CALDERWOOD & HARKNESS LLP Attorneys at Law
150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601
Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com
August 29, 2022
Via Email and U.S. Mail
Patricia "Trish" Calloway Chief Financial Officer Greenfield Agricultural Partners LLC 4100 Grand Prairie Boulevard, Suite 300 Des Moines, Iowa 50309
Copy to: Nina Vasquez, Esq. General Counsel and Corporate Secretary Greenfield Agricultural Partners LLC 4100 Grand Prairie Boulevard, Suite 300 Des Moines, Iowa 50309
Re: Engagement of Calderwood & Harkness LLP by Greenfield Agricultural Partners LLC — Proposed $80,000,000 Senior Secured Asset-Based Revolving Credit Facility Matter No. 1020-00001 Billing Code: GAPABF-2022
Dear Ms. Calloway:
1. Introduction and Purpose
Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to serve as outside counsel to Greenfield Agricultural Partners LLC ("Greenfield," "GAP," or the "Company") in connection with the proposed transaction described below. We are pleased to have the opportunity to work with Greenfield and its management team, and we look forward to a productive engagement.
This engagement letter follows the initial discussions between you and Ian Blackwood, a Partner in the Firm's Banking & Finance Practice Group, which commenced on August 15, 2022 and continued over subsequent calls and correspondence. During those discussions, Mr. Blackwood and you reviewed the general parameters of the proposed credit facility, the anticipated deal timeline, and the Firm's relevant experience in agricultural asset-based lending transactions. Based on those discussions, and after careful consideration of the scope and requirements of the proposed transaction, the Firm is pleased to confirm its willingness to serve as borrower's counsel to Greenfield on the terms and conditions set forth in this letter.
The purpose of this engagement letter is to set forth the terms and conditions governing the Firm's engagement by the Company, including the scope of the representation, the applicable fee arrangements, the identity of the client, and various other matters that are customarily addressed at the outset of an engagement of this nature. We believe it is important that both the Firm and the Company have a clear and mutual understanding of these terms at the outset, so as to avoid any misunderstanding during the course of the representation.
This engagement shall become effective upon countersignature of this letter by an authorized representative of the Company. A duplicate original of this letter is enclosed for the Company's records. We respectfully request that you review the terms set forth herein, and, if they are acceptable, sign and return one copy of this letter to the undersigned at your earliest convenience.
2. Scope of Representation
Calderwood & Harkness LLP will serve as borrower's counsel to Greenfield Agricultural Partners LLC, an Iowa limited liability company, in connection with the negotiation, documentation, and closing of a proposed Eighty Million Dollar ($80,000,000) senior secured asset-based revolving credit facility (the "ABL Facility" or the "Facility").
The ABL Facility is to be provided by a syndicate of lenders led by Heartland Commerce Bank, National Association ("HCB"), which will act in the capacities of Administrative Agent, Collateral Agent, Sole Lead Arranger, and Sole Bookrunner for the Facility. The proposed lending syndicate is anticipated to include, in addition to HCB, Meridian Agricultural Credit Corporation and Tallgrass Capital Fund II, LP as syndicate lenders (collectively with HCB, the "Lenders"). The Facility will be secured by substantially all assets of Greenfield and its subsidiaries, including, without limitation, seasonal crop inventories (including row crops, stored grain, and crops in the ground), accounts receivable, grain warehouse receipts, equipment (including harvesting equipment and rolling stock), and real property (including owned and leased agricultural parcels and storage facilities).
The scope of the Firm's engagement in connection with the ABL Facility specifically includes the following:
(a) Term Sheet Review. Review of and comment on the indicative term sheet delivered by HCB to the Company, dated August 22, 2022, including identification of material issues, market-standard concerns, and provisions requiring negotiation or clarification prior to commencement of definitive documentation.
(b) Definitive Documentation. Negotiation of the definitive Credit Agreement and all ancillary loan documents in connection with the ABL Facility, including, without limitation, the Security Agreement, the Guaranty Agreement, the Pledge Agreement, the Mortgages (or Deeds of Trust, as applicable by jurisdiction), Deposit Account Control Agreements, insurance assignments, borrowing base certificates, compliance certificates, and all related schedules, exhibits, and annexes.
(c) Collateral Due Diligence. Coordination of collateral due diligence in connection with the Facility, including ordering and analysis of Uniform Commercial Code ("UCC") searches, federal and state tax lien searches, judgment and litigation searches, analysis of existing liens and encumbrances, review of title matters as they relate to the collateral package, and coordination of all perfection steps required under applicable law (including the filing of UCC financing statements, the recordation of mortgages, and the establishment of control over deposit accounts and other collateral subject to control requirements under Article 9 of the UCC).
(d) Entity and Organizational Matters. Review of organizational documents, entity authorizations (including resolutions of the Board of Managers or equivalent governing body), operating agreements, certificates of formation or incorporation, and good standing certificates for each Loan Party in connection with the Facility. The anticipated Loan Parties include Greenfield Agricultural Partners LLC (Iowa), as Borrower, and the following entities as proposed Guarantors: Greenfield Holdings Corp. (Delaware), Greenfield Grain Storage LLC (Iowa), and Greenfield Crop Inputs Inc. (Illinois).
(e) Closing Deliverables. Preparation of all closing deliverables required of the Borrower and Guarantors in connection with the Facility, including, without limitation, preparation of the borrower's counsel legal opinion (including opinions as to due authorization, enforceability, no conflicts, and perfection of security interests, to the extent customary in transactions of this nature), officer's certificates, secretary's certificates, and all other closing documentation required by the Credit Agreement or by the Administrative Agent's closing checklist.
(f) Refinancing Coordination. Coordination of the refinancing and payoff of the Company's existing Fifty-Five Million Dollar ($55,000,000) revolving credit facility with Prairie National Bank, National Association ("PNB"), including review and negotiation of the payoff letter from PNB, coordination of UCC termination statements (UCC-3s) to be filed by PNB, review of mortgage releases or satisfactions to be delivered by PNB, and any other steps necessary to ensure the release and termination of PNB's existing liens upon the Company's assets in connection with the closing of the ABL Facility.
(g) Coordination with Counterparty Counsel and Third Parties. Coordination with lender's counsel, Kessler, Brandt & Whitfield LLP, throughout the negotiation and documentation process, and coordination with the independent field examiner engaged by HCB, Pryor & Associates LLC, in connection with its field examination and appraisal of the Company's borrowing base assets.
Scope Exclusions. The Company acknowledges and agrees that this engagement does not include representation in connection with any of the following matters: (i) tax advice of any kind, including federal, state, local, or international tax matters; (ii) regulatory compliance matters, including compliance with any requirements of the United States Department of Agriculture ("USDA"), the Environmental Protection Agency ("EPA"), or any state agricultural or environmental regulatory agency; (iii) environmental matters, including environmental due diligence, Phase I or Phase II environmental site assessments, or remediation matters; (iv) real estate title examination, for which the engagement of local counsel in the applicable jurisdictions may be required; (v) labor and employment matters, including employee benefit plans, ERISA compliance, or labor relations; or (vi) litigation of any kind, whether related or unrelated to the ABL Facility. If any such matters arise during the course of the engagement, or if the scope of the engagement otherwise requires expansion beyond the matters described above, a separate engagement agreement or a written amendment to this engagement letter, signed by both parties, will be required prior to the Firm's undertaking any such additional work.
3. Client Identification
The client in this engagement is Greenfield Agricultural Partners LLC, and only Greenfield Agricultural Partners LLC. Although the Firm may, in the course of this engagement, prepare documents on behalf of or for the benefit of affiliated entities of the Company — including, without limitation, Greenfield Holdings Corp. (a Delaware corporation), Greenfield Grain Storage LLC (an Iowa limited liability company), and Greenfield Crop Inputs Inc. (an Illinois corporation) — those entities are not clients of the Firm in connection with this engagement, and no attorney-client relationship will exist between the Firm and any such affiliated entity, unless a separate engagement letter or written joinder to this engagement letter is executed by the applicable entity and accepted by the Firm.
The Company further acknowledges and agrees that the Firm does not represent any lender, agent, arranger, or other party in connection with this matter. The Firm's duties of loyalty, confidentiality, and zealous representation run solely to Greenfield Agricultural Partners LLC in its capacity as the Borrower under the proposed ABL Facility.
4. Engagement Team and Key Personnel
The following attorneys have been assigned to the engagement team for this matter:
Responsible Partner: Ian Blackwood, Partner, Banking & Finance Practice Group. Mr. Blackwood will have overall supervisory responsibility for the engagement and will serve as the primary relationship partner for the Company. Mr. Blackwood has extensive experience representing borrowers, lenders, and agents in complex asset-based lending transactions, including agricultural ABL facilities, and has previously led numerous transactions involving seasonal borrowing base structures and multi-jurisdictional collateral packages.
Billing Partner: Stephanie Okafor, Partner, Banking & Finance Practice Group. Ms. Okafor will have responsibility for billing and fee matters in connection with this engagement and will serve as the Company's primary point of contact for all billing inquiries and fee-related issues. Ms. Okafor will also contribute substantively to the engagement as needed, particularly with respect to collateral documentation and perfection matters.
Lead Associate: Sophie Tremblay, Senior Associate, Banking & Finance Practice Group. Ms. Tremblay will serve as the primary day-to-day attorney on the engagement and will be responsible for drafting, reviewing, and marking up the definitive loan documentation, preparing the closing checklist and closing deliverables, and providing negotiation support throughout the documentation process.
Working Associate: Daniel Obi, Associate, Banking & Finance Practice Group. Mr. Obi will provide transactional support on the engagement, including coordination and review of due diligence materials, ordering and analyzing UCC searches and other lien searches, entity verification and organizational document review, and collateral analysis.
The Firm reserves the right to assign additional attorneys, paralegals, or other professional staff to this engagement as reasonably necessary to ensure the efficient and timely completion of the work. The Company will be notified in advance of any material changes to the composition of the engagement team, including the assignment of any additional partner or senior associate to the matter.
5. Fees and Billing Arrangements
5.1 Hourly Rates
The Firm will bill for its services in connection with this engagement on an hourly basis at the following current standard rates for the attorneys assigned to this matter:
Paralegal time incurred in connection with the engagement will be billed at rates ranging from $275 to $375 per hour, depending on the seniority and experience level of the paralegal assigned to the relevant task.
The rates set forth above are the Firm's standard rates as of January 1, 2022 and are subject to annual adjustment, which is typically effective January 1 of each calendar year. The Company will be notified in writing in advance of any rate increases. The Firm's current expectation is that, should the engagement extend beyond December 31, 2022, adjusted rates effective January 1, 2023 would apply to time incurred on or after that date.
5.2 Fee Estimate
Based on the Firm's current understanding of the scope of the engagement, including the complexity of a seasonal crop-inventory ABL structure, the multi-party syndicate arrangement (involving three lenders with potentially differing credit approval requirements), the breadth of the collateral package (encompassing both personal property and real property across multiple jurisdictions), the anticipated need for extensive borrowing base mechanics and eligibility criteria, and the additional complexities associated with the refinancing of the existing $55,000,000 revolving credit facility with Prairie National Bank, the Firm estimates that total legal fees for this engagement through closing will be in the range of Three Hundred Fifty Thousand Dollars ($350,000) to Four Hundred Fifty Thousand Dollars ($450,000).
This estimate assumes a customary negotiation process and closing timeline. Based on the preliminary discussions between the Firm and the Company, the current anticipated closing date for the ABL Facility is in or about October 2022. The fee estimate does not include disbursements or out-of-pocket expenses, which are addressed separately in Section 5.3 below.
The Company acknowledges and agrees that this estimate is not a cap on fees, is not a fixed fee, and is not a guaranteed maximum. The estimate is provided solely for the Company's internal budgeting purposes. Actual fees may vary, and may exceed the estimated range, based on a number of factors, including, without limitation, the complexity and duration of the transaction, the scope and intensity of negotiations with the Lenders and their counsel, the number of draft iterations required for the definitive loan documentation, the extent of collateral due diligence issues that arise, changes in the transaction structure or collateral package, the need for additional legal opinions or closing deliverables, and any delays in the anticipated closing timeline.
The Firm will endeavor to keep the Company informed on a timely basis if fees incurred or anticipated to be incurred appear likely to materially exceed the estimated range. The Firm encourages open communication regarding fees and budget at all stages of the engagement.
5.3 Disbursements and Expenses
In addition to professional fees, the Company will be responsible for reimbursement of all reasonable out-of-pocket disbursements and expenses incurred by the Firm in connection with the engagement, including, but not limited to, the following:
(a) UCC search fees, federal and state tax lien search fees, and judgment and litigation search fees;
(b) Filing fees, including UCC financing statement filing fees and mortgage recording fees and charges;
(c) Title search fees and title insurance premiums, if applicable;
(d) Good standing certificate and certified document fees from the offices of the Secretary of State or equivalent filing offices in the applicable jurisdictions;
(e) Travel expenses reasonably incurred by Firm attorneys in connection with the engagement, including coach-class airfare, reasonable hotel accommodations, and reasonable meal expenses, in each case in accordance with the Firm's standard travel expense policy;
(f) Courier, overnight delivery, and postage charges;
(g) Photocopying and printing charges, assessed at the Firm's standard rates; and
(h) Online legal research charges, assessed at cost.
Third-party vendor expenses, including fees charged by local counsel engaged in connection with real property matters, title company charges, and fees charged by search companies or other outside vendors, will be billed separately to the Company and are not included in the fee estimate set forth in Section 5.2 above. To the extent practicable, the Firm will consult with the Company before incurring any individual third-party expense in excess of $5,000.
6. Billing and Payment Terms
The Firm will issue monthly invoices to the Company for all professional fees and disbursements incurred during the preceding calendar month. Each invoice will contain a reasonable description of the services rendered and expenses incurred, and will reference Matter No. 1020-00001 and billing code GAPABF-2022 for the Company's internal tracking purposes.
All invoices are due and payable within thirty (30) days of the invoice date. The Firm reserves the right to charge interest at the rate of one percent (1.0%) per month (twelve percent (12%) per annum) on any amounts that remain unpaid more than sixty (60) days after the invoice date. The Firm's right to charge interest shall not constitute a waiver of any other rights or remedies available to the Firm with respect to unpaid invoices.
The Company may contact Stephanie Okafor at (312) 555-7845 or sokafor@calderwoodharkness.com with any billing inquiries, questions regarding invoices, or requests for additional billing detail.
7. Conflicts of Interest
The Firm has conducted a comprehensive conflicts check in connection with this proposed engagement, utilizing the Firm's conflicts database and cross-referencing the names and affiliates of all known parties to the transaction. Based on the results of that conflicts check, the Firm has determined that it does not currently represent any party adverse to Greenfield Agricultural Partners LLC in connection with this engagement.
Specifically, the Firm has confirmed that it does not currently represent Heartland Commerce Bank, National Association, Meridian Agricultural Credit Corporation, Tallgrass Capital Fund II, LP, Prairie National Bank, National Association, or Kessler, Brandt & Whitfield LLP in any matter that would create a conflict of interest with respect to this engagement under applicable rules of professional conduct.
The Company acknowledges, however, that Calderwood & Harkness LLP is a large, multi-office law firm with a diverse national and international practice, and that the Firm may currently represent, or may in the future represent, one or more of the lenders, agents, arrangers, or other parties involved in this transaction in matters wholly unrelated to this engagement. The Company hereby consents to such unrelated representations, provided that they do not create an actual conflict of interest with respect to this engagement and provided that the Firm maintains appropriate information barriers and other safeguards as required by applicable rules of professional conduct.
In the event that a conflict of interest arises during the course of the engagement, the Firm will promptly notify the Company and will take appropriate steps in accordance with applicable rules of professional conduct, which may include, depending on the nature and severity of the conflict, seeking an informed written waiver from the affected parties, implementing additional information barriers, or, if the conflict cannot be resolved, withdrawing from the engagement.
8. Confidentiality
The Firm will maintain the confidentiality of all information received from the Company in connection with this engagement, in accordance with applicable rules of professional conduct, the duty of attorney-client privilege, and the work product doctrine. The Firm's obligation of confidentiality extends to all documents, data, communications, and other information provided by the Company or generated by the Firm in the course of the representation, regardless of the form or medium in which such information is maintained.
The Company hereby authorizes the Firm to share confidential information with lender's counsel, Kessler, Brandt & Whitfield LLP, with the Administrative Agent, Heartland Commerce Bank, N.A., and with other transaction parties and their respective advisors, as reasonably necessary to carry out the engagement and to advance the negotiation, documentation, and closing of the ABL Facility. This authorization is consistent with customary practice in secured lending transactions, in which the borrower's counsel routinely shares drafts, comments, due diligence materials, closing deliverables, and legal opinions with lender's counsel and the administrative agent.
Except as set forth in the preceding paragraph, the Firm will not disclose confidential information to any third party without the Company's prior written consent, unless disclosure is required by law, court order, subpoena, or applicable rules of professional conduct. In the event the Firm receives a request or demand for disclosure of confidential information from any third party, the Firm will, to the extent permitted by law, promptly notify the Company and cooperate with the Company in seeking appropriate protective measures.
9. Document Retention
Upon completion or termination of the engagement, the Firm will retain client files, including both paper and electronic files, in accordance with the Firm's document retention policy. The Firm's current policy generally provides for retention of closed matter files for a period of ten (10) years following the close or dormancy of the matter, after which the Firm may destroy such files in the ordinary course without further notice to the Company, unless the Company has previously requested the return of the files.
The Company may request the return of original documents at any time during the engagement or during the retention period following the conclusion of the engagement. The Firm will comply with any such request within a reasonable time. The Company acknowledges that certain documents in the Firm's files may constitute the Firm's own work product or administrative records, which the Firm is not obligated to deliver to the Company.
Upon expiration of the applicable retention period, the Firm may destroy or dispose of all files and documents relating to this engagement without further notice to or consent of the Company, unless the Company has submitted a written request for return of the files prior to the expiration of the retention period.
10. Termination of Engagement
Either the Company or the Firm may terminate this engagement at any time upon written notice to the other party. No reason need be stated for such termination, and termination shall be effective upon receipt of such written notice, subject to the Firm's obligations under applicable rules of professional conduct.
Upon termination of the engagement, the Company will remain responsible for payment of all professional fees and disbursements incurred through the date of termination, in accordance with the billing and payment terms set forth in Section 6 of this letter. Any outstanding invoices shall remain due and payable in accordance with their terms.
The Firm will take reasonable steps to protect the Company's interests upon termination of the engagement, including, without limitation, facilitating an orderly transition of the matter to successor counsel selected by the Company, delivering all client materials and work product to the Company or its successor counsel, and cooperating with the Company in ensuring that no deadlines or other time-sensitive obligations are missed during the transition period.
The scope of this engagement is limited to the specific matter described in Section 2 of this letter. This engagement will be considered concluded upon the earlier of (a) the closing of the ABL Facility, (b) the abandonment or termination of the proposed transaction by the parties thereto, or (c) the termination of the engagement by either party pursuant to this Section 10. The conclusion of this engagement will not affect any obligations of the Company that have accrued prior to such conclusion, including the obligation to pay fees and disbursements for services rendered through the date of conclusion.
11. Governing Law
This engagement letter and the terms and conditions of the Firm's engagement by the Company shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to conflict-of-laws principles that would require the application of the laws of any other jurisdiction.
12. No Guarantee of Outcome
The Firm will use its best professional efforts to represent the Company's interests in connection with this engagement and to provide legal services of the highest quality. However, the Company acknowledges and agrees that the Firm does not, and cannot, guarantee any particular outcome or result in connection with this engagement, including, without limitation, the successful negotiation, documentation, or closing of the proposed ABL Facility. The outcome of any legal matter depends on numerous factors, many of which are beyond the control of the Firm, including the actions and decisions of the Lenders, the Administrative Agent, lender's counsel, and other third parties, as well as prevailing market conditions and other external circumstances.
13. Entire Agreement
This engagement letter constitutes the entire agreement between the Firm and the Company with respect to the subject matter hereof and supersedes all prior and contemporaneous discussions, negotiations, correspondence, and agreements, whether oral or written, relating to the Firm's engagement by the Company in connection with the proposed ABL Facility.
This engagement letter may not be amended, modified, or supplemented except by a written instrument executed by both the Firm and the Company. No waiver of any provision of this engagement letter shall be effective unless set forth in a writing signed by the party granting the waiver, and no such waiver shall constitute a waiver of any other provision or a continuing waiver of the same provision.
We are enthusiastic about the opportunity to work with Greenfield Agricultural Partners on this important transaction and are confident that the Firm's experience in agricultural asset-based lending will be a valuable resource to the Company throughout this process. If you have any questions about the terms of this engagement letter or any other aspect of the proposed representation, please do not hesitate to contact me directly at (312) 555-7812 or iblackwood@calderwoodharkness.com.
We look forward to hearing from you and to commencing work promptly upon your acceptance of this engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Ian Blackwood
Title: Partner, Banking & Finance Practice Group
Calderwood & Harkness LLP 150 North Michigan Avenue, Suite 3600 Chicago, Illinois 60601
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Greenfield Agricultural Partners LLC, hereby acknowledges receipt of the foregoing engagement letter, confirms that she has read and understands the terms and conditions set forth therein, and agrees to be bound thereby on behalf of the Company.
ACKNOWLEDGED AND AGREED:
GREENFIELD AGRICULTURAL PARTNERS LLC
By: ________
Name: Patricia Calloway
Title: Chief Financial Officer
Date: ________
cc:
Nina Vasquez, Esq., General Counsel and Corporate Secretary, Greenfield Agricultural Partners LLC Stephanie Okafor, Partner, Calderwood & Harkness LLP Sophie Tremblay, Senior Associate, Calderwood & Harkness LLP
Enclosure: Duplicate original for Company records
| Attorney | Position | Hourly Rate |
| Ian Blackwood | Partner | $1,150 per hour |
| Stephanie Okafor | Partner | $1,075 per hour |
| Sophie Tremblay | Senior Associate | $725 per hour |
| Daniel Obi | Associate | $575 per hour |