Contract analysis

I. Executive Summary This memorandum sets forth our review and analysis of the first draft of the First Lien/Unsecured Intercreditor Agreement (the "Intercreditor Agreement") circulated by Whitfield & Gage LLP ("W&G") — specifically Margaret Ashby and Jonathan Ferris — on March 12, 2025, on behalf of Crescent Harbor Bank, N.A., in its capacity as First Lien Collateral Agent under the proposed $1,400,000,000 senior se

II. Background and Transaction Context A. Transaction Overview Nexford Industrial Holdings Inc. is a Delaware corporation headquartered at 1400 Industrial Parkway, Schaumburg, Illinois 60173. Nexford is a diversified industrial manufacturer and services provider operating across three principal business segments: advanced materials processing, specialty packaging solutions, and industrial infrastructure services. Nex

III. Structural Overview of the W&G First Draft The W&G draft of the Intercreditor Agreement is organized into approximately twelve substantive articles, preceded by recitals and a definitions section, and followed by customary miscellaneous provisions. The overall structure is consistent with market-standard intercreditor agreements for first lien / unsecured arrangements in sponsored leveraged finance transactions.

Article 1 — Definitions. Contains defined terms used throughout the agreement, including cross-references to the Credit Agreement and the Indenture. Key defined terms include "First Lien Obligations," "Unsecured Notes Obligations," "Collateral," "Permitted Refinancing," "Enforcement Action," "DIP Financing," and "Adequate Protection."

Article 2 — Priorities and Subordination of Liens. Despite its heading, this article does not address lien subordination in the traditional sense (as the Unsecured Notes do not benefit from liens on the Collateral). Instead, it principally establishes the proceeds waterfall — the order of priority for distribution of Collateral proceeds upon enforcement or realization.

Article 3 — Enforcement Actions and Remedies. Governs the exclusive right of the First Lien Collateral Agent to enforce remedies against the Collateral and the Unsecured Notes Trustee's obligations with respect to turnover of Collateral proceeds.

Article 4 — Standstill and Exercise of Remedies. Imposes restrictions on the Unsecured Notes Trustee's ability to take enforcement actions during a specified standstill period and includes prohibitions on challenging the First Lien security interests.

Article 5 — Releases of Liens and Guarantees. Addresses the automatic release of guarantees (and any theoretical liens) upon a permitted disposition or release under the Credit Agreement.

Article 6 — Insolvency and Bankruptcy Proceedings. Establishes the parties' respective rights and obligations in the context of proceedings under the Bankruptcy Code, including provisions regarding DIP financing, adequate protection, voting on plans of reorganization, the Section 1111(b) election, and relief from the automatic stay.

Article 7 — Purchase Option. Provides the Unsecured Notes Trustee (or qualifying noteholders) with an option to purchase the First Lien Obligations at par upon the occurrence of certain triggering events.

Article 8 — Amendments to Secured Debt Documents and Unsecured Notes Documents. Governs the parties' rights and obligations with respect to amendments to the Credit Agreement, the Indenture, and the Intercreditor Agreement itself.

Article 9 — Representations and Acknowledgments. Contains customary representations regarding authority, capacity, and authorization.

Article 10 — Miscellaneous. Includes provisions regarding successors and assigns, third-party beneficiaries, governing law, submission to jurisdiction, jury trial waiver, counterparts, notices, severability, and integration. Annexes and Schedules. The draft includes annexes listing the First Lien Documents, the Unsecured Notes Documents, and a collateral description intended to replicate the description of Collateral

IV. Detailed Issue-by-Issue Analysis A. Article 1 — Definitions

1. Definition of "First Lien Obligations" The W&G draft defines "First Lien Obligations" broadly to encompass all obligations of the Loan Parties arising under or in connection with the Credit Agreement, together with all hedging obligations and all cash management obligations of the Loan Parties owed to the First Lien Lenders or their affiliates. This definition is intentionally expansive and is designed to ensure t

2. Definition of "Unsecured Notes Obligations" The W&G draft defines "Unsecured Notes Obligations" as all obligations of the Issuer and the Guarantors under the Indenture and the Unsecured Notes. This definition should be confirmed to cover the full $250,000,000 aggregate principal amount of the Unsecured Notes, together with all accrued and unpaid interest, any applicable premium (including any "make-whole" amount),

3. Definition of "Collateral" The W&G draft defines "Collateral" as all assets and property of Nexford and each Guarantor that are subject to a first-priority security interest in favor of the First Lien Collateral Agent. The defined term must align precisely with the collateral description in the Credit Agreement and the related Security Documents (including the Security Agreement, the IP Security Agreement, the Mor

4. Definition of "Permitted Refinancing" The W&G draft defines "Permitted Refinancing" to include any refinancing, refunding, renewal, or extension of the First Lien Obligations or the Unsecured Notes Obligations that satisfies the conditions for a "Permitted Refinancing Indebtedness" under the Credit Agreement. The definition further provides that upon the consummation of a Permitted Refinancing, the refinancing cre

5. Other Key Definitions We have identified the following additional defined terms that require attention during the mark-up: (a) "Bankruptcy Code." Defined as Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. Standard; no revision needed, but confirm consistency with the Credit Agreement's definition. (b) "DIP Financing." Defined as any financing obtained by the Borrower or any of its subsidiaries as debt

1. Exclusive Enforcement Right The W&G draft grants the First Lien Collateral Agent the exclusive right to enforce remedies against the Collateral, including the right to foreclose on, collect, sell, lease, exchange, or otherwise dispose of any and all Collateral. This exclusive enforcement right is standard and appropriate in a first lien / unsecured intercreditor arrangement — the Unsecured Notes do not benefit fro

2. Direction and Instruction The W&G draft provides that the First Lien Collateral Agent shall act at the direction of the "Required Lenders" (defined as the lenders holding a majority in aggregate principal amount of the outstanding Term Loan B commitments and loans) with respect to the exercise of remedies against the Collateral. This formulation mirrors the direction provisions in the Credit Agreement (Section 9.0

3. Obligation to Turn Over Collateral Proceeds The W&G draft includes an obligation requiring the Unsecured Notes Trustee and the Unsecured Noteholders to turn over to the First Lien Collateral Agent any Collateral proceeds received by them, whether directly or indirectly, until such time as all First Lien Obligations have been indefeasibly paid in full. This turnover obligation is a standard feature of first lien /

1. Standstill Period The W&G draft imposes a 180-day standstill period during which the Unsecured Notes Trustee may not take "any Enforcement Action" following the occurrence and during the continuance of an event of default under the Unsecured Notes. The standstill commences upon written notice by the Unsecured Notes Trustee to the First Lien Collateral Agent of the occurrence of such event of default. Issue: This p

2. Restrictions on Challenging First Lien Security The W&G draft includes a provision prohibiting the Unsecured Notes Trustee and the Unsecured Noteholders from challenging the validity, perfection, or priority of the First Lien security interests. This is a standard provision that is appropriate in the intercreditor context — the Unsecured Noteholders have entered into a transaction with full knowledge of the first

1. Automatic Release Provisions The W&G draft provides that whenever the First Lien Collateral Agent releases any lien on the Collateral or releases any Guarantor from its guarantee under the Credit Agreement, in each case in connection with a transaction permitted under the terms of the Credit Agreement, the Unsecured Notes Trustee is deemed to have consented to such release and must execute any documents necessary

2. Asset Sale Releases The W&G draft provides that Collateral is automatically released from the security interests created by the First Lien Documents upon a permitted asset sale under the Credit Agreement. The draft further provides that the Unsecured Notes Trustee is bound by such release and may not assert any claim against the released Collateral. This provision is standard and generally unobjectionable. We note

1. DIP Financing The W&G draft provides that the Unsecured Notes Trustee will not object to any debtor-in-possession financing obtained by the Borrower or its subsidiaries pursuant to Section 364 of the Bankruptcy Code, provided that such DIP financing is consented to by the Required Lenders under the Credit Agreement. Issue: This non-objection covenant is overly broad. The formulation gives the First Lien Lenders (t

2. Adequate Protection The W&G draft provides that the First Lien Collateral Agent is entitled to seek and receive adequate protection payments on account of any diminution in value of the Collateral during a bankruptcy proceeding. The draft further provides — and this is the problematic provision — that the Unsecured Notes Trustee "shall not seek or accept any adequate protection with respect to its claims." Issue:

3. Voting on Plan of Reorganization The W&G draft includes a provision restricting the Unsecured Notes Trustee's ability to vote on a plan of reorganization "to the extent the plan involves the Collateral." This restriction purports to limit the Unsecured Noteholders' participation in the plan confirmation process. Issue: This restriction is unusual and, in our view, likely unenforceable. The right to vote on a plan

4. Section 1111(b) Election The W&G draft addresses the application of Section 1111(b) of the Bankruptcy Code, which permits an undersecured creditor to elect to have its entire claim treated as a secured claim in a bankruptcy proceeding. The draft provides that the First Lien Collateral Agent retains the exclusive right to make or not make the Section 1111(b) election on behalf of the First Lien Secured Parties. Thi

5. Relief from Automatic Stay The W&G draft provides that the Unsecured Notes Trustee will not seek relief from the automatic stay imposed by Section 362 of the Bankruptcy Code for the purpose of enforcing rights against the Collateral. This restriction is appropriate given the Unsecured Notes' lack of lien rights — the Unsecured Notes Trustee has no basis for seeking stay relief to foreclose on or seize Collateral i

1. Amendments to First Lien Documents The W&G draft permits amendments, modifications, supplements, and waivers to the Credit Agreement and the related First Lien Documents without the consent of the Unsecured Notes Trustee, subject to the condition that such amendments do not increase the aggregate principal amount of the First Lien Obligations beyond the amount permitted under the Indenture's incurrence covenant. T