Contract analysis

I. Purpose and Scope This memorandum presents Calderwood & Harkness LLP's review and analysis of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901–6992k, compliance status of Allegheny Chemical Coatings, Inc. ("ACC" or the "Target") across all four of its operating facilities. This review has been prepared in connection with the proposed acquisition by Crestline Packaging Solutions LLC ("Crestlin

II. Executive Summary ACC operates four facilities relevant to this review, spanning two states (Pennsylvania and West Virginia) and encompassing a range of manufacturing, blending, and distribution operations. The facilities, their locations, and their RCRA generator classifications are summarized as follows: (1) McKeesport Main Plant, 2200 Iron Works Boulevard, McKeesport, Allegheny County, Pennsylvania 15132 — ACC

III. Facility-by-Facility Analysis A. Facility 1 — McKeesport Main Plant (Headquarters)

1. Facility Identification. The McKeesport Main Plant serves as ACC's headquarters and primary manufacturing facility. The relevant identifying information for this facility is as follows: The McKeesport facility is located in a mixed-use industrial area along the Monongahela River corridor. The surrounding area includes other industrial operations, as well as commercial and residential properties in the broader McKe

2. RCRA Generator Status. Classification: Large Quantity Generator (LQG) EPA Identification Number: PAD-098-721-445 The McKeesport Main Plant is classified as a Large Quantity Generator of hazardous waste under RCRA and is subject to the full suite of LQG requirements set forth in 40 CFR Part 262, Subpart C, and the corresponding Pennsylvania Department of Environmental Protection regulations at 25 Pa. Code Chapter 2

3. Manifest Review. Calderwood & Harkness and TerraVerde reviewed hazardous waste manifests for the McKeesport facility for the most recent three-year period (calendar years 2019 through 2021). The manifests were produced by ACC through Seller's counsel in response to the Environmental Document Request. The review encompassed uniform hazardous waste manifests (EPA Form 8700-22) for all hazardous waste shipments origi

4. Biennial Hazardous Waste Reports. As a Large Quantity Generator, ACC is required to submit a Biennial Report (EPA Form 8700-13A/B) to the Pennsylvania Department of Environmental Protection every even-numbered year, reporting hazardous waste generation and management activities for the preceding odd-numbered calendar year. This requirement is set forth in 40 CFR § 262.41 and the corresponding PA DEP regulations. C

5. Inspection History. Most recent inspection: PA DEP RCRA compliance evaluation inspection conducted April 14, 2021. Result: No violations noted. The inspection report for the April 14, 2021 compliance evaluation was produced by ACC in response to the Environmental Document Request. The report, prepared by the PA DEP inspector, confirms that the inspection covered a comprehensive evaluation of ACC's RCRA compliance

6. Additional RCRA Observations. ACC maintains a written Contingency Plan and Emergency Procedures plan for the McKeesport facility, last updated in February 2021, which is consistent with the requirements applicable to LQGs under 40 CFR § 262.17 (incorporating by reference the contingency planning requirements of 40 CFR Part 265, Subpart D). The contingency plan designates Carl Johannsen as the primary emergency coo

1. Facility Identification. The Charleroi Specialty Coatings Plant is ACC's secondary manufacturing facility, specializing in water-based and UV-curable coatings. The relevant identifying information for this facility is as follows: The Charleroi facility represents ACC's newer and environmentally cleaner manufacturing operation. The facility was constructed by ACC in 2003 on former agricultural land (a greenfield si

2. RCRA Generator Status. Classification: Small Quantity Generator (SQG) EPA Identification Number: PAD-112-583-667 The Charleroi facility is classified as a Small Quantity Generator of hazardous waste under RCRA and is subject to the SQG requirements set forth in 40 CFR Part 262, Subpart B, as reorganized by the 2017 Generator Improvements Rule (81 Fed. Reg. 85,732 (Nov. 28, 2016)), and the corresponding PA DEP regu

3. Manifest Review. Hazardous waste manifests for the Charleroi facility were reviewed for the 2019–2021 period. Consistent with the facility's SQG status and lower volume of hazardous waste generation, the manifest activity at this facility is significantly lower than at McKeesport, with approximately four to six manifest shipments per year during the review period. All manifests reviewed were properly executed on E

4. Biennial Hazardous Waste Reports. As a Small Quantity Generator, the Charleroi facility is not required to submit biennial reports under the federal RCRA regulations. The biennial reporting requirement of 40 CFR § 262.41 applies only to Large Quantity Generators. However, the Pennsylvania Department of Environmental Protection may impose certain state-specific waste reporting requirements on SQGs. A review of ACC'

5. Inspection History. No PA DEP RCRA inspections were identified for the Charleroi facility within the review period (2012–2022) based on review of ACC's records, the PA DEP eFACTS database, and the EPA RCRAInfo database. The absence of inspections is not unusual for SQG facilities, which are generally subject to lower inspection priority and frequency compared to LQGs in EPA's and state agencies' compliance monitor

6. Additional RCRA Observations. SQG accumulation provisions under 40 CFR § 262.16 appear to be followed at the Charleroi facility. Under these provisions, an SQG may accumulate hazardous waste on-site for up to 270 days without a RCRA storage permit, provided that the waste is shipped off-site to a TSDF located more than 200 miles from the generator's site, or for up to 180 days if the waste is shipped to a TSDF loc

1. Facility Identification. The Clarksburg Resin Blending Facility is a leased facility used for resin receipt, blending, and redistribution, with minimal manufacturing activity. The relevant identifying information for this facility is as follows: The Clarksburg facility is a leased property, which distinguishes it from the McKeesport and Charleroi facilities that are owned in fee simple by ACC. The lease is structu

2. RCRA Generator Status. Classification: Conditionally Exempt Small Quantity Generator (CESQG) / Very Small Quantity Generator (VSQG) EPA Identification Number: WVD-054-319-882 The Clarksburg facility is classified as a Conditionally Exempt Small Quantity Generator ("CESQG") of hazardous waste under the longstanding RCRA regulations. This generator category has been redesignated as "Very Small Quantity Generator" ("

3. Manifest Review. Manifest activity at the Clarksburg facility is very limited, consistent with the facility's CESQG/VSQG status. Approximately one to two hazardous waste shipments per year were made from the Clarksburg facility during the 2019–2021 review period. Manifests for these shipments were reviewed and no discrepancies were noted. All manifests were properly completed and identified permitted TSDFs as the

4. Biennial Hazardous Waste Reports. As a CESQG/VSQG, the Clarksburg facility is not required to submit biennial hazardous waste reports under either federal RCRA regulations or West Virginia DEP regulations. No biennial reports were identified or expected for this facility.

5. Inspection History. No WV DEP RCRA inspections were identified for the Clarksburg facility during the review period (2012–2022) based on review of ACC's records, the WV DEP database, and the EPA RCRAInfo database. The absence of RCRA inspections is common for CESQG/VSQG facilities, which receive the lowest inspection priority in state and federal compliance monitoring programs due to their minimal hazardous waste

6. Additional RCRA Observations. CESQG/VSQG status carries a substantially reduced regulatory burden compared to SQG or LQG status. Under 40 CFR § 262.14, a CESQG/VSQG is not subject to the full manifest requirements, biennial reporting requirements, contingency planning requirements, or personnel training requirements that apply to SQGs and LQGs. However, a CESQG/VSQG is still required to make hazardous waste determ

1. Facility Identification. The Weirton Warehouse & Distribution Center is a leased facility used exclusively for finished goods storage and distribution. The relevant identifying information for this facility is as follows: The Weirton facility is the most recently developed of ACC's four facilities and is the only facility at which no manufacturing, mixing, blending, or other production activities occur. The facili

2. RCRA Generator Status. Classification: Not a hazardous waste generator No EPA Identification Number is required for the Weirton facility, and none has been obtained by ACC. No hazardous waste is generated at this facility. The Weirton Warehouse & Distribution Center is used exclusively for the storage and distribution of finished coating products in sealed, packaged form. No manufacturing, mixing, blending, formul

3. Manifest Review. Not applicable. No hazardous waste is generated or shipped from the Weirton facility.

4. Biennial Hazardous Waste Reports. Not applicable. The Weirton facility is not a hazardous waste generator and is not subject to biennial reporting requirements.

5. Inspection History. No WV DEP RCRA inspections were identified for the Weirton facility during the review period, which is expected given the absence of hazardous waste generator activity at this facility. No violations, enforcement actions, consent orders, or RCRA corrective action obligations were identified. Note Regarding VRDP Controls: The institutional and engineering controls at the Weirton site that were i

6. Additional RCRA Observations. No RCRA Subtitle C compliance obligations apply to the Weirton facility with respect to hazardous waste generation, management, or disposal. The only RCRA-adjacent requirements potentially applicable to the Weirton facility relate to universal waste management. Under 40 CFR Part 273, facilities that accumulate universal wastes (including spent fluorescent lamps, batteries, pesticides,

IV. Summary of RCRA Generator Status Across All Facilities The following table summarizes the RCRA generator status, EPA identification numbers, and inspection history for each of ACC's four operating facilities: As reflected in the table above, ACC's RCRA generator status ranges from Large Quantity Generator at its primary manufacturing facility (McKeesport) to non-generator status at its warehouse and distribution

V. Cross-Cutting RCRA Compliance Observations In addition to the facility-by-facility analysis presented above, Calderwood & Harkness identified a number of cross-cutting RCRA compliance observations that apply across multiple ACC facilities and that are relevant to the overall risk assessment for the Transaction. These observations are discussed below. A. Hazardous Waste Determination Procedures ACC performs hazardo

VI. Conclusions and Recommendations A. Overall Compliance Assessment Based on Calderwood & Harkness's review of ACC's RCRA compliance records, hazardous waste manifests, biennial hazardous waste reports, inspection history, regulatory database searches, Phase I Environmental Site Assessment reports, and interviews with ACC's EHS Manager, ACC is in substantial compliance with RCRA Subtitle C hazardous waste requiremen