Ryan and Patricia,
I hope this email finds you well. I am a senior associate at Calderwood & Harkness LLP working under Claudia Merritt's supervision on the representation of Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower") in connection with the proposed $1,400,000,000 senior secured Term Loan B refinancing and dividend recapitalization (the "Transaction"). For internal tracking purposes, this matter is filed as C&H Matter No. 1005-00001.
The purpose of this email is to establish coordination protocols between Calderwood & Harkness (borrower's counsel, representing Nexford) and Kellner Brandt & Associates LLP (sponsor's counsel, representing Granite Peak Capital Partners, LP) so that we can manage the various workstreams efficiently as the Transaction moves forward. I wanted to get this in front of everyone early so we are aligned on roles, responsibilities, and information flow from the outset.
**Transaction Overview**
For alignment purposes, a brief summary of where things stand:
- Crescent Harbor Bank, N.A. is serving as lead left arranger, administrative agent, and collateral agent for the $1,400,000,000 Term Loan B facility. Whitfield & Gage LLP (Margaret Ashby) is acting as arranger's/agent's counsel. - The mandate letter with Crescent Harbor was executed on January 27, 2025. Calderwood & Harkness's engagement was formalized on February 3, 2025. - Crescent Harbor delivered the initial term sheet on February 5, 2025. We are currently reviewing and marking up the term sheet and expect to deliver our marked version to Whitfield & Gage by February 10, 2025. - For reference, the Nexford board approved the refinancing and dividend on January 13, 2025, and we understand Granite Peak board approval was obtained on January 6, 2025.
**Proposed Division of Responsibilities**
To ensure we are not duplicating efforts or leaving gaps, I wanted to outline our understanding of the division of labor between borrower's counsel and sponsor's counsel. I would appreciate Patricia's confirmation or any adjustments.
*Calderwood & Harkness (Borrower's Counsel)* — We anticipate taking the lead on the following:
1. Review and negotiation of the credit agreement, security and collateral documents (guarantee agreement, security agreement, pledge agreements, IP security agreement), and the intercreditor agreement with Whitfield & Gage. 2. Due diligence coordination. We issued our due diligence request list to Nexford on February 4, 2025, and are working with Priya Mehta (VP, Treasury & Corporate Finance) on document collection. 3. Preparation and delivery of borrower-side legal opinions, including Calderwood & Harkness New York law opinions and coordination with Hargrove & Whitmore LLP (Illinois local counsel) and Briarcliff Legal Group PA (Delaware local counsel) for local law opinions. 4. UCC filings, lien searches, and collateral perfection mechanics across all filing jurisdictions (Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan). 5. Closing mechanics, funds flow memorandum, officer's certificates, and the closing agenda. 6. Real property collateral matters, including mortgages, title insurance (Landmark Title Assurance Company), environmental review coordination (Clearwater Environmental Sciences, Inc.), and appraisals (Greystone Valuation Services, Inc.). 7. Tax analysis. Sylvia Hartwell in our tax group is handling the dividend recapitalization tax structuring, Section 163(j) interest deduction limitation analysis, and withholding/FATCA matters.
*Kellner Brandt & Associates (Sponsor's Counsel)* — Patricia, we understand your anticipated scope to include the following, and would appreciate your confirmation:
1. Review and comment on the credit agreement, guarantee agreement, and security documents from the sponsor's perspective, particularly as they relate to Granite Peak NIH Holdings, LLC (the Holdings guarantor and direct parent of Nexford) and the equity pledge. 2. Sponsor-side governance matters, including the Holdings LLC agreement and any consent or approval requirements at the fund level (Granite Peak Capital Fund IV, LP and GP Fund IV Co-Invest, LP). 3. Analysis of restricted payment and dividend mechanics under both the new credit agreement and the existing Senior Unsecured Notes Indenture (dated November 8, 2021; Pinnacle Trust Company, as trustee) to confirm that the approximately $335,000,000 dividend to Holdings is permitted under applicable baskets and conditions. 4. Change of control provisions — ensuring that Granite Peak permission carve-outs and related transfer provisions are appropriately drafted. 5. Any Granite Peak-specific side letters, management agreements, monitoring fee arrangements, or related-party arrangements that need to be disclosed, carved out, or otherwise addressed in the credit documentation.
Please let us know if this accurately reflects your anticipated scope or if there are additional areas Kellner Brandt intends to cover.
**Key Workstreams and Upcoming Milestones**
For Ryan's and Patricia's planning purposes, the near-term timeline is as follows:
- **February 7–10:** C&H completing annotated term sheet and delivering marked term sheet to Whitfield & Gage. - **February 10–14:** Term sheet negotiation; target commitment letter execution by February 14, 2025. - **February 18:** Fee letter execution target. - **February 19:** Rating agency presentations to Keystone Ratings Group, Inc. and Sentinel Credit Analytics, LLC. Stonebridge Advisory Group, LLC (Andrew Castellano) is coordinating the rating agency process. - **Late February:** We anticipate receiving the first draft credit agreement from Whitfield & Gage. We will circulate to Kellner Brandt for sponsor-side review promptly upon receipt. - **February 27:** Bank meeting / lender presentation for syndication. - **March 28, 2025:** Target closing date.
**Document Sharing and Communication Protocol**
We propose that Calderwood & Harkness serve as the central drafting hub for all borrower-side documents. We will circulate all drafts to Kellner Brandt concurrently with our submission to Whitfield & Gage (and will forward incoming W&G drafts to you promptly upon receipt) so that Patricia and her team can review and provide sponsor-side comments on a parallel track.
To maintain a single, unified borrower-side markup going back to agent's counsel, we would ask that Kellner Brandt route sponsor-side comments through us rather than directly to Whitfield & Gage. This should avoid any conflicting or duplicative markups and present a cleaner front to the other side.
As the transaction ramps up, I would suggest a weekly check-in call among C&H, Kellner Brandt, and the Granite Peak deal team (Ryan and any colleagues you'd like to include). We can increase the frequency as we approach closing. I am happy to coordinate scheduling once we have the right participants identified.
I should also note that Sophie Tremblay, a working associate on our team (copied here), will be the primary day-to-day contact for organizational document collection, subsidiary-level matters, and perfection mechanics. Please feel free to reach out to her directly on those items.
**Immediate Requests**
A few items we would appreciate in the near term:
1. *Ryan* — Could you confirm whether anyone else at Granite Peak should be included on transaction correspondence? For example, if Derek Calloway or Vanessa Liu would like to receive key documents or be on distribution for major drafts, please let us know and we will add them.
2. *Patricia* — Could you provide Kellner Brandt's working team contact information (associates, paralegals) so we can loop in the right people on document circulation?
3. *Patricia / Ryan* — We would appreciate receiving any Granite Peak governance documents or fund-level consents that C&H should be aware of in connection with the Holdings guarantee and equity pledge. Granite Peak NIH Holdings, LLC is a Delaware limited liability company (DE File No. 7234891, registered agent: Penmark Industries, 1209 Orange Street, Wilmington, DE 19801). The Holdings Guarantor will need to execute the guarantee agreement and the Holdings pledge agreement (pledging 100% of the equity interests in Nexford), and we will need to prepare or review the relevant manager/member resolutions authorizing the same. To the extent the LLC agreement or any fund-level documents contain consent requirements, it would be helpful to have those in hand as early as possible.
**Confidentiality**
As a reminder, all Transaction-related communications are confidential and subject to applicable privilege. We would ask that distribution of deal materials and correspondence be limited to deal team members with a need to know.
** * **
Thank you both for your time and coordination on this. We are looking forward to working with you and are confident we can run an efficient process. Claudia Merritt is, of course, available for any partner-level discussions as needed — please do not hesitate to reach out to either of us.
Best regards,
Marcus Leung Associate, Banking & Finance Calderwood & Harkness LLP 425 Lexington Avenue New York, New York 10017 (212) 555-0839