Document gGneBv9BkGNoeqwM5X6wV6o9

To: Dunham, SarahfDunham.Sarah@epa.gov] Cc: Doyle, Colleen[DoyleC@hunton.com]; Jackson, Ryan[jackson.ryan@epa.gov]; Gunasekara, MandyfGunasekara.Mandy@epa.gov]; paula.forbis@sdcounty.ca.gov[paula.forbis@sdcounty.ca.gov]; Greg.Knapp@hanson.biz[Greg.Knapp@hanson.biz]; Ana. Damonte@leHighHanson.com[Ana. Damonte@leHighHanson.com]; lan.Firth@hanson.biz[lan.Firth@hanson.biz]; Douglas.erwin@sdcounty.ca.gov[Douglas.erwin@sdcounty.ca.gov]; jim.swaney@sdcounty.ca.gov[jim.swaney@sdcounty.ca.gov] From: Zapatero, Rosie Sent: Wed 8/2/2017 9:40:42 PM Subject: Hanson Aggregates' Request for Guidance Re Common Control - (Part 1 of 2) EPA Lett :k of Common Control-c.pdf Please see attached sent on behalf of Colleen Doyle (Part 1 of 2) y Rosie Zapatero MS Sr Professional Assistant irzapatero@hunton.com p 213.532.2104 Hunton & Williams LLP 550 South Hope Street Suite 2000 Los Angeles, CA 90071 hunton.com This communication is confidential and is intended to be privileged pursuant to applicable law. If the reader of this message is not the intended recipient, please advise by return email immediately and then delete this message and all copies and backups thereof. 17cv1906 Sierra Club v. EPA ED_O01523A_00000344-00001 HUNTON& WILHAMS HUNTON & WILLIAMS LLP 550 SOUTH HOPE STREET, SUITE 2000 LOS ANGELES, CALIFORNIA 90071-2627 TEL 213 532 2000 FAX 213 532 2020 COLLEEN P. DOYLE DIRECT DIAL: 213-532-2102 EMAIL: doylec@hunton.com August 2, 2017 CONFIDENTIAL AND TRADE SECRET BUSINESS INFORMATION ENCLOSED DO NOT DISTRIBUTE VIA E-Mail and Overnight Delivery Ms. Sarah W. Dunham (Dunham.sarah@Epa.gov) Acting Assistant Administrator Office of Air and Radiation USEPA Headquarters 1200 Pennsylvania Avenue, N.W. Mail Code: 6201A Washington, D.C. 20460 Re: Lack of Common Control: Hanson Aggregates Paci fic Southwest, Inc. and Sycamore Landfill, Inc. Operations, Santee, California Dear Ms. Dunham, I write on behalf of Hanson Aggregates Pacific Southwest, Inc. ("Hanson") seeking guidance on the San Diego Air Pollution Control District's ("District") Title V common control determination for Hanson and Sycamore Landfill, Inc.'s ("SLI") operations in Santee, California. SLI owns the Santee facility where it operates a Class III solid waste landfill. Through a license agreement with SLI, Hanson conducts aggregate mining at the Santee location.1 While co-located, SLI and Hanson are independently owned companies with distinctly different operations and emissions. Asserting common control here defies the common sense notion of a plant, and forces a common control interpretation that is "unreasonably inconsistent with its plain meaning." Summit Petroleum Corp, v. EPA, 690 F.3d 733, 744 (6th Cir. 2012). As outlined below, the goals for aggregating -- improving air quality and preventing companies from skirting their regulatory compliance obligations -- are not accomplished by combining these two separate operations. 1 The SLI/Hanson license is memorialized in the Landfill Development Agreement ("License") and the First Amendment to Landfill Development Agreement (`Amended License"), copies of which are enclosed. ATLANTA AUSTIN BANGKOK BEIJING BRUSSELS C HARLOTTE DALLAS HOUSTON LONDON LOS ANGELES McLEAN MIAMI NEW YORK NORFOLK RALEIGH RIC HMOND SAN FRANCISCO TOKYO WASHINGTON www.hunton.com 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00001 Hunton WILLIAMS Ms. Sarah Dunham Acting Assistant Administrator Office of Air and Radiation August 2, 2017 Page 2 Landfill gas from SLI's landfill operations subjects it to Title V permitting as a major source of VOCs. Absent VOCs, no other pollutant would trigger Title V permitting at SLI's landfill. Hanson's mining operation is not a major source for any air pollutant, and does not emit VOCs from any stationary source. For the last 15 years, the District has regulated Hanson's PM 10 emissions under a permit to operate. Combined, SLI's and Hanson's PM 10 emissions are significantly below the 100 tpy PM 10 major source Title V triggering limit.2 Despite a lack of any major source emissions, whether considered alone or in conjunction with SLI, the District recently determined Hanson's operation is subject to Title V permitting. The District reasons that SLI is subject to Title V (because of triggering VOC levels), and SLI and Hanson are co-located, ergo Hanson's mining operation is subject to Title V permitting.3 The District has requested Hanson submit a Title V permit application and has indicated it intends to issue Hanson a separate Title V permit. As outlined below, Hanson maintains there is a lack of common control between SLI and Hanson. Because the District's Title V determination for Hanson is based on the facilities' co-location, absent common control, Title V permitting for Hanson's operation is inappropriate. BACKGROUND Hanson's Santee mining operation involves rock extraction, crushing and size segregation. Consistent with its District issued permit, Hanson controls PM 10 emissions through water spray systems and baghouse filtration. Hanson's license requires it to provide the labor, equipment, materials and utilities to conduct its mining operation. License 6.1. Accordingly, Hanson provides the mining and emission control equipment associated with its operation, and only Hanson employees are authorized to use it. The District's permit prohibits anyone other than Hanson from operating the equipment. 2 For Title V purposes, it is not appropriate to conbine potential fugitive emissions associated with Hanson's and SLI's Santee operations. See 40 CFR 70.2 (Major Source definition; potential to emit fugitive emissions) only included for specified sources whidi do not include landfilling or aggregate mining). 3 The District's position is outlined in the May 2,2017 correspondence from Paula Forbis, Senior Deputy, County of San Diego, Office of County Counsl to Stephen O'Neil, Sheppard Mullin Richter & Hampton, a copy of which is enclosed. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00002 Hunton WILLIAMS Ms. Sarah Dunham Acting Assistant Administrator Office of Air and Radiation August 2, 2017 Page 3 SLI utilizes areas mined by Hanson for waste disposal. SLI provides and controls the equipment it uses in landfilling operations, including emission control. SLI's policies and operating procedures prohibit any party other than SLI or its affiliates from operating the landfill gas collection equipment. DISCUSSION Title V's definition of major source has three key elements: (i) contiguous or adjacent properties; (ii) the same two digit SIC code; and (iii) common control.4 40 CFR 70.2; Seneca Energy IL LLC, 2016 WL 7489675, at *6 (U.S. Envtl. Prot. Agency Dec. 9, 2016) (Order Denying Petition for Objection to Permit) ("Seneca Denial"). It is the absence of common control that precludes Title V permitting for Hanson's operation. Aggregation needs to be "sufficiently predictable to give plausibly regulated entities `explicit notice as to whether (and on what statutory authority) the EPA construes the term [stationary source. . . Summit Petroleum 690 F.3d at 747 (citing Alabama Power Co. v. Costle, 633 F.3d 323, 397 (D.C. Cir. 1979)). Recognizing the constraints imposed by Alabama Power, the need to "approximate a common sense notion of `plant[,] was key to EPA's major source definition. 45 FR 52676, 52695 (Aug. 7, 1980). EPA explicitly wanted to "avoid aggregating pollutant-emitting activities .... that are ordinarily considered separate." Id.; see also 56 FR 21712, 21724 (EPA's approach to defining major source under Title V "avoids the possibility that dissimilar sources . . . will be considered as the same "source" because of common ownership.") Combining completely separate landfill and aggregate mining operations defies any common sense notion of a plant. Instead, it improperly aggregates "pollutant-emitting activities .... that are ordinarily considered separate." 45 FR at 52695. The District cannot override EPA's fundamental rationale for Title V aggregation simply by referencing various provisions of the parties' license agreement. 4 While SLI and Hanson have different primary SIC calcs, at this time, Hanson is not addressing the District's support facility determination. Accordhgly, the SIC code prong is not discussed further. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00003 Hunton WILLIAMS Ms. Sarah Dunham Acting Assistant Administrator Office of Air and Radiation August 2, 2017 Page 4 Except for location, SLI and Hanson do not share operations. Co-location alone, however, is not sufficient to determine common control. At most, it creates "a logical starting point" to analyze the case specific facts. Seneca Denial at 7, 17. As EPA has said repeatedly, common control determinations are made on case-by-case basis, taking into account the specific facts of the case. See e.g., Id. at 7, 14. The circumstances here confirm there is no common control. There is no overlap in the companies' workforces, security forces, corporate officers or board members. Likewise, the two companies do not share administrative functions. They have separate payrolls, employee benefits, health plans, retirement funds and insurance coverage. Each company has independent responsibility to comply with applicable environmental laws and obtain the appropriate permits. License 7, 9.3. The companies have separate business and hazardous materials permits and stormwater pollution prevention plans. As the License Agreement makes clear, the volume of extractable material does not equate to the volume of saleable aggregate. Rather, 40% of the material to be extracted is anticipated to be saleable aggregate, with the remaining 60% classified as "fine material." Amended License, Amended Recital B. Hanson's license does not give it ownership interest in the material to be extracted. Rather, title to aggregate transfers upon extraction. Amended License 5(b). Hanson never has title to the fine material. Rather, Hanson returns the fine material to SLI, who uses it as daily cover in its landfill operations. Contrary to the District's suggestion, return of earthen material to its rightful owner, for reuse at the facility at which it is located, does not amount to a sharing of intermediaries, products or byproducts. Hanson's sale of roughly 90% of its mined aggregate to third parties further highlights the separate control of the operations. See e.g., R. Miller Aug. 25, 1999 letter to W. Baumann at 3 (there is no common control between food processor and the co-located power plant when the power plant's generators only provide 10% of their total output to the food processor). Aggregating for Title V purposes was intended when "the aggregated activities emit enough pollutants to trigger the applicable emissions thresholds provided in the Act." 56 FR at 21724. "The purpose of aggregation therefore is simple: ensure actual major sources of pollution are regulated as such to ensure full and adequate protection of air quality, public health and welfare." Kerr-Mcgee Gathering LLC, 2010 WL 7206738, at *8 (U.S. Envtl. Prot. Agency Nov. 3, 2010) (Petition to Object to Issuance of a State Title V Operating Permit). Here, aggregating SLI and Hanson neither triggers applicable emissions thresholds nor serves 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00004 Hunton WILLIAMS Ms. Sarah Dunham Acting Assistant Administrator Office of Air and Radiation August 2, 2017 Page 5 the purpose underlying aggregation. The combined operations do not exceed the 100 tpy PM 10 Title V triggering amount. Likewise, aggregating does not change VOC emissions. SLI is a major source for VOCs regardless of Hanson's operation (which do not involve VOC emissions). Moreover, existing air quality permits for both operations "ensure full and adequate protection of air quality, public health and welfare." Id. The fact that Hanson's operation is co-located with SLI's is not a sufficient justification to sweep Hanson into Title V permitting. Importantly, no environmental benefit is gained from requiring Hanson's Santee operation to comply with Title V permitting. EPA adopted the "all-compassing" aggregating approach to protect air quality and "[a] definitional structure that aggregates pollutant-emitting activities into one `source' would serve that purpose ...." 45 FR at 52694. EPA also wanted to prevent companies from attempting to shield themselves from major source compliance obligations. See e.g., Oglethorpe Power Co. Wansley Combined Cycle Energy Facility, 2005 WL 6585013 (U.S. Envtl. Prot. Agency Nov. 14, 2005) (Amended Order Denying Petition for Objection to Permit in Response to Remand) ("The purpose of the "common control" test in defining a major stationary source for permitting purposes is to ensure that sources do not evade major source status (and its more stringent requirements) by artificially sub-dividing sources."). Neither concern is applicable here. The major source concern at the Santee location is VOCs. VOC emissions are directly addressed by SLI's Title V permit. While not sufficient to trigger a major source determination, PM 10 emissions are addressed through SLI's Title V permit and Hanson's District issued permit to operate. Rather than streamline permitting, imposing Title V permitting on Hanson's operation complicates it. The District and Hanson will expend considerable time, effort and resources on a Title V permit (both in application processing and ongoing recordkeeping and monitoring). For the reasons outlined above, Hanson appreciates EPA's guidance on the appropriateness of the District's common control determination given the unique facts present here. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00005 Hunton WILHAMS Ms. Sarah Dunham Acting Assistant Administrator Office of Air and Radiation August 2, 2017 Page 6 Thank you in advance for your time and assistance. Sincerely, Colleen Doyle Enclosures (License Agreements; District May 2017 letter) cc: Mr. Ryan Jackson (Jackson.ryan@Epa.gov) Ms. Amanda Gunasekara (Gunasekara.mandy@Epa.gov) Paula Forbis, Esq. (Paula.Forbis@sdcounty.ca.gov) Mr. Jim Swaney Mr. Doug Erwin Ana Damonte, Esq. Mr. Ian Firth Mr. Greg Knapp 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00006 LANDFILL DEVELOPMENT AGREEMENT THIS LANDFILL DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of December 31, 2006, by and between SOUTH COAST MATERIALS COMPANY, a California corporation ("SCMC"), and SYCAMORE LANDFILL, INC., a California corporation ("SLI") and is made in reference to the following facts and understandings: RECITALS A. SLI, an affiliate of Allied Waste Industries, Inc., is a waste services company and owns approximately five hundred twenty (520) acres of property in San Diego, San Diego County, California (the "Property"). SCMC and its affiliates extract, process, sell, and market aggregates in and around San Diego County, California. SLI has identified approximately 324 acres of the Property (the "Property") to be developed as a landfill. The Property is more particularly described on Exhibit A. B. The parties estimate that there are thirty four million two hundred thousand (34,200,000) cubic yards of material to be extracted from the Property (the" Material"). Of this Material, forty percent (40%) is estimated to be saleable aggregates (the "Aggregates") with the remainder being material that is not saleable aggregates. C. The parties hold (or will submit and process applications, if necessary, to enable them to hold) the necessary permits, entitlements, and financial assurances (the "Entitlements") for SCMC or a third-party operator to extract and process the Material from the Property (the "Work"). The Entitlements are more particularly described in Section 7. D. The parties desire to enter into an arrangement whereby SCMC will cause the Material to be removed from the Property over a period of seventeen (17) years in a manner consistent with SLI's needs to develop the Property as a landfill and the Aggre gates to be marketed, all pursuant to the terms and conditions of this Agreement. E. On December 31,2002, SCMC and SLI entered into a similar landfill development agreement to remove Material and market Aggregates for Phase I of the Property development This agreement modifies the original understanding going forward. AGREEMENTS NOW, THEREFORE, in consideration of the agreements of the parties hereto, and intending to be legally bound hereby, the parties hereto agree as follows: 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00007 1. LICENSE. 1.1 Grant of License. SLI, for and in consideration of the royalties, covenants and agreements hereinafter expressed to be paid, kept and performed by SCMC, hereby grants and conveys to SCMC an irrevocable (subject to terms herein) license, for the term set forth herein, for each and all of the following purposes: (a) The right to extract, process and/or remove all Material from the Property, exclusive as against any other aggregate processor other than any third-party operator hired by SCMC, as provided in Section 6.2; (b) Subject to the Entitlements and all necessary and required governmental regulations and permits, (i) the right to drill, blast, extract, load, stockpile, crush, screen, mix, and/or process the Aggregates from the Property, exclusive as against any other aggregate processor other than any third-party operator hired by SCMC, as provided in Section 6.2, (ii) the right to construct and operate the necessary rock crashing and other rock processing plants on the Property, exclusive as against any other aggregate processor other than any third-party operator hired by SCMC, as provided in Section 6.2, (iii) the right to stockpile Material, saleable or not, on the Property, exclusive as against any other aggregate processor other than any third-party operator hired by SCMC, as provided in Section 6.2, and (iv) the exclusive right to sell, market, transport, and/or export the Aggregates from the Property. (c) A non-exclusive limited right of access, ingress, and egress for not more than 380 vehicles per day over the Property for the purposes set forth herein and as shown on the Right-of-Way Map, attached hereto as Exhibit B; (d) The right to conduct those activities reasonably necessary and related to those expressly stated in this Section 1.1, including those activities necessary to comply with the Entitlements or any other governmental regulations or permits. 1.2 SLI's Development Needs. Notwithstanding the license contained in Section 1.1, the parties acknowledge and agree that while this license is exclusive as against any other aggregate processor other than any third-party operator hired by SCMC, it is not exclusive as to SLI and SLI has the right to (i) access the property to supplement SCMC's work if necessary, including as needed excavation, extraction, drilling, blasting, etc., (ii) place liners in all or a portion of the Property, (iii) stockpile Material, or (iv) do any other activity reasonably necessary for SLI to timely and effectively operate its landfill according to its permits, all as provided in Section 6.2. 1 -3 Interest in Real Property. The parties acknowledge and agree that the irrevocable license granted in Section 1.1 is an interest in real property in the nature of a profit a prendre in gross and as such is alienable, subject to Section 10.13, and shall be binding and enforceable as against SLI, its successors and assigns, and subsequent 2 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00008 purchasers and/or encumbrancers of the Property. This interest may be recorded with the County Recorders Office. 1.4 Right of Limited Entry. Nothing herein shall prevent SLI from entering the Property in connection with SLI's landfilling activities, including but not limited to entry to excavate, extract and/or stockpile Material, entry to place liners in all or a portion of the Property, or other necessary activities, all as provided in Section 6.2; provided that SLI gives SCMC prior notice and coordinates such activities with SCMC so as not to interfere with SCMC's operations within the Property. 2- TERM. The initial term of this Agreement shall commence on the date first given above and terminate on December 31,2023. Subject to an exception granted SCMC pursuant to Section 9.6, SCMC agrees to complete this mining project in 17 years. As provided in Section 9.5, the term may be extended for additional phases on the Property. 3. PAYMENTS BY SCMC. 3.1 Permit Fee. Concurrently with the execution of this Agreement, SCMC shall pay SLI a permit fee in the amount of Four Hundred Thousand Dollars ($400,000). 3.2 Fixed Royalty. Fixed royalties shall be paid according to the following terms: (a) Beginning January 2007, and continuing on a monthly basis for the duration of the Term of this agreement, SCMC shall pay SLI a fixed royalty payment in accordance with Exhibit E attached hereto. Said Exhibit specified the amount of Fixed Royalty to be paid to SLI during the first 24 months. Additional Fixed Royalties shall be paid to SLI in subsequent years throughout the entire Term. Said royalties shall be recalculated every two years using similar terms and conditions of value established during the first two year period, however, using an escalator of not less than 5 % per year for the remainder of the Term. (b) Said payments are due on or before the 15th day of each month for which a fixed monthly royalty payment is due, beginning January 15,2007. 3.3 Production Royalty. (a) Subject to the adjustment provided in Section 3.3(b) or Section 5, SCMC shall pay a royalty of Forty- Six Cents ($0.46) per ton of Aggregates as a production royalty during the term of this Agreement (as adjusted, the "Production Royalty Rate"). Such royalties are due thirty-five (35) days after the end of the month in which Aggregates are removed from the Property. (b) Beginning on January 1, 2007, until December 31, 2023, the Production Royally Rate shall be adjusted in proportion to the greater of (i)the 3 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00009 increase in the CPI (as defined in Section 3.3(c)) or (ii) the increase in the PPI (as defined in Section 3.3(d)), in either case which has occurred during the review period, as the case may be. (c) The term "CPI" means the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPIU) for San Diego, California, on the basis of 1982-84 = 100. If the format or components of the CPI are materially changed after the execution of this Agreement, the parties shall substitute an index which is published by the Bureau of Labor Statistics, or a similar agency, and which in the parties' judgment, is equivalent to the CPI in effect on the date of this Agreement. (d) The term "PPP' means the United States Department of Labor, Bureau of Labor Statistics, Producer Price Index for Construction sand, gravel, arid crushed stone (commodity code 13-21) on the basis of 1982 = 100. If the format or components of the PPI are materially changed after the execution of this Agreement, the parties shall substitute an index which is published by the Bureau of Labor Statistics, or a similar agency, and which in the parties' judgment, is equivalent to the PPI in effect on the date of this Agreement. (e) Beginning January 1, 2008 and for the remainder of the Tern, the Production Royalty Rate shall be adjusted in proportion to the greater of (i) the increase in CPI or (ii), the increase in PPI, or (iii) the year over year increase in selling price for all third party Aggregates produced or sold from the property. 3.4 Inspection of Books. SLI, or its authorized agent, shall have the right to inspect and make copies of all records made or kept by SCMC of all Material removed and all Aggregates produced and sold from the Property and SCMC shall have the duty to maintain all such records at its mam office, 9229 Harris Plant Road, San Diego, California 92145, or at such other place as SCMC may reasonably designate. Said right of SLI may be exercised at the main office of SCMC or at such other places as SCMC may reasonably designate, at a location within a reasonable proximity from the Property, at all reasonable times and intervals and in such a manner as to not unduly interfere with SCMC's operations. Any and all information obtained by SLI or its authorized agent in connection with the inspection and copying of records of SCMC pursuant to this Section 3 shall at all times be kept in absolute confidence by SLI or such agent and not disseminated to any other party in any form or media, excepting dissemination (i) in litigation among the parties hereto or (ii) to the extent legally compelled by court order or legal process. 3.5 Saleable Aggregates. For clarification, the Production Royalty (Section 3.3) is only paid on Aggregates, which are those aggregates actually separated from the Material extracted from the Property and removed from the Property. Aggregates may not be stockpiled by SCMC in a manner that interferes with SLI operations 4 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00010 4. EXTRACTION FEE. SLI shall pay an Extraction Fee to SCMC of One Dollar and Eighty-five Cents ($1.85) per cubic yard of Material (saleable or not) excavated by SCMC per month during the term of this Agreement. Said Fee shall be increased by a minimum of 5% per year during the term extraction takes place. Such fee is due thirty-five (35) days after the end of the month in which Material is extracted. This extraction fee shall not be paid to SCMC for any extraction performed by SLI or its subcontractors. To the extent that Material not processed as Aggregates is extracted and the cost to SCMC to move such Material to its ultimate destination is greater than the cost to move Material to SCMC's regular processing site for Aggregates, SLI shall reimburse SCMC for such additional cost. 5. QUANTITY AND QUALITY OF MATERIALS. As stated above in Recital B, the parties estimate that there are thirty four million two hundred thousand (34,200,000) cubic yards of Material to be extracted by SCMC from the Property. Of the Material, forty percent (40%) is estimated to be Aggregates. The parties agree to meet on a (2) twoyear basis to share information as to the quantity and quality of materials and to discuss to the extent that Material contains more or less than 40% Aggregate waste, SLI and SCMC shall be entitled to an equitable adjustment of the Production Royalty Rate on a going forward basis. 6. MINING. 6.1 Labor and Equipment. SCMC shall provide all labor, equipment, materials, and utilities to extract the Material and process the Aggregates, either by itself or through a third-party operator approved by SLI, such approval not to be unreasonably withheld. SCMC shall install sufficient equipment to process the Quantity of Material and Aggregates anticipated to be mined during the term. In the event, SLI requires SCMC to relocate any or all of the equipment sooner than January 1, 2022, SLI shall pay for a proratta share of the relocation expenses reduced on a straight-line depreciation over the first fifteen years of the contract period. The parties agree and acknowledge that Hanson Aggregates Pacific Southwest, Inc. ("HAPSW"), an affiliate of SCMC, is an approved third-party operator and no further consent of SLI is needed for HAPSW to perform those duties or undertake those obligations delegated to it by SCMC. 6.2 Mining Plan. As soon as practicable after the execution of this Agreement and from time to time thereafter, SCMC and SLI shall jointly prepare or update, as the case may be, a plan describing the extraction of Material from the Property (the "Mining Plan"). The Mining Plan shall be consistent with SLI's need to have the Property prepared for its eventual use as a landfill and with SCMC's need to extract Aggregates in an efficient manner. On or about September 1st of each year of the Agreement, SLI shall provide SCMC with copies of Landfill development plans detailing the specific location of Landfill development needed for the upcoming calendar year along with the Landfill development progression anticipated over the next five-year period. SLI'S plans shall include engineering estimates of Quantities of Material to be removed along with details regarding any and all permit limitation and/or restriction that would impact SCMC'S ability 5 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00011 to perform under this agreement. SLI and SCMC shall agree on a mining plan including Quantities of Material to be extracted during the upcoming calendar year. Any modifications to the plan(s) must be agreed upon by both parties. SCMC shall use the agreed upon mining plan to develop the anticipated Cost of Extraction ("Cost") for removing and processing Material during the upcoming calendar year. Said Cost shall be the sole responsibility of SCMC and shall include cost of transportation and disposal of fines into the Designated Fines Materials Conveyance Aiea. The Mining Plan may provide for, and nothing in this Agreement shall prohibit, SLI from the following activities: (i) excavation, extraction, drilling, and blasting of Material, (ii) placing liners in all or a portion of the Property, (iii) stockpiling Material, or (iv) doing any other activity reasonably necessary for SLI to timely and effectively operate its landfill according to its permits; provided, however, that (x) SLI will extract Material in such a manner as to preserve the Aggregates for extraction by SCMC at no additional cost to SCMC. 6.3 Removal of Fines. As part of its obligations under this Agreement, SCMC shall convey fine materials to the area designated on Exhibit C (the "Fine Materials Conveyance Area"). By mutual agreement of the parties, the Fine Materials Conveyance Area may be changed as part of updating the Mining Plan pursuant to Section 6.2. SLI shall remove fine materials from SCMC's stockpile located at the Fine Materials Conveyance Area at the discharge point of the conveyor head pulley and shall remove such fine materials at a rate consistent with SCMC's ongoing operations. SLI may request that fine materials be conveyed to a location other than the Fine Materials Conveyance Area. To the extent the location designated by SLI for conveying fine materials results in additional expense to SCMC, SCMC shall inform SLI of SCMC's additional capital costs and operating expenses, plus a reasonable profit margin on the cost of capital (the "SCMC Additional Costs"), and SLI agrees to reimburse SCMC for the SCMC Additional Costs. Such reimbursement may be handled as an adjustment to one (1) or more of the payments provided in Sections 3.2,and 4. If SLI disputes or objects to the SCMC Additional Costs, SLI at its sole expense shall make its own arrangements to convey the fine materials to the desired location. 6.4 Progress Meetings. SCMC and SLI will meet no less than quarterly to review and, as necessary, update the Mining Plan. In addition, both parties shall meet on or before January 1, 2009 and on a minimum two-year interval thereafter to consider the terms and conditions of this agreement. Both parties will review the mining/landfilling schedules along with payment schedules and other pertinent matters relating to the agreement. Any changes to these terms shall be discussed then and modified/reconciled only if approved by both parties. 6.5 Mining Practices. SCMC shall work the Property in a good and workmanlike manner in accordance with accepted mining practices, including compliance with all applicable laws, ordinances, regulations and permits, and in compliance with MSHA, OSHA and Cal-OSHA requirements in addition to any other applicable mining or environmental law applicable to aggregate processing operations being performed on the Property by SCMC or its third-party operator. 6 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00012 6.6 Grading. At the end of the term of this Agreement, SCMC shall deliver to SLI the Property graded to within eighteen (18) inches, plus or minus six (6) inches, of SLI's grading plan previously delivered to SCMC. The grading plan is attached hereto as Exhibit D. 6.7 Weighmaster. The quantity of saleable Aggregates shall be deter mined by actual weight measured by scales operated by a weighmaster (Cal. Bus. & Prof. Code 12700 et seq.) employed by SCMC. SLI's right to inspect SCMC's books described in Section 3.4 shall apply to this Section 6.7. 6.8 Extraction Reconciliation. An annual aerial survey will be per formed to quantify extraction for purposes of reconciling to the monthly volumes. The cost of the annual aerial survey will be shared equally between SLI and SCMC. ' 6.9 Community Relations. The parties shall mutually agree upon and establish a community relations program that is similar in scope to the community relations program HAPSW has in place at HAPSW's Carroll Canyon operations. SCMC agrees that it will provide SLI with advance notice of any community relations activities, including any written or verbal community with the public regarding SCMC or its third- party operator's Work on the Property, and shall obtain SLI's approval prior to disseminating any written or verbal communications with the public, including but not limited to public officials, community groups, environmental groups and news organiza tions. 6.10 Mining Operator Annual Report. If necessary, SCMC shall com plete the Annual Report for the State of California Department of Conservation and make payment of annual reporting fees. 6.11 Revegetation and Landscaping. SLI shall be responsible for site reclamation, including revegetation and landscaping. SLI's responsibilities shall extend to compliance with all conditions of approval that apply to site reclamation. In the event SCMC secures additional permits and approvals that require landscaping improvements not contemplated under this agreement, SCMC shall be responsible for installing and maintaining such landscaping improvements. 6.12 Blasting. Should SCMC determine blasting is required, it will be performed at industry standards and in compliance with all laws, rules, regulations and permit requirements, including any mitigation measures required as part of SLI's Mitigation Monitoring and Reporting Program under CEQA. SCMC shall be responsible for securing all necessary approvals and will provide SLI notice at least forty-eight (48) hours prior to blasting. 6.13 Repair and Restoration. Within ninety (90) days following comple tion of the Work on the final phase at the Property, SCMC shall restore the surface of the Property on which its equipment was stored or on which any structure was built or placed 7 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00013 on the Properly by or on behalf of SCMC or its third-party operator to the condition it was in prior to the commencement of the Work, at SCMC's sole cost and expense. Said closure related activity shall include the removal of all processing equipment, stockpiles, foundations, and wiring from conduit, including any asbestos containing materials. 6.14 SLI Aggregate Needs. SLI anticipates purchasing in excess of 200,000 cubic yards of suitable Aggregate for purposes of constructing Landfill on the Property. SCMC agrees to provide SLI with the above-quantity and quality of Aggregate at a "best customer class" rate. 6-15 SCMC Disposal/Needs. In the event SCMC requires waste disposal services on the Property, SLI shall provide such services at a comparable discounted rate. ' 7. ENTITLEMENTS. 7.1 SCMC's Permits. SCMC, at its sole expense, has obtained or shall obtain the following permits related to its operation at the Property. (a) Business license; (b) Air permit; (c) Storm water permit; (d) Waste Discharge Requirement Order; and (e) Health permit. 7.2 SLI's Permits. SLI, at its sole expense, has obtained or shall obtain the following permits related to the Property, or demonstrate an exemption: (a) A Community Plan Amendment/Site Development Permit/ Planned Development Permit/Multi-Habitat Planning Area (MHPA) Boundary Adjust ment LDR 40-0765 (the "City Approvals"); (b) A Section 1603 Streambed Alteration Permit from the California Department of Fish and Game; and (c) Except as otherwise provided, all other Entitlements related to the Property and the transaction contemplated by this Agreement. 7.3 SMARA. If the Surface Mining and Reclamation Act of 1975 (Cal. Pub. Resources Code 2710 et seq.) Applies to SCMC's activities on the Property, the parties agree that SLI shall process the application required by such act with expenses to be paid by SCMC. 8 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00014 7.4 Compliance with Law. The parties shall comply with all Federal, State and local statutes, ordinances, resolutions, mandates, orders, plans, regulations, guidelines, decisions or other administrative, legislative, judicial or executive rules governing their respective operations on the Property. 8- INDEMNITY; INSURANCE. 8-1 SCMC's Indemnity. SCMC, for itself, its successors and assigns, agrees to defend, indemnify and hold harmless SLI, SLI's successors and assigns, and SLI's agents, officers, directors, stockholders, servants and employees, from and against any and all claims, demands, damages, actions or causes of action at law or in equity, together with any and all losses, costs or expenses and attorneys' fees, in connection therewith or related thereto, for bodily injuries, death or property damage arising or in any matter growing out of the acts or omissions of SCMC, SCMC's employees, agents, contractors, subcontractors or other representatives. 8.2 SLI's Indemnity. SLI, for itself, its successors and assigns, agrees to defend, indemnify and hold harmless SCMC, SCMC's successors and assigns, and SCMC's agents, officers, directors, stockholders, servants and employees, from and against any and all claims, demands, damages, actions or causes of action at law or in equity, together with any and all losses, costs or expenses and attorneys' fees, in con nection therewith or related thereto, for bodily injuries, death or property damage arising or in any matter growing out of the acts or omissions of SLI, SLI's employees, agents, contractors, subcontractors or other representatives. 8.3 SCMC's Liability Insurance. SCMC shall, at SCMC's sole cost, keep in force during the term of this Agreement a policy of commercial general liability insurance covering property damage and liability for personal injury occurring on or about the Property, with limits in the amount of at least Five Million Dollars ($5,000,000) general aggregate, Two Million Dollars ($2,000,000) per occurrence for injuries to or death of person, property damage, and with a contractual liability endorsement insuring SCMC's performance of SCMC's indemnity obligations of this Agreement. SCMC shall provide SLI with evidence of coverage within three (3) business days of SLI's request. 8.4 SLI Liability Insurance. SLI shall, at SLI's sole cost, keep in force during the term of this Agreement a policy of commercial general liability insurance covering property damage and liability for personal injury occurring on or about the Property, with limits in the amount of at least Five Million Dollars ($5,000,000) general aggregate, Two Million Dollars ($2,000,000) per occurrence for injuries to or death of person, property damage, and with a contractual liability endorsement insuring SLI's performance of SLI's indemnity obligations of this Agreement. SLI shall provide SCMC with evidence of coverage within three (3) business days of SCMC's request. 9 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00015 8,5 Workers' Compensation Insurance. SCMC shall maintain workers' compensation insurance in the amount required by law. 8.6 Waiver of Subrogation. SLI and SCMC each hereby waives any and all rights of recovery against the other, and against the partners, members, shareholders, directors, officers, employees, agents and representatives of the other, for loss of or damage to the property of a party or injury to a person to the extent such damage or injury is covered by proceeds received under any insurance policy carried by SLI or SCMC in force at the time of such loss or damage. 9. ADDITIONAL TERMS. 9.1 Liens and Notices of Non-responsibilitv. SCMC agrees to keep the Property at all times free and clear of all liens, charges and encumbrances of any and every nature and description done, made or caused by SCMC, and to pay all indebtedness and liabilities incurred by or for SCMC which may or might become a lien, charge or encumbrance; except that SCMC need not discharge or release any such lien, charge or encumbrance so long as SCMC disputes or contests the lien, charge or encumbrance and posts a bond sufficient to discharge such lien acceptable to SLI. Subject to SCMC's right to post a bond in accordance with the foregoing, if SCMC does not within thirty (30) days following the imposition of any such lien, charge or encumbrance, cause the same to be released of record, SLI shall have, in addition to SLI's contractual and legal remedies, the right, but not the obligation, to cause the lien to be released by such manner as SLI deems proper, including payment of the claim giving rise to such lien, charge or encumbrance. All sums paid by SLI for and all expenses incurred by it in connection with such purpose shall be payable by SCMC to SLI on demand with interest at twelve percent (12%) per annum starting from the date due until paid in full. 9.2 Taxes. SLI shall pay any and all taxes assessed and due against the Properly before and after execution of this Agreement. SLI shall not be liable for any taxes levied on or measured by income or proceeds, or other taxes applicable to SCMC, based on payments under this Agreement or based upon the severance or production of Aggregates by SCMC from the Property. If there is an increase in real property taxes due to the granting of an exclusive license to SCMC for mining aggregates, the parties agree to share payment of such increase in an equitable manner, 9-3 Environmental Protection. SCMC shall take all reasonable pre cautions to prevent the improper disposal or release of hazardous wastes and the pollution of air and water by SCMC's operations. Any facilities for employees established on the Property shall be operated in a sanitary manner. It shall be SCMC's sole responsibility to comply with all applicable environmental laws or regulations, subject to SCMC's right to contest the same. If SLI finds physical evidence that air, land, water quality, or other environmental damage has occurred or is about to occur due to SCMC's non-compliance with said environmental laws or regulations, SLI shall have the right, upon written notice to SCMC, to require SCMC or its contractors, agents, or assigns to cease, alter, or modify 10 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00016 immediately that portion of operations on the Property which is causing or is about to cause such air, land, water quality, or other environmental damage; and to direct SCMC in writing to take immediate action to correct or eliminate said damage or threat thereof. SCMC shall then, in consultation with SLI, review the operations to determine if additional actions are necessary to correct or eliminate such damage or threat and shall correct or eliminate the damage or threatened damage immediately, as may be required by SLI or any governmental agency. SLI's rights under this provision shall not release SCMC of its obligations hereunder, nor shall they constitute a waiver of SLI's rights as provided by this Agreement and/or by law. SLI shall be under no obligation to provide for any inspections as to environmental practices of SCMC or to take any responsibility whatsoever for SCMC's actions, it being agreed that compliance therefor is the sole responsibility of SCMC. Liability for any environmental or water quality damage that is caused by SCMC or its contractors, agents, or assigns, shall be borne by and at the sole expense of SCMC, which will be paid immediately upon demand, If SCMC fails or refuses to correct or repair within a reasonable time any environmental damage caused by SCMC's failure to comply with applicable laws or with any obligation or covenant of this Agreement after being directed to do so, then SLI shall have the right to contract with any qualified party to correct said condition, and SCMC shall pay to SLI on demand for all costs, including attorney's fees, of said correction or repair. Notwithstanding any other provisions of this Agreement, SCMC shall defend, indemnify and hold harmless SLI from any and all losses, damages, expenses, claims, demands, and civil or criminal liabilities or penalties; clean-up lawsuits and other proceedings; and all costs and expenses including damages, attorneys' fees, and disbursements which accrue to or are incurred by SLI, arising directly or indirectly from, or out of, or which are in any way connected with SCMC's acts or omissions which cause environmental or water quality damage as defined by noncompliance with federal, state or local regulations, orders, or laws; or which cause losses, damages, expenses, claims, demands, or civil or criminal penalties or sanctions to be incurred. SCMC agrees to store, transport, and dispose of any hazardous substances, and all hazardous wastes, as defined by any applicable state or federal law, in accordance with all local, state, and federal laws, including the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act, as amended ("CERCLA"), regarding the same. SCMC shall not dispose of any hazardous wastes upon the Property. Further, SLI and SCMC acknowledge and agree that in the event mining wastes are regulated by CERCLA, or by any other statute, SCMC may dispose of such wastes on the Property provided SCMC complies fully with such laws and shall be solely responsible for any contamination or other environmental damage found on the Property resulting from SCMC's operations, including the cost of clean-up. At the end of each year, SCMC shall notify SLI of all hazardous substances and hazardous wastes and the quantities brought to, stored upon, used on, or transported from the Property. The provisions of this Section 9.3 are in addition to the other provisions of this Agreement and shall survive any termination or expiration of this Agreement. 9.4 Corporate Guarantees. Either party may request a guarantee from an affiliated corporation of the other party, such request not to be unreasonably refused. 11 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00017 9.5 Renewal for Additional Phases. As additional consideration to SCMC for its obligations under this Agreement, SLI hereby grants SCMC the exclusive right of first refusal to renew this Agreement on substantially similar terms for additional Materials of the Property beyond the Quantity described in Section 5. 9.6 Time Obligations. Time is of the essence in the performance of the obligations of this Agreement and is expected to be completed by SCMC in 17 years. The party responsible for performance of an obligation under this Agreement shall commence performance and thereafter diligently proceed with performance thereof to completion according to the timetables set forth herein. However, if a party is delayed in the performance of its obligation(s) hereunder by reason of, and only by reason of: (i) failure of the other party to perform its obligations contained herein by the time or times required (including any applicable cure periods); (ii) unusual or extreme weather, such as a 100-year flood event; (iii) war; (iv) acts of God; (v) governmental moratoria; (vi) insurrection; or (vii) labor disputes not in violation of any project labor agreement or similar agreement; then the time for completion of the performance shall be extended for a period equal to the length of such delay, if: (a) Within the earlier of (i) three (3) calendar days after the party who asserts its performance is being delayed ("Promisor") becomes aware of such delay, and (ii)ten (10) calendar days after Promisor should have become aware of such delay through the exercise of reasonable diligence, Promisor gives notice in writing of the event causing such delay; (b) Within 10 calendar days after the cessation of the event causing such delay, Promisor provides written notice to the other party of the duration of the delay and the corresponding extension request by Promisor, and describing such event, as well as how such event will affect the critical path for completion of the performance being delayed; and (c) Promisor provides evidence to the reasonable satisfaction of the other party that such event delayed a portion of the work in the critical path and the duration of such delay. 9.7 SCMC Default. (a) The occurrence of any of the following shall constitute a SCMC event of default (an "SCMC Event ofDefault"): (1) The insolvency of SCMC or HAPSW; (2) The filing of a voluntary petition in bankruptcy or any similar proceeding against SCMC or HAPSW; 12 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00018 (3) Filing of any involuntary petition in bankruptcy or any similar proceeding against SCMC or HAPSW which is not dismissed within sixty (60) days; (4) Appointment of a receiver or trustee for SCMC or HAPSW which is not dismissed within sixty (60) days; (5) Execution by SCMC or HAPSW of any assignment of all or any portion of its rights or obligations hereunder in violation of the provisions of this Agreement; (6) Failure to commence the Work to be performed by SCMC or HAPSW as set forth in accordance with the provisions of this Agreement; (7) Failure to prosecute the Work to completion in a diligent, efficient, workmanlike, skillful and careful manner in accordance with the provisions of this Agreement; (8) Failure to pay required taxes when due (except that SCMC may delay payment thereof pending resolution of a legitimate dispute with respect to such taxes); (9) Failure to maintain required insurance; under this Agreement; or (10) Failure to perform any of its material obligations Agreement. (11) Repudiation or breach of any of the terms of this (b) An SCMC Event of Default shall not be deemed to have occurred if (i) such default is a default involving the payment of money and SCMC cures such event within a period of ten (10) days after receipt of written notice from SLI specifying the SCMC Event of Default; or (ii) such default involves a non-monetary obligation of the SCMC and SCMC commences a cure of such event within a period of ten (10) days after receipt of written notice from SLI specifying the SCMC Event of Default and thereafter diligently pursues such cure to completion in accordance with a schedule reasonably acceptable to SLI. (c) Upon the occurrence of an SCMC Event of Default, SLI shall make every reasonable effort to mitigate its losses and damages hereunder. SLI shall retain all sums of money theretofore paid hereunder to SLI, and SCMC shall pay to SLI a sum of money equal to the cost of the Work for all Work performed hereunder by SCMC for which payments have not theretofore been made hereunder. SLI's only remedies for an SCMC Event of Default shall be those that are expressly set forth in this Agreement. 13 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00019 9.8 SU Default. (a) The occurrence of any of the following shall constitute a SLI event of default (an "SLI Event of Default"): (1) The insolvency of SLI; (2) The filing of a voluntary petition in bankruptcy or any similar proceeding against SLI; (3) Filing of any involuntary petition in bankruptcy or any similar proceeding against SLI which is not dismissed within sixty (60) days; (4) Appointment of a receiver or trustee for SLI which is not dismissed within sixty (60) days; (5) Execution by SLI of any assignment of all or any portion ofits rights or obligations hereunder in violation ofthe provisions ofthis Agreement; (6) Failure to pay required taxes when due (except that SLI may delay payment thereof pending resolution of a legitimate dispute with respect to such taxes); (7) Failure to maintain required insurance; this Agreement; or (8) Failure to perform any of its material obligations under Agreement. (9) Repudiation or breach of any of the terms of this (b) An SLI Event of Default shall not be deemed to have occurred if (i) such default is a default involving the payment of money and SLI cures such event within a period of ten (10) days after receipt of written notice from SCMC specifying the SLI Event of Default; or (ii) such default involves a non-monetary obligation of the SLI and SLI commences a cure of such event within a period often (10) days after receipt of written notice from SCMC specifying the SLI Event of Default and thereafter diligently pursues such cure to completion in accordance with a schedule reasonably acceptable to SCMC. (c) Upon the occurrence of an SLI Event of Default, SCMC immediately shall terminate performance of the Work and make every reasonable effort to mitigate its losses and damages hereunder; provided, however, in connection with such termination SCMC shall perform such acts as may be necessary to preserve and protect that part of the Work theretofore performed hereunder. SCMC shall retain all sums of money theretofore paid hereunder to SCMC, and SLI shall pay to SCMC a sum of money 14 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00020 equal to the cost of the Work for all Work performed hereunder by SCMC for which payments have not theretofore been made hereunder and costs of shut-down and demobilization. SCMC's only remedies for an SLI Event of Default shall be those that are expressly set forth in this Agreement 9.9 Condemnation. If any part of the Property is condemned or otherwise taken under the power of eminent domain or conveyed in lieu of condemnation, SLI shall receive a portion of the award that may be paid in connection with any condemnation or taking of the fee interest in the Property and SCMC shall also receive a portion of the award representing the value of the unexpired term of this Agreement, if any. In addition, if any part of the Property is condemned or otherwise taken under the power of eminent domain or conveyed in lieu of condemnation, and the condemnation or taking materially and adversely affects SCMC's occupancy of the Property, SCMC shall have the right to terminate this Agreement. 10. GENERAL PROVISIONS. 10.1 Successors and Assigns. The terms, provisions and conditions of this Agreement as set forth herein shall be binding upon and shall inure to the benefit of the parties and their respective heirs, personal representatives, successors and assigns. 10.2 Counterpart or Duplicate Copies. This Agreement may be signed in counteipart or duplicate copies and any signed counterpart or duplicate copy shall be equivalent to a signed original for all purposes. 10.3 Execution of Additional Instruments. Each of the parties shall here after execute all documents and do all acts necessary, or reasonable in the opinion of any other party, to effect the provisions of this Agreement. 10.4 Entire Agreement. This Agreement contains the entire understanding and agreement between the parties and supersedes any prior understandings and agreements between them respecting the within subject matter. 10.5 Amendments. This Agreement may be altered or amended in whole or in part at any time by writing signed by all the parties. 10.6 Waivers. A waiver by any party of any breach of any of the provisions of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach by the breaching party either of the same or of another provision of this Agreement. 10.7 Governing Law. The laws of the State of California shall govern this Agreement. 10.8 Severability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be found to be invalid, 15 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00021 void or unenforceable, the remaining provisions and any application thereof shall, nevertheless, continue in fall force and effect without being impaired or invalidated in any way. 10.9 Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice at the following addresses as evidenced by the execution of the return receipt, or (ii) Three (3) business days after the date of posting by the United States Post Office: To SLI Sycamore Landfill, Inc. 8514 Mast Blvd. Santee, CA 92071 Attn.: Neil Mohr With a copy to: Allied Waste Services, Inc. 8364 Clairemont Mesa Blvd. San Diego, CA92111 Attn.: Jim Ambrose To SCMC South Coast Materials Company Post Office Box 639069 San Diego, CA 92163 Attn.: President With a copy to: Hanson Building Materials America, Inc. 300 East John Carpenter Freeway, Suite 1645 Irving, Texas 75062 Attn.: General Counsel Notice of change of address shall be given by written notice in the manner detailed in this Section 10.9. 10.10 Attorneys' Fees. In the event that any party brings any action or files any proceeding in connection with the enforcement of its respective rights under this Agreement, or as a consequence of any breach by any party of its obligations hereunder, the prevailing party in such action or proceeding shall be entitled to have all of its attorneys' fees and out-of-pocket expenditures paid by the losing party. As used herein, the term "prevailing party" shall mean the party to a suit who successfully prosecutes an action or successfully defends against it. 10.11 Recitals, Captions and Headings. The recitals of this Agreement are incorporated as part of this Agreement. The subject headings of the sections contained herein are inserted as a matter of convenience and for reference, and in no way define, 16 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00022 limit, extend, or describe the scope of this Agreement, or any provision hereof. No provisions in this Agreement are to be interpreted for or against any particular party because that party or his legal representative drafted such provision. 10.12 Number and Gender. The use of the singular in this Agreement includes the plural and the use of one gender includes the others whenever the context thereof so requires. 10.13 Assignment. This Agreement may not be assigned by either party except with the consent of the other party, which shall not be unreasonably withheld; provided, however, that a party may assign this Agreement to an affiliated entity under common ownership with that party upon thirty (30) days' written notice to the other party, but without the need to first obtain the other party's prior written consent. 10.14 Signatory Authority. Any person signing on behalf of any party hereto, hereby warrants and represents that he has authority to sign on behalf of such party, and that such signature is intended to create a valid and binding agreement between the parties and that no condition precedent exists as to the validity of such signature. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00023 IN WITNESS WHEREOF, SCMC and SLI have caused this Agreement to be executed as of the date first above written. SOUTH COAST MATERIALS COMPANY SYCAMORE LANDFILL, INC. Name: Title: Date: /Z/S go C:\MyDocumentsUim\Work\Landfill dev agtdoc 17cv1906 Sierra Club v. EPA 18 ED_001523A_00000345-00024 EXHIBIT A DESCRIPTION OF PROPERTY AND PROPERTY 17cv1906 Sierra Club v. EPA 19 ED_001523A_00000345-00025 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00026 12/31/2002 18:50 FAX 8582787528 : 4 I PACIFIC WASTE ; : t ' jgXHlMXT & I . &eeral Sesdriptlon of Pzooegtv 0004 SYCMORE LANDFILL (MW#as 366-031-05, 356-031-13, 366-031-23,. 366-031-24,. 366-040-11 366-0^0 -17, 3 6 6 - 04 G 18 366-040-33,`366-040-35, 3^6-040-36 366070-14, -366-070-61, 366-080-5 Parcel 1| (73-0421): i f 8 | ' Those portions of Lots 3,. 4,; 9 and 10 of the Resu^division of Fanita Rancho, in the. City of San .Diego, County o( San Diego,.. State of {California, according to Map thereof No.|1703, filed in the Offide of the County Recorder of San Diego County, February'26, 1918, described: as follows: | ' -, . 1 ' Beginning at the intersect! of the center line <|f Road Easement N. 18 with, the center line f Road Easement No. |9 as shown on Sheet 1 Of. 3''o'f Miscellan Map No. 488., filed |n the Office of the County Recorder of San J lego County, May 3, 1^66, being the Northwesterly corner of 1 'described in Quitclaim Deed to Williams 4- Walsh, et ux, rei iorded August 1, 1966 & File/Page No. ' 124858,4 thence along the ce: ter 'line of said Road.|Easenient No. 18 South 00506'37" west, 416.9: i feet to an an_gle _point in the boundaryof said Walsh's lantb thence along said pupdary as . follows; South 6047'23" Hash 563.51 feet to the iSost Southerly comer of said land; North 3p19'09" East, 678.62|feet to the ` most Easterly corner of said, land, and North 282'p'31" We,st 568.72 fdet to. the center lihe of said Road Easem&t No. 19, being a point on the arc. of h. 500.00 foot radius <;:urve, concave Northv.-estjerly, a radial line; of said curve bears $outh Sl'iO'OS'1 East to said. point; thence ag.bng said center'line'fas follows: Southwesterly along the arc bf said -curve, through, a central angle of-I162O'41" a distance of 142.63 feet; tangent to said curve South 551100''3322" Wesstt, ^60.47 feet to the beginning-of a tangent 500.00 foot radius cirve, concave Northerly; and Southwesterly along the arc of said curve, through; a central angle of kollrO7'> a distance of 350.68 feet to tfe Point of Parcel 2 (73-0422): T__h_a_t__p_o__rt__i_o_n__o_f__L__ot__3 of the: Resubdivision of Fan^t_ea__R__a_n_c_h_o, in the City of San Diego, County of San Diego, Statejdsf-.C--a-l1i1fo__r_nia accord"ing' to M'ap. t'hereof' N"o.. 1703, filed in the Office of the County Recorder of San Diego County, February 28 1918, described as follows Commencing at the intersection of the center line bi Road ' Easement No. 18 with the center line of Road Ease^nt No. 19 as shown on Sheet 1 of 3 of Miscellaneous Map No. 48& filed in the S LAJ-rno^.vi A--1 026i 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00027 12/31/2002 18:50 FAX 8582787528 PACIFIC WASTE au us office of the County Recorder;of San Diego County, Bay 3 1966; thence airing the center line said Road Easement yo. 18, South - 00'06'37" West, 416.95 feet t the most Northerly darner of land described in Quitclaim Deedtib Thomas Hunter McManu|., Sr., -et ux, recorded 4uly 5, 1966 as Fileypage No. 109648 and ming the True Point of beginning; thence continuing along said center line South 00d6'37" West, 732.05 Seet (deed - 732.04 f(#t) to the beginningjdf a tangent 1000.00 foot radius curve, |>ncave Northwesterly; and. Southeasterly along "the arc of' ghid curve, through a central angle of 02'44'56" a distance of &7.9B feet to Southwesterly corner of said. McManus' - land, thence jilong the boundary of said, land as follpws:. South 7652'17" East, 528.31 feet to the Southeasterly corner of said land; Nordh 01'49'5'8" West, 625J32 feet to an angle point therein,- and Ncjrth 60'47'23" West, 563(51 feet to the True Point of Beginning, p . Parcel 3 (73-0420): ! ' j Those portions of Lots 3, 4, p and 10 of the Resubdkvision of Fanita .Rancho, _in the City off rS_a.n. Diego, C7_o_u_nty ofjSan Diego, State -of California, according. to -M--a--p thereof No. ^7_0_3, filed in the Office of the- County Recorder of San Diego County, February 8, 1918, -described, as follows: if Beginning!at the intersecbiori of 'the- center line ofi Road Easement No-. 1 with the Easterly prolongation of the centerfcine of Road Easement 19 as shown-on sheet 1 of 3 of Miscellaneous. Map No. 488, filed- in the Off ice'of tshe County Recorder ofJSan Diego County, Why 3, 1966, being alfso the Northeasterly corner of land described! as Parcel 184, in Quitclaim Deed to Donaajd'E. Goodell, et mt, recorded March 29, 1967 as-Pile/Page No. 42S60; thence along said prolongation and said center line of Road Easement Parcel 19; as follows:' North l8819'42' West, 100.9| .feet (deed - . 100.91 fest) to the beginning- of a tangent 300.00 soot radius curve, concave Southeasterly? Southwesterly along She arc of said curve, through a central angle of 70'21'57", a distance of 368.43 feet"tangent to said curve, 'South 2118'21" .West,ij709..62 feet to . the beginning of a tangent 500.00 'foot radius curv%, concave Northwesterly; and Southwesterly along the arc of Said curve, through a! central angle of 173i'3O'', a distance eg 152.94 feet . ' to the most Westerly corner 0f said Parcel 184 of poodell's land; _ thence along the boundary df said Parcel 184 as follows: South 28'127'31". East, 568.72'feet to the Southwesterly corner of said land; thence South 39'1^'09" West, 678.62 fee,- thence South . 44'28'28^ West, 385.39 feet; (thence South 80'00'2 East, 391.23 feet; thence. South 04'00'57" West, 263.36 feet to he intersection of. the center line of Easemerit No. Ijwith the Southwesterly prolongation of the center line of Easement No 13 as shown on. Sheet 1 of 3 of Miscellaneous Map No. >665, filed in the Offide of the County Recorder of San Diego Couhty, February15, 1965, being alsp the most Southerly dinner of land, described in Quitclaim Deed ho Donald E. Goodell,'&t ux/ recorded UA-7770SS.VI 17cv1906 Sierra Club v. EPA ED 001S9^A nnnnn^/ic nnnoo 12/31/2002 13:51 FAI 8582787528 PACIFIC waste Septembe^ 13, 1965 as File/Piige No. 165829; thencj along said prolongation and said center! line North 48'59'34"jEasc, 479.20 feet to 4 angle point in the boundary of said Goodell's land ' last above referred to; thence along said boundarfj-as follows: North 00^27'12" East, 666.50} feet to a corner therein; Noreh 3911'37'`` West, 39.83 feet cd a comer therein; N^rth 00'00'22". East, 1380.00 feet to an angle point therein; andhlorch. 7406'28" West, 131.04 feet to the center line of said Eas " X.N" o. 1; thence along said center link N" orth' 11'40''18" Eastfc 218.66 feet to'the Point of Beginning, i Parcel 4 '(73-0414): j ' i S i'l4 That portion of Lot 9 of the[ Resubdivision of Faniya Rancho, in the City of San Diego, County of San Diego, State/of California, according to Map thereof No. 11703, .filed in the Office of.the' County Recorder of San Diego; County, February 28, .'>1918, .described as follows: ; ' | i Si Beginning at the Southeasterly terminus of the center line of Easement No. "ID as shown on Sheet: 1 of 3 of Miscellaneous lap No. 465, filed in the Office of phe County Recorder ol| San Diego . County, February 15, 1965, being also a point on he ' Northwesterly line of land described as Parcel B-ik-Si in Quitclaim Deed to Andrew Matea, et al, recorded Dejcember 14, 1964 as File/Eage No. 226678; thence along the boundary-; of said land, of Mattttoo,,is et al, as followwss: South 40'53'52" West;, 1033.16 feet (record 4-i South 40'53'30" We^t, 1033.31 feet) to tgie most . Westerly'comer of said-land< Spilth 46'08'03" East|, 722.60 feet (record -i South 46'08'25 Ea^t,- 722.70 feet) to tjjs most Southerly comer of said land; North 50'09'37" Ea^fc' (record - North 50[09'15" East), 925.37 feet to the most Easterly comer of said laud; North 56'54'32" W^st (record - North SiiPSi'SO" West), 252.51 feet -to an angle point therein;' North 13'3#54" West (record 4 North 13'40'16" West), 761.53 feet to tlj^ most Northerly- comer of said land; and South 40'53'52'1 West (record - South 40';S3'30" West), 250.0$ feet to the Point Beginning. Parcel 5 !(73-0415): i i ' } I Those partions o Lots 9 and;; 10 of the Resubdivis^pn of a part of Fanita Rancho, in 'the City of San Diego, County oil San Diego, State of 'California, according to Map thereof No. S.703, filed in the Office of the County Recorder of San. Diego Coimty, February 28, 1918, and that portion of Lot 73 of Sancho Mission .. of San. Diego, in the City of'.San Diego, County of Diego, State of California, according to Partition Map thereof made in the action entitled "Juan M.'Luco, et al, vs. The Commercial Bank of San Diiego, et al" under Superior Court Case No'l 348 of San Diego County, filed in said Recorder's office, described as follows : i | ' li ' UMWSWl j A-3 osr.ti'n 17cv1906 Sierra Club v. EPA ED 001523A 00000345-00029 12/31/2002 18:52 FAX 8582787528 PACIFIC WASTE Commencing at the intersection of the center line -E Spring: Canyon Ro^d as shown on City Engineer's Drawing Ndg}--1__1_0_2_9---lrD filed in phe office of the City Engineer of the Cii^y of San Diego, County of San Diego, 4Cats California, within the . center line of Road Easement No. 19 as shown on CiKy Engineer's Drawing NO. 12253-1-D filed in the office of said i|ity Engineer; thence along said center l'in4 South 64'30'44" East}: 133.06 feet to the beginning of a tangent 6M.00 foot radius curvi, concave. Southwesterly; thence Southeasterly along the arc jbf-said curve ' being along said center line, through a central a^le of 33'01'5S"fa distance of 345.21 feet; thence :leaving said center line North. 23 18'IS" East 871.07 feet to the: True foint of - - Beginning}; thence North-14'3^'59" East 716.39 feetj thence radially South 76'33'07' East 788.68 feet to an.iiiersecticn with the center line of Road Easeriient No. 18 as shown <# said City Engineer's Drawing o. 122531-D, said intersecticp being a point on the arc of a 1200.00 foot radius curveconcavdjWesterly; ' . thence- Southwesterly along tike arc of said curve, Seing along ' said center line through a central angle of 3'5S'3p'" a distance - of -82.14 feet;'thence tangent and.along said centoe line South 17'22?12"! West"702.89 feet ti a point which bears South 71'27*13" East from! the True Point of beginning, thence North 71'27*13" West 754.55 feet to the True Point of Beginning. Parcel 6:j (73-0407): `. | That portion of Dot 73 of Rancho Mission of San D1|kjo, in the City of Shn Diego, County of San Diego, State of California, according! to Partition Map thereof made in the actflon entitled "Juan M. Luco, et al, vs. Th^ Commercial Bank of Diego, et al" under; Superior Court Case No. 348 on file in tsie office of ' the Count^ Clerk of San Dieg County,, described follows: - Commencing at the intersection of the center line ;|sf Road Easement pb. 1 with the Southeasterly continuation} o the center line of Road Easement No. 12 as shown on Sheet 1^3 of- Miscellaneous 408, filed in the Office of |ihe County - -Recorder pf San Diego County. May 3, 1966, being appoint on th arc of a faoo.ao foot radius hurve, concave Northeasterly,.a radial lipe of said curve bears South 38'24'16" Watt, to said point; thence along the continuation of and the cahter line: of said Road! Easement No. 12 as follows; Northwesterly along the arc of sajid 'curve, through a central angle of 51'S^'06" a distance of 720.50 feet; and tangent to said curv} North 00'00'22"! East, '268.68 feet to the most Southerly teomer of land described as Parcel 165 in deed to Frederick O. Hdfcne, et ux, recorded June 24, 1969 as File/Page No. 112744 anqj being the True Point of Beginning; thence along the boundary of ^hid Parcel 165 of Horne'js land as follows: (North 67'04'14" West4 1296.85 feet; North 41'i23'02" East, 816.82ifeet to the Northerly line of said Dot .73; allong said Northerly line South 89'08'54" feas.t, 624.56 feet to dhe Northerly prolonjation of the Westerly; line of said Road Easement No. 12; along.Said prolongation Soutti 00'00'22" LAMTM. VI K-4 fl ' 08 17cv1906 Sierra Club v. EPA ED CinmogA nnnnno/c 12/31/2002 18:52 FAX 8582787528 PACIFIC WASTE west,. lO^i., 13 'feet to the Northwesterly- corner ofisaid Road Easement-No. 12; along the Northerly line of saidipoad Easement No. 12 South ve-OO'aS' East, 30.67 feet to the ceifter line of said Road Easement No-. 12 and. along .said center line South 00-00'22'i West, 71.32 feet to the True Point of Beginning. Excepting therefrom that portion thereof described ,4s follows: i - 4 Commencing at the intersection of the center linei'pf Road EasementNo. 1 with the- Southeasterly continuation of the center line of Road Easement No. 14 as shown an Sheet 1 f 3 cf Miscellaneous Map No. 488, tiled in the Office of the County Recorderiof San Diego County, May 3, 1966, being point on the arc of a 800.00 fo.ot radius curve, concave Northeasterly, a radial line of said, curve'b^ars South 38-24'16" w|st, to said point; thence along the continuation of and the center line of " said Road Easement No. 12 as[ follows:- Northwesterly along the arc o'f'siic' i" .c, ur"va,', _throucgehnatral-angle of Sl'iS'CS" a distanceiof 720.50 feet; and. tangent to said eurvf North . 00-00'224 East, 268.68 feet to the most Southerlyfeorner of land. described as Parcel 165 in s^feed to Frederick 0. Mrae, et'ux,' ' recorded June 24, 1969 as Fisle/Page No. 112744; tlfence along the .boundaryiof said Parcel 165 of Horne's land NorthS6704' 14" West, 617.53 f^et to the True -Point of Beginning; -thence continuing along said boundary of ParceEL ,165 of Horne's landHas follows: North 67404'14" West, 679.321. feet North 41-23'02'feasc, 816.82 feet to the Northerly line df said Lot 73; thenceifeouth 89'08'54'' East, along said Northerly line 292.37 feet; thentie leaving said Northerly line South 1319'0f4" West, 897.30 feet f|o the True . Point of: Beginning. Parcel 7{ (73-0409-Al): [ I That portion of Lot 7'3 of Rancho Mission of San Daego, in the City, of San Diego, County o4 San Diego, State, of aliforaia, according to Partition Map hereof made in the action entitled "Juan M.'jLuco/' et al,' vs, Tqe Commercial Bank of.flan Diego,"et al" under Superior Court Cade No. 348 on file in |he office of the County of Clerk of San Diego County, describe^ as follows: Contmenciig at the intersection of the center line^of Road Easement'No. 1 with the Southeasterly continuation of the center line of Road Easement No. 12 as shown on Sheet 1 & 3 of Miscellaneous Map No. 488, filled in the Office of {. the Count.y Recorder of San .Diego County', May 3, 1966, being point on the arc of a 800.00 foot radius icurv.e, concave Northeasterly,.. a ' ' radial line of said curve bears' South 3824-'16" Wast, to said point; thence along the continuation of and the evincer line of . said Road Easement No. 12 Northwesterly alongchetare of, said curve, through a central angle of 30-39'00" a distance of 427.96 feet to the most Easterly cqrner of land describe# as Parcel 166 in'deed, to Fernando L. Sola,) et al, recorded JuneS24, 1969 as File/Pag No. 112743 in said Recorder's office ani being the True' LA7n<VI A--5 s S 17cv1906 Sierra Club v. EPA ED 001523A ooonn5U.S-nnngi 12/31/2002 18:53 FAI 3582787528 PACIFIC BASTE #008 Point Of jBeginning; thence along the boundary of laid Parcel 166 as follows: along the center line of said Road Easement No. 12, continuing Northwesterly ansi Northerly along the arc. of said curve, through a central angle of 20057'06" a dis&nce of 292.54 feet; thence tangent to said curve North 00'00'228 East, 268.68 " feet to the Northeasterly earner of said Parcel 1; thence North 67'04'14? West, 765.91 feet; thence South 0-4'll*2f" East, 906.27 feet to the Northerly line cf that parcel of landpescribed i^ deed' to the County of San Diego recorded February!8, 1974 as File/Page No. -74-033 846 in said Recorder's office^ thence along said Northerly line North -85"48'34" East, 693.86 jeet to the True. Point ofI Beginning. j i ' ' . Parcel 8- (73-0416): f ' . Those portions of Lot 73 of Rancho Mission of SanjiDiego, according to Partition Map therepf made-in the 'action entitled "Juan M, ihucp, et al, vs. Tie Commercial Bank of ^an. Diego, et al" under Superior Court Case No. 348 on file in (she office of ' the County Clerk of-San Diet o' County, and portion!, of Lots 9 and 10 Resubiiivision of Fanita Iancho, according toMgp thereof No. 1703, filed in the office of. the County Recorder M San Diego County, February 28, 1918, all being in the City Sf San Diego', - County of San Diego, State <jf California, described as a whole as follows:; j jl . Commencing at the intersection of the center linejof Road . Easement; No. 1 with the Southeasterly continuation of the center line of Road Easement No. li as shown on Sheet 1 Bf 3 of Miscellaneous Map No. 488, jailed in the Office ofwthe County Recorder; of San Diego County, May 3, 1966, being point on the arc of aj 800.00 foot radius curve, concave Southeasterly, in the center liine of said Road Easement No. 1, a radiarfline of said 1 curve bears North 56'35'10" West to said point; thence along the . c.enter liine of said Road Easement No. 1 as follow-; Southwesterly along trie arc of said curve through a central arttie of 2144'32" a distance of 303.58 feet; and tangent to said cuyveSouth - - 11'40*1^" West, 459,87 feet to the Northeasterly mer of land described in Quitclaim Deed to Robert Newton Hunter,. Jr.,........ recorded August 25, 19-66 as File/Page No. 139126 find being- the True Point of Beginning; thence continuing along said center line 'South 111'40'18" West, ,1020.'?0 feet (deed - 1020.feet)- to the Easterly prolongation of Chk center' line, of Road Easement No. 19 as shown on said.'Miscellaneous'Map No. 480 theneqp along said prolongation and said centep line of Road Easement No. 19 as follows? North 8819'42" W=$t, 100.93 feet (deedg- 100.91'feet) ' to the beginning of a tangeit 300.00 foot radius Jpirve, concave Southeasterly; and Southwesterly along the arc offlsaid curve, through a central angle of J5'27'02" a distance df 185.62 feet to. the mosti Southerly comer of said Hunter's land; thence along the boundary of said Hunter's land as follows-: Nortl 19'06'29" West, 292.82 feet; and North 72'18'44" West, 655.87 fe* to the center line of-Road Easement No. 18 as shown on said Miscellaneous Map - LA3-7OW.V! A-6 mmi'n 17cv1906 Sierra Club v. EPA ED 001523A 00000345-00032 12/31/2002 18:54 FAS' 8582707528 PACIFIC WASTE 010 I No. 488; thence along said center line as follows,-jNorth . 17'22'12"jEast, 702.89 feet do the beginning of a Rangent 1200.00 foot radios curve, concave Southwesterly; and Northerly along the arc of said curve, through a {central angle 04'39'2^" a distance ' of 97.54 feet to the Northwesterly corner of said winter's land; thence al<png the Northerly line of said Hunter's Ijnd'South . 78'36'44"! Ease, 987.60 feet 0 the True Point of Beginning. Parcel 9 ;i 73-0417) : i ! 3< Those portions of Lots 9- and 10 of the Resubdivisim of Far.ita. Rancho, in the City of San Diego, County of San Di&go, State' of California, according to Mapitheroof No. 1703, fil'd in the ' Office of- the County Recorded of-San Di.ego CountyJ February 20., 1918, described as follows: g Commencing at the intersection of the- center line Road Easement Mo. 1 with the .Easterly prolongation of tgie center line of RoadEasement No. 19 as shown on Sheet 1 of 3 <^t Miscellaneous Map No. 498, filed in the Ofrice of the County Recorded of San Diego County,'May 3, 1966; thence along said prcldigation and " said, centier line of Road Easement No.' 19 as follows: North 8819'42"> West, 100.S3 feet deed - 100.91 feet) dp the beginning of a tangent 300.00 foot radius curve,'concave Southeasterly; and Southwesterly along the arc bf said curve, througha central ' ' angle of- -3527'02" a distane of 185.62`feet to ti most'Easterly comer of-land described in Quitclaim to Harry Webner, recorded September 13,'1966 as File/Pkge No. 148437 and being the True Point of 'Beginning; thence along the boundary of shid Weimer's . land as follows: North 19OS'29" West, 292.82 fe&; and North 72'14'44'! West, 655.87 feet to the center line of-Jioad Easement No. IB shown on said Miscellaneous Map No. 488jl thence along said center line South 17'22!'12" West, 419.11. fee| to the Southwesterly corner of said Weimer's land; thence along the Southwesterly line of said wjeimer's.land South 56g07'22" East, 780,39' feet to, the center lijne of said Road Easement No. 19; thence along said'center 'lisp as follows: North ^1'18' 21" East,- . 233.95 feet to-the beginning of a tangent 300.00 |oot radius curve, cncave Southeasterly?; and Northeasterly a^ong .the arc of . said curve, through a centrail angle of 34'54'55" distance of 182.81 fet to the True Point of Beginning. % : f Those portions of Lots 9 anq 10 of the. Re'subdivisjon of Fanita Rancho, in the City of San Diego, County of San. Di|ego,' State of California, according to Mat?-thereof'No. 1703, fitted in the Office of the County Recorder of San Diego County-- February 28, 1918, described as follows:1 | r i 8 Commencing at the intersection' of the center lin^Lof Road Easement? No. 1 with the Easterly prolongation of ijthe center line -of Road Easement No. 19 as ^hown on Sheet 1 of 3 | Miscellaneous LAMWOW.Vl -7 mu*-- 17cv1906 Sierra Club v. EPA ED OnmQgA nnnnno/c nomo --__ .12731/2002 18: Si FAZ 8582787528 PACIFIC WAS! i I j . j Map No. 488, filed in the Office of the County Recorder of San Diego County, May 3, 1966; thence along said prolongation and said center line of Road Easement No. 19 as follow: ' North 8819'42"iWest, 100,93 feet deed - 100.91 feat! t-the beginning of a tangfent 300.00' foot radius curve, concave Southeasterly; ' Southwesterly along the arc c|f said curve, throughM'a central angle of $0'21'57" a distance of 368.43 feet; and plangent to said curve South. 21'18*21" West, 233.95 feet-to the most Easterly corner of , land described in cuitclaim Deed' to Davip B. Devine., et al, recorded July 1, 1966 as File/Page. No. 108768 ^.nd being the True Point of Beginning; thence continuing along a>id center line ` as follows: South 21'18'21"West, 475.67 feet to Jfhe beginning of a tangent 500.00 foot radius curve, concave Nohifchwesterly; Southwesterly along the arc f said curve, through': a central angle of 33'52'11" a distance: of 295.57 feet; tangent to said ' curve 55'10'32'' .West, 260.47jfeet to the beginnings ;of a tangent' 500.-00 fobt radius curve, concave Northerly; and Southwesterly along the? arc of said curve; j through a central an^e- of .40"11'07" a distance of 350.68 feet tojthe canter line of R^ad Easement No. 18 as shoMn on-said Miscellaneous Map No. 488; thei.ee along the center line of said Road Easement'No. IB as foiled = North ' 00'06'37"; East, 391.28 feet bo the beginning of ajtangent 100,0.00. foot radius curve, concave Easterly; Northerly al trig the arc of said curve, through a central angli of 17'15''34" [j distance of 301.25 feet; and tangent to paid curve North East, 606.46 feet to the most Northerly- comer of said land of Devine, et al; thence along the Northeasterly line of sai^ land South 5607'22'. East, 780.39 feet to the True Point of beginning. Parcel li .(73-0410) : | f ' i 1 - Those portions. of Lot 73 of Rancho Mission of SaniDiego, according to Partition Map thereof made in the action entitled "Juan M.;Luco, et al, vs. This, Commercial Bank of San Diego, et al" under Superior Court Casie No. 348 on. file in |he office of the County Clerk of San Diego County, and Lot 9 o^ the , - Resubdivision of Fanita Rancjho, in the City of Safe Diego, County' of San Diego, State of California, according'to MAp thereof No. 1703, filed in the Office ofi the County Recorder i San Diego County, February 28, 1918, 411 being in the City San Diego, County of San Diego, State of California, and beiiag more .' particularly described as follows: . | ' i 4? Beginning at the Northerly tlerminus of the cente^l line of Easement; No. 12 as shown on(Sheet 1 of-3 of Miscellaneous Wap No, 465, filed in the Office of(the County Recorder dp San Die;go County, February 15, 1965, being also the Northwesterly corner of land described in QuitclaimDeed to Fred Eklund, fet al, recorded September 27, 1965 as File/page No. 175424; thendg along the center line of said Easement No. 12 and the Southeasterly . continuation thereof as follows: 'South 00'00'22^'West 340.00 " feet to ;the beginning of a tangent BOO.00 foot r^fiius curve, . concave [Northeasterly; and Southeasterly along t^ arc of said > ' 1 5 ' . I . ^8 . t . ' LA3-797067.V1 i ` I A" 8 J i . . i . 9? 3US 17cv1906 Sierra Club v. EPA ED 001523A nnnnngzLb-nnno/i 12/31/2002 18:55 FAX 8582787528 PACIFIC WASTE 1^012 curve, tho! rough a central ang(le of 51'36'06" a dist*ance of 720.50 feet to the center line of Easement No. 1 as show| on said Miscellaneous Map No. 465; being a point on the ayjc of a 800.00 foot radius curve, concave Southeasterly, a radiadg'line of said curve beairs North 56'35'10" ^est to said point; tgbnce along.the center line .of said EasementNo. 1 as follows: ' N&theasterly along the arc of said curve, through a central ane of 08'13*05' a distance of- 114.75 feet; non-tangent to said cu|ive North 42'31'20" East, 528.78 feet, being a point on the/arc of a ' non-tangent 800.00 feet radios curve, concave Sou^ieasterly, a radial line of'said curve be^rs North 48'22'05" W&t to said point; and Northeasterly along the arc of said cuye, through a central single o*f 47'25*09" 'a! distance of 662.09 ft&t; thence at right angles to said center line North 00'56'56" fcst, 30.00 feet to a confer in the boundary fsf said land of Eklund, et al; thence along said boundary' as follows: South 89'03'04" ^est, 398.41 feet to an angle point therein; and North 78'00'3^" West, 936.49 feet- to tjhe Point of Beginning............ | . - - Parcel (73,-0413) : That porqion of, Lot 9 of the-Resubdivision of Fanita Rancho, in the City jof' San Diego, Count./ of. San Diego, Statefaf California, according to Map thereof No. 1703,'filed in the Office of the County Recorder of San Diego County, February 28,1(1918, described as follows: 1 | ` . ! t ' Beginning at the intersection of the center line |jf Road. Easement No. 10 with the center line bf Road Easement No. S. as shown on' Sheet 1 df 3 of Miscellaneous Map. No. 465, filed .fa the Office of the Countiy Recorder of San Diiego County, State of|Calfornia, February 115, 1963; being on the arc 'of a 100.00 f^ot radius curve, concave Northeasterly, a radial line of' sajd. curve bears South. 7423'41" West to said point; thence along She continuation ` of and the' center line of said Easement No. 10, Southeasterly along tM ate of said, curve, through a central angle of 23'56'42" a distance of 417.92 "feet to, an angle point in th| boundary-of *.Parcel B-ii5i of Newport's la^id; thence along the boundary of said Parcel B-151 as follows; North 40'53'52' East, 2S0.00 feet;. .. . South 13*39'54" .East, 761.58 feet; South 56'54'32| East, 252.51 feet to an angle point therein; thence North 18o|'O5" West, 1124.78 feet to a point on'the center line of Roag Easement No. 1; thence along said center (line South 89'03'04" ifest, 100.00 feet; thence North 03"22'21| East, 30.08 feet to |he Northerly line of Said Easement No. l;j thence along, the Northerly boundary of said .Easement 1 as follows: South 89'03*04" WBst, 201.68 feet to the Northwesterly corner bf said. Parcel B-151 of Newport's land; thdnce South 00'56'56"{ East, 30.00 feet to ghe center line of said Basement No. 1, being a point on the arc Bf a 800.00 foot , radius ct^rve, concave Southeasterly, a radial lin^ of said curve , bears Noith 00'56'56" West to said point; thence long said ' center line Westerly along the arc of said curve,|through a . . OSi36m 17cv1906 Sierra Club v. EPA ED OOmpgA nnnnm/c nnnor 12/31/2002 18:56 FAI 8532787528 PACIFIC ASTE I @013 -cenerai angle of 0709*43" 4 distance of ioo.oo f^t to the. Point , of Beginriihg,. ' ! .i # ' Parcel 13'(73-0423) : " J . Those portions of Lots 3 and[ 4 of the Resubdivisiqp of Fanita Rancho, iin the City of San Dp.ego, County of San D.|pgo, State of California, according to Map: thereof No. 1703, fiJjbd in-the Office of the. County Recorder of San. Diego CountyM February 28, 1918, described as follows: I '" Commencini g at the intersec'tion of the center line& 8 f Road . ' Easement No.' IB with the center, line of Road. Easerfent No. 19 'as shown on Sheet 1 of 3 of Miscellaneous Map No. 48, filed in the office of the County Recorddr of San Diego County| May 3[ .1966; thence along the center line of said Road Easement? No. 16, South00.06.'371 West 1149.00 feet to the Southwesterly ||omer of land described in Quitclaim. Deed to Thomas-Hunter McManus, Sr., et ux, recorded, iJuly 5, 1966 as Filje/Page No. 10964S; thice along the ` Southerly line of said McMartas' land South 7652'f?" East, 528.31 feet to the Southwesterly corner of land describe in Quitclaim Deed to Vernon. Lucius Robinson, et ux, recorded JLy 28, 1966 as File/Page No. 123058 and being the True Point of Beginning; thence along the boundary ofi said Robinson's land^as follows: North 01449'58" West 625.32 feet to the most Northerly corner of said lan4; South 44"28'28".last, 385.39 feet to aS angle point ' therein;South 8000'26" East, 391.23 feet to thegeenter line of . Road Easement No. 1 as shows on Miscellaneous Map|No. 48B; along said center line South 040C'57" West, 263 feet; jnd South 00'26'59? West, 49.44 feet co -the Southeasterly corner of said Robinsonis land; thence along the Southerly line gf said Robinsonis land North 8712'j37" West, 617.20 feetMto the True Point of;Beginning. j I i Parcel 14 (.73-0411) : ' h ' I M ' ..... I Those portions of Lot 73 of [Rancho Mission of San|Diego, . ' according to Partition Map tfhereof made in the action entitled ' "Juan M. [Luco, et al, vs. T^ie Commercial Bank of san Diego, et . al" under- Superior Court Case No. 348 on file in |he office of the County Clerk of. San Diego County, and Lots 9 ind 10 of the . Resubdivision of Fanita Rantsho, in the City of . Sad. Diego, County of San Diego, State of California, according to Fap thereof No. .1703, filed in the Office of the County Recorder San. Diego County, February 28, 1918, 11 being in the City Bf- San Diego, County of San Diego, State of California, and described as a ' whole asi follows: . ! .8 . j . S Beginning at the. intersection of the center line Road Easement No. 1 with the Southeasterly continuation of the enter line of Road Easement No. 12 as sho? on Sheet 1 of 3 of 5p.scellat.eous . Map No. aBB, filed in the Office of the County Reorder of San Diego Colinty, May 3, 1966, being a point on the ai^c- of a' 800.00 LAJ.W0W.Vl -10 osaf' i 17cv1906 Sierra Club v. EPA ED 001523A Onnnn^zm.nnn-? 12/31/2002 18:58 FAI 8582787528 PACIFIC WASTE Bom foot radius curve; concave southeasterly, in the Senter' line of said Road Easement No. 1, a radial line of said cfirve bears-North "56=35'10?' West to said poinq; th` ence along the ce`lter line of said Road Easement No. 1 as f-o--l--l-o--w---s-:-. Southwesterly along the arc of said turve, through a. cenittral angle of 2144'3S" a distance of 303.58 feet; and tangent to {said curve South ll'-4i'18" West 459.87 feet to the Southeasterly comer of land described. in Quitclai^ Deed to Conrad B. [Walburger, et ux, recorded July 22, 1966 as file/Page No. 1199631,- thence, along the Southerly line of said Walburger's land North(78=36'44" West, 987.69 feet to the -center line of Road'Easement No. IB as shown on Miscellaneous Map .No, 488,! being a point on the arc of a 1200.00 foSt radius curve, concave Southwesterly, a radial line of,said curvl 1b--e--a--r-s South 77=17'14!' East to said poin ; thence along the ter line of said Road Easement No. 18 orthwesterly along arc of said curve, through'a central le of 39=14'19" a dis ce of 821.81 feet to the most Westerly er-of said Walbiirg 's land; thence along thh Northerly line-of said Walburger's North 85 "48-'34"- East, 10U6.35 feet to the c ter line of said Easement No. 12, being a point on the a-rd of a 800.00 foot radius curve, concave Northeasterly, a radial line of said curvp- bears South 6903'i6j" west to said point; thence along said center line and .the continuation thereof Southeasterly along the Bra of said curve; tprough a central an^rle of >30'39'00" a dislil_a_n_ce--3o. f'..2472.7;.96 feet to the Point of Beginning. ' ' i ' ! . Parcel 15 (73-0408) : Those portions of Lot 73 ofRancho Mission of S axil Diego, in the City of San Diego, County of San Diego, State of-California, . according to Partition Map thereof made in the adtion.entitled "Juan-M.! Luco, et al, vs. The Commercial Bank of an Diego, et al" under Superior Court Case No. 348 on file in the office of the County Clerk of San Diego County, and of 'Lot . of the Resubdivision of Fanita Rancho, in the City of S Diego, County of San Diego,, State of California, according to M^p thereof No. 1703, filed in the Office of th County Recorder wf San Diego ' - County, February.28, 1918, all being in the City Sf San Diego, County df San Diego, .State f California,, and described as a whole a^ follows: ' | 0 Beginning at the Northerly ;erminus of the Weste^y line- of Easement No. 12 as shown on Sheet 1 of 3 of Miscellaneous Map No. 465, filed in the Office of the County Recorder San Diego County, Fceeobxruartyy xISa, 1965; thence South 78 = 00'38.East, 30-67 feet to the Northerly terminus of the center lindjiof said Easement^ No. 12, being the Northwesterly corner land described in Quitclaim Deed to Fred Eclund, et al, recorder. September 27, 1965 as'File/Page No. 17342* thence alo--n--g---t--h--e----N---&---t-h--e--r-l--y---b--o--u--ndary- of said iland of Eklund, et al, as follows: Sout-ft 7800''3i!" East, 936.49 feet to an angle pod: pt -therein, and North903'04" East, 398.41-feet to a corner in the boundary of land described as Parcel B-151 in Quitclaim D)aed to James R. Newport, et ux, lAJ-IWOffl.Vt A-ll 17cv1906 Sierra Club v. EPA ED 001523A 0000034S-nnn37 12/31/2002 IS:S7 FAX 8582787528 PACIFIC WASTE B05 : ;i- - I? recorded`August 23, 1965 as jFile/Page No, 153093;ffchnce along the Northerly line of- said lnd North 89'03'04" E^c, 201.G8 feet to an angjle point in the Westerly boundary of land/described in Quitclaini Deed, to Jeffrian Corporation, et al, re&rded August 3.9, 1965-ias File/Page No. 135461; thence along said Northerly boundary jas follows: North 03'22'21" East, 25.73 Jfeet to an angle point therein; and North 03'27*27" East, 77/1.48 feet to the Northerly boundary of said Rancho Mission; thence|hlong said- Northerly boundary North 89ob8'54 West, 1617.81 feet to the Northerly! prolongation of the Westerly line! of sa& Easement No. 12; thenqe along said prolongation South 00=00'22^ West, 1031.13 feet to the Point of Beginnihg. . | , Parcel 16.! (73-0418-Al): I i . | ' ; i ; 3; Those portions of Lots 3 and! 10 of the Resubdivisi^an of Fanita Rancho, - din the City of San Diego, County of; San Diogo, State of . California, according to Mapl thereof Mo. 1703, i<ed. in the - Office -of the County Recorded of San Diego .County j February 28,"' ` 1918, and" that portion of Lot- 73 of Rancho Missioi| of San Diego, . according to -Partition Map thereof made in -the action entitled "Juan M. (Luce, et al, vs. The Commercial Bank of Jan Diego, et al" under Superior Court Case- No. 348-on file in he office of the County'Clerk of San Diego County, described aS follows: ! ' | ' Commencing at the intersection of the center linejiof Spring , Canyon Rdad as shown on City Engineer's Drawing N. 11029-1-D filed in i the office of the fifty Engineer- of the C|fcy of San , Diego, County- of San Diego, .State of California, ijith the center line of Koad Easement No.' 19 as shown on City Engineer's Drawing No. 12253-1-D' filed in the oiffice of said City Engineer; thence along said center line South- 64'30'44" East' 183.oft feet to the beginning of a-tangent GOO.Opfcot radius curve, concave Southwesterly: thence Southeasterly along the* arcfjof said curve, being along said center line;, through a central asgle of 33701'55^ a distance of 345.SI feet to the True pfint of Beginning; thence leaving said center line. North fs'lS'lS" East, ' 871.07 fdet; thence South 71'27'13" East, 754.55 jeet to the center line of Road Easement; No. 18 as shown on'said City Engineer? s Drawing No. 12253i-l-D; thence along said center line South 17722'12" West, 1105.S7 feet to the b!eginni|g of a tangent 1000.00 oot radius curve-cpncave Easterly; thence Southerly along the arc of said curve,} being along said center line, through $ central angle of 1715'34" a distance o| 301.24 feet;- thence tangent c--o s__a_i_d c__u_r_ve-and along said center line South 0000'37? West, 391.29 feet,t--o----a-n- ---i-n--t-e--r--s--e--c--t.i.o...n.. wi'|h.the___c--enter line of said Road Easement No. 19,. said intersection being a point onithe arc of a 500.00 foot radius curve, concave Northerly whose ceiter bears North 05421'39" East,. tlhience Northwesterly along the arc of said curve,- bveinyg aculounuyg ucoeunLteerr lxixnuee,, m thuromug,h a center atgle of 69'21'14" a distance of 605.23 fe|t; thence tangent to said curve and along said center line forth 1517'07 s West, 686.17 feet to the beginning, of a tangent 6^0.00 foot J ' ! . Sas ` uiwm.vi A-12 OW2W ss p I ' 17cv1906 Sierra Club v. EPA ED 001523A 00000345-00038 12/31/2002 16:56 FM 8562787528 PACIFIC WASTE 0O1S . i : radius crve, concave Southwesterly; Chenca Norths westerly along the arc f said curve, being along center line, through a central angle of16'11'43" a distance of 1'69 .-60 fet to t|ie True Point of Beginning. . - ' Parcel 17 (73-0412): ! ' That portion of Lot 9 of thd Resubdivision.of a portion of Fanita Rancho, in the City of San Diego, County of San Dego, State of California,according to Map thereof No. 1703,' fiRed in the Office of the County Recorder of San Diego county! February 28, 1918, described as follows: A . Beginning at the intersection of the center line If-Road Easement . No. 1 with the center line f Road Easement No. 1$ as described in that certain Instrument recorded June 7, 1965 as File/Page No. 101350 wherein the City of Jan Diego was guitdlaified certain road . and sewer easements by the United States of America acting by and -'through, the Administrator- oh General Service's, .salt'd intersection ' being a point"on the arc of fan 800.00 foot.-radius [curve, concave , Southeasterly-in the center line of said Raad Easisnent No. la ' "radial line of said curve bars North 08'06'39" wiist to said point; thence along the center line of said Road pasement No. 1 as- foiio^s: Southwesterly along the arc of said Burve, through a central angle of 40'15'26" c. distance of 5^2.09 bet; non-tangent to said-curve South 4231'2C" West 528.78 feet toilthe beginning of'a tangent 800.00 foot radius curve, concave Southeasterly; ' Southwesterly along the arc of said curve, -through, a central angle of 129'57'38" a distancie of 418.33 feet and on-tangent to said curve South 1140'10" West, 1698.73'feet to'f|he Southwesterly corner of land described as Parcel d-154 in Quitclaim Deed to Joseph E. -Selma, et al, recorded July 30, 19 65 as File/Page No. 13721.4; thence along the boundary of said Parcel B-154 as'follcws: .South 74^06'28" East, 131:04 fSet to an angle point therein; and North 50'09'37" East, 1670.00 leer to the most . Southerly'corner of. land described as Parcel 8-111)31 in Quitclaim Deed to Andrew Matto, et all recorded December 14( 1964 as . File/Pag No. 226678; thenc along the boundary oi'said Parcel B-11-31 as follows: North .44'08'03" West, `722.69|feet (record - North 46f08'25" West, 711.7Q feet) to an angle pc^.nt therein; and North 40?53'52" East 1033.1^ feet (record : North^j4.0'53'3.0" East 1033.31 feet) to the Southeasterly terminus of thil center line of said Road Easement No. 10 being a point on:the arjb of a 1000.00 foot radius curve, concave Northeasterly, a radial line o'f said curve bears South 50'26'59" West to said point; menee along said center line, Northwesterly long the arc of said-urve, through a central angle of 23'56'42" i distance of 417.92 let to the Point of Beginning. . , Ji i ' K ' Parcel IB (63-5017): : ' > ' Those portions of Lots 4 and 9 of the Resubdivisian of a part of Fanita Riincho, in the City of San Diego, County eft' San Diego, ! ' ' ; - . . LAJ-7M0S5.VI : ' -13 ' i 02CTW 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00039 EXHIBITS RIGHT-OF-WAY MAP 17cv1906 Sierra Club v. EPA 20 ED_001523A_00000345-00040 17cv1906 Sierra Club v. EPA ED 001523A 00000345-00041 SITE PLAN EXHIBIT C FINE MATERIALS CONVEYANCE AREA 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00042 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00043 EXHIBIT D GRADING PLAN 17cv1906 Sierra Club v. EPA 22 ED_001523A_00000345-00044 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00045 EXHIBIT E FIXED ROYALTY SCHEDULE Year 1 Year 2 Period Beginning Jan-07 Jan-08 Period Ending Dec-07 Dec-08 Proposed Monthly Royalty $310,147 $325,654 Proposed Annual Royalty $3,721,764 $3,907,852 17cv1906 Sierra Club v. EPA 23 ED_001523A_00000345-00046 HRSLAMb\J2MkW f xH M 1 his I iiii Amendment to Lundiill Development Apteentcni (the "Ameiidinciif') is heichs eiiK-rvd into and effective as of December 5. 2016. by and between ! lanson Aggregates Pacitic Southwest, Inc,, a Delaware corporation fl kmson") and Sycamore Landfill. Inc., a California cmporatioii f SI I.' collectively, the "piirties 'i . .......... ... ' BhLllALS ' , A South Coast Mateiials Company, a California corporation, as predeecssm Io Hanson. and SI 1 entered into that certain Landfill Development Agreement dated as of December M. 2006 f Development Agreement." together with this Amendment, the Agreement" i. IL U hen the parties entered into the I ieselopmenl Agreement, they contemplated that Hanson's pas ment of the I iced Royalls in Scuion 7 2 o! the Development Agiecmenl would equally balance with SI I s payment oi the l.xtraction fee in Section 4 ofihc Development Agreement. In -and around Decembei 31. 2008. the parties determined that the 1 ixed Royalties and the I Airaction I ees were not equally balancing as contemplated, I iced Royalties paid by Hamon were substantially more than the Lxlmction fees paid by SI I. C. On or about December 31.200S. SI I contends that the parlies agreed to teHipounih suspend 1 lausou's obligation n> pas the I ixed Residues to SI I and agiecd that Ihc parties would reassess the fixed Royalty provision in the Development Agreement in the future Hanson contend' that currently SI I owes I lanson $2,453,477 fl xlraclioii I ees Receivables Balance"), which represents the diliereme between the total fixed Royalties paid by Hanson (SK'KilAdii) and the total I xtmction I ees paid by SI.I (S5.X27.442) under the Development Agreement, SI I disputes these contentions ... ...... D. Onor about November 2f 2014. Sid provided notice to Hanson that SI. 1 required I lanson to relocate its equipment to another location on the Pioperty, I lanson incuncd $3.41 <L6(>5.80 ofwsts to relocate its equipment f Relocation Costs"). Pursuant to Section (>. 1 ol the Development Agreement. SI I is obligated to pay Hanson $ I A1) 1 .t>44 04 (''SI 1 Relocation Obligation") which represents 7 I 5th'of the Relocation ( osw. 1 . On m about November 20. 2014. SI I determined that it needed Hanson to substantially increase its i ate of excavation ofthe Material from the Property SI 1 contends that il anticipated that, as of December 2<> 15. 1 lanson would have excavated a total of 16 tnilliwn cubic yards of Muteiids. and SI.I contends that I kimon has excavated slightly met LI million cubic yards of Materials as of December 2W5. I lanson disputes these contentions. I' SI 1 hired and paid it contractor. Rumen. in 2614 to excavate the Material from the Property fCmitracloi Lxcavation Lost"), SI I has been and will be providing such excavated Mateiial to Hanson, and Hanson will pay SI I the Pioductmn Royalty Rule for the saleable Aggregates contained in such excavated Material, <i, On or about March IX. 20lb, S| I requested that Hanson relocated certain utility 1 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00047 lines to mother location on lite Pioperty. I lanw m contends thul pursuant to Section 6.1 of the Development Agreement. SI.I will be obligated to pay Hanson S 1 Mhs of the total cost u> relocate the utility lines ("l li lily Relwtilion Cost", the total cost of which is estimated to he ahum $75(MIOO. II. SI 1 wishes to induce I lanson to accelerate its esca cation rate, and the parties wish to resolve their entrent disputes and to that end. Hanson and SI I desire to amend the Development Agreement on the terms set forth herein. . ' AGRIdiMliNl f ' Nt >% 11II RI H RI . for and in coiT'-idemtimi >1 the loicgomy Recitals, and the mutnul covenants conkiined herein, and for such other good and valuable consideration. the receipt, adequate and legal suflkienev ol which are herein expressly ack now lodged by each of I km^m and SI.I. and intending to be legally bound hereby. Hanson and SI.I hereby spedftealIt covenant and agicc as follow X Amen.Ua t, Jal1 lev efopinc ni A reement (a) Recital B of the Development Agreement shall be amended in its ciithcty to read; "I he parties estimate that there arc thirty four million two hundred thousand (cubic cards of matenal to be extracted from the Property (the Alatcrial"), (JI this Makthil. forty percent (-40"o> is estimated to be saleable aggregates (the "Aggregates") with the icmaindci being material that is not sakuhlc aggregates (the "l ine Materiul")." All releiv-iu.es to "fine material" in the I tevdopmeiit Agreement shall mean "line Mater ial." .. (b) Section 2 ol the Ik-vdopmctit Agreement shall he amended m its entiretv to read as follows; .. .... .. "I nksi era Her lennmated ;is plot ided herein, the term of this Agreement dial! begin on the eflcctive dale of this Agreement and terminate on December 31. 2033 ("Inititil leim" Nolwithsumdinp the Ibrcgomg. Hanson shall have five <5). one (11 year options io extend the I erm for the period of lime between January I 2034 and December 31. 2O3X. " k-rm" shall mean the Initial form anti any cxeicised option to extend the icrm. I o exeicbe each such option. Hanson must give SI I a minimum of one hundied and twenty 11 10) day w i itlen tintice betore the end ol each teim. . i ...... .. Subject lit an extension granted to Hanson pursuant to Section Da. I lanson agrees' til Io complete this mining pioject within Ilie initial I enn and in accordance with the excavation schedule ami Mining Plan attached hereto as l-xhibit 1 . and (ri) il 1 lanson exercises one or mote options to extend the I erm. I lanson and SI.f shall meet and confei in good faith tn determine il agreement can he reached on an exemafiim schedule and Mining Plan for such option periods If the panics cannot retidi agreement on a revised excavation schedule and Mining Pkin. then eithci 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00048 party may leniiinate this agreement on one hundred twenty (120) days' notice io tlie clhcr party. .. As pro\ hied in Section 0.5, the 1 erm may be extended if the parties mutually agree for additional phases on the Property. (c) 1 he following sentences shall he added to Section V' ol the Dmdopment Agteenicnl. "Production Royalty": .... " y y "Notwithstanding the foregoing, starling on January 1. 20 1 7. regardk-ss oi the amount of Aggwgalc remowd trom the Propcity and sold by Hanson each Year. I lanson shall pay SI,I a minimum Production Royalty of fixe I kindred IIwusand I dollars (S500.0<!l),00) per Year ("Minimum Annual Production Royalty"). prot ided howexer that ll.insim shall be allowed to "bank" any Production Royalty paid in any Year that exceeds the Minimum Annual Production Royalty to be applied towards satisfaction of the Minimum Annual Production Royalty for a .. ................ . subsequent hears, lor example, if in year 1. Ikuison pays a Production Royalty of$7st).(t()(). in year 2. Hanson pays a Production Royalty of S50IU Ht; in year u 1 lanson pays Production Royalty of $ Intuit it); and in year 4 Hanson pays a Production Royally Payment of $600,000. then I kinson shall not be obligated to pay any additional Production Royalties in year 1 (because $750,<MKl Production Roy ally exceeded the Minimum Annual Production Royalty t: or in year 2 (hecmisc fMKUHlO is the Minimum Annual Piodiivtiou Royalty; oi in ycai 3 (because Ikutswi banked $25<U)0o from year 1 and applied $200,000 of such bunked amount to salisiy the Minimum Annual Production Royally for year 3): or in y ear 4 because the y>00.000 Production Royalty payment exceeded the Minimum Annual Production Royalty. Bui in Year 5. I lanson will have no further "hanked" credits digiHe from Year I and veil I only hm e the $ 100.000 hanked credit anaikthlc from its year 4 payment in excess of the Minimum Production Royally) to offset against the Minimum Production Royalty in year 5. because there is a three year limit on Ute carry forward oi banking ' of payments m excess of the Minimum Animal Production Royalls Any short tall in the annual Production Royally paid and the Minimum Animal Production Royalty shall be paid by I lanson to SI 1 within thirty ( hl) dins of the end of the Year. The Minimum Annual Production Royally will escalate each 3 ear by the same percentage adjustment us applied to the pcr-tou Production Royalty. "Year" shall mean a 12-month calendar year, botany partial Yem during the Term, the Minimum .Annual Production Royalty shall he pro-rated based on a RM day Avar" f y . . (dl Sections V. "heed Royally.' 4 "I xtiuclion 1 w." and I xhibil P ol the Iknelopmcnt Agreement shall be deleted in their entirely. (c) Section 3.3 shall he amended in its entirety to read as lolhms: 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00049 "(a) Subject in the adjustment prov ided in Section 3.3(bi. I lanson shall pay a royalty of kielth-Six Cents (S X6) per Ion of Aggteualcs a- a production royally during the Term of this Agreement (as adjusted, the "Production Royally Rule"). Such royalties tire due thirty -the (35) days alter the end of the month in which the Aggregates are sold by Hanson. (h) Beginning on Januaiy 1,201 7. and each .lammry Ithereafter during the 1 erm. the Production Royalty Rule shall be an amount equal to the amount in cfiecl in the immediately preceding Year increased by a percentage equal to the greater of: (a) the percent increase, if any. in the PPI during the most recent twelve month petiod lor which such data is available or (b) the year over year percentage increase in the average selling price to all third parlies (excluding I lanson's Affiliates) of Aggregates prodmed or sold at or from the Property. 1 he increase in the average stiles price per ton shall be calculated ns follows: (1) the prior Year's av erage selling price shall be calculated as the per ton price received by I lanson during the twelve month peiiod ending one full year before the January 1 royalty recalculation date, by averaging the per ton price received by 1 lanson during that twelve month period and giv ing equal weight to the price of each ton sold, compared with (?) the average selling ptive. similarly calculated, received by 1 lanson during the twelve month period immediately preceding the January 1 royalty recalculation dale. "A I'll hate" means any business entity that directly or indirectly is in como>l of. is controlled by . oi is undei common conttol of such business entity. 7 | (c) I he term "PPI" means the United Stales Department of Labor. Bureau of Labor Statistics. Producer Price Index foi ('imstnictinn sand, gravel, and crushed stone (commodity code 13-21) on the basis of 1`>82 IW). lithe lot mat oi components of the PPI arc matei killy changed after the execuliwn of this : Agreement, the parties shall substitute .in index which is published by the Bnie.m of I ubor Statistics, oi a similar tipencv. and which in the parties' judgment, is equivalent to the PPI in dlecl on the dale wi this Apiccnicnt Ub I he Parties will levicw and monitor market conditions to determine il the Production Royalty Rate fairly represents and compensates SLI dining the duration of the Icnn. I he rev icw is designed to address unique price improvement conditions < for example. -'<)(?' impiov ement tti average selling price of Aggregates from the Property I. and restructure the Production Royalty Rate to idled those dicumslances Any changes will be discussed and modified only if approved by both Parties." f (0 Section 5. "(JiMnlity and Duality of Materials." nt the Development Agreement is amended m its entiretv to read as follows: tut It is a material Icon and condition of this Agreement that Hanson excavate siilliciem native (i.e . not stockpiled) Matenal (saleable oi not) ("Native Matciial") to meet the excavation schedule and adhere to the Mining Plan set 4 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00050 forth in Exhibit I' to this Amendment. I his is necessary to enable SI 1 to prepare additional air space for disposal at the landfill Therefore. Hanson agrees to excavate, at a minimum, the quanthy of Mate, i:il described lor each month or annual period (stated in Exhibit I) and at the designated areas at the Property. as set lorth in Exhibit I- hereto. (b) Htle to the saleable Aggtcgalcs shall pass to Hanson upon excavation of such saleable Aggregates from the Property; piovided. however. that upon the expiration of Term of the Development Agreement cis amended herein, legal title and ownership to till saleable Aggregates and all olhci excavated materials remaining on lite Property, it any. shall revert to and be deemed solely vested in SI I. Sil may thereafter sell such saleable Aggregates and shall retain all proceeds thereof. (c) Notwithstanding the foregoing. SI I is obligated to excavate line Materials that Hanson piev imisly conveyed to SI I pursuant to Section E? ol the Dev elopmem Agreement and SU placed in an area that Hanson must excavate pursuant to the Mining Plan ("Previously Removed l ine Material"!. Such materials excavated by SI I shall not count towards I kmsori s excavation . obligations in Exhibit I or the Mining Plan. "Tine Materials" shall mean the portion nt the Material that is not composed of saleable Aggregate." tgt Section 6.2. "Mining Plan." is amended in its entirety to read as follows: "Hanson shall adhere to the Mining Plan attached hereto as Exhibit T unless the parties agree otherwise, in a writing signed by both patties. In addition, on or about September El of each year <t the \giccmcnt. SI I shall provide Hanson with copies ol 1 midi ill development plans detailing the specific location of 1 andliII development needed hu the upcoming calendar year along with the 1 andHH development progression anticipated over the next live-year period SI 1 \ plans shall include enginceringestiiuat.esof quantities of Material tu be removed dong with details regarding any and all permit limit.ition andor restriction that would impact 1 lanson's ability to perform under this Agreement, Hanson shall use the Mining Plan to develop the anticipated Cost olTixtraction ("Cost") for rcmov ing and processing Material. I .xccpi as expressly proc ided in Section 5(c). all said Cost shall be the sole responsibility oil ktitson and shall inchide the cost ot excavation and transportation and disposal of tines into the Designated 1 ties Materials Conveyance Area (except the Previously Removed I ne Matcrmh. Nothing in this Agreement shall piohibil SI I from the following activities: ri excavation. exuaction. drilling, and blasting of Material, tii) placing liners in all or a portion ol the Property, (lib stockpiling Material <>r (iv) doing any other ucth its icasonahh necessary for SI 1 to timely and effectively opciale its kuidllll according to its permits; provided, however, that (x) SI I will extiaci Material as reasonably practical to prescnc the Aggregates hu extraction by Hanson " ... 5- 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00051 (h) In Section h. 1, "I abor and I'.quipmciit". the second sentence shall be replaced in hs cntiietc with the following: ................ ...................... ... "In the event SI I require' I lanson tn relocate any <>r all of the equipment or utilities sooner than 24 months belote the end of the Initial term, then SI 1 'hall pay to Hanson the pro-rata share of the relocation expenses based on a straight line depreciation oxer the total years in the Initial lerm. lor example, if SI J requires Hanson to relocate equipment in July 2029. then Sl.l would be obligated to pay Hanson 4'17ih <>l the relocation cost or. in lieu of such pay incut. 1 hmson may then elect to terminate the tejiccmenl on 120 days' written notice to Si 1 " 1 he followitig sentences shall be added to Section 6.3. "Removal ot fines": "1 Hinson shall also, at its sole expense, convey l ine Materials to the pit designated on JgxhjhitG (the Additional l ine Materials Area") until the \<klitional 1 me Miilcnal- Akm is filled to its capacity "1 11 led to its capacity ` shall mean non-cnpinecrcd placement ofmaterial up to the approximate dev niton of Kid It. Hanson shall be responsible lor (he costs to convey and place the 1 inc Materials into the Addition, il 1 itn Materials Area. W hen the "Additional 1 inc Materials Area" is filled to its capacity. the parties shall meet and confcron an alternate locution lor the bine Materials c Mteinaloc 1 inc Materials Area") Hanson shall convey 1 inc Materials to the Alternative 1 ine Materials Aiea 1 lanson shall only be responsible I'm the cost to convey fines to the Aller native 1 inc Materials Area up to the avetagc annutil capital and operating cost' inclined by 1 kmson to convey I inc Materials to the Additional 1 inc Material .Area 1 "Hanson's Conveyance (Jblig-itinn"). Ilaii^ Obligation shall be determined by adding up the following marginal costs incurred by Hanson io convey fines to the Additional l ine Materials Area' labor, power, fuel. equipment te.g.. dozer, loader, haul trucks I. and capital costs such as conveyor extensions 1 hesc exists will then be utlculaled on a per cubic yard basis using the volume of materials conveyed to the Additional l-mc Matmal Area 1 he insulting avviage per cubic yard cost shall be the 1 lanson Conveyance (thligalion. following the Year in which the Hanson < oilvcyancc < Iblmmion is first eulcukiled. the 1 lanson Conveyance < )hliimtinn shall be escalated annually thcrcatter by the percent increase, if any. in the I'PI during the most recent twelve month period tin which such data is mailable. ........ Hanson shall review its l ine Material conveyance costs per cubic yard with Sl.l in September of each year during the Icrm. and shall allow SI 1 to audit Hanson's books and records to verify all such costs. Sl.l shall be obligated to pay for the costs incurred by 1 lanson to convey the I-me Materials Io the Alternative 1 ine Material Aiea in excess of the 1 lanson Convey mice bhgation. SI 1 shall pay Iktnsou such amount within thitly (dthduys lidlowing issuance ofan invoice by 1 lanson to SH. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00052 .. II Hanson requires the placement of structural Till in connection with their operations during the Term of this .Agreement, this fill will he constructed in . accoidance with engineering specifications for structural fill placement pros ided by Si I and attached heteto as l-.xhibit H. and shall 1'e paid lor by Hanson (j) follow St Section 6 4, `Progress Meetings mid Reports," is amended in its entirety tv read as .. "Hanson shrill provide SI ,1 with a monthly report suiting the total quantity of Material excavated by 1 lanson during the prior month. I his report shall be delivered to Republic no kitci than ihe tenth business day of the following month, further, unless the parties agree otherwise, I lanson anil SI I shall meet mimlhly to review Hanson's progress towards meeting the excavation schedule requirements in Exhibit f and. il'agreed to by both parlies in a writing signed by both parties, may amend oi update the schedule and.'oi the Mining Plan. following Phase I and 2 of the Mining Plan. Hanson shall excavate at the minimum rate ol VStUMtO cubic voids per Year of Native Mateii.il. I Ills requirement may be with cd annually by SI.I. in SI Ts sole discretion. Such waiver, it requested by I kmson. shall be discussed at Ihc aiimi:il meeting described in Section (> 2 of the Agreement, If given by SI 1. SI I shall provide I lanson any such waiver in writing. ... .. . II it is detcimincd that I lanson is no! inukine "Adequate Progress" based on the Mining Plan m l.xhihil I and the annual excavation requirements aflci the completion of Phases I and 2 described herein, and as these requirements may be amended in writing by the Parlies from time to time. SI.I may. at is option, prov ide written notice to I lanson ol the shutltall in eseav ation ami shall allow Hanson to cure the short hill in full within b<> days of I lansonA receipt of such notice. "Adeqicute Progiess" shall mean ( A; cubic yards per month during Phase I of the Mining Plan in Exhibit E or th; 125.WO cubic yards pei month during Phase 2 ol the Mining Plan in I xhibii 1-, oi ((') following Phase I and 2 of the Mining Plan. So.tKtl) cubic yards pei month. II the shortlulJ is not cured by the end ofsueb W-day period. SI ] may, at is sole option and discretion, hue a third party contractor at the expense of Hanson io reach the level of \dequatc Progress, prov iik-d however that I lanson may continue to excavate the Property in conjunction with such third paity contractor. During the period that SI I's thhJ party contiacloi is excavating on the Property. Hanson shall not imivasonably intei lore with the excavation plans and avtiv hies of SI I's thm! party eonliacloi I hmson shall reimburse SU. within thirty (alt) days of invoice receipt, for SI I's reasonable out-of-pocket costs of hiiing such third parly contractor in leach the level of Adequate Progress." ...... ... ...... ik) Scetiim Wi of the Development Agreement shall he amended to replace "in 17 scars" with "the I erm ... 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00053 A ? LyLmUjon I eey^nd f^ .. (u) Ikmson waives, mid SI I shall no! be obligated io pay Jkmsiui. the l.xtraction Pecs Receivables Balance SI I waives. and l lanciti shall not he obligated to pay SI I. the Contractor Excavation Cost, .... . ? .... i ; lb) [lanson waives any and all right to. and SI.I shall no longer be obligated to pay I lanson. any I fraction I'ccs lot the remaining I erm SI ! waives any and all right to. and I kin.son shall not be obligated to pay Sl.l. any Heed Royalties under the Development Agreement, 3. Sl.l Relocation Obligations. (a) SI I shall pay I lanson the Skc'H.od-MM SI I Relocation Obligation on 01 belale December 31.2<>I6. (b! SI I shall pay I lanson the Utility Relocation <'oct within 60 day s of I lanson's issuance of an invoice tor such cost to Sl.l. 4 ( onthus: No Olhci Amendment In the event oi a conlliet between the provisions of (his Amciidineiit nnd the pros isiom ol the Development Agreement, the piw isnm-. ol this Amendment shall control. ( 'apitali/ed terms nut dclincd herein shall refer to the definitions of such tenne in the Development Agreement I xcept as expressly set forth in thi > Amendment, the pici isious ot the I iccnse remain in hid torve and effect & MisceUangoHs, .. k " .. Ui) Aitthyrily.. Imch signatory ol this .-Agreement represents and warrants that he oi *.lte has full authority to enter into this Amendment on behalfofthe respective parties. (hi I .mire Agreement. I his Amendment. together with the Development Aereement. represents the entire understanding and agreement between I lanson and SI 1 with respect to the subject matter heieol. mid no amendment or moshIknti<hi ol this Aviwnicnt shall he effective unless it is set Ibrth in a willing specificaily staling that it is intended to be an amendment hereof, specify iiiy what pros isioti hereof is being amended thereby, and signed by each of the parties. I Ins Amendment involves all rcciptocul payment obligations ol the Panics anelili', prior to the date of execution of this Amendment arising under sections a. 4 and 6.1 of the Development Agreement, and establishes the ivcipiocal payment obligations ofthe Parties relining to the matters covered by these sections from and .tfler the date of csecirtmn of this Amendment, unless this Amendment expressly provides otherwise. (c! No 1 bird Party Beneficiaries. Nothing in this Amendment, express or implied, is intended or shall be construcil to confer upon, or give to. any person, other than the named parties to this Amendment, any rights, ternedies. obligations or liabilities, 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00054 (d) Counterparts. This Aincndmcrtinay be executed in one or more counterpart';, each of which shall be an original, but all of which, taken together, shall w institute one and the same Xmendjient The parties contemplate that they may Ik cxmilitig rnuntei parts of this Amendment ttanstnillcd by iucMtnile or e-mail in 1'1)1 format and agree and intend that a ,,igiMturu by facsimile machine <>i email ni Pl)l- foimat shall bind the party so signing with rhe same cifect as though the signature wu, an original signature Hanson ar.d SLI shall execute and delwi-T such additional documents and hike such additKiiul actions as either may reasonably tt-queh to imry out the pmponce of this Amendment ... ....... (c| Sesetabilily Hany tern 01 pmvi con nt tin . Amendment is irnahd, illegal, or incapable of being enforced by wiuc ol any ledeial or state law. <n public policy, all mb, tern, usd pirn isn't ot tins Amendment shall nevertheless remain in lull force and cited so Line as the legal substance id me transaction c< mein plated hereby i- not aflected in any m.amcr mak-Tull) .id' cise to any <>1 the pmtremo this Amendment. I-pun such detetniiritiiiun th.it any - Mi term ar pitiMs.on is im JiJ. illegal, ui KKapal'Ic ofbcmg cnfoKi-d, the p-irtKs lu-reli sh'dl wimtMc in gimd iaith to niudity this Amendment S' a., to etfeet the original intent ul the parties a- Jioiely a ,pm .Me tn .m ri'-eepulde mannn m older that the Irunsaun'n-. lonlemplati-d hemhv 'i unisiranated as erigimtlly cm?ctiipl,"ed to Hit greatest extent possible d IA WI I'Nl-'SS HFKHj!-. U.nr.on and SLI hare executed this Agreement intending it to be effcvl've ;w ot the date first w i'teu .ibiwe ... ................... HhW, Ai itdhtuMI-S f'A< H:K .sYi.AMOUb f ANOHU.JNV, a California M >1 -THA l-S'l. IM' a IMmvire mrpw.rlnin corpvratmn By NiiW' k life Idle: Df ML 9 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00055 E11LLLL1J: Minin 1'1:111 and Evitiation Si Induit Excavate MPC-1 Phase I. approximately 2.2 million cubic yards. of Naine Malcriai during the eight <X) month period starting on Phase 1 Commvnccineni Date (the "Phase 1 Excavation"). See drawing number I. ` Phase I ( omtnencemenl Dale shall he Septembci I. 2t)16. unless SI.I protides I lanson advance notice of a delay in the Phase I ( omineneeniem Date. Assuming that the Phase 1 Commencement Dale begins on Septcmbci 1. 21>f6 lire Phase I bxv avalion shall be completed by no kitet than Api il C). 201 7 Minimum csemtition rate will he 200 000 cubic xatds per month starting on Phase I Coinineitccment Date. a Excavated mateiial In he stockpiled in urea shown <>n drawing miinbc'r 1, Coinplele exultation of remaining ateu ol MPC-1. approximately 2.4 million cubic yards ol Native Material, duime the tv.entj f20> month pvitod starting on the Phase 2 . CiiniineiiLenient Dale, unless si I provides Ilanson advance notice ol a delay such ol conunencenienl. See draw iug nuinbei 2. g .. -. Phase 2 Cumnicnccincnt Dale shall be the day following the conclusion ol the Phase 1 1 xcmatKin a Minimum cxcmatioii talc will be 125.00(1 cubic yards per month - I xemated material to he stockpiled in atca shown on drawing number 2. I ollonme Phase I and 2 ol the Mining Plan. 1 lansou shall excavate at the tnhiimum late of 7S0.OO0 cubic yaids pet Year of Native Material. Sec draw im: number ' for reniainine kurahill lootprinl excavation Stockpile locations tot lulutv excavated inalmal atiJ additional lines material Io be determined as the landfill development piogtesscs, 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00056 THOMAS E. MONTGOMERY COUNTY COUNSEL Counfg of OFFICE OF COUNTY COUNSEL 1600 PACIFIC HIGHWAY, ROOM 355, SAN DIEGO, CA 92101 (619) 531-4860 Fax (619) 531-6005 PAULA FORBIS SENIOR DEPUTY Direct Dial. (658)586-2706 E-Mail, paulaforbis^ May 2,2017 ' Stephen J. O'Neil Sheppard Mullin Richter & Hampton 333 South Hope Street, 43rd Floor Los Angeles, C A 90071 -1422 VIA EMAIL. AND U.S. MAIL Re: Hanson Aggregates Pacific Southwest, Inc.- Santee Title V Issues Dear Stephen: Thank you for your letter of March 15,2017. I have revi ewed your letter as well as the Landfill Development Agreement ("Agreement") and the First Amendment ("Amendment") to that Agreement which you provided. As a preliminary matter, the District will agree to protect the information in Exhibit B, C, and D, as trade secret information. Ifa public records act request is submitted asking tor these materials, the District will follow the procedures prescribed in District Rule 177(g) prior to releasing those materials. Additionally, for the reasons discussed below, we do hot require the pricing and billing information that you offered to submit as Exhibits C and D. You may choose to submit that information at a later time, but we do not find it necessary' to determining whether the Hanson Aggregates Pacific Southwest Inc. operation ofthe Hanson Santee Aggregate Plant ("Hanson 'Santee") at Sycamore Landfill should be aggregated with the operations ofthe landfill itself. From the review of the Agreement and Amendment, and in consideration ofyour letter, the Disteict finds that Hanspn Santee and Sycamore Landfill should considered a single stationary source- for purposes of Title- V permitting. The following are the reasons for this conclusion. 1. Hanson Santee and Svcamore Landfill meetthe definition of a single stationary source under District Rule 1401. For purposes of permitting under Title V, a stationary sdurce is defined as "an emission unit, or aggregation of emission units which are located on the same or 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00057 Mr. Stephen O'Neil -2- May 2, 2017 contiguous properties and which units are under common ownership or entitlement to use." District Rule 1401(e)(46). As we discussed in our phone call of September 15, 2016, the District interprets the phrase "entitlement to use" to be the same as "common, control" which is extensively discussed in federal Environmental Protection Agency (``EPA') letters related to stationary source determinations1. Thus, there are two prongs to identifying a stationary source under the District Title V Rules: location on a contiguous parcel, and entitlement to use (common control). A. The Hanson Santee and Sycamore Landfill operations are located on a contiguous parcel. There is no dispute- that the Hanson Santee operations are located on the same parcel as the Sycamore Landfill Operations. In fact, what is apparent from the aptly named Landfill Development Agreement submitted as Exhibit B is that Hanson Santee is located upon and was contracted to excavate the landfill itself, as well as provide the daily cover for the landfill. B. There is clearly common control between the parties as reflected in the Agreement and Amendment. As the EPA has long noted, "Typically, companies don't just locate on another's property and do whatever they want. Such relationships are usually governed by contractual, lease, or other agreements that establish how the facilities interact with one another. Therefore, we presume that one company locating on another' s land establishes a "control" relationship." Letter from William A, Spratlin, Director, Air, RCRA, and Toxics Division to Peter R. Hamlin, dated September 18, 1995. This presumption is rebuttable, so it is important to look at the contractual relationship between Hanson Santee and the Sycamore Landfill to determine whether common' control exists. As repeatedly stated in EPA determination letters, EPA has no adopted regulatory definition of "common control". Instead, . the Agency has relied on thesom definition. Webster's Dictionary defines control as `to exercise restraining or directing influence over,' `to have power over,' `power of authority toguide or manage,' or if it [regulates] economic activity." Letter from MattHaber, Chief, Permits Office, to Jennifer B. Schlosstein, dated November 27, 1996. The Spratlin letter referenced above includes a lisi of screening questions often employed in analyzing the operations of 1 However, to clear up any confusion from our call, I did not indicate that the District interpreted "entitlement to use" s also encompassing the concept of common SIC code, contrary to the assertion in your letter. As will be discussed below, however; under either the federal or local definition of stationary source, the Hanson Santee operations must be aggregated with the Sycamore Landfill. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00058 Mr. Stephen O'Neil -3- May 2, 2017 sources to determine whether common control exists between the entities. Even in the absence of shared corporate structures or administrative functions, "the new facility may still be considered to be under the control of the existing source if a significant number of the indicators point to common control." Spratlin letter, at 2. After review of the Agreement and Amendment, the District finds that several of the screening questions in the EPA guidance can be answered in the affirmative, and thus are indicative of common control. These include the following: Does one operation support the operation olThc other? Yes- Hanson Santee is essentially operating as the excavation operation for the Sy camore Landfill. This is reflected in the terms of the Agreement and Amendment. The Landfill Development Agreement provides, "The parties desire to enter into an arrangement whereby [Hanson Santee's predecessor [ will cause the Material to be removed, from the Property. ,, in a manner consistent with [Sycamore's] needs to develop the Property as a landfi l l , and the Aggregates to be marketed.. .." Agreement A page-1, Recitals- section D, The Amendment provides, "Il is a material term and condition of this Agreement that Hanson excavate sufficient... Material,. . to meet the excavation schedule and adhere to the Mining Plan set forth in Exhibit F to this Amendment. This is necessary to enable [Sycamore) to prepare additional air space for disposal al the landfill." Amendment at section Kf)(a), (emphasis added). What are the financial arrangements between the tw o entities? The financial arrangements arc mutually fetteficiaL As you note in your letter, it is not unlawful to engage iii a mutually beneficial contract; however it can indicate: common control, as it does here. Under the Agreement, Hanson Santee has an exclusive license to extract the aggregates on the site. Agreement at section 1,(1. l)(a). Under the Amendment, Hanson Santee provides a minimum, production royalty to Sycamore Landfill, and pays:royalties based upon the aggregate it is able to sell. Amendment section 1(c). Under the Agreement, Sycamore Landfill was required to pay ah Extraction Fee per cubic yard of material removed. This lee is no longer required under the terms of the Amendment. Agreement section 1(4); Amendment section 1(d). What arc the contractual arrangements .for providing,goodsrand services? The Amendment provides that Hanson will extract materials as specified in the Mining Plan and Excavation Schedule in order to create the space for the landfill. Amendment section I(f)(a), Exhibit F. If Hanson Santee fails to 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00059 Mr. Stephen O'Neil -4- May 2,2017 comply with the established schedule. Sycamore-Landfill may hire another contractor at Hanson Santee's expense. Amendment at I(j). OlLlheJadiiiicsstare^^ ........... manufacturing equipment? Hanson Santee is also required to deposit the "fine materials" byproduct to an area specified by Sycamore Landfill. Agreement section 1(6.3); Amendment section l(i). Fine Materials are defined in the Amendment as the portion of excavated material that is not composed of saleable aggregate. According to the Joint Technical Document for Sycamore Landfill, approximately 60% by volume of the exc avated material (i,e. the fine materials) is being supplied to Sycamore Landfill for daily cover, and this is projected to supply 100% of the landfill's daily and final cover needs. 2015 Joint Technical Document for Sycamore I.andfill at 6-1 and 6-2. There is no fee for this material in the Agreement or Amendment. Based Upon the above answers to these screening questions, Hanson Santee and Sycamore Landfill are under common control. Hanson Santee provides all of the excavation for the Sycamore Landfill, in addition to all of the soil for the daily and final cover. Sycamore Landfil l can control the location and the amount Of materials to be removed from the site, in order to develop the Landfill. While Hanson Santee benefits from being able to sell the aggregates it produces, this does not detract from the considerable control over its operation under the terms of the Agreement and Amendment. Additionally, EPA screening also looks for a contract-for-service relationship as evidence of common control. An EPA policy guidance letter on the treatment of temporary and contracted operations at stationary sources instructs that, "temporary and contractor-operated units be included as part of the source with which they operate Or support." Letter from John Sietz, Chief of the Qffice of Air Quality Planning and Standards to the Minnesota Pollution Control Agency, November 16, 1994). Additional EPA guidance provides, "a determination of common control may be made on the basis of.indirect control, such as when the goods or services- provided by a co-located, contract-for-service entity are integral to or contribute to the output provided by a separately owned Or operated' activity with which it operates or supports." Hber letter, at 3. Tn this case, Hanson Santee's excavation operation is integral to th operation of the landfill . Wh ile a contractor was brought on to supplement the excavation in 2014, this does not detract from the fact that Hanson Santee is the primary provider of excavation services to Sycamore Landfill. In fact, under the initial Agreement, Hanson's 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00060 Mr. Stephen O'Neil -5- May 2.2017 predecessor was paid an "Extraction Jee" per cubic yard of material removed to perform this service. Agreement at section 1(4). And as noted above, Hanson Santee must comply with the Mining and Excavation Schedule established by the Amendment. If Hanson Santee does not comply with the excavation schedule, Sycamore Landfill "may, at its sole option and discretion, hire a third party contractor at the expense of Hahsoh to reach the level of Adequate Progress." Amendment at section I(j) (emphasis added). This is clear evidence of contractAbr-service arrangement, and as such, common control, II. 1 lanspn Santec muyLbe_aggregaled with the Sj camore Landfill because they meet the definition of a single stationary strnree under federal Title V regulations. As you correctly noted in your letter, the federal definition of stationary source has a three-prong test.2 For purposes of Title permitting, federal regulations define major source as one or more stationary sources that: 1) are located on contiguous or adjacent properties' 2) are under common control of the same person or person s un der coinmon control; and 3) have the same two-digit Standard Industrial Classification ("SIC") Code. 40 Code of Federal Regulations 70, As discussed abovei Hanson Santee and Sycamore Landfill operate on the same parcel, and are under common control by virtue ofthe cohtractual relationship between them. They also can be considered to be under the same SIC code, since Hanson Santee is operating as a support facility to Sycamore Landfill. A. Hanson Sanlee is operating as a support facility to Sycamore Landfill, and as such can be considered to be operating m same SIC code. As discussed above, Hanson Santee supports the operation of the Sycamore Landfill by providing excavation services to develop the landfill as well as the fine materials needed for the daily and final cover for the landfill per the terms of the Agreement and Amendment. EPA guidance provides that ``a support facility is considered to be part of the same industrial grouping of that as the primary facility it supports even if the support facility has a different two-digit SIC code," Letter from Robert B. Miller, Chief) Permits and Grants Section, to William Baumann, dated August 25,1999 A support facility relationship is presumed to exist when more than 50 percent of the output or services that arc provided by one- facility is dedicated to another facility 2 The District's Title V Rules including this definition were approved by ERA initially on February 5, 1996. As a result, it is the District definition of stationary source that would govern this determination. Regardless, as further discussed herein, the Hanson Santee and Sycamore Landfill operations would be aggregated under cither definition. 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00061 Mr. Stephen O'Neil -6- May 2,2017 that it supports. Letter from Kathleen Anderson, Chief, Air Permits and Technical Review Branch, to Sharon G. Foley, dated October 22. 2009. In this case. 100"' of Hanson Santee's excavation operation is dedicated to excavation ofthe Sycamore Landfill, and this operation provides 100% of the daily cover needed for the landfill. Furthermore, additional factors may be considered in determining whether a support facility relationship exists. Support facility determinations can also depend upon the following: The degree to which the supporting activity receives materials or services from the primary activity (which indicates a mutually beneficial arrangement between the primary and secondary activities); The degree to which the primary activity exerts controls over the support activity's operations; The nature of any contractual arrangements between the facilities; and The reasons for the presence of the support activity on the same site as the: primary activity (e.g. whether the support activity would exist at that site but for the primary activity). Miller letter, at 2. As discussed above, it is clear from the review of the Agreement and Amendment that Hanson. Santee receives the ability to mine aggregate for sale. Sycamore Landfill exerts complete control over the location and amount of materials to be removed, and Hanson Santee would not be located upon this property were it not for its role in excavating the :Space for the Sycamore Landfill . As such, it is a support facility to the Sycamore Landfill and can be considered to be operating under the same two-digit SIC code as Sycamore Landfill. B. The support facility concept is not limited to permitting decisions under the Prevention of Significant Determination ("PSD") program. Contrary to the assertion in your letter, the support facility concept is hot limited to permitting under the PSD program. The EPA letter to John D. Lowe referenced in your letter simply does not specify as such. While the concept was toially described in the preamble to the PSD regulations, it lias subsequently been referenced in many EPA deteminations related to Title V permits, SeetHaber letter, November 27, 1996:at 1; Anderson letter, October 22,2009 at 3; and (most recently) Letter from Kenneth Moraff, Director, Office of Ecosystem Protection to Douglas L. McVay, dated March 25, 2016 at 3,4. ' 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00062 Mr. Stephen O'Neil .7. May 2, 2017 Conclusion Based ypon its analysis of the factors discussed above, the District finds that the Hanson Santee operations at the Sycamore landfill must be aggregated with the emissions of the landfill itself because Hanson Santee is essentially operating-as^the excavation operation for the Sycamore Landfill, and provides the daily cover materials for the landfill. As such, Hanson Santee should have submitted a Title V permit application within 12 monthswfcommencingi operation at that location. District Ride 1414(c). The District sent notice of the Title V permit requirement to your client on March 11,2016, Under even the most generous reading of District Rule 1414, an application for Hanson's Title V permit was due to the District by March 11,2017. Further delay in submittal of the application will put your client at added risk for District, federal or citizen enforcement. Please contact me with any questions you may have, Very truly yours, THQMASE.,MONTGOMERY, County Counsel By PMula Forbis, Senior Deputy 17cv1906 Sierra Club v. EPA ED_001523A_00000345-00063