1005-00001 · Nexford Industrial Holdings · Transaction Documents/Credit Agreement

credit-agreement-issues-list-v1.xlsx DOCUMENT Finance & Banking

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[sheet: Cover]

Field	Value
Document Title	Credit Agreement Issues List — Version 1.0
Matter	Nexford Industrial Holdings Inc. — $1,400,000,000 Senior Secured Term Loan B Refinancing and Dividend Recapitalization
Matter No.	1005-00001
Client/Matter Code	IBL-NIH-2025-031
Date	February 26, 2025
Prepared By	Marcus Leung, Calderwood & Harkness LLP
Reviewed By	Claudia Merritt, Calderwood & Harkness LLP
Reference Document	NIH Credit Agreement — Draft 1 (circulated by Whitfield & Gage LLP on February 24, 2025)
Borrower	Nexford Industrial Holdings Inc.
Administrative Agent / Collateral Agent	Crescent Harbor Bank, N.A.
Agent's Counsel	Whitfield & Gage LLP (Margaret Ashby / Jonathan Ferris)
Borrower's Counsel	Calderwood & Harkness LLP (Claudia Merritt / Marcus Leung / Sophie Tremblay)
Sponsor's Counsel	Kellner Brandt & Associates LLP (Patricia Voss)
Sponsor	Granite Peak Capital Partners, LP (Fund IV)
Governing Law	State of New York
Facility Amount	$1,400,000,000
CUSIP (Anticipated)	65432X AA1
LoanX ID (Anticipated)	LX-234567
Status	DRAFT — Internal Working Document — Privileged & Confidential
Distribution	C&H Deal Team Only (Claudia Merritt, Ian Blackwood, Marcus Leung, Sophie Tremblay, Sylvia Hartwell)
Next Steps	C&H mark-up of Draft 1 targeted for return to W&G by March 3, 2025

[sheet: Definitions]

Issue #	Section Ref	Defined Term / Topic	Issue Description	Borrower Position	Agent / W&G Position	Priority	Status	Assigned To	Notes / Comments
D-01	§1.01	"Adjusted EBITDA"	W&G draft uses narrow add-back language; does not include all $28,000,000 of permitted add-backs identified by the company ($12M acquisition-related, $8.5M non-recurring restructuring, $4.5M sponsor management fees, $3M integration costs). Definition caps add-backs at 15% of EBITDA instead of customary 25% for sponsor-backed TLBs.	Expand add-back cap to 25% of reported EBITDA; ensure all four categories of add-backs ($28M total) are expressly enumerated as permitted adjustments. Reported EBITDA of $357M + $28M add-backs = $385M Adjusted EBITDA must be achievable under the definition.	W&G draft limits add-backs to 15% of reported EBITDA (~$53.55M cap). Categories listed are narrower than borrower's request.	High	Open	Marcus Leung	Critical for leverage calculations; pro forma first lien net leverage of 3.38x depends on $385M Adjusted EBITDA figure. Cross-reference to financial covenant, ECF sweep, and RP baskets.
D-02	§1.01	"Consolidated Net Income"	Definition includes overly broad exclusions that would reduce builder basket capacity. Excludes all non-cash gains and extraordinary items without corresponding add-back for non-cash losses.	Ensure symmetric treatment: if non-cash gains are excluded, non-cash losses should also be excluded. Builder basket starts at $50M plus 50% of cumulative CNI from Q1 2025; asymmetric definition disadvantages borrower.	W&G draft excludes non-cash gains but includes non-cash losses in CNI computation.	Medium	Open	Marcus Leung	Affects builder basket mechanics and restricted payment capacity.
D-03	§1.01	"Change of Control"	W&G draft sets ownership threshold at 30% of voting equity; term sheet and borrower's expectation is 35%. Draft also does not clearly carve out transfers among Granite Peak Capital Partners, LP and its affiliated funds. Third trigger (cross-default to Senior Unsecured Notes Indenture change of control) is acceptable.	Threshold should be 35% (not 30%) consistent with term sheet. Carve-out needed for Granite Peak and its affiliates (including GP Fund IV Co-Invest, LP and any successor funds). Nexford must remain direct wholly-owned subsidiary of Granite Peak NIH Holdings, LLC — this prong is acceptable.	W&G draft at 30% threshold; no express affiliate carve-out for Granite Peak entities.	High	Open	Marcus Leung	Change of control triggers acceleration at Required Lenders' direction. Must align with indenture trigger for Senior Unsecured Notes (Pinnacle Trust Company as trustee). Compare with committed term sheet.
D-04	§1.01	"Excess Cash Flow"	Deductions from ECF calculation are too narrow. Does not deduct voluntary prepayments, capital expenditures in excess of amounts deducted in computing Adjusted EBITDA, cash restructuring charges, or permitted acquisition consideration paid in cash.	Add deductions for (i) voluntary prepayments of the Term Loan and other first lien debt, (ii) cash CapEx and acquisitions to the extent not already deducted, (iii) cash restructuring charges, (iv) increases in working capital. Sweep tiers: 50% above 4.25x, 25% between 4.25x-3.50x, 0% at or below 3.50x first lien net leverage.	W&G includes only mandatory deductions (interest, scheduled amortization, taxes). Silent on voluntary prepayment credit.	High	Open	Marcus Leung	ECF sweep directly impacts cash available for operations and distributions. Model shows Year 1 ECF could be material given ~$307M unlevered free cash flow ($385M Adj. EBITDA – $78M CapEx).
D-05	§1.01	"First Lien Net Leverage Ratio"	Numerator includes all first lien secured debt; denominator is LTM Adjusted EBITDA. Issue: W&G draft does not net unrestricted cash and cash equivalents. Term sheet provides for netting of balance sheet cash.	Numerator: all first lien secured debt ($1,400,000,000 at closing). Denominator: LTM Adjusted EBITDA ($385,000,000). Must net unrestricted cash and cash equivalents (pro forma $100,000,000 at closing). Pro forma calculation: ($1,400M – $100M) / $385M = 3.38x.	W&G draft uses gross leverage (no netting of cash). Would result in 3.64x at closing ($1,400M / $385M).	High	Open	Marcus Leung	Affects covenant compliance, ECF sweep tiers, RP baskets, incremental capacity. Critical to resolve.
D-06	§1.01	"Total Net Leverage Ratio"	Same netting issue as First Lien Net Leverage Ratio. Also, W&G draft includes all indebtedness in numerator without clearly excluding non-recourse debt of unrestricted subsidiaries.	Must net cash. Total net leverage at closing: ($1,400M + $250M unsecured notes – $100M cash) / $385M = 4.03x. Exclude non-recourse debt of unrestricted subs.	W&G draft does not net cash; includes all consolidated debt.	Medium	Open	Marcus Leung	Total net leverage tested for unlimited restricted payments (3.75x threshold). Netting cash is critical for borrower flexibility.
D-07	§1.01	"Incremental Facility" / "Incremental Term Loans"	Free-and-clear basket in W&G draft set at $200M fixed amount only. Term sheet provides for greater of $280M and 100% of LTM EBITDA (~$385M). No ratio-based incremental capacity specified.	Free-and-clear basket: greater of $280,000,000 and 100% LTM EBITDA. Ratio-based capacity: unlimited subject to pro forma compliance with 4.50x first lien net leverage (calculated on a net basis). Must also permit incremental revolving commitments.	W&G draft: $200M fixed free-and-clear only; no ratio-based incremental.	High	Open	Marcus Leung	Incremental capacity is key for future M&A and operational flexibility. Most favored nation protection applies to incremental term loans within first 12 months with 50 bps threshold — confirm this is properly drafted.
D-08	§1.01	"Most Favored Nation" (MFN)	W&G draft includes MFN protection for incremental term loans but applies it without a sunset and without the agreed 50 bps threshold. All incremental term loans would trigger a ratchet to existing TLB spread.	MFN applies only to incremental term loans incurred within the first 12 months of closing. 50 bps threshold (i.e., spread on initial TLB increased only to within 50 bps of any higher-priced incremental). Must include sunset after 12 months and customary exclusions for acquisition-related incremental facilities.	W&G draft: MFN applies for life of facility with no threshold or carve-outs.	High	Open	Marcus Leung	Most favored nation protection must be properly scoped. Over-broad MFN limits borrower's ability to price incremental debt competitively.
D-09	§1.01	"Permitted Indebtedness"	W&G draft omits several customary baskets. Missing: capital lease / purchase money basket ($50M per term sheet), general basket ($35M per term sheet), and ratio-based incremental equivalent debt.	Include all baskets from term sheet: (i) incremental per D-07 above, (ii) capital leases and purchase money debt up to $50,000,000, (iii) general basket of $35,000,000, (iv) existing Senior Unsecured Notes ($250M, 7.250% due 2028), (v) intercompany debt, (vi) customary other carve-outs.	W&G includes incremental (narrower than term sheet) and existing indebtedness; omits cap lease, general basket, and ratio-based equivalent debt.	High	Open	Sophie Tremblay	Cross-reference to negative covenant on indebtedness (Article VI).
D-10	§1.01	"Term SOFR" and SOFR Adjustment	W&G draft references Term SOFR but does not include credit spread adjustment (CSA). Term sheet specifies 10 bps CSA for 1-month SOFR and 15 bps for 3-month SOFR. SOFR floor of 0.75% is correctly stated.	Include CSA: +10 bps for 1-month SOFR, +15 bps for 3-month SOFR. Confirm SOFR floor at 0.75%. Interest rate = Term SOFR (with CSA) + 400 bps margin. Default rate: +200 bps above applicable rate.	W&G draft: Term SOFR referenced without CSA; floor at 0.75% is present.	Medium	Open	Marcus Leung	Affects all-in interest cost. At assumed SOFR of 4.35%, total rate = 4.35% + 0.10% CSA (1-month) + 4.00% margin = 8.45%.
D-11	§1.01	"Restricted Payment"	Definition is overly broad; captures routine intercompany transactions and tax-sharing payments that should be carved out.	Exclude from definition: (i) tax-sharing payments to Holdings (Granite Peak NIH Holdings, LLC) for consolidated/combined tax obligations, (ii) payments of management fees to Granite Peak Capital Partners, LP up to $4.5M/year, (iii) customary intercompany dividends among Loan Parties.	W&G draft treats all upstream distributions as restricted payments without carve-outs.	Medium	Open	Sophie Tremblay	Affects dividend capacity and sponsor fee payments.
D-12	§1.01	"Collateral" / "Excluded Assets"	W&G draft includes motor vehicles regardless of value and commercial tort claims above $1M. Term sheet exclusions: motor vehicles with book value below $250K, letter of credit rights under $1M, commercial tort claims under $2.5M.	Excluded assets per term sheet: motor vehicles below $250,000 book value per vehicle, letter of credit rights under $1,000,000, commercial tort claims under $2,500,000, and any asset where cost of pledging is excessive relative to benefit.	W&G draft: motor vehicles included regardless of value; commercial tort threshold at $1M (vs. $2.5M in term sheet).	Medium	Open	Sophie Tremblay	Affects scope of security agreement and perfection requirements.
D-13	§1.01	"Material Adverse Effect" (MAE)	W&G draft MAE definition does not include customary carve-outs for general economic/industry conditions, changes in law, or changes in GAAP.	Include carve-outs for: (i) general economic or financial market conditions, (ii) conditions affecting the manufacturing/industrials industry generally, (iii) changes in law or GAAP, (iv) acts of war or terrorism, (v) any effects of the announcement of this transaction. MAE should be measured on the Borrower and Restricted Subsidiaries taken as a whole.	W&G draft: broad MAE without carve-outs.	Medium	Open	Marcus Leung	MAE is a condition precedent to closing and an event of default trigger. Must be properly scoped.
D-14	§1.01	"Maturity Date"	Confirm maturity date is March 28, 2032 (7 years from closing date of March 28, 2025). W&G draft states maturity as the earlier of 7 years and 91 days prior to maturity of any refinancing indebtedness — the 91-day springing maturity is not in the term sheet.	Maturity: March 28, 2032 (7 years). Delete the 91-day springing maturity provision — there is no refinancing indebtedness to which it would apply.	W&G includes 91-day springing maturity.	Low	Open	Marcus Leung	Standard issue; confirm with Crescent Harbor that springing maturity is not needed given no junior or mezzanine debt.

[sheet: Conditions Precedent]

Issue #	Section Ref	Topic	Issue Description	Borrower Position	Agent / W&G Position	Priority	Status	Assigned To	Notes / Comments
CP-01	§4.01(a)	Solvency Certificate	W&G draft requires solvency certificate from an independent financial advisor. Borrower prefers CFO certificate.	Solvency certificate to be delivered by Michelle Kaplan (CFO) of Nexford on a consolidated basis (Borrower and Subsidiaries). No requirement for independent financial advisor.	W&G draft requires third-party solvency opinion.	Medium	Open	Marcus Leung	Market standard for TLB is CFO certificate, not independent opinion.
CP-02	§4.01(b)	Legal Opinions — Scope	W&G draft requires opinions on all 50-state enforceability. Borrower to deliver NY law enforceability opinion (Calderwood & Harkness), IL law enforceability and perfection opinion (Hargrove & Whitmore LLP / Robert Kimura), and DE entity opinions (Briarcliff Legal Group PA / Catherine Ellsworth). No requirement for opinions in every state.	Limit opinion requirement to: (i) C&H NY law opinion (enforceability, no conflicts, UCC perfection), (ii) Hargrove & Whitmore IL law opinion, (iii) Briarcliff Legal Group DE entity opinions (organization, good standing, authority for all DE entities).	W&G draft: opinions required for all jurisdictions of organization of each Loan Party.	Medium	Open	Marcus Leung	Local counsel opinions in PA, SC, TX, MI are not customary for TLBs; those entities are organized in DE (except NMS in IL). UCC filings cover perfection.
CP-03	§4.01(c)	Pro Forma Compliance Certificate	W&G draft requires compliance with 5.00x first lien net leverage at closing; this is a springing covenant. Should only require delivery of a pro forma compliance certificate demonstrating leverage ratios, not actual covenant compliance at closing since the financial covenant is springing.	Deliver pro forma compliance certificate showing first lien net leverage of ~3.38x and total net leverage of ~4.03x, each for informational purposes. Springing covenant (5.00x) tested only when revolving borrowings exceed 40% of commitments — no revolver being established in this transaction.	W&G draft appears to require actual covenant compliance as a condition precedent.	Medium	Open	Marcus Leung	Pro forma leverage is well within 5.00x. Issue is structural — springing covenant should not be a closing condition.
CP-04	§4.01(d)	No Material Adverse Effect	Condition that no MAE has occurred since December 31, 2024. Must be tied to properly defined MAE (see D-13).	Acceptable if MAE definition is properly revised per D-13 above (with customary carve-outs). Measured from LTM reporting date of December 31, 2024.	W&G draft: no MAE since fiscal year-end (12/31/2024) without reference to carve-outs in MAE definition.	Medium	Open	Marcus Leung	Cross-reference to D-13.
CP-05	§4.01(e)	Organizational Documents and Good Standing	W&G requires certified copies of organizational documents and good standing certificates for all Loan Parties dated within 3 business days of closing. Borrower requests 5 business days (standard).	Good standing certificates dated within 5 business days of closing (March 28, 2025). Covers Nexford, Granite Peak NIH Holdings, and all 11 Subsidiary Guarantors across DE, IL, PA, SC, TX, MI.	W&G draft: within 3 business days.	Low	Open	Sophie Tremblay	Administrative timing issue; 5 business days is market standard.
CP-06	§4.01(f)	Payoff Letter — Atlas Meridian Bank	W&G draft requires payoff letter from Atlas Meridian Bank, N.A. (Sandra Vickers, MD Portfolio Management) but does not specify that it must include lien release and UCC-3 termination commitments.	Payoff letter must include: (i) payoff amount ($879,375,000 — $875M principal + ~$4,375,000 accrued interest), (ii) irrevocable commitment to release all liens, (iii) authorization for UCC-3 termination filings in DE, IL, PA, (iv) commitment to deliver original stock certificates and intercompany notes held as collateral.	W&G draft: requires payoff letter but silent on lien release mechanics.	High	Open	Marcus Leung	Existing revolver ($190M, undrawn) also to be terminated. Prepayment premium waived per Fourth Amendment (September 12, 2024).
CP-07	§4.01(g)	Mortgage Delivery — Timing	W&G draft requires mortgages delivered and recorded at closing for all four properties. Borrower requests post-closing delivery (standard for TLBs).	Mortgages for four properties (Schaumburg IL / Cook County, Rockford IL / Winnebago County, Greenville SC / Greenville County, Houston TX / Harris County) to be delivered post-closing with a 30-day deadline (i.e., by April 30, 2025). Title insurance from Landmark Title Assurance Company also post-closing.	W&G draft: at closing delivery required for all mortgages.	High	Open	Marcus Leung	Total appraised value of mortgaged properties: $193,000,000 ($85M + $42M + $38M + $28M). Post-closing mortgage delivery is standard in TLB market.
CP-08	§4.01(h)	Rating Confirmation	W&G draft requires both rating agencies to have assigned facility ratings as a condition to closing. Ratings have been assigned (Keystone B1 CFR / B1 facility; Sentinel B+ CCR / BB- facility) as of February 26, 2025.	Condition should be that ratings have been assigned — not that specific rating levels are maintained. Ratings already assigned by Keystone Ratings Group (B1 CFR; B1 facility) and Sentinel Credit Analytics (B+ CCR; BB- facility).	W&G draft: requires minimum B3/B- facility rating as closing condition.	Medium	Open	Marcus Leung	Current ratings well above any minimum threshold. Issue is whether rating level should be a condition.
CP-09	§4.01(i)	KYC / Anti-Money Laundering / OFAC	W&G draft requires delivery of all KYC documentation at least 5 business days prior to closing. Borrower agrees but requests that the list of required documents be specified in advance.	Borrower to deliver: W-9s for all domestic Loan Parties, beneficial ownership certifications, OFAC screening confirmations, USA PATRIOT Act documentation. Must confirm no Loan Party is a Sanctioned Person. Deliver at least 5 business days before March 28, 2025 closing.	W&G draft: 5 business days prior; open-ended documentation requirement.	Low	Open	Sophie Tremblay	Sylvia Hartwell coordinating W-8/W-9 collection. OFAC and sanctions compliance confirmed in regulatory review memo (February 27, 2025).

[sheet: Representations & Warranties]

Issue #	Section Ref	Topic	Issue Description	Borrower Position	Agent / W&G Position	Priority	Status	Assigned To	Notes / Comments
RW-01	§3.01	Organization and Good Standing	W&G draft requires representation that each Loan Party is duly organized and in good standing in its jurisdiction of organization and each jurisdiction where it conducts business. Does not distinguish between domestic and foreign subsidiaries (Nexford Canada Holdings ULC and Nexford Canada Manufacturing, Inc. are not Loan Parties).	Representation limited to the Borrower and Guarantors (13 entities: Holdings, Nexford, and 11 Subsidiary Guarantors). Foreign subsidiaries (NCH ULC — British Columbia; NCM — Ontario) are excluded from Loan Party representations. Nexford International Holdings, Inc. is a Guarantor (CFC holdco) — limited pledge of 65% voting / 100% non-voting equity in NCH ULC.	W&G draft: applies to Borrower and all subsidiaries including foreign subs.	Medium	Open	Sophie Tremblay	Briarcliff Legal Group PA (Catherine Ellsworth) delivering DE entity opinions. Hargrove & Whitmore LLP (Robert Kimura) for IL entities.
RW-02	§3.04	Financial Statements	W&G draft requires representation that audited financial statements for the last three fiscal years are complete and fairly present financial condition. Must confirm auditor is Ashworth & Kendrick LLP (Helen Yamamoto, engagement partner). LTM financials as of December 31, 2024.	Representation should be limited to audited financials prepared in accordance with GAAP, audited by Ashworth & Kendrick LLP. LTM period ending December 31, 2024. Key metrics: Revenue $2,100,000,000; Reported EBITDA $357,000,000; Adjusted EBITDA $385,000,000; CapEx $78,000,000.	W&G draft: requires representation for five fiscal years; no specification of auditor.	Low	Open	Sophie Tremblay	Three-year audited financials is market standard.
RW-03	§3.06	Litigation	W&G draft requires disclosure of all pending or threatened litigation, arbitration, or governmental proceedings with expected liability above $1M. Threshold should be higher for a $2.1B revenue company.	Disclosure threshold: $5,000,000 individually or $15,000,000 in the aggregate, consistent with materiality thresholds in comparable TLB transactions for companies of this size.	W&G draft: $1,000,000 threshold.	Medium	Open	Marcus Leung	Litigation review memo (February 26, 2025) to inform schedule. No material litigation currently identified.
RW-04	§3.08	Compliance with Laws / Sanctions / Anti-Corruption	Representations regarding sanctions compliance, OFAC, FCPA, USA PATRIOT Act, and Bank Secrecy Act. W&G draft is generally acceptable but uses overly broad knowledge qualifier for agents of Loan Parties.	Representation that no Loan Party, director, officer, or employee is a Sanctioned Person. Knowledge qualifier for agents ("to the knowledge of the Loan Parties") is acceptable. Confirm no proceeds will be used in violation of any Sanctions administered by OFAC, the U.S. Department of State, or other governmental authorities. FCPA and USA PATRIOT Act compliance representations are acceptable as drafted.	W&G draft: substantially acceptable with minor knowledge qualifier issue.	Low	Open	Marcus Leung	Regulatory compliance review memo (February 27, 2025) confirms clean OFAC screening. Certification to be delivered at closing.
RW-05	§3.10	Collateral and Security Interests	W&G draft requires representation that the security documents create valid, perfected first-priority liens on all Collateral. Must carve out permitted liens and post-closing items (mortgages due April 30, 2025).	Representation qualified by: (i) permitted liens, (ii) post-closing mortgage delivery period (April 30, 2025 deadline), (iii) filing of UCC-1 financing statements in DE, IL, PA, SC, TX, MI, (iv) delivery of control agreements. First-priority lien subject to intercreditor agreement with Pinnacle Trust Company (unsecured noteholders).	W&G draft: unqualified first-priority lien representation at closing.	Medium	Open	Marcus Leung	UCC-1 filings at closing; mortgages post-closing. Intercreditor agreement (First Lien / Unsecured) governs priority as between secured and unsecured claims.
RW-06	§3.11	Environmental Matters	W&G draft requires representation of compliance with all environmental laws without materiality qualifier.	Add materiality qualifier: compliance in all material respects. Phase I ESAs conducted by Clearwater Environmental Sciences, Inc. (Dr. Nathan Foley) for four mortgaged properties — no material recognized environmental conditions.	W&G draft: unqualified environmental compliance representation.	Medium	Open	Sophie Tremblay	Environmental memo (February 22, 2025) summarizes Phase I results.
RW-07	§3.12	Insurance	W&G draft requires representation that Loan Parties maintain insurance programs consistent with prudent industry practice. Needs to reference actual carriers.	Insurance maintained through: property & casualty (Continental Shield Underwriters, Inc.), D&O (Meridian Specialty Insurance Co.), brokered by Vantage Risk Advisors, LLC (Rachel Sorensen). Representation should reference compliance with credit agreement insurance covenants, not an abstract standard.	W&G draft: generic prudent industry practice standard.	Low	Open	Sophie Tremblay	Insurance review memo (February 24, 2025) confirms adequacy of coverage.
RW-08	§3.14	Intellectual Property	W&G requires representation that Loan Parties own or have valid rights to all IP necessary for business operations, free of all liens other than permitted liens.	Acceptable subject to: (i) IP lien search results (memo February 19, 2025 — clean results), (ii) excluded assets carve-out for de minimis IP, (iii) IP security agreement to be executed at closing.	W&G draft: representation acceptable in substance; minor wording refinements needed.	Low	Open	Sophie Tremblay	IP security agreement drafted by C&H.
RW-09	§3.16	Use of Proceeds	Representation that proceeds will be used solely for: (i) refinancing existing Atlas Meridian facilities ($879,375,000), (ii) dividend to Granite Peak NIH Holdings (~$335,000,000), (iii) payment of transaction fees and expenses (~$38,625,000), (iv) cash to balance sheet ($147,000,000). Total: $1,400,000,000.	Use of proceeds representation should match the sources and uses table. Confirm no proceeds used in violation of Sanctions, OFAC, anti-corruption laws, or anti-money laundering laws.	W&G draft: generally consistent but does not enumerate specific amounts.	Low	Open	Marcus Leung	Funds flow memorandum (draft) to be prepared by March 22, 2025.

[sheet: Affirmative Covenants]

Issue #	Section Ref	Topic	Issue Description	Borrower Position	Agent / W&G Position	Priority	Status	Assigned To	Notes / Comments
AC-01	§5.01	Financial Reporting	W&G draft requires delivery of annual audited financials within 90 days and quarterly unaudited financials within 45 days of quarter-end. Borrower requests 120 days / 60 days (standard for sponsor-backed private companies).	Annual audited financials: 120 days after fiscal year-end (December 31). Quarterly unaudited financials: 60 days after quarter-end. Auditor: Ashworth & Kendrick LLP.	W&G draft: 90 days annual / 45 days quarterly.	Medium	Open	Marcus Leung	Nexford is a private company; 120/60 is market for sponsor-backed TLBs.
AC-02	§5.01(c)	Compliance Certificate	W&G requires quarterly compliance certificate with leverage ratio calculations. Should be tied to financial covenant testing — springing covenant tested only when revolving borrowings exceed 40% of revolving commitments.	Quarterly compliance certificate to include calculation of first lien net leverage and total net leverage ratios for informational purposes. Financial covenant (5.00x first lien net leverage) tested only when revolving borrowings > 40% of revolving commitments. No new revolver established in this transaction.	W&G draft: quarterly compliance certificate with covenant compliance certification regardless of testing trigger.	Medium	Open	Marcus Leung	Distinguish between informational reporting and covenant compliance testing.
AC-03	§5.04	Insurance Maintenance	W&G draft requires maintenance of insurance programs but includes an overly prescriptive list of required coverages and minimum amounts. Should reference commercially reasonable insurance consistent with industry practice.	Maintain insurance consistent with industry practice for similarly situated companies. Specific coverage types and amounts to be set forth in a schedule to be agreed. Broker: Vantage Risk Advisors, LLC. Current carriers: Continental Shield Underwriters, Inc. (P&C); Meridian Specialty Insurance Co. (D&O). Collateral Agent named as additional insured and loss payee on property policies.	W&G draft: specific minimum coverage amounts that may not align with current program.	Low	Open	Sophie Tremblay	Insurance review memo (February 24, 2025) addresses current program.
AC-04	§5.06	Additional Guarantors / After-Acquired Subsidiaries	W&G draft requires joinder of new domestic subsidiaries as Guarantors within 15 days of formation or acquisition. Borrower requests 30 days (standard).	30-day joinder period for new domestic restricted subsidiaries. Foreign subsidiaries excluded from guarantee requirement. CFC holdco (NIH Intl) subject to limited pledge only (65% voting / 100% non-voting of first-tier foreign subs).	W&G draft: 15-day joinder period.	Low	Open	Sophie Tremblay	Current Subsidiary Guarantors: 11 entities. Nexford Canada Holdings ULC and Nexford Canada Manufacturing are excluded foreign subs.
AC-05	§5.08	Post-Closing Obligations	W&G draft includes post-closing covenants but with a 15-day deadline for mortgage delivery. Term sheet and borrower's expectation is 30 days (April 30, 2025).	Post-closing period of 30 days for: (i) delivery of recorded mortgages for all four properties (Cook County IL, Winnebago County IL, Greenville County SC, Harris County TX), (ii) delivery of title insurance policies from Landmark Title Assurance Company, (iii) surveys and environmental compliance letters. Deadline: April 30, 2025.	W&G draft: 15-day post-closing period.	Medium	Open	Marcus Leung	Coordinate with Hargrove & Whitmore (IL local counsel) for Cook and Winnebago County filings. Greystone Valuation Services (Daniel Pritchard) appraisals already complete.

[sheet: Negative Covenants]

Issue #	Section Ref	Topic	Issue Description	Borrower Position	Agent / W&G Position	Priority	Status	Assigned To	Notes / Comments
NC-01	§6.01	Limitation on Indebtedness	W&G draft indebtedness covenant is more restrictive than term sheet. Missing baskets noted in D-09. Also, does not clearly permit the $250,000,000 Senior Unsecured Notes due 2028 (7.250%, Pinnacle Trust Company as trustee) as existing permitted indebtedness.	All indebtedness baskets per term sheet: (i) incremental (greater of $280M and 100% LTM EBITDA free-and-clear, plus ratio-based at 4.50x), (ii) capital leases/purchase money up to $50M, (iii) general basket $35M, (iv) existing Senior Unsecured Notes ($250M — explicitly carved out), (v) intercompany debt. Existing Atlas Meridian facilities ($875M TL + $190M revolver) are being repaid; should be removed from permitted debt schedule.	W&G draft: narrower baskets; existing notes not expressly permitted.	High	Open	Marcus Leung	Cross-reference D-07, D-09. Intercreditor agreement (First Lien / Unsecured) governs relationship between Term Loan B and Senior Unsecured Notes.
NC-02	§6.02	Limitation on Liens	W&G draft permitted liens are narrower than customary. Missing baskets for: purchase money liens (corresponding to $50M indebtedness basket), liens arising by operation of law, liens securing capital leases, and a general lien basket.	Permitted liens must include: (i) purchase money liens up to $50M, (ii) liens arising by operation of law (mechanics', carriers', etc.), (iii) existing liens to be released at closing (Atlas Meridian — UCC-3 terminations to be filed March 31, 2025), (iv) liens securing permitted indebtedness, (v) general lien basket of $25M, (vi) judgment liens below $15M not constituting an Event of Default.	W&G draft: limited permitted lien baskets.	Medium	Open	Sophie Tremblay	UCC search memo (February 18, 2025) identifies existing Atlas Meridian liens to be terminated.
NC-03	§6.04	Restricted Payments	W&G draft restricted payments covenant is significantly more restrictive than term sheet. Missing: (i) annual general basket of $25M, (ii) builder basket (starter $50M + 50% cumulative CNI from Q1 2025), (iii) unlimited RP subject to 3.75x total net leverage. Only includes a $10M annual general basket.	Restricted payments must include: (i) general basket of $25,000,000 per year, (ii) builder basket starting at $50,000,000 plus 50% of cumulative consolidated net income from Q1 2025, (iii) unlimited restricted payments subject to pro forma compliance with 3.75x total net leverage, (iv) customary carve-outs for tax distributions, sponsor management fees ($4.5M/year), and equity repurchases. The current ~$335M dividend is being funded from loan proceeds as a permitted use of proceeds — should not count against ongoing RP capacity.	W&G draft: $10M general basket; no builder basket; no ratio-based unlimited capacity.	High	Open	Marcus Leung	Critical for sponsor economics. Granite Peak cumulative distributions: $275M (2021 dividend recap) + ~$335M (current) = ~$610M against $725M original equity investment.
NC-04	§6.05	Limitation on Investments	W&G draft investment covenant baskets are too restrictive. Does not include permitted acquisition basket or investment in unrestricted subsidiaries.	Permitted investments: (i) investments in Loan Parties (unlimited), (ii) permitted acquisitions subject to pro forma compliance with leverage ratios, (iii) investments in non-Loan Party subsidiaries up to greater of $40M and 10% of Adjusted EBITDA, (iv) general investment basket of $25M, (v) investments constituting restricted payments permitted under §6.04.	W&G draft: limited to investments in Loan Parties and $15M general basket.	Medium	Open	Marcus Leung	Important for bolt-on acquisition strategy (four acquisitions completed 2021-2024: Clearfield, Summit, Ridgepoint, Lakeshore).
NC-05	§6.06	Asset Dispositions	W&G draft asset sale covenant does not include de minimis basket or adequate reinvestment period. Mandatory prepayment from asset sale proceeds requires 100% sweep subject to reinvestment rights.	Asset sales: (i) $25,000,000 annual de minimis basket, (ii) reinvestment period of 365 days (with 180-day extension to 545 days if binding commitment entered), (iii) 100% mandatory prepayment of net cash proceeds not reinvested and above de minimis basket. Fair market value determination by board of directors.	W&G draft: no de minimis basket; reinvestment period of 180 days only.	Medium	Open	Marcus Leung	Term sheet specifies 365/545-day reinvestment period with $25M annual basket.
NC-06	§6.07	Affiliate Transactions	W&G draft restricts affiliate transactions above $5M. Borrower requests $10M threshold and carve-outs for customary sponsor-related payments.	Threshold: $10,000,000 for board approval; $25,000,000 for fairness opinion or board determination of fair market value. Carve-outs for: (i) management agreement with Granite Peak ($4.5M/year), (ii) transactions among Loan Parties, (iii) employment and compensation arrangements.	W&G draft: $5M threshold; limited carve-outs.	Medium	Open	Sophie Tremblay	Sponsor management fees are a component of EBITDA add-backs.
NC-07	§6.08	Financial Covenant	Springing financial covenant: maximum 5.00x first lien net leverage ratio. W&G draft tests covenant quarterly regardless of revolving facility utilization. Term sheet: tested only when revolving borrowings exceed 40% of revolving commitments. No new revolver being established in this transaction.	Springing covenant tested only when revolving borrowings (under any future revolver added via incremental provisions) exceed 40% of revolving commitments. Since no revolving facility is being established, the covenant is effectively dormant at closing. 5.00x first lien net leverage (net of unrestricted cash) is the correct threshold.	W&G draft: quarterly testing regardless of revolving utilization.	High	Open	Marcus Leung	Pro forma first lien net leverage at closing: 3.38x — significant cushion to 5.00x. However, making this a hard quarterly test rather than springing would be a material departure from the term sheet.
NC-08	§6.09	Excess Cash Flow Sweep	ECF sweep mechanics — see D-04 for definition issues. This section governs the application of excess cash flow to mandatory prepayment. W&G draft applies 75% sweep at all times; term sheet provides tiered step-downs.	ECF sweep: (i) 50% when first lien net leverage > 4.25x, (ii) 25% when ≤ 4.25x and > 3.50x, (iii) 0% when ≤ 3.50x. First ECF payment due within 10 business days of delivery of annual financials. Year 1 estimate: pro forma leverage of 3.38x is below 3.50x threshold, so 0% ECF sweep applies at closing leverage.	W&G draft: flat 75% sweep with no step-downs.	High	Open	Marcus Leung	At closing leverage of 3.38x, borrower would be in the 0% tier under the term sheet. W&G's 75% flat sweep is a significant departure.

[sheet: Cover]
Field | Value
Document Title | Credit Agreement Issues List — Version 1.0
Matter | Nexford Industrial Holdings Inc. — $1,400,000,000 Senior Secured Term Loan B Refinancing and Dividend Recapitalization
Matter No. | 1005-00001
Client/Matter Code | IBL-NIH-2025-031
Date | February 26, 2025
Prepared By | Marcus Leung, Calderwood & Harkness LLP
Reviewed By | Claudia Merritt, Calderwood & Harkness LLP
Reference Document | NIH Credit Agreement — Draft 1 (circulated by Whitfield & Gage LLP on February 24, 2025)
Borrower | Nexford Industrial Holdings Inc.
Administrative Agent / Collateral Agent | Crescent Harbor Bank, N.A.
Agent's Counsel | Whitfield & Gage LLP (Margaret Ashby / Jonathan Ferris)
Borrower's Counsel | Calderwood & Harkness LLP (Claudia Merritt / Marcus Leung / Sophie Tremblay)
Sponsor's Counsel | Kellner Brandt & Associates LLP (Patricia Voss)
Sponsor | Granite Peak Capital Partners, LP (Fund IV)
Governing Law | State of New York
Facility Amount | $1,400,000,000
CUSIP (Anticipated) | 65432X AA1
LoanX ID (Anticipated) | LX-234567
Status | DRAFT — Internal Working Document — Privileged & Confidential
Distribution | C&H Deal Team Only (Claudia Merritt, Ian Blackwood, Marcus Leung, Sophie Tremblay, Sylvia Hartwell)
Next Steps | C&H mark-up of Draft 1 targeted for return to W&G by March 3, 2025
[sheet: Definitions]
Issue # | Section Ref | Defined Term / Topic | Issue Description | Borrower Position | Agent / W&G Position | Priority | Status | Assigned To | Notes / Comments
D-01 | §1.01 | "Adjusted EBITDA" | W&G draft uses narrow add-back language; does not include all $28,000,000 of permitted add-backs identified by the company ($12M acquisition-related, $8.5M non-recurring restructuring, $4.5M sponsor management fees, $3M integration costs). Definition caps add-backs at 15% of EBITDA instead of customary 25% for sponsor-backed TLBs. | Expand add-back cap to 25% of reported EBITDA; ensure all four categories of add-backs ($28M total) are expressly enumerated as permitted adjustments. Reported EBITDA of $357M + $28M add-backs = $385M Adjusted EBITDA must be achievable under the definition. | W&G draft limits add-backs to 15% of reported EBITDA (~$53.55M cap). Categories listed are narrower than borrower's request. | High | Open | Marcus Leung | Critical for leverage calculations; pro forma first lien net leverage of 3.38x depends on $385M Adjusted EBITDA figure. Cross-reference to financial covenant, ECF sweep, and RP baskets.
D-02 | §1.01 | "Consolidated Net Income" | Definition includes overly broad exclusions that would reduce builder basket capacity. Excludes all non-cash gains and extraordinary items without corresponding add-back for non-cash losses. | Ensure symmetric treatment: if non-cash gains are excluded, non-cash losses should also be excluded. Builder basket starts at $50M plus 50% of cumulative CNI from Q1 2025; asymmetric definition disadvantages borrower. | W&G draft excludes non-cash gains but includes non-cash losses in CNI computation. | Medium | Open | Marcus Leung | Affects builder basket mechanics and restricted payment capacity.
D-03 | §1.01 | "Change of Control" | W&G draft sets ownership threshold at 30% of voting equity; term sheet and borrower's expectation is 35%. Draft also does not clearly carve out transfers among Granite Peak Capital Partners, LP and its affiliated funds. Third trigger (cross-default to Senior Unsecured Notes Indenture change of control) is acceptable. | Threshold should be 35% (not 30%) consistent with term sheet. Carve-out needed for Granite Peak and its affiliates (including GP Fund IV Co-Invest, LP and any successor funds). Nexford must remain direct wholly-owned subsidiary of Granite Peak NIH Holdings, LLC — this prong is acceptable. | W&G draft at 30% threshold; no express affiliate carve-out for Granite Peak entities. | High | Open | Marcus Leung | Change of control triggers acceleration at Required Lenders' direction. Must align with indenture trigger for Senior Unsecured Notes (Pinnacle Trust Company as trustee). Compare with committed term sheet.
D-04 | §1.01 | "Excess Cash Flow" | Deductions from ECF calculation are too narrow. Does not deduct voluntary prepayments, capital expenditures in excess of amounts deducted in computing Adjusted EBITDA, cash restructuring charges, or permitted acquisition consideration paid in cash. | Add deductions for (i) voluntary prepayments of the Term Loan and other first lien debt, (ii) cash CapEx and acquisitions to the extent not already deducted, (iii) cash restructuring charges, (iv) increases in working capital. Sweep tiers: 50% above 4.25x, 25% between 4.25x-3.50x, 0% at or below 3.50x first lien net leverage. | W&G includes only mandatory deductions (interest, scheduled amortization, taxes). Silent on voluntary prepayment credit. | High | Open | Marcus Leung | ECF sweep directly impacts cash available for operations and distributions. Model shows Year 1 ECF could be material given ~$307M unlevered free cash flow ($385M Adj. EBITDA – $78M CapEx).
D-05 | §1.01 | "First Lien Net Leverage Ratio" | Numerator includes all first lien secured debt; denominator is LTM Adjusted EBITDA. Issue: W&G draft does not net unrestricted cash and cash equivalents. Term sheet provides for netting of balance sheet cash. | Numerator: all first lien secured debt ($1,400,000,000 at closing). Denominator: LTM Adjusted EBITDA ($385,000,000). Must net unrestricted cash and cash equivalents (pro forma $100,000,000 at closing). Pro forma calculation: ($1,400M – $100M) / $385M = 3.38x. | W&G draft uses gross leverage (no netting of cash). Would result in 3.64x at closing ($1,400M / $385M). | High | Open | Marcus Leung | Affects covenant compliance, ECF sweep tiers, RP baskets, incremental capacity. Critical to resolve.
D-06 | §1.01 | "Total Net Leverage Ratio" | Same netting issue as First Lien Net Leverage Ratio. Also, W&G draft includes all indebtedness in numerator without clearly excluding non-recourse debt of unrestricted subsidiaries. | Must net cash. Total net leverage at closing: ($1,400M + $250M unsecured notes – $100M cash) / $385M = 4.03x. Exclude non-recourse debt of unrestricted subs. | W&G draft does not net cash; includes all consolidated debt. | Medium | Open | Marcus Leung | Total net leverage tested for unlimited restricted payments (3.75x threshold). Netting cash is critical for borrower flexibility.
D-07 | §1.01 | "Incremental Facility" / "Incremental Term Loans" | Free-and-clear basket in W&G draft set at $200M fixed amount only. Term sheet provides for greater of $280M and 100% of LTM EBITDA (~$385M). No ratio-based incremental capacity specified. | Free-and-clear basket: greater of $280,000,000 and 100% LTM EBITDA. Ratio-based capacity: unlimited subject to pro forma compliance with 4.50x first lien net leverage (calculated on a net basis). Must also permit incremental revolving commitments. | W&G draft: $200M fixed free-and-clear only; no ratio-based incremental. | High | Open | Marcus Leung | Incremental capacity is key for future M&A and operational flexibility. Most favored nation protection applies to incremental term loans within first 12 months with 50 bps threshold — confirm this is properly drafted.
D-08 | §1.01 | "Most Favored Nation" (MFN) | W&G draft includes MFN protection for incremental term loans but applies it without a sunset and without the agreed 50 bps threshold. All incremental term loans would trigger a ratchet to existing TLB spread. | MFN applies only to incremental term loans incurred within the first 12 months of closing. 50 bps threshold (i.e., spread on initial TLB increased only to within 50 bps of any higher-priced incremental). Must include sunset after 12 months and customary exclusions for acquisition-related incremental facilities. | W&G draft: MFN applies for life of facility with no threshold or carve-outs. | High | Open | Marcus Leung | Most favored nation protection must be properly scoped. Over-broad MFN limits borrower's ability to price incremental debt competitively.
D-09 | §1.01 | "Permitted Indebtedness" | W&G draft omits several customary baskets. Missing: capital lease / purchase money basket ($50M per term sheet), general basket ($35M per term sheet), and ratio-based incremental equivalent debt. | Include all baskets from term sheet: (i) incremental per D-07 above, (ii) capital leases and purchase money debt up to $50,000,000, (iii) general basket of $35,000,000, (iv) existing Senior Unsecured Notes ($250M, 7.250% due 2028), (v) intercompany debt, (vi) customary other carve-outs. | W&G includes incremental (narrower than term sheet) and existing indebtedness; omits cap lease, general basket, and ratio-based equivalent debt. | High | Open | Sophie Tremblay | Cross-reference to negative covenant on indebtedness (Article VI).
D-10 | §1.01 | "Term SOFR" and SOFR Adjustment | W&G draft references Term SOFR but does not include credit spread adjustment (CSA). Term sheet specifies 10 bps CSA for 1-month SOFR and 15 bps for 3-month SOFR. SOFR floor of 0.75% is correctly stated. | Include CSA: +10 bps for 1-month SOFR, +15 bps for 3-month SOFR. Confirm SOFR floor at 0.75%. Interest rate = Term SOFR (with CSA) + 400 bps margin. Default rate: +200 bps above applicable rate. | W&G draft: Term SOFR referenced without CSA; floor at 0.75% is present. | Medium | Open | Marcus Leung | Affects all-in interest cost. At assumed SOFR of 4.35%, total rate = 4.35% + 0.10% CSA (1-month) + 4.00% margin = 8.45%.
D-11 | §1.01 | "Restricted Payment" | Definition is overly broad; captures routine intercompany transactions and tax-sharing payments that should be carved out. | Exclude from definition: (i) tax-sharing payments to Holdings (Granite Peak NIH Holdings, LLC) for consolidated/combined tax obligations, (ii) payments of management fees to Granite Peak Capital Partners, LP up to $4.5M/year, (iii) customary intercompany dividends among Loan Parties. | W&G draft treats all upstream distributions as restricted payments without carve-outs. | Medium | Open | Sophie Tremblay | Affects dividend capacity and sponsor fee payments.
D-12 | §1.01 | "Collateral" / "Excluded Assets" | W&G draft includes motor vehicles regardless of value and commercial tort claims above $1M. Term sheet exclusions: motor vehicles with book value below $250K, letter of credit rights under $1M, commercial tort claims under $2.5M. | Excluded assets per term sheet: motor vehicles below $250,000 book value per vehicle, letter of credit rights under $1,000,000, commercial tort claims under $2,500,000, and any asset where cost of pledging is excessive relative to benefit. | W&G draft: motor vehicles included regardless of value; commercial tort threshold at $1M (vs. $2.5M in term sheet). | Medium | Open | Sophie Tremblay | Affects scope of security agreement and perfection requirements.
D-13 | §1.01 | "Material Adverse Effect" (MAE) | W&G draft MAE definition does not include customary carve-outs for general economic/industry conditions, changes in law, or changes in GAAP. | Include carve-outs for: (i) general economic or financial market conditions, (ii) conditions affecting the manufacturing/industrials industry generally, (iii) changes in law or GAAP, (iv) acts of war or terrorism, (v) any effects of the announcement of this transaction. MAE should be measured on the Borrower and Restricted Subsidiaries taken as a whole. | W&G draft: broad MAE without carve-outs. | Medium | Open | Marcus Leung | MAE is a condition precedent to closing and an event of default trigger. Must be properly scoped.
D-14 | §1.01 | "Maturity Date" | Confirm maturity date is March 28, 2032 (7 years from closing date of March 28, 2025). W&G draft states maturity as the earlier of 7 years and 91 days prior to maturity of any refinancing indebtedness — the 91-day springing maturity is not in the term sheet. | Maturity: March 28, 2032 (7 years). Delete the 91-day springing maturity provision — there is no refinancing indebtedness to which it would apply. | W&G includes 91-day springing maturity. | Low | Open | Marcus Leung | Standard issue; confirm with Crescent Harbor that springing maturity is not needed given no junior or mezzanine debt.
[sheet: Conditions Precedent]
Issue # | Section Ref | Topic | Issue Description | Borrower Position | Agent / W&G Position | Priority | Status | Assigned To | Notes / Comments
CP-01 | §4.01(a) | Solvency Certificate | W&G draft requires solvency certificate from an independent financial advisor. Borrower prefers CFO certificate. | Solvency certificate to be delivered by Michelle Kaplan (CFO) of Nexford on a consolidated basis (Borrower and Subsidiaries). No requirement for independent financial advisor. | W&G draft requires third-party solvency opinion. | Medium | Open | Marcus Leung | Market standard for TLB is CFO certificate, not independent opinion.
CP-02 | §4.01(b) | Legal Opinions — Scope | W&G draft requires opinions on all 50-state enforceability. Borrower to deliver NY law enforceability opinion (Calderwood & Harkness), IL law enforceability and perfection opinion (Hargrove & Whitmore LLP / Robert Kimura), and DE entity opinions (Briarcliff Legal Group PA / Catherine Ellsworth). No requirement for opinions in every state. | Limit opinion requirement to: (i) C&H NY law opinion (enforceability, no conflicts, UCC perfection), (ii) Hargrove & Whitmore IL law opinion, (iii) Briarcliff Legal Group DE entity opinions (organization, good standing, authority for all DE entities). | W&G draft: opinions required for all jurisdictions of organization of each Loan Party. | Medium | Open | Marcus Leung | Local counsel opinions in PA, SC, TX, MI are not customary for TLBs; those entities are organized in DE (except NMS in IL). UCC filings cover perfection.
CP-03 | §4.01(c) | Pro Forma Compliance Certificate | W&G draft requires compliance with 5.00x first lien net leverage at closing; this is a springing covenant. Should only require delivery of a pro forma compliance certificate demonstrating leverage ratios, not actual covenant compliance at closing since the financial covenant is springing. | Deliver pro forma compliance certificate showing first lien net leverage of ~3.38x and total net leverage of ~4.03x, each for informational purposes. Springing covenant (5.00x) tested only when revolving borrowings exceed 40% of commitments — no revolver being established in this transaction. | W&G draft appears to require actual covenant compliance as a condition precedent. | Medium | Open | Marcus Leung | Pro forma leverage is well within 5.00x. Issue is structural — springing covenant should not be a closing condition.
CP-04 | §4.01(d) | No Material Adverse Effect | Condition that no MAE has occurred since December 31, 2024. Must be tied to properly defined MAE (see D-13). | Acceptable if MAE definition is properly revised per D-13 above (with customary carve-outs). Measured from LTM reporting date of December 31, 2024. | W&G draft: no MAE since fiscal year-end (12/31/2024) without reference to carve-outs in MAE definition. | Medium | Open | Marcus Leung | Cross-reference to D-13.
CP-05 | §4.01(e) | Organizational Documents and Good Standing | W&G requires certified copies of organizational documents and good standing certificates for all Loan Parties dated within 3 business days of closing. Borrower requests 5 business days (standard). | Good standing certificates dated within 5 business days of closing (March 28, 2025). Covers Nexford, Granite Peak NIH Holdings, and all 11 Subsidiary Guarantors across DE, IL, PA, SC, TX, MI. | W&G draft: within 3 business days. | Low | Open | Sophie Tremblay | Administrative timing issue; 5 business days is market standard.
CP-06 | §4.01(f) | Payoff Letter — Atlas Meridian Bank | W&G draft requires payoff letter from Atlas Meridian Bank, N.A. (Sandra Vickers, MD Portfolio Management) but does not specify that it must include lien release and UCC-3 termination commitments. | Payoff letter must include: (i) payoff amount ($879,375,000 — $875M principal + ~$4,375,000 accrued interest), (ii) irrevocable commitment to release all liens, (iii) authorization for UCC-3 termination filings in DE, IL, PA, (iv) commitment to deliver original stock certificates and intercompany notes held as collateral. | W&G draft: requires payoff letter but silent on lien release mechanics. | High | Open | Marcus Leung | Existing revolver ($190M, undrawn) also to be terminated. Prepayment premium waived per Fourth Amendment (September 12, 2024).
CP-07 | §4.01(g) | Mortgage Delivery — Timing | W&G draft requires mortgages delivered and recorded at closing for all four properties. Borrower requests post-closing delivery (standard for TLBs). | Mortgages for four properties (Schaumburg IL / Cook County, Rockford IL / Winnebago County, Greenville SC / Greenville County, Houston TX / Harris County) to be delivered post-closing with a 30-day deadline (i.e., by April 30, 2025). Title insurance from Landmark Title Assurance Company also post-closing. | W&G draft: at closing delivery required for all mortgages. | High | Open | Marcus Leung | Total appraised value of mortgaged properties: $193,000,000 ($85M + $42M + $38M + $28M). Post-closing mortgage delivery is standard in TLB market.
CP-08 | §4.01(h) | Rating Confirmation | W&G draft requires both rating agencies to have assigned facility ratings as a condition to closing. Ratings have been assigned (Keystone B1 CFR / B1 facility; Sentinel B+ CCR / BB- facility) as of February 26, 2025. | Condition should be that ratings have been assigned — not that specific rating levels are maintained. Ratings already assigned by Keystone Ratings Group (B1 CFR; B1 facility) and Sentinel Credit Analytics (B+ CCR; BB- facility). | W&G draft: requires minimum B3/B- facility rating as closing condition. | Medium | Open | Marcus Leung | Current ratings well above any minimum threshold. Issue is whether rating level should be a condition.
CP-09 | §4.01(i) | KYC / Anti-Money Laundering / OFAC | W&G draft requires delivery of all KYC documentation at least 5 business days prior to closing. Borrower agrees but requests that the list of required documents be specified in advance. | Borrower to deliver: W-9s for all domestic Loan Parties, beneficial ownership certifications, OFAC screening confirmations, USA PATRIOT Act documentation. Must confirm no Loan Party is a Sanctioned Person. Deliver at least 5 business days before March 28, 2025 closing. | W&G draft: 5 business days prior; open-ended documentation requirement. | Low | Open | Sophie Tremblay | Sylvia Hartwell coordinating W-8/W-9 collection. OFAC and sanctions compliance confirmed in regulatory review memo (February 27, 2025).
[sheet: Representations & Warranties]
Issue # | Section Ref | Topic | Issue Description | Borrower Position | Agent / W&G Position | Priority | Status | Assigned To | Notes / Comments
RW-01 | §3.01 | Organization and Good Standing | W&G draft requires representation that each Loan Party is duly organized and in good standing in its jurisdiction of organization and each jurisdiction where it conducts business. Does not distinguish between domestic and foreign subsidiaries (Nexford Canada Holdings ULC and Nexford Canada Manufacturing, Inc. are not Loan Parties). | Representation limited to the Borrower and Guarantors (13 entities: Holdings, Nexford, and 11 Subsidiary Guarantors). Foreign subsidiaries (NCH ULC — British Columbia; NCM — Ontario) are excluded from Loan Party representations. Nexford International Holdings, Inc. is a Guarantor (CFC holdco) — limited pledge of 65% voting / 100% non-voting equity in NCH ULC. | W&G draft: applies to Borrower and all subsidiaries including foreign subs. | Medium | Open | Sophie Tremblay | Briarcliff Legal Group PA (Catherine Ellsworth) delivering DE entity opinions. Hargrove & Whitmore LLP (Robert Kimura) for IL entities.
RW-02 | §3.04 | Financial Statements | W&G draft requires representation that audited financial statements for the last three fiscal years are complete and fairly present financial condition. Must confirm auditor is Ashworth & Kendrick LLP (Helen Yamamoto, engagement partner). LTM financials as of December 31, 2024. | Representation should be limited to audited financials prepared in accordance with GAAP, audited by Ashworth & Kendrick LLP. LTM period ending December 31, 2024. Key metrics: Revenue $2,100,000,000; Reported EBITDA $357,000,000; Adjusted EBITDA $385,000,000; CapEx $78,000,000. | W&G draft: requires representation for five fiscal years; no specification of auditor. | Low | Open | Sophie Tremblay | Three-year audited financials is market standard.
RW-03 | §3.06 | Litigation | W&G draft requires disclosure of all pending or threatened litigation, arbitration, or governmental proceedings with expected liability above $1M. Threshold should be higher for a $2.1B revenue company. | Disclosure threshold: $5,000,000 individually or $15,000,000 in the aggregate, consistent with materiality thresholds in comparable TLB transactions for companies of this size. | W&G draft: $1,000,000 threshold. | Medium | Open | Marcus Leung | Litigation review memo (February 26, 2025) to inform schedule. No material litigation currently identified.
RW-04 | §3.08 | Compliance with Laws / Sanctions / Anti-Corruption | Representations regarding sanctions compliance, OFAC, FCPA, USA PATRIOT Act, and Bank Secrecy Act. W&G draft is generally acceptable but uses overly broad knowledge qualifier for agents of Loan Parties. | Representation that no Loan Party, director, officer, or employee is a Sanctioned Person. Knowledge qualifier for agents ("to the knowledge of the Loan Parties") is acceptable. Confirm no proceeds will be used in violation of any Sanctions administered by OFAC, the U.S. Department of State, or other governmental authorities. FCPA and USA PATRIOT Act compliance representations are acceptable as drafted. | W&G draft: substantially acceptable with minor knowledge qualifier issue. | Low | Open | Marcus Leung | Regulatory compliance review memo (February 27, 2025) confirms clean OFAC screening. Certification to be delivered at closing.
RW-05 | §3.10 | Collateral and Security Interests | W&G draft requires representation that the security documents create valid, perfected first-priority liens on all Collateral. Must carve out permitted liens and post-closing items (mortgages due April 30, 2025). | Representation qualified by: (i) permitted liens, (ii) post-closing mortgage delivery period (April 30, 2025 deadline), (iii) filing of UCC-1 financing statements in DE, IL, PA, SC, TX, MI, (iv) delivery of control agreements. First-priority lien subject to intercreditor agreement with Pinnacle Trust Company (unsecured noteholders). | W&G draft: unqualified first-priority lien representation at closing. | Medium | Open | Marcus Leung | UCC-1 filings at closing; mortgages post-closing. Intercreditor agreement (First Lien / Unsecured) governs priority as between secured and unsecured claims.
RW-06 | §3.11 | Environmental Matters | W&G draft requires representation of compliance with all environmental laws without materiality qualifier. | Add materiality qualifier: compliance in all material respects. Phase I ESAs conducted by Clearwater Environmental Sciences, Inc. (Dr. Nathan Foley) for four mortgaged properties — no material recognized environmental conditions. | W&G draft: unqualified environmental compliance representation. | Medium | Open | Sophie Tremblay | Environmental memo (February 22, 2025) summarizes Phase I results.
RW-07 | §3.12 | Insurance | W&G draft requires representation that Loan Parties maintain insurance programs consistent with prudent industry practice. Needs to reference actual carriers. | Insurance maintained through: property & casualty (Continental Shield Underwriters, Inc.), D&O (Meridian Specialty Insurance Co.), brokered by Vantage Risk Advisors, LLC (Rachel Sorensen). Representation should reference compliance with credit agreement insurance covenants, not an abstract standard. | W&G draft: generic prudent industry practice standard. | Low | Open | Sophie Tremblay | Insurance review memo (February 24, 2025) confirms adequacy of coverage.
RW-08 | §3.14 | Intellectual Property | W&G requires representation that Loan Parties own or have valid rights to all IP necessary for business operations, free of all liens other than permitted liens. | Acceptable subject to: (i) IP lien search results (memo February 19, 2025 — clean results), (ii) excluded assets carve-out for de minimis IP, (iii) IP security agreement to be executed at closing. | W&G draft: representation acceptable in substance; minor wording refinements needed. | Low | Open | Sophie Tremblay | IP security agreement drafted by C&H.
RW-09 | §3.16 | Use of Proceeds | Representation that proceeds will be used solely for: (i) refinancing existing Atlas Meridian facilities ($879,375,000), (ii) dividend to Granite Peak NIH Holdings (~$335,000,000), (iii) payment of transaction fees and expenses (~$38,625,000), (iv) cash to balance sheet ($147,000,000). Total: $1,400,000,000. | Use of proceeds representation should match the sources and uses table. Confirm no proceeds used in violation of Sanctions, OFAC, anti-corruption laws, or anti-money laundering laws. | W&G draft: generally consistent but does not enumerate specific amounts. | Low | Open | Marcus Leung | Funds flow memorandum (draft) to be prepared by March 22, 2025.
[sheet: Affirmative Covenants]
Issue # | Section Ref | Topic | Issue Description | Borrower Position | Agent / W&G Position | Priority | Status | Assigned To | Notes / Comments
AC-01 | §5.01 | Financial Reporting | W&G draft requires delivery of annual audited financials within 90 days and quarterly unaudited financials within 45 days of quarter-end. Borrower requests 120 days / 60 days (standard for sponsor-backed private companies). | Annual audited financials: 120 days after fiscal year-end (December 31). Quarterly unaudited financials: 60 days after quarter-end. Auditor: Ashworth & Kendrick LLP. | W&G draft: 90 days annual / 45 days quarterly. | Medium | Open | Marcus Leung | Nexford is a private company; 120/60 is market for sponsor-backed TLBs.
AC-02 | §5.01(c) | Compliance Certificate | W&G requires quarterly compliance certificate with leverage ratio calculations. Should be tied to financial covenant testing — springing covenant tested only when revolving borrowings exceed 40% of revolving commitments. | Quarterly compliance certificate to include calculation of first lien net leverage and total net leverage ratios for informational purposes. Financial covenant (5.00x first lien net leverage) tested only when revolving borrowings > 40% of revolving commitments. No new revolver established in this transaction. | W&G draft: quarterly compliance certificate with covenant compliance certification regardless of testing trigger. | Medium | Open | Marcus Leung | Distinguish between informational reporting and covenant compliance testing.
AC-03 | §5.04 | Insurance Maintenance | W&G draft requires maintenance of insurance programs but includes an overly prescriptive list of required coverages and minimum amounts. Should reference commercially reasonable insurance consistent with industry practice. | Maintain insurance consistent with industry practice for similarly situated companies. Specific coverage types and amounts to be set forth in a schedule to be agreed. Broker: Vantage Risk Advisors, LLC. Current carriers: Continental Shield Underwriters, Inc. (P&C); Meridian Specialty Insurance Co. (D&O). Collateral Agent named as additional insured and loss payee on property policies. | W&G draft: specific minimum coverage amounts that may not align with current program. | Low | Open | Sophie Tremblay | Insurance review memo (February 24, 2025) addresses current program.
AC-04 | §5.06 | Additional Guarantors / After-Acquired Subsidiaries | W&G draft requires joinder of new domestic subsidiaries as Guarantors within 15 days of formation or acquisition. Borrower requests 30 days (standard). | 30-day joinder period for new domestic restricted subsidiaries. Foreign subsidiaries excluded from guarantee requirement. CFC holdco (NIH Intl) subject to limited pledge only (65% voting / 100% non-voting of first-tier foreign subs). | W&G draft: 15-day joinder period. | Low | Open | Sophie Tremblay | Current Subsidiary Guarantors: 11 entities. Nexford Canada Holdings ULC and Nexford Canada Manufacturing are excluded foreign subs.
AC-05 | §5.08 | Post-Closing Obligations | W&G draft includes post-closing covenants but with a 15-day deadline for mortgage delivery. Term sheet and borrower's expectation is 30 days (April 30, 2025). | Post-closing period of 30 days for: (i) delivery of recorded mortgages for all four properties (Cook County IL, Winnebago County IL, Greenville County SC, Harris County TX), (ii) delivery of title insurance policies from Landmark Title Assurance Company, (iii) surveys and environmental compliance letters. Deadline: April 30, 2025. | W&G draft: 15-day post-closing period. | Medium | Open | Marcus Leung | Coordinate with Hargrove & Whitmore (IL local counsel) for Cook and Winnebago County filings. Greystone Valuation Services (Daniel Pritchard) appraisals already complete.
[sheet: Negative Covenants]
Issue # | Section Ref | Topic | Issue Description | Borrower Position | Agent / W&G Position | Priority | Status | Assigned To | Notes / Comments
NC-01 | §6.01 | Limitation on Indebtedness | W&G draft indebtedness covenant is more restrictive than term sheet. Missing baskets noted in D-09. Also, does not clearly permit the $250,000,000 Senior Unsecured Notes due 2028 (7.250%, Pinnacle Trust Company as trustee) as existing permitted indebtedness. | All indebtedness baskets per term sheet: (i) incremental (greater of $280M and 100% LTM EBITDA free-and-clear, plus ratio-based at 4.50x), (ii) capital leases/purchase money up to $50M, (iii) general basket $35M, (iv) existing Senior Unsecured Notes ($250M — explicitly carved out), (v) intercompany debt. Existing Atlas Meridian facilities ($875M TL + $190M revolver) are being repaid; should be removed from permitted debt schedule. | W&G draft: narrower baskets; existing notes not expressly permitted. | High | Open | Marcus Leung | Cross-reference D-07, D-09. Intercreditor agreement (First Lien / Unsecured) governs relationship between Term Loan B and Senior Unsecured Notes.
NC-02 | §6.02 | Limitation on Liens | W&G draft permitted liens are narrower than customary. Missing baskets for: purchase money liens (corresponding to $50M indebtedness basket), liens arising by operation of law, liens securing capital leases, and a general lien basket. | Permitted liens must include: (i) purchase money liens up to $50M, (ii) liens arising by operation of law (mechanics', carriers', etc.), (iii) existing liens to be released at closing (Atlas Meridian — UCC-3 terminations to be filed March 31, 2025), (iv) liens securing permitted indebtedness, (v) general lien basket of $25M, (vi) judgment liens below $15M not constituting an Event of Default. | W&G draft: limited permitted lien baskets. | Medium | Open | Sophie Tremblay | UCC search memo (February 18, 2025) identifies existing Atlas Meridian liens to be terminated.
NC-03 | §6.04 | Restricted Payments | W&G draft restricted payments covenant is significantly more restrictive than term sheet. Missing: (i) annual general basket of $25M, (ii) builder basket (starter $50M + 50% cumulative CNI from Q1 2025), (iii) unlimited RP subject to 3.75x total net leverage. Only includes a $10M annual general basket. | Restricted payments must include: (i) general basket of $25,000,000 per year, (ii) builder basket starting at $50,000,000 plus 50% of cumulative consolidated net income from Q1 2025, (iii) unlimited restricted payments subject to pro forma compliance with 3.75x total net leverage, (iv) customary carve-outs for tax distributions, sponsor management fees ($4.5M/year), and equity repurchases. The current ~$335M dividend is being funded from loan proceeds as a permitted use of proceeds — should not count against ongoing RP capacity. | W&G draft: $10M general basket; no builder basket; no ratio-based unlimited capacity. | High | Open | Marcus Leung | Critical for sponsor economics. Granite Peak cumulative distributions: $275M (2021 dividend recap) + ~$335M (current) = ~$610M against $725M original equity investment.
NC-04 | §6.05 | Limitation on Investments | W&G draft investment covenant baskets are too restrictive. Does not include permitted acquisition basket or investment in unrestricted subsidiaries. | Permitted investments: (i) investments in Loan Parties (unlimited), (ii) permitted acquisitions subject to pro forma compliance with leverage ratios, (iii) investments in non-Loan Party subsidiaries up to greater of $40M and 10% of Adjusted EBITDA, (iv) general investment basket of $25M, (v) investments constituting restricted payments permitted under §6.04. | W&G draft: limited to investments in Loan Parties and $15M general basket. | Medium | Open | Marcus Leung | Important for bolt-on acquisition strategy (four acquisitions completed 2021-2024: Clearfield, Summit, Ridgepoint, Lakeshore).
NC-05 | §6.06 | Asset Dispositions | W&G draft asset sale covenant does not include de minimis basket or adequate reinvestment period. Mandatory prepayment from asset sale proceeds requires 100% sweep subject to reinvestment rights. | Asset sales: (i) $25,000,000 annual de minimis basket, (ii) reinvestment period of 365 days (with 180-day extension to 545 days if binding commitment entered), (iii) 100% mandatory prepayment of net cash proceeds not reinvested and above de minimis basket. Fair market value determination by board of directors. | W&G draft: no de minimis basket; reinvestment period of 180 days only. | Medium | Open | Marcus Leung | Term sheet specifies 365/545-day reinvestment period with $25M annual basket.
NC-06 | §6.07 | Affiliate Transactions | W&G draft restricts affiliate transactions above $5M. Borrower requests $10M threshold and carve-outs for customary sponsor-related payments. | Threshold: $10,000,000 for board approval; $25,000,000 for fairness opinion or board determination of fair market value. Carve-outs for: (i) management agreement with Granite Peak ($4.5M/year), (ii) transactions among Loan Parties, (iii) employment and compensation arrangements. | W&G draft: $5M threshold; limited carve-outs. | Medium | Open | Sophie Tremblay | Sponsor management fees are a component of EBITDA add-backs.
NC-07 | §6.08 | Financial Covenant | Springing financial covenant: maximum 5.00x first lien net leverage ratio. W&G draft tests covenant quarterly regardless of revolving facility utilization. Term sheet: tested only when revolving borrowings exceed 40% of revolving commitments. No new revolver being established in this transaction. | Springing covenant tested only when revolving borrowings (under any future revolver added via incremental provisions) exceed 40% of revolving commitments. Since no revolving facility is being established, the covenant is effectively dormant at closing. 5.00x first lien net leverage (net of unrestricted cash) is the correct threshold. | W&G draft: quarterly testing regardless of revolving utilization. | High | Open | Marcus Leung | Pro forma first lien net leverage at closing: 3.38x — significant cushion to 5.00x. However, making this a hard quarterly test rather than springing would be a material departure from the term sheet.
NC-08 | §6.09 | Excess Cash Flow Sweep | ECF sweep mechanics — see D-04 for definition issues. This section governs the application of excess cash flow to mandatory prepayment. W&G draft applies 75% sweep at all times; term sheet provides tiered step-downs. | ECF sweep: (i) 50% when first lien net leverage > 4.25x, (ii) 25% when ≤ 4.25x and > 3.50x, (iii) 0% when ≤ 3.50x. First ECF payment due within 10 business days of delivery of annual financials. Year 1 estimate: pro forma leverage of 3.38x is below 3.50x threshold, so 0% ECF sweep applies at closing leverage. | W&G draft: flat 75% sweep with no step-downs. | High | Open | Marcus Leung | At closing leverage of 3.38x, borrower would be in the 0% tier under the term sheet. W&G's 75% flat sweep is a significant departure.

[sheet: Cover]

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