MEMORANDUM — PRIVILEGED AND CONFIDENTIAL

MEMORANDUM — PRIVILEGED AND CONFIDENTIAL
ATTORNEY WORK PRODUCT
TO: Claudia Merritt, Responsible Partner, Banking & Finance
FROM: Marcus Leung, Lead Associate, Banking & Finance Sophie Tremblay, Working Associate, Banking & Finance
DATE: February 15, 2025
RE: Analysis of Existing Lien and Security Package — Atlas Meridian Bank, N.A. Credit Facilities
MATTER NO.: 1005-00001 (IBL-NIH-2025-031)
CLIENT: Nexford Industrial Holdings Inc.
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I. Purpose and Scope
The purpose of this memorandum is to analyze the existing security and guarantee package maintained under the credit facilities provided by Atlas Meridian Bank, N.A. ("Atlas Meridian") to Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower"). Specifically, this memorandum identifies all pledged collateral, guarantors, UCC financing statement filings, mortgaged real property, deposit account and securities account control agreements, intellectual property security interest filings, and equity pledges that must be released and terminated upon the refinancing at the closing of the proposed $1,400,000,000 senior secured Term Loan B with Crescent Harbor Bank, N.A. ("Crescent Harbor"). This analysis is intended to ensure that all existing liens, security interests, and guarantees in favor of Atlas Meridian are properly identified, catalogued, and addressed in connection with the release mechanics that will be implemented at closing.
This memorandum supports the due diligence workstream for the refinancing and dividend recapitalization transaction being undertaken by Nexford and its parent, Granite Peak NIH Holdings, LLC ("Granite Peak" or "Holdings"), in which the proceeds of the new Term Loan B will be used to (i) repay in full all outstanding indebtedness under the existing Atlas Meridian credit facilities, (ii) pay fees and expenses in connection with the refinancing, and (iii) fund a dividend distribution to the equity holders of Granite Peak.
This memorandum should be read in conjunction with the following related memoranda prepared by Calderwood & Harkness LLP ("C&H") in connection with this matter:
•  Memorandum — Review of Existing Credit Agreement and Amendments (dated February 12, 2025), which provides a detailed analysis of the terms and conditions of the existing Credit Agreement and the First through Fourth Amendments thereto; and
•  Memorandum — UCC Search Results Summary (All Filing Jurisdictions) (dated February 18, 2025, forthcoming at the time of this memorandum's preparation), which will compile and analyze the detailed results of UCC lien searches conducted in all relevant filing jurisdictions.
In preparing this memorandum, we have reviewed the following documents and materials:
(a) the Existing Credit Agreement dated as of June 14, 2019, among Nexford Industrial Holdings Inc., as Borrower, the Guarantors party thereto, Atlas Meridian Bank, N.A., as Administrative Agent and Collateral Agent, and the Lenders party thereto (the "Existing Credit Agreement"), as amended by: (i) the First Amendment to Credit Agreement dated as of March 20, 2020 (the "First Amendment"); (ii) the Second Amendment to Credit Agreement dated as of November 8, 2021 (the "Second Amendment"); (iii) the Third Amendment to Credit Agreement dated as of April 15, 2023 (the "Third Amendment"); and (iv) the Fourth Amendment to Credit Agreement dated as of September 12, 2024 (the "Fourth Amendment," and the Existing Credit Agreement as so amended, the "Credit Agreement");
(b) the Security Agreement dated as of June 14, 2019 (the "Security Agreement"), among the Borrower, the Guarantors party thereto, and Atlas Meridian Bank, N.A., as Collateral Agent;
(c) the Guarantee Agreement dated as of June 14, 2019 (the "Guarantee Agreement"), among the Guarantors party thereto and Atlas Meridian Bank, N.A., as Administrative Agent;
(d) the Pledge Agreements (including the Holdings Pledge Agreement and the Subsidiary Pledge Agreements) dated as of June 14, 2019, and the subsequent joinder agreements executed by Clearfield Tool & Die, Inc., Summit Industrial Fabrication Co., Ridgepoint Specialty Coatings, LLC, and Lakeshore Precision Engineering, Inc.;
(e) the intellectual Property Security Agreement dated as of June 14, 2019 (the "IP Security Agreement");
(f) the Mortgages, Assignments of Leases and Rents, Security Agreements and Fixture Filings (the "Mortgages") recorded in Cook County, Illinois; Winnebago County, Illinois; Greenville County, South Carolina; and Harris County, Texas;
(g) the Deposit Account Control Agreements ("DACAs") and Securities Account Control Agreements ("SACAs") executed in connection with the existing credit facilities;
(h) UCC lien search results obtained from Hollowell Technologies and other search vendors in Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan;
(i) county land records obtained from the recording offices in Cook County, Winnebago County, Greenville County, and Harris County; and
(j) organizational documents of the Borrower and each Guarantor, including certificates of formation or incorporation, operating agreements or bylaws, and good standing certificates, as provided by Nexford's in-house legal department.
Capitalized terms used but not defined in this memorandum have the meanings assigned to them in the Credit Agreement unless otherwise specified.
II. Overview of Existing Credit Facilities
A. Existing Credit Agreement
The existing credit facilities are governed by that certain Credit Agreement, dated as of June 14, 2019 (as amended, the "Credit Agreement"), among Nexford Industrial Holdings Inc., as Borrower, the Guarantors party thereto, Atlas Meridian Bank, N.A., as Administrative Agent and Collateral Agent, and the Lenders party thereto, as amended by:
(i) the First Amendment to Credit Agreement dated as of March 20, 2020, which principally addressed COVID-19-related modifications to certain financial covenants, including a temporary increase in the maximum Total Net Leverage Ratio and the deferral of certain scheduled mandatory prepayments;
(ii) the Second Amendment to Credit Agreement dated as of November 8, 2021, which, among other things, permitted the incurrence of the $250,000,000 Senior Unsecured Notes, modified certain restricted payment baskets, and added Clearfield Tool & Die, Inc. as a Subsidiary Guarantor;
(iii) the Third Amendment to Credit Agreement dated as of April 15, 2023, which expanded the permitted acquisitions basket, modified the incremental facility provisions, and added Summit Industrial Fabrication Co. and Ridgepoint Specialty Coatings, LLC as Subsidiary Guarantors; and
(iv) the Fourth Amendment to Credit Agreement dated as of September 12, 2024, which, among other things, waived the prepayment premium otherwise applicable to voluntary prepayments of the term loan, added Lakeshore Precision Engineering, Inc. as a Subsidiary Guarantor, and made certain other conforming changes to the Credit Agreement.
Atlas Meridian Bank, N.A. serves as both Administrative Agent and Collateral Agent under the Credit Agreement. Atlas Meridian is headquartered at 500 Liberty Avenue, Pittsburgh, Pennsylvania 15222. The primary contact for purposes of payoff, lien release, and related administrative matters is Sandra Vickers, Managing Director, Portfolio Management (telephone: (412) 555-7800; email: sandra.vickers@atlasmeridian.com).
The Credit Agreement is governed by, and construed in accordance with, the laws of the State of New York, without regard to conflict-of-laws principles (other than Section 5-1401 of the New York General Obligations Law).
B. Existing Facilities
The Credit Agreement provides for the following two facilities:
First Lien Term Loan. The Credit Agreement provides for a first lien term loan facility in an original aggregate principal amount of $875,000,000 (the "Existing Term Loan"). The Existing Term Loan matures on June 14, 2026. Based on information provided by Nexford's treasury department and confirmed with Atlas Meridian's portfolio management group, the estimated payoff amount as of the anticipated closing date of March 28, 2025 is approximately $879,375,000, consisting of $875,000,000 in outstanding principal (reflecting no interim amortization payments reducing principal below the original amount, due to prior adjustments and amendments) plus approximately $4,375,000 in accrued and unpaid interest calculated through the anticipated closing date. The exact payoff amount will be confirmed in the payoff letter to be obtained from Atlas Meridian prior to closing, as discussed in Section VIII below.
Revolving Credit Facility. The Credit Agreement also provides for a revolving credit facility with aggregate commitments of $190,000,000 (the "Existing Revolver"). The Existing Revolver matures on June 14, 2025. As of the date of this memorandum, the Existing Revolver is fully undrawn, with $0 in outstanding borrowings and no letters of credit issued thereunder. At closing, the Existing Revolver commitments will be permanently terminated, and any outstanding letters of credit (if issued between the date hereof and the closing date) will need to be backstopped, cash collateralized, or otherwise addressed.
Prepayment Premium. Importantly, the prepayment premium that was otherwise applicable to voluntary prepayments of the Existing Term Loan under Section 2.05(a) of the Credit Agreement was expressly waived pursuant to Section 3 of the Fourth Amendment dated September 12, 2024. As a result, no prepayment penalty or premium will apply to the payoff of the Existing Term Loan in connection with the refinancing. We note that the waiver in the Fourth Amendment is unconditional on its face and does not appear to be subject to any conditions precedent, sunset provisions, or reinstatement mechanisms; however, as noted in Section X.C below, we recommend confirming this conclusion as part of our final pre-closing review.
C. Senior Unsecured Notes (Not Part of Secured Package — For Reference)
In addition to the secured credit facilities described above, Nexford has outstanding $250,000,000 in aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 (the "Unsecured Notes"), issued under an Indenture dated as of November 8, 2021 (the "Indenture"), between Nexford, the guarantors party thereto, and Pinnacle Trust Company, as Trustee. The Trustee's principal office is located at 101 Park Avenue, New York, New York 10178.
The Unsecured Notes are not secured by any collateral and are not part of the Atlas Meridian security package analyzed in this memorandum. The Unsecured Notes are not being refinanced, redeemed, or otherwise repaid in connection with the current transaction. They will remain outstanding following the closing of the new Term Loan B.
However, the Unsecured Notes are subject to a separate intercreditor arrangement that will need to be addressed in connection with the new facility. Specifically, a First Lien/Unsecured Intercreditor Agreement will be entered into between Crescent Harbor Bank, N.A. (as first lien collateral agent under the new Term Loan B) and Pinnacle Trust Company (as trustee under the Indenture) to govern the respective rights of the first lien secured creditors and the unsecured noteholders with respect to the collateral, enforcement actions, and certain related matters. The terms of that intercreditor arrangement are being addressed separately and are not within the scope of this memorandum.
III. Existing Guarantee Package
A. Holdings Guarantor
The existing Guarantee Agreement includes as a guarantor Granite Peak NIH Holdings, LLC ("Granite Peak" or "Holdings"), the direct parent of the Borrower. Key organizational and identifying information for Holdings is as follows:
Granite Peak is a holding company with no material operations or assets other than its equity interest in Nexford. Its guarantee of the obligations under the Credit Agreement is a continuing, unconditional guarantee of payment, and it has also pledged its equity interests in the Borrower as described in Section V.A below.
B. Subsidiary Guarantors
The following ten entities are Subsidiary Guarantors under the existing Guarantee Agreement. Each entity has guaranteed all obligations of the Borrower under the Credit Agreement on a joint and several basis. The list below reflects the current organizational structure of Nexford and includes the four entities (Clearfield, Summit, Ridgepoint, and Lakeshore) that were added as guarantors following their respective acquisitions:
1. Nexford Precision Components, Inc. ("NPC")
•  Jurisdiction of Organization: Delaware (corporation)
•  Principal Office: 2750 Commerce Drive, Rockford, IL 61101
•  Description: Operates the Precision Components manufacturing plant in Rockford, Illinois; one of Nexford's original operating subsidiaries
•  Joined as Guarantor: June 14, 2019 (original closing date)
2. Nexford Engineered Systems, LLC ("NES")
•  Jurisdiction of Organization: Delaware (limited liability company)
•  Principal Office: 600 Manufacturers Row, Greenville, SC 29607
•  Description: Operates the Engineered Systems manufacturing plant in Greenville, South Carolina; one of Nexford's original operating subsidiaries
•  Joined as Guarantor: June 14, 2019 (original closing date)
3. Nexford Coatings & Surface Technologies, Inc. ("NCST")
•  Jurisdiction of Organization: Delaware (corporation)
•  Principal Office: 9100 Westpark Industrial Boulevard, Houston, TX 77063
•  Description: Operates the Coatings & Surface Technologies division; one of Nexford's original operating subsidiaries
•  Joined as Guarantor: June 14, 2019 (original closing date)
4. Nexford Manufacturing Services, LLC ("NMS")
•  Jurisdiction of Organization: Illinois (limited liability company)
•  Principal Office: 1400 Industrial Parkway, Schaumburg, IL 60173
•  Description: Provides centralized manufacturing services and operates out of the Schaumburg headquarters facility
•  Joined as Guarantor: June 14, 2019 (original closing date)
5. Nexford Properties, LLC ("NP LLC")
•  Jurisdiction of Organization: Delaware (limited liability company)
•  Registered Address: c/o Penmark Industries, 1209 Orange Street, Wilmington, DE 19801
•  Description: Holds certain real property assets of the Nexford group, including the Schaumburg headquarters facility
•  Joined as Guarantor: June 14, 2019 (original closing date)
6. Nexford International Holdings, Inc. ("NIH Intl")
•  Jurisdiction of Organization: Delaware (corporation; CFC holdco)
•  Registered Address: c/o Penmark Industries, 1209 Orange Street, Wilmington, DE 19801
•  Description: Serves as the holding company for Nexford's foreign subsidiary interests, including Nexford Canada Holdings ULC; classified as a controlled foreign corporation holding company for U.S. tax purposes
•  Joined as Guarantor: June 14, 2019 (original closing date)
7. Clearfield Tool & Die, Inc. ("Clearfield")
•  Jurisdiction of Organization: Pennsylvania (corporation)
•  Principal Office: 175 Clearfield Avenue, Clearfield, PA 16830
•  Description: Specialty tool and die manufacturing; acquired by Nexford in 2021
•  Joined as Guarantor: Joinder Agreement dated on or about November 8, 2021, executed in connection with the Second Amendment
8. Summit Industrial Fabrication Co. ("Summit")
•  Jurisdiction of Organization: South Carolina (corporation)
•  Principal Office: 820 Summit Drive, Spartanburg, SC 29303
•  Description: Industrial fabrication services; acquired by Nexford in 2022
•  Joined as Guarantor: Joinder Agreement dated on or about April 15, 2023, executed in connection with the Third Amendment (note: the joinder was executed in connection with the Third Amendment although the acquisition closed in 2022; the timing should be confirmed)
9. Ridgepoint Specialty Coatings, LLC ("Ridgepoint")
•  Jurisdiction of Organization: Texas (limited liability company)
•  Principal Office: 9100 Westpark Industrial Boulevard, Houston, TX 77063
•  Description: Specialty industrial coatings; acquired by Nexford in 2023; co-located with NCST at the Houston facility
•  Joined as Guarantor: Joinder Agreement dated on or about April 15, 2023, executed in connection with the Third Amendment
10. Lakeshore Precision Engineering, Inc. ("Lakeshore")
•  Jurisdiction of Organization: Michigan (corporation)
•  Principal Office: 3200 Lakeshore Boulevard, Muskegon, MI 49441
•  Description: Precision engineering and machining services; acquired by Nexford in 2024
•  Joined as Guarantor: Joinder Agreement dated on or about September 12, 2024, executed in connection with the Fourth Amendment
•  Note: As discussed in Section X.A below, we recommend confirming that the joinder agreement for Lakeshore was properly executed and delivered, that all conditions to joinder under the Credit Agreement were satisfied, and that the corresponding UCC-1 financing statement was timely filed in Michigan.
C. Excluded Entities (Non-Guarantors)
The following entities are excluded from the guarantee and collateral package as foreign subsidiaries, consistent with the terms of the Credit Agreement and customary market practice for leveraged credit facilities:
Nexford Canada Holdings ULC
•  Jurisdiction of Organization: British Columbia, Canada (unlimited liability company)
•  Registered Address: 1055 West Georgia Street, Suite 1500, Vancouver, BC V6E 4N7, Canada
•  Basis for Exclusion: Excluded as a foreign subsidiary organized under the laws of a jurisdiction outside of the United States; no guarantee or pledge of its own assets
•  Note: While Nexford Canada Holdings ULC does not itself provide a guarantee or pledge its own assets, 65% of its voting equity and 100% of its non-voting equity are pledged by its direct parent, Nexford International Holdings, Inc., as discussed in Section V.C below
Nexford Canada Manufacturing, Inc.
•  Jurisdiction of Organization: Ontario, Canada (corporation)
•  Registered Address: 400 Industrial Road, Mississauga, ON L5T 2R3, Canada
•  Basis for Exclusion: Excluded as a foreign subsidiary; indirect subsidiary of Nexford Canada Holdings ULC; no guarantee or pledge of its assets
D. Guarantee Structure Summary
The total number of guarantors under the existing credit facilities is eleven (11) entities, consisting of one (1) Holdings Guarantor (Granite Peak NIH Holdings, LLC) and ten (10) Subsidiary Guarantors, in addition to the Borrower itself (Nexford Industrial Holdings Inc.) as the primary obligor under the Credit Agreement.
The guarantee provided by each guarantor is a continuing, unconditional guarantee of payment — and not merely a guarantee of collection — of all obligations arising under or in connection with the Credit Agreement, including principal, interest, fees, expenses, indemnities, and all other amounts payable thereunder. The guarantee is joint and several among all guarantors and the Borrower.
As noted above, four of the ten Subsidiary Guarantors — Clearfield, Summit, Ridgepoint, and Lakeshore — were added to the guarantee package following their respective acquisitions by Nexford. Each was joined to the Guarantee Agreement and the Security Agreement (and, where applicable, the Pledge Agreements) via joinder agreements executed in connection with the amendments to the Credit Agreement that were contemporaneously entered into.
All guarantees must be released at closing upon repayment in full of all outstanding obligations under the Credit Agreement and termination of the commitments thereunder. Section 7.11 of the Guarantee Agreement provides that the guarantee shall terminate and be of no further force or effect upon the occurrence of a "Guarantee Termination Event," which is defined to include the payment in full in cash of all obligations and the termination of all commitments under the Credit Agreement. The lien release authorization letter to be obtained from Atlas Meridian will confirm that such Guarantee Termination Event has occurred.
IV. Existing Collateral — Personal Property Security Interests
A. Security Agreement (Personal Property)
The existing Security Agreement, dated as of June 14, 2019, among the Borrower, the Guarantors party thereto, and Atlas Meridian Bank, N.A., as Collateral Agent, grants to the Collateral Agent a first-priority security interest in substantially all personal property assets of the Borrower and each Guarantor (collectively, the "Grantors"). The collateral subject to the Security Agreement includes, without limitation, the following categories of assets:
(a) Accounts receivable — all accounts, as defined in Article 9 of the Uniform Commercial Code, including all rights to payment for goods sold or leased, services rendered, or any other transaction giving rise to a monetary obligation;
(b) Inventory — all inventory, including raw materials, work-in-process, finished goods, goods held for sale or lease, and goods furnished or to be furnished under contracts of service;
(c) Equipment — all equipment, including machinery, vehicles, furniture, fixtures, and other tangible personal property used in the business operations of the Grantors;
(d) General intangibles — all general intangibles, including payment intangibles, software (embedded and standalone), customer lists, licenses, permits, and other intangible personal property not otherwise constituting a separate category of collateral under the UCC;
(e) Deposit accounts and securities accounts — all deposit accounts maintained at any financial institution and all securities accounts maintained at any securities intermediary, in each case subject to applicable control agreements as described in Sections IV.C and IV.D below;
(f) Investment property — all investment property, including securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodity contracts, and commodity accounts;
(g) Chattel paper, instruments, and documents — all chattel paper (whether tangible or electronic), instruments (including promissory notes), and documents of title;
(h) Letter of credit rights — all letter of credit rights, including rights to payment or performance under any letter of credit;
(i) Commercial tort claims — all commercial tort claims with a value in excess of $500,000 (the applicable threshold specified in the Security Agreement), to the extent identified and scheduled from time to time in accordance with the notice and joinder provisions of the Security Agreement; and
(j) Proceeds and products — all proceeds and products of all of the foregoing, including insurance proceeds, and all supporting obligations relating to any of the foregoing.
The Security Agreement contains customary representations, warranties, and covenants of the Grantors with respect to the collateral, including representations as to the location of tangible collateral, the accuracy of organizational information, and the maintenance of collateral in good condition. The Security Agreement also provides the Collateral Agent with customary remedies upon the occurrence and during the continuance of an Event of Default, including the right to sell, assign, or otherwise dispose of the collateral.
Upon repayment of all obligations and termination of all commitments under the Credit Agreement, the Security Agreement provides for automatic release of the security interests granted therein, subject to the execution and delivery of customary release documentation.
B. Intellectual Property Security Agreement
In addition to the general personal property security interest granted under the Security Agreement, the Borrower and the Guarantors executed a separate intellectual Property Security Agreement, dated as of June 14, 2019 (the "IP Security Agreement"), in favor of Atlas Meridian Bank, N.A., as Collateral Agent. The IP Security Agreement grants to the Collateral Agent a security interest in all of the following categories of intellectual property owned by the Grantors:
(a) all patents, patent applications, and patent licenses, including any continuations, continuations-in-part, divisionals, reissues, and reexaminations thereof;
(b) all trademarks, service marks, trade names, trademark registrations and applications, and trademark licenses, together with the goodwill associated therewith;
(c) all copyrights, copyright registrations and applications, and copyright licenses; and
(d) all intellectual property rights related to or arising from any of the foregoing, including all royalties, income, and other payments due or to become due in connection with any of the foregoing.
The security interests in patents and trademarks have been recorded at the United States Patent and Trademark Office ("USPTO") in the form of assignments for security purposes, and recordings may also have been made at the United States Copyright Office with respect to registered copyrights. We are in the process of confirming the specific recording details with Nexford's intellectual property counsel.
At closing, these recordings must be formally released and terminated. This will require the filing of release documents at the USPTO (for patents and trademarks) and at the U.S. Copyright Office (for any recorded copyright security interests). We recommend coordinating with Nexford's IP counsel — currently Whitaker, Sun & Holt LLP — regarding the preparation and filing of the appropriate release instruments at each office. The timing for completing these IP release filings is typically post-closing, and we will include them in the post-closing checklist.
C. Deposit Account Control Agreements
The existing collateral package includes Deposit Account Control Agreements ("DACAs") covering certain deposit accounts maintained by the Borrower and the Guarantors. Based on our review of the Security Agreement schedules and information provided by Nexford's treasury department, the following DACAs are currently in effect:
(a) DACA covering the primary operating account at Redstone National Bank, account number ending in -4471, in the name of Nexford Industrial Holdings Inc.;
(b) DACA covering the secondary operating account at Redstone National Bank, account number ending in -4472, in the name of Nexford Industrial Holdings Inc.;
(c) DACA covering the payroll account at Redstone National Bank, account number ending in -6633, in the name of Nexford Manufacturing Services, LLC; and
(d) DACA(s) covering any deposit accounts maintained directly at Atlas Meridian Bank, N.A. (we are confirming whether any such accounts exist and whether a separate DACA or a general deposit account provision in the Credit Agreement governs any such accounts).
At closing, all existing DACAs must be terminated by delivery of termination notices to the depository banks (Redstone National Bank and, if applicable, Atlas Meridian). These DACAs will be replaced with new DACAs in favor of Crescent Harbor Bank, N.A. as the new Collateral Agent under the Term Loan B facility. We are coordinating with Nexford's treasury department to confirm the complete list of controlled deposit accounts and to prepare the necessary termination and replacement documentation.
D. Securities Account Control Agreements
The existing collateral package also includes Securities Account Control Agreements ("SACAs") covering any securities accounts maintained by the Loan Parties. Based on our review of the Security Agreement schedules, we understand that certain of the Loan Parties maintain securities accounts at one or more securities intermediaries, and that SACAs have been executed in favor of Atlas Meridian as Collateral Agent with respect to those accounts.
At closing, all existing SACAs must be terminated and replaced with new SACAs in favor of Crescent Harbor Bank, N.A. as the new Collateral Agent. We are confirming the identity of all securities intermediaries and the specific accounts subject to existing SACAs.
E. Intercompany Notes
The existing collateral package includes certain intercompany promissory notes evidencing intercompany loans from the Borrower to its subsidiaries (and, in some cases, between subsidiaries). These intercompany notes have been endorsed to the order of Atlas Meridian Bank, N.A. as Collateral Agent and physically delivered to the Collateral Agent (or its custodian) to perfect a security interest therein by possession under Article 9 of the UCC.
At closing, the physical possession of the endorsed intercompany notes must be addressed. The original endorsed notes must either be (i) returned to the Borrower (or the applicable Loan Party) upon release of the existing security interest, or (ii) re-endorsed and re-delivered to Crescent Harbor Bank, N.A. as the new Collateral Agent, depending on the requirements of the new security package. We recommend coordinating with Atlas Meridian's custodian to arrange for the return or transfer of all physical notes on or promptly following the closing date.
V. Existing Collateral — Equity Pledges
A. Holdings Pledge (Equity in Nexford)
Granite Peak NIH Holdings, LLC, as the direct parent of the Borrower, has pledged 100% of its equity interests in Nexford Industrial Holdings Inc. (consisting of all issued and outstanding shares of common stock) to Atlas Meridian Bank, N.A. as Collateral Agent, pursuant to the Holdings Pledge Agreement dated as of June 14, 2019. This pledge secures all obligations of the Borrower and the Guarantors under the Credit Agreement.
The pledge was perfected by delivery of the original stock certificate(s) representing the pledged equity interests, together with undated, endorsed-in-blank stock powers executed by Granite Peak. These physical instruments are held by the Collateral Agent (or its designated custodian). At closing, the stock certificates and stock powers must be returned to Granite Peak (or, if required under the new security package, transferred to Crescent Harbor Bank, N.A. as the new Collateral Agent). The lien release authorization letter from Atlas Meridian should include express authorization for the return of these physical instruments.
B. Borrower Pledge (Equity in Direct Subsidiaries)
Nexford Industrial Holdings Inc., as the Borrower, has pledged 100% of the equity interests in each of its direct domestic subsidiaries to Atlas Meridian Bank, N.A. as Collateral Agent, pursuant to the Borrower Pledge Agreement dated as of June 14, 2019 (as supplemented by subsequent joinder agreements). The pledged equity interests are as follows:
With respect to the equity interests in the subsidiaries organized as corporations (NPC, NCST, and NIH Intl), the pledge was perfected by delivery of the original stock certificates and undated, endorsed-in-blank stock powers. With respect to the subsidiaries organized as limited liability companies (NES, NMS, and NP LLC), the pledge was perfected by the filing of UCC-1 financing statements (as membership interests in a limited liability company are "general intangibles" under Article 9 of the UCC and are perfected by filing, not by delivery of physical certificates, unless such interests are certificated securities under the applicable operating agreement). We are confirming whether any of the LLC subsidiaries have issued certificated membership interests that would require perfection by possession.
At closing, all stock certificates, stock powers, and membership interest assignments must be returned to the Borrower or re-pledged to Crescent Harbor as the new Collateral Agent.
C. CFC Holdco Limited Pledge (Foreign Subsidiary Equity)
Nexford International Holdings, Inc. ("NIH Intl"), the controlled foreign corporation holding company, has pledged its equity interests in Nexford Canada Holdings ULC on a limited basis: 65% of the voting equity and 100% of the non-voting equity in Nexford Canada Holdings ULC. This limitation is consistent with customary practice for controlled foreign corporation holding companies in leveraged credit facilities, designed to avoid adverse U.S. federal income tax consequences that would otherwise arise if more than 66⅔% of the total combined voting power of a controlled foreign corporation were pledged to secure obligations of a U.S. obligor. Specifically, a pledge of more than 66⅔% of the voting equity of a CFC could result in a deemed repatriation of the CFC's earnings and profits under Section 956 of the Internal Revenue Code, giving rise to a taxable inclusion to the U.S. shareholder.
The CFC holdco limited pledge is evidenced by a separate CFC Holdco Pledge Agreement and is perfected by the applicable combination of filing (UCC-1 in Delaware, the jurisdiction of organization of NIH Intl) and, to the extent the equity interests in Nexford Canada Holdings ULC are represented by physical share certificates, delivery of certificates and undated, endorsed-in-blank stock powers.
At closing, the existing CFC holdco limited pledge must be released, and the equity interests and any related physical instruments must be returned to NIH Intl. A new CFC Holdco Limited Pledge Agreement will be executed in favor of Crescent Harbor Bank, N.A. as the new Collateral Agent, with the same 65% voting / 100% non-voting structure.
D. Subsidiary Pledges (Lower-Tier Equity)
In addition to the pledges described above, each applicable Subsidiary Guarantor has pledged 100% of the equity interests in its direct subsidiaries (if any) to Atlas Meridian Bank, N.A. as Collateral Agent. These subsidiary-level pledges ensure that the Collateral Agent's lien extends down through the Nexford organizational structure to the lowest domestic tier.
The subsidiary pledges include, but are not limited to, pledges by:
(a) Nexford Precision Components, Inc. — of any equity interests in lower-tier subsidiaries (if applicable);
(b) Nexford Engineered Systems, LLC — of any equity interests in lower-tier subsidiaries, including any interest in Summit Industrial Fabrication Co. (to the extent Summit is a direct subsidiary of NES rather than of the Borrower);
(c) Nexford Coatings & Surface Technologies, Inc. — of any equity interests in lower-tier subsidiaries, including any interest in Ridgepoint Specialty Coatings, LLC (to the extent Ridgepoint is a direct subsidiary of NCST rather than of the Borrower);
(d) Nexford Manufacturing Services, LLC — of any equity interests in lower-tier subsidiaries (if applicable);
(e) Nexford Properties, LLC — of any equity interests in lower-tier subsidiaries (if applicable);
(f) Nexford International Holdings, Inc. — of the limited equity interest in Nexford Canada Holdings ULC (addressed in Section V.C above);
(g) Clearfield Tool & Die, Inc. — of any equity interests in lower-tier subsidiaries (if applicable);
(h) Summit Industrial Fabrication Co. — of any equity interests in lower-tier subsidiaries (if applicable);
(i) Ridgepoint Specialty Coatings, LLC — of any equity interests in lower-tier subsidiaries (if applicable); and
(j) Lakeshore Precision Engineering, Inc. — of any equity interests in lower-tier subsidiaries (if applicable).
For each subsidiary pledge involving certificated equity interests, the original stock certificates and undated, endorsed-in-blank stock powers (or equivalent membership interest assignments) are held by the Collateral Agent or its custodian. At closing, all such physical instruments must be returned to the applicable pledgor entity or re-pledged to Crescent Harbor as the new Collateral Agent.
VI. Existing Collateral — Real Property (Mortgages)
A. Overview.  Under the existing credit facilities, Atlas Meridian Bank, N.A., as Collateral Agent, holds mortgages (including deeds of trust, deeds to secure debt, or equivalent instruments, as applicable under the laws of the relevant jurisdiction) on certain owned real property of the Loan Parties. The Credit Agreement requires that mortgages be granted on all owned real property with a fair market value in excess of the $10,000,000 threshold specified in Section 6.12 of the Credit Agreement.
Based on our review of the existing collateral documents and county recording records, four (4) properties are currently encumbered by mortgages in favor of Atlas Meridian as Collateral Agent. The aggregate appraised value of these four properties is $193,000,000.
Each mortgage is in the form of a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, granting to the Collateral Agent a lien on the applicable property, an assignment of all rents and leases relating thereto, a security interest in all fixtures and personal property located on or used in connection with the property, and a fixture filing under the UCC. Each mortgage was accompanied by a lender's title insurance policy issued by Landmark Title Assurance Company, ALTA surveys, environmental assessments, and other customary real property due diligence deliverables.
B. Property-by-Property Analysis
1. 1400 Industrial Parkway, Schaumburg, IL 60173.  
This property represents the single most valuable asset in the real property collateral portfolio and serves as the operational headquarters and primary manufacturing hub for the Nexford group. Release of the Cook County mortgage should be coordinated with Hargrove & Whitmore LLP, the firm's Illinois local counsel (contact: Robert Kimura), who will handle the preparation and recording of the release instrument in accordance with Illinois law requirements.
2. 2750 Commerce Drive, Rockford, IL 61101.  
3. 600 Manufacturers Row, Greenville, SC 29607.  
We note that the identity of the record owner/grantor of this property should be confirmed, as it is possible that the property was originally titled in the name of Nexford Engineered Systems, LLC but may have been transferred to or acquired through Summit Industrial Fabrication Co. in connection with the 2022 acquisition. The mortgage release instrument must correctly identify the grantor entity to match the recorded mortgage.
4. 9100 Westpark Industrial Boulevard, Houston, TX 77063.  
Similar to the Greenville County property, the identity of the record owner should be confirmed, as this property may be titled in the name of either Ridgepoint or NCST, given that both entities operate from the same Houston facility.
C. Total Appraised Real Property Collateral
The aggregate appraised value of all four mortgaged properties is as follows:
All four mortgages (or deeds of trust, as applicable) must be released and the releases recorded in the applicable county recording offices upon payoff of the existing credit facilities. The mortgage release instruments should be prepared in forms acceptable for recording in each jurisdiction and should be executed by Atlas Meridian Bank, N.A., as Collateral Agent (or its authorized officer or attorney-in-fact). The filing of new mortgages in favor of Crescent Harbor Bank, N.A. on these same properties is expected to be a post-closing obligation under the new Term Loan B, with a target delivery date of April 30, 2025.
VII. Existing UCC Financing Statements
A. Filing Jurisdictions
Based on the UCC lien searches conducted to date and the organizational jurisdictions of each Loan Party, UCC-1 financing statements in favor of Atlas Meridian Bank, N.A. (as Collateral Agent) have been filed in the following six (6) jurisdictions:
1. Delaware Secretary of State. UCC-1 financing statements have been filed against the following entities, each of which is organized in the State of Delaware:
(a) Nexford Industrial Holdings Inc. (DE File No. 5765432);
(b) Granite Peak NIH Holdings, LLC (DE File No. 7234891);
(c) Nexford Precision Components, Inc.;
(d) Nexford Engineered Systems, LLC;
(e) Nexford Coatings & Surface Technologies, Inc.;
(f) Nexford Properties, LLC; and
(g) Nexford International Holdings, Inc.
2. Illinois Secretary of State. A UCC-1 financing statement has been filed against Nexford Manufacturing Services, LLC, which is organized as a limited liability company under the laws of the State of Illinois.
3. Pennsylvania Department of State. A UCC-1 financing statement has been filed against Clearfield Tool & Die, Inc., which is organized as a corporation under the laws of the Commonwealth of Pennsylvania.
4. South Carolina Secretary of State. A UCC-1 financing statement has been filed against Summit Industrial Fabrication Co., which is organized as a corporation under the laws of the State of South Carolina.
5. Texas Secretary of State. A UCC-1 financing statement has been filed against Ridgepoint Specialty Coatings, LLC, which is organized as a limited liability company under the laws of the State of Texas.
6. Michigan Department of State. A UCC-1 financing statement has been filed against Lakeshore Precision Engineering, Inc., which is organized as a corporation under the laws of the State of Michigan.
In total, we have identified approximately twelve (12) UCC-1 financing statements filed across the six jurisdictions listed above (seven filings in Delaware and one filing in each of the remaining five states).
B. UCC Filing Details
For each Loan Party, the following information has been compiled (or is in the process of being compiled) with respect to the applicable UCC-1 financing statement:
(a) Filing Number — the unique filing number assigned by the applicable filing office;
(b) Date of Original Filing — the date on which the UCC-1 financing statement was originally filed;
(c) Debtor Name — the exact legal name of the debtor as set forth on the financing statement, which must match the entity's name on the public record of the filing jurisdiction (the state organizational records) to ensure effectiveness under Section 9-503 of the UCC;
(d) Secured Party — Atlas Meridian Bank, N.A., as Collateral Agent for the Lenders;
(e) Collateral Description — typically a broad, "all assets" description of collateral, consistent with the scope of the Security Agreement (e.g., "all personal property and assets of the Debtor, whether now owned or hereafter acquired, including without limitation all accounts, chattel paper, commercial tort claims, deposit accounts, documents, equipment, general intangibles, goods, instruments, inventory, investment property, letter of credit rights, and all proceeds and products thereof");
(f) Amendments — any UCC-3 amendments filed to add or modify collateral descriptions, change the Debtor name, or add additional debtors; and
(g) Continuation Statements — any UCC-3 continuation statements filed to continue the effectiveness of the original UCC-1 financing statement beyond the initial five-year period (relevant for the original 2019 filings, which will approach their five-year expiration in June 2024; continuation statements should have been filed prior to that date for any filings that have not been subsequently amended).
A comprehensive compilation of the UCC filing details for all twelve filings, including filing numbers, dates, exact debtor names, collateral descriptions, and amendment/continuation history, is being prepared as a separate deliverable: Memorandum — UCC Search Results Summary (All Filing Jurisdictions), dated February 18, 2025. That memorandum, which is currently in preparation at the time of this memorandum's issuance, will provide a filing-by-filing analysis and will flag any discrepancies, potential name errors, or lapsed filings.
C. UCC-3 Termination Requirements
At closing, UCC-3 Termination Statements must be filed in each of the six (6) jurisdictions listed above to terminate all UCC-1 financing statements filed in favor of Atlas Meridian Bank, N.A. as Collateral Agent. The total number of UCC-3 Termination Statements to be filed is twelve (12), corresponding to the twelve UCC-1 financing statements currently on file.
Under Section 9-513 of the Uniform Commercial Code, the secured party of record (Atlas Meridian Bank, N.A., as Collateral Agent) is required to authorize the filing of termination statements within the prescribed time period following a demand by the debtor after the secured obligations have been paid in full. As a practical matter, in the context of a refinancing transaction of this nature, the authorization to file UCC-3 termination statements is typically included in the payoff letter and lien release authorization letter obtained from the outgoing secured party. Accordingly, the payoff letter and lien release authorization letter to be obtained from Atlas Meridian should include express authorization for the Borrower (or its counsel) to file UCC-3 Termination Statements on behalf of, or with the authorization of, the Secured Party of record.
The target filing date for all UCC-3 Termination Statements is March 31, 2025, which is promptly following the anticipated closing date of March 28, 2025. C&H will prepare the UCC-3 Termination Statement forms for each filing jurisdiction and will arrange for execution or authorization by Atlas Meridian in advance of closing to the extent practicable. The filings will be submitted through Hollowell Technologies or another authorized filing agent in each jurisdiction.
VIII. Release and Termination Mechanics at Closing
A. Payoff and Repayment
At the closing of the new Term Loan B (target: March 28, 2025), the entire outstanding balance under the existing first lien term loan will be repaid in full from the proceeds of the new $1,400,000,000 Term Loan B with Crescent Harbor Bank, N.A. The estimated payoff amount, as of the anticipated closing date, is $879,375,000, consisting of:
•  $875,000,000 in outstanding principal; plus
•  Approximately $4,375,000 in accrued and unpaid interest (calculated through March 28, 2025 based on the current applicable interest rate and day-count convention).
The exact payoff amount will be confirmed in the payoff letter to be obtained from Atlas Meridian. The payoff letter will specify the per diem interest amount for purposes of calculating the correct payoff figure if closing occurs on a date other than March 28, 2025.
In addition, the existing revolving credit facility, which has a $190,000,000 commitment and is currently fully undrawn ($0 outstanding), will be permanently terminated at closing. The termination of the revolving commitments will be effected by the payoff letter and the release and termination documentation, and no further drawings will be permitted under the Existing Revolver following the closing.
A formal payoff letter will be obtained from Atlas Meridian Bank, N.A. (contact: Sandra Vickers, Managing Director, Portfolio Management) confirming:
(a) the exact payoff amount as of the closing date, including principal, accrued interest, fees, and any other amounts outstanding;
(b) wire transfer instructions for the remittance of the payoff amount;
(c) the agreement of Atlas Meridian, upon receipt of the payoff funds, to release all liens, security interests, mortgages, pledges, and guarantees securing the obligations under the Credit Agreement; and
(d) authorization for the filing of UCC-3 Termination Statements and the recording of mortgage releases, as discussed below.
B. Lien Release Authorization
In addition to the payoff letter, Atlas Meridian must deliver a comprehensive lien release authorization letter (or equivalent instrument, which may be combined with the payoff letter) authorizing and directing the release and termination of all collateral and security arrangements under the existing credit facilities. Specifically, the lien release authorization should cover all of the following:
(a) UCC-3 Termination Statements. Authorization for the filing of UCC-3 Termination Statements in all six filing jurisdictions (Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan), terminating all twelve UCC-1 financing statements in favor of Atlas Meridian;
(b) Mortgage Releases. Authorization for the execution and recording of releases, satisfactions, or discharges (as applicable) of all four mortgages in the applicable county recording offices (Cook County, IL; Winnebago County, IL; Greenville County, SC; and Harris County, TX);
(c) Equity Pledge Releases. Authorization for the release of all pledged equity interests (including the return of stock certificates, endorsed-in-blank stock powers, and membership interest assignments currently held by the Collateral Agent or its custodian);
(d) DACA and SACA Terminations. Authorization for the termination of all existing Deposit Account Control Agreements and Securities Account Control Agreements;
(e) IP Security Interest Releases. Authorization for the filing of release instruments at the USPTO and the U.S. Copyright Office to terminate all recorded intellectual property security interests;
(f) Intercompany Note Releases. Authorization for the release of all intercompany promissory notes from the existing pledge and the return of endorsed notes from the Collateral Agent's possession; and
(g) Guarantee Releases. Confirmation that the Guarantee Termination Event has occurred, resulting in the automatic release and termination of all guarantees under the existing Guarantee Agreement.
The lien release authorization letter should be in a form satisfactory to Calderwood & Harkness LLP (as counsel to the Borrower) and to Whitfield & Gage LLP (as counsel to Crescent Harbor Bank, N.A.). We anticipate that Whitfield & Gage will require the lien release letter to be in customary form and will review it as part of their conditions to closing and funding of the new Term Loan B.
C. Timing and Coordination
The following timeline governs the release and termination mechanics at and following closing:
At Closing (March 28, 2025):
•  Payoff of the existing term loan ($879,375,000) to be funded from the proceeds of the new Term Loan B simultaneously with the closing of the new facility;
•  Termination of the existing revolving credit facility commitments;
•  Execution and delivery of the lien release authorization letter by Atlas Meridian;
•  Execution and delivery of all new security documents (Security Agreement, Pledge Agreements, IP Security Agreement, etc.) in favor of Crescent Harbor;
•  Filing of new UCC-1 financing statements in all six jurisdictions in favor of Crescent Harbor as the new Collateral Agent (to be filed simultaneously with closing to avoid any gap in lien perfection).
Post-Closing (March 31, 2025 — Target):
•  Filing of UCC-3 Termination Statements in all six jurisdictions to terminate the Atlas Meridian UCC-1 filings.
Post-Closing (Through April 30, 2025):
•  Recording of mortgage releases/discharges in Cook County, IL; Winnebago County, IL; Greenville County, SC; and Harris County, TX. This recording may be coordinated with the simultaneous recording of new mortgages in favor of Crescent Harbor, which are expected to be post-closing deliverables under the new Term Loan B with a deadline of April 30, 2025;
•  Filing of IP security interest release instruments at the USPTO and the U.S. Copyright Office;
•  Return of physical collateral (stock certificates, endorsed intercompany notes, and other documents held in the Collateral Agent's possession) — to be coordinated between Atlas Meridian's counsel, C&H, and the custodian.
We emphasize the importance of coordinating the timing of lien releases with the grant and perfection of new liens in favor of Crescent Harbor to ensure that there is no gap period during which the collateral is unencumbered by any first-priority lien. This is discussed further in Section X.C below.
IX. Comparison: Existing Package vs. Proposed New Security Package
A. Continuity of Collateral and Guarantor Universe
The proposed security and guarantee package under the new $1,400,000,000 Term Loan B with Crescent Harbor Bank, N.A. is designed to substantially mirror the existing package under the Atlas Meridian credit facilities. The following key elements of the security structure will remain consistent:
•  Same Guarantor Universe. The new facility will include the same Holdings Guarantor (Granite Peak NIH Holdings, LLC) and the same ten (10) Subsidiary Guarantors, for a total of eleven (11) guarantors plus the Borrower. The same foreign subsidiary exclusions will apply, with Nexford Canada Holdings ULC and Nexford Canada Manufacturing, Inc. remaining excluded from the guarantee package.
•  Same Collateral Categories. The new collateral package will cover the same categories of assets as the existing package: all personal property (substantially all assets), equity pledges (100% of domestic subsidiaries and the CFC holdco limited pledge), intellectual property, real property mortgages, deposit account and securities account control agreements, and intercompany notes.
•  Same CFC Holdco Pledge Limitation. The pledge of equity in Nexford Canada Holdings ULC by Nexford International Holdings, Inc. will continue to be limited to 65% of the voting equity and 100% of the non-voting equity, consistent with the IRC §956 limitation.
•  Same Mortgaged Properties. The same four properties — 1400 Industrial Parkway, Schaumburg, IL; 2750 Commerce Drive, Rockford, IL; 600 Manufacturers Row, Greenville, SC; and 9100 Westpark Industrial Boulevard, Houston, TX — will be subject to new mortgages in favor of Crescent Harbor, based on the same $10,000,000 fair market value threshold.
Importantly, no gap in lien coverage is expected between the release of the existing Atlas Meridian liens and the grant of new liens in favor of Crescent Harbor. The new security documents (Security Agreement, Pledge Agreements, IP Security Agreement, etc.) will be executed and delivered at closing on March 28, 2025, and new UCC-1 financing statements will be filed in all six jurisdictions on the same date. The new mortgages will be delivered as post-closing items, which is consistent with customary market practice for leveraged credit facilities.
B. Key Differences or Enhancements in New Package
While the new security package is substantially identical to the existing package in scope and structure, the following differences or enhancements are anticipated:
(a) New UCC-1 Filings. New UCC-1 financing statements will be filed simultaneously on the closing date (March 28, 2025) in all six jurisdictions (Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan) in favor of Crescent Harbor Bank, N.A. as Collateral Agent. These filings will be made before the Atlas Meridian UCC-1s are terminated.
(b) New DACAs and SACAs. New Deposit Account Control Agreements and Securities Account Control Agreements will be executed at closing in favor of Crescent Harbor Bank, N.A. as the new Collateral Agent. To the extent practicable, the termination of the existing DACAs and SACAs and the execution of the new DACAs and SACAs will be coordinated to minimize any operational disruption to the Borrower's cash management and treasury functions.
(c) New Mortgages. New mortgages (or deeds of trust, as applicable) on the four mortgaged properties will be delivered as post-closing items, with a target delivery and recording date of no later than April 30, 2025. New lender's title insurance policies will be obtained from Landmark Title Assurance Company in connection with the new mortgages.
(d) New Intercreditor Agreement. A First Lien/Unsecured Intercreditor Agreement will be entered into between Crescent Harbor Bank, N.A. (as first lien collateral agent) and Pinnacle Trust Company (as trustee for the holders of the 7.250% Senior Unsecured Notes due 2028). This intercreditor agreement will govern the relative rights and priorities of the first lien secured creditors and the unsecured noteholders, including with respect to enforcement actions, standstill periods, and proceeds of collateral.
X. Open Items and Recommendations
A. Action Items for C&H
Based on the analysis set forth in this memorandum, the following action items should be addressed by C&H in connection with the closing:
1.  Obtain and Review Payoff Letter. Obtain and review the payoff letter from Atlas Meridian Bank, N.A. (Sandra Vickers, Managing Director, Portfolio Management). Confirm the exact payoff amount (principal, accrued interest, fees, and other amounts), the per diem interest figure, wire transfer instructions, and the payoff deadline. The payoff letter should be in form and substance acceptable to C&H and Whitfield & Gage LLP.
2.  Prepare Lien Release Authorization Letter. Prepare the lien release authorization letter (or equivalent instrument) for Atlas Meridian's execution. The letter should authorize all release and termination actions identified in Section VIII.B above. Circulate a draft to Atlas Meridian's counsel (and to Whitfield & Gage) for review no later than two weeks before closing.
3.  Prepare UCC-3 Termination Statements. Prepare UCC-3 Termination Statement forms for each of the twelve (12) UCC-1 financing statements in the six (6) filing jurisdictions (Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan). Arrange for Atlas Meridian's authorization of each termination statement. Coordinate with the filing agent (Hollowell Technologies) for prompt post-closing filing.
4.  Coordinate with Illinois Local Counsel on Mortgage Releases. Coordinate with Hargrove & Whitmore LLP (Robert Kimura, contact partner) regarding Illinois mortgage release procedures for Cook County and Winnebago County. Confirm the correct form of release instrument under Illinois law and the recording requirements for each county recorder's office.
5.  Coordinate Return of Physical Pledged Collateral. Coordinate with Atlas Meridian (or its custodian) regarding the return of all physical pledged collateral, including stock certificates, undated endorsed-in-blank stock powers, membership interest assignment documents, and endorsed intercompany promissory notes. Determine whether the physical instruments should be returned to the Borrower for subsequent re-pledge to Crescent Harbor or transferred directly to Crescent Harbor's custodian.
6.  Confirm Identification of All DACAs and SACAs. Confirm with Nexford's treasury department that all existing DACAs and SACAs have been identified and that termination notices will be prepared and delivered at or promptly following closing. Coordinate the execution of replacement DACAs and SACAs in favor of Crescent Harbor.
7.  Confirm IP Security Interest Release Filings. Confirm the specific IP security interest recordings at the USPTO and the U.S. Copyright Office and coordinate with Nexford's intellectual property counsel (Whitaker, Sun & Holt LLP) regarding the preparation and filing of release instruments at each office.
8.  Cross-Reference UCC Search Results. Upon receipt of the forthcoming Memorandum — UCC Search Results Summary (dated February 18, 2025), cross-reference the detailed UCC search results against the filings identified in this memorandum to confirm completeness and identify any discrepancies, unexpected filings, or potential name errors.
9.  Confirm Lakeshore Joinder and Michigan UCC Filing. Confirm that Lakeshore Precision Engineering, Inc. (acquired in 2024; organized in Michigan) was properly joined as a guarantor and grantor under the existing Guarantee Agreement, Security Agreement, and Pledge Agreements. Obtain and review the joinder agreement executed in connection with the Fourth Amendment. Confirm that the UCC-1 financing statement was timely and properly filed with the Michigan Department of State.
B. Timing Sensitivity
The following key dates should be noted in connection with the release and termination workstream:
C. Risk Considerations
The following risk considerations should be addressed in connection with the release and termination process:
No Gap Period in Lien Perfection. It is essential that there be no gap period between the release of the existing Atlas Meridian liens and the perfection of the new Crescent Harbor liens. The new UCC-1 financing statements and collateral documents in favor of Crescent Harbor should be filed and executed on the same day as closing (March 28, 2025). While the new mortgages are expected to be post-closing items (due April 3