Exide non-prosecution agreement, Appendix 3-6

APPENDIX 3 AMENDED MEMORANDUM OF UNDERSTANDING Exide Technologies ("Exide") and the California Environmental Protection Agency, Department of Toxic Substances Control (the "Department") (collectively referred to as the Parties") agree to, and approve, the submittal forthwith of the attached ?nal Stipulation and Order to the Bankruptcy Court for the District of Delaware. The Parties understand that Exide must obtain approval by the Bankruptcy Court to enter into the Stipulation and Order. Upon approval by the Bankruptcy Court, Exide will execute the document and thereafter, the Department. Upon execution by the Parties, the Stipulation and Order will become effective by its terms and the Parties hereby waive the provisions of paragraph 37 of the Stipulation and Order that require the Approval Order to be a Final Order (as defined in the Stipulation and Order). AGREED TO AND APPROVED: Dated: 2013 Department of Toxic Substances Control Deborah 0. Raphael,?Director Dated: October 2013 Exide Technologies, Inc. By: Robert M. Caruso, President CEO AMENDED MEMORANDUM OF UNDERSTANDING Exide Technologies ("Exide") and the California Environmental Protection Agency, Department of Toxic Substances Control (the "Department") (collectively referred to as the Parties?) agree to, and approve, the submittal forthwith of the attached ?nal Stipulation and Order to the Bankruptcy Court for the District of Delaware. The Parties understand that Exide must obtain approval by the Bankruptcy Court to enter into the Stipulation and Order. Upon approval by the Bankruptcy Court, Exide will execute the document and thereafter, the Department. Upon execution by the Parties, the Stipulation and Order will become effective by its terms and the Parties hereby waive the provisions of paragraph 37 of the Stipulation and Order that require the Approval Order to be a Final Order (as de?ned in the Stipulation and Order). AGREED TO AND APPROVED: Dated: October 2013 Dated: Octoberaz_5, 2013 Department of Toxic Substances Control By: Deborah 0. Raphael, Director Exide Technologies, Inc. Robert M. Caruso, President E0 MOU ATTACHMENT MOU ATTACHMENT STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL Exide Technologies, Inc. 13000 Deerfield Parkway, Suite 200 Docket HWCA: P3-12/13-010 OAH No: 2013050540 Milton, Georgia 30004 In the Matter of: Exide Technologies, Inc. STIPULATION AND ORDER 2700 South Indiana Avenue Vernon, California 90058 Health and Safety Code Section 25186.1 & 25186.2 CAD 097854541 Respondent. Whereas, on April 24, 2013 the California Environmental Protection Agency, Department of Toxic Substances Control ("Department" or "DTSC") issued an Order for Temporary Suspension and an Accusation for Suspension of Interim Status (attached hereto as Exhibits 1 and 2, respectively), (collectively, the "Suspension Order") pursuant to its police and regulatory authority under Health and Safety Code sections 25186.1 and 25186.2, to Exide Technologies, Inc. ("Exide") (collectively the Department and Exide referred to as "the Parties"). Exide is an owner and operator of a facility located at 2700 South Indiana Avenue, Vernon, California 90058 (the "Facility"), which the Department regulates pursuant to a comprehensive statutory and regulatory framework, for the generation, handling, treatment, transport and disposal of hazardous waste. Whereas, Exide has interim status authorization from the Department to operate the Facility. Exide has submitted a Part B hazardous waste facility permit application to the Department, which is under review by the Department. Further, in February 2002, the Department issued a Corrective Action Consent Order, Docket No. P 3-01-02-010, to Exide requiring corrective action for the Facility and Exide remains subject to the requirements of that Corrective Action Consent Order. Whereas, on May 6, 2013, Exide filed a Notice of Defense (attached as Exhibit 3) in this administrative enforcement action requesting a hearing to present its defense to the allegations contained in the Suspension Order. Whereas, on June 3 through June 5, 2013 an administrative hearing was held before Administrative Law Judge Julie Cabos-Owen in this administrative enforcement action. The administrative hearing did not conclude, and has been continued to an as yet unscheduled date. Whereas, on June 10, 2013, Exide filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code, 11 U.S.C.§§ 101 et seq. (the "Bankruptcy Code" in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). As such, Exide is a debtor and debtor-inpossession in bankruptcy case no. 13-11482 (the "Bankruptcy Case"). Whereas, Exide requires Bankruptcy Court authorization to enter into this Stipulation and Order, and Exide will seek approval from the Bankruptcy Court prior to the Department and Exide signing this Stipulation and the Department issuing its Order thereon. -2- Whereas, on June 13, 2013, Exide filed a verified petition for writ of mandate and ex parte application for temporary restraining order and order to show cause re: preliminary injunction in the Superior Court of Los Angeles County, California, Case No. BS143369, (the "California State Court Action"). Whereas, on June 17, 2013, the Los Angeles Superior Court granted Exide's ex parte application and issued a temporary restraining order which stayed the Order for Temporary Suspension and prevented the Department from enforcing it until the hearing and determination on the order to show cause re preliminary injunction. Whereas, on July 2, 2013, in the California State Court Action, the Los Angeles Superior Court granted Exide's request for preliminary injunction, subject to specified conditions regarding Exide's operations of the Facility. The preliminary injunction stayed the Order for Temporary Suspension until this administrative enforcement proceeding is completed. Whereas, on September 16, 2013, the Los Angeles Superior Court, on its own motion, scheduled an order to show cause for October 15, 2013 regarding lifting the stay and dissolving the preliminary injunction granted on July 2, 2013. Litigation in the California State Court Action continues between Exide and the Department. Whereas, a dispute exists between the Department and Exide regarding the Suspension Order. Whereas, Exide has agreed to take certain actions to address air emissions and the storm water conveyance system that were the subject of the Suspension -3- Order. Whereas, Exide has agreed to install additional emission control devices at the Facility and to replace its storm water conveyance system at the Facility based on the Schedule for Compliance set forth below. Whereas, Exide has agreed in cooperation with local health officials and the Department, to institute a soil sampling and blood testing program for properties and residents in the vicinity of the Facility. Whereas, Exide agrees to continue to adhere to all applicable South Coast Air Quality Management District ("SCAQMD") rules, regulations and standards in connection with Exide's ownership and operation of the Facility. Whereas, the Department and Exide have agreed to renew efforts to address remaining issues relating to Exide's pending hazardous waste permit application for the Facility. Whereas, the Department and Exide have agreed to apply certain health risk-based standards for both operational and remediation purposes in connection with the Facility as specified in this Stipulation and Order. Whereas, the Department and Exide agree that continued outreach to, and communication with, local communities is vital to keep the public apprised and to address public confidence in Exide's Facility operations. Whereas, the Parties wish to avoid the expense of further litigation and to jointly ensure prompt action to achieve the Schedule for Compliance set forth below. Therefore, without any findings of fact, conclusions of law or admissions of -4- liability, the Department and Exide enter into and agree to be bound by this Stipulation and Order ("Stipulation and Order") as follows: 1. Jurisdiction to enter into this Stipulation and Order exists pursuant to Health and Safety Code section 25186.1 and 25186.2. 2. Exide and the Department waive any further rights to a hearing, an appeal and any further proceedings on the Suspension Order in this matter. 3. This Stipulation and Order shall constitute full settlement of the allegations alleged in the Suspension Order and as specified in paragraph 35. It does not limit the Department from taking appropriate enforcement action concerning other matters, including enforcement of this Stipulation and Order. The Order for Temporary Suspension (Exhibit 1) issued by the Department shall be deemed dismissed with prejudice on the effective date of this Stipulation and Order. In addition, Exide agrees to stipulate to dissolution of the preliminary injunction against the Department issued in the California State Court Action and further agrees to stipulate to a dismissal of the entire action in Case No. BS143369, with prejudice, said dismissal to be filed within 10 days of the effective date of this Stipulation and Order. Each side in Case No. BS143369 and OAH Case No. 2013050540, Docket HWCA: P3-12/13-010, is to bear its own attorney's fees and costs. 4. By entering into this Stipulation and Order, Exide denies the allegations of the Suspension Order. The Parties agree no provision of this Stipulation and Order shall be construed as an admission of any wrongdoing or a violation of any rule, law, statute, ordinance or regulation by Exide. -5- SCHEDULE FOR COMPLIANCE 5. Exide and the Department stipulate and agree each shall comply with the following as further specified in paragraphs 5.1 through 5.31 below: Proposed Storm Sewer Piping Plan: 5.1. Exide shall operate and maintain a temporary storm water and washdown water collection system (the "Temporary System") in accordance with the Standard Operating Procedure dated May 20, 2013 and conditionally approved by the Department on May 16, 2013. 5.2. By December 27, 2013, Exide shall remove the Temporary System. Failure to remove the Temporary System by that date shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.3. Exide shall implement the comprehensive interim measure ("IM") removal action workplan (the "IM Workplan") approved by the Department on August 21, 2013. 5.4. Exide shall implement a Department-approved sampling plan to determine the full extent of any contamination (lateral and vertical) in soils surrounding the storm sewer pipe system at the Facility as provided in the Department's July 26, 2013 partial approval of the IM Workplan. Soil sampling may be performed in advance of storm sewer pipe removal activities. 5.5. By December 27, 2013, Exide shall complete implementation of the IM Workplan, as approved by the Department, and sampling activities set forth in sections 5.3 and 5.4 above. Failure to implement the IM Workplan and sampling -6- activities as provided herein by that date shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.6. Exide has submitted a cost estimate and shall establish, as provided in section 5.32 below, a financial assurance mechanism to fund activities associated with the maintenance and removal of the Temporary System, and the implementation of the IM Workplan and sampling plan described in sections 5.1-5.5 above. 5.7. Exide submitted to the Department a storm sewer pipeline/sump replacement plan ( the "Replacement Plan") dated July 12, 2013 that was re-issued on August 19, 2013 in response to the Department's comments dated August 14, 2013. The Department approved the implementation of the Replacement Plan on August 21, 2013. 5.8. Exide has submitted a request to the Department for temporary authorization for implementing the Replacement Plan according to California Code of Regulations, title 22, Chapter 20, article 4 followed by submittal to the Department of a Class 2 modification for the Replacement Plan according to California Code of Regulations, title 22, Chapter 20, article 4 within sixty (60) days after the issuance of the temporary authorization. The Department reviewed the request for temporary authorization to implement the Replacement Plan and approved the request for implementation on August 21, 2013. 5.9. Exide shall notify the Department in writing at least seven (7) days prior to beginning each separate phase of field work associated with implementation of the Replacement Plan. At the request of the Department, and -7- subject to the Facility's security and safety procedures, Exide shall allow the Department, or its authorized representative to take splits or duplicate samples of all soil, dust, sediment and water (if encountered) samples collected pursuant to this Stipulation and Order. 5.10. Exide shall submit a completion report which contains as-builts and land survey of the new storm sewer system for the Facility within 30 calendar days after completion. 5.11. Exide may request a modification of the Replacement Plan and the Department shall review and approve, approve with specified conditions or disapprove (with explanation) the request for modification. 5.12. Failure to implement the Replacement Plan and Departmentapproved sampling activities as provided herein shall subject Exide to stipulated penalties as provided in this Stipulation and Order. Health Impacts Reduction Plan: 5.13. On or before January 1, 2015, Exide shall reduce potential health impacts from stationary air emissions sources at the Facility as determined by the AB2588 Health Risk Assessment to a level such that the theoretical cancer risks to affected workers do not exceed ten in a million, theoretical cancer risks to affected residents and sensitive receptors do not exceed four in a million, and the noncancer Hazard Index does not exceed 1 for workers, residents or sensitive receptors. 5.14. For purposes of Exide's continuing operations, the Department agrees to apply: (1) prior to January 1, 2015, the SCAQMD Rule 1402 air quality -8- standards; and (2) on and after January 1, 2015, the air quality standards set forth in section 5.13 above, until the Department takes final action on Exide's Part B hazardous waste facility permit application. 5.15. For purposes of imposing specific permit terms and conditions in a hazardous waste permit for the Facility, the Department shall use a cumulative risk management range of 10 -6 to 10, with 10 -6 being the point of departure or that level of theoretical cancer risk considered to be de minimis risk. (40 C.F.R. §300.430(e)(2)(i)(A)(2); see also Office of Solid Waste and Emergency Response ("OSWER") #9355.0-30 (4/22/91).) The upper bound of the risk management range, 10 -4 , shall be considered an unacceptable risk requiring mitigation or remedial action, although feasible mitigation or remediation measures may be required at risks less than 10 -4 , based on site-specific considerations. (OSWER #9355.0-30 (4/22/91).). In evaluating any mitigation or remedial action measures, the nine balancing criteria in the National Contingency Plan shall be analyzed and applied by the Department. (40 C.F.R. §300.430(e)(9)(iii).) 5.16. For purposes of a cumulative risk evaluation, the risk assessment pursuant to AB2588 shall be considered by the Department as one element of the cumulative risk evaluation (outline approved by the Department on April 17, 2012.) Other elements of the cumulative risk evaluation shall include 1) the Human Health and Ecological Risk Assessment ("HHERA") (HHERA workplan approved by the Department on December 5, 2011) addressing potential impacts to all media from past operations at the Exide Facility; 2) Risk Analysis for Accidental Releases (risk assessment received October 2012) addressing potential releases from handling of -9- hazardous waste, malfunction of processes, accidental chemical releases, releases from traffic accidents of vehicles, and fire releases; and 3) Mobile Source Risk Assessment (risk assessment is pending) addressing vehicle emissions associated with Exide Facility Operations. (OSWER #9355.3-01 (10/88).) 5.17. For purposes of complying with the California Environmental Quality Act (CEQA, Pub. Res. Code, § 21000 et seq., pursuant to California's State Environmental Impact Report (EIR) Guidelines, 14, Cal. Code Regs., tit. 14, § 15000 et seq.) the Department shall apply the SCAQMD's Air Quality Significance Thresholds in making any permit or other determinations respecting whether the Facility, and its operations, will have significant air quality impacts. 5.18. The Department reserves its right to impose any feasible mitigation measure that may be warranted as a result of Exide's Part B permit application being evaluated in the CEQA process in a manner consistent with the law. Exide reserves its right to contest in the appropriate California forum the Department's above health impact standards, and the Department's application of same as violative of law. 5.19. Exide shall install at the Facility secondary HEPA filter controls on: (a) the material handling baghouse, (b) MAC baghouse, (c) soft lead baghouse, and (d) the hard lead baghouse, as well as (e) reconfigure the secondary HEPA filter controls on the RMPS scrubber, as provided herein. By February 15, 2014, Exide shall complete installation of the HEPA filter controls on the material handling baghouse and reconfigure the secondary HEPA filter controls on the RMPS scrubber (a & e). By September 1, 2014, Exide shall complete installation of all -10- remaining HEPA filter controls (b, c, & d), subject to AQMD permit approval. Failure to install the secondary HEPA filter controls as provided herein shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.20. Exide shall install at the Facility a Regenerative Thermal Oxidizer to control organic compound emissions from the feed dryer baghouse. By September 1, 2014, Exide shall complete installation of the feed dryer organic emission control device, subject to AQMD permit approval. Failure to install the feed dryer organic emission control device as provided herein shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.21. By January 1, 2015, Exide shall prepare, in connection with the operation of the Facility, full source test reports and a comprehensive Human Health Risk Assessment following the current SCAQMD Risk Assessment Guidelines as of the Effective Date (as defined in section 37) to determine if objectives required by section 5.13 above have been met. 5.22. In connection with operating the Facility, Exide shall continue to comply with the SCAQMD's Rule 1402 health impact reduction compliance requirements and procedures as follows: (a) by October 4, 2013, conduct source tests to measure the effectiveness of the blast furnace isolation door; and (b) by December 1, 2013, submit a revised risk reduction plan including (i) an updated air toxics emissions inventory and health risk assessment which includes the isolation door source testing results, and (ii) description of the expected emissions and health impacts reduction benefits of the control projects set forth in sections 5.195.20 above. 5.23. For purposes of reviewing Exide's Part B permit application for the Facility, the Department shall use the Comprehensive Risk Assessment (updated air toxics emission inventory and health risk assessment), the outline for which was approved by the Department on April 17, 2012. 5.24. If SCAQMD requires any additional measures as part of the Rule 1402 risk reduction plan approval, Exide shall install such measures at the Facility within one year of Exide being so notified of the requirement by the SCAQMD, or, as otherwise required/approved by the SCAQMD, whichever is earlier. Exide shall notify the Department of the timeline set by the SCAQMD. Notwithstanding the above, Exide reserves all legal rights to appeal or otherwise challenge in the appropriate California forum any such SCAQMD-required additional measures. Blood Lead Testing Program: 5.25. Exide agrees to fund a blood lead testing program in the area surrounding the Facility to be implemented by the Los Angeles County Department of Public Health ("LACDPH"). The initial geographic scope of the blood testing is to be within a polygon area bordered on the south along Gage Avenue from South Soto Street to Eastern Avenue; bordered on the west along South Soto Street from Gage Avenue to Highway 60; bordered on the north along Highway 60 to Interstate 710; bordered on the east along Interstate 710 to Interstate 5 and Interstate 5 east to Eastern Avenue and along Eastern Avenue to Gage Avenue. In consultation with the Department, Exide will consider for approval any subsequent recommendation by the LACDPH, based on the outcome of the initial test results, to expand the study's initial geographic boundaries up to an area not to exceed an outward radius -12- of three miles around the Facility. 5.26. Exide agrees to request the LACDPH to implement the blood lead testing program within 30 days of an agreed testing protocol between Exide and the LACDPH for a blood lead test program. The blood lead testing itself shall be run for six (6) consecutive months from the initial start date Residential/Sensitive Receptors Surface Soil Sampling: 5.27. Following the Department's approval, Exide shall prepare and implement, in connection with its operation of the Facility, an Off-Site Soil Sampling Protocol ("Sampling Plan") for Arsenic; Lead; Antimony; Cadmium; Chromium (will require Hexavalent Chromium analysis if Chromium is above Hexavalent Chromium California Human Health Screening Level (CHHSL); Polynuclear Aromatic Hydrocarbons; Polychlorinated Biphenyls; on residential properties, schools and daycare facilities. Residential sampling shall focus on those areas with the highest predicted maximum exposed individual resident ("MEIR") for lead and arsenic north and south of the Facility as represented in Exide's recent AB2588 Health Risk Assessment of January 2013. In addition to the above required analysis, the Sampling Plan shall require analysis for dioxins and furans on five (5) representative properties agreed to by the Parties in the north and south MEIR areas. 5.28. The Sampling Plan shall include a study to establish background levels of the constituents in soil listed in section 5.27, above, to be approved by the Department. Lead in soils shall be delineated at residential/sensitive receptor areas until 80 mg/kg of lead in soils, or background, whichever is higher, is -13- reached. 5.29. Exide submitted to the Department a Sampling Plan dated May 16, 2013. On May 28, 2013, the Department provided comments on the Sampling Plan. By October 1, 2013, Exide shall submit a revised Sampling Plan to the Department incorporating the Department's comments. The Sampling Plan implementation shall be completed no later than 90 days after the Department's approval of the Sampling Plan. Failure to implement the Sampling Plan within the above time period shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.30. Following Department approval, Exide shall prepare and implement a Surface Soil and Dust Sampling Plan for lead on properties immediately adjacent to the Exide Facility. By September 1, 2013, Exide shall initiate field work and provide findings to the Department by November 15, 2013. Failure to complete the Surface Soil and Dust Sampling Plan by December 1, 2013 shall subject Exide to stipulated penalties as provided in this Stipulation and Order. 5.31. By May 31, 2014, Exide shall perform a Site Specific Human Health Risk Assessment on Residential and Non-Residential exposure scenarios utilizing the data generated as a result of sections 5.27-5.30 above. Subsequently, the Department and Exide shall develop risk-based clean-up levels for corrective action purposes based upon the Site Specific Human Health Risk Assessment pursuant to the February 25, 2002 Corrective Action Consent Order. Financial Assurance: 5.32. Within thirty (30) days of the Effective Date, Exide shall deposit the -14- Financial Assurance Fund (defined below) in a segregated account to be maintained by Exide for the purpose of paying the costs and expenses necessary to implement the storm sewer piping and health impact requirements set forth in Sections 5.1-5.31 of this Stipulation and Order (collectively, "Environmental Measures"). As used herein, the "Financial Assurance Fund" means the sum of $7,730,000.00 less amounts expended by Exide for Environmental Measures prior to funding of such Financial Assurance Fund. The Financial Assurance Fund and any and all earnings, interest, income, dividends, capital gains and other amounts earned on or derived from the Financial Assurance Fund shall remain property of Exide's bankruptcy estate; provided, however, that the Financial Assurance Fund shall only be used for payment of Environmental Measures. Exide shall pay for Environmental Measures directly from the Financial Assurance Fund. Periodically, but not less frequent than monthly, or upon the request of the Department, Exide shall deliver a written itemization to the Department describing with reasonable specificity the payments made from the Financial Assurance Fund for Environmental Measures including a description of the work performed, specific costs for the work, and invoices or cost advances paid to vendors, contractors, and third parties. Exide shall at the time it deposits funds into the Financial Assurance Fund deliver to DTSC a written itemization describing with reasonable specificity the amounts it has already expended including a description of the work performed, specific costs for the work, and invoices or cost advances paid to vendors, contractors, and third parties for Environmental Measures. Notwithstanding anything herein to the contrary, in the -15- event that Exide delivers a written notice (the "Closure Notice") to the Department that Exide has ceased operations at the Facility pursuant to paragraph 34, the restrictions on Exide's use of the Financial Assurance Fund shall be abrogated and of no further force or affect. It is the intent of the Parties that additional financial assurance ("Additional Financial Assurance") for specific corrective action projects directly related to the health impact requirements of this Stipulation and Order be provided, if required, by supplementing the Financial Assurance Fund, or by such other financial assurance vehicle as agreed to by Exide and the Department once the Department and Exide develop and finalize the health risk-based corrective action clean-up levels pursuant to the February 25, 2002 Corrective Action Consent Order. Any Additional Financial Assurance must be agreed to, in writing, by the Parties. The Department acknowledges that, during the pendency of its bankruptcy, Exide will be required to obtain the review and approval of the bankruptcy court for any Additional Financial Assurance. OTHER REQUIREMENTS AND PROVISIONS 6.0. Submittals: All submittals from Exide pursuant to this Stipulation and Order shall be sent to: Rizgar Ghazi Branch Chief Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 -16- Edward Nieto Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 Bill Veile Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 Peter Ruttan Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 All correspondence to Exide pursuant to this Stipulation and Order shall be sent to: Bud DeSart, Sr. Director of Commercial Operations Vernon Recycling Center 2700 S. Indiana Street Vernon, California 90058 Joe Preuth, V.P. Recycling Exide Technologies, Inc. 13000 Deerfield Parkway Milton, Georgia 30004 Fred Ganster, Director, Environmental Health & Safety Exide Technologies 13000 Deerfield Parkway Milton, Georgia 30004 John Hogarth, Plant Manager Vernon Recycling Center 2700 S. Indiana Street Vernon, California 90058 Ed Mopas, Environmental Manager Vernon Recycling Center 2700 S. Indiana Vernon, California 90058 All submittals by Exide to the Department (reports, closure plans, removal -17- action plans, etc.) must be certified by an appropriately licensed California Professional Engineer if required by the Business and Professions Code. 7.0. Communications: All approvals and dec sions of the Department made regarding such submittals and notifications shall be communicated to Exide in writing by a Branch Chief, Department of Toxic Substances Control, or his/her designee. No informal advice, guidance, suggestions, or comments by the Department regarding reports, plans, specifications, schedules, or any other writings by Exide shall be construed to relieve Exide of its obligation to obtain such formal approvals as may be required. 8.0. Quality Assurance: All sampling and analyses performed by Exide under this Stipulation and Order shall follow applicable Department and U.S. EPA guidance for sampling and analyses. Workplans shall contain quality assurance/quality control and chain of custody procedures for all sampling monitoring, and analytical activities. Any deviations from the approved workplans must be approved by the Department prior to implementation, must be documented, including reasons for the deviations, and must be reported in the applicable report. The names, addresses, and telephone numbers of the California Statecertified analytical laboratories Exide proposes to use must be specified in the applicable workplans. All workplans required under this Stipulation and Order shall include data quality objectives for each data collection activity to ensure that data of known and appropriate quality are obtained and that data are sufficient to support their -18- intended uses. 9.0. Department Review and Approval: If the Department determines that any report, plan, schedule, or other document submitted for approval pursuant to this Stipulation and Order fails to comply with this Stipulation and Order or fails to protect public health or safety or the environment, the Department may: a. Modify the document as deemed necessary and approve the document as modified; or b. Return the document to Exide with recommended changes and a date by which Exide must submit to the Department a revised document incorporating the recommended changes. 10.0. Compliance with Applicable Laws: Exide shall carry out the obligations under this Stipulation and Order in compliance with all local, State, and federal requirements, including but not limited to requirements to obtain permits and to assure worker safety. Nothing in this Stipulation and Order shall excuse Exide from meeting any more stringent requirement that may be imposed by any applicable law or by any change in applicable law. Nothing in this Stipulation and Order is intended nor shall it be construed to preclude any other State or local agency, department, board, or entity from taking appropriate enforcement actions or otherwise exercising its authority under any law, statute or regulation. 11.0. Endangerment during Implementation: In the event that the Department determines that any circumstances or activity (whether or not occurring or conducted in compliance with this Stipulation and Order) are creating an imminent or substantial danger to the health or welfare of people on the site or -19- in the surrounding area or to the environment, the Department may order Exide to stop further implementation for such period of time as needed to abate the endangerment (a "Stop Work Order"). Any deadline in this Stipulation and Order directly affected by a Stop Work Order under this section shall be extended for the term of such Stop Work Order, and no stipulated penalties will be assessed if such circumstance or activity constitutes an event of force majeure under section 25. If the Department determines an activity, or data or information becomes known to the Department, demonstrating that an activity undertaken pursuant to this Stipulation and Order is creating an imminent or substantial danger to the public, the Department shall apply the procedures set forth in Section 5.4 of the February 25, 2002 Corrective Action Consent Order, Docket No. P3-01/02-010, provided, that if Exide disputes any decision rendered pursuant to those procedures, Exide may seek direct and immediate jud cial review in an appropriate California forum. 12.0. Liability: Nothing in this Stipulation and Order shall constitute or be construed as a satisfaction or release from liability for any conditions or claims arising as a result of past, current, or future operations of Exide, except as specifically provided in this Stipulation and Order. Notwithstanding compliance with the terms of this Stipulation and Order, Exide may be required to take further actions as are necessary to protect public health or welfare or the environment. Further, nothing in this Stipulation and Order shall constitute or be construed as an admission of liability by or on behalf of Exide for any conditions or claims arising as a result of past, current, or future operations, acts or omissions of Exide. Exide -20- specifically denies all liability and reserves all legal rights and defenses. 13.0. Government Liabilities: The State of California shall not be liable for injuries or damages to person or property resulting from acts of omissions by Exide or related parties specified in section 27 (Parties Bound) in carrying out activities pursuant to this Stipulation and Order, nor shall the State of California be held as a party to any contract entered into by Exide or its agencies in carrying out activities pursuant to this Stipulation and Order. 14.0. Reservation of Rights: By entering into this Stipulation and Order, and except as otherwise provided herein, the Department does not waive the right to take further enforcement actions and Exide does not waive the right to challenge any such actions in an appropriate California forum. Nothing in this Stipulation and Order shall be construed to preclude or prejudice the Department from taking further action with regard to any remediation required as a result of the release of hazardous wastes, constituents of hazardous waste or hazardous substances at or from the Facility, and the Department expressly reserves all such rights. Exide reserves all rights to challenge any such action in an appropriate California forum. This Stipulation and Order is without prejudice to the Department to exercise its authority to impose any conditions, requirements, standards or actions pursuant to a hazardous waste permit, nor is this Stipulation and Order intended or shall be construed to mean that the Department will approve or deny the pending Part B permit application for the Facility and Exide reserves all rights to challenge any such actions in an appropriate California forum. This Stipulation and Order shall not be construed as a release, waiver, or limitation on any rights, remedies, -21- powers, or authorities, that the Department or Exide has under any statutory regulatory, or common law authority, except as otherwise expressly provided in this Stipulation and Order. 15.0. Incorporation of Plans and Reports. All plans, schedules, and reports that require Department approval and are submitted by Exide pursuant to this Stipulation and Order are incorporated in this Stipulation and Order upon approval by the Department. 16.0. Site Access: Subject to the Facility's security and safety procedures, Exide shall provide access at all reasonable times to employees, contractors, and consultants of the Department, and any agency having jurisdiction. Nothing in this Stipulation and Order is intended to limit in any way the right of entry or inspection that any agency may otherwise have by operation of any law. The Department and its authorized representatives may enter and move freely about all property at the Site at all reasonable times for purposes including but not limited to: inspecting records, operating logs, and contracts relating to the Site; reviewing the progress of Exide in carrying out the terms of this Stipulation and Order; and conducting such tests as the Department may deem necessary. Exide shall permit such persons to inspect and copy all records, files, photographs and documents, and other writings, including all sampling and monitoring data, in any way pertaining to work undertaken pursuant to this Stipulation and Order to the extent consistent with applicable law. If the Department is requested or required to disclose or produce proprietary trade secrets, confidential business information or otherwise privileged information, documents or data received pursuant to this Stipulation and Order, the -22- Department shall comply with the procedures established pursuant to the California Public Records Act, Government Code section 6250 et seq., and Health and Safety Code sections 25173 and 25185(d). 17.0. Sampling, Data, and Document Availability: Exide shall permit the Department and its authorized representatives to inspect and copy all sampling, testing, monitoring, and other data generated by Exide or on Exide's behalf in any way pertaining to work undertaken pursuant to this Stipulation and Order to the extent consistent with applicable law. As provided above, if the Department is requested or required to disclose or produce proprietary trade secrets, confidential business information or otherwise privileged information, documents or data received pursuant to this Stipulation and Order, the Department shall comply with the procedures established pursuant to California Public Records Act, Government Code section 6250 et seq., and Health and Safety Code sections 25173 and 25185(d). Exide shall notify the Department in writing at least seven (7) days prior to beginning each separate phase of field work. At the request of the Department, Exide shall provide or allow the Department and its authorized representatives to take splits or duplicates of any samples collected by Exide for the Proposed Storm Water Sewer Piping Plan pursuant to this Stipulation and Order, including soil, dust, sediment and water (if encountered). Similarly, at the request of Exide, the Department shall provide or allow Exide and its authorized representatives to take splits and duplicates of any samples collected by the Department pursuant to this Stipulation and Order, including soil, dust, sediment and water (if encountered). -23- Exide shall maintain a central depository of the data, reports, and other documents prepared pursuant to this Stipulation and Order. All such data, reports, and other documents shall be preserved by Exide for a minimum of six years after the conclusion of all activities under this Stipulation and Order. If the Department requests that some or all of these documents be preserved for a longer period of time, Exide shall either comply with that request, deliver the documents to the Department, or permit the Department to copy the documents prior to destruction. Exide shall notify the Department in writing at least six months prior to destroying any documents prepared pursuant to this Stipulation and Order. 18.0. Costs: Exide is liable for all costs associated with the matters covered by this Stipulation and Order, including, but not limited to all costs incurred by the Department in reviewing workplans and overseeing the work required by this Stipulation and Order but excluding attorney's fees and costs associated with the administrative hearing and court proceedings arising from the Suspension Order. Any costs pre-dating June 10, 2013, the date Exide filed a voluntary pet tion for relief under Chapter 11 in the Bankruptcy Court, may be regarded as general unsecured claims. The Department shall retain all cost records associated with the work performed under this Stipulation and Order as required by State law. The Department shall make all documents which support the Department's cost determination available for inspection upon request, as provided by the Public Records Act. Approval and allowance for the payment of the Department's postpetition oversight costs shall be subject to approval by the Bankruptcy Court, which may be granted in the Bankruptcy Court's order approving the Stipulation and -24- Order. If approved by the Bankruptcy Court, the Department may present to Exide invoices for oversight costs and Exide shall pay the Department such costs within thirty (30) days of presentment without the need of either Party to seek further Bankruptcy approval to present the invoice or to make the payment. 19.0 Alternative Technology: Exide may submit a request to the Department for its consideration and approval to use any technology as an alternative to those required to be used by Exide pursuant to this Stipulation and Order. Any technology proposed may require submittal of a permit modification and require approval from the Department. 20.0. Incorporation of Plans and Reports: All plans, schedules, and reports that require Department approval and are submitted by Exide pursuant to this Stipulation and Order are incorporated in this Stipulation and Order upon approval by the Department. 21.0. Extension Requests: If Exide is unable to perform any activity or submit any document within the time required under this Stipulation and Order, Exide may, prior to expiration of the time, request an extension of time in writing. The extension request shall include a justification for the delay. All requests shall be in advance of the date on which the activity or document is due. 22.0. Extension Approvals: If the Department determines that good cause exists for an extension, it will grant the request and specify in writing a new compliance schedule. Exide shall comply with the new schedule specified by the Department, which shall be incorporated by reference into this Stipulation and Order. -25- 23.0. Additional Enforcement Actions: The Department does not waive the right to take further enforcement actions and Exide does not waive the right to challenge or appeal any Department enforcement order in an appropriate California forum, except to the extent provided in this Stipulation and Order. 24.0. Stipulated Penalties for Noncompliance: Exide shall be liable for stipulated penalties in the amount of $5,000 per day for the first three (3) days and $10,000 per day thereafter per violation as specified in sections 5.5, 5.13, 5.20, 5.21 and 5.29 above. No penalties shall be paid from the financial assurance fund set up pursuant to section 5.32, above. Subject to Exide's right to appeal or challenge stipulated penalties imposed pursuant to this Stipulation and Order, in an appropriate California forum, Exide shall pay any stipulated penalty within thirty (30) days of receiving the Department's demand for payment without the need for further Bankruptcy Court approval by the Department to request payment by Exide or by Exide to make the payment. In the event that stipulated penalties are assessed against Exide by the Department during the pendency of the Bankruptcy Case, such post-petition penalties will be afforded administrative expense priority and be deemed as an allowed administrative expense and such post-petition penalties are to be paid by Exide upon demand by the Department without the need to seek further Bankruptcy approval; provided, however Exide shall retain the right to challenge the allowance of any such stipulated penalties on any ground in an appropriate California forum. In the event that Exide submits such a challenge, upon final determination, Exide shall pay the penalty, if any, upon demand from the Department without the need for further Bankruptcy Court approval. -26- All penalties shall begin to accrue on the day after the complete performance is due or the day a violation occurs, and shall continue to accrue through the final day of the correction of the noncompliance or completion of the activity. Nothing herein shall prevent the simultaneous accrual of separate penalties for separate violations of this Stipulation and Order as provided by Health and Safety Code sections 25188, 25189 and 25189.2 and other applicable provisions of law. However, the Department will not assess duplicate penalties if delay of one obligation has a causal effect upon a subsequent and related obligation. This provision shall not preclude the Department from seeking, nor Exide from challenging in an appropriate California forum, additional sanctions as provided for by law or regulation, including but not limited to civil penalties or other civil or administrative liability if Exide's failure to comply with the terms of this Stipulation and Order also is a violation of any law, regulation or obligation over which the Department has jurisdiction. This provision shall not preclude the Department taking, nor Exide from challenging in an appropriate California forum, further action against Exide seeking penalties for violation of interim status requirements or the Hazardous Waste Control Law (Health & Saf. Code, §25100 et seq.), or equitable relief for matters not specifically addressed by this Stipulation and Order. 25.0. Force Majeure: Exide shall cause all work to be performed within the time limits set forth in this Stipulation and Order unless an extension is approved or performance is delayed by events that constitute an event of force majeure. For -27- purposes of this Stipulation and Order, an event of force majeure is an event arising from circumstances beyond the control of Exide that delays performance of any obligation under this Stipulation and Order, provided Exide has undertaken all appropriate planning and preventative measures to avoid any foreseeable circumstances. Increases in cost of performing the work specified in this Stipulation and Order shall not be considered circumstances beyond the control of Exide. For purposes of this Stipulation and Order, events which constitute a force majeure shall include, without limitation, events such as acts of God, war, civil commotion, unusually severe weather, labor difficulties, shortages of labor, materials or equipment, equipment breakdown or failure not resulting from operational error, neglect or improper operation or maintenance procedures, government moratorium, delays in obtaining necessary permits or approvals due to action or inaction by third parties, earthquake, fire, flood, or other casualty. Exide shall notify the Department in writing immediately after the occurrence of the force majeure event. Such notification shall describe the anticipated length of the delay, the cause or causes of the delay, the measures taken and to be taken by Exide to minimize the delay and the timetable by which these measures shall be implemented. If the Department does not agree that the delay is attributable to a force majeure event, then the matter may be subject to the dispute resolution procedures set forth in section 19.0 of the February 25, 2002 Corrective Action Consent Order. 26.0. Costs and Attorney's Fees: With respect to this administrative enforcement proceeding and the California State Court Action, each party shall -28- bear its own costs and attorney's fees, except as provided in section 18, above. 27.0. Parties Bound: This Stipulation and Order shall apply to and be binding upon Exide and its successors, and assignees, and upon the Department and any successor agency that may have responsibility for and jurisdiction over the subject matter of this Stipulation and Order. Exide shall disclose the terms and conditions of this Stipulation and Order to all employees, consultants or independent contractors who are assigned or engaged to assist Exide comply with its obligations and duties hereunder. 28.0. Integration: This Stipulation and Order constitutes the entire agreement between the Parties as to the settlement of the subject dispute and may not be amended, supplemented, or modified, except as provided in this agreement. 29.0. Compliance with Waste Discharge Requirements: To the extent required by law, Exide shall comply with all applicable waste discharge requirements issued by the State Water Resources Control Board or a California regional water quality control board. 30.0. Time Periods: Unless otherwise specified, time periods begin from the effective date of this Stipulation and Order and "days" means calendar days. In computing any period of time under this Stipulation and Order, where the last day would fall on a Saturday, Sunday or federal or State holiday, the period shall run until the next business day. 31.0. Authority to Enter Into This Stipulation and Order: Each signatory to this Stipulation and Order, certifies that he or she is fully authorized by the Party he or she represents to enter into this Stipulation and Order, to execute it on behalf of -29- the party represented, and to legally bind that party. 32.0 Dispute Resolution: Except as otherwise provided in this Stipulaton and Order, any dispute arising between Exide and the Department in connection with this Stipulation and Order shall be subject to the dispute resolution procedures set forth in section 19.0 of the February 25, 2002 Corrective Action Consent Order; provided, that if Exide disputes any decision rendered pursuant to those procedures, Exide may seek direct and immediate judicial review of the dispute in an appropriate California forum. 33.0 Choice of Forum: The Parties agree California law applies to this Stipulation and Order and that any disputes are subject to review in a California court of competent jurisdiction. 34.0 Facility Closure: In the event that Exide delivers a written notice to the Department that Exide has ceased operations at the Facility, this Stipulation and Order shall automatically terminate, except for section 35, and Exide shall comply with all requirements related to closure of the Facility, including but not limited to corrective action. 35.0 Covenant Not to Sue: Except as otherwise provided in this Stipulation and Order, the Parties covenant not to sue or pursue any and all further civil and administrative claims, demands, causes of action and/or liabilities arising out of, related to or resulting from the conduct alleged in the Suspension Order, which conduct took place prior to the execution of this Stipulation and Order_The Department specifically reserves its right to consider any and all underlying facts perta n ng to the conduct alleged in the Suspension Order for purposes of -30- evaluating Exide's compliance history and for purposes of making any permit determinations. Exide reserves its right to dispute the underlying facts of the conduct alleged in the Suspension Order and contest any permit determination made by the Department. 36.0 Severability: If any provision of this Stipulation and Order is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Stipulation and Order, and the remaining portions of this Stipulation and Order sha l continue in full force and effect, unless enforcement of this Stipulation and Order as so modified by and in response to such invalidation would be g ossly inequitable under all of the circumstances, or would frustrate the fundamental purposes of this Stipulation and Order. 37.0. Effective Date: The effective date of this Stipulation and Order shall be the date on which the Stipulation and Order is signed by the Department except that the Stipulation and Order will not become effective until any order entered by the Bankruptcy Court approving the Stipulation and Order has become a final order. If for any reason this Stipulation and Order is not approved by the Bankruptcy Court, or does not become a final order (and such condition to the Effective Date is not waived by Exide and the Department), this Stipulation and Order shall be null and void As used herein, a "Final Order means an order of the Bankruptcy Court (a) as to which the time of appeal shall have expired and as to which no appeal shall then be pending; provided, however, the Parties reserve the right to waive any appeal period or (b) if a timely appeal shall have been filed or sought, the order which is the basis of the appeal shall have been affirmed by the -31- hEg hest appeilate court to which such appeal could have been presented andlor the time for taking further appeals has Expired. . It), rr }3 so STIPULATEDZ Dated1 4 November 2013 Name and Title Exid-e Technoiogies.? Inc. Appreved 55% to farm: Dated: 20;] Handolph C. Visser Sheppard1 Mullin, Richter Hampton Counsei for Technologies 11' :3 so STIPULATED AND ORDERED: . 1 I I Dated?lovmbu 2?95 Name and Title Department of Toxic Substances Control -32.. Approved as to form: Dated; Nancy J. Bothwell Department of Toxic Substances Control Senior Staff Counsel -33- STIPULATKDN AND ORDER EXHIBITS AND ORDER EXHIBIT 1 EXHIBIT 1 EXHIBIT STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL Exide Technologies, Inc. 13000 Deerfield Parkway, Suite 200 Milton, Georgia 30004 In the Matter of: H Exide Technologies, Inc. 2700 South Indiana Avenue Vernon, California 90058 ID No. CAD097854541 Respondent. A: P3-12/13-010 ORDER FOR TEMPORARY SUSPENSION Health and Safety Code Sections 25186.1 & 25186.2 Upon the review of the Department of Toxic Substances Control's (Department) records relating to conditions of the operation of hazardous waste management activities at Exide Technologies, Inc. (Exide), an interim status hazardous waste treatment and storage facility, located at 2700 South Indiana Avenue in City of Vernon, California, I found that an imminent and substantial danger to the public health, safety and the environment exists, as set forth in the attached Accusation. A recent report submitted to the Department by Exide demonstrate that the Facility is operating its underground storm sewer pipelines in violation of hazardous waste requirements and are causing releases to the environment. A separate report submitted to the South Coast Air Quality Management District by Exide demonstrates that emissions from the facility operations pose a significant risk to the surrounding community. Based upon this information, I conclude that it is necessary to issue this Order for Temporary Suspension pending hearing to prevent or mitigate the substantial danger pursuant to Health and Safety Code Section 25186.2. THEREFORE YOUR HAZARDOUS WASTE FACILITY INTERIM STATUS IS HEREBY SUSPENDED PENDING HEARING. YOU ARE ORDERED TO CEASE OPERATIONS EFFECTIVE APRIL 24, 2013. In ceasing operations pursuant to this Order, Exide shall ensure that all necessary steps are taken such that Exide does not pose a risk to public health or safety or the environment in its non-operational status. This requirement includes, but is not limited to, maintaining financial assurance both for liability and for closure as specified in California Code of Regulations, title 22, Div. 4.5, Chapter 15, Article 8. Should you choose to pursue a hearing, this suspension will remain in effect until the hearing is completed and DTSC has made a final determination on the merits which shall be made within sixty (60) days after completion of the hearing pursuant to Health and Safety Code Section 25186.2. Date: Brian Johnson Deputy Direc Hazardous Waste Management Program EXHIBIT 2 EXHIBIT 2 EXHIBIT 2 STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL ) Exide Technologies, Inc. ) 13000 Deerfield Parkway, Suite 200 ) Milton, Georgia 30004 ) HWCA: P3-1 10 ) In the tter of: ) ) Exide Technologies, Inc. ) ACCUSATION FOR SUSPENSION OF 2700 South Indiana Avenue ) INTERIM STATUS Vernon, California 90058 ) ) CAD 0978 Respondent. ) Health and Safety Code ) Sections 25186.1 & 25186.2 ) ) INTRODUCTION 1 Parties. The Caltfornia Environmental Protection Agency, Department of Toxic Substances Control ("Department or DTSC") issues this Accusation to Exide Technologies, Inc. (Exide, "Faciliy), owner and operator of a Facility located at 2700 South Indiana Avenue, Vernon, California 90058. 2. Interim Status. The Department of Health Services issued an Interim Status Document to Gould, Inc. for the Facility (EPA Identification Number CAD097854541) on December 18, 1981. In 1984, GNB Technologies bought the Facility from Gould. In 2000, Exide Technologies acquired GNB, Inc. including the Facility. 3. Jurisdiction. Health and Sa ety Code section 251 6 authorizes DTSC to suspend permits, registrations, and certificates if DTSC determines that the holder, or in the case of a business concern, any person holding more than five (5) percent of the equity in or debt liability of that business concern, has engaged in prohibited activities. Health and Safety Code sections 25186.1 and 25186.2 authorize DTSC to temporarily suspend permits, registrations, and certificates prior to a hearing if DTSC determines that the action is necessary to prevent or mitigate an imminent and substantial danger to the public health or safety or the environment. REGULATORY AND FACTUAL BACKGROUND 4. Exide operates a hazardous waste storage and treatment facility located at 2700 South Indiana Avenue in Vernon, California. 5. Exide is a "ha7ardous waste facility" as defined at Health & Safety Code section 25117.1. The Facility has been given the following facility identification number: CAD 097854541. 6. Exide has, and at all times relevant hereto, had the power to exercise control over the management decisions at the Facility, including but not limited to hazardous waste management decisions. 7. The State of California has enacted a comprehensive statutory and regulatory framework for the generation, handling, treatment, transport and disposal of hazardous waste. The framework contained in the Hazardous Waste Control Law (HWCL), Hearth and Safety Code section 25100 et seq., and its implementing regulations, which are found at California Code of Regulations, Title 22, Div. 4.5, Chapter 10, sections 66260.1 et seq. mandate a "cradle to grave" registration, tracking, storage, treatment and disposal system for the protection of the public from the risks posed by hazardous wastes. 8. The HWCL provides at Health and Sa ety Code section 25201 , in relevant part, that: ...no operator of a storage facility, treatment facility, transfer facility, resource recovery facility, or disposal site shall accept, treat, store, or dispose of a hazardous waste at the facility, area, or site, unless the owner or operator holds a hazardous waste facilities permit or other grant of authorization from the department to use and operate the facility, area, or site..." 9. Regulations promulgated by the Department implement the HWCL and set forth the requirements to obtain an Interim Status Authorization, a Hazardous Waste Facility Permit, and a Permit by-Rule, as well as the conditions applicable to these authorizations (California Code of Regulations, Title 22, Division. 4.5, sections 66270.166270.60). 10. Absent specific statutory or regulatory exemption, it is illegal to treat, store, dispose of and/or transport hazardous wastes without a hazardous waste facility permit, an interim status authorization or other grant of authorization from the Department. 11. The Department of Health Services issued to Gould, Inc. for the Facility, an interim status document, effective date of December 18, 1981. In 1984, GNB Technologies bought the Facility from Gould. In 2000, Exide Technologies acquired GNB, Inc. including the Facility. The Department is informed and believes and thereon alleges that Exide began operations at the Facility in September 2000. 12. Exide is located on 24 acres which is zoned for heavy industrial use. The Facility is located at the intersection of South Indiana Avenue and Bandini Boulevard. The parcel that is located east of South Indiana Avenue houses administrative buildings. The west side of South Indiana Avenue is used for battery recycling and lead smelting activities. The Facility is bounded by East 26th Street towards the north and Bandini Boulevard to the south. 13. Exide operates a Facility that receives spent lead acid batteries and other lead bearing materials and recycles them to recover lead and polypropylene. Liquid was e generated as a result of the battery and lead recycling is treated by an onsite wastewater treatment plant and then discharged to the sewer system. The Facility is designed to treat 310,000 gallons of wastewater per day which is equivalent to treating 53 tons of batteries per day. 14. Exide's interim status authorization allows it to receive off-site hazardous waste, to treat hazardous waste, and to store hazardous waste. Exide has no other authorization to receive, treat, or store hazardous waste at the Facility. 15. Exide has submitted a Part A and B Permit Application for a hazardous waste facility permit as part of the permit application review process. On March 5, 2013, Exide submitted a Storm Sewer Inspection Report (Report) which indicates that the underground pipelines used to convey the lead contaminated storm water to a hazardous waste treatment tank system are in poor conditions. Exide proposes to replace and design the underground pipelines to meet with the tank ancillary equipment requirements specified in California Code of Regulations, title 22, section 66264.193(f). Although the Report was written, and the Department reviewed it (April 4, 2013 Memorandum), citing chapter 14 requirements, Exide is presently required to comply with equivalent requirements under chapter 15 for an interim status facility. In the following paragraphs, the corresponding chapter 15 citations follow in brackets the chapter 14 citations. 15.1 The Department's review of the Report, photographs, and associated videos reveal an accumulation of semi-solid sludge materials (also known in the industry as mud) generally throughout the piping system that contain elevated levels of hazardous waste, specifically metals (e.g., lead, arsenic and cadmium). The documents show several areas within the pipelines which depict failed structural integrity (breaches), and lack the cured-in-place fiberglass slip lining, which was reportedly applied in the 1990s. The videos show the slip lining scaling and fraying, or to be non-existent. The sewer system is considered ancillary equipment for the RCRA Interim Status Unit 46 (Pump Sump) and it does not comply with Califomia Code of Regulations, title 22, sections 66264.192(1)(10) [section 66265.192(1)(10)] with regard to demonstrating its integrity to prevent releases into the environment. 15.2 The Report also shows that the storm sewer system which is ancillary to Unit 46 at the Facility is not within a required secondary containment. The sewer system does not comply with California Code of Regulations, title 22, sections 66264.192(1)(7) [Section 66265.192(1)(7)] with regard to secondary containment requirements. 15.3 The Report also shows that the storm sewer system does not comply with California Code of Regulations, title 22, sections 66264.192(1)(7) [Section 66265.192(1X7)] and 66264.192(k)(1) [Section 66265.192(k)(1)] with regard to underground piping. No leak testing data was presented and, based upon the physical condition of the pipes, as evidenced in the Report, the existing breaches would cause the storm sewer system to fail any leak test. 15.4 The videos associated with the Report demonstrate all piping associated with the storm sewer system to be substantially deficient with regard to the slip lining and contain a significant collection of sediments and sludge. There are several areas within the sewer piping that contain approximately 600 to 1,000 gallons of fluids with little to no flow due to a lack of a gradient or pipe blockage. Several of the of the storm sewer lines have ponding of water and built-up sludge. 15.5 Exide continuously introduces hazardous waste (metal-containing water and sludge) to the storm sewer system under its daily wash-down operations that are conveyed via the storm sewer system to Unit 46 (Pump Sump). 15.6 The Report proposes a storm water piping system replacement/abandonment schedule that spans more than one-third the ten year term of the proposed permit and will not resolve the requirement to contain future releases into the environment until the new system is installed and tested to demonstrate integrity. This is in violation of California Code of Regulations, title 22, section 66265.15(c) which requires immediate remediation when an environmental hazard has already occurred. 15.7 The continued use of the underground storm water system is in violation of California Code of Regulations, title 22, section 66265.196(f)(4) which requires the entire component of a tank system to have secondary containment prior to being returned to use if a leak is from a tank system component that is not readily accessible for visual inspections. 16. As part of the permitting process, DTSC requested Exide to prepare a draft Environmental Impact Report (E1R) to assess significant impacts to human health and the environment caused by the Facility. As part of the development of the draft E1R, Exide planned to incorporate the findings of the Health Risk Assessment (HRA), approved by the Southern California Air Quality Management District (SCAQMD) on March 1, 2013, into the EIR. 16.1 In a letter dated March 1, 2013, the SCAQMD advised Exide that the HRA submitted by Exide in January, 2013 indicates the Facility poses a maximum individual cancer risk (MICR) of 156 in one million for an offsite worker receptor about 300 meters northeast of the Facility (primarily arsenic). 16.2 According to the SCAQMD, the HRA indicates the Facility poses a maximum chronic hazard index (HI) of 63 for the respiratory system at the same offsite worker receptor identified in Section 16.1 (from arsenic). 16.3 The March 1, 2013 letter from the SCAQMD also states the HRA indicates the Facility poses a maximum acute HI of 3.8 for the developmental system (from arsenic) along the eastern fenceline. 16.4 Also, according to the SCAQMD, the HRA indicates the Facility poses a maximum individual cancer risk (MICR) of 22 in one million to the nearest residential receptor. 16.5 Finally, the SCAQMD advised the Facility that the HRA indicates the Facility poses a maximum chronic HI of 2.9 to the nearest residential receptor. 16.6 DTSC accepts a cumulative risk that does not exceed a one in one million (10-6) for cancer risk. A risk level of 10 -6 implies there is a likelihood that up to one person, out of one million equally exposed people, would contract cancer if exposed to the specific concentration continuously (24 hours per day) over 70 years (an assumed lifetime). This would be in addition to those cancer cases that would normally occur in an unexposed population of one million people. 16.7 DTSC considers a hazard index of one or less than one to indicate that no adverse human health effects (noncancer) are expected to occur. A hazard index is used to analyze non-carcinogenic health effects and it assumes that a threshold exists below which no adverse health impacts are expected. A hazard index is the sum of the hazard quotients attributed to non-carcinogenic hazardous substances with similar critical endpoints (e.g., human organs/systems). A Hazard Quotient (HQ) is the ratio of the potential exposure to each substance and the level at which no adverse effects are expected. If the HQ is calculated to be equal to or less than 1, then no adverse health effects are expected as a result of exposure. If the HQ is greater than 1, then adverse health effects are possible. 16.8 In order for DTSC to consider any exceedance of the standard in Sectionl 6.6 above, Exide must demonstrate that they have employed all reasonable means to achieve the 10 -6 standard including but not limited to installation of the best available control technologies (BACT), housekeeping, operational controls and upgrades to existing control systems. 16.9 Exide's operates three industrial furnaces as a part of its lead recovery operations. These units meet the definition of an industrial furnace pursuant to California Code of Regulations, title 22, section 66260.10 and they are conditionally exempted from the Boiler and Industrial Furnaces (BIFs) requirements found in article 8, chapter 16, title 22 of the California Code of Regulations under section 66266.100(c). One of the conditions for the exemption is that the furnaces are operated as miscellaneous units. 16.10 The March 1, 2013 letter from the SCAQMD states that the FIRA indicates the Facility operation of the industrial furnaces are not meeting the section 66264.601 provision for performance standards that require miscellaneous units be operated in a manner that will ensure protection of human health and the environment. DETERMINATION OF BASIS FOR SUSPENSION 17. The March 5, 2013 Storm Sewer Inspection Report indicates that the degraded and compromised physical condition of the underground pipelines are a source of continuous daily releases to the environment of hazardous waste-containing water.. The hazardous waste releases to the environment are increasing the concentration of hazardous metals, in soil and groundwater underlying the Facility. Groundwater in the area underlying the Facility is already above maximum contaminant levels for drinking water, thereby increasing the urgency with which any sources of contamination must be curtailed and rernediated to minimize further deleterious impacts to the state's drinking water supplies. 18. Based on the Health Risk Assessment submitted to the SCAQMD, DTSC has determined that the Facility is operating its furnaces and its air pollution devices in a manner that is not sufficiently protective of human health and the environment, impacting as many as 110,000 residents in a large geographical area that includes portions of Vernon, Maywood, Huntington Park, Commerce, Boyle Heights and unincorporated areas of east Los Angeles. The predominant contributor to both chronic and acute cancer risk and non-cancer hazard is arsenic emissions from the Facility, with the primary human organs that are harmed are the cardiovascular system, central nervous system, developmental system, respiratory system and skin. 19. The cancer risks and non-cancer hazards to residents and offsite workers in the area exceed DISC and SCAQMD acceptable levels as indicated below: - The chronic cancer risk and non-cancer hazard estimated for an individual resident is 22 in a million and 2.9, respectively; The Facility also causes significant carcinogenic and non-carcinogenic health risk to offsite workers, such that DTSC and SCAQMD acceptable risk levels are exceeded; The HRA submitted to the SCAQMD, indicates the chronic cancer risk (156 in an million) and non-cancer hazard (63) for the an individual worker far exceeds DTSC's one in one million cancer risk and a one (1) for non-cancer risk; According to SCAQMD, the acute non-cancer hazard of (3.8) for an offsite worker also exceeds SCAQMD's action level of (3.0). In summary, the Facility's operation is the source of significant human health-impacting air emissions of toxic metals and these emissions far exceed DTSC's standards for acceptable risk to human health. 20. Based on the Facility's operation of its storm water sewer system which is a source of continuous daily releases of hazardous waste into the environment and operation of its furnaces and air pollution devices that exceed DTSC's standards for acceptable risk to human health, DTSC has determined that action is necessary to prevent or mitigate an imminent and substantial danger to the public health or safety or the environment. SUSPENSION ORDER 21. For the reasons set forth above, the Department suspends Exide's In erim Status Authorization. RIGHT TO A HEARING 22. Respondent has a right to a hearing. If Respondent wishes to request a hearing, the notice of defense must be delivered or mailed to the Department within 15 days after the respondent receives this accusation. Appeal rights and procedures are explained in the attached Statement to Respondent. ADDITIONAL ENFORCEMENT ACTIONS By issuance of this Accusation, the Department does not waive the right to take further enforcement action. Date: tan ohns Deputy Dir Hazardou P as e Management Program EXHIBIT 3 EXHIBIT 3 EXHIBIT 3 STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL Exide Technologies, Inc. 1300 Deerfield Parkway, Suite 200 Milton, Georgia 30004 In the Matter of: Exide Technologies, Inc. 2700 South Indiana Avenue Vernon, California 90058 ID No. CAD097854541 Respondent. HWCA: P3-12/13-010 NOTICE OF DEFENSE OF RESPONDENT EXIDE TECHNOLOGIES, INC. REQUEST FOR (1) AN EMERGENCY IMARING ON A MOTION FOR A TEMPORARY STAY OF THE SUSPENSION ORDER; AND (2) A HEARING ON THE MERITS WITHIN 30 DAYS IN CONFORMANCE WITH HEALTH AND SAFETY CODE SECTIONS 25186.1 AND 25186.2 (3) OBJECTIONS TO ACCUSATION; AND (4) AFFIRMATIVE DEFENSES TO ALL PARTIES AND TO THEIR At LORNEYS OF RECORD: Respondent Exide Technologies, Inc. ("Exide") files this Notice of Defense in response to the Order for Temporary Suspension served upon Exide on April 24, 2013. Exide generally and specifically denies each and every allegation set forth in the Order for Temporary Suspension (the "Order") and in the Accusation for Suspension of Interim Status (the "Accusation"). Exide SMRI-1:4084070323 has executed a Notice of Defense in the form provided by the Department of Toxic Substances Control ("DTSC"), and that fidly executed Notice of Defense is attached hereto as Exhibit A. The entirety of the executed form Notice of Defense attached as Exhibit A is incorporated herein by reference as if fully set forth in this written response. Exide requests: (1) an emergency hearing for a temporary stay of the Suspension Order; and (2) a hearing on the merits within 30 days in conformance with Health & Safety Code Sections 25186.1 and 25186.2. Exide objects to the Accusation upon the igound that it does not state acts or omissions upon which the agency may proceed. Exide objects to the form of the Accusation on the pound that portions of it are so indefinite or uncertain that the Respondent Exide cannot identify the conduct alleged to support the Order or prepare a complete defense. Exide also objects to the Accusation on the ground that, under the circumstances, compliance with the requirements of a regulation, the Order, or the Accusation would result in the material violation of another regulation enacted by another department affecting Exide's substantive rights. In addition to the Notice of Defense, the objections set forth herein, and the request for a hearing, Exide asserts the following affirmative defenses on information and belief: SMRH:4084070523 -2- AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE (Primary Jurisdiction) The Order and Accusation are barred on the grounds that the South Coast Air Quality Management District ("AQMD"), the State Water Resources Control Board, the Los Angeles Regional Water Quality Control Board, and/or other agencies have primary jurisdiction over the mattexs set forth in the Order. SECOND AFFIRMATIVE DEFENSE ermit Compliance) The DTSC's Order is barred on the grounds that Exide has been acting in compliance with the terms of its Title V/RECLAIM Permit, its interim status authorization under the Resource Conservation and Recovery Act of 1976, and any other permit issued by an appropriate agency with jurisdiction over the permitted activity. THIRD AFFIRMATIVE DEFENSE ailure to State a Cause of Action) The Order and Accusation and each charge or cause of action alleged therein fail to state facts sufficient to constitute a cause of action or support the Order against Exide. FOURTH AFFIRMATIVE DEFENSE (Laches) The Order and Accusation and each charge or cause of action alleged therein are barred by the doctrine of laches. SMR1+408407082 3 FIFTH AFFIRMATIVE DEFENSE (Estoppel) The Order and Accusation and each charge or cause of action all eg barred by the doctrine of estoppel. AFFIRMATIVE DEFENSE (Unclean Hands) The DTSC is not entitled to the relief it seeks because it has acted improperly and comes before this tribunal with unclean bands. SEVENTH AFFIRMATIVE DEFENSE (Waiver) The Order and Accusation and each charge or cause of action alleged therein are barred by the doctrine of waiver. EIGHTH AFFIRMATIVE DEFENSE (Federal Preemption) The Order and Accusation and each charge or cause of action alleged therein are barred under the doctrine of federal preemption. NINTH AFFIRMATIVE DEFENSE (Standing or Jurisdiction) The DTSC lacks standing or jurisdiction to assert the charges or causes of action against Exide in the Order and Accusation. SMR}i:408407052. 3 TENTH AFFIRMATIVE DEFENSE (Intervening/Superseding Cause) The injuries and damages of which the DTSC complains in the Order and Accusation are proximately caused by or contributed to by the acts of other third parties, and that said acts constitute intervening and superseding causes of the injuries and damage, if any, of which the DTSC complains, thus barring the DTSC from acting against Exide. ELEVENTH AFFIRMATIVE DEFENSE (Denial of Equal Protection) The Order and Accusation and each charge or cansFt of action alleged therein are barred under the equal protection clauses of the United States Constitution and the California Constitution. TWELFTH AFFIRMATIVE DEFENSE (Lack of Due Process) The Order and Accusation and each charge or cause of action alleged therein are barred because Exide was denied due process under the United States Constitution and the California Constitution. THIRTEENTH AFFIRMATIVE DEFENSE (Ex Post Facto Clause) The Order and Accusation and each charge or cause of action alleged therein are barred under the ex post facto clause of the United States Constitution and the California Constitution to the extent the DTSC seeks to impose liability retroactively for conduct that was not actionable when it occurred. SMR14:408407082 3 -5- FOURTEENTH AFFIRMATIVE DEFENSE (Void for Vagueness) The charges brought by the DTSC in its Order and Accusation are vague and ambiguous, and therefore are unconstitutional. IFTEENTH AFFIRMATIVE DEFENSE (Separation of Powers) The Order and Accusation and each charge or cause of action alleged therein are barred because the DTSC is seeking to act as a legislative body through the establishment of vague and unwritten standards that it seeks to enforce against Exide. ATIVE DEFENSE itrary and Capricious) The actions of the DTSC are arbitrary and capricious in that the DTSC has applied different standards to Exide than those applied to other businesses in the Southern California area. SEVENTEENTH AFFIRMATIVE DEFENSE (No Imminent and Substantial Danger or Identifiable Harm) The Order and Accusation fail to state facts sufficient to allege an imminent and substantial danger to health or the environment at Exide's facility. EIGHTEENTH AFFIRMATIVE DEFENSE (Uncertainty) The Accusation and the Order are vague, ambiguous, uncertain, and unintelligible. S MR1-1:4084070 al 3 NINETEENTH AFFIRMATIVE DEFENSE (Consent) The DTSC has known of the issues raised in the Order and Accusation for an extended period of time, and has consented to Exide's continued operation. AFFIRMATIVE DEFENSE (Abstention) The DTSC's Order and Accusation, and the entire proceeding against Exide, should be stayed until the encies with primary jurisdiction have concluded their actions. TWENTY-FIRST AFFIRMATIVE DEFENSE (Void For Vagueness) Health and Safety Code Section 25186.2 is void for vagueness, because the term imminent and substantial danger, whether on its face or as applied, is too ambiguous to be enforced. TWENTY-SECOND AFFIRMATIVE DEFENSE (Void For Vagueness) California Code of Regulations Sections 66264 and 66265 are, on their face and as applied, void for vagueness and cannot be used as enforceable standards. TWENTY-THIRD AFFIRMATIVE DEFENSE (Void For Vagueness) The use of a hazard index, a maximum individual cancer risk, and a "cumulative risk" enforceable standards are, on their face and as applied, void for vagueness. TWENTY-FOURTH AFFIRMATIVE DEFENSE (Waiver) The DTSC has unreasonably delayed approval of Exide's RCRA permit, and that delay has resulted in a waiver of any claim by the DTSC that Exide only has interim permit status. SMRH:408407082 3 -7- PRAYER FOR RELIEF Exide hereby requests an immediate Stay of the Order and Accusation until such time as a decision is reached on the merits. Exide asserts that there is no imminent and substantial danger to the public health, safety or the environment. Further, the DTSC has failed to allege facts that support or substantiate its claims. The Order and Accusation have effectively shut down Exide's business operations in Vernon, resulting in substantial loss of employment and financial harm. Exide requests that the Court dismiss the Order and Accusation filed by the DTSC, and enter an order permitting Exide to resume operations at its Vernon plant. Exide reserves its right to amend or supplement this Notice of Defense. Dated: May 2013 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP RANDOLPH VI S SER STEPHEN J. O'NEIL JEFFREY J. PARKER OLIVIER THEARD By 3. O'NEIL P Attorney for Respondent Exide Technologies, Inc. MULLIN RICHTER & HAMPTON LLP SHEPP 333 S. Hope Street, 43 d Floor Los Angeles, CA 90071 (213) 620-1780 (main) (213) 620-1398 (fax) www.sheppardmullin.com SMRI4,4084070823 EXHIBIT A STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL Exide Technologies, Inc. 13000 Deerfield Parkway, Suite 200 Milton, Georgia 30004 In the Matter of. HWCA: P3-12113-010 Exide Technologies, Inc. 2700 South Indiana Avenue Vernon, California 90058 NOTICE OF DEFENSE ID No. CAD 097854541 Respondent. Health and Safety Code Section 25186.1 & 25186.2 I, the undersigned Respondent, acknowledge receipt of a copy of the Order for Temporary Suspension, Accusation for Temporary Suspension, Statement to Respondent, and two copies of a Notice of Defense. I request a hearing to permit me to present my defense to the allegations contained in the Order for Temporary Suspension. Dated: Ilay G , 2013 re Respondent) Please Type or Print the Name and Mailing Address of Respondent Ve- Erfzie fi (Name) ..7";,X,10 kle? S-*/ (pyeet Address) (City) (State) / • I hone Number inspector) APPENDIX 4 STATE OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY DEPARTMENT OF TOXIC SUBSTANCES CONTROL Exide Technologies 13000 Deerfield Parkway, Suite 200 Milton, Georgia 30004 ) ) ) ) ) ) ) ) ) ) ) ) ) In the Matter of: Exide Technologies 2700 South Indiana Avenue Vernon, California 90058 CAD 097854541 Respondent HWCA No. 2014-6489 STIPULATION AND ORDER Health and Safety Code Section 25187 Whereas, Exide Technologies (“Exide”) is an owner and operator of a lead-acid battery recycling facility located at 2700 South Indiana Avenue, Vernon, California 90058 (the “Facility”), which operates under interim status authorization from the California Environmental Protection Agency, Department of Toxic Substances Control (the “Department”). Whereas, the Department regulates the Facility pursuant to a comprehensive statutory and regulatory framework for the generation, handling, treatment, transport and disposal of hazardous waste, set forth in the Hazardous Waste Control Law (the “HWCL”), Health & Safety Code section 25100 et seq., and its implementing regulations, California Code of Regulations, title 22 (“Title 22”), section 66260.1 et seq. Whereas, in February 2002, the Department issued a Corrective Action Consent Order, Docket No. P 3-01-02-010 (the “2002 Corrective Action Consent Order”) regarding the Facility to Exide requiring corrective action. Exide remains subject to the requirements of the 2002 Corrective Action Consent Order. 1 Whereas, on November 4, 2013, the Bankruptcy Court (defined below) granted Exide’s motion to enter into Stipulation and Order Docket HWCA: P3-12/13-010 OAH No. 2013050540, with the Department, and such Stipulation and Order was “so ordered” by the Department (the “2013 Stipulation and Order”). Exide remains subject to the requirements of the 2013 Stipulation and Order that was effective on November 4, 2013. Whereas, certain disputes between Exide and the Department have arisen under the 2013 Stipulation and Order and the 2002 Corrective Action Consent Order, including, but not limited to, the scope of, and standards applicable to, appropriate interim and final risk-based corrective action clean-up levels. Whereas, Exide has submitted a Part B hazardous waste facility permit application for the Facility (the “Hazardous Waste Permit Application”) to the Department, which is under review by the Department. Whereas, as part of its Hazardous Waste Permit Application, Exide submitted a proposed closure/post closure plan and proposed closure/post closure cost estimate pursuant to the applicable provisions of the HWCL and Title 22. Whereas, disputes exist between the Department and Exide regarding Exide’s Hazardous Waste Permit Application, including disputes regarding the Closure/Post Closure Plan (defined below), the Closure/Post Closure Cost Estimate (defined below), financial assurances for closure/post closure, and financial assurances for corrective action. Whereas, on October 1, 2014, Exide submitted an updated closure/post closure plan (the “Closure/Post Closure Plan”) and an updated closure/post closure cost estimate (the “Closure/Post Closure Cost Estimate”) for both the Hazardous Waste Permit Application and its interim status requirements under Title 22, section 66265.1 et seq. The Department is reviewing 2 the Closure/Post Closure Plan and Closure/Post Closure Cost Estimate as part of the Hazardous Waste Permit Application. Whereas, the Department cannot deem Exide’s Hazardous Waste Permit Application complete for processing until all requirements are met, including a legally sufficient Closure/Post Closure Plan and the posting of financial assurance corresponding to the Closure/Post Closure Plan and Closure/Post Closure Cost Estimate. Whereas, the Department has issued Summaries of Violation (defined below) for alleged violations at the Facility that remain outstanding as of September 30, 2014. Whereas, the Department and Exide (collectively “the Parties”) agree to resolve certain issues between them on the terms set forth in this Stipulation and Order (“Stipulation and Order”), including certain alleged deficiencies with the Hazardous Waste Permit Application. Additionally, the Parties seek to fully and finally resolve the Summaries of Violation, on the terms set forth herein. Whereas, on June 10, 2013 (the “Petition Date”), Exide filed a voluntary petition for relief under chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), Case No. 13-11482 (the “Bankruptcy Case”). As such, Exide is a debtor and debtor-in-possession. As used herein, “Exide” includes the debtor, debtor-in-possession and, subsequent to the Plan Effective Date (defined below), the reorganized debtor. Whereas, Exide requires Bankruptcy Court authorization to enter into this Stipulation and Order, and Exide will seek approval from the Bankruptcy Court prior to the Department and Exide signing this Stipulation and the Department issuing its Order thereon. 3 Therefore, without any findings of fact, conclusions of law or admissions of liability, the Department and Exide enter into and agree to be bound by this Stipulation and Order as follows: 1. Jurisdiction to enter into this Stipulation and Order exists pursuant to Health and Safety Code section 25187 and Title 22. 2. This Stipulation and Order shall constitute settlement of various disputes addressed herein, including the Summaries of Violation, all on the terms provided herein. This Stipulation and Order does not limit the Department from taking appropriate enforcement action concerning other matters, including, but not limited to, enforcement of this Stipulation and Order, the 2002 Corrective Action Consent Order, or the 2013 Stipulation and Order. 3. The Parties agree no provision of this Stipulation and Order shall be construed as an admission of any wrongdoing or as a violation of any rule, law, statute, ordinance or regulation by Exide. 4. Exide waives the right to a further hearing and appeal with respect to the Settled Matters and the Initial Residential Off-Site Corrective Action Obligations, each as defined below. FINANCIAL ASSURANCE FOR CLOSURE/POST CLOSURE 5. Exide will submit to the Department documentation demonstrating financial assurance for the Closure/Post Closure Plan in accordance with the terms outlined herein, which shall occur on or before October 31, 2014. 6. The Parties have agreed that financial assurance relative to closure/post closure of the Facility (“Closure/Post Closure Financial Assurance”) and pursuant to Title 22 shall be posted as part of Exide’s Hazardous Waste Permit Application and for its Interim Status 4 Document (“ISD”) in the approximate amount of $38,660,000. The Closure/Post Closure Financial Assurance shall be comprised of: (a) The existing hazardous waste financial guarantee bond, which is in the penal amount of $11,158,854 (as of August 2014) (the “Surety Bond”), which consists of $7,995,909.50 for closure and $3,162,949.50 for post closure, shall be maintained or renewed to meet the closure/post closure cost estimate; plus (b) A closure/post closure trust fund (the “Closure/Post Closure Financial Assurance Trust Fund”) to be created in favor of the Department to be funded in an aggregate amount of $27,500,000 (the “Closure/Post Closure Trust Fund Amount”), which consists of $23,044,303.50 for closure and $4,455,696.50 for post closure, as provided in Paragraph 7 below. 7. In order to address the Hazardous Waste Permit Application requirements of the Closure/Post Closure Plan and Closure/Post Closure Cost Estimates (Title 22, §§ 66264.142, 66264.144 & 66270.14(b)(15)-(16)), Exide shall make payments to the Closure/Post Closure Financial Assurance Trust Fund on the dates and in the amounts as follows: (a) The sum of $500,000 shall be deposited in the Closure/Post Closure Financial Assurance Trust Fund upon its creation, which shall occur no later than October 31, 2014. (b) The sum of $2,250,000 shall be deposited in the Closure/Post Closure Financial Assurance Trust Fund on the later of November 1, 2014 or the Stipulation Effective Date (as defined in Paragraph 57 below). (c) The sum of $2,750,000 shall be deposited in the Closure/Post Closure Financial Assurance Trust Fund upon occurrence of each of the following: 5 (1) The effective date of Exide’s Plan of Reorganization (the “Plan Effective Date”); and (2) (d) November 1, 2015.. Beginning on November 1, 2016 and on each one-year anniversary thereafter through and including November 1, 2024, the sum of $2,138,888 shall be deposited in the Closure/Post Closure Financial Assurance Trust Fund until an aggregate amount of $27,500,000 is held by the trustee for the Closure/Post Closure Financial Assurance Trust Fund (not including amounts added by Exide to address inflation consistent with applicable regulations). (e) Consistent with Title 22, including but not limited to, sections 66264.112, 66264.118, 66264.142, 66264.143, 66264.144, 66264.145, 66265.112, 66265.118, 66265.142, 66265.143, 66265.144, and 66265.145, the Department retains the right to modify or require the modification of the Closure/Post Closure Plan, the Closure/Post Closure Cost Estimate and the Closure/Post Closure Financial Assurance for the Facility based on information not now known by the Department as of September 1, 2014. In that event, the Department and Exide agree to modify the terms for payment into the Closure/Post Closure Financial Assurance Trust Fund so that the difference between the revised amount and the original amount paid or to be paid to the Closure/Post Closure Financial Assurance Trust Fund is paid to the Closure/Post Closure Financial Assurance Trust Fund in equal contributions to be paid in a ratable amount beginning on November 1 of the year in which such determination is made and each November 6 1 thereafter through and including November 1, 2024, and calculated based upon the number of years remaining through November 1, 2024. (f) At the time the Department selects a final remedy or remedies based upon the Corrective Measures Study for on-site work (the “On-Site Corrective Action Remedy”), Exide may request to revise the Closure/Post Closure Plan to eliminate duplication, if any, and provide consistency between the Closure/Post Closure Plan and the On-Site Corrective Action Remedy. The Department agrees to evaluate such a proposal in accordance with applicable statutes and regulations. If the Department approves a modification of the Closure/Post Closure Plan, then Exide shall modify the Closure/Post Closure Cost Estimate and the Closure/Post Closure Financial Assurance consistent with the modified Closure/Post Closure Plan and in compliance with the HWCL and Title 22. OFF-SITE CORRECTIVE ACTION 8. Exide will perform off-site corrective action in residential areas (“Residential Off-Site Corrective Action Liability”) and industrial areas (“Industrial Off-Site Corrective Action Liability”) as described below. Residential Off-Site Corrective Action Pursuant to the Interim Measures Workplan 9. Exide’s expenditures for Residential Off-Site Corrective Action Liability, inclusive of amounts required to be paid pursuant to the Department-approved interim measures workplan (“IMWP”), shall be limited to $9,000,000 (“Initial Residential Off-Site Corrective Action Obligations”) solely for a period of five years from the Stipulation Effective Date, subject to the provisions below. Any adjustment to the scope of residential off-site corrective action as approved by the Department pursuant to the Residential Corrective Measures Study (prepared 7 pursuant to the 2002 Corrective Action Consent Order) shall not require Exide’s expenditures to exceed the amount of the Initial Residential Off-Site Corrective Action Obligations during such five-year period. The limitation of $9,000,000 for the period of five years from the Stipulation Effective Date: (a) applies solely with respect to off-site contamination existing as of September 1, 2014, and not to a new release or threatened release of hazardous waste, hazardous constituents, or hazardous substances by Exide, if any; and (b) does not apply if Exide fails to reorganize and proceeds to liquidation, in which case the provisions of Paragraph 62 shall apply. 10. Promptly after the Stipulation Effective Date, Exide shall create a separate trust fund (“Residential Off-Site Corrective Action Trust Fund”) to satisfy the Residential OffSite Corrective Action Liability. Such trust fund shall be funded by an initial payment of $3,000,000 upon the later of the Department’s written approval of the IMWP, following public comment, the Stipulation Effective Date, or November 1, 2014; and a payment of $3,000,000 on the Plan Effective Date; and payments of $1,500,000 each on the first and second anniversaries of the Plan Effective Date. Disbursements from the Residential Off-Site Corrective Action Trust Fund shall be made as set forth in Paragraphs 20 and 21 below. 11. Exide shall perform its obligations for the Residential Off-Site Corrective Action Liability pursuant to work plan(s) approved by the Department that include(s) the IMWP as it is approved by the Department following the public comment period that commenced on September 16, 2014. The Department shall meet with Exide before materially revising the IMWP to reflect any public comments in the IMWP; provided, however, that the Department retains the right in its discretion to modify the IMWP based upon comments from the public and Exide retains the right to invoke dispute resolution under this Stipulation and Order as to any material changes to the IMWP that was issued for public comment. 8 12. With respect to specific residential off-site corrective action (and as included in or in addition to the provisions of the IMWP), the Parties agree that: (a) Subject to obtaining proper access agreements, Exide shall remediate the 39 properties identified by that certain Off-Site Soil Sampling Report dated February 18, 2014 (the “Original Residential Sampling Properties”) and any property within the Northern or Southern Assessment Areas (as defined in the IMWP) using the Department and Office of Environmental Health Hazard Assessment (“OEHHA”) risk based approach to define a “Preliminary Clean-up Goal” for lead of 80 mg/kg (95% Upper Confidence Limit (“UCL”)). Exide may propose to modify the Preliminary Clean-up Goal as provided in subparagraph (d) below. Such modification to the Preliminary Clean-up Goal must be consistent with the Department and OEHHA guidance. The Department will determine the “Final Clean-up Goal.” Determination of the Final Clean-up Goal may require revisions to the IMWP and subsequent public notice and comment. Any administrative costs incurred by Exide associated with establishing a Final Clean-up Goal (e.g., sampling costs, professional fees and application costs) shall not be included when calculating whether the $9,000,000 limit described in Paragraph 9 of this Stipulation and Order has been reached within the applicable five-year period. (b) Interior cleaning of every home where soil remediation of the home’s yard is required will be performed as set forth in the Department-approved IMWP. (c) The initial geographic boundary for additional soil investigation to determine the extent of lead contamination in residential areas is shown on Figures 2A and 2B on the Off-Site Sampling Work Plan Addendum, dated July 26, 2014. 9 (d) A background study for lead was conducted by Exide and has been approved by the Department. That study has been used to establish a background level for lead of less than 80 mg/kg and a Preliminary Clean-up Goal for the area surrounding the Facility. If additional information that is collected during implementation of the IMWP establishes that the current background level is not representative of Los Angeles County (including unincorporated areas contained therein), Exide may propose a revision to the current background number. Any background level for lead will be developed pursuant to methodologies described in the Department’s document titled: “Appendix B Strategies for Establishing and Using Background Estimates of Metals in Soil of Proven Technologies and Remedies Guidance – Remediation of Metals in Soils.” Once the additional background study is complete, the Final Clean-up Goal for lead shall be 80 mg/kg (95% UCL) or background, whichever value is higher. (e) Clean-up by Exide at the Original Residential Sampling Properties and any properties in the Northern or Southern Assessment Areas requiring clean-up as approved by the Department will begin immediately after completion of public review and comment on the IMWP and receipt of written approval to proceed from the Department. Unless modified by the Department following public comment, Exide will prioritize clean-up of the properties in accordance with the guidance provided in the Department’s July 2014 comment letter on the IMWP. Exide will complete the work as expeditiously as possible, but in no event at an average rate of fewer than 2.5 homes per week. 10 ADDITIONAL OFF-SITE RESIDENTIAL CORRECTIVE ACTION 13. No later than four (4) years and six (6) months after the Stipulation Effective Date, Exide shall submit a Residential Corrective Measures Study to address all properties impacted by Facility operations that were not investigated or remediated during the initial five-year period, and will not be addressed as part of continued Interim Measures activities. No later than thirty (30) days upon the later of approval of the Residential Corrective Measures Study by the Department or the fifth anniversary of the Stipulation Effective Date, Exide will deposit additional funds into the Residential Off-Site Corrective Action Trust Fund (from the date of such deposit, the “Augmented Residential Off-Site Corrective Action Trust Fund”) as required to pay for additional items identified by the Residential Corrective Measures Study or agreed to be completed as a continuation of the Interim Measures activities, on a schedule to be approved by the Department consistent with applicable regulatory law. Following approval of the Residential Corrective Measures Study, the Department shall prepare a remedy selection document for public review and comment. The Department will prepare a remedy decision document after public review. If the remedy decision document requirements differ from the approved Residential Corrective Measures Study, Exide shall adjust the Augmented Residential Off-Site Corrective Action Trust Fund within sixty (60) days that the decision is rendered in amounts determined consistent with the formula set forth in the following sentence. Unless otherwise agreed to by the Department, Exide shall make the payments into the Augmented Residential Off-Site Corrective Action Trust Fund on an annual basis, and each payment shall equal the total estimated cost of the residential corrective action remedy selected by the Department less any amounts then remaining in the Residential Off-Site Corrective Action Trust Fund to the extent not needed to pay for previously identified remediation that 11 remains to be performed pursuant to the IMWP, divided by the estimated number of years (according to the schedule approved by the Department) to complete that selected remedy or ten (10) years, whichever is shorter. INDUSTRIAL OFF-SITE CORRECTIVE ACTION LIABILITY 14. Exide shall continue with the emergency response interim measures as conditionally approved by the Department in that letter dated January 13, 2014 (“Emergency Response Interim Measures”) that is attached hereto as Exhibit A. 15. In addition, Exide shall continue to investigate off-site industrial locations pursuant to all approved investigation workplans, including any approved modifications thereto, required as part of the 2002 Corrective Action Consent Order. Upon the later of the fifth anniversary of the Stipulation Effective Date or the completion of the Industrial Off-Site Corrective Measures Study (the “Industrial Off-Site Corrective Action Start Date”), Exide will implement the remedy selected by the Department (using the Department’s risk based approach). 16. No later than the Industrial Off-Site Corrective Action Start Date, Exide shall create a separate trust fund in order to pay for the Industrial Off-Site Corrective Action Liability (the “Industrial Off-Site Corrective Action Trust Fund”). The remedy to address the Industrial Off-Site Corrective Action Liability (the “Industrial Off-Site Corrective Action Remedy”) shall be selected by the Department based on a remedy decision document after public review and will identify the elements of the remedy (which shall include all remedial design, construction, remedial action, operation and maintenance, long-term stewardship (e.g. land use covenants) required to meet the remedial action goals, and certification of the remedial action), the estimated cost of implementing each element, and estimated time to complete that element. The Industrial Off-Site Corrective Action Trust Fund shall be funded by Exide 12 consistent with the requirements of Title 22, section 66264.143. The Industrial Off-Site Corrective Action Trust Fund shall be funded by annual payments made over ten (10) years. The amount of each annual payment into the fund will be based on the total estimated cost of all of the elements of the remedy selected by the Department; provided, however, those portions of the foregoing costs that are attributable to elements of the Industrial Off-Site Corrective Action Remedy shall be funded in equal amounts over the estimated number of years required to complete such work for each element or ten (10) years, whichever is less. The annual cost amount for each element shall be aggregated, and the sum will be the total annual payment. Because there will be different implementation periods for each element, the amount of the total annual payment may vary from year to year. The full amount of such funding shall be equal to the cost estimate for the Industrial Off-Site Corrective Action Remedy selected by the Department. For non-emergency interim measures industrial clean-up, any clean-up of off-site industrial locations shall (a) be conducted pursuant to the 2002 Corrective Action Consent Order and (b) be paid with funds that are in addition to the amounts identified for payment of Exide’s Residential Off-Site Corrective Action Liability. ON-SITE CORRECTIVE ACTION, INCLUDING GROUNDWATER CONTAMINATION 17. By December 31, 2016, or as extended by the Department, Exide shall submit to the Department an On-Site Corrective Measures Study. Remedy selection for on-site corrective action shall be in accordance with the 2002 Corrective Action Consent Order and based upon clean-up alternatives outlined in the On-Site Corrective Measures Study. Exide will prepare a detailed cost estimate for the remedy selected by the Department and for the operation and maintenance of the remedy for the Department’s review and approval once the Department approves a remedy for corrective measures. Consistent with the 2002 Corrective Action Consent 13 Order, the Department shall prepare a remedy selection document for public review and comment following the approval of the On-Site Corrective Measures Study. The On-Site Corrective Action Remedy will be selected by the Department based upon a remedy decision document after public review and will identify the elements of the remedy (which shall include all remedial design, construction, remedial action, operation and maintenance, long-term stewardship (e.g. land use covenants) required to meet the remedial action goals, and certification of the remedial action), the estimated cost of implementing each element, and estimated time to complete that element. If the On-Site Corrective Action Remedy requirements differ from the approved On-Site Corrective Measures Study, Exide shall adjust funds to be deposited in the trust described in Paragraph 18 below within sixty (60) days of such decision; the amount and timing of such adjustment to be determined consistent with the provisions set forth in Paragraph 18 below. 18. Within thirty (30) days after preparation of the remedy selection document, Exide shall create a financial assurance trust fund (the “On-Site Corrective Action Trust Fund”). The On-Site Corrective Action Trust Fund shall be funded by Exide consistent with the requirements of Title 22, section 66264.143. The On-Site Corrective Action Trust Fund shall be funded by annual payments made over ten (10) years. The amount of each annual payment into the fund will be based on the total estimated cost of all of the elements of the OnSite Corrective Action Remedy selected by the Department; provided, however, those portions of the foregoing costs that are attributable to elements of the On-Site Corrective Action Remedy shall be funded in equal amounts over the estimated number of years required to complete such work for each element or ten (10) years, whichever is less. The annual cost amount for each element shall be aggregated, and the sum will be the total annual payment. Because there will be 14 different implementation periods for each element, the amount of the total annual payment may vary from year to year. The full amount of such funding shall be equal to the cost estimate for the on-site corrective action remedy selected by the Department, without duplication for elements of the corrective measures already included within the Closure Plan. This trust fund shall be updated with an annual payment to address inflation for the life of the trust. REIMBURSEMENT/PAYMENTS FROM SPECIFIED TRUST FUNDS 19. The trust funds for off-site and on-site corrective action (“Corrective Action Trust Funds”) may be maintained in separate trusts or a single trust provided that the funds to be deposited as required herein with respect to each specific trust are not commingled and separate accounting is maintained. Unless approved or directed by the Department, funds deposited in one Corrective Action Trust Fund may not be used for payment of amounts other than for those costs and expenses identified above that are specifically designated for payment from such Corrective Action Trust Fund. Exide agrees to preserve the Corrective Action Trust Funds as financial assurances consistent with the HWCL and Title 22. 20. Work performed by Exide, or at the direction of Exide, to address a corrective action approved by the Department shall be eligible for reimbursement or payment from an applicable Corrective Action Trust Fund (“Reimbursable Items”) as specified in this Paragraph. With respect to the Residential Off-Site Corrective Action Trust Fund, payments shall be made to Exide from that fund to the extent Exide has paid a Reimbursable Item or to third parties to the extent a Reimbursable Item is incurred by Exide but not yet paid, pursuant to the procedures outlined in Paragraph 21 below. As to Corrective Action Trust Funds other than the Residential Off-Site Corrective Action Trust Fund, consistent with the requirements of Title 22, sections 66264.143(a)(7) and 66265.143(a)(7), Reimbursable Items may be paid from a 15 particular Corrective Action Trust Fund pursuant to the procedures outlined in Paragraphs 21 and 22 below if the total amount of such Corrective Action Trust Fund is greater than the total amount estimated to be required to pay for all of the remaining corrective actions to be funded from the applicable Corrective Action Trust Fund. 21. In the event that Reimbursable Items are permitted to be paid as specified in Paragraph 20 above, payments shall be made to Exide from the applicable Corrective Action Trust Fund to the extent Exide has paid a Reimbursable Item or to third parties to the extent a Reimbursable Item is incurred by Exide but not yet paid. Such disbursements shall be made from the applicable Corrective Action Trust Fund on a monthly basis through the submission by Exide of statements (each, a “Disbursement Request”) to the Department and to the trustee(s) under the applicable trust fund (the “Trustee(s)”), including reasonable detail and back-up material, invoices, and/or other reasonable similar documentation. The Department shall have thirty (30) business days after receipt of a Disbursement Request to advise Exide and the applicable Trustee of any need for additional information or any objection to matters contained within or covered by such Disbursement Request (collectively, an “Objection”), failing which the Department will have consented to the disbursement by the applicable Trustee of amounts covered by such Disbursement Request and the applicable Trustee shall pay the amount shown on the Disbursement Request to Exide or to the third parties, as applicable, within five (5) business days after expiration of the deadline to either object or request additional information. If the Department timely notifies Exide and the applicable Trustee of an Objection to items contained in a Disbursement Request, the Trustee shall withhold the payment of amounts relating to such Objection, but shall otherwise pay to Exide or the third parties as applicable, all other amounts identified in the Disbursement Request. The Department and Exide agree to attempt to 16 resolve any Objection within fifteen (15) business days after notification thereof through good faith communications and the provision of additional documentation. In the event the Objection has not been resolved within such fifteen (15) business day period, the Parties shall submit such Objection for dispute resolution pursuant to the provisions set forth in Paragraph 51 below. 22. The Department will agree to termination of the applicable Corrective Action Trust Fund: (1) if Exide substitutes alternative financial assurance consistent with Title 22; or (2) upon completion of the work to be addressed by the applicable Corrective Action Trust Fund. If there is sufficient other financial assurance for all remaining on-site and off-site corrective action, the Department shall instruct the Trustee to pay any remaining funds in the applicable Corrective Action Trust Fund to Exide and terminate such Corrective Action Trust Fund. If other Corrective Action Trust Fund(s) do not have sufficient financial assurance to complete all required work, then the Department may direct the transfer of funds deposited from the Corrective Action Trust Fund for which work has been completed to a Corrective Action Trust Fund for which funding is insufficient to complete the required work and terminate such Corrective Action Trust Fund. In the event of a transfer between Corrective Action Trust Funds, the amount transferred may be a credit against Exide’s required annual payment into the receiving Corrective Action Trust Fund. 23. With respect to any request from Exide to reduce the Closure/Post Closure Financial Assurance Trust Fund, the Department shall evaluate the request, including whether there is a duplication of elements of the Corrective Measures Study already included within the Closure/Post Closure Plan, and determine whether it is appropriate to instruct the Trustee to release funds to Exide. Any determination regarding the release of such funds shall be consistent with applicable regulatory law and this Stipulation and Order. 17 SETTLED MATTERS 24. No later than three (3) days after occurrence of the Stipulation Effective Date, Exide shall pay to the Department the sum of $1,286,373.80 (the “Settlement Payment”) in full and complete settlement solely for any monetary claims, fines, penalties or other monetary liability with respect to: (a) the Summaries of Violations (defined below), the violations alleged herein, and any HWCL or Title 22 violations that the Department could have alleged against Exide based on facts known to the Department as of September 30, 2014 ($526,345.00 of the Settlement Payment); and (b) the unpaid costs incurred by the Department after the Petition Date through August 31, 2014, in connection with the 2002 Corrective Action Consent Order, the 2013 Stipulation and Order and work related to compliance with the California Environmental Quality Act (the remaining $760,028.80 of the Settlement Payment) (collectively with the allowed claims described in Paragraph 25 below, the “Settled Matters”). The Settlement Payment shall be paid by cashiers’ check to the California Department of Toxic Substances Control and mailed to: DTSC Accounting Office, 1001 I Street, P.O. Box 806, Sacramento, CA 95812-0806, or by wire transfer pursuant to instruction provided by the Department upon Exide’s request to pay by wire transfer. 25. In addition to the Settlement Payment, the Department shall have an allowed unsecured claim for the Department’s pre-petition oversight costs in the amount of $79,542.09, and an allowed unsecured claim for pre-petition penalties in the amount of $632,760.00. 26. Other than the violations and costs covered under the Settled Matters, the Department represents that it does not know of other violations of the HWCL or Title 22 through September 30, 2014, that it will assert against the Exide Parties (defined below) or of other costs 18 actually incurred by the Department through August 31, 2014, for which it will seek recovery from Exide. 27. Notwithstanding anything contained in this Stipulation and Order, nothing is a Settled Matter except as provided in Paragraphs 24 and 25 above, and Settled Matters do not include, without limitation: (x) the Department’s costs attributable to work performed, or costs incurred, by the Department after August 31, 2014; (y) the injunctive liabilities of Exide pursuant to the 2002 Corrective Action Consent Order, the 2013 Stipulation and Order, this Stipulation and Order, or any other injunctive orders the Department may issue or obtain from a court of competent jurisdiction in connection with the Facility; (z) penalties based on violations by Exide of the HWCL or Title 22 related to facts and circumstances not known by the Department on or before September 30, 2014; (aa) response costs, including oversight costs, in connection with Exide’s ownership or operation of the Facility which the Department may incur after August 31, 2014; and (bb) the Department’s protective claim for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601 et seq., and the Carpenter-Presley-Tanner Hazardous Substances Account Act (“HSAA”), Health & Safety Code § 25300 et seq., set forth in the Department’s December 6, 2013 proof of claim number 3301 in the Bankruptcy Case (the “Proof of Claim”), a copy of which is attached as Exhibit B (collectively, “Excluded Matters”). 28. Release of Settled Matters. Upon payment of the Settlement Payment, and except as provided herein, the Department shall be deemed to release Exide, its predecessors, successors, assigns, and affiliated subsidiaries, and all of their officers, directors, agents, employees, consultants, and insurers (collectively, the “Exide Parties”) from monetary claims, fines, penalties, or other monetary liabilities solely for the Settled Matters; provided, 19 however, that this release shall be null and void if the Department is required by Final Order to disgorge the Settlement Payment, or any part thereof; provided, further that the Department will be under no obligation to raise a defense or otherwise challenge the disgorgement action. For the avoidance of doubt, the provisions of this Paragraph are only intended to address monetary claims, fines, penalties and other monetary liability included in the Settled Matters. The settlement of monetary claims, fines, penalties and other monetary liabilities included in Paragraphs 24 and 25 is not intended to, nor shall it be construed, to release, waive or otherwise modify the Excluded Matters including, without limitation, the Department’s right to take enforcement action against Exide to ensure compliance with the requirements of environmental laws and regulations within the Department’s jurisdiction, or to otherwise affect Exide’s injunctive obligations pursuant to any applicable order or consent decree including, without limitation, the 2002 Corrective Action Consent Order, the 2013 Stipulation and Order, this Stipulation and Order, or such injunctive orders that the Department or a court of competent jurisdiction may issue to Exide in connection with the Facility. Except for the Settled Matters, nothing in this Stipulation and Order is intended to, or shall be construed to, relieve Exide of any liability that Exide may have for releases or threatened releases of hazardous substances or the discharge of hazardous wastes or hazardous waste constituents at or from the Facility as the owner or operator of the Facility. 20 SUMMARIES OF VIOLATIONS AND COMPLIANCE ACTIONS TO RESOLVE SPECIFIC SUMMARIES OF VIOLATIONS 29. “Summaries of Violations” are defined to include the following: (1) The Summary of Violations issued by the Department to Exide on October 23, 2013, alleging certain violations of the following regulatory provisions: Title 22, sections 66265.31, 66265.171, and 66265.173(a); (2) the two Summaries of Violations issued by the Department to Exide on August 12, 2014 alleging certain violations of the following regulatory provisions: Title 22, sections 66265.1101(c)(1) and 66265.1101(c)(4); and (3) violations alleged in letters and reports from the Department to Exide for violations known by the Department prior to September 30, 2014. 30. The Department alleges the following violations by Exide and orders the respective compliance actions set forth below. Without admitting liability as to the Department’s allegations contained in this Paragraph 30, Exide has taken compliance actions to address the alleged violations and Exide shall take further compliance actions as follows: VIOLATIONS ALLEGED BY THE DEPARTMENT IN 2013 (1) Storing waste in open containers: Exide violated Title 22, section 66265.173(a), in that on or about September 20 and 27, 2013, Exide stored containers holding hazardous waste in open containers when hazardous waste was not being added or removed from the containers, to wit: several trailers containing hazardous waste in the staging area were stored open when hazardous waste was not being added or removed from the trailers. Effective immediately, Exide shall keep closed all containers holding hazardous waste during transfer and storage, except when it is necessary to add or remove waste from the container. 21 (2) Failure to minimize the possibility of release – leaking trailers onsite: Exide violated Title 22, section 66265.31, in that on or about August 13, September 20 and 27, and October 4, 2013, Exide failed to minimize the possibility of an unplanned sudden or non-sudden release of hazardous waste or hazardous waste constituents to air, soil or surface water which could threaten human health or the environment, to wit: on the above dates, Exide stored hazardous waste plastic chips in trailers in the staging area that were leaking. Effective immediately, Exide shall maintain and operate the Facility to minimize the possibility of a fire, explosion, or any unplanned sudden or non-sudden release of hazardous waste or hazardous waste constituents to air, soil, or surface water which could threaten human health or the environment. Exide shall ensure that all containers used to accumulate and store hazardous waste are sound and do not leak. (3) Failure to transfer waste from leaking container to sound container: Exide violated Title 22, section 66265.171, in that on or about August 13, September 20 and 27, and October 4, 2013, Exide failed to transfer hazardous waste from a container that was not in good condition and leaking into a container that was in good condition or to manage the hazardous waste in some other way that complies with applicable requirements. Effective immediately, Exide shall store hazardous waste in containers that are in good condition and manage them in a way to prevent them from leaking. If any container of hazardous waste is found that is not in good condition and/or leaking, Exide shall immediately transfer the waste 22 into a container that is in good condition or manage the waste in some other way that complies with applicable requirements. (4) Failure to inspect waste handling areas: Exide violated Title 22, sections 66265.15 and 66265.174, in that Exide failed to inspect all areas used for container storage or transfer, at least weekly, looking for leaking containers and for deterioration of containers and the containment system caused by corrosion or other factors, to wit: Exide failed to inspect trailers holding hazardous waste in the staging area for leaks and deterioration. Effective immediately, Exide shall inspect all areas used for hazardous waste container storage or transfer, at least weekly, looking for leaking containers and for deterioration of containers and the containment system caused by corrosion or other factors. Such weekly inspection shall be documented by Exide to include the date and time of the inspection, the name of the inspector, a notation of the observations made, and the date and nature of any repairs or other remedial actions, and such documentation shall be made available to the Department promptly upon request. VIOLATIONS ALLEGED BY THE DEPARTMENT IN 2014 (5) Lack of leak detection system for Containment Building: Exide violated Title 22, section 66265.1101(b)(3), in that on or about August 5, 2014, and for a period of time prior thereto, Exide failed to maintain a functioning secondary containment system including a leak detection system that is capable of detecting failure of the primary barrier. Exide shall not manage hazardous waste with Free Liquids (including the hazardous waste referred to by Exide as “Feed Material” with Free Liquids for the Reverb Furnace, or liquid 23 hazardous waste) on the floor of the Upper and Lower Feed Rooms and the corridor connecting to the Blast Furnace Feed Room in the Containment Building (collectively referred to herein as “the Secondary Containment Areas”), unless there is a functioning secondary containment system with a leak detection and removal system approved by the Department. The term Free Liquids shall have the same meaning as in Title 22, section 66260.10. The terms Feed Material for the Reverb Furnace, Upper and Lower Feed Rooms, Blast Furnace Feed Room, and Containment Building shall have the same meaning as in Exide’s hazardous waste facility permit application dated August 4, 2014. Exide shall immediately implement the sampling activities provided for in the revised October 16, 2014 Sampling Work Plan, Containment Building Leak Detection System, prepared by Advanced GeoServices, as approved by the Department on October 22, 2014. No later than November 24, 2014, Exide shall complete the required sampling and analysis and submit to the Department a technical memorandum that includes a preliminary data summary of the sampling results. No later than December 15, 2014, Exide shall submit a draft Final Sampling Plan Report to the Department for review and comment. Exide shall address all Department comments and shall submit the Final Sampling Plan Report to the Department by January 2, 2015. No later than October 31, 2014, Exide shall provide the Department with planning, schedule and design documents to remove all hazardous waste with Free Liquids from the Secondary Containment Areas. Once the Department approves the scheduling and design documents and the SCAQMD approves a material handling mitigation plan, Exide shall immediately commence removal of hazardous waste with Free Liquids from the Secondary Containment Areas as approved by the Department. No hazardous waste with Free Liquids shall 24 be placed in the Secondary Containment Areas until specifically authorized by the Department in writing. If Exide performs the necessary testing required by Title 22, section 66265.1101(b) to determine that a portion of the hazardous waste “Feed Material” within the Upper and Lower Feed Rooms, the corridor, and the Blast Furnace Feed Room does not contain Free Liquids, then Exide shall place a liner material approved by the Department under that portion of the hazardous waste. The liner material shall be designed to ensure that any liquids which may potentially be released are contained. Exide shall conduct daily monitoring and inspection for the release of liquids from the hazardous waste placed on the liner material. If the hazardous waste placed on the liner material releases any liquids, then Exide shall remove the portion of the hazardous waste releasing the liquids and manage it in accordance with the approved Final Sampling Plan with respect to the removal of hazardous waste from the Secondary Containment Areas. If the hazardous waste from the Secondary Containment Areas is removed from the Exide Facility, it must be transported as a hazardous waste and managed at a properly authorized facility in accordance with all applicable laws and regulations. If the hazardous waste from the Secondary Containment Areas is stored at the Exide Facility, it must be stored in accordance with Department requirements and with all applicable laws and regulations. All hazardous waste stored on site at the Facility shall be monitored and inspected daily. The Department will authorize placement of hazardous waste with Free Liquids on the floor of the Secondary Containment Areas only after Exide has demonstrated to the Department that the Secondary Containment Areas are in compliance with all applicable Title 22 requirements. These requirements include, but are not limited to, having the final leak detection and removal system 25 installed and fully operational after a Class 2 permit modification is approved by the Department, if operation is sought by Exide during interim status. No later than November 7, 2014, Exide shall submit a proposed leak detection and removal system design meeting the requirements of Title 22, section 65265.1101(b)(3) for the Department’s review. Exide shall address all Department comments and submit a final design and work plan for repair of the existing leak detection and removal system or installation of a new leak detection and removal system that meets Department requirements. The final design and work plan shall be delivered to the Department for approval prior to the start of construction. The final design and work plan will also be used in support of Exide’s Class 2 permit modification request, if any, required to bring the Secondary Containment Areas into compliance with regulatory requirements in section 66270.1101 of Title 22. No later than December 15, 2014, Exide must demonstrate to the Department that a release of hazardous waste has not occurred at or from the Secondary Containment Areas. All activities implemented in the Containment Building and at all other locations at the Facility shall be implemented in accordance with Department, California and federal worker health and safety requirements. (6) Cracks and gaps of the protective coating in the Containment Building: Exide violated Title 22, section 66265.1101(c)(1)(A), in that on or about August 5, 2014, Exide failed to maintain the primary barrier of the containment building free of significant cracks, gaps, corrosion, or deterioration that could cause hazardous waste to be released from the primary barrier, to wit: two areas in the floor in the East Corridor near the 26 Blast Feed Room contained erosion of coating approximately two to five feet in diameter and an inch to an inch and a half deep. Prior to placing hazardous waste in the Containment Building, Exide shall repair the two areas of erosion of the concrete floor in the East end of the corridor in the Containment Building near the Blast Feed Room, in accordance with Title 22, section 66265.1101(c)(3). (7) Failure to inspect the leak detection system in the containment building: Exide violated Title 22, section 66265.1101(c)(4), in that on or about August 11, 2014, and for a period of time prior thereto, Exide failed to inspect the Containment Building and the area surrounding the Containment Building at least once every seven days to detect signs of releases of hazardous waste. Effective immediately, Exide shall inspect the Containment Building, and the area surrounding the Containment Building, and document those inspections in the Facility’s Operating Record as required pursuant to Title 22, section 66265.73. (8) Mismanagement, failure to minimize a release: Exide violated Title 22, section 66265.31, in that on or about August 25, 2014, Exide failed to maintain and operate the Facility to minimize the possibility of any unplanned sudden or non-sudden release of hazardous waste or hazardous waste constituents to air, soil or surface water which could threaten human health or the environment. Effective immediately, Exide shall maintain and operate the Facility in a manner to minimize the release of hazardous waste or hazardous waste constituents. 27 No later than November 9, 2014, Exide shall submit to the Department a plan to minimize the escape of fugitive dust from the doors and any other openings at the Containment Building at the Facility, and to enhance the current cleaning procedures of removing dust and debris containing hazardous waste levels of lead and other constituents in areas outside of the Containment Building, including but not limited to, removal of finely divided debris found in the corners and at the base of the Containment Building and other buildings, parking lots, and unpaved areas of the Facility. The Department may direct Exide to make modifications to this plan. ADDITIONAL VIOLATIONS ALLEGED BY THE DEPARTMENT (9) Installation and use of a rotary dryer, an unauthorized hazardous waste treatment unit: Exide violated Title 22, section 66270.42 in that, since August 8, 2014, and for a period of time prior thereto, Exide operated a rotary dryer to treat hazardous waste plastic chips in its recycling process without prior authorization from the Department. Effective immediately, Exide shall not use the rotary dryer without first obtaining authorization from the Department, either through approval of a modification of its interim status authorization to use the rotary dryer during interim status or through a hazardous waste facility permit to use the rotary dryer in the Facility’s treatment process. The Department will take appropriate actions to process an Exide application for modification of its interim status authorization to use the rotary dryer during interim status. If Exide does not seek a modification of its interim status authorization from the Department to operate this dryer, then Exide shall, no later than November 9, 2014, submit a closure plan and implementation schedule to the Department for closure of this rotary dryer. Exide shall implement the closure plan and schedule with respect to the rotary dryer as approved or modified by the Department. If Exide applies for, but does not 28 receive, authorization from the Department to add the rotary dryer to its process during interim status, Exide shall complete closure of the rotary dryer in accordance with a plan approved by the Department no later than 60 days after the Department’s final determination on Exide’s permit modification. (10) Mismanagement, failure to minimize a release: Exide violated Title 22, section 66265.31, in that on or about August 25, 2014, Exide failed to maintain and operate the Facility to minimize the possibility of any unplanned sudden or non-sudden release of hazardous waste or hazardous waste constituents to air, soil, or surface water which could threaten human health or the environment. Dust/debris exceeding hazardous waste regulatory limits for lead and cadmium were found outside of the south exit door of the Containment Building, the employee parking lot, the rail spur, the areas around the Storm Water Retention Pond, the portions of Indiana Street adjacent to the Facility, the fence line area of the West Yard, and the unpaved area(s) adjacent to the Cooling Tower. Effective immediately, Exide shall maintain and operate the Facility in a manner to minimize the release of hazardous waste or hazardous waste constituents. No later than November 9, 2014, Exide shall submit to the Department a plan to minimize the escape of fugitive dust from the doors and any other openings of the Containment Building at the Facility, and to enhance the current cleaning procedures of removing dust and debris containing hazardous waste levels of lead and other constituents in areas outside of the Containment Building, including but not limited to, removal of finely divided debris found in the corners and 29 at the base of the Containment Building and other buildings, parking lots, and unpaved areas of the Facility. The Department may direct Exide to make modifications to this plan. 31. Submittals: All submittals from Exide pursuant to this Stipulation and Order shall be sent to: Stewart W. Black Deputy Director Department of Toxic Substances Control 1001 I Street; P.O. Box 806 Sacramento, California 95812 Paul Kewin Division Chief, Hazardous Waste Management Program Department of Toxic Substances Control 1001 I Street, P.O. Box 806 Sacramento, California 95812 Rizgar A. Ghazi, P.E. Branch Chief, Office of Permitting Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, CA 95826 Edward Nieto Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 Bill Veile Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 Peter Ruttan Department of Toxic Substances Control 8800 Cal Center Drive Sacramento, California 95826 30 Nancy Bothwell Office of Legal Affairs Department of Toxic Substances Control 1001 I Street; P.O. Box 806 Sacramento, California 95812 All correspondence to Exide pursuant to this Stipulation and Order shall be sent to: Chuck Giesige VP – Recycling Operations – Americas Building 200 13000 Deerfield Parkway Milton, GA 30004 Tom Strang VP – Environmental, Health & Safety Building 200 13000 Deerfield Parkway Milton, GA 30004 Fred Ganster Environmental Health & Safety 3000 Montrose Avenue Reading, PA 19605 John Hogarth, Plant Manager Vernon Recycling Center 2700 S. Indiana Street Vernon, California 90058 Christine Graessle Assistant General Counsel Building 200 13000 Deerfield Parkway Milton, GA 30004 32. Communications: All approvals and decisions of the Department made regarding such submittals and notifications shall be communicated to Exide in writing by the Department’s Deputy Director, Brownfields and Environmental Restoration Program, or his/her designee on permitting and corrective measures issues until appointment of a Deputy Director of 31 Permitting and, thereafter, by either the Deputy Director or his/her designee depending on whether the notice pertains to corrective measures or permitting. No informal advice, guidance, suggestions, or comments by the Department regarding reports, plans, specifications, schedules, or any other writings by Exide shall be construed to relieve Exide of its obligation to obtain such formal approvals as may be required. 33. Quality Assurance: All sampling and analyses performed by Exide under this Stipulation and Order shall follow applicable Department and U.S. Environmental Protection Agency guidance for sampling and analyses. Workplans shall contain quality assurance/quality control and chain of custody procedures for all sampling, monitoring, and analytical activities. Any deviations from the approved workplans must be approved by the Department prior to implementation, must be documented, including reasons for the deviations, and must be reported in the applicable report. The names, addresses, and telephone numbers of the California State-certified analytical laboratories Exide proposes to use must be specified in the applicable workplans. All workplans required under this Stipulation and Order shall include data quality objectives for each data collection activity to ensure that data of known and appropriate quality are obtained and that data are sufficient to support their intended uses. 34. Department Review and Approval: If the Department determines that any report, plan, schedule, or other document submitted for approval pursuant to this Stipulation and Order fails to materially comply with this Stipulation and Order or fails to protect public health, safety or the environment, the Department may: (a) Modify the document as deemed necessary and approve the document as modified. 32 (b) Return the document to Exide with recommended changes and a date by which Exide must submit to the Department a revised document incorporating the recommended changes. (c) Revise the document if Exide does not adequately address the Department’s recommended changes to the submittal. (d) Conditionally approve Exide’s initial or revised document. (e) Exide reserves the right to invoke dispute resolution as to any determination by the Department including matters relating to the foregoing. 35. Compliance with Applicable Laws: Exide shall carry out the obligations under this Stipulation and Order in compliance with all local, State, and federal requirements, including but not limited to requirements to obtain permits and to assure worker safety. Except as otherwise set forth herein, nothing in this Stipulation and Order shall excuse Exide from meeting any more stringent requirement that may be imposed by any applicable law or by any change in applicable law. Except as otherwise set forth herein, nothing in this Stipulation and Order is intended nor shall it be construed to preclude any other State or local agency, department, board, or entity from taking appropriate enforcement actions or otherwise exercising its authority under any law, statute or regulation. 36. Endangerment during Implementation: In the event that the Department determines that any circumstances or activities (whether or not occurring or conducted in compliance with this Stipulation and Order) are creating an imminent or substantial danger to the health or welfare of people on the Facility or in the surrounding area or to the environment, the Department may order Exide to stop further implementation for such period of time as needed to abate the endangerment (a “Stop Work Order”). Any deadline in this Stipulation and Order 33 directly affected by a Stop Work Order under this section shall be extended for the term of such Stop Work Order, and no stipulated penalties will be assessed if such circumstance or activity constitutes an event of force majeure under Paragraph 45 below. If the Department determines an activity, or data or information becomes known to the Department, demonstrating that an activity undertaken pursuant to this Stipulation and Order is creating an imminent or substantial danger to the public, the Department shall apply the procedures set forth in Section 5.4 of the 2002 Corrective Action Consent Order, provided, that if Exide disputes any decision rendered pursuant to those procedures, Exide may seek direct and immediate judicial review in an appropriate California forum. 37. Stipulated Penalties for Noncompliance: Exide shall be liable to the Department for stipulated penalties in the amount of five thousand dollars ($5,000) per day for the first three (3) days and ten thousand dollars ($10,000) per day thereafter per violation for failure to return to compliance as set forth in Paragraph 30. Exide shall be liable for stipulated penalties in the amount of twenty thousand dollars ($20,000) per day for each day a payment required to be made to any of the trust funds as provided in Paragraphs 7, 10, 13, 16, and 18, or pursuant to Paragraph 24 herein is late; provided, however, subsequent to a decision by Exide to withdraw its Hazardous Waste Permit Application or a decision by the Department denying such permit application, Exide shall not be liable to the Department for stipulated penalties for any failure to comply with any Closure/Post Closure Financial Assurance or corrective action financial assurance requirement by the Department that differs from the provisions hereof. No stipulated penalties shall be paid from the financial assurance trust fund or any of the corrective action trust funds referenced in Paragraphs 6, 7, 9, 10, 13, 16, 18, and 19 herein. Once a violation and period of violation is established as final pursuant to the dispute resolution 34 procedures in this Stipulation and Order, the specific monetary amount of the daily stipulated penalty shall not be subject to the dispute resolution provisions of this Stipulation and Order. Subject to Exide’s right to challenge or appeal the violations or period of violation that support the stipulated penalties imposed by the Department pursuant to this Stipulation and Order, in an appropriate California forum, in the event that stipulated penalties are assessed against Exide by the Department during the pendency of the Bankruptcy Case, such post-petition stipulated penalties will be afforded administrative expense priority in the Bankruptcy Case and be deemed an allowed administrative expense. Such post-petition penalties are to be paid by Exide upon demand by the Department without the need to seek further Bankruptcy Court approval; provided, however, Exide shall retain the right to challenge the assessment of such stipulated penalties on any ground (except for the daily amount of the stipulated penalty set forth herein), other than the need to seek Bankruptcy Court approval for the Department to assess and collect such penalties, in an appropriate California forum within thirty (30) calendar days of the date of the demand for payment of stipulated penalties by the Department. In the event that Exide submits such a challenge to the Department’s assessment of stipulated penalties, upon final determination, Exide shall pay the stipulated penalties, if any, upon demand from the Department without the need for further Bankruptcy Court approval. As used in this Paragraph, a final determination means an order that is not subject to further appeal. All penalties shall begin to accrue on the day after the complete performance or payment to a trust fund is due, or on the day a violation occurs, and shall continue to accrue through the final day of the correction of the noncompliance or completion of the activity. Nothing herein shall prevent the simultaneous accrual of separate penalties for violations of this Stipulation and Order as provided in the HWCL, including but not limited to the provisions of 35 Health and Safety Code sections 25188, 25189 and 25189.2. However, the Department will not assess duplicate penalties if delay of one obligation has a causal effect upon a subsequent and related obligation. This provision for stipulated penalties shall not preclude the Department from seeking, nor Exide from challenging in an appropriate California forum, additional sanctions as provided for by law or regulation, including, but not limited to, civil penalties, injunctive relief, or other civil or administrative liability if Exide’s failure to comply with the terms of this Stipulation and Order also is a violation of any law, regulation or obligation over which the Department has jurisdiction. This provision for stipulated penalties also shall not preclude the Department from taking, nor Exide from challenging in an appropriate California forum, further enforcement actions against Exide seeking penalties for violations of interim status requirements, the HWCL, Title 22 or equitable relief for matters not specifically addressed under the terms of this Stipulation and Order. 38. Liability: Nothing in this Stipulation and Order shall constitute or be construed as a satisfaction or release of Exide or any of the other Exide Parties from liability for any conditions or liabilities, under applicable environmental laws or otherwise, arising as a result of past, current, or future ownership or operations of the Facility, except as specifically provided in this Stipulation and Order. Notwithstanding compliance with the terms of this Stipulation and Order, Exide may be required to take further actions pursuant to law or applicable regulations to protect public health or welfare or the environment. Further, nothing in this Stipulation and Order shall constitute or be construed as an admission of liability by or on behalf of Exide or any of the other Exide Parties for any conditions or claims arising as a result of past, current, or 36 future operations, acts or omissions of Exide and/or the other Exide Parties. The Exide Parties specifically deny all liability and reserve all legal rights and defenses. 39. Government Liabilities: The State of California shall not be liable for injuries or damages to persons or property resulting from acts of omissions by Exide or related parties specified in Paragraph 46 (Parties Bound) in carrying out activities pursuant to this Stipulation and Order, nor shall the State of California be held as a party to any contract entered into by Exide or its agents in carrying out activities pursuant to this Stipulation and Order. 40. Reservation of Rights: By entering into this Stipulation and Order, and except as otherwise specifically provided herein, the Department does not waive the right to take further enforcement actions against Exide and the other Exide Parties, including, but not limited to, enforcement of the 2002 Corrective Action Consent Order and the 2013 Stipulation and Order. Exide does not waive the right to challenge any such actions in an appropriate California forum. Further, except as otherwise provided herein, nothing in this Stipulation and Order shall be construed to preclude or prejudice the Department from taking further action under the law against Exide or the other Exide Parties with regard to any response action as a result of the release, or threatened release, of hazardous wastes, constituents of hazardous waste or hazardous substances, at or from the Facility, and the Department expressly reserves all such rights. Exide reserves all rights to challenge any such action in an appropriate California forum. Exide shall provide in its Plan of Reorganization, assuming occurrence of the Plan Effective Date, that such liabilities and/or obligations to the Department will not be discharged, impaired or affected through the Bankruptcy Case or by confirmation of Exide’s Plan of Reorganization, including, but not limited to, liabilities and/or obligations to address the release, or threatened release, of 37 hazardous wastes, constituents of hazardous waste or hazardous substances, at, or that have migrated or emitted, from the Facility. Except as otherwise provided herein, this Stipulation and Order is without prejudice to the Department to exercise its authority to impose any conditions, requirements, standards or actions pursuant to any interim status authorization or hazardous waste permit, nor is this Stipulation and Order intended or shall it be construed to mean that the Department will approve or deny the pending Hazardous Waste Permit Application for the Facility and Exide reserves all rights to challenge any such actions in an appropriate California forum. This Stipulation and Order shall not be construed as a release, waiver, or limitation on any rights, remedies, powers, or authorities, that the Department or Exide has under any statutory regulatory, or common law authority, except as otherwise expressly provided in this Stipulation and Order. 41. Incorporation of Plans and Reports: All plans, schedules, and reports that require Department approval and are submitted by Exide pursuant to this Stipulation and Order are incorporated in this Stipulation and Order upon approval by the Department. 42. Extension Requests: If Exide is unable to perform any activity or submit any document within the time required under this Stipulation and Order, Exide may, prior to expiration of the time, request an extension of time in writing. The extension request shall include a justification for the delay. All requests shall be in advance of the date on which the activity or document is due. 43. Extension Approvals: If the Department determines that good cause exists for an extension, it will grant the request and specify in writing a new compliance schedule. 38 Exide shall comply with the new schedule specified by the Department, which shall be incorporated by reference into this Stipulation and Order. 44. Additional Enforcement Actions: Except to the extent expressly provided in this Stipulation and Order, the Department does not waive the right to take further enforcement actions. Exide does not waive the right to challenge or appeal any Department enforcement order in an appropriate California forum. Furthermore, nothing in the Stipulation and Order affects the right of any other government agency to take enforcement action against Exide. 45. Force Majeure: Exide shall cause all work to be performed within the time limits set forth in this Stipulation and Order unless an extension is approved or performance is delayed by events that constitute an event of force majeure. For purposes of this Stipulation and Order, an event of force majeure is an event arising from circumstances beyond the control of Exide that delays performance of any obligation under this Stipulation and Order, provided Exide has undertaken all reasonably appropriate planning and preventative measures to avoid any foreseeable circumstances. Increases in cost of performing the work specified in this Stipulation and Order shall not be considered circumstances beyond the control of Exide. For purposes of this Stipulation and Order, events which constitute a force majeure shall include, without limitation, events such as acts of God, war, civil commotion, unusually severe weather, labor difficulties, shortages of labor, materials or equipment, equipment breakdown or failure not resulting from operational error, neglect or improper operation or maintenance procedures, government moratorium, delays in obtaining necessary permits or approvals due to action or inaction by third parties, earthquake, fire, flood, or other casualty. Exide shall notify the Department in writing immediately after the occurrence of the force majeure event. Such 39 notification shall describe the anticipated length of the delay, the cause or causes of the delay, the measures taken and to be taken by Exide to minimize the delay and the timetable by which these measures shall be implemented. If the Department does not agree that the delay is attributable to a force majeure event, then the matter may be subject to the dispute resolution procedures set forth herein. 46. Parties Bound: This Stipulation and Order shall apply to and be binding upon Exide and its successors and assigns, and upon the Department and its successors and assigns, including any successor agency that may have responsibility for and jurisdiction over the subject matter of this Stipulation and Order and its successors and assigns. Exide shall disclose the terms and conditions of this Stipulation and Order to all employees, consultants or independent contractors who are assigned or engaged to assist Exide comply with its obligations and duties hereunder. 47. Permit: Nothing in this Stipulation and Order is intended as nor should it be construed as a commitment by the Department to grant Exide a permit for the Facility or excuse Exide from complying with the HWCL, Title 22 or other applicable environmental laws. 48. Integration: This Stipulation and Order constitutes the entire agreement between the Parties as to the settlement of the subject disputes and may not be amended, supplemented, or modified, except by written agreement duly executed by the Parties. 49. Time Periods: Unless otherwise specified, time periods begin from the Stipulation Effective Date and “days” means calendar days unless otherwise stated. The provisions of the California Rules of Court shall apply in computing any period of time under this Stipulation and Order. 40 50. Authority to Enter Into This Stipulation and Order: Each signatory to this Stipulation and Order certifies that he or she is fully authorized by the Party he or she represents to enter into this Stipulation and Order, to execute it on behalf of the party represented, and to legally bind that party. 51. Dispute Resolution: Any dispute arising between Exide and the Department in connection with this Stipulation and Order shall be subject to the dispute resolution procedures set forth in Section 19.0 of the 2002 Corrective Action Consent Order, modified and supplemented as follows: (a) In addition to any rights and dispute resolution provisions contained in the 2002 Corrective Action Consent Order, Exide and the Department will utilize (at Exide’s sole expense) a mutually acceptable third party consultant (the “Independent Contractor”) to facilitate resolution of technical differences of various matters, including without limitation, additional Residential or Industrial Off-Site Clean-up and the appropriate remedy based on the Residential Corrective Measures Study. Nothing, however, obligates either the Department or Exide to accept or adopt any recommendation made by the Independent Contractor. The Independent Contractor will review the facts, meet with the Parties and assist the Parties in resolving the dispute. The Independent Contractor will submit a report of his/her findings and recommendations for resolving the dispute (the “Report”). The Report shall be advisory to the Parties but will not be binding. (b) Exide shall first seek resolution with the Department’s Deputy Director, Brownfields and Environmental Restoration Program whether seeking formal or informal resolution. If the issue is not resolved, Exide shall seek final formal 41 resolution with, and final decision from the Department Director in consultation with the Cal-EPA Secretary. (c) Any final decision by the Department Director in consultation with the Cal-EPA Secretary shall include consideration of, and response to, the Independent Contractor’s findings and recommendations in the Report. (d) If Exide disputes any decision rendered pursuant to these procedures, Exide thereafter may seek direct and immediate judicial review of the dispute in an appropriate California forum. 52. Choice of Forum: The Parties agree California law applies to this Stipulation and Order and that any disputes are subject to review in a California court of competent jurisdiction; provided, however, the Bankruptcy Court shall have concurrent jurisdiction to determine issues relating to the Settlement Payment and the Settled Matters. 53. Covenants not to Sue: Except as otherwise provided in this Stipulation and Order, (a) the Department covenants not to sue or pursue the Exide Parties, provided that the Department receives and retains the Settlement Payment in full, and (b) Exide for itself and its predecessors, successors and assigns covenants not to pursue any civil or administrative claims against the Department, or any agency of the State of California, or against their officers, employees, representatives or agents – in each instance, solely for the Settled Matters, and alleged deficiencies in Exide’s Hazardous Waste Permit Application as specified in the Department’s letter dated June 17, 2014 (“Permit Application Deficiencies”). The applicability of the provisions of this Covenant Not to Sue as to entities covered within the definition of Exide Parties (other than Exide and its predecessors, successors and assigns) who are not signatories to this Stipulation and Order is dependent on their execution of a covenant not to sue in favor of the 42 Department (either now or at any point after the Stipulation Effective Date) consistent with the terms herein. The Department specifically reserves its right to consider any and all underlying facts for purposes of evaluating Exide’s compliance history and for purposes of making any permit determinations and such evaluation or determination is not a claim, demand, cause of action or liability. Exide reserves its right to dispute the underlying facts of any such conduct considered by the Department and contest any permit determination made by the Department. 54. Contribution Protection for Response Costs incurred by Exide: The Parties agree that, by entering this Stipulation and Order, this settlement constitutes an approved settlement for purposes of section 113(f)(2) of CERCLA, 42 U.S.C., § 9613(f)(2). Upon completion of the corrective actions pursuant to work plans approved by the Department, Exide is entitled to protection from contribution actions or contribution claims as provided by CERCLA or the HSAA, solely in connection with the properties and sub-surface media which are the subject of the response actions taken by Exide, as approved by the Department, pursuant to, or in connection with, the 2002 Corrective Action Consent Order, the 2013 Stipulation and Order and/or the provisions of this Stipulation and Order, and solely with respect to currently existing contamination. Nothing in this Stipulation and Order diminishes the right of the Department under CERCLA or the HSAA to pursue Exide, the other Exide Parties, or other “person” (as that term is defined in CERCLA section 101(21), 42 U.S.C. § 9601(21) for response costs incurred by the Department in connection with the release or threatened release of hazardous substances at or from the Facility, or to obtain any other remedy available by law. 55. Rule 9019 Motion and Plan of Reorganization: Exide promptly, and no later than November 6, 2014, will seek an order from the Bankruptcy Court to enter into this Stipulation and Order. Nothing in Exide’s plan of reorganization (“Plan of Reorganization”) 43 shall be contrary to or inconsistent with any material provision set forth herein and Exide’s confirmed Plan of Reorganization and any order confirming the Plan of Reorganization (the “Confirmation Order”) shall expressly acknowledge the obligations and liabilities under this Stipulation and Order, the 2013 Stipulation and Order and the 2002 Corrective Action Consent Order. In the event of any dispute between the terms of the Plan of Reorganization and/or Confirmation Order and this Stipulation and Order, the terms of the Stipulation and Order shall govern. 56. Severability: If any provision of this Stipulation and Order is held invalid by any court, the invalidity or inapplicability of such provision shall not affect any other provision of this Stipulation and Order, and the remaining portions of this Stipulation and Order shall continue in full force and effect, unless enforcement of this Stipulation and Order as so modified by and in response to such invalidation would be grossly inequitable under all of the circumstances, or would frustrate the fundamental purposes of this Stipulation and Order. 57. Stipulation Effective Date: The Stipulation Effective Date shall be the date on which the Stipulation and Order is signed by the Department, except that the Stipulation and Order will not become effective until any order entered by the Bankruptcy Court approving Exide entering into and executing the Stipulation and Order has become a Final Order. If for any reason the Bankruptcy Court does not approve Exide entering into the Stipulation and Order, this Stipulation and Order shall be null and void. As used herein, a “Final Order” means an order of the Bankruptcy Court (a) as to which the time of appeal shall have expired and as to which no appeal shall then be pending; provided, however, the Parties reserve the right to waive any appeal period or (b) if a timely appeal shall have been filed or sought, the order which is the 44 basis of the appeal shall have been affirmed by the highest appellate court to which such appeal could have been presented and/or the time for taking further appeals has expired. 58. Participation in Good Faith: The Department will participate in good faith with any effort by Exide to obtain a resolution of matters relating to the Facility with other federal, state and local entities. 59. Compliance with Closure and Post Closure Requirements: Exide shall comply with all legal requirements related to updating Closure/Post Closure Plans, and corrective action plans for the Facility, and to providing updated financial assurance documentation in accordance with this Stipulation and Order and consistent with applicable law. 60. Compliance with Orders: Exide shall comply with the Stipulation and Order as well as the 2002 Corrective Action Consent Order, the 2013 Stipulation and Order, the HWCL and Title 22 in connection with the ownership or operation of the Facility. Further, nothing in the Stipulation and Order modifies the Department’s statutory and regulatory authority with respect to permit transfers. 61. Costs: Exide is liable for all costs associated with the matters covered by this Stipulation and Order, including, but not limited to, all costs incurred by the Department in reviewing workplans and overseeing the work required by this Stipulation and Order, and for all costs recoverable by the Department from Exide pursuant to the California Environmental Quality Act (“CEQA”) concerning the Facility. The Department shall retain all cost records associated with the work performed under this Stipulation and Order as required by State law. The Department shall make all documents that support the Department’s cost determination available for inspection upon request, as provided by the Public Records Act. Approval and allowance for the payment of the Department’s post-petition costs, including oversight costs 45 incurred in connection with this Stipulation and Order and the 2002 Corrective Action Consent Order and costs recoverable by the Department from Exide pursuant to CEQA, shall be subject to approval by the Bankruptcy Court, which may be granted in the Bankruptcy Court’s order approving this Stipulation and Order. If approved by the Bankruptcy Court, the Department may present to Exide invoices for such costs and Exide shall pay the Department such costs (subject to Exide’s rights set forth herein to dispute such costs) within thirty (30) days of presentment without the need of either Party to seek further Bankruptcy approval to present the invoice or to make the payment. Exide also remains subject to the cost provisions in Paragraph 18.0 of the 2013 Stipulation and Order. 62. Bankruptcy: Unless the Parties otherwise agree, in the event Exide does not reorganize and emerge from Chapter 11 as a going concern through a confirmed Plan of Reorganization prior to October 31, 2015, this Stipulation and Order shall be null and void as to any terms not yet performed including any future payments provided for herein, but not yet paid to the Department. However, to the extent that Exide has made payments under the provisions of this Stipulation and Order, such payments will not be affected. Exide shall remain liable for compliance with financial assurance liabilities under the HWCL and Title 22 and the Department retains the right to take such enforcement actions as it deems appropriate, including, but not limited to, enforcing the financial assurance and injunctive obligations of Exide in connection with the Facility. Exide acknowledges that the Closure/Post Closure Financial Assurance, comprised of the Surety Bond and the Closure/Post Closure Financial Assurance Trust Fund, are regulatory obligations of Exide and these funds are not “property of the estate,” except to the extent of any residual interest therein. Exide further acknowledges that the deposit of funds into the Residential Off-Site Corrective Action Trust Fund is a financial assurance regulatory 46 obligation and the funds in such trust are not “property of the estate,” except to the extent of any residual interest therein. In the event Exide liquidates through a Chapter 11 bankruptcy or converts the Bankruptcy Case to a Chapter 7 bankruptcy proceeding, the Department retains the right to enforce the 2002 Corrective Action Consent Order. The Department further retains the right to amend its Proof of Claim except as to Settled Matters. 63. Date for Compliance: If a date for compliance of an obligation by Exide falls on weekend or holiday, the obligation shall be due on the next business day. 64. Attorney’s Fees: With respect to this Stipulation and Order, each Party shall bear its own attorney’s fees. Nothing herein shall be construed to preclude the Department from recovering its attorney’s fees as part of response costs. 65. Coordinating Committee: The Parties agree to create a coordinating committee or designate a task force comprised of senior members of each party (including the Cal EPA Secretary or his/her successor, the Department Director or his/her successor and Exide’s CEO and his/her successor) for the purpose of enabling the expedited implementation of this Stipulation and Order. The coordinating committee or task force shall convene regularly scheduled meetings and take other such reasonable and good faith actions necessary to accomplish the expeditious and successful implementation of this Stipulation and Order. 66. Nothing in this Stipulation and Order is intended to modify any agreement between Exide and any other entities regarding cost sharing, or to waive or limit any rights Exide may have to seek indemnification or contribution from any other entities. 47 Roberi? M. Cal-use President and Chief Executive Of?cer, Exide Technologies Aggroved as to form: mom/,7 641/ I ndolph C. Visser Sheppard, Mullin, Richter Hampton Counsel for Exide Technologies IT IS SO STIPULATED: i it, Dated: i 43 IT IS SO STIPULATED AND ORDERED: Dated: Approved as to form: Dated: 269, 49 Acting Director, Department of Toxic Substances Control Hal/L, NEW a ita Padilla Su rvising Deputy Attorney General Of?ce of the California Attorney General Counsel for the Department of Toxic Substances Control Exhibit A Department of Toxic Substances Control Matthew Rodriquez Secretary for Environmental Protection Deborah O. Raphael, Director 8800 Cal Center Drive Sacramento, California 95826-3200 Edmund G. Brown Jr. Governor January 13, 2014 Mr. Fredrick Ganster Exide Technologies 3000 Montrose Avenue Reading, Pennsylvania 19605 DTSC REVIEW OF EMERGENCY RESPONSE INTERIM MEASURES/COMPLIANCE ORDER, EXIDE TECHNOLOGIES, VERNON, CA (CORRECTIVE ACTION CONSENT ORDER, DOCKET NUMBER P3-01 /02-010) Dear Mr. Ganster: The Department of Toxic Substances Control (DTSC) has reviewed the “Emergency Response Interim Measures/Compliance Order” work plan (ERIMWP), which was prepared by Advanced GeoServices (AGS) on behalf of Exide Technologies (Exide). The ERIMWP is dated December 30, 2013. The ERIMWP was prepared to address DTSCs “Order to Perform Emergency Response Interim Measures to Clean-Up Off-site Contaminated Soil, Dust and Sediment”, dated December 17, 2013, and the City of Vernon’s “Compliance Order”, dated December 18, 2013. The City of Vernon’s Health & Environmental Control Department (City) also has reviewed the ERIMWP, and on January 9, 2014 provided Exide with an approval letter for their portion of the response activities as they relate to the City’s Compliance Order. A copy of the January 9, 2014, City approval letter is attached. The City’s approval was conditional on Exide responding accordingly to the eleven (11) comments and recommendations presented in their approval letter. DTSC concurs with the comments and recommendations presented in the City’s approval letter. Because DTSC considers the need to implement the response activities expeditiously is necessary, recent discussions between Exide and DTSC included authorization to begin clean-up of the storm drain inlets nearest the facility. We understand this initial effort was completed January 11, 2014. DTSC appreciates Exide’s cooperation and shared opinion on the need for a quick response to the situation. Printed on Recycled Paper Mr. Frederick Ganster January 13, 2014 Page 2 DTSC believes the ERIMWP is adequate to begin all of the described mitigation activities immediately. The ERIMWP is approved with the following DTSC comments and recommendations to be addressed. 1) Exide states that the “ultimate goal of any Interim Measure should be elimination of potential source materials by erosion by wind and water, and prevent complete exposure pathways to human and ecological receptors”. DTSC concurs with this statement; however, we find it to be somewhat at odds with an earlier statement (bottom of Page 2) that “Exide addressed immediate concerns regarding mobilization and transport by runoff or wind and mitigated complete exposure pathways for persons utilizing the roads and sidewalks”. This statement cannot be corroborated by any follow-up data analysis. Exide must include a separate proposal that deals with effectively removing entrained lead and other Siterelated contamination occurring in the hardscape and other semi-porous surfaces surrounding the Facility. 2) Exide states that use of an X-ray fluorescence (XRF) instrument to quantify residual lead was “ineffective”. DTSC assumes Exide is referring to past cleanup efforts where, despite repeated attempts at using a nondestructive cleanup method, their XRF reported lead within a surface material (e.g., concrete sidewalks, rooftops etc.) greater than the lead Total Threshold Limit Concentration (TTLC). There is no evidence that use of the XRF was ineffective. Indeed, (assuming that the instrument had been properly calibrated and was being used correctly) one could also conclude the cleanup was itself ineffective. Exide is free to propose another method of quantifying lead concentrations instead of a XRF. DTSC has already accepted Exide’s previous XRF data; Exide must provide a detailed rationale why their XRF data from previous cleanups is not representative. Exide must provide data supporting the use of an alternate sampling method, if one is proposed. 3) The cleanup should include removal of contaminated soil at sample location 4500 SE7 (Lead concentration = 1,100 milligrams per kilogram [mg/kg]). Exide failed to provide an explanation why they believe that lead detected at this location was not from Exide (also see City approval letter, bullet #4). Until the extent of lead and other contaminants associated with Exide’s operations has been properly characterized, and Exide is able to distinctly separate their contamination from other sources, any areas located within reasonable proximity to Exide with lead and arsenic above their respective TTLCs should be included in the emergency response. Mr. Frederick Ganster January 13, 2014 Page 3 4) Remediation of contaminated dust should occur at the adjacent HoneywellBandini property (also see City approval letter; bullet # 5). Lead was detected at one location (FH-PLOT) in Honeywell’s parking lot at a concentration of 42,000 mg/kg. In addition, a roof dust sample yielded lead at 1,100 mg/kg. Until the extent of lead and other contaminants associated with Exide’s operations has been properly characterized, and Exide is able to separate their contamination from other sources, any areas located within reasonable proximity to Exide with lead and arsenic above their respective TTLCs should be included in the emergency response. 5) The ERIMWP does not propose to collect confirmation soil samples at the 5 tree well surface soil locations with lead above the TTLC (please note that this includes location 4500SE-7). DTSC understands that the intent of the emergency response is to remove the exposure potential. However, Exide will eventually need to show the full extent of soil contamination by collecting stepout/step-down samples. This work could be included now, in the emergency response, or as part of future off-site assessment activities. 6) DTSC recommends including a table that lists all the stormwater inlets that Exide proposes to inspect and clean in the ERIMWP. The two stormwater inlets with hazardous (or close to hazardous) levels of lead should also be clearly identified by Exide either on a table or figure. DTSC will defer to the City of Vernon as to the locations and Exide’s procedures for cleaning out the inlets and associated piping of any accumulated sediment.   7) Exide must include confirmation sampling as an additional criterion for determining if a surface has been adequately cleaned when evaluating if the emergency response interim measure is complete. Exide will need to show that confirmation sampling demonstrates that cleanup is complete and that any residual contamination is below TTLCs. Any locations that are below the TTLCs may still be above risk-based values and should be identified in the report as part of the overall data set for risk assessment. 8) The ERIMWP is proposing to cleanup dust and soils to 1000 mg/kg of lead, and 50 mg/kg of arsenic. DTSC agrees with using these concentrations for emergency interim measures, but does not consider these risk-based values and therefore these areas will have to be included in any future risk assessments. Mr. Frederick Ganster January 13, 2014 Page 4 9) The ERIMWP proposes post-cleaning confirmation surface sampling using 0.5 grams per square-foot (g/sf) as a target. Exide must provide a reference for this value. 10) A number of storm drain inlets, manholes, and/or stormwater piping may not be subject to the City’s jurisdiction. Exide should contact Los Angeles County Flood Control Department or Public Works Department regarding any specific permitting and access agreement issues. Should you have any questions regarding this letter, please contact me at 916-255-3630 or [email protected]. Sincerely, signed by: Peter Ruttan Project Manager Engineering and Special Projects Office Attachment cc: (via e-mail) Mr. Ed Mopas, Exide Mr. John Hogarth, Exide Mr. Paul Stratman, Advanced GeoServices Mr. Russel Kemp, Environ Ms. Margarita Padilla, DOJ Mr. Jerrick Torres, City of Vernon Mr. Ed Pupka, SCAQMD Mr. Wendy Liu, LA-RWQCB Dr. Cyrus Rangan; LACPHD Ms. Nancy Bothwell; DTSC Mr. Rizgar Ghazi, DTSC Mr. Edward Nieto, DTSC Mr. Bill Veile, DTSC Dr. Shukla Roy-Semmen, DTSC Mr. Todd Wallbom, P.G., DTSC HEALTH 8: ENVIRONMENTAL CONTROL DEPARTMENT Leonard Grossberg, Director Health Of?cer 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-881] January 9, 2014 Exide Technologies, Inc. Advanced GeoServices Corp. 2717 Indiana Street 1055 Andrew Drive, Suite A Vernon, California 90058 West Chester, PA 93 80-4293 Attn: John Hogarth, Plant Manager Attn: Paul G. Stratman, P.E. Subject: Emergency Response Interim Measures Work Plan Comments and Notice to Implement Environmental Monitoring Plan Dear Mr. Hogarth and Mr. Stratman, Our of?ce has received and reviewed the document dated December 30, 2013 which addresses the recent Order to Perform Emergency Response Interim Measures issued by the Department of Toxic Substances Control Department (DTSC) and the Administrative Enforcement Compliance Order issued by the City of Vernon Health Environmental Control Department. Based on discussions with our of?ce, DTSC, and Exide Technologies, we have agreed to coordinate the timing of all work requested to follow the tirneline formula outlined in the DTSC order. We concur with the proposed workplan and approve our portion and responsibility based on the City of Vernon Compliance Order issued with the following comments: 0 Obtain proper encroachment permits from the Vernon Community Services Water Department for all proposed activities on City of Vernon sidewalks, storm drain systems, and streets. 0 Any evidence of elevated lead sediment residual found within City of Vernon storm drain catch basins will require proper jetting of the storm drain piping (to the next stormwater manhole access cover) or proper sediment sampling and analysis to ensure the piping is ?ee of elevated lead sediment levels. Under no circumstances are materials other than clean stormwater allowed to ?ow down a storm drain system or otherwise be discharged to the Los Angeles River. 0 Contractors performing work must have a proper health and safety plan and all employees must have proper training. 0 Page 3 of the Emergency Response Interim Measures Work Plan (ERIMWP) claims that soil sample location 4500 SE7 has not been proposed for interim measures because the observed results are not the result of Exide operations; however, no factual data was provided to support this claim. Please ?cfusiveb: I mfustn'af January 9, 2014 Page 2 provide factual data supporting the claim that the observed results of sample location 4500 SE7 are not from Exide operations. 0 Page 4 of the ERIMWP claims that the former Honeywell property is not included in this plan because the former Honeywell operation is known to have utilized lead in its own manufacturing process; however, no factual data was provided to support this claim. Provide factual data supporting the claim that the former Honeywell operation utilized lead in its own manufacturing process. 0 Page 4 of the ERIMWP indicates that vacuuming will extend from the outside edge of the right-of- way to a distance of three feet into the cart-way as measured from the curb face; however, no factual data has been provided to limit the vacuuming area to three feet into the cart?way. Include all area between curb faces for proposed interim measures or provide a minimum of one dust sample analysis (using proposed con?rmatory sampling method) supporting vacuuming limit of three feet from the face of the curb. Page 4 of the ERIMWP indicates that vacuuming will extend ?om the outside edge of the right-of- way to a distance three feet into the cart-way as measured from the curb face; however, the north side of East 26th Street does not have a traditional concrete sidewalk. Please detail how interim measures will be completed for the north side of East 26':11 Street. 0 Page 5 of the ERIMWP indicates that ?if cleanup levels are not achieved after the second attempt, but the surface is visibly absent of loose dust and dirt, the interim measure will be deemed complete?. Please amend this statement to indicate the interim measure will be deemed complete only with concurrence from DTSC and/or City of Vernon Health Environmental Control Department (HECD) representatives. 0 Page 5 of the ERIMWP further indicates ?if the surface is not visibly clean loose dust and dirt is still visible), Exide and DTSC will review conditions and discuss the next appropriate action; however, the City of Vernon is not included in the proposed discussion. Amend the ERIMWP to include the City of Vernon to discuss the next appropriate action if the post vacuum surface is not visibly clean. 0 Page 7 of the ERIMWP indicates that only two stormwater inlet structures along South Indiana Street between East 26th Street and Bandini Boulevard will be assessed to inspect for accumulated sediment; however, there are a total of four stonnwater inlet structures in close proximity to each other along South Indiana Street between East 26th Street and Bandini Boulevard. Amend the ERIMWP to include the remaining two stormwater inlet structures along South Indiana Street for inspection and potential interim measures or provide factual data supporting determination not to inspect these two storrnwater inlet structures. 0 Amend to provide the City of Vernon HECD a minimum of 72-hour notice prior to any con?rmatory sampling operation to allow an opportunity to take split samples. Please note- proposed abatement activities on or within Los Angeles County property catch basins and storm drain system) may require separate permits from Los Angeles County Flood Control District. Contact the Los Angeles County Flood Control District to determine if separate permits will be required. Furthermore, on December 19, 2013, our agency performed stormwater sampling activities in the storm drain system adjacent to the subject Exide facility (see attachment for sample location and analysis results). Based on the stormwater sample analysis results, we have determined that the elevated lead dust and soil levels identi?ed in the November 2013 Environ Step-out Dust and Soil Sampling Report is adversely affecting stormwater quality. Therefore, Exide Technologies is hereby directed to implement the November 2013 Revised (or any subsequent revision thereof) Environmental Monitoring Plan (EMP) which was prepared by Advanced Geoservices (attached). The EMP should be implemented as soon as possible but shall not exceed 30 days from the date of this letter. City of Vernon, 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583?8811 January 9, 2014 Page 3 Vernon City Code Section 21.6.2 states that if the health o?icer has a reasonable basis to believe that any company?s discharge may adversely a?ect stormwater quality, the health o??icer may order said person to take representative samples of the stormwater runoff and have these samples tested as directed by the health o??icer. A separate approval will need to be obtained from DTSC for their portion and responsibility on orders they have issued. If you have any questions, feel free to contact us. Sincerely, Leonard Grossberg, MPA, REHS Director/Health Of?cer Attachments: 2 cc: Mark Whitworth, Vernon City Administrator Scott Porter, Vernon City Attorney Kevin. Wilson, Vernon Community Services and Water Dept. Director Mike Wilson, Vernon Fire Chief Dan Calleros, Vernon Police Chief Paul Kiehl, Interim Risk Manager Peter Ruttan, Department of Toxic Substances Control, 8800 Cal Center Drive, Sacramento, CA 95826 Joe Baiocco, Los Angeles County Flood Control District, Environmental Programs Division review l-8-l4.doc City of Vernon, 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583?8811 Exhibit it cioronicro UNITED STATES BANKRUPTCY COURT District of Delaware PROOF OF CLAIM Name of Debtor: Case Number; Exlce Technologies 13-11482 (KJC) Sets NOTE: Do our use roofer": in make a claimfor on meme that arises after the berth-uptey?ting. You . 1 moy?r'e We: ty'arr administrative more according to US. 5034 Name of Creditor {the person or other entity to whom the debtor owes money or proper-m.- Califomia Department of Toxic Substances Control COURT USE ONLY Mme and address where notices should be sent l'J Check this box if this claim amend: a California Department of Toxic Substances Control previously ?led claim. SDAG Margarita Padilla. CA Department of Justice I 1515 Clay Street. 20th Floor. P. 0. Box "r0550. Oakland. CA 946120550 Number- 911'?! . number: email: I ?led on: Name and address when: payment should he sent (if different from above): Cluck this box if you are aware that Celilomia Department of Toxic Substances Control anyone else has ?led a proof of claim do Nancy Elotnwell, OLC relating to this claim. Attach copy of I P. O. Box 306, Sacramento. CA 95812-0305 ?ml 31mg 53mm? 1 Td?ipho?? ?Mb? {915} 3243154 3m]: _r 1. Amount or Ciuirn us of Date Case Filed: 5 8 ate attached Supplemental ta tement in DT Pro . [fall or part ofthc claim is secured. complete item 4. SUP-port alm If all or part of the claim is entitled to priority. campictc item 5. DEE-neck this box if the claim includes interest Or other charges in midition to the principal amount cfthe claim. Attach a that itemizes interest or merges. 1 Bugs rm- magm: Environmental under Califomia and Federal laws. immion See attached Supplemental Statement. 3. Last four digits oi any number So. Debtor may have scheduled account 35: 3b. Uniform Claim Identi?er {optional}: by which creditor debtor: {See mstm' etion #33) ngcuiu?nsoumetEJBTM?F?* Amount cferrearnge and other charges. as of the time case was ?led. 4. Secured Claim {Sec instruction included in secured claim, il'atry: Check the appropriate box if the claim is seemed by a lien on property or a right of scto?', attach required redacted documents, and provide the requested mfonnaticn. 5 Nature or property or right ofsetc?': Cl Real Estate UMotor Vehicle ?30m Basis for perfection: Describe: Veto: cl Property: 5 Amount of Secured Claim: 5 Annual Interest on: In GF'cted or D?r'ariahle Amman: Unsecured: 5 {when case was ?led] 5. humour of Claim Entitled to Priority under 507 If any part of the claim falls into one of the following categories. check the box specifying the priority and state the amount 13 Domestic Support obligations Under 1 i Wages. sail zines, or commissions (up to CI Conm'bu?ons to en U313. 15 50? (3X 1 or earned within 130 days before the case was ?led or the employee bene?t plan debtor?s business ceased, whichever is earlier - [1 USE. 507 1! 507 Amount euti?cd to El Up to of deposit: toward Taxes or penalties owed to govenmrental units dome Specify 3W purchase, lease, or rental ol?properry or 1! ?507 applicable pmagmpb ci' supp lemen ?1 services for personal, family. or household 1 1 U.S.C. 50? a em en . usew 11 USC. 50? Miriam-us are Mbje? to momma-r: on 6 and every 3 years ?rereqi?ier with remit! to core: commenced on or e?er the date ofcdr?usonenl. 6. Credits. The amount of all payments on this claim has been credited for the patrons: of making this proof of claim. (See instruction 0 {Of?cial Form I?l (D4i13l T. Documents: Attached are redacted copies of any documents that Support the claim, such as pmrnissory notes, purchase orders, invoices, itemized statements of running accounts, mortgages. security agreements, or, in the case of a claim based on an open-end or revolving consumer credit agreement a Statement providing the information required by 3001 It' the claim is secured, box 4 has been completed, and redacted copies of documents providing evidence of perfection of a security interesr are attached. If the claim is secured by the debtor?s principal residence, the Mortgage Proof of Claim Attachment is being ?led with this claim. (See instruction #1 crud the de?nition of ?redacted ,l DO NOT SENT) ORIGWAL DOCUMENTS ATTACHED DOCUMENTS MAY BE DESTROYED AFTER SCANNING. If the documents are not available, please explain: Documents are too numerous and voluminous. See attached Supplemental Statement. I'd El. Signature: (See instruction Check the appropriate box. El i am the creditor. i am the creditor?s authorized agent. Brian Johnson Title: Denim] Director Company: QA gem, of Togig antrol Address and tele hone number (if different from notice address above): P. O. Box 8 8 Sacramento. CA 9581215305 Print Name: Telephone number: {915) 323-3347 I am the trustee, or the debtor, or their authorized ages-rt (See Elairlo'optcy Rule 30m.) declare under penalty of perjury that the information provided in this claim is true and correct?dae best of my information, and reasonable belief. (Signature) email: I am a guarantor, surety, indorser, or other codebtor. [Sec Bankruptcy Rule 3095 .l I more} Irv/47%? Penalty for presenting ?audulent claim: Fine of up to or imprisonment for up to 5 years, or both. 13 USE. 132 and 3571. INSTRUCTIONS FOR PROOF OF CLAIM FORM The immctiom and de?nitions balm are general explanations oftlre low. in certain circumionces. such as bankruptcy cases noijiieo' voiminriiy by tire debtor, exceptions to these general rules may drop ht. Items to be completed in Proof of Claim form Court. Name of Debtor, and Case Number: Fill in the federal judicial district in which the bankruptcy case was ?led {for example, Central District of Calitbmia}, the debtor?s full name, and the case number. If the creditor received a notice of the case from the banlauptey court all of this information is at the top of the notice. Creditor?s Name and Address: Fill in the name oflhc person or entity asserting a claim and the name and address of the person who should receive notices issued during the case. A separate space is provided for the payment address if it di??ers from the nodes address. The creditor has a continuing obligation to keep the court informed of its current address. See Federal Rule of Eatdtruptcy Procedure (FREP) 1002{g). 1. Amati nt of Claim as ofIIatc Case Filed: State the total amount owed to the creditor on the date of die bankruptcy ?ling. Folkrw the instructions concerning whether to complete items 4 and 5. Check the box it? interest or other charges are included in the claim. 2. Basis for Claim: State the type of debt or how it was insured. Examples include goods sold, money loaned, services pcrfomred, personal injuryiwrongful death, car loan, mortgage note, and credit card. If the claim is based on delivering health care goods or services, limit the disclosure of the goods or Services so as lo avoid embarrassment or the disclosure of con?dential health care information. You may be required to provide additional disclosure if an interested party objects to the claim. 3. Last Four Digits ofAny Number by Which Creditor Identi?es Debtor: State only the last four digits of the debtor?s account or other number used by the creditor to identify the debtor. 33. Debtor May Have Scheduled Account As: Report a change in the creditor?s name, a transferred claim, or any other information that clari?es a difference between d'lis proof of claim and die claim as scheduled by ?re debtor. 3b. Uniform Claim Identi?er: If you use a uniform claim identi?er, you may report it here. A uniform claim identi?er is an optional 24-characler identifier that certain large creditors use to facilitate electronic payment in chapter 13 cases. 4. Secured Claim: Check whether the claim is fully_ or partially secured. Skip this section if the claim is entirely unsecured. (See De?nitions.) If the claim is secured, check the box for the nature and value or? property mill secwes the claim, attach copies of lien documentation, and State, as of the date of die banluuptcy ?ling, the armual interest rate (and whether it is ?xed or variable}, and the amount past due on the claim. 5. Amount ofplaim Entitled to Priority Under ll 507 (at. If any portion of the claim falls into any category shown, check the appropriate bottles} and state the amount entitled to priority. (See Defuritions.) A claim may be partly priority and partly non-priority. For example. in some of the categories, the law limits the atnount entitled to priority. 6. Credits: An authorized signature on this proof of claim serves as an acknowledgment that when calculating the amount of die claim, the creditOr gave me debtor credit for any payments received toward the debt. 7. Documents: Attach redacted copies of any documents that show the debt exisrs and alien secures the debt You must also attach copies of documents that evidence perfection of any security interest and documents required by REP 3001(8) for claims based on an open-end or revolving consumer credit agreement or secured by a secunty interest in the debtor?s principal residence. You may also attach a summary in addititm to the documents themselves. FRBP Siloltc) and If the claim is based on delivering health care goods or services, limit disclosing con?dential health care information. Do not send original documents, as attachments may be destroyed after scanning. 8. Date and Signature: The individual completing this proof of claim must sign and date it. FRBP 9011. If the claim is filed electronically, FRBP authorizes mum; to establish local rules specifying what constitutes a signature. If you sign this form, you declare under penaltyr of perjury that the information provided is sore and correct to the best of your knowledge, information, and reasonable belief. Your signature is also a certi?cation that the claim meets the requirements of FRBP 901 1th). Whether the claim is ?led electronically or in person, if your name is on the signature line, you are responsible for the declaration. Print the name and title, if any, of the creditor or other person authorized to ?le this claim. State the ?lcr?s address and telephone number if it orders Pic-m the address given on the top of the form for purposes of receiving notices. if the claim is filed by an authorized agent, provide both the name oi" the individual ?ling the claim and the name of the agent. If the authorized agent is a servicer, identify the corporate servioer as the company. Criminal penalties apply for making a false statement on a proof of claim. IN The UNITED STATES BANKRUPTCY (mom OR THE. DISTRICT In re: Chapter TECHNOLOGIES, Case No. 13?11482 (KJC) Debtor i SUPPLEMENTAL STATEMENT OF THE CALIFORNIA CIF TOXIC SUBSTANCES CONTROL IN SUPPORT OF ITS PROOF OF CLAIM I. The Califmnia Department of Toxic Substances Control an agency of the State of California. submits this supplemental statement in support of Proot?of Claim in the bankruptCy proceeding of Debtor. Exide Technologies (?Exide" or makes this claim for itself and no other agency. unit or entity of the State of California. This Proof of Claim is based on information presently known to DTSC. with the express reservation of rights to amend this Prtioi'of Claim. liles this Prool?of Claim to protect its rights against the Debtor. including. but not limited to. recovery ol? environmental response costs and penalties, in connection with l-iside?s ownership and operation oi?its secondary lead battery recycling facility. a hazardous waste treatment and storage tacility. in ?v'ernon. California {the ?Vernon Eside owns the Vernon Facility and currently operates the hazardous waste facility under interim status Supplemental Statemem?re-ProofofClaim (in re Exide 'l'echnologics. 13-] 1482 (KJCJ ChapterlTl authorization from DTSC. Exide's operations at the Vemon Facility have resulted in. inter cilia. soil and surface and ground water contamination at. and ofilsitc ol?. the Vernon Facility. Environmental int-testigations oi?. and implementation of environmental measures at. the ernon Facility and in connection with off-site impacts stemming from operations at the Vernon Facility are ongoing pursuant to orders issued by DTSC to Enide and under oversight. During the bankruptcy proceedings, Exide. as a debtor-inupossession. is required to manage and operate the property in its possession in compliance with all valid state and federal envirOnmental laws. 28 U.S.C. 95903). By ?ling this Proot?ofClaim. DTSC does not waive its rights to take enforcement action against Exide to ensure compliance with the requirements of environmental laws and regulations within jurisdiction. Exidc?s obligations pursuant injunctive orders issued to it by DTSC. and such injunctivc orders which may issue to Eside. are not claims subject to discharge in bankruptcy. See Ohio Hot-wet. LES. 374 (l (.185 3. limited States 01'! Ca. 579 F.3d T34 (T?tlt Cir. 3009}. cert denied. 131 6? (20M): In re Tort-ricer, 8 F.3d l4t?r (3d. Cir. l993): In. re 944 997 (2d Cir. 1991') further asserts that oversight and?or response costs it incurs post-petition in connection with the injunctive orders issued to Exide andr?or environmental cleanup in connection with Exide?s operations at the Vernon Facility, as well as post-petition penalties assessed against [ii-tide. are entitled to administrative expense priority under 1 1 USE. 3303 and DTSC reserves the right to make such administrative expense priority claims and to amend this Proof ol? Claim if such priority is not allowed. Su?rr'plemental reulTroofot? (in re aside Tech?ogies. 13?1?1132 Chapter'Tl-J Further= DTSC asserts that if Exide continues to own andr?or operate the Vernon Facility post-con?rmation. Exide's liability for environmental cleanup in connection with Debtor?s ownership andr?or operation ofthe Vernon Facility would "spring anew" post?con?rmation. DTSC submits this initial Proof of Claim in the estimated amount of at least 6] ?53.71 with the express reservation of rights to amend this Proof ol?C laim and amount. Nothing in this Proofof Claim constitutes a waiver of any rights or an election or" remedies. Further, by tiling this claim, DTSC does not waive its sovereign immunity. except as otherwise provided by law. Any waiver of sovereign immunity under the law resulting from the tiling of this Proofot? Claim is solely by DTSC, and no other agency, unit or entity of the State of California, and is strictly limited to this Proof of Claim. Further, the filing of this Proof of Claim shall not be deemed or censtrued as a waiver of any objections or defenses that DTSC or any other agency- unit or entity of the State of California may have to this Court's jurisdiction over DTSC or such other agency; unit or entity based upon the Eleventh Amendment or related principles of sovereign immunity or otherwise. all of which are hereby preserved. Il. BACKGROUND A. The California Department of Toxic Substances Control DTSC is a California state government agency. Cal. Health a; Safety Code $8000. regulates all aspects of hazardous waste management in California and enforces laws related to the cleanup of hazardous substances releases or threatened releases in the state. Supplemental Statement re Predict-Claim (in relixide Technologies- 13-] 1482 (KJC) Chapter l. The California Hazardous Waste Control Law The California Hazards Waste Control Law is a comprehensive statutory and regulatory framework designed to regulate the generation. handling. treatment. transport. and disposal of hazardous wasres from cradle to grave. See. Cal. Health Safety Code 25100 at seq. and Cal. Code of Regulations. Title 22, Dir. 4.5 (?Title To protect the public health and the ens-?irom?nent. the HWCL. along with its implementing regulations, mandate a system that regulates hazardous waste from ?cradle to grave? from the time the waste is generated, through storage. transportation. and ultimately to its treatment and disposal. DTSC is the state agency with authority to implement and enforce the Encompassed within this HWCI. authority is the permitting of hazardous waste facilities. Set}. Cal. Health at Satety Code 250lltl~25205 and Cal. Code of Regulations. 'l'itle 22. 4.5. Chapter 20. To obtain a hazardous waste facility it ennit from DTSC. the otener or operator l? the facility must. inter (rile. establish and maintain the ?nancial assurance required under Article 12 ol?the Health and Safety Code sections 25245 et seq. lj-lxide owns the lJernon Facility and currently operates it pursuant to interim status authoriaation from Exidc has submitted a hazardous waste facility permit he is the California analogue of the federal Resource Conservation and Recovery Act. 42 USE. 6901 et seq. Pursuant to state and federal law. adminis ers the in lien of federal administration in California. See. Cal. Health a; Safety Code. 25101, suhd. California: Final Authorization of Revisions to State Hazardous Waste Management Program. 5? FR 32226 (July 22. 1992).} Federal law prohibits California from imposing ?any requirements less stringent than those authorized under 42 LJ.S.C. 6929. A .1. Supplemental Statement re Proof of Claim - re ExideJ'l'echnologies. 13~l 1432 (KJEZI) Chapter I i) application to DTSC for the Vernon Facility. The permit application is being processed by DTSC. The HWCL also authorized DTSC to suspend interim status authorization under Cal. Health 8; Safety Code 25186.1 and 25186.3. Exide was subject to an administrative ?Order for 'l'emporary Suspension" and an "Aceusation for Suspension of interim Status.? issued by to Exide on April 24. 2013. These administrative enforcement matters. together with related state court litigation initiated by Exide. have been resolved through Stipulation and Order. docket number HWCA No. 2013050540. (?Stipulation and Order?) entered into by Exide with DTSC on November 4. 2013.2 Under the HWCL. DTSC is also authorized to issue corrective action orders and impose penalties for noncompliance with such orders. See. Cal. Health 8: Safety Code 25187. 35187.1 and 25188. Il?such an injunctive order is issued to a respondent to take corrective action. that respondent is required to pay oversight See, Cal. Health at; Safety (.?ode {525187.23 DTSC may also seek penalties for failure to comply with a corrective action order. See. Cal. Health Safety Code 25188 in February 2002. issued Corrective Action Consent Order No. {'11 (l to Eiside (?Corrective Action Order'?l in connection with the Vernon Facility. Exide has ongoing obligations under the Corrective Action Order. On November 4. 2013. the Bankruptcy Court issued its "Order Approving Debtor?s Motion For An Order Under Bankruptcy Code Sections 105 and 363 And Bankruptcy Rule 9019 Authorizing and Approving the Stipulation with the California Department of Toxic Substances Control" (?Rule 9019 Order?). [Docket No. 1021] 5 1311505 Supplemental Statemem re Prool?ofCiaim (in re Exide Technologies. 13-1 1482 Chapter 11} The l-lWCl. also authoriaes to seelt penalties for violations of the l-lWCl.. and Title 32. Violations ol?the l-th-?CL. andfor its implementing regulations. are subject to penalties or" up to $25,000 per day per violation, for strict liability. negligent andf'or intentional violations. See eg. Cal. l-lealth and Safety Code 25188, 25189 and 25189.2. 2. The HSAA and CERCLA I The environmental laws enforced by DTSC also include California?s Hazardous Substances Account Act Cal. Health Safety Code 25300 et seq. The establishes a comprehensive program for the cleanup of hazardous substances that have been released. or are threatened to be released. into the environment in California. Under the HSAA. may. inter alto. seek recovery of response costs it incurs in connection with such environmental cleanup activities. including. but not limited to, oversight costs. Cal. Health 8.: Safety Code 25360. DTSC may also bring a cost recovery action against liable parties directly under the federal superfund law- the Comprehensive Environmental Response. Compensation and Liability Act 42 USE. 9601?9675. Under California Health and Safety Code section 25323.5- liable parties are those parties described in section It}? 42 13C. 9607. CERCLA section 42? LLSC. gonna), mal es the following persons liable for all costs of removal or remedial action incurred by (l the owner and operator ol?a vessel or a facility: (3) any person who at the time of disposal of any hazardous substances owned or operated any facility at which such hazardous substances were disposed of; DTSC's Statement rel Proot?ot?Claim (In re hxide Technologies. l3?l Hill (MO: Chapter I t) (3) any person who by contract. agreement, or otherwise arranged for disposal or treatment. or arranged with a transporter for transport 1" or disposal or treatment, of hazardous substances owned or possessed by such person. by any other party or entity. at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances; and any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities. incineration vessels or sites selected by such person. from which there is a release. or a threatened release which causes the incurrence oi? response costs. or" a hazardous substance. Thus. may recover from liable parties all reSponse costs. including but not limited to. oversight costs and interests. incurred by in investigating and cleaning up sites in California with releases or threatened releases substances. Currently contamination at and from the Vernon Facility. including soil. sediment. surface water and ground water contamination. is being addressed through the provisions ol?thc and Title 2?2. l-lowever. makes a protective claim under the and (IliltClA in connection with the Vernon Facility-i. Under the provisions and QERCLA. California Health and Safety Code 25323.5: and 4213130 9607(a}. respectively. l'iside falls within the category of liable parties as the current owner and operator of the Vernon Facility and as the owner and operator of a facility at the time of releases, or threatened releases. of hazardous substances at and from the Vernon Facility. Staten-tent re Proof oiTClairn (In re Eitidle'h?lh'Edt?nologies. 13-1 148:3 (are) IListener l] Ill. VERNON FACILITY A. General Description Exide?s Vernon Facility is located at 27th South lndiana Street. Vernon, California, and occupies at least 15 acres. The Vernon Facility ennsists of: the Main Office Area. a portion of? the Facility containing the administrative offices and employee parking area; 2) the North Yard area. containing the current batter}! recycling operations from battery breaking through lead refining; 3) the South Yard. an area that includes a lined storm water retention pond, container storage areas for batteries destined for recycling. wastewater treatment plant. and warehouse and of?ce buildings: and 4} the West Yard which includes the primary truck entrance, scale and truck tire wash- and maintenance and storage facilities. Operations at the Vernon Facility include recycling lead-bearing scrap materials obtained from spent lcad+acid batteries and lead bearing scrap primarily associated with battery manufacturing related operations. The Vernon Facility receives spent lead-acid batteries and other lead-bearing materials and recycles them to recover lead and polypropylene. B. Exide?s Permitting Status Prior ownertoperators of the Vernon Facility applied for and were granted a RCRA interim status authorization for hazardous waste storage and treatment activities. Exidc acquired (ENE. inc. and the Vernon Facility in 2000. Exide requested a transfer of the interim status authorization and. on anuarjv 5. 200]. approved a Class 1 lnterim Status modification [or a change ol'ownership and control ofthe Vernon Facility from GNB. inc, to E?side Corporation. On November to. 200]. DTSC approved a Class Interim Status Modi?cation for a name 8 ors??'stippamcnat Statement re. so; ot'Claim on re Eside Technologies. lS-t 1432 {too} chapEi-T? change from Eside Corporation to liside Technologies. DTSC's authority over the Vernon Facility while under interim status authorization requires Eside to comply with the technical standards for the operations set forth in California Code of Regulations, Title 22. Division 4.5. Chapter l5. l-ixide has applied for a hazardous waste facility permit from DTSC. The permitting process is ongoing pursuant to the provisions ol?Calii?ornia l-lealth Safety Code ?25000 er Seq. and Title 22.3 C. Corrective Action Order to Exide In 1990. predecessor agency completed a RCRA Facility Assessment oi" the Vernon Facility. The RFA identified 38 Solid Waste Management Units (SWMUs) and two Areas oi" Concern ftOCsl and determined that a number oi~ units at the Vernon Facility had evidence, or a high likelihood, of a release of hazardous substances while in operation. DISC also determined that hazardous waste or constituents had migrated. or threatened to migrate. from the ?v'ernon Facility into the environment through soil. surface water. ground water and air pathways. Further investigations resulted in the identi?cation of additional SWMUs and AOCs by in 199?. in February 2002. DTSC issued its Corrective Action Order to liside in connection with the Venion Facility.4 The Corrective Action Order identified the hazardous waste and ?3 Exide's current tingcial assurance for closure and post-closure of the ?v?ernon Facility is based on the interim status authorization. if the hazardous waste facility permit is authorized by the. closure and post~closure amounts will he recalculated and Hxide will he required to have the required ?nancial assurance in place in the recalculated amount. Cal. Health Safety Code 25245 Additionally. DTSC has the authority to require updates of the closure and post-closure amounts. Cal. Health 8; Safety Code 25246(h.} 9 'oTsc'{supplemental - on re Exide 13-] I482 tit?<36 Chapter 1 ti constituents oliconcern for the Vernon liacility as lead- cadmium. aluminum. arsenic- sodium. antimony. iron. manganese. zinc. acids such as sulfuric acid. scmiuvolatiie organic compounds. and aromatic and halogenated volatile organic compounds. such as benzene, and trichioroethylene. A summary of the work undertaken pursoant to the Corrective Action Order can be found on IIDTSCE website at: Environmental work, both on and off-site. in connection with the Corrective Action Order is continuing under oversight. Elxide is obligated to pay oversight cost pursuant to the HWCL and the terms ot? the Corrective Action Order. in 2008. samples of surficial soil. dust and sediment were collected from locations in II vicinity of the Vernon Facility. Based on the sample test results DTSC requested that Erode prepare and submit an Interim Measures Work Plan to remediate areas containing dust and dirt at concentrations of lead greater than 800 rngr?ltg in proximity to the Facility. Evaluation of the on?- site impacts associated with emissions and fugitive dust from the Vernon Facility is continuing. A copy ofthe C?orrectix-e Action ("erer is posted at website. at the Envirostor link: icr?tinai ide=8il001 T33&eni orcein "1 10 Supplemental Statement re ProofofCIa-irn (In re Exide Technologies. 13:] HEB tl-iJC] Chapter I l) Int-'estigations were also undertaken to evaluate the. impact oi?hazardous substances releases from the Vernon ii-?acility to the Los Angele.? River. During1 20] l. Iii-tide completed sediment and sediment pore water sampling in the Los Angeies River to determine if slag. and sediment observed in a concretewlined drainage channel impacted sediment in the LA River. helieves further investigation and characterization efforts are warranted and has informed Eside- in addition, Exide may be subject to penalties for failure to comply with the Corrective Action Order. Cal. Health 8e Safety Code 25188 DTSC asserts that in the event any such penalties. or other penalties under the are assessed against Estide during the pendency of this Bankruptcy Proceeding, DTSC may recover such penalties as administrative expense priority obligations oi" the Debtor. DTSC reserves the right to submit an application for administrative expense payment of penalties for post-petition violations by liixide of the Con'ective Action Order. also reserves the right to amend this Proofof Claim to include as a general unsecured claim penalties assessed against Eside in connection with the Corrective Action Order. or other violations oi? the should penalties for post-petition violations by Eside not be accorded administrative expense priority. Stipulation and Order re Order for Temporary Suspension and Accusation for Suspension of Interim Status On April 24. 2013 issued an Order for Temporary Suspension and Accusation for Suspension oflnterim Status to Eside. IIWCA Pfinl U. pursuant to Health d: Safety Code section 25186.1 and 25186.3. On November 4. 2013. DTSC and fiside resolved these 1 SupplemEntal Statement rue Proof of?t'laim Eside Technoltigics. 1482 enforcement matters. and related state court litigation. through a Stipulation and Order. UAH No. 2013050540. Pursuant to the terms ofthe Stipulation and Order- Esidc is obligate to. inter alto. install additional emission control devices at the Vernon Facility and to replace its storm water conveyance system at the Vernon Facility based on the Schedule for Compliance set forth in the Stipulation and Order. in addition. Exide must also institute an oil?- site soil sampling5 and blood lead testing program for residents in the vicinity ot?thc Vernon Facility as speci?ed in the Stipulation and Order. Exide is also liable for coats associated with the matters covered by the Stipulation and Order. including but not limited to. all costs incurred by in reviewing work plans and overseeing the tvorlt required by the Stipulation and Order. Pursuant to the terms of the Stipulation and Order. costs pre-dating .lunle 10. 2013. may be regarded as general unsecured claims in this Bankruptcy Proceeding. in addition. pursuant to the terms of the Stipulation and Order and applicable provisions oi'the Esidc maybe subject to penalties or tailure to comply with the Stipulation and Order. asserts that in the event any such penalties. or other post-petition penalties under the WC 1.. are assessed against Exide during the pendency of this Bankruptcy Proceeding. may recover such penalties as administrative expense priority obligations of the Debtor. The oillsitc soil sampling is for arsenic. lead. antimony. cadmium. chromium (and potentially hexavalent chromium). polynuclear aromatic hydrocarbons, biphenyls. on residential properties. schools and daycare fac'lities. In addition. the sampling plan requires analysis for dioxins and f?urans on five representative properties agreed to by and Debtor. l?ursuant to the Bankruptcy Court's November 4. 2013 Rule 9019 Order. may invoice Exide for post-petition oversight costs incurred by DTSC and lei-side is authorized to pay such invoices. as provided in the Stipulation and Order. reserves all rights in the event Exide tails to make the payments to DTSC required under the. Stipulation and Order. including. but not limited to. amending DTSC's Prool?oi?Claim. l-?W 5.. o'rsc?s'suppiemenmi sauna re Proot?ol? Claim (in re Exide Technologies. 13-1 l482 one) Cli?pt?r ll reserves the right to submit an application for administrative expense pavment oi? penalties for peat~petition violations bv the Debtor. in addition. DTSC reserves the right to amend this Prool'ol? Claim to include as a general unsecured claim penalties assessied against Lisidc in connection with the Stipulation and Order. or other violations oi?the l-th?LTL~ should penalties for post-petition violations by Eside not be accorded administrative expense priority. IV. UNPAID FREQ-PETITION COSTS A. Stipulation and Order Oversight Costs DTSC makes a claim for pIE-pEllIiUl?l costs in connection with the worl; required pursuant to the Stipulation and Order in the amount of in the amount of. at least, $59,710.l U. B. Corrective Action Oversight Costs makes a claim for pie-petition costs in connection with the work required pursuant to the Corrective Action Order in the amount of in the amount of. at least, $1142.67. V. DISCS FOR ENVIRONMENTAL CLEAN-UP OF RELEASES 0R RELEASES 0F HAZARDOUS SUBSTANCES AT AND FROM THE VERNON FACILITY DISC asserts that I-ixide's injunction obligations pursuant to the Correctch Action Order and the Stipulation and Order are not ?claims? as defined under the Bankruptcy? Code and Esidc?s injunctive obligations under these orders are not discharged through the Bankruptcy Proceeding. l-iowever, as a protective measure. DTSC makes a claim for response costs under CERCLA and the for cleanup of releases and threatened releases of hazardous substances at and from the Vernon Facility. further asserts that liixide?s liability under is 13 Supplemental-Etatcment re Proof?ot'Claim re 13-] l482 Chapter joint and several for environmental cleanup of contamination at, and from. the Vernon Facility. See In re Notionof (hamsters 139 BR. 39? (ND. Tex 1993). As noted above. the Vernon Facility continues to undergo investigation and the full extent oi?contamination at and from the Vernon Facility has not yet been determined. Thus. makes this protective claim under the I-ISAA and CERCI..A as a contingent unliquidated claim for such response costs. including. but not limited to: oversight costs and interest. DTSC re. ervcs the right to amend this Proof of lClaim. DTSC also reserves the right to seal; payment of any post-petition response costs under and the as administrative expenses priority. VI. CONTINENT, OR UNKNOWN CLAIMS his Proofof Claim reflects certain known liabilities of Eatide to DTSC. DTSC reserves the right to amend its Proof of Claim to assert additional environmental claims against the Debtor in the event that discovers additional information giving rise to such claims. VII. DOCUMENTS SUPPORTING PROOF OF CLAIM The documents that support this Proof of Claim are numerous and voluminous. Information and documents regarding the ?v?ernon Facility may also be found at the DTSC website: at the Exide and the Enviro-Stor iinics. Information and documents regarding the Corrective Action Order can he 1? ound at: ids-80001733 and information and documents regarding the permitting application oi?Exide for the Vernon Facility can he found at: 14 Eiuprrlemental Statement re Proof?ofClaim (In reExide Technologies, i3?1 1482 (KJCJ Chapter nro?le slarttah. DTSC summarizes its supporting documents below: Ii.) Lu 6. liiside Vernon Facility Site ?les located at DTSC's Cal Center of?ce at 8800 Cal Center Drive. Sacramento, Chatsworth of?ce at 921 Oakdalc Avenue Chatsworth, EnviroStor files for the Exide Facility which can be found on website. 1990 RCRA l-"acility Assessment report for the Yemen Facility; Corrective Action Order. Docket No. and related documents; Stipulation and Order and Exhibits, Docket IIWCA P3-12r'13-010. OAH No. EUIBUSUMD: and cost documentation for the unpaid ere-petition costs incurred by in connection with the Vernon Facility: including- but not limited to. D1305 daily log and time reporting system records. trait-tel claims. Indirect Cost Rate Proposal documentation. CALSTARS Procedures Manual. and Project Code Listing manual. Access to the nonanrivilcged documents in possession or control may be requested by contacting counsel of record for DTSC in this matter. Statement re l??'cf Claim 15 {In re Eside 'ie?inomgie?i'? {1?482 (RAGE?rapier- I NOTICES All notices related to this Prool'of Claim should be sent to Dll'SC's counsel of recent at the following address: Margarita Padilla Supervising Deputy Attorney General Of?ce of the Attorney General 1515 Clay Street, 20th Floor PO. Box 70550 Oakland. CA 946i 2 (510] 632-2135 aruarita. Pad i ai'igidtii .ea. uox? EX. RESERVATION OF RIGHTS DTSC reserves the right to amend this Proof of Claim. Respectfully Submitted, Emotes D. HARRIS Attorney General oi? California MARGA arm Supervising l')eputy Attorney General MARGARJTA PADILLA Supervising, Deputy Attorney General Califm'mo Depammem of Toxic?: Substances Control {Signed by eounsel as to legal issues only] l6 [Ti-Sil?uppleniental Statement re Proof Claim (in re Exide Technologies, 131-114?532 (K.le Chapter?i't} APPENDIX 5 Non-Prosecution Agreement for Exide Technologies APPENDIX 5 STATUTE OF LIMITATIONS TOLLING AGREEMENT The parties herein, Exide Technologies, 13000 Deerfield Parkway, Suite 200, Milton, Georgia (“Exide”), by its undersigned officer and through its attorneys, Sheppard Mullin Richter and Hamilton LLP, and the United States Attorney’s Office for the Central District of California (“the USAO”), hereby enter into this into this Statute of Limitations Tolling Agreement (“the Tolling Agreement”) for the purpose of supporting and implementing the Non-Prosecution Agreement attached hereto. It is the intent of the parties to effectively waive and toll the applicable statute of limitations for the investigation and potential criminal violations described below for a period of ten calendar years from the date that the Non-Prosecution Agreement is signed and executed by all parties thereto (“the effective date of the Non-Prosecution Agreement”). WHEREAS: A. Exide has been advised by the USAO that it is the target of a federal investigation into alleged criminal violations occurring within the Central District of California arising under various federal environmental crimes statutes and the attendant regulations, including the federal Resource Conservation and Recovery Act, Title 42, United States Code, Sections 6901 et seq., the federal Hazardous Materials Transportation Act, Title 49, United States Code, Sections 5101 et seq., the federal Clean Air Act, Title 42, United States Code, Sections 7401, et seq., the federal Clean Water Act, Title 33, United States Code, Sections 1251, et seq., and Title 18, United States Code, Sections 2, 371, and 1001. B. It is the intention and understanding of Exide and the Government that the ten year period following the effective date of the Non-Prosecution Agreement shall be tolled and excluded from any calculation of time for purposes of (a) any applicable statute of limitations under the laws of the United States for the violations listed in Paragraph A, and (b) any constitutional, statutory or other claim concerning pre-indictment delay, relating to any federal criminal violations listed in Paragraph A brought by the Government against Exide. C. Exide has been advised by its counsel of the nature of the potential charges, and has been expressly advised that the Government contends that the statute of limitations set forth in 18 U.S.C. § 3282 for the offenses that could be charged against Exide, as referred to in Paragraph A, is five years from the date of the occurrence of the alleged violations. This agreement does not affect Exide’s right to bring any other motion or raise any other defense, including but not limited to any motion or defense based on the Government’s failure to bring any charges against Exide prior to the effective date of the Non-Prosecution Agreement. Exide understands that the effective result of this Tolling Agreement is to waive and exclude a total period of ten calendar years from the effective date of the Non-Prosecution Agreement for the purpose of calculating the applicable statute of limitations for the potential criminal violations described herein. D. Exide has thoroughly discussed this Agreement with Exide’s attorney and knowingly and voluntarily chooses to enter into this Agreement. NOW, THEREFORE, In mutual considerations of their undertakings herein, and subject to the conditions hereof, the parties agree as follows: 1. Exide, through its undersigned representative, hereby agrees that the period beginning on the effective date of the Non-Prosecution Agreement, and terminating at 5:00 p.m. on the date exactly ten calendar years from that effective date, shall be tolled and excluded from any calculation of time with respect to criminal violations which would otherwise become barred by any statute of limitations applicable to the statutes described in Paragraph A above. 2 2. This Agreement shall not be construed as a waiver of any right or defense that Exide may have to any of the criminal violations alleged in this Tolling Agreement and listed in the Non-Prosecution Agreement. 3. The act of entering into this Tolling Agreement, by itself, does not constitute an admission by Exide of any wrongdoing; it has been entered into for the sole purpose of supporting and implementing the attached Non-Prosecution Agreement with the government. STEPHANIE YONEKURA Acting United States Attorney ________________________ Date JOSEPH O. JOHNS Assistant United States Attorney Chief, Environmental Crimes Section I have read this Agreement, and carefully reviewed every part of it with the attorneys for Exide Technologies. I understand it, and I voluntarily agree to it on behalf of Exide Technologies. As the representative of Exide Technologies, I represent that I have authority to act for and on behalf of the corporation. Further, I have consulted with the corporation’s attorneys and fully understand the corporation’s rights that may apply to this matter. No other promises or inducements have been made to the corporation, other than those set forth in this Tolling Agreement. In addition, no one has threatened or forced me or any member of the corporation in any way to enter into this Tolling Agreement. Finally, I am satisfied with the representation of the corporation’s attorneys in this matter. ROBERT M. CARUSO, solely in his capacity as President and Chief Executive Officer EXIDE TECHNOLOGIES 3 ________________________ Date We are the attorneys for Exide Technologies. We have carefully reviewed every part of this Tolling Agreement with Robert M. Caruso, President and Chief Executive Officer of Exide Technologies, who to my knowledge has authority to act for and on behalf of the corporation. To my knowledge, the corporation’s decision to enter into this Tolling Agreement is an informed and voluntary one. ________________________ Date CHARLES L .KREINDLER Sheppard Mullin Richter and Hampton LLP Attorneys for Exide Technologies 4 APPENDIX 6 3Y 3X 3528 Opal St. 6T 3V 3W 5B 3327 Opal St. 6S 5A 4A 3T 3F 3737 East 7th Street 3Z 3U 3E 6R 4Z 4B 3S 3G 3A 5D 5C 4Y 4C 6J 6A 4X 4D 3R 3H 3B 4W 4F 4E 6I 6B 5E 4V 4U 4H 4G 3Q 3I 3C 5F 4T 4S 4J 4I 6H 6C 6U 4Q 4R 4L 4K 3P 3J 3D 6M 6L 6G 6D 5G 4P 4M 3O 3K 6O 6N 6K 6F 6E 5K 5H 4O 4N 3N 3L 6Q 6P 5J 5I 3M VOLUNTEERED PROPERTIES PER DTSC 3 DTSC PROPOSED LOCATIONS 21 TOTAL 2B 2C 7Q 2A 2D 7P 1Z 2E 7M 7O 7N 1D 1B 7L 1C 1A 1Y 1X 1W 1V 1F 1E 7I 7H 7J 7K 1J 1I 1H 1G 2H 7G 2G 2F 1M 1L 1K 2S 7F 7E 7D 1N 7A 2J 2I 1O 7C 7B 2L 2K 1Q 1P 2N 2M 1S 1R 2P 2O 1T 2R 2Q 1U DTSC PROPOSED LOCATIONS 17 TOTAL