Contract analysis

I. Introduction and Purpose We write on behalf of Calderwood & Harkness LLP ("C&H") in connection with our engagement by Nexford Industrial Holdings Inc. ("Nexford" or the "Company") pursuant to the engagement letter dated April 22, 2022, entered into under the standing outside counsel agreement between C&H and Nexford dated January 15, 2020. The purpose of this letter is to communicate the results of our review of t

II. Scope of Review C&H reviewed the complete broker marketing submission package as circulated by Ashford Breckinridge on May 3, 2022. The Submission package consisted of the following components: (a) Narrative underwriting submission (12 pages); (b) Financial summary and exhibits (including revenue, EBITDA, balance sheet summary, and capital structure overview); (c) Loss history and claims summary (five-year histor

III. Factual Corrections Required We have identified three factual errors or omissions in the Submission that require correction before the Submission is re-circulated to the carrier market. Each is described in detail below. A. Correction No. 1: FY2021 Consolidated Revenue Figure The Submission states Nexford's FY2021 consolidated revenue as "$1.45 billion" in the financial summary section (page 4 of the narrative)

1. Higgins v. Nexford Conveyor Systems, LLC et al., Case No. 2021-L-04382, Circuit Court of Will County, Illinois, filed September 14, 2021. The plaintiff alleges a catastrophic crush injury caused by a defective emergency stop mechanism on the Company's Model NCS-7200 conveyor system. Damages sought: $14.5 million. Status: Active; case is currently in discovery. Nexford Conveyor Systems, LLC is being defended by Kin

2. Consolidated Builders Supply Co. v. Triton Fastener Corp., Case No. 1:21-cv-08914, United States District Court for the Northern District of Illinois, filed November 2, 2021. The plaintiff alleges structural failure of Grade 8 hex bolts manufactured by Triton Fastener Corp., resulting in a partial collapse at a commercial construction site. Damages sought: $6.8 million. Status: Active; defendant's motion to dismis

IV. Presentation Recommendations In addition to the factual corrections described above, we offer two presentation recommendations that we believe will strengthen the Submission, improve the quality of underwriter responses, and position the Company more favorably in competitive negotiations. These are not corrections of errors but rather suggestions for enhancement based on our experience with broker submissions for

V. Process and Next Steps Based on the foregoing, we recommend the following steps:

1. Ashford Breckinridge should prepare a corrected and supplemented Submission incorporating the three factual corrections (Section III.A through III.C) and the two presentation recommendations (Section IV.A and IV.B) outlined in this letter.

2. The corrected Submission should be re-circulated to all incumbent and prospective carriers before the end of May 2022. We understand that carrier renewal quotes are expected to be received during the window of May 18 through June 8, 2022, and it is important that the corrected Submission be in underwriters' hands with sufficient lead time to be reflected in the initial renewal quotes.

3. C&H is available to review the corrected Submission prior to re-circulation. We commit to a turnaround of 48 hours from receipt of the revised document.

4. A copy of this letter has been provided to Trevor Haines, Vice President, Risk Management, and Donna Kowalski, Director of Insurance and Claims, for their reference in coordinating with Ashford Breckinridge (Phillip Garza and Tamara Fisk) on the preparation of the corrected Submission.

5. Separately, C&H's initial coverage gap memoranda for both the D&O Tower and the PL Tower are currently in preparation. We expect to deliver these memoranda to you by May 27, 2022. The coverage gap memoranda will address policy terms and conditions, identified coverage gaps and overlaps within each tower, and recommendations for policy-level improvements to be negotiated during the renewal process. We are happy to

VI. Confidentiality and Privilege Notice This letter constitutes a privileged and confidential attorney-client communication and attorney work product. It has been prepared by Calderwood & Harkness LLP in connection with its engagement by Nexford Industrial Holdings Inc. under Matter No. 1005-00003. The information, analysis, and recommendations contained herein are protected by the attorney-client privilege and the