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CALDERWOOD & HARKNESS LLP

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

INTERNAL MEMORANDUM — NEGOTIATION CALL SUMMARY

TO: Ian Blackwood, Partner, Banking & Finance Sophie Tremblay, Lead Associate, Banking & Finance

FROM: Daniel Obi, Working Associate, Banking & Finance

DATE: October 4, 2022

RE: Greenfield Agricultural Partners LLC — $80,000,000 Senior Secured ABL Revolving Credit Facility — Summary of Negotiation Call No. 1 (October 3, 2022)

MATTER NO.: 1020-00001

BILLING CODE: GAPABF-2022

This memorandum summarizes the substance and outcomes of the first negotiation call between counsel and principals for the Borrower and the Administrative Agent/Lead Arranger with respect to the above-referenced transaction. The call took place on October 3, 2022. The discussion primarily addressed open issues identified in our first markup of the Credit Agreement, with particular focus on borrowing base methodology, advance rates, availability reserves, field examination logistics, and reporting mechanics. This memorandum is organized to track the major discussion topics in the order in which they were addressed on the call.

1. Call Details

Date and Time: October 3, 2022; 2:00 p.m. – 3:45 p.m. (Central Time)

Format: Videoconference (Northgate Data Systems; link circulated by Lauren Chisholm, Kessler, Brandt & Whitfield LLP)

Participants:

Calderwood & Harkness LLP (Borrower's Counsel):

• Ian Blackwood — Responsible Partner, Banking & Finance

• Sophie Tremblay — Lead Associate, Banking & Finance

Greenfield Agricultural Partners LLC (Borrower):

• Patricia "Trish" Calloway — Chief Financial Officer

• Nina Vasquez — General Counsel and Corporate Secretary

Kessler, Brandt & Whitfield LLP (Lender's Counsel):

• Richard Whitfield — Partner, Lead Counsel for Heartland Commerce Bank, N.A.

• Lauren Chisholm — Senior Associate

Heartland Commerce Bank, N.A. (Administrative Agent / Lead Arranger):

• Gregory Thorn — Managing Director, Agribusiness Lending

• Allison Kuo — Vice President, ABL Structuring

Purpose of Call: To discuss and negotiate the principal open issues arising from Calderwood & Harkness's first markup of the Credit Agreement, which was delivered to Kessler, Brandt & Whitfield on September 23, 2022 and marked against KBW's initial draft dated September 16, 2022. The markup was accompanied by a separate comment letter and issues list transmitted by Sophie Tremblay to Lauren Chisholm on the same date.

2. Background and Context

The October 3 call followed Calderwood & Harkness's delivery of its first markup of the Credit Agreement on September 23, 2022. That markup was prepared against the initial draft Credit Agreement circulated by Kessler, Brandt & Whitfield on September 16, 2022. In connection with the markup, Sophie Tremblay transmitted a detailed comment letter and issues list to Lauren Chisholm identifying the principal areas of disagreement between the parties and flagging a number of provisions requiring further discussion. The comment letter organized the open issues by category and cross-referenced the relevant sections of the draft Credit Agreement, and was intended to serve as the working agenda for this call.

The agreed-upon term sheet for the facility was signed on September 9, 2022, reflecting the key economic and structural terms of an $80,000,000 senior secured asset-based revolving credit facility (the "Facility") structured as follows:

• Borrower: Greenfield Agricultural Partners LLC ("GAP"), a Delaware limited liability company with its principal place of business in Des Moines, Iowa.

• Guarantors: Greenfield Holdings Corp. (a Delaware corporation and the direct parent of GAP), Greenfield Grain Storage LLC (an Iowa limited liability company and wholly owned subsidiary of GAP), and Greenfield Crop Inputs Inc. (an Illinois corporation and wholly owned subsidiary of GAP).

• Administrative Agent, Collateral Agent, Sole Lead Arranger, and Sole Bookrunner: Heartland Commerce Bank, N.A. ("HCB").

• Syndicate: HCB ($40,000,000 commitment / 50.00%); Meridian Agricultural Credit Corporation ($25,000,000 commitment / 31.25%); and Tallgrass Capital Fund II, LP ($15,000,000 commitment / 18.75%).

• Facility Purpose: (i) to refinance and repay in full the existing $55,000,000 revolving credit facility with Prairie National Bank, N.A. (with an outstanding balance of approximately $38,750,000 as of September 30, 2022), (ii) to fund seasonal working capital needs, and (iii) for general corporate purposes.

• Governing Law: State of Illinois.

• Maturity: Four (4) years from the closing date (anticipated closing in October 2022, with a maturity in October 2026).

The parties have been working toward a closing date in late October or early November 2022, subject to completion of the Pryor & Associates field examination, credit committee approval of certain open items, and negotiation and execution of definitive documentation.

3. Discussion Topics and Outcomes

3.1 Borrowing Base Methodology — Eligibility Criteria

The first substantive topic addressed on the call was the borrowing base methodology, and specifically the eligibility criteria applicable to accounts receivable, crop inventory, and crop-input inventory. This topic consumed a significant portion of the call and was the subject of extended discussion.

KBW/HCB Position (Whitfield/Kuo). Richard Whitfield opened discussion on this topic by noting that the initial draft Credit Agreement had been prepared using KBW's standard ABL template and contained broad ineligibility criteria for both accounts receivable and inventory. Calderwood & Harkness's markup had challenged a number of these criteria as overly restrictive for an agricultural borrower whose operations are characterized by pronounced seasonal cash flow patterns. Allison Kuo elaborated on the rationale for the initial draft's approach, noting that HCB's credit team had adopted a conservative posture on eligibility criteria pending the outcome of the Pryor & Associates field examination. Whitfield acknowledged that certain adjustments were appropriate and indicated that KBW was prepared to discuss the specific sub-issues raised in our markup.

The following key eligibility sub-issues were discussed:

Accounts Receivable Eligibility. Calderwood & Harkness's markup objected to the 60-day aging cut-off for eligible accounts receivable included in the initial draft. The initial draft provided that any account receivable that remains outstanding for more than 60 days past the original invoice date would be excluded from the borrowing base as an ineligible receivable. Ian Blackwood raised this issue at the outset and noted that the 60-day standard, while common in many commercial ABL facilities, does not reflect the payment practices and credit cycle norms of the agricultural sector. Patricia Calloway, GAP's CFO, elaborated on this point by explaining that GAP's crop-input distribution business, operated through its subsidiary Greenfield Crop Inputs Inc., routinely extends 90-day payment terms to farmer-customers. These extended terms are aligned with planting seasons: crop-input products (seed, fertilizer, and crop protection chemicals) are delivered to farmer-customers in the period from approximately late February through early May, with payment terms structured to come due after the planting season is complete and the customer has access to crop revenue or has drawn on operating credit lines. Calloway noted that this 90-day payment cycle is standard across the crop-input distribution industry and that GAP's historical collection experience on these receivables is strong, with annual charge-offs averaging less than 1.2% over the past five fiscal years.

Gregory Thorn acknowledged the agricultural norm and stated that HCB's agribusiness lending group is familiar with extended payment cycles in crop-input distribution. However, Thorn expressed concern about concentration risk, noting that if the 90-day standard were adopted, a larger proportion of GAP's AR book would be included in the borrowing base, and this would increase the importance of appropriate concentration limits to prevent over-reliance on any single account debtor.

Resolution. After discussion, the parties tentatively agreed on a 90-day aging standard for eligible accounts receivable, replacing the 60-day standard in the initial draft. In addition, to address HCB's concentration risk concern, the parties agreed to include a concentration limit of 10% of total eligible accounts receivable from any single account debtor. Any amounts owed by a single account debtor in excess of the 10% concentration threshold would be excluded from the borrowing base. KBW will reflect these changes in the next draft of the Credit Agreement.

Crop Inventory Eligibility. The call also addressed the definition and scope of "eligible crop inventory." Calderwood & Harkness's markup pressed for the inclusion of grain stored at third-party warehouses — not just grain stored at facilities owned or leased by GAP — to the extent such grain is covered by negotiable warehouse receipts issued by licensed warehouse operators. The initial draft had limited eligible crop inventory to grain held at facilities owned or operated by Greenfield Grain Storage LLC, which operates 14 elevator sites in Iowa and Illinois. Sophie Tremblay noted on the call that GAP routinely stores significant quantities of grain at third-party warehouse facilities, particularly during harvest when GAP's own elevator capacity is exceeded, and that excluding this grain from the borrowing base would substantially understate the true collateral base available during the most important borrowing period of the year.

HCB expressed willingness to consider the inclusion of grain at third-party warehouses, but Allison Kuo raised a concern about potential overlap or double-counting between the "eligible crop inventory" category and the separate "eligible grain warehouse receipts" category already included in the borrowing base. Kuo noted that if grain at third-party warehouses were captured in both categories, the borrowing base would overstate the available collateral.

Resolution. The parties agreed on the following framework to avoid double-counting: grain stored at facilities owned or leased by GAP (i.e., the 14 elevator sites operated by Greenfield Grain Storage LLC) will be captured in the crop inventory component of the borrowing base at an advance rate of 65% of net orderly liquidation value ("NOLV"), consistent with the treatment of GAP-controlled grain. Grain stored at third-party facilities will be captured exclusively through the warehouse receipt advance component of the borrowing base at an advance rate of 80% of market value (as further discussed in Section 3.2 below), and will not be included in the crop inventory category. This approach ensures that each bushel of grain is captured in one — and only one — component of the borrowing base. KBW will revise the relevant definitions in the next draft to implement this distinction.

Crop-Input Inventory Eligibility. Allison Kuo asked Calloway to elaborate on the nature and composition of GAP's crop-input inventory to ensure that the eligibility criteria for this category are appropriately tailored. Calloway confirmed that Greenfield Crop Inputs Inc. carries three principal categories of crop-input inventory: seed, fertilizer, and crop protection chemicals (herbicides, fungicides, and insecticides). Calloway noted that crop-input inventory is highly seasonal, peaking in the first and second quarters of the calendar year (the pre-planting period) and declining sharply through the planting season as inventory is sold and delivered to farmer-customers.

Calloway provided the following approximate data points for illustration:

• Q1–Q2 peak (pre-planting season): Crop-input inventory of approximately $31.6 million.

• Q3–Q4 (post-planting / harvest period): Crop-input inventory declines significantly; the October 2022 estimate is approximately $18.4 million.

This seasonal pattern is the inverse of the crop inventory cycle, in which inventory peaks during the harvest months (September through November) at approximately $125 million to $145 million of on-hand grain. The borrowing base is therefore supported by different collateral categories at different points in the seasonal cycle: crop-input inventory and accounts receivable provide the dominant collateral support in Q1–Q2, while crop inventory and warehouse receipts dominate in Q3–Q4.

The advance rate of 70% of the lower of cost or market for crop-input inventory was generally agreed per the term sheet and was not the subject of material dispute. Calloway noted that the $18.4 million October estimate for crop-input inventory was based on data relayed by Raymond Foss, Vice President of Operations, who was not on the call.

No specific resolution was required on crop-input eligibility criteria at this time, as the parties' positions were largely aligned. KBW will confirm the eligibility criteria in the next draft.

3.2 Advance Rates

The parties turned next to the advance rates applicable to each component of the borrowing base. The following rates were discussed:

Accounts Receivable Advance Rate — 85%. The 85% advance rate for eligible accounts receivable was agreed per the term sheet and was not the subject of further dispute on the call. Both parties confirmed their understanding that this rate applies to the net face value of eligible accounts receivable (i.e., after deducting credit balances, offsets, and contra accounts).

Crop Inventory Advance Rate — 65% of NOLV. Calderwood & Harkness's markup had proposed increasing the crop inventory advance rate from 65% to 70% of NOLV. Ian Blackwood presented the borrower's case for the higher rate, noting that a 65% advance rate applied to NOLV — which itself incorporates a substantial discount from appraised fair market value — yields an effective advance against the gross market value of the grain that is materially below typical ABL standards for commodity collateral. Blackwood specifically noted that when the 65% NOLV advance rate is combined with the availability reserve (then under discussion), the effective advance to GAP is reduced to approximately 60–61% of NOLV, which Blackwood characterized as unduly conservative for high-quality, exchange-traded commodity collateral.

Allison Kuo responded that HCB's credit committee had approved the 65% rate based on its assessment of commodity price volatility, noting that grain prices had experienced significant fluctuations over the prior eighteen months. Kuo further noted that the CBOT corn front-month contract had traded in a range of $5.30 to $8.24 per bushel over the twelve months ending September 30, 2022, representing a price range of approximately 55%. Gregory Thorn supplemented Kuo's remarks by explaining that the NOLV methodology already incorporates a discount from appraised fair market value to reflect estimated liquidation costs, shrinkage, quality adjustments, and the time value of money during a hypothetical orderly liquidation. Thorn stated that 65% of NOLV, when properly calculated, provides adequate borrowing capacity during peak harvest and reflects the credit risk inherent in agricultural commodity collateral.

Resolution. HCB held firm at the 65% of NOLV advance rate for crop inventory. However, Thorn and Kuo indicated that HCB was prepared to discuss the quantum of the availability reserve (see Section 3.3 below) as a quid pro quo, acknowledging Blackwood's point that the interaction between the advance rate and the reserve level affects the borrower's overall net availability. The borrower team accepted this approach, and the 65% rate is now agreed for purposes of further drafting.

Crop-Input Inventory Advance Rate — 70%. The 70% advance rate for eligible crop-input inventory (calculated as 70% of the lower of cost or market) was agreed per the term sheet and was not the subject of further dispute.

Warehouse Receipt Advance Rate — 80% of Market Value. The 80% advance rate for eligible grain warehouse receipts was agreed in principle per the term sheet and in Calderwood & Harkness's markup. However, C&H's markup raised an issue with respect to the definition of "market value" for purposes of the warehouse receipt advance. The initial KBW draft defined market value for warehouse receipts by reference to a broad "Agent-determined market value" standard, which would give HCB as Administrative Agent unilateral discretion to determine the value of grain covered by warehouse receipts for borrowing base purposes.

Calderwood & Harkness's markup proposed that market value for warehouse receipts be defined by reference to the Chicago Board of Trade ("CBOT") settlement price for the applicable commodity (corn, soybeans, or wheat, as the case may be) less the applicable local basis differential. Blackwood noted on the call that a CBOT-referenced valuation methodology provides an objective, market-based standard that is transparent to the borrower, eliminates the potential for subjective or inconsistent Agent determinations, and is consistent with prevailing market practice for warehouse receipt-backed ABL facilities in the agricultural sector.

Whitfield acknowledged the reasonableness of the CBOT-based approach and did not resist the concept in principle. Kuo noted that the applicable basis differentials vary by delivery point and will need to be specified for each of GAP's storage locations.

Resolution. The parties agreed that the warehouse receipt valuation methodology will reference the CBOT settlement price for the applicable commodity less the applicable local basis differential, with the basis differential to be specified for each delivery point at which GAP stores grain. KBW will draft conforming language to implement this standard in the next draft of the Credit Agreement.

3.3 Availability Reserves

The availability reserve discussion was the most extended and substantively significant discussion of the call, consuming approximately 35 minutes.

Background. The initial draft Credit Agreement and the original indicative term sheet dated August 22, 2022 (which preceded the agreed term sheet dated September 9, 2022) provided for an initial availability reserve of $5,000,000. In addition, the initial draft granted the Administrative Agent broad discretionary authority to impose additional reserves at any time and from time to time without limitation or notice. The agreed term sheet dated September 9, 2022 had reflected a negotiated target of $3,500,000 for the initial reserve, but this target remained subject to HCB credit committee approval.

C&H/GAP Position (Blackwood/Calloway). Ian Blackwood opened the discussion by reiterating the borrower's position that the initial availability reserve should be reduced from $5,000,000 to $3,500,000, consistent with the agreed term sheet. Blackwood argued that the $5,000,000 reserve, when combined with the 65% crop inventory advance rate, results in an over-discounting of the borrowing base that unnecessarily constrains the borrower's access to liquidity, particularly during the seasonal trough period when crop inventory is at its lowest and the borrowing base is most dependent on crop-input inventory and accounts receivable.

Patricia Calloway presented specific numerical illustrations to support the borrower's position. Calloway estimated that during the anticipated trough period in April 2023, the gross borrowing base (before reserves) would be approximately $45,875,000, based on projected crop-input inventory, accounts receivable, and residual crop inventory at that time. With a $5,000,000 reserve, the adjusted borrowing base would be approximately $40,875,000. With a $3,500,000 reserve, the adjusted borrowing base would be approximately $42,375,000. The difference of approximately $1,500,000 is meaningful, Calloway explained, when considered in conjunction with the minimum excess availability covenant of $5,000,000 that the term sheet contemplates. If GAP must maintain $5,000,000 of excess availability at all times, a $5,000,000 reserve would effectively limit peak borrowing in the trough period to approximately $35,875,000, whereas a $3,500,000 reserve would allow peak borrowing of approximately $37,375,000. In Q1–Q2 of each year, when GAP is purchasing crop-input inventory for the upcoming planting season, seasonal working capital needs are at their highest, and every incremental dollar of available credit is significant.

HCB/KBW Position (Thorn/Kuo/Whitfield). Gregory Thorn acknowledged the borrower's position and noted that HCB's agribusiness lending team is sympathetic to the seasonal dynamics of GAP's business. However, Thorn explained that the $5,000,000 initial reserve had been established based on HCB's internal credit committee requirements and reflected the credit committee's assessment of residual collateral risk, including the risk of commodity price declines, inventory quality deterioration, and shrinkage. Allison Kuo stated that she was prepared to take the reduced reserve of $3,500,000 back to HCB's credit committee for approval, but indicated that approval would likely be contingent on a satisfactory outcome from the Pryor & Associates field examination. Kuo expressed a reasonable expectation that the credit committee would approve the reduced reserve if the Pryor report confirmed the quality, quantity, and condition of GAP's collateral.

Agent Discretionary Reserves. A separate but related issue concerned the scope of the Agent's authority to impose additional discretionary reserves above the initial reserve. Calderwood & Harkness's markup proposed limiting the Agent's discretionary reserve authority so that any increase in reserves must be supported by specific findings in field examination reports or by evidence of material deterioration in collateral values. The initial draft granted unfettered discretion to the Agent to establish, increase, or modify reserves at any time, without notice and without specifying the basis for any such change.

Blackwood argued that unfettered discretionary reserve authority creates significant unpredictability for the borrower and effectively grants the Agent the unilateral ability to reduce the borrowing base at any time without reference to objective criteria. Blackwood noted that from the borrower's perspective, this is functionally equivalent to giving the Agent the power to accelerate a liquidity crisis — precisely the scenario that the borrowing base structure is designed to prevent. A borrower that cannot predict its borrowing availability cannot effectively manage its seasonal working capital needs.

Whitfield responded that discretionary reserves are a standard feature of ABL facilities and serve an important protective function for the Agent and the lender syndicate. Whitfield argued that limiting the Agent's discretion unduly constrains the Agent's ability to respond to emerging risks in the collateral portfolio and could leave the syndicate exposed in the event of a rapid deterioration in collateral values. Whitfield noted that ABL facilities are, by their nature, collateral-dependent, and that the Agent must have the tools necessary to ensure that the facility remains adequately collateralized at all times.

Tentative Compromise on Discretionary Reserves. After extended discussion, the parties reached a tentative compromise on the discretionary reserve mechanism:

(a) Agent discretionary reserves will be required to be based on "commercially reasonable" determinations by the Agent, rather than being subject to unfettered discretion.

(b) The Agent will provide the Borrower with not less than five (5) business days' prior written notice before imposing any additional reserve or increasing any existing reserve, except in exigent circumstances (e.g., where the Agent determines in good faith that immediate action is necessary to protect the collateral position of the Secured Parties).

(c) In connection with any notice of a reserve increase, the Agent will identify the basis for the reserve increase with reasonable specificity, including by reference to the particular collateral category or risk factor giving rise to the Agent's determination.

This framework is a meaningful improvement from the initial draft's unfettered discretion standard but preserves the Agent's ability to act promptly in genuine emergencies. The precise drafting of the exigent circumstances carve-out will need to be negotiated further, and I would expect KBW to push for broad language in the exception. Sophie and I should discuss how to define "exigent circumstances" narrowly enough to prevent the exception from swallowing the rule.

Final Resolution on Reserve Quantum. Gregory Thorn agreed to present the $3,500,000 initial reserve to HCB's credit committee, and both Thorn and Kuo expressed a reasonable expectation that the credit committee would approve this amount, contingent on satisfactory results from the Pryor & Associates field examination. The parties agreed to revisit the reserve quantum after receipt of the Pryor report, which is expected in early November 2022.

Note. The revised term sheet agreed on September 9, 2022 had already reflected the $3,500,000 negotiated reserve target, so the discussion on the call was directed at confirming HCB's path to internal credit committee approval and establishing the conditions under which the committee is likely to sign off. The $3,500,000 figure is not yet formally approved; it remains subject to the credit committee process.

3.4 Inventory Valuation Methodology — Role of Pryor & Associates

NOLV Determination. Sophie Tremblay inquired about the methodology that Pryor & Associates LLC (Thomas Pryor, Managing Partner) would use to determine the net orderly liquidation value of GAP's crop inventory for borrowing base purposes. Allison Kuo confirmed that HCB engaged Pryor on September 19, 2022 pursuant to HCB's standard field examination engagement letter. Kuo explained that Pryor is HCB's preferred appraisal firm for agricultural commodity collateral and has extensive experience with grain elevator operations and agricultural inventory valuations.

Scope of Pryor Engagement. Kuo described the scope of the Pryor engagement as follows:

(a) Physical inspection and verification: Pryor's team will conduct physical inspections of grain quantities at all 14 elevator sites operated by Greenfield Grain Storage LLC and at GAP's 3 regional distribution centers (located in Des Moines, Iowa; Bloomington, Illinois; and Lafayette, Indiana).

(b) Sampling and grading verification: Pryor will sample and verify the grade, quality, and condition of grain in storage, including moisture content, test weight, and damage levels, and will reconcile the observed grades to GAP's book records and the applicable USDA grading standards.

(c) Reconciliation to book records: Pryor will reconcile the physical quantities observed during the inspection to GAP's internal book records, including warehouse receipts, scale tickets, and inventory management system reports, to identify any discrepancies or variances.

(d) NOLV determination: Pryor will calculate net orderly liquidation value based on current CBOT pricing for the applicable commodity, applicable local basis differentials for each storage location, estimated liquidation costs (including transportation, handling, and commission costs), and condition adjustments for any out-of-condition or substandard grain.

(e) Crop-input inventory appraisal: Pryor will separately appraise the crop-input inventory (seed, fertilizer, and crop protection chemicals) held at GAP's distribution centers, with valuation based on the lower of cost or current wholesale market value.

(f) Accounts receivable review: Pryor will review GAP's accounts receivable aging schedules, evaluate the collectibility of outstanding receivables, and identify any receivables that may be subject to disputes, setoffs, or other credit issues.

Timing. Kuo stated that Pryor & Associates planned to commence on-site field examination activities during the week of October 17, 2022, with a target completion date for the final report in early November 2022. The timing is designed to capture the crop inventory at or near its seasonal peak, which is the most relevant valuation point for purposes of establishing the initial borrowing base following closing.

Patricia Calloway confirmed that GAP would make all facilities and personnel available to Pryor's team during the examination period and designated Raymond Foss, Vice President of Operations, as the primary point of contact for the Pryor team. Calloway noted that Foss has extensive knowledge of GAP's elevator operations and inventory management systems and has served as the primary contact for prior field examinations conducted under the existing Prairie National Bank facility.

Cost Allocation. Per the proposed term sheet and draft Credit Agreement, field examination costs are borne by the Borrower, subject to a cap of $50,000 per examination. Under normal operating conditions (i.e., outside of a Trigger Period), the Borrower is required to fund a maximum of two (2) field examinations per year. Nina Vasquez confirmed that GAP is aware of and accepts this cost allocation framework.

Frequency Going Forward. Calderwood & Harkness's markup proposed language specifying that routine field examinations be limited to two (2) per calendar year at the Borrower's expense, with each examination subject to a fee cap of $50,000. During a Trigger Period — defined as any period during which Excess Availability falls below the greater of (i) 12.5% of the Borrowing Base or (ii) $10,000,000 — additional field examinations would be permitted at the Borrower's expense, without limitation on number or frequency. KBW's initial draft had not included an explicit per-examination fee cap during Trigger Periods, effectively exposing the Borrower to unlimited field examination costs during periods of financial stress.

Resolution. The parties agreed to the following framework:

• Outside of a Trigger Period: Maximum of two (2) field examinations per calendar year at Borrower's expense, with each examination capped at $50,000 in fees and expenses.

• During a Trigger Period: Unlimited field examinations at the Agent's discretion, at Borrower's expense, with no per-examination fee cap.

KBW will reflect this framework in the next draft of the Credit Agreement.

3.5 Borrowing Base Certificate — Reporting Mechanics

Frequency. Calderwood & Harkness's markup proposed that borrowing base certificates be delivered on a monthly basis during periods when the Facility is not in a Trigger Period. KBW's initial draft had required bi-weekly borrowing base certificates at all times. Allison Kuo acknowledged that monthly reporting is common in many ABL facilities but expressed concern about the seasonal volatility of crop inventory values, noting that during the harvest months of September, October, and November, the volume and value of grain in storage can change significantly from week to week as grain is received from farmers, dried, stored, and either sold or committed for future delivery. Kuo stated that HCB's preference would be for more frequent reporting during the harvest season, even outside of a formal Trigger Period.

After discussion, the parties agreed to the following reporting framework, which is consistent with the agreed term sheet:

• Outside of a Trigger Period: Monthly borrowing base certificates, delivered within fifteen (15) days after the end of each calendar month.

• During a Trigger Period: Weekly borrowing base certificates, delivered within two (2) business days after the end of each calendar week, together with daily cash receipts reporting.

Kuo did not press for enhanced harvest-season reporting outside of the Trigger Period framework, though she reserved HCB's right to revisit this topic if warranted by the Pryor field examination results or subsequent collateral performance.

Certification Authority. The parties agreed that borrowing base certificates will be certified by either the Chief Financial Officer (currently Patricia Calloway) or the Controller of GAP. The Administrative Agent may request supporting documentation in connection with any borrowing base certificate, including but not limited to detailed inventory reports, accounts receivable aging schedules, and warehouse receipt registers.

Look-Back Provisions and Borrowing Base Deficiency. Calderwood & Harkness's markup proposed a three (3) business-day cure period following delivery of a borrowing base deficiency notification, during which the Borrower would have the opportunity to cure the deficiency (by prepayment, cash collateralization, or collateral substitution) before the mandatory prepayment obligation is triggered. KBW's initial draft provided for immediate mandatory prepayment upon delivery of a borrowing base deficiency notification, with no cure period.

Resolution. This issue was deferred to the next drafting round. Richard Whitfield indicated that HCB would likely agree to a two (2) business-day cure period (rather than the three business days proposed by Calderwood & Harkness), but reserved HCB's final position pending internal discussion.

3.6 Preliminary Discussion of Payoff Logistics — Prairie National Bank

Ian Blackwood raised the need to begin coordinating payoff logistics with Prairie National Bank, N.A., the existing lender to GAP, in anticipation of the refinancing. This discussion was preliminary in nature and did not involve detailed negotiation, but the following information was noted and confirmed.

Existing PNB Facility Details. The existing credit facility with Prairie National Bank is a $55,000,000 revolving credit agreement originally dated April 1, 2018, as subsequently amended. The facility is administered by Janet Braddock, Senior Vice President, Agricultural Banking, at Prairie National Bank. The key terms are as follows:

• Commitment Amount: $55,000,000 revolving credit facility.

• Outstanding Balance: Approximately $38,750,000 as of September 30, 2022.

• Maturity Date: March 31, 2023.

• Interest Rate: SOFR + 2.75% (no pricing grid).

• Unused Line Fee: 0.50% per annum on the average daily unused commitment.

Existing Liens to Be Released. Prairie National Bank holds the following security interests and liens that will need to be released in connection with the refinancing:

• UCC Financing Statements: Iowa Secretary of State Filing No. 2018-0041729 and Filing No. 2018-0041730, both filed on April 2, 2018.

• Real Property Mortgages: Mortgages recorded in Polk County, Iowa; McLean County, Illinois; and eight (8) additional Iowa counties (specific counties to be confirmed through title searches).

Notification to PNB. Nina Vasquez confirmed that GAP has not yet formally notified Prairie National Bank of the planned refinancing. GAP intends to provide formal notice to PNB upon execution of a commitment letter with HCB. Gregory Thorn noted that HCB's commitment letter is currently being prepared internally and is expected to be delivered in the near term. The timing of the PNB notification will be determined by Greenfield management in consultation with Calderwood & Harkness.

Action Items. Calderwood & Harkness will prepare a comprehensive UCC search summary and lien analysis memorandum covering searches to be conducted in Iowa, Illinois, Indiana, and Delaware (reflecting the jurisdictions of organization and operations of GAP and each of the Guarantors). Calderwood & Harkness will also begin drafting a form of payoff letter and UCC-3 termination statement requests for the PNB liens. The timing of formal notification to PNB will be determined by Greenfield management, in consultation with GAP's General Counsel and the Calderwood & Harkness deal team.

4. Action Items and Next Steps

The following action items were identified on the call and are subject to the target dates indicated:

5. Open Items Deferred to Next Call

The following substantive issues were identified during the course of the October 3 call as topics requiring further discussion, but were deferred to the next negotiation call due to time constraints. The parties agreed that these items would be addressed in the next scheduled call, anticipated for the week of October 17–21, 2022:

1. Springing Fixed Charge Coverage Ratio. Mechanics of the springing FCCR covenant, including the testing period (trailing twelve-month vs. build-up period), the trigger threshold tied to Excess Availability, and the minimum required ratio of 1.10:1.00.

2. Distribution Covenant Conditions. Conditions to the payment of dividends, distributions, and other restricted payments, including the proposed dual test of (i) a minimum Fixed Charge Coverage Ratio of 1.15:1.00 for the most recently ended twelve-month period, and (ii) Excess Availability of not less than 20% of the Borrowing Base on a pro forma basis after giving effect to the proposed distribution.

3. Change of Control Provision. Definition and consequences of a "Change of Control," including the proposed threshold requiring that the Lindstrom Family Trust maintain beneficial ownership of not less than 51% of the issued and outstanding equity interests of Greenfield Holdings Corp.

4. Capital Expenditure Limitations. Annual capital expenditure limitation of $8,000,000 per fiscal year, with carryforward mechanics for unused amounts.

5. Investment and Acquisition Basket. Permitted investment and acquisition basket of $5,000,000 per fiscal year, including conditions and restrictions on types of permitted investments.

6. Commodity Hedging Negative Pledge. Restriction limiting hedging obligations to not more than 80% of anticipated production for any given crop year, and related lien provisions for commodity hedging counterparties.

7. Additional Indebtedness Baskets. Permitted indebtedness baskets, including (i) unsecured indebtedness of up to $3,000,000, and (ii) purchase money indebtedness and capital lease obligations of up to $1,500,000 in the aggregate.

8. Material Adverse Change Definition and Cure Rights. Definition of "Material Adverse Change" (or "Material Adverse Effect"), including the scope of the MAC clause and whether the Borrower has the right to cure a MAC before it triggers an Event of Default.

9. Deposit Account Control Agreement (DACA) Execution Timing and Mechanics. Timing for execution and delivery of DACAs for all Borrower and Guarantor deposit accounts, including the distinction between DACAs required at closing versus those required post-closing within a specified timeframe.

10. Insurance Endorsement Requirements. Requirements for endorsement of property and casualty insurance policies in favor of the Administrative Agent and the Secured Parties, including loss payee and additional insured designations.

6. Confidentiality and Distribution

This memorandum constitutes attorney-client privileged communication and attorney work product within the meaning of the attorney-client privilege and the work product doctrine. It has been prepared by Daniel Obi in connection with Calderwood & Harkness LLP's representation of Greenfield Agricultural Partners LLC and contains the firm's mental impressions, conclusions, opinions, and legal theories relating to the above-referenced transaction.

This memorandum is for internal Calderwood & Harkness LLP distribution only. It is not to be shared with the client, opposing counsel, or any third party without the prior express approval of Ian Blackwood, Responsible Partner.

Prepared by: Daniel Obi, Working Associate, Banking & Finance

Reviewed by: Sophie Tremblay, Lead Associate, Banking & Finance

Filed to: Matter No. 1020-00001 (Billing Code: GAPABF-2022)

CALDERWOOD & HARKNESS LLP — 233 South Wacker Drive, Suite 6500, Chicago, Illinois 60606 This document is privileged and confidential. Unauthorized disclosure or distribution is prohibited.

No.	Item	Responsible Party	Target Date
1	Revise Credit Agreement to reflect agreements reached on this call, including: AR eligibility (90-day aging standard, 10% single-debtor concentration limit); crop inventory / warehouse receipt delineation; warehouse receipt valuation (CBOT settlement price less applicable basis differential); availability reserve ($3,500,000 initial reserve, subject to credit committee approval); discretionary reserve framework (commercially reasonable standard, 5-business-day notice, identification of basis); field examination frequency and fee caps (2 per year / $50,000 per exam outside Trigger Period; unlimited / no cap during Trigger Period); borrowing base certificate reporting frequency (monthly / weekly)	KBW (Lauren Chisholm)	October 7, 2022 (second draft)
2	Present $3,500,000 initial availability reserve to HCB credit committee for approval, contingent on satisfactory Pryor & Associates field examination results	HCB (Allison Kuo)	Week of October 10, 2022
3	Coordinate with Pryor & Associates on logistics for on-site field examination; designate Raymond Foss as GAP's primary point of contact for the Pryor team; ensure all 14 elevator sites and 3 distribution centers are accessible and prepared for inspection	Greenfield (Patricia Calloway / Raymond Foss)	By October 14, 2022
4	Commence on-site field examination at GAP facilities	Pryor & Associates (Thomas Pryor)	Week of October 17, 2022
5	Prepare comprehensive UCC search summary and lien analysis memorandum, covering UCC, tax lien, judgment, and bankruptcy searches in Iowa, Illinois, Indiana, and Delaware for GAP, Greenfield Holdings Corp., Greenfield Grain Storage LLC, and Greenfield Crop Inputs Inc.	C&H (Daniel Obi, supervised by Sophie Tremblay)	October 14, 2022
6	Review and markup KBW second draft Credit Agreement upon receipt	C&H (Sophie Tremblay / Daniel Obi)	Within 7 business days of receipt
7	Determine timing of formal refinancing notification to Prairie National Bank, N.A. (Janet Braddock)	Greenfield (Patricia Calloway / Nina Vasquez / Erik Lindstrom)	TBD
8	Schedule next negotiation call; anticipated topics include financial covenants (FCCR), distribution baskets, change of control, capital expenditure limitations, and remaining open items	C&H (Sophie Tremblay) / KBW (Lauren Chisholm)	Week of October 17–21, 2022

CALDERWOOD & HARKNESS LLP
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
INTERNAL MEMORANDUM — NEGOTIATION CALL SUMMARY
TO: Ian Blackwood, Partner, Banking & Finance Sophie Tremblay, Lead Associate, Banking & Finance
FROM: Daniel Obi, Working Associate, Banking & Finance
DATE: October 4, 2022
RE: Greenfield Agricultural Partners LLC — $80,000,000 Senior Secured ABL Revolving Credit Facility — Summary of Negotiation Call No. 1 (October 3, 2022)
MATTER NO.: 1020-00001
BILLING CODE: GAPABF-2022
This memorandum summarizes the substance and outcomes of the first negotiation call between counsel and principals for the Borrower and the Administrative Agent/Lead Arranger with respect to the above-referenced transaction. The call took place on October 3, 2022. The discussion primarily addressed open issues identified in our first markup of the Credit Agreement, with particular focus on borrowing base methodology, advance rates, availability reserves, field examination logistics, and reporting mechanics. This memorandum is organized to track the major discussion topics in the order in which they were addressed on the call.
1. Call Details
Date and Time: October 3, 2022; 2:00 p.m. – 3:45 p.m. (Central Time)
Format: Videoconference (Northgate Data Systems; link circulated by Lauren Chisholm, Kessler, Brandt & Whitfield LLP)
Participants:
Calderwood & Harkness LLP (Borrower's Counsel):
• Ian Blackwood — Responsible Partner, Banking & Finance
• Sophie Tremblay — Lead Associate, Banking & Finance
Greenfield Agricultural Partners LLC (Borrower):
• Patricia "Trish" Calloway — Chief Financial Officer
• Nina Vasquez — General Counsel and Corporate Secretary
Kessler, Brandt & Whitfield LLP (Lender's Counsel):
• Richard Whitfield — Partner, Lead Counsel for Heartland Commerce Bank, N.A.
• Lauren Chisholm — Senior Associate
Heartland Commerce Bank, N.A. (Administrative Agent / Lead Arranger):
• Gregory Thorn — Managing Director, Agribusiness Lending
• Allison Kuo — Vice President, ABL Structuring
Purpose of Call: To discuss and negotiate the principal open issues arising from Calderwood & Harkness's first markup of the Credit Agreement, which was delivered to Kessler, Brandt & Whitfield on September 23, 2022 and marked against KBW's initial draft dated September 16, 2022. The markup was accompanied by a separate comment letter and issues list transmitted by Sophie Tremblay to Lauren Chisholm on the same date.
2. Background and Context
The October 3 call followed Calderwood & Harkness's delivery of its first markup of the Credit Agreement on September 23, 2022. That markup was prepared against the initial draft Credit Agreement circulated by Kessler, Brandt & Whitfield on September 16, 2022. In connection with the markup, Sophie Tremblay transmitted a detailed comment letter and issues list to Lauren Chisholm identifying the principal areas of disagreement between the parties and flagging a number of provisions requiring further discussion. The comment letter organized the open issues by category and cross-referenced the relevant sections of the draft Credit Agreement, and was intended to serve as the working agenda for this call.
The agreed-upon term sheet for the facility was signed on September 9, 2022, reflecting the key economic and structural terms of an $80,000,000 senior secured asset-based revolving credit facility (the "Facility") structured as follows:
• Borrower: Greenfield Agricultural Partners LLC ("GAP"), a Delaware limited liability company with its principal place of business in Des Moines, Iowa.
• Guarantors: Greenfield Holdings Corp. (a Delaware corporation and the direct parent of GAP), Greenfield Grain Storage LLC (an Iowa limited liability company and wholly owned subsidiary of GAP), and Greenfield Crop Inputs Inc. (an Illinois corporation and wholly owned subsidiary of GAP).
• Administrative Agent, Collateral Agent, Sole Lead Arranger, and Sole Bookrunner: Heartland Commerce Bank, N.A. ("HCB").
• Syndicate: HCB ($40,000,000 commitment / 50.00%); Meridian Agricultural Credit Corporation ($25,000,000 commitment / 31.25%); and Tallgrass Capital Fund II, LP ($15,000,000 commitment / 18.75%).
• Facility Purpose: (i) to refinance and repay in full the existing $55,000,000 revolving credit facility with Prairie National Bank, N.A. (with an outstanding balance of approximately $38,750,000 as of September 30, 2022), (ii) to fund seasonal working capital needs, and (iii) for general corporate purposes.
• Governing Law: State of Illinois.
• Maturity: Four (4) years from the closing date (anticipated closing in October 2022, with a maturity in October 2026).
The parties have been working toward a closing date in late October or early November 2022, subject to completion of the Pryor & Associates field examination, credit committee approval of certain open items, and negotiation and execution of definitive documentation.
3. Discussion Topics and Outcomes
3.1 Borrowing Base Methodology — Eligibility Criteria
The first substantive topic addressed on the call was the borrowing base methodology, and specifically the eligibility criteria applicable to accounts receivable, crop inventory, and crop-input inventory. This topic consumed a significant portion of the call and was the subject of extended discussion.
KBW/HCB Position (Whitfield/Kuo). Richard Whitfield opened discussion on this topic by noting that the initial draft Credit Agreement had been prepared using KBW's standard ABL template and contained broad ineligibility criteria for both accounts receivable and inventory. Calderwood & Harkness's markup had challenged a number of these criteria as overly restrictive for an agricultural borrower whose operations are characterized by pronounced seasonal cash flow patterns. Allison Kuo elaborated on the rationale for the initial draft's approach, noting that HCB's credit team had adopted a conservative posture on eligibility criteria pending the outcome of the Pryor & Associates field examination. Whitfield acknowledged that certain adjustments were appropriate and indicated that KBW was prepared to discuss the specific sub-issues raised in our markup.
The following key eligibility sub-issues were discussed:
Accounts Receivable Eligibility. Calderwood & Harkness's markup objected to the 60-day aging cut-off for eligible accounts receivable included in the initial draft. The initial draft provided that any account receivable that remains outstanding for more than 60 days past the original invoice date would be excluded from the borrowing base as an ineligible receivable. Ian Blackwood raised this issue at the outset and noted that the 60-day standard, while common in many commercial ABL facilities, does not reflect the payment practices and credit cycle norms of the agricultural sector. Patricia Calloway, GAP's CFO, elaborated on this point by explaining that GAP's crop-input distribution business, operated through its subsidiary Greenfield Crop Inputs Inc., routinely extends 90-day payment terms to farmer-customers. These extended terms are aligned with planting seasons: crop-input products (seed, fertilizer, and crop protection chemicals) are delivered to farmer-customers in the period from approximately late February through early May, with payment terms structured to come due after the planting season is complete and the customer has access to crop revenue or has drawn on operating credit lines. Calloway noted that this 90-day payment cycle is standard across the crop-input distribution industry and that GAP's historical collection experience on these receivables is strong, with annual charge-offs averaging less than 1.2% over the past five fiscal years.
Gregory Thorn acknowledged the agricultural norm and stated that HCB's agribusiness lending group is familiar with extended payment cycles in crop-input distribution. However, Thorn expressed concern about concentration risk, noting that if the 90-day standard were adopted, a larger proportion of GAP's AR book would be included in the borrowing base, and this would increase the importance of appropriate concentration limits to prevent over-reliance on any single account debtor.
Resolution. After discussion, the parties tentatively agreed on a 90-day aging standard for eligible accounts receivable, replacing the 60-day standard in the initial draft. In addition, to address HCB's concentration risk concern, the parties agreed to include a concentration limit of 10% of total eligible accounts receivable from any single account debtor. Any amounts owed by a single account debtor in excess of the 10% concentration threshold would be excluded from the borrowing base. KBW will reflect these changes in the next draft of the Credit Agreement.
Crop Inventory Eligibility. The call also addressed the definition and scope of "eligible crop inventory." Calderwood & Harkness's markup pressed for the inclusion of grain stored at third-party warehouses — not just grain stored at facilities owned or leased by GAP — to the extent such grain is covered by negotiable warehouse receipts issued by licensed warehouse operators. The initial draft had limited eligible crop inventory to grain held at facilities owned or operated by Greenfield Grain Storage LLC, which operates 14 elevator sites in Iowa and Illinois. Sophie Tremblay noted on the call that GAP routinely stores significant quantities of grain at third-party warehouse facilities, particularly during harvest when GAP's own elevator capacity is exceeded, and that excluding this grain from the borrowing base would substantially understate the true collateral base available during the most important borrowing period of the year.
HCB expressed willingness to consider the inclusion of grain at third-party warehouses, but Allison Kuo raised a concern about potential overlap or double-counting between the "eligible crop inventory" category and the separate "eligible grain warehouse receipts" category already included in the borrowing base. Kuo noted that if grain at third-party warehouses were captured in both categories, the borrowing base would overstate the available collateral.
Resolution. The parties agreed on the following framework to avoid double-counting: grain stored at facilities owned or leased by GAP (i.e., the 14 elevator sites operated by Greenfield Grain Storage LLC) will be captured in the crop inventory component of the borrowing base at an advance rate of 65% of net orderly liquidation value ("NOLV"), consistent with the treatment of GAP-controlled grain. Grain stored at third-party facilities will be captured exclusively through the warehouse receipt advance component of the borrowing base at an advance rate of 80% of market value (as further discussed in Section 3.2 below), and will not be included in the crop inventory category. This approach ensures that each bushel of grain is captured in one — and only one — component of the borrowing base. KBW will revise the relevant definitions in the next draft to implement this distinction.
Crop-Input Inventory Eligibility. Allison Kuo asked Calloway to elaborate on the nature and composition of GAP's crop-input inventory to ensure that the eligibility criteria for this category are appropriately tailored. Calloway confirmed that Greenfield Crop Inputs Inc. carries three principal categories of crop-input inventory: seed, fertilizer, and crop protection chemicals (herbicides, fungicides, and insecticides). Calloway noted that crop-input inventory is highly seasonal, peaking in the first and second quarters of the calendar year (the pre-planting period) and declining sharply through the planting season as inventory is sold and delivered to farmer-customers.
Calloway provided the following approximate data points for illustration:
• Q1–Q2 peak (pre-planting season): Crop-input inventory of approximately $31.6 million.
• Q3–Q4 (post-planting / harvest period): Crop-input inventory declines significantly; the October 2022 estimate is approximately $18.4 million.
This seasonal pattern is the inverse of the crop inventory cycle, in which inventory peaks during the harvest months (September through November) at approximately $125 million to $145 million of on-hand grain. The borrowing base is therefore supported by different collateral categories at different points in the seasonal cycle: crop-input inventory and accounts receivable provide the dominant collateral support in Q1–Q2, while crop inventory and warehouse receipts dominate in Q3–Q4.
The advance rate of 70% of the lower of cost or market for crop-input inventory was generally agreed per the term sheet and was not the subject of material dispute. Calloway noted that the $18.4 million October estimate for crop-input inventory was based on data relayed by Raymond Foss, Vice President of Operations, who was not on the call.
No specific resolution was required on crop-input eligibility criteria at this time, as the parties' positions were largely aligned. KBW will confirm the eligibility criteria in the next draft.
3.2 Advance Rates
The parties turned next to the advance rates applicable to each component of the borrowing base. The following rates were discussed:
Accounts Receivable Advance Rate — 85%. The 85% advance rate for eligible accounts receivable was agreed per the term sheet and was not the subject of further dispute on the call. Both parties confirmed their understanding that this rate applies to the net face value of eligible accounts receivable (i.e., after deducting credit balances, offsets, and contra accounts).
Crop Inventory Advance Rate — 65% of NOLV. Calderwood & Harkness's markup had proposed increasing the crop inventory advance rate from 65% to 70% of NOLV. Ian Blackwood presented the borrower's case for the higher rate, noting that a 65% advance rate applied to NOLV — which itself incorporates a substantial discount from appraised fair market value — yields an effective advance against the gross market value of the grain that is materially below typical ABL standards for commodity collateral. Blackwood specifically noted that when the 65% NOLV advance rate is combined with the availability reserve (then under discussion), the effective advance to GAP is reduced to approximately 60–61% of NOLV, which Blackwood characterized as unduly conservative for high-quality, exchange-traded commodity collateral.
Allison Kuo responded that HCB's credit committee had approved the 65% rate based on its assessment of commodity price volatility, noting that grain prices had experienced significant fluctuations over the prior eighteen months. Kuo further noted that the CBOT corn front-month contract had traded in a range of $5.30 to $8.24 per bushel over the twelve months ending September 30, 2022, representing a price range of approximately 55%. Gregory Thorn supplemented Kuo's remarks by explaining that the NOLV methodology already incorporates a discount from appraised fair market value to reflect estimated liquidation costs, shrinkage, quality adjustments, and the time value of money during a hypothetical orderly liquidation. Thorn stated that 65% of NOLV, when properly calculated, provides adequate borrowing capacity during peak harvest and reflects the credit risk inherent in agricultural commodity collateral.
Resolution. HCB held firm at the 65% of NOLV advance rate for crop inventory. However, Thorn and Kuo indicated that HCB was prepared to discuss the quantum of the availability reserve (see Section 3.3 below) as a quid pro quo, acknowledging Blackwood's point that the interaction between the advance rate and the reserve level affects the borrower's overall net availability. The borrower team accepted this approach, and the 65% rate is now agreed for purposes of further drafting.
Crop-Input Inventory Advance Rate — 70%. The 70% advance rate for eligible crop-input inventory (calculated as 70% of the lower of cost or market) was agreed per the term sheet and was not the subject of further dispute.
Warehouse Receipt Advance Rate — 80% of Market Value. The 80% advance rate for eligible grain warehouse receipts was agreed in principle per the term sheet and in Calderwood & Harkness's markup. However, C&H's markup raised an issue with respect to the definition of "market value" for purposes of the warehouse receipt advance. The initial KBW draft defined market value for warehouse receipts by reference to a broad "Agent-determined market value" standard, which would give HCB as Administrative Agent unilateral discretion to determine the value of grain covered by warehouse receipts for borrowing base purposes.
Calderwood & Harkness's markup proposed that market value for warehouse receipts be defined by reference to the Chicago Board of Trade ("CBOT") settlement price for the applicable commodity (corn, soybeans, or wheat, as the case may be) less the applicable local basis differential. Blackwood noted on the call that a CBOT-referenced valuation methodology provides an objective, market-based standard that is transparent to the borrower, eliminates the potential for subjective or inconsistent Agent determinations, and is consistent with prevailing market practice for warehouse receipt-backed ABL facilities in the agricultural sector.
Whitfield acknowledged the reasonableness of the CBOT-based approach and did not resist the concept in principle. Kuo noted that the applicable basis differentials vary by delivery point and will need to be specified for each of GAP's storage locations.
Resolution. The parties agreed that the warehouse receipt valuation methodology will reference the CBOT settlement price for the applicable commodity less the applicable local basis differential, with the basis differential to be specified for each delivery point at which GAP stores grain. KBW will draft conforming language to implement this standard in the next draft of the Credit Agreement.
3.3 Availability Reserves
The availability reserve discussion was the most extended and substantively significant discussion of the call, consuming approximately 35 minutes.
Background. The initial draft Credit Agreement and the original indicative term sheet dated August 22, 2022 (which preceded the agreed term sheet dated September 9, 2022) provided for an initial availability reserve of $5,000,000. In addition, the initial draft granted the Administrative Agent broad discretionary authority to impose additional reserves at any time and from time to time without limitation or notice. The agreed term sheet dated September 9, 2022 had reflected a negotiated target of $3,500,000 for the initial reserve, but this target remained subject to HCB credit committee approval.
C&H/GAP Position (Blackwood/Calloway). Ian Blackwood opened the discussion by reiterating the borrower's position that the initial availability reserve should be reduced from $5,000,000 to $3,500,000, consistent with the agreed term sheet. Blackwood argued that the $5,000,000 reserve, when combined with the 65% crop inventory advance rate, results in an over-discounting of the borrowing base that unnecessarily constrains the borrower's access to liquidity, particularly during the seasonal trough period when crop inventory is at its lowest and the borrowing base is most dependent on crop-input inventory and accounts receivable.
Patricia Calloway presented specific numerical illustrations to support the borrower's position. Calloway estimated that during the anticipated trough period in April 2023, the gross borrowing base (before reserves) would be approximately $45,875,000, based on projected crop-input inventory, accounts receivable, and residual crop inventory at that time. With a $5,000,000 reserve, the adjusted borrowing base would be approximately $40,875,000. With a $3,500,000 reserve, the adjusted borrowing base would be approximately $42,375,000. The difference of approximately $1,500,000 is meaningful, Calloway explained, when considered in conjunction with the minimum excess availability covenant of $5,000,000 that the term sheet contemplates. If GAP must maintain $5,000,000 of excess availability at all times, a $5,000,000 reserve would effectively limit peak borrowing in the trough period to approximately $35,875,000, whereas a $3,500,000 reserve would allow peak borrowing of approximately $37,375,000. In Q1–Q2 of each year, when GAP is purchasing crop-input inventory for the upcoming planting season, seasonal working capital needs are at their highest, and every incremental dollar of available credit is significant.
HCB/KBW Position (Thorn/Kuo/Whitfield). Gregory Thorn acknowledged the borrower's position and noted that HCB's agribusiness lending team is sympathetic to the seasonal dynamics of GAP's business. However, Thorn explained that the $5,000,000 initial reserve had been established based on HCB's internal credit committee requirements and reflected the credit committee's assessment of residual collateral risk, including the risk of commodity price declines, inventory quality deterioration, and shrinkage. Allison Kuo stated that she was prepared to take the reduced reserve of $3,500,000 back to HCB's credit committee for approval, but indicated that approval would likely be contingent on a satisfactory outcome from the Pryor & Associates field examination. Kuo expressed a reasonable expectation that the credit committee would approve the reduced reserve if the Pryor report confirmed the quality, quantity, and condition of GAP's collateral.
Agent Discretionary Reserves. A separate but related issue concerned the scope of the Agent's authority to impose additional discretionary reserves above the initial reserve. Calderwood & Harkness's markup proposed limiting the Agent's discretionary reserve authority so that any increase in reserves must be supported by specific findings in field examination reports or by evidence of material deterioration in collateral values. The initial draft granted unfettered discretion to the Agent to establish, increase, or modify reserves at any time, without notice and without specifying the basis for any such change.
Blackwood argued that unfettered discretionary reserve authority creates significant unpredictability for the borrower and effectively grants the Agent the unilateral ability to reduce the borrowing base at any time without reference to objective criteria. Blackwood noted that from the borrower's perspective, this is functionally equivalent to giving the Agent the power to accelerate a liquidity crisis — precisely the scenario that the borrowing base structure is designed to prevent. A borrower that cannot predict its borrowing availability cannot effectively manage its seasonal working capital needs.
Whitfield responded that discretionary reserves are a standard feature of ABL facilities and serve an important protective function for the Agent and the lender syndicate. Whitfield argued that limiting the Agent's discretion unduly constrains the Agent's ability to respond to emerging risks in the collateral portfolio and could leave the syndicate exposed in the event of a rapid deterioration in collateral values. Whitfield noted that ABL facilities are, by their nature, collateral-dependent, and that the Agent must have the tools necessary to ensure that the facility remains adequately collateralized at all times.
Tentative Compromise on Discretionary Reserves. After extended discussion, the parties reached a tentative compromise on the discretionary reserve mechanism:
(a) Agent discretionary reserves will be required to be based on "commercially reasonable" determinations by the Agent, rather than being subject to unfettered discretion.
(b) The Agent will provide the Borrower with not less than five (5) business days' prior written notice before imposing any additional reserve or increasing any existing reserve, except in exigent circumstances (e.g., where the Agent determines in good faith that immediate action is necessary to protect the collateral position of the Secured Parties).
(c) In connection with any notice of a reserve increase, the Agent will identify the basis for the reserve increase with reasonable specificity, including by reference to the particular collateral category or risk factor giving rise to the Agent's determination.
This framework is a meaningful improvement from the initial draft's unfettered discretion standard but preserves the Agent's ability to act promptly in genuine emergencies. The precise drafting of the exigent circumstances carve-out will need to be negotiated further, and I would expect KBW to push for broad language in the exception. Sophie and I should discuss how to define "exigent circumstances" narrowly enough to prevent the exception from swallowing the rule.
Final Resolution on Reserve Quantum. Gregory Thorn agreed to present the $3,500,000 initial reserve to HCB's credit committee, and both Thorn and Kuo expressed a reasonable expectation that the credit committee would approve this amount, contingent on satisfactory results from the Pryor & Associates field examination. The parties agreed to revisit the reserve quantum after receipt of the Pryor report, which is expected in early November 2022.
Note. The revised term sheet agreed on September 9, 2022 had already reflected the $3,500,000 negotiated reserve target, so the discussion on the call was directed at confirming HCB's path to internal credit committee approval and establishing the conditions under which the committee is likely to sign off. The $3,500,000 figure is not yet formally approved; it remains subject to the credit committee process.
3.4 Inventory Valuation Methodology — Role of Pryor & Associates
NOLV Determination. Sophie Tremblay inquired about the methodology that Pryor & Associates LLC (Thomas Pryor, Managing Partner) would use to determine the net orderly liquidation value of GAP's crop inventory for borrowing base purposes. Allison Kuo confirmed that HCB engaged Pryor on September 19, 2022 pursuant to HCB's standard field examination engagement letter. Kuo explained that Pryor is HCB's preferred appraisal firm for agricultural commodity collateral and has extensive experience with grain elevator operations and agricultural inventory valuations.
Scope of Pryor Engagement. Kuo described the scope of the Pryor engagement as follows:
(a) Physical inspection and verification: Pryor's team will conduct physical inspections of grain quantities at all 14 elevator sites operated by Greenfield Grain Storage LLC and at GAP's 3 regional distribution centers (located in Des Moines, Iowa; Bloomington, Illinois; and Lafayette, Indiana).
(b) Sampling and grading verification: Pryor will sample and verify the grade, quality, and condition of grain in storage, including moisture content, test weight, and damage levels, and will reconcile the observed grades to GAP's book records and the applicable USDA grading standards.
(c) Reconciliation to book records: Pryor will reconcile the physical quantities observed during the inspection to GAP's internal book records, including warehouse receipts, scale tickets, and inventory management system reports, to identify any discrepancies or variances.
(d) NOLV determination: Pryor will calculate net orderly liquidation value based on current CBOT pricing for the applicable commodity, applicable local basis differentials for each storage location, estimated liquidation costs (including transportation, handling, and commission costs), and condition adjustments for any out-of-condition or substandard grain.
(e) Crop-input inventory appraisal: Pryor will separately appraise the crop-input inventory (seed, fertilizer, and crop protection chemicals) held at GAP's distribution centers, with valuation based on the lower of cost or current wholesale market value.
(f) Accounts receivable review: Pryor will review GAP's accounts receivable aging schedules, evaluate the collectibility of outstanding receivables, and identify any receivables that may be subject to disputes, setoffs, or other credit issues.
Timing. Kuo stated that Pryor & Associates planned to commence on-site field examination activities during the week of October 17, 2022, with a target completion date for the final report in early November 2022. The timing is designed to capture the crop inventory at or near its seasonal peak, which is the most relevant valuation point for purposes of establishing the initial borrowing base following closing.
Patricia Calloway confirmed that GAP would make all facilities and personnel available to Pryor's team during the examination period and designated Raymond Foss, Vice President of Operations, as the primary point of contact for the Pryor team. Calloway noted that Foss has extensive knowledge of GAP's elevator operations and inventory management systems and has served as the primary contact for prior field examinations conducted under the existing Prairie National Bank facility.
Cost Allocation. Per the proposed term sheet and draft Credit Agreement, field examination costs are borne by the Borrower, subject to a cap of $50,000 per examination. Under normal operating conditions (i.e., outside of a Trigger Period), the Borrower is required to fund a maximum of two (2) field examinations per year. Nina Vasquez confirmed that GAP is aware of and accepts this cost allocation framework.
Frequency Going Forward. Calderwood & Harkness's markup proposed language specifying that routine field examinations be limited to two (2) per calendar year at the Borrower's expense, with each examination subject to a fee cap of $50,000. During a Trigger Period — defined as any period during which Excess Availability falls below the greater of (i) 12.5% of the Borrowing Base or (ii) $10,000,000 — additional field examinations would be permitted at the Borrower's expense, without limitation on number or frequency. KBW's initial draft had not included an explicit per-examination fee cap during Trigger Periods, effectively exposing the Borrower to unlimited field examination costs during periods of financial stress.
Resolution. The parties agreed to the following framework:
• Outside of a Trigger Period: Maximum of two (2) field examinations per calendar year at Borrower's expense, with each examination capped at $50,000 in fees and expenses.
• During a Trigger Period: Unlimited field examinations at the Agent's discretion, at Borrower's expense, with no per-examination fee cap.
KBW will reflect this framework in the next draft of the Credit Agreement.
3.5 Borrowing Base Certificate — Reporting Mechanics
Frequency. Calderwood & Harkness's markup proposed that borrowing base certificates be delivered on a monthly basis during periods when the Facility is not in a Trigger Period. KBW's initial draft had required bi-weekly borrowing base certificates at all times. Allison Kuo acknowledged that monthly reporting is common in many ABL facilities but expressed concern about the seasonal volatility of crop inventory values, noting that during the harvest months of September, October, and November, the volume and value of grain in storage can change significantly from week to week as grain is received from farmers, dried, stored, and either sold or committed for future delivery. Kuo stated that HCB's preference would be for more frequent reporting during the harvest season, even outside of a formal Trigger Period.
After discussion, the parties agreed to the following reporting framework, which is consistent with the agreed term sheet:
• Outside of a Trigger Period: Monthly borrowing base certificates, delivered within fifteen (15) days after the end of each calendar month.
• During a Trigger Period: Weekly borrowing base certificates, delivered within two (2) business days after the end of each calendar week, together with daily cash receipts reporting.
Kuo did not press for enhanced harvest-season reporting outside of the Trigger Period framework, though she reserved HCB's right to revisit this topic if warranted by the Pryor field examination results or subsequent collateral performance.
Certification Authority. The parties agreed that borrowing base certificates will be certified by either the Chief Financial Officer (currently Patricia Calloway) or the Controller of GAP. The Administrative Agent may request supporting documentation in connection with any borrowing base certificate, including but not limited to detailed inventory reports, accounts receivable aging schedules, and warehouse receipt registers.
Look-Back Provisions and Borrowing Base Deficiency. Calderwood & Harkness's markup proposed a three (3) business-day cure period following delivery of a borrowing base deficiency notification, during which the Borrower would have the opportunity to cure the deficiency (by prepayment, cash collateralization, or collateral substitution) before the mandatory prepayment obligation is triggered. KBW's initial draft provided for immediate mandatory prepayment upon delivery of a borrowing base deficiency notification, with no cure period.
Resolution. This issue was deferred to the next drafting round. Richard Whitfield indicated that HCB would likely agree to a two (2) business-day cure period (rather than the three business days proposed by Calderwood & Harkness), but reserved HCB's final position pending internal discussion.
3.6 Preliminary Discussion of Payoff Logistics — Prairie National Bank
Ian Blackwood raised the need to begin coordinating payoff logistics with Prairie National Bank, N.A., the existing lender to GAP, in anticipation of the refinancing. This discussion was preliminary in nature and did not involve detailed negotiation, but the following information was noted and confirmed.
Existing PNB Facility Details. The existing credit facility with Prairie National Bank is a $55,000,000 revolving credit agreement originally dated April 1, 2018, as subsequently amended. The facility is administered by Janet Braddock, Senior Vice President, Agricultural Banking, at Prairie National Bank. The key terms are as follows:
• Commitment Amount: $55,000,000 revolving credit facility.
• Outstanding Balance: Approximately $38,750,000 as of September 30, 2022.
• Maturity Date: March 31, 2023.
• Interest Rate: SOFR + 2.75% (no pricing grid).
• Unused Line Fee: 0.50% per annum on the average daily unused commitment.
Existing Liens to Be Released. Prairie National Bank holds the following security interests and liens that will need to be released in connection with the refinancing:
• UCC Financing Statements: Iowa Secretary of State Filing No. 2018-0041729 and Filing No. 2018-0041730, both filed on April 2, 2018.
• Real Property Mortgages: Mortgages recorded in Polk County, Iowa; McLean County, Illinois; and eight (8) additional Iowa counties (specific counties to be confirmed through title searches).
Notification to PNB. Nina Vasquez confirmed that GAP has not yet formally notified Prairie National Bank of the planned refinancing. GAP intends to provide formal notice to PNB upon execution of a commitment letter with HCB. Gregory Thorn noted that HCB's commitment letter is currently being prepared internally and is expected to be delivered in the near term. The timing of the PNB notification will be determined by Greenfield management in consultation with Calderwood & Harkness.
Action Items. Calderwood & Harkness will prepare a comprehensive UCC search summary and lien analysis memorandum covering searches to be conducted in Iowa, Illinois, Indiana, and Delaware (reflecting the jurisdictions of organization and operations of GAP and each of the Guarantors). Calderwood & Harkness will also begin drafting a form of payoff letter and UCC-3 termination statement requests for the PNB liens. The timing of formal notification to PNB will be determined by Greenfield management, in consultation with GAP's General Counsel and the Calderwood & Harkness deal team.
4. Action Items and Next Steps
The following action items were identified on the call and are subject to the target dates indicated:
5. Open Items Deferred to Next Call
The following substantive issues were identified during the course of the October 3 call as topics requiring further discussion, but were deferred to the next negotiation call due to time constraints. The parties agreed that these items would be addressed in the next scheduled call, anticipated for the week of October 17–21, 2022:
1. Springing Fixed Charge Coverage Ratio. Mechanics of the springing FCCR covenant, including the testing period (trailing twelve-month vs. build-up period), the trigger threshold tied to Excess Availability, and the minimum required ratio of 1.10:1.00.
2. Distribution Covenant Conditions. Conditions to the payment of dividends, distributions, and other restricted payments, including the proposed dual test of (i) a minimum Fixed Charge Coverage Ratio of 1.15:1.00 for the most recently ended twelve-month period, and (ii) Excess Availability of not less than 20% of the Borrowing Base on a pro forma basis after giving effect to the proposed distribution.
3. Change of Control Provision. Definition and consequences of a "Change of Control," including the proposed threshold requiring that the Lindstrom Family Trust maintain beneficial ownership of not less than 51% of the issued and outstanding equity interests of Greenfield Holdings Corp.
4. Capital Expenditure Limitations. Annual capital expenditure limitation of $8,000,000 per fiscal year, with carryforward mechanics for unused amounts.
5. Investment and Acquisition Basket. Permitted investment and acquisition basket of $5,000,000 per fiscal year, including conditions and restrictions on types of permitted investments.
6. Commodity Hedging Negative Pledge. Restriction limiting hedging obligations to not more than 80% of anticipated production for any given crop year, and related lien provisions for commodity hedging counterparties.
7. Additional Indebtedness Baskets. Permitted indebtedness baskets, including (i) unsecured indebtedness of up to $3,000,000, and (ii) purchase money indebtedness and capital lease obligations of up to $1,500,000 in the aggregate.
8. Material Adverse Change Definition and Cure Rights. Definition of "Material Adverse Change" (or "Material Adverse Effect"), including the scope of the MAC clause and whether the Borrower has the right to cure a MAC before it triggers an Event of Default.
9. Deposit Account Control Agreement (DACA) Execution Timing and Mechanics. Timing for execution and delivery of DACAs for all Borrower and Guarantor deposit accounts, including the distinction between DACAs required at closing versus those required post-closing within a specified timeframe.
10. Insurance Endorsement Requirements. Requirements for endorsement of property and casualty insurance policies in favor of the Administrative Agent and the Secured Parties, including loss payee and additional insured designations.
6. Confidentiality and Distribution
This memorandum constitutes attorney-client privileged communication and attorney work product within the meaning of the attorney-client privilege and the work product doctrine. It has been prepared by Daniel Obi in connection with Calderwood & Harkness LLP's representation of Greenfield Agricultural Partners LLC and contains the firm's mental impressions, conclusions, opinions, and legal theories relating to the above-referenced transaction.
This memorandum is for internal Calderwood & Harkness LLP distribution only. It is not to be shared with the client, opposing counsel, or any third party without the prior express approval of Ian Blackwood, Responsible Partner.
Prepared by: Daniel Obi, Working Associate, Banking & Finance
Reviewed by: Sophie Tremblay, Lead Associate, Banking & Finance
Filed to: Matter No. 1020-00001 (Billing Code: GAPABF-2022)
CALDERWOOD & HARKNESS LLP — 233 South Wacker Drive, Suite 6500, Chicago, Illinois 60606 This document is privileged and confidential. Unauthorized disclosure or distribution is prohibited.
No. | Item | Responsible Party | Target Date
1 | Revise Credit Agreement to reflect agreements reached on this call, including: AR eligibility (90-day aging standard, 10% single-debtor concentration limit); crop inventory / warehouse receipt delineation; warehouse receipt valuation (CBOT settlement price less applicable basis differential); availability reserve ($3,500,000 initial reserve, subject to credit committee approval); discretionary reserve framework (commercially reasonable standard, 5-business-day notice, identification of basis); field examination frequency and fee caps (2 per year / $50,000 per exam outside Trigger Period; unlimited / no cap during Trigger Period); borrowing base certificate reporting frequency (monthly / weekly) | KBW (Lauren Chisholm) | October 7, 2022 (second draft)
2 | Present $3,500,000 initial availability reserve to HCB credit committee for approval, contingent on satisfactory Pryor & Associates field examination results | HCB (Allison Kuo) | Week of October 10, 2022
3 | Coordinate with Pryor & Associates on logistics for on-site field examination; designate Raymond Foss as GAP's primary point of contact for the Pryor team; ensure all 14 elevator sites and 3 distribution centers are accessible and prepared for inspection | Greenfield (Patricia Calloway / Raymond Foss) | By October 14, 2022
4 | Commence on-site field examination at GAP facilities | Pryor & Associates (Thomas Pryor) | Week of October 17, 2022
5 | Prepare comprehensive UCC search summary and lien analysis memorandum, covering UCC, tax lien, judgment, and bankruptcy searches in Iowa, Illinois, Indiana, and Delaware for GAP, Greenfield Holdings Corp., Greenfield Grain Storage LLC, and Greenfield Crop Inputs Inc. | C&H (Daniel Obi, supervised by Sophie Tremblay) | October 14, 2022
6 | Review and markup KBW second draft Credit Agreement upon receipt | C&H (Sophie Tremblay / Daniel Obi) | Within 7 business days of receipt
7 | Determine timing of formal refinancing notification to Prairie National Bank, N.A. (Janet Braddock) | Greenfield (Patricia Calloway / Nina Vasquez / Erik Lindstrom) | TBD
8 | Schedule next negotiation call; anticipated topics include financial covenants (FCCR), distribution baskets, change of control, capital expenditure limitations, and remaining open items | C&H (Sophie Tremblay) / KBW (Lauren Chisholm) | Week of October 17–21, 2022

CALDERWOOD & HARKNESS LLP

MATTER NO.: 1020-00001

BILLING CODE: GAPABF-2022

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