Contract analysis

I. EXECUTIVE SUMMARY The purpose of this memorandum is to analyze the "best and final" term sheet delivered by Ridgeline National Bank, N.A. ("Ridgeline" or the "Bank") on April 29, 2022 (the "Best and Final Term Sheet"), in connection with the proposed $40,000,000 asset-based revolving credit facility (the "Proposed Facility" or the "ABL Facility") for Meridian Consumer Brands LLC ("Meridian" or the "Company"). This

II. BACKGROUND AND PROCEDURAL HISTORY A. The Proposed Facility Meridian Consumer Brands LLC is a Delaware limited liability company (EIN 84-3291057) headquartered at 401 West 33rd Street, Suite 1200, New York, New York 10001. Meridian operates in the consumer products industry, with principal business lines in personal care and household goods manufacturing, distribution, and retail sale. The Company maintains establ

III. SUMMARY OF THE "BEST AND FINAL" TERM SHEET A. Terms Unchanged from Prior Versions A number of the key economic and structural terms of the Proposed Facility have remained consistent across all four iterations of the term sheet. These terms are summarized below: Interest Rate. SOFR plus 200 basis points, with a 25 basis point SOFR floor. The interest rate is subject to a step-down to SOFR plus 175 basis points if

IV. BORROWING BASE ANALYSIS — COMPARISON TABLE To provide the recipients of this memorandum with a clear quantitative framework for evaluating the impact of Ridgeline's tightened eligibility criteria and the two Best and Final alternatives, we have prepared the following comparative borrowing base analysis. The analysis presents the borrowing base calculations under three scenarios: (A) the original term sheet dated

V. ANALYSIS OF ALTERNATIVE A — COMMITMENT REDUCTION TO $35,000,000 A. Impact on Working Capital and Seasonal Needs Meridian's stated need for the full $40,000,000 revolving commitment is driven by the Company's seasonal business cycle. As a consumer products company operating in the personal care and household goods segments, Meridian experiences significant seasonal inventory build-outs in Q3 and Q4 of each fiscal y

VI. ANALYSIS OF ALTERNATIVE B — $5,000,000 AVAILABILITY RESERVE A. Functional Equivalence to Commitment Reduction At the outset, it is important to recognize that Alternative B is, at the point of closing, functionally equivalent to Alternative A in terms of its impact on Meridian's available borrowing capacity. Both alternatives cap maximum availability at $35,000,000. Under Alternative B, the borrowing base certifi

VII. REASONS FOR RECOMMENDED REJECTION Calderwood & Harkness recommends that Meridian reject both Alternative A and Alternative B for the reasons set forth below. A. Mismatch with Meridian's Business Needs The fundamental deficiency of both alternatives is that they fail to provide Meridian with the revolving commitment necessary to fund its seasonal working capital requirements. Meridian's historical peak seasonal b

VIII. DISCUSSION OF ALTERNATIVE LENDER OPTIONS A. Market Landscape The ABL lending market for consumer products borrowers of Meridian's size and profile is competitive and well-established. Meridian's financial characteristics — revenue of approximately $185,000,000, total assets of approximately $142,000,000, EBITDA of approximately $22,400,000, and a strong collateral base consisting of accounts receivable and inve

IX. RECOMMENDATION Based on the foregoing analysis, Calderwood & Harkness recommends the following course of action:

1. Reject Both Alternatives. Meridian should reject both Alternative A (commitment reduction to $35,000,000) and Alternative B ($5,000,000 availability reserve) as set forth in Ridgeline's Best and Final Term Sheet dated April 29, 2022. Neither alternative meets Meridian's seasonal working capital requirements, and both are driven by Ridgeline's overly conservative collateral eligibility criteria — specifically, the

2. Authorize Final Negotiation Attempt. Meridian should authorize Calderwood & Harkness to communicate the rejection to Ridgeline (via Whitfield Ames LLP) and to make a single, final attempt to negotiate Ridgeline's return to the full $40,000,000 revolving commitment with no availability reserve. In this final communication, Calderwood & Harkness will clearly and firmly present Meridian's position, supported by the b

3. Initiate Parallel Process with Alternative Lenders. In parallel with the final negotiation attempt with Ridgeline, Meridian and Brindoval should begin evaluating alternative ABL lenders to ensure continuity of the seasonal financing timeline. Calderwood & Harkness is prepared to commence outreach to alternative lenders immediately upon authorization, with the goal of obtaining indicative term sheets from two to th

4. Formal Termination if No Movement. If Ridgeline confirms that it will not move from its Best and Final position, Calderwood & Harkness recommends formal termination of term sheet discussions with Ridgeline and closure of the Ridgeline engagement. Calderwood & Harkness will prepare a formal termination letter for Meridian's review and transmittal. We believe this approach balances the preservation of the Ridgeline

X. NEXT STEPS If the recommendation set forth in Section IX is accepted, Calderwood & Harkness proposes the following immediate next steps:

1. Marcus Ellsworth (CEO, Meridian) and Evelyn Crumveth (Managing Partner, Brindoval Partners Fund III, LP) to confirm authorization to reject the Best and Final Term Sheet and to authorize Calderwood & Harkness to make a single, final negotiation attempt with Ridgeline. Calderwood & Harkness requests confirmation by email or written instruction no later than May 6, 2022, to allow sufficient time for preparation and

2. If authorized, Calderwood & Harkness will prepare and transmit a written communication to Whitfield Ames LLP (Catherine Royce and Benjamin Nakamura) setting forth Meridian's rejection of both Alternative A and Alternative B, together with a substantive restatement of Meridian's position on the eligibility criteria and a request for a call with Ridgeline (Jonathan Kershaw, SVP, Asset-Based Lending) to present the r

3. If Ridgeline does not agree to resume negotiations on the basis of a $40,000,000 commitment with no availability reserve, Calderwood & Harkness will prepare a formal termination letter for Meridian's review and transmittal to Ridgeline and Whitfield Ames LLP.

4. In parallel, Calderwood & Harkness will prepare a brief memorandum on alternative lender options for review by Meridian's management team and Brindoval. This brief will identify specific potential lender counterparties, provide indicative pricing ranges based on current market conditions, and outline the timeline and key milestones for a replacement ABL process.

5. All intercreditor discussions with Greystone Capital Finance LLC (Alan Fitzpatrick, Director, Portfolio Management) remain on hold pending resolution of the primary lending relationship. Once a replacement lender is identified and a term sheet is executed, Calderwood & Harkness will promptly reengage with Greystone to initiate formal intercreditor negotiations.

6. Calderwood & Harkness notes that the costs incurred by Bellweather Appraisal Group LLC in connection with its preliminary field examination of Meridian's inventory and receivables may be Meridian's responsibility under the initial engagement terms agreed with Ridgeline at the commencement of the diligence process. Meridian should confirm the terms of any fee obligations to Ridgeline or Bellweather in connection wi

XI. DISCLAIMER AND PRIVILEGE NOTICE This memorandum constitutes a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP, One Liberty Plaza, 45th Floor, New York, New York 10006, in its capacity as counsel to Meridian Consumer Brands LLC in connection with the matters described herein. This memorandum is protected by the attorney-client privilege and the work product doctrine.