David, Michelle —
I hope you both had a good weekend, such as it was. With our target closing date of Friday, March 28 now four days out, I wanted to provide a comprehensive status update on the $1,400,000,000 senior secured Term Loan B facility with Crescent Harbor Bank, N.A. as Administrative Agent and Collateral Agent, and outline all outstanding pre-closing deliverables and logistics so we can keep this on track for a smooth closing.
**I. Current Status**
The transaction is in very good shape. Here is where we stand on the key documents and workstreams:
- **Credit Agreement.** Substantially agreed between our team and Whitfield & Gage LLP (Margaret Ashby's team). The near-final draft was circulated on Saturday, March 22, and only a small number of conforming changes remain — nothing substantive.
- **Intercreditor Agreement.** The First Lien / Unsecured intercreditor agreement between Crescent Harbor (as First Lien Collateral Agent) and Pinnacle Trust Company (as Unsecured Notes Trustee) is also in near-final form, circulated March 23.
- **Security Documents.** The Guarantee Agreement, Security Agreement, Pledge Agreements, and IP Security Agreement are all in execution-ready form.
- **Syndication.** General syndication closed on March 21, and Crescent Harbor has confirmed full syndication of the $1,400,000,000 facility.
We are well positioned, but we have a meaningful number of pre-closing deliverables that require prompt attention from the Nexford and Granite Peak teams. I have set these out in detail below.
**II. Outstanding Pre-Closing Deliverables — Nexford Action Items**
The following items require action from Nexford management and the in-house team by or before closing. Please review carefully:
1. **Closing Certificate of the Borrower.** A draft is attached for your review. This must be signed by an authorized officer on the closing date (March 28) and certifies satisfaction of all conditions precedent under Article IV of the Credit Agreement, accuracy of representations and warranties, absence of any Default or Event of Default, no Material Adverse Effect, and compliance with the financial covenants. Please review the draft and let us know if you have any comments.
2. **Officer's Certificate — Representations and Warranties; No Default.** To be signed by Michelle as CFO on March 28. This certificate confirms that all representations and warranties are true and correct in all material respects as of the closing date (other than those that by their terms speak as of an earlier date), and that no Event of Default or Default has occurred and is continuing.
3. **Solvency Certificate.** To be signed by Michelle as CFO. This certifies that, after giving effect to the Transactions (including the Term Loan B borrowing, refinancing of the existing Atlas Meridian facilities, and the approximately $335,000,000 dividend to Granite Peak NIH Holdings, LLC), Nexford and its subsidiaries on a consolidated basis are solvent — specifically, that the fair value of assets exceeds liabilities (including contingent liabilities), the company is able to pay its debts as they become due, and the company has adequate capital to carry on its business. **Michelle — please coordinate with Ashworth & Kendrick LLP (Helen Yamamoto) and your treasury team (Priya) to confirm that the underlying financial data fully supports the solvency analysis.** This is a certificate the lenders and their counsel will scrutinize closely, and we want to ensure the factual underpinnings are rock-solid.
4. **Pro Forma Compliance Certificate.** To be signed by Michelle. This certifies compliance with the financial covenants on a pro forma basis after giving effect to the Transactions: - Pro forma first lien net leverage ratio of approximately **3.38x** (($1,400,000,000 less $100,000,000 pro forma cash) ÷ $385,000,000 LTM Adjusted EBITDA) - Total net leverage ratio of approximately **4.03x** (($1,400,000,000 + $250,000,000 Senior Unsecured Notes – $100,000,000 cash) ÷ $385,000,000 LTM Adjusted EBITDA) - Each ratio is well below the 5.00x springing first lien net leverage covenant threshold. Please confirm that the EBITDA and cash figures remain current.
5. **Use of Proceeds / Sanctions Compliance Certificate.** Certifies that the proceeds of the Term Loan B will be used solely for the permitted purposes: (a) refinancing the existing Atlas Meridian first lien term loan (approximately $879,375,000), (b) funding the dividend to Granite Peak NIH Holdings, LLC (approximately $335,000,000), (c) paying transaction fees and expenses (approximately $38,625,000), and (d) providing approximately $147,000,000 of cash to the balance sheet — and that such use is in compliance with OFAC sanctions, anti-corruption laws (including the FCPA), and anti-money laundering laws (including the USA PATRIOT Act and the Bank Secrecy Act). Draft attached.
6. **Secretary's Certificate of the Borrower.** David — this one is yours. To be signed by you as General Counsel and Corporate Secretary. The certificate attaches: (a) certified incumbency of the authorized signatories (James Thornton as CEO, Michelle Kaplan as CFO, and David Engstrom as GC), (b) the board resolutions adopted January 13, 2025 authorizing the Transaction, and (c) certified copies of the certificate of incorporation and bylaws of Nexford. **Please confirm that the resolutions adopted on January 13 remain in full force and effect without amendment or modification.** If any amendments have been adopted since that date, we will need to review and address promptly.
7. **Secretary's Certificate of Granite Peak NIH Holdings, LLC (Holdings Guarantor).** The sponsor's counsel, Kellner Brandt & Associates LLP (Patricia Voss), is coordinating preparation; we have provided them with the form. We need confirmation that the manager/member resolutions adopted January 13, 2025 authorize the guarantee, the pledge of 100% of the equity interests in Nexford, and all related actions. David — if you have a line into Patricia's team, it would be helpful to ensure this is moving.
8. **Secretary's Certificates of Each Subsidiary Guarantor.** Sophie Tremblay has circulated forms to Priya's team for all 11 Subsidiary Guarantors:
- Nexford Precision Components, Inc. - Nexford Engineered Systems, LLC - Nexford Coatings & Surface Technologies, Inc. - Nexford Manufacturing Services, LLC - Nexford Properties, LLC - Nexford International Holdings, Inc. - Clearfield Tool & Die, Inc. - Summit Industrial Fabrication Co. - Ridgepoint Specialty Coatings, LLC - Lakeshore Precision Engineering, Inc.
Each must attach board or manager resolutions authorizing the guarantee and security documents, organizational documents, and incumbency certifications. **We need these returned in substantially final form by Wednesday, March 26 at the latest.** If Priya's team is running into any issues gathering the underlying resolutions or organizational documents for any entity, please flag immediately.
9. **Good Standing Certificates.** Must be dated within five business days of closing. Sophie has ordered these from the respective Secretaries of State in Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan. **Please confirm that Nexford's annual reports and registered agent fees are current in all jurisdictions** so that we do not encounter any filing delays or lapses in good standing.
10. **Opinion Back-Up Certificate.** This is the factual certificate from Nexford upon which Calderwood & Harkness will rely in rendering our legal opinions to Crescent Harbor; it covers organization, authority, no conflicts, and compliance matters. A draft has been provided. **David — please review and confirm you are comfortable with the factual statements by March 26.**
11. **Wire Transfer Instructions.** Nexford's designated accounts for receipt of loan proceeds. **Priya — please provide final confirmed wire instructions for Nexford's operating accounts, including accounts at Redstone National Bank (accounts ending in -4471, -4472, and -6633), by COB March 26.** These will be incorporated into the final funds flow memorandum.
12. **Atlas Meridian Payoff Letter.** We received a draft payoff letter from Atlas Meridian Bank, N.A. (Sandra Vickers), which we have reviewed and returned with comments. The payoff amount as of the anticipated closing date is estimated at $879,375,000 ($875,000,000 principal plus approximately $4,375,000 in accrued interest). The existing revolving facility ($190,000,000) is undrawn and will be terminated at closing. **Priya — please coordinate with Sandra Vickers to finalize the payoff letter and obtain the executed lien release authorization letter no later than Thursday, March 27.** As a reminder, the Fourth Amendment dated September 12, 2024 waived the prepayment premium, so no call premium is due.
13. **Dividend Wire Instructions.** Wire instructions for the approximately $335,000,000 dividend payment to Granite Peak NIH Holdings, LLC. Kellner Brandt (Patricia Voss) or Ryan Ostrowski at Granite Peak to provide. David — would you mind nudging the sponsor side on this if you have not already?
**III. Funds Flow Memorandum**
A draft funds flow memorandum was circulated on March 22. Michelle, Priya — please review the sources and uses carefully and confirm accuracy:
- **Sources:** $1,400,000,000 Term Loan B (funded at 99.50, i.e., 50 bps OID, so net cash proceeds of $1,393,000,000 with the $7,000,000 OID netted against proceeds; note that for funds flow purposes the full $1,400,000,000 notional amount flows through and the OID is treated as a separate line item on the uses side)
- **Uses:** - $879,375,000 — Atlas Meridian payoff (principal + accrued interest) - ~$335,000,000 — Dividend to Granite Peak NIH Holdings, LLC - ~$38,625,000 — Transaction fees and expenses, consisting of: - $7,000,000 arrangement fee to Crescent Harbor - $7,000,000 OID - ~$24,625,000 in legal, advisory, rating agency, and other fees - $147,000,000 — Cash to Nexford's balance sheet
The final execution version of the funds flow memorandum must be signed by all parties on or before March 27.
**IV. Signature Logistics**
Signature pages will be circulated tomorrow, **Tuesday, March 25**. Marcus Leung will send signature page packages to all counsel — Whitfield & Gage, Kellner Brandt & Associates, Hargrove & Whitmore, and Briarcliff Legal Group — as well as to the Nexford and Granite Peak teams.
Our protocol is as follows: counterpart signature pages are to be executed in PDF and held in escrow by Calderwood & Harkness and Whitfield & Gage until all conditions precedent are satisfied and closing is authorized. Original ink-signed pages will follow by overnight delivery post-closing.
Nexford signature pages will be needed for: the Credit Agreement, Guarantee Agreement, Security Agreement, all Pledge Agreements (Holdings Pledge, Borrower Pledge, Subsidiary Pledges, and the CFC Holdco Limited Pledge for 65% of voting and 100% of non-voting equity interests in Nexford Canada Holdings ULC), IP Security Agreement, Intercreditor Agreement, deposit account control agreements, securities account control agreements, and the intercompany note.
James Thornton (CEO) and/or Michelle Kaplan (CFO) will sign as authorized officers for the Borrower; David will sign certain certificates. **Please confirm which officers will be available on March 28 and whether any signatories will be traveling or otherwise unavailable.** If anyone will be out, we should arrange for pre-signing under escrow this week.
**V. Legal Opinions**
- Calderwood & Harkness will deliver its legal opinions (New York law enforceability and UCC perfection) to Crescent Harbor on closing. - Hargrove & Whitmore LLP (Robert Kimura) is finalizing the Illinois law enforceability and perfection opinion. - Briarcliff Legal Group PA (Catherine Ellsworth) is finalizing the Delaware entity opinions covering due organization, good standing, and authority of all Delaware-organized Loan Parties. - Preliminary drafts of all opinions have been shared with Whitfield & Gage for review; no substantive issues have been flagged. - The opinions rely on the opinion back-up certificate referenced in Item 10 above — it is critical that this certificate is finalized promptly.
**VI. UCC Filings**
We have prepared UCC-1 financing statements for all Loan Parties, to be filed on the closing date in each applicable jurisdiction:
- **Delaware** (Secretary of State) — Nexford, Holdings, NPC, NES, NCST, NP LLC, and NIH International - **Illinois** (Secretary of State) — NMS - **Pennsylvania** (Department of State) — Clearfield - **South Carolina** (Secretary of State) — Summit - **Texas** (Secretary of State) — Ridgepoint - **Michigan** (Department of State) — Lakeshore
UCC-3 termination statements for the existing Atlas Meridian liens will be filed promptly post-closing (target March 31, 2025) using the authorization obtained from the Atlas Meridian lien release letter.
**VII. Post-Closing Items (Preview)**
For planning purposes, please be aware of the following post-closing obligations (a formal post-closing obligations letter will follow on March 31):
- **Mortgages** for the four mortgaged properties are post-closing deliverables with a deadline of **April 30, 2025**: - Schaumburg, IL (Cook County) - Rockford, IL (Winnebago County) - Greenville, SC (Greenville County) - Houston, TX (Harris County) - **Title insurance policies** from Landmark Title Assurance Company are also due by April 30. - Total appraised value of the mortgaged real property: $193,000,000. - Original executed transaction documents to be delivered post-closing as well.
**VIII. Closing Day — March 28 — Anticipated Mechanics**
We anticipate the following sequence on Friday, March 28:
1. Telephonic or video closing call among all parties to confirm satisfaction of all conditions precedent. 2. Upon confirmation, Calderwood & Harkness and Whitfield & Gage will authorize release of all signature pages from escrow. 3. Crescent Harbor will fund the $1,400,000,000 (through the syndicate lenders) per the executed funds flow memorandum. 4. The Atlas Meridian payoff wire will be sent immediately upon receipt of proceeds. 5. The dividend wire to Granite Peak NIH Holdings will follow upon confirmation that the Atlas Meridian payoff has been received. 6. Transaction fees and expenses will be disbursed per the funds flow. 7. The residual $147,000,000 will be retained by Nexford on the balance sheet.
We will circulate a detailed closing day timeline later this week.
**IX. Requests for Confirmation / Next Steps**
To keep us on track, I would ask for the following:
- **David and Michelle** — please confirm you have reviewed this email and the attached draft closing certificates, and let us know of any comments or issues. - **Priya** — please provide final wire instructions (Redstone National Bank accounts) by **COB Wednesday, March 26**. - **Nexford in-house team** — please return executed secretary's certificates for all 11 Subsidiary Guarantors by **COB Wednesday, March 26**. - **David** — please confirm officer availability for March 28 signing and whether any pre-signing arrangements are needed. - **Michelle** — please coordinate with Ashworth & Kendrick (Helen Yamamoto) on any final financial data needed for the solvency certificate. - **All** — please raise any questions or concerns immediately given our tight timeline.
Marcus Leung and Sophie Tremblay are available around the clock through closing and are your primary day-to-day contacts for all pre-closing matters. I am available for any escalated items or questions — do not hesitate to reach out.
We are in excellent shape, and I am confident this transaction is on track for a smooth closing on Friday. Thank you all for the hard work getting us here.
Best regards,
Claudia Merritt Partner Calderwood & Harkness LLP One Liberty Plaza, 45th Floor New York, NY 10006 T: (212) 555-4100 M: (917) 555-2288 cmerritt@calderwoodharkness.com
**Attachments:** 1. Draft Closing Certificate of the Borrower 2. Draft Officer's Certificate (Representations and Warranties; No Default) 3. Draft Solvency Certificate 4. Draft Pro Forma Compliance Certificate 5. Draft Use of Proceeds / Sanctions Compliance Certificate 6. Draft Opinion Back-Up Certificate 7. Draft Funds Flow Memorandum (March 22 version) 8. Closing Agenda — Draft (March 20 version; final version to follow March 27)
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