1020-00001 · Client 1020 · Transaction Documents/Credit Agreement

credit-agreement-second-markup-comment-letter.docx DOCUMENT M&A / Corporate

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PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP 150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601 Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com

October 14, 2022

Via Email and First Class Mail

Lauren Chisholm, Senior Associate Kessler, Brandt & Whitfield LLP 311 South Wacker Drive, Suite 5400 Chicago, Illinois 60606

Re: Second Markup of Credit Agreement — $80,000,000 Senior Secured Asset-Based Revolving Credit Facility among Greenfield Agricultural Partners LLC, as Borrower, Greenfield Holdings Corp., Greenfield Grain Storage LLC, and Greenfield Crop Inputs Inc., as Guarantors, the Lenders party thereto, and Heartland Commerce Bank, National Association, as Administrative Agent and Collateral Agent (C&H Markup of KBW Second Draft dated October 7, 2022)

Calderwood & Harkness Matter No. 1020-00001

Dear Lauren:

Enclosed with this letter is Calderwood & Harkness's second markup (redline) of the Credit Agreement, marked against Kessler, Brandt & Whitfield's second draft dated October 7, 2022. The markup reflects certain agreements reached during the negotiation call held on October 3, 2022 among Calderwood & Harkness (Ian Blackwood and the undersigned), Greenfield Agricultural Partners LLC and its affiliates (Patricia Calloway, General Counsel, and Nina Vasquez, Chief Financial Officer), Kessler, Brandt & Whitfield (Richard Whitfield and yourself), and Heartland Commerce Bank, National Association (Gregory Thorn, Managing Director — Agribusiness Lending, and Allison Kuo, Senior Vice President — Credit Administration). We appreciate the constructive dialogue on that call and the movement reflected in KBW's second draft on a number of issues.

The purpose of this issues list is to highlight the principal open items and areas of continued disagreement between the parties. It does not address every change reflected in our redline; rather, it focuses on those provisions that we believe require further discussion and resolution before the Credit Agreement can be finalized. We encourage your team and HCB to review the redline in its entirety, as certain conforming and technical changes are made throughout the document that are not separately addressed in this letter.

We set forth our comments below, organized by subject matter.

I. Borrowing Base — Availability Reserves

1.1 Quantum of Initial Availability Reserves

We acknowledge that KBW's second draft reduced the initial availability reserve from $5,000,000 to $4,000,000. We appreciate HCB's willingness to move on this point, and we understand that this reduction was intended to reflect the discussion on the October 3 call. However, Greenfield's position remains that the initial availability reserve should be set at $3,500,000, which is the figure expressly agreed upon in the revised term sheet dated September 9, 2022, executed by both HCB and Greenfield.

Greenfield's rationale for the $3,500,000 figure is straightforward. Greenfield's collateral pool is diversified across four distinct asset categories — eligible accounts receivable, crop inventory valued at net orderly liquidation value ("NOLV"), crop-input inventory (seed, fertilizer, and crop protection chemicals), and grain warehouse receipts — each of which is already subject to conservative advance rates that incorporate substantial cushion for liquidation risk. Specifically, the agreed advance rates are as follows:

• Eligible Accounts Receivable: 85% of eligible accounts receivable;

• Crop Inventory (NOLV): 65% of the net orderly liquidation value of eligible crop inventory;

• Crop-Input Inventory: 70% of the lower of cost or market value of eligible crop-input inventory; and

• Eligible Warehouse Receipts: 80% of market value (as discussed further in Section III below) of eligible grain warehouse receipts.

These advance rates, individually and in the aggregate, already build in a meaningful discount to the realizable value of the underlying collateral. The 15% haircut on accounts receivable, 35% haircut on crop inventory NOLV, 30% haircut on crop-input inventory, and 20% haircut on warehouse receipts collectively represent tens of millions of dollars of built-in loss absorption capacity. There is no commercial or credit justification for layering an additional $4,000,000 availability reserve on top of these haircuts. Doing so effectively double-counts liquidation risk in a manner that unnecessarily constrains Greenfield's borrowing capacity at the very time the facility is intended to support its seasonal working capital needs.

We respectfully request that KBW and HCB confirm $3,500,000 as the initial availability reserve, consistent with the executed term sheet. To the extent HCB has identified specific risk factors since the term sheet was executed that would justify a departure from the agreed figure, we ask that those factors be shared with Greenfield so that they may be discussed on the next call.

1.2 Agent's Discretionary Reserve Authority

KBW's second draft retains broad discretion for the Administrative Agent to impose additional availability reserves at any time without borrower consent and without any quantitative cap. As currently drafted, Section 2.01(b)(iii) permits the Agent to establish, increase, or modify reserves "in its sole discretion" based on "such factors as Agent deems relevant in the exercise of its credit judgment." This formulation is, in Greenfield's view, overly broad and provides no meaningful guardrails against arbitrary or excessive reserve imposition.

Greenfield recognizes that discretionary reserve authority is a standard feature of asset-based lending facilities and does not seek to eliminate it. However, Greenfield requests that the exercise of this authority be subject to the following conditions, which are consistent with market practice for facilities of this type and size:

(a) Standard of Review. The imposition or modification of any discretionary reserve should be subject to a standard of "reasonable determination exercised in good faith," rather than the current "sole discretion" standard. This is the prevailing standard in the ABL market and provides appropriate deference to the Agent's credit judgment while protecting the Borrower against arbitrary action.

(b) Prior Written Notice. The Agent should be required to provide prior written notice to the Borrower of any proposed new reserve or increase in an existing reserve, together with a reasonably detailed explanation of the factual basis and methodology supporting the reserve determination. Transparency in reserve-setting is essential to Greenfield's ability to manage its liquidity and plan its borrowing activity.

(c) Consultation Period. Before any new or increased discretionary reserve becomes effective, there should be a consultation period of not less than ten (10) business days during which the Borrower may discuss the proposed reserve with the Agent, provide additional information or analysis, and seek to resolve any disagreement regarding the appropriateness or quantum of the reserve. This consultation right does not give Greenfield a veto over reserves, but it does ensure a good-faith dialogue before the Borrower's availability is reduced.

(d) Exigent Circumstances Exception. Greenfield acknowledges that in exigent circumstances — for example, a material deterioration in collateral quality, a significant casualty loss, or the discovery of a material deficiency in a field examination — the Agent may need to impose a reserve on an expedited basis. In such circumstances, the ten-business-day consultation period may be shortened or waived, provided that the Agent promptly notifies the Borrower of the reserve and the basis therefor and engages in consultation as soon as reasonably practicable thereafter.

In addition, Greenfield strongly opposes the provision in Section 2.01(b)(iv) of KBW's second draft that purports to permit the retroactive application of reserves to previously calculated and delivered borrowing base certificates. This provision would create uncertainty regarding the Borrower's compliance with borrowing base limitations at the time borrowings were made and, in extreme cases, could result in a retroactive overadvance through no fault of the Borrower. Reserves should apply prospectively only, effective as of the date specified in the Agent's notice (subject to the consultation period described above).

II. Borrowing Base — Advance Rates on Crop-Input Inventory

2.1 Crop-Input Inventory Advance Rate and Eligibility Criteria

KBW's second draft maintains a 70% advance rate for eligible crop-input inventory (encompassing seed, fertilizer, and crop protection chemicals), applied against the lower of cost or market value. We confirm that the 70% advance rate is consistent with the September 9, 2022 revised term sheet, and Greenfield does not object to this rate.

However, Greenfield has significant concerns with several newly added eligibility exclusions set forth in Section 2.07(c) of KBW's second draft. These exclusions were not contemplated or discussed during the term sheet negotiations, were not included in KBW's initial draft, and appear for the first time in the second draft. Collectively, they would materially and adversely reduce the pool of eligible crop-input inventory and, during critical pre-plant and early growing season periods, could result in a borrowing base reduction of an estimated $3,000,000 to $5,000,000 at the trough — precisely the period when Greenfield's seasonal working capital needs are greatest. Greenfield's specific objections are as follows:

Exclusion of Crop-Input Inventory Held at Third-Party Warehouses or In Transit. Section 2.07(c)(vi) of the second draft excludes from eligibility all crop-input inventory that is "held at any location not owned or leased by Borrower or any Guarantor, including, without limitation, inventory held by third-party warehousemen, logistics providers, or common carriers, and inventory in transit." This exclusion is commercially unreasonable given the realities of Greenfield's supply chain. A significant portion of Greenfield's seasonal fertilizer and crop protection chemical purchases are shipped directly from manufacturers and wholesale distributors to third-party logistics facilities or are in transit during the peak pre-plant season from March through May of each crop year. Greenfield utilizes bonded third-party warehouse facilities operated by established logistics providers, including Tri-State Agricultural Logistics, Inc. and Midwest Grain & Supply Co., to stage inventory prior to distribution to its elevator sites and distribution centers. This is standard practice in the agricultural inputs industry and does not diminish the value or recoverability of the inventory.

Greenfield proposes that crop-input inventory held at third-party warehouses be eligible, provided that (i) the applicable warehouse operator has entered into a collateral access agreement or warehouseman's waiver in form and substance reasonably acceptable to Agent, (ii) the Borrower maintains insurance covering such inventory in the amounts and with the endorsements required by the Credit Agreement, and (iii) the inventory is segregated and identifiable. With respect to inventory in transit, Greenfield proposes eligibility provided that the Borrower holds valid bills of lading or shipping documentation evidencing ownership and the goods are insured.

Exclusion of Crop-Input Inventory Older than 12 Months from Date of Manufacture. Section 2.07(c)(viii) excludes crop-input inventory where the date of manufacture is more than twelve (12) months prior to the date of determination. While Greenfield appreciates HCB's interest in ensuring the quality and usability of pledged inventory, the twelve-month cutoff is not aligned with the actual shelf life and usability of the relevant products. Certain crop protection chemicals and seed treatments commonly utilized by Greenfield have manufacturer-certified shelf lives of eighteen (18) to twenty-four (24) months. A blanket twelve-month exclusion would cause perfectly usable, commercially valuable inventory to fall out of the borrowing base well before the end of its useful life. Greenfield proposes increasing this threshold to eighteen (18) months from the date of manufacture, or alternatively, providing that inventory shall not be excluded solely on the basis of age so long as it remains within the manufacturer's stated shelf life as set forth in the applicable product specifications or material safety data sheets.

Exclusion of Slow-Moving Inventory. Section 2.07(c)(ix) excludes any crop-input inventory that has not been sold within one hundred eighty (180) days of the date of acquisition by the Borrower. This exclusion fundamentally misapprehends Greenfield's business model and seasonal purchasing cycle. Greenfield's standard practice — and the standard practice throughout the agricultural inputs industry — is to purchase crop inputs during the off-season (typically September through February) in order to take advantage of early-order discounts and ensure product availability for the spring planting season (March through June). Under this business model, it is entirely ordinary and expected that crop-input inventory acquired in September or October will not be sold or applied until the following April or May — a period of approximately 180 to 240 days. The 180-day slow-moving threshold would cause substantial volumes of perfectly saleable, current-season inventory to be excluded from the borrowing base precisely at the point when Greenfield's borrowing needs are greatest.

Greenfield requests that the slow-moving inventory exclusion threshold be increased to two hundred seventy (270) days from the date of acquisition, or alternatively, that inventory held for planned seasonal use as reflected in the Borrower's current crop plan delivered to the Agent not be treated as "slow-moving" for purposes of this exclusion, regardless of the length of the holding period.

2.2 Valuation Methodology for Crop-Input Inventory

Greenfield requests clarification on the methodology for determining "market value" for purposes of the lower-of-cost-or-market-value test applicable to crop-input inventory. The term "market value" is used throughout KBW's second draft without definition in the context of crop-input inventory (as distinguished from the warehouse receipt valuation methodology, which is addressed in Section III below). Specifically, it is unclear whether "market value" is intended to be determined by reference to (i) the current list price published by the applicable manufacturer or supplier, (ii) the most recent actual purchase price paid by the Borrower, (iii) an independent third-party appraisal, or (iv) some other methodology.

Greenfield proposes that "market value" for crop-input inventory be defined as the most recent wholesale purchase price paid by the Borrower to its primary suppliers for the applicable product, unless the Agent has a reasonable basis to conclude that a material decline in the value of such inventory has occurred since the date of purchase, in which case the Agent may require an updated valuation or appraisal. This approach is objective, readily verifiable against Borrower's purchase records and supplier invoices, and avoids the uncertainty and expense of periodic independent appraisals for inputs that are commodity-like products with established market pricing.

III. Borrowing Base — Warehouse Receipt Valuation

3.1 CBOT Settlement Price Reference and Basis Determination

KBW's second draft now specifies that eligible grain warehouse receipts are valued at 80% of "market value," defined as the Chicago Board of Trade ("CBOT") settlement price less "applicable basis." Greenfield accepts this valuation methodology in principle and views the 80% advance rate and the CBOT-minus-basis framework as commercially reasonable for the grain assets in question.

However, the definition as drafted lacks sufficient specificity on two critical parameters that will have a material impact on the calculated borrowing base:

CBOT Contract Month. The draft does not specify which CBOT futures contract month is to be used as the reference price. CBOT grain futures trade across multiple delivery months (e.g., for corn: March, May, July, September, and December), and the settlement price can vary meaningfully from one contract month to the next, particularly during periods of market contango or backwardation. Greenfield requests that the definition specify that the applicable CBOT settlement price is the settlement price for the nearest active delivery month for the applicable grain commodity as of the date of determination. This approach provides the most liquid and transparent reference price and is consistent with prevailing industry practice for grain inventory valuation.

Basis Determination Methodology. "Applicable basis" — the differential between the CBOT futures price and the local cash price at or near the point of delivery — is a critical component of the valuation formula, but the draft does not specify how basis is to be determined. Basis levels vary by geographic location, grain quality, delivery point, and time of year, and can range from positive to negative depending on local supply and demand conditions. Greenfield is concerned that leaving basis determination to the Agent's discretionary judgment could introduce unnecessary volatility and unpredictability into the borrowing base calculation.

Greenfield proposes that "applicable basis" be determined by reference to county average basis data as published by the USDA Agricultural Marketing Service (or, if such data is not available for the relevant county, the nearest available reporting region), updated monthly. This provides an objective, publicly available, and independently verifiable data source that reflects actual local market conditions. In the alternative, if HCB prefers a different basis source, Greenfield is open to discussing a mutually agreed-upon methodology, but the key principle is that basis should be determined by reference to an objective, verifiable data source rather than Agent discretion.

IV. Field Examination Scheduling and Cost Allocation

4.1 Frequency and Cost Cap

KBW's second draft provides for field examinations conducted by Pryor & Associates LLC (or such other firm as the Agent may designate in its sole discretion) at the Borrower's sole expense. The draft imposes no limitation on the frequency of examinations outside a Trigger Period and no cap on examination costs.

Greenfield accepts two (2) field examinations per fiscal year at Borrower expense during periods when no Trigger Period is in effect, which is consistent with the term sheet. Greenfield further accepts that additional examinations may be conducted at Borrower expense during a Trigger Period.

However, Greenfield insists on the following protections with respect to field examination costs and logistics:

(a) Per-Exam Fee Cap — Routine Examinations. The aggregate fees and out-of-pocket expenses payable by Borrower for each routine annual field examination (i.e., examinations conducted outside a Trigger Period) shall not exceed $50,000 per examination, inclusive of examiner fees, travel, lodging, and related expenses. This cap is consistent with market practice and provides cost certainty to the Borrower while permitting a thorough examination of Greenfield's operations.

(b) Per-Exam Fee Cap — Trigger Period Examinations. Additional field examinations conducted during a Trigger Period shall be subject to a per-examination cap of $75,000, which reflects the potentially broader scope and more intensive nature of such examinations.

(c) Advance Notice and Scheduling Coordination. The Agent shall provide the Borrower with not less than fifteen (15) business days' prior written notice of any scheduled field examination. The Agent and the field examiner shall coordinate scheduling with the Borrower's operations team, and in particular with Raymond Foss, Vice President of Operations, to minimize disruption to elevator, warehouse, and distribution center operations. Greenfield operates fourteen (14) elevator sites and three (3) distribution centers across Iowa and western Illinois, and harvest-season operations (September through November) are particularly sensitive to disruptions.

4.2 Coordination with Borrowing Base Certificate Delivery

We note that Pryor & Associates LLC is scheduled to commence its initial on-site field examination on October 17, 2022, beginning at Greenfield's Des Moines headquarters facility and thereafter visiting select elevator sites in Polk, Story, and marshall counties. This examination is expected to take approximately ten (10) to twelve (12) business days to complete, with the final written report to follow.

Given the anticipated closing timeline for the facility, it is important that the field examination report — and in particular the NOLV appraisal values for crop inventory that will be incorporated into the borrowing base — be completed and delivered on a timeline that permits the initial borrowing base certificate to be prepared and delivered at or promptly following closing. Greenfield requests that the Credit Agreement expressly align the field examination report delivery timeline with the borrowing base certificate delivery schedule to avoid any gap or delay in the initial determination of availability.

Additionally, Greenfield requests that Section 6.10 of the Credit Agreement be revised to expressly provide that the Borrower shall receive a copy of each field examination report within ten (10) business days of the field examiner's completion of such report. Access to examination findings is critical to the Borrower's ability to respond to any identified issues, update its internal controls, and prepare accurate borrowing base certificates. This is a routine borrower right in ABL transactions, and we do not believe it should be controversial.

4.3 Selection of Field Examiner

As noted above, KBW's second draft gives the Agent sole discretion to select the field examination firm. While Greenfield acknowledges that the Agent has a legitimate interest in selecting a qualified, independent examiner, the appraisal and examination of agricultural inventory — including grain stored in country elevators, crop protection chemicals in inventory, and fertilizer in bulk storage — requires specialized knowledge that not all general-purpose field examination firms possess. The accuracy of the NOLV and market value determinations that underpin the borrowing base depends directly on the examiner's familiarity with agricultural commodities, storage conditions, and liquidation markets.

Greenfield requests reasonable consultation rights (but not approval or veto rights) regarding the selection of the field examination firm. Specifically, if the Agent proposes to replace Pryor & Associates LLC with an alternative firm, the Agent should notify the Borrower of the proposed replacement, provide the Borrower with information regarding the proposed firm's qualifications and experience with agricultural inventory appraisals, and afford the Borrower a reasonable opportunity to comment before the selection is finalized.

V. Commodity Hedging Negative Pledge

5.1 Scope of Restriction

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

Definition of "Anticipated Production." The draft does not define or specify the methodology for calculating "anticipated production" for purposes of the 80% cap. This omission creates significant ambiguity and the potential for disputes regarding compliance. Anticipated production can vary substantially depending on the baseline used (e.g., prior year actual production, five-year average, budgeted production for the current crop year) and whether adjustments are made for changes in planted acreage, crop mix, or expected yields. Greenfield proposes that "anticipated production" be defined as the most recent completed crop year's actual production for each applicable commodity, adjusted for any changes in planted acreage reflected in the current crop plan delivered by the Borrower to the Agent pursuant to the reporting requirements of the Credit Agreement. This approach uses verifiable historical data as the starting point and adjusts for known changes in the current year's operations, providing both objectivity and relevance.

Covered Instruments — Exclusion of Ordinary-Course Forward Sales. The draft defines the scope of the hedging restriction to cover all "commodity derivative contracts," a term defined to include "futures contracts, options on futures contracts, swap agreements, forward contracts, and any other agreements or arrangements designed to hedge or manage the risk of fluctuations in commodity prices." This definition is problematic because it captures bona fide grain merchandising forward contracts — that is, forward sales contracts entered into by Greenfield in the ordinary course of its grain merchandising business with grain buyers, ethanol plants, feed mills, and other end users. These forward contracts are not speculative hedging instruments; they are core revenue-generating transactions through which Greenfield markets and sells its grain production and grain purchased from third-party producers. Treating forward sales as hedging positions subject to the 80% cap would effectively restrict Greenfield's ability to pre-sell grain, which is fundamental to its business model and cash flow management.

Greenfield requests that bona fide grain merchandising forward contracts entered into in the ordinary course of the Borrower's grain marketing business (i.e., contracts for the physical sale and delivery of grain to buyers) be expressly excluded from the definition of "commodity derivative contracts" and from the 80% hedging cap. Only financial hedging instruments — exchange-traded futures, options, and over-the-counter swap agreements — should be subject to the cap. This distinction between physical merchandising contracts and financial hedging instruments is well-established in the agricultural lending market and is reflected in the hedging covenants of comparable ABL facilities.

Timing of Measurement. The draft does not specify the measurement date or period for compliance with the 80% cap. Greenfield proposes that compliance be measured on a rolling twelve (12)-month forward basis as of each measurement date, rather than at any single point in time. This approach accommodates the fact that hedging positions are typically established over time as the crop year progresses, and that positions in the nearby delivery months will naturally be larger (as a percentage of anticipated production for those months) than positions in deferred months. A point-in-time measurement could produce misleading results, particularly during periods when the Borrower is actively rolling positions from one contract month to the next.

5.2 Interaction with Collateral

Greenfield requests clarification regarding the relationship between permitted hedging contracts and the ABL security interest. Specifically, the Credit Agreement should make clear that hedging gains and losses arising under permitted hedging contracts are not subject to a separate lien in favor of hedging counterparties that would prime or otherwise rank senior to the Lenders' security interest in the Borrower's assets under the ABL facility. To the extent that hedging counterparties are entitled to the benefit of the collateral securing the Credit Agreement (for example, as "Secured Hedging Counterparties" or similar defined term), such security interest should be pari passu with, and not senior to, the ABL lien.

In addition, Greenfield agrees that permitted hedging contracts should be entered into with counterparties that are Lenders or affiliates of Lenders under the Credit Agreement, or with other counterparties reasonably acceptable to the Administrative Agent. This requirement will help avoid intercreditor complications and ensure that hedging exposure is consolidated within the lending group to the extent practicable. Greenfield notes that its primary commodity brokerage relationship is with Heartland Commerce Bank's commodity derivatives desk, and Greenfield anticipates that the majority of its hedging activity will be conducted through HCB or its affiliates.

VI. Anti-Cash-Hoarding Provisions

6.1 Minimum Excess Availability Covenant

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

However, Greenfield objects to the remedy provision associated with this covenant. As drafted, Section 8.13(b) provides that any failure to maintain the minimum excess availability level constitutes an immediate Event of Default under Section 9.01(d) of the Credit Agreement, without any notice requirement or cure period. This treatment is excessively harsh and inconsistent with the purpose of the minimum availability covenant, which is to ensure the Borrower maintains a liquidity buffer — not to serve as a hair-trigger default mechanism.

Greenfield requests the following modifications:

(a) Cure Period. A failure to maintain minimum excess availability should not mature into an Event of Default until the expiration of a cure period of three (3) business days following the date on which the Borrower first fails to meet the minimum threshold. During such cure period, the Borrower may restore compliance by reducing outstanding Revolving Loans (through voluntary prepayment) or by depositing additional cash into the concentration account.

(b) No Acceleration During Cure Period. During the cure period, the Agent and Lenders should not be entitled to exercise remedies, accelerate obligations, or terminate commitments solely on the basis of the minimum excess availability breach.

This cure period is a modest and commercially reasonable protection. Greenfield's cash flows are inherently lumpy due to the seasonal nature of grain sales and input purchases, and a brief, inadvertent shortfall in excess availability — particularly during periods of rapid cash movement in and out of the operating accounts — should not result in an immediate default with no opportunity for remediation.

6.2 Cash Dominion / Springing Dominion Trigger

Section 6.15 of KBW's second draft imposes full cash dominion at all times. As drafted, all proceeds of collateral deposited into the Borrower's deposit accounts would be swept daily into a concentration account controlled by the Administrative Agent and applied to reduce outstanding Revolving Loans. This is the most restrictive form of cash management available in an ABL facility, and Greenfield submits that it is neither appropriate nor market for a facility of this type and size with a borrower of Greenfield's credit quality.

Greenfield proposes that cash dominion be on a springing basis, triggered only during a Trigger Period. Specifically:

(a) Trigger Period Definition. A "Trigger Period" would commence on any date on which Excess Availability falls below the greater of (x) 12.5% of the Borrowing Base as then in effect and (y) $10,000,000, and would continue until Excess Availability has been at or above such threshold for thirty (30) consecutive calendar days.

(b) Cash Dominion During Trigger Period. During a Trigger Period, the Agent would be entitled to activate the springing cash dominion provisions, including mandatory daily sweep of proceeds from the Borrower's deposit accounts into the Agent-controlled concentration account for application against outstanding Revolving Loans.

(c) Cash Management Outside Trigger Period. Outside a Trigger Period, the Borrower should retain control of its operating deposit accounts, subject to the existing deposit account control agreement ("DACA") framework. The DACAs would provide the Agent with a "springing" right to exercise dominion and control over the deposit accounts upon the occurrence of an Event of Default (or, as applicable, the commencement of a Trigger Period), but the Agent would not exercise such control during normal operating conditions.

Springing cash dominion is the prevailing market standard for ABL revolving credit facilities in the sub-$100 million range, and it is the structure reflected in the vast majority of precedent transactions that Calderwood & Harkness and KBW have negotiated in recent years. Full-time cash dominion is typically reserved for larger syndicated facilities, distressed credits, or borrowers with a demonstrated history of cash management issues — none of which circumstances apply here. Moreover, full-time cash dominion is poorly suited to the seasonal nature of Greenfield's agricultural business. Greenfield's cash flows are concentrated in the post-harvest period from October through January, when grain sales generate substantial cash receipts that are needed to fund operating expenses, pay down trade payables, and prepare for the upcoming crop year. Requiring daily sweep of all cash receipts during this period — when Greenfield may have significant excess availability and no credit concerns — would impose unnecessary operational constraints and transaction costs on the Borrower.

6.3 Deposit Account Requirements

Section 6.14 of KBW's second draft requires the Borrower and Guarantors to execute deposit account control agreements on all deposit accounts maintained by the Loan Parties, including accounts maintained at Prairie National Bank, N.A. ("PNB"), which is the Borrower's current primary operating bank and the agent and lender under the existing senior secured credit facility that will be refinanced with the proceeds of the HCB facility.

Greenfield does not object to the requirement to execute DACAs on all deposit accounts as a general matter. However, Greenfield notes the following practical considerations:

Upon the closing of the HCB facility and the refinancing of the existing PNB credit facility, Greenfield may elect to maintain certain operating accounts at PNB for operational convenience, continuity of banking relationships, and the practical logistics of transitioning automated payment systems, payroll processing, and vendor payment instructions. Execution of DACAs at PNB will require PNB's cooperation and consent as the depository bank, and PNB's willingness to execute a DACA in favor of HCB (as its successor lender) cannot be guaranteed prior to closing. PNB may also require modifications to its standard form DACA, which could necessitate additional negotiation.

Accordingly, Greenfield requests that execution of DACAs for accounts maintained at PNB be treated as a post-closing deliverable, to be completed within thirty (30) days after the closing date. At closing, Greenfield is prepared to (i) execute DACAs at Heartland Commerce Bank for all new accounts opened in connection with the HCB facility and (ii) deliver a schedule of all deposit accounts maintained at PNB, together with a written undertaking to use commercially reasonable efforts to obtain PNB's execution of DACAs within the 30-day post-closing period.

VII. Reporting Requirements During Trigger Period

Section 6.02(c) of KBW's second draft establishes the following reporting cadence during a Trigger Period: (i) weekly borrowing base certificates, to be delivered by the close of business on the first business day following the end of each calendar week, and (ii) daily cash receipts reporting, to be delivered by the close of business on each business day for the preceding business day's activity.

Greenfield accepts the requirement to deliver weekly borrowing base certificates during a Trigger Period and is prepared to comply with this obligation.

However, Greenfield objects to the requirement for daily cash receipts reporting as operationally burdensome and impracticable given the dispersed nature of Greenfield's operations. Greenfield operates fourteen (14) elevator sites and three (3) distribution centers across central and western Iowa and western Illinois. Cash receipts at these facilities include grain purchase settlements, crop-input sales, grain storage fees, and miscellaneous service revenues. Compiling accurate daily cash receipts data across seventeen (17) separate locations — many of which process transactions through local point-of-sale and accounting systems that are not integrated in real-time with Greenfield's central ERP system — would impose a significant administrative burden and divert operational and accounting staff resources from their primary responsibilities, particularly during the harvest season and peak grain marketing periods.

As an alternative, Greenfield proposes twice-weekly cash receipts reporting during a Trigger Period, with reports delivered on each Tuesday (covering the prior Thursday through Monday) and each Friday (covering the prior Tuesday through Thursday). This cadence provides the Agent with frequent, actionable visibility into cash flow activity while being operationally feasible for Greenfield's current systems and staffing levels.

Outside a Trigger Period, monthly borrowing base certificates — to be delivered by the twentieth (20th) calendar day of each month for the immediately preceding month-end — should be sufficient, which is consistent with the September 9 term sheet.

VIII. Other Open Items

8.1 Material Adverse Change/Effect Definition

Section 1.01 of KBW's second draft includes a broadly drafted definition of "Material Adverse Change" (which also serves as the definition of "Material Adverse Effect") covering any event, change, development, circumstance, or condition that has had, or would reasonably be expected to have, a material adverse effect on (i) the financial condition, operations, assets, liabilities, or prospects of the Borrower or any other Loan Party, (ii) the ability of the Loan Parties to perform their obligations under the Loan Documents, or (iii) the rights and remedies of the Agent and the Lenders under the Loan Documents.

Greenfield has two principal concerns with this definition as drafted.

First, Greenfield requests the deletion of "prospects" from the definition. The inclusion of "prospects" introduces a subjective and inherently speculative element into the MAC analysis. "Prospects" is forward-looking and unverifiable at any given point in time, and its inclusion invites disputes regarding the parties' differing views of the Borrower's future performance. Deletion of "prospects" from MAC definitions is well-established market practice, and we note that the term was not included in the MAC definition in the initial KBW draft.

Second, Greenfield requests the inclusion of the following customary carve-outs from the MAC definition, such that none of the following, in and of themselves, shall be deemed to constitute a Material Adverse Change:

(a) changes in general economic, financial, or capital market conditions in the United States or globally;

(b) changes in conditions generally affecting the agricultural industry in the United States, including changes in commodity supply and demand dynamics, weather patterns, and crop yields;

(c) changes in the prices of agricultural commodities, including but not limited to corn, soybeans, wheat, fertilizer, crop protection chemicals, and seed;

(d) changes in applicable law, regulation, or governmental policy, or changes in generally accepted accounting principles or the interpretation or application thereof;

(e) seasonal fluctuations in the financial condition, results of operations, or cash flows of the Borrower and the other Loan Parties occurring in the ordinary course of the Borrower's agricultural business;

in each case under clauses (a) through (e), to the extent that such changes or conditions do not disproportionately affect the Borrower and the other Loan Parties, taken as a whole, relative to other companies of similar size operating in the agricultural sector in the Midwestern United States. The "disproportionate impact" qualifier provides the Agent and Lenders with appropriate protection against company-specific risks while ensuring that industry-wide phenomena — which are endemic to the agricultural sector — do not inadvertently trigger MAC-related defaults or conditions.

8.2 Insurance Endorsement Timing

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

Greenfield's insurance broker, Redwood Insurance Group, Inc., and Greenfield's primary property and casualty carrier, Northstar Mutual Insurance Company, have indicated that processing the required endorsements — which include loss payee designations on property and inland marine policies, additional insured designations on general liability policies, and lender's loss payable endorsements on crop insurance — will require approximately fifteen (15) to twenty (20) business days from receipt of the final form endorsement language approved by the Agent. Given that the endorsement language has not yet been finalized or approved by the Agent, it is unlikely that the endorsements will be in hand by the anticipated closing date.

Greenfield requests that the delivery of insurance endorsements be treated as a post-closing deliverable, to be completed within thirty (30) days of the closing date. As a condition precedent to closing, Greenfield will deliver:

(i) copies of all existing insurance policies and certificates of insurance evidencing current coverage in the types and amounts required by the Credit Agreement; and

(ii) a broker's letter from Redwood Insurance Group, Inc. confirming that endorsement requests in favor of the Collateral Agent have been submitted to the applicable carriers and that such endorsements are expected to be issued within the ordinary processing timeline.

This approach is consistent with market practice for ABL closings, where insurance endorsements are routinely treated as post-closing items, and ensures that the closing is not delayed by administrative processing timelines outside the Borrower's control.

8.3 Representations — Bring-Down Mechanics

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

Double-Materiality Scrub. Certain representations in Article IV are already internally qualified by materiality or Material Adverse Effect — for example, Section 4.06 represents that "there has been no Material Adverse Change since December 31, 2021," and Section 4.08 represents that "Borrower is in compliance with all applicable laws in all material respects." Applying an additional "material respects" qualifier to the bring-down of these already-qualified representations creates a "double materiality" problem, whereby a representation that is false would nonetheless be deemed satisfied on a bring-down because the falsehood is not "material" under the bring-down standard, even though the underlying representation was intended to capture all breaches above the stated internal threshold. Greenfield proposes that (i) representations that are already qualified by materiality or Material Adverse Effect be brought down as true and correct in all respects (without any additional materiality overlay), and (ii) representations that are not internally qualified by materiality be brought down as true and correct in all material respects.

Date-Specific Representations. Certain representations by their terms speak only as of a specific date — for example, the representation in Section 4.04 regarding the accuracy of financial statements "as of and for the fiscal year ended December 31, 2021." Such representations should be brought down only as of their stated date, and not as of each subsequent borrowing date. This is a standard provision in credit agreements and simply confirms that a representation anchored to a specific date is not re-made on each borrowing date as though it referred to a different period.

IX. Summary of Key Requested Changes

For ease of reference, the following is a summary of the principal items requiring resolution before the Credit Agreement can be finalized:

\* \* \*

We request that KBW and HCB — and in particular Gregory Thorn and Allison Kuo — review the enclosed markup and this issues list at their earliest convenience. We believe that the parties have made substantial progress toward a final Credit Agreement and that the remaining open items, while significant, are capable of resolution through further constructive dialogue.

We propose scheduling a follow-up negotiation call during the week of October 17, 2022 or, if scheduling does not permit, the week of October 24, 2022, to discuss the open items identified herein. We note that the Pryor & Associates field examination is commencing on-site at Greenfield's Des Moines facility on October 17, and to the extent any of the foregoing issues (particularly those relating to field examination scope, borrowing base eligibility, and inventory valuation methodology) can be informed by or coordinated with the field examination process, we would welcome the opportunity to discuss that coordination on the call.

Greenfield's management team — including Patricia Calloway, General Counsel, and Nina Vasquez, Chief Financial Officer — are available to participate in a call during that period and are prepared to address any questions regarding Greenfield's operations, collateral, or business practices that may bear on the issues identified in this letter.

We are happy to provide additional information, data, or analysis on any of the foregoing items upon request. Please confirm receipt of this letter and the enclosed markup at your convenience.

Thank you for your continued attention to this matter. We look forward to working with you and the HCB team to bring this facility to a successful closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Sophie Tremblay Lead Associate 150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601 Telephone: (312) 555-7824

Email: stremblay@calderwoodharkness.com

cc: (via email)

Ian Blackwood, Partner — Calderwood & Harkness LLP Patricia Calloway, General Counsel — Greenfield Agricultural Partners LLC Nina Vasquez, Chief Financial Officer — Greenfield Agricultural Partners LLC Richard Whitfield, Partner — Kessler, Brandt & Whitfield LLP

Enclosure:

Redline of Credit Agreement — Calderwood & Harkness Second Markup (dated October 14, 2022) marked against Kessler, Brandt & Whitfield Second Draft (dated October 7, 2022)

No.	Issue	Greenfield Position
1.	Availability Reserves	Reduce initial availability reserve to $3,500,000 per the September 9 term sheet; add consultation rights and notice requirements for imposition of discretionary reserves; delete retroactive application provision.
2.	Crop-Input Inventory Eligibility	Revise eligibility exclusions: (a) permit in-transit and third-party warehouse inventory subject to collateral access agreements; (b) extend manufacture date cutoff from 12 months to 18 months; (c) extend slow-moving inventory threshold from 180 days to 270 days or exclude inventory held for planned seasonal use.
3.	Warehouse Receipt Valuation	Specify CBOT nearest delivery month as reference price and USDA county average basis as the basis determination methodology.
4.	Field Examination	Confirm $50,000 per-exam cap for routine examinations ($75,000 during Trigger Period); add Borrower consultation rights on examiner selection; require delivery of examination reports to Borrower within 10 business days.
5.	Commodity Hedging	Exclude ordinary-course grain merchandising forward contracts from the 80% hedging cap; define "anticipated production" based on most recent crop year actual production adjusted for current acreage changes; measure on rolling 12-month forward basis.
6.	Cash Dominion	Convert from full-time cash dominion to springing cash dominion, triggered only during a Trigger Period (Excess Availability below the greater of 12.5% of Borrowing Base or $10,000,000).
7.	Minimum Excess Availability	Add a 3-business-day cure period before a breach matures into an Event of Default; permit cure through voluntary prepayment of Revolving Loans.
8.	Reporting — Trigger Period	Replace daily cash receipts reporting with twice-weekly reporting (Tuesday and Friday) during a Trigger Period.
9.	MAC Definition	Delete "prospects"; add customary carve-outs for general economic conditions, agricultural industry conditions, commodity price changes, changes in law/GAAP, and seasonal fluctuations, subject to a disproportionate impact qualifier.
10.	Insurance Endorsements	Treat as post-closing deliverable (30 days after closing), with delivery of existing coverage evidence and Redwood Insurance Group broker's letter as condition precedent.
11.	Representation Bring-Down	Apply double-materiality scrub: representations already qualified by materiality to be true in all respects; unqualified representations to be true in all material respects. Date-specific representations to be brought down only as of their stated date.

PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601 Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com
October 14, 2022
Via Email and First Class Mail
Lauren Chisholm, Senior Associate Kessler, Brandt & Whitfield LLP 311 South Wacker Drive, Suite 5400 Chicago, Illinois 60606
Re: Second Markup of Credit Agreement — $80,000,000 Senior Secured Asset-Based Revolving Credit Facility among Greenfield Agricultural Partners LLC, as Borrower, Greenfield Holdings Corp., Greenfield Grain Storage LLC, and Greenfield Crop Inputs Inc., as Guarantors, the Lenders party thereto, and Heartland Commerce Bank, National Association, as Administrative Agent and Collateral Agent (C&H Markup of KBW Second Draft dated October 7, 2022)
Calderwood & Harkness Matter No. 1020-00001
Dear Lauren:
Enclosed with this letter is Calderwood & Harkness's second markup (redline) of the Credit Agreement, marked against Kessler, Brandt & Whitfield's second draft dated October 7, 2022. The markup reflects certain agreements reached during the negotiation call held on October 3, 2022 among Calderwood & Harkness (Ian Blackwood and the undersigned), Greenfield Agricultural Partners LLC and its affiliates (Patricia Calloway, General Counsel, and Nina Vasquez, Chief Financial Officer), Kessler, Brandt & Whitfield (Richard Whitfield and yourself), and Heartland Commerce Bank, National Association (Gregory Thorn, Managing Director — Agribusiness Lending, and Allison Kuo, Senior Vice President — Credit Administration). We appreciate the constructive dialogue on that call and the movement reflected in KBW's second draft on a number of issues.
The purpose of this issues list is to highlight the principal open items and areas of continued disagreement between the parties. It does not address every change reflected in our redline; rather, it focuses on those provisions that we believe require further discussion and resolution before the Credit Agreement can be finalized. We encourage your team and HCB to review the redline in its entirety, as certain conforming and technical changes are made throughout the document that are not separately addressed in this letter.
We set forth our comments below, organized by subject matter.
I. Borrowing Base — Availability Reserves
1.1 Quantum of Initial Availability Reserves
We acknowledge that KBW's second draft reduced the initial availability reserve from $5,000,000 to $4,000,000. We appreciate HCB's willingness to move on this point, and we understand that this reduction was intended to reflect the discussion on the October 3 call. However, Greenfield's position remains that the initial availability reserve should be set at $3,500,000, which is the figure expressly agreed upon in the revised term sheet dated September 9, 2022, executed by both HCB and Greenfield.
Greenfield's rationale for the $3,500,000 figure is straightforward. Greenfield's collateral pool is diversified across four distinct asset categories — eligible accounts receivable, crop inventory valued at net orderly liquidation value ("NOLV"), crop-input inventory (seed, fertilizer, and crop protection chemicals), and grain warehouse receipts — each of which is already subject to conservative advance rates that incorporate substantial cushion for liquidation risk. Specifically, the agreed advance rates are as follows:
•  Eligible Accounts Receivable: 85% of eligible accounts receivable;
•  Crop Inventory (NOLV): 65% of the net orderly liquidation value of eligible crop inventory;
•  Crop-Input Inventory: 70% of the lower of cost or market value of eligible crop-input inventory; and
•  Eligible Warehouse Receipts: 80% of market value (as discussed further in Section III below) of eligible grain warehouse receipts.
These advance rates, individually and in the aggregate, already build in a meaningful discount to the realizable value of the underlying collateral. The 15% haircut on accounts receivable, 35% haircut on crop inventory NOLV, 30% haircut on crop-input inventory, and 20% haircut on warehouse receipts collectively represent tens of millions of dollars of built-in loss absorption capacity. There is no commercial or credit justification for layering an additional $4,000,000 availability reserve on top of these haircuts. Doing so effectively double-counts liquidation risk in a manner that unnecessarily constrains Greenfield's borrowing capacity at the very time the facility is intended to support its seasonal working capital needs.
We respectfully request that KBW and HCB confirm $3,500,000 as the initial availability reserve, consistent with the executed term sheet. To the extent HCB has identified specific risk factors since the term sheet was executed that would justify a departure from the agreed figure, we ask that those factors be shared with Greenfield so that they may be discussed on the next call.
1.2 Agent's Discretionary Reserve Authority
KBW's second draft retains broad discretion for the Administrative Agent to impose additional availability reserves at any time without borrower consent and without any quantitative cap. As currently drafted, Section 2.01(b)(iii) permits the Agent to establish, increase, or modify reserves "in its sole discretion" based on "such factors as Agent deems relevant in the exercise of its credit judgment." This formulation is, in Greenfield's view, overly broad and provides no meaningful guardrails against arbitrary or excessive reserve imposition.
Greenfield recognizes that discretionary reserve authority is a standard feature of asset-based lending facilities and does not seek to eliminate it. However, Greenfield requests that the exercise of this authority be subject to the following conditions, which are consistent with market practice for facilities of this type and size:
(a) Standard of Review. The imposition or modification of any discretionary reserve should be subject to a standard of "reasonable determination exercised in good faith," rather than the current "sole discretion" standard. This is the prevailing standard in the ABL market and provides appropriate deference to the Agent's credit judgment while protecting the Borrower against arbitrary action.
(b) Prior Written Notice. The Agent should be required to provide prior written notice to the Borrower of any proposed new reserve or increase in an existing reserve, together with a reasonably detailed explanation of the factual basis and methodology supporting the reserve determination. Transparency in reserve-setting is essential to Greenfield's ability to manage its liquidity and plan its borrowing activity.
(c) Consultation Period. Before any new or increased discretionary reserve becomes effective, there should be a consultation period of not less than ten (10) business days during which the Borrower may discuss the proposed reserve with the Agent, provide additional information or analysis, and seek to resolve any disagreement regarding the appropriateness or quantum of the reserve. This consultation right does not give Greenfield a veto over reserves, but it does ensure a good-faith dialogue before the Borrower's availability is reduced.
(d) Exigent Circumstances Exception. Greenfield acknowledges that in exigent circumstances — for example, a material deterioration in collateral quality, a significant casualty loss, or the discovery of a material deficiency in a field examination — the Agent may need to impose a reserve on an expedited basis. In such circumstances, the ten-business-day consultation period may be shortened or waived, provided that the Agent promptly notifies the Borrower of the reserve and the basis therefor and engages in consultation as soon as reasonably practicable thereafter.
In addition, Greenfield strongly opposes the provision in Section 2.01(b)(iv) of KBW's second draft that purports to permit the retroactive application of reserves to previously calculated and delivered borrowing base certificates. This provision would create uncertainty regarding the Borrower's compliance with borrowing base limitations at the time borrowings were made and, in extreme cases, could result in a retroactive overadvance through no fault of the Borrower. Reserves should apply prospectively only, effective as of the date specified in the Agent's notice (subject to the consultation period described above).
II. Borrowing Base — Advance Rates on Crop-Input Inventory
2.1 Crop-Input Inventory Advance Rate and Eligibility Criteria
KBW's second draft maintains a 70% advance rate for eligible crop-input inventory (encompassing seed, fertilizer, and crop protection chemicals), applied against the lower of cost or market value. We confirm that the 70% advance rate is consistent with the September 9, 2022 revised term sheet, and Greenfield does not object to this rate.
However, Greenfield has significant concerns with several newly added eligibility exclusions set forth in Section 2.07(c) of KBW's second draft. These exclusions were not contemplated or discussed during the term sheet negotiations, were not included in KBW's initial draft, and appear for the first time in the second draft. Collectively, they would materially and adversely reduce the pool of eligible crop-input inventory and, during critical pre-plant and early growing season periods, could result in a borrowing base reduction of an estimated $3,000,000 to $5,000,000 at the trough — precisely the period when Greenfield's seasonal working capital needs are greatest. Greenfield's specific objections are as follows:
Exclusion of Crop-Input Inventory Held at Third-Party Warehouses or In Transit. Section 2.07(c)(vi) of the second draft excludes from eligibility all crop-input inventory that is "held at any location not owned or leased by Borrower or any Guarantor, including, without limitation, inventory held by third-party warehousemen, logistics providers, or common carriers, and inventory in transit." This exclusion is commercially unreasonable given the realities of Greenfield's supply chain. A significant portion of Greenfield's seasonal fertilizer and crop protection chemical purchases are shipped directly from manufacturers and wholesale distributors to third-party logistics facilities or are in transit during the peak pre-plant season from March through May of each crop year. Greenfield utilizes bonded third-party warehouse facilities operated by established logistics providers, including Tri-State Agricultural Logistics, Inc. and Midwest Grain & Supply Co., to stage inventory prior to distribution to its elevator sites and distribution centers. This is standard practice in the agricultural inputs industry and does not diminish the value or recoverability of the inventory.
Greenfield proposes that crop-input inventory held at third-party warehouses be eligible, provided that (i) the applicable warehouse operator has entered into a collateral access agreement or warehouseman's waiver in form and substance reasonably acceptable to Agent, (ii) the Borrower maintains insurance covering such inventory in the amounts and with the endorsements required by the Credit Agreement, and (iii) the inventory is segregated and identifiable. With respect to inventory in transit, Greenfield proposes eligibility provided that the Borrower holds valid bills of lading or shipping documentation evidencing ownership and the goods are insured.
Exclusion of Crop-Input Inventory Older than 12 Months from Date of Manufacture. Section 2.07(c)(viii) excludes crop-input inventory where the date of manufacture is more than twelve (12) months prior to the date of determination. While Greenfield appreciates HCB's interest in ensuring the quality and usability of pledged inventory, the twelve-month cutoff is not aligned with the actual shelf life and usability of the relevant products. Certain crop protection chemicals and seed treatments commonly utilized by Greenfield have manufacturer-certified shelf lives of eighteen (18) to twenty-four (24) months. A blanket twelve-month exclusion would cause perfectly usable, commercially valuable inventory to fall out of the borrowing base well before the end of its useful life. Greenfield proposes increasing this threshold to eighteen (18) months from the date of manufacture, or alternatively, providing that inventory shall not be excluded solely on the basis of age so long as it remains within the manufacturer's stated shelf life as set forth in the applicable product specifications or material safety data sheets.
Exclusion of Slow-Moving Inventory. Section 2.07(c)(ix) excludes any crop-input inventory that has not been sold within one hundred eighty (180) days of the date of acquisition by the Borrower. This exclusion fundamentally misapprehends Greenfield's business model and seasonal purchasing cycle. Greenfield's standard practice — and the standard practice throughout the agricultural inputs industry — is to purchase crop inputs during the off-season (typically September through February) in order to take advantage of early-order discounts and ensure product availability for the spring planting season (March through June). Under this business model, it is entirely ordinary and expected that crop-input inventory acquired in September or October will not be sold or applied until the following April or May — a period of approximately 180 to 240 days. The 180-day slow-moving threshold would cause substantial volumes of perfectly saleable, current-season inventory to be excluded from the borrowing base precisely at the point when Greenfield's borrowing needs are greatest.
Greenfield requests that the slow-moving inventory exclusion threshold be increased to two hundred seventy (270) days from the date of acquisition, or alternatively, that inventory held for planned seasonal use as reflected in the Borrower's current crop plan delivered to the Agent not be treated as "slow-moving" for purposes of this exclusion, regardless of the length of the holding period.
2.2 Valuation Methodology for Crop-Input Inventory
Greenfield requests clarification on the methodology for determining "market value" for purposes of the lower-of-cost-or-market-value test applicable to crop-input inventory. The term "market value" is used throughout KBW's second draft without definition in the context of crop-input inventory (as distinguished from the warehouse receipt valuation methodology, which is addressed in Section III below). Specifically, it is unclear whether "market value" is intended to be determined by reference to (i) the current list price published by the applicable manufacturer or supplier, (ii) the most recent actual purchase price paid by the Borrower, (iii) an independent third-party appraisal, or (iv) some other methodology.
Greenfield proposes that "market value" for crop-input inventory be defined as the most recent wholesale purchase price paid by the Borrower to its primary suppliers for the applicable product, unless the Agent has a reasonable basis to conclude that a material decline in the value of such inventory has occurred since the date of purchase, in which case the Agent may require an updated valuation or appraisal. This approach is objective, readily verifiable against Borrower's purchase records and supplier invoices, and avoids the uncertainty and expense of periodic independent appraisals for inputs that are commodity-like products with established market pricing.
III. Borrowing Base — Warehouse Receipt Valuation
3.1 CBOT Settlement Price Reference and Basis Determination
KBW's second draft now specifies that eligible grain warehouse receipts are valued at 80% of "market value," defined as the Chicago Board of Trade ("CBOT") settlement price less "applicable basis." Greenfield accepts this valuation methodology in principle and views the 80% advance rate and the CBOT-minus-basis framework as commercially reasonable for the grain assets in question.
However, the definition as drafted lacks sufficient specificity on two critical parameters that will have a material impact on the calculated borrowing base:
CBOT Contract Month. The draft does not specify which CBOT futures contract month is to be used as the reference price. CBOT grain futures trade across multiple delivery months (e.g., for corn: March, May, July, September, and December), and the settlement price can vary meaningfully from one contract month to the next, particularly during periods of market contango or backwardation. Greenfield requests that the definition specify that the applicable CBOT settlement price is the settlement price for the nearest active delivery month for the applicable grain commodity as of the date of determination. This approach provides the most liquid and transparent reference price and is consistent with prevailing industry practice for grain inventory valuation.
Basis Determination Methodology. "Applicable basis" — the differential between the CBOT futures price and the local cash price at or near the point of delivery — is a critical component of the valuation formula, but the draft does not specify how basis is to be determined. Basis levels vary by geographic location, grain quality, delivery point, and time of year, and can range from positive to negative depending on local supply and demand conditions. Greenfield is concerned that leaving basis determination to the Agent's discretionary judgment could introduce unnecessary volatility and unpredictability into the borrowing base calculation.
Greenfield proposes that "applicable basis" be determined by reference to county average basis data as published by the USDA Agricultural Marketing Service (or, if such data is not available for the relevant county, the nearest available reporting region), updated monthly. This provides an objective, publicly available, and independently verifiable data source that reflects actual local market conditions. In the alternative, if HCB prefers a different basis source, Greenfield is open to discussing a mutually agreed-upon methodology, but the key principle is that basis should be determined by reference to an objective, verifiable data source rather than Agent discretion.
IV. Field Examination Scheduling and Cost Allocation
4.1 Frequency and Cost Cap
KBW's second draft provides for field examinations conducted by Pryor & Associates LLC (or such other firm as the Agent may designate in its sole discretion) at the Borrower's sole expense. The draft imposes no limitation on the frequency of examinations outside a Trigger Period and no cap on examination costs.
Greenfield accepts two (2) field examinations per fiscal year at Borrower expense during periods when no Trigger Period is in effect, which is consistent with the term sheet. Greenfield further accepts that additional examinations may be conducted at Borrower expense during a Trigger Period.
However, Greenfield insists on the following protections with respect to field examination costs and logistics:
(a) Per-Exam Fee Cap — Routine Examinations. The aggregate fees and out-of-pocket expenses payable by Borrower for each routine annual field examination (i.e., examinations conducted outside a Trigger Period) shall not exceed $50,000 per examination, inclusive of examiner fees, travel, lodging, and related expenses. This cap is consistent with market practice and provides cost certainty to the Borrower while permitting a thorough examination of Greenfield's operations.
(b) Per-Exam Fee Cap — Trigger Period Examinations. Additional field examinations conducted during a Trigger Period shall be subject to a per-examination cap of $75,000, which reflects the potentially broader scope and more intensive nature of such examinations.
(c) Advance Notice and Scheduling Coordination. The Agent shall provide the Borrower with not less than fifteen (15) business days' prior written notice of any scheduled field examination. The Agent and the field examiner shall coordinate scheduling with the Borrower's operations team, and in particular with Raymond Foss, Vice President of Operations, to minimize disruption to elevator, warehouse, and distribution center operations. Greenfield operates fourteen (14) elevator sites and three (3) distribution centers across Iowa and western Illinois, and harvest-season operations (September through November) are particularly sensitive to disruptions.
4.2 Coordination with Borrowing Base Certificate Delivery
We note that Pryor & Associates LLC is scheduled to commence its initial on-site field examination on October 17, 2022, beginning at Greenfield's Des Moines headquarters facility and thereafter visiting select elevator sites in Polk, Story, and marshall counties. This examination is expected to take approximately ten (10) to twelve (12) business days to complete, with the final written report to follow.
Given the anticipated closing timeline for the facility, it is important that the field examination report — and in particular the NOLV appraisal values for crop inventory that will be incorporated into the borrowing base — be completed and delivered on a timeline that permits the initial borrowing base certificate to be prepared and delivered at or promptly following closing. Greenfield requests that the Credit Agreement expressly align the field examination report delivery timeline with the borrowing base certificate delivery schedule to avoid any gap or delay in the initial determination of availability.
Additionally, Greenfield requests that Section 6.10 of the Credit Agreement be revised to expressly provide that the Borrower shall receive a copy of each field examination report within ten (10) business days of the field examiner's completion of such report. Access to examination findings is critical to the Borrower's ability to respond to any identified issues, update its internal controls, and prepare accurate borrowing base certificates. This is a routine borrower right in ABL transactions, and we do not believe it should be controversial.
4.3 Selection of Field Examiner
As noted above, KBW's second draft gives the Agent sole discretion to select the field examination firm. While Greenfield acknowledges that the Agent has a legitimate interest in selecting a qualified, independent examiner, the appraisal and examination of agricultural inventory — including grain stored in country elevators, crop protection chemicals in inventory, and fertilizer in bulk storage — requires specialized knowledge that not all general-purpose field examination firms possess. The accuracy of the NOLV and market value determinations that underpin the borrowing base depends directly on the examiner's familiarity with agricultural commodities, storage conditions, and liquidation markets.
Greenfield requests reasonable consultation rights (but not approval or veto rights) regarding the selection of the field examination firm. Specifically, if the Agent proposes to replace Pryor & Associates LLC with an alternative firm, the Agent should notify the Borrower of the proposed replacement, provide the Borrower with information regarding the proposed firm's qualifications and experience with agricultural inventory appraisals, and afford the Borrower a reasonable opportunity to comment before the selection is finalized.
V. Commodity Hedging Negative Pledge
5.1 Scope of Restriction
Section 7.07 of KBW's second draft prohibits the Borrower and Guarantors from entering into commodity hedging transactions in excess of 80% of "anticipated production" without the prior written consent of the Administrative Agent. Greenfield accepts the 80% cap as consistent with the September 9 term sheet and as a reasonable limit on speculative hedging activity. However, Greenfield has several substantive objections to the hedging covenant as currently drafted, each of which we address in turn.
Definition of "Anticipated Production." The draft does not define or specify the methodology for calculating "anticipated production" for purposes of the 80% cap. This omission creates significant ambiguity and the potential for disputes regarding compliance. Anticipated production can vary substantially depending on the baseline used (e.g., prior year actual production, five-year average, budgeted production for the current crop year) and whether adjustments are made for changes in planted acreage, crop mix, or expected yields. Greenfield proposes that "anticipated production" be defined as the most recent completed crop year's actual production for each applicable commodity, adjusted for any changes in planted acreage reflected in the current crop plan delivered by the Borrower to the Agent pursuant to the reporting requirements of the Credit Agreement. This approach uses verifiable historical data as the starting point and adjusts for known changes in the current year's operations, providing both objectivity and relevance.
Covered Instruments — Exclusion of Ordinary-Course Forward Sales. The draft defines the scope of the hedging restriction to cover all "commodity derivative contracts," a term defined to include "futures contracts, options on futures contracts, swap agreements, forward contracts, and any other agreements or arrangements designed to hedge or manage the risk of fluctuations in commodity prices." This definition is problematic because it captures bona fide grain merchandising forward contracts — that is, forward sales contracts entered into by Greenfield in the ordinary course of its grain merchandising business with grain buyers, ethanol plants, feed mills, and other end users. These forward contracts are not speculative hedging instruments; they are core revenue-generating transactions through which Greenfield markets and sells its grain production and grain purchased from third-party producers. Treating forward sales as hedging positions subject to the 80% cap would effectively restrict Greenfield's ability to pre-sell grain, which is fundamental to its business model and cash flow management.
Greenfield requests that bona fide grain merchandising forward contracts entered into in the ordinary course of the Borrower's grain marketing business (i.e., contracts for the physical sale and delivery of grain to buyers) be expressly excluded from the definition of "commodity derivative contracts" and from the 80% hedging cap. Only financial hedging instruments — exchange-traded futures, options, and over-the-counter swap agreements — should be subject to the cap. This distinction between physical merchandising contracts and financial hedging instruments is well-established in the agricultural lending market and is reflected in the hedging covenants of comparable ABL facilities.
Timing of Measurement. The draft does not specify the measurement date or period for compliance with the 80% cap. Greenfield proposes that compliance be measured on a rolling twelve (12)-month forward basis as of each measurement date, rather than at any single point in time. This approach accommodates the fact that hedging positions are typically established over time as the crop year progresses, and that positions in the nearby delivery months will naturally be larger (as a percentage of anticipated production for those months) than positions in deferred months. A point-in-time measurement could produce misleading results, particularly during periods when the Borrower is actively rolling positions from one contract month to the next.
5.2 Interaction with Collateral
Greenfield requests clarification regarding the relationship between permitted hedging contracts and the ABL security interest. Specifically, the Credit Agreement should make clear that hedging gains and losses arising under permitted hedging contracts are not subject to a separate lien in favor of hedging counterparties that would prime or otherwise rank senior to the Lenders' security interest in the Borrower's assets under the ABL facility. To the extent that hedging counterparties are entitled to the benefit of the collateral securing the Credit Agreement (for example, as "Secured Hedging Counterparties" or similar defined term), such security interest should be pari passu with, and not senior to, the ABL lien.
In addition, Greenfield agrees that permitted hedging contracts should be entered into with counterparties that are Lenders or affiliates of Lenders under the Credit Agreement, or with other counterparties reasonably acceptable to the Administrative Agent. This requirement will help avoid intercreditor complications and ensure that hedging exposure is consolidated within the lending group to the extent practicable. Greenfield notes that its primary commodity brokerage relationship is with Heartland Commerce Bank's commodity derivatives desk, and Greenfield anticipates that the majority of its hedging activity will be conducted through HCB or its affiliates.
VI. Anti-Cash-Hoarding Provisions
6.1 Minimum Excess Availability Covenant
Section 8.13 of KBW's second draft includes a minimum excess availability covenant requiring the Borrower to maintain Excess Availability (defined as the lesser of the Borrowing Base and the Aggregate Commitment, less the sum of outstanding Revolving Loans and outstanding Letter of Credit Obligations) of not less than $5,000,000 at all times, tested on a daily basis. Greenfield accepts the $5,000,000 threshold and the daily testing frequency as reasonable for a facility of this size.
However, Greenfield objects to the remedy provision associated with this covenant. As drafted, Section 8.13(b) provides that any failure to maintain the minimum excess availability level constitutes an immediate Event of Default under Section 9.01(d) of the Credit Agreement, without any notice requirement or cure period. This treatment is excessively harsh and inconsistent with the purpose of the minimum availability covenant, which is to ensure the Borrower maintains a liquidity buffer — not to serve as a hair-trigger default mechanism.
Greenfield requests the following modifications:
(a) Cure Period. A failure to maintain minimum excess availability should not mature into an Event of Default until the expiration of a cure period of three (3) business days following the date on which the Borrower first fails to meet the minimum threshold. During such cure period, the Borrower may restore compliance by reducing outstanding Revolving Loans (through voluntary prepayment) or by depositing additional cash into the concentration account.
(b) No Acceleration During Cure Period. During the cure period, the Agent and Lenders should not be entitled to exercise remedies, accelerate obligations, or terminate commitments solely on the basis of the minimum excess availability breach.
This cure period is a modest and commercially reasonable protection. Greenfield's cash flows are inherently lumpy due to the seasonal nature of grain sales and input purchases, and a brief, inadvertent shortfall in excess availability — particularly during periods of rapid cash movement in and out of the operating accounts — should not result in an immediate default with no opportunity for remediation.
6.2 Cash Dominion / Springing Dominion Trigger
Section 6.15 of KBW's second draft imposes full cash dominion at all times. As drafted, all proceeds of collateral deposited into the Borrower's deposit accounts would be swept daily into a concentration account controlled by the Administrative Agent and applied to reduce outstanding Revolving Loans. This is the most restrictive form of cash management available in an ABL facility, and Greenfield submits that it is neither appropriate nor market for a facility of this type and size with a borrower of Greenfield's credit quality.
Greenfield proposes that cash dominion be on a springing basis, triggered only during a Trigger Period. Specifically:
(a) Trigger Period Definition. A "Trigger Period" would commence on any date on which Excess Availability falls below the greater of (x) 12.5% of the Borrowing Base as then in effect and (y) $10,000,000, and would continue until Excess Availability has been at or above such threshold for thirty (30) consecutive calendar days.
(b) Cash Dominion During Trigger Period. During a Trigger Period, the Agent would be entitled to activate the springing cash dominion provisions, including mandatory daily sweep of proceeds from the Borrower's deposit accounts into the Agent-controlled concentration account for application against outstanding Revolving Loans.
(c) Cash Management Outside Trigger Period. Outside a Trigger Period, the Borrower should retain control of its operating deposit accounts, subject to the existing deposit account control agreement ("DACA") framework. The DACAs would provide the Agent with a "springing" right to exercise dominion and control over the deposit accounts upon the occurrence of an Event of Default (or, as applicable, the commencement of a Trigger Period), but the Agent would not exercise such control during normal operating conditions.
Springing cash dominion is the prevailing market standard for ABL revolving credit facilities in the sub-$100 million range, and it is the structure reflected in the vast majority of precedent transactions that Calderwood & Harkness and KBW have negotiated in recent years. Full-time cash dominion is typically reserved for larger syndicated facilities, distressed credits, or borrowers with a demonstrated history of cash management issues — none of which circumstances apply here. Moreover, full-time cash dominion is poorly suited to the seasonal nature of Greenfield's agricultural business. Greenfield's cash flows are concentrated in the post-harvest period from October through January, when grain sales generate substantial cash receipts that are needed to fund operating expenses, pay down trade payables, and prepare for the upcoming crop year. Requiring daily sweep of all cash receipts during this period — when Greenfield may have significant excess availability and no credit concerns — would impose unnecessary operational constraints and transaction costs on the Borrower.
6.3 Deposit Account Requirements
Section 6.14 of KBW's second draft requires the Borrower and Guarantors to execute deposit account control agreements on all deposit accounts maintained by the Loan Parties, including accounts maintained at Prairie National Bank, N.A. ("PNB"), which is the Borrower's current primary operating bank and the agent and lender under the existing senior secured credit facility that will be refinanced with the proceeds of the HCB facility.
Greenfield does not object to the requirement to execute DACAs on all deposit accounts as a general matter. However, Greenfield notes the following practical considerations:
Upon the closing of the HCB facility and the refinancing of the existing PNB credit facility, Greenfield may elect to maintain certain operating accounts at PNB for operational convenience, continuity of banking relationships, and the practical logistics of transitioning automated payment systems, payroll processing, and vendor payment instructions. Execution of DACAs at PNB will require PNB's cooperation and consent as the depository bank, and PNB's willingness to execute a DACA in favor of HCB (as its successor lender) cannot be guaranteed prior to closing. PNB may also require modifications to its standard form DACA, which could necessitate additional negotiation.
Accordingly, Greenfield requests that execution of DACAs for accounts maintained at PNB be treated as a post-closing deliverable, to be completed within thirty (30) days after the closing date. At closing, Greenfield is prepared to (i) execute DACAs at Heartland Commerce Bank for all new accounts opened in connection with the HCB facility and (ii) deliver a schedule of all deposit accounts maintained at PNB, together with a written undertaking to use commercially reasonable efforts to obtain PNB's execution of DACAs within the 30-day post-closing period.
VII. Reporting Requirements During Trigger Period
Section 6.02(c) of KBW's second draft establishes the following reporting cadence during a Trigger Period: (i) weekly borrowing base certificates, to be delivered by the close of business on the first business day following the end of each calendar week, and (ii) daily cash receipts reporting, to be delivered by the close of business on each business day for the preceding business day's activity.
Greenfield accepts the requirement to deliver weekly borrowing base certificates during a Trigger Period and is prepared to comply with this obligation.
However, Greenfield objects to the requirement for daily cash receipts reporting as operationally burdensome and impracticable given the dispersed nature of Greenfield's operations. Greenfield operates fourteen (14) elevator sites and three (3) distribution centers across central and western Iowa and western Illinois. Cash receipts at these facilities include grain purchase settlements, crop-input sales, grain storage fees, and miscellaneous service revenues. Compiling accurate daily cash receipts data across seventeen (17) separate locations — many of which process transactions through local point-of-sale and accounting systems that are not integrated in real-time with Greenfield's central ERP system — would impose a significant administrative burden and divert operational and accounting staff resources from their primary responsibilities, particularly during the harvest season and peak grain marketing periods.
As an alternative, Greenfield proposes twice-weekly cash receipts reporting during a Trigger Period, with reports delivered on each Tuesday (covering the prior Thursday through Monday) and each Friday (covering the prior Tuesday through Thursday). This cadence provides the Agent with frequent, actionable visibility into cash flow activity while being operationally feasible for Greenfield's current systems and staffing levels.
Outside a Trigger Period, monthly borrowing base certificates — to be delivered by the twentieth (20th) calendar day of each month for the immediately preceding month-end — should be sufficient, which is consistent with the September 9 term sheet.
VIII. Other Open Items
8.1 Material Adverse Change/Effect Definition
Section 1.01 of KBW's second draft includes a broadly drafted definition of "Material Adverse Change" (which also serves as the definition of "Material Adverse Effect") covering any event, change, development, circumstance, or condition that has had, or would reasonably be expected to have, a material adverse effect on (i) the financial condition, operations, assets, liabilities, or prospects of the Borrower or any other Loan Party, (ii) the ability of the Loan Parties to perform their obligations under the Loan Documents, or (iii) the rights and remedies of the Agent and the Lenders under the Loan Documents.
Greenfield has two principal concerns with this definition as drafted.
First, Greenfield requests the deletion of "prospects" from the definition. The inclusion of "prospects" introduces a subjective and inherently speculative element into the MAC analysis. "Prospects" is forward-looking and unverifiable at any given point in time, and its inclusion invites disputes regarding the parties' differing views of the Borrower's future performance. Deletion of "prospects" from MAC definitions is well-established market practice, and we note that the term was not included in the MAC definition in the initial KBW draft.
Second, Greenfield requests the inclusion of the following customary carve-outs from the MAC definition, such that none of the following, in and of themselves, shall be deemed to constitute a Material Adverse Change:
(a) changes in general economic, financial, or capital market conditions in the United States or globally;
(b) changes in conditions generally affecting the agricultural industry in the United States, including changes in commodity supply and demand dynamics, weather patterns, and crop yields;
(c) changes in the prices of agricultural commodities, including but not limited to corn, soybeans, wheat, fertilizer, crop protection chemicals, and seed;
(d) changes in applicable law, regulation, or governmental policy, or changes in generally accepted accounting principles or the interpretation or application thereof;
(e) seasonal fluctuations in the financial condition, results of operations, or cash flows of the Borrower and the other Loan Parties occurring in the ordinary course of the Borrower's agricultural business;
in each case under clauses (a) through (e), to the extent that such changes or conditions do not disproportionately affect the Borrower and the other Loan Parties, taken as a whole, relative to other companies of similar size operating in the agricultural sector in the Midwestern United States. The "disproportionate impact" qualifier provides the Agent and Lenders with appropriate protection against company-specific risks while ensuring that industry-wide phenomena — which are endemic to the agricultural sector — do not inadvertently trigger MAC-related defaults or conditions.
8.2 Insurance Endorsement Timing
Section 5.01(q) of KBW's second draft requires, as a condition precedent to closing, the delivery of all insurance endorsements designating the Collateral Agent as loss payee and additional insured on all required insurance policies maintained by the Loan Parties. While Greenfield acknowledges the importance of this collateral protection requirement, the practical reality is that obtaining the necessary endorsements is subject to the processing timelines of Greenfield's insurance broker and carrier.
Greenfield's insurance broker, Redwood Insurance Group, Inc., and Greenfield's primary property and casualty carrier, Northstar Mutual Insurance Company, have indicated that processing the required endorsements — which include loss payee designations on property and inland marine policies, additional insured designations on general liability policies, and lender's loss payable endorsements on crop insurance — will require approximately fifteen (15) to twenty (20) business days from receipt of the final form endorsement language approved by the Agent. Given that the endorsement language has not yet been finalized or approved by the Agent, it is unlikely that the endorsements will be in hand by the anticipated closing date.
Greenfield requests that the delivery of insurance endorsements be treated as a post-closing deliverable, to be completed within thirty (30) days of the closing date. As a condition precedent to closing, Greenfield will deliver:
(i) copies of all existing insurance policies and certificates of insurance evidencing current coverage in the types and amounts required by the Credit Agreement; and
(ii) a broker's letter from Redwood Insurance Group, Inc. confirming that endorsement requests in favor of the Collateral Agent have been submitted to the applicable carriers and that such endorsements are expected to be issued within the ordinary processing timeline.
This approach is consistent with market practice for ABL closings, where insurance endorsements are routinely treated as post-closing items, and ensures that the closing is not delayed by administrative processing timelines outside the Borrower's control.
8.3 Representations — Bring-Down Mechanics
Section 5.02(a) of KBW's second draft requires that all representations and warranties set forth in Article IV of the Credit Agreement be "true and correct in all material respects" as of each borrowing date (with the same force and effect as though made on and as of such date). Greenfield requests the following modifications to this bring-down standard, which are consistent with established market practice:
Double-Materiality Scrub. Certain representations in Article IV are already internally qualified by materiality or Material Adverse Effect — for example, Section 4.06 represents that "there has been no Material Adverse Change since December 31, 2021," and Section 4.08 represents that "Borrower is in compliance with all applicable laws in all material respects." Applying an additional "material respects" qualifier to the bring-down of these already-qualified representations creates a "double materiality" problem, whereby a representation that is false would nonetheless be deemed satisfied on a bring-down because the falsehood is not "material" under the bring-down standard, even though the underlying representation was intended to capture all breaches above the stated internal threshold. Greenfield proposes that (i) representations that are already qualified by materiality or Material Adverse Effect be brought down as true and correct in all respects (without any additional materiality overlay), and (ii) representations that are not internally qualified by materiality be brought down as true and correct in all material respects.
Date-Specific Representations. Certain representations by their terms speak only as of a specific date — for example, the representation in Section 4.04 regarding the accuracy of financial statements "as of and for the fiscal year ended December 31, 2021." Such representations should be brought down only as of their stated date, and not as of each subsequent borrowing date. This is a standard provision in credit agreements and simply confirms that a representation anchored to a specific date is not re-made on each borrowing date as though it referred to a different period.
IX. Summary of Key Requested Changes
For ease of reference, the following is a summary of the principal items requiring resolution before the Credit Agreement can be finalized:
\* \* \*
We request that KBW and HCB — and in particular Gregory Thorn and Allison Kuo — review the enclosed markup and this issues list at their earliest convenience. We believe that the parties have made substantial progress toward a final Credit Agreement and that the remaining open items, while significant, are capable of resolution through further constructive dialogue.
We propose scheduling a follow-up negotiation call during the week of October 17, 2022 or, if scheduling does not permit, the week of October 24, 2022, to discuss the open items identified herein. We note that the Pryor & Associates field examination is commencing on-site at Greenfield's Des Moines facility on October 17, and to the extent any of the foregoing issues (particularly those relating to field examination scope, borrowing base eligibility, and inventory valuation methodology) can be informed by or coordinated with the field examination process, we would welcome the opportunity to discuss that coordination on the call.
Greenfield's management team — including Patricia Calloway, General Counsel, and Nina Vasquez, Chief Financial Officer — are available to participate in a call during that period and are prepared to address any questions regarding Greenfield's operations, collateral, or business practices that may bear on the issues identified in this letter.
We are happy to provide additional information, data, or analysis on any of the foregoing items upon request. Please confirm receipt of this letter and the enclosed markup at your convenience.
Thank you for your continued attention to this matter. We look forward to working with you and the HCB team to bring this facility to a successful closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Sophie Tremblay Lead Associate 150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601 Telephone: (312) 555-7824
Email: stremblay@calderwoodharkness.com
cc: (via email)
Ian Blackwood, Partner — Calderwood & Harkness LLP Patricia Calloway, General Counsel — Greenfield Agricultural Partners LLC Nina Vasquez, Chief Financial Officer — Greenfield Agricultural Partners LLC Richard Whitfield, Partner — Kessler, Brandt & Whitfield LLP
Enclosure:
Redline of Credit Agreement — Calderwood & Harkness Second Markup (dated October 14, 2022) marked against Kessler, Brandt & Whitfield Second Draft (dated October 7, 2022)
No. | Issue | Greenfield Position
1. | Availability Reserves | Reduce initial availability reserve to $3,500,000 per the September 9 term sheet; add consultation rights and notice requirements for imposition of discretionary reserves; delete retroactive application provision.
2. | Crop-Input Inventory Eligibility | Revise eligibility exclusions: (a) permit in-transit and third-party warehouse inventory subject to collateral access agreements; (b) extend manufacture date cutoff from 12 months to 18 months; (c) extend slow-moving inventory threshold from 180 days to 270 days or exclude inventory held for planned seasonal use.
3. | Warehouse Receipt Valuation | Specify CBOT nearest delivery month as reference price and USDA county average basis as the basis determination methodology.
4. | Field Examination | Confirm $50,000 per-exam cap for routine examinations ($75,000 during Trigger Period); add Borrower consultation rights on examiner selection; require delivery of examination reports to Borrower within 10 business days.
5. | Commodity Hedging | Exclude ordinary-course grain merchandising forward contracts from the 80% hedging cap; define "anticipated production" based on most recent crop year actual production adjusted for current acreage changes; measure on rolling 12-month forward basis.
6. | Cash Dominion | Convert from full-time cash dominion to springing cash dominion, triggered only during a Trigger Period (Excess Availability below the greater of 12.5% of Borrowing Base or $10,000,000).
7. | Minimum Excess Availability | Add a 3-business-day cure period before a breach matures into an Event of Default; permit cure through voluntary prepayment of Revolving Loans.
8. | Reporting — Trigger Period | Replace daily cash receipts reporting with twice-weekly reporting (Tuesday and Friday) during a Trigger Period.
9. | MAC Definition | Delete "prospects"; add customary carve-outs for general economic conditions, agricultural industry conditions, commodity price changes, changes in law/GAAP, and seasonal fluctuations, subject to a disproportionate impact qualifier.
10. | Insurance Endorsements | Treat as post-closing deliverable (30 days after closing), with delivery of existing coverage evidence and Redwood Insurance Group broker's letter as condition precedent.
11. | Representation Bring-Down | Apply double-materiality scrub: representations already qualified by materiality to be true in all respects; unqualified representations to be true in all material respects. Date-specific representations to be brought down only as of their stated date.

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