1026-00001 · Briarwood Family Office LLC · Side-Letter Negotiation

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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, NY 10017

March 22, 2024

Matter No.: 1026-00001

MEMORANDUM

TO:

Julian R. Hargrove, Managing Director & Chief Investment Officer, Briarwood Family Office LLC

Sandra M. Whitfield, General Counsel, Briarwood Family Office LLC

Derek T. Calloway, Director of External Investments, Briarwood Family Office LLC

FROM:

Pamela Cross, Partner, Funds & Asset Management, Calderwood & Harkness LLP

Theresa Kim, Senior Associate, Funds & Asset Management, Calderwood & Harkness LLP

RE:

Remaining Open Points — Side Letter to Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P.

PRIVILEGE LEGEND: This memorandum is a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified above. It contains legal analysis and strategic recommendations that are protected by the attorney-client privilege and the work product doctrine. This memorandum should not be distributed, forwarded, or disclosed to any person or entity without prior written authorization from Calderwood & Harkness LLP. Inadvertent disclosure does not constitute a waiver of any applicable privilege.

I. Executive Summary

The purpose of this memorandum is to summarize the three remaining bracketed (open) points in the side-letter negotiation between Briarwood Family Office LLC ("BFO") and Meridian Peak Capital Partners GP IV LLC (the "GP") / Meridian Peak Capital Partners Fund IV, L.P. ("Fund IV" or the "Fund"), following our receipt on March 18, 2024 of the second GP markup of the side letter prepared and transmitted by Ashford Crane & Hewitt LLP ("Ashford Crane"), counsel to Meridian Peak Capital Advisors LLC ("Meridian Peak") and the GP.

By way of context, Calderwood & Harkness LLP ("C&H") transmitted the third draft of the side letter to Ashford Crane on March 14, 2024, incorporating the outcomes agreed upon during the four-party conference call held on March 11, 2024. Ashford Crane returned the second GP markup on March 18, 2024 with three remaining bracketed points, reflecting the GP's final positions on each. We have reviewed and analyzed the second GP markup in detail and provide our assessment and recommendations below.

The side letter is governed by Delaware law, consistent with the governing law provision of the Fund IV Limited Partnership Agreement (the "LPA"). BFO's proposed commitment to Fund IV is $75,000,000, representing approximately 5.0% of the Fund's $1,500,000,000 target size and approximately 4.29% of the $1,750,000,000 hard cap as set forth in the Fund IV Private Placement Memorandum (the "PPM") dated December 15, 2023.

We are pleased to report that all other previously open points have been resolved through the course of the negotiation. The three points described in Sections IV, V, and VI of this memorandum are the sole remaining items requiring agreement before the side letter can be finalized and executed in connection with BFO's subscription to Fund IV.

Summary of Recommendations. Based on our analysis of the remaining open points, market practice, and the overall negotiation context, our recommendations are as follows:

• Open Point 1 (Excuse/Exclusion Cap): Continue to press for BFO's position of 25% of aggregate commitment ($18,750,000). This is the most substantively significant of the three remaining points and warrants continued negotiation. If the GP remains firm, our recommended fallback position is 22.5% ($16,875,000).

• Open Point 2 (MFN Summary Delivery Timing): Accept the GP's position of 20 business days following the applicable close. The practical impact on BFO is minimal, and this concession may create goodwill to support BFO's position on Open Point 1.

• Open Point 3 (K-1 Delivery Timeline): Accept the GP's position of 90 days following fiscal year-end. This represents a meaningful improvement over the LPA baseline of 120 days and is consistent with market practice for enhanced side-letter reporting provisions.

Procedural Note. We note for the record that execution of the side letter and the related subscription agreement requires approval by BFO's investment committee, which requires the affirmative vote of three of four members, with Julian R. Hargrove holding a veto right. We recommend scheduling an investment committee meeting promptly to address both the remaining negotiation points and the final investment decision in advance of the Fund IV anticipated first close of April 30, 2024.

II. Negotiation Background & Procedural History

The following is a chronological summary of the key events and milestones in the Fund IV side-letter negotiation to date. This history is provided to ensure a complete record for BFO's files and to contextualize the current status of negotiations.

January 8, 2024. BFO received the Fund IV PPM (dated December 15, 2023) and the LPA (dated December 20, 2023) from Gavin R. Lockhart, Partner and Head of Investor Relations at Meridian Peak Capital Advisors LLC. The PPM and LPA were transmitted to BFO as part of Meridian Peak's standard fundraising process and in response to BFO's expression of interest in Fund IV.

January 22, 2024. Calderwood & Harkness's engagement was opened on behalf of BFO in connection with BFO's evaluation of and potential investment in Fund IV. A conflict check was conducted and cleared on the same date. C&H confirmed that it does not represent Meridian Peak, the GP, Fund IV, or any of their affiliates in any matter, and that no conflicts exist that would impair C&H's ability to represent BFO in this engagement.

January 24, 2024. The engagement letter between C&H and BFO was executed, formalizing the scope of the representation to include review and analysis of Fund IV documentation, negotiation of a side letter to the LPA, and preparation and review of subscription documentation.

January 26, 2024. C&H received the complete Fund IV document suite from Ashford Crane & Hewitt LLP. The Ashford Crane team is led by Harrison K. Drummond, Partner, and Elaine C. Woodbury, Senior Associate, both of whom are members of Ashford Crane's fund formation practice. The document suite included the LPA, PPM, form subscription agreement, form investor questionnaire, and the GP's standard form side letter.

February 2, 2024. C&H delivered to BFO a comprehensive LPA review memorandum identifying key terms, investor protections, and areas of concern, together with a summary of the PPM's material disclosure items. These documents formed the basis for BFO's internal evaluation and for the development of BFO's side-letter negotiation strategy.

February 5, 2024. BFO and C&H conducted an internal strategy session during which BFO's investment team (Hargrove, Whitfield, Calloway) aligned on the priorities and parameters for the side-letter negotiation. C&H also prepared and delivered an MFN Provision Comparison Matrix benchmarking BFO's proposed terms against comparable side letters obtained by similarly situated investors in recent large-cap real estate fund closings.

February 7, 2024. C&H delivered to Ashford Crane an initial side-letter term sheet setting forth BFO's proposed terms across twelve categories, including MFN rights, excuse/exclusion rights, management fee reduction, co-investment rights, enhanced reporting, key person provisions, transfer rights, confidentiality carve-outs, placement agent fee offset, and K-1 delivery.

February 14, 2024. Ashford Crane returned the GP's markup of the term sheet, reflecting the GP's initial positions on each of BFO's proposed terms. The GP accepted a number of BFO's proposals in principle (including co-investment rights and confidentiality carve-outs) and provided counterproposals on several others.

February 21, 2024. C&H transmitted a revised term sheet to Ashford Crane reflecting BFO's responses to the GP's counterproposals and narrowing the list of outstanding items.

February 28, 2024. C&H transmitted the first full draft side letter to Ashford Crane, converting the agreed-upon and remaining-to-be-negotiated term sheet provisions into a fully drafted agreement.

March 4, 2024. Ashford Crane returned the first GP markup of the side letter. The GP markup reflected agreement on a number of provisions but maintained several areas of disagreement, including the scope of MFN carve-outs, the excuse/exclusion cap, management fee reduction levels, and the key person provision.

March 7, 2024. C&H transmitted the second draft side letter to Ashford Crane, maintaining BFO's positions on MFN scope and the excuse cap at 25%, and incorporating revised language on management fee reductions reflecting the parties' evolving consensus.

March 11, 2024. A four-party conference call was held among C&H (Pamela Cross, Theresa Kim), BFO (Sandra Whitfield, Derek Calloway), Ashford Crane (Harrison Drummond, Elaine Woodbury), and Meridian Peak (Gavin Lockhart, Kenneth Fujimoto). The call lasted approximately 90 minutes and resulted in the resolution of several key outstanding issues. The principal outcomes of the call were as follows:

• Key Person Provision (Section 7): The GP accepted BFO's proposal that the departure of either Conrad J. Ellsworth or Priya Narayan would trigger a 90-day suspension of the investment period, during which BFO may elect to cease participation in future capital calls. This represented a meaningful concession by the GP, which had initially proposed that only the departure of Mr. Ellsworth (alone) would trigger the key person provision.

• MFN Anchor Investor Carve-Out (Section 2): The parties confirmed that the MFN carve-out for anchor investors would apply to limited partners committing $200,000,000 or more, representing 13.33% of the Fund's $1,500,000,000 target size.

• Excuse/Exclusion Cap (Section 3): The excuse cap remained disputed. The GP indicated a willingness to move from its initial position of 15% to 20%, but characterized 20% as its "final position." BFO maintained its position at 25%.

• Management Fee Reduction (Section 4): The parties reached final agreement on the management fee schedule, with a reduction to 1.50% per annum on committed capital during the investment period and 1.25% per annum on invested capital post-investment period.

March 14, 2024. C&H transmitted the third draft side letter to Ashford Crane, incorporating the outcomes of the March 11 conference call and reflecting BFO's positions on the three remaining bracketed points (excuse cap, MFN summary delivery timing, and K-1 delivery timeline).

March 18, 2024. Ashford Crane returned the second GP markup of the third draft side letter. The markup contains three remaining bracketed points reflecting the GP's final positions on each. All other provisions are now agreed. The three open points are analyzed in detail in Sections IV, V, and VI of this memorandum.

III. Summary of Resolved Provisions

For the convenience of the BFO team and to provide a complete record, we briefly summarize below the provisions of the side letter that have been fully agreed between the parties and are no longer in dispute. These provisions are reflected in the current draft side letter (the third draft, as marked up by Ashford Crane on March 18, 2024) without brackets or other indicators of disagreement.

A. Most Favored Nation (MFN) Rights — Section 2 of Side Letter

BFO is entitled to elect any economic or governance term granted by the GP or the Fund to any other limited partner committing $50,000,000 or more to Fund IV. The MFN right is subject to the following agreed-upon carve-outs:

(i) Terms granted to Anchor Investors committing $200,000,000 or more, representing 13.33% of the Fund IV target size, are excluded from the MFN pool;

(ii) Regulatory accommodations provided to investors subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), tax-exempt entities, or governmental plan investors are excluded, to the extent such accommodations are required by applicable law or regulation;

(iii) Terms made available to affiliates of the GP or Meridian Peak are excluded.

The GP has agreed to deliver a redacted summary of all material side-letter terms to BFO within a specified number of business days of the applicable close at which BFO is admitted (the timing of this delivery is Open Point 2, discussed in Section V below). BFO's MFN election period has been agreed at 20 business days following receipt of the summary, which period is no longer in dispute.

B. Excuse/Exclusion Rights — Section 3 of Side Letter

BFO may elect to be excused from investments involving any of the following categories:

(a) Cannabis-related assets, including any investment in a portfolio company or asset whose primary business involves the cultivation, processing, distribution, or sale of cannabis or cannabis-derived products;

(b) Gaming or casino properties, including any investment in a portfolio company or asset whose primary business involves the operation of a casino, gaming facility, or related gaming enterprise;

(c) Investments in jurisdictions subject to comprehensive sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"); and

(d) Any investment that would cause BFO or its beneficial owners to be treated as holding "plan assets" within the meaning of the regulations promulgated under Section 3(42) of ERISA.

The excuse right is exercisable by BFO through written notice delivered to the GP within 15 business days of BFO's receipt of a capital call notice identifying the proposed investment that triggers the excuse right. An excused investor's unfunded commitment is reduced dollar-for-dollar by the amount of the excused capital call. The aggregate cap on excused investments — i.e., the maximum cumulative dollar amount of investments from which BFO may be excused — remains in dispute and is addressed as Open Point 1 in Section IV below.

C. Management Fee Reduction — Section 4 of Side Letter

The parties have agreed to a reduced management fee schedule for BFO as follows:

• During the Investment Period: 1.50% per annum calculated on BFO's aggregate committed capital, reduced from the standard LPA rate of 1.75% per annum. This represents an annual fee savings of $187,500 ($75,000,000 × 0.25%) and a cumulative savings of approximately $750,000 over the anticipated four-year investment period.

• Post-Investment Period: 1.25% per annum calculated on BFO's share of invested capital (net invested capital), reduced from the standard LPA rate of 1.50% per annum. The annual savings during the post-investment period will depend on the amount of capital deployed and the pace of realizations, but the 25-basis-point reduction is consistent with the fee break obtained during the investment period.

This management fee reduction is consistent with the fee reductions typically available to limited partners committing in the $50,000,000 to $100,000,000 range in comparable institutional real estate funds.

D. Placement Agent Fee Offset — Section 11 of Side Letter

The parties have agreed that 100% of any placement agent fee paid to Pinnacle Capital Markets LLC in connection with BFO's subscription to Fund IV will be offset against management fees otherwise payable by BFO. Based on the placement agent fee schedule disclosed in the PPM, the applicable placement agent fee on BFO's $75,000,000 commitment is 1.0%, or $750,000. This amount will be credited against management fees payable by BFO on a pro rata basis over the first eight quarters of the investment period, resulting in a quarterly offset of $93,750.

E. Co-Investment Rights — Section 5 of Side Letter

BFO has been granted the right to participate on a pro rata basis in co-investment opportunities for Fund IV portfolio investments where the total equity required exceeds $100,000,000. Co-investments will be offered at no management fee and no carried interest, subject to BFO's pro rata share based on its commitment relative to the aggregate commitments of all limited partners. Co-investment opportunities will be offered to BFO in writing and BFO will have 10 business days to accept or decline. BFO's election to decline a co-investment opportunity will not affect its rights with respect to future co-investment opportunities.

F. Enhanced Reporting — Section 6 of Side Letter

The GP has agreed to provide BFO with the following enhanced reporting:

• Quarterly Portfolio-Level Reports: Detailed quarterly reports on a portfolio-level basis, including property-level financial summaries, occupancy data, valuation estimates, and capital deployment metrics, to be delivered within 45 days following the end of each fiscal quarter.

• Audited Annual Financial Statements: Audited annual financial statements of the Fund, prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and audited by Brockton Marsh & Associates LLP, to be delivered within 90 days following the end of each fiscal year.

• Annual ESG Reporting: An annual environmental, social, and governance ("ESG") report covering the Fund's portfolio, including carbon emissions data, diversity and inclusion metrics, and governance practices, to be delivered concurrently with the audited annual financial statements.

G. Key Person Enhancement — Section 7 of Side Letter

This provision was resolved during the March 11, 2024 conference call. The agreed terms provide that the departure (whether by death, disability, resignation, termination, or material reduction of time commitment below 75% of working time) of either Conrad J. Ellsworth, Chief Investment Officer of Meridian Peak, or Priya Narayan, Senior Managing Director and Head of Acquisitions of Meridian Peak, will trigger a 90-day suspension of the investment period. During the suspension period, the GP will not issue any new capital calls (other than for expenses, liabilities, and follow-on investments previously approved), and BFO may elect, by written notice delivered prior to the expiration of the suspension period, to cease participation in future capital calls for the remainder of the Fund's term.

H. Transfer Rights — Section 8 of Side Letter

BFO may transfer all or any portion of its limited partnership interest in Fund IV to any entity controlled by, or under common control with, members of the Hargrove family (including trusts, family limited partnerships, and family limited liability companies established for the benefit of Hargrove family members) without the prior written consent of the GP, subject to (i) compliance with applicable federal and state securities laws, (ii) receipt by the GP of a legal opinion, in form and substance reasonably satisfactory to the GP, regarding the availability of an exemption from registration under the Securities Act of 1933, as amended, and (iii) confirmation that the transfer will not cause adverse tax consequences to the Fund or the other limited partners.

I. Confidentiality Carve-Outs — Section 9 of Side Letter

The standard confidentiality provisions of the LPA are modified to permit BFO to disclose confidential information regarding the Fund, BFO's investment therein, and the terms of the side letter to the following categories of recipients, subject to such recipients being bound by obligations of confidentiality:

(a) BFO's tax, legal, and accounting advisors (including Calderwood & Harkness LLP and BFO's independent auditors);

(b) Members of the Hargrove family and their personal legal, tax, and financial advisors;

(c) Regulatory authorities with jurisdiction over BFO or its principals, to the extent disclosure is required by applicable law, regulation, or valid legal process; and

(d) Any prospective transferee of BFO's limited partnership interest, to the extent reasonably necessary to evaluate the proposed transfer.

J. Carried Interest — No Modification

BFO did not propose, and the parties did not negotiate, any modification to the carried interest provisions set forth in the LPA. The standard carried interest terms apply to BFO's investment: 20% carried interest over an 8% per annum preferred return on contributed capital, calculated on a whole-fund European waterfall basis as set forth in Article VIII of the LPA.

IV. Open Point 1: Excuse/Exclusion Cap

A. Issue Description

The first and most significant remaining open point concerns the aggregate cap on the dollar amount of investments from which BFO may elect to be excused under Section 3 of the side letter. As noted in Section III.B above, BFO has negotiated the right to be excused from investments falling within four defined categories (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). The excuse cap limits the total cumulative amount of investments from which BFO may exercise its excuse right, expressed as a percentage of BFO's aggregate $75,000,000 commitment to Fund IV. Once the cap is reached, BFO would be required to participate in subsequent capital calls even if the underlying investment falls within one of the defined excuse categories (or, alternatively, BFO could default on such capital calls, which would trigger the default remedies set forth in Article VI of the LPA).

The excuse cap is a standard feature in side letters granting excuse rights, and its purpose is to balance the investor's need for flexibility against the GP's need for certainty regarding capital deployment. The parties have agreed on all aspects of the excuse/exclusion provision except the level of this cap.

B. BFO's Position

BFO has proposed, and has maintained throughout the negotiation, an aggregate excuse cap of 25% of BFO's aggregate commitment, which equates to $18,750,000 ($75,000,000 × 25%).

BFO's rationale for the 25% cap is as follows:

• Breadth of Excuse Categories. BFO's excuse right covers four distinct investment categories: cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets. Given the breadth of these categories, a cap set too low could be exhausted by a relatively small number of investments early in the Fund's life, effectively rendering the excuse right illusory for the remainder of the Fund's investment period.

• Fund IV Investment Strategy. Fund IV pursues a value-add and opportunistic strategy in North American commercial real estate, which the PPM describes as including mixed-use developments, urban redevelopment projects, and hospitality-adjacent properties. Several of these sub-strategies could involve investments with gaming, casino, or cannabis-adjacent components, particularly in jurisdictions where cannabis has been legalized for recreational or medical use. The breadth of the Fund's stated investment strategy increases the likelihood that excuse rights will be triggered and, accordingly, increases the importance of a sufficiently high cap.

• Family Office Policy Constraints. The Hargrove family has adopted investment policy guidelines that restrict exposure to cannabis and gaming assets. These guidelines are not merely preferential but reflect deeply held family values and reputational considerations. A low excuse cap could force BFO to participate in investments that are inconsistent with these guidelines, which would be contrary to the fundamental purpose of the excuse provision.

• Preservation of Meaningful Excuse Right. BFO's position is that the excuse right must be meaningful in practice, not merely in form. A cap of 25% provides a reasonable buffer to ensure that BFO can exercise its excuse right across multiple investments over the Fund's investment period without risk of exhaustion.

C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)

The GP initially proposed an aggregate excuse cap of 15% of BFO's aggregate commitment ($75,000,000 × 15% = $11,250,000). In the second GP markup received on March 18, 2024, the GP moved to 20% of aggregate commitment, equating to $15,000,000 ($75,000,000 × 20%). The GP has characterized this as its "final position," although we note that such characterizations are common in negotiations and do not necessarily preclude further movement.

The GP's rationale, as expressed by Ashford Crane during the negotiation, includes:

• Portfolio Construction Concerns. The GP has expressed concern that a high excuse cap could undermine the GP's ability to construct a diversified portfolio and execute its stated investment strategy. If a meaningful percentage of a limited partner's commitment is subject to excuse, the GP may face a shortfall in available capital for certain investments, requiring it to either scale down the investment or seek additional capital from other limited partners.

• J-Curve Impact. The GP has noted that excused commitments can exacerbate the J-curve effect for the excused investor, as excused amounts reduce the investor's overall exposure to early investments while the investor continues to bear its share of management fees and fund expenses calculated on committed capital (until the excuse right is exercised and unfunded commitments are reduced accordingly).

• Operational Burden. The GP has cited the operational burden of managing excused commitments, including the need to track and administer excuse elections, recalculate capital accounts, and adjust subsequent capital call amounts. These administrative costs are borne by the Fund as a whole and increase with the number and size of excuse elections.

• Parity Among Limited Partners. The GP has expressed a desire to maintain relative parity among limited partners with respect to excuse caps. While the GP has acknowledged that BFO's excuse categories are reasonable, it has indicated that granting a 25% cap to BFO could create pressure to offer similar or higher caps to other limited partners, which could cumulatively impair the Fund's capital deployment flexibility.

D. Analysis & Recommendation

The following considerations inform our analysis and recommendation with respect to Open Point 1:

Movement to Date. The GP has moved 5 percentage points from its original position (15% to 20%); BFO has maintained its 25% position throughout. The current gap between the parties is 5 percentage points, representing a dollar difference of $3,750,000 ($18,750,000 under BFO's proposal vs. $15,000,000 under the GP's current proposal).

Practical Significance. Given Fund IV's value-add and opportunistic strategy in North American commercial real estate, the likelihood of multiple investments triggering the excuse categories — particularly cannabis and gaming/casino — is meaningful. The PPM does not exclude mixed-use developments with casino or gaming components, nor does it restrict the Fund from investing in properties with cannabis-related tenants or co-located cannabis operations. We reviewed the track record of Meridian Peak's prior funds (Fund II and Fund III) and identified at least two portfolio investments in Fund III that included gaming-related components (the Tahoe Summit Resort development and the Atlantic City Marina District redevelopment), which together represented approximately 14% of Fund III's total invested capital. If Fund IV pursues a similar allocation, a 20% cap could be reached relatively quickly, potentially within the first half of the investment period.

Market Comparison. Based on C&H's review of comparable side letters, as reflected in the MFN Provision Comparison Matrix delivered to BFO on February 5, 2024, excuse caps for similarly situated limited partners (family offices and institutional investors committing in the $50,000,000 to $100,000,000 range) typically range from 15% to 30%, with 25% falling within the market median. A 20% cap, while within the range, is at the lower end of the distribution for investors of BFO's size and profile. Notably, several of the comparable side letters reviewed by C&H contained excuse caps of 25% or higher for investors with similarly broad excuse categories.

Overall Negotiation Context. BFO has obtained a highly favorable package of side-letter terms, including meaningful management fee reductions, an enhanced key person provision, co-investment rights, and a 100% placement agent fee offset. The GP has made meaningful concessions on several of these points. In this context, BFO should consider whether the excuse cap is the appropriate point on which to seek maximum advantage, or whether the overall package justifies some flexibility.

Recommendation. We recommend that BFO continue to press for 25% ($18,750,000). The excuse cap is the most substantively significant of the three remaining open points, and the difference between 20% and 25% — $3,750,000 in cumulative excuse capacity — is meaningful given the breadth of BFO's excuse categories and the Fund's investment strategy.

If the GP remains firm at 20% and will not move further, our recommended fallback position is 22.5% ($75,000,000 × 22.5% = $16,875,000). A 22.5% cap represents a reasonable compromise that preserves meaningful excuse capacity while acknowledging the GP's concerns regarding portfolio construction and parity. However, we do not recommend that BFO accept 20% without a further concession from the GP on another point — for example, an expansion of the excuse categories or a commitment by the GP to provide earlier notice of investments that may trigger excuse rights.

Note Regarding March 11 Conference Call. During the March 11 conference call, GP's counsel (Harrison Drummond) indicated that the GP was willing to move to 20% but characterized it as their "final position." While this characterization should be taken seriously, it is not uncommon for parties to move from stated "final positions" when presented with a reasonable compromise proposal. We believe a counterproposal of 22.5% would be well-received as a good-faith effort to bridge the gap.

V. Open Point 2: MFN Summary Delivery Timing

A. Issue Description

The second remaining open point relates to the timing of the GP's obligation to deliver a redacted summary of all material side-letter terms granted to other limited partners, which serves as the trigger for BFO's exercise of its most favored nation election right under Section 2 of the side letter. Specifically, the open issue is the number of business days following the applicable close at which BFO is admitted by which the GP must deliver this redacted summary.

The MFN summary is an essential component of the MFN right, as it provides BFO with the information necessary to identify and evaluate any economic or governance terms that have been granted to other limited partners and that BFO may wish to elect. Without timely delivery of the summary, BFO's MFN election right would be effectively impaired.

B. BFO's Position

BFO proposed that the GP deliver the redacted MFN summary within 15 business days after the applicable close at which BFO is admitted as a limited partner. BFO's rationale is that a shorter delivery period ensures that BFO receives MFN information promptly, allowing BFO to evaluate and act upon the information while the terms are still fresh and before subsequent closes or amendments may complicate the analysis.

C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)

The GP proposes that the redacted MFN summary be delivered within 20 business days after the applicable close. The GP's rationale, as communicated by Ashford Crane, is as follows:

• Administrative Burden. The GP has represented that the process of compiling, redacting, and reviewing all side-letter terms across multiple limited partners is time-intensive, particularly in connection with a large closing involving numerous investors. The GP must coordinate with its internal legal team, outside counsel, and the fund administrator (Granite Ledger Fund Services LLC) to ensure that the MFN summary is accurate, complete, and appropriately redacted to protect the confidentiality of other limited partners.

• Multiple Closings. Fund IV anticipates multiple closings, each of which may involve new limited partners with new side letters. The GP has indicated that a 15-business-day turnaround is not consistently achievable across all closings, particularly the first close, which is expected to involve the largest number of investors.

• Quality Control. The GP has emphasized the importance of delivering an accurate and complete MFN summary, noting that errors or omissions could give rise to disputes with limited partners regarding the scope of their MFN election rights. The additional 5 business days allows for a more thorough review process and reduces the risk of errors.

D. Analysis & Recommendation

The difference between BFO's position (15 business days) and the GP's position (20 business days) is 5 business days, or approximately one calendar week. We have carefully evaluated the practical implications of this difference and conclude that it is of limited significance to BFO for the following reasons:

• MFN Election Period Unaffected. BFO's MFN election period of 20 business days runs from the date of BFO's receipt of the MFN summary, not from the date of the applicable close. Accordingly, regardless of whether the summary is delivered on business day 15 or business day 20, BFO will have the full 20-business-day election period to review the summary, consult with C&H, and determine which terms, if any, to elect.

• No Loss of Substantive Rights. A 5-business-day delay in receiving the MFN summary does not affect the substance of BFO's MFN right. BFO will receive the same information and will have the same election period regardless of the delivery timing.

• Goodwill Considerations. Conceding this point may generate goodwill with the GP and Ashford Crane, which could be useful in pressing for BFO's position on Open Point 1 (excuse cap).

Recommendation. We recommend that BFO accept the GP's position of 20 business days following the applicable close. This is a low-priority point that is unlikely to affect BFO's substantive MFN rights, and conceding it cleanly positions BFO to focus its remaining negotiation capital on the excuse cap issue.

VI. Open Point 3: K-1 Delivery Timeline

A. Issue Description

The third and final remaining open point concerns the target deadline by which the Fund will use commercially reasonable efforts to deliver IRS Schedule K-1s to BFO following the end of each fiscal year. The K-1 delivery timeline is set forth in Section 10 of the side letter and supplements the standard K-1 delivery provisions in the LPA.

The LPA provides that the Fund will use commercially reasonable efforts to deliver K-1s within 120 days following the end of each fiscal year. Both BFO and the GP have agreed that an accelerated timeline should be included in the side letter; the only remaining dispute is the specific number of days.

B. BFO's Position

BFO proposed that the Fund use commercially reasonable efforts to deliver K-1s within 75 days of the end of each fiscal year (i.e., by approximately March 16 for a December 31 fiscal year-end).

BFO's rationale is grounded in the Hargrove family's internal tax reporting and filing obligations. BFO serves as the primary investment vehicle for the Hargrove family, and timely receipt of K-1s is essential to the family's ability to prepare and file accurate federal and state income tax returns, estimate quarterly tax obligations, and coordinate multi-entity tax planning across the Hargrove family's various investment vehicles and trusts. The standard 120-day K-1 delivery timeline set forth in the LPA has historically resulted in late receipt of K-1s, which has in turn required the Hargrove family to file extensions and incur additional accounting costs.

C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)

The GP proposes that the Fund use commercially reasonable efforts to deliver K-1s within 90 days of the end of each fiscal year (i.e., by approximately March 31 for a December 31 fiscal year-end). The GP's rationale, as communicated by Ashford Crane, includes the following considerations:

• Fund Structural Complexity. Fund IV's investment structure involves multiple special purpose vehicles ("SPVs") and co-investment vehicles, each of which may hold separate portfolio investments and generate separate tax items. The aggregation and allocation of these items across the Fund's limited partners requires significant coordination among the GP, the fund administrator (Granite Ledger Fund Services LLC), and the fund auditor (Brockton Marsh & Associates LLP, Audit Partner: Neil A. Strickland).

• Audit Coordination. The preparation of K-1s requires the completion, or near-completion, of the Fund's annual audit. Brockton Marsh has indicated to the GP that a 75-day K-1 delivery target would require an accelerated audit timeline that may not be achievable in all years, particularly in early fund years when new investment structures are being established and when the audit scope may be broader.

• Administrator Capacity. Granite Ledger has represented to the GP that a 90-day K-1 delivery target is achievable but that a 75-day target would require significant additional resources and could result in a higher incidence of estimated or amended K-1s, which could create complications for limited partners.

D. Analysis & Recommendation

The following considerations inform our analysis:

• Improvement Over LPA Baseline. The GP's proposed 90-day target represents a 30-day improvement over the standard 120-day LPA provision. BFO's proposed 75-day target would represent a 45-day improvement. Both positions are meaningful improvements over the LPA standard.

• "Commercially Reasonable Efforts" Qualifier. Both the BFO proposal and the GP proposal are qualified by a "commercially reasonable efforts" standard. This is an important distinction: the K-1 delivery timeline in the side letter is a target, not a hard deadline. Neither 75 days nor 90 days would create a binding, enforceable obligation requiring the GP to deliver K-1s by a specific date. Rather, the GP would be required to use commercially reasonable efforts to meet the target, and a failure to deliver by the target date would not constitute a breach of the side letter provided that the GP had exercised commercially reasonable efforts.

• Market Practice. Based on C&H's experience and our review of comparable side letters, a 90-day K-1 delivery target is the market-standard enhanced provision for institutional investors and family offices. While 75-day targets are not unprecedented, they are more commonly found in side letters for very large investors (those committing $150,000,000 or more) or in fund structures with simpler tax profiles. For a fund of Fund IV's size and structural complexity, a 90-day target is reasonable and achievable.

• Practical Considerations. We understand from our discussions with BFO that the Hargrove family typically files for extensions of its federal and state income tax returns and that the 90-day K-1 delivery target (approximately March 31) would be well in advance of the extended filing deadlines. While a 75-day target would be preferable from a tax planning perspective, the 90-day target does not create a meaningful risk of delayed filings.

Recommendation. We recommend that BFO accept the GP's position of 90 days. This remains a meaningful improvement over the LPA baseline of 120 days and is consistent with market practice for enhanced side-letter reporting provisions. The "commercially reasonable efforts" standard provides additional flexibility in both directions — the GP may deliver earlier than the 90-day target in practice, and the target is not a hard deadline in any event. As with Open Point 2, conceding this point allows BFO to focus its negotiation efforts on the more significant excuse cap issue.

VII. Summary Table of Open Points

The following table summarizes the three remaining open points, the parties' respective positions, and C&H's recommendations:

As reflected above, our recommended approach is to concede on Open Points 2 and 3 while continuing to advocate for BFO's position on Open Point 1. If necessary, BFO may consider proposing a compromise of 22.5% on the excuse cap as a fallback position. We believe this approach appropriately prioritizes the most substantively significant remaining issue while demonstrating good-faith flexibility on the less consequential points.

VIII. Recommended Next Steps

Based on the foregoing analysis, we recommend the following next steps to bring the side-letter negotiation to a conclusion and facilitate BFO's timely subscription to Fund IV:

1. BFO Internal Alignment. BFO's investment committee members and key personnel — Julian R. Hargrove, Sandra M. Whitfield, and Derek T. Calloway — should review this memorandum and confirm C&H's recommendations, specifically: (a) the decision to press for 25% on the excuse cap (with a fallback to 22.5% if the GP remains firm at 20%), (b) acceptance of the GP's position on MFN summary delivery timing (20 business days), and (c) acceptance of the GP's position on K-1 delivery timeline (90 days). We are available to discuss any questions or alternative approaches at BFO's convenience. We suggest that BFO provide its instructions by no later than March 29, 2024, to ensure sufficient time to finalize the negotiation and prepare execution documents in advance of the first close.

2. Investment Committee Approval. Execution of the side letter (and the related subscription agreement for the $75,000,000 commitment) requires approval of BFO's investment committee, which requires the affirmative vote of three of four members, with Julian R. Hargrove holding a veto right. C&H recommends scheduling an investment committee meeting at the earliest practicable date to address both the remaining negotiation points and the final investment decision. We suggest targeting the week of April 1, 2024, to allow adequate time for any final negotiations and document preparation prior to the Fund IV anticipated first close of April 30, 2024. C&H can prepare a summary presentation for the investment committee if that would be helpful.

3. Communication to Ashford Crane. Upon receipt of BFO's instructions regarding the three open points, C&H will communicate BFO's final positions to Ashford Crane & Hewitt LLP (Harrison K. Drummond, Partner; Elaine C. Woodbury, Senior Associate) in a manner to be determined by BFO — either through a marked-up draft of the side letter or through a telephone call followed by a written confirmation. If the parties reach agreement on all three points, C&H will prepare a final execution-ready side letter and circulate it to Ashford Crane for confirmation. We anticipate that, assuming agreement on the three remaining points, the final side letter can be prepared for signature within 3 to 5 business days.

4. Subscription Documentation. C&H has prepared a draft subscription agreement markup and a draft investor questionnaire, both dated March 10, 2024, for BFO's review. These documents remain in draft form pending resolution of the side-letter open points and investment committee approval. Upon resolution of the open points, C&H will finalize the subscription documents for execution concurrently with the side letter. We recommend that BFO's tax counsel review the subscription agreement and investor questionnaire to confirm the accuracy of BFO's tax representations and elections. If BFO wishes, C&H can coordinate directly with BFO's tax advisors to expedite this review.

5. Timeline Sensitivity. Fund IV's anticipated first close is April 30, 2024, with a final close deadline of October 31, 2024. If BFO intends to participate in the first close — which carries certain advantages, including first-close fee discounts and priority in co-investment allocation — the side letter and subscription documents would need to be finalized and executed no later than approximately April 25, 2024, to allow sufficient time for the GP's review and countersignature process. We note that Ashford Crane has indicated informally that the GP prefers to receive all subscription materials at least five business days prior to the closing date. Accordingly, we recommend that BFO target finalization and execution of all documents by no later than April 23, 2024.

If BFO does not participate in the first close, BFO may subscribe at any subsequent closing prior to the final close deadline of October 31, 2024. However, participation in a subsequent closing would subject BFO to the equalization interest provisions set forth in Section 3.4 of the LPA, requiring BFO to pay equalization interest on capital contributions made at the first close at a rate equal to the prime rate plus 2% per annum from the date of the first close through the date of BFO's admission.

IX. Closing

Calderwood & Harkness remains available to discuss this memorandum and the recommended approach at BFO's convenience. We would be pleased to schedule a call or in-person meeting with the BFO team to address any questions, refine the negotiation strategy, or discuss alternative approaches to any of the open points.

Please do not hesitate to contact either of us directly:

Pamela Cross Partner, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue, New York, NY 10017 Direct: (212) 555-8341

Email: pcross@calderwoodharkness.com

Theresa Kim Senior Associate, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue, New York, NY 10017 Direct: (212) 555-8367

Email: tkim@calderwoodharkness.com

Matter No.: 1026-00001

We look forward to your instructions.

ATTACHMENTS

The following documents are enclosed with or referenced in this memorandum:

• Attachment A: Third Draft Side Letter to Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P. (transmitted to Ashford Crane & Hewitt LLP on March 14, 2024)

• Attachment B: Second GP Markup — Redline of Third Draft Side Letter (received from Ashford Crane & Hewitt LLP on March 18, 2024; internal redline comparison prepared by C&H on March 19, 2024)

• Attachment C: Excuse Rights Analysis Memorandum (prepared by Calderwood & Harkness LLP, dated March 6, 2024)

This memorandum is a privileged and confidential attorney-client communication. It is intended solely for the use of the addressees identified above and should not be distributed, forwarded, or disclosed to any third party without the prior written authorization of Calderwood & Harkness LLP. Unauthorized disclosure may result in a waiver of applicable privileges.

Open Point	Side Letter Section	BFO Position	GP Position (3/18 Markup)	Delta	C&H Recommendation
1. Excuse/Exclusion Cap	Section 3	25% of commitment ($18,750,000)	20% of commitment ($15,000,000)	$3,750,000 / 5 percentage points	Press for 25%; fallback to 22.5% ($16,875,000)
2. MFN Summary Delivery Timing	Section 2	15 business days post-close	20 business days post-close	5 business days	Accept GP's position (20 business days)
3. K-1 Delivery Timeline	Section 10	75 days post fiscal year-end	90 days post fiscal year-end	15 days	Accept GP's position (90 days)

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, NY 10017
March 22, 2024
Matter No.: 1026-00001
MEMORANDUM
TO:
Julian R. Hargrove, Managing Director & Chief Investment Officer, Briarwood Family Office LLC
Sandra M. Whitfield, General Counsel, Briarwood Family Office LLC
Derek T. Calloway, Director of External Investments, Briarwood Family Office LLC
FROM:
Pamela Cross, Partner, Funds & Asset Management, Calderwood & Harkness LLP
Theresa Kim, Senior Associate, Funds & Asset Management, Calderwood & Harkness LLP
RE:
Remaining Open Points — Side Letter to Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P.
PRIVILEGE LEGEND: This memorandum is a privileged and confidential attorney-client communication prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified above. It contains legal analysis and strategic recommendations that are protected by the attorney-client privilege and the work product doctrine. This memorandum should not be distributed, forwarded, or disclosed to any person or entity without prior written authorization from Calderwood & Harkness LLP. Inadvertent disclosure does not constitute a waiver of any applicable privilege.
I. Executive Summary
The purpose of this memorandum is to summarize the three remaining bracketed (open) points in the side-letter negotiation between Briarwood Family Office LLC ("BFO") and Meridian Peak Capital Partners GP IV LLC (the "GP") / Meridian Peak Capital Partners Fund IV, L.P. ("Fund IV" or the "Fund"), following our receipt on March 18, 2024 of the second GP markup of the side letter prepared and transmitted by Ashford Crane & Hewitt LLP ("Ashford Crane"), counsel to Meridian Peak Capital Advisors LLC ("Meridian Peak") and the GP.
By way of context, Calderwood & Harkness LLP ("C&H") transmitted the third draft of the side letter to Ashford Crane on March 14, 2024, incorporating the outcomes agreed upon during the four-party conference call held on March 11, 2024. Ashford Crane returned the second GP markup on March 18, 2024 with three remaining bracketed points, reflecting the GP's final positions on each. We have reviewed and analyzed the second GP markup in detail and provide our assessment and recommendations below.
The side letter is governed by Delaware law, consistent with the governing law provision of the Fund IV Limited Partnership Agreement (the "LPA"). BFO's proposed commitment to Fund IV is $75,000,000, representing approximately 5.0% of the Fund's $1,500,000,000 target size and approximately 4.29% of the $1,750,000,000 hard cap as set forth in the Fund IV Private Placement Memorandum (the "PPM") dated December 15, 2023.
We are pleased to report that all other previously open points have been resolved through the course of the negotiation. The three points described in Sections IV, V, and VI of this memorandum are the sole remaining items requiring agreement before the side letter can be finalized and executed in connection with BFO's subscription to Fund IV.
Summary of Recommendations. Based on our analysis of the remaining open points, market practice, and the overall negotiation context, our recommendations are as follows:
• Open Point 1 (Excuse/Exclusion Cap): Continue to press for BFO's position of 25% of aggregate commitment ($18,750,000). This is the most substantively significant of the three remaining points and warrants continued negotiation. If the GP remains firm, our recommended fallback position is 22.5% ($16,875,000).
• Open Point 2 (MFN Summary Delivery Timing): Accept the GP's position of 20 business days following the applicable close. The practical impact on BFO is minimal, and this concession may create goodwill to support BFO's position on Open Point 1.
• Open Point 3 (K-1 Delivery Timeline): Accept the GP's position of 90 days following fiscal year-end. This represents a meaningful improvement over the LPA baseline of 120 days and is consistent with market practice for enhanced side-letter reporting provisions.
Procedural Note. We note for the record that execution of the side letter and the related subscription agreement requires approval by BFO's investment committee, which requires the affirmative vote of three of four members, with Julian R. Hargrove holding a veto right. We recommend scheduling an investment committee meeting promptly to address both the remaining negotiation points and the final investment decision in advance of the Fund IV anticipated first close of April 30, 2024.
II. Negotiation Background & Procedural History
The following is a chronological summary of the key events and milestones in the Fund IV side-letter negotiation to date. This history is provided to ensure a complete record for BFO's files and to contextualize the current status of negotiations.
January 8, 2024. BFO received the Fund IV PPM (dated December 15, 2023) and the LPA (dated December 20, 2023) from Gavin R. Lockhart, Partner and Head of Investor Relations at Meridian Peak Capital Advisors LLC. The PPM and LPA were transmitted to BFO as part of Meridian Peak's standard fundraising process and in response to BFO's expression of interest in Fund IV.
January 22, 2024. Calderwood & Harkness's engagement was opened on behalf of BFO in connection with BFO's evaluation of and potential investment in Fund IV. A conflict check was conducted and cleared on the same date. C&H confirmed that it does not represent Meridian Peak, the GP, Fund IV, or any of their affiliates in any matter, and that no conflicts exist that would impair C&H's ability to represent BFO in this engagement.
January 24, 2024. The engagement letter between C&H and BFO was executed, formalizing the scope of the representation to include review and analysis of Fund IV documentation, negotiation of a side letter to the LPA, and preparation and review of subscription documentation.
January 26, 2024. C&H received the complete Fund IV document suite from Ashford Crane & Hewitt LLP. The Ashford Crane team is led by Harrison K. Drummond, Partner, and Elaine C. Woodbury, Senior Associate, both of whom are members of Ashford Crane's fund formation practice. The document suite included the LPA, PPM, form subscription agreement, form investor questionnaire, and the GP's standard form side letter.
February 2, 2024. C&H delivered to BFO a comprehensive LPA review memorandum identifying key terms, investor protections, and areas of concern, together with a summary of the PPM's material disclosure items. These documents formed the basis for BFO's internal evaluation and for the development of BFO's side-letter negotiation strategy.
February 5, 2024. BFO and C&H conducted an internal strategy session during which BFO's investment team (Hargrove, Whitfield, Calloway) aligned on the priorities and parameters for the side-letter negotiation. C&H also prepared and delivered an MFN Provision Comparison Matrix benchmarking BFO's proposed terms against comparable side letters obtained by similarly situated investors in recent large-cap real estate fund closings.
February 7, 2024. C&H delivered to Ashford Crane an initial side-letter term sheet setting forth BFO's proposed terms across twelve categories, including MFN rights, excuse/exclusion rights, management fee reduction, co-investment rights, enhanced reporting, key person provisions, transfer rights, confidentiality carve-outs, placement agent fee offset, and K-1 delivery.
February 14, 2024. Ashford Crane returned the GP's markup of the term sheet, reflecting the GP's initial positions on each of BFO's proposed terms. The GP accepted a number of BFO's proposals in principle (including co-investment rights and confidentiality carve-outs) and provided counterproposals on several others.
February 21, 2024. C&H transmitted a revised term sheet to Ashford Crane reflecting BFO's responses to the GP's counterproposals and narrowing the list of outstanding items.
February 28, 2024. C&H transmitted the first full draft side letter to Ashford Crane, converting the agreed-upon and remaining-to-be-negotiated term sheet provisions into a fully drafted agreement.
March 4, 2024. Ashford Crane returned the first GP markup of the side letter. The GP markup reflected agreement on a number of provisions but maintained several areas of disagreement, including the scope of MFN carve-outs, the excuse/exclusion cap, management fee reduction levels, and the key person provision.
March 7, 2024. C&H transmitted the second draft side letter to Ashford Crane, maintaining BFO's positions on MFN scope and the excuse cap at 25%, and incorporating revised language on management fee reductions reflecting the parties' evolving consensus.
March 11, 2024. A four-party conference call was held among C&H (Pamela Cross, Theresa Kim), BFO (Sandra Whitfield, Derek Calloway), Ashford Crane (Harrison Drummond, Elaine Woodbury), and Meridian Peak (Gavin Lockhart, Kenneth Fujimoto). The call lasted approximately 90 minutes and resulted in the resolution of several key outstanding issues. The principal outcomes of the call were as follows:
• Key Person Provision (Section 7): The GP accepted BFO's proposal that the departure of either Conrad J. Ellsworth or Priya Narayan would trigger a 90-day suspension of the investment period, during which BFO may elect to cease participation in future capital calls. This represented a meaningful concession by the GP, which had initially proposed that only the departure of Mr. Ellsworth (alone) would trigger the key person provision.
• MFN Anchor Investor Carve-Out (Section 2): The parties confirmed that the MFN carve-out for anchor investors would apply to limited partners committing $200,000,000 or more, representing 13.33% of the Fund's $1,500,000,000 target size.
• Excuse/Exclusion Cap (Section 3): The excuse cap remained disputed. The GP indicated a willingness to move from its initial position of 15% to 20%, but characterized 20% as its "final position." BFO maintained its position at 25%.
• Management Fee Reduction (Section 4): The parties reached final agreement on the management fee schedule, with a reduction to 1.50% per annum on committed capital during the investment period and 1.25% per annum on invested capital post-investment period.
March 14, 2024. C&H transmitted the third draft side letter to Ashford Crane, incorporating the outcomes of the March 11 conference call and reflecting BFO's positions on the three remaining bracketed points (excuse cap, MFN summary delivery timing, and K-1 delivery timeline).
March 18, 2024. Ashford Crane returned the second GP markup of the third draft side letter. The markup contains three remaining bracketed points reflecting the GP's final positions on each. All other provisions are now agreed. The three open points are analyzed in detail in Sections IV, V, and VI of this memorandum.
III. Summary of Resolved Provisions
For the convenience of the BFO team and to provide a complete record, we briefly summarize below the provisions of the side letter that have been fully agreed between the parties and are no longer in dispute. These provisions are reflected in the current draft side letter (the third draft, as marked up by Ashford Crane on March 18, 2024) without brackets or other indicators of disagreement.
A. Most Favored Nation (MFN) Rights — Section 2 of Side Letter
BFO is entitled to elect any economic or governance term granted by the GP or the Fund to any other limited partner committing $50,000,000 or more to Fund IV. The MFN right is subject to the following agreed-upon carve-outs:
(i) Terms granted to Anchor Investors committing $200,000,000 or more, representing 13.33% of the Fund IV target size, are excluded from the MFN pool;
(ii) Regulatory accommodations provided to investors subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), tax-exempt entities, or governmental plan investors are excluded, to the extent such accommodations are required by applicable law or regulation;
(iii) Terms made available to affiliates of the GP or Meridian Peak are excluded.
The GP has agreed to deliver a redacted summary of all material side-letter terms to BFO within a specified number of business days of the applicable close at which BFO is admitted (the timing of this delivery is Open Point 2, discussed in Section V below). BFO's MFN election period has been agreed at 20 business days following receipt of the summary, which period is no longer in dispute.
B. Excuse/Exclusion Rights — Section 3 of Side Letter
BFO may elect to be excused from investments involving any of the following categories:
(a) Cannabis-related assets, including any investment in a portfolio company or asset whose primary business involves the cultivation, processing, distribution, or sale of cannabis or cannabis-derived products;
(b) Gaming or casino properties, including any investment in a portfolio company or asset whose primary business involves the operation of a casino, gaming facility, or related gaming enterprise;
(c) Investments in jurisdictions subject to comprehensive sanctions administered by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"); and
(d) Any investment that would cause BFO or its beneficial owners to be treated as holding "plan assets" within the meaning of the regulations promulgated under Section 3(42) of ERISA.
The excuse right is exercisable by BFO through written notice delivered to the GP within 15 business days of BFO's receipt of a capital call notice identifying the proposed investment that triggers the excuse right. An excused investor's unfunded commitment is reduced dollar-for-dollar by the amount of the excused capital call. The aggregate cap on excused investments — i.e., the maximum cumulative dollar amount of investments from which BFO may be excused — remains in dispute and is addressed as Open Point 1 in Section IV below.
C. Management Fee Reduction — Section 4 of Side Letter
The parties have agreed to a reduced management fee schedule for BFO as follows:
• During the Investment Period: 1.50% per annum calculated on BFO's aggregate committed capital, reduced from the standard LPA rate of 1.75% per annum. This represents an annual fee savings of $187,500 ($75,000,000 × 0.25%) and a cumulative savings of approximately $750,000 over the anticipated four-year investment period.
• Post-Investment Period: 1.25% per annum calculated on BFO's share of invested capital (net invested capital), reduced from the standard LPA rate of 1.50% per annum. The annual savings during the post-investment period will depend on the amount of capital deployed and the pace of realizations, but the 25-basis-point reduction is consistent with the fee break obtained during the investment period.
This management fee reduction is consistent with the fee reductions typically available to limited partners committing in the $50,000,000 to $100,000,000 range in comparable institutional real estate funds.
D. Placement Agent Fee Offset — Section 11 of Side Letter
The parties have agreed that 100% of any placement agent fee paid to Pinnacle Capital Markets LLC in connection with BFO's subscription to Fund IV will be offset against management fees otherwise payable by BFO. Based on the placement agent fee schedule disclosed in the PPM, the applicable placement agent fee on BFO's $75,000,000 commitment is 1.0%, or $750,000. This amount will be credited against management fees payable by BFO on a pro rata basis over the first eight quarters of the investment period, resulting in a quarterly offset of $93,750.
E. Co-Investment Rights — Section 5 of Side Letter
BFO has been granted the right to participate on a pro rata basis in co-investment opportunities for Fund IV portfolio investments where the total equity required exceeds $100,000,000. Co-investments will be offered at no management fee and no carried interest, subject to BFO's pro rata share based on its commitment relative to the aggregate commitments of all limited partners. Co-investment opportunities will be offered to BFO in writing and BFO will have 10 business days to accept or decline. BFO's election to decline a co-investment opportunity will not affect its rights with respect to future co-investment opportunities.
F. Enhanced Reporting — Section 6 of Side Letter
The GP has agreed to provide BFO with the following enhanced reporting:
• Quarterly Portfolio-Level Reports: Detailed quarterly reports on a portfolio-level basis, including property-level financial summaries, occupancy data, valuation estimates, and capital deployment metrics, to be delivered within 45 days following the end of each fiscal quarter.
• Audited Annual Financial Statements: Audited annual financial statements of the Fund, prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and audited by Brockton Marsh & Associates LLP, to be delivered within 90 days following the end of each fiscal year.
• Annual ESG Reporting: An annual environmental, social, and governance ("ESG") report covering the Fund's portfolio, including carbon emissions data, diversity and inclusion metrics, and governance practices, to be delivered concurrently with the audited annual financial statements.
G. Key Person Enhancement — Section 7 of Side Letter
This provision was resolved during the March 11, 2024 conference call. The agreed terms provide that the departure (whether by death, disability, resignation, termination, or material reduction of time commitment below 75% of working time) of either Conrad J. Ellsworth, Chief Investment Officer of Meridian Peak, or Priya Narayan, Senior Managing Director and Head of Acquisitions of Meridian Peak, will trigger a 90-day suspension of the investment period. During the suspension period, the GP will not issue any new capital calls (other than for expenses, liabilities, and follow-on investments previously approved), and BFO may elect, by written notice delivered prior to the expiration of the suspension period, to cease participation in future capital calls for the remainder of the Fund's term.
H. Transfer Rights — Section 8 of Side Letter
BFO may transfer all or any portion of its limited partnership interest in Fund IV to any entity controlled by, or under common control with, members of the Hargrove family (including trusts, family limited partnerships, and family limited liability companies established for the benefit of Hargrove family members) without the prior written consent of the GP, subject to (i) compliance with applicable federal and state securities laws, (ii) receipt by the GP of a legal opinion, in form and substance reasonably satisfactory to the GP, regarding the availability of an exemption from registration under the Securities Act of 1933, as amended, and (iii) confirmation that the transfer will not cause adverse tax consequences to the Fund or the other limited partners.
I. Confidentiality Carve-Outs — Section 9 of Side Letter
The standard confidentiality provisions of the LPA are modified to permit BFO to disclose confidential information regarding the Fund, BFO's investment therein, and the terms of the side letter to the following categories of recipients, subject to such recipients being bound by obligations of confidentiality:
(a) BFO's tax, legal, and accounting advisors (including Calderwood & Harkness LLP and BFO's independent auditors);
(b) Members of the Hargrove family and their personal legal, tax, and financial advisors;
(c) Regulatory authorities with jurisdiction over BFO or its principals, to the extent disclosure is required by applicable law, regulation, or valid legal process; and
(d) Any prospective transferee of BFO's limited partnership interest, to the extent reasonably necessary to evaluate the proposed transfer.
J. Carried Interest — No Modification
BFO did not propose, and the parties did not negotiate, any modification to the carried interest provisions set forth in the LPA. The standard carried interest terms apply to BFO's investment: 20% carried interest over an 8% per annum preferred return on contributed capital, calculated on a whole-fund European waterfall basis as set forth in Article VIII of the LPA.
IV. Open Point 1: Excuse/Exclusion Cap
A. Issue Description
The first and most significant remaining open point concerns the aggregate cap on the dollar amount of investments from which BFO may elect to be excused under Section 3 of the side letter. As noted in Section III.B above, BFO has negotiated the right to be excused from investments falling within four defined categories (cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets). The excuse cap limits the total cumulative amount of investments from which BFO may exercise its excuse right, expressed as a percentage of BFO's aggregate $75,000,000 commitment to Fund IV. Once the cap is reached, BFO would be required to participate in subsequent capital calls even if the underlying investment falls within one of the defined excuse categories (or, alternatively, BFO could default on such capital calls, which would trigger the default remedies set forth in Article VI of the LPA).
The excuse cap is a standard feature in side letters granting excuse rights, and its purpose is to balance the investor's need for flexibility against the GP's need for certainty regarding capital deployment. The parties have agreed on all aspects of the excuse/exclusion provision except the level of this cap.
B. BFO's Position
BFO has proposed, and has maintained throughout the negotiation, an aggregate excuse cap of 25% of BFO's aggregate commitment, which equates to $18,750,000 ($75,000,000 × 25%).
BFO's rationale for the 25% cap is as follows:
• Breadth of Excuse Categories. BFO's excuse right covers four distinct investment categories: cannabis, gaming/casino, sanctioned jurisdictions, and ERISA plan assets. Given the breadth of these categories, a cap set too low could be exhausted by a relatively small number of investments early in the Fund's life, effectively rendering the excuse right illusory for the remainder of the Fund's investment period.
• Fund IV Investment Strategy. Fund IV pursues a value-add and opportunistic strategy in North American commercial real estate, which the PPM describes as including mixed-use developments, urban redevelopment projects, and hospitality-adjacent properties. Several of these sub-strategies could involve investments with gaming, casino, or cannabis-adjacent components, particularly in jurisdictions where cannabis has been legalized for recreational or medical use. The breadth of the Fund's stated investment strategy increases the likelihood that excuse rights will be triggered and, accordingly, increases the importance of a sufficiently high cap.
• Family Office Policy Constraints. The Hargrove family has adopted investment policy guidelines that restrict exposure to cannabis and gaming assets. These guidelines are not merely preferential but reflect deeply held family values and reputational considerations. A low excuse cap could force BFO to participate in investments that are inconsistent with these guidelines, which would be contrary to the fundamental purpose of the excuse provision.
• Preservation of Meaningful Excuse Right. BFO's position is that the excuse right must be meaningful in practice, not merely in form. A cap of 25% provides a reasonable buffer to ensure that BFO can exercise its excuse right across multiple investments over the Fund's investment period without risk of exhaustion.
C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)
The GP initially proposed an aggregate excuse cap of 15% of BFO's aggregate commitment ($75,000,000 × 15% = $11,250,000). In the second GP markup received on March 18, 2024, the GP moved to 20% of aggregate commitment, equating to $15,000,000 ($75,000,000 × 20%). The GP has characterized this as its "final position," although we note that such characterizations are common in negotiations and do not necessarily preclude further movement.
The GP's rationale, as expressed by Ashford Crane during the negotiation, includes:
• Portfolio Construction Concerns. The GP has expressed concern that a high excuse cap could undermine the GP's ability to construct a diversified portfolio and execute its stated investment strategy. If a meaningful percentage of a limited partner's commitment is subject to excuse, the GP may face a shortfall in available capital for certain investments, requiring it to either scale down the investment or seek additional capital from other limited partners.
• J-Curve Impact. The GP has noted that excused commitments can exacerbate the J-curve effect for the excused investor, as excused amounts reduce the investor's overall exposure to early investments while the investor continues to bear its share of management fees and fund expenses calculated on committed capital (until the excuse right is exercised and unfunded commitments are reduced accordingly).
• Operational Burden. The GP has cited the operational burden of managing excused commitments, including the need to track and administer excuse elections, recalculate capital accounts, and adjust subsequent capital call amounts. These administrative costs are borne by the Fund as a whole and increase with the number and size of excuse elections.
• Parity Among Limited Partners. The GP has expressed a desire to maintain relative parity among limited partners with respect to excuse caps. While the GP has acknowledged that BFO's excuse categories are reasonable, it has indicated that granting a 25% cap to BFO could create pressure to offer similar or higher caps to other limited partners, which could cumulatively impair the Fund's capital deployment flexibility.
D. Analysis & Recommendation
The following considerations inform our analysis and recommendation with respect to Open Point 1:
Movement to Date. The GP has moved 5 percentage points from its original position (15% to 20%); BFO has maintained its 25% position throughout. The current gap between the parties is 5 percentage points, representing a dollar difference of $3,750,000 ($18,750,000 under BFO's proposal vs. $15,000,000 under the GP's current proposal).
Practical Significance. Given Fund IV's value-add and opportunistic strategy in North American commercial real estate, the likelihood of multiple investments triggering the excuse categories — particularly cannabis and gaming/casino — is meaningful. The PPM does not exclude mixed-use developments with casino or gaming components, nor does it restrict the Fund from investing in properties with cannabis-related tenants or co-located cannabis operations. We reviewed the track record of Meridian Peak's prior funds (Fund II and Fund III) and identified at least two portfolio investments in Fund III that included gaming-related components (the Tahoe Summit Resort development and the Atlantic City Marina District redevelopment), which together represented approximately 14% of Fund III's total invested capital. If Fund IV pursues a similar allocation, a 20% cap could be reached relatively quickly, potentially within the first half of the investment period.
Market Comparison. Based on C&H's review of comparable side letters, as reflected in the MFN Provision Comparison Matrix delivered to BFO on February 5, 2024, excuse caps for similarly situated limited partners (family offices and institutional investors committing in the $50,000,000 to $100,000,000 range) typically range from 15% to 30%, with 25% falling within the market median. A 20% cap, while within the range, is at the lower end of the distribution for investors of BFO's size and profile. Notably, several of the comparable side letters reviewed by C&H contained excuse caps of 25% or higher for investors with similarly broad excuse categories.
Overall Negotiation Context. BFO has obtained a highly favorable package of side-letter terms, including meaningful management fee reductions, an enhanced key person provision, co-investment rights, and a 100% placement agent fee offset. The GP has made meaningful concessions on several of these points. In this context, BFO should consider whether the excuse cap is the appropriate point on which to seek maximum advantage, or whether the overall package justifies some flexibility.
Recommendation. We recommend that BFO continue to press for 25% ($18,750,000). The excuse cap is the most substantively significant of the three remaining open points, and the difference between 20% and 25% — $3,750,000 in cumulative excuse capacity — is meaningful given the breadth of BFO's excuse categories and the Fund's investment strategy.
If the GP remains firm at 20% and will not move further, our recommended fallback position is 22.5% ($75,000,000 × 22.5% = $16,875,000). A 22.5% cap represents a reasonable compromise that preserves meaningful excuse capacity while acknowledging the GP's concerns regarding portfolio construction and parity. However, we do not recommend that BFO accept 20% without a further concession from the GP on another point — for example, an expansion of the excuse categories or a commitment by the GP to provide earlier notice of investments that may trigger excuse rights.
Note Regarding March 11 Conference Call. During the March 11 conference call, GP's counsel (Harrison Drummond) indicated that the GP was willing to move to 20% but characterized it as their "final position." While this characterization should be taken seriously, it is not uncommon for parties to move from stated "final positions" when presented with a reasonable compromise proposal. We believe a counterproposal of 22.5% would be well-received as a good-faith effort to bridge the gap.
V. Open Point 2: MFN Summary Delivery Timing
A. Issue Description
The second remaining open point relates to the timing of the GP's obligation to deliver a redacted summary of all material side-letter terms granted to other limited partners, which serves as the trigger for BFO's exercise of its most favored nation election right under Section 2 of the side letter. Specifically, the open issue is the number of business days following the applicable close at which BFO is admitted by which the GP must deliver this redacted summary.
The MFN summary is an essential component of the MFN right, as it provides BFO with the information necessary to identify and evaluate any economic or governance terms that have been granted to other limited partners and that BFO may wish to elect. Without timely delivery of the summary, BFO's MFN election right would be effectively impaired.
B. BFO's Position
BFO proposed that the GP deliver the redacted MFN summary within 15 business days after the applicable close at which BFO is admitted as a limited partner. BFO's rationale is that a shorter delivery period ensures that BFO receives MFN information promptly, allowing BFO to evaluate and act upon the information while the terms are still fresh and before subsequent closes or amendments may complicate the analysis.
C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)
The GP proposes that the redacted MFN summary be delivered within 20 business days after the applicable close. The GP's rationale, as communicated by Ashford Crane, is as follows:
• Administrative Burden. The GP has represented that the process of compiling, redacting, and reviewing all side-letter terms across multiple limited partners is time-intensive, particularly in connection with a large closing involving numerous investors. The GP must coordinate with its internal legal team, outside counsel, and the fund administrator (Granite Ledger Fund Services LLC) to ensure that the MFN summary is accurate, complete, and appropriately redacted to protect the confidentiality of other limited partners.
• Multiple Closings. Fund IV anticipates multiple closings, each of which may involve new limited partners with new side letters. The GP has indicated that a 15-business-day turnaround is not consistently achievable across all closings, particularly the first close, which is expected to involve the largest number of investors.
• Quality Control. The GP has emphasized the importance of delivering an accurate and complete MFN summary, noting that errors or omissions could give rise to disputes with limited partners regarding the scope of their MFN election rights. The additional 5 business days allows for a more thorough review process and reduces the risk of errors.
D. Analysis & Recommendation
The difference between BFO's position (15 business days) and the GP's position (20 business days) is 5 business days, or approximately one calendar week. We have carefully evaluated the practical implications of this difference and conclude that it is of limited significance to BFO for the following reasons:
• MFN Election Period Unaffected. BFO's MFN election period of 20 business days runs from the date of BFO's receipt of the MFN summary, not from the date of the applicable close. Accordingly, regardless of whether the summary is delivered on business day 15 or business day 20, BFO will have the full 20-business-day election period to review the summary, consult with C&H, and determine which terms, if any, to elect.
• No Loss of Substantive Rights. A 5-business-day delay in receiving the MFN summary does not affect the substance of BFO's MFN right. BFO will receive the same information and will have the same election period regardless of the delivery timing.
• Goodwill Considerations. Conceding this point may generate goodwill with the GP and Ashford Crane, which could be useful in pressing for BFO's position on Open Point 1 (excuse cap).
Recommendation. We recommend that BFO accept the GP's position of 20 business days following the applicable close. This is a low-priority point that is unlikely to affect BFO's substantive MFN rights, and conceding it cleanly positions BFO to focus its remaining negotiation capital on the excuse cap issue.
VI. Open Point 3: K-1 Delivery Timeline
A. Issue Description
The third and final remaining open point concerns the target deadline by which the Fund will use commercially reasonable efforts to deliver IRS Schedule K-1s to BFO following the end of each fiscal year. The K-1 delivery timeline is set forth in Section 10 of the side letter and supplements the standard K-1 delivery provisions in the LPA.
The LPA provides that the Fund will use commercially reasonable efforts to deliver K-1s within 120 days following the end of each fiscal year. Both BFO and the GP have agreed that an accelerated timeline should be included in the side letter; the only remaining dispute is the specific number of days.
B. BFO's Position
BFO proposed that the Fund use commercially reasonable efforts to deliver K-1s within 75 days of the end of each fiscal year (i.e., by approximately March 16 for a December 31 fiscal year-end).
BFO's rationale is grounded in the Hargrove family's internal tax reporting and filing obligations. BFO serves as the primary investment vehicle for the Hargrove family, and timely receipt of K-1s is essential to the family's ability to prepare and file accurate federal and state income tax returns, estimate quarterly tax obligations, and coordinate multi-entity tax planning across the Hargrove family's various investment vehicles and trusts. The standard 120-day K-1 delivery timeline set forth in the LPA has historically resulted in late receipt of K-1s, which has in turn required the Hargrove family to file extensions and incur additional accounting costs.
C. GP's Position (as Reflected in Second GP Markup Dated March 18, 2024)
The GP proposes that the Fund use commercially reasonable efforts to deliver K-1s within 90 days of the end of each fiscal year (i.e., by approximately March 31 for a December 31 fiscal year-end). The GP's rationale, as communicated by Ashford Crane, includes the following considerations:
• Fund Structural Complexity. Fund IV's investment structure involves multiple special purpose vehicles ("SPVs") and co-investment vehicles, each of which may hold separate portfolio investments and generate separate tax items. The aggregation and allocation of these items across the Fund's limited partners requires significant coordination among the GP, the fund administrator (Granite Ledger Fund Services LLC), and the fund auditor (Brockton Marsh & Associates LLP, Audit Partner: Neil A. Strickland).
• Audit Coordination. The preparation of K-1s requires the completion, or near-completion, of the Fund's annual audit. Brockton Marsh has indicated to the GP that a 75-day K-1 delivery target would require an accelerated audit timeline that may not be achievable in all years, particularly in early fund years when new investment structures are being established and when the audit scope may be broader.
• Administrator Capacity. Granite Ledger has represented to the GP that a 90-day K-1 delivery target is achievable but that a 75-day target would require significant additional resources and could result in a higher incidence of estimated or amended K-1s, which could create complications for limited partners.
D. Analysis & Recommendation
The following considerations inform our analysis:
• Improvement Over LPA Baseline. The GP's proposed 90-day target represents a 30-day improvement over the standard 120-day LPA provision. BFO's proposed 75-day target would represent a 45-day improvement. Both positions are meaningful improvements over the LPA standard.
• "Commercially Reasonable Efforts" Qualifier. Both the BFO proposal and the GP proposal are qualified by a "commercially reasonable efforts" standard. This is an important distinction: the K-1 delivery timeline in the side letter is a target, not a hard deadline. Neither 75 days nor 90 days would create a binding, enforceable obligation requiring the GP to deliver K-1s by a specific date. Rather, the GP would be required to use commercially reasonable efforts to meet the target, and a failure to deliver by the target date would not constitute a breach of the side letter provided that the GP had exercised commercially reasonable efforts.
• Market Practice. Based on C&H's experience and our review of comparable side letters, a 90-day K-1 delivery target is the market-standard enhanced provision for institutional investors and family offices. While 75-day targets are not unprecedented, they are more commonly found in side letters for very large investors (those committing $150,000,000 or more) or in fund structures with simpler tax profiles. For a fund of Fund IV's size and structural complexity, a 90-day target is reasonable and achievable.
• Practical Considerations. We understand from our discussions with BFO that the Hargrove family typically files for extensions of its federal and state income tax returns and that the 90-day K-1 delivery target (approximately March 31) would be well in advance of the extended filing deadlines. While a 75-day target would be preferable from a tax planning perspective, the 90-day target does not create a meaningful risk of delayed filings.
Recommendation. We recommend that BFO accept the GP's position of 90 days. This remains a meaningful improvement over the LPA baseline of 120 days and is consistent with market practice for enhanced side-letter reporting provisions. The "commercially reasonable efforts" standard provides additional flexibility in both directions — the GP may deliver earlier than the 90-day target in practice, and the target is not a hard deadline in any event. As with Open Point 2, conceding this point allows BFO to focus its negotiation efforts on the more significant excuse cap issue.
VII. Summary Table of Open Points
The following table summarizes the three remaining open points, the parties' respective positions, and C&H's recommendations:
As reflected above, our recommended approach is to concede on Open Points 2 and 3 while continuing to advocate for BFO's position on Open Point 1. If necessary, BFO may consider proposing a compromise of 22.5% on the excuse cap as a fallback position. We believe this approach appropriately prioritizes the most substantively significant remaining issue while demonstrating good-faith flexibility on the less consequential points.
VIII. Recommended Next Steps
Based on the foregoing analysis, we recommend the following next steps to bring the side-letter negotiation to a conclusion and facilitate BFO's timely subscription to Fund IV:
1. BFO Internal Alignment. BFO's investment committee members and key personnel — Julian R. Hargrove, Sandra M. Whitfield, and Derek T. Calloway — should review this memorandum and confirm C&H's recommendations, specifically: (a) the decision to press for 25% on the excuse cap (with a fallback to 22.5% if the GP remains firm at 20%), (b) acceptance of the GP's position on MFN summary delivery timing (20 business days), and (c) acceptance of the GP's position on K-1 delivery timeline (90 days). We are available to discuss any questions or alternative approaches at BFO's convenience. We suggest that BFO provide its instructions by no later than March 29, 2024, to ensure sufficient time to finalize the negotiation and prepare execution documents in advance of the first close.
2. Investment Committee Approval. Execution of the side letter (and the related subscription agreement for the $75,000,000 commitment) requires approval of BFO's investment committee, which requires the affirmative vote of three of four members, with Julian R. Hargrove holding a veto right. C&H recommends scheduling an investment committee meeting at the earliest practicable date to address both the remaining negotiation points and the final investment decision. We suggest targeting the week of April 1, 2024, to allow adequate time for any final negotiations and document preparation prior to the Fund IV anticipated first close of April 30, 2024. C&H can prepare a summary presentation for the investment committee if that would be helpful.
3. Communication to Ashford Crane. Upon receipt of BFO's instructions regarding the three open points, C&H will communicate BFO's final positions to Ashford Crane & Hewitt LLP (Harrison K. Drummond, Partner; Elaine C. Woodbury, Senior Associate) in a manner to be determined by BFO — either through a marked-up draft of the side letter or through a telephone call followed by a written confirmation. If the parties reach agreement on all three points, C&H will prepare a final execution-ready side letter and circulate it to Ashford Crane for confirmation. We anticipate that, assuming agreement on the three remaining points, the final side letter can be prepared for signature within 3 to 5 business days.
4. Subscription Documentation. C&H has prepared a draft subscription agreement markup and a draft investor questionnaire, both dated March 10, 2024, for BFO's review. These documents remain in draft form pending resolution of the side-letter open points and investment committee approval. Upon resolution of the open points, C&H will finalize the subscription documents for execution concurrently with the side letter. We recommend that BFO's tax counsel review the subscription agreement and investor questionnaire to confirm the accuracy of BFO's tax representations and elections. If BFO wishes, C&H can coordinate directly with BFO's tax advisors to expedite this review.
5. Timeline Sensitivity. Fund IV's anticipated first close is April 30, 2024, with a final close deadline of October 31, 2024. If BFO intends to participate in the first close — which carries certain advantages, including first-close fee discounts and priority in co-investment allocation — the side letter and subscription documents would need to be finalized and executed no later than approximately April 25, 2024, to allow sufficient time for the GP's review and countersignature process. We note that Ashford Crane has indicated informally that the GP prefers to receive all subscription materials at least five business days prior to the closing date. Accordingly, we recommend that BFO target finalization and execution of all documents by no later than April 23, 2024.
If BFO does not participate in the first close, BFO may subscribe at any subsequent closing prior to the final close deadline of October 31, 2024. However, participation in a subsequent closing would subject BFO to the equalization interest provisions set forth in Section 3.4 of the LPA, requiring BFO to pay equalization interest on capital contributions made at the first close at a rate equal to the prime rate plus 2% per annum from the date of the first close through the date of BFO's admission.
IX. Closing
Calderwood & Harkness remains available to discuss this memorandum and the recommended approach at BFO's convenience. We would be pleased to schedule a call or in-person meeting with the BFO team to address any questions, refine the negotiation strategy, or discuss alternative approaches to any of the open points.
Please do not hesitate to contact either of us directly:
Pamela Cross Partner, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue, New York, NY 10017 Direct: (212) 555-8341
Email: pcross@calderwoodharkness.com
Theresa Kim Senior Associate, Funds & Asset Management Calderwood & Harkness LLP 425 Lexington Avenue, New York, NY 10017 Direct: (212) 555-8367
Email: tkim@calderwoodharkness.com
Matter No.: 1026-00001
We look forward to your instructions.
ATTACHMENTS
The following documents are enclosed with or referenced in this memorandum:
• Attachment A: Third Draft Side Letter to Limited Partnership Agreement of Meridian Peak Capital Partners Fund IV, L.P. (transmitted to Ashford Crane & Hewitt LLP on March 14, 2024)
• Attachment B: Second GP Markup — Redline of Third Draft Side Letter (received from Ashford Crane & Hewitt LLP on March 18, 2024; internal redline comparison prepared by C&H on March 19, 2024)
• Attachment C: Excuse Rights Analysis Memorandum (prepared by Calderwood & Harkness LLP, dated March 6, 2024)
This memorandum is a privileged and confidential attorney-client communication. It is intended solely for the use of the addressees identified above and should not be distributed, forwarded, or disclosed to any third party without the prior written authorization of Calderwood & Harkness LLP. Unauthorized disclosure may result in a waiver of applicable privileges.
Open Point | Side Letter Section | BFO Position | GP Position (3/18 Markup) | Delta | C&H Recommendation
1. Excuse/Exclusion Cap | Section 3 | 25% of commitment ($18,750,000) | 20% of commitment ($15,000,000) | $3,750,000 / 5 percentage points | Press for 25%; fallback to 22.5% ($16,875,000)
2. MFN Summary Delivery Timing | Section 2 | 15 business days post-close | 20 business days post-close | 5 business days | Accept GP's position (20 business days)
3. K-1 Delivery Timeline | Section 10 | 75 days post fiscal year-end | 90 days post fiscal year-end | 15 days | Accept GP's position (90 days)

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

MEMORANDUM

ATTACHMENTS

Record

Parties

Dates

Amounts