CALDERWOOD & HARKNESS LLP Attorneys at Law
One Liberty Plaza, 45th Floor New York, NY 10006
Telephone: (212) 455-7800 Facsimile: (212) 455-7801 www.calderwoodharkness.com
January 24, 2022
Reference: C&H-EL-2022-0124-MCB
VIA EMAIL AND U.S. MAIL
Mr. Raymond Chu General Counsel Meridian Consumer Brands LLC 401 West 33rd Street, Suite 1200 New York, NY 10001
Dear Mr. Chu:
We are pleased to set forth in this letter the terms and conditions upon which Calderwood & Harkness LLP (the "Firm," "we," or "us") has been engaged by Meridian Consumer Brands LLC ("Meridian" or the "Company") to provide legal services in connection with the matter described below. This letter is intended to memorialize our mutual understanding regarding the scope of the representation, the fee arrangement, and certain other matters relating to the attorney-client relationship between the Firm and the Company. We ask that you review the terms of this letter carefully and, if acceptable, execute and return a copy to us as described in Section 15 below.
1. Engagement and Scope of Representation
Calderwood & Harkness LLP is pleased to confirm its engagement by Meridian Consumer Brands LLC, a Delaware limited liability company, as borrower's counsel in connection with the following matter:
Representation of Meridian in connection with the negotiation, documentation, and potential closing of a proposed $40,000,000 asset-based revolving credit facility (the "Proposed ABL Facility") with Ridgeline National Bank, National Association ("Ridgeline"), acting as prospective administrative agent and sole initial lender thereunder.
The scope of the Firm's representation in this matter shall include, without limitation, the following:
(a) review, analysis, and negotiation of any term sheets, commitment letters, and fee letters proposed by Ridgeline or its counsel in connection with the Proposed ABL Facility;
(b) review, drafting, and negotiation of the definitive credit agreement and all related loan documents, including but not limited to security agreements, guaranty agreements, pledge agreements, intellectual property security agreements, deposit account control agreements, collateral access agreements, borrowing base certificates, compliance certificates, and other ancillary loan documents;
(c) review and negotiation of borrowing base mechanics, including eligibility criteria for accounts receivable and inventory, reserves, reporting requirements, and related provisions;
(d) review and negotiation of any intercreditor agreement(s) required in connection with Meridian's existing indebtedness, including without limitation the existing first lien term loan facility with Greystone Capital Finance LLC ("Greystone"), and any related amendments, consents, or waivers to the extent necessitated by the entry into the Proposed ABL Facility;
(e) coordination and communication with counsel to Ridgeline, Whitfield Ames LLP ("Lender's Counsel"), in connection with the negotiation and documentation of the transaction;
(f) preparation, review, and delivery of legal opinions as may be required in connection with the closing of the Proposed ABL Facility, including enforceability, due authorization, and such other opinions as Ridgeline or Lender's Counsel may reasonably request;
(g) review of the Company's organizational documents, existing material agreements, and other documentation to the extent relevant to the Proposed ABL Facility and the security arrangements contemplated thereunder;
(h) assistance with the satisfaction of conditions precedent to closing, including coordination regarding UCC searches, lien filings, insurance certificates, and similar matters; and
(i) such other related advisory services as may be reasonably necessary or incidental to the foregoing in connection with the Proposed ABL Facility.
The Firm's internal matter number assigned to this engagement is 1011-00001. This engagement letter bears the reference number C&H-EL-2022-0124-MCB, which should be referenced in any correspondence or communications relating to this engagement.
2. Engagement Team
The following attorneys have been assigned to this matter and will comprise the primary engagement team:
Ms. Okafor will serve as the Responsible Partner and your primary point of contact at the Firm with respect to all matters relating to this engagement. She can be reached by telephone at (212) 455-7834 or by email at sokafor@calderwoodharkness.com. Mr. Hartmann will serve as the Billing Partner and will oversee the billing and financial administration of the engagement.
Please note that, from time to time, the needs of the engagement may require the assignment of additional attorneys, paralegals, legal assistants, or other support staff to the matter. In the event of any material additions to the engagement team, the Firm will promptly notify the Company and will communicate the applicable billing rates for any such additional timekeepers, as described in Section 3 below.
3. Fee Arrangement and Hourly Rates
Fees for legal services rendered in connection with this engagement will be charged on an hourly basis, computed in increments of one-tenth (1/10) of an hour. The current standard hourly rates for the members of the engagement team are as follows:
These rates reflect the Firm's standard rates for the above-named timekeepers as of the date of this letter. The Firm periodically reviews and adjusts its billing rates, typically on an annual basis effective as of January 1 of each calendar year. The Company will receive advance written notice of any such rate adjustments prior to their effective date.
In the event that additional attorneys are assigned to the matter, their applicable hourly rates will be communicated to the Company at the time of their assignment. Paralegal and legal assistant time devoted to this engagement will be billed at the Firm's then-prevailing rates for such personnel, which currently range from $350.00 to $450.00 per hour, depending on seniority and experience.
The foregoing rates do not include disbursements and out-of-pocket expenses, which are addressed separately in Section 5 below.
4. Billing and Payment Terms
The Firm will render invoices for professional fees and disbursements on a monthly basis, in arrears. Each invoice will include a summary description of the services rendered during the applicable billing period, the identity of the timekeepers who performed such services, the number of hours expended by each timekeeper, a description of the work performed, and an itemization of any disbursements and expenses incurred.
Payment of each invoice is due within thirty (30) days of the date of the invoice. The Firm accepts payment by wire transfer or check. Wire transfer instructions will be provided upon request and will also be included on each invoice.
In the event that any invoice remains unpaid beyond the thirty (30)-day payment period, the Firm reserves the right to charge interest on the overdue balance at the rate of one percent (1.0%) per month, or, if less, the maximum rate permitted by applicable law. The imposition of interest on overdue amounts shall not constitute a waiver of any other rights or remedies available to the Firm with respect to the collection of unpaid fees and expenses.
The Firm does not require a retainer deposit for this engagement. The Firm reserves the right, however, to revisit this arrangement if circumstances change materially during the course of the representation.
5. Disbursements and Expenses
In addition to the professional fees described in Section 3 above, the Firm will bill the Company for reasonable out-of-pocket disbursements and expenses incurred in connection with the engagement. Such disbursements and expenses may include, by way of example and without limitation, the following:
(a) filing fees payable to governmental offices, including UCC filing fees, corporate good standing certificate fees, and similar charges;
(b) courier and overnight delivery charges;
(c) travel expenses, including transportation, lodging, and meals, to the extent travel is required in connection with the engagement and approved by the Company in advance;
(d) document reproduction and printing costs;
(e) charges for electronic legal research services (e.g., Westmark Data Systems, Sundial Solutions);
(f) long-distance telephone and teleconference charges; and
(g) similar items customarily incurred in the course of transactional legal matters of this nature.
Third-party costs, such as appraisal fees, lien search fees, title search fees, and filing fees payable to governmental offices, will be billed to the Company at cost, without markup. To the extent that any single third-party disbursement is expected to exceed $5,000, the Firm will endeavor to obtain the Company's prior approval before incurring such expense.
6. Scope Limitations
The Firm's representation of the Company under this engagement letter is limited to the specific matter described in Section 1 above — namely, the representation of Meridian as borrower's counsel in connection with the Proposed ABL Facility with Ridgeline. The Firm is not undertaking to represent Meridian in any other matter, transaction, dispute, or proceeding of any kind unless such additional representation is separately agreed upon in writing between the parties.
Without limiting the generality of the foregoing, the scope of this engagement does not include:
(a) representation of the Company in connection with any regulatory, tax, environmental, employment, intellectual property, or litigation matters that may arise in connection with or collateral to the Proposed ABL Facility, unless separately agreed in writing;
(b) representation of the Company in connection with any restructuring, amendment, refinancing, or workout of the Company's existing first lien term loan with Greystone Capital Finance LLC, except to the limited extent that any consent, waiver, or intercreditor arrangement is directly required in connection with the closing of the Proposed ABL Facility as described in Section 1 above;
(c) representation of the Company in connection with any alternative lenders, alternative credit facilities, or alternative financing arrangements, whether debt or equity in nature; any engagement to pursue such alternatives would require a separate engagement letter or a written amendment to this letter; or
(d) advice on the tax consequences of the Proposed ABL Facility or any related transaction.
Should the Company wish to engage the Firm with respect to any matters outside the scope described herein, we would be pleased to discuss the terms of any such additional engagement at that time.
7. Client Responsibilities
In order for the Firm to render effective and timely legal services in connection with the Proposed ABL Facility, Meridian agrees to cooperate fully with the Firm and to provide, on a timely basis, all information, documents, records, agreements, financial statements, and access to the Company's officers, directors, managers, employees, and other personnel as may be reasonably necessary for the Firm to perform its services under this engagement.
Meridian further agrees to promptly notify the Firm of any material developments relating to the Proposed ABL Facility or the Company's financial condition, operations, existing indebtedness, or corporate or organizational structure that are or may be relevant to the engagement. This includes, without limitation, any material changes to the Company's borrowing base, any defaults or events of default under the Company's existing credit facilities, any material litigation or threatened litigation, and any communications received from Ridgeline or Lender's Counsel outside of the ordinary course of the negotiation process.
The Firm may rely on the accuracy and completeness of all information, documents, and materials provided by the Company or its representatives without independent investigation or verification, unless otherwise expressly agreed in writing. The Firm shall not be responsible for any errors, omissions, or adverse consequences arising from the Company's failure to provide accurate, complete, or timely information.
The Company acknowledges that the timely provision of requested information and documentation is essential to the Firm's ability to meet deadlines and to keep costs within reasonable bounds. Delays in the provision of information may result in corresponding delays in the progress of the engagement and may increase the overall cost of the representation.
8. Conflicts of Interest
Based on a conflicts check conducted by the Firm as of the date of this letter, the Firm is not presently aware of any conflict of interest that would prevent it from undertaking this representation in accordance with the New York Rules of Professional Conduct.
Meridian acknowledges that Calderwood & Harkness LLP is a large, multi-office law firm with a substantial number of attorneys and a diverse client base. The Firm may currently represent, or may in the future represent, other clients whose interests may differ from or be adverse to those of Meridian in matters unrelated to this engagement. Meridian's engagement of the Firm in connection with this matter shall not preclude the Firm from representing other clients in unrelated matters, including matters adverse to Meridian, provided that any such representation does not give rise to a conflict of interest under the applicable Rules of Professional Conduct with respect to this engagement.
The Firm confirms that, as of the date of this letter, it does not currently represent Ridgeline National Bank, N.A. or Whitfield Ames LLP in any matter adverse to the interests of Meridian. Should any such representation exist or arise in the future, the Firm will promptly disclose such representation to the Company to the extent permitted by applicable confidentiality obligations.
Should a potential conflict of interest arise during the course of this engagement, the Firm will promptly notify Meridian and will seek to resolve such conflict in accordance with the applicable New York Rules of Professional Conduct. Depending on the nature and severity of the conflict, resolution may involve the implementation of appropriate ethical screens, the obtaining of informed written consent, or, in certain circumstances, the withdrawal of the Firm from the engagement.
Nothing in this engagement letter constitutes a waiver of Meridian's rights under the applicable New York Rules of Professional Conduct, the American Bar Association Model Rules of Professional Conduct, or any other applicable ethical rules or professional standards. By entering into this engagement, Meridian does not consent to any specific future conflict of interest or waive its right to object to any representation by the Firm that may give rise to a conflict.
9. Confidentiality
The Firm will maintain the confidentiality of all information received from or on behalf of Meridian in connection with this engagement, in accordance with the Firm's ethical obligations under the New York Rules of Professional Conduct and applicable professional standards. The Firm will not disclose such information to any third party without the Company's prior written consent, except as required by law, court order, or applicable ethical rules.
Notwithstanding the foregoing, confidential information may be shared within the Firm on a need-to-know basis for the following purposes: (a) rendering legal services to the Company in connection with this engagement; (b) conducting conflicts checks as required by the Firm's internal policies and applicable professional rules; and (c) complying with the Firm's internal quality assurance, risk management, and administrative procedures. All personnel within the Firm who have access to the Company's confidential information are bound by the Firm's confidentiality policies and applicable ethical obligations.
The Firm's obligations of confidentiality shall survive the termination or conclusion of this engagement in accordance with applicable ethical rules and professional standards.
10. Termination of Engagement
Either Meridian or the Firm may terminate this engagement at any time upon written notice to the other party. Termination by the Firm shall be subject to the Firm's obligations under applicable ethical rules, including the obligation to take reasonable steps to avoid prejudice to the Company's interests.
Upon termination of the engagement, whether by the Company or the Firm, Meridian will remain responsible for the payment of all professional fees earned and all disbursements and expenses incurred through the effective date of termination, in accordance with the billing and payment terms set forth in this letter. Any outstanding invoices shall remain due and payable in accordance with Section 4 above.
Upon termination, the Firm will take reasonable steps to protect Meridian's interests, including the orderly transition of the matter to successor counsel if requested by the Company. The Firm will cooperate in good faith with any successor counsel designated by Meridian and will, subject to the Company's satisfaction of all outstanding financial obligations to the Firm, promptly deliver to Meridian or its designated successor counsel all documents, files, and materials belonging to the Company.
In the absence of termination, this engagement shall be deemed concluded upon the closing of the Proposed ABL Facility or, if the Proposed ABL Facility does not close, upon the Firm's completion of such services as may be necessary to wind down its involvement in the matter, whichever first occurs.
11. Document Retention
Following the conclusion or termination of this engagement, the Firm will retain the client file, including the Firm's work product and copies of material transaction documents, in accordance with the Firm's standard document retention policies. The Firm's current policy provides for the retention of closed matter files for a period of ten (10) years following the conclusion of the engagement, after which such files may be destroyed in the ordinary course without further notice to the Company.
At the conclusion of the matter, the Firm may return original documents to Meridian or, with the Company's consent, dispose of working files, drafts, duplicate copies, and similar materials in accordance with the Firm's standard practices. The Company may request the return of its files and original documents at any time, subject to the Firm's right to retain copies for its records and in compliance with applicable professional rules.
The Company is encouraged to retain its own copies of all material documents and correspondence generated in connection with this engagement.
12. Limitation of Liability
To the fullest extent permitted by applicable law and the New York Rules of Professional Conduct, the Firm's aggregate liability to the Company or any of its affiliates, members, managers, officers, or employees for any and all claims, losses, damages, costs, or expenses of any kind arising out of or related to the services provided under this engagement, whether based in contract, tort, negligence, strict liability, or otherwise, shall not exceed the total amount of professional fees actually paid by Meridian to the Firm in connection with this matter.
This limitation of liability shall not apply to the extent that it is prohibited by applicable law, applicable professional rules, or public policy, or to the extent that any loss or damage is caused by the Firm's willful misconduct or fraud.
The Company acknowledges that this limitation of liability has been negotiated as part of the overall fee arrangement and reflects an allocation of risk between the parties that is reflected in the fees charged by the Firm for its services.
13. Governing Law
This engagement letter and the attorney-client relationship between the Firm and the Company shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict-of-laws principles. Any dispute arising out of or relating to this engagement letter or the services provided hereunder shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the County of New York, or the United States District Court for the Southern District of New York, and each party consents to the personal jurisdiction of such courts.
14. Entire Agreement; Amendments
This letter constitutes the entire agreement between the Firm and the Company with respect to the engagement described herein and supersedes all prior or contemporaneous discussions, negotiations, correspondence, and understandings, whether oral or written, relating to the subject matter hereof.
No amendment, modification, supplement, or waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by both the Firm and the Company. No failure or delay by either party in exercising any right or remedy under this letter shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.
15. Acceptance and Countersignature
We are delighted to have the opportunity to represent Meridian in connection with the Proposed ABL Facility, and we look forward to working with you and your team on this transaction. If the terms and conditions set forth in this engagement letter are acceptable to you, we kindly request that you indicate Meridian's agreement by signing and dating a copy of this letter in the space provided below and returning it to Stephanie Okafor at the address set forth above or by email to sokafor@calderwoodharkness.com.
If you have any questions regarding any of the terms of this letter or any other aspect of the engagement, please do not hesitate to contact Ms. Okafor at your earliest convenience.
We very much appreciate your confidence in Calderwood & Harkness LLP and look forward to a productive working relationship.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Stephanie Okafor
Title: Partner, Banking & Finance
Date: January 24, 2022
ACKNOWLEDGMENT AND AGREEMENT
The undersigned, on behalf of Meridian Consumer Brands LLC, hereby acknowledges receipt of this engagement letter, has reviewed its terms and conditions, and agrees to be bound by the terms set forth herein.
MERIDIAN CONSUMER BRANDS LLC
By: ________
Name: Raymond Chu
Title: General Counsel
Date: ________
cc: (via email)
Marcus Ellsworth, Chief Executive Officer, Meridian Consumer Brands LLC
Patricia Delgado, Chief Financial Officer, Meridian Consumer Brands LLC
Evelyn Crumveth, Managing Partner, Brindoval Partners Fund III, LP
Philip Hartmann, Partner, Calderwood & Harkness LLP
| Name | Title | Role |
| Stephanie Okafor | Partner, Banking & Finance | Responsible Partner; primary client contact and lead attorney for the engagement |
| Philip Hartmann | Partner, Banking & Finance | Billing Partner |
| Daniel Obi | Associate, Banking & Finance | Lead Associate |
| Lisa Morrow | Associate, Banking & Finance | Working Associate |
| Timekeeper | Position | Hourly Rate |
| Stephanie Okafor | Partner | $1,250.00 |
| Philip Hartmann | Partner | $1,250.00 |
| Daniel Obi | Associate | $825.00 |
| Lisa Morrow | Associate | $695.00 |