1012-00001 · Client 1012 · Correspondence

letter-intercreditor-redline-commentary.docx DOCUMENT Finance & Banking

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CALDERWOOD & HARKNESS LLP Attorneys at Law 601 Lexington Avenue New York, New York 10022

Telephone: (212) 506-7000 Facsimile: (212) 506-7001

Writer's Direct Dial: (212) 506-7284 Writer's Email: sokafor@calderwoodharkness.com

August 28, 2023

VIA EMAIL AND HAND DELIVERY

David C. Renshaw, Esq. Renshaw Pratt LLP One Liberty Plaza, 43rd Floor New York, New York 10006

Re: Proposed Intercreditor Agreement — Stonefield Logistics Group Inc. / $120,000,000 Mezzanine Financing

Draft Intercreditor Agreement circulated by Renshaw Pratt LLP on August 11, 2023 (the "Draft ICA")

Amended and Restated Credit Agreement, dated as of April 7, 2022 (originally dated as of November 15, 2019), among Stonefield Logistics Group Inc., as Borrower, Whitmore National Bank, N.A., as Administrative Agent and Collateral Agent, and the lenders party thereto (as amended, restated, supplemented, or otherwise modified from time to time, the "Senior Credit Agreement")

Proposed Mezzanine Credit Agreement among Stonefield Logistics Group Inc., as Borrower, Ridgeline Mezzanine Capital Fund III, LP, as Mezzanine Lender, and the guarantors party thereto (the "Mezzanine Credit Agreement")

Calderwood & Harkness Matter No. 1012-00001

Dear David:

I. Introduction

This firm represents Stonefield Logistics Group Inc., a Delaware corporation headquartered at 4800 Commerce Parkway, Suite 1200, Fort Worth, Texas 76107 ("Stonefield" or the "Borrower"), in connection with the proposed $120,000,000 mezzanine term loan facility (the "Mezzanine Facility") to be provided by Ridgeline Mezzanine Capital Fund III, LP (the "Mezzanine Lender") pursuant to the Mezzanine Credit Agreement referenced above.

We acknowledge receipt of the draft Intercreditor Agreement circulated by your firm on behalf of Whitmore National Bank, N.A., in its capacity as Administrative Agent and Collateral Agent under the Senior Credit Agreement (in such capacity, the "Senior Agent"), on August 11, 2023. We have reviewed the Draft ICA in detail and have consulted with our client and its management team regarding the terms set forth therein.

Enclosed herewith is Stonefield's proposed redline to the Draft ICA (marked against the August 11, 2023 draft), together with this commentary letter, which sets forth the Borrower's principal comments and the rationale supporting each proposed modification. We have organized our comments on a section-by-section basis to facilitate your review and to promote an efficient path toward resolution of the outstanding issues.

A copy of this letter and the enclosed redline is being provided simultaneously to Archer Blackwell & Moss LLP (Attention: Harrison T. Moss and Angela N. Whitford), counsel to the Mezzanine Lender, for their independent review and comment. We understand that Archer Blackwell & Moss may have additional comments from the Mezzanine Lender's perspective, and we anticipate that those comments will be provided separately to your firm.

For context, as you are aware, the senior lender syndicate under the Senior Credit Agreement currently consists of Whitmore National Bank, N.A. ($90,000,000 hold), Greystone Commercial Lending Corp. ($75,000,000), Heritage Pacific Bank ($60,000,000), and Clearfield Capital Finance, LLC ($50,000,000), for a total senior facility commitment of $275,000,000, comprised of the $225,000,000 Term Loan B facility and the $50,000,000 revolving credit facility. The Senior Agent consent solicitation in connection with Amendment No. 3 to the Senior Credit Agreement was commenced on August 18, 2023, and this redline and commentary letter are being provided in parallel with those ongoing consent efforts. We understand that the requisite senior lenders holding a majority of the outstanding term loans and revolving commitments are expected to deliver their consents by early September 2023.

II. Overview of Borrower's Approach

At the outset, we wish to emphasize that the Borrower's comments to the Draft ICA are designed to ensure that the Intercreditor Agreement, as ultimately executed, appropriately balances the legitimate interests of each of the three principal constituencies affected by the intercreditor framework: (a) the Senior Agent and the senior lender syndicate, whose priority position in the capital structure must be respected and preserved; (b) the Mezzanine Lender, whose subordinated but secured position must be afforded meaningful rights and remedies consistent with the economics of the Mezzanine Facility and the risk profile of its investment; and (c) the Borrower, as the operating company whose business operations, enterprise value, and going-concern viability are directly affected by the intercreditor arrangements governing the exercise of creditor remedies against its assets.

As you know, the proposed Mezzanine Facility involves a second-priority perfected security interest in substantially all assets of the Borrower and the subsidiary guarantors (collectively, the "Shared Collateral"), granted pursuant to the Mezzanine Security Agreement and related collateral documents. In addition, the Mezzanine Facility will be secured by a first-priority pledge of 100% of the equity interests in Stonefield held by Cascade Ridge SLG Holdings, LLC (the "Parent Equity Pledge"), which is being granted exclusively to the Mezzanine Lender and is not shared with the senior facility. The distinction between the Shared Collateral and the Parent Equity Pledge is a critical structural feature of the Mezzanine Facility and, as discussed in greater detail below, must be clearly reflected and respected in the Intercreditor Agreement.

The Borrower confirms its general support for the intercreditor framework set forth in the Draft ICA, including the fundamental principles of lien subordination, payment subordination, and the Senior Agent's control over Shared Collateral during enforcement. However, the Borrower proposes certain modifications to specific provisions of the Draft ICA, each of which we believe is reasonable, consistent with prevailing market practice in comparable sponsor-backed mezzanine financing transactions, and necessary to ensure that the Intercreditor Agreement functions as intended in the context of this particular transaction.

The Intercreditor Agreement is to be governed by the laws of the State of New York, and we have prepared our comments accordingly.

We turn now to our section-by-section commentary.

III. Section-by-Section Commentary

1. Lien Subordination (Article II of the Draft ICA)

Article II of the Draft ICA establishes the fundamental lien subordination framework, providing that all liens securing the Mezzanine Facility obligations in the Shared Collateral are subordinate and junior in all respects to the liens securing the Senior Facility obligations in such Shared Collateral, and that the Senior Collateral Agent shall have sole and exclusive control over the Shared Collateral, including sole authority to direct the manner and timing of any enforcement action with respect thereto. The Borrower accepts this basic framework, which is consistent with the agreed-upon capital structure and the relative priority of the senior and mezzanine facilities.

However, the Borrower proposes that Article II be revised to include an express clarification that the Parent Equity Pledge — that is, the first-priority pledge of 100% of the equity interests in Stonefield granted by Cascade Ridge SLG Holdings, LLC to the Mezzanine Lender — is carved out from the scope of the lien subordination provisions. Specifically, we request the following modifications:

(a) The Parent Equity Pledge should be expressly excluded from the definition of "Shared Collateral" (as further discussed in Section 2 below) and from the lien subordination provisions set forth in Article II. The Mezzanine Lender's first-priority lien on the Parent Equity Pledge is a separate and distinct collateral package that was a fundamental element of the Mezzanine Lender's underwriting and investment decision, and it should not be subject to any subordination, standstill, or sole-control provisions governing the Shared Collateral.

(b) The Draft ICA should be revised to confirm affirmatively that the Mezzanine Lender's first-priority lien on the Parent Equity Pledge is not subordinated to any lien of the Senior Agent or any senior lender, and that the Mezzanine Lender retains all rights, remedies, and powers with respect to the Parent Equity Pledge as if the Intercreditor Agreement did not exist, subject only to the notice requirements described below.

(c) We further propose the addition of a proviso to Article II stating substantially as follows: "Notwithstanding anything to the contrary contained in this Agreement, nothing in this Article II or elsewhere in this Agreement shall impair, restrict, or otherwise affect the Mezzanine Lender's rights to exercise remedies against the Parent Equity Pledge independent of the standstill framework and enforcement limitations applicable to the Shared Collateral, provided that the Mezzanine Lender shall provide the Senior Agent with not less than ten (10) business days' prior written notice of its intention to commence enforcement proceedings against the Parent Equity Pledge."

The notice requirement we propose in clause (c) above is intended to provide the Senior Agent with advance awareness of any enforcement action against the Parent Equity Pledge, which could result in a change of ownership of the Borrower. We believe this notice provision adequately addresses any legitimate concerns of the Senior Agent regarding the potential impact of such enforcement on the senior lender syndicate, while preserving the Mezzanine Lender's bargained-for rights with respect to its first-priority collateral.

2. Scope of Shared Collateral (Article I Definitions)

Turning to the definitional provisions in Article I of the Draft ICA, we note that the definition of "Shared Collateral" as currently drafted is exceedingly broad and, in our view, potentially captures assets and collateral that should properly be excluded from the intercreditor framework applicable to shared collateral.

The Borrower proposes the following modifications to the definition of "Shared Collateral":

(a) Express Exclusion of Parent Equity Pledge. Consistent with our comments in Section 1 above, the definition of "Shared Collateral" should expressly exclude the Parent Equity Pledge. While the Draft ICA appears to define Shared Collateral as all assets in which both the Senior Agent and the Mezzanine Lender hold a security interest, the current drafting is ambiguous and could be read to encompass the Parent Equity Pledge if the Senior Agent were to assert any lien thereon (whether by operation of after-acquired property clauses or otherwise). The exclusion should be unambiguous and self-executing.

(b) Exclusion of Mezzanine-Only Collateral. The definition should also expressly exclude any collateral that is granted exclusively to the Mezzanine Lender and in which the Senior Agent does not hold a lien. Although we are not aware of any current collateral falling into this category other than the Parent Equity Pledge, this carve-out provides useful structural clarity for the avoidance of doubt and addresses any potential after-acquired collateral scenarios.

(c) Treatment of After-Acquired Property. We request clarification regarding the treatment of after-acquired property under the Intercreditor Agreement. As you know, a significant portion of the Mezzanine Facility proceeds will be used to fund the Borrower's fleet expansion and terminal facility buildout program, which is expected to involve the acquisition of new transportation equipment, rolling stock, and other capital assets over the next twelve to eighteen months. Any such newly acquired assets should be subject to both senior and mezzanine liens in their respective priority positions, and should properly constitute Shared Collateral. However, the definition should be clearly scoped to ensure that the Shared Collateral consists only of those asset categories in which both the Senior Agent and the Mezzanine Lender hold security interests.

(d) Collateral Schedule. To promote clarity and reduce the potential for future disputes, the Borrower proposes the inclusion of a schedule to the Intercreditor Agreement listing the categories of assets comprising the Shared Collateral. Based on the existing collateral packages under the Senior Credit Agreement and the proposed Mezzanine Security Agreement, we would expect such schedule to include the following categories: (i) equipment (including transportation equipment and terminal machinery), (ii) vehicles and rolling stock, (iii) accounts receivable, (iv) inventory, (v) intellectual property (including the "Stonefield" trade name and associated trademarks), and (vi) equity interests in the Borrower's direct and indirect subsidiaries — namely, Stonefield Intermodal Services, Inc. (a Delaware corporation), Stonefield Fleet Management, LLC (a Delaware limited liability company), and Stonefield Freight Brokerage, Inc. (a Texas corporation). For the avoidance of doubt, the equity interests referenced in clause (vi) are the equity interests in the subsidiaries held by the Borrower, which are subject to both senior and mezzanine liens, and are distinct from the Parent Equity Pledge, which is the equity interests in the Borrower held by the parent and pledged exclusively to the Mezzanine Lender.

We are happy to prepare an initial draft of the proposed collateral schedule for your review if that would be helpful.

3. Enforcement Standstill (Article IV of the Draft ICA)

Article IV of the Draft ICA sets forth the enforcement standstill provisions, which restrict the Mezzanine Lender's ability to exercise remedies against the Shared Collateral following the occurrence of an event of default under the Mezzanine Credit Agreement. We identify this as the most significant area of negotiation between the parties, and the provision on which the Borrower's comments are most extensive.

Current Draft. As drafted, Article IV provides that the Mezzanine Lender may not exercise any remedies against the Shared Collateral (including, without limitation, commencing any judicial or non-judicial foreclosure, directing any trustee or agent to take any enforcement action, or exercising any right of set-off) for a period of one hundred eighty (180) days after the date on which the Mezzanine Lender delivers written notice to the Senior Agent of the occurrence and continuance of an event of default under the Mezzanine Credit Agreement (the "Standstill Period"). During the Standstill Period, the Senior Agent retains sole discretion as to whether and when to pursue enforcement against the Shared Collateral.

Borrower's Initial Position. Stonefield proposes reducing the Standstill Period from one hundred eighty (180) days to one hundred twenty (120) days. The Borrower's rationale for this proposal is as follows:

First, a 180-day standstill materially and unreasonably delays the Mezzanine Lender's remedies with respect to the Shared Collateral and, critically, may significantly reduce recovery values due to the depreciation characteristics of the Borrower's principal asset classes. The Borrower's fleet consists of over 2,400 Class 8 tractors, approximately 6,800 dry van and refrigerated trailers, and related terminal equipment. These transportation and logistics assets are subject to meaningful depreciation on a monthly basis, and a 180-day delay in enforcement could result in a material diminution of the Mezzanine Lender's recovery from such assets. The Borrower believes that a 120-day standstill period strikes an appropriate balance between protecting the Senior Agent's priority position and preserving the economic value of the Mezzanine Lender's collateral.

Second, a 120-day standstill provides ample time for the Senior Agent and the senior lender syndicate to evaluate the circumstances giving rise to the mezzanine event of default, to assess the implications for the senior facility, and to determine whether to exercise their own remedies, pursue a consensual restructuring or workout, or take other appropriate action. One hundred twenty days is a substantial period — approximately four months — and is more than sufficient for the senior lenders to protect their interests.

Third, prevailing market practice in sponsor-backed mezzanine financings in the transportation and logistics sector supports standstill periods in the range of ninety (90) to one hundred fifty (150) days. A 120-day standstill falls squarely within this range and is consistent with the terms of recently completed comparable transactions that we have reviewed.

Acknowledgment of Senior Agent's Position. We acknowledge that the Senior Agent's position, as reflected in the Draft ICA, is a 180-day Standstill Period, and we understand that this remains an important point for Whitmore National Bank and the senior lender syndicate. We note that this is an open point for discussion between the parties. In the interest of advancing the overall negotiation and reaching a prompt resolution, the Borrower is prepared to accept a 180-day Standstill Period if the Senior Agent will agree to certain other concessions described in this letter, including: (i) the Borrower's proposed modifications to the payment blockage provisions (Section 4 below), (ii) the addition of cure rights (Section 6 below), and (iii) the expansion of the purchase option triggers (Section 5 below). We view these provisions as interconnected elements of the overall intercreditor framework, and we believe that a package approach to the negotiation will be the most productive path forward.

Proposed Tolling Provision. Regardless of whether the Standstill Period is set at 120 or 180 days, the Borrower proposes the addition of a tolling provision to Article IV. Specifically, we propose that the Standstill Period be tolled — i.e., that the running of the Standstill Period be suspended — during any period in which the Senior Agent is not diligently pursuing enforcement remedies against the Shared Collateral, or in which the senior facility obligations have been accelerated but no enforcement action has been commenced by the Senior Agent within a reasonable period following such acceleration. The purpose of this provision is to prevent a scenario in which the Senior Agent uses the Standstill Period as a passive blocking mechanism — effectively preventing the Mezzanine Lender from exercising remedies — without itself taking affirmative steps to realize upon the Shared Collateral for the benefit of the senior lenders. The tolling provision ensures that the Standstill Period serves its intended purpose (protecting the Senior Agent's enforcement priority) without being used as an indefinite delay tactic.

Proposed "Drop-Dead" Provision. In addition to the tolling provision, the Borrower proposes a complementary "drop-dead" mechanism: if the Senior Agent has not commenced enforcement proceedings against the Shared Collateral within ninety (90) days after the commencement of the Standstill Period, the Mezzanine Lender should be permitted to exercise remedies against the Shared Collateral without waiting for the full Standstill Period to expire. This drop-dead provision provides the Senior Agent with a substantial window (90 days) within which to determine its enforcement strategy and commence appropriate proceedings, while ensuring that the Mezzanine Lender is not indefinitely restrained in the event the Senior Agent elects not to pursue remedies. We believe this provision is reasonable, fair to all parties, and consistent with the intercreditor agreements in a number of precedent transactions that we have reviewed.

4. Payment blockage (Article V of the Draft ICA)

Article V of the Draft ICA addresses payment blockage, establishing the framework under which the Senior Agent may restrict the payment of cash interest and other amounts on the Mezzanine Facility. As drafted, Article V provides that upon the occurrence and during the continuance of any "Senior Event of Default" (as defined in the Senior Credit Agreement), the Senior Agent may deliver a Payment blockage Notice to the Borrower and the Mezzanine Lender, whereupon the Borrower shall not make, and the Mezzanine Lender shall not receive or accept, any cash payments in respect of the mezzanine obligations for a period of up to one hundred eighty (180) consecutive days following delivery of such notice. The Draft ICA further provides that no more than one Payment blockage Notice may be delivered in any period of three hundred sixty (360) consecutive days.

The Borrower accepts the 180-day maximum blockage duration and the limitation of one blockage per 360-day period. These parameters are consistent with market norms and provide an appropriate balance between the senior lenders' protection and the Mezzanine Lender's right to receive current income on its investment.

However, the Borrower proposes the following modifications to the payment blockage provisions:

(a) Trigger Limitation. As currently drafted, the payment blockage may be triggered upon the occurrence of any Senior Event of Default, which is defined by cross-reference to Section 8.01 of the Senior Credit Agreement. Section 8.01 includes a broad range of default triggers, from payment defaults and bankruptcy defaults to financial covenant defaults, reporting defaults, cross-defaults, and various representations and warranty defaults. The Borrower proposes that the payment blockage should be triggered only upon the occurrence of a "Payment Default" (failure to pay principal or interest when due under the Senior Credit Agreement) or a "Bankruptcy Default" (the commencement of bankruptcy or insolvency proceedings by or against the Borrower or any subsidiary guarantor), and not upon the occurrence of other categories of Senior Events of Default — for example, a financial covenant default (such as a breach of the maximum total net leverage ratio or the minimum fixed charge coverage ratio) or a reporting default (such as a failure to deliver quarterly financial statements within the required time period). The rationale for this limitation is straightforward: a payment default or bankruptcy default represents a fundamental credit deterioration that justifies blocking payments to a junior creditor, whereas a technical covenant default or a reporting failure may be curable and does not necessarily reflect an inability to service both the senior and mezzanine obligations concurrently. Permitting the Senior Agent to block mezzanine interest payments upon the occurrence of any Senior Event of Default gives the senior lenders disproportionate leverage and could be used to extract concessions from the Mezzanine Lender in situations where the underlying default is minor or technical in nature.

(b) Automatic Termination upon Cure or Waiver. The Draft ICA does not address the consequences of a cure or waiver of the underlying Senior Event of Default during the payment blockage period. The Borrower proposes that the payment blockage should automatically terminate — and the Borrower's obligation to resume mezzanine interest payments should be restored — if the Senior Event of Default that gave rise to the Payment blockage Notice is cured by the Borrower or waived by the requisite senior lenders prior to the expiration of the 180-day blockage period. It would be inequitable to require the Borrower to continue withholding interest payments to the Mezzanine Lender after the underlying default has been resolved, and automatic termination upon cure or waiver is a standard feature in intercreditor agreements of this type.

(c) Permitted PIK. The Mezzanine Facility bears interest at a blended rate consisting of an 850 basis point cash pay component and a 250 basis point payment-in-kind ("PIK") component. The PIK component is not a cash payment by the Borrower but rather an automatic addition to the outstanding principal balance of the Mezzanine Facility on each interest payment date. The Borrower proposes that, during any payment blockage period, the 250 basis point PIK component should not be blocked — only the 850 basis point cash pay component should be subject to the payment blockage. The PIK component involves no cash outflow from the Borrower and does not reduce the cash available to service the senior obligations. Blocking the PIK component would effectively penalize the Mezzanine Lender's return without any corresponding benefit to the senior lenders, and would be inconsistent with the treatment of PIK interest in comparable intercreditor agreements.

(d) No Double blockage for Same Event. The Borrower proposes a clarification to ensure that a single Senior Event of Default cannot give rise to more than one Payment blockage Notice, even if such event of default is continuing across multiple 360-day periods. As currently drafted, it is unclear whether the Senior Agent could deliver successive Payment blockage Notices in consecutive 360-day periods based on the same continuing (uncured) Senior Event of Default, effectively creating a rolling permanent blockage. The Borrower's proposed clarification would require that a new Payment blockage Notice may only be delivered on the basis of a new and different Senior Event of Default — i.e., one that has arisen after the delivery of the immediately preceding Payment blockage Notice.

(e) Notice Requirements. The Borrower proposes that the Payment blockage Notice must (i) specify the nature of the Senior Event of Default with reasonable particularity, including a citation to the specific subsection of Section 8.01 of the Senior Credit Agreement that has been breached, and a brief factual description of the events or circumstances constituting such breach; and (ii) be delivered simultaneously to both the Borrower and the Mezzanine Lender. These requirements are consistent with basic due process principles and ensure that the Borrower and the Mezzanine Lender have sufficient information to assess the validity of the Payment blockage Notice and to determine whether to contest it or pursue cure or waiver.

5. Purchase Option (Article VI of the Draft ICA)

Article VI of the Draft ICA grants the Mezzanine Lender the right to purchase the entire outstanding senior debt — including all term loans and revolving credit obligations — at par plus accrued interest upon the acceleration of the senior facility following a Senior Event of Default. The Borrower supports this provision as a critical structural protection for both the Mezzanine Lender and the Borrower. The purchase option provides an important remedy that helps preserve enterprise value by enabling the Mezzanine Lender to step into the senior position and prevent a potentially value-destructive foreclosure or liquidation of the Borrower's business. The ability to consolidate the senior and mezzanine positions in a single holder can facilitate a more orderly restructuring or recapitalization, to the benefit of all stakeholders.

The Borrower proposes the following refinements to the purchase option mechanics:

(a) Expanded Trigger Events. The purchase option should be exercisable not only upon the acceleration of the senior facility but also upon the commencement of enforcement proceedings against the Shared Collateral by the Senior Agent. An acceleration of the senior obligations without the commencement of actual enforcement proceedings may not, in and of itself, trigger the Mezzanine Lender's need to exercise the purchase option. Conversely, the Senior Agent's commencement of enforcement proceedings (e.g., the initiation of a UCC Article 9 disposition of Shared Collateral, the commencement of a judicial foreclosure action, or the appointment of a receiver) represents a concrete and immediate threat to the Mezzanine Lender's recovery and the Borrower's going-concern value, and should independently give rise to the purchase right.

(b) Confirmation of Purchase Price. The purchase price should be confirmed in the Intercreditor Agreement as the aggregate outstanding principal amount of all senior obligations, plus all accrued and unpaid interest thereon (including any default interest that has accrued), plus any reasonable and documented out-of-pocket costs and expenses of the Senior Agent incurred in connection with the administration, enforcement, or workout of the senior facility (including, without limitation, the fees and disbursements of Renshaw Pratt LLP as counsel to the Senior Agent). The Borrower requests that the Intercreditor Agreement expressly provide that the purchase price shall not include any prepayment premium, make-whole amount, or similar charge that would otherwise be payable by the Borrower upon a voluntary prepayment of the senior obligations, as the purchase by the Mezzanine Lender is a distinct transaction and not a voluntary prepayment by the Borrower.

(c) Exercise Period. The Mezzanine Lender should have a period of not less than thirty (30) business days after its receipt of written notice from the Senior Agent of the acceleration of the senior facility or the commencement of enforcement proceedings (as applicable) within which to elect to exercise the purchase option. Thirty business days — approximately six calendar weeks — provides the Mezzanine Lender with a reasonable but not excessive period to evaluate the merits of the purchase, arrange any necessary financing, and make an informed decision. We note that a shorter exercise period (e.g., fifteen (15) business days, as we have seen in some precedent transactions) may not provide sufficient time given the size of the senior facility ($275,000,000 aggregate principal amount) and the complexity of the underlying credit documentation.

(d) Closing Mechanics. The closing of the purchase should occur within fifteen (15) business days after the Mezzanine Lender's exercise of the purchase option. At closing, the Senior Agent should be required to deliver customary assignment documentation (including an assignment and assumption agreement in substantially the form attached to the Senior Credit Agreement as an exhibit), assigning to the Mezzanine Lender all of the Senior Agent's and each senior lender's right, title, and interest in and to the senior obligations, the senior security documents, and all related collateral. Such assignment should be made without representations or warranties of any kind, other than customary representations as to (i) title — i.e., that the assigning lender is the legal and beneficial owner of the assigned obligations, free and clear of any lien or encumbrance, and (ii) authority — i.e., that the assigning lender has the power and authority to execute and deliver the assignment documentation and to consummate the transactions contemplated thereby.

(e) Subrogation. Upon the completion of the purchase and the payment of the purchase price in full, the Mezzanine Lender should be fully subrogated to all rights, remedies, powers, and privileges of the Senior Agent and each of the senior lenders, including all liens on the Shared Collateral, all guarantees from the subsidiary guarantors, and all other credit support. The Intercreditor Agreement should expressly so provide.

6. Cure Rights (Article VII — Proposed New Provision)

The Draft ICA is silent on the subject of Borrower cure rights, and does not include any provision permitting the Borrower or its equity sponsor to cure defaults under the Senior Credit Agreement in order to prevent or terminate the exercise of intercreditor remedies (including payment blockage and enforcement standstills). The Borrower proposes the addition of a new Article VII to the Intercreditor Agreement establishing a cure rights framework, with the following mechanics:

(a) Monetary Default Cure. The Borrower (or its equity sponsor, Cascade Ridge Capital Partners, LLC, acting through Cascade Ridge SLG Holdings, LLC or otherwise) should have the right to cure any monetary default under the Senior Credit Agreement — i.e., any failure to pay principal, interest, fees, or other amounts when due — within ten (10) business days after the Borrower's receipt of written notice of such default from the Senior Agent. If such cure is timely made, the underlying monetary default shall be deemed cured for all purposes, and no payment blockage, enforcement standstill, or other intercreditor remedy shall be triggered or, if already triggered, shall be deemed automatically terminated. This cure right is essential to prevent an inadvertent or temporary payment shortfall from cascading into a full-blown intercreditor event, with all of the attendant disruption to the Borrower's business operations.

(b) Financial Covenant Cure (Equity Cure). A financial covenant default under the Senior Credit Agreement (including a breach of the maximum total net leverage ratio of 5.50:1.00 or the minimum fixed charge coverage ratio of 1.25:1.00) should be curable by a cash equity contribution from Cascade Ridge Capital Partners, LLC (or Cascade Ridge Capital Fund V, LP, the fund through which the equity sponsor holds its investment in the Borrower) within fifteen (15) business days after the end of the applicable fiscal quarter or other testing period giving rise to the covenant breach. The amount of such equity contribution shall be counted as EBITDA (or, if the applicable covenant is a net leverage ratio, as a reduction in net debt) for purposes of recalculating the financial covenant for the relevant testing period. If the equity contribution is sufficient to bring the Borrower into compliance with the applicable financial covenant on a recalculated basis, the financial covenant default shall be deemed cured, and no payment blockage, enforcement standstill, or other intercreditor remedy shall be triggered or continued on the basis of such default.

(c) Limitation on Cure Exercises. The cure rights described in clauses (a) and (b) above should be limited to no more than two (2) exercises in any four (4) consecutive fiscal quarters of the Borrower. This limitation prevents the equity cure from being used as a substitute for fundamental credit performance and ensures that the cure right is reserved for temporary or extraordinary situations.

(d) Consistency with Senior Credit Agreement. We note that this "equity cure" mechanic is standard in sponsor-backed leveraged finance transactions and is consistent with the existing equity cure provisions set forth in Section 7.03 of the Senior Credit Agreement. The Borrower sees no reason why the Intercreditor Agreement should not reflect and respect the equity cure framework that is already embedded in the Senior Credit Agreement, and the failure to include corresponding provisions in the Intercreditor Agreement could create an anomalous result in which a default is cured for purposes of the Senior Credit Agreement but continues to trigger intercreditor remedies.

7. Change of Control (Article VIII / Cross-Reference Provisions)

Article VIII of the Draft ICA and certain related cross-reference provisions address the treatment of a "change of control" event. As currently drafted, the Intercreditor Agreement cross-references the definition of "Change of Control" set forth in Section 1.01 of the Senior Credit Agreement. The Borrower proposes that the Intercreditor Agreement adopt a uniform, standalone definition of "Change of Control" that is consistent across both the Senior Credit Agreement (as proposed to be amended by Amendment No. 3) and the Mezzanine Credit Agreement. Relying on cross-references to the Senior Credit Agreement creates the risk that a future amendment to the Senior Credit Agreement's change of control definition could inadvertently or deliberately alter the intercreditor framework in a manner not agreed to by the Mezzanine Lender.

The Borrower proposes that the uniform "Change of Control" definition include the following three triggers:

(a) Any person or "group" (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), other than Cascade Ridge Capital Partners, LLC and its controlled affiliates, acquiring beneficial ownership of more than 50% of the outstanding voting equity interests of Stonefield;

(b) Stonefield ceasing to be a direct, wholly-owned subsidiary of Cascade Ridge SLG Holdings, LLC; or

(c) A sale, transfer, or other disposition of all or substantially all of the assets of Stonefield and its subsidiaries, taken as a whole, to any person or group other than a wholly-owned subsidiary of the Borrower.

As you are aware, a Change of Control triggers a mandatory prepayment of the Mezzanine Facility at a price equal to 103% of the outstanding principal amount thereof (including any capitalized PIK interest), plus all accrued and unpaid interest thereon. In addition, the warrants issued in connection with the Mezzanine Facility become immediately puttable upon a Change of Control. The Intercreditor Agreement should specify the waterfall for the application of Change of Control proceeds, which the Borrower proposes should be as follows: (i) first, to the satisfaction in full of all outstanding senior obligations (including principal, accrued interest, fees, and expenses); and (ii) second, following the satisfaction in full of all senior obligations, to the satisfaction of the mezzanine obligations, including the 103% mandatory prepayment premium.

The Borrower proposes that the Change of Control payment waterfall expressly confirm that the 103% mandatory prepayment premium owed to the Mezzanine Lender is payable immediately following — and only following — the satisfaction in full of all senior obligations. This confirmation is important to establish that the mezzanine prepayment premium is a valid obligation entitled to payment from Change of Control proceeds, but only after the senior lenders have been made whole. We expect that the Mezzanine Lender will seek to confirm that the 103% premium is treated as a secured obligation for purposes of the waterfall (which is consistent with the terms of the Mezzanine Credit Agreement), and we do not believe the Senior Agent should have any objection to such treatment, given that payment of the premium is expressly subordinated to the satisfaction of all senior obligations.

8. Permitted Amendments to Senior Facility Documents

The Draft ICA includes provisions restricting the ability of the Borrower to amend, modify, supplement, or waive any provision of the Senior Credit Agreement or any related senior facility document without the prior written consent of the Mezzanine Lender. The Borrower generally accepts this concept, which is a standard feature of intercreditor agreements and serves to protect the Mezzanine Lender against adverse modifications to the senior facility that could impair the Mezzanine Lender's position.

However, the Borrower proposes that the following categories of amendments be carved out from the Mezzanine Lender consent requirement, as they do not adversely affect the Mezzanine Lender and should not require its consent:

(a) Amendments that do not: (i) increase the aggregate principal amount of senior indebtedness above $275,000,000 (the current outstanding amount of the Term Loan B facility) plus the $50,000,000 revolving credit commitment (for a total of $325,000,000); (ii) shorten the final maturity date of the senior facility (currently November 15, 2026 for the Term Loan B facility and November 15, 2025 for the revolving credit facility); (iii) increase the applicable interest rate margin or any other component of the interest rate on the senior facility by more than fifty (50) basis points in the aggregate; or (iv) add categories of collateral that are not already subject to senior liens under the existing senior security documents.

(b) Amendments that are purely administrative in nature, including changes to notice addresses, modifications to agency provisions (e.g., the replacement of the Senior Agent or the appointment of sub-agents), and revisions to assignment and participation mechanics that do not affect the aggregate commitments or outstanding principal amount of the senior facility.

Any amendment to the Senior Credit Agreement that does not fall within the foregoing carve-outs would continue to require the prior written consent of the Mezzanine Lender, which consent shall not be unreasonably withheld, conditioned, or delayed.

9. Insurance and Casualty Proceeds

The Draft ICA does not include specific provisions addressing the application of insurance and casualty proceeds derived from the Shared Collateral. Given the nature of the Borrower's business — which involves a large fleet of owned and financed transportation equipment, rolling stock, and terminal facilities — the proper treatment of insurance and casualty proceeds is a matter of considerable practical importance. The Borrower proposes that the Intercreditor Agreement include provisions addressing this topic, as follows:

(a) Priority Waterfall. Insurance and casualty proceeds derived from the Shared Collateral should be applied in the following order of priority: first, to the senior facility, up to the amount of the outstanding senior obligations; and second, to the extent of any excess proceeds remaining after the satisfaction of the senior obligations, to the Mezzanine Facility, up to the amount of the outstanding mezzanine obligations.

(b) Restoration/Replacement Option. Notwithstanding clause (a) above, the Borrower should have the option to apply insurance and casualty proceeds to the replacement or restoration of the damaged or destroyed collateral (particularly fleet vehicles and terminal facilities), provided that: (i) no Senior Event of Default exists and is continuing at the time of such election; (ii) the Borrower delivers a written restoration plan to the Senior Agent and the Mezzanine Lender within thirty (30) days after receipt of the insurance or casualty proceeds; (iii) the replacement or restoration is completed within one hundred eighty (180) days after receipt of the proceeds; and (iv) the replacement assets are of comparable type, quality, and value to the damaged or destroyed collateral and are subject to the existing senior and mezzanine liens in the same priority as the original collateral. This restoration option is essential to the Borrower's ability to maintain its operational capacity in the event of a casualty affecting a significant portion of its fleet or facilities, and is consistent with the provisions of the Senior Credit Agreement addressing casualty proceeds.

10. Notices. The Borrower proposes that all notices, requests, demands, and other communications under the Intercreditor Agreement be in writing and delivered by hand, overnight courier service, facsimile, or email (with confirmation of receipt) to the following addresses:

Senior Agent: Whitmore National Bank, N.A. 350 Park Avenue New York, New York 10022

Attention: Gregory S. Feinberg, Managing Director

Telephone: (212) 270-4100

Email: gregory.feinberg@whitmorenational.com

Senior Agent's Counsel: Renshaw Pratt LLP One Liberty Plaza, 43rd Floor New York, New York 10006

Attention: David C. Renshaw, Esq.

Telephone: (212) 403-8900

Email: drenshaw@renshawpratt.com

Mezzanine Lender: Ridgeline Mezzanine Capital Fund III, LP c/o Ridgeline Capital Management, LLC 767 Lexington Avenue, 22nd Floor New York, New York 10065

Attention: Katherine M. Stroud

Telephone: (212) 822-6300

Email: kstroud@ridgelinecapital.com

Mezzanine Lender's Counsel: Archer Blackwell & Moss LLP 1585 Broadway, 34th Floor New York, New York 10036

Attention: Harrison T. Moss / Angela N. Whitford

Telephone: (212) 554-2000

Email: hmoss@archerbm.com / awhitford@archerbm.com

Borrower: Stonefield Logistics Group Inc. 4800 Commerce Parkway, Suite 1200 Fort Worth, Texas 76107

Attention: Robert D. Nagamine, General Counsel

Telephone: (817) 332-9500

Email: rnagamine@stonefieldlogistics.com

Borrower's Counsel: Calderwood & Harkness LLP 601 Lexington Avenue New York, New York 10022

Attention: Stephanie Okafor

Telephone: (212) 506-7284

Email: sokafor@calderwoodharkness.com

Any party may change its notice address by written notice delivered to each of the other parties in accordance with the foregoing provisions.

11. Miscellaneous Provisions

The Borrower proposes the following with respect to the miscellaneous provisions of the Intercreditor Agreement:

(a) Governing Law. The Borrower confirms that the Intercreditor Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law that would result in the application of the laws of any other jurisdiction. We assume the Draft ICA will include a customary New York choice-of-law provision, and we have no objection to such provision.

(b) Third-Party Beneficiary Status. The Borrower requests the inclusion of customary third-party beneficiary language expressly confirming that Stonefield Logistics Group Inc. is an intended third-party beneficiary of the Intercreditor Agreement and is entitled to enforce the rights and protections afforded to it thereunder. While the Borrower is not a "party" to the Intercreditor Agreement in the traditional sense (as the agreement is among the Senior Agent and the Mezzanine Lender), the Borrower is directly and materially affected by the intercreditor provisions — particularly the cure rights, payment blockage, and enforcement standstill provisions — and must have standing to enforce its rights thereunder. This is a standard provision in intercreditor agreements in sponsor-backed leveraged finance transactions.

(c) Acknowledgment by Borrower and Subsidiary Guarantors. The Borrower proposes that the Intercreditor Agreement include a signature block and acknowledgment page pursuant to which Stonefield Logistics Group Inc. and each of the subsidiary guarantors — Stonefield Intermodal Services, Inc., Stonefield Fleet Management, LLC, and Stonefield Freight Brokerage, Inc. — acknowledge the terms and provisions of the Intercreditor Agreement and agree to be bound thereby to the extent applicable. The subsidiary guarantors' acknowledgment is important because the subsidiary guarantors are grantors under both the senior and mezzanine security documents, and the intercreditor provisions governing the Shared Collateral directly affect the collateral granted by such entities.

IV. Summary of Key Open Points

For the convenience of all parties and to facilitate an efficient resolution of the outstanding issues, we set forth below a summary of the key negotiation points and their current status:

We believe that a comprehensive resolution of the foregoing points will result in an Intercreditor Agreement that is fair, balanced, and consistent with market practice, and that appropriately protects the interests of all parties.

V. Closing / Request for Response

We respectfully request that Renshaw Pratt LLP review the enclosed redline and this commentary letter in consultation with the Senior Agent and revert with the Senior Agent's comments at your earliest convenience. Given the current transaction timeline, we would appreciate receiving a response no later than September 8, 2023, if possible, so that the parties can work toward resolution of the open points in advance of the targeted signing date.

As you are aware, the current target timeline for the transaction is as follows: (i) Senior Agent consent under the consent solicitation is expected to be received by early September 2023 (the consents were ultimately received on September 5, 2023); (ii) execution of the Intercreditor Agreement and Amendment No. 3 to the Senior Credit Agreement is targeted for mid-September 2023; and (iii) closing and funding of the Mezzanine Facility is targeted for late September 2023. We understand that the Senior Agent amendment fee of $137,500 (calculated as 0.05% of the $275,000,000 aggregate senior facility commitments) has been agreed upon between the Borrower and the Senior Agent and will be payable by the Borrower to the Senior Agent upon execution of Amendment No. 3.

We would welcome the opportunity to arrange a call among Calderwood & Harkness, Renshaw Pratt, and Archer Blackwell & Moss to discuss the key open points identified in this letter at a mutually convenient time. We believe that a collaborative discussion will be the most efficient means of resolving the remaining issues and advancing the transaction toward execution.

Any questions regarding this letter or the enclosed redline may be directed to the undersigned or to Daniel Obi at Calderwood & Harkness LLP, at (212) 506-7291 or dobi@calderwoodharkness.com.

We look forward to your response and to continuing to work with you on this matter.

Very truly yours,