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

engagement-letter-nexford-tower-review.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606

Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com

April 22, 2022

VIA EMAIL AND FIRST-CLASS MAIL

Priya Sundaram, Esq. General Counsel & Corporate Secretary Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173

Re: Engagement of Calderwood & Harkness LLP — D&O and Product-Liability Insurance Tower Review Matter No. 1005-00003

Dear Ms. Sundaram:

Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm the terms of our engagement by Nexford Industrial Holdings Inc. ("Nexford" or the "Company") in connection with a comprehensive review of the Company's Directors & Officers liability insurance tower and product-liability insurance tower. We appreciate the Company's confidence in retaining our firm for this important undertaking, and we look forward to partnering with you and your team to ensure that Nexford's insurance programs are optimally structured for the upcoming renewal cycle.

This engagement letter (this "Letter") sets forth the terms and conditions under which the Firm will provide legal services to the Company in connection with the matters described herein.

1. Purpose and Scope of Engagement

This engagement is undertaken in connection with the Company's upcoming 2022–2023 renewal cycle for both the D&O and product-liability insurance towers. The current policy period for both towers runs from July 1, 2021 through July 1, 2022, with the current policies set to expire on July 1, 2022. The renewal effective date is targeted for July 1, 2022, and accordingly, time is of the essence in commencing and completing the substantive phases of the review in advance of the renewal marketing process.

This engagement is opened pursuant to, and governed by, the Standing Outside Counsel Agreement between Calderwood & Harkness LLP and Nexford Industrial Holdings Inc. dated January 15, 2020 (the "Standing Agreement"). Except as specifically modified or supplemented herein, all terms and conditions of the Standing Agreement, including but not limited to provisions regarding confidentiality, data security, document retention, indemnification, insurance, and limitation of liability, remain in full force and effect. In the event of any conflict between the terms of this Letter and the Standing Agreement, the terms of this Letter shall control with respect to the specific subject matter of this engagement.

Scope of Work

The engagement will encompass the following work streams, each of which is described in further detail below:

D&O Tower Review. The Firm will conduct a thorough review and analysis of the Company's five-layer Directors & Officers liability insurance program. The current program consists of a primary layer, three successive excess layers, and a Side-A difference-in-conditions ("DIC") policy, providing an aggregate tower limit of $55 million. The total annual premium for the D&O tower for the 2021–2022 policy year is $1,363,450. Our review will encompass the policy forms, endorsements, applications, and any supplemental underwriting materials associated with each layer. We will evaluate the scope and adequacy of coverage afforded to the Company's directors and officers, including coverage for securities claims, derivative actions, regulatory investigations, and other insured events, as well as entity coverage and securities entity coverage where applicable.

Product-Liability Tower Review. The Firm will conduct a thorough review and analysis of the Company's four-layer product-liability and general liability insurance program. The current program consists of a primary commercial general liability/products-completed operations layer, an excess/umbrella layer, and two additional excess layers, providing an aggregate tower limit of $75 million. The total annual premium for the product-liability tower for the 2021–2022 policy year is $2,642,900. Our review will encompass the policy forms, endorsements, certificates of insurance, and any supplemental underwriting materials associated with each layer. Particular attention will be given to products-completed operations coverage, contractual liability provisions, additional insured endorsements, and the interplay between the general liability and products liability coverages.

Gap Analysis. The Firm will identify and document coverage gaps, inconsistencies in policy wording across layers, and potential areas of exposure within each tower. This analysis will include, without limitation, an examination of whether excess and umbrella policies properly follow form to the underlying policies, whether there are drop-down provisions that are triggered by erosion or exhaustion of underlying limits, and whether there are any gaps in coverage that could leave the Company or its directors and officers uninsured or underinsured for particular categories of claims. The gap analysis will be presented in a comprehensive written report with specific remediation recommendations.

Policy Wording Comparison. The Firm will prepare a clause-by-clause comparison of key provisions across all layers in each tower. This comparison will cover, at a minimum, the following categories of provisions: (i) insuring agreements, (ii) definitions (including the definitions of "claim," "loss," "insured person," "wrongful act," "products," "occurrence," "bodily injury," and "property damage," as applicable), (iii) exclusions, (iv) conditions (including notice provisions, cooperation clauses, subrogation provisions, and allocation provisions), (v) retention and deductible structures, (vi) priority-of-payment provisions, and (vii) endorsements. The comparison will be presented in a matrix format to facilitate identification of inconsistencies and areas of concern.

Adequacy of Limits Analysis. The Firm will assess the adequacy of current aggregate limits in each tower relative to the Company's risk profile, including the nature and scale of the Company's manufacturing operations, the geographic distribution of its products, and the Company's revenue and asset base. This analysis will take into account the Company's claims history over the most recent five-year period, industry benchmarking data (to be obtained in coordination with the Company's insurance broker), and forward-looking considerations, including any potential future capital markets activity such as an initial public offering, secondary offering, or debt issuance that may be under consideration by the Company or its equity sponsor, Veltrano Capital Partners Fund IV, LP.

Coordination Review. The Firm will analyze the coordination between the D&O and product-liability programs, including potential overlap or gaps where claims could implicate both programs simultaneously. This is particularly relevant given the Company's manufacturing operations and the possibility that product-liability claims against the Company could give rise to related securities or derivative claims against directors and officers. The coordination review will also address allocation issues that may arise when a single set of facts triggers coverage under multiple programs.

Renewal Support. The Firm will provide advisory support throughout the renewal process, including review of broker marketing submissions and placement memoranda, analysis of carrier quotes and proposed renewal terms, preparation of negotiation points memoranda identifying key terms to be negotiated with carriers, and ongoing advisory support through the binding of the renewed towers. The Firm will work in close coordination with the Company's insurance broker of record, Ashford Breckinridge LLP, in connection with these activities.

Post-Bind Review. Following the binding of the renewed towers, the Firm will conduct a confirmation review to ensure that the final issued policy forms, endorsements, and binders conform to the negotiated binder terms and that all agreed-upon manuscript changes have been accurately reflected in the issued policies. The Firm will prepare a summary memorandum documenting any discrepancies identified and recommended corrective actions.

Carriers Under Review

The following insurance carriers and policy details are subject to review under this engagement:

D&O Tower (2021–2022 Policy Year):

Product-Liability Tower (2021–2022 Policy Year):

The Firm will request complete copies of all policies, binders, endorsements, and related correspondence for each of the foregoing carriers and layers as part of the initial document request referenced in Section 7 below.

Named Insureds. The review will address coverage as it pertains to Nexford Industrial Holdings Inc. and its three operating subsidiaries, which are listed as named or additional named insureds under the applicable policies. The named insured entities are as follows:

(a) Nexford Industrial Holdings Inc. — a Delaware corporation; Employer Identification Number 83-2174650; principal office at 2200 Corporate Center Drive, Suite 800, Schaumburg, Illinois 60173.

(b) Nexford Conveyor Systems, LLC — a Delaware limited liability company; Employer Identification Number 83-2174651; principal manufacturing facility located at 4500 Industrial Parkway, Joliet, Illinois 60436.

(c) Triton Fastener Corp. — an Illinois corporation; Employer Identification Number 36-4892103; principal manufacturing facility located at 1010 Whitman Avenue, Rockford, Illinois 61101.

(d) Marlowe Asset Management Precision Machining, Inc. — an Ohio corporation; Employer Identification Number 31-1784529; principal manufacturing facility located at 775 Summit Industrial Boulevard, Akron, Ohio 44311.

The Firm will verify, as part of its review, that all named insured entities are properly scheduled under each layer of each tower and that subsidiary coverage provisions are consistent across layers.

Matters Informing the Review

The review is informed, in part, by two pending product-liability lawsuits involving Nexford subsidiaries, which are relevant both to the claims-related aspects of the tower analysis and to the assessment of policy responsiveness:

(a) Higgins v. Nexford Conveyor Systems, LLC et al., Case No. 2021-L-04382, Circuit Court of Will County, Illinois (filed September 14, 2021). The complaint alleges personal injuries arising from an alleged defect in a conveyor system manufactured and installed by Nexford Conveyor Systems, LLC. Damages sought: approximately $14.5 million. The case is currently in the fact discovery phase.

(b) Consolidated Builders Supply Co. v. Triton Fastener Corp., Case No. 1:21-cv-08914, United States District Court for the Northern District of Illinois (filed November 2, 2021). The complaint alleges property damage and economic losses arising from an alleged defect in industrial fastening products manufactured by Triton Fastener Corp. Damages sought: approximately $6.8 million. The case is currently in the pleadings stage, with a motion to dismiss pending.

Important Note: C&H is not engaged to provide litigation defense in either of these matters, nor is C&H being retained to render formal coverage opinions with respect to either claim. Outside litigation counsel for both matters is Hollander Byrne & Strauss LLP, with Catherine Byrne, Partner, serving as lead counsel. The Firm's review of these matters in the context of this engagement is limited to assessing how the pending claims inform the general tower analysis, including the adequacy of existing limits, the potential for erosion of layers, and any policy terms or conditions that may be implicated by the nature of the pending claims.

2. Staffing

The following attorneys will be assigned to this matter and will comprise the core engagement team:

Douglas Fairchild will serve as the responsible partner and primary point of contact for the engagement. Mr. Fairchild will have overall supervisory responsibility for all aspects of the engagement, including the strategic direction of the tower review, the quality and completeness of all deliverables, and the management of client communications. Mr. Fairchild brings over twenty-five years of experience in insurance coverage and risk management matters, including extensive experience with D&O and product-liability programs for middle-market and large-cap industrial companies. All substantive questions regarding the engagement should be directed to Mr. Fairchild in the first instance.

Angela Fontaine will serve as billing partner for the engagement (Billing Partner Code: AFO-7724). Ms. Fontaine will be responsible for billing administration, including the review and approval of all invoices prior to submission to the Company. In addition, Ms. Fontaine will be involved in substantive review as needed, particularly with respect to complex policy interpretation questions and the adequacy of limits analysis. Ms. Fontaine's involvement will be calibrated to avoid unnecessary duplication of effort with Mr. Fairchild.

Naomi Petersen will serve as lead associate and will be responsible for the day-to-day management of the policy review, gap analysis, and policy wording comparison work streams. Ms. Petersen will prepare all memoranda, reports, and comparison matrices, and will serve as the principal drafter of the negotiation points memoranda for the renewal process. Ms. Petersen will also coordinate directly with the Company's insurance broker and with the Company's internal risk management team on document collection and information gathering.

Yuki Nakamura will provide associate-level support across all work streams, with particular emphasis on claims-related coverage analysis and litigation-interface matters. Mr. Nakamura will review claims files and loss runs, analyze the implications of the two pending product-liability actions for the tower review, and coordinate with Hollander Byrne & Strauss LLP as directed.

Additional attorneys or paraprofessionals may be assigned to the matter as needed to ensure timely completion of work, subject to prior notice to the Company. The Firm will endeavor to provide at least five business days' advance notice before assigning additional personnel. Rates for any additional personnel will be consistent with the rate schedule set forth in Exhibit A to the Standing Agreement, as adjusted in accordance with the annual rate adjustment provisions thereof.

3. Fees and Billing Arrangements

Hourly Rates. Consistent with the terms of the Standing Agreement, legal services rendered in connection with this engagement will be billed on an hourly basis at the following rates, which reflect the current rate schedule applicable to the Company:

• Partners: $1,150 per hour

• Senior Associates (years 5+): $825 per hour

• Associates (years 1–4): $625 per hour

• Paraprofessionals / Legal Assistants: As set forth in the Standing Agreement rate schedule

These rates are subject to the annual adjustment provisions set forth in Section 4(b) of the Standing Agreement. Any rate adjustments that take effect during the pendency of this engagement will be applied prospectively only, beginning with the first billing period following the effective date of the adjustment, and will be communicated to the Company's General Counsel in writing not less than thirty (30) days prior to the effective date.

Billing Cycle. Invoices will be rendered monthly, in arrears, for professional fees incurred during the preceding calendar month. Each invoice will include a detailed narrative description of the services performed, the identity of each timekeeper, the hours expended by each timekeeper, and the applicable hourly rate. Invoices will be submitted in the format specified in the Standing Agreement and in compliance with any applicable billing guidelines provided by the Company.

Payment is due within thirty (30) days of the invoice date. Late payments will be subject to the provisions of the Standing Agreement regarding interest on overdue amounts, if any.

Disbursements. The Company will be responsible for reimbursement of reasonable out-of-pocket disbursements incurred by the Firm in connection with the engagement. Disbursements will be billed at the Firm's actual cost without markup and may include, without limitation, the following categories of expenses:

• Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with in-person meetings with the Company, its broker, or insurance carriers, in each case in compliance with the Company's travel and expense policy as communicated to the Firm;

• Document reproduction and printing costs;

• Electronic research charges (e.g., Westmark Data Systems, Sundial Solutions, and specialty insurance databases);

• Courier, delivery, and postage fees;

• Filing fees and recording fees, if applicable; and

• Any other disbursements specifically approved in advance by the Company's General Counsel or designee.

The Firm will not incur any individual disbursement in excess of $2,500 without prior approval from the Company, except in circumstances where delay would materially prejudice the engagement.

Estimated Fees. Given the scope of the engagement as described in Section 1 above, we estimate that total professional fees for the engagement will fall within the range of $150,000 to $225,000 through completion of the renewal cycle and post-bind review. This estimate is based on our current understanding of the scope and complexity of the matters to be reviewed and assumes reasonable cooperation by the Company and its third-party advisors in providing requested documents and information in a timely manner. The actual fees incurred may be higher or lower than this estimate depending on a number of factors, including the complexity of carrier negotiations during the renewal process, the number and significance of coverage issues identified in the gap analysis, the extent of manuscript policy wording changes negotiated with carriers, and any changes in the scope of the engagement. This estimate is provided for the Company's budgeting purposes only and does not constitute a cap, fixed fee, or maximum fee arrangement.

The Firm will provide periodic budget updates to the Company's General Counsel and will promptly notify the Company if it becomes apparent that total fees are likely to exceed the upper end of the estimated range.

Matter Administration. All professional time and disbursements incurred in connection with this engagement will be recorded under Matter No. 1005-00003. The billing partner for the matter is Angela Fontaine (Billing Partner Code: AFO-7724). All billing inquiries should be directed to Ms. Fontaine or to the Firm's billing department at billing@calderwoodharkness.com.

4. Client Identification

For purposes of this engagement, the client is Nexford Industrial Holdings Inc., a Delaware corporation. The Firm's duties of loyalty, confidentiality, and diligent representation run to Nexford Industrial Holdings Inc. as the identified client.

The Firm does not represent, and this engagement does not create an attorney-client relationship with, any of the following:

(a) Any subsidiary of Nexford Industrial Holdings Inc., including Nexford Conveyor Systems, LLC, Triton Fastener Corp., and Marlowe Asset Management Precision Machining, Inc. While the Firm's review will encompass insurance coverage as it pertains to these subsidiaries in their capacity as named or additional named insureds, the Firm's client remains Nexford Industrial Holdings Inc. as the parent entity;

(b) Any director or officer of Nexford Industrial Holdings Inc. or any of its subsidiaries, in their individual capacity;

(d) Veltrano Capital Partners, LLC, the management company and general partner affiliate of Veltrano Capital Partners Fund IV, LP; or

(e) Any other affiliate, equity holder, limited partner, portfolio company, or related entity of Nexford or Veltrano Capital Partners.

The Firm acknowledges that, in the course of this engagement, it may communicate with representatives of Veltrano Capital Partners, including personnel of Veltrano Capital Partners, LLC and its affiliated entities, regarding matters relevant to the insurance tower review, particularly in connection with the adequacy of limits analysis and any forward-looking capital markets considerations. Such communications will be undertaken at the direction and with the express consent of the Company's General Counsel. However, any such communication does not establish an attorney-client relationship between the Firm and Veltrano Capital Partners or any of its affiliates, and the Firm will not be deemed to owe any duty of loyalty, confidentiality, or diligent representation to Veltrano Capital Partners or any of its affiliates by reason of such communications.

5. Coordination with Third Parties

The Firm anticipates coordinating with the following third parties in connection with this engagement, in each case at the Company's direction and subject to the Company's General Counsel's oversight:

Ashford Breckinridge LLP — Nexford's insurance broker of record for both the D&O and product-liability towers.

Address: 321 South Plymouth Court, Suite 1500, Chicago, Illinois 60604

Primary Contacts:

• Phillip Garza, Senior Vice President, Executive Risk Practice

• Tamara Fisk, Account Executive, Manufacturing & Industrial

The Firm will coordinate with Ashford Breckinridge on the document collection process, the review of broker marketing submissions and carrier quotes, and the renewal negotiation process. The Firm will participate in broker-carrier calls and meetings as requested by the Company.

Hollander Byrne & Strauss LLP — Outside litigation counsel for the two pending product-liability matters referenced in Section 1 above.

Address: 70 West Madison Street, Suite 3600, Chicago, Illinois 60602

Primary Contacts:

• Catherine Byrne, Partner

• Rafael Mendez, Senior Associate

The Firm will coordinate with Hollander Byrne & Strauss on claims-related aspects of the tower review, including obtaining information regarding the status and projected exposure of the pending lawsuits. This coordination is intended to inform the Firm's analysis of the product-liability tower and does not alter or expand the scope of either firm's engagement.

Kessler Quinn Advisory Group — Insurance coverage and actuarial consulting firm retained by Veltrano Capital Partners in connection with its portfolio company risk management oversight function.

Address: 55 Farmington Avenue, Suite 700, Hartford, Connecticut 06105

Primary Contacts:

• Arthur Kessler, Managing Director

• Diana Cho, Vice President, Actuarial Services

Communication with Kessler Quinn Advisory Group will be at the direction and with the express consent of the Company's General Counsel. The Firm understands that Kessler Quinn may provide actuarial data, industry benchmarking information, and loss modeling analyses that will be useful in connection with the adequacy of limits analysis. Because Kessler Quinn is retained by Veltrano Capital Partners and not by the Company, the Company acknowledges that communications with Kessler Quinn may not be protected by the attorney-client privilege.

The Firm's communications with the foregoing third parties will be conducted with a view toward preserving applicable privileges to the greatest extent practicable, including the attorney-client privilege and the work product doctrine. However, the Company acknowledges that the sharing of information with non-client third parties may, depending on the circumstances, affect the applicability of the attorney-client privilege or work product protection. The Firm will consult with the Company's General Counsel before disclosing any privileged or work product materials to third parties and will implement appropriate safeguards, such as common interest agreements or joint defense agreements, where advisable and feasible.

6. Conflict Disclosures

The Firm has completed a comprehensive conflicts check as of April 20, 2022, utilizing the Firm's conflicts database and standard conflicts procedures. Based on the results of that check, the Firm confirms the following:

The Firm has identified no current adverse representations against Nexford Industrial Holdings Inc., Veltrano Capital Partners Fund IV, LP, Veltrano Capital Partners, LLC, or any of the incumbent insurance carriers in the D&O or product-liability towers, including Vandermeer National Insurance Company, Commonwealth Indemnity Group, Graystone Mutual Assurance Co., Pinnacle Re Insurance Ltd., Harrington Specialty Insurance Co., Midland Casualty & Surety Company, Great Basin Insurance Company, Cornerstone Reinsurance Corp., and Allegheny Pacific Underwriters, Inc.

The Firm does represent other clients in matters unrelated to this engagement that may involve one or more of the foregoing carriers in other capacities, including, without limitation, as insurers providing coverage to other clients, as counterparties in unrelated transactions, or as parties in unrelated litigation or arbitration proceedings. The Company hereby consents to such unrelated representations, provided that they do not involve claims against or on behalf of Nexford Industrial Holdings Inc. or any of its affiliates. This consent is given on the understanding that the Firm will maintain appropriate ethical screens and information barriers as required by applicable rules of professional conduct to ensure that confidential information obtained in connection with this engagement is not disclosed to or used for the benefit of any other client.

In the event that a conflict of interest arises during the course of this engagement, whether as a result of new client intake, changes in the Firm's client base, or the emergence of adversity between the Company and any entity represented by the Firm, the Firm will promptly notify the Company's General Counsel and will take appropriate steps to address the conflict. Such steps may include, depending on the nature and severity of the conflict, obtaining informed written consent from the affected parties, implementing additional ethical screens or information barriers, or, if the conflict cannot be resolved through consent or screening, withdrawing from the representation in accordance with applicable rules of professional conduct and the terms of the Standing Agreement.

7. Document Requests and Company Cooperation

To facilitate the efficient conduct of the review, the Firm will issue a detailed document request list identifying the specific categories of documents and information required for each work stream. We anticipate transmitting the initial document request on or about April 28, 2022, with the goal of receiving the initial production of documents by no later than May 12, 2022, in order to maintain the project timeline necessary to complete the substantive review in advance of the renewal marketing process.

The Company's primary internal contacts for document production and information requests will be:

• Trevor Haines, Vice President, Risk Management, Nexford Industrial Holdings Inc.

• Donna Kowalski, Director of Insurance and Claims, Nexford Industrial Holdings Inc.

The Company agrees to provide the Firm with prompt access to all documents and information reasonably necessary for the conduct of the review, including but not limited to the following categories:

(a) All current and prior-year insurance policies, binders, certificates of insurance, declarations pages, and endorsements for each layer of the D&O and product-liability towers (covering, at minimum, the three most recent policy years);

(b) Broker marketing submissions, placement memoranda, and related correspondence with carriers for the current and prior policy years;

(d) Claims files and related documentation for all open or recently closed claims under either tower, including the two pending product-liability actions referenced in Section 1 above;

(e) Board of directors and committee minutes relating to insurance matters, risk management, and the approval of insurance programs for the two most recent fiscal years;

(f) Relevant corporate organizational documents, including the Company's certificate of incorporation and bylaws (as currently in effect), the operating agreements or bylaws of each subsidiary, and any indemnification agreements between the Company and its directors and officers;

(g) The Company's most recent annual report, audited financial statements, and any management presentations or board presentations relating to insurance or risk management; and

(h) Any other documents or information specifically identified in the Firm's document request list.

The Company's cooperation in providing documents and information on a timely basis is essential to the Firm's ability to complete the review within the timeframes contemplated by this engagement. The Firm will work with Mr. Haines and Ms. Kowalski to establish reasonable deadlines for the production of documents and will accommodate the Company's operational constraints to the extent practicable.

8. Limitations of Engagement

This engagement is limited to the review and analysis of the D&O and product-liability insurance towers as described in Section 1 above. The Company understands and acknowledges that the scope of this engagement does not encompass any of the following:

(a) The defense or prosecution of any claim, lawsuit, arbitration, or regulatory proceeding, including the two pending product-liability actions referenced in Section 1. As noted above, outside litigation counsel for those matters is Hollander Byrne & Strauss LLP;

(b) The rendering of formal insurance coverage opinions with respect to any specific pending or threatened claim, other than as part of the general tower analysis described herein. If the Company requires a formal coverage opinion regarding any specific claim, such work would need to be the subject of a separate engagement;

(c) Tax advice of any kind, including advice regarding the tax treatment of insurance premiums, self-insured retentions, deductibles, or insurance recoveries;

(d) Advice regarding other insurance programs maintained by the Company that are not specifically identified in this Letter, including but not limited to property insurance, cyber liability insurance, workers' compensation insurance, employment practices liability insurance ("EPLI"), fiduciary liability insurance, crime/fidelity insurance, and environmental liability insurance; and

(e) Advice regarding the Company's self-insurance programs, captive insurance arrangements, or risk retention group participation, if any.

Nothing in this Letter constitutes a guarantee or assurance of any particular outcome in the renewal process, including the availability of coverage, the pricing of premiums, or the willingness of any carrier to offer or renew coverage. Similarly, nothing in this Letter constitutes a guarantee or assurance regarding the adequacy of any insurance program or the availability or enforceability of coverage under any specific policy or layer. The Firm's analysis and recommendations are based on the information available to the Firm at the time of the review and are subject to the inherent limitations and uncertainties of insurance coverage analysis.

9. Term and Termination

This engagement will commence upon execution of this Letter by both parties and will continue through completion of the post-bind policy review following the July 1, 2022 renewal. The Firm anticipates that the substantive work of the engagement will be completed during the period from late April 2022 through approximately August 2022, depending on the timing of the renewal process and the receipt of final issued policy forms from carriers.

Either party may terminate this engagement at any time upon written notice to the other party. In the event of termination by either party, the Company will remain responsible for payment of all professional fees and disbursements incurred through the effective date of termination, as well as any reasonable fees and disbursements incurred in connection with the orderly transition of the engagement, including the transfer of files and work product to successor counsel.

Upon completion of active work on the engagement, the matter may be placed in dormant or inactive status at the Firm's discretion, in accordance with the Firm's standard matter management procedures. The Firm will communicate any applicable reactivation procedures to the Company at the time the matter is placed in dormant status. Placement of the matter in dormant status does not terminate the attorney-client relationship, which will continue until formally terminated in accordance with this Section 9 or the applicable provisions of the Standing Agreement.

10. Governing Law and Dispute Resolution

This Letter, and the Standing Agreement to which it relates, shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict of laws principles.

Any dispute arising out of or relating to this engagement, including disputes regarding the Firm's fees, the scope of the engagement, or the quality of the Firm's services, shall be resolved in accordance with the dispute resolution provisions set forth in the Standing Agreement, which the parties hereby incorporate by reference. To the extent the Standing Agreement does not address a particular dispute resolution matter, the parties agree to engage in good-faith negotiation prior to initiating any formal dispute resolution proceedings.

11. Acceptance and Execution

Please confirm your agreement to the terms and conditions of this engagement by countersigning this Letter where indicated below and returning an executed copy to our office by email (douglas.fairchild@calderwoodharkness.com) or by mail to the address set forth above. A PDF or other electronic copy of the executed Letter will be sufficient for purposes of confirming the engagement, with original signatures to follow by mail.

We look forward to working with you and the Nexford team on this important matter. Should you have any questions regarding the terms of this Letter or any other aspect of the engagement, please do not hesitate to contact me directly at (312) 555-7843 or by email at douglas.fairchild@calderwoodharkness.com.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Fairchild Partner 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606 Telephone: (312) 555-7843

Email: douglas.fairchild@calderwoodharkness.com

Date: April 22, 2022

ACCEPTED AND AGREED:

NEXFORD INDUSTRIAL HOLDINGS INC.

By: ________

Priya Sundaram General Counsel & Corporate Secretary 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173 Telephone: (847) 555-2100

Email: p.sundaram@nexfordindustrial.com

Date: ________

Enclosures: None.

cc:

Angela Fontaine, Partner, Calderwood & Harkness LLP (Billing Partner) Naomi Petersen, Associate, Calderwood & Harkness LLP (Lead Associate) Trevor Haines, Vice President, Risk Management, Nexford Industrial Holdings Inc.

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION This engagement letter and the information contained herein are intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If you are not the intended recipient, please notify the sender immediately and destroy all copies.

Layer	Carrier	Limits	Policy Number
Primary	Vandermeer National Insurance Company	$10,000,000 each claim / $10,000,000 aggregate	VNI-DO-2021-88473
1st Excess	Commonwealth Indemnity Group	$10,000,000 excess of $10,000,000	To be confirmed
2nd Excess	Graystone Mutual Assurance Co.	$10,000,000 excess of $20,000,000	To be confirmed
3rd Excess	Pinnacle Re Insurance Ltd.	$10,000,000 excess of $30,000,000	To be confirmed
Side-A DIC	Harrington Specialty Insurance Co.	$15,000,000 dedicated Side-A	HSI-DIC-2021-00342
Layer	Carrier	Limits	Policy Number
Primary GL/PL	Midland Casualty & Surety Company	$5,000,000 per occurrence / $10,000,000 aggregate	MCS-GL-2021-55671
1st Excess/Umbrella	Great Basin Insurance Company	$25,000,000 excess of $10,000,000	To be confirmed
2nd Excess	Cornerstone Reinsurance Corp.	$25,000,000 excess of $35,000,000	To be confirmed
3rd Excess	Allegheny Pacific Underwriters, Inc.	$15,000,000 excess of $60,000,000	To be confirmed
Attorney	Role	Office	Department	Hourly Rate
Douglas Fairchild	Responsible Partner	Chicago	Insurance & Risk Management	$1,150/hr
Angela Fontaine	Billing Partner	Chicago	Insurance & Risk Management	$1,150/hr
Naomi Petersen	Lead Associate	New York	Corporate / M&A	$825/hr
Yuki Nakamura	Working Associate	Chicago	Litigation (General)	$625/hr

CALDERWOOD & HARKNESS LLP Attorneys at Law
155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606
Telephone: (312) 555-7800 Facsimile: (312) 555-7801 www.calderwoodharkness.com
April 22, 2022
VIA EMAIL AND FIRST-CLASS MAIL
Priya Sundaram, Esq. General Counsel & Corporate Secretary Nexford Industrial Holdings Inc. 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173
Re: Engagement of Calderwood & Harkness LLP — D&O and Product-Liability Insurance Tower Review Matter No. 1005-00003
Dear Ms. Sundaram:
Calderwood & Harkness LLP ("C&H" or the "Firm") is pleased to confirm the terms of our engagement by Nexford Industrial Holdings Inc. ("Nexford" or the "Company") in connection with a comprehensive review of the Company's Directors & Officers liability insurance tower and product-liability insurance tower. We appreciate the Company's confidence in retaining our firm for this important undertaking, and we look forward to partnering with you and your team to ensure that Nexford's insurance programs are optimally structured for the upcoming renewal cycle.
This engagement letter (this "Letter") sets forth the terms and conditions under which the Firm will provide legal services to the Company in connection with the matters described herein.
1. Purpose and Scope of Engagement
This engagement is undertaken in connection with the Company's upcoming 2022–2023 renewal cycle for both the D&O and product-liability insurance towers. The current policy period for both towers runs from July 1, 2021 through July 1, 2022, with the current policies set to expire on July 1, 2022. The renewal effective date is targeted for July 1, 2022, and accordingly, time is of the essence in commencing and completing the substantive phases of the review in advance of the renewal marketing process.
This engagement is opened pursuant to, and governed by, the Standing Outside Counsel Agreement between Calderwood & Harkness LLP and Nexford Industrial Holdings Inc. dated January 15, 2020 (the "Standing Agreement"). Except as specifically modified or supplemented herein, all terms and conditions of the Standing Agreement, including but not limited to provisions regarding confidentiality, data security, document retention, indemnification, insurance, and limitation of liability, remain in full force and effect. In the event of any conflict between the terms of this Letter and the Standing Agreement, the terms of this Letter shall control with respect to the specific subject matter of this engagement.
Scope of Work
The engagement will encompass the following work streams, each of which is described in further detail below:
D&O Tower Review. The Firm will conduct a thorough review and analysis of the Company's five-layer Directors & Officers liability insurance program. The current program consists of a primary layer, three successive excess layers, and a Side-A difference-in-conditions ("DIC") policy, providing an aggregate tower limit of $55 million. The total annual premium for the D&O tower for the 2021–2022 policy year is $1,363,450. Our review will encompass the policy forms, endorsements, applications, and any supplemental underwriting materials associated with each layer. We will evaluate the scope and adequacy of coverage afforded to the Company's directors and officers, including coverage for securities claims, derivative actions, regulatory investigations, and other insured events, as well as entity coverage and securities entity coverage where applicable.
Product-Liability Tower Review. The Firm will conduct a thorough review and analysis of the Company's four-layer product-liability and general liability insurance program. The current program consists of a primary commercial general liability/products-completed operations layer, an excess/umbrella layer, and two additional excess layers, providing an aggregate tower limit of $75 million. The total annual premium for the product-liability tower for the 2021–2022 policy year is $2,642,900. Our review will encompass the policy forms, endorsements, certificates of insurance, and any supplemental underwriting materials associated with each layer. Particular attention will be given to products-completed operations coverage, contractual liability provisions, additional insured endorsements, and the interplay between the general liability and products liability coverages.
Gap Analysis. The Firm will identify and document coverage gaps, inconsistencies in policy wording across layers, and potential areas of exposure within each tower. This analysis will include, without limitation, an examination of whether excess and umbrella policies properly follow form to the underlying policies, whether there are drop-down provisions that are triggered by erosion or exhaustion of underlying limits, and whether there are any gaps in coverage that could leave the Company or its directors and officers uninsured or underinsured for particular categories of claims. The gap analysis will be presented in a comprehensive written report with specific remediation recommendations.
Policy Wording Comparison. The Firm will prepare a clause-by-clause comparison of key provisions across all layers in each tower. This comparison will cover, at a minimum, the following categories of provisions: (i) insuring agreements, (ii) definitions (including the definitions of "claim," "loss," "insured person," "wrongful act," "products," "occurrence," "bodily injury," and "property damage," as applicable), (iii) exclusions, (iv) conditions (including notice provisions, cooperation clauses, subrogation provisions, and allocation provisions), (v) retention and deductible structures, (vi) priority-of-payment provisions, and (vii) endorsements. The comparison will be presented in a matrix format to facilitate identification of inconsistencies and areas of concern.
Adequacy of Limits Analysis. The Firm will assess the adequacy of current aggregate limits in each tower relative to the Company's risk profile, including the nature and scale of the Company's manufacturing operations, the geographic distribution of its products, and the Company's revenue and asset base. This analysis will take into account the Company's claims history over the most recent five-year period, industry benchmarking data (to be obtained in coordination with the Company's insurance broker), and forward-looking considerations, including any potential future capital markets activity such as an initial public offering, secondary offering, or debt issuance that may be under consideration by the Company or its equity sponsor, Veltrano Capital Partners Fund IV, LP.
Coordination Review. The Firm will analyze the coordination between the D&O and product-liability programs, including potential overlap or gaps where claims could implicate both programs simultaneously. This is particularly relevant given the Company's manufacturing operations and the possibility that product-liability claims against the Company could give rise to related securities or derivative claims against directors and officers. The coordination review will also address allocation issues that may arise when a single set of facts triggers coverage under multiple programs.
Renewal Support. The Firm will provide advisory support throughout the renewal process, including review of broker marketing submissions and placement memoranda, analysis of carrier quotes and proposed renewal terms, preparation of negotiation points memoranda identifying key terms to be negotiated with carriers, and ongoing advisory support through the binding of the renewed towers. The Firm will work in close coordination with the Company's insurance broker of record, Ashford Breckinridge LLP, in connection with these activities.
Post-Bind Review. Following the binding of the renewed towers, the Firm will conduct a confirmation review to ensure that the final issued policy forms, endorsements, and binders conform to the negotiated binder terms and that all agreed-upon manuscript changes have been accurately reflected in the issued policies. The Firm will prepare a summary memorandum documenting any discrepancies identified and recommended corrective actions.
Carriers Under Review
The following insurance carriers and policy details are subject to review under this engagement:
D&O Tower (2021–2022 Policy Year):
Product-Liability Tower (2021–2022 Policy Year):
The Firm will request complete copies of all policies, binders, endorsements, and related correspondence for each of the foregoing carriers and layers as part of the initial document request referenced in Section 7 below.
Named Insureds.  The review will address coverage as it pertains to Nexford Industrial Holdings Inc. and its three operating subsidiaries, which are listed as named or additional named insureds under the applicable policies. The named insured entities are as follows:
(a) Nexford Industrial Holdings Inc. — a Delaware corporation; Employer Identification Number 83-2174650; principal office at 2200 Corporate Center Drive, Suite 800, Schaumburg, Illinois 60173.
(b) Nexford Conveyor Systems, LLC — a Delaware limited liability company; Employer Identification Number 83-2174651; principal manufacturing facility located at 4500 Industrial Parkway, Joliet, Illinois 60436.
(c) Triton Fastener Corp. — an Illinois corporation; Employer Identification Number 36-4892103; principal manufacturing facility located at 1010 Whitman Avenue, Rockford, Illinois 61101.
(d) Marlowe Asset Management Precision Machining, Inc. — an Ohio corporation; Employer Identification Number 31-1784529; principal manufacturing facility located at 775 Summit Industrial Boulevard, Akron, Ohio 44311.
The Firm will verify, as part of its review, that all named insured entities are properly scheduled under each layer of each tower and that subsidiary coverage provisions are consistent across layers.
Matters Informing the Review
The review is informed, in part, by two pending product-liability lawsuits involving Nexford subsidiaries, which are relevant both to the claims-related aspects of the tower analysis and to the assessment of policy responsiveness:
(a) Higgins v. Nexford Conveyor Systems, LLC et al., Case No. 2021-L-04382, Circuit Court of Will County, Illinois (filed September 14, 2021). The complaint alleges personal injuries arising from an alleged defect in a conveyor system manufactured and installed by Nexford Conveyor Systems, LLC. Damages sought: approximately $14.5 million. The case is currently in the fact discovery phase.
(b) Consolidated Builders Supply Co. v. Triton Fastener Corp., Case No. 1:21-cv-08914, United States District Court for the Northern District of Illinois (filed November 2, 2021). The complaint alleges property damage and economic losses arising from an alleged defect in industrial fastening products manufactured by Triton Fastener Corp. Damages sought: approximately $6.8 million. The case is currently in the pleadings stage, with a motion to dismiss pending.
Important Note: C&H is not engaged to provide litigation defense in either of these matters, nor is C&H being retained to render formal coverage opinions with respect to either claim. Outside litigation counsel for both matters is Hollander Byrne & Strauss LLP, with Catherine Byrne, Partner, serving as lead counsel. The Firm's review of these matters in the context of this engagement is limited to assessing how the pending claims inform the general tower analysis, including the adequacy of existing limits, the potential for erosion of layers, and any policy terms or conditions that may be implicated by the nature of the pending claims.
2. Staffing
The following attorneys will be assigned to this matter and will comprise the core engagement team:
Douglas Fairchild will serve as the responsible partner and primary point of contact for the engagement. Mr. Fairchild will have overall supervisory responsibility for all aspects of the engagement, including the strategic direction of the tower review, the quality and completeness of all deliverables, and the management of client communications. Mr. Fairchild brings over twenty-five years of experience in insurance coverage and risk management matters, including extensive experience with D&O and product-liability programs for middle-market and large-cap industrial companies. All substantive questions regarding the engagement should be directed to Mr. Fairchild in the first instance.
Angela Fontaine will serve as billing partner for the engagement (Billing Partner Code: AFO-7724). Ms. Fontaine will be responsible for billing administration, including the review and approval of all invoices prior to submission to the Company. In addition, Ms. Fontaine will be involved in substantive review as needed, particularly with respect to complex policy interpretation questions and the adequacy of limits analysis. Ms. Fontaine's involvement will be calibrated to avoid unnecessary duplication of effort with Mr. Fairchild.
Naomi Petersen will serve as lead associate and will be responsible for the day-to-day management of the policy review, gap analysis, and policy wording comparison work streams. Ms. Petersen will prepare all memoranda, reports, and comparison matrices, and will serve as the principal drafter of the negotiation points memoranda for the renewal process. Ms. Petersen will also coordinate directly with the Company's insurance broker and with the Company's internal risk management team on document collection and information gathering.
Yuki Nakamura will provide associate-level support across all work streams, with particular emphasis on claims-related coverage analysis and litigation-interface matters. Mr. Nakamura will review claims files and loss runs, analyze the implications of the two pending product-liability actions for the tower review, and coordinate with Hollander Byrne & Strauss LLP as directed.
Additional attorneys or paraprofessionals may be assigned to the matter as needed to ensure timely completion of work, subject to prior notice to the Company. The Firm will endeavor to provide at least five business days' advance notice before assigning additional personnel. Rates for any additional personnel will be consistent with the rate schedule set forth in Exhibit A to the Standing Agreement, as adjusted in accordance with the annual rate adjustment provisions thereof.
3. Fees and Billing Arrangements
Hourly Rates.  Consistent with the terms of the Standing Agreement, legal services rendered in connection with this engagement will be billed on an hourly basis at the following rates, which reflect the current rate schedule applicable to the Company:
•  Partners: $1,150 per hour
•  Senior Associates (years 5+): $825 per hour
•  Associates (years 1–4): $625 per hour
•  Paraprofessionals / Legal Assistants: As set forth in the Standing Agreement rate schedule
These rates are subject to the annual adjustment provisions set forth in Section 4(b) of the Standing Agreement. Any rate adjustments that take effect during the pendency of this engagement will be applied prospectively only, beginning with the first billing period following the effective date of the adjustment, and will be communicated to the Company's General Counsel in writing not less than thirty (30) days prior to the effective date.
Billing Cycle.  Invoices will be rendered monthly, in arrears, for professional fees incurred during the preceding calendar month. Each invoice will include a detailed narrative description of the services performed, the identity of each timekeeper, the hours expended by each timekeeper, and the applicable hourly rate. Invoices will be submitted in the format specified in the Standing Agreement and in compliance with any applicable billing guidelines provided by the Company.
Payment is due within thirty (30) days of the invoice date. Late payments will be subject to the provisions of the Standing Agreement regarding interest on overdue amounts, if any.
Disbursements.  The Company will be responsible for reimbursement of reasonable out-of-pocket disbursements incurred by the Firm in connection with the engagement. Disbursements will be billed at the Firm's actual cost without markup and may include, without limitation, the following categories of expenses:
•  Travel expenses (airfare, ground transportation, lodging, and meals) incurred in connection with in-person meetings with the Company, its broker, or insurance carriers, in each case in compliance with the Company's travel and expense policy as communicated to the Firm;
•  Document reproduction and printing costs;
•  Electronic research charges (e.g., Westmark Data Systems, Sundial Solutions, and specialty insurance databases);
•  Courier, delivery, and postage fees;
•  Filing fees and recording fees, if applicable; and
•  Any other disbursements specifically approved in advance by the Company's General Counsel or designee.
The Firm will not incur any individual disbursement in excess of $2,500 without prior approval from the Company, except in circumstances where delay would materially prejudice the engagement.
Estimated Fees.  Given the scope of the engagement as described in Section 1 above, we estimate that total professional fees for the engagement will fall within the range of $150,000 to $225,000 through completion of the renewal cycle and post-bind review. This estimate is based on our current understanding of the scope and complexity of the matters to be reviewed and assumes reasonable cooperation by the Company and its third-party advisors in providing requested documents and information in a timely manner. The actual fees incurred may be higher or lower than this estimate depending on a number of factors, including the complexity of carrier negotiations during the renewal process, the number and significance of coverage issues identified in the gap analysis, the extent of manuscript policy wording changes negotiated with carriers, and any changes in the scope of the engagement. This estimate is provided for the Company's budgeting purposes only and does not constitute a cap, fixed fee, or maximum fee arrangement.
The Firm will provide periodic budget updates to the Company's General Counsel and will promptly notify the Company if it becomes apparent that total fees are likely to exceed the upper end of the estimated range.
Matter Administration.  All professional time and disbursements incurred in connection with this engagement will be recorded under Matter No. 1005-00003. The billing partner for the matter is Angela Fontaine (Billing Partner Code: AFO-7724). All billing inquiries should be directed to Ms. Fontaine or to the Firm's billing department at billing@calderwoodharkness.com.
4. Client Identification
For purposes of this engagement, the client is Nexford Industrial Holdings Inc., a Delaware corporation. The Firm's duties of loyalty, confidentiality, and diligent representation run to Nexford Industrial Holdings Inc. as the identified client.
The Firm does not represent, and this engagement does not create an attorney-client relationship with, any of the following:
(a) Any subsidiary of Nexford Industrial Holdings Inc., including Nexford Conveyor Systems, LLC, Triton Fastener Corp., and Marlowe Asset Management Precision Machining, Inc. While the Firm's review will encompass insurance coverage as it pertains to these subsidiaries in their capacity as named or additional named insureds, the Firm's client remains Nexford Industrial Holdings Inc. as the parent entity;
(b) Any director or officer of Nexford Industrial Holdings Inc. or any of its subsidiaries, in their individual capacity;
(c) Veltrano Capital Partners Fund IV, LP, the Company's majority equity sponsor;
(d) Veltrano Capital Partners, LLC, the management company and general partner affiliate of Veltrano Capital Partners Fund IV, LP; or
(e) Any other affiliate, equity holder, limited partner, portfolio company, or related entity of Nexford or Veltrano Capital Partners.
The Firm acknowledges that, in the course of this engagement, it may communicate with representatives of Veltrano Capital Partners, including personnel of Veltrano Capital Partners, LLC and its affiliated entities, regarding matters relevant to the insurance tower review, particularly in connection with the adequacy of limits analysis and any forward-looking capital markets considerations. Such communications will be undertaken at the direction and with the express consent of the Company's General Counsel. However, any such communication does not establish an attorney-client relationship between the Firm and Veltrano Capital Partners or any of its affiliates, and the Firm will not be deemed to owe any duty of loyalty, confidentiality, or diligent representation to Veltrano Capital Partners or any of its affiliates by reason of such communications.
5. Coordination with Third Parties
The Firm anticipates coordinating with the following third parties in connection with this engagement, in each case at the Company's direction and subject to the Company's General Counsel's oversight:
Ashford Breckinridge LLP — Nexford's insurance broker of record for both the D&O and product-liability towers.
Address: 321 South Plymouth Court, Suite 1500, Chicago, Illinois 60604
Primary Contacts:
•  Phillip Garza, Senior Vice President, Executive Risk Practice
•  Tamara Fisk, Account Executive, Manufacturing & Industrial
The Firm will coordinate with Ashford Breckinridge on the document collection process, the review of broker marketing submissions and carrier quotes, and the renewal negotiation process. The Firm will participate in broker-carrier calls and meetings as requested by the Company.
Hollander Byrne & Strauss LLP — Outside litigation counsel for the two pending product-liability matters referenced in Section 1 above.
Address: 70 West Madison Street, Suite 3600, Chicago, Illinois 60602
Primary Contacts:
•  Catherine Byrne, Partner
•  Rafael Mendez, Senior Associate
The Firm will coordinate with Hollander Byrne & Strauss on claims-related aspects of the tower review, including obtaining information regarding the status and projected exposure of the pending lawsuits. This coordination is intended to inform the Firm's analysis of the product-liability tower and does not alter or expand the scope of either firm's engagement.
Kessler Quinn Advisory Group — Insurance coverage and actuarial consulting firm retained by Veltrano Capital Partners in connection with its portfolio company risk management oversight function.
Address: 55 Farmington Avenue, Suite 700, Hartford, Connecticut 06105
Primary Contacts:
•  Arthur Kessler, Managing Director
•  Diana Cho, Vice President, Actuarial Services
Communication with Kessler Quinn Advisory Group will be at the direction and with the express consent of the Company's General Counsel. The Firm understands that Kessler Quinn may provide actuarial data, industry benchmarking information, and loss modeling analyses that will be useful in connection with the adequacy of limits analysis. Because Kessler Quinn is retained by Veltrano Capital Partners and not by the Company, the Company acknowledges that communications with Kessler Quinn may not be protected by the attorney-client privilege.
The Firm's communications with the foregoing third parties will be conducted with a view toward preserving applicable privileges to the greatest extent practicable, including the attorney-client privilege and the work product doctrine. However, the Company acknowledges that the sharing of information with non-client third parties may, depending on the circumstances, affect the applicability of the attorney-client privilege or work product protection. The Firm will consult with the Company's General Counsel before disclosing any privileged or work product materials to third parties and will implement appropriate safeguards, such as common interest agreements or joint defense agreements, where advisable and feasible.
6. Conflict Disclosures
The Firm has completed a comprehensive conflicts check as of April 20, 2022, utilizing the Firm's conflicts database and standard conflicts procedures. Based on the results of that check, the Firm confirms the following:
The Firm has identified no current adverse representations against Nexford Industrial Holdings Inc., Veltrano Capital Partners Fund IV, LP, Veltrano Capital Partners, LLC, or any of the incumbent insurance carriers in the D&O or product-liability towers, including Vandermeer National Insurance Company, Commonwealth Indemnity Group, Graystone Mutual Assurance Co., Pinnacle Re Insurance Ltd., Harrington Specialty Insurance Co., Midland Casualty & Surety Company, Great Basin Insurance Company, Cornerstone Reinsurance Corp., and Allegheny Pacific Underwriters, Inc.
The Firm does represent other clients in matters unrelated to this engagement that may involve one or more of the foregoing carriers in other capacities, including, without limitation, as insurers providing coverage to other clients, as counterparties in unrelated transactions, or as parties in unrelated litigation or arbitration proceedings. The Company hereby consents to such unrelated representations, provided that they do not involve claims against or on behalf of Nexford Industrial Holdings Inc. or any of its affiliates. This consent is given on the understanding that the Firm will maintain appropriate ethical screens and information barriers as required by applicable rules of professional conduct to ensure that confidential information obtained in connection with this engagement is not disclosed to or used for the benefit of any other client.
In the event that a conflict of interest arises during the course of this engagement, whether as a result of new client intake, changes in the Firm's client base, or the emergence of adversity between the Company and any entity represented by the Firm, the Firm will promptly notify the Company's General Counsel and will take appropriate steps to address the conflict. Such steps may include, depending on the nature and severity of the conflict, obtaining informed written consent from the affected parties, implementing additional ethical screens or information barriers, or, if the conflict cannot be resolved through consent or screening, withdrawing from the representation in accordance with applicable rules of professional conduct and the terms of the Standing Agreement.
7. Document Requests and Company Cooperation
To facilitate the efficient conduct of the review, the Firm will issue a detailed document request list identifying the specific categories of documents and information required for each work stream. We anticipate transmitting the initial document request on or about April 28, 2022, with the goal of receiving the initial production of documents by no later than May 12, 2022, in order to maintain the project timeline necessary to complete the substantive review in advance of the renewal marketing process.
The Company's primary internal contacts for document production and information requests will be:
•  Trevor Haines, Vice President, Risk Management, Nexford Industrial Holdings Inc.
•  Donna Kowalski, Director of Insurance and Claims, Nexford Industrial Holdings Inc.
The Company agrees to provide the Firm with prompt access to all documents and information reasonably necessary for the conduct of the review, including but not limited to the following categories:
(a) All current and prior-year insurance policies, binders, certificates of insurance, declarations pages, and endorsements for each layer of the D&O and product-liability towers (covering, at minimum, the three most recent policy years);
(b) Broker marketing submissions, placement memoranda, and related correspondence with carriers for the current and prior policy years;
(c) Loss runs and claims summaries for each layer of each tower, covering the five most recent policy years;
(d) Claims files and related documentation for all open or recently closed claims under either tower, including the two pending product-liability actions referenced in Section 1 above;
(e) Board of directors and committee minutes relating to insurance matters, risk management, and the approval of insurance programs for the two most recent fiscal years;
(f) Relevant corporate organizational documents, including the Company's certificate of incorporation and bylaws (as currently in effect), the operating agreements or bylaws of each subsidiary, and any indemnification agreements between the Company and its directors and officers;
(g) The Company's most recent annual report, audited financial statements, and any management presentations or board presentations relating to insurance or risk management; and
(h) Any other documents or information specifically identified in the Firm's document request list.
The Company's cooperation in providing documents and information on a timely basis is essential to the Firm's ability to complete the review within the timeframes contemplated by this engagement. The Firm will work with Mr. Haines and Ms. Kowalski to establish reasonable deadlines for the production of documents and will accommodate the Company's operational constraints to the extent practicable.
8. Limitations of Engagement
This engagement is limited to the review and analysis of the D&O and product-liability insurance towers as described in Section 1 above. The Company understands and acknowledges that the scope of this engagement does not encompass any of the following:
(a) The defense or prosecution of any claim, lawsuit, arbitration, or regulatory proceeding, including the two pending product-liability actions referenced in Section 1. As noted above, outside litigation counsel for those matters is Hollander Byrne & Strauss LLP;
(b) The rendering of formal insurance coverage opinions with respect to any specific pending or threatened claim, other than as part of the general tower analysis described herein. If the Company requires a formal coverage opinion regarding any specific claim, such work would need to be the subject of a separate engagement;
(c) Tax advice of any kind, including advice regarding the tax treatment of insurance premiums, self-insured retentions, deductibles, or insurance recoveries;
(d) Advice regarding other insurance programs maintained by the Company that are not specifically identified in this Letter, including but not limited to property insurance, cyber liability insurance, workers' compensation insurance, employment practices liability insurance ("EPLI"), fiduciary liability insurance, crime/fidelity insurance, and environmental liability insurance; and
(e) Advice regarding the Company's self-insurance programs, captive insurance arrangements, or risk retention group participation, if any.
Nothing in this Letter constitutes a guarantee or assurance of any particular outcome in the renewal process, including the availability of coverage, the pricing of premiums, or the willingness of any carrier to offer or renew coverage. Similarly, nothing in this Letter constitutes a guarantee or assurance regarding the adequacy of any insurance program or the availability or enforceability of coverage under any specific policy or layer. The Firm's analysis and recommendations are based on the information available to the Firm at the time of the review and are subject to the inherent limitations and uncertainties of insurance coverage analysis.
9. Term and Termination
This engagement will commence upon execution of this Letter by both parties and will continue through completion of the post-bind policy review following the July 1, 2022 renewal. The Firm anticipates that the substantive work of the engagement will be completed during the period from late April 2022 through approximately August 2022, depending on the timing of the renewal process and the receipt of final issued policy forms from carriers.
Either party may terminate this engagement at any time upon written notice to the other party. In the event of termination by either party, the Company will remain responsible for payment of all professional fees and disbursements incurred through the effective date of termination, as well as any reasonable fees and disbursements incurred in connection with the orderly transition of the engagement, including the transfer of files and work product to successor counsel.
Upon completion of active work on the engagement, the matter may be placed in dormant or inactive status at the Firm's discretion, in accordance with the Firm's standard matter management procedures. The Firm will communicate any applicable reactivation procedures to the Company at the time the matter is placed in dormant status. Placement of the matter in dormant status does not terminate the attorney-client relationship, which will continue until formally terminated in accordance with this Section 9 or the applicable provisions of the Standing Agreement.
10. Governing Law and Dispute Resolution
This Letter, and the Standing Agreement to which it relates, shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict of laws principles.
Any dispute arising out of or relating to this engagement, including disputes regarding the Firm's fees, the scope of the engagement, or the quality of the Firm's services, shall be resolved in accordance with the dispute resolution provisions set forth in the Standing Agreement, which the parties hereby incorporate by reference. To the extent the Standing Agreement does not address a particular dispute resolution matter, the parties agree to engage in good-faith negotiation prior to initiating any formal dispute resolution proceedings.
11. Acceptance and Execution
Please confirm your agreement to the terms and conditions of this engagement by countersigning this Letter where indicated below and returning an executed copy to our office by email (douglas.fairchild@calderwoodharkness.com) or by mail to the address set forth above. A PDF or other electronic copy of the executed Letter will be sufficient for purposes of confirming the engagement, with original signatures to follow by mail.
We look forward to working with you and the Nexford team on this important matter. Should you have any questions regarding the terms of this Letter or any other aspect of the engagement, please do not hesitate to contact me directly at (312) 555-7843 or by email at douglas.fairchild@calderwoodharkness.com.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Fairchild Partner 155 North Wacker Drive, Suite 4200 Chicago, Illinois 60606 Telephone: (312) 555-7843
Email: douglas.fairchild@calderwoodharkness.com
Date: April 22, 2022
ACCEPTED AND AGREED:
NEXFORD INDUSTRIAL HOLDINGS INC.
By: ________
Priya Sundaram General Counsel & Corporate Secretary 2200 Corporate Center Drive, Suite 800 Schaumburg, Illinois 60173 Telephone: (847) 555-2100
Email: p.sundaram@nexfordindustrial.com
Date: ________
Enclosures: None.
cc:
Angela Fontaine, Partner, Calderwood & Harkness LLP (Billing Partner) Naomi Petersen, Associate, Calderwood & Harkness LLP (Lead Associate) Trevor Haines, Vice President, Risk Management, Nexford Industrial Holdings Inc.
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION This engagement letter and the information contained herein are intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If you are not the intended recipient, please notify the sender immediately and destroy all copies.
Layer | Carrier | Limits | Policy Number
Primary | Vandermeer National Insurance Company | $10,000,000 each claim / $10,000,000 aggregate | VNI-DO-2021-88473
1st Excess | Commonwealth Indemnity Group | $10,000,000 excess of $10,000,000 | To be confirmed
2nd Excess | Graystone Mutual Assurance Co. | $10,000,000 excess of $20,000,000 | To be confirmed
3rd Excess | Pinnacle Re Insurance Ltd. | $10,000,000 excess of $30,000,000 | To be confirmed
Side-A DIC | Harrington Specialty Insurance Co. | $15,000,000 dedicated Side-A | HSI-DIC-2021-00342
Layer | Carrier | Limits | Policy Number
Primary GL/PL | Midland Casualty & Surety Company | $5,000,000 per occurrence / $10,000,000 aggregate | MCS-GL-2021-55671
1st Excess/Umbrella | Great Basin Insurance Company | $25,000,000 excess of $10,000,000 | To be confirmed
2nd Excess | Cornerstone Reinsurance Corp. | $25,000,000 excess of $35,000,000 | To be confirmed
3rd Excess | Allegheny Pacific Underwriters, Inc. | $15,000,000 excess of $60,000,000 | To be confirmed
Attorney | Role | Office | Department | Hourly Rate
Douglas Fairchild | Responsible Partner | Chicago | Insurance & Risk Management | $1,150/hr
Angela Fontaine | Billing Partner | Chicago | Insurance & Risk Management | $1,150/hr
Naomi Petersen | Lead Associate | New York | Corporate / M&A | $825/hr
Yuki Nakamura | Working Associate | Chicago | Litigation (General) | $625/hr

CALDERWOOD & HARKNESS LLP Attorneys at Law

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CALDERWOOD & HARKNESS LLP

ACCEPTED AND AGREED:

NEXFORD INDUSTRIAL HOLDINGS INC.

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