Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the employee and benefits transition issues arising from Crestline Packaging Solutions LLC's ("CPS" or "Buyer") proposed acquisition of substantially all of the assets of Allegheny Valley Packaging, Inc. ("AVP" or "Seller") for a purchase price of $180,000,000, pursuant to the Asset Purchase Agreement currently under negotiation (the "APA"). This memor

1. Offer of Employment to Substantially All AVP Employees. CPS intends to extend offers of employment to substantially all of AVP's approximately 340 employees, effective as of the Closing Date, and the APA should be drafted to reflect this commitment while preserving CPS's flexibility on terms and conditions of employment.

2. Assumption of the Collective Bargaining Agreement with International Paperworkers Union Local 814. CPS will expressly assume the CBA as an Assumed Contract under the APA, binding CPS to its terms through the March 31, 2027 expiration date. This memorandum analyzes the successorship doctrine under federal labor law and the practical implications of CPS's assumption of the CBA.

3. Non-Assumption of AVP's 401(k) Plan. CPS will not assume the Allegheny Valley Packaging 401(k) Profit Sharing Plan. This memorandum addresses the rollover and distribution issues that will arise for transitioning employees, as well as fiduciary and compliance considerations.

4. WARN Act Compliance. Both the federal Worker Adjustment and Retraining Notification Act and the Pennsylvania Worker Notification Act impose notice requirements in connection with plant closings and mass layoffs. This memorandum analyzes the applicability of these statutes to the proposed transaction and recommends strategies to avoid triggering notice obligations.

5. Treatment of Underfunded Pension Obligations. AVP has underfunded pension obligations estimated at approximately $3,100,000. These obligations will be treated as an Excluded Liability under the APA, and this memorandum addresses the controlled group, ERISA, and PBGC considerations relevant to this treatment.

6. Union Notification and Successorship Requirements. This memorandum analyzes the legal requirements for notifying the International Paperworkers Union Local 814 of the transaction and CPS's obligations as a successor employer. Buyer's counsel in this transaction is Calderwood & Harkness LLP, with Harrison Wexford serving as the Responsible Partner. Seller's counsel is Broadmoor Strauss & Kline LLP, with Nathan R. F

II. Overview of AVP's Workforce A. Employee Census Based on information provided by AVP during the due diligence process, including employee census data, organizational charts, and payroll records, AVP currently employs approximately 340 individuals across its two western Pennsylvania facilities. The workforce is distributed as follows: • Butler Facility (250 Industrial Boulevard, Butler, PA 16001): Approximately 290

III. Crestline's Plan to Extend Offers of Employment A. General Approach Under the terms of the APA, CPS intends to extend offers of employment to substantially all of AVP's approximately 340 employees, with employment offers to be effective as of the Closing Date (currently estimated to be July 31, 2025). The APA will define "Transferred Employees" as those AVP employees who receive and accept offers of employment f

IV. Collective Bargaining Agreement — International Paperworkers Union Local 814 A. Overview of the CBA AVP is a party to a Collective Bargaining Agreement with the International Paperworkers Union Local 814 (the "CBA"). The key terms of the CBA, based on the information obtained during due diligence to date, are summarized as follows: • Parties: Allegheny Valley Packaging, Inc. and International Paperworkers Union L

V. Employee Benefit Plans — Non-Assumption of 401(k) Plan A. AVP's 401(k) Plan AVP sponsors a 401(k) retirement savings plan known as the Allegheny Valley Packaging 401(k) Profit Sharing Plan (the "AVP 401(k) Plan"). The plan is administered by Patriot Plan Administrators LLC, a third-party administrator. Based on information obtained during due diligence, the AVP 401(k) Plan covers eligible AVP employees, including

VI. WARN Act Analysis A. Federal WARN Act (Worker Adjustment and Retraining Notification Act) The federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§2101-2109 (the "WARN Act"), applies to employers with 100 or more employees. The WARN Act requires covered employers to provide at least 60 days' advance written notice to affected employees, their union representatives, and specified state and local

1. Seller's Covenant. AVP should covenant to comply with all WARN Act obligations for any pre-closing or closing-related employment losses, including providing any required 60-day notice to affected employees, their union representatives, and applicable state and local government officials.

2. Buyer's Covenant. CPS should covenant to extend offers of employment to substantially all AVP employees, effective as of the Closing Date, thereby minimizing the number of employees who experience an employment loss in connection with the transaction.

3. Indemnification. AVP should indemnify CPS for any WARN Act liability arising from AVP's failure to provide required notices in connection with the transaction. Conversely, CPS should indemnify AVP for any WARN Act liability arising from CPS's failure to extend offers as contemplated by the APA. If CPS causes post-closing layoffs at either the Butler or Meadville facility within the WARN Act's 90-day look-back and

1. CPS should make employment offers effective as of the Closing Date with no gap in employment. The offer letters should clearly state that employment with CPS commences immediately upon the closing.

2. The APA should include mutual WARN Act indemnification provisions, with each party indemnifying the other for WARN Act liability arising from that party's acts or omissions.

3. CPS and AVP should coordinate pre-closing employee communications to minimize confusion and employee attrition during the period between signing and closing. Clear and timely communication with employees regarding the transaction, the offer of employment, and the continuation of benefits can help reduce the risk that employees voluntarily resign before the closing.

4. CPS should avoid implementing any post-closing layoffs or workforce reductions at the Butler or Meadville facilities within the 90-day aggregation period following the Closing Date, unless the requirements of the WARN Act (including the 60-day notice obligation) are satisfied.

5. The Pennsylvania mini-WARN Act analysis should be completed prior to APA execution to confirm that all applicable state-law requirements are satisfied.

VII. Underfunded Pension Obligations A. Nature of the Obligation During the course of financial due diligence, Hargrove Thornton LLP (Steven M. Raines, Engagement Partner) identified that AVP has underfunded pension obligations estimated at approximately $3,100,000. The specific nature of the pension plan giving rise to this underfunding — whether it is a single-employer defined benefit plan, a multiemployer plan, or

VIII. Union Notification and Successorship Requirements A. Legal Requirements for Union Notification As discussed in Section IV.B above, under the NLRA, a successor employer that hires a majority of the predecessor's bargaining unit employees is obligated to recognize the incumbent union and bargain in good faith. Because CPS is expressly assuming the CBA with International Paperworkers Union Local 814, formal recogn