Contract analysis

I. EXECUTIVE SUMMARY Calderwood & Harkness LLP ("C&H") has reviewed the Phase I Environmental Site Assessment ("Phase I ESA") prepared by TerraVerde Environmental Consulting LLC ("TerraVerde") for the Clarksburg Resin Blending Facility (the "Clarksburg Facility" or the "Property") located at 1875 Route 50 West, Clarksburg, Harrison County, West Virginia 26301. The Phase I ESA is dated August 22, 2022, and was prepare

II. PURPOSE AND SCOPE OF REVIEW Purpose The purpose of this memorandum is to provide Crestline with a legal analysis of TerraVerde's Phase I ESA findings for the Clarksburg Facility in the context of the proposed stock acquisition of ACC. The memorandum is intended to assist Crestline's transaction team, including Briarwood Capital Partners LP as sponsor, in evaluating the environmental risk profile of the Clarksburg

III. PROPERTY DESCRIPTION A. Property Identification The Property that is the subject of TerraVerde's Phase I ESA is identified as follows: The Property is situated along the south side of U.S. Route 50 (Appalachian Highway / West Pike Street) in a commercial/industrial corridor west of the City of Clarksburg. The surrounding area is characterized by a mix of light industrial, commercial, and transportation-related l

IV. SITE HISTORY AND PRIOR USE TerraVerde's Phase I ESA included a historical use review of the Property based on Trelwick fire insurance maps, aerial photographs, city directories, building department records, and regulatory database searches. C&H has reviewed TerraVerde's historical findings, which are summarized below. A. Pre-ACC Use (1968–2012) Prior to ACC's occupancy, the Property was operated as a trucking ter

V. PHASE I ESA FINDINGS TerraVerde's Phase I ESA identified one Controlled Recognized Environmental Condition (CREC) and one Recognized Environmental Condition (REC) at the Property. No Historical Recognized Environmental Conditions (HRECs) were identified. The following sections present C&H's detailed analysis of each finding. A. Controlled Recognized Environmental Condition (CREC) CREC-1: Residual Diesel-Range Orga

VI. REGULATORY COMPLIANCE STATUS C&H has reviewed TerraVerde's summary of the regulatory compliance status of the Clarksburg Facility. The following is a detailed analysis of the facility's regulatory standing under applicable federal and state environmental programs. A. RCRA The Clarksburg Facility operates as a Conditionally Exempt Small Quantity Generator ("CESQG") under RCRA, 42 U.S.C. § 6901 et seq., and the cor

VII. LEASE ENVIRONMENTAL PROVISIONS ANALYSIS The environmental provisions of the lease between Mountainview Properties LLC and ACC are material to the allocation of environmental liability at the Clarksburg Facility. C&H has reviewed the relevant provisions of the lease (excerpts attached as Appendix D) and provides the following analysis. A. Overview of Lease Terms The lease is a standard commercial/industrial tripl

Section 12.4 of the lease contains an express provision requiring the tenant (ACC) to remediate any contamination caused by the tenant's operations at the premises. The relevant language provides, in pertinent part: "Tenant shall be solely responsible for, and shall indemnify, defend, and hold harmless Landlord from and against, any and all costs, expenses, liabilities, losses, damages, and claims arising from or rel

Section 8.2 of the lease requires the tenant to obtain the landlord's prior written consent before conducting any invasive investigation, testing, boring, drilling, or excavation on the premises. This provision applies to the Phase II subsurface investigation that C&H recommends in Section IX.A below. C&H recommends that formal landlord consent be obtained from Mountainview Properties LLC (Gerald Boothe, Managing Mem

VIII. ESTIMATED POTENTIAL ENVIRONMENTAL LIABILITIES A. Remediation Cost Estimates (Preliminary — Subject to Phase II Confirmation) TerraVerde has provided preliminary remediation cost estimates for the Clarksburg Facility, contingent upon Phase II confirmation of subsurface contamination. These estimates are based on TerraVerde's professional experience with similar facilities and contamination scenarios in the West

IX. RECOMMENDATIONS Based on C&H's review of TerraVerde's Phase I ESA and the analysis set forth in this memorandum, C&H recommends the following actions in connection with the proposed acquisition of ACC. A. Phase II Environmental Site Assessment C&H recommends that a Phase II Environmental Site Assessment (subsurface investigation) be conducted at the Clarksburg Facility to evaluate both the CREC and the REC identi

1. Soil Borings. Approximately eight (8) soil borings should be advanced to assess subsurface conditions at the following locations: (a) beneath the stained concrete floor in the northeast corner of the warehouse (REC-1 area), with at least three (3) borings within and adjacent to the stained zone; (b) in the vicinity of the outdoor drum storage pad, with at least two (2) borings on and adjacent to the concrete pad;

2. Temporary Monitoring Wells. Approximately three (3) temporary monitoring wells should be installed to evaluate potential groundwater impact from both the legacy DRO contamination and any tenant-caused releases. Wells should be positioned to evaluate conditions upgradient, within, and downgradient of the identified areas of concern, based on inferred groundwater flow direction.

3. Analytical Suite. Soil and groundwater samples should be analyzed for the following parameters: diesel-range organics ("DRO") and gasoline-range organics ("GRO") by EPA Method 8015; volatile organic compounds ("VOCs"), including acetone and methyl ethyl ketone, by EPA Method 8260; and semi-volatile organic compounds ("SVOCs") by EPA Method 8270. Additional parameters (e.g., metals, amines) may be warranted dependi

4. Laboratory Analysis. All sampling and analysis should be conducted by TerraVerde, with laboratory analysis performed by a WV DEP-certified laboratory operating under an approved quality assurance/quality control program.

5. Vapor Intrusion Assessment. Depending on the results of the soil and groundwater sampling, a vapor intrusion assessment (sub-slab soil gas sampling and/or indoor air sampling) may be warranted to evaluate potential vapor intrusion pathways in the warehouse building. C&H will consult with TerraVerde regarding the need for this additional assessment once initial Phase II data are available. C&H will prepare a separa

1. Environmental Representations and Warranties. The environmental representations and warranties in Article IV, Section 4.18 of the draft Stock Purchase Agreement should address the CREC and REC identified at the Clarksburg Facility, the WV DEP closure and institutional controls associated with the former UST, ACC's CESQG status and regulatory compliance history, and the environmental provisions of the Mountainview

2. Environmental Indemnification and Escrow Provisions. The environmental indemnification and escrow provisions should address the specific risks identified at Clarksburg, including the potential for Crestline to inherit both tenant-caused remediation obligations and operator liability for pre-existing contamination. C&H recommends that the indemnification provisions include a specific carve-out or sub-limit for Clar

3. Environmental Disclosure Schedules. The CREC and REC should be fully described in the environmental disclosure schedules attached to the SPA, together with copies of the Phase I ESA, the WV DEP closure letter, the recorded land-use restriction, and the relevant lease provisions.

4. Comprehensive Environmental Diligence Summary Memorandum. The Clarksburg findings will be incorporated into the Comprehensive Environmental Diligence Summary Memorandum currently in preparation, which will aggregate and synthesize the environmental findings across all four ACC operating facilities. D. Coordination with Lender Requirements Commonwealth National Bank, N.A. (Victoria Chen, Managing Director, Environm