1006-00003 · Crestline Packaging Solutions LLC · Environmental Insurance

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115

Telephone: (216) 555-7400 Facsimile: (216) 555-7401

Matter No. 1006-00003

October 5, 2022

Mr. Douglas Whitfield, Senior Vice President Ms. Lauren Petrov, Account Executive Whitfield & Calder Insurance Advisors LLC 227 West Monroe Street, Suite 1800 Chicago, IL 60606

Re: Pollution Legal Liability Insurance — Underwriting Submission Package Proposed Acquisition of Allegheny Chemical Coatings, Inc. by Crestline Packaging Solutions LLC Calderwood & Harkness Matter No. 1006-00003

Dear Mr. Whitfield and Ms. Petrov:

1. Purpose and Introduction

This letter serves as a formal transmittal of the environmental diligence reports and supporting documentation compiled in connection with Whitfield & Calder Insurance Advisors LLC's ("Whitfield & Calder") engagement to evaluate and place a Pollution Legal Liability ("PLL") insurance policy on behalf of our client, Crestline Packaging Solutions LLC ("Crestline"). As you are aware, Crestline has engaged Whitfield & Calder to structure and place PLL coverage to backstop the environmental risks associated with Crestline's proposed acquisition of Allegheny Chemical Coatings, Inc. ("ACC"), a specialty industrial coatings manufacturer headquartered in McKeesport, Pennsylvania.

Calderwood & Harkness LLP ("Calderwood & Harkness") represents Crestline in the environmental due diligence workstream for this transaction. We have overseen and directed all Phase I and Phase II Environmental Site Assessment activities, conducted comprehensive regulatory compliance reviews across all target facilities, and prepared the analytical memoranda that accompany this submission. The purpose of this letter is to transmit formally the environmental diligence reports and supporting documentation necessary for Whitfield & Calder to prepare and submit a complete PLL underwriting application to Ironclad Specialty Insurance Company (attention: Sean McAllister, Underwriter, Hartford, Connecticut).

For purposes of the underwriting submission, please note that the proposed insured is Crestline Packaging Solutions LLC, an Ohio limited liability company headquartered at 4100 Riverside Commerce Drive, Suite 300, Dayton, Ohio 45402. Crestline is a portfolio company of Briarwood Capital Partners LP (Fund IV). The enclosed materials provide the environmental risk profile of the target company and its facilities, which we believe will permit Ironclad Specialty and any other PLL carriers solicited by Whitfield & Calder to evaluate the proposed risks and issue formal underwriting terms.

2. Transaction Overview

Crestline proposes to acquire one hundred percent (100%) of the outstanding common stock of Allegheny Chemical Coatings, Inc. ("ACC"), a Pennsylvania corporation headquartered at 2200 Iron Works Boulevard, McKeesport, Pennsylvania 15132. ACC is a specialty industrial coatings manufacturer producing epoxy, polyurethane, and solvent-based coatings for the packaging, automotive, and general industrial applications markets. ACC currently operates four facilities across two states (Pennsylvania and West Virginia), employs approximately 310 people, and has been in continuous operation since 1987.

The proposed purchase price for the acquisition is $94.5 million, representing a multiple of 7.0x ACC's trailing twelve-month EBITDA of $13.5 million. The transaction is structured as a stock purchase, meaning that Crestline will succeed to all liabilities of ACC upon closing, including without limitation all environmental liabilities, whether known or unknown, accrued or contingent. This structural characteristic is a principal driver of the need for comprehensive PLL coverage, as Crestline will assume the full environmental liability profile of ACC by operation of law and cannot rely on asset-purchase protections to limit successor liability exposure.

The target closing date for the transaction is the fourth quarter of 2022, with a targeted closing of November 30, 2022. Financing for the acquisition consists of a $65 million senior secured term loan and a $20 million revolving credit facility provided by Commonwealth National Bank, N.A. The lender's commitment letter requires, as a condition to closing, either (a) satisfactory Phase I Environmental Site Assessments at all target facilities with no unaddressed Recognized Environmental Conditions ("RECs"), or (b) acceptable Pollution Legal Liability insurance in place at or prior to closing. Given the Phase I and Phase II findings summarized in Section 4 below, the latter alternative — placement of PLL insurance — is the path being pursued by Crestline in satisfaction of the lender's requirement. The remaining equity contribution of $9.5 million will be funded by Briarwood Capital Partners Fund IV LP.

The transaction timeline is aggressive, and we emphasize that placement of acceptable PLL coverage is a closing condition. Accordingly, we respectfully request that Whitfield & Calder submit this underwriting package to Ironclad Specialty on an expedited basis and communicate to the underwriter the importance of timely issuance of formal terms.

3. Summary of Target Facilities

ACC operates four facilities across the Commonwealth of Pennsylvania and the State of West Virginia. All four facilities are included within the proposed scope of PLL coverage. A summary of each facility is set forth below. Detailed environmental findings for each facility are addressed in Section 4 and in the enclosed diligence reports.

3.1 Facility 1 — McKeesport Main Plant (Headquarters)

Address: 2200 Iron Works Boulevard, McKeesport, PA 15132 County/State: Allegheny County, Pennsylvania Tax Parcel ID: 0383-M-00125-0000-00 Acreage: 14.3 acres Improvements: Approximately 185,000 square feet of manufacturing space (Buildings A, B, C, and D) and approximately 12,000 square feet of office space (Building E) Operations: Primary solvent-based and epoxy coating manufacturing, including mixing, blending, pigment dispersion, thinning, filling, labeling, and warehousing. This facility serves as ACC's principal manufacturing site and corporate headquarters. Ownership: Owned in fee simple by ACC since 1987. The property was acquired from the bankruptcy estate of Keystone Metalworks, a defunct steel fabrication operation that occupied the site from approximately 1952 through 1986.

Regulatory Status:

• RCRA Large Quantity Generator; EPA ID No. PAD-098-721-445

• Title V Operating Permit No. TV-0383-0125 (major source; 38.2 tons per year combined Hazardous Air Pollutant ("HAP") emissions, exceeding the major source threshold of 25 tons per year)

• NPDES Permit No. PA0025631 for stormwater discharge to an unnamed tributary of the Youghiogheny River

• EPCRA Section 313 / TRI reporting facility

Key Chemicals of Concern: Toluene, xylene, methyl ethyl ketone (MEK), ethylbenzene, chromium, lead, trichloroethylene (TCE), and tetrachloroethylene (PCE). These chemicals are associated with both current manufacturing operations and legacy uses at the site, including the former steel fabrication activities.

Asbestos-Containing Materials: Asbestos-containing materials ("ACM") have been identified at the facility, including approximately 2,400 linear feet of pipe insulation in Buildings A and B and approximately 14,000 square feet of vinyl floor tiles in Building A. A current Operations & Maintenance Plan is in place (dated September 2019; enclosed as Enclosure 18). Estimated abatement cost, if removal is required, ranges from $180,000 to $310,000.

Lead-Based Paint: Lead-based paint has been identified in the office building (Building E, constructed circa 1955). A lead-based paint survey was conducted in 2019 (enclosed as Enclosure 19). Estimated abatement cost ranges from $45,000 to $85,000.

Environmental Risk Rating: Highest among the four facilities. The McKeesport Main Plant presents the most significant environmental risk due to the combination of legacy contamination from the former steel fabrication operation, ongoing use of hazardous chemicals in manufacturing, confirmed subsurface contamination (see Phase II findings in Section 4.2), and vapor intrusion conditions in Building C.

3.2 Facility 2 — Charleroi Specialty Coatings Plant

Address: 450 Industrial Park Road, Charleroi, PA 15022 County/State: Washington County, Pennsylvania Tax Parcel ID: 120-015-00-03-0018-00 Acreage: 8.7 acres Improvements: Approximately 92,000 square feet of manufacturing space and approximately 4,500 square feet of combined office and laboratory space Operations: Water-based and UV-curable coatings manufacturing. This is a newer facility, purpose-built by ACC in 2003 on former agricultural land (greenfield development). The operations at this facility involve lower-hazard coating formulations and do not utilize chlorinated solvents. Ownership: Owned in fee simple by ACC since 2003.

Regulatory Status:

• RCRA Small Quantity Generator; EPA ID No. PAD-112-583-667

• State-Only Operating Permit No. 63-00982 (minor source; emissions below major source thresholds)

Environmental Conditions: No environmental conditions of concern were identified at this facility during the Phase I Environmental Site Assessment. No Phase II investigation was recommended or conducted.

Environmental Risk Rating: Low (clean site). This facility was developed on greenfield agricultural land, utilizes lower-hazard water-based and UV-curable coating technologies, and has no history of environmental releases, regulatory violations, or subsurface contamination.

3.3 Facility 3 — Clarksburg Resin Blending Facility

Address: 1875 Route 50 West, Clarksburg, WV 26301 County/State: Harrison County, West Virginia Tax Parcel ID: 04-0012-0056-0000 Acreage: 5.2 acres Improvements: Approximately 48,000 square feet of warehouse and blending space and approximately 3,000 square feet of office space Operations: Resin receipt, blending, and redistribution. This facility conducts minimal manufacturing activity and primarily serves as a blending and logistics hub for resins supplied to the McKeesport and Charleroi manufacturing plants. Occupancy: Leased from Mountainview Properties LLC (Gerald Boothe, Managing Member) under a triple-net lease with a term of January 1, 2015 through December 31, 2029. Under the lease terms, ACC, as tenant, is obligated to remediate any contamination caused by tenant operations during the lease term. The lease environmental provisions are analyzed in Enclosure 15.

Regulatory Status:

• RCRA Conditionally Exempt Small Quantity Generator; EPA ID No. WVD-054-319-882

• WV DEP Registration Permit R13-3201 (minor source)

Legacy Conditions: The property was formerly operated as a trucking terminal from approximately 1968 through 2012 by Valley Freight Lines Inc. (now dissolved). A 15,000-gallon underground storage tank ("UST") containing diesel fuel was removed in 2012 by the prior tenant. The West Virginia Department of Environmental Protection ("WV DEP") assigned Site ID WVUST-2012-04887 to the UST closure. A closure letter was issued by WV DEP in March 2013; however, the closure documentation indicates that residual diesel-range organics ("DRO") remain in soil above West Virginia action levels. Institutional controls were recorded at the Harrison County Clerk's Office, Book 1245, Page 312, restricting certain uses of the property.

Environmental Risk Rating: Moderate (pending Phase II results). The combination of residual DRO contamination from the prior UST and potential contamination identified during the Phase I ESA (staining on warehouse floor) warrants Phase II investigation, which is currently in progress.

3.4 Facility 4 — Weirton Warehouse & Distribution Center

Address: 600 Commerce Way, Weirton, WV 26062 County/State: Hancock County, West Virginia Tax Parcel ID: 07-0304-0012-0000 Acreage: 3.1 acres Improvements: Approximately 65,000 square feet of warehouse space and approximately 2,000 square feet of office space Operations: Finished goods storage and distribution only; no manufacturing, blending, or chemical processing activities are conducted at this facility. Occupancy: Leased from Northern Panhandle Realty Corp. (Susan Delvecchio, President) under a double-net lease with a term of March 1, 2018 through February 28, 2028. The lease is silent on environmental obligations beyond a general requirement for compliance with applicable law. The lease and VRDP certificate are analyzed in Enclosure 16.

Regulatory Status: This facility is not a hazardous waste generator and does not hold any environmental permits.

Site History: The facility was constructed in 2016 on a remediated brownfield site, specifically a parcel formerly owned by Weirton Steel. The West Virginia Voluntary Remediation and Redevelopment Program ("VRDP") issued a Certificate of Completion for the site in September 2015. Engineering controls (a cap consisting of the building slab and paved parking areas) and institutional controls are in place. A deed restriction was recorded at the Hancock County Clerk's Office, Book 487, Page 89, memorializing the engineering and institutional controls and restricting the property to commercial/industrial use.

Current Conditions: A de minimis condition was noted during the Phase I ESA, consisting of a minor hydraulic fluid stain of approximately four (4) square feet near the loading dock area. This condition does not constitute a REC under the ASTM E1527-21 standard.

Environmental Risk Rating: Low (VRDP controls in place; no manufacturing). Environmental risk at this facility is considered low given the absence of manufacturing operations, the presence of VRDP engineering and institutional controls, and the issuance of the Certificate of Completion.

4. Summary of Environmental Diligence Findings

Environmental diligence for this transaction was conducted by TerraVerde Environmental Consulting LLC ("TerraVerde"), retained by Crestline under the direction of Calderwood & Harkness. The TerraVerde project team consists of the following key personnel:

• Dr. Nina Sorensen, P.E., CHMM — Principal-in-Charge

• Kevin O'Malley, P.G. — Project Manager

• Alicia Reyes, P.G. — Senior Scientist / Phase II Field Lead

Phase I Environmental Site Assessments ("Phase I ESAs") were conducted at all four ACC facilities in accordance with the ASTM E1527-21 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Phase II subsurface investigations have been completed at the McKeesport Main Plant and are in progress at the Clarksburg Resin Blending Facility. The findings of each assessment are summarized below.

4.1 McKeesport Main Plant — Phase I Findings

The Phase I ESA for the McKeesport Main Plant was completed and is dated August 15, 2022 (Enclosure 1). The assessment identified two (2) Recognized Environmental Conditions ("RECs") and one (1) Historical Recognized Environmental Condition ("HREC"), as follows:

REC-1 — Potential Vapor Intrusion from Former UST Field: Elevated volatile organic compound ("VOC") readings were detected in indoor air near the Building C mixing area during the Phase I site reconnaissance. Three 10,000-gallon underground storage tanks were removed from the site in 1993 as part of an earlier environmental response action. Residual subsurface contamination beneath the former UST field area is suspected to be contributing to a vapor intrusion pathway into Building C. The Phase I assessment recommended Phase II subsurface investigation to delineate the nature and extent of contamination and to evaluate the vapor intrusion pathway.

REC-2 — Staining and Stressed Vegetation Along Eastern Property Boundary: Visible staining and stressed vegetation were observed along the eastern property boundary adjacent to an unlined stormwater drainage channel. The area is proximate to an outdoor drum storage area that has been in use since at least the early 1990s. The condition is indicative of a potential release of hazardous substances from the drum storage area, with migration toward the drainage channel and potentially to the unnamed tributary of the Youghiogheny River. The Phase I assessment recommended soil and groundwater sampling in this area.

HREC — 1994 PA DEP Act 2 UST Release: A 1994 Pennsylvania Department of Environmental Protection ("PA DEP") Act 2 filing documents a petroleum release associated with the UST removal activities conducted in 1993. A No Further Action ("NFA") letter was issued by PA DEP in May 2001 under the Statewide Health Standard for soils. Although the NFA was obtained, the residual conditions may still be contributing to the vapor intrusion pathway identified in REC-1, which is why TerraVerde has treated the historical UST area as requiring further investigation.

4.2 McKeesport Main Plant — Phase II Findings

Based on the Phase I ESA findings, a Phase II Environmental Site Assessment was conducted at the McKeesport Main Plant. Field work commenced on September 12, 2022, and included the advancement of eighteen (18) soil borings (designated SB-1 through SB-18) and the installation of six (6) temporary monitoring wells (designated MW-1 through MW-6). Soil and groundwater sampling was completed on September 26, 2022. Samples were submitted for laboratory analysis, and analytical results were received on October 10, 2022. The Phase II ESA report is enclosed as Enclosure 5, and Calderwood & Harkness's Phase II Results Analysis Memorandum is enclosed as Enclosure 6.

The following key exceedances of applicable standards were identified:

The toluene exceedance in groundwater at MW-3 and the TCE exceedance in sub-slab soil gas beneath Building C are the most significant findings. The toluene result confirms the presence of dissolved-phase contamination in the shallow aquifer in the vicinity of the former UST field. The TCE soil vapor result, at twice the applicable PA DEP vapor intrusion screening level, confirms the existence of an active vapor intrusion pathway into Building C and indicates the potential need for mitigation measures, such as a sub-slab depressurization system. Calderwood & Harkness's Vapor Intrusion Risk Assessment Memorandum addressing the Building C conditions is enclosed as Enclosure 7.

The PCE and lead exceedances in soil at borings SB-7 and SB-14, respectively, exceed residential-use standards but fall below the non-residential/industrial standards. Given that the McKeesport facility is zoned for and used as an industrial property, the non-residential standards are applicable. However, these results are noted because they contribute to the overall environmental risk profile and may be relevant in the event of a change of use or in the context of third-party claims.

TerraVerde has prepared a preliminary remediation cost estimate dated October 18, 2022 (Enclosure 8), which projects total remediation costs for the McKeesport Main Plant in the range of $1.2 million to $2.8 million. This estimate encompasses groundwater treatment (alternatives considered include pump-and-treat and in-situ chemical oxidation), installation of a vapor mitigation system (sub-slab depressurization) for Building C, and associated monitoring and reporting costs. The range reflects uncertainty regarding the full lateral and vertical extent of the dissolved-phase plume, which may require additional delineation borings.

4.3 Charleroi Specialty Coatings Plant — Phase I Findings

The Phase I ESA for the Charleroi Specialty Coatings Plant was completed and is dated August 18, 2022 (Enclosure 2). The assessment identified no RECs, no Controlled Recognized Environmental Conditions ("CRECs"), and no HRECs. The Charleroi facility is a clean site developed on former agricultural land, with no identified environmental concerns. No Phase II investigation was recommended or conducted.

4.4 Clarksburg Resin Blending Facility — Phase I Findings

The Phase I ESA for the Clarksburg Resin Blending Facility was completed and is dated August 22, 2022 (Enclosure 3). The assessment identified one (1) CREC and one (1) REC, as follows:

CREC — Residual DRO Contamination with Institutional Controls: As noted in Section 3.3, residual diesel-range organic contamination from the prior UST closure remains in soil at concentrations above West Virginia action levels. Institutional controls were recorded to restrict the use of the property. The presence of residual contamination managed through institutional controls constitutes a CREC under the ASTM E1527-21 standard.

REC — Staining on Warehouse Floor: Staining was observed on the concrete floor in the northeast corner of the warehouse during the site reconnaissance. The staining is located in an area historically used for drum storage and appears consistent with a release of liquid chemicals from drums. The Phase I assessment recommended Phase II subsurface investigation (concrete coring and underlying soil sampling) to determine whether a release has impacted the subsurface.

4.5 Clarksburg Resin Blending Facility — Phase II Status (Pending)

Based on the Phase I ESA findings, a Phase II subsurface investigation was initiated at the Clarksburg Resin Blending Facility. Field work commenced on October 3, 2022, and included the advancement of eight (8) soil borings and the installation of three (3) temporary monitoring wells. Soil and groundwater sampling was completed on October 7, 2022. Samples were submitted to Keystone Analytical Laboratories, Inc. (Monroeville, Pennsylvania) for analysis under a standard turnaround schedule. Analytical results are expected by approximately October 28, 2022 but have NOT YET BEEN RECEIVED as of the date of this letter.

Accordingly, the enclosed submission package does not include the Clarksburg Phase II ESA Report or the corresponding Calderwood & Harkness analytical results memorandum. TerraVerde has prepared a preliminary remediation cost estimate for the Clarksburg facility, contingent on confirmation of contamination by the Phase II results, projecting costs of approximately $350,000 to $750,000 for soil excavation and off-site disposal, with an additional $150,000 to $400,000 if groundwater is found to be impacted.

Calderwood & Harkness will supplement this submission with the Clarksburg Phase II analytical results and a corresponding results analysis memorandum as soon as they become available. We anticipate transmitting this supplemental information to Whitfield & Calder no later than the first week of November 2022.

4.6 Weirton Warehouse & Distribution Center — Phase I Findings

The Phase I ESA for the Weirton Warehouse & Distribution Center was completed and is dated August 25, 2022 (Enclosure 4). The assessment identified one (1) CREC and one de minimis condition, as follows:

CREC — WV VRDP Site with Ongoing Controls: As described in Section 3.4, the Weirton facility was constructed on a remediated brownfield site subject to a WV VRDP Certificate of Completion with ongoing engineering and institutional controls. The presence of residual contamination managed through engineering controls (cap) and institutional controls (deed restriction) constitutes a CREC.

De Minimis Condition — Hydraulic Fluid Stain: A minor hydraulic fluid stain of approximately four (4) square feet was observed near the loading dock area. This condition does not rise to the level of a REC and does not warrant further investigation.

No Phase II investigation was recommended or conducted for the Weirton facility.

4.7 Aggregate Environmental Liability Estimate

Based on the environmental diligence completed to date, the aggregate estimated environmental liabilities for all four ACC facilities are as follows:

These estimates are preliminary and subject to revision upon receipt of the Clarksburg Phase II analytical results. The estimates do not include the costs of ongoing environmental compliance, permit renewals, or emissions monitoring, which are considered ordinary course operational expenses. Additionally, the estimates reflect direct remediation and abatement costs only and do not account for potential third-party claims, natural resource damages, or other contingent liabilities that may be covered under a PLL policy. The significant range between the low and high estimates underscores the importance of PLL coverage to backstop downside environmental risk in connection with this transaction.

5. Regulatory and Compliance Overview

Calderwood & Harkness has conducted comprehensive regulatory compliance reviews of all ACC facilities. The detailed findings are set forth in the enclosed compliance review memoranda (Enclosures 10 through 14), to which we respectfully direct the underwriter's attention. A brief summary of key regulatory and compliance findings is provided below for reference.

RCRA Compliance: All four ACC facilities are in substantial compliance with applicable RCRA requirements. The McKeesport Main Plant, as a Large Quantity Generator, is subject to the most extensive requirements. The facility was last inspected by PA DEP on April 14, 2021, with no violations cited. Generator records, manifests, and training documentation reviewed by Calderwood & Harkness are current and complete.

Clean Air Act Compliance: The McKeesport Main Plant is classified as a major source under the Clean Air Act, with combined HAP emissions of 38.2 tons per year (exceeding the major source threshold of 25 tons per year). The facility operates under Title V Operating Permit No. TV-0383-0125. A permit modification application for the installation of a thermal oxidizer on Production Line 4 was submitted to PA DEP in March 2022 and remains pending. The Charleroi and Clarksburg facilities operate under minor source permits and are in compliance with applicable requirements.

Clean Water Act / NPDES Compliance: The McKeesport Main Plant holds NPDES Permit No. PA0025631 for stormwater discharge. Review of Discharge Monitoring Reports ("DMRs") revealed one exceedance: in March 2022, total suspended solids ("TSS") were reported at 48 mg/L against a permitted limit of 40 mg/L, representing a 20% exceedance. The exceedance was self-reported by ACC in its DMR submission. No enforcement action was taken by PA DEP. ACC implemented corrective measures, including installation of additional sediment filtration media in the stormwater management system, and subsequent DMRs show compliance with permit limits.

EPCRA / TRI Reporting: The McKeesport Main Plant is subject to EPCRA Section 313 (Toxics Release Inventory) reporting requirements. For reporting year 2021, ACC reported releases of toluene (12,400 pounds) and xylene (8,700 pounds) to the TRI. Tier II chemical inventory reports and emergency planning notifications are current.

Spill History: Review of spill records identified two reportable spills at the McKeesport Main Plant within the last ten years:

(a) June 2017 — Xylene Spill: Approximately 50 gallons of xylene were released during a drum transfer operation in the outdoor drum storage area. The spill was contained on-site using absorbent materials and did not reach surface water. The spill was reported to the PA DEP Emergency Response Program. PA DEP issued a No Further Action determination following confirmation of cleanup completion.

(b) February 2020 — Epoxy Hardener Release: Approximately 120 gallons of epoxy hardener were released to a floor drain connected to the sanitary sewer system. The release was reported to the local publicly owned treatment works ("POTW") and to PA DEP. PA DEP assessed a civil penalty of $4,500, which was paid by ACC. Corrective actions, including installation of a secondary containment system and floor drain plugs in the mixing area, were completed.

CERCLA / Superfund: None of the four ACC facilities appears on the National Priorities List ("NPL"). The McKeesport Main Plant is located within approximately 0.5 miles of the former Irwin Iron & Steel Superfund site; however, no connection between the two sites has been identified in the environmental diligence, and ACC has not received any CERCLA information requests, potentially responsible party ("PRP") notifications, or other correspondence regarding the Irwin Iron & Steel site.

6. Enclosed Documents

The following documents are enclosed with this letter for inclusion in the underwriting submission package to Ironclad Specialty Insurance Company. Documents are numbered sequentially for ease of reference:

Enclosure 1: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — McKeesport Main Plant, 2200 Iron Works Boulevard, McKeesport, PA 15132 (dated August 15, 2022)

Enclosure 2: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Charleroi Specialty Coatings Plant, 450 Industrial Park Road, Charleroi, PA 15022 (dated August 18, 2022)

Enclosure 3: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Clarksburg Resin Blending Facility, 1875 Route 50 West, Clarksburg, WV 26301 (dated August 22, 2022)

Enclosure 4: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Weirton Warehouse & Distribution Center, 600 Commerce Way, Weirton, WV 26062 (dated August 25, 2022)

Enclosure 5: TerraVerde Environmental Consulting LLC, Phase II Environmental Site Assessment Report — McKeesport Main Plant, 2200 Iron Works Boulevard, McKeesport, PA 15132 (analytical results received October 10, 2022), including complete laboratory analytical data packages

Enclosure 6: Calderwood & Harkness LLP, Phase II Results Analysis Memorandum — McKeesport Main Plant (dated October 14, 2022)

Enclosure 7: Calderwood & Harkness LLP, Vapor Intrusion Risk Assessment Memorandum — McKeesport Building C (dated October 16, 2022)

Enclosure 8: TerraVerde Environmental Consulting LLC, Preliminary Remediation Cost Estimate — McKeesport Main Plant (dated October 18, 2022)

Enclosure 9: Calderwood & Harkness LLP, Comprehensive Environmental Diligence Summary Memorandum (DRAFT, dated October 22, 2022) — Note: This document is in draft form. The Clarksburg Phase II findings have not yet been incorporated, and the conclusions section is in outline form only. A finalized version will be provided upon receipt of Clarksburg Phase II analytical results.

Enclosure 10: Calderwood & Harkness LLP, RCRA Compliance Review Memorandum — All ACC Facilities

Enclosure 11: Calderwood & Harkness LLP, Clean Air Act Compliance Review Memorandum — ACC Facilities

Enclosure 12: Calderwood & Harkness LLP, Clean Water Act / NPDES Compliance Review Memorandum — McKeesport

Enclosure 13: Calderwood & Harkness LLP, EPCRA / TRI / Tier II Reporting Review Memorandum — McKeesport

Enclosure 14: Calderwood & Harkness LLP, Spill History and Enforcement Review Memorandum — ACC Facilities

Enclosure 15: Calderwood & Harkness LLP, Clarksburg Lease Environmental Provisions Analysis (Mountainview Properties LLC Lease)

Enclosure 16: Calderwood & Harkness LLP, Weirton Lease and VRDP Certificate Review (Northern Panhandle Realty Corp.)

Enclosure 17: Copies of Key Environmental Permits, including:

(a) Title V Operating Permit No. TV-0383-0125 (McKeesport) (b) State-Only Operating Permit No. 63-00982 (Charleroi) (c) WV DEP Registration Permit R13-3201 (Clarksburg) (d) NPDES Permit No. PA0025631 (McKeesport)

Enclosure 18: Asbestos Operations & Maintenance Plan — McKeesport Main Plant (dated September 2019)

Enclosure 19: Lead-Based Paint Survey Report — McKeesport Main Plant (2019)

7. Documents to Follow (Supplemental Submissions)

The following documents are not yet available and will be transmitted to Whitfield & Calder as supplemental submissions as soon as they become available:

(a) TerraVerde Phase II ESA Report — Clarksburg Resin Blending Facility. Analytical results from Keystone Analytical Laboratories, Inc. are pending. Results are expected by approximately October 28, 2022. The Phase II report will be transmitted to Whitfield & Calder upon receipt and review.

(b) Calderwood & Harkness Phase II Results Analysis Memorandum — Clarksburg. This memorandum will be prepared upon receipt of the Keystone Analytical Laboratories data and will analyze the results in the context of applicable West Virginia environmental standards and the Mountainview Properties LLC lease obligations.

(c) Updated/Finalized Comprehensive Environmental Diligence Summary Memorandum. The draft memorandum enclosed as Enclosure 9 will be updated to incorporate the Clarksburg Phase II findings and will include a finalized conclusions section. This updated memorandum will be transmitted as soon as the Clarksburg data has been analyzed.

(d) TerraVerde Remediation Cost Estimates — Clarksburg. If the Clarksburg Phase II results confirm contamination requiring remediation, TerraVerde will prepare a detailed remediation cost estimate for the Clarksburg facility. This estimate will supplement or replace the preliminary range of $350,000 to $1,150,000 referenced in Section 4.5 above.

We anticipate that the supplemental materials described above will be available for transmittal no later than the first week of November 2022. We will provide updates to Whitfield & Calder regarding the status of the Clarksburg Phase II results as they become available.

8. Requested PLL Coverage Parameters

Referencing our prior discussions with Mr. Whitfield and Ms. Petrov regarding the desired PLL coverage structure, Calderwood & Harkness sets forth below the key coverage parameters that should be communicated to the underwriter as part of the formal submission.

Proposed Insured: Crestline Packaging Solutions LLC, and its successors and assigns, including Allegheny Chemical Coatings, Inc. post-closing. The policy should name Crestline as the first named insured and ACC as an additional named insured effective upon the closing of the stock acquisition.

Covered Locations: All four ACC facilities:

(i) McKeesport Main Plant — 2200 Iron Works Boulevard, McKeesport, PA 15132 (ii) Charleroi Specialty Coatings Plant — 450 Industrial Park Road, Charleroi, PA 15022 (iii) Clarksburg Resin Blending Facility — 1875 Route 50 West, Clarksburg, WV 26301 (iv) Weirton Warehouse & Distribution Center — 600 Commerce Way, Weirton, WV 26062

Coverage Sought: The PLL policy should provide coverage for, at minimum, the following:

(a) Third-party claims for bodily injury and property damage arising from pollution conditions at, on, under, or migrating from the covered locations;

(b) First-party remediation and cleanup costs for both pre-existing and new (post-inception) pollution conditions at the covered locations;

(c) Defense costs, including costs of legal defense, expert fees, and related expenses incurred in connection with covered claims;

(d) Regulatory compliance costs, including costs incurred in response to government-mandated investigation or cleanup orders relating to pollution conditions at the covered locations;

(e) Transportation coverage for pollution conditions arising from the transport of materials to and from the covered locations; and

(f) Non-owned disposal site ("NODS") coverage for third-party claims arising from the disposal of waste generated at the covered locations at off-site disposal facilities.

Areas of Particular Concern: Calderwood & Harkness respectfully requests that Whitfield & Calder emphasize the following areas of particular underwriting significance to Ironclad Specialty:

(a) Pre-existing contamination at McKeesport: The Phase II findings confirm the presence of toluene in groundwater at concentrations exceeding the PA Act 2 Statewide Health Standard, as well as PCE and lead in soil at concentrations exceeding residential standards. Coverage for known, pre-existing contamination conditions at the McKeesport facility is essential.

(b) Vapor intrusion conditions at McKeesport Building C: TCE in sub-slab soil gas at Building C was detected at twice the PA DEP vapor intrusion screening level, confirming an active vapor intrusion pathway. Coverage for remediation of this condition and for any associated bodily injury or property damage claims is critical.

(c) Potential contamination at Clarksburg: Phase II results are pending. Coverage should encompass contamination conditions at the Clarksburg facility that may be identified by the Phase II investigation, including both the potential ACC-related contamination (warehouse floor staining area) and the residual DRO from the prior UST release.

(d) Legacy conditions at leased sites: At the Clarksburg facility, residual diesel contamination with institutional controls presents a potential liability. At the Weirton facility, the VRDP brownfield remediation with ongoing engineering and institutional controls presents a contingent liability in the event of control failure. Coverage for these legacy conditions should be addressed.

We note that coverage for known and pre-existing conditions is critical to this transaction given the confirmed Phase II findings at McKeesport and the potential findings at Clarksburg. The known-conditions exclusion typically found in standard PLL policy forms is a primary concern and must be specifically addressed in the policy placement. Calderwood & Harkness's strong preference is for a policy form that either eliminates the known-conditions exclusion with respect to the specific conditions identified in the enclosed Phase I and Phase II ESAs, or provides an affirmative grant of coverage for such conditions by scheduled endorsement.

Additionally, we emphasize that Commonwealth National Bank, N.A. (lender) requires either satisfactory resolution of all identified RECs or acceptable PLL insurance in place as a condition of its $65 million term loan commitment. Accordingly, the PLL policy must be in a form and substance satisfactory to the lender. We anticipate that the lender may request to be named as a loss payee or additional insured under the policy, and the policy form should accommodate such an endorsement.

9. Desired Policy Terms (Indicative)

Calderwood & Harkness understands that Ironclad Specialty Insurance Company has previously indicated potential interest in providing PLL coverage for this transaction. Based on our understanding of the discussions between Whitfield & Calder and Ironclad Specialty, the following indicative terms have been discussed:

We emphasize that these are non-binding indications only and are subject to Ironclad Specialty's review and underwriting of the complete submission package enclosed herewith. Calderwood & Harkness requests that Whitfield & Calder formally submit the enclosed package to Ironclad Specialty for binding underwriting consideration and the issuance of a formal quotation with binding terms, conditions, and exclusions.

In addition, we request that Whitfield & Calder solicit alternative quotations from other PLL carriers in the market for comparison purposes. Obtaining competitive quotations will allow Crestline to evaluate available coverage options and pricing and will ensure that the most favorable terms are obtained. We defer to Whitfield & Calder's judgment regarding the selection of additional carriers to approach, but we note that the submission should be limited to carriers with demonstrated experience in underwriting PLL policies for manufacturing facilities with known contamination conditions.

Finally, we request that Whitfield & Calder provide a timeline for receipt of formal underwriting terms from Ironclad Specialty and any alternative carriers. Given the targeted transaction closing date of November 30, 2022, it is imperative that binding quotations be received no later than the week of November 7, 2022, to allow sufficient time for policy review, negotiation, and binding prior to closing.

10. Confidentiality and Privilege

All materials enclosed with this letter are confidential and proprietary to Crestline Packaging Solutions LLC and are provided solely for purposes of obtaining PLL insurance underwriting in connection with Crestline's proposed acquisition of ACC. The enclosed materials should not be used, disclosed, or disseminated for any other purpose.

We note specifically that certain of the enclosed materials constitute attorney work product and/or attorney-client privileged communications prepared by Calderwood & Harkness LLP in the course of its legal representation of Crestline. These materials include, without limitation, the Phase II Results Analysis Memorandum (Enclosure 6), the Vapor Intrusion Risk Assessment Memorandum (Enclosure 7), the Comprehensive Environmental Diligence Summary Memorandum (Enclosure 9), the RCRA Compliance Review Memorandum (Enclosure 10), the Clean Air Act Compliance Review Memorandum (Enclosure 11), the Clean Water Act / NPDES Compliance Review Memorandum (Enclosure 12), the EPCRA / TRI / Tier II Reporting Review Memorandum (Enclosure 13), the Spill History and Enforcement Review Memorandum (Enclosure 14), the Clarksburg Lease Environmental Provisions Analysis (Enclosure 15), and the Weirton Lease and VRDP Certificate Review (Enclosure 16). The transmittal of these privileged materials to Whitfield & Calder and to PLL underwriters for purposes of obtaining insurance coverage does not constitute a waiver of any applicable attorney-client privilege, attorney work product protection, or other privilege or immunity.

We respectfully request that Whitfield & Calder maintain the confidentiality of all enclosed materials and restrict access to these materials solely to personnel involved in the PLL underwriting process. Whitfield & Calder should not disclose or transmit any of the enclosed materials to any party other than Ironclad Specialty Insurance Company (and such other PLL carriers as may be approached in connection with the alternative quotation process described in Section 9) without the prior written consent of Calderwood & Harkness. In the event Whitfield & Calder intends to share any of the enclosed materials with a party other than Ironclad Specialty, we request that Whitfield & Calder notify Calderwood & Harkness in advance and obtain our written approval prior to such disclosure.

We further request that Ironclad Specialty Insurance Company (and any other PLL carrier receiving the enclosed materials) execute a confidentiality and non-disclosure agreement in a form reasonably acceptable to Crestline and Calderwood & Harkness, if such an agreement is not already in place. We would be pleased to provide a form of non-disclosure agreement for this purpose upon request.

11. Contact Information and Next Steps

For questions regarding the environmental diligence materials, the regulatory compliance reviews, or any other aspect of this submission package, the primary point of contact is:

Harrison Caldwell, Of Counsel Calderwood & Harkness LLP 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115 Telephone: (216) 555-7418

Email: hcaldwell@calderwoodharkness.com

The secondary contact for this matter is:

Grace Nakamura, Lead Associate Calderwood & Harkness LLP 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115 Telephone: (216) 555-7432

Email: gnakamura@calderwoodharkness.com

Should the underwriter require operational or facility-level information directly from Crestline, the following client contacts are available, provided that such communications are coordinated through Calderwood & Harkness:

Patricia Okonkwo, Vice President, Environmental Health & Safety Crestline Packaging Solutions LLC Telephone: (937) 555-2250

Email: pokonkwo@crestlinepackaging.com

Derek Huang, General Counsel Crestline Packaging Solutions LLC Telephone: (937) 555-2201

Email: dhuang@crestlinepackaging.com

We request that Whitfield & Calder acknowledge receipt of this submission package at your earliest convenience. We would also appreciate the opportunity to schedule a call to discuss underwriting strategy, carrier selection, the anticipated timeline for receipt of formal underwriting terms, and any questions or concerns that arise from the enclosed materials. We propose the week of October 10, 2022, for such a call and are available at Mr. Whitfield's and Ms. Petrov's convenience.

As noted throughout this letter, Calderwood & Harkness will supplement this submission with the Clarksburg Phase II analytical results and a corresponding results analysis memorandum as soon as they become available, which we currently expect no later than the first week of November 2022. We will keep Whitfield & Calder apprised of any developments in the interim.

We appreciate your prompt attention to this matter and look forward to working with you toward timely placement of PLL coverage in advance of the anticipated closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Harrison Caldwell Of Counsel

cc:

Beatrice Holloway, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP Derek Huang, General Counsel, Crestline Packaging Solutions LLC Patricia Okonkwo, Vice President, Environmental Health & Safety, Crestline Packaging Solutions LLC

Enclosures (19) — as listed in Section 6 above

Parameter	Location	Medium	Result	Applicable Standard	Exceedance
Toluene	MW-3	Groundwater	1,420 µg/L	PA Act 2 Statewide Health Standard: 1,000 µg/L	42%
Xylene	MW-3	Groundwater	8,200 µg/L	PA Act 2 Statewide Health Standard: 10,000 µg/L	Below standard (elevated)
Tetrachloroethylene (PCE)	SB-7	Soil	3.8 mg/kg	Residential: 2.4 mg/kg; Non-residential: 14 mg/kg	Exceeds residential; below non-residential
Lead	SB-14	Soil	680 mg/kg	Residential: 450 mg/kg; Non-residential: 1,000 mg/kg	Exceeds residential; below non-residential
Trichloroethylene (TCE)	Sub-slab soil gas, Building C	Soil vapor	42 µg/m³	PA DEP Vapor Intrusion Screening Level: 21 µg/m³	100%
Liability Component	Low Estimate	High Estimate
McKeesport remediation (groundwater treatment, vapor mitigation)	$1,200,000	$2,800,000
Clarksburg soil remediation (contingent on Phase II)	$350,000	$750,000
Clarksburg groundwater contingency	$150,000	$400,000
McKeesport asbestos abatement	$180,000	$310,000
McKeesport lead-based paint abatement	$45,000	$85,000
Total Estimated Environmental Liabilities	$1,925,000	$4,345,000
Term	Indication
Policy Limit	$15,000,000 aggregate / $10,000,000 per occurrence
Policy Term	10 years
Indicative Premium	$187,500
Self-Insured Retention	$250,000

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115
Telephone: (216) 555-7400 Facsimile: (216) 555-7401
Matter No. 1006-00003
October 5, 2022
Mr. Douglas Whitfield, Senior Vice President Ms. Lauren Petrov, Account Executive Whitfield & Calder Insurance Advisors LLC 227 West Monroe Street, Suite 1800 Chicago, IL 60606
Re: Pollution Legal Liability Insurance — Underwriting Submission Package Proposed Acquisition of Allegheny Chemical Coatings, Inc. by Crestline Packaging Solutions LLC Calderwood & Harkness Matter No. 1006-00003
Dear Mr. Whitfield and Ms. Petrov:
1. Purpose and Introduction
This letter serves as a formal transmittal of the environmental diligence reports and supporting documentation compiled in connection with Whitfield & Calder Insurance Advisors LLC's ("Whitfield & Calder") engagement to evaluate and place a Pollution Legal Liability ("PLL") insurance policy on behalf of our client, Crestline Packaging Solutions LLC ("Crestline"). As you are aware, Crestline has engaged Whitfield & Calder to structure and place PLL coverage to backstop the environmental risks associated with Crestline's proposed acquisition of Allegheny Chemical Coatings, Inc. ("ACC"), a specialty industrial coatings manufacturer headquartered in McKeesport, Pennsylvania.
Calderwood & Harkness LLP ("Calderwood & Harkness") represents Crestline in the environmental due diligence workstream for this transaction. We have overseen and directed all Phase I and Phase II Environmental Site Assessment activities, conducted comprehensive regulatory compliance reviews across all target facilities, and prepared the analytical memoranda that accompany this submission. The purpose of this letter is to transmit formally the environmental diligence reports and supporting documentation necessary for Whitfield & Calder to prepare and submit a complete PLL underwriting application to Ironclad Specialty Insurance Company (attention: Sean McAllister, Underwriter, Hartford, Connecticut).
For purposes of the underwriting submission, please note that the proposed insured is Crestline Packaging Solutions LLC, an Ohio limited liability company headquartered at 4100 Riverside Commerce Drive, Suite 300, Dayton, Ohio 45402. Crestline is a portfolio company of Briarwood Capital Partners LP (Fund IV). The enclosed materials provide the environmental risk profile of the target company and its facilities, which we believe will permit Ironclad Specialty and any other PLL carriers solicited by Whitfield & Calder to evaluate the proposed risks and issue formal underwriting terms.
2. Transaction Overview
Crestline proposes to acquire one hundred percent (100%) of the outstanding common stock of Allegheny Chemical Coatings, Inc. ("ACC"), a Pennsylvania corporation headquartered at 2200 Iron Works Boulevard, McKeesport, Pennsylvania 15132. ACC is a specialty industrial coatings manufacturer producing epoxy, polyurethane, and solvent-based coatings for the packaging, automotive, and general industrial applications markets. ACC currently operates four facilities across two states (Pennsylvania and West Virginia), employs approximately 310 people, and has been in continuous operation since 1987.
The proposed purchase price for the acquisition is $94.5 million, representing a multiple of 7.0x ACC's trailing twelve-month EBITDA of $13.5 million. The transaction is structured as a stock purchase, meaning that Crestline will succeed to all liabilities of ACC upon closing, including without limitation all environmental liabilities, whether known or unknown, accrued or contingent. This structural characteristic is a principal driver of the need for comprehensive PLL coverage, as Crestline will assume the full environmental liability profile of ACC by operation of law and cannot rely on asset-purchase protections to limit successor liability exposure.
The target closing date for the transaction is the fourth quarter of 2022, with a targeted closing of November 30, 2022. Financing for the acquisition consists of a $65 million senior secured term loan and a $20 million revolving credit facility provided by Commonwealth National Bank, N.A. The lender's commitment letter requires, as a condition to closing, either (a) satisfactory Phase I Environmental Site Assessments at all target facilities with no unaddressed Recognized Environmental Conditions ("RECs"), or (b) acceptable Pollution Legal Liability insurance in place at or prior to closing. Given the Phase I and Phase II findings summarized in Section 4 below, the latter alternative — placement of PLL insurance — is the path being pursued by Crestline in satisfaction of the lender's requirement. The remaining equity contribution of $9.5 million will be funded by Briarwood Capital Partners Fund IV LP.
The transaction timeline is aggressive, and we emphasize that placement of acceptable PLL coverage is a closing condition. Accordingly, we respectfully request that Whitfield & Calder submit this underwriting package to Ironclad Specialty on an expedited basis and communicate to the underwriter the importance of timely issuance of formal terms.
3. Summary of Target Facilities
ACC operates four facilities across the Commonwealth of Pennsylvania and the State of West Virginia. All four facilities are included within the proposed scope of PLL coverage. A summary of each facility is set forth below. Detailed environmental findings for each facility are addressed in Section 4 and in the enclosed diligence reports.
3.1 Facility 1 — McKeesport Main Plant (Headquarters)
Address: 2200 Iron Works Boulevard, McKeesport, PA 15132 County/State: Allegheny County, Pennsylvania Tax Parcel ID: 0383-M-00125-0000-00 Acreage: 14.3 acres Improvements: Approximately 185,000 square feet of manufacturing space (Buildings A, B, C, and D) and approximately 12,000 square feet of office space (Building E) Operations: Primary solvent-based and epoxy coating manufacturing, including mixing, blending, pigment dispersion, thinning, filling, labeling, and warehousing. This facility serves as ACC's principal manufacturing site and corporate headquarters. Ownership: Owned in fee simple by ACC since 1987. The property was acquired from the bankruptcy estate of Keystone Metalworks, a defunct steel fabrication operation that occupied the site from approximately 1952 through 1986.
Regulatory Status:
• RCRA Large Quantity Generator; EPA ID No. PAD-098-721-445
• Title V Operating Permit No. TV-0383-0125 (major source; 38.2 tons per year combined Hazardous Air Pollutant ("HAP") emissions, exceeding the major source threshold of 25 tons per year)
• NPDES Permit No. PA0025631 for stormwater discharge to an unnamed tributary of the Youghiogheny River
• EPCRA Section 313 / TRI reporting facility
Key Chemicals of Concern: Toluene, xylene, methyl ethyl ketone (MEK), ethylbenzene, chromium, lead, trichloroethylene (TCE), and tetrachloroethylene (PCE). These chemicals are associated with both current manufacturing operations and legacy uses at the site, including the former steel fabrication activities.
Asbestos-Containing Materials: Asbestos-containing materials ("ACM") have been identified at the facility, including approximately 2,400 linear feet of pipe insulation in Buildings A and B and approximately 14,000 square feet of vinyl floor tiles in Building A. A current Operations & Maintenance Plan is in place (dated September 2019; enclosed as Enclosure 18). Estimated abatement cost, if removal is required, ranges from $180,000 to $310,000.
Lead-Based Paint: Lead-based paint has been identified in the office building (Building E, constructed circa 1955). A lead-based paint survey was conducted in 2019 (enclosed as Enclosure 19). Estimated abatement cost ranges from $45,000 to $85,000.
Environmental Risk Rating: Highest among the four facilities. The McKeesport Main Plant presents the most significant environmental risk due to the combination of legacy contamination from the former steel fabrication operation, ongoing use of hazardous chemicals in manufacturing, confirmed subsurface contamination (see Phase II findings in Section 4.2), and vapor intrusion conditions in Building C.
3.2 Facility 2 — Charleroi Specialty Coatings Plant
Address: 450 Industrial Park Road, Charleroi, PA 15022 County/State: Washington County, Pennsylvania Tax Parcel ID: 120-015-00-03-0018-00 Acreage: 8.7 acres Improvements: Approximately 92,000 square feet of manufacturing space and approximately 4,500 square feet of combined office and laboratory space Operations: Water-based and UV-curable coatings manufacturing. This is a newer facility, purpose-built by ACC in 2003 on former agricultural land (greenfield development). The operations at this facility involve lower-hazard coating formulations and do not utilize chlorinated solvents. Ownership: Owned in fee simple by ACC since 2003.
Regulatory Status:
• RCRA Small Quantity Generator; EPA ID No. PAD-112-583-667
• State-Only Operating Permit No. 63-00982 (minor source; emissions below major source thresholds)
Environmental Conditions: No environmental conditions of concern were identified at this facility during the Phase I Environmental Site Assessment. No Phase II investigation was recommended or conducted.
Environmental Risk Rating: Low (clean site). This facility was developed on greenfield agricultural land, utilizes lower-hazard water-based and UV-curable coating technologies, and has no history of environmental releases, regulatory violations, or subsurface contamination.
3.3 Facility 3 — Clarksburg Resin Blending Facility
Address: 1875 Route 50 West, Clarksburg, WV 26301 County/State: Harrison County, West Virginia Tax Parcel ID: 04-0012-0056-0000 Acreage: 5.2 acres Improvements: Approximately 48,000 square feet of warehouse and blending space and approximately 3,000 square feet of office space Operations: Resin receipt, blending, and redistribution. This facility conducts minimal manufacturing activity and primarily serves as a blending and logistics hub for resins supplied to the McKeesport and Charleroi manufacturing plants. Occupancy: Leased from Mountainview Properties LLC (Gerald Boothe, Managing Member) under a triple-net lease with a term of January 1, 2015 through December 31, 2029. Under the lease terms, ACC, as tenant, is obligated to remediate any contamination caused by tenant operations during the lease term. The lease environmental provisions are analyzed in Enclosure 15.
Regulatory Status:
• RCRA Conditionally Exempt Small Quantity Generator; EPA ID No. WVD-054-319-882
• WV DEP Registration Permit R13-3201 (minor source)
Legacy Conditions: The property was formerly operated as a trucking terminal from approximately 1968 through 2012 by Valley Freight Lines Inc. (now dissolved). A 15,000-gallon underground storage tank ("UST") containing diesel fuel was removed in 2012 by the prior tenant. The West Virginia Department of Environmental Protection ("WV DEP") assigned Site ID WVUST-2012-04887 to the UST closure. A closure letter was issued by WV DEP in March 2013; however, the closure documentation indicates that residual diesel-range organics ("DRO") remain in soil above West Virginia action levels. Institutional controls were recorded at the Harrison County Clerk's Office, Book 1245, Page 312, restricting certain uses of the property.
Environmental Risk Rating: Moderate (pending Phase II results). The combination of residual DRO contamination from the prior UST and potential contamination identified during the Phase I ESA (staining on warehouse floor) warrants Phase II investigation, which is currently in progress.
3.4 Facility 4 — Weirton Warehouse & Distribution Center
Address: 600 Commerce Way, Weirton, WV 26062 County/State: Hancock County, West Virginia Tax Parcel ID: 07-0304-0012-0000 Acreage: 3.1 acres Improvements: Approximately 65,000 square feet of warehouse space and approximately 2,000 square feet of office space Operations: Finished goods storage and distribution only; no manufacturing, blending, or chemical processing activities are conducted at this facility. Occupancy: Leased from Northern Panhandle Realty Corp. (Susan Delvecchio, President) under a double-net lease with a term of March 1, 2018 through February 28, 2028. The lease is silent on environmental obligations beyond a general requirement for compliance with applicable law. The lease and VRDP certificate are analyzed in Enclosure 16.
Regulatory Status: This facility is not a hazardous waste generator and does not hold any environmental permits.
Site History: The facility was constructed in 2016 on a remediated brownfield site, specifically a parcel formerly owned by Weirton Steel. The West Virginia Voluntary Remediation and Redevelopment Program ("VRDP") issued a Certificate of Completion for the site in September 2015. Engineering controls (a cap consisting of the building slab and paved parking areas) and institutional controls are in place. A deed restriction was recorded at the Hancock County Clerk's Office, Book 487, Page 89, memorializing the engineering and institutional controls and restricting the property to commercial/industrial use.
Current Conditions: A de minimis condition was noted during the Phase I ESA, consisting of a minor hydraulic fluid stain of approximately four (4) square feet near the loading dock area. This condition does not constitute a REC under the ASTM E1527-21 standard.
Environmental Risk Rating: Low (VRDP controls in place; no manufacturing). Environmental risk at this facility is considered low given the absence of manufacturing operations, the presence of VRDP engineering and institutional controls, and the issuance of the Certificate of Completion.
4. Summary of Environmental Diligence Findings
Environmental diligence for this transaction was conducted by TerraVerde Environmental Consulting LLC ("TerraVerde"), retained by Crestline under the direction of Calderwood & Harkness. The TerraVerde project team consists of the following key personnel:
• Dr. Nina Sorensen, P.E., CHMM — Principal-in-Charge
• Kevin O'Malley, P.G. — Project Manager
• Alicia Reyes, P.G. — Senior Scientist / Phase II Field Lead
Phase I Environmental Site Assessments ("Phase I ESAs") were conducted at all four ACC facilities in accordance with the ASTM E1527-21 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Phase II subsurface investigations have been completed at the McKeesport Main Plant and are in progress at the Clarksburg Resin Blending Facility. The findings of each assessment are summarized below.
4.1 McKeesport Main Plant — Phase I Findings
The Phase I ESA for the McKeesport Main Plant was completed and is dated August 15, 2022 (Enclosure 1). The assessment identified two (2) Recognized Environmental Conditions ("RECs") and one (1) Historical Recognized Environmental Condition ("HREC"), as follows:
REC-1 — Potential Vapor Intrusion from Former UST Field: Elevated volatile organic compound ("VOC") readings were detected in indoor air near the Building C mixing area during the Phase I site reconnaissance. Three 10,000-gallon underground storage tanks were removed from the site in 1993 as part of an earlier environmental response action. Residual subsurface contamination beneath the former UST field area is suspected to be contributing to a vapor intrusion pathway into Building C. The Phase I assessment recommended Phase II subsurface investigation to delineate the nature and extent of contamination and to evaluate the vapor intrusion pathway.
REC-2 — Staining and Stressed Vegetation Along Eastern Property Boundary: Visible staining and stressed vegetation were observed along the eastern property boundary adjacent to an unlined stormwater drainage channel. The area is proximate to an outdoor drum storage area that has been in use since at least the early 1990s. The condition is indicative of a potential release of hazardous substances from the drum storage area, with migration toward the drainage channel and potentially to the unnamed tributary of the Youghiogheny River. The Phase I assessment recommended soil and groundwater sampling in this area.
HREC — 1994 PA DEP Act 2 UST Release: A 1994 Pennsylvania Department of Environmental Protection ("PA DEP") Act 2 filing documents a petroleum release associated with the UST removal activities conducted in 1993. A No Further Action ("NFA") letter was issued by PA DEP in May 2001 under the Statewide Health Standard for soils. Although the NFA was obtained, the residual conditions may still be contributing to the vapor intrusion pathway identified in REC-1, which is why TerraVerde has treated the historical UST area as requiring further investigation.
4.2 McKeesport Main Plant — Phase II Findings
Based on the Phase I ESA findings, a Phase II Environmental Site Assessment was conducted at the McKeesport Main Plant. Field work commenced on September 12, 2022, and included the advancement of eighteen (18) soil borings (designated SB-1 through SB-18) and the installation of six (6) temporary monitoring wells (designated MW-1 through MW-6). Soil and groundwater sampling was completed on September 26, 2022. Samples were submitted for laboratory analysis, and analytical results were received on October 10, 2022. The Phase II ESA report is enclosed as Enclosure 5, and Calderwood & Harkness's Phase II Results Analysis Memorandum is enclosed as Enclosure 6.
The following key exceedances of applicable standards were identified:
The toluene exceedance in groundwater at MW-3 and the TCE exceedance in sub-slab soil gas beneath Building C are the most significant findings. The toluene result confirms the presence of dissolved-phase contamination in the shallow aquifer in the vicinity of the former UST field. The TCE soil vapor result, at twice the applicable PA DEP vapor intrusion screening level, confirms the existence of an active vapor intrusion pathway into Building C and indicates the potential need for mitigation measures, such as a sub-slab depressurization system. Calderwood & Harkness's Vapor Intrusion Risk Assessment Memorandum addressing the Building C conditions is enclosed as Enclosure 7.
The PCE and lead exceedances in soil at borings SB-7 and SB-14, respectively, exceed residential-use standards but fall below the non-residential/industrial standards. Given that the McKeesport facility is zoned for and used as an industrial property, the non-residential standards are applicable. However, these results are noted because they contribute to the overall environmental risk profile and may be relevant in the event of a change of use or in the context of third-party claims.
TerraVerde has prepared a preliminary remediation cost estimate dated October 18, 2022 (Enclosure 8), which projects total remediation costs for the McKeesport Main Plant in the range of $1.2 million to $2.8 million. This estimate encompasses groundwater treatment (alternatives considered include pump-and-treat and in-situ chemical oxidation), installation of a vapor mitigation system (sub-slab depressurization) for Building C, and associated monitoring and reporting costs. The range reflects uncertainty regarding the full lateral and vertical extent of the dissolved-phase plume, which may require additional delineation borings.
4.3 Charleroi Specialty Coatings Plant — Phase I Findings
The Phase I ESA for the Charleroi Specialty Coatings Plant was completed and is dated August 18, 2022 (Enclosure 2). The assessment identified no RECs, no Controlled Recognized Environmental Conditions ("CRECs"), and no HRECs. The Charleroi facility is a clean site developed on former agricultural land, with no identified environmental concerns. No Phase II investigation was recommended or conducted.
4.4 Clarksburg Resin Blending Facility — Phase I Findings
The Phase I ESA for the Clarksburg Resin Blending Facility was completed and is dated August 22, 2022 (Enclosure 3). The assessment identified one (1) CREC and one (1) REC, as follows:
CREC — Residual DRO Contamination with Institutional Controls: As noted in Section 3.3, residual diesel-range organic contamination from the prior UST closure remains in soil at concentrations above West Virginia action levels. Institutional controls were recorded to restrict the use of the property. The presence of residual contamination managed through institutional controls constitutes a CREC under the ASTM E1527-21 standard.
REC — Staining on Warehouse Floor: Staining was observed on the concrete floor in the northeast corner of the warehouse during the site reconnaissance. The staining is located in an area historically used for drum storage and appears consistent with a release of liquid chemicals from drums. The Phase I assessment recommended Phase II subsurface investigation (concrete coring and underlying soil sampling) to determine whether a release has impacted the subsurface.
4.5 Clarksburg Resin Blending Facility — Phase II Status (Pending)
Based on the Phase I ESA findings, a Phase II subsurface investigation was initiated at the Clarksburg Resin Blending Facility. Field work commenced on October 3, 2022, and included the advancement of eight (8) soil borings and the installation of three (3) temporary monitoring wells. Soil and groundwater sampling was completed on October 7, 2022. Samples were submitted to Keystone Analytical Laboratories, Inc. (Monroeville, Pennsylvania) for analysis under a standard turnaround schedule. Analytical results are expected by approximately October 28, 2022 but have NOT YET BEEN RECEIVED as of the date of this letter.
Accordingly, the enclosed submission package does not include the Clarksburg Phase II ESA Report or the corresponding Calderwood & Harkness analytical results memorandum. TerraVerde has prepared a preliminary remediation cost estimate for the Clarksburg facility, contingent on confirmation of contamination by the Phase II results, projecting costs of approximately $350,000 to $750,000 for soil excavation and off-site disposal, with an additional $150,000 to $400,000 if groundwater is found to be impacted.
Calderwood & Harkness will supplement this submission with the Clarksburg Phase II analytical results and a corresponding results analysis memorandum as soon as they become available. We anticipate transmitting this supplemental information to Whitfield & Calder no later than the first week of November 2022.
4.6 Weirton Warehouse & Distribution Center — Phase I Findings
The Phase I ESA for the Weirton Warehouse & Distribution Center was completed and is dated August 25, 2022 (Enclosure 4). The assessment identified one (1) CREC and one de minimis condition, as follows:
CREC — WV VRDP Site with Ongoing Controls: As described in Section 3.4, the Weirton facility was constructed on a remediated brownfield site subject to a WV VRDP Certificate of Completion with ongoing engineering and institutional controls. The presence of residual contamination managed through engineering controls (cap) and institutional controls (deed restriction) constitutes a CREC.
De Minimis Condition — Hydraulic Fluid Stain: A minor hydraulic fluid stain of approximately four (4) square feet was observed near the loading dock area. This condition does not rise to the level of a REC and does not warrant further investigation.
No Phase II investigation was recommended or conducted for the Weirton facility.
4.7 Aggregate Environmental Liability Estimate
Based on the environmental diligence completed to date, the aggregate estimated environmental liabilities for all four ACC facilities are as follows:
These estimates are preliminary and subject to revision upon receipt of the Clarksburg Phase II analytical results. The estimates do not include the costs of ongoing environmental compliance, permit renewals, or emissions monitoring, which are considered ordinary course operational expenses. Additionally, the estimates reflect direct remediation and abatement costs only and do not account for potential third-party claims, natural resource damages, or other contingent liabilities that may be covered under a PLL policy. The significant range between the low and high estimates underscores the importance of PLL coverage to backstop downside environmental risk in connection with this transaction.
5. Regulatory and Compliance Overview
Calderwood & Harkness has conducted comprehensive regulatory compliance reviews of all ACC facilities. The detailed findings are set forth in the enclosed compliance review memoranda (Enclosures 10 through 14), to which we respectfully direct the underwriter's attention. A brief summary of key regulatory and compliance findings is provided below for reference.
RCRA Compliance: All four ACC facilities are in substantial compliance with applicable RCRA requirements. The McKeesport Main Plant, as a Large Quantity Generator, is subject to the most extensive requirements. The facility was last inspected by PA DEP on April 14, 2021, with no violations cited. Generator records, manifests, and training documentation reviewed by Calderwood & Harkness are current and complete.
Clean Air Act Compliance: The McKeesport Main Plant is classified as a major source under the Clean Air Act, with combined HAP emissions of 38.2 tons per year (exceeding the major source threshold of 25 tons per year). The facility operates under Title V Operating Permit No. TV-0383-0125. A permit modification application for the installation of a thermal oxidizer on Production Line 4 was submitted to PA DEP in March 2022 and remains pending. The Charleroi and Clarksburg facilities operate under minor source permits and are in compliance with applicable requirements.
Clean Water Act / NPDES Compliance: The McKeesport Main Plant holds NPDES Permit No. PA0025631 for stormwater discharge. Review of Discharge Monitoring Reports ("DMRs") revealed one exceedance: in March 2022, total suspended solids ("TSS") were reported at 48 mg/L against a permitted limit of 40 mg/L, representing a 20% exceedance. The exceedance was self-reported by ACC in its DMR submission. No enforcement action was taken by PA DEP. ACC implemented corrective measures, including installation of additional sediment filtration media in the stormwater management system, and subsequent DMRs show compliance with permit limits.
EPCRA / TRI Reporting: The McKeesport Main Plant is subject to EPCRA Section 313 (Toxics Release Inventory) reporting requirements. For reporting year 2021, ACC reported releases of toluene (12,400 pounds) and xylene (8,700 pounds) to the TRI. Tier II chemical inventory reports and emergency planning notifications are current.
Spill History: Review of spill records identified two reportable spills at the McKeesport Main Plant within the last ten years:
(a) June 2017 — Xylene Spill: Approximately 50 gallons of xylene were released during a drum transfer operation in the outdoor drum storage area. The spill was contained on-site using absorbent materials and did not reach surface water. The spill was reported to the PA DEP Emergency Response Program. PA DEP issued a No Further Action determination following confirmation of cleanup completion.
(b) February 2020 — Epoxy Hardener Release: Approximately 120 gallons of epoxy hardener were released to a floor drain connected to the sanitary sewer system. The release was reported to the local publicly owned treatment works ("POTW") and to PA DEP. PA DEP assessed a civil penalty of $4,500, which was paid by ACC. Corrective actions, including installation of a secondary containment system and floor drain plugs in the mixing area, were completed.
CERCLA / Superfund: None of the four ACC facilities appears on the National Priorities List ("NPL"). The McKeesport Main Plant is located within approximately 0.5 miles of the former Irwin Iron & Steel Superfund site; however, no connection between the two sites has been identified in the environmental diligence, and ACC has not received any CERCLA information requests, potentially responsible party ("PRP") notifications, or other correspondence regarding the Irwin Iron & Steel site.
6. Enclosed Documents
The following documents are enclosed with this letter for inclusion in the underwriting submission package to Ironclad Specialty Insurance Company. Documents are numbered sequentially for ease of reference:
Enclosure 1: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — McKeesport Main Plant, 2200 Iron Works Boulevard, McKeesport, PA 15132 (dated August 15, 2022)
Enclosure 2: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Charleroi Specialty Coatings Plant, 450 Industrial Park Road, Charleroi, PA 15022 (dated August 18, 2022)
Enclosure 3: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Clarksburg Resin Blending Facility, 1875 Route 50 West, Clarksburg, WV 26301 (dated August 22, 2022)
Enclosure 4: TerraVerde Environmental Consulting LLC, Phase I Environmental Site Assessment — Weirton Warehouse & Distribution Center, 600 Commerce Way, Weirton, WV 26062 (dated August 25, 2022)
Enclosure 5: TerraVerde Environmental Consulting LLC, Phase II Environmental Site Assessment Report — McKeesport Main Plant, 2200 Iron Works Boulevard, McKeesport, PA 15132 (analytical results received October 10, 2022), including complete laboratory analytical data packages
Enclosure 6: Calderwood & Harkness LLP, Phase II Results Analysis Memorandum — McKeesport Main Plant (dated October 14, 2022)
Enclosure 7: Calderwood & Harkness LLP, Vapor Intrusion Risk Assessment Memorandum — McKeesport Building C (dated October 16, 2022)
Enclosure 8: TerraVerde Environmental Consulting LLC, Preliminary Remediation Cost Estimate — McKeesport Main Plant (dated October 18, 2022)
Enclosure 9: Calderwood & Harkness LLP, Comprehensive Environmental Diligence Summary Memorandum (DRAFT, dated October 22, 2022) — Note: This document is in draft form. The Clarksburg Phase II findings have not yet been incorporated, and the conclusions section is in outline form only. A finalized version will be provided upon receipt of Clarksburg Phase II analytical results.
Enclosure 10: Calderwood & Harkness LLP, RCRA Compliance Review Memorandum — All ACC Facilities
Enclosure 11: Calderwood & Harkness LLP, Clean Air Act Compliance Review Memorandum — ACC Facilities
Enclosure 12: Calderwood & Harkness LLP, Clean Water Act / NPDES Compliance Review Memorandum — McKeesport
Enclosure 13: Calderwood & Harkness LLP, EPCRA / TRI / Tier II Reporting Review Memorandum — McKeesport
Enclosure 14: Calderwood & Harkness LLP, Spill History and Enforcement Review Memorandum — ACC Facilities
Enclosure 15: Calderwood & Harkness LLP, Clarksburg Lease Environmental Provisions Analysis (Mountainview Properties LLC Lease)
Enclosure 16: Calderwood & Harkness LLP, Weirton Lease and VRDP Certificate Review (Northern Panhandle Realty Corp.)
Enclosure 17: Copies of Key Environmental Permits, including:
(a) Title V Operating Permit No. TV-0383-0125 (McKeesport) (b) State-Only Operating Permit No. 63-00982 (Charleroi) (c) WV DEP Registration Permit R13-3201 (Clarksburg) (d) NPDES Permit No. PA0025631 (McKeesport)
Enclosure 18: Asbestos Operations & Maintenance Plan — McKeesport Main Plant (dated September 2019)
Enclosure 19: Lead-Based Paint Survey Report — McKeesport Main Plant (2019)
7. Documents to Follow (Supplemental Submissions)
The following documents are not yet available and will be transmitted to Whitfield & Calder as supplemental submissions as soon as they become available:
(a) TerraVerde Phase II ESA Report — Clarksburg Resin Blending Facility. Analytical results from Keystone Analytical Laboratories, Inc. are pending. Results are expected by approximately October 28, 2022. The Phase II report will be transmitted to Whitfield & Calder upon receipt and review.
(b) Calderwood & Harkness Phase II Results Analysis Memorandum — Clarksburg. This memorandum will be prepared upon receipt of the Keystone Analytical Laboratories data and will analyze the results in the context of applicable West Virginia environmental standards and the Mountainview Properties LLC lease obligations.
(c) Updated/Finalized Comprehensive Environmental Diligence Summary Memorandum. The draft memorandum enclosed as Enclosure 9 will be updated to incorporate the Clarksburg Phase II findings and will include a finalized conclusions section. This updated memorandum will be transmitted as soon as the Clarksburg data has been analyzed.
(d) TerraVerde Remediation Cost Estimates — Clarksburg. If the Clarksburg Phase II results confirm contamination requiring remediation, TerraVerde will prepare a detailed remediation cost estimate for the Clarksburg facility. This estimate will supplement or replace the preliminary range of $350,000 to $1,150,000 referenced in Section 4.5 above.
We anticipate that the supplemental materials described above will be available for transmittal no later than the first week of November 2022. We will provide updates to Whitfield & Calder regarding the status of the Clarksburg Phase II results as they become available.
8. Requested PLL Coverage Parameters
Referencing our prior discussions with Mr. Whitfield and Ms. Petrov regarding the desired PLL coverage structure, Calderwood & Harkness sets forth below the key coverage parameters that should be communicated to the underwriter as part of the formal submission.
Proposed Insured: Crestline Packaging Solutions LLC, and its successors and assigns, including Allegheny Chemical Coatings, Inc. post-closing. The policy should name Crestline as the first named insured and ACC as an additional named insured effective upon the closing of the stock acquisition.
Covered Locations: All four ACC facilities:
(i) McKeesport Main Plant — 2200 Iron Works Boulevard, McKeesport, PA 15132 (ii) Charleroi Specialty Coatings Plant — 450 Industrial Park Road, Charleroi, PA 15022 (iii) Clarksburg Resin Blending Facility — 1875 Route 50 West, Clarksburg, WV 26301 (iv) Weirton Warehouse & Distribution Center — 600 Commerce Way, Weirton, WV 26062
Coverage Sought: The PLL policy should provide coverage for, at minimum, the following:
(a) Third-party claims for bodily injury and property damage arising from pollution conditions at, on, under, or migrating from the covered locations;
(b) First-party remediation and cleanup costs for both pre-existing and new (post-inception) pollution conditions at the covered locations;
(c) Defense costs, including costs of legal defense, expert fees, and related expenses incurred in connection with covered claims;
(d) Regulatory compliance costs, including costs incurred in response to government-mandated investigation or cleanup orders relating to pollution conditions at the covered locations;
(e) Transportation coverage for pollution conditions arising from the transport of materials to and from the covered locations; and
(f) Non-owned disposal site ("NODS") coverage for third-party claims arising from the disposal of waste generated at the covered locations at off-site disposal facilities.
Areas of Particular Concern: Calderwood & Harkness respectfully requests that Whitfield & Calder emphasize the following areas of particular underwriting significance to Ironclad Specialty:
(a) Pre-existing contamination at McKeesport: The Phase II findings confirm the presence of toluene in groundwater at concentrations exceeding the PA Act 2 Statewide Health Standard, as well as PCE and lead in soil at concentrations exceeding residential standards. Coverage for known, pre-existing contamination conditions at the McKeesport facility is essential.
(b) Vapor intrusion conditions at McKeesport Building C: TCE in sub-slab soil gas at Building C was detected at twice the PA DEP vapor intrusion screening level, confirming an active vapor intrusion pathway. Coverage for remediation of this condition and for any associated bodily injury or property damage claims is critical.
(c) Potential contamination at Clarksburg: Phase II results are pending. Coverage should encompass contamination conditions at the Clarksburg facility that may be identified by the Phase II investigation, including both the potential ACC-related contamination (warehouse floor staining area) and the residual DRO from the prior UST release.
(d) Legacy conditions at leased sites: At the Clarksburg facility, residual diesel contamination with institutional controls presents a potential liability. At the Weirton facility, the VRDP brownfield remediation with ongoing engineering and institutional controls presents a contingent liability in the event of control failure. Coverage for these legacy conditions should be addressed.
We note that coverage for known and pre-existing conditions is critical to this transaction given the confirmed Phase II findings at McKeesport and the potential findings at Clarksburg. The known-conditions exclusion typically found in standard PLL policy forms is a primary concern and must be specifically addressed in the policy placement. Calderwood & Harkness's strong preference is for a policy form that either eliminates the known-conditions exclusion with respect to the specific conditions identified in the enclosed Phase I and Phase II ESAs, or provides an affirmative grant of coverage for such conditions by scheduled endorsement.
Additionally, we emphasize that Commonwealth National Bank, N.A. (lender) requires either satisfactory resolution of all identified RECs or acceptable PLL insurance in place as a condition of its $65 million term loan commitment. Accordingly, the PLL policy must be in a form and substance satisfactory to the lender. We anticipate that the lender may request to be named as a loss payee or additional insured under the policy, and the policy form should accommodate such an endorsement.
9. Desired Policy Terms (Indicative)
Calderwood & Harkness understands that Ironclad Specialty Insurance Company has previously indicated potential interest in providing PLL coverage for this transaction. Based on our understanding of the discussions between Whitfield & Calder and Ironclad Specialty, the following indicative terms have been discussed:
We emphasize that these are non-binding indications only and are subject to Ironclad Specialty's review and underwriting of the complete submission package enclosed herewith. Calderwood & Harkness requests that Whitfield & Calder formally submit the enclosed package to Ironclad Specialty for binding underwriting consideration and the issuance of a formal quotation with binding terms, conditions, and exclusions.
In addition, we request that Whitfield & Calder solicit alternative quotations from other PLL carriers in the market for comparison purposes. Obtaining competitive quotations will allow Crestline to evaluate available coverage options and pricing and will ensure that the most favorable terms are obtained. We defer to Whitfield & Calder's judgment regarding the selection of additional carriers to approach, but we note that the submission should be limited to carriers with demonstrated experience in underwriting PLL policies for manufacturing facilities with known contamination conditions.
Finally, we request that Whitfield & Calder provide a timeline for receipt of formal underwriting terms from Ironclad Specialty and any alternative carriers. Given the targeted transaction closing date of November 30, 2022, it is imperative that binding quotations be received no later than the week of November 7, 2022, to allow sufficient time for policy review, negotiation, and binding prior to closing.
10. Confidentiality and Privilege
All materials enclosed with this letter are confidential and proprietary to Crestline Packaging Solutions LLC and are provided solely for purposes of obtaining PLL insurance underwriting in connection with Crestline's proposed acquisition of ACC. The enclosed materials should not be used, disclosed, or disseminated for any other purpose.
We note specifically that certain of the enclosed materials constitute attorney work product and/or attorney-client privileged communications prepared by Calderwood & Harkness LLP in the course of its legal representation of Crestline. These materials include, without limitation, the Phase II Results Analysis Memorandum (Enclosure 6), the Vapor Intrusion Risk Assessment Memorandum (Enclosure 7), the Comprehensive Environmental Diligence Summary Memorandum (Enclosure 9), the RCRA Compliance Review Memorandum (Enclosure 10), the Clean Air Act Compliance Review Memorandum (Enclosure 11), the Clean Water Act / NPDES Compliance Review Memorandum (Enclosure 12), the EPCRA / TRI / Tier II Reporting Review Memorandum (Enclosure 13), the Spill History and Enforcement Review Memorandum (Enclosure 14), the Clarksburg Lease Environmental Provisions Analysis (Enclosure 15), and the Weirton Lease and VRDP Certificate Review (Enclosure 16). The transmittal of these privileged materials to Whitfield & Calder and to PLL underwriters for purposes of obtaining insurance coverage does not constitute a waiver of any applicable attorney-client privilege, attorney work product protection, or other privilege or immunity.
We respectfully request that Whitfield & Calder maintain the confidentiality of all enclosed materials and restrict access to these materials solely to personnel involved in the PLL underwriting process. Whitfield & Calder should not disclose or transmit any of the enclosed materials to any party other than Ironclad Specialty Insurance Company (and such other PLL carriers as may be approached in connection with the alternative quotation process described in Section 9) without the prior written consent of Calderwood & Harkness. In the event Whitfield & Calder intends to share any of the enclosed materials with a party other than Ironclad Specialty, we request that Whitfield & Calder notify Calderwood & Harkness in advance and obtain our written approval prior to such disclosure.
We further request that Ironclad Specialty Insurance Company (and any other PLL carrier receiving the enclosed materials) execute a confidentiality and non-disclosure agreement in a form reasonably acceptable to Crestline and Calderwood & Harkness, if such an agreement is not already in place. We would be pleased to provide a form of non-disclosure agreement for this purpose upon request.
11. Contact Information and Next Steps
For questions regarding the environmental diligence materials, the regulatory compliance reviews, or any other aspect of this submission package, the primary point of contact is:
Harrison Caldwell, Of Counsel Calderwood & Harkness LLP 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115 Telephone: (216) 555-7418
Email: hcaldwell@calderwoodharkness.com
The secondary contact for this matter is:
Grace Nakamura, Lead Associate Calderwood & Harkness LLP 1900 Euclid Avenue, Suite 3200 Cleveland, OH 44115 Telephone: (216) 555-7432
Email: gnakamura@calderwoodharkness.com
Should the underwriter require operational or facility-level information directly from Crestline, the following client contacts are available, provided that such communications are coordinated through Calderwood & Harkness:
Patricia Okonkwo, Vice President, Environmental Health & Safety Crestline Packaging Solutions LLC Telephone: (937) 555-2250
Email: pokonkwo@crestlinepackaging.com
Derek Huang, General Counsel Crestline Packaging Solutions LLC Telephone: (937) 555-2201
Email: dhuang@crestlinepackaging.com
We request that Whitfield & Calder acknowledge receipt of this submission package at your earliest convenience. We would also appreciate the opportunity to schedule a call to discuss underwriting strategy, carrier selection, the anticipated timeline for receipt of formal underwriting terms, and any questions or concerns that arise from the enclosed materials. We propose the week of October 10, 2022, for such a call and are available at Mr. Whitfield's and Ms. Petrov's convenience.
As noted throughout this letter, Calderwood & Harkness will supplement this submission with the Clarksburg Phase II analytical results and a corresponding results analysis memorandum as soon as they become available, which we currently expect no later than the first week of November 2022. We will keep Whitfield & Calder apprised of any developments in the interim.
We appreciate your prompt attention to this matter and look forward to working with you toward timely placement of PLL coverage in advance of the anticipated closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Harrison Caldwell Of Counsel
cc:
Beatrice Holloway, Partner, Calderwood & Harkness LLP Grace Nakamura, Associate, Calderwood & Harkness LLP Derek Huang, General Counsel, Crestline Packaging Solutions LLC Patricia Okonkwo, Vice President, Environmental Health & Safety, Crestline Packaging Solutions LLC
Enclosures (19) — as listed in Section 6 above
Parameter | Location | Medium | Result | Applicable Standard | Exceedance
Toluene | MW-3 | Groundwater | 1,420 µg/L | PA Act 2 Statewide Health Standard: 1,000 µg/L | 42%
Xylene | MW-3 | Groundwater | 8,200 µg/L | PA Act 2 Statewide Health Standard: 10,000 µg/L | Below standard (elevated)
Tetrachloroethylene (PCE) | SB-7 | Soil | 3.8 mg/kg | Residential: 2.4 mg/kg; Non-residential: 14 mg/kg | Exceeds residential; below non-residential
Lead | SB-14 | Soil | 680 mg/kg | Residential: 450 mg/kg; Non-residential: 1,000 mg/kg | Exceeds residential; below non-residential
Trichloroethylene (TCE) | Sub-slab soil gas, Building C | Soil vapor | 42 µg/m³ | PA DEP Vapor Intrusion Screening Level: 21 µg/m³ | 100%
Liability Component | Low Estimate | High Estimate
McKeesport remediation (groundwater treatment, vapor mitigation) | $1,200,000 | $2,800,000
Clarksburg soil remediation (contingent on Phase II) | $350,000 | $750,000
Clarksburg groundwater contingency | $150,000 | $400,000
McKeesport asbestos abatement | $180,000 | $310,000
McKeesport lead-based paint abatement | $45,000 | $85,000
Total Estimated Environmental Liabilities | $1,925,000 | $4,345,000
Term | Indication
Policy Limit | $15,000,000 aggregate / $10,000,000 per occurrence
Policy Term | 10 years
Indicative Premium | $187,500
Self-Insured Retention | $250,000

CONFIDENTIAL

CALDERWOOD & HARKNESS LLP

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