DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO REVISION
Draft Opinion Letter of Calderwood & Harkness LLP Preliminary Draft for Review
March 20, 2025
Prepared by: Marcus Leung, Lead Associate Reviewed by: Claudia Merritt, Responsible Partner
Matter No. 1005-00001 Billing Code: IBL-NIH-2025-031
Circulated to: Whitfield & Gage LLP (Margaret Ashby, Jonathan Ferris) for review and comment
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
TRANSMITTAL NOTICE
This document constitutes a preliminary draft of the proposed opinion letter of Calderwood & Harkness LLP to be delivered at the closing of the financing transactions described herein. This draft is circulated (i) for internal review within Calderwood & Harkness LLP and (ii) for review and comment by Whitfield & Gage LLP, counsel to the Administrative Agent, Crescent Harbor Bank, N.A.
This draft is not intended to be relied upon by any person for any purpose. The opinions set forth herein are in preliminary form and remain subject to finalization, revision, and supplementation prior to the closing of the transactions described herein, which closing is currently targeted for March 28, 2025. No person should take any action in reliance on this draft, and no opinion is expressed by the circulation of this draft in its current form.
All comments should be returned to:
Marcus Leung Calderwood & Harkness LLP 425 Lexington Avenue New York, New York 10017 Telephone: (212) 558-4000
Email: marcus.leung@calderwoodharkness.com
Comments are requested by March 24, 2025, in order to permit finalization of this opinion letter in advance of the anticipated closing date.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT DRAFT — FOR DISCUSSION PURPOSES ONLY — SUBJECT TO REVISION
March 28, 2025
Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent 320 Federal Street Boston, Massachusetts 02110
Attention: Elaine Prescott, Managing Director, Leveraged Finance Origination
and
Each of the Lenders party to the Credit Agreement referred to below from time to time
Ladies and Gentlemen:
I. INTRODUCTORY PARAGRAPH
We have acted as counsel to Nexford Industrial Holdings Inc., a corporation organized and existing under the laws of the State of Delaware (the "Borrower"), in connection with that certain Credit Agreement dated as of March 28, 2025 (the "Credit Agreement"), among:
(i) Nexford Industrial Holdings Inc., as Borrower;
(ii) Granite Peak NIH Holdings, LLC, a limited liability company organized and existing under the laws of the State of Delaware (the "Holdings Guarantor"), and the Subsidiary Guarantors listed on Schedule I hereto (collectively with the Holdings Guarantor, the "Guarantors"), as Guarantors party thereto;
(iii) Crescent Harbor Bank, N.A., a national banking association, as Administrative Agent and Collateral Agent (in such capacities, the "Administrative Agent" and the "Collateral Agent," respectively);
(iv) Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners (the "Arrangers"); and
(v) the several lenders from time to time party thereto (the "Lenders").
The Credit Agreement provides for a senior secured Term Loan B facility in the aggregate principal amount of $1,400,000,000 (the "Term Loan B"). This opinion letter is delivered to you pursuant to Section [__] of the Credit Agreement as a condition precedent to the initial funding of the Term Loan B on the date hereof. [NTD: Confirm section cross-reference for conditions precedent in Credit Agreement.] The Credit Agreement is governed by the laws of the State of New York.
Each of the Lenders party to the Credit Agreement from time to time may rely on this opinion letter as if it were addressed to such Lender individually, subject to the terms and conditions set forth herein, including the reliance limitations set forth in Section X below.
II. DEFINITION OF LOAN DOCUMENTS
As used in this opinion letter, the following terms have the meanings set forth below:
"Credit Agreement" means the Credit Agreement defined above.
"Guarantee Agreement" means the Guarantee Agreement dated as of March 28, 2025, among the Guarantors and Crescent Harbor Bank, N.A., as Collateral Agent for the benefit of the Secured Parties (as defined in the Credit Agreement).
"Security Agreement" means the Security Agreement dated as of March 28, 2025, among the Borrower, the Guarantors, and Crescent Harbor Bank, N.A., as Collateral Agent.
"Holdings Pledge Agreement" means the Holdings Pledge Agreement dated as of March 28, 2025, pursuant to which Granite Peak NIH Holdings, LLC pledges 100% of its equity interests in the Borrower to the Collateral Agent for the benefit of the Secured Parties.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement dated as of March 28, 2025, pursuant to which the Borrower pledges 100% of the equity interests in each of its direct domestic subsidiaries to the Collateral Agent for the benefit of the Secured Parties.
"Subsidiary Pledge Agreements" means, collectively, the several pledge agreements, each dated as of March 28, 2025, from each Subsidiary Guarantor pledging equity interests held by such Subsidiary Guarantor in its respective subsidiaries to the Collateral Agent for the benefit of the Secured Parties.
"CFC Holdco Limited Pledge Agreement" means the Limited Pledge Agreement dated as of March 28, 2025, from Nexford International Holdings, Inc. pledging (a) 65% of the issued and outstanding voting equity interests and (b) 100% of the issued and outstanding non-voting equity interests in Nexford Canada Holdings ULC, an unlimited liability company organized under the laws of the Province of British Columbia, to the Collateral Agent for the benefit of the Secured Parties.
"Intellectual Property Security Agreement" means the intellectual Property Security Agreement dated as of March 28, 2025, among the Borrower, the Guarantors, and the Collateral Agent, covering patents, patent applications, trademarks, trademark applications, copyrights, and copyright registrations of the Borrower and the Guarantors.
"Intercreditor Agreement" means the First Lien/Unsecured Intercreditor Agreement dated as of March 28, 2025, among Crescent Harbor Bank, N.A., as First Lien Collateral Agent, Pinnacle Trust Company, as Unsecured Notes Trustee, and Nexford Industrial Holdings Inc. [NTD: Confirm treatment of Intercreditor Agreement within enforceability opinion — does W&G require a separate enforceability opinion as to Pinnacle Trust Company?]
The Credit Agreement, the Guarantee Agreement, the Security Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreements, the CFC Holdco Limited Pledge Agreement, the intellectual Property Security Agreement, and the Intercreditor Agreement are collectively referred to herein as the "Loan Documents." The Loan Documents are listed on Schedule II hereto.
The Security Agreement, the Holdings Pledge Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreements, the CFC Holdco Limited Pledge Agreement, and the intellectual Property Security Agreement are collectively referred to herein as the "Security Documents."
Note: Mortgages encumbering certain real property of the Loan Parties are post-closing deliverables due by April 30, 2025, pursuant to Section [__] of the Credit Agreement, and are not covered by this opinion letter. [NTD: Post-closing mortgages (due April 30, 2025) — confirm that mortgage opinion will be delivered separately at time of mortgage recording in Cook County, Winnebago County, Greenville County, and Harris County.]
III. IDENTIFICATION OF LOAN PARTIES COVERED
The opinions set forth herein are rendered with respect to each of the following entities (collectively, the "Loan Parties" or the "Opinion Parties"):
The Borrower:
Nexford Industrial Holdings Inc., a corporation organized and existing under the laws of the State of Delaware (EIN: 36-4178552; Delaware File No. 5765432; principal executive offices: 1400 Industrial Parkway, Schaumburg, Illinois 60173).
The Holdings Guarantor:
Granite Peak NIH Holdings, LLC, a limited liability company organized and existing under the laws of the State of Delaware (EIN: 85-3291047; Delaware File No. 7234891; registered address: c/o Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801).
The Subsidiary Guarantors (11 entities):
1. Nexford Precision Components, Inc., a Delaware corporation
2. Nexford Engineered Systems, LLC, a Delaware limited liability company
3. Nexford Coatings & Surface Technologies, Inc., a Delaware corporation
4. Nexford Manufacturing Services, LLC, an Illinois limited liability company
5. Nexford Properties, LLC, a Delaware limited liability company
6. Nexford International Holdings, Inc., a Delaware corporation ("CFC Holdco")
7. Clearfield Tool & Die, Inc., a Pennsylvania corporation
8. Summit Industrial Fabrication Co., a South Carolina corporation
9. Ridgepoint Specialty Coatings, LLC, a Texas limited liability company
10. Lakeshore Precision Engineering, Inc., a Michigan corporation
The Subsidiary Guarantors are listed in further detail on Schedule I hereto.
Exclusions: Nexford Canada Holdings ULC, an unlimited liability company organized under the laws of the Province of British Columbia, and Nexford Canada Manufacturing, Inc., a corporation organized under the laws of the Province of Ontario, are foreign subsidiaries of the Borrower and are NOT Loan Parties. No opinions are expressed herein with respect to either such entity, and no opinion is expressed herein as to the laws of any Canadian province or territory or the federal laws of Canada.
IV. DOCUMENTS EXAMINED
In connection with rendering the opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents:
1. The Credit Agreement (execution version).
2. The Guarantee Agreement (execution version).
3. The Security Agreement (execution version).
4. The Holdings Pledge Agreement (execution version).
5. The Borrower Pledge Agreement (execution version).
6. Each of the Subsidiary Pledge Agreements (execution versions).
7. The CFC Holdco Limited Pledge Agreement (execution version).
8. The intellectual Property Security Agreement (execution version).
9. The Intercreditor Agreement (execution version).
10. The certificate of incorporation (or certificate of formation, as applicable) and bylaws (or limited liability company agreement, as applicable) of each Loan Party, each as currently in effect.
11. Good standing certificates (or certificates of status, as applicable) for each Loan Party obtained from the Secretary of State (or equivalent filing authority) of its respective jurisdiction of organization, in each case dated within five (5) business days of the date hereof.
12. Resolutions of the Board of Directors of Nexford Industrial Holdings Inc. adopted on January 13, 2025, authorizing the execution, delivery, and performance of the Loan Documents and the consummation of the transactions contemplated thereby.
13. Written consent of the managers and/or members of Granite Peak NIH Holdings, LLC adopted on January 13, 2025, authorizing the execution, delivery, and performance of the Loan Documents to which Granite Peak NIH Holdings, LLC is a party.
14. Board of directors resolutions and/or manager/member consents, as applicable, of each Subsidiary Guarantor authorizing the execution, delivery, and performance of the Guarantee Agreement, the Security Agreement, the applicable Subsidiary Pledge Agreement(s), and the other Loan Documents to which such Subsidiary Guarantor is a party.
15. Secretary's certificates and incumbency certificates of each Loan Party, in each case dated as of March 28, 2025.
16. The Officer's Certificate of the Borrower dated March 28, 2025.
17. The Closing Certificate of the Borrower dated March 28, 2025.
18. The Solvency Certificate dated March 28, 2025, executed by Michelle Kaplan, Chief Financial Officer of the Borrower.
19. The Opinion Back-Up Certificate of the Borrower dated March 28, 2025 (the "Back-Up Certificate"), setting forth certain factual matters upon which we have relied in rendering the opinions expressed herein.
20. UCC-1 Financing Statements in the forms to be filed in (a) the Office of the Secretary of State of the State of Delaware, (b) the Office of the Secretary of State of the State of Illinois, (c) the Pennsylvania Department of State, (d) the Office of the Secretary of State of the State of South Carolina, (e) the Office of the Secretary of State of the State of Texas, and (f) the Michigan Department of State, in each case naming the applicable Loan Party(ies) as Debtor(s) and Crescent Harbor Bank, N.A., as Collateral Agent, as Secured Party. [NTD: Confirm with Marcus Leung that all 13 UCC-1 financing statements (one per Debtor entity across 6 jurisdictions) have been prepared and are ready for filing at closing.]
21. UCC, federal tax lien, and judgment lien search results for all Loan Parties across all applicable filing jurisdictions, conducted by National UCC Lien Search Services, Inc. and dated within fifteen (15) days of the date hereof.
22. The Existing Credit Agreement dated as of June 14, 2019 (as amended by the First Amendment dated March 20, 2020, the Second Amendment dated November 8, 2021, the Third Amendment dated April 15, 2023, and the Fourth Amendment dated September 12, 2024, the "Existing Credit Agreement"), among Nexford Industrial Holdings Inc. and certain of its subsidiaries, Atlas Meridian National Bank, as administrative agent, and the lenders party thereto.
23. The Indenture dated as of November 8, 2021 (the "Existing Indenture"), among Nexford Industrial Holdings Inc., as issuer, the guarantors party thereto, and Pinnacle Trust Company, as Trustee, relating to $250,000,000 aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 (the "Existing Notes").
24. Such other documents, records, agreements, instruments, and certificates as we have deemed necessary or appropriate for purposes of rendering the opinions set forth below.
V. ASSUMPTIONS
In rendering the opinions set forth below, we have, with your permission, assumed the following without independent investigation or verification:
1. The genuineness of all signatures (other than the signatures of the Loan Parties and their authorized officers and representatives on the Loan Documents).
2. The authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies (whether certified, photostatic, facsimile, electronic, or otherwise).
3. Each party to the Loan Documents (other than the Loan Parties) has been duly organized or formed, is validly existing and in good standing under the laws of its jurisdiction of organization, has all requisite corporate, limited liability company, or other organizational power and authority to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, and has duly authorized, executed, and delivered each such Loan Document. The enforceability of the Loan Documents as to such other parties is not within the scope of this opinion.
4. The Loan Documents constitute legal, valid, binding, and enforceable obligations of each party thereto other than the Loan Parties, enforceable against each such party in accordance with their respective terms.
5. Each natural person who has executed any Loan Document on behalf of any party (other than a Loan Party) has the legal capacity to do so.
6. The factual representations, warranties, and statements set forth in the Back-Up Certificate of the Borrower dated March 28, 2025, are and remain true, correct, and complete in all material respects as of the date hereof, and no facts have come into existence since the date of the Back-Up Certificate that would render any such representation, warranty, or statement materially inaccurate or incomplete.
7. The terms and conditions of the Loan Documents as executed and delivered on the date hereof conform in all material respects to the drafts of such Loan Documents most recently reviewed by us prior to the date hereof.
8. The Credit Agreement has been duly entered into for good and valuable consideration.
9. Each Lender is acting in good faith and without notice of any defense against the enforcement of any rights created by, or arising under, the Loan Documents.
10. With respect to the laws of each jurisdiction other than the State of New York and the State of Delaware (the "Other Jurisdictions"), the laws of such Other Jurisdictions are substantially similar to the laws of the State of New York with respect to the matters relevant to the opinions expressed herein, except where specific opinions of local counsel have been or are being delivered in connection with the closing of the transactions contemplated by the Credit Agreement.
11. The proceeds of the Term Loan B will be applied solely for the purposes described in the Credit Agreement, specifically: (a) the refinancing and repayment in full of the existing Atlas Meridian first lien term loan facility in the approximate amount of $879,375,000; (b) the payment of transaction fees and expenses in the approximate amount of $38,625,000; (c) a dividend distribution to Granite Peak NIH Holdings, LLC in the approximate amount of $335,000,000; and (d) cash to the balance sheet of the Borrower in the approximate amount of $147,000,000.
VI. SCOPE LIMITATIONS
The opinions expressed herein are limited in all respects to:
(a) the federal laws of the United States of America;
(b) the laws of the State of New York;
(c) the General Corporation Law of the State of Delaware (the "DGCL"), as applicable to those Loan Parties organized as corporations under the laws of the State of Delaware; and
(d) the Delaware Limited Liability Company Act (the "DLLCA"), as applicable to those Loan Parties organized as limited liability companies under the laws of the State of Delaware.
We express no opinion as to the laws of any other jurisdiction, including without limitation the laws of the State of Illinois, the Commonwealth of Pennsylvania, the State of South Carolina, the State of Texas, the State of Michigan, the Province of British Columbia, the Province of Ontario, or the federal laws of Canada. With respect to matters of Illinois law and matters of Delaware law relating to entity status, we advise you that the addressees should rely upon the separate opinions being delivered concurrently herewith by:
• Hargrove & Whitmore LLP (Robert Kimura, Lead Partner) — opinion as to matters of Illinois law, including enforceability of the Loan Documents under Illinois law and perfection of security interests under the Illinois Uniform Commercial Code; and
• Briarcliff Legal Group PA (Catherine Ellsworth, Lead Partner) — opinion as to certain matters of Delaware law relating to entity organization, valid existence, good standing, and authority of the Delaware-organized Loan Parties.
[NTD: Coordinating with Hargrove & Whitmore (Robert Kimura) and Briarcliff Legal Group (Catherine Ellsworth) on scope and form of local counsel opinions — see C&H correspondence dated March 12, 2025.]
We express no opinion on the laws of any foreign jurisdiction, including the laws of the Province of British Columbia or the Province of Ontario (applicable to Nexford Canada Holdings ULC and Nexford Canada Manufacturing, Inc., respectively). Neither Nexford Canada Holdings ULC nor Nexford Canada Manufacturing, Inc. is a Loan Party, and no opinion is expressed herein with respect to either such entity.
No opinion is expressed herein with respect to compliance with, or liability under, any federal or state securities laws in connection with the syndication, assignment, or participation of the Term Loan B or any interest therein. The addressees should consult their own counsel with respect to any securities law matters arising in connection with the transactions contemplated by the Credit Agreement.
No opinion is expressed herein with respect to any tax matters, including without limitation any matters arising under the Internal Revenue Code of 1986, as amended, or any state, local, or foreign tax laws. Tax matters relevant to the transactions contemplated by the Credit Agreement are addressed separately by Sylvia Hartwell of Calderwood & Harkness LLP in internal tax memoranda prepared in connection with this engagement. [NTD: Confirm with Sylvia Hartwell whether tax opinions or comfort is required separately from this opinion letter.]
[NTD: Confirm whether Crescent Harbor requires an express opinion on compliance with margin regulations (Regulations T, U, X of the Federal Reserve Board).]
VII. OPINIONS
Based upon and subject to the foregoing and to the qualifications, exceptions, and other limitations set forth herein, we are of the opinion that:
Opinion 1 — Organization and Good Standing (Delaware Entities Only)
Each of the following Loan Parties is a corporation or limited liability company, as indicated below, duly organized, validly existing, and in good standing under the laws of the State of Delaware:
(a) Nexford Industrial Holdings Inc. — a corporation duly organized and validly existing under the DGCL;
(b) Granite Peak NIH Holdings, LLC — a limited liability company duly formed and validly existing under the DLLCA;
(c) Nexford Precision Components, Inc. — a corporation duly organized and validly existing under the DGCL;
(d) Nexford Engineered Systems, LLC — a limited liability company duly formed and validly existing under the DLLCA;
(e) Nexford Coatings & Surface Technologies, Inc. — a corporation duly organized and validly existing under the DGCL;
(f) Nexford Properties, LLC — a limited liability company duly formed and validly existing under the DLLCA; and
(g) Nexford International Holdings, Inc. — a corporation duly organized and validly existing under the DGCL.
This opinion is based upon our review of the certificates of incorporation or certificates of formation, as applicable, of each such Loan Party on file with the Secretary of State of the State of Delaware, the bylaws or limited liability company agreements, as applicable, of each such Loan Party, and certificates of good standing issued by the Secretary of State of the State of Delaware with respect to each such Loan Party dated within five (5) business days of the date hereof. We have made no independent investigation of the status of any such Loan Party beyond our review of such documents and certificates.
Note: Opinions regarding the organization, valid existence, and good standing of each of the following non-Delaware Loan Parties are not expressed herein and are covered by separate opinions of local counsel delivered concurrently herewith, as applicable:
• Nexford Manufacturing Services, LLC (organized under the laws of the State of Illinois)
• Clearfield Tool & Die, Inc. (organized under the laws of the Commonwealth of Pennsylvania)
• Summit Industrial Fabrication Co. (organized under the laws of the State of South Carolina)
• Ridgepoint Specialty Coatings, LLC (organized under the laws of the State of Texas)
• Lakeshore Precision Engineering, Inc. (organized under the laws of the State of Michigan)
Opinion 2 — Corporate / LLC Power and Authority
Each Loan Party has the corporate or limited liability company power and authority, as applicable, to execute, deliver, and perform its obligations under each Loan Document to which it is a party.
Without limiting the generality of the foregoing:
(a) The Borrower has the corporate power and authority to (i) borrow under the Credit Agreement, (ii) grant the security interests and liens contemplated by the Security Agreement, (iii) pledge the equity interests contemplated by the Borrower Pledge Agreement, and (iv) grant the security interests contemplated by the intellectual Property Security Agreement.
(b) The Holdings Guarantor has the limited liability company power and authority to (i) guarantee the Obligations (as defined in the Credit Agreement) pursuant to the Guarantee Agreement and (ii) pledge 100% of its equity interests in the Borrower to the Collateral Agent pursuant to the Holdings Pledge Agreement.
(c) Each Subsidiary Guarantor has the corporate or limited liability company power and authority, as applicable, to (i) guarantee the Obligations pursuant to the Guarantee Agreement and (ii) grant the security interests and pledge the equity interests contemplated by the Security Agreement, the applicable Subsidiary Pledge Agreement(s), and the other Security Documents to which such Subsidiary Guarantor is a party.
Opinion 3 — Due Authorization
The execution, delivery, and performance of each Loan Document by each Loan Party that is a party thereto have been duly authorized by all necessary corporate or limited liability company action, as applicable. Such authorization includes, without limitation:
(a) the resolutions of the Board of Directors of Nexford Industrial Holdings Inc. adopted on January 13, 2025, approving and authorizing the execution, delivery, and performance of the Loan Documents and the consummation of the transactions contemplated thereby, including the borrowing of the Term Loan B, the granting of security interests and liens, and the application of proceeds as described in the Credit Agreement;
(b) the written consent of the managers and/or members of Granite Peak NIH Holdings, LLC adopted on January 13, 2025, approving and authorizing the execution, delivery, and performance of the Loan Documents to which Granite Peak NIH Holdings, LLC is a party, including the Guarantee Agreement and the Holdings Pledge Agreement; and
(c) the resolutions of the board of directors and/or the consents of the managers and/or members, as applicable, of each Subsidiary Guarantor, approving and authorizing the execution, delivery, and performance of the Guarantee Agreement, the Security Agreement, the applicable Subsidiary Pledge Agreement(s), and the other Loan Documents to which such Subsidiary Guarantor is a party.
No further approval, consent, authorization, or other action by any person (including any equityholder, member, manager, director, or officer of any Loan Party) is required for the valid execution, delivery, and performance by each Loan Party of each Loan Document to which it is a party or for the consummation of the transactions contemplated thereby.
Opinion 4 — Due Execution and Delivery
Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto. We have reviewed the incumbency certificates and secretary's certificates delivered by each Loan Party and have confirmed that the individuals who executed the Loan Documents on behalf of the Loan Parties were duly authorized to do so.
Opinion 5 — Enforceability
Each Loan Document constitutes the legal, valid, and binding obligation of each Loan Party that is a signatory thereto, enforceable against such Loan Party in accordance with its terms. This opinion is subject to the Enforceability Qualifications set forth in Section VIII below.
Without limiting the generality of the foregoing, this enforceability opinion covers:
(a) the Credit Agreement (including the obligations of the Borrower to repay principal, interest, fees, and other amounts payable thereunder);
(b) the Guarantee Agreement (including the guarantee obligations of each Guarantor);
(c) the Security Agreement (including the grant of security interests by the Borrower and the Guarantors in the personal property collateral described therein);
(d) the Holdings Pledge Agreement (including the pledge by Granite Peak NIH Holdings, LLC of 100% of its equity interests in the Borrower);
(e) the Borrower Pledge Agreement (including the pledge by the Borrower of 100% of the equity interests in each of its direct domestic subsidiaries);
(f) each Subsidiary Pledge Agreement (including the pledge by each Subsidiary Guarantor of the equity interests described therein);
(g) the CFC Holdco Limited Pledge Agreement (including the pledge by Nexford International Holdings, Inc. of 65% of voting equity and 100% of non-voting equity in Nexford Canada Holdings ULC);
(h) the intellectual Property Security Agreement (including the grant of security interests in registered and unregistered intellectual property); and
(i) the Intercreditor Agreement (as to the obligations of Nexford Industrial Holdings Inc. thereunder).
Opinion 6 — No Conflicts
The execution, delivery, and performance of the Loan Documents by each Loan Party, and the consummation of the transactions contemplated thereby — including the borrowing of $1,400,000,000 under the Term Loan B, the refinancing and repayment in full of the existing Atlas Meridian first lien term loan facility, the dividend distribution to Granite Peak NIH Holdings, LLC, and the granting of security interests and liens in favor of the Collateral Agent — do not and will not:
(a) violate, conflict with, or result in a breach of any provision of the certificate of incorporation, bylaws, certificate of formation, limited liability company agreement, or any other equivalent organizational document of any Loan Party;
(b) violate, conflict with, or constitute a default under, or give rise to any right of termination, acceleration, or cancellation under, any existing law, statute, rule, or regulation of the State of New York or the federal laws of the United States of America applicable to any Loan Party (to the extent such laws are within the scope of this opinion as set forth in Section VI above); or
(c) result in the creation or imposition of any lien, charge, or encumbrance upon any of the assets or properties of any Loan Party, other than the liens and security interests created pursuant to the Security Documents in favor of the Collateral Agent for the benefit of the Secured Parties.
Note: No opinion is expressed herein as to whether the execution, delivery, or performance of the Loan Documents, or the consummation of the transactions contemplated thereby, would violate, conflict with, or constitute a default under the Existing Credit Agreement, the Existing Indenture, or any other contractual obligation of any Loan Party (such instruments being contractual documents and not statutes or regulations within the scope of this opinion). We note, however, that (i) the Existing Credit Agreement is being repaid and terminated concurrently with the closing of the transactions contemplated by the Credit Agreement, and (ii) we have reviewed the Existing Indenture and believe, based on such review, that the transactions contemplated by the Credit Agreement are permissible thereunder, subject to the satisfaction of the applicable conditions set forth in the Existing Indenture (including compliance with the incurrence-based financial covenants and the lien covenant contained therein). Our belief as to the Existing Indenture does not constitute an opinion, and the addressees should make their own determination as to compliance with the Existing Indenture.
Opinion 7 — No Governmental Approvals Required
No authorization, consent, approval, license, qualification, order, or permit of, or registration, declaration, notice, or filing with, any governmental authority of the State of New York or any federal governmental authority of the United States of America is required for the valid execution, delivery, or performance by any Loan Party of any Loan Document to which it is a party, or for the consummation of the transactions contemplated thereby, except for the following:
(a) the filing of UCC-1 Financing Statements with the appropriate filing offices in the applicable filing jurisdictions described in Schedule III hereto, which filings are addressed in Opinion 8 below;
(b) filings with the United States Patent and Trademark Office (the "USPTO") and the United States Copyright Office (the "USCO") to perfect security interests in registered patents, patent applications, trademarks, trademark applications, copyrights, and copyright registrations of the Borrower and the Guarantors, as contemplated by the intellectual Property Security Agreement; and
(c) mortgage recordings in Cook County, Illinois, Winnebago County, Illinois, Greenville County, South Carolina, and Harris County, Texas, which are post-closing deliverables due by April 30, 2025, pursuant to Section [__] of the Credit Agreement, and which are not covered by this opinion letter at closing.
Opinion 8 — Perfection of Security Interests (New York UCC)
(a) Perfection by Filing. Upon the filing of the UCC-1 Financing Statements in the forms reviewed by us with the following filing offices:
(i) the Secretary of State of the State of Delaware (with respect to each of the Delaware-organized Loan Parties, namely Nexford Industrial Holdings Inc., Granite Peak NIH Holdings, LLC, Nexford Precision Components, Inc., Nexford Engineered Systems, LLC, Nexford Coatings & Surface Technologies, Inc., Nexford Properties, LLC, and Nexford International Holdings, Inc.);
(ii) the Secretary of State of the State of Illinois (with respect to Nexford Manufacturing Services, LLC);
(iii) the Department of State of the Commonwealth of Pennsylvania (with respect to Clearfield Tool & Die, Inc.);
(iv) the Secretary of State of the State of South Carolina (with respect to Summit Industrial Fabrication Co.);
(v) the Secretary of State of the State of Texas (with respect to Ridgepoint Specialty Coatings, LLC); and
(vi) the Department of State of the State of Michigan (with respect to Lakeshore Precision Engineering, Inc.),
the Collateral Agent will have a perfected security interest in all personal property collateral of each such Loan Party described in the Security Agreement, to the extent that a security interest therein can be perfected by the filing of a UCC-1 financing statement under Article 9 of the Uniform Commercial Code as in effect in the State of New York (the "NY UCC"). The applicable filing jurisdictions for each Loan Party are set forth on Schedule III hereto.
(b) Perfection by Possession. Upon delivery to the Collateral Agent of (i) the stock certificates and/or membership interest certificates representing the pledged equity interests described in the Holdings Pledge Agreement, the Borrower Pledge Agreement, the Subsidiary Pledge Agreements, and the CFC Holdco Limited Pledge Agreement, in each case endorsed in blank or accompanied by undated stock powers or membership interest powers duly executed in blank, and (ii) any intercompany promissory notes endorsed to the order of the Collateral Agent, the Collateral Agent will have a perfected security interest in such items of collateral to the extent that perfection thereof can be achieved by possession under Article 9 of the NY UCC.
(c) Perfection by Control. The deposit account control agreements and securities account control agreements described in the Security Agreement, when executed and effective in accordance with their respective terms, will perfect the Collateral Agent's security interest in the covered deposit accounts and securities accounts, respectively, by "control" as defined in Sections 9-104 and 9-106 of the NY UCC.
(d) Priority. The security interests created under the Security Documents, when perfected as described in paragraphs (a), (b), and (c) above, will constitute first-priority security interests, subject to (i) liens permitted under the terms of the Credit Agreement (including Permitted Liens as defined therein), (ii) statutory liens, tax liens, and liens arising by operation of law that are accorded priority under applicable law, and (iii) the terms and provisions of the Intercreditor Agreement, which may affect the relative priority, enforcement, and exercise of remedies with respect to the collateral.
(e) CFC Holdco Limitation. We note that the pledge of equity interests in Nexford Canada Holdings ULC pursuant to the CFC Holdco Limited Pledge Agreement is limited to 65% of the issued and outstanding voting equity interests and 100% of the issued and outstanding non-voting equity interests in Nexford Canada Holdings ULC. This limitation is consistent with standard market practice for leveraged finance transactions to avoid adverse United States federal income tax consequences under Sections 956 and 1248 of the Internal Revenue Code of 1986, as amended. We express no opinion as to any tax matters in connection with such limitation.
Opinion 9 — Investment Company Act
None of the Loan Parties is, or upon the consummation of the transactions contemplated by the Credit Agreement and the application of the proceeds of the Term Loan B as described therein will be, required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
Opinion 10 — Usury
The terms of the Credit Agreement relating to interest, fees, and other charges — including the interest rate margin of SOFR plus 400 basis points per annum, the SOFR floor of 0.75% per annum, the default rate of an additional 200 basis points per annum, the original issue discount, and the commitment fees, letter of credit fees, and other fees set forth in the Credit Agreement and any related fee letters — do not violate the applicable usury laws of the State of New York, subject to and in reliance upon the choice-of-law provisions contained in the Credit Agreement and the provisions of Section 5-501 of the New York General Obligations Law and Section 14-a of the New York Banking Law.
[NTD: Review whether opinion on change of control provision enforceability is requested by W&G.]
[NTD: Consider whether to include an express disclaimer regarding most favored nation provision enforceability, as this clause has not been extensively litigated.]
VIII. ENFORCEABILITY QUALIFICATIONS
The enforceability opinions set forth in Opinion 5 above and, to the extent applicable, each other opinion set forth in Section VII above, are subject to the following qualifications (collectively, the "Enforceability Qualifications"):
1. Bankruptcy and Insolvency Exception. The enforceability of the Loan Documents may be limited by applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance, fraudulent transfer, preference, and other similar laws affecting the enforcement of creditors' rights generally from time to time in effect, including without limitation Title 11 of the United States Code (the "Bankruptcy Code"), and by general principles of debtor relief and the discretion of courts in granting equitable remedies in bankruptcy and insolvency proceedings.
2. Equitable Principles Exception. The enforceability of the Loan Documents is subject to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing, and the possible unavailability of specific performance or injunctive relief), regardless of whether such enforceability is considered in a proceeding in equity or at law. The application of equitable principles is within the discretion of the court before which any such proceeding may be brought.
3. Fraudulent Transfer / Fraudulent Conveyance. The guarantee obligations of the Guarantors under the Guarantee Agreement and the security interests created by the Guarantors under the Security Documents may be subject to avoidance, subordination, or limitation under applicable fraudulent transfer and fraudulent conveyance statutes, including without limitation Sections 544(b) and 548 of the Bankruptcy Code, the Uniform Fraudulent Transfer Act (or the Uniform Voidable Transactions Act, as applicable), and applicable state fraudulent conveyance statutes. We note that the Guarantee Agreement contains "savings clauses" intended to limit each Guarantor's liability to the maximum amount that could be guaranteed by such Guarantor without rendering its guarantee obligation voidable under applicable fraudulent transfer or fraudulent conveyance laws. The effectiveness of such savings clauses has been the subject of differing judicial interpretations, and we express no opinion as to whether such savings clauses would be given effect by a court in any particular case.
4. Solvency. The enforceability of the guarantee obligations of each Guarantor under the Guarantee Agreement depends in part upon the solvency of such Guarantor at the time such guarantee obligations are incurred and upon whether such Guarantor received reasonably equivalent value or fair consideration in exchange for incurring such obligations. We note that the Solvency Certificate dated March 28, 2025, executed by Michelle Kaplan, Chief Financial Officer of the Borrower, has been delivered in connection with the closing of the transactions contemplated by the Credit Agreement, and we have assumed the accuracy and completeness of the certifications set forth therein without independent verification.
5. Indemnification and Contribution. Provisions of the Loan Documents relating to indemnification, contribution, or exculpation may be limited or rendered unenforceable by public policy considerations, including without limitation applicable provisions of the Securities Act of 1933, as amended, or other applicable law that may prohibit indemnification for liabilities arising from certain types of misconduct, negligence, or violations of law.
6. Waivers. Certain waivers contained in the Loan Documents — including, without limitation, waivers of rights to trial by jury, waivers of rights of setoff, waivers of notice, waivers of statutes of limitations defenses, waivers of marshaling, waivers of stay, extension, or usury laws, and waivers of other rights and defenses — may be unenforceable in whole or in part to the extent that a court determines such waivers to be contrary to public policy or otherwise unenforceable under applicable law. We note that the enforceability of jury trial waivers in New York is generally upheld where such waivers are knowing, voluntary, and intentional, but we express no opinion as to the enforceability of such waivers in any particular proceeding or jurisdiction.
7. Choice of Law / Forum Selection. The enforceability of the New York governing law clause and the New York forum selection clause contained in the Loan Documents may be limited if a court of competent jurisdiction determines that another jurisdiction has a materially greater interest in, or a more significant relationship to, the parties or the transactions contemplated by the Loan Documents, or if enforcement of such clauses would violate a strong public policy of a competing jurisdiction. We note, however, that Section 5-1401 of the New York General Obligations Law provides that the parties to any contract, agreement, or undertaking for a transaction covering in the aggregate not less than $250,000 may agree that the law of the State of New York shall govern their rights and duties, and that Section 5-1402 of the New York General Obligations Law provides for the enforceability of forum selection clauses in actions arising out of such transactions. In light of the aggregate amount of the transactions contemplated by the Credit Agreement (which substantially exceeds $250,000), we believe that Sections 5-1401 and 5-1402 would generally be applicable to the choice of law and forum selection provisions of the Loan Documents.
8. Specific Performance and Injunctive Relief. The remedies of specific performance and injunctive relief are equitable in nature and discretionary, and a court may decline to grant such remedies. There can be no assurance that a court would grant specific performance or injunctive relief in any particular case arising under the Loan Documents.