[sheet: Conditions to Closing]

[sheet: Conditions to Closing]
Item No. | Category | Condition / Deliverable Description | Merger Agreement Section | Applicable Party | Responsible Party | Due Date / Trigger | Status | Date Completed | Notes
1 | Mutual — Regulatory | HSR Act waiting period expired or early termination granted (30-day initial waiting period) | Section 7.01(a) | Mutual | Elaine Forsythe (Calderwood & Harkness LLP) / Harrowgate & Pennfield | 2025-05-08 (estimated, 30 days post-filing) | In Progress | HSR filing to be submitted on or about April 8, 2025; filing fee $280,000 (2025 tier for $500M–$1B transactions); low risk of second request per antitrust risk assessment
2 | Mutual — Stockholder Approval | Approval of the Agreement and Plan of Merger by holders of a majority of outstanding shares of Pennfield common stock (DGCL § 251) | Section 7.01(b) | Mutual | Pennfield Holdings, Inc. (Patricia Okafor, GC); Oakhurst Proxy Advisors LLC (Margaret Quinlan) | 2025-06-19 (estimated special meeting date) | Not Started | 58,200,000 basic shares outstanding; majority vote required; proxy solicitor engaged
3 | Mutual — Regulatory | No injunction or order by any court of competent jurisdiction prohibiting the merger | Section 7.01(c) | Mutual | Calderwood & Harkness LLP / Calloway, Briggs & Harmon LLP | At Closing | In Progress | Ongoing monitoring
4 | Mutual — Regulatory | No law enacted after date of Merger Agreement making the merger illegal | Section 7.01(d) | Mutual | Calderwood & Harkness LLP / Calloway, Briggs & Harmon LLP | At Closing | In Progress
5 | Buyer Condition | Accuracy of Target's representations and warranties (subject to Material Adverse Effect qualifier) | Section 7.02(a) | Buyer | Ryan Kowalski / Megan Chu (Calderwood & Harkness LLP) | At Closing | Not Started | Bring-down certificate required from Pennfield officers
6 | Buyer Condition | Target compliance with covenants and agreements in all material respects | Section 7.02(b) | Buyer | Ryan Kowalski / Megan Chu (Calderwood & Harkness LLP) | At Closing | Not Started | Includes no-shop covenant compliance; change of control consent compliance
7 | Buyer Condition | No Material Adverse Effect on Pennfield since date of Merger Agreement | Section 7.02(c) | Buyer | Jonah Whitfield (Harrowgate Capital Partners LLC) / Calderwood & Harkness LLP | At Closing | Not Started | Ongoing monitoring of Pennfield business and financial condition
8 | Buyer Condition | Officer's Certificate from Pennfield (certifying satisfaction of Sections 7.02(a) and 7.02(b)) | Section 7.02(d) | Buyer | Catherine Langford (CEO) / Derek Simmons (CFO) — Pennfield | At Closing | Not Started | Draft to be prepared by Calloway, Briggs & Harmon LLP
9 | Buyer Condition | Receipt of good standing certificate from Delaware Secretary of State for Pennfield Holdings, Inc. | Section 7.02(e) | Buyer | Calloway, Briggs & Harmon LLP / Pennfield | At Closing | Not Started | Certificate dated within 5 business days of closing
10 | Target Condition | Accuracy of Buyer's and Merger Sub's representations and warranties | Section 7.03(a) | Target | Oliver Mackenzie (Calderwood & Harkness LLP) | At Closing | Not Started
11 | Target Condition | Buyer and Merger Sub compliance with covenants and agreements in all material respects | Section 7.03(b) | Target | Oliver Mackenzie (Calderwood & Harkness LLP) | At Closing | Not Started | Includes financing covenants
12 | Target Condition | Officer's Certificate from Buyer (certifying satisfaction of Sections 7.03(a) and 7.03(b)) | Section 7.03(c) | Target | Calderwood & Harkness LLP (draft); authorized officer of HPE Fund IV | At Closing | Not Started | Draft prepared — see officer-certificate-buyer.docx
13 | Target Condition | Receipt of aggregate merger consideration of $980,000,000 | Section 7.03(d) | Target | Harrowgate Private Equity Fund IV LP / Falconer National Bank, N.A. (Gregory Poole) | At Closing | Not Started | Per funds flow memorandum
14 | Target Condition | Confirmation that debt financing has been funded or will be funded at closing | Section 7.03(e) | Target | Calderwood & Harkness LLP / Falconer National Bank, N.A. / Dunmore Capital Markets LLC | At Closing | Not Started | $490M TLB funding confirmed; RCF available but undrawn at closing
15 | Mutual — Regulatory | All other required governmental consents, approvals, and filings obtained or made | Section 7.01(e) | Mutual | Calderwood & Harkness LLP / Calloway, Briggs & Harmon LLP | At Closing | In Progress | No foreign regulatory filings required per antitrust assessment; ongoing monitoring of any state-level requirements
[sheet: Closing Deliverables — Buyer]
Item No. | Category | Deliverable Description | Merger Agreement / Ancillary Reference | Responsible Party | Counterparty / Recipient | Due Date | Status | Date Completed | Notes
1 | Corporate Authorization | Board Resolutions of Pinnacle Merger Sub, Inc. authorizing execution and delivery of Merger Agreement and consummation of the merger | Merger Agreement; merger-sub-board-resolutions.docx | Jonah Whitfield (sole director) | Pennfield / Filing | Prior to Closing | Complete | 2025-04-07 | Adopted; sole director: Jonah Whitfield
2 | Corporate Authorization | Written Consent of Sole Stockholder of Pinnacle Merger Sub, Inc. (HPE Fund IV) approving Merger Agreement per DGCL § 228 | Merger Agreement; merger-sub-sole-stockholder-consent.docx | Calderwood & Harkness LLP / Harrowgate | Filing | Prior to Closing | Complete | 2025-04-07
3 | Organizational Documents | Certificate of Incorporation — Pinnacle Merger Sub, Inc. (filed with Delaware Secretary of State) | merger-sub-certificate-of-incorporation.docx | Jonah Whitfield (sole incorporator) | Delaware Secretary of State | Prior to Signing | Complete | 2025-04-01 | EIN: 93-4081562; Registered office: 1200 Market Street, Suite 3100, Wilmington, DE 19801
4 | Organizational Documents | Bylaws — Pinnacle Merger Sub, Inc. | merger-sub-bylaws.docx | Calderwood & Harkness LLP | Internal | Prior to Signing | Complete | 2025-04-01 | Standard Delaware corporation bylaws
5 | Officer's Certificate | Officer's Certificate of HPE Fund IV certifying accuracy of representations and warranties and compliance with covenants | Section 7.03(c); officer-certificate-buyer.docx | Authorized officer of HPE Fund IV / Calderwood & Harkness LLP (draft) | Pennfield Holdings, Inc. | At Closing | Drafted | Draft prepared by Ryan Kowalski
6 | Equity Commitment | Equity Commitment Letter — HPE Fund IV commitment of $340,000,000 equity to Pinnacle Merger Sub, Inc. | equity-commitment-letter.docx | Harrowgate Private Equity Fund IV LP | Pinnacle Merger Sub, Inc. | Executed March 27, 2025 | Complete | 2025-03-27 | Includes $21,500,000 management rollover equity
7 | Co-Investment | Co-Investment Agreement — Ashford Growth Partners LP commitment of $60,000,000 | co-investment-agreement-ashford.docx | David Nakamura (Ashford Growth Partners LP) / Calderwood & Harkness LLP | HPE Fund IV | Executed March 27, 2025 | Complete | 2025-03-27 | $60M of $318.5M total sponsor equity
8 | Limited Guarantee | Limited Guarantee — HPE Fund IV guaranteeing Merger Sub's payment obligations, including reverse termination fee of $58,800,000 | limited-guarantee.docx | Harrowgate Private Equity Fund IV LP | Pennfield Holdings, Inc. | Executed April 7, 2025 | Complete | 2025-04-07 | Reverse termination fee = 6.0% × $980M
9 | Voting Agreement | Voting and Support Agreement — Management rollover participants (Langford, Simmons, Dunn) | voting-and-support-agreement.docx | Catherine Langford, Derek Simmons, Maxwell Dunn / Calderwood & Harkness LLP | HPE Fund IV / Merger Sub | Executed April 7, 2025 | Complete | 2025-04-07 | Agree to vote in favor of merger and against competing proposals
10 | Rollover Agreement | Rollover Agreement — Langford ($12.5M), Simmons ($5.0M), Dunn ($4.0M); total $21.5M | rollover-agreement.docx | Catherine Langford, Derek Simmons, Maxwell Dunn / Calderwood & Harkness LLP | HPE Fund IV | Executed April 7, 2025 | Complete | 2025-04-07 | ~2.2% of total equity value
11 | Financing | Debt Commitment Letter — Falconer National Bank, N.A. and Dunmore Capital Markets LLC ($490M TLB + $150M RCF = $640M committed debt) | debt-commitment-letter-markup.docx | Gregory Poole (Falconer) / Samantha Reeves (Dunmore) | HPE Fund IV / Merger Sub | Executed March 24, 2025 | Complete | 2025-03-24 | TLB: 7-year, SOFR + 400 bps; RCF: 5-year, SOFR + 350 bps, undrawn at close; 15 business day marketing period post-signing
12 | Insurance | R&W Insurance Policy — Meridian Specialty Insurance Company ($100M limit; $9.8M retention) | rw-insurance-policy-summary.docx | James Fielding (Lockwood Risk Advisors LLC — broker); Andrea Shelby (Winslow & Crane LLP — underwriting counsel) | Harrowgate (buyer-side policy) | Bound March 28, 2025 | Complete | 2025-03-28 | Retention = 1% of $980M deal value
13 | Insurance | No-Claims Declaration — pre-closing declaration to Meridian Specialty Insurance Company | no-claims-declaration.docx | Calderwood & Harkness LLP / HPE Fund IV | Meridian Specialty Insurance Company | At Closing | Drafted | Confirming no claim made or known under R&W policy
14 | Escrow | Escrow Agreement — Grandview Trust Company, N.A. (termination fee escrow of $34,300,000) | escrow-agreement.docx | Karen Milford (Grandview Trust) / Calderwood & Harkness LLP | Pennfield / HPE Fund IV / Grandview Trust | Executed April 7, 2025 | Complete | 2025-04-07 | Termination fee = 3.5% × $980M
15 | Funds Flow | Closing Funds Flow Memorandum and supporting spreadsheet | funds-flow-memorandum.docx; funds-flow-spreadsheet.xlsx | Megan Chu (Calderwood & Harkness LLP) | All parties | Prior to Closing | In Progress | Wire instructions for Falconer (admin agent), Grandview Trust (escrow), Marlowe Asset Management Stock Transfer (paying agent), and advisor fee recipients
16 | Disclosure Schedules | Buyer Disclosure Schedules to Merger Agreement | buyer-disclosure-schedules.docx | Calderwood & Harkness LLP / HPE Fund IV | Pennfield | Delivered April 7, 2025 | Complete | 2025-04-07 | Includes schedules re: organization, authority, Merger Sub capitalization, litigation, financing commitments
17 | Delaware Filing | Certificate of Merger — filing with Delaware Secretary of State | DGCL § 251 | Calderwood & Harkness LLP / Marsden & Holt LLP (Elizabeth Parrish, local Delaware counsel) | Delaware Secretary of State | At Closing | Not Started | To be filed upon satisfaction of all closing conditions
18 | Legal Opinion | Legal opinion of Calderwood & Harkness LLP (buyer's counsel) — due authorization, valid existence, enforceability | Merger Agreement | Oliver Mackenzie / Harrison Wexford (Calderwood & Harkness LLP) | Pennfield | At Closing | Not Started
19 | Legal Opinion | Legal opinion of Marsden & Holt LLP — Delaware law matters / DGCL opinion | Merger Agreement | Elizabeth Parrish (Marsden & Holt LLP) | Pennfield | At Closing | Not Started | Local Delaware counsel to Harrowgate
20 | Good Standing | Certificate of Good Standing — Pinnacle Merger Sub, Inc. from Delaware Secretary of State | Merger Agreement | Calderwood & Harkness LLP / Marsden & Holt LLP | Pennfield | At Closing | Not Started | Dated within 5 business days of closing
21 | Financing | Executed Credit Agreement — Senior Secured Credit Facilities Agreement among Pinnacle Merger Sub / Surviving Corporation, Falconer National Bank (admin agent), and lenders | credit-agreement-execution-version.docx | Calderwood & Harkness LLP / Falconer (Gregory Poole) / Dunmore (Samantha Reeves) | All financing parties | At Closing | In Progress | Documentation in progress; consistent with debt commitment letter terms
[sheet: Closing Deliverables — Target]
Item No. | Category | Deliverable Description | Merger Agreement / Ancillary Reference | Responsible Party | Counterparty / Recipient | Due Date | Status | Date Completed | Notes
1 | Officer's Certificate | Officer's Certificate of Pennfield — certifying accuracy of representations and warranties and compliance with covenants | Section 7.02(d) | Catherine Langford (CEO) / Derek Simmons (CFO) — Pennfield; Calloway, Briggs & Harmon LLP (Janet Alcorn / Steven Devereux) (draft) | Harrowgate / Merger Sub | At Closing | Not Started
2 | Tax Certificate | FIRPTA Certificate — certificate of non-foreign status per Treas. Reg. § 1.1445-2(c)(3) | firpta-certificate-request-letter.docx | Patricia Okafor (GC, Pennfield); Calloway, Briggs & Harmon LLP | Calderwood & Harkness LLP / HPE Fund IV | At Closing | In Progress | Request letter sent by Calderwood & Harkness to Patricia Okafor
3 | Tax Certificate | IRS notice pursuant to Treas. Reg. § 1.897-2(h) (FIRPTA notice) | firpta-certificate-request-letter.docx | Patricia Okafor (GC, Pennfield) | IRS | At Closing | Not Started | Confirming Pennfield is not a U.S. real property holding corporation, or that FIRPTA withholding is satisfied
4 | Good Standing | Certificate of good standing — Pennfield Holdings, Inc. from Delaware Secretary of State | Merger Agreement | Calloway, Briggs & Harmon LLP / Pennfield | Calderwood & Harkness LLP / HPE Fund IV | At Closing | Not Started | EIN: 82-4917305; registered agent: Capitol Registered Agents, Inc., 850 New Burton Road, Suite 201, Dover, DE 19904
5 | Board Approval | Pennfield Board resolutions approving the Merger Agreement (including Special Committee recommendation) | Merger Agreement | Gloria Vásquez (Special Committee Chair); Thomas Renwick (Board Chairman); Patricia Okafor (Corp. Secretary) | Filing | Prior to Signing | Complete | 2025-04-07 | Special Committee: Vásquez, Ashworth, Kauffman unanimously recommended
6 | Legal Opinion | Legal opinion of Calloway, Briggs & Harmon LLP (target counsel) | Merger Agreement | Janet Alcorn (CBH) | HPE Fund IV / Calderwood & Harkness LLP | At Closing | Not Started
7 | Payoff Letters | Payoff letters for Pennfield's existing credit facility indebtedness (if any to be retired at closing) | Merger Agreement | Derek Simmons (CFO, Pennfield) / Calloway, Briggs & Harmon LLP | Calderwood & Harkness LLP / Falconer | Prior to Closing | Not Started | Change of control provisions in existing credit agreements to be addressed
8 | Fairness Opinion | Fairness opinion of Whitmore Zanthor & Co. delivered to Pennfield Special Committee | Merger Agreement (background) | Andrew Prescott / Nadia El-Amin (Whitmore Zanthor & Co.) | Pennfield Special Committee | Prior to Signing | Complete | 2025-04-07 | Delivered to Special Committee in connection with Board approval
9 | Stockholder Approval | Results of special meeting of Pennfield stockholders — majority vote of outstanding shares | Section 7.01(b); DGCL § 251 | Pennfield (Patricia Okafor); Oakhurst Proxy Advisors LLC (Margaret Quinlan); Marlowe Asset Management Stock Transfer, Inc. (Daniel Roth) | All parties | 2025-06-19 (estimated) | Not Started | 58,200,000 shares outstanding; fully diluted: 61,450,000
10 | Target Disclosure Schedules | Target Disclosure Schedules to Merger Agreement (delivered at signing) | Merger Agreement | Calloway, Briggs & Harmon LLP / Pennfield | Calderwood & Harkness LLP / HPE Fund IV | At Signing | Complete | 2025-04-07
11 | Transfer Agent | Letter of transmittal and paying agent instructions — Marlowe Asset Management Stock Transfer, Inc. | Merger Agreement | Daniel Roth (Marlowe Asset Management Stock Transfer, Inc.); Calloway, Briggs & Harmon LLP | Pennfield stockholders | At Closing | Not Started | Per-share merger consideration: $15.95 ($980M ÷ 61,450,000 FD shares)
12 | Lien Releases | UCC termination statements and lien releases for existing secured indebtedness | Merger Agreement | Derek Simmons (CFO, Pennfield) / Calloway, Briggs & Harmon LLP | Calderwood & Harkness LLP / Falconer | At Closing | Not Started | To be delivered concurrently with payoff of existing indebtedness
13 | Secretary's Certificate | Secretary's Certificate of Pennfield — certifying organizational documents, board resolutions, and incumbency of officers | Merger Agreement | Patricia Okafor (Corporate Secretary, Pennfield) / Calloway, Briggs & Harmon LLP | Calderwood & Harkness LLP / HPE Fund IV | At Closing | Not Started | Includes certified copies of Certificate of Incorporation, Bylaws, and board/stockholder resolutions
14 | Equity Plan Treatment | Evidence of cancellation / cash-out of all outstanding Pennfield stock options and RSUs (3,250,000 awards) | Merger Agreement | Patricia Okafor (GC) / Calloway, Briggs & Harmon LLP | HPE Fund IV / Calderwood & Harkness LLP | At Closing | Not Started | Options/RSUs cashed out at $15.95 per share less applicable exercise price; rollover participants subject to rollover agreement
[sheet: Regulatory Approvals]
Item No. | Regulatory Body | Filing / Approval Description | Filing Date | Expected Clearance / Expiration Date | Filing Fee | Responsible Party | Status | Date Cleared | Notes
1 | FTC / DOJ (HSR Act) | Hart-Scott-Rodino Premerger Notification — Buyer filing | 2025-04-08 (estimated) | 2025-05-08 (30 calendar days post-filing) | $280,000 | Elaine Forsythe (Calderwood & Harkness LLP — Antitrust & Competition); Harrowgate Private Equity Fund IV LP | Not Filed | Deal value $980M exceeds $119.5M 2025 size-of-transaction threshold; low risk of second request per antitrust risk assessment; no horizontal overlap; fragmented specialty retail market
2 | FTC / DOJ (HSR Act) | Hart-Scott-Rodino Premerger Notification — Target filing | 2025-04-08 (estimated) | 2025-05-08 | N/A (paid by Buyer) | Calloway, Briggs & Harmon LLP / Pennfield Holdings, Inc. | Not Filed
3 | SEC | Schedule 13E-3 (going-private transaction) — joint filing by Pennfield and Harrowgate | 2025-04-22 (with preliminary proxy) | N/A | Calderwood & Harkness LLP / Calloway, Briggs & Harmon LLP | Not Started | Required for going-private transaction
4 | SEC | Schedule 14A — Preliminary Proxy Statement | 2025-04-22 (estimated) | N/A | Calloway, Briggs & Harmon LLP / Pennfield | Not Started
5 | SEC | Schedule 14A — Definitive Proxy Statement mailed to stockholders | 2025-05-22 (estimated) | N/A | Calloway, Briggs & Harmon LLP / Pennfield; Oakhurst Proxy Advisors LLC (Margaret Quinlan) | Not Started | Must be mailed at least 20 business days prior to special meeting
6 | SEC | Form 8-K — announcing execution of Merger Agreement | 2025-04-07 | N/A | Calloway, Briggs & Harmon LLP / Pennfield (Patricia Okafor) | In Progress | To be filed within 4 business days of signing
7 | Delaware Secretary of State | Certificate of Merger — filing upon closing | At Closing (estimated 2025-06-30) | Filing fee TBD | Calderwood & Harkness LLP / Marsden & Holt LLP (Elizabeth Parrish) | Not Started | DGCL § 251
8 | Non-U.S. Merger Control | Assessment of foreign regulatory filing requirements | N/A | N/A | N/A | Elaine Forsythe (Calderwood & Harkness LLP) | Complete | No foreign operations identified; no non-U.S. merger control filings required
[sheet: Third-Party Consents]
Item No. | Agreement / Counterparty | Type of Provision | Description | Responsible Party | Consent Requested Date | Consent Received Date | Status | Notes
1 | Pennfield Existing Credit Agreement — [Lender TBD] | Change of Control / Acceleration | Merger constitutes a change of control under Pennfield's existing credit agreement, triggering mandatory repayment / acceleration provision | Calloway, Briggs & Harmon LLP / Derek Simmons (CFO) | Not Requested | Existing indebtedness to be retired at closing per funds flow; payoff letter required
2 | Executive Employment Agreement — Catherine Langford (CEO) | Change of Control | Change of control provision in CEO employment agreement; triggers severance and acceleration of equity awards unless rollover election made | Calloway, Briggs & Harmon LLP / Patricia Okafor (GC) | In Progress | Langford rolling over $12.5M; rollover agreement executed April 7, 2025
3 | Executive Employment Agreement — Derek Simmons (CFO) | Change of Control | Change of control provision in CFO employment agreement | Calloway, Briggs & Harmon LLP / Patricia Okafor | In Progress | Simmons rolling over $5.0M
4 | Executive Employment Agreement — Maxwell Dunn (COO) | Change of Control | Change of control provision in COO employment agreement | Calloway, Briggs & Harmon LLP / Patricia Okafor | In Progress | Dunn rolling over $4.0M
5 | Executive Employment Agreement — Patricia Okafor (GC) | Change of Control | Change of control provision in GC employment agreement; severance provisions triggered | Calloway, Briggs & Harmon LLP | Not Requested | Okafor is not a rollover participant
6 | Pennfield Equity Incentive Plan | Change of Control | Merger constitutes a change of control under equity incentive plans; triggers vesting acceleration for 3,250,000 options/RSUs outstanding | Calloway, Briggs & Harmon LLP / Pennfield Board | In Progress | Options/RSUs to be cashed out at $15.95 per share less exercise price, or rolled per rollover agreement
7 | Commercial Lease Agreements (select locations) | Change of Control / Consent Required | Certain retail location leases contain change of control consent requirements; identified in real estate lease portfolio summary | Calloway, Briggs & Harmon LLP / Megan Chu (Calderwood & Harkness — review) | Not Requested | 187 company-owned + 22 outlet locations across 34 states; individual lease review for consent triggers underway
8 | Key Vendor / Supply Agreements | Anti-Assignment / Consent Required | Certain material vendor and supply agreements contain anti-assignment or consent provisions triggered by the merger | Calloway, Briggs & Harmon LLP / Pennfield (Maxwell Dunn, COO) | Not Requested | Per material contracts review memo dated March 25, 2025
9 | Franchise / Licensing Agreements | Consent Required | Certain licensing arrangements may require licensor consent upon change of control | Calloway, Briggs & Harmon LLP / Pennfield | Not Requested | Identified in IP diligence memo and material contracts review
10 | Insurance Policies — D&O Tail Policy | Change of Control | Directors' and officers' liability insurance tail policy to be obtained for 6-year period post-closing per Merger Agreement | Patricia Okafor (GC) / Calloway, Briggs & Harmon LLP | Not Requested | Per Section 6.08 of Merger Agreement; premium not to exceed 300% of current annual premium
11 | Technology / Software Licenses (Hollowell & Co., Pinnacle Health IT, etc.) | Anti-Assignment / Consent Required | Enterprise software license agreements with anti-assignment clauses triggered by change of control | Maxwell Dunn (COO) / Calloway, Briggs & Harmon LLP | Not Requested | Review underway; key agreements identified in technology diligence workstream
12 | Warehouse / Distribution Center Leases (3 locations) | Change of Control / Consent Required | Distribution center leases in Charlotte, NC; Columbus, OH; and Dallas, TX contain change of control provisions | Calloway, Briggs & Harmon LLP / Derek Simmons (CFO) | Not Requested | Identified in real estate lease portfolio summary
13 | Corporate Headquarters Lease — Charlotte, NC | Consent Required | Lease for 4500 Commerce Boulevard, Suite 800, Charlotte, NC 28202 contains assignment/change of control consent provision | Calloway, Briggs & Harmon LLP / Patricia Okafor | Not Requested | Landlord: Meridian Property Group LLC
14 | Customer Agreements — Top 5 Wholesale Accounts | Anti-Assignment / Consent Required | Certain wholesale distribution agreements contain change of control consent requirements | Calloway, Briggs & Harmon LLP / Maxwell Dunn (COO) | Not Requested | Top 5 accounts represent ~18% of revenue; individual review underway
15 | 401(k) Plan — Change in Sponsoring Employer | Change of Control | Pennfield 401(k) plan may require amendment or notice upon change in sponsoring employer control | Calloway, Briggs & Harmon LLP / Patricia Okafor / Sylvia Hartwell (C&H — Tax) | Not Requested | Benefits counsel review in progress
16 | Surety Bonds / Performance Bonds | Consent Required | Certain state-required retail surety bonds may require reissuance or consent upon change of control | Calloway, Briggs & Harmon LLP / Pennfield | Not Requested | Applicable in select states with bonding requirements for retail operations
[sheet: Pre-Closing Covenants]
Item No. | Covenant Description | Merger Agreement Section | Applicable Party | Monitoring Responsibility | Compliance Status | Notes
1 | No-shop covenant — Pennfield restricted from soliciting, initiating, or encouraging competing proposals; subject to fiduciary-out exception for unsolicited Superior Proposals | Section 6.04 | Target | Calderwood & Harkness LLP (Oliver Mackenzie / Ryan Kowalski); monitoring of any competing activity | Compliant | No go-shop period; pre-signing market check concluded March 14, 2025 with no competing bids received
2 | Conduct of business in ordinary course — Pennfield to operate business in ordinary course consistent with past practice between signing and closing | Section 6.01 | Target | Jonah Whitfield (Harrowgate) / Ryan Kowalski (Calderwood & Harkness) | Compliant | Ongoing monitoring
3 | Negative covenants — restrictions on Target's ability to incur indebtedness, dispose of assets, amend organizational documents, issue equity, declare dividends, etc. | Section 6.01 | Target | Ryan Kowalski / Megan Chu (Calderwood & Harkness) | Compliant
4 | Financing cooperation covenant — Target required to cooperate with Buyer's debt financing efforts during 15 business day marketing period | Section 6.05 | Target | Calderwood & Harkness LLP / Ridgepoint Partners LLC (Marcus Hale); Falconer (Gregory Poole) / Dunmore (Samantha Reeves) | In Progress | Marketing period runs 15 business days post-signing; cooperation includes access to management, financial information, and participation in lender meetings
5 | Stockholder meeting covenant — Target required to hold special meeting within required period and recommend merger to stockholders | Section 6.03 | Target | Calloway, Briggs & Harmon LLP / Oakhurst Proxy Advisors LLC (Margaret Quinlan) | Compliant | Special meeting targeted for June 19, 2025; proxy materials in preparation
6 | Reasonable best efforts — both parties to use reasonable best efforts to obtain regulatory approvals and satisfy closing conditions | Section 6.06 | Both | Elaine Forsythe / Oliver Mackenzie (Calderwood & Harkness); Janet Alcorn (CBH) | Compliant | HSR filing targeted for April 8, 2025
7 | Notification covenant — parties to notify each other promptly of any event that could reasonably be expected to cause any condition to closing not to be satisfied | Section 6.07 | Both | Ryan Kowalski / Megan Chu (Calderwood & Harkness) | Compliant
8 | Indemnification cap maintenance — indemnification obligations capped at 12% of aggregate merger consideration ($117,600,000) | Section 9.02 | Both | Calderwood & Harkness LLP | Not Yet Applicable | Post-closing indemnification provision; R&W insurance policy ($100M limit, $9.8M retention) provides additional coverage
9 | D&O indemnification and tail insurance covenant — Buyer to maintain D&O indemnification and obtain 6-year tail policy for pre-closing acts | Section 6.08 | Buyer | Calderwood & Harkness LLP / Patricia Okafor (GC, Pennfield) | In Progress | Tail policy quotes being obtained; premium cap: 300% of current annual D&O premium
10 | Preservation of books and records — Buyer to maintain Target's books and records for minimum of 6 years post-closing | Section 6.09 | Buyer | Calderwood & Harkness LLP / Jonah Whitfield (Harrowgate) | Not Yet Applicable | Post-closing obligation
11 | Employee benefits covenant — Buyer to provide compensation and benefits to continuing employees at levels substantially comparable to those provided prior to closing for 12 months post-closing | Section 6.10 | Buyer | Calderwood & Harkness LLP / Harrowgate (Rebecca Talmadge) | Not Yet Applicable | Post-closing obligation; integration planning underway
12 | Tax cooperation covenant — parties to cooperate on tax matters, including preparation of pre-closing tax returns and transfer tax obligations | Section 6.11 | Both | Sylvia Hartwell (Calderwood & Harkness — Tax) / Alan Fitzgerald (Crestline Tax Advisors) | Compliant | Transfer taxes to be borne by Buyer per Merger Agreement