Contract analysis

I. Executive Summary This memorandum presents the results of our review of employment and employee benefits matters in connection with the proposed acquisition by Meridian Consumer Brands LLC, a Delaware limited liability company ("Meridian" or "Buyer"), of the CleanLeaf and PureHaven consumer product lines (collectively, the "Product Line" or the "Business") from Briarwood Home Essentials, Inc., an Ohio corporation

II. Workforce Overview A. Employee Census and Demographics Based on the employee census data provided by Briarwood and uploaded to the Pemberton Systems data room on July 8, 2022 (Room Index 4.1.01), a total of 186 employees are currently associated with the CleanLeaf and PureHaven product lines and are expected to be offered employment by Meridian in connection with the Transaction. These employees are spread across

1. Contractor A (name redacted pending confirmation) — A graphic designer who has provided services exclusively to the CleanLeaf brand on a full-time basis for approximately three years, uses Briarwood-provided equipment, and works on-site at the Columbus headquarters. The exclusivity and duration of this arrangement, combined with the use of company equipment and integration into Briarwood's operations, suggest that

2. Contractor B (name redacted pending confirmation) — A maintenance technician who performs scheduled equipment maintenance at the Marysville facility on a weekly basis under the direction of the plant manager. This arrangement similarly presents characteristics more consistent with an employment relationship than an independent contractor engagement. We recommend that Meridian not assume these contractor relationsh

III. Employment Agreements and Arrangements A. Written Employment Agreements The vast majority of the 186 Transferring Employees are at-will employees without formal written employment agreements. Briarwood's Personnel Policies Handbook (revised January 2021) expressly states that all employment relationships with the company are "at-will" and may be terminated by either party at any time, with or without cause or no

IV. Compensation and Payroll A. Base Compensation We have reviewed the payroll records and salary/wage schedules provided by Briarwood for the 186 Transferring Employees (Room Index 4.4.01 through 4.4.03). Based on this review, the total annualized base compensation burden for the Transferring Employees is approximately $9.8 million, broken down as follows: Hourly wage rates for production and warehouse workers range

V. Employee Benefit Plans A. 401(k) Retirement Plan Briarwood maintains a tax-qualified 401(k) defined contribution retirement plan (the "Briarwood 401(k) Plan") covering eligible employees of both the Product Line and the retained Commercial Janitorial Services Division. The Briarwood 401(k) Plan is administered by a third-party recordkeeper (Tarrant Asset Management) and is subject to the Employee Retirement Income

1. Cash-Out at Closing. Briarwood pays out all accrued PTO balances to the Transferring Employees on or before the Closing date, and Meridian begins the new employment relationship with a clean slate (i.e., zero PTO balances). This approach is administratively clean but may result in a negative employee experience, as employees will effectively lose their accumulated time off.

2. Assumption by Meridian. Meridian assumes the accrued PTO balances as an assumed liability under the APA, and the Transferring Employees retain their accrued PTO following the transition. The assumed PTO liability would be reflected as a purchase price adjustment (increasing the effective purchase price by the assumed PTO amount) or as an offset to accounts receivable or other items. We recommend that the transacti

VI. WARN Act Analysis A. Federal WARN Act The Worker Adjustment and Retraining Notification Act (the "WARN Act"), 29 U.S.C. §§ 2101–2109, requires employers with 100 or more employees to provide at least 60 calendar days' advance written notice to affected employees (or their union representatives), the state dislocated worker unit, and the chief elected official of the local government before ordering a "plant closi

1. The APA should include a specific WARN Act compliance covenant that clearly allocates responsibility between Buyer and Seller for any WARN Act obligations arising in connection with the Transaction.

2. Meridian should commit to offering employment to all 186 Transferring Employees in order to avoid triggering WARN Act obligations. If Meridian anticipates that it will not offer employment to all Transferring Employees — for example, if certain positions will be eliminated or consolidated post-Closing — 60 days' advance notice must be provided to the affected employees.

3. The transaction should be structured such that the Transferring Employees' employment with Briarwood terminates simultaneously with, or immediately prior to, the commencement of their employment with Meridian, rather than resulting in a gap period that could be characterized as a termination followed by a rehire.

4. If Closing is delayed or uncertain, the parties should monitor WARN Act compliance obligations on an ongoing basis and prepare conditional WARN notices that can be issued if necessary. B. Ohio Mini-WARN (Ohio Revised Code § 4141.28) Ohio does not have a state-specific "mini-WARN" statute that imposes layoff notification requirements beyond those contained in the federal WARN Act. However, Ohio's unemployment compe

VII. Workers' Compensation and Workplace Safety A. Workers' Compensation Ohio is one of four states (along with North Dakota, Washington, and Wyoming) that operates a monopolistic, state-funded workers' compensation system through the Ohio Bureau of Workers' Compensation ("OBWC"). Employers in Ohio are generally required to participate in the state fund, though qualified employers may self-insure with approval from t

VIII. Litigation and Claims We have reviewed the data room materials for evidence of pending employment-related litigation, arbitration proceedings, or administrative charges (including charges filed with the Equal Employment Opportunity Commission ("EEOC") and the Ohio Civil Rights Commission ("OCRC")) involving Product Line employees. Based on our review as of the date of this memorandum, no material pending employ

IX. Immigration and I-9 Compliance We have reviewed the I-9 forms and work authorization documentation for the 186 Transferring Employees, as provided in the data room (Room Index 4.8.01). Based on our preliminary review, the majority of the Transferring Employees appear to be U.S. citizens or lawful permanent residents with unrestricted work authorization. We have identified approximately four employees who appear t

I-9 Approach. In an asset purchase transaction, the buyer has two options with respect to I-9 compliance for the Transferring Employees:

1. Complete New I-9 Forms. Meridian may treat the Transferring Employees as new hires and complete new I-9 forms for each employee within three business days of their start date with Meridian. This approach provides Meridian with a clean I-9 record but requires the re-verification of work authorization for all 186 employees and may impose logistical challenges.

2. Rely on Briarwood's Existing I-9 Forms. Under USCIS guidance, an acquiring employer in an asset purchase may choose to rely on the seller's I-9 forms, provided that the buyer assumes responsibility for any deficiencies in those forms. This approach avoids the administrative burden of completing 186 new I-9 forms but exposes Meridian to liability for any pre-existing I-9 deficiencies. Based on our preliminary revie

X. Ohio Employment Law Considerations As substantially all of the 186 Transferring Employees are located in Ohio, the following Ohio-specific employment law considerations are relevant to the Transaction: At-Will Employment. Ohio is an at-will employment state. Under Ohio common law, an employment relationship that is not for a definite term may be terminated by either party at any time, for any reason, or for no rea

XI. Transition Planning Recommendations Based on our review of the employment and benefits matters described in this memorandum, we recommend that Meridian implement the following transition planning measures in connection with the Transaction:

1. Offer Letters. Prepare individualized offer letters for all 186 Transferring Employees, with terms comparable to each employee's current Briarwood employment (including compensation, title, work location, and benefits eligibility). Offer letters should be prepared in final form in advance of Closing but should not be delivered to employees until after the execution of the APA, ideally no more than five to ten busi

3. Health and Welfare Coverage. Arrange for group medical, dental, vision, life, and disability insurance coverage for the Transferring Employees, effective as of the Closing date with no gap in coverage. Meridian should work with its benefits broker to obtain quotes and establish coverage that is comparable to the Transferring Employees' current coverage under Briarwood's plans.

4. Retention Arrangements. Consider offering retention or stay bonus arrangements to key management personnel identified in Section II.B above (including Ms. Tsao, if she is to transition to Meridian, Mr. Reinhardt, Ms. Cabrera, Dr. Mehta, Ms. Volker, and Mr. Ostrowski) to mitigate the risk of employee attrition during the transition period. Retention bonuses should be structured to require continued employment throu

5. Accrued PTO. Address the treatment of accrued PTO balances in the APA, either through a cash-out by Briarwood at Closing or through assumption of the accrued balances by Meridian as an assumed liability with a corresponding purchase price adjustment.

6. WARN Act Compliance. Include a WARN Act compliance covenant in the APA that clearly allocates responsibility between Buyer and Seller and provides for indemnification of each party for the other's WARN Act liabilities. Meridian should commit to offering employment to all 186 Transferring Employees to avoid triggering WARN obligations.

7. I-9 Documentation. Complete new I-9 forms for all Transferring Employees within three business days of their start date with Meridian. Initiate the H-1B amendment and TN transfer processes for visa-holding employees well in advance of Closing to ensure continuity of work authorization.

8. Transition Services Agreement. The Transition Services Agreement ("TSA") (first draft circulated September 15, 2022) should include detailed provisions addressing Briarwood's obligations to cooperate in the employee transition process, including: • Payroll transition and final pay processing • Benefits enrollment and disenrollment coordination • Transfer of personnel records and HR files • Access to employee data