JMK Environmental Solutions Inc.

The purpose of a Phase I Environmental Site Assessment (ESA) is to evaluate a property's potential for subjecting its buyers, lenders, insurers and secured creditors to any environmental liability. This liability may be caused by current or past business practices on that property or nearby properties. The Phase I ESA is performed in order to qualify the above parties for the innocent landowner defense under CERCLA (Superfund) liability law. It's primary objective is to identify all Recognized Environmental Conditions (RECs) associated with the subject property. RECs are defined as the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release into structures on the property or into the ground, groundwater or surface water of the property.

JMK performs thorough Phase I ESAs using the American Society of Testing and Materials (ASTM) 1527 as a minimum standard. ASTM 1527 is not intended to include "de minimus" conditions that generally do not present a material risk of harm or that are unlikely to be the subject of enforcement action by governmental agencies.

JMK's Phase 1 ESA determines whether any environmental liability exists on the real estate security, or whether such liability is likely to occur in the future because of activities on-site or at sites nearby. If RECs are found, the assessment indicates the extent of contamination and outlines possible remedial measures. In addition, JMK acknowledges that the client will be relying on the survey when considering whether or not to finance the real estate security.

In addition to ASTM 1527, JMK's Phase 1 ESA is produced in accordance with guidelines such as SBA SOP, Lender policy, CMBS, Fannie Mae and Freddie Mac guidelines. We also customize the ESA to meet lender policy needs (and ASTM E1527 and EPA requirements) regarding non-scope items such as sampling & analysis of asbestos, lead-based paint, lead in water, radon, PCB, etc. Our ESA also incorporates customer-oriented elements such as review of baseline reports, discussions on land-use restriction, conditional closure, recommendation on indemnification or purchase agreements, construction permit issues, and other business environmental risk assessments.

The average cleanup cost for a property on the EPA's National Priority List (NPL) is 40 Million Dollars. Therefore, the value of performing proper due diligence at the time of property acquisition cannot be underestimated.