CALDERWOOD & HARKNESS LLP
NEW MATTER MEMORANDUM
CONFIDENTIAL — FOR INTERNAL USE ONLY
Date: August 29, 2022
Prepared by: Ian Blackwood, Responsible Partner, Banking & Finance Practice Group
Distribution:
Stephanie Okafor, Billing Partner Sophie Tremblay, Lead Associate Daniel Obi, Working Associate Office of General Counsel Finance/Billing Department Conflicts Department
Right-click to update Table of Contents
Section 1: Matter Information
Conflicts clearance was obtained on August 26, 2022, as documented in the internal Conflict Check Memorandum of the same date prepared by Daniel Obi and reviewed by Ian Blackwood. That memorandum confirmed the absence of any imputed or actual conflicts of interest with respect to the proposed client, the borrower's affiliates, the administrative agent, the syndicate lenders, the incumbent lender, or any other party to the proposed transaction. A copy of the Conflict Check Memorandum is maintained in the Conflicts Department's files and is cross-referenced herein for completeness. All team members should familiarize themselves with the contents of that memorandum to ensure ongoing compliance with the firm's conflicts-management policies.
Section 2: Client Information
2.1 Entity Overview
2.2 Business Description
Greenfield Agricultural Partners LLC is a vertically integrated agricultural enterprise engaged in row-crop production (corn, soybeans, and specialty grains), crop-input distribution (seed, fertilizer, and crop protection chemicals), grain storage and merchandising, and contract farming operations across the states of Iowa, Illinois, and Indiana. The company operates fourteen (14) grain elevators, three (3) regional distribution centers, and manages approximately 82,000 acres of farmland, both owned and leased, across its tri-state operating footprint.
Greenfield's operations span the agricultural value chain from production through post-harvest handling and merchandising. On the production side, the company manages row-crop cultivation on owned and leased acreage, contracting directly with landowners under a combination of cash-rent and crop-share lease arrangements. Through its subsidiary Greenfield Crop Inputs Inc., the company distributes seed, fertilizer, and crop protection chemicals to both its own farming operations and third-party agricultural producers in the region. Greenfield's subsidiary Greenfield Grain Storage LLC owns and operates the company's network of grain elevators, which provide commercial grain storage, drying, and merchandising services. The company's grain merchandising activities include the purchase of grain from third-party producers, storage under warehouse receipts, and sale into domestic and export commodity channels.
The geographic concentration in the central Corn Belt states of Iowa, Illinois, and Indiana provides the company with access to some of the most productive agricultural land in the United States. The company's diversified operations across production, input distribution, and grain handling create complementary revenue streams and natural hedging efficiencies, although they also present certain collateral complexity considerations that will be addressed in the context of the proposed credit facility.
2.3 Ownership Structure
Greenfield Agricultural Partners LLC is 100% owned by Greenfield Holdings Corp., a Delaware corporation. The details of the parent entity are as follows:
The equity ownership of Greenfield Holdings Corp. is held as follows:
• 62% — Lindstrom Family Trust, an Iowa irrevocable trust. The Lindstrom Family Trust was established by the Lindstrom family, co-founders of the Greenfield enterprise, and holds the controlling equity interest in Holdings. Marcus J. Lindstrom, CEO and Co-Founder of Greenfield, is a beneficiary of the trust.
• 28% — Calloway-Foss Investments LP, an Iowa limited partnership. Calloway-Foss Investments LP is the investment vehicle through which Patricia Calloway (CFO) and Raymond Foss (VP of Operations) hold their equity interests in the Greenfield enterprise.
• 10% — Management equity plan participants, consisting of key members of Greenfield's senior management team holding equity interests pursuant to the terms of the company's management equity incentive plan.
2.4 Financial Summary
The financial information set forth above has been provided by the client and, with respect to FY2021, is derived from audited financial statements prepared by Ashford, Kline & Pearce LLP, the company's independent auditors. The FY2022 revenue projection reflects management's estimates and has not been independently verified by Calderwood & Harkness. The projected revenue increase from FY2021 to FY2022 is attributable in large part to elevated commodity prices for corn and soybeans during the 2021–2022 crop year.
2.5 Primary Client Contacts
All substantive communications regarding the matter should be directed to or coordinated through Patricia Calloway and Nina Vasquez unless otherwise instructed. Marcus Lindstrom should be included on communications involving material business terms, pricing, or covenant negotiations requiring executive-level approval. Raymond Foss will serve as the primary point of contact for matters relating to operations, collateral descriptions, field examination logistics, insurance policies, and real property matters.
Section 3: Matter Description / Scope of Engagement
3.1 Engagement Overview
Calderwood & Harkness LLP has been engaged to represent Greenfield Agricultural Partners LLC ("GAP" or the "Borrower") as borrower's counsel in connection with the negotiation, documentation, and closing of a proposed $80,000,000 senior secured asset-based revolving credit facility (the "ABL Revolver" or the "Facility").
The Facility is being arranged by a new lending syndicate led by Heartland Commerce Bank, National Association ("HCB"), with its principal offices located at 200 South Wacker Drive, 40th Floor, Chicago, Illinois 60606. HCB will act in multiple capacities with respect to the proposed Facility, including as Administrative Agent, Collateral Agent, Sole Lead Arranger, and Sole Bookrunner.
3.2 Syndicate Composition
The proposed lending syndicate for the ABL Revolver is composed of three (3) lenders with commitments totaling $80,000,000. The individual commitments and pro rata shares are as follows:
The syndicate composition reflects a balanced mix of a national bank with an established agribusiness lending platform (HCB), a specialty agricultural credit institution (Meridian), and a private credit fund with experience in asset-based and agricultural lending (Tallgrass). This structure should provide the Borrower with a stable and diversified lending group.
3.3 Purpose of the Facility
The proceeds of the ABL Revolver will be used for the following purposes:
(i) Refinancing. To refinance and repay in full the existing $55,000,000 revolving credit facility with Prairie National Bank, National Association ("PNB"). As of the anticipated payoff date (estimated September 30, 2022), the outstanding balance under the existing PNB facility is approximately $38,750,000. The existing PNB facility matures on March 31, 2023, and the Borrower has determined to refinance the facility in advance of its maturity in order to secure improved terms, increased availability, and a longer-dated commitment.
(ii) Seasonal Working Capital. To fund seasonal working capital needs associated with the Borrower's agricultural operations, including the purchase of seed, fertilizer, crop protection chemicals, and other crop inputs in advance of the spring planting season. The Borrower's working capital cycle is characterized by significant seasonal swings in both inventory levels and accounts receivable, necessitating a revolving credit structure with borrowing base flexibility.
(iii) General Corporate Purposes. To fund general corporate purposes of the Borrower, including operational expenses, maintenance capital expenditures, and other ordinary course business needs.
3.4 Key Structural Features
The ABL Revolver will be structured as a borrowing-base-driven revolving credit facility with availability determined by the value of eligible collateral categories. The borrowing base will be composed of the following asset categories:
• Eligible accounts receivable
• Eligible crop inventory (harvested grain)
• Eligible crop-input inventory (seed, fertilizer, crop protection chemicals)
• Eligible grain warehouse receipts
Advance rates and valuation methodologies for each collateral category are described in further detail in Section 8 of this memorandum. The Facility will be governed by the laws of the State of Illinois, consistent with the Administrative Agent's principal place of business and the customary governing law for syndicated credit facilities arranged by Chicago-based financial institutions.
The proposed maturity date is four (4) years from closing. Based on the current anticipated closing timeline of late October or November 2022, the maturity date would fall in October or November 2026, as applicable.
3.5 Scope of Work
Calderwood & Harkness's scope of engagement encompasses the following work streams in connection with the negotiation, documentation, and closing of the ABL Revolver:
1. Term Sheet Review. Review and provide comments on the indicative term sheet delivered by HCB on August 22, 2022, identifying areas for negotiation and markup from the Borrower's perspective.
2. Credit Agreement Negotiation. Negotiate, review, and markup all drafts of the Credit Agreement and related ancillary loan documents prepared by lender's counsel, Kessler, Brandt & Whitfield LLP ("KBW"). This will include detailed markup and negotiation of definitions, borrowing base mechanics, conditions precedent, representations and warranties, affirmative and negative covenants, events of default, and agency provisions.
3. Borrower-Side Document Preparation. Prepare borrower-side ancillary documents, including but not limited to: the Security Agreement (covering personal property collateral), the Guaranty Agreement (from subsidiary guarantors and parent guarantor), the Pledge Agreement (covering equity interests in GGS and GCI), mortgages and deeds of trust (covering the 14 grain elevator sites and 3 distribution centers), Deposit Account Control Agreements ("DACAs") with depository banks, and assignments of insurance proceeds (crop insurance and business interruption insurance).
4. UCC and Lien Analysis. Conduct comprehensive UCC searches in all relevant filing jurisdictions (Iowa, Illinois, Indiana, and Delaware), analyze existing lien filings, and prepare a collateral perfection matrix to confirm first-priority perfected security interest status for the benefit of the Administrative Agent.
5. Entity Authorization and Organizational Review. Coordinate the preparation and delivery of entity authorization documents (board resolutions, member consents, officer's certificates) for all loan parties, obtain good standing certificates from all relevant jurisdictions, and review organizational documents (operating agreements, bylaws, certificates of formation/incorporation) for consistency with the proposed credit documentation.
6. Legal Opinion. Prepare and deliver the borrower's counsel legal opinion to be delivered at closing, including opinions as to due authorization, enforceability, no conflicts, perfection of security interests, and such other matters as may be reasonably required by the Administrative Agent and its counsel.
7. Field Examination and Auditor Coordination. Coordinate with the field examination firm (Pryor & Associates LLC) and the Borrower's independent auditors (Ashford, Kline & Pearce LLP) as necessary to facilitate the field examination process and address any information requests or follow-up items arising from the field examination.
8. Closing Management. Manage the closing process, including preparation of closing checklists and signature pages, coordination of funds flow (including payoff of the existing PNB facility), preparation of the funds flow memorandum, and administration of post-closing deliverables (including post-closing mortgage recordings, UCC filings, insurance endorsements, and other items to be completed within specified time periods following closing).
Section 4: Related Entities / Loan Parties
In addition to the Borrower, the proposed ABL Revolver will require guaranty and collateral support from the following related entities (collectively with the Borrower, the "Loan Parties"):
4.1 Subsidiary Guarantors / Grantors
4.1.1 Greenfield Grain Storage LLC ("GGS")
Role in Transaction: GGS owns and operates the Borrower's network of fourteen (14) grain elevator facilities located across Iowa, Illinois, and Indiana. In connection with the ABL Revolver, GGS will serve as a subsidiary guarantor of the Borrower's obligations under the Credit Agreement and as a grantor of collateral, including real property interests in the grain elevator sites, equipment located at such sites, and stored grain inventory held at the elevators. GGS's grain elevator real property and associated equipment represent a significant portion of the fixed-asset collateral securing the Facility.
The grain storage operations conducted by GGS generate revenue through commercial storage fees, grain drying charges, and merchandising margins on grain purchased and sold through the elevator network. GGS also holds warehouse receipts for grain stored on behalf of third-party depositors, which introduces certain regulatory and priority considerations under applicable state warehouse laws (Iowa Code Chapter 203C and analogous provisions in Illinois and Indiana) that will need to be analyzed in the context of the collateral and perfection review.
4.1.2 Greenfield Crop Inputs Inc. ("GCI")
Role in Transaction: GCI operates the crop-input distribution business of the Greenfield enterprise, selling seed, fertilizer, and crop protection chemicals to both the Borrower's farming operations and third-party agricultural producers in the region. GCI will serve as a subsidiary guarantor of the Borrower's obligations under the Credit Agreement. GCI is a significant contributor to the accounts receivable component of the borrowing base, as its distribution business generates substantial trade receivables from third-party agricultural customers, particularly during the spring planting season. The seasonal concentration of GCI's receivables and inventory will be a key consideration in the borrowing base structure and the establishment of appropriate availability reserves.
4.2 Parent Guarantor
4.2.1 Greenfield Holdings Corp. ("Holdings")
Role in Transaction: Holdings is the parent holding company and sole member of GAP. In connection with the ABL Revolver, Holdings will serve as a guarantor of the Borrower's obligations under the Credit Agreement. As a holding company, Holdings does not conduct independent business operations and its primary asset is its 100% membership interest in GAP. The pledge of Holdings' membership interest in GAP is not currently contemplated as part of the collateral package (as the equity pledge will cover GAP's equity interests in the subsidiary entities GGS and GCI); however, the Administrative Agent may request a downstream pledge from Holdings of its membership interest in GAP, and this point should be addressed during term sheet and credit agreement negotiations.
Section 5: Adverse Parties and Counterparties
5.1 Lender's Counsel
KBW has been retained by HCB as lender's counsel to prepare the initial draft of the Credit Agreement and ancillary loan documents. KBW is a nationally recognized firm with a well-regarded asset-based lending practice. Calderwood & Harkness has worked opposite KBW on multiple prior transactions, and we anticipate a professional and efficient negotiation process. Richard Whitfield is an experienced ABL practitioner with significant agricultural lending experience, and Lauren Chisholm has been identified as the primary associate responsible for document drafting on the lender's side.
All communications with lender's counsel should be coordinated through Sophie Tremblay (Lead Associate) in the first instance, with Ian Blackwood to be involved in substantive negotiation discussions and calls. Daniel Obi will handle document review, markup preparation, and due diligence coordination.
5.2 Incumbent Lender (Payoff Bank)
PNB is the incumbent lender under the existing revolving credit facility being refinanced in connection with the proposed ABL Revolver. The existing facility details are as follows:
• Facility: $55,000,000 revolving credit agreement dated April 1, 2018, as amended from time to time
• Outstanding Balance (estimated as of September 30, 2022): Approximately $38,750,000
• Maturity Date: March 31, 2023
• Existing UCC Filings: Iowa Secretary of State Filing Nos. 2018-0041729 and 2018-0041730 (both filed April 2, 2018)
In connection with the closing of the ABL Revolver, it will be necessary to obtain a payoff letter from PNB confirming the full payoff amount and providing for the release and termination of all existing UCC financing statements and other liens and security interests held by PNB. UCC-3 termination statements will need to be filed with the Iowa Secretary of State and any other applicable filing offices upon receipt of the payoff letter. Coordination with PNB on the payoff process will be managed through the Borrower's CFO, Patricia Calloway, who maintains the existing banking relationship, with Calderwood & Harkness reviewing all payoff documentation and termination filings.
Section 6: Key Third Parties
The following third parties are anticipated to play significant roles in the transaction:
6.1 Administrative Agent / Lead Arranger
Heartland Commerce Bank, National Association 200 South Wacker Drive, 40th Floor, Chicago, Illinois 60606
Gregory Thorn is the senior relationship manager at HCB responsible for the overall credit relationship with Greenfield. Allison Kuo is responsible for the structuring and borrowing base mechanics of the ABL Revolver and will be the primary bank contact for technical and structural issues. Derek Nolan will handle credit analysis and due diligence matters on the bank side.
6.2 Syndicate Lenders
Meridian Agricultural Credit Corporation ("MACC") 555 East Wells Street, Suite 1200, Milwaukee, Wisconsin 53202
MACC is a specialty agricultural credit institution that provides financing to agribusiness enterprises throughout the Midwest. Franklin Osei is the primary contact for the Meridian participation.
Tallgrass Capital Fund II, LP 120 South LaSalle Street, Suite 2800, Chicago, Illinois 60603
Tallgrass Capital Fund II, LP is a private credit fund focused on asset-based and agricultural lending. Monica Herrera is the lead investment professional responsible for the Tallgrass commitment to the Facility.
6.3 Field Examiner / Appraiser
Pryor & Associates LLC 1200 Prospect Avenue, Suite 700, Cleveland, Ohio 44115
Pryor & Associates has been selected by HCB to conduct the field examination and collateral appraisal in connection with the proposed ABL Revolver. The field examination is expected to be engaged in September 2022 and will cover the Borrower's accounts receivable, inventory (including grain storage and crop-input inventory), grain warehouse receipt management, and real property and equipment appraisals for the grain elevator sites and distribution centers. The field examination report will be a condition precedent to closing. Calderwood & Harkness will coordinate with the Borrower's finance team and operations personnel to facilitate the field examination process and will review the field examination report upon its completion.
6.4 Independent Auditors
Ashford, Kline & Pearce LLP 801 Grand Avenue, Suite 2200, Des Moines, Iowa 50309
Ashford, Kline & Pearce LLP serves as the independent auditor for the Greenfield enterprise and prepared the audited financial statements for FY2021. The firm may be asked to provide comfort letters, respond to auditor inquiries from the Administrative Agent, or provide other assistance in connection with the closing of the Facility.
6.5 Insurance Professionals
Insurance Broker
Redwood Insurance Group, Inc. 2500 Ingersoll Avenue, Des Moines, Iowa 50312
Crop & Property Insurer
Northstar Mutual Insurance Company 400 First Avenue NE, Cedar Rapids, Iowa 52401
Brian Templeton at Redwood Insurance Group is the Borrower's insurance broker and will coordinate the delivery of insurance certificates, endorsements (including lender loss payee and additional insured endorsements), and assignments of crop insurance and business interruption insurance proceeds required under the credit documentation. Northstar Mutual Insurance Company is the Borrower's primary crop and property insurance carrier. Calderwood & Harkness will review all insurance certificates and endorsements to confirm compliance with the insurance requirements of the Credit Agreement.
Section 7: Staffing and Billing Information
7.1 Engagement Team
The following attorneys have been assigned to this matter:
Ian Blackwood will serve as the Responsible Partner with overall supervisory responsibility for the engagement and will lead substantive negotiations with lender's counsel. Stephanie Okafor will serve as the Billing Partner with responsibility for billing administration, fee management, and client account oversight. Sophie Tremblay will serve as Lead Associate with primary responsibility for day-to-day management of the transaction, including document review, markup, and negotiation support. Daniel Obi will serve as Working Associate responsible for due diligence, UCC search analysis, organizational document review, entity authorization preparation, and closing mechanics.
Additional staffing resources (including real estate associates, paralegals, and legal assistants) may be engaged as needed, particularly in connection with real property matters (mortgage preparation, title review, and environmental diligence) and closing logistics. Any material changes to the engagement team or the addition of significant staffing resources will be communicated to the client in advance.
7.2 Fee Arrangement
The fee estimate of $350,000 to $450,000 represents Calderwood & Harkness's good-faith estimate of the total professional fees anticipated for the full scope of work described in Section 3.5 above, from engagement through closing of the ABL Revolver. This estimate is based on assumptions regarding the complexity and duration of negotiations, the number of markup rounds, the scope of collateral and real property work required, and a closing timeline consistent with the anticipated timeline set forth in Section 9. The estimate does not include disbursements and out-of-pocket costs (including, without limitation, UCC search fees, filing fees, title and survey costs, travel expenses, and overnight courier charges), which will be billed separately.
The actual fees incurred may vary from the estimate depending on the complexity and duration of negotiations, the scope of issues raised during the field examination, the number of real property matters requiring attention, and other factors. Calderwood & Harkness will provide periodic updates to the client regarding the status of fees and costs incurred and will promptly notify the client if it appears that actual fees may materially exceed the estimated range.
All invoices will be directed to Patricia "Trish" Calloway, CFO, Greenfield Agricultural Partners LLC, at the client's headquarters address set forth in Section 2 of this memorandum, or via electronic delivery as instructed by Ms. Calloway.
Section 8: Key Transaction Terms (Summary)
The following is a summary of the key terms of the proposed ABL Revolver as set forth in the indicative term sheet delivered by HCB on August 22, 2022. These terms are subject to negotiation and may be modified in the course of term sheet and credit agreement negotiations.
8.1 Facility Amount
$80,000,000 senior secured asset-based revolving credit facility.
8.2 Collateral
The ABL Revolver will be secured by a first-priority perfected security interest in substantially all assets of the Borrower (GAP) and the subsidiary guarantors (GGS and GCI), including the following:
• Accounts receivable — all existing and after-acquired accounts receivable of the Loan Parties
• Inventory — all existing and after-acquired inventory, including harvested grain, crop inputs (seed, fertilizer, crop protection chemicals), and grain warehouse receipts
• Equipment — all existing and after-acquired equipment of the Loan Parties, including grain handling, drying, and storage equipment located at the elevator sites and distribution centers
• Deposit accounts — all deposit accounts of the Loan Parties, subject to DACAs
• General intangibles — all general intangibles, including payment intangibles, contract rights, and intellectual property
• Proceeds — all proceeds of the foregoing
In addition, the collateral package will include:
• Real property mortgages — first-priority mortgages on the fourteen (14) grain elevator sites and three (3) distribution centers owned by GGS, with an aggregate appraised value of approximately $64.8 million (subject to updated appraisals to be obtained in connection with the field examination)
• Equity pledge — pledge of 100% of the equity interests in GGS and GCI held by GAP
• Insurance assignments — assignment of crop insurance proceeds and business interruption insurance proceeds
The collateral and perfection structure will require UCC filings in Iowa, Illinois, Indiana, and Delaware, as well as mortgage recordings in each county in which a mortgaged property is located. Calderwood & Harkness will prepare a comprehensive collateral perfection matrix identifying all required filings, recordings, and other perfection steps.
8.3 Borrowing Base
The borrowing base for the ABL Revolver will be calculated as the sum of the following eligible collateral categories, subject to applicable advance rates and reserves:
The borrowing base will be subject to availability reserves as determined by the Administrative Agent in its reasonable credit judgment, which may include reserves for rent, dilution, environmental liabilities, seasonal adjustments, and other customary ABL reserves. The specific eligibility criteria for each collateral category (including concentration limits, aging standards, cross-aging provisions, and excluded receivable and inventory categories) will be defined in detail in the Credit Agreement and are expected to be a significant area of negotiation.
8.4 Pricing
The SOFR-based pricing structure reflects the transition from LIBOR to SOFR as the benchmark reference rate. The applicable margin grid provides for lower margins at higher levels of excess availability, incentivizing the Borrower to maintain adequate cushion between borrowing base availability and outstanding borrowings. Specific grid levels and thresholds will be negotiated during the term sheet and credit agreement negotiations.
8.5 Key Covenants
The Credit Agreement is expected to include the following key financial and negative covenants:
• Springing Fixed Charge Coverage Ratio: Minimum fixed charge coverage ratio of 1.10:1.00, tested only during a "Trigger Period" (defined as any period during which excess availability falls below a specified threshold, expected to be the greater of 10% of the borrowing base or a fixed dollar amount). This springing covenant structure is consistent with customary ABL practice and avoids imposing ongoing financial covenant testing during periods of adequate excess availability.
• Minimum Excess Availability: The Borrower will be required to maintain minimum excess availability of $5,000,000 at all times. Excess availability below this threshold would constitute an event of default.
• Negative Covenants / Limitations: The Credit Agreement is expected to include customary ABL negative covenants, including limitations on distributions (dividends and equity redemptions), capital expenditures, investments, additional indebtedness, and change of control. The specific baskets, thresholds, and carve-outs applicable to these negative covenants will be a significant area of negotiation, and Calderwood & Harkness will seek to obtain maximum operational flexibility for the Borrower within the customary parameters for a transaction of this nature.
8.6 Maturity
Four (4) years from the closing date. Based on the current anticipated closing timeline of late October to November 2022, the maturity date is expected to fall in October or November 2026, as applicable.
Section 9: Anticipated Timeline
The following is the currently anticipated timeline for the transaction. All dates are approximate and subject to adjustment based on the progress of negotiations, the field examination schedule, and other factors.
The target closing date is subject to the satisfactory completion of several key workstreams, including: (i) agreement on all material terms of the Credit Agreement and ancillary documents; (ii) completion of the field examination by Pryor & Associates and receipt of a satisfactory field examination report; (iii) completion of collateral perfection steps; (iv) receipt of payoff letter from PNB; and (v) satisfaction of all conditions precedent to closing as specified in the Credit Agreement. Calderwood & Harkness will work to maintain an aggressive timeline while ensuring that the Borrower's interests are fully protected in the negotiation process.
Section 10: Special Instructions / Notes
The following special instructions and notes are applicable to this engagement and should be observed by all members of the engagement team:
1. Scope of Representation. This engagement involves the representation of the Borrower only. Calderwood & Harkness does not represent any lender, the Administrative Agent, the Collateral Agent, or any other party to the proposed ABL Revolver. All team members should be mindful of this scope limitation and should not engage in any communications or actions that could be construed as creating an attorney-client relationship with any party other than GAP and its affiliates.
2. Conflicts Clearance. Conflicts clearance was completed on August 26, 2022, as documented in the separate Conflict Check Memorandum of the same date. No conflicts were identified with respect to GAP, Greenfield Holdings Corp., Heartland Commerce Bank, N.A., Meridian Agricultural Credit Corporation, Tallgrass Capital Fund II, LP, or Prairie National Bank, N.A. The engagement team should promptly report any potential conflicts that may arise during the course of the engagement, including any new client relationships or matters involving any of the foregoing parties.
3. Initial Client Contact. Initial client contact was made on August 15, 2022, when Patricia Calloway, CFO of Greenfield Agricultural Partners LLC, contacted Ian Blackwood regarding the potential new ABL facility. Following preliminary discussions regarding the scope and structure of the proposed transaction, Calderwood & Harkness was formally retained pursuant to the engagement letter dated August 29, 2022.
4. Time Entry Requirements. All time entries for this engagement should reference Matter No. 1020-00001 and billing code GAPABF-2022. Time entries should include meaningful task descriptions that clearly identify the nature of the work performed, consistent with the firm's billing guidelines and the client's billing requirements.
5. Document Management. All documents related to this engagement are to be filed in the firm's document management system under Matter No. 1020-00001 with appropriate sub-coding by document type (e.g., correspondence, credit agreement drafts, ancillary documents, due diligence, opinion drafts, closing documents). Team members should ensure that all documents are properly classified and indexed to facilitate efficient retrieval and to maintain a complete record of the engagement.
6. Confidentiality. All information relating to this engagement, including the identity of the client, the terms of the proposed transaction, and all documents and communications, is confidential and should be treated in accordance with the firm's confidentiality policies and the confidentiality provisions of the engagement letter. Team members should exercise care in handling and transmitting confidential information and should not discuss the engagement with persons outside the engagement team without prior authorization from the Responsible Partner.
Section 11: Approvals and Signatures
This New Matter Memorandum has been prepared and approved as set forth below.
OPENED BY:
________________________________________
Ian Blackwood Responsible Partner, Banking & Finance Calderwood & Harkness LLP
Date: August 29, 2022
BILLING PARTNER APPROVAL:
________________________________________
Stephanie Okafor Billing Partner, Banking & Finance Calderwood & Harkness LLP
Date: ________
CONFLICTS CLEARANCE CONFIRMATION:
Conflicts clearance for this matter was completed on August 26, 2022, as documented in the Conflict Check Memorandum of the same date, prepared by Daniel Obi and reviewed by Ian Blackwood. No conflicts were identified.
________________________________________
Daniel Obi Working Associate, Banking & Finance Calderwood & Harkness LLP
Date: August 26, 2022
________________________________________
Ian Blackwood Responsible Partner, Banking & Finance Calderwood & Harkness LLP
Date: August 26, 2022
CONFIDENTIAL — FOR INTERNAL USE ONLY Calderwood & Harkness LLP — New Matter Memorandum — Matter No. 1020-00001 This memorandum is intended solely for internal use by authorized personnel of Calderwood & Harkness LLP. Distribution is limited to the individuals and departments listed on the cover page. Any unauthorized distribution or disclosure is strictly prohibited.
| Field | Detail |
| Matter Number | 1020-00001 |
| Billing Code | GAPABF-2022 |
| Office | Chicago — 150 North Michigan Avenue, Suite 3600, Chicago, Illinois 60601 |
| Practice Group | Banking & Finance |
| Matter Type | Asset-Based Lending — Borrower-Side Representation |
| Date Opened | August 29, 2022 |
| Engagement Letter Date | August 29, 2022 |
| Conflicts Clearance Date | August 26, 2022 |
| Field | Detail |
| Client Name | Greenfield Agricultural Partners LLC |
| Short Name / Acronym | Greenfield / GAP |
| Entity Type | Iowa limited liability company |
| EIN | 47-3918265 |
| Iowa Secretary of State Filing No. | 622847 |
| Headquarters Address | 4100 Grand Prairie Boulevard, Suite 300, Des Moines, Iowa 50309 |
| Registered Agent | Capitol Registered Agents, Inc., 221 East Walnut Street, Des Moines, Iowa 50309 |
| Field | Detail |
| Parent Entity Name | Greenfield Holdings Corp. |
| Entity Type | Delaware corporation |
| EIN | 82-5047391 |
| Delaware Secretary of State File No. | 7291538 |
| Registered Address | 1209 Orange Street, Wilmington, Delaware 19801 (c/o National Corporate Services Inc.) |
| Metric | Amount |
| Annual Revenue (FY2021) | $347.2 million (per audited financials by Ashford, Kline & Pearce LLP) |
| Annual Revenue (FY2022 projected) | $391.5 million | ||
| Total Assets (as of June 30, 2022) | $289.6 million | ||
| Name | Title | Role in Matter | |
| Marcus J. Lindstrom | CEO, Co-Founder | Executive sponsor; approval authority for key business terms | |
| Patricia "Trish" Calloway | CFO | Primary day-to-day contact for this matter; billing contact | |
| Nina Vasquez | General Counsel and Corporate Secretary | Legal counterpart; responsible for entity-level authorizations and organizational documents | |
| Raymond Foss | VP of Operations | Operational matters; collateral and asset-related inquiries | |
| Lender | Commitment | Pro Rata Share | Headquarters |
| Heartland Commerce Bank, N.A. | $40,000,000 | 50.00% | 200 South Wacker Drive, 40th Floor, Chicago, Illinois 60606 |
| Meridian Agricultural Credit Corporation | $25,000,000 | 31.25% | 555 East Wells Street, Suite 1200, Milwaukee, Wisconsin 53202 |
| Tallgrass Capital Fund II, LP | $15,000,000 | 18.75% | 120 South LaSalle Street, Suite 2800, Chicago, Illinois 60603 |
| Total | $80,000,000 | 100.00% | |
| Field | Detail | ||
| Entity Type | Iowa limited liability company | ||
| EIN | 84-2093417 | ||
| Headquarters | 4100 Grand Prairie Boulevard, Suite 310, Des Moines, Iowa 50309 | ||
| Ownership | Wholly owned subsidiary of Greenfield Agricultural Partners LLC | ||
| Field | Detail | ||
| Entity Type | Illinois corporation | ||
| EIN | 37-6182049 | ||
| Illinois Secretary of State File No. | 08294731 | ||
| Headquarters | 780 Commerce Drive, Bloomington, Illinois 61701 | ||
| Ownership | Wholly owned subsidiary of Greenfield Agricultural Partners LLC | ||
| Field | Detail | ||
| Entity Type | Delaware corporation |
| EIN | 82-5047391 |
| Delaware Secretary of State File No. | 7291538 |
| Registered Address | 1209 Orange Street, Wilmington, Delaware 19801 (c/o National Corporate Services Inc.) |
| Ownership | See Section 2.3 above |
| Field | Detail |
| Firm Name | Kessler, Brandt & Whitfield LLP ("KBW") |
| Address | 311 South Wacker Drive, Suite 5400, Chicago, Illinois 60606 |
| Lead Partner | Richard Whitfield |
| Senior Associate | Lauren Chisholm |
| Field | Detail |
| Institution Name | Prairie National Bank, National Association ("PNB") |
| Address | 600 Locust Street, Suite 1500, Des Moines, Iowa 50309 |
| Contact | Janet Braddock, Senior Vice President, Agricultural Banking |
| Contact | Title |
| Gregory Thorn | Managing Director, Agribusiness Lending |
| Allison Kuo | Vice President, ABL Structuring |
| Derek Nolan | Associate, Credit Analysis |
| Contact | Title |
| Franklin Osei | Senior Vice President, Structured Ag Lending |
| Contact | Title |
| Monica Herrera | Partner, Credit Investments |
| Contact | Title |
| Thomas Pryor | Managing Partner |
| Contact | Title |
| Catherine Drummond | Audit Partner |
| Contact | Title | ||
| Brian Templeton | Account Executive | ||
| Role | Name | Practice Group | Hourly Rate (2022) |
| Responsible Partner | Ian Blackwood | Banking & Finance | $1,150/hr |
| Billing Partner | Stephanie Okafor | Banking & Finance | $1,075/hr |
| Lead Associate | Sophie Tremblay | Banking & Finance | $725/hr |
| Working Associate | Daniel Obi | Banking & Finance | $575/hr |
| Item | Detail | ||
| Billing Basis | Hourly rates as set forth in the engagement letter dated August 29, 2022 | ||
| Fee Estimate (Full Transaction Through Closing) | $350,000 – $450,000 | ||
| Billing Frequency | Monthly | ||
| Client Billing Contact | Patricia "Trish" Calloway, CFO, Greenfield Agricultural Partners LLC | ||
| Collateral Category | Advance Rate / Valuation | ||
| Eligible Accounts Receivable | 85% of face value of eligible AR | ||
| Eligible Crop Inventory | 65% of Net Orderly Liquidation Value ("NOLV") | ||
| Eligible Crop-Input Inventory | 70% of lower of cost or market value | ||
| Eligible Warehouse Receipts | 80% of current market value | ||
| Component | Terms | ||
| Interest Rate | SOFR + applicable margin | ||
| Applicable Margin | Grid ranging from 2.00% to 2.50%, based on average excess availability | ||
| SOFR Floor | 0.50% | ||
| Unused Line Fee | 0.375% per annum on the undrawn portion of the total commitment | ||
| Date / Period | Milestone | ||
| August 22, 2022 | HCB indicative term sheet delivered to Borrower | ||
| August 29, 2022 | Engagement opened; engagement letter executed by Calderwood & Harkness and GAP |
| September 2022 | Calderwood & Harkness delivers term sheet comments and negotiation marks; receipt of initial draft Credit Agreement from KBW anticipated |
| October 2022 | Credit Agreement markup rounds; negotiation calls between Calderwood & Harkness and KBW; field examination by Pryor & Associates conducted at Borrower's facilities |
| October – November 2022 | Preparation of ancillary documents (security agreements, mortgages, guaranties, DACAs, insurance assignments, legal opinions); closing preparation, including signature pages, closing checklist, and funds flow memorandum |
| Late October / November 2022 (Target) | Closing of ABL Revolver; funding of initial borrowing; payoff of existing PNB facility; recording of mortgages and filing of UCC financing statements |