds Rate plus 0.50%, (ii) the Prime Rate as published by The Wall Street Journal, and (iii) one-month Term SOFR plus 1.00%, in each case with a floor of 1.50% per annum, plus an applicable margin of 3.25% (325 basis points) per annum.
Interest shall be payable in arrears on the last business day of each interest period (or, in the case of interest periods longer than three months, on the last business day of each three-month interval and on the last day of such interest period), and on the TLB Maturity Date.
Default Rate: Upon the occurrence and during the continuance of any Event of Default, all outstanding obligations under the Term Loan B shall bear interest at an additional 2.00% per annum above the otherwise applicable rate.
SOFR Adjustment: In addition to the applicable margin, the following credit spread adjustments shall apply to Term SOFR:
Optional Prepayment: The Term Loan B may be prepaid at any time, in whole or in part, in minimum principal amounts of $1,000,000 (or, if less, the remaining outstanding principal balance), without premium or penalty, upon not less than three (3) business days' prior written notice (one (1) business day for ABR loans) to the Administrative Agent; except that any voluntary prepayment of the Term Loan B made within the first six (6) months following the Closing Date in connection with a repricing transaction (i.e., a refinancing or re-pricing of the Term Loan B that has the primary purpose of reducing the effective interest rate or weighted average yield applicable thereto) shall be subject to a prepayment premium equal to 1.00% of the principal amount so prepaid (the "Soft-Call Premium"). For the avoidance of doubt, no Soft-Call Premium shall be payable in connection with any change of control, transformative acquisition, or similar event.
Mandatory Prepayment: The Term Loan B shall be subject to mandatory prepayment as follows:
(i) Asset Sales: 100% of the net cash proceeds received by the Borrower or any of its subsidiaries from any sale, transfer, or other disposition of assets outside the ordinary course of business (subject to customary reinvestment rights permitting reinvestment of such proceeds within 365 days (or, if a binding commitment is entered into within such 365-day period, 545 days) in assets useful in the business of the Borrower and its subsidiaries), subject to a de minimis threshold of $5,000,000 per fiscal year below which no mandatory prepayment shall be required.
(ii) Debt Issuances: 100% of the net cash proceeds received by the Borrower or any of its subsidiaries from the issuance or incurrence of any indebtedness not otherwise permitted under the Credit Agreement.
(iii) Excess Cash Flow: Commencing with the first full fiscal year ending after the Closing Date, 50% of Excess Cash Flow (as defined below) for each fiscal year; provided that the applicable percentage shall step down to (A) 25% when the Total Net Leverage Ratio (as defined below) as of the last day of such fiscal year is less than or equal to 4.50:1.00 and (B) 0% when the Total Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 3.75:1.00. No Excess Cash Flow prepayment shall be required if the Excess Cash Flow for the applicable fiscal year is less than $2,500,000 (the "ECF De Minimis Threshold"). Excess Cash Flow mandatory prepayments shall be due within ten (10) business days after the delivery of audited financial statements for the applicable fiscal year.
All mandatory prepayments shall be applied to the remaining scheduled amortization installments of the Term Loan B in direct order of maturity (or, at the Borrower's election, pro rata).
B. Revolving Credit Facility. Type: Senior secured first lien revolving credit facility (the "Revolver").
Aggregate Commitment Amount: $50,000,000.
Sub-limits: The Revolver shall include a letter of credit sub-facility in an aggregate face amount not to exceed $10,000,000 and a swingline sub-facility in an aggregate principal amount not to exceed $5,000,000. Ridgeline (or an affiliate thereof) shall act as the issuing bank with respect to letters of credit and as the swingline lender.
Availability: Revolving loans may be drawn and repaid from time to time from the Closing Date until the Revolver Maturity Date (as defined below), subject to the conditions that (a) no Event of Default shall exist at the time of any borrowing and (b) the representations and warranties of the Borrower and the Guarantors set forth in the Credit Agreement shall be true and correct in all material respects (or, where qualified by materiality, in all respects) at the time of and after giving effect to such borrowing. Each borrowing under the Revolver shall be in a minimum principal amount of $1,000,000 (or $500,000 in the case of swingline loans).
Maturity: Five (5) years from the Closing Date (the "Revolver Maturity Date"). Based on a target Closing Date of April 18, 2025, the Revolver Maturity Date would be April 18, 2030.
Interest Rate: At the Borrower's election, revolving loans shall bear interest at a rate per annum equal to:
(a) Term SOFR (with a floor of 0.00%) for interest periods of 1, 3, or 6 months, as selected by the Borrower, plus an applicable margin of 3.75% (375 basis points) per annum; or
(b) ABR (as defined above, with a floor of 1.00%) plus an applicable margin of 2.75% (275 basis points) per annum.
Commitment Fee: The Borrower shall pay a commitment fee on the average daily undrawn and uncancelled commitments under the Revolver at a rate of 0.50% per annum, payable quarterly in arrears, commencing with the first full fiscal quarter ending after the Closing Date; provided that the commitment fee rate shall step down to 0.375% per annum for any quarter during which the average utilization under the Revolver (including outstanding letters of credit) exceeds 50% of the Revolver commitment.
Letter of Credit Fees: A per annum fee on the aggregate undrawn face amount of outstanding letters of credit equal to the applicable Term SOFR margin under the Revolver, payable quarterly in arrears, plus a fronting fee of 0.125% per annum payable to the issuing bank and customary issuance and administration charges.
Use of Proceeds: Revolving loans shall be used for working capital and general corporate purposes of the Borrower and its subsidiaries (including permitted capital expenditures); provided that revolving loans shall not be used to finance any acquisition with a purchase price exceeding $15,000,000 individually without the prior consent of the Required Lenders.
III. Use of Proceeds — Term Loan B
The proceeds of the Term Loan B shall be used on the Closing Date, together with the Equity Contribution and cash on hand, as follows:
(a) to fund a portion of the aggregate purchase price for the Acquisition ($620,000,000);
(b) to retire and repay in full all existing indebtedness of the Target at Granton Savings Bank, N.A. (in the approximate amount of $41,300,000);
(c) to pay all fees, costs, premiums (if any), and expenses incurred in connection with the Acquisition, the Facilities, and the other Transactions; and
(d) to provide working capital to the Borrower and its subsidiaries.
IV. Security. Collateral: First-priority perfected security interest (subject only to customary permitted liens and exceptions) in substantially all tangible and intangible assets of the Borrower and each Guarantor, including, without limitation:
• Accounts receivable
• Inventory