CALDERWOOD & HARKNESS LLP Attorneys at Law 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com
March 22, 2022
VIA EMAIL AND FIRST CLASS MAIL
Thomas R. Greenfield Chairman and Chief Executive Officer Greenfield Agricultural Partners LLC 1400 Grand Prairie Boulevard, Suite 800 Des Moines, Iowa 50309
Dear Mr. Greenfield:
Thank you for selecting Calderwood & Harkness LLP to represent Greenfield Agricultural Partners LLC in this matter. We are pleased to undertake the engagement described in this letter and look forward to working with you and your team. The purpose of this letter is to set forth the terms and conditions under which the Firm will provide legal services to your organization. We ask that you review these terms carefully and, if they are acceptable, sign and return a copy of this letter as indicated below.
1. Purpose and Engagement
This letter confirms that Greenfield Agricultural Partners LLC ("GAP" or the "Company") has retained Calderwood & Harkness LLP ("the Firm" or "C&H") to represent GAP in connection with a breach-of-contract and collection action, as more fully described in Section 2 below. This engagement letter memorializes the terms and conditions governing the Firm's representation of GAP in this matter, including the scope of the engagement, fee arrangements, billing procedures, and the respective responsibilities of the Firm and the Company.
For internal administrative and record-keeping purposes, the Firm has assigned Matter No. 1020-00005 to this engagement. Please reference this matter number in all correspondence and communications directed to the Firm regarding this matter so that we may ensure prompt and accurate handling of your inquiries.
2. Scope of Representation
The Firm will represent GAP in pursuing claims for breach of contract and collection against Prairie Basin Grain Co., an Illinois corporation ("PBGC"), and Darren K. Musgrave, individually, in his capacity as personal guarantor of certain obligations of PBGC owed to GAP.
The claims at issue arise from PBGC's failure to pay amounts owed to GAP under a Master Grain Purchase and Off-Take Agreement dated March 15, 2019 (the "Off-Take Agreement"). In addition, GAP holds claims against Mr. Musgrave pursuant to his obligations under a limited personal guaranty executed as Exhibit D to the Off-Take Agreement. The personal guaranty is capped at Two Million Dollars ($2,000,000.00).
As of the date of this letter, the total principal amount outstanding and owed by PBGC to GAP under the Off-Take Agreement is Four Million Eight Hundred Seventy Thousand Fifty Dollars ($4,870,050.00), plus accrued contractual interest at the rate of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum), as provided in the Off-Take Agreement, plus attorneys' fees and costs of collection recoverable under Section 12.4 of the Off-Take Agreement.
The scope of the Firm's representation in this matter encompasses the following:
(a) Pre-Suit Demand and Negotiation. Preparation and delivery of formal demand letters to PBGC and Mr. Musgrave, and engagement in any pre-suit negotiations or settlement discussions as may be appropriate and as directed by GAP.
(b) Filing and Prosecution of Civil Action. Preparation, filing, and prosecution of a civil action against PBGC and Mr. Musgrave. Based on the forum selection clause contained in Section 13.2 of the Off-Take Agreement, the action is anticipated to be filed in the Circuit Court of Cook County, Illinois. In the event the matter is removed to federal court or transferred to another forum, the Firm's representation will continue in the appropriate court, subject to the terms of this engagement letter.
(c) discovery. Conducting all phases of discovery, including written discovery (interrogatories, requests for production of documents, and requests for admissions), depositions of parties and witnesses, and any third-party discovery necessary to support GAP's claims.
(d) Motion Practice. Preparation and argument of any motions necessary to advance GAP's interests, including but not limited to motions to dismiss counterclaims, motions for summary judgment, motions to compel discovery, and motions in limine.
(e) Trial. If the matter cannot be resolved through negotiation, mediation, or dispositive motion practice, the Firm will prepare for and try the case before the court or a jury, as applicable.
(f) Post-Judgment Enforcement. Following entry of any judgment in GAP's favor, the Firm will assist GAP in efforts to enforce and collect the judgment, including supplementary proceedings, asset discovery, garnishment, and related enforcement mechanisms.
Limitations on Scope. This engagement does not extend to any other matters, disputes, claims, or proceedings involving GAP, its affiliates, or any other party, unless separately agreed upon in writing between the Firm and GAP. For example, if the defense of any counterclaim or third-party claim requires expertise outside the Firm's contemplated scope, or if the matter gives rise to regulatory, administrative, or other ancillary proceedings, such additional work would be addressed in a separate engagement letter or a written amendment to this engagement letter.
Additionally, if the matter evolves to require representation of GAP in any bankruptcy, receivership, assignment for the benefit of creditors, or other insolvency proceedings involving PBGC or Mr. Musgrave, such representation would be addressed through a supplemental engagement letter or a written amendment to this letter. We note that, based on our preliminary review of the circumstances, there is a possibility that PBGC may be experiencing financial distress, and we will keep you apprised of any developments that may bear on this issue.
3. Engagement Team and Responsible Attorneys
The following attorneys and professional staff have been assigned to this engagement:
Francesca Morano — Responsible Partner. Ms. Morano will serve as the primary point of contact for the engagement and will provide overall supervision and strategic direction for the matter. All significant strategic decisions and communications regarding the engagement should be directed to or through Ms. Morano.
Samuel Eklund — Billing Partner. Mr. Eklund will serve as the billing partner for the engagement and will provide additional partner-level support as needed, including review of significant pleadings and participation in key depositions or hearings as the needs of the matter require.
Hannah Brinkley — Lead Associate. Ms. Brinkley will be responsible for the day-to-day management of the matter, including the drafting of pleadings, discovery requests and responses, motions, and memoranda of law. Ms. Brinkley will serve as an additional point of contact for routine matters and correspondence.
Patrick Gallagher — Working Associate. Mr. Gallagher will provide support through legal research, drafting, and general case support, working under the direction of Ms. Morano and Ms. Brinkley.
Diane K. Velasquez — Senior Litigation Paralegal. Ms. Velasquez will be responsible for document management, coordination of court filings, service of process, calendaring, and litigation support throughout the engagement.
Ryan T. Marbury — Paralegal. Mr. Marbury will support the team in document review, factual research, database management, and administrative tasks associated with the matter.
The Firm reserves the right to assign additional or substitute attorneys and support staff as the needs of the matter may dictate from time to time. In the event of any material change in the composition of the engagement team, the Firm will provide notice to GAP. The rates for any additional personnel assigned to the matter will be consistent with the Firm's standard rates for professionals of similar experience and seniority, as described in Section 4 below.
4. Fee Arrangement — Hourly Rates
The Firm's representation of GAP in this matter will be provided on an hourly basis. GAP will be charged for the actual time expended by each timekeeper on the matter, recorded in increments of one-tenth (0.1) of an hour.
The current hourly rates for the members of the engagement team are as follows:
The Firm's hourly rates are subject to annual adjustment, which typically takes effect on January 1 of each calendar year. The Firm will notify GAP in advance of any rate adjustments, and the adjusted rates will apply to services rendered on or after the effective date of the adjustment. If additional attorneys or paralegals are assigned to the engagement, their rates will be at the Firm's standard hourly rates for professionals of comparable experience and seniority, and GAP will be informed of those rates at the time of assignment.
We note that the rates set forth above reflect the Firm's current standard rates for commercial litigation matters. The Firm endeavors to staff each matter efficiently and to utilize professionals at the appropriate level of seniority so as to provide high-quality representation in a cost-effective manner.
5. Costs and Disbursements
In addition to professional fees for legal services, GAP will be responsible for the reimbursement of all costs and disbursements reasonably incurred by the Firm in connection with the representation. Such costs and disbursements may include, but are not limited to, the following:
•  Court filing fees and docketing charges;
•  Service of process fees;
•  Court reporter fees and transcript charges;
•  Legal research charges, including charges for computerized research services such as Westmark Data Systems and similar platforms;
•  Photocopying, printing, and document reproduction costs;
•  Messenger, courier, and overnight delivery service charges;
•  Postage and mailing costs;
•  Travel expenses, including transportation, lodging, and meals, incurred in connection with out-of-office activities reasonably necessary for the matter (e.g., depositions, hearings, client meetings);
•  Expert witness fees and related costs, if the retention of expert witnesses becomes necessary or advisable;
•  Mediation or arbitration fees, if applicable;
•  Electronic discovery vendor costs, including hosting, processing, and review platform charges;
•  Long-distance telephone and conference call charges; and
•  Any other out-of-pocket expenses reasonably incurred in connection with the representation.
All costs and disbursements will be itemized on the Firm's monthly invoices, as described in Section 6 below. For any individual cost or disbursement expected to exceed Five Thousand Dollars ($5,000.00), the Firm will endeavor to obtain GAP's prior approval before incurring the expense, except where time constraints or the circumstances of the matter make prior approval impracticable.
6. Billing and Payment Terms
The Firm will render invoices to GAP on a monthly basis, reflecting professional fees for services rendered and costs and disbursements incurred during the preceding calendar month. Invoices will contain a description of the services performed by each timekeeper, the time expended, the applicable hourly rate, and an itemization of any costs and disbursements incurred.
Payment Terms. Payment of each invoice is due within thirty (30) days of the date of the invoice. Invoices should be remitted to the attention of the Firm's Accounts Receivable Department at the address set forth in the letterhead above, or by such other means as the Firm may designate from time to time (including electronic funds transfer).
Interest on Past-Due Amounts. Any amounts not paid within thirty (30) days of the invoice date may bear interest at the rate of one percent (1.0%) per month (twelve percent (12%) per annum), or the maximum rate permitted by applicable law, whichever is less. The Firm's acceptance of late payment does not constitute a waiver of the Firm's right to charge interest on past-due amounts.
Billing Disputes. GAP agrees to notify the Firm promptly of any billing dispute, question, or concern regarding any invoice. We encourage open and transparent communication regarding fees and costs, and the Firm will work with GAP to resolve any questions in a fair and reasonable manner. If no dispute is raised within sixty (60) days of the date of an invoice, the invoice shall be deemed accepted.
Retainer. The Firm reserves the right to request a retainer or advance deposit against anticipated fees and costs at any time during the engagement. At this time, no retainer or advance deposit is being requested. Should circumstances change, the Firm will discuss any such request with GAP in advance.
Payment Independent of Outcome. The Company's obligation to pay for legal services rendered and costs incurred by the Firm is not contingent upon the outcome of the matter. Regardless of the result obtained, GAP remains responsible for payment of all fees and costs incurred during the course of the representation.
7. Client Responsibilities
The success of the Firm's representation depends in significant part on the full and timely cooperation of GAP. Accordingly, GAP agrees to the following:
(a) Cooperation and Access. GAP will cooperate fully with the Firm throughout the engagement, including providing timely access to all documents, records, correspondence, electronic data, and other information relevant to the claims against PBGC and Mr. Musgrave. GAP will also make its officers, employees, and agents available for interviews, consultations, meetings, and, as necessary, depositions and trial testimony.
(b) Responsiveness. GAP will respond promptly to the Firm's requests for information, instructions, and decisions. Delay in responding to the Firm's communications may adversely affect the progress and outcome of the matter, and the Firm cannot be responsible for any negative consequences arising from such delays.
(c) Communication of Developments. GAP will keep the Firm informed of any developments that may affect the representation, including, without limitation, any direct or indirect communications from PBGC, Mr. Musgrave, or their counsel, any changes in the financial condition of PBGC or Mr. Musgrave, any payments received on account, and any new facts or circumstances bearing on the claims.
(d) Litigation Hold and Document Preservation. The Firm will be issuing a separate litigation hold notice to GAP in the near future, which will provide detailed instructions regarding GAP's obligation to identify, preserve, and refrain from destroying all documents and electronically stored information ("ESI") that may be relevant to the claims and anticipated litigation. GAP's compliance with the litigation hold is of critical importance, and failure to preserve relevant evidence could result in serious adverse consequences, including sanctions by the court. We ask that GAP begin taking steps immediately to ensure that no potentially relevant documents or data are deleted, destroyed, altered, or discarded pending receipt and implementation of the formal litigation hold notice.
8. Governing Law
This engagement letter and the terms of the Firm's representation of GAP shall be governed by and construed in accordance with the laws of the State of Illinois, including the Illinois Rules of Professional Conduct as adopted by the Supreme Court of Illinois and as may be amended from time to time. In the event of any dispute arising out of or relating to this engagement letter or the Firm's representation, the parties agree that the courts of the State of Illinois, sitting in Cook County, shall have exclusive jurisdiction.
9. No Guarantee of Outcome
While the Firm will devote its best professional efforts to this engagement and will endeavor to achieve a favorable result for GAP, the Firm has not made, and does not make, any guarantees, promises, or predictions regarding the outcome of the matter. The practice of law and the litigation process involve inherent uncertainties that are beyond the Firm's control, including but not limited to the actions and decisions of opposing parties and their counsel, the rulings of the court, the credibility of witnesses, the composition and predisposition of a jury (if applicable), and the availability and persuasiveness of evidence.
GAP acknowledges that there are particular risks associated with this matter relating to the collectability of any judgment that may be obtained, especially given information currently available to the Firm regarding the financial condition of PBGC. A judgment, once obtained, is only as valuable as the defendant's ability to satisfy it, and enforcement of a judgment against PBGC and/or Mr. Musgrave may involve additional time, expense, and uncertainty. The Firm will provide its candid professional assessment of the merits, risks, and potential outcomes as the matter progresses and as additional information becomes available, and the Firm encourages GAP to discuss any questions or concerns regarding litigation risk at any time.
10. Conflicts of Interest
Prior to undertaking this engagement, the Firm conducted a comprehensive conflicts check in accordance with its standard procedures and the requirements of the Illinois Rules of Professional Conduct. Reference is made to the Firm's internal Conflict Check Memorandum dated March 21, 2022, which documents the results of this review. The parties and entities checked include, without limitation:
•  Greenfield Agricultural Partners LLC and its known principals, including Thomas R. Greenfield, Margaret A. Greenfield-Wu, and Caleb Jennings;
•  Prairie Basin Grain Co. and its known principals, including Darren K. Musgrave, Lydia R. Musgrave, and Victor P. Novotny;
•  Heartland Prairie Bank, N.A.; and
•  Other known related parties, affiliates, and entities identified in the course of the conflicts review.
Based on the results of this conflicts check, the Firm has identified no conflicts of interest that would preclude the Firm from undertaking this representation. However, GAP acknowledges that in the course of the Firm's ongoing practice, circumstances may change, and conflicts may arise that are not presently known or foreseeable. In the event that a conflict of interest arises in the future, the Firm will promptly notify GAP and discuss appropriate steps, which may include obtaining a waiver of the conflict (if permissible) or, if necessary, withdrawal from the representation.
11. Confidentiality and Privilege
All communications between GAP and the Firm made for the purpose of seeking or rendering legal advice are protected by the attorney-client privilege. In addition, documents, memoranda, research, analyses, and other materials prepared by the Firm in anticipation of litigation or in connection with the representation are protected by the work product doctrine. The Firm will maintain the confidentiality of all client information in accordance with the applicable rules of professional conduct and the Firm's internal policies regarding the safeguarding of confidential information.
To preserve the protections afforded by the attorney-client privilege and the work product doctrine, GAP should observe the following practices:
•  Communications with the Firm regarding legal matters should be marked "PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION" where appropriate.
•  Legal advice received from the Firm should be disseminated only to those officers, directors, employees, and agents of GAP who have a legitimate need to know the information in order to carry out their responsibilities in connection with the matter.
•  GAP should refrain from forwarding or sharing the Firm's legal advice or privileged communications with third parties, including business partners, lenders, consultants, or other outside advisors, without first consulting the Firm, as disclosure to third parties may result in a waiver of the privilege.
The Firm takes the protection of client confidences seriously and will work with GAP to ensure that appropriate safeguards are in place throughout the engagement.
12. Termination of Engagement
Either party may terminate the engagement as set forth below:
(a) Termination by GAP. GAP has the right to terminate the Firm's representation at any time, for any reason or for no reason, by providing written notice to the Firm. Upon receipt of such notice, the Firm will take all steps reasonably necessary to wind down its involvement in the matter and to protect GAP's interests during the transition.
(b) Withdrawal by the Firm. The Firm reserves the right to withdraw from the representation in accordance with the applicable rules of professional conduct, including but not limited to situations involving: (i) non-payment of fees or costs; (ii) the emergence of a conflict of interest that cannot be resolved by waiver or other appropriate measures; (iii) a breakdown in the attorney-client relationship that renders continued representation unreasonably difficult; (iv) GAP's failure to cooperate or to fulfill its obligations under this engagement letter; or (v) other circumstances that permit or require withdrawal under the applicable rules. In the event of withdrawal, the Firm will provide reasonable advance notice to GAP and, if the matter is then pending before a court, will seek the court's permission to withdraw as required.
(c) Payment Obligations Upon Termination. Upon termination of the engagement, whether by GAP or by the Firm, GAP remains fully responsible for the payment of all professional fees and costs incurred through the effective date of termination, including any fees and costs incurred in connection with the transition of the matter to successor counsel.
(d) Transition to Successor Counsel. In the event of termination, the Firm will cooperate with GAP and any successor counsel in the orderly transition of the matter, including the transfer of files, documents, and work product, subject to any applicable lien rights.
13. Document Retention
At the conclusion of the engagement, the Firm will return original documents belonging to GAP upon written request. The Firm may retain copies of such documents for its files, subject to the Firm's confidentiality obligations.
The Firm's files related to this matter (other than original client documents) will be retained in accordance with the Firm's document retention policy, which currently provides for retention of closed matter files for a period of seven (7) years following the close of the matter. After the expiration of the retention period, the Firm may destroy or dispose of its files, including electronic files, without further notice to GAP. If GAP wishes to receive the Firm's files at the conclusion of the engagement or at any time during the retention period, GAP should submit a written request to the Firm, and the Firm will make arrangements for the transfer of files at GAP's expense.
14. Acceptance and Execution
If the foregoing terms are acceptable, please confirm GAP's agreement by signing and dating this letter in the space provided below and returning a signed copy to the undersigned at your earliest convenience. A copy of this letter is enclosed for your records. Your signature will confirm that you have read, understand, and agree to the terms set forth herein, and that you are authorized to execute this engagement letter on behalf of Greenfield Agricultural Partners LLC.
This signed engagement letter will constitute the entire agreement between the Firm and GAP with respect to the terms and conditions of the engagement described herein, and supersedes any and all prior oral or written understandings, discussions, or agreements between the parties regarding the subject matter hereof. This engagement letter may not be amended or modified except by a written instrument signed by both parties.
We look forward to working with you on this matter. Please do not hesitate to contact me directly at (312) 555-7812 or fmorano@calderwoodharkness.com if you have any questions regarding this letter or any aspect of the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano Partner
AGREED AND ACCEPTED
By signing below, the undersigned confirms that he has read, understands, and agrees to the terms and conditions set forth in this engagement letter, and that he is authorized to execute this engagement letter on behalf of Greenfield Agricultural Partners LLC.
GREENFIELD AGRICULTURAL PARTNERS LLC
By: ________
Name: Thomas R. Greenfield
Title: Chairman and Chief Executive Officer
Date: ________
Encl.: None
cc:
Samuel Eklund, Billing Partner, Calderwood & Harkness LLP Hannah Brinkley, Lead Associate, Calderwood & Harkness LLP Margaret A. Greenfield-Wu, President and COO, Greenfield Agricultural Partners LLC Caleb Jennings, Director of Grain Operations, Greenfield Agricultural Partners LLC
Timekeeper | Position | Hourly Rate
Francesca Morano | Partner | $785.00
Samuel Eklund | Partner | $750.00
Hannah Brinkley | Associate | $495.00
Patrick Gallagher | Associate | $395.00
Diane K. Velasquez | Senior Litigation Paralegal | $225.00
Ryan T. Marbury | Paralegal | $195.00