LYON AND ASSOCIATES

01 OF 01

CONSENT DECREE

09-90-C010

CAA

MISC

19900604

19900604

CAD982470171

LYON AND ASSOCIATES

FAIR OAKS, CA

CIVS-89-0809 RAR-EM

09

CONSENT DECREE, USA VS. LYON AND ASSOCIATES, GEORGE E. KING CONSTRUCTION, AND FRED B. CURTIS, INC. Page 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

vs. LYON AND ASSOCIATES; GEORGE E. KING CONSTRUCTION; AND FRED B. CURTIS, INC.,

Defendants.

WHEREAS, Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), having filed a Complaint in the Federal District Court, Eastern District of California, on June 8, 1989 alleging violations of the National Emission Standard for Hazardous Air Pollutants for asbestos, 40 C.F.R. Sections 61.140 - 61.156 (hereinafter "Asbestos NESHAP"), and the Clean Air Act, 42 U.S.C. Sections 7401 - 7642 (hereinafter "the Act"), and requesting permanent injunctive relief and civil penalties; and ++EP++

Page 2

WHEREAS, Lyon & Associates, George E. King Construction, Inc., and Fred B. Curtis, Inc. (hereinafter collectively referred to as "Settling Defendants"), dispute and deny each and all claims made in the complaint; and

WHEREAS, Plaintiff and Settling Defendants have agreed that settlement of this action is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this action, avoiding protracted litigation costs and expenses; and

WHEREAS, Plaintiff and Settling Defendants have moved this Court to enter this Consent Decree, subject to the provisions of 28 C.F.R. Section 50.7; and

WHEREAS, the County of Sacramento has agreed to be bound by the terms of this Consent Decree and will initiate no new action on the matters dealt with herein;

THEREFORE, before the taking of any testimony, upon the pleadings, without adjudication of any issue of fact or law, and without any finding or admission of liability against or by the Settling Defendants, and upon consent of the parties to this Consent Decree, it is hereby Ordered, Adjudged, and Decreed as follows:

I. JURISDICTION AND VENUE

1. Defendant Lyon and Associates ("Lyon") is a California Corporation located at 2580 Fair Oaks Blvd., Sacramento, California. ++EP++

Page 3

2. Defendant George E. King Construction ("King") is a California Corporation located at 2580 Fair Oaks Blvd., Sacramento, California.

3. Defendant Fred B. Curtis, Inc. ("Curtis") is a California corporation located at 7475 14th Avenue, Sacramento, California 95820.

4. Lyon, King, and Curtis are each "Persons" within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), and are each the "Owner or Operator" of the "Facility" where the violations identified in this action took place, all within the meaning of 40 C.F.R. Sections 61.02 and 61.141 of the Asbestos NESHAP.

5. County of Sacramento shall mean the People of the State of California at the request of the County of Sacramento.

6. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sections 1331, 1345, and 1355. The Complaint states a claim upon which relief can be granted against the Defendants pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

7. The Court has personal jurisdiction over the Defendants and venue is proper in this Court pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b). The Defendants waive all objections to the Court's jurisdiction and venue.

II. DEFINITIONS AND PARTIES

8. "Settling Defendants" shall mean Lyon, King, and Curtis. ++EP++

Page 4

9. "Plaintiff" shall mean the United States of America and the United States Environmental Protection Agency.

10. Except as otherwise noted in this Consent Decree, the terms used in this Consent Decree that are defined in 42 U.S.C. Section 7412(a), 42 U.S.C. Section 7602, 40 C.F.R. Section 61.02, and 40 C.F.R. Section 61.141 shall have the meanings contained therein.

11. "Asbestos-containing material" or "ACM" means friable asbestos material as defined by 40 C.F.R. Section 61.141.

12. "Demolition or Renovation Operation" means all activity involved in a demolition or renovation operation covered under 40 C.F.R. Section 61.145.

13. "Suspect ACM" means material that has not yet been analyzed by an NIST or EPA Accredited Laboratory to determine whether it is ACM and includes both friable materials and non-friable materials which may reasonably be expected to become friable during the course of a Demolition or Renovation Operation.

14. An "NIST or EPA Accredited Laboratory" means a laboratory with current accreditation to conduct bulk sample analyses pursuant to EPA's Interim Asbestos Bulk Sample Analysis Quality Assurance Program, listed at 54 Fed. Reg. 8468-82 (Tuesday, February 28, 1989) commercial laboratories or obtained by contacting the EPA Regional Asbestos Coordinators noncommercial laboratories ; or a laboratory with current accreditation to conduct asbestos bulk sample analyses from the National Institutes of Science and Technology (NIST), pursuant to the National Voluntary Laboratory Accreditation Program (NVLAP). ++EP++

Page 5 III. APPLICABILITY

15. Each undersigned representative of a party to this Consent Decree certifies that he or she is fully authorized by the party which he or she represents to enter into the terms and conditions of this Consent Decree, and to execute and legally bind that party.

16. The provisions of this Consent Decree shall apply to and be binding upon the Defendants, upon their officers, directors, agents, servants, employees, successors, and assigns, and upon all persons, firms, and corporations who are, or will be acting on behalf of, in concert with, or in participation with the respective Defendants to this action. During the pendency of this Consent Decree, the Defendants shall give notice of this Consent Decree to any successors in interest prior to transfer of ownership and shall simultaneously verify to Plaintiff that such notice has been given.

17. The provisions of this Consent Decree shall apply respectively to any Renovation or Demolition Operations with respect to which a Defendant is an Owner or Operator.

18. Each Defendant shall include in each contract for renovation or demolition a provision requiring compliance with 40 C.F.R. Part 61, Subpart M in the performance of work under the contract.

IV. COMPLIANCE

19. Settling Defendants shall comply in all respects with the requirements of the Asbestos NESHAP and the Act. ++EP++

Page 6

20. Except as expressly provided herein, this Consent Decree in no way affects each Defendant's responsibility to comply with all state, federal, or local laws, ordinances, and regulations, and with any order of this or any other Court, including compliance with all applicable Asbestos NESHAP requirements and requirements of the Act, including any amendments thereto.

ASBESTOS MANAGEMENT PROGRAM

21. The purpose of this section of the Consent Decree is to require each Defendant to establish a method of doing business, including specified procedures and a specific program of operation, that is designed to prevent violations of the Act, the Asbestos NESHAP, and the requirements of this Consent Decree, including all appendices and any amendments thereto.

Part A. Inspection, Sampling, and Analysis

22. Prior to the commencement of any Demolition or Renovation Operation with respect to which a Defendant is an Owner or Operator, that Defendant shall ensure that a diligent survey and inspection of the relevant Facility for the presence of ACM and Suspect ACM has been conducted in accordance with the Asbestos Bulk Sampling and Analysis Protocol, Appendix A, (hereinafter "Sampling Protocol"). Such inspection shall be conducted by or behalf of Defendant by a person trained in accordance with the requirements of Paragraph 28, certified, and, if required, licensed to conduct such inspections (hereinafter "Asbestos Inspector"). Where appropriate, that defendant may adopt a prior Asbestos Inspector report conducted in conformance with the Sampling Protocol, Appendix A. ++EP++

Page 7

23. If any Suspect ACM is discovered at a Demolition or Renovation Operation covered by this Consent Decree, a Defendant may elect to treat this material as ACM without sampling and analysis. However, before a Defendant may treat any Suspect ACM as non-ACM, that Defendant shall collect and analyze samples of all Suspect ACM in accordance with the Sampling Protocol, Appendix A. That Defendant shall not begin any activity which might disturb or preclude access to any ACM or Suspect ACM at the Facility, including any activity which might disturb or preclude access to any ACM or Suspect ACM in adjoining structures or buildings not directly involved in the Demolition or Renovation Operation, until:

a. the results of laboratory analyses conducted by an NIST or EPA Accredited Laboratory are available establishing that the Suspect ACM is, in fact, non-ACM; or

b. all ACM has been completely removed from the Facility by a person trained in accordance with Paragraph 28, certified, and, if required, licensed in asbestos removal procedures (hereinafter a "qualified person").

24. If any ACM or Suspect ACM is discovered at a Facility owned or operated by a Defendant after a Demolition or Renovation Operation is already underway, that Defendant shall immediately cease all work which could disturb the ACM or Suspect ACM. The Defendant shall not resume any activities which might disturb or preclude access to the ACM or Suspect ACM for removal until the material has been sampled, analyzed and, if found to be ACM, removed by qualified persons, as defined in paragraph 23(b). Nothing in this Paragraph shall excuse a Defendant from the obligation provided in paragraphs 22 and 23 above to conduct a diligent survey for ACM and Suspect ACM before commencing any Demolition or Renovation Operation. ++EP++

Page 8

25. Any authorized representative of EPA (including a designated contractor) may, upon presentation of credentials to a responsible official, and without notice, enter upon the premises of a Defendant or upon the site of any Demolition or Renovation Operation with which a Defendant is involved to determine compliance with the requirements of the Act, the Asbestos NESHAP, and the provisions of this Consent Decree. In making such determination, EPA and its representative make take such samples and photographs and inspect and copy of such records as EPA may deem necessary. EPA and its representatives shall provide the Defendant with copies of all sampling data, photographs, and inspection reports that result from the inspection. This paragraph is in addition to, and not in limitation of, EPA's authority to investigate, inspect, or enter premises pursuant to any laws, permits, or regulations.

Part B: Notification Program

26. Each Defendant shall give the following notice concerning any Demolition or Renovation Operation covered under 40 C.F.R. Section 61.145 with respect to which it is an Owner or Operator.

a. Such Defendant will notify EPA and the corresponding or relevant State or local environmental agency of the Demolition or Renovation Activity. Such notification shall include the information specified in 40 C.F.R. Section 61.146(c) and shall also include:

(1) The name and position of the person responsible for supervising all work involving ACM and Suspect ACM. ++EP++

Page 9

(2) The name, address, telephone number, and contact person of the firm(s) which will transport any ACM waste from the site.

(3) A description of the procedures and equipment to be used to prevent visible emissions of ACM and to decontaminate workers.

(4) A description of the location and amount of ACM to be removed from the Facility to undergo renovation or demolition.

(5) The name of the person who determined whether ACM was located at the site and the basis on which such determination was made.

b. Each notice shall be submitted prior to the commencement of the Renovation or Demolition Operation as provided in 40 C.F.R. Section 61.146, and correction to any information contained in an initial notice shall be submitted within five (5) days after the Defendant becomes aware of a change of circumstances rendering the initial notice incorrect. All such notices and amended notices to EPA shall be sent via certified mail to:

U.S. Environmental Protection Agency, Region IX A-3-3 215 Fremont Street San Francisco, California 94105

27. The notification provisions of this Consent Decree are in addition to, and not in substitution or limitation of, the notification provisions of 40 C.F.R. Section 61.146, and all other federal, state, or local laws, ordinances, and regulations.

Part C. Required Asbestos Training

28. A Defendant shall not engage any person in the Demolition or Renovation of any Facility containing ACM, or to inspect a Facility for the presence of ACM or Suspect ACM, unless that person has successfully completed an EPA-approved, 3-day course of asbestos training, as hereinafter specified:

a. Inspector Training: No Defendant shall engage any person to inspect a Facility for ACM or Suspect ACM who has not successfully completed an EPA-approved 3-day inspector course of study. ++EP++

Page 10

b. Asbestos Abatement Worker Training: No Defendant shall engage any person to perform maintenance, renovation, asbestos stripping, removal, handling, clean-up, air monitoring, transportation, or disposal activities, including maintenance personnel who can reasonably be expected to come into contact with ACM during their normal duties, unless that person has successfully completed a 4-day EPA-approved training course for Asbestos Abatement Workers. The course material shall include, but not be limited to: (1) legal liabilities; (2) work practice procedures; (3) the role of inspectors, hygienists, and other asbestos experts; (4) federal, state, and local laws and regulations governing asbestos removal, notification, handling, transport, and disposal; (5) worker and occupant safety issues; (6) clean-up and disposal of ACM; (7) personal protective equipment; (8) safety considerations; and (9) health effects of asbestos exposure.

c. No one engaged by a Defendant shall be deemed to have "successfully completed" the training required by this Paragraph unless and until he or she has passed the test given by the EPA-approved training provider for the relevant course of study or training program. ++EP++

Page 11

29. EPA-approved training courses are those given by the providers listed at 54 Fed. Reg. 8436-8482 (February 28, 1989) or in such other list as may hereafter be published by EPA.

30. The successful completion by any person of the training required by this Consent Decree shall not absolve a Defendant of liability for any violation of this Consent Decree, the Asbestos NESHAP, or the Act. Defendants shall maintain records which demonstrate that all training required by this Consent Decree has been completed.

31. Within thirty (30) days of entry of the Consent Decree, Defendants shall inform all persons bound by this Consent Decree of the requirements of this Consent Decree, of the Clean Air Act, and of 40 C.F.R. Part 61, Subpart M, and of the health effects caused by exposure to asbestos.

32. Within thirty (30) days of entry of the Consent Decree, Defendants shall give those employees involved in maintenance, demolition, or renovation work a description of what a worker must do if that worker discovers ACM or Suspect ACM while working at a Facility, including a description of safety measures that worker can take in the event of site or personal contamination.

33. Within thirty (30) days of entry of the Consent Decree, Defendants' employees must receive clear instructions that they are not to handle, move, or otherwise disturb any ACM or Suspect ACM unless they are specially trained, licensed, and authorized to do so. New employees shall be given such instruction within thirty (30) days of being hired. ++EP++

Page 12 V. PENALTIES A. Civil Penalties

34. Lyon, King, and Curtis agree to pay jointly to the United States and the Sacramento Metropolitan Air Quality Management District a total civil penalty of SIXTY-FIVE THOUSAND DOLLARS ($65,000) in full and complete satisfaction of all claims that are raised or could have been raised by the plaintiffs in the Complaint filed in this action with respect to violations of the asbestos NESHAP regulations under the Clean Air Act during the renovation of the Lyon facility as described in that complaint. Payment shall be made by cashier's or certified check, with payment in the sum of THIRTY-TWO THOUSAND FIVE HUNDRED DOLLARS ($32,500) to "Treasurer, United States of America" and payment in the sum of THIRTY-TWO THOUSAND FIVE HUNDRED DOLLARS ($32,500) to "Sacramento Metropolitan Air Quality Management District," both said payments to be tendered within ten (10) days after entry of this Consent Decree to respectively:

United States Attorney Eastern District of California 650 Capitol Mall Sacramento, California 95814

and

Sacramento Metropolitan Air Quality Management District 8475 Jackson Road Suite 215 Sacramento, California 95826 Attention: Eric Munz

Within three (3) days of payment of the civil penalty by Defendants, the Defendants shall notify the Department of Justice and Sacramento County in writing that payment has been made, and shall include with said written notice a photocopy of the certified or cashier's check. ++EP++

Page 13

Notice to the Department of Justice shall be sent to:

Gerald F. George U.S. Department of Justice 301 Howard Street, Suite 870 San Francisco, California 94105

Notice to the County of Sacramento shall be sent to:

Roslyn W. Sylvester Sacramento County Counsel Office 700 H. Street Suite 2650 Sacramento, California 95814

B. Stipulated Penalties

35. If a Defendant fails to comply with any of the terms of this Consent Decree, that Defendant shall be liable for Stipulated Penalties as set forth below:

a. Failure to comply with any of the training requirements in Paragraphs 28 - 33, $1000 per person;

b. Failure to comply with any record keeping, notice or submission requirement:

First Violation $5,000

Second Violation $10,000 Third Violation $15,000

c. Failure to comply with any of the requirements in 40 C.F.R. Part 61: $15,000 per day of violation.

d. Failure to comply with any provision of the Consent Decree not covered in subparagraphs a, b, or c above, $10,000 per day of violation. ++EP++

Page 14

e. Conduct that is a failure to comply both with subparagraphs b and c shall be subject to the stipulated penalty provided under subparagraph b only.

Such stipulated penalties shall be in addition to any other remedies or sanctions available to the United States by reason of a Defendant's failure to comply with the requirements of the Consent Decree.

36. Any Stipulated Penalty accruing within a calendar month shall be delivered by the relevant Defendant to the United States Attorneys' office, together with a statement describing the violations for which the penalty was imposed. The check and statement shall be paid without demand, by the FIFTEENTH (15th) day of the month following the month in which the violation(s) occurred, and a copy of the check and statement shall be simultaneously sent to EPA, Region IX, the U.S. Attorney's Office, and to the U.S. Department of Justice. Stipulated penalty payments under this Consent Decree are not tax deductible.

37. If a Defendant believes it is not liable for the demanded stipulated penalties, it may petition the Court, within FIFTEEN (15) days of its receipt of the demand from the United States, to hear evidence on whether Defendant is liable for the stipulated penalties demanded by plaintiff. Such defendant shall be liable for attorneys' fees and costs incurred by the United States as a result of any such petition in which Defendant does not prevail.

38. Interest shall accrue on the unpaid balance of any penalties due, in accordance with 28 U.S.C. Section 1961, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last 52-week U.S. Treasury bills settled immediately prior to the time of the preceding payment in the case of Civil Penalties, and at the time payment becomes due in the case of Stipulated Penalties, and shall be included in each subsequent payment of penalties which becomes due under the terms of this Consent Decree. ++EP++

Page 15

In the case of Civil Penalties, interest shall be computed beginning THIRTY (30) days after final entry of this Consent Decree. Defendants shall submit to the U.S. Attorneys' Office and EPA, no later than FIFTEEN (15) days of the payment date, a statement of interest believed to be due and owing for the upcoming payment. The U.S. Attorneys' Office will advise Defendants in the event the amount of the interest calculated by Defendants requires adjustment.

39. If a Defendant:

a. fails to make any payment of any penalties due and payable under this Consent Decree by the required date;

b. files a voluntary petition in bankruptcy under the Bankruptcy Code of the United States, or is adjudicated a bankrupt under such Code;

c. is the subject of a petition filed in federal or state court for the appointment of a trustee or receiver in bankruptcy or insolvency;

d. makes a general assignment for the benefit of creditors,

then, at the option of the United States, the full balance of all outstanding penalties, civil or stipulated, together with all interest accrued at the rate specified in Paragraph 38 of this Consent Decree, shall become immediately due and payable. ++EP++

Page 16

That Defendant shall also be liable for attorneys' fees and costs incurred by the United States as a result of the implementation of this acceleration provision. Upon the occurrence of any of the events or conditions described in this Paragraph, the Defendant shall give immediate notice to the United States Attorneys' Office and the EPA.

40. Upon final entry of this Consent Decree, the United States shall be deemed a judgment creditor for the purposes of collecting any penalties due under this Consent Decree. Civil penalty payments under this Consent Decree are not tax deductible.

VI. NOTICES, RECORDS, AND SUBMISSIONS

41. All notices, records, and submissions required in this Consent Decree, as applicable and except as expressly provided herein, shall be certified and in writing. Except as expressly provided herein, Defendants shall keep all records required to be maintained by this Consent Decree for the duration of the Consent Decree, and shall maintain the same at its principal place of business, currently located at the addresses noted below in subparagraphs c or d (as applicable), or on site, as appropriate. Defendants shall make all records required by this Consent Decree available to EPA upon request. All notices and submissions required to be made by a Defendant to EPA or the U.S. Attorneys' Office shall indicate the cause of action number for this case, and shall be postmarked (using first class certified or registered mail, postage prepaid) or hand delivered by the applicable due date to the following addresses as applicable. ++EP++

Page 17

a. For the United States Attorney, to:

DAVID F. LEVI United States Attorney Eastern District of California 650 Capitol Mall Sacramento, California 95814

b. For EPA, to:

Director, Air Management Division United States Environmental Protection Agency, Region IX 215 Fremont Street San Francisco, California 94105 Attention: A-3-3

c. Plaintiff will send all correspondence for

Curtis to:

Reed Sato, Esq. Downey, Brand, Seymour & Rohwer 555 Capitol Mall, 10th Floor Sacramento, California 95814-4686

d. Plaintiff will send all correspondence for

Lyon and King to:

William J. Coyne, Esq. Diepenbrock, Wulff, Plant & Hannegan 300 Capitol Mall, Suite 1700 Sacramento, CA 95812

VII. GENERAL PROVISIONS

42. Nothing contained herein shall be construed to prevent or limit the rights of the Plaintiff to obtain any other remedy, sanction, or relief which may be available to it by virtue of the Defendants' failure to comply with this Consent Decree, the Clean Air Act, or the Asbestos NESHAP. ++EP++

Page 18

The Settling Defendants have entered into this Consent Decree without prejudice to the rights of Lyon, King, and Curtis as between themselves. Lyon, King, and Curtis each retain the right to assert any claims or defenses against each of the others arising out of the subject matter of this Action or this Consent Decree.

The United States of America and the County of Sacramento agree that the payment of the aforesaid civil penalties and the execution of this Consent Decree are done entirely for the purpose of compromising settlement of the disputed claims. Neither the payment of said consideration, nor the compromise and settlement of said disputes, not anything contained herein, shall be construed to be an admission by the parties, or any of them, of any liability to any other party, or to any other person or entity, or an admission that any party has suffered or sustained any damages for injuries of any kind whatsoever, and the parties expressly deny liability therefore.

43. This Consent Decree shall terminate one (1) year from the date of its entry, provided that a Defendant has not been in violation of the terms of the Decree. The United States shall have the right to seek an extension of this period as to a Settling Defendant only in the event of any violation of the Consent Decree by that Settling Defendant. During the term of the Consent Decree, the Court shall retain jurisdiction over this matter to modify and enforce the provisions of this Consent Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Consent Decree. ++EP++

Page 19

44. Any modification of this Consent Decree must be in writing and approved by the Court.

45. Each party consents to entry of this Consent Decree, subject to the public notice and comment provisions of 28 C.F.R. Section 50.7.

46. Each party shall bear its own costs and fees.

We hereby consent to entry of this Consent Decree without further notice, subject to the provisions of 28 C.F.R. Section 50.7. FOR THE UNITED STATES OF AMERICA,

Plaintiff,

RICHARD B. STEWART

/s/ ILLEGIBLE SIGNATURE for

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

DAVID F. LEVI

/s/ David F. Levi

United States Attorney

Eastern District of California

650 Capitol Mall

Sacramento, California 95814

JAMES M. STROCK

/s/ James M. Strock

Assistant Administrator for

Enforcement Compliance Monitoring

U.S. Environmental Protection

Agency

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

Page 20

DANIEL W. MCGOVERN

/s/ Daniel W. McGovern

Regional Administrator

U.S. Environmental Protection

Agency, Region IX

215 Fremont Street

San Francisco, California 94105

GERALD F. GEORGE

/s/ Gerald F. George by RDB

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

301 Howard Street, Suite 870

San Francisco, California 94105

FOR LYON AND ASSOCIATES

AND GEORGE KING CONSTRUCTION

Defendants,

WILLIAM J. COYNE

/s/ William J. Coyne

Diepenbrock, Wulff, Plant &

Hannegan

300 Capitol Mall, Suite 1700

Sacramento, CA 95812

FOR FRED B. CURTIS, INC.

Defendant,

REED SATO

/s/ Reed Sato

Downey, Brand, Seymour & Rohwer

555 Capitol Mall, 10th Floor

Sacramento, California 95814 ++EP++

Page 21

Approved and judgment entered by agreement of the

parties in Sacramento, California this 4 day of June, 1990.

/s/ Philip C. Wilkins

UNITED STATES DISTRICT JUDGE

Eastern District of California

The County of Sacramento has agreed to be bound by the terms of this Consent Decree and will initiate no new action on the matters dealt with herein. FOR THE COUNTY OF SACRAMENTO,

ROSLYN SYLVESTER

/s/ Roslyn Sylvester

Deputy County Counsel

County of Sacramento

700 H Street

Suite 2650

Sacramento, California 95814 ++EP++

APP A-1 ASBESTOS BULK SAMPLING AND ANALYSIS PROTOCOL FOR FRIABLE AND NON-FRIABLE SUSPECT ACM

A. GENERAL

All inspections performed pursuant to this protocol shall include a review of original blueprints and specifications of the facility when available and visual inspections of all areas of the facility with which any person involved in the Demolition or Renovation Operation may come into contact, or which may contain asbestos and could be affected directly or indirectly by the Operation. B. SAMPLING

1. Asbestos bulk samples shall be collected only by a person who has completed the Asbestos Inspection training specified in Paragraph 28(a) of the Consent Decree.

2. All asbestos bulk samples shall be collected in a random manner, using the grid system described in the EPA "Pink Book," and shall be made up of a core which has fully penetrated the Suspect ACM.

3. If the homogeneous area of the Suspect ACM is less than 100 Linear or 1000 square feet, at least three (3) bulk samples shall be collected from each homogeneous area.

4. If the homogeneous area of Suspect ACM is at least 1000 linear or 1000 square feet but less than 5000 square feet, at least five (5) bulk samples shall be collected from each homogeneous area.

5. If the homogeneous area of suspect ACM is at least 5000 linear or 5000 square feet, at least seven (7) bulk samples must be collected from each homogeneous area. ++EP++

APP A-2

C. LABORATORY ANALYSIS

Samples shall be analyzed only by an EPA-accredited laboratory listed in 54 Fed. Reg. 8468-82 (Tuesday, February 28, 1989).

D. SAMPLE RESULTS

1. Defendant may consider a homogenous area to be ACM without analyzing any remaining samples if one bulk sample analysis shows more than 1% asbestos.

2. If all samples required to be collected are found by an EPA-accredited laboratory not to contain more than 1% asbestos, then the homogenous area may be treated as non-ACM.

E. SAMPLE DOCUMENTATION

1. Each sample collected shall be immediately placed in a sealed leak-tight container; numbered both sequentially and with an identification number unique to the sampling area and the facility; dated; and identified by the initials of the inspector taking the sample.

2. The location from which each sample is taken shall be concurrently noted by sample number on a graphic depiction of the facility containing the information specified in Subparagraph E(3)(b) below. If more than one person is inspecting the facility, each inspector shall use a separate graphic depiction and date and initial the same.

3. The following sample records shall be made and maintained on file by the Defendant:

(a) an inspection report with the date of the inspection, signed by the person making the inspection; ++EP++

APP A-3

(b) an inventory and graphic depiction of the Demolition or Renovation Operation, showing the locations of the homogenous areas where samples are collected, exact location where each bulk sample is collected, dates when samples are collected, homogenous areas where friable samples are collected, homogeneous areas where friable Suspect ACM is assumed to be ACM and has therefore not been sampled, homogeneous areas where nonfriable Suspect ACM is assumed to be ACM and has therefore not been sampled, and areas where samples taken were determined by an EPA-Accredited Laboratory to be ACM;

(c) a description of the manner used to determine sampling location, the name and signature of each inspector who collected the samples, and evidence of his/her qualifications;

(d) a list of the type of materials which make up each homogenous area (e.g., surfacing, thermal system insulation);

(e) chain of custody forms identifying each sample taken; and

(f) laboratory reports for each asbestos bulk sample of ACM and Suspect ACM taken at the Demolition or Renovation Operation. ++EP++

WARD COURT DEVELOPMENT COMPANY

01 OF 01

CONSENT DECREE

09-90-C003

CAA

MISC

19891127

HID982514580

WARD COURT

HONOLULU, HI

19891127

89-00828-DAE

09

CONSENT DECREE US V. WARD COURT DEVELOPMENT COMPANY

Page 1 UNITED STATES DISTRICT COURT DISTRICT OF HAWAII

UNITED STATES OF AMERICA,

Plaintiff,

vs. WARD COURT DEVELOPMENT COMPANY,

Defendant.

WHEREAS, Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), having filed a Complaint in this case in the Federal District Court, District of Hawaii concurrently with the lodging of this Consent Decree, alleging violations of the National Emission Standard for Hazardous Air Pollutants for asbestos, 40 C.F.R. Sections 61.140 -- 61.156 (hereinafter "Asbestos NESHAP"), and the Clean Air Act, 42 U.S.C. Sections 7401 -- 7642 (hereinafter "the Act"), and requesting permanent injunctive relief and civil penalties; and ++EP++

Page 2

WHEREAS, Plaintiff and Defendant have agreed that settlement of this action is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this action, avoiding protracted litigation costs and expenses; and

WHEREAS, Plaintiff and Defendant have moved this Court to enter this Consent Decree, subject to the provisions of 28 C.F.R. Section 50.7;

THEREFORE, before the taking of any testimony, upon the pleadings, without adjudication of any issue of fact or law, and without any finding or admission of liability against or by the Defendant, and upon consent of the parties to this Consent Decree, it is hereby Ordered, Adjudged, and Decreed as follows:

I. JURISDICTION AND VENUE

1. Defendant Ward Court Development Company ("Ward") is a general partnership located at 1360 South Beretania Street, 2nd floor, Honolulu, Hawaii 96814. Ward is a "Person" within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), and is the "Owner or Operator" of the "Facility" where the violations identified in this action took place, all within the meaning of 40 C.F.R. Sections 61.02 and 61.141 of the Asbestos NESHAP.

2. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sections 1331, 1345, and 1355. The Complaint states a claim upon which relief can be granted against the Defendant pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b). ++EP++

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3. The Court has personal jurisdiction over the Defendant and venue is proper in this Court pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b). The Defendant waives all objections to the Court's jurisdiction and venue.

II. DEFINITIONS AND PARTIES

4. "Defendant" shall mean Ward Court Development Company.

5. "Plaintiff" shall mean the United States of America and the United States Environmental Protection Agency.

6. Except as otherwise noted in this Consent Decree, the terms used in this Consent Decree that are defined in 42 U.S.C. Section 7412(a), 42 U.S.C. Section 7602, 40 C.F.R. Section 61.02, and 40 C.F.R. Section 61.141, as amended, shall have the meanings contained therein.

7. "ACM" means friable asbestos-containing material, and includes non-friable asbestos-containing material which may reasonably be expected to become friable during the course of a Demolition or Renovation Operation, and asbestos containing waste material.

8. "Demolition or Renovation Operation" means all activity involved in a demolition or renovation operation including disposal of waste material.

9. "Suspect ACM" means material that has not yet been analyzed by an NIST or EPA Accredited Laboratory to determine whether it is ACM and includes both friable materials and non-friable materials which may reasonably be expected to become friable during the course of a Demolition or Renovation Operation. ++EP++

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10. An "NIST or EPA Accredited Laboratory" means a laboratory with current accreditation to conduct bulk sample analyses pursuant to EPA's Interim Asbestos Bulk Sample Analysis Quality Assurance Program, listed at 54 Fed. Reg. 8468-82 (Tuesday, February 28, 1989) commercial laboratories or obtained by contacting the EPA Regional Asbestos Coordinators noncommercial laboratories ; or a laboratory with current accreditation to conduct asbestos bulk sample analyses from the National Institutes of Science and Technology (NIST), pursuant to the National Voluntary Laboratory Accreditation Program (NVLAP).

11. "Facility" means the structures located on the leasehold properties at 320 Ward Avenue, 250 Ward Avenue, and 350 Ward Avenue, Honolulu, Hawaii.

III. APPLICABILITY

12. Each undersigned representative of a party to this Consent Decree certifies that he or she is fully authorized by the party which he or she represents to enter into the terms and conditions of this Consent Decree, and to execute and legally bind that property.

13. The provisions of this Consent Decree shall apply to and be binding upon the Defendant, upon its officers, directors, agents, servants, employees, successors, and assigns, and upon all persons, firms, and corporations who are, or will be acting on behalf of, in concert with, or in participation with the Defendant to this action. ++EP++

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The Defendant shall give notice of this Consent Decree to any successors in interest prior to transfer of ownership and shall simultaneously verify to Plaintiff that such notice has been given.

14. The provisions of this Consent Decree shall apply to all Renovations or Demolitions Operations with respect to which the Defendant is an Owner or Operator.

15. The Defendant shall include compliance with the terms of this Consent Decree as a condition in any and all contracts for demolition or renovation to which it is a party.

IV. COMPLIANCE

16. Defendant shall hereafter comply in all respects with the requirements of the Asbestos NESHAP and the Act.

17. This Consent Decree in no way affects the Defendant's responsibility to comply with all state, federal, or local laws, ordinances, and regulations, and with any order of this or any other Court, including compliance with all applicable Asbestos NESHAP requirements and requirements of the Act, including any amendments thereto.

ASBESTOS MANAGEMENT PROGRAM

18. The purpose of this Section of the Consent Decree is to require the Defendant to establish a method of doing business, including specified procedures and a specific program of operation, that is designed to prevent violations of the Act, the Asbestos NESHAP, and the requirements of this Consent Decree, including all appendices and any amendments thereto. ++EP++

Page 6 Part A. Inspection, Sampling, and Analysis

19. Prior to the commencement of any Demolition or Renovation Operation of the Facility with respect to which the Defendant is an Owner or Operator, the Defendant shall ensure that a diligent and complete survey and inspection of the Facility for the presence of ACM and Suspect ACM has been conducted in accordance with the Asbestos Bulk Sampling and Analysis Protocol, Appendix A, (hereinafter "Sampling Protocol"). Such inspection shall be conducted by a person trained in accordance with the requirements of Paragraph 25, certified, and, if required, licensed to conduct such inspections (hereinafter "Asbestos Inspector"). Where appropriate, defendant may adopt a prior Asbestos Inspector report conducted in conformance with the Sampling Protocol, Appendix A.

20. If any Suspect ACM is discovered at a Demolition or Renovation Operation at the Facility covered by this Consent Decree, the Defendant may elect to treat this material as ACM without sampling and analysis. However, before the Defendant may treat any Suspect ACM as non-ACM, the Defendant shall collect and analyze samples of all Suspect ACM in accordance with the Sampling Protocol, Appendix A. The Defendant shall not begin any activity which might disturb or preclude access to any ACM or Suspect ACM at the Facility, including any activity which might disturb or preclude access to any ACM or Suspect ACM in adjoining structures or buildings not directly involved in the Demolition or Renovation Operation, until:

a. the results of laboratory analyses conducted by an NIST or EPA Accredited Laboratory are available establishing that the Suspect ACM is, in fact, non-ACM; ++EP++

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or

b. all ACM has been completely removed from the Facility by a person trained in accordance with Paragraph 26, certified, and, if required, licensed in asbestos removal procedures (hereinafter "Asbestos Abatement Worker").

21. If any ACM or Suspect ACM is discovered at a Facility Owned or Operated by the Defendant after a Demolition or Renovation Operation is already underway, the Defendant shall immediately cease all work which could disturb the ACM or Suspect ACM. The Defendant shall not resume any activities which might disturb or preclude access to the ACM or Suspect ACM for removal until the material has been sampled, analyzed and, if found to be ACM, removed by an Asbestos Abatement Worker. Nothing in this Paragraph shall excuse the Defendant from the obligation provided in paragraphs 19 and 20 above to conduct a diligent and complete survey for ACM and Suspect ACM before commencing any Demolition or Renovation Operation.

22. In the event a Demolition is ordered by a state or local governmental agency because the Facility has become structurally unsound and in danger of imminent collapse, the Defendant shall comply with the asbestos management requirements specified in the Asbestos NESHAP at 40 C.F.R. Sections 61.147(d) through (g), 61.152, and 61.156.

23. Any authorized representative of EPA (including a designated contractor) may, upon presentation of credentials to a responsible official, and without notice, enter upon the premises of the Defendant or upon the site of any Demolition or Renovation Operation with which the Defendant is involved to determine compliance with the requirements of the Act, the Asbestos NESHAP, and the provisions of this Consent Decree. ++EP++

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In making such determination, EPA and its representative make take such samples and photographs and inspect and copy of such records as EPA may deem necessary. This paragraph is in addition to, and not in limitation of, EPA's authority to investigate, inspect, or enter premises pursuant to any laws, permits, or regulations.

Part B: Notification Program

24. The Defendant shall give notice concerning any Demolition or Renovation Operation at the Facility with respect to which he or she is an Owner or Operator.

a. The Defendant will notify EPA and the corresponding or relevant State or local environmental agency of the Demolition or Renovation Activity. Such notification shall include the information specified in 40 C.F.R. Section 61.146(c) and shall also include:

(1) The name and position of the person responsible for supervising all work involving ACM and Suspect ACM.

(2) The name, address, telephone number, and contact person of the firm(s) which will transport any ACM waste from the site.

(3) A description of the procedures and equipment to be used to prevent visible emissions of ACM and to decontaminate workers.

(4) A description of the location and amount of ACM (friable and nonfriable) to be removed from the Facility to undergo renovation or demolition.

(5) The name of the person who determined whether ACM was located at the site and the basis on which such determination was made.

b. Each notice shall be submitted at least twenty (20) days prior to the commencement of the Renovation or Demolition Operation, and correction to any information contained in an initial notice shall be submitted within five (5) days after the Defendant becomes aware of a change of circumstances rendering the initial notice incorrect. ++EP++

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All such notices and amended notices to EPA shall be sent via certified mail to:

U.S. Environmental Protection

Agency, Region IX A-3-3

215 Fremont Street

San Francisco, California 94105

25. The notification provisions of this Consent Decree are in addition to, and not in substitution or limitation of, the notification provisions of 40 C.F.R. Section 61.146, and all other federal, state, or local laws, ordinances, and regulations.

Part C. Required Asbestos Training

26. The Defendant shall not engage any person in the Demolition or Renovation of the Facility containing ACM, or to inspect the Facility for the presence of ACM or Suspect ACM, unless that person has successfully completed an EPA-approved, 3-day course of asbestos training, as hereinafter specified:

a. Inspector Training: Defendant shall not engage any person to inspect the Facility for ACM or Suspect ACM who has not successfully completed an EPA-approved 3-day inspector course of study. The course material shall include, but not be limited to: (1) federal, state, and local laws and regulations governing asbestos removal, notification, handling, transport, and disposal requirements; (2) practices and procedures for detection and sampling of asbestos, control of asbestos fiber releases, worker protection, equipment decontamination, and (3) health effects of asbestos exposure. ++EP++

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b. Asbestos Abatement Worker Training: The Defendant shall not engage any person to perform maintenance, renovation, asbestos stripping, removal, handling, clean-up, air monitoring, transportation, or disposal activities regarding the facility, including maintenance personnel who can reasonably be expected to come into contact with asbestos during their normal duties, unless that person has successfully completed a 4-day EPA-approved training course for Asbestos Abatement Workers. The course material shall include, but not be limited to: (1) legal liabilities; (2) work practice procedures; (3) the role of inspectors, hygienists, and other asbestos experts; (4) federal, state, and local laws and regulations governing asbestos removal, notification, handling, transport, and disposal; (5) worker and occupant safety issues; (6) clean-up and disposal of ACM; (7) personal protective equipment; (8) safety considerations; and (9) health effects of asbestos exposure. *c. No one engaged by the Defendant shall be deemed to have "successfully completed" the training required by this Paragraph unless and until he or she has passed the test given by the EPA-approved training provider for the relevant course of study or training program.

27. EPA-approved training courses are those given by the providers listed at 54 Fed. Reg. 8436-8482 (February 28, 1989) or in such other list as may hereinafter be published by EPA. ++EP++

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28. The successful completion by any person of the training required by this Consent Decree shall not absolve Defendant of liability for any violation of this Consent Decree, the Asbestos NESHAP, or the Act. The Defendant shall maintain records which demonstrate that all training required by this Consent Decree has been completed.

29. Within thirty (30) days of entry of the Consent Decree, the Defendant shall inform all persons bound by this Consent Decree of the requirements of this Consent Decree, of the Clean Air Act, and of 40 C.F.R. Part 61, Subpart M.

30. Within thirty (30) days of entry of the Consent Decree, the Defendant shall give its employees copies of the documents attached hereto as Appendix B.

31. Within thirty (30) days of entry of the Consent Decree, Defendant's employees must receive clear instructions that they are not to handle, move, or otherwise disturb any ACM or Suspect ACM at the Facility unless they are specially trained, licensed, and authorized to do so. New employees shall be given such instruction within thirty (30) days of being hired.

V. PENALTIES

A. Civil Penalties

32. Defendant shall pay a total civil penalty payment of FORTY THOUSAND DOLLARS ($40,000) in four (4) payments, by cashier's or certified check payable to "Treasurer, United States of America" and sent by registered mail to the address below: ++EP++

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United States Attorney

District of Hawaii

Room C-242, U.S. Courthouse

300 Ala Moana Blvd., Box 50183

Honolulu, Hawaii 96850

(Attn: THEODORE G. MEEKER)

Payment shall be made by the Defendant according to the following schedule:

a. TEN THOUSAND DOLLARS ($10,000) shall be paid by certified or cashier's check within ten (10) days of notification of entry of a Consent Decree by the Court in this action;

b. Three (3) equal payments of TEN THOUSAND DOLLARS ($10,000) shall be due and payable at three (3) month intervals measured from the date of the initial payment discussed in subparagraph (a) above;

Within three (3) days of payment of the civil penalty by Defendant, the Defendant shall notify EPA and the Department of Justice in writing that payment has been made, and shall include with said written notice a photocopy of the certified or cashier's check. Notice to EPA that payment has been made shall be sent to:

George Hays

EPA, Region IX

215 Fremont, 5th Floor

San Francisco, California 94105 Notice to the Department of Justice shall be sent to:

Gerald F. George

U.S. Department of Justice

100 Van Ness Avenue, 22nd Floor

San Francisco, California 94102

Upon final entry of this Consent Decree, the United States shall be deemed a judgment creditor for purposes of enforcement of this Consent Decree. ++EP++

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Civil penalty payments under this Consent Decree are not tax deductible.

B. Stipulated Penalties

33. If the Defendant fails to comply with any of the terms of this Consent Decree, the Defendant shall be liable for Stipulated Penalties as set forth below:

a. Failure to comply with any of the training requirements in Paragraphs 25 -- 30, $1000 per person;

b. Failure to comply with any record keeping,

notice, or submission requirement:

First Violation $5,000 Second Violation $10,000 Third Violation $12,500

c. Failure to comply with any of the requirements in 40 C.F.R. Part 61: $25,000 per day of violation.

d. Failure to comply with any provision of the Consent Decree not covered in subparagraphs a, b, or c above, $10,000 per day of violation.

Such stipulated penalties shall be in addition to any other remedies or sanctions available to the United States by reason of Defendant's failure to comply with the requirements of the Consent Decree.

34. Any Stipulated Penalty accruing within a calendar month shall be delivered by Defendant to the United States Attorneys' office, together with a statement describing the violations for which the penalty was imposed. The check and statement shall be paid without demand, by the FIFTEENTH (15th) day of the month following the month in which the violation(s) occurred, and a copy of the check and statement shall be simultaneously sent to EPA, Region IX, the U.S. Attorney's Office, and to the U.S. Department of Justice. ++EP++

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Stipulated penalty payments under this Consent Decree are not tax deductible.

35. If a Defendant believes it is not liable for the demanded Stipulated Penalties, it may petition the Court, within FIFTEEN (15) days of its receipt of the demand from the United States, to hear evidence on whether Defendant is liable for the Stipulated Penalties demanded by Plaintiff. Defendant shall be liable for attorneys' fees and costs incurred by the United States as a result of any such petition in which Defendant does not prevail.

36. Interest shall accrue on the unpaid balance of any penalties due, in accordance with 28 U.S.C. Section 1961, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last 52-week U.S. Treasury bills settled immediately prior to the time of the preceding payment in the case of Civil Penalties, and at the time payment becomes due in the case of Stipulated Penalties, and shall be included in each subsequent payment of penalties which becomes due under the terms of this Consent Decree. In the case of Civil Penalties, interest shall be computed beginning THIRTY (30) days after final entry of this Consent Decree. Defendant shall submit to the U.S. Attorneys' Office and EPA, no later than FIFTEEN (15) days of the payment date, a statement of interest believed to be due and owing for the upcoming payment. ++EP++

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The U.S. Attorneys' Office will advise Defendant in the event the amount of the interest calculated by Defendant requires adjustment.

37. If Defendant:

a. fails to make any payment of any penalties due and payable under this Consent Decree by the required date and no petition made to this Court pursuant to paragraph 35 regarding such payment is pending;

b. files a voluntary petition in bankruptcy under the Bankruptcy Code of the United States, or is adjudicated a bankrupt under such Code;

c. is the subject of a petition filed in federal or state court for the appointment of a trustee or receiver in bankruptcy or insolvency;

d. makes a general assignment for the benefit of creditors,

then, at the option of the United States, the full balance of all outstanding penalties, civil or stipulated, together with all interest accrued at the rate specified in Paragraph 35 of this Consent Decree, shall become immediately due and payable. Defendant shall also be liable for attorneys' fees and costs incurred by the United States as a result of the implementation of this acceleration provision. Upon the occurrence of any of the events or conditions described in this Paragraph, the Defendant shall give immediate notice to the United States Attorneys' Office and the EPA.

Upon final entry of this Consent Decree, the United States shall be deemed a judgment creditor for the purposes of collecting any penalties due under this Consent Decree. ++EP++

Page 16 VI. NOTICES, RECORDS, AND SUBMISSIONS

39. All notices, records, and submissions required in this Consent Decree, as applicable and except as expressly provided herein, shall be certified and in writing. All such submissions shall be signed by one of the General Partners of the Defendant. Except as expressly provided herein, the Defendant shall keep all records required to be maintained by this Consent Decree for the duration of the Consent Decree, and shall maintain the same at its principal place of business, currently located at the addresses noted below in subparagraphs c or d (as applicable), or on site, as appropriate. The Defendant shall make all records required by this Consent Decree available to EPA upon request. All notice and submissions required to be made by the Defendant to EPA or the U.S. Attorneys' Office shall indicate the cause of action number for this case, and shall be postmarked (using first class certified or registered mail, postage prepaid) or hand delivered by the applicable due date to the following addresses as applicable.

a. For the United States Attorney, to:

THEODORE G. MEEKER

Assistant United States Attorney

Room C-242, U.S. Courthouse

300 Ala Moana Blvd., Box 50183

Honolulu, Hawaii 96850

b. For EPA, to: ++EP++

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Director, Air Management Division

United States Environmental Protection

Agency, Region IX

215 Fremont Street

San Francisco, California 94105

Attention: A-3-3

c. Plaintiff will send all correspondence for Ward Court Development Company to:

Ward Court Development Company

1360 South Beretania Street, 2nd floor,

Honolulu, Hawaii 96814

VII. GENERAL PROVISIONS

40. Nothing contained herein shall be construed to prevent or limit the rights of the Plaintiff to obtain any other remedy, sanction, or relief which may be available to it by virtue of the Defendant's failure to comply with this Consent Decree, the Clean Air Act, or the Asbestos NESHAP.

41. This Consent Decree shall terminate one (1) year from the date of its entry, provided the Defendant has demonstrated compliance with its terms. The United States reserves the right to seek extension of this period in order to fully effectuate the purposes of this Consent Decree. During the terms of the Consent Decree, the Court shall retain jurisdiction over this matter to modify and enforce the provisions of this Consent Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Consent Decree.

42. Any modification of this Consent Decree must be in writing and approved by the Court.

43. Each party consents to entry of this Consent Decree, subject to the public notice and comment provisions of 28 C.F.R. Section 50.7. ++EP++

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44. Each party shall bear its own costs and fees.

45. No part of this Consent Decree shall constitute or be interpreted or construed as an admission of liability under any federal, state, or local law, as an admission of fact or evidence of such, or as an admission of violation of any law or regulation.

We hereby consent to entry of this Consent Decree without further notice, subject to the provisions of 28 C.F.R. Section 50.7. FOR THE UNITED STATES OF AMERICA, Plaintiff,

RICHARD B. STEWART

/s/ Richard B. Stewart

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

DANIEL A. BENT

United States Attorney

District of Hawaii

for THEODORE G. MEEKER

/s/ ILLEGIBLE SIGNATURE

Assistant United States Attorney

Room C-242, U.S. Courthouse

300 Ala Moana Blvd., Box 50183

Honolulu, Hawaii 96850

EDWARD E. REICH

/s/ ILLEGIBLE SIGNATURE for

Acting Assistant Administrator for

Enforcement Compliance Monitoring

U.S. Environmental Protection

Agency

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

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DANIEL W. MCGOVERN

/s/ Daniel W. McGovern

Regional Administrator

U.S. Environmental Protection

Agency, Region IX

215 Fremont Street

San Francisco, California 94105

GERALD F. GEORGE

/s/ ILLEGIBLE SIGNATURE for

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

100 Van Ness - 22nd Floor

San Francisco, California 94102

FOR WARD COURT DEVELOPMENT COMPANY Defendant,

L. RICHARD FRIED, JR. ESQ.

/s/ L. Richard Fried, Jr.

841 Bishop Street

Davies Pacific Center, Suite 1900

Honolulu, Hawaii 96813

GERARD H. DERICKS, JR., M.D.

/s/ Gerard H. Dericks, Jr.

1380 Lusitania St., #904

Honolulu, Hawaii 96813

Approved and judgment entered by agreement of the parties in Honolulu, Hawaii this day of , 1989.

UNITED STATES DISTRICT JUDGE

District of Hawaii ++EP++

APP A-1 ASBESTOS BULK SAMPLING AND ANALYSIS PROTOCOL FOR FRIABLE AND NON-FRIABLE SUSPECT ACM

A. GENERAL

All inspections performed pursuant to this protocol shall be include a review of original blue prints and specifications of the facility when available and visual inspections of all areas of the facility with which any person involved in the Demolition or Renovation Operation may come into contact, or which may contain asbestos and could be affected directly or indirectly by the Operation. B. SAMPLING

1. Asbestos bulk samples shall be collected only by a person who has completed the Asbestos Inspection training specified in Paragraph 26.a of the Consent Decree.

2. All asbestos bulk samples shall be collected in a random manner, using the grid system described in the EPA "Pink Book", and shall be made up of a core which has fully penetrated the Suspect ACM.

3. If the homogeneous area of Suspect ACM is less than 1000 linear or 1000 square feet, at least three (3) bulk samples shall be collected from each homogeneous area.

4. If the homogeneous area of Suspect ACM is at least 1000 linear or 1000 square feet but less than 5000 linear or 5000 square feet, at least five (5) bulk samples shall be collected from each homogeneous area.

5. If the homogeneous area of suspect ACM is at least 5000 linear or 5000 square feet, at least seven (7) bulk samples must be collected from each homogeneous area.

C. LABORATORY ANALYSIS

Samples shall be analyzed only by an EPA-accredited laboratory listed 54 Fed. Reg. 8468-8482 (Tuesday, February 28, 1989).

D. SAMPLE RESULTS

1. Defendant may consider a homogeneous area to be ACM without analyzing any remaining samples if one bulk sample analysis shows more than 1% asbestos.

2. If all samples required to be collected are found by an EPA-accredited laboratory not to contain more than 1% asbestos, then the homogeneous area may be treated as non-ACM.

APPENDIX A ++EP++ APP A-2

E. SAMPLE DOCUMENTATION

1. Each sample collected shall be immediately placed in a sealed leak-tight container; numbered both sequentially and with an identification number unique to the sampling area and the facility; dated; and identified by the initials of the inspector taking the sample.

2. The location from which each sample is taken shall be concurrently noted by sample number on a graphic depiction of the facility containing the information specified in Subparagraph E.3.(b), below. If more than one person is inspecting the facility, each inspector shall use a separate graphic depiction and date and initial the same.

3. The following sample records shall be made and maintained on file by the Defendant:

(a) an inspection report with the date of the inspection, signed by the person making the inspection;

(b) an inventory and graphic depiction of the Demolition or Renovation Operation, showing the locations of the homogeneous areas where samples are collected, exact location where each bulk sample is collected, dates that samples are collected, homogeneous areas where friable Suspect ACM is assumed to be ACM and has therefore not been sampled, homogeneous areas where nonfriable Suspect ACM is assumed to be ACM and has therefore not been sampled, and areas where samples taken were determined by an EPA-Accredited Laboratory to be ACM;

(c) a description of the manner used to determine sampling location, the name and signature of each inspector who collected the samples, and evidence of his/her qualifications;

(d) a list of the type of materials which make up each homogeneous area (e.g. surfacing, thermal system insulation);

(e) chain of custody forms identifying each sample taken; and

(f) laboratory reports for each asbestos bulk sample of ACM and Suspect ACM taken at the Demolition or Renovation Operation. ++EP++

APP B-1

EPA Asbestos in Buildings Guidance for Service and Maintenance Personnel APPENDIX B ++EP++

APP B-2

Definitions Technical terms used in this booklet.

Asbestos: A mineral composed of small thin fibers. It is common in many building materials.

Cementitious: Materials that are hard and usually rough-textured or cement-like in appearance.

Friable: Materials that can be crumbled, pulverized, or reduced to powder by hand pressure.

HEPA: (High Efficiency Particulate Air.) A special type of filter that can trap asbestos fibers.

Introduction How to work safely in buildings that contain asbestos. This booklet has been prepared by the United States Environmental Protection Agency to assist service and maintenance personnel in implementing special Operating and Maintenance procedures in buildings containing asbestos. The information is extracted from "Guidance for Controlling Asbestos-Containing Materials in Buildings" (EPA 560/5-85-024). If you follow the steps in this booklet you will:

Protect the health of people using the building

Protect your own health

If there is asbestos in your building, you should ask your supervisor for training on:

Asbestos-related hazards

How to avoid releasing asbestos fibers into the air

How to avoid breathing asbestos fibers by proper use of respirators

How to handle asbestos materials ++EP++

APP B-3

Health Risks Avoid breathing asbestos fibers Breathing airborne asbestos fibers has been associated with

Asbestosis -- a serious lung disease

Lung cancer

Mesothelioma -- a cancer of the lining of the lung or abdominal cavities.

Airborne asbestos levels in buildings are much lower than those in industrial workplaces where serious health effects have been observed. However, it is still important to minimize exposure to asbestos fibers, by following proper work practices. Recognizing Asbestos Materials Become familiar with the types of materials that could contain asbestos.

1. Friable, fluffy sprayed-on material (fireproofing).

2. Friable, cementitious sprayed-on or troweled material (acoustical plaster).

3. Perforated, nonfriable wallboard with friable sprayed-on material behind.

4. Friable fireproofing material on beam with pipe insulation below.

Do not overlook the boiler room

Boilers and pipes are often insulated with asbestos materials

The walls and ceilings of the boiler room may be covered with asbestos material. ++EP++

APP B-4

Disturbing Asbestos Materials Avoid touching or disturbing asbestos materials on walls, ceilings, pipes or boilers.

Do not drill holes in asbestos materials

Do not hang plants or anything else from ceilings covered with asbestos materials.

Do not pin or hang pictures on walls covered with asbestos materials.

Do not sand asbestos floor tiles or backing material.

Asbestos fibers can be released when the material is disturbed.

Do not damage asbestos material while moving furniture, etc.

Do not disturb asbestos material when replacing light bulbs, etc

Do not allow curtains, drapes or dividers to damage asbestos materials. ++EP++

APP B-5

Cleaning Improper cleaning can stir up asbestos fibers. NOT THIS

Do not dust with a brush.

Do not dry sweep floors.

Take care when cleaning rooms that contain asbestos materials. BUT THIS

Dust with a damp cloth.

Wet mop floors. ++EP++

APP B-6

Cleaning NOT THIS

Do not use an ordinary vacuum to clean up asbestos debris.

Do not brush or sweep ceilings and walls covered with asbestos materials.

BUT THIS

Use only a special HEPA vacuum to clean up asbestos debris.

Avoid touching or disturbing ceilings and walls covered with asbestos materials. ++EP++

APP B-7

General Maintenance Take care when doing maintenance jobs around asbestos materials. NOT THIS

DO NOT use a dust mask. It does not protect you against asbestos fibers.

If you have to remove ceiling tiles below asbestos material

DO NOT start work without protection.

DO NOT allow other people in the area.

DO NOT leave dust and debris after you have finished.

If you change filters in the Air Ventilation System:

DO NOT remove the filter dry.

DO NOT shake the filter.

Asbestos fibers could be released.

BUT THIS

Wear a respirator that is approved for work with asbestos.

Wear an approved respirator

Clear the area of other people

Use a drop cloth and clean up carefully after each job.

Mist the filter with water

Remove the filter carefully

Dispose of properly ++EP++

APP B-8

Boiler Room Maintenance Take special care when working in boiler rooms

Suggest that pipe insulation that contains asbestos be labeled with "CAUTION-ASBESTOS".

NOT THIS If you have to repair boilers or pipes that have asbestos insulation:

DO NOT start work without protection.

DO NOT allow other people in the area.

DO NOT allow asbestos material to fall on the floor.

DO NOT allow asbestos fibers to be released into the air.

Report all damage you see to your supervisor

Obtain instructions on how to repair damaged insulation.

BUT THIS

Wear an approved respirator.

Clear the area of other people.

Use a drop cloth.

Use a glove bag (Ask your supervisor for details).

Clean up carefully. ++EP++

APP B-9

Disposal All cleaning materials and other asbestos waste must be disposed of properly.

Place all dampened filters, cloths, mopheads and other asbestos wastes in double ply (6 mil) plastic bags.

Seal the bag with heavy duty tape.

Label each bag with a sign: "CAUTION: Asbestos Waste".

Place the sealed and labeled bags with other solid waste material for pick-up and delivery to an approved waste disposal site

Asbestos materials should be disposed of according to Federal and local regulations.

Actions to Take By taking the right action you can reduce the risk of exposure to asbestos

Know where the asbestos is in your building

If you find materials that could contain asbestos recommend to your supervisor that they be tested

Ask your supervisor for training in proper ways to work around asbestos materials.

If you see materials that have been disturbed report the damage to your supervisor.

If the cleaning or maintenance in your building is not being done properly see that it is corrected.

Keep on hand items useful for working on or around asbestos materials. These include: disposal bags respirators tools for working on insulation disposable coveralls dropcloths water bottles for misting filters, etc. glove bags. ++EP++

APP B-10

Further Information How to get more details.

If you work in a school and have not received these documents -- ask your supervisor for them.

If you need more information:

Refer to EPA publications

For copies of this and other EPA documents on asbestos call 800-424-9065 (554-1404 in Washington, D.C.)

Contact your EPA regional asbestos coordinator for technical assistance and information on training.

EPA Regional Asbestos Coordinators Region 1 (617) 223-0585 Maine Vermont New Hampshire Connecticut Massachusetts Rhode Island Region 2 (201) 321-6668 New York New Jersey Puerto Rico Virgin Islands Region 3 (215) 597-9859 Pennsylvania Maryland Delaware Virginia West Virginia District of Columbia Region 4 (404) 881-3864 Georgia Alabama Mississippi Florida North Carolina South Carolina Tennessee Kentucky Region 5 (312) 886-6006 Indiana Ohio Illinois Michigan Wisconsin Minnesota Region 6 (214) 767-5314 Texas New Mexico Oklahoma Arkansas Louisiana Region 7 (913) 236-2838 Kansas Missouri Nebraska Iowa Region 8 (303) 293-1742 Colorado Utah Wyoming Montana North Dakota South Dakota Region 9 (414) 974-8588 California Nevada Arizona Hawaii Guam. Am. Samoa Region 10 (206) 442-2870 Washington Oregon Idaho Alaska ++EP++

APP B-11 RISK ASSESSMENT

Several life-threatening or disabling diseases, including lung cancer, mesothelioma, gastrointestinal cancer and asbestosis, can be caused by exposure to airborne asbestos, particularly at the high exposure levels experienced historically in occupational settings. In contrast to many toxic substances for which health effects are inferred from animal studies, the health effects of exposure to asbestos have been directly substantiated in epidemiological studies. The studies have been conducted for the most part on populations occupationally exposed to high airborne concentrations of asbestos for relatively long periods of time (CPSC, 1983).

Lung cancer has been associated with exposure, at occupational levels, to all of the commercial asbestos fiber types. It is responsible for the largest number of deaths from exposure to asbestos. Excess lung cancer has been documented in groups involved with the mining and milling of asbestos and the manufacture and use of asbestos products (See NRC (1984) and USEPA (1986) for summaries of studies and literature references). Cigarette smoking and asbestos have a strong synergistic interaction in the development of lung cancer; i.e., asbestos exposure appears to multiply the risk of lung cancer in smokers. Exposure to asbestos increases the lung cancer rate in non-smokers by a factor of about 5; risk is increased by a factor of about 50 for smokers exposed to asbestos (Hammond et al., 1979).

Mesothelioma, a rare cancer of the membrane that lines the chest and abdominal cavities, has been strongly associated with exposure to asbestos. An estimated 1600 cases of mesothelioma occurred in the United States in 1980 (NRC, 1984). This estimate corresponds to a cumulative mesothelioma incidence of less than 0.08 percent. Other data suggest a mesothelioma risk as low as 0.0002 percent. However, the incidence of mesothelioma is much greater among asbestos workers, approaching as high as 2 percent among asbestos miners and textile workers and as high as 10 percent among workers who manufactured asbestos-containing gas masks (Berry, 1986; NRC, 1984). The risk of contracting mesothelioma appears to be independent of smoking. Mesothelioma is usually fatal within two years of diagnosis.

Asbestosis is a serious chronic disease involving fibrosis of the lung and pleural tissues. There is no effective treatment and the disease is often disabling or fatal. Asbestosis has been observed mainly after high occupational exposures to asbestos.

Short-term occupational exposures (e.g., between one and two years) also have been shown to increase the risk of lung cancer and mesothelioma (USEPA, 1980; Seidman et al, 1979; Seidman, 1984). In addition, excess incidence of mesothelioma has been found in persons living in the households of asbestos workers (Selikoff et al., 1982) or living near asbestos mining areas, asbestos product factories, or shipyards where there was heavy use of asbestos (USEPA, 1980; NRC, 1984). ++EP++

APP B-12

As is typically done for other carcinogens, health effects associated with low level nonoccupational exposure to airborne asbestos fibers in public and commercial buildings have been inferred by extrapolating data from laboratory and occupational studies (USEPA, 1986). However, as with many other environmental pollutant , the validity of extrapolating from high level exposure to low level exposure has never been demonstrated empirically. Summary

Asbestos is known to be extremely hazardous, based upon studies of both laboratory animals and asbestos workers and their families. Several life-threatening diseases, such as lung cancer and mesothelioma, can be caused by exposure to airborne asbestos. No safe threshold has been established for asbestos. Effects at low levels of nonoccupational exposure have been estimated by extrapolation from higher levels although the validity of this approach has not been empirically demonstrated. ++EP++

UNIVERSITY COGENERATION PARTNERS LTD

DOC 02 OF 02

CONSENT DECREE

09-90-C002

CAA

MISC

19890926

19890926

CAD109160945

UNIVERSITY COGENERATION INC

BAKERSFIELD, CA

89-818B(CM)

09

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

UNIVERSITY COGENERATION PARTNERS LTD., 1985-1, DEFENDANT.

Civil Action No. 890818

CONSENT DECREE

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency (EPA), filed a Complaint in this case on May 30, 1989. The Complaint alleges that defendant University Cogeneration Partners Ltd., 1985-1 ("University") has operated its cogeneration facility near Bakersfield, California in violation of the New Source Performance Standards requirements and in violation of the Clean ++EP++ Air Act ("Act"), 42 U.S.C. Sub-Section 7401-7642.

Page 2

More particularly, the United States alleges that defendant failed to comply with various reporting and testing requirements set forth at 40 C.F.R. Part 60.

The parties agree and the Court finds that settlement of this matter is in the public interest and that the entry of this Consent Decree without further litigation is the most appropriate means of settling this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree.

THEREFORE, it is hereby ORDERED, ADJUDGED, and DECREED as follows:

JURISDICTION

1. University Cogeneration Partners Ltd., 1985-1 is a California limited partnership with its principal place of business at 3430 Camino Del Rio North, Suite 200, San Diego, California 92108.

2. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The complaint states a claim upon which relief may be granted against defendant pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

3. The Court has jurisdiction over the parties and venue is proper in this Court. Defendant waives all objections to the Court's personal jurisdiction and venue. ++EP++

Page 3 PARTIES BOUND

4. The provisions of this Consent Decree shall apply to and be binding upon the defendant, its officers, directors, agents, servants, employees, successors, and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through, or under defendant, or in active concert with the defendant and upon the United States on behalf of the EPA. Upon sale or transfer of the referenced facility, the purchaser, and its successor or assigns shall be provided with a copy of this Consent Decree and be bound thereby.

5. Defendant shall, within five (5) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Decree accompanied by a summary explanation of its terms, to all persons bound by this Decree as specified in Paragraph 4, including notice to any successors in interest to property governed by this Decree prior to the transfer of said property, in a position to ensure or affect compliance herewith. Defendant shall provide the United States, no more than five (5) working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

COMPLIANCE SCHEDULE

6. Within 14 days of the next operation of the duct burners, University shall conduct performance tests in accordance with 40 C.F.R. Section 60.8(a).

7. University shall notify the United States no later than 30 days prior to conducting the tests. ++EP++

Page 4

8. University shall provide the United States with a copy of the performance test report within 90 days of the completion of the test.

ACCESS AND INSPECTION

9. The United States, its contractors and agents shall be allowed to enter and inspect the facility, including the record of the data produced by continuous emission monitors, at all reasonable times to ensure compliance with this Decree. This paragraph in no way limits the rights of the United States under Section 114 of the Act.

NOTIFICATION

10. Defendant shall send all submissions required by this Consent Decree to:

Director, Air and Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105

and to:

Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

10th Street and Pennsylvania Ave., N.W.

Washington, D.C. 20530

All submissions shall be signed and affirmed to by an appropriate corporate officer or a responsible delegate competent to make such affirmations.

CIVIL PENALTY

11. In addition to remedial actions set forth herein, defendant shall pay a civil penalty of $25,000 to the United States. The full amount of said penalty shall be paid by defendant within 30 days of entry of this Consent Decree, by a ++EP++

certified check made payable to the "Treasurer of the United States" and shall be delivered to the United States Attorney for the Southern District of California.

Page 5

Payment shall be accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, defendant shall notify the United States by sending a photocopy of the certified check and transmittal letter to the addresses identified in paragraph 10. Payments made pursuant to this paragraph shall not be deductible for federal or state tax purposes.

STIPULATED PENALTIES

12. Defendant shall pay stipulated penalties for failure to comply with any requirement of Paragraphs 6, 7, 8, or 11 according to the following schedule:

1) $2,000 for each day of violation, days one through seven within any calendar quarter.

2) $10,000 for each day of violation over seven days within any calendar quarter.

Any penalty shall be due and payable upon demand and payment shall be made by cashier's check payable to "Treasurer of the United States", and delivered to the United States Attorney for the Southern District of California. Payment shall be Accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, defendant shall notify the United States by sending a photocopy of the certified check and transmittal letter to the addresses identified in paragraph 10. Amounts paid pursuant to this Paragraph are in the nature of a civil penalty and are not deductible for Federal tax purposes. Penalties paid pursuant to this Consent Decree are not ++EP++ the Plaintiff's exclusive remedy for the defendant's violation of this Consent Decree and Plaintiff reserves its right to seek such other relief under the federal statutes to which it is entitled.

Page 6 DISPUTE RESOLUTION

13. In the event the parties cannot resolve any dispute with respect to the meaning or implementation of this Consent Decree, then the interpretation advanced by the United States shall be considered binding unless defendant invokes the dispute resolution provisions of this paragraph. If in the opinion of any party there is a dispute with respect to the meaning or implementation of this Consent Decree, that party shall send a written notice to the other party which outlines the nature of the dispute. Any such dispute shall in the first instance be the subject of informal negotiations between the parties. That period of informal negotiations shall not extend beyond thirty days from the date when the notice was sent unless the parties agree otherwise. If informal negotiations are unsuccessful, the United States' position shall control unless defendant files with this court a petition which shall describe the nature of the dispute and include a proposal for its resolution. Defendant's petition must be filed no more than fifteen days after termination of informal negotiations. The United States shall then have twenty days to respond to the petition. In any such dispute, defendant shall have the burden of proving that the United States' position is arbitrary and capricious. Stipulated penalties shall accrue but need not be paid during the pendency of any dispute resolution proceeding, until this Court issues a decision requiring the payment of ++EP++ stipulated penalties.

Page 7 MISCELLANEOUS

14. Each party shall bear its own costs and attorneys fees in this action.

15. This Decree in no way affects defendant's responsibilities to comply with all federal, state, and local laws and regulations.

16. This Decree shall terminate six months after next operation of the duct burners, provided that defendant has complied with all provisions herein and all penalties that are due have been paid.

17. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Decree.

18. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, EPA, and the Assistant Administrator for Enforcement and Compliance Monitoring, EPA, and the defendant.

19. Entry of this Decree and Compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims by the United States alleged in its complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local, or federal law and shall in no way alter, limit or revoke state, local, or federal laws or regulations or affect the authority of the United States to seek enforcement of this Decree or immediate relief ++EP++

pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize defendant from violations of other applicable law.

Page 8

20. The final approval and entry of this Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

This Consent Decree is entered on this 26 day of September 1989.

Rudi M. Brewster

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered. ++EP++

CONSENTED TO:

UNITED STATES OF AMERICA, Plaintiff

Dated:

BY: /s/ Donald Carr

Donald A. Carr

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Dated:

BY: /s/

William Weinischke

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Dated: 3/21/89

BY: /s/

Edward E. Reich

Acting Assistant Administrator for Enforcement and Compliance Monitoring

United States Environmental

Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Dated: 2-27-89

BY: /s/ Daniel McGovern

Daniel McGovern

Regional Administrator

United States Environmental Protection Agency, Region IX

215 Fremont Street

San Francisco, CA 94105

CONSENTED TO:

DALE & LLOYD

Dated: 1/17/89

BY: /s/ Franklin T. Lloyd

Attorneys for Defendant

Franklin T. Lloyd ++EP++

OF COUNSEL:

GEORGE E. HAYS

Assistant Regional Counsel

U.S. Environmental Protection

Agency, Region IX

215 Fremont Street

San Francisco, California 94105

Telephone: (415) 974-8008

JULIE DOMIKE

Attorney Advisor

U.S. Environmental Protection

Agency - HQ

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

UNIVERSITY COGENERATION PARTNERS LTD.,

01 OF 01

CONSENT DECREE

09-90-C002

CAA MISC

19890926

19890926

CAD109160945

UNIVERSITY COGENERATION INC.

BAKERSFIELD, CA

89-818-B-CM

09

CONSENT DECREE US V UNIVERSITY COGENERATION PARTNERS LTD.,

Page 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v. UNIVERSITY COGENERATION PARTNERS LTD., 1985-1,

Defendant.

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency (EPA), filed a Complaint in this case on , 1988. The Complaint alleges that defendant University Cogeneration Partners Ltd., 1985-1 ("University") has operated its cogeneration facility near Bakersfield, California in violation of the New Source Performance Standards requirements and in violation of the Clean Air Act ("Act"), 42 U.S.C. Sections 7401-7642. ++EP++

Page 2

More particularly, the United States alleges that defendant failed to comply with various reporting and testing requirements set forth at 40 C.F.R. Part 60.

The parties agree and the Court finds that settlement of this matter is in the public interest and that the entry of this Consent Decree without further litigation is the most appropriate means of settling this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree.

THEREFORE, it is hereby ORDERED, ADJUDGED, and DECREED as follows:

JURISDICTION

1. University Cogeneration Partners Ltd., 1985-1 is a California limited partnership with its principal place of business at 3430 Camino Del Rio North, Suite 200, San Diego, California 92108.

2. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The complaint states a claim upon which relief may be granted against defendant pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

3. The Court has jurisdiction over the parties and venue is proper in this Court. Defendant waives all objections to the Court's personal jurisdiction and venue. ++EP++

Page 3 PARTIES BOUND

4. The provisions of this Consent Decree shall apply to and be binding upon the defendant, its officers, directors, agents, servants, employees, successors, and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through, or under defendant, or in active concert with the defendant and upon the United States on behalf of the EPA. Upon sale or transfer of the referenced facility, the purchaser, and its successor or assigns shall be provided with a copy of this Consent Decree and be bound thereby.

5. Defendant shall, within five (5) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Decree accompanied by a summary explanation of its terms, to all persons bound by this Decree as specified in Paragraph 4, including notice to any successors in interest to property, in a position to ensure or affect compliance herewith. Defendant shall provide the United States, no more than five (5) working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

COMPLIANCE SCHEDULE

6. Within 14 days of the next operation of the duct burners, University shall conduct performance tests in accordance with 40 C.F.R. Section 60.8(a).

7. University shall notify the United States no later than 30 days prior to conducting the tests. ++EP++

Page 4

8. University shall provide the United States with a copy of the performance test report within 90 days of the completion of the test.

ACCESS AND INSPECTION

9. The United States, its contractors and agents shall be allowed to enter and inspect the facility, including the record of the data produced by continuous emission monitors, at all reasonable times to ensure compliance with this Decree. This paragraph in no way limits the rights of the United States under Section 114 of the Act.

NOTIFICATION

10. Defendant shall send all submissions required by this Consent Decree to:

Director, Air and Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105

and to:

Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

10th Street and Pennsylvania Ave., N.W.

Washington, D.C. 20530

All submissions shall be signed and affirmed to by an appropriate corporate officer or a responsible delegate competent to make such affirmations.

CIVIL PENALTY

11. In addition to remedial actions set forth herein, defendant shall pay a civil penalty of $25,000 to the United States. The full amount of said penalty shall be paid by defendant within 30 days of entry of this Consent Decree, by a certified check made payable to the "Treasurer of the United States" and shall be delivered to the United States Attorney for the Southern District of California. ++EP++

Page 5

Payment shall be accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, defendant shall notify the United States by sending a photocopy of the certified check and transmittal letter to the addresses identified in paragraph 10. Payments made pursuant to this paragraph shall not be deductible for federal or state tax purposes.

STIPULATED PENALTIES

12. Defendant shall pay stipulated penalties for failure to comply with any requirement of Paragraphs 6, 7, 8, or 11 according to the following schedule:

1) $2,000 for each day of violation, days one through seven within any calendar quarter.

2) $10,000 for each day of violation over seven days within any calendar quarter.

Any penalty shall be due and payable upon demand and payment shall be made by cashier's check payable to "Treasurer of the United States", and delivered to the United States Attorney for the Southern District of California. Payment shall be Accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, defendant shall notify the United States by sending a photocopy of the certified check and transmittal letter to the addresses identified in paragraph 10. Amounts paid pursuant to this Paragraph are in the nature of a civil penalty and are not deductible for Federal tax purposes. Penalties paid pursuant to this Consent Decree are not the Plaintiff's exclusive remedy for the defendant's violation of this Consent Decree and Plaintiff reserves its right to seek such other relief under the federal statutes to which it is entitled. ++EP++

Page 6 DISPUTE RESOLUTION

13. In the event the parties cannot resolve any dispute with respect to the meaning or implementation of this Consent Decree, then the interpretation advanced by the United States shall be considered binding unless defendant invokes the dispute resolution provisions of this paragraph. If in the opinion of any party there is a dispute with respect to the meaning or implementation of this Consent Decree, that party shall send a written notice to the other party which outlines the nature of the dispute. Any such dispute shall in the first instance be the subject of informal negotiations between the parties. That period of informal negotiations shall not extend beyond thirty days from the date when the notice was sent unless the parties agree otherwise. If informal negotiations are unsuccessful, the United States' position shall control unless defendant files with this court a petition which shall describe the nature of the dispute and include a proposal for its resolution. Defendant's petition must be filed no more than fifteen days after termination of informal negotiations. The United States shall then have twenty days to respond to the petition. In any such dispute, defendant shall have the burden of proving that the United States' position is arbitrary and capricious. Stipulated penalties shall accrue but need not be paid during the pendency of any dispute resolution proceeding, until this Court issues a decision requiring the payment of stipulated penalties. ++EP++

Page 7 MISCELLANEOUS

14. Each party shall bear its own costs and attorneys fees in this action.

15. This Decree in no way affects defendant's responsibilities to comply with all federal, state, and local laws and regulations.

16. This Decree shall terminate six months after next operation of the duct burners, provided that defendant has complied with all provisions herein and all penalties that are due have been paid.

17. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Decree.

18. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, EPA, and the Assistant Administrator for Enforcement and Compliance Monitoring, EPA, and the defendant.

19. Entry of this Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims by the United States alleged in its complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local, or federal law and shall in no way alter, limit or revoke state, local, or federal laws or regulations or affect the authority of the United States to seek enforcement of this Decree or immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize defendant from violations of other applicable law. ++EP++

Page 8

20. The final approval and entry of this Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

This Consent Decree is entered on this day of 1989.

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered. ++EP++

Page 9

CONSENTED TO: UNITED STATES OF AMERICA, Plaintiff

Donald A. Carr

/s/ Donald Carr

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

William Weinischke

/s/ W Weinischke

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Edward E. Reich

/s/ Frederick F. Stiehl

Acting Assistant Administrator for

Enforcement and Compliance Monitoring

United States Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

3/21/89

Daniel McGovern

/s/ Daniel M. McGovern

Regional Administrator

United States Environmental

Protection Agency, Region IX

215 Fremont Street

San Francisco, CA 94105

2-27-89

CONSENTED TO: DALE & LLOYD

Franklin T. Lloyd

/s/ Franklin T. Lloyd

Attorneys for Defendant

1/17/89 ++EP++

Page 10

OF COUNSEL:

GEORGE E. HAYS

Assistant Regional Counsel

U.S. Environmental Protection Agency, Region IX

215 Fremont Street

San Francisco, California 94105

(415) 974-8008

JULIE DOMIKE

Attorney Advisor

U.S. Environmental Protection Agency - HQ

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

SOLAR TURBINES INC.

DOC 02 OF 02

CONSENT DECREE

09-90-C001

CAA

MISC

19890824

19890824

CAD008314908

SOLAR TURBINE

SAN DIEGO, CA

89-0739E(CM)

09

ATTORNEYS FOR PLAINTIFF IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

SOLAR TURBINES INCORPORATED, Defendant.

Civil No. '890739 E (CM) CONSENT DECREE

WHEREAS, the plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint in this action simultaneously with the lodging of this Decree, alleging that defendant Solar Turbines Incorporated ("Solar" or "defendant") violated the Clean Air Act (the "Act"), 42 U.S.C. Section 7401 et seq., and the ++EP++

California State Implementation Plan ("SIP") provisions adopted under the Act; and

Page 2

WHEREAS, Solar is a Delaware corporation qualified to do and doing business at 2200 Pacific Highway, San Diego, California; and

WHEREAS, Rule 67.3 of the San Diego County Air Pollution Control District ("SDCAPCD") regulates the content of volatile organic compounds ("VOCs") in coatings applied to manufactured metal parts, and was promulgated by California as part of its SIP and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410 at 50 Fed. Reg. 3906 (January 29, 1985) (hereinafter referred to as "SIP Rule 67.3"); and

WHEREAS, Solar's San Diego facility is subject to SIP Rule 67.3; and

WHEREAS, the SDCAPCD is a nonattainment area for the ozone national ambient air quality standard under the Act; and

WHEREAS, Solar allegedly violated the Act and SIP Rule 67.3 by using miscellaneous metal parts coatings which do not comply with the VOC content limits of SIP Rule 67.3; and

WHEREAS, EPA informed Solar by Notice of Violation ("NOV") dated May 22, 1987 of Solar's alleged violations of SIP Rule 67.3; and

WHEREAS, Solar has denied that it has violated SIP Rule 67.3 and has alleged that it is in full compliance with SIP Rule 67.3; and

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that ++EP++

the entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter; and

Page 3

WHEREAS, for the purpose of settling this litigation without the taking of any testimony, upon the pleadings, and without the trial or adjudication of any issue of fact or law, the Parties, by and through counsel, have moved this Court to enter this Consent Decree;

NOW, THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), and 28 U.S.C. Sub-Section 1331, 1345 and 1355. The Complaint states a claim upon which relief can be granted against Solar under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and under SIP Rule 67.3.

2. This Court has personal jurisdiction over the parties and venue is proper in this Court. Solar waives all objections to the Court's jurisdiction and venue.

DEFINITION

3. For the purpose of this Consent Decree, the following definitions shall apply:

A. "Miscellaneous Metal Parts Coating(s)" shall refer to those coatings which are subject to SIP Rule 67.3.

B. "Low VOC Coating(s)" shall refer to Miscellaneous Metal Parts Coatings which must comply with VOC content limits as set forth in SIP Rule 67.3. ++EP++

Page 4

C. "VOC(s)" shall refer to any volatile organic compound as defined in SIP Rule 67.3.

D. "Solar Facility" shall refer to the facility operated by Solar Turbines Incorporated which is located at 2200 Pacific Highway, San Diego, CA, at which Solar engages in, among other things, the coating of miscellaneous metal parts subject to SIP Rule 67.3.

PARTIES BOUND

4. Upon the execution by Solar of this Consent Decree, its provisions shall apply to and be binding upon Solar, its successors and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through or under Solar or in active concert or participation with Solar to ensure or to effect compliance with this Consent Decree, and upon the United States on behalf of EPA.

5. Solar shall within ten (10) days of the entry of this Consent Decree, and as appropriate thereafter, give copies of the Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph 4 responsible for ensuring or affecting compliance with this Consent Decree, and to any successor in interest and/or assign to property governed by this Consent Decree prior to the transfer of said property. Solar shall provide to EPA within five (5) working days after the date(s) of such notice(s) a copy of the summary and a list of the names and work addresses of all its recipients.

ACCESS AND INSPECTION

6. EPA, the SDCAPCD, and their contractors and agents shall be allowed to enter and inspect the Solar Facility at all ++EP++

reasonable times to ensure compliance with this Consent Decree. This is in addition to, and not in limitation of, EPA's authority under the Act and federal law.

Page 5 REPORTING AND TESTING REQUIREMENTS

7. The ASTM test methods specified at 40 CFR Part 60 App. A (Method 24), as may from time to time be adopted by EPA, shall be used to determine the VOC content of any coating tested pursuant to this Consent Decree.

8. From the date of lodging of this Consent Decree, Solar is permanently enjoined pursuant to and for the term of this Decree from using coatings in violation of SIP Rule 67.3 at the Solar Facility.

9. To verify that the Solar Facility is currently in compliance with SIP Rule 67.3, Solar shall submit to EPA, within thirty (30) days of the lodging of this Consent Decree, test results from an independent laboratory of each type of Miscellaneous Metal Parts Coating it is using in an application governed by Rule 67.3 at the time of the lodging of this Consent Decree. Solar shall immediately cease using any Miscellaneous Metal Parts Coating determined by the testing to be noncomplaint with SIP Rule 67.3.

10. Commencing with the period ending December 31, 1988, Solar shall submit semi-annual reports confirming Solar's continuing compliance with SIP Rule 67.3. These reports shall continue for two years from the date of lodging, and shall include information about each Miscellaneous Metal Parts Coating used in non-exempt applications at the Solar Facility ++EP++

during the reporting period sufficient to demonstrate compliance with SIP Rule 67.3, including, but not necessarily limited to, the name and manufacturer of each coating used, the volume of each coating used, and the VOC content of each coating used.

Page 6

The reports required by this Paragraph shall be postmarked no later than the fifteenth (15th) working day following the period for which the report is made.

11. Solar shall not use in any non-exempt application at the Solar Facility any Miscellaneous Metal Parts Coating of a type not tested pursuant to Paragraph 9 above, unless and until a sample of each such new coating has been submitted to an independent laboratory for testing of the coating's VOC content and Solar has received the test results demonstrating that the coating complies with SIP Rule 67.3. Solar shall submit the results of these tests to EPA postmarked no later than thirty (30) days prior to Solar's first non-exempt use of any such coating.

12. Solar shall at all times refrain from using in any non-exempt application any Miscellaneous Metal Parts Coatings at the Solar Facility for which testing pursuant to Paragraph 9 or 11 above, demonstrating compliance with SIP Rule 67.3, has not been completed.

NOTIFICATION

13. All submissions required by this Consent Decree shall be addressed: ++EP++

For EPA, to:

Director, Air Management Division

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, CA 94105

(ATTN: A-3-3)

For the Department of Justice ("DOJ"), to:

Assistant Attorney General

U.S. Department of Justice

Land & Natural Resources Division

10th and Pennsylvania Avenues

Washington, D.C. 20530

For the United States Attorney, to:

United States Attorney

Southern District of California

940 Front Street, Room 5 N 19

San Diego, CA 92189

For Solar, to:

Solar Turbines Incorporated

Attn: General Counsel

2200 Pacific Highway

P.O. Box 85376

San Diego, CA 92138-5376

cc: Steven P. McDonald, Esq.

Dorazio, Barnhorst & Bonar

438 Camino del Rio South, Suite B-223

P. O. Box 880209

San Diego, CA 92108-0005

14. All submissions by Solar shall be signed and affirmed by a corporate officer or other person competent to make such affirmations on behalf of Solar.

STIPULATED PENALTIES

15. Solar shall be liable for stipulated penalties for failure to comply with the terms of this Consent Decree as follows:

A. For failure to comply with the reporting requirements of Paragraphs 9, 10 or 11: $500.00 if greater ++EP++

than one (1) working day but less than ten (10) working days; $500.00 per day for each working day after ten (10) working days.

Page 8

B. For failure to comply with the requirements of Paragraphs 8 and 12:

Penalty Per Day Number of Days of Violation of Violation $1,000.00 One through Ten $5,000.00 Eleven through Twenty $10,000.00 More than Twenty

16. Any penalty owing to the United States pursuant to Paragraph 15 shall be due and payable upon demand. Payment shall be made by cashier's check payable to "Treasurer, United States of America," and delivered to the United States Attorney for the Southern District of California at the address specified in Paragraph 13 above. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and Paragraph 15. Solar shall notify the EPA and the DOJ of such payment by submitting a photocopy of the certified check and transmittal letter to the EPA and DOJ. Payment of stipulated penalties for violations of this Consent Decree shall not excuse Solar from liability for violations of the Act.

17. Amounts paid pursuant to Paragraph 15 are in the nature of a civil penalty and are not deductible for Federal tax purposes.

CIVIL PENALTIES

18. In addition to other actions set forth herein, Solar shall pay a civil penalty of FORTY NINE THOUSAND SEVEN HUNDRED ++EP++ EIGHTY SEVEN DOLLARS ($49,787.00) to the United States.

Page 9

The full amount of said penalty shall be paid by Solar within thirty (30) days following the entry of this Consent Decree by a certified check made payable to the "Treasurer, United States of America," delivered to the United States Attorney for the Southern District of California. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Solar shall notify the EPA and the DOJ of such payment by submitting a photocopy of the certified check and transmittal letter to the EPA and to the DOJ. The civil penalty paid by Solar pursuant to this Paragraph shall not be deductible for Federal tax purposes.

MISCELLANEOUS

19. Each party shall bear its own costs and attorneys' fees in this action.

20. This Consent Decree in no way affects or relieves Solar of its responsibility to comply with all Federal, State, and local laws and regulations.

21. This Court shall retain jurisdiction over this matter and all disputes arising hereunder for a period of two years following entry of this Consent Decree, at which time this Consent Decree shall terminate.

22. Any modification of this Consent Decree must be in writing and approved by this Court.

23. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of the civil claims of the United States as alleged in its Complaint filed in this action. Nothing herein ++EP++

shall, however, constitute a permit of any kind under Federal, State, or local law and shall in no way alter, limit or revoke Federal, State, or local laws or regulations, or affect the authority of the United States to seek enforcement of this Consent Decree or to seek immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize Solar from violations of other applicable law.

Page 10

Nor does this Consent Decree limit or affect the rights of the United States as against third parties.

24. The final approval and entry of this Consent Decree shall be subject to the requirements of 28 C.F.R. Section 50.7, which provides that notice of proposed decrees be given to the public and that the public shall have at least thirty (30) days to comment thereon.

25. All information and documents submitted by Solar to EPA pursuant to this Consent Decree shall be subject to public inspection unless identified by Solar and deemed confidential by EPA in conformance with 40 C.F.R. Part 2. The information and documents so identified as confidential will be disclosed only in accordance with EPA regulations.

26. This Consent Decree shall not constitute evidence or an admission of any issue of fact or law by either party.

27. The terms of Paragraphs 15 and 18 do not limit other remedies available for violations of this Consent Decree or the Act. ++EP++

Page 11 CONSENT

We hereby consent to entry of this Consent Decree without further notice.

Dated: 5/11/89

/s/ Donald A. Casor by Myles E

Flair

DONALD A. CARR Acting Assistant

Attorney General

Dated: 5/9/89

/s/

VALERIE ANN LEE, Attorney

Environmental Enforcement Section

Land & Natural Resources Division

U.S. Department of Justice

Dated: 5-15-89

/s/ William Braniff

WILLIAM BRANIFF

United States Attorney

Southern District of California

Dated: 5-16-89

/s/

STEPHEN V. PETIX

Assistant United States Attorney

Southern District of California

Dated: 2-18-89

/s/

EDWARD E. REICH

Acting Assistant Administrator

for Enforcement and

Compliance Monitoring

United States Environmental

Proection Agency

Dated: 1-25-89

/s/ Daniel W. McGovern

DANIEL W. McGOVERN

Regional Administrator

United States Environmental

Protection Agency,

Region 9 ++EP++

Page 17

OF COUNSEL:

LUCIA L. BLAKESLEE

Assistant Regional Counsel

United States Environmental

Protection Agency,

Region 9

215 Fremont Street, Fifth Floor

San Francisco, CA 94105

RACHEL M. HOPP

Attorney-Advisor

Office of Enforcement and

Compliance Monitoring

United States Environmental

Protection Agency

401 M Street, S.W.

Room 3211B (LE-134A)

Washington, D.C. 20460

ATTORNEYS FOR PLAINTIFF

Dated: 12/28/88

/s/

STEVEN P. McDONALD, ESQ.

Dorazio, Barnhorst & Bonar

ATTORNEYS FOR DEFENDANT,

SOLAR TURBINES INCORPORATED

IT IS SO ORDERED

Dated: 8/24/89

/s/

UNITED STATES DISTRICT JUDGE

++EP++

SOLAR TURBINES INCORPORATED

01 OF 01

CONSENT DECREE

09-90-C001

CAA

MISC

19890824

19890824

CAD008314908

SOLAR TURBINES INCORPORATED

SAN DIEGO, CA

89-0739-E

09

CONSENT DECREE US V SOLAR TURBINES INCORPORATED

Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

SOLAR TURBINES INCORPORATED,

Defendant.

WHEREAS, the plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint in this action simultaneously with the lodging of this Decree, alleging that defendant Solar Turbines Incorporated ("Solar" or "defendant") violated the Clean Air Act (the "Act"), 42 U.S.C. Section 7401 et seq., and the California State Implementation Plan ("SIP") provisions adopted under the Act; and ++EP++

Page 2

WHEREAS, Solar is a Delaware corporation qualified to do and doing business at 2200 Pacific Highway, San Diego, California; and

WHEREAS, Rule 67.3 of the San Diego County Air Pollution Control District ("SDCAPCD") regulates the content of volatile organic compounds ("VOCs") in coatings applied to manufactured metal parts, and was promulgated by California as part of its SIP and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410 at 50 Fed. Reg. 3906 (January 29, 1985) (hereinafter referred to as "SIP Rule 67.3"); and

WHEREAS, Solar's San Diego facility is subject to SIP Rule 67.3; and

WHEREAS, the SDCAPCD is a nonattainment area for the ozone national ambient air quality standard under the Act; and

WHEREAS, Solar allegedly violated the Act and SIP Rule 67.3 by using miscellaneous metal parts coatings which do not comply with the VOC content limits of SIP Rule 67.3; and

WHEREAS, EPA informed Solar by Notice of Violation ("NOV") dated May 22, 1987 of Solar's alleged violations of SIP Rule 67.3; and

WHEREAS, Solar has denied that it has violated SIP Rule 67.3 and has alleged that it is in full compliance with SIP Rule 67.3; and

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that the entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter; and ++EP++

Page 3

WHEREAS, for the purpose of settling this litigation without the taking of any testimony, upon the pleadings, and without the trial or adjudication of any issue of fact or law, the Parties, by and through counsel, have moved this Court to enter this Consent Decree;

NOW, THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sections 1331, 1345 and 1355. The Complaint states a claim upon which relief can be granted against Solar under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and under SIP Rule 67.3.

2. This Court has personal jurisdiction over the parties and venue is proper in this Court. Solar waives all objections to the Court's jurisdiction and venue.

DEFINITIONS

3. For the purpose of this Consent Decree, the following definitions shall apply:

A. "Miscellaneous Metal Parts Coating(s)" shall refer to

those coatings which are subject to SIP Rule 67.3.

B. "Low VOC Coating(s)" shall refer to Miscellaneous

Metal Parts Coatings which must comply with VOC content limits as set forth in SIP Rule 67.3. ++EP++

Page 4

C. "VOC(s)" shall refer to any volatile organic compound

as defined in SIP Rule 67.3.

D. "Solar Facility" shall refer to the facility operated

by Solar Turbines Incorporated which is located at 2200 Pacific Highway, San Diego, CA, at which Solar engages in, among other things, the coating of miscellaneous metal parts subject to SIP Rule 67.3.

PARTIES BOUND

4. Upon the execution by Solar of this Consent Decree, its provisions shall apply to and be binding upon Solar, its successors and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through or under Solar or in active concert or participation with Solar to ensure or to effect compliance with this Consent Decree, and upon the United States on behalf of EPA.

5. Solar shall within ten (10) days of the entry of this Consent Decree, and as appropriate thereafter, give copies of the Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph 4 responsible for ensuring or affecting compliance with this Consent Decree, and to any successor in interest and/or assign to property governed by this Consent Decree prior to the transfer of said property. Solar shall provide to EPA within five (5) working days after the date(s) of such notice(s) a copy of the summary and a list of the names and work addresses of all its recipients.

ACCESS AND INSPECTION

6. EPA, the SDCAPCD, and their contractors and agents shall be allowed to enter and inspect the Solar Facility at all reasonable times to ensure compliance with this Consent Decree. ++EP++

Page 5

This is in addition to, and not in limitation of, EPA's authority under the Act and federal law.

REPORTING AND TESTING REQUIREMENTS

7. The ASTM test methods specified at 40 CFR Part 60 App. A (Method 24), as may from time to time be adopted by EPA, shall be used to determine the VOC content of any coating tested pursuant to this Consent Decree.

8. For the date of lodging of this Consent Decree, Solar is permanently enjoined pursuant to and for the term of this Decree from using coatings in violation of SIP Rule 67.3 at the Solar Facility.

9. To verify that the Solar Facility is currently in compliance with SIP Rule 67.3, Solar shall submit to EPA, within thirty (30) days of the lodging of this Consent Decree, test results from an independent laboratory of each type of Miscellaneous Metal Parts Coating it is using in an application governed by Rule 67.3 at the time of the lodging of this Consent Decree. Solar shall immediately cease using any Miscellaneous Metal Parts Coating determined by the testing to be noncompliant with SIP Rule 67.3.

10. Commencing with the period ending December 31, 1988, Solar shall submit semi-annual reports confirming Solar's continuing compliance with SIP Rule 67.3. These reports shall continue for two years from the date of lodging, and shall include information about each Miscellaneous Metal Parts Coating used in non-exempt applications at the Solar Facility during the reporting period sufficient to demonstrate compliance with SIP Rule 67.3, including, but not necessarily limited to, the name and manufacturer of each coating used, the volume of each coating used, and the VOC content of each coating used. ++EP++

Page 6

The reports required by this Paragraph shall be postmarked no later than the fifteenth (15th) working day following the period for which the report is made.

11. Solar shall not use in any non-exempt application at the Solar Facility any Miscellaneous Metal Parts Coating of a type not tested pursuant to Paragraph 9 above, unless and until a sample of each such new coating has been submitted to an independent laboratory for testing of the coating's VOC content and Solar has received the test results demonstrating that the coating complies with SIP Rule 67.3. Solar shall submit the results of these tests to EPA postmarked no later than thirty (30) days prior to Solar's first non-exempt use of any such coating.

12. Solar shall at all times refrain from using in any non-exempt application any Miscellaneous Metal Parts Coatings at the Solar Facility for which testing pursuant to Paragraph 9 or 11 above, demonstrating compliance with SIP Rule 67.3, has not been completed.

NOTIFICATION

13. All submissions required by this Consent Decree shall be addressed: ++EP++

Page 7

For EPA, to:

Director, Air Management Division

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, CA 94105 (ATTN: A-3-3)

For the Department of Justice ("DOJ"), to:

Assistant Attorney General

U.S. Department of Justice

Land & Natural Resources Division

10th and Pennsylvania Avenues

Washington, D.C. 20530

For the United States Attorney, to:

United States Attorney

Southern District of California

940 Front Street, Room 5 N 19

San Diego, CA 92189

For Solar, to:

Solar Turbines Incorporated

Attn: General Counsel

2200 Pacific Highway

P.O. Box 85376

San Diego, CA 92138-5376

cc: Steven P. McDonald, Esq.

Dorazio, Barnhorst & Bonar

438 Camino del Rio South, Suite B-223

P.O. Box 880209

San Diego, CA 92108-0005

14. All submissions by Solar shall be signed and affirmed by a corporate officer or other person competent to make such affirmations on behalf of Solar.

STIPULATED PENALTIES

15. Solar shall be liable for stipulated penalties for failure to comply with the terms of this Consent Decree as follows:

A. For failure to comply with the reporting requirements of Paragraphs 9, 10 or 11: $500.00 if greater than one (1) working day but less than ten (10) working days; $500.00 per day for each working day after ten (10) working days. ++EP++

Page 8

B. For failure to comply with the requirements of

Paragraphs 8 and 12: Penalty Per Day Number of Days of Violation of Violation $ 1,000.00 One through Ten $ 5,000.00 Eleven through Twenty $10,000.00 More than Twenty

16. Any penalty owing to the United States pursuant to Paragraph 15 shall be due and payable upon demand. Payment shall be made by cashier's check payable to "Treasurer, United States of America," and delivered to the United States Attorney for the Southern District of California at the address specified in Paragraph 13 above. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and Paragraph 15. Solar shall notify the EPA and the DOJ of such payment by submitting a photocopy of the certified check and transmittal letter to the EPA and DOJ. Payment of stipulated penalties for violations of this Consent Decree shall not excuse Solar from liability for violations of the Act.

17. Amounts paid pursuant to Paragraph 15 are in the nature of a civil penalty and are not deductible for Federal tax purposes.

CIVIL PENALTIES

18. In addition to other actions set forth herein, Solar shall pay a civil penalty of FORTY NINE THOUSAND SEVEN HUNDRED EIGHTY SEVEN DOLLARS ($49,787.00) to the United States. ++EP++

Page 9

The full amount of said penalty shall be paid by Solar within thirty (30) days following the entry of this Consent Decree by a certified check made payable to the "Treasurer, United States of America," delivered to the United States Attorney for the Southern District of California. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Solar shall notify the EPA and the DOJ of such payment by submitting a photocopy of the certified check and transmittal letter to the EPA and to the DOJ. The civil penalty paid by Solar pursuant to this Paragraph shall not be deductible for Federal tax purposes.

MISCELLANEOUS

19. Each party shall bear its own costs and attorneys' fees in this action.

20. This Consent Decree in no way affects or relieves Solar of its responsibility to comply with all Federal, State, and local laws and regulations.

21. This Court shall retain jurisdiction over this matter and all disputes arising hereunder for a period of two years following entry of this Consent Decree, at which time this Consent Decree shall terminate.

22. Any modification of this Consent Decree must be in writing and approved by this Court.

23. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of the civil claims of the United States as alleged in its Complaint filed in this action. Nothing herein shall, however, constitute a permit of any kind under Federal, State, or local law and shall in no way alter, limit or revoke Federal, State, or local laws or regulations, or affect the authority of the United States to seek enforcement of this Consent Decree or to seek immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize Solar from violations of other applicable law. ++EP++

Page 10

Nor does this Consent Decree limit or affect the rights of the United States as against third parties.

24. The final approval and entry of this Consent Decree shall be subject to the requirements of 28 C.F.R. Section 50.7, which provides that notice of proposed decrees be given to the public and that the public shall have at least thirty (30) days to comment thereon.

25. All information and documents submitted by Solar to EPA pursuant to this Consent Decree shall be subject to public inspection unless identified by Solar and deemed confidential by EPA in conformance with 40 C.F.R. Part 2. The information and documents so identified as confidential will be disclosed only in accordance with EPA regulations.

26. This Consent Decree shall not constitute evidence or an admission of any issue of fact or law by either party.

27. The terms of Paragraphs 15 and 18 do not limit other remedies available for violations of this Consent Decree or the Act. ++EP++

Page 11 CONSENT

We hereby consent to the entry of this Consent Decree without further notice.

ROGER J. MARZULLA

Assistant Attorney General

VALERIE ANN LEE

Attorney

Environmental Enforcement Section

Land & Natural Resources Division

U.S. Department of Justice

WILLIAM BRANISS

United States Attorney

Southern District of California

STEVE PETIX

Assistant United States Attorney

Southern District of California

Edward E. Reich

/s/ Ed E. Reich

Acting Assistant Administrator for

Enforcement and Compliance Monitoring

United States Environmental

Protection Agency

2-18-89

DANIEL W. McGOVERN

/s/ Daniel W. McGovern

Regional Administrator

United States Environmental

Protection Agency, Region 9

1-25-89 ++EP++

Page 12

OF COUNSEL:

LUCIA L. BLAKESLEE

Assistant Regional Counsel

United States Environmental

Protection Agency, Region 9

215 Fremont Street, Fifth Floor

San Francisco, CA 94105

RACHEL M. HOPP

Attorney-Advisor

Office of Enforcement and

Compliance Monitoring

United States Environmental

Protection Agency

401 M Street, S.W.

Room 3211B (LE-134A)

Washington, D.C. 20460

ATTORNEYS FOR PLAINTIFF

STEVEN P. McDONALD, ESQ.

/s/ Steven P. McDonald

Dorazio, Barnhorst & Bonar

12/28/88

ATTORNEYS FOR DEFENDANT, SOLAR TURBINES INCORPORATED IT IS SO ORDERED.

UNITED STATES DISTRICT JUDGE ++EP++

CAMPBELL SOUP COMPANY

DOC 01 OF 01

Consent Decree

09-89-C033

CAA

FOOD

19890825

19890825

CAD009198367

CAMPBELL SOUP COMPANY

SACRAMENTO, CA

CIVS87-1272-EJG-EM

09

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

CAMPBELL SOUP COMPANY Defendant.

CIVIL ACTION NO. CIVS-87-1272-EJG-EM

CONSENT DECREE

WHEREAS, the plaintiff United States of America, on behalf of the United States Environmental Protection Agency (EPA), filed a Complaint in this action on September 4, 1987, alleging violations by the Defendant Campbell Soup Company (Campbell) at its Sacramento facility (the Facility) located at 6200 Franklin Boulevard, Sacramento, California, of the Clean Air Act, 42 ++EP++

U.S.C. Section 7401 to 7642 (the Act) and of the California State Implementation Plan (SIP) Sacramento County Air Pollution Control District (SCAPCD) Rule 452, concerning volatile organic compound (VOC) emissions from can coating operations, which is applicable to the Facility, adopted by the State and approved by EPA pursuant to 42 U.S. C. Section 7410, section 110 of the Act; and

Page 2

WHEREAS, Defendant operates numerous can coating lines at its Facility, all of which emit, or have the potential to emit, volatile organic compounds ("VOCs") regulated under Rule 452; and

WHEREAS, on November 6, 1987, Campbell filed an Answer denying EPA's violation allegations and a Counterclaim alleging inter alia, violations of the Clean Air Act, and seeking injunctive relief; and

WHEREAS, Campbell is a New Jersey Corporation doing business in the State of California; and

WHEREAS, the Facility is located in a non-attainment area for the ozone National Ambient Air Quality Standards; and

WHEREAS, the Facility is a major stationary source of volatile organic compounds (VOC) emissions within the meaning of 42 U.S.C. 7602( j), section 302(j) of the Act; and

WHEREAS, Campbell denies that the violations alleged in the Complaint occurred; and

WHEREAS, Campbell has achieved compliance with Rule 452's emission limitations; and

WHEREAS, for the purpose of settling this litigation and to resolve the other outstanding issues recited above, without ++EP++

trial of any issue of fact or law, the parties, by and through their attorneys and authorized representatives, have each consented to and have moved the Court to enter this Consent Decree;

Page 3

NOW, THEREFORE, without trial of any issue of fact or law and upon the consent of the parties, by their attorneys and authorized officials, it is hereby ORDERED, ADJUDGED and DECREED as follows:

JURISDICTION AND VENUE

1. Subject Matter Jurisdiction. a. This Court has jurisdiction of the subject matter of the Complaint and of the parties consenting hereto for the purpose of entering this Consent Decree pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-Section 1331, 1345 and 1355. The Complaint states a claim against Defendant upon which relief can be granted under Section 113 of the Act, 42 U.S.C. Section 7413. The civil claims alleged by the United States in the Complaint include any and all violations of Rule 452, if any, that occurred prior to the date this Decree is signed by the Assistant Attorney General.

2. Venue. Venue is appropriate pursuant to 28 U.S.C. Section 1391( b) and 42 U.S.C. Section 7413(b) because Defendant does business and therefore resides in the Eastern District of California. ++EP++

Page 4 SETTLEMENT IN THE PUBLIC INTEREST

3. Public Interest, Date of Entry. a. The parties to this Consent Decree agree, and the Court finds, that this action has been prosecuted and defended diligently and that settlement of this action without further litigation is in the public interest and is an appropriate means of resolving this action.

b. The parties to this action agree to be bound by the terms and conditions of this Consent Decree upon its entry by the Court.

PERSONS BOUND

4. Persons Bound; Notice to Successors. This Consent Decree shall apply to and be binding upon the parties to this action, and Defendant's officers, directors, divisions, employees, agents, successors in interest, and assigns. For the period during which this Consent Decree is in effect, upon sale or transfer of the Facility, Campbell shall provide such transferee, purchaser, successors or assigns a copy of this Consent Decree. Such transferee shall be bound thereby. Each representative and signatory to this Decree certifies that he or she is fully authorized by the party he or she represents to enter into the terms and conditions of this Consent Decree in his or her capacity as indicated on the signature pages hereof, to execute it and to legally bind the party within the limits of the indicated authority. ++EP++

Page 5 SETTLEMENT IN SATISFACTION

5. a. Defendant's agreement to be bound by the terms and conditions of this Decree, and entry of this Decree, shall be in full settlement and satisfaction of all liability of Defendant for each and every civil claim by the United States alleged in the Complaint, including any and all violations of Rule 452, if any, that occurred prior to the date this Consent Decree is signed by the Assistant Attorney General.

b. Counterclaim Dismissed. To avoid further litigation, Defendant agrees that its counterclaims filed in this matter shall be dismissed with prejudice, effective on the date of entry of this Consent Decree.

COMPLIANCE PROGRAM FOR SACRAMENTO FACILITY

6. Compliance by Defendant. Defendant shall operate in compliance with the requirements of SCAPCD Rule 452 of the federally approved California SIP. Coatings that are cured with ultraviolet light meet the requirements of Rule 452. For the purpose of determining compliance with Rule 452, the VOC content of coatings not cured with ultraviolet light shall be determined by using Test Methods ASTM D-1475-80, ASTM D-2369-73 and ASTM D-3792-79.

7. Information to be Maintained. During the one year period beginning May 1, 1989, Campbell shall maintain records from which the following information can be determined and shall provide such information to EPA upon its written request: ++EP++

Page 6

a. For each and every coating line at the Facility:

i. Type of coating line.

ii. Supplier's name and ID code for each and every coating used on the coating line.

iii. Coating type (e.g. endseal).

iv. The VOC content of each coating delivered by the supplier and the VOC content of each dilution solvent used.

v. Laboratory report sheets showing intermediate results of any VOC analysis that is conducted for Campbell for any coating used at the Facility.

vi. The specific dates on which each coating is applied and the number of gallons of each coating applied on each such date.

vii. The specific dates on which each dilution solvent is used, the number of gallons of each dilution solvent used on each such date, and the coating to which each such dilution solvent is added.

b. In addition, for each and every coating first used at the Facility subsequent to entry of this Decree:

i. The date on which the coating was first used at the Facility.

ii. The purpose and the use of the coating.

8. Information to be Reported.

a. During the one year period beginning May 1, 1989, for each coating used at the Facility, Defendant shall report any coating which fails to comply with Rule 452. Such ++EP++ report shall indicate the VOC content of the coating as applied, as analyzed by an independent laboratory, and the dates on which such coating was used at the Facility. Such report shall be postmarked within 15 days after receipt by Defendant of the results of the VOC content analysis from the independent laboratory.

Page 7

b. In addition, for each coating that is not is use as of the date of entry of the Decree, but which is first used during the one year period subsequent thereto, Defendant shall notify EPA in writing within thirty days after such use commences. Such notice shall include the information specified in paragraph 7b and the VOC content of the coating(s), as applied, as analyzed by an independent laboratory.

PENALTIES

9. Civil Penalty. a. Within thirty (30) days of the date of Campbell's receipt of a fully executed copy of this Consent Decree, Campbell shall pay a civil penalty of ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000).

b. Defendant shall pay the civil penalty provided for under subparagraph a by cashier's or certified check payable to "United States Treasury" and shall submit said payment to: ++EP++

Page 8

CDavid F. Levi

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Attn: Yoshinori H.T. Himel

A copy of the check shall be sent to EPA Region IX at the address indicated in paragraph 18.

c. Entry of this Consent Decree shall constitute written demand for payment of the civil penalty set forth above.

10. Stipulated Penalties. a. If during calendar year 1989, Defendant fails to comply with the obligations set forth in paragraph 6 above, Defendant shall pay a stipulated penalty of $1,500 per day of violation for each of the first seven days of such non-compliance, beginning with the first day of non-compliance and $4,000 per day of violation thereafter.

b. If Defendant fails to comply with the obligations set forth in paragraph 8 above, Defendant shall pay a stipulated penalty of $250 per day of violation for each day such violation continues.

c. Payment of any stipulated penalties provided for herein shall be made within ten (10) days after written demand by Plaintiff to Defendant. Notwithstanding any other provisions in this Consent Decree, Defendant shall have the right to dispute any demand for stipulated penalties based upon Defendant's records. The existence of any such dispute shall not operate in and of itself to toll the accrual of penalties, if any, for which Defendant would otherwise be found responsible. ++EP++

Page 9

d. Payment of a stipulated penalty for any particular incident of noncompliance with the requirements of this Consent Decree shall serve as satisfaction of any civil claim by the United States for monetary relief for such incident. Plaintiff reserves its right to seek all non-monetary and injunctive relief under the Clean Air Act and to seek any and all other relief to which it is entitled.

e. The stipulated penalties provided for herein shall be paid by cashier's or certified check payable to "United States Treasury" and submitted to:

David F. Levi

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Attn: Yoshinori H.T. Himel

A copy of the check shall be sent to EPA Region IX and the Department of Justice at the addresses indicated in paragraph 18.

OTHER GENERAL REQUIREMENTS AND PROVISIONS

11. Inspections. Authorized representatives of U.S. EPA, including contractors, upon presentation of proper credentials, shall have the right to enter upon the premises of the Facility at all reasonable times, accompanied by an authorized Campbell representative if one is reasonably available, to determine compliance with the requirements of this Decree, including the right to inspect and obtain copies of any and all documents required to be submitted or maintained under this Consent Decree, ++EP++

and the right to obtain samples of coatings used at the Sacramento Facility.

Page 10

This right of entry and access shall be in addition to, and in no way limits, U.S. EPA's right of entry and access under federal law, including 42 U.S.C. Section 7414, section 114 of the Act.

12. Force Majeure. a. If the parties agree that the delay or anticipated delay in compliance with any requirement of this Decree has been or will be caused by circumstances entirely beyond the control of Campbell, the time for performance hereunder may be extended by Order of the Court for a period no longer than the delay resulting from such circumstances. In such event, the parties shall stipulate to such extension of time and so inform the Court. In the event the parties cannot agree, then any party may submit the matter to the Court for resolution.

b. The burden of proving that any delay is caused by circumstances entirely beyond the control of Campbell shall rest with Campbell. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree or changed financial circumstances of the Defendant shall not, in any event, be a basis for changes in this Consent Decree or extensions of time under this Paragraph. For the purpose of this Paragraph, "delay" or "delays" means "delay or interruption" or "delays or interruptions."

13. Reservation of Rights. Nothing contained in this Consent Decree shall be construed to limit or affect the rights ++EP++

of the parties under any applicable federal or state statute except as expressly stated herein.

Page 11

14. Other Legal Requirements. Nothing herein shall constitute a permit of any kind under state, local or federal law, or, except as expressly provided herein, alter, limit or revoke local, state or federal laws or regulations or affect the authority of the United States to seek enforcement of this Decree or relief pursuant to 42 U.S. C. Section 7603, section 303 of the Act, or otherwise immunize Defendant from violations of other applicable law. This Decree shall not affect Defendant's responsibility henceforth to comply with any and all applicable federal, state and local laws and regulations.

15. Retention of Jurisdiction. This Court shall retain jurisdiction for the purpose of construing and enforcing this Consent Decree until six months after the termination of the obligations hereunder, as provided for in paragraph 21; provided, however, that if an action is initiated during that period, the Court shall retain jurisdiction until its conclusion.

16. Transfer of Interest. Defendant shall promptly notify Plaintiff by registered mail upon sale or transfer of the Facility and confirm that it provided a copy of the Consent Decree to the transferee prior to the date of transfer.

17. Alternate Compliance. In addition to the specific provisions for compliance contained in Rule 452, Defendant shall have the right to achieve compliance with any obligation set forth in paragraphs 6 and 8 above with respect to any emission ++EP++ source, by ceasing to operate such source.

Page 12

Defendant shall not thereafter start up such source unless and until it is in compliance with Rule 452 as well as any and all federal, state or local requirements that may be applicable to Campbell.

18. Communications and Notifications. All written notices, correspondence and communications under this Consent Decree, including information to be provided pursuant to paragraph 8 above, except as otherwise provided herein, shall be given by first class mail, postage prepaid, to the parties at the following addresses:

For Plaintiff United States:

Notices shall be sent to both:

United States Environmental

Protection Agency,

Region IX

Air Enforcement Branch Chief

215 Fremont Street

San Francisco, CA 94105

Robert H. Foster

U.S. Department of Justice

Environmental Enforcement Section

Land and Natural Resources

Division

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

For Defendant Campbell Soup

Company

Notices shall be sent to both:

Campbell Soup Company

Campbell Place

Camden, New Jersey 08103-1799

Attention: General Counsel

William H. Lewis, Jr.

Morgan, Lewis & Bockius

1800 M Street, N.W.

Washington, D.C. 20036 ++EP++

Page 13

Andrew M. White

Christensen, White, Miller, Fink

& Jacobs

2121 Avenue of the Stars, Suite

1800

Los Angeles, CA 90067

All such notices, correspondence, information, and communications submitted pursuant to paragraph 8 above shall be signed and affirmed to by an individual with appropriate authority and responsibility.

19. Integration. This Consent Decree contains the entire agreement of the parties and shall not be modified by any prior oral or written agreement, representation or understanding. This Consent Decree may not be amended except by agreement of the parties and written Order of this Court.

20. Costs. Each party agrees to pay its own costs and attorneys fees in this action to the date of the Court's entry of this Consent Decree.

21. Termination. The obligations imposed by this Consent Decree shall expire one year from the date of its entry by the Court, or if any stipulated penalties have become due and have not been paid at the end of that year, at such time as those stipulated penalties are paid.

22. Final Approval. The parties agree and acknowledge that final approval by the United States and entry of this Decree is subject to the requirements of 28 C.F.R. Section 50.7, which provides for public notice and an opportunity for public comment. ++EP++

Page 14 CONSENTED TO AND APPROVED FOR ENTRY:

FOR CAMPBELL SOUP COMPANY

/s/ A Lee Lundy Jr

A. LEE LUNDY, JR.

Vice President and General

Counsel

On Behalf Of Campbell Soup

Company

FOR THE UNITED STATES OF AMERICA

/s/ Donald A Carr

DONALD A. CARR

Acting Assistant Attorney General

Land and Natural Resources

Division

U.S. Department of Justice

On Behalf Of The United States

Government

/s/

ROBERT H. FOSTER

Trial Attorney

Land and Natural Resources

Division

U.S. Department of Justice

DAVID F. LEVI

United States Attorney

Eastern District of California

/s/

YOSHINORI H.T. HIMEL

Assistant United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95804

++EP++

Page 15

/s/ Daniel S. Goodman

DANIEL S. GOODMAN

Trial Attorney

Land and Natural Resources

Division

U.S. Department of Justice

/s/

EDWARD L. REICH

Acting Assistant Administrator

Office of Enforcement and

Compliance Monitoring

U.S. Environmental Protection

Agency

Washington, D.C. 20426

/s/ Daniel W McGovern

DANIEL W. McGOVERN

Regional Administrator

U.S. Environmental Protection

Agency Region IX

215 Fremont Street

San Francisco, California 94105

++EP++

Page 16

THIS CONSENT DECREE approved and entered in accordance with the foregoing on this 25th day of Aug. 1989.

/s/

Edward J. Garcia

District Court Judge

United States District Judge

++EP++

KENNECOTT CORPORATION

DOC 01 OF 01

CONSENT DECREE

09-89-C024

CAA

MISC

19890620

19890620

NVD982059248

KENNECOTT HEATING PLANT

RUTH, NV

CV-N-8851-BRT

09

Page 2 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA RENO DIVISION

UNITED STATES OF AMERICA, Plaintiff,

v.

COUNTY OF WHITE PINE, NEVADA, AND KENNECOTT CORPORATION, Defendants.

Civil No. CV-N-88-51-BRT

CONSENT DECREE

WHEREAS, the plaintiff, United States of America, filed a Complaint in this action on January 25, 1988, on behalf of the United States Environmental Protection Agency ("EPA"), alleging violations by the defendants, County of White Pine, Nevada ("County") and Kennecott Corporation ("Kennecott" or "Corporation") of Sections 112 and 114 of the Clean Air Act (the "Act"), 42 U.S.C. Sub-section 7412 and 7414, respectively, and the National Emissions Standards for Hazardous Air Pollutants ("NESHAP") for asbestos, 40 C.F.R. Part 61, including Subpart M, in demolishing the building known as the Kennecott Heating Plant ("Heating Plant") located in Ruth, Nevada; and

WHEREAS, the County, a Nevada State governmental entity, is a "municipality" as that term is defined in Section 302(f) of the act, 42 U.S.C. Section 7602(f), and is a "person" as that term is defined in Section 302(e) of the Act, 42 U.S.C. Section 7602 (e); and

WHEREAS, Kennecott is a corporation organized under the laws of the State of Delaware, with its headquarters in Salt Lake City, Utah, duly authorized to do business in, and is doing ++EP++ business in, the District of Nevada, and is a "person" within the meaning of Section 302(e) of the Clean Air Act. 42 U.S.C. Section 7602 (e); and

Page 3

WHEREAS, neither the County nor Kennecott admit or deny that they have committed any of the violations alleged in the United States' Complaint, but to settle the disputes arising from said Complaint without litigation, both defendants agree not to contest the jurisdictional allegations contained in the Complaint and agree to the terms and entry of this Consent Decree; and

WHEREAS, the United States, the County and Kennecott all agree, and the Court finds, that this settlement is in the public interest, and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter with regard to all parties; and

WHEREAS, for the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree; THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Art, 42 U.S.C. ++EP++ Section 7413(b), and 28 U.S.C. Sub-section 1331, 1345 and 1355. The Complaint states a claim upon which relief may be granted against the County and Kennecott pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413 (b).

Page 4

2. The Court has personal jurisdiction over the defendants, and venue is proper in this District pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-section 1391 and 1395. The defendants waive all objections to the Court's jurisdiction and venue, and agree not to contest the validity of jurisdiction or venue in any subsequent proceeding that may arise in this matter.

3. The parties to this Consent Decree agree, and the Court finds, that this action and this Consent Decree constitute diligent prosecution of the Act with respect to the claims alleged in the Complaint herein.

4. Except where a different date is specified herein, the defendants agree to be bound by the terms and conditions of this Consent Decree upon its lodging with the Court.

II PARTIES BOUND

5. Upon execution, the provisions of this Consent Decree shall apply to and be binding upon the parties hereto, their respective elected and appointed officials, officers, directors, agents, servants, employees, successors, assigns and attorneys, and upon all those persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), firms or corporations acting ++EP++ under, through, or for them, or in active concert or participation with them.

Page 5

6. Both the County and Kennecott shall, within ten (10) days of the entry of this Consent Decree, and as appropriate thereafter, give copies of the Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph 5 who are responsible for ensuring or affecting compliance with this Consent Decree, and to any successor in interest and/or assign to property governed by or the subject of this Consent Decree prior to the transfer of said property. Both the County and Kennecott shall provide to EPA's Region IX office a copy of the summary and a list of the names and addresses of all its recipients within five (5) working days after the date(s) of such notice(s).

III COMPLIANCE OBJECTIVES

7. The purposes of this Consent Decree are to ensure the continuing compliance of the County and Kennecott with the NESHAP for asbestos, and to provide for the payment by the County and Kennecott of civil penalties for past alleged violations of the NESHAP for asbestos and the regulations promulgated thereunder, as set forth by the United States in the Complaint.

IV CIVIL PENALTIES

8. County. Within thirty (30) days of entry of this ++EP++ Consent Decree, the County shall pay a civil penalty in the amount of SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) to the United States in satisfaction of the civil claims of the United States for the County's alleged past violations of the Act as set forth in the Complaint in this matter.

Page 6

Payment shall be made and tendered in the manner set forth in paragraph 10 below. Entry of this Consent Decree shall constitute written demand for payment of the civil penalty set forth in this paragraph.

9. Kennecott. Within thirty (30) days of entry of this Consent Decree, Kennecott shall pay a civil penalty in the amount of THIRTY-THREE THOUSAND TWO HUNDRED AND TWENTY DOLLARS ($33,220.00) to the United States in satisfaction of the civil claims of the United States for Kennecott's alleged past violations of the Act as set forth in the Complaint in this matter. Payment shall be made and tendered in the manner set forth in paragraph 10 below. Entry of this Consent Decree shall constitute written demand for payment of the civil penalty set forth in this paragraph.

10. The penalties owed under this Consent Decree shall be paid by the respective defendants by cashier's check payable to "Treasurer, United States of America", and shall be tendered to:

United States Attorney District of Nevada 300 Booth Street, Room 2032 Reno, Nevada 89509

Within three (3) days of such payment, each respective defendant shall notify EPA and the Department of Justice in writing at their respective addresses, which appear below, that payment has ++EP++ been made, and shall include with said written notice a photocopy of the cashier's check:

Page 7

Director, Air Management Division U.S. Environmental Protection Agency, Region IX 215 Fremont Street San Francisco, California 94105 Steven B. Moores United States Department of Justice Land and Natural Resources Division Environmental Enforcement Section 100 Van Ness Avenue, 22nd Floor San Francisco, California 94102

11. Penalties paid by the defendants pursuant to this Consent Decree are not a deductible expense of any kind for the purpose of federal, state, or local taxes.

V INJUNCTIVE RELIEF

12. The County and Kennecott are permanently enjoined from violations of Sections 112(c), 112(e), and 114(a) (1) (B), of the Act, 42 U.S.C. Sub-section 7412(c), 7412(e), and 7414 (a) (1) (B), respectively, and of the NESHAP for asbestos.

13. Within thirty (30) days of entry of this Consent Decree, Kennecott and the County together shall:

(1) identify at least two (2) appropriate County employees to receive training in asbestos identification, removal techniques and worker safety through an EPA approved training program described below; and

(2) identify and select an EPA approved training program of at least four (4) days duration, to be paid for by Kennecott, into which the employees identified in (1) above shall be enrolled; or

(3) as an alternative to (2) above, identify and engage an instructor, who has been certified by the ++EP++ EPA, to provide an "in-house" asbestos workshop of at least four (4) days duration, to be paid for by Kennecott, which addresses the subjects and requirements set forth in Paragraph 15, below.

Page 8

14. The four (4) day training program required by paragraph 13, above, shall be fully funded by Kennecott Corporation, and shall, at a minimum, provide education to County employees pertaining to identification of asbestos material, the hazardous nature of asbestos, the requirements of federal, state, and local statutes, ordinances, rules and regulations, (including, but not limited to the work practices mandated by 40 C.F.R. Sub-section 61.147 and 61.152), the health effects of exposure to asbestos without adequate protection, and accepted means of worker protection from exposure to asbestos, and shall generally comply with the training and education regulations promulgated under the Asbestos Hazard Emergency Response Act ("AHERA").

VI MISCELLANEOUS

15. Reservation of Rights. The parties agree that nothing in this Consent Decree is intended to limit or waive any claims or other remedies the United States may have against the defendants for violation of the Act, 42 U.S.C. Section 7401, et seq., or the asbestos NESHAP, 40 C.F.R. Part 61. Entry of this Consent Decree and compliance with its terms shall be in full settlement and satisfaction of the civil claims of the United states against each defendant, as alleged in the Complaint.

16. Compliance With Other Laws. This Consent Decree shall be in full settlement and satisfaction only of the action filed ++EP++ herein, and in no way affects or relieves Kennecott or the County of responsibility for compliance with any and all federal, state and local laws and regulations.

Page 9

17. Modifications. Any modification of this Consent Decree must be in writing and approved by the Court. Nothing in this paragraph shall be construed to confer upon the Court jurisdiction not otherwise provided by law, nor shall it be construed to relieve any party from pursuing the procedures provided for by the Act or the asbestos NESHAP for administrative and judicial review before seeking a modification of this Consent Decree.

18. Retention of Jurisdiction. The Court shall retain jurisdiction for a period of two years after its entry for the purposes of interpreting, implementing, modifying and enforcing the terms and conditions of this Consent Decree to resolve disputes arising hereunder, and to take any action necessary or appropriate for its construction or execution.

19. Costs and Fees. The parties to this action shall bear their own Court costs, attorney's fees, and disbursements.

20. The parties to this action consent to entry of this Decree, subject to the public notice requirements of 28 C.F.R. Section 50.7, which provides that the public be given notice of proposed Decrees and thirty (30) days within which to comment thereon.

VII CONSENT ++EP++ Page 10

We hereby consent to entry of this Decree without further notice. FOR THE UNITED STATES OF AMERICA, Plaintiff,

By: /s/ Donald Carr

Donald Alan Carr

Acting Assistant Attorney General

Land and Natural Resources

Division

United States Department of

Justice

Washington, D.C. 20530

By: /s/

STEVEN B. MOORES

Environmental Enforcement Section

Land and Natural Resources

Division

United States Department of

Justice

100 Van Ness Avenue, 22nd Floor

San Francisco, California 94102

By: /s/

WILLIAM MADDOX

United States Attorney

District of Nevada

By: /s/

EDWARD E. REICH

Acting Assistant Administrator

for Enforcement

Compliance Monitoring

U.S. Environmental Protection

Agency

401 M Street, S.W.

Washington, D.C. 20460

By: /s/

DANIEL W. MCGOVERN

Regional Administrator ++EP++

Page 11

U.S. Environmental Protection

Agency, Region IX

215 Fremont Street

San Francisco, California 94105

OF COUNSEL:

LUCIA BLAKESLEE

U.S. Environmental Protection

Agency

Region IX

215 Fremont Street

San Francisco, California 94105

FOR THE COUNTY OF WHITE PINE,

Defendant,

By: /s/ Dan L. Papez

DANIEL L. PAPEZ

District Attorney

County of White Pine

Post Office Box 240

Ely, Nevada 89301

FOR KENNECOTT CORPORATION,

Defendant,

By: /s/ Jack L. Litmer

JACK L. LITMER

BP America, Incorporated

200 Public Square 39-5300-B

Cleveland, Ohio 44114-2375

Approved and judgement entered in accordance with the foregoing Consent Decree in Reno, Nevada, this 12th day of June 1988:

/s/ Bruce R. Thompson

UNITED STATES DISTRICT JUDGE

Hon. Bruce R. Thompson ++EP++

SHELL OIL COMPANY

DOC 01 of 01

Consent Degree

09-89-C023

CAA

CHEM

19890106

19890205

CAD066676123

WILMINGTON MANUFACTURING CO.

CARSON, CA

88-5010-ER

09

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

SHELL OIL COMPANY, Defendant.

CIVIL NO. C-84-6941 EFL

CONSENT DECREE

A Complaint was filed on October 29, 1984 by plaintiff United States of America by authority of the Attorney General of the United States and at the request of the U.S. Environmental Protection Agency ("EPA") against defendant Shell Oil Company ("Shell"). The plaintiff asserts, but the defendant will not challenge here for purposes of this proceeding, that three types of spent catalyst from Shell's Martinez Refinery are subject to EPA sampling pursuant to Section 3008 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6928. The entry of this Consent Decree does not constitute an admission by either party as to any legal issue raised in this action. The parties ++EP++

acknowledge that this document may not be used as evidence in any legal proceeding other than this action.

Page 2

The parties, by their respective attorneys, consent without trial or adjudication of any issue of fact or law with respect to plaintiff's claim for injunctive and declaratory relief to the entry of this decree to resolve the controversy between them.

NOW THEREFORE, before the taking of any testimony, without any adjudication of the merits with respect to plaintiff's claim for injunctive and declaratory relief and upon the consent of the parties,

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

I.

This Court has jurisdiction of the subject matter of this action and of the parties consenting hereto. The Complaint states a claim upon which relief may be granted against defendant pursuant to Section 3008 of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6928. Nothing in this provision shall operate as a waiver of Shell's right to contest the sufficiency of a complaint based on Section 3008 of RCRA in any legal proceeding other than this civil action.

II.

It is the intent of this decree to have EPA present, as provided in Sections V and VI below, at Shell's ++EP++

Martinez, California facility and to observe, take samples and/or take custody of samples, as specified below, of the FCCU hydrorefining catalyst and the lube oil hydrotreating catalyst ("lube catalyst") /2/ when those catalyst are partially removed and/or totally replaced.

Page 3

((/1/ The term EPA, as used in this Decree, refers to EPA, its employees, agents, representatives, attorneys or assigns.))

((/2/ The lube catalyst is also referred to as the LHT catalyst.))

III.

The provisions of this Consent Decree shall apply to and be binding upon the parties hereto, their respective officials, directors, agents, attorneys, representatives or assigns, and all persons in active concert or participatation with them.

IV.

Shell currently plans to partially remove or totally replace the FCCU hydrorefining catalyst in March, 1985, and the lube catalyst in June, 1985, at its Martinez Refinery. At or about those times Shell will determine whether the respective catalyst is spent and needs to be replaced or whether it remains active and useful. When carrying out these plans, Shell will follow the same practices it has used in the past for unloading catalyst at the Martinez facility. If Shell determines that the catalyst is spent, it normally unloads the reactor and totally replaces that catalyst. If not spent, then Shell can postpone total replacement, leave that catalyst in place and reactivate the reactor. If total replacement is postponed, Shell will nevertheless remove some material from the reactor. ++EP++

Page 4 V.

At the time of partial removal or total replacement of the FCCU hydrorefining catalyst, EPA shall be given the opportunity to be present and allowed to observe Shell's removal of any material and/or the catalyst from the reactor. Shell will take and preserve a split samples of the material and/or catalyst that it removes from the reactor. If Shell determines that the catalyst will not be totally replaced on or about March, 1985, then EPA will be given custody of the split sample for analysis. When Shell determines that the FCCU hydrorefining catalyst is spent, whether in March, 1985, or some date thereafter, in accordance with Part IX of this Decree, EPA shall be allowed the opportunity to be present and observe the unloading of the spent catalyst and shall be allowed the opportunity to take a representative sample of the spent FCCU hydrorefining catalyst at a point specified by EPA during the unloading process. Shell will give EPA reasonable notice prior to the time of partial removal or total replacement of the FCCU hydrorefining catalyst so that EPA may be present to observe, take samples, and/or take custody of samples. Shell will promptly notify EPA of any variations or modifications in the schedule for partial removal or total replacement of said catalyst.

VI.

At the time of partial removal or total replacement of the lube catalyst, EPA shall be given the opportunity to be present and allowed to observe Shell's removal of any material ++EP++ and/or the catalyst from the reactor.

Page 5

Shell will take and preserve a split sample of the material and/or catalyst that it removes from the reactor. If Shell determines that the catalyst will not be totally replaced on or about June, 1985, then EPA will be given custody of the split sample for analysis. When Shell determines that the lube catalyst is spent, whether in June, 1985, or some date thereafter, in accordance with Part IX of this Decree, EPA shall be allowed the opportunity to be present and observe the unloading of the spent catalyst and shall be allowed the opportunity to take a representative sample of the spent lube catalyst at a point specified by EPA during the unloading process. Shell will give EPA reasonable notice prior to the time of partial removal or total replacement of the lube catalyst so that EPA may be present to observe, take samples, and/or take custody of samples. Shell will promptly notify EPA of any variations or modifications in the schedule for partial removal or total replacement of said catalyst.

VII.

EPA will treat as confidential all information received from Shell which is entitled to such treatment under the applicable statutes and regulations.

VIII.

Jurisdiction is retained by this Court for the purpose of enabling any party to this Decree to apply to this Court at any time for such further order and directions as may be necessary or appropriate for the interpretation and enforcement ++EP++

of this Decree or for such other and further proceedings as this Court may deem appropriate.

Page 6 IX.

This Decree and the jurisdiction of this Court over this matter shall terminate sixty (60) days after the last of the two catalysts is totally replaced or upon completion of the EPA's Refinery Industry Study, whichever occurs first. The EPA shall notify Shell, in writing, upon completion of the Refinery Industry Study. Said notice shall be given within a reasonable time after completion of said study.

Dated: 4, 1985

EUGENE F. LYNCH

JUDGE, U.S. DISTRICT COURT

We hereby consent to the entry of this Consent Decree without further notice.

Dated: 1/4/85

/s/

F. HENRY HABICHT II

Assistant Attorney General

Lands and Natural Resources Division

U.S. Department of Justice

Washington, D.C.

Dated: 12-27-84

/s/ Courtney M. Price

COURTNEY M. PRICE

Assistant Administrator

Office of Enforcement & Compliance Monitoring

U.S. Environmental Protection Agency

Washington, D.C. ++EP++

Page 7

Dated: 1-21-85

JOSEPH P. RUSSONIELLO

United States Attorney

Northern District of California

by: /s/ Charles M. O'Connor

CHARLES M. O'CONNOR

Assistant United States Attorney

Dated: 1/2/85

/s/ Cynthia S. Huber

CYNTHIA S. HUBER

Environmental Enforcement Section

U.S. Department of Justice

Attorneys for Plaintiff

Dated: 12/13/84

SHELL OIL COMPANY

by: /s/ Jose A. Berlanga

JOSE A. BERLANGA

Attorney for Defendant ++EP++

P.W. STEPHENS CONTRACTORS, INC

Doc 01 of 01

Consent Decree (partially illegible)

09-89-C022

CAA

OTHER

19890616

19890616

CAD981418270

P.W. STEPHENS CONTRACTORS, INC

SOUTH EL MON, CA

87-4613-JGD(TX)

09

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

vs.

P.W. STEPHENS CONTRACTORS, INC., Defendant.

No. CV 87-4613-JGD(Tx)

CONSENT DECREE ++EP++

Page 2

WHEREAS, the Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint alleging violations of the National Emission Standard for Hazardous Air Pollutants ("NESHAP") for asbestos, 40 C.F.R. Sub-section 61.146(b) (1) and (b) (4), and the Clean Air Act, 42 U.S.C. Sub-section 7412(c), 7413(a), and 7414 ("the Act") and requesting permanent injunctive relief and civil penalties;

WHEREAS, P.W. Stephens Contractors, Incorporated ("Stephens"), is a California corporation doing business in various states, including California and Hawaii, where the alleged violations occurred; and

WHEREAS, Stephens disputes the allegations of the Complaint filed by the United States and denies that it violated the Act or the asbestos NESHAP, but to settle the disputes arising from the Complaint in this action without litigation, Stephens agrees not to contest the jurisdiction allegations contained in the Complaint and agrees to the terms and entry of this Consent Decree; and

WHEREAS Plaintiff and Defendant, having agreed that settlement of this action is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this action and thus avoiding protracted litigation costs and expenses;

NOW THEREFORE, upon consent and agreement of the parties to this Consent Decree, it is hereby Ordered, Adjudged, and Decreed as follows: ++EP++

Page 3 JURISDICTION AND VENUE

1. Subject Matter Jurisdiction. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Sub-section 1341, 1345, and 1355, and Section 113(b) of the Act, 42 U.S.C. Section 7413(b). Notice of the commencement of this action has been given to the appropriate state and local air pollution control agencies as required by 42 U.S.C. Section 7413(b). The Plaintiff's Complaint states a claim upon which relief may be granted against the Defendant under the Act and the asbestos NESHAP.

2. Personal jurisdiction and venue. The Court has personal jurisdiction over Stephens, and venue is proper in this Court. Stephens waives any objections it might have to the Court's personal jurisdiction and to venue, and agrees to be bound by the terms of this Consent Decree and not to contest its validity in any subsequent proceeding.

DEFINITIONS AND PARTIES

3. "Defendant" shall mean P.W. Stephens Contractors, Inc.

4. "Plaintiff" shall mean United States of America and the United States Environmental Protection Agency.

5. Terms used in this Consent Decree are defined in 42 U.S.C. Section 7412(a), 42 U.S.C. Section 7602, 40 C.F.R. Section 61.02, and 40 C.F.R. Section 61.141.

6. Defendant is a "person" within the meaning of Section 302(e) of the Clean Air Act, 42 U.S.C. Section 7602(e).

7. "Postal Service" means the United States Post Office.++EP++

Page 4 APPLICABILITY

8. Each undersigned representative of each party of this Consent Decree certifies that he or she is fully authorized by each party whom he or she represents to enter into the terms and conditions of this Consent Decree and to execute and legally bind that party to it.

9. The provisions of this Consent Decree shall apply to and be binding upon the Defendant, as well its officers, directors, successors, and assigns. The Defendant shall be responsible for insuring compliance by its agents, servants, and employees with the provisions of this Consent Decree.

10. Defendant shall educate those employees, agents, and servants who are responsible for providing notification to EPA of renovation activities of the provisions of this Consent Decree and the asbestos NESHAP.

11. The provisions of this Consent Decree shall apply to Defendant's renovations or demolitions or both, in all states, territories, and possessions of the United States of America.

12. The provisions of this Consent Decree shall apply to and be binding upon Plaintiff.

ALLEGATIONS

13. Plaintiff alleged that Defendant engaged in demolition and renovation activities within the meaning of the asbestos NESHAP in California and Hawaii. These activities involved the removal or stripping or both of friable asbestos material as defined in 40 C.F.R. Section 61.141.

14. Plaintiff alleged that the renovation and ++EP++ demolition operations alleged in Plaintiff's Complaint included the removal or stripping of quantities of friable asbestos material in excess of 160 square feet or in excess of 260 linear feet at each facility, and therefore, the operations were subject to the asbestos NESHAP.

Page 5

15. Plaintiff also alleged in its Complaint that Defendant violated the written notice requirements set forth in 40 C.F.R. Sub-section 61.146(b) (1) and (b) (4), and also violated 42 U.S.C. Sub-section 7412, 7413(a) (3), and 7414 by failing to comply with written notification requirements set forth in an EPA Administrative Order dated March 14, 1986.

16. Defendant, in its Answer, denied the allegations referred to in Paragraphs 13, 14, and 15, above.

COMPLIANCE

17. Stephens agrees that, from the date of lodging of this Consent Decree, it will implement changes in its notification procedures such that written notification of any planned demolition or renovation of a facility containing asbestos materials is postmarked by the Postal Service in accordance with the requirements of the asbestos NESHAP and this Consent Decree.

18. The notification provisions of this Consent Decree are in addition to and not in substitution of the notification provisions of 40 C.F.R. Section 61.146.

19. When submitting written notifications (hereinafter referred to as "asbestos notifications") for demolition or renovation operations as required by the asbestos NESHAP and this Consent Decree, Defendant shall use the form ++EP++ attached to this Consent Decree as Exhibit A (hereinafter referred to as "the Form").

Page 6

For each asbestos notification, except as specified in this Consent Decree, the form shall be accurately completed in accordance with the instructions attached hereto as Exhibit B.

20. Each asbestos notification shall include a project job number in the space provided on the form.

21. For any particular renovation or demolition project, if the procedures used to comply with 40 C.F.R. Sub-section 61.147 and 61.152 are not accurately described by the statement in paragraph 8 of Exhibit A, then it is the responsibility of Stephens to correct the statement in paragraph 8 of Exhibit A.

22. Any notification form sent to EPA pursuant to this Consent Decree, see Exhibit A, may be modified by the Defendant to the extent that the address of the appropriate local air quality management district may be included, the address of the appropriate department of occupational safety and health may be included, and the address of the Defendant may be changed.

23. Each asbestos notification shall include a scheduled project start date, which is the day the Defendant or anyone working on behalf of the Defendant physically begins preparation at the job location for removal of asbestos material. For the purposes of asbestos notification, physical preparation for removal of asbestos materials shall not include inspection of the job site by the Defendant for the purpose of compiling a bid or job estimate. 24. Each asbestos notification shall include a ++EP++ scheduled project completion date, which is the day when Defendant completes all work related to asbestos removal at the renovation or demolition project site.

Page 7

25. Asbestos notification of operations described in 40 C.F.R. Section 61.145(a) must be delivered to the EPA or to the Postal Service for mailing at least ten (10) days before the project start date.

26. Asbestos notifications for operations described in 40 C.F.R. Section 61.145 (b) must be delivered to the EPA or to the Postal Service for mailing at least twenty (20) days before the project start date.

27. Asbestos notification of renovations must be delivered (a) to the EPA prior to the scheduled start date (delivery by telecopy is permissible) or (b) to the Postal Service for mailing at least three (3) days before the scheduled project start date.

28. In the case of a facility being demolished pursuant to the order of a federal, state, or local governmental agency, issued because the facility is structurally unsound and in danger of imminent collapse, Stephens shall send written notification of the demolition of such facility to the appropriate EPA Regional Office, and the appropriate state or local air pollution control authorities, at least three (3) days before the project start date, and shall include with such notification: (1) a copy of the order pursuant to which the demolition is being conducted, and (2) recitation of the name, title, address, and authority of the state or local official who ordered the demolition. ++EP++

Page 8

29. If an asbestos notification is delivered to the Postal Service for mailing, the postage cancellation mark ("postmark") placed upon the notification's envelope by the Postal Service (and not the Postage Meter mark) will be considered the date upon which the notification was delivered to the Postal Service for mailing. Defendant shall bear no responsibility for failure of the Postal Service to postmark an envelope.

30. In the event that the scheduled project start date changes by at least three (3) days or in the event that any information contained in an asbestos notification previously sent or delivered to EPA is rendered materially incorrect for any reason, Stephens must notify EPA of the correct information and identify the job number of the form upon which the incorrect information was submitted. New information shall be provided on the appropriate portions of the form attached hereto as Exhibit C. Information for which Stephens must provide EPA with corrected notification includes, but is not limited to, the amount of asbestos and the scheduled project start date.

31. If any notification is sent to EPA via certified mail, the certified mail sticker shall not be placed in an area normally reserved for the postmark.

32. If any notification provisions in the Code of Federal Regulations or the United States Code are implemented after the date of entry by the Court of this Consent Decree, and such provisions contradict the terms of this Consent Decree, then the affected terms of this Consent Decree, then the affected terms of this Consent Decree shall be considered superseded. ++EP++

Page 9

33. Each notification required to be sent to EPA by this Consent Decree shall also be sent to the appropriate delegated state or local air pollution control agency.

CIVIL PENALTY

34. Defendant shall pay a total civil penalty payment of One hundred twenty-five thousand dollars ($ 125,000) in five (5) payments, together with interest on the unpaid balance, by cashier's or certified check payable to "Treasurer, United States of America" and sent by registered mail to the address below:

United States Attorney Central District of California 1100 United States Courthouse 312 North Spring Street Los Angeles, California 90012 (Attn:Bonnie MacNaughton)

Payment shall be made by the Defendant according to the following schedule:

a. Twenty-five thousand dollars ($ 25,000) shall be paid by certified or cashier's check within ten (10) days of notification of entry of a Consent Decree by the court in this action;

b. Four (4) equal payments of twenty-five thousand dollars ($ 25,000) shall be due and payable at three (3) month intervals measured from the date of the initial payment discussed in subparagraph (a) above;

c. Pursuant to 28 U.S.C. Section 1961, interest shall be paid by the Defendant on the unpaid balance of the civil penalty from the date of entry of the Consent Decree by the Court in this action. ++EP++

Page 10

Within three (3) days of payment of the civil penalty by systems, the Defendant shall notify EPA and the Department of Justice in writing that payment has been made, and shall include with said written notice a photocopy of the certificied or cashier+s check. Notice to EPA that payment has been made shall be sent to:

George Hays EPA, Region IX 215 Premont, 5th Floor San Francisco, California 94105

Notice to the Department of Justice shall be sent to:

Steven B. Moores Department of Justice 100 Van Ness Avenue, 22nd Floor

San Francisco, California 94102Upon final entry of this Consent Decree, the United States shall be deemed a judgement creditor for purposes of enforcement of this Consent Decree.

ACCELERATION OF PAYMENTS

35. If the Defendant, (1) fails to make any payment in the time specified under this Concent decree, or (2) files a voluntary petition of bankruptcy under the Bankruptcy Code of the United States, or (3) is voluntarily or involuntarily adjusted as bankrupt under such code, or (4) is the subject of a petition filed in federal or state court for the appointment of a trustee or receiver in bankruptcy or insolvency, or (5) makes a general assignment for the benefit of creditors, then on the occurance of any such conditions, at the option of the United States, the entire balance of the Principal amount of civil penalty, together with all accrued interest at the rate specifiecd above in ++EP++ Paragraph 34 of this Concent Decree, shall become immediately due and payable.

Page 11

Defendant shall also be liable for attorneys+ fees and costs incurred by the United States as a result of the implementation of this

acceleration provision.36. Within five (5) business days after( ILLEGIBLE)becomes aware of an occurrance of any of the events or conditions described in paragraph 35, avove, the Defendant shall give immediate notice of such event or condition to the:

United States Attorney for the Central District of california 1100 U.S. Courthouse 312 North Spring Street Los Angeles, California 90012 (Attn: Bonnie MacNaughton) and to the EPA at: United States Environmental Protection Agency Office of Regional Counsel 125 Premont Street San Francisco, California 94105 (Attn: George Hays)

by certified first class mail, postage prepaid.

INJUNCTIVE RELIEF

37. Defendant shall comply with the requirements of and be enjoined for three (3) years from violations of National Emission Standards for Hazardous Air Pollutants (NESHAP) for asbestos in 40 C.F.R. Sub-section 61.146(b)(1) and (b)(4).

TERMINATION

38. This Consent Decree shall terminate twenty-one (21) months from the date of its entry, provided the Defendant has complied with the payment schedule set forth in paragraph 34.

39. The Court will retain jurisdiction over this matter to enforce the provisions of this Consent Decree. ++EP++

Page 12 PUBLIC NOTICE

(ILLEGIBLE) ++EP++

Page 13

(ILLEGIBLE) ++EP++

EXHIBIT A ++EP++ Page 14 ASBESTOS DEMOLITION/RENOVATION NOTIFICATION

MAIL TO:

ASBESTOS NOTIFICATION

EPA/NESHAPS Region IX 215 Fremont Street A-3-3 San Francisco, CA 94150 Cal/OSHA 6150 Van Nuys Boulevard Suite 405 Van Nuys, CA 91401 Attention, District Manager SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 9150 East Flair Drive El Monte, CA 91731 Attention Hazardous Waste Unit DATE: PROJECT JOB Please check one: Renovation Demolition requiring 10 day notice Demolition requiring 20 day notice EPA USE ONLY Date Rec Pstmrk School Del/ND ADQTE? Code : Doc : (ILLEGIBLE) W. STEPHENS CONTRACTORS, INC. ADDRESS 727 SOUTH NINTH AVE. CITY: CITY OF INDUSTRY STATE: CA ZIP: 91745 PHONE: (818) 330-7221 CAL/CSHA REGISTRATION 9 3. FACILITY NAME: STREET ADDRESS: CITY: COUNTY: MAJOR CROSS STREETS: STATE: ZIP: 2. OWNER: ADDRESS: CITY: ZIP: PHONE: STATE:

4. FACILITY DESCRIPTION: AGE: SIZE: PRIOR USE:

5. Scheduled Project Start Date: Schedule Completion Date:

6. Estimate Friable/Asbestos: ON PIPE: Linear Feet SURFACE OF OTHER COMPONENTS: Square Feet Nature of Materials:

7.DESCRIBE METHODS OF REMOVAL:

8. PROCEDURES USED TO COMPLY WITH 40 CFR 61.147 & 152: Material removed wet in small sections and cleaned up promptly. Waste shall be placed into double-layered, labelled plastic bags for disposal. Potential for exposure is minimal with use of protective clothing and respirator.

9. NAME & LOCATION OF DISPOSAL SITE:

10. NUMBER OF EMPLOYEES IN THE WORK AREA SHALL BE NO MORE THAN: CERTIFIED SUPERVISOR: QUALIFIED PERSON:

11. SIGNED: DATE: ++EP++

EXHIBIT B ++EP++ Page 15 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION IX

215 Fremont Street

San Francisco, Ca. 94105

Dear Contractor: (rest of letter is ILLEGIBLE)

Page 16

WHAT REQUIRES A NOTICE: The following types of activities require a NESHAP notification. (ILLEGIBLE) ++EP++

Page 17

(ILLEGIBLE) ++EP++ workpractice requirements (61.147 and 61.152).

Page 18

This section should always include some language indicating that the material will be thoroughly wet prior to stripping and removal and maintained wet until collected and packaged for disposal.

Be specific. Language such as "we will comply with Section 61.147 and Section 61.152" is not sufficient. A contractor whose nofifications always contain an identical generic description for these sections may be cited if that description does not adequately describe the situation at a particular job site.

Dry removals may only be conducted after prior written approval is received from the delegated agency or EPA.

PROJECT JOB NUMBER: This item appears at the upper left hand of the enclosed form. If you use a job number, file number, or other internal identification code for organizing your asbestos projects, you can provide that code in this space. This is optional, but we have found that communication between EPA and contractors regarding notifications and jobs is much clearer if we are able to identify jobs using your system.

OTHER POINTERS: If a job does not have a street address, the description of the job location should be detailed enough to enable an inspector to locate the job. All measurements of asbestos material should be given in linear feet (for pipe) or square feet. Other units are not acceptable. Notifications are not considered adequate unless they are legible. If you must photo copy or hand print notifications, please ensure they can be read.

We hope that the sample standard form for notification, along with this letter, will demystify the notification process and assist you in filing accurate and timely notifications. If you need further information concerning the NESHAP requirements, feel free to contact Sunny Mundy at (415) 974-0133.

Sincerely,

/s/ Janet L. Crawford

Janet L. Crawford

Asbestos NESHAP Coordinator

EPA, Region 9 ++EP++

EXHIBIT C ++EP++ Page 19 ASBESTOS DEMOLITION/RENOVATION NOTIFICATION REVISION

MAIL TO:ASBESTOS NOTIFICATION (ILLEGIBLE) Region IX 215 Fremont Street A-3-3 DATE ++EP++

LUZ ENGINEERING CORPORATION

DOC 03 OF 03

CONSENT DECREE

09-89-C020

CAA

ELECT

19890424

19890424

CAD022455174

LUZ ENGINEERING CORPORATION

LOS ANGELES, CA

CV-88-2334-RSWL(TX)

09

IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

LUZ ENGINEERING CORPORATION, Defendant.

Civil Action No. CV 88 235 RSWL(TX)

CONSENT DECREE

WHEREAS, Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ++EP++ (EPA), has filed a Complaint alleging that Defendant, Luz Engineering Corporation (LEC), a California Corporation, has conducted startup of back-up gas-fired generating units at solar electric generating stations (SEGS) near Daggett, California and Kramer Junction, California in violation of the New Source Performance Standards (NSPS) of the Clean Air Act (Act), 42 U.S.C. Section 7401, et seq.

Page 2

WHEREAS, the parties agree that the Court has jurisdiction over the parties and subject matter of this litigation.

WHEREAS, LEC was granted an Authority to Construct (ATC) by the San Bernardino County Air Pollution Control District (APCD) for each of SEGS II, III, IV and V stating that the projects, as proposed, would be in full compliance with all applicable rules and regulations.

WHEREAS, APCD had been granted authority to implement and enforce some Standards of Performance under the Clean Air Act for new sources but not for the type of fossil-fuel fired steam generators operated by LEC.

WHEREAS, on August 4, 1987, LEC submitted to EPA an application for a waiver for SEGS II through V from installing Continuous Emissions Monitoring Systems (CEMS), pursuant to 40 CFR Section 60.13(i) (2). On November 10, 1987 EPA issued a Finding of Violation (FOV) to LEC pursuant to Section 113(a) of the Act for failure to comply with certain notification, reporting, performance testing and monitoring NSPS requirements at SEGS II. EPA Region 9 denied the waiver application on February 18, 1988. On February 24, 1988 the parties entered into a letter agreement proposing resolution of this case. ++EP++

Page 3

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. This Decree shall not constitute evidence or admission of any issue of fact or law by either party. THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I JURISDICTION

1. This Court has jurisdiction of the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U. S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The Complaint states a claim upon which relief may be granted against LEC pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

2. The Court has jurisdiction over the parties and venue is proper in this Court. LEC waives all objections to the Court's personal jurisdiction and venue.

Page 4 II PARTIES BOUND

3. The provisions of this Consent Decree shall apply to and be binding upon LEC, its officers, directors, agents, servants, employees, successors, and assigns. Upon sale or transfer of the facility, LEC shall attach a copy of this Consent Decree to the bill of sale, assignment, or other agreement by which the facility is sold or transferred, and shall make performance of the obligations of LEC under this Consent Decree an obligation of any purchaser or transferee.

4. LEC shall, within five (5) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Decree accompanied by a summary explanation of its terms to all persons who are both bound by this Decree as specified in Paragraph 3, including notice to any successors in interest to property governed by this Decree prior to the transfer of said property, and in a position to ensure or affect compliance herewith. LEC shall provide EPA, no more than 5 working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addressess of all its recipients.

III DEFINITIONS

5. For purposes of this Consent Decree, the following definitions shall apply:

a. "Continuous Emission Monitoring Systems" ("CEMS") means the equipment required by 40 CFR Part 60 to continuously sample, analyze, and provide a permanent record of ++EP++ emissions or process parameters.

Page 5

b. "NOx" means oxides of nitrogen or nitrogen oxides (expressed as NO2) as measured by EPA Method 7 (40 C.F.R. Part 60, Appendix A) or by continuous emission monitoring system (CEMS) operated according to 40 CFR Part 60, Appendix B.

c. "SEGS II" means that unit named Solar Electricity Generating Station No. 2 operated by LEC near Daggett, California.

d. "SEGS II" means the unit named Solar Electricity Generating Station No. 3 operated by LEC near Kramer Junction, California.

e. "SEGS IV" means the unit named Solar Electricity Generating Station No. 4 operated by LEC near Kramer Junction, California.

f. "SEGS V" means the unit named Solar Electricity Generating Station No. 5 operated by LEC near Kramer Junction, California.

IV COMPLIANCE PROGRAM

6. On and after the lodging of this Consent Decree, LEC shall operate SEGS II - V so as to comply with the applicable requirements of the New Source Performance Standards, 40 CFR Part 60 Subparts A and Da.

7. By December 31, 1988, LEC shall install and operate NO2 and O2 CEMS on SEGS II, III, IV and V. 8. For all CEMS, LEC shall do the following: a. Test and calibrate the CEMS in accordance with ++EP++ 40 CFR Section 60.13 by February 28, 1989.

Page 6

b. Certify that the CEMS meet the performance specifications at, and are operated in accordance with 40 CFR Part 60, Appendix B and 40 CFR Part 60, Appendix F by February 28, 1989.

c. LEC shall use the alternate testing protocol of 40 CFR Section 60.46a(e) and Section 60.8(b) in determining the 30-day average NOx emission rate, i.e., the average rate shall be computed as the average of all hourly NOx emission data in the previous 30 days during which the unit was operated.

9. LEC shall notify EPA pursuant to the requirements of 40 CFR Part 60 prior to conducting each performance specifications test of the CEMS.

10. LEC shall implement and submit to EPA a quality assurance project plan for the CEMS, conforming to 40 CFR Part 60, Appendix F, for each of SEGS II, III, IV, and V by February 28, 1989.

11. LEC shall notify EPA of the date that operation of each CEMS commences.

12. LEC shall submit the results of each CEMS to EPA monthly for six months after conducting the performance specification test for each CEMS.

V ACCESS AND INSPECTION

13. EPA and its contractors and agents shall be allowed to enter and inspect the SEGS facilities, including the record of the data produced by the CEMS, at all reasonable times to ensure ++EP++ compliance with this Consent Decree.

Page 7

This paragraph in no way limits EPA's right under Section 114 of the Act.

VI NOTIFICATION

14. All submissions and notices required by this Consent Decree shall be sent to:

Director, Air Management Division U.S. Environmental Protection Agency Region IX 215 Fremont Street San Francisco, CA 94105 United States Department of Justice Chief, Environmental Enforcement Section P.O. Box 7611 Ben Franklin Station Washington, D.C. 20044-7611

15. All submissions shall be signed and attested to by an appropriate corporate officer or a responsible delegate.

VII STIPULATED PENALTIES

16. LEC shall pay stipulated penalties of $10,000 for each day of violation for failure to comply with any applicable emissions requirements set forth in provisions addressed in Paragraph 6 of this Consent Decree.

17. LEC shall pay stipulated penalties for failure to comply with any other requirement of paragraphs 6-15 of this Consent Decree according to the following schedule: 1) $1,000 for each day of violation days one ++EP++ through seven.

Page 8

2) $1,500 for each day of violation over seven days.

18. Any penalty shall be due and payable upon demand and payment shall be made by certified or cashier's check payable to "Treasurer of the United States", and delivered to the United States Attorney for the Central District of California. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and paragraph. Upon payment of a penalty, LEC shall notify EPA Region IX and the U.S. Department of Justice by sending a photocopy of the certified or cashier's check and transmittal letter to the addresses above.

19. Amounts paid pursuant to this Paragraph are in the nature of a civil penalty and are not deductible for federal or state tax purposes.

20. Penalties paid pursuant to this Consent Decree are not EPA's exclusive remedy for LEC's violation of this Consent Decree and EPA reserves its right to seek all injunctive relief under the Clean Air Act and to seek such other relief under the federal statues to which it is entitled.

VIII DELAYS OR IMPEDIMENTS

21. a. If any event occurs which causes or may cause delays in the achievement of compliance by LEC as provided in the Consent Decree, LEC shall notify EPA in writing within ten (10) days of LEC's knowledge of the delay or anticipated delay, describing in detail the anticipated length of delay, the reason for ++EP++ the delay, the measures taken and to be taken by LEC to prevent or minimize the delay, and the timetable by which those measures have or will be implemented.

Page 9

LEC shall adopt all reasonable measures to avoid or minimize any such delay.

b. If EPA and LEC through their counsels agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances beyond the control of LEC, the time for performance hereunder shall be extended if necessary and there shall be no obligation to pay stipulated penalties for such period of extension. In such event, EPA and LEC shall stipulate to such extension of time, and LEC's time for performance shall be so extended. In the event EPA and LEC cannot agree, any party may submit the matter to this Court for resolution.

c. The burden of proving that any delay is caused by circumstances beyond the control of LEC shall rest with LEC and shall be by clear and convincing evidence. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree, or financial difficulties, will not be a basis for changes in this Consent Decree or extensions of time. Any action or failure to act by LEC shall under no circumstances be a basis for changes in this Consent Decree or extension of time nor excuse the liability of LEC for stipulated penalties under this Consent Decree. Delay in achievement of a requirement of this Consent Decree shall not necessarily justify or excuse delay in achievement of subsequent requirements. ++EP++

Page 10

22. EPA reserves the right to impose, consistent with applicable laws and regulations, requirements for SEGS II - V that are more stringent than those set forth in this Consent Decree. In addition, EPA reserves the right to seek any and all relief for violations of law or this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C. Section 7603; except that, for violations that are subject to stipulated penalties under this Consent Decree, EPA waives the right to seek civil penalties under Section 113 of the Act, other than the penalties provided in this Consent Decree.

IX CIVIL PENALTY

23. LEC agrees to pay to the United States a civil penalty of $110,000. The full amount of said penalty shall be paid by LEC within thirty (30) days of the entry of this Consent Decree, by certified or cashier's check made payable to the "Treasurer of the United States" and shall be delivered to United States Attorney for the Central District of California. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this paragraph. Upon payment of this agreed penalty, LEC shall notify EPA Region IX and the U.S. Department of Justice by sending a photocopy of the certified check or cashier's check and transmittal letter to the addresses above. Payments made pursuant to this Paragraph shall not be deductible for federal or state tax purposes. ++EP++

Page 11 X MISCELLANEOUS

24. Each party shall bear its own costs and attorneys fees in this action.

25. This Consent Decree in no way affects LEC's responsibilities to comply with all federal, state and local laws and regulations.

26. Either party may move to terminate this Consent Decree when all penalties due have been paid and if, during the immediately preceding six (6) months, LEC has been in compliance with all requirements of this Consent Decree.

27. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Consent Decree.

28. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, U.S. EPA Region IX, and the Assistant Administrator for Enforcement and Compliance Monitoring, U.S. EPA, and LEC.

29. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims of the United States alleged in its complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations. ++EP++

Page 12

30. The final approval and entry of this Consent Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

31. EPA does not, by its consent to the entry of this Consent Decree, warrant and aver in any manner that LEC's complete compliance with this Consent Decree will result in compliance with the provisions of the Clean Air Act, 42 U.S.C. Section 7401 et seq.

32. EPA does not waive any rights or remedies available to it, for any violation by LEC of federal or state laws, regulation, or permit conditions.

This Consent Decree is entered on this 19 APR 1989 day of , 1989.

RONALD S. W. LEW

UNITED STATES DISTRICT JUDGE

++EP++

Page 13

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered. CONSENTED TO:UNITED STATES OF AMERICA, Plaintiff Dated: 3-14-89 BY: /s/ Donald Carr DONALD A. CARR Acting Assistant Attorney General Land and Natural Resources Division United States Department of Justice Washington, D. C. 20530 Dated: 3-4-89 BY: /s/ EDWARD E. REICH

Acting Assistant Administrator for Enforcement and Compliance Monitoring US Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 Dated: 2.7.89 BY: /s/ John Wise DANIEL MCGOVERN for Regional Administrator U.S. Environmental Protection Agency, Region 9 215 Fremont Street San Francisco, CA 94105 Dated: 3-14-89 BY: /s/ Joanne S. Marchetta JOANNE S. MARCHETTA Attorney Environmental Enforcement Section U.S. Department of Justice P.O. Box 7611 Ben Franklin Station Washington, D.C. 20044 Dated: 3/23/89 BY:/s/ Robert B. Briggs ROBERT C. BONNER Unites States Attorney ROBERT B. BRIGGS Assistant United States Attorney Central District of California ++EP++

Page 14

CONSENTED TO:LUZ ENGINEERING CORPORATION Defendant Dated: January 5, 1989 BY:/s/ WILLIAM F. BRESEE General Counsel ++EP++

LUZ ENGINEERING CORPORATION

DOC 02 OF 03

NOTICE OF REQUIREMENTS OF 28 C.F.R. SECTION 50.7

09-89-C020

CAA

ELECT

19890424

19890418

CADO22455174

LUZ ENGINEERING CORPORATION

LOS ANGELES, CA

CV-88-2334-RSWL(TXA)

09

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

LUZ ENGINEERING CORPORATION, Defendant.

NO. CV 88 2334 RSWL(Tx)

NOTICE OF REQUIREMENTS OF 28 C.F.R. Section 50.7

In actions to enjoin the discharge of pollutants into the environment, it is the policy of the United States Department of Justice to consent to a proposed judgment only after persons who are not named as parties to the action have had an opportunity to comment on the proposed judgment prior to entry by the Court. 28 C.F.R. Section 50.7 (copy attached as Exhibit 1).

A notice of the lodging of the proposed Consent Decree will be published in the Federal Register. During the comment period (usually 30 days) no action is required by the Court. After publication in the Federal Register, expiration of the comment period, and evaluation of any comments by EPA and the Department of Justice, the United States will then further ++EP++ advise the Court as to any comments made and whether entry of the proposed Consent Decree is appropriate.

Page 2

A status report will be filed on or about June 1, 1989. Respectfully submitted this 17th day of April, 1989.

DONALD A. CARR

Acting Assistant Attorney General

Land and Natural Resources

Division

United States Department of

Justice

/s/ Robert B. Briggs

for JOANNE S. MARCHETTA, Attorney

Environmental Enforcement Section

Land and Natural Resources

Division

United States Department of

Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044-7611

ROBERT C. BONNER

United States Attorney

FREDERICK M. BROSIO, JR.

Assistant United States Attorney

Chief, Civil Division

/s/ Robert B. Briggs

ROBERT B. BRIGGS

Assistant United States Attorney

Attorneys for Plaintiff ++EP++

Page 3

Section 50.7 Connent judgments in action to enjoin discharges of pollutants.

(a) It is hereby established as the policy of the Department of Justice to consent to a proposed judgment in an action to enjoin discharges of pollutants into the environment only after or on condition that an opportunity is afforded persons (natural or corporate) who are not named as parties to the action to comment on the proposed judgment prior to its entry by the court.

(b) To effectuate this policy, each proposed judgment which is within the scope of paragraph (a) of this section shall be lodged with the court as early as feasible but at least 30 days before the judgment is entered by the court. Prior to entry of the judgment, or some earlier specified date, the Department of Justice will receive and consider, and file with the court, any written comments, views or allegations relating to the proposed judgment. The Department shall reserve the right (1) to withdraw or withhold its consent to the proposed judgment if the comments, views and allegations concerning the judgment disclose facts or considerations which indicate that the proposed judgment is inapporpriate, improper or inadequate and (2) to oppose an attempt by any person to intervene in the action.

(c) The Assistant Attorney General in charge of the Land and Natural Resources Division may establish procedures for implementing this policy. Where it is clear that the public interest in the policy hereby established is not compromised, the Assistant Attorney General may permit an exception to this policy in a specific case where extraordinary circumstances require a period shorter than 30 days or a procedure other than stated herein. (Order No. 529-73, 38 FR 19029, July 17, 1973) ++EP++

LUZ ENGINEERING CORPORATION

DOC 01 OF 03

COMPLAINT

09-89-CO20

CAA

ELECT

19890424

19890418

CAD022455174

LUZ ENGINEERING CORPORATION

LOS ANGELES, CA

CV-88-2334-RSWL(TX)

09

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

LUZ ENGINEERING CORP. Defendant.

No. 88 2334 RSWL(TX)

COMPLAINT FOR CIVIL PENALTIES AND INJUNCTIVE RELIEF (CLEAN AIR ACT)

Plaintiff, the United States of America, by authority of the Attorney General of the United States, and at the request and on behalf of the Administrator of the United States Environmental Protection Agency ("EPA"), alleges:

NATURE OF THE ACTION

1. This is a civil action for injunctive relief and civil penalties, brought pursuant to Section 113(b) of the Clean ++EP++ Air Act (the "Act"), 42, U.S.C. Section 7413(b), against Luz Engineering Corporation ("Luz") for violations of Sections 111(e) and 114(a)(1) of the Act, 42 U.S.C. Sub-section 7411(e) and 7414(a)(1), and applicable portions of the implementing regulations codified at 40 C.F.R. Part 60, Subparts A and Da.

Page 2 JURISDICTION AND VENUE

2. The Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), and 28 U.S.C. Sub-section 1331, 1345 and 1355.

3. Venue is proper in this District pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-section 1391(b) and (c).

4. Notice of the commencement of this action has been given to the California Air Resources Board in accordance with Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

PARTIES

5. Plaintiff is the United States of America, acting at the request of the United States Environmental Protection Agency ("EPA"), an agency of the United States.

6. Defendant Luz is a corporation organized and existing under the laws of California. Luz operates, and at all relevant times, has operated, four large scale solar electric generating stations ("SEGS") in California's Mojave Desert, one located near Daggett, California ("SEGS II") and three located near Kramer Junction, California ("SEGS III, IV, and V"). Luz ++EP++ is currently constructing two additional SEGS at the Kramer Junction location and has plans to build other SEGS units.

Page 3

7. Luz is a person within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e).

GENERAL ALLEGATIONS

8. Section 111(b) of the Act, 42 U.S.C. Section 7411(b), requires the Administrator of EPA to publish a list of categories of sources that, in his judgment, cause or contribute significantly to air pollution which may reasonably be anticipated to endanger public health or welfare, and to promulgate standards of performance for new sources within the published categories. These standards are known as Standards of Performance or as New Source Performance Standards ("NSPS").

9. Section 111(a)(3) of the Act defines "stationary source" as "any building, structure, facility, or installation which emits or may emit any air pollutant." 42 U.S.C. Section 7411(a)(3).

10. Section 111(e) of the Act provides that, after the effective date of the national standards of performance, it shall be unlawful for any owner or operator of a new stationary source to operate such new stationary source in violation of any applicable national standard of performance. 42 U.S.C. Section 7411(e).

11. On June 11, 1979, under Section 111(b) of the Act, 42 U.S.C. Section 7411(b), EPA promulgated regulations establishing ++EP++ national standards of performance for electric utility steam generating units for which construction commenced after September 18, 1978.

Page 4

Such standards of performance were effective on the date of promulgation and were codified at 40 C.F.R. Part 60, Subpart Da.

12. On December 23, 1971, under Section 111(b), 42 U.S.C. Section 7411(b), EPA promulgated regulations establishing general provisions applicable to the owners or operators of new stationary sources and an appendix of methods to be used in demonstrating and determining the compliance status of such new stationary sources. These regulations became effective on December 23, 1971, and were codified at 40 C.F.R. Part 60, Subpart A, and Appendix.

13. Under Sections 111(a) and (e) of the Act, 42 U.S.C. Section 7411(a) and (e), and 40 C.F.R. part 60, Subpart Da, the "Standards of Performance for Electric Utility Steam Generating Units For Which Construction Is Commenced After September 18, 1978" and the "General Provisions" in 40 C.F.R. Part 60, Subpart A are applicable to Luz's gas-fired steam generators at the SEGS facilities in the Mojave Desert.

14. Each SEGS facility includes or will include a gas-fired steam generator as a back-up power source for those occasions when Luz must meet power delivery obligations and solar energy is not available.

15. Construction of the gas-fired steam generator unit at each SEGS facility commenced after September 18, 1978. ++EP++ Specifically, construction began at SEGS II and III in July 1985, at SEGS IV in August 1986, at SEGS V in January 1987, at SEGS VI in October 1987, and at SEGS VII in May 1988.

Page 5 FIRST CLAIM FOR RELIEF

16. The allegations of paragraphs 1 through 15 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

17. 40 C.F.R. Part 60, Subpart A, Section 7(a) through (c) requires an owner or operator of a new stationary source, to which a national standard of performance applies, to furnish EPA written notification of the date construction of a new stationary source commences, of the anticipated date of initial startup of the new stationary source, and of the actual date of initial startup.

18. Luz failed to notify EPA or failed to notify EPA within the time specified by the applicable regulations of the construction commencement date, the anticipated date of initial startup, or the actual date of startup for the gas-fired steam generating units at SEGS II, III, IV or V.

19. Luz thereby violated the standards set forth in 40 C.F.R. Section 60.7(a) and Section 111(e) of the Act, 42 U.S.C. Section 7411( e).

20. Under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $ 25,000 per day that ++EP++ Luz violated 40 C.F. R. Section 60.7(a) and Section 111(e) of the Act. 42 U.S.C. Section 7411(e).

Page 6 SECOND CLAIM FOR RELIEF

21. The allegations of paragraphs 1 through 20 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

22. 40 C.F.R. Part 60, Subpart A, Section 60.47a(c) requires the owner or operator of a new stationary source, to which a national standard of performance applies, to install, calibrate, maintain and operate, and record the output of a continuous monitoring system for measuring nitrogen oxides emissions discharged to the atmosphere.

23. Luz failed to install, calibrate, maintain, operate, and record the output of a continuous monitoring system at SEGS II, III, IV or V for measuring nitrogen oxides emissions within the time specified by the applicable regulations.

24. Luz thereby violated the standards set forth in 40 C.F.R. Section 60.47a(c) and Section 111(e) of the Act, 42 U.S.C. Section 7411(e).

25. Under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $25,00 per day that Luz violated 40 C.F.R. Section 60.47a(c) and Section 111(e) of the Act. 42 U.S.A. Section 7411(e). ++EP++

Page 7 THIRD CLAIM FOR RELIEF

26. The allegations of paragraphs 1 through 25 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

27. 40 C.F.R. Part 60, Subpart A, Section 60.8 requires an owner or operator of a new stationary source, to which a national standard of performance applies, to, inter alia, conduct an initial performance test and furnish the EPA with a written report of the results of such test within 60 days after achieving the maximum production rate at which the new source will be operated, but not later than 180 days after initial startup of such new source, and at such other times as may be required by EPA under Section 114 of the Act, 42 U.S.C. Section 7414.

28. Luz failed to conduct an initial performance test and furnish the EPA with a written report of the results of such test within the time specified by the regulations.

29. Luz thereby violated the standards set forth in 40 C.F.R. Section 60.8 and Section 111(e) of the Act, 42 U.S.C. Section 7411(e).

30. Under Section 113 (b) of the Act, 42 U.S.C. 7413 (b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $ 25,000 per day that Luz violated 40 C.F.R. 60.8 and Section 111(e) of the Act. 42 U.S.C. Section 7411(e). ++EP++

Page 8 FOURTH CLAIM FOR RELIEF

31. The allegations of paragraphs 1 through 30 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

32. 40 C.F.R. Part 60, Subpart A, Section 60.49a requires an owner or operator of a new stationary source, to which a national standard of performance applies, to, inter alia, report to EPA the performance test data from the initial performance test and from the performance evaluation of the continuous monitors and to report the average nitrogen oxide emissions rates.

33. Luz failed to report to EPA the performance test data from the initial performance test and from the performance evaluation of the continuous monitors or to report the average nitrogen oxide emissions rates.

34. Luz thereby violated the standards set forth in 40 C.F.R. Section 60.49a and Section 111(e) of the Act, 42 U.S.C. Section 7411( e).

35. Under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $25,000 per day that Luz violated 40 C.F.R. Section 60.49a and Section 111(e) of the Act.42 U.S.C. Section 7411(e). ++EP++

Page 9 FIFTH CLAIM FOR RELIEF

36. The allegations of paragraphs 1 through 35 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

37. 40 C.F.R. Part 60, Subpart A, Section 60.44a (a) prohibits an owner or operator of a new stationary source, to which a national standard of performance applies, from causing the discharge into the atmosphere of any gas containing nitrogen oxides in excess of specified emissions limits.

38. Luz failed to install, calibrate and monitor the continuous emissions monitoring equipment needed to determine whether Luz was causing the discharge into the atmosphere of any gas containing nitrogen oxides in excess of specified emissions limits. In the absence of continuous emmissions monitoring equipment, EPA has been unable to determine the extent of Luz's compliance with 40 C.F.R. Section 60.44a(a).

39. Luz thereby may have violated or be violating the standards set forth in 40 C.F.R. Section 60.44a(a) and Section 111(e) of the Act, 42 U.S.C.Section7411(e).

40. Under Section 113(b) of the Act, 42 U.S.C. Section 7413 (b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $25,000 per day that Luz violated 40 C.F.R. Section 60.44a(a) and Section 111(e) of the Act. 42 U.S.C. Section 7411(e). ++EP++

Page 10 SIXTH CLAIM FOR RELIEF

41. The allegations of paragraphs 1 through 40 are realleged and incorporated herein by reference as if fully set forth in this paragraph.

42. 40 C.F.R. Part 60, Subpart A, Section 60.7(c) requires an owner or operator of a new stationary source, to which a national standard of performance applies, to furnish the EPA with quarterly reports of excess emissions, if any, of nitrogen oxides.

40. Luz failed to furnish EPA with quarterly reports of excess emissions, if any, of nitrogen oxides.

41. Luz thereby violated the standards set forth in 40 C.F.R. Section 60.7(c) and Section 111(e) of the Act, 42 U.S.C Section 7411( e).

37. Under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), Luz is subject to an injunction and/or liable for a civil penalty in an amount not to exceed $25,000 per day that Luz violated 40 C.F.R. Section 60.7(c) and Section 111(e) of the Act. 42 U.S.C. Section 7411( e).

WHEREFORE, the plaintiff United States respectfully prays that this Court:

a. Enter an injunction restraining and enjoining Luz from violating the Standards of Performance For Electric Utility Steam Generating Units For Which Construction Is Commenced After ++EP++ September 18, 1978" in 40 C.F.R. Part 60, Subpart Da; the "General Provisions" in 40 C.F.R. Part 60, Subpart A; and Sections 111(e) and 114 of the Act, 42 U.S.C. Sub-section 7411(e) and 7414;

Page 11

b. Enter an injunction requiring Luz to operate its pollution abatement system in compliance with the Standards of Performance for Electric Utility Steam Generating Units For Which Construction Is Commenced After September 18, 1978" in 40 C.F.R. Part 60, Subpart Da;

c. Impose upon Luz civil penalties in an amount not to exceed $ 25,000 per day per violation of the Act or the applicable regulations; d. Award the United States the costs of this action; and

e. Grant such further relief as this Court may deem just and appropriate.

Respectfully submitted,

/s/

DONALD A. CARR

Acting Assistant Attorney General

Land and Natural Resources

Division

United States Department of

Justice

/S/ Joanne S. Marchetta Attorney

Environmental Enforcement Section

Land and Natural Resources

Division

United States Department of

Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044-7611 (202)

633-5476 ++EP++

Page 12

ROBERT C. BONNER

United States Attorney

Central District of California

/s/ Robert B. Briggs

ROBERT B. BRIGGS

Assistant United States Attorney

Central District of California

United States Courthouse

312 North Spring Street

Los Angeles, California 90012

(213) 894-2434

Attorneys for Plaintiff

OF COUNSEL: ROBERT W. BERGSTROM Office of Regional Counsel U.S. Environmental Protection Agency, Regional 9 215 Fremont Street San Francisco, CA 94105 ++EP++

EVR-GARD COATINGS CO.

DOC 02 OF 02

CONSENT DECREE

09-89-C016

CAA

(BLANK)

19890228

19890228

CAD008316382

EVR-GARD COATINGS CO.

PARAMOUNT, CA

88-03044 HLH

09

CONSENT DECREE, U.S. V. EVR-GARD COATINGS COMPANY; GREGORY SMITH, A GENERAL PARTNER; AND RICHARD HEBB, A GENERAL PARTNER

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

EVR-GARD COATINGS COMPANY, a California partnership; GREGORY SMITH, a general partner; and RICHARD HEBB, a general partner, Defendants.

No. CV 88 03044 HLH

CONSENT DECREE Page 2

WHEREAS, Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint on May 26, 1988, initiating this action;

WHEREAS, in the Complaint, the United States alleged that the Evr-Gard Coatings Company, a California partnership; Gregory Smith, a general partner; and Richard Hebb, a general partner (collectively "Defendants"), own and operate manufacturing and retail sales facilities for architectural coatings, that Defendants facilities are subject to California's state implementation plan ("SIP") promulgated pursuant to Section 110 of the Clean Air Act (the "Act"), 42 U.S.C. Section 7410, and that the Defendants violated Section 114 of the Act, 42 U.S.C. Section 7414, by failing to provide information demanded by EPA to determine the Defendants' compliance with the SIP;

WHEREAS, the Defendants deny that the violations set forth in the Complaint occurred;

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter and without this Consent Decree constituting evidence or admission of any issue of fact or law by any party;

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I. JURISDICTION

A. This court has jurisdiction over the subject matter ++EP++

of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355.

Page 3

The Complaint states a claim upon which relief may be granted against the Defendants pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

B. The Court has personal jurisdiction over the Defendants and venue is proper in this Court. The Defendants waive all objections to the Court's personal jurisdiction and venue.

II. PARTIES BOUND

A. This Consent Decree shall apply to and be binding upon the Defendants and their agents, servants, employees, successors, and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through or under the Defendants or in active concert or participation with the Defendants, and upon the United States on behalf of EPA.

B. The Defendants shall, postmarked within TEN (10) days of the entry of this Consent Decree and as appropriate thereafter, give copies of this Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph II.A. who are responsible, as managers, for ensuring or affecting compliance with this Consent Decree, and to any successor in interest to property governed by this Consent Decree prior to the transfer of said property. The Defendants shall provide to EPA, postmarked within FIVE (5) working days after the date(s) of such notice(s), a copy of the summary and a list of the names and addresses of all recipients. ++EP++

Page 4 III. CIVIL PENALTY

The Defendants shall pay a civil penalty of $30,000 (thirty thousand dollars) to the United States. This amount shall be paid by the Defendants in three equal installments of $10,000 (ten thousand dollars). The first installment shall be paid by the Defendants by being postmarked no later than 30 days after the entry of this Consent Decree. The second installment shall be paid by the Defendants by being postmarked no later than 90 days after the entry of this Consent Decree. The third installment shall be paid by Defendants by being postmarked no later than 180 days after entry of this Consent Decree. These payments shall be made by certified checks made payable to the "Treasurer of the United States of America", and shall be delivered by certified mail with return receipt requested to Bonnie E. MacNaughton, Assistant U.S. Attorney, 1100 United States Courthouse, 312 North Spring Street, Los Angeles, California 90012. The payments shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Con-current with delivery of this penalty, the Defendants shall notify EPA by sending a photocopy of the certified check and transmittal letter to Allan Zabel, Assistant Regional Counsel, U.S. Environmental Protection Agency, 215 Fremont Street, San Francisco, California 94105. The Defendants shall not deduct for federal tax purposes any payments made pursuant to this Paragraph.

IV. REPORTING REQUIREMENTS

A. The Defendants shall provide all the information ++EP++

demanded by EPA in letters sent to Gregg Smith as owner of Evr-Gard Coatings Company on May 15, 1987, and June 19, 1987.

Page 5

If the Defendants are in good faith unable to provide all the information demanded in these letters, the Defendants shall separately explain for each item of information requested their inability to provide such information. The Defendants shall submit the information, and any explanation(s) regarding their inability to provide the information, to EPA by certified mail with return receipt requested and postmarked no later than 30 days after the entry of this Consent Decree.

B. If Defendants do not adequately supply any item of information requested pursuant to Paragraph IV.A. or this Paragraph, EPA reserves the right to send supplemental information requests relating to the information that has not been provided. The Defendants shall submit the supplemental information, and any explanation(s) regarding their inability to provide the supplemental information, to EPA by certified mail with return receipt requested and postmarked no later than 30 days after receipt of a supplemental information request from EPA.

V. STIPULATED PENALTIES

A. The Defendants shall be liable for stipulated penalties for failure to comply with the terms of this Consent Decree as follows:

1. for failure to comply with any of the requirements set forth in Paragraph III or V.C.: $2,000 for each failure to comply for the first 30 days of noncompliance, and an additional $5,000 for noncompliance ++EP++

extending beyond 30 days; and

Page 6

2. for failure to comply with any of the requirements set forth in Paragraph IV.A. or IV.B.: $5,000 for the failure to comply for the first 30 days of noncompliance, and an additional $10,000 for noncompliance extending beyond 30 days.

B. If EPA determines that the Defendants are subject to stipulated penalties pursuant to Paragraph V.A., EPA shall notify the Defendants by certified mail. If the Defendants dispute the claimed violation, this Court shall resolve the issue through a hearing. The Defendants must notify this Court and EPA of the Defendants' desire to challenge an EPA determination. Defendants' notice must be postmarked within five working days of the Defendants' receipt of a notice by EPA, and must be sent by certified mail with return receipt requested. Timely notice by Defendants shall toll the accrual of further stipulated penalties for failure to timely pay stipulated pursuant to Paragraph V. A.1.

C. Payment of stipulated penalties by the Defendants shall be postmarked no later than 15 days after the Defendants receive notice of a determination by EPA or, if this Court resolves the matter through a hearing, no later than 15 days after this Court finds that EPA was correct in its determination of the Defendants' failure to comply with this Consent Decree. Payment(s) of stipulated penalties by the Defendants shall be made by certified check(s) made payable to the "Treasurer of the United States of America" and shall be delivered by certified mail with return receipt requested to Bonnie E. MacNaughton, Assistant ++EP++

U.S. Attorney, 1100 United States Courthouse, 312 North Spring Street, Los Angeles, California 90012.

Page 7

Payment of any stipulated penalties shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Concurrent with delivery of any stipulated penalties, the Defendants shall notify EPA by sending a photocopy of the certified check and transmittal letter to Allan Zabel, Assistant Regional Counsel, U.S. Environmental Protection Agency, 215 Fremont Street, San Francisco, California 94105. The Defendants shall not deduct for federal tax purposes any stipulated penalties made pursuant to this Paragraph.

VI. NOTIFICATION

A. Except as otherwise specifically stated, all notices and submissions from the Defendants to EPA required by this Consent Decree shall be addressed to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

B. All notices from EPA to the Defendants shall be addressed to:

Gregory Smith

Richard Hebb

Evr-Gard Coatings Company

16400 Garfield Ave.

Paramount, California 90723

VII. MISCELLANEOUS

A. Entry of this Consent Decree and compliance with the requirements herein shall be in full settlement and satisfaction of the civil claims of the United States against the Defendants ++EP++ as alleged in the Complaint.

Page 8

B. Each party to this Consent Decree shall bear its own costs and attorney fees in this action.

C. This Consent Decree in no way affects the Defendants' responsibilities to comply with all federal, state and local laws and regulations.

D. Except as specifically provided herein, the United States does not waive any rights or remedies available to it for any violation by the Defendants of federal or state laws or regulations following lodging of this Consent Decree.

E. The Defendants are each jointly and severally liable for any penalties owed pursuant to this Consent Decree.

F. For the purpose of this Consent Decree, notice sent to the Defendants at the address listed in Paragraph VI shall constitute proper notice and notice sent to any defendant named in the Complaint shall constitute notice to all the Defendants.

G. This Court shall retain jurisdiction over this matter and all disputes arising hereunder until: 1) the Defendants pay all civil penalties and stipulated penalties owed under this Consent Decree; 2) the Defendants provide all information to EPA required by this Consent Decree; and 3) the EPA has failed to request supplemental information, pursuant to Paragraph IV.B., for a period of 90 days after the Defendants' last required submission of information to EPA. The United States shall promptly notify the Court of the occurrence of all three of these events and this Consent Decree shall then terminate.

H. Any modification of this Consent Decree must be in ++EP++ writing and approved by this Court.

Page 9

I. This Consent Decree shall not constitute evidence or an admission of any issue of fact or law by either party.

This Consent Decree is entered on this 28 day of Feb., 1989.

HARRY L. HUPP

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that the Consent Decree may be entered forthwith.

UNITED STATES OF AMERICA, Plaintiff

Dated: 2-23-89

/s/

DONALD A. CARR

Acting Assistant Attorney General

Dated: 2/23/89

/s/

LESLIE ALLEN, Attorney

Environmental Enforcement Section

Land & Natural Resources Division

U.S. Department of Justice ++EP++

Page 10

ROBERT C. BONNER

United States Attorney

FREDERICK M. BROSIO, JR.

Assistant United States Attorney

Chief, Civil Division

Dated: 2/27/89

/s/

BONNIE E. MACNAUGHTON

Assistant United States Attorney

Central District of California

Dated: 2-18-89

/s/

EDWARD E. REICH

Acting Assistant Administrator for Enforcement and Compliance

Monitoring

United States Environmental Protection Agency

Dated: 2-16-89

Daniel M. McGovern

DANIEL W. McGOVERN

Regional Administrator

United States Environmental Protection Agency

Region 9

OF COUNSEL:

ALLAN ZABEL

Assistant Regional Counsel

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

RACHEL M. HOPP

Attorney-Advisor

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M. Street, S.W.

Room M3211BL (LE-134A)

Washington, D.C. 20460 ++EP++

Page 11

EVR-GARD COATINGS COMPANY, GREGORY SMITH, and RICHARD HEBB, Defendants,

Dated: 2-13-89

/s/

RAYMOND KING

Paone, Callahan, McHolm, & Winto

Attorneys for Defendants

Dated: 2-9-89

Gregory L. Smith

GREGORY SMITH

General Partner

Evr-Gard Coatings Company

Dated: 2-9-89

Richard D Hebb

RICHARD HEBB

General Partner

Evr-Gard Coatings Company ++EP++

EVR-GARD COATINGS CO.

DOC 01 OF 02

COMPLAINT

09-89-C016

CAA

(BLANK)

19890228

19880526

CAD008316382

EVR-GARD COATINGS CO.

PARAMOUNT, CA

88-03044 HLH

09

COMPLAINT, U.S. V. EVR-GARD COATINGS COMPANY; GREGORY SMITH, A GENERAL PARTNER; AND RICHARD HEBB, A GENERAL PARTNER

IN THE UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

EVR-GARD COATINGS COMPANY, a California partnership; GREGORY SMITH, a general partner; and RICHARD HEBB, a general partner, Defendants. 8803044

NO.

COMPLAINT FOR

CIVIL PENALTIES

(CLEAN AIR ACT, 42 U.S.C.

Sub-Section 7401, et seq.)

United States of America ("Plaintiff"), by and through its undersigned attorneys, by the authority of the Attorney General of the United States, and at the request of the Administrator of the United States Environmental Protection Agency ("EPA"), alleges that: ++EP++

Page 2 JURISDICTION AND VENUE

1. This is a civil action for civil penalties for violations by Evr-Gard Coatings Company, a California partnership, Gregory Smith, a general partner in Evr-Gard Coatings Company, and Richard Hebb, a general partner in Evr-Gard Coatings Company (collectively referred to as "Defendants") of the Clean Air Act, 42 U.S.C. Section 7401 et seq. ("the Act"). This Court has jurisdiction over this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-Section 1331, 1345 and 1355. Venue is proper in this district pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Section 1391(c).

2. Evr-Gard Coatings Company is a partnership organized under the laws of the State of California with its headquarters in Paramount, California. Evr-Gard Coatings Company owns and operates an architectural coatings manufacturing facility located at 16400 Garfield Ave., Paramount, California.

3. Gregory Smith is a general partner in Evr-Gard Coatings Company.

4. Richard Hebb is a general partner in Evr-Gard Coatings Company.

5. Notice of the commencement of this action has been given to the State of California as required by Section 113(b) of the Act, 42 U.S.C. Section 7413(b). ++EP++

Page 3

6. The architectural coatings manufactured by Evr-Gard Coatings Company are subject to South Coast Air Quality Management District Rule 1113, which was made part of the State Implementation Plan 'for California ("SIP") on January 24, 1985 (50 FR 3338). SIP requirements are requirements of the Act pursuant to Section 110 of the Act, 42 U.S. C. Section 7410.

7. Section 114 of the Act, 42 U.S.C. Section 7414, authorizes the Administrator of EPA, among other things, to require persons subject to any provision of the Act to submit reports, establish and maintain records, sample emissions, and provide other information as needed by EPA to determine that person's compliance with the requirements of the Act. Failure to comply with a directive from the Administrator of EPA issued pursuant to Section 114 is a violation of Section 113(b) of the Act, 42 U.S.C. Section 7413(b), for which the plaintiff may seek injunctive relief and civil penalties.

FIRST CLAIM FOR RELIEF

8. Paragraphs 1-7 of this Complaint are incorporated herein by reference as if fully alleged below.

9. By letters dated May 15, 1987, and June 19, 1987, the Administrator of EPA, through authority delegated to the Regional Administrator of EPA Region 9 and redelegated to the Director of the Air Management Division of EPA Region 9, required Defendants to submit information concerning Evr-Gard Coatings Company's compliance with requirements of the Act. ++EP++

Defendants received these letters on or about May 18, 1987, and June 24, 1987, respectively.

Page 4

10. Defendants have failed and continue to fail to comply with the requirements contained in the letters from EPA of May 15, 1987, and June 19, 1987. Defendants' failure to comply with these requirements constitutes violations of Section s 113(b) and 114 of the Act.

11. Under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), Defendants are liable for civil penalties of up to $25,000 for each day of violation of Section 114 of the Act, 42 U.S.C. Section 7414, and plaintiff may seek injunctive relief compelling Defendants to comply with the requirements contained in EPA's letters of May 15, 1987, and June 19, 1987.

RELIEF REQUESTED

WHEREFORE, Plaintiff United States of America respectfully prays this Court to grant the following relief:

A. Impose civil penalties of $25,000 per violation for each day the Defendants have violated Section s 113(b) and 114 of the Clean Air Act; and

B. Issue an order compelling Defendants to provide the information sought by EPA in its letters of May 15, 1987, and June 19, 1987;

C. Award costs of this action against defendant and in favor of the United States, and

D. Such further relief as this Court may deem just and proper. ++EP++

Page 5

Respectfully submitted,

ROGER J. MARZULLA

Assistant Attorney General

Land and Natural Resources

Division

United States Department of

Justice

ROBERT C. BONNER

United States Attorney for the

Central District of California

BY:

/s/ Bonnie MacNaughton

BONNIE E. MACNAUGHTON

Assistant United States Attorney

1100 United States Courthouse

312 N. Spring Street

Los Angeles, California 90012

(213) 894-2444

/s/ Leslie Allen

LESLIE ALLEN

Trial Attorney

Environmental Enforcement Section

Land and Natural Resources

Division

U.S. Department of Justice

P.O. Box 7611

Washington, D.C. 20044

(202) 633-4114

OF COUNSEL:

ALLAN ZABEL

Office of Regional Counsel

U.S. Environmental Protection

Agency

Region 9

215 Fremont Street

San Francisco, CA 94105 ++EP++

APEX ORCHARDS, INC.

DOC 02 OF 02

CONSENT DECREE

09-89-C015

CAA

MISC

19880529

19880529

CAD981676398

APEX ORCHARD DRIVER RD BOILER

BAKERSFIELD, CA

87-0871-LKK

09

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff, v. APEX ORCHARDS, INCORPORATED, DEI-COAGRI, INC. Defendants.

Civil Action No. 87-0871-LKK

CONSENT DECREE

++EP++

Page 2

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency (EPA), has filed a Compliant and an amended Complaint alleging that Apex Orchards, Incorporated (Defendant), a Nevada corporation, owned and operated a biomass-fired boiler in Bakersfield, California ("the facility") without a prevention of significant deterioration (PSD) permit in violation of the Clean Air Act ("Act"), 42 U.S.C. Sub-section 7401, et seq. Until June 23, 1987, Defendant Apex Orchards owned and operated the facility, at which time Defendant Apex Orchards sold the facility to Defendant DEI-COAGRI (DEI), a subsidiary of Decker Energy International, Inc. Prior to the date of sale, the facility was shut down and has not been operated by Defendant DEI as of the date of the lodging of this Decree. Any reference to "Defendants" in this Decree shall mean both Apex Orchards, Incorporated and DEI. Reference to only "Apex Orchards" or "DEI" shall mean that Defendant only.

The Complaint alleges that the violation of the Act continued for more than 30 days after Plaintiff gave Defendant Apex Orchards notice of the same. Defendant DEI admits that it is subject to the notice of violation issued by EPA on July 16, 1986. Defendants deny that the violations charged in the Complaint as amended occurred. The parties agree that the Court has jurisdiction over the parties and subject matter of this litigation.

The parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and ++EP++ without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree.

Page 3

With the exception of the matters addressed at lines 17 through 23 on Page 2 (jurisdiction of the Court), this Decree shall not constitute evidence or admission of any issue of fact or law by either party.

THEREFORE, it is hereby ORDERED, ADJUDGED, AND DECREED as follows:

I JURISDICTION

A. This Court has jurisdiction of the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U. S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The Complaint as amended states a claim upon which relief may be granted against Defendants pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

B. Defendant DEI has waived notice pursuant to 42 U.S.C. Section 7413(a) (1) and admits jurisdiction pursuant to 42 U.S.C. Section 7413( b).

C. The Court has jurisdiction over the parties and venue is proper in this Court. Defendants waive all objections to the Court's personal jurisdiction and venue.

II PARTIES BOUND

A. The provisions of this Consent Decree shall apply to and be binding upon the Defendants, their officers, directors, agents, servants, employees, successors, and assigns. Upon sale or transfer of the Bakersfield facility, Defendant DEI shall attach ++EP++ a copy of this Consent Decree to the bill of sale, assignment, or other agreement by which the Bakersfield facility is sold or transferred, and shall make performance of the obligations of the DEI under this Consent Decree an obligation of any purchaser or transferee.

Page 4

B. Defendant DEI shall, within five (5) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Decree accompanied by a summary explanation of its terms, to all persons bound by this Decree as specified in Paragraph II A, including notice to any successors in interest to property governed by this Decree prior to the transfer of said property, in a position to ensure or affect compliance herewith. DEI shall provide EPA, no more than 5 working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

III COMPLIANCE SCHEDULE

Defendant DEI shall comply with the Act as follows:

A. Prior to the date of "startup" of the facility as defined in 40 C.F.R. 52.01(e), Defendant DEI shall apply to and receive from the Kern County Air Pollution Control District (KCAPCD) an Authority to Construct permit or an amendment to the Authority to Construct permit, application No. 3032006B, issued to its predecessor Superior Farming Company on July 3, 1986. The new or amended permit shall provide that the facility shall emit less than 57.1 lbs/hr of Carbon Monoxide (CO), as calculated by a 24-hour average of the hourly emissions ++EP++ recorded by continuous emission monitoring system (CEMs) for CO.

Page 5

B. Within 120 days after the date of startup of the facility and thereafter, Defendant DEI shall install, maintain, and operate CEMs for Oxides of Nitrogen (NOx), CO, oxygen (O2), and volumetric gas flow rates in the bio-mass fired boiler exhaust stack. The CEMs for NOx, Co, and O2 shall meet EPA monitoring performance specifications (40 C. F.R. Part 60, Appendix B, Performance Specifications). The CEMs for volumetric gas flow rates shall meet EPA monitoring performance specifications (40 C.F.R. Part 52, Appendix E).

C. Not less than 90 days prior to the date of startup of the facility, Defendant DEI shall submit to the EPA a quality assurance project plan for the certification and operation of the CEMs for NOx, CO, O2, and volumetric gas flow rates. Such a plan shall conform to the EPA document "Guidelines for Developing a Quality Assurance Project Plan" (QAMS)-005 80. Neither DEI nor the United States may move to terminate this Decree until the quality assurance project plan has been approved by EPA Region 9.

D. Within 120 days after the date of startup of the facility, Defendent DEI shall conduct performance specification tests on the CEMs for NOx, CO, O2, and volumetric gas flow rates in accordance with the requirements and procedures contained in 40 C.F.R. Part 60, Appendix B and Part 52, Appendix E, and within 15 days of such tests submit results of the performance specification tests to EPA and KCAPCD. Defendant DEI shall notify EPA and KCAPCD in writing 30 days prior to such tests to afford EPA and KCAPCD the opportunity to have an observer to be present at the tests. The CEMs for CO emissions must provide 90% of the possible data (90% ++EP++ data capture rate).

Page 6

The facility control room CEM readout shall be expressed in ppm, or lbs/mm Btu, or lbs/hr.

E. Within 120 days after the date of startup of the facility and thereafter, Defendant DEI shall emit less than the following:

1. NOx

(a) 16.6 lbs/hr (2-hour average) and

(b) 0.165 lbs/mm Btu as expressed in the Kern County Air Pollution Control District or may be amended by the KCAPCD.

2. CO:

57.1 lbs/hr (24-hour average)

F. Defendant DEI shall maintain a record of the CEM data from the Bakersfield facility and submit to EPA on monthly basis, no later than 15 days after the end of each month, the data collected by the CEMs required by Paragraph III.B. Such data shall be expressed in lbs/mm BTU and lbs/hr and shall evidence compliance with the emission limits set forth in Paragraph III.E. Defendant DEI shall submit a sample calculation with the data showing the procedure used to convert the data from ppm readout to lbs/hr and lbs/mm BTU.

G. Nothing in this Decree shall prevent operation of the facility as allowed by KCAPCD for tests prior to issuance of the new or amended permit to construct referred to in Paragraph III A. Such operation, which may be authorized by variance, shall be limited to the time necessary for gathering new data and shall not be considered startup as defined in Paragraph A or 42 C.F.R. ++EP++ Section 52.01(e).

Page 7 IV. ACCESS AND INSPECTION

EPA, KCAPCD and their contractors and agents shall be allowed to enter and inspect the facility, including the record of the data produced by the continuous emission monitors, at all reasonable times to ensure compliance with this Decree. This paragraph in no way limits U.S. EPA's right under Section 114 of the Act.

V. NOTIFICATION

Defendant DEI shall send all submissions required by this Consent Decree to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105

Air Pollution Control Officer

Kern County Air Pollution Control District

1601 "H" Street, Suite 250

Bakersfield, CA 93301

and to:

Assistant Attorney General

Land & Natural Resources Division

U.S. Department of Justice

10th Street & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

All submissions shall be signed and affirmed to by an appropriate corporate officer or a responsible delegate. ++EP++

Page 8 VI. STIPULATED PENALTIES

A. Defendant DEI shall pay stipulated penalties for failure to comply with any requirement of Paragraph III according to the following schedule:

1) $5,000 for each day of violation, days one through seven.

2) $10,000 for each day of violation over seven days.

B. Any penalty shall be due and payable upon demand and payment shall be made by certified or cashier's check payable to "Treasurer of the United States", and delivered to the United States Attorney for the Eastern District of California. Payment shall be accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of a penalty, Defendants shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel.

C. Amounts paid pursuant to this Paragraph are in the nature of a civil penalty and are not deductible for federal or state tax purposes.

D. Penalties paid pursuant to this Consent Decree are not the Plaintiff's exclusive remedy for the Defendants' violation of this Consent Decree and Plaintiff reserves its right to seek all injunctive relief under the Clean Air Act and to seek such other relief under the federal statutes to which it is entitled.

E. 1) If any event occurs which causes or may cause delays in the achievement of compliance by Defendant DEI as ++EP++ provided in the Consent Decree, Defendant DEI shall notify EPA and KCAPCD in writing within ten (10) days of Defendant's knowledge of the delay or anticipated delay, describing in detail the anticipated length of delay, the reason for the delay, the measures taken and to be taken by Defendant to prevent or minimize the delay, and the timetable by which those measures have or will be implemented.

Page 9

Defendant DEI shall adopt all reasonable measures to avoid or minimize any such delay.

2) If Plaintiff and Defendant DEI through their counsels agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances beyond the control of Defendant DEI, the time for performance hereunder may be extended for a period no longer than the delay resulting from such circumstances and there shall be no obligation to pay stipulated penalties for such period of delay. In such event, Plaintiff and Defendant DEI shall stipulate to such extension of time, and the Defendant's time for performance shall be so extended. In the event Plaintiff and Defendant DEI cannot agree, any party may submit the matter to this Court for resolution.

3) The burden of proving that any delay is caused by circumstances beyond the control of Defendant DEI shall rest with DEI. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree, or financial difficulties, will not be a basis for changes in this Consent Decree or extensions of time. Any action or failure to act by Defendant DEI shall under no circumstances be a basis for changes in this Decree or extension of time nor excuse the liability ++EP++ of Defendant DEI for stipulated penalties under paragraph VI.

Page 10

Delay in achievement of a requirement of this Decree shall not necessarily justify or excuse delay in achievement of subsequent requirements.

VII. CIVIL PENALTY

Defendant Apex Orchards shall pay a civil penalty of $55,000 to the United States. The full amount of said penalty shall be paid by Defendant Apex Orchards within 30 days of the entry of this Consent Decree, by a certified or cashier's check made payable to the "Treasurer of the United States" and shall be delivered to the United States Attorney for the Eastern District of California. Payment shall accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, Defendant Apex Orchards shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel. Payments made pursuant to this Paragraph shall not be deductible for federal or state tax purposes.

VIII. MISCELLANEOUS

A. Each party shall bear its own costs and attorneys fees in this action.

B. This Decree in no way affects Defendants' responsibilities to comply with all federal, state and local laws and regulations.

C. Either DEI or the United States may move to terminate this Decree upon submission to the Court of data from the CEMs ++EP++ evidencing no more than five exceedances of the emission limits set forth in Paragraph III E over a period of 180 days, provided that all penalties that are due have been paid.

Page 11

Exceedances resulting from circumstances beyond the control of Defendant DEI as determined in Paragraphs VI(e)(2) or VI(e)(3), shall not count for purposes of this Paragraph.

D. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Decree.

E. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, U.S. EPA Region 9, and the Assistant Administrator for Enforcement and Compliance Monitoring, U.S. EPA, and the Defendants.

F. Entry of this Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims of the United States alleged in its complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations or affect the authority of the United States to seek enforcement of this Decree or immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize Defendants from violations of other applicable law.

G. The final approval and entry of this Decree are ++EP++ subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

Page 12

This Consent Decree is entered on this (blank) date of (blank), 1988.

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered.

CONSENTED TO:

UNITED STATES OF AMERICA,

Plaintiff

Dated: (blank)

BY: /s/

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Dated: February 2, 1988

BY: /s/

WILLIAM W. WESTERFIELD, III

Attorney

Environmental Enforcement Section

U.S. Department of Justice

Washington, D.C. 20530

Dated: (blank)

BY: /s/

THOMAS L. ADAMS

Assistant Administrator for Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

Page 13

Dated: 12-23-87

BY: /s/

JUDITH E. AYRES

Regional Administrator

U.S. Environmental Protection Agency

Region 9

215 Fremon Street

San Francisco, CA 94105

DAVID F. LEVI

United States Attorney

Eastern District of California

Dated: (blank)

BY:

EDWARD L. KNAPP

Assistant United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, CA 95814

CONSENTED TO:

APEX ORCHARD, INCORPORATED

Defendant

Dated: December 9, 1987

BY: /s/

LAWRENCE J. STRAW, JR.

Straw & Gilmartin

11377 West Olympic Boulevard

Tenth Floor

Los Angeles, CA 90064

CONSENTED TO:

DEI-COAGRI, INC.

Defendant

Dated: December 18, 1987

BY: /s/

JOHN D. COOPER

Brobeck, Phleger & Harrison

One Market Plaza

San Francisco, CA 94105

APEX ORCHARDS, INC.

DOC 01 OF 02

AMENDED COMPLAINT

09-89-C015

CAA

MISC

19880529

19870612

CAD981676398

APEX ORCHARD DRIVER RD BOILER

BAKERSFIELD, CA

87-0871-LKK

09

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff, v. APEX ORCHARDS, INCORPORATED, Defendant. Civil Action No. 87-0871-L.K.K.

AMENDED COMPLAINT FOR INJUNCTIVE RELIEF AND CIVIL PENALTIES (CLEAN AIR ACT, 42 U.S.C. Section 7401 et seq.)

NOW INTO COURT comes the United States of America ("plaintiff"), by and through its undersigned attorneys, by the authority of the Attorney General of the United States, and at ++EP++ the request of the Administrator of the United States Environmental Protection Agency ("EPA"), and amends its Complaint in this action pursuant to Rule 15(a) of the Federal Rules of Civil Procedure to allege that:

Page 2 JURISDICTION AND VENUE

1. This is a civil action for injunctive relief and for civil penalties for violations by defendants Apex Orchards, Incorporated ("Apex") and DEI-COAGRI, Inc. of the Clean Air Act, 42 U.S.C. Section 7401 et seq. ("the Act"), and EPA regulations promulgated under the Act. Plaintiff seeks to enjoin the defendants from violating the federally-approved California State Implementation Plan ("SIP") at its Bakersfield facility. This Court has jurisdiction over this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-Section 1331, 1345 and 1355. Venue is proper in this district pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), and 28 U.S.C. Section 1391(c).

THE DEFENDANT

2. Defendant Apex is a corporation organized under the laws of the State of Nevada with its headquarters in Dallas, Texas. From its construction in 1981-1982 until June 23, 1987, Defendant Apex, or its corporate predecessor Superior Farming Company, owned and operated a biomass-fired boiler ("Facility") located on Driver Rd., 1/4 mile north of Kimberlina Rd., near Bakersfield, in Kern County California. ++EP++ On or about June 23, 1987, Apex sold the Facility to DEI-COAGRI, Inc.

Page 3

At the time of the sale of the Facility, the Facility was the only substantial asset of Apex, and since sale of the facility to DEI-COAGRI, Inc., Apex has not possessed any significant assets or engaged in active business operations.

3. Defendant DEI-COAGRI, Inc. ("DEI") is a corporation organized under the laws of the State of California. DEI has owned the facility from June 23, 1987 until the present. DEI is the corporate successor to Apex, whose liabilities it expressly assumed in the purchase of the Facility.

STATE IMPLEMENTATION PLAN

4. Section 109 of the Act, 42 U.S.C. Section 7409 (1967), requires the EPA Administrator ("Administrator") to promulgate primary and secondary ambient air quality standards for air pollutants, including carbon monoxide. On November 25, 1971, primary and secondary National Ambient Air Quality Standards ("NAAQS") for carbon monoxide were promulgated and later published at 40 C.F.R. Section 50.8.

5. Section 110 of the Act, 42 U.S.C. Section 7410 (1977) requires the Administrator to approve any SIP for the implementation, maintenance and enforcement of such ambient air quality standards within specified time limits. Upon approval, the SIP can be enforced by the federal government under Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

THE PREVENTION OF SIGNIFICANT DETERIORATION REGULATIONS ++EP++ Page 4

6. Section 161 of the Act, 42 U.S.C. Section 7471, requires each SIP to contain such measures as may be necessary to ensure prevention of significant deterioration of air quality in areas meeting the NAAQS (so-called attainment or clean areas).

7. California has not developed prevention of significant deterioration (PSD) regulations. Accordingly, under the authority of Section 110 of the Act, 42 U.S.C. Section 7410, EPA incorporated provisions of the federally promulgated PSD regulations, 40 C.F.R. Section 52.21(b) through (w), into the California SIP. 40 C.F.R. Section 52.270(3).

8. The PSD regulations establish a permitting program for construction of any major stationary source in an attainment or unclassified area. A source needs a PSD permit if it emits, or has the potential to emit, 250 tons per year (TPY) or more any pollutant regulated under the Act, such as carbon monoxide. 40 C.F.R. Section 52.21.

9. Kern County is an attainment area for carbon monoxide. 40 C.F. R. Section 52.221.

VIOLATIONS AND CLAIMS FOR RELIEF

10. On or about October 24 and 25, 1985, a source test of the Facility conducted by Chemecology Corporation revealed that the Facility was emitting approximately 538.7 TPY of carbon monoxide.

11. The Facility has emitted and continues to have the potential to emit 250 TPY or more of carbon monoxide. ++EP++

Page 5

12. Pursuant to the PSD regulations set forth above, the owner of the Facility was required to obtain a PSD permit for the Facility.

13. Neither Apex nor DEI have ever applied for or obtained a PSD permit for the Facility.

14. On or about July 19, 1986, and pursuant to 42 U.S.C. Section 7413(a)(1), EPA issued a Notice of Violation ("NOV") to Apex notifying Apex that the Facility was operating in violation of the PSD regulations and the California SIP. Nevertheless, Apex continued to operate the Facility in violation of the PSD regulations and the California SIP for more than thirty (30) days after being so notified by EPA.

15. DEI-COAGRI, Inc. has been notified of the violations described above and is in receipt of a copy of the NOV issued to Apex. Additionally, in correspondence with EPA, DEI-COAGRI, Inc. has waived service of the NOV and admitted to the subject matter jurisdiction of this Court. Further, as successor to Apex, and by assuming the liabilities of Apex, DEI is subject to the NOV. Accordingly, DEI is liable for violations of the PSD regulations which occurred due to operations of the facility without a PSD permit for more than thirty (30) days following issuance of the NOV.

16. Under Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b), defendants are subject to injunctive relief and are liable for civil penalties of up to $25,000 for each day of violation of the PSD regulations. ++EP++

Page 6

17. Notice of the commencement of this action has been given to the State of California as required by Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

RELIEF REQUESTED

WHEREFORE, Plaintiff United States of America respectfully prays this Court to grant the following relief:

1. Imposition of civil penalties of $25,000 per violation for each day the defendants have violated the Clean Air Act, California State Implementation Plan and 40 C.F.R. Section 60.7, Section 60.8, Section 60.11 and Section 60.502;

2. Entry of a permanent injunction against defendant DEI-COAGRI, Inc. requiring it to cease violating the Clean Air Act and regulations promulgated thereunder;

3. Award costs of this action and attorney fees against the defendants and in favor of the United States of America; and

4. Such further relief as this Court may deem just and proper.

Respectfully submitted,

/s/

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources

Division

U.S. Department of Justice

9th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530 ++EP++

Page 7

/s/

WILLIAM W. WESTERFIELD, III

Attorney

Environmental Enforcement Section

Land and Natural Resources

Division

U.S. Department of Justice

9th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

DAVID F. LEVI

United States Attorney

Eastern District of California

By:

EDWARD L. KNAPP

Assistant United States Attorney

560 Capitol Mall

Sacramento, CA 95814

OF COUNSEL:

ROBERT BERGSTROM

Office of Regional Counsel

U.S. Environmental Protection

Agency

Region 9

215 Fremont Street

San Francisco, CA 94105

JUDY KATZ

U.S. Environmental Protection

Agency

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

HAWAIIAN ELECTRIC CO., INC.

DOC 01 OF 01

CONSENT DECREE

09-89-C014

CAA

ELECT

19890208

19890207

HID982059933

HAWAIIAN ELECTRIC CO., INC.

OAHU, HI

88-00730 ACK

09

CONSENT DECREE, U.S. V. HAWAIIAN ELECTRIC COMPANY

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

UNITED STATES OF AMERICA, Plaintiff,

v.

HAWAIIAN ELECTRIC COMPANY, Defendant.

Civil Action No.

CONSENT DECREE

Page 2

WHEREAS, Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency (EPA), has filed a Complaint alleging that defendant Hawaiian Electric Company (HECO), an Hawaii Corporation, owns and is operating an oil-fired power plant on the Island of Oahu, Hawaii in violation of the emission limits contained in a prevention of significant deterioration (PSD) permit in violation of the Clean Air Act (Act), 42 U.S.C. Sub-Section 7401, et seq.

WHEREAS, the Complaint alleges that the violation of the Act continued for more than 30 days after Plaintiff gave Defendant notice of the same. The parties stipulate that the Court has jurisdiction over the parties and subject matter of this litigation.

WHEREAS, on January 25, 1979 EPA issued PSD permit 78-02 to HECO, thereby granting approval for the construction of one 141-megawatt oil-fired steam electric generating unit at the Kahe Generating Station, Kahe Point, Hawaii (Kahe Unit 6 or the facility). On March 31, 1981, HECO began commercial operation of Kahe Unit 6. On April 22, 1982, EPA issued a Notice of Violation (NOV) to HECO pursuant to Section 113(a) of the Act.

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. This Decree shall not ++EP++

constitute evidence or admission of any issue of fact or law by either party, nor an admission of liability on behalf of HECO.

Page 3

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I JURISDICTION

1. This Court has jurisdiction of the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U. S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355.

2. The Court has jurisdiction over the parties and venue is proper in this Court. Defendant waives all objections to the Court's personal jurisdiction and venue for this action.

II PARTIES BOUND

3. The provisions of this Consent Decree shall apply to and be binding upon the Defendant, its officers, directors, agents, servants, employees, successors, and assigns. Upon sale or transfer of the facility, Defendant shall attach a copy of this Consent Decree to the bill of sale, assignment, or other agreement by which the facility is sold or transferred, and shall make performance of its obligations under this Consent Decree an obligation of any purchaser or transferee.

4. Defendant shall, within five (5) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Decree accompanied by a summary explanation of its terms to all persons bound by this Decree, as specified in Paragraph 3, in a position to ensure compliance herewith. Defendant shall ++EP++

provide EPA, no more than 5 working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

Page 4 III DEFINITIONS

5. For purposes of this Consent Decree, the following definitions shall apply:

a. "The Court" means the United States District Court for the District of Hawaii.

b. "Draft amended permit" means PSD permit HI 78-02 with the revisions proposed by EPA.

c. "Final amended permit" means the amended version of PSD permit HI 78-02 that is issued by EPA to HECO following public notice and comment on the Draft amended permit.

d. "NOV" means the Notice of Violation issued by EPA to HECO, on April 22, 1982, pursuant to Section 113(a) of the Clean Air Act, 42 U. S.C. Section 7413(a).

e. "NOx" means oxides of nitrogen or nitrogen oxides (expressed as NO(2)) as measured by EPA Method 7 (40 C.F.R. Part 60, Appendix A) or by continuous emission monitoring system (CEMS) operated according to 40 CFR Part 60, Appendix B or equivalent approved by EPA.

f. "PM" means particulate matter as measured by EPA Method 5 (40 C. F.R. Part 60, Appendix A) or equivalent approved by EPA. ++EP++

Page 5

g. "PSD permit" means a permit for Prevention of Significant Deterioration, issued pursuant to 40 C.F.R. Section 52.21. The PSD permit for Kahe Unit 6 is PSD permit HI 78-02, issued January 25, 1979, and amended on March 23, 1982 (change in references to applicable NSPS regulations).

h. "Retrofit" means the installation of low-NOx burners as set forth in Paragraph 8, below.

IV COMPLIANCE PROGRAM

6. The parties agree that the retrofit of Kahe Unit 6 with the low NOx technology described below satisfies the control technology requirements of the PSD permit for Kahe Unit 6. The parties further agree that following the Retrofit, Kahe Unit 6 shall be operated to minimize particulate emissions while still meeting the applicable NOx limit under this Consent Decree. Upon application by HECO, EPA shall amend the PSD permit for Kahe Unit 6 to set NOx and PM emission limits that Unit 6 is capable of achieving under normal operating conditions consistent with minimizing emissions after the Retrofit. EPA will not propose NOx and PM emission limits in the Draft amended permit that are more stringent than the emission limits set forth in Paragraph 7, provided that HECO modifies Kahe Unit 6 as set forth in Paragraph 8.

7. The purpose of the Retrofit is to facilitate compliance with the 0.23 lbs/10(6) BTU emission limit for NOx (now mistakenly specified in the PSD permit as 0.23 lbs/10(6) BTU for NO(2)) and the 0.056 lbs/10(6) BTU emission limit for PM as set forth in Paragraph 10. ++EP++

Page 6

8. HECO shall comply with the following schedule:

a. By May 15, 1988, HECO shall temporarily discontinue operation of Kahe Unit 6 and shall commence construction and installation of the following equipment at the Kahe Unit 6:

(i). Replacement of all nine existing burners with new primary gas-dual register burners designed for low NOx emissions. These shall be PG-DRB burners, purchased from Babcock & Wilcox under license from Babcock-Hitachi.

(ii). Conversion of the existing burner steam atomizing system to a constant steam-over-oil differential pressure system over the load range.

(iii). Addition of three overfire air ports at the rear wall and three overfire air ports at the front wall to obtain two-stage combustion for reduced NOx formation.

(iv). Addition of ductwork to direct recirculated flue gases to the new burners and to direct air to the new overfire air ports.

(v). Modification of the existing Bailey 860 burner control system to be compatible with the new low NOx combustion system, including the supply of new drives and new flame detectors.

b. During the Post-Shakedown Period, and thereafter, HECO shall operate the Kahe Unit 6 in accordance with the operating and maintenance instructions of the manufacturer of the low NOx burners and in a manner that minimizes particulate emissions, while still meeting the applicable NOx limit. ++EP++

Page 7 Interim Emission Limits

9. From the date of this Consent Decree until HECO temporarily discontinues operation of Kahe Unit 6, HECO shall continue to use flue gas recirculation, low excess air, special burner tips and staged combustion via burners out of service (BOOS) at the Kahe Unit 6 and the Kahe Unit 6 shall not exceed the following interim limits:

Pollutant Limit NOx (as NO2, determined 0.29 lbs/106 BTU by EPA Test Method 7 or equivalent approved by EPA) Particulate Matter 0.092 lbs/106 BTU (determined by EPA Test Method 5 or equivalent approved by EPA) Post-Shakedown Emission Limits

10. On December 15, 1988, and thereafter until a final amended permit is issued (the "Post-Shakedown Period"), Kahe Unit 6 shall not exceed the following emission limits, unless HECO shows to the satisfaction of EPA that these limits are not technically feasible, i. e. are not achievable under normal operating conditions consistent with minimizing emissions:

Pollutant Limit NOx (as NO2, determined 0.23 lbs/ 106 BTU by 30 day rolling average of the CEMS) Particulate Matter 0.056 lbs/ 106 BTU (determined by EPA Test Method 5 or equivalent approved by EPA) ++EP++ Page 8

11. On or before December 15, 1988, HECO may petition the Director of the Air Management Division, EPA Region 9, to modify the Post-Shakedown Emission Limits. This petition shall include: (1) source test data following the retrofit, (2) a description of the boiler conditions during these tests, (3) CEMS data for NOx emissions, and (4) an analysis of the data and a rationale for the requested modification of the Post-Shakedown Emission Limits.

12. EPA shall act on any petition submitted by HECO within 60 days of receipt. If EPA determines that HECO has made a satisfactory showing, then the Post-Shakedown Emission Limits shall be modified by agreement of the parties. If EPA determines that HECO has not made a satisfactory showing, EPA shall provide a written statement of the basis for its decision. HECO shall then have 60 days from the date when the statement is provided to HECO in which to correct any deficiency or make appropriate operational changes.

13. The stipulated penalties provided in Paragraph 24 shall not apply by reason of HECO's petition to modify the Post-Shakedown Emission Limits for the periods during which EPA is considering a petition to modify the Post-Shakedown Emission Limits, or the 60 day period granted to HECO to correct any deficiencies or make operational changes. This exception to the applicability of stipulated penalties shall not apply to any other obligation or act of HECO which would otherwise subject HECO to stipulated penalties under this Consent Decree. ++EP++

Page 9

14. Compliance with the NOx Post-Shakedown Emission Limits shall be determined by monthly submissions of the results of the CEMS. HECO shall submit the results of the CEMS to EPA by the 15th day of any month following a month in which any emission limits for NOx apply. After the lodging of this Consent Decree, but no later than December 15, 1988, HECO shall conduct and pass the performance specification tests for CEMS for NOx set forth in 40 C.F.R. 60, Appendix B.

15. Compliance with the PM emission limits (both Interim and Post-Shakedown) shall be determined by monthly source tests performed according to EPA Method 5 or equivalent as approved by EPA (40 CFR Part 60, Appendix A). The source tests shall be conducted when Kahe Unit 6 is operating at its maximum operating capacity. HECO shall submit the results of its monthly source tests to EPA, including the NOx levels at the time of the source test as measured by CEMS, within twenty-five (25) days of each test. HECO shall inform EPA and Hawaii Department of Health (HDOH) at least thirty (30) days in advance of the scheduled test dates and shall allow representatives of EPA and HDOH to observe such tests.

V PERMIT MODIFICATION

16. Following the Retrofit, but no later than June 15, 1989, HECO may submit to EPA a request for modification of the emission limits in the PSD permit for Kahe Unit 6. This request shall be in writing and shall contain facts or reasons supporting the request. ++EP++

Page 10

17. Within ninety (90) days after receipt of HECO's written request for modification of the emission limits in the PSD permit for Kahe Unit 6, EPA shall publicly notice a Draft amended permit. The Draft amended permit shall take into account the test data submitted by HECO and shall be consistent with Paragraph 6 of this Decree. The Draft amended permit shall be accompanied by a statement of basis or fact sheet and shall be based upon the administrative record, publicly noticed, and made available for public comment in accordance with the procedures set forth in 40 C.F.R. Sub-Section 124.6-124.20. Thirty (30) days shall be allowed for public comment.

18. EPA shall issue a final amended PSD permit decision for Kahe Unit 6 within ninety (90) days after public notice of the Draft amended permit provided there are no significant comments. In the case of significant comments, EPA shall issue the Final amended permit expeditiously from the time of receipt of the comments.

19. The conditions of the Final amended permit shall replace the Post-Shakedown Emission Limits for NOx and PM set forth above.

20. All reporting requirements identified in this Decree shall continue for the entire time this Decree is in effect. ++EP++

Page 11 VI ACCESS AND INSPECTION

21. EPA, HDOH and their contractors and agents shall be allowed to enter and inspect the facility, including the record of the data produced by the continuous emission monitors, at all reasonable times to ensure compliance with this Decree. This paragraph in no way limits EPA's right under Section 114 of the Act.

VII NOTIFICATION

22. All submissions and notices required by this Consent Decree shall be sent to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105

Assistant Attorney General

Land & Natural Resources Division

U.S. Department of Justice

10th Street & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

Director of Health

Hawaii Department of Health

P.O. Box 3378

Honolulu, HI 96801

David R. Andrews

McCutchen, Doyle, Brown & Enersen

Three Embarcadero Center

San Francisco, California 94111

Jackie Erickson

Corporate Counsel

Hawaiian Electric Company, Inc.

P.O. 2750

Honolulu, Hawaii 96813

23. All submissions shall be signed and affirmed to by an appropriate corporate officer or a responsible delegate. ++EP++

Page 12 VIII STIPULATED PENALTIES

24. Defendant HECO shall pay stipulated penalties for failure to comply with any requirement of Section s IV, V, VI, VIII and IX of this Consent Decree according to the following schedule:

For violations of Paragraphs 8, 9, 10 or 30 of this Consent Decree:

1) $ 5,000 for each day of violation days one through seven.

2) $ 10,000 for each day of violation over seven days

For violations of any other Paragraphs of the above-specified Section s of this Consent Decree:

1) $ 1,000 for each day of violation days one through seven.

2) $ 2,000 for each day of violation over seven days.

25. Any penalty shall be due and payable upon demand and payment shall be made by certified or cashier's check payable to "Treasurer of the United States", and delivered to the United States Attorney for the District of Hawaii. Payment shall be accompanied by a transmittal letter identifying this Decree and paragraph. Upon payment of a penalty, Defendant shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel.

26. Amounts paid pursuant to this Paragraph are in the nature of a civil penalty and are not deductible for federal or state tax purposes. ++EP++

27. Penalties paid pursuant to this Consent Decree are not the Plaintiff's exclusive remedy for the Defendant's violation of this Consent Decree and Plaintiff reserves its right to seek all injunctive relief under the Clean Air Act and to seek such other relief under the federal statutes to which it is entitled.

28. a. If any event occurs which causes or may cause delays in the achievement of compliance by HECO as provided in the Consent Decree, HECO shall notify EPA and HDOH in writing within ten (10) days of Defendant's knowledge of the delay or anticipated delay, describing in detail the anticipated length of delay, the reason for the delay, the measures taken and to be taken by Defendant to prevent or minimize the delay, and the timetable by which those measures have or will be implemented. HECO shall adopt all reasonable measures to avoid or minimize any such delay.

b. If Plaintiff and HECO through their counsels agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances beyond the control of HECO including unavoidable technical or operational difficulties, the time for performance hereunder may be extended for a period no longer than the delay resulting from such circumstances and there shall be no obligation to pay stipulated penalties for such period of delay. In such event, Plaintiff and HECO shall stipulate to such extension of time, and the Defendant's time for performance shall be so extended. Extensions ++EP++ of time will not be unreasonably withheld by EPA.

Page 14

In the event Plaintiff and HECO cannot agree, any party may submit the matter to this Court for resolution.

c. The burden of proving that any delay is caused by circumstances beyond the control of HECO shall rest with HECO. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree, or financial difficulties, will not be a basis for changes in this Consent Decree or extensions of time. Any action or failure to act by HECO shall under no circumstances be a basis for changes in this Decree or extension of time nor excuse the liability of HECO for stipulated penalties under Paragraph 24. Delay in achievement of a requirement of this Decree shall not necessarily justify or excuse delay in achievement of subsequent requirements.

29. EPA reserves the right to impose, consistent with applicable laws and regulations, requirements for Kahe Unit 6 that are more stringent than those set forth in this Consent Decree, except that compliance with the terms of this Consent Decree will satisfy all control technology requirements and will resolve the NOx and PM emission limits of the PSD permit for Kahe Unit 6. In addition, EPA reserves the right to seek any and all relief for violations of law or this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C. Section 7603; except that, for violations that are subject to stipulated penalties under this Consent Decree, EPA waives the right to seek civil penalties under Section 113 of the Act, other than the penalties provided in this Consent Decree, for those violations. ++EP++

Page 15 IX CIVIL PENALTY

30. Defendant HECO shall pay a civil penalty of $79,000 to the United States. The full amount of said penalty shall be paid by Defendant within thirty (30) days of the entry of this Consent Decree, by a certified or cashier's check made payable to the "Treasurer of the United States" and shall be delivered to United States Attorney for the District of Hawaii. Payment shall be accompanied by a transmittal letter identifying this Decree and this paragraph. Upon payment of the penalty, Defendant shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel. Payments made pursuant to this Paragraph shall not be deductible for federal or state tax purposes.

X MISCELLANEOUS

31. Each party shall bear its own costs and attorneys fees in this action.

32. This Decree in no way affects Defendant's responsibilities to comply with all federal, state and local laws and regulations.

33. Either HECO or the United States may move to terminate this Decree sixty (60) days after issuance of the final PSD permit, provided that all penalties that are due have been paid.

34. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Decree. ++EP++

Page 16

35. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, U.S. EPA Region 9, and the Assistant Administrator for Enforcement and Compliance Monitoring, U.S. EPA, and the Defendant.

36. Nothing in this Consent Decree shall be construed as an admission by HECO of any violation of law or of any issue of fact or law. Nothing in this Consent Decree may be used against HECO as evidence of any violation or as an admission against interest. Nothing in this Consent Decree shall prejudice waive or impair any right, remedy, or defense HECO may have in any other or future legal proceeding.

37. Entry of this Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims of the United States alleged in its complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations.

38. The final approval and entry of this Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree. ++EP++

Page 17

This Consent Decree is approved and so ordered on this day of Feb 7 1989.

/s/(ILLEGIBLE)

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered.

CONSENTED TO:

UNITED STATES OF AMERICA, Plaintiff

Dated: Sep 22 1988

BY: /s/Roger J. Marzulla

ROGER J. MARZULLA

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Dated: 9/22/88

BY: /s/William W. Westerfield, III

WILLIAM W. WESTERFIELD, III

Attorney

Environmental Enforcement Section

U.S. Department of Justice

Washington, D.C. 20530

United States of America,

Plaintiff

Hawaiian Electric Company,

Defendant

Civil Action No.

CONSENT DECREE ++EP++

Page 18

Dated:

BY: DANIEL BENT

United States Attorney

District of Hawaii

/s/(ILLEGIBLE)

MARK J. BENNETT Assistant United

States Attorney

United States Courthouse, Rm.

C-242

300 Ala Moana Blvd., Box 50183

Honolulu, HI 96850

Dated:

BY: /s/Thomas L. Adams

THOMAS L. ADAMS

Assistant Administrator for Enforcement and Compliance and Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Dated: 6-29-88

BY: /s/Daniel W. McGovern

DANIEL W. MCGOVERN

Regional Administrator

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, CA 94105

CONSENTED TO:

HAWAIIAN ELECTRIC COMPANY Defendant

Dated:

BY: /s/Harwood D. Williamson

HARWOOD D. WILLIAMSON

President

Hawaiian Electric Company, Inc.

P.O. Box 2750

Honolulu, HI 96813 ++EP++

SIGNAL ENERGY SYSTEM, INC.

DOC 03 OF 03

CONSENT DECREE (PROPOSED)

09-89-C012

CAA

ELECT

19880315

19880315

CAD982040297

SIGNAL ENERGY - COTTONWOOD

ANDERSON, CA

CIVS-88-0333 LKK-EM

09

CONSENT DECREE (PROPOSED), U.S. v. SIGNAL ENERGY SYSTEMS, INC.

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

SIGNAL ENERGY SYSTEMS, INC., Defendant.

Civil Action No.

CONSENT DECREE (PROPOSED)

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a Complaint alleging that Signal Energy Systems, Inc. ("Signal"), a Delaware corporation, began and is continuing to construct, a biomass-fired boiler in Shasta County, California ++EP++

without an effective prevention of significant deterioration ("PSD") permit in violation of the Clean Air Act ("Act"), 42 U.S.C. Sub-Section 7401, et seq.

Page 2

The Complaint alleges that the violation of the Act continued for more than 30 days after EPA gave Signal notice of the same.

The parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. This Decree shall not constitute evidence or admission of any issue of fact or law by either party.

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The Complaint states a claim upon which relief may be granted against Signal pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b). ++EP++

Page 3

2. Signal acknowledges notice pursuant to 42 U.S.C. Section 7413( a)(1) and admits jurisdiction pursuant to 42 U.S.C. Section 7413(b).

3. The Court has personal jurisdiction over Signal and venue is proper in this Court. Signal waives all objections to personal jurisdiction and venue. The parties agree to be bound by the terms of this Consent Decree and not to contest its validity in any subsequent proceeding.

EFFECTIVE DATE

4. Except where a different date is specified herein, the parties agree to be bound by the terms and conditions of this Consent Decree upon its lodging with the Court. The terms and conditions of this Consent Decree shall cease to bind the parties if this Court denies a motion to enter this Consent Decree.

PARTIES BOUND

5. The provisions of this Consent Decree shall apply to and be binding upon Signal, its officers, directors, agents, servants, employees, successors, and assigns and upon the United States on behalf of the EPA. Signal shall give prior notice of this Consent Decree to any successor in interest prior to the transfer of any ownership interest or right to operate the Cottonwood facility, including but not limited to, the sale, lease or licensing of others to operate the facility. ++EP++

Page 4

Upon sale or transfer of the facility, Signal shall attach a copy of this Consent Decree to the bill of sale, assignment, or other agreement by which the facility is sold or transferred, and shall make performance of the obligations of Signal under this Consent Decree an obligation of any purchaser or transferee.

6. Signal shall, within five days of entry of this Consent Decree and as appropriate thereafter, give copies of the Consent Decree accompanied by a summary explanation of its terms, to all persons bound by this Decree as specified in Paragraph 5, including notice to any successors in interest to property governed by this Consent Decree prior to the transfer of said property, in a position to ensure or affect compliance herewith. Signal shall provide EPA, no more than five working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

DEFINITIONS

7. For the purposes of this Consent Decree, the following definitions shall apply:

a). "Ammonia Injection System" -- The patented, Exxon Thermal DeNox ammonia injection system. This system physically consists of ammonia storage tanks, pumps, injection ports, and other auxiliary equipment. The system will deliver ammonia from the ammonia tank via pumps to the injector ports located at various positions within the boilers. Ammonia is mixed with a ++EP++

dispersant carrier gas such as steam or compressed air prior to injection into the boilers to insure good ammonia mixing within the boiler.

Page 5

Ammonia (NH3) reacts with nitric oxide (NO) to form N2 and H2O thereby reducing the nitrogen oxide emission rate.

b). "Authority to Construct" -- The Authority to Construct Signal Cottonwood Energy Facility issued by the Shasta County Air Quality Management District on November 13, 1986, pursuant to a delegation of PSD, New Source Review authority from USEPA Region 9.

c). Continuous Emission Monitoring data ("CEM data") -- Data reflecting emission rates of specified pollutants and process parameters on a continuous basis, as recorded by the facility's Continuous Emission Monitoring Systems.

d). Continuous Emission Monitoring Systems ("CEMS") -- The total equipment required under federal and state regulations to continuously sample, analyze, and to provide a permanent record of, emissions or process parameters.

e). "Cottonwood" facility -- The bio-mass fired power plant constructed or being constructed by Signal Energy Systems, Inc. in Shasta County, California.

f). "NOx" -- Oxides of Nitrogen.

g). "O2" -- Molecular Oxygen.

h). "PM" -- "Particulate matter" as defined in 40 C.F.R. Section 60.2 (1987). ++EP++

Page 6

i). "Shasta AQMD" -- The Shasta County Air Quality Management District, Shasta County, California.

COMPLIANCE SCHEDULE

8. Signal shall install the Ammonia Injection System on all three boilers ("units") at the Cottonwood facility. Signal shall operate the Ammonia Injection System in such a manner as to limit NOx emissions to a maximum of 0.15 lb/MMBTU heat input on each unit, averaged over any thirty (30) day period, and to limit the PM emission rate to maximum of 0.01 gr/dscf at 12% CO2.

9. Signal shall prepare or obtain a process specification for the Ammonia Injection System which shall be provided to EPA Region 9 and Shasta AQMD prior to commencing construction.

Construction Schedule

10. Signal shall take all actions necessary to obtain a revision to, or reissuance of, the Authority to Construct to reflect the NOx and PM emission limits contained in Paragraph 8, and to obtain all other permits or permit revisions required to meet the construction and testing schedules contained herein. All actions necessary include but are not limited to, appealing any denial of any permit or permit revision to the appropriate governmental body or entity and defending any permit issuance or revision against any challenge. ++EP++

Page 7

11. Signal shall issue final purchase orders for all equipment necessary to construct the Ammonia Injection System no later than five working days from the date a final and effective revised or reissued Authority to Construct is issued for the Cottonwood facility.

12. Signal shall install the Ammonia Injection System and complete all construction and system engineering no later than thirty two (32) weeks from the date this Consent Decree is entered.

Testing and Compliance Schedule

13. Signal agrees to conduct performance tests on the Ammonia Injection System and achieve compliance with the NOx emission limit of 0.15 lb/MMBTU heat input on each unit and the PM emission limit of 0.01 gr/dscf at 12% CO2 in accordance with the following schedule:

a). Complete Construction pursuant

Day 1

to Paragraph 12. b). Complete startup and shakedown Day 90 testing on Unit 1. c). Complete Performance Specifi- Day 120 or within 30 cation Tests on CEMS for Unit 1. days of completion of shakedown d). Complete PM testing on Unit 1. Day 150 e). First day of NOx CEM, measure- Day 151 ments which will be counted in a 30 day rolling average on Unit 1. f). Complete startup and shakedown Day 135 testing on Units 2 and 3. g). Complete Performance Specifi- Day 165 or within 30 days

++EP++

cation tests on CEMS for Units of completion of shake- 2 and 3. down h). Complete PM testing on Day 195 Units 2 and 3. i). First day of NOx CEM measure- Day 196 ments which will be counted in a 30-day rolling average on Units 2 and 3. Page 8

14. For purposes of demonstrating compliance with the 0.15 lb/MMBTU NOx emission limit, a 30-day rolling average emission rate will be calculated as the average of all hourly emissions monitoring data recorded in any 30-day period.

15. Conversion of NOx measurements (ppm, dry) and O2 measurements (% by volume, dry) to equivalent emission rates in lb/MMBTU shall be made in accordance with the procedures set forth at 40 C.F.R. Section 60.45 (1987), "Emission and Fuel Monitoring."

16. For purposes of demonstrating compliance with the PM emission limit of 0.01 gr/dscf at 12% CO2, EPA Reference Method 5 or Reference Method 17 as specified at 40 C.F.R. Part 60, Appendix A shall be used.

Continuous Emission Monitoring System

17. The Cottonwood facility is already equipped with NOx and O2 CEMS on all three units. Signal will test and calibrate the CEMS in accordance with 40 CFR Section 60.13. The CEMS shall meet the performance specifications at, and be operated in accordance with, 40 C.F.R., Part 60, Appendix B and 40 C.F.R. Sub-Section 60.13 and 60.48b (1987), or be replaced by CEMS which will meet these standards. These monitors will be used for ++EP++

both the shakedown testing and as the compliance test method for NOx and PM emission limits specified in Paragraphs 8 and 13.

Page 9

18. Signal shall notify EPA Region 9 and Shasta AQMD 30 days prior to conducting performance specification tests of the CEMS as set forth in 40 CFR Section 60.13 (1987).

Notification and Report Preparation

19. Signal shall notify EPA Region 9 and the Shasta AQMD, in writing, of completion of construction, commencement of shakedown testing of each unit, and completion of shakedown testing of each unit, of the Ammonia Injection System.

20. Signal shall submit a PM and NOx testing plan to Region 9 and the Shasta AQMD 60 days prior to testing, and submit test results within 30 days of completion of these tests.

21. Subsequent to the initial performance testing, Signal shall submit monthly NOx excess emission reports to EPA Region 9. Excess emissions shall be defined as any 30-day period, during which the average of all hourly NOx emissions monitoring data exceeds 0.15 lb/ MMBTU. In addition, Signal shall maintain a record of all CEM data generated by the CEMS and submit such data to EPA Region 9 on a monthly basis, no later than 15 days after the end of each calendar month.

ACCESS AND INSPECTION

22. Until termination of the provisions of this Consent Decree, EPA and its contractors and consultants shall have ++EP++

authority to enter the Cottonwood facility at all reasonable times, upon proper presentation of credentials to the highest ranking employee present on the premises of the Cottonwood facility for the purposes of:

Page 10

1. verifying any data or information submitted to EPA in accordance with the terms of this Consent Decree, and

2. obtaining any samples necessary for the assurance of compliance with this Consent Decree.

This provision in no way limits or otherwise affects any right of entry held by EPA pursuant to applicable federal, state or local laws, regulations, or permits.

23. Signal shall send all notices and submissions required by this Consent Decree to:

Director, Air Management Division U.S. Environmental Protection Agency Region 9 215 Fremont Street San Francisco, CA 94105

Air Pollution Control Officer Shasta County Air Quality Management District 1855 Placer Street Redding, Ca 96001

and to;

Assistant Attorney General Land & Natural Resources Division U.S. Department of Justice 10th Street & Pennsylvania Avenue, N. W. Washington, D.C. 20530

24. All submissions shall be signed and affirmed by an appropriate corporate officer or a responsible delegate. ++EP++

Page 11 STIPULATED PENALTIES

25. In the event Signal fails to comply with the compliance schedules, emission limits or reporting requirements set forth in Paragraphs 8-21 Signal shall pay stipulated penalties as set forth below:

Violation Penalty a). Failure to comply with the $2,000/day for each construction deadline of the first ten Paragraph 12. days beyond the date specified. $5,000/day for the second ten days and $10,000/day for each day thereafter. b). Failure to comply with the $2,000/day for each testing schedule in of the first ten Paragraph 13. days beyond the dates specified. $5,000/day for the secoind ten days and $10,000/day for each day thereafter. c). Failure to comply with the $5,000 for each violation emission limits in Paragraph for violations 1-5, 8. $10,000 for violations- 6-10, $15,000 for violation 11-15, and $25,000 for each violation thereafter. d). Failure to comply with the $500/day for days 1-7, reporting requirements in $1,000/day for each Paragraphs 9, and 18-21. day thereafter.

26. Any penalty accruing pursuant to Paragraph 25 shall be payable upon demand and due not later than ten days from receipt of written demand by EPA. Payment shall be made by certified or cashier's check payable to "Treasurer of the United States," and delivered to the United States Attorney for the Eastern District of California. Payment shall be ++EP++

accompanied by a transmittal letter identifying this Consent Decree and this Paragraph.

Page 12

Upon payment of a penalty, Signal shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel.

27. Amounts paid pursuant to Paragraph 25 are in the nature of a civil penalty and are not deductible for federal or state tax purposes.

28. Penalties paid pursuant to this Consent Decree are not the EPA's exclusive remedy for Signal's violation of this Consent Decree and EPA reserves its right to seek all injunctive relief under the Clean Air Act and to seek such other relief under the federal statutes to which it is entitled.

29. a). Signal's obligation to meet any requirement set out in this Decree, including achievement of compliance with any specific emission standard or regulation, may only be excused to the extent that such delay or inability to perform is beyond the control of and without the fault of Signal. Signal shall notify EPA and Shasta AQMD in writing within ten (10) days of the event which causes or may cause the (1) delay or anticipated delay in compliance, or (2) inability to achieve compliance, describing in detail the anticipated length of delay, the reason for the delay or inability to comply, the measures taken and to be taken by Signal to prevent or minimize the delay or achieve compliance, and the timetable by which ++EP++ those measures have been or will be implemented.

Page 13

Signal shall take all reasonable measures necessary to avoid or minimize any such delay or noncompliance, including, but not limited to, in the case of any inability to meet both the emission standards of this Consent Decree and any federal, state or local opacity standards:

1. Test, at Signal's expense, ammonia slip, opacity and fuel chlorine content and provide such data to Exxon, EPA, Shasta AQMD and its own engineers and consultants;

2. Consult with Exxon to obtain its recommendations for modified Ammonia Injection System operating conditions which may reduce opacity while maintaining the 0.15 lbs/MMBTU NOx emissions rate, and implement those recommendations provided such recommendations do not require alteration of the facility's normal fuel mix as set forth in the Authority to Construct and do not entail significant facility alteration or significant Ammonia Injection System modification;

3. Based on test results and recommendations from Exxon, Shasta AQMD, EPA and its own consultants, Signal shall make good faith efforts to operate the Ammonia Injection System to achieve simultaneous NOx and opacity compliance in a manner consistent with facility and Ammonia Injection System design and generally accepted power plant good operating practice; and,

4. Apply for variances from local, state and federal authorities as necessary to permit exceedances of applicable opacity standards during the period of consultation and testing provided for in Subparagraphs 1-3 above. ++EP++

Page 14

Failure by Signal to comply with the notice requirements of this Paragraph shall constitute a waiver of Signal's right to obtain an extension of time for its obligations under this Consent Decree.

b). If the parties agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances beyond the control of the Signal, the time for performance hereunder may be extended for a period no longer than the delay resulting from such circumstances and there shall be no obligation to pay stipulated penalties for such period of delay. In such event, the parties shall stipulate to such extension of time in writing, and Signal's time for performance shall be so extended. In the event the parties cannot agree, any party may submit the matter to this Court for resolution.

c). If the parties agree that the inability to comply with any emission standard established in this Consent Decree has been or will be caused by circumstances beyond the control of Signal and that Signal has used best efforts to obtain any variance or other such relief from the appropriate governmental entity which, if granted, would remove the impediment to compliance with the emission standards contained in this Consent Decree, compliance with the NOx emission limit hereunder may be excused and there shall be no obligation to pay stipulated penalties for such noncompliance. In such event, ++EP++

the parties shall stipulate to such inability to comply in writing, and agree on the lowest NOx emission limit which can be achieved without violating any other federal, state or local emission standard, in no event to exceed .20 lb/MMBTU for NOx. Once such stipulation is reached either party may petition the Court for a modification of this Consent Decree to reflect the terms of the stipulation.

Page 15

In the event the parties cannot agree, any party may submit the matter to this Court for resolution.

d). The burden of proving that any delay or inability to achieve compliance is caused by circumstances beyond the control of Signal shall rest with Signal. Increased costs or expenses associated with compliance with this Consent Decree or financial difficulties will not be a basis for changes in this Consent Decree or extensions of time. For purposes of obtaining any modification of this Consent Decree relating to NOx emission limits, Signal must demonstrate that despite good faith efforts, it is not technically feasible to simultaneously achieve the NOx standard and applicable opacity standards with the facility as designed, using the facilities normal fuel mix and the Ammonia Injection System installed and operated as required above. Any action or failure to act by Signal shall under no circumstances be a basis for changes in this Consent Decree or extension of time, nor excuse the liability of Signal for stipulated penalties. Delay in achievement of a requirement of this Consent Decree shall not necessarily ++EP++ justify or excuse delay in achievement of subsequent requirements.

Page 16

30. EPA reserves the right to impose, consistent with applicable laws and regulations, requirements for the Cottonwood facility that are more stringent than those set forth in this Consent Decree. In addition, EPA reserves the right to seek any and all relief for violations of law or of this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C. Section 7603, or California law; except that, for violations that are subject to stipulated penalties under this Consent Decree, EPA waives the right to seek civil penalties under Section 113 of the Act, other than the penalties provided in this Consent Decree, for those violations.

CIVIL PENALTY

31. Signal shall pay a civil penalty of $100,000 to the United States. The full amount of said penalty shall be paid by Signal within 30 days of the entry of this Consent Decree, by a certified or cashier's check made payable to the "Treasurer of the United States" and shall be delivered to United States Attorney for the Eastern District of California. Payment shall he accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Upon payment of the penalty, Signal shall notify EPA by sending a photocopy of the check and transmittal letter to EPA Region 9, Office of Regional Counsel. Payments made pursuant to this ++EP++ Paragraph shall not be deductible for federal or state tax purposes.

Page 17 MISCELLANEOUS

32. Either Signal or EPA may move to terminate this Consent Decree upon an adequate showing to the Court that all permits or permit revisions required by this Consent Decree have been obtained, that all provisions of this Consent Decree have been complied with, and that based upon 12 months of CEM data as specified in Paragraph 21, no further modifications of the construction or operation permits as they relate to emission of oxides of nitrogen are expected, provided that all penalties that are due have been paid. For purposes of this Paragraph, the 12 months of CEM data shall commence upon the day the requirements of Paragraph 13(h) have been satisfied.

33. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Consent Decree.

34. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, EPA Region 9, the Assistant Administrator for Enforcement and Compliance Monitoring, EPA, and Signal. ++EP++

35. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims of the United States alleged in its Complaint filed herein. Nothing herein shall, however, constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations. In addition, this Consent Decree in no way affects Signal's responsibility to comply with all federal, state, and local laws and regulations.

36. The final approval and entry of this Consent Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

37. Each party shall bear its own costs and disbursements in this action. Should Signal subsequently be determined to have knowingly violated the terms and conditions of this Consent Decree, Signal shall be liable to the United States for any costs and disbursements incurred by the United States in any action against Signal for noncompliance with this Consent Decree.

38. EPA does not, by its consent to the entry of this Consent Decree, warrant or aver in any manner that Signal's complete compliance with this Consent Decree will result in compliance with the provisions of the Clean Air Act, 42 U.S.C. Section 7401 et seq., other than those provisions to which this Consent Decree is addressed. ++EP++

Page 19

39. EPA does not waive any rights or remedies available to it, for any violation by Signal of federal or state laws, regulations, or permit conditions following completion of the requirements of this Consent Decree.

This Consent Decree is entered on this day of

1988.

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered.

CONSENTED TO:

UNITED STATES OF AMERICA, Plaintiff

By: /s/ Roger J. Marzulla

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530 ++EP++

Dated: 2/23/88

Page 20

By: /s/ Philip Brooks

PHILLIP A. BROOKS

Attorney

Environmental Enforcement Section

United States Department of Justice

Washington, D.C. 20530

Dated: 3/25/88

By: /s/ Louis Demas

LOUIS DEMAS

Assistant United States Attorney

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Dated: 3/15/88

By: /s/ Thomas L. Adams Jr.

THOMAS L. ADAMS

Assistant Administrator for Enforcement and Compliance and

Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Dated: JAN 15 1988

By: /s/ John Wise

JUDITH E. AYRES for

Regional Administrator

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, CA 94105

Dated: 12.23.87

By: /s/ Robert W. Bergstrom

ROBERT W. BERGSTROM

Assistant Regional Counsel

U.S. Environmental Protection Agency, Region 9

215 Fremont St.

San Francisco, California 94105 ++EP++

Dated: 12/23/87 ++EP++

Page 21

SIGNAL ENERGY SYSTEMS, INC.

Defendant

By: /s/ John Rohrer

JOHN ROHRER

Vice President

Signal Energy Systems, Inc.

1 Liberty Lane

Hampton, NH 03842

Dated: 12/23/87

By: /s/ Harold Himmelman

HAROLD HIMMELMAN, ESQ.

Beveridge & Diamond, P.C.

1333 New Hampshire Ave., N.W.

Washington, D.C. 20036

Counsel for Signal Energy Systems, Inc.

Dated: 12/22/87

By: /s/ Marc A. Zeppetello

MARC A. ZEPPETELLO

Beveridge & Diamond, P.C.

1333 New Hampshire Ave., N.W.

Washington, D.C. 20036

Counsel for Signal Energy Systems, Inc. ++EP++

Dated: 12/22/87

'U.S. Department of Justice

United States Attorney

Certificate of (ILLEGIBLE) Mail

UNITED STATES OF AMERICA,

v.

SIGNAL ENERGY SYSTEMS, INC.

CIVIL NO.

The undersigned hereby certifies that she is an employee in the Office of the United States Attorney for the EASTERN District of CALIFORNIA and is a person of such age and discretion as to be competent to serve papers.

That on MAR 15 1983 she served a copy of the attached

CONSENT DECREE (PROPOSED)

by placing said copy in a postpaid envelope addressed to the person( s) hereinafter named, at the place(s) and address(es) stated below, which is/are the last known address(es), and by depositing said envelope and contents in the United States Mail at Addressee(s):

ROGER J. MARZULLA

Assistant Attorney General

Land and Natural Resources

Division

U.S. Department of Justice

PHILIP A. BROOKS

Environmental Enforcement Section

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

HAROLD HIMMELMAN, Esq.

MARC A. ZEPPETELLO, Esq.

Beveridge & Diamond

1333 New Hampshire Avenue

Washington, D.C. 20036

Florinne T. Takehara

FLORINNE T. TAKEHARA ++EP++

SIGNAL ENERGY SYSTEM, INC.

DOC 02 OF 03

NOTICE OF LODGING

09-89-C012

CAA

ELECT

19880315

19880315

CAD982040297

SIGNAL ENERGY - COTTONWOOD

ANDERSON, CA

CIVS-88-033 LKK-EM

09

NOTICE OF LODGING, U.S. v. SIGNAL ENERGY SYSTEMS, INC.

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, plaintiff

v.

SIGNAL ENERGY SYSTEMS, INC., defendants.

Civil Action No. CIVS-88-0333 LKK-EM

NOTICE OF LODGING

Pursuant to 28 C.F.R. Section 50.7, a proposed Consent Decree is being lodged with the Court in this Civil action. After the requisite Federal Register Notice is published, the time period for comments has run, and the comments, if any, ++EP++ have been evaluated, the Court will be further advised as to any action which may be required by the Court at that time. During the pendency of the Register Notice comment period under 28 C.F.R. Section 50.7, no action is required of the Court.

Page 2

Respectfully submitted,

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

/s/ PHILLIP A. BROOKS

Trial Attorney

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

(202) 633-5270

DAVID F. LEVI

United States Attorney

Eastern District of California

/s/ LOUIS DEMAS

Assistant United States Attorney

3305 Federal Bldg.

650 Capitol Mall

Sacramento, California 95814

(916) 551-2700

OF COUNSEL:

ROBERT W. BERGSTROM

U.S. Environmental Protection Agency

Assistant Regional Counsel

215 Fremont St.

San Francisco, California 94105

JUDITH KATZ, ESQ.

Office of Environmental Compliance Monitoring

U.S. Environmental Protection Agency

401 M St., S.W.

Washington, D.C. 20460 ++EP++

SIGNAL ENERGY SYSTEM, INC.

DOC 01 OF 03

COMPLAINT

09-89-C012

CAA

ELECT

19880315

19880315

CAD982040297

SIGNAL ENERGY - COTTONWOOD

ANDERSON, CA

CIVS-88-0333 LKK-EM

09

COMPLAINT, U.S. v. SIGNAL ENERGY SYSTEMS, INC.

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, Plaintiff,

v.

SIGNAL ENERGY SYSTEMS, INC. a Corporation,

Defendant.

CIVS-No. 88.0333

COMPLAINT FOR INJUNCTIVE RELIEF AND CIVIL PENALTIES

Section 167 of the Clean Air Act, as amended (42 U.S.C. Section 7477)

Plaintiff, the United States of America, by its undersigned attorneys, by the authority of the Attorney General ++EP++

and at the request of the United States Environmental Protection Agency ("EPA"), alleges that:

Page 2 NATURE OF ACTION

1. This is a civil action pursuant to Section s 113(b) and 167 of the Clean Air Act (the "Act"), 42 U.S.C. Sub-Section 7413(b) and 7477, to enjoin the defendant, Signal Energy Systems, Inc. from constructing, erecting, or operating a wood waste burning electrical power generating plant in violation of the Clean Air Act, 42 U.S.C. Sub-Section 7401 et seq., (1977), and regulations promulgated thereunder. This action also seeks assessment of civil penalties against the defendant under Section 113(b) of the Act.

JURISDICTION AND VENUE

2. This Court has jurisdiction over the subject matter of this action pursuant to 42 U.S.C. Sub-Section 7413(b) and 7477, and 28 U.S. C. Sub-Section 1331, 1345, and 1355.

3. This Court has personal jurisdiction over the defendant, a Delaware corporation, which is qualified to do and is doing business in the State of California.

4. Venue is appropriate in this District pursuant to 42 U.S.C. Section 7413(b) and 28 U.S.C. Section 1391(b), because it is the judicial district in which the violation occurred and in which the defendant is doing business.

5. Notice of the commencement of this action has been given to the California Air Resources Board. ++EP++

Page 3 DEFENDANT

6. Defendant, Signal Energy Systems, Inc. ("Signal") is a Delaware corporation with its principle place of business at 1 Liberty Lane, Hampton, New Hampshire. Signal is duly registered to do business in the State of California.

GENERAL ALLEGATIONS

7. Pursuant to Section 109 of the Clean Air Act, 42 U.S.C. Section 7409, EPA's Administrator (the "Administrator") promulgated national ambient air quality standards for certain listed air pollutants.

8. Under Section 107(d) of the Clean Air Act, 42 U.S.C. Section 7407(a), each state is required to designate those areas within its boundaries which are better or worse than the national ambient air quality standard for each listed pollutant, or which cannot be classified due to insufficient data. The Administrator is thereafter required to promulgate a list of such areas (with such modifications as he deems necessary). An area which meets the national ambient air quality standards for a particular pollutant is termed an "attainment" area, one that does not is termed "nonattainment." The Administrator has listed Shasta County as an attainment area.

9. Section 110 of the Clean Air Act, 42 U.S.C. Section 7410, requires each state to submit to the Administrator for approval or disapproval, a plan for the implementation, maintenance, and enforcement of the national ambient air quality standards. Under Section 110(a)(2)(D), such state implementation plan must ++EP++

include, inter alia, a program to provide for the regulation of the modification, construction, and operation of any stationary source of air pollution, including a permit program as required under Part C of the Act, Sub-Section 160-169, 42 U.S.C. Section 7470-7479, relating to the prevention of significant deterioration ("PSD") of air quality in attainment areas.

Page 4

10. On review of the state implementation plan submitted by the State of California the EPA found that the plan did not include approvable procedures for preventing the significant deterioration of air quality. Accordingly, EPA incorporated and made part of the applicable state implementation plan the federal PSD regulations, found at 40 C.F.R. Section 52.21.

11. On July 8, 1985, the Regional Administrator of the United States Environmental Protection Agency ("EPA"), Region IX, pursuant to 40 C.F.R. Section 52.21(u), delegated authority to the State of California, Shasta County Air Quality Management District ("Shasta AQMD") to implement and enforce the federal PSD regulations. That delegation granted the Shasta AQMD authority to review, administer, and enforce those PSD requirements in Shasta County California.

12. On February 10, 1986, Signal applied to the Shasta AQMD for approval to construct a new stationary source of air pollution. The proposed project, designated the "Cottonwood" project, involves the construction and operation of ++EP++ a wood waste burning electrical power generating plant to be located in Shasta County, California.

Page 5

13. Under Section 165 of the Clean Air Act, 42 U.S.C. Section 7475, and 40 C.F.R. Section 52.21, no major emitting facility may be constructed in an attainment area unless a permit has been issued setting forth emission limitations for the facility which conform to the requirements of Part C of the Clean Air Act.

14. Under Section 169 of the Clean Air Act, 42 U.S.C. Section 7479, and 40 C.F.R. Section 52.21(b)(1)(i)(b), a "major emitting facility" is defined, inter alia, as a source of air pollution which has the "potential to emit two hundred and fifty tons per year or more of any air pollutant."

15. Signal's Cottonwood project has the potential to emit in excess of 250 tons per year of both carbon monoxide and oxides of nitrogen, both air pollutants, and is thus a "major emitting facility" within the meaning of the Clean Air Act.

16. On November 13, 1986, Shasta AQMD issued, and served written notice of, its final decision on Signal's application and issued an authority to construct for the facility.

17. Pursuant to 40 C.F.R. Section 124.15(b), a final decision to issue a PSD permit becomes effective 30 days after service of notice of the decision to issue the permit unless review of the decision is requested pursuant to 40 C.F.R. Section 124.19.

18. On or about November 16, 1986, Signal began construction of the Cottonwood facility, before the Shasta AQMD ++EP++ permit decision became effective.

Page 6

This construction has continued uninterrupted through the present.

19. On December 11, 1986, pursuant to 40 C.F.R. Section 124.19, the Northern California Pipe Trades Council filed a petition for review (the" Petition for Review") of the PSD permit decision with the Administrator, where it is currently pending.

20. The Shasta AQMD permit decision has never become effective.

21. On June 12, 1987, EPA Region IX issued a Notice of Violation to Signal for constructing a major emitting facility with out an effective PSD permit, in violation of Section 165 of the Clean Air Act.

CLAIM FOR RELIEF

22. Plaintiff repeats and realleges the allegations set forth in paragraphs 1-21 above.

23. Notwithstanding the Notice of Violation issued to defendant by EPA as alleged in paragraph 21, defendant has commenced and continued construction of the wood waste burning power plant in Shasta County, California in violation of Section 165 of the Clean Air Act, 42 U.S.C. Section 7475, and 40 C.F.R. Section 52.21, for which defendant is subject to injunctive relief and liable for an assessment of civil penalties not to exceed $25,000 per day of violation of the Act. 40 U. S.C. Sub-Section 113(b) and 167. ++EP++

Page 7

T24. Unless restrained by this Court, defendant will continue to violate the Clean Air Act and 40 C.F.R. Section 52.21 as set forth in the Claim for Relief above, which will result in irreparable harm to the public health and welfare, and for which there is no adequate remedy at law.

WHEREFORE, plaintiff, the United States of America, prays for Judgment:

(A) Permanently enjoining and restraining the defendant, its officers, employees, agents, successors and assigns, and all those acting through or on behalf of any of them, from constructing, erecting, or operating the power plant in Shasta County, California, unless and until it obtains an effective PSD permit;

(B) Assessing a civil penalty against Signal of $25,000 for each day of violation;

(C) Ordering Signal to pay plaintiff the cost and disbursements of this action; and

(D) Granting such other relief as the Court may deem just and proper.

Respectfully submitted,

/s/

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources

Division

U.S. Department of Justice ++EP++

Page 8

/s/

PHILLIP A. BROOKS

Trial Attorney

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

(202) 633-5270

DATED: MAR 15 1988

DAVID F. LEVI

United States Attorney

Eastern District of California

Louis Demas

LOUIS DEMAS

Assistant United States Attorney

3305 Federal Bldg.

650 Capitol Mall

Sacramento, California 95814

(916) 551-2700

OF COUNSEL

ROBERT W. BERGSTROM

U.S. Environmental Protection

Agency

Assistant Regional Counsel

215 Fremont St.

San Francisco, California 94105

JUDITH KATZ, ESQ.

Office of Enforcement Compliance

Monitoring

U.S. Environmental Protection

Agency

401 M St. S.E.

Washington, D.C. 20460 ++EP++

MAUI ELECTRIC COMPANY

DOC 01 OF 01

PROPOSED CONSENT DECREE

09-89-C010

CAA

ELECT

19890113

19881003

HID006927164

MAUI ELECTRIC CO.

MAALAEA, HI

88-00731 DAE

09

PROPOSED CONSENT DECREE, U.S. v. MAUI ELECTRIC CO.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAIL

UNITED STATES OF AMERICA, Plaintiff,

v.

MAUI ELECTRIC COMPANY, Defendant.

Civil Action No. 88-00731

DAE

CONSENT DECREE (PROPOSED) ++EP++

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a Complaint alleging that Maui Electric Company ("MECO"), an Hawaii corporation and a wholly owned subsidiary of Hawaiian Electric Company (HECO), owns, constructed and is operating a diesel power plant (Unit 12) and owns and is constructing a second diesel power plant (Unit 13) on the Island of Maui, Hawaii without a Prevention of Significant Deterioration ("PSD") permit in violation of the Clean Air Act ("Act"), 42 U.S.C. Sub-Section 7401, et seq.

The Complaint alleges that the violations of the Act continued for more than 30 days after EPA gave MECO notice of the same.

The parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. This Decree shall not constitute evidence or admission of any issue of fact or law by either party. ++EP++

Page 3

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

JURISDICTION AND VENUE

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The Complaint states a claim upon which relief may be granted against MECO pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

2. MECO acknowledges notice pursuant to 42 U.S.C. Section 7413(a)( 1) and admits jurisdiction pursuant to 42 U.S.C. Section 7413(b).

3. The Court has personal jurisdiction over MECO and venue is proper in this Court. MECO waives all objections to personal jurisdiction and venue. The parties agree to be bound by the terms of this Consent Decree and not to contest its validity in any subsequent proceeding.

EFFECTIVE DATE

4. Except where a different date is specified herein, the parties agree to be bound by the terms and conditions of this Consent Decree upon its lodging with the Court. The terms and conditions of this Consent Decree shall cease to bind the parties if this Court denies a motion to enter this Consent Decree. ++EP++

Page 4 PARTIFS BOUND

5. The provisions of this Consent Decree shall apply to and be binding upon MECO, its officers, directors, agents servants, employees, successors and assigns, and upon the United States on behalf of EPA. MECO shall give prior notice of this Consent Decree to any successor in interest prior to the transfer of any ownership interest or right to operate the electric generating station operated by MECO at Maalaea, Hawaii that contains Unit 12 and 13 ("the Facility"), including but not limited to, the sale lease or licensing of others to operate the Facility. Upon sale or transfer of the Facility, MECO shall attach a copy of this Consent Decree to the bill of sale, assignment, or other agreement by which the Unit is sold or transferred, and shall make performance of the obligations of MECO under this Consent Decree an obligation of any purchaser or transferee.

6. MECO shall, within five days of entry of this Consent Decree and as appropriate thereafter, provide copies of the Consent Decree accompanied by a summary explanation of its terms, to all persons bound by this Decree as specified in Paragraph 5 and in a position to ensure or affect compliance herewith, including notice to any successors in interest to property governed by this Consent Decree prior to the transfer of said property. No later than five working days after the date(s) such notice(s) are given, MECO shall provide EPA with a ++EP++

copy of the summary and a list of the names and addresses of all its recipients.

Page 5 DEFINITIONS

7. For the purposes of this Consent Decree, the following definitions shall apply:

a). "Authority to Construct" -- The Authority to Construct (No. A-712-654) for Units 12 and 13 issued by the Hawaii Department of Health to MECO on July 2, 1987.

b). "BACT" -- Best Available Control Technology, as defined in Section 169(3) of the Clean Air Act, 42 U.S.C. Section 7479(3).

c). "Continuous Emission Monitoring Data ("CEM Data") -- Data reflecting emission rates of specified pollutants and process parameters on a continuous basis, as recorded by the Units' Continuous Emission Monitoring Systems.

d). "Continuous Emission Monitoring Systems ("CEMS") -- The total equipment required to satisfy the obligations in this Consent Decree to continuously sample, analyze, and provide a permanent record of emissions or process parameters.

e). "Deg BTDC" -- The degrees of crankshaft rotation before the piston reaches its uppermost position (top dead center).

f). "Excess Emissions" -- Any three-hour period during which the average NOx emissions as measured by the CEMS exceeds the NOx emissions limitation under Paragraph 8 of this Consent Decree. ++EP++

Page 6

g). "the Facility" -- The electric generating station operated by MECO at Maalaea, Maui, Hawaii that contains Units 12 and 13.

h). "Five Deg FITR" -- The amount of retard that results from following the procedure outlined in Appendix A, provided that the average timing of all 18 cylinders, after completion of step 9, is numerically no greater than 7.5 Deg BTDC.

i). "Fuel Injection Timing Retard" or "FITR" -- The extent of retard as expressed in degrees of crankshaft rotation relative to normal ignition settings.

j). "DOH" -- The Hawaii Department of Health.

k). "Kilowatt Hour Recorder" -- The strip chart recorder that monitors the kilowatt output from each unit.

1). "NOx" -- Oxides of nitrogen.

m). "O2" -- Molecular oxygen.

n). "O&M Manual" -- In the case of Unit 12, the document titled "Diesel Generating Unit #12 for the Maalaea Power Station of the Maui Electric Co. - Operating Manual and Construction Drawings for Diesel Generating Plant - Vol. 1, 2, 3, 4," issued December 16, 1987, or, in the case of Unit 13, the similar manual to be issued for that Unit.

o). "Opacity" -- The degree to which emissions reduce the transmission of light, and obscure the view of an object in the background.

p). "OAQPS" -- The Office of Air Quality Planning and Standards in EPA's Office of Air and Radiation. ++EP++

Page 7

q). "ppmv" -- Parts per million on a volumetric basis.

r). "the Units" -- The two diesel fired power plants called Unit 12 and Unit 13 constructed or being constructed by MECO in Maui, Hawaii.

s). "Water/Fuel Emulsion" -- The use of homogenized or emulsified water/No. 2 Diesel Oil combinations, alone or in combination with ceramic coating of piston crowns, cylinder heads and valves, to reduce NOx production by decreasing combustion temperatures.

t). "12,000 Hour Data" -- CEM data collected on NOx emissions from Unit 12 during the first 12,000 (+/- 10%) hours of engine operation after satisfaction of the obligation in Paragraph 9(e).

COMPLIANCE SCHEDULE

8. a). On and after the lodging of this Consent Decree, MECO shall operate the Units with Five Deg FITR, so as to limit NOx emissions per Unit to 595 ppmv NOx at 15% 02 (dry, 3 hr-average), and 212.9 lbs/hr.

b). On and after the lodging of this Consent Decree MECO shall i) operate the Units in accordance with all provisions of the O&M Manual compliance with which could reasonably be expected to significantly affect NOx emissions, and good operating practices for enhancing Nox control that are consistent with the O&M Manual and ii) implement any ++EP++

bulletins from the manufacturer of the Unit s recommending modified operating practices (including adjustments to engine operating parameters or equipment) for enhancing NOx control.

Page 8

c). In the event that MECO notifies EPA that a violation of Paragraph 8(a) has been caused by a force majeure event as defined in Paragraph 25(c), and EPA or the Court agrees, then EPA may require MECO to install any replacement parts recommended by the manufacturer of the Units to enhance NOx control, if the capital cost of such replacement parts does not exceed $100,000 per Unit, and MECO shall comply with any such requirement.

d). On and after the lodging of this Consent Decree, MECO shall operate the Units in accordance with all provisions of the O&M Manual compliance with which could reasonably be expected to significantly affect opacity, and good operating practices for enhancing opacity control that are consistent with the O&M Manual, unless compliance with such provisions or practices would increase NOx emissions.

e). In the event that MECO notifies EPA that compliance with Paragraph 8(a) should be excused for the reason specified in Paragraph 25(d), and EPA or the Court agrees, then EPA may require MECO to install any replacement parts recommended by the manufacturer of the Units to reduce opacity, if the capital costs of such replacement parts does not exceed $100,000 per Unit, unless the installation of such parts would increase NOx emissions. ++EP++

Page 9

f). On and after the lodging of this Consent Decree, MECO also shall operate each Unit so as to limit the emissions per Unit to:

CO 234 ppm (at 15% O2) and 58.7 lbs/hr. PM 8.34 lbs/hr and 0.043 gr/DSCF (at 12% CO2). NMHC 211 ppmv (at 15% 02) and 26.3 lbs/hr. SO2 110 ppmv (at 15% 02) and 48.2 lbs/hr.

g). After collection of 12,000 Hour Data in accordance with Paragraph 9, or at some earlier time if agreed by the parties, EPA shall establish a new maximum level of NOx emissions for purposes of this Consent Decree, reflecting the degree of NOx emission control achieved by Five Deg FITR as demonstrated by the 12,000 Hour Data, and MECO shall thereafter comply with the new limitation unless MECO submits the matter to this Court for resolution, within 14 days of its establishment by EPA. The new limitation shall be set on a never to be exceeded basis, taking into account variability in emissions during the 12,000-hour maintenance cycle, when operated in compliance with Paragraphs 8(b) and 8(c). If MECO submits the new limitation to the Court for review, EPA's position shall be upheld unless MECO demonstrates by clear and convincing evidence that the new limitation has not been set in accordance with the requirements of the preceding sentence.

TESTING AND COMPLIANCE SCHEDULE

9. MECO shall conduct performance tests not later than the indicated dates:

a). Install Five Deg FITR on Unit 12 The date of lodging of this Consent Decree Page 10 b). Complete startup and shakedown 15 days after the date testing on Unit 12. of lodging of this Consent Decree c). Perform monthly source test Day 45 after the date for NOx on Unit 12. of lodging of this Consent Decree, and every 30 days there- after until CEMS in- stalled d). Complete installation of CEMS for Day 180 after the date Unit 12, of lodging of this Consent Decree e). Complete performance specifica- Day 210 after the date tion tests on CEMS for Unit 12. of lodging of this Consent Decree f). Begin CEM data collection for the Day 210 after the date testing period for Unit 12. of lodging of this Consent Decree g). Complete CEM data collection for Day 750 after the date the testing period for Unit 12. of lodging of this Consent Decree h). Complete installation of CEMS Date specified in 40 for Unit 13 C.F.R. 60.8(a) for performance test i). Complete performance specification Date specified in 40 tests on CEMS for Unit 13 C.F.R. 60.8(a) for performance test CONTINUOUS EMISSION MONITORING SYSTEM

10. The Units shall be equipped with NOx, and CO2 or O2 CEMS for use as a compliance method, and opacity CEMS. If CO2, CEMS are used, 40 C.F.R. Part 60, Appendix A, Method 20 Equations 20-2 and 20-5 shall be used. Except as otherwise provided in Paragraph 9, MECO shall i) test and calibrate the CEMS in accordance with 40 C.F.R. Section 60.13; ii) assure that the CEMS meet the performance specifications at, and are operated in accordance with, 40 C.F.R., Part 60, Appendix B and 40 C.F.R. Sub-Section 60.13 and 40 C.F.R. Part 60, Appendix F; and ++EP++

iii) assure that the NOx CEMS record and collect data during at least eighty-five percent of the engine operating hours for each Unit during each calendar quarter.

Page 11

11. a). MECO shall notify EPA 30 days prior to conducting performance specifications tests of the CEMS.

b). Within 60 days of lodging of this Consent Decree, MECO shall submit to EPA a quality assurance project plan for the CEMS, conforming to 40 C.F.R. Part 60, Appendix F.

PERMIT ISSUANCE

12. It is the expectation of the parties that within 90 days of the entry of this Consent Decree, DOH intends to issue public notice of a draft PSD permit for one or both of the Units, including the following permit conditions, if MECO submits to DOH on a timely basis all information necessary for DOH to evaluate MECO's permit application:

a). Five Deg FITR as BACT for Unit 12 and/or Unit 13, with NOx emission limits per Unit of 595 ppmv at 15% O2 (dry, three-hour average), and 212.9 lbs/hr., provided that, pending the results of the study required by Paragraph 14, EPA reserves the right to nonconcur in any determination of an emission limitation for Unit 13 that is based on a determination that Water/Fuel Emulsion is not BACT for that Unit.

b). The emission limits specified in Paragraph 8(f), for one or both Units.

c). The requirements, conditions, and any specified deadlines in Paragraphs 9, 10, 11, 13, 15, 16, and 17. ++EP++ EPA intends to concur in these permit conditions, pursuant to the PSD delegation, except as provided in Paragraph 12(a).

Page 12

MECO agrees not to object to these permit conditions, provided that it reserves the right to object to any decision that Water/Fuel Emulsion is BACT for Unit 13, and any permit conditions or emission limitations resulting from such a determination.

13. It is the expectation of the parties that the permit issued by the DOH and referenced in Paragraph 12 will contain a provision for establishing a new allowable emission rate for NOx after the parties review 12,000 Hour Data. If the NOx emission limit is revised downward, the difference between the NOx emission limit set forth in Paragraph 8(a) and 12(a) and the revised lower NOx emission limit shall not be allowed as an emission offset for future construction or modification.

14. a). MECO shall conduct a study evaluating the use of Water/ Fuel Emulsion as BACT for NOx on Unit 13 and submit the results to EPA and DOH within 60 days of lodging of this Consent Decree.

b). Pending the results of the study, EPA reserves the right to determine that Water/Fuel Emulsion is BACT for Unit 13.

c). The study shall be conducted by an independent consultant and include:

i). A report on contact of all major diesel engine manufacturers regarding the use of Water/Fuel Emulsion on Unit 13. Major diesel engine manufacturers ++EP++

include, but are not limited to, BMW, Sulzer, Stork Werkspoor, Mitsubishi, Cooper-Bessemer, Colt, Electro Motive Division (GM), Alco, Dresser-Clarke, Ingersoll-Rand, White Superior, Cummings, Waukesha and Caterpillar.

Page 13

ii). A report on contact of all EPA Regional offices (other than Region IX), the Technical Support Division, OAQPS, the Emission Standards and Engineering Division, OAQPS, and the Stationary Service Compliance Division, OAQPS, regarding the use of Water/Fuel Emulsion for NOx control on diesel engines.

iii). A report on contact of all major air pollution control vendors regarding use of Water/Fuel Emulsion for NOx control on diesel engines. Major air pollution control vendors include, but are not limited to: Seaworthy Systems, Inc., Johnson Mathey Company, Englehard Corporation, and Seelee Corporation.

iv). Based on the information gathered under Subparagraphs (i)-( iii) and all other available information then in MECO's possession, an analysis of the propriety of using Water/Fuel Emulsion on Unit 13 as BACT for NOx.

v). A list of the names and phone numbers of all persons contacted.

d). After MECO has submitted the study to EPA, EPA may request MECO to submit all or part of the file maintained by the independent contractor on the study. Within 15 days of receipt of such a request, MECO shall submit to EPA the requested documents. ++EP++

Page 14 NOTIFICATION AND REPORT PREPARATION

15. MECO shall notify EPA 30 days prior to conducting source tests as set forth in Paragraph 9.

16. MECO shall notify EPA within 15 days of commencement of operation of Unit 13.

17. MECO shall submit to EPA:

a). For engine shutdowns of Unit 12 for eight hours or more prior to the satisfaction of the obligation in Paragraph 9(g), and for engine shutdowns of Unit 13 for eight hours or more prior to the satisfaction of the obligation in Paragraph 9(i), Kilowatt Hour Recorder readings for the last hour before the engine was shut down, for the period during which the engine was shut down, and for the first hour after resumption of engine operation. These readings shall be submitted within 21 days of resumption of operation of the engine.

b). Performance Tests.

i). Within 60 days of lodging of this Consent Decree, MECO shall conduct performance tests for CO, NMHC, and PM. MECO shall submit a written report of the results of such tests to EPA, within 90 days of lodging of this Consent Decree. Thereafter, MECO shall perform tests for CO and PM on an annual basis and at the maximum continuous rating of the units being tested. EPA also reserves the right to require additional performance tests for NMHC. Upon written request from MECO, EPA may approve the ++EP++ conducting of performance tests at lower specified production rates.

Page 15

After the initial performance tests and upon written request and adequate justification from MECO, EPA may waive a specified annual test for the Units.

ii). Performance tests for the emissions of CO, NMHC, and PM shall be conducted and the results reported in accordance with the test methods set forth in 40 C.F.R. Part 60.8 and Appendix A. The following test methods shall be used:

A). Performance tests for the emissions of PM shall be conducted using EPA Methods 1-4 and 5, or equivalent.

B). Performance tests for the emissions of CO shall be conducted using EPA Methods 1-4 and 10, or equivalent.

C). Performance tests for the emissions of NMHC shall be conducted using EPA Methods 1-4 and 25, or equivalent.

iii). MECO shall notify EPA and submit a test plan for review at least 30 days prior to such test.

iv). For performance test purposes, sampling ports, platforms and access shall be provided by MECO on the Units' exhaust systems in accordance with 40 C.F.R. 60.8(e). c). Sulfur Content

The sulfur content of the #2 diesel fuel oil shall be ++EP++

measured every calendar quarter and shall not exceed 0.50 percent by weight.

Page 16

The sulfur content shall be measured using ASTM Method D-129-64, D-1266, D-1552, or D-4294-83. MECO shall furnish the EPA a written report of the results of such test for every calendar quarter, by the end of the following month.

d). Continuous Emission Monitoring

i). MECO shall notify EPA of the date upon which operation of the CEMS commences.

ii). MECO shall furnish a report to EPA on 12,000 Hour Data, which shall contain all three hour rolling averages which can be computed with these data, using each whole clock hour as the start of a new averaging period. This report shall be submitted within 30 days of the completion of data collection.

iii). MECO shall maintain a file of all measurements, including continuous monitoring systems performance evaluations; all continuous monitoring systems or monitoring device calibration checks; adjustments and maintenance performed on these systems or devices; and all other information required to be recorded by 40 C.F.R. 60.13 in a permanent form suitable for inspection. The file shall be retained for at least three years following the date of such measurements, maintenance, reports and records.

iv). MECO shall submit a written report on NOx Continuous Emissions Monitoring to EPA for every calendar ++EP++ quarter, by the end of the following month.

Page 17

The report shall include the following:

A). The magnitude of excess emissions computed in accordance with 40 C.F.R. 60.13(h), any conversion factors used, and the date and time of commencement and completion of each time period of excess emissions.

B). Specific identification of each period of excess emissions that occurs during startups, shutdowns, and malfunctions of the Units. The nature and cause of any malfunction (if known) and the corrective action taken or preventive measures adopted shall also be reported.

C). The date and time identifying each period during which the continuous monitoring system was inoperative except for zero and span checks, and the nature of any system repairs or adjustments.

e). Gross Calorific Value

The Gross Calorific Value of the #2 diesel fuel oil shall be measured each calendar quarter, using ASTM Method D-240-76. MECO shall furnish the EPA with a written report of the results of such test for every calendar quarter, by the end of the following month. ++EP++

Page 18

18. a). All notices and submissions to EPA required by this Consent Decree shall be in writing, and shall be sent to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region 9

215 Fremont Street

San Francisco, CA 94105

b). All submissions shall be signed and affirmed by an appropriate corporate officer or a responsible delegate.

19. All notices and submissions to MECO required by this Consent Decree shall be in writing, and shall be sent to each person identified below:

Arden G. Hendersen

President

Maui Electric Co.

P.O. Box 398

Kahului, Hawaii 96732-0398

Jackie Mahi Erickson

Corporate Counsel

Hawaiian Electric Company, Inc.

P.O. Box 2750

Honolulu, Hawaii 96840-0001

ACCESS AND INSPECTION

20. Until termination of the provisions of this Consent Decree, EPA and its contractors and consultants shall have authority to enter the Facility at all reasonable times, upon proper presentation of credentials to the highest ranking employee present on the premises. This provision in no way limits or otherwise affects any right of entry held by EPA pursuant to applicable federal, state or local laws, regulations, or permits. ++EP++

Page 19 STIPULATED PENALTIES

21. In the event MECO fails to comply with the compliance schedules, emission limits or reporting requirements set forth in this Consent Decree, MECO shall pay stipulated penalties as set forth below:

Violation Penalty a). Para 8(a) (Five Deg $5,000/day for each day of FITR Requirement violation for days of only), Para 8(f), violation 1-5, $10,000/day Para 8(g), Para 9(d), for days of violation 6-10, Para 9(h). $15,000 for days of violation 11-15, and $25,000/day for each day of violation thereafter. b). Para 9(c), Para 9(e), $2,000/day for each day of Para 9(f), Para 9(i), violation for days of Para 14(a). violation 1-10, $5,000/day for days of violation 11-20, and $10,000/day for each day of violation thereafter. c). Para 8(a) (other $500/day for each day of than Five Deg FITR violation for days of requirement), violation 1-7, $1,000/day Para 8(b), Para 8(c), for each day of violation Para 8(d), Para 8(e), thereafter. Para 11, Para 14(c), Para 15, Para 16.

22. Any penalty accruing pursuant to Paragraph 21 shall be payable upon demand and due not later than ten days from receipt of written demand by EPA. Payment shall be made by certified or cashier's check payable to "Treasurer of the United States," and delivered to the United States Attorney for the District of Hawaii. Payment shall be accompanied by a ++EP++ transmittal letter identifying this Consent Decree and this Paragraph.

Page 20

Upon payment of a penalty, MECO shall notify EPA by sending a photocopy of the certified or cashier's check and transmittal letter to the EPA, Office of Regional Counsel.

23. Amounts paid as penalties pursuant to this Consent Decree are in the nature of a civil penalty and are not deductible for federal or state tax purposes, or eligible for inclusion in MECO's rate base.

24. Penalties paid pursuant to this Consent Decree are not EPA's exclusive remedy for any MECO violation of this Consent Decree and EPA reserves its right to seek injunctive relief under the Clean Air Act and to seek any other relief to which it is entitled.

25. a). If any event occurs which causes or may cause delay in or prevention of the achievement of compliance by MECO as provided in the Consent Decree, MECO shall notify EPA in writing within 10 days after MECO learns of the event. The notification shall describe the event and, for a delay or anticipated delay, describe in detail the anticipated length of delay, the reason for the delay, the measures taken and to be taken by MECO to prevent or minimize the delay, and the timetable by which those measures have or will be implemented. MECO shall adopt all reasonable measures to avoid or minimize any such delay.

b). If the parties agree that the delay or anticipated delay in or prevention of compliance with this ++EP++

Consent Decree has been or will be caused by circumstances entirely beyond the control of MECO, compliance shall be excused or the time for performance hereunder shall be extended for a period no longer than the delay resulting from such circumstances, and there shall be no obligation to pay stipulated penalties for any such period of delay or noncompliance.

Page 21

In such event, the parties shall stipulate to such extension of time, excuse or modification to the obligation in writing, and MECO's time for performance, or obligation to perform, shall be so extended, excused, or modified. In the event the parties cannot agree, any party may submit the matter to this Court for resolution.

c). The parties agree that a violation of the NOx emission limitation in Paragraph 8(a) is caused by circumstances entirely beyond the control of MECO, and that MECO has adopted all reasonable measures to comply, if at the time of violation, MECO was operating the Unit in question with Five Deg FITR, and in compliance with Paragraphs 8(b) and 8(c).

d). The parties agree that a violation of the opacity limitation for either Unit in Hawaii Regulation 11-60-3(b)(1), as evidenced by a Notice of Violation from DOH, EPA, or a citizen suit notice under 40 C. F.R. Part 54, is an event which may cause prevention of the achievement of compliance by MECO with Paragraph 8 of this Consent Decree. The parties further agree that the event is entirely beyond the control of MECO, if at the time of the violation, MECO was operating the Unit in ++EP++ question with Five Deg FITR, and in compliance with Paragraphs 8(d) and 8(e).

Page 22

If EPA or the Court agrees that each condition for relief under this Subparagraph has been satisfied, MECO shall promptly implement that degree of FITR that results in maximum reduction of NOx emissions without violation of the opacity limitation for the Unit, when operating the Unit in compliance with Paragraphs 8(d) and 8(e). EPA and MECO shall thereafter attempt to agree upon an appropriate modification to Paragraph 8(a). In the event the parties cannot agree, either party may submit the matter to this Court for resolution.

e). The burden of proving that any delay or prevention is caused by circumstances entirely beyond the control of MECO shall rest with MECO. In the event that MECO notifies EPA of a claimed force majeure event in accordance with Subparagraph (c) or (d), MECO shall have the burden of proving that each condition for relief under the Subparagraph in question has been satisfied. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree, or financial difficulties, shall not be a basis for changes in this Decree or extension of time nor excuse the liability of MECO for stipulated penalties under Paragraph 21. Delay in achievement of a requirement of this Decree shall not necessarily justify or excuse delay in achievement of subsequent requirements.

26. EPA reserves the right to impose, consistent with applicable laws and regulations, requirements for the Units that are more stringent than those set forth in this Consent ++EP++ Decree.

Page 23

In addition, EPA reserves the right to seek any and all relief for violations of law or of this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C. Section 7603, or Hawaii law; except that, for violations that are subject to stipulated penalties under this Consent Decree, EPA waives the right to seek civil penalties under Section 113 of the Act, other than the penalties provided in this Consent Decree, for those violations. EPA agrees not to seek an injunction or civil penalties for exceedance of Special Condition 2 of Attachment II of the Authority to Construct.

CIVIL PENALTY

27. MECO shall pay a civil penalty of $115,000 to the United States for violations of the Clean Air Act at the Facility by virtue of construction and operation of the Units. The full amount of said penalty shall be paid by MECO within 30 days of the entry of this Consent Decree, by a certified or cashier's check made payable to the "Treasurer of the United States" and shall be delivered to United States Attorney for the District of Hawaii. MECO shall also have the option of paying the full amount of the penalty within 60 days of entry of this Consent Decree, but in such event shall also pay simple interest accruing from the 31st day after entry until the date of payment, at the rate of 6% per annum. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Upon payment of the penalty, MECO shall notify EPA by sending a photocopy of the check and ++EP++ transmittal letter to EPA Region 9, Office of Regional Counsel.

Page 24 MISCELLANEOUS

28. This Consent Decree shall terminate with the occurrence of the earlier of the following two events: i) 90 days from entry of this Consent Decree, unless by that date the DOH has issued a public notice of a proposed PSD Permit, in accordance with Paragraph 12, provided that, in the event of such termination, MECO shall remain obligated to pay the civil penalty specified in Paragraph 27 and all stipulated penalties that are due and payable, and the Court shall retain jurisdiction to enforce those obligations; or ii) 90 days after the effective date of a final PSD permit issued with all of the terms specified in Paragraph 12, or signed by or otherwise concurred in by EPA, provided that the civil penalty specified in Paragraph 27 and all stipulated penalties that are due and payable have been paid.

29. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Consent Decree.

30. Any modification of this Consent Decree must be in writing and approved by the parties and the Court, unless ordered otherwise.

31. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of all civil claims of the United States alleged ++EP++ in its Complaint filed herein.

Page 25

However, nothing herein shall constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations. In addition, this Consent Decree in no way affects MECO's responsibility to comply with all federal, state and local laws and regulations.

32. The final approval and entry of this Consent Decree are subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice and public comment upon lodging of this Consent Decree.

33. Each party shall bear its own costs and disbursements in this action.

34. EPA does not, by its consent to the entry of this Consent Decree, warrant or over in any manner that MECO's complete compliance with this Consent Decree will result in compliance with the provisions of the Clean Air Act, 42 U.S.C. Section 7401 et seq.

This Consent Decree is entered on this++day of , 1988.

UNITED STATES DISTRICT JUDGE

++EP++

Page 26

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered.

CONSENTED TO:

UNITED STATES OF AMERICA,

Plaintiff

Dated: SEP 30 1993

By:/s/

ROGER J. MARZULLA

Assistant Attorney General

Land and Natural Resources Divisions

United States Department of Justice

Washington, D.C. 20530

Dated: Sept. 7 1988

By:/s/

BARRY S. SANDALS

Senior Counsel

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

100 Van Ness Ave. 22nd Floor

San Francisco, CA 94102

Dated: Oct 3, 1988

By:/s/

MARK J. BENNETT

Assistant United States Attorney

Dated: 9-16-88

By:/s/

THOMAS L. ADAMS, JR.

Assistant Administrator for

Enforcement & Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, SW

Washington, DC 20460 ++EP++

Page 27

Dated: 9.8.88

By: /s/Daniel W. McGovern

DANIEL W. McGOVERN

Regional Administrator

U.S. Environmental Protection Agency

Region 9

215 Fremont Street

San Francisco, CA 94105

Dated: 9/8/88

By:/s/Robert W. Bergstorm

ROBERT W. BERGSTROM

Assistant Regional Counsel

U.S. Environmental Protection Agency

Region 9

215 Fremont Street

San Francisco, CA 94105

MAUI ELECTRIC COMPANY,

Defendant

Dated: 9/6/88

By:/s/

David E. Menotti

DAVID E. MENOTTI

Perkins Coie

1110 Vermont Avenue, N.W.

Washington, D.C. 20005

(202) 956-5427

Dated: 9/6/88

By:/s/Jackie Mahi Erickson

JACKIE MAHI ERICKSON

Corporate Counsel

Hawaiian Electric Company, Inc.

P.O. Box 2750

Honolulu, Hawaii 96840-0001

(808) 548-3567

Dated: 9/6/88

By:/s/Arden G. Hefnderson

ARDEN G. HENDERSEN

President

Maui Electric Company

P.O. Box 398

Kahului, Hawaii 96732-0398 ++EP++

Page i APPENDIX A PROCEDURE FOR SETTING FIVE DEG FITR MAUI ELECTRIC COMPANY

The following summarizes the procedure utilized and results obtained to reset the fuel injection timing to 5 degrees retard (FITR) from normal.

The overall process for the 5 degrees FITR timing adjustment was accomplished in steps as follows:

Step 1 - Shut down engine, remove all cylinder cam access doors

Step 2 - Cut all tie wires on cam shaft tie bolts A and B

Step 3 - Obtain baseline fuel injection timing on each cylinder

Step 4 - Adjust all cams to retard fuel injection 5 degrees from baseline established in Step 3

Step 5 - Reinstall all cylinder cam access doors

Step 6 - Operate engine and obtain peak pressure, exhaust temperature, and fuel rack settings for each cylinder at 6 MW, 9 MW and 12.5 MW.

Step 7 - Shut down engine and readjusted timing as 100 psi peak pressure differential between cylinders was exceeded at the 11 MW load level. This is done by adjusting the cam side bolts slight amounts. A turn of "one flat" of the bolt head represents an adjustment of 1.5kg/ cm2 or 21.3 psi. Ten cylinders had to be adjusted 2 to 5 flats on each side bolt.

Step 8 - Operate engine and confirmed that 100 psi peak pressure differential is not exceeded up to 12.5 MW by taking cylinder pressure readings at 6 MW, 9 MW, 11 MW and 12.5 MW.

Step 9 - Shut down engine, open cam access doors, reinstall tie wires between cam side bolts A and B on each cylinder and reinstall cam access doors. ++EP++

Page ii

The timing adjustment is done manually and it is accomplished on each cylinder separately. It was felt necessary to take a baseline reading of the fuel injection timing on each cylinder before resetting the side bolts on the fuel cam to retard the fuel injection timing 5 degrees. Since the values are obtained by "feel," the use of the same mechanics to take the baseline data as well as the readjusted data would provide consistency in the data taken. As both the crankshaft and cam shaft rotate in the same direction (clockwise as viewed from the generator end), the cam must be rotated on the cam shaft counter clockwise to delay (retard) fuel injection. Therefore side bolt A must be loosened and side bolt B tightened to make this change. See Figure 1 below. GRAPH/CHART OMITTED

Since it was necessary to retard fuel injection timing 5 degrees and each turn of the cam side bolts results in a 1.2 to 1.5 degree change, it was decided to rotate each side bolt 4 turns, resulting in retard between 4.8 and 6.0 degrees.

The timing adjustment required the use of three men, a foreman and two mechanics.

Their duties and location at the machine are as follows:

Mechanic "A" -- this individual is equipped with a fuel injection pump priming wrench, two socket wrenches and a whistle. He stations himself alternately at each cylinder at the operating floor level and controls the entire process. He initially places a bolt ++EP++

as a spacer under the fuel pump rack control linkage so that the rack is at the 64 mm position corresponding to full load at 12.5 MW.

Page iii

The nut on the bolt is adjusted in or out so that the proper spacing is used to set the rack as accurately as possible at the 64 mm position. He then attaches the fuel pump priming wrench on the fuel pump priming/ lockout bolt hanging down with both hands using his body weight to prime the pump and maintain full oil pressure. As the unit is rotated very slowly, Mechanic A feels a surge in fuel pressure through the spring loaded delivery valve when the cam hits the actuator at the start of fuel injection into the cylinder. Mechanic A then signals Mechanic "B" to stop the rotation of the engine using the whistle as all personnel must use ear protection when doing this work. Mechanics A and B can be as much as 15 feet apart. The position of the flywheel in relation to a reference point is the crank angle for initial fuel injection.

Mechanic "B" - is the turning gear operator who rotates the engine electrically at a very slow speed. The engine cannot be turned "by hand." This individual is in view of both the Foreman "C" and Mechanic "A" at the cylinder position. He starts and stops the rotation of the crankshaft as directed by Mechanic "A".

Foreman "C" - is the recorder and is stationed at the flywheel. He is equipped with a mirror because the flywheel is marked on both the circumference and the face of the flywheel facing the engine. The circumference is marked for the position of every degree of crank angle and is viewed directly. However, the numerical stamping for every 10 degrees of crank angle (from 0 to 360 degrees) is shown on the face of the flywheel which is inaccessible. A mirror is used to determine the position of the crankshaft in degrees relative to the reference pointer attached to the engine frame.

The following describes the technique used by the three men in the adjustment of the timing on each cylinder to attain 5 degrees FITR: ++EP++

Page iv

1. Mechanic "A" adjusts cam side bolts A and B (see Fig. 1) alternately one turn each until four full turns on each bolt are made representing approximately 5 degrees FITR shift in timing.

2. Mechanic "B" torques each cam side bolt so that no cam movement occurs while operating the unit on turning gear or for test.

3. Mechanic "A" then attaches the pump priming wrench to the fuel pump priming/lockout bolt, primes the pump, maintains fuel pressure and signals Mechanic B to rotate the machine. When Mechanic A feels the initial surge of fuel injection through the wrench in his hands, he blows the whistle, signaling Mechanic "B" to instantly stop the machine.

4. Mechanic "B" stops the machine, then signals Foreman "C" to record the crank angle. The difference between this new crank angle from the baseline crank angle at which injection starts is the amount of retard in degrees.

On this unit it was necessary to readjust the timing on 10 of the cylinders (steps 6 and 7) to maintain the allowable peak pressure differential between cylinders. The reason why this happens is that the process is manually done by "feel" and the rotation of the cam side bolts do not result in a precise change in timing. The adjustment is approximate. When originally set, the average timing for all cylinders was 11.25 degrees BTDC. No changes have been made since the original setting. On July 14, 1988 when baseline timing was checked, the average for all cylinders was 10.8 degrees BTDC. This indicates how approximate the process is.

The initial timing and adjustment made on July 14 resulted in the timing being at 5 degrees FITR as shown in Table 1 on the following page. ++EP++

Page v TABLE 1 INITIAL FITR SETTINGS Baseline Fuel Timing TDC (Zero Deg. FITR) at Cylinder Position Fuel Timing 5 Deg. FITR Degrees No. Degrees Deg. BTDC Deg. BTDC FITR 1 0 11.75 7 4.75 2 80 11.25 6 5.25 3 280 10.5 5.5 5.0 4 160 12.0 7.5 4.5 5 200 11.0 5.5 5.5 6 240 10.75 5.75 5.0 7 120 9.5 4.75 4.75 8 320 12.25 7.5 4.75 9 40 9.75 4.5 5.25 10 315 11.50 6.25 5.25 11 35 11.0 5.75 5.25 12 235 9.5 4.75 4.75 13 115 11.0 5.75 5.25 14 155 12.5 7.0 5.50 15 195 10.5 5.25 5.25 16 75 9.25 4.75 4.50 17 275 11.5 6.75 4.75 18 355 9.5 4.75 4.75 Average 10.8/*/ 5.8/*/ 5.0

((/*/ This is average timing at 5 degrees FITR.)) ((/*/ This is average timing at zero degrees FITR.))

As mentioned previously, timing had to be reset on 10 cylinders on July 15, 1988 by adjusting the cam side hex bolts between 2 and 5 flats to bring peak pressure differentials within range. Only one cylinder had the 5 flat adjustment. Most were 2 to 4 flats as shown in Table 2. ++EP++

Page vi TABLE 2

Cylinder Final Adjustment

No. No. of Flats on Nut

2 2

4 4 7 2 9 5 10 4 11 4 12 4 13 2 15 2 17 2

Since one flat on the bolt head represents 0.2 to 0.25 degrees of crank angle, the resulting final average timing adjustment can be calculated. The final timing adjustment was calculated to be 6.1 degrees BTDC compared to the original average setting of 5.8 degrees. See Table 3 below for the final calculated data.

TABLE 3 FINAL FITR SETTING Cylinder Baseline Fuel Final Fuel Final

No. Timing Deg. BTDC Timing Deg. BTDC Degrees FITR

1 11.75 7 4.75 2 11.25 6.4 4.85 3 10.5 5.5 5.0 4 12.0 8.3 3.7 5 11.0 5.5 5.5 6 10.75 5.75 5.0 7 9.5 5.15 4.35 8 12.25 7.5 4.75 9 9.75 5.5 4.25 10 11.50 6.85 4.65 11 11.0 6.15 4.85 12 9.5 5.15 4.35 13 11.0 6.15 4.85 14 12.5 7.0 5.50 15 10.5 5.45 5.05 16 9.25 5.15 4.1 17 11.5 6.75 4.75 18 9.5 4.75 4.75

Average 10.8 6.1 4.7

Civil Action #

of U.S. v. Maui Electric Co., Consent Decree (Proposed) ++EP++

TANNER COMPANIES

DOC 01 OF 01

CONSENT DECREE

09-88-C008

CAA

OTHER

19880922

19880922

AZD981169089

TANNER COMPANIES

(BLANK)

CIV-86-105-PHX-RGS

09

CONSENT DECREE in U.S. v. THE TANNER COMPANIES, INC.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

UNITED STATES OF AMERICA, Plaintiff,

v.

THE TANNER COMPANIES, INC. Defendant.

No. CIV 86-1054 PHX-RGS

No. CIV 86-1055 PHX-RGS

No. CIV 86-1056 PHX-RGS

(Consolidated)

CONSENT DECREE

WHEREAS, Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed three separate Complaints on June 30, 1986, which were subsequently consolidated in this action;

WHEREAS, in the Complaints, the United States alleged that The Tanner Companies, Inc. ("Tanner"), owned and operated ++EP++ three asphalt concrete plants (the "Plants") identified by Tanner as #12-139, #120-140, and #12-400 and that these plants were subject to New Source Performance Standards ("NSPS") for asphalt concrete plants promulgated pursuant to Section 111 of the Clean Air Act ("the Act"), 42 U.S.C. Section 7411, and that the Tanner plants violated, at various times, the applicable NSPS emissions limits for opacity and particulate content and that Tanner failed to comply with various testing and reporting requirements, set forth at 40 CFR Part 60, Subpart A and others which were specifically demanded by EPA pursuant to Section 114 of the Act, 42 U.S.C. Section 7414;

Page 2

WHEREAS, Tanner has sold plants #12-139 and #12-400;

WHEREAS, Tanner denies that the violations set forth in the Complaints occurred;

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter and without this Consent Decree constituting evidence or admission of any issue of fact or law by any party;

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I. JURISDICTION

A. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. ++EP++ Section 1355.

Page 3

The Complaints state claims upon which relief may be granted against Tanner pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413( b).

B. The Court has jurisdiction over Tanner and venue is proper in this Court. Tanner waives all objections to the Court's personal jurisdiction and venue.

II. PARTIES BOUND

A. This Consent Decree shall apply to and be binding upon Tanner, its officers, directors, agents, servants, employees, successors, and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through or under Tanner or in active concert or participation with Tanner, and upon the United States on behalf of EPA.

B. Tanner shall, postmarked within TEN (10) days of the entry of this Consent Decree and as appropriate thereafter, give copies of this Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph II.A. responsible for ensuring or affecting compliance with this Consent Decree, and to any successor in interest to property governed by this Consent Decree prior to the transfer of said property. Tanner shall provide to EPA, postmarked within FIVE (5) working days after the date(s) of such notice(s), a copy of the summary and a list of the names and addresses of all its recipients. ++EP++

III. CIVIL PENALTY

Tanner shall pay a civil penalty of $82,842 (eighty-two thousand eight hundred forty-two dollars) to the United States. The full amount of said penalty shall be paid by Tanner postmarked within 30 days of the entry of this Consent Decree, by a certified check made payable to the "Treasurer of the United States of America" and shall be delivered to Anna Maria Martel, Assistant U.S. Attorney, 4000 U.S. Courthouse, 230 North First Avenue, Phoenix, Arizona 85025. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Concurrent with delivery of this penalty, Tanner shall notify EPA by sending a photocopy of the certified check and transmittal letter to Allan Zabel, Assistant Regional Counsel, U.S. Environmental Protection Agency, 215 Fremont Street, San Francisco, California 94105. Tanner shall not deduct for federal tax purposes any payments made pursuant to this paragraph.

IV. COMPLIANCE, INSPECTION, AND REPORTING REQUIREMENTS

A. Tanner shall at all times operate its #12-140 plant in compliance with the NSPS requirements set forth at 40 C.F.R. Part 60, Subparts A and I. For purposes of 40 C.F.R. Section 60.8(c), "start-up" shall include the first twelve operating hours of Tanner's Plant No. 12-140 at each new location of operation. ++EP++

Page 5

B. EPA and its contractors and agents shall be allowed to enter and inspect Tanner's #12-140 plant at all reasonable times to ensure compliance with this Consent Decree and the Act. This provision is in addition to, and not in limitation of, EPA's authority under the Act and other federal law.

C. Beginning with the entry of this Consent Decree, Tanner shall submit the results of all particulate matter and opacity emissions tests performed on its #12-140 plant to EPA, postmarked no later than five working days of Tanner receiving the test results. This includes, but is not limited to, all tests, which Tanner or its agents perform pursuant to the Act and pursuant to requirements established by Arizona and the Arizona Department of Environmental Quality. These reporting requirements are in addition to, and not in limitation of, EPA's authority under the Act and other federal law.

V. NOTIFICATION

All submissions from Tanner to EPA required by this Consent Decree shall be addressed to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105

All submissions to EPA shall be signed and affirmed by a corporate officer or other person competent to make such affirmations. ++EP++

Page 6 VI. STIPULATED PENALTIES

A. Tanner shall be liable for stipulated penalties for failure to comply with the terms of this Consent Decree as follows:

1. for failure to comply with any reporting requirements in Paragraph IV.C., with any requirement in Paragraph II.B., or with the requirements in Paragraph III: $1,000 for each failure to comply;

2. for failure to comply with the maintenance, opacity or emissions requirements in Paragraph IV.A.:

Penalty per day

Number of days of violation

$ 1000 one through ten $ 2500 eleven through twenty $ 5000 more than twenty

3. Stipulated penalties under this Section shall be paid by certified check payable to the "Treasurer of the United States of America." Payment shall be tendered to the Office of the United States Attorney for the District of Arizona postmarked within fifteen days after the noncompliance period. ++EP++

Page 7

B. If EPA determines that Tanner is subject to stipulated penalties pursuant to Paragraph VI.A.2., such penalties shall be triggered upon (1) occurrence of a violation of the opacity emissions or particulate matter requirements if the violation is shown by the results of a test that Tanner is required to submit to EPA pursuant to Paragraph to IV. C., or (2) notification of Tanner by EPA of any other violation.

VII. DISPUTE RESOLUTION

In the event the parties cannot resolve any dispute with respect to the meaning or implementation of this Consent Decree, then the interpretation advanced by the United States shall be considered binding unless Tanner invokes the dispute resolution provisions of this Paragraph.

If in the opinion of any party there is a dispute with respect to the meaning or implementation of this Consent Decree, that party shall send a written notice to the other party which outlines the nature of the dispute. Any such dispute shall in the first instance be the subject of informal negotiations between the parties. That period of informal negotiations shall not extend beyond thirty days from the date when the notice was sent unless the parties agree otherwise.

If informal negotiations are unsuccessful, the United States' position shall control unless Tanner files with this court a petition which shall describe the nature of the dispute and include a proposal for its resolution. Tanner's petition must be filed no more than fifteen days after termination of ++EP++ informal negotiations.

Page 8

The United States shall then have twenty days to respond to the petition. In any such dispute, Tanner shall have the burden of proving that the United States position is arbitrary and capricious. Stipulated penalties shall accrue but need not be paid during the pendency of any dispute resolution proceeding, until this court issues a decision requiring the payment of stipulated penalties.

VIII. MISCELLANEOUS

A. Entry of this Consent Decree and compliance with the requirements herein shall be in full settlement and satisfaction of the civil claims of the United States against Tanner as alleged in the Complaints.

B. Each party to this Consent Decree shall bear its own costs and attorney fees in this action.

C. This Consent Decree in no way affects Tanner's responsibilities to comply with all federal, state and local laws and regulations.

D. Except as specifically provided herein, the United States does not waive any rights or remedies available to it for any violation by Tanner of federal or state laws or regulations following lodging of this Decree.

E. This Court shall retain jurisdiction over this matter and all disputes arising hereunder for a period of two years from the date of entry of this Consent Decree, at which time this Consent Decree shall terminate. ++EP++

Page 9

F. Any modifications of this Consent Decree must be in writing and approved by this Court. ++EP++

G. The final approval and entry of this Consent Decree is subject to the requirements of 28 C.F.R. Section 50.7, which provides that notice of a proposed consent decree be given to the public and that the public shall have at least thirty days to comment thereon.

H. This Consent Decree shall not constitute evidence or an admission of any issue of fact or law by either party.

This Consent Decree is entered on this 21st day of SEPTEMBER, 1988.

/s/

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry by the United States, the Consent Decree may be entered.

THE TANNER COMPANIES, INC.,

Defendant

/s/ G. Van Velsor Wolf, Jr.

G. VAN VELSOR WOLF, JR.

Lewis and Roca

First Interstate Bank Plaza

One Hundred West Washington Street

Phoenix, Arizona 85003-1899

UNITED STATES OF AMERICA,

Plaintiff

/s/ Roger J. Marzulla

ROGER J. MARZULLA

Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20530 ++EP++

Page 10

/s/

GRANT LUNGREN

President

Tanner Construction

A Division of The Tanner Companies

/s/ Robert D. Brook

ROBERT D. BROOK

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

/s/

THOMAS L. ADAMS, JR.

Assistant Administrator for Enforcement and

Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

/s/ Daniel W. McGovern

DANIEL W. McGOVERN

Regional Administrator

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, CA 94105

OF COUNSEL:

ALLAN G. ZABEL

Assistant Regional Counsel

U.S. Environmental Protection Agency

215 Fremont Street

San Francisco, CA 94105

RACHEL M. HOPP

Attorney-Advisor

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460 ++EP++

CAMPBELL SOUP COMPANY

DOC 01 OF 01

CONSENT DECREE

09-89-C033

CAA

FOOD

19890825

19890825

CAD009198367

CAMPBELL SOUP COMPANY

SACREMENTO, CA

87-1272-EJG-EM

09

CONSENT DECREE,1US V. CAMPBELL SOUP COMPANY

Page 1

DONALD A. CARR

Acting Assistant Attorney General

ROBERT H. FOSTER

Trial Attorney

Environmental Enforcement Section

Land and Natural Resources Division

Department of Justice

10th and Pennsylvania Avenue, N. W.

Washington, D. C. 20530

Telephone: (202) 633-1448

DAVID F. LEVI

United States Attorney

for the Eastern District of California

YOSHINORI H. T. HIMEL

Assistant United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Telephone: (916) 551-2696

Attorney for Plaintiff United States of America

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

CAMPBELL SOUP COMPANY

Defendant.

WHEREAS, the plaintiff United States of America, on behalf of the United States Environmental Protection Agency (EPA), filed a Complaint in this action on September 4, 1987, alleging violations by the Defendant Campbell Soup Company (Campbell) at its Sacramento facility (the Facility) located at 6200 Franklin Boulevard, Sacramento, California, of the Clean Air Act, 42 U.S.C. Section 7401 to 7642 (the Act) and of the California State Implementation Plan (SIP) Sacramento County Air Pollution Control District (SCAPCD) Rule 452, concerning volatile organic compound (VOC) emissions from can coating operations, which is applicable to the Facility, adopted by the State and approved by EPA pursuant to 42 U.S.C. Section 7410, section 110 of the Act; and ++EP++

Page 2

WHEREAS, Defendant operates numerous can coating lines at its Facility, all of which emit, or have the potential to emit, volatile organic compounds ("VOCs") regulated under Rule 452; and

WHEREAS, on November 6, 1987, Campbell filed an Answer denying EPA's violation allegations and a Counterclaim alleging, inter alia, violations of the Clean Air Act, and seeking injunctive relief; and

WHEREAS, Campbell is a New Jersey Corporation doing business in the State of California; and

WHEREAS, the Facility is located in a non-attainment area for the ozone National Ambient Air Quality Standards; and

WHEREAS, the Facility is a major stationary source of volatile organic compounds (VOC) emissions within the meaning of 42 U.S.C. 7602(j), section 302(j) of the Act; and

WHEREAS, Campbell denies that the violations alleged in the Complaint occurred; and

WHEREAS, Campbell has achieved compliance with Rule 452's emission limitations; and

WHEREAS, for the purpose of settling this litigation and to resolve the other outstanding issues recited above, without trial of any issue of fact or law, the parties, by and through their attorneys and authorized representatives, have each consented to and have moved the Court to enter this Consent Decree; ++EP++

Page 3

NOW, THEREFORE, without trial of any issue of fact or law and upon the consent of the parties, by their attorneys and authorized officials, it is hereby ORDERED, ADJUDGED and DECREED as follows:

JURISDICTION AND VENUE

1. Subject Matter Jurisdiction. a. This Court has jurisdiction of the subject matter of the Complaint and of the parties consenting hereto for the purpose of entering this Consent Decree pursuant to Section 113(b) of the Act, 42 U.S.C. Section7413(b), and 28 U.S.C. Sub-Section1331, 1345 and 1355. The Complaint states a claim against Defendant upon which relief can be granted under Section 113 of the Act, 42 U.S.C. Section7413. The civil claims alleged by the United States in the Complaint include any and all violations of Rule 452, if any, that occurred prior to the date this Decree is signed by the Assistant Attorney General.

2. Venue. Venue is appropriate pursuant to 28 U.S.C. Section 1391(b) and 42 U.S.C. Section7413(b) because Defendant does business and therefore resides in the Eastern District of California. ++EP++

Page 4 SETTLEMENT IN THE PUBLIC INTEREST

3. Public Interest, Date of Entry. a. The parties to this Consent Decree agree, and the Court finds, that this action has been prosecuted and defended diligently and that settlement of this action without further litigation is in the public interest and is an appropriate means of resolving this action.

b. The parties to this action agree to be bound by the terms and conditions of this Consent Decree upon its entry by the Court.

PERSONS BOUND

4. Persons Bound; Notice to Successors. This Consent Decree shall apply to and be binding upon the parties to this action, and Defendant's officers, directors, divisions, employees, agents, successors in interest, and assigns. For the period during which this Consent Decree is in effect, upon sale or transfer of the Facility, Campbell shall provide such transferee, purchaser, successors or assigns a copy of this Consent Decree. Such transferee shall be bound thereby. Each representative and signatory to this Decree certifies that he or she is fully authorized by the party he or she represents to enter into the terms and conditions of this Consent Decree in his or her capacity as indicated on the signature pages hereof, to execute it and to legally bind the party within the limits of the indicated authority. ++EP++

Page 5 SETTLEMENT IN SATISFACTION

5. a. Defendant's agreement to be bound by the terms and conditions of this Decree, and entry of this Decree, shall be in full settlement and satisfaction of all liability of Defendant for each and every civil claim by the United States alleged in the Complaint, including any and all violations of Rule 452, if any, that occurred prior to the date this Consent Decree is signed by the Assistant Attorney General.

b. Counterclaim Dismissed. To avoid further litigation, Defendant agrees that its counterclaims filed in this matter shall be dismissed with prejudice, effective on the date of entry of this Consent Decree.

COMPLIANCE PROGRAM FOR SACRAMENTO FACILITY

6. Compliance by Defendant. Defendant shall operate in compliance with the requirements of SCAPCD Rule 452 of the federally approved California SIP. Coatings that are cured with ultraviolet light meet the requirements of Rule 452. For the purpose of determining compliance with Rule 452, the VOC content of coatings not cured with ultraviolet light shall be determined by using Test Methods ASTM D-1475-80, ASTM D-2369-73 and ASTM D-3792-79.

7. Information to be Maintained. During the one year period beginning May 1, 1989, Campbell shall maintain records from which the following information can be determined and shall provide such information to EPA upon its written request: ++EP++

Page 6

a. For each and every coating line at the Facility:

i. Type of coating line.

ii. Supplier's name and ID code for each and every coating used on the coating line.

iii. Coating type (e.g. endseal).

iv. The VOC content of each coating delivered by the supplier and the VOC content of each dilution solvent used.

v. Laboratory report sheets showing intermediate results of any VOC analysis that is conducted for Campbell for any coating used at the Facility.

vi. The specific dates on which each coating is applied and the number of gallons of each coating applied on each such date.

vii. The specific dates on which each ILLEGIBLE solvent is used, the number of gallons of each dilution so used on each such date, and the coating to which each such dilution solvent is added.

b. In addition, for each and every coating first used at the Facility subsequent to entry of this Decree:

i. The date on which the coating was first used at the Facility.

ii. The purpose and the use of the coating.

8. Information to be Reported.

a. During the one year period beginning May 1, 1989, for each coating used at the Facility, Defendant shall report any coating which fails to comply with Rule 452. Such report shall indicate the VOC content of the coating as applied, as analyzed by an independent laboratory, and the dates on which such coating was used at the Facility. ++EP++

Page 7

Such report shall be postmarked within 15 days after receipt by Defendant of the results of the VOC content analysis from the independent laboratory.

b. In addition, for each coating that is not in use as of the date of entry of the Decree, but which is first used during the one year period subsequent thereto, Defendant shall notify EPA in writing within thirty days after such use commences. Such notice shall include the information specified in paragraph 7b and the VOC content of the coating(s), as applied, as analyzed by an independent laboratory.

PENALTIES

9. Civil Penalty. a. Within thirty (30) days of the date of Campbell's receipt of a fully executed copy of this Consent Decree, Campbell shall pay a civil penalty of ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000).

b. Defendant shall pay the civil penalty provided for under subparagraph a by cashier's or certified check payable to "United States Treasury" and shall submit said payment to: ++EP++

Page 8

David F. Levi

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Attn: Yoshinori H.T. Himel

A copy of the check shall be sent to EPA Region IX at the address indicated in paragraph 18.

c. Entry of this Consent Decree shall constitute written demand for payment of the civil penalty set forth above.

10. Stipulated Penalties. a. If during calendar year 1989, Defendant fails to comply with the obligations set forth in paragraph 6 above, Defendant shall pay a stipulated penalty of $1,500 per day of violation for each of the first seven days of such non-compliance, beginning with the first day of non-compliance and $4,000 per day of violation thereafter.

b. If Defendant fails to comply with the obligations set forth in paragraph 8 above, Defendant shall pay a stipulated penalty of $250 per day of violation for each day such violation continues.

c. Payment of any stipulated penalties provided for herein shall be made within ten (10) days after written demand by Plaintiff to Defendant. Notwithstanding any other provisions in this Consent Decree, Defendant shall have the right to dispute any demand for stipulated penalties based upon Defendant's records. The existence of any such dispute shall not operate in and of itself to toll the accrual of penalties, if any, for which Defendant would otherwise be found responsible. ++EP++

Page 9

d. Payment of a stipulated penalty for any particular incident of noncompliance with the requirements of this Consent Decree shall serve as satisfaction of any civil claim by the United States for monetary relief for such incident. Plaintiff reserves its right to seek all non-monetary and injunctive relief under the Clean Air Act and to seek any and all other relief to which it is entitled.

e. The stipulated penalties provided for herein shall be paid by cashier's or certified check payable to "United States Treasury" and submitted to:

David F. Levi

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Attn: Yoshinori H.T. Himel

A copy of the check shall be sent to EPA Region IX and the Department of Justice at the addresses indicated in paragraph 18.

OTHER GENERAL REQUIREMENTS AND PROVISIONS

11. Inspections. Authorized representatives of U.S. EPA, including contractors, upon presentation of proper credentials, shall have the right to enter upon the premises of the Facility at all reasonable times, accompanied by an authorized Campbell representative if one is reasonably available, to determine compliance with the requirements of this Decree, including the right to inspect and obtain copies of any and all documents required to be submitted or maintained under this Consent Decree, and the right to obtain samples of coatings used at the Sacramento Facility. ++EP++

Page 10

This right of entry and access shall be in addition to, and in no way limits, U.S. EPA's right of entry and access under federal law, including 42 U.S.C. Section7414, section 114 of the Act.

12. Force Majeure. a. If the parties agree that the delay or anticipated delay in compliance with any requirement of this Decree has been or will be caused by circumstances entirely beyond the control of Campbell, the time for performance hereunder may be extended by Order of the Court for a period no longer than the delay resulting from such circumstances. In such event, the parties shall stipulate to such extension of time and so inform the Court. In the event the parties cannot agree, then any party may submit the matter to the Court for resolution.

b. The burden of proving that any delay is caused by circumstances entirely beyond the control of Campbell shall rest with Campbell. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree on changed financial circumstances of the Defendant shall not, in any event, be a basis for changes in this Consent Decree or extensions of time under this Paragraph. For the purpose of this Paragraph, "delay" or "delays" means "delay or interruption" or "delays or interruptions."

13. Reservation of Rights. Nothing contained in this Consent Decree shall be construed to limit or affect the rights of the parties under any applicable federal or state statute except as expressly stated herein. ++EP++

Page 11

14. Other Legal Requirements. Nothing herein shall constitute a permit of any kind under state, local or federal law, or, except as expressly provided herein, alter, limit or revoke local, state or federal laws or regulations or affect the authority of the United States to seek enforcement of this Decree or relief pursuant to 42 U.S.C. Section 7603, section 303 of the Act, or otherwise immunize Defendant from violations of other applicable law. This Decree shall not affect Defendant's responsibility henceforth to comply with any and all applicable federal, state and local laws and regulations.

15. Retention of Jurisdiction. This Court shall retain jurisdiction for the purpose of construing and enforcing this Consent Decree until six months after the termination of the obligations hereunder, as provided for in paragraph 21; provided, however, that if an action is initiated during that period, the Court shall retain jurisdiction until its conclusion.

16. Transfer of Interest. Defendant shall promptly notify Plaintiff by registered mail upon sale or transfer of the Facility and confirm that it provided a copy of the Consent Decree to the transferee prior to the date of transfer.

17. Alternate Compliance. In addition to the specific provisions for compliance contained in Rule 452, Defendant shall have the right to achieve compliance with any obligation set forth in paragraphs 6 and 8 above with respect to any emission source, by ceasing to operate such source. ++EP++

Page 12

Defendant shall not thereafter start up such source unless and until it is in compliance with Rule 452 as well as any and all federal, state or local requirements that may be applicable to Campbell.

18. Communications and Notifications. All written notices, correspondence and communications under this Consent Decree, including information to be provided pursuant to paragraph 8 above, except as otherwise provided herein, shall be given by first class mail, postage prepaid, to the parties at the following addresses:

For Plaintiff United States:

Notices shall be sent to both:

United States Environmental Protection Agency, Region IX

Air Enforcement Branch Chief

215 Fremont Street

San Francisco, CA 94105

Robert H. Foster

U.S. Department of Justice

Environmental Enforcement Section

Land and Natural Resources Division

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

For Defendant Campbell Soup Company

Notices shall be sent to both:

Campbell Soup Company

Campbell Place

Camden, New Jersey 08103-1799

Attention: General Counsel

William H. Lewis, Jr.

Morgan, Lewis & Bockius

1800 M Street, N.W.

Washington, D.C. 20036 ++EP++

Page 13

Andrew M. White

Christensen, White, Miller, Fink & Jacobs

2121 Avenue of the Stars, Suite 1800

Los Angeles, CA 90067

All such notices, correspondence, information, and communications submitted pursuant to paragraph 8 above shall be signed and affirmed to by an individual with appropriate authority and responsibility.

19. Integration. This Consent Decree contains the entire agreement of the parties and shall not be modified by any prior oral or written agreement, representation or understanding. This Consent Decree may not be amended except by agreement of the parties and written Order of this Court.

20. Costs. Each party agrees to pay its own costs and attorneys fees in this action to the date of the Court's entry of this Consent Decree.

21. Termination. The obligations imposed by this Consent Decree shall expire one year from the date of its entry by the Court, or if any stipulated penalties have become due and have not been paid at the end of that year, at such time as those stipulated penalties are paid.

22. Final Approval. The parties agree and acknowledge that final approval by the United States and entry of this Decree is subject to the requirements of 28 C.F.R. Section50.7, which provides for public notice and an opportunity for public comment. ++EP++

Page 14 CONSENTED TO AND APPROVED FOR ENTRY:

FOR CAMPBELL SOUP COMPANY

/s/ A. Lee Lundy, JR.

A. LEE LUNDY, JR.

Vice President and General Counsel

On Behalf of Campbell Soup Company

FOR THE UNITED STATES OF AMERICA

/s/ Donald A. Carr

DONALD A. CARR

Acting Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

On Behalf of The United States Government

/s/ Robert H. Foster

ROBERT H. FOSTER

Trial Attorney

Land and Natural Resources Division

U.S. Department of Justice

DAVID F. LEVI

United States Attorney

Eastern District of California

YOSHINORI H.T. HIMEL

Assistant United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95804 ++EP++

Page 15

/s/ Daniel S. Goodman

DANIEL S. GOODMAN

Trial Attorney

Land and Natural Resources Division

U.S. Department of Justice

/s/ Edward L. Reich

EDWARD L. REICH

Acting Assistant Administrator

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

Washington, D.C. 20426

/s/ Daniel W. McGovern

DANIEL W. McGOVERN

Regional Administrator

U.S. Environmental Protection Agency Region IX

215 Fremont Street

San Francisco, California 94105 ++EP++

Page 16

THIS CONSENT DECREE approved and entered in accordance with the foregoing on this day of 1989.

Edward J. Garcia

District Court Judge

United States District Judge ++EP++

^Z

ULTRAPOWER 2, INC.

DOC 01 OF 01

CONSENT DECREE

09-87-C011

CAA

MUNI

19871124

19871124

CAD119083731

ULTRAPOWER 2

WESTWOOD, CA

87-0914-RAR-JFM

09

CONSENT DECREE, US V. ULTRAPOWER 2. INC

Page 1

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

DIANNE M. SHAWLEY

Attorney

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

(202) 633-2688

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

ULTRAPOWER 2, A GENERAL

PARTNERSHIP; ULTRAPOWER ENERGY

RESOURCES, INC.; and PACIFIC

ENERGY RESOURCES, INC.

Defendants.

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint in this case on June 22, 1986. Plaintiff is filing a First Amended Complaint concurrently with this Consent Decree. The First Amended Complaint alleges that Ultrapower 2, a General Partnership, Ultrapower Energy Resources, Inc., a California corporation and general partner in Ultrapower 2, and Pacific Energy Resources, Inc., a California corporation and general partner in Ultrapower 2 (hereinafter "Defendants"), have operated a wood-fired boiler in Westwood, California ("Westwood facility"), without a prevention of significant deterioration ("PSD") permit in violation of the Clean Air Act ("Act"), 43 U.S.C. Sections 7401, et seq. ++EP++

Page 2

The First Amended Complaint alleges that the violation continued for more than 30 days after Plaintiff gave Defendants notice of the same. Defendants do not admit or deny that the violations charged in the First Amended Complaint occurred.

The Parties agree and the Court finds that settlement of this matter is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without taking any testimony, upon the pleadings, and without trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. This Consent Decree shall not constitute evidence or admission of any issue of fact or law by either party.

THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I JURISDICTION

A. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), 28 U.S.C. Section 1331, 28 U.S.C. Section 1345, and 28 U.S.C. Section 1355. The First Amended Complaint states a claim upon which relief may be granted against Defendants pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b). ++EP++

Page 3

B. The Court has jurisdiction over the parties and venue is proper in this Court. Defendants waive all objections to the Court's personal jurisdiction and venue.

II PARTIES BOUND

A. The provisions of this Consent Decree shall apply to and be binding upon the Defendants, their officers, directors, agents, servants, employees, successors, and assigns. Upon sale or transfer of the Westwood facility, the purchaser, its successor or assigns shall be provided with a copy of this Consent Decree and be bound thereby.

B. Defendants shall, within ten (10) working days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Consent Decree, accompanied by a summary explanation of its terms, to all persons specified in Paragraph II A in a position to ensure or affect compliance herewith, including notice to any successors in interest to property governed by this Consent Decree prior to the transfer of said property. Defendants shall provide EPA, no more than ten (10) working days after the date(s) such notice(s) are given, with a copy of the summary and a list of the names and addresses of all its recipients.

III ACCESS AND INSPECTION

EPA, its contractors and agents shall be allowed to enter and inspect the facility at all reasonable times to ensure compliance with this Consent Decree. ++EP++

Page 4

This paragraph in no way limits EPA's rights under the Act or other federal law.

IV NOTIFICATION

Defendants shall send all submissions required by this Consent Decree to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

and to;

Assistant Attorney General

U.S. Department of Justice

Land and Natural Resources Division

10th and Pennsylvania Avenues

Washington, D.C. 20530

V CIVIL PENALTY

Defendants shall pay a civil penalty of $54,000 (fifty-four thousand dollars) to the United States. The full amount of said penalty shall be paid by Defendants within 30 days of the entry of this Consent Decree, by a certified check made payable to the "Treasurer of the United States" and shall be delivered to United States Attorney for the Eastern District of California. Payment shall be accompanied by a transmittal letter identifying this Consent Decree and this Paragraph. Upon payment of the penalty, Defendants shall notify EPA by sending a photocopy of the certified check and transmittal letter to the EPA. Defendants shall not deduct for federal tax purposes any payments made pursuant to this Paragraph. ++EP++

Page 5 VI MISCELLANEOUS

A. Entry of this Consent Decree and compliance with the requirements herein shall be in full settlement and satisfaction of the civil claims of the United States for Defendants' operation of the Westwood Facility without a valid PSD permit for time periods prior to the entry of this Consent Decree. For time periods subsequent to its entry, this Consent Decree shall be in full settlement and satisfaction of all the civil claims of the United States for Defendants' operation of the Westwood Facility without a valid PSD permit if: 1) the PSD permit issued to Defendants by EPA Region IX on November 20, 1986, becomes final after action by the Administrator of EPA, pursuant to 40 CFR Part 124; and 2) that PSD permit either receives no timely challenge pursuant to Section 307(b) of the Act, 42 U.S.C. Section 7607(b), or remains unmodified after all possible judicial review and any judicial remand of the PSD permit to EPA. If, however, the November 20, 1986 PSD permit is modified, the United States retains the right to seek judicial enforcement of the modified permit as of the date of any modification, and such judicial action may include a request for both civil penalties and injunctive relief.

B. Each party shall bear its own costs and attorneys fees in this action. ++EP++

Page 6

C. This Consent Decree in no way affects Defendants' responsibilities to comply with all federal, state and local laws and regulations.

D. This Consent Decree shall terminate one year after its entry, provided that all penalties that are due have been paid and defendants have received a final PSD permit for the Westwood Facility as specified in Paragraph VI A.

E. The Court shall retain jurisdiction over this matter and all disputes arising hereunder as may be necessary or appropriate for the execution of this Consent Decree.

F. Any modification of this Consent Decree must be in writing and approved by the parties and the Court. Any such written modification must be executed on behalf of the Assistant Attorney General, Land and Natural Resources Division, the Regional Administrator, U.S. EPA, and the Assistant Administrator for Enforcement and Compliance Monitoring, U.S. EPA, and the Defendants.

G. Entry of this Consent Decree shall not constitute a permit of any kind under state, local or federal law and shall in no way alter, limit or revoke local, state or federal laws or regulations or affect the authority of the United States to seek enforcement of this Consent Decree or immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize Defendants from violations of other applicable law. ++EP++

Page 7

This Consent Decree is entered on this day of , 1987.

UNITED STATES DISTRICT JUDGE

The undersigned agree to the foregoing Consent Decree and agree that, upon filing of a motion for entry, the Consent Decree may be entered.

CONSENTED TO:

UNITED STATES OF AMERICA,

Plaintiff

BY:/s/Roger J. Marzulla

ROGER J. MARZULLA

Acting Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Dated: NOV 16 1987

BY:/s/Dianne M. Shawley

DIANNE M. SHAWLEY

Attorney

Environmental Enforcement Section

U.S. Department of Justice

Washington, D.C. 20530

Dated: November 4, 1987 ++EP++

Page 8

/s/ ILLEGIBLE SIGNATURE

THOMAS L. ADAMS

Assistant Administrator for Enforcement and

Compliance and Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Dated: 22 Oct 1987

BY:/s/Judith E. Ayres

JUDITH E. AYRES

Regional Administrator

U.S. Environmental Protection Agency, Region 9

215 Fremont Street

San Francisco, California 94105

Dated: 5 OCT 1987

OF COUNSEL:

ALAN ZABEL

Assistant Regional Counsel

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

JUDITH M. KATZ

Attorney-Advisor

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

CONSENTED TO:

ULTRAPOWER 2

ULTRAPOWER ENERGY RESOURCES, INC.

PACIFIC ENERGY RESOURCES, INC.

Defendants

BY:/s/A. T. Littleworth

A. T. Littleworth

Attorney for

Ultrapower 2

Dated: September 24, 1987 ++EP++

Page 9

BY:/s/R. Robert Harris

R. ROBERT HARRIS

Attorney for

Ultrapower Energy Resources, Inc.

Dated: September 25, 1987

BY:/s/A. T. Littleworth

A. T. LITTLEWORTH

Attorney for

Pacific Energy Resources, Inc.

Dated: September 24, 1987 ++EP++

Page 10 CERTIFICATE OF SERVICE BY MAIL

The undersigned hereby certifies that she is an employee in the Office of the United States Attorney for the Eastern District of California and is a person of such age and discretion as to be competent to serve papers.

That on Nov 24 1987, she served a copy of the attached: by placing said copy in a postpaid envelope addressed to the person(s) hereinafter named, at the place(s) and address(es) stated below, which is/are the last known address(es), and by depositing said envelope and contents in the United States Mail at Sacramento, California:

A. T. Littleworth (M.L. 40 MV)

810 South Flower Street

Los Angeles, CA 90017

R. Robert Harris

Vice President and General Counsel

Ultrasystems Inc.

16845 Von Karmine Avenue

Irvine, California 92714

ROGER J. MARZULLA

Acting Assistant Attorney General

DIANNE M. SHAWLEY, Attorney

Land and Natural Resources Division

U.S. Dept. of Justice

10th & Pennsylvania Avenue NW

Washington, D.C. 20530

Thomas L. Adams

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Judith E. Ayres

U.S. Environmental Protection Agency

Region 9

215 Fremont Street

San Francisco, CA 94105

/s/Florinne T. Takehara

FLORINNE T. TAKEHARA ++EP++

WESLOCK COMPANY

DOC 02 OF 02

CONSENT DECREE

09-87-C010

CAA

METAL

19871007

19871007

CAD009686874

WESLOCK COMPANY

LOS ANGELES, KA

CV-86-4286-WDK

09

CONSENT DECREE U.S. v. WESLOCK COMPANY

Page 1

ROBERT C. BONNER

United States Attorney

FREDERICK M. BROSIO, JR.

Assistant United States Attorney

Chief, Civil Division

JOSEPH F. BUTLER

Assistant United States Attorney

1100 United States Courthouse

312 North Spring Street

Los Angeles, California

Telephone: (213) 894-2474

F. HENRY HABICHT II

Assistant Attorney General

CYNTHIA S. HUBER, Attorney

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Telephone: (202) 633-1197

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

CASE NO. CV 86 4286 WDK (JRx)

CONSENT DECREE

UNITED STATES OF AMERICA, Plaintiff,

vs.

WESLOCK COMPANY, Defendant.

WHEREAS, the plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint in this action on June 30, 1986, alleging that defendant violated the Clean Air Act (the "Act"), 42 U.S.C. Section 7401 et seq., and the California State Implementation Plan ("SIP") provisions adopted under the Act; and ++EP++

Page 2

WHEREAS, the defendant, Weslock Company, ("Weslock") is a California corporation with its principal place of business at Los Angeles, California; and

WHEREAS, Weslock owns and operates a lockset and general hardware manufacturing facility in Los Angeles, California and EPA has alleged that Weslock violated the Act and South Coast Air Quality Management District Rule 1107 ("Rule 1107") which controls ozone pollution by regulating the use of volatile organic compounds ("VOCs") in coatings applied to manufactured metal parts, promulgated by California as part of its SIP and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410, at 48 Fed. Reg. 46046 (October 11, 1983); and

WHEREAS, Weslock has expeditiously complied with Rule 1107 by using low VOC coatings on its manufactured metal parts; and

WHEREAS, the parties agree and the Court finds that settlement of this matter is in the public interest and that the entry of this Consent Decree without further litigation is the most appropriate means of resolving this matter; and

WHEREAS, for the purpose of settling this litigation without the taking of any testimony or the trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree; ++EP++

Page 3

NOW, THEREFORE, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

(ILLEGIBLE)I.

JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Sub-Section 1331, 1345 and 1355, and Section 113(b) of the Act, 42 U.S.C. Section 7413(b). The Complaint states a claim upon which relief can be granted against Weslock under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and under Rule 1107 of the federally approved SIP.

2. The Court has personal jurisdiction over the parties and venue is proper in this Court. Weslock waives all objections to this Court's jurisdiction and to venue.

(ILLEGIBLE)II.

DEFINITIONS

3. For the purpose of this Consent Decree, the following definitions shall apply:

a. "Low VOC Coating(s)" shall refer to coatings for miscellaneous metal parts ++EP++ which comply with the most stringent and final limitations for VOC content as set forth in Rule 1107.

Page 4

Such coatings shall include powder coatings which are assumed to emit no VOCs.

b. "VOC(s)" shall refer to any volatile organic compound as set forth in Rule 1107.

c. "Weslock Facility" shall refer to the facility operated by the Weslock Company, Inc., located at 13344 S. Main Street, Los Angeles, California, that engages, among other things, in the coating of miscellaneous metal parts.

(ILLEGIBLE)III

STIPULATIONS

The parties have stipulated to the following facts:

4. On October 11, 1983, EPA published final approval of the California SIP, Rule 110, currently applicable to the Weslock Facility (48 Fed. Reg. 46,046). ++EP++

Page 5

5. On September 19, 1985, EPA issued to Weslock a notice of violation ("NOV"), pursuant to Section 113(a) of the Act, 42 U.S.C. Section 7413(a), for violation by the Weslock Facility of the California SIP, Rule 1107. Weslock received the NOV on September 15, 1985.

6. The NOV sent to Weslock was based in part on tests conducted at the Weslock Facility by the EPA and the South Coast Air Quality Management District ("SCAQMD") in December of 1984, using the American Standard Test Methods (ASTMs) set forth in SCAQMD Rule 107 of the SIP. Weslock hereby agrees not to challenge the validity of the December, 1984 tests in any future administrative and/or judicial proceedings regarding this Consent Decree.

7. The SCAQMD is a nonattainment area for the ozone National Ambient Air Quality Standards.

8. The Weslock Facility is a major stationary source of ozone emissions within the meaning of Section 302(j) of the Act, 42 U.S.C. Section 7602(j).

9. Through tests performed in the months of December, 1986, and January, 1987, Weslock demonstrated that the Weslock Facility was in compliance with Rule 1107 through the use of Low VOC Coatings and equivalency as defined in Rule 1107(c). EPA has reviewed these test and agrees that the testing and results are adequate to show compliance with Rule 1107. ++EP++

Page 6

(ILLEGIBLE)IV.

PARTIES BOUND

10. This Consent Decree shall apply to and be binding upon Weslock, its officers, directors, agents, servants, employees, successors, and assigns, and upon all persons within the meaning of Section 302(e) of the Act, 42 U.S.C. Section 7602(e), acting for, through or under Weslock, or in active concert or participation with Weslock, and upon the United States on behalf of EPA.

11. Weslock shall, within TEN (10) days of entry of this Consent Decree, and as appropriate thereafter, give copies of the Consent Decree, accompanied by a summary explanation, to all persons specified in Paragraph 10 responsible for ensuring or effecting compliance with this Consent Decree, and to any successor in interest to property governed by this Consent Decree, and to any prior to the transfer of said property. Weslock shall provide to EPA within FIVE (5) working days after the date(s) of such notice(s) a copy of the summary and a list of the names and addresses of all its recipients. ++EP++

Page 7

(ILLEGIBLE)V.

OBJECTIVES

12. The purposes of this Consent Decree are to ensure the continuing compliance of the Weslock Facility with the SIP, including Rule 1107, and to provide for the payment by Weslock of civil penalties as a compromise and settlement of EPA's allegations of past violations of Rule 1107 at the Weslock Facility and without any admission of any violation or any liability on the part of Weslock.

(ILLEGIBLE)I

ACCESS AND INSPECTION

13. EPA, the SCAQMD, and their contractors and agents shall be allowed to enter and inspect the Weslock Facility at all reasonable times to ensure compliance with this Consent Decree. This is in addition to, and not in limitation of, EPA's authority under the Act and other federal law. ++EP++

Page 8

(ILLEGIBLE)VII.

REPORTING AND TESTING REQUIREMENTS

14. The test methods specified in SCAQMD Rule 1107 shall be those used to determine the VOC content of any coating tested pursuant to this Consent Decree.

15. Beginning with the lodging of this Consent Decree, Weslock shall submit monthly reports confirming the Weslock's Facility's continuing compliance with Rule 1107, using Low VOC Coatings. These reports shall continue through December 31, 1987. Where compliance with Rule 1107 at the Weslock Facility must be demonstrated via equivalency, as defined in Rule 1107(c), these reports shall include daily records of the coatings used at the Weslock Facility. These daily records shall contain information concerning the volume, VOC content, and other characteristics of the coatings used which is sufficient to demonstrate compliance with Rule 1107. The monthly reports required by this Paragraph shall be postmarked to no later than the fifth working day of each month subsequent to the month for which the report is made.

16. If any type of liquid general coating is used at the Weslock Facility which was not tested during the months of December, 1986, and January, 1987, Weslock shall submit a sample of each type of new coating used to an independent laboratory for testing of the coating's VOC content. Weslock shall submit the results of these tests to EPA postmarked no later than 30 days ++EP++ after the first use of any such coating.

Page 9

An untested liquid coating is a different type of coating if its composition varies from a tested liquid coating in any way other than amount, type, or color of pigmentation.

17. Weslock shall use at the Weslock Facility only those types of liquid coatings which were tested during December, 1986, and January, 1987, or types of coatings for which testing and reporting, pursuant to Paragraph 16, is in progress.

18. Weslock shall record, on a daily basis, the use of any type of coating which was either not tested during December, 1986, and January 1987, or for which testing and reporting, pursuant to Paragraph 16, is not complete. These daily records shall include the amounts of the coating(s) used. These daily records shall be included in the monthly reports which Weslock submits to EPA pursuant to Paragraph 15.

(ILLEGIBLE)VIII.

NOTIFICATION

19. All submissions required by this Consent Decree shall be addressed: ++EP++

Page 10 For EPA to:

Director, Air Management Division

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

For the Department of Justice to:

Assistant Attorney General

U.S. Department of Justice

Land and Natural Resources Division

10th and Pennsylvania Avenues

Washington, D.C. 20530

For Weslock to:

Michael Scott

President

Weslock Company

13344 S. Main Street

Los Angeles, California 90061

All submissions to EPA shall be signed and affirmed by a corporate officer or other person competent to make such affirmations. ++EP++

Page 11

(ILLEGIBLE)IX.

STIPULATED PENALTIES

20. Weslock shall be liable for stipulated penalties for failure to comply with the terms of this Consent Decree as follows:

a. for failure to comply with any of the requirements of Paragraph 15: $1,000 for each occurrence;

b. for failure to comply with the requirements of Paragraphs 17 or 18:

Penalty per day ... Number of days of violation

$2,500 ............ one through ten $5,000 ............ eleven through twenty $10,000 ........... more than twenty

21. Any penalty owing to the United States pursuant to Paragraph 20 shall be payable upon demand. Payment shall be made by cashier's check payable to "Treasurer, United States of America", and delivered to the United States Attorney as specified in Paragraph 23. Notice of such payment shall be sent by Weslock to the Department of Justice and to the EPA. Payment of stipulated penalties for violations of this Consent Decree shall not excuse Weslock from liability for violations of the Act. ++EP++

22. Amounts paid pursuant to Paragraph 20 are in the nature of a civil penalty and are not deductible for federal tax purposes.

(ILLEGIBLE)X.

CIVIL PENALTY

23. In addition to the remedial actions set forth herein, Weslock shall pay a civil penalty of TWENTY-SEVEN THOUSAND DOLLARS ($27,000.00) to the United States. Such payment shall be by certified check made payable to the "Treasurer, United States of America" and shall be delivered to Joseph F. Butler, Assistant United States Attorney, Office of the United States Attorney, 1100 United States Courthouse, 312 North Spring Street, Los Angeles, California 90012, within 30 days of the time this Consent Decree is entered by the Court. Notice of such payment shall be sent by Weslock to the Department of Justice and to the EPA. The civil penalty paid by Weslock pursuant to this Paragraph shall not be deductible by Weslock for federal tax purposes.

(ILLEGIBLE)XI.

MISCELLANEOUS

24. Each party shall bear its own costs and attorneys fees in this action. ++EP++

Page 13

25. This Consent Decree in no way affects or relieves Weslock of its responsibility to comply with all federal, state and local laws and regulations.

26. This Court shall retain jurisdiction over this matter and all disputes arising hereunder for a period of two years, commencing with the entity of this Consent Decree by the Court. Following the expiration of this two-year period, this Consent Decree shall terminate.

27. Any modification of this Consent Decree must be in writing and approved by this Court.

28. Entry of this Consent Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of the civil claims of the United States for any violations of Rule 1107 occurring prior to the lodging of this Consent Decree. Neither the entry of this Consent Decree nor any of the provisions thereof nor any act done pursuant thereto shall constitute an admission by Weslock of any violation of law, rule, or regulation or of any wrong doing whatever. Nothing herein shall constitute a permit of any kind under federal, state, or local law. Further, nothing herein shall in any way alter, limit or revoke federal, state, or local laws or regulations, or affect the authority of the United States to seek enforcement of this Decree or to seek immediate relief pursuant to Section 303 of the Act, 42 U.S.C. Section 7603 (emergency episodes), or otherwise immunize Weslock from violations of other applicable law. Nor does this ++EP++ Consent Decree limit or affect the rights of the United States as against third parties.

Page 14

29. The final approval and entry of this Consent Decree is subject to the requirements of 28 C.F.R. Section 50.7, which provides that notice of the proposed decree be given to the public and that the public shall have at least 30 days to comment thereon.

30. All information and documents submitted by Weslock to EPA pursuant to this Consent Decree shall be subject to public inspection unless identified as confidential by Weslock and deemed to be confidential by the EPA in conformance with 40 C.F.R. Part 2. The information and documents so identified as confidential will be disclosed only in accordance with EPA regulations. EPA will give Weslock notice in accordance with 40 C.F.R. Part 2 before disclosing such documents.

31. The Consent Decree shall not constitute evidence or an admission of any issue of fact or law by either party.

32. The terms of Paragraphs 20 and 23 do not limit injunctive remedies available for violation of this Consent Decree or the Act. ++EP++

Page 15

This Consent Decree is entered on this day of , 1987.

WILLIAM D. KELLER

Hon. William D. Keller

United States District Judge ++EP++

Page 16 CONSENT

We hereby consent to entry of this Consent Decree without further notice.

Respectfully submitted,

Dated: 7.30.87

/s/ (ILLEGIBLE)/Acting

F. HENRY HABICHT II

Assistant Attorney General

Dated:

/s/ Cynthia S. Huber

CYNTHIA S. HUBER, Attorney

Environmental Enforcement Section

Land & Natural Resources Division

U.S. Department of Justice

ROBERT C. BONNER

United States Attorney

Dated: 8-3-87

/s/ Stephen O. Peterson

JOSEPH F. BUTLER

Assistant United States Attorney

Central District of California

Dated:

/s/ Thomas L. Adams Jr.

THOMAS L. ADAMS, Jr.

Acting Assistant Administrator for Enforcement and Compliance Monitoring

United States Environmental Protection Agency ++EP++

Dated: June 23, 1987

/s/ Charles W.(ILLEGIBLE)

JUDITH E. AYRES

Regional Administrator

United States Environmental Protection Agency

Region IX

OF COUNSEL:

ALLAN ZABEL

Assistant Regional Counsel

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

Fremont, California 94105

RACHEL M. HOPP

Attorney-Advisor

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Room 3211B (LE-134A)

Washington, D.C. 20460

ATTORNEYS FOR PLAINTIFF

Dated: May 24, 1987

JOHN F. DAUM

O'MELVENY & MYERS

By /s/ (ILLEGIBLE)

John F. Daum

Attorneys for Defendant

Weslock Company

Dated: May 24, 1987

WESLOCK COMPANY

By: /s/ Michael D. Scott

Michael Scott

President ++EP++

WESLOCK COMPANY

DOC 01 OF 02

COMPLAINT

09-87-C010

CAA

METAL

19871007

19860630

CAD009686874

WESLOCK COMPANY

LOS ANGELES, CA

CV-86-4286-WDK

09

COMPLAIN