Contract analysis

I. Purpose and Scope The purpose of this memorandum is to provide a detailed legal and technical analysis of the Phase II Environmental Site Assessment ("Phase II ESA") analytical results for the McKeesport Main Plant (the "Facility" or the "Site"), the headquarters and primary manufacturing facility of Allegheny Chemical Coatings, Inc. ("ACC" or the "Target"). This analysis is prepared in connection with the propose

II. Executive Summary TerraVerde's Phase II investigation at the McKeesport Main Plant has confirmed the presence of subsurface contamination associated with both of the Recognized Environmental Conditions identified in the Phase I ESA. The analytical results reveal exceedances of applicable regulatory standards in groundwater and sub-slab soil gas, as well as soil contamination that, while below non-residential stan

III. Background A. Facility Description The McKeesport Main Plant is located at 2200 Iron Works Boulevard, McKeesport, Pennsylvania 15132, in Allegheny County (Parcel ID: 0383-M-00125-0000-00). The Site comprises approximately 14.3 acres and includes approximately 185,000 square feet of manufacturing space distributed across several interconnected buildings (identified in facility records as Buildings A through E) an

IV. Applicable Regulatory Standards A. Pennsylvania Act 2 — Land Recycling and Environmental Remediation Standards Act The Pennsylvania Land Recycling and Environmental Remediation Standards Act, commonly known as "Act 2," was enacted in 1995 (35 P.S. §§ 6026.101–6026.908) to establish a comprehensive framework for the investigation and remediation of contaminated sites in the Commonwealth. Act 2 replaced the prior p

V. Analytical Results — Detailed Findings This section presents a detailed discussion of the Phase II analytical results, organized by medium (groundwater, soil, and sub-slab soil gas). The complete analytical data tables provided by TerraVerde are included as Attachment A; the discussion below highlights the results of greatest significance for purposes of the Transaction. A. Groundwater Results

1. Monitoring Well MW-3 (Former UST Field Area — REC-1) Monitoring well MW-3 is located in the central-western portion of the Site within the footprint of the former UST field area where three 10,000-gallon USTs were removed in 1993. This well was installed to evaluate whether residual contamination from the historic UST releases had migrated to the shallow groundwater system. MW-3 was screened across the water table

2. Other Monitoring Wells (MW-1, MW-2, MW-4, MW-5, MW-6) All monitoring wells other than MW-3 showed analyte concentrations below applicable Statewide Health Standards for all parameters tested. The results from these wells provide useful context for understanding the distribution and extent of contamination at the Site. MW-1 and MW-2 (Upgradient/Cross-Gradient — Background). MW-1 and MW-2 were installed in upgradien

1. Boring SB-7 (Former UST Field Area — REC-1) Soil boring SB-7 is located in the former UST field area, approximately 40 feet east of monitoring well MW-3 and within the footprint of the former UST excavation. Soil samples were collected from SB-7 at depth intervals of 0–2 feet, 4–6 feet, 8–10 feet, and 12–14 feet below ground surface. The sample from the 8–10 foot interval exhibited the highest PID readings during

2. Boring SB-14 (Eastern Boundary — REC-2) Soil boring SB-14 is located near the eastern property boundary, approximately 25 feet from the outdoor drum storage area and approximately 15 feet from the unlined stormwater drainage channel identified in the Phase I ESA as part of REC-2. Soil samples were collected from SB-14 at depth intervals of 0–2 feet, 4–6 feet, and 8–10 feet below ground surface. The shallowest samp

3. Other Soil Borings (SB-1 through SB-18, Excluding SB-7 and SB-14) The remaining sixteen soil borings (SB-1 through SB-6, SB-8 through SB-13, and SB-15 through SB-18) showed analyte concentrations below both residential and non-residential Statewide Health Standards for all parameters tested, including VOCs, SVOCs, RCRA 8 metals, DRO, and GRO. Low-level detections of toluene and xylene were observed in soil samples

VI. Legal Analysis and Implications A. Act 2 Obligations The toluene exceedance in groundwater at monitoring well MW-3 (1,420 µg/L versus the Statewide Health Standard of 1,000 µg/L) represents a confirmed exceedance of the applicable cleanup standard under Act 2. This exceedance establishes that groundwater beneath the McKeesport facility is contaminated at levels that exceed the health-based thresholds established