Contract analysis

I. Introduction and Purpose of This Letter Dear Ms. Whitfield, Mr. Schaeffer, and Ms. Calloway: We write to report on the outcome of the full-day mediation held on Wednesday, August 2, 2023, before the Honorable Catherine Lindström (Ret.) at the Great Lakes Dispute Resolution Center, located at 150 North Riverside Plaza, Suite 2700, Chicago, Illinois 60606. As you are aware, this mediation was conducted in connection

II. Background and Litigation Posture Entering Mediation To provide appropriate context for the settlement analysis, we briefly summarize the procedural history and litigation posture of this matter as it stood at the time of the mediation. A. Commencement of Litigation and Cardinal Peak's Claims Cardinal Peak Industries filed its Complaint against Nexford Industrial Holdings Inc. on August 8, 2022, in the Circuit Co

III. Summary of Mediation Proceedings A. Attendance and Representation The full-day mediation session convened at approximately 9:00 a.m. on August 2, 2023, at the offices of the Great Lakes Dispute Resolution Center. The parties were represented as follows: Nexford Industrial Holdings Inc. was represented by Priya Anand (Partner) and Simone Laroche (Senior Associate) of Calderwood & Harkness LLP. Deborah Whitfield,

IV. Settlement Terms The following is a summary of the material terms reflected in the executed term sheet. The term sheet contemplates that these terms will be incorporated into a formal Settlement Agreement and Mutual Release to be negotiated and executed by the parties within approximately two weeks of the mediation date. A. Settlement Payment Nexford has agreed to pay Cardinal Peak a total settlement amount of $1

V. Financial Analysis of Settlement Outcome We have prepared the following financial analysis to assist Nexford's management and Marlowe Asset Management Bluff Capital Partners in evaluating the settlement in the context of the overall litigation economics. A. Gross Savings Relative to Claimed Amount The $1.89 million settlement amount represents a 60% reduction from Cardinal Peak's claimed $4.73 million in unpaid su

VI. Lender Notification Requirement We wish to bring to your attention a lender notification obligation that will be triggered by the execution of the Settlement Agreement.

Section 6.03(b) of Nexford's $45 million revolving credit facility with Ridgecrest National Bank, N.A. (Credit Agreement dated March 12, 2021) requires that Nexford provide written notice to Ridgecrest of any settlement or compromise of litigation or disputed claims involving payments by Nexford in excess of $1,000,000 in the aggregate. Because the settlement amount of $1,890,000 exceeds this $1.0 million threshold,

VII. Next Steps The following action items must be completed in order to formalize the settlement and fully resolve this matter. We have organized these items in approximate order of priority and have identified the responsible parties for each. A. Formal Settlement Agreement and Mutual Release Pursuant to the term sheet, counsel for Cardinal Peak — Blackwood Stein & Associates LLP — has agreed to circulate an initia

VIII. Recommendation Based on our assessment of the litigation posture, the strength of Nexford's defenses, the costs and risks associated with continued litigation through trial, and the overall economics of the settlement, Calderwood & Harkness recommends proceeding expeditiously with the formalization of the settlement on the terms outlined in the executed term sheet. The settlement amount of $1.89 million represe

IX. Closing We respectfully request that Nexford and Marlowe Asset Management Bluff Capital Partners confirm authorization to proceed with the formal documentation of the settlement on the terms described in this letter and the executed term sheet. Specifically, we ask that Ms. Whitfield confirm, on behalf of Nexford, that we are authorized to negotiate and finalize the Settlement Agreement and Mutual Release, the MS