OPINION BACK-UP CERTIFICATE OF NEXFORD INDUSTRIAL HOLDINGS INC.
Delivered Pursuant to Section 4.01(a)(viii) of the Credit Agreement
March 28, 2025
OPINION BACK-UP CERTIFICATE OF NEXFORD INDUSTRIAL HOLDINGS INC.
This Opinion Back-Up Certificate (this "Certificate") is delivered in connection with that certain Credit Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Nexford Industrial Holdings Inc., a Delaware corporation (the "Borrower"), the Guarantors party thereto from time to time, Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent (in such capacities, the "Administrative Agent" and the "Collateral Agent," respectively), Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners, and the several banks and other financial institutions or entities from time to time party thereto as Lenders (collectively, the "Lenders"), providing for, among other things, a senior secured Term Loan B facility in an aggregate principal amount of $1,400,000,000 (the "Term Loan B Facility").
This Certificate is delivered to Calderwood & Harkness LLP, 425 Lexington Avenue, New York, New York 10017 ("Borrower's Counsel"), in connection with Borrower's Counsel's delivery of certain legal opinions (the "Opinions") to the Administrative Agent, on behalf of the Secured Parties, on the date hereof with respect to the Borrower and the Guarantors and the transactions contemplated by the Credit Agreement and the other Transaction Documents (as defined below).
This Certificate is executed and delivered by David Engstrom, in his capacity as General Counsel & Corporate Secretary of Nexford Industrial Holdings Inc.
RECITALS
Reference is made to the Credit Agreement, the Guarantee Agreement dated as of the date hereof (the "Guarantee Agreement"), the Security Agreement dated as of the date hereof (the "Security Agreement"), the Pledge Agreements dated as of the date hereof (collectively, the "Pledge Agreements"), the intellectual Property Security Agreement dated as of the date hereof (the "IP Security Agreement"), the Intercreditor Agreement dated as of the date hereof (the "Intercreditor Agreement"), and each of the other Loan Documents (as defined in the Credit Agreement) executed and delivered on or prior to the date hereof in connection with the Credit Agreement (all of the foregoing, collectively, the "Transaction Documents").
The undersigned, David Engstrom, is the duly authorized General Counsel & Corporate Secretary of Nexford Industrial Holdings Inc. and is delivering this Certificate on behalf of the Borrower and each of the Guarantors identified herein (collectively with the Borrower, the "Loan Parties") for the purpose of providing factual representations and certifications upon which Borrower's Counsel may rely in rendering the Opinions dated the date hereof addressed to Crescent Harbor Bank, N.A., as Administrative Agent, for the benefit of the Secured Parties (as defined in the Credit Agreement).
The undersigned has made such investigations and inquiries as he deems necessary and appropriate to certify the matters set forth herein, including a review of the organizational documents of each Loan Party, the minute books and records of each Loan Party, the Transaction Documents, and such other documents, records, and instruments as the undersigned deemed relevant or appropriate in connection with the certifications and representations set forth below.
Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Credit Agreement.
NOW, THEREFORE, the undersigned hereby certifies and represents to Borrower's Counsel, for the benefit of the Administrative Agent and the Secured Parties, as follows:
SECTION 1: ORGANIZATION AND GOOD STANDING
1.1 Borrower Organization.
Nexford Industrial Holdings Inc. (the "Borrower") is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Borrower was originally incorporated in the State of Delaware in 1987 and has been continuously in existence since such date. The following information is true, correct, and complete with respect to the Borrower as of the date hereof:
(a) State of Incorporation: Delaware
(b) Delaware File Number: 5765432
(c) Federal Employer Identification Number (EIN): 36-4178552
(d) Registered Agent in Delaware: Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801
(e) Principal Place of Business / Chief Executive Office: 1400 Industrial Parkway, Schaumburg, IL 60173
(f) Date of Incorporation: 1987
The Borrower is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction where the character of the properties owned, leased, or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect. As of the date hereof, the Borrower is qualified to transact business as a foreign corporation in, among other jurisdictions, Illinois, Pennsylvania, South Carolina, Texas, Michigan, Ohio, Indiana, and California.
1.2 Holdings Guarantor Organization.
Granite Peak NIH Holdings, LLC ("Holdings") is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. The following information is true, correct, and complete with respect to Holdings as of the date hereof:
(a) State of Organization: Delaware
(b) Delaware File Number: 7234891
(c) Federal Employer Identification Number (EIN): 85-3291047
(d) Registered Agent and Address in Delaware: c/o Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801
(e) Granite Peak NIH Holdings, LLC is the direct parent and 100% owner of all of the issued and outstanding equity interests of Nexford Industrial Holdings Inc.
Holdings has been continuously in existence since its date of formation and has full limited liability company power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
1.3 Subsidiary Guarantors Organization.
Each of the following entities (each, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors") is duly organized, validly existing, and in good standing under the laws of its respective jurisdiction of organization set forth below:
Each Subsidiary Guarantor has been continuously in existence since its respective date of organization or incorporation and has full corporate or limited liability company power and authority (as applicable) to own, lease, and operate its properties and to conduct its business as presently conducted. Each Subsidiary Guarantor is duly qualified to transact business and is in good standing as a foreign corporation or limited liability company (as applicable) in each jurisdiction where the character of the properties owned, leased, or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.
1.4 Excluded Foreign Subsidiaries.
The following entities are subsidiaries of the Borrower but are not Loan Parties and are not Guarantors under any of the Transaction Documents:
(a) Nexford Canada Holdings ULC, an unlimited liability company organized under the laws of the Province of British Columbia, Canada; and
(b) Nexford Canada Manufacturing, Inc., a corporation incorporated under the laws of the Province of Ontario, Canada.
These entities are "Excluded Subsidiaries" as defined in the Credit Agreement and are not required to guarantee the obligations of the Borrower or grant security interests in their assets under the terms of the Transaction Documents.
SECTION 2: AUTHORITY AND AUTHORIZATION
2.1 Borrower Authority.
The Borrower has full corporate power and authority to execute, deliver, and perform its obligations under each Transaction Document to which it is a party, including, without limitation, the Credit Agreement, the Security Agreement, the Pledge Agreements, the IP Security Agreement, and each other Loan Document to which the Borrower is a party.
The Board of Directors of the Borrower, at a meeting duly called and held on January 13, 2025, at which a quorum was present and acting throughout, duly adopted resolutions authorizing (a) the incurrence of indebtedness under the $1,400,000,000 Term Loan B Facility, (b) the dividend recapitalization transaction contemplated in connection therewith, (c) the refinancing and repayment in full of all outstanding indebtedness under the Existing Credit Agreement (as defined below), (d) the granting of liens and security interests in the assets of the Borrower to secure the obligations under the Credit Agreement and the other Transaction Documents, (e) the execution, delivery, and performance by the Borrower of each of the Transaction Documents to which the Borrower is or will be a party, and (f) the authorization of each of the officers of the Borrower identified therein to execute and deliver, on behalf of the Borrower, any and all documents, instruments, certificates, and agreements as may be necessary or desirable in connection with the foregoing.
Such resolutions have not been amended, modified, supplemented, revoked, or rescinded in any respect and remain in full force and effect as of the date hereof. No other corporate action on the part of the Borrower or its stockholders is necessary to authorize the execution, delivery, and performance of the Transaction Documents by the Borrower.
2.2 Holdings Guarantor Authority.
Granite Peak NIH Holdings, LLC has full limited liability company power and authority to execute, deliver, and perform its obligations under each Transaction Document to which it is a party, including, without limitation, the Guarantee Agreement, the Pledge Agreements (including the pledge of 100% of the equity interests in the Borrower), and each other Loan Document to which Holdings is a party.
The managing member of Granite Peak NIH Holdings, LLC, acting pursuant to the authority granted under the Amended and Restated Limited Liability Company Agreement of Granite Peak NIH Holdings, LLC dated as of March 15, 2019 (as amended), duly adopted written consents dated January 13, 2025, authorizing (a) the guarantee by Holdings of the obligations of the Borrower under the Credit Agreement and the other Transaction Documents, (b) the pledge by Holdings of 100% of the equity interests in the Borrower pursuant to the Pledge Agreements, (c) the execution, delivery, and performance by Holdings of each of the Transaction Documents to which Holdings is or will be a party, and (d) the authorization of such persons as identified therein to execute and deliver, on behalf of Holdings, any and all documents, instruments, certificates, and agreements as may be necessary or desirable in connection with the foregoing.
Such written consents have not been amended, modified, supplemented, revoked, or rescinded in any respect and remain in full force and effect as of the date hereof. No other limited liability company action on the part of Holdings or its members is necessary to authorize the execution, delivery, and performance of the Transaction Documents by Holdings.
2.3 Subsidiary Guarantor Authority.
Each Subsidiary Guarantor has full corporate or limited liability company power and authority (as applicable) to execute, deliver, and perform its obligations under the Guarantee Agreement, the Security Agreement, the Pledge Agreements, and each other Transaction Document to which such Subsidiary Guarantor is a party.
The board of directors (in the case of Subsidiary Guarantors organized as corporations) or the managing member or members (in the case of Subsidiary Guarantors organized as limited liability companies) of each Subsidiary Guarantor has duly authorized the execution, delivery, and performance by such Subsidiary Guarantor of each Transaction Document to which such Subsidiary Guarantor is a party, including, without limitation, the guaranteeing of the obligations of the Borrower under the Credit Agreement and the granting of liens and security interests in the assets of such Subsidiary Guarantor to secure the guaranteed obligations. In each case, such authorizations were duly adopted, have not been amended, modified, supplemented, revoked, or rescinded, and remain in full force and effect as of the date hereof.
2.4 Authorized Signatories.
Each person who has executed or will execute any Transaction Document on behalf of any Loan Party as of the date hereof is, or at the time of such execution was, duly authorized to do so by all necessary corporate or limited liability company action (as applicable). The authority of each such signatory is reflected in the incumbency certificates and secretary's or officer's certificates delivered by each Loan Party on or prior to the date hereof in connection with the closing of the transactions contemplated by the Transaction Documents.
Without limiting the generality of the foregoing, the following individuals are duly authorized signatories of the Borrower, each having authority to execute and deliver any and all Transaction Documents and related certificates, instruments, and agreements on behalf of the Borrower:
(a) James Thornton, Chief Executive Officer;
(b) Michelle Kaplan, Chief Financial Officer; and
(c) David Engstrom, General Counsel & Corporate Secretary.
The true signatures of each of the foregoing individuals are set forth in the incumbency certificate delivered by the Borrower on the date hereof.
SECTION 3: NO CONFLICTS
3.1 Organizational Documents.
The execution, delivery, and performance by each Loan Party of each Transaction Document to which such Loan Party is a party, and the consummation of the transactions contemplated thereby, do not and will not (a) violate, conflict with, or result in a breach of any provision of the certificate of incorporation, certificate of formation, bylaws, limited liability company agreement, or other organizational or governing documents of such Loan Party, (b) result in the creation or imposition of any lien on any property or assets of such Loan Party under any such organizational or governing documents (other than liens created pursuant to the Transaction Documents), or (c) require any consent, approval, or other action by the stockholders, members, or other equity holders of any Loan Party that has not already been duly obtained.
The undersigned has reviewed the organizational and governing documents of each Loan Party, including all amendments thereto, and confirms that no provision of any such document prohibits, restricts, or imposes conditions on the ability of any Loan Party to execute, deliver, or perform its obligations under any Transaction Document, to guarantee the obligations of the Borrower, or to grant liens and security interests in its assets.
3.2 Existing Agreements.
The execution, delivery, and performance by each Loan Party of each Transaction Document to which such Loan Party is a party, and the consummation of the transactions contemplated thereby, do not and will not:
(a) violate, conflict with, or result in a breach of, or constitute a default (or an event which, with the giving of notice or lapse of time or both, would constitute a default) under, any material agreement, indenture, mortgage, deed of trust, lease, license, instrument, or other contractual obligation to which any Loan Party is a party or by which any Loan Party or any of its properties or assets may be bound or affected; or
(b) result in the creation or imposition of any lien, charge, pledge, security interest, or other encumbrance of any nature whatsoever on any property or asset of any Loan Party (other than liens and security interests created by or pursuant to the Transaction Documents).
Without limiting the generality of the foregoing, the undersigned specifically certifies the following with respect to the following material agreements:
(i) Senior Unsecured Notes. With respect to the Indenture dated as of November 8, 2021 (as supplemented by any supplemental indentures thereto, the "Indenture"), among Nexford Industrial Holdings Inc., as issuer, the guarantors party thereto, and Pinnacle Trust Company, as Trustee, governing the $250,000,000 aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 (the "Senior Notes"), the transactions contemplated by the Transaction Documents, including the incurrence of indebtedness under the Term Loan B Facility, the granting of liens to secure such indebtedness, the refinancing of the indebtedness under the Existing Credit Agreement, and the payment of the dividend to Holdings, do not violate, conflict with, or result in a default or event of default under the Indenture or the Senior Notes. The undersigned has confirmed that the incurrence of indebtedness under the Term Loan B Facility is permitted under the covenants contained in the Indenture, including the incurrence covenant set forth in Section 4.09 thereof, and that the granting of liens to secure the obligations under the Credit Agreement and the other Transaction Documents is permitted under the liens covenant set forth in Section 4.12 thereof.
(ii) Existing Credit Agreement. With respect to the Credit Agreement dated as of June 14, 2019 (as amended by the First Amendment dated as of February 7, 2020, the Second Amendment dated as of August 19, 2021, the Third Amendment dated as of March 3, 2023, and the Fourth Amendment dated as of September 12, 2024, collectively as so amended, the "Existing Credit Agreement"), among Nexford Industrial Holdings Inc., as borrower, Atlas Meridian Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto, the outstanding term loan and revolving credit facilities under the Existing Credit Agreement are being repaid in full on the date hereof simultaneously with the initial borrowing under the Term Loan B Facility. Specifically, all outstanding principal, accrued and unpaid interest, and any other amounts owing under the Existing Credit Agreement will be paid in full on the date hereof, the commitments of the revolving lenders under the existing $190,000,000 revolving credit facility (which is currently undrawn) will be terminated, and all liens and security interests in favor of Atlas Meridian Bank, N.A., as collateral agent under the Existing Credit Agreement, will be released, terminated, and discharged. Payoff letters and lien release documentation have been or will be delivered on the date hereof.
3.3 Court Orders and Judgments.
The execution, delivery, and performance by each Loan Party of each Transaction Document to which such Loan Party is a party, and the consummation of the transactions contemplated thereby, do not and will not violate, contravene, or conflict with any order, judgment, injunction, writ, decree, stipulation, or award of any court, tribunal, governmental authority, or arbitrator that is binding on any Loan Party or any of its properties or assets. No Loan Party is subject to any order, judgment, injunction, or decree that would prohibit or restrict its ability to enter into or perform its obligations under any Transaction Document.
SECTION 4: GOVERNMENTAL APPROVALS AND CONSENTS
No consent, approval, authorization, order, registration, filing, or qualification of or with any federal, state, local, or foreign court, governmental agency, regulatory authority, or other governmental body (collectively, "Governmental Authorities") is required to be obtained or made by any Loan Party in connection with the execution, delivery, or performance of any Transaction Document, or the consummation of the transactions contemplated thereby, except for the following:
(a) the filing of UCC-1 financing statements (and, to the extent applicable, UCC-3 amendment or continuation statements) with the applicable filing offices in the States of Delaware, Illinois, Pennsylvania, South Carolina, Texas, and Michigan, as applicable to each Loan Party;
(b) the recording of mortgages, deeds of trust, and related instruments in the following counties: Cook County, Illinois; Winnebago County, Illinois; Greenville County, South Carolina; and Harris County, Texas, which mortgages and related instruments are post-closing deliverables required to be delivered on or before April 30, 2025, pursuant to Section 6.14 of the Credit Agreement;
(c) filings with the United States Patent and Trademark Office ("USPTO") and/or the United States Copyright Office with respect to the security interests in intellectual property granted pursuant to the IP Security Agreement, including the filing of short-form security agreements covering registered patents, patent applications, registered trademarks, trademark applications, and registered copyrights;
(d) such other filings, recordings, registrations, and notices as are customary in connection with transactions of the type contemplated by the Transaction Documents and which will be made on or promptly following the date hereof in the ordinary course; and
(e) filings and reports that may be required under applicable securities laws in connection with the incurrence of indebtedness, which filings, if any, will be made in due course.
To the knowledge of the undersigned, all filings described in clause (a) above are being made on or prior to the date hereof, and the filings described in clauses (b) and (c) above will be made within the time periods prescribed by the Credit Agreement and the other Transaction Documents.
SECTION 5: COMPLIANCE WITH LAWS
5.1 General Legal Compliance.
Each Loan Party is in compliance in all material respects with all applicable laws, statutes, rules, regulations, ordinances, codes, orders, judgments, decrees, and requirements of all Governmental Authorities applicable to it, its business, its properties, and its assets, except where the failure to be in such compliance would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, each Loan Party is in compliance in all material respects with all applicable environmental laws, occupational health and safety laws, labor and employment laws, tax laws, data privacy laws, and product safety and consumer protection laws.
5.2 Sanctions and OFAC Compliance.
No Loan Party, nor any director, officer, or employee of any Loan Party, nor, to the knowledge of the undersigned after due inquiry, any agent of any Loan Party acting in any capacity in connection with the Transaction Documents or the transactions contemplated thereby, is a Sanctioned Person (as defined in the Credit Agreement). For purposes of this Certificate, the term "Sanctioned Person" includes any person that is (a) the subject or target of any sanctions administered or enforced by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty's Treasury of the United Kingdom, or any other relevant sanctions authority (collectively, "Sanctions"), or (b) located, organized, or resident in a country or territory that is, or whose government is, the subject of comprehensive Sanctions (each, a "Sanctioned Country"), which, as of the date hereof, include Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine.
No Loan Party is located, organized, or resident in a Sanctioned Country. The proceeds of the Term Loan B Facility will not be used, directly or indirectly, and the Borrower will not lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person, (i) to fund or facilitate any activities of or business with any person that, at the time of such funding, is a Sanctioned Person, (ii) to fund or facilitate any activities of or business in any Sanctioned Country, or (iii) in any other manner that would result in a violation of any Sanctions by any person (including any person participating in the transactions contemplated by the Transaction Documents, whether as Lender, Administrative Agent, Arranger, or otherwise).
5.3 Anti-Corruption and Anti-Money Laundering Compliance.
Each Loan Party is in compliance in all material respects with all applicable anti-corruption laws, including the United States Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), the U.K. Bribery Act 2010, and any other applicable anti-bribery or anti-corruption legislation. Each Loan Party has instituted and maintains policies and procedures designed to ensure compliance by such Loan Party and its respective directors, officers, employees, and agents with the FCPA and other applicable anti-corruption laws.
Each Loan Party is in compliance in all material respects with all applicable anti-money laundering laws and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act"), the Bank Secrecy Act of 1970, as amended, and the regulations promulgated by the Financial Crimes Enforcement Network ("FinCEN") thereunder.
No proceeds of the Term Loan B Facility will be used, directly or indirectly, for any purpose that would violate any applicable anti-corruption laws, including the FCPA, or any applicable anti-money laundering laws, including the USA PATRIOT Act.
5.4 Regulatory Compliance.
No Loan Party is:
(a) an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended;
(b) subject to regulation under the Federal Power Act, as amended;
(c) subject to regulation under the Interstate Commerce Act, as amended, or any successor statute; or
(d) subject to regulation under any other federal or state statute or regulation that would restrict or limit its ability to incur indebtedness, guarantee indebtedness, or grant liens or security interests in its assets as contemplated by the Transaction Documents.
SECTION 6: LITIGATION AND PROCEEDINGS
There is no action, suit, proceeding, claim, investigation, inquiry, or litigation pending or, to the knowledge of the undersigned after due inquiry, threatened in writing against or affecting any Loan Party, any of its properties or assets, or any of its directors, officers, or employees (in their capacities as such) before or by any court, Governmental Authority, arbitral tribunal, or other adjudicatory body that:
(a) challenges or seeks to prevent, enjoin, alter, or materially delay the consummation of any of the transactions contemplated by the Transaction Documents, or seeks damages in connection with any such transaction; or
(b) individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
There is no order, judgment, decree, injunction, stipulation, or consent order of or with any court, Governmental Authority, or arbitral tribunal to which any Loan Party is subject that could reasonably be expected to have a Material Adverse Effect.
SECTION 7: EQUITY OWNERSHIP AND CAPITAL STRUCTURE
7.1 Borrower Equity.
Nexford Industrial Holdings Inc. is a direct, wholly-owned subsidiary of Granite Peak NIH Holdings, LLC. All of the issued and outstanding shares of capital stock of the Borrower (consisting of 1,000 shares of common stock, par value $0.01 per share) are owned beneficially and of record by Holdings, free and clear of all liens, pledges, security interests, claims, options, charges, and other encumbrances of any nature whatsoever, other than liens created by or pursuant to the Transaction Documents (including the pledge of such equity interests pursuant to the Pledge Agreements). There are no outstanding options, warrants, conversion rights, rights of exchange, subscription rights, or other rights, agreements, or commitments obligating the Borrower to issue, sell, or transfer any additional shares of its capital stock or other equity interests.
7.2 Holdings Equity.
Granite Peak NIH Holdings, LLC is owned as follows:
(a) Granite Peak Capital Fund IV, LP — 92% of the outstanding membership interests; and
(b) GP Fund IV Co-Invest, LP — 8% of the outstanding membership interests.
The general partner of Granite Peak Capital Fund IV, LP is Granite Peak Capital GP IV, LLC, a Delaware limited liability company. The limited partnership interests of Granite Peak Capital Fund IV, LP and GP Fund IV Co-Invest, LP are not pledged as collateral under the Transaction Documents.
7.3 Subsidiary Equity.
Schedule A attached hereto sets forth, as of the date hereof, the equity ownership of each direct and indirect subsidiary of the Borrower, including the full legal name of each such subsidiary, the entity type and jurisdiction of organization of each such subsidiary, the percentage of equity interests owned and the identity of the direct owner thereof, and whether such entity is a Guarantor under the Transaction Documents.
All equity interests of each Subsidiary Guarantor that is organized as a corporation are duly authorized, validly issued, fully paid, and non-assessable. All equity interests of each Subsidiary Guarantor that is organized as a limited liability company are validly issued in accordance with the terms of the applicable limited liability company agreement. All such equity interests are owned free and clear of all liens, pledges, security interests, claims, options, charges, and other encumbrances of any nature whatsoever, other than liens created by or pursuant to the Transaction Documents (including the pledge of such equity interests pursuant to the Pledge Agreements and the Security Agreement). There are no outstanding options, warrants, conversion rights, rights of exchange, subscription rights, or other rights, agreements, or commitments obligating any Subsidiary Guarantor to issue, sell, or transfer any additional equity interests.
In the case of Nexford International Holdings, Inc. (the CFC Holdco), 100% of the equity interests therein have been pledged to the Collateral Agent pursuant to the Pledge Agreements. With respect to the equity interests of the Canadian subsidiaries held by Nexford International Holdings, Inc., only 65% of the voting equity interests of each such first-tier foreign subsidiary have been pledged to the Collateral Agent pursuant to the Pledge Agreements, consistent with the limitations set forth in the Credit Agreement.
SECTION 8: SOLVENCY
The undersigned hereby certifies that a separate Solvency Certificate has been executed and delivered on the date hereof by Michelle Kaplan, in her capacity as Chief Financial Officer of Nexford Industrial Holdings Inc. (the "Solvency Certificate"), certifying that, after giving effect to the transactions contemplated by the Transaction Documents (including the incurrence of indebtedness under the Term Loan B Facility, the refinancing and repayment in full of indebtedness under the Existing Credit Agreement, and the payment of the dividend to Holdings), the Borrower and its subsidiaries, on a consolidated basis, are Solvent (as defined in the Credit Agreement). The Solvency Certificate has been delivered to the Administrative Agent and to Borrower's Counsel and is incorporated herein by reference. The undersigned has no reason to believe that any of the certifications set forth in the Solvency Certificate are inaccurate or incomplete in any material respect.
SECTION 9: USE OF PROCEEDS
The proceeds of the $1,400,000,000 Term Loan B Facility will be used solely for the following purposes:
The total sources of funds for the transactions contemplated by the Credit Agreement are as follows:
Total sources equal total uses. No proceeds of the Term Loan B Facility will be used, directly or indirectly, (a) for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, (b) in violation of any applicable Sanctions, or (c) in violation of any applicable anti-corruption or anti-money laundering laws.
SECTION 10: MATERIAL ADVERSE EFFECT
Since December 31, 2024, which is the date of the most recent audited consolidated financial statements of the Borrower and its subsidiaries delivered to the Administrative Agent and to Borrower's Counsel, there has been no event, circumstance, development, change, occurrence, or condition that has had or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (as defined in the Credit Agreement). Without limiting the generality of the foregoing, since December 31, 2024, there has been no material adverse change in the business, operations, properties, assets, liabilities, condition (financial or otherwise), or prospects of the Borrower and its subsidiaries, taken as a whole.
SECTION 11: COLLATERAL MATTERS
11.1 Personal Property Collateral.
The descriptions of collateral set forth in the Security Agreement, the Pledge Agreements, and the IP Security Agreement accurately describe in all material respects substantially all of the personal property assets of each Loan Party that are required to be subject to a lien and security interest in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to the terms of the Credit Agreement and the other Transaction Documents.
No Loan Party has any place of business, warehouse, or other location at which tangible personal property with an aggregate fair market value in excess of $2,500,000 is kept, stored, or maintained other than as disclosed in the schedules to the Security Agreement and the Credit Agreement. The chief executive office and principal place of business of each Loan Party is as set forth in the schedules to the Security Agreement and the Credit Agreement.
Each Loan Party's exact legal name, as such name appears in its certificate of incorporation, certificate of formation, or other organizational document, is as set forth in the Security Agreement and the schedules thereto. No Loan Party has changed its legal name, state of organization, or organizational identification number within the five years preceding the date hereof, except as disclosed in the schedules to the Security Agreement.
11.2 Real Property.
Schedule B attached hereto sets forth each parcel of real property owned in fee simple by any Loan Party with a fair market value in excess of $10,000,000 (each, a "Mortgaged Property"). The following is a summary of the Mortgaged Properties:
The total appraised value of real property collateral is $193,000,000. Appraisals were conducted by independent MAI-certified appraisers within the 90-day period preceding the date hereof and copies thereof have been delivered to the Administrative Agent and Borrower's Counsel.
Mortgages, deeds of trust, and related instruments (including environmental indemnity agreements and assignments of leases and rents) with respect to each Mortgaged Property are post-closing deliverables required to be executed and delivered on or before April 30, 2025, pursuant to Section 6.14 of the Credit Agreement. Lender's title insurance policies for each Mortgaged Property are to be issued by Landmark Title Assurance Company. ALTA/NSPS surveys for each Mortgaged Property have been ordered and are expected to be delivered prior to the post-closing delivery deadline.
11.3 intellectual Property.
The Loan Parties own or have valid and enforceable rights to use all patents, trademarks, service marks, trade names, copyrights, trade secrets, proprietary technology, and other intellectual property that is material to the conduct of their respective businesses as presently conducted. No claim has been asserted in writing against any Loan Party, or to the knowledge of the undersigned is threatened in writing against any Loan Party, that challenges the validity, enforceability, or ownership of any Loan Party's rights in any such intellectual property in a manner that could reasonably be expected to have a Material Adverse Effect. To the knowledge of the undersigned, no Loan Party is infringing, misappropriating, or otherwise violating the intellectual property rights of any third party in a manner that could reasonably be expected to have a Material Adverse Effect.
11.4 Deposit and Securities Accounts.
Schedule C attached hereto sets forth all deposit accounts and securities accounts maintained by any Loan Party as of the date hereof, including the name of the financial institution at which each such account is maintained, the type of account, and the last four digits of the applicable account number.
The Loan Parties maintain the following principal accounts:
(a) deposit accounts at Crescent Harbor Bank, N.A. (as specified in Schedule C);
(b) operating accounts at Redstone National Bank, including accounts ending in -4471, -4472, and -6633; and
(c) such other accounts as are identified in Schedule C.
Deposit account control agreements and securities account control agreements in favor of the Collateral Agent, in form and substance reasonably satisfactory to the Administrative Agent, have been duly executed and delivered as of the date hereof with respect to each deposit account and securities account required to be subject to a control agreement under the terms of the Credit Agreement and the Security Agreement.
SECTION 12: INSURANCE
The Loan Parties maintain insurance coverage with financially sound and reputable insurance companies in such amounts and covering such risks as are customary for companies of similar size engaged in the same or similar businesses operating in the same or similar locations, and in any event in compliance with the requirements set forth in Section 6.07 of the Credit Agreement. The Loan Parties maintain, among other coverages, commercial general liability insurance, property and casualty insurance (including coverage for fire, flood, windstorm, and other perils), workers' compensation insurance, umbrella/excess liability insurance, business interruption insurance, and pollution legal liability insurance.
The following is a summary of key insurance providers:
(a) Property & Casualty Insurance Carrier: Continental Shield Underwriters, Inc.
(b) Directors' & Officers' Liability Insurance Carrier: Meridian Specialty Insurance Co.
(c) Insurance Broker: Vantage Risk Advisors, LLC (Account Executive: Rachel Sorensen)
Evidence of insurance, including certificates of insurance and copies of applicable endorsements naming the Collateral Agent as additional insured, mortgagee, and/or loss payee (as applicable), has been delivered to the Administrative Agent and Borrower's Counsel on or prior to the date hereof.
SECTION 13: TAX MATTERS
Each Loan Party has timely filed (taking into account all applicable extensions) all federal, state, local, and foreign income and other material tax returns, reports, and declarations required to be filed by it, and has paid all taxes, assessments, fees, and other governmental charges due and payable by it, except (a) where the failure to file or pay would not reasonably be expected to have a Material Adverse Effect, or (b) where such taxes are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves in accordance with GAAP have been established on the books of the applicable Loan Party. No Loan Party has received written notice of any proposed tax assessment, deficiency, or adjustment from any taxing authority that could reasonably be expected to have a Material Adverse Effect.
The following additional tax-related information is certified with respect to the Borrower:
(a) Fiscal Year End: December 31
(b) State of Tax Residence: Illinois
(c) Federal Employer Identification Number (EIN): 36-4178552
(d) The Borrower files a consolidated federal income tax return.
SECTION 14: NO DEFAULT
No Event of Default, and no Default (as each such term is defined in the Credit Agreement), has occurred and is continuing as of the date hereof, and no Event of Default or Default would result from or arise in connection with the consummation of the transactions contemplated by the Transaction Documents on the date hereof, including the initial borrowing under the Term Loan B Facility, the refinancing and repayment in full of indebtedness under the Existing Credit Agreement, the granting of liens and security interests under the Security Agreement and the other Transaction Documents, and the payment of the dividend to Holdings.
The undersigned has reviewed the provisions of Article VII of the Credit Agreement (Events of Default) and Article VI of the Credit Agreement (Affirmative Covenants) and Article VII of the Credit Agreement (Negative Covenants) and, after giving effect to the transactions contemplated by the Transaction Documents, confirms that no Event of Default or Default exists or would result therefrom.
SECTION 15: FINANCIAL INFORMATION
The financial statements and financial information delivered by or on behalf of the Borrower to Borrower's Counsel and to the Administrative Agent in connection with the transactions contemplated by the Transaction Documents, including the audited consolidated financial statements of the Borrower and its subsidiaries as of and for the fiscal year ended December 31, 2024, and the interim unaudited consolidated financial statements of the Borrower and its subsidiaries, fairly present in all material respects the consolidated financial condition, results of operations, and cash flows of the Borrower and its subsidiaries as of the dates and for the periods indicated therein, subject, in the case of interim financial statements, to the absence of footnotes and to customary year-end audit adjustments, all prepared in accordance with GAAP consistently applied (except as may be noted therein).
The following key financial metrics are certified as true, correct, and complete in all material respects as of and for the twelve-month period ended December 31, 2024, after giving pro forma effect to the transactions contemplated by the Transaction Documents:
The permitted add-backs of $28,000,000 referenced above consist of items permitted under the definition of "Consolidated EBITDA" (or "Adjusted EBITDA") in the Credit Agreement, including restructuring charges, transaction costs, non-recurring expenses, and other adjustments agreed to by the Administrative Agent and the Borrower.
The independent auditor for the Borrower and its consolidated subsidiaries is Ashworth & Kendrick LLP, with Helen Yamamoto serving as Engagement Partner. Ashworth & Kendrick LLP has issued an unqualified audit opinion with respect to the consolidated financial statements of the Borrower and its subsidiaries for the fiscal year ended December 31, 2024.
SECTION 16: ACCURACY OF INFORMATION
All factual information, data, reports, projections, estimates, and written statements (collectively, "Furnished Information") furnished by or on behalf of any Loan Party to Borrower's Counsel, the Administrative Agent, the Collateral Agent, the Arrangers, or the Lenders in connection with the negotiation, execution, and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby are, taken as a whole, true, correct, and complete in all material respects as of the date such Furnished Information was furnished (or, in the case of Furnished Information that speaks as of a specific earlier date, as of such earlier date).
No Furnished Information (other than projections, estimates, and other forward-looking information, which were prepared in good faith on the basis of assumptions believed to be reasonable at the time such projections, estimates, or forward-looking information were prepared, it being understood that such projections, estimates, and forward-looking information are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties, and no assurance can be given that such projections, estimates, or forward-looking information will be realized) contains or contained any untrue statement of a material fact or omits or omitted to state a material fact necessary to make the statements contained therein, in light of the circumstances under which such statements were made, not misleading.
The undersigned is not aware of any facts or circumstances that would make any of the information, certifications, or representations set forth in this Certificate or in the other certificates and documents delivered in connection with the closing of the transactions contemplated by the Transaction Documents inaccurate, incomplete, or misleading in any material respect.
SCHEDULE A
SUBSIDIARY OWNERSHIP STRUCTURE
The following table sets forth, as of March 28, 2025, the complete list of direct and indirect subsidiaries of Nexford Industrial Holdings Inc.:
Notes:
(a) Entities numbered 1 through 10 above, together with Granite Peak NIH Holdings, LLC (as Holdings Guarantor) and Nexford Industrial Holdings Inc. (as Borrower), constitute the "Loan Parties" under the Transaction Documents.
(b) Entities numbered 11 and 12 above are "Excluded Subsidiaries" under the Credit Agreement and are not required to guarantee any obligations under the Transaction Documents or to pledge any of their assets.
(c) Nexford International Holdings, Inc. (entity number 6 above) is organized as a "CFC Holdco" (as defined in the Credit Agreement) and serves as the holding company for the foreign subsidiaries of the Borrower. 100% of the equity interests in Nexford International Holdings, Inc. are pledged to the Collateral Agent. Only 65% of the voting equity interests of Nexford Canada Holdings ULC are pledged to the Collateral Agent pursuant to the applicable Pledge Agreement.
SCHEDULE B
MORTGAGED PROPERTIES
The following table sets forth each parcel of real property owned in fee simple by any Loan Party with a fair market value in excess of $10,000,000, each of which is required to be subject to a mortgage, deed of trust, or similar instrument in favor of the Collateral Agent as a post-closing deliverable:
Total Appraised Real Property Collateral Value: $193,000,000
Notes:
(a) Mortgages, deeds of trust, environmental indemnity agreements, and assignments of leases and rents for each Mortgaged Property are required to be delivered on or before April 30, 2025, pursuant to Section 6.14 of the Credit Agreement.
(b) Lender's title insurance policies are to be issued by Landmark Title Assurance Company.
(c) ALTA/NSPS surveys, Phase I environmental site assessments, flood certifications, and zoning compliance letters for each Mortgaged Property have been ordered or delivered as of the date hereof.
(d) Property number 1 (Schaumburg, IL) serves as the Borrower's corporate headquarters and principal manufacturing campus. Property number 4 (Houston, TX) is jointly occupied by Nexford Coatings & Surface Technologies, Inc. and Ridgepoint Specialty Coatings, LLC and houses the Borrower's coatings and surface treatment operations.
SCHEDULE C
DEPOSIT AND SECURITIES ACCOUNTS
The following table sets forth all material deposit accounts and securities accounts maintained by the Loan Parties as of March 28, 2025:
Notes:
(a) Deposit Account Control Agreements ("DACAs") and Securities Account Control Agreements ("SACAs") have been duly executed and delivered as of the date hereof for all accounts listed above that are required to be subject to a control agreement under the Credit Agreement and the Security Agreement.
(b) Accounts maintained at Crescent Harbor Bank, N.A. are subject to the Administrative Agent's set-off rights and springing control provisions as provided in the Credit Agreement and the Security Agreement.
(c) No Loan Party maintains any deposit account or securities account at any financial institution other than as set forth in this Schedule C, except for petty cash accounts with balances not exceeding $25,000 individually or $100,000 in the aggregate.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Opinion Back-Up Certificate on behalf of Nexford Industrial Holdings Inc. (as Borrower) and on behalf of each of the Guarantors identified herein, as of the date first written above.
NEXFORD INDUSTRIAL HOLDINGS INC. (on behalf of the Borrower and each of the Guarantors)
By: ________
Name: David Engstrom
Title: General Counsel & Corporate Secretary
Date: March 28, 2025
Executed and delivered on behalf of the Borrower and each of the Guarantors.
ACKNOWLEDGMENT
STATE OF ILLINOIS COUNTY OF COOK
Before me, the undersigned, a Notary Public in and for said County and State, on this 28th day of March, 2025, personally appeared David Engstrom, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his capacity as General Counsel & Corporate Secretary of Nexford Industrial Holdings Inc., and that by his signature on the instrument, the entity upon behalf of which the person acted executed the instrument, and that such execution was his free and voluntary act and deed and the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth.
________________________________________
Notary Public, State of Illinois County of Cook
Printed Name: ________