EDCO Disposal Corporation

SETTLEMENT AGREEMENT

This Settlement Agreement is entered into between the California Air Resources

Board (CARB), with its principal location at 1001 I Street, Sacramento, California

95814; and EDCO Disposal Corporation, with its principal location at 6670 Federal

Boulevard, Lemon Grove, California 91945; EDCO Waste & Recycling Services Inc.,

with its principal location at 6670 Federal Boulevard, Lemon Grove, California 91945;

Escondido Disposal, Inc., with its principal location at 775 Norwalk Street, California

92025; and EDCO Transport Services LLC, with its principal location at 224 South Las

Posas Rd., San Marcos, California 92078 (collectively referred to herein as EDCO

Disposal Corporation and its Affiliates). EDCO Disposal Corporation and its Affiliates

and CARB may be referenced as the “Parties,” or individually, as a “Party.”

LEGAL BACKGROUND

(1) Purpose. The California Health and Safety Code mandates the reduction of the

emission of toxic air contaminants (TAC). CARB has determined that particulate

matter (PM) from diesel-fueled engines is a TAC. (Health & Saf. Code §§ 39002,

et seq., 39650-39675.) In-use on-road diesel vehicles are powered by diesel

fueled engines that emit toxic PM.

(2) Regulation. CARB adopted the Regulation to Reduce Emissions of Diesel

Particulate Matter, Oxides of Nitrogen and Other Criteria Pollutants, from In-Use

Heavy-Duty Diesel-Fueled Vehicles (Truck and Bus Regulation) to reduce diesel

PM and criteria pollutant emissions from on-road heavy-duty diesel-fueled

vehicles. (Cal. Code Regs., tit.13, § 2025.)

(3) Regulatory Provisions. Any person, business, federal government agency, school

district or school transportation provider, or broker, that owns, operates, leases,

rents or sells vehicles in California that operate on diesel-fuel, dual-fuel, or

alternative diesel-fuel, that are registered to be driven on public highways, were

originally designed to be driven on public highways whether or not they are

registered, yard trucks with on-road engines or yard trucks with off-road engines

used for agricultural operations, both engines of two-engine sweepers, school

buses, and have a manufacturer's gross vehicle weight rating (GVWR) greater

than 14,000 pounds with 2006 model year engines or older must comply with the

schedule to upgrade the engine(s), and PM Best Alternative Control Technology

(BACT) requirements, by January 1, 2014 (Cal. Code Regs., tit. 13, § 2025.)

(4) Penalty Provisions. Failure to comply with the regulatory requirements is a

violation of state law that may result in penalties up to ten thousand dollars

($10,000.00 USD) for strict liability violations; respectively, for each day in which

the violation occurs. (Cal. Code Regs., tit.13, § 2025; Health & Saf. Code

§§ 39674, 39675, 42400 et seq., 42402 et seq., and 42410.)

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CASE BACKGROUND

(5) Corporate Entity. At all relevant times, EDCO Disposal Corporation and its

Affiliates were organized under the laws of the State of California as a

Corporation and conducted business in the State of California.

(6) Compliance Options. EDCO Disposal Corporation and its Affiliates have elected

to utilize the low-use vehicle exemption (Cal. Code Regs., tit. 13, § 2025(p)(4));

credit provision (Cal. Code Regs., tit. 13, § 2025(j)); and the phase-in option (Cal.

Code Regs., tit. 13, § 2025(i)) in the Truck and Bus (TB) Regulation.

(7) Allegations. This Settlement Agreement resolves Notice of Violation (NOV) HDD-

2019-0009, which was issued on October 12, 2020. CARB alleges EDCO Disposal

Corporation and its Affiliates violated the TB Regulation by failing to comply with

the compliance schedule (Cal. Code Regs., tit. 13, § 2025(f)), and the phase-in

option requirements (Cal. Code Regs., tit. 13, § 2025(i)), resulting in ten (10)

violations, as outlined in Notice of Violation HDD-2019-0009. CARB also alleges

that EDCO Disposal Corporation and its Affiliates violated the terms of the

Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) and

Low NOx Engine Incentives Voucher Request and Terms and Conditions Form

Purchaser/Lessee Terms and Conditions (HVIP Agreements) in 2018 that it

entered into by violating the TB Regulation. CARB alleges that if paragraphs 1

through 7 were proven, civil penalties could be imposed, and breach of contract

claims could be pursued against EDCO Disposal Corporation and its Affiliates for

each and every vehicle involved in the violations and each day.

(8) Acknowledgment. EDCO Disposal Corporation and its Affiliates admit to the

facts in paragraphs 1 through 7 but deny any liability resulting from said

allegations.

(9) Consideration. In consideration of the foregoing, and of the promises and facts

set forth herein, the Parties desire to settle and resolve all claims, disputes, and

obligations relating to the above-listed alleged violations and voluntarily agree to

resolve this matter by means of this Settlement Agreement. In order to resolve

the violations described herein, EDCO Disposal Corporation and its Affiliates

have taken, or agree to take, the actions enumerated below within the Terms and

Conditions. Further, CARB accepts this Settlement Agreement in termination and

full settlement of this matter.

TERMS AND CONDITIONS

In consideration of CARB not filing a legal action against EDCO Disposal Corporation

and its Affiliates for the alleged violations referred to above in the Legal Background

and Case Background, and EDCO Disposal Corporation and its Affiliates’ agreement

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to complete all terms and conditions set forth below, CARB and EDCO Disposal

Corporation and its Affiliates agree as follows:

(10) Settlement Amount. EDCO Disposal Corporation and its Affiliates shall pay a civil

penalty of twelve thousand five hundred dollars ($12,500.00 USD) for violations of

the TB Regulation. EDCO Disposal Corporation and its Affiliates shall also pay two

hundred twenty-five thousand dollars ($225,000.00 USD) to resolve the claims

regarding the HVIP Agreements.

(11) Civil Penalty Payment Method. EDCO Disposal Corporation and its Affiliates shall

pay the civil penalty by check, credit card, wire transfer, or portal, payable to

CARB, using instructions provided separately by CARB in a Payment Transmittal

Form. EDCO Disposal Corporation and its Affiliates are responsible for all payment

processing fees. Payments shall be accompanied by the Payment Transmittal Form

to ensure proper application. CARB shall deposit the civil penalty into the Air

Pollution Control Fund for the purpose of carrying out CARB’s duties and functions

to ensure the integrity of its air pollution control programs. Should payment

instructions change, CARB will provide notice to EDCO Disposal Corporation and

its Affiliates in accordance with Paragraph 14 (Notices).

(12) Other Relief. EDCO Disposal Corporation and its Affiliates shall pay two hundred

twenty-five thousand dollars ($225,000.00 USD) to resolve the claims regarding

alleged violations of the HVIP Agreements. EDCO Disposal Corporation and its

Affiliates shall pay the amount by check, credit card, wire transfer, or portal,

payable to CARB, using instructions provided separately by CARB in a Payment

Transmittal Form. EDCO Disposal Corporation and its Affiliates are responsible for

all payment processing fees. Payments shall be accompanied by the Payment

Transmittal Form to ensure proper application. CARB shall deposit the civil penalty

into the Air Pollution Control Fund for the purpose of carrying out CARB’s duties

and functions to ensure the integrity of its air pollution control programs. Should

payment instructions change, CARB will provide notice to EDCO Disposal

Corporation and its Affiliates in accordance with Paragraph 14 (Notices).

(13) Documents. EDCO Disposal Corporation and its Affiliates shall promptly email or

mail the signed and dated Settlement Agreement, with copy of proof of payment

of the penalty, mitigation, and/or SEP (if applicable), a copy of the Payment

Transmittal Form(s) (if applicable), and the signed and dated Compliance Plan (if

applicable) to the address or email in Paragraph 14 (Notices).

(14) Notices. Unless otherwise specified in this Settlement Agreement, whenever

notifications, submissions, or communications are required by this Settlement

Agreement, they shall be submitted in writing to the address or email below:

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As to CARB:

California Air Resources Board

Enforcement Division / Settlement Agreements

Diesel Programs Enforcement Branch / Statewide Truck and Bus

Enforcement Section

P.O. Box 2815

Sacramento, California 95812-2815

Settlement_Agree[email protected].gov

As to EDCO Disposal Corporation and its Affiliates:

EDCO Disposal Corporation

6670 Federal Boulevard

Lemon Grove, California 91945

ssouth@edcodisposal.net

As to EDCO Disposal Corporation and its Affiliates Legal Representation:

Marc Empey

Palm Springs Mergers and Acquisitions Firms

Slovak Baron Empey Murphy & Pinkney LLP

1800 E. Tahquitz Canyon Way

Palm Springs, California 92262

Email: empey@sbemp.com

Any Party may, by written notice to the other Parties, change its designated

notice recipient or notice address provided above. Notices submitted pursuant to

this section shall be deemed submitted upon emailing or mailing.

(15) Recovery of Costs. If the Attorney General files a civil action to enforce this

Settlement Agreement, EDCO Disposal Corporation and its Affiliates shall pay all

costs of investigating and prosecuting the action, including expert fees, reasonable

attorneys’ fees, and costs.

(16) Repeat Violations. EDCO Disposal Corporation and its Affiliates agree to comply

with all regulatory requirements and acknowledges that repeat violations could

result in increased penalties in the future.

(17) Entirety. This Settlement Agreement constitutes the entire agreement and

understanding between the Parties concerning the Case Background and

supersedes and replaces any and all prior negotiations and agreements of any kind,

whether written or oral, between the Parties concerning the Case Background

hereof. This Settlement Agreement consists of 9 pages and 35 paragraphs.

(18) Binding Effect. This Settlement Agreement binds EDCO Disposal Corporation and

its Affiliates, and any principals, officers, receivers, trustees, successors and

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assignees, subsidiary and parent corporations and CARB and any successor agency

that may have responsibility for and jurisdiction over the subject matter of this

Settlement Agreement.

(19) Effective Date. The effective date shall be the date upon which this Settlement

Agreement is fully executed.

(20) Modification and Termination. No agreement to modify, amend, extend,

supersede, terminate, or discharge this Settlement Agreement, or any portion

thereof, is valid or enforceable unless it is in writing and signed by all Parties to this

Settlement Agreement.

(21) Severability. Each provision of this Settlement Agreement is severable, and in the

event that any provision of this Settlement Agreement is held to be illegal, invalid

or unenforceable in any jurisdiction, the remainder of this Settlement Agreement

remains in full force and effect.

(22) Choice of Law. This Settlement Agreement shall be interpreted and enforced in

accordance with the laws of the State of California, without regard to California’s

choice-of-law rules.

(23) Non-Discharge. It is further agreed that the penalties described in this Settlement

Agreement are non-dischargeable under United States Code, title 11, section

523(a)(7), which provides an exception from discharge for any debt to the extent

such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a

governmental unit.

(24) Rules of Construction. Any rule of construction to the effect that ambiguities are to

be resolved against the drafting party shall not be applied in interpreting this

Settlement Agreement.

(25) Non-Waiver. The failure to enforce any provision of this Settlement Agreement

shall not be construed as a waiver of any such provision, nor prevent such Party

thereafter from enforcing such provision or any other provision of this Settlement

Agreement. The rights and remedies granted all Parties herein are cumulative and

the election of one right or remedy by a Party shall not constitute a waiver of such

Party’s right to assert all other legal remedies available under this Settlement

Agreement or otherwise provided by law.

(26) Intent to be Bound. The Parties represent that: They have participated fully in the

review and drafting of this Settlement Agreement; understand and accept all

terms; enter into this Settlement Agreement freely and voluntarily; have had an

opportunity to consult with legal counsel; are fully informed of the terms and effect

of this Settlement Agreement; have agreed to this Settlement Agreement after

independent investigation and agree it was not arrived at through fraud, duress, or

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undue influence; and knowingly and voluntarily intend to be legally bound by this

Settlement Agreement.

(27) Venue. The Superior Court of California, located in the County of Sacramento, shall

hear any dispute between the Parties arising from this Settlement Agreement.

(28) Counterparts and Electronic Signatures. This Settlement Agreement may be

executed in counterparts. Electronic, facsimile or photocopied signatures shall be

considered as valid signatures.

(29) Release. In consideration of full payment of the civil penalty, and all other

undertakings above, CARB hereby releases EDCO Disposal Corporation and its

Affiliates and its principals, officers, receivers, trustees, successors and assignees,

subsidiary and parent corporations, from any claims CARB may have based on the

circumstances described in all paragraphs contained in the Case Background

above.

(30) Authority. The undersigned represents that he or she has full authority to enter into

this Settlement Agreement.

PENALTY BASIS

(31) Per Unit Penalty. The per unit or per vehicle penalty in this case is a maximum of

ten thousand dollars ($10,000.00 USD) per day under Health and Safety Code

section, for violations of the TB Regulation. (Cal. Code Regs., tit.13, § 2025.) The

penalty of $12,500.00 over an unspecified number of days of violation is for 10

noncompliant vehicles(s) with 1993 and older, 1994-1995, 1996-1999, 2000-2004,

2005-2006 model year engine(s) and a GVWR of greater than 14,000 pounds. The

per unit penalty in this case is approximately $1,250.00 per noncompliant day.

(32) Emissions. The provisions cited above do prohibit emissions above a specified

level. Without information on engine usage and emission rates, it is not practicable

to quantify the excess emissions. However, since CARB has alleged that the

vehicles(s) did not meet the regulatory requirements, all of the emissions from it

were excess and illegal.

(33) Aggravating and Mitigating Factors. The penalties in this matter were determined

in consideration of all relevant circumstances, including statutory factors as

described by CARB’s Enforcement Policy. CARB considered whether the violator

came into compliance quickly and cooperated with the investigation; the extent of

harm to public health, safety and welfare; nature and persistence of the violation,

including the magnitude of the excess emissions; compliance history; preventative

efforts taken; innovative nature and the magnitude of the effort required to

comply, and the accuracy, reproducibility, and repeatability of the available test

methods; efforts to attain, or provide for, compliance prior to violation; action

taken to mitigate the violation; financial burden to the violator; and voluntary

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disclosure. The penalties are set at levels sufficient to deter violations, to remove

any economic benefit or unfair advantage from noncompliance, to obtain swift

compliance, and the potential costs, risks, and uncertainty associated with

litigation. Penalties in future cases might be smaller or larger depending on the

unique circumstances of the case.

(34) Confidential Business Information. CARB may have based this penalty in part on

confidential business information provided by EDCO Disposal Corporation and its

Affiliates or confidential settlement communications.

(35) Effect of Settlement/Reservation of Rights. The following shall apply:

(a) This Settlement Agreement resolves the civil claims of CARB for the

violations alleged in this Settlement Agreement.

(b) CARB reserves, and this Settlement Agreement is without prejudice to, all

claims, rights, and remedies against EDCO Disposal Corporation and its

Affiliates with respect to all matters not expressly resolved in this Settlement

Agreement. Notwithstanding any other provision of the Settlement

Agreement, CARB reserves all claims, rights, and remedies, whether in law

or equity, against EDCO Disposal Corporation and its Affiliates with respect

to:

(i) Noncompliance with or enforcement of any provision of this Settlement

Agreement.

(ii) Facts that were not disclosed by EDCO Disposal Corporation and its

Affiliates to CARB.

(iii) Violation of the California Health and Safety Code and its implementing

regulations, or other State laws, regulations, or permit condition(s) not

expressly resolved in this Settlement Agreement.

(iv) Any imminent and substantial endangerment to the public health,

welfare, or the environment in California, whether related to the

violations addressed in this Settlement Agreement or otherwise.

(v) Any criminal liability.

(vi) Any claim(s) of any officer or agency of the United States or California,

other than CARB.

injunctive relief, civil penalties, or other appropriate relief relating to

enforcement of the Settlement Agreement, EDCO Disposal Corporation and

its Affiliates shall not assert, and may not maintain, any defense or claim

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based upon the principles of waiver, res judicata, collateral estoppel, issue

preclusion, claim preclusion, claim-splitting, or other defenses based upon

any contention that the claims raised by CARB in the subsequent proceeding

were or should have been brought in the instant case.

(d) This Settlement Agreement does not limit or affect the rights of EDCO

Disposal Corporation and its Affiliates or of CARB against any third parties

not covered by this Settlement Agreement, nor does it limit the rights of

third parties not covered by this Settlement Agreement against EDCO

Disposal Corporation and its Affiliates, except as otherwise provided by law.

This Settlement Agreement shall not be construed to create rights in, or

grant any cause of action to, any third party not covered by this Settlement

Agreement.

(e) This Settlement Agreement is not a permit, or a modification of any permit,

under any federal, State, or local laws or regulations. EDCO Disposal

Corporation and its Affiliates is responsible for achieving and maintaining

compliance with all applicable federal, State, and local laws, regulations, and

permits; EDCO Disposal Corporation and its Affiliates’ compliance with this

Settlement Agreement shall not be a defense to any action commenced

pursuant to any such laws, regulations, or permits. CARB does not, by its

execution of this Settlement Agreement, warrant or aver in any manner that

EDCO Disposal Corporation and its Affiliates’ compliance with any aspect of

this Settlement Agreement will result in compliance with any provisions of

federal, State, or local laws, regulations, or permits.

ACKNOWLEDGED AND ACCEPTED BY:

California Air Resources Board

Signature: /S/

Name: Steven S. Cliff, Ph.D.

Title: Executive Officer

Date: December 14, 2022

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EDCO Disposal Corporation and its Affiliates

Signature: /S/

Name: Steve South

Title: President

Date: December 5, 2022