Contract analysis

I. Borrowing Base — Availability Reserves 1.1 Quantum of Initial Availability Reserves We acknowledge that KBW's second draft reduced the initial availability reserve from $5,000,000 to $4,000,000. We appreciate HCB's willingness to move on this point, and we understand that this reduction was intended to reflect the discussion on the October 3 call. However, Greenfield's position remains that the initial availabilit

II. Borrowing Base — Advance Rates on Crop-Input Inventory 2.1 Crop-Input Inventory Advance Rate and Eligibility Criteria KBW's second draft maintains a 70% advance rate for eligible crop-input inventory (encompassing seed, fertilizer, and crop protection chemicals), applied against the lower of cost or market value. We confirm that the 70% advance rate is consistent with the September 9, 2022 revised term sheet, and

III. Borrowing Base — Warehouse Receipt Valuation 3.1 CBOT Settlement Price Reference and Basis Determination KBW's second draft now specifies that eligible grain warehouse receipts are valued at 80% of "market value," defined as the Chicago Board of Trade ("CBOT") settlement price less "applicable basis." Greenfield accepts this valuation methodology in principle and views the 80% advance rate and the CBOT-minus-bas

IV. Field Examination Scheduling and Cost Allocation 4.1 Frequency and Cost Cap KBW's second draft provides for field examinations conducted by Pryor & Associates LLC (or such other firm as the Agent may designate in its sole discretion) at the Borrower's sole expense. The draft imposes no limitation on the frequency of examinations outside a Trigger Period and no cap on examination costs. Greenfield accepts two (2)

V. Commodity Hedging Negative Pledge 5.1 Scope of Restriction

Section 7.07 of KBW's second draft prohibits the Borrower and Guarantors from entering into commodity hedging transactions in excess of 80% of "anticipated production" without the prior written consent of the Administrative Agent. Greenfield accepts the 80% cap as consistent with the September 9 term sheet and as a reasonable limit on speculative hedging activity. However, Greenfield has several substantive objection

VI. Anti-Cash-Hoarding Provisions 6.1 Minimum Excess Availability Covenant

Section 8.13 of KBW's second draft includes a minimum excess availability covenant requiring the Borrower to maintain Excess Availability (defined as the lesser of the Borrowing Base and the Aggregate Commitment, less the sum of outstanding Revolving Loans and outstanding Letter of Credit Obligations) of not less than $5,000,000 at all times, tested on a daily basis. Greenfield accepts the $5,000,000 threshold and th

Section 6.15 of KBW's second draft imposes full cash dominion at all times. As drafted, all proceeds of collateral deposited into the Borrower's deposit accounts would be swept daily into a concentration account controlled by the Administrative Agent and applied to reduce outstanding Revolving Loans. This is the most restrictive form of cash management available in an ABL facility, and Greenfield submits that it is n

Section 6.14 of KBW's second draft requires the Borrower and Guarantors to execute deposit account control agreements on all deposit accounts maintained by the Loan Parties, including accounts maintained at Prairie National Bank, N.A. ("PNB"), which is the Borrower's current primary operating bank and the agent and lender under the existing senior secured credit facility that will be refinanced with the proceeds of t

VII. Reporting Requirements During Trigger Period

Section 6.02(c) of KBW's second draft establishes the following reporting cadence during a Trigger Period: (i) weekly borrowing base certificates, to be delivered by the close of business on the first business day following the end of each calendar week, and (ii) daily cash receipts reporting, to be delivered by the close of business on each business day for the preceding business day's activity. Greenfield accepts t

VIII. Other Open Items 8.1 Material Adverse Change/Effect Definition

Section 1.01 of KBW's second draft includes a broadly drafted definition of "Material Adverse Change" (which also serves as the definition of "Material Adverse Effect") covering any event, change, development, circumstance, or condition that has had, or would reasonably be expected to have, a material adverse effect on (i) the financial condition, operations, assets, liabilities, or prospects of the Borrower or any o

Section 5.01(q) of KBW's second draft requires, as a condition precedent to closing, the delivery of all insurance endorsements designating the Collateral Agent as loss payee and additional insured on all required insurance policies maintained by the Loan Parties. While Greenfield acknowledges the importance of this collateral protection requirement, the practical reality is that obtaining the necessary endorsements

Section 5.02(a) of KBW's second draft requires that all representations and warranties set forth in Article IV of the Credit Agreement be "true and correct in all material respects" as of each borrowing date (with the same force and effect as though made on and as of such date). Greenfield requests the following modifications to this bring-down standard, which are consistent with established market practice: Double-M

IX. Summary of Key Requested Changes For ease of reference, the following is a summary of the principal items requiring resolution before the Credit Agreement can be finalized: \* \* \* We request that KBW and HCB — and in particular Gregory Thorn and Allison Kuo — review the enclosed markup and this issues list at their earliest convenience. We believe that the parties have made substantial progress toward a final C