CALDERWOOD & HARKNESS LLP
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
INTERNAL MEMORANDUM — NOT FOR DISTRIBUTION
TO: Claudia Merritt, Responsible Partner, Banking & Finance
FROM: Marcus Leung, Lead Associate, Banking & Finance Sophie Tremblay, Working Associate, Banking & Finance
DATE: January 31, 2025
RE: Conflict Check Results — Nexford Industrial Holdings Inc. $1,400,000,000 Senior Secured Term Loan B Refinancing and Dividend Recapitalization
Matter No.: 1005-00001
Client/Matter Code: IBL-NIH-2025-031
Billing Partner: Ian Blackwood
Status: CLEARED — No conflicts identified
1. Purpose and Summary
The purpose of this memorandum is to document the results of the comprehensive conflict of interest check conducted in connection with the proposed engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower") as borrower's counsel in a $1,400,000,000 senior secured Term Loan B refinancing and dividend recapitalization (the "Transaction"). This memorandum is prepared in accordance with the Firm's internal conflicts policies and procedures, as well as applicable obligations under the Rules of Professional Conduct in each jurisdiction in which C&H maintains offices or is admitted to practice.
The conflict check was initiated on January 29, 2025, at the request of Claudia Merritt, Responsible Partner, Banking & Finance, following initial discussions regarding the potential engagement between Ms. Merritt, Ian Blackwood (Billing Partner), and representatives of Nexford's in-house legal team, including David Engstrom, General Counsel and Corporate Secretary of Nexford. The conflict check was conducted by Marcus Leung and Sophie Tremblay under the supervision of the Firm's Conflicts Committee, with all searches completed and results finalized by January 31, 2025.
Conclusion: Based on the comprehensive conflict search described in this memorandum, no disqualifying conflicts of interest or material adverse relationships have been identified. The engagement may proceed, subject to Claudia Merritt's final clearance. Specifically, the Firm does not currently represent, and has not within the past thirty-six (36) months represented, any party adverse to Nexford or any entity in a position adverse to Nexford in connection with this Transaction or any substantially related matter. One non-adverse prior relationship has been identified and is noted in detail in Section 6 below; that relationship does not give rise to a conflict and does not require a written waiver, although it is recommended that the responsible partner consider whether disclosure to the client is appropriate as a matter of best practice.
This memorandum should be retained in the engagement file for Matter No. 1005-00001 and made available to the Firm's General Counsel's Office upon request.
2. Transaction Overview (For Context of Conflict Search)
The following summary of the Transaction is provided solely for the purpose of placing the conflict search in proper context and identifying the relevant parties, relationships, and potential areas of tension. This summary is based on information provided by Nexford, discussions with Granite Peak Capital Partners, LP (the "Sponsor"), and publicly available information. It is not intended to be a comprehensive description of the Transaction, its terms, or its legal implications.
Transaction Type. The Transaction involves a $1,400,000,000 senior secured Term Loan B (the "Term Loan B" or the "New Facility"). The proceeds of the New Facility will be used to (a) refinance in full the existing $875,000,000 first lien term loan and $190,000,000 revolving credit facility (collectively, the "Existing Facilities") currently held by Atlas Meridian Bank, N.A. as administrative agent and collateral agent, and (b) fund an approximately $335,000,000 dividend recapitalization to the Sponsor, Granite Peak Capital Partners, LP, through its direct holding vehicle, Granite Peak NIH Holdings, LLC (the "Dividend Recap"). The proceeds allocation described herein is approximate and will be refined as the Transaction progresses.
Borrower. Nexford Industrial Holdings Inc. is a Delaware corporation headquartered at 1400 Industrial Parkway, Schaumburg, Illinois 60173. Nexford is a diversified industrial manufacturer specializing in precision components, engineered systems, coatings and surface technologies, and manufacturing services. Nexford operates through twelve direct and indirect domestic and international subsidiaries, all of which are anticipated to serve as guarantors under the New Facility.
Sponsor. Granite Peak Capital Partners, LP is a Delaware limited partnership with its principal office located at 600 Steamboat Road, Suite 300, Greenwich, Connecticut 06830. Granite Peak is a middle-market private equity firm with approximately $14.5 billion in assets under management across five institutional funds. Granite Peak acquired Nexford in January 2019 through Granite Peak Capital Fund IV, LP, and holds its equity interest in Nexford indirectly through Granite Peak NIH Holdings, LLC, a Delaware limited liability company. The Dividend Recap will be made to the Sponsor through this holding vehicle.
Lead Left Arranger / Administrative Agent / Collateral Agent. Crescent Harbor Bank, N.A. is a national banking association with its principal office at 320 Federal Street, Boston, Massachusetts 02110. Crescent Harbor will serve as lead left arranger, sole bookrunner, administrative agent, and collateral agent for the New Facility.
Existing Agent (to be Refinanced). Atlas Meridian Bank, N.A. is a national banking association with its principal office at 500 Liberty Avenue, Pittsburgh, Pennsylvania 15222. Atlas Meridian currently serves as administrative agent and collateral agent under the Existing Facilities, which will be refinanced and repaid in full at the closing of the Transaction. Upon repayment, Atlas Meridian's role as agent will terminate, and all liens securing the Existing Facilities will be released.
Arranger's / Agent's Counsel. Whitfield & Gage LLP, located at 51 West 52nd Street, New York, New York 10019, has been retained by Crescent Harbor Bank, N.A. to serve as counsel to the administrative agent and lead left arranger. The lead partner at Whitfield & Gage is Margaret Ashby, and the working associate is Jonathan Ferris. Whitfield & Gage is the primary counterparty law firm in this Transaction from the perspective of C&H's representation of the Borrower.
Sponsor's Counsel. Kellner Brandt & Associates LLP, located at 900 Third Avenue, New York, New York 10022, has been retained by Granite Peak Capital Partners, LP to serve as counsel to the Sponsor in connection with the Transaction. The lead partner at Kellner Brandt is Patricia Voss. In the context of a sponsor-backed leveraged recapitalization, the interests of the Borrower and the Sponsor are generally aligned, and Kellner Brandt is treated as co-counsel for purposes of this conflicts analysis rather than as opposing counsel, although C&H will represent only the Borrower and not the Sponsor.
Anticipated Closing Date. March 28, 2025, subject to satisfaction of customary closing conditions, completion of syndication, and receipt of all necessary consents and approvals. The general syndication target date is March 21, 2025.
3. Methodology
3.1 Search Systems and Databases
The conflict search was conducted using the following Firm systems and resources:
• C&H Conflict Management System ("CMS"): The CMS is the Firm's centralized conflict clearance platform, which maintains records of all current and historical client engagements, adverse party designations, matter descriptions, billing records, and related party information across all Firm offices and practice groups. The CMS is maintained by the Firm's Conflicts Committee and is updated on a continuous basis.
• Client/Matter Database: The Firm's master client and matter database was searched to identify any current or historical representations involving any of the parties, affiliates, or individuals identified in connection with the Transaction. This database includes records dating back to the founding of the Firm and encompasses matters from all offices and practice groups worldwide.
• Adverse Party Records: The Firm's adverse party records were searched to identify any instances in which any party to the Transaction was designated as an adverse party in any current or historical C&H matter.
• Personnel Database: The Firm's personnel database was cross-referenced to determine whether any key individuals associated with the Transaction are current or former C&H attorneys, employees, or of-counsel.
In addition to the automated searches described above, Marcus Leung and Sophie Tremblay conducted manual reviews of search results, consulted with practice group leaders in the Banking & Finance, Private Equity, and Litigation practice groups, and communicated directly with the Conflicts Committee to confirm the accuracy and completeness of the search results.
3.2 Search Parameters
The conflict search was conducted using the following parameters:
• Search Window: All available records in the CMS and client/matter database, without limitation as to time period. Although the Firm's standard conflicts policy focuses on representations within the past thirty-six (36) months for purposes of identifying potentially adverse historical representations, the search was conducted across all available records to ensure completeness.
• Search Terms: Each entity was searched by its full legal name, any known short names or trade names (including "d/b/a" names), known Employer Identification Numbers ("EINs") where available, Delaware Division of Corporations file numbers where available, and the names of key individuals associated with each entity, including officers, directors, managing partners, and deal team principals. Wildcard and partial-match searches were employed where appropriate to capture variations in spelling, abbreviations, and naming conventions.
• Scope: The search was conducted on a firm-wide basis across all offices and all practice groups, including but not limited to Banking & Finance, Capital Markets, Corporate/M&A, Private Equity, Restructuring, Tax, Real Estate, intellectual Property, Employment & Labor, Litigation, and Regulatory & Government Affairs.
• Individual Searches: Each entity and individual was searched independently, and the results were reviewed for (a) current representations in which the entity or individual is a client of C&H, (b) historical representations within the past thirty-six (36) months, (c) any representations in which the entity or individual appeared as an adverse party, and (d) any representations in which the entity or individual appeared as an interested or related party. Results were then cross-referenced against the Transaction party list to identify any potential positional conflicts, dual-representation issues, or other concerns.
3.3 Parties Searched
A comprehensive list of all entities and individuals searched is set forth in Section 4 below. The party list was compiled based on information provided by Nexford (through its General Counsel, David Engstrom), publicly available sources (including SEC filings, Delaware Division of Corporations records, and commercial databases), and information obtained during preliminary discussions with representatives of Crescent Harbor Bank, N.A. and Granite Peak Capital Partners, LP. The party list was reviewed and confirmed by Claudia Merritt prior to the initiation of the conflict search.
4. Entities and Individuals Searched
The following is a comprehensive list of all entities and individuals that were run through the Firm's CMS and client/matter database as part of this conflict check. Entities are organized by their role in the Transaction, and key identifying information is provided where available.
4.1 Client / Borrower and Affiliates
The following entities comprise the Borrower and its direct and indirect parent entities, affiliates, and subsidiaries:
Borrower:
• Nexford Industrial Holdings Inc. (Delaware corporation; EIN 36-4178552; DE File No. 5765432; 1400 Industrial Parkway, Schaumburg, IL 60173)
Direct Parent / Sponsor Holding Vehicle:
• Granite Peak NIH Holdings, LLC (Delaware limited liability company; EIN 85-3291047; DE File No. 7234891; 600 Steamboat Road, Suite 300, Greenwich, CT 06830)
Sponsor and Affiliated Fund Entities:
• Granite Peak Capital Partners, LP (Delaware limited partnership; 600 Steamboat Road, Suite 300, Greenwich, CT 06830)
• Granite Peak Capital Fund IV, LP (Delaware limited partnership)
• GP Fund IV Co-Invest, LP (Delaware limited partnership)
• Granite Peak Capital GP IV, LLC (Delaware limited liability company)
Nexford Subsidiaries (Domestic):
• Nexford Precision Components, Inc. (Delaware corporation)
• Nexford Engineered Systems, LLC (Delaware limited liability company)
• Nexford Coatings & Surface Technologies, Inc. (Delaware corporation)
• Nexford Manufacturing Services, LLC (Illinois limited liability company)
• Nexford Properties, LLC (Delaware limited liability company)
• Nexford International Holdings, Inc. (Delaware corporation)
• Clearfield Tool & Die, Inc. (Pennsylvania corporation)
• Summit Industrial Fabrication Co. (South Carolina corporation)
• Ridgepoint Specialty Coatings, LLC (Texas limited liability company)
• Lakeshore Precision Engineering, Inc. (Michigan corporation)
Nexford Subsidiaries (International):
• Nexford Canada Holdings ULC (British Columbia unlimited liability company)
• Nexford Canada Manufacturing, Inc. (Ontario corporation)
4.2 Key Individuals — Client Side
The following individuals are officers, directors, or principals of the Borrower and/or the Sponsor who are expected to play a material role in the Transaction:
• James Thornton, Chief Executive Officer, Nexford Industrial Holdings Inc.
• Michelle Kaplan, Chief Financial Officer, Nexford Industrial Holdings Inc.
• David Engstrom, General Counsel & Corporate Secretary, Nexford Industrial Holdings Inc.
• Priya Mehta, Vice President, Treasury & Corporate Finance, Nexford Industrial Holdings Inc.
• Derek Calloway, Co-Founder & Managing Partner, Granite Peak Capital Partners, LP
• Vanessa Liu, Co-Founder & Managing Partner, Granite Peak Capital Partners, LP
• Ryan Ostrowski, Principal, Deal Team Lead, Granite Peak Capital Partners, LP
4.3 Lead Arranger / Administrative Agent / Collateral Agent
• Crescent Harbor Bank, N.A. (national banking association; 320 Federal Street, Boston, MA 02110)
Key Contacts:
• Elaine Prescott, Managing Director, Leveraged Finance, Crescent Harbor Bank, N.A.
• Thomas Nakamura, Director, Loan Syndication, Crescent Harbor Bank, N.A.
4.4 Existing Lender / Agent (to be Refinanced)
• Atlas Meridian Bank, N.A. (national banking association; 500 Liberty Avenue, Pittsburgh, PA 15222)
Key Contact:
• Sandra Vickers, Managing Director, Portfolio Management, Atlas Meridian Bank, N.A.
4.5 Anticipated Syndicate Lenders / Joint Lead Arrangers
The following entities have been identified as anticipated participants in the syndication of the New Facility, either as joint lead arrangers, co-managers, or committed lenders:
• Ironwood Capital Markets, LLC (Delaware limited liability company; 1100 Avenue of the Americas, New York, NY 10036)
• Northvane Securities, Inc. (Delaware corporation; 200 South Wacker Drive, Chicago, IL 60606)
• Ridgeline Asset Management, LP (Delaware limited partnership; 55 East 52nd Street, New York, NY 10055)
• Halcyon Credit Partners, LLC (Delaware limited liability company; 2000 K Street NW, Washington, DC 20006)
• Verdant Institutional Investors, LP (Connecticut limited partnership; One Financial Center, Hartford, CT 06103)
• Cascadia Loan Fund III, LP (Delaware limited partnership; managed by Cascadia Credit Advisors, LLC; 888 SW Fifth Avenue, Portland, OR 97204)
• Bluewater Fixed Income Fund, LP (Delaware limited partnership; 300 Biscayne Boulevard, Miami, FL 33131)
Note: The syndicate composition may change during the general syndication period. Additional lenders joining the syndicate will be subject to a supplemental conflict check as described in Section 7 below.
4.6 Existing Unsecured Notes Trustee
• Pinnacle Trust Company (New York trust company; 101 Park Avenue, New York, NY 10178)
Pinnacle Trust Company serves as indenture trustee under the indenture governing Nexford's existing $250,000,000 7.250% Senior Unsecured Notes due 2028 (the "Existing Notes"). Pinnacle Trust is expected to be a party to the intercreditor agreement to be entered into in connection with the closing of the New Facility.
4.7 Opposing and Co-Counsel
• Whitfield & Gage LLP (arranger's/agent's counsel; 51 West 52nd Street, New York, NY 10019)
• Margaret Ashby, Partner (lead counsel)
• Jonathan Ferris, Associate (working counsel)
• Kellner Brandt & Associates LLP (sponsor's counsel; 900 Third Avenue, New York, NY 10022)
• Patricia Voss, Partner (lead counsel)
4.8 Local Counsel (Anticipated)
The following local counsel firms are anticipated to be retained at C&H's direction to assist with jurisdiction-specific matters in connection with the Transaction:
• Hargrove & Whitmore LLP (Illinois local counsel; 233 South Wacker Drive, Suite 4500, Chicago, IL 60606)
• Robert Kimura, Partner (lead counsel)
• Briarcliff Legal Group PA (Delaware local counsel; 1000 North King Street, Wilmington, DE 19801)
• Catherine Ellsworth, Partner (lead counsel)
4.9 Advisors and Third Parties
The following financial advisors, auditors, consultants, and other third-party service providers have been identified as parties to or participants in the Transaction:
• Stonebridge Advisory Group, LLC (financial advisor to the Borrower; 277 Park Avenue, New York, NY 10172)
• Andrew Castellano, Managing Director
• Ashworth & Kendrick LLP (independent auditor of Nexford; 200 South Michigan Avenue, Chicago, IL 60604)
• Helen Yamamoto, Engagement Partner
• Greystone Valuation Services, Inc. (collateral appraiser; 1700 Market Street, Philadelphia, PA 19103)
• Daniel Pritchard, Lead Appraiser
• Clearwater Environmental Sciences, Inc. (environmental consultant; 8500 West Bryn Mawr Avenue, Chicago, IL 60631)
• Dr. Nathan Foley, Project Manager
• Vantage Risk Advisors, LLC (insurance broker; 350 North Clark Street, Chicago, IL 60654)
• Rachel Sorensen, Account Executive
4.10 Rating Agencies
• Keystone Ratings Group, Inc. (7 World Trade Center, New York, NY 10007)
• Sentinel Credit Analytics, LLC (55 Water Street, New York, NY 10041)
4.11 Insurance Carriers
• Landmark Title Assurance Company (title insurance underwriter)
• Meridian Specialty Insurance Co. (D&O insurance carrier for Nexford)
• Continental Shield Underwriters, Inc. (property & casualty insurance carrier for Nexford)
5. Conflict Search Results
The results of the conflict search for each category of parties are set forth below. For each category, we identify the entities and individuals searched, summarize the search results, and provide our conclusion as to whether a conflict or potential conflict exists. Where a prior or existing relationship has been identified, additional detail is provided.
5.1 Nexford Industrial Holdings Inc. and Subsidiaries
A comprehensive search was conducted for Nexford Industrial Holdings Inc. and each of its twelve direct and indirect subsidiaries, including Nexford Precision Components, Inc., Nexford Engineered Systems, LLC, Nexford Coatings & Surface Technologies, Inc., Nexford Manufacturing Services, LLC, Nexford Properties, LLC, Nexford International Holdings, Inc., Nexford Canada Holdings ULC, Nexford Canada Manufacturing, Inc., Clearfield Tool & Die, Inc., Summit Industrial Fabrication Co., Ridgepoint Specialty Coatings, LLC, and Lakeshore Precision Engineering, Inc.
The search returned no results indicating that C&H currently represents, or has at any time in the past thirty-six (36) months represented, Nexford or any of its subsidiaries in any capacity. No matters were identified in which Nexford or any of its subsidiaries appeared as a client of the Firm. Similarly, no matters were identified in which Nexford or any of its subsidiaries appeared as an adverse party or interested party in any C&H engagement. The historical records, which extend beyond the thirty-six-month window, likewise returned no results for any Nexford entity.
Result: Clear — No Conflict.
5.2 Granite Peak Capital Partners, LP and Affiliates
A comprehensive search was conducted for Granite Peak Capital Partners, LP and each of its affiliated entities, including Granite Peak Capital Fund IV, LP, GP Fund IV Co-Invest, LP, Granite Peak Capital GP IV, LLC, and Granite Peak NIH Holdings, LLC (the direct parent holding company of Nexford).
The search returned no results indicating that C&H currently represents, or has at any time in the past thirty-six (36) months represented, Granite Peak or any of its affiliated entities in any capacity. No matters were identified in which Granite Peak or any of its affiliated entities appeared as a client, adverse party, or interested party in any C&H engagement.
Note: Granite Peak Capital Partners, LP is a well-known middle-market private equity firm with approximately $14.5 billion in assets under management across five institutional funds. Given the Firm's active private equity and leveraged finance practices, we confirmed through consultations with the heads of the Private Equity and Banking & Finance practice groups that no other C&H practice groups have had informal discussions, pitches, or preliminary business development conversations with Granite Peak that might not yet be reflected in the CMS. Those consultations confirmed that no such discussions or pitches have occurred. The search returned no formal or informal engagements with Granite Peak.
Result: Clear — No Conflict.
5.3 Crescent Harbor Bank, N.A.
A comprehensive search was conducted for Crescent Harbor Bank, N.A. in its capacity as lead left arranger, sole bookrunner, administrative agent, and collateral agent for the New Facility.
The search identified that C&H has represented Crescent Harbor Bank, N.A. on prior unrelated lending matters. Specifically, the CMS reflects that the Firm's Banking & Finance practice group has, in the past, represented Crescent Harbor as administrative agent counsel in connection with unrelated syndicated credit facilities for borrowers in industries unrelated to Nexford's business. These prior engagements have been concluded, and there are no open matters in which C&H currently represents Crescent Harbor.
Importantly, in the present Transaction, Crescent Harbor Bank, N.A. is not an adverse party to C&H's prospective client, Nexford. Crescent Harbor serves as the administrative agent and lead left arranger for the New Facility, and while the interests of the borrower and the arranger/agent may diverge on certain negotiating points within the credit agreement (such as representations and warranties, events of default, and agency provisions), the relationship between the borrower and the administrative agent in a leveraged loan transaction is not inherently adversarial. The Firm will represent Nexford only, and Crescent Harbor has retained its own independent counsel, Whitfield & Gage LLP, to represent its interests in this Transaction.
No current matters were identified in which C&H is representing any party in a matter adverse to Crescent Harbor Bank, N.A. in any context. The prior non-adverse representations of Crescent Harbor do not create a disqualifying conflict of interest under the applicable Rules of Professional Conduct, nor do they implicate the Firm's duty of loyalty to the prospective client, Nexford.
This prior relationship is noted in greater detail in Section 6 below for record-keeping purposes.
Result: Clear — No Conflict (prior non-adverse relationship noted for file).
5.4 Atlas Meridian Bank, N.A.
A comprehensive search was conducted for Atlas Meridian Bank, N.A. in its capacity as the existing administrative agent and collateral agent under the Existing Facilities, which will be refinanced and repaid in full at the closing of the Transaction.
The search returned no results indicating that C&H currently represents, or has at any time in the past thirty-six (36) months represented, Atlas Meridian Bank, N.A. in any capacity. No matters were identified in which Atlas Meridian appeared as a client, adverse party, or interested party in any C&H engagement.
As an additional contextual note, Atlas Meridian's interests in this Transaction are aligned with the Borrower's interests insofar as both parties seek the successful closing of the Transaction, which will result in the full repayment of all outstanding obligations under the Existing Facilities. Atlas Meridian is not adverse to the Borrower in this context, and no conflict arises from the Transaction structure.
Result: Clear — No Conflict.
5.5 Syndicate Lenders and Joint Lead Arrangers
A comprehensive search was conducted for each of the seven anticipated syndicate lenders and joint lead arrangers identified in Section 4.5 above. The results are as follows:
• Ironwood Capital Markets, LLC: No current or historical representations of or adverse to Ironwood Capital Markets identified in the CMS. No matters in which Ironwood appeared as a client, adverse party, or interested party. Clear.
• Northvane Securities, Inc.: No current or historical representations of or adverse to Northvane Securities identified in the CMS. No matters in which Northvane appeared as a client, adverse party, or interested party. Clear.
• Ridgeline Asset Management, LP: No current or historical representations of or adverse to Ridgeline Asset Management identified in the CMS. No matters in which Ridgeline appeared as a client, adverse party, or interested party. Clear.
• Halcyon Credit Partners, LLC: No current or historical representations of or adverse to Halcyon Credit Partners identified in the CMS. No matters in which Halcyon appeared as a client, adverse party, or interested party. Clear.
• Verdant Institutional Investors, LP: No current or historical representations of or adverse to Verdant Institutional Investors identified in the CMS. No matters in which Verdant appeared as a client, adverse party, or interested party. Clear.
• Cascadia Loan Fund III, LP / Cascadia Credit Advisors, LLC: No current or historical representations of or adverse to Cascadia Loan Fund III or its manager, Cascadia Credit Advisors, identified in the CMS. No matters in which either entity appeared as a client, adverse party, or interested party. Clear.
• Bluewater Fixed Income Fund, LP: No current or historical representations of or adverse to Bluewater Fixed Income Fund identified in the CMS. No matters in which Bluewater appeared as a client, adverse party, or interested party. Clear.
Note: The syndicate composition for the Term Loan B is expected to evolve during the general syndication period, with a target syndication close date of March 21, 2025. Additional syndicate lenders may be identified and invited to participate in the New Facility prior to closing. A supplemental conflict check should be conducted promptly upon identification of any additional material syndicate lenders, as described in Section 7 below.
Result: Clear — No Conflict (all currently identified syndicate lenders).
5.6 Pinnacle Trust Company
A comprehensive search was conducted for Pinnacle Trust Company in its capacity as indenture trustee under Nexford's existing $250,000,000 7.250% Senior Unsecured Notes due 2028. Pinnacle Trust is expected to be a party to the intercreditor agreement to be negotiated and executed in connection with the closing of the New Facility.
The search returned no results indicating that C&H currently represents, or has at any time in the past thirty-six (36) months represented, Pinnacle Trust Company in any capacity. No matters were identified in which Pinnacle Trust appeared as a client, adverse party, or interested party in any C&H engagement.
Result: Clear — No Conflict.
5.7 Opposing and Co-Counsel Law Firms
A search was conducted for each law firm identified as opposing counsel, co-counsel, or local counsel in connection with the Transaction, as well as for the individual attorneys serving as lead or working counsel at each firm. The results are as follows:
• Whitfield & Gage LLP: Whitfield & Gage has been identified as opposing counsel in this Transaction, representing Crescent Harbor Bank, N.A. in its capacity as administrative agent and lead left arranger. No ethical conflict arises from the fact that C&H and Whitfield & Gage are on opposite sides of a negotiation in this Transaction; this is a routine counterparty counsel relationship in the context of leveraged lending transactions. A review of the CMS confirmed that there are no current matters in which C&H and Whitfield & Gage serve as co-counsel on a matter that is adverse to any party in this Transaction, and no matters in which the two firms are currently adverse to each other in any context that would raise a concern. Additionally, Margaret Ashby (lead partner) and Jonathan Ferris (working associate) at Whitfield & Gage were searched individually, and neither individual is a former C&H attorney or employee. Clear.
• Kellner Brandt & Associates LLP: Kellner Brandt has been identified as sponsor's counsel, representing Granite Peak Capital Partners, LP. In the context of a sponsor-backed leveraged recapitalization, the interests of the borrower and the sponsor are generally aligned, and the relationship between borrower's counsel and sponsor's counsel is typically cooperative rather than adversarial. No conflict arises from this relationship. A review of the CMS confirmed no current or historical matters involving Kellner Brandt that would raise a concern. Patricia Voss (lead partner) was searched individually and is not a former C&H attorney or employee. Clear.
• Hargrove & Whitmore LLP: Hargrove & Whitmore has been identified as anticipated Illinois local counsel, to be retained at C&H's direction to assist with Illinois-specific matters, including UCC filings, real property matters, and any Illinois corporate law issues. Robert Kimura (lead partner) was searched individually, and no issues were identified. Clear.
• Briarcliff Legal Group PA: Briarcliff Legal Group has been identified as anticipated Delaware local counsel, to be retained at C&H's direction to assist with Delaware-specific matters, including delivery of legal opinions, good standing certifications, and Delaware LLC and corporate law issues. Catherine Ellsworth (lead partner) was searched individually, and no issues were identified. Clear.
Result: Clear — No Conflict.
5.8 Third-Party Advisors
A search was conducted for each third-party advisor, consultant, auditor, rating agency, and insurance carrier identified in Sections 4.9 through 4.11 above. The results are as follows:
• Stonebridge Advisory Group, LLC (financial advisor): No current or historical representations of or adverse to Stonebridge identified. No matters in which Stonebridge appeared as a client, adverse party, or interested party. Clear.
• Ashworth & Kendrick LLP (independent auditor): No current or historical representations of or adverse to Ashworth & Kendrick identified. No matters in which Ashworth & Kendrick appeared as a client, adverse party, or interested party. Clear.
• Greystone Valuation Services, Inc. (collateral appraiser): No current or historical representations of or adverse to Greystone Valuation identified. No matters in which Greystone appeared as a client, adverse party, or interested party. Clear.
• Clearwater Environmental Sciences, Inc. (environmental consultant): No current or historical representations of or adverse to Clearwater Environmental identified. No matters in which Clearwater appeared as a client, adverse party, or interested party. Clear.
• Vantage Risk Advisors, LLC (insurance broker): No current or historical representations of or adverse to Vantage Risk Advisors identified. No matters in which Vantage appeared as a client, adverse party, or interested party. Clear.
• Keystone Ratings Group, Inc. (rating agency): No current or historical representations of or adverse to Keystone Ratings identified. No matters in which Keystone appeared as a client, adverse party, or interested party. Clear.
• Sentinel Credit Analytics, LLC (rating agency): No current or historical representations of or adverse to Sentinel Credit Analytics identified. No matters in which Sentinel appeared as a client, adverse party, or interested party. Clear.
• Landmark Title Assurance Company (title insurance underwriter): No current or historical representations of or adverse to Landmark Title identified. No matters in which Landmark appeared as a client, adverse party, or interested party. Clear.
• Meridian Specialty Insurance Co. (D&O insurance carrier): No current or historical representations of or adverse to Meridian Specialty identified. No matters in which Meridian appeared as a client, adverse party, or interested party. Clear.
• Continental Shield Underwriters, Inc. (property & casualty insurance carrier): No current or historical representations of or adverse to Continental Shield identified. No matters in which Continental Shield appeared as a client, adverse party, or interested party. Clear.
Result: Clear — No Conflict.
5.9 Key Individuals
All key individuals listed in Sections 4.2 through 4.9 above were searched individually through the Firm's CMS and personnel databases. This search encompassed a total of twenty-two (22) named individuals, including officers, directors, and principals of the Borrower and the Sponsor; key contacts at the administrative agent, existing agent, and syndicate lenders; lead attorneys at opposing and co-counsel firms; and principals at third-party advisory and consulting firms.
The search returned no results indicating that any of the listed individuals is a current or former C&H client, employee, attorney, or of-counsel. No matters were identified in which any listed individual appeared as a party, witness, adverse party, or interested party in any C&H engagement.
Result: Clear — No Conflict.
6. Summary of Prior / Existing Relationships
Based on the comprehensive conflict search described in this memorandum, one non-adverse prior relationship has been identified. No other prior or existing relationships of note were identified with respect to any party searched. The identified relationship is summarized below:
Prior Representation of Crescent Harbor Bank, N.A.
As noted in Section 5.3 above, C&H has previously represented Crescent Harbor Bank, N.A. on unrelated lending matters. Specifically, the Firm's Banking & Finance practice group has in the past represented Crescent Harbor as administrative agent counsel in connection with syndicated credit facilities for borrowers in industries unrelated to Nexford's diversified industrial manufacturing business. Those prior engagements have been concluded, and there are no open or active matters in which C&H currently represents Crescent Harbor.
In the present Transaction, C&H will represent the Borrower, Nexford Industrial Holdings Inc. — not Crescent Harbor Bank, N.A. Crescent Harbor has retained its own independent counsel, Whitfield & Gage LLP, to represent its interests as administrative agent and lead left arranger. The prior representations of Crescent Harbor were not adverse to Nexford or any entity affiliated with Nexford, and the matters in which C&H represented Crescent Harbor are not substantially related to the present Transaction. Accordingly, this prior relationship does not create a disqualifying conflict of interest, nor does it require a written waiver or informed consent from any party.
Nevertheless, this relationship is noted for the file in the interest of completeness and transparency. As a matter of best practice, we recommend that Claudia Merritt, as Responsible Partner, consider whether it is appropriate to disclose this prior relationship to Nexford (through its General Counsel, David Engstrom) and/or to Crescent Harbor (through its counsel, Margaret Ashby of Whitfield & Gage). Such disclosure, while not legally required, may be advisable to preserve the Firm's reputation for candor and to avoid any appearance of impropriety.
No other prior or existing relationships of note were identified with respect to any party searched in connection with this Transaction.