1037-00006 · Solstice Biomedical Devices Ltd · Closing

ironclad-payoff-transmittal-letter.docx DOCUMENT M&A / Corporate

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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8000 Facsimile: (212) 546-8001 www.calderwoodharkness.com

October 29, 2024

Matter No.: 1037-00006

VIA EMAIL AND OVERNIGHT COURIER

Patrick Lennox, Esq. General Counsel & Company Secretary Solstice Biomedical Devices Ltd. One Solstice Place, Building 4 Galway Business Park Galway, H91 XK2F, Ireland

Re: Payoff and Termination of Meridian Surgical Technologies, Inc. Revolving Credit Facility with Ironclad Commercial Lending, LLC — Transmittal of Payoff Letter and Wire Instructions

Dear Mr. Lennox:

We write on behalf of our client, Solstice Biomedical, Inc. (the "Buyer"), a wholly-owned subsidiary of Solstice Biomedical Devices Ltd. ("Solstice" or the "Parent"), to transmit and summarize the payoff letter (the "Payoff Letter") received from Ironclad Commercial Lending, LLC ("Ironclad") dated October 28, 2024, in connection with the anticipated closing (the "Closing") of that certain Stock Purchase Agreement, dated as of August 20, 2024 (as amended, supplemented, or otherwise modified from time to time, the "Stock Purchase Agreement"), by and among the Buyer, Meridian Surgical Technologies, Inc., a Delaware corporation (the "Company"), and the sellers named therein (collectively, the "Sellers"), providing for the acquisition by the Buyer of one hundred percent (100%) of the outstanding shares of common stock, par value $0.001 per share, of the Company, together with all vested options to acquire shares of the Company's common stock (the "Transaction"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Stock Purchase Agreement.

As you are aware, Section 7.3(e) of the Stock Purchase Agreement requires, as a condition precedent to the Buyer's obligation to consummate the Closing, the payoff in full and termination of the Company's existing revolving credit facility with Ironclad (as more fully described below, the "Ironclad Facility"), with such payoff to occur simultaneously with the Closing, currently scheduled for October 31, 2024. The payoff amount set forth in the Payoff Letter will be deducted from the Base Purchase Price of Two Hundred Twenty Million Dollars ($220,000,000) as reflected in the Closing Statement delivered pursuant to Section 2.4 of the Stock Purchase Agreement (the "Closing Statement"), and shall be wired directly to Ironclad at the Closing in accordance with the Funds Flow Memorandum. The enclosed Payoff Letter, together with the accompanying wire instructions and related documentation, is being transmitted for your review, approval, and coordination in advance of the Closing.

I. Summary of Existing Credit Facility

Set forth below is a summary of the material terms and relevant identifying information regarding the Ironclad Facility for ease of reference:

Upon receipt of the payoff amount in full as specified in the Payoff Letter, the Ironclad Facility is to be terminated in its entirety, and all liens, security interests, pledges, and encumbrances granted by the Company in favor of Ironclad in connection therewith are to be irrevocably and unconditionally released, as more fully described in Section V below.

II. Payoff Letter — Key Terms and Payoff Amount

The Payoff Letter, a copy of which is enclosed herewith as Enclosure 1, was issued by Ironclad on October 28, 2024, and executed by Thomas Briggs in his capacity as Senior Vice President. The key terms of the Payoff Letter are summarized as follows:

Payoff Letter Date: October 28, 2024

Good Through Date: The Payoff Letter provides that the stated payoff amount is valid and good through the close of business on November 1, 2024 (the "Good Through Date"). As the Closing is scheduled for October 31, 2024, the anticipated payoff date falls well within the Good Through Date window, and no additional per diem interest adjustments are expected to be required.

Total Payoff Amount: $7,341,822.16

The total payoff amount of Seven Million Three Hundred Forty-One Thousand Eight Hundred Twenty-Two Dollars and Sixteen Cents ($7,341,822.16) (the "Payoff Amount") is comprised of the following components, as set forth in the Payoff Letter:

We note for the record that Ironclad has confirmed in the Payoff Letter that no prepayment premium, early termination fee, breakage cost, or make-whole amount is payable in connection with the payoff of the outstanding balance and termination of the revolving credit facility. This is consistent with Section 2.5(a) of the Credit Agreement, which provides that the revolving loans may be prepaid in whole or in part at any time without penalty or premium, subject only to customary breakage costs in connection with SOFR-based borrowings. Ironclad has confirmed that no SOFR-based borrowings are currently outstanding under the facility, and accordingly no breakage costs are applicable. The administrative and processing fee of $15,250.00 represents Ironclad's standard fee for processing payoff, termination, and lien release documentation.

Per Diem Interest: The Payoff Letter provides that, in the event the Closing and payoff do not occur on October 31, 2024, as anticipated, per diem interest shall accrue on the outstanding principal balance at a rate of $1,484.38 per day (calculated based on the applicable interest rate of 7.60% per annum on the outstanding principal balance of $7,125,000.00, on an actual/360 day count basis). While we do not anticipate that the per diem interest provision will need to be invoked, we note it here for informational purposes in the event of any delay to the Closing. Should the Closing be delayed beyond November 1, 2024, a revised payoff letter would need to be obtained from Ironclad prior to the payoff wire being initiated.

Consistency with Closing Documents: We have verified that the Payoff Amount of $7,341,822.16 is consistent with and corresponds to the amount reflected as the "Ironclad Payoff Amount" in (i) the Closing Statement prepared by Andrew Fitzpatrick of this firm, in coordination with David Hensley (CFO of the Company) and Conor Muldoon (CFO of the Parent), and (ii) the Funds Flow Memorandum circulated in draft form on October 25, 2024, with a final version anticipated to be circulated no later than October 30, 2024.

III. Wire Transfer Instructions for Payoff

Set forth below are the wire transfer instructions for the remittance of the Payoff Amount to Ironclad, as extracted from the Payoff Letter. A separate wire instruction sheet has been prepared and is enclosed herewith as Enclosure 2 for ease of reference by Tidewater Atlantic Bank, N.A. (the "Buyer's Bank") in connection with processing the closing-day wire transfers.

The wire transfer of the Payoff Amount is to be initiated from the Buyer Funding Account maintained at Tidewater Atlantic Bank, N.A. (Account Holder: Solstice Biomedical, Inc.; Account Number: 8801-4437-2290; ABA Routing Number: 052001633) (the "Buyer Funding Account"), simultaneously with all other closing-day wire transfers on October 31, 2024, as set forth and sequenced in the Funds Flow Memorandum. The Ironclad payoff wire is designated as a priority wire and should be released concurrently with or immediately following the release of the aggregate purchase price wire to the paying agent.

We respectfully request that Tidewater Atlantic Bank, N.A. process the Ironclad payoff wire as a Fedwire (Federal Reserve Wire Transfer) to ensure irrevocable same-day settlement and to guarantee compliance with the Good Through Date specified in the Payoff Letter. Please note that ACH transfers are not acceptable for purposes of satisfying the payoff obligations under the Payoff Letter, as the Payoff Letter expressly requires that payment be made by wire transfer of immediately available funds. We would ask that Margaret Chu at Tidewater Atlantic Bank confirm that the Buyer Funding Account will be sufficiently funded and that the wire operations team is prepared to execute all closing-day wires on the morning of October 31, 2024, upon receipt of joint release instructions from the Buyer and the Sellers (or their respective counsel).

IV. UCC Termination Statements and Lien Release Requirements

The Payoff Letter confirms that, upon receipt of the Payoff Amount in full in immediately available funds, Ironclad covenants and agrees to take the following actions with respect to the release and termination of all security interests, liens, and encumbrances granted by the Company in favor of Ironclad in connection with the Ironclad Facility:

(a) UCC-3 Termination Statements. Ironclad will deliver duly executed UCC-3 financing statement amendments (termination statements) with respect to all UCC-1 financing statements filed against the Company, as debtor, in favor of Ironclad, as secured party, in connection with the Credit Agreement and related security documents. Based on our lien search results, the following UCC-1 financing statements are on file and will require corresponding UCC-3 termination statements:

(i) UCC-1 Financing Statement, File No. 2021-1742856, filed with the Delaware Secretary of State on March 16, 2021, naming Meridian Surgical Technologies, Inc. as Debtor and Ironclad Commercial Lending, LLC as Secured Party, covering substantially all assets of the Company; and

(ii) UCC-1 Financing Statement, File No. 2021-1742901, filed with the Delaware Secretary of State on March 16, 2021, naming Meridian Surgical Technologies, Inc. as Debtor and Ironclad Commercial Lending, LLC as Secured Party, covering specific intellectual property collateral.

The Delaware Secretary of State is the sole jurisdiction of filing, as Delaware is the Company's jurisdiction of organization. Our lien search, which was last updated on October 22, 2024, did not reveal any additional UCC filings in favor of Ironclad in any other jurisdiction. Copies of the above-referenced UCC-1 financing statements are enclosed herewith as Enclosure 3 for reference.

(b) Release of All Liens and Security Interests. Ironclad will irrevocably and unconditionally release all liens, security interests, pledges, hypothecations, charges, and other encumbrances on the assets, properties, and rights of the Company granted in favor of Ironclad pursuant to the Credit Agreement, the Security Agreement dated as of March 15, 2021, the intellectual Property Security Agreement dated as of March 15, 2021, and any and all other collateral documents, guarantees, or ancillary agreements entered into in connection with the Ironclad Facility.

(c) Delivery Timeline. Calderwood & Harkness LLP has requested that Ironclad deliver executed but unfiled UCC-3 termination statements at or promptly following the Closing. Ironclad has agreed to deliver such executed UCC-3 termination statements within five (5) business days of receipt of the Payoff Amount in immediately available funds. Thomas Briggs has confirmed that Ironclad's internal counsel will prepare the UCC-3 forms and coordinate delivery to this firm via email (with originals to follow by overnight courier).

We recommend that, promptly upon receipt of the executed UCC-3 termination statements from Ironclad, the Buyer (or its designated agent or counsel) file such UCC-3 termination statements with the Delaware Secretary of State to clear the lien record against the Company. Our firm is prepared to handle such filing on behalf of the Buyer upon instruction. We note that the Delaware Secretary of State currently offers expedited filing services (24-hour and same-day), and we would recommend utilizing the 24-hour expedited service to ensure prompt clearance of the lien record.

For the avoidance of doubt, Section 7.3(e) of the Stock Purchase Agreement conditions the Buyer's obligation to close on the Buyer's receipt, at or prior to the Closing, of the payoff letter from Ironclad, in form and substance reasonably satisfactory to the Buyer, together with evidence that, upon payment of the amounts set forth therein, all liens and security interests of Ironclad on the assets of the Company shall be released in full. Having reviewed the Payoff Letter in detail, we are satisfied that the Payoff Letter meets the requirements of Section 7.3(e) and is in form and substance reasonably satisfactory for purposes of satisfying this closing condition. We recommend that Buyer counsel confirm this determination on the record at or before the Closing.

V. Confirmation of Consistency with Closing Documents

We have confirmed that the Payoff Amount of $7,341,822.16 is fully and accurately reflected in the Closing Statement and the Funds Flow Memorandum, and is consistent with all other closing deliverables. Specifically:

The Closing Statement reflects the following computation of the Estimated Closing Cash Consideration payable to the Sellers at the Closing:

The wire to Ironclad in the amount of $7,341,822.16 is included as Line Item 4 in the Funds Flow Memorandum, to be wired directly from the Buyer Funding Account to Ironclad's designated payoff account as described in Section III above. The Funds Flow Memorandum allocates the aggregate closing consideration among the following disbursements: (i) the Sellers' aggregate consideration wire to the paying agent; (ii) the indemnity escrow deposit wire to the escrow agent (Greaves Bancorp); (iii) the Sellers' transaction expenses wires; (iv) the Ironclad payoff wire; and (v) any other closing adjustment wires, each as more particularly described in the Funds Flow Memorandum.

We have coordinated with Jonathan Whitmore of Whitmore Crane & Pfeiffer LLP, counsel to the Sellers, and with David Hensley, Chief Financial Officer of the Company, to confirm the accuracy of the outstanding principal balance and accrued interest under the Ironclad Facility as reflected in the Payoff Letter. Mr. Hensley has confirmed, based on the Company's internal records and its most recent borrowing base certificate delivered to Ironclad on October 15, 2024, that the outstanding principal balance of $7,125,000.00 and the accrued interest calculation are consistent with the Company's books and records. Whitmore Crane & Pfeiffer LLP has reviewed and approved the Payoff Letter and the wire instructions on behalf of the Sellers.

VI. Enclosures

Enclosed herewith please find the following documents for your review and files:

1. Enclosure 1: Ironclad Commercial Lending, LLC Payoff Letter dated October 28, 2024 (original, duly executed by Thomas Briggs, Senior Vice President, on behalf of Ironclad Commercial Lending, LLC);

2. Enclosure 2: Wire Instruction Sheet (extracted from the Payoff Letter for ease of reference by Tidewater Atlantic Bank, N.A., in connection with the processing of the closing-day payoff wire); and

3. Enclosure 3: Copies of UCC-1 Financing Statements on file with the Delaware Secretary of State in favor of Ironclad Commercial Lending, LLC (File Nos. 2021-1742856 and 2021-1742901), for reference in connection with the preparation and filing of UCC-3 termination statements following receipt of the payoff.

VII. Action Items and Closing Instructions

In order to ensure an orderly and timely Closing, we respectfully request that each addressee and copy recipient take the following actions promptly upon receipt of this letter:

1. Patrick Lennox and Conor Muldoon (Solstice): Please review the Payoff Letter enclosed as Enclosure 1 and confirm your receipt, review, and approval of the payoff terms (including the Payoff Amount and the Good Through Date) by reply email to the undersigned no later than 5:00 p.m. (Eastern Time) on October 30, 2024. In the event that you identify any discrepancy or have any questions regarding the Payoff Amount or any component thereof, please notify us immediately so that we may coordinate with Ironclad to resolve such issue prior to the Closing.

2. Margaret Chu (Tidewater Atlantic Bank, N.A.): Please confirm that (a) the Ironclad payoff wire in the amount of $7,341,822.16 will be included in the closing-day wire schedule as Line Item 4 in the Funds Flow Memorandum, (b) Tidewater Atlantic Bank is prepared to initiate the wire on October 31, 2024, upon receipt of joint release instructions, and (c) the Buyer Funding Account will be funded with sufficient available balances to cover all closing-day wire transfers, including the Ironclad payoff wire, as of the morning of October 31, 2024. Please also confirm that the wire will be processed as a Fedwire transfer for same-day settlement.

3. Post-Closing Follow-Up: Calderwood & Harkness LLP will follow up directly with Thomas Briggs at Ironclad following the Closing to (a) confirm Ironclad's receipt of the Payoff Amount in full, (b) obtain written confirmation of the termination of the Credit Agreement and all related loan documents, and (c) obtain the executed UCC-3 termination statements for filing with the Delaware Secretary of State. We will circulate confirmation of each of the foregoing to all parties promptly upon receipt.

Should you have any questions regarding the Payoff Letter, the wire instructions, or any other aspect of the matters addressed in this letter, please do not hesitate to contact the undersigned, Tiffany Rosenthal, at (212) 546-8147 or trosenthal@calderwoodharkness.com, or Beatrice Holloway at (212) 546-8012 or bholloway@calderwoodharkness.com. We look forward to a smooth and successful Closing on October 31, 2024.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Tiffany Rosenthal Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8147

Email: trosenthal@calderwoodharkness.com

Approved by:

________________________________________

Beatrice Holloway Partner, Mergers & Acquisitions Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8012

Email: bholloway@calderwoodharkness.com

Matter No.: 1037-00006

cc: (via email)

Helena Byrne, Executive Vice President, Corporate Development & Strategy, Solstice Biomedical Devices Ltd.

Conor Muldoon, Chief Financial Officer, Solstice Biomedical Devices Ltd.

Margaret Chu, Managing Director, Healthcare Lending Group, Tidewater Atlantic Bank, N.A.

Jonathan Whitmore, Lead Partner, Whitmore Crane & Pfeiffer LLP

Andrew Fitzpatrick, Associate, Calderwood & Harkness LLP (internal)

Natasha Grier, Paralegal, Calderwood & Harkness LLP (internal)

Enclosures (3)

This letter and its enclosures contain information that is privileged, confidential, and/or subject to the attorney-client privilege and attorney work product doctrine. This communication is intended solely for the use of the individual(s) or entity(ies) to whom it is addressed. If you are not the intended recipient, please notify the sender immediately and destroy all copies of this communication. Any unauthorized review, use, disclosure, or distribution of this communication is strictly prohibited.

Term	Detail
Borrower	Meridian Surgical Technologies, Inc., a Delaware corporation (EIN: 84-3192057; Delaware Secretary of State File No. 5819734)
Lender	Ironclad Commercial Lending, LLC, a Delaware limited liability company (headquarters: 600 Travis Street, Suite 2200, Houston, Texas 77002)
Key Contact at Ironclad	Thomas Briggs, Senior Vice President
Facility Type	Senior secured revolving credit facility
Facility Size	$12,000,000 (Twelve Million Dollars)
Facility Purpose	Working capital and general corporate purposes of the Company
Governing Agreement	Credit Agreement, dated as of March 15, 2021, by and between the Company, as Borrower, and Ironclad, as Lender (as amended by that certain First Amendment to Credit Agreement, dated as of January 10, 2023, and that certain Second Amendment to Credit Agreement, dated as of September 8, 2023, and as further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement")
Maturity Date	March 15, 2026
Security	First-priority security interest in substantially all assets of the Company, including accounts receivable, inventory, equipment, intellectual property, and general intangibles
Component	Amount
Outstanding principal balance on the revolving credit facility	$7,125,000.00
Accrued and unpaid interest through the Good Through Date (November 1, 2024)	$201,572.16
Prepayment premiums or breakage costs	$0.00
Administrative and processing fees	$15,250.00
Total Payoff Amount	$7,341,822.16
Wire Detail	Information
Beneficiary Name	Ironclad Commercial Lending, LLC
Payoff Account Number	ICL-PAYOFF-7741
Receiving Bank	Tarrant Securities
Receiving Bank ABA/Routing Number	111000025
Reference/Memo Line	Payoff — Meridian Surgical Technologies, Inc. Revolving Credit Facility; Attention: Thomas Briggs
Line Item	Amount
Base Purchase Price	$220,000,000.00
Less: Indemnity Escrow Amount (12% of Base Purchase Price)	($26,400,000.00)

Less: Ironclad Payoff Amount	($7,341,822.16)
Less: Sellers' Transaction Expenses (estimated)	($4,825,000.00)
Plus: Estimated Net Working Capital Surplus	$675,000.00
Estimated Closing Cash Consideration	$182,108,177.84

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8000 Facsimile: (212) 546-8001 www.calderwoodharkness.com
October 29, 2024
Matter No.: 1037-00006
VIA EMAIL AND OVERNIGHT COURIER
Patrick Lennox, Esq. General Counsel & Company Secretary Solstice Biomedical Devices Ltd. One Solstice Place, Building 4 Galway Business Park Galway, H91 XK2F, Ireland
Re: Payoff and Termination of Meridian Surgical Technologies, Inc. Revolving Credit Facility with Ironclad Commercial Lending, LLC — Transmittal of Payoff Letter and Wire Instructions
Dear Mr. Lennox:
We write on behalf of our client, Solstice Biomedical, Inc. (the "Buyer"), a wholly-owned subsidiary of Solstice Biomedical Devices Ltd. ("Solstice" or the "Parent"), to transmit and summarize the payoff letter (the "Payoff Letter") received from Ironclad Commercial Lending, LLC ("Ironclad") dated October 28, 2024, in connection with the anticipated closing (the "Closing") of that certain Stock Purchase Agreement, dated as of August 20, 2024 (as amended, supplemented, or otherwise modified from time to time, the "Stock Purchase Agreement"), by and among the Buyer, Meridian Surgical Technologies, Inc., a Delaware corporation (the "Company"), and the sellers named therein (collectively, the "Sellers"), providing for the acquisition by the Buyer of one hundred percent (100%) of the outstanding shares of common stock, par value $0.001 per share, of the Company, together with all vested options to acquire shares of the Company's common stock (the "Transaction"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Stock Purchase Agreement.
As you are aware, Section 7.3(e) of the Stock Purchase Agreement requires, as a condition precedent to the Buyer's obligation to consummate the Closing, the payoff in full and termination of the Company's existing revolving credit facility with Ironclad (as more fully described below, the "Ironclad Facility"), with such payoff to occur simultaneously with the Closing, currently scheduled for October 31, 2024. The payoff amount set forth in the Payoff Letter will be deducted from the Base Purchase Price of Two Hundred Twenty Million Dollars ($220,000,000) as reflected in the Closing Statement delivered pursuant to Section 2.4 of the Stock Purchase Agreement (the "Closing Statement"), and shall be wired directly to Ironclad at the Closing in accordance with the Funds Flow Memorandum. The enclosed Payoff Letter, together with the accompanying wire instructions and related documentation, is being transmitted for your review, approval, and coordination in advance of the Closing.
I. Summary of Existing Credit Facility
Set forth below is a summary of the material terms and relevant identifying information regarding the Ironclad Facility for ease of reference:
Upon receipt of the payoff amount in full as specified in the Payoff Letter, the Ironclad Facility is to be terminated in its entirety, and all liens, security interests, pledges, and encumbrances granted by the Company in favor of Ironclad in connection therewith are to be irrevocably and unconditionally released, as more fully described in Section V below.
II. Payoff Letter — Key Terms and Payoff Amount
The Payoff Letter, a copy of which is enclosed herewith as Enclosure 1, was issued by Ironclad on October 28, 2024, and executed by Thomas Briggs in his capacity as Senior Vice President. The key terms of the Payoff Letter are summarized as follows:
Payoff Letter Date: October 28, 2024
Good Through Date: The Payoff Letter provides that the stated payoff amount is valid and good through the close of business on November 1, 2024 (the "Good Through Date"). As the Closing is scheduled for October 31, 2024, the anticipated payoff date falls well within the Good Through Date window, and no additional per diem interest adjustments are expected to be required.
Total Payoff Amount: $7,341,822.16
The total payoff amount of Seven Million Three Hundred Forty-One Thousand Eight Hundred Twenty-Two Dollars and Sixteen Cents ($7,341,822.16) (the "Payoff Amount") is comprised of the following components, as set forth in the Payoff Letter:
We note for the record that Ironclad has confirmed in the Payoff Letter that no prepayment premium, early termination fee, breakage cost, or make-whole amount is payable in connection with the payoff of the outstanding balance and termination of the revolving credit facility. This is consistent with Section 2.5(a) of the Credit Agreement, which provides that the revolving loans may be prepaid in whole or in part at any time without penalty or premium, subject only to customary breakage costs in connection with SOFR-based borrowings. Ironclad has confirmed that no SOFR-based borrowings are currently outstanding under the facility, and accordingly no breakage costs are applicable. The administrative and processing fee of $15,250.00 represents Ironclad's standard fee for processing payoff, termination, and lien release documentation.
Per Diem Interest: The Payoff Letter provides that, in the event the Closing and payoff do not occur on October 31, 2024, as anticipated, per diem interest shall accrue on the outstanding principal balance at a rate of $1,484.38 per day (calculated based on the applicable interest rate of 7.60% per annum on the outstanding principal balance of $7,125,000.00, on an actual/360 day count basis). While we do not anticipate that the per diem interest provision will need to be invoked, we note it here for informational purposes in the event of any delay to the Closing. Should the Closing be delayed beyond November 1, 2024, a revised payoff letter would need to be obtained from Ironclad prior to the payoff wire being initiated.
Consistency with Closing Documents: We have verified that the Payoff Amount of $7,341,822.16 is consistent with and corresponds to the amount reflected as the "Ironclad Payoff Amount" in (i) the Closing Statement prepared by Andrew Fitzpatrick of this firm, in coordination with David Hensley (CFO of the Company) and Conor Muldoon (CFO of the Parent), and (ii) the Funds Flow Memorandum circulated in draft form on October 25, 2024, with a final version anticipated to be circulated no later than October 30, 2024.
III. Wire Transfer Instructions for Payoff
Set forth below are the wire transfer instructions for the remittance of the Payoff Amount to Ironclad, as extracted from the Payoff Letter. A separate wire instruction sheet has been prepared and is enclosed herewith as Enclosure 2 for ease of reference by Tidewater Atlantic Bank, N.A. (the "Buyer's Bank") in connection with processing the closing-day wire transfers.
The wire transfer of the Payoff Amount is to be initiated from the Buyer Funding Account maintained at Tidewater Atlantic Bank, N.A. (Account Holder: Solstice Biomedical, Inc.; Account Number: 8801-4437-2290; ABA Routing Number: 052001633) (the "Buyer Funding Account"), simultaneously with all other closing-day wire transfers on October 31, 2024, as set forth and sequenced in the Funds Flow Memorandum. The Ironclad payoff wire is designated as a priority wire and should be released concurrently with or immediately following the release of the aggregate purchase price wire to the paying agent.
We respectfully request that Tidewater Atlantic Bank, N.A. process the Ironclad payoff wire as a Fedwire (Federal Reserve Wire Transfer) to ensure irrevocable same-day settlement and to guarantee compliance with the Good Through Date specified in the Payoff Letter. Please note that ACH transfers are not acceptable for purposes of satisfying the payoff obligations under the Payoff Letter, as the Payoff Letter expressly requires that payment be made by wire transfer of immediately available funds. We would ask that Margaret Chu at Tidewater Atlantic Bank confirm that the Buyer Funding Account will be sufficiently funded and that the wire operations team is prepared to execute all closing-day wires on the morning of October 31, 2024, upon receipt of joint release instructions from the Buyer and the Sellers (or their respective counsel).
IV. UCC Termination Statements and Lien Release Requirements
The Payoff Letter confirms that, upon receipt of the Payoff Amount in full in immediately available funds, Ironclad covenants and agrees to take the following actions with respect to the release and termination of all security interests, liens, and encumbrances granted by the Company in favor of Ironclad in connection with the Ironclad Facility:
(a) UCC-3 Termination Statements. Ironclad will deliver duly executed UCC-3 financing statement amendments (termination statements) with respect to all UCC-1 financing statements filed against the Company, as debtor, in favor of Ironclad, as secured party, in connection with the Credit Agreement and related security documents. Based on our lien search results, the following UCC-1 financing statements are on file and will require corresponding UCC-3 termination statements:
(i) UCC-1 Financing Statement, File No. 2021-1742856, filed with the Delaware Secretary of State on March 16, 2021, naming Meridian Surgical Technologies, Inc. as Debtor and Ironclad Commercial Lending, LLC as Secured Party, covering substantially all assets of the Company; and
(ii) UCC-1 Financing Statement, File No. 2021-1742901, filed with the Delaware Secretary of State on March 16, 2021, naming Meridian Surgical Technologies, Inc. as Debtor and Ironclad Commercial Lending, LLC as Secured Party, covering specific intellectual property collateral.
The Delaware Secretary of State is the sole jurisdiction of filing, as Delaware is the Company's jurisdiction of organization. Our lien search, which was last updated on October 22, 2024, did not reveal any additional UCC filings in favor of Ironclad in any other jurisdiction. Copies of the above-referenced UCC-1 financing statements are enclosed herewith as Enclosure 3 for reference.
(b) Release of All Liens and Security Interests. Ironclad will irrevocably and unconditionally release all liens, security interests, pledges, hypothecations, charges, and other encumbrances on the assets, properties, and rights of the Company granted in favor of Ironclad pursuant to the Credit Agreement, the Security Agreement dated as of March 15, 2021, the intellectual Property Security Agreement dated as of March 15, 2021, and any and all other collateral documents, guarantees, or ancillary agreements entered into in connection with the Ironclad Facility.
(c) Delivery Timeline. Calderwood & Harkness LLP has requested that Ironclad deliver executed but unfiled UCC-3 termination statements at or promptly following the Closing. Ironclad has agreed to deliver such executed UCC-3 termination statements within five (5) business days of receipt of the Payoff Amount in immediately available funds. Thomas Briggs has confirmed that Ironclad's internal counsel will prepare the UCC-3 forms and coordinate delivery to this firm via email (with originals to follow by overnight courier).
We recommend that, promptly upon receipt of the executed UCC-3 termination statements from Ironclad, the Buyer (or its designated agent or counsel) file such UCC-3 termination statements with the Delaware Secretary of State to clear the lien record against the Company. Our firm is prepared to handle such filing on behalf of the Buyer upon instruction. We note that the Delaware Secretary of State currently offers expedited filing services (24-hour and same-day), and we would recommend utilizing the 24-hour expedited service to ensure prompt clearance of the lien record.
For the avoidance of doubt, Section 7.3(e) of the Stock Purchase Agreement conditions the Buyer's obligation to close on the Buyer's receipt, at or prior to the Closing, of the payoff letter from Ironclad, in form and substance reasonably satisfactory to the Buyer, together with evidence that, upon payment of the amounts set forth therein, all liens and security interests of Ironclad on the assets of the Company shall be released in full. Having reviewed the Payoff Letter in detail, we are satisfied that the Payoff Letter meets the requirements of Section 7.3(e) and is in form and substance reasonably satisfactory for purposes of satisfying this closing condition. We recommend that Buyer counsel confirm this determination on the record at or before the Closing.
V. Confirmation of Consistency with Closing Documents
We have confirmed that the Payoff Amount of $7,341,822.16 is fully and accurately reflected in the Closing Statement and the Funds Flow Memorandum, and is consistent with all other closing deliverables. Specifically:
The Closing Statement reflects the following computation of the Estimated Closing Cash Consideration payable to the Sellers at the Closing:
The wire to Ironclad in the amount of $7,341,822.16 is included as Line Item 4 in the Funds Flow Memorandum, to be wired directly from the Buyer Funding Account to Ironclad's designated payoff account as described in Section III above. The Funds Flow Memorandum allocates the aggregate closing consideration among the following disbursements: (i) the Sellers' aggregate consideration wire to the paying agent; (ii) the indemnity escrow deposit wire to the escrow agent (Greaves Bancorp); (iii) the Sellers' transaction expenses wires; (iv) the Ironclad payoff wire; and (v) any other closing adjustment wires, each as more particularly described in the Funds Flow Memorandum.
We have coordinated with Jonathan Whitmore of Whitmore Crane & Pfeiffer LLP, counsel to the Sellers, and with David Hensley, Chief Financial Officer of the Company, to confirm the accuracy of the outstanding principal balance and accrued interest under the Ironclad Facility as reflected in the Payoff Letter. Mr. Hensley has confirmed, based on the Company's internal records and its most recent borrowing base certificate delivered to Ironclad on October 15, 2024, that the outstanding principal balance of $7,125,000.00 and the accrued interest calculation are consistent with the Company's books and records. Whitmore Crane & Pfeiffer LLP has reviewed and approved the Payoff Letter and the wire instructions on behalf of the Sellers.
VI. Enclosures
Enclosed herewith please find the following documents for your review and files:
1.  Enclosure 1: Ironclad Commercial Lending, LLC Payoff Letter dated October 28, 2024 (original, duly executed by Thomas Briggs, Senior Vice President, on behalf of Ironclad Commercial Lending, LLC);
2.  Enclosure 2: Wire Instruction Sheet (extracted from the Payoff Letter for ease of reference by Tidewater Atlantic Bank, N.A., in connection with the processing of the closing-day payoff wire); and
3.  Enclosure 3: Copies of UCC-1 Financing Statements on file with the Delaware Secretary of State in favor of Ironclad Commercial Lending, LLC (File Nos. 2021-1742856 and 2021-1742901), for reference in connection with the preparation and filing of UCC-3 termination statements following receipt of the payoff.
VII. Action Items and Closing Instructions
In order to ensure an orderly and timely Closing, we respectfully request that each addressee and copy recipient take the following actions promptly upon receipt of this letter:
1.  Patrick Lennox and Conor Muldoon (Solstice): Please review the Payoff Letter enclosed as Enclosure 1 and confirm your receipt, review, and approval of the payoff terms (including the Payoff Amount and the Good Through Date) by reply email to the undersigned no later than 5:00 p.m. (Eastern Time) on October 30, 2024. In the event that you identify any discrepancy or have any questions regarding the Payoff Amount or any component thereof, please notify us immediately so that we may coordinate with Ironclad to resolve such issue prior to the Closing.
2.  Margaret Chu (Tidewater Atlantic Bank, N.A.): Please confirm that (a) the Ironclad payoff wire in the amount of $7,341,822.16 will be included in the closing-day wire schedule as Line Item 4 in the Funds Flow Memorandum, (b) Tidewater Atlantic Bank is prepared to initiate the wire on October 31, 2024, upon receipt of joint release instructions, and (c) the Buyer Funding Account will be funded with sufficient available balances to cover all closing-day wire transfers, including the Ironclad payoff wire, as of the morning of October 31, 2024. Please also confirm that the wire will be processed as a Fedwire transfer for same-day settlement.
3.  Post-Closing Follow-Up: Calderwood & Harkness LLP will follow up directly with Thomas Briggs at Ironclad following the Closing to (a) confirm Ironclad's receipt of the Payoff Amount in full, (b) obtain written confirmation of the termination of the Credit Agreement and all related loan documents, and (c) obtain the executed UCC-3 termination statements for filing with the Delaware Secretary of State. We will circulate confirmation of each of the foregoing to all parties promptly upon receipt.
Should you have any questions regarding the Payoff Letter, the wire instructions, or any other aspect of the matters addressed in this letter, please do not hesitate to contact the undersigned, Tiffany Rosenthal, at (212) 546-8147 or trosenthal@calderwoodharkness.com, or Beatrice Holloway at (212) 546-8012 or bholloway@calderwoodharkness.com. We look forward to a smooth and successful Closing on October 31, 2024.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Tiffany Rosenthal Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8147
Email: trosenthal@calderwoodharkness.com
Approved by:
________________________________________
Beatrice Holloway Partner, Mergers & Acquisitions Calderwood & Harkness LLP 590 Lexington Avenue, 35th Floor New York, New York 10022 Telephone: (212) 546-8012
Email: bholloway@calderwoodharkness.com
Matter No.: 1037-00006
cc: (via email)
Helena Byrne, Executive Vice President, Corporate Development & Strategy, Solstice Biomedical Devices Ltd.
Conor Muldoon, Chief Financial Officer, Solstice Biomedical Devices Ltd.
Margaret Chu, Managing Director, Healthcare Lending Group, Tidewater Atlantic Bank, N.A.
Jonathan Whitmore, Lead Partner, Whitmore Crane & Pfeiffer LLP
Andrew Fitzpatrick, Associate, Calderwood & Harkness LLP (internal)
Natasha Grier, Paralegal, Calderwood & Harkness LLP (internal)
Enclosures (3)
This letter and its enclosures contain information that is privileged, confidential, and/or subject to the attorney-client privilege and attorney work product doctrine. This communication is intended solely for the use of the individual(s) or entity(ies) to whom it is addressed. If you are not the intended recipient, please notify the sender immediately and destroy all copies of this communication. Any unauthorized review, use, disclosure, or distribution of this communication is strictly prohibited.
Term | Detail
Borrower | Meridian Surgical Technologies, Inc., a Delaware corporation (EIN: 84-3192057; Delaware Secretary of State File No. 5819734)
Lender | Ironclad Commercial Lending, LLC, a Delaware limited liability company (headquarters: 600 Travis Street, Suite 2200, Houston, Texas 77002)
Key Contact at Ironclad | Thomas Briggs, Senior Vice President
Facility Type | Senior secured revolving credit facility
Facility Size | $12,000,000 (Twelve Million Dollars)
Facility Purpose | Working capital and general corporate purposes of the Company
Governing Agreement | Credit Agreement, dated as of March 15, 2021, by and between the Company, as Borrower, and Ironclad, as Lender (as amended by that certain First Amendment to Credit Agreement, dated as of January 10, 2023, and that certain Second Amendment to Credit Agreement, dated as of September 8, 2023, and as further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement")
Maturity Date | March 15, 2026
Security | First-priority security interest in substantially all assets of the Company, including accounts receivable, inventory, equipment, intellectual property, and general intangibles
Component | Amount
Outstanding principal balance on the revolving credit facility | $7,125,000.00
Accrued and unpaid interest through the Good Through Date (November 1, 2024) | $201,572.16
Prepayment premiums or breakage costs | $0.00
Administrative and processing fees | $15,250.00
Total Payoff Amount | $7,341,822.16
Wire Detail | Information
Beneficiary Name | Ironclad Commercial Lending, LLC
Payoff Account Number | ICL-PAYOFF-7741
Receiving Bank | Tarrant Securities
Receiving Bank ABA/Routing Number | 111000025
Reference/Memo Line | Payoff — Meridian Surgical Technologies, Inc. Revolving Credit Facility; Attention: Thomas Briggs
Line Item | Amount
Base Purchase Price | $220,000,000.00
Less: Indemnity Escrow Amount (12% of Base Purchase Price) | ($26,400,000.00)
Less: Ironclad Payoff Amount | ($7,341,822.16)
Less: Sellers' Transaction Expenses (estimated) | ($4,825,000.00)
Plus: Estimated Net Working Capital Surplus | $675,000.00
Estimated Closing Cash Consideration | $182,108,177.84

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