1006-00007 · Client 1006 · Engagement

engagement-letter-crestline-apa.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

1114 Avenue of the Americas, 32nd Floor New York, New York 10036

Telephone: (212) 554-7800 Facsimile: (212) 554-7801 www.calderwoodharkness.com

October 3, 2022

Mr. Derek Amato General Counsel Crestline Packaging Solutions LLC 4100 Rockside Road, Suite 300 Independence, Ohio 44131

Dear Mr. Amato:

We are pleased that Crestline Packaging Solutions LLC ("Crestline" or the "Company"), a Delaware limited liability company, has selected Calderwood & Harkness LLP (the "Firm," "we," "us," or "our") to serve as its legal counsel in connection with the matter described below. We appreciate the confidence you and your team have placed in the Firm, and we look forward to providing the Company with excellent legal representation throughout the course of this engagement.

This letter (the "Engagement Letter") confirms that the Firm has been retained by Crestline to serve as buyer's counsel in connection with the proposed acquisition of substantially all of the assets comprising the ProShield Industrial Coatings product line (the "ProShield Product Line") from Voss Chemical Industries, Inc. ("Voss"), a New York corporation headquartered in Tonawanda, New York (the "Transaction"). The Transaction is anticipated to be structured as an asset purchase, with purchase price consideration expected to include both upfront cash consideration and a volume-based earnout component tied to post-closing gallons shipped over a twenty-four (24) month measurement period following the closing date. We understand that Crestline is a portfolio company of Kestrel Capital Partners Fund III, LP ("Fund III"). This engagement has been assigned Firm matter number 1006-00007, which should be referenced in all communications and payments directed to the Firm regarding this matter.

The purpose of this Engagement Letter is to set forth the terms and conditions governing the Firm's representation of Crestline in connection with the Transaction. We ask that you review this letter carefully and, if the terms are acceptable, that you countersign and return a copy to us in the manner indicated below.

1. Scope of Representation

The Firm will represent Crestline as buyer in all legal aspects of the proposed asset purchase of the ProShield Product Line from Voss, as more fully described below. The specific scope of our representation is anticipated to include the following:

(a) Transaction Structuring. Advising on and assisting with the structuring of the asset purchase transaction, including purchase price mechanics encompassing the allocation and structuring of upfront cash consideration, an escrow holdback to secure certain post-closing indemnification and purchase price adjustment obligations, and a volume-based earnout component linked to gallons of ProShield products shipped during the twenty-four (24) month post-closing measurement period.

(b) Legal Due Diligence. Conducting and coordinating comprehensive legal due diligence on the ProShield Product Line assets, which is expected to encompass, among other areas: Intellectual property rights (including trademarks, trade secrets, proprietary formulations, and know-how); customer contracts and supply agreements; employee and labor matters related to the ProShield Product Line; environmental matters (including compliance history, permits, and potential liabilities associated with the assets); and regulatory compliance matters relevant to the assets and the business of the ProShield Product Line.

(c) Transaction Documentation. Drafting, negotiating, and finalizing the definitive Asset Purchase Agreement (the "APA") and all ancillary transaction documents, including but not limited to the following:

(i) Bill of Sale;

(ii) Assignment and Assumption Agreement;

(iii) intellectual Property Assignment Agreement;

(iv) Escrow Agreement;

(v) Transition Services Agreement;

(vi) Non-Competition and Non-Solicitation Agreements applicable to Voss and its key principals;

(vii) Officer's Certificates and other customary closing certificates and deliverables; and

(viii) Such other ancillary agreements and instruments as may be necessary or appropriate to consummate the Transaction.

(d) Coordination with Advisors. Coordinating with Crestline's financial and accounting advisors, including Halcyon Chartered Accountants LLP, and Crestline's environmental consultants, including Northbridge Environmental Consulting Group LLC, regarding their respective workstreams and due diligence findings, in each case as they relate to the legal aspects of the Transaction.

(e) Indemnification and Escrow. Negotiating and structuring the indemnification framework set forth in the APA, including representations and warranties survival periods, indemnification baskets, caps, and other customary limitations, as well as coordinating the establishment and terms of the escrow arrangement with the designated escrow agent.

(f) Lender Coordination. Coordinating with Crestline's senior lender, Great Lakes Commerce Bank, N.A. (the "Lender"), regarding any required lender consents, waivers, or amendments to the Company's existing senior secured credit facility that may be necessary or advisable in connection with the financing and consummation of the Transaction.

(g) Representations and Warranties Insurance. Facilitating the procurement of a buyer-side representations and warranties insurance policy in connection with the Transaction, including coordinating with insurance brokers and underwriters, reviewing policy terms, and advising Crestline regarding coverage issues.

(h) Pre-Closing Conditions and Regulatory Matters. Advising on and assisting with the satisfaction of pre-closing conditions, including the analysis of the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), to the Transaction, the identification and procurement of any required third-party consents or governmental approvals, and the planning and coordination of closing mechanics.

(i) Closing and Post-Closing Matters. Preparing and coordinating all closing deliverables, arranging funds flow in connection with the closing, and advising on post-closing matters, including the working capital true-up process and the administration and mechanics of the volume-based earnout.

Matters Outside the Scope of This Engagement. For the avoidance of doubt, the scope of this engagement does not include, and the Firm will not be providing, representation or advice in connection with the following matters:

(i) Tax Advice. The Firm will not be providing tax advice in connection with the Transaction, including with respect to the tax structuring of the asset purchase, the allocation of purchase price for tax purposes, or any federal, state, or local tax consequences of the Transaction. Crestline should rely on its own independent tax advisors for all such matters. To the extent the APA or ancillary agreements contain tax-related provisions, we will coordinate with Crestline's tax advisors as appropriate, but the Firm does not assume responsibility for the substance of such provisions.

(ii) Environmental Remediation. The Firm will not be providing advice regarding environmental remediation matters related to the ProShield Product Line assets or any associated facilities. We understand that the Company has engaged Northbridge Environmental Consulting Group LLC and potentially other environmental consultants for such purposes. While we may review environmental due diligence reports and advise on the allocation of environmental liabilities in the Transaction documents, the Firm's representation does not extend to substantive environmental remediation advice.

(iii) Labor and Employment Matters. The Firm's representation with respect to labor and employment matters is limited to those matters directly related to the Transaction, such as the identification of transferring employees, the structuring of employee transition provisions in the APA and the Transition Services Agreement, and related matters. The Firm will not be providing general employment law advice, labor relations advice, or benefits administration advice beyond the scope of the Transaction.

(iv) Litigation. The Firm's engagement does not include representation in connection with any litigation, arbitration, or dispute resolution proceedings that may arise from, relate to, or be connected with the Transaction, unless the Firm is separately and expressly engaged for such purpose pursuant to a separate engagement letter.

Client Identity. We wish to make clear that in this engagement, the Firm represents only Crestline Packaging Solutions LLC. The Firm does not represent Kestrel Capital Partners Fund III, LP, Cobalt Ridge Partners Management III, LLC, or any other affiliate, member, manager, officer, director, or equity holder of Crestline, unless the Firm expressly agrees to do so in a separate written engagement. While we expect to communicate and coordinate with representatives of Cobalt Ridge Partners in the ordinary course of the Transaction at Crestline's direction, our professional duties of loyalty, confidentiality, and competence run exclusively to Crestline as our client.

2. Staffing and Responsible Attorneys

The following attorneys have been assigned to this matter and will serve as the primary members of the engagement team:

Harrison Wexford, Partner, Mergers & Acquisitions Practice Group. Mr. Wexford will serve as the Responsible Partner for this engagement and will have primary responsibility for the overall strategic direction of the representation, supervision of the engagement team, and the client relationship. Mr. Wexford will also serve as one of the primary points of contact for questions and communications regarding the engagement.

Beatrice Holloway, Partner, Mergers & Acquisitions Practice Group. Ms. Holloway will serve as the Billing Partner for this engagement and will be responsible for oversight of billing, fee arrangements, and other financial aspects of the engagement. Ms. Holloway will also contribute substantive legal work as the matter requires, particularly with respect to Transaction structuring and the negotiation of key deal terms.

Ryan Kowalski, Associate, Mergers & Acquisitions Practice Group. Mr. Kowalski will serve as Lead Associate on the engagement and will be responsible for the day-to-day management of the due diligence process, the drafting and revision of transaction documents, and providing negotiation support. Mr. Kowalski will serve as an additional primary point of contact for day-to-day matters and communications.

Megan Chu, Associate, Mergers & Acquisitions Practice Group. Ms. Chu will serve as a Working Associate on the engagement, supporting the due diligence review process, preparing and maintaining the closing checklist and transaction timetable, and assisting with the preparation of ancillary transaction documents and closing deliverables.

From time to time, additional attorneys or practice group specialists may be engaged to work on particular aspects of the Transaction as the need arises. Areas in which specialist involvement may be warranted include, by way of example and without limitation, intellectual property, environmental law, real estate, and tax (to the extent coordination with Crestline's tax advisors requires input from the Firm's tax practice). We will inform you in advance before involving any additional attorneys or practice group specialists in the matter to the extent practicable.

For questions or communications regarding the engagement, you may contact either Harrison Wexford at (212) 554-7812 or hwexford@calderwoodharkness.com, or Ryan Kowalski at (212) 554-7834 or rkowalski@calderwoodharkness.com.

3. Fee Arrangement

Hourly Rates. Fees for the Firm's services in this engagement will be billed on an hourly basis at the Firm's standard rates then in effect for the attorneys and professional staff working on the matter. The Firm's current hourly rates, as of October 2022, are as follows:

The specific rate applicable to each timekeeper working on the matter falls within the foregoing ranges and is determined based on the individual's experience, seniority, and area of specialization. A schedule of the individual rates for the attorneys initially assigned to this matter will be provided upon request.

Rate Adjustments. The Firm's hourly rates are subject to periodic adjustment, which typically occurs on an annual basis, generally effective January 1 of each calendar year. We will provide advance notice to the Company of any rate adjustments that may affect this engagement.

Disbursements. In addition to professional fees, the Firm will bill the Company for reasonable out-of-pocket disbursements incurred in connection with the engagement. Such disbursements may include, by way of example and without limitation: filing fees; overnight courier and delivery charges; travel expenses (including transportation, lodging, and meals when required for meetings, closings, or other activities related to the Transaction); computerized legal and factual research charges (e.g., Westmark Data Systems, Sundial Solutions, and similar databases); photocopying and printing costs at applicable rates; long-distance telecommunications charges; and similar costs. The Firm does not apply surcharges or markups to disbursements; they are billed at the Firm's actual cost.

Invoicing and Payment. Invoices for fees and disbursements will be rendered on a monthly basis, and each invoice is payable within thirty (30) days of the date of the invoice. Invoices will contain a summary of the professional services rendered and disbursements incurred during the applicable billing period, with reasonable detail regarding the nature of the work performed and the timekeepers involved. If the Company has any questions regarding an invoice, we ask that you contact Beatrice Holloway or the Firm's billing department promptly so that any issues may be addressed in a timely manner.

Fee Estimate. The Firm has not provided, and this Engagement Letter does not contain, an estimate of the total fees and disbursements expected to be incurred in connection with the engagement. The total cost of the representation will depend on a number of factors, many of which are not within the Firm's control, including the complexity of the Transaction, the scope and findings of due diligence, the extent and duration of negotiations with Voss and its counsel, the nature and number of ancillary agreements required, the involvement of third parties (including lenders, escrow agents, insurance underwriters, and governmental authorities), and other factors that may affect the volume and intensity of work required. The Firm will endeavor to keep the Company informed of any material developments that may significantly affect the anticipated level of fees and disbursements, and we are committed to providing efficient and cost-effective legal services throughout the engagement.

Retainer. The Firm reserves the right to request an advance retainer or a deposit against fees and disbursements at the inception of the engagement or at any time during the course of the engagement. If a retainer is requested and provided, it will be applied against outstanding invoices in accordance with the Firm's standard policies and applicable professional responsibility rules, and any unused portion will be returned to the Company at the conclusion of the engagement.

4. Matter Number and Billing References

All professional time, disbursements, and correspondence related to this engagement will be recorded under Firm matter number 1006-00007. We ask that the Company reference this matter number in all communications directed to the Firm and in all payments remitted in connection with invoices for this engagement to ensure proper identification and allocation.

5. Conflicts of Interest

The Firm has conducted a conflicts of interest check based on the information currently available to us, including information provided by the Company and information gathered from publicly available sources, and we confirm that, as of the date of this Engagement Letter, we have not identified any conflict of interest that would prevent the Firm from undertaking this representation.

The Company acknowledges that the Firm is a large, multi-practice law firm that represents numerous clients across a wide range of industries and practice areas. It is possible that the Firm currently represents, or may in the future represent, other entities or individuals whose interests may be adverse to those of Crestline in matters that are unrelated to the Transaction and the subject matter of this engagement. By signing this Engagement Letter, the Company acknowledges and consents to the Firm's representation of other clients in matters that are unrelated to this engagement, provided that such other representations do not involve the same or a substantially related matter and do not involve the use of Crestline's confidential information.

In order to assist us in performing ongoing conflicts monitoring throughout the course of this engagement, we request that the Company promptly inform us of any related parties, affiliates, subsidiaries, members, managers, or other entities or individuals that should be included in our conflicts monitoring processes. This information is critical to our ability to identify and manage potential conflicts in a timely and responsible manner.

6. Confidentiality

The Firm will maintain the confidentiality of all information and materials received from or on behalf of Crestline in connection with this engagement, in accordance with the applicable rules of professional conduct governing attorneys in the State of New York and any other relevant jurisdiction. The Firm will not disclose such information to any third party without the prior consent of the Company, except as may be required by applicable law, court order, or legal process, or as may be necessary to carry out the purposes of the representation (for example, disclosures to third parties involved in the Transaction at the Company's direction).

The confidentiality obligations described herein are mutual in nature. The Company agrees to maintain the confidentiality of the Firm's legal advice, work product, attorney-client communications, and privileged materials, and not to disclose such materials to any third party except as necessary in connection with the Transaction or as otherwise agreed by the Firm. The Company further agrees to take reasonable steps to preserve the attorney-client privilege and work product protection that may attach to communications and materials exchanged in the course of this engagement.

7. Document Retention

The Firm maintains a document retention policy that applies to all client matters. Upon the conclusion or termination of this engagement, the Firm will return to the Company any original documents belonging to the Company upon the Company's written request. The Firm may retain copies of documents, correspondence, work product, and other materials related to the engagement for its own files, in accordance with the Firm's standard retention policies, which provide for the retention of closed matter files for a period consistent with applicable professional responsibility requirements and the Firm's internal policies, after which such files may be destroyed in the ordinary course without further notice to the Company.

All electronic files, communications, and data maintained by the Firm in connection with this engagement will be stored and maintained in accordance with the Firm's data security and retention protocols, which are designed to protect the confidentiality, integrity, and availability of client information. If the Company has specific requirements regarding the retention, return, or destruction of documents or electronic files, we ask that such requirements be communicated to us in writing so that appropriate arrangements can be made.

8. Termination of Engagement

Either party may terminate this engagement at any time upon written notice to the other party. The Company's right to terminate the engagement is absolute. The Firm's right to terminate the engagement is subject to its professional obligations regarding withdrawal from client representations, including any applicable rules of professional conduct and, if applicable, any requirements imposed by a court or tribunal having jurisdiction over the matter.

Upon termination of the engagement by either party, the Company remains responsible for the payment of all fees for professional services rendered and disbursements incurred through the date of termination. The Firm will render a final invoice for all outstanding fees and disbursements as promptly as practicable following the effective date of termination.

In the event of termination, the Firm will take reasonable steps to protect the Company's interests, including cooperating in the orderly transition of the matter to successor counsel designated by the Company and promptly providing successor counsel with the Company's files and materials (subject to the Firm's right to retain copies in accordance with its document retention policy and any applicable lien rights).

9. Limitation of Liability

The Firm's legal advice and work product are provided based on the facts, circumstances, and applicable law as they exist at the time the advice is rendered or the work product is prepared. The Firm does not undertake to update or supplement its advice or work product to reflect subsequent changes in fact or law, unless the Firm has been separately engaged to do so.

To the extent permitted by applicable law, including the New York Rules of Professional Conduct and other governing ethical rules, the aggregate liability of the Firm, its partners, associates, employees, and agents, in connection with this engagement, whether based in contract, tort, or otherwise, shall not exceed the total amount of fees actually paid by the Company to the Firm with respect to this engagement, except to the extent such limitation is prohibited by applicable law or professional responsibility rules. Nothing in this Engagement Letter shall be construed to limit the Firm's liability for its own gross negligence, willful misconduct, or fraud.

10. Governing Law

This Engagement Letter and the relationship between the Firm and the Company shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any conflict-of-laws principles that might require the application of the laws of another jurisdiction.

Any dispute, controversy, or claim arising out of or relating to this Engagement Letter or the engagement described herein, including any dispute regarding the Firm's fees, shall be resolved exclusively in the state or federal courts located in the Borough of Manhattan, City and State of New York, and each of the parties hereby irrevocably consents to the personal jurisdiction and venue of such courts for such purpose.

11. Entire Agreement; Amendments

This Engagement Letter constitutes the entire agreement between Calderwood & Harkness LLP and Crestline Packaging Solutions LLC with respect to the terms and conditions of the engagement described herein, and supersedes all prior discussions, negotiations, understandings, and agreements, whether written or oral, between the parties with respect to the subject matter hereof.

No amendment, modification, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by an authorized representative of each of the Firm and the Company. No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof.

We look forward to working with you and the Crestline team on this transaction. We are confident that the Firm's experience and capabilities will serve the Company well in connection with the acquisition of the ProShield Industrial Coatings product line, and we are committed to providing the Company with the highest quality legal services throughout the engagement.

If the foregoing terms are acceptable, please confirm your agreement by countersigning this letter in the space indicated below and returning a signed copy to us at your earliest convenience. A duplicate original is enclosed for your records.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Harrison Wexford, Partner Responsible Partner

By: ________

Beatrice Holloway, Partner Billing Partner

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Crestline Packaging Solutions LLC, hereby acknowledges receipt of this Engagement Letter, confirms that the undersigned has read and understands the terms and conditions set forth herein, and agrees to be bound by such terms and conditions.

AGREED AND ACCEPTED:

CRESTLINE PACKAGING SOLUTIONS LLC

By: ________

Name: Derek Amato

Title: General Counsel

Date: ________

Enclosures:

Duplicate original of this Engagement Letter

cc:

Thomas R. Ellison, Chief Executive Officer, Crestline Packaging Solutions LLC

Sandra K. Nair, Chief Financial Officer, Crestline Packaging Solutions LLC

Julian H. Prescott, Managing Partner, Cobalt Ridge Partners Management III, LLC (via client)

Timekeeper Category	Hourly Rate Range
Partners	$895 – $1,150 per hour
Senior Associates (5th year and above)	$650 – $795 per hour
Associates (1st through 4th year)	$475 – $625 per hour
Paralegals / Legal Assistants	$275 – $350 per hour

CALDERWOOD & HARKNESS LLP Attorneys at Law
1114 Avenue of the Americas, 32nd Floor New York, New York 10036
Telephone: (212) 554-7800 Facsimile: (212) 554-7801 www.calderwoodharkness.com
October 3, 2022
Mr. Derek Amato General Counsel Crestline Packaging Solutions LLC 4100 Rockside Road, Suite 300 Independence, Ohio 44131
Dear Mr. Amato:
We are pleased that Crestline Packaging Solutions LLC ("Crestline" or the "Company"), a Delaware limited liability company, has selected Calderwood & Harkness LLP (the "Firm," "we," "us," or "our") to serve as its legal counsel in connection with the matter described below. We appreciate the confidence you and your team have placed in the Firm, and we look forward to providing the Company with excellent legal representation throughout the course of this engagement.
This letter (the "Engagement Letter") confirms that the Firm has been retained by Crestline to serve as buyer's counsel in connection with the proposed acquisition of substantially all of the assets comprising the ProShield Industrial Coatings product line (the "ProShield Product Line") from Voss Chemical Industries, Inc. ("Voss"), a New York corporation headquartered in Tonawanda, New York (the "Transaction"). The Transaction is anticipated to be structured as an asset purchase, with purchase price consideration expected to include both upfront cash consideration and a volume-based earnout component tied to post-closing gallons shipped over a twenty-four (24) month measurement period following the closing date. We understand that Crestline is a portfolio company of Kestrel Capital Partners Fund III, LP ("Fund III"). This engagement has been assigned Firm matter number 1006-00007, which should be referenced in all communications and payments directed to the Firm regarding this matter.
The purpose of this Engagement Letter is to set forth the terms and conditions governing the Firm's representation of Crestline in connection with the Transaction. We ask that you review this letter carefully and, if the terms are acceptable, that you countersign and return a copy to us in the manner indicated below.
1. Scope of Representation
The Firm will represent Crestline as buyer in all legal aspects of the proposed asset purchase of the ProShield Product Line from Voss, as more fully described below. The specific scope of our representation is anticipated to include the following:
(a) Transaction Structuring. Advising on and assisting with the structuring of the asset purchase transaction, including purchase price mechanics encompassing the allocation and structuring of upfront cash consideration, an escrow holdback to secure certain post-closing indemnification and purchase price adjustment obligations, and a volume-based earnout component linked to gallons of ProShield products shipped during the twenty-four (24) month post-closing measurement period.
(b) Legal Due Diligence. Conducting and coordinating comprehensive legal due diligence on the ProShield Product Line assets, which is expected to encompass, among other areas: Intellectual property rights (including trademarks, trade secrets, proprietary formulations, and know-how); customer contracts and supply agreements; employee and labor matters related to the ProShield Product Line; environmental matters (including compliance history, permits, and potential liabilities associated with the assets); and regulatory compliance matters relevant to the assets and the business of the ProShield Product Line.
(c) Transaction Documentation. Drafting, negotiating, and finalizing the definitive Asset Purchase Agreement (the "APA") and all ancillary transaction documents, including but not limited to the following:
(i) Bill of Sale;
(ii) Assignment and Assumption Agreement;
(iii) intellectual Property Assignment Agreement;
(iv) Escrow Agreement;
(v) Transition Services Agreement;
(vi) Non-Competition and Non-Solicitation Agreements applicable to Voss and its key principals;
(vii) Officer's Certificates and other customary closing certificates and deliverables; and
(viii) Such other ancillary agreements and instruments as may be necessary or appropriate to consummate the Transaction.
(d) Coordination with Advisors. Coordinating with Crestline's financial and accounting advisors, including Halcyon Chartered Accountants LLP, and Crestline's environmental consultants, including Northbridge Environmental Consulting Group LLC, regarding their respective workstreams and due diligence findings, in each case as they relate to the legal aspects of the Transaction.
(e) Indemnification and Escrow. Negotiating and structuring the indemnification framework set forth in the APA, including representations and warranties survival periods, indemnification baskets, caps, and other customary limitations, as well as coordinating the establishment and terms of the escrow arrangement with the designated escrow agent.
(f) Lender Coordination. Coordinating with Crestline's senior lender, Great Lakes Commerce Bank, N.A. (the "Lender"), regarding any required lender consents, waivers, or amendments to the Company's existing senior secured credit facility that may be necessary or advisable in connection with the financing and consummation of the Transaction.
(g) Representations and Warranties Insurance. Facilitating the procurement of a buyer-side representations and warranties insurance policy in connection with the Transaction, including coordinating with insurance brokers and underwriters, reviewing policy terms, and advising Crestline regarding coverage issues.
(h) Pre-Closing Conditions and Regulatory Matters. Advising on and assisting with the satisfaction of pre-closing conditions, including the analysis of the applicability of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), to the Transaction, the identification and procurement of any required third-party consents or governmental approvals, and the planning and coordination of closing mechanics.
(i) Closing and Post-Closing Matters. Preparing and coordinating all closing deliverables, arranging funds flow in connection with the closing, and advising on post-closing matters, including the working capital true-up process and the administration and mechanics of the volume-based earnout.
Matters Outside the Scope of This Engagement. For the avoidance of doubt, the scope of this engagement does not include, and the Firm will not be providing, representation or advice in connection with the following matters:
(i) Tax Advice. The Firm will not be providing tax advice in connection with the Transaction, including with respect to the tax structuring of the asset purchase, the allocation of purchase price for tax purposes, or any federal, state, or local tax consequences of the Transaction. Crestline should rely on its own independent tax advisors for all such matters. To the extent the APA or ancillary agreements contain tax-related provisions, we will coordinate with Crestline's tax advisors as appropriate, but the Firm does not assume responsibility for the substance of such provisions.
(ii) Environmental Remediation. The Firm will not be providing advice regarding environmental remediation matters related to the ProShield Product Line assets or any associated facilities. We understand that the Company has engaged Northbridge Environmental Consulting Group LLC and potentially other environmental consultants for such purposes. While we may review environmental due diligence reports and advise on the allocation of environmental liabilities in the Transaction documents, the Firm's representation does not extend to substantive environmental remediation advice.
(iii) Labor and Employment Matters. The Firm's representation with respect to labor and employment matters is limited to those matters directly related to the Transaction, such as the identification of transferring employees, the structuring of employee transition provisions in the APA and the Transition Services Agreement, and related matters. The Firm will not be providing general employment law advice, labor relations advice, or benefits administration advice beyond the scope of the Transaction.
(iv) Litigation. The Firm's engagement does not include representation in connection with any litigation, arbitration, or dispute resolution proceedings that may arise from, relate to, or be connected with the Transaction, unless the Firm is separately and expressly engaged for such purpose pursuant to a separate engagement letter.
Client Identity. We wish to make clear that in this engagement, the Firm represents only Crestline Packaging Solutions LLC. The Firm does not represent Kestrel Capital Partners Fund III, LP, Cobalt Ridge Partners Management III, LLC, or any other affiliate, member, manager, officer, director, or equity holder of Crestline, unless the Firm expressly agrees to do so in a separate written engagement. While we expect to communicate and coordinate with representatives of Cobalt Ridge Partners in the ordinary course of the Transaction at Crestline's direction, our professional duties of loyalty, confidentiality, and competence run exclusively to Crestline as our client.
2. Staffing and Responsible Attorneys
The following attorneys have been assigned to this matter and will serve as the primary members of the engagement team:
Harrison Wexford, Partner, Mergers & Acquisitions Practice Group. Mr. Wexford will serve as the Responsible Partner for this engagement and will have primary responsibility for the overall strategic direction of the representation, supervision of the engagement team, and the client relationship. Mr. Wexford will also serve as one of the primary points of contact for questions and communications regarding the engagement.
Beatrice Holloway, Partner, Mergers & Acquisitions Practice Group. Ms. Holloway will serve as the Billing Partner for this engagement and will be responsible for oversight of billing, fee arrangements, and other financial aspects of the engagement. Ms. Holloway will also contribute substantive legal work as the matter requires, particularly with respect to Transaction structuring and the negotiation of key deal terms.
Ryan Kowalski, Associate, Mergers & Acquisitions Practice Group. Mr. Kowalski will serve as Lead Associate on the engagement and will be responsible for the day-to-day management of the due diligence process, the drafting and revision of transaction documents, and providing negotiation support. Mr. Kowalski will serve as an additional primary point of contact for day-to-day matters and communications.
Megan Chu, Associate, Mergers & Acquisitions Practice Group. Ms. Chu will serve as a Working Associate on the engagement, supporting the due diligence review process, preparing and maintaining the closing checklist and transaction timetable, and assisting with the preparation of ancillary transaction documents and closing deliverables.
From time to time, additional attorneys or practice group specialists may be engaged to work on particular aspects of the Transaction as the need arises. Areas in which specialist involvement may be warranted include, by way of example and without limitation, intellectual property, environmental law, real estate, and tax (to the extent coordination with Crestline's tax advisors requires input from the Firm's tax practice). We will inform you in advance before involving any additional attorneys or practice group specialists in the matter to the extent practicable.
For questions or communications regarding the engagement, you may contact either Harrison Wexford at (212) 554-7812 or hwexford@calderwoodharkness.com, or Ryan Kowalski at (212) 554-7834 or rkowalski@calderwoodharkness.com.
3. Fee Arrangement
Hourly Rates. Fees for the Firm's services in this engagement will be billed on an hourly basis at the Firm's standard rates then in effect for the attorneys and professional staff working on the matter. The Firm's current hourly rates, as of October 2022, are as follows:
The specific rate applicable to each timekeeper working on the matter falls within the foregoing ranges and is determined based on the individual's experience, seniority, and area of specialization. A schedule of the individual rates for the attorneys initially assigned to this matter will be provided upon request.
Rate Adjustments. The Firm's hourly rates are subject to periodic adjustment, which typically occurs on an annual basis, generally effective January 1 of each calendar year. We will provide advance notice to the Company of any rate adjustments that may affect this engagement.
Disbursements. In addition to professional fees, the Firm will bill the Company for reasonable out-of-pocket disbursements incurred in connection with the engagement. Such disbursements may include, by way of example and without limitation: filing fees; overnight courier and delivery charges; travel expenses (including transportation, lodging, and meals when required for meetings, closings, or other activities related to the Transaction); computerized legal and factual research charges (e.g., Westmark Data Systems, Sundial Solutions, and similar databases); photocopying and printing costs at applicable rates; long-distance telecommunications charges; and similar costs. The Firm does not apply surcharges or markups to disbursements; they are billed at the Firm's actual cost.
Invoicing and Payment. Invoices for fees and disbursements will be rendered on a monthly basis, and each invoice is payable within thirty (30) days of the date of the invoice. Invoices will contain a summary of the professional services rendered and disbursements incurred during the applicable billing period, with reasonable detail regarding the nature of the work performed and the timekeepers involved. If the Company has any questions regarding an invoice, we ask that you contact Beatrice Holloway or the Firm's billing department promptly so that any issues may be addressed in a timely manner.
Fee Estimate. The Firm has not provided, and this Engagement Letter does not contain, an estimate of the total fees and disbursements expected to be incurred in connection with the engagement. The total cost of the representation will depend on a number of factors, many of which are not within the Firm's control, including the complexity of the Transaction, the scope and findings of due diligence, the extent and duration of negotiations with Voss and its counsel, the nature and number of ancillary agreements required, the involvement of third parties (including lenders, escrow agents, insurance underwriters, and governmental authorities), and other factors that may affect the volume and intensity of work required. The Firm will endeavor to keep the Company informed of any material developments that may significantly affect the anticipated level of fees and disbursements, and we are committed to providing efficient and cost-effective legal services throughout the engagement.
Retainer. The Firm reserves the right to request an advance retainer or a deposit against fees and disbursements at the inception of the engagement or at any time during the course of the engagement. If a retainer is requested and provided, it will be applied against outstanding invoices in accordance with the Firm's standard policies and applicable professional responsibility rules, and any unused portion will be returned to the Company at the conclusion of the engagement.
4. Matter Number and Billing References
All professional time, disbursements, and correspondence related to this engagement will be recorded under Firm matter number 1006-00007. We ask that the Company reference this matter number in all communications directed to the Firm and in all payments remitted in connection with invoices for this engagement to ensure proper identification and allocation.
5. Conflicts of Interest
The Firm has conducted a conflicts of interest check based on the information currently available to us, including information provided by the Company and information gathered from publicly available sources, and we confirm that, as of the date of this Engagement Letter, we have not identified any conflict of interest that would prevent the Firm from undertaking this representation.
The Company acknowledges that the Firm is a large, multi-practice law firm that represents numerous clients across a wide range of industries and practice areas. It is possible that the Firm currently represents, or may in the future represent, other entities or individuals whose interests may be adverse to those of Crestline in matters that are unrelated to the Transaction and the subject matter of this engagement. By signing this Engagement Letter, the Company acknowledges and consents to the Firm's representation of other clients in matters that are unrelated to this engagement, provided that such other representations do not involve the same or a substantially related matter and do not involve the use of Crestline's confidential information.
In order to assist us in performing ongoing conflicts monitoring throughout the course of this engagement, we request that the Company promptly inform us of any related parties, affiliates, subsidiaries, members, managers, or other entities or individuals that should be included in our conflicts monitoring processes. This information is critical to our ability to identify and manage potential conflicts in a timely and responsible manner.
6. Confidentiality
The Firm will maintain the confidentiality of all information and materials received from or on behalf of Crestline in connection with this engagement, in accordance with the applicable rules of professional conduct governing attorneys in the State of New York and any other relevant jurisdiction. The Firm will not disclose such information to any third party without the prior consent of the Company, except as may be required by applicable law, court order, or legal process, or as may be necessary to carry out the purposes of the representation (for example, disclosures to third parties involved in the Transaction at the Company's direction).
The confidentiality obligations described herein are mutual in nature. The Company agrees to maintain the confidentiality of the Firm's legal advice, work product, attorney-client communications, and privileged materials, and not to disclose such materials to any third party except as necessary in connection with the Transaction or as otherwise agreed by the Firm. The Company further agrees to take reasonable steps to preserve the attorney-client privilege and work product protection that may attach to communications and materials exchanged in the course of this engagement.
7. Document Retention
The Firm maintains a document retention policy that applies to all client matters. Upon the conclusion or termination of this engagement, the Firm will return to the Company any original documents belonging to the Company upon the Company's written request. The Firm may retain copies of documents, correspondence, work product, and other materials related to the engagement for its own files, in accordance with the Firm's standard retention policies, which provide for the retention of closed matter files for a period consistent with applicable professional responsibility requirements and the Firm's internal policies, after which such files may be destroyed in the ordinary course without further notice to the Company.
All electronic files, communications, and data maintained by the Firm in connection with this engagement will be stored and maintained in accordance with the Firm's data security and retention protocols, which are designed to protect the confidentiality, integrity, and availability of client information. If the Company has specific requirements regarding the retention, return, or destruction of documents or electronic files, we ask that such requirements be communicated to us in writing so that appropriate arrangements can be made.
8. Termination of Engagement
Either party may terminate this engagement at any time upon written notice to the other party. The Company's right to terminate the engagement is absolute. The Firm's right to terminate the engagement is subject to its professional obligations regarding withdrawal from client representations, including any applicable rules of professional conduct and, if applicable, any requirements imposed by a court or tribunal having jurisdiction over the matter.
Upon termination of the engagement by either party, the Company remains responsible for the payment of all fees for professional services rendered and disbursements incurred through the date of termination. The Firm will render a final invoice for all outstanding fees and disbursements as promptly as practicable following the effective date of termination.
In the event of termination, the Firm will take reasonable steps to protect the Company's interests, including cooperating in the orderly transition of the matter to successor counsel designated by the Company and promptly providing successor counsel with the Company's files and materials (subject to the Firm's right to retain copies in accordance with its document retention policy and any applicable lien rights).
9. Limitation of Liability
The Firm's legal advice and work product are provided based on the facts, circumstances, and applicable law as they exist at the time the advice is rendered or the work product is prepared. The Firm does not undertake to update or supplement its advice or work product to reflect subsequent changes in fact or law, unless the Firm has been separately engaged to do so.
To the extent permitted by applicable law, including the New York Rules of Professional Conduct and other governing ethical rules, the aggregate liability of the Firm, its partners, associates, employees, and agents, in connection with this engagement, whether based in contract, tort, or otherwise, shall not exceed the total amount of fees actually paid by the Company to the Firm with respect to this engagement, except to the extent such limitation is prohibited by applicable law or professional responsibility rules. Nothing in this Engagement Letter shall be construed to limit the Firm's liability for its own gross negligence, willful misconduct, or fraud.
10. Governing Law
This Engagement Letter and the relationship between the Firm and the Company shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any conflict-of-laws principles that might require the application of the laws of another jurisdiction.
Any dispute, controversy, or claim arising out of or relating to this Engagement Letter or the engagement described herein, including any dispute regarding the Firm's fees, shall be resolved exclusively in the state or federal courts located in the Borough of Manhattan, City and State of New York, and each of the parties hereby irrevocably consents to the personal jurisdiction and venue of such courts for such purpose.
11. Entire Agreement; Amendments
This Engagement Letter constitutes the entire agreement between Calderwood & Harkness LLP and Crestline Packaging Solutions LLC with respect to the terms and conditions of the engagement described herein, and supersedes all prior discussions, negotiations, understandings, and agreements, whether written or oral, between the parties with respect to the subject matter hereof.
No amendment, modification, or waiver of any provision of this Engagement Letter shall be effective unless made in writing and signed by an authorized representative of each of the Firm and the Company. No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof.
We look forward to working with you and the Crestline team on this transaction. We are confident that the Firm's experience and capabilities will serve the Company well in connection with the acquisition of the ProShield Industrial Coatings product line, and we are committed to providing the Company with the highest quality legal services throughout the engagement.
If the foregoing terms are acceptable, please confirm your agreement by countersigning this letter in the space indicated below and returning a signed copy to us at your earliest convenience. A duplicate original is enclosed for your records.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Harrison Wexford, Partner Responsible Partner
By: ________
Beatrice Holloway, Partner Billing Partner
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Crestline Packaging Solutions LLC, hereby acknowledges receipt of this Engagement Letter, confirms that the undersigned has read and understands the terms and conditions set forth herein, and agrees to be bound by such terms and conditions.
AGREED AND ACCEPTED:
CRESTLINE PACKAGING SOLUTIONS LLC
By: ________
Name: Derek Amato
Title: General Counsel
Date: ________
Enclosures:
Duplicate original of this Engagement Letter
cc:
Thomas R. Ellison, Chief Executive Officer, Crestline Packaging Solutions LLC
Sandra K. Nair, Chief Financial Officer, Crestline Packaging Solutions LLC
Julian H. Prescott, Managing Partner, Cobalt Ridge Partners Management III, LLC (via client)
Timekeeper Category | Hourly Rate Range
Partners | $895 – $1,150 per hour
Senior Associates (5th year and above) | $650 – $795 per hour
Associates (1st through 4th year) | $475 – $625 per hour
Paralegals / Legal Assistants | $275 – $350 per hour

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

AGREED AND ACCEPTED:

CRESTLINE PACKAGING SOLUTIONS LLC

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