Contract analysis

I. DEFINITIONS AND INTERPRETIVE PROVISIONS A. "Adjusted EBITDA" Definition The definition of "Adjusted EBITDA" set forth in Section 1.01 of the Draft Agreement departs in several material respects from the definition employed in the Amended and Restated Credit Agreement dated as of April 7, 2022 (the "Senior Credit Agreement") among Stonefield, Whitmore National Bank, N.A. as Administrative Agent, and the senior lend

II. INTEREST RATE AND PAYMENT TERMS A. Interest Rate Structure The Borrower accepts the total interest rate of 1,100 basis points (11.00%) per annum, allocated between 850 basis points (8.50%) of current cash pay interest and 250 basis points (2.50%) of payment-in-kind ("PIK") interest, compounding quarterly. This interest rate structure is consistent with the executed term sheet dated July 17, 2023, and was the basi

III. FINANCIAL COVENANTS A. Maximum Total Leverage Ratio The Draft Agreement proposes a Maximum Total Leverage Ratio of 4.25x through the fiscal quarter ending June 30, 2024, stepping down to 3.75x beginning with the fiscal quarter ending September 30, 2024. This step-down schedule is materially more aggressive than the terms set forth in the executed term sheet, which the parties negotiated and agreed upon in good f

IV. RESTRICTIVE COVENANTS A. Restricted Payments The restricted payments covenant in Section 7.06 of the Draft Agreement is overly restrictive and does not account for several categories of payments that are necessary for the ordinary operation of the Borrower's business and the Sponsor's legitimate expectations. We request that the definition of "Permitted Restricted Payments" be expanded to include the following: (

V. REPRESENTATIONS AND WARRANTIES A. General Comments The representations and warranties in Article V of the Draft Agreement contain numerous flat, unqualified statements that do not reflect market practice for a mezzanine credit facility of this nature and size. As a general matter, we request that all representations and warranties be qualified by materiality or Material Adverse Effect qualifiers where appropriate.

VI. CONDITIONS PRECEDENT TO FUNDING A. Documentation Conditions We request that the list of required closing deliverables set forth in Section 4.01 of the Draft Agreement be finalized and limited to the following, which we believe represent a complete and appropriate set of conditions to funding: (i) executed counterparts of the Mezzanine Credit Agreement and all ancillary transaction documents, including the Guarant

VII. EVENTS OF DEFAULT A. Payment Default The Borrower accepts the payment default provisions in Section 8.01(a) of the Draft Agreement, subject to the following requests regarding cure periods: (i) We request a cure period of five (5) business days for the failure to pay interest, fees, or other amounts (other than principal) when due. The Draft Agreement provides only a three (3) business day cure period, which is

VIII. MANDATORY PREPAYMENT PROVISIONS A. Change of Control Mandatory Prepayment The Borrower accepts the mandatory prepayment obligation upon a Change of Control at a price equal to 103% of the outstanding principal amount of the Mezzanine Facility, plus all accrued and unpaid interest (including accrued and capitalized PIK interest), consistent with the term sheet. We request the following clarifications and modific