Contract analysis

I. Executive Summary Calderwood & Harkness LLP has been engaged as restructuring counsel to Stonefield Logistics Group Inc. ("Stonefield" or the "Company"), a Delaware corporation headquartered at 4200 Commerce Street, Suite 1500, Dallas, Texas 75201, since April 3, 2023. This memorandum is furnished to the Board of Directors (the "Board") in connection with its scheduled meeting on June 29, 2023, and is intended to

II. Background and Context of Financial Distress A. Company Overview Stonefield Logistics Group Inc. is a Delaware corporation engaged in the business of freight brokerage, last-mile delivery, and warehousing services across the United States. The Company operates approximately 26 terminals in 14 states and employs approximately 3,800 full-time and part-time employees. Stonefield's operations are conducted through fo

III. Pre-Restructuring Capital Structure The Company's current capital structure, as of March 31, 2023 (and as expected to remain substantially unchanged at the time of RSA execution), is summarized in the table below: The first lien credit facilities are governed by the First Lien Credit Agreement, dated as of December 15, 2017 (as amended from time to time, the "First Lien Credit Agreement"), among Stonefield Logis

IV. RSA Parties and Consent Levels A. Company Side The RSA will be executed by the following parties on the Company/Sponsor side: • Stonefield Logistics Group Inc. — the Company and issuer/borrower under the first lien credit facilities and the Mezzanine Indenture. • Ridgeline Capital Partners Fund III, L.P. — the Sponsor, and indirect holder of 100% of the common equity of the Company (through intermediate holding c

V. Summary of Restructuring Transactions Under the RSA The RSA contemplates a series of integrated restructuring transactions, each of which is a condition to the closing of the others (unless waived by the requisite parties). The key terms of each transaction are summarized below. A. Amend-and-Extend of First Lien Term Loan B The TLB will be amended and extended pursuant to an Amended and Restated First Lien Credit

VI. Post-Restructuring Capital Structure Upon consummation of all restructuring transactions, the Company's capital structure will be as follows: Debt The total debt reduction achieved through the restructuring is $100.1 million, calculated as $475.1 million (pre-restructuring total funded debt) minus $375.0 million (post-restructuring total funded debt). This reduction is entirely attributable to the equitization of

VII. RSA Milestones and Key Dates The RSA includes a detailed milestone schedule, compliance with which is a condition to the continued obligations of the parties. Failure to meet any milestone constitutes a termination event exercisable by the consenting creditors (subject to any applicable cure periods). The milestone schedule is as follows: It should be noted that the actual target closing date discussed among the

VIII. RSA Termination Events The RSA contains a comprehensive set of termination provisions, which are intended to balance the commitment obligations of each party with the need for appropriate off-ramps in the event of material developments. The termination events are organized into four categories. A. Mutual Termination The RSA may be terminated at any time by the written agreement of (i) the Company, (ii) the Spon

IX. Fiduciary Out Provisions The RSA preserves the ability of the Board of Directors of Stonefield to exercise its fiduciary duties under Delaware law. As discussed in the memorandum provided by Calderwood & Harkness on April 12, 2023 regarding fiduciary duties in the zone of insolvency, the directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and, when the corporation is in

X. Transaction Costs The RSA requires the Company to pay, or reimburse from closing proceeds, all reasonable and documented professional fees and expenses of the consenting creditor groups, in addition to the Company's own professional fees. The estimated aggregate transaction costs are summarized below: The D&O tail insurance policy is being procured from Northgate Specialty Insurance Company, providing $15.0 millio

XI. Definitive Documentation and Implementation Steps A. Overview of Definitive Documents to be Negotiated and Executed The definitive documentation for the restructuring transactions is expected to comprise the following principal agreements and instruments:

1. Amended and Restated First Lien Credit Agreement — among Stonefield Logistics Group Inc., as borrower, the lenders party thereto, and Pinnacle National Bank, N.A., as Administrative Agent and Collateral Agent, amending and restating the existing First Lien Credit Agreement to reflect the revised terms of the TLB and Revolver described in Sections V.A and V.B above.

2. Amendment No. 1 Cover Agreement — the technical amendment cover agreement pursuant to which the consenting TLB and Revolver lenders will consent to the Amended and Restated First Lien Credit Agreement.

3. Super-Priority Credit Agreement — among Stonefield Logistics Group Inc., as borrower, and Belvedere Credit Opportunities Fund LP, as Administrative Agent, Collateral Agent, and initial lender, establishing the terms of the $55.0 million Super-Priority Facility.

4. Super-Priority Guaranty Agreement — by SLG Holdings Inc., SLG Freight Inc., SLG Last Mile Inc., and SLG Warehousing Inc., as Guarantors, guaranteeing the obligations of the Company under the Super-Priority Credit Agreement.

5. Super-Priority Pledge and Security Agreement — granting a super-priority first-out security interest in substantially all assets of the Company and the Guarantors in favor of Belvedere Credit Opportunities Fund LP, as Collateral Agent.

6. Amended and Restated Intercreditor Agreement — among Belvedere Credit Opportunities Fund LP, as Super-Priority Agent, Pinnacle National Bank, N.A., as First Lien Agent, and the Company, establishing the relative lien priorities, standstill periods, purchase options, and DIP financing provisions described in Section V.F above.

7. Exchange Agreement — between Stonefield Logistics Group Inc. and each exchanging mezzanine holder, setting forth the terms and conditions of the exchange of Mezzanine Notes for Series A Preferred Equity and common equity.

8. Consent Solicitation Statement — the offering and consent solicitation document to be distributed to all holders of the Mezzanine Notes, describing the terms of the exchange offer, the exit consent amendments, and the deadlines for tender and consent.

9. Supplemental Indenture (Exit Consent Amendments) — between Stonefield Logistics Group Inc. and Continental Fiduciary Trust Company, as Trustee, implementing the exit consent amendments to the Mezzanine Indenture.

10. Amended and Restated Stockholders' Agreement — among the Company, Ridgeline Capital Partners Fund III, L.P., and the mezzanine equitization recipients, governing Board designation rights, consent rights, transfer restrictions, tag-along and drag-along provisions, and other equity governance matters.

11. Amended and Restated Certificate of Incorporation — to be filed with the Delaware Secretary of State, reflecting the authorization of the Series A Preferred Stock and any other amendments to the Company's charter required in connection with the restructuring.

12. Certificate of Designations — Series A Preferred Stock — to be filed with the Delaware Secretary of State, setting forth the rights, preferences, and privileges of the Series A Preferred Stock, including liquidation preference, PIK dividend rate, redemption provisions, and voting rights.

13. Registration Rights Agreement — granting customary registration rights to the mezzanine equitization recipients with respect to the common equity received in the exchange, in the event of a future initial public offering or other registered offering of the Company's securities. Calderwood & Harkness anticipates that initial drafts of the principal definitive documents will be circulated to all parties by August 1

XII. Key Risks and Considerations The Board should be aware of the following key risks and considerations in connection with its evaluation of the RSA. A. Holdout Risk (Mezzanine) The primary execution risk associated with the restructuring is the potential failure to achieve the required consent threshold (greater than 66⅔%) among mezzanine noteholders. As discussed above, the Ad Hoc Group currently holds $122.0 mil