[sheet: Invoice Detail]

Row #	Invoice Month	Product Category	CPI Invoice Number	Invoice Date	Surcharge Notice Delivery Date	MSA Section 7.4(a) Deadline — 15 Business Days After Month-End	Notice Timely?	Business Days Late	Surcharge Amount Invoiced — HRC ($)	Surcharge Amount Invoiced — CRC ($)	Total Surcharge Invoiced ($)	Applicable Base Price — HRC ($/ton)	Applicable Base Price — CRC ($/ton)	Estimated Tonnage — HRC (tons)	Estimated Tonnage — CRC (tons)	Surcharge as % of Base (HRC)	Surcharge as % of Base (CRC)	Exceeds 12% Cap — HRC?	Exceeds 12% Cap — CRC?	Written Consent Obtained for Cap Exceedance?	CPI Used Exhibit C Published Index Methodology?	CPI Used Internal Blended Cost Metric?	Amount Paid by Nexford ($)	Claimed Unpaid Balance ($)	Disputed?	Defense Category — Late Notice	Defense Category — Methodology Deviation	Defense Category — Cap Excess	Amount Attributable to Late Notice Defense ($)	Amount Attributable to Methodology Deviation Defense ($)	Amount Attributable to Cap Excess Defense ($)	Notes / Comments
1	Mar-2021	Both	CPI-SC-2021-03	2021-04-08	2021-04-28	2021-04-21	No	5	245000	98000	343000	620	740	1500	542	26.3%	24.4%	Yes	Yes	No	No	Yes	80000	263000	Yes	Yes	Yes	Yes	263000	85000	38000	Surcharge Notice delivered 5 business days late; CPI used internal blended cost metric rather than published Ferrous Scrap Index per Exhibit C; both HRC and CRC exceeded 12% cap without written consent
2	Apr-2021	Both	CPI-SC-2021-04	2021-05-07	2021-05-19	2021-05-21	Yes	0	215000	82000	297000	620	740	1500	542	23.1%	20.4%	No	No	N/A	Yes	No	297000	0	No	No	No	No	0	0	0	Paid in full — not in dispute. Only month during the period where CPI complied with all MSA Section 7.4 requirements and Nexford made full payment.
3	May-2021	Both	CPI-SC-2021-05	2021-06-09	2021-06-22	2021-06-21	No	1	280000	110000	390000	620	740	1500	542	30.1%	27.4%	Yes	Yes	No	No	Yes	95000	295000	Yes	Yes	Yes	Yes	295000	102000	38000	Late notice (1 business day); methodology deviation (blended cost); HRC and CRC surcharge exceeded 12% cap without written consent
4	Jun-2021	Both	CPI-SC-2021-06	2021-07-12	2021-07-20	2021-07-21	Yes	0	310000	125000	435000	620	740	1500	542	33.3%	31.2%	No	No	N/A	No	Yes	120000	315000	Yes	No	Yes	No	0	315000	0	Notice timely but CPI used internal blended cost metric; surcharges within cap when properly calculated per CPI's methodology but methodology itself is disputed
5	Jul-2021	Both	CPI-SC-2021-07	2021-08-10	2021-08-24	2021-08-20	No	2	335000	132000	467000	620	740	1500	542	36.0%	32.9%	Yes	Yes	No	No	Yes	115000	352000	Yes	Yes	Yes	Yes	352000	120000	55000	Late notice (2 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
6	Aug-2021	Both	CPI-SC-2021-08	2021-09-08	2021-09-17	2021-09-21	Yes	0	290000	108000	398000	620	740	1500	542	31.2%	26.9%	No	No	N/A	No	Yes	105000	293000	Yes	No	Yes	No	0	293000	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
7	Sep-2021	Both	CPI-SC-2021-09	2021-10-11	2021-10-25	2021-10-21	No	2	350000	140000	490000	620	740	1500	542	37.6%	34.9%	Yes	Yes	No	No	Yes	130000	360000	Yes	Yes	Yes	Yes	360000	105000	62000	Late notice (2 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
8	Oct-2021	Both	CPI-SC-2021-10	2021-11-09	2021-11-18	2021-11-19	Yes	0	320000	118000	438000	620	740	1500	542	34.4%	29.4%	No	No	N/A	No	Yes	110000	328000	Yes	No	Yes	No	0	110000	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
9	Nov-2021	Both	CPI-SC-2021-11	2021-12-10	2021-12-24	2021-12-21	No	3	305000	115000	420000	620	740	1500	542	32.8%	28.7%	No	No	N/A	No	Yes	100000	320000	Yes	Yes	Yes	No	320000	100000	0	Late notice (3 business days); methodology deviation (blended cost); surcharges within 12% cap when properly calculated
10	Dec-2021	Both	CPI-SC-2021-12	2022-01-10	2022-01-19	2022-01-21	Yes	0	275000	105000	380000	620	740	1500	542	29.6%	26.2%	No	No	N/A	No	Yes	95000	285000	Yes	No	Yes	No	0	85000	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
11	Jan-2022	Both	CPI-SC-2022-01	2022-02-09	2022-02-17	2022-02-18	Yes	0	260000	95000	355000	620	740	1500	542	28.0%	23.7%	No	No	N/A	No	Yes	90000	265000	Yes	No	Yes	No	0	65000	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
12	Feb-2022	Both	CPI-SC-2022-02	2022-03-11	2022-03-25	2022-03-21	No	4	340000	138000	478000	620	740	1500	542	36.6%	34.4%	Yes	Yes	No	No	Yes	125000	353000	Yes	Yes	Yes	Yes	353000	90000	68000	Late notice (4 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
13	Mar-2022	Both	CPI-SC-2022-03	2022-04-08	2022-04-20	2022-04-21	Yes	0	295000	112000	407000	620	740	1500	542	31.7%	27.9%	No	No	N/A	No	Yes	98000	309000	Yes	No	Yes	No	0	100000	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
14	Apr-2022	Both	CPI-SC-2022-04	2022-05-09	2022-05-18	2022-05-20	Yes	0	255000	97000	352000	620	740	1500	542	27.4%	24.2%	No	No	N/A	No	Yes	85000	267000	Yes	No	Yes	No	0	0	0	Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
15	May-2022	Both	CPI-SC-2022-05	2022-06-10	2022-06-27	2022-06-21	No	4	325000	135000	460000	620	740	1500	542	35.0%	33.7%	Yes	Yes	No	No	Yes	135000	325000	Yes	Yes	Yes	Yes	237000	0	819000	Late notice (4 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
TOTAL	Mar-2021 through May-2022	4400000	2010000	6410000	1680000	4730000	14 of 15 disputed	7 months	14 months	4 months (w/o consent)	2180000	1470000	1080000	Totals across all 15 months. April 2021 paid in full ($297,000). 14 months disputed with $4,730,000 claimed unpaid balance.

[sheet: Defense Summary]

Defense Category	MSA Provision	Number of Months Affected	Months Affected	Total Amount Attributable ($)	Description
Late Surcharge Notices	Section 7.4(a) — 15 business day deadline	7	Mar-2021, May-2021, Jul-2021, Sep-2021, Nov-2021, Feb-2022, May-2022	2180000	Cardinal Peak failed to deliver compliant Surcharge Notices within 15 business days after the end of the applicable month for 7 of the 14 disputed months. Under MSA Section 7.4(a), timely delivery is a condition precedent to the right to collect surcharges. These late notices account for $2.18M of the claimed $4.73M.
Methodology Deviation (Blended Cost vs. Published Indices)	Section 7.4(b) / Exhibit C — Surcharge Methodology	14	All 14 disputed months (Mar-2021, May-2021 through May-2022, excl. Apr-2021)	1470000	Cardinal Peak calculated surcharges using an internal 'blended cost' metric rather than the contractually mandated published Ferrous Scrap Index (Platts/SPI) and Industrial Energy Cost Index as prescribed by Exhibit C. The baseline scrap cost per Exhibit C is $340/ton and baseline energy cost is $48/ton. Deviation from published indices resulted in overstatement of $1.47M.
Surcharge Cap Exceedance Without Consent	Section 7.4(c) — 12% monthly cap	4	May-2021, Jul-2021, Sep-2021, Feb-2022 (also Mar-2021 and May-2022 overlap with late notice)	1080000	For 4 months during the disputed period, Cardinal Peak's surcharges exceeded the 12% cap on the applicable Base Price (HRC: $620/ton; CRC: $740/ton) without obtaining Nexford's prior written consent as required by Section 7.4(c). The excess above the permitted cap totals $1.08M.

--- RECONCILIATION ---

Total CPI Surcharges Invoiced (All 15 Months)	Mar-2021 through May-2022	6410000	Total of all 15 monthly surcharge invoices issued by Cardinal Peak Industries
Total Amount Nexford Paid	1680000	Includes full payment for April 2021 ($297,000) plus partial payments on 14 disputed months ($1,383,000)
CPI Claimed Unpaid Balance (Principal)	4730000	$6,410,000 − $1,680,000 = $4,730,000
CPI Prejudgment Interest Claim (Dr. Voss / Pinnacle Economics Group)	380000	Per Dr. Theodore Voss expert report, calculated through projected trial date
CPI Total Claimed Damages (Principal + Interest)	5110000	$4,730,000 + $380,000 = $5,110,000
Sum of Nexford Defense Categories (with overlaps)	4730000	$2,180,000 + $1,470,000 + $1,080,000 = $4,730,000 (categories overlap; not additive)
Nexford Maximum Additional Obligation (After All Defenses Applied)	210000	After accounting for overlapping defense categories, Nexford's position is that it owes at most an additional $210,000 beyond the $1,680,000 already paid
Settlement Amount	1890000	~40% of $4,730,000 ($4,730,000 × 39.97% ≈ $1,890,000)
Gross Settlement Savings	2840000	$4,730,000 − $1,890,000 = $2,840,000
Total C&H Legal Fees Billed	243670	Calderwood & Harkness LLP legal fees through matter close
Total Costs Advanced	28415	Mediator fees $12,500 + Expert fees $11,200 + Court reporter fees $3,150 + Filing/service fees $1,565
Total Engagement Cost	272085	$243,670 + $28,415 = $272,085
Net Settlement Savings (After Legal Costs)	2567915	$2,840,000 − $272,085 = $2,567,915 (≈$2.568M)

[sheet: Settlement Payment Schedule]

Installment	Percentage of Settlement	Amount ($)	Due Date	Payee	Payor	Status	Notes
Installment 1 (60%)	60%	1134000	2023-09-17	Cardinal Peak Industries	Nexford Industrial Holdings Inc.	Pending	Due within 30 days of execution of Settlement Agreement (executed August 18, 2023). Lender notice to Ridgecrest National Bank required under Credit Agreement Section 6.03(b) for settlements exceeding $1.0M threshold — notice sent August 21, 2023.
Installment 2 (40%)	40%	756000	2023-11-16	Cardinal Peak Industries	Nexford Industrial Holdings Inc.	Pending	Due within 90 days of execution of Settlement Agreement (executed August 18, 2023).
TOTAL	100%	1890000	Settlement as percentage of CPI's claimed amount: $1,890,000 / $4,730,000 = 39.97% ≈ 40%

[sheet: MSA Pricing Reference]

Parameter	HRC Value	CRC Value	MSA Reference	Notes
Base Price (2020, $/ton)	$620	$740	MSA Section 7.2	Subject to quarterly adjustment per Section 7.2
Estimated Annual Volume (tons)	18,000	6,500	MSA Section 3.1	Total estimated ~24,500 tons/year
Estimated Monthly Volume (tons)	1,500	542	MSA Section 3.1	Approximate monthly allocation: HRC 18,000/12 = 1,500; CRC 6,500/12 ≈ 542
Estimated Annual Spend ($)	$11,160,000	$4,810,000	MSA Section 7.2	HRC: 18,000 × $620; CRC: 6,500 × $740; Total: $15,970,000/yr
Baseline Scrap Cost (Exhibit C, $/ton)	$340	$340	Exhibit C — Surcharge Methodology	Per Ferrous Scrap Index (Platts/SPI); basis for surcharge trigger calculation
Baseline Energy Cost (Exhibit C, $/ton)	$48	$48	Exhibit C — Surcharge Methodology	Per Industrial Energy Cost Index; basis for energy surcharge trigger calculation
Monthly Surcharge Cap	12% of Base Price ($74.40/ton)	12% of Base Price ($88.80/ton)	MSA Section 7.4(c)	Max $74.40/ton HRC ($620 × 12%); Max $88.80/ton CRC ($740 × 12%) without prior written consent of Buyer
Surcharge Notice Deadline	15 business days after month-end	15 business days after month-end	MSA Section 7.4(a)	Condition precedent to Seller's right to collect surcharges
Dispute Notice Period	30 calendar days after receipt of Surcharge Notice	30 calendar days after receipt of Surcharge Notice	MSA Section 7.4(d)	Buyer must notify Seller of disputed surcharge within 30 days
Payment Terms	Net 45 days from invoice date	Net 45 days from invoice date	MSA Section 7.5	Standard payment terms applicable to surcharge invoices and base price invoices

[sheet: Matter Information]

Field	Value
Matter Name	Cardinal Peak Industries v. Nexford Industrial Holdings Inc.
Court	Circuit Court of Cook County, Illinois, County Department, Law Division
Case Number	2022-L-008471
C&H Matter Number	1005-00005
MSA Reference Number	MSA-NIH-CPI-2020-001
MSA Execution Date	January 15, 2020
MSA Term	3 years (January 15, 2020 – January 14, 2023), with auto-renewal
Governing Law	Illinois
Disputed Surcharge Period	March 2021 through May 2022 (15 months; 14 months in dispute; April 2021 paid in full)
Client (Defendant)	Nexford Industrial Holdings Inc., 4200 West Lakeshore Industrial Parkway, Suite 300, Waukegan, IL 60085
Client EIN	36-4821097
Client DE Charter Number	7284159
Client CEO	Martin Schaeffer
Client CFO	Lydia Tran
Client VP, Procurement	Russell Okonkwo
Client General Counsel	Deborah Whitfield
Client PE Sponsor	Marlowe Asset Management Bluff Capital Partners, LP (Managing Partner: Conrad Yeung; Board Observer: Diana Calloway)
Plaintiff	Cardinal Peak Industries, 1580 Ridgeline Boulevard, Pueblo, CO 81001
Plaintiff EIN	84-3295618
Plaintiff CEO	Frank Delacroix
Plaintiff VP, Sales & Commercial	Natalie Gunderson
Plaintiff Controller	Harold Briggs
Plaintiff General Counsel	Patricia Morrow
Plaintiff's Counsel	Blackwood Stein & Associates LLP (Lead Partner: Garrett Blackwood; Associate: Megan Hsu), 717 Seventeenth Street, Suite 2200, Denver, CO 80202

Defense Counsel	Calderwood & Harkness LLP, 200 South Wacker Drive, Suite 4400, Chicago, IL 60606
C&H Responsible Partner	Priya Anand
C&H Billing Partner	Douglas Carmichael
C&H Lead Associate	Simone Laroche
C&H Working Associate	Jeffrey Park
Nexford Damages Expert	Dr. Anita Rosenthal, CPA, ABV — Meridian Bridge Consulting LLC, 311 South Michigan Avenue, Suite 1500, Chicago, IL 60604
CPI Damages Expert	Dr. Theodore Voss — Pinnacle Economics Group LLC, 1900 Sixteenth Street, Suite 400, Denver, CO 80202
Nexford External Auditor	Hargrove Kellner CPAs LLP (Engagement Partner: Steven Margolis), 500 West Monroe Street, Suite 3100, Chicago, IL 60661
Nexford Lender	Ridgecrest National Bank, N.A. (Relationship Manager: Karen Whitmore), 120 North LaSalle Street, Chicago, IL 60602
Ridgecrest Credit Facility	$45 million revolving credit facility dated March 12, 2021; Section 6.03(b) requires notice of settlements exceeding $1.0M
Mediator	Hon. Catherine Lindström (Ret.), Great Lakes Dispute Resolution Center, 150 North Riverside Plaza, Suite 2700, Chicago, IL 60606
Mediation Date	August 2, 2023
Settlement Agreement Execution Date	August 18, 2023
Settlement Amount	$1,890,000 (~40% of $4,730,000 claimed)
MSA Termination Date	August 31, 2023 (mutual termination; order transition through October 31, 2023)
Stipulation of Dismissal Filed	September 14, 2023
Matter Closed	September 15, 2023
Workbook Prepared By	Jeffrey Park and Simone Laroche, Calderwood & Harkness LLP
Workbook Purpose	Analysis of 14 disputed surcharge invoices issued by Cardinal Peak Industries to Nexford Industrial Holdings Inc. during the period March 2021 through May 2022, supporting Nexford's defense in Case No. 2022-L-008471
Nexford Annual Revenue (FY 2022)	~$287 million
Cardinal Peak Annual Revenue (FY 2022)	~$415 million

[sheet: Invoice Detail]
Row # | Invoice Month | Product Category | CPI Invoice Number | Invoice Date | Surcharge Notice Delivery Date | MSA Section 7.4(a) Deadline — 15 Business Days After Month-End | Notice Timely? | Business Days Late | Surcharge Amount Invoiced — HRC ($) | Surcharge Amount Invoiced — CRC ($) | Total Surcharge Invoiced ($) | Applicable Base Price — HRC ($/ton) | Applicable Base Price — CRC ($/ton) | Estimated Tonnage — HRC (tons) | Estimated Tonnage — CRC (tons) | Surcharge as % of Base (HRC) | Surcharge as % of Base (CRC) | Exceeds 12% Cap — HRC? | Exceeds 12% Cap — CRC? | Written Consent Obtained for Cap Exceedance? | CPI Used Exhibit C Published Index Methodology? | CPI Used Internal Blended Cost Metric? | Amount Paid by Nexford ($) | Claimed Unpaid Balance ($) | Disputed? | Defense Category — Late Notice | Defense Category — Methodology Deviation | Defense Category — Cap Excess | Amount Attributable to Late Notice Defense ($) | Amount Attributable to Methodology Deviation Defense ($) | Amount Attributable to Cap Excess Defense ($) | Notes / Comments
1 | Mar-2021 | Both | CPI-SC-2021-03 | 2021-04-08 | 2021-04-28 | 2021-04-21 | No | 5 | 245000 | 98000 | 343000 | 620 | 740 | 1500 | 542 | 26.3% | 24.4% | Yes | Yes | No | No | Yes | 80000 | 263000 | Yes | Yes | Yes | Yes | 263000 | 85000 | 38000 | Surcharge Notice delivered 5 business days late; CPI used internal blended cost metric rather than published Ferrous Scrap Index per Exhibit C; both HRC and CRC exceeded 12% cap without written consent
2 | Apr-2021 | Both | CPI-SC-2021-04 | 2021-05-07 | 2021-05-19 | 2021-05-21 | Yes | 0 | 215000 | 82000 | 297000 | 620 | 740 | 1500 | 542 | 23.1% | 20.4% | No | No | N/A | Yes | No | 297000 | 0 | No | No | No | No | 0 | 0 | 0 | Paid in full — not in dispute. Only month during the period where CPI complied with all MSA Section 7.4 requirements and Nexford made full payment.
3 | May-2021 | Both | CPI-SC-2021-05 | 2021-06-09 | 2021-06-22 | 2021-06-21 | No | 1 | 280000 | 110000 | 390000 | 620 | 740 | 1500 | 542 | 30.1% | 27.4% | Yes | Yes | No | No | Yes | 95000 | 295000 | Yes | Yes | Yes | Yes | 295000 | 102000 | 38000 | Late notice (1 business day); methodology deviation (blended cost); HRC and CRC surcharge exceeded 12% cap without written consent
4 | Jun-2021 | Both | CPI-SC-2021-06 | 2021-07-12 | 2021-07-20 | 2021-07-21 | Yes | 0 | 310000 | 125000 | 435000 | 620 | 740 | 1500 | 542 | 33.3% | 31.2% | No | No | N/A | No | Yes | 120000 | 315000 | Yes | No | Yes | No | 0 | 315000 | 0 | Notice timely but CPI used internal blended cost metric; surcharges within cap when properly calculated per CPI's methodology but methodology itself is disputed
5 | Jul-2021 | Both | CPI-SC-2021-07 | 2021-08-10 | 2021-08-24 | 2021-08-20 | No | 2 | 335000 | 132000 | 467000 | 620 | 740 | 1500 | 542 | 36.0% | 32.9% | Yes | Yes | No | No | Yes | 115000 | 352000 | Yes | Yes | Yes | Yes | 352000 | 120000 | 55000 | Late notice (2 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
6 | Aug-2021 | Both | CPI-SC-2021-08 | 2021-09-08 | 2021-09-17 | 2021-09-21 | Yes | 0 | 290000 | 108000 | 398000 | 620 | 740 | 1500 | 542 | 31.2% | 26.9% | No | No | N/A | No | Yes | 105000 | 293000 | Yes | No | Yes | No | 0 | 293000 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
7 | Sep-2021 | Both | CPI-SC-2021-09 | 2021-10-11 | 2021-10-25 | 2021-10-21 | No | 2 | 350000 | 140000 | 490000 | 620 | 740 | 1500 | 542 | 37.6% | 34.9% | Yes | Yes | No | No | Yes | 130000 | 360000 | Yes | Yes | Yes | Yes | 360000 | 105000 | 62000 | Late notice (2 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
8 | Oct-2021 | Both | CPI-SC-2021-10 | 2021-11-09 | 2021-11-18 | 2021-11-19 | Yes | 0 | 320000 | 118000 | 438000 | 620 | 740 | 1500 | 542 | 34.4% | 29.4% | No | No | N/A | No | Yes | 110000 | 328000 | Yes | No | Yes | No | 0 | 110000 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
9 | Nov-2021 | Both | CPI-SC-2021-11 | 2021-12-10 | 2021-12-24 | 2021-12-21 | No | 3 | 305000 | 115000 | 420000 | 620 | 740 | 1500 | 542 | 32.8% | 28.7% | No | No | N/A | No | Yes | 100000 | 320000 | Yes | Yes | Yes | No | 320000 | 100000 | 0 | Late notice (3 business days); methodology deviation (blended cost); surcharges within 12% cap when properly calculated
10 | Dec-2021 | Both | CPI-SC-2021-12 | 2022-01-10 | 2022-01-19 | 2022-01-21 | Yes | 0 | 275000 | 105000 | 380000 | 620 | 740 | 1500 | 542 | 29.6% | 26.2% | No | No | N/A | No | Yes | 95000 | 285000 | Yes | No | Yes | No | 0 | 85000 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
11 | Jan-2022 | Both | CPI-SC-2022-01 | 2022-02-09 | 2022-02-17 | 2022-02-18 | Yes | 0 | 260000 | 95000 | 355000 | 620 | 740 | 1500 | 542 | 28.0% | 23.7% | No | No | N/A | No | Yes | 90000 | 265000 | Yes | No | Yes | No | 0 | 65000 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
12 | Feb-2022 | Both | CPI-SC-2022-02 | 2022-03-11 | 2022-03-25 | 2022-03-21 | No | 4 | 340000 | 138000 | 478000 | 620 | 740 | 1500 | 542 | 36.6% | 34.4% | Yes | Yes | No | No | Yes | 125000 | 353000 | Yes | Yes | Yes | Yes | 353000 | 90000 | 68000 | Late notice (4 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
13 | Mar-2022 | Both | CPI-SC-2022-03 | 2022-04-08 | 2022-04-20 | 2022-04-21 | Yes | 0 | 295000 | 112000 | 407000 | 620 | 740 | 1500 | 542 | 31.7% | 27.9% | No | No | N/A | No | Yes | 98000 | 309000 | Yes | No | Yes | No | 0 | 100000 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
14 | Apr-2022 | Both | CPI-SC-2022-04 | 2022-05-09 | 2022-05-18 | 2022-05-20 | Yes | 0 | 255000 | 97000 | 352000 | 620 | 740 | 1500 | 542 | 27.4% | 24.2% | No | No | N/A | No | Yes | 85000 | 267000 | Yes | No | Yes | No | 0 | 0 | 0 | Notice timely; methodology deviation (blended cost metric used); surcharges within cap per CPI methodology
15 | May-2022 | Both | CPI-SC-2022-05 | 2022-06-10 | 2022-06-27 | 2022-06-21 | No | 4 | 325000 | 135000 | 460000 | 620 | 740 | 1500 | 542 | 35.0% | 33.7% | Yes | Yes | No | No | Yes | 135000 | 325000 | Yes | Yes | Yes | Yes | 237000 | 0 | 819000 | Late notice (4 business days); methodology deviation (blended cost); exceeded 12% cap on both HRC and CRC without written consent
TOTAL | Mar-2021 through May-2022 | 4400000 | 2010000 | 6410000 | 1680000 | 4730000 | 14 of 15 disputed | 7 months | 14 months | 4 months (w/o consent) | 2180000 | 1470000 | 1080000 | Totals across all 15 months. April 2021 paid in full ($297,000). 14 months disputed with $4,730,000 claimed unpaid balance.
[sheet: Defense Summary]
Defense Category | MSA Provision | Number of Months Affected | Months Affected | Total Amount Attributable ($) | Description
Late Surcharge Notices | Section 7.4(a) — 15 business day deadline | 7 | Mar-2021, May-2021, Jul-2021, Sep-2021, Nov-2021, Feb-2022, May-2022 | 2180000 | Cardinal Peak failed to deliver compliant Surcharge Notices within 15 business days after the end of the applicable month for 7 of the 14 disputed months. Under MSA Section 7.4(a), timely delivery is a condition precedent to the right to collect surcharges. These late notices account for $2.18M of the claimed $4.73M.
Methodology Deviation (Blended Cost vs. Published Indices) | Section 7.4(b) / Exhibit C — Surcharge Methodology | 14 | All 14 disputed months (Mar-2021, May-2021 through May-2022, excl. Apr-2021) | 1470000 | Cardinal Peak calculated surcharges using an internal 'blended cost' metric rather than the contractually mandated published Ferrous Scrap Index (Platts/SPI) and Industrial Energy Cost Index as prescribed by Exhibit C. The baseline scrap cost per Exhibit C is $340/ton and baseline energy cost is $48/ton. Deviation from published indices resulted in overstatement of $1.47M.
Surcharge Cap Exceedance Without Consent | Section 7.4(c) — 12% monthly cap | 4 | May-2021, Jul-2021, Sep-2021, Feb-2022 (also Mar-2021 and May-2022 overlap with late notice) | 1080000 | For 4 months during the disputed period, Cardinal Peak's surcharges exceeded the 12% cap on the applicable Base Price (HRC: $620/ton; CRC: $740/ton) without obtaining Nexford's prior written consent as required by Section 7.4(c). The excess above the permitted cap totals $1.08M.
--- RECONCILIATION ---
Total CPI Surcharges Invoiced (All 15 Months) | Mar-2021 through May-2022 | 6410000 | Total of all 15 monthly surcharge invoices issued by Cardinal Peak Industries
Total Amount Nexford Paid | 1680000 | Includes full payment for April 2021 ($297,000) plus partial payments on 14 disputed months ($1,383,000)
CPI Claimed Unpaid Balance (Principal) | 4730000 | $6,410,000 − $1,680,000 = $4,730,000
CPI Prejudgment Interest Claim (Dr. Voss / Pinnacle Economics Group) | 380000 | Per Dr. Theodore Voss expert report, calculated through projected trial date
CPI Total Claimed Damages (Principal + Interest) | 5110000 | $4,730,000 + $380,000 = $5,110,000
Sum of Nexford Defense Categories (with overlaps) | 4730000 | $2,180,000 + $1,470,000 + $1,080,000 = $4,730,000 (categories overlap; not additive)
Nexford Maximum Additional Obligation (After All Defenses Applied) | 210000 | After accounting for overlapping defense categories, Nexford's position is that it owes at most an additional $210,000 beyond the $1,680,000 already paid
Settlement Amount | 1890000 | ~40% of $4,730,000 ($4,730,000 × 39.97% ≈ $1,890,000)
Gross Settlement Savings | 2840000 | $4,730,000 − $1,890,000 = $2,840,000
Total C&H Legal Fees Billed | 243670 | Calderwood & Harkness LLP legal fees through matter close
Total Costs Advanced | 28415 | Mediator fees $12,500 + Expert fees $11,200 + Court reporter fees $3,150 + Filing/service fees $1,565
Total Engagement Cost | 272085 | $243,670 + $28,415 = $272,085
Net Settlement Savings (After Legal Costs) | 2567915 | $2,840,000 − $272,085 = $2,567,915 (≈$2.568M)
[sheet: Settlement Payment Schedule]
Installment | Percentage of Settlement | Amount ($) | Due Date | Payee | Payor | Status | Notes
Installment 1 (60%) | 60% | 1134000 | 2023-09-17 | Cardinal Peak Industries | Nexford Industrial Holdings Inc. | Pending | Due within 30 days of execution of Settlement Agreement (executed August 18, 2023). Lender notice to Ridgecrest National Bank required under Credit Agreement Section 6.03(b) for settlements exceeding $1.0M threshold — notice sent August 21, 2023.
Installment 2 (40%) | 40% | 756000 | 2023-11-16 | Cardinal Peak Industries | Nexford Industrial Holdings Inc. | Pending | Due within 90 days of execution of Settlement Agreement (executed August 18, 2023).
TOTAL | 100% | 1890000 | Settlement as percentage of CPI's claimed amount: $1,890,000 / $4,730,000 = 39.97% ≈ 40%
[sheet: MSA Pricing Reference]
Parameter | HRC Value | CRC Value | MSA Reference | Notes
Base Price (2020, $/ton) | $620 | $740 | MSA Section 7.2 | Subject to quarterly adjustment per Section 7.2
Estimated Annual Volume (tons) | 18,000 | 6,500 | MSA Section 3.1 | Total estimated ~24,500 tons/year
Estimated Monthly Volume (tons) | 1,500 | 542 | MSA Section 3.1 | Approximate monthly allocation: HRC 18,000/12 = 1,500; CRC 6,500/12 ≈ 542
Estimated Annual Spend ($) | $11,160,000 | $4,810,000 | MSA Section 7.2 | HRC: 18,000 × $620; CRC: 6,500 × $740; Total: $15,970,000/yr
Baseline Scrap Cost (Exhibit C, $/ton) | $340 | $340 | Exhibit C — Surcharge Methodology | Per Ferrous Scrap Index (Platts/SPI); basis for surcharge trigger calculation
Baseline Energy Cost (Exhibit C, $/ton) | $48 | $48 | Exhibit C — Surcharge Methodology | Per Industrial Energy Cost Index; basis for energy surcharge trigger calculation
Monthly Surcharge Cap | 12% of Base Price ($74.40/ton) | 12% of Base Price ($88.80/ton) | MSA Section 7.4(c) | Max $74.40/ton HRC ($620 × 12%); Max $88.80/ton CRC ($740 × 12%) without prior written consent of Buyer
Surcharge Notice Deadline | 15 business days after month-end | 15 business days after month-end | MSA Section 7.4(a) | Condition precedent to Seller's right to collect surcharges
Dispute Notice Period | 30 calendar days after receipt of Surcharge Notice | 30 calendar days after receipt of Surcharge Notice | MSA Section 7.4(d) | Buyer must notify Seller of disputed surcharge within 30 days
Payment Terms | Net 45 days from invoice date | Net 45 days from invoice date | MSA Section 7.5 | Standard payment terms applicable to surcharge invoices and base price invoices
[sheet: Matter Information]
Field | Value
Matter Name | Cardinal Peak Industries v. Nexford Industrial Holdings Inc.
Court | Circuit Court of Cook County, Illinois, County Department, Law Division
Case Number | 2022-L-008471
C&H Matter Number | 1005-00005
MSA Reference Number | MSA-NIH-CPI-2020-001
MSA Execution Date | January 15, 2020
MSA Term | 3 years (January 15, 2020 – January 14, 2023), with auto-renewal
Governing Law | Illinois
Disputed Surcharge Period | March 2021 through May 2022 (15 months; 14 months in dispute; April 2021 paid in full)
Client (Defendant) | Nexford Industrial Holdings Inc., 4200 West Lakeshore Industrial Parkway, Suite 300, Waukegan, IL 60085
Client EIN | 36-4821097
Client DE Charter Number | 7284159
Client CEO | Martin Schaeffer
Client CFO | Lydia Tran
Client VP, Procurement | Russell Okonkwo
Client General Counsel | Deborah Whitfield
Client PE Sponsor | Marlowe Asset Management Bluff Capital Partners, LP (Managing Partner: Conrad Yeung; Board Observer: Diana Calloway)
Plaintiff | Cardinal Peak Industries, 1580 Ridgeline Boulevard, Pueblo, CO 81001
Plaintiff EIN | 84-3295618
Plaintiff CEO | Frank Delacroix
Plaintiff VP, Sales & Commercial | Natalie Gunderson
Plaintiff Controller | Harold Briggs
Plaintiff General Counsel | Patricia Morrow
Plaintiff's Counsel | Blackwood Stein & Associates LLP (Lead Partner: Garrett Blackwood; Associate: Megan Hsu), 717 Seventeenth Street, Suite 2200, Denver, CO 80202
Defense Counsel | Calderwood & Harkness LLP, 200 South Wacker Drive, Suite 4400, Chicago, IL 60606
C&H Responsible Partner | Priya Anand
C&H Billing Partner | Douglas Carmichael
C&H Lead Associate | Simone Laroche
C&H Working Associate | Jeffrey Park
Nexford Damages Expert | Dr. Anita Rosenthal, CPA, ABV — Meridian Bridge Consulting LLC, 311 South Michigan Avenue, Suite 1500, Chicago, IL 60604
CPI Damages Expert | Dr. Theodore Voss — Pinnacle Economics Group LLC, 1900 Sixteenth Street, Suite 400, Denver, CO 80202
Nexford External Auditor | Hargrove Kellner CPAs LLP (Engagement Partner: Steven Margolis), 500 West Monroe Street, Suite 3100, Chicago, IL 60661
Nexford Lender | Ridgecrest National Bank, N.A. (Relationship Manager: Karen Whitmore), 120 North LaSalle Street, Chicago, IL 60602
Ridgecrest Credit Facility | $45 million revolving credit facility dated March 12, 2021; Section 6.03(b) requires notice of settlements exceeding $1.0M
Mediator | Hon. Catherine Lindström (Ret.), Great Lakes Dispute Resolution Center, 150 North Riverside Plaza, Suite 2700, Chicago, IL 60606
Mediation Date | August 2, 2023
Settlement Agreement Execution Date | August 18, 2023
Settlement Amount | $1,890,000 (~40% of $4,730,000 claimed)
MSA Termination Date | August 31, 2023 (mutual termination; order transition through October 31, 2023)
Stipulation of Dismissal Filed | September 14, 2023
Matter Closed | September 15, 2023
Workbook Prepared By | Jeffrey Park and Simone Laroche, Calderwood & Harkness LLP
Workbook Purpose | Analysis of 14 disputed surcharge invoices issued by Cardinal Peak Industries to Nexford Industrial Holdings Inc. during the period March 2021 through May 2022, supporting Nexford's defense in Case No. 2022-L-008471
Nexford Annual Revenue (FY 2022) | ~$287 million
Cardinal Peak Annual Revenue (FY 2022) | ~$415 million

[sheet: Invoice Detail]

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