Contract analysis

Section 1.1 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: "Accounts" means all "accounts" as defined in Article 9 of the UCC, including all accounts receivable, rights to payment for goods sold, leased, licensed, or otherwise disposed of, for services rendered, or arising from any other transaction, whether or not earned by performance, together with all rights

Section 1.2 UCC Terms. Unless otherwise defined herein, terms used herein that are defined in Articles 8 and 9 of the UCC shall have the respective meanings assigned to them therein.

Section 1.3 Rules of Construction. The rules of construction set forth in Section 1.02 of the Mezzanine Credit Agreement are hereby incorporated by reference, mutatis mutandis, as if fully set forth herein. Without limiting the generality of the foregoing: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined; (b) whenever the context may require, any pronoun sh

ARTICLE II GRANT OF SECURITY INTEREST

Section 2.1 Grant. As collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, or otherwise) of all Secured Obligations, each Grantor hereby grants to the Secured Party a continuing security interest in all right, title, and interest of such Grantor in, to, and under all of the following property of such Grantor, whether now owned or existing or he

Section 2.2 Second-Priority Nature of Security Interest. Each Grantor and the Secured Party hereby acknowledge and agree that the security interest granted hereunder in the Collateral is second in priority and subordinate in all respects to the first-priority security interest of the Senior Collateral Agent (Whitmore National Bank, N.A.) in the same Collateral, granted pursuant to the Senior Security Agreement and pe

Section 2.3 Excluded Assets. Notwithstanding anything to the contrary in Section 2.1, the Collateral shall not include any of the following (collectively, "Excluded Assets"): (a) any lease, license, contract, or agreement of any Grantor to the extent (but only to the extent) that a grant of a security interest therein would constitute or result in a breach, termination, or default under, or give rise to any right of

Section 2.4 Pledged Equity. (a) Without limiting the generality of the grant set forth in Section 2.1, each Grantor hereby pledges and grants to the Secured Party a continuing second-priority security interest in all equity interests in its subsidiaries as listed on Schedule III hereto, including all shares of capital stock, membership interests, limited liability company interests, partnership interests, and other o

ARTICLE III REPRESENTATIONS AND WARRANTIES Each Grantor hereby represents and warrants to the Secured Party as follows:

Section 3.1 Organization and Good Standing. Each Grantor is duly organized, validly existing, and in good standing under the laws of its respective jurisdiction of organization, as follows: (a) Stonefield Logistics Group Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware; (b) Stonefield Intermodal Services, Inc. is a corporation duly organized, validly

Section 3.2 Authority and Enforceability. Each Grantor has full corporate or limited liability company power and authority, as applicable, to execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance by each Grantor of this Agreement have been duly authorized by all necessary corporate, limited liability company, or other organizational action, including all requisit

Section 3.3 Legal Name; Location; Jurisdiction of Organization. (a) The full legal name, employer identification number, jurisdiction of organization, chief executive office address, and type of organization of each Grantor are as follows (and as more fully set forth on Schedule I hereto): (b) No Grantor has changed its legal name, identity, jurisdiction of organization, or organizational structure at any time during

Section 3.4 Title; No Other Liens. (a) Each Grantor owns and has good and marketable title to all of its Collateral (or, with respect to Collateral that constitutes a leasehold or license interest, has valid leasehold or license rights therein), free and clear of all liens, claims, charges, security interests, and encumbrances of any kind whatsoever, except for the following (collectively, "Permitted Encumbrances"):

Section 3.5 Accounts and Receivables. All Accounts reflected in the books and records of each Grantor represent, and to each Grantor's knowledge will represent, genuine and bona fide transactions arising in the ordinary course of business, completed in accordance with the terms and provisions of the applicable contracts or agreements giving rise thereto. No Grantor has knowledge of any material dispute, setoff, defen

Section 3.6 Equipment and Vehicles. (a) All Equipment and Vehicles (including the rolling stock identified on Schedule V hereto) owned by each Grantor are in good working condition and repair, reasonable and ordinary wear and tear excepted, and are adequate and suitable for the purposes for which they are used in the conduct of such Grantor's business. (b) All Equipment and Vehicles are located at the premises identi

Section 3.7 intellectual Property. (a) Schedule VI hereto sets forth a complete and accurate list of all registered intellectual Property of each Grantor (including all trademarks, service marks, trade names, patents, patent applications, copyrights, copyright registrations, and domain names), including the registration or application numbers, dates of registration or filing, and the applicable registering authority.

Section 3.8 Pledged Equity. (a) All Pledged Equity listed on Schedule III hereto has been duly authorized, validly issued, and, in the case of shares of capital stock, is fully paid and nonassessable, and, in the case of membership interests or limited liability company interests, has been validly issued in accordance with the applicable operating agreement or other organizational documents of the relevant issuer. (b

Section 3.9 No Conflicts. The execution, delivery, and performance by each Grantor of this Agreement do not and will not: (a) violate or conflict with the certificate or articles of incorporation, bylaws, certificate of formation, operating agreement, limited partnership agreement, or other organizational documents of such Grantor; (b) violate or conflict with any applicable law, statute, rule, regulation, judgment,

Section 3.10 Deposit Accounts and Securities Accounts. Schedule VII hereto sets forth a complete and accurate list of all deposit accounts and securities accounts maintained by each Grantor as of the date hereof, including the name and address of each depository bank or securities intermediary, the account number, and the type of account (e.g., operating, payroll, money market, escrow, or securities). Except as set f

Section 3.11 Commercial Tort Claims. Schedule IV hereto sets forth a complete and accurate description of all commercial tort claims of each Grantor having an estimated value in excess of Two Hundred Fifty Thousand Dollars ($250,000) as of the date hereof, including the parties thereto, the nature of the claim, the court or tribunal (if any) in which such claim is pending, and the estimated value thereof. Except as s

Section 3.12 Perfection. (a) Upon the filing of the UCC-1 financing statements in the appropriate filing offices set forth below, the delivery of all certificated securities and instruments to the Secured Party (or its agent or bailee), and the execution and delivery of any deposit account control agreements or securities account control agreements required hereunder, the Secured Party will have a valid and perfected

ARTICLE IV COVENANTS Each Grantor hereby covenants and agrees with the Secured Party as follows:

Section 4.1 Maintenance of Collateral. Each Grantor shall (a) maintain all tangible Collateral (including Equipment and Vehicles) in good working condition and repair, reasonable and ordinary wear and tear excepted, consistent with industry practices for companies engaged in the LTL and intermodal freight transportation business; and (b) maintain adequate insurance coverage on the Collateral, in types, amounts, and w

Section 4.2 Defense of Title. Each Grantor shall, at its own cost and expense, defend the Collateral against and take such other actions as are reasonably necessary to remove any lien, claim, charge, or encumbrance (other than Permitted Liens) on or to the Collateral, and shall defend the right, title, and interest of the Secured Party in and to the Collateral against the claims and demands of all persons at any time

Section 4.3 Further Assurances. (a) Each Grantor shall, from time to time, at its own cost and expense, promptly execute and deliver to the Secured Party all such further instruments, agreements, and documents, and take all such further actions (including the filing of UCC financing statements, UCC continuation statements, UCC amendments, and other filings and recordings), as the Secured Party may from time to time r

Section 4.4 No Disposition of Collateral. No Grantor shall sell, transfer, assign, exchange, lease, license, or otherwise dispose of, or grant any option or other right to purchase, lease, or otherwise acquire, any Collateral or any interest therein, except as expressly permitted by the Mezzanine Credit Agreement (including, without limitation, sales of inventory in the ordinary course of business, dispositions of wo

Section 4.5 No Other Liens. No Grantor shall create, incur, assume, or permit to exist any lien, security interest, charge, or encumbrance on or with respect to any of the Collateral, other than: (a) the first-priority liens and security interests in favor of the Senior Collateral Agent pursuant to the Senior Security Agreement; (b) the second-priority liens and security interests created by this Agreement in favor o

Section 4.6 Change of Name, Identity, or Location. No Grantor shall change its legal name, identity, state or jurisdiction of organization, organizational structure (including by merger, consolidation, conversion, or otherwise), or the location of its chief executive office without providing at least thirty (30) days' prior written notice to the Secured Party, which notice shall include such information as the Secure

Section 4.7 Maintenance of Books and Records. Each Grantor shall maintain complete and accurate books and records relating to the Collateral and the financial condition of such Grantor, in form and substance consistent with past practice and in accordance with generally accepted accounting principles. Each Grantor shall permit the Secured Party (and its agents, advisors, and representatives), subject to the terms and

Section 4.8 intellectual Property. (a) Each Grantor shall use commercially reasonable efforts to maintain and preserve all intellectual Property that is material to its business, including, without limitation, (i) the timely filing of all necessary renewal applications, affidavits of use or continued use, and maintenance fees with respect to all registered trademarks, service marks, and patents, (ii) the prosecution

Section 4.9 Pledged Equity. (a) Each Grantor shall deliver to the Secured Party all certificates or instruments representing Pledged Equity, together with undated stock powers, transfer powers, or instruments of transfer, in each case duly executed in blank by the applicable Grantor. In the event that any Grantor acquires or receives additional equity interests in any of its subsidiaries after the date hereof (whethe

Section 4.10 Notices Regarding Collateral. Each Grantor shall promptly (and in any event within fifteen (15) days) notify the Secured Party in writing of: (a) any material loss of, damage to, or destruction of any Collateral (including any casualty event affecting Equipment, Vehicles, or real property on which Collateral is located); (b) any claim, action, proceeding, or investigation by any person affecting title to

Section 4.11 Deposit Accounts. (a) Each Grantor shall maintain its primary operating accounts at the institutions and in the accounts identified on Schedule VII hereto. No Grantor shall open any new deposit account or securities account with any bank or other financial institution without providing prior written notice to the Secured Party (and, in any event, within thirty (30) days of opening such account, updating

Section 4.12 Insurance. (a) Each Grantor shall maintain insurance on the Collateral and its business and properties in such types, with such coverages, with such carriers, and with such deductibles as are required under the Mezzanine Credit Agreement and are consistent with the insurance requirements applicable to companies of similar size engaged in the freight transportation industry. (b) The Secured Party shall be

Section 5.1 UCC Financing Statements. (a) Each Grantor hereby authorizes the Secured Party to prepare, execute (to the extent required), and file (or cause to be filed) UCC-1 financing statements (and any amendments, assignments, or continuation statements related thereto) in all appropriate filing offices in the jurisdictions identified below, describing the Collateral in such manner as the Secured Party may determi

Section 5.2 Control Agreements. (a) To the extent required by the Secured Party and not inconsistent with the terms and conditions of the Intercreditor Agreement, each Grantor shall use commercially reasonable efforts to execute, deliver, and cause to be executed and delivered, deposit account control agreements (in form and substance reasonably satisfactory to the Secured Party) with respect to each deposit account

Section 5.3 Delivery of Instruments and Certificated Securities. (a) Each Grantor shall deliver to the Secured Party (or its agent or bailee designated in writing by the Secured Party) all promissory notes, instru