Contract analysis

I. Executive Summary The purpose of this memorandum is to set out our preliminary framework analysis of the intercreditor arrangements to be established, in connection with the closing of the above-referenced financing, between (a) the first lien secured parties under the new $1,400,000,000 senior secured Term Loan B facility, with Crescent Harbor Bank, N.A. acting as Administrative Agent and First Lien Collateral Ag

II. Transaction Background and Capital Structure Context A. The Transaction Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower") is a Delaware corporation, with its headquarters at 1400 Industrial Parkway, Schaumburg, IL 60173. Nexford is entering into a $1,400,000,000 senior secured Term Loan B facility on the following principal terms: • Borrower: Nexford Industrial Holdings Inc. • Administrative Agent /

III. Parties to the Intercreditor Agreement A. First Lien Collateral Agent Crescent Harbor Bank, N.A., in its capacity as Collateral Agent under the Credit Agreement for the benefit of the First Lien Secured Parties. The "First Lien Secured Parties" will include the Administrative Agent, the Lenders, and any hedging counterparties or cash management providers entitled to share in the collateral pursuant to the terms

1. Borrower: Nexford Industrial Holdings Inc.

2. Holdings Guarantor: Granite Peak NIH Holdings, LLC.

3. Subsidiary Guarantors (11 in total): • Nexford Precision Components, Inc. • Nexford Engineered Systems, LLC • Nexford Coatings & Surface Technologies, Inc. • Nexford Manufacturing Services, LLC • Nexford Properties, LLC • Nexford International Holdings, Inc. • Clearfield Tool & Die, Inc. • Summit Industrial Fabrication Co. • Ridgepoint Specialty Coatings, LLC • Lakeshore Precision Engineering, Inc. (One additional

IV. Nature of the Intercreditor Relationship: First Lien vs. Unsecured A. Structural Priority The starting point for the analysis is that the Term Loan B is a secured obligation, benefiting from a first-priority security interest granted by the Borrower and the Guarantors in substantially all of their assets (subject to customary excluded asset carve-outs). The Senior Unsecured Notes, by contrast, are both structural

1. To fix priority as between first lien collateral proceeds and unsecured note claims;

2. To limit unsecured creditor actions that could impair the first lien security interest (through attachment, judicial lien, involuntary petition, or otherwise);

3. To address the rights and obligations of the unsecured noteholders in a bankruptcy or insolvency proceeding, including with respect to DIP financing, cash collateral, adequate protection, and plan confirmation;

4. To coordinate remedies and enforcement as between the two creditor classes; and

5. To provide borrower-side protections — in particular, to ensure that the agreement does not confer on the unsecured noteholders any rights beyond those they already enjoy under the Indenture. The Credit Agreement itself contains customary provisions authorizing the Administrative Agent to enter into intercreditor arrangements — both the current First Lien/Unsecured Intercreditor Agreement and any future first lien

V. Key Substantive Provisions — Analysis and Borrower Positions A. Lien Priority and Collateral Access

1. First Lien Priority. The intercreditor agreement must state unambiguously that the First Lien Secured Parties have first-priority access to all collateral securing the Term Loan B. This includes all personal property collateral — accounts receivable, inventory, equipment, intellectual property, deposit accounts, securities accounts, and general intangibles — and all real property mortgages. Nexford has agreed to g

2. No-Action / Enforcement Limitation on Unsecured Noteholders. A meaningful drafting question is whether the intercreditor agreement should include a "standstill" or "no-action" covenant preventing the Trustee (or the noteholders individually) from taking enforcement actions against collateral. Borrower position. Because the notes are unsecured, the noteholders have no lien-based collateral enforcement rights to beg

1. Proceeds of Collateral. The intercreditor agreement should establish that, upon (i) any enforcement action or foreclosure with respect to the collateral, (ii) any asset disposition triggering mandatory prepayment under the Credit Agreement, (iii) any insurance or condemnation event resulting in receipt of net cash proceeds, or (iv) any distribution in respect of collateral in an insolvency proceeding, the resultin

2. Insurance and Condemnation Proceeds. The Credit Agreement contains a mandatory prepayment provision requiring 100% of the net cash proceeds from insurance or condemnation events (subject to customary reinvestment rights and a $10,000,000 de minimis threshold) to be applied to the Term Loan B. The intercreditor agreement should confirm that any such proceeds constitute first lien collateral proceeds for waterfall p

3. Asset Sale Proceeds. Similarly, the Credit Agreement requires 100% of the net cash proceeds of asset sales (subject to reinvestment periods of 365 days or, if committed to be reinvested, up to 545 days, and a $25,000,000 annual de minimis basket) to be applied as mandatory prepayment. The intercreditor agreement should treat such proceeds as first lien collateral proceeds. We should watch for any drafting from Whi

1. Duration and Scope. We should expect Whitfield & Gage to include an enforcement standstill precluding the unsecured noteholders from taking certain legal actions — including filing involuntary bankruptcy petitions, seeking pre-judgment attachments, or obtaining judgment liens against the Loan Parties — during a specified period (customarily 90 to 180 days) following an event of default under the Indenture, during

2. Carve-Outs from Standstill. Notwithstanding any standstill, the unsecured noteholders (through the Trustee) must retain the right to: (a) file proofs of claim in any bankruptcy or insolvency proceeding; (b) vote on any plan of reorganization or arrangement; (c) exercise contractual rights under the Indenture that do not involve collateral enforcement — in particular, acceleration of the notes upon an Indenture def

1. DIP Financing Consent. We should expect a provision requiring the Trustee (on behalf of the unsecured noteholders) to consent, or at a minimum not to object, to debtor-in-possession financing arranged by or with the support of the First Lien Secured Parties in any chapter 11 case, including priming liens and use of cash collateral, provided that the DIP financing satisfies specified parameters. Borrower position.

2. Plan of Reorganization. Related "no-contest" or "no-object" provisions may be proposed, preventing the unsecured noteholders from opposing any chapter 11 plan supported by the requisite first lien lenders, to the extent that the plan provides the unsecured noteholders with the treatment to which they are entitled under the absolute priority rule. Borrower position. A carefully limited version of this provision is

3. Adequate Protection. The intercreditor agreement should confirm that only the First Lien Collateral Agent, on behalf of the First Lien Secured Parties, is entitled to adequate protection with respect to the collateral. The unsecured noteholders may seek adequate protection only to the extent (if any) they have a cognizable interest in unencumbered assets. Given the comprehensive first lien collateral package, the

4. Avoidance Actions / Subordination. Treatment of avoidance action proceeds — recoveries under sections 544, 547, 548 and 550 of the Bankruptcy Code — should be expressly addressed. The standard formulation is that avoidance action proceeds relating to collateral (for example, recoveries of preferential transfers of collateral, or fraudulent transfers of assets that would have been collateral but for the transfer) a

1. Automatic Release Provisions. If the First Lien Collateral Agent releases a lien on collateral or releases a Guarantor — for example, in connection with a permitted asset sale, a designation of an Unrestricted Subsidiary, or a disposition under the $25,000,000 annual de minimis basket — the corresponding rights (if any) of the unsecured noteholders with respect to such asset or Guarantor should be automatically re

2. Release in Connection with Refinancing. The intercreditor agreement should expressly contemplate that the Term Loan B may be refinanced with replacement first lien indebtedness. In such event, the successor first lien administrative agent and collateral agent should be permitted to accede to the intercreditor agreement, and to step into the shoes of Crescent Harbor Bank, without requiring unsecured noteholder cons

1. First Lien Document Amendments. The First Lien Secured Parties should be free to amend, extend, modify, refinance, replace, or supplement the Credit Agreement and the other first lien loan documents — including, without limitation, incurring incremental facilities under the free-and-clear basket (the greater of $280,000,000 and 100% LTM Adjusted EBITDA) and the ratio-based incremental capacity (available so long a

2. Unsecured Document Amendments. The unsecured noteholders should remain free to amend the Indenture subject to its own terms, but the intercreditor agreement may (and should) restrict Indenture amendments that would: (a) expand the noteholders' rights vis-à-vis collateral (for example, by adding covenants requiring the grant of a lien in favor of the noteholders); (b) create liens in favor of the noteholders on any

I. Change of Control Interaction The Credit Agreement contains a change of control provision triggered upon (i) the acquisition by any person or group (other than Granite Peak and its affiliates) of more than 35% of the voting equity of Holdings, (ii) Nexford ceasing to be a direct wholly-owned subsidiary of Holdings, or (iii) a "change of control" as defined under the Indenture. The Indenture, in turn, is expected t

VI. Comparison to First Lien / Second Lien Intercreditor Framework A first lien / second lien intercreditor agreement — not required in the current transaction, but enabled by the Credit Agreement — would typically include a materially more robust suite of protections in favor of the first lien creditors: longer enforcement standstills (commonly 180 days, sometimes with tolling provisions); explicit lien subordinatio

VII. Interaction with Existing Indenture Provisions Our detailed analysis of the Indenture is set out in the Indenture Memo dated February 14, 2025. For present purposes, the following Indenture provisions are directly relevant to the intercreditor framework and should be cross-checked as we mark up the intercreditor draft: • Debt incurrence covenants. The Indenture's debt incurrence covenant limits Nexford's ability

VIII. Provisions Permitting Future Intercreditor Arrangements The Credit Agreement contains enabling provisions permitting the Administrative Agent, Crescent Harbor Bank, N.A., to enter into a separate first lien / second lien intercreditor agreement if, and to the extent that, Nexford later incurs second lien indebtedness in reliance on the permitted debt provisions of the Credit Agreement (and, correspondingly, the

IX. Recommended Borrower Negotiation Positions Consolidated for reference, our principal negotiating positions on receipt of the Whitfield & Gage draft will be as follows:

1. Priority waterfall. Insist on clear, unconditional first lien priority for all collateral proceeds. The four-tier waterfall set out in Section V.B should be preserved without modification.

2. Enforcement standstill. Accept a limited standstill (target: 90 days) precluding unsecured noteholder interference with collateral enforcement; resist any period longer than 120 days and resist reset/tolling mechanics.

3. Automatic release. Ensure automatic release of any residual noteholder claims on assets or guarantors upon any collateral or guarantor release effected under the Credit Agreement, without any independent noteholder consent, notice, or condition.

4. DIP financing. Support first lien-friendly DIP consent provisions, but ensure adequate protection carve-outs remain available to the unsecured noteholders in a manner sufficient to preserve reasonable reorganization flexibility for the Borrower.

5. Amendment freedom. First lien parties must be free to amend, refinance, extend, replace, or supplement the Credit Agreement — including through the incurrence of incremental facilities under both the free-and-clear and ratio baskets — without unsecured noteholder consent.

6. Permitted payments. The intercreditor agreement must not create additional payment blockage provisions beyond those in the Credit Agreement. Scheduled interest on the notes ($18,125,000 per annum) must remain a permitted payment in all events other than payment defaults on the Term Loan B.

7. Change of control coordination. Prevent the intercreditor agreement from creating an additional change of control trigger, and preserve the Borrower's ability to manage dual change of control puts in a coordinated fashion.

8. No additional rights for unsecured noteholders. As an overarching principle, the intercreditor agreement should confer on the unsecured noteholders no rights or remedies beyond those already existing under the Indenture. Watch for provisions — often buried in acknowledgement or notice mechanics — that could be read to expand noteholder rights.

X. Process and Next Steps • Whitfield & Gage LLP (Jonathan Ferris, working associate, under direction of Margaret Ashby, responsible partner) is expected to circulate the first draft of the intercreditor agreement on or about March 12, 2025 (today). • C&H to review and prepare a marked draft, targeting return of comments by March 19, 2025. Sophie Tremblay to take first-pass drafting responsibility; Marcus Leung to re

XI. Conclusion The First Lien/Unsecured Intercreditor Agreement is a comparatively standard document in a leveraged finance transaction with outstanding unsecured notes, and we do not anticipate the substantive drafting to raise novel or particularly contentious issues, provided we are disciplined about the borrower-side positions identified above. The principal risks for the Borrower are, in order of priority: (a) t