1003-00004 · Harrowgate Private Equity Fund IV LP · Transaction Documents

equity-commitment-letter.docx DOCUMENT M&A / Corporate

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP One Liberty Plaza, 55th Floor New York, New York 10006 Telephone: (212) 558-4000 Facsimile: (212) 558-3588

March 27, 2025

Pinnacle Merger Sub, Inc. 1200 Market Street, Suite 3100 Wilmington, Delaware 19801

Attention: Jonah Whitfield, Sole Director

Re: Equity Commitment Letter — Acquisition of Pennfield Holdings, Inc.

Dear Mr. Whitfield:

This equity commitment letter (this "Letter") sets forth the commitment of Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Parent"), to fund the Equity Contribution (as defined below) to Pinnacle Merger Sub, Inc., a Delaware corporation ("Merger Sub"), in connection with the transactions contemplated by the Agreement and Plan of Merger (as it may be amended, supplemented, or otherwise modified from time to time, the "Merger Agreement") to be entered into among Parent, Merger Sub, and Pennfield Holdings, Inc., a Delaware corporation (the "Company"), pursuant to which Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving as a wholly owned subsidiary of Parent.

SECTION 1: RECITALS AND BACKGROUND

WHEREAS, Parent is a Delaware limited partnership whose general partner is Harrowgate Capital Partners IV GP LLC, a Delaware limited liability company ("HPE IV GP"), and whose investment manager is Harrowgate Capital Partners LLC, a Delaware limited liability company ("HCP");

WHEREAS, Merger Sub is a Delaware corporation and a newly formed, wholly owned direct subsidiary of Parent, formed solely for the purpose of effecting the Merger, and has not engaged in any business or activities other than those incidental to its formation and the transactions contemplated by this Letter, the Merger Agreement, and the other transaction documents;

WHEREAS, the Merger Agreement contemplates a reverse triangular merger under Section 251 of the Delaware General Corporation Law (the "DGCL"), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent, on the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, the aggregate merger consideration payable to the holders of Company common stock in connection with the Merger is $980,000,000 (the "Aggregate Merger Consideration"), equal to $15.95 per share of Company common stock on a fully diluted basis (based on 61,450,000 fully diluted shares, comprising 58,200,000 outstanding shares of common stock and 3,250,000 shares underlying outstanding options and restricted stock units);

WHEREAS, the transactions contemplated by the Merger Agreement will be financed through a combination of committed debt financing and equity contributions, as more fully described herein;

WHEREAS, this Letter sets forth the commitment of Parent to fund the Equity Contribution (as defined below) to Merger Sub on the terms and subject to the conditions set forth herein;

WHEREAS, reference is made to that certain Debt Commitment Letter dated March 24, 2025 (the "Debt Commitment Letter"), from Falconer National Bank, N.A. ("Falconer"), as Lead Arranger and Administrative Agent, and Dunmore Capital Markets LLC ("Dunmore"), as Co-Arranger and Joint Bookrunner, providing for (i) a $490,000,000 Senior Secured Term Loan B facility and (ii) a $150,000,000 Senior Secured Revolving Credit Facility (collectively, the "Debt Financing"), on the terms and subject to the conditions set forth in the Debt Commitment Letter;

WHEREAS, reference is further made to that certain Co-Investment Agreement dated March 27, 2025 (the "Co-Investment Agreement"), between Parent and Ashford Growth Partners LP ("Ashford"), a Delaware limited partnership, pursuant to which Ashford has committed $60,000,000 toward the Equity Contribution on the terms and subject to the conditions set forth therein; and

WHEREAS, certain members of the Company's management team — specifically, Catherine Langford, Chief Executive Officer, Derek Simmons, Chief Financial Officer, and Maxwell Dunn, Chief Operating Officer (collectively, the "Management Rollover Participants") — will contribute $21,500,000 in aggregate rollover equity to Merger Sub (or a parent entity thereof) pursuant to a Rollover Agreement to be executed on or about the date of the Merger Agreement (the "Rollover Agreement"), the terms of which will provide for the cancellation and exchange of a portion of such individuals' shares of Company common stock for equity interests in Parent (or an entity designated by Parent) in lieu of receiving the per share merger consideration with respect to such shares.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements, covenants, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 2: COMMITMENT

2.1 Equity Commitment Amount

Parent hereby irrevocably commits, subject to the terms and conditions of this Letter and the Merger Agreement, to contribute or cause to be contributed to Merger Sub, at or immediately prior to the Closing (as defined in the Merger Agreement), cash in an aggregate amount of up to Three Hundred Forty Million Dollars ($340,000,000) (the "Commitment Amount" or "Equity Contribution").

The Commitment Amount is composed of the following components:

(a) Two Hundred Fifty-Eight Million Five Hundred Thousand Dollars ($258,500,000) from Parent's own capital, funded from the capital commitments available to Harrowgate Private Equity Fund IV LP, a $4,800,000,000 vintage 2023 private equity fund managed by HCP (the "Parent Direct Contribution");

(b) Sixty Million Dollars ($60,000,000) from Ashford Growth Partners LP, acting as a co-investor pursuant to the Co-Investment Agreement (the "Ashford Co-Investment"); and

(c) Twenty-One Million Five Hundred Thousand Dollars ($21,500,000) of management rollover equity, to be contributed by the Management Rollover Participants pursuant to the Rollover Agreement (the "Rollover Contribution"), allocated as follows:

(i) Catherine Langford (Chief Executive Officer): $12,500,000;

(ii) Derek Simmons (Chief Financial Officer): $5,000,000; and

(iii) Maxwell Dunn (Chief Operating Officer): $4,000,000.

For the avoidance of doubt, the management rollover equity constitutes approximately 2.2% of the total equity value of the surviving corporation immediately following the consummation of the Merger. The Rollover Contribution shall be effected through the cancellation of shares of Company common stock held by the Management Rollover Participants and the issuance to such persons of equity interests in Parent (or an entity designated by Parent) in exchange therefor, and accordingly shall not require the actual funding of cash by the Management Rollover Participants; provided, however, that the aggregate Commitment Amount of $340,000,000 reflects the total equity capitalization required in connection with the Closing, inclusive of the economic value of the Rollover Contribution.

2.2 Purpose of Equity Contribution

The Equity Contribution, together with the proceeds of the Debt Financing and approximately Ninety Million Dollars ($90,000,000) of cash on the Company's balance sheet that is expected to be available at the time of the Closing (the "Company Cash"), shall be applied to the following purposes:

(a) fund the Aggregate Merger Consideration of $980,000,000 payable to the holders of Company common stock, Company stock options, and Company restricted stock units (other than shares subject to the Rollover Agreement) in accordance with the Merger Agreement;

(b) pay all fees, costs, and expenses incurred by Parent, Merger Sub, the Company, or the surviving corporation in connection with the Merger and the transactions contemplated by the Merger Agreement, the Debt Commitment Letter, this Letter, and the other transaction documents, which fees, costs, and expenses are estimated to aggregate approximately Sixty Million Dollars ($60,000,000), including but not limited to (i) debt financing fees and expenses, (ii) legal, accounting, and advisory fees, (iii) filing fees and regulatory expenses, (iv) the premium for the R&W Insurance Policy (as defined in Section 9), and (v) other customary transaction costs; and

(c) fund any other amounts required to be paid by Merger Sub or the surviving corporation at or in connection with the Closing pursuant to the terms of the Merger Agreement or any ancillary agreement.

The following table sets forth the anticipated sources and uses of funds in connection with the Closing (a detailed version of which is set forth on Schedule A attached hereto):

For the avoidance of doubt, the Revolving Credit Facility of $150,000,000 is expected to be undrawn at the Closing and is not reflected in the sources above. The Senior Secured Term Loan B of $490,000,000, together with the Equity Contribution of $340,000,000 and the Company Cash of approximately $90,000,000, provides total sources of approximately $920,000,000 in cash (plus $21,500,000 of non-cash rollover equity), against total cash uses of approximately $1,040,000,000 (comprising the Aggregate Merger Consideration of $980,000,000 and estimated transaction costs of approximately $60,000,000). Any shortfall or excess will be reconciled at the Closing in accordance with the provisions of the Merger Agreement.

2.3 Funding Mechanics

Parent shall fund, or cause to be funded, the Equity Contribution (excluding the Rollover Contribution, which shall be effected pursuant to the Rollover Agreement) to an account designated by Merger Sub (the "Funding Account") no later than two (2) business days prior to the anticipated Closing Date (which is currently estimated to be June 30, 2025) or, if the Closing is to occur on shorter notice, simultaneously with the Closing. Merger Sub shall provide wire instructions for the Funding Account to Parent in writing at least three (3) business days prior to the required funding date. All amounts constituting the Equity Contribution (other than the Rollover Contribution) shall be funded in immediately available funds in United States dollars by wire transfer to the Funding Account. Detailed wire transfer instructions, including the applicable bank, account number, routing information, and reference data, are set forth on Schedule B attached hereto (or shall be completed and delivered prior to the Closing in accordance with this Section 2.3).

Parent shall coordinate the timing and logistics of the funding of the Equity Contribution with the funding of the Debt Financing under the Debt Commitment Letter, such that the aggregate cash amounts are available in the Funding Account (or such other accounts as may be designated by the paying agent or the escrow agent, as applicable) on or prior to the Closing in amounts sufficient to consummate the transactions contemplated by the Merger Agreement.

2.4 No Obligation to Exceed Commitment Amount

In no event shall Parent be obligated to contribute, or cause to be contributed, aggregate amounts in excess of the Commitment Amount of Three Hundred Forty Million Dollars ($340,000,000). The obligation of Parent hereunder is limited to the Commitment Amount, and nothing in this Letter shall be construed to require Parent to contribute, guarantee, or otherwise provide funds in excess of such amount.

SECTION 3: CONDITIONS TO FUNDING

3.1 Conditions Precedent

The obligation of Parent to fund the Equity Contribution in accordance with Section 2 hereof is subject to the satisfaction (or, to the extent permitted by the Merger Agreement, the waiver by the applicable party) of each of the following conditions:

(a) Merger Agreement Conditions. All conditions to the obligations of Parent and Merger Sub to consummate the Merger as set forth in the Merger Agreement (including, without limitation, the conditions set forth in Article VII thereof) shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but which conditions shall be capable of being satisfied at the Closing);

(b) Debt Financing. The substantially simultaneous funding of the Debt Financing (or, to the extent applicable, alternative financing on terms no less favorable to Parent in the aggregate) pursuant to the Debt Commitment Letter, such that the aggregate proceeds of the Debt Financing, together with the Equity Contribution and the Company Cash, are sufficient to consummate the transactions contemplated by the Merger Agreement and pay all related fees, costs, and expenses; and

(c) Closing. The substantially simultaneous consummation of the Closing under the Merger Agreement, including the filing of the certificate of merger with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL and the terms of the Merger Agreement.

3.2 No Independent Conditions

Except as expressly set forth in Section 3.1 above, there shall be no conditions (whether express or implied) to the obligation of Parent to fund the Equity Contribution. Without limiting the generality of the foregoing, the obligation of Parent to fund the Equity Contribution shall not be subject to any condition relating to the availability of financing other than the Debt Financing as set forth in the Debt Commitment Letter, and Parent acknowledges and agrees that it shall not have the right to refuse to fund the Equity Contribution on the basis of any financing condition, market condition, or other contingency not expressly set forth in Section 3.1. Parent further acknowledges that it has no right to refuse to fund the Equity Contribution on the basis of the failure of Ashford to fund its co-investment commitment or the failure of any Management Rollover Participant to consummate the Rollover Contribution, and in any such event, Parent shall remain obligated to fund the full Commitment Amount.

SECTION 4: TERMINATION

4.1 Automatic Termination Events

This Letter and the obligations of Parent hereunder shall automatically terminate, without any further action by any party, upon the earliest to occur of the following:

(a) the Closing, upon the funding of the Equity Contribution in full in accordance with the terms hereof (at which point all obligations of Parent under this Letter shall be deemed satisfied and discharged);

(b) the valid termination of the Merger Agreement in accordance with its terms, including, without limitation, termination pursuant to Section 8.1 thereof (whether by mutual consent, by either party upon the occurrence of certain specified events, or by operation of law); and

(c) September 30, 2025 (the "Outside Date"), or such later date as may be agreed in writing by the parties to the Merger Agreement as an extension of the Outside Date in accordance with the terms of the Merger Agreement; provided, that if the Outside Date is extended pursuant to the terms of the Merger Agreement, the termination date under this clause (c) shall be automatically extended to correspond to such extended Outside Date without any further action by the parties hereto.

4.2 Effect of Termination

Upon the termination of this Letter in accordance with Section 4.1, Parent shall have no further obligations hereunder, and all rights and obligations of the parties hereunder shall terminate and be of no further force or effect; provided, however, that (i) nothing herein shall relieve Parent from liability for any willful or intentional breach of this Letter occurring prior to such termination, and (ii) the provisions of Section 7 (Covenants of Parent, solely to the extent of obligations that by their terms survive termination), Section 8 (Miscellaneous Provisions), Section 9 (Relationship to Other Transaction Documents), and Section 10 (Defined Terms), together with this Section 4.2, shall survive the termination of this Letter.

SECTION 5: ENFORCEMENT

5.1 Third-Party Beneficiary Rights

The Company is an express intended third-party beneficiary of this Letter. The Company shall be entitled to enforce the terms and provisions of this Letter directly against Parent, subject to and in accordance with the terms and conditions of the Merger Agreement (including any limitations on the rights, remedies, or recourse of the Company set forth therein) and the Limited Guarantee (as defined below). For the avoidance of doubt, the rights of the Company as a third-party beneficiary hereunder shall be subject to, and limited by, the provisions of Section 5.3 below.

Reference is hereby made to the Limited Guarantee to be dated as of the date of the Merger Agreement (anticipated to be April 7, 2025) (the "Limited Guarantee"), delivered by Parent in favor of the Company, guaranteeing certain of Merger Sub's payment obligations under the Merger Agreement, including, without limitation, the Reverse Termination Fee (as defined below) in the amount of Fifty-Eight Million Eight Hundred Thousand Dollars ($58,800,000), representing 6.0% of the Aggregate Merger Consideration, payable in the circumstances specified in the Merger Agreement.

Other than Merger Sub and the Company, no person shall have any rights, benefits, or remedies under this Letter, and no person (including, without limitation, any creditor of Parent, Merger Sub, or the Company) shall be entitled to rely on or enforce any provision of this Letter as a third-party beneficiary or otherwise.

5.2 Specific Performance

Parent acknowledges and agrees that irreparable damage would occur to Merger Sub and the Company if the obligations of Parent hereunder were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy for any such failure to perform or breach. Accordingly, each of the Company and Merger Sub shall be entitled to seek an injunction, specific performance, or other equitable relief to enforce specifically the obligations of Parent to fund the Equity Contribution in accordance with the terms hereof, subject to and in accordance with the terms and conditions of the Merger Agreement (including, without limitation, any limitations on the right to seek or obtain specific performance set forth in Section 9.10 of the Merger Agreement), without the necessity of proving actual damages or posting any bond or other security.

The rights and remedies of the Company and Merger Sub under this Section 5.2 shall be in addition to, and not in limitation of, any other rights or remedies available to the Company or Merger Sub under the Merger Agreement, the Limited Guarantee, or applicable law, subject in all cases to the limitations set forth in Section 5.3 below.

5.3 Limitation on Liability

Notwithstanding anything contained in this Letter or the Merger Agreement to the contrary, in no event shall the aggregate liability of Parent under or in connection with this Letter (whether based on contract, tort, strict liability, or otherwise) exceed the Commitment Amount of Three Hundred Forty Million Dollars ($340,000,000).

The Company's sole and exclusive remedy against Parent for any failure by Parent to fund, or cause to be funded, the Equity Contribution in accordance with the terms hereof (other than the right to seek specific performance in accordance with, and subject to, Section 5.2 and the applicable provisions of the Merger Agreement) shall be as set forth in the Merger Agreement, including, without limitation, the Reverse Termination Fee provisions set forth in Section 8.3 of the Merger Agreement (the "Reverse Termination Fee" of Fifty-Eight Million Eight Hundred Thousand Dollars ($58,800,000)) and the Limited Guarantee. In no event shall Parent or any of its affiliates be required to pay the Reverse Termination Fee more than once, and the payment of the Reverse Termination Fee and any other amounts payable pursuant to the Limited Guarantee shall, to the fullest extent permitted by law, constitute liquidated damages and be the sole and exclusive monetary remedy of the Company and its affiliates against Parent and Merger Sub for any failure to consummate the Merger.

SECTION 6: REPRESENTATIONS AND WARRANTIES OF PARENT

Parent hereby represents and warrants to Merger Sub and the Company (as a third-party beneficiary) as follows, as of the date hereof and as of the Closing Date:

6.1 Organization and Good Standing

Parent is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. Parent has all requisite limited partnership power and authority to execute and deliver this Letter, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. HPE IV GP is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware and is the sole general partner of Parent.

6.2 Authorization

The execution, delivery, and performance of this Letter by Parent, and the consummation by Parent of the transactions contemplated hereby, have been duly authorized by all necessary limited partnership action on the part of Parent and by all necessary limited liability company action on the part of HPE IV GP (in its capacity as the general partner of Parent). No other action, approval, consent, or authorization on the part of Parent, HPE IV GP, or any of their respective partners, members, managers, or other equity holders is necessary to authorize the execution and delivery of this Letter or the performance of Parent's obligations hereunder.

This Letter has been duly executed and delivered by Parent (acting through HPE IV GP) and constitutes the legal, valid, and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights, and (b) general equitable principles (whether considered in a proceeding in equity or at law).

6.3 No Conflicts

The execution, delivery, and performance of this Letter by Parent, and the consummation of the transactions contemplated hereby, do not and will not (with or without the giving of notice or the lapse of time, or both):

(a) conflict with, violate, or result in a breach of any provision of the limited partnership agreement of Parent, the limited liability company agreement of HPE IV GP, or any other organizational or governing document of Parent or HPE IV GP;

(b) conflict with, violate, or result in a breach of any law, statute, ordinance, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to Parent, HPE IV GP, or any of their respective properties or assets; or

(c) conflict with, violate, result in a breach of, constitute a default under, or give rise to any right of termination, cancellation, acceleration, or loss of any material benefit under, any material contract, agreement, instrument, permit, license, or obligation to which Parent or HPE IV GP is a party or by which any of their respective properties or assets are bound.

No consent, approval, authorization, order, filing, registration, or qualification of or with any governmental authority or any other person is required to be obtained by Parent or HPE IV GP in connection with the execution, delivery, and performance of this Letter, except as may be required in connection with the Merger and the transactions contemplated by the Merger Agreement (including applicable antitrust and regulatory filings).

6.4 Sufficiency of Funds

Parent has, as of the date hereof, and at the Closing will have, sufficient capital commitments from its limited partners and available funds (including, without limitation, the right to call capital from its limited partners in accordance with the terms of its limited partnership agreement) to fund the Equity Contribution in full in accordance with the terms of this Letter. Parent represents that as of the date hereof:

(a) Harrowgate Private Equity Fund IV LP has total capital commitments of Four Billion Eight Hundred Million Dollars ($4,800,000,000) and is a vintage 2023 fund with substantial uncalled capital;

(b) the Commitment Amount of $340,000,000 (including the Ashford Co-Investment and the Rollover Contribution) represents approximately 7.1% of Parent's total fund commitments, and the Parent Direct Contribution of $258,500,000 represents approximately 5.4% of Parent's total fund commitments;

(c) HCP, the investment manager of Parent, manages total firm-wide assets under management of approximately Fourteen Billion Two Hundred Million Dollars ($14,200,000,000) across multiple funds and investment vehicles; and

(d) Parent has received no notice from any limited partner of Parent indicating an inability or unwillingness to fund capital calls in respect of such limited partner's capital commitment to Parent, and Parent is not aware of any fact or circumstance that would reasonably be expected to result in the inability of any limited partner to fund its capital commitment when called.

6.5 No Proceedings

No action, suit, proceeding, claim, arbitration, or investigation before or by any governmental authority, court, or arbitral tribunal is pending or, to the knowledge of Parent (after due inquiry), threatened against or relating to Parent, HPE IV GP, or HCP that (a) challenges, seeks to restrain, or seeks to enjoin the execution, delivery, or performance of this Letter or the consummation of any of the transactions contemplated hereby, or (b) would otherwise reasonably be expected to impair or materially delay the ability of Parent to fund the Equity Contribution in accordance with the terms hereof.

6.6 Solvency

After giving effect to the funding of the Equity Contribution and the consummation of the transactions contemplated by the Merger Agreement (including the incurrence of the Debt Financing), Parent will not be insolvent. For purposes of this Section 6.6, "insolvent" means that (a) the present fair saleable value of Parent's assets is less than the amount required to pay Parent's total liabilities as they become due, (b) Parent is unable to pay its debts and liabilities, subordinated, contingent, or otherwise, as they become due, or (c) Parent has unreasonably small capital with which to conduct its business as currently conducted and as proposed to be conducted.

SECTION 7: COVENANTS OF PARENT

7.1 Maintenance of Existence

Parent shall maintain its legal existence as a Delaware limited partnership, in good standing, until the earlier of (a) the Closing and (b) the termination of this Letter in accordance with Section 4. Parent shall not dissolve, liquidate, wind up, or otherwise cease to exist prior to such date, except with the prior written consent of Merger Sub and the Company.

7.2 No Transfer of Obligations

Parent shall not transfer, assign, or delegate, in whole or in part, its obligations under this Letter to any person without the prior written consent of Merger Sub and the Company; provided, however, that Parent may, without such consent, assign its obligation to fund all or a portion of the Equity Contribution to one or more affiliated funds, parallel funds, co-investment vehicles, or alternative investment vehicles managed, controlled, or advised by HCP or any affiliate of HCP (each, a "Permitted Assignee"); provided, further, that no such assignment to a Permitted Assignee shall relieve Parent of its obligations hereunder, and Parent shall remain primarily liable for the full Commitment Amount notwithstanding any such assignment. Any purported transfer, assignment, or delegation in violation of this Section 7.2 shall be null and void and of no force or effect.

7.3 Co-Investor and Rollover Coordination

Parent shall use commercially reasonable efforts to cause Ashford Growth Partners LP to fund its $60,000,000 co-investment commitment in accordance with the terms and conditions of the Co-Investment Agreement and to cause each of the Management Rollover Participants — Catherine Langford ($12,500,000), Derek Simmons ($5,000,000), and Maxwell Dunn ($4,000,000) — to contribute their respective rollover equity in accordance with the terms and conditions of the Rollover Agreement.

Parent shall keep Merger Sub and the Company reasonably informed of the status of the co-investment and rollover processes and shall promptly notify Merger Sub and the Company of any material developments with respect thereto, including, without limitation, any indication by Ashford or any Management Rollover Participant that it may not fulfill its respective funding obligations.

Notwithstanding the foregoing, in the event that any co-investor (including Ashford) or any Management Rollover Participant fails to fund its respective commitment or consummate its respective contribution for any reason, Parent shall remain obligated to fund the full Commitment Amount of $340,000,000 (or cause the same to be funded), and no such failure shall excuse, reduce, or otherwise affect Parent's obligations under this Letter. Parent acknowledges and agrees that its obligation to fund the full Commitment Amount is unconditional, and that it bears the risk of any co-investor or rollover participant default.

7.4 Notification

Parent shall promptly (and in any event within two (2) business days) notify Merger Sub and the Company in writing if Parent becomes aware of any fact, event, circumstance, or development that would reasonably be expected to (a) prevent, materially impair, or materially delay the funding of the Equity Contribution in accordance with the terms hereof, (b) result in any of the representations and warranties set forth in Section 6 becoming untrue or incorrect in any material respect, or (c) result in a breach by Parent of any covenant or agreement set forth in this Section 7. Any such notification shall describe in reasonable detail the nature of the relevant fact, event, circumstance, or development and the anticipated impact on Parent's ability to perform its obligations hereunder.

7.5 Cooperation with Financing

Parent shall, and shall cause its affiliates and representatives (including, without limitation, Ridgepoint Partners LLC, Parent's financial advisor in connection with the Merger) to, cooperate reasonably with the Debt Financing efforts contemplated by the Debt Commitment Letter, including, without limitation:

(a) cooperating with the 15-business-day marketing period (the "Marketing Period") following execution of the Merger Agreement, during which Falconer and Dunmore will be entitled to arrange and syndicate the Senior Secured Term Loan B in accordance with the terms of the Debt Commitment Letter;

(b) providing or causing to be provided such information and assistance as may be reasonably requested by Falconer, Dunmore, or their respective affiliates in connection with the preparation of an offering memorandum, lender presentations, or other marketing materials;

(c) causing appropriate representatives of Parent and HCP to participate in lender meetings, due diligence sessions, and other customary marketing activities; and

(d) taking all other actions reasonably necessary to facilitate the timely satisfaction of the conditions to funding under the Debt Commitment Letter.

Nothing in this Section 7.5 shall require Parent to take any action that would (i) conflict with or violate any law, regulation, or order applicable to Parent or its affiliates, (ii) result in a breach of any confidentiality obligation of Parent or its affiliates, or (iii) require the waiver of any attorney-client privilege.

SECTION 8: MISCELLANEOUS PROVISIONS

8.1 Governing Law

This Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

8.2 Jurisdiction and Venue

Each of the parties hereto (and, with respect to the Company, by its acceptance of the benefits of this Letter as a third-party beneficiary) irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept or does not have subject matter jurisdiction over a particular matter, the United States District Court for the District of Delaware, or, if such federal court also declines to accept or does not have subject matter jurisdiction, any state court of the State of Delaware) in any action, suit, or proceeding arising out of or relating to this Letter or the transactions contemplated hereby. Each party irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, suit, or proceeding, any claim that it is not subject to the personal jurisdiction of any such court, that its property is exempt or immune from attachment or execution, that the action, suit, or proceeding is brought in an inconvenient forum, or that the venue of the action, suit, or proceeding is improper.

8.3 Waiver of Jury Trial

EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF ANY SUCH ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.3.

8.4 Entire Agreement

This Letter, together with the Merger Agreement, the Limited Guarantee, the Debt Commitment Letter, the Co-Investment Agreement, and the Rollover Agreement, constitutes the entire agreement among the parties hereto (and, with respect to the Company, as a third-party beneficiary) with respect to the subject matter hereof and thereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, of the parties with respect to such subject matter. There are no representations, warranties, covenants, agreements, or other understandings with respect to the subject matter hereof other than those expressly set forth or referred to herein and in the other transaction documents referred to in this Section 8.4.

8.5 Amendments and Waivers

No amendment, modification, supplement, or waiver of any provision of this Letter shall be valid or binding unless set forth in a written instrument duly executed by Parent, Merger Sub, and the Company (as third-party beneficiary). No waiver of any provision of this Letter shall constitute a waiver of any other provision (whether or not similar), nor shall any waiver constitute a continuing waiver, unless otherwise expressly provided in such written waiver. No failure or delay by any party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

8.6 Notices

All notices, requests, demands, consents, and other communications required or permitted under this Letter shall be in writing and shall be deemed duly given or delivered (a) when delivered personally, (b) upon receipt when sent by registered or certified mail (postage prepaid, return receipt requested), (c) upon receipt when sent by a nationally recognized overnight courier service (such as FedEx), or (d) upon transmission when sent by email (with confirmation of receipt), in each case addressed as follows:

If to Parent:

Harrowgate Private Equity Fund IV LP c/o Harrowgate Capital Partners LLC 1200 Market Street, Suite 3100 Wilmington, Delaware 19801

Attention: Nathaniel Cross, Managing Partner

Email: ncross@harrowgatecapital.com

with a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP One Liberty Plaza, 55th Floor New York, New York 10006

Attention: Oliver Mackenzie

Email: omackenzie@calderwoodharkness.com

If to Merger Sub:

Pinnacle Merger Sub, Inc. 1200 Market Street, Suite 3100 Wilmington, Delaware 19801

Attention: Jonah Whitfield, Sole Director

Email: jwhitfield@harrowgatecapital.com

If to the Company (as third-party beneficiary):

Pennfield Holdings, Inc. 4500 Commerce Boulevard, Suite 800 Charlotte, North Carolina 28202

Attention: Patricia Okafor, General Counsel & Corporate Secretary

Email: pokafor@pennfieldholdings.com

with a copy (which shall not constitute notice) to:

Calloway, Briggs & Harmon LLP 900 Third Avenue, 30th Floor New York, New York 10022

Attention: Janet Alcorn

Email: jalcorn@cbhlaw.com

Any party may change its address for purposes of this Section 8.6 by giving written notice of such change to the other parties in accordance with this Section 8.6.

8.7 Counterparts

This Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Letter (or any signature page hereto) by facsimile or by electronic transmission in portable document format (.pdf) or any other electronic format shall be effective as delivery of an original executed counterpart. No party shall raise the use of such electronic methods of delivery to challenge the validity or enforceability of any signature.

8.8 Severability

If any term, provision, covenant, or restriction of this Letter is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Letter shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Letter so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

8.9 No Recourse Against Non-Parties

Notwithstanding anything contained in this Letter or any other document or instrument delivered in connection herewith to the contrary, no recourse shall be had against any former, current, or future director, officer, employee, general partner, limited partner, member, manager, stockholder, affiliate, agent, advisor, attorney, or other representative of Parent (collectively, the "Non-Recourse Parties"), in each case other than Parent itself, for any obligation or liability of Parent under or in connection with this Letter, whether based on contract, tort, strict liability, or otherwise, and each of the parties hereto and the Company (as third-party beneficiary) hereby waives and releases any and all claims, actions, causes of action, and suits against any Non-Recourse Party in connection with or arising out of this Letter or the transactions contemplated hereby; provided, however, that nothing in this Section 8.9 shall:

(a) limit the obligations of Parent under the Limited Guarantee delivered in connection with the Merger Agreement;

(b) limit the obligations of HPE IV GP under the limited partnership agreement of Parent or under any separate agreement to which HPE IV GP is a party in connection with the transactions contemplated by the Merger Agreement; or

8.10 Confidentiality

The existence of this Letter and the terms and conditions contained herein are confidential and shall not be disclosed by any party or any third-party beneficiary to any person other than (a) the parties hereto and their respective partners, members, officers, directors, employees, agents, and representatives, (b) the Company and its directors, officers, employees, agents, and representatives, (c) the respective legal, financial, accounting, and tax advisors of the parties hereto and the Company, and (d) Falconer, Dunmore, Ashford, and the Management Rollover Participants, in each case solely to the extent necessary in connection with the transactions contemplated by this Letter and the Merger Agreement, and subject to appropriate confidentiality undertakings; provided, however, that the foregoing restrictions shall not apply to any disclosure that is (i) required by applicable law, statute, rule, regulation, or governmental order (including, without limitation, any filing requirements under the Securities Exchange Act of 1934, as amended, in connection with Schedule 13E-3, Schedule 14A, or any other filing required in connection with the Merger), (ii) required by legal process, including any subpoena or similar judicial or regulatory order, (iii) made with the prior written consent of the other parties, or (iv) of information that is or becomes publicly available other than through a breach of this Section 8.10.

SECTION 9: RELATIONSHIP TO OTHER TRANSACTION DOCUMENTS

This Letter is one of several interrelated transaction documents being executed and delivered in connection with the Merger. The following is a summary of the material transaction documents and their relationship to this Letter:

(a) Merger Agreement. The Agreement and Plan of Merger, to be dated April 7, 2025, among Parent, Merger Sub, and the Company. The Merger Agreement sets forth the terms and conditions of the Merger, including the representations and warranties of the parties, the conditions to the Closing, and the termination and remedy provisions applicable to the transactions.

(b) Debt Commitment Letter. The Debt Commitment Letter dated March 24, 2025, from Falconer National Bank, N.A., as Lead Arranger and Administrative Agent, and Dunmore Capital Markets LLC, as Co-Arranger and Joint Bookrunner, providing for: (i) a $490,000,000 Senior Secured Term Loan B facility, bearing interest at a rate of Adjusted Term SOFR plus 400 basis points per annum, with a seven-year maturity, and (ii) a $150,000,000 Senior Secured Revolving Credit Facility, bearing interest at a rate of Adjusted Term SOFR plus 350 basis points per annum, with a five-year maturity, which Revolving Credit Facility is expected to be undrawn at the Closing.

(c) Limited Guarantee. The Limited Guarantee to be dated April 7, 2025, delivered by Parent in favor of the Company, guaranteeing certain of Merger Sub's payment obligations under the Merger Agreement, including the Reverse Termination Fee of $58,800,000 (representing 6.0% of the Aggregate Merger Consideration), on the terms and subject to the conditions set forth therein. A form of the Limited Guarantee is attached hereto as Exhibit A.

(d) Co-Investment Agreement. The Co-Investment Agreement dated March 27, 2025, between Parent and Ashford Growth Partners LP, pursuant to which Ashford has committed $60,000,000 toward the Equity Contribution, on the terms and subject to the conditions set forth therein.

(e) Rollover Agreement. The Rollover Agreement, to be dated as of the date of the Merger Agreement (anticipated to be April 7, 2025), among Parent (or its designee) and the Management Rollover Participants, providing for the contribution by the Management Rollover Participants of an aggregate of $21,500,000 in rollover equity in connection with the Merger.

(f) Escrow Agreement. The Escrow Agreement, to be dated as of April 7, 2025, among the Company, Parent, and Grandview Trust Company, N.A., as escrow agent, providing for the deposit of $34,300,000 (representing the Termination Fee of 3.5% of the Aggregate Merger Consideration) into an escrow account to be held and disbursed in accordance with the terms thereof and the applicable provisions of the Merger Agreement.

(g) R&W Insurance Policy. The representations and warranties insurance policy bound on March 28, 2025, issued by Meridian Specialty Insurance Company, with a policy limit of $100,000,000 and a retention (self-insured deductible) of $9,800,000 (representing 1.0% of the Aggregate Merger Consideration), insuring against losses arising from breaches of the Company's representations and warranties set forth in the Merger Agreement, on the terms and subject to the conditions set forth in such policy.

In the event of any conflict or inconsistency between the provisions of this Letter and the provisions of the Merger Agreement with respect to the rights, remedies, or obligations of the Company (including, without limitation, the Company's rights as a third-party beneficiary hereunder), the terms and provisions of the Merger Agreement shall govern and control to the extent of such conflict or inconsistency.

SECTION 10: DEFINED TERMS

Capitalized terms used in this Letter and not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement. The following terms, as used in this Letter, shall have the meanings set forth below or in the Sections of this Letter referenced below:

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned has caused this Equity Commitment Letter to be duly executed and delivered as of the date first written above.

HARROWGATE PRIVATE EQUITY FUND IV LP

By: Harrowgate Capital Partners IV GP LLC,

its General Partner

By: ________

Name: Nathaniel Cross

Title: Managing Partner

Date: March 27, 2025

ACKNOWLEDGED AND AGREED:

PINNACLE MERGER SUB, INC.

By: ________

Name: Jonah Whitfield

Title: Sole Director

Date: March 27, 2025

ACKNOWLEDGED AS THIRD-PARTY BENEFICIARY:

(To be countersigned upon execution of the Merger Agreement)

PENNFIELD HOLDINGS, INC.

By: ________

Name: Catherine Langford

Title: Chief Executive Officer

Date: ________

(To be dated as of the date of the Merger Agreement — April 7, 2025)

SCHEDULE A

SOURCES AND USES SUMMARY

The following table sets forth the anticipated sources and uses of funds in connection with the Closing of the Merger:

Sources of Funds

Uses of Funds

Note: The Senior Secured Revolving Credit Facility of $150,000,000 is expected to be undrawn at the Closing and is available for post-closing working capital and general corporate purposes of the surviving corporation. Amounts are estimates and subject to adjustment at Closing. Totals may not sum due to rounding.

SCHEDULE B

WIRE TRANSFER INSTRUCTIONS

[To be completed and delivered by Merger Sub at least three (3) business days prior to the funding date in accordance with Section 2.3 of the Equity Commitment Letter.]

1. Merger Sub Funding Account

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 55th Floor New York, New York 10006 Telephone: (212) 558-4000 Facsimile: (212) 558-3588
March 27, 2025
Pinnacle Merger Sub, Inc. 1200 Market Street, Suite 3100 Wilmington, Delaware 19801
Attention: Jonah Whitfield, Sole Director
Re: Equity Commitment Letter — Acquisition of Pennfield Holdings, Inc.
Dear Mr. Whitfield:
This equity commitment letter (this "Letter") sets forth the commitment of Harrowgate Private Equity Fund IV LP, a Delaware limited partnership ("Parent"), to fund the Equity Contribution (as defined below) to Pinnacle Merger Sub, Inc., a Delaware corporation ("Merger Sub"), in connection with the transactions contemplated by the Agreement and Plan of Merger (as it may be amended, supplemented, or otherwise modified from time to time, the "Merger Agreement") to be entered into among Parent, Merger Sub, and Pennfield Holdings, Inc., a Delaware corporation (the "Company"), pursuant to which Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving as a wholly owned subsidiary of Parent.
SECTION 1: RECITALS AND BACKGROUND
WHEREAS, Parent is a Delaware limited partnership whose general partner is Harrowgate Capital Partners IV GP LLC, a Delaware limited liability company ("HPE IV GP"), and whose investment manager is Harrowgate Capital Partners LLC, a Delaware limited liability company ("HCP");
WHEREAS, Merger Sub is a Delaware corporation and a newly formed, wholly owned direct subsidiary of Parent, formed solely for the purpose of effecting the Merger, and has not engaged in any business or activities other than those incidental to its formation and the transactions contemplated by this Letter, the Merger Agreement, and the other transaction documents;
WHEREAS, the Merger Agreement contemplates a reverse triangular merger under Section 251 of the Delaware General Corporation Law (the "DGCL"), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent, on the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS, the aggregate merger consideration payable to the holders of Company common stock in connection with the Merger is $980,000,000 (the "Aggregate Merger Consideration"), equal to $15.95 per share of Company common stock on a fully diluted basis (based on 61,450,000 fully diluted shares, comprising 58,200,000 outstanding shares of common stock and 3,250,000 shares underlying outstanding options and restricted stock units);
WHEREAS, the transactions contemplated by the Merger Agreement will be financed through a combination of committed debt financing and equity contributions, as more fully described herein;
WHEREAS, this Letter sets forth the commitment of Parent to fund the Equity Contribution (as defined below) to Merger Sub on the terms and subject to the conditions set forth herein;
WHEREAS, reference is made to that certain Debt Commitment Letter dated March 24, 2025 (the "Debt Commitment Letter"), from Falconer National Bank, N.A. ("Falconer"), as Lead Arranger and Administrative Agent, and Dunmore Capital Markets LLC ("Dunmore"), as Co-Arranger and Joint Bookrunner, providing for (i) a $490,000,000 Senior Secured Term Loan B facility and (ii) a $150,000,000 Senior Secured Revolving Credit Facility (collectively, the "Debt Financing"), on the terms and subject to the conditions set forth in the Debt Commitment Letter;
WHEREAS, reference is further made to that certain Co-Investment Agreement dated March 27, 2025 (the "Co-Investment Agreement"), between Parent and Ashford Growth Partners LP ("Ashford"), a Delaware limited partnership, pursuant to which Ashford has committed $60,000,000 toward the Equity Contribution on the terms and subject to the conditions set forth therein; and
WHEREAS, certain members of the Company's management team — specifically, Catherine Langford, Chief Executive Officer, Derek Simmons, Chief Financial Officer, and Maxwell Dunn, Chief Operating Officer (collectively, the "Management Rollover Participants") — will contribute $21,500,000 in aggregate rollover equity to Merger Sub (or a parent entity thereof) pursuant to a Rollover Agreement to be executed on or about the date of the Merger Agreement (the "Rollover Agreement"), the terms of which will provide for the cancellation and exchange of a portion of such individuals' shares of Company common stock for equity interests in Parent (or an entity designated by Parent) in lieu of receiving the per share merger consideration with respect to such shares.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements, covenants, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 2: COMMITMENT
2.1 Equity Commitment Amount
Parent hereby irrevocably commits, subject to the terms and conditions of this Letter and the Merger Agreement, to contribute or cause to be contributed to Merger Sub, at or immediately prior to the Closing (as defined in the Merger Agreement), cash in an aggregate amount of up to Three Hundred Forty Million Dollars ($340,000,000) (the "Commitment Amount" or "Equity Contribution").
The Commitment Amount is composed of the following components:
(a) Two Hundred Fifty-Eight Million Five Hundred Thousand Dollars ($258,500,000) from Parent's own capital, funded from the capital commitments available to Harrowgate Private Equity Fund IV LP, a $4,800,000,000 vintage 2023 private equity fund managed by HCP (the "Parent Direct Contribution");
(b) Sixty Million Dollars ($60,000,000) from Ashford Growth Partners LP, acting as a co-investor pursuant to the Co-Investment Agreement (the "Ashford Co-Investment"); and
(c) Twenty-One Million Five Hundred Thousand Dollars ($21,500,000) of management rollover equity, to be contributed by the Management Rollover Participants pursuant to the Rollover Agreement (the "Rollover Contribution"), allocated as follows:
(i) Catherine Langford (Chief Executive Officer): $12,500,000;
(ii) Derek Simmons (Chief Financial Officer): $5,000,000; and
(iii) Maxwell Dunn (Chief Operating Officer): $4,000,000.
For the avoidance of doubt, the management rollover equity constitutes approximately 2.2% of the total equity value of the surviving corporation immediately following the consummation of the Merger. The Rollover Contribution shall be effected through the cancellation of shares of Company common stock held by the Management Rollover Participants and the issuance to such persons of equity interests in Parent (or an entity designated by Parent) in exchange therefor, and accordingly shall not require the actual funding of cash by the Management Rollover Participants; provided, however, that the aggregate Commitment Amount of $340,000,000 reflects the total equity capitalization required in connection with the Closing, inclusive of the economic value of the Rollover Contribution.
2.2 Purpose of Equity Contribution
The Equity Contribution, together with the proceeds of the Debt Financing and approximately Ninety Million Dollars ($90,000,000) of cash on the Company's balance sheet that is expected to be available at the time of the Closing (the "Company Cash"), shall be applied to the following purposes:
(a) fund the Aggregate Merger Consideration of $980,000,000 payable to the holders of Company common stock, Company stock options, and Company restricted stock units (other than shares subject to the Rollover Agreement) in accordance with the Merger Agreement;
(b) pay all fees, costs, and expenses incurred by Parent, Merger Sub, the Company, or the surviving corporation in connection with the Merger and the transactions contemplated by the Merger Agreement, the Debt Commitment Letter, this Letter, and the other transaction documents, which fees, costs, and expenses are estimated to aggregate approximately Sixty Million Dollars ($60,000,000), including but not limited to (i) debt financing fees and expenses, (ii) legal, accounting, and advisory fees, (iii) filing fees and regulatory expenses, (iv) the premium for the R&W Insurance Policy (as defined in Section 9), and (v) other customary transaction costs; and
(c) fund any other amounts required to be paid by Merger Sub or the surviving corporation at or in connection with the Closing pursuant to the terms of the Merger Agreement or any ancillary agreement.
The following table sets forth the anticipated sources and uses of funds in connection with the Closing (a detailed version of which is set forth on Schedule A attached hereto):
For the avoidance of doubt, the Revolving Credit Facility of $150,000,000 is expected to be undrawn at the Closing and is not reflected in the sources above. The Senior Secured Term Loan B of $490,000,000, together with the Equity Contribution of $340,000,000 and the Company Cash of approximately $90,000,000, provides total sources of approximately $920,000,000 in cash (plus $21,500,000 of non-cash rollover equity), against total cash uses of approximately $1,040,000,000 (comprising the Aggregate Merger Consideration of $980,000,000 and estimated transaction costs of approximately $60,000,000). Any shortfall or excess will be reconciled at the Closing in accordance with the provisions of the Merger Agreement.
2.3 Funding Mechanics
Parent shall fund, or cause to be funded, the Equity Contribution (excluding the Rollover Contribution, which shall be effected pursuant to the Rollover Agreement) to an account designated by Merger Sub (the "Funding Account") no later than two (2) business days prior to the anticipated Closing Date (which is currently estimated to be June 30, 2025) or, if the Closing is to occur on shorter notice, simultaneously with the Closing. Merger Sub shall provide wire instructions for the Funding Account to Parent in writing at least three (3) business days prior to the required funding date. All amounts constituting the Equity Contribution (other than the Rollover Contribution) shall be funded in immediately available funds in United States dollars by wire transfer to the Funding Account. Detailed wire transfer instructions, including the applicable bank, account number, routing information, and reference data, are set forth on Schedule B attached hereto (or shall be completed and delivered prior to the Closing in accordance with this Section 2.3).
Parent shall coordinate the timing and logistics of the funding of the Equity Contribution with the funding of the Debt Financing under the Debt Commitment Letter, such that the aggregate cash amounts are available in the Funding Account (or such other accounts as may be designated by the paying agent or the escrow agent, as applicable) on or prior to the Closing in amounts sufficient to consummate the transactions contemplated by the Merger Agreement.
2.4 No Obligation to Exceed Commitment Amount
In no event shall Parent be obligated to contribute, or cause to be contributed, aggregate amounts in excess of the Commitment Amount of Three Hundred Forty Million Dollars ($340,000,000). The obligation of Parent hereunder is limited to the Commitment Amount, and nothing in this Letter shall be construed to require Parent to contribute, guarantee, or otherwise provide funds in excess of such amount.
SECTION 3: CONDITIONS TO FUNDING
3.1 Conditions Precedent
The obligation of Parent to fund the Equity Contribution in accordance with Section 2 hereof is subject to the satisfaction (or, to the extent permitted by the Merger Agreement, the waiver by the applicable party) of each of the following conditions:
(a) Merger Agreement Conditions. All conditions to the obligations of Parent and Merger Sub to consummate the Merger as set forth in the Merger Agreement (including, without limitation, the conditions set forth in Article VII thereof) shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but which conditions shall be capable of being satisfied at the Closing);
(b) Debt Financing. The substantially simultaneous funding of the Debt Financing (or, to the extent applicable, alternative financing on terms no less favorable to Parent in the aggregate) pursuant to the Debt Commitment Letter, such that the aggregate proceeds of the Debt Financing, together with the Equity Contribution and the Company Cash, are sufficient to consummate the transactions contemplated by the Merger Agreement and pay all related fees, costs, and expenses; and
(c) Closing. The substantially simultaneous consummation of the Closing under the Merger Agreement, including the filing of the certificate of merger with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL and the terms of the Merger Agreement.
3.2 No Independent Conditions
Except as expressly set forth in Section 3.1 above, there shall be no conditions (whether express or implied) to the obligation of Parent to fund the Equity Contribution. Without limiting the generality of the foregoing, the obligation of Parent to fund the Equity Contribution shall not be subject to any condition relating to the availability of financing other than the Debt Financing as set forth in the Debt Commitment Letter, and Parent acknowledges and agrees that it shall not have the right to refuse to fund the Equity Contribution on the basis of any financing condition, market condition, or other contingency not expressly set forth in Section 3.1. Parent further acknowledges that it has no right to refuse to fund the Equity Contribution on the basis of the failure of Ashford to fund its co-investment commitment or the failure of any Management Rollover Participant to consummate the Rollover Contribution, and in any such event, Parent shall remain obligated to fund the full Commitment Amount.
SECTION 4: TERMINATION
4.1 Automatic Termination Events
This Letter and the obligations of Parent hereunder shall automatically terminate, without any further action by any party, upon the earliest to occur of the following:
(a) the Closing, upon the funding of the Equity Contribution in full in accordance with the terms hereof (at which point all obligations of Parent under this Letter shall be deemed satisfied and discharged);
(b) the valid termination of the Merger Agreement in accordance with its terms, including, without limitation, termination pursuant to Section 8.1 thereof (whether by mutual consent, by either party upon the occurrence of certain specified events, or by operation of law); and
(c) September 30, 2025 (the "Outside Date"), or such later date as may be agreed in writing by the parties to the Merger Agreement as an extension of the Outside Date in accordance with the terms of the Merger Agreement; provided, that if the Outside Date is extended pursuant to the terms of the Merger Agreement, the termination date under this clause (c) shall be automatically extended to correspond to such extended Outside Date without any further action by the parties hereto.
4.2 Effect of Termination
Upon the termination of this Letter in accordance with Section 4.1, Parent shall have no further obligations hereunder, and all rights and obligations of the parties hereunder shall terminate and be of no further force or effect; provided, however, that (i) nothing herein shall relieve Parent from liability for any willful or intentional breach of this Letter occurring prior to such termination, and (ii) the provisions of Section 7 (Covenants of Parent, solely to the extent of obligations that by their terms survive termination), Section 8 (Miscellaneous Provisions), Section 9 (Relationship to Other Transaction Documents), and Section 10 (Defined Terms), together with this Section 4.2, shall survive the termination of this Letter.
SECTION 5: ENFORCEMENT
5.1 Third-Party Beneficiary Rights
The Company is an express intended third-party beneficiary of this Letter. The Company shall be entitled to enforce the terms and provisions of this Letter directly against Parent, subject to and in accordance with the terms and conditions of the Merger Agreement (including any limitations on the rights, remedies, or recourse of the Company set forth therein) and the Limited Guarantee (as defined below). For the avoidance of doubt, the rights of the Company as a third-party beneficiary hereunder shall be subject to, and limited by, the provisions of Section 5.3 below.
Reference is hereby made to the Limited Guarantee to be dated as of the date of the Merger Agreement (anticipated to be April 7, 2025) (the "Limited Guarantee"), delivered by Parent in favor of the Company, guaranteeing certain of Merger Sub's payment obligations under the Merger Agreement, including, without limitation, the Reverse Termination Fee (as defined below) in the amount of Fifty-Eight Million Eight Hundred Thousand Dollars ($58,800,000), representing 6.0% of the Aggregate Merger Consideration, payable in the circumstances specified in the Merger Agreement.
Other than Merger Sub and the Company, no person shall have any rights, benefits, or remedies under this Letter, and no person (including, without limitation, any creditor of Parent, Merger Sub, or the Company) shall be entitled to rely on or enforce any provision of this Letter as a third-party beneficiary or otherwise.
5.2 Specific Performance
Parent acknowledges and agrees that irreparable damage would occur to Merger Sub and the Company if the obligations of Parent hereunder were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages, even if available, would not be an adequate remedy for any such failure to perform or breach. Accordingly, each of the Company and Merger Sub shall be entitled to seek an injunction, specific performance, or other equitable relief to enforce specifically the obligations of Parent to fund the Equity Contribution in accordance with the terms hereof, subject to and in accordance with the terms and conditions of the Merger Agreement (including, without limitation, any limitations on the right to seek or obtain specific performance set forth in Section 9.10 of the Merger Agreement), without the necessity of proving actual damages or posting any bond or other security.
The rights and remedies of the Company and Merger Sub under this Section 5.2 shall be in addition to, and not in limitation of, any other rights or remedies available to the Company or Merger Sub under the Merger Agreement, the Limited Guarantee, or applicable law, subject in all cases to the limitations set forth in Section 5.3 below.
5.3 Limitation on Liability
Notwithstanding anything contained in this Letter or the Merger Agreement to the contrary, in no event shall the aggregate liability of Parent under or in connection with this Letter (whether based on contract, tort, strict liability, or otherwise) exceed the Commitment Amount of Three Hundred Forty Million Dollars ($340,000,000).
The Company's sole and exclusive remedy against Parent for any failure by Parent to fund, or cause to be funded, the Equity Contribution in accordance with the terms hereof (other than the right to seek specific performance in accordance with, and subject to, Section 5.2 and the applicable provisions of the Merger Agreement) shall be as set forth in the Merger Agreement, including, without limitation, the Reverse Termination Fee provisions set forth in Section 8.3 of the Merger Agreement (the "Reverse Termination Fee" of Fifty-Eight Million Eight Hundred Thousand Dollars ($58,800,000)) and the Limited Guarantee. In no event shall Parent or any of its affiliates be required to pay the Reverse Termination Fee more than once, and the payment of the Reverse Termination Fee and any other amounts payable pursuant to the Limited Guarantee shall, to the fullest extent permitted by law, constitute liquidated damages and be the sole and exclusive monetary remedy of the Company and its affiliates against Parent and Merger Sub for any failure to consummate the Merger.
SECTION 6: REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to Merger Sub and the Company (as a third-party beneficiary) as follows, as of the date hereof and as of the Closing Date:
6.1 Organization and Good Standing
Parent is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. Parent has all requisite limited partnership power and authority to execute and deliver this Letter, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. HPE IV GP is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware and is the sole general partner of Parent.
6.2 Authorization
The execution, delivery, and performance of this Letter by Parent, and the consummation by Parent of the transactions contemplated hereby, have been duly authorized by all necessary limited partnership action on the part of Parent and by all necessary limited liability company action on the part of HPE IV GP (in its capacity as the general partner of Parent). No other action, approval, consent, or authorization on the part of Parent, HPE IV GP, or any of their respective partners, members, managers, or other equity holders is necessary to authorize the execution and delivery of this Letter or the performance of Parent's obligations hereunder.
This Letter has been duly executed and delivered by Parent (acting through HPE IV GP) and constitutes the legal, valid, and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights, and (b) general equitable principles (whether considered in a proceeding in equity or at law).
6.3 No Conflicts
The execution, delivery, and performance of this Letter by Parent, and the consummation of the transactions contemplated hereby, do not and will not (with or without the giving of notice or the lapse of time, or both):
(a) conflict with, violate, or result in a breach of any provision of the limited partnership agreement of Parent, the limited liability company agreement of HPE IV GP, or any other organizational or governing document of Parent or HPE IV GP;
(b) conflict with, violate, or result in a breach of any law, statute, ordinance, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to Parent, HPE IV GP, or any of their respective properties or assets; or
(c) conflict with, violate, result in a breach of, constitute a default under, or give rise to any right of termination, cancellation, acceleration, or loss of any material benefit under, any material contract, agreement, instrument, permit, license, or obligation to which Parent or HPE IV GP is a party or by which any of their respective properties or assets are bound.
No consent, approval, authorization, order, filing, registration, or qualification of or with any governmental authority or any other person is required to be obtained by Parent or HPE IV GP in connection with the execution, delivery, and performance of this Letter, except as may be required in connection with the Merger and the transactions contemplated by the Merger Agreement (including applicable antitrust and regulatory filings).
6.4 Sufficiency of Funds
Parent has, as of the date hereof, and at the Closing will have, sufficient capital commitments from its limited partners and available funds (including, without limitation, the right to call capital from its limited partners in accordance with the terms of its limited partnership agreement) to fund the Equity Contribution in full in accordance with the terms of this Letter. Parent represents that as of the date hereof:
(a) Harrowgate Private Equity Fund IV LP has total capital commitments of Four Billion Eight Hundred Million Dollars ($4,800,000,000) and is a vintage 2023 fund with substantial uncalled capital;
(b) the Commitment Amount of $340,000,000 (including the Ashford Co-Investment and the Rollover Contribution) represents approximately 7.1% of Parent's total fund commitments, and the Parent Direct Contribution of $258,500,000 represents approximately 5.4% of Parent's total fund commitments;
(c) HCP, the investment manager of Parent, manages total firm-wide assets under management of approximately Fourteen Billion Two Hundred Million Dollars ($14,200,000,000) across multiple funds and investment vehicles; and
(d) Parent has received no notice from any limited partner of Parent indicating an inability or unwillingness to fund capital calls in respect of such limited partner's capital commitment to Parent, and Parent is not aware of any fact or circumstance that would reasonably be expected to result in the inability of any limited partner to fund its capital commitment when called.
6.5 No Proceedings
No action, suit, proceeding, claim, arbitration, or investigation before or by any governmental authority, court, or arbitral tribunal is pending or, to the knowledge of Parent (after due inquiry), threatened against or relating to Parent, HPE IV GP, or HCP that (a) challenges, seeks to restrain, or seeks to enjoin the execution, delivery, or performance of this Letter or the consummation of any of the transactions contemplated hereby, or (b) would otherwise reasonably be expected to impair or materially delay the ability of Parent to fund the Equity Contribution in accordance with the terms hereof.
6.6 Solvency
After giving effect to the funding of the Equity Contribution and the consummation of the transactions contemplated by the Merger Agreement (including the incurrence of the Debt Financing), Parent will not be insolvent. For purposes of this Section 6.6, "insolvent" means that (a) the present fair saleable value of Parent's assets is less than the amount required to pay Parent's total liabilities as they become due, (b) Parent is unable to pay its debts and liabilities, subordinated, contingent, or otherwise, as they become due, or (c) Parent has unreasonably small capital with which to conduct its business as currently conducted and as proposed to be conducted.
SECTION 7: COVENANTS OF PARENT
7.1 Maintenance of Existence
Parent shall maintain its legal existence as a Delaware limited partnership, in good standing, until the earlier of (a) the Closing and (b) the termination of this Letter in accordance with Section 4. Parent shall not dissolve, liquidate, wind up, or otherwise cease to exist prior to such date, except with the prior written consent of Merger Sub and the Company.
7.2 No Transfer of Obligations
Parent shall not transfer, assign, or delegate, in whole or in part, its obligations under this Letter to any person without the prior written consent of Merger Sub and the Company; provided, however, that Parent may, without such consent, assign its obligation to fund all or a portion of the Equity Contribution to one or more affiliated funds, parallel funds, co-investment vehicles, or alternative investment vehicles managed, controlled, or advised by HCP or any affiliate of HCP (each, a "Permitted Assignee"); provided, further, that no such assignment to a Permitted Assignee shall relieve Parent of its obligations hereunder, and Parent shall remain primarily liable for the full Commitment Amount notwithstanding any such assignment. Any purported transfer, assignment, or delegation in violation of this Section 7.2 shall be null and void and of no force or effect.
7.3 Co-Investor and Rollover Coordination
Parent shall use commercially reasonable efforts to cause Ashford Growth Partners LP to fund its $60,000,000 co-investment commitment in accordance with the terms and conditions of the Co-Investment Agreement and to cause each of the Management Rollover Participants — Catherine Langford ($12,500,000), Derek Simmons ($5,000,000), and Maxwell Dunn ($4,000,000) — to contribute their respective rollover equity in accordance with the terms and conditions of the Rollover Agreement.
Parent shall keep Merger Sub and the Company reasonably informed of the status of the co-investment and rollover processes and shall promptly notify Merger Sub and the Company of any material developments with respect thereto, including, without limitation, any indication by Ashford or any Management Rollover Participant that it may not fulfill its respective funding obligations.
Notwithstanding the foregoing, in the event that any co-investor (including Ashford) or any Management Rollover Participant fails to fund its respective commitment or consummate its respective contribution for any reason, Parent shall remain obligated to fund the full Commitment Amount of $340,000,000 (or cause the same to be funded), and no such failure shall excuse, reduce, or otherwise affect Parent's obligations under this Letter. Parent acknowledges and agrees that its obligation to fund the full Commitment Amount is unconditional, and that it bears the risk of any co-investor or rollover participant default.
7.4 Notification
Parent shall promptly (and in any event within two (2) business days) notify Merger Sub and the Company in writing if Parent becomes aware of any fact, event, circumstance, or development that would reasonably be expected to (a) prevent, materially impair, or materially delay the funding of the Equity Contribution in accordance with the terms hereof, (b) result in any of the representations and warranties set forth in Section 6 becoming untrue or incorrect in any material respect, or (c) result in a breach by Parent of any covenant or agreement set forth in this Section 7. Any such notification shall describe in reasonable detail the nature of the relevant fact, event, circumstance, or development and the anticipated impact on Parent's ability to perform its obligations hereunder.
7.5 Cooperation with Financing
Parent shall, and shall cause its affiliates and representatives (including, without limitation, Ridgepoint Partners LLC, Parent's financial advisor in connection with the Merger) to, cooperate reasonably with the Debt Financing efforts contemplated by the Debt Commitment Letter, including, without limitation:
(a) cooperating with the 15-business-day marketing period (the "Marketing Period") following execution of the Merger Agreement, during which Falconer and Dunmore will be entitled to arrange and syndicate the Senior Secured Term Loan B in accordance with the terms of the Debt Commitment Letter;
(b) providing or causing to be provided such information and assistance as may be reasonably requested by Falconer, Dunmore, or their respective affiliates in connection with the preparation of an offering memorandum, lender presentations, or other marketing materials;
(c) causing appropriate representatives of Parent and HCP to participate in lender meetings, due diligence sessions, and other customary marketing activities; and
(d) taking all other actions reasonably necessary to facilitate the timely satisfaction of the conditions to funding under the Debt Commitment Letter.
Nothing in this Section 7.5 shall require Parent to take any action that would (i) conflict with or violate any law, regulation, or order applicable to Parent or its affiliates, (ii) result in a breach of any confidentiality obligation of Parent or its affiliates, or (iii) require the waiver of any attorney-client privilege.
SECTION 8: MISCELLANEOUS PROVISIONS
8.1 Governing Law
This Letter shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
8.2 Jurisdiction and Venue
Each of the parties hereto (and, with respect to the Company, by its acceptance of the benefits of this Letter as a third-party beneficiary) irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept or does not have subject matter jurisdiction over a particular matter, the United States District Court for the District of Delaware, or, if such federal court also declines to accept or does not have subject matter jurisdiction, any state court of the State of Delaware) in any action, suit, or proceeding arising out of or relating to this Letter or the transactions contemplated hereby. Each party irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, suit, or proceeding, any claim that it is not subject to the personal jurisdiction of any such court, that its property is exempt or immune from attachment or execution, that the action, suit, or proceeding is brought in an inconvenient forum, or that the venue of the action, suit, or proceeding is improper.
8.3 Waiver of Jury Trial
EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF ANY SUCH ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.3.
8.4 Entire Agreement
This Letter, together with the Merger Agreement, the Limited Guarantee, the Debt Commitment Letter, the Co-Investment Agreement, and the Rollover Agreement, constitutes the entire agreement among the parties hereto (and, with respect to the Company, as a third-party beneficiary) with respect to the subject matter hereof and thereof, and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, of the parties with respect to such subject matter. There are no representations, warranties, covenants, agreements, or other understandings with respect to the subject matter hereof other than those expressly set forth or referred to herein and in the other transaction documents referred to in this Section 8.4.
8.5 Amendments and Waivers
No amendment, modification, supplement, or waiver of any provision of this Letter shall be valid or binding unless set forth in a written instrument duly executed by Parent, Merger Sub, and the Company (as third-party beneficiary). No waiver of any provision of this Letter shall constitute a waiver of any other provision (whether or not similar), nor shall any waiver constitute a continuing waiver, unless otherwise expressly provided in such written waiver. No failure or delay by any party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
8.6 Notices
All notices, requests, demands, consents, and other communications required or permitted under this Letter shall be in writing and shall be deemed duly given or delivered (a) when delivered personally, (b) upon receipt when sent by registered or certified mail (postage prepaid, return receipt requested), (c) upon receipt when sent by a nationally recognized overnight courier service (such as FedEx), or (d) upon transmission when sent by email (with confirmation of receipt), in each case addressed as follows:
If to Parent:
Harrowgate Private Equity Fund IV LP c/o Harrowgate Capital Partners LLC 1200 Market Street, Suite 3100 Wilmington, Delaware 19801
Attention: Nathaniel Cross, Managing Partner
Email: ncross@harrowgatecapital.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP One Liberty Plaza, 55th Floor New York, New York 10006
Attention: Oliver Mackenzie
Email: omackenzie@calderwoodharkness.com
If to Merger Sub:
Pinnacle Merger Sub, Inc. 1200 Market Street, Suite 3100 Wilmington, Delaware 19801
Attention: Jonah Whitfield, Sole Director
Email: jwhitfield@harrowgatecapital.com
If to the Company (as third-party beneficiary):
Pennfield Holdings, Inc. 4500 Commerce Boulevard, Suite 800 Charlotte, North Carolina 28202
Attention: Patricia Okafor, General Counsel & Corporate Secretary
Email: pokafor@pennfieldholdings.com
with a copy (which shall not constitute notice) to:
Calloway, Briggs & Harmon LLP 900 Third Avenue, 30th Floor New York, New York 10022
Attention: Janet Alcorn
Email: jalcorn@cbhlaw.com
Any party may change its address for purposes of this Section 8.6 by giving written notice of such change to the other parties in accordance with this Section 8.6.
8.7 Counterparts
This Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Letter (or any signature page hereto) by facsimile or by electronic transmission in portable document format (.pdf) or any other electronic format shall be effective as delivery of an original executed counterpart. No party shall raise the use of such electronic methods of delivery to challenge the validity or enforceability of any signature.
8.8 Severability
If any term, provision, covenant, or restriction of this Letter is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Letter shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Letter so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
8.9 No Recourse Against Non-Parties
Notwithstanding anything contained in this Letter or any other document or instrument delivered in connection herewith to the contrary, no recourse shall be had against any former, current, or future director, officer, employee, general partner, limited partner, member, manager, stockholder, affiliate, agent, advisor, attorney, or other representative of Parent (collectively, the "Non-Recourse Parties"), in each case other than Parent itself, for any obligation or liability of Parent under or in connection with this Letter, whether based on contract, tort, strict liability, or otherwise, and each of the parties hereto and the Company (as third-party beneficiary) hereby waives and releases any and all claims, actions, causes of action, and suits against any Non-Recourse Party in connection with or arising out of this Letter or the transactions contemplated hereby; provided, however, that nothing in this Section 8.9 shall:
(a) limit the obligations of Parent under the Limited Guarantee delivered in connection with the Merger Agreement;
(b) limit the obligations of HPE IV GP under the limited partnership agreement of Parent or under any separate agreement to which HPE IV GP is a party in connection with the transactions contemplated by the Merger Agreement; or
(c) limit the rights of any party with respect to claims based on fraud.
8.10 Confidentiality
The existence of this Letter and the terms and conditions contained herein are confidential and shall not be disclosed by any party or any third-party beneficiary to any person other than (a) the parties hereto and their respective partners, members, officers, directors, employees, agents, and representatives, (b) the Company and its directors, officers, employees, agents, and representatives, (c) the respective legal, financial, accounting, and tax advisors of the parties hereto and the Company, and (d) Falconer, Dunmore, Ashford, and the Management Rollover Participants, in each case solely to the extent necessary in connection with the transactions contemplated by this Letter and the Merger Agreement, and subject to appropriate confidentiality undertakings; provided, however, that the foregoing restrictions shall not apply to any disclosure that is (i) required by applicable law, statute, rule, regulation, or governmental order (including, without limitation, any filing requirements under the Securities Exchange Act of 1934, as amended, in connection with Schedule 13E-3, Schedule 14A, or any other filing required in connection with the Merger), (ii) required by legal process, including any subpoena or similar judicial or regulatory order, (iii) made with the prior written consent of the other parties, or (iv) of information that is or becomes publicly available other than through a breach of this Section 8.10.
SECTION 9: RELATIONSHIP TO OTHER TRANSACTION DOCUMENTS
This Letter is one of several interrelated transaction documents being executed and delivered in connection with the Merger. The following is a summary of the material transaction documents and their relationship to this Letter:
(a) Merger Agreement. The Agreement and Plan of Merger, to be dated April 7, 2025, among Parent, Merger Sub, and the Company. The Merger Agreement sets forth the terms and conditions of the Merger, including the representations and warranties of the parties, the conditions to the Closing, and the termination and remedy provisions applicable to the transactions.
(b) Debt Commitment Letter. The Debt Commitment Letter dated March 24, 2025, from Falconer National Bank, N.A., as Lead Arranger and Administrative Agent, and Dunmore Capital Markets LLC, as Co-Arranger and Joint Bookrunner, providing for: (i) a $490,000,000 Senior Secured Term Loan B facility, bearing interest at a rate of Adjusted Term SOFR plus 400 basis points per annum, with a seven-year maturity, and (ii) a $150,000,000 Senior Secured Revolving Credit Facility, bearing interest at a rate of Adjusted Term SOFR plus 350 basis points per annum, with a five-year maturity, which Revolving Credit Facility is expected to be undrawn at the Closing.
(c) Limited Guarantee. The Limited Guarantee to be dated April 7, 2025, delivered by Parent in favor of the Company, guaranteeing certain of Merger Sub's payment obligations under the Merger Agreement, including the Reverse Termination Fee of $58,800,000 (representing 6.0% of the Aggregate Merger Consideration), on the terms and subject to the conditions set forth therein. A form of the Limited Guarantee is attached hereto as Exhibit A.
(d) Co-Investment Agreement. The Co-Investment Agreement dated March 27, 2025, between Parent and Ashford Growth Partners LP, pursuant to which Ashford has committed $60,000,000 toward the Equity Contribution, on the terms and subject to the conditions set forth therein.
(e) Rollover Agreement. The Rollover Agreement, to be dated as of the date of the Merger Agreement (anticipated to be April 7, 2025), among Parent (or its designee) and the Management Rollover Participants, providing for the contribution by the Management Rollover Participants of an aggregate of $21,500,000 in rollover equity in connection with the Merger.
(f) Escrow Agreement. The Escrow Agreement, to be dated as of April 7, 2025, among the Company, Parent, and Grandview Trust Company, N.A., as escrow agent, providing for the deposit of $34,300,000 (representing the Termination Fee of 3.5% of the Aggregate Merger Consideration) into an escrow account to be held and disbursed in accordance with the terms thereof and the applicable provisions of the Merger Agreement.
(g) R&W Insurance Policy. The representations and warranties insurance policy bound on March 28, 2025, issued by Meridian Specialty Insurance Company, with a policy limit of $100,000,000 and a retention (self-insured deductible) of $9,800,000 (representing 1.0% of the Aggregate Merger Consideration), insuring against losses arising from breaches of the Company's representations and warranties set forth in the Merger Agreement, on the terms and subject to the conditions set forth in such policy.
In the event of any conflict or inconsistency between the provisions of this Letter and the provisions of the Merger Agreement with respect to the rights, remedies, or obligations of the Company (including, without limitation, the Company's rights as a third-party beneficiary hereunder), the terms and provisions of the Merger Agreement shall govern and control to the extent of such conflict or inconsistency.
SECTION 10: DEFINED TERMS
Capitalized terms used in this Letter and not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement. The following terms, as used in this Letter, shall have the meanings set forth below or in the Sections of this Letter referenced below:
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned has caused this Equity Commitment Letter to be duly executed and delivered as of the date first written above.
HARROWGATE PRIVATE EQUITY FUND IV LP
By: Harrowgate Capital Partners IV GP LLC,
its General Partner
By: ________
Name: Nathaniel Cross
Title: Managing Partner
Date: March 27, 2025
ACKNOWLEDGED AND AGREED:
PINNACLE MERGER SUB, INC.
By: ________
Name: Jonah Whitfield
Title: Sole Director
Date: March 27, 2025
ACKNOWLEDGED AS THIRD-PARTY BENEFICIARY:
(To be countersigned upon execution of the Merger Agreement)
PENNFIELD HOLDINGS, INC.
By: ________
Name: Catherine Langford
Title: Chief Executive Officer
Date: ________
(To be dated as of the date of the Merger Agreement — April 7, 2025)
SCHEDULE A
SOURCES AND USES SUMMARY
The following table sets forth the anticipated sources and uses of funds in connection with the Closing of the Merger:
Sources of Funds
Uses of Funds
Note: The Senior Secured Revolving Credit Facility of $150,000,000 is expected to be undrawn at the Closing and is available for post-closing working capital and general corporate purposes of the surviving corporation. Amounts are estimates and subject to adjustment at Closing. Totals may not sum due to rounding.
SCHEDULE B
WIRE TRANSFER INSTRUCTIONS
[To be completed and delivered by Merger Sub at least three (3) business days prior to the funding date in accordance with Section 2.3 of the Equity Commitment Letter.]
1. Merger Sub Funding Account
2. Debt Financing Disbursement
All Debt Financing proceeds shall be disbursed by Falconer National Bank, N.A., as Administrative Agent, in accordance with the terms of the Credit Agreement and the Debt Commitment Letter. Wire instructions for the disbursement of Debt Financing proceeds shall be coordinated between the Administrative Agent and Merger Sub and are not set forth herein.
3. Escrow Funding
4. Paying Agent
Note: All wire transfer instructions shall be confirmed in writing by Merger Sub and verified by Parent prior to the initiation of any wire transfer. All funds shall be transmitted in immediately available funds in United States dollars.
EXHIBIT A
FORM OF LIMITED GUARANTEE
[The Form of Limited Guarantee to be executed by Harrowgate Private Equity Fund IV LP in favor of Pennfield Holdings, Inc. on or about April 7, 2025, guaranteeing certain payment obligations of Pinnacle Merger Sub, Inc. under the Agreement and Plan of Merger, including the Reverse Termination Fee of $58,800,000, is attached separately and incorporated herein by reference. The final form of the Limited Guarantee shall be agreed upon by the parties and executed simultaneously with the Merger Agreement.]
[Form intentionally omitted from this draft — to be attached upon finalization.]
Sources | Amount | Uses | Amount
Senior Secured Term Loan B | $490,000,000 | Aggregate Merger Consideration | $980,000,000
Parent Direct Contribution | $258,500,000 | Estimated Transaction Costs | ~$60,000,000
Ashford Co-Investment | $60,000,000
Management Rollover Equity | $21,500,000
Company Cash at Closing | $90,000,000
Total Sources | ~$920,000,000 | Total Uses | ~$1,040,000,000
Defined Term | Definition / Reference
"Aggregate Merger Consideration" | $980,000,000, equal to $15.95 per share of Company common stock on a fully diluted basis
"Ashford" | Ashford Growth Partners LP, a Delaware limited partnership
"Ashford Co-Investment" | $60,000,000 co-investment by Ashford pursuant to the Co-Investment Agreement (Section 2.1(b))
"Closing" | As defined in the Merger Agreement
"Closing Date" | Estimated June 30, 2025, or such other date as the Closing occurs
"Co-Investment Agreement" | Co-Investment Agreement dated March 27, 2025, between Parent and Ashford
"Commitment Amount" or "Equity Contribution" | $340,000,000 (Section 2.1)
"Company" | Pennfield Holdings, Inc., a Delaware corporation
"Company Cash" | Approximately $90,000,000 of cash on the Company's balance sheet available at Closing (Section 2.2)
"Debt Commitment Letter" | Commitment letter dated March 24, 2025, from Falconer and Dunmore
"Debt Financing" | $490,000,000 Senior Secured Term Loan B and $150,000,000 Senior Secured Revolving Credit Facility
"DGCL" | Delaware General Corporation Law
"Dunmore" | Dunmore Capital Markets LLC
"Falconer" | Falconer National Bank, N.A.
"Funding Account" | Account designated by Merger Sub for receipt of the Equity Contribution (Section 2.3)
"HCP" | Harrowgate Capital Partners LLC, a Delaware LLC and the investment manager of Parent
"HPE IV GP" | Harrowgate Capital Partners IV GP LLC, a Delaware LLC and the general partner of Parent
"Letter" | This equity commitment letter
"Limited Guarantee" | Limited guarantee by Parent in favor of the Company (Section 5.1)
"Management Rollover Participants" | Catherine Langford, Derek Simmons, and Maxwell Dunn
"Marketing Period" | The 15-business-day period following execution of the Merger Agreement (Section 7.5)
"Merger" | The reverse triangular merger of Merger Sub with and into the Company
"Merger Agreement" | Agreement and Plan of Merger among Parent, Merger Sub, and the Company
"Merger Sub" | Pinnacle Merger Sub, Inc., a Delaware corporation
"Non-Recourse Parties" | As defined in Section 8.9
"Outside Date" | September 30, 2025 (or as extended) (Section 4.1(c))
"Parent" | Harrowgate Private Equity Fund IV LP, a Delaware limited partnership
"Parent Direct Contribution" | $258,500,000 from Parent's own capital (Section 2.1(a))
"Permitted Assignee" | As defined in Section 7.2
"Reverse Termination Fee" | $58,800,000 (6.0% of Aggregate Merger Consideration) (Section 5.3)
"Rollover Agreement" | Rollover agreement with Management Rollover Participants
"Rollover Contribution" | $21,500,000 aggregate management rollover equity (Section 2.1(c))
"R&W Insurance Policy" | Representations and warranties insurance policy issued by Meridian Specialty Insurance Company (Section 9(g))
"Termination Fee" | $34,300,000 (3.5% of Aggregate Merger Consideration)
Source | Amount ($) | % of Total
Senior Secured Term Loan B (Falconer / Dunmore) | $490,000,000 | 47.1%
HPE Fund IV Equity (net of co-invest and rollover) | $258,500,000 | 24.9%
Ashford Growth Partners LP Co-Investment | $60,000,000 | 5.8%
Management Rollover Equity | $21,500,000 | 2.1%
Pennfield Holdings, Inc. — Cash on Balance Sheet | $90,000,000 | 8.7%
Senior Secured Revolving Credit Facility (undrawn) | — | —
Total Sources | $920,000,000 (plus $21,500,000 non-cash rollover) | 100.0%
Use | Amount ($) | % of Total
Aggregate Merger Consideration ($15.95 per share x 61,450,000 fully diluted shares) | $980,000,000 | 94.2%
Less: Management Rollover Equity (non-cash) | ($21,500,000) | (2.1%)
Net Cash Merger Consideration | $958,500,000 | 92.2%
Estimated Transaction Fees and Expenses | ~$60,000,000 | ~5.8%
— Debt financing fees and OID | ~$22,000,000
— Legal fees (all parties) | ~$14,000,000
— Advisory and investment banking fees | ~$12,000,000
— R&W insurance premium | ~$4,500,000
— Filing fees, regulatory fees, and other costs | ~$3,500,000
— Escrow agent and paying agent fees | ~$500,000
— Miscellaneous | ~$3,500,000
Total Uses | ~$1,018,500,000 | 100.0%
Field | Details
Bank Name | [To be provided]
Bank Address | [To be provided]
ABA Routing Number | [To be provided]
Account Name | Pinnacle Merger Sub, Inc. — Merger Funding Account
Account Number | [To be provided]
SWIFT Code (if applicable) | [To be provided]
Reference | Pennfield Holdings Merger — Equity Contribution
Field | Details
Escrow Agent | Grandview Trust Company, N.A.
Bank Address | [To be provided]
ABA Routing Number | [To be provided]
Account Name | Pennfield Holdings Merger — Termination Fee Escrow
Account Number | [To be provided]
Escrow Amount | $34,300,000
Reference | Escrow Agreement dated April 7, 2025
Field | Details
Paying Agent | Marlowe Asset Management Stock Transfer, Inc.
Bank Address | [To be provided]
ABA Routing Number | [To be provided]
Account Name | Pennfield Holdings Merger — Paying Agent Trust Account
Account Number | [To be provided]
Reference | Merger Consideration Disbursement

CONFIDENTIAL

SECTION 1: RECITALS AND BACKGROUND

SECTION 2: COMMITMENT

SECTION 3: CONDITIONS TO FUNDING

SECTION 4: TERMINATION

SECTION 5: ENFORCEMENT

SECTION 6: REPRESENTATIONS AND WARRANTIES OF PARENT

SECTION 7: COVENANTS OF PARENT

SECTION 8: MISCELLANEOUS PROVISIONS

SECTION 9: RELATIONSHIP TO OTHER TRANSACTION DOCUMENTS

SECTION 10: DEFINED TERMS

HARROWGATE PRIVATE EQUITY FUND IV LP

ACKNOWLEDGED AND AGREED:

PINNACLE MERGER SUB, INC.

ACKNOWLEDGED AS THIRD-PARTY BENEFICIARY:

PENNFIELD HOLDINGS, INC.

SCHEDULE A

SOURCES AND USES SUMMARY

SCHEDULE B

WIRE TRANSFER INSTRUCTIONS

Record

Parties

Dates

Amounts