Contract analysis

I. Purpose of This Letter and Legal Basis for Notice Calderwood & Harkness LLP writes on behalf of its client, Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower"), a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 4200 West Lakeshore Industrial Parkway, Suite 300, Waukegan, Illinois 60085 (Employer Identification Number: 36-48

II. Description of the Underlying Litigation A. Case Caption and Parties The litigation that is the subject of this notice was captioned as follows: Cardinal Peak Industries v. Nexford Industrial Holdings Inc. Case No. 2022-L-008471 Circuit Court of Cook County, Illinois County Department, Law Division The plaintiff in the action was Cardinal Peak Industries ("Cardinal Peak" or "CPI"), a Colorado limited liability co

1. Breach of Contract — Cardinal Peak alleged that Nexford breached its obligations under the MSA by failing and refusing to pay invoiced surcharges on shipments of HRC and CRC products delivered during the period from March 2021 through May 2022, and that such refusal constituted a material breach of Sections 7.4 and 8.1 of the MSA.

2. Unjust Enrichment — Cardinal Peak alleged, in the alternative, that Nexford was unjustly enriched by receiving steel products at prices that did not reflect the true cost of raw-material inputs borne by Cardinal Peak, and that equity and good conscience required Nexford to compensate Cardinal Peak for the difference.

3. Account Stated — Cardinal Peak alleged that the invoices it issued to Nexford for the disputed surcharges were received, retained, and not objected to within a commercially reasonable time, and therefore constituted an account stated binding upon Nexford. E. Claimed Damages Cardinal Peak's complaint sought recovery of the following amounts: • Unpaid surcharges for the period March 2021 through May 2022: $4,730,000

III. Procedural History Leading to Settlement Following the close of pleadings in November 2022, the litigation proceeded through several phases of discovery and motion practice. Written discovery and Depositions (December 2022 – April 2023). The parties engaged in extensive written discovery, exchanging document productions relating to the MSA, the surcharge invoices, the Exhibit C Surcharge Methodology, internal pr

IV. Terms of the Settlement A. Definitive Settlement Documentation Following execution of the term sheet, the parties and their respective counsel negotiated the terms of a formal Settlement Agreement and Mutual Release (the "Settlement Agreement"), which was fully executed by both parties on August 18, 2023. A copy of the executed Settlement Agreement is enclosed herewith for the Administrative Agent's records, subj

V. Financial Impact and Borrower's Compliance A. Source of Settlement Funds The aggregate settlement payment of $1,890,000 will be funded from Nexford's operating cash flow and, to the extent necessary, from available capacity under the $45,000,000 revolving credit facility governed by the Credit Agreement. Nexford's Chief Financial Officer has confirmed that the Borrower maintains sufficient liquidity to satisfy bot

1. The execution, delivery, and performance of the Settlement Agreement, and the payment of the settlement amount contemplated thereby, do not result in a Default or an Event of Default under the Credit Agreement, as those terms are defined in Article VIII thereof.

2. After giving effect to the settlement and the anticipated settlement payments, the Borrower remains in compliance with all financial covenants set forth in Section 7.01 of the Credit Agreement, including without limitation the Maximum Leverage Ratio, the Minimum Fixed Charge Coverage Ratio, and the Minimum Consolidated Tangible Net Worth requirements.

3. The Borrower is in compliance with all other material terms, conditions, covenants, and obligations under the Credit Agreement as of the date of this letter.

4. No other litigation, arbitration, or proceedings are pending or, to the knowledge of the Borrower, threatened against the Borrower that would reasonably be expected to result in a Material Adverse Effect.

VI. Awareness and Approval by Nexford's Equity Sponsor For the Administrative Agent's information, Nexford's majority equity owner, Marlowe Asset Management Bluff Capital Partners, LP (the "Sponsor"), a Delaware limited partnership (general partner: Marlowe Asset Management Bluff Capital Management LLC; managing partner: Conrad Yeung), has been kept fully apprised of the Cardinal Peak litigation from its inception, i

VII. Contact Information and Availability for Questions Should the Administrative Agent have any questions regarding this notice, the underlying litigation, or the terms of the settlement, or should the Administrative Agent require any additional information or documentation, please do not hesitate to contact any of the following individuals: For questions regarding the litigation and settlement terms: Priya Anand, P

VIII. Reservation of Rights This notice is provided solely for informational purposes, in satisfaction of the Borrower's notice obligation under Section 6.03(b) of the Credit Agreement. Nothing in this letter shall be construed as, or deemed to constitute, a waiver, modification, or amendment of any rights, remedies, defenses, or obligations of the Borrower, the Administrative Agent, or any other party under the Cred