1006-00001 · Firm's first financing engagement for the Company · Closing

borrowers-counsel-legal-opinion.docx DOCUMENT Finance & Banking

2 / 12 ← → ✕

Contract analysis Extract to table

CALDERWOOD & HARKNESS LLP Attorneys at Law

1251 Avenue of the Americas, 40th Floor New York, New York 10020

Telephone: (212) 548-6000 Facsimile: (212) 548-6001

April 22, 2021

Ironwood Capital Finance LLC 600 Lexington Avenue, 22nd Floor New York, New York 10022

Attention: Derek Calloway, Managing Director

Re: Legal Opinion — $20,000,000 Mezzanine Credit Agreement dated as of April 22, 2021, among Crestline Packaging Solutions LLC, as Borrower, and Ironwood Capital Finance LLC, as Lender

Ladies and Gentlemen:

I. Introduction and Role

We have acted as counsel to Crestline Packaging Solutions LLC, a limited liability company duly formed under the laws of the State of Ohio (the "Borrower" or "Crestline"), in connection with the negotiation, execution, and delivery of the Mezzanine Credit Agreement dated as of April 22, 2021 (the "Credit Agreement"), by and between the Borrower and Ironwood Capital Finance LLC, a limited liability company organized under the laws of the State of Delaware (the "Lender" or "Ironwood"), and the related Loan Documents (as defined below) entered into in connection therewith (collectively, the "Transaction").

This opinion letter is delivered to you pursuant to Section 5.01(h) of the Credit Agreement as a condition precedent to the initial borrowing under the Credit Agreement on the date hereof. We are delivering this opinion solely in our capacity as counsel to the Borrower and, where specified herein, to Crestline Coatings Inc., a corporation organized under the laws of the State of Ohio and a wholly owned subsidiary of the Borrower ("Crestline Coatings" and, together with the Borrower, each an "Opinion Party" and collectively, the "Opinion Parties").

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Credit Agreement unless the context otherwise requires.

II. Documents Examined

In connection with the preparation and delivery of this opinion, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the following documents:

A. Transaction Documents

The following documents are collectively referred to herein as the "Loan Documents":

1. The Mezzanine Credit Agreement dated as of April 22, 2021 (the "Credit Agreement"), by and between Crestline Packaging Solutions LLC, as Borrower, and Ironwood Capital Finance LLC, as Lender, providing for a mezzanine term loan facility in the original principal amount of Twenty Million Dollars ($20,000,000);

2. The Mezzanine Promissory Note dated April 22, 2021 (the "Note"), in the original principal amount of $20,000,000, issued by Crestline Packaging Solutions LLC in favor of Ironwood Capital Finance LLC, evidencing the Borrower's obligation to repay the mezzanine term loan;

3. The Security Agreement (Second Lien) dated as of April 22, 2021 (the "Security Agreement"), by Crestline Packaging Solutions LLC and Crestline Coatings Inc. (collectively, the "Grantors") in favor of Ironwood Capital Finance LLC, as secured party, granting a second-priority security interest in substantially all personal property of the Grantors;

4. The Intercreditor Agreement dated as of April 22, 2021 (the "Intercreditor Agreement"), among Pinnacle Commercial Bank, N.A., a national banking association, in its capacity as administrative agent and collateral agent under the Senior Credit Agreement (as defined below) (the "Senior Agent"), Ironwood Capital Finance LLC, in its capacity as mezzanine lender, and acknowledged and agreed to by Crestline Packaging Solutions LLC;

5. The Pledge Agreement dated as of April 22, 2021 (the "Pledge Agreement"), by Crestline Packaging Solutions LLC in favor of Ironwood Capital Finance LLC, pursuant to which the Borrower has pledged one hundred percent (100%) of the membership interests in Crestline Coatings Inc. as collateral security for the Obligations (as defined in the Credit Agreement); and

6. The Warrant Agreement dated as of April 22, 2021 (the "Warrant Agreement"), between Crestline Packaging Solutions LLC and Ironwood Capital Finance LLC, providing for the issuance of warrants to purchase certain equity interests of the Borrower on the terms and conditions set forth therein.

B. Organizational and Ancillary Documents

In addition to the Loan Documents described above, we have also examined the following organizational, corporate governance, and ancillary documents:

(a) Certificate of Formation of Crestline Packaging Solutions LLC, as filed with the Secretary of State of the State of Ohio (OH SOS Filing No. 4217835), together with all amendments thereto;

(b) The Amended and Restated Operating Agreement of Crestline Packaging Solutions LLC, dated as of June 14, 2017, as amended by (i) the First Amendment to Operating Agreement dated as of September 12, 2019 and (ii) the Second Amendment to Operating Agreement dated as of April 22, 2021 (collectively, the "Operating Agreement");

(c) Articles of Incorporation of Crestline Coatings Inc., as filed with the Secretary of State of the State of Ohio (OH SOS Filing No. 4389201), together with all amendments thereto;

(d) Amended and Restated Bylaws of Crestline Coatings Inc., as currently in effect (the "Bylaws");

(e) A Certificate of Good Standing for Crestline Packaging Solutions LLC issued by the Secretary of State of the State of Ohio, dated April 19, 2021;

(f) A Certificate of Good Standing for Crestline Coatings Inc. issued by the Secretary of State of the State of Ohio, dated April 20, 2021;

(g) Written consent resolutions of the members of Crestline Packaging Solutions LLC (including Ridgeway Capital Partners Fund III, L.P., as the majority member holding approximately 78% of the outstanding membership interests, and Gerald F. Novak, as the minority member holding approximately 22% of the outstanding membership interests), dated April 19, 2021, authorizing the Transaction and approving the execution, delivery, and performance of each of the Loan Documents by the Borrower (the "Member Resolutions");

(h) Resolutions of the Board of Directors of Crestline Coatings Inc., adopted by unanimous written consent dated April 19, 2021, authorizing the execution, delivery, and performance by Crestline Coatings Inc. of the Security Agreement and each other Loan Document to which it is a party (the "Board Resolutions");

(i) Officer's Certificate of Crestline Packaging Solutions LLC, dated April 22, 2021, executed and delivered by Patricia Gallagher, Chief Financial Officer, and Raymond Cho, General Counsel, certifying as to certain factual matters, including the accuracy and completeness of the organizational documents, the incumbency of signing officers, and the truth and accuracy of the representations and warranties contained in the Loan Documents (the "Officer's Certificate");

(j) The Credit Agreement dated as of September 12, 2019 (as amended by the First Amendment thereto dated March 1, 2020, and the Second Amendment thereto dated November 15, 2020), among Crestline Packaging Solutions LLC, Crestline Coatings Inc., the lenders from time to time party thereto, and Pinnacle Commercial Bank, N.A., as administrative agent and collateral agent (as so amended, the "Senior Credit Agreement");

(k) Consent letter from Pinnacle Commercial Bank, N.A., dated March 15, 2021, in its capacity as administrative agent under the Senior Credit Agreement, consenting to the incurrence by the Borrower of the mezzanine indebtedness contemplated by the Credit Agreement and the related Loan Documents, and to the granting of second-priority liens on the Borrower's and Crestline Coatings Inc.'s assets in favor of the Lender (the "Senior Lender Consent");

(l) UCC-1 financing statements naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, prepared for filing with the Secretary of State of the State of Ohio;

(m) Second-Lien Open-End Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, to be recorded with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424 (the "Mortgage");

(n) Results of searches of Uniform Commercial Code filings, federal and state tax lien filings, judgment lien filings, and pending litigation and bankruptcy proceedings with respect to Crestline Packaging Solutions LLC and Crestline Coatings Inc., each conducted by Ashgrove Services Inc. as of April 16, 2021, in the State of Ohio and the United States District Court for the Southern District of Ohio (collectively, the "Search Results"); and

(o) Such other documents, records, certificates, and instruments as we have deemed necessary or appropriate for the purposes of rendering the opinions set forth herein.

III. Assumptions

In rendering the opinions set forth in this letter, we have, with your permission and without independent investigation or verification, assumed the following:

(a) Genuineness of Signatures. All signatures on documents examined by us (other than the signatures of officers and authorized representatives of the Borrower and Crestline Coatings Inc.) are genuine, and all persons executing such documents on behalf of any party (other than the Opinion Parties) were duly authorized to do so.

(b) Authenticity of Documents. All documents submitted to us as originals are authentic and complete, and all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise) conform to the originals thereof, which originals are themselves authentic and complete.

(c) Completeness of Documents. All documents examined by us are complete and have not been amended, supplemented, restated, or terminated, except as expressly stated herein or in such documents, and there are no oral or written modifications or waivers of any of the provisions of such documents, except as disclosed to us in writing.

(d) Organization and Standing of Other Parties. Each party to the Loan Documents (other than the Borrower and Crestline Coatings Inc.) has been duly organized or formed, is validly existing, and is in good standing under the laws of its respective jurisdiction of organization or formation, and has all requisite power and authority, organizational or otherwise, to conduct its business as presently conducted and to own, lease, and operate its properties and assets.

(e) Authority of Other Parties. Each party to the Loan Documents (other than the Borrower and Crestline Coatings Inc.) has the full organizational power and authority to execute, deliver, and perform its respective obligations under each Loan Document to which it is a party, and the execution, delivery, and performance of such Loan Documents have been duly authorized by all necessary organizational action on the part of each such party.

(f) Due Execution by Other Parties. Each Loan Document has been duly authorized, executed, and delivered by each party thereto (other than the Borrower and Crestline Coatings Inc.).

(g) Binding Obligations of Other Parties. Each Loan Document constitutes the legal, valid, and binding obligation of each party thereto (other than the Borrower and Crestline Coatings Inc.), enforceable against each such party in accordance with its respective terms, subject to applicable bankruptcy, insolvency, and equitable principles.

(h) Good Faith and Value. Ironwood Capital Finance LLC has given value and has acted in good faith in connection with the Transaction for purposes of the perfection and priority opinions set forth herein, including for all purposes under Article 9 of the Uniform Commercial Code as in effect in the State of Ohio (the "Ohio UCC").

(i) Accuracy of Factual Representations. The factual statements, representations, and warranties made by officers of the Borrower and Crestline Coatings Inc. in the Officer's Certificate, the Loan Documents, and all other closing certificates and documents delivered in connection with the Transaction are true, correct, and complete as of the date hereof, and we have relied upon such statements, representations, and warranties without independent investigation or verification.

(j) Filing and Recording. All UCC financing statements and the Mortgage described herein will be duly and properly filed or recorded, as applicable, in the appropriate offices and jurisdictions, and such filings or recordings will be properly indexed by the applicable filing or recording offices.

We have not independently verified any of the foregoing assumptions. To the extent that any of the foregoing assumptions proves to be incorrect, the opinions expressed herein may be adversely affected.

IV. Opinions

Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth in Section V below, we are of the opinion that:

4.1 Due Organization and Good Standing — Crestline Packaging Solutions LLC

Crestline Packaging Solutions LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Ohio. The Borrower was formed by the filing of its Certificate of Formation with the Secretary of State of the State of Ohio (OH SOS Filing No. 4217835), and such Certificate of Formation has not been amended, revoked, or canceled, except as disclosed in the organizational documents reviewed by us. Based upon our review of the Certificate of Good Standing issued by the Secretary of State of the State of Ohio dated April 19, 2021, the Borrower is in good standing under Ohio law as of such date.

The Borrower has all requisite limited liability company power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted, including the operation of its packaging manufacturing and distribution business from its principal place of business located at 4510 Harshman Road, Dayton, Ohio 45424.

4.2 Due Organization and Good Standing — Crestline Coatings Inc.

Crestline Coatings Inc. is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Ohio. Crestline Coatings was incorporated by the filing of its Articles of Incorporation with the Secretary of State of the State of Ohio (OH SOS Filing No. 4389201), and such Articles of Incorporation have not been amended, revoked, or canceled, except as disclosed in the organizational documents reviewed by us. Based upon our review of the Certificate of Good Standing issued by the Secretary of State of the State of Ohio dated April 20, 2021, Crestline Coatings is in good standing under Ohio law as of such date.

Crestline Coatings is a wholly owned subsidiary of Crestline Packaging Solutions LLC, with its registered address at 4510 Harshman Road, Dayton, Ohio 45424. Crestline Coatings has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted, including the manufacturing and sale of specialty industrial coatings and related products.

4.3 Authorization and Due Execution

The execution, delivery, and performance by the Borrower of each of the Loan Documents to which it is a party have been duly authorized by all necessary limited liability company action on the part of the Borrower, including the approval of the members of Crestline Packaging Solutions LLC as set forth in the Member Resolutions. Without limiting the generality of the foregoing, we have confirmed that Ridgeway Capital Partners Fund III, L.P., as the holder of approximately seventy-eight percent (78%) of the outstanding membership interests in the Borrower and constituting the requisite majority interest under the Operating Agreement, has duly approved and authorized the Transaction and the execution, delivery, and performance of the Loan Documents by the Borrower, and that Gerald F. Novak, as the holder of the remaining approximately twenty-two percent (22%) of the outstanding membership interests, has similarly consented to and approved the Transaction.

The execution, delivery, and performance by Crestline Coatings Inc. of each of the Loan Documents to which it is a party, specifically the Security Agreement (Second Lien) dated as of April 22, 2021 and such other Loan Documents as require execution by Crestline Coatings, have been duly authorized by all necessary corporate action, including the unanimous written consent of the Board of Directors of Crestline Coatings Inc. as set forth in the Board Resolutions. No further action by the shareholders of Crestline Coatings Inc. is required under the Articles of Incorporation, Bylaws, or applicable Ohio law for such authorization.

Each Loan Document to which the Borrower is a party has been duly executed and delivered by the Borrower by Gerald F. Novak, in his capacity as Chief Executive Officer, and Patricia Gallagher, in her capacity as Chief Financial Officer, each of whom is duly authorized to execute and deliver such documents on behalf of the Borrower. Each Loan Document to which Crestline Coatings Inc. is a party has been duly executed and delivered by Crestline Coatings Inc. by its duly authorized officer(s). No other approvals, consents, or authorizations of any member, manager, officer, director, or other person are required under the organizational documents of either Opinion Party or under applicable Ohio law in order to authorize the Transaction.

4.4 Enforceability. Each of the Loan Documents to which the Borrower or Crestline Coatings Inc. is a party constitutes the legal, valid, and binding obligation of such Opinion Party, enforceable against such Opinion Party in accordance with its respective terms, except as such enforceability may be limited by:

(i) applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium, receivership, conservatorship, or similar laws relating to or affecting the enforcement of creditors' rights generally, as from time to time in effect; and

(ii) general principles of equity, including principles of commercial reasonableness, good faith and fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies (regardless of whether enforcement is considered in a proceeding in equity or at law).

The opinions expressed in this Section 4.4 are limited to the laws of the State of New York (which is the governing law designated in each of the Loan Documents), the laws of the State of Ohio (solely as to organizational matters relating to the Opinion Parties and as to the perfection and priority of security interests and liens on assets located in the State of Ohio), and the federal laws of the United States of America. We express no opinion as to the laws of any other jurisdiction, including the State of Delaware.

We note that each of the Loan Documents provides that it is governed by and shall be construed in accordance with the laws of the State of New York. We are members of the bar of the State of New York and are familiar with the laws of such State. Based on New York General Obligations Law Section 5-1401, we believe that the choice of New York law in the Loan Documents would be honored by a New York court, and based on Ohio Revised Code Section 1301.05 (Ohio UCC Section 1-301) and general Ohio conflict of laws principles, we believe that an Ohio court would also give effect to such choice of law, subject in each case to the exceptions and qualifications noted herein.

4.5 No Conflicts

The execution, delivery, and performance by the Borrower and Crestline Coatings Inc. of the Loan Documents to which each is a party, and the consummation by each such Opinion Party of the transactions contemplated thereby, do not and will not:

(a) violate, conflict with, or result in any breach of any provision of the Certificate of Formation or Operating Agreement of Crestline Packaging Solutions LLC, or the Articles of Incorporation or Bylaws of Crestline Coatings Inc.;

(b) violate, conflict with, or result in a breach of any applicable law, statute, rule, or regulation of the State of New York, the State of Ohio, or the United States of America applicable to the Borrower or Crestline Coatings Inc., in each case that is, in our experience, normally applicable to transactions of the type contemplated by the Loan Documents (it being understood and agreed that this clause (b) is limited to laws of general applicability and that we express no opinion with respect to federal or state environmental laws, tax laws, laws governing employee benefit plans (including ERISA), antitrust or competition laws, health, safety, or labor laws, laws governing regulated industries (including banking, insurance, or telecommunications), securities laws, or any other specialized regulatory regime); or

(c) to our knowledge, result in a breach of, or constitute a default (or an event that with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge, or encumbrance (other than liens expressly permitted under the Loan Documents, including the second-priority liens created pursuant to the Security Agreement, the Pledge Agreement, and the Mortgage) upon any property or asset of the Borrower or Crestline Coatings Inc. under, any material agreement, indenture, mortgage, deed of trust, lease, license, or other instrument to which the Borrower or Crestline Coatings Inc. is a party or by which any of its or their respective properties or assets may be bound.

With respect to the opinion set forth in clause (c) above, we note that the incurrence of the mezzanine indebtedness contemplated by the Credit Agreement and the granting of the second-priority liens on the assets of the Borrower and Crestline Coatings Inc. in favor of the Lender is permitted under the Senior Credit Agreement dated as of September 12, 2019, as amended, as evidenced by the consent letter from Pinnacle Commercial Bank, N.A., in its capacity as administrative agent under the Senior Credit Agreement, dated March 15, 2021, a copy of which has been reviewed by us. We have assumed, without independent verification, that such consent letter remains in full force and effect and has not been revoked, amended, or withdrawn as of the date hereof.

For purposes of the opinion set forth in clause (c) above, the phrase "to our knowledge" means the actual knowledge, without independent investigation, of the attorneys within this firm who have devoted substantive legal attention to the Transaction, and does not include constructive knowledge or any duty of inquiry.

4.6 No Governmental Consents Required

No consent, approval, authorization, order, registration, qualification, designation, or filing with any federal, state, or local governmental authority or regulatory body of the State of New York, the State of Ohio, or the United States of America is required to be obtained or made by the Borrower or Crestline Coatings Inc. in connection with the execution, delivery, and performance by either such Opinion Party of the Loan Documents to which it is a party, or the consummation of the transactions contemplated thereby, except for:

(a) the filing of UCC-1 financing statements with the Secretary of State of the State of Ohio naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, as contemplated by the Security Agreement;

(b) the recording of the second-lien Mortgage with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424; and

The foregoing opinion regarding governmental consents does not extend to any filings, registrations, or approvals that may be required under federal or state securities laws, tax laws, environmental laws, ERISA, antitrust or competition laws, health, safety, or labor laws, or any other specialized regulatory regime, which are expressly excluded from the scope of this opinion.

4.7 Perfection of Security Interests — Personal Property

Upon the filing of the UCC-1 financing statements described in Section 4.6(a) above with the Secretary of State of the State of Ohio, naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, and containing a description of the collateral consistent with the description of collateral set forth in the Security Agreement, Ironwood will have a perfected security interest under Article 9 of the Ohio UCC in those items of personal property collateral described in the Security Agreement in which a security interest may be perfected solely by the filing of a UCC financing statement with the Secretary of State of the State of Ohio under the Ohio UCC.

Such security interest will constitute a second-priority lien on such collateral, subject and subordinate in all respects to the first-priority liens and security interests granted to and held by Pinnacle Commercial Bank, N.A. (or its successors and assigns as administrative agent and collateral agent under the Senior Credit Agreement), all as more particularly set forth in and subject to the terms and conditions of the Intercreditor Agreement.

We note that the foregoing perfection opinion does not cover, and we express no opinion with respect to, any collateral or categories of collateral in which a security interest cannot be perfected solely by the filing of a UCC financing statement under the Ohio UCC, including, without limitation, (i) deposit accounts (which require perfection by control under Ohio Revised Code Section 1309.314), (ii) investment property (to the extent perfection requires control under Ohio Revised Code Section 1309.314), (iii) letter-of-credit rights (to the extent perfection requires control under Ohio Revised Code Section 1309.314), (iv) electronic chattel paper (to the extent perfection requires control under Ohio Revised Code Section 1309.105), (v) money (which requires perfection by possession), (vi) collateral subject to a certificate of title statute under Ohio Revised Code Section 1309.311, and (vii) any collateral for which the Ohio UCC does not provide for perfection by the filing of a financing statement.

4.8 Perfection of Security Interests — Pledge of Membership Interests

Upon the execution and delivery of the Pledge Agreement by the Borrower, and assuming the Pledge Agreement remains in full force and effect, Ironwood will have a security interest in one hundred percent (100%) of the membership interests in Crestline Coatings Inc. held by the Borrower (the "Pledged Interests").

To the extent that the Pledged Interests constitute "securities" within the meaning of Article 8 of the Ohio UCC (Ohio Revised Code Chapter 1308), and are evidenced by certificates, perfection of the security interest therein would require delivery of such certificates to Ironwood (or its agent), together with duly executed instruments of transfer or undated stock powers endorsed in blank. To the extent that the Pledged Interests are "uncertificated securities" under Article 8 of the Ohio UCC, perfection may be achieved by control or by the filing of a financing statement.

To the extent that the Pledged Interests are not securities governed by Article 8 of the Ohio UCC but instead constitute "general intangibles" under Article 9 of the Ohio UCC (Ohio Revised Code Section 1309.102(A)(42)), then the security interest in such Pledged Interests will be perfected upon the filing of the UCC-1 financing statements with the Secretary of State of the State of Ohio as described in Section 4.7 above.

In each case, the security interest in the Pledged Interests will constitute a second-priority lien, subject and subordinate in all respects to the first-priority liens and security interests of Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement, as set forth in and subject to the terms and conditions of the Intercreditor Agreement.

4.9 Perfection of Security Interests — Real Property

Upon the due recording of the second-lien Mortgage with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424 (including all improvements, fixtures, and appurtenances thereto as more particularly described in the Mortgage), Ironwood will have a perfected second-priority mortgage lien on such real property under the laws of the State of Ohio.

Such mortgage lien will be subject and subordinate in all respects to the first-priority mortgage lien in favor of Pinnacle Commercial Bank, N.A. (or its successors and assigns as administrative agent and collateral agent under the Senior Credit Agreement), and to all other liens, encumbrances, easements, restrictions, and other matters of record or otherwise disclosed in any title insurance commitment or policy obtained in connection with the Transaction. The foregoing opinion assumes that the Mortgage is in proper form for recording under Ohio law, that applicable recording fees and real estate transfer taxes, if any, have been or will be duly paid, and that the Mortgage will be properly indexed by the Montgomery County Recorder's Office upon recording.

V. Qualifications and Limitations

The opinions expressed in this letter are subject to the following qualifications and limitations:

1. Jurisdictional Limitation. The opinions expressed herein are limited to the laws of the State of New York, the laws of the State of Ohio, and the federal laws of the United States of America, in each case as currently in effect on the date hereof. We express no opinion as to the laws of any other jurisdiction, including, without limitation, the State of Delaware (except to the extent of our assumptions regarding the due organization, valid existence, and authority of Ironwood Capital Finance LLC, Ridgeway Capital Partners Fund III, L.P., and other entities organized under the laws of such State or any other State, as set forth in Section III above). We are admitted to practice law in the State of New York, and our opinions with respect to Ohio law are based upon our review of applicable Ohio statutes and reported judicial decisions and, where noted, upon the certificates of Ohio public officials.

2. Excluded Subject Matter. We express no opinion with respect to: (a) federal or state securities laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any state blue sky or securities laws; (b) federal, state, or local tax laws, including the Internal Revenue Code of 1986, as amended; (c) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any rules or regulations promulgated thereunder; (d) federal, state, or local environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), or any analogous state laws; (e) federal, state, or local antitrust or competition laws; (f) federal, state, or local health, safety, or labor laws, including the Occupational Safety and Health Act ("OSHA"), the Fair Labor Standards Act, the National Labor Relations Act, or any analogous state laws; (g) laws, rules, or regulations governing regulated industries, including banking, insurance, telecommunications, energy, or public utility industries; or (h) the laws of any foreign jurisdiction.

3. Equitable Principles and Bankruptcy Exception. The enforceability opinions set forth herein are subject to (a) the effect of bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium, receivership, conservatorship, or similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, and (b) the effect of general principles of equity, including principles of commercial reasonableness, good faith and fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies (regardless of whether enforcement is considered in a proceeding in equity or at law).

4. Particular Remedies. We express no opinion as to the enforceability of any particular remedy provided for in the Loan Documents, including, without limitation, provisions relating to specific performance, injunctive relief, self-help remedies (including set-off), or provisions relating to indemnification, contribution, or exculpation to the extent that any such provision may be limited or rendered unenforceable by applicable law or public policy. The unenforceability of any particular provision or remedy does not, in our opinion, render the Loan Documents invalid as a whole, and there exist in the Loan Documents or pursuant to applicable law legally adequate remedies for the practical realization of the principal benefits intended to be provided thereby.

5. Waiver and Procedural Provisions. We express no opinion as to the enforceability of any provision in the Loan Documents (a) purporting to waive the right to trial by jury, (b) consenting to the jurisdiction or venue of any particular court or waiving any objection to jurisdiction or venue, (c) purporting to waive the right to assert counterclaims or defenses, (d) purporting to establish evidentiary standards, or (e) purporting to waive rights or defenses that may not be waived as a matter of law.

6. Priority Limitations. The opinions expressed herein regarding the second-priority status of the liens and security interests granted to the Lender are based solely on (a) the provisions of the Intercreditor Agreement as they relate to the relative priority of the first-priority liens of Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement and the second-priority liens of the Lender under the Loan Documents, and (b) the applicable provisions of the Ohio UCC regarding the priority of security interests perfected by filing. We express no opinion as to the priority of the second-priority liens of the Lender vis-à-vis any liens, security interests, or encumbrances held by any person or entity other than Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement, including, without limitation, any statutory liens, tax liens, judgment liens, mechanics' liens, materialmen's liens, or any other liens that may have arisen or may hereafter arise by operation of law. Our priority opinions are further limited by the assumptions set forth in Section III above and do not take into account any future advances, modifications, or refinancings under the Senior Credit Agreement or the Loan Documents.

7. Date Limitation. This opinion letter speaks only as of the date hereof. We assume no obligation, and hereby disclaim any obligation, to update or supplement this opinion letter to reflect any changes in law or fact that may occur after the date hereof, or to inform you of any circumstances, facts, or developments of which we may become aware after the date hereof that could affect the opinions expressed herein.

8. Reliance on Certificates. In rendering the opinions set forth herein, we have relied, to the extent we deemed appropriate and without independent investigation or verification, upon (a) certificates of public officials, including good standing certificates issued by the Secretary of State of the State of Ohio, and (b) the Officer's Certificate and other certificates of officers and authorized representatives of the Borrower and Crestline Coatings Inc. as to certain factual matters. We have assumed that all such certificates are true, correct, and complete as of the date hereof.

VI. Reliance and Benefit

This opinion letter is furnished solely for the benefit of Ironwood Capital Finance LLC and its permitted successors and assigns under the Credit Agreement, solely in connection with the Transaction, and solely in reliance upon the assumptions, qualifications, and limitations set forth herein. This opinion letter may not be relied upon by any other person or entity, or for any other purpose, without the prior written consent of Calderwood & Harkness LLP.

Without limiting the generality of the foregoing, this opinion letter may not be quoted in whole or in part, summarized, abstracted, referred to, or furnished to any other party, except:

(a) as may be required by applicable law, regulation, governmental rule, or legal process (including any subpoena or similar compulsory process), provided that you provide us with prompt written notice of any such requirement to the extent legally permissible;

(b) to Whitfield & Rao LLP, 51 West 52nd Street, 34th Floor, New York, New York 10019, acting in its capacity as legal counsel to Ironwood Capital Finance LLC, solely in connection with the Transaction; and

(c) to any federal, state, or local governmental or regulatory authority having jurisdiction over Ironwood Capital Finance LLC, in connection with any examination, investigation, or inquiry by such authority, provided that any such disclosure is made subject to an acknowledgment that such authority may not rely upon this opinion letter without our prior written consent.

Notwithstanding the foregoing, to the extent expressly permitted by Section 12.04 of the Credit Agreement, this opinion letter may be relied upon by any assignee or participant that acquires an interest in the obligations under the Credit Agreement in accordance with the terms thereof; provided, that any such assignee or participant shall be deemed to have acknowledged and agreed that (i) this opinion letter speaks only as of the date hereof, (ii) we have no obligation to update this opinion letter or to notify any such person of any changes in law or fact occurring after the date hereof, and (iii) such reliance is subject to all of the assumptions, qualifications, limitations, and exceptions set forth herein.

VII. Signature

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Philip Hartmann

Title: Partner

1251 Avenue of the Americas, 40th Floor New York, New York 10020 Telephone: (212) 548-6000 Facsimile: (212) 548-6001

Email: phartmann@calderwoodharkness.com

CALDERWOOD & HARKNESS LLP Attorneys at Law
1251 Avenue of the Americas, 40th Floor New York, New York 10020
Telephone: (212) 548-6000 Facsimile: (212) 548-6001
April 22, 2021
Ironwood Capital Finance LLC 600 Lexington Avenue, 22nd Floor New York, New York 10022
Attention: Derek Calloway, Managing Director
Re: Legal Opinion — $20,000,000 Mezzanine Credit Agreement dated as of April 22, 2021, among Crestline Packaging Solutions LLC, as Borrower, and Ironwood Capital Finance LLC, as Lender
Ladies and Gentlemen:
I. Introduction and Role
We have acted as counsel to Crestline Packaging Solutions LLC, a limited liability company duly formed under the laws of the State of Ohio (the "Borrower" or "Crestline"), in connection with the negotiation, execution, and delivery of the Mezzanine Credit Agreement dated as of April 22, 2021 (the "Credit Agreement"), by and between the Borrower and Ironwood Capital Finance LLC, a limited liability company organized under the laws of the State of Delaware (the "Lender" or "Ironwood"), and the related Loan Documents (as defined below) entered into in connection therewith (collectively, the "Transaction").
This opinion letter is delivered to you pursuant to Section 5.01(h) of the Credit Agreement as a condition precedent to the initial borrowing under the Credit Agreement on the date hereof. We are delivering this opinion solely in our capacity as counsel to the Borrower and, where specified herein, to Crestline Coatings Inc., a corporation organized under the laws of the State of Ohio and a wholly owned subsidiary of the Borrower ("Crestline Coatings" and, together with the Borrower, each an "Opinion Party" and collectively, the "Opinion Parties").
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Credit Agreement unless the context otherwise requires.
II. Documents Examined
In connection with the preparation and delivery of this opinion, we have examined originals or copies (certified or otherwise identified to our satisfaction) of the following documents:
A. Transaction Documents
The following documents are collectively referred to herein as the "Loan Documents":
1.  The Mezzanine Credit Agreement dated as of April 22, 2021 (the "Credit Agreement"), by and between Crestline Packaging Solutions LLC, as Borrower, and Ironwood Capital Finance LLC, as Lender, providing for a mezzanine term loan facility in the original principal amount of Twenty Million Dollars ($20,000,000);
2.  The Mezzanine Promissory Note dated April 22, 2021 (the "Note"), in the original principal amount of $20,000,000, issued by Crestline Packaging Solutions LLC in favor of Ironwood Capital Finance LLC, evidencing the Borrower's obligation to repay the mezzanine term loan;
3.  The Security Agreement (Second Lien) dated as of April 22, 2021 (the "Security Agreement"), by Crestline Packaging Solutions LLC and Crestline Coatings Inc. (collectively, the "Grantors") in favor of Ironwood Capital Finance LLC, as secured party, granting a second-priority security interest in substantially all personal property of the Grantors;
4.  The Intercreditor Agreement dated as of April 22, 2021 (the "Intercreditor Agreement"), among Pinnacle Commercial Bank, N.A., a national banking association, in its capacity as administrative agent and collateral agent under the Senior Credit Agreement (as defined below) (the "Senior Agent"), Ironwood Capital Finance LLC, in its capacity as mezzanine lender, and acknowledged and agreed to by Crestline Packaging Solutions LLC;
5.  The Pledge Agreement dated as of April 22, 2021 (the "Pledge Agreement"), by Crestline Packaging Solutions LLC in favor of Ironwood Capital Finance LLC, pursuant to which the Borrower has pledged one hundred percent (100%) of the membership interests in Crestline Coatings Inc. as collateral security for the Obligations (as defined in the Credit Agreement); and
6.  The Warrant Agreement dated as of April 22, 2021 (the "Warrant Agreement"), between Crestline Packaging Solutions LLC and Ironwood Capital Finance LLC, providing for the issuance of warrants to purchase certain equity interests of the Borrower on the terms and conditions set forth therein.
B. Organizational and Ancillary Documents
In addition to the Loan Documents described above, we have also examined the following organizational, corporate governance, and ancillary documents:
(a) Certificate of Formation of Crestline Packaging Solutions LLC, as filed with the Secretary of State of the State of Ohio (OH SOS Filing No. 4217835), together with all amendments thereto;
(b) The Amended and Restated Operating Agreement of Crestline Packaging Solutions LLC, dated as of June 14, 2017, as amended by (i) the First Amendment to Operating Agreement dated as of September 12, 2019 and (ii) the Second Amendment to Operating Agreement dated as of April 22, 2021 (collectively, the "Operating Agreement");
(c) Articles of Incorporation of Crestline Coatings Inc., as filed with the Secretary of State of the State of Ohio (OH SOS Filing No. 4389201), together with all amendments thereto;
(d) Amended and Restated Bylaws of Crestline Coatings Inc., as currently in effect (the "Bylaws");
(e) A Certificate of Good Standing for Crestline Packaging Solutions LLC issued by the Secretary of State of the State of Ohio, dated April 19, 2021;
(f) A Certificate of Good Standing for Crestline Coatings Inc. issued by the Secretary of State of the State of Ohio, dated April 20, 2021;
(g) Written consent resolutions of the members of Crestline Packaging Solutions LLC (including Ridgeway Capital Partners Fund III, L.P., as the majority member holding approximately 78% of the outstanding membership interests, and Gerald F. Novak, as the minority member holding approximately 22% of the outstanding membership interests), dated April 19, 2021, authorizing the Transaction and approving the execution, delivery, and performance of each of the Loan Documents by the Borrower (the "Member Resolutions");
(h) Resolutions of the Board of Directors of Crestline Coatings Inc., adopted by unanimous written consent dated April 19, 2021, authorizing the execution, delivery, and performance by Crestline Coatings Inc. of the Security Agreement and each other Loan Document to which it is a party (the "Board Resolutions");
(i) Officer's Certificate of Crestline Packaging Solutions LLC, dated April 22, 2021, executed and delivered by Patricia Gallagher, Chief Financial Officer, and Raymond Cho, General Counsel, certifying as to certain factual matters, including the accuracy and completeness of the organizational documents, the incumbency of signing officers, and the truth and accuracy of the representations and warranties contained in the Loan Documents (the "Officer's Certificate");
(j) The Credit Agreement dated as of September 12, 2019 (as amended by the First Amendment thereto dated March 1, 2020, and the Second Amendment thereto dated November 15, 2020), among Crestline Packaging Solutions LLC, Crestline Coatings Inc., the lenders from time to time party thereto, and Pinnacle Commercial Bank, N.A., as administrative agent and collateral agent (as so amended, the "Senior Credit Agreement");
(k) Consent letter from Pinnacle Commercial Bank, N.A., dated March 15, 2021, in its capacity as administrative agent under the Senior Credit Agreement, consenting to the incurrence by the Borrower of the mezzanine indebtedness contemplated by the Credit Agreement and the related Loan Documents, and to the granting of second-priority liens on the Borrower's and Crestline Coatings Inc.'s assets in favor of the Lender (the "Senior Lender Consent");
(l) UCC-1 financing statements naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, prepared for filing with the Secretary of State of the State of Ohio;
(m) Second-Lien Open-End Mortgage, Assignment of Rents, Security Agreement and Fixture Filing, to be recorded with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424 (the "Mortgage");
(n) Results of searches of Uniform Commercial Code filings, federal and state tax lien filings, judgment lien filings, and pending litigation and bankruptcy proceedings with respect to Crestline Packaging Solutions LLC and Crestline Coatings Inc., each conducted by Ashgrove Services Inc. as of April 16, 2021, in the State of Ohio and the United States District Court for the Southern District of Ohio (collectively, the "Search Results"); and
(o) Such other documents, records, certificates, and instruments as we have deemed necessary or appropriate for the purposes of rendering the opinions set forth herein.
III. Assumptions
In rendering the opinions set forth in this letter, we have, with your permission and without independent investigation or verification, assumed the following:
(a) Genuineness of Signatures. All signatures on documents examined by us (other than the signatures of officers and authorized representatives of the Borrower and Crestline Coatings Inc.) are genuine, and all persons executing such documents on behalf of any party (other than the Opinion Parties) were duly authorized to do so.
(b) Authenticity of Documents. All documents submitted to us as originals are authentic and complete, and all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise) conform to the originals thereof, which originals are themselves authentic and complete.
(c) Completeness of Documents. All documents examined by us are complete and have not been amended, supplemented, restated, or terminated, except as expressly stated herein or in such documents, and there are no oral or written modifications or waivers of any of the provisions of such documents, except as disclosed to us in writing.
(d) Organization and Standing of Other Parties. Each party to the Loan Documents (other than the Borrower and Crestline Coatings Inc.) has been duly organized or formed, is validly existing, and is in good standing under the laws of its respective jurisdiction of organization or formation, and has all requisite power and authority, organizational or otherwise, to conduct its business as presently conducted and to own, lease, and operate its properties and assets.
(e) Authority of Other Parties. Each party to the Loan Documents (other than the Borrower and Crestline Coatings Inc.) has the full organizational power and authority to execute, deliver, and perform its respective obligations under each Loan Document to which it is a party, and the execution, delivery, and performance of such Loan Documents have been duly authorized by all necessary organizational action on the part of each such party.
(f) Due Execution by Other Parties. Each Loan Document has been duly authorized, executed, and delivered by each party thereto (other than the Borrower and Crestline Coatings Inc.).
(g) Binding Obligations of Other Parties. Each Loan Document constitutes the legal, valid, and binding obligation of each party thereto (other than the Borrower and Crestline Coatings Inc.), enforceable against each such party in accordance with its respective terms, subject to applicable bankruptcy, insolvency, and equitable principles.
(h) Good Faith and Value. Ironwood Capital Finance LLC has given value and has acted in good faith in connection with the Transaction for purposes of the perfection and priority opinions set forth herein, including for all purposes under Article 9 of the Uniform Commercial Code as in effect in the State of Ohio (the "Ohio UCC").
(i) Accuracy of Factual Representations. The factual statements, representations, and warranties made by officers of the Borrower and Crestline Coatings Inc. in the Officer's Certificate, the Loan Documents, and all other closing certificates and documents delivered in connection with the Transaction are true, correct, and complete as of the date hereof, and we have relied upon such statements, representations, and warranties without independent investigation or verification.
(j) Filing and Recording. All UCC financing statements and the Mortgage described herein will be duly and properly filed or recorded, as applicable, in the appropriate offices and jurisdictions, and such filings or recordings will be properly indexed by the applicable filing or recording offices.
We have not independently verified any of the foregoing assumptions. To the extent that any of the foregoing assumptions proves to be incorrect, the opinions expressed herein may be adversely affected.
IV. Opinions
Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth in Section V below, we are of the opinion that:
4.1 Due Organization and Good Standing — Crestline Packaging Solutions LLC
Crestline Packaging Solutions LLC is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Ohio. The Borrower was formed by the filing of its Certificate of Formation with the Secretary of State of the State of Ohio (OH SOS Filing No. 4217835), and such Certificate of Formation has not been amended, revoked, or canceled, except as disclosed in the organizational documents reviewed by us. Based upon our review of the Certificate of Good Standing issued by the Secretary of State of the State of Ohio dated April 19, 2021, the Borrower is in good standing under Ohio law as of such date.
The Borrower has all requisite limited liability company power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted, including the operation of its packaging manufacturing and distribution business from its principal place of business located at 4510 Harshman Road, Dayton, Ohio 45424.
4.2 Due Organization and Good Standing — Crestline Coatings Inc.
Crestline Coatings Inc. is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of Ohio. Crestline Coatings was incorporated by the filing of its Articles of Incorporation with the Secretary of State of the State of Ohio (OH SOS Filing No. 4389201), and such Articles of Incorporation have not been amended, revoked, or canceled, except as disclosed in the organizational documents reviewed by us. Based upon our review of the Certificate of Good Standing issued by the Secretary of State of the State of Ohio dated April 20, 2021, Crestline Coatings is in good standing under Ohio law as of such date.
Crestline Coatings is a wholly owned subsidiary of Crestline Packaging Solutions LLC, with its registered address at 4510 Harshman Road, Dayton, Ohio 45424. Crestline Coatings has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted, including the manufacturing and sale of specialty industrial coatings and related products.
4.3 Authorization and Due Execution
The execution, delivery, and performance by the Borrower of each of the Loan Documents to which it is a party have been duly authorized by all necessary limited liability company action on the part of the Borrower, including the approval of the members of Crestline Packaging Solutions LLC as set forth in the Member Resolutions. Without limiting the generality of the foregoing, we have confirmed that Ridgeway Capital Partners Fund III, L.P., as the holder of approximately seventy-eight percent (78%) of the outstanding membership interests in the Borrower and constituting the requisite majority interest under the Operating Agreement, has duly approved and authorized the Transaction and the execution, delivery, and performance of the Loan Documents by the Borrower, and that Gerald F. Novak, as the holder of the remaining approximately twenty-two percent (22%) of the outstanding membership interests, has similarly consented to and approved the Transaction.
The execution, delivery, and performance by Crestline Coatings Inc. of each of the Loan Documents to which it is a party, specifically the Security Agreement (Second Lien) dated as of April 22, 2021 and such other Loan Documents as require execution by Crestline Coatings, have been duly authorized by all necessary corporate action, including the unanimous written consent of the Board of Directors of Crestline Coatings Inc. as set forth in the Board Resolutions. No further action by the shareholders of Crestline Coatings Inc. is required under the Articles of Incorporation, Bylaws, or applicable Ohio law for such authorization.
Each Loan Document to which the Borrower is a party has been duly executed and delivered by the Borrower by Gerald F. Novak, in his capacity as Chief Executive Officer, and Patricia Gallagher, in her capacity as Chief Financial Officer, each of whom is duly authorized to execute and deliver such documents on behalf of the Borrower. Each Loan Document to which Crestline Coatings Inc. is a party has been duly executed and delivered by Crestline Coatings Inc. by its duly authorized officer(s). No other approvals, consents, or authorizations of any member, manager, officer, director, or other person are required under the organizational documents of either Opinion Party or under applicable Ohio law in order to authorize the Transaction.
4.4 Enforceability.  Each of the Loan Documents to which the Borrower or Crestline Coatings Inc. is a party constitutes the legal, valid, and binding obligation of such Opinion Party, enforceable against such Opinion Party in accordance with its respective terms, except as such enforceability may be limited by:
(i) applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium, receivership, conservatorship, or similar laws relating to or affecting the enforcement of creditors' rights generally, as from time to time in effect; and
(ii) general principles of equity, including principles of commercial reasonableness, good faith and fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies (regardless of whether enforcement is considered in a proceeding in equity or at law).
The opinions expressed in this Section 4.4 are limited to the laws of the State of New York (which is the governing law designated in each of the Loan Documents), the laws of the State of Ohio (solely as to organizational matters relating to the Opinion Parties and as to the perfection and priority of security interests and liens on assets located in the State of Ohio), and the federal laws of the United States of America. We express no opinion as to the laws of any other jurisdiction, including the State of Delaware.
We note that each of the Loan Documents provides that it is governed by and shall be construed in accordance with the laws of the State of New York. We are members of the bar of the State of New York and are familiar with the laws of such State. Based on New York General Obligations Law Section 5-1401, we believe that the choice of New York law in the Loan Documents would be honored by a New York court, and based on Ohio Revised Code Section 1301.05 (Ohio UCC Section 1-301) and general Ohio conflict of laws principles, we believe that an Ohio court would also give effect to such choice of law, subject in each case to the exceptions and qualifications noted herein.
4.5 No Conflicts
The execution, delivery, and performance by the Borrower and Crestline Coatings Inc. of the Loan Documents to which each is a party, and the consummation by each such Opinion Party of the transactions contemplated thereby, do not and will not:
(a) violate, conflict with, or result in any breach of any provision of the Certificate of Formation or Operating Agreement of Crestline Packaging Solutions LLC, or the Articles of Incorporation or Bylaws of Crestline Coatings Inc.;
(b) violate, conflict with, or result in a breach of any applicable law, statute, rule, or regulation of the State of New York, the State of Ohio, or the United States of America applicable to the Borrower or Crestline Coatings Inc., in each case that is, in our experience, normally applicable to transactions of the type contemplated by the Loan Documents (it being understood and agreed that this clause (b) is limited to laws of general applicability and that we express no opinion with respect to federal or state environmental laws, tax laws, laws governing employee benefit plans (including ERISA), antitrust or competition laws, health, safety, or labor laws, laws governing regulated industries (including banking, insurance, or telecommunications), securities laws, or any other specialized regulatory regime); or
(c) to our knowledge, result in a breach of, or constitute a default (or an event that with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge, or encumbrance (other than liens expressly permitted under the Loan Documents, including the second-priority liens created pursuant to the Security Agreement, the Pledge Agreement, and the Mortgage) upon any property or asset of the Borrower or Crestline Coatings Inc. under, any material agreement, indenture, mortgage, deed of trust, lease, license, or other instrument to which the Borrower or Crestline Coatings Inc. is a party or by which any of its or their respective properties or assets may be bound.
With respect to the opinion set forth in clause (c) above, we note that the incurrence of the mezzanine indebtedness contemplated by the Credit Agreement and the granting of the second-priority liens on the assets of the Borrower and Crestline Coatings Inc. in favor of the Lender is permitted under the Senior Credit Agreement dated as of September 12, 2019, as amended, as evidenced by the consent letter from Pinnacle Commercial Bank, N.A., in its capacity as administrative agent under the Senior Credit Agreement, dated March 15, 2021, a copy of which has been reviewed by us. We have assumed, without independent verification, that such consent letter remains in full force and effect and has not been revoked, amended, or withdrawn as of the date hereof.
For purposes of the opinion set forth in clause (c) above, the phrase "to our knowledge" means the actual knowledge, without independent investigation, of the attorneys within this firm who have devoted substantive legal attention to the Transaction, and does not include constructive knowledge or any duty of inquiry.
4.6 No Governmental Consents Required
No consent, approval, authorization, order, registration, qualification, designation, or filing with any federal, state, or local governmental authority or regulatory body of the State of New York, the State of Ohio, or the United States of America is required to be obtained or made by the Borrower or Crestline Coatings Inc. in connection with the execution, delivery, and performance by either such Opinion Party of the Loan Documents to which it is a party, or the consummation of the transactions contemplated thereby, except for:
(a) the filing of UCC-1 financing statements with the Secretary of State of the State of Ohio naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, as contemplated by the Security Agreement;
(b) the recording of the second-lien Mortgage with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424; and
(c) such filings, recordings, or registrations as may have already been made or obtained on or prior to the date hereof.
The foregoing opinion regarding governmental consents does not extend to any filings, registrations, or approvals that may be required under federal or state securities laws, tax laws, environmental laws, ERISA, antitrust or competition laws, health, safety, or labor laws, or any other specialized regulatory regime, which are expressly excluded from the scope of this opinion.
4.7 Perfection of Security Interests — Personal Property
Upon the filing of the UCC-1 financing statements described in Section 4.6(a) above with the Secretary of State of the State of Ohio, naming each of Crestline Packaging Solutions LLC and Crestline Coatings Inc. as debtor and Ironwood Capital Finance LLC as secured party, and containing a description of the collateral consistent with the description of collateral set forth in the Security Agreement, Ironwood will have a perfected security interest under Article 9 of the Ohio UCC in those items of personal property collateral described in the Security Agreement in which a security interest may be perfected solely by the filing of a UCC financing statement with the Secretary of State of the State of Ohio under the Ohio UCC.
Such security interest will constitute a second-priority lien on such collateral, subject and subordinate in all respects to the first-priority liens and security interests granted to and held by Pinnacle Commercial Bank, N.A. (or its successors and assigns as administrative agent and collateral agent under the Senior Credit Agreement), all as more particularly set forth in and subject to the terms and conditions of the Intercreditor Agreement.
We note that the foregoing perfection opinion does not cover, and we express no opinion with respect to, any collateral or categories of collateral in which a security interest cannot be perfected solely by the filing of a UCC financing statement under the Ohio UCC, including, without limitation, (i) deposit accounts (which require perfection by control under Ohio Revised Code Section 1309.314), (ii) investment property (to the extent perfection requires control under Ohio Revised Code Section 1309.314), (iii) letter-of-credit rights (to the extent perfection requires control under Ohio Revised Code Section 1309.314), (iv) electronic chattel paper (to the extent perfection requires control under Ohio Revised Code Section 1309.105), (v) money (which requires perfection by possession), (vi) collateral subject to a certificate of title statute under Ohio Revised Code Section 1309.311, and (vii) any collateral for which the Ohio UCC does not provide for perfection by the filing of a financing statement.
4.8 Perfection of Security Interests — Pledge of Membership Interests
Upon the execution and delivery of the Pledge Agreement by the Borrower, and assuming the Pledge Agreement remains in full force and effect, Ironwood will have a security interest in one hundred percent (100%) of the membership interests in Crestline Coatings Inc. held by the Borrower (the "Pledged Interests").
To the extent that the Pledged Interests constitute "securities" within the meaning of Article 8 of the Ohio UCC (Ohio Revised Code Chapter 1308), and are evidenced by certificates, perfection of the security interest therein would require delivery of such certificates to Ironwood (or its agent), together with duly executed instruments of transfer or undated stock powers endorsed in blank. To the extent that the Pledged Interests are "uncertificated securities" under Article 8 of the Ohio UCC, perfection may be achieved by control or by the filing of a financing statement.
To the extent that the Pledged Interests are not securities governed by Article 8 of the Ohio UCC but instead constitute "general intangibles" under Article 9 of the Ohio UCC (Ohio Revised Code Section 1309.102(A)(42)), then the security interest in such Pledged Interests will be perfected upon the filing of the UCC-1 financing statements with the Secretary of State of the State of Ohio as described in Section 4.7 above.
In each case, the security interest in the Pledged Interests will constitute a second-priority lien, subject and subordinate in all respects to the first-priority liens and security interests of Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement, as set forth in and subject to the terms and conditions of the Intercreditor Agreement.
4.9 Perfection of Security Interests — Real Property
Upon the due recording of the second-lien Mortgage with the Montgomery County, Ohio Recorder's Office, encumbering the real property located at 4510 Harshman Road, Dayton, Ohio 45424 (including all improvements, fixtures, and appurtenances thereto as more particularly described in the Mortgage), Ironwood will have a perfected second-priority mortgage lien on such real property under the laws of the State of Ohio.
Such mortgage lien will be subject and subordinate in all respects to the first-priority mortgage lien in favor of Pinnacle Commercial Bank, N.A. (or its successors and assigns as administrative agent and collateral agent under the Senior Credit Agreement), and to all other liens, encumbrances, easements, restrictions, and other matters of record or otherwise disclosed in any title insurance commitment or policy obtained in connection with the Transaction. The foregoing opinion assumes that the Mortgage is in proper form for recording under Ohio law, that applicable recording fees and real estate transfer taxes, if any, have been or will be duly paid, and that the Mortgage will be properly indexed by the Montgomery County Recorder's Office upon recording.
V. Qualifications and Limitations
The opinions expressed in this letter are subject to the following qualifications and limitations:
1.  Jurisdictional Limitation. The opinions expressed herein are limited to the laws of the State of New York, the laws of the State of Ohio, and the federal laws of the United States of America, in each case as currently in effect on the date hereof. We express no opinion as to the laws of any other jurisdiction, including, without limitation, the State of Delaware (except to the extent of our assumptions regarding the due organization, valid existence, and authority of Ironwood Capital Finance LLC, Ridgeway Capital Partners Fund III, L.P., and other entities organized under the laws of such State or any other State, as set forth in Section III above). We are admitted to practice law in the State of New York, and our opinions with respect to Ohio law are based upon our review of applicable Ohio statutes and reported judicial decisions and, where noted, upon the certificates of Ohio public officials.
2.  Excluded Subject Matter. We express no opinion with respect to: (a) federal or state securities laws, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any state blue sky or securities laws; (b) federal, state, or local tax laws, including the Internal Revenue Code of 1986, as amended; (c) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any rules or regulations promulgated thereunder; (d) federal, state, or local environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), or any analogous state laws; (e) federal, state, or local antitrust or competition laws; (f) federal, state, or local health, safety, or labor laws, including the Occupational Safety and Health Act ("OSHA"), the Fair Labor Standards Act, the National Labor Relations Act, or any analogous state laws; (g) laws, rules, or regulations governing regulated industries, including banking, insurance, telecommunications, energy, or public utility industries; or (h) the laws of any foreign jurisdiction.
3.  Equitable Principles and Bankruptcy Exception. The enforceability opinions set forth herein are subject to (a) the effect of bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium, receivership, conservatorship, or similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, and (b) the effect of general principles of equity, including principles of commercial reasonableness, good faith and fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies (regardless of whether enforcement is considered in a proceeding in equity or at law).
4.  Particular Remedies. We express no opinion as to the enforceability of any particular remedy provided for in the Loan Documents, including, without limitation, provisions relating to specific performance, injunctive relief, self-help remedies (including set-off), or provisions relating to indemnification, contribution, or exculpation to the extent that any such provision may be limited or rendered unenforceable by applicable law or public policy. The unenforceability of any particular provision or remedy does not, in our opinion, render the Loan Documents invalid as a whole, and there exist in the Loan Documents or pursuant to applicable law legally adequate remedies for the practical realization of the principal benefits intended to be provided thereby.
5.  Waiver and Procedural Provisions. We express no opinion as to the enforceability of any provision in the Loan Documents (a) purporting to waive the right to trial by jury, (b) consenting to the jurisdiction or venue of any particular court or waiving any objection to jurisdiction or venue, (c) purporting to waive the right to assert counterclaims or defenses, (d) purporting to establish evidentiary standards, or (e) purporting to waive rights or defenses that may not be waived as a matter of law.
6.  Priority Limitations. The opinions expressed herein regarding the second-priority status of the liens and security interests granted to the Lender are based solely on (a) the provisions of the Intercreditor Agreement as they relate to the relative priority of the first-priority liens of Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement and the second-priority liens of the Lender under the Loan Documents, and (b) the applicable provisions of the Ohio UCC regarding the priority of security interests perfected by filing. We express no opinion as to the priority of the second-priority liens of the Lender vis-à-vis any liens, security interests, or encumbrances held by any person or entity other than Pinnacle Commercial Bank, N.A. under the Senior Credit Agreement, including, without limitation, any statutory liens, tax liens, judgment liens, mechanics' liens, materialmen's liens, or any other liens that may have arisen or may hereafter arise by operation of law. Our priority opinions are further limited by the assumptions set forth in Section III above and do not take into account any future advances, modifications, or refinancings under the Senior Credit Agreement or the Loan Documents.
7.  Date Limitation. This opinion letter speaks only as of the date hereof. We assume no obligation, and hereby disclaim any obligation, to update or supplement this opinion letter to reflect any changes in law or fact that may occur after the date hereof, or to inform you of any circumstances, facts, or developments of which we may become aware after the date hereof that could affect the opinions expressed herein.
8.  Reliance on Certificates. In rendering the opinions set forth herein, we have relied, to the extent we deemed appropriate and without independent investigation or verification, upon (a) certificates of public officials, including good standing certificates issued by the Secretary of State of the State of Ohio, and (b) the Officer's Certificate and other certificates of officers and authorized representatives of the Borrower and Crestline Coatings Inc. as to certain factual matters. We have assumed that all such certificates are true, correct, and complete as of the date hereof.
VI. Reliance and Benefit
This opinion letter is furnished solely for the benefit of Ironwood Capital Finance LLC and its permitted successors and assigns under the Credit Agreement, solely in connection with the Transaction, and solely in reliance upon the assumptions, qualifications, and limitations set forth herein. This opinion letter may not be relied upon by any other person or entity, or for any other purpose, without the prior written consent of Calderwood & Harkness LLP.
Without limiting the generality of the foregoing, this opinion letter may not be quoted in whole or in part, summarized, abstracted, referred to, or furnished to any other party, except:
(a) as may be required by applicable law, regulation, governmental rule, or legal process (including any subpoena or similar compulsory process), provided that you provide us with prompt written notice of any such requirement to the extent legally permissible;
(b) to Whitfield & Rao LLP, 51 West 52nd Street, 34th Floor, New York, New York 10019, acting in its capacity as legal counsel to Ironwood Capital Finance LLC, solely in connection with the Transaction; and
(c) to any federal, state, or local governmental or regulatory authority having jurisdiction over Ironwood Capital Finance LLC, in connection with any examination, investigation, or inquiry by such authority, provided that any such disclosure is made subject to an acknowledgment that such authority may not rely upon this opinion letter without our prior written consent.
Notwithstanding the foregoing, to the extent expressly permitted by Section 12.04 of the Credit Agreement, this opinion letter may be relied upon by any assignee or participant that acquires an interest in the obligations under the Credit Agreement in accordance with the terms thereof; provided, that any such assignee or participant shall be deemed to have acknowledged and agreed that (i) this opinion letter speaks only as of the date hereof, (ii) we have no obligation to update this opinion letter or to notify any such person of any changes in law or fact occurring after the date hereof, and (iii) such reliance is subject to all of the assumptions, qualifications, limitations, and exceptions set forth herein.
VII. Signature
Very truly yours,
CALDERWOOD & HARKNESS LLP
CALDERWOOD & HARKNESS LLP
By: ________
Name: Philip Hartmann
Title: Partner
1251 Avenue of the Americas, 40th Floor New York, New York 10020 Telephone: (212) 548-6000 Facsimile: (212) 548-6001
Email: phartmann@calderwoodharkness.com

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts