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RESTRUCTURING SUPPORT AGREEMENT

EXECUTION VERSION

June 30, 2023

among

STONEFIELD LOGISTICS GROUP INC., a Delaware corporation (the "Company"),

RIDGELINE CAPITAL PARTNERS FUND III, L.P., a Delaware limited partnership (the "Sponsor"),

THE CONSENTING FIRST LIEN LENDERS (as defined herein),

and

THE CONSENTING MEZZANINE HOLDERS (as defined herein)

THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY ARE THE PRODUCT OF NEGOTIATIONS AMONG THE PARTIES AND THEIR RESPECTIVE ADVISORS. THIS AGREEMENT IS NOT AND SHALL NOT BE DEEMED TO BE A SOLICITATION OF VOTES FOR THE ACCEPTANCE OR REJECTION OF ANY PLAN OF REORGANIZATION UNDER TITLE 11 OF THE UNITED STATES CODE (THE "BANKRUPTCY CODE") OR AN OFFER FOR THE PURCHASE, SALE, OR EXCHANGE OF SECURITIES OR A SOLICITATION OF A PROXY, CONSENT, OR AUTHORIZATION WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ANY SUCH SOLICITATION, OFFER, OR PROXY WILL BE MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE PROVISIONS OF SUCH LAWS AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE APPLICABLE DEFINITIVE DOCUMENTS.

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RECITALS

WHEREAS:

A. Stonefield Logistics Group Inc. (the "Company") is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with its principal executive offices located at 4200 Commerce Street, Suite 1500, Dallas, Texas 75201 (EIN: 83-2457109; Delaware File No.: 6341872). The Company is engaged in the business of freight brokerage, last-mile delivery, and warehousing services across the continental United States. The direct parent of the Company is Stonefield Logistics Holdings LLC, a Delaware limited liability company. The Company's principal operating subsidiaries include Stonefield Freight Services LLC, a Texas limited liability company, Stonefield Last Mile Inc., a Delaware corporation, and Stonefield Warehousing LLC, a Texas limited liability company (collectively with the Company and Stonefield Logistics Holdings LLC, the "Company Parties"). The Company is a portfolio company of Ridgeline Capital Partners Fund III, L.P. (the "Sponsor"), having been acquired by the Sponsor in December 2017 through a leveraged buyout transaction.

B. The Company is party to that certain Credit Agreement, dated as of December 15, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the "First Lien Credit Agreement"), among the Company, as borrower, Pinnacle National Bank, N.A., as administrative agent and collateral agent (in such capacity, the "Administrative Agent"), and the lenders from time to time party thereto. The First Lien Credit Agreement provides for (i) a first lien term loan B facility (the "First Lien Term Loan B") with an outstanding principal balance as of the date hereof of $285.0 million (original principal amount of $310.0 million, of which $25.0 million has been amortized), bearing interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 425 basis points (with a SOFR floor of 75 basis points), maturing on December 15, 2024, and (ii) a revolving credit facility (the "Revolving Credit Facility") with aggregate commitments of $50.0 million, of which $42.0 million is currently drawn, $3.5 million supports outstanding letters of credit, and $4.5 million remains available, bearing interest at a rate equal to SOFR plus 375 basis points, also maturing on December 15, 2024. Additionally, the Company is the issuer under that certain Indenture, dated as of December 15, 2017 (the "Mezzanine Indenture"), between the Company, as issuer, and Continental Fiduciary Trust Company, as trustee (in such capacity, the "Mezzanine Trustee") and second lien collateral agent, governing the Company's 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP: 861537 AA 2) (the "Mezzanine Notes"), of which $140.0 million in aggregate principal amount is outstanding, with approximately $8.1 million in accrued payment-in-kind interest (estimated through the anticipated closing). The Company's total funded indebtedness as of the date hereof is approximately $475.1 million.

C. The Company has experienced significant financial distress driven by macroeconomic headwinds in the freight and logistics sector. Revenue declined from $612.3 million in fiscal year 2022 to a projected $545.0 million for fiscal year 2023, a decline attributable to the prolonged freight recession, excess carrier capacity, and the loss of certain key customer contracts. Adjusted EBITDA has declined correspondingly, from $58.7 million in fiscal year 2022 to $41.2 million for the last twelve months ending Q1 2023, with projected fiscal year 2023 Adjusted EBITDA of $38.5 million. As a result, the Company's total leverage ratio stands at approximately 11.5x ($475.1 million total funded debt divided by $41.2 million LTM Adjusted EBITDA), and its first lien leverage ratio stands at approximately 7.9x ($327.0 million first lien debt divided by $41.2 million LTM Adjusted EBITDA). As of March 31, 2023, total liquidity was approximately $15.8 million, consisting of $11.3 million in unrestricted cash and $4.5 million of availability under the Revolving Credit Facility. The Company experienced negative cash flow of approximately $2.5 million per month during Q1 2023. The Company faces a near-term maturity wall, with $327.0 million in first lien debt maturing on December 15, 2024. Absent a restructuring of its capital structure, the Company projects that it will exhaust available liquidity by Q3 2024.

D. In light of the foregoing, the parties hereto and their respective advisors have engaged in extensive, good-faith, arm's-length negotiations regarding a potential restructuring of the Company's capital structure. An ad hoc group of mezzanine noteholders was formed informally in February 2023, and a formal cooperation agreement was executed on March 10, 2023, among Graystone Mezzanine Capital Fund II LP, Ashland Structured Credit LLC, and Dunmore Special Situations Fund LP (the "Ad Hoc Mezzanine Group"), collectively holding $122.0 million (87.1%) of the outstanding principal amount of the Mezzanine Notes. Hargrove Advisory Group LLC was retained as financial advisor to the Company's Board of Directors on March 15, 2023. Calderwood & Harkness LLP was engaged as restructuring counsel to the Company on April 3, 2023. The first substantive meeting with the first lien lender group was held on April 14, 2023, and the first substantive meeting with the Ad Hoc Mezzanine Group was held on April 28, 2023. An initial restructuring term sheet was circulated to all stakeholder groups on May 19, 2023, and a revised term sheet incorporating feedback from the lending groups was circulated on June 9, 2023. The parties have engaged in good-faith, arm's-length negotiations and desire to memorialize their agreement with respect to the Restructuring Transactions (as defined herein) on the terms set forth in this Agreement and the Restructuring Term Sheet attached hereto as Exhibit A.

E. The parties hereto desire to implement a consensual out-of-court restructuring of the Company's capital structure without the need for a filing under title 11 of the United States Code (the "Bankruptcy Code"), through (a) an amendment and extension of the First Lien Credit Agreement, (b) a new super-priority term loan facility, (c) an equitization of the Mezzanine Notes, and (d) certain equity contributions by the Sponsor (collectively, the "Restructuring Transactions"), all as more fully described herein and in the Restructuring Term Sheet.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.01 — Definitions

As used in this Agreement, the following terms shall have the meanings set forth below:

"Ad Hoc Mezzanine Group" means Graystone Mezzanine Capital Fund II LP, Ashland Structured Credit LLC, and Dunmore Special Situations Fund LP, and any Additional Mezzanine Holders that become parties to this Agreement by executing and delivering a Joinder Agreement in accordance with the terms hereof.

"Administrative Agent" means Pinnacle National Bank, N.A., in its capacity as administrative agent and collateral agent under the First Lien Credit Agreement, together with any successor in such capacity.

"Agreement" means this Restructuring Support Agreement, dated as of June 30, 2023, including all Exhibits and Schedules hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.

"Amended Certificate of Incorporation" means the amended and restated certificate of incorporation of the Company to be filed with the Secretary of State of the State of Delaware in connection with the Restructuring Transactions, providing for, among other things, the authorization of the Series A Preferred Equity.

"Amended Credit Agreement" means the amended and restated First Lien Credit Agreement to be entered into in connection with the Restructuring Transactions, incorporating the amend-and-extend terms set forth in Section 2.01(a) and Section 2.01(b) hereof and in the Restructuring Term Sheet.

"Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended.

"Belvedere" means Belvedere Credit Opportunities Fund LP, a Delaware limited partnership, in its capacity as lead arranger and initial lender under the Super-Priority Credit Agreement.

"Board" means the board of directors of the Company.

"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in New York, New York are authorized or required by law or executive order to close.

"Certificate of Designations" means the certificate of designations with respect to the Series A Preferred Equity to be filed with the Secretary of State of the State of Delaware.

"Change of Control" means the acquisition by any person or group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended), other than Ridgeline Capital Partners Fund III, L.P. and the mezzanine equitization recipients and their respective permitted transferees (as defined in the Stockholders' Agreement), of more than 50% of the outstanding voting equity of the Company.

"Closing" means the consummation of all Restructuring Transactions as contemplated by this Agreement, the Restructuring Term Sheet, and the Definitive Documents.

"Closing Date" means the date on which the Closing occurs, which shall be on or before the Outside Date.

"Company" means Stonefield Logistics Group Inc., a Delaware corporation.

"Company Parties" means the Company and each of its direct and indirect subsidiaries, including Stonefield Logistics Holdings LLC, Stonefield Freight Services LLC, Stonefield Last Mile Inc., and Stonefield Warehousing LLC.

"Consenting First Lien Lenders" means those first lien term loan lenders and revolving credit facility lenders that are signatories to this Agreement or that become party hereto by executing and delivering a Joinder Agreement in accordance with the terms hereof, as identified on Schedule 1 hereto.

"Consenting Mezzanine Holders" means those holders of Mezzanine Notes that are signatories to this Agreement or that become party hereto by executing and delivering a Joinder Agreement in accordance with the terms hereof, as identified on Schedule 2 hereto.

"Consenting Stakeholders" means, collectively, the Consenting First Lien Lenders, the Consenting Mezzanine Holders, and the Sponsor.

"Consent Solicitation" means the consent solicitation to be conducted by the Company with respect to the exchange of the Mezzanine Notes, as described in the Restructuring Term Sheet.

"D&O Tail Policy" means the directors' and officers' liability insurance tail policy issued by Northgate Specialty Insurance Company (Policy No. NSI-DOL-2023-07721), providing $15 million in aggregate coverage for a six (6)-year tail period commencing on the Closing Date.

"Definitive Documents" means, collectively, (a) the Amended Credit Agreement, (b) the Super-Priority Credit Agreement, (c) the Super-Priority Guaranty Agreement, (d) the Super-Priority Pledge and Security Agreement, (e) the Intercreditor Agreement, (f) the Exchange Agreement, (g) the Supplemental Indenture, (h) the Amended Certificate of Incorporation, (i) the Certificate of Designations, (j) the Stockholders' Agreement, (k) the Registration Rights Agreement, and (l) all other agreements, documents, instruments, certificates, and other deliverables contemplated by or required to implement the Restructuring Transactions, in each case as set forth in Section 2.02.

"Equitization" means the exchange of the Mezzanine Notes (including accrued PIK interest thereon) for Series A Preferred Equity and common equity of the Company, as described in the Restructuring Term Sheet.

"Exchange Agreement" means the exchange agreement to be entered into among the Company and the exchanging holders of Mezzanine Notes in connection with the Equitization.

"First Lien Claims" means all claims arising under or in connection with the First Lien Credit Agreement, including claims arising under the First Lien Term Loan B and the Revolving Credit Facility.

"First Lien Credit Agreement" has the meaning set forth in Recital B.

"Intercreditor Agreement" means the amended and restated intercreditor agreement to be entered into among Belvedere Credit Opportunities Fund LP (as agent under the Super-Priority Credit Agreement), Pinnacle National Bank, N.A. (as agent under the Amended Credit Agreement), and the Company, establishing a super-priority first-out / first lien second-out payment waterfall, lien subordination, standstill periods, purchase options, and provisions governing debtor-in-possession financing in any subsequent insolvency proceeding.

"Joinder Agreement" means a joinder agreement in the form attached hereto as Exhibit B.

"Joinder Period" means the period commencing on July 3, 2023 and ending at 5:00 p.m. (New York City time) on July 21, 2023.

"Management Incentive Plan" or "MIP" means the equity incentive plan to be adopted by the Board following the Closing, providing for equity awards representing up to 5.0% of the pro forma common equity of the Company, on terms and conditions to be determined by the Board in consultation with the Sponsor and the mezzanine equitization recipients.

"Mezzanine Indenture" has the meaning set forth in Recital B.

"Mezzanine Notes" means the 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP: 861537 AA 2) issued under the Mezzanine Indenture.

"Mezzanine Trustee" means Continental Fiduciary Trust Company, in its capacity as trustee under the Mezzanine Indenture.

"Milestone" means each of the milestones set forth in Section 4.01.

"New Money Facility" means the super-priority term loan facility in an aggregate principal amount of $55.0 million, consisting of a $45.0 million funded term loan and a $10.0 million delayed-draw term loan commitment, as described in Section 2.01(c) and the Restructuring Term Sheet.

"Outside Date" means December 31, 2023, as such date may be extended in accordance with Section 4.02.

"Parties" means, collectively, the Company Parties, the Sponsor, the Consenting First Lien Lenders, and the Consenting Mezzanine Holders, and "Party" means any one of them individually.

"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, governmental entity, or other entity.

"Registration Rights Agreement" means the registration rights agreement to be entered into among the Company, the Sponsor, and the mezzanine equitization recipients in connection with the Closing.

"Required Consenting First Lien Lenders" means Consenting First Lien Lenders holding more than 50% of the aggregate outstanding principal amount of the First Lien Term Loan B held by all Consenting First Lien Lenders.

"Required Consenting Mezzanine Holders" means Consenting Mezzanine Holders holding more than 66⅔% of the aggregate outstanding principal amount of the Mezzanine Notes held by all Consenting Mezzanine Holders.

"Restructuring Term Sheet" means the restructuring term sheet attached hereto as Exhibit A, incorporating the terms as revised on June 9, 2023, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms of this Agreement.

"Restructuring Transactions" means the transactions described in the Restructuring Term Sheet and this Agreement, including (a) the amendment and extension of the First Lien Credit Agreement, (b) the New Money Facility, (c) the Equitization, and (d) the Sponsor Equity Contribution.

"Series A Preferred Equity" means the series of preferred stock of the Company to be issued to the exchanging Mezzanine Holders in connection with the Equitization, having an aggregate liquidation preference of $35.0 million and a 10.00% PIK dividend rate, with terms to be set forth in the Certificate of Designations.

"Sponsor" means Ridgeline Capital Partners Fund III, L.P., a Delaware limited partnership, acting through its general partner, Ridgeline Capital Management III LLC, a Delaware limited liability company.

"Sponsor Equity Contribution" means the contribution by the Sponsor of $12.5 million in new cash equity to the Company on or prior to the Closing Date.

"Stockholders' Agreement" means the amended and restated stockholders' agreement to be entered into among the Company, the Sponsor, and the mezzanine equitization recipients, providing for, among other things, the post-restructuring board composition described in Section 2.01(g).

"Super-Priority Agent" means Belvedere Credit Opportunities Fund LP, in its capacity as administrative agent and collateral agent under the Super-Priority Credit Agreement.

"Super-Priority Credit Agreement" means the credit agreement governing the New Money Facility, to be entered into among the Company, as borrower, Belvedere Credit Opportunities Fund LP, as lead arranger, administrative agent, and initial lender, and the other lenders from time to time party thereto.

"Super-Priority Guaranty Agreement" means the guaranty agreement to be entered into by each subsidiary guarantor in favor of the Super-Priority Agent, guaranteeing the obligations under the Super-Priority Credit Agreement.

"Super-Priority Pledge and Security Agreement" means the pledge and security agreement to be entered into by the Company and each subsidiary guarantor in favor of the Super-Priority Agent, granting a super-priority first-out lien on substantially all assets.

"Supplemental Indenture" means the supplemental indenture to the Mezzanine Indenture, effectuating exit consent amendments to strip substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by non-exchanging holders.

"Transfer" means any sale, assignment, transfer, participation, pledge, hypothecation, encumbrance, grant of a security interest, or other disposition of any claim, interest, right, or obligation, whether directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise.

Section 1.02 — Interpretation

Unless the context otherwise requires, in this Agreement:

(a) headings and captions are included for convenience of reference only and shall not affect the meaning or interpretation of any provision hereof;

(b) references to "Sections," "Articles," "Exhibits," and "Schedules" refer to the Sections, Articles, Exhibits, and Schedules of this Agreement unless otherwise specified;

(d) the use of the singular includes the plural and vice versa;

(e) the word "or" is not exclusive;

(f) references to any agreement, document, or instrument shall mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time, unless otherwise expressly provided;

(g) references to any statute, rule, or regulation include all amendments, modifications, codifications, replacements, and successor statutes, rules, and regulations;

(h) all dollar amounts referenced herein are in United States dollars unless otherwise indicated; and

(i) the words "hereof," "herein," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.

ARTICLE II — RESTRUCTURING TRANSACTIONS

Section 2.01 — Summary of Restructuring Transactions

The Parties agree to support, and to use commercially reasonable efforts to consummate, the Restructuring Transactions as described in the Restructuring Term Sheet (Exhibit A) and this Agreement, including the following:

(a) Amend and Extend — First Lien Term Loan B. The First Lien Term Loan B shall be amended and restated on the following terms:

(i) The outstanding principal balance of $285.0 million shall remain unchanged.

(ii) The maturity date shall be extended from December 15, 2024 to December 19, 2028 (an extension of approximately four (4) years).

(iii) The applicable interest rate shall be increased from SOFR plus 425 basis points to SOFR plus 500 basis points.

(iv) The SOFR floor shall be increased from 75 basis points to 100 basis points.

(v) Annual amortization of 1.00% of the outstanding principal amount shall be maintained.

(vi) The following financial covenants shall be added to the Amended Credit Agreement: (A) a Total Net Leverage covenant requiring Total Net Leverage not to exceed 6.50x as of the last day of each fiscal quarter ending on or after December 31, 2025, stepping down to 6.25x for fiscal quarters ending on or after December 31, 2026, and stepping down further to 5.75x for fiscal quarters ending on or after December 31, 2027; and (B) a Minimum Liquidity covenant requiring the Company to maintain Minimum Liquidity (defined as unrestricted cash plus available revolving credit commitments) of not less than $20.0 million at all times, tested monthly.

(vii) Each Consenting First Lien Lender holding First Lien Term Loan B claims that consents to the amendment and extension shall receive an amendment consent fee in an amount equal to 50 basis points of the outstanding principal amount of the First Lien Term Loan B held by such lender (the aggregate consent fee being equal to $285.0 million × 0.50% = $1,425,000), payable in cash on the Closing Date.

(b) Amend and Extend — Revolving Credit Facility. The Revolving Credit Facility shall be amended and restated on the following terms:

(i) The aggregate revolving credit commitments shall be reduced from $50.0 million to $35.0 million.

(ii) The maturity date shall be extended to December 19, 2027; provided, however, that the maturity of the Revolving Credit Facility shall be subject to a springing maturity date that is 91 days prior to the maturity of the First Lien Term Loan B if the First Lien Term Loan B has not been refinanced or extended in full by such date.

(iii) The applicable interest rate shall be increased from SOFR plus 375 basis points to SOFR plus 450 basis points.

(iv) Each Consenting First Lien Lender holding Revolving Credit Facility commitments that consents to the amendment and extension shall receive an amendment consent fee in an amount equal to 25 basis points of the Revolving Credit Facility commitment of such lender (the aggregate consent fee being equal to $35.0 million × 0.25% = $87,500), payable in cash on the Closing Date.

(c) New Money — Super-Priority Term Loan. A new super-priority term loan facility shall be established on the following terms:

(i) The aggregate principal amount shall be $55.0 million, consisting of (A) a $45.0 million funded term loan to be drawn in full on the Closing Date, and (B) a $10.0 million delayed-draw term loan commitment available during the twelve (12)-month period following the Closing Date, subject to customary conditions.

(ii) Belvedere Credit Opportunities Fund LP shall serve as lead arranger, administrative agent, and initial lender.

(iii) The applicable interest rate shall be SOFR plus 700 basis points, with a SOFR floor of 100 basis points.

(iv) The facility shall be issued with original issue discount of 2.00% ($55.0 million × 2.00% = $1,100,000 OID), resulting in net funded proceeds at closing of $43.9 million.

(v) The maturity date shall be December 19, 2027 (approximately four (4) years from the anticipated Closing Date).

(vi) Mandatory prepayment shall be required from 75% of annual Excess Cash Flow (to be defined in the Super-Priority Credit Agreement) to the extent total liquidity exceeds $20.0 million.

(vii) Voluntary prepayments shall be subject to call protection as follows: 103% of par if prepaid during the first year, 102% of par if prepaid during the second year, 101% of par if prepaid during the third year, and par thereafter.

(viii) A commitment fee of 1.00% per annum shall be payable on the undrawn portion of the delayed-draw term loan commitment ($10.0 million).

(ix) The New Money Facility shall be secured by a super-priority first-out lien on substantially all assets of the Company Parties, including accounts receivable, inventory, equipment, real property, intellectual property, and equity interests of subsidiaries, as set forth in the Super-Priority Pledge and Security Agreement.

(d) Equitization of Mezzanine Notes. The Mezzanine Notes shall be equitized on the following terms:

(i) The full $140.0 million in outstanding principal amount of the Mezzanine Notes, together with the approximately $8.1 million in accrued payment-in-kind interest (estimated through the anticipated Closing Date), shall be exchanged pursuant to the Exchange Agreement.

(ii) Exchanging Mezzanine Holders shall receive, in exchange for their Mezzanine Notes and accrued PIK interest thereon: (A) their pro rata share of the Series A Preferred Equity, with an aggregate liquidation preference of $35.0 million and a 10.00% PIK dividend rate, senior to common stock in right of payment and liquidation; and (B) their pro rata share of 47.5% of the pro forma common equity of the Company.

(iii) The approximately $8.1 million in accrued PIK interest shall be waived by exchanging holders as part of the settlement consideration embodied in the Equitization.

(iv) Based on the analysis performed by Hargrove Advisory Group LLC, the Company's financial advisor, the implied recovery to Mezzanine Holders on account of the Equitization is estimated at approximately 40 to 55 cents on the dollar, depending on equity valuation assumptions and projected performance of the Company following the Restructuring Transactions.

(v) The Equitization shall be consummated through a consent solicitation and exchange offer conducted by the Company. In connection therewith, exchanging Mezzanine Holders shall deliver exit consents to authorize the execution of the Supplemental Indenture, which shall amend the Mezzanine Indenture to strip substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by any non-exchanging holders.

(vi) The required consent threshold for the Consent Solicitation and the Supplemental Indenture shall be the affirmative consent of holders of more than 66⅔% in aggregate principal amount of the outstanding Mezzanine Notes.

(e) Sponsor Equity Contribution. Ridgeline Capital Partners Fund III, L.P. shall contribute $12.5 million in new cash equity to the Company on or prior to the Closing Date. The proceeds of the Sponsor Equity Contribution shall be used to fund transaction costs incurred in connection with the Restructuring Transactions and to provide an additional liquidity cushion for the Company's post-restructuring operations. As a result of the Equitization and the issuance of new equity to the exchanging Mezzanine Holders, the Sponsor's common equity ownership in the Company shall be diluted from 100% to 47.5% of pro forma common equity.

(f) Pro Forma Equity Ownership. Upon consummation of the Restructuring Transactions, the pro forma common equity ownership of the Company shall be allocated as follows:

(i) Ridgeline Capital Partners Fund III, L.P. (the Sponsor): 47.5% of pro forma common equity.

(ii) Mezzanine Holders (Equitization recipients): 47.5% of pro forma common equity.

(iii) Management (pursuant to the Management Incentive Plan): 5.0% of pro forma common equity.

The foregoing percentages are on a fully diluted basis and give effect to the MIP allocation but not to any future issuances of equity. The Series A Preferred Equity shall be senior to, and shall not participate in, the foregoing common equity allocation.

(g) Board Composition. The post-restructuring Board of Directors shall consist of seven (7) directors, constituted as follows:

(i) Three (3) directors designated by the Sponsor.

(ii) Three (3) directors designated by the holders of a majority of the equity received by Mezzanine Holders in the Equitization.

(iii) One (1) independent director selected by mutual agreement of the Sponsor and the mezzanine equitization recipients.

The foregoing board composition shall be documented in the Stockholders' Agreement. The initial independent director shall be identified prior to the Closing Date and shall be reasonably acceptable to both the Sponsor and the Required Consenting Mezzanine Holders.

(h) Change of Control. A "Change of Control" shall be defined in each of the Amended Credit Agreement and the Super-Priority Credit Agreement to mean the acquisition by any person or group (other than Ridgeline Capital Partners Fund III, L.P. and the mezzanine equitization recipients and their respective permitted transferees) of more than 50% of the outstanding voting equity of the Company. The occurrence of a Change of Control shall trigger mandatory prepayment of all outstanding obligations under the Amended Credit Agreement at 101% of the principal amount thereof, together with accrued and unpaid interest.

(i) Post-Restructuring Capital Structure. The Company's post-restructuring capital structure shall be as follows:

Based on the Company's projected fiscal year 2024 Adjusted EBITDA of $52.0 million, total post-restructuring leverage is projected to be approximately 7.2x ($375.0 million ÷ $52.0 million). The Restructuring Transactions are expected to reduce total funded indebtedness by approximately $100.1 million ($475.1 million pre-restructuring funded debt less $375.0 million post-restructuring funded debt) through the Equitization of the Mezzanine Notes.

Section 2.02 — Definitive Documents

All Definitive Documents shall contain terms and conditions consistent in all material respects with this Agreement and the Restructuring Term Sheet, and shall otherwise be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor; provided, however, that:

(a) the Amended Credit Agreement shall be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, and the Administrative Agent;

(b) the Super-Priority Credit Agreement, the Super-Priority Guaranty Agreement, the Super-Priority Pledge and Security Agreement, and the Intercreditor Agreement shall be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and Belvedere;

(c) the Exchange Agreement, the Supplemental Indenture, and the Certificate of Designations shall be in form and substance reasonably acceptable to the Company and the Required Consenting Mezzanine Holders;

(d) the Stockholders' Agreement and the Registration Rights Agreement shall be in form and substance reasonably acceptable to the Company, the Sponsor, and the Required Consenting Mezzanine Holders; and

(e) the Amended Certificate of Incorporation and any MIP documentation shall be in form and substance reasonably acceptable to the Company, the Sponsor, and the Required Consenting Mezzanine Holders.

The Parties acknowledge and agree that no Definitive Document has been executed as of the date hereof, and that all Definitive Documents remain subject to negotiation, drafting, and execution in accordance with the Milestones set forth in Article IV.

Section 2.03 — Intercreditor Arrangements

In connection with the Closing, the Company, Belvedere Credit Opportunities Fund LP (as Super-Priority Agent), and Pinnacle National Bank, N.A. (as agent under the Amended Credit Agreement) shall enter into the Intercreditor Agreement. The Intercreditor Agreement shall establish, among other things: (a) a first-out / second-out payment waterfall pursuant to which all collections and proceeds of collateral shall be applied first to the obligations under the Super-Priority Credit Agreement and thereafter to the obligations under the Amended Credit Agreement; (b) lien subordination provisions establishing the priority of the super-priority first-out liens over the first lien second-out liens; (c) standstill periods restricting the exercise of remedies by the first lien agent during an initial period following the occurrence of an event of default; (d) purchase options permitting the first lien lenders to purchase the super-priority obligations at par; and (e) provisions governing debtor-in-possession financing in any subsequent insolvency proceeding of the Company or any subsidiary guarantor. The Intercreditor Agreement shall be in form and substance reasonably acceptable to each of the foregoing parties and to the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders.

Section 2.04 — D&O Tail Insurance

On or prior to the Closing Date, the Company shall obtain and thereafter maintain the D&O Tail Policy from Northgate Specialty Insurance Company (Policy No. NSI-DOL-2023-07721), providing $15 million in aggregate coverage for acts and omissions of directors and officers of the Company Parties occurring prior to the Closing Date, with a tail period of six (6) years from the Closing Date. The premium for the D&O Tail Policy (estimated at $475,000) shall be paid by the Company on or before the Closing Date from the proceeds of the Sponsor Equity Contribution or other available funds.

ARTICLE III — AGREEMENTS OF THE PARTIES

Section 3.01 — Agreements of the Company Parties

Subject to the terms and conditions of this Agreement, each of the Company Parties shall:

(a) support and take all commercially reasonable actions necessary or desirable to consummate the Restructuring Transactions on the terms and conditions set forth in this Agreement and in the Restructuring Term Sheet, in a timely manner;

(b) negotiate in good faith and use commercially reasonable efforts to execute and deliver, or cause to be executed and delivered, each of the Definitive Documents in accordance with the Milestones set forth in Article IV;

(c) use commercially reasonable efforts to obtain any and all governmental, regulatory, or third-party approvals, consents, or waivers necessary for the consummation of the Restructuring Transactions;

(d) provide timely, complete, and accurate financial information and other data to all Consenting Stakeholders and their respective advisors, including (i) monthly unaudited financial statements (including a balance sheet, income statement, and cash flow statement) within thirty (30) days of each month-end, (ii) quarterly financial statements within forty-five (45) days of each quarter-end, (iii) a rolling thirteen-week cash flow forecast updated bi-weekly, and (iv) such other information as may reasonably be requested by any Consenting Stakeholder or its advisors, in each case subject to the execution of customary confidentiality or non-disclosure agreements;

(e) not take any action that is materially inconsistent with, or that would reasonably be expected to materially delay or impede, the consummation of the Restructuring Transactions;

(f) promptly notify (and in any event within two (2) Business Days) the Consenting Stakeholders and their respective counsel of any event, condition, or development of which the Company becomes aware that would or would reasonably be expected to (i) prevent, materially delay, or materially impede the Closing, (ii) result in a material breach of any representation, warranty, or covenant contained in this Agreement, or (iii) constitute or result in a material adverse change in the business, operations, assets, liabilities, or financial condition of the Company Parties taken as a whole;

(g) pay, or cause to be paid, the reasonable and documented fees and expenses of (i) Westlake Harden & Cole LLP, as counsel to the Consenting First Lien Lenders, (ii) Thornbury McCaffrey LLP, as counsel to the Ad Hoc Mezzanine Group and Belvedere, (iii) Meridian Veltrian Partners LLC, as financial advisor to the Ad Hoc Mezzanine Group, and (iv) Hargrove Advisory Group LLC, as financial advisor to the Company, in each case in accordance with their respective engagement letters, promptly upon receipt of invoices therefor (and in any event within ten (10) Business Days of receipt), without requirement of prior court approval;

(h) not, directly or indirectly, solicit, initiate, encourage, or support any alternative restructuring proposal, plan, or transaction that is inconsistent with the Restructuring Transactions, including any chapter 11 plan, sale transaction, or alternative capital raise, other than as expressly permitted by the Fiduciary Out set forth in Section 3.05;

(i) operate the business of the Company Parties in the ordinary course consistent with past practice in all material respects, and preserve the value of the Company's assets, business relationships, and workforce;

(j) not, without the prior written consent of the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders, (i) incur, assume, or guarantee any additional indebtedness for borrowed money (other than trade payables arising in the ordinary course of business and borrowings under the Revolving Credit Facility in the ordinary course), (ii) consummate or agree to consummate any acquisition, investment, or joint venture in excess of $500,000 individually or $1,000,000 in the aggregate, (iii) dispose of, transfer, or encumber any material assets outside the ordinary course of business, (iv) declare or pay any dividends or distributions, (v) make any capital expenditures in excess of $2,000,000 in any fiscal quarter above amounts budgeted in the Company's approved operating plan, or (vi) enter into, amend, modify, or terminate any material contract (as defined in the First Lien Credit Agreement); and

(k) maintain in full force and effect all insurance policies, including the D&O policy and general liability, property, and casualty insurance, in amounts and with coverages no less favorable than those in effect as of the date hereof.

Section 3.02 — Agreements of the Consenting First Lien Lenders

Subject to the terms and conditions of this Agreement, each Consenting First Lien Lender shall:

(a) timely vote in favor of, and deliver all required consents to, the amendment and restatement of the First Lien Credit Agreement in accordance with the terms set forth in Section 2.01(a) and Section 2.01(b) and the Restructuring Term Sheet;

(b) not, directly or indirectly, instruct, direct, or encourage the Administrative Agent to take any action to accelerate, demand payment of, enforce, or exercise remedies with respect to the obligations arising under the First Lien Credit Agreement, or to commence or join in any involuntary bankruptcy proceeding against any Company Party, in each case in a manner that would be inconsistent with the Restructuring Transactions (subject to the termination provisions set forth in Article VII);

(d) support and not object to the Super-Priority Credit Agreement, the Intercreditor Agreement, and the transactions contemplated thereby, including the granting of the super-priority first-out liens; and

(e) negotiate in good faith the terms of the Definitive Documents to which any Consenting First Lien Lender is a party or in respect of which its consent is required.

Section 3.03 — Agreements of the Consenting Mezzanine Holders

Subject to the terms and conditions of this Agreement, each Consenting Mezzanine Holder shall:

(a) timely deliver consents in the Consent Solicitation in favor of the Equitization, including the exchange of its Mezzanine Notes for Series A Preferred Equity and common equity on the terms set forth herein and in the Restructuring Term Sheet;

(b) timely deliver exit consents to authorize the execution and delivery of the Supplemental Indenture to effectuate exit consent amendments to the Mezzanine Indenture, stripping substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by non-exchanging holders;

(d) not Transfer any Mezzanine Notes except in accordance with Article V;

(e) not, directly or indirectly, instruct, direct, or encourage the Mezzanine Trustee to take any action to accelerate, demand payment of, enforce, or exercise any remedies under the Mezzanine Indenture, or to commence or join in any involuntary bankruptcy proceeding against any Company Party, in each case in a manner that would be inconsistent with the Restructuring Transactions (subject to the termination provisions set forth in Article VII); and

(f) support the Restructuring Transactions and not object to, challenge, or otherwise take any action that is materially inconsistent with this Agreement or the Restructuring Term Sheet.

Section 3.04 — Agreements of the Sponsor

Subject to the terms and conditions of this Agreement, the Sponsor shall:

(a) fund the Sponsor Equity Contribution of $12.5 million in cash on or prior to the Closing Date by wire transfer of immediately available funds to an account designated by the Company;

(b) accept the dilution of its equity ownership in the Company from 100% to 47.5% of pro forma common equity as a result of the Equitization;

(c) execute and deliver, or cause to be executed and delivered, the Amended and Restated Stockholders' Agreement, including provisions for the board composition described in Section 2.01(g) (three (3) Ridgeline-designated directors, three (3) mezzanine holder-designated directors, and one (1) independent director);

(d) cause its current designees on the Board (including Julian Voight and Serena Chu) to vote in favor of, and take all corporate actions necessary to approve, the Restructuring Transactions and the execution and delivery of the Definitive Documents; and

(e) not Transfer, or agree to Transfer, any direct or indirect equity interests in the Company or any Company Party except in accordance with Article V.

Section 3.05 — Fiduciary Out

Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require the Board of Directors of the Company (including Julian Voight and Serena Chu, as Ridgeline designees, and any other directors then serving) to take or refrain from taking any action that would be inconsistent with applicable law or the exercise of its fiduciary duties under the General Corporation Law of the State of Delaware, as determined by the Board in good faith after consultation with counsel (including Calderwood & Harkness LLP). If, after such consultation, the Board determines in good faith that continued performance by the Company under this Agreement would be inconsistent with the exercise of its fiduciary duties (including in connection with the receipt or consideration of any alternative transaction or proposal), the Company shall provide written notice to each of the Consenting Stakeholders and their respective counsel within three (3) Business Days of such determination (a "Fiduciary Out Notice"). Upon receipt of a Fiduciary Out Notice, each of the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor shall have the right to terminate this Agreement in accordance with Section 7.03(d), Section 7.04, and Section 7.05, as applicable. The delivery of a Fiduciary Out Notice shall not, by itself, constitute a breach of any obligation of the Company under this Agreement.

ARTICLE IV — MILESTONES

Section 4.01 — Milestones

The Parties shall use commercially reasonable efforts to satisfy the following Milestones by the dates set forth below, in each case unless extended in accordance with Section 4.02:

Section 4.02 — Extensions

Any individual Milestone may be extended upon the written agreement of the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor. The Outside Date may be extended by up to thirty (30) calendar days (to no later than January 30, 2024) upon the written agreement of the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor. No further extension of the Outside Date shall be permitted except by amendment to this Agreement in accordance with Section 8.02.

ARTICLE V — TRANSFER PROVISIONS

Section 5.01 — Restrictions on Transfers — First Lien Claims

No Consenting First Lien Lender shall Transfer all or any portion of its First Lien Claims unless the proposed transferee (a) is already a Consenting First Lien Lender party to this Agreement, or (b) prior to or contemporaneously with such Transfer, executes and delivers to counsel for the Company and counsel for the Consenting First Lien Lenders a Joinder Agreement in the form attached hereto as Exhibit B, pursuant to which such transferee agrees to be bound by all of the terms, conditions, and obligations of this Agreement applicable to a Consenting First Lien Lender. Any purported Transfer of First Lien Claims in violation of this Section 5.01 shall be void ab initio and of no force or effect, and the Company and the Administrative Agent shall have no obligation to recognize or give effect to any such purported Transfer.

Section 5.02 — Restrictions on Transfers — Mezzanine Claims

No Consenting Mezzanine Holder shall Transfer all or any portion of its Mezzanine Notes unless the proposed transferee (a) is already a Consenting Mezzanine Holder party to this Agreement, or (b) prior to or contemporaneously with such Transfer, executes and delivers to counsel for the Company and counsel for the Consenting Mezzanine Holders a Joinder Agreement in the form attached hereto as Exhibit B, pursuant to which such transferee agrees to be bound by all of the terms, conditions, and obligations of this Agreement applicable to a Consenting Mezzanine Holder. Any purported Transfer of Mezzanine Notes in violation of this Section 5.02 shall be void ab initio and of no force or effect, and the Company and the Mezzanine Trustee shall have no obligation to recognize or give effect to any such purported Transfer.

Section 5.03 — Restrictions on Transfers — Sponsor Equity

The Sponsor shall not Transfer any direct or indirect equity interests in the Company or Stonefield Logistics Holdings LLC prior to the Closing Date without the prior written consent of the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders. Any purported Transfer in violation of this Section 5.03 shall be void ab initio.

Section 5.04 — Qualified Market Makers

Notwithstanding anything to the contrary in this Article V, the restrictions set forth in Section 5.01 and Section 5.02 shall not apply to a Transfer by a Consenting First Lien Lender or a Consenting Mezzanine Holder to a qualified market maker (defined as any entity that (x) holds itself out to the public or the applicable private markets as standing ready in the ordinary course of its business to purchase and sell claims or securities for its own account on a regular basis and (y) is in fact regularly engaged in such business); provided, however, that such qualified market maker shall either (i) execute and deliver a Joinder Agreement within five (5) Business Days of such Transfer, or (ii) Transfer such claims or securities within five (5) Business Days to a transferee that is a Consenting Stakeholder or that contemporaneously executes and delivers a Joinder Agreement. If a qualified market maker fails to satisfy either clause (i) or clause (ii) within the applicable five (5) Business Day period, the Transfer to such qualified market maker shall be deemed void ab initio.

ARTICLE VI — REPRESENTATIONS AND WARRANTIES

Section 6.01 — Mutual Representations

Each Party hereby represents and warrants to each other Party, as of the date hereof (and as of the Closing Date), as follows:

(a) Organization. Such Party is duly organized, validly existing, and in good standing (to the extent such concept is recognized) under the laws of its jurisdiction of organization, and has all requisite organizational power and authority to own, lease, and operate its properties and to carry on its business as currently conducted.

RESTRUCTURING SUPPORT AGREEMENT
EXECUTION VERSION
June 30, 2023
among
STONEFIELD LOGISTICS GROUP INC., a Delaware corporation (the "Company"),
RIDGELINE CAPITAL PARTNERS FUND III, L.P., a Delaware limited partnership (the "Sponsor"),
THE CONSENTING FIRST LIEN LENDERS (as defined herein),
and
THE CONSENTING MEZZANINE HOLDERS (as defined herein)
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY ARE THE PRODUCT OF NEGOTIATIONS AMONG THE PARTIES AND THEIR RESPECTIVE ADVISORS. THIS AGREEMENT IS NOT AND SHALL NOT BE DEEMED TO BE A SOLICITATION OF VOTES FOR THE ACCEPTANCE OR REJECTION OF ANY PLAN OF REORGANIZATION UNDER TITLE 11 OF THE UNITED STATES CODE (THE "BANKRUPTCY CODE") OR AN OFFER FOR THE PURCHASE, SALE, OR EXCHANGE OF SECURITIES OR A SOLICITATION OF A PROXY, CONSENT, OR AUTHORIZATION WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ANY SUCH SOLICITATION, OFFER, OR PROXY WILL BE MADE ONLY IN COMPLIANCE WITH ALL APPLICABLE PROVISIONS OF SUCH LAWS AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE APPLICABLE DEFINITIVE DOCUMENTS.
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RECITALS
WHEREAS:
A. Stonefield Logistics Group Inc. (the "Company") is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with its principal executive offices located at 4200 Commerce Street, Suite 1500, Dallas, Texas 75201 (EIN: 83-2457109; Delaware File No.: 6341872). The Company is engaged in the business of freight brokerage, last-mile delivery, and warehousing services across the continental United States. The direct parent of the Company is Stonefield Logistics Holdings LLC, a Delaware limited liability company. The Company's principal operating subsidiaries include Stonefield Freight Services LLC, a Texas limited liability company, Stonefield Last Mile Inc., a Delaware corporation, and Stonefield Warehousing LLC, a Texas limited liability company (collectively with the Company and Stonefield Logistics Holdings LLC, the "Company Parties"). The Company is a portfolio company of Ridgeline Capital Partners Fund III, L.P. (the "Sponsor"), having been acquired by the Sponsor in December 2017 through a leveraged buyout transaction.
B. The Company is party to that certain Credit Agreement, dated as of December 15, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the "First Lien Credit Agreement"), among the Company, as borrower, Pinnacle National Bank, N.A., as administrative agent and collateral agent (in such capacity, the "Administrative Agent"), and the lenders from time to time party thereto. The First Lien Credit Agreement provides for (i) a first lien term loan B facility (the "First Lien Term Loan B") with an outstanding principal balance as of the date hereof of $285.0 million (original principal amount of $310.0 million, of which $25.0 million has been amortized), bearing interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 425 basis points (with a SOFR floor of 75 basis points), maturing on December 15, 2024, and (ii) a revolving credit facility (the "Revolving Credit Facility") with aggregate commitments of $50.0 million, of which $42.0 million is currently drawn, $3.5 million supports outstanding letters of credit, and $4.5 million remains available, bearing interest at a rate equal to SOFR plus 375 basis points, also maturing on December 15, 2024. Additionally, the Company is the issuer under that certain Indenture, dated as of December 15, 2017 (the "Mezzanine Indenture"), between the Company, as issuer, and Continental Fiduciary Trust Company, as trustee (in such capacity, the "Mezzanine Trustee") and second lien collateral agent, governing the Company's 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP: 861537 AA 2) (the "Mezzanine Notes"), of which $140.0 million in aggregate principal amount is outstanding, with approximately $8.1 million in accrued payment-in-kind interest (estimated through the anticipated closing). The Company's total funded indebtedness as of the date hereof is approximately $475.1 million.
C. The Company has experienced significant financial distress driven by macroeconomic headwinds in the freight and logistics sector. Revenue declined from $612.3 million in fiscal year 2022 to a projected $545.0 million for fiscal year 2023, a decline attributable to the prolonged freight recession, excess carrier capacity, and the loss of certain key customer contracts. Adjusted EBITDA has declined correspondingly, from $58.7 million in fiscal year 2022 to $41.2 million for the last twelve months ending Q1 2023, with projected fiscal year 2023 Adjusted EBITDA of $38.5 million. As a result, the Company's total leverage ratio stands at approximately 11.5x ($475.1 million total funded debt divided by $41.2 million LTM Adjusted EBITDA), and its first lien leverage ratio stands at approximately 7.9x ($327.0 million first lien debt divided by $41.2 million LTM Adjusted EBITDA). As of March 31, 2023, total liquidity was approximately $15.8 million, consisting of $11.3 million in unrestricted cash and $4.5 million of availability under the Revolving Credit Facility. The Company experienced negative cash flow of approximately $2.5 million per month during Q1 2023. The Company faces a near-term maturity wall, with $327.0 million in first lien debt maturing on December 15, 2024. Absent a restructuring of its capital structure, the Company projects that it will exhaust available liquidity by Q3 2024.
D. In light of the foregoing, the parties hereto and their respective advisors have engaged in extensive, good-faith, arm's-length negotiations regarding a potential restructuring of the Company's capital structure. An ad hoc group of mezzanine noteholders was formed informally in February 2023, and a formal cooperation agreement was executed on March 10, 2023, among Graystone Mezzanine Capital Fund II LP, Ashland Structured Credit LLC, and Dunmore Special Situations Fund LP (the "Ad Hoc Mezzanine Group"), collectively holding $122.0 million (87.1%) of the outstanding principal amount of the Mezzanine Notes. Hargrove Advisory Group LLC was retained as financial advisor to the Company's Board of Directors on March 15, 2023. Calderwood & Harkness LLP was engaged as restructuring counsel to the Company on April 3, 2023. The first substantive meeting with the first lien lender group was held on April 14, 2023, and the first substantive meeting with the Ad Hoc Mezzanine Group was held on April 28, 2023. An initial restructuring term sheet was circulated to all stakeholder groups on May 19, 2023, and a revised term sheet incorporating feedback from the lending groups was circulated on June 9, 2023. The parties have engaged in good-faith, arm's-length negotiations and desire to memorialize their agreement with respect to the Restructuring Transactions (as defined herein) on the terms set forth in this Agreement and the Restructuring Term Sheet attached hereto as Exhibit A.
E. The parties hereto desire to implement a consensual out-of-court restructuring of the Company's capital structure without the need for a filing under title 11 of the United States Code (the "Bankruptcy Code"), through (a) an amendment and extension of the First Lien Credit Agreement, (b) a new super-priority term loan facility, (c) an equitization of the Mezzanine Notes, and (d) certain equity contributions by the Sponsor (collectively, the "Restructuring Transactions"), all as more fully described herein and in the Restructuring Term Sheet.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Ad Hoc Mezzanine Group" means Graystone Mezzanine Capital Fund II LP, Ashland Structured Credit LLC, and Dunmore Special Situations Fund LP, and any Additional Mezzanine Holders that become parties to this Agreement by executing and delivering a Joinder Agreement in accordance with the terms hereof.
"Administrative Agent" means Pinnacle National Bank, N.A., in its capacity as administrative agent and collateral agent under the First Lien Credit Agreement, together with any successor in such capacity.
"Agreement" means this Restructuring Support Agreement, dated as of June 30, 2023, including all Exhibits and Schedules hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Amended Certificate of Incorporation" means the amended and restated certificate of incorporation of the Company to be filed with the Secretary of State of the State of Delaware in connection with the Restructuring Transactions, providing for, among other things, the authorization of the Series A Preferred Equity.
"Amended Credit Agreement" means the amended and restated First Lien Credit Agreement to be entered into in connection with the Restructuring Transactions, incorporating the amend-and-extend terms set forth in Section 2.01(a) and Section 2.01(b) hereof and in the Restructuring Term Sheet.
"Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended.
"Belvedere" means Belvedere Credit Opportunities Fund LP, a Delaware limited partnership, in its capacity as lead arranger and initial lender under the Super-Priority Credit Agreement.
"Board" means the board of directors of the Company.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in New York, New York are authorized or required by law or executive order to close.
"Certificate of Designations" means the certificate of designations with respect to the Series A Preferred Equity to be filed with the Secretary of State of the State of Delaware.
"Change of Control" means the acquisition by any person or group (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended), other than Ridgeline Capital Partners Fund III, L.P. and the mezzanine equitization recipients and their respective permitted transferees (as defined in the Stockholders' Agreement), of more than 50% of the outstanding voting equity of the Company.
"Closing" means the consummation of all Restructuring Transactions as contemplated by this Agreement, the Restructuring Term Sheet, and the Definitive Documents.
"Closing Date" means the date on which the Closing occurs, which shall be on or before the Outside Date.
"Company" means Stonefield Logistics Group Inc., a Delaware corporation.
"Company Parties" means the Company and each of its direct and indirect subsidiaries, including Stonefield Logistics Holdings LLC, Stonefield Freight Services LLC, Stonefield Last Mile Inc., and Stonefield Warehousing LLC.
"Consenting First Lien Lenders" means those first lien term loan lenders and revolving credit facility lenders that are signatories to this Agreement or that become party hereto by executing and delivering a Joinder Agreement in accordance with the terms hereof, as identified on Schedule 1 hereto.
"Consenting Mezzanine Holders" means those holders of Mezzanine Notes that are signatories to this Agreement or that become party hereto by executing and delivering a Joinder Agreement in accordance with the terms hereof, as identified on Schedule 2 hereto.
"Consenting Stakeholders" means, collectively, the Consenting First Lien Lenders, the Consenting Mezzanine Holders, and the Sponsor.
"Consent Solicitation" means the consent solicitation to be conducted by the Company with respect to the exchange of the Mezzanine Notes, as described in the Restructuring Term Sheet.
"D&O Tail Policy" means the directors' and officers' liability insurance tail policy issued by Northgate Specialty Insurance Company (Policy No. NSI-DOL-2023-07721), providing $15 million in aggregate coverage for a six (6)-year tail period commencing on the Closing Date.
"Definitive Documents" means, collectively, (a) the Amended Credit Agreement, (b) the Super-Priority Credit Agreement, (c) the Super-Priority Guaranty Agreement, (d) the Super-Priority Pledge and Security Agreement, (e) the Intercreditor Agreement, (f) the Exchange Agreement, (g) the Supplemental Indenture, (h) the Amended Certificate of Incorporation, (i) the Certificate of Designations, (j) the Stockholders' Agreement, (k) the Registration Rights Agreement, and (l) all other agreements, documents, instruments, certificates, and other deliverables contemplated by or required to implement the Restructuring Transactions, in each case as set forth in Section 2.02.
"Equitization" means the exchange of the Mezzanine Notes (including accrued PIK interest thereon) for Series A Preferred Equity and common equity of the Company, as described in the Restructuring Term Sheet.
"Exchange Agreement" means the exchange agreement to be entered into among the Company and the exchanging holders of Mezzanine Notes in connection with the Equitization.
"First Lien Claims" means all claims arising under or in connection with the First Lien Credit Agreement, including claims arising under the First Lien Term Loan B and the Revolving Credit Facility.
"First Lien Credit Agreement" has the meaning set forth in Recital B.
"Intercreditor Agreement" means the amended and restated intercreditor agreement to be entered into among Belvedere Credit Opportunities Fund LP (as agent under the Super-Priority Credit Agreement), Pinnacle National Bank, N.A. (as agent under the Amended Credit Agreement), and the Company, establishing a super-priority first-out / first lien second-out payment waterfall, lien subordination, standstill periods, purchase options, and provisions governing debtor-in-possession financing in any subsequent insolvency proceeding.
"Joinder Agreement" means a joinder agreement in the form attached hereto as Exhibit B.
"Joinder Period" means the period commencing on July 3, 2023 and ending at 5:00 p.m. (New York City time) on July 21, 2023.
"Management Incentive Plan" or "MIP" means the equity incentive plan to be adopted by the Board following the Closing, providing for equity awards representing up to 5.0% of the pro forma common equity of the Company, on terms and conditions to be determined by the Board in consultation with the Sponsor and the mezzanine equitization recipients.
"Mezzanine Indenture" has the meaning set forth in Recital B.
"Mezzanine Notes" means the 11.50% Senior Secured Second Lien Notes due June 15, 2025 (CUSIP: 861537 AA 2) issued under the Mezzanine Indenture.
"Mezzanine Trustee" means Continental Fiduciary Trust Company, in its capacity as trustee under the Mezzanine Indenture.
"Milestone" means each of the milestones set forth in Section 4.01.
"New Money Facility" means the super-priority term loan facility in an aggregate principal amount of $55.0 million, consisting of a $45.0 million funded term loan and a $10.0 million delayed-draw term loan commitment, as described in Section 2.01(c) and the Restructuring Term Sheet.
"Outside Date" means December 31, 2023, as such date may be extended in accordance with Section 4.02.
"Parties" means, collectively, the Company Parties, the Sponsor, the Consenting First Lien Lenders, and the Consenting Mezzanine Holders, and "Party" means any one of them individually.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, trust, governmental entity, or other entity.
"Registration Rights Agreement" means the registration rights agreement to be entered into among the Company, the Sponsor, and the mezzanine equitization recipients in connection with the Closing.
"Required Consenting First Lien Lenders" means Consenting First Lien Lenders holding more than 50% of the aggregate outstanding principal amount of the First Lien Term Loan B held by all Consenting First Lien Lenders.
"Required Consenting Mezzanine Holders" means Consenting Mezzanine Holders holding more than 66⅔% of the aggregate outstanding principal amount of the Mezzanine Notes held by all Consenting Mezzanine Holders.
"Restructuring Term Sheet" means the restructuring term sheet attached hereto as Exhibit A, incorporating the terms as revised on June 9, 2023, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms of this Agreement.
"Restructuring Transactions" means the transactions described in the Restructuring Term Sheet and this Agreement, including (a) the amendment and extension of the First Lien Credit Agreement, (b) the New Money Facility, (c) the Equitization, and (d) the Sponsor Equity Contribution.
"Series A Preferred Equity" means the series of preferred stock of the Company to be issued to the exchanging Mezzanine Holders in connection with the Equitization, having an aggregate liquidation preference of $35.0 million and a 10.00% PIK dividend rate, with terms to be set forth in the Certificate of Designations.
"Sponsor" means Ridgeline Capital Partners Fund III, L.P., a Delaware limited partnership, acting through its general partner, Ridgeline Capital Management III LLC, a Delaware limited liability company.
"Sponsor Equity Contribution" means the contribution by the Sponsor of $12.5 million in new cash equity to the Company on or prior to the Closing Date.
"Stockholders' Agreement" means the amended and restated stockholders' agreement to be entered into among the Company, the Sponsor, and the mezzanine equitization recipients, providing for, among other things, the post-restructuring board composition described in Section 2.01(g).
"Super-Priority Agent" means Belvedere Credit Opportunities Fund LP, in its capacity as administrative agent and collateral agent under the Super-Priority Credit Agreement.
"Super-Priority Credit Agreement" means the credit agreement governing the New Money Facility, to be entered into among the Company, as borrower, Belvedere Credit Opportunities Fund LP, as lead arranger, administrative agent, and initial lender, and the other lenders from time to time party thereto.
"Super-Priority Guaranty Agreement" means the guaranty agreement to be entered into by each subsidiary guarantor in favor of the Super-Priority Agent, guaranteeing the obligations under the Super-Priority Credit Agreement.
"Super-Priority Pledge and Security Agreement" means the pledge and security agreement to be entered into by the Company and each subsidiary guarantor in favor of the Super-Priority Agent, granting a super-priority first-out lien on substantially all assets.
"Supplemental Indenture" means the supplemental indenture to the Mezzanine Indenture, effectuating exit consent amendments to strip substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by non-exchanging holders.
"Transfer" means any sale, assignment, transfer, participation, pledge, hypothecation, encumbrance, grant of a security interest, or other disposition of any claim, interest, right, or obligation, whether directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise.
Section 1.02 — Interpretation
Unless the context otherwise requires, in this Agreement:
(a) headings and captions are included for convenience of reference only and shall not affect the meaning or interpretation of any provision hereof;
(b) references to "Sections," "Articles," "Exhibits," and "Schedules" refer to the Sections, Articles, Exhibits, and Schedules of this Agreement unless otherwise specified;
(c) the words "include," "includes," and "including" shall be deemed to be followed by the words "without limitation";
(d) the use of the singular includes the plural and vice versa;
(e) the word "or" is not exclusive;
(f) references to any agreement, document, or instrument shall mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time, unless otherwise expressly provided;
(g) references to any statute, rule, or regulation include all amendments, modifications, codifications, replacements, and successor statutes, rules, and regulations;
(h) all dollar amounts referenced herein are in United States dollars unless otherwise indicated; and
(i) the words "hereof," "herein," "hereunder," and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II — RESTRUCTURING TRANSACTIONS
Section 2.01 — Summary of Restructuring Transactions
The Parties agree to support, and to use commercially reasonable efforts to consummate, the Restructuring Transactions as described in the Restructuring Term Sheet (Exhibit A) and this Agreement, including the following:
(a) Amend and Extend — First Lien Term Loan B. The First Lien Term Loan B shall be amended and restated on the following terms:
(i) The outstanding principal balance of $285.0 million shall remain unchanged.
(ii) The maturity date shall be extended from December 15, 2024 to December 19, 2028 (an extension of approximately four (4) years).
(iii) The applicable interest rate shall be increased from SOFR plus 425 basis points to SOFR plus 500 basis points.
(iv) The SOFR floor shall be increased from 75 basis points to 100 basis points.
(v) Annual amortization of 1.00% of the outstanding principal amount shall be maintained.
(vi) The following financial covenants shall be added to the Amended Credit Agreement: (A) a Total Net Leverage covenant requiring Total Net Leverage not to exceed 6.50x as of the last day of each fiscal quarter ending on or after December 31, 2025, stepping down to 6.25x for fiscal quarters ending on or after December 31, 2026, and stepping down further to 5.75x for fiscal quarters ending on or after December 31, 2027; and (B) a Minimum Liquidity covenant requiring the Company to maintain Minimum Liquidity (defined as unrestricted cash plus available revolving credit commitments) of not less than $20.0 million at all times, tested monthly.
(vii) Each Consenting First Lien Lender holding First Lien Term Loan B claims that consents to the amendment and extension shall receive an amendment consent fee in an amount equal to 50 basis points of the outstanding principal amount of the First Lien Term Loan B held by such lender (the aggregate consent fee being equal to $285.0 million × 0.50% = $1,425,000), payable in cash on the Closing Date.
(b) Amend and Extend — Revolving Credit Facility. The Revolving Credit Facility shall be amended and restated on the following terms:
(i) The aggregate revolving credit commitments shall be reduced from $50.0 million to $35.0 million.
(ii) The maturity date shall be extended to December 19, 2027; provided, however, that the maturity of the Revolving Credit Facility shall be subject to a springing maturity date that is 91 days prior to the maturity of the First Lien Term Loan B if the First Lien Term Loan B has not been refinanced or extended in full by such date.
(iii) The applicable interest rate shall be increased from SOFR plus 375 basis points to SOFR plus 450 basis points.
(iv) Each Consenting First Lien Lender holding Revolving Credit Facility commitments that consents to the amendment and extension shall receive an amendment consent fee in an amount equal to 25 basis points of the Revolving Credit Facility commitment of such lender (the aggregate consent fee being equal to $35.0 million × 0.25% = $87,500), payable in cash on the Closing Date.
(c) New Money — Super-Priority Term Loan. A new super-priority term loan facility shall be established on the following terms:
(i) The aggregate principal amount shall be $55.0 million, consisting of (A) a $45.0 million funded term loan to be drawn in full on the Closing Date, and (B) a $10.0 million delayed-draw term loan commitment available during the twelve (12)-month period following the Closing Date, subject to customary conditions.
(ii) Belvedere Credit Opportunities Fund LP shall serve as lead arranger, administrative agent, and initial lender.
(iii) The applicable interest rate shall be SOFR plus 700 basis points, with a SOFR floor of 100 basis points.
(iv) The facility shall be issued with original issue discount of 2.00% ($55.0 million × 2.00% = $1,100,000 OID), resulting in net funded proceeds at closing of $43.9 million.
(v) The maturity date shall be December 19, 2027 (approximately four (4) years from the anticipated Closing Date).
(vi) Mandatory prepayment shall be required from 75% of annual Excess Cash Flow (to be defined in the Super-Priority Credit Agreement) to the extent total liquidity exceeds $20.0 million.
(vii) Voluntary prepayments shall be subject to call protection as follows: 103% of par if prepaid during the first year, 102% of par if prepaid during the second year, 101% of par if prepaid during the third year, and par thereafter.
(viii) A commitment fee of 1.00% per annum shall be payable on the undrawn portion of the delayed-draw term loan commitment ($10.0 million).
(ix) The New Money Facility shall be secured by a super-priority first-out lien on substantially all assets of the Company Parties, including accounts receivable, inventory, equipment, real property, intellectual property, and equity interests of subsidiaries, as set forth in the Super-Priority Pledge and Security Agreement.
(d) Equitization of Mezzanine Notes. The Mezzanine Notes shall be equitized on the following terms:
(i) The full $140.0 million in outstanding principal amount of the Mezzanine Notes, together with the approximately $8.1 million in accrued payment-in-kind interest (estimated through the anticipated Closing Date), shall be exchanged pursuant to the Exchange Agreement.
(ii) Exchanging Mezzanine Holders shall receive, in exchange for their Mezzanine Notes and accrued PIK interest thereon: (A) their pro rata share of the Series A Preferred Equity, with an aggregate liquidation preference of $35.0 million and a 10.00% PIK dividend rate, senior to common stock in right of payment and liquidation; and (B) their pro rata share of 47.5% of the pro forma common equity of the Company.
(iii) The approximately $8.1 million in accrued PIK interest shall be waived by exchanging holders as part of the settlement consideration embodied in the Equitization.
(iv) Based on the analysis performed by Hargrove Advisory Group LLC, the Company's financial advisor, the implied recovery to Mezzanine Holders on account of the Equitization is estimated at approximately 40 to 55 cents on the dollar, depending on equity valuation assumptions and projected performance of the Company following the Restructuring Transactions.
(v) The Equitization shall be consummated through a consent solicitation and exchange offer conducted by the Company. In connection therewith, exchanging Mezzanine Holders shall deliver exit consents to authorize the execution of the Supplemental Indenture, which shall amend the Mezzanine Indenture to strip substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by any non-exchanging holders.
(vi) The required consent threshold for the Consent Solicitation and the Supplemental Indenture shall be the affirmative consent of holders of more than 66⅔% in aggregate principal amount of the outstanding Mezzanine Notes.
(e) Sponsor Equity Contribution. Ridgeline Capital Partners Fund III, L.P. shall contribute $12.5 million in new cash equity to the Company on or prior to the Closing Date. The proceeds of the Sponsor Equity Contribution shall be used to fund transaction costs incurred in connection with the Restructuring Transactions and to provide an additional liquidity cushion for the Company's post-restructuring operations. As a result of the Equitization and the issuance of new equity to the exchanging Mezzanine Holders, the Sponsor's common equity ownership in the Company shall be diluted from 100% to 47.5% of pro forma common equity.
(f) Pro Forma Equity Ownership. Upon consummation of the Restructuring Transactions, the pro forma common equity ownership of the Company shall be allocated as follows:
(i) Ridgeline Capital Partners Fund III, L.P. (the Sponsor): 47.5% of pro forma common equity.
(ii) Mezzanine Holders (Equitization recipients): 47.5% of pro forma common equity.
(iii) Management (pursuant to the Management Incentive Plan): 5.0% of pro forma common equity.
The foregoing percentages are on a fully diluted basis and give effect to the MIP allocation but not to any future issuances of equity. The Series A Preferred Equity shall be senior to, and shall not participate in, the foregoing common equity allocation.
(g) Board Composition. The post-restructuring Board of Directors shall consist of seven (7) directors, constituted as follows:
(i) Three (3) directors designated by the Sponsor.
(ii) Three (3) directors designated by the holders of a majority of the equity received by Mezzanine Holders in the Equitization.
(iii) One (1) independent director selected by mutual agreement of the Sponsor and the mezzanine equitization recipients.
The foregoing board composition shall be documented in the Stockholders' Agreement. The initial independent director shall be identified prior to the Closing Date and shall be reasonably acceptable to both the Sponsor and the Required Consenting Mezzanine Holders.
(h) Change of Control. A "Change of Control" shall be defined in each of the Amended Credit Agreement and the Super-Priority Credit Agreement to mean the acquisition by any person or group (other than Ridgeline Capital Partners Fund III, L.P. and the mezzanine equitization recipients and their respective permitted transferees) of more than 50% of the outstanding voting equity of the Company. The occurrence of a Change of Control shall trigger mandatory prepayment of all outstanding obligations under the Amended Credit Agreement at 101% of the principal amount thereof, together with accrued and unpaid interest.
(i) Post-Restructuring Capital Structure. The Company's post-restructuring capital structure shall be as follows:
Based on the Company's projected fiscal year 2024 Adjusted EBITDA of $52.0 million, total post-restructuring leverage is projected to be approximately 7.2x ($375.0 million ÷ $52.0 million). The Restructuring Transactions are expected to reduce total funded indebtedness by approximately $100.1 million ($475.1 million pre-restructuring funded debt less $375.0 million post-restructuring funded debt) through the Equitization of the Mezzanine Notes.
Section 2.02 — Definitive Documents
All Definitive Documents shall contain terms and conditions consistent in all material respects with this Agreement and the Restructuring Term Sheet, and shall otherwise be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor; provided, however, that:
(a) the Amended Credit Agreement shall be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, and the Administrative Agent;
(b) the Super-Priority Credit Agreement, the Super-Priority Guaranty Agreement, the Super-Priority Pledge and Security Agreement, and the Intercreditor Agreement shall be in form and substance reasonably acceptable to the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and Belvedere;
(c) the Exchange Agreement, the Supplemental Indenture, and the Certificate of Designations shall be in form and substance reasonably acceptable to the Company and the Required Consenting Mezzanine Holders;
(d) the Stockholders' Agreement and the Registration Rights Agreement shall be in form and substance reasonably acceptable to the Company, the Sponsor, and the Required Consenting Mezzanine Holders; and
(e) the Amended Certificate of Incorporation and any MIP documentation shall be in form and substance reasonably acceptable to the Company, the Sponsor, and the Required Consenting Mezzanine Holders.
The Parties acknowledge and agree that no Definitive Document has been executed as of the date hereof, and that all Definitive Documents remain subject to negotiation, drafting, and execution in accordance with the Milestones set forth in Article IV.
Section 2.03 — Intercreditor Arrangements
In connection with the Closing, the Company, Belvedere Credit Opportunities Fund LP (as Super-Priority Agent), and Pinnacle National Bank, N.A. (as agent under the Amended Credit Agreement) shall enter into the Intercreditor Agreement. The Intercreditor Agreement shall establish, among other things: (a) a first-out / second-out payment waterfall pursuant to which all collections and proceeds of collateral shall be applied first to the obligations under the Super-Priority Credit Agreement and thereafter to the obligations under the Amended Credit Agreement; (b) lien subordination provisions establishing the priority of the super-priority first-out liens over the first lien second-out liens; (c) standstill periods restricting the exercise of remedies by the first lien agent during an initial period following the occurrence of an event of default; (d) purchase options permitting the first lien lenders to purchase the super-priority obligations at par; and (e) provisions governing debtor-in-possession financing in any subsequent insolvency proceeding of the Company or any subsidiary guarantor. The Intercreditor Agreement shall be in form and substance reasonably acceptable to each of the foregoing parties and to the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders.
Section 2.04 — D&O Tail Insurance
On or prior to the Closing Date, the Company shall obtain and thereafter maintain the D&O Tail Policy from Northgate Specialty Insurance Company (Policy No. NSI-DOL-2023-07721), providing $15 million in aggregate coverage for acts and omissions of directors and officers of the Company Parties occurring prior to the Closing Date, with a tail period of six (6) years from the Closing Date. The premium for the D&O Tail Policy (estimated at $475,000) shall be paid by the Company on or before the Closing Date from the proceeds of the Sponsor Equity Contribution or other available funds.
ARTICLE III — AGREEMENTS OF THE PARTIES
Section 3.01 — Agreements of the Company Parties
Subject to the terms and conditions of this Agreement, each of the Company Parties shall:
(a) support and take all commercially reasonable actions necessary or desirable to consummate the Restructuring Transactions on the terms and conditions set forth in this Agreement and in the Restructuring Term Sheet, in a timely manner;
(b) negotiate in good faith and use commercially reasonable efforts to execute and deliver, or cause to be executed and delivered, each of the Definitive Documents in accordance with the Milestones set forth in Article IV;
(c) use commercially reasonable efforts to obtain any and all governmental, regulatory, or third-party approvals, consents, or waivers necessary for the consummation of the Restructuring Transactions;
(d) provide timely, complete, and accurate financial information and other data to all Consenting Stakeholders and their respective advisors, including (i) monthly unaudited financial statements (including a balance sheet, income statement, and cash flow statement) within thirty (30) days of each month-end, (ii) quarterly financial statements within forty-five (45) days of each quarter-end, (iii) a rolling thirteen-week cash flow forecast updated bi-weekly, and (iv) such other information as may reasonably be requested by any Consenting Stakeholder or its advisors, in each case subject to the execution of customary confidentiality or non-disclosure agreements;
(e) not take any action that is materially inconsistent with, or that would reasonably be expected to materially delay or impede, the consummation of the Restructuring Transactions;
(f) promptly notify (and in any event within two (2) Business Days) the Consenting Stakeholders and their respective counsel of any event, condition, or development of which the Company becomes aware that would or would reasonably be expected to (i) prevent, materially delay, or materially impede the Closing, (ii) result in a material breach of any representation, warranty, or covenant contained in this Agreement, or (iii) constitute or result in a material adverse change in the business, operations, assets, liabilities, or financial condition of the Company Parties taken as a whole;
(g) pay, or cause to be paid, the reasonable and documented fees and expenses of (i) Westlake Harden & Cole LLP, as counsel to the Consenting First Lien Lenders, (ii) Thornbury McCaffrey LLP, as counsel to the Ad Hoc Mezzanine Group and Belvedere, (iii) Meridian Veltrian Partners LLC, as financial advisor to the Ad Hoc Mezzanine Group, and (iv) Hargrove Advisory Group LLC, as financial advisor to the Company, in each case in accordance with their respective engagement letters, promptly upon receipt of invoices therefor (and in any event within ten (10) Business Days of receipt), without requirement of prior court approval;
(h) not, directly or indirectly, solicit, initiate, encourage, or support any alternative restructuring proposal, plan, or transaction that is inconsistent with the Restructuring Transactions, including any chapter 11 plan, sale transaction, or alternative capital raise, other than as expressly permitted by the Fiduciary Out set forth in Section 3.05;
(i) operate the business of the Company Parties in the ordinary course consistent with past practice in all material respects, and preserve the value of the Company's assets, business relationships, and workforce;
(j) not, without the prior written consent of the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders, (i) incur, assume, or guarantee any additional indebtedness for borrowed money (other than trade payables arising in the ordinary course of business and borrowings under the Revolving Credit Facility in the ordinary course), (ii) consummate or agree to consummate any acquisition, investment, or joint venture in excess of $500,000 individually or $1,000,000 in the aggregate, (iii) dispose of, transfer, or encumber any material assets outside the ordinary course of business, (iv) declare or pay any dividends or distributions, (v) make any capital expenditures in excess of $2,000,000 in any fiscal quarter above amounts budgeted in the Company's approved operating plan, or (vi) enter into, amend, modify, or terminate any material contract (as defined in the First Lien Credit Agreement); and
(k) maintain in full force and effect all insurance policies, including the D&O policy and general liability, property, and casualty insurance, in amounts and with coverages no less favorable than those in effect as of the date hereof.
Section 3.02 — Agreements of the Consenting First Lien Lenders
Subject to the terms and conditions of this Agreement, each Consenting First Lien Lender shall:
(a) timely vote in favor of, and deliver all required consents to, the amendment and restatement of the First Lien Credit Agreement in accordance with the terms set forth in Section 2.01(a) and Section 2.01(b) and the Restructuring Term Sheet;
(b) not, directly or indirectly, instruct, direct, or encourage the Administrative Agent to take any action to accelerate, demand payment of, enforce, or exercise remedies with respect to the obligations arising under the First Lien Credit Agreement, or to commence or join in any involuntary bankruptcy proceeding against any Company Party, in each case in a manner that would be inconsistent with the Restructuring Transactions (subject to the termination provisions set forth in Article VII);
(c) not Transfer any First Lien Claims except in accordance with Article V;
(d) support and not object to the Super-Priority Credit Agreement, the Intercreditor Agreement, and the transactions contemplated thereby, including the granting of the super-priority first-out liens; and
(e) negotiate in good faith the terms of the Definitive Documents to which any Consenting First Lien Lender is a party or in respect of which its consent is required.
Section 3.03 — Agreements of the Consenting Mezzanine Holders
Subject to the terms and conditions of this Agreement, each Consenting Mezzanine Holder shall:
(a) timely deliver consents in the Consent Solicitation in favor of the Equitization, including the exchange of its Mezzanine Notes for Series A Preferred Equity and common equity on the terms set forth herein and in the Restructuring Term Sheet;
(b) timely deliver exit consents to authorize the execution and delivery of the Supplemental Indenture to effectuate exit consent amendments to the Mezzanine Indenture, stripping substantially all restrictive covenants, event-of-default provisions, and collateral protections from the Mezzanine Notes held by non-exchanging holders;
(c) tender all of its Mezzanine Notes in the exchange offer and execute and deliver the Exchange Agreement;
(d) not Transfer any Mezzanine Notes except in accordance with Article V;
(e) not, directly or indirectly, instruct, direct, or encourage the Mezzanine Trustee to take any action to accelerate, demand payment of, enforce, or exercise any remedies under the Mezzanine Indenture, or to commence or join in any involuntary bankruptcy proceeding against any Company Party, in each case in a manner that would be inconsistent with the Restructuring Transactions (subject to the termination provisions set forth in Article VII); and
(f) support the Restructuring Transactions and not object to, challenge, or otherwise take any action that is materially inconsistent with this Agreement or the Restructuring Term Sheet.
Section 3.04 — Agreements of the Sponsor
Subject to the terms and conditions of this Agreement, the Sponsor shall:
(a) fund the Sponsor Equity Contribution of $12.5 million in cash on or prior to the Closing Date by wire transfer of immediately available funds to an account designated by the Company;
(b) accept the dilution of its equity ownership in the Company from 100% to 47.5% of pro forma common equity as a result of the Equitization;
(c) execute and deliver, or cause to be executed and delivered, the Amended and Restated Stockholders' Agreement, including provisions for the board composition described in Section 2.01(g) (three (3) Ridgeline-designated directors, three (3) mezzanine holder-designated directors, and one (1) independent director);
(d) cause its current designees on the Board (including Julian Voight and Serena Chu) to vote in favor of, and take all corporate actions necessary to approve, the Restructuring Transactions and the execution and delivery of the Definitive Documents; and
(e) not Transfer, or agree to Transfer, any direct or indirect equity interests in the Company or any Company Party except in accordance with Article V.
Section 3.05 — Fiduciary Out
Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require the Board of Directors of the Company (including Julian Voight and Serena Chu, as Ridgeline designees, and any other directors then serving) to take or refrain from taking any action that would be inconsistent with applicable law or the exercise of its fiduciary duties under the General Corporation Law of the State of Delaware, as determined by the Board in good faith after consultation with counsel (including Calderwood & Harkness LLP). If, after such consultation, the Board determines in good faith that continued performance by the Company under this Agreement would be inconsistent with the exercise of its fiduciary duties (including in connection with the receipt or consideration of any alternative transaction or proposal), the Company shall provide written notice to each of the Consenting Stakeholders and their respective counsel within three (3) Business Days of such determination (a "Fiduciary Out Notice"). Upon receipt of a Fiduciary Out Notice, each of the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor shall have the right to terminate this Agreement in accordance with Section 7.03(d), Section 7.04, and Section 7.05, as applicable. The delivery of a Fiduciary Out Notice shall not, by itself, constitute a breach of any obligation of the Company under this Agreement.
ARTICLE IV — MILESTONES
Section 4.01 — Milestones
The Parties shall use commercially reasonable efforts to satisfy the following Milestones by the dates set forth below, in each case unless extended in accordance with Section 4.02:
Section 4.02 — Extensions
Any individual Milestone may be extended upon the written agreement of the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor. The Outside Date may be extended by up to thirty (30) calendar days (to no later than January 30, 2024) upon the written agreement of the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor. No further extension of the Outside Date shall be permitted except by amendment to this Agreement in accordance with Section 8.02.
ARTICLE V — TRANSFER PROVISIONS
Section 5.01 — Restrictions on Transfers — First Lien Claims
No Consenting First Lien Lender shall Transfer all or any portion of its First Lien Claims unless the proposed transferee (a) is already a Consenting First Lien Lender party to this Agreement, or (b) prior to or contemporaneously with such Transfer, executes and delivers to counsel for the Company and counsel for the Consenting First Lien Lenders a Joinder Agreement in the form attached hereto as Exhibit B, pursuant to which such transferee agrees to be bound by all of the terms, conditions, and obligations of this Agreement applicable to a Consenting First Lien Lender. Any purported Transfer of First Lien Claims in violation of this Section 5.01 shall be void ab initio and of no force or effect, and the Company and the Administrative Agent shall have no obligation to recognize or give effect to any such purported Transfer.
Section 5.02 — Restrictions on Transfers — Mezzanine Claims
No Consenting Mezzanine Holder shall Transfer all or any portion of its Mezzanine Notes unless the proposed transferee (a) is already a Consenting Mezzanine Holder party to this Agreement, or (b) prior to or contemporaneously with such Transfer, executes and delivers to counsel for the Company and counsel for the Consenting Mezzanine Holders a Joinder Agreement in the form attached hereto as Exhibit B, pursuant to which such transferee agrees to be bound by all of the terms, conditions, and obligations of this Agreement applicable to a Consenting Mezzanine Holder. Any purported Transfer of Mezzanine Notes in violation of this Section 5.02 shall be void ab initio and of no force or effect, and the Company and the Mezzanine Trustee shall have no obligation to recognize or give effect to any such purported Transfer.
Section 5.03 — Restrictions on Transfers — Sponsor Equity
The Sponsor shall not Transfer any direct or indirect equity interests in the Company or Stonefield Logistics Holdings LLC prior to the Closing Date without the prior written consent of the Required Consenting First Lien Lenders and the Required Consenting Mezzanine Holders. Any purported Transfer in violation of this Section 5.03 shall be void ab initio.
Section 5.04 — Qualified Market Makers
Notwithstanding anything to the contrary in this Article V, the restrictions set forth in Section 5.01 and Section 5.02 shall not apply to a Transfer by a Consenting First Lien Lender or a Consenting Mezzanine Holder to a qualified market maker (defined as any entity that (x) holds itself out to the public or the applicable private markets as standing ready in the ordinary course of its business to purchase and sell claims or securities for its own account on a regular basis and (y) is in fact regularly engaged in such business); provided, however, that such qualified market maker shall either (i) execute and deliver a Joinder Agreement within five (5) Business Days of such Transfer, or (ii) Transfer such claims or securities within five (5) Business Days to a transferee that is a Consenting Stakeholder or that contemporaneously executes and delivers a Joinder Agreement. If a qualified market maker fails to satisfy either clause (i) or clause (ii) within the applicable five (5) Business Day period, the Transfer to such qualified market maker shall be deemed void ab initio.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.01 — Mutual Representations
Each Party hereby represents and warrants to each other Party, as of the date hereof (and as of the Closing Date), as follows:
(a) Organization. Such Party is duly organized, validly existing, and in good standing (to the extent such concept is recognized) under the laws of its jurisdiction of organization, and has all requisite organizational power and authority to own, lease, and operate its properties and to carry on its business as currently conducted.
(b) Authority. Such Party has the requisite corporate, partnership, or limited liability company power and authority to enter into, execute, deliver, and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary organizational action on the part of such Party.
(c) Binding Effect. This Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(d) No Conflicts. The execution, delivery, and performance by such Party of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) conflict with, or result in a breach or violation of, the organizational documents of such Party, (ii) conflict with, or result in a breach or violation of, any applicable law, rule, regulation, order, judgment, or decree binding upon such Party, or (iii) conflict with, constitute a default under, or give rise to any right of termination, cancellation, acceleration, or loss of any benefit under, any material agreement, contract, or instrument to which such Party is a party or by which any of its assets is bound, except, in the case of clauses (ii) and (iii), as expressly contemplated by this Agreement and the Restructuring Transactions or as would not reasonably be expected to have a material adverse effect on such Party's ability to perform its obligations hereunder.
(e) Governmental Approvals. No material governmental, regulatory, or third-party consent, approval, authorization, order, filing, registration, or qualification is required to be obtained by such Party in connection with the execution, delivery, and performance of this Agreement that has not been obtained or will not be obtained prior to the Closing.
Section 6.02 — Representations of Consenting First Lien Lenders
Each Consenting First Lien Lender, severally and not jointly, represents and warrants as follows:
(a) Such Consenting First Lien Lender is (i) the sole beneficial owner of, or (ii) an authorized investment manager, advisor, or sub-advisor with the legal authority to bind the beneficial owner(s) of, the First Lien Claims set forth opposite its name on Schedule 1 hereto, and has the full power and authority to vote, consent, transfer, exchange, and otherwise dispose of such claims in accordance with this Agreement. Such Consenting First Lien Lender does not beneficially own any First Lien Claims other than those set forth on Schedule 1 (other than any First Lien Claims acquired after the date hereof in compliance with Article V).
(b) As of the date hereof, the aggregate principal amount of First Lien Term Loan B held by the Consenting First Lien Lenders party hereto is $228.5 million of the $285.0 million outstanding, representing 80.2% of the outstanding principal amount of the First Lien Term Loan B.
(c) As of the date hereof, all three (3) Revolving Credit Facility lenders — Pinnacle National Bank, N.A. ($20.0 million commitment), Great Basin Commercial Bank ($15.0 million commitment), and Tidewater Lending Corporation ($15.0 million commitment) — are signatories to this Agreement, representing unanimous (100%) consent of the Revolving Credit Facility lenders.
Section 6.03 — Representations of Consenting Mezzanine Holders
Each Consenting Mezzanine Holder, severally and not jointly, represents and warrants as follows:
(a) Such Consenting Mezzanine Holder is the sole beneficial owner (or authorized investment manager with authority to bind the beneficial owner) of the Mezzanine Notes set forth opposite its name on Schedule 2 hereto, and has the full power and authority to vote, consent, tender, exchange, and otherwise dispose of such Mezzanine Notes in accordance with this Agreement.
(b) As of the date hereof, the aggregate principal amount of Mezzanine Notes held by the Consenting Mezzanine Holders party hereto is as follows: Graystone Mezzanine Capital Fund II LP ($52.0 million), Ashland Structured Credit LLC ($40.0 million), and Dunmore Special Situations Fund LP ($30.0 million), for an aggregate of $122.0 million, representing 87.1% of the $140.0 million outstanding principal amount of the Mezzanine Notes.
(c) It is anticipated that additional holders of Mezzanine Notes will join this Agreement during the Joinder Period. The target for total consenting Mezzanine Notes is not less than $134.5 million (96.1% of outstanding principal), with $5.5 million in non-consenting Mezzanine Notes to be addressed through exit consent amendments effectuated pursuant to the Supplemental Indenture.
Section 6.04 — Representations of the Sponsor
The Sponsor represents and warrants as follows:
(a) The Sponsor is the sole equity holder of the Company through its wholly owned subsidiary, Stonefield Logistics Holdings LLC, a Delaware limited liability company. Stonefield Logistics Holdings LLC is the registered holder of 100% of the outstanding shares of common stock of the Company.
(b) The Sponsor has available funds sufficient to fund the Sponsor Equity Contribution of $12.5 million in cash on or prior to the Closing Date, as required by Section 3.04(a). The Sponsor's general partner is Ridgeline Capital Management III LLC, a Delaware limited liability company, with its principal office located at 300 Park Avenue, 28th Floor, New York, New York 10022.
(c) The Sponsor has obtained all necessary internal approvals, including the approval of its limited partner advisory committee (to the extent required by the limited partnership agreement of the Sponsor), for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, including the Sponsor Equity Contribution.
Section 6.05 — Representations of the Company
The Company represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Delaware. The Company's registered agent in the State of Delaware is Capitol Registered Agents, Inc., 1209 Orange Street, Wilmington, Delaware 19801.
(b) As of March 31, 2023, the Company's total funded indebtedness is approximately $475.1 million, and the Company's total liquidity is approximately $15.8 million, consisting of approximately $11.3 million of unrestricted cash and approximately $4.5 million of available borrowing capacity under the Revolving Credit Facility. The foregoing amounts are based on the Company's internal books and records and have not been audited or reviewed by independent accountants.
(c) As of the date hereof, no default or event of default exists under the First Lien Credit Agreement or the Mezzanine Indenture that has resulted in the acceleration of any indebtedness thereunder or that would, by itself, prevent the consummation of the Restructuring Transactions. To the knowledge of the Company, no event has occurred and no condition exists that, with the giving of notice or the passage of time or both, would constitute an event of default under the First Lien Credit Agreement or the Mezzanine Indenture, other than the potential covenant compliance issues that the Restructuring Transactions are intended to address.
(d) The Company's independent auditor is Whitfield & Pryce LLP (lead partner: Todd Ashburn, CPA). The Company's audited financial statements for the fiscal year ended December 31, 2022 were prepared in conformity with generally accepted accounting principles in the United States and are complete and correct in all material respects. Since the date of such audited financial statements, there has been no material adverse change in the business, operations, assets, liabilities, or financial condition of the Company Parties taken as a whole, other than the revenue decline and liquidity constraints described in Recital C, which are publicly known.
ARTICLE VII — TERMINATION
Section 7.01 — Termination by All Parties
(a) This Agreement shall terminate automatically, without any action or notice by any Party, upon the occurrence of the Closing.
(b) This Agreement may be terminated at any time prior to the Closing by the mutual written consent of the Company, the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, and the Sponsor.
Section 7.02 — Termination by the Company
The Company may terminate this Agreement, upon written notice to all other Parties, upon the occurrence of any of the following events:
(a) a material breach by the Required Consenting First Lien Lenders, the Required Consenting Mezzanine Holders, or the Sponsor of any material representation, warranty, or covenant contained in this Agreement, which breach remains uncured for ten (10) Business Days after written notice thereof from the Company to the breaching Party or Parties (specifying in reasonable detail the nature of the breach);
(b) the Board's exercise of the Fiduciary Out in accordance with Section 3.05;
(c) the issuance of a final, non-appealable order, judgment, or ruling by a court of competent jurisdiction or other governmental authority permanently enjoining, restraining, or otherwise prohibiting the consummation of any of the Restructuring Transactions; or
(d) the Outside Date (December 31, 2023, as may be extended in accordance with Section 4.02) has passed without the Closing having occurred, unless the failure of the Closing to have occurred by such date was caused by a material breach by the Company of its obligations hereunder.
Section 7.03 — Termination by Required Consenting First Lien Lenders
The Required Consenting First Lien Lenders may terminate this Agreement, upon written notice to all other Parties, upon the occurrence of any of the following events:
(a) a material breach by the Company or the Sponsor of any material representation, warranty, or covenant contained in this Agreement, which breach remains uncured for ten (10) Business Days after written notice thereof from the Required Consenting First Lien Lenders to the breaching Party (specifying in

RESTRUCTURING SUPPORT AGREEMENT

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