Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze and compare the "change of control" definitions and related consequences under (i) the Amended and Restated Credit Agreement, dated as of April 7, 2022 (the "Senior Credit Agreement"), among Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), Whitmore National Bank, N.A. ("Whitmore") as Administrative Agent and Collateral Agent, and the senior len

II. Background and Transaction Context A. The Borrower Stonefield Logistics Group Inc. is a Delaware corporation headquartered at 4800 Commerce Parkway, Suite 1200, Fort Worth, Texas 76107. Stonefield operates a national network of less-than-truckload ("LTL") and intermodal freight services across the continental United States, with approximately 185 terminal locations, 4,200 owned tractors, and 12,800 trailers. For

III. Change of Control Definition — Senior Credit Agreement (as Proposed to Be Amended) A. Current Definition The Amended and Restated Credit Agreement dated as of April 7, 2022, defines "Change of Control" in Section 1.01 (Definitions), and the occurrence of a Change of Control constitutes an Event of Default under Section 7.01(j) of the Senior Credit Agreement. As currently in effect (and as proposed to remain in e

IV. Change of Control Definition — Mezzanine Credit Agreement A. Definition. The draft Mezzanine Credit Agreement, as circulated by Archer Blackwell & Moss LLP on August 18, 2023, defines "Change of Control" in Section 1.01 (Definitions) and contains three triggering events, which are set forth below. We note that the Mezzanine Credit Agreement does not include a Continuing Directors trigger, an omission that represe

V. Side-by-Side Comparison of Change of Control Triggers A. Tabular Comparison The following table provides a detailed side-by-side comparison of each element of the change of control definition under the Senior Credit Agreement and the Mezzanine Credit Agreement, together with our observations regarding areas of alignment and divergence: B. Analysis of Key Divergences

1. Scope of the Cascade Ridge Carve-Out. As illustrated in the table above, the most significant definitional divergence between the two agreements concerns the scope of persons excluded from the voting equity acquisition trigger. The Senior Credit Agreement employs the defined term "Permitted Holder," which is constructed as a multi-layered definition designed to accommodate the full range of structures and relation

2. Direct Parent / Wholly-Owned Subsidiary Requirement. Both the Senior Credit Agreement and the Mezzanine Credit Agreement require that Stonefield remain at all times a direct wholly-owned subsidiary of the specifically named intermediate holding company, Cascade Ridge SLG Holdings, LLC. While this requirement is aligned across the two agreements, it presents a structural rigidity that merits careful consideration.

4. Board Composition Trigger (Senior Agreement Only). As described in Section III.A above, the Senior Credit Agreement contains a fourth change of control trigger based on the composition of Stonefield's board of directors (the "Continuing Directors" trigger), which provides that a Change of Control occurs if a majority of the board seats are occupied by persons who are not Continuing Directors (defined to include or

VI. Interaction with Intercreditor Agreement The Intercreditor Agreement, to be dated as of September 14, 2023 (the "Intercreditor Agreement"), will be entered into among Whitmore National Bank, N.A. as Senior Agent, Ridgeline Mezzanine Capital Fund III, LP as Mezzanine Lender, and acknowledged and agreed by Stonefield Logistics Group Inc. and the subsidiary guarantors. The Intercreditor Agreement governs the relativ

VII. Interaction with Warrant Put Rights A. Warrant Structure Under the Warrant Agreement to be dated as of September 29, 2023 (the closing date of the Mezzanine Loan), Ridgeline will hold warrants representing 3.0% of the fully-diluted equity of Stonefield on a post-exercise basis, with a nominal exercise price of $0.01 per share. The warrants will be exercisable at any time on or after September 29, 2024 (the first

VIII. Interaction with Cascade Ridge Sponsor Consent Rights A. Structural Control As the controlling equity holder of Stonefield — holding approximately 78.4% of the outstanding equity interests through SLG Holdings — Cascade Ridge Capital Partners, LLC exercises effective control over all fundamental corporate decisions at Stonefield. This control is exercised through Cascade Ridge's rights under Stonefield's organi

IX. Potential Gap Scenarios We have identified four potential gap scenarios in which the divergences between the Senior Credit Agreement and Mezzanine Credit Agreement change of control definitions could produce unexpected or problematic outcomes. Each scenario is described below, together with an analysis of the triggering effects under each agreement and our recommended mitigation strategies. A. Scenario 1: Interna