Contract analysis

I. Items Where Compromise Was Reached The following is a summary of the principal areas in which Buyer has accepted or partially accepted Seller's proposed revisions, or where the parties have otherwise reached a mutually acceptable position in the second draft. A. Definition of Acquired Assets Buyer has accepted certain narrowing revisions to the definition of "Acquired Assets" proposed by Seller in its August 22 ma

II. Items Remaining Open — Requiring Further Negotiation Notwithstanding the compromises described above, a number of significant items remain open and will require further discussion between the parties. The following is a summary of the principal open issues, together with Buyer's position on each. A. Indemnification Cap The indemnification cap remains a material open issue between the parties. Buyer's position, as

I. Customer Contract Consents As noted above, seven (7) of the twenty-three (23) Assigned Contracts contain change-of-control or assignment consent provisions that require the consent of the counterparty prior to assignment to Buyer. The parties should discuss and agree upon the allocation of responsibility for obtaining these consents, including which party will take the lead on solicitation efforts with each counte

III. Ancillary Documents Enclosed In addition to the second draft of the APA, the following ancillary documents are enclosed with this transmittal in the forms indicated:

1. Bill of Sale — draft form, intended to serve as a Closing deliverable and attached as an exhibit to the APA. This document will effect the conveyance of the tangible personal property included in the Acquired Assets from Seller to Buyer at Closing.

2. Assignment and Assumption Agreement — draft form, attached as an exhibit to the APA. This document will effect the assignment by Seller of the Assigned Contracts, Assumed Liabilities, and other intangible rights included in the Acquired Assets, and the assumption by Buyer of the Assumed Liabilities. 3. intellectual Property Assignment Agreement — draft form, covering the assignment of the following intellectual pr

4. Transition Services Agreement — revised first draft, reflecting the agreed service descriptions and pricing methodology as described in Section I.D above, with open items noted in redline.

5. Escrow Agreement — first draft, among Meridian Consumer Brands LLC, Briarwood Home Essentials, Inc., and Atlantic Fiduciary Trust Company, as escrow agent, reflecting Buyer's position on escrow amount and term as described in Section II.D above.

6. Non-Competition and Non-Solicitation Agreement — revised draft, to be executed by Malcolm Greer, reflecting a four-year restrictive period, the revised geographic scope described in Section I.E above, and a restriction limited to consumer products (not extending to commercial janitorial services).

7. Schedules to APA — Buyer's initial draft, including: (a) Schedule of Acquired Assets; (b) Schedule of Assumed Liabilities (listing assumed trade payables of approximately $4,200,000 and assumed product warranty obligations of approximately $620,000); (c) Schedule of Assigned Contracts (listing twenty-three (23) customer contracts, with notation of the seven (7) contracts requiring counterparty consent to assignmen

IV. Process and Next Steps Buyer is committed to advancing this transaction toward a timely closing and respectfully requests that Seller's counsel return a markup of the second draft APA and the enclosed ancillary documents at Seller's earliest convenience. Given the number and significance of the open items identified above, we believe it would be productive to schedule a call between the deal teams — including bus

1. Asset Purchase Agreement — Second Draft (clean copy)

2. Asset Purchase Agreement — Second Draft (blackline against July 19, 2022 first draft)

4. Assignment and Assumption Agreement — draft form

5. Intellectual Property Assignment Agreement — draft form

6. Transition Services Agreement — revised first draft

7. Escrow Agreement — first draft

8. Non-Competition and Non-Solicitation Agreement — revised draft

9. Schedules to APA — Buyer's initial draft cc (via email): Sandra Tung, Esq., Calderwood & Harkness LLP Diana Ressler, General Counsel, Meridian Consumer Brands LLC David Soo, Esq., Caldwell, Pruitt & Shaw LLP