PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — FOR INTERNAL USE AND CLIENT DISTRIBUTION ONLY

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — FOR INTERNAL USE AND CLIENT DISTRIBUTION ONLY
CLOSING FUNDS FLOW MEMORANDUM
Acquisition of Pennfield Holdings, Inc. by Harrowgate Private Equity Fund IV LP
Project Summit
Calderwood & Harkness LLP Matter No.: 1003-00004
Estimated Closing Date: June 30, 2025 (subject to satisfaction of all closing conditions)
Prepared by:
Megan Chu, Working Associate, Mergers & Acquisitions Practice Ryan Kowalski, Lead Associate, Mergers & Acquisitions Practice Calderwood & Harkness LLP
Reviewed by:
Oliver Mackenzie, Responsible Partner, Mergers & Acquisitions Practice Harrison Wexford, Billing Partner, Mergers & Acquisitions Practice Calderwood & Harkness LLP
Distribution List:
Oliver Mackenzie — Calderwood & Harkness LLP Harrison Wexford — Calderwood & Harkness LLP Ryan Kowalski — Calderwood & Harkness LLP Megan Chu — Calderwood & Harkness LLP Sylvia Hartwell — Calderwood & Harkness LLP Nathaniel Cross — Harrowgate Capital Partners LLC Rebecca Talmadge — Harrowgate Capital Partners LLC Jonah Whitfield — Harrowgate Capital Partners LLC David Nakamura — Ashford Growth Partners LP Marcus Hale — Ridgepoint Partners LLC Priya Chandrasekaran — Ridgepoint Partners LLC Gregory Poole — Falconer National Bank, N.A. Samantha Reeves — Dunmore Capital Markets LLC
This memorandum and all information contained herein are protected by the attorney-client privilege and the work product doctrine. This document is prepared solely for the benefit of the addressees identified above and may not be distributed, disclosed, or reproduced, in whole or in part, to any other person or entity without the prior written consent of Calderwood & Harkness LLP. Any unauthorized use or disclosure is strictly prohibited.
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Section 1: Introduction and Transaction Overview
1.1 Purpose
This Closing Funds Flow Memorandum (this "Memorandum") sets forth the sources and uses of funds, the funds flow sequence, and the wire transfer instructions for the closing (the "Closing") of the acquisition of Pennfield Holdings, Inc. ("Pennfield" or the "Company"), a Delaware corporation whose common stock is listed on the Nasdaq Global Select Market under the ticker symbol "PNFD" (CUSIP: 708234109), by Harrowgate Private Equity Fund IV LP ("HPE Fund IV" or the "Buyer"), a Delaware limited partnership, pursuant to the Agreement and Plan of Merger, dated as of April 7, 2025 (the "Merger Agreement"), among HPE Fund IV, Pinnacle Merger Sub, Inc., a Delaware corporation and wholly owned indirect subsidiary of HPE Fund IV ("Merger Sub"), and Pennfield.
The purpose of this Memorandum is to provide all parties involved in the Closing with a comprehensive summary of: (a) the sources of funds to be utilized to consummate the Merger (as defined below) and pay related transaction costs; (b) the uses to which such funds will be applied; (c) the precise sequence and timing of fund transfers on the Closing Date; and (d) the wire transfer instructions for each payee and funding party. This Memorandum is intended to serve as the operative coordination document for all parties on the Closing Date and should be reviewed carefully by each recipient.
1.2 Transaction Structure
The acquisition of Pennfield by HPE Fund IV will be effected through a reverse triangular merger (the "Merger") in accordance with Section 251 of the Delaware General Corporation Law (the "DGCL"). Pursuant to the Merger Agreement, Merger Sub will merge with and into Pennfield, with Pennfield surviving the Merger as a wholly owned indirect subsidiary of HPE Fund IV (the "Surviving Corporation"). Upon the effectiveness of the Merger, each share of Pennfield common stock issued and outstanding immediately prior to the Effective Time (other than shares held by Pennfield as treasury stock, shares owned by HPE Fund IV or Merger Sub, and shares subject to the Management Rollover (as defined below)) will be automatically converted into the right to receive the Per-Share Merger Consideration (as defined below) in cash, without interest.
1.3 Merger Consideration
The aggregate merger consideration payable in connection with the Merger (the "Aggregate Merger Consideration") is $980,000,000. The per-share merger consideration (the "Per-Share Merger Consideration") is $15.95 per share of Pennfield common stock on a fully diluted basis, based on 61,450,000 fully diluted shares, comprising:
(a) 58,200,000 shares of Pennfield common stock issued and outstanding as of immediately prior to the Effective Time; and
(b) 3,250,000 shares of Pennfield common stock underlying outstanding and unvested stock options and restricted stock units ("RSUs") that will be cancelled at the Effective Time in exchange for a cash payment equal to the excess, if any, of the Per-Share Merger Consideration over the applicable exercise price (in the case of stock options) or the Per-Share Merger Consideration (in the case of RSUs), in each case subject to applicable tax withholding.
1.4 Important Notice Regarding Estimates
All amounts set forth in this Memorandum are estimates as of the date hereof and are subject to final confirmation and adjustment on the Closing Date. Final wire amounts will be confirmed via the Closing Confirmation (the "Closing Confirmation") to be circulated to all parties on the Distribution List no later than one (1) business day prior to the Closing Date. Each party should review the Closing Confirmation carefully upon receipt and promptly notify Ryan Kowalski or Megan Chu at Calderwood & Harkness LLP of any discrepancies.
1.5 Companion Document
This Memorandum should be read in conjunction with the companion Closing Funds Flow — Sources & Uses Spreadsheet (filename: funds-flow-spreadsheet.xlsx), which contains a detailed Excel workbook with the following tabs:
•  Tab 1: Sources — Detailed breakdown of all funding sources
•  Tab 2: Uses — Detailed breakdown of all uses of funds, including payee-by-payee transaction cost detail
•  Tab 3: Wire Instructions — Completed wire transfer instruction forms for each payee (to be populated upon receipt of confirmed banking details)
•  Tab 4: Pro Forma Capitalization — Pro forma post-Closing capitalization of the Surviving Corporation
The spreadsheet will be updated as final amounts are confirmed and will be circulated in its final form concurrently with the Closing Confirmation.
Section 2: Sources of Funds
2.1 Summary Sources Table
The following table summarizes the sources of funds to be utilized to consummate the Merger and pay related transaction costs:
Note on Equity Sub-Total: The total equity contribution is $340,000,000, consisting of: (i) $258,500,000 of HPE Fund IV direct equity (net of co-invest and rollover amounts); (ii) $60,000,000 of Ashford Growth Partners LP co-investor equity; and (iii) $21,500,000 of management rollover equity. The total equity contribution of $340,000,000 equals the Aggregate Merger Consideration of $980,000,000 minus the $640,000,000 of total committed debt ($490,000,000 Term Loan B plus $150,000,000 revolving credit facility). Approximately $60,000,000 of transaction costs are funded from a combination of drawn Term Loan B proceeds and equity contributions, bringing the total effective funding requirement to approximately $1,040,000,000.
2.2 Debt Sources — Detail
2.2.1 Senior Secured Term Loan B
The Senior Secured Term Loan B facility (the "Term Loan B") will provide the single largest source of funding for the Merger. The material terms of the Term Loan B are as follows:
Facility Amount: $490,000,000
Maturity: 7 years from the Closing Date (i.e., June 30, 2032)
Interest Rate: Secured Overnight Financing Rate ("SOFR") plus 400 basis points per annum, subject to a SOFR floor as set forth in the definitive credit documentation
Borrower: The Surviving Corporation (or a designated wholly owned subsidiary thereof), as successor borrower upon consummation of the Merger
Administrative Agent: Falconer National Bank, N.A.
Commitment Letter: The Term Loan B will be funded at Closing by Falconer National Bank, N.A., in its capacity as Administrative Agent, pursuant to the Debt Commitment Letter dated March 24, 2025 (the "Debt Commitment Letter"), issued by Falconer National Bank, N.A. and Dunmore Capital Markets LLC in favor of HPE Fund IV and Merger Sub
Funding: The Term Loan B will be drawn in a single advance on the Closing Date. The net proceeds of the Term Loan B draw, after deduction of any upfront fees or original issue discount ("OID") that are netted at draw pursuant to the terms of the Fee Letter (as defined below), will be wired to the Merger Sub closing account as described in Section 4.2, Step 1 below.
Security: First-priority liens on substantially all assets of the Surviving Corporation and its domestic subsidiaries, subject to customary exceptions and exclusions as set forth in the definitive credit agreement
2.2.2 Senior Secured Revolving Credit Facility
Facility Amount: $150,000,000
Maturity: 5 years from the Closing Date (i.e., June 30, 2030)
Interest Rate: SOFR plus 350 basis points per annum, subject to a SOFR floor and a commitment fee on the unused portion, each as set forth in the definitive credit documentation
Draw Status at Closing: The revolving credit facility will remain undrawn at the Closing. No borrowing under the revolving credit facility is required to consummate the Merger.
Availability: The revolving credit facility will be available for post-Closing working capital needs and general corporate purposes of the Surviving Corporation, subject to the conditions precedent and covenants set forth in the definitive credit agreement.
2.2.3 Arrangers and Key Contacts
The debt financing arrangements are being led by the following institutions:
Falconer National Bank, N.A. — Lead Arranger, Administrative Agent, and L/C Issuer
•  Contact: Gregory Poole, Managing Director, Leveraged Finance
•  Address: 383 Madison Avenue, New York, NY 10179
•  Role: Lead arranger of the Term Loan B and the revolving credit facility; administrative agent under the definitive credit agreement; responsible for coordinating the funding draw on the Closing Date
Dunmore Capital Markets LLC — Co-Arranger and Joint Bookrunner
•  Contact: Samantha Reeves, Managing Director, Debt Capital Markets
•  Address: 500 West Monroe Street, 35th Floor, Chicago, IL 60661
•  Role: Co-arranger of the Term Loan B and the revolving credit facility; joint bookrunner responsible for syndication of the Term Loan B to institutional investors
2.2.4 Marketing Period and Syndication Status
The 15 business-day marketing period required under the Merger Agreement and the Debt Commitment Letter has been completed. As of the date of this Memorandum, the syndication of the Term Loan B has been confirmed by Falconer National Bank, N.A. and Dunmore Capital Markets LLC. All conditions precedent to the initial funding under the Debt Commitment Letter are expected to be satisfied on or prior to the Closing Date, subject to the satisfaction of the closing conditions under the Merger Agreement.
2.3 Equity Sources — Detail
2.3.1 HPE Fund IV Direct Equity
Amount: $258,500,000
Funding Entity: Harrowgate Private Equity Fund IV LP, a Delaware limited partnership (EIN: 87-2263148)
Address: 1200 Market Street, Suite 3100, Wilmington, DE 19801
General Partner: Harrowgate Capital Partners LLC ("HCP"), a Delaware limited liability company, serves as the general partner of HPE Fund IV
Commitment Letter: The equity contribution will be funded pursuant to the Equity Commitment Letter dated March 27, 2025 (the "Equity Commitment Letter"), from HPE Fund IV to Merger Sub, pursuant to which HPE Fund IV has committed to contribute, directly or indirectly, the equity capital required to consummate the Merger (net of co-investor equity and management rollover equity)
Funding Mechanism: HPE Fund IV will wire $258,500,000 in immediately available U.S. dollar funds to the designated Merger Sub closing account on the Closing Date, as described in Section 4.2, Step 2 below
2.3.2 Ashford Growth Partners LP Co-Investment
Amount: $60,000,000
Funding Entity: Ashford Growth Partners LP, a Delaware limited partnership
Contact: David Nakamura, Partner
Address: 150 North Riverside Plaza, Suite 2200, Chicago, IL 60606
Agreement: The co-investment will be funded pursuant to the Co-Investment Agreement dated March 27, 2025 (the "Co-Investment Agreement"), between HPE Fund IV and Ashford Growth Partners LP, pursuant to which Ashford Growth Partners LP has committed to co-invest alongside HPE Fund IV in the Merger on the terms and conditions set forth therein
Funding Mechanism: Ashford Growth Partners LP will wire $60,000,000 in immediately available U.S. dollar funds to the designated Merger Sub closing account on the Closing Date, as described in Section 4.2, Step 2 below
2.3.3 Management Rollover Equity
Aggregate Amount: $21,500,000
Agreement: The management rollover will be effected pursuant to the Rollover Agreement dated April 7, 2025 (the "Rollover Agreement"), among HPE Fund IV, Merger Sub, and each of the rollover participants identified below
Rollover Participants:
•  Catherine Langford, Chief Executive Officer of Pennfield — $12,500,000
•  Derek Simmons, Chief Financial Officer of Pennfield — $5,000,000
•  Maxwell Dunn, Chief Operating Officer of Pennfield — $4,000,000
Mechanism: The management rollover is effected by each rollover participant's contribution of a designated number of shares of Pennfield common stock (each, a "Rollover Share") to the Surviving Corporation (or a designated holding vehicle) immediately prior to the Effective Time, in exchange for equity interests in the Surviving Corporation (or such holding vehicle), in each case having a value equal to the Per-Share Merger Consideration multiplied by the number of Rollover Shares contributed by such participant. No cash wire is involved for the management rollover amounts. The management rollover is a non-cash transaction that reduces the cash merger consideration payable to the rollover participants and is treated as an equity source for purposes of this Memorandum.
Tax Treatment: Each rollover participant's contribution of Rollover Shares is intended to qualify as a tax-deferred contribution under Section 351 of the Internal Revenue Code of 1986, as amended, or as an exchange under Section 721 of the Code, as applicable, subject to the terms and conditions of the Rollover Agreement and any related tax opinions or advice.
2.3.4 Total Equity Commitment
The total equity commitment in connection with the Merger is $340,000,000, consisting of:
The total equity commitment of $340,000,000 represents approximately 34.7% of the Aggregate Merger Consideration of $980,000,000, with the balance funded by debt and cash on the Pennfield balance sheet.
2.4 Pennfield Cash on Balance Sheet
Estimated Amount: $90,000,000
Entity: Pennfield Holdings, Inc.
Application: Cash on the Pennfield balance sheet will be applied at Closing as a source of funds to partially fund the Aggregate Merger Consideration. This application will be effected as an internal bookkeeping entry; no external wire transfer is required for this amount. As a consequence of the Merger, the cash on Pennfield's balance sheet becomes available to the Surviving Corporation and is applied as a source for purposes of calculating the overall funding requirements.
Confirmation: The final cash amount on the Pennfield balance sheet as of the Closing Date is subject to confirmation by Derek Simmons, Chief Financial Officer of Pennfield, and Pemberton & Associates LLP (the Company's independent auditor; lead audit partner: Kevin Tarrant Corporation), no later than two (2) business days prior to the Closing Date. Any material variance from the estimated $90,000,000 amount will be reflected in the Closing Confirmation and may require a corresponding adjustment to the equity contribution amounts or the Term Loan B draw amount.
Section 3: Uses of Funds
3.1 Summary Uses Table
The following table summarizes the uses to which the sources of funds described in Section 2 will be applied at Closing:
Reconciliation Note: Total cash sources equal $920,000,000 ($490,000,000 Term Loan B draw + $258,500,000 HPE Fund IV equity + $60,000,000 Ashford co-invest + $90,000,000 Pennfield cash on balance sheet + $21,500,000 non-cash management rollover). Including the non-cash management rollover, total sources aggregate $941,500,000 in cash plus $21,500,000 in non-cash equity. Transaction costs of approximately $60,000,000 are funded from a combination of the Term Loan B proceeds and the equity contributions, which have been sized to cover both the Aggregate Merger Consideration and estimated transaction costs. The Term Loan B and equity contributions in the aggregate are sufficient to fund $958,500,000 of cash merger consideration and approximately $60,000,000 of transaction costs, for an aggregate cash deployment of approximately $1,018,500,000, with any balance remaining in the Surviving Corporation's accounts for post-Closing working capital purposes.
3.2 Estimated Transaction Costs — Breakdown
The following table sets forth the estimated transaction costs to be paid at or in connection with the Closing. These amounts are estimates and are subject to final confirmation by each service provider no later than three (3) business days prior to the Closing Date.
Invoice Submission: All service providers are requested to submit final invoices to Ryan Kowalski at Calderwood & Harkness LLP (with a copy to Jonah Whitfield at Harrowgate Capital Partners LLC) for review and approval no later than three (3) business days prior to the anticipated Closing Date. Any invoices received after such date may not be included in the Closing funds flow and may be paid separately following the Closing.
R&W Insurance: The representations and warranties insurance policy (the "R&W Policy") to be bound at or prior to Closing is being placed with Meridian Specialty Insurance Company through Lockwood Risk Advisors LLC as insurance broker. The R&W Policy has a policy limit of $100,000,000 and a retention of $9,800,000 (representing 1.0% of the enterprise value). The premium for the R&W Policy, together with any applicable broker fees and taxes, will be payable at Closing by wire to Lockwood Risk Advisors LLC's trust/premium account, as set forth in Section 5.10 below.
Debt Financing Fees: Upfront fees, commitment fees, and original issue discount payable to Falconer National Bank, N.A. and Dunmore Capital Markets LLC in connection with the Term Loan B and the revolving credit facility are governed by the Fee Letter dated March 24, 2025 (the "Fee Letter"), among HPE Fund IV, Merger Sub, Falconer National Bank, N.A., and Dunmore Capital Markets LLC. Certain of these fees may be netted from the Term Loan B draw at funding (i.e., the net proceeds credited to the Merger Sub closing account will reflect a deduction for such fees). The allocation and mechanics of fee payment will be confirmed with Gregory Poole and Samantha Reeves prior to Closing and reflected in the Closing Confirmation.
3.3 Existing Pennfield Indebtedness
As of the date of this Memorandum, Pennfield's existing revolving credit facility is expected to have $0 drawn at Closing. Pennfield does not have any other material outstanding funded indebtedness.
Pennfield's existing revolving credit facility will be terminated upon the Closing. A termination letter will be delivered by Pennfield's outside counsel, Calloway, Briggs & Harmon LLP (contact: Janet Alcorn, Partner), to the lender under Pennfield's existing revolving credit facility concurrently with the Closing.
Note: In the event that any balance is outstanding under Pennfield's existing revolving credit facility at Closing, the payoff amount will be confirmed by Pennfield's counsel and added to the uses of funds in this Memorandum. A corresponding payoff wire will be added to the wire transfer instructions in Section 5, and the sources of funds will be adjusted accordingly to account for the additional funding requirement.
Section 4: Funds Flow Sequence
4.1 Pre-Closing Steps (T-1 Business Day and Earlier)
The following pre-closing steps are to be completed on or before the business day immediately preceding the anticipated Closing Date (i.e., on or before June 27, 2025, if the Closing occurs on June 30, 2025):
Step 1 — Final Wire Amount Confirmation. Calderwood & Harkness LLP will circulate the Closing Confirmation, setting forth the final confirmed wire amounts for all sources and uses, to all parties on the Distribution List. The Closing Confirmation will be circulated no later than one (1) business day prior to the anticipated Closing Date. Each party must review the Closing Confirmation and confirm agreement with the stated amounts by responding to Ryan Kowalski and Megan Chu at Calderwood & Harkness LLP by 5:00 p.m. ET on the business day prior to Closing.
Step 2 — Closing Deliverables Verification. Calderwood & Harkness LLP will verify receipt of all closing deliverables required to be delivered on or prior to the Closing Date, as set forth in the comprehensive Closing Checklist maintained by Calderwood & Harkness LLP. Any outstanding deliverables will be identified and the responsible party notified immediately. Closing will not proceed until all material closing deliverables have been received or appropriate arrangements have been made for delivery at Closing.
Step 3 — Confirmation of HSR Clearance. The parties will confirm that Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act") clearance has been obtained. As of the date of this Memorandum, HSR clearance has been obtained; the applicable waiting period under the HSR Act expired on or about May 8, 2025, without any request for additional information or documentary materials (i.e., a "second request") from the Federal Trade Commission or the Antitrust Division of the U.S. Department of Justice.
Step 4 — Confirmation of Stockholder Approval. The parties will confirm that Pennfield stockholder approval of the Merger Agreement has been obtained. As of the date of this Memorandum, stockholder approval was obtained at the special meeting of Pennfield stockholders held on or about June 19, 2025, at which a majority of the outstanding shares of Pennfield common stock entitled to vote thereon voted in favor of the adoption of the Merger Agreement, as required by Section 251 of the DGCL and the terms of the Merger Agreement.
Step 5 — Pre-Funding of Escrow Account / Disposition of Termination Fee Escrow. The parties will confirm the status of the termination fee escrow of $34,300,000 (the "Termination Fee Escrow") that was funded at the Grandview Trust Company, N.A. escrow account at the time of execution of the Merger Agreement. The Termination Fee Escrow was established to secure the payment obligations under Section 8.3 of the Merger Agreement in the event that the Merger Agreement was terminated under specified circumstances. Upon consummation of the Merger, the Termination Fee Escrow is no longer required and will be released to HPE Fund IV in accordance with the terms of the Escrow Agreement and the instructions set forth in Section 4.2, Step 6 below.
Step 6 — FIRPTA Certificate. Pennfield will deliver to Merger Sub a certificate of non-foreign status (the "FIRPTA Certificate") in accordance with Treasury Regulations Section 1.1445-2(c)(3), certifying that Pennfield is not, and has not been during the relevant period, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Internal Revenue Code. The FIRPTA Certificate will be prepared by Pennfield's counsel and reviewed by Calderwood & Harkness LLP prior to delivery.
Step 7 — Officer's Certificate (Buyer). HPE Fund IV will deliver to Pennfield an Officer's Certificate, executed by an authorized officer of the general partner of HPE Fund IV, certifying as to the accuracy of the representations and warranties of HPE Fund IV and Merger Sub contained in the Merger Agreement as of the Closing Date and the compliance by HPE Fund IV and Merger Sub with all covenants and agreements required to be performed on or prior to the Closing Date, in each case as required by Section 7.3 of the Merger Agreement.
4.2 Closing Day Funds Flow — Step-by-Step
The following sets forth the step-by-step sequence of funds flow on the Closing Date. All times referenced below are Eastern Time. Each step is to be completed in the order set forth below, and no subsequent step should be initiated until the immediately preceding step has been confirmed as completed (unless otherwise noted). Calderwood & Harkness LLP will coordinate the sequencing and confirmation of each step, with Megan Chu and Ryan Kowalski serving as the primary points of contact.
Step 1: Debt Draw — Term Loan B
Description: Falconer National Bank, N.A., in its capacity as Administrative Agent under the Senior Secured Credit Agreement, will advance the Term Loan B proceeds in a single draw to the designated Merger Sub closing account.
Amount: $490,000,000 (gross amount), subject to reduction for any upfront fees or original issue discount that are netted at draw pursuant to the Fee Letter. The net proceeds credited to the Merger Sub closing account will be confirmed by Gregory Poole at Falconer National Bank, N.A. in the Closing Confirmation.
Wire: Falconer National Bank, N.A. will wire the net Term Loan B proceeds to the Merger Sub closing account at the bank and account specified in Section 5.1 below.
Timing: Funds must be received in the Merger Sub closing account no later than 10:00 a.m. ET on the Closing Date.
Confirmation: Upon receipt of funds, the bank holding the Merger Sub closing account will provide a credit advice or balance confirmation to Megan Chu at Calderwood & Harkness LLP and Jonah Whitfield at Harrowgate Capital Partners LLC. Megan Chu will circulate written confirmation of receipt to all parties on the Distribution List.
Step 2: Equity Contributions
Description: The equity investors will fund their respective equity contributions by wire transfer to the designated Merger Sub closing account.
(a) HPE Fund IV Direct Equity Contribution
Amount: $258,500,000
Wire: Harrowgate Private Equity Fund IV LP will wire $258,500,000 in immediately available U.S. dollar funds to the Merger Sub closing account at the bank and account specified in Section 5.1 below, from the account specified in Section 5.13 below.
Timing: Funds must be received in the Merger Sub closing account no later than 10:00 a.m. ET on the Closing Date.
(b) Ashford Growth Partners LP Co-Invest Equity Contribution
Amount: $60,000,000
Wire: Ashford Growth Partners LP will wire $60,000,000 in immediately available U.S. dollar funds to the Merger Sub closing account at the bank and account specified in Section 5.1 below, from the account specified in Section 5.14 below.
Timing: Funds must be received in the Merger Sub closing account no later than 10:00 a.m. ET on the Closing Date.
(c) Management Rollover
Amount: $21,500,000 (non-cash)
Mechanism: No cash wire is required for the management rollover. The rollover participants (Catherine Langford, Derek Simmons, and Maxwell Dunn) will contribute their respective Rollover Shares to the Surviving Corporation (or a designated holding vehicle) immediately prior to the Effective Time, in exchange for equity interests in the Surviving Corporation (or such holding vehicle), in accordance with the terms and conditions of the Rollover Agreement. The rollover contribution will be effected by delivery of stock powers, assignment agreements, and related documentation, as coordinated by Calderwood & Harkness LLP and Pennfield's counsel.
Confirmation: Upon receipt of all equity contributions, the bank holding the Merger Sub closing account will provide a credit advice or balance confirmation to Megan Chu at Calderwood & Harkness LLP and Jonah Whitfield at Harrowgate Capital Partners LLC. Megan Chu will circulate written confirmation of receipt of all equity wires to all parties on the Distribution List.
Step 3: Application of Pennfield Cash
Description: The $90,000,000 of estimated cash on the Pennfield balance sheet will be applied at Closing as a source of funds. As a consequence of the Merger, the cash held by Pennfield on its balance sheet becomes available to the Surviving Corporation and is applied as part of the funding for the Aggregate Merger Consideration.
Mechanism: This is an internal transfer and bookkeeping entry. No external wire transfer is required for this amount. The application of the Pennfield cash will be reflected in the pro forma capitalization and closing balance sheet of the Surviving Corporation.
Confirmation: Derek Simmons (CFO of Pennfield) will confirm the final cash balance on the Pennfield balance sheet to Megan Chu at Calderwood & Harkness LLP and Jonah Whitfield at Harrowgate Capital Partners LLC. Any material variance from the estimated $90,000,000 will be communicated immediately and may result in adjustments to the equity contribution amounts or the Term Loan B draw.
Step 4: Payment of Aggregate Cash Merger Consideration
Description: The aggregate cash merger consideration will be wired from the Merger Sub closing account to Marlowe Asset Management Stock Transfer, Inc. (the "Paying Agent"), for distribution to the public stockholders of Pennfield in exchange for their shares of Pennfield common stock (including amounts payable in respect of cancelled options and RSUs).
Amount: $958,500,000
This amount equals the Aggregate Merger Consideration of $980,000,000, less the $21,500,000 of management rollover equity (which is a non-cash equity contribution and does not require a cash payment). The $958,500,000 includes the cash consideration payable to holders of: (i) outstanding shares of Pennfield common stock (other than Rollover Shares, treasury shares, and shares held by HPE Fund IV or Merger Sub); and (ii) cancelled in-the-money stock options and RSUs (in each case, subject to applicable tax withholding).
Wire: A wire of $958,500,000 in immediately available U.S. dollar funds will be sent from the Merger Sub closing account to the paying agent trust account of Marlowe Asset Management Stock Transfer, Inc. at the bank and account specified in Section 5.3 below.
Paying Agent Contact: Daniel Roth, Vice President, Corporate Actions; Marlowe Asset Management Stock Transfer, Inc.; 44 Wall Street, 6th Floor, New York, NY 10005
Timing: The wire to the Paying Agent should be initiated promptly following confirmation of receipt of all debt and equity funding in Steps 1 through 3 above. The target for initiation of this wire is no later than 11:00 a.m. ET on the Closing Date, with the expectation that the wire will be received by the Paying Agent prior to 12:00 p.m. ET.
Confirmation: Marlowe Asset Management Stock Transfer, Inc. will confirm receipt of the merger consideration funds to Megan Chu at Calderwood & Harkness LLP and Jonah Whitfield at Harrowgate Capital Partners LLC. Megan Chu will circulate written confirmation to all parties on the Distribution List.
Post-Closing Distribution: Following receipt of the merger consideration funds, the Paying Agent will distribute the Per-Share Merger Consideration to Pennfield stockholders upon their submission of duly completed letters of transmittal and surrender of their stock certificates (or book-entry shares), in accordance with the terms of the Merger Agreement and the Paying Agent Agreement.
Step 5: Payment of Transaction Costs
Description: Separate wires will be sent from the Merger Sub closing account (or, as applicable, from the Surviving Corporation) to each of the transaction cost payees identified in Section 3.2 above, in the final confirmed amounts, per the wire instructions set forth in Section 5 below.
Timing: Transaction cost wires will be initiated concurrently with, or promptly following, the wire of the merger consideration to the Paying Agent in Step 4 above. The target for initiation of all transaction cost wires is no later than 12:00 p.m. ET on the Closing Date.
Coordination: Megan Chu at Calderwood & Harkness LLP will coordinate the initiation and confirmation of each transaction cost wire. Each payee should confirm receipt of its wire payment by notifying Megan Chu and Ryan Kowalski at Calderwood & Harkness LLP promptly upon receipt.
Note on Debt Financing Fees: To the extent that upfront fees or OID are netted from the Term Loan B draw at funding (i.e., deducted from the gross draw amount before crediting the Merger Sub closing account), such amounts will not require a separate wire from the Merger Sub closing account. Any additional fees payable to Falconer National Bank, N.A. or Dunmore Capital Markets LLC that are not netted from the draw will be paid by separate wire as described in Sections 5.2 and 5.9 below.
Step 6: Release / Disposition of Escrow Funds
Description: The Termination Fee Escrow of $34,300,000 held at Grandview Trust Company, N.A. will be released to HPE Fund IV upon Closing, as the termination fee escrow is no longer required upon consummation of the Merger.
Amount: $34,300,000
Mechanism: Calderwood & Harkness LLP, on behalf of HPE Fund IV, will deliver a joint instruction letter (signed by the authorized representatives of HPE Fund IV and Pennfield, as required by the Escrow Agreement) to Grandview Trust Company, N.A., directing the release of the Termination Fee Escrow funds to an account designated by HPE Fund IV.
Escrow Agent Contact: Karen Milford, Vice President, Corporate Trust; Grandview Trust Company, N.A.; 225 Franklin Street, 14th Floor, Boston, MA 02110
Timing: The joint instruction letter will be delivered to the Escrow Agent on the Closing Date, concurrently with or promptly following the filing of the Certificate of Merger. Release of the escrow funds is expected to be completed within one (1) business day of receipt of the joint instruction letter by the Escrow Agent, subject to the Escrow Agent's review and processing requirements.
Confirmation: Grandview Trust Company, N.A. will confirm the release and wire of escrow funds to Megan Chu at Calderwood & Harkness LLP and Jonah Whitfield at Harrowgate Capital Partners LLC.
Step 7: Filing of Certificate of Merger
Description: The Certificate of Merger will be filed with the Delaware Secretary of State in accordance with Section 251 of the DGCL. The Merger will become effective at the time specified in the Certificate of Merger (the "Effective Time"), which will be at such time as the Certificate of Merger is duly filed with the Delaware Secretary of State or at such later time as is agreed by the parties and set forth in the Certificate of Merger.
Responsible Party: Marsden & Holt LLP, as Delaware local counsel to the Buyer, will be responsible for filing the Certificate of Merger with the Delaware Secretary of State.
Local Counsel Contact: Elizabeth Parrish, Partner; Marsden & Holt LLP; 1313 North Market Street, Suite 700, Wilmington, DE 19801
Timing: The Certificate of Merger will be filed promptly following confirmation that all funding steps (Steps 1 through 5) have been completed and that all other closing conditions have been satisfied or waived. The target for filing is no later than 2:00 p.m. ET on the Closing Date.
Confirmation: Elizabeth Parrish at Marsden & Holt LLP will provide a file-stamped copy of the Certificate of Merger (or electronic confirmation of filing from the Delaware Secretary of State) to Megan Chu and Ryan Kowalski at Calderwood & Harkness LLP, who will circulate confirmation to all parties on the Distribution List.
Step 8: Post-Closing Notifications
Description: Following the Effective Time, the following post-closing notifications will be made:
(a) SEC Form 8-K Filing. Pennfield (or the Surviving Corporation) will file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission (the "SEC") announcing the consummation of the Merger. The Form 8-K will be prepared by Calderwood & Harkness LLP in coordination with Pennfield's counsel and will be filed via EDGAR promptly following the Effective Time (and in any event within four (4) business days of the Closing Date, as required by applicable SEC rules).
(b) Nasdaq Delisting Notification. Pennfield (or the Surviving Corporation) will notify the Nasdaq Global Select Market of the consummation of the Merger and request the delisting of the shares of Pennfield common stock (ticker: PNFD) and the deregistration of such shares under the Securities Exchange Act of 1934, as amended. The delisting and deregistration process will be coordinated by Calderwood & Harkness LLP and Pennfield's counsel.
(c) Paying Agent Notification. Pennfield (or the Surviving Corporation) will notify Marlowe Asset Management Stock Transfer, Inc., as Paying Agent and transfer agent, of the consummation of the Merger, the cessation of trading in Pennfield common stock, and the commencement of the process for payment of the Per-Share Merger Consideration to Pennfield stockholders upon their submission of duly completed letters of transmittal and surrender of stock certificates (or confirmation of book-entry transfer).
Section 5: Wire Transfer Instructions
The following wire transfer instructions are provided for each funding source and each payee in connection with the Closing. Wire instructions marked "To be confirmed" will be populated upon receipt of confirmed banking details from each applicable party and will be included in the final version of this Memorandum to be circulated with the Closing Confirmation. All wires are to be sent in immediately available U.S. dollar funds.
Each party providing wire instructions is requested to submit such instructions, signed by an authorized representative, on the party's letterhead, to Megan Chu at Calderwood & Harkness LLP no later than five (5) business days prior to the anticipated Closing Date. Calderwood & Harkness LLP will verify all wire instructions by telephone callback to each party prior to the Closing Date.
5.1 Merger Sub Closing Account
Account Name: Pinnacle Merger Sub, Inc.
Bank: To be designated (expected to be Falconer National Bank, N.A.)
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Reference: Project Summit — Closing Funds
Purpose: All debt proceeds (Term Loan B draw) and equity contributions (HPE Fund IV and Ashford Growth Partners LP) will be wired to this account. All outgoing wires for merger consideration and transaction costs will be sent from this account (or from the Surviving Corporation's account following the Effective Time, as applicable).
5.2 Falconer National Bank, N.A. — Administrative Agent (Debt Draw and Fee Payment)
Entity: Falconer National Bank, N.A.
Address: 383 Madison Avenue, New York, NY 10179
Contact: Gregory Poole, Managing Director, Leveraged Finance
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Reference: Pennfield Acquisition — Term Loan B Draw / Fee Payment
Purpose: (i) The Term Loan B draw proceeds of $490,000,000 (gross) will be funded by Falconer National Bank, N.A., as Administrative Agent, from this account (or the accounts of the lending syndicate, as applicable) to the Merger Sub closing account; and (ii) any fees payable to Falconer National Bank, N.A. not netted from the Term Loan B draw will be paid by wire to this account from the Merger Sub closing account.
5.3 Marlowe Asset Management Stock Transfer, Inc. — Paying Agent (Merger Consideration)
Entity: Marlowe Asset Management Stock Transfer, Inc.
Address: 44 Wall Street, 6th Floor, New York, NY 10005
Contact: Daniel Roth, Vice President, Corporate Actions
Account Name: To be confirmed (paying agent trust account for the benefit of Pennfield stockholders)
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Reference: Pennfield Holdings, Inc. — Merger Consideration Distribution
Amount: $958,500,000
Purpose: Receipt and distribution of the aggregate cash merger consideration to the public stockholders of Pennfield Holdings, Inc. in accordance with the Merger Agreement and the Paying Agent Agreement.
5.4 Grandview Trust Company, N.A. — Escrow Agent (Termination Fee Escrow Release)
Entity: Grandview Trust Company, N.A.
Address: 225 Franklin Street, 14th Floor, Boston, MA 02110
Contact: Karen Milford, Vice President, Corporate Trust
Account Name: To be confirmed (escrow account for the benefit of Harrowgate Private Equity Fund IV LP / Pennfield Holdings, Inc.)
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Reference: Project Summit — Termination Fee Escrow Release
Amount: $34,300,000 (release to HPE Fund IV upon Closing)
Purpose: Release of the Termination Fee Escrow to an account designated by HPE Fund IV, upon delivery of the joint instruction letter by the authorized representatives of HPE Fund IV and Pennfield in accordance with the Escrow Agreement.
5.5 Calderwood & Harkness LLP — Legal Fees (Buyer's Counsel)
Entity: Calderwood & Harkness LLP
Address: One Liberty Plaza, 55th Floor, New York, NY 10006
Matter Reference: 1003-00004 (Project Summit)
Account Name: To be confirmed (Calderwood & Harkness LLP operating account)
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed per final invoice
Purpose: Payment of legal fees and disbursements incurred by Calderwood & Harkness LLP in connection with its representation of HPE Fund IV, Merger Sub, and related entities in connection with the Merger.
5.6 Marsden & Holt LLP — Legal Fees (Delaware Local Counsel)
Entity: Marsden & Holt LLP
Address: 1313 North Market Street, Suite 700, Wilmington, DE 19801
Contact: Elizabeth Parrish, Partner
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed per final invoice
Purpose: Payment of legal fees and disbursements incurred by Marsden & Holt LLP in connection with its engagement as Delaware local counsel to the Buyer, including preparation and filing of the Certificate of Merger and related Delaware corporate law matters.
5.7 Winslow & Crane LLP — Legal Fees (R&W Underwriting Counsel)
Entity: Winslow & Crane LLP
Address: 101 Federal Street, Suite 2600, Boston, MA 02110
Contact: Andrea Shelby, Partner
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed per final invoice
Purpose: Payment of legal fees and disbursements incurred by Winslow & Crane LLP in connection with its engagement as underwriting counsel for the representations and warranties insurance policy, including review of the Merger Agreement, due diligence materials, and negotiation of the R&W Policy with Meridian Specialty Insurance Company.
5.8 Ridgepoint Partners LLC — Financial Advisory Fee (Buyer's Advisor)
Entity: Ridgepoint Partners LLC
Address: 200 Greenwich Street, 38th Floor, New York, NY 10007
Contact: Marcus Hale, Senior Managing Director
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed per engagement letter
Purpose: Payment of the financial advisory fee payable to Ridgepoint Partners LLC in connection with its engagement as financial advisor to HPE Fund IV in connection with the Merger, including any success fee, transaction fee, or other fees payable upon consummation of the Merger, as set forth in the engagement letter between HPE Fund IV and Ridgepoint Partners LLC.
5.9 Dunmore Capital Markets LLC — Co-Arranger Fees
Entity: Dunmore Capital Markets LLC
Address: 500 West Monroe Street, 35th Floor, Chicago, IL 60661
Contact: Samantha Reeves, Managing Director, Debt Capital Markets
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed per Fee Letter
Purpose: Payment of co-arranger fees and any other fees payable to Dunmore Capital Markets LLC in connection with its role as Co-Arranger and Joint Bookrunner of the Term Loan B and the revolving credit facility, to the extent such fees are not netted from the Term Loan B draw.
5.10 Meridian Specialty Insurance Company — R&W Insurance Premium (via Lockwood Risk Advisors LLC)
Entity: Meridian Specialty Insurance Company (premium payment via Lockwood Risk Advisors LLC, as insurance broker)
Broker Address: Lockwood Risk Advisors LLC, 125 High Street, Suite 900, Boston, MA 02110
Contact: James Fielding, Senior Vice President, Lockwood Risk Advisors LLC
Account Name: To be confirmed (Lockwood Risk Advisors LLC trust/premium account)
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed (R&W Policy Limit: $100,000,000; Retention: $9,800,000)
Purpose: Payment of the premium, applicable broker fees, and taxes for the representations and warranties insurance policy issued by Meridian Specialty Insurance Company in connection with the Merger.
5.11 Oakhurst Proxy Advisors LLC — Proxy Solicitation Fees
Entity: Oakhurst Proxy Advisors LLC
Address: 1185 Avenue of the Americas, 24th Floor, New York, NY 10036
Contact: Margaret Quinlan, Managing Director
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: To be confirmed
Purpose: Payment of fees and expenses incurred by Oakhurst Proxy Advisors LLC in connection with its engagement as proxy solicitation agent for the special meeting of Pennfield stockholders held on or about June 19, 2025.
5.12 Federal Trade Commission — HSR Filing Fee
Entity: Federal Trade Commission
Amount: $280,000
Note: The HSR Act filing fee of $280,000 was remitted to the Federal Trade Commission at the time of filing the premerger notification and report form (estimated filing date: April 8, 2025). If payment has already been made, this amount should be excluded from the Closing wires. If HPE Fund IV or Merger Sub pre-funded the HSR filing fee on behalf of the parties, confirm whether reimbursement to HPE Fund IV is required and, if so, include in the Closing funds flow. The status of prior payment should be confirmed with Megan Chu at Calderwood & Harkness LLP.
5.13 Harrowgate Private Equity Fund IV LP — Equity Contribution Wire
Entity: Harrowgate Private Equity Fund IV LP
Address: 1200 Market Street, Suite 3100, Wilmington, DE 19801
Contact: Jonah Whitfield, Principal, Harrowgate Capital Partners LLC
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: $258,500,000
Purpose: Wire of HPE Fund IV's equity contribution from HPE Fund IV's bank account to the Merger Sub closing account, in satisfaction of HPE Fund IV's obligations under the Equity Commitment Letter.
5.14 Ashford Growth Partners LP — Co-Invest Equity Contribution Wire
Entity: Ashford Growth Partners LP
Address: 150 North Riverside Plaza, Suite 2200, Chicago, IL 60606
Contact: David Nakamura, Partner
Account Name: To be confirmed
Account Number: To be confirmed
ABA/Routing Number: To be confirmed
Amount: $60,000,000
Purpose: Wire of Ashford Growth Partners LP's co-investment equity contribution from Ashford Growth Partners LP's bank account to the Merger Sub closing account, in satisfaction of Ashford Growth Partners LP's obligations under the Co-Investment Agreement.
5.15 Additional Payees
Wire instructions for any additional payees not listed above (including, without limitation, the D&O tail insurance carrier, the SEC (for filing fees), Marlowe Asset Management Stock Transfer, Inc. (for transfer agent fees, if separate from the merger consideration wire), and any other miscellaneous payees) will be added to this Memorandum upon receipt of final invoices and confirmed banking details. All such additional wire instructions will be confirmed no later than two (2) business days prior to the anticipated Closing Date and included in the Closing Confirmation.
Any party expecting to receive a payment at or in connection with the Closing that has not been contacted by Calderwood & Harkness LLP regarding wire instructions should promptly notify Megan Chu or Ryan Kowalski at Calderwood & Harkness LLP to ensure inclusion in the final funds flow.
Section 6: Reconciliation of Sources and Uses
6.1 Sources Reconciliation Table
The following table reconciles the sources of funds available for the Closing:
Note on Transaction Cost Funding: Approximately $60,000,000 of estimated transaction costs are funded from the Term Loan B proceeds and the equity contributions described above. The Term Loan B draw amount of $490,000,000 and the equity contributions of $318,500,000 ($258,500,000 HPE Fund IV + $60,000,000 Ashford) are sized to cover both (a) the cash merger consideration of $958,500,000 and (b) the estimated transaction costs of approximately $60,000,000, together with the $90,000,000 of Pennfield cash on the balance sheet. The total cash available ($920,000,000) exceeds the sum of cash merger consideration ($958,500,000) by virtue of the fact that the $90,000,000 of Pennfield balance sheet cash effectively reduces the cash required from external sources. The approximately $60,000,000 of transaction costs brings total effective cash uses to approximately $1,018,500,000, which is funded from the aggregate $920,000,000 of external cash sources (debt and equity) plus the $90,000,000 of Pennfield cash, with any remaining balance available for post-Closing working capital.
6.2 Uses Reconciliation Table
The following table reconciles the uses of funds at Closing:
Reconciliation: Total uses of approximately $1,040,000,000 (consisting of $980,000,000 of Aggregate Merger Consideration, including $21,500,000 of non-cash management rollover, plus approximately $60,000,000 of estimated transaction costs) equal total sources of approximately $1,040,000,000 (consisting of $490,000,000 of Term Loan B debt, $318,500,000 of cash equity contributions, $21,500,000 of non-cash management rollover equity, and $90,000,000 of Pennfield balance sheet cash, plus approximately $60,000,000 of transaction costs funded from debt and equity proceeds). Any residual cash balance following payment of all merger consideration and transaction costs will remain in the Surviving Corporation's accounts for post-Closing working capital purposes.
6.3 Pro Forma Post-Closing Capitalization Summary
The following table sets forth the estimated pro forma capitalization of the Surviving Corporation immediately following the Closing:
Key Credit Metrics:
Note: The net debt figure of approximately $460,000,000 reflects the $490,000,000 of funded Term Loan B debt, less estimated remaining cash of approximately $30,000,000 (representing the $90,000,000 of Pennfield balance sheet cash, less the approximately $60,000,000 of transaction costs funded from sources at Closing). Actual post-Closing cash balances will depend on final transaction cost amounts and any other adjustments at Closing.
Section 7: Key Assumptions and Qualifications
This Memorandum has been prepared based on the following key assumptions and qualifications, each of which should be carefully reviewed by all recipients:
1.  Estimated Amounts. All amounts set forth in this Memorandum are estimates as of the date hereof and are subject to final closing adjustments. Final confirmed amounts will be set forth in the Closing Confirmation to be circulated no later than one (1) business day prior to the Closing Date. In the event of any discrepancy between this Memorandum and the Closing Confirmation, the Closing Confirmation shall control.
2.  Management Rollover. The management rollover of $21,500,000 is a non-cash transaction. The rollover participants (Catherine Langford, Derek Simmons, and Maxwell Dunn) will contribute equity (in the form of Rollover Shares) to the Surviving Corporation (or a designated holding vehicle) in lieu of receiving cash merger consideration, pursuant to the Rollover Agreement dated April 7, 2025. No cash wire is required for the rollover amounts. The rollover participants will receive equity interests in the Surviving Corporation (or such holding vehicle) having a value equal to their respective rollover contribution amounts.
3.  Pennfield Cash on Balance Sheet. The estimated cash on the Pennfield balance sheet of $90,000,000 is based on management's current estimate and is subject to final confirmation by Derek Simmons, Chief Financial Officer of Pennfield, and Pemberton & Associates LLP, Pennfield's independent auditor (lead audit partner: Kevin Tarrant Corporation), no later than two (2) business days prior to the Closing Date. Any material variance from this estimate may require adjustments to the equity contribution amounts, the Term Loan B draw amount, or both, and will be reflected in the Closing Confirmation.
4.  Transaction Costs. The estimated transaction costs of approximately $60,000,000 are based on preliminary estimates from the various service providers engaged in connection with the Merger. Final transaction cost amounts depend on actual invoices received from legal counsel, financial advisors, financing sources, insurance carriers, regulatory agencies, and other service providers. All service providers are requested to submit final invoices no later than three (3) business days prior to the anticipated Closing Date. Any material increase in transaction costs above the estimated amount may require adjustments to the funding sources.
5.  Revolving Credit Facility. The Senior Secured Revolving Credit Facility of $150,000,000 is expected to remain undrawn at Closing. The revolving credit facility will be available for post-Closing working capital needs and general corporate purposes of the Surviving Corporation, subject to the conditions precedent and covenants set forth in the definitive credit agreement. If any portion of the revolving credit facility is drawn at Closing, this Memorandum will be updated accordingly.
6.  Wire Instructions. Wire instructions marked "To be confirmed" in Section 5 of this Memorandum will be populated upon receipt of confirmed banking details from each applicable payee. Each party providing wire instructions is requested to submit such instructions, on the party's letterhead and signed by an authorized representative, to Megan Chu at Calderwood & Harkness LLP no later than five (5) business days prior to the anticipated Closing Date. Calderwood & Harkness LLP will verify all wire instructions by telephone callback prior to the Closing Date.
7.  Immediately Available Funds. All wires are to be sent in immediately available U.S. dollar funds. Parties initiating wires should ensure that their banking institutions process wires via the Fedwire system to ensure same-day settlement. Any wires sent via other means (e.g., ACH) may not be received in time for the Closing and are not acceptable.
8.  Governing Documents. This Memorandum should be read in conjunction with the following governing documents, copies of which have been made available to the parties:
(a) Agreement and Plan of Merger, dated as of April 7, 2025, among Harrowgate Private Equity Fund IV LP, Pinnacle Merger Sub, Inc., and Pennfield Holdings, Inc.;
(b) Equity Commitment Letter, dated March 27, 2025, from Harrowgate Private Equity Fund IV LP to Pinnacle Merger Sub, Inc.;
(c) Co-Investment Agreement, dated March 27, 2025, between Harrowgate Private Equity Fund IV LP and Ashford Growth Partners LP;
(d) Rollover Agreement, dated April 7, 2025, among Harrowgate Private Equity Fund IV LP, Pinnacle Merger Sub, Inc., Catherine Langford, Derek Simmons, and Maxwell Dunn;
(e) Debt Commitment Letter, dated March 24, 2025, from Falconer National Bank, N.A. and Dunmore Capital Markets LLC in favor of Harrowgate Private Equity Fund IV LP and Pinnacle Merger Sub, Inc.;
(f) Fee Letter, dated March 24, 2025, among Harrowgate Private Equity Fund IV LP, Pinnacle Merger Sub, Inc., Falconer National Bank, N.A., and Dunmore Capital Markets LLC; and
(g) Escrow Agreement, dated April 7, 2025, among Harrowgate Private Equity Fund IV LP, Pennfield Holdings, Inc., and Grandview Trust Company, N.A., as Escrow Agent.
9.  No Legal Advice. This Memorandum is prepared solely for the purpose of coordinating the funds flow at Closing and does not constitute legal advice to any party other than Calderwood & Harkness LLP's clients. Each party should consult its own legal, tax, and financial advisors with respect to its obligations and the transactions contemplated hereby.
Section 8: Contact Information for Funds Flow Coordination
The following contact information is provided for all key parties involved in the coordination of the Closing funds flow. All parties should direct any questions or issues regarding wire instructions, funding timing, or closing logistics to the Calderwood & Harkness LLP contacts listed below.
Note: Contact information marked "To be confirmed" will be populated in the final version of this Memorandum. In the interim, all communications regarding the funds flow should be directed to Megan Chu and Ryan Kowalski at Calderwood & Harkness LLP.
Section 9: Exhibits and Appendices
The following exhibits and appendices are incorporated by reference into this Memorandum and will be circulated to all parties on the Distribution List:
Exhibit A — Detailed Sources and Uses Table
Cross-reference to the companion Closing Funds Flow — Sources & Uses Spreadsheet (filename: funds-flow-spreadsheet.xlsx), Tab 1: Sources and Tab 2: Uses. The spreadsheet contains a detailed line-by-line breakdown of all sources of funds and all uses of funds, including payee-by-payee transaction cost detail, with formulas for automatic reconciliation. The spreadsheet will be updated as final amounts are confirmed and circulated in its final form with the Closing Confirmation.
Exhibit B — Wire Transfer Instruction Forms
A blank wire transfer instruction form will be provided to each payee for completion, signature, and return to Calderwood & Harkness LLP. Each completed form must be submitted on the payee's letterhead and signed by an authorized representative. Completed forms will be compiled as Exhibit B to the final version of this Memorandum and will be used to populate the wire instruction fields in Section 5 above and in Tab 3 of the companion spreadsheet.
Exhibit C — Pro Forma Capitalization Table
Cross-reference to the companion Closing Funds Flow — Sources & Uses Spreadsheet (filename: funds-flow-spreadsheet.xlsx), Tab 4: Pro Forma Capitalization. The pro forma capitalization table sets forth the estimated capitalization of the Surviving Corporation immediately following the Closing, including funded debt, equity, and key credit metrics. The table will be updated as final amounts are confirmed.
Exhibit D — Closing Day Timeline and Checklist
A detailed step-by-step timeline for the Closing Date, identifying each action to be taken, the responsible party for each action, the deadline for completion of each action, and the confirmation procedure for each action. The timeline will cover all pre-Closing, Closing, and post-Closing actions, including wire initiations, receipt confirmations, Certificate of Merger filing, SEC filings, and Nasdaq notifications. The timeline will be circulated in advance of the Closing Date and updated as necessary to reflect the final confirmed schedule.
This Memorandum is a draft document subject to update and revision prior to the Closing Date. The final version of this Memorandum will be circulated concurrently with the Closing Confirmation no later than one (1) business day prior to the anticipated Closing Date. All parties are requested to review this draft carefully and promptly communicate any questions, comments, or corrections to the Calderwood & Harkness LLP contacts identified herein.
Prepared by: Calderwood & Harkness LLP One Liberty Plaza, 55th Floor New Y