Contract analysis

I. Executive Summary This memorandum presents a detailed analysis of the commitment letter dated August 5, 2022 (the "Commitment Letter"), executed by Harborview National Bank, N.A. ("Harborview"), a national banking association headquartered at One Harborview Plaza, Charlotte, NC 28202, acting in its capacity as Lead Arranger and Administrative Agent, which provides for a $60,000,000 senior secured term loan facilit

II. Transaction Overview This section provides an overview of the material terms of the Acquisition and the key parties involved, which serve as the factual backdrop for the Commitment Letter analysis that follows. Buyer. Meridian Consumer Brands LLC is a limited liability company organized under the laws of the State of Delaware, with its principal offices located at 440 Park Avenue South, 18th Floor, New York, NY 1

III. Summary of Key Commitment Letter Terms This section provides a detailed summary and analysis of the material terms contained in the Commitment Letter and the attached indicative term sheet. A. Parties The Commitment Letter identifies the following parties: Lead Arranger and Administrative Agent. Harborview National Bank, N.A., a national banking association organized under the laws of the United States, headquar

IV. Conditions Precedent to Funding The Commitment Letter sets forth a comprehensive set of conditions precedent that must be satisfied (or waived by Harborview) prior to the initial funding of the Term Loan Facility. These conditions are organized and discussed below by category. A. Documentation Conditions The following documentation conditions must be satisfied prior to funding:

1. Definitive Asset Purchase Agreement. Execution and delivery of a definitive Asset Purchase Agreement between Meridian and Briarwood, in form and substance satisfactory to Harborview. The inclusion of a "satisfactory to the lender" standard with respect to the APA gives Harborview the right to review and approve the terms of the acquisition agreement, which is standard for lender commitments of this type. We should

2. Definitive Credit Documentation. Execution and delivery of the definitive credit agreement, security agreement, pledge agreement, guaranty agreement, and all related loan documents, each in form and substance consistent with the Commitment Letter and the attached term sheet. The negotiation of the definitive credit agreement will be a significant workstream and should commence promptly following the completion of

3. Legal Opinions. Delivery of legal opinions from Borrower's counsel (Calderwood & Harkness LLP) and, if required, local counsel in Ohio, covering customary matters including enforceability of the loan documents, due authorization and execution by the Borrower, no conflicts with organizational documents or applicable law, and the perfection and priority of security interests in the collateral. We should begin prepar

4. UCC Financing Statements and Perfection Documents. Delivery of executed UCC-1 financing statements for filing in the appropriate jurisdictions, together with intellectual property security agreements, mortgage instruments (for the West Jefferson owned real property), and any other documents required to perfect Harborview's first priority lien on the collateral. B. Due Diligence / Information Conditions The followi

1. Satisfactory Due Diligence. Completion of Harborview's satisfactory due diligence review of the Acquired Assets, encompassing financial, legal, environmental, and operational diligence. This is a broadly drafted condition that provides Harborview with subjective discretion to determine whether the results of its diligence review are satisfactory. As discussed further in Section XI below, this condition represents

2. Audited Financial Statements. Receipt of audited financial statements for the CleanLeaf and PureHaven product lines for fiscal years 2019, 2020, and 2021. These audited financial statements have been prepared by Briarwood's auditor, Hargrove & Linton, P.C., under the supervision of engagement partner Daniel Yee. We understand that the audited financial statements for all three fiscal years have been delivered to H

3. Interim Financial Statements. Receipt of interim unaudited financial statements for the product lines through the most recent quarter-end prior to closing. Depending on the closing date, this may require financial statements through June 30, 2022 or September 30, 2022. We should coordinate with Briarwood and Hargrove & Linton to ensure timely delivery of interim financial statements.

4. No Material Adverse Change. The Commitment Letter requires that there shall have been no material adverse change in the business, assets, or financial condition of the CleanLeaf and PureHaven product lines since the reference date specified in the Commitment Letter. The definition of "material adverse change" or "material adverse effect" will be a critical negotiating point in the definitive credit agreement. We s

1. Simultaneous Closing. The closing of the Acquisition shall occur simultaneously with the initial funding of the Term Loan Facility. This is a standard requirement ensuring that the loan proceeds are used for their intended purpose — funding the acquisition purchase price.

2. Acquisition on Agreed Terms. The Acquisition shall be consummated in accordance with the terms of the definitive APA, without any material amendment, modification, or waiver that is adverse to the interests of Harborview as lender. This condition is designed to protect Harborview from situations where the terms of the acquisition are changed after the commitment letter is executed in a manner that negatively affec

3. Governmental and Regulatory Approvals. Receipt of all material governmental and regulatory approvals required in connection with the Acquisition. We note that the Hart-Scott-Rodino ("HSR") pre-merger notification filing is not required for this transaction, as Briarwood does not meet the size-of-person test under the HSR Act. Accordingly, no antitrust regulatory approval is necessary. We should confirm whether any

4. Third-Party Consents. Receipt of all material third-party consents required in connection with the Acquisition. Two categories of third-party consents are particularly significant: (a) Landlord Consent — Marysville Facility. Consent from Buckeye Industrial Properties LLC, the landlord of the Marysville Facility, is required for the assignment of the lease in connection with the Acquisition. This consent has not ye

1. No default or event of default shall have occurred and be continuing under the credit agreement; and

2. No material adverse effect shall have occurred with respect to the Acquired Assets or the product lines since the reference date of June 30, 2022. The "no default" condition is standard and should not present issues, as Meridian will be a newly formed borrower with no pre-existing debt obligations under the credit agreement at the time of initial funding. The "no MAE" condition is discussed further in Section XI.B

1. Fees and Expenses. Payment of all fees, costs, and expenses owing to Harborview and its counsel in connection with the Commitment Letter and the definitive credit documentation, including the commitment fee, ticking fee (if applicable), and the arrangement fee specified in the separate fee letter.

2. Officer's and Secretary's Certificates. Delivery of customary officer's certificates and secretary's certificates from the Borrower, certifying (among other things) the due organization and good standing of the Borrower, the authority of its officers to execute the loan documents, incumbency of signing officers, and the accuracy of organizational documents.

3. Good Standing Certificates. Delivery of certificates of good standing (or equivalent) for the Borrower from the Delaware Secretary of State and from the Secretary of State of any other jurisdiction in which the Borrower is qualified to do business.

4. Escrow Agreement. If the $9,500,000 escrow holdback from the closing purchase price is to be funded from the proceeds of the Term Loan Facility, delivery of an escrow agreement in form and substance satisfactory to Harborview. The escrow agent is Atlantic Fiduciary Trust Company (contact: Gregory Fenn). We should clarify with Harborview whether the escrow holdback amount is expected to be funded from the Term Loan

5. KYC/AML/BSA Compliance. Satisfactory completion of Harborview's "know your customer" (KYC), anti-money laundering (AML), and Bank Secrecy Act (BSA) compliance procedures with respect to the Borrower, its officers, its equity holders, and Lakepoint. These requirements should be addressed as early in the process as possible to avoid last-minute delays.

V. Flex Provisions The Commitment Letter contains flex provisions that afford Harborview the right to modify certain economic and structural terms of the Term Loan Facility in connection with the syndication process. Flex provisions are standard in commitment letters for syndicated credit facilities, as they allow the lead arranger to adjust terms to market-clear the facility. However, they also create uncertainty fo

VI. Syndication Mechanics The Commitment Letter establishes the framework for the syndication of the Term Loan Facility. Syndication is the process by which Harborview, as Lead Arranger, will distribute portions of the $60,000,000 facility to other institutional lenders and credit funds, thereby reducing its own hold position and diversifying the credit risk. Initial Syndicate. As noted in Section III.A, the Commitme

VII. Key Representations and Covenants in the Term Sheet The term sheet attached to the Commitment Letter outlines the categories of representations, warranties, and covenants that will be included in the definitive credit agreement. While the specific language of these provisions will be negotiated during the credit agreement documentation process, the term sheet provides a general framework for the key terms. This

VIII. Events of Default The term sheet sets forth the standard categories of events of default that will be included in the definitive credit agreement. These include:

1. Payment Defaults. Failure to make required payments of principal, interest, fees, or other amounts when due, subject to customary grace periods for non-principal payments;

2. Breach of Representations. Any representation or warranty made by the Borrower proving to be materially inaccurate as of the date made or deemed made;

3. Covenant Defaults. Failure to comply with any affirmative, negative, or financial covenant contained in the credit agreement, subject to applicable cure periods for specified covenants;

4. Cross-Default. Default under any other indebtedness of the Borrower or any guarantor in excess of a specified threshold amount;

5. Bankruptcy and Insolvency. The filing of a voluntary petition in bankruptcy, the commencement of involuntary proceedings, or the occurrence of other insolvency events with respect to the Borrower or any guarantor;

6. Judgment Defaults. The entry of one or more final, non-appealable judgments against the Borrower or any guarantor in excess of a specified threshold amount that remain unsatisfied or unstayed;

7. Change of Control. A change of control of Meridian or a change in Lakepoint Capital Partners, LP's direct or indirect ownership of Meridian;

8. ERISA Events. The occurrence of specified ERISA-related events (such as the underfunding of pension plans or the incurrence of withdrawal liability) in excess of specified thresholds. Note regarding Change of Control. The change-of-control event of default is particularly important in the context of a private-equity-backed borrower. The definition of "change of control" in the credit agreement should be carefully

IX. Fees and Expenses The Commitment Letter provides for the following fees and expense obligations: Commitment Fee. As discussed in Section III.D, Meridian is obligated to pay a commitment fee of 50 basis points per annum on the committed but undrawn amount of $60,000,000 from August 5, 2022 through the earlier of funding or commitment termination. Ticking Fee. As discussed in Section III.E, a ticking fee of 25 basi

X. Timing and Expiration Analysis The timing of the transaction relative to the Commitment Letter expiration date is one of the most significant risk factors identified in this review. This section provides a detailed analysis of the key dates, critical path items, and estimated closing timeline. Key Dates Critical Path Items Affecting Timing The following workstreams are on the critical path to closing and, if delay

1. Finalization and Execution of the APA. The APA is currently in first-draft stage; the first draft was circulated by Calderwood & Harkness on July 19, 2022. Briarwood's counsel, Caldwell, Pruitt & Shaw LLP (Rachel Underwood, David Soo), has indicated that its markup will be returned shortly. Based on typical timelines for middle-market asset purchase agreements of this complexity, we would expect several rounds of