Contract analysis

From: Elaine Forsythe <eforsythe@calderwoodharkness.com> To: David Halverston <dhalverston@meridiancb.com> Cc: Howard Bellamy <hbellamy@calderwoodharkness.com> Date: Wed, 25 Oct 2023 04:47:00 -0000 Subject: Pinecrest MSA (MSA-PDS-MCB-2023) — Confirmation of Termination Decision and Next Steps

Thank you for making time this afternoon. This email confirms the decision reached during today's call with you and Meg to formally terminate the MSA negotiation process with Pinecrest Digital Solutions Inc. As you know, this decision follows the competitive overlap and antitrust analysis memorandum we delivered on October 20, as well as the internal strategy session held on October 16 with Karen Lau and the Ashford

**Status of Negotiations at Time of Pause**

For the record, at the time negotiations were paused, the parties had circulated a near-final draft MSA (MSA-PDS-MCB-2023) on October 6, 2023. Four issues remained unresolved and had been escalated to business principals: (1) data security standards, (2) the liability cap, (3) the termination fee, and (4) audit rights. On October 18, Garrett transmitted a formal pause letter to Carolyn Ostrowski at Dunleavy, Proctor

We will prepare a formal termination letter addressed to Carolyn Ostrowski at Dunleavy, Proctor & Hale LLP (300 South Tryon Street, Suite 2200, Charlotte, NC 28202) on MCB's behalf. The letter will confirm termination of the MSA negotiation process, citing the change-of-control event, the resulting competitive overlap concerns, and the associated data security risks. It will also confirm that no binding agreement was

We understand that MCB will continue operating under its existing month-to-month extension with Corwyn Technology Services LLC pursuant to the legacy agreement dated March 1, 2020. We recognize that this means MCB will forgo the approximately $200,000 in annual savings that the Pinecrest MSA would have delivered ($2,950,000 per year under the proposed Pinecrest arrangement versus $3,150,000 per year under the current

Once the termination letter has been transmitted, we will close this matter (C&H Matter No. 1011-00008, Client No. 71982). Howard Bellamy, who is copied here, will oversee the preparation of a closing invoice covering all remaining fees and disbursements through the matter close date. You should expect to receive it shortly after the termination letter is sent. If you or Meg would like to schedule a brief wrap-up cal

David, thank you for the clear and prompt direction from MCB's management team throughout this process. I recognize this is a frustrating outcome given the time and effort that went into the Pinecrest negotiation, but we believe the decision to terminate is well-supported by the competitive dynamics and data security risks the Vaulton acquisition introduced. Please do not hesitate to call or email if you have any que

**Elaine Forsythe** Partner, Antitrust & Competition Practice Calderwood & Harkness LLP 125 Park Avenue, 34th Floor New York, NY 10017 T: (212) 541-7800 E: eforsythe@calderwoodharkness.com

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