motion for order to ok tceq enforcement

8/9/2019 Motion for Order to Ok Tceq Enforcement

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IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE

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In re:

EXIDE TECHNOLOGIES,

Debtor. 1

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Chapter 11

Case No. 13-11482 (KJC)

Hrg. Date: April 20, 2015 at 2:00 p.m. (Eastern)(Proposed)Obj. Due: TBD

THE DEBTOR ’ S MOTION FOR AN ORDER UNDER BANKRUPTCY CODESECTION 363 AND BANKRUPTCY RULE 9019 AUTHORIZING THE DEBTOR ’ SENTRY INTO AND APPROVING THE AGREED ENFORCEMENT ORDER WITH

THE TCEQ AND GRANTING RELATED RELIEF

The debtor and debtor in possession in the above-captioned case ( “ Exide ” or “ Debtor ” )

respectfully submits this motion (the “ Motion ” ) seeking entry of an order under section 363(b) of

title 11 of the United States Code (the “ Bankruptcy Code ” ) and Rule 9019 of the Federal Rules

of Bankruptcy Procedure (the “ Bankruptcy Rules ” ), authorizing entry into and approving that

certain agreed enforcement order, TCEQ Docket No. 2013-2207-IHW-E (the “ Agreed

Enforcement Order ” )2 with the Texas Commission on Environmental Quality (the “ TCEQ ” and

together with the Debtor, the “ Parties ” ) and allowing the TCEQ Claim (as defined herein) in the

amount and subject to the treatment set forth herein. A copy of the Agreed Enforcement Order is

1 The last four digits of the Debtor ’ s taxpayer identification number are 2730. The Debtor ’ s corporateheadquarters are located at 13000 Deerfield Parkway, Building 200, Milton, Georgia 30004.

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the AgreedEnforcement Order.

Case 13-11482-KJC Doc 3468 Filed 04/08/15 Page 1 of 12


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attached hereto as Exhibit A and is incorporated herein by reference. 3 In support of the Motion,

the Debtor respectfully states as follows:

JURISDICTION AND VENUE

1. This Court has jurisdiction to consider the Motion under 28 U.S.C. §§ 157

and 1334. This is a core proceeding under 28 U.S.C. § 157(b). Venue of the Chapter 11 Case

(defined below) and the Motion in this District is proper under 28 U.S.C. §§ 1408 and 1409.

2. The statutory predicates for the relief requested herein are Bankruptcy

Code section 363(b) and Bankruptcy Rule 9019.

3. Pursuant to Rule 9013-1(f) of the Local Rules for the United States

Bankruptcy Court for the District of Delaware, the Debtor consents to the entry of a final

judgment or order with respect to the Motion if it is determined that this Court would lack

Article III jurisdiction to enter such final order or judgment absent the consent of the Parties.

SUMMARY OF TREATMENT OF THE TCEQ CLAIM

4. The Agreed Enforcement Order 4 expressly provides that the administrative

penalty assessed therein will be treated and allocated in an order of the Bankruptcy Court

approving such treatment and allocation. Accordingly, the Parties respectfully request that this

Court enter the proposed order attached hereto, which, among other things, orders that the

administrative penalty in the amount of $2,451,984.00 (the “ TCEQ Claim ” ) shall be treated in

3 Any description of the Agreed Enforcement Order in the Motion, and any other reference to the terms of theAgreed Enforcement Order in the Motion, is only a summary of the Agreed Enforcement Order and is not

meant to modify or amend any terms of the Agreed Enforcement Order. In the event of a conflict orinconsistency between the Motion and the terms of the Agreed Enforcement Order, the terms of the AgreedEnforcement Order shall control.

4 The approval of the Agreed Enforcement Order is expressly conditioned on an opportunity for public commentin accordance with Tex. Water Code § 7.075 and 30 TAC § 70.10(c) and, approval by the Commissioners ofTCEQ in an open meeting, as required by Tex. Gov ’ t Code ch. 551. This Commissioners ’ meeting is currentlyscheduled for mid-April.



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the Chapter 11 Case as follows: on the later of (a) the effective date of the Agreed Enforcement

Order, (b) the effective date of the Plan (defined below), and (c) the date this Order becomes a

final order (the later of (a)-(c), the “ Allowed Claim Date ” ) (a) $150,000 of the TCEQ Claim shall

constitute a post-petition administrative expense of the bankruptcy estate that shall be (i) allowed

and (ii) paid in cash in full within 30 days of the Allowed Claim Date and (b) $2,301,984 of the

TCEQ Claim shall constitute a pre-petition, general unsecured claim that shall be (i) allowed and

(ii) subordinated to the claims of other pre-petition unsecured claims in the Chapter 11 Case.

5. The allowance of the TCEQ Claim as set forth above pursuant to the

proposed order is in full satisfaction of the TCEQ Claim and all rights to assert against theDebtor and or the Reorganized Debtor that the TCEQ Claim is anything but the classifications

agreed upon by the Parties, as set forth above.

6. In addition to the TCEQ Claim, under the Agreed Enforcement Order, on

or about September 7, 2015, Exide will be required to post financial assurance for the estimated

closure and post-closure care of the Class 2 Landfill in the aggregate amount of $1,800,000.

BACKGROUND

A. The Chapter 11 Case

7. On June 10, 2013 (the “ Petition Date ” ), the Debtor commenced a case by

filing a petition for relief under chapter 11 of the Bankruptcy Code (the “ Chapter 11 Case ” ).

8. The Debtor continues to operate its business and manage its property as a

debtor and a debtor in possession pursuant to Bankruptcy Code sections 1107(a) and 1108.

9. On June 18, 2013, the United States Trustee for the District of Delaware

(the “ U.S. Trustee ” ) appointed an Official Committee of Unsecured Creditors (the “ Creditors ’

Committee ” ) in the Chapter 11 Case pursuant to Bankruptcy Code section 1102. No trustee or

examiner has been appointed in the Chapter 11 Case.



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10. On November 17, 2014, the Debtor filed the Plan of Reorganization of

Exide Technologies (Docket No. 2632). On January 30, 2015, the Debtor filed the First

Amended Plan of Reorganization of Exide Technologies (Docket No. 3060). On February 5,

2015, the Debtor filed the Second Amended Plan of Reorganization of Exide Technologies

(Docket No. 3096). On March 25, 2015, the Debtor filed the Third Amended Plan of

Reorganization of Exide Technologies (Docket No. 3371). On March 27, 2015, the Debtor filed

the Fourth Amended Plan of Reorganization of Exide Technologies (Docket No. 3409) (as may

be further amended from time to time and including all exhibits and supplements thereto, the

“

Plan”

).11. On March 27, 2015, the Bankruptcy Court entered its Findings of Fact,

Conclusions of Law and Order Confirming Fourth Amended Plan of Reorganization of Exide

Technologies (Docket No. 3423), which, among other things, was an Order confirming the Plan.

B. The Frisco Facility and the TCEQ Enforcement Matter

12. The Debtor owns real property located at 7471 South 5th Street in Frisco,

Collin County, Texas, on which it formerly operated a lead and lead bearing waste reclamation

facility (the “ Frisco Facility ” ).

13. On September 24, 2013, the TCEQ issued a notice of enforcement (the

“ 2013 NOE ” ) to Exide alleging certain industrial solid and hazardous waste compliance

violations at the Frisco Facility associated with treated slag in the Frisco Facility ’ s Class 2

Landfill and management of certain wastes during decommissioning of the Frisco Facility.

14. Following arm ’ s length negotiations with the TCEQ on the proposed

penalty amount and on remedial or technical actions to be undertaken to resolve the alleged

violations, the Parties agreed to enter into the Agreed Enforcement Order to resolve the

violations alleged in the 2013 NOE.



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RELIEF REQUESTED

15. By the Motion, the Debtor respectfully requests the entry of an order, under

Bankruptcy Code section 363(b) and Bankruptcy Rule 9019 authorizing the Debtor ’ s entry into

and approving the Agreed Enforcement Order.

APPLICABLE AUTHORITY

16. This Court has discretion to approve the Debtor ’ s entry into the Agreed

Enforcement Order under Bankruptcy Code section 363 after notice and a hearing. See Myers v.

Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996). The procedure for approving a

settlement in bankruptcy is set forth in Bankruptcy Rule 9019, which states:

On motion by the trustee and after notice and a hearing, the courtmay approve a compromise or settlement. Notice shall be given tocreditors, the United States trustee, the debtor, and indenturetrustees as provided in Rule 2002 and to any other entity as thecourt may direct.

Fed. R. Bankr. P. 9019(a).

B. The Debtor ’ s Entry Into The Agreed Enforcement Order Should Be ApprovedUnder Bankruptcy Code Section 363

17. Under Bankruptcy Code section 363(b)(1), a debtor in possession “ after

notice and a hearing, may use, sell, or lease, other than in the ordinary course of business,

property of the estate. ” 11 U.S.C. § 363(b)(1). 5 In determining whether to authorize a debtor to

use property under Bankruptcy Code section 363(b)(1), courts require the debtor to demonstrate

5 To the extent that the proposed entry into and performance of the Agreed Enforcement Order is viewed as use

of estate property, the requested relief should be considered under the business judgment standard. See Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346 (3d Cir. 1999) (reviewing debtor ’ s settlementof a cause of action as the equivalent of a sale of that cause of action under the business judgment standard). Inthe instant case, the Debtor believes, in its sound business judgment, that entering into and performing under theAgreed Enforcement Order is fair and equitable and is in the best interest of its estate and its creditors. Byfiling the Motion, however, the Debtor is not conceding that environmental settlements are outside the ordinarycourse of business, but, rather, the Debtor is seeking this Court ’ s imprimatur to ensure the settlement ’ senforceability and to promote full transparency in the Chapter 11 Case.



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that a sound business purpose justifies its actions. See In re Martin, 91 F.3d at 395; Comm. of

Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983);

Dai-Ichi Kangyo Bank, Ltd. v. Montgomery Ward Holding Co. (In re Montgomery Ward

Holding Co.), 242 B.R. 147, 153 (D. Del. 1999); In re Delaware Hudson Ry. Co., 124 B.R. 169,

179 (Bankr. D. Del. 1991).

18. Once the debtor has articulated a valid business purpose, courts consider

whether relief is justified under the business judgment rule. See Dai-Ichi Kangyo Bank, 242 B.R.

at 153; Hudson Ry. Co., 124 B.R. at 176; Lionel Corp., 722 F.2d at 1071. “ The business

judgment rule‘

is a presumption that in making a business decision the directors of a corporationacted on an informed basis, in good faith and in the honest belief that the action was in the best

interests of the company. ’” In re Integrated Resources, Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992)

(quoting Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985)). The business judgment rule

has “ vitality ” in chapter 11 cases and presumes that a debtor ’ s management decisions are

reasonable. See Integrated Resources, 147 B.R. at 656; Comm. of Asbestos-Related Litigants

and/or Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 615-16

(Bankr. S.D.N.Y. 1986) ( “ [T]he Code favors the continued operation of a business by a debtor

and a presumption of reasonableness attaches to a debtor ’ s management decisions. ” ).

19. In this case, the Agreed Enforcement Order is fair, reasonable, and in the

best interest of the Debtor ’ s estate. First, the Agreed Enforcement Order provides Exide with a

level of certainty about certain of its obligations at the Frisco Facility. In particular, following

extensive negotiations, the Debtor has agreed to resolve its liability under the 2013 NOE by

complying with the provisions of the Agreed Enforcement Order and by assessment of a penalty

of $2,451,984 ($150,000 of which shall be treated as a postpetition administrative expense and



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the rest shall be treated as a prepetition general unsecured claim that is subordinated to the claims

of other pre-petition unsecured claims). This penalty is less than the penalty that the TCEQ

originally asserted, and in Exide ’ s judgment represents a reasonable compromise based on

discussions and negotiations with the TCEQ with respect to the allegations set forth in the 2013

NOE.

20. Second, the Agreed Enforcement Order confirms the Class 2 Landfill shall

be closed in place based on the TCEQ ’ s review, agreement with, and approval of the Risk

Assessment, a report by Golder Associates, a third-party environmental consulting firm,

evaluating potential remedial alternatives for the Class 2 Landfill. The Risk Assessmentconcluded that closure in place is the best option from a risk evaluation standpoint, because the

other alternatives did not provide a distinguishable difference in long-term risks or the ultimate

goal of long-term effectiveness and would result in increased short-term risks.

C. The Agreed Enforcement Order Should Be Approved Under Bankruptcy Rule 9019

21. Moreover, this Court has authority to approve the Agreed Enforcement

Order pursuant to Bankruptcy Rule 9019. Key3Media Group, Inc. v. Puliver.com Inc. (In re

Key3Media Group, Inc.), 336 B.R. 87, 92 (Bankr. D. Del. 2005). In fact, compromises, such as

those provided by the Agreed Enforcement Order “ are favored in bankruptcy ” because they

“ minimize litigation and expedite the administration of a bankruptcy estate. ” In re Martin, 91

F.3d at 393 (citing Collier on Bankruptcy ¶ 9019.03[1] (15th ed. 1993)).

22. In evaluating the execution of the Agreed Enforcement Order to settle the

Parties ’ disputes, this Court should not substitute its judgment (or that of any other party) for that

of the Debtor. In re Edwards, 228 B.R. 552, 569 (Bankr. E.D. Pa. 1998). Instead, this Court

should evaluate “ whether the compromise is fair, reasonable, and in the interest of the estate. ” In

re Louise ’ s Inc., 211 B.R. 798, 801 (D.Del. 1997); In re Marvel Entm ’ t Group, Inc., 222 B.R.



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243 (D. Del. 1998) (proposed settlement held in best interest of the estate). The “ best interest ”

test requires that the proposed settlement be “ fair and equitable. ” Protective Comm. for Indep.

Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968); Key3Media

Group, 336 B.R. at 92. In evaluating the fairness of a settlement, a court does not have to be

convinced that the settlement is the best possible compromise, but only that the settlement falls

within the reasonable range of litigation possibilities. See In re Washington Mutual, Inc., 442

B.R. 314, 328 (Bankr. D. Del. 2011); In re Capmark Fin. Group Inc., 438 B.R. 471, 515 (Bankr.

D. Del. 2010); In re World Health Alt., Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006). Thus, a

court should approve a settlement if the proposed agreement does not fall beneath the“

lowest point in the range of reasonableness. ” Washington Mutual, 442 B.R. at 328; In re Coram

Healthcare Corp., 315 B.R. 321, 330 (Bankr. D. Del. 2004); see also Cosoff v. Rodman (In re

W.T. Grant Co.), 699 F.2d 599, 613 (2d Cir. 1983) ( “ We conclude by reemphasizing that the

task of the bankruptcy judge was not to determine whether the settlement was the best that could

have been obtained, something that neither he nor we can ever know, but whether it fall[s] below

the lowest point in the range of reasonableness. ” ) (emphasis added) (internal quotations omitted).

23. The Third Circuit has identified four factors that courts should consider in

determining whether a settlement falls within the lowest point in the range of reasonableness:

(1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the

complexity of the litigation involved, and the expense, inconvenience, and delay necessarily

attending it; and (4) the paramount interest of the creditors. In re Martin, 91 F.3d at 393; see also



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Will v. Northwestern Univ. (In re Nutraquest, Inc.), 434 F.3d 639, 644-45 (3d Cir. 2006)

(reaffirming use of the Martin factors). 6

24. Probability of Success in Litigation . As noted above, absent a settlement,

there are a number of complex issues that would likely have to be litigated, including, among

other issues, the amount of any penalty Exide would be obligated to pay as a result of the alleged

violations. Specifically, the TCEQ argued that there was unauthorized waste both in the closed

cells and in the treated slag piles staged in the footprint of the Class 2 Landfill. The TCEQ

administrative penalties are authorized for up to $25,000 per violation, per day and are applied

pursuant to a penalty policy that sets out various factors for TCEQ evaluation. While, absent asettlement, the Debtor may have disputed those contentions and the amounts of the penalties,

ultimately, Exide provided the TCEQ with supplemental information and the TCEQ agreed to

assess $2,451,984 in penalties, of which $150,000 will be treated as a postpetition administrative

expense, with the rest of the penalty amount to be treated as a prepetition general unsecured

claim, which shall be subordinated to the claims of other prepetition unsecured claims, thus

avoiding litigation. In addition, the Agreed Enforcement Order confirms that the Class 2

Landfill will be closed in place based on the TCEQ ’ s review, agreement with, and approval of

the Risk Assessment. The other alternatives did not provide a distinguishable difference in long-

term risks or the ultimate goal of long-term effectiveness and would result in increased short-

term risks. If the agreement set forth in the Agreed Enforcement Order had not been reached, the

Parties would have had to argue over the correct interpretation of highly technical state and

federal environmental regulations and the application of those regulations to disputed facts. The

6 Recently, this Court in this case in connection with another settlement noted that it looks at what ’ s been proposed in light of the Martin factors. See In re Exide Technologies, Hrg. Trans., February 4, 2015, page 69.



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NOTICE

28. Notice of the Motion will be given to: (i) the Office of the United States

Trustee; (ii) counsel to the agent under the debtor in possession financing; (iii) counsel to the

agent for the Debtor ’ s prepetition secured lenders; (iv) the indenture trustee for each of the

Debtor ’ s secured and unsecured outstanding bond issuances; (v) counsel to the unofficial

committee of senior secured noteholders; (vi) counsel to the Creditors ’ Committee; (vii) counsel

to the TCEQ; and (viii) all parties entitled to notice pursuant to Bankruptcy Rule 2002. The

Debtor submits that no other or further notice need be provided.

NO PRIOR REQUEST29. No previous request for the relief sought herein has been made to this

Court or any other court.



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CONCLUSION

WHEREFORE, the Debtor respectfully requests that this Court enter an order (i)

authorizing the Debtor to enter into and approving the Agreed Enforcement Order and (ii)

granting such other and further relief as may be just and proper.

Dated: Wilmington, DelawareApril 8, 2015

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

/s/ Dain A. De SouzaAnthony W. Clark (I.D. No. 2051)

Dain A. De Souza (I.D. No. 5737)One Rodney SquareP.O. Box 636Wilmington, Delaware 19899-0636Telephone: (302) 651-3000Fax: (302) 651-3001

- and –

Kenneth S. ZimanJ. Eric Ivester

Four Times Square New York, New York 10036-6522Telephone: (212) 735-3000Fax: (212) 735-2000

- and –

James J Mazza, Jr.155 N. Wacker Dr.Chicago, Illinois 60606Telephone: (312) 407-0700

Fax: (312) 407-0411

Counsel for Debtor and Debtor in Possession



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EXHIBIT A

(Agreed Enforcement Order)

Case 13-11482-KJC Doc 3468-1 Filed 04/08/15 Page 1 of 20


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TEXAS COMMISSION ON ENVIRONMENTAL Q UALITY

IN THE MATTER OF ANENFORCEMENT ACTION

CONCERNINGEXIDE TECHNOLOGIES

RN100218643

§§§§§

BEFORE THE

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY

AGREED ORDER DOCKET NO. 2013-2207-IHW-E

At its agenda, the Texas Commission on Environmental Quality("the Commission" or "TCEQ") considered this agreement of the parties (as defined below),resolving an enforcement action regarding Exide Technologies ("Respondent") under theauthority of T EX. HEALTH & S AFETY CODE ch. 361 and T EX. W ATER CODE ch. 7. The ExecutiveDirector of the TCEQ, through the Enforcement Division, and Respondent, represented by Ms. Aileen Hooks of the law firm of Baker Botts L.L.P. (collectively, the “parties”), presented thisagreement to the Commission.

Respondent understands that it has certain procedural rights at certain points in theenforcement process, including, but not limited to, the right to formal notice of violations, noticeof an evidentiary hearing, the right to an evidentiary hearing, and a right to appeal. By enteringinto this Order, Respondent agrees to waive all notice and procedural rights associated with theentry of this Order.

It is further understood and agreed that this Order represents the complete and fully-integrated settlement of the parties. The duties and responsibilities imposed by this Order are binding upon Respondent.

The Commission makes the following Findings of Fact and Conclusions of Law:

I. FINDINGS OF FACT

1. Respondent owns a property located at 7471 South 5 th Street in Frisco, Collin County,Texas, on which it formerly operated a lead and lead bearing waste reclamation facility(the "Facility"). The Facility consists of several waste management units, one of which isa Class 2 landfill (Notice of Registration (“NOR”) waste management unit 012) and



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Exide TechnologiesDOCKET NO. 2013-2207-IHW-EPage 2

formerly included recycling units. The enforcement actions related to this Order do not

include the property enrolled in the TCEQ Voluntary Cleanup Program, VCP No. 2541.2. The Facility involves or involved the management of industrial solid waste and industrial

hazardous waste (“IHW”) as defined in T EX. H EALTH & S AFETY CODE ch. 361 and 30 Tex. Admin. Code ch. 335, and is subject to IHW Permit No. 50206, for the storage andprocessing of hazardous waste (the “Permit”) and ISWR No. 30516 for the managementof industrial solid waste.

3. An investigation was conducted beginning with a site visit on February 13, 2013, whileRespondent was in the process of shutting down its operations, and included a review ofdocuments provided by Respondent on April 11, 2013, regarding the Class 2 landfill.Based on the site visit and document review, TCEQ staff documented that Respondent:

a. Failed to obtain a permit or other authorization and meet the requirements forstorage of hazardous waste in waste piles. Specifically, in two waste piles,consisting of treated slag (“Treated Slag Piles”) located within the east and westsides of the Class 2 landfill, Respondent stored waste, a portion of which did notmeet land disposal restriction (“LDR”) universal treatment standards (“UTS”)and/or was characteristically hazardous for lead, without a permit and withoutmeeting the requirements for storage of hazardous waste in a waste pile;

b. Failed to obtain a permit to store hazardous waste. Specifically, Respondentstored super sacks containing waste characteristically hazardous for lead andcadmium in the former Battery Breaker Area, which is not a permitted containerstorage area ("CSA");

c. Failed to limit waste storage and management in a permitted unit to authorized wastes. Specifically, Respondent stored and managed super sacks containing waste characteristically hazardous for lead and/or cadmium in the former BatteryReceiving and Storage Area, which is a permitted CSA but not authorized to storethis particular waste;

d. Failed to label hazardous waste containers with the beginning date ofaccumulation and with the words “Hazardous Waste.” Specifically, Respondentfailed to timely label super sacks containing waste characteristically hazardousfor lead and/or cadmium in the Battery Breaker Area and the Battery Receivingand Storage Area;

e. Failed to obtain a permit or other authorization for disposal and failed to meetthe LDR UTS for hazardous waste. Specifically, on April 11, 2013, Respondentprovided analytical results of samples of treated blast furnace slag disposed of incells 1 through 9 of the Class 2 landfill at the Facility, which included some resultsthat exceeded the Toxicity Characteristic Leaching Procedure (“TCLP”)concentration of 5.0 mg/l for lead and the UTS of 0.75 mg/l for lead; and



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f. Failed to conduct a proper hazardous waste determination or waste classification

and failed to completely characterize waste for the purpose of meeting LDRs.Specifically, Respondent provided analytical results of treated blast furnace slagthat was disposed of in cells 1 through 9 of the Class 2 landfill and placed in theTreated Slag Piles on the east and west sides of the Class 2 landfill that did notconsistently include analyses for cadmium.

4. Respondent received notice of the violations on September 27, 2013.

5. The Facility is located in the portion of Collin County that is an air quality non-attainment area for lead.

6. Site investigations have identified lead as a chemical of concern in Facility soils.

7. The Executive Director recognizes that:

a. On or about December 1, 2012, Respondent began the process ofdecommissioning the Facility. Respondent completed demolition of the lead andlead bearing waste reclamation facility, including the Battery Receiving andStorage Area and the Battery Breaker Area, by August 20, 2013;

b. Respondent shipped all super sacks identified as containing treated blast furnaceslag characteristically hazardous for lead and/or cadmium offsite for treatmentand disposal by March 1, 2013;

c. Respondent appropriately labeled the super sacks by February 14, 2013;

d. On June 10, 2013, Respondent filed a petition for bankruptcy relief pursuant toChapter 11 of the United States Code (“U.S.C.”);

e. Respondent submitted a sampling plan for the Treated Slag Piles on July 3, 2014(such sampling plan, upon approval by the Executive Director, the “Sampling and Analysis Plan”);

f. Based on Respondent’s analysis of certain sample results, some of the waste inthe Treated Slag Piles was removed and disposed of at an authorized facility on orabout March 1, 2012; and

g. Respondent engaged a consultant to conduct an evaluation to assess thefeasibility of and identify potential risks associated with Class 2 landfill closurescenarios and submitted the report by Golder Associates titled Exide Class 2 Landfill Risk Evaluation of Remedial Alternatives, August 2014 to the TCEQ on August 25, 2014 (“Risk Evaluation”).

8. The Class 2 landfill in its entirety is addressed by this Order. Accordingly, OrderingProvision No. 3.a. of TCEQ Agreed Order Docket No. 2011-1712-IHW-E should beterminated.

9. The Risk Evaluation states that the open and capped cells of the Class 2 landfill have acomposite liner consisting of a 60-mil high density polyethylene (“HDPE”) flexiblemembrane liner and 2.5-3.0 feet of compacted clay with a hydraulic conductivity of nomore than 1x10 -7 cm/sec.



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10. The information provided by the Risk Evaluation satisfies the liner criteria for

designation of the Class 2 landfill as a corrective action management unit (“CAMU”).11. The Risk Evaluation states that the Class 2 landfill has a leachate collection system that

is designed to convey leachate to a sump, where it is then pumped to an above groundstorage tank.

12. The information provided by the Risk Evaluation satisfies the leachate collection systemcriteria for designation of the Class 2 landfill as a CAMU.

13. The Risk Evaluation states that cells 1 through 9 have a cap that consists of one foot ofsoil, covered by three feet of compacted clay, covered by a 40-mil HDPE geomembrane,covered by 18 inches of vegetated topsoil.

14. The information regarding the cap on cells 1 through 9 of the Class 2 landfill, as provided by the Risk Evaluation, satisfies the cap criteria for designation of the Class 2 landfill as aCAMU.

15. The Risk Evaluation demonstrates that the concentrations of lead and cadmium in the waste currently located in cells 1 through 12 of the Class 2 landfill are protective ofhuman health and the environment when properly contained in the Class 2 landfill. TheRisk Evaluation further demonstrates the technical impracticability and the elevatedshort-term risk to human health and the environment associated with excavation and re-treatment of the waste currently located in cells 1 through 12 to the standards in 40 Codeof Federal Regulations (“C.F.R.”) § 264.522(e)(4)(iv).

16. The information provided by the Risk Evaluation satisfies the adjusted treatmentstandards for approval of the Class 2 landfill as a CAMU.

17.

The Risk Evaluation considered available remedial alternatives and their impacts tohuman health and the environment and recommends the alternative that poses the leastrisk to human health and the environment, which is that the waste in the Class 2 landfillremain in place.

18. The Executive Director agrees with the conclusions of, and has approved, the RiskEvaluation.

19. Pursuant to its NOR and Permit, Respondent identified itself as a generator of industrialsolid and hazardous waste and an owner/operator of a treatment, storage, or disposalfacility with respect to the Facility.

20. According to reports submitted and the results of samples collected at the Facility therehave been releases of industrial solid and hazardous wastes and/or hazardous

constituents into the environment at the Facility.21. Respondent generated industrial solid and hazardous waste with respect to the Facility.

22. Respondent generated, stored, processed, and/or disposed of industrial solid andhazardous waste at the Facility.

23. Industrial solid and hazardous waste and/or hazardous constituents identified in thereports and sample results associated with the Facility, if not properly managed, maypose an unacceptable risk to human health and/or the environment.



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24. The Risk Evaluation supports the designation of the Class 2 landfill at the Facility as a

CAMU, and such designation is a protective, effective, reliable and cost-effective methodof managing the CAMU-eligible waste that remains at the Facility.

25. The following wastes are CAMU-eligible wastes that are authorized to be contained inthe Class 2 landfill: the treated slag that currently exists in cells 1 through 12, waste inthe Treated Slag Piles that meets Class 2 specifications, the re-treated slag that iscurrently contained in nine roll-off boxes located within the footprint of the Class 2landfill at the Facility, and the Class 2 non-hazardous remediation waste associated withclean-up activities for VCP No. 2541 (J Parcel) and other Class 2 remediation wasteapproved in the Final Closure Plan.

26. The information in the Risk Evaluation provides support for the conclusion that theClass 2 landfill satisfies all applicable regulatory criteria for its designation as a CAMUunder 30 T EX. A DMIN . CODE ch. 335 and 40 C.F.R. § 264.552(c).

II. CONCLUSIONS OF LAW

1. Respondent is subject to the jurisdiction of the TCEQ pursuant to T EX. HEALTH & S AFETYCODE ch. 361 and the rules of the Commission.

2. As evidenced by Finding of Fact No. 3.a., Respondent failed to obtain a permit or otherauthorization and meet the requirements for storage of hazardous waste in waste piles,in violation of 30 T EX. A DMIN . CODE §§ 335.2, 335.43, 335.152(a)(10) and 335.431; 40C.F.R. §§ 264.13, 264.250, 264.251, 264.252, 264.253, 264.254, 264.258, 268.50(a) and268.50(c); and IHW Permit No. 50206, General Facility Standards, C.1.d.

3. As evidenced by Finding of Fact No. 3.b., Respondent failed to obtain a permit or otherauthorization to store hazardous waste, in violation of 30 T EX. A DMIN . CODE §§ 335.2 and335.43; and IHW Permit No. 50206, General Facility Standards, C.1.d.

4. As evidenced by Finding of Fact No. 3.c., Respondent failed to store and manageauthorized waste in a permitted unit, in violation of 30 T EX. A DMIN . CODE § 335.152;and IHW Permit No. 50206, Wastes and Waste Analysis, B.1, B.4 and C.1.f.

5. As evidenced by Finding of Fact No. 3.d., Respondent failed to label hazardous wastecontainers with the beginning date of accumulation and with the words “Hazardous Waste,” in violation of 30 T EX. A DMIN . CODE § 335.69(a)(2) and (a)(3) and 40 C.F.R.

§ 262.34(a)(2) and (a)(3).

6. As evidenced by Findings of Fact No. 3.e., Respondent failed to obtain a permit fordisposal of hazardous waste and meet the LDR UTS for that waste, in violation of 30TEX. A DMIN . CODE §§ 335.2 and 335.431 and 40 C.F.R. §§ 268.34(b) and 268.40.

7. As evidenced by Findings of Fact No. 3.f., Respondent failed to conduct a properhazardous waste determination and waste classification and completely characterize



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waste for the purpose of meeting LDRs, in violation of 30 T EX. A DMIN . CODE §§ 335.62,

335.503(a), and 335.504 and 40 C.F.R. §§ 262.11.8. Certain materials found at the Facility are industrial solid and/or hazardous waste,

and/or hazardous constituents as defined by § 1004(5) of the Resource Conservation andRecovery Act (“RCRA”), § 3001 of RCRA, 40 C.F.R. Part 261, T EX. HEALTH & S AFETYCODE ch. 361, and 30 T EX. A DMIN . CODE ch. 335.

9. Industrial solid and/or hazardous waste, hazardous substances, and/or hazardousconstituents were disposed of at the Facility.

10. There is and/or has been a release of industrial solid and/or hazardous wastes, and/orhazardous constituents into the environment from the Facility.

11. The Class 2 Landfill CAMU designated by this Order is consistent with RCRA and T EX.

H EALTH & S AFETY CODE ch. 361 and is necessary to protect human health and/or theenvironment.

12. As evidenced by Findings of Fact Nos. 9 and 10, the Class 2 landfill’s composite linermeets the CAMU requirements for liners, in accordance with 40 C.F.R.§ 264.552(e)(3)(i).

13. As evidenced by Findings of Fact Nos. 11 and 12, the Class 2 landfill’s leachate collectionsystem meets the CAMU requirements for leachate collection systems, in accordance with 40 C.F.R. § 264.552(e)(3)(i).

14. As evidenced by Findings of Fact Nos. 13 and 14, the cap on cells 1 through 9 of the Class2 landfill meets the CAMU requirements for a cap, in accordance with 40 C.F.R.§ 264.552(e)(6)(iv).

15. Pursuant to 40 C.F.R. § 264.552(e)(4)(v) and as evidenced by Findings of Fact Nos. 15and 16, the waste currently in cells 1 through 12 of the Class 2 landfill meets adjustedtreatment standards when properly contained in the Class 2 landfill.

16. As evidenced by Finding of Fact No. 25, the materials to be consolidated or placed intothe Class 2 landfill CAMU are “CAMU-eligible wastes,” as defined by 40 C.F.R.§ 264.552.

17. As required by 40 C.F.R. § 264.552(d), and as evidenced by Findings of Fact Nos. 9through 18 and 24 through 26, the Risk Evaluation provides sufficient information toenable the TCEQ to designate the Class 2 landfill at the Facility a CAMU (Attachment A,“Planned Cap Extent”) and to ensure that the criteria for this CAMU designation under40 C.F.R. § 264.552 and 30 T EX. A DMIN . CODE ch. 335 have been satisfied.

18. Pursuant to T EX. W ATER CODE § 7.051, the Commission has the authority to assess anadministrative penalty against Respondent for violations of statutes within theCommission’s jurisdiction; for violations of rules adopted under such statutes; or for violations of orders or permits issued under such statutes.

19. Pursuant to TEX. W ATER CODE § 7.073, the Commission has the authority to assess anadministrative penalty against Respondent and order Respondent to take correctiveaction.



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20. As evidenced by Finding of Fact No. 7.d., Exide Technologies filed a petition for bankruptcy relief pursuant to Chapter 11 of the United States Code. The Automatic Stayimposed by the Bankruptcy Code [specifically, 11 U.S.C. Section 362(a)] does not applyto the commencement or continuation of an action or proceeding by a governmental unitto enforce such governmental unit’s police or regulatory power, by virtue of the exceptionset out at 11 U.S.C. Section 362(b)(4). Accordingly, TCEQ [a governmental unit asdefined under 11 U.S.C. Section 101(27)] is expressly excepted from the automatic stay inpursuing enforcement of the State’s environmental protection laws, and in seeking toliquidate its damages for such violations. A Bankruptcy Rule 9019 Motion (“9019Motion”) has or will be filed with the U.S. Bankruptcy Court for the District of Delaware,in which the Debtor’s bankruptcy case is pending (case number: 13-11482), requestingauthorization for Exide’s entry into this Order and approval of the compromise andsettlement of this enforcement action, expressly conditioned on approval by the TCEQCommissioners.

An administrative penalty in the amount of two million four hundred fifty-one thousandnine hundred eighty-four dollars ($2,451,984.00), is justified by the facts recited in thisOrder, and considered in light of the factors set forth in Tex. Water Code § 7.053.

III. ORDERING PROVISIONS

NOW, THEREFORE, THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITYORDERS that:

1. Respondent is assessed an administrative penalty in the amount of two million fourhundred fifty-one thousand nine hundred eighty-four dollars ($2,451,984.00), as setforth in Section II, Paragraph 20 above, for violations of TCEQ rules and state statutes,such penalty to be treated and allocated as set forth in an order of the Bankruptcy Courtapproving such treatment and allocation. The assessment of this administrative penaltyand Respondent’s compliance with all the terms and conditions set forth in this Ordercompletely resolve only the violations set forth by this Order in this action. However, theCommission shall not be constrained in any manner from requiring corrective actions orpenalties for other violations that are not raised here. Payments for the portion of theadministrative penalty determined by the Bankruptcy Court order approving thecompromise to be entitled to administrative expense priority shall be made payable inaccordance with the terms of that order.

2. Respondent shall undertake the following technical requirements:

a. Immediately upon the effective date of this Order, implement procedures toensure the use of waste handling practices that comport with 30 T EX. A DMIN . CODE chs. 330 and 335 during Facility closure and remediation;

b. Conduct proper hazardous waste determinations and waste classifications andcharacterize waste generated during Facility closure and remediation for thepurpose of meeting applicable LDRs, in accordance with 30 T EX. A DMIN . CODE



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§§ 335.2, 335.62, 335.431, 335.503, and 335.504 and 40 C.F.R. § 262.11, 264.13,

268.7, 268.34, and 268.40;c. Conduct all work associated with this Order in a manner that will employ good

housekeeping practices and dust suppression measures that will minimize to thegreatest extent practicable air emissions of particulate matter and lead.Respondent shall evaluate air monitoring data from the monitoring system andshall also use E-BAM monitors to monitor air quality while potentially dustgenerating work is being conducted. Respondent shall dedicate one person withthe authority to stop work to monitor the E-BAM alarms, take 30-minute blockreadings from the E-BAM monitors, and monitor the wind direction and windspeed with a localized meteorological station. If sustained wind speed (the windspeed obtained by averaging the measured values over a ten-minute period)exceeds 20 miles per hour, all waste disturbing activities must cease until thesustained wind speed declines to 20 miles per hour or lower for at least 15consecutive minutes. Multiple (three or more) E-BAM monitors shall be locatedin the vicinity of the Class 2 landfill according to wind direction, so as toadequately monitor air quality downwind of the work. Additionally, air samplesshall be collected every other day, beginning with the first day of work, with high volume pumps that draw approximately 10 liters of air, and analyzed for metalsconcentrations, including lead and cadmium. Respondent will adhere to thefollowing portions of the previously TCEQ approved (dated January 31, 2013, asrevised) Perimeter Air Monitoring Plan for Response Actions at the Class 2 Non-Hazardous Waste Landfill (“Perimeter Air Monitoring Plan”): the proceduresrelating to stop-work levels for wind (p. 5), and the procedures and stop-worklevels relating to “Initial Action Levels and Response,” Table 1 (p. 9). Respondentshall also comply with the provisions of 30 Tex. Admin. Code § 106.533 (AirQuality Permit by Rule for Remediation);

d. Within 40 calendar days of the later of the (i) effective date of this Order, or (ii)the date Respondent receives approval of the Sampling and Analysis Plan fromthe Executive Director, initiate installation and maintain an interim coverconsisting of either one foot of clean fill material or an HDPE membrane at least8-mil thick and secured in place for cells 10 through 12 of the Class 2 landfill inorder to minimize emissions of particulate matter and lead from the open areasof these cells; and

e. Within 15 days after completion of the installation of the interim cover required by Ordering Provision No. 2.d., submit the construction details of the interimcover and an operation and maintenance plan for the interim cover to theExecutive Director for approval. Respondent shall respond to any comments orchanges requested by the Executive Director concerning the interim cover andthe operation and maintenance plan within 15 days of receiving such requests.The construction details and operation and maintenance plan shall be submittedto:



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Industrial and Hazardous Waste Permits Section

Waste Permits Division, MC 126Texas Commission on Environmental QualityP.O. Box 13087

Austin, Texas 78711-3087

with copies to:

Remediation Division, MC 225Texas Commission on Environmental QualityP.O. Box 13087


Order Compliance TeamEnforcement Division, MC 149ATexas Commission on Environmental QualityP.O. Box 13087


Waste Section ManagerDallas/Fort Worth Regional OfficeTexas Commission on Environmental Quality2309 Gravel DriveFort Worth, Texas 76118-6951

f. With respect to the Treated Slag Piles:

i. Within 50 days of the later of (A) the effective date of this Order, or (B)the date Respondent receives approval of the Sampling and Analysis Planfrom the Executive Director, implement the Sampling and Analysis Plan;and

ii. Within 80 days of the later of (A) the effective date of this Order, or (B)the date Respondent receives approval of the Sampling and Analysis Planfrom the Executive Director, dispose of the Treated Slag Piles located

within the east and west sides of the Class 2 landfill, utilizing dustsuppression procedures that will minimize air emissions of particulatematter and lead. Such disposal may occur: (1) in the Class 2 landfill if the

waste meets the definition of Class 2 waste in 30 T EX. A DMIN . CODE ch.335, and/or (2) at a facility authorized to accept the waste, in accordance

with the results of the Sampling and Analysis Plan. If any portion of the waste is placed in the Class 2 landfill, Respondent shall cover such wastedaily with an interim cover consistent with that specified in OrderingProvision No. 2.d.



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g. Within 75 days after the later of the (A) effective date of this Order, or (B) the

date Respondent receives approval of the Sampling and Analysis Plan from theExecutive Director, submit written certification in accordance with OrderingProvision No. 2.w. below, to demonstrate compliance with Ordering ProvisionsNos. 2.a. through 2.f.

h. Within 120 days after the effective date of this Order, submit for ExecutiveDirector review and approval a Final Closure Plan for the Class 2 Landfill CAMU(“Final Closure Plan”), demonstrating how the Class 2 Landfill CAMU will beclosed in accordance with 40 C.F.R. §§ 264.112 and 264.552. The Final ClosurePlan shall include:

(1) The design criteria and basis of the final closure method(s) withdetailed descriptions of both how the Class 2 Landfill CAMU will be closed and how such closure will be conducted to meet therequirements of 40 C.F.R. §§ 264.112 and 264.552 and OrderingProvision No. 2.h.(3);

(2) Detailed descriptions of groundwater monitoring, leachatecollection, and storm water run-on and run-off control, and anyother activity necessary to ensure that such closure meets theelements of 40 C.F.R. §§ 264.112 and 264.552;

(3) Detailed final engineering design plans for the cap to be installedon cells 10-15. The cap shall comply with the requirements of 40C.F.R. § 264.552 and shall be fully integrated with the existing capover cells 1-9 so as to provide a unified cap over the entire landfill.For cells 10-15, the cap shall, at a minimum, consist of a multi-layer final cover system (“MLFCS”) as follows:

i. A 3-foot thick layer of compacted clay or an equivalentgeosynthetic clay liner (“GCL”) system;

ii. A geomembrane as approved by the Executive Directorinstalled over the compacted clay (or GCL) surface;

iii. A geotextile will be placed on top of the geomembrane;

iv. A 1.5-foot thick layer of general clean fill material will beplaced on top of the geotextile; and

v. A 1.5-foot thick layer of topsoil would then be placed abovethe general clean fill layer and hydroseeded;

(4) A quality assurance/quality control plan to be followed duringimplementation of the final closure method(s);



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(5) A description of waste management practices to be followed

during implementation of the final closure method(s), includingremoval and decontamination of equipment and devices used inthe CAMU waste management and closure activities;

(6) Contingency plans and procedures to be followed duringimplementation of the final closure method(s);

(7) Detailed operation and maintenance plans;

(8) Detailed monitoring plans, including air monitoring and dustsuppression plans, for the final closure method(s);

(9) An implementation and activity schedule for the final closuremethod(s); and

(10) A copy of the Risk Evaluation referenced in Finding of Fact No. 7.

i. Within 120 days after the effective date of this Order, publish the Final ClosurePlan on the Exide Technologies Frisco Recycling Center Closure communitynotice website, currently located at http://www.exidefriscoclosure.com, andprovide the opportunity to submit written comments on the Final Closure Planfor a period of 30 days after the plan is published.

j. Within 120 days after the effective date of this Order, publish notice of the FinalClosure Plan in a newspaper that serves the community in which the Facility islocated and provide the opportunity to submit written comments on the FinalClosure Plan for a period of 30 days after the notice is published.

k. Within 30 days after the end of the comment period in Ordering Provisions Nos.2.i. and 2.j., prepare and submit to the Executive Director a response to thepublic comments received regarding the Final Closure Plan. Such response shall be simultaneously published on the Exide Technologies Frisco Recycling CenterClosure community notice website, referenced in Ordering Provision No. 2.i.

l. Any samples of waste and environmental media collected pursuant to this Ordershall be collected and analyzed in accordance with the latest edition of EPAGuidance SW-846, Test Methods for Evaluating Solid Waste, Physical/ChemicalMethods, or other agency-approved methods.

m. Any engineered designs and/or plans submitted to the TCEQ pursuant to thisOrder shall be sealed by a Professional Engineer licensed by the State of Texas.

n. Any geological designs, reports, and/or plans submitted to the TCEQ pursuant tothis Order shall be sealed by a Professional Geologist licensed by the State ofTexas.



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o. Financial assurance for closure and post closure for the Class 2 landfill is

required to be posted by September 7, 2015, in the amount of nine hundredthousand dollars ($900,000.00) for closure and nine hundred thousand dollars($900,000.00) for post-closure care. To the extent one or more approvedfinancial assurance mechanisms are not already in place for the closure and post-closure care for the Class 2 landfill, provide financial assurance for the remainingamount for closure and/or post-closure care, as applicable, by September 7, 2015.The financial assurance mechanisms shall be in an amount sufficient to cover thecost of implementation of the proposed final closure method(s) by a third partyand any requisite post-closure care, and shall be a financial assurance mechanismapproved by the TCEQ that complies with applicable provisions of 30 Tex. Admin. Code chs. 37 and 335. The financial assurance mechanism shall besubmitted to:

Financial Assurance TeamRevenue Operations Section, Financial Administration Division, MC 184Texas Commission on Environmental QualityP.O. Box 13087


with copies to:

Industrial and Hazardous Waste Permits Section Waste Permits Division, MC 126Texas Commission on Environmental QualityP.O. Box 13087


Remediation Division, MC 225Texas Commission on Environmental QualityP.O. Box 13087





p. The Executive Director will review the Final Closure Plan. During this review,Respondent shall respond completely and adequately, in good faith, to any



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are significant penalties for submitting false information, including the

possibility of fines and imprisonment for knowing violations."The certifications and supporting documentation shall be submitted to:



with a copy to:


3. Ordering Provision No. 3.a. of TCEQ Agreed Order Docket No. 2011-1712-IHW-E isterminated by this Order.

4. Respondent shall plan, implement, perform, and complete all actions required by thisOrder in accordance with the standards, criteria, specifications, requirements, andschedules set forth herein.

5. All relief not expressly granted in this Order is denied.

6. The provisions of this Order shall apply to and are binding upon Respondent.Respondent is ordered to give notice of the Order to personnel who maintain day-to-daycontrol over the Facility operations referenced in this Order.

7. The provisions of this Order (other than Ordering Provision No. 1 which will be governed by the 9019 Motion and the Bankruptcy Court’s order of approval of such motion),including but not limited to, financial assurance requirements, shall be binding upon anysuccessor and assign that holds title to the property on which the Class 2 landfill islocated, including any Reorganized Debtor under the Debtor’s confirmed Plan ofReorganization.

8. If Respondent fails to comply with any of the Ordering Provisions in this Order withinthe prescribed schedules, and that failure is caused solely by an act of God, war, strike,riot, or other catastrophe, Respondent’s failure to comply is not a violation of this Order.Respondent shall have the burden of establishing to the Executive Director's satisfactionthat such an event has occurred. Respondent shall notify the Executive Director withinseven days after Respondent becomes aware of a delaying event and shall take allreasonable measures to mitigate and minimize any delay.



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9. The Executive Director may grant an extension of any deadline in this Order or in any

plan, report, or other document submitted pursuant to this Order, upon a written andsubstantiated showing of good cause. The parties understand that the speed of work may be impacted by dust suppression efforts and by uncontrollable delays in permittingprocesses, but this understanding does not negate the requirement to submit a writtenextension request. All requests for extensions by Respondent shall be made in writing tothe Executive Director. Extensions are not effective until Respondent receives writtenapproval from the Executive Director. The determination of what constitutes good causerests solely with the Executive Director. Extension requests shall be sent to the OrderCompliance Team at the address listed above. When a deadline under this Order falls ona weekend or state holiday, such deadline shall be deemed to be the next business day.

10. The Executive Director may refer this matter to the Office of the Attorney General of theState of Texas ("OAG") for further enforcement proceedings without notice to theRespondent if the Executive Director determines that the Respondent has not complied with one or more of the terms or conditions in this Order.

11. The provisions of this Order are deemed severable, and, if a court of competent jurisdiction or other appropriate authority deems any provision of this Orderunenforceable, the remaining provisions shall be valid and enforceable.

12. This Order shall terminate five years from its effective date or upon compliance with allthe terms and conditions set forth in this Order, whichever is later.

13. In accordance with T EX. W ATER CODE §7.071, this Order, issued by the Commission, shallnot be admissible against Respondent in a civil proceeding, unless the proceeding is brought by the OAG to: (1) enforce the terms of this Order; or (2) pursue violations of astatute within the Commission’s jurisdiction, or of a rule adopted or an order or permitissued by the Commission under such a statute. This Order may be admissible if offered by Respondent in a proceeding to confirm, establish or prove: the entry of this Order; thescope of this settlement including the actions required of Respondent under this Order;the final administrative resolution of violations covered by this Order; and the payment by Respondent of a penalty under this Order.

14. This Order may be executed in separate and multiple counterparts, which together shallconstitute a single instrument. Any page of this Order may be copied, scanned, digitized,converted to electronic portable document format ("pdf"), or otherwise reproduced andmay be transmitted by digital or electronic transmission, including but not limited tofacsimile transmission and electronic mail. Any signature affixed to this Order shallconstitute an original signature for all purposes and may be used, filed, substituted, orissued for any purpose for which an original signature could be used. The term"signature" shall include manual signatures and true and accurate reproductions ofmanual signatures created, executed, endorsed, adopted, or authorized by the person orpersons to whom the signatures are attributable. Signatures may be copied orreproduced digitally, electronically, by photocopying, engraving, imprinting,lithographing, electronic mail, facsimile transmission, stamping, or any other means orprocess which the Executive Director deems acceptable. In this paragraph exclusively,



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the terms "electronic transmission," "owner," "person," "writing," and "written" shall

have the meanings assigned to them under T EX. BUS. ORG. CODE § 1.002.15. Pursuant to 30 Tex. Admin. Code § 70.10(b) and Tex. Gov't Code § 2001.142, the

effective date of this Order is the date of hand delivery of the fully executed Order toRespondent, or three days after the date on which the Commission mails a copy of thefully executed Order to Respondent, whichever is earlier. The Chief Clerk shall provide acopy of the fully executed Order to each of the parties. Notwithstanding anything to thecontrary herein, the effectiveness of this Order is subject to Bankruptcy Court approval.

IV. DESIGNATION OF THE CLASS 2 LANDFILL CAMU

Now, therefore, the TCEQ further orders that:

In making this CAMU designation, the Executive Director has considered allrelevant factors specified under 40 C.F.R. Part 264, Subpart S, and 30 T EX. A DMIN . CODE ch. 335. The Risk Evaluation demonstrates how the Class 2 Landfill CAMU will beconsistent with applicable and relevant regulatory standards and serves as the basis forthe Executive Director’s CAMU designation ordered herein. Based on theseconsiderations, the Executive Director hereby concludes that the construction,operation, and closure of the Class 2 Landfill CAMU at the Facility, as described in theRisk Evaluation and this Order, and as will be incorporated in the permit amendmentand associated permit process, is a reliable and cost-effective method of managing Class2 CAMU-eligible wastes from the ongoing decommissioning and remediation projectslisted in Finding of Fact No. 25 or any other Facility CAMU-eligible wastes which may beapproved or conditionally approved for disposal in the CAMU by the Executive Director.The actions contemplated under this Order are consistent with RCRA and T EX. H EALTH& S AFETY CODE ch. 361, are protective of human health and the environment, and arehereby approved by the Commission.

1. The unit included and incorporated into the designated CAMU is the Class 2 landfill(Attachment A, “Planned Cap Extent”).

2. Within 180 days after approval by the Executive Director of the Final Closure Plan forthe Class 2 Landfill CAMU, Respondent shall submit all applicable parts of a Part Bapplication as an amendment to the previously submitted Renewal Application for theFacility to incorporate this new CAMU unit and address the post-closure care and re-noticing related to the Class 2 Landfill CAMU in accordance with or following therequirements of 30 T EX. A DMIN . CODE chs. 281, 305, and 335, as applicable. If required,a Post Closure Authorization Application shall be submitted as a modification to TCEQIHW Permit No. 50206. Respondent shall also file any other permit modifications that become necessary during the course of the currently ongoing plant decommission forcorrective action, closure and post-closure care with or in advance of the modificationapplication for the Class 2 landfill post-closure care. The Post Closure Authorization Application shall be submitted to the addresses set forth in Ordering Provision 2.e.



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3. Until the Post Closure Authorization, which will apply reporting provisions, is effective,Respondent shall provide information on the status of CAMU activities, including post-closure activities, in annual reports that shall be filed on January 25 of each year, beginning January 25, 2016.

4. Respondent shall require that all of its contractors, subcontractors, laboratories, andconsultants retained to conduct or monitor any portion of the work performed under thisOrder will comply with the terms of this Order.

5. Respondent shall be responsible for and liable for completing all of the obligations underthis Order, regardless of whether the activities specified herein are to be performed byemployees, agents, contractors, or consultants of the Respondent, or by employees,agents, contractors, or consultants of any party to whom the property is transferred before or after execution of this Order.

6. Any documents transferring ownership and/or operations of the Facility fromRespondent to a successor-in-interest shall include written notice and a copy of thisOrder. Respondent shall provide written confirmation of the notice and a copy of thisOrder being provided to the new owner and/or operator and, except for transfer to theReorganized Debtor, written notice of the transfer of ownership and/or operations of theFacility to TCEQ no less than ninety (90) days prior to the transfer consistent withrequirements set out in 30 T EX. A DMIN . CODE §305.64(g). Transfer of any of theobligations of Respondent under this Order to any third party is subject to approval bythe Executive Director, except for transfer to the Reorganized Debtor.



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EXHIBIT B

(Proposed Order)



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IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

In re:

EXIDE TECHNOLOGIES,

Debtor. 1

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

x:::::::x

Chapter 11

Case No. 13-11482 (KJC)

Related Docket No. __

ORDER UNDER BANKRUPTCY CODE SECTION 363 ANDBANKRUPTCY RULE 9019 AUTHORIZING THE DEBTOR ’ S ENTRY INTO ANDAPPROVING THE AGREED ENFORCEMENT ORDER WITH THE TCEQ AND

GRANTING RELATED RELIEF

Upon consideration of the motion (the “ Motion ” )2 of the above-captioned debtor

and debtor in possession ( “ Exide ” or the “ Debtor ” ) for entry of an order (this “ Order ” ) under

Bankruptcy Code section 363(b) and Bankruptcy Rule 9019 authorizing the Debtor ’ s entry into

and approving the agreed enforcement order (the “ Agreed Enforcement Order ” ) between Exide

and the Texas Commission on Environmental Quality (the “ TCEQ ” ) and granting related relief;

and this Court having jurisdiction to consider the Motion and the relief requested therein

pursuant to 28 U.S.C. §§ 157 and 1334; and consideration of the Motion and the relief requested

therein being a core proceeding pursuant to 28 U.S.C. § 157(b) and a related proceeding pursuant

to 28 U.S.C. § 157(a); and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408

and 1409; and due and proper notice of the Motion having been provided; and it appearing that

1 The last four digits of the Debtor ’ s taxpayer identification number are 2730. The Debtor ’ s corporateheadquarters are located at 13000 Deerfield Parkway, Building 200, Milton, Georgia 30004.

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Motion orthe Agreed Enforcement Order, as applicable.



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2

no other or further notice need be provided; and the relief requested being a reasonable exercise

of the Debtor ’ s sound business judgment consistent with its fiduciary duties and in the best

interests of the Debtor and its estate and creditors; and after due deliberation and sufficient cause

appearing therefor; it is hereby

ORDERED, ADJUDGED, AND DECREED that:

1. The Motion is GRANTED.

2. The Debtor is hereby authorized to enter into the Agreed Enforcement

Order, a copy of which is attached hereto as Exhibit 1 and is incorporated by reference as if fully

set forth herein, which is hereby approved in all respects.3. The Debtor is hereby authorized to take any and all actions necessary to

implement the terms of the Agreed Enforcement Order and this Order without further order of

the Court.

4. On the later of (a) the effective date of the Agreed Enforcement Order, (b)

the effective date of the Plan, and (c) the date this Order becomes a final order (the later of (a)-

(c), the “ Allowed Claim Date ” ) (a) $150,000 of the TCEQ Claim shall constitute a post-petition

administrative expense of the bankruptcy estate with fifty thousand dollars of this amount being

allocated as attorneys ’ fees that shall be (i) allowed and (ii) paid in cash in full within 30 days of

the Allowed Claim Date and (b) $2,301,984 of the TCEQ Claim shall constitute a pre-petition,

general unsecured claim that shall be (i) allowed and (ii) subordinated to the claims of other pre-

petition unsecured claims in the Chapter 11 Case.

5. Allowance of the TCEQ Claim is in full and complete satisfaction of the

TCEQ Claim for penalties, fines, and monetary damages against the Debtor for the violations

alleged in the TCEQ 2013 NOE, and the TCEQ releases and waives any and all rights to assert



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3

against the Debtor and/or the Reorganized Debtor that the TCEQ Claim is in any greater

amounts or anything but the classifications set forth above as ordered by this Court.

6. Exide is authorized to post financial assurance for the closure and post-

closure care of the Class 2 Landfill in accordance with the Agreed Enforcement Order in the

approximate aggregate amount of $1,800,000.

7. For the avoidance of doubt, while the monetary obligations in the attached

Agreed Enforcement Order shall constitute allowed claims in the bankruptcy case of the Debtor

in Possession as set forth above, the technical obligations in the Agreed Enforcement Order shall

be obligations of the Reorganized Debtor in accordance with the language at Section 12.7 of theDebtor ’ s Plan of Reorganization which states: “ Nothing in the Plan, Confirmation Order, or the

Bankruptcy Code (and section 1141 thereof) discharges, releases, resolves, exculpates, precludes

or enjoins: (i) any environmental liability to an Environmental Governmental Unit that is not a

Claim; (ii) any environmental Claim of an Environmental Governmental Unit arising on or after

the Effective Date; (iii) any environmental liability to any Environmental Governmental Unit on

the part of any entity as the owner or operator of property after the Effective Date; or (iv) any

liability to an Environmental Governmental Unit on the part of any Entity other than the Debtor

or Reorganized Debtor. Nothing in the Plan divests any tribunal of any jurisdiction it may have

under environmental law to interpret the Plan. ”

8. Payments on the TCEQ Claim shall be made payable to “ The State of

Texas ” and shall be sent via overnight courier to the following address:

Hal F. MorrisAssistant Attorney General/Managing AttorneyBankruptcy Regulatory SectionBankruptcy & Collections Division300 West 15 th Street, 8 th floorAustin, Texas 78701



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4

9. The approval of the Agreed Enforcement Order is expressly conditioned on

public comment in accordance with Tex. Water Code § 7.075 and 30 TAC § 70.10(c) and,

approval by the Commissioners of the TCEQ in an open meeting, as required by Tex. Gov ’ t

Code ch. 551.

10. Within three days from the TCEQ Commissioners ’ Hearing, the Debtor

shall file with this Court an acknowledgement as to the disposition of the Agreed Enforcement

Order.

11. This Court shall retain jurisdiction to hear and determine all matters arising

from or related to the interpretation, implementation, or enforcement of this Order.Dated: Wilmington, Delaware

______________, 2015

Honorable Kevin J. CareyUNITED STATES BANKRUPTCY JUDGE



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EXHIBIT 1

(Agreed Enforcement Order)



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TEXAS COMMISSION ON ENVIRONMENTAL Q UALITY

IN THE MATTER OF ANENFORCEMENT ACTION

CONCERNINGEXIDE TECHNOLOGIES

RN100218643

§§§§§

BEFORE THE

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY

AGREED ORDER DOCKET NO. 2013-2207-IHW-E

At its agenda, the Texas Commission on Environmental Quality("the Commission" or "TCEQ") considered this agreement of the parties (as defined below),resolving an enforcement action regarding Exide Technologies ("Respondent") under theauthority of T EX. HEALTH & S AFETY CODE ch. 361 and T EX. W ATER CODE ch. 7. The ExecutiveDirector of the TCEQ, through the Enforcement Division, and Respondent, represented by Ms. Aileen Hooks of the law firm of Baker Botts L.L.P. (collectively, the “parties”), presented thisagreement to the Commission.

Respondent understands that it has certain procedural rights at certain points in theenforcement process, including, but not limited to, the right to formal notice of violations, noticeof an evidentiary hearing, the right to an evidentiary hearing, and a right to appeal. By enteringinto this Order, Respondent agrees to waive all notice and procedural rights associated with theentry of this Order.

It is further understood and agreed that this Order represents the complete and fully-integrated settlement of the parties. The duties and responsibilities imposed by this Order are binding upon Respondent.

The Commission makes the following Findings of Fact and Conclusions of Law:

I. FINDINGS OF FACT

1. Respondent owns a property located at 7471 South 5 th Street in Frisco, Collin County,Texas, on which it formerly operated a lead and lead bearing waste reclamation facility(the "Facility"). The Facility consists of several waste management units, one of which isa Class 2 landfill (Notice of Registration (“NOR”) waste management unit 012) and



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formerly included recycling units. The enforcement actions related to this Order do not

include the property enrolled in the TCEQ Voluntary Cleanup Program, VCP No. 2541.2. The Facility involves or involved the management of industrial solid waste and industrial

hazardous waste (“IHW”) as defined in T EX. H EALTH & S AFETY CODE ch. 361 and 30 Tex. Admin. Code ch. 335, and is subject to IHW Permit No. 50206, for the storage andprocessing of hazardous waste (the “Permit”) and ISWR No. 30516 for the managementof industrial solid waste.

3. An investigation was conducted beginning with a site visit on February 13, 2013, whileRespondent was in the process of shutting down its operations, and included a review ofdocuments provided by Respondent on April 11, 2013, regarding the Class 2 landfill.Based on the site visit and document review, TCEQ staff documented that Respondent:

a. Failed to obtain a permit or other authorization and meet the requirements forstorage of hazardous waste in waste piles. Specifically, in two waste piles,consisting of treated slag (“Treated Slag Piles”) located within the east and westsides of the Class 2 landfill, Respondent stored waste, a portion of which did notmeet land disposal restriction (“LDR”) universal treatment standards (“UTS”)and/or was characteristically hazardous for lead, without a permit and withoutmeeting the requirements for storage of hazardous waste in a waste pile;

b. Failed to obtain a permit to store hazardous waste. Specifically, Respondentstored super sacks containing waste characteristically hazardous for lead andcadmium in the former Battery Breaker Area, which is not a permitted containerstorage area ("CSA");

c. Failed to limit waste storage and management in a permitted unit to authorized wastes. Specifically, Respondent stored and managed super sacks containing waste characteristically hazardous for lead and/or cadmium in the former BatteryReceiving and Storage Area, which is a permitted CSA but not authorized to storethis particular waste;

d. Failed to label hazardous waste containers with the beginning date ofaccumulation and with the words “Hazardous Waste.” Specifically, Respondentfailed to timely label super sacks containing waste characteristically hazardousfor lead and/or cadmium in the Battery Breaker Area and the Battery Receivingand Storage Area;

e. Failed to obtain a permit or other authorization for disposal and failed to meetthe LDR UTS for hazardous waste. Specifically, on April 11, 2013, Respondentprovided analytical results of samples of treated blast furnace slag disposed of incells 1 through 9 of the Class 2 landfill at the Facility, which included some resultsthat exceeded the Toxicity Characteristic Leaching Procedure (“TCLP”)concentration of 5.0 mg/l for lead and the UTS of 0.75 mg/l for lead; and



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f. Failed to conduct a proper hazardous waste determination or waste classification

and failed to completely characterize waste for the purpose of meeting LDRs.Specifically, Respondent provided analytical results of treated blast furnace slagthat was disposed of in cells 1 through 9 of the Class 2 landfill and placed in theTreated Slag Piles on the east and west sides of the Class 2 landfill that did notconsistently include analyses for cadmium.

4. Respondent received notice of the violations on September 27, 2013.

5. The Facility is located in the portion of Collin County that is an air quality non-attainment area for lead.

6. Site investigations have identified lead as a chemical of concern in Facility soils.

7. The Executive Director recognizes that:

a. On or about December 1, 2012, Respondent began the process ofdecommissioning the Facility. Respondent completed demolition of the lead andlead bearing waste reclamation facility, including the Battery Receiving andStorage Area and the Battery Breaker Area, by August 20, 2013;

b. Respondent shipped all super sacks identified as containing treated blast furnaceslag characteristically hazardous for lead and/or cadmium offsite for treatmentand disposal by March 1, 2013;

c. Respondent appropriately labeled the super sacks by February 14, 2013;

d. On June 10, 2013, Respondent filed a petition for bankruptcy relief pursuant toChapter 11 of the United States Code (“U.S.C.”);

e. Respondent submitted a sampling plan for the Treated Slag Piles on July 3, 2014(such sampling plan, upon approval by the Executive Director, the “Sampling and Analysis Plan”);

f. Based on Respondent’s analysis of certain sample results, some of the waste inthe Treated Slag Piles was removed and disposed of at an authorized facility on orabout March 1, 2012; and

g. Respondent engaged a consultant to conduct an evaluation to assess thefeasibility of and identify potential risks associated with Class 2 landfill closurescenarios and submitted the report by Golder Associates titled Exide Class 2 Landfill Risk Evaluation of Remedial Alternatives, August 2014 to the TCEQ on August 25, 2014 (“Risk Evaluation”).

8. The Class 2 landfill in its entirety is addressed by this Order. Accordingly, OrderingProvision No. 3.a. of TCEQ Agreed Order Docket No. 2011-1712-IHW-E should beterminated.

9. The Risk Evaluation states that the open and capped cells of the Class 2 landfill have acomposite liner consisting of a 60-mil high density polyethylene (“HDPE”) flexiblemembrane liner and 2.5-3.0 feet of compacted clay with a hydraulic conductivity of nomore than 1x10 -7 cm/sec.



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10. The information provided by the Risk Evaluation satisfies the liner criteria for

designation of the Class 2 landfill as a corrective action management unit (“CAMU”).11. The Risk Evaluation states that the Class 2 landfill has a leachate collection system that

is designed to convey leachate to a sump, where it is then pumped to an above groundstorage tank.

12. The information provided by the Risk Evaluation satisfies the leachate collection systemcriteria for designation of the Class 2 landfill as a CAMU.

13. The Risk Evaluation states that cells 1 through 9 have a cap that consists of one foot ofsoil, covered by three feet of compacted clay, covered by a 40-mil HDPE geomembrane,covered by 18 inches of vegetated topsoil.

14. The information regarding the cap on cells 1 through 9 of the Class 2 landfill, as provided by the Risk Evaluation, satisfies the cap criteria for designation of the Class 2 landfill as aCAMU.

15. The Risk Evaluation demonstrates that the concentrations of lead and cadmium in the waste currently located in cells 1 through 12 of the Class 2 landfill are protective ofhuman health and the environment when properly contained in the Class 2 landfill. TheRisk Evaluation further demonstrates the technical impracticability and the elevatedshort-term risk to human health and the environment associated with excavation and re-treatment of the waste currently located in cells 1 through 12 to the standards in 40 Codeof Federal Regulations (“C.F.R.”) § 264.522(e)(4)(iv).

16. The information provided by the Risk Evaluation satisfies the adjusted treatmentstandards for approval of the Class 2 landfill as a CAMU.

17.

The Risk Evaluation considered available remedial alternatives and their impacts tohuman health and the environment and recommends the alternative that poses the leastrisk to human health and the environment, which is that the waste in the Class 2 landfillremain in place.

18. The Executive Director agrees with the conclusions of, and has approved, the RiskEvaluation.

19. Pursuant to its NOR and Permit, Respondent identified itself as a generator of industrialsolid and hazardous waste and an owner/operator of a treatment, storage, or disposalfacility with respect to the Facility.

20. According to reports submitted and the results of samples collected at the Facility therehave been releases of industrial solid and hazardous wastes and/or hazardous

constituents into the environment at the Facility.21. Respondent generated industrial solid and hazardous waste with respect to the Facility.

22. Respondent generated, stored, processed, and/or disposed of industrial solid andhazardous waste at the Facility.

23. Industrial solid and hazardous waste and/or hazardous constituents identified in thereports and sample results associated with the Facility, if not properly managed, maypose an unacceptable risk to human health and/or the environment.



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24. The Risk Evaluation supports the designation of the Class 2 landfill at the Facility as a

CAMU, and such designation is a protective, effective, reliable and cost-effective methodof managing the CAMU-eligible waste that remains at the Facility.

25. The following wastes are CAMU-eligible wastes that are authorized to be contained inthe Class 2 landfill: the treated slag that currently exists in cells 1 through 12, waste inthe Treated Slag Piles that meets Class 2 specifications, the re-treated slag that iscurrently contained in nine roll-off boxes located within the footprint of the Class 2landfill at the Facility, and the Class 2 non-hazardous remediation waste associated withclean-up activities for VCP No. 2541 (J Parcel) and other Class 2 remediation wasteapproved in the Final Closure Plan.

26. The information in the Risk Evaluation provides support for the conclusion that theClass 2 landfill satisfies all applicable regulatory criteria for its designation as a CAMUunder 30 T EX. A DMIN . CODE ch. 335 and 40 C.F.R. § 264.552(c).

II. CONCLUSIONS OF LAW

1. Respondent is subject to the jurisdiction of the TCEQ pursuant to T EX. HEALTH & S AFETYCODE ch. 361 and the rules of the Commission.

2. As evidenced by Finding of Fact No. 3.a., Respondent failed to obtain a permit or otherauthorization and meet the requirements for storage of hazardous waste in waste piles,in violation of 30 T EX. A DMIN . CODE §§ 335.2, 335.43, 335.152(a)(10) and 335.431; 40C.F.R. §§ 264.13, 264.250, 264.251, 264.252, 264.253, 264.254, 264.258, 268.50(a) and268.50(c); and IHW Permit No. 50206, General Facility Standards, C.1.d.

3. As evidenced by Finding of Fact No. 3.b., Respondent failed to obtain a permit or otherauthorization to store hazardous waste, in violation of 30 T EX. A DMIN . CODE §§ 335.2 and335.43; and IHW Permit No. 50206, General Facility Standards, C.1.d.

4. As evidenced by Finding of Fact No. 3.c., Respondent failed to store and manageauthorized waste in a permitted unit, in violation of 30 T EX. A DMIN . CODE § 335.152;and IHW Permit No. 50206, Wastes and Waste Analysis, B.1, B.4 and C.1.f.

5. As evidenced by Finding of Fact No. 3.d., Respondent failed to label hazardous wastecontainers with the beginning date of accumulation and with the words “Hazardous Waste,” in violation of 30

motion for order to ok tceq enforcement

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