Contract analysis

I. EXECUTIVE SUMMARY The purpose of this memorandum is to provide the deal team and Crestline's in-house counsel with a detailed legal and technical analysis of the sub-slab soil gas sampling results for trichloroethylene ("TCE") detected beneath Building C at the McKeesport Main Plant, as part of the Phase II Environmental Site Assessment ("Phase II ESA") conducted by TerraVerde Environmental Consulting LLC ("TerraV

II. BACKGROUND A. Property and Facility Description The McKeesport Main Plant serves as the operational headquarters of Allegheny Chemical Coatings, Inc. ("ACC") and is located at 2200 Iron Works Boulevard, McKeesport, Pennsylvania 15132, in Allegheny County. The property encompasses approximately 14.3 acres and contains approximately 185,000 square feet of manufacturing space and 12,000 square feet of office and adm

III. SUB-SLAB SOIL GAS ANALYTICAL RESULTS A. TCE Detection The most significant analytical finding from the sub-slab soil gas sampling beneath Building C is the detection of trichloroethylene ("TCE") at a concentration of 42 µg/m³ (micrograms per cubic meter). The applicable PA DEP vapor intrusion screening level for TCE in sub-slab soil gas is 21 µg/m³, established under PA DEP Technical Guidance Document No. 261-03

IV. REGULATORY FRAMEWORK — PA DEP VAPOR INTRUSION GUIDANCE A. PA DEP Land Recycling Program (Act 2) and Vapor Intrusion The regulatory framework governing the evaluation and remediation of vapor intrusion conditions at contaminated sites in Pennsylvania is anchored in the Pennsylvania Land Recycling and Environmental Remediation Standards Act, commonly known as Act 2 (35 P.S. §§ 6026.101–6026.908). Act 2 establishes

V. OSHA WORKPLACE EXPOSURE STANDARDS A. Occupational Exposure Limits for TCE In addition to the environmental regulatory framework discussed in Section IV, workplace exposure to TCE is regulated under the Occupational Safety and Health Act through standards promulgated by the Occupational Safety and Health Administration ("OSHA"). Although the environmental and occupational frameworks serve different protective purpo

VI. SOURCE ASSESSMENT AND CONTAMINATION PATHWAY ANALYSIS A. Likely Source of TCE As noted in Section III.A, TCE is not currently used in ACC's manufacturing operations at the McKeesport facility. Identifying the source of the TCE detected in sub-slab soil gas is important both for understanding the nature and extent of the contamination and for allocating liability in the proposed transaction. The most likely source

VII. RECOMMENDED MITIGATION MEASURES A. Sub-Slab Depressurization System (SSD) The primary recommended mitigation measure for the Building C vapor intrusion condition is the installation of a sub-slab depressurization ("SSD") system beneath Building C. SSD systems are the most widely used and technically proven engineering control for vapor intrusion mitigation in both residential and commercial/industrial settings,

1. Indoor Air Sampling in Building C. A minimum of three indoor air sampling locations within Building C, selected to represent different areas of the building and different proximity to the former UST field, plus one outdoor/ambient air sample collected at an upwind location as a background reference. Indoor air samples should be collected using Summa canisters and analyzed by EPA Method TO-15, consistent with the s

2. Building Pressure Differential Measurement. A blower door test or equivalent measurement to characterize the pressure relationship between the Building C interior and the sub-slab environment under normal HVAC operating conditions. This measurement will determine whether the building's HVAC system creates positive pressure (which would reduce vapor intrusion) or negative pressure (which would enhance vapor intrusi

3. Multi-Seasonal Sub-Slab and Indoor Air Monitoring. A minimum of two additional sampling rounds — one during the heating season (December–February) and one during the cooling season (June–August) — to establish the temporal variability of vapor intrusion concentrations at the site. Seasonal variation is a critical factor in vapor intrusion assessment, and regulatory agencies typically require multi-seasonal data be

4. Expanded Sub-Slab Soil Gas Survey. Installation of additional sub-slab sampling points to determine the lateral extent of the vapor plume beneath Building C and to evaluate whether the vapor intrusion condition extends beneath Buildings A and/or B, which are located adjacent to Building C and may overlie portions of the same subsurface contamination source zone. These additional investigation steps were not comple

VIII. LIABILITY EXPOSURE ANALYSIS FOR CRESTLINE POST-CLOSING A. Successor Liability Under Pennsylvania Law The proposed acquisition of ACC by Crestline is structured as a stock purchase transaction. In a stock purchase, Crestline would acquire all of the outstanding shares of ACC and thereby become the owner of ACC as a going concern, including all of ACC's assets, operations, contracts, permits — and all of ACC's li