Transactions Today

An Update for New, Gently Used, and Road-Hardened

Environmental Lawyers

Introductions

• Heidi McIntosh, Associate Director, Southern Utah Wilderness Alliance

• Jon Schuyler Brooks, Partner, Phillips Nizer LLP

• Mike Hill, General Counsel & COO, RACER Trust; Principal at Hill & Kehne

• Claudia Rast, Shareholder, Butzel Long

Setting the Scene

• Mike – General Counsel for Brown Manufacturing, Inc. (“BMI”)

• Jon – Outside Counsel for Sino Solar Partners, Inc. (“Sino”)

• Heidi – Executive Director for Backcountry Trails (“Backcountry”)

Location of Properties

Liability Protections and Ongoing Obligations

― Settlement Agreement ¶¶ 69-73 (Governments shall consider PPAs, BFPPs, and other protections)

― ¶ 78 (continuing access to properties)― ¶ 74 (coordinate cleanup/redevelopment)

www.racertrust.org

Wilmington, DE

― Purchased by Fisker Automotive to manufacture electric hybrid vehicles

Willow Run Factory, Ypsilanti, MI― 300 acres; >5M ft2 bldg(s).― Adjacent to airport.― Built during WWII by

Henry Ford.― Manufactured the B-24

bomber. Rosie the Riveter.

― GM manufactured mid-size and luxury vehicles.

Shreveport, LA

― 530 acres; >3M ft2 bldg(s).

― Fully operational today (GM leasing until Aug. 2012)

Indianapolis Stamping Plant― 100 acres; >2M ft2

bldg(s).― GM leased thru July

2011.― Constructed in 1971;

renovated in 2006.

Massena, NY

― >200 acres.― No slab.― On Saint

Lawrence River, and adjacent to bridge to Canada.

Fredericksburg, VA

― 76 acres; 300K ft2 bldg(s).

― 50 miles from the Pentagon.

Mansfield, OH

― 265 acres; 2.5M ft2 bldg(s).

― Rail; Highway.― Constructed in

1955; renovated in 1984.

BMI Facts

BMI needs to sell Manufacturing Plants• Focus is Plant in Monticello District• Plant assets/liabilities:

– adjacent to BLM land recently identified by DOI as potential oil sands resource

– adjacent to Puebloan lands of cultural significance

– PCB contamination; may have leached– Includes large tracts of undeveloped land

Sino Facts

Sino Looking for Entrée into US•Solar Panel Manufacturer in China •Looking to buy US plant•Risk adverse—anxious about US env’l law•Interested in development potential of oil sands

Backcountry Facts

Backcountry mission is conservation and protection of natural and cultural resources

• BMI contacted Backcountry about potential donation of portion of undeveloped land

• Development concept is Xtreme Skills• Best arena location is near Puebloan

pictographs and petroglyphs• Major donor is on Board of competing energy

exploration company

Issues

• Indemnity

• Risk Allocation—Insurance

• Due Diligence Requirements

• Conflicts of Interest

Indemnity (& Related Provisions)• By Buyer, in return for:

– Reduced purchase price.– Due diligence rights … but likely limited to existing information ( v. the right to sample).– Environmental insurance (and position as 1st Named Insured).– Escrow (limited as to time, and to cover discoveries or claims made during that time)

• By Seller, in return for:– Avoided reduction on purchase price.– Continuing right of access.– Mutual release/indemnity for New Releases (and some ability to delineate).– Agreement as to scope of redevelopment (and investigation except as required by law).– Position as Additional Named Insured (under PLL or Cost Cap or Cost Cap Subsitute).

• By Remediation Contractor, in return for: – Contract to perform known remediation work (typically >$10M), with rewards for reducing costs

(e.g., sharing or keeping savings).– Position as First Named Insured under Cost Cap (or, especially post-2011, Cost Cap

Substitute).– Position as Additional Named Insured under PLL policy.– Due diligence rights … but likely limited to existing information ( v. the right to sample).– Limited to regulatory requirements (v. private claims).