Elaine,
I hope you are well. Following up on our prior exchanges of January 26 and February 7, I am writing on behalf of our client, Briarwood Family Office LLC ("BFO"), in connection with BFO's proposed $75 million limited partnership commitment to Meridian Peak Capital Partners Fund IV, L.P. ("Fund IV").
Attached for your review is the first complete draft of the Side Letter by and among Meridian Peak Capital Partners Fund IV, L.P., Meridian Peak Capital Partners GP IV LLC, and Briarwood Family Office LLC, dated February 28, 2024.
A few framing notes on the draft:
The side letter is governed by the laws of the State of Delaware, consistent with the Fund IV Limited Partnership Agreement dated December 20, 2023. The draft incorporates the points discussed and aligned upon in the revised term sheet we transmitted on February 21, 2024, as well as positions reflected in the GP's markup of the initial term sheet received on February 14, 2024.
The draft addresses the following key provisions, among others:
- **Most Favored Nation Rights** — including an MFN threshold of $50 million in commitments, an anchor investor carve-out at $200 million, and a 20 business day election period; - **Excuse/Exclusion Rights** — covering cannabis-related assets, gaming/casino properties, sanctioned jurisdictions, and ERISA plan asset investments, with a 15 business day excuse election period following receipt of the applicable investment notice; - **Management Fee Reduction** — 1.50% on committed capital during the investment period and 1.25% on invested capital thereafter; - **Co-Investment Rights** — on transactions exceeding $100 million in equity, at no management fee and no carried interest; - **Enhanced Reporting** — quarterly reporting within 45 days, annual audited financials within 90 days, and annual ESG reporting; - **Key Person Enhancement** — 90-day suspension of the investment period upon the departure of either Conrad J. Ellsworth or Priya Narayan; - **Transfer Rights** — transfers to Hargrove family entities without GP consent; - **Confidentiality Carve-Outs**; - **Accelerated K-1 Delivery** — within 75 days following fiscal year-end; and - **Placement Agent Fee Offset** — 100% offset against management fees.
I would draw your attention to certain provisions that remain in brackets pending further discussion and GP agreement. In particular, the excuse/exclusion cap is currently bracketed at [15%/25%] of BFO's aggregate commitment, and we have similarly bracketed other points where the parties' positions have not yet fully converged. We would welcome your focused attention on these items as you work through the draft.
We would appreciate receiving the GP's markup and comments at Ashford Crane's earliest convenience. We are happy to discuss any questions or to schedule a call among the teams if that would be helpful in advancing the negotiation. Given the Fund IV timeline, BFO is hopeful that the parties can resolve the remaining open points expeditiously.
Please do not hesitate to reach out with any questions in the interim.
Best regards,
**Theresa Kim** Calderwood & Harkness LLP 425 Lexington Avenue New York, NY 10017 T: (212) 558-4200 E: tkim@calderwoodharkness.com
**Attachment:** First Draft Side Letter — Briarwood Family Office LLC / Meridian Peak Capital Partners Fund IV, L.P. (.docx)
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