Contract analysis

I. Executive Summary This memorandum provides an internal assessment of the current state of the proposed acquisition by our client, Meridian Consumer Brands LLC ("Meridian" or the "Buyer"), of the "CleanLeaf" and "PureHaven" branded product lines from Briarwood Home Essentials, Inc. ("Briarwood" or the "Seller") as of December 15, 2022. The transaction, structured as an asset purchase at a proposed purchase price of

II. Transaction Overview A. Deal Structure and Economics The proposed transaction is structured as an asset purchase, pursuant to which Meridian would acquire substantially all of the assets comprising the CleanLeaf and PureHaven product lines from Briarwood. The principal economic terms, as reflected in the LOI executed March 28, 2022 and the draft APA negotiations, are as follows: • Purchase Price: $95,000,000. • C

III. Timeline of Key Events The following table summarizes the key milestones and events in the transaction to date, together with the current status of each item:

IV. Open Issues — Detailed Analysis A. Inventory Valuation Dispute ($2,500,000 Variance) Core Issue. The most significant commercial impediment to deal progression is the unresolved dispute regarding inventory valuation. Briarwood has represented that the book value of inventory related to the CleanLeaf and PureHaven product lines, as of the June 30, 2022 reference date, is $14,300,000. Whitfield Ames LLP's prelimina

V. Financing Status — Critical Deadlines A. Debt Commitment — Harborview National Bank, N.A. Meridian secured a debt commitment letter dated August 5, 2022 from Harborview National Bank, N.A. for a $60,000,000 senior secured term loan facility to fund a substantial portion of the cash purchase price at closing. The key terms and current status of the debt commitment are as follows: • Administrative Agent: Harborview

VI. LOI Exclusivity Status The Letter of Intent executed on March 28, 2022 between Meridian and Briarwood contains a binding 12-month exclusivity provision. Under this provision, Briarwood is contractually prohibited from soliciting, encouraging, or engaging in discussions or negotiations with any third party regarding a potential acquisition of the CleanLeaf and PureHaven product lines during the exclusivity period.

VII. R&W Insurance Status Calderwood & Harkness LLP prepared a preliminary underwriting submission for a representations and warranties insurance policy and submitted it to Northbridge Risk Advisors LLC (Alison Chu, Senior Vice President) on October 1, 2022. The submission was directed to Sentinel Specialty Insurance Company (underwriter: Mark Ellison), located at 500 West Monroe Street, Suite 3300, Chicago, IL 60661

VIII. APA Negotiation Status The following is a summary of the current state of APA negotiations between the parties: First Draft APA. The first draft of the Asset Purchase Agreement was circulated by C&H to CPS on July 19, 2022. This draft reflected Buyer's initial positions on all material terms, including asset definitions, representations and warranties, indemnification, closing conditions, and ancillary agreemen

1. Inventory valuation adjustment mechanism (FIFO vs. NRV; methodology and dispute resolution);

2. Indemnification cap (Buyer at 35% / $33,250,000 vs. Seller at 20% / $19,000,000);

3. General representations and warranties survival period (Buyer at 24 months vs. Seller at 18 months);

4. Earnout revenue threshold and calculation methodology;

5. Scope of Acquired Assets definition (certain categories still in dispute);

6. Breadth of Seller knowledge qualifiers;

7. Environmental liability allocation (pre-closing vs. post-closing; tenant vs. landlord);

8. Employee transfer mechanics and offer letter terms;

9. Transition Services Agreement term and pricing; and

10. Non-competition covenant scope (geographic and product-line limitations). None of these open issues have been resolved. No third draft APA has been prepared or exchanged. Ancillary Agreements. The following ancillary agreements have been prepared in first-draft form by C&H but have not been finalized or negotiated: • Bill of Sale; • Assignment and Assumption Agreement; • intellectual Property Assignment Agreement

IX. Staleness of Diligence All due diligence memoranda and analyses prepared in connection with the transaction were completed between July and October 2022 based on data, documents, and conditions as of that period. The financial data reference date is June 30, 2022 — now approximately 5.5 months stale. The passage of time since the diligence period presents a significant risk that the information upon which the tra

X. Risk Assessment Summary The following table summarizes the principal risks facing the transaction, categorized by issue, assessed likelihood and severity, and recommended action: The cumulative effect of these risks is substantial. Even if each issue could be resolved individually, the aggregate volume of unresolved matters, the staleness of the diligence record, and the approaching financing and exclusivity deadl

XI. Recommendations A. Immediate Client Communication We recommend that C&H send a formal letter to Diana Ressler, General Counsel of Meridian Consumer Brands LLC, promptly and no later than early January 2023, advising on the following matters:

1. Debt Commitment Expiration. The Harborview National Bank, N.A. debt commitment letter expires on February 5, 2023 — approximately 52 days from this memorandum. The ticking fee continues to accrue at a rate of approximately $411 per day. If no action is taken, Meridian will lose its committed debt financing and will have incurred aggregate ticking fees of approximately $38,630 from November 3, 2022 through the expi

2. LOI Exclusivity Expiration. The exclusivity period under the LOI expires on March 28, 2023 — approximately 103 days from this memorandum. Upon expiration, Briarwood will be free to engage with other potential acquirers of the CleanLeaf and PureHaven product lines.

3. Open Issues. The six principal open issues described in Section IV of this memorandum (inventory valuation dispute, incomplete Phase II environmental investigation, landlord consent, customer consents, regulatory filing gap, and incomplete disclosure schedules) remain unresolved and present significant obstacles to closing.

4. Strategic Options. The client should be advised of the three strategic options available: (a) Reactivate negotiations and seek to close. This option would require Meridian to re-engage with Briarwood and CPS, address the outstanding debt commitment expiration (through extension or replacement financing), commission the Phase II ESA, refresh all diligence, resolve the inventory valuation dispute, and advance APA ne

1. Debt Commitment Extension Inquiry. C&H should coordinate with Wavecrest Partners LLC (Steven Marchetti) to make a preliminary inquiry to Harborview National Bank, N.A. (Carolyn Dubois) regarding whether the bank would be open to extending the commitment letter beyond February 5, 2023 and, if so, on what terms (including any extension fee, modified pricing, or additional conditions). This inquiry can be conducted o

2. LOI Exclusivity Monitoring. The deal team should monitor the remaining LOI exclusivity period and any indications of Briarwood's market activity. If there are any signs that Briarwood is preparing to engage with other potential acquirers, Meridian should be alerted immediately.

3. Data Room Preservation. The Pemberton Systems data room (project code BHE-CleanLeaf-2022) should be preserved if it has not already been deactivated by the Seller. Access to the data room and the documents contained therein may be essential for a diligence refresh if the transaction is reactivated. C&H should confirm with Pemberton Systems whether Buyer-side access remains active and, if so, ensure that key docume

XII. Conclusion The proposed acquisition of the CleanLeaf and PureHaven product lines by Meridian Consumer Brands LLC from Briarwood Home Essentials, Inc. has been effectively dormant since November 18, 2022. No formal termination of the LOI or APA negotiations has occurred, but no substantive progress has been made on any open issue since that date, and the Seller's counsel has not responded to our most recent commu