TRANSITION SERVICES AGREEMENT
by and between
MEDVANCE HEALTH SYSTEMS, INC.
and
ARDENT HEALTHCARE HOLDINGS INC.
Dated as of April 18, 2025
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is entered into as of April 18, 2025 (the "Closing Date"), by and between MedVance Health Systems, Inc., a Delaware corporation with its principal place of business at 4200 West End Avenue, Suite 1100, Nashville, TN 37205 (the "Service Provider" or "MedVance"), and Ardent Healthcare Holdings Inc., a Delaware corporation with its registered office at 1209 Orange Street, Wilmington, DE 19801 (the "Service Recipient" or "AHH"). The Service Provider and the Service Recipient are each sometimes referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, MedVance and AHH (together with Crestline Growth Equity Fund II LP, a Delaware limited partnership, Ryland Family Holdings LLC, a Delaware limited liability company, and the Management Sellers identified therein) are parties to that certain Stock Purchase Agreement, dated as of February 10, 2025 (as amended, supplemented, or otherwise modified from time to time, the "Purchase Agreement"), pursuant to which AHH acquired all of the issued and outstanding capital stock of MedVance;
WHEREAS, the transactions contemplated by the Purchase Agreement closed on April 18, 2025 (the "Closing");
WHEREAS, following the Closing, the Service Recipient desires that the Service Provider continue to provide certain information technology, accounting, and human resources services on a transitional basis in order to facilitate the orderly transition of the business operations of MedVance to the Service Recipient's own systems and personnel; and
WHEREAS, the Service Provider is willing to provide such transitional services on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of 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 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. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") means the direct or indirect ownership of more than fifty percent (50%) of the voting securities of a Person or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. The Parties acknowledge that, following the Closing, MedVance is a wholly owned subsidiary of AHH; notwithstanding such relationship, the Parties are treated as separate contracting entities for all purposes of this Agreement.
"Agreement" means this Transition Services Agreement, including all Schedules and Exhibits attached hereto, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Business Day" means any day other than a Saturday, Sunday, or any other day on which commercial banks in Nashville, Tennessee or New York, New York are authorized or required by applicable Law to be closed.
"Closing Date" means April 18, 2025, as defined in the Purchase Agreement.
"Confidential Information" means all non-public information disclosed by either Party to the other Party (or its representatives) in connection with or arising out of the Services, whether disclosed orally, in writing, electronically, or by any other means, including trade secrets, financial data, patient health information, employee records, proprietary systems information, business plans, pricing information, customer and vendor lists, and any analyses, compilations, studies, or other materials prepared by the receiving Party that contain or otherwise reflect such information.
"Extended Service" means any Service that is extended beyond the Initial Term pursuant to Section 3.2 of this Agreement.
"Extension Period" means, with respect to any Extended Service, the period of extension for such Extended Service, commencing on the day immediately following the expiration of the Initial Term and ending on the date specified in the applicable extension notice, which date shall in no event be later than thirty (30) days after the expiration of the Initial Term (i.e., not later than September 15, 2025).
"Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected Party, including natural disasters (such as earthquakes, hurricanes, floods, and tornadoes), pandemics or epidemics, acts of God, war, armed conflict, terrorism, riot, civil disturbance, government orders, embargoes, sanctions, cyberattacks (including ransomware, distributed denial-of-service attacks, and advanced persistent threats originating from external third parties), widespread power outages or telecommunications failures, and labor disputes; provided, however, that labor disputes involving the Service Provider's own employees shall not constitute a Force Majeure Event to the extent such disputes are within the reasonable control of the Service Provider.
"HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (the "HITECH Act"), and all regulations promulgated thereunder, including the Standards for Privacy of Individually Identifiable Health Information (the "Privacy Rule") set forth at 45 C.F.R. Part 160 and Subparts A and E of Part 164, and the Security Standards for the Protection of Electronic Protected Health Information (the "Security Rule") set forth at 45 C.F.R. Part 160 and Subparts A and C of Part 164.
"Initial Term" has the meaning set forth in Section 3.1.
"Law" means any applicable federal, state, local, or foreign statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree, or order of any governmental authority.
"Losses" means any and all losses, damages, liabilities, costs, expenses (including reasonable attorneys' fees and expenses), claims, demands, actions, suits, proceedings, judgments, awards, fines, and penalties.
"Migration Plan" means the written plan developed jointly by the Parties pursuant to Section 5.5 for the orderly migration of each Service (or category of Services) from the Service Provider's systems and personnel to the Service Recipient's own systems and personnel.
"Monthly Service Fee" means the aggregate monthly fee for each category of Service, as set forth on Schedule A attached hereto.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental authority, or other entity.
"PHI" or "Protected Health Information" has the meaning ascribed to such term under HIPAA, at 45 C.F.R. § 160.103.
"Purchase Agreement" means that certain Stock Purchase Agreement, dated as of February 10, 2025, by and among AHH, MedVance, Crestline Growth Equity Fund II LP, Ryland Family Holdings LLC, and the other sellers party thereto, as amended, supplemented, or otherwise modified from time to time.
"Service Coordinator" means the designated representative of each Party responsible for the day-to-day management, oversight, and coordination of the Services under Article 5, as initially identified on Schedule C hereto.
"Service Failure" means any material failure by the Service Provider to perform a Service in accordance with the applicable Service Level, as measured in accordance with the metrics and methodology set forth on Schedule A.
"Service Level" means, with respect to each Service, the standard of care and the specific performance metrics applicable to such Service, as described in Section 2.3 and as further specified on Schedule A.
"Services" means the information technology, accounting, and human resources transition services described in Article 2 and detailed on Schedule A, as such services may be modified from time to time in accordance with Section 2.4.
"Third-Party Provider" means any third-party vendor, contractor, or subcontractor engaged by the Service Provider in connection with the performance of a Service, including, without limitation, Vertex Health Technologies Inc. (with respect to IT Services) and Prumvane & Reese LLP (with respect to historical auditor consultation for Accounting Services support only).
"Transition Completion Certificate" means the certificate substantially in the form attached hereto as Schedule B, to be executed by both Service Coordinators upon the successful migration of a Service or category of Services to the Service Recipient's own systems and personnel.
Section 1.2 Interpretation. For purposes of this Agreement: (a) the words "hereof," "herein," "hereby," and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (b) the word "including" means "including, without limitation"; (c) words importing the singular include the plural and vice versa; (d) words importing gender include all genders; (e) references to "$" or "dollars" mean United States dollars; (f) all references to "days" mean calendar days unless "Business Days" are expressly specified; and (g) all references to Sections, Articles, Schedules, and Exhibits refer to Sections and Articles of, and Schedules and Exhibits to, this Agreement unless otherwise specified. Headings and captions contained in this Agreement are included for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. No provision of this Agreement shall be interpreted in favor of, or against, any Party by reason of the extent to which that Party or its counsel participated in the drafting thereof.
ARTICLE 2 — SERVICES
Section 2.1 Scope of Services.
(a) During the term of this Agreement, the Service Provider shall provide, or cause to be provided, to the Service Recipient the Services described on Schedule A hereto. The Services consist of three categories:
(i) Information Technology Services, as described in Schedule A, Part I;
(ii) Accounting Services, as described in Schedule A, Part II; and
(iii) Human Resources Services, as described in Schedule A, Part III.
(b) The Services are limited in scope, nature, and level to the services that were provided by MedVance's internal departments and Third-Party Providers to MedVance in the ordinary course of business during the twelve (12)-month period immediately preceding the Closing Date. The Service Provider shall not be required to provide services that are materially different from, or materially in excess of, the scope, volume, or quality of services historically provided during such period.
(c) The Service Provider shall have no obligation under this Agreement to provide services beyond those expressly described on Schedule A, or to provide services to any Person other than the Service Recipient and its controlled subsidiaries (which, for the avoidance of doubt, includes MedVance and its direct and indirect subsidiaries as of the Closing Date).
Section 2.2 Excluded Services.
(a) Notwithstanding anything in this Agreement to the contrary, the following services are expressly excluded from the scope of the Services and the Service Provider shall have no obligation to provide any of the following:
(i) strategic consulting, management consulting, or business advisory services;
(ii) capital markets advisory, investment banking, or financial advisory services;
(iii) legal representation, legal advice, or regulatory filing services (other than the routine state tax return filings expressly described in Schedule A, Part II);
(iv) any services constituting the practice of medicine, clinical decision-making, or the rendering of medical judgments; and
(v) any other services not expressly described on Schedule A.
(b) The Service Provider shall not be required to: (i) hire additional personnel beyond the staffing levels in effect as of the Closing Date solely for the purpose of performing the Services; (ii) make capital expenditures in excess of Twenty-Five Thousand Dollars ($25,000) individually or Seventy-Five Thousand Dollars ($75,000) in the aggregate in connection with the Services; or (iii) obtain new third-party licenses, consents, or authorizations not already in place as of the Closing Date.
(c) In the event that a third-party consent, license, or authorization is required for the provision of any Service and such consent, license, or authorization has not been obtained notwithstanding the Service Provider's commercially reasonable efforts to obtain the same, the applicable Service shall be narrowed or replaced with a commercially reasonable workaround that provides the Service Recipient with substantially equivalent functionality to the extent practicable. The Service Provider shall promptly notify the Service Recipient's Service Coordinator upon becoming aware that any such consent, license, or authorization may not be obtainable.
Section 2.3 Standard of Care.
(a) The Service Provider shall perform (or cause to be performed) each Service in a professional and workmanlike manner, with the same degree of care, skill, and diligence as the Service Provider applied in performing such services for its own operations during the twelve (12)-month period immediately preceding the Closing Date (the "Historical Standard"). The Historical Standard shall serve as the baseline standard of care for all Services provided under this Agreement.
(b) In providing the Services, the Service Provider shall comply with all applicable Laws, including HIPAA and all state healthcare privacy and data protection laws applicable to MedVance's operations in Tennessee, Alabama, Georgia, and Kentucky.
(c) The Service Provider shall use commercially reasonable efforts to maintain adequate staffing levels, resources, and infrastructure necessary to perform the Services in accordance with the Service Levels during the term of this Agreement. The Service Provider shall provide the Service Recipient with reasonable advance notice of any material changes in staffing that could reasonably be expected to adversely affect the delivery of the Services.
(d) THE SERVICES ARE PROVIDED ON AN "AS-IS" BASIS. EXCEPT FOR THE HISTORICAL STANDARD SET FORTH IN THIS SECTION 2.3, THE SERVICE PROVIDER MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT, WITH RESPECT TO THE SERVICES OR ANY DELIVERABLES PROVIDED HEREUNDER.
Section 2.4 Changes to Services.
(a) Either Party may request reasonable modifications to the scope of any Service by delivering a written request to the other Party's Service Coordinator describing the proposed modification in reasonable detail and the reasons therefor.
(b) No modification to the scope of any Service shall become effective unless and until the Parties have agreed in writing (which may include email between the Service Coordinators) to such modification and to any corresponding adjustment to the Monthly Service Fee or other terms of this Agreement. Each such written agreement shall be deemed an amendment to Schedule A for purposes of this Agreement.
(c) The Service Recipient may request early termination of individual Services on a category-by-category or sub-service basis upon thirty (30) days' prior written notice to the Service Provider (or such shorter notice period as the Parties may mutually agree). Upon early termination of any individual Service, the Monthly Service Fee attributable to such terminated Service shall be reduced on a proportional basis, as reasonably determined by the Parties acting in good faith, effective as of the date of termination of such Service.
(d) Early termination of an individual Service pursuant to this Section 2.4 shall not constitute a termination of this Agreement, and all other Services shall continue to be provided in accordance with the terms hereof unless otherwise terminated in accordance with Article 3.
ARTICLE 3 — TERM AND TERMINATION
Section 3.1 Initial Term.
This Agreement shall be effective as of the Closing Date and shall remain in full force and effect until the date that is one hundred twenty (120) days after the Closing Date, i.e., August 16, 2025 (the "Initial Term"), unless earlier terminated in accordance with this Article 3 or unless individual Services are terminated earlier in accordance with Section 2.4. Upon the expiration of the Initial Term, this Agreement shall automatically terminate with respect to all Services that have not been extended pursuant to Section 3.2, subject to the survival provisions of Section 3.5(c).
Section 3.2 Extension of Individual Services.
(a) The Service Recipient may request an extension of any individual Service (or sub-service) beyond the Initial Term for a single Extension Period of up to thirty (30) additional calendar days (through September 15, 2025, at the latest) by providing written notice to the Service Provider not fewer than twenty (20) days prior to the scheduled expiration of the Initial Term. Such notice shall identify the specific Service(s) to be extended and the requested duration of the Extension Period.
(b) Any extension pursuant to this Section 3.2 shall be subject to the consent of the Service Provider, which consent shall not be unreasonably withheld, conditioned, or delayed. The Service Provider shall respond to any extension request within five (5) Business Days of receipt thereof.
(c) Any Extended Service shall be provided at one hundred twenty-five percent (125%) of the applicable Monthly Service Fee (pro-rated on a daily basis, based on a thirty (30)-day month) during the Extension Period. For the avoidance of doubt, the 125% rate applies only to the fee attributable to the specific Service(s) being extended, and not to Services that have been terminated or for which a Transition Completion Certificate has been executed.
(d) Under no circumstances shall any Service be provided beyond one hundred fifty (150) days following the Closing Date, which date is September 15, 2025. The Parties acknowledge and agree that September 15, 2025 represents the absolute outside date for the provision of any Service under this Agreement, regardless of any extension or other arrangement.
Section 3.3 Termination for Cause.
(a) Either Party may terminate this Agreement in its entirety, or with respect to any individual Service, upon written notice to the other Party if such other Party commits a material breach of any of its obligations under this Agreement and fails to cure such breach within fifteen (15) Business Days after receipt of written notice from the non-breaching Party specifying the nature of the breach in reasonable detail (a "Cure Period").
(b) Without limiting the generality of Section 3.3(a), the following shall constitute material breaches for purposes of this Agreement:
(i) By the Service Provider: any Service Failure that continues for more than ten (10) consecutive Business Days after the Service Provider receives written notice of such Service Failure from the Service Recipient; and
(ii) By the Service Recipient: failure to pay undisputed Monthly Service Fees within fifteen (15) Business Days after the date such fees are due in accordance with Section 4.3.
(c) For the avoidance of doubt, a good-faith dispute regarding the amount of any Monthly Service Fee or the existence of a Service Failure shall not constitute a material breach, provided that the disputing Party complies with its obligations under Sections 4.3 and 5.3, as applicable.
Section 3.4 Termination for Convenience.
(a) The Service Recipient may terminate this Agreement in its entirety upon thirty (30) days' prior written notice to the Service Provider at any time during the term. Such notice shall specify the effective date of termination, which shall be no earlier than the thirtieth (30th) day following delivery of such notice.
(b) The Service Provider may not terminate this Agreement for convenience, except with respect to a specific Service that becomes impracticable to provide due to the loss of a required third-party vendor relationship that is essential to the delivery of such Service. In such event, the Service Provider shall provide the Service Recipient with sixty (60) days' prior written notice (or such shorter period as is commercially reasonable under the circumstances) of its intention to terminate such Service, together with a description of the circumstances giving rise to such impracticability. The Service Provider shall have a good-faith obligation to identify and implement a commercially reasonable workaround prior to the effective date of any such termination and shall cooperate with the Service Recipient in transitioning to an alternative arrangement.
Section 3.5 Effect of Termination.
(a) Upon the termination or expiration of any Service (whether individually or as a result of the termination or expiration of this Agreement as a whole), the Service Provider shall: (i) cooperate in good faith with the Service Recipient to effect an orderly wind-down of such Service; (ii) deliver to the Service Recipient all data, records, files, and other materials belonging to the Service Recipient that are in the Service Provider's possession or control and that relate to such Service; and (iii) provide reasonable assistance in connection with the applicable Migration Plan, including knowledge transfer sessions and access to key personnel, for a period of up to fifteen (15) Business Days following the effective date of termination or expiration.
(b) All Service Recipient data (including PHI) in the Service Provider's possession or control shall be returned to the Service Recipient or securely destroyed in accordance with Section 7.4 within thirty (30) days following the effective date of termination or expiration of the applicable Service or this Agreement, as the case may be.
(c) Termination or expiration of this Agreement shall not relieve either Party of any obligation or liability that accrued prior to the effective date of such termination or expiration. Without limiting the foregoing, the following provisions shall survive the termination or expiration of this Agreement: Article 1 (Definitions), Article 6 (Intellectual Property), Article 7 (Confidentiality and Data Protection), Article 8 (Limitation of Liability and Indemnification), Article 9 (Insurance, solely with respect to the post-termination tail period), and Article 10 (General Provisions).
(d) Termination of this Agreement or any Service shall not relieve the Service Recipient of the obligation to pay for all Services rendered through the effective date of such termination, including any pro-rated Monthly Service Fees and any outstanding out-of-pocket expenses properly incurred in accordance with Section 4.5.
ARTICLE 4 — FEES AND PAYMENT
Section 4.1 Monthly Service Fees.
(a) In consideration of the provision of the Services, the Service Recipient shall pay to the Service Provider the Monthly Service Fees specified on Schedule A for each category of Service, as follows:
(i) Information Technology Services: One Hundred Eighty-Five Thousand Dollars ($185,000) per month;
(ii) Accounting Services: Ninety-Five Thousand Dollars ($95,000) per month; and
(iii) Human Resources Services: Sixty-Five Thousand Dollars ($65,000) per month.
(b) The total aggregate Monthly Service Fee for all categories of Services is Three Hundred Forty-Five Thousand Dollars ($345,000) per month.
(c) The Monthly Service Fees have been determined based on the estimated cost of the Service Provider's personnel time, allocated overhead (including facility costs, utilities, and administrative support), and third-party vendor costs (including license fees for the Vertex Health Technologies Inc. platform, the Hollowell Software platform, and the Ashbury & Co. platform), plus an administrative markup of five percent (5%) applied to such costs. The Parties acknowledge and agree that the Monthly Service Fees represent a reasonable allocation of costs and are not intended to generate a profit for the Service Provider beyond the administrative markup described in this Section 4.1(c).
(d) Monthly Service Fees for any partial month (including the first and last months of the term) shall be pro-rated on a per-diem basis, calculated by dividing the applicable Monthly Service Fee by thirty (30) and multiplying by the number of calendar days during which the applicable Service was provided during such partial month.
Section 4.2 Invoicing.
(a) The Service Provider shall submit itemized invoices to the Service Recipient on or before the fifth (5th) Business Day following the end of each calendar month during the term of this Agreement. Each invoice shall cover the Services provided during the immediately preceding calendar month.
(b) Each invoice shall include, at a minimum:
(i) a breakdown of fees by Service category (Information Technology, Accounting, and Human Resources);
(ii) a description of the specific services performed within each category during the applicable month;
(iii) hours expended by key personnel for any time-based services;
(iv) a line-item summary of any pass-through Third-Party Provider costs (including Vertex Health Technologies Inc. license fees, Hollowell Software license fees, Ashbury & Co. license fees, and any Prumvane & Reese LLP consultation fees);
(v) any out-of-pocket expenses invoiced in accordance with Section 4.5, together with supporting documentation; and
(vi) the aggregate amount due for the applicable month.
(c) All invoices shall be delivered by email to the Service Recipient's designated finance contact (to be notified to the Service Provider in writing within five (5) Business Days of the Closing Date), with a copy to Audrey Sato at asato@ardentcapital.com.
Section 4.3 Payment Terms.
(a) The Service Recipient shall pay each undisputed invoice within thirty (30) days after receipt of such invoice in accordance with Section 4.2. Payment shall be made by wire transfer of immediately available funds to the account designated in writing by the Service Provider.
(b) Any undisputed amounts not paid when due shall bear interest at the lesser of (i) one percent (1.0%) per month (twelve percent (12%) per annum), compounded monthly, or (ii) the maximum rate permitted by applicable Law, in each case calculated from the date such payment was due through and including the date of actual payment.
(c) The Service Recipient may withhold, in good faith, any portion of an invoice that is the subject of a bona fide dispute, provided that: (i) the Service Recipient pays all undisputed amounts when due in accordance with Section 4.3(a); (ii) the Service Recipient notifies the Service Provider in writing of the specific disputed items, together with a reasonably detailed explanation of the basis for such dispute, within ten (10) Business Days of receipt of the applicable invoice; and (iii) the Parties use good-faith efforts to resolve such dispute in accordance with the escalation procedures set forth in Section 5.3. Upon resolution of any such dispute, the Service Recipient shall promptly pay any amounts determined to be owed, together with interest thereon at the rate specified in Section 4.3(b) from the original due date.
Section 4.4 Taxes.
(a) All Monthly Service Fees and other amounts payable under this Agreement are exclusive of any applicable sales, use, value-added, goods and services, transfer, or similar taxes (collectively, "Transfer Taxes"), but are inclusive of the Service Provider's income taxes. For the avoidance of doubt, the Service Recipient shall not be responsible for any income, franchise, or similar taxes imposed on the Service Provider's net income.
(b) The Service Recipient shall be responsible for all Transfer Taxes imposed on or with respect to the Services provided under this Agreement. The Service Provider shall separately state any applicable Transfer Taxes on each invoice.
(c) Each Party shall cooperate with the other Party to minimize applicable Transfer Taxes to the extent lawfully permitted, including providing any applicable exemption certificates, resale certificates, or similar documentation.
Section 4.5 Out-of-Pocket Expenses.
(a) Reasonable, documented out-of-pocket expenses incurred by the Service Provider in connection with the provision of the Services shall be reimbursable by the Service Recipient, provided that any single expense exceeding Five Thousand Dollars ($5,000) shall require the prior written approval of the Service Recipient's Service Coordinator before being incurred. Reimbursable out-of-pocket expenses may include, without limitation, travel expenses, shipping and courier costs, and software license pass-through costs from Vertex Health Technologies Inc. and other Third-Party Providers to the extent such costs are not already included in the Monthly Service Fees.
(b) Out-of-pocket expenses shall be invoiced separately from, or as a clearly identified line item on, the monthly invoice described in Section 4.2, accompanied by reasonable supporting documentation (including receipts, vendor invoices, or other evidence of expenditure).
(c) The Service Provider shall use commercially reasonable efforts to minimize out-of-pocket expenses and shall comply with any expense policies or guidelines provided by the Service Recipient.
Section 4.6 Audit Rights.
(a) The Service Recipient shall have the right, upon not less than ten (10) Business Days' prior written notice to the Service Provider, to review and audit the Service Provider's books, records, and accounts relating to the calculation of Monthly Service Fees, out-of-pocket expenses, and any other amounts invoiced or payable under this Agreement, no more than once per calendar quarter during the term and for a period of twelve (12) months following the expiration or termination of this Agreement.
(b) Any such audit shall be conducted during normal business hours at the Service Provider's offices at 4200 West End Avenue, Suite 1100, Nashville, Tennessee 37205, and shall be performed by the Service Recipient's internal personnel or by an independent accounting firm engaged by the Service Recipient, in each case subject to customary confidentiality obligations.
(c) If an audit reveals that the Service Provider has overcharged the Service Recipient by an amount in excess of five percent (5%) of the aggregate amounts paid by the Service Recipient for the audited period, then (i) the Service Provider shall promptly refund the full amount of the overcharge to the Service Recipient, together with interest thereon at the rate specified in Section 4.3(b) from the date of overpayment, and (ii) the Service Provider shall reimburse the Service Recipient for the reasonable, documented out-of-pocket costs incurred by the Service Recipient in conducting such audit. If the overcharge is five percent (5%) or less, the Service Provider shall refund the overcharge but the cost of the audit shall be borne by the Service Recipient.
ARTICLE 5 — GOVERNANCE AND COORDINATION
Section 5.1 Service Coordinators.
(a) Each Party shall designate a Service Coordinator within five (5) Business Days of the Closing Date. The Service Coordinator shall serve as the primary point of contact for the day-to-day management, oversight, and coordination of the Services and shall have the authority to make operational decisions regarding the delivery of the Services on behalf of such Party (subject to any approval thresholds or limitations set forth in this Agreement).
(b) The initial Service Coordinators are:
(i) For the Service Provider: Karen Tolliver, Chief Operating Officer, MedVance Health Systems, Inc. Contact information is set forth on Schedule C.
(ii) For the Service Recipient: Audrey Sato, Principal, Portfolio Operations, Ardent Capital Management III LLC, acting on behalf of AHH. Contact information is set forth on Schedule C.
(c) Either Party may change its designated Service Coordinator at any time by providing at least ten (10) Business Days' prior written notice to the other Party, which notice shall include the name, title, and contact information of the replacement Service Coordinator. Any replacement Service Coordinator shall be an individual with sufficient seniority and authority to fulfill the responsibilities described in this Article 5.
Section 5.2 Regular Meetings.
(a) The Service Coordinators (together with such additional representatives as each may designate) shall meet at least bi-weekly during the first sixty (60) days of the term (i.e., through June 17, 2025) and at least monthly thereafter for the remainder of the term. Meetings may be conducted in person at a mutually agreed location or via video conference (Northgate Data Systems, Calderon Software, or equivalent).
(b) Each regularly scheduled meeting shall address the following standing agenda items, at a minimum:
(i) status of each category of Services and each sub-service within such category;
(ii) open issues, action items, and escalation matters;
(iii) progress against the applicable Migration Plan, including any deviations from the target transition dates;
(iv) staffing changes or anticipated changes that may affect the delivery of the Services;
(v) anticipated changes in scope or timeline;
(vi) anticipated wind-down timing for each Service; and
(vii) any other matters that either Service Coordinator wishes to raise for discussion.
(c) The Service Recipient's Service Coordinator (or her designee) shall be responsible for preparing and distributing a written agenda at least two (2) Business Days in advance of each regularly scheduled meeting, and the Service Provider's Service Coordinator (or her designee) shall be responsible for distributing written meeting minutes within three (3) Business Days following each meeting.
Section 5.3 Escalation Procedure.
(a) In the event of any dispute, disagreement, or issue arising in connection with the Services that cannot be resolved by the Service Coordinators within five (5) Business Days of the matter first being raised, such matter shall be escalated to the following senior representatives of the Parties:
(i) For the Service Provider: Daniel Burch, Chief Executive Officer, MedVance Health Systems, Inc.
(ii) For the Service Recipient: Thomas Kearney, Vice President, Healthcare Investing, Ardent Capital Management III LLC, acting on behalf of AHH.
(b) The senior representatives shall use good-faith efforts to resolve the escalated matter within ten (10) Business Days of such escalation. During this escalation period, the Parties shall continue to perform their respective obligations under this Agreement in all material respects, and the Service Provider shall continue to provide the Services (other than any Service that is the direct subject of the dispute and that cannot reasonably be performed during the pendency of the dispute).
(c) If the escalated matter is not resolved within the ten (10) Business Day period specified in Section 5.3(b), either Party may refer the matter to the dispute resolution procedures set forth in Section 10.11.
Section 5.4 Reporting.
(a) The Service Provider shall deliver to the Service Recipient a written monthly status report within five (5) Business Days after the end of each calendar month during the term. Each monthly status report shall cover the following topics:
(i) a description of the Services performed during the applicable month, organized by Service category;
(ii) key performance metrics and Service Level compliance data (including a summary of any Service Level failures during the applicable month);
(iii) a summary of all open issues, pending action items, and escalation matters;
(iv) any anticipated changes in scope, timeline, or staffing;
(v) migration readiness assessment and progress against the Migration Plan; and
(vi) any other matters that the Service Provider reasonably believes should be brought to the Service Recipient's attention.
(b) The monthly status report shall be delivered by email to the Service Recipient's Service Coordinator, with a copy to such additional recipients as the Service Recipient may designate from time to time.
Section 5.5 Migration Plan.
(a) Within fifteen (15) days after the Closing Date (i.e., by May 3, 2025), the Parties shall collaborate in good faith to finalize a written Migration Plan for each category of Services. The Migration Plan shall serve as the roadmap for the orderly transition of each Service from the Service Provider's systems and personnel to the Service Recipient's own systems and personnel.
(b) The Migration Plan shall address, at a minimum, the following matters for each Service (or sub-service):
(i) target transition date;
(ii) resource requirements (personnel, systems, and budget);
(iii) data migration and testing protocols, including data extraction formats, data mapping specifications, and data validation procedures;
(iv) parallel-run periods (if applicable), during which both the Service Provider's legacy systems and the Service Recipient's target systems will operate simultaneously to ensure continuity;
(v) acceptance criteria for determining when a Service has been successfully migrated;
(vi) risk factors and contingency plans; and
(vii) the form of Transition Completion Certificate (substantially in the form attached as Schedule B) to be executed upon successful migration.
(c) The Service Provider shall provide reasonable cooperation and assistance in connection with the Migration Plan, including knowledge transfer sessions, documentation of processes and workflows, access to key personnel for training and Q&A sessions, and reasonable assistance with data extraction and formatting. Such cooperation and assistance shall be provided at no additional charge beyond the Monthly Service Fees, provided that any assistance requiring resources materially in excess of those contemplated by the Migration Plan shall be subject to the mutual agreement of the Parties regarding scope and cost.
(d) Each Party shall designate such additional personnel as may be reasonably necessary to participate in the development and implementation of the Migration Plan and shall ensure that such personnel are available at reasonable times upon reasonable notice.
ARTICLE 6 — INTELLECTUAL PROPERTY
Section 6.1 Ownership.
(a) Each Party retains all right, title, and interest in and to its pre-existing intellectual property, including all patents, copyrights, trademarks, trade secrets, know-how, methodologies, tools, templates, and other proprietary materials owned by such Party as of the Closing Date or developed independently of this Agreement.
(b) No license, ownership interest, or other right in or to the Service Provider's intellectual property is granted to the Service Recipient by virtue of this Agreement, whether by implication, estoppel, or otherwise, except the limited, non-exclusive, non-transferable, non-sublicensable right to receive the benefit of the Services during the term of this Agreement.
(c) All work product, data, reports, analyses, and deliverables generated by the Service Provider exclusively for the Service Recipient in the course of performing the Services (collectively, "Work Product") shall be the sole and exclusive property of the Service Recipient. To the extent any Work Product constitutes a "work made for hire" under the United States Copyright Act, such Work Product shall be deemed a work made for hire. To the extent any Work Product does not so qualify, the Service Provider hereby irrevocably assigns to the Service Recipient all right, title, and interest in and to such Work Product, including all intellectual property rights therein.
(d) Notwithstanding Section 6.1(c), the Service Provider retains the right to use its general knowledge, skills, experience, and methodologies (including any tools, templates, or processes of general applicability) that are not proprietary to the Service Recipient and that are used or developed in the course of performing the Services.
Section 6.2 Third-Party Software and Licenses.
(a) To the extent the Services require access to or use of third-party software, platforms, or tools (including the Vertex Health Technologies Inc. platform, the Hollowell Software accounting platform, and the Ashbury & Co. HRIS platform), such access shall be provided to the Service Recipient solely during the term of this Agreement and solely for the purpose of receiving the applicable Services, subject to the terms and conditions of the applicable third-party license agreements.
(b) The Service Recipient shall comply with all third-party license terms and conditions that have been communicated to it in writing by the Service Provider. The Service Recipient shall not use, copy, modify, reverse-engineer, or distribute any third-party software except as expressly permitted by the applicable license agreement and this Agreement.
(c) The Service Provider shall use commercially reasonable efforts to assist the Service Recipient in obtaining its own licenses, subscriptions, or other rights for any third-party software, platform, or tool that the Service Recipient will need in order to operate independently following the expiration or termination of the Services. Such assistance may include providing introductions to the relevant third-party vendors, sharing relevant technical specifications, and facilitating data portability, but shall not require the Service Provider to incur material costs or obligations on behalf of the Service Recipient.
ARTICLE 7 — CONFIDENTIALITY AND DATA PROTECTION
Section 7.1 Confidentiality Obligations.
(a) Each Party (the "Receiving Party") shall hold in strict confidence all Confidential Information of the other Party (the "Disclosing Party") received in connection with this Agreement and shall not disclose, publish, or disseminate such Confidential Information to any third party, except: (i) to the Receiving Party's officers, directors, employees, agents, advisors, and representatives who have a need to know such information for the purposes of this Agreement and who are bound by confidentiality obligations at least as restrictive as those set forth herein; and (ii) as otherwise expressly permitted by this Agreement or agreed in writing by the Disclosing Party.
(b) The obligations of confidentiality set forth in this Section 7.1 shall not apply to information that: (i) is or becomes publicly available through no fault of the Receiving Party or its representatives; (ii) was already known to the Receiving Party, without restriction on disclosure, at the time of disclosure by the Disclosing Party, as demonstrated by competent evidence; (iii) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information, as demonstrated by competent evidence; or (iv) is received by the Receiving Party from a third party that is not, to the Receiving Party's knowledge, subject to any obligation of confidentiality with respect thereto.
(c) Notwithstanding the foregoing, the Receiving Party may disclose Confidential Information of the Disclosing Party to the extent required by applicable Law or legal process (including a subpoena, civil investigative demand, or order of a court or governmental authority), provided that the Receiving Party: (i) provides the Disclosing Party with prompt written notice of such requirement (to the extent not prohibited by applicable Law); (ii) cooperates with the Disclosing Party, at the Disclosing Party's expense, in seeking a protective order or other appropriate remedy; and (iii) discloses only such Confidential Information as is legally required.
(d) The confidentiality obligations set forth in this Section 7.1 shall survive for three (3) years following the expiration or termination of this Agreement; provided, however, that the confidentiality obligations with respect to any Confidential Information constituting a trade secret shall survive for so long as such information retains its status as a trade secret under applicable Law.
Section 7.2 HIPAA Compliance.
(a) To the extent the Services involve the creation, receipt, maintenance, or transmission of Protected Health Information (as defined under HIPAA), the Parties acknowledge and agree that the Business Associate Agreement entered into as of the Closing Date pursuant to Section 5.14(c) of the Purchase Agreement (the "BAA") governs the treatment of such PHI. The terms of the BAA are incorporated herein by reference to the extent applicable to the Services, and in the event of any conflict between this Agreement and the BAA with respect to the handling of PHI, the BAA shall control.
(b) The Service Provider shall implement and maintain administrative, physical, and technical safeguards in compliance with the HIPAA Security Rule (45 C.F.R. Part 160 and Subparts A and C of Part 164) for all electronic PHI created, received, maintained, or transmitted by the Service Provider in connection with the Services. Such safeguards shall be at least as stringent as the safeguards maintained by MedVance as of the Closing Date.
(c) Any Breach of Unsecured PHI (as defined under 45 C.F.R. § 164.402) occurring in connection with the Services shall be reported by the Service Provider to the Service Recipient's Service Coordinator and the Service Recipient's Privacy Officer (or such other individual as the Service Recipient may designate in writing) within forty-eight (48) hours of the Service Provider's discovery of such Breach. The Service Provider's notification shall include, to the extent known at the time: (i) the nature of the Breach; (ii) the categories of PHI involved; (iii) the number of individuals affected; (iv) the steps taken or proposed to be taken to investigate and mitigate the Breach; and (v) contact information for the individual coordinating the Service Provider's response.
(d) The Service Provider shall cooperate fully with the Service Recipient in investigating and responding to any such Breach, including assisting with required notifications to affected individuals, the U.S. Department of Health and Human Services, and applicable state regulatory authorities, and shall bear the cost of any such notifications to the extent the Breach resulted from the Service Provider's acts or omissions.
Section 7.3 Data Security.
(a) The Service Provider shall maintain cybersecurity controls and information security practices consistent with those in place as of the Closing Date, including, without limitation:
(i) enterprise-grade firewalls and network segmentation;
(ii) intrusion detection and intrusion prevention systems;
(iii) encryption of data in transit (using TLS 1.2 or higher) and at rest (using AES-256 or equivalent);
(iv) multi-factor authentication for all remote access to systems used to provide the Services;
(v) endpoint detection and response (EDR) solutions on all workstations and servers;
(vi) security information and event management (SIEM) monitoring; and
(vii) regular vulnerability scanning and patch management.