1005-00001 · Nexford Industrial Holdings · Term Sheet & Commitment Letter

fee-letter-review-memorandum.docx DOCUMENT Finance & Banking

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CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, New York 10017

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

MEMORANDUM

I. Executive Summary

The purpose of this memorandum is to summarize and provide a comprehensive review of the fee letter (the "Fee Letter") between Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower") and Crescent Harbor Bank, N.A. ("Crescent Harbor" or the "Arranger") entered into in connection with the $1,400,000,000 senior secured Term Loan B facility (the "Term Loan B" or the "Facility"). This memorandum is being prepared for the review of the responsible and billing partners on this engagement and is intended to serve as a working reference document for the Calderwood & Harkness LLP ("C&H") deal team as the transaction proceeds toward closing.

The Fee Letter was negotiated concurrently with the commitment letter (the "Commitment Letter") and is structured as a side letter thereto. The Commitment Letter was executed on February 14, 2025, and the Fee Letter is expected to be executed on February 18, 2025, following final commercial sign-off from Nexford's Chief Financial Officer and Treasury team.

The Fee Letter governs three distinct categories of fees and discount economics:

(i) an arrangement fee payable to Crescent Harbor in its capacity as sole lead left arranger and bookrunner for the Facility;

(ii) an upfront fee payable to participating syndicate lenders that commit to and fund the Facility on the closing date; and

(iii) an original issue discount ("OID") applied to the issuance of the Term Loan B, which effectively reduces the net proceeds received by the Borrower.

The total estimated fee and discount outlay associated with the Fee Letter is approximately $28,000,000, comprised of the following components: (a) an arrangement fee of $7,000,000, (b) an aggregate OID of $7,000,000, and (c) upfront fees to syndicate lenders of approximately $14,000,000. These amounts, together with legal fees, financial advisory fees, rating agency fees, and other transaction expenses (estimated at approximately $10,625,000), bring the total estimated transaction fees and expenses to approximately $38,625,000. All such fees and expenses are expected to be funded from the gross proceeds of the Term Loan B at closing.

The Fee Letter is governed by New York law, and its terms are subject to strict confidentiality provisions, with customary exceptions for disclosure to counsel, financial advisors, accountants, and as required by law or regulation. The specific dollar amounts and basis point levels set forth in the Fee Letter are not to be disclosed outside the permitted disclosure framework without prior written consent from Crescent Harbor.

Key contacts at Crescent Harbor in connection with the Fee Letter and the broader Facility are Elaine Prescott, Managing Director, Leveraged Finance Origination, and Thomas Nakamura, Director, Loan Syndication, both located at 320 Federal Street, Boston, Massachusetts 02110.

C&H's review of the Fee Letter was coordinated with Marcus Leung, Lead Associate on this engagement, and incorporated input from Stonebridge Advisory Group, LLC ("Stonebridge"), represented by Andrew Castellano, Managing Director, who serves as financial advisor to Nexford and Granite Peak Capital Partners, LP ("Granite Peak") in connection with the refinancing and dividend recapitalization transaction.

This memorandum should be read in conjunction with the Commitment Letter Review Memorandum dated February 13, 2025, the Market Flex Provisions Analysis Memorandum dated February 13, 2025, and the other related C&H memoranda referenced in Section XI below.

II. Background and Transaction Context

A. The Borrower and Sponsor

Nexford Industrial Holdings Inc. is a Delaware corporation headquartered at 1400 Industrial Parkway, Schaumburg, Illinois 60173. Nexford is a diversified industrial manufacturing and distribution company and a portfolio company of Granite Peak Capital Partners, LP ("Granite Peak"). Granite Peak acquired Nexford in January 2019 through Granite Peak Capital Fund IV, LP ("Fund IV") for an enterprise value of approximately $1,650,000,000, with an equity investment at acquisition of approximately $725,000,000. The acquisition was financed with a combination of Fund IV equity capital, co-investment capital through GP Fund IV Co-Invest, LP, and debt financing arranged by Atlas Meridian Bank, N.A.

B. Transaction Overview

The proposed transaction involves the incurrence by Nexford of a $1,400,000,000 senior secured Term Loan B to accomplish the following purposes:

(a) Refinance existing debt. The Term Loan B will be used to refinance in full the existing $875,000,000 first lien term loan facility and to terminate the existing $190,000,000 revolving credit facility (currently undrawn), in each case with Atlas Meridian Bank, N.A. as administrative agent. The existing payoff amount is estimated at approximately $879,375,000, consisting of $875,000,000 in outstanding principal plus approximately $4,375,000 in accrued and unpaid interest through the anticipated closing date.

(b) Fund a dividend recapitalization. A distribution of approximately $335,000,000 will be made to Granite Peak NIH Holdings, LLC (the direct parent of Nexford), which will in turn distribute such proceeds upstream to Granite Peak Capital Fund IV, LP and GP Fund IV Co-Invest, LP, pro rata in accordance with their respective equity interests. This dividend recapitalization represents a partial return of invested capital to the Fund IV investors.

(c) Pay transaction fees and expenses. Estimated total transaction fees and expenses of approximately $38,625,000 will be funded from Term Loan B proceeds, including the arrangement fee, OID, upfront fees, legal fees, financial advisory fees, rating agency fees, title and appraisal costs, and other customary professional fees associated with the refinancing and the Term Loan B syndication.

(d) Retain cash to the balance sheet. After application of the foregoing uses, approximately $147,000,000 will remain as cash on the balance sheet of Nexford for general corporate purposes, working capital, and other permitted uses.

C. Crescent Harbor's Role

Crescent Harbor Bank, N.A. serves in the following capacities in connection with the Facility: (i) sole lead left arranger and bookrunner for the syndication of the Term Loan B, (ii) administrative agent under the credit agreement governing the Term Loan B, and (iii) collateral agent with respect to the first-priority security interests granted in favor of the Term Loan B lenders.

D. Timeline and Documentation

The mandate letter between Nexford and Crescent Harbor was executed on January 27, 2025, formally engaging Crescent Harbor as sole lead left arranger for the Facility. The Commitment Letter for the full $1,400,000,000 was executed on February 14, 2025. The Fee Letter is structured as a side letter to the Commitment Letter and is expected to be executed on February 18, 2025. The target closing date for the Term Loan B is March 28, 2025, subject to satisfaction of customary closing conditions set forth in the Commitment Letter and the definitive credit agreement.

E. Key Financial Metrics

The following key financial metrics are relevant to the assessment of the Fee Letter economics and the overall transaction:

• LTM Adjusted EBITDA (twelve months ended December 31, 2024): $385,000,000

• LTM Revenue (twelve months ended December 31, 2024): $2,100,000,000

• Pro forma first lien net leverage at closing: approximately 3.38x ($1,400,000,000 Term Loan B less estimated closing cash, divided by $385,000,000 LTM Adjusted EBITDA)

• Pro forma total net leverage at closing: approximately 4.03x (reflecting the $1,400,000,000 Term Loan B plus $250,000,000 in outstanding senior unsecured notes, less estimated closing cash, divided by $385,000,000 LTM Adjusted EBITDA)

• Interest rate on the Term Loan B: Term SOFR + 400 basis points, with a SOFR floor of 0.75%

F. Credit Ratings

The Facility has been submitted for rating to two nationally recognized statistical rating organizations. Credit rating presentations occurred on February 19, 2025, and ratings were formally assigned on February 26, 2025:

• Keystone Ratings Group, Inc.: B1 corporate family rating (CFR) / B1 facility rating for the Term Loan B

• Sentinel Credit Analytics, LLC: B+ corporate credit rating (CCR) / BB- facility rating for the Term Loan B

These ratings are consistent with the pricing and fee assumptions underlying the Fee Letter and the Commitment Letter. The split facility ratings (B1 from Keystone and BB- from Sentinel) reflect the first-lien secured position and strong collateral coverage of the Term Loan B relative to the overall corporate credit profile.

III. Arrangement Fee

A. Amount and Calculation

The Fee Letter provides for an arrangement fee (the "Arrangement Fee") of 50 basis points (0.50%) on the full committed Facility amount of $1,400,000,000. The resulting dollar amount of the Arrangement Fee is calculated as follows:

$1,400,000,000 × 0.50% = $7,000,000

The Arrangement Fee is payable by Nexford, in its capacity as Borrower under the Facility, to Crescent Harbor Bank, N.A. in its capacity as sole lead left arranger and bookrunner. The Arrangement Fee compensates Crescent Harbor for its commitment of capital, its role in structuring and syndicating the Term Loan B, and its assumption of syndication risk during the marketing and distribution period.

B. Payment Terms

The Arrangement Fee is payable in full on the closing date (target: March 28, 2025) from the gross proceeds of the Term Loan B. Payment is required to be made by wire transfer of immediately available funds to Crescent Harbor's designated account, the details of which will be set forth in the funds flow memorandum to be prepared and circulated in advance of closing.

The Fee Letter provides that the Arrangement Fee, once paid, is non-refundable and non-creditable. There is no circumstance under which the Borrower may recoup all or any portion of the Arrangement Fee following its payment on the closing date. The non-refundable and non-creditable nature of the Arrangement Fee is standard for leveraged loan transactions and reflects the compensation earned by the arranger for its underwriting, structuring, and syndication services.

C. Conditions to Payment

The Arrangement Fee is earned upon execution of the Fee Letter but is payable only upon the occurrence of the closing date. This distinction is significant: the fee is deemed earned as consideration for the Commitment Letter and the Arranger's undertaking to arrange and syndicate the Facility, but the actual payment obligation is conditioned on the successful closing of the transaction.

In the event that the transaction does not close for any reason, no Arrangement Fee is payable by the Borrower, except to the extent that Crescent Harbor may be entitled to reimbursement of fees and expenses under the expense reimbursement provisions of the Commitment Letter. The Commitment Letter's expense reimbursement provisions were analyzed in the Commitment Letter Review Memorandum dated February 13, 2025, and provide for reimbursement of reasonable and documented out-of-pocket expenses of Crescent Harbor and its counsel regardless of whether closing occurs.

D. Observations and Comments

Based on our review and market analysis, the following observations are noted with respect to the Arrangement Fee:

Market Comparability. The 50 basis point Arrangement Fee is within the typical market range for a sponsor-backed Term Loan B transaction of this size and credit profile. For facilities in excess of $1,000,000,000 with B1/B+ ratings, arrangement fees generally range from 25 to 75 basis points, depending on the complexity of the transaction, the number of arrangers, the competitiveness of the mandate process, and prevailing market conditions. The 50 basis point level represents a mid-range fee that is consistent with the sole lead left arranger structure employed here.

Total Arranger Compensation. It is important to note that the Arrangement Fee is payable in addition to the OID and the upfront fee, both of which also provide economic benefit to the arranger (to the extent Crescent Harbor retains a portion of the Facility on its balance sheet). The total compensation package to the arranger and lenders is therefore relatively robust. Stonebridge Advisory Group (Andrew Castellano) has reviewed and confirmed that the overall fee package is consistent with current market terms for B1/B+ rated leveraged credits and is within the range that would be expected for a sole lead left arrangement.

Sources and Uses Treatment. We recommend confirming that the Arrangement Fee of $7,000,000 is properly treated as a transaction expense in the sources and uses waterfall and is included within the approximately $38,625,000 total fees and expenses line item. This treatment is consistent with the Commitment Letter and the preliminary sources and uses provided by Stonebridge.

IV. Original Issue discount (OID)

A. Amount and Calculation

The Fee Letter provides that the Term Loan B will be issued at an original issue discount of 50 basis points, meaning the issue price is 99.50 (i.e., lenders fund 99.50% of par value). The aggregate dollar amount of the OID is calculated as follows:

$1,400,000,000 × 0.50% = $7,000,000 aggregate OID

The OID effectively reduces the net cash proceeds received by the Borrower by $7,000,000. Accordingly, while the Borrower will incur a $1,400,000,000 principal obligation under the Term Loan B, it will receive only $1,393,000,000 in cash at closing. The $7,000,000 differential represents the discount to par at which the Term Loan B is issued and constitutes additional yield to the lenders over the life of the Facility.

B. Allocation and Mechanics

The OID is borne entirely by the Borrower and is allocated to each lender in the syndicate on a pro rata basis according to its respective commitment amount. Under this structure, each lender funds its commitment at 99.50 cents on the dollar. By way of illustration:

• A lender with a $100,000,000 commitment will fund $99,500,000 in cash at closing but will hold a claim for $100,000,000 in principal against the Borrower.

• A lender with a $50,000,000 commitment will fund $49,750,000 in cash at closing but will hold a claim for $50,000,000 in principal against the Borrower.

The OID accrues to the benefit of each lender and enhances the effective yield to lenders above the stated coupon rate of Term SOFR plus 400 basis points. The OID is realized by each lender at maturity (or upon earlier repayment) as the difference between the discounted funding amount and the par amount of principal repaid.

C. Yield Impact Analysis

The following analysis illustrates the impact of the OID on the effective yield to lenders:

Stated Coupon Calculation. At an assumed Term SOFR rate of 4.35% (current 1-month Term SOFR) plus the 10 basis point credit spread adjustment applicable to 1-month SOFR borrowings, the base reference rate for the Term Loan B is approximately 4.45%. Adding the 400 basis point spread margin, the stated all-in coupon on the Term Loan B is approximately 8.45% per annum (4.45% + 4.00%).

OID Yield Enhancement. The 50 basis point OID provides incremental yield to lenders above the stated coupon. The precise yield enhancement depends on the assumed average life of the loan:

• Full maturity assumption (7-year term to March 28, 2032): The OID adds approximately 7 to 8 basis points of effective yield when amortized on a straight-line or constant yield basis over the full 7-year maturity.

• 3-year average life assumption (market convention for leveraged loans): Using a 3-year average life assumption, which is commonly employed in the leveraged loan market to account for expected prepayments, repricing transactions, and refinancings, the OID yield pickup is approximately 17 basis points on an effective yield basis.

Combined Yield Protection. Combined with the 101 soft call premium applicable to repricing transactions within the first 6 months following the closing date (as set forth in the Commitment Letter), the initial period yield protection for lenders is meaningful. The soft call premium effectively discourages opportunistic repricing by the Borrower in the near term and preserves the lenders' return expectations through the initial period.

D. Tax Treatment Note

The OID has potentially significant tax implications for both the Borrower and the lenders, which should be addressed in a separate tax memorandum.

Borrower Perspective. The OID will need to be analyzed for deductibility and amortization by the Borrower under Internal Revenue Code Section 163 and related provisions governing the treatment of original issue discount on debt instruments. In particular, the interaction of the OID deduction with the Section 163(j) business interest expense limitation should be carefully considered, as the Borrower's total interest expense (inclusive of OID amortization) may approach or exceed the Section 163(j) limitation based on adjusted taxable income. We have flagged this issue for review by Sylvia Hartwell, Specialist Partner in the Tax Group, who is preparing a forthcoming memorandum on the deductibility of interest and OID on the Term Loan B, including a comprehensive Section 163(j) analysis. That memorandum is expected on or about March 5, 2025.

Lender Perspective. Lenders will generally be required to accrue the OID as ordinary income over the life of the loan using the constant yield method prescribed by Treasury regulations, regardless of when the OID is actually received in cash. This treatment is a consideration for institutional lenders in evaluating the after-tax economics of the Facility.

E. Observations and Comments

Market Comparability. A 50 basis point OID (corresponding to a 99.50 issue price) is within market norms for B1/B+ rated Term Loan B facilities in the current interest rate environment. Recent comparable transactions in the leveraged loan market have featured OIDs in the range of 25 to 75 basis points, with the specific level depending on credit quality, market conditions, and the overall fee package offered to lenders. The 99.50 issue price on the Nexford Term Loan B is at the midpoint of this range and reflects a balanced approach to lender economics.

Market Flex. It is important to note that the OID is subject to the market flex provisions contained in the Commitment Letter. Crescent Harbor retains the right to increase the OID (i.e., decrease the issue price below 99.50) as part of its market flex rights if syndication conditions require a sweetener to achieve full subscription of the Facility. The scope and limitations of the market flex provisions were addressed in detail in the separate Market Flex Provisions Analysis Memorandum dated February 13, 2025. Any exercise of market flex with respect to the OID would increase the total cost to the Borrower and reduce net proceeds available for the dividend recapitalization and/or cash to balance sheet.

Sources and Uses Reconciliation. We recommend confirming that the OID of $7,000,000 is separately tracked from the Arrangement Fee of $7,000,000 in the sources and uses. Both amounts are components of the approximately $38,625,000 total transaction fees and expenses, but they serve different economic functions and flow through different accounting and tax channels. The OID is a non-cash item at closing that manifests as a reduction in net proceeds, whereas the Arrangement Fee is a cash disbursement on the closing date.

V. Upfront Fee to Participating Lenders

A. Amount and Structure

The Fee Letter provides for an upfront fee (the "Upfront Fee") of 100 basis points (1.00%) of each participating lender's commitment amount. The Upfront Fee is payable to each lender that commits to the syndication of the Term Loan B and funds its commitment on the closing date. The Upfront Fee is intended to incentivize lender participation in the syndication and to compensate lenders for their commitment of capital.

The Upfront Fee is separate from, and in addition to, the OID. While the OID provides incremental yield over the life of the loan, the Upfront Fee is a cash payment made at closing and represents immediate compensation to lenders for their participation.

B. Funding Mechanics

The Upfront Fee is funded by the Borrower from the gross proceeds of the Term Loan B on the closing date. Each syndicate lender receives its Upfront Fee based on its final commitment allocation as determined through the syndication process. Payment is made by the administrative agent (Crescent Harbor) on behalf of the Borrower as part of the closing date funds flow.

Based on preliminary indicated commitments received by the Crescent Harbor syndication desk as of the date of this memorandum, the following illustrative calculations reflect expected Upfront Fee amounts for the identified lenders:

The foregoing allocations are preliminary and subject to change based on the outcome of the syndication process, including investor feedback following the bank meeting scheduled for February 27, 2025. Final allocations will be determined by Crescent Harbor in its capacity as bookrunner, in consultation with Nexford and Stonebridge.

The total Upfront Fee across the full $1,400,000,000 Facility is:

$1,400,000,000 × 1.00% = $14,000,000

C. Tiered Fee Structure / Title Economics

The Fee Letter specifies a tiered upfront fee schedule based on the syndicate title and commitment level of each lender, which is a customary feature in leveraged loan syndications. The 100 basis point Upfront Fee referenced above applies to the base tier, which encompasses general syndicate lenders and those participating at the standard commitment level.

Certain lenders that are expected to join the syndicate with elevated titles may receive incremental economics reflecting their enhanced roles and larger commitments. Specifically, Ironwood Capital Markets, LLC and Northvane Securities, Inc. are expected to join the syndicate as joint lead arrangers on or about March 7, 2025, following the completion of the initial syndication phase. Any incremental fees associated with their arranger titles would be documented in separate co-arranger fee letters to be negotiated directly between Crescent Harbor and those institutions. Such co-arranger fee letters are not part of the Fee Letter under review and will be the subject of a separate analysis if and when they are presented to C&H for review.

The Fee Letter expressly reserves to Crescent Harbor the right to allocate and adjust fees within the syndicate as part of its bookrunner discretion. This is a standard provision that enables the bookrunner to manage the economics of the syndication, including by offering enhanced fees to anchor investors or by reallocating fee economics among tiers to optimize the distribution of commitments. Any such allocation or adjustment is subject to the constraint that the overall fee budget contemplated by the Fee Letter is not exceeded without the Borrower's prior consent.

D. Observations and Comments

Market Comparability. An Upfront Fee of 100 basis points is consistent with prevailing market terms for sponsor-backed Term Loan B transactions in the B1/B+ rating category. Upfront fees in the leveraged loan market have generally ranged from 50 to 150 basis points in recent quarters, with the specific level depending on credit quality, spread levels, and the overall competitiveness of the offering. The 100 basis point level for the Nexford Term Loan B represents a market-clearing fee that is expected to support strong syndication demand.

Combined Day-One Economics. When combined with the 50 basis point OID, the total "day one" economics to syndicate lenders is effectively 150 basis points (100 bps Upfront Fee + 50 bps OID). This translates to an attractive entry point for institutional investors, as lenders effectively acquire the Term Loan B at an effective cost basis of 98.50 cents on the dollar (par less the combined OID and upfront fee value). This combined economic package, together with the SOFR + 400 bps coupon, is expected to generate significant investor interest and facilitate a timely and efficient syndication.

Fee Budget Reconciliation. The $14,000,000 in aggregate Upfront Fees is the single largest component of the approximately $38,625,000 total transaction fees and expenses. The complete fee reconciliation is as follows:

• Arrangement Fee (Crescent Harbor): $7,000,000

• OID (aggregate discount): $7,000,000

• Upfront Fees (syndicate lenders): $14,000,000

• Subtotal — Bank/Lender Fees: $28,000,000

• Legal, advisory, rating agency, title, appraisal, and other professional fees: ~$10,625,000

• Total Transaction Fees and Expenses: ~$38,625,000

The approximately $10,625,000 in non-bank fees includes, among other items, legal fees payable to C&H (as Borrower's counsel), Kellner Brandt & Associates LLP (as Granite Peak's counsel), and the arranger's counsel; financial advisory fees payable to Stonebridge Advisory Group, LLC; credit rating fees payable to Keystone Ratings Group, Inc. and Sentinel Credit Analytics, LLC; and appraisal, title, and recording fees associated with the collateral package.

VI. Confidentiality Provisions

The Fee Letter contains customary confidentiality provisions that impose restrictions on the disclosure of its terms and conditions. These provisions are consistent with market practice for leveraged loan fee letters and are designed to protect the commercially sensitive fee and discount information from broad dissemination.

General Obligation. The Fee Letter provides that its terms, conditions, and existence as a separate document are confidential and may not be disclosed to any third party without the prior written consent of Crescent Harbor, except as expressly permitted under the enumerated exceptions.

Permitted Exceptions. The following disclosures are permitted without the prior consent of Crescent Harbor:

(a) Disclosure to Nexford's and Granite Peak's respective legal counsel — specifically, Calderwood & Harkness LLP (as counsel to the Borrower) and Kellner Brandt & Associates LLP (as counsel to Granite Peak) — in each case subject to such counsel's professional obligations of confidentiality and, to the extent requested by Crescent Harbor, written confidentiality undertakings.

(b) Disclosure to Nexford's and Granite Peak's financial advisors — specifically, Stonebridge Advisory Group, LLC — subject to customary confidentiality undertakings binding on such advisors.

(c) Disclosure to Nexford's independent accountants — specifically, Ashworth & Kendrick LLP — subject to customary confidentiality undertakings, and solely to the extent necessary for accounting, auditing, or tax purposes.

(d) Disclosure required by applicable law, rule, or regulation, or by order of any court of competent jurisdiction, governmental authority, or regulatory body, provided that the disclosing party uses commercially reasonable efforts to provide prior notice to Crescent Harbor and to minimize the scope of such disclosure.

(e) Disclosure in connection with any legal proceeding to enforce rights under, or arising out of, the Fee Letter or the Commitment Letter.

(f) Aggregate fee information may be disclosed in credit agreement schedules, financial statements, and related disclosures to the extent required by applicable accounting standards (including GAAP or IFRS), securities laws, or the terms of the credit agreement; provided that the specific basis point levels and dollar amounts of the Arrangement Fee, OID, and Upfront Fee need not be separately itemized in such disclosures.

Reference in Other Documents. The Fee Letter provides that the existence of the Fee Letter (but not its specific terms) may be referenced in the credit agreement and the Commitment Letter. This is a standard provision that permits the parties to cross-reference the Fee Letter in publicly available or more broadly circulated documentation without disclosing the underlying fee economics.

Recommendation. We recommend that the C&H deal team ensure that Nexford's key officers — specifically, Michelle Kaplan (Chief Financial Officer), Priya Mehta (Vice President, Treasury), and David Engstrom (General Counsel) — are fully aware of these confidentiality restrictions. This is particularly important in connection with any board of directors presentations, investor communications, or management reports that may reference the Facility's fee economics. Fee amounts should be disclosed in aggregate form only in such contexts, and specific basis point levels and dollar amounts from the Fee Letter should not be included in materials that may be circulated beyond the permitted disclosure group.

VII. Market Flex Interplay

The Fee Letter must be read and interpreted in conjunction with the market flex provisions contained in the Commitment Letter. The market flex provisions were analyzed in detail in the separate Market Flex Provisions Analysis Memorandum dated February 13, 2025, and the following summary is provided here for purposes of understanding the interplay between the Fee Letter economics and the Arranger's flex rights.

Scope of Market Flex. Crescent Harbor's market flex rights under the Commitment Letter include the ability to make the following adjustments to the terms of the Facility if, in Crescent Harbor's reasonable judgment, such adjustments are necessary to achieve a successful syndication:

(a) Interest rate margin increase. Crescent Harbor may increase the interest rate margin (SOFR spread) by up to a specified cap. The specific cap amount is confidential and set forth in the market flex provisions of the Commitment Letter and Fee Letter.

(b) OID increase. Crescent Harbor may increase the OID (i.e., decrease the issue price below the current 99.50 level) to enhance the effective yield to lenders.

(c) Upfront fee increase. Crescent Harbor may increase the Upfront Fee payable to syndicate lenders above the current 100 basis point level.

(d) Structural modifications. Crescent Harbor may modify certain structural features of the Facility, including the amortization rate, financial covenant levels, call protection terms, and other terms that affect the risk/return profile for lenders.

Impact on Borrower. Any exercise of market flex would have a direct and adverse impact on the Borrower's economics. Specifically, an increase in the OID would reduce the net cash proceeds available at closing, an increase in the spread would increase ongoing interest expense, and an increase in the Upfront Fee would increase the total transaction fee burden. In each case, the incremental cost would reduce the amounts available for the dividend recapitalization to Granite Peak and/or the cash retained on the Borrower's balance sheet.

Sunset Provisions. The market flex provisions are time-limited and sunset upon the earlier to occur of: (i) the successful completion of syndication (as determined by Crescent Harbor in its capacity as bookrunner) and (ii) the closing date. Once the market flex rights have expired, Crescent Harbor may not unilaterally modify the Fee Letter economics or other Facility terms.

Current Syndication Outlook. As of the date of this memorandum, Crescent Harbor's leveraged finance team — specifically, Elaine Prescott (Managing Director) and Thomas Nakamura (Director) — has indicated that initial investor feedback from the pre-marketing phase has been constructive. The formal bank meeting is scheduled for February 27, 2025, and the investor response from that meeting will be the primary determinant of whether any flex exercise is required. Based on preliminary indications of interest received to date, Crescent Harbor has indicated that the Facility is expected to be well-received by the institutional investor community and that the exercise of market flex is considered unlikely under current market conditions. However, we note that market conditions remain subject to change, and the C&H team should continue to monitor syndication developments closely through the bank meeting and the subsequent commitment phase.

VIII. Comparison to Commitment Letter Economics

As part of our review, we have conducted a systematic comparison of the Fee Letter terms against the corresponding economic terms set forth in the Commitment Letter executed on February 14, 2025. The purpose of this comparison is to identify any discrepancies or inconsistencies between the two documents. The results of this comparison are summarized below:

Conclusion. No discrepancies have been identified between the Fee Letter and the Commitment Letter with respect to the economic terms of the Facility. The Fee Letter provides the specific basis point levels and dollar amounts for the fees and OID that are referenced in more general terms in the Commitment Letter, and all such specifics are consistent with the economic parameters contemplated by the Commitment Letter.

The interest rate, SOFR floor, maturity, amortization, and other structural terms of the Facility are not addressed in the Fee Letter (which is limited to fee and discount economics) and are governed solely by the Commitment Letter and the definitive credit agreement. We have not identified any Fee Letter provisions that are inconsistent with or that would modify such structural terms.

IX. Sources and Uses Reconciliation

The following table reconciles the Fee Letter amounts within the broader sources and uses framework for the transaction. This reconciliation is based on the preliminary sources and uses prepared by Stonebridge Advisory Group and reflects the Fee Letter economics as reviewed herein.

Sources:

Uses:

Important Note Regarding Net Proceeds. The gross proceeds of the Term Loan B are $1,400,000,000, which represents the aggregate face amount of the Term Loan B commitments. However, due to the 50 basis point OID, the net cash received by Nexford at closing is $1,400,000,000 less $7,000,000 = $1,393,000,000. All uses other than the OID are funded from this $1,393,000,000 in net cash proceeds. The OID is a non-cash reduction in proceeds that is reflected as a day-one discount to the face amount of the loan.

For purposes of the sources and uses, the OID is presented as a use of funds (consistent with the treatment in the Commitment Letter and the Stonebridge model) to ensure that total sources equal total uses. This presentation is an economic convention; from a cash flow perspective, only $1,393,000,000 in cash flows from the lenders to the Borrower, and the Borrower disbursement of funds on the closing date (for debt payoff, dividend, other fees, and cash retention) will total $1,393,000,000.

The C&H team should coordinate with Stonebridge (Andrew Castellano) and Nexford's treasury team (Priya Mehta) to ensure that the final sources and uses, as well as the funds flow memorandum, accurately reflect this distinction between gross proceeds and net cash proceeds.

X. Recommendations and Open Items

Based on our review of the Fee Letter, we set forth the following recommendations and identify the following open items for the attention of the deal team:

1. Execution of the Fee Letter. We recommend that Nexford proceed with execution of the Fee Letter on February 18, 2025, as scheduled, concurrently with the receipt of final commercial confirmation from Michelle Kaplan (Chief Financial Officer) and Priya Mehta (Vice President, Treasury). The Fee Letter should be executed by an authorized officer of Nexford, consistent with the board resolutions adopted on January 13, 2025, which authorized the entry into the Commitment Letter, Fee Letter, and related transaction documents. C&H should confirm that the authorized signatory identified in the board resolutions is available to execute on the target date and that the form of the Fee Letter presented for execution is consistent with the negotiated draft reviewed herein.

2. Tax Analysis. We recommend flagging the OID ($7,000,000) and the Arrangement Fee ($7,000,000) for review by Sylvia Hartwell (Specialist Partner, Tax Group) in connection with her forthcoming memorandum on interest deductibility under Section 163(j) of the Internal Revenue Code. The tax memorandum should address: (a) the proper characterization and amortization period for the OID and Arrangement Fee for federal income tax purposes; (b) the interaction of the OID deduction and the Arrangement Fee deduction (to the extent deductible as a financing cost) with the Section 163(j) business interest expense limitation; and (c) any implications of the OID for the Borrower's reporting obligations to the lenders. The tax memorandum is expected on or about March 5, 2025.

3. Confidentiality Compliance. We recommend circulating the confidentiality restrictions set forth in the Fee Letter (summarized in Section VI of this memorandum) to all C&H team members working on this matter, including Claudia Merritt (Responsible Partner), Ian Blackwood (Billing Partner), and Marcus Leung (Lead Associate), as well as to Nexford's in-house legal counsel, David Engstrom (General Counsel). All team members and advisors should be instructed to treat the specific fee amounts and basis point levels as confidential and to limit disclosure to the permitted exception categories enumerated in the Fee Letter.

4. Market Flex Monitoring. We recommend that the C&H team continue to monitor syndication developments in close coordination with Crescent Harbor's leveraged finance team — specifically, Elaine Prescott (Managing Director) and Thomas Nakamura (Director) — following the bank meeting scheduled for February 27, 2025. The bank meeting will provide critical intelligence regarding investor appetite and pricing expectations, which will in turn inform whether Crescent Harbor is likely to exercise any portion of its market flex rights. If market flex is exercised, the Fee Letter economics will need to be updated and the impact on the sources and uses (particularly the dividend and cash-to-balance-sheet amounts) will need to be recalculated and communicated to Nexford and Granite Peak.

5. Funds Flow Integration. We recommend ensuring that the Arrangement Fee ($7,000,000), OID ($7,000,000), and Upfront Fee ($14,000,000) amounts are accurately reflected in the draft funds flow memorandum, which is to be prepared and circulated closer to the closing date (target distribution date: March 22, 2025). The funds flow memorandum should clearly delineate the cash disbursements (Arrangement Fee and Upfront Fees) from the non-cash items (OID) and should include the wire transfer instructions for each recipient. C&H should coordinate with Crescent Harbor's operations team and Nexford's treasury team to ensure the funds flow memorandum is complete and accurate prior to closing.

6. Co-Arranger Economics. We recommend confirming with Crescent Harbor whether separate fee letters (or co-arranger fee letters) will be required for Ironwood Capital Markets, LLC and Northvane Securities, Inc. when they formally join the syndicate as joint lead arrangers (expected on or about March 7, 2025). In particular, we should clarify: (a) whether any portion of the $7,000,000 Arrangement Fee will be shared with Ironwood and Northvane in connection with their joint lead arranger titles, or whether their compensation will be limited to co-arranger fees documented in separate side letters; and (b) whether C&H will be asked to review or negotiate the co-arranger fee letters on behalf of Nexford, or whether such letters are strictly between the arrangers and do not require Borrower consent or involvement. We should raise these questions with Elaine Prescott at the next status call.

XI. Attachments and Cross-References

A. Attachments

The following documents are attached to this memorandum for reference:

1. Fee Letter — Draft received for review on February 15, 2025; execution copy expected to be finalized and executed on February 18, 2025.

2. Commitment Letter — Executed copy dated February 14, 2025 (for cross-reference purposes in connection with the Fee Letter review).

B. Cross-References to Related C&H Memoranda

This memorandum should be read in conjunction with the following related memoranda prepared by the C&H Banking & Finance team in connection with the Nexford Term Loan B transaction:

1. Commitment Letter Review Memorandum — Dated February 13, 2025. Provides a comprehensive review of the Commitment Letter, including the conditions to funding, representations and warranties, certain funds provisions, and the Arranger's expense reimbursement obligations.

2. Market Flex Provisions Analysis Memorandum — Dated February 13, 2025. Analyzes in detail the market flex provisions contained in the Commitment Letter, including the scope of the Arranger's flex rights with respect to pricing, OID, upfront fees, and structural terms, as well as the limitations and sunset provisions applicable to such rights.

3. Internal Memorandum — Key Economic and Legal Terms Summary — Dated February 11, 2025. Provides a high-level summary of the principal economic and legal terms of the Term Loan B for use by the deal team and for distribution to the client.

4. Term Sheet Issues List and Negotiation Memorandum — Dated February 8, 2025. Identifies and discusses the key negotiation issues arising from the initial term sheet circulated by Crescent Harbor, including the resolution of material open points relating to the financial covenants, call protection, and incremental facility provisions.

5. Tax Memorandum — Deductibility of Interest on Term Loan B (Section 163(j) Analysis) — Forthcoming; expected on or about March 5, 2025. To be prepared by Sylvia Hartwell, Specialist Partner, Tax Group. Will address the deductibility of interest expense (including OID amortization) under Section 163(j) of the Internal Revenue Code and related provisions, as well as the proper tax treatment of the Arrangement Fee and other transaction costs.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

This memorandum has been prepared by Calderwood & Harkness LLP for the exclusive use of the attorneys and personnel identified herein in connection with their representation of the client in the referenced matter. This memorandum is protected by the attorney-client privilege and the work product doctrine. It is not intended for distribution to, or reliance by, any third party without the prior written consent of Calderwood & Harkness LLP.

Calderwood & Harkness LLP — 425 Lexington Avenue, New York, New York 10017 Matter No. 1005-00001 — Client/Matter Code: IBL-NIH-2025-031

TO:

Ian Blackwood, Billing Partner, Banking & Finance

FROM:	Sophie Tremblay, Working Associate, Banking & Finance
DATE:	February 17, 2025
RE:	Review of Fee Letter — Nexford Industrial Holdings Inc. / Crescent Harbor Bank, N.A. — $1,400,000,000 Senior Secured Term Loan B
MATTER NO.:	1005-00001
CLIENT/MATTER CODE:	IBL-NIH-2025-031
Lender	Commitment (Indicated)	Upfront Fee (1.00%)
Crescent Harbor Bank, N.A. (target final hold)	$175,000,000	$1,750,000
Ironwood Capital Markets, LLC	$200,000,000	$2,000,000
Northvane Securities, Inc.	$150,000,000	$1,500,000
Ridgeline Asset Management, LP	$125,000,000	$1,250,000
Halcyon Credit Partners, LLC	$100,000,000	$1,000,000
Verdant Institutional Investors, LP	$100,000,000	$1,000,000
Cascadia Loan Fund III, LP	$75,000,000	$750,000
Bluewater Fixed Income Fund, LP	$75,000,000	$750,000
Remaining general syndication (various)	~$400,000,000	~$4,000,000
Total	$1,400,000,000	$14,000,000
Term	Commitment Letter	Fee Letter	Status
Facility Amount	$1,400,000,000	$1,400,000,000	Consistent
Interest Rate	Term SOFR + 400 bps	N/A (not addressed in Fee Letter)	Consistent (referenced in Commitment Letter)
SOFR Floor	0.75%	N/A (not addressed in Fee Letter)	Consistent (referenced in Commitment Letter)
Original Issue discount	50 bps (99.50 issue price)	50 bps (99.50 issue price)	Consistent
Arrangement Fee	Payable per the Fee Letter (50 bps referenced)	50 bps ($7,000,000)	Consistent
Upfront Fee	"Customary upfront fees" per the Fee Letter	100 bps ($14,000,000)	Consistent
Source	Amount
Term Loan B (gross proceeds)	$1,400,000,000

Total Sources	$1,400,000,000
Use	Amount
Refinance existing first lien term loan (Atlas Meridian Bank, N.A.)	$879,375,000
Terminate existing revolving credit facility (Atlas Meridian Bank, N.A.; undrawn)	$0
Dividend to Granite Peak NIH Holdings, LLC	~$335,000,000
Transaction fees and expenses (total)	~$38,625,000
— Arrangement Fee (Crescent Harbor Bank, N.A.)	$7,000,000
— OID (aggregate discount)	$7,000,000
— Upfront Fees (syndicate lenders)	$14,000,000
— Legal, advisory, rating agency, and other professional fees	~$10,625,000
Cash to balance sheet	~$147,000,000
Total Uses	$1,400,000,000

CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, New York 10017
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
I. Executive Summary
The purpose of this memorandum is to summarize and provide a comprehensive review of the fee letter (the "Fee Letter") between Nexford Industrial Holdings Inc. ("Nexford" or the "Borrower") and Crescent Harbor Bank, N.A. ("Crescent Harbor" or the "Arranger") entered into in connection with the $1,400,000,000 senior secured Term Loan B facility (the "Term Loan B" or the "Facility"). This memorandum is being prepared for the review of the responsible and billing partners on this engagement and is intended to serve as a working reference document for the Calderwood & Harkness LLP ("C&H") deal team as the transaction proceeds toward closing.
The Fee Letter was negotiated concurrently with the commitment letter (the "Commitment Letter") and is structured as a side letter thereto. The Commitment Letter was executed on February 14, 2025, and the Fee Letter is expected to be executed on February 18, 2025, following final commercial sign-off from Nexford's Chief Financial Officer and Treasury team.
The Fee Letter governs three distinct categories of fees and discount economics:
(i) an arrangement fee payable to Crescent Harbor in its capacity as sole lead left arranger and bookrunner for the Facility;
(ii) an upfront fee payable to participating syndicate lenders that commit to and fund the Facility on the closing date; and
(iii) an original issue discount ("OID") applied to the issuance of the Term Loan B, which effectively reduces the net proceeds received by the Borrower.
The total estimated fee and discount outlay associated with the Fee Letter is approximately $28,000,000, comprised of the following components: (a) an arrangement fee of $7,000,000, (b) an aggregate OID of $7,000,000, and (c) upfront fees to syndicate lenders of approximately $14,000,000. These amounts, together with legal fees, financial advisory fees, rating agency fees, and other transaction expenses (estimated at approximately $10,625,000), bring the total estimated transaction fees and expenses to approximately $38,625,000. All such fees and expenses are expected to be funded from the gross proceeds of the Term Loan B at closing.
The Fee Letter is governed by New York law, and its terms are subject to strict confidentiality provisions, with customary exceptions for disclosure to counsel, financial advisors, accountants, and as required by law or regulation. The specific dollar amounts and basis point levels set forth in the Fee Letter are not to be disclosed outside the permitted disclosure framework without prior written consent from Crescent Harbor.
Key contacts at Crescent Harbor in connection with the Fee Letter and the broader Facility are Elaine Prescott, Managing Director, Leveraged Finance Origination, and Thomas Nakamura, Director, Loan Syndication, both located at 320 Federal Street, Boston, Massachusetts 02110.
C&H's review of the Fee Letter was coordinated with Marcus Leung, Lead Associate on this engagement, and incorporated input from Stonebridge Advisory Group, LLC ("Stonebridge"), represented by Andrew Castellano, Managing Director, who serves as financial advisor to Nexford and Granite Peak Capital Partners, LP ("Granite Peak") in connection with the refinancing and dividend recapitalization transaction.
This memorandum should be read in conjunction with the Commitment Letter Review Memorandum dated February 13, 2025, the Market Flex Provisions Analysis Memorandum dated February 13, 2025, and the other related C&H memoranda referenced in Section XI below.
II. Background and Transaction Context
A. The Borrower and Sponsor
Nexford Industrial Holdings Inc. is a Delaware corporation headquartered at 1400 Industrial Parkway, Schaumburg, Illinois 60173. Nexford is a diversified industrial manufacturing and distribution company and a portfolio company of Granite Peak Capital Partners, LP ("Granite Peak"). Granite Peak acquired Nexford in January 2019 through Granite Peak Capital Fund IV, LP ("Fund IV") for an enterprise value of approximately $1,650,000,000, with an equity investment at acquisition of approximately $725,000,000. The acquisition was financed with a combination of Fund IV equity capital, co-investment capital through GP Fund IV Co-Invest, LP, and debt financing arranged by Atlas Meridian Bank, N.A.
B. Transaction Overview
The proposed transaction involves the incurrence by Nexford of a $1,400,000,000 senior secured Term Loan B to accomplish the following purposes:
(a) Refinance existing debt. The Term Loan B will be used to refinance in full the existing $875,000,000 first lien term loan facility and to terminate the existing $190,000,000 revolving credit facility (currently undrawn), in each case with Atlas Meridian Bank, N.A. as administrative agent. The existing payoff amount is estimated at approximately $879,375,000, consisting of $875,000,000 in outstanding principal plus approximately $4,375,000 in accrued and unpaid interest through the anticipated closing date.
(b) Fund a dividend recapitalization. A distribution of approximately $335,000,000 will be made to Granite Peak NIH Holdings, LLC (the direct parent of Nexford), which will in turn distribute such proceeds upstream to Granite Peak Capital Fund IV, LP and GP Fund IV Co-Invest, LP, pro rata in accordance with their respective equity interests. This dividend recapitalization represents a partial return of invested capital to the Fund IV investors.
(c) Pay transaction fees and expenses. Estimated total transaction fees and expenses of approximately $38,625,000 will be funded from Term Loan B proceeds, including the arrangement fee, OID, upfront fees, legal fees, financial advisory fees, rating agency fees, title and appraisal costs, and other customary professional fees associated with the refinancing and the Term Loan B syndication.
(d) Retain cash to the balance sheet. After application of the foregoing uses, approximately $147,000,000 will remain as cash on the balance sheet of Nexford for general corporate purposes, working capital, and other permitted uses.
C. Crescent Harbor's Role
Crescent Harbor Bank, N.A. serves in the following capacities in connection with the Facility: (i) sole lead left arranger and bookrunner for the syndication of the Term Loan B, (ii) administrative agent under the credit agreement governing the Term Loan B, and (iii) collateral agent with respect to the first-priority security interests granted in favor of the Term Loan B lenders.
D. Timeline and Documentation
The mandate letter between Nexford and Crescent Harbor was executed on January 27, 2025, formally engaging Crescent Harbor as sole lead left arranger for the Facility. The Commitment Letter for the full $1,400,000,000 was executed on February 14, 2025. The Fee Letter is structured as a side letter to the Commitment Letter and is expected to be executed on February 18, 2025. The target closing date for the Term Loan B is March 28, 2025, subject to satisfaction of customary closing conditions set forth in the Commitment Letter and the definitive credit agreement.
E. Key Financial Metrics
The following key financial metrics are relevant to the assessment of the Fee Letter economics and the overall transaction:
• LTM Adjusted EBITDA (twelve months ended December 31, 2024): $385,000,000
• LTM Revenue (twelve months ended December 31, 2024): $2,100,000,000
• Pro forma first lien net leverage at closing: approximately 3.38x ($1,400,000,000 Term Loan B less estimated closing cash, divided by $385,000,000 LTM Adjusted EBITDA)
• Pro forma total net leverage at closing: approximately 4.03x (reflecting the $1,400,000,000 Term Loan B plus $250,000,000 in outstanding senior unsecured notes, less estimated closing cash, divided by $385,000,000 LTM Adjusted EBITDA)
• Interest rate on the Term Loan B: Term SOFR + 400 basis points, with a SOFR floor of 0.75%
F. Credit Ratings
The Facility has been submitted for rating to two nationally recognized statistical rating organizations. Credit rating presentations occurred on February 19, 2025, and ratings were formally assigned on February 26, 2025:
• Keystone Ratings Group, Inc.: B1 corporate family rating (CFR) / B1 facility rating for the Term Loan B
• Sentinel Credit Analytics, LLC: B+ corporate credit rating (CCR) / BB- facility rating for the Term Loan B
These ratings are consistent with the pricing and fee assumptions underlying the Fee Letter and the Commitment Letter. The split facility ratings (B1 from Keystone and BB- from Sentinel) reflect the first-lien secured position and strong collateral coverage of the Term Loan B relative to the overall corporate credit profile.
III. Arrangement Fee
A. Amount and Calculation
The Fee Letter provides for an arrangement fee (the "Arrangement Fee") of 50 basis points (0.50%) on the full committed Facility amount of $1,400,000,000. The resulting dollar amount of the Arrangement Fee is calculated as follows:
$1,400,000,000 × 0.50% = $7,000,000
The Arrangement Fee is payable by Nexford, in its capacity as Borrower under the Facility, to Crescent Harbor Bank, N.A. in its capacity as sole lead left arranger and bookrunner. The Arrangement Fee compensates Crescent Harbor for its commitment of capital, its role in structuring and syndicating the Term Loan B, and its assumption of syndication risk during the marketing and distribution period.
B. Payment Terms
The Arrangement Fee is payable in full on the closing date (target: March 28, 2025) from the gross proceeds of the Term Loan B. Payment is required to be made by wire transfer of immediately available funds to Crescent Harbor's designated account, the details of which will be set forth in the funds flow memorandum to be prepared and circulated in advance of closing.
The Fee Letter provides that the Arrangement Fee, once paid, is non-refundable and non-creditable. There is no circumstance under which the Borrower may recoup all or any portion of the Arrangement Fee following its payment on the closing date. The non-refundable and non-creditable nature of the Arrangement Fee is standard for leveraged loan transactions and reflects the compensation earned by the arranger for its underwriting, structuring, and syndication services.
C. Conditions to Payment
The Arrangement Fee is earned upon execution of the Fee Letter but is payable only upon the occurrence of the closing date. This distinction is significant: the fee is deemed earned as consideration for the Commitment Letter and the Arranger's undertaking to arrange and syndicate the Facility, but the actual payment obligation is conditioned on the successful closing of the transaction.
In the event that the transaction does not close for any reason, no Arrangement Fee is payable by the Borrower, except to the extent that Crescent Harbor may be entitled to reimbursement of fees and expenses under the expense reimbursement provisions of the Commitment Letter. The Commitment Letter's expense reimbursement provisions were analyzed in the Commitment Letter Review Memorandum dated February 13, 2025, and provide for reimbursement of reasonable and documented out-of-pocket expenses of Crescent Harbor and its counsel regardless of whether closing occurs.
D. Observations and Comments
Based on our review and market analysis, the following observations are noted with respect to the Arrangement Fee:
Market Comparability. The 50 basis point Arrangement Fee is within the typical market range for a sponsor-backed Term Loan B transaction of this size and credit profile. For facilities in excess of $1,000,000,000 with B1/B+ ratings, arrangement fees generally range from 25 to 75 basis points, depending on the complexity of the transaction, the number of arrangers, the competitiveness of the mandate process, and prevailing market conditions. The 50 basis point level represents a mid-range fee that is consistent with the sole lead left arranger structure employed here.
Total Arranger Compensation. It is important to note that the Arrangement Fee is payable in addition to the OID and the upfront fee, both of which also provide economic benefit to the arranger (to the extent Crescent Harbor retains a portion of the Facility on its balance sheet). The total compensation package to the arranger and lenders is therefore relatively robust. Stonebridge Advisory Group (Andrew Castellano) has reviewed and confirmed that the overall fee package is consistent with current market terms for B1/B+ rated leveraged credits and is within the range that would be expected for a sole lead left arrangement.
Sources and Uses Treatment. We recommend confirming that the Arrangement Fee of $7,000,000 is properly treated as a transaction expense in the sources and uses waterfall and is included within the approximately $38,625,000 total fees and expenses line item. This treatment is consistent with the Commitment Letter and the preliminary sources and uses provided by Stonebridge.
IV. Original Issue discount (OID)
A. Amount and Calculation
The Fee Letter provides that the Term Loan B will be issued at an original issue discount of 50 basis points, meaning the issue price is 99.50 (i.e., lenders fund 99.50% of par value). The aggregate dollar amount of the OID is calculated as follows:
$1,400,000,000 × 0.50% = $7,000,000 aggregate OID
The OID effectively reduces the net cash proceeds received by the Borrower by $7,000,000. Accordingly, while the Borrower will incur a $1,400,000,000 principal obligation under the Term Loan B, it will receive only $1,393,000,000 in cash at closing. The $7,000,000 differential represents the discount to par at which the Term Loan B is issued and constitutes additional yield to the lenders over the life of the Facility.
B. Allocation and Mechanics
The OID is borne entirely by the Borrower and is allocated to each lender in the syndicate on a pro rata basis according to its respective commitment amount. Under this structure, each lender funds its commitment at 99.50 cents on the dollar. By way of illustration:
• A lender with a $100,000,000 commitment will fund $99,500,000 in cash at closing but will hold a claim for $100,000,000 in principal against the Borrower.
• A lender with a $50,000,000 commitment will fund $49,750,000 in cash at closing but will hold a claim for $50,000,000 in principal against the Borrower.
The OID accrues to the benefit of each lender and enhances the effective yield to lenders above the stated coupon rate of Term SOFR plus 400 basis points. The OID is realized by each lender at maturity (or upon earlier repayment) as the difference between the discounted funding amount and the par amount of principal repaid.
C. Yield Impact Analysis
The following analysis illustrates the impact of the OID on the effective yield to lenders:
Stated Coupon Calculation. At an assumed Term SOFR rate of 4.35% (current 1-month Term SOFR) plus the 10 basis point credit spread adjustment applicable to 1-month SOFR borrowings, the base reference rate for the Term Loan B is approximately 4.45%. Adding the 400 basis point spread margin, the stated all-in coupon on the Term Loan B is approximately 8.45% per annum (4.45% + 4.00%).
OID Yield Enhancement. The 50 basis point OID provides incremental yield to lenders above the stated coupon. The precise yield enhancement depends on the assumed average life of the loan:
• Full maturity assumption (7-year term to March 28, 2032): The OID adds approximately 7 to 8 basis points of effective yield when amortized on a straight-line or constant yield basis over the full 7-year maturity.
• 3-year average life assumption (market convention for leveraged loans): Using a 3-year average life assumption, which is commonly employed in the leveraged loan market to account for expected prepayments, repricing transactions, and refinancings, the OID yield pickup is approximately 17 basis points on an effective yield basis.
Combined Yield Protection. Combined with the 101 soft call premium applicable to repricing transactions within the first 6 months following the closing date (as set forth in the Commitment Letter), the initial period yield protection for lenders is meaningful. The soft call premium effectively discourages opportunistic repricing by the Borrower in the near term and preserves the lenders' return expectations through the initial period.
D. Tax Treatment Note
The OID has potentially significant tax implications for both the Borrower and the lenders, which should be addressed in a separate tax memorandum.
Borrower Perspective. The OID will need to be analyzed for deductibility and amortization by the Borrower under Internal Revenue Code Section 163 and related provisions governing the treatment of original issue discount on debt instruments. In particular, the interaction of the OID deduction with the Section 163(j) business interest expense limitation should be carefully considered, as the Borrower's total interest expense (inclusive of OID amortization) may approach or exceed the Section 163(j) limitation based on adjusted taxable income. We have flagged this issue for review by Sylvia Hartwell, Specialist Partner in the Tax Group, who is preparing a forthcoming memorandum on the deductibility of interest and OID on the Term Loan B, including a comprehensive Section 163(j) analysis. That memorandum is expected on or about March 5, 2025.
Lender Perspective. Lenders will generally be required to accrue the OID as ordinary income over the life of the loan using the constant yield method prescribed by Treasury regulations, regardless of when the OID is actually received in cash. This treatment is a consideration for institutional lenders in evaluating the after-tax economics of the Facility.
E. Observations and Comments
Market Comparability. A 50 basis point OID (corresponding to a 99.50 issue price) is within market norms for B1/B+ rated Term Loan B facilities in the current interest rate environment. Recent comparable transactions in the leveraged loan market have featured OIDs in the range of 25 to 75 basis points, with the specific level depending on credit quality, market conditions, and the overall fee package offered to lenders. The 99.50 issue price on the Nexford Term Loan B is at the midpoint of this range and reflects a balanced approach to lender economics.
Market Flex. It is important to note that the OID is subject to the market flex provisions contained in the Commitment Letter. Crescent Harbor retains the right to increase the OID (i.e., decrease the issue price below 99.50) as part of its market flex rights if syndication conditions require a sweetener to achieve full subscription of the Facility. The scope and limitations of the market flex provisions were addressed in detail in the separate Market Flex Provisions Analysis Memorandum dated February 13, 2025. Any exercise of market flex with respect to the OID would increase the total cost to the Borrower and reduce net proceeds available for the dividend recapitalization and/or cash to balance sheet.
Sources and Uses Reconciliation. We recommend confirming that the OID of $7,000,000 is separately tracked from the Arrangement Fee of $7,000,000 in the sources and uses. Both amounts are components of the approximately $38,625,000 total transaction fees and expenses, but they serve different economic functions and flow through different accounting and tax channels. The OID is a non-cash item at closing that manifests as a reduction in net proceeds, whereas the Arrangement Fee is a cash disbursement on the closing date.
V. Upfront Fee to Participating Lenders
A. Amount and Structure
The Fee Letter provides for an upfront fee (the "Upfront Fee") of 100 basis points (1.00%) of each participating lender's commitment amount. The Upfront Fee is payable to each lender that commits to the syndication of the Term Loan B and funds its commitment on the closing date. The Upfront Fee is intended to incentivize lender participation in the syndication and to compensate lenders for their commitment of capital.
The Upfront Fee is separate from, and in addition to, the OID. While the OID provides incremental yield over the life of the loan, the Upfront Fee is a cash payment made at closing and represents immediate compensation to lenders for their participation.
B. Funding Mechanics
The Upfront Fee is funded by the Borrower from the gross proceeds of the Term Loan B on the closing date. Each syndicate lender receives its Upfront Fee based on its final commitment allocation as determined through the syndication process. Payment is made by the administrative agent (Crescent Harbor) on behalf of the Borrower as part of the closing date funds flow.
Based on preliminary indicated commitments received by the Crescent Harbor syndication desk as of the date of this memorandum, the following illustrative calculations reflect expected Upfront Fee amounts for the identified lenders:
The foregoing allocations are preliminary and subject to change based on the outcome of the syndication process, including investor feedback following the bank meeting scheduled for February 27, 2025. Final allocations will be determined by Crescent Harbor in its capacity as bookrunner, in consultation with Nexford and Stonebridge.
The total Upfront Fee across the full $1,400,000,000 Facility is:
$1,400,000,000 × 1.00% = $14,000,000
C. Tiered Fee Structure / Title Economics
The Fee Letter specifies a tiered upfront fee schedule based on the syndicate title and commitment level of each lender, which is a customary feature in leveraged loan syndications. The 100 basis point Upfront Fee referenced above applies to the base tier, which encompasses general syndicate lenders and those participating at the standard commitment level.
Certain lenders that are expected to join the syndicate with elevated titles may receive incremental economics reflecting their enhanced roles and larger commitments. Specifically, Ironwood Capital Markets, LLC and Northvane Securities, Inc. are expected to join the syndicate as joint lead arrangers on or about March 7, 2025, following the completion of the initial syndication phase. Any incremental fees associated with their arranger titles would be documented in separate co-arranger fee letters to be negotiated directly between Crescent Harbor and those institutions. Such co-arranger fee letters are not part of the Fee Letter under review and will be the subject of a separate analysis if and when they are presented to C&H for review.
The Fee Letter expressly reserves to Crescent Harbor the right to allocate and adjust fees within the syndicate as part of its bookrunner discretion. This is a standard provision that enables the bookrunner to manage the economics of the syndication, including by offering enhanced fees to anchor investors or by reallocating fee economics among tiers to optimize the distribution of commitments. Any such allocation or adjustment is subject to the constraint that the overall fee budget contemplated by the Fee Letter is not exceeded without the Borrower's prior consent.
D. Observations and Comments
Market Comparability. An Upfront Fee of 100 basis points is consistent with prevailing market terms for sponsor-backed Term Loan B transactions in the B1/B+ rating category. Upfront fees in the leveraged loan market have generally ranged from 50 to 150 basis points in recent quarters, with the specific level depending on credit quality, spread levels, and the overall competitiveness of the offering. The 100 basis point level for the Nexford Term Loan B represents a market-clearing fee that is expected to support strong syndication demand.
Combined Day-One Economics. When combined with the 50 basis point OID, the total "day one" economics to syndicate lenders is effectively 150 basis points (100 bps Upfront Fee + 50 bps OID). This translates to an attractive entry point for institutional investors, as lenders effectively acquire the Term Loan B at an effective cost basis of 98.50 cents on the dollar (par less the combined OID and upfront fee value). This combined economic package, together with the SOFR + 400 bps coupon, is expected to generate significant investor interest and facilitate a timely and efficient syndication.
Fee Budget Reconciliation. The $14,000,000 in aggregate Upfront Fees is the single largest component of the approximately $38,625,000 total transaction fees and expenses. The complete fee reconciliation is as follows:
• Arrangement Fee (Crescent Harbor): $7,000,000
• OID (aggregate discount): $7,000,000
• Upfront Fees (syndicate lenders): $14,000,000
• Subtotal — Bank/Lender Fees: $28,000,000
• Legal, advisory, rating agency, title, appraisal, and other professional fees: ~$10,625,000
• Total Transaction Fees and Expenses: ~$38,625,000
The approximately $10,625,000 in non-bank fees includes, among other items, legal fees payable to C&H (as Borrower's counsel), Kellner Brandt & Associates LLP (as Granite Peak's counsel), and the arranger's counsel; financial advisory fees payable to Stonebridge Advisory Group, LLC; credit rating fees payable to Keystone Ratings Group, Inc. and Sentinel Credit Analytics, LLC; and appraisal, title, and recording fees associated with the collateral package.
VI. Confidentiality Provisions
The Fee Letter contains customary confidentiality provisions that impose restrictions on the disclosure of its terms and conditions. These provisions are consistent with market practice for leveraged loan fee letters and are designed to protect the commercially sensitive fee and discount information from broad dissemination.
General Obligation. The Fee Letter provides that its terms, conditions, and existence as a separate document are confidential and may not be disclosed to any third party without the prior written consent of Crescent Harbor, except as expressly permitted under the enumerated exceptions.
Permitted Exceptions. The following disclosures are permitted without the prior consent of Crescent Harbor:
(a) Disclosure to Nexford's and Granite Peak's respective legal counsel — specifically, Calderwood & Harkness LLP (as counsel to the Borrower) and Kellner Brandt & Associates LLP (as counsel to Granite Peak) — in each case subject to such counsel's professional obligations of confidentiality and, to the extent requested by Crescent Harbor, written confidentiality undertakings.
(b) Disclosure to Nexford's and Granite Peak's financial advisors — specifically, Stonebridge Advisory Group, LLC — subject to customary confidentiality undertakings binding on such advisors.
(c) Disclosure to Nexford's independent accountants — specifically, Ashworth & Kendrick LLP — subject to customary confidentiality undertakings, and solely to the extent necessary for accounting, auditing, or tax purposes.
(d) Disclosure required by applicable law, rule, or regulation, or by order of any court of competent jurisdiction, governmental authority, or regulatory body, provided that the disclosing party uses commercially reasonable efforts to provide prior notice to Crescent Harbor and to minimize the scope of such disclosure.
(e) Disclosure in connection with any legal proceeding to enforce rights under, or arising out of, the Fee Letter or the Commitment Letter.
(f) Aggregate fee information may be disclosed in credit agreement schedules, financial statements, and related disclosures to the extent required by applicable accounting standards (including GAAP or IFRS), securities laws, or the terms of the credit agreement; provided that the specific basis point levels and dollar amounts of the Arrangement Fee, OID, and Upfront Fee need not be separately itemized in such disclosures.
Reference in Other Documents. The Fee Letter provides that the existence of the Fee Letter (but not its specific terms) may be referenced in the credit agreement and the Commitment Letter. This is a standard provision that permits the parties to cross-reference the Fee Letter in publicly available or more broadly circulated documentation without disclosing the underlying fee economics.
Recommendation. We recommend that the C&H deal team ensure that Nexford's key officers — specifically, Michelle Kaplan (Chief Financial Officer), Priya Mehta (Vice President, Treasury), and David Engstrom (General Counsel) — are fully aware of these confidentiality restrictions. This is particularly important in connection with any board of directors presentations, investor communications, or management reports that may reference the Facility's fee economics. Fee amounts should be disclosed in aggregate form only in such contexts, and specific basis point levels and dollar amounts from the Fee Letter should not be included in materials that may be circulated beyond the permitted disclosure group.
VII. Market Flex Interplay
The Fee Letter must be read and interpreted in conjunction with the market flex provisions contained in the Commitment Letter. The market flex provisions were analyzed in detail in the separate Market Flex Provisions Analysis Memorandum dated February 13, 2025, and the following summary is provided here for purposes of understanding the interplay between the Fee Letter economics and the Arranger's flex rights.
Scope of Market Flex. Crescent Harbor's market flex rights under the Commitment Letter include the ability to make the following adjustments to the terms of the Facility if, in Crescent Harbor's reasonable judgment, such adjustments are necessary to achieve a successful syndication:
(a) Interest rate margin increase. Crescent Harbor may increase the interest rate margin (SOFR spread) by up to a specified cap. The specific cap amount is confidential and set forth in the market flex provisions of the Commitment Letter and Fee Letter.
(b) OID increase. Crescent Harbor may increase the OID (i.e., decrease the issue price below the current 99.50 level) to enhance the effective yield to lenders.
(c) Upfront fee increase. Crescent Harbor may increase the Upfront Fee payable to syndicate lenders above the current 100 basis point level.
(d) Structural modifications. Crescent Harbor may modify certain structural features of the Facility, including the amortization rate, financial covenant levels, call protection terms, and other terms that affect the risk/return profile for lenders.
Impact on Borrower. Any exercise of market flex would have a direct and adverse impact on the Borrower's economics. Specifically, an increase in the OID would reduce the net cash proceeds available at closing, an increase in the spread would increase ongoing interest expense, and an increase in the Upfront Fee would increase the total transaction fee burden. In each case, the incremental cost would reduce the amounts available for the dividend recapitalization to Granite Peak and/or the cash retained on the Borrower's balance sheet.
Sunset Provisions. The market flex provisions are time-limited and sunset upon the earlier to occur of: (i) the successful completion of syndication (as determined by Crescent Harbor in its capacity as bookrunner) and (ii) the closing date. Once the market flex rights have expired, Crescent Harbor may not unilaterally modify the Fee Letter economics or other Facility terms.
Current Syndication Outlook. As of the date of this memorandum, Crescent Harbor's leveraged finance team — specifically, Elaine Prescott (Managing Director) and Thomas Nakamura (Director) — has indicated that initial investor feedback from the pre-marketing phase has been constructive. The formal bank meeting is scheduled for February 27, 2025, and the investor response from that meeting will be the primary determinant of whether any flex exercise is required. Based on preliminary indications of interest received to date, Crescent Harbor has indicated that the Facility is expected to be well-received by the institutional investor community and that the exercise of market flex is considered unlikely under current market conditions. However, we note that market conditions remain subject to change, and the C&H team should continue to monitor syndication developments closely through the bank meeting and the subsequent commitment phase.
VIII. Comparison to Commitment Letter Economics
As part of our review, we have conducted a systematic comparison of the Fee Letter terms against the corresponding economic terms set forth in the Commitment Letter executed on February 14, 2025. The purpose of this comparison is to identify any discrepancies or inconsistencies between the two documents. The results of this comparison are summarized below:
Conclusion. No discrepancies have been identified between the Fee Letter and the Commitment Letter with respect to the economic terms of the Facility. The Fee Letter provides the specific basis point levels and dollar amounts for the fees and OID that are referenced in more general terms in the Commitment Letter, and all such specifics are consistent with the economic parameters contemplated by the Commitment Letter.
The interest rate, SOFR floor, maturity, amortization, and other structural terms of the Facility are not addressed in the Fee Letter (which is limited to fee and discount economics) and are governed solely by the Commitment Letter and the definitive credit agreement. We have not identified any Fee Letter provisions that are inconsistent with or that would modify such structural terms.
IX. Sources and Uses Reconciliation
The following table reconciles the Fee Letter amounts within the broader sources and uses framework for the transaction. This reconciliation is based on the preliminary sources and uses prepared by Stonebridge Advisory Group and reflects the Fee Letter economics as reviewed herein.
Sources:
Uses:
Important Note Regarding Net Proceeds. The gross proceeds of the Term Loan B are $1,400,000,000, which represents the aggregate face amount of the Term Loan B commitments. However, due to the 50 basis point OID, the net cash received by Nexford at closing is $1,400,000,000 less $7,000,000 = $1,393,000,000. All uses other than the OID are funded from this $1,393,000,000 in net cash proceeds. The OID is a non-cash reduction in proceeds that is reflected as a day-one discount to the face amount of the loan.
For purposes of the sources and uses, the OID is presented as a use of funds (consistent with the treatment in the Commitment Letter and the Stonebridge model) to ensure that total sources equal total uses. This presentation is an economic convention; from a cash flow perspective, only $1,393,000,000 in cash flows from the lenders to the Borrower, and the Borrower disbursement of funds on the closing date (for debt payoff, dividend, other fees, and cash retention) will total $1,393,000,000.
The C&H team should coordinate with Stonebridge (Andrew Castellano) and Nexford's treasury team (Priya Mehta) to ensure that the final sources and uses, as well as the funds flow memorandum, accurately reflect this distinction between gross proceeds and net cash proceeds.
X. Recommendations and Open Items
Based on our review of the Fee Letter, we set forth the following recommendations and identify the following open items for the attention of the deal team:
1. Execution of the Fee Letter. We recommend that Nexford proceed with execution of the Fee Letter on February 18, 2025, as scheduled, concurrently with the receipt of final commercial confirmation from Michelle Kaplan (Chief Financial Officer) and Priya Mehta (Vice President, Treasury). The Fee Letter should be executed by an authorized officer of Nexford, consistent with the board resolutions adopted on January 13, 2025, which authorized the entry into the Commitment Letter, Fee Letter, and related transaction documents. C&H should confirm that the authorized signatory identified in the board resolutions is available to execute on the target date and that the form of the Fee Letter presented for execution is consistent with the negotiated draft reviewed herein.
2. Tax Analysis. We recommend flagging the OID ($7,000,000) and the Arrangement Fee ($7,000,000) for review by Sylvia Hartwell (Specialist Partner, Tax Group) in connection with her forthcoming memorandum on interest deductibility under Section 163(j) of the Internal Revenue Code. The tax memorandum should address: (a) the proper characterization and amortization period for the OID and Arrangement Fee for federal income tax purposes; (b) the interaction of the OID deduction and the Arrangement Fee deduction (to the extent deductible as a financing cost) with the Section 163(j) business interest expense limitation; and (c) any implications of the OID for the Borrower's reporting obligations to the lenders. The tax memorandum is expected on or about March 5, 2025.
3. Confidentiality Compliance. We recommend circulating the confidentiality restrictions set forth in the Fee Letter (summarized in Section VI of this memorandum) to all C&H team members working on this matter, including Claudia Merritt (Responsible Partner), Ian Blackwood (Billing Partner), and Marcus Leung (Lead Associate), as well as to Nexford's in-house legal counsel, David Engstrom (General Counsel). All team members and advisors should be instructed to treat the specific fee amounts and basis point levels as confidential and to limit disclosure to the permitted exception categories enumerated in the Fee Letter.
4. Market Flex Monitoring. We recommend that the C&H team continue to monitor syndication developments in close coordination with Crescent Harbor's leveraged finance team — specifically, Elaine Prescott (Managing Director) and Thomas Nakamura (Director) — following the bank meeting scheduled for February 27, 2025. The bank meeting will provide critical intelligence regarding investor appetite and pricing expectations, which will in turn inform whether Crescent Harbor is likely to exercise any portion of its market flex rights. If market flex is exercised, the Fee Letter economics will need to be updated and the impact on the sources and uses (particularly the dividend and cash-to-balance-sheet amounts) will need to be recalculated and communicated to Nexford and Granite Peak.
5. Funds Flow Integration. We recommend ensuring that the Arrangement Fee ($7,000,000), OID ($7,000,000), and Upfront Fee ($14,000,000) amounts are accurately reflected in the draft funds flow memorandum, which is to be prepared and circulated closer to the closing date (target distribution date: March 22, 2025). The funds flow memorandum should clearly delineate the cash disbursements (Arrangement Fee and Upfront Fees) from the non-cash items (OID) and should include the wire transfer instructions for each recipient. C&H should coordinate with Crescent Harbor's operations team and Nexford's treasury team to ensure the funds flow memorandum is complete and accurate prior to closing.
6. Co-Arranger Economics. We recommend confirming with Crescent Harbor whether separate fee letters (or co-arranger fee letters) will be required for Ironwood Capital Markets, LLC and Northvane Securities, Inc. when they formally join the syndicate as joint lead arrangers (expected on or about March 7, 2025). In particular, we should clarify: (a) whether any portion of the $7,000,000 Arrangement Fee will be shared with Ironwood and Northvane in connection with their joint lead arranger titles, or whether their compensation will be limited to co-arranger fees documented in separate side letters; and (b) whether C&H will be asked to review or negotiate the co-arranger fee letters on behalf of Nexford, or whether such letters are strictly between the arrangers and do not require Borrower consent or involvement. We should raise these questions with Elaine Prescott at the next status call.
XI. Attachments and Cross-References
A. Attachments
The following documents are attached to this memorandum for reference:
1. Fee Letter — Draft received for review on February 15, 2025; execution copy expected to be finalized and executed on February 18, 2025.
2. Commitment Letter — Executed copy dated February 14, 2025 (for cross-reference purposes in connection with the Fee Letter review).
B. Cross-References to Related C&H Memoranda
This memorandum should be read in conjunction with the following related memoranda prepared by the C&H Banking & Finance team in connection with the Nexford Term Loan B transaction:
1. Commitment Letter Review Memorandum — Dated February 13, 2025. Provides a comprehensive review of the Commitment Letter, including the conditions to funding, representations and warranties, certain funds provisions, and the Arranger's expense reimbursement obligations.
2. Market Flex Provisions Analysis Memorandum — Dated February 13, 2025. Analyzes in detail the market flex provisions contained in the Commitment Letter, including the scope of the Arranger's flex rights with respect to pricing, OID, upfront fees, and structural terms, as well as the limitations and sunset provisions applicable to such rights.
3. Internal Memorandum — Key Economic and Legal Terms Summary — Dated February 11, 2025. Provides a high-level summary of the principal economic and legal terms of the Term Loan B for use by the deal team and for distribution to the client.
4. Term Sheet Issues List and Negotiation Memorandum — Dated February 8, 2025. Identifies and discusses the key negotiation issues arising from the initial term sheet circulated by Crescent Harbor, including the resolution of material open points relating to the financial covenants, call protection, and incremental facility provisions.
5. Tax Memorandum — Deductibility of Interest on Term Loan B (Section 163(j) Analysis) — Forthcoming; expected on or about March 5, 2025. To be prepared by Sylvia Hartwell, Specialist Partner, Tax Group. Will address the deductibility of interest expense (including OID amortization) under Section 163(j) of the Internal Revenue Code and related provisions, as well as the proper tax treatment of the Arrangement Fee and other transaction costs.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum has been prepared by Calderwood & Harkness LLP for the exclusive use of the attorneys and personnel identified herein in connection with their representation of the client in the referenced matter. This memorandum is protected by the attorney-client privilege and the work product doctrine. It is not intended for distribution to, or reliance by, any third party without the prior written consent of Calderwood & Harkness LLP.
Calderwood & Harkness LLP — 425 Lexington Avenue, New York, New York 10017 Matter No. 1005-00001 — Client/Matter Code: IBL-NIH-2025-031
TO: | Claudia Merritt, Responsible Partner, Banking & Finance
Ian Blackwood, Billing Partner, Banking & Finance
FROM: | Sophie Tremblay, Working Associate, Banking & Finance
DATE: | February 17, 2025
RE: | Review of Fee Letter — Nexford Industrial Holdings Inc. / Crescent Harbor Bank, N.A. — $1,400,000,000 Senior Secured Term Loan B
MATTER NO.: | 1005-00001
CLIENT/MATTER CODE: | IBL-NIH-2025-031
Lender | Commitment (Indicated) | Upfront Fee (1.00%)
Crescent Harbor Bank, N.A. (target final hold) | $175,000,000 | $1,750,000
Ironwood Capital Markets, LLC | $200,000,000 | $2,000,000
Northvane Securities, Inc. | $150,000,000 | $1,500,000
Ridgeline Asset Management, LP | $125,000,000 | $1,250,000
Halcyon Credit Partners, LLC | $100,000,000 | $1,000,000
Verdant Institutional Investors, LP | $100,000,000 | $1,000,000
Cascadia Loan Fund III, LP | $75,000,000 | $750,000
Bluewater Fixed Income Fund, LP | $75,000,000 | $750,000
Remaining general syndication (various) | ~$400,000,000 | ~$4,000,000
Total | $1,400,000,000 | $14,000,000
Term | Commitment Letter | Fee Letter | Status
Facility Amount | $1,400,000,000 | $1,400,000,000 | Consistent
Interest Rate | Term SOFR + 400 bps | N/A (not addressed in Fee Letter) | Consistent (referenced in Commitment Letter)
SOFR Floor | 0.75% | N/A (not addressed in Fee Letter) | Consistent (referenced in Commitment Letter)
Original Issue discount | 50 bps (99.50 issue price) | 50 bps (99.50 issue price) | Consistent
Arrangement Fee | Payable per the Fee Letter (50 bps referenced) | 50 bps ($7,000,000) | Consistent
Upfront Fee | "Customary upfront fees" per the Fee Letter | 100 bps ($14,000,000) | Consistent
Source | Amount
Term Loan B (gross proceeds) | $1,400,000,000
Total Sources | $1,400,000,000
Use | Amount
Refinance existing first lien term loan (Atlas Meridian Bank, N.A.) | $879,375,000
Terminate existing revolving credit facility (Atlas Meridian Bank, N.A.; undrawn) | $0
Dividend to Granite Peak NIH Holdings, LLC | ~$335,000,000
Transaction fees and expenses (total) | ~$38,625,000
— Arrangement Fee (Crescent Harbor Bank, N.A.) | $7,000,000
— OID (aggregate discount) | $7,000,000
— Upfront Fees (syndicate lenders) | $14,000,000
— Legal, advisory, rating agency, and other professional fees | ~$10,625,000
Cash to balance sheet | ~$147,000,000
Total Uses | $1,400,000,000

CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, New York 10017

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