CALDERWOOD & HARKNESS LLP Attorneys at Law 800 Walnut Street, Suite 2400 Des Moines, Iowa 50309
Telephone: (515) 244-8800 Facsimile: (515) 244-8801 www.calderwoodharkness.com
August 15, 2022
VIA HAND DELIVERY AND ELECTRONIC MAIL
Marcus J. Linden Founder & Managing Partner Greenfield Agricultural Partners LLC 4100 Grand Prairie Drive, Suite 300 Des Moines, Iowa 50309
Re: Engagement of Calderwood & Harkness LLP — Proposed Joint Venture with TerraVault BioSciences Inc. Matter Number: 2022-M&A-00437
Dear Mr. Linden:
Thank you for selecting Calderwood & Harkness LLP ("the Firm," "we," or "us") to represent Greenfield Agricultural Partners LLC ("Greenfield," the "Client," or "you") in connection with the proposed joint venture transaction described more fully below. We are pleased to have the opportunity to work with you and your team on this important strategic initiative, and we are committed to providing the highest quality legal counsel throughout the course of the engagement.
The purpose of this letter is to set forth the terms and conditions under which the Firm will provide legal services to Greenfield in connection with this matter. We ask that you carefully review this engagement letter in its entirety. If the terms set forth herein are acceptable, please indicate your agreement by countersigning and returning a copy of this letter to my attention at the address set forth above, or by electronic mail to stung@calderwoodharkness.com, at your earliest convenience. Your signature below, or your continued direction to proceed with this engagement, will constitute your acceptance of the terms described in this letter.
1. Scope of Representation
The Firm will represent Greenfield Agricultural Partners LLC, an Iowa limited liability company, in connection with the negotiation, structuring, and documentation of a proposed joint venture (the "Transaction" or the "Proposed JV") between Greenfield and TerraVault BioSciences Inc., a Delaware corporation qualified to do business in the State of Illinois ("TerraVault").
The Proposed JV contemplates the formation of a new entity, to be known as PrairieSense Technologies LLC (the "JV Entity" or "PrairieSense"), as an Iowa limited liability company. The proposed purpose of PrairieSense Technologies LLC is the development, manufacturing, and commercialization of integrated soil-health sensor systems for commercial row-crop agriculture in the United States Midwest region.
Based on the preliminary discussions between the parties and the information provided to us to date, the principal economic terms of the Proposed JV are anticipated to be as follows:
• Total Proposed Initial Capital Commitment: Twelve Million Dollars ($12,000,000).
• Greenfield's Proposed Equity Contribution: Seven Million Two Hundred Thousand Dollars ($7,200,000) in cash, representing a sixty percent (60%) equity interest in PrairieSense.
• TerraVault's Proposed Equity Contribution: Four Million Eight Hundred Thousand Dollars ($4,800,000), consisting of Two Million Four Hundred Thousand Dollars ($2,400,000) in cash and Two Million Four Hundred Thousand Dollars ($2,400,000) in the form of a technology license and intellectual property contribution, representing a forty percent (40%) equity interest in PrairieSense.
The scope of legal services to be provided by the Firm in connection with this engagement shall include, but not be limited to, the following:
(a) Negotiation and preparation of a non-binding term sheet setting forth the principal terms and conditions of the Proposed JV;
(b) Conducting or coordinating due diligence (including intellectual property due diligence) on TerraVault BioSciences Inc. and its proprietary technology, patents, trade secrets, and related assets;
(c) Drafting and negotiation of the definitive joint venture operating agreement for PrairieSense Technologies LLC (the "JV Operating Agreement"), including all governance, capital contribution, distribution, transfer restriction, and exit provisions;
(d) Preparation and negotiation of ancillary transaction documents, including, without limitation, technology license agreements, intellectual property assignment or contribution agreements, capital contribution agreements, management services agreements, and such other related instruments as may be required in connection with the Transaction;
(e) Coordination with Greenfield's tax and accounting advisors, including Greenfield's independent certified public accountants and any tax counsel separately engaged by Greenfield, regarding structuring matters related to the Proposed JV, including without limitation the tax treatment of TerraVault's in-kind intellectual property contribution and the allocation of income, losses, and tax credits among the JV members;
(f) Coordination with any proposed lenders, financing sources, or credit facilities in connection with the Proposed JV, including review and negotiation of any loan documentation, guaranty agreements, or security instruments that may be required in connection with third-party financing for the JV Entity or for Greenfield's capital contribution;
(g) Iowa limited liability company formation matters for PrairieSense Technologies LLC, including preparation and filing of the Certificate of Organization with the Iowa Secretary of State, preparation of initial resolutions, and such other organizational matters as may be required, in each case if and when the Transaction proceeds to closing;
(h) Preparation of such officer's certificates, bring-down certificates, closing opinions, and other closing deliverables as may be customary for a transaction of this nature; and
(i) Such other legal services as may be reasonably necessary or advisable in connection with the Proposed JV and the transactions contemplated thereby.
We note for the record that, in anticipation of this engagement, the Firm previously prepared and assisted in the negotiation of a Mutual Non-Disclosure Agreement between Greenfield and TerraVault, dated as of July 11, 2022 (the "NDA"). All professional time and disbursements incurred by the Firm in connection with the preparation and negotiation of the NDA are considered part of this matter and will be billed under this engagement in accordance with the fee and billing terms set forth herein.
Limitations on Scope. The scope of this engagement is expressly limited to the matters described above in connection with the Proposed JV. Without limiting the generality of the foregoing, this engagement does not include and shall not be construed to include:
(i) representation of Greenfield or any other party in any litigation, arbitration, mediation, or other dispute resolution proceedings;
(ii) representation of Greenfield or any other party in any regulatory proceedings, governmental investigations, or administrative hearings;
(iii) the preparation of any federal, state, or local tax returns or tax filings for Greenfield, PrairieSense, or any other entity;
(iv) the rendering of tax advice (other than the coordination with Greenfield's tax advisors described above); or
(v) any legal services unrelated to the Proposed JV, including but not limited to Greenfield's ongoing business operations, existing portfolio company matters, fund formation or fundraising activities, employment matters, or real estate transactions.
Any expansion of the scope of this engagement, or any request for legal services outside the scope described above, must be agreed to separately in writing by the Firm and the Client before such services are commenced.
2. Engagement Team
The following attorneys will be principally responsible for the legal services provided in connection with this engagement:
Sandra Tung — Responsible Partner, Mergers & Acquisitions. Ms. Tung is a partner in the Firm's Mergers & Acquisitions Practice Group and will serve as the responsible partner overseeing all aspects of this engagement. Ms. Tung has extensive experience in joint venture transactions, strategic partnerships, and complex commercial arrangements in the agricultural technology and life sciences sectors. She will be the primary point of contact for senior-level matters, including strategic advice, escalation of significant negotiation issues, and communications with Greenfield's senior leadership regarding the overall direction and progress of the Transaction.
Oliver Mackenzie — Billing Partner, Mergers & Acquisitions. Mr. Mackenzie is a partner in the Firm's Mergers & Acquisitions Practice Group and will serve as the billing partner for this engagement. Mr. Mackenzie will oversee all billing, budgeting, and financial reporting for this matter, and will be responsible for ensuring that the Firm's invoicing is accurate, transparent, and in compliance with the terms of this engagement letter. Mr. Mackenzie will also be available to provide substantive legal counsel on transactional matters as needed.
Derek Okonkwo — Lead Associate, Mergers & Acquisitions. Mr. Okonkwo is a senior associate in the Firm's Mergers & Acquisitions Practice Group and will serve as the day-to-day drafting and negotiation lead for this engagement. Mr. Okonkwo will be responsible for preparing initial drafts of the JV Operating Agreement and ancillary transaction documents, managing the document negotiation process with TerraVault's counsel, and coordinating the various workstreams associated with the Transaction. Mr. Okonkwo will serve as the primary day-to-day point of contact for routine matters, questions, and communications.
Tiffany Rosenthal — Working Associate, Mergers & Acquisitions. Ms. Rosenthal is an associate in the Firm's Mergers & Acquisitions Practice Group and will be responsible for legal research, due diligence coordination, preparation of due diligence request lists and summaries, and drafting of ancillary documents and supporting memoranda in connection with the Transaction. Ms. Rosenthal has particular expertise in intellectual property due diligence and will play a key role in evaluating TerraVault's patent and technology portfolio.
The Firm may, from time to time, assign additional attorneys, paralegals, or other professional staff to work on this engagement as reasonably necessary to provide efficient and high-quality legal services. In such event, the Firm will provide advance notice to the Client of the identity and billing rate of any additional professionals assigned to the matter. The Firm will exercise reasonable judgment in staffing this engagement to ensure the most efficient and cost-effective delivery of services.
Client Points of Contact. The Client's primary points of contact for this engagement shall be:
• Marcus J. Linden, Founder & Managing Partner, Greenfield Agricultural Partners LLC — for all strategic, business, and senior-level communications; and
• Rachel Yun-Park, Chief Financial Officer, Greenfield Agricultural Partners LLC — for billing and financial matters, document production, and day-to-day coordination.
The Client agrees to make Mr. Linden and Ms. Yun-Park reasonably available for consultations, document review, and decision-making throughout the course of the engagement. Prompt communication and responsiveness from the Client's team will be essential to maintaining the Transaction timeline and managing costs effectively.
3. Fees and Billing Rates
Professional fees for legal services rendered in connection with this engagement will be charged on an hourly basis at the following current standard billing rates:
The foregoing billing rates reflect the Firm's current standard rates for the identified professionals and are effective as of the date of this engagement letter. Billing rates are subject to annual adjustment, which typically takes effect on January 1 of each calendar year. The Firm will provide written notice to the Client of any changes to the billing rates applicable to this engagement at least thirty (30) days in advance of the effective date of such changes. Unless otherwise agreed in writing, adjusted rates will apply to all time recorded on or after the effective date of the adjustment.
If additional attorneys or paralegals are assigned to work on this matter in accordance with Section 2 above, their applicable billing rates will be communicated to the Client in writing at the time of assignment. Paralegal time, if applicable, is currently billed at rates ranging from $225.00 to $325.00 per hour, depending on the experience level and area of expertise of the individual paralegal.
All professional time is recorded and billed in increments of one-tenth (0.1) of an hour (i.e., six-minute increments). The Firm maintains contemporaneous time records for all professionals working on this engagement, and detailed time entries will be included with each monthly invoice.
4. Fee Estimate and Soft Cap
Based on the anticipated scope of the engagement as described in Section 1 above — including, without limitation, term sheet negotiation, due diligence coordination, preparation and negotiation of the definitive JV Operating Agreement and ancillary transaction documents, entity formation, and closing — the Firm estimates that total professional fees for this engagement will be in the range of Two Hundred Fifty Thousand Dollars ($250,000) to Three Hundred Fifty Thousand Dollars ($350,000).
This estimate is based on a number of assumptions, including that: (a) the Transaction will proceed on a customary timeline and without unusual delays or interruptions; (b) due diligence on TerraVault and its intellectual property will not reveal issues requiring significant additional investigation or remediation; (c) the negotiation of the definitive JV Operating Agreement and ancillary documents will be completed within a reasonable number of drafting and negotiation cycles; and (d) the scope of services will remain substantially as described in Section 1 above.
The Firm will endeavor, in good faith, to keep total professional fees at or below Three Hundred Fifty Thousand Dollars ($350,000) for the complete scope of services described in Section 1 of this engagement letter (the "Soft Fee Cap"). The Firm is committed to managing this engagement in a cost-effective manner and will proactively monitor fees and staffing to stay within this target.
The Soft Fee Cap is provided as a good-faith estimate and planning tool for the Client's budgeting purposes and does not constitute a guaranteed maximum fee, a fixed fee, or a cap on the Client's obligation to pay for legal services rendered. If, during the course of the engagement, it becomes apparent that total professional fees are likely to materially exceed the Soft Fee Cap — whether due to unforeseen complexity in the Transaction, protracted or multi-track negotiations, significant due diligence findings requiring additional work, expansion of the scope of services, delays caused by third parties, or other circumstances beyond the Firm's reasonable control — the Firm will promptly notify the Client and discuss the situation, including the reasons for the anticipated overrun and the Firm's estimate of additional fees that may be incurred. The Firm will not continue work that would cause total fees to materially exceed the Soft Fee Cap without first consulting with the Client and obtaining the Client's direction to proceed.
The Soft Fee Cap is exclusive of, and does not include, disbursements, out-of-pocket expenses, third-party costs, or the fees and expenses of any consultants, experts, or other professionals retained in connection with the engagement, all of which are addressed separately in Section 5 below.
5. Disbursements and Third-Party Costs
In addition to the professional fees described in Sections 3 and 4 above, the Client will be responsible for the reimbursement of all reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with this engagement. Such expenses and disbursements include, but are not limited to, the following:
(a) Travel Expenses. Transportation costs (including airfare, train fare, automobile mileage at the then-current IRS standard mileage rate, parking, and ground transportation), lodging, and reasonable meal expenses incurred in connection with out-of-town meetings, negotiation sessions, due diligence site visits, and closings. The Firm will make reasonable efforts to minimize travel costs, including by utilizing videoconference and teleconference facilities when practicable.
(b) Filing Fees and Entity Formation Costs. All filing fees, registration fees, and related governmental charges incurred in connection with the formation of PrairieSense Technologies LLC with the Iowa Secretary of State and any other governmental authority, as well as any fees for registered agent services.
(c) Computerized Legal Research Charges. Charges for online legal research conducted through Westmark Data Systems, Sundial Solutions, or other electronic research platforms, to the extent such charges are specifically allocable to this matter.
(d) Courier, Copying, and Document Production Costs. Expenses for overnight and local courier services, large-volume photocopying and printing, binding, scanning, and electronic document production, including the costs of any virtual data room established for due diligence purposes.
(e) Long-Distance Communication Costs. Long-distance telephone charges and teleconference or videoconference service fees specifically allocable to this matter, to the extent such charges exceed nominal amounts.
(f) Other Disbursements. Such other reasonable out-of-pocket expenses as may be incurred in the ordinary course of providing legal services in connection with this engagement, including postage, notarization fees, and similar items.
Third-Party Consultants and Experts. The Firm may, from time to time, recommend the retention of third-party consultants, experts, or other professionals to assist in connection with the engagement. The Firm will not retain any such third party on behalf of the Client without the Client's prior written approval. The fees and expenses of any such third-party consultant or expert will be billed directly to the Client by the consultant or expert, or, if advanced by the Firm, will be passed through to the Client as disbursements on the Firm's monthly invoices.
In particular, the Firm anticipates that it will be advisable to retain a qualified intellectual property consultant to conduct independent IP due diligence on TerraVault's patent portfolio, trade secrets, and proprietary technology assets in connection with the Proposed JV. Such IP due diligence is critical to assessing the value and enforceability of the intellectual property that TerraVault proposes to contribute to PrairieSense as part of its equity contribution. The Firm will advise the Client of the identity, qualifications, and anticipated fees of any such IP consultant before proceeding with retention, and will seek the Client's express approval before engaging any such consultant on the Client's behalf.
6. Billing and Payment Terms
The Firm will issue monthly invoices for all professional fees and disbursements incurred during the preceding calendar month. Each invoice will include a detailed summary of the professional time billed to the matter during the invoice period, including the date, timekeeper, description of services rendered, time spent, and applicable rate for each time entry. Disbursements will be separately itemized on each invoice.
Invoices are due and payable within thirty (30) days of the date of the invoice. Payment may be made by check, wire transfer, or ACH payment to the Firm's designated client trust or operating account, as indicated on the invoice. The Client acknowledges that timely payment of invoices is an essential term of this engagement.
If any invoice remains unpaid for more than sixty (60) days following the date of the invoice, the Firm reserves the right, upon not less than ten (10) business days' prior written notice to the Client, to suspend work on the matter until all outstanding invoices have been paid in full. The Firm's right to suspend work under this paragraph is in addition to, and not in lieu of, any other remedies available to the Firm under applicable law or the Iowa Rules of Professional Conduct. The Firm will not exercise this right without first making reasonable efforts to communicate with the Client regarding the outstanding balance and any issues related to payment.
All invoices will be directed to the attention of Rachel Yun-Park, Chief Financial Officer, Greenfield Agricultural Partners LLC, 4100 Grand Prairie Drive, Suite 300, Des Moines, Iowa 50309, and may also be sent via electronic mail to such email address as Ms. Yun-Park may designate. The Client may designate an alternative billing contact by providing written notice to the Firm at any time.
7. Client Identity and Conflicts
Client Identity. The Firm's client in this engagement is Greenfield Agricultural Partners LLC, acting in its capacity as a limited liability company organized under the laws of the State of Iowa. The Firm does not, by virtue of this engagement, represent any individual member, manager, officer, director, employee, or agent of Greenfield in their personal capacity. Without limiting the foregoing, the Firm does not represent Marcus J. Linden, Rachel Yun-Park, or any other individual associated with Greenfield in any personal capacity in connection with this or any other matter, unless such representation is separately agreed to in a separate written engagement letter.
Counterparty Representation. The Firm does not represent TerraVault BioSciences Inc. or any of its officers, directors, shareholders, employees, affiliates, subsidiaries, or related entities in connection with this Transaction or any other matter. We understand that TerraVault is represented in connection with the Proposed JV by its own independent legal counsel, Whitfield, Carey & Stokes LLP, and all communications with TerraVault regarding the Transaction will be conducted through or with the knowledge and consent of TerraVault's counsel.
Conflicts Check. The Firm has conducted a conflicts check in accordance with its standard procedures and the Iowa Rules of Professional Conduct. Based on the information currently available to the Firm, the Firm is not aware of any conflict of interest that would preclude or materially limit the Firm's ability to represent Greenfield in connection with this engagement.
The Client agrees to promptly notify the Firm of any changes in the identity of parties, entities, or individuals involved in the Transaction — including, without limitation, any proposed additional investors, co-venturers, lenders, or other participants — that may require a supplemental conflicts review by the Firm. The Firm will conduct supplemental conflicts checks as needed throughout the course of the engagement and will promptly advise the Client if any conflict or potential conflict is identified.
8. Confidentiality
All communications between the Firm and the Client in connection with this engagement, including oral and written communications, documents, memoranda, draft agreements, and work product, are subject to the attorney-client privilege to the fullest extent permitted by applicable law and are treated as confidential by the Firm.
The Firm will not disclose any confidential information relating to this engagement or to the Client's business, operations, or affairs without the Client's prior written consent, except:
(a) as required by applicable law, regulation, court order, or subpoena;
(b) as required by the Iowa Rules of Professional Conduct or any other applicable rules of professional responsibility;
(c) as reasonably necessary to carry out the purposes of the engagement, including communications with the counterparty's counsel, Whitfield, Carey & Stokes LLP, in furtherance of the Transaction, and communications with the Client's other professional advisors (e.g., tax and accounting advisors) to the extent authorized by the Client; or
(d) to the extent that any such information becomes publicly available through no fault of the Firm.
The Client acknowledges that, in the course of the Transaction, certain confidential information of the Client may need to be disclosed to TerraVault or its counsel pursuant to the terms of the Mutual Non-Disclosure Agreement dated July 11, 2022, or as otherwise necessary in connection with the negotiation and due diligence process. The Firm will consult with the Client before making any such disclosures and will use reasonable efforts to limit the scope of any disclosures to information that is necessary and appropriate in the context of the Transaction.
9. Document Retention
Upon the conclusion of this engagement, whether by completion of the Transaction, termination of the engagement, or otherwise, the Firm will return to the Client, upon the Client's written request, all original documents and materials provided by the Client to the Firm in connection with this matter. Such original documents remain the property of the Client at all times.
The Firm will retain copies of the engagement files, including correspondence, memoranda, draft and final transaction documents, due diligence materials, research, and work product generated by the Firm in connection with this engagement, in accordance with the Firm's standard document retention policy. The Firm's current document retention policy provides for retention of closed matter files for a minimum period of seven (7) years from the date of matter closure.
The Client hereby authorizes the Firm to destroy or dispose of the Firm's copies of the engagement files at any time after the expiration of the applicable retention period, without further notice to, or consent from, the Client. If the Client wishes to receive the Firm's files prior to their destruction, the Client must submit a written request to the Firm within the retention period. The Firm reserves the right to charge reasonable fees for the retrieval, copying, and delivery of archived files.
10. Termination of Engagement
Either the Client or the Firm may terminate this engagement at any time, with or without cause, by providing written notice to the other party. The Firm's right to withdraw from the engagement is subject to applicable provisions of the Iowa Rules of Professional Conduct and any applicable court rules governing withdrawal of counsel.
Upon termination of this engagement:
(a) The Client will remain responsible for the payment of all professional fees and disbursements incurred by the Firm through the effective date of termination, in accordance with the billing and payment terms set forth in this engagement letter.
(b) The Firm will take reasonable steps to protect the Client's interests during the transition period, including cooperating in the orderly transfer of files, documents, and work product to the Client or to successor counsel designated by the Client.
(c) The Firm will promptly deliver to the Client or to successor counsel all documents, files, and materials to which the Client is entitled, subject to the Firm's right to retain copies of its work product and files in accordance with Section 9 above and any applicable lien rights under Iowa law for unpaid fees and disbursements.
11. Governing Law
This engagement letter and the relationship between Calderwood & Harkness LLP and Greenfield Agricultural Partners LLC arising out of or related to this engagement shall be governed by and construed in accordance with the laws of the State of Iowa, without regard to principles of conflicts of laws that would require the application of the laws of any other jurisdiction. The parties further agree that any dispute arising out of or in connection with this engagement letter shall be subject to the exclusive jurisdiction of the state and federal courts located in Polk County, Iowa.
12. Entire Agreement / Amendments
This engagement letter constitutes the entire agreement between Calderwood & Harkness LLP and Greenfield Agricultural Partners LLC with respect to the terms, conditions, and scope of this engagement, and supersedes all prior and contemporaneous oral or written communications, representations, understandings, or agreements between the parties relating to the subject matter hereof.
No modification, amendment, supplement, or waiver of any provision of this engagement letter shall be effective unless it is in writing and signed by authorized representatives of both Calderwood & Harkness LLP and Greenfield Agricultural Partners LLC. No course of dealing between the parties, nor any failure or delay by either party in exercising any right or remedy under this engagement letter, shall operate as a waiver of any such right or remedy or constitute an amendment of this engagement letter.
We are genuinely enthusiastic about the opportunity to represent Greenfield Agricultural Partners LLC in connection with this proposed joint venture with TerraVault BioSciences Inc. The formation of PrairieSense Technologies LLC and the development of integrated soil-health sensor systems for the Midwest agricultural market represent a compelling strategic initiative, and our team is well-positioned to provide the legal counsel and transactional expertise required to bring this venture to fruition on terms that are favorable and protective of Greenfield's interests.
Please indicate your acceptance of the terms and conditions set forth in this engagement letter by signing and dating the acknowledgment below and returning a signed copy to my attention at the address set forth above or via electronic mail. If you have any questions or wish to discuss any aspect of this letter, please do not hesitate to contact me directly at (515) 244-8810 or stung@calderwoodharkness.com.
We look forward to working with you and the Greenfield team on this important transaction.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Sandra Tung, Partner Calderwood & Harkness LLP 800 Walnut Street, Suite 2400 Des Moines, Iowa 50309 Telephone: (515) 244-8810
Email: stung@calderwoodharkness.com
ACKNOWLEDGED AND ACCEPTED
The undersigned, on behalf of Greenfield Agricultural Partners LLC, hereby acknowledges receipt of the foregoing engagement letter, confirms that the undersigned has read and understands its terms and conditions, and accepts the engagement of Calderwood & Harkness LLP on the terms set forth therein.
GREENFIELD AGRICULTURAL PARTNERS LLC
By: ________
Name: Marcus J. Linden
Title: Founder & Managing Partner
Greenfield Agricultural Partners LLC 4100 Grand Prairie Drive, Suite 300 Des Moines, Iowa 50309
Date: ________
Enclosures: None
cc: Rachel Yun-Park, Chief Financial Officer, Greenfield Agricultural Partners LLC cc: Oliver Mackenzie, Partner, Calderwood & Harkness LLP
| Attorney | Position | Hourly Rate |
| Sandra Tung | Partner | $950.00 |
| Oliver Mackenzie | Partner | $900.00 |
| Derek Okonkwo | Associate | $625.00 |
| Tiffany Rosenthal | Associate | $425.00 |