This Franchise Agreement ("Franchise Agreement" or "Agreement") is entered into this 22nd day of September, 1993, between the County of El Dorado ("County") and El Dorado Disposal Services, Inc., a California corporation ("Grantee"), for the collection, transportation, and disposal of solid waste.

WHEREAS, the Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 ("AB 939"), has declared that it is within the public interest to authorize and require local agencies to make adequate provisions for Solid Waste handling within their jurisdictions; and

WHEREAS, pursuant to California Public Resources Code Section 40059(a)(1), the Board of Supervisors of the County has determined that the public health, safety and well-being require that an exclusive franchise be awarded to a qualified Solid Waste enterprise for the collection and recovery of Solid Waste from certain residential, industrial and commercial areas in the County; and

WHEREAS, County and Grantee are mindful of the provisions of the laws governing the safe collection, transport, recycling and disposal of Solid Waste, including AB 939, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"); and

WHEREAS, County has not, and, by this Franchise Agreement does not, instruct Grantee on its collection methods, nor supervise the collection of waste; and

WHEREAS, Grantee has represented and warranted to County that it has the experience, responsibility, and qualifications to arrange with residents, commercial, industrial, institutional and other entities in the franchise area for the collection and safe transport to disposal facilities of municipal Solid Wastes, the Board of Supervisors of the County determines and finds that the public interest, health, safety and well-being would be best served if Grantee were to make arrangements with residents and other entities to perform these services; and

WHEREAS, the Board of Supervisors of the County declares its intention of maintaining reasonable rates for collection and transportation of Solid Waste within the area covered by this grant of franchise.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

SECTION 1 - GRANT AND ACCEPTANCE OF EXCLUSIVE RESIDENTIAL AND

COMMERCIAL FRANCHISE

A. County grants to Grantee, for the term of and in accordance with this Franchise Agreement (including all extensions or renewals), an exclusive privilege and duty to make and enter into independent arrangements with residents of Single Family Units, residents and/or owners of Multifamily Units and persons in charge of commercial, industrial, institutional and other entities in the Franchise Area for the collection, transportation and removal to Solid Waste disposal facilities, all residential, industrial and Commercial Solid Waste (including Recyclables and Recyclable Material) generated or accumulated within the Franchise Area which has been placed in an authorized Solid Waste container, in the areas covered by this Franchise Agreement, as shown on Exhibit "A" "FRANCHISE AREA" as its boundaries are now constituted or may hereafter be amended; provided, however, that said franchise shall be a nonexclusive franchise with respect to the collection and transportation of Recyclable Materials that meet the following requirements:

(1) The Recyclable Materials must be generated or accumulated by commercial and/or industrial enterprises or their agents; and

(2) The collector and/or transporter of such Recyclable Materials cannot directly or indirectly impose a fee or charge for such services to the commercial and/or industrial customer or their agents; and

(3) The Recyclable materials must be separated and held in an authorized container on an item by item basis by the applicable commercial and/or industrial enterprise or their agents before transportation and disposal.

Notwithstanding the provisions of subsection (1)-(3) herein, the County retains the right to specify that this franchise shall not be exclusive for such Recyclable Materials generated or accumulated by commercial and/or industrial enterprises or their agents as may be identified by the County from time-to-time as the need arises. The County shall provide the Grantee written notice that the County intends to declare Recyclable Materials to be subject to non-exclusivity, and such non-exclusivity shall not become effective for one-hundred eighty (180) days from the date therein. Within sixty (60) days of the date of the notice, the Grantee may request, and the County shall hold, a public hearing before the Board of Supervisors as to whether the franchise shall remain exclusive as to the Recyclable Materials identified by the County in its notice.

B. Grantee agrees to be bound by and comply with all the requirements of this Franchise Agreement. Grantee waives any right or claim to serve any part of the County under any prior grant of franchise, contract, license or permit issued or granted by any governmental entity.

C. The exclusive privilege granted by this Agreement shall not apply where:

(1) A person handles, hauls, or transports Solid Waste or Recyclables generated by or from his/her own residence or business operations for purposes of disposing of same at an authorized disposal area or transfer station; or

(2) A person or entity contracts for the removal and disposal or recycling of inorganic refuse or garden waste and such removal and disposal or recycling are incidental to work such as remodeling or gardening performed by or for the customer.

D. This Agreement is not intended to and does not affect or limit the right of any person to sell any Recyclable Material to any person lawfully engaged in business in the Franchise Area or to donate Recyclable Material to any bona fide charity, provided that all such Recyclable Material is separated by the generator

Whenever any term used in this Franchise Agreement has been defined by the County Ordinance Code ("County Code") or Division 30, Part 1, Chapter 2 of the California Public Resources Code, the definitions in the County Code or Public Resources Code shall apply unless the term is otherwise defined in this Agreement.

A. AB 939

"AB 939" shall mean the California Integrated Waste Management Act of 1989, as it may be amended from time to time.

B. Affiliates

"Affiliate" means the Grantee, its officers, directors and shareholders and any corporation, partnership, joint venture or other entity directly or indirectly controlling the Contractor or directly or indirectly controlled by the Contractor or its principals.

C. Biomedical Waste.

"Biomedical Waste" means Solid Waste or other materials, substances or items which may be reasonably considered infectious, pathological or biohazardous, originating from hospitals, public or private medical clinics, departments of research laboratories, pharmaceutical industries, blood banks, forensic medical departments, mortuaries, veterinary facilities and other similar facilities and includes (without limitation) equipment, instruments, utensils, fomites, laboratory waste (including pathological specimens and fomites attendant thereto), surgical facilities, equipment, bedding and utensils (including pathological specimens and disposal fomites attendant thereto), sharps (hypodermic needles, syringes, etc.), dialysis unit waste, chemotherapeutic waste, animal carcasses, offal and body parts, biological materials (vaccines, medicines, etc.), and other similar materials, but excluding any such waste which is determined by evidence reasonably satisfactory to the Grantee to have been rendered non-infectious, non-pathological and non-biohazardous.

D. Bulky Waste

"Bulky Waste" means large items of Solid Waste such as appliances, furniture, large auto parts, trees, branches, stumps and other oversize wastes.

E. Commercial Solid Waste.

"Commercial Solid Waste" includes all types of Solid Wastes generated by commercial, industrial, governmental and other sources which have been placed in an authorized Solid Waste container used for the temporary storage of Solid Waste awaiting pickup. The term "Commercial Solid Waste" does not include hazardous wastes, except household hazardous waste inadvertently commingled with Solid Waste, generated by commercial, industrial, governmental and other sources and which are placed in separate containers and which are covered by hazardous waste manifests.

F. Franchise Area.

"Franchise Area" shall mean the boundaries of the Franchise Area together with all amendments and changes thereto resulting from binding amendments to this agreement or resulting from the incorporation of a city or annexation by a city of portions of the unincorporated area within the Franchise Area. The current boundaries of the Franchise Area are shown by maps incorporated herein by reference and which are on file in the office of the clerk of the Board of Supervisors.

G. Franchise Fee.

"Franchise Fee" means the fee or assessment imposed by the County on Grantee solely because of its status as party to this Franchise Agreement, and which, inter alia, is intended to compensate County for its expenses in administering this Franchise Agreement and to fund other waste management activities.

H. Grantee.

"Grantee" shall mean the entity granted the Franchise to arrange for the collection of solid wastes pursuant to this Franchise Agreement. Grantee shall also mean any assignee, transferee or successor in interest of Grantee.

I. Gross Revenues.

"Gross Revenues" means any and all revenue or compensation in any form derived directly or indirectly by Grantee, its affiliates, subsidiaries, parents or entity in which Grantee has a financial interest, in collecting, transporting, arranging, handling and/or disposing of Solid Wastes generated in the Franchise Area pursuant to this Franchise Agreement.

J. Hazardous Waste or Materials.

(1) "Hazardous Waste or Materials" means any and all of the following:

(a) wastes, materials or substances defined or characterized as hazardous waste by the Federal Solid Waste Disposal Act, as amended, including the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.) as amended from time to time, or regulations promulgated thereunder;

(b) waste, materials or substances defined or characterized from time to time as hazardous waste by the principal agencies of the State of California (including without limitation the Department of Health Services, the California Water Resources Control Board, and the California Integrated Waste Management Board) having jurisdiction over hazardous waste generated by facilities within the State, and pursuant to any other applicable government regulations;

(c) wastes, materials or substances, the storage, treatment, transportation or disposal of which is subject to regulation under the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2654, as amended from time to time, or regulations promulgated thereunder;

(d) radioactive wastes, materials, substances or items, the storage, treatment, transportation or disposal of which is subject to government regulations; and

(e) wastes, materials, substances or items which contain polychlorinated biphenyls.

The term "Hazardous Waste" will be construed to have the broader, more encompassing definition where a conflict exists in the definitions employed by two or more governmental entities having concurrent or overlapping jurisdiction over Hazardous Waste.

K. Industrial Solid Waste.

"Industrial Solid Waste" means all Solid Waste and semi-solid waste which results from industrial processes and manufacturing operations.

L. Multi-Family Units.

"Multi-Family Units" shall mean a dwelling which includes two or more individual living units and which receives communal refuse and/or recycling services.

M. Recyclables or Recyclable Material.

"Recyclables or Recyclable Material" means materials which are reused or processed or are in the future reused or processed into a form suitable for reuse through reprocessing or remanufacture, consistent with the requirements of the California Integrated Waste Management Act. The term "Recyclables or Recyclable Material" includes transformable and compostable materials. The term "Recyclables or Recyclable Material" includes paper, newsprint, printed matter, pasteboard, paper containers, cardboard, glass, aluminum, PET, HDPE, and other plastics, beverage containers, compostable materials, used motor oil, automotive batteries, anti-freeze, latex paint, brick and stone in reusable size and condition, and such other materials designated by the Director of Environmental Management, or designated as Recyclables by the California Integrated Waste Management Board, or other agency with jurisdiction.

N. Residential Solid Waste

"Residential Solid Waste" means all types of Solid Waste which originate from Single-Family Units.

O. Single-Family Unit

"Single-Family Unit" means a dwelling which receives individual refuse and/or curbside recycling service.

P. Solid Waste.

"Solid Waste" means all putrescible and nonputrescible solid, semi-solid, and liquid wastes, including residential, industrial, commercial and municipal garbage, trash, refuse, paper, rubbish, ashes, industrial wastes, demolition and construction wastes, discarded home and industrial appliances, manure, vegetable or animal solid and semi-solid wastes, and other discarded solid and semi-solid wastes.

Q. Special Wastes

"Special Wastes" shall mean any designated wastes, as defined in 23 Cal. Code of Regs. §2522, and special handling waste generated by industrial facilities or processes, but shall not include "hazardous waste" as defined herein. Special wastes shall include: asbestos, sewage sludge, water treatment sludge, drilling muds, greasewastes, contaminated soils, shredder waste, agricultural wastes, filter cake/dewatered sludge, scrap metal, spent catalyst fines, refinery ash and byproducts; except where any such wastes are deemed to be hazardous waste.

Grantee shall pay to County a Franchise Fee set by Board of Supervisors resolution, which said fee shall be a percentage of the Gross Revenues derived by Grantee from operations pursuant to this Franchise Agreement. However, such Gross Revenues shall not include revenues received by Grantee or any of its Affiliates from operations not conducted pursuant to this Franchise Agreement, including but not limited to operations at the Union Mine Landfill, operations pursuant to the Materials Recovery Facility Franchise and Service Agreement, and revenues derived solely from the passive investment of Grantee's prior earnings. The Franchise Fee is initially set at five percent (5%) of Gross Revenues, and from time to time may be adjusted by the Board of Supervisors. The Franchise Fee shall be due and payable quarterly within twenty (45) days following the end of each quarter. If payment is not received within said forty five (45) day period, interest shall accrue thereon at the maximum interest rate permitted under California law, but not to exceed ten percent per annum. County shall give Grantee a minimum of ninety (90) days notice of any changes in the Franchise Fee.

Grantee warrants that it will comply with all applicable federal and state laws legally binding on Grantee in effect during the term of this Agreement, including implementing regulations, as they may, from time to time, be amended, specifically including, but not limited to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., the California Integrated Waste Management Act of 1989, and all other applicable laws of the State of California. Moreover, Grantee shall comply with all local laws and regulations applicable to Grantee to the extent they are not inconsistent with the terms of this Franchise Agreement. Grantee shall comply with all final and binding judgments entered against Grantee regarding its services performed under this Agreement.

A. Franchise Area Defined

The Franchise Area granted by this Franchise Agreement shall be all residential, commercial and industrial areas within the boundaries of the County as they exist on the effective date of this Franchise Agreement, as identified in Exhibit "A", "Franchise Area" to this Franchise Agreement, and as they may hereafter be changed by reason of annexation or deannexation; provided, however, the County shall neither deannex nor reduce the Franchise Area as such Franchise Area is identified in Exhibit A on the date of the execution of this Agreement.

B. Annexation or Later Incorporated Areas Deleted From Existing Franchise

Territory annexed to a City or which is later incorporated as a City that is covered by this Franchise Agreement shall be deleted from the Franchise Area granted by this Franchise Agreement.

A. County to Approve all Services.

The nature of the services Grantee offers and provides to customers residing or doing business in the Franchise Area shall be determined by the Board of Supervisors. The Board of Supervisors may change the level of such services from time to time on reasonable notice to Grantee, provided that the Board of Supervisors may adjust Grantee's rates to reflect the change in service levels. The services that Grantee offers and provides to its customers affected by this Franchise Agreement shall be subject to the prior approval of the Board of Supervisors or its designee. Nothing in this Agreement, however, shall be construed or interpreted as authorizing the County to reduce or adversely affect Grantee's exclusive Franchise rights as specified in Section 1.A. of this Agreement.

(1) The services that the Grantee currently provides to its customers under this Franchise Agreement are set forth in Exhibit "B" attached hereto and made a part hereof by this reference.

B. Once a Week Service

In order to protect the public health and safety, arrangements made by Grantee with its customers in the Franchise Area for the collection of Solid Waste not defined in the Franchise Agreement as Recyclable Material, shall provide for the collection of such waste generated or accumulated in residential, commercial, and industrial premises within the Franchise Area at least once per week, or more frequently, as Grantee and its customers may agree.

(1) Single-Family Units

The Grantee shall collect from Single-Family Units Solid Waste (except Bulky Wastes and Special Wastes) which have been placed, kept or accumulated in authorized Solid Waste containers, or bags or bundles, at curbside or other authorized collection station(s) prior to Grantee's normal weekly collection time.

(2) Multi-Family Units

Grantee shall empty all multi-family authorized Solid Waste containers not less often than once per week, and more frequently if required to handle the Multi-Family Unit waste stream of the premises where the containers are located, in a manner consistent with public health and safety.

C. Hours of Collection

Grantee agrees that, in order to protect the peace and quiet of residents, its arrangements for the collection of Solid Waste will provide that collections for residential and commercial areas shall not start before 4 a.m. or continue after 7 p.m., seven (7) days per week. Grantee agrees to reasonably adjust the hours of commencement of collection operations in selected areas at the request of County where early collection activities have generated numerous complaints from nearby residents.

D. Collection on Holidays

Grantee has informed County that Grantee's arrangements with its Solid Waste customers will provide that if the day of collection on any given route falls on a legal holiday, i.e., New Year's Day, or Christmas Day, observed by the materials recovery facility, landfill or other lawful disposal site to which Solid Waste collected within the Franchise Area is taken for disposal, Grantee shall provide collection service for such route on the work day next following such Holiday and shall not provide collection service on such Holiday, and all subsequent collection days during that Holiday week shall be moved back one day in the discretion of Grantee.

E. Biomedical, Hazardous and Special Wastes.

Grantee shall have the non-exclusive right under this franchise, but is not obligated to, collect, transport and dispose of material defined as Biomedical Waste and Special Waste herein. Grantee shall negotiate separate contracts and rates for Special Waste collection with each individual customer, which rates shall not require advance County approval but may be reviewed by the County in its discretion at the request of any Special Waste customer. All revenues received by Grantee for the collection, transport and disposal of Hazardous and Special Waste shall be included in Grantee's gross revenues for purposes of calculating Grantee's Franchise Fee to the County. County reserves the right to franchise other parties to perform Biomedical, Hazardous and Special Waste handling services.

F. Pick-Up of Illegally Dumped Waste

Grantee agrees to provide on-demand pick-up of illegally-dumped Solid Waste at County's request, except where it is economically or technically infeasible to do so. Grantee shall provide this service within two (2) calendar days of County's request. Grantee's reasonable costs of picking up and disposing of such waste shall be included within Grantee's rate base for rate setting purposes.

A. County May Control Wastestream.

The Parties hereto agree that under this Franchise Agreement the County has the right, at its option, to own and/or control the collection, disposal and diversion of all Solid Waste, including Recyclables, generated within the Franchise Area ("wastestream"). As part of the rights agreed to herein, the Parties hereto agree that: (i) the County has the right to direct the wastestream to be disposed of or diverted at any Solid Waste facility or in any manner, respectively, the County may designate; (ii) the County has the right to market and process Recyclables, and (iii) the County has the right to direct the wastestream to be disposed of or diverted at any transfer or processing station the County may designate.

B. County's Jurisdiction.

The parties hereto agree that County currently has jurisdiction to regulate the collection, removal, handling and disposal of all Solid Wastes generated in the Franchise Area. The intent of this Agreement is to regulate residential, commercial and industrial Solid Waste handling service. However, this Agreement does not regulate the collection, removal and disposal of Biomedical Waste, Hazardous Waste, grease or septage, irrespective of origin.

(1) Throughout the term of this Agreement, unless the County gives notice as provided for herein and subject to the terms of this Agreement, it shall be the Grantee's sole responsibility and duty to dispose of the Solid Waste collected by virtue of this Agreement and do so in a safe manner and in compliance with all federal, state and, to the extent not inconsistent with this Agreement, local laws and regulations. In this connection, the Grantee agrees that it shall dispose of all Solid Waste collected in the Franchise Area at a Solid Waste facility that is fully licensed and appropriately permitted and, to Grantee's knowledge, is not in material violation of any health, safety or hazardous materials laws, rules, regulations or orders.

(2) County shall be entitled to receive or to direct to a third party (i.e., the right of salvage) the Recyclables collected by Grantee under this Agreement, but at its sole discretion may delegate this right to, or waive the same in favor of, the Grantee. Grantee shall not be required by County to deliver Recyclables to any location which is an unreasonable distance from Grantee's Franchise Area. By entering into this Agreement, the County has temporarily waived its right to salvage and has delegated such to the Grantee; and such waiver and delegation shall continue until notice in writing by the County to the contrary is given. In the event the County independently wishes to exercise its right to salvage, the County shall give in writing to Grantee the notice of its intent and said right shall commence and accrue to the County ninety (90) days from the date of said notice. The salvage rights set forth in this Section specifically are intended to refer to salvage operations once the Solid Waste is placed by the generator in the waste stream.

C. Rights Reserved as to Biomedical, Hazardous Wastes and Special Wastes.

The County reserves the right to contract with other parties to have Biomedical, Hazardous and Special Wastes collected, transported, disposed of, processed and/or diverted.

A. Cash Bond

Contemporaneously with the execution of this Franchise Agreement, the Grantee shall deposit a cash bond in the sum of Fifty Thousand Dollars ($50,000.00) in an interest bearing account. The cash bond shall be increased to Seventy Five Thousand Dollars ($75,000.00) effective January 1, 2003. The cash bond shall be on terms acceptable to the County Counsel. The cash bond shall serve as security for the faithful performance by Grantee of all the provisions and obligations of this Franchise Agreement. All interest shall be paid to the Grantee.

(1) After thirty (30) days following Grantee's failure to pay the County an amount owing under this Franchise Agreement plus interest at the rate of ten percent (10%) per annum, the cash bond may be assessed by the County upon five (5) days' prior written notice to the Grantee for purposes including, but not limited to:

(a) Failure of Grantee to pay the County sums due under the terms of the Franchise Agreement;

(b) Reimbursement of costs borne by the County to correct Franchise Agreement violations not corrected by Grantee, after due notice; and

(c) Monetary remedies or damages assessed against Grantee due to breach of Franchise Agreement.

(2) The Grantee shall deposit a sum of money sufficient to restore the cash bond to the original amount within thirty (30) days after notice from the County that any amount has been withdrawn from the cash bond.

B. Insurance Coverage

Contemporaneously with the execution of this Franchise Agreement, the Grantee shall deposit copies of insurance policies or endorsements evidencing the existence of policies of insurance required pursuant to this Franchise Agreement.

A. The term of this Franchise Agreement shall commence immediately upon execution and terminate on December 31, 2012; provided, however, that this Franchise Agreement is subject to the condition subsequent that the Contractor under the Materials Recovery Facility Franchise and Service Agreement (which is an affiliate of Grantee) shall at all times have exercised all reasonable due diligence and best efforts in attempting to permit, construct and commence commercial operation of the Materials Recovery Facility. Should Contractor fail to do so, then at County's election, this Franchise Agreement shall terminate, and Grantee shall be subject to the terms and conditions of the Franchise Agreement in effect immediately prior to the execution hereof.

A. The franchise granted by this Franchise Agreement shall not be transferred, sold, hypothecated, sublet or assigned, nor shall any of the rights or privileges herein be hypothecated, leased, assigned, sold or transferred, either in whole or in part, nor shall title thereto, either legal or equitable, or any right, interest or property therein, pass to or vest in any person, except the Grantee, by act of the Grantee, without the prior written consent of the County expressed by resolution. Any attempt by Grantee to assign this franchise without the consent of County shall be void.

B. The County shall not unreasonably delay or withhold its consent to a transfer of the franchise granted by this Franchise Agreement to other residents of El Dorado County or to another legal entity owned and controlled by such residents. The County may impose reasonable conditions of approval on any Franchise Agreement transfer. Grantee acknowledges that the County is granting this franchise extension to Grantee in an effort to maintain local ownership and control of Solid Waste handling services in El Dorado County, and that the County may refuse, without further reason or justification, the requested transfer or assignment of this Agreement to persons who are not residents of this County or to entities owned by such non-local residents.

C. The term assignment shall include any dissolution, merger, consolidation or other reorganization of the Grantee, which results in change of control of the Grantee, or the sale or other transfer of a controlling percentage of Grantee's capital stock to a person not a shareholder, immediate family member, management employee or principal of the Grantee or to an Affiliate on the date of the execution of this Agreement.

D. County consent is required for any change in control of Grantee. "Change in control" shall mean any sale, transfer or acquisition of Grantee. If Grantee is a corporation, any acquisition of more than ten percent (10%) of Grantee's voting stock by a person, or group of persons acting in concert, who already owns less than 50% of the voting stock, shall be deemed a change in control; provided, however, any transfer of ownership of any or all of the stock of Grantee to an immediate family member, management, employees or principal of the Grantee or to a wholly-owned subsidiary of El Dorado Disposal Service, Inc. shall not constitute a change in ownership.

E. Any change in control of the Grantee occurring without prior County approval shall constitute a material breach of this Franchise Agreement.

F. In the event the Grantee herein attempts to assign or subcontract this agreement or any part hereof or any obligation hereunder, the County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding.

G. Notwithstanding any other provision in this Section, Grantee or its shareholders may, without consent of the County, transfer ownership of Grantee's capital stock to an Employee Stock Option Plan (ESOP) or to current management employees of Grantee or to members of the immediate family of the shareholders of Grantee.

H. Each or any of the following acts shall be considered an involuntary assignment providing the County with the right to elect to terminate the agreement forthwith, without suit or other proceeding:

(1) If Grantee is or becomes insolvent, or makes an assignment for the benefit of creditors;

(2) If Writ of Attachment or Execution is levied on this agreement or other property of Grantee such that would affect Grantee's ability to perform its duties and obligations under this agreement;

(3) If in any proceeding to which Grantee is a party, a Receiver is appointed with authority to take possession of Grantee's property such that would affect Grantee's ability to perform its duties and obligations under this agreement;

I. The County's consent to an assignment or change of control may be withheld if inter alia, the following conditions are not satisfied:

(1) The Grantee shall give the County at least ninety (90) days advance, written notice of the Grantee's intent to sell, transfer or assign this Agreement. As part of that notice, the Grantee shall provide to the County the following written information:

(a) The name, address and telephone number of the proposed assignee.

(b) The character of the legal entity owning or controlling the assignee, and the names, addresses and telephone numbers of all principals, partners, and/or shareholders thereof, as the case may be.

(c) A copy of any and all purchase and assignment agreements containing, at a minimum, the terms and conditions of the sale, transfer or assignment of this Agreement and of Grantee's Solid Waste and recycling business; provided, however, that the dollar amount of any financial consideration may be deleted from said copies unless and until said information becomes relevant to the review of Grantee's transferee's rates under this Franchise Agreement. Further, however, that nothing in this Franchise Agreement shall obligate County to treat any of said acquisition costs as an allowance expense of said transferee for rate setting purposes.

(2) The proposed transferee must be shown, by credible and sufficient evidence, to be qualified, by financial condition, background and experience to be able to fully assume and satisfactorily perform all of the Grantee's obligations hereunder, and, particularly, to be able to perform under this agreement in a fashion that will assure the County of complying with AB 939 and its SRRE.

(3) The Grantee cannot be in default under any of the material terms and conditions hereof.

(4) The transferee must be willing to, in writing, assume all of the obligations hereunder.

A. Any application for a franchise transfer shall be made in a manner prescribed by the Director of Environmental Management or his successor. The application shall include a transfer fee in an amount to be set by County by Resolution of the Board of Supervisors, to cover the anticipated cost of all direct administrative expenses of County, including consultants and attorneys, necessary to adequately analyze the application and to reimburse County for all direct and indirect expenses. Such transfer fee shall not exceed Ten Thousand Dollars ($10,000.00). County's request for reimbursement shall be supported with evidence of the expense or cost incurred. The applicant shall pay such bills within thirty (30) days of receipt.

B. These franchise transfer fees are over and above any Franchise Fees specified in this Franchise Agreement and shall not be recoverable costs for rate setting purposes.

Each of the following shall constitute a material breach of this Franchise Agreement on the part of the Grantee:

A. The material failure or refusal of Grantee to comply with the obligations and duties imposed on Grantee pursuant to this Franchise Agreement. In the event of any material breach of any of the terms of this Franchise Agreement by Grantee as described in this section, County and Grantee shall meet and confer in good faith in an effort to agree on a resolution and cure of the breach. If the parties are unable to agree on the informal resolution or cure of the breach, County shall have the right to terminate this Franchise Agreement if:

(i) the County shall have given prior written notice to the Grantee specifying that a particular default or defaults exist which will, unless corrected, constitute a material breach of this Franchise Agreement on the part of the Grantee, and

(ii) the Grantee has not corrected such default or has not taken reasonable steps to commence to correct the same within thirty (30) days from the date of the notice given pursuant to clause (A) (i) of this section or thereafter does not diligently continue to take reasonable steps to correct such default.

B. The Grantee (i) being or becoming insolvent or bankrupt or ceasing to pay its debts as they mature or making an arrangement with or for the benefit of its creditors or consenting to or acquiescing in the appointment of a receiver, trustee or liquidator for a substantial part of its property, or (ii) being or becoming a party to a voluntary or involuntary bankruptcy, winding up, reorganization, insolvency, arrangement or similar proceeding instituted by or against the Grantee under the laws of any jurisdiction, which proceeding, if involuntary in nature, has not been dismissed within sixty (60) Days, or (iii) taking any action approving of, consenting to, or acquiescing in, any such proceeding, or (iv) being a party to the levy of any distress, execution or attachment upon the property of the Grantee which shall substantially interfere with the Grantee's performance hereunder. In the event of the Grantee being or becoming insolvent or bankrupt, the Grantee shall (i) assume or reject this Agreement within sixty (60) days after the order for relief; (ii) promptly cure any failure to perform its obligations or any event of default arising under this Agreement for reasons other than the event set forth in this paragraph; and (iii) provide adequate assurance of future performance under this Agreement under 11 USC Section 365(b)(1)(c), or any successor provision of the Federal Bankruptcy Code. The foregoing provisions shall not prevent the County from requesting such other conditions to assumption of this Agreement, as it deems reasonable and necessary.

C. Any waiver of a breach shall not be deemed to be a waiver of any subsequent breach or to be construed as approval of a course of conduct.

D. Upon the occurrence of a material breach and the declaration of termination of this Agreement by the Board of Supervisors, this Agreement and the franchise granted thereunder shall be of no further force and effect, excepting those provisions concerning County's right to indemnity and to temporarily assume Grantee's obligations. County then shall be free to enter into whatever other arrangements are deemed justified and necessary for the collection, removal and disposal of Solid Waste within the Franchise Area.

A. Should Grantee, for any reason whatsoever, except the occurrence or existence of any of the events or conditions set forth in Section 27.A., "Force Majeure," below, refuse or be unable to collect, transport and dispose of any or all the Solid Waste which it is obligated under this Franchise Agreement to collect, transport and dispose of for a period of more than seventy-two (72) hours, and if as a result thereof, Solid Waste should accumulate in County to such an extent, in such a manner, or for such a time that the Director of Environmental Management in the exercise of his sole discretion, should find that such accumulation endangers or menaces the public health, safety or welfare, then in such event County shall have the right, upon twenty-four (24) hour prior written notice to Grantee, during the period of such emergency, to contract on a temporary basis with third parties to collect and transport any and all Solid Waste which Grantee would otherwise be obligated to collect and transport pursuant to this Franchise Agreement.

B. Grantee agrees that in such event it will fully cooperate with County and its third-party contractor to effect such a transfer of operations in as smooth and efficient a fashion as is practicable.

C. All costs, fees, rates and other expenses incurred by the County and/or its third-party contractor that exceed those in effect or being incurred or which would have been incurred had no such emergency arisen shall be the responsibility of the Grantee and shall be paid to the County within 30 days of Grantee's receipt of written notice to so pay.

A. Grantee shall use all reasonable efforts to observe and protect the rights of privacy of customers. Information identifying individual customers, or the composition or contents of a customer's refuse or Recyclables shall not be revealed to any person, private agency or company, unless upon the request of federal or state law enforcement personnel, the authority of a court of law, by statute, or upon valid authorization of the customer. This provision shall not be construed to preclude Grantee from preparing, participating in, or assisting in the preparation of waste characterization studies or waste stream analyses which may be required by AB 939 or any other reports requested by the County under the Franchise Agreement or required or requested by any governmental agency.

B. Grantee shall not market or distribute outside the normal course of its business, mailing lists with the names and addresses of customers.

A. Grantee shall maintain a proper set of books and records on an accrual basis, and an annual audited financial statement, in accordance with generally accepted accounting principles, accurately reflecting the business done by it under this Agreement.

B. Grantee shall maintain all records relating to the services provided hereunder, including, but not limited to, customer lists, billing records, maps, AB 939 records, and customer complaints, for a period of five (5) years from the date of the generation of each such record. The County or its agent(s) shall have the right, upon ten (10) business days' advance notice, to inspect all maps, AB 939 records, Grantee's books and records, customer complaints, and other like materials of the Grantee which reasonably relate to Grantee's compliance with the provisions of the Franchise Agreement. Such records shall be made available to County at Grantee's regular place of business, but in no event outside the County of El Dorado. Grantee shall further maintain and make available to County, records as to number of customers, total and by type, route maps/route listings, service records and other materials and operating statistics in such manner and with such detail as County may require. County shall treat the information required by this paragraph that affects the competitive position of the Grantee as confidential information to the extent permitted by law. County shall not make or retain copies or photocopies containing information set forth in Grantee's confidential financial and business records pertaining to the establishment of rates and payment of franchise fees without executing a Confidentiality Agreement providing that County shall hold and keep such copies and photocopies confidential. The Confidentiality Agreement shall be negotiated in good faith between the County ad Grantee and commemorated in a separate legally binding document prior to any subsequent rate increase.

C. Should any examination or audit of Grantee's records reveal an underpayment of any fee required under this Franchise Agreement, the amount of such underpayment shall become due and payable to County not later than thirty (30) days after written notice of such underpayment is sent to Grantee by County. Should an underpayment of more than two percent (2%) be discovered, Grantee shall bear the entire cost of the County's audit or examination and said cost shall not be recoverable through rate setting.

D. (1) The information required by this section shall pertain to Grantee's operations covered and regulated by this Agreement, and nothing contained herein shall require the Grantee to provide the County with information pertaining to the Grantee's operations which are not regulated by the County, except in conformance with this Section.

(2) The County and/or its agents may examine Grantee's books, records and financial statements pertaining to operations not regulated by the County for the sole purpose of gathering information necessary to allow the agents to ascertain whether income, expenses, assets and liabilities are reasonably and consistently allocated among operations regulated by County and those not regulated by the County. Grantee shall obtain County's written approval of its method of segregating its financial records between County-regulated and non-County regulated operations.

(3) Information gained from examination of records pertaining to operations not regulated by the County shall be treated by the County and its agents as confidential information.

(4) For review of books and other financial records necessary to verify the Grantee's income, expenses, assets and liabilities, "Agent" shall mean an independent Certified Public Accountant or public accountancy firm or designated County employee. For all other information or records, including the results of financial verification, "Agency" shall mean any consultant designated by the County or County employees.

E. Nothing in this section will prevent County from allowing public access to County records as provided for under the California Government Code, and in the event any dispute arises as to the public access to information provided by Grantee under the terms of this Agreement, the County shall in its discretion provide public access to said information according to law or tender the defense of any claims made against the County concerning said information to Grantee. Prior to releasing any information pursuant to this paragraph, County shall make a good faith effort to notify Grantee of the intended release.

F. Upon reasonable notice or as otherwise agreed herein, and at those times designated by the County, Grantee shall supply to the County lists of the names of all customers of Grantee who are provided any service by Grantee within the Franchise Area. At the same or other time, the County may request and the Grantee shall provide information specifying each customer's address, type of service provided to that customer, the number and type of authorized Solid Waste containers used by or provided to each customer, whether and which customers are believed to be violating this Agreement, any mandatory subscription ordinance or any other provision of the law, and any other information that the County determines, in its sound discretion, reasonably required to monitor implementation of this Agreement and/or discharge the County's responsibilities under the law.

A. Annual Reports

Within one hundred twenty (120) days after the close of Grantee's fiscal year (Grantee's fiscal year ends on June 30th of each year), Grantee shall submit to the County a written annual report, in a form approved by the County, including, but not limited to, the following information:

(1) A summary of the previous year's (or, in the case of the initial year, the initial year's) activities including, but not limited to, services begun or discontinued during the reporting year, and the number of customers for each class and level of service;

(2) A revenue statement, setting forth quarterly Franchise Fees, and the basis for the calculation thereof, certified under penalty of perjury by an officer of Grantee; and

(3) A list of Grantee's officers and members of its board of directors.

B. Adverse Information

Grantee shall provide County two copies of all reports, or other material adversely reflecting on Grantee's performance under this Franchise Agreement, submitted by Grantee to the California or U. S. EPA, the California Integrated Waste Management Board or any other federal, state or county agency. Copies shall be submitted to County simultaneously with Grantee's filing of such matters with said agencies. Grantee's routine correspondence to said agencies need not be automatically submitted to County, but shall be made available to County upon written request, as provided in Section 16.

(1) The Grantee shall submit to County copies of all pleadings, applications, notifications, communications and documents of any kind, submitted by the Grantee to, as well as copies of all decisions, correspondence and actions by, any federal, state and local courts, regulatory agencies and other government bodies relating specifically to all material aspects of Grantee's performance of services pursuant to this Franchise Agreement. Any data which the Grantee seeks to be excluded from provisions of the California Public Records Act shall be clearly identified as such by Grantee with the basis for such exclusion clearly specified. In the event County receives a request under the Public Records Act, or by subpoena, the County shall notify Grantee to permit Grantee to object to the release of the information requested or subpoenaed.

(2) Grantee shall submit to the County such other information or reports in such forms and at such times as the County may reasonably request or require.

(3) All reports and records required under this or any other section shall be furnished by the Grantee and the expense therefore in the gathering and preparation of such information, reports and records shall be included in the rate base.

C. AB 939 Requirements

During the term of this Franchise Agreement, Grantee shall submit to County quarterly, and more often if required by law, information reasonably required by County to meet its reporting obligations imposed by AB 939, and the regulations implementing AB 939, in a manner approved by County. Grantee agrees to submit such reports and information on computer disks, or by modem, in format compatible with County's computers if requested by County. Grantee agrees to render all reasonable cooperation and assistance to the County in meeting the requirements of County's Source Reduction and Recycling Element and Non-Disposal Facility Element.

D. Waste Audits

(1) Grantee shall conduct waste audits at the request of County where such waste audits are necessary to enable County to comply with the requirements of federal or State law.

(2) The results of such audits will be memorialized on forms either designed or approved by the County.

(3) The purpose of the audit will be to identify volume and characteristics of Solid Waste being generated by the customer.

(4) A copy of the audit shall be provided by the Grantee to: the customer, the County and to Grantee's own files.

E. Failure to Report

The refusal, failure or neglect of the Grantee to file any of the reports required, or to provide material information to County, or the intentional inclusion of any materially false or misleading statement or representation made knowingly by the Grantee shall be deemed a material breach of the Franchise Agreement, and shall subject the Grantee to all remedies, legal or equitable, which are available to the County under the Franchise Agreement.

A. From time to time, at its sole discretion, County may examine Grantee's operation in order to evaluate whether or not the Grantee is operating at a satisfactory level of efficiency and customer satisfaction.

Grantee agrees to cooperate in any such examination and shall permit County representatives to inspect, at Grantee's principal place of business, such information pertaining to Grantee's obligations hereunder as County may require, including, but not limited to, such things as customer inquiry records, collection routes and equipment records. Access to Grantee's records shall be subject to Section 16.

B. At County's sole option, within ninety (90) days of the first anniversary of the effective date of this Franchise Agreement, and each year thereafter throughout the term of the Franchise Agreement, County may hold a public hearing at which the Grantee shall be present and shall participate, to review the Grantee's performance and quality of service. The reports required by this Franchise Agreement regarding customer complaints shall be utilized as the basis for review. In addition, any customer may submit comments or complaints during the review meetings, either orally or in writing, and these shall be considered.

C. Within thirty (30) days after the conclusion of the public hearing, County shall issue a report with respect to the adequacy of performance and quality of service. If any noncompliance with the Franchise is found, County may direct Grantee to correct the inadequacies or initiate proceedings in accordance with Section 13 above.

D. (1) Grantee shall provide prompt, efficient, continuous and professional service to its customers.

(2) Upon the request of the County, as part of the Annual Review of Performance described above, and/or not less than six (6) months prior to Grantee's notice of contract renewal, assignment or extension of term, Grantee shall conduct a survey or surveys of all customers to determine their satisfaction with Grantee's service, including, without limitation, response to customer complaints. The survey methodology, format and content shall be subject to the prior review and approval of the Director of Environmental Management. A copy of the survey results shall be sent to the County within sixty (60) days of completion of the survey. Nothing in this paragraph shall limit the right of the County to conduct additional surveys. The Grantee shall reasonably cooperate with the County in such cases.

(3) Upon initiation of service, and at least once a year, Grantee shall send or deliver to its customers information concerning the conditions of service, including, but not limited to, rates, fees, charges, service options, payment options, discounts (if any), days of collections, the amount and manner of refuse to be collected, service level and inquiry/complaint procedures, including the name, address and local telephone number of Grantee. The form and content shall be subject to the review and approval of the Director of Environmental Management.

To provide for technological, economic, and regulatory changes in Solid Waste collection, to facilitate renewal producers, to promote competition in the Solid Waste industry, and to achieve a continuing, advanced Solid Waste collection system, the following system and services review procedures are hereby established.

A. At County's sole option, County may hold a public hearing on or about the first anniversary date of the Franchise Agreement in which it reviews the collection systems and services. Subsequent system and services review hearings may be scheduled by County each two (2) years thereafter. It is County's intent to conduct any system and services review concurrently with any Annual Review of Performance and Quality of Service as provided for in Section 18, above.

B. Sixty (60) days after receiving notice from the County, Grantee shall submit a report to County indicating the following:

(1) All Solid Waste collection and recycling services reported in Solid Waste collection and recycling industry trade journals that are being commonly provided on an operational basis, excluding tests and demonstrations, to communities in the United States with comparable populations, that are not provided by Grantee to County; and

(2) Changes recommended to improve the County's ability to meet the goals of AB 939; and

(3) Any specific plans for provision of such new services by the Grantee along with the estimated expenses and adjustments to rates necessary to compensate Grantee for providing such services, or a justification indicating why Grantee believes that such services are not feasible for the franchise area.

C. Topics for discussion and review at the system and services review hearing shall include, but shall not be limited to, services provided, customer complaints, rights of privacy, amendments to the Franchise Agreement, developments in the law, new initiatives for meeting or exceeding AB 939's goals and regulatory constraints.

D. County and the Grantee may each select additional topics for discussion at any system and services review hearing. The Grantee agrees to cooperate in any such examination and shall provide for inspection to the County or its designated representatives, at the Grantee's principal place of business, such information as the County may require, including but not limited to, such things as collection routes and equipment records.

E. After the conclusion of each system and services review hearing, County may issue a report. The report shall summarize the systems and services review hearing and address services not being provided to County that are considered technically economically feasible by County. County may require Grantee to provide such services within a reasonable time, for reasonable rates and compensation.

A. Grantee Rates

Grantee shall provide the services described in this Franchise Agreement for the rates specified in Exhibit "B". Said rates shall be subject to the following conditions.

(1) Effective Date

The rates specified in Exhibit "B" shall be effective as of the date of execution of this Agreement.

(2) County's Powers

The Board of Supervisors shall set and regulate all rates and charges assessed by Grantee for any and all services and activities it performs or engages in the Franchise Area pursuant to this Franchise Agreement. If the Board of Supervisors determines to regulate the rates of only some of Grantee's services and activities, that shall not be construed as a waiver of the County's rights to regulate the rates or charges assessed by Grantee for services not so regulated.

B. Time for Rate Settings and Rate Setting Standard.

The Board of Supervisors shall set the rates to be charged by Grantee as such times as the Board deems appropriate, but no less often than every two years, unless a longer period is agreed on by the County and Grantee. In addition, the Board of Supervisors shall consider revising Grantee's rates whenever Grantee establishes to the satisfaction of the Board that unforeseen circumstances have arisen which have materially affected the Grantee's costs or revenues under this Franchise Agreement. The Grantee shall provide written notice to each ratepayer in a form approved by the County of the time, date and place of each hearing set by the Board of Supervisors to set rates. Grantee shall provide said notice at least ten (10) but no more than sixty (60) days prior to such date, and the expense therefor shall be included in the rate base.

The Board of Supervisors shall set new rates based on the estimated future Gross Revenues to be derived by Grantee for the period of time to be covered by the new rates, and on Grantee's estimated costs based on Grantee's past operating experience. The Board of Supervisors, in exercising its discretion in setting the rates to be charged by Grantee, shall be governed by the following standards:

(i) The rates shall be set by the Board of Supervisors for the purpose of reimbursing Grantee for its reasonable costs of doing business pursuant to this Franchise Agreement. The Board shall have the discretion, which shall be reasonably exercised, to review and approve or disapprove the reasonableness of the nature and extent of all such costs and expenses.

(ii) The rates shall be set by the Board of Supervisors for the purpose of providing Grantee with a reasonable profit margin which shall be set by the Board of Supervisors in its discretion, taking into account the quality and level of Grantee's services under this Franchise Agreement, which profit margin shall be consistent with the range of profits allowed garbage collection companies which are subject to rate regulation and located within the counties of the San Francisco Bay Area (San Francisco, Alameda, Contra Costa, Solano, Napa, Marin, San Mateo and Santa Clara) and such other jurisdictions as the parties may mutually agree; provided, however, the profit margin may not be less than the lowest end of the range of profit margins allowed to any garbage collection company operating within the aforementioned jurisdictions taking into account the quality and level of service under the Franchise Agreement. In no event, however, shall the profit margin be reduced to less than four percent (4%).

(iii) In the event the County promulgates a rate review policy accepted in writing by Grantee in its sole discretion, the provisions of said rate review policy shall supersede the provisions of this subsection 19 (B).

C. Resolution of Issues Regarding the Rate Adjustments

Any issue regarding rates, or the computation thereof, or any other question regarding Grantee's reimbursement for fees, special services or extraordinary costs described in Exhibit "B", shall be decided by the Board of Supervisors. The rates in effect at the time any issue or dispute is submitted to the Board of Supervisors shall remain in effect pending resolution of any issue or dispute. The effective date of any dispute resolution, whether retroactive or prospective, shall reasonably be determined by the Board of Supervisors.

D. Billing and Payment

(1) Grantee shall bill all customers for all services, whether regular or special. Grantee shall provide itemized bills, distinctly showing charges for all classifications of services, including the charges for late payment and Tipping Fees. The Grantee shall collect for County AB 939 fees. Billings may be made every two months (and if in advance, for no more than two (2) months) for all services to residential customers.

(2) County may, at County's sole option, upon such terms and conditions as may be mutually agreed upon between the Parties, elect to bill residents for Solid Waste collection. If County elects to do so, mutually agreed upon guidelines will be established and amended into this Agreement. The portion of the Solid Waste collection rates paid to Grantee which is attributable to billing for services shall be assigned to County.

E. Delinquent Accounts

Grantee may discontinue service as set forth in this Section. Persons who have not remitted required payments within thirty (30) days after the date of billing shall be notified on forms approved by the County. Said forms shall contain a statement that services may be discontinued fifteen (15) days from the date of notice of payment is not made before that time. Upon payment of notice if payment is not made before that time. Upon payment of the delinquent fees as set forth in Exhibit "B", Grantee shall resume collection on the next regularly scheduled collection day.

F. Refunds

Grantee shall refund to each customer, on a pro rata basis, any advance service payments made by such customer for service not provided when service is discontinued by the customer after reasonable advance written notice or for service not provided by Grantee due to no fault of the customer.

G. Bills Paid Locally

Grantee shall establish a method by which customers may pay bills at least one location located in the Franchise Area. Payments will be accepted during normal banking hours. Any changes in the location must be approved by the County.

A. Grantee warrants that it shall provide an adequate number of vehicles and equipment for the collection and transportation services for which it is responsible under this Franchise Agreement. All vehicles used by Grantee under this Franchise Agreement shall be registered with the Department of Motor Vehicles of the State of California, shall be kept clean and in good repair, and shall be uniformly painted. Solid waste collection vehicles shall be washed such that they are maintained in a reasonably clean and sanitary condition. Grantee's name, telephone number and vehicle number shall be visibly displayed on its vehicles. Loads shall be kept completely covered at all times except when material is being loaded or unloaded or when vehicles are en route in the process of collection. Collection vehicles shall be designed and operated while en route in such a manner as to prevent Solid Waste, including leachate and garbage juice, from leaking, escaping or spilling. Any spillage of materials shall be immediately cleaned up by Grantee at Grantee's sole expense. The noise level generated by compaction vehicles using compaction mechanisms during the stationary compaction process shall be such that it does not unreasonably interfere with the quiet enjoyment of nearby properties. Grantee shall submit to County, annually, a certificate of vehicle noise level testing of all vehicles by an independent testing entity. The equipment of Grantee used under this Franchise Agreement shall be subject to inspection by County on a semi-annual basis but shall not be subject to any permit fees therefor.

Notwithstanding the generality of the forgoing, Grantee's equipment shall at all times be in conformance with the County Code provisions applicable thereto.

B. Upon execution of this Agreement, and at least annually thereafter, the Grantee shall provide the County a written list of all equipment (including trucks and containers) being used within the Franchise Area, including make and model, age, mileage or hours of operation, type of vehicle, etc.

A. Office Hours

Grantee's office hours shall be, at a minimum, from 8:00 a.m. to 5:00 p.m. daily, on all collection days. Grantee shall maintain a local phone number. A representative of Grantee shall be available during office hours for communication with the public at Grantee's principal office. Grantee shall also provide County with an emergency telephone number for use during other than normal business hours. Grantee shall have a representative or answering service available at said after-hours telephone number during all hours other than normal office hours.

B. Service Complaints

(1) All customer complaints shall be directed to Grantee. Grantee shall record all complaints received by mail, by telephone or in person (including date, name, address of complainant and nature of complaint). Grantee agrees to use its best efforts to resolve all complaints by close of business of the second business (waste collection) day following the date on which such complaint is received. Service complaints may be investigated by the Director of Environmental Management or the Director of Environmental Management's designee. Unless a settlement satisfactory to complainant, the Grantee and the Director of Environmental Management's designee is reached, the complainant may refer the matter to the Director of Environmental Management for review.

(2) Grantee will maintain records listing the date of customer complaints, the customer, describing the nature of the complaint or request, and when and what action was taken by the Grantee to resolve the complaint. All such records shall be maintained for a period of twenty-four (24) months and shall be available for inspection by the County.

C. Government Liaison Person

The Grantee shall designate a "government liaison person" who shall be responsible for working with the Director of Environmental Management or the Director of Environmental Management's designated representative to resolve consumer complaints. Unless a settlement satisfactory to complainant, the Grantee and the Director of Environmental Management's designee is reached, the complainant may refer the matter to the Director of Environmental Management for review.

D. Regular Meetings with County

At the reasonable request of County, Grantee shall meet with the County at 2850 Fair Lane Court, Placerville, to discuss matters of mutual concern including but not limited to, problems in Grantee's service, compliance with AB 939 and future planning. The person attending these meetings in behalf of Grantee shall be vested with sufficient authority to make decisions binding on Grantee.

A. The Grantee shall notify customers of this complaint arbitration procedure as required by County.

B. A customer dissatisfied with Grantee's decision regarding a complaint may ask the County to review the complaint. To obtain this review, the customer must request County review within thirty (30) days of receipt of Grantee's response to the complaint, or within forty-five (45) days of submitting the complaint to the Grantee if the Grantee has failed to respond to the complaint. The County may extend the time to request its review for good cause.

C. The Director of Environmental Management shall determine if the customer's complaint is justified, and if so, what remedy, if any, shall be imposed. The remedy under this Section shall be limited to a rebate of customer charges related to the period of breach of any of the terms of this Franchise Agreement.

A. The Parties hereto recognize that federal, State and local agencies with responsibility for defining Hazardous Waste and for regulating the collection, hauling or disposing of such substances, are continually providing new definitions, tests and regulations concerning these substances. Under this Agreement, it is Grantee's responsibility to keep current with the regulations and tests on such substances and to identify such substances and to comply with all federal, state and, to the extent not inconsistent with this Agreement, local regulations concerning such substances. Grantee shall make every reasonable effort to prohibit the collection and the disposal of Hazardous Waste in any manner inconsistent with federal and State law.

B. When Solid Waste is not collected from any Solid Waste customer, Grantee shall notify its customer why the collection was not made and shall attach tags approved by the County to the waste not so collected which clearly identify the reasons for such non-collection.

C. Grantee has represented to County that Grantee will carry out its duties to notify all agencies with jurisdiction, including the California Department of Toxic Substances Control and Local Emergency Response Providers, and, if appropriate, the National Response Center, of reportable quantities of hazardous waste, found or observed by Grantee in Solid Waste anywhere within the County, including on, in, under or about County property, including streets, easements, rights of way and County waste containers. In addition to other required notifications, if Grantee observes any substances which it or its employees reasonably believe or suspect to contain hazardous wastes unlawfully disposed of or released on County property, including streets, storm drains, or public rights of way, Grantee also will immediately notify the Director of Environmental Management or the Director of Environmental Managements' designee.

D. Grantee shall conduct a visual inspection, consistent with its normal operating procedures, of all Solid Wastes that it collects, transports and/or disposes pursuant to this Franchise Agreement for the purpose of discovering, identifying and refusing to collect, transport and dispose of hazardous wastes or materials.

E. Household Hazardous Waste Program

Except as provided in this subsection 24(E), Grantee shall not collect, handle, process, transport, arrange for the transport of or dispose of Hazardous Waste pursuant to this Franchise Agreement.

F. Notwithstanding Section 24(E), Grantee agrees to provide, upon County's request, a program for residents in Grantee's Franchise Area, identifying Hazardous Waste and complying with all federal, State and, to the extent not inconsistent with this Agreement, local statutes and regulations dealing with hazardous waste. Subject to permitting, said program shall include, and be expanded to include, collection of all items listed on Exhibit "C", attached to and incorporated into this Franchise Agreement, which list may be amended from time to time by the County.

A. Indemnification of County

(1) Grantee shall defend with counsel reasonably acceptable to the County and indemnify the County from and against any and all liabilities, costs, claims and damages which are caused by Grantee's failure to comply with the laws legally binding on Grantee which are described in Section 4, including but not limited to liabilities, costs, claims and damages described in Section 24(A)(2), below.

(2) Grantee agrees that it shall protect, defend with counsel reasonably acceptable to County, indemnify and hold harmless County, its officers, employees and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, liabilities or judgments, including attorney's fees, arising against any and all liabilities, fines, penalties, claims, damages, liabilities or judgments, including attorneys fees, arising out of or resulting in any way from Grantee's exercise of the franchise, unless such claim is due to the negligence or willful acts of the County, its officers, employees, agents or contractors, or from County's grant of this franchise to Grantee.

(3) In addition, upon request of the County, Grantee shall defend with counsel reasonably acceptable to the County, indemnify and hold the County harmless from any and all litigation and claims, damages and liabilities arising therefrom, brought to enforce or to challenge the Franchise Agreement and/or Grantee's exclusive rights granted thereunder, provided, however, the Grantee's obligations hereunder extend only to actions brought against or by persons not parties to this agreement; provided, further, Grantee shall be entitled to recover as recoverable costs for rate setting purposes its reasonable attorneys fees and costs incurred.

B. AB 939 Indemnification

(1) Grantee shall defend with counsel reasonably acceptable to the County, indemnify and hold the County harmless from any and all fines, penalties and assessments levied against or threatened to be levied against the County for the County's failure to meet the requirements of AB 939, its amendments or any successor legislation and/or all rules and regulations promulgated thereunder if said failure results from Grantee's failure to comply with this Franchise Agreement and/or Grantee's failure to comply with said laws, rules or regulations binding on Grantee, including but not limited to failing to timely supply to the County the reports and information required by the County in order to comply with AB 939.

C. Workers' Compensation Insurance

Grantee shall obtain and maintain in full force and effect throughout the entire term of this Franchise Agreement full workers' compensation insurance in accord with the provisions and requirements of the Labor Code of the State of California. Endorsements that implement the required coverage shall be filed and maintained with the County Clerk throughout the term of this Franchise Agreement.

D. General Liability Insurance

Grantee shall obtain and maintain in full force and effect throughout the entire term of this Franchise Agreement a Broad Form Comprehensive General Liability (occurrence) policy with a minimum limit of FIVE MILLION DOLLARS ($5,000,000.00) aggregate and TWO MILLION DOLLARS ($2,000,000.00) per occurrence for bodily injury and property damage, with any self-insured retention not exceeding $200,000.00 per occurrence. Said insurance shall protect Grantee and County from any claim for damages for bodily injury, including accidental death, as well as from any claim for property damage which may arise form operations performed pursuant to this Franchise Agreement, whether such operations be by Grantee itself, or by its agents, employees and/or subgrantees. Copies of the policies or endorsements evidencing the above required insurance coverage shall be filed with the County Clerk. Endorsements are required to be made a part of all of the following insurance policies required by this Section:

(1) "The County, its employees, agent, Grantees and officers, are hereby added as insureds as respects liability arising out of activities performed by or on behalf of Grantee."

(2) "This policy shall be considered primary insurance as respects any other valid collectible insurance the County may possess including any self-insured retention the County may have, and any other insurance the County does possess shall be considered excess insurance and shall not contribute with it."

(3) "This policy shall act for each insured, as though a separate policy had been written for each. This, however, will not act to increase the limit of liability of the insuring company."

(4) "Thirty (30) days' prior written notice by certified mail, return receipt requested, shall be given to the County in the event of suspension, cancellation, reduction in coverage or in limits or non-renewal of this policy for whatever reason. Such notice shall be sent to the County Clerk."

The limits of such insurance coverage, and companies, shall be subject to annual review and approval by the County every year. The County shall be included as a named insured on each of the policies, or policy endorsements.

E. Modification

The insurance requirements provided herein may be modified or waived in writing by the Board of Supervisors, provided the Board of Supervisors determines that such waiver or modification does not unreasonably increase the risk of exposure to the County, including the fact that the parent of Grantee may be self-insured up to a certain acceptable amount. Grantee agrees to be bound by the terms and provisions of Exhibit "D", incorporated herein by reference.

In the event that during the term of this Agreement, the County by ordinance requires mandatory subscription to residential Solid Waste collection services in Grantee's Franchise Area, such event shall be deemed a material change in the circumstances existing at the time of execution of this Agreement. Should such an ordinance be enacted, and during the time that such ordinance is in effect, this Franchise Agreement shall be deemed amended to include the following additional provisions:

(a) There shall be added to section 24 B the following additional paragraph:

(2) In addition, Grantee will indemnify and hold County harmless and pay all fines, assessments and penalties resulting from the County's failure to comply with AB 939, its amendments and successor legislation, and/or all regulations and rules promulgated thereunder to the extent that such failure is a consequence of the County's resident's failure to participate in the solid waste programs and/or services made available to them by County and/or Grantee; provided, however, that this indemnity and hold harmless shall not apply unless, upon the request of Grantee, the Board of Supervisors has passed a resolution providing for an increase in Grantee's rates to fully compensate Grantee including interest for its payments hereunder, which resolution shall become effective upon Grantee's payment of such fines, assessments and penalties. The Grantee's obligations under this provision shall be prorated based on the proportion that the population in Grantee's Franchise Area bears to the population of the unincorporated area of the County.

(b) Grantee's rates, including its profit margin, and service levels, and the cash bond and insurance requirements in this Franchise Agreement may be adjusted by the Board of Supervisors in its discretion to reflect the greater additional service demands, customers, risks and obligations of Grantee in the Franchise Area in the event of mandatory collection; provided, however, the profit margin may not be less than the lowest end of the range of profit margins allowed to any garbage collection company operating within the aforementioned jurisdictions taking into account the quality and level of service under the Franchise Agreement. In no event, however, shall the profit margin be reduced to less than four percent (4%).

A. Force Majeure

Grantee shall not be in default under this Franchise Agreement in the event that the collection, transportation and/or disposal services of Grantee are temporarily interrupted or discontinued for reasons outside the reasonable control of the Grantee, including but not limited to: riots, wars, sabotage, civil disturbances, insurrection, explosion, natural disasters such as floods, earthquakes, landslides and fires, strikes, lockouts and other labor disturbances or other similar or dissimilar events which are beyond the reasonable control of Grantee. Other events do not include the financial inability of the Grantee to perform or failure of the Grantee to obtain any necessary permits or licenses from other governmental agencies or the right to use the facilities of any public utility where such failure is due solely to the acts or omissions of the Grantee. In the event a labor disturbance interrupts collection, transportation and/or disposal of Solid Waste by Grantee as required under this Franchise Agreement, County may elect to exercise its rights under Section 16 of this Franchise Agreement.

B. Independent Contractor

Grantee is an independent contractor and not an officer, agent, servant or employee of County. Grantee is solely responsible for the acts and omissions of its officers, agents, employees, Grantees and subgrantees, if any. Nothing in this Franchise Agreement shall be construed as creating a partnership or joint venture between County and Grantee. Neither Grantee nor its officers, employees, agents or subgrantees shall obtain any rights to retirement or other benefits which accrue to County employees.

C. Right of Entry

Grantee shall have the right, until receipt of written notice revoking permission to pass is delivered to Grantee, to enter or drive on any private street, court, place, easement or other private property for the purpose of collecting or transporting solid waste pursuant to this Franchise Agreement.

D. Law to Govern; Venue

The law of the State of California shall govern this Franchise Agreement. In the event of litigation between the parties, venue in state trial courts shall lie exclusively in the County of El Dorado. In the event of litigation in a U. S. District Court exclusive venue shall lie in the Eastern District of California.

E. Fees and Gratuities

Grantee shall not, nor shall it permit any agent, employee or subgrantee employed by it to, request, solicit, demand or accept, either directly or indirectly, any compensation or gratuity for the collection of Solid Waste otherwise required to be collected under this Franchise Agreement.

F. Prior Agreements and Amendment

No amendment of this Franchise Agreement shall be valid unless in writing duly executed by the Parties. This Franchise Agreement contains the entire Agreement between the Parties and no promises, representations, warranty or covenant not included in this Agreement have been or are relied upon by either party. This Franchise Agreement is intended to supersede and replace all prior agreements between the parties, except as otherwise specifically provided in this Agreement.

G. Compliance with Franchise Agreement

Grantee shall comply with those provisions of the County Code which are applicable, and with any and all amendments to such applicable provisions during the term of this Franchise Agreement, provided that such provisions are not inconsistent with the terms of this Franchise Agreement.

H. Notices

All notices required or permitted to be given under this Franchise Agreement shall be in writing and shall be personally delivered or sent by telecopier or United States certified mail, postage prepaid, return receipt requested, addressed as follows:

To County: Jon Morgan, Manager of Solid Waste
Department of Environmental Management
2850 Fairlane Court
Placerville, CA 95667

To Grantee: David Dutra
El Dorado Disposal Services, Inc.
P.O. Box 1270
Diamond Springs, CA

or to such other address as either party may from time to time designate by notice to the other given in accordance with this Section. Notice shall be deemed effective on the date personally served or sent by telecopier or, if mailed, three (3) business days from the date such notice is deposited in the United States mail.

K. Savings Clause and Entirety

If any non-material provision of this Franchise Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such provision shall not affect the validity and enforceability of any of the remaining provisions of this Franchise Agreement.

L. Exhibits Incorporated

Exhibits "A" through "D" are attached to and incorporated in this Franchise Agreement by reference.

M. Identification Required

Grantee shall provide its employees, Grantees and subgrantees with identification for all individuals who may make personal contact with residents of the County.

N. Joint Drafting

This Franchise Agreement was drafted jointly by the Parties to the Franchise Agreement.

O. Judicial Review

Nothing in this Agreement shall be construed to prevent either Party from seeking redress to the courts for the purposes of legal review of administrative proceedings in regard to rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement.

P. Police Powers

Nothing in this Agreement is intended to or may limit County authority pursuant to its police power.

Q. Affiliated Entities

Whether or not Grantee shall provide information necessary to satisfy County that the charges made by any Affiliate are reasonable, shall be determined as part of the rate review process. Information gained from examination of books and records pertaining to operations not regulated by the County shall be treated by the County and its agents as confidential information.

WITNESS the execution of this Agreement on the day and year first written above.

COUNTY OF EL DORADO

By:______________________________

Chairman, Board of Supervisors

ATTEST:

DIXIE L. FOOTE
Clerk of the Board of Supervisors

By______________________________
Deputy Clerk

APPROVED AS TO FORM:

By:______________________
(County Counsel)

EL DORADO DISPOSAL SERVICES, INC.

By:___________________________
O. I. SCARIOT, President

APPROVED AS TO FORM:

By:______________________