Contract analysis

I. PURPOSE AND EXECUTIVE SUMMARY A. Purpose The purpose of this memorandum is to provide Greenfield Agricultural Partners LLC ("GAP" or the "Borrower") with a comprehensive side-by-side analysis comparing the material economic, structural, and covenant terms of the following two credit facilities: (a) The proposed $80,000,000 senior secured asset-based revolving credit facility to be arranged by Heartland Commerce Ba

1. Increased Credit Capacity. The Proposed Facility provides a $25,000,000 increase in total commitments ($80,000,000 versus $55,000,000), representing approximately a 45.5% increase in credit capacity. This increase is critical for funding Greenfield's peak seasonal working capital needs, which management estimates will require peak inventory financing of approximately $125,000,000 to $145,000,000 during the Septemb

2. Improved Pricing. Pricing under the Proposed Facility is meaningfully improved relative to the Existing Facility. The Proposed Facility features a tiered margin grid of SOFR + 2.00% to 2.50% (depending on utilization as measured by Excess Availability), compared to the Existing Facility's flat margin of SOFR + 2.75%. At Tier 1 pricing, this represents a 75 basis point improvement. In addition, the unused line fee

3. Additional Structural Complexity. However, the Proposed Facility introduces significant additional structural requirements that are not present in the Existing Facility. Most notably, the Proposed Facility is structured as a true asset-based lending ("ABL") facility, meaning that availability is governed by a formal borrowing base formula tied to the net orderly liquidation value of eligible collateral, subject to

4. Extended Maturity. The Proposed Facility extends maturity to four years from closing (anticipated closing date in October 2022, yielding a maturity of approximately October 2026). This provides substantially more runway than the Existing Facility, which matures on March 31, 2023 — approximately six months from the date of this memorandum. The extended maturity eliminates near-term renewal risk and provides Greenfi

5. Syndicated Lender Base. The Proposed Facility is a syndicated credit facility with three participating lenders — HCB ($40,000,000 commitment, 50.00%), Meridian Agricultural Credit Corporation ("MACC") ($25,000,000, 31.25%), and Tallgrass Capital Fund II, LP ("Tallgrass") ($15,000,000, 18.75%) — whereas the Existing Facility is a bilateral relationship with PNB as the sole lender. The syndicated structure adds docu

6. Organization of This Memorandum. The balance of this memorandum is organized into the following sections: (i) a summary comparison table (Section II); (ii) facility size, structure, and maturity (Section III); (iii) borrowing base mechanics (Section IV); (iv) pricing comparison (Section V); (v) collateral and security package (Section VI); (vi) financial covenants (Section VII); (vii) restrictive covenants (Sectio

II. SUMMARY COMPARISON TABLE The following table provides a high-level side-by-side comparison of the principal terms of the Proposed Facility and the Existing Facility. Each row is discussed in greater detail in the corresponding section of this memorandum. Where information regarding the Existing Facility is unavailable or requires client confirmation, we have noted accordingly.

III. FACILITY SIZE, STRUCTURE, AND MATURITY A. Commitment Size The Proposed Facility provides for a total revolving credit commitment of $80,000,000, representing a $25,000,000 (45.5%) increase over the Existing Facility's $55,000,000 commitment. As of September 30, 2022, total outstanding borrowings under the Existing Facility are approximately $38,750,000, which amount will be refinanced and repaid in full upon clo

IV. BORROWING BASE MECHANICS A. Overview The borrowing base structure is the most significant structural difference between the Proposed Facility and the Existing Facility, and it warrants careful analysis. The Proposed Facility is structured as a true asset-based lending facility. Under an ABL structure, the amount that the Borrower may borrow at any given time is not simply the total commitment amount; rather, it i

V. PRICING COMPARISON A. Interest Rate The interest rate structures of the two facilities differ significantly. The Proposed Facility features a three-tier margin grid that provides pricing benefits when Greenfield maintains higher levels of Excess Availability (i.e., when utilization of the facility is lower). The Existing Facility, by contrast, uses a flat margin regardless of utilization level. Proposed Facility —

VI. COLLATERAL AND SECURITY PACKAGE A. Proposed Facility — Collateral The Proposed Facility requires a comprehensive collateral package consisting of first-priority perfected security interests in substantially all assets of each Loan Party (GAP, GGS, and GCI). The collateral package includes the following: Personal Property Collateral: • All accounts receivable of each Loan Party; • All inventory, including harveste

1. Deposit Account Control Agreements (DACAs). The most significant collateral difference is the Proposed Facility's requirement that the Borrower execute DACAs on all operating deposit accounts. The Existing Facility does not require DACAs. A DACA is a tri-party agreement among the Borrower, the depository bank, and the Collateral Agent that gives the Collateral Agent "control" over the deposit account within the me

2. Equity Pledges. The Proposed Facility explicitly requires a pledge of 100% of the membership interests in GGS and 100% of the stock of GCI by GAP. We should confirm with the client whether the Existing Facility includes similar equity pledges. If not, this represents an expansion of the collateral package.

3. Insurance Assignments. The Proposed Facility requires formal assignment of crop insurance and property/casualty insurance proceeds to the Collateral Agent, with appropriate endorsements naming the Collateral Agent as loss payee and additional insured. While the Existing Facility likely includes standard insurance requirements, the formality and specificity of the insurance assignment requirements under the Propose

VII. FINANCIAL COVENANTS A. Proposed Facility The Proposed Facility contains two financial maintenance provisions:

1. Springing Fixed Charge Coverage Ratio ("FCCR"). The Borrower is required to maintain a minimum FCCR of 1.10 to 1.00. However, this covenant is "springing" in nature — it is tested only during a "Trigger Period." A Trigger Period commences when Excess Availability falls below the greater of (a) 12.5% of the then-applicable Borrowing Base or (b) $10,000,000, and continues until Excess Availability has been at or abo

2. Minimum Excess Availability. The Borrower is required to maintain Excess Availability of at least $5,000,000 at all times. This is a "hard" minimum — not springing — meaning that it must be satisfied continuously, regardless of whether a Trigger Period is in effect. If Excess Availability falls below $5,000,000, the Borrower will be in breach of this covenant even if it would otherwise be in full compliance with a

VIII. RESTRICTIVE COVENANTS A. Debt Covenants The Proposed Facility limits the Borrower's ability to incur additional indebtedness outside of the credit facility. The principal permitted debt baskets under the term sheet are: • Unsecured debt basket: $3,000,000 in aggregate at any time outstanding. • Purchase money indebtedness / capital lease obligations basket: $1,500,000 in aggregate at any time outstanding. The E

IX. REPORTING REQUIREMENTS A. Proposed Facility — Standard Reporting The Proposed Facility imposes the following reporting requirements during normal operating periods (i.e., when no Trigger Period is in effect): • Monthly Borrowing Base Certificates: Delivered within twenty (20) days after the end of each calendar month, certifying the Borrowing Base as of the last day of the preceding month, together with supportin

X. CONDITIONS PRECEDENT TO CLOSING — KEY ADDITIONAL REQUIREMENTS The Proposed Facility will include customary conditions precedent to initial funding, as well as certain requirements that are specific to the ABL structure and the syndicated nature of the facility. Based on our revie