Contract analysis

1. Purpose I am writing in connection with your email of August 22, 2022, in which you informed Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") that Harrowgate Private Equity Fund IV, L.P. ("HPE Fund IV") has determined to pause, on an indefinite basis, the proposed spin-off (the "Proposed Spin-Off" or "Transaction") of Meridian Flow Technologies, Inc. ("Meridian" or "SpinCo") from Veldran Industrie

2. Engagement Background For completeness of the record, we recapitulate below the key facts and parameters of the engagement as originally established. Calderwood & Harkness was engaged by HPE Fund IV pursuant to an engagement letter executed on April 11, 2022 (the "Engagement Letter"). The scope of the engagement, as defined in the Engagement Letter, was to render a "should" level tax opinion (i.e., an opinion conc

3. Engagement Status — Dormant Effective as of the date of this letter, August 29, 2022, Calderwood & Harkness has designated the matter (HRW-SPIN-001 / Engagement Number 1003-00005) as "dormant" in the Firm's matter management system. This designation means that the engagement remains open but inactive. No further billable work will be performed by any member of the engagement team, and no additional fees or expense

4. Summary of Work Performed Set forth below is a high-level summary of the work performed by Calderwood & Harkness during the active phase of the engagement, covering the period from April 11, 2022 through August 29, 2022. This summary is intended to provide a comprehensive record of the scope and progression of the engagement for purposes of Harrowgate's internal files. Diligence Phase (April – May 2022). Following

5. Status of Draft Tax Opinion and Work Product — Non-Reliance Notice We wish to state clearly, and for the avoidance of any doubt, that the first draft of the tax opinion letter dated August 5, 2022 was a preliminary working draft that had not been finalized, reviewed for final form, or approved for delivery as a final opinion of Calderwood & Harkness LLP. The draft opinion, together with all supporting analysis mem

Section 355(e) "Plan" Analysis. The factual record necessary to support a conclusion that the Proposed Spin-Off was not part of a "plan" (or series of related transactions) that included HPE Fund IV's September 20, 2019 acquisition of 62.4% of Veldran required additional factual representations that had not yet been provided or confirmed. The approximately three-year gap between the September 20, 2019 acquisition dat

Section 355(d) Overlap. The analysis of the interaction between Section 355(d) (disqualified distributions) and Section 355(e) (recognition of gain on certain distributions), particularly in light of HPE Fund IV's acquisition of a 62.4% interest in Veldran by "purchase" within the five-year period preceding the anticipated distribution date, was not finalized. This analysis involved complex interpretive questions reg

6. Preservation of Work Product Calderwood & Harkness confirms that all work product generated during the engagement will be preserved in accordance with the Firm's document retention policies and procedures and the terms of the Engagement Letter. For purposes of this confirmation, "work product" includes all memoranda (whether in final or draft form), draft opinion letters, draft representation letters, draft transa

7. Billing Summary Set forth below is a comprehensive summary of the fees incurred, amounts billed and collected, and outstanding unbilled work in progress for the engagement through the date of this letter. Fee Structure. As set forth in the Engagement Letter dated April 11, 2022, the engagement was conducted on an hourly fee basis, with fees calculated based on the applicable hourly rate for each timekeeper multipl

8. Reactivation of Engagement Calderwood & Harkness remains available and prepared to reactivate the engagement at Harrowgate's request at any time. We would welcome the opportunity to bring this matter to completion should market conditions, business purpose considerations, and lender consent circumstances evolve favorably. Upon reactivation, the Firm would undertake the following steps: (i) Perform an updated confl

9. Contact Information Should you have any questions regarding the contents of this letter, the status of the engagement, or any other matter related to the Proposed Spin-Off, please do not hesitate to contact me directly: Leonard Cross Partner, Tax Department Calderwood & Harkness LLP 1301 Avenue of the Americas, 40th Floor New York, New York 10019 Telephone: (212) 554-7200 Email: lcross@calderwoodharkness.com For q

10. Closing We wish to express our sincere appreciation for Harrowgate's confidence in Calderwood & Harkness throughout this engagement. The Transaction presented a number of challenging and intellectually stimulating tax issues, and we believe that the work product generated to date provides a strong foundation for the completion of the tax opinion should the Transaction move forward. We look forward to the opportun