Contract analysis

I. Purpose and Executive Summary The purpose of this memorandum is to set forth the recommended negotiation strategy for Stonefield Logistics Group Inc. ("SLG" or the "Company") in connection with the consensual out-of-court restructuring of approximately $485 million in funded debt obligations. As detailed in Section II below, total funded debt actually stands at $475.1 million, inclusive of $8.1 million of accrued

II. Current Posture and Context A. Prior Meetings and Status of Discussions Calderwood & Harkness was formally engaged on April 3, 2023, when the engagement letter was executed by the Company's General Counsel, Howard Kessler. Since that date, the engagement team has conducted extensive diligence on the Company's capital structure, financial condition, and contractual obligations, and has participated in the followin

III. Negotiation Strategy — First Lien Lender Group A. Objectives The Company's primary objectives in negotiating with the first lien lender group are as follows: (i) Obtain consent from the "Required Lenders" — defined under the existing credit agreement as holders of more than 50% of outstanding term loan B loans (i.e., more than $142.5 million of the $285.0 million outstanding) — for an amendment to the first lien

IV. Negotiation Strategy — Mezzanine Ad Hoc Group A. Objectives The Company's objectives in the mezzanine negotiation are as follows: (i) Achieve the full equitization of the $140.0 million mezzanine note principal plus $8.1 million of accrued PIK interest, for total claims of $148.1 million, in exchange for a package of preferred equity, common equity, and governance rights as described below. (ii) Eliminate all mez

V. Negotiation Strategy — New Money Provider (Belvedere) A. Objectives The Company's objectives in negotiating with Belvedere Credit Opportunities Fund LP are as follows: (i) Secure a $55.0 million super-priority first-out term loan to provide the Company with fresh liquidity for ongoing operations, transaction costs associated with the restructuring, and a post-closing liquidity cushion. (ii) Structure the facility

VI. Equity Allocation and Sponsor Dynamics A. Proposed Pro Forma Equity Split The proposed pro forma equity allocation following the completion of the restructuring is as follows: Ridgeline's current 100% common equity position reflects its original $210.0 million investment in the December 2017 LBO. Post-restructuring, Ridgeline's ownership will be diluted to 47.5% of pro forma common equity. While this represents a

VII. Fallback Analysis — Chapter 11 Filing A. Overview of Chapter 11 Alternative In the event that the consensual out-of-court restructuring fails — whether due to the inability to achieve required lender consents, the lapse or termination of the RSA, or a fundamental breakdown in negotiations with any of the three principal counterparties — the Company would need to file a voluntary petition for relief under Chapter