Contract analysis

I. Purpose of This Memorandum The purpose of this memorandum is to document the decision to place Matter No. 1006-00003 on dormant status effective as of the date of this memorandum, November 4, 2022. This memorandum is intended to serve as a comprehensive record of the current state of the engagement and to provide a detailed framework for any future reactivation of the matter. Specifically, this memorandum is prepa

1. Record the Background and Reason for Dormancy. Deal negotiations between Crestline Packaging Solutions LLC ("Crestline" or "CPS") and the shareholders of Allegheny Chemical Coatings, Inc. ("ACC" or the "Target") were paused on or about October 28, 2022, following unresolved disagreements regarding environmental liability escrow amounts and indemnification provisions in the draft Stock Purchase Agreement (the "SPA"

2. Identify All Outstanding and Incomplete Environmental Diligence Items. A number of critical environmental diligence work streams remain incomplete at the time of dormancy, most notably the Clarksburg Phase II Environmental Site Assessment analytical results and the finalization of the Comprehensive Environmental Diligence Summary Memorandum. Each outstanding item is identified and described in detail herein to ens

3. Establish a Resumption Protocol for Reactivation of the Matter. This memorandum sets forth an eight-step protocol to be followed in the event that Crestline elects to resume negotiations and reactivate this engagement. The protocol is designed to ensure an orderly and efficient resumption of work and to address any developments that may have occurred during the dormancy period.

4. Direct Preservation of All Work Product, Correspondence, and Electronic Files. All materials generated in connection with this engagement are subject to a document preservation directive issued concurrently with this memorandum. No documents, files, or electronic records relating to this matter shall be deleted, discarded, or destroyed until formal matter closure or resumption, as applicable. This memorandum shoul

II. Engagement Background A. The Transaction Crestline Packaging Solutions LLC, an Ohio limited liability company headquartered at 4100 Riverside Commerce Drive, Suite 300, Dayton, OH 45402, is a wholly-owned portfolio company of Briarwood Capital Partners LP (Fund IV), a $2.1 billion private equity fund focused on middle-market industrial and specialty manufacturing investments. Crestline is a leading manufacturer a

III. Summary of Completed Environmental Diligence Work The following sections summarize the environmental diligence work that has been completed as of the date of this memorandum. This summary is organized by workstream for ease of reference and is intended to provide a complete accounting of the state of the diligence record as it exists at the time of dormancy. A. Phase I Environmental Site Assessments All four Pha

IV. Outstanding Items at Time of Dormancy The following items remain outstanding and incomplete as of the date of dormancy. Each is described with sufficient specificity to enable the engagement team to resume work efficiently in the event the matter is reactivated.

1. Clarksburg Phase II Analytical Results Soil and groundwater samples collected by TerraVerde (field lead: Alicia Reyes, P.G.) at the Clarksburg Resin Blending Facility on October 7, 2022, were submitted to Keystone Analytical Laboratories Inc. in Monroeville, Pennsylvania, for analysis. The analytical results were expected by October 28, 2022, but were not received before the deal negotiations were paused. TerraVer

2. Clarksburg Phase II Results Analysis Memorandum The Clarksburg Phase II Results Analysis Memorandum cannot be prepared until Keystone Analytical Laboratories delivers the analytical data to TerraVerde and TerraVerde provides its Phase II report and findings. A placeholder has been reserved in the diligence file. Upon receipt of the data, Harrison Caldwell and Grace Nakamura will prepare the analysis memorandum in

3. Comprehensive Environmental Diligence Summary Memorandum (Draft) A draft of the Comprehensive Environmental Diligence Summary Memorandum, dated October 22, 2022, is on file but remains incomplete. The draft incorporates the completed Phase I ESA findings for all four facilities, the McKeesport Phase II results and analysis, the regulatory compliance review findings, the lease environmental provisions analyses, and

4. PLL Insurance Underwriting As described in Section III.F above, Ironclad Specialty Insurance Company provided a non-binding indication of interest only. No formal PLL insurance application has been submitted. The underwriting process is paused pending (a) completion of the Clarksburg Phase II data review, which will be required by the underwriter as part of a complete submission, and (b) a decision by Crestline on

5. Environmental Escrow / Indemnification Negotiations The last substantive exchange between the parties on the environmental risk allocation provisions occurred on October 24, 2022, when Seller's counsel, Franklin Speer of Hargrove, Dalton & Speer LLP, transmitted the Seller's counterproposal via email. The Seller's counterproposal included the following terms: • Environmental escrow: $1,500,000 • Environmental inde

6. Title V Permit Modification — McKeesport Thermal Oxidizer ACC submitted an application to PA DEP in March 2022 for a modification to its Title V Operating Permit (No. TV-0383-0125) to authorize the installation and operation of a thermal oxidizer on manufacturing Line 4 at the McKeesport facility. The issuance of this permit modification would affect the facility's operational capacity, capital expenditure require

7. Asbestos and Lead-Based Paint Management Plans The McKeesport facility, which was originally constructed in approximately 1955 and has been expanded and renovated multiple times, contains identified asbestos-containing materials ("ACM") and lead-based paint ("LBP"): Asbestos-Containing Materials: ACM was identified in pipe insulation in Buildings A and B (estimated 2,400 linear feet) and in floor tiles in Building

8. Lender Environmental Diligence Condition The commitment letter from Commonwealth National Bank, N.A. (Victoria Chen, Managing Director), signed on July 8, 2022, conditions the bank's obligation to fund the $65 million senior secured term loan and $20 million revolving credit facility on, among other things, satisfactory environmental diligence. Specifically, the commitment letter requires Phase I ESAs on all targe

V. Environmental Liability Summary (Current Estimates) Based on the environmental diligence work completed as of the date of this memorandum, the estimated range of environmental liabilities associated with ACC's four operating facilities is summarized in the table below. These estimates are preliminary and are subject to material revision upon receipt and analysis of the Clarksburg Phase II analytical results and an

VI. Reason for Dormancy Deal negotiations between Crestline Packaging Solutions LLC and the shareholders of Allegheny Chemical Coatings, Inc. were paused on or about October 28, 2022. The primary cause of the pause was the inability of the parties to reach agreement on purchase price adjustments and transaction document provisions related to identified environmental liabilities. Specifically, the parties were unable

VII. Resumption Protocol In the event that Crestline Packaging Solutions LLC elects to resume negotiations for the acquisition of Allegheny Chemical Coatings, Inc. and reactivate this engagement, the following eight-step protocol shall govern the resumption of work on Matter No. 1006-00003. The protocol is designed to ensure that all necessary procedural, legal, and substantive steps are taken in an orderly manner an

VIII. Document Preservation Directive All work product, correspondence, electronic files, and physical documents related to Matter No. 1006-00003 are to be preserved in their current state, without alteration, deletion, or destruction, effective immediately and continuing until formal matter closure or resumption, as applicable. A separate Document Preservation and Hold Notice is being issued concurrently with this m

IX. Current Engagement Status and Contact Information The following summarizes the current engagement status and key contact information for Matter No. 1006-00003 as of the date of this memorandum: Matter Status: Dormant, effective November 4, 2022. Client Primary Contact: Derek Huang General Counsel Crestline Packaging Solutions LLC 4100 Riverside Commerce Drive, Suite 300 Dayton, OH 45402 Sponsor Contact: Vanessa M