Contract analysis

1. Debt Commitment Letter Expiration — Harborview National Bank, N.A. The senior secured term loan commitment letter (the "Commitment Letter") between Meridian and Harborview National Bank, N.A. ("Harborview"), providing for a $60,000,000 senior secured term loan facility, was executed on August 5, 2022. Meridian's relationship manager at Harborview is Carolyn Dubois, Senior Vice President, Leveraged Finance. The Com

2. Ticking Fee Accrual Under the terms of the Harborview Commitment Letter, a ticking fee of 25 basis points per annum on the total $60,000,000 committed facility commenced 90 days after the commitment date — that is, on November 3, 2022. The ticking fee is payable in addition to the 50 basis point commitment fee referenced above and was designed to incentivize timely closing of the financed transaction. The ticking

3. LOI Exclusivity Expiration The Letter of Intent, dated March 28, 2022, between Meridian and Briarwood contains a binding twelve-month exclusivity provision (Section 5 of the LOI) that is set to expire on March 28, 2023 — approximately sixty-seven (67) days from the date of this letter. During the exclusivity period, Briarwood (and its sole shareholder and President, Malcolm Greer) is contractually obligated not to

4. Stale Diligence Risks Due diligence on the CleanLeaf and PureHaven Product Lines was formally opened on June 14, 2022, when Briarwood granted data room access to Meridian and its advisors via the Pemberton Systems virtual data room platform (project code: BHE-CleanLeaf-2022). Over the course of the following four months, substantial due diligence work was performed across financial, legal, tax, environmental, and

5. Unresolved Inventory Valuation Variance The most significant commercial dispute that contributed to the stalling of deal negotiations is the $2,500,000 inventory valuation variance between Briarwood's reported book value and the net realizable value determined by Meridian's financial diligence advisor. As noted above, Briarwood reported an inventory book value of $14,300,000 as of June 30, 2022, for the combined C

6. Absence of Landlord Consent — Buckeye Industrial Properties LLC A critical outstanding condition precedent to closing is the landlord consent required for the assignment of the Marysville facility lease. The principal manufacturing facility for the CleanLeaf and PureHaven Product Lines is located at 2800 Industrial Parkway, Marysville, Ohio 43040 (the "Marysville Facility"). The Marysville Facility is leased by Br

7. Regulatory Filing Gap The Due Diligence Memorandum — Litigation & Regulatory, dated September 12, 2022, prepared by Calderwood & Harkness (principal drafter: Andrew Fitzpatrick; reviewed by Oliver Mackenzie), identified a gap in state-level product registrations for certain CleanLeaf and PureHaven products. As a threshold matter, we note that a Hart-Scott-Rodino Act pre-merger notification filing is not required f

8. Representations and Warranties Insurance Status In connection with the proposed transaction, Meridian engaged Northbridge Risk Advisors LLC ("Northbridge"), through contact Alison Chu (Senior Vice President), to broker a buy-side representations and warranties insurance ("R&W Insurance") policy. Northbridge submitted a preliminary underwriting package to Sentinel Specialty Insurance Company (underwriter: Mark Elli

9. Strategic Options Based on the foregoing analysis, we see three principal strategic options available to Meridian at this juncture. We present each option below, together with the key actions required and associated considerations. Option A: Reactivation of the Transaction Under this option, Meridian would re-engage with Briarwood and its counsel, Caldwell, Pruitt & Shaw LLP, to resume negotiations toward executio

1. Re-engagement with Briarwood. Initiate direct communication with Malcolm Greer (or through counsel, Rachel Underwood at Caldwell, Pruitt & Shaw LLP) to signal Meridian's continued interest in the acquisition and to propose a revised timeline for completion of negotiations.

2. Debt Financing. Negotiate an extension of the Harborview Commitment Letter (which may require a new commitment fee and potentially revised pricing) or, alternatively, obtain replacement debt financing from another lending institution. This step is urgent given the February 5, 2023 expiration date.

3. Equity Commitment. Confirm with Thomas Liang that the Lakepoint Capital Partners equity commitment ($35,000,000) remains available, valid, and not subject to any cross-default or co-termination provisions triggered by the lapse of the Harborview commitment.

4. Updated Financial Diligence. Re-engage Whitfield Ames LLP (Susan Clearwater) to update the preliminary financial diligence memorandum to reflect a more current reference date and incorporate Briarwood's FY2022 results.

5. Phase II Environmental Site Assessment. Commission Terrapoint Environmental Group, Inc. (Keith Novak) to conduct the Phase II ESA at the Marysville Facility to evaluate the recognized environmental condition identified in the Phase I report.

6. Disclosure Schedules. Request that Briarwood complete and update the disclosure schedules delivered on September 28, 2022, and deliver updated schedules reflecting all material developments since that date.

7. Inventory Valuation Dispute. Propose a resolution framework for the $2,500,000 inventory valuation variance, including a fresh physical inventory count and agreed-upon NRV methodology.

8. Landlord Consent. Re-pursue the landlord consent from Buckeye Industrial Properties LLC for assignment of the Marysville Lease, whether through Briarwood, through direct follow-up from Calderwood & Harkness, or through alternative arrangements.

9. R&W Insurance. Restart the R&W Insurance underwriting process through Northbridge Risk Advisors, with updated diligence materials and, if Sentinel Specialty Insurance Company is unwilling to re-engage, exploration of alternative carriers.

10. Market Valuation. Engage with Wavecrest Partners LLC (Steven Marchetti, Lena Kowalski) to reassess the current market valuation of the Product Lines in light of FY2022 financial results and any changes in the competitive landscape, to confirm that the $95,000,000 purchase price remains supportable. Timeline: Based on our experience with transactions of this nature, and given the breadth of outstanding workstreams

1. Notice to Briarwood. Send formal written notice to Briarwood (with a copy to Caldwell, Pruitt & Shaw LLP) advising that Meridian has determined not to proceed with the acquisition of the Product Lines and that no further negotiations are contemplated. We note that there is no termination fee, break fee, or other financial obligation payable by Meridian under the LOI in connection with a decision to discontinue neg

2. Data Room Closure. Close out Meridian's access to the Pemberton Systems virtual data room (project code: BHE-CleanLeaf-2022) and confirm that all confidential materials have been handled in accordance with the confidentiality provisions of the LOI.

3. Financing Notifications. Notify Harborview National Bank, N.A. (if the Commitment Letter has not yet expired) that the transaction will not proceed and that Meridian does not intend to draw on the facility. Similarly, notify Lakepoint Capital Partners, LP that the equity commitment will not be called.

4. Insurance Notification. Notify Northbridge Risk Advisors LLC and Sentinel Specialty Insurance Company that the R&W Insurance policy is no longer needed and that the underwriting process should be terminated.

5. Calderwood & Harkness Matter Closure. Wind down the Calderwood & Harkness matter, including archiving of files, preparation of a final billing statement, and return or destruction of confidential materials as required by the LOI's confidentiality provisions. This option provides certainty and eliminates ongoing costs, but it would forfeit the substantial investment of time, professional fees, and management attent

10. Recommendation In light of the analysis set forth above, Calderwood & Harkness recommends that Meridian make a definitive decision on the path forward by no later than mid-February 2023. The most time-critical factor driving this recommendation is the imminent expiration of the Harborview National Bank Commitment Letter on February 5, 2023. Once that commitment lapses, Meridian's financing architecture for the ac