ESCROW AGREEMENT
Dated as of February 12, 2025
among
ARDENT HEALTHCARE HOLDINGS INC., a Delaware corporation,
MARCUS DELGADO, solely in his capacity as Seller Representative,
and
CONTINENTAL FIDUCIARY TRUST COMPANY, a New York trust company, as Escrow Agent
Escrow Account No. CFT-ESC-2025-00327
CONFIDENTIAL — EXECUTION VERSION
TABLE OF CONTENTS
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is made and entered into as of February 12, 2025, by and among Ardent Healthcare Holdings Inc., a Delaware corporation (the "Purchaser"), Marcus Delgado, solely in his capacity as Seller Representative (as defined herein) (the "Seller Representative"), and Continental Fiduciary Trust Company, a New York trust company (the "Escrow Agent"). The Purchaser, the Seller Representative, and the Escrow Agent are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Purchaser, the sellers identified therein (collectively, the "Sellers"), and Marcus Delgado, in his capacity as Seller Representative, are parties to that certain Stock Purchase Agreement, dated as of February 10, 2025 (as may be amended, supplemented, or otherwise modified from time to time, the "Purchase Agreement"), pursuant to which the Purchaser is acquiring all of the issued and outstanding shares of capital stock of MedVance Health Systems, Inc., a Delaware corporation (the "Company"), for an aggregate purchase price of Six Hundred Twenty Million Dollars ($620,000,000) (the "Purchase Price");
WHEREAS, the Purchase Agreement requires, as a condition to the Closing (as defined in the Purchase Agreement), the deposit of Forty-Nine Million Six Hundred Thousand Dollars ($49,600,000) (the "Escrow Amount"), representing eight percent (8%) of the Purchase Price, into an escrow account to be established and maintained in accordance with this Agreement, for the purpose of securing the indemnification obligations of the Sellers under Article IX of the Purchase Agreement;
WHEREAS, the Purchase Agreement designates Marcus Delgado, in his capacity as a partner of Crestline Growth Equity Fund II LP, a Delaware limited partnership ("Crestline"), as the Seller Representative authorized to act on behalf of all Sellers with respect to the Escrow Fund (as defined herein), including, without limitation, the authority to give and receive all notices, to deliver and execute all documents, and to take all actions on behalf of the Sellers in connection with this Agreement;
WHEREAS, Continental Fiduciary Trust Company, a New York trust company, has agreed to serve as Escrow Agent upon the terms and conditions set forth herein; and
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 *Defined Terms.* As used in this Agreement, the following terms shall have the meanings set forth below:
"Business Day" means any day other than a Saturday, a Sunday, or any day on which commercial banking institutions in New York, New York are authorized or required by applicable law or executive order to close.
"Claim Notice" means a written notice delivered by the Purchaser to the Escrow Agent and the Seller Representative asserting a claim for indemnification against the Escrow Fund, which notice shall specify in reasonable detail (i) the nature and factual basis of the claim asserted, (ii) the section or sections of the Purchase Agreement pursuant to which such claim arises, and (iii) the amount claimed (or, if the exact amount is not then determinable, a reasonable good-faith estimate thereof, together with an explanation as to why the exact amount cannot be determined at such time).
"Disputed Claim" means any Claim Notice as to which the Seller Representative has delivered a Dispute Notice within the Dispute Period in accordance with Section 4.1(b) of this Agreement.
"Dispute Notice" means a written notice delivered by the Seller Representative to the Escrow Agent and the Purchaser objecting, in whole or in part, to a Claim Notice, which notice shall specify in reasonable detail (i) the basis for such objection, (ii) the portion of the claimed amount that is disputed, and (iii) to the extent available, any countervailing facts or circumstances supporting such objection.
"Dispute Period" means the period of thirty (30) Business Days following receipt by the Seller Representative of a Claim Notice; provided that, for the avoidance of doubt, the Dispute Period shall commence on the Business Day immediately following the date on which the Seller Representative actually receives such Claim Notice in accordance with Article 7.
"Escrow Account" means the segregated escrow account established and maintained by the Escrow Agent bearing account number CFT-ESC-2025-00327, at the offices of Continental Fiduciary Trust Company, located at 111 Wall Street, New York, New York 10005.
"Escrow Earnings" means all interest, dividends, gains, and other income or proceeds earned on or derived from the investment or reinvestment of the Escrow Fund in Permitted Investments in accordance with Article 3 of this Agreement.
"Escrow Fund" means, at any time, an amount equal to the Escrow Amount, together with all Escrow Earnings accrued thereon, less any amounts previously distributed from the Escrow Account in accordance with the terms of this Agreement.
"Final Release Date" means October 18, 2026 (the date that is eighteen (18) months following the Closing Date of April 18, 2025, as defined in the Purchase Agreement), or such later date as may be applicable with respect to Pending Claims as provided in Section 4.2 of this Agreement.
"Holdback Amount" has the meaning set forth in Section 4.2(b) of this Agreement.
"Joint Written Instructions" means written instructions signed by both an authorized representative of the Purchaser and the Seller Representative (or his duly authorized successor) directing the Escrow Agent to take a specified action with respect to the Escrow Fund, including without limitation the investment, distribution, or release of all or any portion of the Escrow Fund.
"Pending Claim" means any Claim Notice that has been delivered to the Escrow Agent prior to the Final Release Date and as to which a final resolution or Joint Written Instructions have not yet been received by the Escrow Agent as of the Final Release Date.
"Permitted Investments" has the meaning set forth in Section 3.2 of this Agreement.
"Pro Rata Shares" means the respective proportionate shares of each Seller in the Escrow Fund, as set forth in Annex I to the Purchase Agreement and summarized as follows: Crestline Growth Equity Fund II LP — 68.2%; Ryland Family Holdings LLC — 19.5%; and the management rollover participants identified in Annex I to the Purchase Agreement — 12.3% in the aggregate.
"Purchase Agreement" means that certain Stock Purchase Agreement, dated as of February 10, 2025, by and among the Purchaser, the Sellers, and the Seller Representative, as may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
"Sellers" means the sellers identified in the Purchase Agreement, including Crestline Growth Equity Fund II LP, a Delaware limited partnership, Ryland Family Holdings LLC, a Tennessee limited liability company, and the management rollover participants identified in Annex I to the Purchase Agreement.
Section 1.2 *Rules of Construction.* For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The headings and captions contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement.
(b) Whenever the context requires, the singular number shall include the plural and vice versa, and words denoting any gender shall include all genders, and the word "person" shall include individuals, corporations, partnerships, limited liability companies, joint ventures, trusts, unincorporated associations, governmental authorities, and any other entities.
(c) The word "including" (and with correlative meaning, "include" and "includes") means including without limiting the generality of any description preceding or following such word, and shall be deemed in each case to be followed by the words "without limitation."
(d) Unless otherwise specified, all references in this Agreement to "Articles," "Sections," "Exhibits," and "Schedules" refer to Articles, Sections, Exhibits, and Schedules of this Agreement.
(e) All references to "$" or "dollars" shall mean United States dollars.
(f) The words "herein," "hereof," "hereunder," and words of similar import shall refer to this Agreement as a whole, including all Exhibits, and not to any particular Section or provision hereof.
(g) Each Party acknowledges that it has been represented by legal counsel in connection with the negotiation and execution of this Agreement, and accordingly, any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.
ARTICLE 2
APPOINTMENT OF ESCROW AGENT; ESTABLISHMENT OF ESCROW ACCOUNT
Section 2.1 *Appointment.* The Purchaser and the Seller Representative hereby appoint Continental Fiduciary Trust Company as Escrow Agent under this Agreement, and the Escrow Agent hereby accepts such appointment and agrees to act as Escrow Agent, upon the terms and subject to the conditions set forth herein. The Escrow Agent shall hold, invest, and distribute the Escrow Fund solely in accordance with the terms of this Agreement.
Section 2.2 *Establishment of Escrow Account.* The Escrow Agent shall establish and maintain the Escrow Account, bearing account number CFT-ESC-2025-00327, at its offices at 111 Wall Street, New York, New York 10005. The Escrow Account shall be maintained in the name of "Continental Fiduciary Trust Company, as Escrow Agent for Ardent Healthcare Holdings Inc. and the Sellers." The Escrow Agent shall maintain the Escrow Account separate and apart from its general assets and from any other funds or accounts in the custody or control of the Escrow Agent. The Escrow Agent shall not commingle the Escrow Fund with any other funds or assets held by the Escrow Agent.
Section 2.3 *Deposit of Escrow Amount.* On the date hereof (February 12, 2025), the Purchaser shall deposit, or cause to be deposited, the Escrow Amount of Forty-Nine Million Six Hundred Thousand Dollars ($49,600,000) in immediately available funds by wire transfer to the Escrow Account in accordance with the wire transfer instructions set forth below:
Continental Fiduciary Trust Company 111 Wall Street, New York, NY 10005 ABA Routing Number: 021-000-147 Account Name: Continental Fiduciary Trust Company, as Escrow Agent — CFT-ESC-2025-00327 Account Number: 8801-4726-9053 Reference: Ardent Healthcare / MedVance Escrow
The Escrow Agent shall acknowledge receipt of the Escrow Amount in writing (which may be by email) to both the Purchaser and the Seller Representative within one (1) Business Day following the Escrow Agent's receipt of the Escrow Amount into the Escrow Account. The Escrow Agent shall have no obligation to accept any deposit into the Escrow Account other than the Escrow Amount as described in this Section 2.3, unless otherwise directed by Joint Written Instructions.
Section 2.4 *Ownership for Tax Purposes.*
(a) The Parties agree that, for United States federal income tax purposes and for all applicable state and local income tax purposes, the Escrow Fund (including all Escrow Earnings) shall be treated as owned by the Sellers in proportion to their respective Pro Rata Shares as set forth in the Purchase Agreement. Accordingly, all Escrow Earnings shall be reported as income of the Sellers in their respective Pro Rata Shares as follows: Crestline Growth Equity Fund II LP — 68.2%; Ryland Family Holdings LLC — 19.5%; and the management rollover participants (in the aggregate) — 12.3%.
(b) The Escrow Agent shall report all Escrow Earnings on Internal Revenue Service Form 1099 (or such successor form as may be applicable) to the Seller Representative (Taxpayer Identification Number to be provided under separate cover), who shall be responsible for further allocating such Escrow Earnings to each Seller in accordance with their respective Pro Rata Shares. For purposes of tax information reporting, the following taxpayer identification numbers are noted:
(i) Crestline Growth Equity Fund II LP: EIN 04-8291653
(ii) Purchaser (Ardent Healthcare Holdings Inc.): EIN 93-2047861
(iii) Additional taxpayer identification numbers for Ryland Family Holdings LLC and each management rollover participant shall be provided to the Escrow Agent by the Seller Representative under separate cover within ten (10) Business Days following the date hereof.
(c) The Seller Representative shall provide the Escrow Agent with a properly completed Internal Revenue Service Form W-9 (or applicable Form W-8, as the case may be) for each Seller within ten (10) Business Days following the date hereof. If the Seller Representative fails to provide such forms within such period, the Escrow Agent shall be entitled to withhold taxes on any distributions or Escrow Earnings as required by applicable law.
(d) Notwithstanding anything to the contrary herein, in the event that any portion of the Escrow Fund is distributed to the Purchaser in satisfaction of an indemnification claim under the Purchase Agreement, such distribution shall be treated for tax purposes in the manner provided in Section 9.04 of the Purchase Agreement.
ARTICLE 3
INVESTMENT OF ESCROW FUND
Section 3.1 *Investment Instructions.* The Escrow Agent shall invest and reinvest the Escrow Fund (including all Escrow Earnings) in Permitted Investments as directed by Joint Written Instructions delivered to the Escrow Agent. In the absence of Joint Written Instructions regarding investment of the Escrow Fund received by the Escrow Agent within five (5) Business Days following the date of the initial deposit of the Escrow Amount (or, thereafter, within five (5) Business Days following the maturity or liquidation of any Permitted Investment), the Escrow Agent shall invest the uninvested portion of the Escrow Fund in the default investment described in Section 3.2(a). The Escrow Agent shall have no obligation to invest or reinvest the Escrow Fund other than as expressly set forth in this Article 3.
Section 3.2 *Permitted Investments. The Escrow Fund (or any portion thereof) may be invested only in the following investments (each, a "Permitted Investment*"):
(a) A money market deposit account maintained at Continental Fiduciary Trust Company (which shall serve as the default investment in the absence of Joint Written Instructions regarding investment of the Escrow Fund);
(b) Direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, in each case having a remaining maturity at the time of purchase of not more than ninety (90) days;
(c) Certificates of deposit or time deposits issued by Continental Fiduciary Trust Company or by any commercial bank organized under the laws of the United States of America or any state thereof having combined capital and surplus of not less than Five Hundred Million Dollars ($500,000,000), in each case having a remaining maturity at the time of purchase of not more than ninety (90) days;
(d) Commercial paper issued by any corporation organized under the laws of the United States of America or any state thereof, rated at least A-1 by Standard & Poor's Ratings Services (a division of S&P Global Inc.) or P-1 by Moody's Investors Service, Inc. (or, in each case, such comparable rating by any successor rating agency), in each case having a remaining maturity at the time of purchase of not more than ninety (90) days; and
(e) Such other investments as may be mutually agreed upon in writing by the Purchaser and the Seller Representative pursuant to Joint Written Instructions.
Section 3.3 *Investment Risk.* The Escrow Agent shall not be liable or responsible for any loss of principal or any diminution in value of the Escrow Fund resulting from any investment made in accordance with this Article 3, including any loss resulting from market fluctuations, changes in interest rates, investment performance, or the creditworthiness of any obligor on any Permitted Investment. The Parties hereby acknowledge and agree that (i) the Escrow Agent does not provide investment advice and has not made any representations regarding the advisability of any Permitted Investment, (ii) investments in the Escrow Account are not insured by the Federal Deposit Insurance Corporation except to the extent of applicable deposit insurance limits, and (iii) Permitted Investments described in Sections 3.2(b), (c), and (d) are subject to credit risk and liquidity risk inherent in the nature of such instruments.
Section 3.4 *Income, Gains, and Losses.* All Escrow Earnings shall be retained in the Escrow Account and shall constitute part of the Escrow Fund for all purposes of this Agreement, subject to distribution in accordance with Article 4. Any losses incurred on the investment or reinvestment of the Escrow Fund in Permitted Investments shall reduce the Escrow Fund accordingly. The Escrow Agent shall have no obligation to restore or otherwise compensate the Escrow Fund for any such losses. To the extent the Escrow Agent is required by applicable law to withhold any taxes from any Escrow Earnings, the Escrow Agent shall deduct and withhold such taxes and remit them to the appropriate governmental authority, and the amount of such withholding shall reduce the Escrow Fund accordingly. The Escrow Agent shall provide each of the Purchaser and the Seller Representative with periodic account statements reflecting the activity in the Escrow Account, including all investments, Escrow Earnings, and distributions, on a monthly basis or such other frequency as the Parties may reasonably request.
ARTICLE 4
DISTRIBUTION OF ESCROW FUND
Section 4.1 *Claims Against Escrow Fund.*
(a) Delivery of Claim Notice. The Purchaser may, at any time on or prior to the Final Release Date, deliver a Claim Notice to the Escrow Agent and the Seller Representative asserting a claim for indemnification against the Escrow Fund under the Purchase Agreement. Each Claim Notice shall specify in reasonable detail: (i) the nature and factual basis of the claim, including a description of the Loss (as defined in the Purchase Agreement) or potential Loss to which such claim relates; (ii) the amount claimed (or, if the exact amount is not then determinable, a reasonable good-faith estimate thereof, together with a statement that such amount constitutes an estimate and the basis therefor); and (iii) the specific section or sections of the Purchase Agreement upon which the claim is based, including the particular representation, warranty, covenant, or agreement alleged to have been breached or not fulfilled. For the avoidance of doubt, the Purchaser may deliver more than one Claim Notice, and Claim Notices may be delivered with respect to different claims on different dates, subject to the limitation that no Claim Notice may be delivered after the Final Release Date.
(b) Dispute Period. The Seller Representative shall have thirty (30) Business Days following receipt of a Claim Notice (the "Dispute Period") to deliver a Dispute Notice to the Escrow Agent and the Purchaser. A Dispute Notice must specify in reasonable detail (i) the basis for the Seller Representative's objection to the applicable Claim Notice, (ii) the portion of the claimed amount that is disputed (which may be all or any portion thereof), and (iii) any facts or circumstances supporting the Seller Representative's position. If the Seller Representative delivers a Dispute Notice that disputes only a portion of the claimed amount, the Dispute Notice shall clearly identify the undisputed portion.
(c) Undisputed Claims. If the Seller Representative does not deliver a Dispute Notice within the Dispute Period with respect to a Claim Notice, or if the Seller Representative delivers a Dispute Notice that disputes only a portion of the claimed amount set forth in a Claim Notice, then:
(i) in the case of a failure to deliver a timely Dispute Notice, the Escrow Agent shall, within five (5) Business Days after the expiration of the Dispute Period, distribute from the Escrow Fund to the Purchaser an amount equal to the full claimed amount set forth in such Claim Notice, by wire transfer of immediately available funds to the account designated by the Purchaser in accordance with Section 4.4; and
(ii) in the case of a Dispute Notice that disputes only a portion of the claimed amount, the Escrow Agent shall, within five (5) Business Days after the expiration of the Dispute Period, distribute from the Escrow Fund to the Purchaser an amount equal to the undisputed portion of the claimed amount, by wire transfer of immediately available funds to the account designated by the Purchaser in accordance with Section 4.4. The disputed portion shall be retained in the Escrow Account pending resolution as a Disputed Claim in accordance with Section 4.1(d).
(d) Disputed Claims — Resolution. Disputed Claims shall be resolved exclusively by one of the following methods:
(i) Joint Written Instructions. The Purchaser and the Seller Representative may deliver Joint Written Instructions to the Escrow Agent at any time directing the Escrow Agent to distribute all or any portion of the amount subject to a Disputed Claim to the Purchaser, the Seller Representative, or both, in such amounts and proportions as specified in such Joint Written Instructions. The Escrow Agent shall comply with such Joint Written Instructions within five (5) Business Days of receipt thereof; or
(ii) Final Court Order. Either the Purchaser or the Seller Representative may present to the Escrow Agent a certified copy of a final, non-appealable order, judgment, or decree of a court of competent jurisdiction (a "Final Court Order") directing the distribution of all or any portion of the amount subject to a Disputed Claim. Such presentation shall be accompanied by a written opinion of counsel to the presenting party, addressed to the Escrow Agent, confirming that such order, judgment, or decree is final and non-appealable (or that the applicable period for appeal has expired without any appeal having been filed). The Escrow Agent shall distribute the Escrow Fund in accordance with such Final Court Order within five (5) Business Days of receipt of both the certified copy of such order and the accompanying opinion of counsel.
(e) Cap on Distributions. In no event shall aggregate distributions from the Escrow Fund to the Purchaser exceed the balance of the Escrow Fund at the time of any such distribution. The Parties acknowledge and agree that the overall indemnification cap under Article IX of the Purchase Agreement is One Hundred Twenty-Four Million Dollars ($124,000,000) (representing twenty percent (20%) of the Purchase Price), and that the Escrow Fund constitutes a subset of, and is not in addition to, such overall indemnification cap. The Escrow Fund shall serve as the first source of recovery for indemnifiable Losses under the Purchase Agreement, subject to and in accordance with the terms and conditions thereof. Nothing in this Agreement shall be deemed to limit the Purchaser's rights to seek indemnification under the Purchase Agreement in excess of the Escrow Fund, to the extent permitted by the Purchase Agreement, but the Escrow Agent shall have no obligation or liability with respect to any amounts in excess of the Escrow Fund.
Section 4.2 *Release Upon Expiration of Survival Period.*
(a) Scheduled Release. Promptly following the Final Release Date (October 18, 2026), and in any event within five (5) Business Days thereafter, and provided that no Pending Claims exist as of the Final Release Date, the Escrow Agent shall distribute the entire remaining Escrow Fund (including all accrued and undistributed Escrow Earnings) to the Seller Representative, for further distribution by the Seller Representative to the Sellers in accordance with their respective Pro Rata Shares under the Purchase Agreement, by wire transfer of immediately available funds to the account designated by the Seller Representative in accordance with Section 4.4.
(b) Holdback for Pending Claims. If, as of the Final Release Date, one or more Pending Claims exist, the Escrow Agent shall:
(i) retain in the Escrow Account an amount equal to the aggregate claimed amount of all such Pending Claims (or, to the extent any such Pending Claim included a good-faith estimate of the claimed amount, the amount of such estimate) (the "Holdback Amount"); and
(ii) distribute the excess, if any, of the Escrow Fund over the Holdback Amount to the Seller Representative, by wire transfer of immediately available funds to the account designated by the Seller Representative in accordance with Section 4.4, for further distribution to the Sellers in accordance with their respective Pro Rata Shares under the Purchase Agreement.
As each Pending Claim is thereafter resolved, whether by Joint Written Instructions or by a Final Court Order in accordance with Section 4.1(d), the Escrow Agent shall:
(A) distribute the amount payable to the Purchaser in respect of such resolved Pending Claim (if any) in accordance with Section 4.1(c) or Section 4.1(d), as applicable; and
(B) release any remaining portion of the Holdback Amount attributable to such resolved Pending Claim (i.e., the excess of the Holdback Amount attributable to such Pending Claim over the amount distributed to the Purchaser in respect thereof) to the Seller Representative, by wire transfer of immediately available funds to the account designated by the Seller Representative in accordance with Section 4.4.
(c) Final Distribution. Upon the resolution of all Pending Claims in accordance with this Section 4.2, the Escrow Agent shall distribute any remaining Escrow Fund (including all accrued Escrow Earnings thereon) to the Seller Representative within five (5) Business Days, by wire transfer of immediately available funds to the account designated by the Seller Representative in accordance with Section 4.4, for further distribution to the Sellers in accordance with their respective Pro Rata Shares under the Purchase Agreement.
Section 4.3 *Joint Written Instructions.* Notwithstanding anything to the contrary in this Article 4, the Purchaser and the Seller Representative may at any time deliver Joint Written Instructions to the Escrow Agent directing the distribution of all or any portion of the Escrow Fund to such person or persons, and in such amounts, as may be specified in such Joint Written Instructions. The Escrow Agent shall comply with such Joint Written Instructions within five (5) Business Days of receipt thereof, without independent inquiry into the merits, validity, or propriety of such instructions. Any distribution made by the Escrow Agent in accordance with Joint Written Instructions shall reduce the Escrow Fund by the amount so distributed.
Section 4.4 *Wire Transfer Information. Each distribution from the Escrow Fund shall be made by wire transfer of immediately available funds to the bank account designated in writing by the recipient Party. The initial wire transfer instructions for the Purchaser and the Seller Representative are set forth in Exhibit A* attached hereto. Either the Purchaser or the Seller Representative may change its designated wire transfer instructions by delivering written notice of such change to the Escrow Agent and the other Party at least five (5) Business Days prior to any distribution, such notice to be confirmed by authorized callback to a person designated on the callback authorization list provided by the applicable Party to the Escrow Agent. The Escrow Agent shall not be liable for any loss arising from a wire transfer made to the account designated in the most recent wire transfer instructions received by the Escrow Agent in accordance with this Section 4.4, including any loss resulting from the misdirection of funds caused by erroneous instructions provided by any Party or by a fraudulent instruction that was not detected despite the Escrow Agent's adherence to the callback procedures set forth herein.
ARTICLE 5
ESCROW AGENT
Section 5.1 *Duties.* The Escrow Agent undertakes to perform only such duties as are expressly set forth in this Agreement, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of the Escrow Agent. The Escrow Agent acts as a stakeholder only and shall not be deemed a fiduciary, trustee, partner, or agent of either the Purchaser or the Seller Representative (or any Seller), except to the limited extent expressly provided in this Agreement. The Escrow Agent shall not be required to expend or risk any of its own funds or otherwise incur any financial liability in the performance of its duties hereunder if it believes that repayment of such funds or adequate indemnification against such liability is not reasonably assured to it.
Section 5.2 *Reliance.* The Escrow Agent may rely, and shall be fully protected in acting or refraining from acting, upon any notice, instruction, certificate, statement, request, consent, agreement, or other document or instrument furnished to it hereunder that the Escrow Agent in good faith believes to be genuine and to have been signed, presented, or delivered by the proper person or persons. The Escrow Agent shall have no duty or obligation to inquire into or investigate the validity, accuracy, or content of any such document or instrument. The Escrow Agent may consult with legal counsel of its own choosing (including in-house counsel) in connection with any question arising under or in connection with this Agreement, and the Escrow Agent shall not be liable for any action taken, suffered, or omitted by it in good faith in accordance with the advice of such counsel. The Escrow Agent may execute any of its powers or duties hereunder either directly or through agents, attorneys, custodians, or nominees, and shall not be liable for the acts or omissions of any such agent, attorney, custodian, or nominee appointed with due care.
Section 5.3 *No Liability.* The Escrow Agent shall not be liable for any action taken or omitted to be taken by it hereunder or in connection herewith in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement, except for its own gross negligence, willful misconduct, or material breach of this Agreement, in each case as determined by a final, non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, in no event shall the Escrow Agent be liable for (a) acting in accordance with or relying upon any instruction, notice, demand, certificate, or document from the Purchaser, the Seller Representative, or any other person, which the Escrow Agent in good faith believed to be genuine, (b) any loss, diminution in value, or delay in the availability of the Escrow Fund resulting from any investment of the Escrow Fund in Permitted Investments or the liquidation thereof, (c) any delay in performing its duties hereunder caused by circumstances beyond its reasonable control, including acts of God, war, terrorism, labor disputes, equipment failures, or interruptions of communications or power supplies, or (d) any special, indirect, incidental, consequential, exemplary, or punitive damages of any nature whatsoever, regardless of the form of action, whether in contract, tort, strict liability, or otherwise, and whether or not any claim for such damages is based upon negligence, breach of warranty, or any other theory, even if the Escrow Agent has been advised of the possibility of such damages.
Section 5.4 *Conflicting Instructions; Interpleader.* If at any time the Escrow Agent receives or becomes aware of conflicting instructions, claims, or demands from the Purchaser and the Seller Representative (or from any other persons claiming an interest in the Escrow Fund), the Escrow Agent shall be entitled, at its sole option and discretion, to:
(a) refrain from taking any action (other than to hold the Escrow Fund, or the disputed portion thereof, in the Escrow Account) until the Escrow Agent shall have received (i) Joint Written Instructions from the Purchaser and the Seller Representative resolving such conflict, or (ii) a Final Court Order directing the Escrow Agent to take specified action with respect to the Escrow Fund; or
(b) deposit the Escrow Fund (or the disputed portion thereof) with a court of competent jurisdiction in an interpleader action, together with such legal pleadings as the Escrow Agent deems appropriate. Upon such deposit, the Escrow Agent shall be fully and finally released and discharged from all obligations, duties, and liabilities under this Agreement with respect to the amounts so deposited, and the Purchaser and the Seller Representative (on behalf of the Sellers) shall jointly and severally reimburse the Escrow Agent for all costs and expenses (including reasonable attorneys' fees and court costs) incurred in connection with such interpleader action.
The Escrow Agent shall not be or become liable in any way to any Party or any other person for its failure or refusal to take any action in the circumstances contemplated by this Section 5.4.
Section 5.5 *Compensation and Expenses.*
(a) Annual Fee. The Escrow Agent shall be entitled to compensation for its services hereunder as set forth in the fee schedule attached hereto as Exhibit B (the "Fee Schedule"). The initial annual escrow administration fee shall be payable in advance on the date hereof and on each anniversary thereof for so long as this Agreement remains in effect. In the event that this Agreement terminates prior to the expiration of any annual period for which a fee has been paid, the Escrow Agent shall not be required to refund any portion of such fee. Any partial year shall be pro-rated based on the actual number of days remaining in such annual period divided by 365.
(b) Expenses. In addition to the fees described in Section 5.5(a), the Escrow Agent shall be entitled to reimbursement of all reasonable and documented out-of-pocket expenses incurred by the Escrow Agent in connection with the performance of its duties hereunder, including without limitation reasonable legal fees and expenses incurred in connection with any interpleader action or other judicial proceeding relating to the Escrow Fund, any amendment to or modification of this Agreement, and any extraordinary services not contemplated by this Agreement.
(c) Payment. All fees and expenses of the Escrow Agent under this Section 5.5 shall be borne equally, one-half (50%) by the Purchaser and one-half (50%) by the Seller Representative (on behalf of the Sellers, from the Escrow Fund or from other resources of the Sellers). The Escrow Agent shall render invoices for its fees and expenses to both the Purchaser and the Seller Representative. If any fees or expenses remain unpaid for more than thirty (30) days following the date of the applicable invoice, the Escrow Agent may, upon at least ten (10) Business Days' prior written notice to both the Purchaser and the Seller Representative, deduct the unpaid amount from the Escrow Fund; provided, however, that such deduction shall reduce the Escrow Fund and shall be taken into account for purposes of determining the balance of the Escrow Fund available for distribution under Article 4.
Section 5.6 *Indemnification of Escrow Agent. The Purchaser and the Seller Representative (on behalf of the Sellers), jointly and severally (and as between themselves, in equal proportions of fifty percent (50%) each), shall indemnify, defend, and hold harmless the Escrow Agent and its directors, officers, employees, agents, successors, and assigns (collectively, the "Indemnified Parties") from and against any and all claims, actions, suits, proceedings, investigations, losses, damages, liabilities, judgments, penalties, fines, costs, and expenses (including reasonable attorneys' fees and disbursements) (collectively, "Agent Losses*") arising out of or in connection with this Agreement, the Escrow Fund, or the Escrow Agent's performance of its duties hereunder, except to the extent that such Agent Losses are finally determined by a court of competent jurisdiction (in a judgment that is final and non-appealable) to have resulted directly from the Escrow Agent's gross negligence, willful misconduct, or material breach of this Agreement. The obligations of the Purchaser and the Seller Representative under this Section 5.6 shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.
Section 5.7 *Resignation and Removal.*
(a) Resignation. The Escrow Agent may resign from its duties and obligations under this Agreement at any time by delivering written notice of such resignation to the Purchaser and the Seller Representative at least thirty (30) days prior to the effective date of such resignation. Such resignation shall take effect on the date specified in such notice (which shall not be earlier than thirty (30) days after delivery of such notice), or upon the earlier appointment of a successor escrow agent as provided in Section 5.7(c).
(b) Removal. The Escrow Agent may be removed by Joint Written Instructions of the Purchaser and the Seller Representative, delivered to the Escrow Agent at least thirty (30) days prior to the effective date of such removal. Such removal shall take effect on the date specified in such Joint Written Instructions (which shall not be earlier than thirty (30) days after delivery of such instructions), or upon the earlier appointment of a successor escrow agent as provided in Section 5.7(c).
(c) Successor. Upon the resignation or removal of the Escrow Agent pursuant to this Section 5.7, the Purchaser and the Seller Representative shall use commercially reasonable efforts to appoint a successor escrow agent, which shall be a bank or trust company having combined capital and surplus of not less than Five Hundred Million Dollars ($500,000,000), within thirty (30) days following the effective date of such resignation or removal. Upon the appointment of a successor escrow agent, the Escrow Agent shall transfer and deliver the Escrow Fund and all records and documents relating thereto to such successor escrow agent, and the Escrow Agent shall thereafter be discharged from all further obligations and liabilities under this Agreement (except for obligations and liabilities arising prior to or in connection with such transfer, and the obligations described in Sections 5.3 and 5.6, which shall survive). If the Purchaser and the Seller Representative fail to appoint a successor escrow agent within thirty (30) days following the effective date of such resignation or removal, the Escrow Agent may deposit the Escrow Fund with a court of competent jurisdiction, whereupon the Escrow Agent shall be fully and finally released and discharged from all obligations and liabilities under this Agreement with respect to the amounts so deposited.
Section 5.8 *Merger or Consolidation.* Any corporation or other entity into which the Escrow Agent may be merged or consolidated, or any corporation or other entity resulting from any merger or consolidation to which the Escrow Agent may be a party, or any corporation or entity to which all or substantially all of the escrow business of the Escrow Agent may be transferred, shall become the successor Escrow Agent under this Agreement without the execution or filing of any instrument or the performance of any further act, and shall succeed to all of the rights, duties, immunities, and obligations of the Escrow Agent hereunder.
ARTICLE 6
SELLER REPRESENTATIVE
Section 6.1 *Appointment and Authority.* Each of the Sellers has irrevocably appointed Marcus Delgado, in his capacity as a partner of Crestline Growth Equity Fund II LP, with offices at 200 Clarendon Street, 42nd Floor, Boston, Massachusetts 02116, as the Seller Representative, with full power and authority to act on behalf of each and all of the Sellers in connection with this Agreement and all matters contemplated hereby. Without limiting the generality of the foregoing, the Seller Representative shall have full power and authority to:
(a) give and receive all notices, instructions, consents, and communications to be given or received by any Seller under or in connection with this Agreement;
(b) deliver Dispute Notices in response to any Claim Notice;
(c) execute and deliver Joint Written Instructions on behalf of the Sellers;
(d) receive distributions from the Escrow Fund on behalf of the Sellers and further distribute such amounts to the Sellers in accordance with their respective Pro Rata Shares under the Purchase Agreement;
(e) negotiate, compromise, and settle any Disputed Claim on behalf of the Sellers;
(f) engage legal counsel, accountants, and other advisors in connection with any matter arising under or related to this Agreement, at the expense of the Sellers; and
(g) take all other actions that the Seller Representative deems necessary or appropriate in connection with this Agreement and the transactions contemplated hereby.
The appointment of the Seller Representative is coupled with an interest and shall be irrevocable by any Seller. The Seller Representative shall not be liable to any Seller for any action taken or omitted by the Seller Representative in good faith and in a manner the Seller Representative reasonably believed to be in, or not opposed to, the best interests of the Sellers, except for the Seller Representative's fraud, gross negligence, or willful misconduct.
Section 6.2 *Reliance by Escrow Agent.* The Escrow Agent shall be entitled to rely conclusively upon the authority of the Seller Representative to act on behalf of each Seller for all purposes of this Agreement. The Escrow Agent shall have no obligation to inquire into or verify the scope of the Seller Representative's authority, to communicate with or obtain the consent of any individual Seller, or to verify that any action taken by the Seller Representative has been authorized by the Sellers. Any notice, instruction, or direction given by the Seller Representative to the Escrow Agent shall be deemed to have been given by each and all of the Sellers and shall be binding on each and all of the Sellers for all purposes.
Section 6.3 *Successor Seller Representative.* If Marcus Delgado is unable or unwilling to serve as Seller Representative, or if Marcus Delgado resigns, dies, or becomes incapacitated, a successor Seller Representative shall be appointed in accordance with Section 10.15 of the Purchase Agreement. Written notice of the appointment of any successor Seller Representative, together with a specimen signature of such successor, shall be promptly delivered to the Escrow Agent and the Purchaser. Until the Escrow Agent has received such written notice of the appointment of a successor Seller Representative, the Escrow Agent shall be entitled to continue to rely on the most recent instructions of the Seller Representative then on file with the Escrow Agent.
ARTICLE 7
NOTICES
Section 7.1 *Manner of Delivery.* All notices, requests, demands, consents, Claim Notices, Dispute Notices, Joint Written Instructions, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given and effective:
(a) when delivered in person (with written confirmation of receipt);
(b) one (1) Business Day after deposit with a nationally recognized overnight courier service (such as Severin Partners LLC or Halcyon Partners LLC), with all charges prepaid or billed to the sender's account, for next Business Day delivery, addressed to the applicable Party at the address set forth in Section 7.2; or
(c) when sent by electronic mail (with confirmation of delivery and no "bounce-back" or similar error message received by the sender), to the email address specified for the applicable Party in Section 7.2 or as otherwise designated in writing by such Party;
provided, however, that any notice to the Escrow Agent shall not be deemed effective unless and until actually received by the Escrow Agent at the address set forth in Section 7.2. Notwithstanding the foregoing, any Claim Notice, Dispute Notice, or Joint Written Instructions must be delivered to the Escrow Agent both by one of the methods described in clauses (a) or (b) above and by electronic mail.
Section 7.2 *Addresses.* All notices and other communications hereunder shall be delivered to the following addresses (or to such other address as any Party may designate by notice to the other Parties in accordance with this Section 7):
If to the Purchaser:
Ardent Healthcare Holdings Inc. 599 Lexington Avenue, 34th Floor New York, New York 10022
Attention: Graham Whitfield, Managing Partner
and Priya Ranganathan, Partner
Email: gwhitfield@ardenthealthcare.com; pranganathan@ardenthealthcare.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 1221 Avenue of the Americas, 40th Floor New York, New York 10020
Attention: Beatrice Holloway, Esq.
Email: bholloway@calderwoodharkness.com
If to the Seller Representative:
Marcus Delgado c/o Crestline Growth Equity Fund II LP 200 Clarendon Street, 42nd Floor Boston, Massachusetts 02116
Attention: Marcus Delgado
Email: mdelgado@crestlinegrowth.com
with a copy (which shall not constitute notice) to:
Whitaker, Poole & Simms LLP 333 Commerce Street, Suite 2800 Nashville, Tennessee 37201
Attention: Rebecca Whitaker, Esq.
Email: rwhitaker@wpslaw.com
If to the Escrow Agent:
Continental Fiduciary Trust Company 111 Wall Street New York, New York 10005
Attention: Patricia Ng, Vice President, Escrow Services
Email: png@continentalfiduciary.com
Reference: Escrow Account No. CFT-ESC-2025-00327
Section 7.3 *Changes.* Any Party may change its address, email address, or the persons designated to receive notices by delivering written notice of such change to each of the other Parties in accordance with this Article 7. Such change shall be effective upon receipt of such notice by each of the other Parties.
ARTICLE 8
TERMINATION
This Agreement shall automatically terminate, without any further action by any Party, upon the distribution of the entire Escrow Fund in accordance with Article 4; provided, however, that the following provisions shall survive the termination of this Agreement and shall remain in full force and effect: Section 5.3 (No Liability), Section 5.5 (Compensation and Expenses), Section 5.6 (Indemnification of Escrow Agent), and this Article 8. For the avoidance of doubt, termination of this Agreement shall not release any Party from any liability for any breach of this Agreement occurring prior to such termination, and the Escrow Agent's right to receive unpaid fees and expenses, and to be indemnified in accordance with Section 5.6, shall not be affected by any such termination.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1 *Governing Law.* This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
Section 9.2 *Jurisdiction and Venue.* Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, City of New York, and the United States District Court for the Southern District of New York, for the purposes of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim, or otherwise, in any such action, suit, or proceeding, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with applicable law, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts, and (c) that (i) such action, suit, or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such action, suit, or proceeding is improper, or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
Section 9.3 *WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ESCROW FUND, OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.3.*
Section 9.4 *Entire Agreement.* This Agreement (including the Exhibits hereto), together with the Purchase Agreement to the extent incorporated by reference herein, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, agreements, understandings, representations, and warranties, whether written or oral, relating to the subject matter hereof. No Party has relied on any statement, representation, warranty, or agreement of any other Party except for those expressly set forth in this Agreement.
Section 9.5 *Amendments and Waivers.* This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument signed by the Purchaser, the Seller Representative, and the Escrow Agent. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party against whom enforcement of such waiver is sought, and any such waiver shall be effective only in the specific instance and for the specific purpose for which it was given. No failure or delay by any Party in exercising any right, power, or privilege under this Agreement 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.
Section 9.6 *Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of each of the other Parties; provided, however, that the Purchaser may, without the consent of any other Party, assign its rights (but not its obligations) under this Agreement (a) to any affiliate of the Purchaser, or (b) for purposes of collateral security, to the Purchaser's senior secured lenders, Ridgeline National Bank, N.A. and Pinnacle Commercial Credit Corp., and their respective successors and assigns, in connection with the credit facilities financing the transactions contemplated by the Purchase Agreement; provided, further*, that no such assignment shall relieve the Purchaser of its obligations hereunder. Any purported assignment or delegation in violation of this Section 9.6 shall be null and void.
Section 9.7 *No Third-Party Beneficiaries.* Except as expressly provided herein with respect to the Sellers (for whose benefit the Seller Representative acts under this Agreement) and the Indemnified Parties under Section 5.6, this Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
Section 9.8 *Severability.* If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any Party. Upon such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 9.9 *Counterparts.* This Agreement may be executed in one or more counterparts (including by means of electronic signature, portable document format (PDF), or other electronic transmission), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic mail (including PDF) or other electronic transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.
Section 9.10 *Patriot Act Compliance. The Escrow Agent hereby notifies each other Party that, pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56, as amended) (the "Patriot Act*") and applicable regulations promulgated thereunder, the Escrow Agent is required to obtain, verify, and record information that identifies each person or entity that establishes a relationship or opens an account with the Escrow Agent. The information required includes the name, address, and taxpayer identification number of each such person or entity, as well as other information that will allow the Escrow Agent to identify such person or entity in accordance with the Patriot Act. Each of the Purchaser and the Seller Representative hereby confirms that it has provided, or shall promptly provide, to the Escrow Agent all documentation and other information required by bank regulatory authorities under applicable "know your customer" and anti-money-laundering rules and regulations, including the Patriot Act.
Section 9.11 *Relationship to Purchase Agreement. This Agreement is being entered into pursuant to the Purchase Agreement and is subject to the provisions thereof. In the event of any conflict or inconsistency between the terms and provisions of this Agreement and the terms and provisions of the Purchase Agreement, as between the Purchaser and the Seller Representative (and the Sellers), the Purchase Agreement shall control and govern; provided, however*, that with respect to the rights, duties, immunities, and indemnities of the Escrow Agent, this Agreement shall exclusively control and govern, and the Escrow Agent shall have no obligations or duties except as expressly set forth in this Agreement, regardless of any provisions of the Purchase Agreement. The Escrow Agent is not a party to the Purchase Agreement and shall have no responsibility or liability with respect to any provision thereof.
[Remainder of page intentionally left blank; signature pages follow.]
[SIGNATURE PAGE TO ESCROW AGREEMENT]
IN WITNESS WHEREOF, the Parties hereto have caused this Escrow Agreement to be duly executed as of the date first written above.
ARDENT HEALTHCARE HOLDINGS INC.
By: ________
Name: Graham Whitfield
Title: President
Date: ________
[SIGNATURE PAGE TO ESCROW AGREEMENT]
SELLER REPRESENTATIVE
________________________________________
Marcus Delgado, solely in his capacity as Seller Representative and not in his individual capacity
Date: ________
[SIGNATURE PAGE TO ESCROW AGREEMENT]
CONTINENTAL FIDUCIARY TRUST COMPANY, as Escrow Agent
By: ________
Name: Patricia Ng
Title: Vice President, Escrow Services
Date: ________
EXHIBIT A
WIRE TRANSFER INSTRUCTIONS
The following wire transfer instructions shall be in effect for purposes of Article 4 of the Escrow Agreement, as of the date of execution hereof, and shall remain in effect until changed in accordance with Section 4.4 of the Escrow Agreement.
A-1. Purchaser Wire Instructions
Account for the return or distribution of all or any portion of the Escrow Fund to the Purchaser:
Bank: Ridgeline National Bank, N.A. 225 Liberty Street New York, New York 10281