Contract analysis

I. EXECUTIVE SUMMARY This memorandum summarizes the environmental risks identified in connection with the proposed acquisition by Crestline Packaging Solutions LLC ("CPS" or "Buyer") of substantially all of the assets of Allegheny Valley Packaging, Inc. ("AVP" or "Seller") for a purchase price of $180,000,000 (the "Transaction"). AVP is a Pennsylvania S-corporation headquartered in Butler, Pennsylvania. The Transacti

II. SCOPE OF ENVIRONMENTAL DILIGENCE A. Diligence Materials Reviewed In preparing this memorandum, we reviewed the following materials and information sources in connection with our assessment of the environmental risks associated with the Transaction:

1. Phase I Environmental Site Assessment — Butler Property, prepared by Greenvale Environmental Sciences LLC in accordance with ASTM E1527-21, delivered May 5, 2025.

2. Phase I Environmental Site Assessment — Meadville Property, prepared by Greenvale Environmental Sciences LLC in accordance with ASTM E1527-21, delivered May 5, 2025.

3. Phase II Environmental Site Assessment — Butler Property, commenced May 12, 2025 by Greenvale Environmental Sciences LLC in accordance with ASTM E1903-19. Preliminary analytical results have been received and reviewed; the final Phase II report remains pending as of the date of this memorandum.

4. AVP Environmental Permit Files and Regulatory Correspondence, including correspondence with the Pennsylvania Department of Environmental Protection ("PA DEP") regarding air emissions, stormwater management, and hazardous waste generator status at both the Butler and Meadville facilities.

5. PA DEP Title V Operating Permit No. TV-10-00287 — the operating air emissions permit for the Butler facility, including all amendments, modifications, and compliance certifications on file.

6. PA DEP General Permit GP-3 — the general air emissions permit applicable to the Meadville facility.

7. AVP Internal Environmental Compliance Records and Historical Waste Manifests, as made available in the virtual data room established by Seller in connection with the Transaction (Data Room Index: Environmental, Folders E-001 through E-047).

8. Seller's Disclosure Schedules (environmental representations), as set forth in the most recent draft of the APA circulated on May 20, 2025.

9. Discussions with Diane L. Pulaski, Controller of AVP, conducted via telephone on May 9, 2025 and May 16, 2025, regarding financial aspects of environmental compliance expenditures and historical capital improvements at both facilities.

10. Discussions with Michael G. Horvath, Vice President of Operations of AVP, conducted in person during the site visit on May 10, 2025 and via telephone on May 18, 2025, regarding site history, historical chemical usage, waste management practices, and operational processes at both the Butler and Meadville facilities. We note that our review is limited to the materials listed above and the information provided by Se

1. Butler Plant. The Butler Plant is AVP's principal manufacturing facility and represents the largest and most operationally significant asset to be acquired in the Transaction. The facility encompasses multiple production lines for corrugated container manufacturing, folding carton production, and specialty packaging applications, including chemical-resistant coatings and food-grade packaging materials. The facilit

2. Meadville Plant. The Meadville Plant serves as AVP's secondary manufacturing facility and supports overflow production and certain specialized packaging lines. The facility was purpose-built in the late 1990s as a modern packaging manufacturing plant and has a relatively straightforward operational and environmental history. The site is bordered by commercial and light industrial properties and is served by munici

III. PHASE I ESA FINDINGS A. Butler Property — Phase I ESA The Phase I ESA for the Butler property was completed and delivered by Greenvale on May 5, 2025. The assessment was conducted in accordance with ASTM E1527-21 and included a review of historical records, regulatory databases, aerial photographs, topographic maps, city directories, Trelwick fire insurance maps, interviews with site personnel and local official

1. Recognized Environmental Condition (REC). Greenvale identified one Recognized Environmental Condition at the Butler property. As defined by ASTM E1527-21, a REC is the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (i) due to a release to the environment; (ii) under conditions indicative of a release to the environment; or (iii) under conditions that pose a

2. Other Findings — Butler. Beyond the single REC described above, Greenvale's Phase I ESA for the Butler property yielded the following additional findings: No Additional RECs, CRECs, or HRECs. No additional Recognized Environmental Conditions, Controlled Recognized Environmental Conditions ("CRECs"), or Historical Recognized Environmental Conditions ("HRECs") were identified at the Butler property. A CREC, as defin

1. No RECs Identified. Greenvale concluded that no Recognized Environmental Conditions, Controlled Recognized Environmental Conditions, or Historical Recognized Environmental Conditions were identified at the Meadville property. The basis for this conclusion is summarized as follows: Site History. The Meadville property has a relatively straightforward operational and environmental history. The facility was construct

IV. PHASE II ESA FINDINGS — BUTLER PROPERTY A. Scope of Phase II Investigation Following Greenvale's identification of the REC at the northeast corner of the Butler property in the Phase I ESA, CPS authorized Greenvale to proceed with a Phase II Environmental Site Assessment at the Butler property. The Phase II ESA was commenced on May 12, 2025 and is being conducted in accordance with ASTM E1903-19 (Standard Practic

V. ENVIRONMENTAL PERMITS — TRANSFER AND RE-ISSUANCE A. Butler Facility — PA DEP Title V Operating Permit (TV-10-00287) The Butler facility holds a PA DEP Title V Operating Permit, Permit No. TV-10-00287, issued under the federal Clean Air Act (42 U.S.C. §§ 7401–7671q) and Pennsylvania's Air Pollution Control Act (35 P.S. §§ 4001–4015). Title V permits are required for "major sources" of air pollution that emit or hav

VI. CONTRACTUAL PROTECTIONS IN THE APA A. Environmental Representations and Warranties The APA, as currently drafted, includes detailed environmental representations and warranties made by Seller in favor of Buyer. These representations are set forth in Article IV of the APA and include, among others, the following: (a) A representation that AVP is and has been in compliance in all material respects with all applicab

VII. R&W INSURANCE CONSIDERATIONS A. Policy Overview In connection with the Transaction, CPS has obtained a representations and warranties insurance ("R&W") policy to provide additional protection against losses arising from breaches of Seller's representations and warranties in the APA. The key terms of the R&W policy are summarized below: The R&W policy is structured as a buy-side policy, meaning that CPS (as the i

VIII. RISK ASSESSMENT SUMMARY A. Butler Property — Risk Level: Moderate The environmental risk associated with the Butler property is assessed as moderate. This assessment is based on the following factors: Confirmed Contamination. The TCE contamination at 12 ppb in shallow groundwater (exceeding the 5 ppb PA Act 2 MSC standard by a factor of 2.4) constitutes a confirmed environmental condition that will require reme