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TRANSITION SERVICES AGREEMENT

Dated as of October 24, 2023

by and between

NEXFORD INDUSTRIAL HOLDINGS INC.

a Delaware corporation

and

GERALD T. BRENNAN

an individual

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this "Agreement") is entered into as of October 24, 2023 (the "Effective Date"), which is the Closing Date under that certain Asset Purchase Agreement, dated September 5, 2023 (the "APA"), by and among Nexford Industrial Holdings Inc., a Delaware corporation ("Company" or "Nexford"), with its principal office at 4200 West Lake Shore Drive, Suite 800, Chicago, IL 60604, Pinnacle Metal Fabricators LLC, an Indiana limited liability company ("Pinnacle" or "PMF"), and the Members of Pinnacle, including Gerald T. Brennan, Sandra L. Brennan, and Derek J. Kopp (collectively, the "Members"), by and between Nexford and Gerald T. Brennan, an individual residing in the State of Indiana ("Consultant" or "Brennan"). Nexford and Brennan are each referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Nexford has acquired substantially all of the assets of Pinnacle Metal Fabricators LLC pursuant to the APA dated September 5, 2023, with the closing of the transactions contemplated thereby (the "Closing") having occurred on October 24, 2023 (the "Closing Date");

WHEREAS, Gerald T. Brennan was the founder and Managing Member of Pinnacle, holding a sixty-five percent (65%) membership interest in Pinnacle, and has over thirty (30) years of experience in the structural metals industry, including seventeen (17) years of founding and operating Pinnacle since its formation in 2006;

WHEREAS, Pinnacle is a custom metal fabrication business specializing in structural steel, aluminum, and stainless-steel components for commercial construction, infrastructure, and industrial original equipment manufacturer ("OEM") customers, with its principal operations conducted at 1127 Industrial Parkway, Hammond, IN 46320 (the "Facility");

WHEREAS, as a condition to the Closing of the transactions contemplated by the APA, the Parties agreed that Brennan would enter into this Agreement to provide transition consulting services to Nexford to facilitate the orderly integration of the Acquired Business (as defined below) into Nexford's operations and to ensure business continuity for customers, suppliers, employees, and other stakeholders of the Acquired Business;

WHEREAS, Brennan possesses specialized knowledge of Pinnacle's operations, customer relationships (including the relationship with Ironclad Bridge & Infrastructure Co., Pinnacle's largest customer, representing approximately twenty-eight percent (28%) of Pinnacle's revenue), supplier relationships (including the relationship with Calumet Steel Distributors Inc., Pinnacle's primary raw material supplier), proprietary fabrication processes and techniques, equipment maintenance practices, and key personnel, and such knowledge is critical to the successful integration and continued operation of the Acquired Business;

WHEREAS, Nexford is a portfolio company of Bramblewood Capital Partners, LP, a Delaware limited partnership, and operates as a diversified manufacturing platform in the industrials sector, with the acquisition of Pinnacle representing a strategic addition to Nexford's metals fabrication capabilities; and

WHEREAS, Brennan acknowledges that the consideration paid under the APA and under this Agreement constitutes adequate and sufficient consideration for the restrictive covenants contained herein and that such restrictive covenants are reasonable and necessary to protect Nexford's legitimate business interests in the goodwill, customer relationships, and other intangible assets acquired under the APA.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the APA.

(a) "Acquired Business" means the business and assets acquired by Nexford from Pinnacle pursuant to the APA, including the custom metal fabrication operations, customer contracts and relationships, supplier agreements and relationships, equipment, inventory, intellectual property, goodwill, and all other assets conveyed to Nexford at the Closing.

(b) "APA" means the Asset Purchase Agreement dated September 5, 2023, by and among Nexford, Pinnacle, and the Members, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.

(c) "Business" means the custom metal fabrication operations formerly conducted by Pinnacle, including all operations at the Facility, all customer and supplier relationships, all fabrication processes and techniques, and all other activities related to the design, fabrication, finishing, and installation of structural steel, aluminum, and stainless-steel components for commercial construction, infrastructure, and industrial OEM customers.

(d) "Closing Date" means October 24, 2023.

(e) "Competing Business" means any business, enterprise, or activity, whether conducted by a corporation, partnership, limited liability company, sole proprietorship, joint venture, or other entity, that is engaged in custom metal fabrication, structural steel fabrication, aluminum fabrication, or stainless-steel component fabrication for commercial construction, infrastructure, or industrial OEM customers, or that otherwise competes with the Acquired Business as conducted by Nexford on or after the Closing Date. For purposes of clarity, the term "Competing Business" shall include any business that derives more than ten percent (10%) of its annual revenue from custom metal fabrication services of the type provided by the Acquired Business.

(f) "Confidential Information" means all information, whether oral, written, electronic, or otherwise, that relates to the Acquired Business, Nexford, or any of Nexford's affiliates (including Bramblewood Capital Partners, LP and its portfolio companies), including, without limitation: (i) trade secrets and proprietary data; (ii) customer lists, customer contact information, customer preferences, pricing terms, and bidding and estimating methodologies; (iii) vendor and supplier terms, pricing, and agreements, including the terms of the supply agreement with Calumet Steel Distributors Inc.; (iv) operational data, shop floor workflows, production schedules, and capacity utilization information; (v) financial information, projections, budgets, cost structures, and margin analyses; (vi) employee information, compensation data, performance evaluations, and organizational charts; (vii) proprietary fabrication processes, techniques, and specifications, including CNC plasma and laser cutting parameters, welding procedures, and quality assurance protocols; (viii) business plans, strategic plans, acquisition targets, and integration plans; (ix) information regarding pending or threatened litigation, regulatory matters, or disputes; and (x) any other information that is not generally known to the public and that derives economic value from not being generally known. Confidential Information shall not include information that: (A) is or becomes publicly available through no act or omission of Brennan in violation of this Agreement; (B) was lawfully in Brennan's possession prior to its disclosure by Nexford, as evidenced by written records predating such disclosure; or (C) is lawfully obtained by Brennan from a third party without restriction on disclosure and without breach of any obligation of confidentiality.

(g) "Effective Date" means October 24, 2023.

(h) "Facility" means the approximately 48,000 square foot fabrication facility located at 1127 Industrial Parkway, Hammond, IN 46320, which is leased by Nexford (as assignee of Pinnacle's lease) from Lakeshore Realty Partners LLC pursuant to a lease agreement expiring on December 31, 2028.

(i) "Monthly Fee" means the monthly consulting fee of Eighteen Thousand Dollars ($18,000) payable to Brennan in accordance with Section 3.1.

(j) "Restricted Period" means, with respect to the non-competition covenant set forth in Section 5.2 and the non-solicitation covenants set forth in Sections 5.3 and 5.4, the period commencing on the Effective Date and ending on the third (3rd) anniversary of the Effective Date (i.e., October 24, 2026), subject to tolling as provided in Section 5.7(c).

(k) "Restricted Territory" means the geographic area within a one hundred fifty (150) mile radius from the Facility located at 1127 Industrial Parkway, Hammond, IN 46320, which the Parties acknowledge encompasses the primary geographic markets served by the Acquired Business, including the greater Chicago metropolitan area, Northwest Indiana, portions of Southern Wisconsin, portions of Central and Southern Michigan, and portions of Central Illinois.

(l) "Services" means the transition consulting services to be provided by Brennan as described in Section 2.2 and Exhibit A attached hereto.

(m) "Term" means the twelve (12) month period commencing on the Effective Date and ending on October 24, 2024, unless earlier terminated pursuant to Article VI.

Section 1.2 Interpretation. In this Agreement, unless the context otherwise requires:

(a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not constitute a part of this Agreement or affect in any way the meaning, construction, or interpretation hereof.

(b) Words importing the singular shall include the plural and vice versa, and words importing gender shall include all genders.

(c) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them.

(d) References to "Articles," "Sections," "Exhibits," and "Schedules" are to the Articles, Sections, Exhibits, and Schedules of this Agreement unless otherwise specified.

(e) References to any agreement, document, or instrument shall mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.

(f) References to "days" shall mean calendar days unless otherwise specified. If the last day for the performance of any act or the giving of any notice falls on a Saturday, Sunday, or federal holiday, such act may be performed or such notice may be given on the next succeeding business day.

(g) References to "dollars" or "$" shall mean the lawful currency of the United States of America.

(h) The word "or" shall not be exclusive.

(i) The word "person" shall include any individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, or other entity.

ARTICLE II — ENGAGEMENT AND SERVICES

Section 2.1 Engagement. Nexford hereby engages Brennan, and Brennan hereby accepts the engagement, as an independent contractor to provide transition consulting services in connection with the integration of the Acquired Business into Nexford's operations, on the terms and conditions set forth in this Agreement. The engagement of Brennan as an independent contractor is a material inducement to Nexford's consummation of the transactions contemplated by the APA, and Brennan acknowledges that Nexford would not have entered into the APA or consummated the Closing without Brennan's agreement to provide the Services described herein.

Section 2.2 Scope of Services. During the Term, Brennan shall provide the following transition consulting services (collectively, the "Services"), as further described in Exhibit A attached hereto:

(a) Customer Relationship Transition. Brennan shall assist Nexford with the orderly transition of all customer relationships of the Acquired Business, including:

(i) introducing Nexford management, including Marcus R. Haverford (CEO), Danielle K. Cho (CFO), and such other personnel as Nexford may designate, to key customers of the Acquired Business;

(ii) facilitating the transition of the relationship with Ironclad Bridge & Infrastructure Co. ("Ironclad"), the Acquired Business's largest customer, which represented approximately twenty-eight percent (28%) of Pinnacle's revenue for the twelve-month period ended September 30, 2023, including assisting with the assignment and continuation of the Master Supply Agreement between Pinnacle and Ironclad dated July 1, 2022, which extends through June 30, 2025 (the "Ironclad MSA"), and obtaining any required consents to assignment;

(iii) facilitating the transition of relationships with other significant customers, including but not limited to those customers with open purchase orders or blanket agreements as of the Closing Date;

(iv) assisting with customer backlog management, the Acquired Business having had approximately Seven Million Two Hundred Thousand Dollars ($7,200,000) in open orders at the time of signing of the APA; and

(v) participating in customer meetings, facility tours, and other customer-facing activities as reasonably requested by Nexford.

(b) Supplier Relationship Transition. Brennan shall assist Nexford with the orderly transition of all supplier relationships of the Acquired Business, including:

(i) introduction of Nexford management to key suppliers, particularly Calumet Steel Distributors Inc. ("Calumet"), the Acquired Business's primary raw material supplier, with whom Pinnacle maintained an annual volume commitment of approximately Four Million Eight Hundred Thousand Dollars ($4,800,000) under a supply agreement extending through March 31, 2025;

(ii) facilitating ongoing supply chain relationships, including relationships with secondary steel suppliers, aluminum suppliers, fastener vendors, and consumables suppliers;

(iii) assisting with the negotiation or renegotiation of supply terms as reasonably requested by Nexford; and

(iv) providing guidance on historical supplier performance, quality issues, lead times, and pricing trends.

(c) Operational Knowledge Transfer. Brennan shall provide operational and technical knowledge transfer to Nexford and its designated personnel, including:

(i) providing guidance on fabrication processes, including layout, cutting, forming, welding, finishing, painting, and quality inspection procedures;

(ii) assisting with the operation and maintenance of CNC plasma and laser cutting equipment (fourteen (14) machines in total), including programming protocols, nesting optimization, consumable management, and preventive maintenance schedules;

(iii) providing guidance on overhead bridge crane operations (two (2) cranes, each with a capacity of twenty (20) tons), including safety protocols and certification requirements;

(iv) documenting and transferring knowledge regarding shop floor workflows, production scheduling methodologies, capacity planning, and job costing practices;

(v) assisting Derek J. Kopp (retained as Plant Manager, annual base salary of $145,000) and other retained operations personnel with the transition to Nexford's management systems and reporting requirements; and

(vi) providing guidance on quality management systems, including any certifications (Meridian Technologies, AISC) and ongoing compliance requirements.

(d) Employee Transition. Brennan shall assist with the retention and integration of the Acquired Business's workforce, including:

(i) supporting the retention and integration of the seventy-one (71) employees retained by Nexford at the Closing, consisting of approximately forty-two (42) shop floor production employees, eighteen (18) field installation employees, and eleven (11) office and management personnel;

(ii) providing guidance on individual employee capabilities, performance history, skill sets, certifications, and development needs;

(iii) supporting workforce continuity and morale during the integration period;

(iv) assisting with the identification of any critical skill gaps or succession planning needs; and

(v) facilitating the introduction of Nexford's HR policies, benefit programs, and organizational structure to the retained workforce.

(e) Facility Operations. Brennan shall provide guidance on the operations at the Facility, including:

(i) the layout and utilization of the approximately 48,000 square foot fabrication space;

(ii) equipment maintenance practices and vendor service relationships;

(iii) environmental, health, and safety protocols and compliance requirements;

(iv) the terms and conditions of the facility lease with Lakeshore Realty Partners LLC, which expires on December 31, 2028; and

(v) any capital improvement projects or deferred maintenance items of which Brennan has knowledge.

(f) General Business Advisory. Brennan shall respond to reasonable inquiries from Nexford management regarding the historical operations, practices, procedures, and relationships of the Acquired Business, and shall provide such other guidance and advice as may be reasonably helpful to Nexford in operating and integrating the Acquired Business.

(g) Additional Services. Brennan shall provide such other transition services as may be reasonably requested by Nexford from time to time during the Term, provided that such services are consistent with the general nature and scope of the Services described above and do not impose an unreasonable burden on Brennan in light of the anticipated time commitment set forth in Section 2.3.

Section 2.3 Time Commitment. Brennan shall devote such time and attention as is reasonably necessary to perform the Services in a professional and thorough manner. The Parties anticipate that the Services will require approximately twenty (20) hours per week during the first six (6) months of the Term (the "Initial Period") and approximately ten (10) hours per week during the remaining six (6) months of the Term (the "Wind-Down Period"). Brennan shall make himself reasonably available during normal business hours (Monday through Friday, 7:00 a.m. to 5:00 p.m. Central Time) for telephone calls, email correspondence, video conferences, and in-person meetings. Brennan shall be available for on-site visits at the Facility as reasonably requested by Nexford, which the Parties anticipate will occur approximately two (2) to three (3) days per week during the Initial Period and approximately one (1) day per week during the Wind-Down Period. The Parties acknowledge that the foregoing time estimates are approximations and that the actual time required may vary depending on the needs of the Acquired Business and the progress of the integration.

Section 2.4 Reporting. Brennan shall report to and take direction from Marcus R. Haverford, Chief Executive Officer of Nexford, or such other person as Nexford may designate in writing from time to time. Brennan shall also coordinate with Philip M. Stanhope, General Counsel of Nexford, regarding legal and contractual matters affecting the Acquired Business, and with Danielle K. Cho, Chief Financial Officer of Nexford, regarding financial, accounting, and administrative matters affecting the Acquired Business, in each case as appropriate given the nature of the Services being provided. Brennan shall provide periodic status updates to Nexford management as reasonably requested, and shall promptly inform Nexford of any material issues, risks, or developments affecting the Acquired Business that come to Brennan's attention during the course of performing the Services.

Section 2.5 Standard of Performance. Brennan shall perform the Services in a professional, diligent, competent, and workmanlike manner, consistent with the standards and practices employed by Brennan in operating the Acquired Business prior to the Closing Date and consistent with the standard of care that would be exercised by a reasonably prudent consultant with comparable experience and expertise in the structural metals industry. Brennan shall act in good faith and in the best interests of Nexford in performing the Services and shall not take any action, or fail to take any action, that would reasonably be expected to impair the value of the Acquired Business or Nexford's relationships with customers, suppliers, employees, or other stakeholders.

ARTICLE III — COMPENSATION AND EXPENSES

Section 3.1 Monthly Fee. In consideration of Brennan's performance of the Services, Nexford shall pay Brennan a monthly consulting fee of Eighteen Thousand Dollars ($18,000) per month (the "Monthly Fee"), payable in arrears on or before the fifteenth (15th) day of each calendar month following the month in which the Services were performed. The total annualized compensation payable to Brennan under this Section 3.1, assuming the full twelve (12) month Term, is Two Hundred Sixteen Thousand Dollars ($216,000). For purposes of clarity, the Monthly Fee for the first month of the Term (October 24, 2023, through November 23, 2023) shall be the full Monthly Fee of $18,000, and the Monthly Fee for the final month of the Term shall be prorated on a per diem basis if the Term expires or is terminated on a date other than the last day of a monthly period. Payment of the Monthly Fee shall be made by wire transfer to Brennan's designated bank account, in accordance with the wire instructions provided by Brennan to Nexford and as set forth in the Form of Monthly Invoice attached hereto as Exhibit B.

Section 3.2 Expenses. Nexford shall reimburse Brennan for reasonable, documented, out-of-pocket expenses incurred by Brennan in connection with the performance of the Services, subject to the following conditions:

(a) any single expense in an amount exceeding Five Hundred Dollars ($500) shall require the prior written approval of Nexford (which approval may be given by email from Marcus R. Haverford, Danielle K. Cho, or Philip M. Stanhope);

(b) aggregate monthly expenses in an amount exceeding Two Thousand Dollars ($2,000) shall require the prior written approval of Nexford;

(c) Brennan shall submit expense reports, substantially in the form attached as part of Exhibit B, with supporting receipts and documentation, within thirty (30) days of incurring such expenses; and

(d) Nexford shall reimburse approved expenses within thirty (30) days following receipt of a complete and properly documented expense report.

Reimbursable expenses shall include, without limitation, reasonable travel expenses (mileage at the then-current IRS standard rate, tolls, and parking), meals incurred while conducting on-site Services at the Facility or attending customer or supplier meetings, and telecommunications charges directly attributable to the Services. For the avoidance of doubt, Brennan's ordinary commuting expenses to and from the Facility shall be reimbursable to the extent that Brennan's residence is more than fifty (50) miles from the Facility.

Section 3.3 No Benefits. Brennan shall not be entitled to participate in, or receive any benefits under, any employee benefit plans, programs, or arrangements of Nexford or any of its affiliates, including, without limitation, health, dental, or vision insurance, life insurance, disability insurance, retirement plans (including any 401(k) plan), pension plans, equity incentive plans, vacation or paid time off, sick leave, or any other fringe benefit or perquisite. Brennan acknowledges and agrees that the compensation provided under this Agreement is in addition to, and not in lieu of, any proceeds received by Brennan under the APA, including Brennan's sixty-five percent (65%) share of the Twenty-One Million Dollar ($21,000,000) net closing cash payment and any earnout payments that may become payable from the total earnout pool of Six Million Dollars ($6,000,000), subject to the terms and conditions of the APA.

Section 3.4 Taxes. Brennan acknowledges and agrees that he is solely responsible for the payment of all federal, state, and local income taxes, self-employment taxes (including FICA and Medicare taxes), unemployment taxes, and all other taxes, assessments, or contributions arising from the compensation paid to Brennan under this Agreement. Nexford shall not withhold any federal, state, or local income taxes, Social Security taxes, Medicare taxes, or any other taxes from the Monthly Fee or any other amounts paid to Brennan hereunder. Nexford shall issue IRS Form 1099-NEC (or any successor form) to Brennan with respect to amounts paid hereunder for each applicable calendar year, and shall file such form with the Internal Revenue Service as required by applicable law. Brennan shall indemnify and hold harmless Nexford from and against any liability, penalty, interest, or assessment arising from Brennan's failure to pay any taxes required to be paid by Brennan in connection with the compensation received under this Agreement.

Section 3.5 No Offset. Payments to Brennan under this Agreement shall not be subject to offset, deduction, counterclaim, or withholding (other than as may be required by applicable law) against any indemnification obligations of Brennan, the other Members, or Pinnacle under the APA, or under the Escrow Agreement dated October 24, 2023, among Nexford, Gerald T. Brennan (in his capacity as Seller Representative), and Commonwealth Escrow Services Inc. (the "Escrow Agent"). For the avoidance of doubt, Nexford's obligation to pay the Monthly Fee and reimburse expenses under this Agreement is independent of, and shall not be reduced by, any indemnification claims that Nexford may have or assert against Brennan or the other Members under the APA or the Escrow Agreement, and any such indemnification claims shall be resolved solely in accordance with the procedures set forth in the APA and the Escrow Agreement, as applicable.

ARTICLE IV — INDEPENDENT CONTRACTOR STATUS

Section 4.1 Independent Contractor. The Parties acknowledge and agree that Brennan is an independent contractor with respect to Nexford and is not an employee, agent, partner, or joint venturer of Nexford or any of its affiliates. Nothing in this Agreement shall be construed to create or be deemed to create an employment, agency, partnership, or joint venture relationship between Brennan and Nexford or any of Nexford's affiliates. Brennan shall be free to determine the manner and means by which the Services are performed, subject to the general direction and oversight of Nexford as provided in Section 2.4, and shall not be subject to the day-to-day supervision or control of Nexford with respect to the details of the work performed. Brennan shall be free to provide services to other persons or entities during the Term, provided that such services do not conflict with Brennan's obligations under this Agreement, including the restrictive covenants set forth in Article V, and do not interfere with Brennan's ability to perform the Services in a timely and professional manner.

Section 4.2 No Authority to Bind. Brennan shall have no authority to bind Nexford or any of its affiliates, to enter into any contracts, agreements, or commitments on behalf of Nexford or any of its affiliates, to incur any liabilities or obligations on behalf of Nexford or any of its affiliates, or to represent himself as an employee, officer, director, or authorized agent of Nexford or any of its affiliates, except as may be expressly authorized in writing by Marcus R. Haverford or another authorized officer of Nexford. Brennan shall not use any Nexford business cards, stationery, email addresses, or other materials that would suggest that Brennan is an employee or officer of Nexford, unless Nexford expressly provides such materials for use in connection with specific customer or supplier transition activities.

Section 4.3 Workers' Compensation and Insurance. Brennan shall be solely responsible for maintaining, at his own cost and expense, any and all insurance coverage that may be required by applicable law or that Brennan deems appropriate, including workers' compensation insurance (to the extent required by the laws of the State of Indiana or any other applicable jurisdiction), general liability insurance, and professional liability insurance. Nexford shall not be required to provide any insurance coverage for Brennan or to include Brennan under any of Nexford's insurance policies. Brennan shall provide Nexford with evidence of any insurance coverage maintained by Brennan upon Nexford's reasonable request.

ARTICLE V — RESTRICTIVE COVENANTS

Section 5.1 Acknowledgments. Brennan acknowledges and agrees as follows:

(a) As founder and Managing Member of Pinnacle for approximately seventeen (17) years since its formation in 2006, Brennan possesses extensive, unique, and valuable knowledge of the Acquired Business, including its trade secrets, proprietary fabrication processes and techniques, customer relationships, supplier relationships, pricing methodologies, cost structures, operational methods, competitive strategies, and the skills, capabilities, and compensation of the Acquired Business's employees. Brennan further acknowledges that such knowledge, if used in competition with Nexford, would cause substantial and irreparable harm to Nexford and the Acquired Business.

(b) The consideration paid to Brennan under the APA, including Brennan's sixty-five percent (65%) share of the Twenty-One Million Dollar ($21,000,000) net closing cash payment (representing approximately Thirteen Million Six Hundred Fifty Thousand Dollars ($13,650,000) attributable to Brennan's membership interest) plus the potential for earnout payments from a total earnout pool of Six Million Dollars ($6,000,000) (of which Brennan's sixty-five percent (65%) share would be up to Three Million Nine Hundred Thousand Dollars ($3,900,000)), together with the compensation payable to Brennan under this Agreement (up to Two Hundred Sixteen Thousand Dollars ($216,000) over the Term), constitute adequate and sufficient consideration for the restrictive covenants set forth in this Article V.

(c) The restrictive covenants set forth in this Article V are reasonable in scope, duration, and geographic extent and are necessary to protect Nexford's legitimate business interests in the goodwill, customer relationships, supplier relationships, trade secrets, confidential information, and other intangible assets acquired by Nexford under the APA. Brennan further acknowledges that the restrictions contained herein will not impose an undue hardship on Brennan or prevent Brennan from earning a livelihood, given the substantial consideration Brennan has received under the APA and this Agreement.

(d) Brennan has also entered into a separate Non-Competition and Non-Solicitation Agreement dated October 24, 2023, in favor of Nexford (the "Separate Non-Compete"), and the covenants set forth in this Article V are in addition to, and not in lieu of, the covenants contained in the Separate Non-Compete. In the event of any conflict or inconsistency between the restrictive covenants set forth in this Article V and those set forth in the Separate Non-Compete, the more restrictive provision shall govern; provided, however, that nothing in this Agreement shall be deemed to limit, narrow, or reduce the scope or duration of any restrictive covenant set forth in the Separate Non-Compete.

Section 5.2 Non-Competition.

(a) During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity, own, manage, operate, control, be employed by, consult for, render services to, participate in the ownership, management, operation, or control of, or be connected in any manner with, any Competing Business within the Restricted Territory.

(b) Passive Investment Exception. Notwithstanding the foregoing, the passive ownership by Brennan of less than two percent (2%) of the outstanding equity securities of any entity that has a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, shall not constitute a violation of this Section 5.2, provided that Brennan does not otherwise participate in the management, operations, or business activities of such entity.

(c) Reasonableness of Restrictions. The Parties acknowledge and agree that the geographic scope of the non-competition covenant (a one hundred fifty (150) mile radius from Hammond, Indiana) and the temporal scope of the non-competition covenant (three (3) years from the Effective Date) are reasonable and appropriate given the regional nature of the Acquired Business, the geographic distribution of the Acquired Business's customer base, the Midwest infrastructure and commercial construction end-markets served by the Acquired Business, and the length of the typical customer relationship and project cycle in the structural metals industry. The Parties further acknowledge that the scope of the Competing Business definition is appropriately tailored to the specific types of custom metal fabrication activities conducted by the Acquired Business and does not extend to unrelated manufacturing or industrial activities.

Section 5.3 Non-Solicitation of Customers. During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity, solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any customer or prospective customer of the Acquired Business with whom Brennan had a material relationship, or about whom Brennan obtained Confidential Information, during the two (2) year period preceding the Closing Date. For purposes of clarity, this covenant shall apply to, without limitation, Ironclad Bridge & Infrastructure Co. and all customers included in the customer list delivered by Pinnacle to Nexford at the Closing pursuant to Schedule 4.16 of the APA. For purposes of this Section 5.3, a "prospective customer" means any person or entity with whom Pinnacle or Brennan had substantive discussions or negotiations regarding the provision of custom metal fabrication services during the twelve (12) month period preceding the Closing Date.

Section 5.4 Non-Solicitation of Employees. During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity:

(a) solicit, recruit, hire, or engage, or attempt to solicit, recruit, hire, or engage, any employee, independent contractor, or consultant of Nexford or the Acquired Business, including, without limitation, the seventy-one (71) employees retained by Nexford at the Closing and Derek J. Kopp (retained as Plant Manager), to terminate or reduce such person's employment or engagement with Nexford or any of its affiliates; or

(b) encourage, induce, or assist any employee, independent contractor, or consultant of Nexford or the Acquired Business to leave the employment or engagement of Nexford or any of its affiliates, or to accept employment or engagement with any other person or entity.

General Advertising Exception. Notwithstanding the foregoing, general advertisements or solicitations (including postings on job boards, social media platforms, or in trade publications) that are not specifically targeted at, or directed to, employees, independent contractors, or consultants of Nexford or the Acquired Business shall not constitute a violation of this Section 5.4; provided, however, that this exception shall not apply to any situation in which Brennan directs, encourages, or facilitates the response of a specific Nexford employee to such general advertisement or solicitation.

Section 5.5 Confidentiality.

(a) Non-Disclosure Obligation. Brennan shall not, during the Term or at any time thereafter (without temporal limitation), directly or indirectly, disclose, use, copy, publish, distribute, or otherwise exploit any Confidential Information of the Acquired Business, Nexford, or any of Nexford's affiliates, except as expressly required in the course of performing the Services under this Agreement or as expressly authorized in writing by Nexford.

(b) Exceptions. The obligations of confidentiality set forth in this Section 5.5 shall not apply to information that:

(i) is or becomes generally available to the public through no act or omission of Brennan in violation of this Agreement or any other obligation of confidentiality owed by Brennan;

(ii) is independently developed by Brennan after the Effective Date without the use of, or reference to, any Confidential Information, as established by contemporaneous written documentation; or

(iii) is required to be disclosed by applicable law, regulation, governmental order, subpoena, or court order of competent jurisdiction; provided that, to the extent legally permissible, Brennan shall give Nexford prompt written notice of any such requirement prior to making any disclosure, shall disclose only such information as is legally required, and shall cooperate with Nexford in seeking a protective order, confidential treatment, or other appropriate remedy to limit the scope of such disclosure.

(c) Return of Confidential Information. Upon the expiration or termination of this Agreement, or at any time upon the written request of Nexford, Brennan shall promptly return to Nexford, or at Nexford's option, destroy, all documents, files, records, data, materials, and other items in Brennan's possession or control that contain or embody Confidential Information, including all copies, summaries, notes, extracts, and compilations thereof, whether in physical, electronic, or other form. Upon Nexford's request, Brennan shall provide a written certification of compliance with this Section 5.5(c), signed under penalty of perjury.

Section 5.6 intellectual Property. Any and all work product, inventions, discoveries, developments, improvements, designs, specifications, processes, techniques, documentation, reports, analyses, or other materials (collectively, "Work Product") created, conceived, developed, or reduced to practice by Brennan, whether alone or jointly with others, in the course of performing the Services under this Agreement shall be the sole and exclusive property of Nexford. Brennan hereby irrevocably assigns to Nexford all right, title, and interest in and to such Work Product, including all intellectual property rights therein (including patents, copyrights, trade secrets, and trademarks). Brennan shall execute all documents and take all actions reasonably necessary to effectuate, evidence, or perfect such assignment, including the execution of patent applications, copyright registrations, and assignments. The Parties acknowledge that the "Pinnacle" and "Pinnacle Metal Fabricators" trade names and all associated trademarks, service marks, domain names, and other intellectual property were transferred to Nexford under the APA, and Brennan shall not use, register, or apply to register any such name, mark, or any confusingly similar name or mark during or after the Term.

Section 5.7 Remedies.

(a) Irreparable Harm. Brennan acknowledges and agrees that a breach or threatened breach of any of the restrictive covenants set forth in this Article V would cause irreparable harm to Nexford and the Acquired Business for which monetary damages alone would be an inadequate remedy. Brennan further acknowledges that the harm resulting from such a breach would be difficult or impossible to quantify.

(b) Equitable Relief. In the event of a breach or threatened breach of any provision of this Article V, Nexford shall be entitled to seek and obtain, from any court of competent jurisdiction, temporary, preliminary, and permanent injunctive relief, specific performance, and any other equitable remedies, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages, posting a bond or other security, or showing that monetary damages would be an inadequate remedy. The exercise of any remedy under this Section 5.7(b) shall not preclude Nexford from pursuing any other remedy to which it may be entitled, including monetary damages.

(c) Tolling. If Brennan violates any non-competition or non-solicitation covenant set forth in this Article V, the Restricted Period applicable to such covenant shall be automatically tolled and suspended during the period of such violation and shall resume running upon the cessation of such violation, such that Nexford receives the full benefit of the agreed-upon Restricted Period.

(d) Blue-Pencil Reformation. If any court of competent jurisdiction determines that any restrictive covenant set forth in this Article V is unenforceable as written by reason of its scope, duration, geographic extent, or otherwise, the Parties agree that such court shall have the power and authority to reform, modify, or "blue-pencil" such covenant to the maximum scope, shortest duration, or smallest geographic extent that would be enforceable under applicable law, and such covenant as so reformed shall be enforceable as though the original, broader covenant had never existed. The Parties intend that the restrictive covenants in this Article V be enforced to the fullest extent permitted by law.

ARTICLE VI — TERM AND TERMINATION

Section 6.1 Term. This Agreement shall commence on the Effective Date (October 24, 2023) and shall continue in full force and effect for a period of twelve (12) months, ending on October 24, 2024 (the "Term"), unless earlier terminated in accordance with the provisions of this Article VI. The Term shall not automatically renew or extend; any extension of the Term shall require a written amendment signed by both Parties.

Section 6.2 Termination by Nexford for Cause. Nexford may terminate this Agreement immediately upon written notice to Brennan if any of the following events occurs:

(a) Brennan materially breaches any provision of this Agreement and fails to cure such breach within fifteen (15) days after receiving written notice from Nexford specifying the nature of the breach and the actions required to cure it; provided that if such breach is not capable of cure, Nexford may terminate this Agreement immediately upon written notice;

(b) Brennan commits fraud, willful misconduct, or gross negligence in connection with the performance of the Services or in his dealings with Nexford, its affiliates, customers, suppliers, employees, or other stakeholders;

(c) Brennan breaches any restrictive covenant set forth in Article V of this Agreement, which breach shall be deemed incurable and shall entitle Nexford to immediate termination without any notice or cure period;

(d) Brennan is convicted of, or pleads guilty or nolo contendere to, any felony or any crime involving moral turpitude, dishonesty, fraud, theft, embezzlement, or misappropriation; or

(e) Brennan becomes legally incapacitated or unable to perform the Services for a period exceeding sixty (60) consecutive days due to death, disability, or incapacity.

In the event of termination for cause under this Section 6.2, Nexford shall pay Brennan any accrued and unpaid Monthly Fee and unreimbursed expenses through the effective date of termination, but shall have no further payment obligations under this Agreement (other than with respect to surviving obligations).

Section 6.3 Termination by Nexford Without Cause. Nexford may terminate this Agreement without cause, for any reason or no reason, upon thirty (30) days' prior written notice to Brennan. In the event of such termination, Nexford shall pay Brennan the Monthly Fee through the effective date of termination, plus any accrued but unpaid Monthly Fee and properly documented unreimbursed expenses incurred prior to the effective date of termination, and the termination payment set forth in Section 6.6.

Section 6.4 Termination by Brennan. Brennan may terminate this Agreement upon sixty (60) days' prior written notice to Nexford if Nexford fails to pay any undisputed amounts owed to Brennan under this Agreement within thirty (30) days after the date such amounts are due and payable and such failure to pay continues for a period of fifteen (15) days after Brennan delivers written notice to Nexford specifying the amounts that are past due and demanding payment. For the avoidance of doubt, amounts that are subject to a good-faith dispute by Nexford shall not constitute "undisputed amounts" for purposes of this Section 6.4, and Brennan may not terminate this Agreement on account of Nexford's failure to pay disputed amounts.

Section 6.5 Effect of Termination.

(a) Upon the termination or expiration of this Agreement for any reason, all rights and obligations of the Parties under this Agreement shall cease, except that:

(i) the restrictive covenants set forth in Article V (including the non-competition covenant in Section 5.2, the non-solicitation of customers covenant in Section 5.3, the non-solicitation of employees covenant in Section 5.4, and the intellectual property provisions of Section 5.6) shall survive for their full stated duration (through October 24, 2026, in the case of the non-competition and non-solicitation covenants), regardless of the reason for or timing of such termination or expiration;

(ii) the confidentiality obligations set forth in Section 5.5 shall survive the termination or expiration of this Agreement indefinitely and without temporal limitation;

(iii) the indemnification obligations set forth in Article VIII shall survive the termination or expiration of this Agreement in accordance with their terms;

(iv) any accrued and unpaid Monthly Fee and properly documented unreimbursed expenses shall remain payable in accordance with the terms of this Agreement; and

(v) the provisions of Article IX (Limitation of Liability) and Article X (Miscellaneous) shall survive the termination or expiration of this Agreement in accordance with their terms.

(b) For the avoidance of doubt, the non-competition covenant (which runs for a period of three (3) years through October 24, 2026) and the non-solicitation covenants (which also run for a period of three (3) years through October 24, 2026) commence on the Effective Date and are measured from the Effective Date. The duration of such covenants is not affected by, and shall not be reduced or shortened as a result of, any early termination of the consulting engagement under this Article VI, whether by Nexford or by Brennan, and whether for cause, without cause, or otherwise.

Section 6.6 Acceleration of Fees. If Nexford terminates this Agreement without cause under Section 6.3 prior to the expiration of the Term, then, in addition to the amounts payable to Brennan through the effective date of termination as set forth in Section 6.3, Nexford shall pay Brennan a lump sum termination payment equal to three (3) months of the Monthly Fee, in the aggregate amount of Fifty-Four Thousand Dollars ($54,000) (the "Termination Payment"). The Termination Payment shall be paid within thirty (30) days following the effective date of termination and shall be in full satisfaction of any and all further obligations of Nexford under this Agreement (other than surviving obligations as set forth in Section 6.5), including any claims for lost consulting fees for the remainder of the Term. As a condition to receiving the Termination Payment, Brennan shall execute and deliver to Nexford a general release of claims in a form reasonably satisfactory to Nexford, releasing Nexford, its affiliates, and their respective officers, directors, employees, agents, and representatives from any and all claims relating to or arising from this Agreement (other than claims with respect to surviving obligations).

ARTICLE VII — REPRESENTATIONS AND WARRANTIES

Section 7.1 Representations and Warranties of Brennan. Brennan hereby represents and warrants to Nexford as follows:

(a) Capacity and Authority. Brennan has full legal capacity, right, and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Brennan and constitutes the legal, valid, and binding obligation of Brennan, enforceable against Brennan in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject to general equitable principles.

(b) No Conflicts. The execution, delivery, and performance of this Agreement by Brennan do not and will not (i) conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or other obligation to which Brennan is a party or by which Brennan or any of his assets are bound, other than the APA, the Non-Competition and Non-Solicitation Agreement dated October 24, 2023, and the Escrow Agreement dated October 24, 2023, each of which has been entered into in connection with the transactions contemplated by the APA, or (ii) violate any applicable law, rule, regulation, or order of any governmental authority.

(c) No Restrictive Covenants. Brennan is not a party to, or bound by, any non-competition agreement, non-solicitation agreement, confidentiality agreement, or other restrictive covenant (other than those entered into in connection with the APA and this Agreement) that would impair or restrict Brennan's ability to perform the Services or to comply with the terms and conditions of this Agreement.

(d) Compliance with Laws. Brennan shall comply with all applicable federal, state, and local laws, rules, regulations, ordinances, and orders in performing the Services, including all applicable tax laws, employment and labor laws, workplace safety laws, and environmental laws.

(e) Accuracy of Information. All information provided by Brennan to Nexford in connection with the negotiation and execution of this Agreement is true, accurate, and complete in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading.

Section 7.2 Representations and Warranties of Nexford. Nexford hereby represents and warrants to Brennan as follows:

(a) Organization and Good Standing. Nexford is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.

(b) Corporate Authority. Nexford has full corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Nexford have been duly authorized by all necessary corporate action on the part of Nexford, including all requisite approvals of its board of directors and stockholders (to the extent required). This Agreement has been duly executed and delivered by Nexford and constitutes the legal, valid, and binding obligation of Nexford, enforceable against Nexford in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject to general equitable principles.

(c) No Conflicts. The execution, delivery, and performance of this Agreement by Nexford do not and will not (i) conflict with or violate the certificate of incorporation, bylaws, or other organizational documents of Nexford, (ii) conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or other obligation to which Nexford is a party or by which Nexford or any of its assets are bound, or (iii) violate any applicable law, rule, regulation, or order of any governmental authority.

ARTICLE VIII — INDEMNIFICATION

Section 8.1 Indemnification by Brennan. Brennan shall indemnify, defend, and hold harmless Nexford and its affiliates (including Bramblewood Capital Partners, LP and its affiliates), and their respective officers, directors, managers, employees, agents, successors, and assigns (collectively, the "Nexford Indemnitees"), from and against any and all losses, damages, liabilities, claims, demands, actions, suits, proceedings, costs, and expenses (including reasonable attorneys' fees and costs of investigation) (collectively, "Losses") arising out of, resulting from, or relating to:

(a) any breach or alleged breach by Brennan of any representation, warranty, covenant, or obligation of Brennan under this Agreement;

(b) any gross negligence or willful misconduct of Brennan in the performance of the Services or in connection with this Agreement; or

(c) any claim by any governmental authority, employee, or other third party that Brennan is or was an employee of Nexford for purposes of federal, state, or local tax laws, employment laws, benefit plan laws, or any other applicable law, and any resulting liability of Nexford for employment taxes, benefit contributions, penalties, interest, or other amounts.

Section 8.2 Indemnification by Nexford. Nexford shall indemnify, defend, and hold harmless Brennan and his heirs, executors, administrators, and legal representatives (collectively, the "Brennan Indemnitees") from and against any and all Losses arising out of, resulting from, or relating to:

(a) any breach or alleged breach by Nexford of any representation, warranty, covenant, or obligation of Nexford under this Agreement; or

(b) Brennan's performance of the Services under this Agreement, to the extent that such Losses are not caused by or attributable to Brennan's breach of this Agreement, gross negligence, or willful misconduct.

Section 8.3 Relationship to APA Indemnification. The indemnification obligations set forth in this Article VIII are separate from, independent of, and in addition to, the indemnification obligations of Brennan and the other Members under Article X of the APA. For reference and clarity, the indemnification provisions of the APA include, among other terms: (i) an aggregate indemnification cap of Nine Million Dollars ($9,000,000), representing thirty percent (30%) of the Thirty Million Dollar ($30,000,000) total Purchase Price (consisting of the Twenty-One Million Dollar ($21,000,000) net closing cash payment plus the Six Million Dollar ($6,000,000) earnout pool plus Three Million Dollars ($3,000,000) held in escrow); (ii) a tipping basket of Three Hundred Thousand Dollars ($300,000), below which no indemnification claims may be made; (iii) a de minimis threshold of Twenty-Five Thousand Dollars ($25,000) per individual claim, below which such claim shall not count toward the tipping basket; (iv) an eighteen (18) month survival period for representations and warranties (other than fundamental representations, which survive for thirty-six (36) months); and (v) a Three Million Dollar ($3,000,000) indemnification escrow held by Commonwealth Escrow Services Inc. as Escrow Agent. Nothing in this Agreement shall be construed to modify, limit, or otherwise affect the indemnification provisions of the APA, and any indemnification claims under the APA shall be governed solely by the terms and conditions set forth therein.

ARTICLE IX — LIMITATION OF LIABILITY

Section 9.1 Limitation of Aggregate Liability. Except in the case of fraud, willful misconduct, or breach of Article V (Restrictive Covenants), Brennan's aggregate liability under this Agreement for any and all claims, whether based on contract, tort, strict liability, or any other theory, shall not exceed the total fees paid or payable to Brennan under this Agreement, which amount is Two Hundred Sixteen Thousand Dollars ($216,000) (assuming the full twelve (12) month Term). For the avoidance of doubt, this limitation shall not apply to, and shall not limit, Brennan's liability for (a) fraud or intentional misrepresentation, (b) willful misconduct, (c) breach of any restrictive covenant set forth in Article V, or (d) Brennan's indemnification obligations under Section 8.1(c) with respect to claims regarding Brennan's independent contractor status.

Section 9.2 Consequential Damages. Except in the case of a breach of Article V (Restrictive Covenants), neither Party shall be liable to the other Party for any consequential, indirect, incidental, special, exemplary, or punitive damages of any nature arising out of or related to this Agreement, including, without limitation, loss of revenue, loss of profits, loss of business opportunity, or diminution in value, regardless of whether such damages are based on contract, tort, strict liability, or any other theory, and regardless of whether such Party has been advised of the possibility of such damages. The foregoing limitation shall not apply to Nexford's damages arising from Brennan's breach of Article V, for which Nexford shall be entitled to recover all damages available at law or in equity, including consequential, indirect, and incidental damages.

ARTICLE X — MISCELLANEOUS

Section 10.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-law provisions or rules (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Each Party irrevocably submits to the jurisdiction of the federal and state courts located in the State of New York for any action arising out of or relating to this Agreement, and each Party irrevocably waives any objection to venue in such courts.

Section 10.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof (each, a "Dispute"), shall be resolved as follows:

(a) Negotiation. The Parties shall first attempt to resolve the Dispute through good-faith negotiation. Either Party may initiate negotiation by delivering written notice to the other Party describing the Dispute in reasonable detail (a "Dispute Notice"). The Parties shall use commercially reasonable efforts to resolve the Dispute within thirty (30) days following delivery of the Dispute Notice, including, if appropriate, meetings between senior executives of each Party with authority to resolve the matter.

(b) Binding Arbitration. If the Dispute is not resolved through negotiation within the thirty (30) day period specified in Section 10.2(a), either Party may submit the Dispute to final and binding arbitration administered by JAMS (or, if JAMS is unavailable, another nationally recognized arbitration organization mutually agreed upon by the Parties) in Chicago, Illinois, in accordance with the then-current JAMS Comprehensive Arbitration Rules and Procedures. The arbitration shall be conducted by a single arbitrator selected in accordance with the applicable rules of the administering organization. The arbitrator shall have the authority to award any

TRANSITION SERVICES AGREEMENT
Dated as of October 24, 2023
by and between
NEXFORD INDUSTRIAL HOLDINGS INC.
a Delaware corporation
and
GERALD T. BRENNAN
an individual
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is entered into as of October 24, 2023 (the "Effective Date"), which is the Closing Date under that certain Asset Purchase Agreement, dated September 5, 2023 (the "APA"), by and among Nexford Industrial Holdings Inc., a Delaware corporation ("Company" or "Nexford"), with its principal office at 4200 West Lake Shore Drive, Suite 800, Chicago, IL 60604, Pinnacle Metal Fabricators LLC, an Indiana limited liability company ("Pinnacle" or "PMF"), and the Members of Pinnacle, including Gerald T. Brennan, Sandra L. Brennan, and Derek J. Kopp (collectively, the "Members"), by and between Nexford and Gerald T. Brennan, an individual residing in the State of Indiana ("Consultant" or "Brennan"). Nexford and Brennan are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Nexford has acquired substantially all of the assets of Pinnacle Metal Fabricators LLC pursuant to the APA dated September 5, 2023, with the closing of the transactions contemplated thereby (the "Closing") having occurred on October 24, 2023 (the "Closing Date");
WHEREAS, Gerald T. Brennan was the founder and Managing Member of Pinnacle, holding a sixty-five percent (65%) membership interest in Pinnacle, and has over thirty (30) years of experience in the structural metals industry, including seventeen (17) years of founding and operating Pinnacle since its formation in 2006;
WHEREAS, Pinnacle is a custom metal fabrication business specializing in structural steel, aluminum, and stainless-steel components for commercial construction, infrastructure, and industrial original equipment manufacturer ("OEM") customers, with its principal operations conducted at 1127 Industrial Parkway, Hammond, IN 46320 (the "Facility");
WHEREAS, as a condition to the Closing of the transactions contemplated by the APA, the Parties agreed that Brennan would enter into this Agreement to provide transition consulting services to Nexford to facilitate the orderly integration of the Acquired Business (as defined below) into Nexford's operations and to ensure business continuity for customers, suppliers, employees, and other stakeholders of the Acquired Business;
WHEREAS, Brennan possesses specialized knowledge of Pinnacle's operations, customer relationships (including the relationship with Ironclad Bridge & Infrastructure Co., Pinnacle's largest customer, representing approximately twenty-eight percent (28%) of Pinnacle's revenue), supplier relationships (including the relationship with Calumet Steel Distributors Inc., Pinnacle's primary raw material supplier), proprietary fabrication processes and techniques, equipment maintenance practices, and key personnel, and such knowledge is critical to the successful integration and continued operation of the Acquired Business;
WHEREAS, Nexford is a portfolio company of Bramblewood Capital Partners, LP, a Delaware limited partnership, and operates as a diversified manufacturing platform in the industrials sector, with the acquisition of Pinnacle representing a strategic addition to Nexford's metals fabrication capabilities; and
WHEREAS, Brennan acknowledges that the consideration paid under the APA and under this Agreement constitutes adequate and sufficient consideration for the restrictive covenants contained herein and that such restrictive covenants are reasonable and necessary to protect Nexford's legitimate business interests in the goodwill, customer relationships, and other intangible assets acquired under the APA.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the APA.
(a) "Acquired Business" means the business and assets acquired by Nexford from Pinnacle pursuant to the APA, including the custom metal fabrication operations, customer contracts and relationships, supplier agreements and relationships, equipment, inventory, intellectual property, goodwill, and all other assets conveyed to Nexford at the Closing.
(b) "APA" means the Asset Purchase Agreement dated September 5, 2023, by and among Nexford, Pinnacle, and the Members, as such agreement may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
(c) "Business" means the custom metal fabrication operations formerly conducted by Pinnacle, including all operations at the Facility, all customer and supplier relationships, all fabrication processes and techniques, and all other activities related to the design, fabrication, finishing, and installation of structural steel, aluminum, and stainless-steel components for commercial construction, infrastructure, and industrial OEM customers.
(d) "Closing Date" means October 24, 2023.
(e) "Competing Business" means any business, enterprise, or activity, whether conducted by a corporation, partnership, limited liability company, sole proprietorship, joint venture, or other entity, that is engaged in custom metal fabrication, structural steel fabrication, aluminum fabrication, or stainless-steel component fabrication for commercial construction, infrastructure, or industrial OEM customers, or that otherwise competes with the Acquired Business as conducted by Nexford on or after the Closing Date. For purposes of clarity, the term "Competing Business" shall include any business that derives more than ten percent (10%) of its annual revenue from custom metal fabrication services of the type provided by the Acquired Business.
(f) "Confidential Information" means all information, whether oral, written, electronic, or otherwise, that relates to the Acquired Business, Nexford, or any of Nexford's affiliates (including Bramblewood Capital Partners, LP and its portfolio companies), including, without limitation: (i) trade secrets and proprietary data; (ii) customer lists, customer contact information, customer preferences, pricing terms, and bidding and estimating methodologies; (iii) vendor and supplier terms, pricing, and agreements, including the terms of the supply agreement with Calumet Steel Distributors Inc.; (iv) operational data, shop floor workflows, production schedules, and capacity utilization information; (v) financial information, projections, budgets, cost structures, and margin analyses; (vi) employee information, compensation data, performance evaluations, and organizational charts; (vii) proprietary fabrication processes, techniques, and specifications, including CNC plasma and laser cutting parameters, welding procedures, and quality assurance protocols; (viii) business plans, strategic plans, acquisition targets, and integration plans; (ix) information regarding pending or threatened litigation, regulatory matters, or disputes; and (x) any other information that is not generally known to the public and that derives economic value from not being generally known. Confidential Information shall not include information that: (A) is or becomes publicly available through no act or omission of Brennan in violation of this Agreement; (B) was lawfully in Brennan's possession prior to its disclosure by Nexford, as evidenced by written records predating such disclosure; or (C) is lawfully obtained by Brennan from a third party without restriction on disclosure and without breach of any obligation of confidentiality.
(g) "Effective Date" means October 24, 2023.
(h) "Facility" means the approximately 48,000 square foot fabrication facility located at 1127 Industrial Parkway, Hammond, IN 46320, which is leased by Nexford (as assignee of Pinnacle's lease) from Lakeshore Realty Partners LLC pursuant to a lease agreement expiring on December 31, 2028.
(i) "Monthly Fee" means the monthly consulting fee of Eighteen Thousand Dollars ($18,000) payable to Brennan in accordance with Section 3.1.
(j) "Restricted Period" means, with respect to the non-competition covenant set forth in Section 5.2 and the non-solicitation covenants set forth in Sections 5.3 and 5.4, the period commencing on the Effective Date and ending on the third (3rd) anniversary of the Effective Date (i.e., October 24, 2026), subject to tolling as provided in Section 5.7(c).
(k) "Restricted Territory" means the geographic area within a one hundred fifty (150) mile radius from the Facility located at 1127 Industrial Parkway, Hammond, IN 46320, which the Parties acknowledge encompasses the primary geographic markets served by the Acquired Business, including the greater Chicago metropolitan area, Northwest Indiana, portions of Southern Wisconsin, portions of Central and Southern Michigan, and portions of Central Illinois.
(l) "Services" means the transition consulting services to be provided by Brennan as described in Section 2.2 and Exhibit A attached hereto.
(m) "Term" means the twelve (12) month period commencing on the Effective Date and ending on October 24, 2024, unless earlier terminated pursuant to Article VI.
Section 1.2 Interpretation. In this Agreement, unless the context otherwise requires:
(a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not constitute a part of this Agreement or affect in any way the meaning, construction, or interpretation hereof.
(b) Words importing the singular shall include the plural and vice versa, and words importing gender shall include all genders.
(c) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" and shall not be construed to limit any general statement that they follow to the specific or similar items or matters immediately following them.
(d) References to "Articles," "Sections," "Exhibits," and "Schedules" are to the Articles, Sections, Exhibits, and Schedules of this Agreement unless otherwise specified.
(e) References to any agreement, document, or instrument shall mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms.
(f) References to "days" shall mean calendar days unless otherwise specified. If the last day for the performance of any act or the giving of any notice falls on a Saturday, Sunday, or federal holiday, such act may be performed or such notice may be given on the next succeeding business day.
(g) References to "dollars" or "$" shall mean the lawful currency of the United States of America.
(h) The word "or" shall not be exclusive.
(i) The word "person" shall include any individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, or other entity.
ARTICLE II — ENGAGEMENT AND SERVICES
Section 2.1 Engagement. Nexford hereby engages Brennan, and Brennan hereby accepts the engagement, as an independent contractor to provide transition consulting services in connection with the integration of the Acquired Business into Nexford's operations, on the terms and conditions set forth in this Agreement. The engagement of Brennan as an independent contractor is a material inducement to Nexford's consummation of the transactions contemplated by the APA, and Brennan acknowledges that Nexford would not have entered into the APA or consummated the Closing without Brennan's agreement to provide the Services described herein.
Section 2.2 Scope of Services. During the Term, Brennan shall provide the following transition consulting services (collectively, the "Services"), as further described in Exhibit A attached hereto:
(a) Customer Relationship Transition. Brennan shall assist Nexford with the orderly transition of all customer relationships of the Acquired Business, including:
(i) introducing Nexford management, including Marcus R. Haverford (CEO), Danielle K. Cho (CFO), and such other personnel as Nexford may designate, to key customers of the Acquired Business;
(ii) facilitating the transition of the relationship with Ironclad Bridge & Infrastructure Co. ("Ironclad"), the Acquired Business's largest customer, which represented approximately twenty-eight percent (28%) of Pinnacle's revenue for the twelve-month period ended September 30, 2023, including assisting with the assignment and continuation of the Master Supply Agreement between Pinnacle and Ironclad dated July 1, 2022, which extends through June 30, 2025 (the "Ironclad MSA"), and obtaining any required consents to assignment;
(iii) facilitating the transition of relationships with other significant customers, including but not limited to those customers with open purchase orders or blanket agreements as of the Closing Date;
(iv) assisting with customer backlog management, the Acquired Business having had approximately Seven Million Two Hundred Thousand Dollars ($7,200,000) in open orders at the time of signing of the APA; and
(v) participating in customer meetings, facility tours, and other customer-facing activities as reasonably requested by Nexford.
(b) Supplier Relationship Transition. Brennan shall assist Nexford with the orderly transition of all supplier relationships of the Acquired Business, including:
(i) introduction of Nexford management to key suppliers, particularly Calumet Steel Distributors Inc. ("Calumet"), the Acquired Business's primary raw material supplier, with whom Pinnacle maintained an annual volume commitment of approximately Four Million Eight Hundred Thousand Dollars ($4,800,000) under a supply agreement extending through March 31, 2025;
(ii) facilitating ongoing supply chain relationships, including relationships with secondary steel suppliers, aluminum suppliers, fastener vendors, and consumables suppliers;
(iii) assisting with the negotiation or renegotiation of supply terms as reasonably requested by Nexford; and
(iv) providing guidance on historical supplier performance, quality issues, lead times, and pricing trends.
(c) Operational Knowledge Transfer. Brennan shall provide operational and technical knowledge transfer to Nexford and its designated personnel, including:
(i) providing guidance on fabrication processes, including layout, cutting, forming, welding, finishing, painting, and quality inspection procedures;
(ii) assisting with the operation and maintenance of CNC plasma and laser cutting equipment (fourteen (14) machines in total), including programming protocols, nesting optimization, consumable management, and preventive maintenance schedules;
(iii) providing guidance on overhead bridge crane operations (two (2) cranes, each with a capacity of twenty (20) tons), including safety protocols and certification requirements;
(iv) documenting and transferring knowledge regarding shop floor workflows, production scheduling methodologies, capacity planning, and job costing practices;
(v) assisting Derek J. Kopp (retained as Plant Manager, annual base salary of $145,000) and other retained operations personnel with the transition to Nexford's management systems and reporting requirements; and
(vi) providing guidance on quality management systems, including any certifications (Meridian Technologies, AISC) and ongoing compliance requirements.
(d) Employee Transition. Brennan shall assist with the retention and integration of the Acquired Business's workforce, including:
(i) supporting the retention and integration of the seventy-one (71) employees retained by Nexford at the Closing, consisting of approximately forty-two (42) shop floor production employees, eighteen (18) field installation employees, and eleven (11) office and management personnel;
(ii) providing guidance on individual employee capabilities, performance history, skill sets, certifications, and development needs;
(iii) supporting workforce continuity and morale during the integration period;
(iv) assisting with the identification of any critical skill gaps or succession planning needs; and
(v) facilitating the introduction of Nexford's HR policies, benefit programs, and organizational structure to the retained workforce.
(e) Facility Operations. Brennan shall provide guidance on the operations at the Facility, including:
(i) the layout and utilization of the approximately 48,000 square foot fabrication space;
(ii) equipment maintenance practices and vendor service relationships;
(iii) environmental, health, and safety protocols and compliance requirements;
(iv) the terms and conditions of the facility lease with Lakeshore Realty Partners LLC, which expires on December 31, 2028; and
(v) any capital improvement projects or deferred maintenance items of which Brennan has knowledge.
(f) General Business Advisory. Brennan shall respond to reasonable inquiries from Nexford management regarding the historical operations, practices, procedures, and relationships of the Acquired Business, and shall provide such other guidance and advice as may be reasonably helpful to Nexford in operating and integrating the Acquired Business.
(g) Additional Services. Brennan shall provide such other transition services as may be reasonably requested by Nexford from time to time during the Term, provided that such services are consistent with the general nature and scope of the Services described above and do not impose an unreasonable burden on Brennan in light of the anticipated time commitment set forth in Section 2.3.
Section 2.3 Time Commitment. Brennan shall devote such time and attention as is reasonably necessary to perform the Services in a professional and thorough manner. The Parties anticipate that the Services will require approximately twenty (20) hours per week during the first six (6) months of the Term (the "Initial Period") and approximately ten (10) hours per week during the remaining six (6) months of the Term (the "Wind-Down Period"). Brennan shall make himself reasonably available during normal business hours (Monday through Friday, 7:00 a.m. to 5:00 p.m. Central Time) for telephone calls, email correspondence, video conferences, and in-person meetings. Brennan shall be available for on-site visits at the Facility as reasonably requested by Nexford, which the Parties anticipate will occur approximately two (2) to three (3) days per week during the Initial Period and approximately one (1) day per week during the Wind-Down Period. The Parties acknowledge that the foregoing time estimates are approximations and that the actual time required may vary depending on the needs of the Acquired Business and the progress of the integration.
Section 2.4 Reporting. Brennan shall report to and take direction from Marcus R. Haverford, Chief Executive Officer of Nexford, or such other person as Nexford may designate in writing from time to time. Brennan shall also coordinate with Philip M. Stanhope, General Counsel of Nexford, regarding legal and contractual matters affecting the Acquired Business, and with Danielle K. Cho, Chief Financial Officer of Nexford, regarding financial, accounting, and administrative matters affecting the Acquired Business, in each case as appropriate given the nature of the Services being provided. Brennan shall provide periodic status updates to Nexford management as reasonably requested, and shall promptly inform Nexford of any material issues, risks, or developments affecting the Acquired Business that come to Brennan's attention during the course of performing the Services.
Section 2.5 Standard of Performance. Brennan shall perform the Services in a professional, diligent, competent, and workmanlike manner, consistent with the standards and practices employed by Brennan in operating the Acquired Business prior to the Closing Date and consistent with the standard of care that would be exercised by a reasonably prudent consultant with comparable experience and expertise in the structural metals industry. Brennan shall act in good faith and in the best interests of Nexford in performing the Services and shall not take any action, or fail to take any action, that would reasonably be expected to impair the value of the Acquired Business or Nexford's relationships with customers, suppliers, employees, or other stakeholders.
ARTICLE III — COMPENSATION AND EXPENSES
Section 3.1 Monthly Fee. In consideration of Brennan's performance of the Services, Nexford shall pay Brennan a monthly consulting fee of Eighteen Thousand Dollars ($18,000) per month (the "Monthly Fee"), payable in arrears on or before the fifteenth (15th) day of each calendar month following the month in which the Services were performed. The total annualized compensation payable to Brennan under this Section 3.1, assuming the full twelve (12) month Term, is Two Hundred Sixteen Thousand Dollars ($216,000). For purposes of clarity, the Monthly Fee for the first month of the Term (October 24, 2023, through November 23, 2023) shall be the full Monthly Fee of $18,000, and the Monthly Fee for the final month of the Term shall be prorated on a per diem basis if the Term expires or is terminated on a date other than the last day of a monthly period. Payment of the Monthly Fee shall be made by wire transfer to Brennan's designated bank account, in accordance with the wire instructions provided by Brennan to Nexford and as set forth in the Form of Monthly Invoice attached hereto as Exhibit B.
Section 3.2 Expenses. Nexford shall reimburse Brennan for reasonable, documented, out-of-pocket expenses incurred by Brennan in connection with the performance of the Services, subject to the following conditions:
(a) any single expense in an amount exceeding Five Hundred Dollars ($500) shall require the prior written approval of Nexford (which approval may be given by email from Marcus R. Haverford, Danielle K. Cho, or Philip M. Stanhope);
(b) aggregate monthly expenses in an amount exceeding Two Thousand Dollars ($2,000) shall require the prior written approval of Nexford;
(c) Brennan shall submit expense reports, substantially in the form attached as part of Exhibit B, with supporting receipts and documentation, within thirty (30) days of incurring such expenses; and
(d) Nexford shall reimburse approved expenses within thirty (30) days following receipt of a complete and properly documented expense report.
Reimbursable expenses shall include, without limitation, reasonable travel expenses (mileage at the then-current IRS standard rate, tolls, and parking), meals incurred while conducting on-site Services at the Facility or attending customer or supplier meetings, and telecommunications charges directly attributable to the Services. For the avoidance of doubt, Brennan's ordinary commuting expenses to and from the Facility shall be reimbursable to the extent that Brennan's residence is more than fifty (50) miles from the Facility.
Section 3.3 No Benefits. Brennan shall not be entitled to participate in, or receive any benefits under, any employee benefit plans, programs, or arrangements of Nexford or any of its affiliates, including, without limitation, health, dental, or vision insurance, life insurance, disability insurance, retirement plans (including any 401(k) plan), pension plans, equity incentive plans, vacation or paid time off, sick leave, or any other fringe benefit or perquisite. Brennan acknowledges and agrees that the compensation provided under this Agreement is in addition to, and not in lieu of, any proceeds received by Brennan under the APA, including Brennan's sixty-five percent (65%) share of the Twenty-One Million Dollar ($21,000,000) net closing cash payment and any earnout payments that may become payable from the total earnout pool of Six Million Dollars ($6,000,000), subject to the terms and conditions of the APA.
Section 3.4 Taxes. Brennan acknowledges and agrees that he is solely responsible for the payment of all federal, state, and local income taxes, self-employment taxes (including FICA and Medicare taxes), unemployment taxes, and all other taxes, assessments, or contributions arising from the compensation paid to Brennan under this Agreement. Nexford shall not withhold any federal, state, or local income taxes, Social Security taxes, Medicare taxes, or any other taxes from the Monthly Fee or any other amounts paid to Brennan hereunder. Nexford shall issue IRS Form 1099-NEC (or any successor form) to Brennan with respect to amounts paid hereunder for each applicable calendar year, and shall file such form with the Internal Revenue Service as required by applicable law. Brennan shall indemnify and hold harmless Nexford from and against any liability, penalty, interest, or assessment arising from Brennan's failure to pay any taxes required to be paid by Brennan in connection with the compensation received under this Agreement.
Section 3.5 No Offset. Payments to Brennan under this Agreement shall not be subject to offset, deduction, counterclaim, or withholding (other than as may be required by applicable law) against any indemnification obligations of Brennan, the other Members, or Pinnacle under the APA, or under the Escrow Agreement dated October 24, 2023, among Nexford, Gerald T. Brennan (in his capacity as Seller Representative), and Commonwealth Escrow Services Inc. (the "Escrow Agent"). For the avoidance of doubt, Nexford's obligation to pay the Monthly Fee and reimburse expenses under this Agreement is independent of, and shall not be reduced by, any indemnification claims that Nexford may have or assert against Brennan or the other Members under the APA or the Escrow Agreement, and any such indemnification claims shall be resolved solely in accordance with the procedures set forth in the APA and the Escrow Agreement, as applicable.
ARTICLE IV — INDEPENDENT CONTRACTOR STATUS
Section 4.1 Independent Contractor. The Parties acknowledge and agree that Brennan is an independent contractor with respect to Nexford and is not an employee, agent, partner, or joint venturer of Nexford or any of its affiliates. Nothing in this Agreement shall be construed to create or be deemed to create an employment, agency, partnership, or joint venture relationship between Brennan and Nexford or any of Nexford's affiliates. Brennan shall be free to determine the manner and means by which the Services are performed, subject to the general direction and oversight of Nexford as provided in Section 2.4, and shall not be subject to the day-to-day supervision or control of Nexford with respect to the details of the work performed. Brennan shall be free to provide services to other persons or entities during the Term, provided that such services do not conflict with Brennan's obligations under this Agreement, including the restrictive covenants set forth in Article V, and do not interfere with Brennan's ability to perform the Services in a timely and professional manner.
Section 4.2 No Authority to Bind. Brennan shall have no authority to bind Nexford or any of its affiliates, to enter into any contracts, agreements, or commitments on behalf of Nexford or any of its affiliates, to incur any liabilities or obligations on behalf of Nexford or any of its affiliates, or to represent himself as an employee, officer, director, or authorized agent of Nexford or any of its affiliates, except as may be expressly authorized in writing by Marcus R. Haverford or another authorized officer of Nexford. Brennan shall not use any Nexford business cards, stationery, email addresses, or other materials that would suggest that Brennan is an employee or officer of Nexford, unless Nexford expressly provides such materials for use in connection with specific customer or supplier transition activities.
Section 4.3 Workers' Compensation and Insurance. Brennan shall be solely responsible for maintaining, at his own cost and expense, any and all insurance coverage that may be required by applicable law or that Brennan deems appropriate, including workers' compensation insurance (to the extent required by the laws of the State of Indiana or any other applicable jurisdiction), general liability insurance, and professional liability insurance. Nexford shall not be required to provide any insurance coverage for Brennan or to include Brennan under any of Nexford's insurance policies. Brennan shall provide Nexford with evidence of any insurance coverage maintained by Brennan upon Nexford's reasonable request.
ARTICLE V — RESTRICTIVE COVENANTS
Section 5.1 Acknowledgments. Brennan acknowledges and agrees as follows:
(a) As founder and Managing Member of Pinnacle for approximately seventeen (17) years since its formation in 2006, Brennan possesses extensive, unique, and valuable knowledge of the Acquired Business, including its trade secrets, proprietary fabrication processes and techniques, customer relationships, supplier relationships, pricing methodologies, cost structures, operational methods, competitive strategies, and the skills, capabilities, and compensation of the Acquired Business's employees. Brennan further acknowledges that such knowledge, if used in competition with Nexford, would cause substantial and irreparable harm to Nexford and the Acquired Business.
(b) The consideration paid to Brennan under the APA, including Brennan's sixty-five percent (65%) share of the Twenty-One Million Dollar ($21,000,000) net closing cash payment (representing approximately Thirteen Million Six Hundred Fifty Thousand Dollars ($13,650,000) attributable to Brennan's membership interest) plus the potential for earnout payments from a total earnout pool of Six Million Dollars ($6,000,000) (of which Brennan's sixty-five percent (65%) share would be up to Three Million Nine Hundred Thousand Dollars ($3,900,000)), together with the compensation payable to Brennan under this Agreement (up to Two Hundred Sixteen Thousand Dollars ($216,000) over the Term), constitute adequate and sufficient consideration for the restrictive covenants set forth in this Article V.
(c) The restrictive covenants set forth in this Article V are reasonable in scope, duration, and geographic extent and are necessary to protect Nexford's legitimate business interests in the goodwill, customer relationships, supplier relationships, trade secrets, confidential information, and other intangible assets acquired by Nexford under the APA. Brennan further acknowledges that the restrictions contained herein will not impose an undue hardship on Brennan or prevent Brennan from earning a livelihood, given the substantial consideration Brennan has received under the APA and this Agreement.
(d) Brennan has also entered into a separate Non-Competition and Non-Solicitation Agreement dated October 24, 2023, in favor of Nexford (the "Separate Non-Compete"), and the covenants set forth in this Article V are in addition to, and not in lieu of, the covenants contained in the Separate Non-Compete. In the event of any conflict or inconsistency between the restrictive covenants set forth in this Article V and those set forth in the Separate Non-Compete, the more restrictive provision shall govern; provided, however, that nothing in this Agreement shall be deemed to limit, narrow, or reduce the scope or duration of any restrictive covenant set forth in the Separate Non-Compete.
Section 5.2 Non-Competition.
(a) During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity, own, manage, operate, control, be employed by, consult for, render services to, participate in the ownership, management, operation, or control of, or be connected in any manner with, any Competing Business within the Restricted Territory.
(b) Passive Investment Exception. Notwithstanding the foregoing, the passive ownership by Brennan of less than two percent (2%) of the outstanding equity securities of any entity that has a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, shall not constitute a violation of this Section 5.2, provided that Brennan does not otherwise participate in the management, operations, or business activities of such entity.
(c) Reasonableness of Restrictions. The Parties acknowledge and agree that the geographic scope of the non-competition covenant (a one hundred fifty (150) mile radius from Hammond, Indiana) and the temporal scope of the non-competition covenant (three (3) years from the Effective Date) are reasonable and appropriate given the regional nature of the Acquired Business, the geographic distribution of the Acquired Business's customer base, the Midwest infrastructure and commercial construction end-markets served by the Acquired Business, and the length of the typical customer relationship and project cycle in the structural metals industry. The Parties further acknowledge that the scope of the Competing Business definition is appropriately tailored to the specific types of custom metal fabrication activities conducted by the Acquired Business and does not extend to unrelated manufacturing or industrial activities.
Section 5.3 Non-Solicitation of Customers. During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity, solicit, divert, or take away, or attempt to solicit, divert, or take away, the business or patronage of any customer or prospective customer of the Acquired Business with whom Brennan had a material relationship, or about whom Brennan obtained Confidential Information, during the two (2) year period preceding the Closing Date. For purposes of clarity, this covenant shall apply to, without limitation, Ironclad Bridge & Infrastructure Co. and all customers included in the customer list delivered by Pinnacle to Nexford at the Closing pursuant to Schedule 4.16 of the APA. For purposes of this Section 5.3, a "prospective customer" means any person or entity with whom Pinnacle or Brennan had substantive discussions or negotiations regarding the provision of custom metal fabrication services during the twelve (12) month period preceding the Closing Date.
Section 5.4 Non-Solicitation of Employees. During the Restricted Period (commencing on the Effective Date, October 24, 2023, and ending on October 24, 2026, a period of three (3) years), Brennan shall not, directly or indirectly, whether individually or through any corporation, limited liability company, partnership, joint venture, trust, or other entity:
(a) solicit, recruit, hire, or engage, or attempt to solicit, recruit, hire, or engage, any employee, independent contractor, or consultant of Nexford or the Acquired Business, including, without limitation, the seventy-one (71) employees retained by Nexford at the Closing and Derek J. Kopp (retained as Plant Manager), to terminate or reduce such person's employment or engagement with Nexford or any of its affiliates; or
(b) encourage, induce, or assist any employee, independent contractor, or consultant of Nexford or the Acquired Business to leave the employment or engagement of Nexford or any of its affiliates, or to accept employment or engagement with any other person or entity.
General Advertising Exception. Notwithstanding the foregoing, general advertisements or solicitations (including postings on job boards, social media platforms, or in trade publications) that are not specifically targeted at, or directed to, employees, independent contractors, or consultants of Nexford or the Acquired Business shall not constitute a violation of this Section 5.4; provided, however, that this exception shall not apply to any situation in which Brennan directs, encourages, or facilitates the response of a specific Nexford employee to such general advertisement or solicitation.
Section 5.5 Confidentiality.
(a) Non-Disclosure Obligation. Brennan shall not, during the Term or at any time thereafter (without temporal limitation), directly or indirectly, disclose, use, copy, publish, distribute, or otherwise exploit any Confidential Information of the Acquired Business, Nexford, or any of Nexford's affiliates, except as expressly required in the course of performing the Services under this Agreement or as expressly authorized in writing by Nexford.
(b) Exceptions. The obligations of confidentiality set forth in this Section 5.5 shall not apply to information that:
(i) is or becomes generally available to the public through no act or omission of Brennan in violation of this Agreement or any other obligation of confidentiality owed by Brennan;
(ii) is independently developed by Brennan after the Effective Date without the use of, or reference to, any Confidential Information, as established by contemporaneous written documentation; or
(iii) is required to be disclosed by applicable law, regulation, governmental order, subpoena, or court order of competent jurisdiction; provided that, to the extent legally permissible, Brennan shall give Nexford prompt written notice of any such requirement prior to making any disclosure, shall disclose only such information as is legally required, and shall cooperate with Nexford in seeking a protective order, confidential treatment, or other appropriate remedy to limit the scope of such disclosure.
(c) Return of Confidential Information. Upon the expiration or termination of this Agreement, or at any time upon the written request of Nexford, Brennan shall promptly return to Nexford, or at Nexford's option, destroy, all documents, files, records, data, materials, and other items in Brennan's possession or control that contain or embody Confidential Information, including all copies, summaries, notes, extracts, and compilations thereof, whether in physical, electronic, or other form. Upon Nexford's request, Brennan shall provide a written certification of compliance with this Section 5.5(c), signed under penalty of perjury.
Section 5.6 intellectual Property. Any and all work product, inventions, discoveries, developments, improvements, designs, specifications, processes, techniques, documentation, reports, analyses, or other materials (collectively, "Work Product") created, conceived, developed, or reduced to practice by Brennan, whether alone or jointly with others, in the course of performing the Services under this Agreement shall be the sole and exclusive property of Nexford. Brennan hereby irrevocably assigns to Nexford all right, title, and interest in and to such Work Product, including all intellectual property rights therein (including patents, copyrights, trade secrets, and trademarks). Brennan shall execute all documents and take all actions reasonably necessary to effectuate, evidence, or perfect such assignment, including the execution of patent applications, copyright registrations, and assignments. The Parties acknowledge that the "Pinnacle" and "Pinnacle Metal Fabricators" trade names and all associated trademarks, service marks, domain names, and other intellectual property were transferred to Nexford under the APA, and Brennan shall not use, register, or apply to register any such name, mark, or any confusingly similar name or mark during or after the Term.
Section 5.7 Remedies.
(a) Irreparable Harm. Brennan acknowledges and agrees that a breach or threatened breach of any of the restrictive covenants set forth in this Article V would cause irreparable harm to Nexford and the Acquired Business for which monetary damages alone would be an inadequate remedy. Brennan further acknowledges that the harm resulting from such a breach would be difficult or impossible to quantify.
(b) Equitable Relief. In the event of a breach or threatened breach of any provision of this Article V, Nexford shall be entitled to seek and obtain, from any court of competent jurisdiction, temporary, preliminary, and permanent injunctive relief, specific performance, and any other equitable remedies, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages, posting a bond or other security, or showing that monetary damages would be an inadequate remedy. The exercise of any remedy under this Section 5.7(b) shall not preclude Nexford from pursuing any other remedy to which it may be entitled, including monetary damages.
(c) Tolling. If Brennan violates any non-competition or non-solicitation covenant set forth in this Article V, the Restricted Period applicable to such covenant shall be automatically tolled and suspended during the period of such violation and shall resume running upon the cessation of such violation, such that Nexford receives the full benefit of the agreed-upon Restricted Period.
(d) Blue-Pencil Reformation. If any court of competent jurisdiction determines that any restrictive covenant set forth in this Article V is unenforceable as written by reason of its scope, duration, geographic extent, or otherwise, the Parties agree that such court shall have the power and authority to reform, modify, or "blue-pencil" such covenant to the maximum scope, shortest duration, or smallest geographic extent that would be enforceable under applicable law, and such covenant as so reformed shall be enforceable as though the original, broader covenant had never existed. The Parties intend that the restrictive covenants in this Article V be enforced to the fullest extent permitted by law.
ARTICLE VI — TERM AND TERMINATION
Section 6.1 Term. This Agreement shall commence on the Effective Date (October 24, 2023) and shall continue in full force and effect for a period of twelve (12) months, ending on October 24, 2024 (the "Term"), unless earlier terminated in accordance with the provisions of this Article VI. The Term shall not automatically renew or extend; any extension of the Term shall require a written amendment signed by both Parties.
Section 6.2 Termination by Nexford for Cause. Nexford may terminate this Agreement immediately upon written notice to Brennan if any of the following events occurs:
(a) Brennan materially breaches any provision of this Agreement and fails to cure such breach within fifteen (15) days after receiving written notice from Nexford specifying the nature of the breach and the actions required to cure it; provided that if such breach is not capable of cure, Nexford may terminate this Agreement immediately upon written notice;
(b) Brennan commits fraud, willful misconduct, or gross negligence in connection with the performance of the Services or in his dealings with Nexford, its affiliates, customers, suppliers, employees, or other stakeholders;
(c) Brennan breaches any restrictive covenant set forth in Article V of this Agreement, which breach shall be deemed incurable and shall entitle Nexford to immediate termination without any notice or cure period;
(d) Brennan is convicted of, or pleads guilty or nolo contendere to, any felony or any crime involving moral turpitude, dishonesty, fraud, theft, embezzlement, or misappropriation; or
(e) Brennan becomes legally incapacitated or unable to perform the Services for a period exceeding sixty (60) consecutive days due to death, disability, or incapacity.
In the event of termination for cause under this Section 6.2, Nexford shall pay Brennan any accrued and unpaid Monthly Fee and unreimbursed expenses through the effective date of termination, but shall have no further payment obligations under this Agreement (other than with respect to surviving obligations).
Section 6.3 Termination by Nexford Without Cause. Nexford may terminate this Agreement without cause, for any reason or no reason, upon thirty (30) days' prior written notice to Brennan. In the event of such termination, Nexford shall pay Brennan the Monthly Fee through the effective date of termination, plus any accrued but unpaid Monthly Fee and properly documented unreimbursed expenses incurred prior to the effective date of termination, and the termination payment set forth in Section 6.6.
Section 6.4 Termination by Brennan. Brennan may terminate this Agreement upon sixty (60) days' prior written notice to Nexford if Nexford fails to pay any undisputed amounts owed to Brennan under this Agreement within thirty (30) days after the date such amounts are due and payable and such failure to pay continues for a period of fifteen (15) days after Brennan delivers written notice to Nexford specifying the amounts that are past due and demanding payment. For the avoidance of doubt, amounts that are subject to a good-faith dispute by Nexford shall not constitute "undisputed amounts" for purposes of this Section 6.4, and Brennan may not terminate this Agreement on account of Nexford's failure to pay disputed amounts.
Section 6.5 Effect of Termination.
(a) Upon the termination or expiration of this Agreement for any reason, all rights and obligations of the Parties under this Agreement shall cease, except that:
(i) the restrictive covenants set forth in Article V (including the non-competition covenant in Section 5.2, the non-solicitation of customers covenant in Section 5.3, the non-solicitation of employees covenant in Section 5.4, and the intellectual property provisions of Section 5.6) shall survive for their full stated duration (through October 24, 2026, in the case of the non-competition and non-solicitation covenants), regardless of the reason for or timing of such termination or expiration;
(ii) the confidentiality obligations set forth in Section 5.5 shall survive the termination or expiration of this Agreement indefinitely and without temporal limitation;
(iii) the indemnification obligations set forth in Article VIII shall survive the termination or expiration of this Agreement in accordance with their terms;
(iv) any accrued and unpaid Monthly Fee and properly documented unreimbursed expenses shall remain payable in accordance with the terms of this Agreement; and
(v) the provisions of Article IX (Limitation of Liability) and Article X (Miscellaneous) shall survive the termination or expiration of this Agreement in accordance with their terms.
(b) For the avoidance of doubt, the non-competition covenant (which runs for a period of three (3) years through October 24, 2026) and the non-solicitation covenants (which also run for a period of three (3) years through October 24, 2026) commence on the Effective Date and are measured from the Effective Date. The duration of such covenants is not affected by, and shall not be reduced or shortened as a result of, any early termination of the consulting engagement under this Article VI, whether by Nexford or by Brennan, and whether for cause, without cause, or otherwise.
Section 6.6 Acceleration of Fees. If Nexford terminates this Agreement without cause under Section 6.3 prior to the expiration of the Term, then, in addition to the amounts payable to Brennan through the effective date of termination as set forth in Section 6.3, Nexford shall pay Brennan a lump sum termination payment equal to three (3) months of the Monthly Fee, in the aggregate amount of Fifty-Four Thousand Dollars ($54,000) (the "Termination Payment"). The Termination Payment shall be paid within thirty (30) days following the effective date of termination and shall be in full satisfaction of any and all further obligations of Nexford under this Agreement (other than surviving obligations as set forth in Section 6.5), including any claims for lost consulting fees for the remainder of the Term. As a condition to receiving the Termination Payment, Brennan shall execute and deliver to Nexford a general release of claims in a form reasonably satisfactory to Nexford, releasing Nexford, its affiliates, and their respective officers, directors, employees, agents, and representatives from any and all claims relating to or arising from this Agreement (other than claims with respect to surviving obligations).
ARTICLE VII — REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of Brennan. Brennan hereby represents and warrants to Nexford as follows:
(a) Capacity and Authority. Brennan has full legal capacity, right, and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Brennan and constitutes the legal, valid, and binding obligation of Brennan, enforceable against Brennan in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject to general equitable principles.
(b) No Conflicts. The execution, delivery, and performance of this Agreement by Brennan do not and will not (i) conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or other obligation to which Brennan is a party or by which Brennan or any of his assets are bound, other than the APA, the Non-Competition and Non-Solicitation Agreement dated October 24, 2023, and the Escrow Agreement dated October 24, 2023, each of which has been entered into in connection with the transactions contemplated by the APA, or (ii) violate any applicable law, rule, regulation, or order of any governmental authority.
(c) No Restrictive Covenants. Brennan is not a party to, or bound by, any non-competition agreement, non-solicitation agreement, confidentiality agreement, or other restrictive covenant (other than those entered into in connection with the APA and this Agreement) that would impair or restrict Brennan's ability to perform the Services or to comply with the terms and conditions of this Agreement.
(d) Compliance with Laws. Brennan shall comply with all applicable federal, state, and local laws, rules, regulations, ordinances, and orders in performing the Services, including all applicable tax laws, employment and labor laws, workplace safety laws, and environmental laws.
(e) Accuracy of Information. All information provided by Brennan to Nexford in connection with the negotiation and execution of this Agreement is true, accurate, and complete in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading.
Section 7.2 Representations and Warranties of Nexford. Nexford hereby represents and warrants to Brennan as follows:
(a) Organization and Good Standing. Nexford is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as presently conducted.
(b) Corporate Authority. Nexford has full corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Nexford have been duly authorized by all necessary corporate action on the part of Nexford, including all requisite approvals of its board of directors and stockholders (to the extent required). This Agreement has been duly executed and delivered by Nexford and constitutes the legal, valid, and binding obligation of Nexford, enforceable against Nexford in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and subject to general equitable principles.
(c) No Conflicts. The execution, delivery, and performance of this Agreement by Nexford do not and will not (i) conflict with or violate the certificate of incorporation, bylaws, or other organizational documents of Nexford, (ii) conflict with, result in a breach or violation of, or constitute a default under, any agreement, contract, instrument, order, judgment, decree, or other obligation to which Nexford is a party or by which Nexford or any of its assets are bound, or (iii) violate any applicable law, rule, regulation, or order of any governmental authority.
ARTICLE VIII — INDEMNIFICATION
Section 8.1 Indemnification by Brennan. Brennan shall indemnify, defend, and hold harmless Nexford and its affiliates (including Bramblewood Capital Partners, LP and its affiliates), and their respective officers, directors, managers, employees, agents, successors, and assigns (collectively, the "Nexford Indemnitees"), from and against any and all losses, damages, liabilities, claims, demands, actions, suits, proceedings, costs, and expenses (including reasonable attorneys' fees and costs of investigation) (collectively, "Losses") arising out of, resulting from, or relating to:
(a) any breach or alleged breach by Brennan of any representation, warranty, covenant, or obligation of Brennan under this Agreement;
(b) any gross negligence or willful misconduct of Brennan in the performance of the Services or in connection with this Agreement; or
(c) any claim by any governmental authority, employee, or other third party that Brennan is or was an employee of Nexford for purposes of federal, state, or local tax laws, employment laws, benefit plan laws, or any other applicable law, and any resulting liability of Nexford for employment taxes, benefit contributions, penalties, interest, or other amounts.
Section 8.2 Indemnification by Nexford. Nexford shall indemnify, defend, and hold harmless Brennan and his heirs, executors, administrators, and legal representatives (collectively, the "Brennan Indemnitees") from and against any and all Losses arising out of, resulting from, or relating to:
(a) any breach or alleged breach by Nexford of any representation, warranty, covenant, or obligation of Nexford under this Agreement; or
(b) Brennan's performance of the Services under this Agreement, to the extent that such Losses are not caused by or attributable to Brennan's breach of this Agreement, gross negligence, or willful misconduct.
Section 8.3 Relationship to APA Indemnification. The indemnification obligations set forth in this Article VIII are separate from, independent of, and in addition to, the indemnification obligations of Brennan and the other Members under Article X of the APA. For reference and clarity, the indemnification provisions of the APA include, among other terms: (i) an aggregate indemnification cap of Nine Million Dollars ($9,000,000), representing thirty percent (30%) of the Thirty Million Dollar ($30,000,000) total Purchase Price (consisting of the Twenty-One Million Dollar ($21,000,000) net closing cash payment plus the Six Million Dollar ($6,000,000) earnout pool plus Three Million Dollars ($3,000,000) held in escrow); (ii) a tipping basket of Three Hundred Thousand Dollars ($300,000), below which no indemnification claims may be made; (iii) a de minimis threshold of Twenty-Five Thousand Dollars ($25,000) per individual claim, below which such claim shall not count toward the tipping basket; (iv) an eighteen (18) month survival period for representations and warranties (other than fundamental representations, which survive for thirty-six (36) months); and (v) a Three Million Dollar ($3,000,000) indemnification escrow held by Commonwealth Escrow Services Inc. as Escrow Agent. Nothing in this Agreement shall be construed to modify, limit, or otherwise affect the indemnification provisions of the APA, and any indemnification claims under the APA shall be governed solely by the terms and conditions set forth therein.
ARTICLE IX — LIMITATION OF LIABILITY
Section 9.1 Limitation of Aggregate Liability. Except in the case of fraud, willful misconduct, or breach of Article V (Restrictive Covenants), Brennan's aggregate liability under this Agreement for any and all claims, whether based on contract, tort, strict liability, or any other theory, shall not exceed the total fees paid or payable to Brennan under this Agreement, which amount is Two Hundred Sixteen Thousand Dollars ($216,000) (assuming the full twelve (12) month Term). For the avoidance of doubt, this limitation shall not apply to, and shall not limit, Brennan's liability for (a) fraud or intentional misrepresentation, (b) willful misconduct, (c) breach of any restrictive covenant set forth in Article V, or (d) Brennan's indemnification obligations under Section 8.1(c) with respect to claims regarding Brennan's independent contractor status.
Section 9.2 Consequential Damages. Except in the case of a breach of Article V (Restrictive Covenants), neither Party shall be liable to the other Party for any consequential, indirect, incidental, special, exemplary, or punitive damages of any nature arising out of or related to this Agreement, including, without limitation, loss of revenue, loss of profits, loss of business opportunity, or diminution in value, regardless of whether such damages are based on contract, tort, strict liability, or any other theory, and regardless of whether such Party has been advised of the possibility of such damages. The foregoing limitation shall not apply to Nexford's damages arising from Brennan's breach of Article V, for which Nexford shall be entitled to recover all damages available at law or in equity, including consequential, indirect, and incidental damages.
ARTICLE X — MISCELLANEOUS
Section 10.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any choice-of-law or conflicts-of-law provisions or rules (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Each Party irrevocably submits to the jurisdiction of the federal and state courts located in the State of New York for any action arising out of or relating to this Agreement, and each Party irrevocably waives any objection to venue in such courts.
Section 10.2 Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof (each, a "Dispute"), shall be resolved as follows:
(a) Negotiation. The Parties shall first attempt to resolve the Dispute through good-faith negotiation. Either Party may initiate negotiation by delivering written notice to the other Party describing the Dispute in reasonable detail (a "Dispute Notice"). The Parties shall use commercially reasonable efforts to resolve the Dispute within thirty (30) days following delivery of the Dispute Notice, including, if appropriate, meetings between senior executives of each Party with authority to resolve the matter.
(b) Binding Arbitration. If the Dispute is not resolved through negotiation within the thirty (30) day period specified in Section 10.2(a), either Party may submit the Dispute to final and binding arbitration administered by JAMS (or, if JAMS is unavailable, another nationally recognized arbitration organization mutually agreed upon by the Parties) in Chicago, Illinois, in accordance with the then-current JAMS Comprehensive Arbitration Rules and Procedures. The arbitration shall be conducted by a single arbitrator selected in accordance with the applicable rules of the administering organization. The arbitrator shall have the authority to award any

TRANSITION SERVICES AGREEMENT

NEXFORD INDUSTRIAL HOLDINGS INC.

GERALD T. BRENNAN

TRANSITION SERVICES AGREEMENT

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