1012-00001 · Client 1012 · Correspondence

post-closing-letter-to-client.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 www.calderwoodharkness.com

October 2, 2023

Robert D. Nagamine General Counsel & Secretary Stonefield Logistics Group Inc. 4800 Commerce Parkway, Suite 1200 Fort Worth, Texas 76107

Re: $120,000,000 Mezzanine Financing — Post-Closing Transmittal and Summary of Post-Closing Obligations Matter No. 1012-00001

Dear Robert:

1. Closing Confirmation and Transmittal

We are pleased to confirm that the $120,000,000 mezzanine term loan facility (the "Mezzanine Facility") in favor of Stonefield Logistics Group Inc. ("Stonefield" or the "Borrower") closed and was fully funded on September 29, 2023. The Mezzanine Facility was extended by Ridgeline Mezzanine Capital Fund III, LP ("Ridgeline" or the "Mezzanine Lender") pursuant to the terms of the Mezzanine Credit Agreement, dated as of September 14, 2023 (the "Mezzanine Credit Agreement"), among Stonefield, as Borrower, Ridgeline, as Mezzanine Lender, and the guarantors party thereto. The relative lien priorities and intercreditor arrangements among the senior and mezzanine secured parties are governed by the Intercreditor Agreement, dated as of September 14, 2023 (the "Intercreditor Agreement"), among Whitmore National Bank, N.A. ("Whitmore"), as Senior Agent, Ridgeline, as Mezzanine Lender, and acknowledged and agreed to by Stonefield.

Enclosed with this letter, you will find two (2) complete sets of closing binders containing fully executed originals or conformed copies of all transaction documents, agreements, certificates, and ancillary instruments delivered in connection with the closing of the Mezzanine Facility (each, a "Closing Binder"). One Closing Binder is for Stonefield's records, and the second Closing Binder is being transmitted under separate cover to Cascade Ridge Capital Partners, LLC, attention: Vincent A. Palumbo, at 200 Clarendon Boulevard, 38th Floor, Boston, Massachusetts 02116. Should you or any other party require additional Closing Binder sets, we would be happy to prepare them upon request.

The Calderwood & Harkness engagement team for this matter has been composed of the following attorneys:

• Stephanie Okafor, Responsible Partner

• Philip Hartmann, Billing Partner

• Daniel Obi, Lead Associate

• Lisa Morrow, Working Associate

• Sylvia Hartwell, Tax Specialist Partner

This letter serves both as a transmittal for the enclosed Closing Binders and as a summary of the key post-closing obligations that Stonefield should calendar and monitor in connection with the Mezzanine Facility, the Senior Credit Agreement (as amended), and the Intercreditor Agreement. We recommend that this letter be shared with Janet R. Prescott (Chief Financial Officer) and other members of Stonefield's finance and legal teams responsible for ongoing debt compliance.

2. Summary of Closing Binder Contents

The enclosed Closing Binders are organized by numbered tab. Set forth below is an itemized summary of the documents contained at each tab:

Tab 1: Mezzanine Credit Agreement, dated as of September 14, 2023, among Stonefield Logistics Group Inc., as Borrower, Ridgeline Mezzanine Capital Fund III, LP, as Mezzanine Lender, and the guarantors party thereto.

Tab 2: Intercreditor Agreement, dated as of September 14, 2023, among Whitmore National Bank, N.A., as Senior Agent, Ridgeline Mezzanine Capital Fund III, LP, as Mezzanine Lender, and acknowledged and agreed to by Stonefield Logistics Group Inc.

Tab 3: Mezzanine Guaranty Agreement, dated as of September 14, 2023, by Cascade Ridge SLG Holdings, LLC, Stonefield Intermodal Services, Inc., Stonefield Fleet Management, LLC, and Stonefield Freight Brokerage, Inc. (collectively, the "Subsidiary Guarantors"), in favor of Ridgeline Mezzanine Capital Fund III, LP.

Tab 4: Mezzanine Pledge and Security Agreement, dated as of September 14, 2023, by Stonefield Logistics Group Inc. and the Subsidiary Guarantors in favor of Ridgeline Mezzanine Capital Fund III, LP (granting a second-priority security interest in substantially all assets of Stonefield and the Subsidiary Guarantors, subject to the Intercreditor Agreement).

Tab 5: Parent Equity Pledge Agreement, dated as of September 14, 2023, by Cascade Ridge SLG Holdings, LLC, pledging 100% of the equity interests in Stonefield Logistics Group Inc. to Ridgeline Mezzanine Capital Fund III, LP (first-priority pledge; not shared with the Senior Facility).

Tab 6: Warrant Agreement, dated as of September 29, 2023, between Stonefield Logistics Group Inc. and Ridgeline Mezzanine Capital Fund III, LP (providing for 3.0% warrant coverage of fully-diluted equity at an exercise price of $0.01 per share; warrants are detachable and immediately exercisable).

Tab 7: Registration Rights Agreement, dated as of September 29, 2023, between Stonefield Logistics Group Inc. and Ridgeline Mezzanine Capital Fund III, LP.

Tab 8: Amendment No. 3 to the Senior Credit Agreement (Amended and Restated Credit Agreement, dated as of April 7, 2022, as previously amended), dated as of September 14, 2023, among Stonefield Logistics Group Inc., Whitmore National Bank, N.A., as Administrative Agent, and the lenders party thereto (permitting the incurrence of the Mezzanine Facility and the granting of second-priority liens).

Tab 9: Senior Agent Consent Letter, dated September 5, 2023, from Whitmore National Bank, N.A., as Administrative Agent under the Senior Credit Agreement, consenting to certain matters in connection with the Mezzanine Facility.

Tab 10: Officer's Certificate (Closing Conditions), dated September 29, 2023, executed by Marcus W. Ellison, Chief Executive Officer of Stonefield, and Janet R. Prescott, Chief Financial Officer of Stonefield, certifying satisfaction of the conditions precedent to closing set forth in the Mezzanine Credit Agreement.

Tab 11: Secretary's Certificate of Stonefield Logistics Group Inc., dated September 29, 2023, executed by Robert D. Nagamine, Secretary, attaching certified copies of the certificate of incorporation, bylaws, board resolutions authorizing the Mezzanine Facility, and incumbency certificate.

Tab 12: Secretary's Certificate of the Subsidiary Guarantors (combined), dated September 29, 2023, certifying organizational documents, resolutions, and incumbency for each of Cascade Ridge SLG Holdings, LLC, Stonefield Intermodal Services, Inc., Stonefield Fleet Management, LLC, and Stonefield Freight Brokerage, Inc.

Tab 13: Solvency Certificate, dated September 29, 2023, executed by Janet R. Prescott, Chief Financial Officer of Stonefield, certifying the solvency of Stonefield and its subsidiaries on a consolidated basis after giving effect to the Mezzanine Facility (reflecting total funded debt of $407,000,000 against LTM Adjusted EBITDA of $108,600,000 as of June 30, 2023).

Tab 14: Initial Compliance Certificate, dated September 29, 2023, executed by Janet R. Prescott, Chief Financial Officer, demonstrating compliance with financial covenants as of the closing date (Total Leverage Ratio of 3.75x against a maximum covenant level of 4.25x).

Tab 15: Borrowing Request / Funding Notice, dated September 26, 2023, delivered by Stonefield to Ridgeline in accordance with the borrowing mechanics of the Mezzanine Credit Agreement.

Tab 16: Closing Funds Flow Memorandum, dated September 29, 2023, setting forth the sources and uses of funds and wire transfer instructions for all closing payments.

Tab 17: Calderwood & Harkness LLP Borrower's Counsel Opinion Letter, dated September 29, 2023, addressed to Ridgeline Mezzanine Capital Fund III, LP, covering customary matters including due authorization, enforceability, no conflicts, and compliance with applicable law.

Tab 18: Calderwood & Harkness LLP UCC/Lien Perfection Opinion, dated September 29, 2023, addressed to Ridgeline Mezzanine Capital Fund III, LP, opining on the perfection of the security interests granted under the Mezzanine Pledge and Security Agreement.

Tab 19: UCC-1 Financing Statement — Delaware (Ridgeline Mezzanine Capital Fund III, LP, as secured party; Stonefield Logistics Group Inc., as debtor; filed September 29, 2023, with the Delaware Secretary of State).

Tab 20: UCC-1 Financing Statement — Texas (Ridgeline Mezzanine Capital Fund III, LP, as secured party; Stonefield Intermodal Services, Inc. and Stonefield Fleet Management, LLC, as debtors; filed September 29, 2023, with the Texas Secretary of State).

Tab 21: Closing Checklist (final version), dated September 29, 2023, reflecting the status of all closing deliverables and conditions precedent.

3. Summary of Key Post-Closing Obligations

The following is a summary of the key post-closing obligations arising under the Mezzanine Credit Agreement, the Senior Credit Agreement (as amended by Amendment No. 3), and the Intercreditor Agreement. We strongly recommend that Stonefield calendar each of the deadlines set forth below and assign appropriate internal responsibility for compliance. This summary is not exhaustive and is qualified in its entirety by reference to the underlying agreements; Stonefield should consult the full text of each agreement (and counsel, as appropriate) with respect to any specific compliance question.

3.1 Quarterly Compliance Certificate Delivery

Under Section 6.02(a) of the Mezzanine Credit Agreement, Stonefield is required to deliver a Compliance Certificate to Ridgeline within forty-five (45) days after the end of each fiscal quarter (and within ninety (90) days after the end of each fiscal year). Each Compliance Certificate must be executed by the Chief Financial Officer of Stonefield and must set forth, in reasonable detail, calculations demonstrating compliance with each of the following financial covenants:

(a) Maximum Total Leverage Ratio. The ratio of Total Funded Debt to LTM Adjusted EBITDA may not exceed 4.25 to 1.00 as of the last day of any fiscal quarter through and including the fiscal quarter ending June 30, 2024. The maximum permitted Total Leverage Ratio steps down to 4.00 to 1.00 beginning with the fiscal quarter ending September 30, 2024, and steps down further to 3.75 to 1.00 beginning with the fiscal quarter ending September 30, 2025, and each fiscal quarter thereafter. The Total Leverage Ratio is tested on a quarterly basis.

(b) Minimum Fixed Charge Coverage Ratio. The ratio of (i) LTM Adjusted EBITDA minus unfinanced capital expenditures minus cash taxes paid to (ii) Fixed Charges (as defined in the Mezzanine Credit Agreement) must be at least 1.10 to 1.00 as of the last day of each fiscal quarter. This covenant is tested quarterly.

(c) Minimum Liquidity. Stonefield must maintain Liquidity of not less than $15,000,000 at all times. "Liquidity" is defined as the sum of (i) unrestricted cash and cash equivalents of Stonefield and its subsidiaries on a consolidated basis plus (ii) unused and available commitments under the $50,000,000 Senior Revolving Credit Facility with Whitmore National Bank, N.A. Compliance with this covenant is tested as of the last day of each fiscal quarter and is also subject to a "springing" test at any time upon Ridgeline's reasonable request.

(d) Maximum Capital Expenditures. Total capital expenditures of Stonefield and its subsidiaries on a consolidated basis may not exceed $85,000,000 in any fiscal year. Unused amounts up to 25% of the annual cap may be carried forward to the immediately succeeding fiscal year (but not beyond). This covenant is tested annually.

We recommend that Stonefield coordinate closely with Braddock & Saylor LLP, the Company's independent registered public accounting firm (engagement partner: William F. Saylor), and with Zynvaro Thornton Advisory Group, LLC, the Company's financial advisor (Andrew S. Thornton), to ensure the timely preparation and verification of compliance data. The designated certifying officer under the Mezzanine Credit Agreement is Janet R. Prescott, Chief Financial Officer of Stonefield. To the extent the CFO role transitions to another individual, Stonefield should promptly update Ridgeline and amend its incumbency records.

3.2 Annual Financial Statement Delivery

Under Section 6.01 of the Mezzanine Credit Agreement:

(a) Audited consolidated financial statements (including balance sheet, income statement, statement of cash flows, and statement of stockholders' equity) for each fiscal year must be delivered to Ridgeline within ninety (90) days after the end of such fiscal year. The financial statements must be prepared in accordance with GAAP and must be audited by an independent registered public accounting firm of recognized national standing. Stonefield's current auditors are Braddock & Saylor LLP. Any change of auditors requires prior written notice to Ridgeline.

(b) Unaudited consolidated financial statements for each fiscal quarter (other than the fourth fiscal quarter) must be delivered within forty-five (45) days after the end of such fiscal quarter. Such financial statements must be certified by the Chief Financial Officer as fairly presenting, in all material respects, the financial condition and results of operations of Stonefield and its subsidiaries.

Copies of all financial statements delivered under the Mezzanine Credit Agreement must be simultaneously delivered to:

• Ridgeline Mezzanine Capital Fund III, LP

Attention: Katherine M. Stroud

767 Lexington Avenue, 22nd Floor New York, New York 10065

• Whitmore National Bank, N.A. (as Senior Agent under the Senior Credit Agreement)

Attention: Gregory S. Feinberg

350 Park Avenue New York, New York 10022

Delivery to the Senior Agent is required both under the Senior Credit Agreement and under Section 5.04 of the Intercreditor Agreement, which contains parallel information-sharing provisions between the senior and mezzanine lender groups.

3.3 First Interest Payment Date

The first quarterly interest payment under the Mezzanine Credit Agreement is due on December 29, 2023. Interest on the Mezzanine Facility accrues at a blended rate of 11.00% per annum (1,100 basis points), which is comprised of two components:

(a) Cash Interest. Cash-pay interest accrues at a rate of 8.50% per annum (850 basis points) on the outstanding principal balance of the Mezzanine Facility. Cash interest is computed on an Actual/360 day count convention and is payable quarterly in arrears on the last business day of each calendar quarter.

(b) PIK Interest. Payment-in-kind ("PIK") interest accrues at a rate of 2.50% per annum (250 basis points), compounding quarterly. On each quarterly interest payment date, accrued PIK interest is capitalized and added to the outstanding principal balance of the Mezzanine Facility. PIK interest does not require a cash payment on each payment date but does increase the principal balance on which future interest (both cash and PIK) accrues.

For the first interest payment period (September 29, 2023, through December 29, 2023), the cash interest amount payable on $120,000,000 of principal outstanding (assuming a 91-day period and Actual/360 day count) will be approximately $2,577,500. The PIK interest that will be capitalized on December 29, 2023, will be approximately $758,333, bringing the outstanding principal balance to approximately $120,758,333 as of that date.

All cash interest payments are to be made to Ridgeline Mezzanine Capital Fund III, LP in immediately available funds in accordance with the wire instructions set forth in Schedule 2.05 of the Mezzanine Credit Agreement. Please confirm that Stonefield's treasury team has the correct wire instructions on file and has established the necessary internal procedures for timely remittance.

Subsequent quarterly interest payment dates fall on the last business day of each calendar quarter. The Mezzanine Facility matures on September 29, 2029, at which time all outstanding principal (including capitalized PIK interest), accrued and unpaid cash interest, and any other amounts due under the Mezzanine Credit Agreement become due and payable in full.

3.4 UCC Continuation Filing Requirements

The UCC-1 financing statements filed in connection with the Mezzanine Facility have an effectiveness period of five (5) years from the date of filing pursuant to Section 9-515(a) of the Uniform Commercial Code. Because the financing statements were filed on September 29, 2023, they will lapse on September 29, 2028, unless continuation statements are timely filed.

Pursuant to Section 9-515(d) of the UCC, a UCC-3 continuation statement must be filed within the six-month window prior to the five-year lapse date — that is, between approximately March 29, 2028, and September 29, 2028 — in order to maintain the effectiveness of the original filing and the perfection of Ridgeline's security interest. Failure to timely file a continuation statement would result in the lapse of the financing statement and the loss of perfection of Ridgeline's second-priority security interest in the collateral.

The applicable filing jurisdictions and debtors are as follows:

Calderwood & Harkness is available to assist with the preparation and filing of UCC-3 continuation statements and to provide ongoing monitoring of UCC filing deadlines. We strongly recommend that Stonefield calendar the continuation filing window well in advance (no later than January 2028) and coordinate with Ridgeline's counsel, Archer Blackwell & Moss LLP, to ensure that both the second-lien filings (for the Mezzanine Facility) and the first-lien filings (for the Senior Facility) are renewed in a coordinated manner.

With respect to the Parent Equity Pledge Agreement (Tab 5 of the Closing Binders), the first-priority pledge of 100% of the equity interests in Stonefield by Cascade Ridge SLG Holdings, LLC is perfected by possession of the original stock certificate(s) and the related endorsed-in-blank stock power(s), not by UCC filing. No UCC-1 financing statement was filed in connection with this pledge. However, it is critical that the physical stock certificates and stock powers remain in the custody of Ridgeline Mezzanine Capital Fund III, LP (or its designated custodian, Archer Blackwell & Moss LLP) at all times. If Stonefield or Cascade Ridge requires temporary access to the original certificates for any reason, prior arrangements must be made with Ridgeline and its counsel to ensure that perfection is not interrupted.

3.5 Insurance and Regulatory Compliance

Pursuant to Section 6.07 of the Mezzanine Credit Agreement, Stonefield is required to maintain the insurance coverages specified in Schedule 6.07 of the Mezzanine Credit Agreement at all times during the term of the Mezzanine Facility. These coverages include, without limitation, commercial general liability insurance, property insurance (including coverage for fleet assets), auto liability insurance, umbrella/excess liability insurance, workers' compensation insurance, and such other coverages as are customary for companies in the transportation and logistics industry. Evidence of all insurance coverages, including renewal certificates and endorsements naming Ridgeline Mezzanine Capital Fund III, LP as additional insured and/or loss payee, as applicable, must be provided to Ridgeline annually and promptly upon any material change in coverage.

Stonefield must also maintain its USDOT Number (currently 2847391) and all related federal and state operating authority in good standing at all times. Any changes in operating authority, including the addition or loss of any operating authority by Stonefield or any of its subsidiaries, should be promptly reported to Ridgeline in writing.

Additionally, Stonefield is required to deliver annual certificates of good standing from the following jurisdictions:

• Delaware: Stonefield Logistics Group Inc., Cascade Ridge SLG Holdings, LLC, and Stonefield Freight Brokerage, Inc.

• Texas: Stonefield Intermodal Services, Inc. and Stonefield Fleet Management, LLC

These certificates must be obtained from the applicable Secretary of State and delivered to Ridgeline within ninety (90) days after the end of each fiscal year, concurrently with the delivery of audited financial statements.

3.6 Notice Requirements

The Mezzanine Credit Agreement imposes a number of ongoing notice obligations on Stonefield, including, without limitation:

(a) Prompt written notice (and in any event within five (5) business days) to Ridgeline of the occurrence of any Default or Event of Default under the Mezzanine Credit Agreement, together with a description of the nature of the default and any steps being taken or proposed to be taken to cure or remedy such default.

(b) Prompt written notice to Ridgeline of any default or event of default under the Senior Credit Agreement (the Amended and Restated Credit Agreement, dated as of April 7, 2022, among Stonefield, Whitmore National Bank, N.A., as Administrative Agent, and the lenders party thereto, as amended by Amendment No. 3), regardless of whether such default has been waived by the Senior Agent or the senior lenders.

(c) Prompt written notice to Ridgeline of any material litigation (including the commencement of any action, suit, proceeding, or governmental investigation involving Stonefield or any subsidiary where the amount in controversy exceeds $5,000,000), any Material Adverse Change, or any Change of Control event.

For purposes of the Mezzanine Credit Agreement, a "Change of Control" is deemed to have occurred upon any of the following:

(i) any Person or "group" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), other than Cascade Ridge Capital Partners, LLC and its affiliates, acquires direct or indirect beneficial ownership of more than 50% of the voting equity interests of Stonefield or Cascade Ridge SLG Holdings, LLC;

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

(iii) 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 other than Cascade Ridge Capital Partners, LLC or its affiliates.

The occurrence of a Change of Control constitutes a mandatory prepayment event under Section 2.11 of the Mezzanine Credit Agreement, requiring Stonefield to prepay all outstanding principal under the Mezzanine Facility at a price equal to 103% of the outstanding principal balance (including capitalized PIK interest), together with all accrued and unpaid cash interest and any other amounts due and owing. In addition, a Change of Control triggers the put right under the Warrant Agreement (Tab 6), pursuant to which Ridgeline may require Stonefield (or its successor) to purchase the warrants at their fair market value (determined in accordance with the valuation procedures set forth in Section 8 of the Warrant Agreement).

3.7 Restricted Payment and Covenant Monitoring

The Mezzanine Credit Agreement and the Senior Credit Agreement (as amended) each contain a comprehensive set of restrictive covenants governing the operations of Stonefield and its subsidiaries. These include, without limitation, restrictions on:

• Restricted Payments: Dividends, distributions, equity repurchases, and other payments to equity holders are restricted to a limited "general basket" and certain enumerated exceptions.

• Debt Incurrence: Additional indebtedness is limited to specified permitted baskets and incremental facilities, subject to pro forma compliance with financial covenants.

• Asset Sales: Sales, transfers, and other dispositions of assets are restricted, with mandatory prepayment requirements in respect of net cash proceeds above certain thresholds.

• Investments: Investments in joint ventures, acquisitions, and other equity interests are subject to basket limitations and, in certain cases, pro forma compliance testing.

• Affiliate Transactions: Transactions with affiliates must be on terms no less favorable than arm's-length terms and, above certain dollar thresholds, require board approval and/or a fairness opinion.

We strongly recommend that Stonefield implement internal compliance procedures to monitor compliance with these covenants on an ongoing basis. Any contemplated transactions that may implicate covenant baskets — including, without limitation, proposed dividends or distributions, acquisitions or investments, asset sales, incurrence of additional indebtedness, or material transactions with affiliates — should be reviewed with counsel in advance to confirm compliance and to determine whether any consents or waivers may be required.

4. Capital Structure Summary (Post-Closing)

Set forth below is a summary of the capital structure of Stonefield as of the closing of the Mezzanine Facility on September 29, 2023:

Key Credit Metrics (as of September 29, 2023, based on LTM Adjusted EBITDA of $108,600,000 as of June 30, 2023):

5. Transaction Cost Recap

The following is a summary of the transaction costs paid from mezzanine proceeds at closing in accordance with the Closing Funds Flow Memorandum (Tab 16):

Net mezzanine loan proceeds to Stonefield after deduction of the foregoing transaction costs were approximately $115,437,500, which were funded to Stonefield's operating account at Whitmore National Bank, N.A. in accordance with the wire instructions set forth in the Closing Funds Flow Memorandum.

6. Key Upcoming Dates Calendar

We recommend that Stonefield calendar the following critical dates and compliance deadlines:

We note that the Senior Revolving Credit Facility and Senior Term Loan B mature in 2025 and 2026, respectively — well in advance of the Mezzanine Facility maturity in 2029. Stonefield should begin to plan for the refinancing of the Senior Facility well ahead of these maturity dates, and any refinancing will need to be structured in compliance with the Intercreditor Agreement and the Mezzanine Credit Agreement (including the requirement that any replacement senior facility be subject to an intercreditor agreement on terms no less favorable to Ridgeline than the existing Intercreditor Agreement).

7. Document Retention and Contact Information

We recommend that Stonefield retain its Closing Binder, together with fully executed originals of all key documents, in a secure location accessible to Stonefield's legal and finance teams. As noted above, a duplicate Closing Binder is being transmitted to Cascade Ridge Capital Partners, LLC, attention: Vincent A. Palumbo, at 200 Clarendon Boulevard, 38th Floor, Boston, Massachusetts 02116. Calderwood & Harkness will retain its own copies of all transaction documents in the firm's records in accordance with our standard document retention policies.

For any questions regarding post-closing obligations, ongoing covenant compliance, UCC filings, or any other matter arising under the Mezzanine Facility, the Intercreditor Agreement, or the related transaction documents, please do not hesitate to contact any of the following members of the Calderwood & Harkness engagement team:

Stephanie Okafor, Responsible Partner Telephone: (212) 506-7134

Email: sokafor@calderwoodharkness.com

Daniel Obi, Lead Associate Telephone: (212) 506-7291

Email: dobi@calderwoodharkness.com

Lisa Morrow, Working Associate Telephone: (212) 506-7318

Email: lmorrow@calderwoodharkness.com

Sylvia Hartwell, Tax Specialist Partner (for tax-related matters) Telephone: (212) 506-7205

Email: shartwell@calderwoodharkness.com

Please reference Matter No. 1012-00001 and Billing Code 231892.SLG in all correspondence with Calderwood & Harkness relating to this engagement.

8. Closing Remarks

On behalf of the entire Calderwood & Harkness engagement team, we would like to express our sincere appreciation for the opportunity to represent Stonefield Logistics Group Inc. in connection with this mezzanine financing. It was a pleasure working with you, Marcus, Janet, and the entire Stonefield team, as well as with Vincent Palumbo and the Cascade Ridge team, to bring this transaction to a successful close. We extend our congratulations to Stonefield on the successful closing of the Mezzanine Facility, which we understand will provide critical capital to support the Company's fleet expansion and facility buildout program over the coming years.

We remain available to assist Stonefield with any future financing matters, ongoing advisory needs, covenant compliance questions, or any other legal matters that may arise. Please do not hesitate to reach out at any time.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Stephanie Okafor Partner, Banking & Finance 601 Lexington Avenue New York, New York 10022

Enclosures: Closing Binders (2 sets)

cc:

Marcus W. Ellison, Chief Executive Officer, Stonefield Logistics Group Inc. Janet R. Prescott, Chief Financial Officer, Stonefield Logistics Group Inc. Vincent A. Palumbo, Managing Partner, Cascade Ridge Capital Partners, LLC Philip Hartmann, Calderwood & Harkness LLP Daniel Obi, Calderwood & Harkness LLP Lisa Morrow, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP

Filing Jurisdiction	Debtor(s)	Filing Office
Delaware	Stonefield Logistics Group Inc.; Stonefield Freight Brokerage, Inc. (if applicable)	Delaware Secretary of State, Division of Corporations
Texas	Stonefield Intermodal Services, Inc.; Stonefield Fleet Management, LLC	Texas Secretary of State
Facility	Commitment / Principal	Interest Rate	Maturity	Lien Priority
Senior Secured Term Loan B	$275,000,000	SOFR + 375 bps	November 15, 2026	First Lien
Senior Secured Revolving Credit Facility	$50,000,000 committed ($12,000,000 drawn at closing)	SOFR + 350 bps	November 15, 2025	First Lien (pari passu with TLB)
Mezzanine Term Loan	$120,000,000	1,100 bps (850 cash / 250 PIK)	September 29, 2029	Second Lien / Subordinated
Total Funded Debt at Closing	$407,000,000
Metric	Level
Total Leverage Ratio	3.75x
Senior Leverage Ratio	2.64x
Mezzanine Leverage (incremental)	1.10x
Payee	Description	Amount
Ridgeline Mezzanine Capital Fund III, LP	Commitment Fee (2.00% × $120,000,000)	$2,400,000
Zynvaro Thornton Advisory Group, LLC	Financial Advisory Fee (0.75% × $120,000,000)	$900,000
Calderwood & Harkness LLP	Legal Fees (fee cap, plus disbursements)	$675,000
Archer Blackwell & Moss LLP	Lender's Counsel Expense Reimbursement (cap, plus disbursements)	$450,000
Whitmore National Bank, N.A.	Senior Agent Amendment Fee (0.05% × $275,000,000)	$137,500
Total Estimated Transaction Costs	$4,562,500
Date	Event / Obligation
December 29, 2023	First quarterly interest payment date under the Mezzanine Credit Agreement (cash pay interest due to Ridgeline; PIK interest capitalized to outstanding principal balance)
Within 45 days of each quarter-end	Delivery of quarterly Compliance Certificate and unaudited quarterly financial statements to Ridgeline and Whitmore (Senior Agent)
Within 90 days of fiscal year-end	Delivery of audited annual financial statements and annual Compliance Certificate to Ridgeline and Whitmore (Senior Agent)
November 15, 2025	Maturity date of the Senior Secured Revolving Credit Facility ($50,000,000 committed)
November 15, 2026	Maturity date of the Senior Secured Term Loan B ($275,000,000)

March 29, 2028 – September 29, 2028	Six-month window for filing UCC-3 continuation statements to maintain perfection of Ridgeline's second-priority security interests (Delaware and Texas)
September 29, 2029	Maturity date of the Mezzanine Facility; all outstanding principal (including capitalized PIK), accrued interest, and other amounts due and payable
September 29, 2030	Seventh (7th) anniversary put right date under the Warrant Agreement (Section 7.02), pursuant to which Ridgeline may require Stonefield to repurchase the warrants at fair market value

CALDERWOOD & HARKNESS LLP Attorneys at Law
601 Lexington Avenue New York, New York 10022
Telephone: (212) 506-7000 Facsimile: (212) 506-7001 www.calderwoodharkness.com
October 2, 2023
Robert D. Nagamine General Counsel & Secretary Stonefield Logistics Group Inc. 4800 Commerce Parkway, Suite 1200 Fort Worth, Texas 76107
Re: $120,000,000 Mezzanine Financing — Post-Closing Transmittal and Summary of Post-Closing Obligations Matter No. 1012-00001
Dear Robert:
1. Closing Confirmation and Transmittal
We are pleased to confirm that the $120,000,000 mezzanine term loan facility (the "Mezzanine Facility") in favor of Stonefield Logistics Group Inc. ("Stonefield" or the "Borrower") closed and was fully funded on September 29, 2023. The Mezzanine Facility was extended by Ridgeline Mezzanine Capital Fund III, LP ("Ridgeline" or the "Mezzanine Lender") pursuant to the terms of the Mezzanine Credit Agreement, dated as of September 14, 2023 (the "Mezzanine Credit Agreement"), among Stonefield, as Borrower, Ridgeline, as Mezzanine Lender, and the guarantors party thereto. The relative lien priorities and intercreditor arrangements among the senior and mezzanine secured parties are governed by the Intercreditor Agreement, dated as of September 14, 2023 (the "Intercreditor Agreement"), among Whitmore National Bank, N.A. ("Whitmore"), as Senior Agent, Ridgeline, as Mezzanine Lender, and acknowledged and agreed to by Stonefield.
Enclosed with this letter, you will find two (2) complete sets of closing binders containing fully executed originals or conformed copies of all transaction documents, agreements, certificates, and ancillary instruments delivered in connection with the closing of the Mezzanine Facility (each, a "Closing Binder"). One Closing Binder is for Stonefield's records, and the second Closing Binder is being transmitted under separate cover to Cascade Ridge Capital Partners, LLC, attention: Vincent A. Palumbo, at 200 Clarendon Boulevard, 38th Floor, Boston, Massachusetts 02116. Should you or any other party require additional Closing Binder sets, we would be happy to prepare them upon request.
The Calderwood & Harkness engagement team for this matter has been composed of the following attorneys:
• Stephanie Okafor, Responsible Partner
• Philip Hartmann, Billing Partner
• Daniel Obi, Lead Associate
• Lisa Morrow, Working Associate
• Sylvia Hartwell, Tax Specialist Partner
This letter serves both as a transmittal for the enclosed Closing Binders and as a summary of the key post-closing obligations that Stonefield should calendar and monitor in connection with the Mezzanine Facility, the Senior Credit Agreement (as amended), and the Intercreditor Agreement. We recommend that this letter be shared with Janet R. Prescott (Chief Financial Officer) and other members of Stonefield's finance and legal teams responsible for ongoing debt compliance.
2. Summary of Closing Binder Contents
The enclosed Closing Binders are organized by numbered tab. Set forth below is an itemized summary of the documents contained at each tab:
Tab 1: Mezzanine Credit Agreement, dated as of September 14, 2023, among Stonefield Logistics Group Inc., as Borrower, Ridgeline Mezzanine Capital Fund III, LP, as Mezzanine Lender, and the guarantors party thereto.
Tab 2: Intercreditor Agreement, dated as of September 14, 2023, among Whitmore National Bank, N.A., as Senior Agent, Ridgeline Mezzanine Capital Fund III, LP, as Mezzanine Lender, and acknowledged and agreed to by Stonefield Logistics Group Inc.
Tab 3: Mezzanine Guaranty Agreement, dated as of September 14, 2023, by Cascade Ridge SLG Holdings, LLC, Stonefield Intermodal Services, Inc., Stonefield Fleet Management, LLC, and Stonefield Freight Brokerage, Inc. (collectively, the "Subsidiary Guarantors"), in favor of Ridgeline Mezzanine Capital Fund III, LP.
Tab 4: Mezzanine Pledge and Security Agreement, dated as of September 14, 2023, by Stonefield Logistics Group Inc. and the Subsidiary Guarantors in favor of Ridgeline Mezzanine Capital Fund III, LP (granting a second-priority security interest in substantially all assets of Stonefield and the Subsidiary Guarantors, subject to the Intercreditor Agreement).
Tab 5: Parent Equity Pledge Agreement, dated as of September 14, 2023, by Cascade Ridge SLG Holdings, LLC, pledging 100% of the equity interests in Stonefield Logistics Group Inc. to Ridgeline Mezzanine Capital Fund III, LP (first-priority pledge; not shared with the Senior Facility).
Tab 6: Warrant Agreement, dated as of September 29, 2023, between Stonefield Logistics Group Inc. and Ridgeline Mezzanine Capital Fund III, LP (providing for 3.0% warrant coverage of fully-diluted equity at an exercise price of $0.01 per share; warrants are detachable and immediately exercisable).
Tab 7: Registration Rights Agreement, dated as of September 29, 2023, between Stonefield Logistics Group Inc. and Ridgeline Mezzanine Capital Fund III, LP.
Tab 8: Amendment No. 3 to the Senior Credit Agreement (Amended and Restated Credit Agreement, dated as of April 7, 2022, as previously amended), dated as of September 14, 2023, among Stonefield Logistics Group Inc., Whitmore National Bank, N.A., as Administrative Agent, and the lenders party thereto (permitting the incurrence of the Mezzanine Facility and the granting of second-priority liens).
Tab 9: Senior Agent Consent Letter, dated September 5, 2023, from Whitmore National Bank, N.A., as Administrative Agent under the Senior Credit Agreement, consenting to certain matters in connection with the Mezzanine Facility.
Tab 10: Officer's Certificate (Closing Conditions), dated September 29, 2023, executed by Marcus W. Ellison, Chief Executive Officer of Stonefield, and Janet R. Prescott, Chief Financial Officer of Stonefield, certifying satisfaction of the conditions precedent to closing set forth in the Mezzanine Credit Agreement.
Tab 11: Secretary's Certificate of Stonefield Logistics Group Inc., dated September 29, 2023, executed by Robert D. Nagamine, Secretary, attaching certified copies of the certificate of incorporation, bylaws, board resolutions authorizing the Mezzanine Facility, and incumbency certificate.
Tab 12: Secretary's Certificate of the Subsidiary Guarantors (combined), dated September 29, 2023, certifying organizational documents, resolutions, and incumbency for each of Cascade Ridge SLG Holdings, LLC, Stonefield Intermodal Services, Inc., Stonefield Fleet Management, LLC, and Stonefield Freight Brokerage, Inc.
Tab 13: Solvency Certificate, dated September 29, 2023, executed by Janet R. Prescott, Chief Financial Officer of Stonefield, certifying the solvency of Stonefield and its subsidiaries on a consolidated basis after giving effect to the Mezzanine Facility (reflecting total funded debt of $407,000,000 against LTM Adjusted EBITDA of $108,600,000 as of June 30, 2023).
Tab 14: Initial Compliance Certificate, dated September 29, 2023, executed by Janet R. Prescott, Chief Financial Officer, demonstrating compliance with financial covenants as of the closing date (Total Leverage Ratio of 3.75x against a maximum covenant level of 4.25x).
Tab 15: Borrowing Request / Funding Notice, dated September 26, 2023, delivered by Stonefield to Ridgeline in accordance with the borrowing mechanics of the Mezzanine Credit Agreement.
Tab 16: Closing Funds Flow Memorandum, dated September 29, 2023, setting forth the sources and uses of funds and wire transfer instructions for all closing payments.
Tab 17: Calderwood & Harkness LLP Borrower's Counsel Opinion Letter, dated September 29, 2023, addressed to Ridgeline Mezzanine Capital Fund III, LP, covering customary matters including due authorization, enforceability, no conflicts, and compliance with applicable law.
Tab 18: Calderwood & Harkness LLP UCC/Lien Perfection Opinion, dated September 29, 2023, addressed to Ridgeline Mezzanine Capital Fund III, LP, opining on the perfection of the security interests granted under the Mezzanine Pledge and Security Agreement.
Tab 19: UCC-1 Financing Statement — Delaware (Ridgeline Mezzanine Capital Fund III, LP, as secured party; Stonefield Logistics Group Inc., as debtor; filed September 29, 2023, with the Delaware Secretary of State).
Tab 20: UCC-1 Financing Statement — Texas (Ridgeline Mezzanine Capital Fund III, LP, as secured party; Stonefield Intermodal Services, Inc. and Stonefield Fleet Management, LLC, as debtors; filed September 29, 2023, with the Texas Secretary of State).
Tab 21: Closing Checklist (final version), dated September 29, 2023, reflecting the status of all closing deliverables and conditions precedent.
3. Summary of Key Post-Closing Obligations
The following is a summary of the key post-closing obligations arising under the Mezzanine Credit Agreement, the Senior Credit Agreement (as amended by Amendment No. 3), and the Intercreditor Agreement. We strongly recommend that Stonefield calendar each of the deadlines set forth below and assign appropriate internal responsibility for compliance. This summary is not exhaustive and is qualified in its entirety by reference to the underlying agreements; Stonefield should consult the full text of each agreement (and counsel, as appropriate) with respect to any specific compliance question.
3.1 Quarterly Compliance Certificate Delivery
Under Section 6.02(a) of the Mezzanine Credit Agreement, Stonefield is required to deliver a Compliance Certificate to Ridgeline within forty-five (45) days after the end of each fiscal quarter (and within ninety (90) days after the end of each fiscal year). Each Compliance Certificate must be executed by the Chief Financial Officer of Stonefield and must set forth, in reasonable detail, calculations demonstrating compliance with each of the following financial covenants:
(a) Maximum Total Leverage Ratio. The ratio of Total Funded Debt to LTM Adjusted EBITDA may not exceed 4.25 to 1.00 as of the last day of any fiscal quarter through and including the fiscal quarter ending June 30, 2024. The maximum permitted Total Leverage Ratio steps down to 4.00 to 1.00 beginning with the fiscal quarter ending September 30, 2024, and steps down further to 3.75 to 1.00 beginning with the fiscal quarter ending September 30, 2025, and each fiscal quarter thereafter. The Total Leverage Ratio is tested on a quarterly basis.
(b) Minimum Fixed Charge Coverage Ratio. The ratio of (i) LTM Adjusted EBITDA minus unfinanced capital expenditures minus cash taxes paid to (ii) Fixed Charges (as defined in the Mezzanine Credit Agreement) must be at least 1.10 to 1.00 as of the last day of each fiscal quarter. This covenant is tested quarterly.
(c) Minimum Liquidity. Stonefield must maintain Liquidity of not less than $15,000,000 at all times. "Liquidity" is defined as the sum of (i) unrestricted cash and cash equivalents of Stonefield and its subsidiaries on a consolidated basis plus (ii) unused and available commitments under the $50,000,000 Senior Revolving Credit Facility with Whitmore National Bank, N.A. Compliance with this covenant is tested as of the last day of each fiscal quarter and is also subject to a "springing" test at any time upon Ridgeline's reasonable request.
(d) Maximum Capital Expenditures. Total capital expenditures of Stonefield and its subsidiaries on a consolidated basis may not exceed $85,000,000 in any fiscal year. Unused amounts up to 25% of the annual cap may be carried forward to the immediately succeeding fiscal year (but not beyond). This covenant is tested annually.
We recommend that Stonefield coordinate closely with Braddock & Saylor LLP, the Company's independent registered public accounting firm (engagement partner: William F. Saylor), and with Zynvaro Thornton Advisory Group, LLC, the Company's financial advisor (Andrew S. Thornton), to ensure the timely preparation and verification of compliance data. The designated certifying officer under the Mezzanine Credit Agreement is Janet R. Prescott, Chief Financial Officer of Stonefield. To the extent the CFO role transitions to another individual, Stonefield should promptly update Ridgeline and amend its incumbency records.
3.2 Annual Financial Statement Delivery
Under Section 6.01 of the Mezzanine Credit Agreement:
(a) Audited consolidated financial statements (including balance sheet, income statement, statement of cash flows, and statement of stockholders' equity) for each fiscal year must be delivered to Ridgeline within ninety (90) days after the end of such fiscal year. The financial statements must be prepared in accordance with GAAP and must be audited by an independent registered public accounting firm of recognized national standing. Stonefield's current auditors are Braddock & Saylor LLP. Any change of auditors requires prior written notice to Ridgeline.
(b) Unaudited consolidated financial statements for each fiscal quarter (other than the fourth fiscal quarter) must be delivered within forty-five (45) days after the end of such fiscal quarter. Such financial statements must be certified by the Chief Financial Officer as fairly presenting, in all material respects, the financial condition and results of operations of Stonefield and its subsidiaries.
Copies of all financial statements delivered under the Mezzanine Credit Agreement must be simultaneously delivered to:
• Ridgeline Mezzanine Capital Fund III, LP
Attention: Katherine M. Stroud
767 Lexington Avenue, 22nd Floor New York, New York 10065
• Whitmore National Bank, N.A. (as Senior Agent under the Senior Credit Agreement)
Attention: Gregory S. Feinberg
350 Park Avenue New York, New York 10022
Delivery to the Senior Agent is required both under the Senior Credit Agreement and under Section 5.04 of the Intercreditor Agreement, which contains parallel information-sharing provisions between the senior and mezzanine lender groups.
3.3 First Interest Payment Date
The first quarterly interest payment under the Mezzanine Credit Agreement is due on December 29, 2023. Interest on the Mezzanine Facility accrues at a blended rate of 11.00% per annum (1,100 basis points), which is comprised of two components:
(a) Cash Interest. Cash-pay interest accrues at a rate of 8.50% per annum (850 basis points) on the outstanding principal balance of the Mezzanine Facility. Cash interest is computed on an Actual/360 day count convention and is payable quarterly in arrears on the last business day of each calendar quarter.
(b) PIK Interest. Payment-in-kind ("PIK") interest accrues at a rate of 2.50% per annum (250 basis points), compounding quarterly. On each quarterly interest payment date, accrued PIK interest is capitalized and added to the outstanding principal balance of the Mezzanine Facility. PIK interest does not require a cash payment on each payment date but does increase the principal balance on which future interest (both cash and PIK) accrues.
For the first interest payment period (September 29, 2023, through December 29, 2023), the cash interest amount payable on $120,000,000 of principal outstanding (assuming a 91-day period and Actual/360 day count) will be approximately $2,577,500. The PIK interest that will be capitalized on December 29, 2023, will be approximately $758,333, bringing the outstanding principal balance to approximately $120,758,333 as of that date.
All cash interest payments are to be made to Ridgeline Mezzanine Capital Fund III, LP in immediately available funds in accordance with the wire instructions set forth in Schedule 2.05 of the Mezzanine Credit Agreement. Please confirm that Stonefield's treasury team has the correct wire instructions on file and has established the necessary internal procedures for timely remittance.
Subsequent quarterly interest payment dates fall on the last business day of each calendar quarter. The Mezzanine Facility matures on September 29, 2029, at which time all outstanding principal (including capitalized PIK interest), accrued and unpaid cash interest, and any other amounts due under the Mezzanine Credit Agreement become due and payable in full.
3.4 UCC Continuation Filing Requirements
The UCC-1 financing statements filed in connection with the Mezzanine Facility have an effectiveness period of five (5) years from the date of filing pursuant to Section 9-515(a) of the Uniform Commercial Code. Because the financing statements were filed on September 29, 2023, they will lapse on September 29, 2028, unless continuation statements are timely filed.
Pursuant to Section 9-515(d) of the UCC, a UCC-3 continuation statement must be filed within the six-month window prior to the five-year lapse date — that is, between approximately March 29, 2028, and September 29, 2028 — in order to maintain the effectiveness of the original filing and the perfection of Ridgeline's security interest. Failure to timely file a continuation statement would result in the lapse of the financing statement and the loss of perfection of Ridgeline's second-priority security interest in the collateral.
The applicable filing jurisdictions and debtors are as follows:
Calderwood & Harkness is available to assist with the preparation and filing of UCC-3 continuation statements and to provide ongoing monitoring of UCC filing deadlines. We strongly recommend that Stonefield calendar the continuation filing window well in advance (no later than January 2028) and coordinate with Ridgeline's counsel, Archer Blackwell & Moss LLP, to ensure that both the second-lien filings (for the Mezzanine Facility) and the first-lien filings (for the Senior Facility) are renewed in a coordinated manner.
With respect to the Parent Equity Pledge Agreement (Tab 5 of the Closing Binders), the first-priority pledge of 100% of the equity interests in Stonefield by Cascade Ridge SLG Holdings, LLC is perfected by possession of the original stock certificate(s) and the related endorsed-in-blank stock power(s), not by UCC filing. No UCC-1 financing statement was filed in connection with this pledge. However, it is critical that the physical stock certificates and stock powers remain in the custody of Ridgeline Mezzanine Capital Fund III, LP (or its designated custodian, Archer Blackwell & Moss LLP) at all times. If Stonefield or Cascade Ridge requires temporary access to the original certificates for any reason, prior arrangements must be made with Ridgeline and its counsel to ensure that perfection is not interrupted.
3.5 Insurance and Regulatory Compliance
Pursuant to Section 6.07 of the Mezzanine Credit Agreement, Stonefield is required to maintain the insurance coverages specified in Schedule 6.07 of the Mezzanine Credit Agreement at all times during the term of the Mezzanine Facility. These coverages include, without limitation, commercial general liability insurance, property insurance (including coverage for fleet assets), auto liability insurance, umbrella/excess liability insurance, workers' compensation insurance, and such other coverages as are customary for companies in the transportation and logistics industry. Evidence of all insurance coverages, including renewal certificates and endorsements naming Ridgeline Mezzanine Capital Fund III, LP as additional insured and/or loss payee, as applicable, must be provided to Ridgeline annually and promptly upon any material change in coverage.
Stonefield must also maintain its USDOT Number (currently 2847391) and all related federal and state operating authority in good standing at all times. Any changes in operating authority, including the addition or loss of any operating authority by Stonefield or any of its subsidiaries, should be promptly reported to Ridgeline in writing.
Additionally, Stonefield is required to deliver annual certificates of good standing from the following jurisdictions:
• Delaware: Stonefield Logistics Group Inc., Cascade Ridge SLG Holdings, LLC, and Stonefield Freight Brokerage, Inc.
• Texas: Stonefield Intermodal Services, Inc. and Stonefield Fleet Management, LLC
These certificates must be obtained from the applicable Secretary of State and delivered to Ridgeline within ninety (90) days after the end of each fiscal year, concurrently with the delivery of audited financial statements.
3.6 Notice Requirements
The Mezzanine Credit Agreement imposes a number of ongoing notice obligations on Stonefield, including, without limitation:
(a) Prompt written notice (and in any event within five (5) business days) to Ridgeline of the occurrence of any Default or Event of Default under the Mezzanine Credit Agreement, together with a description of the nature of the default and any steps being taken or proposed to be taken to cure or remedy such default.
(b) Prompt written notice to Ridgeline of any default or event of default under the Senior Credit Agreement (the Amended and Restated Credit Agreement, dated as of April 7, 2022, among Stonefield, Whitmore National Bank, N.A., as Administrative Agent, and the lenders party thereto, as amended by Amendment No. 3), regardless of whether such default has been waived by the Senior Agent or the senior lenders.
(c) Prompt written notice to Ridgeline of any material litigation (including the commencement of any action, suit, proceeding, or governmental investigation involving Stonefield or any subsidiary where the amount in controversy exceeds $5,000,000), any Material Adverse Change, or any Change of Control event.
For purposes of the Mezzanine Credit Agreement, a "Change of Control" is deemed to have occurred upon any of the following:
(i) any Person or "group" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), other than Cascade Ridge Capital Partners, LLC and its affiliates, acquires direct or indirect beneficial ownership of more than 50% of the voting equity interests of Stonefield or Cascade Ridge SLG Holdings, LLC;
(ii) Stonefield ceases to be a direct, wholly-owned subsidiary of Cascade Ridge SLG Holdings, LLC; or
(iii) 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 other than Cascade Ridge Capital Partners, LLC or its affiliates.
The occurrence of a Change of Control constitutes a mandatory prepayment event under Section 2.11 of the Mezzanine Credit Agreement, requiring Stonefield to prepay all outstanding principal under the Mezzanine Facility at a price equal to 103% of the outstanding principal balance (including capitalized PIK interest), together with all accrued and unpaid cash interest and any other amounts due and owing. In addition, a Change of Control triggers the put right under the Warrant Agreement (Tab 6), pursuant to which Ridgeline may require Stonefield (or its successor) to purchase the warrants at their fair market value (determined in accordance with the valuation procedures set forth in Section 8 of the Warrant Agreement).
3.7 Restricted Payment and Covenant Monitoring
The Mezzanine Credit Agreement and the Senior Credit Agreement (as amended) each contain a comprehensive set of restrictive covenants governing the operations of Stonefield and its subsidiaries. These include, without limitation, restrictions on:
• Restricted Payments: Dividends, distributions, equity repurchases, and other payments to equity holders are restricted to a limited "general basket" and certain enumerated exceptions.
• Debt Incurrence: Additional indebtedness is limited to specified permitted baskets and incremental facilities, subject to pro forma compliance with financial covenants.
• Asset Sales: Sales, transfers, and other dispositions of assets are restricted, with mandatory prepayment requirements in respect of net cash proceeds above certain thresholds.
• Investments: Investments in joint ventures, acquisitions, and other equity interests are subject to basket limitations and, in certain cases, pro forma compliance testing.
• Affiliate Transactions: Transactions with affiliates must be on terms no less favorable than arm's-length terms and, above certain dollar thresholds, require board approval and/or a fairness opinion.
We strongly recommend that Stonefield implement internal compliance procedures to monitor compliance with these covenants on an ongoing basis. Any contemplated transactions that may implicate covenant baskets — including, without limitation, proposed dividends or distributions, acquisitions or investments, asset sales, incurrence of additional indebtedness, or material transactions with affiliates — should be reviewed with counsel in advance to confirm compliance and to determine whether any consents or waivers may be required.
4. Capital Structure Summary (Post-Closing)
Set forth below is a summary of the capital structure of Stonefield as of the closing of the Mezzanine Facility on September 29, 2023:
Key Credit Metrics (as of September 29, 2023, based on LTM Adjusted EBITDA of $108,600,000 as of June 30, 2023):
5. Transaction Cost Recap
The following is a summary of the transaction costs paid from mezzanine proceeds at closing in accordance with the Closing Funds Flow Memorandum (Tab 16):
Net mezzanine loan proceeds to Stonefield after deduction of the foregoing transaction costs were approximately $115,437,500, which were funded to Stonefield's operating account at Whitmore National Bank, N.A. in accordance with the wire instructions set forth in the Closing Funds Flow Memorandum.
6. Key Upcoming Dates Calendar
We recommend that Stonefield calendar the following critical dates and compliance deadlines:
We note that the Senior Revolving Credit Facility and Senior Term Loan B mature in 2025 and 2026, respectively — well in advance of the Mezzanine Facility maturity in 2029. Stonefield should begin to plan for the refinancing of the Senior Facility well ahead of these maturity dates, and any refinancing will need to be structured in compliance with the Intercreditor Agreement and the Mezzanine Credit Agreement (including the requirement that any replacement senior facility be subject to an intercreditor agreement on terms no less favorable to Ridgeline than the existing Intercreditor Agreement).
7. Document Retention and Contact Information
We recommend that Stonefield retain its Closing Binder, together with fully executed originals of all key documents, in a secure location accessible to Stonefield's legal and finance teams. As noted above, a duplicate Closing Binder is being transmitted to Cascade Ridge Capital Partners, LLC, attention: Vincent A. Palumbo, at 200 Clarendon Boulevard, 38th Floor, Boston, Massachusetts 02116. Calderwood & Harkness will retain its own copies of all transaction documents in the firm's records in accordance with our standard document retention policies.
For any questions regarding post-closing obligations, ongoing covenant compliance, UCC filings, or any other matter arising under the Mezzanine Facility, the Intercreditor Agreement, or the related transaction documents, please do not hesitate to contact any of the following members of the Calderwood & Harkness engagement team:
Stephanie Okafor, Responsible Partner Telephone: (212) 506-7134
Email: sokafor@calderwoodharkness.com
Daniel Obi, Lead Associate Telephone: (212) 506-7291
Email: dobi@calderwoodharkness.com
Lisa Morrow, Working Associate Telephone: (212) 506-7318
Email: lmorrow@calderwoodharkness.com
Sylvia Hartwell, Tax Specialist Partner (for tax-related matters) Telephone: (212) 506-7205
Email: shartwell@calderwoodharkness.com
Please reference Matter No. 1012-00001 and Billing Code 231892.SLG in all correspondence with Calderwood & Harkness relating to this engagement.
8. Closing Remarks
On behalf of the entire Calderwood & Harkness engagement team, we would like to express our sincere appreciation for the opportunity to represent Stonefield Logistics Group Inc. in connection with this mezzanine financing. It was a pleasure working with you, Marcus, Janet, and the entire Stonefield team, as well as with Vincent Palumbo and the Cascade Ridge team, to bring this transaction to a successful close. We extend our congratulations to Stonefield on the successful closing of the Mezzanine Facility, which we understand will provide critical capital to support the Company's fleet expansion and facility buildout program over the coming years.
We remain available to assist Stonefield with any future financing matters, ongoing advisory needs, covenant compliance questions, or any other legal matters that may arise. Please do not hesitate to reach out at any time.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Stephanie Okafor Partner, Banking & Finance 601 Lexington Avenue New York, New York 10022
Enclosures: Closing Binders (2 sets)
cc:
Marcus W. Ellison, Chief Executive Officer, Stonefield Logistics Group Inc. Janet R. Prescott, Chief Financial Officer, Stonefield Logistics Group Inc. Vincent A. Palumbo, Managing Partner, Cascade Ridge Capital Partners, LLC Philip Hartmann, Calderwood & Harkness LLP Daniel Obi, Calderwood & Harkness LLP Lisa Morrow, Calderwood & Harkness LLP Sylvia Hartwell, Calderwood & Harkness LLP
Filing Jurisdiction | Debtor(s) | Filing Office
Delaware | Stonefield Logistics Group Inc.; Stonefield Freight Brokerage, Inc. (if applicable) | Delaware Secretary of State, Division of Corporations
Texas | Stonefield Intermodal Services, Inc.; Stonefield Fleet Management, LLC | Texas Secretary of State
Facility | Commitment / Principal | Interest Rate | Maturity | Lien Priority
Senior Secured Term Loan B | $275,000,000 | SOFR + 375 bps | November 15, 2026 | First Lien
Senior Secured Revolving Credit Facility | $50,000,000 committed ($12,000,000 drawn at closing) | SOFR + 350 bps | November 15, 2025 | First Lien (pari passu with TLB)
Mezzanine Term Loan | $120,000,000 | 1,100 bps (850 cash / 250 PIK) | September 29, 2029 | Second Lien / Subordinated
Total Funded Debt at Closing | $407,000,000
Metric | Level
Total Leverage Ratio | 3.75x
Senior Leverage Ratio | 2.64x
Mezzanine Leverage (incremental) | 1.10x
Payee | Description | Amount
Ridgeline Mezzanine Capital Fund III, LP | Commitment Fee (2.00% × $120,000,000) | $2,400,000
Zynvaro Thornton Advisory Group, LLC | Financial Advisory Fee (0.75% × $120,000,000) | $900,000
Calderwood & Harkness LLP | Legal Fees (fee cap, plus disbursements) | $675,000
Archer Blackwell & Moss LLP | Lender's Counsel Expense Reimbursement (cap, plus disbursements) | $450,000
Whitmore National Bank, N.A. | Senior Agent Amendment Fee (0.05% × $275,000,000) | $137,500
Total Estimated Transaction Costs | $4,562,500
Date | Event / Obligation
December 29, 2023 | First quarterly interest payment date under the Mezzanine Credit Agreement (cash pay interest due to Ridgeline; PIK interest capitalized to outstanding principal balance)
Within 45 days of each quarter-end | Delivery of quarterly Compliance Certificate and unaudited quarterly financial statements to Ridgeline and Whitmore (Senior Agent)
Within 90 days of fiscal year-end | Delivery of audited annual financial statements and annual Compliance Certificate to Ridgeline and Whitmore (Senior Agent)
November 15, 2025 | Maturity date of the Senior Secured Revolving Credit Facility ($50,000,000 committed)
November 15, 2026 | Maturity date of the Senior Secured Term Loan B ($275,000,000)
March 29, 2028 – September 29, 2028 | Six-month window for filing UCC-3 continuation statements to maintain perfection of Ridgeline's second-priority security interests (Delaware and Texas)
September 29, 2029 | Maturity date of the Mezzanine Facility; all outstanding principal (including capitalized PIK), accrued interest, and other amounts due and payable
September 29, 2030 | Seventh (7th) anniversary put right date under the Warrant Agreement (Section 7.02), pursuant to which Ridgeline may require Stonefield to repurchase the warrants at fair market value

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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