engagement-letter-ardent-capital.docx

1001-00003 · Client 1001 · Engagement

engagement-letter-ardent-capital.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law One World Financial Center 200 Liberty Street, 40th Floor New York, NY 10281 Telephone: (212) 509-7200 Facsimile: (212) 509-7201 www.calderwoodharkness.com

January 15, 2024

VIA ELECTRONIC MAIL AND HAND DELIVERY

Marcus Ainsworth Managing Partner & Co-Founder Ardent Capital Management LLC (as General Partner of Ardent Capital Partners III LP) 590 Madison Avenue, 34th Floor New York, NY 10022

Re: Engagement of Calderwood & Harkness LLP — Proposed Acquisition of Cardinal Peak Industries, Inc. Matter No.: 2024-M&A-0142

Dear Mr. Ainsworth:

We appreciate the confidence you and your colleagues at Ardent Capital Management have placed in Calderwood & Harkness LLP. This letter sets forth the terms and conditions under which our Firm will represent Ardent Capital Partners III LP in the proposed acquisition of Cardinal Peak Industries, Inc. We ask that you review this letter carefully and, if the terms are acceptable, sign and return a copy to us so that we may proceed with the engagement.

1. Purpose and Scope of Engagement

Calderwood & Harkness LLP ("we," "us," or the "Firm") is pleased to confirm our engagement to represent Ardent Capital Partners III LP, a Delaware limited partnership ("Ardent Capital" or the "Client"), and its affiliates, including any acquisition vehicle formed for purposes of the transaction described herein (currently expected to be a newly formed Delaware corporation organized under the laws of the State of Delaware), in connection with the proposed acquisition (the "Transaction") of substantially all of the assets of Cardinal Peak Industries, Inc., a Delaware corporation ("CPI" or the "Target"). As we understand it, CPI is a multi-site healthcare-services provider that currently owns and operates a network of outpatient rehabilitation and behavioral health facilities across multiple states, including facilities licensed or certified in approximately seventeen states throughout the eastern and central United States.

The scope of our representation in connection with the Transaction will include the following:

(a) Transaction Documents. Negotiation, drafting, and review of the asset purchase agreement and all related ancillary transaction documents, including but not limited to bills of sale, instruments of assignment and assumption, escrow agreements, earnout agreements, employment and non-competition agreements with key management personnel of the Target, intellectual property assignment agreements, transition services agreements, and any other agreements or instruments reasonably necessary to consummate the Transaction.

(b) Due Diligence. Comprehensive due diligence review and analysis of the Target's business, assets, material contracts, regulatory compliance posture, pending and threatened litigation, employment and labor matters (including employee benefit plans), intellectual property portfolio, real estate leases and owned properties, and environmental matters. This will include the preparation and management of a due diligence request list, the review and analysis of documents produced by the Target and its advisors in the virtual data room, and the preparation of a written due diligence summary report for the Client's investment committee.

(c) Advisor Coordination. Coordination with the Client's financial advisor, Graystone Partners LLC, the Client's accounting and financial due diligence advisor, Ashford & Creighton LLP, and any regulatory, tax, or other specialist counsel retained by the Client or the Firm in connection with the Transaction. This coordination will encompass the sharing of information among advisors (subject to applicable confidentiality restrictions), the alignment of workstreams and timelines, and the integration of findings from financial, tax, and legal due diligence into the Transaction documentation.

(d) Acquisition Financing. Advice regarding acquisition financing for the Transaction, including the review and negotiation of commitment letters, credit agreements, security documents, guaranty agreements, intercreditor agreements, and related loan documentation to be entered into by the Client, its acquisition vehicle, or their affiliates in connection with the financing of the Transaction.

(e) Legal Opinions. Preparation of legal opinions as may be required by the lenders providing acquisition financing, including customary opinions regarding due organization, authorization, execution, delivery, enforceability, and such other matters as may be reasonably requested by the lenders or their counsel.

(f) Representations and Warranties Insurance. Advice regarding the procurement of a representations and warranties insurance policy in connection with the Transaction, including coordination with the Client's insurance broker and the underwriting counsel designated by the selected insurer, review of the policy form and any amendments or endorsements thereto, and negotiation of terms and conditions of coverage.

(g) Healthcare Regulatory Matters. Advice on healthcare regulatory matters arising in connection with the Transaction, including coordination with specialist healthcare regulatory counsel, Hargrove, Sinclair & Demarest LLP, regarding the Target's compliance with applicable federal and state healthcare laws and regulations, licensure and certification requirements, Medicare and Medicaid participation, Stark Law and Anti-Kickback Statute compliance, HIPAA privacy and security matters, and any required change-of-ownership or change-of-control notifications to governmental authorities and payors.

(h) Tax Structuring. Tax structuring advice in connection with the Transaction, including analysis of the asset purchase structure from a federal and state income tax perspective, advice regarding the allocation of the purchase price among the acquired assets pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and related Treasury Regulations, and advice on other tax matters arising in connection with the Transaction, including potential state and local transfer tax implications and sales and use tax considerations.

(i) Governmental and Regulatory Filings. Preparation and filing of any required governmental or regulatory filings or notices in connection with the Transaction, including, without limitation, any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, any state healthcare regulatory change-of-ownership notifications, and any other filings or notices required by applicable law.

(j) Post-Closing Matters. Assistance with post-closing matters arising out of the Transaction, including the working capital adjustment process, earnout calculation and administration, escrow release procedures, and the assertion, defense, and resolution of indemnification claims under the definitive transaction documents.

For the avoidance of doubt, the scope of this engagement does not include the representation of the Client or any of its affiliates in any pending or future litigation involving the Target, including the pre-existing wage-and-hour class action litigation currently pending against CPI in the United States District Court for the Eastern District of Pennsylvania (captioned Rodriguez et al. v. Cardinal Peak Industries, Inc., Case No. 2:23-cv-04871), or any other threatened or pending litigation, arbitration, or administrative proceedings. Any such representation would require a separate engagement letter and would be subject to a separate conflicts analysis and fee arrangement. Similarly, this engagement does not extend to any post-closing operational, regulatory, or compliance matters unrelated to the Transaction documents and the rights and obligations arising thereunder, unless separately agreed in writing.

2. Staffing

We have assembled a team of experienced attorneys to staff this engagement efficiently and effectively. The core members of the deal team are as follows:

Beatrice Holloway, Partner — Ms. Holloway will serve as the Responsible Partner for this engagement and will have overall supervisory responsibility for all aspects of the representation, including the strategic direction of the Transaction, negotiation of key terms of the definitive agreements, and management of the client relationship. Ms. Holloway has over twenty-two years of experience representing private equity sponsors and strategic acquirors in complex mergers and acquisitions, with a particular emphasis on healthcare transactions.

James Prentice, Partner — Mr. Prentice will serve as the Billing Partner for this engagement and will be the primary point of contact for all fee-related inquiries. Mr. Prentice will also contribute substantively to the negotiation and drafting of the definitive transaction documents and the acquisition financing documentation.

Derek Okonkwo, Associate — Mr. Okonkwo will serve as the Lead Associate for the Transaction and will be responsible for the day-to-day management of the deal process, including the drafting and negotiation of transaction documents, the organization and coordination of due diligence, the management of closing checklists and deliverables, and the coordination of workstreams among the Client's advisors. Mr. Okonkwo will be the primary day-to-day contact at the Firm for this engagement.

Tiffany Rosenthal, Associate — Ms. Rosenthal will serve as a Working Associate on the Transaction, supporting the due diligence process, reviewing and analyzing material contracts and regulatory filings, and assisting in the preparation of ancillary transaction documents. Ms. Rosenthal has significant experience in the healthcare sector and has supported a number of complex acquisition transactions during her tenure at the Firm.

Sylvia Hartwell, Partner (Tax) — Ms. Hartwell will provide specialist tax advice in connection with the Transaction, including tax structuring analysis, advice on the allocation of the purchase price among the acquired assets under Section 1060 of the Code, and review of tax-related provisions of the definitive transaction documents, including representations, covenants, and indemnification provisions.

From time to time, additional attorneys, paralegals, and support staff may be assigned to the engagement as the needs of the Transaction require. We will endeavor to staff the engagement in a manner that is both cost-effective and responsive to the Transaction timeline. The Firm will keep the Client informed of any significant staffing changes, particularly with respect to the core deal team members identified above.

We understand that the principal client contacts at Ardent Capital Management LLC for this engagement will be Priya Mehta-Sullivan, Partner and Head of Healthcare Investments, and Connor Briggs, Vice President on the Healthcare Deal Team, with overall authority and strategic direction to be provided by you, Marcus Ainsworth, as Managing Partner and Co-Founder. Unless otherwise directed, we will direct our day-to-day communications regarding the Transaction primarily to Ms. Mehta-Sullivan and Mr. Briggs, and we will ensure that you are copied on all material correspondence and deliverables.

3. Fee Arrangements

3.1 Hourly Rates

Our fees for this engagement will be based on the time spent by attorneys and other professionals on the matter at their respective standard hourly rates. Time is recorded in increments of one-tenth of an hour. The Firm's current standard hourly rates for various categories of timekeepers range as follows:

The current individual hourly rates for the core members of the deal team staffed on this engagement are as follows:

These rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each year. The Firm will notify the Client in advance of any changes to the hourly rates applicable to this engagement. Any rate adjustment that takes effect during the pendency of this engagement will apply to time recorded on or after the effective date of such adjustment.

3.2 Expenses and Disbursements

In addition to professional fees for legal services, the Client will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements may include, but are not limited to, the following:

• Filing fees and recording charges;

• Travel expenses reasonably incurred in connection with the Transaction (including airfare, ground transportation, lodging, and meals), in accordance with the Firm's standard travel reimbursement policies;

• Document reproduction, printing, and scanning costs;

• Overnight delivery and courier charges;

• Computerized legal research charges (including Westmark Data Systems, Sundial Solutions, and other research platforms);

• Long-distance telephone and conference call charges;

• Third-party vendor costs, including costs associated with data room access, e-discovery platforms, and corporate search and filing services; and

• Court and governmental filing fees.

Expenses for outside specialists or consultants retained at the Client's direction in connection with the Transaction — such as healthcare regulatory counsel (Hargrove, Sinclair & Demarest LLP), environmental consultants, title companies, survey companies, or other third-party advisors — will generally be billed directly by those parties to the Client. In the event that such expenses are advanced by the Firm on the Client's behalf, they will be passed through to the Client at cost, without markup, and will be included as a separate line item on the Firm's monthly invoice.

3.3 Billing and Payment

The Firm will render invoices to the Client on a monthly basis, generally within fifteen (15) business days following the end of each calendar month. Each invoice will include a summary of professional time recorded by timekeeper, including the date, a narrative description of the work performed, and the time spent, together with an itemization of out-of-pocket expenses and disbursements incurred during the billing period. All invoices are due and payable within thirty (30) days of the invoice date. The Firm reserves the right to charge interest at the rate of one percent (1%) per month (or the maximum rate permitted by applicable law, if lower) on any amounts that remain unpaid more than sixty (60) days after the invoice date.

The Billing Partner for this engagement, James Prentice, will be the primary point of contact at the Firm for all billing inquiries, including questions regarding the scope of work reflected on any invoice, the allocation of time among timekeepers, or the nature or amount of any disbursement. Mr. Prentice can be reached directly at (212) 509-7244 or via email at jprentice@calderwoodharkness.com.

All invoices should be directed to:

Ardent Capital Management LLC 590 Madison Avenue, 34th Floor New York, NY 10022

Attention: Accounts Payable

with a copy (by email) to Connor Briggs (cbriggs@ardentcapital.com)

3.4 Retainer. No retainer deposit is required at this time in connection with the commencement of this engagement. The Firm reserves the right to request a retainer deposit in the event of any material change in the scope or nature of the engagement, any significant escalation in anticipated fees and expenses, or in the event that any invoices rendered hereunder remain unpaid beyond the payment terms set forth in Section 3.3. Any retainer deposit received will be held by the Firm in a client trust account in accordance with the New York Rules of Professional Conduct and will be applied against the final invoice rendered in connection with this engagement, with any remaining balance returned promptly to the Client.

4. Client Identification and Conflicts

The Client for purposes of this engagement is Ardent Capital Partners III LP, a Delaware limited partnership, together with any acquisition vehicle designated by the Client and formed for purposes of consummating the Transaction (the "Acquisition Vehicle"). Ardent Capital Management LLC, in its capacity as the General Partner of Ardent Capital Partners III LP, is authorized to provide instructions and strategic direction with respect to this engagement and to receive communications on behalf of the Client. For the avoidance of doubt, this engagement does not extend to the representation of Ardent Capital Management LLC in its individual capacity, any other fund managed or advised by Ardent Capital Management LLC, or any portfolio company of Ardent Capital Partners III LP, except to the extent such entity is the Acquisition Vehicle or is otherwise expressly identified as a client in a separate engagement letter.

The Firm has conducted a conflicts check based on the information currently available to us, including the identities of the Client, the Target, the principals and key personnel of each, the Client's financial advisor (Graystone Partners LLC), and the Target's known advisors. Based on the results of that conflicts check as of the date of this letter, we are not aware of any conflict of interest that would prevent us from undertaking this representation in accordance with the New York Rules of Professional Conduct.

The Client acknowledges and understands that Calderwood & Harkness LLP is a large, full-service law firm with many attorneys and a diverse client base, and that the Firm may currently represent, or may in the future undertake the representation of, other clients whose interests may be adverse to the interests of the Client in matters that are unrelated to this engagement and the Transaction. By executing this letter, the Client consents to the Firm's continued representation of such other clients in matters that are not substantially related to this engagement, provided that the Firm will not represent any party adverse to the Client in this specific Transaction, or in any matter substantially related to this Transaction, without the Client's prior written consent. This consent does not extend to any matter in which the Firm possesses confidential information of the Client that could be material to the other representation.

This engagement is limited to the Transaction described in Section 1 of this letter and does not extend to any other matters or transactions. Any additional representation of the Client or its affiliates by the Firm would require a separate engagement letter and would be subject to a separate conflicts analysis and fee arrangement.

5. Confidentiality

The Firm will maintain the confidentiality of all information provided by or on behalf of the Client in connection with this engagement, in accordance with our professional obligations under the New York Rules of Professional Conduct and applicable law. We recognize the sensitive and proprietary nature of the information that the Client will share with us in connection with the Transaction, including the Client's investment strategy, financial projections, valuation analyses, fund-level information, and other confidential business information.

The Client acknowledges and agrees that the Firm may disclose confidential information to the extent necessary or appropriate to perform the services contemplated by this engagement. Such disclosures may include, without limitation, the sharing of information in connection with due diligence inquiries directed to the Target and its advisors, the negotiation of transaction documents with the Target and its counsel, the preparation and filing of governmental or regulatory filings, the delivery of legal opinions to lenders and other third parties as contemplated by Section 1 of this letter, and the coordination with the Client's other advisors. The Client's authorization to the Firm to undertake the foregoing activities shall constitute the Client's consent to any disclosures reasonably necessary in furtherance thereof.

The existence and terms of this engagement and the identity of the Client shall be treated as confidential by the Firm and shall not be disclosed to any third party except: (a) as required by applicable law, regulation, or court order; (b) as required by the Firm's professional obligations; (c) as disclosed with the Client's prior written consent; or (d) to the extent reasonably necessary in connection with the Firm's own internal administration, conflicts checking, and professional responsibility compliance.

6. Document Retention and Files

Upon conclusion of this engagement, whether by completion of the Transaction, termination of the engagement, or otherwise, the Firm will retain the engagement files in accordance with our standard document retention policy, as may be amended from time to time.

The Client may request the return of original documents at any time during or after the engagement. The Firm may retain copies of documents and work product for its own records, including for purposes of complying with professional obligations, responding to any future inquiries regarding the engagement, and protecting the Firm's interests in connection with any disputes.

Unless the Client provides written instructions to the contrary, the Firm's general policy is to retain closed-matter files for a period of ten (10) years following the conclusion of the engagement. After the expiration of such retention period, the Firm may destroy or dispose of the files in accordance with applicable rules of professional conduct and the Firm's internal policies, without further notice to the Client. Certain categories of documents, such as original executed agreements, stock certificates, and similar instruments of legal significance, may be returned to the Client prior to file destruction or retained for a longer period at the Firm's discretion.

7. Limitation of Liability

The Client acknowledges that the Firm has made no guarantees, promises, or representations regarding the outcome of the Transaction or any aspect of this engagement. The results of any legal matter depend upon range factors, including the specific facts and circumstances involved, the applicable law, the actions and positions taken by opposing parties, and the decisions of courts, regulatory agencies, and other governmental authorities. While we will use our best professional efforts to represent the Client's interests zealously and competently, we cannot and do not guarantee any particular result.

The Firm shall not be liable for any losses, damages, costs, expenses, or claims arising from or related to: (a) the Client's failure to provide complete, accurate, and timely information to the Firm; (b) the Client's actions or omissions with respect to the Transaction, including any decision by the Client to proceed with or refrain from proceeding with the Transaction or any aspect thereof; (c) the actions or omissions of third parties, including the Target, the Target's advisors, lenders, regulatory authorities, or other parties to the Transaction; or (d) any change in applicable law, regulation, or interpretation thereof occurring after the date of any advice rendered by the Firm. Nothing in this Section 7 shall be construed to limit the Firm's liability for its own negligence, willful misconduct, or breach of professional obligations.

8. Termination

Either party may terminate this engagement at any time upon written notice to the other party, subject to the Firm's professional obligations under the New York Rules of Professional Conduct, including the obligation to provide reasonable notice of withdrawal to the Client and to take steps reasonably practicable to protect the Client's interests during any transition period. In the event of termination by either party, the Firm will cooperate with the Client and any successor counsel to facilitate an orderly transition of the representation, including the prompt transfer of files and work product.

Upon termination of this engagement, the Client will remain responsible for payment of all fees for professional services rendered and all expenses and disbursements incurred through the effective date of termination, in accordance with the terms set forth in Section 3 of this letter. The Firm will render a final invoice within thirty (30) days following the effective date of termination.

The Firm's obligations under this letter regarding confidentiality (Section 5) and document retention (Section 6), as well as any accrued rights of either party under this letter, shall survive the termination of the engagement.

9. Governing Law and Dispute Resolution

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

In the event of any dispute, controversy, or claim arising out of or relating to this engagement letter, the Firm's representation of the Client, or the fees charged in connection therewith (a "Dispute"), the parties agree to first attempt in good faith to resolve such Dispute through informal negotiation. If the Dispute is not resolved through informal negotiation within thirty (30) days after written notice of the Dispute is delivered by one party to the other, then such Dispute shall be finally resolved by binding arbitration administered in New York, New York, in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted before a single arbitrator selected in accordance with such rules. The arbitrator's award shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate under the circumstances.

10. Miscellaneous

This letter constitutes the entire agreement between the Firm and the Client with respect to the terms and conditions of this engagement and supersedes all prior or contemporaneous oral or written communications, proposals, understandings, or agreements between the parties relating to the subject matter hereof.

No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by both the Firm and the Client. No failure or delay by either party in exercising any right or remedy under this letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise thereof or the exercise of any other right or remedy.

This letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this letter by facsimile transmission or by electronic transmission in portable document format (PDF) shall be as effective as delivery of a manually executed counterpart.

11. Acceptance

We are enthusiastic about the opportunity to work with you and the Ardent Capital team on this important transaction and look forward to a productive and successful engagement. If the terms set forth in this letter are acceptable, please indicate your agreement by signing and dating a copy of this letter in the space provided below and returning it to us at your earliest convenience. Upon receipt of your executed copy, we will commence work immediately.

Please do not hesitate to contact Beatrice Holloway at (212) 509-7238 or bholloway@calderwoodharkness.com, or Derek Okonkwo at (212) 509-7312 or dokonkwo@calderwoodharkness.com, should you have any questions regarding this letter or the engagement generally. We look forward to working with you.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Beatrice Holloway

Title: Partner

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Ardent Capital Partners III LP, hereby acknowledges receipt of this engagement letter, confirms that the terms and conditions set forth herein are acceptable, and agrees to be bound thereby.

ARDENT CAPITAL PARTNERS III LP

By: Ardent Capital Management LLC, its General Partner

By: ________

Name: Marcus Ainsworth

Title: Managing Partner & Co-Founder

Date: ________

cc: Priya Mehta-Sullivan, Partner, Head of Healthcare Investments — Ardent Capital Management LLC cc: Connor Briggs, Vice President, Healthcare Deal Team — Ardent Capital Management LLC cc: James Prentice, Partner — Calderwood & Harkness LLP

Timekeeper Category	Hourly Rate Range
Partners	$1,250 – $1,650 per hour
Senior Associates / Counsel	$850 – $1,100 per hour
Associates	$625 – $850 per hour
Paralegals / Legal Assistants	$350 – $475 per hour
Timekeeper	Current Hourly Rate
Beatrice Holloway (Partner)	$1,575 per hour
James Prentice (Partner)	$1,500 per hour
Sylvia Hartwell (Partner, Tax)	$1,525 per hour
Derek Okonkwo (Associate)	$875 per hour
Tiffany Rosenthal (Associate)	$725 per hour

CALDERWOOD & HARKNESS LLP Attorneys at Law One World Financial Center 200 Liberty Street, 40th Floor New York, NY 10281 Telephone: (212) 509-7200 Facsimile: (212) 509-7201 www.calderwoodharkness.com
January 15, 2024
VIA ELECTRONIC MAIL AND HAND DELIVERY
Marcus Ainsworth Managing Partner & Co-Founder Ardent Capital Management LLC (as General Partner of Ardent Capital Partners III LP) 590 Madison Avenue, 34th Floor New York, NY 10022
Re: Engagement of Calderwood & Harkness LLP — Proposed Acquisition of Cardinal Peak Industries, Inc. Matter No.: 2024-M&A-0142
Dear Mr. Ainsworth:
We appreciate the confidence you and your colleagues at Ardent Capital Management have placed in Calderwood & Harkness LLP. This letter sets forth the terms and conditions under which our Firm will represent Ardent Capital Partners III LP in the proposed acquisition of Cardinal Peak Industries, Inc. We ask that you review this letter carefully and, if the terms are acceptable, sign and return a copy to us so that we may proceed with the engagement.
1. Purpose and Scope of Engagement
Calderwood & Harkness LLP ("we," "us," or the "Firm") is pleased to confirm our engagement to represent Ardent Capital Partners III LP, a Delaware limited partnership ("Ardent Capital" or the "Client"), and its affiliates, including any acquisition vehicle formed for purposes of the transaction described herein (currently expected to be a newly formed Delaware corporation organized under the laws of the State of Delaware), in connection with the proposed acquisition (the "Transaction") of substantially all of the assets of Cardinal Peak Industries, Inc., a Delaware corporation ("CPI" or the "Target"). As we understand it, CPI is a multi-site healthcare-services provider that currently owns and operates a network of outpatient rehabilitation and behavioral health facilities across multiple states, including facilities licensed or certified in approximately seventeen states throughout the eastern and central United States.
The scope of our representation in connection with the Transaction will include the following:
(a) Transaction Documents. Negotiation, drafting, and review of the asset purchase agreement and all related ancillary transaction documents, including but not limited to bills of sale, instruments of assignment and assumption, escrow agreements, earnout agreements, employment and non-competition agreements with key management personnel of the Target, intellectual property assignment agreements, transition services agreements, and any other agreements or instruments reasonably necessary to consummate the Transaction.
(b) Due Diligence. Comprehensive due diligence review and analysis of the Target's business, assets, material contracts, regulatory compliance posture, pending and threatened litigation, employment and labor matters (including employee benefit plans), intellectual property portfolio, real estate leases and owned properties, and environmental matters. This will include the preparation and management of a due diligence request list, the review and analysis of documents produced by the Target and its advisors in the virtual data room, and the preparation of a written due diligence summary report for the Client's investment committee.
(c) Advisor Coordination. Coordination with the Client's financial advisor, Graystone Partners LLC, the Client's accounting and financial due diligence advisor, Ashford & Creighton LLP, and any regulatory, tax, or other specialist counsel retained by the Client or the Firm in connection with the Transaction. This coordination will encompass the sharing of information among advisors (subject to applicable confidentiality restrictions), the alignment of workstreams and timelines, and the integration of findings from financial, tax, and legal due diligence into the Transaction documentation.
(d) Acquisition Financing. Advice regarding acquisition financing for the Transaction, including the review and negotiation of commitment letters, credit agreements, security documents, guaranty agreements, intercreditor agreements, and related loan documentation to be entered into by the Client, its acquisition vehicle, or their affiliates in connection with the financing of the Transaction.
(e) Legal Opinions. Preparation of legal opinions as may be required by the lenders providing acquisition financing, including customary opinions regarding due organization, authorization, execution, delivery, enforceability, and such other matters as may be reasonably requested by the lenders or their counsel.
(f) Representations and Warranties Insurance. Advice regarding the procurement of a representations and warranties insurance policy in connection with the Transaction, including coordination with the Client's insurance broker and the underwriting counsel designated by the selected insurer, review of the policy form and any amendments or endorsements thereto, and negotiation of terms and conditions of coverage.
(g) Healthcare Regulatory Matters. Advice on healthcare regulatory matters arising in connection with the Transaction, including coordination with specialist healthcare regulatory counsel, Hargrove, Sinclair & Demarest LLP, regarding the Target's compliance with applicable federal and state healthcare laws and regulations, licensure and certification requirements, Medicare and Medicaid participation, Stark Law and Anti-Kickback Statute compliance, HIPAA privacy and security matters, and any required change-of-ownership or change-of-control notifications to governmental authorities and payors.
(h) Tax Structuring. Tax structuring advice in connection with the Transaction, including analysis of the asset purchase structure from a federal and state income tax perspective, advice regarding the allocation of the purchase price among the acquired assets pursuant to Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and related Treasury Regulations, and advice on other tax matters arising in connection with the Transaction, including potential state and local transfer tax implications and sales and use tax considerations.
(i) Governmental and Regulatory Filings. Preparation and filing of any required governmental or regulatory filings or notices in connection with the Transaction, including, without limitation, any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, any state healthcare regulatory change-of-ownership notifications, and any other filings or notices required by applicable law.
(j) Post-Closing Matters. Assistance with post-closing matters arising out of the Transaction, including the working capital adjustment process, earnout calculation and administration, escrow release procedures, and the assertion, defense, and resolution of indemnification claims under the definitive transaction documents.
For the avoidance of doubt, the scope of this engagement does not include the representation of the Client or any of its affiliates in any pending or future litigation involving the Target, including the pre-existing wage-and-hour class action litigation currently pending against CPI in the United States District Court for the Eastern District of Pennsylvania (captioned Rodriguez et al. v. Cardinal Peak Industries, Inc., Case No. 2:23-cv-04871), or any other threatened or pending litigation, arbitration, or administrative proceedings. Any such representation would require a separate engagement letter and would be subject to a separate conflicts analysis and fee arrangement. Similarly, this engagement does not extend to any post-closing operational, regulatory, or compliance matters unrelated to the Transaction documents and the rights and obligations arising thereunder, unless separately agreed in writing.
2. Staffing
We have assembled a team of experienced attorneys to staff this engagement efficiently and effectively. The core members of the deal team are as follows:
Beatrice Holloway, Partner — Ms. Holloway will serve as the Responsible Partner for this engagement and will have overall supervisory responsibility for all aspects of the representation, including the strategic direction of the Transaction, negotiation of key terms of the definitive agreements, and management of the client relationship. Ms. Holloway has over twenty-two years of experience representing private equity sponsors and strategic acquirors in complex mergers and acquisitions, with a particular emphasis on healthcare transactions.
James Prentice, Partner — Mr. Prentice will serve as the Billing Partner for this engagement and will be the primary point of contact for all fee-related inquiries. Mr. Prentice will also contribute substantively to the negotiation and drafting of the definitive transaction documents and the acquisition financing documentation.
Derek Okonkwo, Associate — Mr. Okonkwo will serve as the Lead Associate for the Transaction and will be responsible for the day-to-day management of the deal process, including the drafting and negotiation of transaction documents, the organization and coordination of due diligence, the management of closing checklists and deliverables, and the coordination of workstreams among the Client's advisors. Mr. Okonkwo will be the primary day-to-day contact at the Firm for this engagement.
Tiffany Rosenthal, Associate — Ms. Rosenthal will serve as a Working Associate on the Transaction, supporting the due diligence process, reviewing and analyzing material contracts and regulatory filings, and assisting in the preparation of ancillary transaction documents. Ms. Rosenthal has significant experience in the healthcare sector and has supported a number of complex acquisition transactions during her tenure at the Firm.
Sylvia Hartwell, Partner (Tax) — Ms. Hartwell will provide specialist tax advice in connection with the Transaction, including tax structuring analysis, advice on the allocation of the purchase price among the acquired assets under Section 1060 of the Code, and review of tax-related provisions of the definitive transaction documents, including representations, covenants, and indemnification provisions.
From time to time, additional attorneys, paralegals, and support staff may be assigned to the engagement as the needs of the Transaction require. We will endeavor to staff the engagement in a manner that is both cost-effective and responsive to the Transaction timeline. The Firm will keep the Client informed of any significant staffing changes, particularly with respect to the core deal team members identified above.
We understand that the principal client contacts at Ardent Capital Management LLC for this engagement will be Priya Mehta-Sullivan, Partner and Head of Healthcare Investments, and Connor Briggs, Vice President on the Healthcare Deal Team, with overall authority and strategic direction to be provided by you, Marcus Ainsworth, as Managing Partner and Co-Founder. Unless otherwise directed, we will direct our day-to-day communications regarding the Transaction primarily to Ms. Mehta-Sullivan and Mr. Briggs, and we will ensure that you are copied on all material correspondence and deliverables.
3. Fee Arrangements
3.1 Hourly Rates
Our fees for this engagement will be based on the time spent by attorneys and other professionals on the matter at their respective standard hourly rates. Time is recorded in increments of one-tenth of an hour. The Firm's current standard hourly rates for various categories of timekeepers range as follows:
The current individual hourly rates for the core members of the deal team staffed on this engagement are as follows:
These rates are subject to periodic adjustment, which typically occurs on an annual basis effective January 1 of each year. The Firm will notify the Client in advance of any changes to the hourly rates applicable to this engagement. Any rate adjustment that takes effect during the pendency of this engagement will apply to time recorded on or after the effective date of such adjustment.
3.2 Expenses and Disbursements
In addition to professional fees for legal services, the Client will be responsible for reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements may include, but are not limited to, the following:
•  Filing fees and recording charges;
•  Travel expenses reasonably incurred in connection with the Transaction (including airfare, ground transportation, lodging, and meals), in accordance with the Firm's standard travel reimbursement policies;
•  Document reproduction, printing, and scanning costs;
•  Overnight delivery and courier charges;
•  Computerized legal research charges (including Westmark Data Systems, Sundial Solutions, and other research platforms);
•  Long-distance telephone and conference call charges;
•  Third-party vendor costs, including costs associated with data room access, e-discovery platforms, and corporate search and filing services; and
•  Court and governmental filing fees.
Expenses for outside specialists or consultants retained at the Client's direction in connection with the Transaction — such as healthcare regulatory counsel (Hargrove, Sinclair & Demarest LLP), environmental consultants, title companies, survey companies, or other third-party advisors — will generally be billed directly by those parties to the Client. In the event that such expenses are advanced by the Firm on the Client's behalf, they will be passed through to the Client at cost, without markup, and will be included as a separate line item on the Firm's monthly invoice.
3.3 Billing and Payment
The Firm will render invoices to the Client on a monthly basis, generally within fifteen (15) business days following the end of each calendar month. Each invoice will include a summary of professional time recorded by timekeeper, including the date, a narrative description of the work performed, and the time spent, together with an itemization of out-of-pocket expenses and disbursements incurred during the billing period. All invoices are due and payable within thirty (30) days of the invoice date. The Firm reserves the right to charge interest at the rate of one percent (1%) per month (or the maximum rate permitted by applicable law, if lower) on any amounts that remain unpaid more than sixty (60) days after the invoice date.
The Billing Partner for this engagement, James Prentice, will be the primary point of contact at the Firm for all billing inquiries, including questions regarding the scope of work reflected on any invoice, the allocation of time among timekeepers, or the nature or amount of any disbursement. Mr. Prentice can be reached directly at (212) 509-7244 or via email at jprentice@calderwoodharkness.com.
All invoices should be directed to:
Ardent Capital Management LLC 590 Madison Avenue, 34th Floor New York, NY 10022
Attention: Accounts Payable
with a copy (by email) to Connor Briggs (cbriggs@ardentcapital.com)
3.4 Retainer.  No retainer deposit is required at this time in connection with the commencement of this engagement. The Firm reserves the right to request a retainer deposit in the event of any material change in the scope or nature of the engagement, any significant escalation in anticipated fees and expenses, or in the event that any invoices rendered hereunder remain unpaid beyond the payment terms set forth in Section 3.3. Any retainer deposit received will be held by the Firm in a client trust account in accordance with the New York Rules of Professional Conduct and will be applied against the final invoice rendered in connection with this engagement, with any remaining balance returned promptly to the Client.
4. Client Identification and Conflicts
The Client for purposes of this engagement is Ardent Capital Partners III LP, a Delaware limited partnership, together with any acquisition vehicle designated by the Client and formed for purposes of consummating the Transaction (the "Acquisition Vehicle"). Ardent Capital Management LLC, in its capacity as the General Partner of Ardent Capital Partners III LP, is authorized to provide instructions and strategic direction with respect to this engagement and to receive communications on behalf of the Client. For the avoidance of doubt, this engagement does not extend to the representation of Ardent Capital Management LLC in its individual capacity, any other fund managed or advised by Ardent Capital Management LLC, or any portfolio company of Ardent Capital Partners III LP, except to the extent such entity is the Acquisition Vehicle or is otherwise expressly identified as a client in a separate engagement letter.
The Firm has conducted a conflicts check based on the information currently available to us, including the identities of the Client, the Target, the principals and key personnel of each, the Client's financial advisor (Graystone Partners LLC), and the Target's known advisors. Based on the results of that conflicts check as of the date of this letter, we are not aware of any conflict of interest that would prevent us from undertaking this representation in accordance with the New York Rules of Professional Conduct.
The Client acknowledges and understands that Calderwood & Harkness LLP is a large, full-service law firm with many attorneys and a diverse client base, and that the Firm may currently represent, or may in the future undertake the representation of, other clients whose interests may be adverse to the interests of the Client in matters that are unrelated to this engagement and the Transaction. By executing this letter, the Client consents to the Firm's continued representation of such other clients in matters that are not substantially related to this engagement, provided that the Firm will not represent any party adverse to the Client in this specific Transaction, or in any matter substantially related to this Transaction, without the Client's prior written consent. This consent does not extend to any matter in which the Firm possesses confidential information of the Client that could be material to the other representation.
This engagement is limited to the Transaction described in Section 1 of this letter and does not extend to any other matters or transactions. Any additional representation of the Client or its affiliates by the Firm would require a separate engagement letter and would be subject to a separate conflicts analysis and fee arrangement.
5. Confidentiality
The Firm will maintain the confidentiality of all information provided by or on behalf of the Client in connection with this engagement, in accordance with our professional obligations under the New York Rules of Professional Conduct and applicable law. We recognize the sensitive and proprietary nature of the information that the Client will share with us in connection with the Transaction, including the Client's investment strategy, financial projections, valuation analyses, fund-level information, and other confidential business information.
The Client acknowledges and agrees that the Firm may disclose confidential information to the extent necessary or appropriate to perform the services contemplated by this engagement. Such disclosures may include, without limitation, the sharing of information in connection with due diligence inquiries directed to the Target and its advisors, the negotiation of transaction documents with the Target and its counsel, the preparation and filing of governmental or regulatory filings, the delivery of legal opinions to lenders and other third parties as contemplated by Section 1 of this letter, and the coordination with the Client's other advisors. The Client's authorization to the Firm to undertake the foregoing activities shall constitute the Client's consent to any disclosures reasonably necessary in furtherance thereof.
The existence and terms of this engagement and the identity of the Client shall be treated as confidential by the Firm and shall not be disclosed to any third party except: (a) as required by applicable law, regulation, or court order; (b) as required by the Firm's professional obligations; (c) as disclosed with the Client's prior written consent; or (d) to the extent reasonably necessary in connection with the Firm's own internal administration, conflicts checking, and professional responsibility compliance.
6. Document Retention and Files
Upon conclusion of this engagement, whether by completion of the Transaction, termination of the engagement, or otherwise, the Firm will retain the engagement files in accordance with our standard document retention policy, as may be amended from time to time.
The Client may request the return of original documents at any time during or after the engagement. The Firm may retain copies of documents and work product for its own records, including for purposes of complying with professional obligations, responding to any future inquiries regarding the engagement, and protecting the Firm's interests in connection with any disputes.
Unless the Client provides written instructions to the contrary, the Firm's general policy is to retain closed-matter files for a period of ten (10) years following the conclusion of the engagement. After the expiration of such retention period, the Firm may destroy or dispose of the files in accordance with applicable rules of professional conduct and the Firm's internal policies, without further notice to the Client. Certain categories of documents, such as original executed agreements, stock certificates, and similar instruments of legal significance, may be returned to the Client prior to file destruction or retained for a longer period at the Firm's discretion.
7. Limitation of Liability
The Client acknowledges that the Firm has made no guarantees, promises, or representations regarding the outcome of the Transaction or any aspect of this engagement. The results of any legal matter depend upon range factors, including the specific facts and circumstances involved, the applicable law, the actions and positions taken by opposing parties, and the decisions of courts, regulatory agencies, and other governmental authorities. While we will use our best professional efforts to represent the Client's interests zealously and competently, we cannot and do not guarantee any particular result.
The Firm shall not be liable for any losses, damages, costs, expenses, or claims arising from or related to: (a) the Client's failure to provide complete, accurate, and timely information to the Firm; (b) the Client's actions or omissions with respect to the Transaction, including any decision by the Client to proceed with or refrain from proceeding with the Transaction or any aspect thereof; (c) the actions or omissions of third parties, including the Target, the Target's advisors, lenders, regulatory authorities, or other parties to the Transaction; or (d) any change in applicable law, regulation, or interpretation thereof occurring after the date of any advice rendered by the Firm. Nothing in this Section 7 shall be construed to limit the Firm's liability for its own negligence, willful misconduct, or breach of professional obligations.
8. Termination
Either party may terminate this engagement at any time upon written notice to the other party, subject to the Firm's professional obligations under the New York Rules of Professional Conduct, including the obligation to provide reasonable notice of withdrawal to the Client and to take steps reasonably practicable to protect the Client's interests during any transition period. In the event of termination by either party, the Firm will cooperate with the Client and any successor counsel to facilitate an orderly transition of the representation, including the prompt transfer of files and work product.
Upon termination of this engagement, the Client will remain responsible for payment of all fees for professional services rendered and all expenses and disbursements incurred through the effective date of termination, in accordance with the terms set forth in Section 3 of this letter. The Firm will render a final invoice within thirty (30) days following the effective date of termination.
The Firm's obligations under this letter regarding confidentiality (Section 5) and document retention (Section 6), as well as any accrued rights of either party under this letter, shall survive the termination of the engagement.
9. Governing Law and Dispute Resolution
This engagement letter and the terms and conditions set forth herein shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.
In the event of any dispute, controversy, or claim arising out of or relating to this engagement letter, the Firm's representation of the Client, or the fees charged in connection therewith (a "Dispute"), the parties agree to first attempt in good faith to resolve such Dispute through informal negotiation. If the Dispute is not resolved through informal negotiation within thirty (30) days after written notice of the Dispute is delivered by one party to the other, then such Dispute shall be finally resolved by binding arbitration administered in New York, New York, in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall be conducted before a single arbitrator selected in accordance with such rules. The arbitrator's award shall be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction. Each party shall bear its own costs and attorneys' fees in connection with any arbitration, unless the arbitrator determines that an award of costs and fees to the prevailing party is appropriate under the circumstances.
10. Miscellaneous
This letter constitutes the entire agreement between the Firm and the Client with respect to the terms and conditions of this engagement and supersedes all prior or contemporaneous oral or written communications, proposals, understandings, or agreements between the parties relating to the subject matter hereof.
No amendment, modification, or waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by both the Firm and the Client. No failure or delay by either party in exercising any right or remedy under this letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise thereof or the exercise of any other right or remedy.
This letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this letter by facsimile transmission or by electronic transmission in portable document format (PDF) shall be as effective as delivery of a manually executed counterpart.
11. Acceptance
We are enthusiastic about the opportunity to work with you and the Ardent Capital team on this important transaction and look forward to a productive and successful engagement. If the terms set forth in this letter are acceptable, please indicate your agreement by signing and dating a copy of this letter in the space provided below and returning it to us at your earliest convenience. Upon receipt of your executed copy, we will commence work immediately.
Please do not hesitate to contact Beatrice Holloway at (212) 509-7238 or bholloway@calderwoodharkness.com, or Derek Okonkwo at (212) 509-7312 or dokonkwo@calderwoodharkness.com, should you have any questions regarding this letter or the engagement generally. We look forward to working with you.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Beatrice Holloway
Title: Partner
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Ardent Capital Partners III LP, hereby acknowledges receipt of this engagement letter, confirms that the terms and conditions set forth herein are acceptable, and agrees to be bound thereby.
ARDENT CAPITAL PARTNERS III LP
By: Ardent Capital Management LLC, its General Partner
By: ________
Name: Marcus Ainsworth
Title: Managing Partner & Co-Founder
Date: ________
cc: Priya Mehta-Sullivan, Partner, Head of Healthcare Investments — Ardent Capital Management LLC cc: Connor Briggs, Vice President, Healthcare Deal Team — Ardent Capital Management LLC cc: James Prentice, Partner — Calderwood & Harkness LLP
Timekeeper Category | Hourly Rate Range
Partners | $1,250 – $1,650 per hour
Senior Associates / Counsel | $850 – $1,100 per hour
Associates | $625 – $850 per hour
Paralegals / Legal Assistants | $350 – $475 per hour
Timekeeper | Current Hourly Rate
Beatrice Holloway (Partner) | $1,575 per hour
James Prentice (Partner) | $1,500 per hour
Sylvia Hartwell (Partner, Tax) | $1,525 per hour
Derek Okonkwo (Associate) | $875 per hour
Tiffany Rosenthal (Associate) | $725 per hour

VIA ELECTRONIC MAIL AND HAND DELIVERY

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

ARDENT CAPITAL PARTNERS III LP

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