Robert and Catherine,
I hope you are both well. I am writing to provide detailed instructions regarding the form and scope of the local counsel opinion letters that will be required in connection with the above-referenced transaction. I apologize in advance for the length of this email, but I want to be as precise as possible at the outset to minimize the number of iterations we will need on drafts.
**1. Transaction Overview**
As you are each aware, our client, Nexford Industrial Holdings Inc., a Delaware corporation (the "Borrower"), is entering into a $1,400,000,000 senior secured Term Loan B facility (the "Facility") with Crescent Harbor Bank, N.A. acting as Administrative Agent and Collateral Agent (the "Agent"), pursuant to a Credit Agreement (the "Credit Agreement") to be governed by New York law. The proceeds of the Facility will be used to (a) refinance the Borrower's existing credit facilities held by Atlas Meridian Bank, N.A. and (b) fund a dividend recapitalization to Granite Peak NIH Holdings, LLC, the Borrower's direct parent and the Holdings entity for purposes of the Credit Agreement. The target closing date is **March 28, 2025**.
Calderwood & Harkness is serving as borrower's counsel and will deliver its own New York law opinions on enforceability and UCC perfection matters at closing. The Agent's counsel is Whitfield & Gage LLP (Margaret Ashby and Jonathan Ferris), who will be reviewing each of the local counsel opinions as well. The delivery of the local counsel opinions described herein is a condition precedent to closing under both the Credit Agreement and the commitment letter with Crescent Harbor.
**2. Addressee of Opinions**
Each local opinion letter should be addressed as follows:
Crescent Harbor Bank, N.A. as Administrative Agent and Collateral Agent, for the benefit of the Secured Parties under the Credit Agreement 320 Federal Street Boston, Massachusetts 02110 Attention: Elaine Prescott, Managing Director, Leveraged Finance Origination
Please note that the Agent's counsel at Whitfield & Gage may request that both the Agent and the Lenders be entitled to rely on the opinions. I will confirm this once I hear from Jonathan Ferris, but please plan to include customary third-party reliance language (more on this below in Section 6).
**3. Instructions to Hargrove & Whitmore LLP (Robert) — Illinois Local Counsel Opinion**
Robert, your opinion will cover the single Illinois-organized Loan Party: **Nexford Manufacturing Services, LLC**, an Illinois limited liability company. The anticipated scope is as follows:
(a) *Due Organization, Valid Existence, and Good Standing.* An opinion that Nexford Manufacturing Services, LLC is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Illinois.
(b) *Power and Authority; Due Authorization.* An opinion that Nexford Manufacturing Services, LLC has the limited liability company power and authority to execute, deliver, and perform its obligations under the Guarantee Agreement, the Security Agreement, and each other collateral document to which it is a party (collectively with respect to this entity, its "Loan Documents"), and that all necessary limited liability company action has been taken to authorize the execution, delivery, and performance thereof.
(c) *Enforceability.* An opinion that each Loan Document to which Nexford Manufacturing Services, LLC is a party constitutes the legal, valid, and binding obligation of Nexford Manufacturing Services, LLC, enforceable against it in accordance with its terms, subject to customary qualifications (see Section 5 below).
(d) *No Conflicts.* An opinion that the execution and delivery of the Loan Documents by Nexford Manufacturing Services, LLC, and the performance by it of its obligations thereunder, do not violate (i) applicable Illinois law or (ii) its articles of organization or operating agreement.
(e) *Perfection of Security Interests (Illinois UCC).* An opinion that the filing of a UCC-1 financing statement with the Illinois Secretary of State naming Nexford Manufacturing Services, LLC as debtor and the Agent as secured party is effective to perfect a security interest in the personal property collateral described in the Security Agreement, to the extent such security interest is perfectable by the filing of a financing statement under the Illinois Uniform Commercial Code.
(f) *Real Property Matters — Post-Closing (For Discussion).* I understand that Hargrove & Whitmore is assisting with the mortgage filings in connection with the following properties:
- Cook County, IL: 1400 Industrial Parkway, Schaumburg, IL 60173 (appraised value: $85,000,000) - Winnebago County, IL: 2750 Commerce Drive, Rockford, IL 61101 (appraised value: $42,000,000)
Under the terms of the Credit Agreement, the real property opinions (including enforceability of the mortgages and any mortgage recording tax opinions) are **post-closing deliverables** with a deadline of **April 30, 2025**. Accordingly, those opinions need not be delivered at the March 28 closing. That said, I would like to schedule a brief call with you to discuss the anticipated scope of the real property opinions and any Illinois mortgage recording tax considerations — particularly for Cook County — so that we can flag any issues early. Please let me know your availability next week.
**4. Instructions to Briarcliff Legal Group PA (Catherine) — Delaware Local Counsel Opinion**
Catherine, your opinion will cover the following seven Delaware-organized Loan Parties:
1. **Nexford Industrial Holdings Inc.** — Delaware corporation (DE File No. 5765432) — the Borrower 2. **Granite Peak NIH Holdings, LLC** — Delaware LLC (DE File No. 7234891) — the Holdings Guarantor 3. **Nexford Precision Components, Inc.** — Delaware corporation 4. **Nexford Engineered Systems, LLC** — Delaware LLC 5. **Nexford Coatings & Surface Technologies, Inc.** — Delaware corporation 6. **Nexford Properties, LLC** — Delaware LLC 7. **Nexford International Holdings, Inc.** — Delaware corporation (the CFC Holdco)
For the avoidance of doubt, the remaining Subsidiary Guarantors — Clearfield Tool & Die, Inc. (Pennsylvania), Summit Industrial Fabrication Co. (South Carolina), Ridgepoint Specialty Coatings, LLC (Texas), and Lakeshore Precision Engineering, Inc. (Michigan) — are organized in other states and fall outside the scope of the Delaware opinion. Calderwood & Harkness will address those entities in our own opinion or through other arrangements.
The anticipated scope for the Delaware opinion is as follows:
(a) *Due Organization, Valid Existence, and Good Standing.* An opinion that each of the seven Delaware-organized entities listed above is duly organized (or duly formed, in the case of LLCs), validly existing, and in good standing under the laws of the State of Delaware.
(b) *Power and Authority.* An opinion that each Delaware-organized entity has the corporate or limited liability company power and authority to execute, deliver, and perform its obligations under the Credit Agreement (in the case of the Borrower), the Guarantee Agreement, the Security Agreement, the applicable Pledge Agreements, and each other Loan Document to which it is a party.
(c) *Due Authorization.* An opinion that all necessary corporate action (in the case of the corporations) or limited liability company action (in the case of the LLCs) has been taken by each Delaware-organized entity to authorize the execution, delivery, and performance of its respective Loan Documents and the consummation of the transactions contemplated thereby. For your reliance in rendering this opinion, Calderwood & Harkness will provide copies of (i) the board resolutions adopted by the Borrower on January 13, 2025, (ii) the manager/member resolutions adopted by Granite Peak NIH Holdings, LLC on January 13, 2025, and (iii) resolutions for each of the remaining Delaware-organized Subsidiary Guarantors. Sophie Tremblay will compile and forward these to you.
(d) *No Conflicts with Organizational Documents.* An opinion that the execution and delivery of the Loan Documents by each Delaware-organized entity, and the performance by it of its obligations thereunder, do not violate its certificate of incorporation or certificate of formation, as applicable, or its bylaws or limited liability company agreement.
(e) *Delaware LLC Act Enforceability Qualifications.* To the extent the opinion covers enforceability of the obligations of the Delaware LLC entities, standard qualifications under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.) are acceptable, including the customary qualification regarding the implied covenant of good faith and fair dealing.
**5. General Requirements Applicable to Both Opinions**
The following requirements apply to both the Illinois and Delaware opinions:
(a) *Defined Terms.* Each opinion letter may use defined terms as set forth in the Credit Agreement (the execution version or near-final draft, as applicable) without independently defining terms already defined therein. We expect to circulate a substantially final form of the Credit Agreement in advance of the draft opinion deadline.
(b) *Assumptions and Qualifications.* Customary assumptions and qualifications are acceptable, including without limitation:
- Genuineness of all signatures and authenticity of all documents submitted as originals; conformity to originals of all documents submitted as copies. - Due capacity and authority of all parties other than the entities covered by the opining counsel's opinion. - Accuracy and completeness of the factual certificates and representations furnished by the Borrower and the other Loan Parties (we will provide an opinion back-up certificate for this purpose — see below). - The standard insolvency/bankruptcy qualification — no opinion is required on fraudulent transfer, voidable preference, or similar matters under applicable debtor relief laws. - The equitable principles qualification — enforceability opinions may be qualified by reference to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally, and by general principles of equity (whether considered in a proceeding at law or in equity).
(c) *Opinion Back-Up Certificate.* Calderwood & Harkness will provide both firms with a copy of the opinion back-up certificate to be executed by an authorized officer of Nexford Industrial Holdings Inc. on behalf of the Borrower and each of the other Loan Parties. You may rely on this certificate for factual matters underlying your opinions. We expect to circulate a draft of this certificate during the week of **March 17**.
(d) *Exclusions.* Neither opinion should be required to address matters of federal law, securities law (federal or state), tax law, pension or ERISA matters, environmental law, or antitrust law.
(e) *"As Of" Date.* Each opinion should be dated as of the closing date, **March 28, 2025**.
(f) *Good Standing Certificates.* Each firm should order bring-down good standing certificates from the applicable Secretary of State (Illinois or Delaware, as the case may be) dated within five (5) business days of closing. Sophie Tremblay has already initiated the ordering process for certificates for all entities, and we will share those with you if timing permits, but I would ask that each of you have your own ordering process in place as a backup to ensure we are not caught short at closing.
**6. Calderwood & Harkness's Own Opinions — Coordination Note**
For your reference, Calderwood & Harkness will be delivering at closing: (i) a New York law opinion on the enforceability of the Credit Agreement, the Guarantee Agreement, and the other Loan Documents; and (ii) a separate opinion on the perfection of security interests under the New York UCC upon the filing of UCC-1 financing statements and the delivery of pledged collateral (including pledged equity interests).
Our opinions will cross-reference and expressly rely upon each of your local counsel opinions for entity-level matters — specifically, due organization, valid existence, good standing, and authority — with respect to the Delaware- and Illinois-organized entities. Accordingly, it is important that the scope of your opinions cover these matters as described above.
Additionally, as noted in Section 2, the Agent's counsel at Whitfield & Gage may request that the local counsel opinions contain express language permitting reliance by the Administrative Agent and each Lender that is or becomes a party to the Credit Agreement. I ask that both of you include customary third-party reliance language in your draft opinions. If you have concerns about the scope of reliance or wish to discuss limitations, please raise them early so we can address them with Jonathan Ferris.
**7. Draft Delivery and Review Process**
I would ask that each of you circulate a **preliminary draft** of your respective opinion letter to Calderwood & Harkness (copying Claudia and Sophie) by **Thursday, March 20, 2025**. This is the same date on which we plan to circulate our own preliminary draft opinions to Whitfield & Gage for their review. Jonathan Ferris will likely have comments on the form and scope of the local opinions; we will coordinate the back-and-forth between your firms and the Agent's counsel.
**Final executed opinions** are to be delivered on the closing date, **March 28, 2025**.
**8. Document List / Attachments**
I will separately send (or in some cases have previously sent) the following materials for each of your review:
- Credit Agreement — current draft (third draft stage; we expect this to be substantially agreed with the Agent's counsel by early next week) - Guarantee Agreement — first draft (circulated March 10, 2025) - Security Agreement — first draft (circulated March 10, 2025) - Pledge Agreements (Holdings Pledge, Borrower Pledge, and Subsidiary Pledges) — first drafts (circulated March 10, 2025) - Organizational documents and resolutions for each covered entity — to be compiled and shared by Sophie Tremblay - Corporate organization chart — updated version dated March 15, 2025 to follow
If any of you did not receive the March 10 circulation, please let me or Sophie know and we will resend promptly.
**9. Confirmation and Next Steps**
Please confirm at your earliest convenience that (a) you are available for the March 28 closing and can deliver final opinions on that date, and (b) the scope of opinions as described above is consistent with your understanding of the engagement. If you have any questions regarding scope, assumptions, qualifications, or any other aspect of the opinions, I would ask that you raise them promptly so that we can address them with the Agent's counsel before the draft opinions are circulated.
Thank you both for your continued assistance on this matter. I look forward to hearing from you.
Best regards,
Marcus Leung Associate, Banking & Finance Calderwood & Harkness LLP 425 Lexington Avenue New York, NY 10017 Tel: (212) 506-3847 Email: mleung@calderwoodharkness.com Matter No. 1005-00001
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