CALDERWOOD & HARKNESS LLP Attorneys at Law 600 Lexington Avenue New York, New York 10022
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
July 11, 2022
Thomas Reardon Managing Director, Leveraged Finance Ridgeline Securities LLC 399 Park Avenue South, 22nd Floor New York, New York 10016
Re: Expense Reimbursement Obligations — Purchase Agreement dated June 20, 2022, between Greenfield Agricultural Partners LLC and Ridgeline Securities LLC ($30,000,000 Senior Unsecured Notes due 2027) C&H Matter No. 1020-00003
Dear Mr. Reardon:
We write on behalf of our client, Greenfield Agricultural Partners LLC ("GAP"), an Iowa limited liability company, in connection with the above-referenced transaction. As you are aware, this firm represents GAP in its capacity as issuer under the Purchase Agreement described more fully below. The purpose of this letter is to formally acknowledge the termination of the Purchase Agreement and to confirm GAP's expense reimbursement obligations arising thereunder, as well as to set forth certain procedural matters relating to the submission and processing of invoices for reimbursable expenses. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement (as defined below).
Acknowledgment of Termination
Reference is made to that certain Purchase Agreement, dated as of June 20, 2022 (the "Purchase Agreement"), executed by and between Greenfield Agricultural Partners LLC, as issuer, and Ridgeline Securities LLC ("Ridgeline"), as initial purchaser. The Purchase Agreement related to the proposed purchase and resale by Ridgeline of $30,000,000 aggregate principal amount of GAP's senior unsecured notes due June 30, 2027 (the "Notes"), which were to be offered and sold in a private placement to qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.
We hereby acknowledge receipt of Ridgeline's formal written termination notice dated July 1, 2022 (the "Termination Notice"), in which Ridgeline exercised its right to terminate the Purchase Agreement pursuant to Section 9(b) thereof. Section 9(b) of the Purchase Agreement provides Ridgeline with the right to terminate its obligations thereunder under certain specified market conditions (commonly referred to as the "market out" provision). GAP accepts and acknowledges that the Purchase Agreement has been terminated effective as of July 1, 2022 (the "Termination Date"), and that neither party has any obligation to proceed with the closing of the transactions contemplated thereby, except as otherwise expressly provided herein with respect to surviving provisions.
For the avoidance of doubt, and as both parties are aware, the offering contemplated by the Purchase Agreement was not consummated. No Notes were issued, sold, delivered, or settled. The placement fee of 2.50% of the aggregate principal amount of the Notes (equal to $750,000) was not earned by Ridgeline and is not payable by GAP. Additionally, we note that the CUSIP number (39572L AA 3) and ISIN (US39572LAA35) reservations that were obtained from the CUSIP Service Bureau in connection with the proposed issuance of the Notes were never activated, and GAP understands that the appropriate steps will be taken by Ridgeline and its agents to cancel such reservations in due course.
Surviving Obligations — Expense Reimbursement Under Section 7
Notwithstanding the termination of the Purchase Agreement, certain provisions thereof expressly survive termination in accordance with their respective terms. Among such surviving provisions, and of particular relevance to this correspondence, are GAP's expense reimbursement obligations set forth in Section 7 of the Purchase Agreement. GAP hereby confirms its acknowledgment of, and its continuing obligation to perform under, Section 7 of the Purchase Agreement with respect to the reimbursement of expenses incurred by Ridgeline in connection with the offering, as more particularly described below.
Pursuant to Section 7 of the Purchase Agreement, GAP has agreed to reimburse Ridgeline for the following categories of expenses actually and reasonably incurred in connection with the proposed offering and sale of the Notes:
(a) Initial Purchaser's Counsel Fees. Fees and disbursements of Pryor, Glendenning & Haas LLP ("PGH"), counsel to Ridgeline Securities LLC, incurred in connection with the preparation, negotiation, execution, and delivery of the Purchase Agreement and the related transaction documents, including the offering memorandum, and the performance of legal due diligence in connection therewith, up to a maximum aggregate amount of Two Hundred Twenty-Five Thousand Dollars ($225,000). This cap is inclusive of all fees, charges, and disbursements of PGH, including without limitation photocopying, filing fees, database charges, and similar administrative costs billed by PGH in connection with the engagement.
(b) Out-of-Pocket Expenses. Ridgeline's reasonable out-of-pocket expenses (excluding the counsel fees and disbursements covered under clause (a) above) actually incurred in connection with the proposed offering, up to a maximum aggregate amount of Fifty Thousand Dollars ($50,000). Such out-of-pocket expenses may include, without limitation, travel and lodging expenses incurred in connection with due diligence meetings and site visits, communication costs, printing and reproduction costs associated with the preparation and distribution of the preliminary and final offering memoranda, expenses associated with investor presentations and roadshow activities, and similar costs customarily incurred by an initial purchaser in connection with a Rule 144A offering of this nature.
GAP acknowledges and confirms that the foregoing expense caps — specifically, $225,000 with respect to counsel fees under clause (a) and $50,000 with respect to out-of-pocket expenses under clause (b) — apply regardless of whether the offering contemplated by the Purchase Agreement was consummated, as expressly provided in Section 7 of the Purchase Agreement. The aggregate maximum reimbursement obligation of GAP under Section 7 shall not, under any circumstances, exceed Two Hundred Seventy-Five Thousand Dollars ($275,000). GAP's obligation to reimburse Ridgeline for such expenses is not conditioned upon the closing of the offering or the issuance and delivery of the Notes, and such obligation survives the termination of the Purchase Agreement in full force and effect.
Indemnification Provisions
In addition to the expense reimbursement obligations described above, the parties acknowledge that the indemnification and contribution provisions set forth in Section 8 of the Purchase Agreement also survive termination of the Purchase Agreement, in accordance with their respective terms. GAP's indemnification obligations under Section 8 relate to, among other things, losses, claims, damages, and liabilities arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the offering memorandum or any related marketing materials, or arising out of any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case subject to the exceptions, limitations, and procedural requirements set forth in Section 8.
GAP expressly reserves all of its rights, defenses, and remedies under Section 8 of the Purchase Agreement, including without limitation any right to assert the defenses and limitations set forth therein. Nothing in this letter shall be construed as a waiver, modification, or amendment of any provision of Section 8, and GAP does not, by virtue of this letter, waive any defense, right, or remedy that may be available to it under Section 8 or otherwise at law or in equity.
Invoice Submission Requirements
In order to facilitate the prompt and orderly processing of expense reimbursement claims, we respectfully request that Ridgeline cause PGH to submit itemized invoices for all legal fees and disbursements incurred in connection with the transaction to the following address:
Calderwood & Harkness LLP 600 Lexington Avenue New York, New York 10022
Attention: Robert Adeyemi, Esq.
with a simultaneous copy delivered to:
Douglas Evanston General Counsel & Corporate Secretary Greenfield Agricultural Partners LLC 1420 Prairie Ridge Boulevard, Suite 300 Des Moines, Iowa 50309
PGH's invoices should be itemized with reasonable specificity, including the date on which services were rendered, a description of the services performed, the identity of the timekeeper who performed such services, the number of hours expended, and the applicable hourly rate, along with an itemization of any disbursements claimed. To the extent that PGH's standard billing practices include narrative descriptions of work performed, such descriptions should be included.
We further request that any invoices for Ridgeline's own out-of-pocket expenses (including, without limitation, travel, lodging, communication, printing, reproduction, and similar costs) be submitted separately from PGH's legal fee invoices, and that such invoices be accompanied by reasonable supporting documentation, such as receipts, vendor invoices, or internal expense reports, sufficient to permit GAP and this firm to verify the nature, amount, and reasonableness of the claimed expenses.
We respectfully request that all invoices — both for PGH's legal fees and disbursements and for Ridgeline's out-of-pocket expenses — be submitted within thirty (30) days of the date of this letter (i.e., on or before August 10, 2022). While GAP does not intend to assert a statute of limitations defense with respect to invoices received shortly after such date, the timely submission of all invoices will facilitate the efficient resolution of the parties' remaining obligations under the Purchase Agreement.
Upon receipt of properly documented and itemized invoices, GAP will endeavor to process reimbursement payments within fifteen (15) business days following such receipt, subject to review and verification by this firm and by GAP's finance department that the amounts claimed fall within the contractual caps set forth in Section 7 of the Purchase Agreement and are otherwise consistent with the terms thereof. Reimbursement payments will be made by wire transfer of immediately available funds to an account or accounts designated by Ridgeline, or by such other method as Ridgeline and GAP may mutually agree.
No Further Obligations
Other than the surviving obligations expressly referenced above — namely, GAP's expense reimbursement obligations under Section 7 of the Purchase Agreement and the indemnification and contribution obligations of the parties under Section 8 of the Purchase Agreement — neither GAP nor Ridgeline has any further duties, obligations, or liabilities to the other under or in connection with the Purchase Agreement. All other provisions of the Purchase Agreement that do not, by their terms, survive termination are hereby confirmed to have been terminated and to be of no further force or effect as of the Termination Date.
For the avoidance of doubt, this letter does not create, and is not intended to create, any new contractual obligations between GAP and Ridgeline, nor does it modify, amend, or supplement any surviving provision of the Purchase Agreement. This letter is intended solely to memorialize the parties' mutual understanding with respect to the matters described herein and to establish a procedural framework for the efficient processing of expense reimbursement claims.
Reservation of Rights
GAP expressly reserves all of its rights, claims, remedies, and defenses under the Purchase Agreement, at law, and in equity, and nothing in this letter shall be construed as a waiver, release, or relinquishment thereof. Without limiting the generality of the foregoing, GAP's acknowledgment of the termination of the Purchase Agreement and its confirmation of its expense reimbursement obligations under Section 7 thereof shall not be deemed or construed as an admission by GAP regarding the propriety, validity, or sufficiency of the grounds cited by Ridgeline in the Termination Notice as the basis for the exercise of its termination right under Section 9(b) of the Purchase Agreement. GAP takes no position in this letter with respect to whether the conditions precedent to Ridgeline's exercise of such termination right were satisfied as of the date of the Termination Notice, and reserves the right to assert any and all claims, arguments, and defenses with respect thereto in any appropriate forum, should the need arise.
We trust that the foregoing accurately reflects the parties' understanding with respect to the termination of the Purchase Agreement and the surviving expense reimbursement obligations. Should you or your colleagues at Ridgeline have any questions regarding this letter, the expense reimbursement process, or any other matter relating to the transaction, please do not hesitate to contact the undersigned, Robert Adeyemi, at Calderwood & Harkness LLP, at (212) 558-4217 or radeyemi@calderwoodharkness.com. We appreciate Ridgeline's professionalism and cooperation throughout the course of this transaction, and we look forward to working with you to bring these remaining matters to a prompt and amicable resolution.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Robert Adeyemi Partner, Capital Markets
On behalf of Greenfield Agricultural Partners LLC
cc (via email and first-class mail):
David Glendenning, Esq. Pryor, Glendenning & Haas LLP 51 West 52nd Street, 40th Floor New York, New York 10019
Douglas Evanston, General Counsel & Corporate Secretary Greenfield Agricultural Partners LLC 1420 Prairie Ridge Boulevard, Suite 300 Des Moines, Iowa 50309
Linda Shao-Perkins, Chief Financial Officer Greenfield Agricultural Partners LLC
Jennifer Kwon, Esq., Calderwood & Harkness LLP (billing partner)
Claire Dempsey, Esq., Calderwood & Harkness LLP