1005-00003 · Calderwood & Harkness LLP · Engagement & Administrative

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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP Counselors at Law 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606 Tel: (312) 555-7400

Fax: (312) 555-7401

www.calderwoodharkness.com

April 28, 2022

Matter No.: 1005-00003 Billing Partner Code: AFO-7724

VIA E-MAIL AND HAND DELIVERY

Donna Kowalski Director of Insurance and Claims Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173

Trevor Haines Vice President, Risk Management Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173

From: Naomi Petersen, Lead Associate, Calderwood & Harkness LLP

cc: Douglas Fairchild, Responsible Partner, Calderwood & Harkness LLP Angela Fontaine, Billing Partner, Calderwood & Harkness LLP Priya Sundaram, General Counsel & Corporate Secretary, Nexford Industrial Holdings Inc. Yuki Nakamura, Working Associate, Calderwood & Harkness LLP

Re: Nexford Industrial Holdings Inc. — Directors & Officers Liability and Product-Liability Insurance Tower Review; Document Request List Matter No. 1005-00003

Dear Donna and Trevor:

Thank you again for the opportunity to work with the Nexford team on this important engagement. As you know, pursuant to the engagement letter dated April 22, 2022, executed by Douglas Fairchild on behalf of Calderwood & Harkness LLP and by Priya Sundaram on behalf of Nexford Industrial Holdings Inc. ("Nexford" or the "Company"), this matter was formally opened on April 26, 2022. Calderwood & Harkness has been engaged to conduct a comprehensive review of Nexford's Directors & Officers ("D&O") liability insurance tower and product-liability ("PL") insurance tower in connection with the upcoming 2022–2023 renewal cycle, for which the renewal effective date is July 1, 2022.

The incumbent policy period under review is July 1, 2021 through July 1, 2022. Our review will encompass an analysis of the adequacy of limits across both towers, a gap analysis identifying potential coverage deficiencies or areas of exposure, a policy wording comparison among layers and across renewal cycles, and an assessment of the coordination between the D&O and product-liability programs. We also understand from Priya Sundaram that the Company may be contemplating a potential initial public offering in the 2023–2024 timeframe, and we will factor that consideration into our D&O tower adequacy assessment.

In order to conduct this review in a thorough and timely manner, we request that the documents and information described below be provided to our team as promptly as practicable, and ideally no later than Friday, May 6, 2022. This timeline is necessary to allow adequate time for our review and analysis in advance of the broker marketing submission that we understand Ashford Breckinridge LLP intends to circulate to the carrier market on or about May 3, 2022, and the subsequent carrier renewal quote period. We recognize that certain materials may not be available by that date and appreciate your best efforts to identify and produce responsive materials on a rolling basis.

We request that responsive documents be provided in electronic format where available, preferably as searchable PDF files or in their native format (e.g., Microsoft Word or Excel). Hard copies are acceptable for original executed policy forms or other documents that are not available electronically. To facilitate an efficient review, we ask that responsive documents be organized by category, corresponding to the numbered sections set forth below.

Please do not hesitate to contact me or Yuki Nakamura if any category or request requires clarification or if certain documents are unavailable or are held by third parties such as your broker, Ashford Breckinridge LLP. We are happy to coordinate directly with your broker contacts, Phillip Garza and Tamara Fisk, for any broker-held materials if that would be more convenient.

The categories of requested documents and information are as follows:

I. DIRECTORS & OFFICERS LIABILITY INSURANCE — CURRENT POLICY YEAR (JULY 1, 2021 – JULY 1, 2022)

We request the following documents and information relating to each layer of Nexford's current D&O liability insurance tower:

A. Primary D&O Policy

1. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the primary Directors & Officers liability insurance policy issued by Vandermeer National Insurance Company, bearing Policy No. VNI-DO-2021-88473, for the policy period July 1, 2021 through July 1, 2022. We understand the policy provides limits of liability of $10,000,000 per claim and $10,000,000 in the annual aggregate, with an annual premium of $487,500 and a self-insured retention of $1,000,000 applicable to entity coverage.

2. The complete application submitted to Vandermeer National Insurance Company in connection with the current policy period, including all attachments, schedules, supplemental questionnaires, warranty letters, and any other materials submitted as part of the underwriting process.

3. Any binder or binder confirmation issued by Vandermeer National Insurance Company or Ashford Breckinridge LLP in connection with the binding of this coverage.

B. First Excess D&O Policy

4. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the first excess Directors & Officers liability insurance policy issued by Commonwealth Indemnity Group for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $10,000,000 limit, with an annual premium of $312,000.

5. Any follow-form endorsements, coverage difference conditions, or standalone coverage grants contained in this excess policy.

C. Second Excess D&O Policy

6. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the second excess Directors & Officers liability insurance policy issued by Graystone Mutual Assurance Co. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $20,000,000 in limits, with an annual premium of $198,750.

D. Third Excess D&O Policy

7. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the third excess Directors & Officers liability insurance policy issued by Pinnacle Re Insurance Ltd. (Bermuda) for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $30,000,000 in limits, with an annual premium of $141,200.

8. Any non-admitted carrier filings, surplus lines filings, or other regulatory documentation associated with the placement of this policy with a Bermuda-domiciled carrier.

E. Side-A DIC Policy

9. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the Side-A Difference-in-Conditions ("DIC") Directors & Officers liability insurance policy issued by Harrington Specialty Insurance Co., bearing Policy No. HSI-DIC-2021-00342, for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides $15,000,000 in dedicated Side-A limits with no self-insured retention, and an annual premium of $224,000.

10. Any coverage comparison or gap analysis that Ashford Breckinridge LLP or Harrington Specialty Insurance Co. prepared in connection with the placement of the Side-A DIC policy, to the extent such materials are in Nexford's possession.

F. D&O Tower Summary

11. Any tower summary chart, placement slip, binder certificate, or program overview prepared by Ashford Breckinridge LLP for the current D&O tower, reflecting the total aggregate limit of $55,000,000 across all layers and the total annual premium of $1,363,450.

12. Any rate-per-million analysis, premium allocation schedule, or benchmarking data provided by Ashford Breckinridge LLP in connection with the current D&O tower placement.

II. DIRECTORS & OFFICERS LIABILITY INSURANCE — PRIOR POLICY YEARS

13. Complete policy forms, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the D&O liability insurance policies at all layers of the tower for the three policy years immediately preceding the current policy year—that is, the policy periods ending July 1, 2021, July 1, 2020, and July 1, 2019, respectively.

14. To the extent that Ashford Breckinridge LLP has served as broker of record for Nexford's D&O program since 2019 or earlier, we request copies of all placement memoranda, broker reports, and program summaries prepared by Ashford Breckinridge LLP for those prior policy years.

15. All prior-year applications, renewal submissions, warranty letters, and supplemental questionnaires submitted to D&O carriers in connection with the policy years identified above.

16. Any Extended Reporting Period ("ERP" or "tail") policies or endorsements obtained in connection with any prior D&O policy year, including documentation reflecting the terms, duration, and premium for any such tail coverage.

17. Any documentation reflecting changes in carrier composition, limits, retentions, or material policy terms from one renewal cycle to the next during the three prior policy years.

III. PRODUCT-LIABILITY / GENERAL LIABILITY INSURANCE — CURRENT POLICY YEAR (JULY 1, 2021 – JULY 1, 2022)

We request the following documents and information relating to each layer of Nexford's current product-liability and general liability insurance tower:

A. Primary GL/PL Policy

18. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the primary general liability and product-liability insurance policy issued by Midland Casualty & Surety Company, bearing Policy No. MCS-GL-2021-55671, for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $5,000,000 per occurrence and $10,000,000 in the annual aggregate, with an annual premium of $1,125,000 and a self-insured retention of $500,000 per occurrence.

19. With respect to the product recall coverage provided under this policy, we request confirmation and documentation of the product recall sub-limit of $2,500,000 per occurrence and $5,000,000 in the aggregate, including the applicable endorsement or coverage section defining the scope of product recall coverage, covered recall expenses, and any applicable exclusions or conditions.

20. Documentation of the completed operations coverage period, which we understand is stated to extend ten (10) years post-delivery. Please provide the specific endorsement or policy provision setting forth this coverage extension and any associated limitations or conditions.

21. The complete application submitted to Midland Casualty & Surety Company in connection with the current policy period, including all attachments, schedules, product inventories, loss summaries, and supplemental questionnaires.

22. Any binder or binder confirmation issued in connection with the binding of this coverage.

B. First Excess / Umbrella Policy

23. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the first excess/umbrella liability insurance policy issued by Great Basin Insurance Company for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $25,000,000 in excess of the underlying $10,000,000 aggregate limit, with an annual premium of $862,500.

24. Documentation identifying all follow-form provisions, as well as any standalone coverage grants, drop-down provisions, or coverage extensions provided by this umbrella policy that differ from or expand upon the coverage provided by the underlying Midland Casualty primary policy.

C. Second Excess Policy

25. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the second excess liability insurance policy issued by Cornerstone Reinsurance Corp. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $25,000,000 in excess of the underlying $35,000,000 in limits, with an annual premium of $437,000.

D. Third Excess Policy

26. The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the third excess liability insurance policy issued by Allegheny Pacific Underwriters, Inc. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $15,000,000 in excess of the underlying $60,000,000 in limits, with an annual premium of $218,400.

E. PL Tower Summary

27. Any tower summary chart, placement slip, binder certificate, or program overview prepared by Ashford Breckinridge LLP for the current PL tower, reflecting the total aggregate limit of $75,000,000 across all layers and the total annual premium of $2,642,900.

28. Any rate-per-million analysis, premium allocation schedule, or benchmarking data provided by Ashford Breckinridge LLP in connection with the current PL tower placement.

IV. PRODUCT-LIABILITY / GENERAL LIABILITY INSURANCE — PRIOR POLICY YEARS

29. Complete policy forms, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the product-liability and general liability insurance policies at all layers of the tower for the three policy years immediately preceding the current policy year—that is, the policy periods ending July 1, 2021, July 1, 2020, and July 1, 2019, respectively.

30. All prior-year applications, renewal submissions, product schedules, loss summaries, and supplemental questionnaires submitted to PL/GL carriers in connection with the policy years identified above.

31. Any Extended Reporting Period ("ERP" or "tail") policies or endorsements obtained in connection with any prior PL/GL policy year, including documentation reflecting the terms, duration, and premium for any such tail coverage.

32. Any documentation reflecting occurrence-based coverage triggers for legacy product deliveries, including any retroactive date endorsements, prior acts coverage, or similar provisions.

33. Any documentation reflecting changes in carrier composition, limits, retentions, or material policy terms from one renewal cycle to the next during the three prior policy years.

V. BROKER SUBMISSIONS AND MARKETING MATERIALS

34. A copy of the broker marketing submission to be circulated by Ashford Breckinridge LLP for the upcoming 2022–2023 renewal cycle. We understand this submission is expected to be circulated to the carrier market on or about May 3, 2022. We request that Nexford provide us with a copy of this submission promptly upon its availability, or authorize Ashford Breckinridge LLP to provide it directly to our team.

35. Copies of the broker marketing submissions circulated by Ashford Breckinridge LLP for the D&O and PL programs for each of the three prior renewal cycles.

36. Any stewardship reports, program analysis reports, coverage benchmarking materials, peer-group comparisons, or market-condition reports provided by Ashford Breckinridge LLP to Nexford during the current or prior three policy years.

37. Copies of all correspondence between Ashford Breckinridge LLP, including specifically Phillip Garza and Tamara Fisk, and Nexford, including specifically Donna Kowalski and Trevor Haines, concerning the incumbent D&O and PL tower placements and any mid-term modifications, endorsement requests, policy corrections, or changes to named insureds or additional insureds during the current or prior policy years.

38. Copies of any carrier audit reports, risk engineering reports, loss control inspection reports, or underwriting survey reports generated by any carrier or third-party risk engineering firm during the current or prior three policy periods, whether relating to the D&O or PL programs.

VI. LOSS RUNS AND CLAIMS HISTORY

A. D&O Loss Runs

39. Five-year loss runs from each of the D&O carriers in the current and prior towers, including Vandermeer National Insurance Company, Commonwealth Indemnity Group, Graystone Mutual Assurance Co., Pinnacle Re Insurance Ltd., and Harrington Specialty Insurance Co. We understand that the five-year D&O claims history reflects one reported claim—a shareholder demand letter received in 2020 that was resolved without any payment—and zero paid D&O losses during the five-year period.

40. All correspondence related to the 2020 shareholder demand letter, including the initial notice of claim or notice of circumstances, any acknowledgment letters from carriers, any coverage determination letters, any reservation of rights letters, any declination letters, and any closing or file-closure correspondence.

41. Any documentation reflecting the allocation of defense costs, if any, incurred in connection with the 2020 shareholder demand letter.

B. Product-Liability Loss Runs

42. Five-year loss runs from each of the PL carriers in the current and prior towers, including Midland Casualty & Surety Company, Great Basin Insurance Company, Cornerstone Reinsurance Corp., and Allegheny Pacific Underwriters, Inc. We understand that the five-year PL claims history reflects twelve (12) reported claims, of which nine (9) are closed with total paid losses of $4,720,000 and three (3) remain open with total reserves of $8,300,000.

43. A copy of any actuarial report, loss-modeling analysis, or IBNR (incurred but not reported) reserve analysis prepared by Kessler Quinn Advisory Group. We understand that Kessler Quinn's current IBNR estimate is approximately $2,100,000, yielding a total five-year incurred amount of approximately $15,120,000 (comprising $4,720,000 in paid losses, $8,300,000 in reserves, and $2,100,000 in IBNR).

44. Any loss development triangles, loss ratio analyses, or frequency-severity analyses prepared by Ashford Breckinridge LLP, Kessler Quinn Advisory Group, or any carrier in connection with the PL program.

C. Pending Claims Files

We request complete claims files, including all correspondence, coverage position letters, reservation of rights letters, defense counsel status reports, and defense cost summaries, for the following pending product-liability lawsuits:

1. *Higgins v. Nexford Conveyor Systems, LLC et al.*

45. Complete claims file for the lawsuit styled Higgins v. Nexford Conveyor Systems, LLC et al., Case No. 2021-L-04382, pending in the Circuit Court of Will County, Illinois. This action was filed on September 14, 2021, and the plaintiff alleges a catastrophic crush injury caused by an alleged defect in the emergency stop mechanism on a Model NCS-7200 conveyor system installed at a grain processing facility. The plaintiff seeks damages in the amount of $14,500,000. We understand this matter is currently active and in the discovery phase as of the date of this request.

46. All correspondence to and from Midland Casualty & Surety Company relating to this claim, including notice of claim submissions, acknowledgment letters, coverage determination letters, reservation of rights letters (if any), and defense counsel assignment communications.

47. All defense cost reporting, including invoices, fee statements, litigation budgets, and any carrier-imposed billing guidelines applicable to this matter.

48. All pleadings, motions, court orders, and other significant court filings in this matter.

49. All reports, status memoranda, and correspondence from Hollander Byrne & Strauss LLP, including specifically Catherine Byrne and Rafael Mendez, serving as outside litigation counsel for Nexford in this matter.

2. *Consolidated Builders Supply Co. v. Triton Fastener Corp.*

50. Complete claims file for the lawsuit styled Consolidated Builders Supply Co. v. Triton Fastener Corp., Case No. 1:21-cv-08914, pending in the United States District Court for the Northern District of Illinois. This action was filed on November 2, 2021, and the plaintiff alleges structural failure of Grade 8 hex bolts manufactured by Triton Fastener Corp. in a commercial building project, resulting in a partial wall collapse and claimed property damage and business interruption losses of approximately $6,800,000. We understand that the defendant's motion to dismiss was denied by order dated February 11, 2022, and the matter is currently active.

51. All correspondence to and from Midland Casualty & Surety Company relating to this claim, including notice of claim submissions, acknowledgment letters, coverage determination letters, reservation of rights letters (if any), and defense counsel assignment communications.

52. All defense cost reporting, including invoices, fee statements, litigation budgets, and any carrier-imposed billing guidelines applicable to this matter.

53. All pleadings, motions, court orders (including the February 11, 2022 order denying the motion to dismiss), and other significant court filings in this matter.

54. All reports, status memoranda, and correspondence from Hollander Byrne & Strauss LLP serving as outside litigation counsel for Triton Fastener Corp. in this matter.

3. Any Other Open or Recently Closed Claims

55. Complete claims files for all other open product-liability claims under the current or prior three policy years not specifically identified above.

56. A summary of defense costs incurred to date on all open product-liability claims, broken down by claim number, policy year, carrier, and cumulative defense costs incurred.

57. Claims files for any product-liability claims closed within the past twelve (12) months that resulted in a payment, settlement, or judgment.

D. Product Recall History

We request complete files for the following product recall events:

1. Triton Fastener Corp. Voluntary Product Recall

58. Complete files for the voluntary product recall initiated by Triton Fastener Corp. on or about March 12, 2020, which we understand resulted in total recall-related costs of approximately $1,100,000. We request all recall-related documentation, including any U.S. Consumer Product Safety Commission ("CPSC") correspondence, mandatory or voluntary recall notices, corrective action plans, product remediation records, customer notifications, and all insurance claim submissions and carrier payment documentation.

2. Nexford Conveyor Systems Advisory Notice

59. Complete files for the product advisory notice issued by Nexford Conveyor Systems, LLC on or about August 7, 2020, which we understand resulted in total costs of approximately $340,000. We request all advisory notice documentation, customer communications, field service reports, and all insurance claim submissions and carrier payment documentation. Please confirm whether this event was treated as a formal recall claim under the product recall sub-limit of the Midland Casualty primary policy or was otherwise characterized and processed for insurance purposes.

VII. CORPORATE ORGANIZATIONAL DOCUMENTS

A. Nexford Industrial Holdings Inc.

60. Certificate of Incorporation of Nexford Industrial Holdings Inc. filed with the Secretary of State of the State of Delaware, together with all amendments, certificates of amendment, and restated certificates of incorporation. The Company's employer identification number is 83-2174650, and its registered address is c/o Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, Delaware 19801.

61. Bylaws of Nexford Industrial Holdings Inc., together with all amendments thereto.

B. Nexford Conveyor Systems, LLC

62. Certificate of Formation of Nexford Conveyor Systems, LLC filed with the Secretary of State of the State of Delaware, together with all amendments and certificates of amendment. The entity's employer identification number is 83-2174651, and its principal facility address is 4500 Industrial Parkway, Joliet, Illinois 60436.

63. Operating Agreement of Nexford Conveyor Systems, LLC, together with all amendments thereto.

C. Triton Fastener Corp.

64. Articles of Incorporation of Triton Fastener Corp. filed with the Secretary of State of the State of Illinois, together with all amendments thereto. The entity's employer identification number is 36-4892103, and its principal facility address is 1010 Whitman Avenue, Rockford, Illinois 61101.

65. Bylaws of Triton Fastener Corp., together with all amendments thereto.

D. Marlowe Asset Management Precision Machining, Inc.

66. Articles of Incorporation of Marlowe Asset Management Precision Machining, Inc. filed with the Secretary of State of the State of Ohio, together with all amendments thereto. The entity's employer identification number is 31-1784529, and its principal facility address is 775 Summit Industrial Boulevard, Akron, Ohio 44311.

67. Bylaws of Marlowe Asset Management Precision Machining, Inc., together with all amendments thereto.

E. Organizational Chart

68. The current corporate organizational chart showing the relationship among Nexford Industrial Holdings Inc. and its three operating subsidiaries—Nexford Conveyor Systems, LLC; Triton Fastener Corp.; and Marlowe Asset Management Precision Machining, Inc.—including the state of formation, ownership percentages, and any intermediate holding entities.

69. An identification of all entities that are currently named insureds or additional insureds under the D&O and PL towers, together with a confirmation of whether all entities that should be named insureds or additional insureds are in fact included on the applicable policy declarations.

VIII. BOARD AND GOVERNANCE DOCUMENTS

A. Board Composition

70. A current list of all directors of Nexford Industrial Holdings Inc., which we understand to consist of nine (9) members. Please identify the four (4) independent directors and the five (5) sponsor-appointed directors, including Chairman Gerald Whitcomb, and specify the committee memberships of each director.

71. Identification of any board observers, including Celeste Brogan, Partner, Portfolio Operations, at Veltrano Capital Partners, and any other individuals who regularly attend board meetings in a non-voting capacity.

B. Board Minutes and Resolutions

72. Minutes of all meetings of the board of directors of Nexford Industrial Holdings Inc. at which insurance matters—whether relating to D&O or product-liability coverage—were discussed during the current policy year (July 1, 2021 – July 1, 2022) and the two immediately preceding policy years.

73. Copies of all board resolutions authorizing the purchase, renewal, modification, or termination of D&O or PL insurance during the same period.

74. Minutes of any board committee meetings (including, without limitation, audit committee and risk committee meetings) at which insurance matters were discussed during the same period.

C. Indemnification Agreements

75. The form of director and officer indemnification agreement currently in use by Nexford Industrial Holdings Inc.

76. All executed individual indemnification agreements between Nexford Industrial Holdings Inc. and current and former directors and officers.

77. Any indemnification provisions contained in Nexford's bylaws or certificate of incorporation, to the extent not already produced in response to requests 60 and 61 above.

78. Any indemnification provisions contained in the investment documents of Veltrano Capital Partners Fund IV, LP, to the extent such provisions relate to the indemnification of sponsor-appointed directors serving on the Nexford board or otherwise bear on the scope of D&O coverage.

D. D&O Questionnaires

79. Any D&O questionnaires, personal history statements, or similar forms completed by individual directors and officers of Nexford Industrial Holdings Inc. in connection with the current or prior D&O policy applications.

IX. OWNERSHIP AND EQUITY DOCUMENTS

80. A summary of the current equity ownership of Nexford Industrial Holdings Inc., which we understand to be allocated as follows: Veltrano Capital Partners Fund IV, LP (68.5%); management rollover equity holders (19.3%); and co-investors (12.2%).

81. The stockholders' agreement, investors' agreement, or equivalent governing agreement among the equity holders of Nexford Industrial Holdings Inc., to the extent such agreement addresses insurance obligations, indemnification provisions, or governance provisions relevant to D&O coverage (including, without limitation, provisions requiring the maintenance of minimum D&O insurance limits, provisions addressing indemnification of sponsor-appointed directors, and provisions governing director appointment and removal rights).

82. Copies of any management equity incentive plan documents, including equity incentive plans, stock option agreements, restricted equity unit agreements, and management subscription agreements, to the extent such documents define "officer" or "employee" status or otherwise bear on the definition of "insured person" under the D&O policies.

X. FINANCIAL INFORMATION

83. Audited consolidated financial statements for fiscal year 2021, including the balance sheet, income statement, statement of cash flows, and notes to financial statements, as prepared by Pemberton & Associates CPAs, LLP. We understand that consolidated revenue for FY2021 was approximately $1,420,000,000 and EBITDA was approximately $218,000,000.

84. A breakdown of revenue by subsidiary for FY2021, which we understand to be as follows:

85. A summary of total funded debt, which we understand to be approximately $1,050,000,000 consisting of a Term Loan B facility and a Revolving Credit Facility, with Broadleaf Capital Markets, LLC serving as administrative agent.

86. Documentation reflecting the leveraged buyout enterprise value at the time of the 2018 acquisition (approximately $2,100,000,000) and any available estimates of the current enterprise value (approximately $2,600,000,000), to the extent such information has been documented in board materials, management presentations, or third-party valuations.

87. Information regarding annual SKU shipment volume across all three subsidiaries, which we understand to be approximately 42,000 SKUs shipped annually, together with any available product catalog or SKU classification data.

88. Any internal or external valuations, appraisals, or enterprise value assessments of Nexford Industrial Holdings Inc. or any of its subsidiaries prepared within the last two years, to the extent such materials are relevant to our limits adequacy analysis.

XI. CREDIT AGREEMENT AND DEBT DOCUMENTS

89. The Credit Agreement among Nexford Industrial Holdings Inc. (or its subsidiary borrower), the lenders party thereto, and Broadleaf Capital Markets, LLC as administrative agent, to the extent such agreement contains insurance covenants, minimum coverage requirements, provisions requiring the lender or administrative agent to be named as an additional insured or loss payee, or other provisions bearing on the Company's insurance program.

90. For the avoidance of doubt, we do not require production of the complete credit agreement and all ancillary loan documents at this time; rather, we request the specific sections, articles, or schedules addressing insurance obligations, together with any insurance-related compliance certificates that have been delivered by the Company to the administrative agent under the credit agreement.

XII. REGULATORY AND COMPLIANCE DOCUMENTS

91. Any citations, investigation letters, informal inquiries, consent agreements, or other correspondence received from the Occupational Safety and Health Administration ("OSHA") relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the current policy year or the three immediately preceding policy years.

92. Any investigation letters, subpoenas, information requests, Section 15(b) mandatory reporting submissions, or other correspondence involving the U.S. Consumer Product Safety Commission ("CPSC") relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the same period.

93. Any inquiries, investigations, subpoenas, or civil investigative demands received from any state attorney general relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the same period.

94. Any other regulatory proceedings, governmental investigations, or enforcement actions relevant to Nexford's D&O or product-liability exposure, including without limitation any Environmental Protection Agency proceedings, Department of Transportation investigations, or international regulatory matters.

XIII. ADDITIONAL INSURED AND CONTRACTUAL INSURANCE OBLIGATIONS

95. A summary or schedule of all contractual obligations requiring Nexford Industrial Holdings Inc. or any of its subsidiaries to maintain minimum insurance limits, name third parties as additional insureds, waive subrogation, or provide certificates of insurance, including the identity of the counterparty, the applicable contract, the required insurance types and minimum limits, and any additional insured or waiver of subrogation requirements.

96. The template or form certificates of insurance currently in use by Nexford and its subsidiaries, including any Acord 25 or Acord 28 certificate forms.

97. Copies of key customer contracts containing insurance requirements, to the extent readily available, particularly those with automotive and construction sector customers given the approximately 42,000 SKUs shipped annually to those industries. If a comprehensive production of all such contracts is impracticable, a representative sample of the five to ten largest customer contracts with the most significant insurance requirements would be sufficient for purposes of our initial review.

XIV. KESSLER QUINN ADVISORY GROUP MATERIALS

98. Any reports, analyses, memoranda, presentations, or other materials prepared by Kessler Quinn Advisory Group, including specifically by Arthur Kessler and Diana Cho, for Veltrano Capital Partners or for Nexford Industrial Holdings Inc. relating to Nexford's insurance program. We are particularly interested in any loss-modeling analyses, limits adequacy assessments, total cost of risk analyses, or benchmarking studies.

99. Any actuarial analyses, IBNR (incurred but not reported) reserve estimates, or loss-projection models prepared by Kessler Quinn Advisory Group, including the actuarial analysis referenced in Section VI.B above reflecting an IBNR estimate of approximately $2,100,000.

100. Any correspondence between Kessler Quinn Advisory Group and Veltrano Capital Partners or Nexford regarding recommendations for changes to insurance program structure, limits, retentions, or carrier composition.

XV. POTENTIAL IPO-RELATED MATERIALS

101. To the extent available and not subject to separate privilege or confidentiality restrictions, any preliminary materials, internal memoranda, board presentations, or advisor presentations regarding a potential initial public offering of Nexford Industrial Holdings Inc. in the 2023–2024 timeframe. We understand from General Counsel Priya Sundaram that the possibility of an IPO is relevant to our assessment of D&O tower adequacy, particularly with respect to pre-IPO Side-A coverage, prospectus liability exposure, and the potential need for a public-company D&O program structure.

102. To the extent available, any preliminary prospectus drafts, registration statement outlines, or due diligence checklists prepared by investment bankers, underwriters' counsel, or other advisors in connection with the potential IPO.

103. We understand that these materials may be at a very preliminary stage or may not yet exist. If that is the case, please so advise, and we will incorporate the IPO-related considerations into our review based on our discussions with Priya Sundaram and the Nexford team.

We appreciate your cooperation and prompt attention to these requests. Please provide all responsive documents to the attention of:

Naomi Petersen — npetersen@calderwoodharkness.com Yuki Nakamura — ynakamura@calderwoodharkness.com

Calderwood & Harkness LLP 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606

Physical deliveries of hard-copy documents should be directed to the same address and marked to the attention of Naomi Petersen.

If any category of this request raises questions, or if certain documents are unavailable or are maintained by third parties, please do not hesitate to contact me by email or telephone so that we can discuss alternative means of obtaining the necessary materials. We anticipate that follow-up requests may be issued as the review progresses, and we will endeavor to coordinate those requests efficiently to minimize the burden on the Nexford team.

If Nexford would prefer that we coordinate directly with Ashford Breckinridge LLP—specifically Phillip Garza and Tamara Fisk—for any broker-held materials, including tower summaries, placement memoranda, marketing submissions, and carrier correspondence, we are happy to do so upon your authorization.

We are grateful for your prompt attention to these requests. Given the upcoming renewal cycle and the anticipated broker submission date of May 3, 2022, timely receipt of these materials will be essential to ensuring that our review and analysis can be completed and made available to the Nexford team and to Ashford Breckinridge LLP in advance of the carrier renewal negotiations.

We look forward to working with you, Trevor, Priya, and the rest of the Nexford team on this engagement.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Naomi Petersen Lead Associate Insurance Recovery & Policyholder Advisory Group

Direct: (312) 555-7438

Email: npetersen@calderwoodharkness.com

Matter No.: 1005-00003

Enclosures: None (standalone request letter).

This document is a confidential attorney-client communication and may contain information that is privileged, confidential, and/or protected as attorney work product. It is intended solely for the use of the addressees identified above and those individuals copied herein. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.

Subsidiary	FY2021 Revenue	% of Total
Nexford Conveyor Systems, LLC	$795,200,000	56%
Triton Fastener Corp.	$397,600,000	28%
Marlowe Asset Management Precision Machining, Inc.	$227,200,000	16%
Total (Consolidated)	$1,420,000,000	100%

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Counselors at Law 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606 Tel: (312) 555-7400
Fax: (312) 555-7401
www.calderwoodharkness.com
April 28, 2022
Matter No.: 1005-00003 Billing Partner Code: AFO-7724
VIA E-MAIL AND HAND DELIVERY
Donna Kowalski Director of Insurance and Claims Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173
Trevor Haines Vice President, Risk Management Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173
From: Naomi Petersen, Lead Associate, Calderwood & Harkness LLP
cc: Douglas Fairchild, Responsible Partner, Calderwood & Harkness LLP Angela Fontaine, Billing Partner, Calderwood & Harkness LLP Priya Sundaram, General Counsel & Corporate Secretary, Nexford Industrial Holdings Inc. Yuki Nakamura, Working Associate, Calderwood & Harkness LLP
Re: Nexford Industrial Holdings Inc. — Directors & Officers Liability and Product-Liability Insurance Tower Review; Document Request List Matter No. 1005-00003
Dear Donna and Trevor:
Thank you again for the opportunity to work with the Nexford team on this important engagement. As you know, pursuant to the engagement letter dated April 22, 2022, executed by Douglas Fairchild on behalf of Calderwood & Harkness LLP and by Priya Sundaram on behalf of Nexford Industrial Holdings Inc. ("Nexford" or the "Company"), this matter was formally opened on April 26, 2022. Calderwood & Harkness has been engaged to conduct a comprehensive review of Nexford's Directors & Officers ("D&O") liability insurance tower and product-liability ("PL") insurance tower in connection with the upcoming 2022–2023 renewal cycle, for which the renewal effective date is July 1, 2022.
The incumbent policy period under review is July 1, 2021 through July 1, 2022. Our review will encompass an analysis of the adequacy of limits across both towers, a gap analysis identifying potential coverage deficiencies or areas of exposure, a policy wording comparison among layers and across renewal cycles, and an assessment of the coordination between the D&O and product-liability programs. We also understand from Priya Sundaram that the Company may be contemplating a potential initial public offering in the 2023–2024 timeframe, and we will factor that consideration into our D&O tower adequacy assessment.
In order to conduct this review in a thorough and timely manner, we request that the documents and information described below be provided to our team as promptly as practicable, and ideally no later than Friday, May 6, 2022. This timeline is necessary to allow adequate time for our review and analysis in advance of the broker marketing submission that we understand Ashford Breckinridge LLP intends to circulate to the carrier market on or about May 3, 2022, and the subsequent carrier renewal quote period. We recognize that certain materials may not be available by that date and appreciate your best efforts to identify and produce responsive materials on a rolling basis.
We request that responsive documents be provided in electronic format where available, preferably as searchable PDF files or in their native format (e.g., Microsoft Word or Excel). Hard copies are acceptable for original executed policy forms or other documents that are not available electronically. To facilitate an efficient review, we ask that responsive documents be organized by category, corresponding to the numbered sections set forth below.
Please do not hesitate to contact me or Yuki Nakamura if any category or request requires clarification or if certain documents are unavailable or are held by third parties such as your broker, Ashford Breckinridge LLP. We are happy to coordinate directly with your broker contacts, Phillip Garza and Tamara Fisk, for any broker-held materials if that would be more convenient.
The categories of requested documents and information are as follows:
I. DIRECTORS & OFFICERS LIABILITY INSURANCE — CURRENT POLICY YEAR (JULY 1, 2021 – JULY 1, 2022)
We request the following documents and information relating to each layer of Nexford's current D&O liability insurance tower:
A. Primary D&O Policy
1.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the primary Directors & Officers liability insurance policy issued by Vandermeer National Insurance Company, bearing Policy No. VNI-DO-2021-88473, for the policy period July 1, 2021 through July 1, 2022. We understand the policy provides limits of liability of $10,000,000 per claim and $10,000,000 in the annual aggregate, with an annual premium of $487,500 and a self-insured retention of $1,000,000 applicable to entity coverage.
2.  The complete application submitted to Vandermeer National Insurance Company in connection with the current policy period, including all attachments, schedules, supplemental questionnaires, warranty letters, and any other materials submitted as part of the underwriting process.
3.  Any binder or binder confirmation issued by Vandermeer National Insurance Company or Ashford Breckinridge LLP in connection with the binding of this coverage.
B. First Excess D&O Policy
4.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the first excess Directors & Officers liability insurance policy issued by Commonwealth Indemnity Group for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $10,000,000 limit, with an annual premium of $312,000.
5.  Any follow-form endorsements, coverage difference conditions, or standalone coverage grants contained in this excess policy.
C. Second Excess D&O Policy
6.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the second excess Directors & Officers liability insurance policy issued by Graystone Mutual Assurance Co. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $20,000,000 in limits, with an annual premium of $198,750.
D. Third Excess D&O Policy
7.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the third excess Directors & Officers liability insurance policy issued by Pinnacle Re Insurance Ltd. (Bermuda) for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $10,000,000 in excess of the underlying $30,000,000 in limits, with an annual premium of $141,200.
8.  Any non-admitted carrier filings, surplus lines filings, or other regulatory documentation associated with the placement of this policy with a Bermuda-domiciled carrier.
E. Side-A DIC Policy
9.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the Side-A Difference-in-Conditions ("DIC") Directors & Officers liability insurance policy issued by Harrington Specialty Insurance Co., bearing Policy No. HSI-DIC-2021-00342, for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides $15,000,000 in dedicated Side-A limits with no self-insured retention, and an annual premium of $224,000.
10.  Any coverage comparison or gap analysis that Ashford Breckinridge LLP or Harrington Specialty Insurance Co. prepared in connection with the placement of the Side-A DIC policy, to the extent such materials are in Nexford's possession.
F. D&O Tower Summary
11.  Any tower summary chart, placement slip, binder certificate, or program overview prepared by Ashford Breckinridge LLP for the current D&O tower, reflecting the total aggregate limit of $55,000,000 across all layers and the total annual premium of $1,363,450.
12.  Any rate-per-million analysis, premium allocation schedule, or benchmarking data provided by Ashford Breckinridge LLP in connection with the current D&O tower placement.
II. DIRECTORS & OFFICERS LIABILITY INSURANCE — PRIOR POLICY YEARS
13.  Complete policy forms, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the D&O liability insurance policies at all layers of the tower for the three policy years immediately preceding the current policy year—that is, the policy periods ending July 1, 2021, July 1, 2020, and July 1, 2019, respectively.
14.  To the extent that Ashford Breckinridge LLP has served as broker of record for Nexford's D&O program since 2019 or earlier, we request copies of all placement memoranda, broker reports, and program summaries prepared by Ashford Breckinridge LLP for those prior policy years.
15.  All prior-year applications, renewal submissions, warranty letters, and supplemental questionnaires submitted to D&O carriers in connection with the policy years identified above.
16.  Any Extended Reporting Period ("ERP" or "tail") policies or endorsements obtained in connection with any prior D&O policy year, including documentation reflecting the terms, duration, and premium for any such tail coverage.
17.  Any documentation reflecting changes in carrier composition, limits, retentions, or material policy terms from one renewal cycle to the next during the three prior policy years.
III. PRODUCT-LIABILITY / GENERAL LIABILITY INSURANCE — CURRENT POLICY YEAR (JULY 1, 2021 – JULY 1, 2022)
We request the following documents and information relating to each layer of Nexford's current product-liability and general liability insurance tower:
A. Primary GL/PL Policy
18.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the primary general liability and product-liability insurance policy issued by Midland Casualty & Surety Company, bearing Policy No. MCS-GL-2021-55671, for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $5,000,000 per occurrence and $10,000,000 in the annual aggregate, with an annual premium of $1,125,000 and a self-insured retention of $500,000 per occurrence.
19.  With respect to the product recall coverage provided under this policy, we request confirmation and documentation of the product recall sub-limit of $2,500,000 per occurrence and $5,000,000 in the aggregate, including the applicable endorsement or coverage section defining the scope of product recall coverage, covered recall expenses, and any applicable exclusions or conditions.
20.  Documentation of the completed operations coverage period, which we understand is stated to extend ten (10) years post-delivery. Please provide the specific endorsement or policy provision setting forth this coverage extension and any associated limitations or conditions.
21.  The complete application submitted to Midland Casualty & Surety Company in connection with the current policy period, including all attachments, schedules, product inventories, loss summaries, and supplemental questionnaires.
22.  Any binder or binder confirmation issued in connection with the binding of this coverage.
B. First Excess / Umbrella Policy
23.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the first excess/umbrella liability insurance policy issued by Great Basin Insurance Company for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $25,000,000 in excess of the underlying $10,000,000 aggregate limit, with an annual premium of $862,500.
24.  Documentation identifying all follow-form provisions, as well as any standalone coverage grants, drop-down provisions, or coverage extensions provided by this umbrella policy that differ from or expand upon the coverage provided by the underlying Midland Casualty primary policy.
C. Second Excess Policy
25.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the second excess liability insurance policy issued by Cornerstone Reinsurance Corp. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $25,000,000 in excess of the underlying $35,000,000 in limits, with an annual premium of $437,000.
D. Third Excess Policy
26.  The complete policy form, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the third excess liability insurance policy issued by Allegheny Pacific Underwriters, Inc. for the policy period July 1, 2021 through July 1, 2022. We understand this policy provides limits of liability of $15,000,000 in excess of the underlying $60,000,000 in limits, with an annual premium of $218,400.
E. PL Tower Summary
27.  Any tower summary chart, placement slip, binder certificate, or program overview prepared by Ashford Breckinridge LLP for the current PL tower, reflecting the total aggregate limit of $75,000,000 across all layers and the total annual premium of $2,642,900.
28.  Any rate-per-million analysis, premium allocation schedule, or benchmarking data provided by Ashford Breckinridge LLP in connection with the current PL tower placement.
IV. PRODUCT-LIABILITY / GENERAL LIABILITY INSURANCE — PRIOR POLICY YEARS
29.  Complete policy forms, including all declarations pages, coverage sections, conditions, and exclusions, together with all endorsements, riders, and amendments, for the product-liability and general liability insurance policies at all layers of the tower for the three policy years immediately preceding the current policy year—that is, the policy periods ending July 1, 2021, July 1, 2020, and July 1, 2019, respectively.
30.  All prior-year applications, renewal submissions, product schedules, loss summaries, and supplemental questionnaires submitted to PL/GL carriers in connection with the policy years identified above.
31.  Any Extended Reporting Period ("ERP" or "tail") policies or endorsements obtained in connection with any prior PL/GL policy year, including documentation reflecting the terms, duration, and premium for any such tail coverage.
32.  Any documentation reflecting occurrence-based coverage triggers for legacy product deliveries, including any retroactive date endorsements, prior acts coverage, or similar provisions.
33.  Any documentation reflecting changes in carrier composition, limits, retentions, or material policy terms from one renewal cycle to the next during the three prior policy years.
V. BROKER SUBMISSIONS AND MARKETING MATERIALS
34.  A copy of the broker marketing submission to be circulated by Ashford Breckinridge LLP for the upcoming 2022–2023 renewal cycle. We understand this submission is expected to be circulated to the carrier market on or about May 3, 2022. We request that Nexford provide us with a copy of this submission promptly upon its availability, or authorize Ashford Breckinridge LLP to provide it directly to our team.
35.  Copies of the broker marketing submissions circulated by Ashford Breckinridge LLP for the D&O and PL programs for each of the three prior renewal cycles.
36.  Any stewardship reports, program analysis reports, coverage benchmarking materials, peer-group comparisons, or market-condition reports provided by Ashford Breckinridge LLP to Nexford during the current or prior three policy years.
37.  Copies of all correspondence between Ashford Breckinridge LLP, including specifically Phillip Garza and Tamara Fisk, and Nexford, including specifically Donna Kowalski and Trevor Haines, concerning the incumbent D&O and PL tower placements and any mid-term modifications, endorsement requests, policy corrections, or changes to named insureds or additional insureds during the current or prior policy years.
38.  Copies of any carrier audit reports, risk engineering reports, loss control inspection reports, or underwriting survey reports generated by any carrier or third-party risk engineering firm during the current or prior three policy periods, whether relating to the D&O or PL programs.
VI. LOSS RUNS AND CLAIMS HISTORY
A. D&O Loss Runs
39.  Five-year loss runs from each of the D&O carriers in the current and prior towers, including Vandermeer National Insurance Company, Commonwealth Indemnity Group, Graystone Mutual Assurance Co., Pinnacle Re Insurance Ltd., and Harrington Specialty Insurance Co. We understand that the five-year D&O claims history reflects one reported claim—a shareholder demand letter received in 2020 that was resolved without any payment—and zero paid D&O losses during the five-year period.
40.  All correspondence related to the 2020 shareholder demand letter, including the initial notice of claim or notice of circumstances, any acknowledgment letters from carriers, any coverage determination letters, any reservation of rights letters, any declination letters, and any closing or file-closure correspondence.
41.  Any documentation reflecting the allocation of defense costs, if any, incurred in connection with the 2020 shareholder demand letter.
B. Product-Liability Loss Runs
42.  Five-year loss runs from each of the PL carriers in the current and prior towers, including Midland Casualty & Surety Company, Great Basin Insurance Company, Cornerstone Reinsurance Corp., and Allegheny Pacific Underwriters, Inc. We understand that the five-year PL claims history reflects twelve (12) reported claims, of which nine (9) are closed with total paid losses of $4,720,000 and three (3) remain open with total reserves of $8,300,000.
43.  A copy of any actuarial report, loss-modeling analysis, or IBNR (incurred but not reported) reserve analysis prepared by Kessler Quinn Advisory Group. We understand that Kessler Quinn's current IBNR estimate is approximately $2,100,000, yielding a total five-year incurred amount of approximately $15,120,000 (comprising $4,720,000 in paid losses, $8,300,000 in reserves, and $2,100,000 in IBNR).
44.  Any loss development triangles, loss ratio analyses, or frequency-severity analyses prepared by Ashford Breckinridge LLP, Kessler Quinn Advisory Group, or any carrier in connection with the PL program.
C. Pending Claims Files
We request complete claims files, including all correspondence, coverage position letters, reservation of rights letters, defense counsel status reports, and defense cost summaries, for the following pending product-liability lawsuits:
1. *Higgins v. Nexford Conveyor Systems, LLC et al.*
45.  Complete claims file for the lawsuit styled Higgins v. Nexford Conveyor Systems, LLC et al., Case No. 2021-L-04382, pending in the Circuit Court of Will County, Illinois. This action was filed on September 14, 2021, and the plaintiff alleges a catastrophic crush injury caused by an alleged defect in the emergency stop mechanism on a Model NCS-7200 conveyor system installed at a grain processing facility. The plaintiff seeks damages in the amount of $14,500,000. We understand this matter is currently active and in the discovery phase as of the date of this request.
46.  All correspondence to and from Midland Casualty & Surety Company relating to this claim, including notice of claim submissions, acknowledgment letters, coverage determination letters, reservation of rights letters (if any), and defense counsel assignment communications.
47.  All defense cost reporting, including invoices, fee statements, litigation budgets, and any carrier-imposed billing guidelines applicable to this matter.
48.  All pleadings, motions, court orders, and other significant court filings in this matter.
49.  All reports, status memoranda, and correspondence from Hollander Byrne & Strauss LLP, including specifically Catherine Byrne and Rafael Mendez, serving as outside litigation counsel for Nexford in this matter.
2. *Consolidated Builders Supply Co. v. Triton Fastener Corp.*
50.  Complete claims file for the lawsuit styled Consolidated Builders Supply Co. v. Triton Fastener Corp., Case No. 1:21-cv-08914, pending in the United States District Court for the Northern District of Illinois. This action was filed on November 2, 2021, and the plaintiff alleges structural failure of Grade 8 hex bolts manufactured by Triton Fastener Corp. in a commercial building project, resulting in a partial wall collapse and claimed property damage and business interruption losses of approximately $6,800,000. We understand that the defendant's motion to dismiss was denied by order dated February 11, 2022, and the matter is currently active.
51.  All correspondence to and from Midland Casualty & Surety Company relating to this claim, including notice of claim submissions, acknowledgment letters, coverage determination letters, reservation of rights letters (if any), and defense counsel assignment communications.
52.  All defense cost reporting, including invoices, fee statements, litigation budgets, and any carrier-imposed billing guidelines applicable to this matter.
53.  All pleadings, motions, court orders (including the February 11, 2022 order denying the motion to dismiss), and other significant court filings in this matter.
54.  All reports, status memoranda, and correspondence from Hollander Byrne & Strauss LLP serving as outside litigation counsel for Triton Fastener Corp. in this matter.
3. Any Other Open or Recently Closed Claims
55.  Complete claims files for all other open product-liability claims under the current or prior three policy years not specifically identified above.
56.  A summary of defense costs incurred to date on all open product-liability claims, broken down by claim number, policy year, carrier, and cumulative defense costs incurred.
57.  Claims files for any product-liability claims closed within the past twelve (12) months that resulted in a payment, settlement, or judgment.
D. Product Recall History
We request complete files for the following product recall events:
1. Triton Fastener Corp. Voluntary Product Recall
58.  Complete files for the voluntary product recall initiated by Triton Fastener Corp. on or about March 12, 2020, which we understand resulted in total recall-related costs of approximately $1,100,000. We request all recall-related documentation, including any U.S. Consumer Product Safety Commission ("CPSC") correspondence, mandatory or voluntary recall notices, corrective action plans, product remediation records, customer notifications, and all insurance claim submissions and carrier payment documentation.
2. Nexford Conveyor Systems Advisory Notice
59.  Complete files for the product advisory notice issued by Nexford Conveyor Systems, LLC on or about August 7, 2020, which we understand resulted in total costs of approximately $340,000. We request all advisory notice documentation, customer communications, field service reports, and all insurance claim submissions and carrier payment documentation. Please confirm whether this event was treated as a formal recall claim under the product recall sub-limit of the Midland Casualty primary policy or was otherwise characterized and processed for insurance purposes.
VII. CORPORATE ORGANIZATIONAL DOCUMENTS
A. Nexford Industrial Holdings Inc.
60.  Certificate of Incorporation of Nexford Industrial Holdings Inc. filed with the Secretary of State of the State of Delaware, together with all amendments, certificates of amendment, and restated certificates of incorporation. The Company's employer identification number is 83-2174650, and its registered address is c/o Cobalt Ridge Technologies, 1209 Orange Street, Wilmington, Delaware 19801.
61.  Bylaws of Nexford Industrial Holdings Inc., together with all amendments thereto.
B. Nexford Conveyor Systems, LLC
62.  Certificate of Formation of Nexford Conveyor Systems, LLC filed with the Secretary of State of the State of Delaware, together with all amendments and certificates of amendment. The entity's employer identification number is 83-2174651, and its principal facility address is 4500 Industrial Parkway, Joliet, Illinois 60436.
63.  Operating Agreement of Nexford Conveyor Systems, LLC, together with all amendments thereto.
C. Triton Fastener Corp.
64.  Articles of Incorporation of Triton Fastener Corp. filed with the Secretary of State of the State of Illinois, together with all amendments thereto. The entity's employer identification number is 36-4892103, and its principal facility address is 1010 Whitman Avenue, Rockford, Illinois 61101.
65.  Bylaws of Triton Fastener Corp., together with all amendments thereto.
D. Marlowe Asset Management Precision Machining, Inc.
66.  Articles of Incorporation of Marlowe Asset Management Precision Machining, Inc. filed with the Secretary of State of the State of Ohio, together with all amendments thereto. The entity's employer identification number is 31-1784529, and its principal facility address is 775 Summit Industrial Boulevard, Akron, Ohio 44311.
67.  Bylaws of Marlowe Asset Management Precision Machining, Inc., together with all amendments thereto.
E. Organizational Chart
68.  The current corporate organizational chart showing the relationship among Nexford Industrial Holdings Inc. and its three operating subsidiaries—Nexford Conveyor Systems, LLC; Triton Fastener Corp.; and Marlowe Asset Management Precision Machining, Inc.—including the state of formation, ownership percentages, and any intermediate holding entities.
69.  An identification of all entities that are currently named insureds or additional insureds under the D&O and PL towers, together with a confirmation of whether all entities that should be named insureds or additional insureds are in fact included on the applicable policy declarations.
VIII. BOARD AND GOVERNANCE DOCUMENTS
A. Board Composition
70.  A current list of all directors of Nexford Industrial Holdings Inc., which we understand to consist of nine (9) members. Please identify the four (4) independent directors and the five (5) sponsor-appointed directors, including Chairman Gerald Whitcomb, and specify the committee memberships of each director.
71.  Identification of any board observers, including Celeste Brogan, Partner, Portfolio Operations, at Veltrano Capital Partners, and any other individuals who regularly attend board meetings in a non-voting capacity.
B. Board Minutes and Resolutions
72.  Minutes of all meetings of the board of directors of Nexford Industrial Holdings Inc. at which insurance matters—whether relating to D&O or product-liability coverage—were discussed during the current policy year (July 1, 2021 – July 1, 2022) and the two immediately preceding policy years.
73.  Copies of all board resolutions authorizing the purchase, renewal, modification, or termination of D&O or PL insurance during the same period.
74.  Minutes of any board committee meetings (including, without limitation, audit committee and risk committee meetings) at which insurance matters were discussed during the same period.
C. Indemnification Agreements
75.  The form of director and officer indemnification agreement currently in use by Nexford Industrial Holdings Inc.
76.  All executed individual indemnification agreements between Nexford Industrial Holdings Inc. and current and former directors and officers.
77.  Any indemnification provisions contained in Nexford's bylaws or certificate of incorporation, to the extent not already produced in response to requests 60 and 61 above.
78.  Any indemnification provisions contained in the investment documents of Veltrano Capital Partners Fund IV, LP, to the extent such provisions relate to the indemnification of sponsor-appointed directors serving on the Nexford board or otherwise bear on the scope of D&O coverage.
D. D&O Questionnaires
79.  Any D&O questionnaires, personal history statements, or similar forms completed by individual directors and officers of Nexford Industrial Holdings Inc. in connection with the current or prior D&O policy applications.
IX. OWNERSHIP AND EQUITY DOCUMENTS
80.  A summary of the current equity ownership of Nexford Industrial Holdings Inc., which we understand to be allocated as follows: Veltrano Capital Partners Fund IV, LP (68.5%); management rollover equity holders (19.3%); and co-investors (12.2%).
81.  The stockholders' agreement, investors' agreement, or equivalent governing agreement among the equity holders of Nexford Industrial Holdings Inc., to the extent such agreement addresses insurance obligations, indemnification provisions, or governance provisions relevant to D&O coverage (including, without limitation, provisions requiring the maintenance of minimum D&O insurance limits, provisions addressing indemnification of sponsor-appointed directors, and provisions governing director appointment and removal rights).
82.  Copies of any management equity incentive plan documents, including equity incentive plans, stock option agreements, restricted equity unit agreements, and management subscription agreements, to the extent such documents define "officer" or "employee" status or otherwise bear on the definition of "insured person" under the D&O policies.
X. FINANCIAL INFORMATION
83.  Audited consolidated financial statements for fiscal year 2021, including the balance sheet, income statement, statement of cash flows, and notes to financial statements, as prepared by Pemberton & Associates CPAs, LLP. We understand that consolidated revenue for FY2021 was approximately $1,420,000,000 and EBITDA was approximately $218,000,000.
84.  A breakdown of revenue by subsidiary for FY2021, which we understand to be as follows:
85.  A summary of total funded debt, which we understand to be approximately $1,050,000,000 consisting of a Term Loan B facility and a Revolving Credit Facility, with Broadleaf Capital Markets, LLC serving as administrative agent.
86.  Documentation reflecting the leveraged buyout enterprise value at the time of the 2018 acquisition (approximately $2,100,000,000) and any available estimates of the current enterprise value (approximately $2,600,000,000), to the extent such information has been documented in board materials, management presentations, or third-party valuations.
87.  Information regarding annual SKU shipment volume across all three subsidiaries, which we understand to be approximately 42,000 SKUs shipped annually, together with any available product catalog or SKU classification data.
88.  Any internal or external valuations, appraisals, or enterprise value assessments of Nexford Industrial Holdings Inc. or any of its subsidiaries prepared within the last two years, to the extent such materials are relevant to our limits adequacy analysis.
XI. CREDIT AGREEMENT AND DEBT DOCUMENTS
89.  The Credit Agreement among Nexford Industrial Holdings Inc. (or its subsidiary borrower), the lenders party thereto, and Broadleaf Capital Markets, LLC as administrative agent, to the extent such agreement contains insurance covenants, minimum coverage requirements, provisions requiring the lender or administrative agent to be named as an additional insured or loss payee, or other provisions bearing on the Company's insurance program.
90.  For the avoidance of doubt, we do not require production of the complete credit agreement and all ancillary loan documents at this time; rather, we request the specific sections, articles, or schedules addressing insurance obligations, together with any insurance-related compliance certificates that have been delivered by the Company to the administrative agent under the credit agreement.
XII. REGULATORY AND COMPLIANCE DOCUMENTS
91.  Any citations, investigation letters, informal inquiries, consent agreements, or other correspondence received from the Occupational Safety and Health Administration ("OSHA") relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the current policy year or the three immediately preceding policy years.
92.  Any investigation letters, subpoenas, information requests, Section 15(b) mandatory reporting submissions, or other correspondence involving the U.S. Consumer Product Safety Commission ("CPSC") relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the same period.
93.  Any inquiries, investigations, subpoenas, or civil investigative demands received from any state attorney general relating to Nexford Industrial Holdings Inc. or any of its subsidiaries during the same period.
94.  Any other regulatory proceedings, governmental investigations, or enforcement actions relevant to Nexford's D&O or product-liability exposure, including without limitation any Environmental Protection Agency proceedings, Department of Transportation investigations, or international regulatory matters.
XIII. ADDITIONAL INSURED AND CONTRACTUAL INSURANCE OBLIGATIONS
95.  A summary or schedule of all contractual obligations requiring Nexford Industrial Holdings Inc. or any of its subsidiaries to maintain minimum insurance limits, name third parties as additional insureds, waive subrogation, or provide certificates of insurance, including the identity of the counterparty, the applicable contract, the required insurance types and minimum limits, and any additional insured or waiver of subrogation requirements.
96.  The template or form certificates of insurance currently in use by Nexford and its subsidiaries, including any Acord 25 or Acord 28 certificate forms.
97.  Copies of key customer contracts containing insurance requirements, to the extent readily available, particularly those with automotive and construction sector customers given the approximately 42,000 SKUs shipped annually to those industries. If a comprehensive production of all such contracts is impracticable, a representative sample of the five to ten largest customer contracts with the most significant insurance requirements would be sufficient for purposes of our initial review.
XIV. KESSLER QUINN ADVISORY GROUP MATERIALS
98.  Any reports, analyses, memoranda, presentations, or other materials prepared by Kessler Quinn Advisory Group, including specifically by Arthur Kessler and Diana Cho, for Veltrano Capital Partners or for Nexford Industrial Holdings Inc. relating to Nexford's insurance program. We are particularly interested in any loss-modeling analyses, limits adequacy assessments, total cost of risk analyses, or benchmarking studies.
99.  Any actuarial analyses, IBNR (incurred but not reported) reserve estimates, or loss-projection models prepared by Kessler Quinn Advisory Group, including the actuarial analysis referenced in Section VI.B above reflecting an IBNR estimate of approximately $2,100,000.
100.  Any correspondence between Kessler Quinn Advisory Group and Veltrano Capital Partners or Nexford regarding recommendations for changes to insurance program structure, limits, retentions, or carrier composition.
XV. POTENTIAL IPO-RELATED MATERIALS
101.  To the extent available and not subject to separate privilege or confidentiality restrictions, any preliminary materials, internal memoranda, board presentations, or advisor presentations regarding a potential initial public offering of Nexford Industrial Holdings Inc. in the 2023–2024 timeframe. We understand from General Counsel Priya Sundaram that the possibility of an IPO is relevant to our assessment of D&O tower adequacy, particularly with respect to pre-IPO Side-A coverage, prospectus liability exposure, and the potential need for a public-company D&O program structure.
102.  To the extent available, any preliminary prospectus drafts, registration statement outlines, or due diligence checklists prepared by investment bankers, underwriters' counsel, or other advisors in connection with the potential IPO.
103.  We understand that these materials may be at a very preliminary stage or may not yet exist. If that is the case, please so advise, and we will incorporate the IPO-related considerations into our review based on our discussions with Priya Sundaram and the Nexford team.
We appreciate your cooperation and prompt attention to these requests. Please provide all responsive documents to the attention of:
Naomi Petersen — npetersen@calderwoodharkness.com Yuki Nakamura — ynakamura@calderwoodharkness.com
Calderwood & Harkness LLP 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606
Physical deliveries of hard-copy documents should be directed to the same address and marked to the attention of Naomi Petersen.
If any category of this request raises questions, or if certain documents are unavailable or are maintained by third parties, please do not hesitate to contact me by email or telephone so that we can discuss alternative means of obtaining the necessary materials. We anticipate that follow-up requests may be issued as the review progresses, and we will endeavor to coordinate those requests efficiently to minimize the burden on the Nexford team.
If Nexford would prefer that we coordinate directly with Ashford Breckinridge LLP—specifically Phillip Garza and Tamara Fisk—for any broker-held materials, including tower summaries, placement memoranda, marketing submissions, and carrier correspondence, we are happy to do so upon your authorization.
We are grateful for your prompt attention to these requests. Given the upcoming renewal cycle and the anticipated broker submission date of May 3, 2022, timely receipt of these materials will be essential to ensuring that our review and analysis can be completed and made available to the Nexford team and to Ashford Breckinridge LLP in advance of the carrier renewal negotiations.
We look forward to working with you, Trevor, Priya, and the rest of the Nexford team on this engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Naomi Petersen Lead Associate Insurance Recovery & Policyholder Advisory Group
Direct: (312) 555-7438
Email: npetersen@calderwoodharkness.com
Matter No.: 1005-00003
Enclosures: None (standalone request letter).
This document is a confidential attorney-client communication and may contain information that is privileged, confidential, and/or protected as attorney work product. It is intended solely for the use of the addressees identified above and those individuals copied herein. Any unauthorized review, use, disclosure, or distribution is prohibited. If you have received this communication in error, please notify the sender immediately and destroy all copies.
Subsidiary | FY2021 Revenue | % of Total
Nexford Conveyor Systems, LLC | $795,200,000 | 56%
Triton Fastener Corp. | $397,600,000 | 28%
Marlowe Asset Management Precision Machining, Inc. | $227,200,000 | 16%
Total (Consolidated) | $1,420,000,000 | 100%