Contract analysis

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS

Section 4.18: Environmental Matters ** ** Transaction: Acquisition of 100% of the outstanding common stock of Allegheny Chemical Coatings, Inc. (the "Company"), a Pennsylvania corporation, by Crestline Packaging Solutions LLC ("Buyer"), a Delaware limited liability company. Reviewed by: Beatrice Holloway, Responsible Partner, Mergers & Acquisitions Practice Group, Calderwood & Harkness LLP Matter No.: 1006-00003 Cald

Section 4.18(a) — Environmental Permits. (i) The Company holds all Environmental Permits necessary for the lawful conduct and operation of the Company's business as currently conducted at each Company Real Property, including, without limitation, all permits, licenses, registrations, approvals, authorizations, and certificates required under all applicable Environmental Laws. A complete and accurate list of all such

Section 4.18(b) — Compliance with Environmental Laws. (i) The Company is, and during the past years has been, in compliance in all with all applicable Environmental Laws, including, without limitation, all Environmental Laws relating to air emissions, wastewater discharges, stormwater management, hazardous waste management, solid waste management, chemical storage and handling, worker health and safety (as related to

Section 4.18(c) — Contamination and Releases. (i) has been no Release of any Hazardous Substance at, on, under, from, or migrating to or from any Company Real Property, whether in soils, groundwater, surface water, sediment, air, or any other environmental medium, in each case in quantities, concentrations, or circumstances that would require investigation, reporting, notification, Remedial Action, or monitoring unde

Section 4.18(d) — Vapor Intrusion. (i) is no vapor intrusion or vapor migration of any Hazardous Substance (including, without limitation, TCE, PCE, benzene, toluene, xylene, or any other volatile organic compound) into any building, structure, enclosed space, or other occupied area on any Company Real Property at concentrations that exceed applicable screening levels, action levels, risk-based concentrations, or oth

Section 4.18(e) — Environmental Proceedings and Claims. (i) There is no Environmental Claim pending or, to the Knowledge of the Sellers, threatened against the Company, any Seller, or any Company Real Property, and no facts, circumstances, or conditions exist that would reasonably be expected to give rise to any Environmental Claim against the Company, any Seller, or any Company Real Property. (ii) The Company has no

Section 4.18(f) — Underground Storage Tanks. (i) are no underground storage tanks ("USTs"), whether active, inactive, temporarily closed, or abandoned, currently located on, in, or under any Company Real Property. No above-ground storage tanks containing petroleum products or other Hazardous Substances are located on any Company Real Property except as disclosed on Schedule 4.18(f). (ii) All USTs formerly located on

Section 4.18(g) — Hazardous Substance Use, Storage, and Disposal. (i) The Company uses, stores, handles, treats, processes, manufactures, transports, and disposes of all Hazardous Substances in compliance with all applicable Environmental Laws, Environmental Permits, and all applicable industry standards and best management practices. The Company has implemented and maintains all required secondary containment, spill

Section 4.18(h) — Spills and Reportable Releases. (i) has been no Release of any Hazardous Substance at, on, under, or from any Company Real Property that was required to be reported to any Governmental Authority under any Environmental Law during the past years, except as disclosed on Schedule 4.18(h). (ii) Schedule 4.18(h) shall disclose, without limitation, the following reportable releases: (a) June 14, 2017 — Mc

Section 4.18(i) — Asbestos and Lead-Based Paint. (i) Except as disclosed on Schedule 4.18(i), no asbestos-containing materials ("ACM") or presumed asbestos-containing materials ("PACM") are present in any building, structure, improvement, fixture, or other component of any Company Real Property, including, without limitation, insulation (pipe, boiler, duct, and equipment insulation), floor tiles, ceiling tiles, roofi

Section 4.18(j) — CERCLA and Superfund Matters. (i) No Company Real Property is listed or proposed for listing on the National Priorities List ("NPL") under CERCLA (42 U.S.C. § 9605) or on any state superfund list, priority list, or equivalent list maintained by any state or local Governmental Authority, including, without limitation, the Pennsylvania Priority List of Hazardous Sites maintained by PA DEP and the West

Section 4.18(k) — Institutional and Engineering Controls. (i) Except as disclosed on Schedule 4.18(k), no Company Real Property is subject to any institutional controls (including, without limitation, deed restrictions, environmental covenants, activity and use limitations, land-use restrictions, groundwater use restrictions, excavation restrictions, or any other restrictions on the use, development, or occupancy of

Section 4.18(l) — Environmental Insurance. (i) Schedule 4.18(l) sets forth a complete and accurate list of all environmental insurance policies (including, without limitation, pollution legal liability ("PLL") policies, remediation cost cap policies, environmental impairment liability policies, contractors pollution liability policies, and any other insurance policies providing coverage for environmental liabilities,

Section 4.18(m) — Environmental Reports and Assessments. (i) The Company has delivered to the Buyer, or made available to the Buyer in the virtual data room established for this transaction, complete and accurate copies of all environmental reports, assessments, studies, audits, surveys, investigations, sampling data, analytical results, correspondence with Governmental Authorities, and other documents and records in

Section 4.18(n) — No PCBs. (i) polychlorinated biphenyls ("PCBs") are present in any form at any Company Real Property, including, without limitation, in any electrical equipment (including transformers, capacitors, voltage regulators, switches, circuit breakers, reclosers, and light ballasts), building materials (including caulking, glazing, and paint), hydraulic fluids, heat transfer fluids, lubricants, or any othe

Section 4.18(o) — Compliance with Lease Environmental Provisions. (i) With respect to each Company Real Property that is leased by the Company (as tenant), the Company is in full compliance with all environmental obligations, covenants, representations, warranties, and provisions contained in the applicable lease agreement, including, without limitation, all obligations relating to the use, storage, handling, and dis

Section 4.18(c) (Contamination and Releases) is intentionally drafted without a Knowledge qualifier. This is the Buyer's opening position and reflects the principle that contamination is a factual condition — it either exists or it does not, irrespective of the Sellers' subjective awareness. The Sellers will almost certainly push back and seek to add "to the Knowledge of the Sellers" language to Sections 4.18(c)(i) t

Section 4.18(d) (Vapor Intrusion) has been drafted as a standalone representation, carved out from the general contamination representation in Section 4.18(c). This separation is deliberate and strategically important. Based on the Buyer's Phase II Environmental Site Assessment findings, vapor intrusion at McKeesport Building C is a significant known issue: indoor air sampling detected trichloroethylene ("TCE") at a

Section 4.18(e) (Environmental Proceedings) includes a lookback period for settled or resolved Environmental Claims. This lookback period is specifically designed to capture the February 3, 2020 epoxy resin hardener release at the McKeesport facility and the resulting $4,500 PA DEP fine, which occurred approximately two and a half years ago. The Sellers may seek to shorten the lookback period to three (3) or five (5)

Section 4.18(j) (CERCLA and Superfund Matters) includes a one (1)-mile radius proximity disclosure requirement. This provision is included specifically because the McKeesport facility is located within approximately 0.5 miles of the former Irwin Iron & Steel Superfund site (NPL-listed 1989; ROD issued 1996; construction completed 2004). The Phase I ESA prepared by TerraVerde Environmental Consulting, LLC concluded th

Section 4.18(k) (Institutional and Engineering Controls) is critical for two of the four Company Real Properties: the Clarksburg facility (land-use restriction related to residual DRO contamination from the former diesel UST) and the Weirton facility (site cap and deed restriction under the WV VRDP). Following the Closing, compliance with these controls will become Crestline's obligation as the successor owner/operat