TRANSIT OIL CO

DOC 01 OF 01

CONSENT DECREE

05-80-C014

CAA

PETRO

19801022

IND077866814

ITAPCO-KENTUCKIANA TERMINAL CO

NEW ALBANY, IN

79-110-C

05

CONSENT DECREE, US. V TRANSIT OIL COMPANY Page 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA NEW ALBANY DIVISION

UNITED STATES OF AMERICA

Plaintiff,

v.

TRANSIT OIL COMPANY,

Defendant.

The Complaint having been filed in this action on August 21, 1979, and with the plaintiff and defendant by their respective attorneys having consented to the entry of this Decree.

NOW THEREFORE, before the taking of any testimony, upon the pleadings, and without adjudication of any issue of fact or law in this action, and upon consent and agreement of the parties to this Decree, it is Ordered, Adjudged, and Decreed as follows:

I.

This Court has jurisdiction of the subject matter herein and of the parties hereto pursuant to 28 U.S.C. Section 1345 and 42 U.S.C. 7413.

II.

The provisions of this Consent Decree shall apply and be binding upon the parties, their officers, directors, agents, servants, employees, and any successors in interest; in addition, the provisions of this Consent Decree shall apply to all persons, firms, and corporations having notice of the Consent Decree and who are or who will be acting in concert and privity with the parties or their officers, directors, agents, servants, employees, and any successors in interest. ++EP++

Page 2

Transit shall give notice of this Consent Decree to any successor in interest prior to transfer of ownership and shall simultaneously verify to the United States Environmental Protection Agency (hereinafter "U.S. EPA"), Region V, Enforcement Division, and the United States Attorney for the Southern District of Indiana, that such notice has been given.

III.

On or before April 15, 1980, defendant Transit Oil Company shall have achieved compliance with the State of Indiana Implementation Plan Air Pollution Control Regulation APC-15, Sections 3 and 4, as approved by U.S. EPA on May 14, 1973, at the New Albany facility by ceasing to utilize the gasoline loading rack for the loading of volatile organic materials in an amount equal to or greater than 40,000 gallons per day and by ceasing to store volatile organic materials in any stationary tank which does not meet the requirements of APC-15, Section 3. Transit agrees that after April 15, 1980 it will not utilize the gasoline loading rack for the handling of volatile organic materials in an amount equal to or greater than 40,000 gallons per day without having first installed a vapor collection and disposal system, as required by U.S. EPA approved APC-15, Section 4 nor will it operate the gasoline storage facility for storage of volatile organic materials without having first installed either a floating roof or vapor recovery system as required by Indiana APC-15, Section 3.

IV.

Defendant shall comply with the following monitoring and reporting requirements.

a. Monitoring Requirements

(1) Defendant shall, commencing on the date of entry of this Consent Decree, maintain a record of the quantity of volatile organic materials transferred through the gasoline loading rack on a daily basis at the above-mentioned New Albany facility.

++EP++

Page 3 b. Record Keeping and Reporting Requirements

(1) Defendant shall, beginning with the date of entry of this Consent Decree report on a quarterly basis to the U.S. Environmental Protection Agency the information required to be maintained under paragraph a above. This requirement shall terminate with the submittal for the calendar-quarter March-May, 1981.

(2) All submittals, notifications and reports to U.S. EPA pursuant to this Consent Decree shall be made to Chief, Air Compliance Section Enforcement Division, U.S. EPA, 230 South Dearborn Street, Chicago, Illinois 60604.

V.

Agreement to the terms of this Consent Decree by U.S. EPA does not constitute a waiver of U.S. EPA's right to seek non-compliance penalties pursuant to Section 120 of the Act, 42 U.S.C. Section 7420.

VI.

This Consent Decree in no way affects defendant's obligation to comply with any other Federal, state, or local law including, but not limited to, Section 303 of the Clean Air Act, 42 U.S.C. Section 7603.

VII.

This Consent Decree shall be in settlement of the civil enforcement action brought by the United States of America against defendant pursuant to Section 113 of the Clean Air Act, 42 U.S.C. Section 7413, on August 21, 1979 for violation of U.S. EPA approved Indiana Regulation APC-15. No other enforcement action will be initiated against defendant's New Albany facility for violations of U.S. EPA approved Indiana Regulation APC-15 pursuant to Section 113 of the Act so long as the New Albany facility is in compliance with this Consent Decree. U.S. EPA shall enforce the requirements of this Consent Decree by applying to this Court for relief. ++EP++

Page 4 VIII.

No later than thirty (30) days after entry of this Consent Decree, Transit shall pay to the United States of America a civil penalty in the amount of $ 2,500. Payment shall be by Certified Check payable to the "Treasurer, United States of America", and delivered to the United States Attorney for the Southern District of Indiana, Indianapolis, Indiana.

IX.

It is hereby stipulated and agreed between the parties that failure by Transit's New Albany facility to comply with the terms of Paragraphs III and IV of this Consent Decree, shall result in the payment of money penalties for civil contempt in the amount of $500.00 per day for each day that such failure continues. Moreover such penalties shall not preclude U.S. EPA from any injunctive relief which it may be entitled for violation of any provision of this Consent Decree.

X.

In accordance with Department of Justice policy, 28 C.F.R. 50.7, this Consent Decree shall be available for public inspection and comment for thirty (30) days. Notification of the Federal Register notice announcing this Decree shall be made to the Court and the parties by counsel for the United States. Any substantive comments received by the government will be provided promptly to the Court and to the defendant, along with the government's evaluation of such comments, including if necessary, a statement as to the desirability of entering the Decree in light of such comments. In the event no comments or no substantive comments are received, counsel for the United States will so notify the Court and the defendant in order that the Decree may be entered. ++EP++

Page 5 XI.

This Decree will terminate 30 days after the date of the last report required to be submitted to EPA under Paragraph IV above.

TRANSIT OIL COMPANY

/s/ ILLEGIBLE

William H. Bode, Esquire

John E. Varnum, Esquire

Batzell, Nunn & Bode

Attorneys for Transit Oil

Company

1015 15th Street, N. W.

Suite 1100

Washington, D. C. 20005

UNITED STATES OF AMERICA

/s/ILLEGIBLE

Assistance Attorney General

United States Department of Justice

Land and Natural Resources Division

9th & Pennsylvania Avenue, N. W.

Washington, D. C. 20530

/s/ ILLEGIBLE

Virginia D. McCarty

United States Attorney

274 United States Courthouse

46 East Ohio Street

Indianapolis, Indiana 46204

/s/ ILLEGIBLE

John McGuire

Regional Administrator

United States Environmental

Protection Agency, Region V

230 South Dearborn Street

Chicago, Illinois 60604

Entered 20 Oct, 1980.

/s/ SIGNATURE ILLEGIBLE

United States District Judge ++EP++

OCCIDENTAL CHEMICAL CORPORATION

DOC 01 OF 01

CONSENT DECREE

CAA

1987

1987

86-770-A

06

CONSENT DECREE, USA V. OCCIDENTAL CHEMICAL CORPORATION

Page 1 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA,

Plaintiff,

v.

OCCIDENTAL CHEMICAL CORPORATION,

Defendant.

Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a complaint herein on November 4, 1986, seeking civil penalties for violations of the Clean Air Act, 42 U.S.C. Section 7401 et seq. ("CAA"), and the vinyl chloride National Emission Standard for Hazardous Air Pollutants ("NESHAP"), 40 C.F.R. Section 61.60 et seq.

The parties agree that settlement of the disputed issues arising from Plaintiff's complaint without further litigation is in the public interest and that entry of this Decree is the most appropriate means of resolving these issues.

NOW THEREFORE, before the taking of any testimony, without the trial or adjudication of any issue of fact, without this Decree or any action taken to comply with the terms of this Decree constituting any evidence or waiver or admission by any party with respect to any issue of fact or law, with the consent of the parties, by their respective attorneys, and the Court having considered the matter and being duly advised, IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows: ++EP++

Page 2 I. JURISDICTION

This Court has jurisdiction over the subject matter herein and the parties to this action. The complaint states a claim upon which relief can be granted.

II. PARTIES BOUND

The provisions of this Consent Decree shall apply to and be binding upon the plaintiff and defendant and upon their officers, agents, servants, employees, successors, assigns and all persons, firms and corporations under, through or for them.

III. CIVIL PENALTIES

The Defendant shall pay the sum of four hundred and twenty five thousand dollars ($425,000.00) to the United States in full settlement of this matter by tendering to the United States Attorney for the Middle District of Louisiana, within 30 days from the date of entry of this decree, a certified or cashier's check in the amount of said sum, payable to the "Treasurer of the United States." A copy of the check and the letter tendering such check shall be mailed to the Office of Regional Counsel, U.S. Environmental Protection Agency, Region VI, 1445 Ross Avenue, Dallas, Texas 75202-2733. Defendant shall not deduct this payment when preparing its tax returns. ++EP++

Page 3 IV. OBLIGATION TO COMPLY WITH ALL LAWS

Nothing in this decree shall be construed to relieve the defendant or its officers, agents, servants, employees, successors or assigns of their obligations to comply with all applicable federal, state and local statutes or regulations.

V. COSTS OF ACTION

Each party shall bear its own costs and attorney's fees in this action.

John V. Parker

UNITED STATES DISTRICT JUDGE

Date October 9, 1987

FOR THE UNITED STATES OF AMERICA

/s/ Roger J. Marzulla

ROGER J. MARZULLA, Acting

Assistant Attorney General

Land & Natural Resources Div.

U.S. Department of Justice

Washington, D.C. 20530

P. RAYMOND LAMONICA

United States Attorney

Middle District of Louisiana

FOR OCCIDENTAL CHEMICAL CORP.

/s/ Steven W. Schaefer

STEVEN W. SCHAEFER

Executive Vice President

Polymers & Plastics Group

Occidental Chemical Corp.

P.O. Box 699

Pottstown, PA 19464

/s/ Robert D. Luss

ROBERT D. LUSS

Group Counsel

Polymers & Plastics Group

Occidental Chemical Corp.

P.O. Box 699

Pottstown, PA 19464 ++EP++

^Z

DOW CHEMICAL COMPANY

DOC 01 OF 01

CONSENT DECREE

06-90-C017

CAA

CHEM

19900830

19900830

LAD008187080

DOW CHEMICAL CO

PLAQUEMINE, LA

85-294-A

06

CONSENT DECREE, USA V. DOW CHEMICAL COMPANY

Page 1 UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA,

Plaintiff,

v.

DOW CHEMICAL COMPANY,

Defendant.

Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency, ("EPA"), filed a Complaint on March 26, 1985, against defendant Dow Chemical Company ("Dow" or "defendant"), alleging violations of Sections 112 and 114 of the Clean Air Act, 42 U.S.C. Sub-Section 7412, 7414, at defendant's Plaquemine, Louisiana facility, and seeking civil penalties and injunctive relief. Plaintiff filed an Amended Complaint on August 25, 1986, adding counts for 13 vinyl chloride relief valve discharges ("RVDs") and 12 associated reporting violations. Plaintiff and defendant resolved all issues except the 13 RVDs and 12 reporting violations by means of a Partial Consent Decree entered by the Court on October 27, 1987.

Plaintiff and Defendant, by the undersigned counsel, having agreed that settlement of this action is in the public interest, agree to the entry of this Consent Decree as an appropriate means of resolving matters not resolved by the October 1987 Consent Decree. This Consent Decree is entered prior to any trial or adjudication of any issue of law or fact in this action. ++EP++

Page 2

Nothing in this Consent Decree shall constitute evidence or an admission by any party with respect to any issue of law or fact alleged in the Complaint.

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

I. JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b), and pursuant to 28 U.S.C. Sub-Section 1331, 1345, and 1355. Venue is proper in this District pursuant to Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Section 1391(b) and (c), and 28 U.S.C. Section 1395. The Complaint and Amended Compliant state a claims upon which relief may be granted against Dow pursuant to section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

II. PARTIES BOUND

2. The provisions of this Consent Decree shall apply to and be binding upon the parties hereto, their respective officials, officers, directors, agents, servants, employees, successors, assigns, and all persons, firms, and corporations acting under, through, or for them, and upon those persons, firms, and corporations in active concert or participation with them. ++EP++

Page 3 III. COMPLIANCE

3. With respect to the violations alleged in the Amended Complaint, defendant has complied and will continue to comply with the applicable requirements of 40 C.F.R. Section 61.65.

IV. CIVIL PENALTY

4. Within thirty (30) calendar days of entry of this Consent Decree Dow shall pay a civil penalty of THIRTY-EIGHT THOUSAND DOLLARS ($38,000.00) to the United States of America in full settlement of the claims alleged in the Amended Complaint. Dow shall make payment by cashiers or certified check payable to "Treasurer, United States of America." Defendant shall deliver payment to:

P. Raymond Lamonica

United States Attorney

Middle District of Louisiana

339 Florida Street, 6th Floor

Baton Rouge, Louisiana 70801

Defendant Dow shall enclose with its payment a transmittal letter referring to the caption, action number, and judicial district of this action. Defendant shall send copies of the check and transmittal letter to:

Director, Air, Pesticides & Toxics Division

U.S. Environmental Protection Agency

Region VI

1445 Ross Avenue, Suite 1200

Dallas, Texas 75202-2733

and to:

Chief, Environmental Enforcement Section

U.S. Department of Justice

Land and Natural Resources Division

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044 ++EP++

Page 4

5. In the event that Defendant does not pay the civil penalty within the time specified in paragraph 4 above, a late handling charge of $20 shall be imposed after thirty (30) days, with an additional charge of $10 for each subsequent 30-day period over which an unpaid balance remains. In addition, a six percent (6%) per annum penalty will be assessed on any principal amount not paid within thirty (30) days of the date of entry of this Consent Decree.

V. INTEREST

6. In addition to the late handling charge and penalty on late payment, defendant shall also pay interest for any late payment of the civil penalties. Such interest shall begin to accrue from the date of noncompliance with the payment deadline. The rate of interest shall be that established under 31 U.S.C. Section 3717.

VI. LAWS NOT AFFECTED

7. This Consent Decree in no way affects or relieves Dow of responsibility to comply with any state, federal or local laws or regulations.

VII. TERMINATION

8. This Consent Decree shall terminate upon payment of the $38,000 civil penalty required under this Consent Decree.

VIII. RETENTION OF JURISDICTION

9. Until termination of this Decree, the Court shall retain jurisdiction to modify and enforce the terms and conditions of this Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Decree. ++EP++

Page 5 IX. COSTS OF ACTION

10. Each party shall bear its own costs and attorneys fees of this action.

X. PUBLIC NOTICE

11. The parties agree and acknowledge that the final approval and entry of this proposed decree is subject to the requirements of 28 C.F.R. Section 50.7, providing that notice of the proposed Consent Decree be given to the public and that the public shall have at least thirty days to make any comments. Provided that no comments are received which would warrant the United States doing otherwise, the United States will move for entry of the Consent Decree following the close of the 30-day comment period.

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

DOW CHEMICAL COMPANY

/s/ Dean Cooper

DEAN COOPER

Dow Chemical Company

P.O. Box 150

Plaquemine, Louisiana 70765

(517) 636-3300

/s/ Robert Brager

ROBERT BRAGER

Beveridge and Diamond

1333 New Hampshire Ave., N.W.

Washington, D.C. 20036

(202) 789-6024

UNITED STATES OF AMERICA

/s/ SIGNATURE ILLEGIBLE

RICHARD B. STEWART

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

/s/ Donna Duer

DONNA D. DUER

Environmental Enforcement Section

United States Department of Justice

Washington, D.C. 20044 P.O. Box 7611

(202) 514-1448 ++EP++

Page 6

/s/ Robert E. Layton, Jr.

ROBERT E. LAYTON, JR., P.E.

Regional Administrator

United States Environmental Protection Agency

1445 Ross Avenue

Dallas, Texas 75202-2733

/s/ SIGNATURE ILLEGIBLE

for JAMES STROCK

Assistant Administrator

Office of Enforcement

United States Environmental Protection Agency

401 M. Street, S.W.

Washington, D.C. 20460

P. RAYMOND LAMONICA

United States Attorney

Middle District of Louisiana

/s/ John J. Gaupp

JOHN GAUPP

Assistant United States Attorney

Middle District of Louisiana

339 Florida Street, 6th floor

Baton Rouge, Louisiana 70801

Attorney Id. No. 14976

This Consent Decree is entered on this 30 day of August, 1990.

/s/ John V. Parker

JOHN V. PARKER, CHIEF JUDGE

MIDDLE DISTRICT OF LOUISIANA ++EP++

Page 7 CERTIFICATE OF SERVICE

I HEREBY CERTIFY that copies of the foregoing "Notice of Lodging of Consent Decree" and "Consent Decree" were mailed, postage prepaid, this 3rd day of July, 1990, to:

Dean Cooper

Senior Attorney

Dow Chemical Company

Legal Department

2030 Dow Center

Midland, Michigan 48674

/s/ John J. Gaupp

JOHN GAUPP

Assistant United States Attorney

Middle District of Louisiana ++EP++

PUBLIC SERVICE OF NM

DOC 01 OF 01

FINAL JUDGMENT

06-78-C002

CAA

ELECT

06/12/78

NMD069424323

PUBLIC SERVICE CO NM SAN JUAN

WATERFLOW, NM

78-264-M

06

FINAL JUDGMENT, US V. PUBLIC SERVICE OF NM

Page 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

UNITED STATES OF AMERICA,

Plaintiff

v.

PUBLIC SERVICE COMPANY OF

NEW MEXICO

and

TUCSON GAS AND ELECTRIC COMPANY, INC.

Defendants

Plaintiff, United States of America, and Defendants, Public Service Company of New Mexico and Tucson Gas and Electric Company, by their respective attorneys, having requested the Court to enter this Final Judgment, without trial or adjudication of any issue of fact or law herein, and without this Final Judgment constituting any evidence against or admission by any party with respect to any issue of fact or law in any action or proceeding;

And the Court, before any testimony has been taken, being advised and having considered the matter, and being of the opinion that said Final Judgment should be entered, it is hereby

ORDERED, ADJUDGED AND DECREED as follows:

I

This Court has jurisdiction of the subject matter of this action and of the parties hereto. The complaint states a claim upon which relief may be granted against Defendants under the provisions of Section 113(b) of the Clean Air Act, 42 U.S.C. Section 7413(b).

II

As used in this Final Judgment:

A. "San Juan Unit 1" means that coal-fired steam generating unit located near Fruitland, San Juan County, New Mexico, which is jointly owned by Public Service Company of New Mexico and Tucson Gas and Electric Company, which has been denominated by those companies as Unit 1 at the San Juan Generating Station, which was given a construction permit by the New Mexico Environmental Improvement Agency on July 13, 1973, and which commenced coal-fired operation on December 4, 1976. ++EP++

Page 2

B. "Applicable Standard of Performance" means those regulatory requirements relating to sulfur dioxide emissions, established pursuant to Section 111 of the Clean Air Act, 42 U.S.C. Section 7411, which have been published from time to time in the Federal Register for codification in Part 60 of Title 40 of the Code of Federal Regulations, including both the General Provisions in Subpart A and the Standards of Performance for Fossil-Fuel Fired Steam Generators in Subpart D thereof, and including the relevant Appendices to Part 60.

C. "Sulfur dioxide emission control equipment" means any apparatus, with all necessary associated equipment;

1. which treats the combustion products of coal from a coal-fired steam generating unit, and

2. which is capable of immediate and continuous operation, and subject to the provisions of 40 CFR 60.11(d), (equipment is "capable of immediate operation" if it can operate as soon as a stable source of electric power is available), and

3. which, when operated, continuously reduces the quantity of sulfur dioxide which is generated by a coal-fired steam generating unit to the quantity of sulfur dioxide which is allowed to be emitted to the atmosphere by the applicable Standard of Performance, and

4. which is capable of so reducing the sulfur dioxide emissions regardless of the rate of operation of the steam generating unit and regardless of the sulfur content of the coal burned.

D. "Performance test" means that measurement of the emissions of sulfur dioxide to the atmosphere which is prescribed in the applicable Standard of Performance for determining compliance with 40 CFR Section 60.43 and which, as it is conducted, is found by the Director of the Enforcement Division of Region VI of the Environmental Protection Agency to be adequate to determine such compliance status.

E. "Continuous stack monitor" means that system, installed in the duct through which combustion gases from the coal-fired steam generating unit are passed to the atmosphere, which continuously measures the quantity of sulfur dioxide passing into the atmosphere, and which meets the requirements for such a system as prescribed in the applicable Standard of Performance. ++EP++

Page 3 III

The provisions of this Final Judgment are applicable to Public Service Company of New Mexico, to Tucson Gas and Electric Company, and to their respective officers, agents, employees, successors, attorneys, and all those in active concert or participation with them, who receive actual notice of this Final Judgment by personal service or otherwise.

IV

A. Defendants shall take and cause to be taken all action which may be necessary to complete construction and installation of the sulfur dioxide emission control equipment on San Juan Unit 1 as soon as possible, but in no event later than April 24, 1978. Whether or not San Juan Unit 1 generates steam on April 25, 1978, on that day the sulfur dioxide emission control equipment shall be fully capable of continuously reducing the quantity of sulfur dioxide emitted to the atmosphere from San Juan Unit 1 to the quantity allowed by the applicable Standard of Performance.

B. In the event Defendants fail or refuse to obey the provisions of paragraph IV.A of this Final Judgment, Defendants shall pay a stipulated penalty to the United States Treasury in the amount of $20,000 per day for each day on which such violation continues. In any hearing on whether the facts constitute a violation of paragraph IV.A, the Defendants shall have the burden of proving that they did not fail or refuse to obey the provisions of paragraph IV.A.

C. The provisions of this paragraph IV shall be superceded by the provisions of paragraphs V and VI on June 24, 1978.

V

A. Defendants shall conduct a performance test of San Juan Unit 1 at its maximum production rate within sixty days after commencement of full operation of the sulfur dioxide emission control equipment, but in no event later than June 24, 1978. The performance evaluation of the continuous stack monitor, required by 40 CFR 60.13, shall be conducted simultaneously with the performance test.

B. In the event Defendants fail or refuse to obey the provisions of paragraph V.A of this Final Judgment, Defendants shall pay a stipulated penalty to the United States Treasury in the amount of $35,000 per day for each day on which such violation continues. ++EP++

Page 4

In any hearing on whether the facts constitute a violation of paragraph V.A, the Defendants shall have the burden of proving that they did not fail or refuse to obey the provisions of paragraph V.A.

VI

A. Defendants shall comply with the applicable Standard of Performance at San Juan Unit 1 as soon as practicable, but in no event later than June 24, 1978; and Defendants shall comply therewith continuously thereafter. The provisions of this paragraph shall also be terminated upon the termination of this Final Judgment pursuant to paragraph X.

B. In the event Defendants fail or refuse to obey the provisions of paragraph VI.A of this Final judgment, Defendants shall pay a stipulated penalty to the United States Treasury in the amount of $35,000 per day for each day on which such violation continues. In any hearing on whether the facts constitute a violation of paragraph VI.A, the Defendants shall have the burden of proving that they did not fail or refuse to obey the provisions of paragraph VI.A.

C. Compliance or non-compliance with the applicable Standard of Performance shall be initially determined only by the performance test required by paragraph V.A of this Final Judgment. A determination of compliance or non-compliance by a performance test shall be presumed to continue, whenever San Juan Unit 1 produces steam, unless and until a subsequent performance test demonstrates a change.

D. If the initial performance test, required by paragraph V.A of this Final Judgment, demonstrates that Defendants are complying with the applicable Standard of Performance at San Juan Unit 1, and if, at any time thereafter, the continuous stack monitor indicates that during any three-hour period, the average emissions (arithmetic average of three contiguous one-hour periods) of sulfur dioxide exceeded the applicable Standard of Performance, then Defendants shall conduct a new performance test of San Juan Unit 1 at its maximum production rate within fifteen days after such excessive emissions. However, this requirement for a new performance test may be waived by the Director of the Enforcement Division of Region VI of the Environmental Protection Agency.

E. For any day on which violations of both paragraphs V.B and VI.B of this Final Judgment have occurred, Defendants shall pay the penalty under only one such paragraph. ++EP++

Page 5 VII

Defendants shall install a continuous stack monitor for measuring sulfur dioxide emissions from San Juan Unit 1 as soon as practicable, but in no event later than April 24, 1978, and Defendant shall operate such continuous stack monitor on and after April 24, 1978, in accordance with the requirements of 40 CFR 60.13, 60.45, and Appendix B to 40 CFR Part 60.

VIII

Failure to have the ducting connected between the sulfur dioxide emission control equipment and San Juan Unit 1 because of a work stoppage by Boilermakers or other craft union shall not be a basis for reducing or waiving the payments specified specified in paragraph IV.B, V.B, and VI.B of this Final Judgment.

IX

Defendants shall submit a written report containing the following information simultaneously to the Clerk of this Court and to the Director, Enforcement Division, Region VI, Environmental Protection Agency, First International Building, 1201 Elm Street, Dallas, Texas 75270, at the times indicated:

A. On April 28, 1978, whether Defendants have obeyed the provisions of paragraph IV.A of this Final Judgment.

B. On June 28, 1978, whether Defendants have obeyed the provisions of paragraph V.A of this Final Judgment.

C. At least thirty days before the initial performance test is to be conducted, report the date on which the test is scheduled to occur. For subsequent performance tests provide the maximum possible notice, but in any event, at least seven days notice.

D. At least thirty days after each performance test has been conducted, report the results of the test.

E. On the Tuesday of each week after April 25, 1978, report for each of the preceding seven days:

(1) Whether steam was produced in San Juan Unit 1;

(2) Whether the sulfur dioxide emission control equipment operated on San Juan Unit 1 at all times that steam was produced. If the answer is negative, provide an explanation. ++EP++

Page 6

(3) Whether the continuous stack monitor operated on San Juan Unit 1 at all times that steam was produced. If the answer is negative, provide an explanation.

(4) The results of all measurements made by the continuous stack monitor.

X

Upon application by any party and notice to all other parties, and upon filing with the Clerk of the Court of documentary evidence that all requirements of paragraphs VI and VII of this Final Judgment have been met, this Court will consider the termination of all requirements of this Final Judgment. Upon the request of any party within fifteen days of the filing of a termination application, a hearing will be held on the application. Upon the joint request of all parties, this Court will grant the termination application.

XI

Jurisdiction is retained by this Court for the purpose of enabling any party to this Final Judgment to apply to this Court at any time for such further orders and directions as may be necessary or appropriate for the construction or modification of any of the provisions thereof, for the enforcement of compliance therewith, for the punishment of violations thereof, and for such other orders as the Court may deem appropriate.

XII

The Defendants shall be jointly and severally liable for penalties under this Final Judgment.

XIII

Termination of this Final Judgment, in accordance with paragraph X hereof, shall not relieve the Defendants from their duty of compliance with any applicable requirement of law.

United States District Judge ++EP++

Page 7

All parties, by the signature of their authorized representatives below, agree to the terms of this Final Judgment and request the Court to enter same.

/s/ ILLEGIBLE SIGNATURE

Public Service Company of New Mexico by its

President

Date 4/6/78

/s/ ILLEGIBLE SIGNATURE

Public Service Company of New Mexico by its

Attorney

Date 4/6/78

/s/ ILLEGIBLE SIGNATURE

Tucson Gas and Electric Company by its President

Date April 5, 1978

United States of America

by Assistant Attorney General

Land and Natural Resources Division

United States Attorney

/s/ Adlene Harrison

Environmental Protection Agency

Regional Administrator

Region VI

Date 4/5/78 ++EP++

OTTUMWA, CITY OF IOWA

DOC 01 OF 01

PARTIAL CONSENT DECREE

07-89-C003

CAA

MISC

19890307

19890307

IAD981720071

OTTUMWA AIPORT AUTH

OTTUMWA, IA

88-164-E

07

PARTIAL CONSENT DECREE, US V CITY OF OTTUMWA

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

UNITED STATES OF AMERICA,

Plaintiff,

v.

CITY OF OTTUMWA, IOWA,

and

OTTUMWA AIRPORT AUTHORITY,

Defendant.

WHEREAS, Plaintiff, the United States of America, on behalf of the Administrator of the Environmental Protection Agency ("EPA" or "Plaintiff") filed a complaint herein on March 28, 1988, alleging that Defendants City of Ottumwa, Iowa, ("the City") and Ottumwa Airport Authority ("OAA") had violated the Clean Air Act, as amended, 42 U.S.C. Sub-Section 7401 et seq. ("the Act"), and certain specified provisions of the National Emission Standards for Hazardous Air Pollutants established pursuant to Section 112 of the Act, 42 U.S.C. Section 7412, codified at 40 C.F.R. Part 61 (the "asbestos NESHAP"); and

WHEREAS, Plaintiff and Defendants agree that settlement of the aforesaid matters without further litigation would serve the public interest and that entry of this Partial Consent Decree is the most appropriate means of resolving this matter; and ++EP++

Page 2

WHEREAS, Plaintiff and Defendants have consented to the making and entering of this Partial Consent Decree; obligating Defendants to implement certain remedial actions as specified herein; providing for payment of a civil penalty in settlement of violations alleged in the Complaint; and providing for stipulated penalties in the event of noncompliance herewith; and

WHEREAS, Defendants' agreement to this settlement and entry of this Consent decree does not constitute an admission or an adjudication of the validity of Plaintiff's allegations or of any liability by Defendants but such agreement by Defendants is solely to terminate this lawsuit and to settle these claims on the terms set forth in this document;

NOW, THEREFORE, upon consent and agreement of these parties herein, and the Court having considered the matter and being duly advised,

It is hereby ADJUDGED, ORDERED AND DECREED as follows:

-I- JURISDICTION

This Court has subject matter jurisdiction pursuant to Sections 112, 113 and 114 of the Act, 42 U.S.C. Sub-Section 7412, 7413 and 7414 and pursuant to the 28 U.S.C. Sub-Section 1331, 1345, and 1355. The Complaint states a claim upon which relief can be granted. ++EP++

Page 3 -II- APPLICATION AND SCOPE

A. The provisions of this Partial Consent Decree shall apply to and be binding upon the parties to this action, and upon Defendants' officers, directors, agents, servants, employees, successors and assigns, and to all persons, firms or corporations having actual notice of the Decree who are, or will be, acting in active concert or participation with the Defendants or their officers, directors, agents, servants, employees, successors or assigns.

B. Prior to any sale, assignment, or other transfer of property or operations which are subject to this Partial Consent Decree, Defendants shall advise the purchaser, assignee or transferee, in writing, of the existence of this Partial Consent Decree, and of its binding effect upon said purchaser, assignee or transferee. A copy of such written notification shall be sent by certified mail, return receipt requested, to the Director, Air and Toxics Division, EPA Region VII, 726 Minnesota Avenue, Kansas City, Kansas 66101 no later than 5 days after any such sale, assignment, or transfer.

C. The provisions of this Partial Consent Decree shall apply to all of Defendants' demolition and/or renovation operations. ++EP++

Page 4 -III- DEFINITIONS

Terms used in this Partial Consent Decree that are defined in Section 112 of the Act, 42 U.S.C. Section 7412, or in 40 C.F.R., Part 61, Subpart M, shall have the meanings assigned to those terms in said definitions.

-IV- INSPECTION, SAMPLING AND ANALYSIS

A. Prior to commencing any demolition or renovation operation, Defendants shall conduct a diligent and complete survey of the facility to be demolished or renovated for the presence of friable asbestos-containing material ("ACM") and/or ACM which may become friable during the course of demolition or renovation operations.

B. If Defendants discover suspected ACM and/or ACM during the course of its operations, all work which could disturb the suspected ACM and/or ACM shall cease immediately until Defendants informs, in writing, the Director, Air and Toxics Division, EPA Region VII, 726 Minnesota Avenue, Kansas City, Kansas 66101 and appropriate state and/or local air pollution control authorities. Defendants shall notify all appropriate authorities within 24 hours. If Defendants' previous notice to EPA indicated that no ACM was present, or if the amount of ACM discovered puts the total amount of ACM over 260 linear feet on pipes or 160 square feet on other facility components, then Defendants shall immediately inform EPA and the appropriate state and/or local authorities. ++EP++

Page 5

Defendants shall make this notification to the appropriate authorities within 24 hours and shall discontinue any operations which may disturb ACM or suspected ACM for at least 24 hours after EPA and the appropriate state and/or local authorities have received such notice.

C. If Defendants discover any friable materials or any materials which may become friable, Defendants may elect to treat these materials as ACM without sampling and analyzing. Except as provided for in Section IV.B and IV.D., before Defendants may treat such materials as non-ACM Defendants shall collect at least three representative samples of the materials. Defendants shall take these samples from representative locations within the materials, and shall label each sample container with a sample identification number unique to the sampling location. Defendants shall arrange for analysis of the samples by an independent laboratory with expertise and experience in analyzing samples for the presence of asbestos, as evidenced by an EPA-approved test method. Defendants shall not commence any work which might disturb any suspected ACM until the laboratory has completed its analysis and reported the results to Defendants, confirming said material is, in fact, non-ACM.

D. Nothing in this Section IV shall be construed to relieve Defendants of their obligations under the asbestos NESHAP set forth at 40 C.F.R. Part 61, Subpart M. ++EP++

Page 6 -V- NOTIFICATION

A. Defendants shall, by written notification postmarked or delivered ten days prior to commencement of work which may potentially disturb ACM if the amount of ACM is at least 80 linear meters (260 linear feet) on pipes or at least 15 square meters (160 square feet) on other components or twenty (20) days prior to commencement of work which may potentially disturb ACM in all other operations, advise EPA Region VII and the appropriate state and/or local air pollution control authorities, of any planned demolition and/or renovation of a facility containing ACM. If ACM is discovered after the project has begun, Defendants shall notify the EPA Region VII and the appropriate state and/or local air pollution control authorities as provided in Section IV.B, hereof.

B. In the case of a facility being demolished pursuant to the order of a State or local governmental agency, issued because the facility is structurally unsound and in danger of imminent collapse, Defendants shall send written notification of the demolition of such facility to the appropriate EPA Regional Office, and the appropriate state and/or local air pollution control authorities, as early as possible, and shall include with such notification (i) a copy of the order pursuant to which the demolition is being conducted, and (ii) recitation of the name, title, address, and authority of the State or local official who ordered the demolition. ++EP++

Page 7

C. Any notification required by Section V(A) and (B) shall be provided by employing the Notice form annexed hereto as Attachment I, and shall include all of the information required by that form. In addition, Defendants shall prepare for each site a graphic representation generally depicting the proposed demolition or renovation showing the location(s) of the areas sampled in accordance with Section IV hereof, and identifying all areas where ACM was found. This graphic representation shall be maintained on-site by the Asbestos Site Coordinator.

-VI- ASBESTOS CONTROL PROGRAM

Defendants shall establish an internal program to assure compliance with the asbestos NESHAP, and the requirements of this Partial Consent Decree (the "Asbestos Control Program") as hereinafter specified.

A. Within 60 days of the entry of the Partial Consent Decree, Defendants shall designate an Asbestos Program Manager and, in his/her absence or unavailability, an alternate Asbestos Program Manager (the "Asbestos Program Manager"). Defendants may at their option amend their designation of the Asbestos Program Managers upon 30 days prior notice to EPA. The Asbestos Program Managers will report directly to the Deputy Health Officer of the City of Ottumwa, Iowa or his designee and shall have the following duties and responsibilities: ++EP++

Page 8

1. Managing all of the Defendants' Asbestos Control Program activities including the asbestos training program required by Section VII hereof.

2. Ensuring that EPA and the appropriate state or local air pollution control agency receive the notifications required by Section V hereof.

3. Ensuring that each job site within their purview is properly inspected, and that samples of all friable materials are taken and analyzed, to the extent required by Section IV hereof.

4. Supervising the asbestos site coordinators in the performance of their prescribed duties under Section VI(B) hereof.

5. Acting as Defendants' primary liaison with EPA and any state or local air pollution control agency on matters not covered by the duties of the asbestos site coordinator.

6. Maintaining the following records for activities:

(i) a complete record of each demolition or renovation operation involving asbestos, as required by Paragraph C, Subparagraph 7 of this Section;

(ii) reports of samples taken and analyses performed to determine the presence of ACM or to monitor the presence of asbestos in the air;

(iii) manifests, landfill receipts, and other documentation relating to transport and disposal of ACM; and ++EP++

Page 9

(iv) Any other record required to be maintained pursuant to the terms of this Partial Consent Decree.

7. Complete the training required in Section VII A., B., and C., herein.

B. Commencing no later than 60 days after entry of this Partial Consent Decree, Defendants shall designate an asbestos site coordinator within seven (7) days after learning that any new site at which Defendants proposes to engage in demolition or renovation work contains ACM. If suspected ACM is discovered during the course of its work, Defendants shall designate an asbestos site coordinator as soon as possible after learning that suspected ACM is present. Operations shall neither commence nor continue prior to the designation of an asbestos site coordinator. The asbestos site coordinator shall oversee all activities involving ACM at the site and shall have been trained according to the training requirements described herein in Section VII.

C. The asbestos site coordinator shall report directly to the Asbestos Program Manager and shall have the following duties and responsibilities:

1. Being present when actual asbestos removal or stripping first commences at a project site. ++EP++

Page 10

2. Managing all activities at the work site relating to the requirements of the asbestos NESHAP and the provisions of this Partial Consent Decree.

3. Giving guidance and instructions on asbestos removal to employees at the site.

4. Acting as the primary liaison between on-site employees and EPA and state or local inspectors.

5. Immediately correcting any violations of the asbestos NESHAP or this Partial Consent Decree. If an immediate remedy is not possible, the asbestos site coordinator shall stop all ACM removal activities until all such violations are corrected.

6. Retaining the following documents in his possession while at the work site: a) a copy of the written notification for the site, required by Section V, hereof; b) a copy of the graphic representation required by Section V(C), hereof; c) a copy of the certification of training for each employee on site, as required by Section VII(L), hereof, or a copy of the card issued by Defendants certifying the successful completion of the required training, pursuant to Section VII(M), hereof; and d) a copy of Defendants; "Asbestos Training Pamphlet", preparation of which is required by Section VI(D), hereof.

7. Recording, on a daily basis, with respect to any demolition or renovation of a facility at which ACM has been found, the information called for by a prescribed Daily Check List in the form annexed hereto as Attachment II, and certifying to the accuracy of the recorded information. ++EP++

Page 11

8. Complete the training required in Section VII D., E., and F., herein.

D. 1. Defendants shall develop a written document entitled Defendants "Asbestos Training Pamphlet" ("the Pamphlet"). The Pamphlet shall address all of the requirements of this Partial Consent Decree and 40 C.F.R. Part 61, Subpart M; shall describe Defendants's Asbestos Control Program, and the respective responsibilities of the Asbestos Program Managers, the asbestos site coordinator, and all employees engaged in work involving ACM; shall detail the requirements applicable to handling, removal, transportation and disposal of ACM; and shall encourage workers to report any violations of these requirements to the Asbestos Program Manager, the asbestos site coordinator, as appropriate. The Pamphlet may contain additional material related to particular state and/or local requirements which may apply.

2. Within thirty (30) after the Asbestos Program Manager has completed the training described in Section VII, A, hereof, Defendants shall submit a draft of the Pamphlet to the Director, Air and Toxics Division, EPA Region VII, 726 Minnesota Avenue, Kansas City, Kansas 66101 for review and approval.

3. EPA shall notify Defendants, in writing, of EPA approval or disapproval of the draft Pamphlet, and shall specify deficiencies, if any. ++EP++

Page 12

4. Within 30 days of receipt of EPA notification of disapproval of any portions of the draft Pamphlet, Defendants shall amend and submit to EPA a revised draft that remedies the deficiencies specified by EPA.

5. A copy of the Pamphlet, in the form approved by EPA, shall be given by Defendants to each employee and supervisor involved with asbestos activities.

6. The Pamphlet shall be reviewed by the Asbestos Program Managers and Defendants' officers annually in addition to whenever there is a change in the asbestos NESHAP. The Pamphlet shall be revised to reflect changes in the asbestos NESHAP regulations.

7. Neither the terms of the Pamphlet nor Defendants' failure to timely develop or distribute to its employees an EPA approved Pamphlet or to revise an approved Pamphlet to reflect new regulatory requirements shall absolve Defendants of liability for any violation of the terms of this Partial Consent Decree or the asbestos NESHAP whether or not attributable to the actions or derelictions of any of defendants' employees.

E. Defendants shall maintain all of the records required by this Partial Consent Decree for the duration of the Partial Consent Decree, including any extension, pursuant to Section IX hereof, and shall make them available to EPA upon request. These records shall include, but not be limited to, all records of: (1) employee training; (2) inspections made prior to demolition/renovation jobs; (3) any demolition or renovation work involving ACM (including, but not limited to, the Daily Check List required by Section VI(C)(7) hereto); (4) transportation of ACM; and (5) disposal of ACM. ++EP++

Page 13 - VII- REQUIRED ASBESTOS TRAINING

No employee of Defendants shall engage in the demolition or renovation of any facility containing ACM, or inspect a facility for the presence of ACM pursuant to the requirements of Section IV hereof, unless he has successfully completed a course of asbestos training, as hereinafter specified.

A. The Asbestos Program Manager ("APM"), the alternate Asbestos Program Manager, and all employees whose duties include inspection of facilities for the presence of ACM pursuant to the provisions of Section IV hereof, shall successfully complete, or have already completed, an EPA-approved training course entitled, "Inspector/Management Planner" or equivalent, subject to EPA approval. In the alternative, Defendants may engage an instructor, accredited by EPA to provide the AHERA asbestos training course entitled: "Inspector/Management Planner" or an EPA-approved equivalent to the APM and alternate APM.

B. Defendants' employees subject to the requirement of Section VII(A), hereof, who have not successfully completed the five-day course of study by the date of entry of this Partial Consent Decree, shall be enrolled in the next EPA-approved five-day course of study, "Inspector/Management Planner" or an EPA-approved equivalent, offered within the EPA Region VII or, at Defendants's election, an earlier five-day course of study offered in any other Region, or, if Defendants elect to engage an instructor as provided in Section VII(A) no later than 90 days after entry of this Partial Consent Decree. ++EP++

Page 14

C. Employees of Defendants who become subject to the requirements of Section VII(A), hereof, after the date of entry of this Partial Consent Decree, either by hiring or assignment of new work responsibilities subsequent to that date, shall not engage in work involving ACM until they have successfully completed a five-day course of study.

D. Defendants' asbestos site coordinator ("ASC") shall successfully complete, or have completed, an EPA-approved training course entitled: "Contractor/Supervisor" or an EPA-approved equivalent. In the alternative, Defendants may engage an instructor, accredited by EPA to provide the AHERA asbestos training course entitled, "Contractor/Supervisor" or an EPA-approved equivalent, to the ASC.

E. All asbestos site coordinators who have not successfully completed a four-day course of study by the date of entry of the Partial Decree shall be enrolled in the next EPA-approved four-day course of study, "Contractor/Supervisor" or an EPA-approved equivalent, offered within EPA Region VII or at Defendants's election, an earlier four-day course of study offered in any other Region, or, if Defendants elect to engage an instructor, accredited by EPA to provide the AHERA asbestos training course entitled, "Contractor/Supervisor" or an EPA-approved equivalent, said course must be held no later than 90 days after entry of this Partial Consent Decree. ++EP++

Page 15

F. Employees of Defendants who become subject to the requirements of Section VII(D) hereof, after the date of entry of this Partial Consent Decree, either by hiring or assignment of new work responsibilities subsequent to that date, shall not be Asbestos Site Coordinators until they have successfully completed a four-day course of study.

G. All employees of Defendants who are not required by the terms of this Partial Consent Decree to complete a four-or five-day course of study, and who will engage in asbestos removal, handling, transportation and/or disposal activities, shall successfully complete, or have completed, an EPA-approved training course entitled: "Abatement Worker" or an EPA-approved equivalent. Defendants' employees subject to the requirement of this paragraph, who have not successfully completed a three-day course of study by the entry of this Partial Consent Decree, shall be enrolled in the next EPA-approved three-day course of study, "Abatement Worker" or an EPA-approved equivalent, offered within EPA region VII or at Defendants' election, an earlier EPA-approved three-day course of study offered in any other Region or if Defendant elects to engage an instructor accredited by EPA to provide the AHERA asbestos training course entitled, "Abatement Worker" or an EPA-approved equivalent, said course must be held within 90 days of the date of entry of this Partial Consent Decree. ++EP++

Page 16

H. No employee of Defendants shall engage in asbestos removal, handling, transportation, and/or disposal activities unless he has successfully completed the EPA-approved three-day training course entitled "Abatement Worker" or an EPA-approved equivalent.

I. Appropriate tests shall be administered at the conclusion of the five, four, and three-day courses. Such tests shall be administered by the organization conducting the course, and shall be in writing to those Defendants employees who read English. The tests shall be administered orally, in the native language of the employee, to those Defendants employees not fluent in English. The passing grades for such tests, whether written or oral, shall be those established in 40 C.F.R. 763, Appendix C to Subpart E--EPA Model Contractor Accreditation Plan, (I) (2), Examinations. No employee of the Defendants will be deemed to have "successfully completed" his training, as that term is used in this Partial Consent Decree, until he has passed the test associated with the relevant course of study or training program.

J. Defendants shall retain a record of each employee's training, which will be kept at the office where the employee will work. This record shall include: ++EP++

Page 17

1. A certification of successful completion of the training together with any supporting documentation to evaluate the identity of the employee and the validity of certification;

2. A copy of the test taken or, for test administered by outside EPA-approved vendors, a record from which it can be determined that an appropriate test was taken and passed;

3. A statement as to whether the employee can read the language in which the materials are printed, and if not, the name of the person who orally tested him; and

4. For those subject to the one-day training program, or those who have supplied documentation of successful completion of training from another EPA-approved source, an acknowledgement in the form annexed hereto as Attachment III signed by the employee. If the employee is unable to read, the document shall also be signed by the person who read the document to the employee.

K. For each employee for whom Defendants have compiled and maintained the documentation required by Section VII(J) above, Defendants may issue the employee a card, in a form to be approved by EPA, indicating that the employee has fulfilled all of the training requirements or the training provider may issue the employee such a card.

L. An employee's successful completion of the training required by this Partial Consent Decree shall not absolve Defendants of liability for any violation of this Partial Consent Decree or the asbestos NESHAP whether or not attributable to the action(s) or dereliction(s) of that employee. ++EP++

Page 18

M. Nothing in this Section shall be construed as relieving Defendants from any more stringent training obligations imposed or to be imposed by any federal, state or local law or regulation, including but not limited to EPA's regulations promulgated pursuant to the Toxics Substances Control Act, as amended.

- VIII - CONTRACTOR AND SUBCONTRACTOR EXCLUSION

Section VI, paragraphs C.2-4 and D.5 and the training requirements of Section VII of this Partial Consent Decree do not apply to third-party contractor or subcontractor employees conducting demolition or renovation operations on behalf of the Defendants provided, however, that nothing in this Section shall be construed to relieve Defendants of their obligations under the asbestos NESHAP set forth at 40 C.F.R. Part 61, Subpart M.

- IX - SITE ACCESS

A. During the duration of this Partial Consent Decree, Defendants shall not withhold consent for EPA and/or state or local air pollution control agencies, and/or their authorized contractors and consultants and representatives, to enter on, through and about the site of any demolition and/or renovation operation with which Defendants is involved, at reasonable times, and without notice, to take such samples and photographs and to inspect and copy any records as may be deemed necessary to determine Defendants' compliance with the requirements of the asbestos NESHAP and the provisions of this Partial Consent Decree. ++EP++

Page 19

B. The provisions of Section VIII(A) hereof are in addition to, and not a limitation on, any rights of access afforded by any statute, regulation, or other law.

- X - DURATION OF THIS DECREE

Defendants' obligations under this Partial Consent Decree shall commence upon entry hereof. Unless extended by the Court, this Partial Consent Decree shall terminate two (2) years after the date of final entry of the Decree by the Court. The United States shall have the right to seek extension of the period of time this Partial Consent Decree is in effect. This right is in addition to any other rights the United States may have to enforce this Partial Consent Decree.

- XI - PENALTIES

A. Defendants shall pay a civil penalty of fifty thousand dollars ($50,000.00). This civil penalty shall be paid within thirty days of the date of entry of this Partial Consent Decree by certified check payable to the United States of America, and forwarded to: ++EP++

Page 20

United States Attorney's Office

Southern District of Iowa

115 U.S. Courthouse

Des Moines, Iowa 50309

Notification of all such payments, as well as copies of all such certified checks shall be sent to:

Regional Hearing Clerk (3RC00)

U.S. Environmental Protection Agency

Region VII

726 Minnesota Avenue

Kansas City, Kansas 66101

B. The United States shall be deemed a judgment creditor for purposes of collection of the foregoing civil penalties. Any penalty payments made under this Partial Consent Decree are not tax deductible.

- XII - STIPULATED PENALTIES

Defendants shall be liable to Plaintiff for Stipulated Penalties in the amount of Five Hundred Dollars ($500.00) per violation per day for each violation of any requirement of this Partial Consent Decree contained in Section IV, Section V, Section VI, Section VII, and Section VIII hereof. This stipulated penalty provision does not apply to violations of the asbestos NESHAP regulation, 40 C.F.R. Part 61, Subpart M. Defendants shall pay Stipulated Penalties within fifteen (15) days of its receipt of a written demand by Plaintiff for such penalties. ++EP++

Page 21

If Defendants believes it is not liable for the demanded Stipulated Penalties, it may petition the Court within fifteen (15) days of its receipt of the written demand to hear evidence on whether Defendants is liable for the Stipulated Penalties demanded by Plaintiff. Defendants shall have the burden of proof in establishing that it is not liable for the Stipulated Penalties demanded by the United States. Defendants may present matters to the Court which it believes mitigates the amount of any stipulated penalties for any violation of the Partial Consent Decree, provided however that nothing in this Section shall be deemed to expand any defenses available to Defendants pursuant to the terms of Section XII, hereof. Payment of Stipulated Penalties will be made in the manner as that specified in Section X hereof. Plaintiff reserves the right to seek such additional relief for violations of the Partial Consent Decree and/or applicable law as is available by law or in equity.

- XIII- GENERAL PROVISIONS

A. The Court shall retain jurisdiction to modify and enforce the provisions of this Partial Consent Decree, to resolve disputes arising hereunder, and to entertain any application as may be necessary or appropriate for the construction and effectuation of this Partial Consent Decree.

B. Any modification of this Partial Consent Decree shall be in writing and approved by the Court. EPA reserves the right to seek a modification of this Partial Consent Decree to conform to any asbestos NESHAP requirements made applicable by reason of any revision of the Clean Air Act and/or its implementing regulations. ++EP++

Page 22

C. This Partial Consent Decree is neither a permit nor a modification of any existing permit and in no way relieves Defendants of their obligation to comply with all applicable federal, state or local laws or regulations.

D. Plaintiff reserves any and all legal and equitable remedies available to enforce the provisions of this Partial Consent Decree, and of the Clean Air Act and its implementing regulations.

E. Nothing herein shall be construed to limit the authority of the United States to undertake any action against any person, including each Defendant, in response to conditions which may present an imminent and substantial endangerment to the public health, welfare or the environment.

F. Notices required in this Decree, as applicable (and except as otherwise provided herein), shall be transmitted to the address noted in Section II, B, herein.

- XIV - COSTS

Defendants shall pay the plaintiff United States of America $1102.64 in costs for this action. ++EP++

Page 23 - XV - PUBLIC NOTICE

The parties agree that final approval and entry of this Decree is subject to the public notice requirements of 28 C.F.R. Section 50.7.

For Plaintiff United States of America:

DONALD A. CARR, Acting

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

/s/ C.S. Picken

CYRUS S. PICKEN, JR.

Trial Attorney

Land and Natural Resources Division

Environmental Enforcement Section

United States Department of Justice

Dated 4 Dec. 88

CHRISTOPHER D. HAGEN

United States Attorney

Southern District of Iowa

RICHARD L. RICHARDS

Assistant United States Attorney

Southern District of Iowa

115 U.S. Courthouse

Des Moines, Iowa 50309

(515) 284-6273

/s/ SIGNATURE ILLEGIBLE

THOMAS L. ADAMS, JR.

Assistant Administrator Enforcement and

Compliance Monitoring

United States Environmental Protection Agency

Dated 12/21/88 ++EP++

Page 24

/s/ Henry Rompage

HENRY ROMPAGE

Assistant Regional Counsel

United States Environmental Protection Agency

Region III

726 Minnesota Avenue

Kansas City, Kansas 66101

Dated 11-21-88

For the Defendants:

/s/ SIGNATURE ILLEGIBLE

Ottumwa Airport Authority

Dated 11-16-88

/s/ SIGNATURE ILLEGIBLE

City of Ottumwa, Iowa

/s/ Thomas F. Kintigh

THOMAS KINTIGH

Attorney for Defendants

Dated 11-16-88

IT IS SO ORDERED:

UNITED STATES DISTRICT JUDGE ++EP++

ATT 1-1 ATTACHMENT I NOTICE OF ASBESTOS REMOVAL ACTIVITIES DEMOLITION AND/OR RENOVATION

FORM OMITTED ++EP++

ATT 1-2

FORM OMITTED ++EP++

ATT 1-3

FORM OMITTED ++EP++

ATT 1-4

FORM OMITTED ++EP++

ATT 2-1 ATTACHMENT II ASBESTOS REMOVAL PROJECT DAILY CHECK LIST

FORM OMITTED ++EP++

ATT 2-2

FORM OMITTED ++EP++

ATT 3-I ATTACHMENT III EMPLOYEE'S ACKNOWLEDGEMENT OF ASBESTOS TRAINING

In accordance with applicable law, Cleveland Wrecking Company is required to provide proper safety training to all employees whose job responsibilities involve (or will involve) the removal, handling, transportation or disposal of materials containing asbestos.

If you have received asbestos training, please read paragraph 1, below, and decide if it accurately describes the training you received. By signing your name at the bottom of this sheet, you will be acknowledging (1) that you received the training described; and (2) that you understand that review of the training materials by the United States Environmental Protection Agency does not assure that your job site is free from all health and safety risks.

ACKNOWLEDGMENT

1. I have completed at least eight hours of training on the dangers of asbestos, and the proper procedures for removing, handling, transporting, and disposing of materials containing asbestos. I took an examination following the training course, and was informed that I had passed that examinations. I will keep on my person proof of my training.

2. I have received and read a copy of the Cleveland Wrecking Company's Asbestos Training Pamphlet.

3. I understand that although the Environmental Protection Agency reviewed the materials employed by the Cleveland Wrecking Company in training me, the Environmental Protection Agency's approval of those materials was not intended as a guarantee or assurance to me that my workplace is free of all health and safety risks, or that Cleveland Wrecking is in compliance with regulations and laws enforced by EPA or other agencies such as the Occupational Safety and Health Administration. ++EP++

ATT 3-2

Signature of Employee

Printed Name of Employee

WITNESS

I witnessed the named employee's signature.

_ I certify that the employee can read English.

OR

_ The employee cannot read, or cannot read English. I read this document to him before he signed it and he acknowledged understanding its contents.

Signature of Witness

Printed Name of Witness ++EP++

DES MOINES ASPHALT & PAVING CO

DOC 01 OF 01

CONSENT DECREE

07-87-C003

CAA

MISC

19861126

19861026

IAD005308085

DES MOINES ASPHALT-PAVING

DES MOINES, IA

85-925 (E)

07

CONSENT DECREE, USA V. DES MOINES ASPHALT & PAVING COMPANY

Page 1 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA

UNITED STATES OF AMERICA,

Plaintiff,

v.

DES MOINES ASPHALT AND PAVING COMPANY,

Defendant.

WHEREAS, Plaintiff, United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), filed a complaint in the above-captioned matter on November 26, 1985, alleging that Des Moines Asphalt and Paving Company ("Defendant") violated Section 111 of the Clean Air Act, (the "Act"), 42 U.S.C. of 7411, and Standard of Performance regulations, 40 C.F.R. Sections 60.8, 60.11 and 60.92; and

WHEREAS, Defendant, Des Moines Asphalt and Paving Company is a Iowa corporation with its principal place of business in Des Moines, Iowa; and

WHEREAS, Defendant owns and operates an Astec "Super Six Pack" portable drum mix asphalt plant (the "Asphalt plant"), which is a stationary source of the air pollutant particulate matter; and ++EP++

Page 2

WHEREAS, Plaintiff has alleged that Defendant commenced construction of its asphalt plant in May 1983 and performed initial startup and operation of the asphalt plant on or about July 22, 1983; and

WHEREAS, the Standards of Performance under the Act, including general provisions of Standards of Performance, 40 C.F.R. Part 60, are applicable to defendant's facility; and

WHEREAS, Plaintiff has alleged that defendant failed to conduct performance tests pursuant to 40 C.F.R. Section 60.8 within 60 days after achieving the maximum production rate at which the facility will be operated but no later than 180 days after initial startup; and

WHEREAS, Plaintiff has alleged that from May 1, 1984 through November 1, 1984, and May 2, 1985 to May 9, 1985, Defendant discharged into the atmosphere gases containing particulate matter in excess of the allowable standards under the Act, thereby violating 40 C.F.R. Section 60.92; and

WHEREAS, Plaintiff has alleged that defendant operated its asphalt plant without properly monitoring and operating all air pollution control equipment, thereby violating 40 C.F.R. Section 60.11(d); and

WHEREAS, Defendant does business in this judicial district, and venue before this Court is appropriate; and

WHEREAS, without trial or adjudication of any issue of fact or law in this case, the parties wish to settle the dispute described above because it is in the public interest to do so and they have agreed to the following order through their attorneys and authorized officials; and ++EP++

Page 3

WHEREAS, the Court having considered the complaint and the proposed Consent Decree.

NOW, THEREFORE, IT IS ORDERED AS FOLLOWS:

I. Jurisdiction and Venue

1. This Court has jurisdiction of the subject matter herein and the parties hereto pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b). The complaint states a claim upon which relief may be granted pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

II. Parties

2. The provisions of this Decree shall apply to and be binding upon the parties to this action, their officers, directors, agents, servants, employees, successors, assigns, and all persons, firms, and corporations in active concert with them. The Defendant shall give prior written notice of this Consent Decree to any successors in interest prior to the transfer of any ownership, interest or right to operate the Asphalt plant. Defendant shall verify, in writing, to EPA Region VII Regional Counsel, 726 Minnesota Avenue, Kansas City, Kansas 66101, fifteen (15) days prior to any such transfer, that such notice has been given to its successor in interest.

3. This Consent Decree in no way affects or relieves the Defendant of responsibility to comply with any Federal, State or local requirements or laws. ++EP++

Page 4 III. Obligation of the Parties

4. This Consent Decree is a settlement only of those claims raised in the Complaint and addressed in this Decree.

5. Within thirty (30) days of entry of this Decree Defendant shall undertake a program of maintenance of the air pollution control equipment associated with the Asphalt plant as necessary to ensure compliance with 40 C.F.R. Section 60.92. Such maintenance program shall include, but not be limited to, the following:

a. routine inspection of the baghouse for broken or displaced bags and replacement as needed;

b. routine inspection of the baghouse for worn fan blades, and replacement as needed;

c. maintainance of a supply of spare parts for the baghouse;

d. a training program for employees to service and maintain the baghouse;

e. for the term of this Decree, Defendant shall maintain records of the dates of inspections of the baghouse, a description of the inspection and findings, and a description of what, if any, action was taken and the reasons for such action.

6. Defendant shall not operate the Asphalt plant so as to discharge into the atmosphere particulate matter in excess of the standards set forth in 40 C.F.R. Section 60.92. ++EP++

Page 5

7. Any authorized representative or contractor of EPA, upon presentation of credentials, may enter upon the premises of Defendant's facility at any time for the purpose of inspecting records and monitoring compliance with the provisions of this Decree. This provision in no way limits or otherwise effects any right of entry held by Plaintiff pursuant to applicable Federal, or State laws, regulations or permits.

8. Defendant shall pay the United States the sum of twenty-six thousand, two hundred and fifty dollars ($26,250) representing civil penalties for Defendant's violation of the Act as alleged in the Complaint filed herein. Payment of such penalty shall be made by certified or cashiers check, payable to "Treasurer, United States of America," and delivered to the United States Attorney for the Southern District of Iowa, 115 U.S. Courthouse, East First & Walnut Streets, Des Moines, Iowa 50309. Defendant shall make said payment in compliance with the following schedule: (1) within 10 days of entry of this Decree, the sum of $12,500; (2) no later than July 1, 1987, the sum of $ 13,750.

9. If Defendant fails to comply with the terms of this Consent Decree, it shall pay stipulated penalties for as long as the Defendant is in violation as follows: ++EP++

Page 6 Violation Penalty a. Failure to comply with $500.00 per day for each the requirements of para- violation for each of the first graph 5 of this Decree. ten days beyond the dates specified in paragraph 5 and $1,000.00 for each day thereafter. b. Failure to comply with $500.00 per day for each requirements of para- violation of the first ten days graph 6 of this Decree. and $1,000.00 for each day thereafter.

Upon Defendant's failure to comply with the terms of this Consent Decree, stipulated penalties provided for in this paragraph shall be paid by the Defendant, upon receipt of written demand by EPA, by certified or cashiers check, payable to "Treasurer, United States of America," and shall be tendered to the United States Attorney for the Southern District of Iowa.

10. Amounts paid pursuant to paragraphs 8 and 9 are in the nature of a civil penalty and are not deductible for federal tax purposes.

IV. Notification

11. If any event occurs which causes or may cause a violation of any provision of this Consent Decree by the Defendant, the Defendant shall notify the Court and EPA Region VII, Office of Regional Counsel, Attention: Air and Toxics Division, in writing not later than five (5) days after the date on which the Defendant first knew or should have known by exercise of due diligence of such event. The notice shall describe in detail the nature of the violation, the anticipated length of time the violation may persist, the precise cause or causes of the violation, the measures taken or to be taken by the Defendant to prevent or minimize the violation, and the timetable by which those measures will be implemented. ++EP++

Page 7

The Defendant shall adopt all measures necessary to avoid or minimize any such violation. Failure by the Defendant to comply with the notice requirements of this paragraph shall render paragraphs 12(A) and 12(B) void and of no effect as to the particular incident involved, and shall constitute a waiver of the Defendant's right to obtain an extension of time for execution of their obligations under this paragraph based on such incident and shall constitute a waiver of Defendant's right to object to assessment of stipulated penalties.

V. Force Majeure

12(A). If the parties agree that the violation has been or will be caused by circumstances entirely beyond the control of the Defendant or any entity controlled by or under the common control of or in the employ of the Defendant, and that Defendant could not have forseen and prevented such violation, the time for performance of such requirement may be extended for a period not to exceed the actual delay resulting from such circumstance. In the event the parties are unable to agree, the matter may be submitted by either party to the Court for resolution. If the violation is then determined to have been caused by circumstances entirely beyond the control of the Defendant or any entity controlled by or under the common control of the Defendant, the Defendant may be excused as to that violation for the period of time the violation continues due to such circumstances. ++EP++

Page 8

The burden of proving that any delay is caused by circumstances entirely beyond the control of defendant shall rest with defendant. Cost or expenses associated with the implementation of actions called for by this Consent Decree shall not serve as a basis for changes in this Decree, extension of time under this Consent Decree, or to support for claims of force majeure.

(B). Compliance with any requirement of this Consent Decree shall not constitute compliance with any other requirement. An extension of one compliance date based on a particular incident does not result in an extension of a subsequent compliance date or dates. The Defendant must make an individual showing of proof regarding each delayed incremental step or other requirement for which an extension is sought.

VI. Other Provisions

13. The Plaintiff does not, by its consent to the entry of this Consent Decree, warrant or waiver in any manner that the Defendant's complete compliance with this Consent Decree will result in compliance with the provisions of the Clean Air Act, 42 U.S.C. Section 7401 et seq., other than those provisions to which this Consent Decree is addressed. ++EP++

Page 9

14. The Plaintiff does not waive any rights or remedies available to it, for any violation by the Defendant of Federal or State laws, regulations, or permit conditions following completion of the requirements of this Decree.

15. This Consent Decree in no way waives or otherwise affects the right or authority of EPA to bring an action pursuant to Section 303 of the Act, 42 U.S.C. Section 7603.

16. The Court shall retain jurisdiction to modify and enforce the terms and conditions of this Consent Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Decree.

17. Each party shall bear its own costs and disbursements in this action. Should the Defendant subsequently be determined to have knowingly violated the terms and conditions of this Consent Decree, the Defendant shall be liable to the United States for any costs and disbursements incurred by the United States in any actions against the Defendant for noncompliance with this Consent Decree.

18. The provisions of this Consent Decree shall be severable, and should any provisions be declared by a court of competent jurisdiction to be inconsistent with Federal or State law, and therefore unenforceable, the remaining provisions of this Decree shall remain in full force and effect. ++EP++

Page 10

19. The Defendant does not admit any liability nor any past or present violation of the Clean Air Act as alleged by the United States by virtue of executing this Consent Decree or carrying out its terms.

20. This Consent Decree shall terminate twelve (12) months from the date of entry of this Decree or in the alternative, 120 days from the date defendant makes final payment pursuant to paragraph 8, above, if Defendant has complied with all of the provisions contained herein, or unless modified by the Court upon petition by one of the parties.

21. Plaintiff and Defendant hereby agree to entry of this Consent Decree without further notice to them subject to the public notice requirements of 28 C.F.R. Section 50.7.

BY THEIR COUNSEL, THE PARTIES ENTER INTO THIS CONSENT DECREE AND SUBMIT IT TO THE COURT, THAT IT MAY BE APPROVED AND ENTERED.

FOR THE UNITED STATES OF AMERICA:

/s/ ILLEGIBLE SIGNATURE

F. HENRY HABICHT II

Assistant Attorney General

Land and Natural Resources Division

FOR DES MOINES ASPHALT AND PAVING COMPANY:

/s/ SIGNATURE ILLEGIBLE ++EP++

Page 11

CHRISTOPHER D. HAGEN

United States Attorney

By:/s/ Richard Lee Richards

RICHARD RICHARDS

115 U.S. Courthouse

Des Moines, Iowa 50309

/s/ Thomas L. Adams

THOMAS L. ADAMS, JR.

Assistant Administrator

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M St. S.W.

Washington, D.C. 20460

/s/ Douglas A. Johns

DOUGLAS A. JOHNS

Environmental Enforcement Section

Land and Natural Resources Division

U.S. Department of Justice

10th & Pennsylvania Ave., N.W.

Washington, D.C. 20530

(202) 633-5777

/s/ SIGNATURE ILLEGIBLE

United States District Judge

Date November 26, 1986 ++EP++

Page 12

UNITED STATES OF AMERICA

v.

DES MOINES ASPHALT AND PAVING COMPANY

Civil No. 85-925-E

2cc: Dept. of Justice

Land & Natural Resources Division

Environmental Enforcement Section

Washington, D.C. 20530

1cc: Environmental Protection Agency

Office of Enforcement Counsel

401 M Street, S.W.

Washington, D.C. 20460

1cc: Environmental Protection Agency

Region VII

726 Minnesota

Kansas City, KS 66101-2704

Case assigned to: Richard L. Ricahrds, AUSA

115 U.S. Courthouse

Des Moines, Iowa 50309

FTS: 862-6257 ++EP++ CHECK OMITTED

IOWA STATE BOARD OF REGENTS-U

DOC 01 OF 01

CONSENT JUDGEMENT AND STIPULATION

07-80-C006

CAA

ELECT

19801023

19801023

IAD980318414

UNIVERSITY OF IOWA-OAKDALE POW

CORALVILLE, IA

80-436-A

07

CONSENT JUDGEMENT AND STIPULATION, US V. IOWA STATE BOARD OF REGENT S-U

Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA CENTRAL DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

IOWA STATE BOARD OF REGENTS,

Defendants.

Plaintiff, United States of America, having filed its Complaint herein on October 23, 1980 and the defendant having appeared, and stipulated to the facts as they appear herein for the purposes of this Consent Order only, and the plaintiff and defendant, by their respective attorneys, having each consented to the making and entry of this Consent Decree without trial, and the Court having been fully advised in the matter and having given the matter full consideration, it is hereby

DECREED, ORDERED, ADJUDGED I

This Court has jurisdiction over the parties, all process having been completed, and over the subject matter of this action under the Clean Air Act, 42 U.S.C. Section 7401 et seq. and 28 U.S.C. Section 1345.

II

The provisions of this Judgment shall apply to and be binding upon the State Board of Regents, (hereinafter referred to as the Board), its officers, directors, agents, servants, employees, successors, and assigns, and all persons, firms, and corporations acting under, through, or for it.

III

The State Board of Regents is an Iowa state agency administering educational facilities. The defendant operates a power plant at the Oakdale Campus, University of Iowa, near Iowa City, Iowa. ++EP++

Page 2 IV

The Board is responsible for the operation of the Oakdale Campus power plant consisting of Boilers Numbers 1, 2, 3 and 4. These boilers are subject to the requirements of Subrules 400--4.3(2) and 4.3(2) d, Iowa Administrative Code. These regulations are part of the Iowa State Implementation Plan, approved by the Administrator, Environmental Protection Agency (EPA) under Section 110(a)(2) of the Clean Air Act, as amended (42 U.S.C. 7410(a)(2)).

On December 26, 1978, the Board was issued a Section 113(d)(1) (42 U.S.C. 7413(d)(1)) Delayed Compliance Order to achieve compliance with the above regulations by January 15, 1979.

V

The Board failed to bring the four boilers into compliance by January 15, 1979. The pollution control equipment, a baghouse, has been consistently bypassed in the operation of the four boilers since the final compliance date caused emissions in excess of the limits in the above regulations.

VI

The Government instituted civil action for an injunction and civil penalties, pursuant to Section 113(b) of the Clean Air Act (42 U.S.C 7413(b)). The Government requested an injunction requiring defendant to submit and comply with an expeditious schedule to achieve compliance with the requirements of 40 CFR 60.92. The government further prayed for civil penalties pursuant to Section 113(b), which authorizes civil penalties of up to $25,000 per day, for each day of violation from January 15, 1979, to the date of final compliance is achieved.

VII

The Iowa State Board of Regents agrees:

1. To achieve compliance with subrules 400-4.3(2)b and 4.3(2)d at the four boilers at the University of Iowa Oakdale Campus by October 30, 1980 or to utilize a non-polluting source of power until the boilers can be brought into compliance. ++EP++

Page 3

2. To pay a civil penalty in the amount of $4,600 for past violations of subrules 400--4.3(2)b and 4.3(2)d above.

It is further agreed that each party will bear its own costs.

Final judgment in favor of the plaintiff and against the defendant is hereby granted and ordered as the judgment in this action as set forth in the preceding provisions of this decree.

UNITED STATES DISTRICT JUDGE

ATTORNEY FOR IOWA STATE BOARD OF REGENTS

ROXANNE BARTON CONLIN

United States Attorney

HENRY F. ROMPAGE, Attorney

Environmental Protection Agency of Counsel ++EP++

^Z

ARIZONA ELECTRIC POWER COOPERATIVE, INC., (AEPCO)

01 OF 01

CONSENT DECREE

CAA

1993

APACHE GENERATING STATION

COCHISE, AZ

92-283 TUC RMB

09

CONSENT DECREE, USA, V ARIZONA ELECTRIC POWER COOPERATIVE, INC.

Page 1

VICKI A. O'MEARA

Acting Assistant Attorney General

Environment & Natural Resources Division

RICHARD L. BEAL

Trial Attorney

Environmental Enforcement Section

Environment & Natural Resources Division

301 Howard Street, Suite 870

San Francisco, California 94105

(415) 744-6485

LINDA A. AKERS

United States Attorney

District of Arizona

EUGENE R. BRACAMONTE

Assistant U. S. Attorney

4000 United States Courthouse

230 First Avenue

Phoenix, Arizona 85025

(602) 379-3011

Attorneys for Plaintiff, United States of America

STEPHEN M. DESENS

Desens & Hitchcock

Copper Queen Plaza

P.O. Box 87

Bisbee, Arizona 85603-0087

(602) 432-2279

Attorneys for Defendant Arizona

Electric Power Cooperative, Inc.

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

UNITED STATES OF AMERICA,

Plaintiff,

v.

ARIZONA ELECTRIC POWER

COOPERATIVE, INC.,

Defendant. ++EP++

Page 2

WHEREAS, Plaintiff, United States of America, on behalf of the Administrator of the United States Environmental Protection Agency, having filed a Complaint in the United States District Court for the District of Arizona, alleging that Defendant violated Sections 110, 111 and 113 of the Clean Air Act (the "Act"), 42 U.S.C. Sub-Section 7410, 7411 and 7413 (1991), and regulations promulgated thereunder, 40 C.F.R. Parts 52 and 60, and requesting civil penalties; and

WHEREAS, the parties have agreed that settlement of this action is in the public interest and that entry of this Consent Decree without further litigation is the most appropriate way to resolve this action and avoid protracted litigation costs and expenses;

THEREFORE, based on the pleadings, before taking testimony or adjudicating any issue of fact or law, and without any finding or admission of liability against or by Defendant,

IT IS ORDERED, ADJUDGED AND DECREED as follows:

I. PARTIES, JURISDICTION AND VENUE

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

2. Defendant, Arizona Electric Power Cooperative, Inc. ("Defendant" or "AEPCO"), is an Arizona corporation doing business in Arizona. ++EP++

Page 3

3. This Court has jurisdiction over the subject matter of this action and over the parties hereto pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and 28 U.S.C. Sub-Section 1331 and 1345. The Complaint alleges a claim upon which relief may be granted against the Defendant pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b).

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

5. AEPCO owns and operates a coal fired steam generating facility in Cochise, Arizona ("Apache Generating Station" or "facility"), which is subject to Standards of Performance for New Stationary Sources contained in 40 C.F.R. Part 60, Subpart A, and the Standards of Performance for Fossil-Fuel-fired Steam Generators codified at 40 C.F.R. Part 60, Subpart D. The facility also is subject to regulations pertaining to state air pollution programs, also known as the Arizona state implementation plan ("SIP"), codified at 40 C.F.R. Part 52.

II. APPLICABILITY

6. The provisions of this Consent Decree shall be binding on the United States on behalf of EPA, and on the Defendant, its officers, directors, agents, servants, employees, successors and assigns. Defendant shall give notice of this Consent Decree to any successors in interest prior to transfer of ownership and shall provide, within FIVE (5) days of the transfer of ownership, by certified mail with return receipt requested, a copy of the notice to EPA and to the U.S. Department of Justice, at the addresses listed in paragraph 15. ++EP++

Page 4

Transfer of ownership shall not relieve the Defendant of the obligations of this Consent Decree.

7. This Consent Decree resolves all claims and causes of action alleged in the Complaint and all claims asserted in two Findings of Violation, dated December 30, 1988 and March 20, 1992.

III. COMPLIANCE

8. The following definitions and related operating requirements shall apply whenever these terms are used in this Consent Decree:

a. START-UP

"Start-up" means the setting into operation of Steam Unit 2 or 3 for any purpose. The start-up sequence begins with the start of Steam Unit 2 or 3 boiler seal air fans. The following policy shall apply during periods of start-up:

(i) Steam Units 2 and 3 electrostatic precipitator ("ESP"): The ESP shall be placed in service as soon as practicable after initial start-up, but not until the ESP minimum inlet gas temperature remains at the manufacturer's design of 525 degrees Fahrenheit for a period of one-half hour. Under normal operating procedures, the minimum inlet temperature of gases entering the ESP is achieved utilizing gas ignitors. ++EP++

Page 5

This subparagraph a. defines the start-up sequence for the purpose of reporting excess opacity emissions.

(ii) Steam Units 2 and 3 Flue Gas Desulfurization System ("FGD"): The FGD system shall be placed in service within one hour after coal fires are in the boiler. This subparagraph a. defines the start-up sequence for the purpose of reporting excess sulfur dioxide emissions.

b. SHUTDOWNS

"Shutdown" means the cessation of operation of Unit 2 or Unit 3 for any purpose. The following policy shall apply during periods of shutdown:

(i) Steam Units 2 and 3 ESP: The normal shutdown sequence begins with the initiation of the boiler sootblowing cycle. The ESP shall remain in service until coal fires in the boiler are out or the minimum inlet temperature to the ESP falls below the manufacturer's design of 525 degrees Fahrenheit. This subparagraph b. defines the shutdown sequence for the purpose of reporting excess opacity emissions.

(ii) Steam Units 2 and 3 FGD system: The normal shutdown sequence begins with the initiation of the boiler sootblowing cycle. The FGD system shall remain in service until the last coal pulverizer of that respective unit is removed from service. This subparagraph b. defines the shutdown sequence for the purpose of reporting excess sulfur dioxide emissions. ++EP++

Page 6 c. MALFUNCTION

"Malfunction" means any sudden and unavoidable failure of air pollution control equipment, process equipment or a process to operate in a normal and usual manner, but does not include failures that are caused by poor maintenance, careless operation or any other upset condition or equipment breakdown which could have been prevented by the exercise of reasonable care.

d. EMERGENCY CONDITION

"Emergency Condition" means that period of time when:

(i) The electric generation output of Apache Generating Station with a malfunctioning FGD system or ESP cannot be reduced or electrical output must be increased because:

(a) All available system capacity within AEPCO interconnected with the affected unit is being operated, and

(b) All available purchase power interconnected with AEPCO is being obtained, or

(ii) The electric generation demand is being shifted as quickly as possible from the affected unit with a malfunctioning FGD system or ESP to one or more electric generating units held in reserve for AEPCO or a neighboring company, or

(iii) An affected unit with a malfunctioning FGD system or ESP becomes the only available unit to maintain a part or all of AEPCO's system emergency reserves and the unit is operated in spinning reserve at the lowest practicable electric generating load consistent with not causing significant physical damage to the unit. ++EP++

Page 7

If a unit is operated at a higher load to meet demand, an emergency condition does not exist unless the conditions under (i) of this definition apply.

9. Defendant shall install, maintain and operate (whenever the Apache Generating Station Steam Units 2 or 3 are in operation) the following procedures and particulate matter control devices to comply with the Act's requirement to maintain good air pollution control practices:

a. relocate the airheater sootblowers in Steam Unit 2 to direct the exhaust from the sootblowers through the inlet air side, so that the exhaust is recirculated through the Units' respective electrostatic precipitators. The redesigned and modified sootblowers shall be installed in Steam Unit 2 no later than December 31, 1992;

b. conduct flow model testing of the electrostatic precipitator by December 31, 1992.

c. modify the electrostatic precipitator inlet ladder vanes to minimize ash buildup in accordance with the recommendations of its flow-model contractor no later than December 31, 1993;

d. restrict ramping rates and implement load limitations to minimize ash reentrainment and minimize opacity during load pickup. Ramping rate restrictions to minimize ash reentrainment and minimize opacity will be implemented immediately and maintained continuously, insofar as safe and prudent operating practices and system conditions allow; ++EP++

Page 8

e. maintain the microprocessor precipitator voltage and rapper controls that were installed in Steam Units 2 and 3 and placed in operation in November 1991;

f. select fuels used to power Steam Units 2 and 3 at the Apache Generating Station to ensure that existing particulate emission control equipment will maintain both units in compliance with particulate matter emissions limitations. Prior to committing to any new coal supply, AEPCO will review the composition of the proposed coal supply to ensure acceptability; and

g. consistent with 40 C.F.R. Section 60.42(a)(2), prevent exhaust gas opacity in excess of 20%, except during periods of start-up, shutdown, malfunctions and emergency conditions.

10. Defendant shall implement (whenever the Apache Generating Station Steam Units 2 or 3 are in operation) the following procedures to comply with the Arizona SIP. These procedures do not apply to Steam Unit 2 when that unit is operating on natural gas as a primary fuel in accordance with ADEQ Installation Permit No. 1223.

a. subject to the operating conditions set forth in this decree relating to start-up, shutdown, malfunction, and emergencies, operate one of the two FGD scrubber towers attached to Steam Unit 2, whenever that unit is in operation and operating on coal or oil. ++EP++

Page 9

AEPCO can change FGD scrubber operations by obtaining an authorization for modification as described in Paragraph 10(d). If, while operating Steam Unit 2, the stack temperature falls to the level of or below the stack dewpoint temperature, AEPCO shall:

(i) discontinue scrubber operation, provided sulfur dioxide operating permit emission limits are not exceeded; or,

(ii) continue to operate the scrubber tower and report opacity as "moisture in stack" if compliance with the sulfur dioxide operating permit emission limits cannot be maintained without operating the scrubber,

b. subject to the operating conditions set forth in this decree relating to start-up, shutdown, malfunction, and emergencies, operate one of the two FGD scrubber towers attached to Steam Unit 3, whenever that unit is in operation and operating on coal or oil. AEPCO can change scrubber operations by obtaining an authorization for modification as described in Paragraph 10(d). If, while operating Steam Unit 3, the stack temperature falls to the level of or below the stack dewpoint temperature, AEPCO shall:

(i) discontinue scrubber operation, provided sulfur dioxide operating permit emission limits are not exceeded; or, ++EP++

Page 10

(ii) continue to operate the scrubber tower and report opacity as "moisture in stack" if compliance with the sulfur dioxide operating permit emission limits cannot be maintained without operating the scrubber,

c. Notify the Arizona Department of Environmental Quality and the EPA prior to the use of oil in Steam Unit 2 or 3 as a primary alternative fuel;

d. request an Arizona SIP Rule R18-2-302 applicability determination from ADEQ of any proposed major modification to Steam Unit 2 or 3 as defined in Arizona SIP Rule R18-2-101.56, or any proposed alteration to pollution control equipment associated with these units, including any proposed alteration or modification in the method of operation of these units as described in paragraph 10(a) and (b) which could affect emissions from these units.

11. Pursuant to Arizona SIP Rule R18-2-309, if emissions in excess of an emissions standard for sulfur dioxide or opacity occur at Steam Unit 2 or 3, AEPCO shall, in accordance with the reporting and time requirements of SIP Rule R18-2-314, demonstrate to EPA that:

a. the excess emissions resulted from a sudden and unavoidable breakdown of the process or control equipment; from unavoidable conditions during start-up, shutdown or resulted from unavoidable conditions during an upset of operations;

b. the air pollution control equipment, process equipment, or processes were at all times maintained and operated, to the maximum extent practicable, in a manner consistent with good practice for minimizing emissions; ++EP++

Page 11

c. where repairs were required, such repairs were made in expeditious fashion when AEPCO knew or should have known that applicable emission limitations were being exceeded and off-shift labor and overtime were utilized where practicable to ensure that such repairs were made as expeditiously as possible. If off-shift labor and overtime were not utilized, that such measures were impractical;

d. the amount and duration of the excess emissions (including any bypass operations) were minimized during periods of such emissions; and

e. the excess emissions are not part of a recurring pattern indicative of inadequate design, operation, or maintenance.

12. During emergency conditions within AEPCO, Steam Unit 2 or 3 may be operated with a malfunctioning FGD system if sulfur dioxide emissions are minimized by:

a. operating all operable FGD modules, and bringing back into operation any malfunctioning module as soon as repairs are completed;

b. bypassing flue gas around a module only when it has been taken out of operation because it is incapable of any sulfur emission reduction or when the module would suffer significant physical damage if it remained in operation. ++EP++

Page 12

13. During emergency conditions within AEPCO, Steam Unit 2 or 3 may be operated with a malfunctioning ESP if particulate emissions are minimized by:

a. operating all operable ESP sections of fields, and bringing back into operation any malfunctioning section of fields if repairs are possible;

b. removing either an ESP section of fields, or the ESP, only if it is incapable of any particulate emission reduction or will likely suffer significant physical damage if it remains in operation.

14. During emergency conditions AEPCO will comply with the reporting requirements of 40 C.F.R. Section 60.49.

IV. CIVIL PENALTIES

15. Defendant agrees to pay to the United States a total civil penalty of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000) in full settlement of all violations alleged in the Complaint. Payment shall be made by tendering a certified or cashier's check payable to the "Treasurer of the United States," to:

Linda A. Akers

United States Attorney

District of Arizona

4000 United States Courthouse

230 First Avenue

Phoenix, Arizona 85025

The certified or cashier's check in the sum of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000), shall be tendered not later than thirty (30) days after the entry of this Consent Decree by the Court. Interest at the rate set forth in paragraph 21 of this Consent Decree shall be payable on any amount of the civil penalty that is not paid within thirty (30) days after entry of the entry of this Consent Decree, commencing with the date of the entry by the Court. ++EP++

Page 13

A copy of the check and letter tendering the check shall be mailed to:

Kara Christenson

U.S. Environmental Protection Agency

Office of Regional Counsel, Region IX

Mail Code RC-2-1

75 Hawthorne Street

San Francisco, California 94105

and to:

Richard L. Beal

U.S. Department of Justice

Environmental & Natural Resources Division

Environmental Enforcement Section

301 Howard Street, Suite 870

San Francisco, California 94105

16. Civil penalties under this Consent Decree shall not be deducted by Defendant on its federal income tax return.

V. STIPULATED PENALTIES

17. If Defendant fails to comply with any of the following terms of this Consent Decree, Defendant shall be liable for stipulated penalties as follows:

a. failure to comply with the requirements of paragraph 9 (a), (b) and (c): $2,000 per day for the first seven (7) days of violation and $3,000 for each additional day AEPCO remains in violation;

b. each occurrence of opacity not in compliance with paragraph 9(g): no penalty for the first six minute period of exceedance; $250 for each six minute period of exceedance thereafter; ++EP++

Page 14

c. failure to comply with the requirements of paragraphs 10(a), (b) and (c): $15,000 per day until compliance with the requirements is achieved.

18. For violations that are subject to stipulated penalties in this Consent Decree, the United States expressly reserves the right to seek any other relief. If, however, the United States collects a stipulated penalty under this Consent Decree and subsequently seeks and is awarded a monetary penalty pursuant to the Clean Air Act for the same act or omission, AEPCO shall receive a credit against the Clean Air Act penalty for the stipulated penalty amount already paid by AEPCO for the act or omission. The United States reserves it right to seek injunctive relief under the Clean Air Act, and to seek relief under any other federal statute, or to seek any remedy available through contempt of court proceedings.

19. Any stipulated penalty accruing within a calendar month shall be delivered by Defendant to the United States Attorney's Office, together with a written statement describing the violations for which the penalty was imposed. The certified or cashier's check and written statement shall be paid, without demand, by the FIFTEENTH (15th) day of the month following the month in which the violation occurred, and a copy of the certified or cashier's check and the written statement shall be simultaneously sent by certified mail with return receipt requested to EPA and to the U.S. Department of Justice, at the addresses listed in paragraph 15. ++EP++

Page 15

In the event dispute resolution is sought by AEPCO pursuant to paragraph 24, and if AEPCO does not prevail in that process, payment shall be made within FIFTEEN (15) days following the conclusion of all dispute resolution proceedings, including judicial review. Stipulated penalty payments under this Consent Decree shall not be deducted by Defendant on its federal income tax return.

20. If Defendant fails to pay a stipulated penalty when due without demand, Defendant shall be liable, upon receipt of demand of payment from the United States, for the full amount of the accrued stipulated penalties, plus interest thereon at the interest rate set forth in paragraph 21. If Defendant agrees that it is liable for the demanded stipulated penalty, it shall submit to the United States Attorney's Office, along with the payment, a statement of interest believed to be due for that payment. A copy of the certified or cashier's check and written statement shall be simultaneously sent by certified mail with return receipt requested to EPA and to the U.S. Department of Justice at the addresses listed in paragraph 15. The United States Attorney's Office will advise Defendant if the amount of interest requires adjustment. If Defendant disputes a determination by the United States that it is liable for a stipulated penalty, Defendant shall initiate dispute resolution in accord with paragraph 24. Payment of the stipulated penalty may be withheld by Defendant pending dispute resolution. If dispute resolution results in a finding in the favor of the United States, the Defendant shall pay interest in accord with paragraph 21 for the delay in payment while the dispute was being resolved. ++EP++

Page 16

21. Interest shall accrue on the unpaid balance of the penalties due, in accordance with 28 U.S.C. Section 1961, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last 52-week U.S. Treasury bills settled immediately prior to the time of the due date in the case of the civil penalty, and at the time payment becomes due in the case of stipulated penalties and shall be included in each subsequent payment of penalties that becomes due under the terms of the Consent Decree.

22. If Defendant:

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

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

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

d. makes a general assignment for the benefit of creditors, then, at the option of the United States, the full balance of all outstanding penalties, civil or stipulated, together with all interest accrued at the rate specified in paragraph 21 of this Consent Decree, shall become immediately due and payable. ++EP++

Page 17

Defendant also shall be liable for attorneys' fees and costs incurred by the United States as a result of the implementation of this acceleration provision. Upon the occurrence of any of the events or conditions described in this paragraph, the Defendant shall give immediate notice, by certified mail with return receipt requested, to EPA and to the U.S. Department of Justice, at the addresses listed in paragraph 15.

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

VI. DISPUTE RESOLUTION

24. In the event that AEPCO objects to any decision by EPA made pursuant to this Consent Decree, AEPCO shall notify EPA of the dispute within ten (10) days of when it receives notice of EPA's decision. Any dispute shall in the first instance be the subject of informal negotiations among the parties. If the parties cannot resolve the dispute within fifteen (15) days after the time the dispute arises, AEPCO may present the dispute to the Court for appropriate resolution by written motion and notice. The decision of EPA shall control unless AEPCO files a motion for dispute resolution. The period for negotiation may be extended by mutual agreement of the parties. The time for filing of a motion for dispute resolution shall not be extended beyond sixty (60) days from the initial notice by AEPCO that a dispute exists. ++EP++

Page 18

Except as otherwise agreed by the parties, the filing of any such motion with the Court to resolve the dispute shall not serve to extend or postpone any obligation of AEPCO under this Consent Decree. The Court shall adopt EPA's proposed resolution of the dispute unless the Court determines that EPA's proposal is arbitrary and capricious, or not in accord with the objectives of this Consent Decree, the Clean Air Act, or other applicable law. In any dispute over the applicability of the stipulated penalties which are provided for by this Consent Decree, AEPCO shall have the burden of proving that it is not subject to the stipulated penalties.

VII. NOTICES, RECORDS, AND SUBMISSIONS

25. All notices, records, and submissions required in this Consent Decree, as applicable and except as expressly provided herein, shall be certified and in writing. Except as expressly provided herein, Defendant shall maintain all records required to be maintained by this Consent Decree at its principal place of business, or on site, as appropriate. Defendant shall make all records required by this Consent Decree available to EPA upon request. All notices and submissions required to be made by Defendant to EPA, the U.S. Department of Justice, or the United States Attorney's Office shall indicate Civil Action No. 92-383 TUC RMB (D. Ariz.), and shall be postmarked (using first class certified mail with return receipt requested) or hand delivered by the applicable due date to the addresses listed in paragraph 15. ++EP++

Page 19

26. All notices, records, and submissions required in this Consent Decree which purport to document compliance with the terms of this Consent Decree, shall contain a certification statement signed by a responsible official. The certification statement shall be as follows:

I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure the qualified personnel properly gather and evaluate the information submitted. Based upon my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge and belief, true, accurate and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fines and imprisonment for knowing violations.

A "responsible official" for purposes of this provision means a president, secretary, treasurer, or vice-president of the corporation, or any person who performs similar policy or decision-making functions for the corporation.

27. All records required under this Consent Decree shall be maintained for not less than two (2) years from the day on which they come into existence.

VIII. FORCE MAJEURE

28. If any event occurs which is beyond the control of AEPCO and which causes or is anticipated to cause noncompliance with the requirements of the Consent Decree, AEPCO shall notify EPA in writing in accordance with paragraph 25 of this Consent Decree and postmarked within five (5) business days of AEPCO's knowledge of such event, in the form of a declaration from a responsible corporate official. ++EP++

Page 20

The declaration shall describe in detail the cause of the noncompliance, the measures taken and to be taken by defendant to prevent or minimize the noncompliance, and the timetable by which those measures will be implemented. Defendant shall adopt all reasonable measures to avoid or minimize any such noncompliance. Financial or economic conditions, increased costs or expense anticipated with compliance or operator error or negligence shall not excuse noncompliance with the terms of this Consent Decree. If EPA determines that the noncompliance with the requirement of this Consent Decree is beyond AEPCO's control, then no stipulated penalties shall be due and owing under this Consent Decree as to that noncompliance. Failure by AEPCO to comply with the notice requirements of paragraph 25 shall render the force majeure provisions of this Consent Decree inapplicable to the circumstances as to which notice was not properly given unless AEPCO demonstrates good cause for such failure.

VII. GENERAL PROVISIONS

29. The parties agree and acknowledge that final approval by the United States and entry of this Consent Decree by the Court is subject to the requirements of 28 C.F.R. Section 50.7, which provides for notice of lodging of this Consent Decree in the Federal Register, an opportunity for public comment, and consideration of any comments. ++EP++

Page 21

30. The Court shall retain jurisdiction to modify and enforce the terms and conditions of this Consent Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Consent Decree until the Consent Decree terminates according to the terms of paragraph 33.

31. Each party shall bear its own costs and disbursements in this action.

32. This Consent Decree does not modify or affect in any way Defendant's responsibility to achieve and maintain compliance with all applicable federal, state and local laws, regulations, and permits. Compliance with this Consent Decree shall not be a defense to any action subsequently commenced pursuant to such laws, regulations, or permits for matters not covered by this Consent Decree.

33. Any authorized representative(s) of EPA (including a designated contractor), upon presentation of credentials, and without notice, may enter the premises of Defendant, or upon the site of operation of any fossil fuel fired steam generating plant owned or operated by Defendant, to determine compliance with the requirements of the Act and the provisions of this Consent Decree. In making this determination, EPA's authorized representative(s) may at reasonable times take samples and photographs, and inspect and copy any records that EPA's authorized representative(s) deems necessary. ++EP++

Page 22

This paragraph is in addition to, and not in limitation of, EPA's authority to investigate, inspect, or enter premises pursuant to any laws, permits, or regulations.

34. This Consent Decree shall terminate one (1) year after entry or on February 28, 1994, whichever is later, providing Defendant has fully complied with the requirements herein. The United States reserves the right to seek an extension of the applicable time period for the Consent Decree if the Defendant fails to fully comply with the requirements herein. In the event that the United States seeks an extension of the applicable time period, AEPCO reserves the right to seek modification of the Consent Decree.

IT IS SO ORDERED.

UNITED STATES DISTRICT JUDGE ++EP++

Page 23

WE HEREBY CONSENT to the entry of this Decree, subject to the public notice requirements of 28 U.S.C. Section 50.7.

FOR THE UNITED STATES OF AMERICA

/s/ SIGNATURE ILLEGIBLE

VICKI J. O'MEARA

Acting Assistant Attorney General

Environment & Natural Resources Division

United States Department of Justice

DATE 1-13-93

no signature

RICHARD L. BEAL

Environmental Enforcement Section

Environment & Natural Resources Division

United States Department of Justice

no signature

EUGENE R. BRACAMONTE

Assistant United States Attorney

District of Arizona

/s/ SIGNATURE ILLEGIBLE

HERBERT H. TATE, JR.

Assistant Administrator for Enforcement

U.S. Environmental Protection Agency

DATE 12/23/92

/s/ Daniel M. McGovern

DANIEL W. MC GOVERN

Regional Administrator

U.S. Environmental Protection Agency, Region IX

DATE 10.13.92 ++EP++

Page 24

FOR ARIZONA ELECTRIC POWER COOPERATIVE, INC.

/s/ L. Nick Buckelew

L. NICK BUCKELEW

President

Arizona Electric Power Cooperative, Inc.

P.O. Box 670

Benson, Arizona 85602-0670

DATE 9-22-92

/s/ Robert A. Hewlett

ROBERT A. HEWLETT

Corporate Counsel

Arizona Electric Power Cooperative, Inc.

P.O. Box 670

Benson, Arizona 85602-0670

Date 9/23/92

/s/ Stephen M. Desens

STEPHEN M. DESENS

Desens & Hitchcock

Copper Queen Plaza

P.O. Box 87

Bisbee, Arizona 85603-0087

Attorneys for Arizona Electric Power Cooperative,

Inc.

DATE 9-21-92 ++EP++

IN-TEK CONSTRUCTORS, INC

01 OF 01

PARTIAL CONSENT DECREE

CAA

1991

1991

91-353 WBS-JFM

09

PARTIAL CONSENT DECREE, U.S.A. V. IN-TEK CONSTRUCTORS, INC. (d.b.a. IN-TEK ENVIRONMENTAL SERVICES), IN-TEK WRECKING, INC., EL DORADO IMPROVEMENT CORPORATION, and SOUTH TAHOE REDEVELOPMENT AGENCY.

Page 1

BARRY M. HARTMAN

Acting Assistant Attorney General

Environment and Natural Resources Division

United States Department of Justice

GAIL E. KELLEHER

Environmental Enforcement Section

Environment and Natural Resources Division

United States Department of Justice

P.O. Box 7611, Ben Franklin Station

Washington, D.C. 20044

Telephone: (202) 514-3906

GEORGE L. O'CONNELL

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

Telephone: (916) 551-2700

Counsel for Plaintiff UNITED STATES OF AMERICA

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

UNITED STATES OF AMERICA,

Plaintiff,

v.

IN-TEK CONSTRUCTORS, INC.

(d.b.a. IN-TEK ENVIRONMENTAL

SERVICES), IN-TEK WRECKING,

INC., EL DORADO IMPROVEMENT

CORPORATION, and SOUTH TAHOE

REDEVELOPMENT AGENCY,

Defendants.

WHEREAS, Plaintiff, the United States of America, appearing on behalf of the United States Environmental Protection Agency ("EPA"), filed the Complaint in this matter on March 25, 1991; and ++EP++

Page 2

WHEREAS, the Complaint alleges violations by Defendant El Dorado Improvement Corporation ("EDIC") of the Clean Air Act, 42 U.S.C. Sub-Section 7401-7632 ("the Act"), and of the National Emission Standards for Hazardous Air Pollutants for asbestos ("Asbestos NESHAP"), promulgated pursuant to Section 112 of the Act, 42 U.S.C. Section 7412, and codified at 40 C.F.R. Part 61, Subpart M; and

WHEREAS, the United States and EDIC agree that entry of this consent decree is not to be deemed an admission by EDIC of liability for the violations alleged in the United States' Complaint, but to settle the disputes arising from said Complaint without litigation, EDIC agrees not to contest the jurisdictional allegations contained in the Complaint and agrees to the terms and entry of this Consent Decree; and

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

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

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

Page 3 I. JURISDICTION AND VENUE

1. Defendant EDIC is a corporation incorporated in the State of California.

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

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

II. DEFINITIONS AND PARTIES

4. "Defendant" shall mean EDIC, its agents, assigns and successors in interest.

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

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

III. APPLICABILITY

7. Each undersigned representative of a party to this Consent Decree certifies that he or she is fully authorized by the party which he or she represents to enter into the terms and ++EP++

Page 4

conditions of this consent Decree, and to execute and legally bind that party.

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

9. The provisions of this Consent Decree shall apply when defendant is an Owner or Operator of a Demolition or Renovation activity.

10. Defendant shall condition any and all contracts for Demolitions or Renovations subject to this Consent Decree on compliance with the terms of this Consent Decree.

IV. COMPLIANCE

11. Defendant shall comply in all respects with the requirements of the Asbestos NESHAP, as amended, 55 Fed. Reg. 48414-33 (Nov. 20, 1990) and the Act, as amended, Pub.L. No. 101-549, 104 Stat. 2399 (Nov. 15, 1990). ++EP++

Page 5 V. ASBESTOS MANAGEMENT PROGRAM

12. This section of the Partial Consent Decree requires EDIC to adopt the following program of operation designed to prevent violations of the Act, the Asbestos NESHAP, and the requirements of this Partial Consent Decree, including all appendices and any amendments thereto.

Part A. Inspection, Sampling, and Analysis

13. Prior to the commencement of any Demolition or Renovation Operation with respect to which Defendant is an Owner or Operator, the Defendant shall ensure that a diligent and complete survey and inspection of the relevant Facility for the presence of Regulated Asbestos Containing Material ("RACM") and Suspect RACM has been conducted in accordance with the Asbestos Bulk Sampling and Analysis Protocol, Appendix A, (hereinafter "Sampling Protocol"). Such inspection shall be conducted by a person trained in accordance with the requirements of Paragraph 18, certified and, if required, licensed to conduct such inspections (hereinafter "Asbestos Inspector"). The Defendant shall prepare a Survey Report detailing procedures used to identify RACM and Suspect RACM. Such Survey Report shall be prepared by the person who performed the survey and inspection, and retained by Defendant following completion of the Demolition or Renovation Operation. Where appropriate, the Defendant may adopt a prior Asbestos Inspector report conducted in conformity with the Sampling Protocol, Appendix A. ++EP++

Page 6

14. If any Suspect RACM is discovered at a Demolition or Renovation covered by this Partial Consent Decree, Defendant may elect to treat this material as RACM without sampling and analysis. However, before the Defendant may treat any Suspect RACM as non-RACM, Defendant shall collect and analyze samples of all Suspect RACM in adjoining structures or buildings not directly involved in the Demolition or Renovation Operation, over which it has care, custody or control, until:

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

b. all RACM has been completely removed from the Facility by a person trained in accordance with Paragraph 21, certified, and, if required, licensed in asbestos removal procedures ("Asbestos Abatement Worker").

15. If any RACM or Suspect RACM is discovered at a Facility owned or operated by the Defendant after a Demolition or Renovation Operation is already underway, Defendant shall immediately cease all work which could disturb the RACM or Suspect RACM. The Defendant shall not resume any activities which might disturb or preclude access to the RACM or Suspect RACM for removal until the material has been sampled, analyzed and, if found to be RACM, removed by a trained Asbestos Abatement Worker. Nothing in this Paragraph shall excuse Defendant from the obligation provided in paragraphs 13 and 14 above to conduct a diligent and complete survey for RACM and Suspect RACM before commencing any Demolition or Renovation Operation. ++EP++

Page 7

16. In the event of a Demolition where Defendant is an "owner or operator" ordered by a state or local governmental agency because the Facility is structurally unsound and in danger of imminent collapse or by eminent domain, the Defendant shall comply with the asbestos management requirements specified in the Asbestos NESHAP at 40 C.F.R. Section 61.145(c)(4) through (c)(10), 61.150, and 61.154, as amended.

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

Part B. Required Asbestos Training

18. EDIC shall not engage any person in the Demolition or Renovation of any Facility containing RACM, or to inspect a Facility for the presence of RACM or Suspect RACM, unless that person has complied with the EPA Required Asbestos training set forth in Appendix B of this Partial Consent Decree. ++EP++

Page 8

a. Inspector Training: The Defendant shall not engage any

person to inspect a Facility for RACM or Suspect RACM

who has not successfully completed an EPA-approved 3-day

inspector course of study. The course material shall

include, but not be limited to: (1) federal, state, and

local laws and regulations governing asbestos removal,

notification, handling, transport, and disposal

requirements; (2) practices and procedures for detection

and sampling of asbestos, control of asbestos fiber

releases, worker protection, equipment decontamination,

and (3) health effects of asbestos exposure. b. Asbestos Abatement Worker Training: The Defendant shall

not engage any person to perform maintenance, renovation,

asbestos stripping, removal, handling, clean-up, air

monitoring, transportation, or disposal activities,

including maintenance personnel who can reasonable be

expected to come into contact with asbestos during their

normal duties, unless that person has successfully

completed a 4-day EPA-approved training course for

Asbestos Abatement Workers. The course material shall

include, but not be limited to: (1) legal liabilities;

(2) work practice procedures; (3) the role of inspectors,

++EP++

Page 9

hygienists, and other asbestos experts; (4) governing

asbestos removal, notification, handling, transport, and

disposal; (5) worker and occupant safety issues; (6)

clean-up and disposal safety considerations; and (9)

health effects of asbestos exposure. c. No one engaged by the Defendant shall be deemed to have

"successfully completed" the training required by this

Paragraph unless and until he or she has passed the test

given by the EPA-approved training provider for the

relevant course of study or training program.

19. EPA-approved training courses are those given by the providers listed at 54 Fed. Reg. 8436-8484 (February 28, 1989) or in such other list as may hereafter be published by EPA.

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

21. Within thirty (30) days of entry of the Partial Consent Decree, Defendant shall inform all persons bound by this Partial Consent Decree of the following: (1) the requirements of this Partial Consent Decree; (2) the requirements of the Asbestos NESHAP; (3) what a worker must do if that worker discovers RACM ++EP++

Page 10

or Suspect RACM while working at a Facility, including a description of safety measures that worker can take in the event of site or personal contamination; (4) that asbestos is a hazardous material which could cause adverse health effects; and (5) not to handle, move, or otherwise disturb any RACM or Suspect RACM unless they are specially trained, licensed, and authorized to do so in accordance with this Partial Consent Decree. New employees subject to Paragraph 18 shall be given such instruction within thirty (30) days of being hired, and prior to conducting any activity that would disturb RACM.

22. Defendant shall give all employees who may be involved in Demolition or Renovation work, copies of Appendix B.

VI. PENALTIES

A. Civil Penalties

23. Plaintiff agrees that Defendant shall pay no civil penalty due to Defendant's demonstrated financial hardship.

B. Stipulated Penalties

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

a. Failure to comply with any of the training requirements in Paragraphs 18-22: $1,000 per person;

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

First Violation $15,000 ++EP++

Page 11

Second Violation $20,000

Third Violation $25,000

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

d. Failure to comply with any provision of the Partial Consent Decree not covered in subparagraphs a, b, or c above, $15,000 per day of violation.

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

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

26. If Defendant fails to pay Stipulated Penalties when due without demand, it shall be liable, upon receipt of demand for payment by the United States, for the full amount of the accrued Stipulated Penalties, plus interest thereon at the rate set forth in Paragraph 27, below. If the Defendant believes it is not liable for the demanded Stipulated Penalties, it may petition the ++EP++

Page 12

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

D. Interest Rates

27. Interest shall accrue on the unpaid balance of any penalties due, in accordance with 28 U.S.C. Section 1961, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last 52-week U.S. Treasury bills settled at the time the penalty payment becomes due and shall be included in each subsequent payment of penalties which becomes due under the terms of this Partial Consent Decree. The Defendant shall submit to the U.S. Attorneys' Office and EPA, no later than FIFTEEN (15) days of the payment date, a statement of interest believed to be due and owing for the upcoming payment. The U.S. Attorneys' Office will advise the Defendant in the event the amount of the interest calculated by the Defendant requires adjustment.

28. If the Defendant:

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

++EP++

Page 13

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

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

d. makes a general assignment for the benefit of creditors, then, at the option of the United States, the full balance of all outstanding penalties together with all interest accrued at the rate specified in Paragraph 27 of this Partial Consent Decree, shall become immediately due and payable. The Defendant shall also be liable for attorneys' fees and costs incurred by the United States as a result of the implementation of this acceleration provision. Upon the occurrence of any of the events or conditions described in this Paragraph, the Defendant shall give immediate notice to the United States Attorney's Office and the EPA.

29. Upon final entry of this Partial Consent Decree, the United States shall be deemed a judgement creditor for the purposes of collecting any stipulated penalties due under this Partial Consent Decree. In the event that any stipulated penalties are collected, payments under this Partial Consent Decree are not tax deductible. ++EP++

Page 14 VI. NOTICES AND SUBMISSIONS

30. All notices and submissions required in this Consent Decree, as applicable and except as expressly provided herein, shall be certified and in writing.

Any notice or submission to EPA made pursuant to this Consent Decree, other than those required by 40 C.F.R.Section61.145(b), shall:

a. be signed by a responsible official of EDIC, and

b. contain the following certification:

"I certify that the information contained in or accompanying

this (submission) (document) is true, accurate, and complete

to the best of my knowledge, information, and belief. As to

(the) (those) identified portion(s) of this (submission)

(document) for which I cannot personally verify (its) (their)

truth and accuracy, I certify as the company official having

supervisory responsibility for the person(s) who, acting

under my direct instructions, made the verification, that

this information is true, accurate, and complete to the best

of (his) (her) (their) knowledge, information, and belief."

All notices and submissions required to be made by Defendant to EPA or the U.S. Attorney's Office shall indicate the cause of action number for this case, and shall be postmarked (using first class certified or registered mail, postage prepaid) or hand delivered by the applicable due date to the following addresses as applicable.

a. For the United States Attorney, to:

George L. O'Connell ++EP++

Page 15

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

b. For EPA, to:

Director, Air and Toxics Division

United States Environmental Protection Agency Region 9

75 Hawthorne Street

San Francisco, California 94105

Attention: A-3-3

c. For the Department of Justice, to:

Gail E. Kelleher

U.S. Department of Justice

Environmental Enforcement Section

Environment and Natural Resources Division

P.O. Box 7611, Ben Franklin Station

Washington, D.C. 20044

d. Plaintiff will send all correspondence for Defendant EDIC

to:

El Dorado Improvement Corporation cc: Debrah A. Palmer Law Offices of Richard R. Hodge Feldman, Shaw & DeVore 1640 So. Sepulveda Blvd. Penthouse 2311 Lake Tahoe Blvd. Los Angeles, California 90025 South Lake Tahoe, CA 96150 VII. GENERAL PROVISIONS

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

32. This Consent Decree shall terminate two (2) years from the date of its entry. However, the United States shall have the ++EP++

Page 16

right to seek an extension during this period upon violation of the Consent Decree by Defendant, and if the United States moves for an extension for good cause prior to the expiration of the two year period, the Consent Decree will remain in effect at least until the Court has ruled on that motion. During the term of the Consent Decree, the Court shall retain jurisdiction over this matter to modify and enforce the provisions of this Consent Decree and to resolve disputes arising hereunder as may be necessary or appropriate for the construction or execution of this Consent Decree.

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

34. Each party consents to entry of this Consent Decree, subject to the public notice and comment provisions of 28 C.F.R.Section50.7.

35. Notwithstanding the terms of this Consent Decree, the settling Defendant agrees to respond to requests for discovery by Plaintiff under the Federal Rules of Civil Procedure, including but not limited to interrogatories, requests to admit, document requests, and depositions, as if the settling Defendant remained a party to the lawsuit, without requiring the service of a subpoena.

36. Each party shall bear its own costs and fees. ++EP++

Page 17 FOR THE UNITED STATES OF AMERICA, Plaintiff,

ILLEGIBLE SIGNATURE

John C. Cruden, Chief

Environmental Enforcement Section

Environment and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

/s/G. Kelleher

GAIL E. KELLEHER

U.S. Department of Justice

Environment and Natural Resources Division

P.O. Box 7611, Ben Franklin Station

Washington, D.C. 20044

GEORGE L. O'CONNELL

United States Attorney

Eastern District of California

3305 Federal Building

650 Capitol Mall

Sacramento, California 95814

/s/Herbert H. Tate, Jr.

HERBERT H. TATE, JR.

Assistant Administrator for Enforcement

U.S. Environmental Protection Agency

401 M Street, S.W.

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

Page 18

/s/Daniel W. McGovern

DANIEL W. McGOVERN

Regional Administrator

U.S. Environmental Protection Agency, Region 9

75 Hawthorne Street

San Francisco, California 94103

FOR EL DORADO IMPROVEMENT CORPORATION, Defendant

By: Deborah A. Palmer

Deborah A. Palmer

Feldman, Shaw & Devore

2311 Lake Tahoe Boulevard

South Lake Tahoe, California 96150

Approved and judgement entered in accordance with the foregoing Consent Decree in Sacramento, California this day of , 1991.

UNITED STATES DISTRICT JUDGE

Eastern District of California

OF COUNSEL:

Veronica S. Eady

Assistant Regional Counsel

U.S. Environmental Protection Agency

Region 9

75 Hawthorne Street

San Francisco, California 94105

John Rudd

Attorney Advisor

U.S. Environmental Protection Agency

401 M Street, S.W.

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

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

A. GENERAL

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

B. SAMPLING

1. Asbestos bulk samples shall be collected only by a person

who has completed the Asbestos Inspection training

specified in Paragraph 18(a) of the Partial Consent Decree. 2. All asbestos bulk samples shall be collected in a random

manner, using the grid system described in the EPA "Pink

Book," and shall be made up of a core which has fully

penetrated the Suspect RACM. 3. If the homogeneous area of the Suspect RACM is less than

1000 linear or 1000 square feet, at least three (3) bulk

samples shall be collected from each homogeneous area. 4. If the homogeneous area of the Suspect RACM is at least

1000 linear or 1000 square feet but less than 5000 ++EP++

App A-2

square feet, at least five (5) bulk samples shall be

collected from each homogeneous area. 5. If the homogeneous area of suspect RACM is at least 5000

linear or 5000 square feet, at least seven (7) bulk samples

must be collected from each homogeneous area.

C. LABORATORY ANALYSIS

Samples shall be analyzed only by an EPA-accredited

laboratory listed in 54 Fed. Reg. 8468-82 (Tuesday, February

28, 1989).

D. SAMPLE RESULTS

1. Defendant may consider a homogenous area to be RACM without

analyzing any remaining samples if one bulk sample analysis

shows more than 1% asbestos. 2. If all samples required to be collected are fond by an

EPA-accredited laboratory not to contain more than 1%

asbestos, then the homogenous area may be treated as

non-RACM.

E. SAMPLE DOCUMENTATION

1. Each sample collected shall be immediately place in a sealed

leak-tight container; numbered both sequentially and with an

identification number unique to the sampling area and the

facility; dated; and identified by the initials of the

inspector taking the sample. 2. The location from which each sample is taken shall be

concurrently noted by sample number on a graphic ++EP++

APP A-3

depiction of the facility containing the information

specified in Subparagraph E(3)(b) below. If more than one

person is inspecting the facility, each inspector shall use

a separate graphic depiction and date and initial the same. 3. The following sample records shall be made and maintained on

file by the Defendant:

(a) an inspection report with the date of the inspection,

signed by the person making the inspection;

(b) an inventory and graphic depiction of the Demolition or

Renovation Operation, showing the locations of the

homogenous area where samples are collected, exact

location where each bulk sample is collected, dates

when samples are collected, homogenous areas where

friable samples are collected, homogenous area where

friable Suspect RACM is assumed to be RACM and has

therefore not been sampled, homogenous areas where

non-friable Suspect RACM is assumed to be RACM and has

therefore not been sampled, and areas where samples

taken were determined by an EPA-Accredited Laboratory

to be RACM;

(c) a description of the manner used to determine sampling

location, the name and signature of each ++EP++

APP A-4

inspector who collected the samples, and evidence of

his/her qualifications;

(d) a list of the type of materials which make up each

homogenous are (e.g., surfacing, thermal system

insulation);

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

and

(f) laboratory reports for each asbestos bulk sample of

RACM and Suspect RACM taken at the Demolition or

Renovation Operation. ++EP+

MAGMA COPPER COMPANY

DOC 01 OF 01

CONSENT DECREE

09-88-C001

CAA

METAL

19870928

19870988

AZD001886597

MAGMA COPPER COMPANY SAN MANUE

SAN MANUEL,AZ

87-106-TUC-WDB

09

CONSENT DECREE, USA, STATE OF ARIZONA AND ENVIRONMENTAL DEFENSE FUND, INC V. MAGMA COPPER COMPANY.

Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA TUCSON DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

STATE OF ARIZONA,

Intervenor,

ENVIRONMENTAL DEFENSE FUND, INC.,

Intervenor,

v.

MAGMA COPPER COMPANY,

Defendant.

WHEREAS, the plaintiff United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a Complaint in this action, alleging violations by the defendant Magma Copper Company ("Magma") at the San Manuel copper smelter owned and operated by Magma near San Manuel, Pinal County, Arizona ("the Smelter"), of the Clean Air Act, 42 U.S.C. Section 7401-7642 ("the Act"), and of the Arizona State Implementation Plan provisions for sulfur dioxide ("Arizona SO2 SIP"), for particulate matter ("Arizona PM SIP") amd for opacity ("Arizona Opacity SIP"), applicable to copper smelters, adopted by the State and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410; and

WHEREAS, the State of Arizona ("the State"), on behalf of the Arizona Department of Health Services ("ADHS"), has intervened in this action pursuant to Section 304(b)(1)(B) of the Act, 42 U.S.C. Section 7604(b)(1)(B), to enforce the requirements of Arizona Compilation of Rules and Regulations ("A.C.R.R.") R9-3-515 against the Smelter; and ++EP++

Page 2

WHEREAS, Magma is a Delaware corporation doing business in the State of Arizona; and

WHEREAS, the Smelter is located in a non-attainment area for the sulfur dioxide National Ambient Air Quality Standards ("SO2 NAAQS") and an attainment area for the particulate matter National Ambient Air Quality Standards ("PM NAAQS"); and

WHEREAS, the Smelter is a major stationary source of sulfur dioxide ("SO2") and particulate matter ("PM") emissions within the meaning of Section 302(j) of the Act, 42 U.S.C. Section 7602(j); and

WHEREAS, Magma intends to bring the Smelter into continuous compliance with the Arizona SIP and with all other applicable air pollution laws on or before November 1, 1988, by installing a replacement Flash Furnace and associated support facilities (including, but not limited to, an Oxygen Plant and a concentrate Dryer), and by upgrading the Smelter's continuous air pollution control equipment and installing new Fugitive Emissions control equipment; or earlier if Magma fails to obtain the financing necessary to upgrade the Smelter; and will, during the Interim Period, take certain other actions at the Smelter: (1) to reduce SO2 and PM emissions from the Smelter; (2) to prevent the Smelter from causing exceedances and violations of the SO2 NAAQS; (3) to reduce short-term peak concentrations of SO2 caused by emissions from the Smelter; and (4) to otherwise assure that procedures governing the continued operation of the Smelter will protect the public health and welfare; and ++EP++

Page 3

WHEREAS, Magma will design the new pollution control equipment with an engineering criterion that Smelter emissions will not cause one-hour SO2 concentration levels greater than 0.50 ppm; and

WHEREAS, Magma disputes the allegations of the Complaints filed by the United States and by the State herein and denies that it has violated the Act or the Arizona SIP or any Arizona statute or regulation at the Smelter as alleged by EPA or the State in their respective Complaints, but to settle the disputes arising from said Complaints in this action without litigation, Magma agrees not to contest the jurisdictional allegations contained in the Complaints and agrees to the terms and entry of this Consent Decree; provided, however, that Magma does not consent to entry of a decree with terms and conditions materially different from those contained in this Consent Decree; and

WHEREAS, A.R.S. Section 36-1707.01.E provides that the Director of the Arizona Department of Health Services (the "Director") may issue an operating permit consistent with the terms of a consent decree entered by a court of competent jurisdiction; and

WHEREAS, the Director, after entry of this Consent Decree, will issue an operating permit to the Smelter consistent with the terms of the Decree; and

WHEREAS, the parties agree that operation of the Smelter during the Interim Period and in compliance with the Interim Period Compliance Program specified herein will protect the public health and welfare, ensure expeditious final compliance with the Act and Arizona air quality laws, and enable Magma to install process modifications, upgrade existing continuous air pollution controls, and install new Fugitive Emissions control equipment at the Smelter; and ++EP++

Page 4

WHEREAS, for the purpose of settling this litigation and to resolve the other outstanding issues recited above, without trial of any issue of fact or law, the parties, by and through their attorneys and authorized representatives, have each consented to and have moved the Court to enter this Consent Decree;

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

I. JURISDICTION AND VENUE 1. Subject matter jurisdiction

a. Plaintiff. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Sections 1331, 1345, and 1355, and Section 113 of the Act, 42 U.S.C. Section 7413. The Complaint states a claim upon which relief can be granted against Magma under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and under the Arizona Opacity, PM, and SO2 SIPs.

b. Intervenor. This Court has jurisdiction over the subject matter of this action pursuant to F.R.C.P. 24(a) and Section 304(b)(1)(B) of the Act, 42 U.S.C. Section7604(b)(1)(B). The Intervenor's Complaint states a claim upon which relief can be granted against Magma under Section 304(b)(1)(B) of the Act. ++EP++

Page 5

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

II. SETTLEMENT IN PUBLIC INTEREST AND EFFECTIVE DATE

3. a. The parties to this Consent Decree agree, and the Court finds, that this action and this Consent Decree constitute diligent prosecution of the Act with respect to the claims alleged in the Complaints herein, and that settlement of this action without further litigation is in the public interest and is the most appropriate means of resolving this action.

b. Except where a different date is specified herein, Magma agrees to be bound by the terms and conditions of this Consent Decree upon its lodging with the Court. The terms and conditions of this Consent Decree shall cease to bind Magma, however, if the Court denies a motion to enter the Consent Decree.

III. PERSONS BOUND

4. This Consent Decree shall apply to and be binding upon Magma, its officers, directors, divisions, subsidiaries, successors in interest and assigns, upon the United States on behalf of EPA, and upon the State on behalf of ADHS. Magma shall give written notice of this Consent Decree and its obligations thereunder to all such persons bound by its terms with responsibility for carrying out the requirements of this Consent Decree, and shall submit to EPA and to the State a copy of any such notice postmarked within fifteen (15) days after giving the notice. ++EP++

Page 6

Each undersigned representative certifies that he or she is fully authorized to execute this Consent Decree and to legally bind the party he or she represents to this document. Magma shall give written notice of this Consent Decree and its obligations thereunder to any successors in interest or assigns prior to any transfer or assignment of ownership in, or operation of the Smelter, and shall submit to EPA and to the State a copy of any such notice postmarked within fifteen (15) days after giving the notice.

IV. DEFINITIONS

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

a. "Acid Plant" -- A facility at the Smelter producing sulfuric acid by the contact process, including all ancillary equipment.

b. "ADHS" -- The Arizona Department of Health Services including the Office of Air Quality ("OAQ") within the Division of Environmental Health Services.

c. "Applicable Final Compliance Laws" -- The State and Federal air pollution requirements with which the Smelter must comply on and after the Final Compliance Date: ++EP++

Page 7

(i) "Arizona Opacity SIP" -- A.C.R.R. R9-3-501, approved by EPA as part of the Arizona State Implementation Plan ("Arizona SIP") on April 23, 1982, 47 Fed. Reg. 17483;

(ii) "Arizona Opacity Limitation" -- A.C.R.R. R9-3-515.B.4;

(iii) "Arizona SO2 SIP" -- A.C.R.R. R9-3-515.A and C, approved by EPA as part of the Arizona SIP on January 14, 1983, 48 Fed. Reg. 1717;

(iv) "Arizona SO2 Limitation" -- A.C.R.R. R9-3-515.A and C;

(v) "Arizona PM SIP" -- 40 C.F.R. 52.126(b), promulgated by EPA as part of the Arizona SIP on May 14, 1973, 38 Fed. Reg. 12704;

(vi) "Arizona PM Limitation" -- A.C.R.R. R9-3-515.B.1;

(vii) "Federal NSPS" -- 40 C.F.R. 60, Subparts A and P;

(viii) "Arizona NSPS" -- A.C.R.R. R9-3-801 ad -814; and

(ix) any other applicable State and Federal air pollution requirements.

d. "Bypass" or "Bypassing" -- A condition in which emissions (except Fugitive Emissions or captured Fugitive Emissions) from the Flash Furnace or converters are released to the atmosphere without treatment by the Acid Plant; provided, however, that for purposes of Paragraph 34 of this Consent Decree such condition shall not constitute Bypass if Magma demonstrates to EPA's and OAQ's satisfaction that due to sudden, unavoidable, non-recurrent, and non-repetitious failure of process or control equipment emergency venting was temporarily and unavoidably necessary to release otherwise dangerous levels of pressure so as to prevent serious injury to personnel or equipment. ++EP++

Page 8

e. Continuous Emissions Monitoring Systems ("CEMS") -- The total equipment required under federal and state regulations to continuously sample and condition (if applicable), to analyze, and to provide a permanent record of emissions or process parameters.

f. "Curtailment Decision" -- An order by the SCS meteorologist specifying a reduction of the quantity of sulfur dioxide emissions from the Smelter, the reason for the curtailment and the degree of the curtailment (as provided in Appendix C, Subsection IV(F)) in order to prevent Exceedances of the SO2 NAAQS and the Interim Short-Term Peak Concentration Levels within the Smelter's DLA.

g. "Designated Liability Area" or "DLA" -- The geographic area within a radius of forty (40) kilometers from the center point of the converter stack at the Smelter.

h. "Director" -- Prior to July 1, 1987, the Director of the Arizona Department of Health Services; on and after July 1, 1987, the Director of the Arizona Department of Environmental Quality. ++EP++

Page 9

i. "Discontinuance Notification Date" -- The earliest date when Magma:

(i) first fails to submit a statement in the Monthly Compliance Report as required pursuant to Paragraph 29 of this Consent Decree that it has all financing commitments necessary to continue for the next month the construction schedules set forth in Paragraph 23 of this Consent Decree; or

(ii) files for bankruptcy under any provision of the United States Bankruptcy Code; or

(iii) first fails to pay any stipulated penalty accruing under this Consent Decree within the time required by Paragraph 40 of this Consent Decree.

j. "Co-located Monitors" -- Co-located Monitors shall include the existing LDS and OAQ monitors set forth in Appendix C to this Consent Decree, and such other monitors as may be designated as co-located by EPA and OAQ.

k. "Dryer" -- A facility in which a copper sulfide ore concentrate charge is heated in the presence of air to eliminate a portion of the moisture from the charge, provided less than 5 percent of the sulfur contained in the charge is eliminated in such facility.

1. "Episode" -- A period of time in which SO2 emissions from the Smelter cause an Exceedance of either of the Interim Short-Term Peak SO2 Concentration Levels at any SCS monitor. In the event that more than one Exceedance occurs at one or more monitors, an Episode commences at the time that the first Exceedance begins and terminates at the end of the clock hour following the clock hour in which the first Exceedance begins. ++EP++

Page 10

The term Episode does not apply to any Exceedance of the SO2 NAAQS.

m. "Exceedance of the SO2 NAAQS" -- An ambient SO2 concentration anywhere within the Smelter DLA greater than any one of the SO2 NAAQS.

n. "Exceedance of the Short-Term Peak SO2 Concentration Levels" -- An ambient SO2 concentration anywhere within the DLA greater than any one of the Short-Term Peak SO2 Concentration Levels.

o. "Final Compliance Date" --

(i) No later than November 1, 1988, if the Smelter complies with the Applicable Final Compliance Laws by installing a replacement Flash Furnace and upgrading the Smelter's air pollution control equipment in accordance with Paragraph 23 of this Consent Decree; or

(ii) No later than one hundred and fifty (150) days from the Discontinuance Notification Date or on November 1, 1988, whichever is earlier, on which date Magma shall comply with the Applicable Final Compliance Laws by permanent cessation of Smelting in accordance with Paragraph 29 of this Consent Decree.

p. "Flash Furnace" -- A smelting furnace that uses the heat from partial oxidation of the sulfide charge to provide much or all of the energy required for Smelting. ++EP++

Page 11

q. "Fugitive Emissions" or "Fugitive Gases" -- Any air pollution emissions released by the Smelter into the atmosphere other than from a stack.

r. "Fugitive Impact Monitor" -- Any ambient SO2 monitor used to evaluate the impact of Fugitive Emissions on ambient air quality.

s. "Fugitive Systems" -- Any systems (other than primary hoods) used to reduce Fugitive Emissions from any Smelting process.

t. "Interim Period" -- The time commencing immediately upon lodging of this Consent Decree and until the Final Compliance Date.

u. "Interim Period Compliance Program" -- The requirements set forth in Paragraphs 9-14 and in Appendices A-C of this Consent Decree.

v. "Monthly Compliance Report" -- The report required to be submitted by Magma to EPA and OAQ each month as specified in Paragraphs 29 and 36 of this Consent Decree.

w. "Oxygen Plant" -- The facility at the Smelter that produces oxygen gas for use in Flash Furnace or converter operations.

x. "Smelter Operational Period" or "SOP" -- The number of hours in each calendar month in which SO2 is emitted from the Smelter. ++EP++

Page 12

y. "SO2 NAAQS" -- The primary and secondary National Ambient Air Quality Standards for SO2, as set forth in 40 C.F.R. Sections 50.4 and 50.5.

z. "Smelting" or "Smelt" -- The production of any non-ferrous metal through the use of pyrometallurgical techniques.

aa. "Short-Term Peak SO2 Concentration Levels" --

(i) "Interim Short-Term Peak SO2 Concentration Levels":

(a) Six-Minute Average: An ambient SO2 concentration anywhere in the DLA in excess of 4590 micrograms per cubic meter ("ug/m3") (1.75 parts per million (ppm)), calculated on a six-minute average, and

(b) One-Hour Average: An ambient SO2 concentration anywhere in the DLA in excess of 1970 ug/m3 (0.75 ppm), calculated on a one-hour average.

(ii) "Final Short-Term Peak SO2 Concentration Design Criterion Level": An ambient SO2 concentration anywhere in the DLA in excess of 1300 ug/m3 (0.50 ppm), calculated on a one-hour average.

bb. "Supplementary Control System" or "SCS" -- The equipment and procedures set forth in Paragraph 14 and Appendix C of this Consent Decree, as they may be amended from time to time in accordance with this Consent Decree, for limiting the concentration of SO2 within the DLA during the Interim Period by varying Smelter emissions of SO2 according to atmospheric conditions. ++EP++

Page 13 V. SMELTER NSO APPLICATIONS

6. a. On May 16, 1985, Magma applied to the State pursuant to Section 119 of the Act, 42 U.S.C. Section 7419, 40 C.F.R. Part 57, and A.C.R.R. R9-3-701, for a nonferrous smelter order ("NSO") for the Smelter.

b. On November 12, 1986, the State proposed to issue to Magma an NSO for the Smelter.

c. On November 28, 1986, Magma submitted a letter of intent to apply separately to EPA for an NSO.

7. Upon entry of this Consent Decree, Magma shall withdraw immediately all NSO application(s) and its letter of intent and shall not reapply to the State or to EPA thereafter for an NSO for the Smelter.

VI. COMPLIANCE PROGRAM

8. The purposes of this Consent Decree are to: (a) establish a schedule and method whereby the Smelter will expeditiously comply with the Applicable Final Compliance Laws (1) by installing a replacement Flash Furnace and associated support facilities (including, but not limited to, an Oxygen Plant and a concentrate Dryer), and by upgrading existing continuous air pollution control equipment at the Smelter (including, but not limited to, the Acid Plant) and by installing new Fugitive Emissions control equipment (including, but not limited to, secondary hoods on the converters and a converter offgas handling system) or, (2) in the event that Magma fails to obtain the financing necessary to upgrade the Smelter or files for bankruptcy or fails to pay stipulated penalties under this Consent Decree, by permanent cessation of Smelting on or before the Final Compliance Date; (b) provide for the payment by Magma of civil penalties under Section 113 of the Act for alleged past violations of the Act by the Smelter and until the Final Compliance Date, as set forth in the Plaintiff's Complaint and as calculated in accordance with EPA's Clean Air Act Civil Penalty Policy dated September 1984; (c) assure continued operation of the Smelter during the Interim Period in a manner that will protect public health and welfare; (d) provide additional public health and welfare protection by reducing short-term peak SO2 concentrations in the DLA; (e) settle disputes among the parties regarding Magma's application(s) for an NSO and regarding the allegations of the Complaints; and (f) specify the law and procedures applicable to the Smelter during the Interim Period and on and after the Final Compliance Date. ++EP++

Page 14 A. Interim Period Compliance Program

9. Purposes. EPA, the State and Magma agree that the Interim Period Compliance Program, set forth in this Subpart of the Consent Decree, is intended to achieve reductions of SO2 and PM emissions from the Smelter during the Interim Period and to assure that the Smelter is operated during the Interim Period in a manner that protects the public health and welfare.

10. Protection of Ambient Air Quality. During the Interim Period, Magma shall not cause or contribute to ambient concentrations of SO2 within the DLA in violation of: (i) the SO2 NAAQS, or (ii) either of the Interim Short-Term Peak SO2 Concentration Levels. ++EP++

Page 15

a. For purposes of this Paragraph of this Consent Decree, violations of the SO2 NAAQS shall be determined in the following manner:

(i) Annual Average: An annual arithmetic average concentration greater than 80 ug/m3 (0.03 ppm) at any monitor shall constitute a violation. Violations at different monitors shall constitute separate violations. Annual averages shall be calculated on a calendar year basis.

(ii) 24-Hour Average: At each monitor, a 24-hour average concentration shall be calculated at the beginning of each clock hour for the previous 24-hour period. Any 24-hour average concentration greater than 365 ug/m3 (0.14 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any one monitor. For the purpose of determining this one-time annual exception, only one 24-hour average concentration in excess of the SO2 NAAQS is allowed anywhere in the SCS network of ambient air quality monitors, not one 24-hour average concentration Exceedance at each monitor. At any given monitor, separate Exceedances of the 24-hour standard shall not contain overlapping hourly readings. Simultaneous violations at more than one monitor shall constitute separate violations.

(iii) 3-Hour Average: At each monitor, a 3-hour average concentration is to be calculated at the beginning of each clock hour for the previous 3-hour period. ++EP++

Page 16

Any 3-hour average concentration greater than 1300 ug/m3 (0.50 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any one monitor. For the purpose of determining this one-time annual exception, only one 3-hour average concentration in excess of the 3-hour standard is allowed anywhere in the SCS network of ambient air quality monitors, not one 3-hour average concentration Exceedance at each monitor. At any given monitor, separate Exceedance of the 3-hour standard shall not contain overlapping hourly readings. Simultaneous violations at more than one monitor shall constitute separate violations.

b. For purposes of this Paragraph of this Consent Decree, violations of the Interim Short-Term Peak SO2 Concentration Levels within the DLA shall be determined in the following manner:

(i) Six-Minute Average: At each monitor, a three-minute average concentration is to be calculated at the beginning of each three-minute period (starting on the clock hour) for the previous three-minute period. A six-minute average is then to be calculated at the beginning of every six-minute period (starting on the clock hour) based on the previous two consecutive three-minute averages. Any six-minute average concentration greater than 4590 ug/m3 (1.75 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any one monitor. For the purpose of determining this one-time annual exception, only one six-minute average concentration in excess of the Interim Short-Term Peak SO2 Concentration Level is allowed anywhere in the SCS network of ambient air quality monitors, not one six-minute average concentration Exceedance at each monitor. ++EP++

Page 17

(ii) One-Hour Average: At each monitor, a one-hour average concentration is to be calculated at the beginning of each clock hour for the previous hour. Any one-hour average concentration greater than 1970 ug/m3 (0.75 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any one monitor. For the purpose of determining this one-time annual exception, only one 1-hour average concentration in excess of the Interim Short-Term Peak SO2 Concentration Level is allowed anywhere in the SCS network of ambient air quality monitors, not one 1-hour average concentration Exceedance at each monitor.

c. For purposes of this Paragraph, simultaneous violations at Co-located Monitors shall not constitute separate violations.

11. Sulfur Input Limit. During the Interim Period, Magma shall not process more than 250,000 tons of input sulfur in any twelve (12) month period, calculated as of the first day of each month (after the first twelve (12) full months of the Interim Period) for the preceding twelve (12) months, based on the calculation procedures set forth in Appendix A. ++EP++

Page 18

12. Sulfur Removal Limit. During the Interim Period, Magma shall achieve at least sixty-three (63) percent overall sulfur removal. Overall sulfur removal percentages shall be determined on a three-month rolling average basis using the procedures set forth in Appendix B; provided, however, that separate violations of this Sulfur Removal Limit shall not contain overlapping monthly averages, and that the calculation of three-month averages shall exclude any periods (not to exceed a total of 56 days) in which one or both trains of the Acid Plant are inoperable as a result of construction work necessary to convert the Acid Plant to a double-contact/double-absorption process in accordance with Paragraph 23(c) of this Consent Decree.

13. Interim PM Emissions Limit. During the Interim Period, Magma shall comply with the Interim PM Emissions Limit specified in A.C.R.R. R9-3-515.B.5.

14. SCS System. Magma shall modify and implement its SCS as follows:

a. Curtailment Decisions: During the Interim Period, magma shall prevent SO2 NAAQS and Interim Short-Term Peak SO2 Concentration Level Exceedances within the DLA by implementing the Curtailment Decision procedures in the SCS Operating Manual, Appendix C ("Manual").

b. Existing Ambient SO2 Monitoring Network:

(i) Magma shall continue to maintain as part of the SCS the existing ambient SO2 monitors at the seven (7) locations set forth in Appendix C. ++EP++

Page 19

(ii) Within forty-five (45) days of lodging of this Consent Decree, Magma shall run EPA approved Complex I and ISC dispersion models for both stack and Fugitive Emissions to determine areas of expected highest ambient concentrations of SO2 in the Smelter DLA, and shall submit the results of the modeling by registered or certified mail postmarked within the prescribed period to EPA and OAQ for written approval.

(iii) EPA and OAQ may thereafter, as appropriate to ensure maintenance of SO2 NAAQS and Interim Short-Term Peak SO2 Concentration Levels within the DLA, select not more than five (5) additional monitoring sites, including the sites selected for the Fugitive Impact Monitor(s). These selections shall be based upon professional judgment and dispersion modeling, and shall give reasonable consideration to access to the sites, and to the availability of electrical power, radio communications, and security for the sites.

(iv) As soon as practicable, and within ninety (90) days of being notified in writing by EPA and OAQ of any site selection, Magma shall install, operate, and maintain an ambient SO2 monitor at each site selected in accordance with subparagraph (iii).

(v) Except as provided in subparagraph (vi), Magma shall not be required to operate more than nine (9) monitoring sites as part of the SCS. EPA and OAQ shall have the right to determine which of the monitoring sites shall be operated as part of the SCS and EPA and OAQ may change their determination upon fourteen (14) days written notice to Magma. ++EP++

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Magma shall collect data for each day from the monitors installed at sites not required to be part of the SCS, by the close of business on the next business day and shall review such data within two (2) business days from collection. In the event EPA and OAQ determine that more than one new site shall be operated as part of Magma's SCS, Magma may disconnect receipt of data by the SCS from the ambient SO2 monitor at the existing Mammoth monitoring site and, if more than two new sites, from the existing colocated OAQ monitoring site.

(vi) If at any time an Exceedance of the SO2 NAAQS or Interim Short-Term Peak SO2 Concentration Levels occurs at any monitor operated by Magma that is not part of its SCS, EPA and OAQ may, as appropriate to ensure maintenance of SO2 NAAQS and Interim Short-Term Peak SO2 Concentration Levels within the DLA, require Magma to include that monitor as part of its SCS. In determining whether such a requirement is appropriate, EPA and OAQ shall give reasonable consideration to the relationship between the Exceedance at that non-SCS monitor and contemporaneous ambient SO2 concentrations at monitors already operated as part of the SCS. In the event that EPA and OAQ require inclusion of a non-SCS monitor in Magma's SCS, Magma may remove some other monitor from its SCS system after Magma demonstrates to the satisfaction of EPA and OAQ that the monitor proposed to be removed from the SCS is not necessary for protection of the SO2 NAAQS and the Interim Short-Term Peak SO2 Concentration Levels within the DLA. Magma shall submit its demonstration for removal, if any, to EPA and OAQ postmarked within ten (10) working days of receipt by Magma of written notification that addition of a non-SCS monitor to the system is required. ++EP++

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(vii) If a requirement to include a monitor in Magma's SCS is imposed under subparagraph (vi) above, and Magma is permitted to remove some other monitor from its SCS, Magma shall comply with the requirement within ten (1) working days of receipt by Magma of written notification that removal of an existing SCS monitor from the system is permitted. If a requirement to include a monitor in Magma's SCS is imposed under subparagraph (vi) above, and Magma is not permitted to remove some other monitor from its SCS, Magma shall comply with the requirement within ninety (90) days of receipt by Magma of written notification that inclusion of the monitor is required.

c. SCS Manual.

(i) Postmarked within thirty (30) days of lodging of this Consent Decree, Magma shall submit a revised SCS Manual, Appendix C to this Consent Decree, to EPA and OAQ for review. The revisions to the Manual shall ensure that the system takes account of EPA approved predictive models for complex terrain and fugitive impacts and that Magma utilizes SO2 emission values in pounds per hour from the roof monitoring CEMs in lieu of the subjective opacity classification figures contained in Section IV of Appendix C to this Consent Decree. ++EP++

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(ii) Postmarked within thirty (30) days of lodging of the Consent Decree, Magma shall submit recordkeeping procedures to EPA and OAQ for approval.

(iii) Within fifteen (15) days after receipt by Magma of written approval from EPA and OAQ of recordkeeping procedures, Magma shall begin implementation of those procedures.

(iv) Within forty-eight (48) hours after any SO2 NAAQS or Interim Short-Term Peak SO2 Concentration Level Exceedance, Magma shall update the Manual and upgrade the system to prevent further Exceedances under similar meteorological conditions.

(v) Postmarked within ninety (90) days after lodging of this Consent Decree, Magma shall submit to EPA and OAQ a plan to integrate recent observed air quality data with short-term forecasting to prevent Exceedances of the 24-hour SO2 NAAQS. Magma shall implement the plan within thirty (30) days after receipt by Magma of written approval from EPA and OAQ.

B. Final Compliance Program

15. By the Final Compliance Date, Magma shall permanently discontinue use of its reverberatory furnaces.

16. Within ten (10) days after entry of this Consent Decree, Magma shall have issued to EPA and delivered to the United States Attorney, District of Arizona, Tucson office a letter of credit substantially in the form of Appendix D in the amount of THREE MILLION DOLLARS ($3,000,000.00). On May 1, 1988, unless Magma has demonstrated to EPA that Magma has permanently discontinued use of its reverberatory furnaces in accordance with Paragraph 15, Magma shall have issued to EPA and delivered to the United States Attorney, District of Arizona, Tucson office an additional security, substantially in the form of either Appendix D or Appendix E, in the amount of SEVENTEEN MILLION DOLLARS ($17,000,000.00). ++EP++

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Such securities shall be automatically forfeited and their face amounts payable to the United States, in accordance with their terms, should Magma fail to discontinue use of its reverberatory furnaces in accordance with Paragraph 15.

17. a. On and after the Final Compliance Date, Magma shall not operate the Smelter in violation of any of the Applicable Final Compliance Laws.

b. Except as provided in subparagraph c, Magma shall be liable for a stipulated penalty of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) if on or after the Final Compliance Date the Smelter violates any PM emission standard or emission limitation (as defined in Section 302(k) of the Act) in any of the Applicable Final Compliance Laws set forth in Paragraph 5(c)(v)-(viii), and shall be liable for additional stipulated penalties of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each day that such violation continues after Magma has actual or constructive notice of the results of any performance test demonstrating such violation from the entity that performed such test, including Magma, its contractors, OAQ, or EPA.

c. Magma shall not be liable for stipulated penalties for violation of the Arizona PM SIP set forth in Paragraph 5(c)(v) unless, by November 1, 1987, EPA takes final administrative action as to Magma on the State's proposal of June 3, 1982 to revise the Arizona PM SIP. ++EP++

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d. No failure by EPA to take final administrative action in accordance with subparagraph c. shall affect any of Magma's obligations under this Consent Decree apart from its obligation to pay stipulated penalties under this Paragraph, and this Paragraph shall in no way be deemed to impose a requirement on EPA to take such final administrative action.

e. Magma shall be liable for stipulated penalties of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each day on or after the Final Compliance Date that the Smelter violates any SO2 emission standard or emission limitation (as defined in Section 302(k) of the Act) or any cumulative occurrence limitation (as defined in A.C.R.R. R9-3-15.C) in any of the Applicable Final Compliance Laws set forth in Paragraph 5(c)(iii), (iv), (vii), and (viii).

f. Magma shall be liable for a stipulated penalty of TEN THOUSAND DOLLARS ($10,000.00) for each day on or after the Final Compliance Date that the Smelter violates any of the opacity standards set forth in Paragraph 5(c)(i), (ii), (vii) and (viii) provided, however, that no stipulated penalty shall be assessed for such a violation if (1) compliance with the PM emission standards and emission limitations (as defined in Section 302(k) of the Act) applicable to the process equipment causing the violation has previously been demonstrated through simultaneous PM and opacity testing, and (2) Magma has submitted a petition for a revised opacity limitation that has not been finally approved or disapproved by ADHS and EPA pursuant to A.C.R.R. R9-3-501.C and 40 C.F.R. Section 60.11(e) and Section 52.120(c)(43)(i)(B). ++EP++

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18. A defense of force majeure shall not excuse Magma from complying with the Applicable Final Compliance Laws on and after the Final Compliance Date.

19. Compliance with the Applicable Final Compliance Laws shall not entitle Magma to credits for any resultant emissions reductions. Magma shall not seek any such emissions reduction credits nor shall Magma seek to bank emissions reduction credits from final compliance. Magma hereby expressly waives any rights it might otherwise have to use, transfer or bank emission reduction credits, for any emissions reduction resulting from final compliance by the Smelter.

20. Magma shall design the Smelter equipment to be installed in accordance with Paragraph 23 of this Consent Decree with an engineering criterion that the Smelter emissions will not cause one-hour SO2 concentration levels greater than the Final Short-Term Peak SO2 Concentration Design Criterion Level. Magma shall be liable for Design Criterion Incentive Payments calculated in accordance with Paragraph 39(f) of this Consent Decree for failure to achieve this engineering criterion.

C. Final Compliance Through Construction

21. Except as provided in Paragraph 29 of this Consent Decree, Magma shall achieve full and continuous compliance with the Applicable Final Compliance Laws by the Smelter on or before November 1, 1988, by installing a replacement Flash Furnace and associated support facilities (including, but not limited to, an Oxygen Plant and a concentrate Dryer), by upgrading existing continuous air pollution controls, and by installing new Fugitive Emissions control equipment in accordance with the Construction Schedules set forth in Paragraph 23 below. ++EP++

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Compliance by the Smelter with the Applicable Final Compliance Laws shall be demonstrated by Magma in accordance with the schedules and procedures specified in Paragraph 22.

22. Compliance Demonstrations. Magma shall demonstrate continuous compliance with the Applicable Final Compliance Laws in the following manner:

a. Opacity. On and after the Final Compliance Date, Magma shall not discharge to the atmosphere from any smelting operation gases which exhibit opacity greater than 20 percent. Compliance shall be determined using EPA Reference Method 9 (40 C.F.R. Part 60, Appendix A). Initial compliance shall be demonstrated simultaneously with the PM compliance test(s) specified below.

b. PM.

(1) PM SIP. On and after the Final Compliance Date, Magma shall continuously comply with the Arizona PM SIP and the Arizona PM Limitation. Compliance shall be determined in accordance with the provisions set forth in 40 C.F.R. Section 52.126(b)(5). Magma shall submit a pretest plan to EPA and OAQ for approval postmarked by November 1, 1988, and shall submit to EPA and OAQ a performance test report postmarked by February 1, 1989. ++EP++

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(2) PM NSPS. On and after the performance tests required by 40 C.F.R. Section 60.8(a) are to be completed, Magma shall not discharge to the atmosphere from the Dryer gases which contain PM in excess of the Federal NSPS or the Arizona NSPS. Compliance shall be determined using the procedures specified in 40 C.F.R. Section 60.166.

c. SO2.

(1) SO2 NSPS. On and after the performance tests required by 40 C.F.R. Section 60.8(a) are to be completed, Magma shall not discharge to the atmosphere from the Acid Plant tail gas stacks any gases which contain SO2 greater than the Federal NSPS or the Arizona NSPS. Compliance shall be determined using CEMs in accordance with 40 C.F.R. Section 60, Subparts A and P.

(2) SO2 SIP. On and after the Final Compliance Date, the annual average emissions from the Smelter shall not exceed 18,275 lbs./hr. Magma shall comply with all requirements of A.C.R.R. R9-3-515.C. except as follows: Compliance with the cumulative occurrence and emission limits during the initial 365 day compliance period as set forth in paragraph 1 of R9-3-515.C. shall be determined on a monthly basis by averaging the emissions for all hours measured from the Final Compliance Date through the last day of each calendar month, and Magma shall submit to EPA and OAQ compliance reports for each month during the initial 365 day compliance period, postmarked within fifteen (15) days following the end of that month. ++EP++

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23. Construction Schedules. Except as provided in Paragraph 29 of this Consent Decree, in order to comply with the Applicable Final Compliance Laws on or before November 1, 1988, Magma shall comply with the following construction schedules and requirements:

a. Oxygen Plant: Magma shall install and operate an Oxygen Plant in accordance with the following construction schedule and requirements:

(i) By March 1, 1987, let contracts for design and commence site-specific detailed design of the Oxygen Plant;

(ii) By September 1, 1987, let contracts for construction and commence construction of the Oxygen Plant;

(iii) By August 30, 1988, complete construction of the Oxygen Plant and begin operation;

(iv) By November 1, 1988, commence commercial operation of the Oxygen Plant and achieve continuous compliance with the Applicable Final Compliance Laws;

b. Flash Furnace: Magma shall install and operate a Flash Furnace in accordance with the following construction schedule and requirements:

(i) Upon lodging of this Consent Decree, let contracts for design and commence site-specific detailed design of the Flash Furnace; ++EP++

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(ii) By April 15, 1987, let contracts for construction and commence construction of the Flash Furnace;

(iii) By August 30, 1988, complete construction of the Flash Furnace and begin operation;

(iv) On and after August 30, 1988, treat all Flash Furnace process gases in a double-contact/double-absorption sulfuric Acid Plant prior to discharge to the atmosphere;

(v) On and after August 30, 1988, equip all matte tapping and slag skimming stations, and all matte and slag launders at the Flash Furnace to capture Fugitive Emissions generated by matte tapping and slag skimming;

(vi) By November 1, 1988, commence commercial operation of the Flash Furnace and achieve continuous compliance with the Applicable Final Compliance Laws;

c. Acid Plant: Magma shall modify its single-contact sulfuric Acid Plant into a double-contact/double-absorption sulfuric Acid Plant capable of complying with the Federal NSPS and the Arizona NSPS in accordance with the following construction schedule and requirements:

(i) By April 1, 1987, let contracts for construction and commence construction of the double-contact/double-absorption sulfuric Acid Plant. Construction shall be scheduled and carried out so that both of the Acid Plant trains will not be shut down simultaneously for more than fourteen (14) calendar days, and so that the total period of time during which either one or both of the Acid Plant trains is shut down due to construction shall not exceed fifty-six (56) calendar days; ++EP++

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(ii) By February, 1, 1988, complete construction and begin operation of the double-contact/double-absorption sulfuric Acid Plant;

(iii) By March 1, 1988, commence commercial operation of the double-contact/double-absorption sulfuric Acid Plant and achieve continual compliance with the Federal NSPS and the Arizona NSPS;

d. Dryer. Magma shall install and operate a concentrate Dryer in accordance with the following construction schedule and requirements:

(i) Upon lodging of this Consent Decree, let contracts for design and commence site specific detailed design of the Dryer;

(ii) By April 1, 1987, let contracts for construction and commence construction of the Dryer;

(iii) By August 30, 1988, complete construction of the Dryer and begin operations;

(iv) By November 1, 1988, commence commercial operation and achieve continuous compliance with the Federal NSPS and the Arizona NSPS;

e. Fugitive Systems: Magma shall install and operate Fugitive Systems to ensure that Fugitive Emissions do not have the potential to cause or significantly contribute to Exceedances of the SO2 NAAQS, including secondary hoods on the converters and replacement of the converter offgas handling system, in accordance with the following construction schedule and requirements: ++EP++

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(i) Upon lodging of this Consent Decree, let contracts for design and commence site specific detailed design of the Fugitive Systems;

(ii) By March 1, 1987, let contracts for construction of the Fugitive Systems;

(iii) By April 15, 1987, commence construction of the Fugitive Systems;

(iv) By August 30, 1988, complete construction and begin operation of the Fugitive Systems (except for the fourth converter); and

(v) On and after August 30, 1988, Magma shall not operate any converter (including the fourth converter) not equipped with the Fugitive Systems specified in this subparagraph.

24. Continuous Emissions Monitoring Requirements.

a. Within ninety (90) days of commencement of commercial operations of the double-contact/double-absorption Acid Plant in accordance with Paragraph 23(c)(iii) of this Consent Decree, Magma shall install, operate, and maintain an SO2 CEM and conduct performance specification tests, in accordance with the provisions contained in 40 C.F.R. Section 60.165, at the outlet of each Acid Plant train and submit to EPA and OAQ (postmarked within the ninety (90) day period) the results of the tests. EPA and the OAQ shall have discretion and flexibility in specifying the span so that the most accurate emissions data will be obtained. ++EP++

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b. Within ninety (90) days of lodging of this Consent Decree, Magma shall install, operate, certify and maintain SO2 and volumetric flow rate CEMs (in accordance with the provisions of A.C.R.R. R9-3-515.C.4) in any ducts or flues that could be used to Bypass gases around the Smelter's SO2 constant control system(s).

c. Within ninety (90) days of lodging of this Consent Decree, Magma shall install, operate, certify and maintain SO2 and volumetric flow rate CEMs in the two main Smelter stacks and in any other stack(s) which could emit five (5) percent or more of the allowable annual average SO2 emissions from the Smelter (in accordance with the provisions of A.C.R.R. R9-3-515.C.4).

d. Within thirty (30) days of lodging of this Consent Decree, Magma shall install, operate, and maintain SO2 and volumetric flow rate CEMs that will obtain representative measurements of hourly SO2 Fugitive Emissions from the Smelter roof.

e. CEMs Certification

(i) Magma shall conduct performance specification tests (PSTs) on the Acid Plant tail-gas stack SO2 CEMs in accordance with 40 C.F.R. Part 60, Appendix B. Magma shall submit the written results of these tests to EPA and OAQ postmarked within ninety (90) days after lodging of this Consent Decree. ++EP++

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(ii) Magma shall conduct a PST on the Dryer opacity CEMS in accordance with 40 C.F.R. Part 60, Subparts A and P, and Appendix B. Magma shall submit the written results of these tests to EPA and OAQ postmarked within ninety (90) days following commencement of commercial operation of the Dryer.

(iii) Postmarked within ninety (90) days of lodging of this Consent Decree, Magma shall submit to EPA and OAQ the written results of PSTs conducted on the converter and reverberatory stack SO2 CEMs in accordance with 40 C.F.R. Part 52, Appendix D.

(iv) Postmarked within ninety (90) days of lodging of this Consent Decree, Magma shall submit to EPA and OAQ the written results of PSTs conducted on the converter and reverberatory stack volumetric flow rate CEMs in accordance with 40 C.F.R. Part 52, Appendix E.

(v) Within ninety (90) days after the Final Compliance Date, Magma shall repeat the requirements contained above in subparagraphs (iii) and (iv).

(vi) By the Final Compliance Date, Magma shall install, operate, and maintain SO2 and volumetric flow rate CEMs in any ducts or flues that could be used to Bypass gases around the Smelter's SO2 constant control equipment and also in any Smelter stack which would emit five (5) percent or more of the allowable annual average SO2 emissions from the Smelter. Within ninety (90) days after the Final Compliance Date, Magma shall conduct PSTs on the CEMs and submit written results (postmarked within the required period) to EPA and OAQ in accordance with the requirements of A.C.R.R. R9-3-515.C.4. and 40 C.F.R. Part 52, Appendices D and E. ++EP++

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25. RESERVED

26. Fugitive Emissions Study.

Postmarked on or before August 30, 1988, Magma shall submit to EPA and OAQ for written approval a plan for study of the Fugitive Emissions from the Smelter, and beginning on November 1, 1988, Magma shall conduct such study, in accordance with the following requirements:

a. The study shall assess whether Fugitive Emissions have the potential to cause or to significantly contribute to Exceedances of the SO2 NAAQS;

b. The study shall include measurements or estimates by an approved method of total Fugitive Emissions from the Smelter during typical operations, including planned startup and shutdown. These measurements shall contain hourly, 24-hour, and monthly averages of Fugitive Emissions expressed in pounds SO2 for the relevant time periods;

c. The study shall evaluate, for a twelve-month period, the average and maximum impact of Smelter Fugitive Emissions on ambient air quality, measured on the basis of one-hour, three-hour, and twenty-four hour averages;

d. As part of the study, Magma shall continue to collect data from the Fugitive Impact Monitor(s); ++EP++

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e. Magma shall develop a method to determine the ambient air impact of the Acid Plant tail gas stacks at the Fugitive Impact Monitor(s); and

f. Postmarked by January 1, 1990, Magma shall submit a report of the Fugitive Emissions study to EPA and OAQ.

27. Additional Fugitive Systems.

If Magma cannot demonstrate on the basis of the study required by Paragraph 26 of this Consent Decree that Fugitive Emissions do not have the potential to cause or significantly contribute to Exceedances of the SO2 NAAQS, Magma shall do the following:

a. Within ninety (90) days of written notification by EPA and OAQ that a further plan is required, Magma shall develop a plan to evaluate and improve the effectiveness of the Fugitive Systems and a testing program to measure PM, sulfuric acid, and SO2 emissions rates for all captured Fugitive Emissions, and shall submit the proposed evaluation and testing plan, postmarked within the required period, to EPA and OAQ for review and approval. Such plan shall include a measurement of the relative proportion (expressed in both percentages and pounds per hour) of total Fugitive Emissions during typical operations, including planned start-up and shutdown, produced by each of the following Smelter processes:

(i) Dryers;

(ii) Dried concentrate transfer operations;

(iii) Flash Furnace operations (including feeding, slag return, matte and slag tapping); ++EP++

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(iv) Matte transfer operations;

(v) Converter operations (including transfer operations);

(vi) Gas handling systems (ducting, flanges, etc.);

(vii) Slag cooling operations;

(viii) Waste-heat boilers;

(ix) Gas cooling and cleaning scrubbers;

(x) Electrostatic precipitators; and

(xi) The Acid Plant.

b. Within thirty (30) days after receiving written EPA and OAQ approval of the evaluation and testing plan, Magma shall commence the evaluation and testing program. Testing shall be conducted as specified in Reference Methods 5 and 8 (40 C.F.R. 60 Appendix A), except that a combined Method 5/8 sampling train shall be used;

c. Within ninety (90) days after commencement, Magma shall complete the evaluation and testing program.

d. Postmarked within ninety (90) days after the completion of the evaluation and testing program, Magma shall submit a report to EPA and OAQ as to:

(i) The extent to which the efficiency of the Fugitive Systems must be improved to protect the SO2 NAAOS and comply with the Applicable Final Compliance Laws, and the manner in which such improvements will be achieved; ++EP++

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(ii) The extent to which additional capture and control of Fugitive Emissions is necessary to protect the SO2 NAAQS and comply with the Applicable Final Compliance Laws; and

(iii) The manner in which Magma proposes to capture and control such PM and SO2, including the type, sizes, specifications and schedule for installation of any additional Fugitive Systems determined to be necessary to protect the SO2 NAAQS and comply with the Applicable Final Compliance Laws.

28. Ambient SO2 Monitors.

a. Within ninety (90) days after the lodging of this Consent Decree, Magma shall modify its data collection method at each ambient SO2 monitor to collect ambient SO2 concentration readings at a frequency of no less than one reading every ten (10) seconds. Three-minute SO2 concentration averages shall consist of no less than eighteen (18) separate readings. Six-minute SO2 concentration averages shall be calculated from no less than two (2) consecutive three-minute averages.

b. Magma shall continue to operate and maintain the ambient SO2 monitors operated by Magma on the Final Compliance Date for a period of thirty-six (36) months after the Final Compliance Date, except that telemetry to those monitors shall be disconnected and the SCS shall not be used on and after the Final Compliance Date. ++EP++

Page 38 D. Final Compliance Through Cessation of Smelting

29. Upon lodging of this Consent Decree, Magma shall, as part of the Monthly Compliance Reports required by Paragraph 36(a), submit a statement, signed by Magma's chief financial officer, that (1) Magma has all financing commitments necessary to continue for the next month the construction schedules set forth in Paragraph 23, (2) Magma has not filed for bankruptcy under any provision of the United States Bankruptcy Code, and (3) Magma has paid any stipulated penalties as required under Paragraph 40 of this Consent Decree. If, within three (3) days after the date for submission of any such statement required under this Paragraph, Magma has not provided such statement, it shall achieve full and continuous compliance with the Applicable Final Compliance Laws by permanent cessation of Smelting within one hundred and fifty (150) days from the Discontinuance Notification Date, but in no event later than November 1, 1988. Magma shall in that event take the following steps to ensure an orderly cessation of Smelting at the Smelter:

a. Postmarked within fifteen (15) days after the Discontinuance Notification Date, Magma shall provide EPA and OAQ with written confirmation of its obligation to cease Smelting at the Smelter in accordance with this Paragraph.

b. Within thirty (30) days after the Discontinuance Notification Date, the Board of Directors of Magma shall pass a resolution to cease Smelting at the Smelter consistent with this Consent Decree, and postmarked within fifteen (15) days thereafter Magma shall submit to EPA and OAQ a copy of said resolution. ++EP++

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c. Within forty-five (45) days after the Discontinuance Notification Date, Magma shall give notice of the obligations of this Paragraph of the Consent Decree to the Smelter employees by posting notices at the Smelter, and shall submit to EPA and OAQ a copy of such notice postmarked within fifteen (15) days after its posting.

d. Within one hundred and twenty (120) days after the Discontinuance Notification Date, Magma shall reduce the volume of concentrate on hand at the Smelter to no more than 20,000 tons, and shall submit to EPA and OAQ written notice of such action postmarked within five (5) days thereafter.

e. Within one hundred and twenty (120) days after the Discontinuance Notification Date, Magma shall cease concentrate deliveries to the Smelter, and shall submit to EPA and OAQ written notice of such action postmarked within five (5) days thereafter.

f. Within fifteen (15) days after permanent cessation of Smelting at the Smelter occurs, Magma shall provide to EPA and OAQ a written certification of permanent cessation of Smelting at the Smelter.

E. Recommencement of Smelting

30. If Magma is required to comply with the Applicable Final Compliance Laws by permanent cessation of Smelting in accordance with Paragraph 29 of the Consent Decree, Magma shall not recommence Smelting at the Smelter after the Final Compliance Date without complying with the following requirements: ++EP++

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a. Three (3) months prior to recommencement of Smelting, Magma shall deliver to EPA and to OAQ written notice of its intention to recommence Smelting at the Smelter, specifying Magma's plans for completion of all construction required for compliance with the SO2 NAAQS and Applicable Final Compliance Laws. The notice shall also specify a schedule for start-up testing.

b. Within sixty (60) days after recommencement of Smelting, Magma shall demonstrate to EPA's and OAQ's satisfaction compliance with the SO2 NAAQS and the Applicable Final Compliance Laws, and payment of any penalties accrued under this Consent Decree.

F. General Compliance Requirements

31. Operation and Maintenance. Postmarked within ninety (90) days of the lodging of this Consent Decree, Magma shall submit and comply with an operations and maintenance procedures manual for all air pollution control equipment to EPA and OAQ for written approval. The manual shall, at a minimum, contain:

a. A corporate organizational chart indicating responsibility for environmental programs;

b. Procedures to prevent leakage in any air pollution control equipment and their associated ducts. These procedures shall include regular inspections (at least monthly), maintenance of air pollution control equipment and ducts and daily (on business days) walk-through inspections. ++EP++

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Magma shall repair leakage in any air pollution control equipment and ducts as soon as possible;

c. Scheduled maintenance procedures to minimize upsets of process equipment or air pollution control equipment; and

d. Procedures to minimize SO2 and PM emissions during routine maintenance of any equipment and during unscheduled maintenance or upset conditions.

32. Monitoring. Upon lodging of this Consent Decree, Magma shall:

a. Maintain 99% data availability at each ambient SO2 monitor for each calendar month, and 87.5% data availability for each calendar day;

b. Maintain ambient SO2 analyzer rise and fall time (as defined in 40 C.F.R. Section 53.23) of six (6) minutes or less;

c. Maintain accuracy of ambient SO2 monitors within fifteen percent (15.0%) of audit standard concentration or one percent (1.0%) of full scale, whichever is greater, for the total sample system;

d. Determine total SO2 emissions by CEM for at least ninety-five percent (95.0%) of the hours during which emissions occur in any month, as calculated in accordance with the procedure in Appendix F to this Consent Decree;

e. Audit one quarter of the ambient SO2 monitors (a minimum of two monitors) at least once per quarter (except that all ambient SO2 monitors located within a 1.5-mile radius of the center of the converter stack shall be audited at least twice per year) and submit results to EPA and OAQ in the Monthly Compliance Report; and ++EP++

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f. Upon reasonable notice, allow EPA and OAQ to conduct audits at any ambient SO2 monitor or CEM.

33. RESERVED

34. Acid Plant Bypass.

a. Magma shall not Bypass Flash Furnace gases at any time under any circumstances, and shall immediately stop all feeding of concentrates to the Flash Furnace that would generate SO2 in amounts exceeding the capability of the Acid Plant to treat such gases during any Acid Plant upset or scheduled maintenance.

b. During the Interim Period, Magma may Bypass converter gases during periods of Acid Plant upset and scheduled maintenance, including the period for converting the Acid Plant from single to double contact, provided, however, that: 1) Magma shall minimize SO2 emissions during upset and scheduled maintenance as far as practicable, and 2) if an Exceedance of the SO2 NAAQS or the Interim Short-Term Peak SO2 Concentration Levels occurs during Bypass at any monitor anywhere in the DLA, Magma shall be liable for a stipulated penalty of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) in accordance with Paragraph 40 of this Consent Decree. In addition, if an Exceedance of the SO2 NAAQS occurs during Bypass at a monitor operated as part of Magma's SCS, Magma shall thereafter at all times during the term of this Consent Decree stop all converter activities that would generate SO2 in amounts exceeding the capability of the Acid Plant to treat such gases during any Acid Plant upset or scheduled maintenance and; if two (2) Exceedances of the SO2 NAAQS occur during Bypass at monitors not operated by Magma as part of its SCS, Magma shall thereafter at all times during the term of this Consent Decree stop all converter activities that would generate SO2 in amounts exceeding the capability of the Acid Plant to treat such gases during any Acid Plant upset or scheduled maintenance. ++EP++

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35. Reduction of Particulate Emissions.

a. On and after July 1, 1987, Magma shall terminate any existing contracts for the supply of coal to the Smelter, and shall not receive any additional deliveries of coal to any Smelter facilities. Magma shall notify EPA and OAQ of such action in writing postmarked by July 15, 1987.

b. On and after September 1, 1987, Magma shall not utilize coal in the operation of any Smelter facilities.

VII. REPORTING AND NOTIFICATION

36. Reporting Requirements. In addition to the reporting requirements set forth elsewhere in this Consent Decree, including all Appendices hereto, the following reporting requirements shall apply:

a. Monthly Reporting. Beginning after the first full calendar month after lodging of this Consent Decree, and postmarked on or before the fifteenth (15th) day of each month, Magma shall submit by certified or registered mail a Monthly Compliance Report for the previous calendar month to EPA and OAQ. ++EP++

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This report shall contain the data and information specified below:

(i) Daily sulfur balances and a total monthly sulfur balance calculated from such daily averages;

(ii) Daily emissions rates in tons per day of SO2 being emitted into the atmosphere from all points being monitored by the CEMs specified in Paragraph 24; provided, however, that emission rates in tons per hour of SO2 being emitted into the atmosphere from all points being permanently monitored shall also be recorded and retained for a minimum of two years, and shall be submitted to EPA or OAQ upon written request;

(iii) The following data regarding each ambient SO2 monitor operated by Magma (data to express SO2 concentrations in micrograms per cubic meter):

(a) Cumulative average concentration of SO2 in the ambient air from January 1 for each year of this Consent Decree;

(b) Monthly average concentration of SO2 ;

(c) Maximum three-hour average concentration of SO2 , and date and time of occurrence;

(d) Number of Exceedances of the three-hour SO2 NAAQS, and the date, time, and concentration of any such Exceedance;

(e) Maximum 24-hour average concentration of SO2 and date and time of occurrence; ++EP++

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(f) Number of Exceedances of the 24-hour SO2 NAAQS, and the date and concentration of any such Exceedance;

(g) Maximum one-hour and six-minute concentrations of SO2, and dates and times of occurrence;

(h) Number of Exceedances of the Short-Term Peak SO2 Concentration Level(s), and the date, time, and concentration of any such Exceedances;

(iv) For each ambient SO2 monitor, for each CEM (including the roof monitor CEM), and for the CEM system as a whole (excluding the roof monitor CEM), the monthly percent data recovery (to the nearest tenth of a percent) and time periods when valid data is unavailable (including the reasons why), determined in accordance with the statistical validity requirements and the calculation procedures set forth in Appendix F to this Consent Decree;

(v) The results, including a copy of the strip chart, for each ambient monitor and CEM accuracy check, primary calibration, and audit (except for daily automatic zero and span by the CEMs);

(vi) A report on the implementation of each Curtailment Decision pursuant to Appendix C (the SCS Operating Manual) as it may from time to time be amended in accordance with this Consent Decree, including the date, Curtailment Decision used, prescribed emission rate, time of implementation, duration, and actual emission rate recorded;

(vii) The statement required under Paragraph 29 of this Consent Decree; and ++EP++

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(viii) A summary of Magma's activities in meeting the schedules set forth in Paragraph 23, including any changes or anticipated delays to those schedules (and an explanation of the reasons therefor) and also including a schedule of activities planned for the following month.

b. Commencing not more than forty-five (45) days after the Final Compliance Date, the Monthly Compliance Report shall also contain the following SO2 compliance information in accordance with the provisions of A.C.R.R. R9-3-515.C (except as provided in Paragraph 22(c)):

(i) The number of operating days within the current compliance period;

(ii) The maximum allowed cumulative average emission limit (Emax);

(iii) The SO2 emission limits (E);

(iv) The cumulative occurrence limits (n);

(v) The number of three-hour averages (expressed in pounds SO2 per hour) in excess of E, determined from the Final Compliance Date until the end of each day;

(vi) For each day of the month, the cumulative average emission rate (Ebar) determined from the Final Compliance Date until the end of each day; and

(vii) For each day of the month, the maximum three-hour average emission rate (expressed in pounds of SO2 per hour); and ++EP++

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(viii) The average percent sulfur recovery for the month and the average percent sulfur recovery for the three calendar month period terminating at the end of the month being reported.

c. Notification Requirements.

(i) Magma shall communicate orally by calling the EPA offices at (415) 974-8201 and the OAQ offices at (602) 257-2276 --

(a) Within one (1) hour when there is reason to believe that Magma will exceed or has exceeded the 24-hour SO2 alert level (800 micrograms per cubic meter, 24-hour average) (during periods when the OAQ offices are closed, Magma shall contact OAQ personnel at the number(s) specified in the recorded announcement by calling until the communication is completed), and

(b) Within twelve (12) hours when there is reason to believe that magma will exceed or has exceeded the SO2 NAAQS, the Interim Short-Term Peak Concentration Levels, the Final Short-Term Peak Concentration Level or the Applicable Final Compliance Laws;

(ii) During periods when the EPA and/or OAO offices are closed, Magma shall be considered in compliance with the requirements of Subparagraph (i) above by --

(a) Reporting the required information on the telephone answering recorder of the EPA and OAQ, and ++EP++

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(b) By recording this conversation on the telephone log required in Subparagraph (iv) below.

(iii) The communication required by Subparagraph (i) above shall contain --

(a) The time of onset of occurrence of the Exceedance or violation and expected duration,

(b) A description of the nature of the occurrence and the equipment affected,

(c) An estimate of the hourly emissions that will occur during the period involved, and

(d) The preliminary plan to bring the source back into compliance.

(iv) Magma shall maintain a log for the purpose of documenting all telephone reports required in Subparagraph 36(c)(i) above, including at least the following information --

(a) The date and time of call,

(b) The individual making call,

(c) The individual receiving call (if the call is made during times that the EPA and/or OAQ offices are open), and

(d) The substance of the conversation.

(v) Magma shall submit a signed report to EPA and the State postmarked within seven (7) days after Magma detects or is notified in writing by EPA or OAQ of any SO2 NAAQS or Short-Term Peak SO2 Concentration Level Exceedance, providing the following information -- ++EP++

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(a) A narrative description of the dispersion conditions and emissions associated with the Exceedance,

(b) Completed copies of the Forecast Worksheet Form SMD-1642 for the day prior to and the day containing the Exceedance,

(c) For the period beginning at least twenty-four (24)hours prior to and extending at least twenty-four (24) hours after any SO2 NAAQS or Short-Term Peak SO2 Concentration Level Exceedance --

(i) Converter daily logs for each operating converter,

(ii) Average hourly concentrations in micrograms per cubic meter at the affected monitoring site(s),

(iii) Hourly emission rates in pounds per hour of SO2 for all points of emissions to the atmosphere being permanently monitored,

(iv) All available applicable meteorological parameters, and

(d) A description of remedial plans to prevent future Exceedances under similar circumstances, including any revision to the SCS Operation Manual.

37. Procedures For Reporting: All reports, notices, control plans, and other information that must be submitted in satisfaction of a requirement of this Consent Decree shall be addressed as follows: ++EP++

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to EPA:

U.S. Environmental Protection Agency

215 Fremont Street

San Francisco, California 94105

Attn: Director, Air Management Division

to the State: Before July 1, 1987 -

Arizona Department of Health Services

Division of Environmental Health Services

2005 North Central Avenue

Phoenix, Arizona 85004

Attn: Manager, Office of Air Quality

After July 1, 1987 -

Director, Arizona Department of Environmental Quality (or the Director's designee) at an address to be specified by written notice to Magma.

to Magma:

Director of Environmental Affairs

Magma Copper Company

P.O. Box 38050

Tuscon, Arizona 85740

VIII. PENALTIES

38. Civil Penalties. Within thirty (30) days of the entry of this Consent Decree, Magma shall pay a civil penalty in the amount of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) to the United States in satisfaction of civil claims under Section 113 of the Clean Air Act for the Smelter's alleged past violations of the Act as set forth in the Plaintiff's Complaint in this matter and until the Final Compliance Date. Payment shall be made and tendered as set forth in Paragraph 40(a) of this Consent Decree. ++EP++

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39. Stipulated Penalties.

a. Requirements for Protection of Air Quality:

(i) During the Interim Period, for each violation of the SO2 NAAQS at an ambient monitor operated as part of Magma's SCS, Magma shall be liable to the United States for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00);

(ii) During the Interim Period, if a violation of the SO2 NAAQS occurs at an ambient monitor operated by Magma but not part of its SCS, Magma shall be liable to the United States for a stipulated penalty in the amount of TEN THOUSAND DOLLARS ($10,000.00); provided, however, that if Magma is required by EPA and OAQ to include the monitor at which such violation occurred in its SCS pursuant to Paragraph 14(b)(vi), Magma shall be liable to the United States for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each violation of the SO2 NAAQS occurring at that monitor after the date set forth in Paragraph 14(b)(vii) for inclusion of that monitor in Magma's SCS.

(iii) During the Interim Period, Magma shall be liable to the State of Arizona for a stipulated penalty for each violation of the Interim Short-Term Peak SO2 Concentration Levels occurring at an ambient monitor operated by Magma as part of its SCS, except that for purposes of this Paragraph, Magma shall be liable for only one penalty for all violations of the Interim Short-Term Peak SO2 Concentration Levels that occur during an Episode. ++EP++

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Penalties for an Episode, as well as penalties for individual Six-Minute and One-Hour Violations of the Interim Short-Term Peak SO2 Concentration Levels, shall be subject to a progressive penalty schedule as follows:

First penalty: $25,000 Second penalty: $50,000 Third penalty: $75,000 Fourth and subsequent penalties: $100,000

(iv) During the Interim period, for failure to comply with the Sulfur Input Limit set forth in Paragraph 11 of this Consent Decree, Magma shall be liable to the United States for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each five thousand tons of input sulfur, or portion thereof, by which Magma exceeds the 250,00 ton annual Sulfur Input Limit.

(v) During the Interim Period, for failure to meet the Sulfur Removal Limit Set forth in Paragraph 12 of this Consent Decree, Magma shall be liable to the United States of a stipulated penalty in the amount of FIFTY THOUSAND DOLLARS ($50,000.00) for each percentage point, or portion thereof, by which any three-month average falls below the 63% Sulfur Removal Limit.

(vi) If during the Interim Period, Magma violates the Interim PM Emissions Limit set forth in Paragraph 13 of this Consent Decree, Magma shall be liable to the United States for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) and for additional stipulated penalties in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each day such violation continues after Magma has actual or constructive notice of the results of any performance test demonstrating such violation from the entity that performed such test, including Magma, its contractors, OAQ, or EPA. ++EP++

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b. Monitoring and SCS Operation: For any failure by Magma to comply with any monitoring requirements set forth in Paragraph 32 of this Consent Decree or to implement a Curtailment Decision required by Paragraph 14(a) or Appendix C, as it may be amended from time to time in accordance with this Consent Decree, Magma shall be liable to the United States for stipulated penalties in accordance with the following schedule:

Number of violations Penalty per violation 1 - 14 $25,000 15 - 28 $50,000 more than 28 $75,000

c. Reporting and Notification Requirements:

(i) For any failure by Magma to comply with any reporting or notification requirement set forth in Paragraph 36(a)-(b) of this Consent Decree Magma shall be liable to the United States for stipulated penalties in accordance with the following schedules:

Number of days in violation Penalty per day per violation 1 - 14 $500 15 - 28 $1,000 more than 28 $1,500 Page 54

(ii) For any failure by Magma to comply with any reporting or notification requirement set forth in Paragraph 36(c) of this Consent Decree Magma shall be liable to the United States for stipulated penalties in accordance with the following schedules:

Number of days in violation Penalty per day per violation 1 - 14 $5,000 15 - 28 $10,000 more than 28 $15,000

d. Failure to Meet Compliance Schedule Milestones:

(i) For each failure by Magma to meet any milestone of the construction schedules set forth in Paragraph 23, Magma shall be liable to the United States for stipulated penalties in accordance with the following schedule:

Number of days late Penalty per day in meeting milestone per violation 1 - 14 $5,000 15 - 28 $10,000 more than 28 $20,000

(ii) Penalties determined in accordance with subparagraph (i) above, plus interest (which shall accrue at an annual rate of 7% beginning thirty days from the date on which the milestone is actually missed until the Final Compliance Date), shall be paid pursuant to demand under Paragraph 40, which shall not be made earlier than the Final Compliance Date; provided, however, that all penalties for failure to meet any milestones, as well as interest on such penalties, shall be waived if Magma, on or before the Final Compliance Date, commences commercial operation of the Flash Furnace, Dryer, Oxygen Plant, Acid Plant, and Fugitive Systems specified in the construction schedules set forth in Paragraph 23. ++EP++

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e. Bypass Prohibitions: For any violation of the prohibition on Bypass of Flash Furnaces gases set forth in Paragraph 34(a) of this Consent Decree, and for any violation of a prohibition of Bypass of converter gases that may be imposed pursuant to Paragraph 34(b) of this Consent Decree, Magma shall be liable to the United States for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for each hour, or portion thereof, in which either such prohibition is violated.

f. Final Short-Term Peak SO2 Concentration Design Criterion Level Incentive Payments:

(i) From February 1, 1989, until February 1, 1990, Magma shall be liable to the State of Arizona for a Design Criterion Incentive Payment in the amount of TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) for each ambient SO2 concentration in the DLA in excess of the Final Short-Term Peak SO2 Concentration Design Criterion Level, except for any such concentrations measured during the first twelve-hour period in which such a concentration in excess of the Final Short-Term Peak SO2 Concentration Design Criterion Level occurs. ++EP++

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(ii) Notwithstanding the provisions of subparagraph (i) above, Magma's total liability for Design Criterion Incentive Payments under this Paragraph shall be limited to TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00).

(iii) Within thirty (30) days of entry of this Consent Decree, Magma shall establish an escrow account in accordance with an escrow agreement substantially in the form set forth in Appendix G. Within thirty (30) days of receipt by Magma of written demand by OAQ, Magma shall place any accrued Design Criterion Incentive Payments into the escrow account. At the written request of OAQ made on or after February 1, 1990, but no later than February 15, 1990, Magma shall submit to OAQ postmarked by March 1, 1990, a written plan for expenditure of monies contained in the escrow account for the purpose of determining the cause(s) of ambient concentrations in excess of the Final Short-Term Peak SO2 Concentration Design Criter1on Level and preventing such concentration in the future. Such plan shall cover, at a minimum, the following corrective options: (1) additional equipment and (2) additional operating and maintenance procedures. If any such plan is approved in writing by OAQ, Magma and OAQ shall execute a joint escrow release authorization in the amount specified under the approved plan, and such amount shall be released by the escrow agent to Magma.

(iv) Any monies not released to Magma pursuant to subparagraph (iii) above and remaining in the escrow account after March 1, 1990, shall be made payable, by certified check, to the State of Arizona and forwarded by the escrow agent to the Director of the Department of Environmental Quality within thirty (30) days of written request by the Department of Environmental Quality. ++EP++

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(v) Accounting procedures for the processing of Design Criterion Incentive Payments shall terminate on April 15, 1990, unless ADHS or Magma requests in writing a different termination date for accounting purposes or for the purpose of determining Magma's liability for such payments under subparagraph (i) above.

g. Other Requirements: Unless otherwise specified in this Consent Decree, for each failure by Magma to meet requirements relating to Ambient Monitoring set forth in Paragraph 14(b), requirements relating to the SCS Manual set forth in Paragraph 14(c), requirements relating to Compliance Demonstrations set forth in Paragraph 22, requirements relating to CEMs set forth in Paragraph 24, requirements relating to the Fugitive Emissions Study set forth in Paragraph 26, requirements relating to Additional Fugitive Systems set forth in Paragraph 27, requirements relating to Ambient SO2 Monitors set forth in Paragraph 28, requirements relating to Operation and Maintenance set forth in Paragraph 31, and requirements relating to Reduction of Particulate Emissions set forth in Paragraph 35, Magma shall be liable to the United States for stipulated penalties in accordance with the following schedule: ++EP++

Page 58 Number of days in violation Penalty per day per violation 1 - 14 $10,000 15 - 28 $25,000 more than 28 $50,000

40. Any stipulated penalties accruing within a given quarter shall be paid by Magma within thirty (30) days of receipt by Magma of written demand by EPA or OAQ. Postmarked within 10 days of such payment, Magma shall notify EPA and the State in writing that payment has been made, and shall include with said written notice a photocopy of the cashier's check. EPA and the State shall not, however, make such written demand until after entry of this Consent Decree by the Court.

a. Payment of all stipulated penalties (except for stipulated penalties accruing for violations of the Short-Term Peak SO2 Concentration Levels and for violations of Appendix H (Operating Permit) to this Consent Decree) and of the civil penalties set forth in Paragraph 38 of this Consent Decree, shall be made by cashier's check payable to "Treasurer, United States of America", and shall be tendered to:

United States Attorney

District of Arizona

P.O. Box 1951

Tucson, Arizona 85702-1951

b. Payment of stipulated penalties for violations of the Interim Short-Term Peak SO2 Concentration Levels and violations of Appendix H (Operating Permit) shall be made by cashier's check payable to "Treasurer, State of Arizona", and shall be tendered to: ++EP++

Page 59

Manager, Office of Air Quality

Division of Environmental Health Services

Arizona Department of Health Services

2005 North Central Avenue

Phoenix, Arizona 85004

41. Payment of penalties or Design Criterion Incentive Payments by Magma pursuant to this Consent Decree is not a deductible expense of any kind for the purpose of federal, state, or local taxes, nor shall it be used in any way to affect property value assessments.

IX. GENERAL PROVISIONS

42. Withdrawal of petitions for reconsideration. When and if EPA takes final administrative action on the State's proposal of June 3, 1982 to revise the Arizona PM SIP, Magma shall within thirty (30) days withdraw in writing the following petitions filed and pending before the EPA:

a. Petition of Magma Copper Company for Reconsideration and Revision of 40 C.F.R. Section 52.126 (filed November 26, 1975); and

b. Supplemental Petition of Magma Copper Company for Reconsideration and Revision of 40 C.F.R. Section 52.126 (filed July 27, 1979).

43. RESERVED

44. a. Notification of Delay. If any event occurs which causes or may cause delays in the satisfaction of any obligation of Magma set forth in this Consent Decree, Magma shall notify the cOURT, EPA and the State, in writing postmarked within twenty-five (25) days after the event, of both the event and the delay or anticipated delay, as appropriate, describing in detail the anticipated length of the delay, the measures taken and to be taken by Magma to prevent or minimize the delay, and the timetable by which those measures will be implemented. ++EP++

Page 60

Magma shall adopt all reasonable measures to avoid or minimize any such delay. Failure by Magma to comply with all requirements of this subparagraph shall render the provisions of subparagraph b inapplicable and of no effect as to the particular delay involved.

b. Force majeure. Except as provided in Paragraph 18, if the parties agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances entirely beyond the control of Magma, the time for performance hereunder may be extended for a period no longer than the delay resulting from such circumstances. In the event the parties cannot agree, then any party may submit the matter to this Court for resolution.

c. Burden of Proof. The burden of proving that any delay is caused by circumstances entirely beyond the control of Magma shall rest with Magma. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree shall not, in any event, be a basis for changes in this Consent Decree or extensions of time under this Paragraph. ++EP++

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Delay in achievement of one interim step shall not necessarily justify or excuse delay in achievement of subsequent steps.

d. For the purpose of this Paragraph, "delay" or "delays" means, respectively, "delays or interruption" or "delays or interruptions."

45. Reservation of Rights. EPA and the State reserve the right to impose, consistent with applicable laws and regulations, requirements for the Smelter that are more stringent than those set forth in this Consent Decree. In addition, EPA and the State reserve the right to seek any and all relief for violations of law or of this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C. Section 7603, or A.R.S. Section 36-1719.C.; except that, for violations that are subject to stipulated penalties under this Consent Decree, EPA and the State waive the right to seek civil penalties under Section 113 of the Act, other than the penalties provided in this Consent Decree, for those violations.

46. Right of Entry. EPA, the State and their authorized representatives and contractors shall, upon reasonable notice to Magma, have access to the Smelter for the purpose of observing and monitoring the implementation of this Consent Decree. This right of entry shall be in addition to, and not in limitation or substitution of, EPA's rights under applicable law, including Section 114 of the Act, 42 U.S.C. Section 7414, and shall be in addition to, and not in limitation or substitution of the State's rights under applicable law, including A.R.S. Section 36-1708.01 and A.R.S. Section 36-136.A.5. ++EP++

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47. Compliance with other law. This Consent Decree shall be in full settlement and satisfaction of only the action filed herein. This Consent Decree does not encompass issues regarding sources, operations, facilities, or processes of Magma not specifically covered by the terms of this Consent Decree and is without prejudice to the rights of the parties arising under the Act, Arizona air quality laws or other applicable laws, rules and regulations, with regard to such issues. Except as provided in the Operating Permit included in Appendix H to this Consent Decree, nothing in this Consent Decree shall constitute a permit or order of any kind, or a modification of any permit or order of any kind, under federal, state or local law, and shall in no way alter modify or revoke federal, state and local laws, regulations and requirements. Nor shall this Consent Decree relieve Magma in any manner of its obligations to apply for, obtain and comply with all applicable permits and orders, and to comply with any federal, state and local statutes and the regulations promulgated thereunder. Compliance with the terms of this Consent Decree shall be no defense to any action to enforce such requirements.

48. Severability. The provisions of this Consent Decree are severable. If any provisions of this Consent Decree is declared by the Court to be invalid and/or unenforceable, all other provisions of this Consent Decree shall remain in full force and effect. ++EP++

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49. Modifications.

a. Within ten (10) days after entry of this Consent Decree ("the Decree"), the Director will issue an operating permit to the Smelter consistent with the terms of Appendix H to this Consent Decree. The operating permit shall remain in effect until the termination of the Decree. If the Director issues an operating permit to the Smelter containing no material term or condition different from and/or in addition to the terms of the Decree, including Appendix H, the parties agree to move within ten (10) days after issuance of the permit that this Court amend the Decree to incorporate the operating permit into the Decree and make it enforceable as part of the Decree, including the stipulated penalties set forth in Paragraph IX of Appendix H.

b. Any modification of this Consent Decree must be in writing and approved by the Court. Except as set forth below, any party may apply to the Court for a modification of this Consent Decree, including in the event of an amendment to applicable federal or state law, regulations or orders that might alter the rights or obligations of any party hereto, including but not limited to modification by the State of the emissions limitations set forth in A.C.R.R. R9-3-515 and approval by EPA of any revision to applicable portions of the Arizona SIP that contain emissions limitations or requirements that are different from the limitations or requirements referred to in this Consent Decree; provided that no such modification may be granted if such modification would be inconsistent with the Act or Arizona air quality statutes or regulations, or with other provisions of law relating to air quality control at the Smelter. ++EP++

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Nothing in the Paragraph shall be construed to confer on the Court jurisdiction not otherwise provided by law, nor shall it be construed to relieve any party from pursuing the procedures provided by the Act and Arizona air quality statutes or regulations for administrative and judicial review before seeking a modification of the Consent Decree.

50. Retention of Jurisdiction. The Court shall retain jurisdiction of this matter for the purposes of interpreting, implementing and enforcing the terms and conditions of this Consent Decree or to take any action necessary or appropriate for its construction or execution.

51. Termination. Except as otherwise specified in this Consent Decree, all obligations of Magma under this Consent Decree shall terminate six (6) months from the date on which Magma has demonstrated compliance by the Smelter with the Applicable Final Compliance Laws pursuant to Paragraph 22 of this Consent Decree. All remaining obligations shall terminate on the dates provided in this Consent Decree, but in no event later than three (3) years from the Final Compliance Date.

52. Appendices. In the event that any provision of any appendix to this Consent Decree differs from the provisions of the body of this Consent Decree, the provisions of the body of this Consent Decree shall govern. ++EP++

Page 65

53. Public Comment. The parties agree and acknowledge that final approval and entry of this Consent Decree is subject to the requirements of 28 C.F.R. Section 50.7, providing for notice to the public and public comments.

54. Costs and Fees. Each party in this action shall bear its own court costs and attorneys' fees. ++EP++

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CONSENTED TO:

FOR THE UNITED STATES OF AMERICA, Plaintiff

F. HENRY HABICHT II

Assistant Attorney General

Land and Natural Resources Division

Washington, D.C. 20530

THOMAS L. ADAMS

Assistant Administrator for Enforcement and

Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

STEPHEN M. MCNAMEE

United States Attorney

JAMES D. WHITNEY

Assistant United States Attorney

District of Arizona

P.O. Box 1951

Tucson, Arizona 85702-1951

BARRY S. SANDALS

Environmental Enforcement Section

Land and Natural Resources Division

U.S. Department of Justice

10th & Pennsylvania Avenue, N.W.

Washington, D.C. 10530

JUDITH E. AYRES

Regional Administrator

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105 ++EP++

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CONSENTED TO:

FOR THE STATE OF ARIZONA, Intervenor

TED WILLIAMS

Director

Department of Health Services

1740 West Adams Street

Phoenix, Arizona 85007

JAMES DONALD VIEREGG

Assistant Attorney General

Office of the Attorney General

1275 West Washington Street

Phoenix, Arizona 85007 ++EP++

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CONSENTED TO:

FOR THE ENVIRONMENTAL DEFENSE FUND, INC.,

Intervenor

BY:/s/ Robert E. Yuhnke

Robert E. Yuhnke

Environmental Defense Fund, Inc.

1405 Arapahoe Avenue

Boulder, Colorado 80302

BY:/s/ SIGNATURE ILLEGIBLE

Andrew D. Hurwitz

Meyer, Hendricks, Victor, Osborn & Maledon

A Professional Association

2700 North Third Street

Suite 4000

Phoenix, Arizona 85004

Approved and Judgment entered in accordance with the foregoing Consent Decree in CIV 87-106 TUC WDB this 28 day of September, 1987.

/s/ William D. Browning

William D. Browning

U.S. District Judge ++EP++

APP A-1 APPENDIX A Sulfur Input Calculation Procedures

Sulfur Input shall be calculated by sulfur balance, according to the procedures set forth in A.C.R.R. R9, Chapter 3, Appendix 8, Section A8.1, as applicable. ++EP++

APP B-1 APPENDIX B Sulfur Removal Calculation Procedures

Sulfur removal shall be calculated by sulfur balance, according to the procedures set forth in A.C.R.R. R9, Chapter 3, Appendix 8, Section A8.2. ++EP++

APP C-1 APPENDIX C

Magma Supplemental Control System Operations Manual ++EP++

PHELPS DODGE DOUGLAS WORKS

DOC 01 OF 01

CONSENT DECREE

09-86-C009

CAA

METAL

19861020

19861020

AZD981425457

DOUGLAS REDUCTION WORKS

DOUGLAS (NR), AZ

86-424-TUC-WDB

09

CONSENT DECREE, US V. PHELPS DODGE DOUGLAS WORKS

Page 1

F. HENRY HABICHT II

Assistant Attorney General

BARRY S. SANDALS

Environmental Enforcement Section Land and Natural Resources Division United States Department of Justice 10th & Pennsylvania Avenue, N.W. Washington, D.C. 20530 Telephone: (202) 633-4291

STEPHEN M. MCNAMEE

United States Attorney

DONALD B. OVERALL

Assistant United States Attorney

District of Arizona P.O. Box 1951 Tucson, Arizona 85702-1951 Telephone: (602) 629-6511

Attorneys for Plaintiff United States of America

ROBERT K. CORBIN

Arizona Attorney General

JAMES DONALD VIEREGG

Assistant Attorney General

Office of the Arizona Attorney General 1275 West Washington Street Phoenix, Arizona 85007 Telephone: (602) 255-1610

Attorneys for Intervenor State of Arizona

DONALD M. PETERS

Meyer, Hendricks, Victor, Osborn & Maledon 2700 North Third Street Phoenix, Arizona 85004 (602) 263-8700

ROBERT E. YUHNKE

Environmental Defense Fund, Inc. 1405 Arapahoe Avenue Boulder, Colorado 80302 (303) 440-4901

Attorneys for Intervenors

Environmental Defense Fund, Inc., Priscilla Robinson,

Richard A. Kamp, and Herbert M. Thompson, Jr.

AMY R. COY

Evans, Kitchel & Jenckes, P.C. 2600 North Central Avenue Phoenix, Arizona 85004-3099 Telephone: (602) 234-2600

DAVID E. MENOTTI

JEFFREY G. MILLER

Verner, Liipfert, Bernhard, McPherson and Hand, Chartered 1660 L Street, N.W. Washington, D.C. 20036 Telephone: (202) 775-1000

Attorneys for Defendant Phelps Dodge Corporation

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA TUCSON DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

STATE OF ARIZONA,

Intervenor,

ENVIRONMENTAL DEFENSE FUND, INC.,

PRISCILLA ROBINSON, RICHARD A.

KAMP, and HERBERT M. THOMPSON, JR.

Intervenors,

v.

PHELPS DODGE CORPORATION,

Defendant. ++EP++

Page 2

WHEREAS, the plaintiff United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed a Complaint in this action, alleging violations by the defendant Phelps Dodge Corporation ("Phelps Dodge"), at the Douglas Reduction Works copper smelter owned and operated by Phelps Dodge in Douglas, Cochise County, Arizona (the "Douglas Smelter"), of the Clean Air Act, 42 U.S.C. Sub-Section 7401-7642 ("the Act"), and of the Arizona State Implementation Plan ("SIP") provisions for particulate matter ("PM"), Regulation 7-1-3.6, and for sulfur dioxide ("SO2"), Regulation R9-3-515C, applicable to copper smelters, adopted by the State and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410; and

WHEREAS, the State of Arizona, through the Arizona Department of Health Services (the "State") has intervened in this action pursuant to Section 304 (b)(1)(B) of the Act, 42 U.S.C. Section 7604(b)(1)(B), to enforce the requirements of Arizona Compilation of Rules and Regulations (A.C.R.R.) R9-3-515 against the Douglas Smelter; and

WHEREAS, Phelps Dodge is a New York corporation doing business in the State of Arizona; and

WHEREAS, the Douglas Smelter is in the Southeast Arizona Intrastate Air Quality Control Region (the "Air Quality Control Region" or "AQCR"), adjacent to the border between the United States; and

WHEREAS, relevant portions of the Air Quality Control Region are non-attainment areas for both the PM and sulfur dioxide (SO2) National Ambient Air Quality Standards (NAAQS); and ++EP++

Page 3

WHEREAS, the Douglas Smelter is a major stationary source of PM and SO2 emissions within the meaning of Section 302(j) of the Act, 42 U.S.C. Section 7602(j); and

WHEREAS, during the July 18, 1985, meeting of the United States and Mexican National Coordinators of the Border Environmental Cooperative Agreement executed on August 14, 1983, the Mexican Government declared that the Cananea Smelter will not be allowed to expand its capacity without the prior application of permanent SO2 controls; the United States and Mexico agreed to link interim and permanent controls at the Douglas Smelter and the Mexicana de Cobre, S.A. smelter in Nacozari the United States Government committed that the Douglas Smelter will comply with the provisions of the Clean Air Act as soon as possible but no later than January 2, 1988; both Coordinators agreed that prior to installation of permanent controls at the Douglas and Nacozari Smelters, and prior to expanding the Cananea Smelter, interim measures will be used at all three smelters to reduce emissions; and the Mexican Government has received a firm commitment from Mexicana de Cobre, S.A. that an acid plant will be in operation at the Nacozari Smelter by December 31, 1987; and

WHEREAS, Phelps Dodge has represented to EPA that it supports the commitments of the United States to Mexico and intends to bring the Douglas Smelter into continuous compliance with the Arizona SIP emissions limitations on or before January 15, 1987, by means of permanent cessation of smelting operations, rather than by installing additional continuous pollution controls, and will during the Interim Period take certain other actions at the Douglas Smelter as specified below: ++EP++

Page 4

(1) to reduce emissions of SO2 and PM from the Douglas Smelter; (2) to prevent the Douglas Smelter from causing exceedances of the SO2 NAAQS in the United States or of equivalent levels in Mexico; (3) to reduce short-term peak concentrations of SO2 in the United States and Mexico caused by emissions from the Douglas Smelter; and (4) to otherwise assure that procedures governing the continued operation of the Douglas Smelter until January 15, 1987, will protect the public health and welfare; and

WHEREAS, on July 10, 1986, the State (a) denied a 1985 application by Phelps Dodge for a permit to operate the Douglas Smelter for the calendar year 1986, (b) issued a Notice of Violation and an Order of Abatement to the Douglas Smelter, and both administrative actions alleged that the operation of the Douglas Smelter violates the requirements of A.C.R.R. R9-3-515.B.1, R9-3-515.B.4, R9-3-515.C.1.f and R9-3-515.C.2; and

WHEREAS, A.R.S. Section 1707.01.E provides that the Director of the Arizona Department of Health Services (the "Director"), at his discretion, may issue an operating permit consistent with the terms of a consent decree entered by a court of competent jurisdiction; and

WHEREAS, the Director, upon entry of this Consent Decree, will (a) rescind his decision to deny Phelps Dodge's application for a 1986 operating permit, (b) rescind the afore-referenced notice of violation and order of abatement, and (c) issue an operating permit consistent with the terms of this Consent Decree, including its duration; ++EP++

Page 5

WHEREAS, Phelps Dodge disputes the allegations of the Complaints filed by the United States and by the State herein and denies that it has violated the Act or the Arizona SIP or any Arizona statute or regulation at the Douglas Smelter as alleged by EPA or the State in their respective Complaints, but to settle the disputes arising from said Complaints in this action and the administrative actions by the Director without litigation, and to enable the United States to fulfill the aforesaid commitments to Mexico, Phelps Dodge agrees not to contest the jurisdictional allegations contained in the Complaints and agrees to the terms and entry of this Consent Decree; provided, however, that Phelps Dodge does not consent to the entry by this Court of a decree with terms and conditions materially different from those contained in this Consent Decree; and

WHEREAS, the parties agree that operation of the Douglas Smelter until January 15, 1987 with the Interim Period Compliance Program specified herein will protect the public health and welfare, ensure expeditious final compliance with the Act, enable Phelps Dodge to effect an orderly cessation of Smelting at the Douglas Smelter, and mitigate adverse employment effects from closure of the Smelter; and

WHEREAS, for the purpose of settling this litigation and to resolve the other outstanding issues recited above, without trial of any issue of fact or law, the parties, by and through their attorneys and authorized representatives, have each consented to and have moved the Court to enter this Consent Decree; ++EP++

Page 6

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

1. JURISDICTION AND VENUE

1. Subject matter jurisdiction

a. Plaintiff. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Sub-Section 1331, 1345, and 1355, and Section 113 of the Clean Air Act, 42 U.S.C. Section 7413. The Complaint states a claim upon which relief can be granted against Phelps Dodge under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and under the federally approved Arizona SIP, Arizona Department of Health Services ("ADHS") Regulations 7-1-3.6 ("PM SIP"), and R9-3-515A and R9-3-515C ("SO2 SIP").

b. Intervenor. This Court has jurisdiction over the subject matter of this action pursuant to F.R.C.P. 24(a) and Section 304(b)(1)(B) of the Act, 42 U.S.C. Section 7604(b)(1)(B). The Intervenor's Complaint states a claim upon which relief can be granted against Phelps Dodge under Section 304(b)(1)(B) of the Act.

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

II. SETTLEMENT IN PUBLIC INTEREST AND EFFECTIVE DATE

3.a. The parties to this Consent Decree agree, and the Court finds, that this action and this Consent Decree constitute diligent prosecution of the Act with respect to the claims alleged in the Complaints herein, and that settlement of this action without further litigation is in the public interest and is the most appropriate means of resolving this action and potential litigation involving the Director's denial of the 1986 operating permit and his issuance of the order of abatement. ++EP++

Page 7

b. Phelps Dodge agrees to be bound by the terms and conditions of this Consent Decree commencing upon the signature by Phelps Dodge of the Consent Decree.

III. PERSONS BOUND

4. This Consent Decree shall apply to and be binding upon Phelps Dodge, its officers, directors, divisions, subsidiaries, successors in interest and assigns, and upon the United States on behalf of EPA and upon the State on behalf of ADHS. Phelps Dodge shall give written notice of this Consent Decree and its obligations thereunder to all such persons bound by its terms with responsibility for carrying out the requirements of this Consent Decree, and shall submit to EPA and to the State a copy of any such notice within fifteen (15) days after giving the notice. Each undersigned representative certifies that he or she is fully authorized to execute this Consent Decree and to legally bind the party he or she represents to this document. Phelps Dodge shall give written notice of this Consent Decree and its obligations thereunder to any successors in interest or assigns priror to any transfer or assignment of ownership in, or operation of the Douglas Smelter, and shall submit to EPA and to the State a copy of any such notice within fifteen (15) days after giving the notice. ++EP++

Page 8 IV. DEFINITIONS

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

a. "Arizona SIP"--Arizona PM SIP Regulation 7-1-3.6, attached hereto as Appendix A, and Arizona SO2 SIP Regulation R9-3-515A and C, attached hereto as Appendix B.

b. "Arizona SO2 SIP Emissions Limitations" -- Arizona SO2 SIP Regulation R9-3-515.C.1.f.

c. "Designated Liability Area" or "DLA" -- the geographic area within a radius of 40 kilometers from the center point of the converter stack at the Douglas Smelter, excluding areas in Mexico.

d. "Final Compliance Date" -- January 15, 1987 or an earlier date of cessation of Smelting at the Douglas Smelter pursuant to Paragraph 24.a(iv).

e. "Fugitive Emissions" or "Fugitive Gases" -- SO2 and PM emitted into the atmosphere from other than a stack.

f. "Interim Period" -- the period commencing immediately upon signature by Phelps Dodge of this Consent Decree until the Final Compliance Date. ++EP++

Page 9

g. "Recommence Smelting" or "Recommencement of Smelting" -- use of the Douglas Smelter for Smelting after the Final Compliance Date.

h. "SIP" -- federally approved State Implementation Plan.

i. "Smelting" or "Smelt" -- the production of any nonferrous metal through the use of pyrometallurgical techniques.

j. "Short-Term Peak SO2 Concentration" -- the six-minute average SO2 concentration set forth in Paragraph 20.f. in the DLA.

k. "SO2 NAAQS" -- National Ambient Air Quality Standards for SO2 as set forth in 40 C.F.R. Sub-Section 50.4 and 50.5.

1. "Supplementary Control System" or "SCS" -- the system set forth in Appendix C of this Consent Decree, as it may be amended from time to time in accordance with law, for limiting the concentration of SO2 in the ambient air by varying the emissions of SO2 according to atmospheric conditions.

V. DOUGLAS SMELTER NSO APPLICATION

6. On May 15, 1985, Phelps Dodge applied to EPA, pursuant to Section 119 of the Act, 42 U.S.C. Section 7419, and to 40 C.F.R. Part 57, for a nonferrous smelter order ("NSO") for the Douglas Smelter. ++EP++

Page 10

7. EPA has issued interim suspensions of the Arizona SO2 SIP Emissions Limitations and integrally related SO2 SIP requirements, pending consideration of the Douglas Smelter NSO application. 40 C.F.R. 57.202(b); 50 Fed. Reg. 47841 (November 20, 1985); 51 Fed. Reg. 1294 (January 10, 1986); 51 Fed. Reg. 5401 (February 13, 1986); 51 Fed. Reg. 13091 (April 17, 1986).

8. On April 10, 1986, EPA proposed, at 51 Fed. Reg. 13085 (April 17, 1986), to deny the Phelps Dodge Douglas Smelter NSO application, unless Phelps Dodge corrected certain alleged deficiencies in the Application, and addressed certain other EPA concerns specified in the proposed denial.

9. Upon entry of this Consent Decree, Phelps Dodge will withdraw immediately the Douglas Smelter NSO application and will not re-apply thereafter for an NSO for the Douglas Smelter.

VI. COMPLIANCE PROGRAM

10. The purposes of this Consent Decree are to establish a schedule and method whereby the Douglas Smelter will expeditiously comply with the provisions of the Arizona SIP and of A.C.R.R. R9-3-515.B and C under Arizona law by ceasing Smelting by the Final Compliance Date, and with the Interim Period SO2 and PM pollution control requirements set forth in this Decree; to provide for the payment by Phelps Dodge of civil penalties for alleged past violations of the Act at the Douglas Smelter, as set forth in the Plaintiff's Complaint; to assure that the Douglas Smelter will be operated until the Final Compliance Date in such a manner that it will protect public health and welfare under state and federal law; and to specify the law and procedures applicable to the Douglas Smelter during the Interim Period and subsequent to the Final Compliance Date. ++EP++

Page 11 A. Final Compliance Program

11. On or before January 15, 1987, Phelps Dodge shall achieve full and continuous compliance with the Arizona SIP and with A.C.R.R. R9-3-515.B and C at the Douglas Smelter by ceasing Smelting.

12. Phelps Dodge shall provide EPA and the State with written certification of cessation of Smelting at the Douglas Smelter pursuant to Paragraph 11 within fifteen (15) days after cessation of Smelting at the Douglas Smelter.

13. Within ten (10) days after entry of this Consent Decree, Phelps Dodge shall have issued a letter of credit in the amount of THREE MILLION DOLLARS ($3,000,000.00), substantially in the form of Appendix D hereto. Such security shall be automatically payable, in accordance with its terms, should the Douglas Smelter fail to comply with the provisions of Paragraph 11.

14. Phelps Dodge shall be liable for stipulated penalties of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) per day, for each day of Smelting at the Douglas Smelter past January 15, 1987, except as provided in Paragraph 18.

15. Phelps Dodge shall take the following steps to ensure an orderly cessation of Smelting at Douglas Smelter by January 15, 1987:

a. The Phelps Dodge board of directors shall, within thirty (30) days of entry of this Consent Decree, pass a resolution to cease Smelting at the Douglas Smelter consistent with this Consent Decree, and within fifteen (15) days thereafter submit to EPA and the State a copy of said resolution. ++EP++

Page 12

b. Phelps Dodge shall give notice of the obligations of Paragraph 11 of this Consent Decree to Douglas Smelter employees by September 1, 1986, by posting notices at the Douglas Smelter, and shall submit to EPA and the State a copy of such notice within fifteen (15) days after its posting.

c. Phelps Dodge shall reduce the volume of concentrate on hand at the Douglas Smelter to no more than 10,000 tons by January 7, 1987.

d. Phelps Dodge shall cease concentrate deliveries to the Douglas Smelter by January 7, 1987.

e. On or before January 15, 1987, Phelps Dodge shall notify EPA in writing of the smelter or smelters to which the concentrate which would otherwise have been shipped to the Douglas Smelter during the period January 7 through February 6, 1987 (the "January Concentrate") will be shipped by Phelps Dodge for Smelting. For any such smelter owned or operated by Phelps Dodge, Phelps Dodge shall certify to EPA that the smelter is in compliance with applicable air pollutant emissions limitations of a SIP or a New Source Performance Standard, upon commencement of shipment of the January Concentrate to that smelter. For purposes of this paragraph, the January Concentrate shall, unless otherwise demonstrated by Phelps Dodge, be that tonnage of concentrate equal to the average monthly tonnage of concentrate Smelted at the Douglas Smelter in 1986. ++EP++

Page 13

16. A defense of force majeure shall not excuse Phelps Dodge from complying with the Final Compliance Program obligations specified in Paragraphs 11 through 14 of this Consent Decree.

17. Cessation of Smelting at the Douglas Smelter shall not entitle Phelps Dodge to credits for any resultant emissions reductions. Phelps Dodge shall not seek to bank emissions reduction credit nor shall Phelps Dodge seek to bank emissions reduction credits from cessation of Smelting at the Douglas Smelter. Phelps Dodge hereby expressly waives any rights it might otherwise have to use, transfer or bank emissions reduction credits, or to otherwise obtain credits, for any emissions reductions resulting from cessation of Smelting at the Douglas Smelter.

B. Recommencement of Smelting

18. Phelps Dodge shall not Recommence Smelting at the Douglas Smelter after the Final Compliance Date, without complying with the following requirements:

a. Phelps Dodge shall submit to EPA and to the State three months prior written notice of Phelps Dodge's intention to Recommence Smelting at the Douglas Smelter, specifying Phelps Dodge's plans for complying with the Act and implementing regulations and Arizona air quality standards and implementing regulations, including but not limited to compliance with the applicable New Source Performance Standards, 40 C.F.R. Part 60, and with the applicable new source review/prevention of significant deterioration requirements. ++EP++

Page 14

The notice shall also specify a schedule for start-up testing.

b. Phelps Dodge shall demonstrate to EPA's and to the State's reasonable satisfaction compliance with the Act and implementing regulations and Arizona air quality standards and implementing regulations within 60 days after Recommencement of Smelting.

C. Interim Period Compliance Program

19. EPA, the State and Phelps Dodge agree that the program for compliance set forth in this Subpart C of this Consent Decree is intended to achieve reductions of SO2 and PM emissions from the Douglas Smelter into the AQCR and into Mexico during the Interim Period, and to assure that the Douglas Smelter is operated in a manner that assures protection of the public health and welfare. Phelps Dodge shall comply with all Interim Period requirements on and after the applicable Interim Period compliance dates specified herein.

20. During the Interim Period, Phelps Dodge shall operate the Douglas Smelter in accordance with the following Interim Period requirements:

a. Phelps Dodge shall prevent SO2 emissions that caused ambient concentration of SO2 within the DLA in excess of: (i) the SO2 NAAQS, or (ii) the Short-Term Peak SO2 Concentration. Phelps Dodge shall at all times prior to the Final Compliance Date operate and maintain the Douglas Smelter SCS as required in the SCS Operating Manual (Appendix C), as it may be amended from time to time in accordance with law. ++EP++

Page 15

Operation of the Douglas Smelter in compliance with Appendix C, as it may be amended from time to time in accordance with law, shall in no manner relieve Phelps Dodge of its obligation (i) to prevent exceedances of the SO2 NAAQS or Short-Term Peak SO2 Concentration in the DLA, or (ii) to pay stipulated penalties as set forth in Paragraph 24 for any such exceedances.

b. Phelps Dodge shall limit PM emissions by operating and maintaining the PM control equipment currently installed at the Douglas Smelter in accordance with subparagraph h, and by reducing emissions of PM constituents that derive from SO2 by limiting SO2 emissions in accordance with subparagraph a.

c. By October 1, 1986, Phelps Dodge shall install and operate, as part of the SCS, an SO2 monitor on the Mexican border to be located at the city sewage treatment plant at approximately UTM coordinates 3467400 N and 635800 E. The actual siting shall be subject to advance approval by EPA and the State.

d. All ambient air quality monitoring must be conducted in accordance with the provisions of 40 C.F.R. Parts 50, 53, and 58, except as may otherwise be specified in this Consent Decree.

e. For the purposes of Paragraph 24 of this Consent Decree, violations of the SO2 NAAQS within the DLA shall be determined in the following manner. The monitors referred to for purposes of Paragraph 24 are the monitors that are part of the SCS. ++EP++

Page 16

i. Annual Average: An annual arithmetic average concentration greater than 80 micrograms per cubic meter (0.03 ppm) at any monitor shall constitute a violation. Violations at different monitors shall constitute separate violations. Annual averages shall be calculated on a calendar year basis.

ii. 24-Hour Average: At each continuous SO2 monitor, a 24-hour average concentration shall be calculated at the beginning of each clock hour for the previous 24-hour period. Any 24-hour average concentration greater than 365 micrograms per cubic meter (0.14 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at one monitor within the network. For the purpose of determining this one-time annual exception, only one 24-hour average concentration in excess of the SO2 NAAQS is allowed anywhere in the SCS network of ambient air quality monitors, not one 24-hour average concentration exceedance at each monitor. At any given monitor, separate exceedances of the SO2 NAAQS shall not contain overlapping hourly readings. Simultaneous violations at more than one monitor are considered to be separate violations.

iii. 3-Hour Average: At each continuous SO2 monitor, a 3-hour average concentration is to be calculated at the beginning of each clock hour for the previous 3-hour period. Any 3-hour average concentration greater than 1300 micrograms per cubic meter (0.5 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any one monitor within the network. ++EP++

Page 17

For the purpose of determining this one-time annual exception, only one 3-hour average concentration in excess of the SO2 NAAQS is allowed anywhere in the SCS network of ambient air quality monitors, not one 3-hour average concentration exceedance at each monitor. At any given monitor, separate exceedances of the SO2 NAAQS shall not contain overlapping hourly readings. Simultaneous violations at more than one monitor are considered to be separate violations.

f. For purposes of Paragraph 24 of this Consent Decree, a Short-Term Peak SO2 Concentration exceedance within the DLA shall be a concentration of SO2 in excess of 5,240 micrograms per cubic meter (two (2.0) ppm) for a period of six (6) minutes, determined in the following manner. At each continuous SO2 monitor, a six-minute average concentration is to be calculated at the beginning of each three-minute period (starting on the clock hour) for the previous six-minute period. Any six-minute average concentration greater than 2.0 ppm at any monitor shall constitute an exceedance. At any given monitor, separate exceedances of the 2.0 ppm limit shall not contain overlapping three-minute readings. Simultaneous exceedances at more than one monitor are considered to be separate exceedances. The monitors referred to, for the purposes of Paragraph 24, are the monitors that are part of the SCS. ++EP++

Page 18

g. In-stack Emissions Monitoring Requirements: Phelps Dodge shall install, operate and maintain at the Douglas Smelter all continuous in-stack SO2 monitors and continuous in-stack volumetric flow rate monitors required by the Arizona SO2 SIP, Regulation R9-3-515(C)(4).

h. Electrostatic Precipitators (ESPs)/Baghouse/Fugitive Emissions Capture Systems Operation and Maintenance Programs.

i. Phelps Dodge shall implement the Preventative Maintenance Program for the ESPs at the Douglas Smelter set forth in Appendix E.

ii. Phelps Dodge shall implement the operations and maintenance procedures for the baghouses at the Douglas Smelter set forth in Appendix F.

iii. Phelps Dodge shall continue operation of all existing fugitive gas capture systems (matte tapping hoods and slag skimming hoods) to maximize the capture of all fugitive gases. Fugitive gas capture and control systems shall be inspected at weekly intervals in order to ensure their proper operation and maintenance.

k. Compliance with SO2 SIP Provisions and Requirements. Phelps Dodge shall comply with the provisions and requirements of the Arizona SO2 SIP that are set forth in Appendix G. ++EP++

Page 19 VII. REPORTING

21. Reporting. In addition to the reporting requirements set forth in all appendices to this Consent Decree, the following reporting requirements shall apply.

a. Monthly Reporting. On or before the fifteenth day of each month, Phelps Dodge shall submit a signed compliance report for the previous calendar month to EPA and to the State. This report shall contain the data and information specified below:

i. A daily sulfur balance and an average daily sulfur balance for the month.

ii. Daily emission rates in tons per day of sulfur dioxide being emitted into the atmosphere from all points being monitored by the in-stack SO2 monitors specified in Paragraph 20g.

iii. Data regarding each SCS ambient air monitor (data to express SO2 concentrations in micrograms per cubic meter) and, where indicated, each in-stack SO2 monitor:

(a) Cumulative average concentration of SO2 in the ambient air from January 1, 1986.

(b) Monthly average concentration of sulfur dioxide.

(c) Maximum three-hour average concentration of sulfur dioxide, and date and time of occurrence.

(d) Number of exceedances of the three-hour SO2 NAAQS, and the date, time, and concentration of any such exceedance. ++EP++

Page 20

(e) Maximum 24-hour average concentration of sulfur dioxide, and date and time of occurrence.

(f) Number of exceedances of the 24-hour SO2 NAAQS, and the date and concentration of any such exceedance.

(g) Number of exceedances of the Short-Term Peak SO2 Concentration, and the date, time, and concentration of any such exceedance.

(h) The percentage of time each SCS ambient air monitor, and each in-stack SO2 monitor specified in Paragraph 20g operated and provided valid data, the actual time the monitor was not in operation or providing valid data, and the reasons why.

(i) Results of weekly span check calibrations.

(j) Results of daily automatic in-stack sulfur dioxide monitor (SM 810) zero and span checks and of monthly checks of calibration of the in-stack velocity and temperature thermocouples.

iv. A report on the implementation of curtailment decisions pursuant to the Appendix C, as it may from time to time be amended in accordance with law, containing the following information for each decision: date; curtailment strategy used; prescribed emission rate; time of implementation; actual emission rate recorded; compliance. ++EP++

Page 21

v. All primary calibration data for each SCS ambient air quality monitor, in-stack SO2 monitor, and associated data recording system.

b. Notification Requirements

i. Phelps Dodge shall notify EPA and the State orally within twelve (12) hours after an SO2 NAAQS or a Short-Term Peak SO2 Concentration exceedance has been detected by the SCS. The notification shall be made by calling EPA at 415-974-8201 or, other than during normal working hours, at 800-424-9067, and, with respect to the State, at 602-257-2276 and may be made by reporting the required information on the telephone answering recorder. The notification shall provide the following information:

(a) The time of onset and duration of the exceedance.

(b) A description of the nature of the exceedance.

ii. Phelps Dodge shall submit a signed report to EPA and the State within seven days after an SO2 NAAQS or a Short-Term Peak SO2 Concentration exceedance has been detected by the SCS. The report shall provide the following information:

(a) A description of the dispersion conditions and emissions associated with the exceedance.

(b) A description of the actions taken to prevent and terminate the exceedance and prevent future exceedances. ++EP++

Page 22

22. All reports, notices, control plans, and other information that must be submitted in satisfaction of a requirement of this Consent Decree shall be addressed as follows: to EPA:

U.S. Environmental Protection Agency

215 Fremont Street

San Francisco, California 94105

Attn.: Director, Air Management Division

to the State:

Arizona Department of Health Services

Division of Environmental Health Services

2005 North Central Avenue

Phoenix, Arizona 85004

Attn: Manager, Office of Air Quality

to Phelps Dodge:

Superintendent

Douglas Reduction Works

Phelps Dodge Corporation

P.O. Drawer E

Douglas, Arizona 85608-0019

VII. PENALTIES

23. Civil Penalties. Within thirty (30) days of the entry of this Consent Decree, Phelps Dodge shall pay a civil penalty in the amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) to the United States in satisfaction of the civil claims of the United States for the Douglas Smelter's alleged past violations of the Act as set forth in the Complaint in this matter. Payment shall be made and tendered as set forth in Paragraph 25.

24. Stipulated Penalties and Additional Closure Requirements. Unless excused by the provisions of Paragraph 27, the following stipulated penalty and closure provisions shall apply: ++EP++

Page 23

a. Interim Requirements for Protection of Air Quality

(i) For each violation of the SO2 NAAQS in the DLA, Phelps Dodge shall be liable for a stipulated penalty in the amount of ONE HUNDRED THOUSAND DOLLARS ($100,000.00).

(ii) If there is an exceedance of the SO2 NAAQS, Phelps Dodge shall, within seven (7) days, modify the SCS procedures to prevent recurrences and shall simultaneously submit to EPA and the State for approval revisions to Appendix C reflecting the modification.

(iii) For each exceedance of the Short-Term Peak SO2 Concentration, in the DLA, Phelps Dodge shall be liable for a stipulated penalty of ONE HUNDRED THOUSAND DOLLARS ($100,000.00).

(iv) If there is an exceedance of the Short-Term Peak SO2 Concentration, Phelps Dodge shall within forty-eight (48) hours modify Appendix C to prevent the recurrence of such an exceedance. If there are more than four (4) exceedances of the Short-Term Peak SO2 Concentration during the Interim Period, Phelps Dodge shall immediately stop feeding concentrate to the Smelter. In that event, EPA and/or the State may each, in its absolute discretion, require Phelps Dodge to cease Smelting at the Douglas Smelter. EPA and/or the State shall provide Phelps Dodge with written notification of any requirement to cease Smelting under this subparagraph. The notification shall specify a deadline for cessation of Smelting, which shall not be earlier than fifteen (15) days after the receipt of the notification, or January 15, 1987, whichever is earlier. In the event that EPA or the State does require Phelps Dodge to cease Smelting, Phelps Dodge may request permission to operate one furnace for a maximum of two weeks in order to dispose of concentrate on hand at the Smelter on the date of the request. ++EP++

Page 24

EPA and the State shall each have absolute discretion to deny the request. In no event shall any such request seek extension of the Final Compliance Date beyond January 15, 1987. For purposes of this subparagraph (iv) only, no more than one monitored exceedance of the Short-Term Peak SO2 Concentration in the DLA during any one-hour period shall count as an exceedance.

(v) The provisions of this subparagraph a shall not apply until the expiration of seven (7) days from and including the date of lodging of this Consent Decree.

b. Implementation schedules, testing, monitoring and operation and maintenance requirements: Any failure by Phelps Dodge 1) to install required equipment, or implement a change in operating practices, in accordance with the implementation requirements set forth in this Consent Decree, or 2) to perform any testing, monitoring or operation and maintenance requirements set forth in this Consent Decree, shall subject Phelps Dodge to stipulated penalties in accordance with the following schedule:

Number of days in violation Penalty per day per violation 1-14 $1,000 15-28 $2,000 more than 28 $3,000 ++EP++ Page 25

c. SCS and In-Stack Monitors: Any failure to:

(i) Until October 1, 1986, maintain 98% data recovery at any ambient SO2 monitor in the SCS network in any one (1) month; on and after October 1, 1986, maintain 99% data availability at any ambient SO2 monitor in the SCS network in any one (1) month;

(ii) Maintain ambient SO2 analyzer rise and fall time at any monitor to 95% of full scale of six (6) minutes or less;

(iii) Maintain accuracy of ambient SO2 monitors within 15% of audit standard concentration or 1% of full scale, whichever is greater, for total sample system;

(iv) Until October 1,1986, provide data for a period of more than one hundred eighty (180) continuous minutes at any ambient SO2 monitor; on and after October 1,1986, provide data for a period of more than ninety (90) continuous minutes at any ambient SO2 monitor;

(v) Implement a curtailment decision required by Appendix C, as it may be amended from time to time in accordance with law;

(vi) At in-stack SO2 monitors, measure at least 95% of the hours during which emissions occur in any month;

shall subject Phelps Dodge to stipulated penalties in accordance with the following schedule: ++EP++

Page 26 Number of violations Penalty per violation 1-14 $5,000 15-28 $10,000 more than 28 $15,000

d. Reporting and notification requirements: Any failure by Phelps Dodge to comply with any reporting or notification requirement set forth in Paragraph 21 of this Consent Decree shall subject Phelps Dodge to stipulated penalties in accordance with the following schedules:

Number of days in violation of Paragraph 21a Penalty per day violation 1-14 $ 500 15-28 $1,000 more than 28 $1,500 Number of days in violation of Paragraph 21b Penalty per day violation 1-14 $5,000 15-28 $10,000 more than 28 $15,000

25. Payment of any stipulated penalties accruing within a given quarter shall be paid by Phelps Dodge within thirty (30) days after EPA has made written demand. Payment of such stipulated penalties, and of the civil penalties set forth in Paragraph 23, shall be made by cashier's check payable to "Treasurer, United States of America", and shall be tendered to:

United States Attorney

District of Arizona P.O. Box 1951

Tucson, Arizona 85702-1951 ++EP++

Page 27

Within 10 days of any such payment, Phelps Dodge shall notify EPA and the State in writing that payment has been made, and shall include with said written notice a photocopy of the cashier's check.

26. Payment of penalties by Phelps Dodge pursuant to this Consent Decree is not a deductible expense of any kind for the purpose of federal, state or local taxes, nor shall it be used in any way to affect property value assessments.

IX. GENERAL PROVISIONS

27. a. Notification of Delay. If any event occurs which causes or may cause delays in the satisfaction of any obligation of Phelps Dodge set forth in this Consent Decree, Phelps Dodge shall notify the Court and EPA and the State, in writing within twenty-five (25) days after the event, of both the event and the delay or anticipated delay, as appropriate, describing in detail the anticipated length of the delay, the measures taken and to be taken by Phelps Dodge to prevent or minimize the delay, and the timetable by which those measures will be implemented. Phelps Dodge shall adopt all reasonable measures to avoid or minimize any such delay. Failure by Phelps Dodge to comply with all requirements of this subparagraph shall render the provisions of subparagraph b inapplicable and of no effect as to the particular delay involved.

b. Force Majeure. Except as provided in Paragraph 16, if the parties agree that the delay or anticipated delay in compliance with this Consent Decree has been or will be caused by circumstances beyond the control of Phelps Dodge, the time for performance hereunder may be extended for a period no longer than the delay resulting from such circumstances. ++EP++

Page 28

In the event the parties cannot agree, then any party may submit the matter to this Court for resolution.

c. Burden of Proof. The burden of proving that any delay is caused by circumstances beyond the control of Phelps Dodge shall rest with Phelps Dodge. Increased costs or expenses associated with the implementation of actions called for by this Consent Decree shall not, in any event, be a basis for changes in this Consent Decree or extensions of time under this paragraph. Delay in achievement of one interim step shall not necessarily justify or excuse delay in achievement of subsequent steps.

d. For the purpose of this paragraph, "delay" or "delays" means, respectively, "delay or interruption" or "delays or interruptions."

28. Reservation of Rights

a. Except as provided in this subparagraph, EPA and the State reserve the right to impose, consistent with applicable laws and regulations, requirements for the Douglas Smelter that are more stringent than those set forth in this Consent Decree. In addition, EPA and the State reserve the right to seek any and all relief for violations of law or of this Consent Decree, including but not limited to relief under Section 303 of the Act, 42 U.S.C.Section 7603, or A.R.S.Section 36-1719.C.; except that EPA and the State waive the right 1) to seek civil penalties, other than the penalties provided in this Consent Decree, for SO2 NAAQS violations or Short-Term Peak SO2 Concentration exceedances that are the subject of stipulated penalties, or for Arizona PM SIP Regulation 7-1-3.6 or Arizona SO2 SIP Emission Limitations violations that occur prior to the Final Compliance Date, and 2) to seek injunctive relief to enforce the PM SIP emissions limitations for the Douglas Smelter, other than as provided in this Consent Decree, prior to the Final Compliance Date. ++EP++

Page 29

b. Phelps Dodge reserves the right to seek administrative and judicial review of: 1) EPA or State actions to establish or enforce requirements for the Douglas Smelter that are more stringent than those set forth in this Consent Decree; and 2) EPA or State actions seeking relief other than that set forth in this Consent Decree.

29. Right of Entry. EPA, the ADHS, and their authorized representatives and contractors shall, upon reasonable notice to Phelps Dodge, have access to the Douglas Smelter at reasonable times for the purpose of observing and monitoring the implementation of this Consent Decree. This right of entry shall be in addition to, and not in limitation or substitution of, EPA's rights under applicable law, including Section 114 of the Act, 42 U.S.C. Section 7414, and shall be in addition to, and not in limitation or substitution of ADHS' rights under applicable law, including A.R.S.Section36-1708.01 and A.R.S.Section 36-136.A.5.

30. Compliance with other laws. This Decree shall be in full settlement and satisfaction of only the action filed herein. This Decree does not encompass issues regarding sources, operations, facilities, or processes of Phelps Dodge not specifically covered by the terms of this Consent Decree and is without prejudice to the rights of EPA, the State or Phelps Dodge arising under the Act, or other applicable laws rules and regulations, with regard to such issues. ++EP++

Page 30

Nothing in this Consent Decree shall constitute a permit or order of any kind, or a modification of any permit or order of any kind, under federal state or local law, and shall in no way alter, modify or revoke federal, state and local laws, regulations or requirements. Nor shall this Consent Decree relieve Phelps Dodge in any manner of its obligations to apply for, obtain and comply with all applicable permits and orders, and to comply with any federal, state and local statutes and the regulations promulgated thereunder. Compliance with the terms of this Consent Decree shall be no defense to an action to enforce such requirements, except as provided in Paragraph 28a.

31. Severability: The provisions of this Consent Decree are severable. If any provision of this Consent Decree is declared by the Court to be invalid and/or unenforceable, all other provisions of this Consent Decree shall remain in full force and effect.

32. Modifications:

a. Any modification of this Consent Decree must be in writing and approved by the Court. Except as set forth below, any party may apply to the Court for a modification of this Consent Decree in the event of an amendment to applicable federal or state law, regulations or orders that might alter the rights or obligations of any party hereto, including but not limited to modification by the State of the emissions limitations set forth in A.C.R.R. R9-3-515 and approval by EPA of any revision to applicable portions of the Arizona SIP that contain emissions limitations or requirements that are different from the limitations or requirements referred to in this Consent Decree; provided that no such modification may be granted if such modification would be inconsistent with the Act or Arizona air quality statutes or regulations, with other provisions of law, or with any commitments between the United States and Mexico, by and through their authorized representatives, relating to air quality control at the Douglas Smelter; and provided further that no modification of this Consent Decree may be sought or granted because of a change in the Arizona PM SIP which would otherwise allow increased PM emissions. ++EP++

Page 31

Nothing in this Paragraph shall be construed to confer on the Court jurisdiction not otherwise provided by law, nor shall it be construed to relieve any party from pursuing the procedures provided by the Act and Arizona air quality statutes or regulations for administrative and judicial review before seeking a modification of the Consent Decree.

b. Phelps Dodge reserves the right to apply to the Court for a modification of this Consent Decree if EPA enters into a consent decree or issues an order applicable to any copper smelter other than those operated by Phelps Dodge with respect to control of short-term SO2 peaks under the Act, and if such consent decree or order contains major provisions applying substantially different principles for measurement or control of short-term SO2 peaks unjustified by source-specific factors or law. ++EP++

Page 32

EPA and the State reserve the right to oppose any such application on any ground, including but not limited to the ground that the provisions of any other consent decree or order are not relevant to the matters covered by this Consent Decree.

c. Within ten (10) days after entry of this Consent Decree, the Director will issue an operating permit to the Douglas Smelter consistent with the term of Appendix H of this Consent Decree. The operating permit shall remain in effect until the termination of this Consent Decree. If the Director issues an operating permit for the Douglas Smelter containing no material term or condition different from and/or in addition to the terms of this Consent Decree, including Appendix H, the parties agree to move within sixty (60) days after issuance of the permit that this Court amend this Consent Decree to incorporate the operating permit in and make it enforceable as part of this Consent Decree.

d. Within ten (10) days of the entry of this Consent Decree, the Director will rescind his decisions (i) to deny Phelps Dodge's 1985 application for an operating permit, and (ii) to issue the afore-referenced order of abatement.

e. Within ten (10) days of the entry of this Consent Decree, Phelps Dodge will withdraw its appeal (No. 85-0001) before the Arizona State Air Pollution Control Hearing Board.

33. Retention of Jurisdiction. The Court shall retain jurisdiction of this matter for the purposes of interpreting, implementing and enforcing the terms and conditions of this Consent Decree or to take any action necessary or appropriate for its construction or execution. ++EP++

Page 33

34. Termination. All obligations of Phelps Dodge under this Consent Decree, except for the obligations set forth in Paragraphs 17 and 18, shall terminate six (6) months after the date on which Phelps Dodge has demonstrated final compliance by the Douglas Smelter, in accordance with Paragraph 12, and the obligations set forth in Paragraphs 17 and 18 shall terminate three (3) years after such date, whereupon the entire Consent Decree shall terminate.

35. Appendices. In the event that any provision of any appendix to this Consent Decree differs from the provisions of the body of this Consent Decree, the provisions of the body of this Consent Decree shall govern.

36. Public Comment. The parties agree and acknowledge that final approval and entry of this Consent Decree is subject to the requirements of 28 C.F.R. Section 50.7, providing for notice to the public and public comments.

37. Costs and Fees. Each party in this action shall bear its own court costs and attorneys' fees.

CONSENTED TO:

FOR THE UNITED STATES OF AMERICA, Plaintiff

BY/s/ F.Henry Habicht II

F. HENRY HABICHT II

Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20530 ++EP++

Page 34

BY/s/ Richard H. Mays

RICHARD H. MAYS

Acting Assistant Administrator

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

BY/s/ SIGNATURE ILLEGIBLE

STEPHEN M. MCNAMEE

United States Attorney

DONALD B. OVERALL

Assistant United States Attorney

District of Arizona

P.O. Box 1951

Tucson, Arizona 85702-1951

BY/s/ SIGNATURE ILLEGIBLE

BARRY S. SANDALS

Environmental Enforcement Section

Land and Natural Resources Division

United States Department of Justice

10th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530 ++EP++

Page 35

BY/s/ John Wise

JUDITH E. AYRES for

Regional Administrator

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, CA 94105 ++EP++

Page 36

CONSENTED TO:

FOR THE STATE OF ARIZONA, Intervenor.

BY/s/ SIGNATURE ILLEGIBLE

LLOYD F. NOVICK, M.D., M.P.H.

Director

Department of Health Services

1740 West Adams Street

Phoenix, Arizona 85007

BY/s/ James Donald Vieregg

JAMES DONALD VIEREGG

Assistant Attorney General

Office of the Arizona Attorney General

1275 West Washington Street

Phoenix, Arizona 85007

CONSENTED TO:

FOR PHELPS DODGE CORPORATION, Defendant

BY/s/ Amy R. Coy

AMY R. COY

Evans, Kitchel & Jenckes, P.C.

2600 North Central Avenue

Phoenix, Arixona 85004-3099

BY/s/ SIGNATURE ILLEGIBLE

DAVID E. MENOTTI

JEFFREY G. MILLER

Verner, Liipfert, Bernhard, McPherson and Hand

1660 L Street, N.W.

Washington, D.C. 20036

BY/s/ Richard W. Pendleton, Jr.

RICHARD W. PENDLETON, JR.

Senior Vice President

Phelps Dodge Corporation

300 Park Avenue

New York, New York 10022 ++EP++

Page 37

CONSENTED TO:

FOR ENVIRONMENTAL DEFENSE FUND, INC.,

PRISCILLA ROBINSON, RICHARD A. KAMP, and

HERBERT M. THOMPSON, JR. Intervenors.

BY/s/ Donald M. Peters

ANDREW D. HURWITZ

DONALD M. PETERS

JEFFREY C. ZIMMERMAN

Meyer, Hendricks, Victor, Osborn & Maledon

2700 North Third Street

Phoenix, Arizona 85004

BY/s/ Robert E Yuhnke

ROBERT E. YUHNKE

Environmental Defense Fund, Inc.

1405 Arapahoe Avenue

Boulder, Colorado 80302

Approved and judgment entered in accordance with the fore-going Consent Decree in CIV 86-424 TUC WDB this 20 day of October, 1986.

/s/ William D. Browning

William D. Browning

U. S. District Judge ++EP++

KERN OIL & REFINING COMPANY

DOC 01 OF 01

CONSENT DECREE

09-85-C001

CAA

PETRO

19850503

19850503

CAD990724916

KERN OIL AND REFINERY

BAKERSFIELD, CA

85-259-EDP

09

CONSENT DECREE, US V. KERN OIL & REFINING COMPANY

Page 1

FABIAN HENRY

Assistant United States Attorney

Eastern District of California

4311 Federal Building

1130 O Street

Fresno, California 93721

PAUL J. SCHAEFFER

Environmental Enforcement Section

Land and Natural Resources Division

U.S. Department of Justice

10th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

(202) 633-1308

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

UNITED STATES OF AMERICA

Plaintiff,

v.

KERN OIL & REFINING COMPANY,

Defendant.

Plaintiff, the United States of America, on behalf of the United States Environmental Protection Agency (EPA), filed a complaint in this case alleging that Defendant Kern Oil & Refining Company, a California Corporation which operates a petroleum refining and marketing facility in Bakersfield, California, violated the Clean Air Act (the Act), 42 U.S.C. Section 7401, et seq., and the federally enforceable California State Implementation Plan (SIP), Kern County Air Pollution Control District Rule 413 of Regulation IV (hereinafter Rule 413), concerning organic liquid loading, promulgated by the State as part of its SIP and approved by EPA pursuant to Section 110 of the Act, 42 U.S.C. Section 7410, at 42 Fed. Reg. 422119 (August 22, 1977). ++EP++

Page 2

Specifically, on June 9, 1983, the Complaint alleges that Kern violated Rule 413 by permitting organic vapors and/or liquid leaks from gasoline loading arms. A notice or violation was issued by EPA on July 27, 1983, pursuant to Section 113(a) of the Act, 42 U.S.C. Section 7413(a). On March 22, 1984, EPA issued an Administrative Order pursuant to Section 113(a) of the Act, 42 U.S.C. Section 7413, requiring Kern to achieve and maintain continuous compliance with Rule 413. Defendant does not admit nor concede that any violation of Rule 413 occurred.

The parties agree and the Court finds that settlement of this matter is in the public interest and that the entry of this Decree without further litigation is the most appropriate means of resolving this matter. For the purpose of settling this litigation without the taking of any testimony nor the trial or adjudication of any issue of fact or law, the parties, by and through counsel, have moved the Court to enter this Consent Decree. The Decree shall not constitute evidence nor admission of any issue of fact or law by either party. ++EP++

Page 3

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

1. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. Sections 1331, 1345 and 1355, and Section 113 of the Act, 42 U.S.C. Section 7413. The Complaint states a claim upon which relief can be granted against Defendant under Section 113(b) of the Act, 42 U.S.C. Section 7413(b), and the California SIP, Kern County Air Pollution Control District Rule 413 of Regulation IV.

2. The Court has personal jurisdiction over the parties and subject matter jurisdiction over the controversy. Venue is proper in this Court. Defendant waives all objections to the Court's jurisdiction and to venue.

3. This Consent Decree shall apply to and be binding upon the United States and upon Defendant, its officers, directors, agents, servants, employees, successors, attorneys and assigns.

4. The complaint prays for injunctive relief and the imposition of civil penalties. Defendant, at a capital expenditure in excess of $60,000, has converted to "bottom loading" as prayed for in the complaint. In addition, Defendant agrees to and will pay a civil penalty of $2000.00 in full satisfaction of all civil penalties prayed for by Plaintiff in the complaint. Such sum shall be paid by a certified or cashier's check payable to the Treasurer of the United States and shall be delivered to the office of the United States Attorney, 3305 Federal Building, 650 Capitol Mall, Sacramento, California 95814 within thirty (30) days of entry of this decree. ++EP++

Page 4

5. Each party shall bear its own costs in this action.

6. This Decree in no way affects Defendant's responsibilities to comply with other federal, state and local laws and regulations.

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

8. Entry of this Decree and compliance with the requirements set forth herein shall be in full settlement and satisfaction of this action. Nothing herein shall, however, constitute a permit of any kind under state, local or federal law and in no way shall alter; limit or revoke local, state or federal laws or regulations.

9. The final approval and entry of this decree is subject to the requirements of 28 C.F.R. Section 50.7, which provides that notice of the proposed decree be given to the public and that the public shall have at least thirty days to comment thereon.

10. This decree shall terminate upon payment of the agreed civil penalty.

Entered on this day of ,1985.

UNITED STATES DISTRICT JUDGE ++EP++

Page 5

The undersigned attorneys for Plaintiff and Defendant agree to the foregoing Consent Decree.

CONSENTED TO:

UNITED STATES OF AMERICA,

Plaintiff

By:/s/ F. Henry Habicht

F. HENRY HABICHT II

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

Washington, D.C. 20530

Donald B. Ayer

United States Attorney

Eastern District of California

Assistant United States Attorney

Eastern District of California

/s/ Paul J. Schaeffer

PAUL J. SCHAEFFER, Attorney

Environmental Enforcement Section

Land and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20530

CONSENTED TO:

KERN OIL & REFINING COMPANY

Defendant

By:/s/ Thomas L. Eveland

THOMAS L. EVELAND

Vice President - Government Affairs ++EP++

Page 6

CONCUR:

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

By:/s/ Courtney M. Price

COURTNEY M. PRICE

Assistant Administrator for Enforcement and

Compliance Monitoring, EPA

United States Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

By:/s/ Robert W. Bergstrom

ROBERT W. BERGSTROM

Assistant Regional Counsel

EPA, Region IX

215 Fremont Street

San Francisco, CA 94105 ++EP++

ASARCO INC

DOC 01 OF 01

ORDER AMENDING CONSENT DECREE

09-81-C005

CAA

METAL 19810622

19831017

AZD008397127

ASARCO INC HAYDEN PLT

HAYDEN, AZ

81-110 (GLO-ACM)

09

ORDER AMENDING CONSENT DECREE, USA V. ASARCO INCORPORATED

Page 1 UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

UNITED STATES OF AMERICA,

Plaintiff,

vs.

ASARCO INCORPORATED,

Defendant.

Based upon the motion of defendant, ASARCO Incorporated, and the response thereto by plaintiff, United States of America, and good cause appearing,

IT IS ORDERED that the Consent Decree signed and filed on June 22, 1981, be amended as follows:

1. Paragraph 3, appearing at page 2, lines 15-23, is hereby stricken and a new paragraph 3 substituted to read:

"3. The sulfur dioxide (SO2) regulations applicable to emissions from ASARCO's Hayden Smelter are found at Arizona Compilation of Rules and Regulations (A.C.R.R.) R9-3-515A and R9-3-515C (as approved by EPA at 48 Fed. Reg. 1717, January 14, 1983)." ++EP++

Page 2

2. On page 14, line 7 of the Consent Decree, "40 C.F.R. 52.125(d)(5)" is hereby stricken and "A.C.R.R. R9-3-515C(4)" substituted.

The Consent Decree shall remain unchanged in all other respects.

DATED: October 17th, 1983.

/s/ SIGNATURE ILLEGIBLE

UNITED STATES DISTRICT JUDGE ++EP++

^Z

ASARCO INC

DOC 01 OF 01

CONSENT DECREE

09-81-C005

CAA

METAL

19810622

19810622

AZD008397127

ASARCO INC HAYDEN PLT

HAYDEN, AZ

81-110 (GLO-ACM)

09

CONSENT DECREE, US V. ASARCO INCORPORATED

Page 1

Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20530

A. BATES BUTLER, III

United States Attorney

District of Arizona

Post Office Box 1951

Tucson, Arizona 85702

(602) 792-6511

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

UNITED STATES OF AMERICA,

Plaintiff,

v.

ASARCO INCORPORATED,

Defendant.

WHEREAS plaintiff United States of America, on behalf of the United States Environmental Protection Agency ("EPA"), has filed the Complaint herein on April 13, 1981, alleging violations of the Clean Air Act, 42 U.S.C. Section 7401 et seq. ("Act"), and the Arizona State Implementation Plan ("SIP") adopted under the Act; and

WHEREAS defendant ASARCO Incorporated ("ASARCO") is a New Jersey corporation doing business in the State of Arizona; and

WHEREAS defendant ASARCO is a copper producer that owns and operates a copper smelter in Hayden, Arizona; and

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

WHEREAS EPA and ASARCO have moved the Court to enter this Decree; ++EP++

Page 2

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

1. This Court has jurisdiction of the subject matter herein and of the parties consenting hereto for the purpose of entering this Consent Decree pursuant to Section 113 of the Act, 42 U.S.C. Section 7413, and 28 U.S.C. Section 1345. The Complaint states a claim upon which relief can be granted against the Defendant.

2. The provisions of this Decree shall apply to and be binding upon the parties to this action and their successors and assigns. ASARCO agrees to notify in writing any successor in interest to property governed by this Decree prior to transfer of said property.

3. A. The sulfur dioxide (SO2) regulations applicable to emissions from ASARCO's Hayden Smelter are found at 40 C.F.R. 52.125(d) (1978), attached as Appendix I to this Decree.

B. EPA agrees to propose that the applicable SO2 emission limitation contained in 40 C.F.R. 52.125(d) be revised to 7825 pounds per hour, 6-hour rolling average.

C. The "applicable SO2 emission limitations" referred to in this Decree mean those emission limitations in Appendix I as revised pursuant to paragraph 3.B. above.

4. The particulate matter emission limitations currently applicable to emissions from ASARCO's Hayden Smelter is 40 C.F.R. 52.126(b), attached as Appendix II to this Decree. Section 52.126(b) of 40 C.F.R. shall be interpreted and applied such that separate particulate emission limitations shall be calculated for the roaster or drying process, the smelting process (smelting furnaces) and the converting process. Where the gases from more than one process are discharged from one stack, the allowable emission limit for the stack is the sum of the allowable emission limits for the processes vented to or discharged from that stack. ++EP++

Page 3

Particulate matter emissions from captured fugitive gases from any such process shall be measured and added to other process particulate matter emissions when determining whether a given process or stack is in compliance with 40 C.F.R. 52.126(b).

5. The currently applicable methods to determine compliance with the applicable SO2 emission limitations are the manual Test Methods 1 through 4, inclusive, and 8, found at Appendix A to 40 C.F.R. Part 60, and attached as part of Appendix III, and/or the continuous monitoring methods found at Appendices D and E of 40 C.F.R. Part 52, and attached as part of Appendix III to this Decree. The currently applicable methods to determine compliance with the particulate matter emission limitations are Test Methods 1 through 5, inclusive, found at Appendix A to 40 C.F.R. Part 60, and attached as part of Appendix III to this Decree.

6. Subject to the provisions of paragraph 15 hereof, ASARCO agrees not to seek further administrative review or judicial review, including judicial review under Section 307(b)(1) of the Act 42 U.S.C. Section 7607(b)(1) , of the applicable SO2 emission limitations 40 C.F.R. 52.125(d) , particulate limitations 40 C.F.R. 52.126(b) , or of the applicability or validity of the inspection procedures, monitoring procedures or test methods set forth in this Decree, but it reserves the right to seek judicial review or other appropriate review of the specific application of such procedures or methods to any particular fact situation.

7. ASARCO shall comply with the applicable SO2 and particulate emission limitations set forth in paragraphs 3 and 4 on or before April 1, 1984. ASARCO shall comply with all interim requirements contained in paragraph 8.K. on and after the applicable compliance dates specified in this Decree. ++EP++

Page 4

8. ASARCO shall take the following actions:

A. Oxygen Plant: ASARCO shall design, construct and install one or more oxygen plants capable of producing oxygen to operate one or more flash smelting furnaces. The first oxygen plant shall be capable of producing at least 450 tons of oxygen per day, unless ASARCO demonstrates to EPA the sufficiency of an oxygen plant of smaller capacity, and obtains EPA approval to build such smaller facility. The oxygen plant(s) shall be constructed in accordance with the following schedule:

(1) Let contracts for design and construction of the plant on or before September 1, 1981;

(2) Commence construction of the plant on or before May 1, 1982;

(3) Complete construction of the plant and commence production of oxygen for use in the flash furnaces on or before April 1, 1984;

(4) Complete the evaluation of the need and necessary production capacity for a second oxygen plant and communicate the decision to EPA by April 1, 1985; and

(5) Commence construction of the second oxygen plant (if any) on or before October 1, 1985

B. Roasters: ASARCO shall permanently shut down all roasters on or before April 1, 1984 subject to the provisions of paragraph 17. ++EP++

Page 5

C. Reverberatory Furnaces: ASARCO shall permanently shut down one reverberatory furnace (No. 2) on or before April 1, 1983, and ASARCO shall permanently shut down the remaining reverberatory furnace (No. 4) on or before April 1, 1984, subject to the provisions of paragraph 17.

D. Letter of Credit:

(1) ASARCO shall, within 30 days after the date of this Decree, deliver to the Assistant Attorney General, Land and Natural Resources Division, two irrevocable letters of credit in the form set forth in Appendix IV. Each irrevocable letter of credit shall be payable to the United States Treasury. Subject to paragraph 17, the first letter shall provide for immediate payment of $100,000 if ASARCO fails to permanently shut down reverberatory furnace No. 2 on or before April 1, 1983. Subject to paragraph 17, the second letter shall provide for immediate payment of $300,000 if ASARCO fails to permanently shut down all roasters and the remaining reverberatory furnace (No. 4) on or before April 1, 1984. If the date for shut down of any facility covered by either letter of credit is extended for any reason, ASARCO shall insure that the expiration date of the affected letter of credit is extended by the same number of days.

(2) Except for extensions of shut down dates made pursuant to Paragraph 17, EPA shall have no discretion to modify this Decree with respect to this provision or to compromise the surety maintained thereunder; ++EP++

Page 6

(3) ASARCO shall make an Assistant Secretary of the corporation available at its corporate headquarters during normal business hours to receive service of the notice specified in Appendix IV and to sign an acknowledgement of such service at the time it is made;

(4) Payment of money pursuant to the letter of credit shall not preclude the EPA from otherwise specifically enforcing the obligation to shut down the roasters and reverberatory furnaces.

E. Flash Furnaces: ASARCO shall install and operate one or more flash smelting furnaces ("flash furnaces") in accordance with the following schedule:

(1) Commence construction of the first furnace on or before April 1, 1983;

(2) Complete construction of the first furnace and begin commercial operation on or before April 1, 1984;

(3) Complete the evaluation of the need for a second flash furnace and communicate the decision to EPA by April 1, 1985;

(4) Commence construction of the second furnace (if any) on or before October 1, 1985;

(5) After April 1, 1984, the total concentrate feed rate to the smelting furnaces shall not exceed 2000 tons per day annual average in any calendar year;

(6) After April 1, 1984, all flash furnace and copper converter process gases shall be treated in sulfur removal facilities so that an amount of sulfur equal to or greater than that contained in the flash furnace process gas is treated in the double absorption sulfuric acid plant, or equivalent sulfur removal facilities, and the remainder treated in the single absorption sulfuric acid plant, or equivalent sulfur removal facilities, prior to discharge to the atmosphere. ++EP++

Page 7

ASARCO must demonstrate that the amount of sulfur being treated in the double absorption sulfuric acid plant (or equivalent sulfur removal facility) is equal to or greater than the amount of sulfur contained in the flash furnace process gas by means of a monthly sulfur balance as described in Appendix VII;

(7) All matte tapping and slag skimming stations, and all matte and slag launders at the flash furnaces shall be equipped to capture fugitive emissions generated by matte tapping and slag skimming. All captured fugitive gases from matte tapping and slag skimming stations at the flash furnaces shall be treated in an electrostatic precipitator (or equivalent facility approved by EPA) for particulate matter removal prior to discharge to the atmosphere; and

(8) Under the Clean Air Act, the flash furnaces are required to meet any applicable New Source Performance Standards 40 C.F.R. Part 60, Subparts A and P and any applicable requirements under New Source Review or Prevention of Significant Deterioration regulations 40 C.F.R. Part 52 .

F. Converters: On or before April 1, 1984, and at all times thereafter, all converter gases shall be ducted to sulfur removal facilities for removal of particulate matter and SO2 prior to discharge to the atmosphere. ++EP++

Page 8

G. Sulfur Removal Facilities:

(1) ASARCO shall install a double absorption sulfuric acid plant capable of treating at least 100,000 SCFM of gas (or other equivalent sulfur removal facilities approved by EPA) in accordance with the following schedule:

(a) Let contract for design and construction of the plant on or before September 1, 1981;

(b) Commence construction of the plant on or before May 1, 1982;

(c) Begin operation on or before April 1, 1984.

(2) On or before April 1, 1982, let contracts for the following modifications to the existing converter gas sulfuric acid plant:

(a) Replace existing mist precipitators with new mist precipitators;

(b) Increase the liquid flows over the two gas scrubbing towers to 6.4 GPM/ft2 (gallons per minute per square foot) and increase the liquid flows over the two gas cooling (washing) towers to 5.3 GPM/ft2.

(c) Install a weak acid stripper system. The sulfur dioxide containing gas stream generated by the weak acid stripper system shall be returned to the sulfuric acid plant for conversion to sulfuric acid.

(d) Upgrade the SO2 analyzer sampling system in accordance with (or equivalent to) Appendix VI;

(e) Add catalyst sufficient to fill the fourth converter bed. ++EP++

Page 9

(3) On or before August 1, 1982, commence any necessary construction for the items listed in paragraph 8, subparagraph (G) (2);

(4) On or before April 1, 1984, complete all necessary construction and installation for the items listed in paragraph 8, subparagraph (G) (2), and resume operation of the acid plant.

(5) The sulfur dioxide emissions from the single absorption sulfuric acid plant (or equivalent sulfur removal facility) shall not exceed 2600 ppmv (parts per million by volume) 6-hour average (discrete averaging shall be used). The sulfur dioxide emissions from the double absorption sulfuric acid plant (or equivalent sulfur removal facility) shall not exceed 650 ppmv (parts per million by volume) 6-hour average (discrete averaging shall be used).

H. Fugitive Gases:

(1) For the purposes of this Decree the following definitions shall apply:

(a) "Fugitive emissions" (or "fugitive gases") means any air pollutants emitted into the atmosphere from other than a flue;

(b) "Captured fugitive emissions" means any fugitive emissions which have been gathered into a flue, except that emissions which are captured by primary converter hoods and flash furnace offtake flues shall be considered process emissions and not captured fugitive emissions;

(c) A "flue" means any duct, pipe, stack, chimney or conduit.

(2) ASARCO shall continue operation of all existing fugitive gas capture systems (secondary converter hoods and matte tapping hoods) in a manner designed to maximize the capture of all fugitive gases; ++EP++

Page 10

(3) ASARCO shall duct all captured fugitive gases to the main smelter stack;

(4) On or before April 1, 1985, ASARCO shall submit to EPA a plan for capturing fugitive emissions, and for controlling process and fugitive emissions, if required, from the second flash furnace, if any. The plan shall address, but is not limited to,

(a) the quantity of emissions expected to be produced by the second furnace;

(b) restrictions on production, if any; and

(c) increased treatment of process streams, if required.

I. Secondary Converter Hood Gases: On or before April 1, 1984, and at all times thereafter, all captured secondary converter hood gases shall be treated in an electrostatic precipitator, or equivalent facility approved by EPA, for particulate removal prior to discharge to the atmosphere.

J. Operation and Maintenance: The following operation and maintenance procedures shall be instituted within six (6) months of the date of this Decree:

(1) Minimize unnecessary air infiltration (i.e., air infiltration that would prevent the treatment of all flash furnace and converter gases in the sulfuric acid plants) by preventing leakage into the flash furnaces, the flash furnace ducts, converter ducts and all air pollution control equipment and their associated ducts. This shall be accomplished by regular monthly (at a minimum) inspections and maintenance programs for all major pieces of process equipment (including reverberatory furnaces and converters), ducts and air pollution control equipment. ++EP++

Page 11

There shall also be daily walk-through inspections for the purpose of detecting infiltration problems primarily attributable to inattention by plant personnel. Repairs to points of air infiltration shall be undertaken within twenty-four (24) hours after detection and completed as quickly as possible, unless satisfactory justification is provided in the summary report described below. A monthly inspection summary report shall be prepared, retained and made available for examination by the EPA, or the Arizona Bureau of Air Quality Control (ABAQC); and

(2) Fugitive gas capture and control systems shall be inspected regularly at one month intervals (at a minimum) in order to ensure their proper operation and maintenance.

K. Interim Requirements: The following requirements shall apply until demonstration of compliance with paragraphs 7 and 8 hereof:

(1) For the purposes of this Decree the term "Supplementary Control System" (SCS) shall mean any technique for limiting the concentration of a pollutant in the ambient air by varying the emissions of that pollutant according to atmospheric conditions. The term does not include any dispersion technique based solely on the use of a stack the height of which exceeds good engineering practice as determined under regulations implementing Section 123 of the Act ; ++EP++

Page 12

(2) ASARCO shall continue to operate its SCS, in conjunction with the ASARCO/Kennecott Joint Control Center, as required by:

a. Curtailment Agreement, dated September 12, 1975, attached as Appendix IX;

b. ASARCO/Kennecott Joint Control Center Operations Manual as amended through May 1978 (originally dated September 1, 1975), the introduction of which is attached as Appendix X; and

c. ASARCO/Kennecott Agreement dated February 28, 1974, attached as Appendix XI.

(3) ASARCO shall operate its SCS so as to assure that if the NAAQS for SO2 in ASARCO's national ambient air quality control region (AQCR) is exceeded, ASARCO's percentage contribution to the total SO2 emissions in its AQCR coming from ASARCO and the adjoining Kennecott smelter, when multiplied by the measured ambient concentration for the relevant time period, does not exceed the NAAQS for SO2 for that time period. That is, ASARCO must operate its SCS so that:

ASARCO's SO2 stack emissions / ASARCO's plus Kennecott's SO2 stack emissions X measured ambient SO2 concentrations NAAQS for SO2

Notwithstanding the previous two sentences, ASARCO shall not be charged with an exceedance if ASARCO can prove that such exceedance was primarily caused by another source or sources. Elements of such proof could include wind direction or low level emissions from another source or sources. For purposes of this measurement only, the SO2 emissions shall be determined by summing the emission rates from the RR flue, the converter flue and the secondary converter hood flue. ++EP++

Page 13

Each of these emission rates shall be based on continuous emission monitoring results. For annual and 24-hour ambient exceedances the emission rates used to calculate the above ratio shall be calculated for the same time period as the exceedance. For 3-hour ambient exceedances the emission rates used to calculate the above ratio shall be the 6-hour emission rates ending at the same time as the end of the 3-hour violation.

(4) Existing control equipment shall be operated at maximum feasible efficiency. To ensure that this is accomplished for SO2 removal, the smelter shall achieve at least 40 percent overall sulfur removal during calendar years 1981 and 1982, and at least 45 percent removal during calendar years 1983 and 1984. This percentage is to be based on sulfur balance reports routinely submitted by ASARCO to ABAQC. Calculations shall be performed using 1979 calculation procedures; and

(5) Until final compliance has been demonstrated, the ASARCO Hayden Smelter shall not process more than 125,000 tons of input sulfur in any calendar year based on sulfur balance reports routinely submitted by ASARCO to the ABAQC. Calculations shall be performed using 1979 calculation procedures. The ASARCO Hayden Smelter shall not be subject to this limitation prior to March 1, 1981. ++EP++

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L. Monitoring Requirements:

(1) ASARCO shall install, operate and maintain continuous in-stack sulfur dioxide monitors and continuous in-stack volumetric flow rate monitors in all ducts which discharge gases into the 1000 foot stack by April 1, 1983, as required by 40 C.F.R. 52.125(d)(5). Any other stack or flue which could emit 5 percent or more of the total potential (without emission controls) hourly sulfur dioxide emissions from the Hayden Smelter shall also be equipped with such monitors by April 1, 1983: The performance tests for all of these monitors shall be completed by October 1, 1983;

(2) ASARCO shall install, operate and maintain a continuous in-stack SO2 monitor (in accordance with Appendix D to 40 C.F.R. Part 52) at the outlet of the existing converter gas sulfuric acid plant by April 1, 1983. For the purpose of determining whether a monitor is meeting the performance specifications, the "emission standard" referred to in Appendix D shall be 2600 ppmv (parts per million by volume) SO2. The span (full scale instrument reading) shall be set at 4000 ppmv; (3) ASARCO shall install and continuously operate and maintain continuous monitoring devices in any ducts or flues used to bypass gases around the smelter's SO2 constant control system(s) by April 1, 1983. Such monitoring shall be adequate to disclose the time of the bypass, its duration, and the approximate volume of gas bypassed; and ++EP++

Page 15

(4) Until such time as ASARCO completes its installation and begins operation of the monitoring devices required by subparagraphs 8.L.(1) through (3) above, ASARCO shall continue to operate its existing SO2 monitors on the RR flue, converter flue, and secondary converter hood flue.

(5) ASARCO will retain all emissions monitoring data collected as required by subparagraphs 8.L.(1) through (4) above until three years after demonstration of final compliance. Subject to the provisions of subparagraphs 18.D and E. below, this data will be submitted to EPA upon request.

(6) ASARCO shall maintain stack sampling facilities in all ducts which discharge gases into the 1000 foot stack. ASARCO has agreed not to challenge the validity or accuracy of any manual sampling data collected at the existing roaster/reverberatory furnace (RR) flue sampling site because of:

(a) the shape of the flue;

(b) the upstream or downstream distance to any flow disturbance;

(c) the location of the sampling ports;

(d) the location of traverse points (assuming that the flue is divided into approximately equal sampling areas and a point near the centroid of each area is sampled);

(e) the presence of dust on the floor, roof, or sides of the RR flue; or

(f) possible sample stratification due to gravitational effects, or flow disturbances or irregularities. ++EP++

Page 16

No later than April 1, 1984, ASARCO shall remove all dust (to the maximum extent feasible) from the floor of the RR flue between the existing RR electrostatic precipitator and the 1000 foot stack. EPA, in turn, has agreed not to challenge the validity of the existing RR flue sampling site.

M. Electrical Power: The schedule contained in this paragraph is predicated upon the ability of ASARCO to obtain the required electrical power. ASARCO agrees to initiate and thereafter continue with diligence negotiations aimed at obtaining the required power. In accordance with paragraph 17, ASARCO shall be entitled to apply for appropriate relief from the schedule in this paragraph in the event that it cannot obtain such power through no fault of its own.

9. ASARCO shall execute and file the Agreement for Voluntary Dismissal, attached as Appendix V to this Decree, in connection with ASARCO's petition filed with and pending before the U.S. Court of Appeals for the Ninth Circuit: Petition for Review, ASARCO, Inc. v. United States Environmental Protection Agency, No. 78-1500 (filed on March 7, 1978).

10. ASARCO shall withdraw in writing its petitions filed with and pending before the U.S. Environmental Protection Agency, Region IX as follows: (a) Petition for Reconsideration and Repeal or Amendment of the Final Rule in 40 C.F.R. Part 52, 43 F.R. 755, 761 (filed on February 2, 1978); and (b) Letter from Newman R. Porter, counsel for ASARCO, to Douglas M. Costle, Administrator of the Environmental Protection Agency, dated July 19, 1979 concerning EPA's replacement regulation for control of particulate matter from process industries 40 C.F.R. 52.,126(b) ++EP++

Page 17

11. ASARCO acknowledges that it has been notified that the Hayden Smelter may be subject to penalties under Section 120 of the Clean Air Act, 42 U.S.C. Section 7420, but reserves the right to contest the notice, the assessment and attempted collection of noncompliance penalties under that section, or seek exemption from said noncompliance penalties.

12. Stipulated Penalties. Unless excused by the provisions of paragraph 17 the following stipulated penalty provisions may be enforced by the EPA:

A. Construction Schedules:

(1) If ASARCO does not complete the construction or installation of any required equipment or fails to complete the implementation of any change in operating practice by the scheduled date in this Decree, ASARCO shall pay a stipulated penalty of $7,500 for each day ASARCO operates the associated smelter after such scheduled date without the required equipment or without the implementation of such change in operating practices.

(2) If ASARCO fails to meet an interim date in a schedule for the construction or installation of a particular piece of equipment required by this Decree, ASARCO shall be liable for a stipulated penalty of $5,000 for each violation for each day such violation continues. Any penalty liability under this subparagraph will be forgiven if ASARCO meets the final compliance date in the applicable schedule for the construction or installation of such equipment, or if ASARCO does not operate such smelter without the required equipment after the scheduled completion date. ++EP++

Page 18

B. Interim Requirements:

(1) ASARCO shall be subject to stipulated penalties for any exceedance of the NAAQS for SO2 as defined in subparagraph 8.K. Not withstanding the previous sentence, the following conditions shall apply:

a) 3-hour exceedances: ASARCO shall not be liable for payment of any penalty if its 6-hour average sulfur dioxide emission rate was less than 7825 lbs/hr for the 6-hour period ending at the same time as the end of the 3-hour ambient exceedance.

(b) 24-hour exceedances: ASARCO shall not be liable for payment of any penalty if its 24-hour average sulfur dioxide emission rate was less than 7825 lbs/hr for the same 24-hour period as the 24-hour ambient exceedance.

(2) Penalties under this subparagraph are to be assessed in accordance with the following schedule:

During Year Penalty per Exceedance 1981 $5,000.00 1982 $5,000.00 1983 $10,000.00 1984 $10,000.00

C. Final Standards and Requirements:

(1) ASARCO's failure to comply with any operating or maintenance requirements under paragraph 8, subparagraph (J) shall subject ASARCO to a stipulated penalty of $500 for each violation for each day such violation continues; ++EP++

Page 19

(2) After April 1, 1984, any failure to comply with the final applicable emission limitations shall subject ASARCO to a stipulated penalty of $10,000 for each violation for each day such violation continues. ASARCO may submit additional information in accordance with the provisions of Appendix VIII for any period of time during which the final applicable emission limitations are exceeded. EPA will consider this information when making its decision about whether or not to petition the Court to collect the stipulated penalty from ASARCO.

D. Reports: Any failure to file reports by required dates set forth in this Decree shall subject ASARCO to a stipulated penalty as set forth below for each violation for each day such violation continues:

Days After Required Date Penalty 1-5 $100/day 6-20 $500/day 21-30 $750/day 31 or more $1000/day

E. Termination:

(1) Defendant's obligation to pay stipulated penalties under subparagraph (B) shall terminate upon initial demonstration by Defendant of compliance by the Hayden Smelter with the applicable emission limitations.

(2) Demonstration of compliance shall be made according to the procedures set forth in Appendix III to this Decree. ++EP++

Page 20

F. Penalties Not Exclusive: Plaintiff reserves the right to enforce the provisions of this Decree through any means available at law or equity; provided, however, that where this Decree provides for stipulated civil penalties for violations of specific provisions, plaintiff shall not seek any additional civil monetary penalties for such violations. EPA may still collect penalties under Section 120 of the Act for violations of the applicable emission limitations (in which case such penalty shall be reduced by the amount of the stipulated penalty paid for the same violation).

G. Payment Procedure: Stipulated penalties under this paragraph shall be paid by check payable to the Treasurer of the United States and addressed to the Assistant Attorney General, Land and Natural Resources Division, with 30 days after EPA has made a written demand of ASARCO for payment of the penalty.

13. EPA reserves the right to impose more stringent emission limitations on ASARCO's smelter under any revised Arizona Implementation Plan if EPA finds that such limits are necessary to attain and maintain the National Ambient Air Quality Standards (NAAQS).

14. EPA has not waived its rights to seek enforcement of any sections of the Arizona State Implementation Plan as currently constituted or as it may be revised, other than those specifically covered by this Decree.

15. EPA is presently evaluating a revision submitted by the State of Arizona to its implementation plan which contains sulfur dioxide emission limitations for the ASARCO Hayden Smelter and other Arizona copper smelters. The revision's limitations are different in nature and concept from those referred to in paragraph 3 of this Decree. Nothing in this Decree shall preclude: ++EP++

Page 21

A. EPA's fair and rational evaluation of said revision to the Arizona plan as it applies to ASARCO's Hayden Smelter;

B. ASARCO's application to this Court for a modification of the emission limitation in paragraph 3 hereof if said revision or any other sulfur dioxide emission limitation which is different from those referred to in paragraph 3 is eventually approved by EPA;

C. ASARCO's right to seek review, including judicial review, of any action taken by EPA in connection with said revision, provided that such review does not include a stay of any actions required by this Decree. ASARCO agrees not to seek any such stay.

16. For the purpose of determining ambient SO2 concentrations, ASARCO shall operate monitors at points of expected maximum concentration of SO2 emissions, as determined by EPA from dispersion modeling. The monitors currently contained in the SCS network plus any additional monitors required by EPA or the ABAQC shall be operated during the period of this decree and for the three year period following demonstration of final compliance with this decree. No more than eight monitors shall be used by EPA for the purpose of assessing penalties under paragraph 12.B. of this Decree. All ambient air quality monitoring shall be conducted in accordance with the provisions of 40 C.F.R. Parts 50 and 58. For the purposes of this Decree, violations of NAAQS for SO2 shall be determined in accordance with applicable EPA guidelines, which currently are as follows:

A. Annual Average: An annual arithmetic average concentration greater than 80 micrograms per cubic meter (0.03 ppm) at any monitor shall constitute a violation. Annual averages shall be calculated on a calendar year basis. ++EP++

Page 22

B. 24-Hour Average: At each continuous SO2 monitor, a 24-hour average concentration shall be calculated at the beginning of each clock hour for the previous 24-hour period. Any 24-hour average concentration greater than 365 micrograms per cubic meter (0.14 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any monitor. It is the network of all ambient air quality monitors for SO2 in the vicinity of a smelter that is allowed only one 24-hour average concentration in excess of the NAAQS per calendar year, not one concentration in excess of the NAAQS per calendar year at each monitor. At any given monitor, separate violations or exceedances of the NAAQS shall not contain overlapping hourly readings.

C. 3-Hour Average: At each continuous SO2 monitor, a 3-hour average concentration is to be calculated at the beginning of each clock hour for the previous 3-hour period. Any 3-hour average concentration greater than 1300 micrograms per cubic meter (0.5 ppm) at any monitor shall constitute a violation, except the first such concentration in any calendar year at any monitor. It is the network of all ambient air quality monitors for SO2 in the vicinity of a smelter that is allowed only one 3-hour average concentration in excess of the NAAQS per calendar year, not one concentration in excess of the NAAQS per calendar year at each monitor. At any given monitor, separate violations or exceedances of the NAAQS shall not contain overlapping hourly readings. ++EP++

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17. A. Notification of Delay: If any event occurs which causes or may cause delays in the achievement of compliance at ASARCO's Hayden Smelter as provided in this Decree, ASARCO shall notify the Plaintiff, in writing within 20 days of the delay or anticipated delay, as appropriate, describing in detail the anticipated length of the delay, the precise cause or causes of the delay, the measures taken and to be taken by ASARCO to prevent or minimize the delay, and the timetable by which those measures will be implemented. ASARCO shall adopt all reasonable measures to avoid or minimize any such delay. Failure by ASARCO to comply with the requirements of this paragraph (17), specifically, shall render the provisions of subparagraph B of this paragraph inapplicable and of no effect as to the particular incident involved.

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

C. Burden of Proof: The burden of proving that any delay is caused by circumstances beyond the control of ASARCO shall rest with ASARCO. Increased costs or expenses associated with the implementation of actions called for by this Decree shall not, in any event, be a basis for changes in this Decree or extensions of time under this paragraph. ++EP++

Page 24

Delay in achievement of one interim step shall not necessarily justify or excuse delay in achievement of subsequent steps.

18. ASARCO shall comply with the following requirements in submitting reports:

A. Reports: ASARCO shall submit, no later than thirty (30) days after the end of each quarter, commencing with the April to June quarter of 1981, a progress report for the smelter subject to this Decree. These reports shall contain updated charts showing actual progress plotted against scheduled progress toward each milestone and, if requested by EPA, copies of contracts and correspondence with vendors, unless disclosure of such information is expressly prohibited by contract between ASARCO and its vendor.

B. Performance Tests: ASARCO shall provide EPA thirty (30) days notice prior to conducting any performance tests required by or provided for under this Decree, in order to afford EPA an opportunity to (1) evaluate and approve the test procedure, (2) determine whether it meets the requirements of this Decree and any other applicable legal requirements, and (3) have observers present at such tests. Said procedure shall conform with the provision of Appendix III of this Decree. A written report of the results of each performance test shall be submitted to EPA promptly, but no later than sixty (60) days after completion of each such test. ++EP++

Page 25

C. Sulfur Input Data: Until final compliance is demonstrated, ASARCO will submit its monthly sulfur balance reports used to measure compliance with subparagraphs 8.K.(4) and 8.K.(5) within 20 days of the end of each month.

D. Emissions and SCS Data: Until final compliance is demonstrated, whenever the secondary or primary NAAQS, for SO2 is exceeded in ASARCO's national ambient AQCR, ASARCO will notify EPA of the exceedance within 10 days and will provide EPA within 20 days copies of all emissions monitoring data required by subparagraphs 8.L.(1) through (4) and all ambient monitoring data required by paragraph 16 pertaining to the period of the exceedance. ASARCO shall, within 20 days after such exceedance, inform EPA of what directives, if any, had been issued by the Joint Control Center under the agreements referred to in subparagraph 8.K.(2) relative to the time period of the ambient exceedance, and what action, if any, were taken by ASARCO pursuant to those directives.

E. Emissions Data After Compliance: From the date of the demonstration of final compliance until three years thereafter, ASARCO shall provide EPA copies of all emissions data required by subparagraph 8.L. whenever the data indicate a violation of the applicable emission limitation. This data shall be provided within 20 days of such violation. ++EP++

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F. All reports, notices, control plans and other information that must be submitted in satisfaction of a requirement of this Decree shall be submitted to:

(1) As to the EPA:

U.S. Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

Attention: Director, Enforcement Division

(2) As to the State of Arizona:

Director

Bureau of Air Quality Control

Arizona Department of Health Services

1740 West Adams Street

Phoenix, Arizona 85007

19. ASARCO shall have the right to achieve compliance with any obligation in this Decree at any time by ceasing to operate any pollution emitting facility governed by said obligation.

20. Termination of Decree: Except for paragraph 16, subparagraph 8.L.(5), and subparagraph 18.E., all provisions of this Decree shall terminate six (6) months after the date on which ASARCO has demonstrated final compliance by the Hayden Smelter in accordance with the terms and conditions of this Decree. Paragraph 16, subparagraph 8.L.(5), and subparagraph 18(E) shall remain in effect as the Decree for a period of three years after demonstration of final compliance.

21. This Decree shall be in full settlement and satisfaction only of the action filed herein. The provisions of this Decree do not constitute a permit of any kind under state or Federal law and in no way alter, limit or revoke local, state, or Federal laws or regulations, or affect the authority of the United States to seek immediate relief pursuant to Section 303 of the Clean Air Act, 42 U.S.C. Section 7603, or Section 504 of the Clean Water Act, 33 U.S.C. Section 1364. ++EP++

Page 27

UNITED STATES OF AMERICA, Plaintiff

vs.

ASARCO INCORPORATED, Defendant

CONSENT DECREE, CIV 81-110, GLO-RMB

Approved and judgement entered in accordance with the foregoing Consent Decree in CIV No. 81-110, this 22d day of June, 1981.

/s/ SIGNATURE ILLEGIBLE

UNITED STATES DISTRICT JUDGE ++EP++

Page 28 UNITED STATES OF AMERICA, Plaintiff

vs.

ASARCO INCORPORATED, Defendant

CONSENT DECREE, CIV 81-110, GLO-RMB

CONSENTED TO:

UNITED STATES OF AMERICA

By/s/Anthony C Liotta

ANTHONY C. LIOTTA

Deputy Assistant Attorney General

Land and Natural Resources Division

U.S. Department of Justice

Washington, D.C. 20536

By/s/ SIGNATURE ILLEGIBLE

A. BATES BUTLER, III

United States Attorney

District of Arizona

Post Office Box 1951

Tucson, Arizona 85702

CONSENTED TO:

ASARCO Incorporated

Defendant

By/s/ SIGNATURE ILLEGIBLE

EVANS, KITCHEL & JENCKES, P.C.

NEWMAN R. PORTER

363 North First Avenue

Phoenix, Arizona 85003

Attorney for Defendant, ASARCO Incorporated

CONCUR:

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

By/s/ Matthew S Walker

MATTHEW S. WALKER

Senior Attorney, Enforcement Division, Region IX

215 Fremont Street

San Francisco, CA 94105 ++EP++

^Z

GUAM POWER AUTHORITY

DOC 03 OF 04

FURTHER AMENDED INTERIM CONSENT ORDER

09-76-C001

CAA

ELECT

19760121

19790815

GUD000850867

GUAM POWER AUTH CABRAS PLT

PITI, GU

75-064 & 066

09

FURTHER AMENDED INTERIM CONSENT ORDER, USA AND GUAM POWER AUTHORITY V. DOUGLAS COSTLE, ADMINISTRATOR EPA AND GUAM POWER AUTHORITY

Page 1 IN THE DISTRICT COURT OF GUAM

GUAM POWER AUTHORITY,

Plaintiff,

v.

DOUGLAS COSTLE, ADMINISTRATOR

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Defendant.

UNITED STATES OF AMERICA,

Plaintiff,

v.

GUAM POWER AUTHORITY,

Defendant.

Upon consideration of the motion of the Guam Power Authority ("GPA") and the concurrence therein by the United States Environmental Protection Agency ("EPA"), it is hereby ORDERED:

1. That the Amended Interim Consent Order is amended as set forth herein;

2. That this Court shall retain jurisdiction over this matter until such time as Guam Power Authority has complied with applicable New Source Performance Standards ("NSPS"), 40 C.F.R. Part 60, promulgated under Section 111 of the Clean Air Act, 42 U.S.C. Section 7411, as such may be amended from time to time, with respect to the operation of Units 1 and 2 of the Cabras Steam Power Plant at Piti, Guam; ++EP++

Page 2

3. That GPA shall proceed on a program of biological and environmental research on the marine ecosystem at Piti, such research to be directed toward an ultimate determination of the environmental feasibility of installing the Flakt Hydro Flue Gas Desulfurization System ("seawater scrubber") on Cabras Units 1 and 2 as a means of continuous emission control complying with NSPS requirements.

4. That the detailed scope of work document ("the Plan") for completion of the research program set out in Paragraph 3, which GPA submitted on July 2, 1979 to the Director, Enforcement Division, Region IX, EPA ("Director"), for approval, shall be submitted to the Court within 30 days of the Director's approval or within 30 days of the date of entry of this Order, whichever is later, and shall become a part of this Amended Interim Consent Order; if the Director does not approve the Plan, he shall specify the provisions that are not approved and his reasons therefor, in which event the Plan and the Director's objections thereto shall be submitted to the Court for resolution.

5. That by the following dates GPA shall have completed the following designated increments of progress and shall have filed the designated status reports:

November 30, 1979 - Quarterly Report summarizing progress to October 31, 1979 February 29, 1980 - Quarterly Report summarizing progress to January 31, 1980 April 30, 1980 - Completion of: Ecological Survey Pilot Plant Dispersion Analysis Biossay Schedule May 31, 1980 - Phase II Report summarizing progress to April 30, 1980 August 31, 1980 - Quarterly Report summarizing progress to July 31, 1980 ++EP++ Page 3 November 30, 1980 - Quarterly Report summarizing progress to October 31, 1980 February 28, 1981 - Quarterly Report summarizing progress to January 31, 1981 April 30, 1981 - Completion of: Data Evaluation General Guidelines August 31, 1981 - Quarter Report summarizing progress to July 31, 1981 October 31, 1981 - Final Report

except that if issuance of this Order by the Court shall be delayed beyond August 1, 1979, the foregoing dates shall be delayed by a corresponding amount of time; provided, however, that if at any time GPA shall decide not to complete the research program, then GPA shall so notify Region IX and the marine studies shall be deemed to have shown that the seawater scrubber will not meet applicable clean water requirements, and the provisions of paragraph 6(b) shall be immediately applicable.

6. That by October 31, 1981, or by the date for submission of the Final Report under Paragraph 5, whichever is later, GPA shall advise the court and EPA Region IX:

(a) that it has entered into a firm undertaking for the installation of a seawater scrubber, such installation to commence within three months and to be completed within three months and to be completed within two and one-half years of such notice; or

(b) if the marine studies shall have demonstrated that the seawater scrubber will not meet applicable clean water requirements, that GPA has entered into a firm undertaking for the installation or utilization of some alternate means of continuous emission reduction, such alternate means to be fully operational within two years from the date of such notice, except that if such alternate means shall be the continuous burning of low sulfur fuel oil, such means shall be fully operational within six months from the date of such notice. ++EP++

Page 4

7. That if GPA notifies the Court and EPA Region IX that it will install the seawater scrubber or alternate means of continuous emission reduction pursuant to Paragraph 6(a) or (b), at that time it will also submit a compliance schedule to the Court and EPA Region IX with increments of progress toward final compliance (as specified in 40 C.F.R. Section 51.1(q)), said compliance schedule, subject to approval by the Director, to become part of this Amended Interim Consent Order. If the parties cannot agree on a compliance schedule, the matter shall be submitted to the Court for resolution. GPA shall certify to the Court and Director, no later than fifteen (15) days after each increment of progress specified by such compliance schedule whether compliance has or has not been achieved and, if not, the reasons therefor.

8. That within 30 days of completion of construction as required by this Consent Order, GPA shall achieve full compliance with 40 C.F.R. Sub-Section 60.42, 60.43 and 60.44. GPA shall submit performance test results to the Director to demonstrate such compliance. The performance tests shall be conducted in accordance with 40 C.F.R. Sub-Section 60.8 and 60.46.

9. That pending such time as a continuous means of emission reduction shall be fully operational at the Cabras facility, GPA will continue to provide that facility with a low sulfur fuel system to be used on a limited basis during adverse climatic conditions and emergency air quality conditions as determined by the Administrator of the Guam Environmental Protection Agency.

10. That this Order unless sooner amended shall become null and void at such time as GPA shall by any means come into full compliance with applicable New Source Performance Standards. ++EP++

Page 5

AGREED TO:

On behalf of Guam Power Authority:

/s/ Richard J. Poulson

Richard J. Poulson

HOGAN & HARTSON

815 Connecticut Ave., NW

Washington, D.C. 20006

Date 8-14-79

SIGNATURE ILLEGIBLE

Board Counsel

Agana, Guam 96910

Date 8-14-78

On behalf of the United States of America

and the Environmental Protection Agency:

/s/ SIGNATURE ILLEGIBLE

United States Attorney

Date 8-14-79

/s/ Matthew S. Walker

Matthew S. Walker

Senior Attorney

Environmental Protection Agency

Region IX

San Francisco, California 94105

/s/ SIGNATURE ILLEGIBLE

United States District Judge

Date 8/15/79

CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing "Submission of the Guam Power Authority Pursuant to the Amended Interim Consent Order," "Motion to Amend the Amended Interim Consent Order," and "Further Amended Interim Consent Order" have been mailed, postage prepaid, this 15th day of August, 1979, to the following:

Matthew S. Walker

Senior Attorney/Hearing Officer

Environmental Protection Agency

Region IX

215 Fremont Street

San Francisco, California 94105

David T. Wood

United States Attorney

Post Office Box Z

Agana, Guam 96910

/s/ SIGNATURE ILLEGIBLE ++EP++

GUAM POWER AUTHORITY

DOC 02 OF 04

AMENDED INTERIM CONSENT ORDER

09-76-C001

CAA

ELECT

19760121

19760823

GUD000850867

GUAM POWER AUTH CABRAS PLT

PITI, GU

75-064 & 066

09

AMENDED INTERIM CONSENT ORDER, USA AND GUAM POWER AUTHORITY V RUSSELL E. TRAIN OF EPA AND GUAM POWER AUTHORITY

Page 1 FOR THE DISTRICT COURT OF GUAM

GUAM POWER AUTHORITY,

Plaintiff,

v.

RUSSELL E. TRAIN, ADMINISTRATOR

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Defendants.

UNITED STATES OF AMERICA,

Plaintiff,

v.

GUAM POWER AUTHORITY,

Defendant.

Upon consideration of the representations and written submissions of the Guam Power Authority (hereinafter "GPA or the "Authority") and the United States Environmental Protection Agency (hereinafter "EPA") made pursuant to this Court's Interim Consent Order of January 21, 1976 (hereinafter the "Interim Consent Order"), and in consideration of the special circumstances of these actions resulting from the destruction on Guam caused by Typhoon Pamela (May, 1976), it is hereby ORDERED:

1) That the Interim Consent Order is hereby amended as set forth herein;

2) That this Court shall retain jurisdiction over this matter until such time as Guam Power Authority shall have complied with the applicable Standards of Performance for New Stationary Sources, 40 C.F.R. Part 60, promulgated under section 111 of the Clean Air Act, 42 U.S.C. Section 1857c-6, as such may be amended from time to time, (hereinafter the "New Source Performance Standards"), with respect to the operation of Units 1 and 2 of the Cabras Steam Power Plant at Piti, Guam (hereinafter the "Cabras facility"); ++EP++

Page 2

3) That in the period before compliance with the New Source Performance Standards is achieved GPA will undertake the following actions:

a) GPA will continue implementation of the management improvement program detailed in its submissions to this Court, and will continue to study the operations of other utility companies to determine how the cost of producing power can be reduced. It will continue to retain a major accounting firm to provide accounting and other management services. The Authority will hire a new comptroller, who will be directly responsible to the Board of Directors and who will be granted full authority with regard to supervision of financial matters. The new comptroller will have primary responsibility for ensuring that the Authority reaches a level of financial viability which will permit it to comply with the New Source Performance Standards in the manner contemplated by this Order. GPA will immediately advise the Court upon the selection of its new comptroller, and will provide a copy of his resume and a description of his relevant experience.

b) GPA will continue to work with its investment counsel to attempt to place a $40,000,000 bond issue which is to be used for the discharge of existing short-term indebtedness. It will also seek approval of the legislation pending in the Congress which will provide a guarantee by the United States Government of those bonds. GPA will continue to attempt to obtain the appropriation from the Guam legislature referred to in its April 23 submission to this Court pursuant to the Interim Court Order. ++EP++

Page 3

GPA will attempt further renegotiation, at the highest U.S. Government level, of the power pool agreement with the U.S. Navy.

c) GPA will continue to monitor international oil market conditions to determine the optimum time for solicitation of bids for low sulfur fuel. As a minimum, GPA will solicit bids for low sulfur fuel every six months. The EPA will have the right to review and comment on each such solicitation prior to its issuance by the Authority. The Authority will also continually review its bidders mailing list and will attempt to find new sources for low sulfur fuel from which bids have not previously been solicited. It will, after the effective date of this Order and prior to the first submission to this Court pursuant to paragraph 3(e) hereof, resolicit bids for low sulfur fuel, deleting from the invitation the "price option" clause included in paragraph 3 of IFB GPA 27-76.

d) Through its technical consultants, GPA will continue to investigate methods other than the use of low sulfur fuel for bringing the Cabras facility into compliance. All of the scrubber manufacturers who have been contacted by GPA will be contacted again in twelve months, to ensure that GPA has current cost data on the purchase and operation of these systems. The Authority's technical consultant will be retained to continue exploration of alternative means of compliance. ++EP++

Page 4

e) GPA will file with the Court detailed financial statements each six months beginning with the six month period ending October 31, 1976. Such statements shall be filed not later than forty-five days after the close of each such six month period. The Authority will also keep the Court and the EPA advised of any significant changes in its financial situation. In its first submission to the Court pursuant to this paragraph 3(e), the Authority will suggest to the Court and the EPA appropriate factors to be considered in evaluating whether GPA has reached a financial position which would allow it either to purchase low sulfur fuel or install an appropriate flue gas desulfurization system.

f) GPA will provide the Cabras facility with an alternate low sulfur fuel system to be used on a limited basis during adverse climatic conditions and emergency air quality conditions as determined by the Administrator of the Guam Environmental Protection Agency. Such system shall be fully operational within 4 months from the date this order is entered.

4) Not later than three years after the date of this Order, GPA shall submit to this Court a detailed description of the method by which it will comply with the New Source Performance Standards. Such description shall be provided to this Court in the following manner:

a) If GPA shall have determined that it will install a flue gas desulfurization system, or that it will comply with the New Source Performance Standards using any other method other than burning low sulfur fuel, GPA shall advise this Court that it has made a firm undertaking to have such a system installed and fully operational not later than July 31, 1981. ++EP++

Page 5

The description of the method to be employed by GPA shall include a detailed schedule for the design and construction of the necessary facilities. GPA shall provide to this Court and to EPA copies of all documents relating to GPA's undertaking and to such design and construction.

b) If GPA shall have determined that it will comply with the New Source Performance Standards by burning low sulfur fuel, GPA shall advise this Court that it has entered into a contract for the purchase of low sulfur fuel for a term of five years (or such other period of time as may be reasonably approved by EPA), and that GPA will begin operation of the Cabras facility using such low sulfur fuel not later than six months thereafter.

5) If at any time prior to a date three years from the date of this Order, this Court shall determine, based on submissions by GPA and EPA or any other information available to it, that it has become financially possible for GPA to comply with the New Source Performance Standards, either by burning low sulfur fuel or through installation of a flue gas desulfurization facility, this Court shall order that GPA take all necessary and appropriate actions to achieve such compliance in accordance with a schedule to be established by this Court, and GPA shall be required to make a firm undertaking to comply with such schedule.

6) The parties to this action, by their signatures below, indicate their agreement to the terms of this amendment of the Interim Consent Order. ++EP++

Page 6

/s/ SIGNATURE ILLEGIBLE

United States District Judge

Date 8/23/76

AGREED TO:

On behalf of Guam Power Authority:

/s/ Richard J. M. Poulson

Richard J. M. Poulson

HOGAN & HARTSON

815 Connecticut Ave., N.W.

Washington, D.C. 20006

Date 7/27/76

/s/ Fred E. Bordallo

Fred E. Bordallo

Board Counsel

BORDALLO & LUJAN

Second Floor, J&R Bldg.

P.O. Box 1933

Agana, Guam 96910

Date 8-12-76

On behalf of the United States of America and the Environmental Protection Agency:

/s/ Ralph F. Bagley, Jr.

Ralph F. Bagley, Jr.

United States Attorney

Date 8-10-76

/s/ Michael P. Carlton

Michael P. Carlton

Attorney

Department of Justice

Washington, D.C. 20530

/s/ SIGNATURE ILLEGIBLE

Environmental Protection Agency

Date 2 Aug 76 ++EP++

^Z

GUAM POWER AUTHORITY

DOC 01 OF 04

INTERIM CONSENT ORDER

09-76-C001

CAA

ELECT

19760121

19760121

GUD000850867

GUAM POWER AUTH CABRAS PLT

PITI, GU

75-064&066

09

INTERIM CONSENT ORDER, US V. GUAM POWER AUTHORITY AND GUAM POWER AUTHORITY V. RUSSELL E. TRAIN, EPA.

Page 1 IN THE DISTRICT COURT OF GUAM

GUAM POWER AUTHORITY,

Plaintiff,

v.

RUSSELL E. TRAIN, ADMINISTRATOR

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Defendant.

UNITED STATES OF AMERICA,

Plaintiff,

v.

GUAM POWER AUTHORITY,

Defendant.

WHEREAS, the United States of America and Guam Power Authority are parties to litigation in this Court in C.A. #75-066 and C.A. #75-064;

WHEREAS, the Guam Power Authority is presently in violation of the applicable Standards of Performance for New Stationary Sources (hereinafter New Source Performance Standards) in respect to the operations of Unit 1 of the Cabras Steam Power Plant at Piti, Guam;

WHEREAS, on January 21, 1976, said parties appeared before this Court through counsel, and upon consideration of agreements reached between said parties, as signified by their respective signatures below, and with the Court having been fully advised in the premises;

It is hereby ORDERED that:

1. Guam Power Authority shall achieve immediate and full compliance with the New Source Performance Standards, 40 C.F.R. Part 60, promulgated under Section 111 of the Clean Air Act, 42 U.S.C. Section 1857c-6, at the Cabras Steam Power Plant. ++EP++

Page 2

2. The time and manner for achieving compliance with the New Source Performance Standards shall be determined by this Court based upon appropriate submissions of the parties, as more fully detailed in paragraphs 3 and 4 below.

3. Guam Power Authority shall submit to the Court the following information within the time periods provided:

a) its proposal for bringing the Cabras Steam Power Plant (Units 1 and 2) into full compliance with the New Source Performance Standards for particulate matter, sulfur dioxide and nitrogen oxides, including the timing and manner of same, such proposal to be submitted within 120 days from the date of this Order. It is understood that within 45 days from the date of this Order GPA will submit a summary of the options under consideration.

b) such current financial data as is customarily prepared by GPA including, but not limited to, a profit and loss statement, a current balance sheet, and capital funding information, such data to be submitted to the Court within 45 days from the date of this Order;

c) such financial projections as may be currently available, or which become available during the pendency of the Court's consideration of this matter, the data currently available to be submitted within 45 days from the date of this Order, and such other data to be submitted if and when available;

d) status reports concerning the construction of new fuel storage tanks, the possible implementation of a flue-gas desulfurization system, and any attempts to secure low sulfur fuel oil and any attempts to secure increased appropriations from the Legislature of Guam, such reports to be submitted within 90 days from the date of this Order; ++EP++

Page 3

e) the electric rate blue book, current operating costs, current fuel costs, the number of employees. Plans, if any, for capital expenditures or capital improvements; such materials to be submitted within 90 days from the date of this Order;

f) plans for reducing operating costs, for the modification of present bidding procedures for purchasing fuel oil, and for the improvement of managerial practices and procedures, all of which plans shall be submitted within 120 days from the date of this Order. It is understood that within 45 days from the date of this Order GPA will submit a summary of the steps taken to implement the necessary studies to develop the plans referred to in this sub-paragraph, 3(f).

4. It is understood that either party may submit to the Court within such time period as the Court may provide for this purpose such other information as either party deems relevant.

5. It is understood that copies of all information submitted to the Court shall be furnished to the opposing party which shall have a reasonable period of time within which to furnish written comments to the Court, copy to the opposing party.

6. This Court's Order of December 5, 1975, in C.A. No. 75-064 shall remain in full force and effect until further order of this Court. This Interim Consent Order shall not be considered as limiting or in any way affecting the rights of the Administrator, EPA, under Section 303 of the Clean Air Act. ++EP++

Page 4

7.The obligations and agreements of the parties hereto shall not become binding and effective unless and until this Order shall have been approved by the Court. Once approved, this Order shall remain in full force and effect and the Court shall retain jurisdiction until full compliance is achieved. All proceedings in cases C.A. #75-066 and C.A. #75-064 shall be stayed pending further order of this Court.

CONSENTED TO:

On behalf of the Guam Power Authority:

/s/ R M Poulson

RICHARD J. M. POULSON, ESQUIRE

Hogan & Hartson

815 Connecticut Avenue, N.W.

Washington, D.C. 20006

/s/ Fred E. Bordallo,

FRED E. BORDALLO,

Board Counsel

On behalf of the United States and the Environmental Protection Agency:

RALPH F. BAGLEY, JR., ESQUIRE

United States Attorney

/s/ SIGNATURE ILLEGIBLE

MATTHEW S. WALKER, ESQUIRE

Environmental Protection Agency

Region IX

/s/ Michael P. Carlton

MICHAEL P. CARLTON, ESQUIRE

Department of Justice

Washington, D.C. 20530

Approved by the Court:

/s/ SIGNATURE ILLEGIBLE

District Judge

Date January 21, 1976 ++EP++

^Z

GUAM POWER AUTHORITY

DOC 04 OF 04

CONSENT ORDER

09-76-C001

CAA

ELECT

19760121

19810513

GUD000850867

GUAM POWER AUTH CABRAS PLT

PITI, GU

75-064 & 066

09

ORDER AMENDING THE FURTHER AMENDED INTERIM CONSENT ORDER, USA V. GUAM POWER AUTHORITY.

1

IN THE DISTRICT COURT OF GUAM

GUAM POWER AUTHORITY,

Plaintiff,

v.

DOUGLAS COSTLE, ADMINISTRATOR

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Defendant.

UNITED STATES OF AMERICA,

Plaintiff,

v.

GUAM POWER AUTHORITY,

Defendant.

Upon consideration of the motion of the Guam Power Authority ("GPA") and the concurrence therein by the United States Environmental Protection Agency ("EPA"), it is hereby ORDERED:

1. That the following sentence be added to the end of paragraph 4 of the Further Amended Interim Consent Order: "In case of conflict, the timetable set forth in this Order shall take precedence over the timetable set forth in the Plan." ++EP++

Page 2

2. That paragraph 5 of the Further Amended Interim Consent Order be deleted and the following paragraph substituted therefor:

"5. That by the following dates GPA shall have completed the following designated increments of progress and shall have filed the designated status reports:

December 15, 1979 - Quarterly Report summarizing progress to November 15, 1979 March 15, 1980 - Quarterly Report summarizing progress to February 15, 1980 June 15, 1980 - Quarterly Report summarizing progress to May 15, 1980 September 15, 1980 - Quarterly Report summarizing progress to August 15, 1980 December 15, 1980 - Quarterly Report summarizing progress to November 15, 1980 February 15, 1981 - Completion of: Pilot Plant Ecological Survey Bioassay Schedule March 15, 1981 - Quarterly Report summarizing progress to February 15, 1981 June 15, 1981 - Quarterly Report summarizing progress to May 15, 1981 September 15, 1981 - Quarterly Report summarizing progress to August 15, 1981 December 15, 1981 - Quarterly Report summarizing progress to November 15, 1981 February 15, 1982 - Completion of: Bioassay Studies Engineering Analysis April 15, 1982 - Phase III Report summarizing progress to March 15, 1982 May 15, 1982 - Completion of: Data Evaluation General Guidelines June 15, 1982 - Quarterly Report summarizing progress to May 15, 1982 August 15, 1982 - Final Report

provided, however, that if at any time GPA shall decide to complete the research program, then GPA shall so notify Region IX and the marine studies shall be deemed to have shown that the seawater scrubber will not meet applicable clean water requirements, and the provisions of paragraph 6(b) shall be immediately applicable." ++EP++

3

AGREED TO:

On behalf of Guam Power Authority:

/s/ Richard J. Poulson

Richard J.Poulson

HOGAN & HARTSON

815 Connecticut Ave., N.W.

Washington, D.C. 20006

Date 11/26/80

/s/ SIGNATURE ILLEGIBLE

Board Counsel

Agana, Guam 96910

Date 5/6/81

On behalf of the United States of America and the Environmental Protection Agency:

/s/ SIGNATURE ILLEGIBLE

United States Attorney

Date 5-8-81

/s/ Matthew S. Walker

Matthew S. Walker

Senior Attorney

Environmental Protection Agency

Region IX

San Francisco, California 94105

/s/ SIGNATURE ILLEGIBLE

United States District Judge

Date 5/13/81 ++EP++

NL INDUSTRIES

DOC 01 OF 01

PARTIAL CONSENT DECREE

10-89-C003

CAA

OTHER

19890619

19890619

ORD987167855

GOULD SITE

PORTLAND, OR

89-408-PA

10

PARTIAL CONSENT DECREE, US V NL INDUSTRIES INC.,

Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,

Plaintiff,

v.

NL INDUSTRIES, INC.,

Defendant. ++EP++

Page 2 TABLE OF CONTENTS PAGE I. AGREEMENT OF PARTIES............................... 4 II. JURISDICTION....................................... 6 III. PARTIES BOUND...................................... 6 IV. WAIVER OF CLAIM SPLITTING DEFENSE.................. 7 V. DEFINITIONS........................................ 7 VI. GENERAL PROVISIONS................................. 11 VII. PERFORMANCE OF THE PRE-DESIGN STUDIES BY SETTLING DEFENDANTS..................... 13 VIII. DETERMINATION OF THE REMEDIAL ACTION............... 18 IX. QUALITY ASSURANCE.................................. 22 X. FACILITY ACCESS, SAMPLING, DOCUMENT AVAILABILITY....................................... 23 XI. REPORTING REQUIREMENTS............................. 24

XII. REMEDIAL PROJECT MANAGER/PROJECT

COORDINATORS....................................... 26 XIII. FORCE MAJEURE...................................... 27 XIV. DISPUTE RESOLUTION................................. 28 XV. RETENTION AND AVAILABILITY OF INFORMATION........................................ 31 XVI. STIPULATED CIVIL PENALTIES.......................... 32 XVII. COVENANT NOT TO SUE................................ 34 XVIII. OTHER CLAIMS....................................... 36 XIX. FINANCIAL RESPONSIBILITY........................... 37

++EP++

Page 3 XX. NOTICES............................................. 37 XXI. CONSISTENCY WITH NATIONAL CONTINGENCY PLAN.................................... 38 XXII. RESPONSE AUTHORITY................................. 39 XXIII. MODIFICATION....................................... 39 XXIV. PUBLIC PARTICIPATION............................... 39 XXV. PUBLIC PARTICIPATION............................... 39 XXV. COMMUNITY RELATIONS................................ 40 XXVI. NON-ADMISSION...................................... 40 XXVII. EFFECTIVE AND TERMINATION DATES.............................................. 41

++EP++

Page 4 I. AGREEMENT OF PARTIES

The parties agree that:

A. The United States of America shall file this Consent Decree. The United States seeks to require the Settling Defendant to abate what the U.S. Environmental Protection Agency ("U.S. EPA") believes to be the release or threat of release of hazardous substances from the Site, as hereafter defined, and to remedy what the U.S. EPA believes to be hazardous conditions presented to the public health, welfare, and the environment by the Site.

B. The relief sought against the Settling Defendant would require remedial actions as provided for in the Record of Decision ("ROD") signed on March 31, 1988, by the Regional Administrator, Region 10, the United States Environmental Protection Agency, or any modifications thereto.

C. The Settling Defendant denies any legal or equitable liability under any statute, regulation, ordinance, or common law for damages caused by the generation, handling, storage, treatment, transportation, release, or disposal of hazardous substances at the Site, or by ownership or operation of the Site.

D. This Consent Decree, the entry hereof, and compliance herewith shall not be an admission of liability for any purpose, and shall not be admissible in any judicial or administrative proceeding other than in proceedings to enforce this Consent Decree, where it may be used only to establish the Settling Defendant's responsibility to perform any of the obligations set forth herein. ++EP++

Page 5

E. To accomplish the objectives set forth in this Consent Decree the parties have agreed that it is in the public interest and in the interest of the parties for this case to be resolved without litigation, before the taking of any testimony and without the admission of any issue of fact or law.

F. An investigation is underway to identify responsible parties, other than the Settling Defendant, who arranged for the disposal or treatment of hazardous substances at the Site, or who accepted hazardous substances for transportation to the Site, and it is anticipated that the investigation will result in the identification of additional responsible parties for the site.

G. By entering into this Consent Decree, the parties do not intend to discharge non-settling persons from any liability they may have with respect to matters alleged in the complaint. The United States presently intends, subject to its prosecutorial discretion which is not subject to judicial review, to recover from viable PRPs administrative, oversight, remedial, or response costs incurred or to be incurred by the United States in connection with the Site. ++EP++

Page 6

H. U.S. EPA and Settling Defendant do not intend for this Consent Decree to be nor shall it be construed as a totally comprehensive and final response to conditions at the Site, rather the work to be performed by Settling Defendant pursuant to this Consent Decree is intended by the parties to be necessary partial corrective action which is consistent with the objectives of the Record of Decision for this Site.

I. Plaintiff and Settling Defendant, by their representatives, have agreed to this Consent Decree.

NOW THEREFORE, it is ORDERED as follows:

II. JURISDICTION

This Court has jurisdiction pursuant to 42 U.S.C. Section 9613 and 28 U.S.C. Section 1331 over the subject matter herein, and over the parties consenting hereto. Settling Defendant shall not challenge this Court's jurisdiction to enter and enforce this Consent Decree.

III. PARTIES BOUND

This Consent Decree applies to and is binding upon the undersigned parties, their successors and assigns. The undersigned representative of each party to this Consent Decree certifies that he or she is fully authorized by the party or parties whom she or he represents to enter into the terms and conditions of the Consent Decree and to execute and legally bind that party to it. ++EP++

Page 7

Settling Defendant shall provide a copy of this Consent Decree to the contractor hired to perform the work required by this Consent Decree and shall required the contractor to provide a copy thereof to any subcontractor retained to perform any part of the work required by this Consent Decree.

IV. WAIVER OF CLAIM SPLITTING DEFENSE

In addition to all other agreements of the parties, all parties recognize and acknowledge that the settlement embodied in this Consent Decree is only a partial resolution of issues related to the remediation of conditions at the Site. In the event that U.S. EPA files sequential lawsuits or claims involving the Site in any subsequent litigation regarding Settling Defendant, Settling Defendant hereby waives the defense of claim splitting by the United States.

V. DEFINITIONS

Whenever the following terms are used in this Consent Decree and the Exhibits and Appendix attached hereto, the following definitions specified in this Paragraph shall apply:

A. "Architect" or "Engineer" means the company or companies retained by the Settling Defendant to perform work described in the Scope of Work which is attached to this Consent Decree as Appendix 1. ++EP++

Page 8

B. "Bad faith" means conduct by the Settling Defendant or its pre-design engineer, agents, or employees that constitutes knowing interference with any Pre-Design Study in a manner designed to make it likely to fail, knowing interference in the U.S. EPA's control of the Pre-Design Studies, knowing omission of any material information, or making of any false statement or representation in any report, analytical data, or any document used by the U.S. EPA for the purpose of monitoring compliance with the Pre-Design Study portion of the Scope of Work.

C. "Clear and convincing evidence" means that the evidence that establishes the truth of the facts asserted must be highly probable.

D. "Contractors" or "Subcontractors" means the company or companies retained on behalf of Settling Defendant to undertake and complete the work required by this Consent Decree. Each contractor and subcontractor shall be qualified to do those portions of the work for which it is retained.

E. "Facility" means the "facility" as that term is defined at Section 101(9) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (CERCLA), 42 U.S.C. Section 9601(9), and shall be used interchangeably with the term "site" as hereinafter described.

F. "Force Majeure" shall have the meaning set forth in Paragraph XIII of this Consent Decree. ++EP++

Page 9

G. "Hazardous substance" shall have the meaning provided in Section 101(14) of CERCLA, 42 U.S.C. Section 9601(14).

H. "National Contingency Plan" shall be used as that term is used in Section 105 of CERCLA, 42 U.S.C. Section 9605.

I. "Parties" means the United States of America and the Settling Defendant.

J. "Plaintiff" means the United States of America and its agencies and departments.

K. "RD/RA" means remedial design and remedial action. "Remedial Design" means plans, specifications, and bid documents necessary to procure services to implement the remedial action. Remedial action shall have the meaning as set forth in CERCLA, as amended, and shall cover the actions defined in the Record of Decision for this site, or any subsequent modifications.

L. "Response Costs" means any costs incurred by Plaintiff pursuant to 42 U.S.C. Sub-Section 9601 et. seq., as defined in CERCLA.

M. "Scope of Work" or "SOW" means the scope of work for implementation of the Pre-Design Studies, remedial design, remedial action, and operation and maintenance of the remedial action at the Facility, as set forth in Appendix 1.

N. "Settling Defendant" means the party other than the United States of America who signs this Consent Decree.

O. "Site" means the Gould site which includes the property presently owned by Gould, along with any areas outside the property boundary where battery casings and other residue from operations on the Gould Site were placed. ++EP++

Page 10

The Gould Site is located in a heavily industrialized area northwest of downtown Portland, approximately 1000 feet southwest of the Willamette River.

P. "United States" means the United States of America.

Q. "U.S. EPA" means the United States Environmental Protection Agency.

R. "U.S. DOJ" means the United States Department of Justice.

S. "Waste Material" means any hazardous substance as defined in 42 U.S.C. Section 9601(14), and any associated contaminated material, pollutant or contaminant as defined in 42 U.S.C. Section 9601(33).

T. "Work" means the design, construction and implementation, in accordance with the pertinent Paragraphs of this Consent Decree, of the tasks described in the Scope of Work, and any schedules or plans required to be submitted pursuant thereto.

U. "Work Plan" means the work plan for the Pre-Design Studies studies described in Paragraph VII.

V "RD/RA Work Plan" means the work plan for the Remedial Design and Remedial Action. ++EP++

Page 11

W. All other terms not defined above, but defined in CERCLA, as amended, shall have the meanings set forth in CERCLA, as amended.

VI. GENERAL PROVISIONS A. Commitment of Plaintiff and Settling Defendant:

1. Settling Defendant agrees subject to the entry of this Consent Decree by the Court, to finance and perform the Work as defined in this Consent Decree and the Scope of Work ("SOW") (Appendix 1). Plaintiff and Settling Defendant acknowledge that pre-design activities described in Paragraph VII are currently in progress.

2. The Work shall be completed in accordance with the standards, specifications and in the time periods set forth in this Consent Decree and in the SOW, provided, however, that if the Consent Decree is entered after November 1, 1988, the schedule shall be automatically extended to afford the Settling Defendant the same amount of time to perform each task as it otherwise would have had. The SOW shall be an enforceable part of this Consent Decree upon entry of this Consent Decree by the Court.

B. Permits and Approvals:

1. All activities undertaken by the Settling Defendant pursuant to this Consent Decree shall be undertaken in accordance with the requirements of all applicable local, state and federal laws, regulations and permits. The United States has determined that the obligations and procedures authorized under this Consent Decree are consistent with the authority of the United States and the State under applicable law to establish appropriate remedial measures for the Facility. ++EP++

Page 12

2. a. The U.S. EPA has determined that no federal, state, or local permits are required for work conducted entirely on-site as described in the Scope of Work. The U.S. EPA has also determined that permits under the Resource Conservation and Recovery Act (RCRA) 42 USC Section 6901 et seq. may be required for work conducted off-site at facilities pursuant to Paragraph VII.A. of this Consent Decree. In the event that the time required for obtaining such permits delays or prevents compliance with the schedule for performing the Work required by this Consent Decree and the Scope of Work, the schedule shall be automatically extended by the amount of time required to obtain the permit. In the event that any such permits are not granted, the Settling Defendant shall be excused from complying with the schedule set forth in this Consent Decree and the SOW, and the parties shall renegotiate a schedule.

b. Settling Defendant shall timely apply for any permits or approvals necessary for off-site work under federal, state or local laws. The United States, the State of Oregon, and any other State may assist the Settling Defendant to obtain such permits and approvals, if necessary. Except as provided above in Paragraph V1.B.2, delays in obtaining permits required for the Work, or the denial of any such permits, will constitute a Force Majeure as defined in this Consent Decree. ++EP++

Page 13

3. Settling Defendant shall include in all contractors or subcontractors entered into for work required under this Consent Decree that all contractors and subcontractors, including their agents and employees, shall perform all activities required by such contracts or subcontracts in compliance with all applicable laws and regulations. This Consent Decree is not, nor shall it act as, nor is it intended by the Parties to be, a permit issued pursuant to any federal or state statute or regulation.

C. Conveyance of the Facility

Any deed, title, or other instrument of conveyance entered into by Settling Defendant regarding the Facility shall contain a notice that the Facility is subject to this Consent Decree, setting forth the style of the case, case number, and the Court having jurisdiction herein, and shall require the grantee to continue allowing access to U.S. EPA and its representatives.

VII. PERFORMANCE OF THE PRE-DESIGN STUDIES BY SETTLING

DEFENDANTS

A. All Pre-Design Studies to be performed by Settling Defendant pursuant to this Consent Decree shall be under the direction and supervision of a qualified professional engineer approved by Plaintiff and Settling Defendant, and at Facilities agreed to by Plaintiff and Settling Defendant. Such approval and agreement shall be achieved as expeditiously as possible and, in any event, prior to the entry of this Decree. ++EP++

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The Pre-Design Studies shall be performed in accordance with the schedule in the Scope of Work and the schedule set forth therein, unless the schedule is extended by operation of Paragraph VI.A.2 or VI.B.2 of this Consent Decree. Further, if U.S. EPA does not timely perform under the schedule, the schedule shall be automatically extended by the period of U.S. EPA's delay.

1. Control of Pre-Design Studies.

a. The terms of the contract between Settling Defendant and the engineer (hereafter, the "Contract") shall be jointly agreed upon between U.S. EPA and the Settling Defendant. The terms of the Contract(s) between Settling Defendant and the above-referenced Facilities shall be jointly agreed upon between U.S. EPA and the Settling Defendant. Said Contract(s) shall be entered into within fourteen (14) days of the entry of this Consent Decree, unless an extension is mutually agreed to by the parties.

b. All plans, reports, and data produced shall be provided simultaneously to U.S. EPA and the Settling Defendant. Settling Defendant shall not have any right of approval of work prior to its submission to U.S. EPA.

c. The selected engineer shall address all U.S. EPA comments on draft reports in preparing final reports. Unless the SOW provides a different time period for U.S. EPA to comment on drafts, all U.S. EPA comments shall be delivered to the Settling Defendant within thirty (30) days of U.S. EPA's receipt of drafts. ++EP++

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d. Provided it is consistent with the Scope of Work, the work plan for the Pre-Design Studies (the Work Plan) shall be prepared by the Settling Defendant and the selected engineer and submitted to the U.S. EPA in accordance with the schedule for the Pre-Design Studies. The Work Plan shall be subject to approval by the U.S. EPA. Settling Defendant shall have the right of participation in this process but shall not have the right of approval in determining the contents of the Work Plan.

e. If, at any time during the conduct of the Pre-Design Studies, the U.S. EPA makes a determination, based on clear and convincing evidence, that the Settling Defendant is carrying out the provisions of this Paragraph in Bad Faith, then the U.S. EPA shall bar the Settling Defendant from further participation in the Pre-Design Studies. Any such determination by the U.S. EPA shall not be subject to the Dispute Resolution provisions of this Consent Decree. Settling Defendant shall, however, be required to continue to fulfill its financial obligations under the Contract.

2. a. The Work Plan shall be developed in conformance with the SOW, and any additional guidance documents provided by U.S. EPA. ++EP++

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b. The Work Plan submittal shall include a schedule for submittal of deliverables, reports and plans as set forth in the Scope of Work, including: a sampling and analysis plan; a health and safety/ contingency plan; a plan for satisfaction of any permitting requirements; and a quality assurance project plan.

c. The Work Plan and other required documents and reports (hereinafter referred to as "documents") shall be subject to review, comment and approval by the U.S. EPA. As part of its approval authority U.S. EPA can modify the work plan.

d. Within the schedule set forth in the SOW, the U.S. EPA Remedial Project Manager shall notify Settling Defendant, in writing, of approval or disapproval of the document, or any part thereof. In the event that a longer review period is required, the U.S. EPA Remedial Project Manager shall notify Settling Defendant of that fact within fourteen (14) calendar days of receipt of the document. In the event of a disapproval, the U.S. EPA shall specify, in writing, any deficiencies and required modifications to the document.

e. In accordance with the schedule set forth in the SOW, or as otherwise required by the U.S. EPA, the Settling Defendant shall submit a revised document to the U.S. EPA which addresses the U.S. EPA comments, or the Settling Defendant shall provide a notice of dispute pursuant to the Dispute Resolution provisions of this Consent Decree. ++EP++

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Unless otherwise provided for in the Scope of Work, the aforesaid submittal or notice shall be furnished to the U.S. EPA within fourteen (14) calendar days of receipt of any U.S. EPA document disapproval.

f. Settling Defendant shall proceed to implement the work, or portions of the work, detailed in the Work Plan if and when all or portions of the Work Plan are fully approved by U.S. EPA. Unless otherwise directed by U.S. EPA, the Settling Defendant shall not commence field activities until approval by U.S. EPA of the Work Plan or portions thereof. The fully approved Work Plan shall be deemed incorporated into and made an enforceable part of this Consent Decree upon entry of this Consent Decree by the Court. All work shall be conducted in accordance with the National Contingency Plan and the requirements of this Consent decree, including the standards, specifications, and schedule contained in the Work Plan.

3. The Parties acknowledge and agree that neither the SOW nor the Work Plan constitutes a warranty or representation of any kind by Plaintiff and shall not foreclose Plaintiff from seeking performance of all terms and conditions of this Consent Decree.

B. Upon completion of the pre-design report, the U.S. EPA shall determine whether the results of the studies satisfy the criteria described in Phase B of the Scope of Work. The U.S. EPA shall then notify the Settling Defendant of U.S. EPA's determination. ++EP++

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Settling Defendant shall have no more than thirty (30) days to respond to the U.S. EPA's determination and the response shall be incorporated into the administrative record.

VIII. DETERMINATION OF THE REMEDIAL ACTION

A. In the event that the U.S. EPA determines that the criteria of Phase B of the Scope of Work are satisfied:

1. The U.S. EPA shall notify the Settling Defendant and any known responsible parties identified by the U.S. EPA to proceed with the Remedial Design/Remedial Action ("RD/RA").

2. Thirty (30) days after the Settling Defendant's response pursuant to Paragraph VII.B above, the Settling Defendant, and any other PRPs identified by U.S. EPA, shall notify the U.S. EPA whether or not it will perform the entire RD/RA. Regardless of its participation in the performance of the RD/RA, the Settling Defendant will undertake to perform the tasks identified in Paragraph VIII.A.4. If the Settling Defendant agrees to complete the entire RD/RA, the parties shall negotiate a supplemental agreement to be signed within sixty (60) days and lodged under this Consent Decree.

3. If Settling Defendant declines to perform the selected remedy, the U.S. EPA may, in accordance with applicable law, perform and pay for the selected remedy. U.S. EPA reserves its right to file claims against Settling Defendant in a proceeding to recover response costs, not inconsistent with the National Contingency Plan, expended by U.S. EPA in performing the RD/RA. ++EP++

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Settling Defendant reserves any rights it may have with respect to liability for U.S. EPA's costs for work performed by the Agency outside of this Consent Decree. The Settling Defendant does not waive any right it may have pursuant to CERCLA, as amended, to contest any U.S. EPA decisions to perform any further remediation, and any and all rights and defenses it may have. This reservation of rights shall not apply to tasks identified in Paragraph VIII.A.4.

4. (i) Notwithstanding the above, the Settling Defendant agrees to pay for the development of an RD/RA Work Plan, engineering, design, and construction of equipment to carry out the fixation of soil and the separation and treatment of battery casings at the Site. Said payment shall not exceed $2.25 million minus the cost of the Pre-Design Studies. Any necessary response costs, not inconsistent with the National Contingency Plan, incurred by U.S. EPA for these items in excess of this amount may be included in amounts sought to be recovered by U.S. EPA in subsequent proceedings.

(ii) All remedial design work to be performed by Settling Defendant pursuant to this Consent Decree shall be under the direction and supervision of a qualified professional engineer. Prior to the initiation of remedial design work for the Facility, the Settling Defendant shall notify U.S. EPA, in writing, of the name, title, and qualifications of any Engineer proposed to be used in carrying out the remedial design work, and the selection of engineers shall be subject to approval by U.S. EPA. ++EP++

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(iii) The RD/RA Work Plan submittal shall include a schedule for submittal of the following project plans: (1) a sampling and analysis plan; (2) a health and safety/contingency plan; (3) a plan for satisfaction of permitting requirements; (4) a quality assurance project plan; (5) a groundwater monitoring plan; and (6) an operations and maintenance plan. The RD/RA work plan shall also include a schedule for implementation of the RD/RA tasks and submittal of RD/RA reports.

(iv) All remedial action work to be performed by the Settling Defendant pursuant to this Consent Decree shall be under the direction and supervision of a qualified professional engineer. Prior to the initiation of remedial action work at the Facility, the Settling Defendant shall notify U.S. EPA, in writing, of the name, title, and qualifications of the proposed Engineer, and the names of principal contractors and/or subcontractors, if known, proposed to be used in carrying out the RD/RA work to be performed pursuant to this Consent Decree. Selection of any such Engineer, contractor and/or subcontractor shall be subject to approval by the U.S. EPA.

(v) Settling Defendant shall proceed to implement the work detailed in the RD/RA work plan if and when it is fully approved by the U.S. EPA. Unless otherwise directed by U.S. EPA, the Settling Defendant shall not commence field activities until approval by U.S. EPA of the RD/RA work plan. ++EP++

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The fully approved RD/RA work plan shall be deemed incorporated into and made an enforceable part of this Consent Decree, provided, however, that the Settling Defendant shall be excused from further performance under this Consent Decree of those activities specified in the RD/RA work plan upon the expenditure of the dollar limitation

set forth in Paragraph VIII.A.4(i).

(vi) Periodic reports of expenditures in furtherance of the activities required by Paragraph VIII A.4 shall be furnished to the U.S. EPA. U.S. EPA may use this information to determine the order in which specific portions of the RD/RA shall be performed.

(vii) Performance of the aforesaid tasks may not act as a bar to any additional liability Settling Defendant may have.

B. In the event that the U.S. EPA determines that the criteria of Phase B of the Scope of Work are not satisfied, an additional public comment period will be established and the Record of Decision may be modified. At such time, U.S. EPA would present for comment additional options for treating the on-site materials to the maximum extent practicable. Settling Defendant shall have thirty (30) days after its receipt of any modification of the Record of Decision to negotiate for the performance of the RD/RA selected under this paragraph. In the event that these negotiations are successful, then a new Consent Decree shall be entered. ++EP++

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In the event that these negotiations are unsuccessful, this Consent Decree shall be terminated in accordance with the provisions of Paragraph XXVIII.

IX. QUALITY ASSURANCE

Settling Defendant shall use quality assurance, quality control, and chain of custody procedures in accordance with U.S. EPA's "Interim Guidelines and Specifications For Preparing Quality Assurance Project Plans," (QAM-005/80), U.S. EPA's Data Quality Objective Guidance (U.S. EPA/540/G87/003 and 004), and subsequent amendments to such guidelines upon notification to Settling Defendant of such amendments by U.S. EPA. Prior to the commencement of any monitoring project under this Consent Decree, Settling Defendant shall submit a Quality Assurance Project Plan ("QAPP") to U.S. EPA that is consistent with the RA and applicable guidelines. U.S. EPA, after review of Settling Defendant's QAPP, will notify Settling Defendant of any required modifications, conditional approval, disapproval, or approval of the QAPP. Except as provided in Paragraph VII.A.2.c, notification of disapproval or any need for modifications in the QAPP shall be subject to the Dispute Resolution provisions of this Consent Decree. In addition, Settling Defendant shall have a designated laboratory analyze samples submitted by U.S. EPA for quality assurance monitoring. ++EP++

Page 23 X. FACILITY ACCESS, SAMPLING, DOCUMENT AVAILABILITY

A. Settling Defendant, if presently owners or record title holder to any part of the Site, shall provide access to U.S. EPA or its representatives for the purpose of effectuating all terms of this Consent Decree.

B. To the extent that the Facility or other areas where Work is to be performed hereunder are presently owned by parties other than those bound by this Consent Decree, Settling Defendant shall use its reasonable efforts to obtain access agreements from the present owners within thirty (30) calendar days of entry of this Consent Decree for purposes of implementing the requirements of this Consent Decree. Settling Defendant may not be required by this Consent Decree to pay compensation or damages or to enter into indemnity agreements to secure such access. Access agreements shall provide access for U.S. EPA, authorized representatives of U.S. EPA, and the contractors of the Settling Defendant. If such access agreements are not obtained within the time specified herein, Settling Defendants shall so notify U.S. EPA, and Plaintiff may use available legal means to secure access to the Facility. Settling Defendant's failure to secure access to any such Facility after reasonable efforts have been made shall not be a violation of this Consent Decree.

C. Settling Defendant shall make available to U.S. EPA and the State the results of all sampling and/or tests or other data generated by Settling Defendant with respect to the implementation of this Consent Decree and shall submit these results in progress reports required by the SOW. ++EP++

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D. At the request of U.S. EPA, Settling Defendant shall allow split or duplicate samples to be taken by U.S. EPA and/or its authorized representatives, of any samples collected by Settling Defendant pursuant to the implementation of this Consent Decree. Settling Defendant shall notify U.S. EPA as soon as practicable in advance of any sample collection activity. In addition, U.S. EPA shall have the right to take any additional samples that U.S. EPA deems necessary.

XI. REPORTING REQUIREMENTS

A. Settling Defendant shall be responsible for and require the contractor to prepare and provide to the U.S. EPA periodic written progress reports which: (1) describe the actions which have been taken towards achieving compliance with this Consent Decree during the previous period; (2) include all results of sampling and tests and all other data received by Settling Defendant during previous period; (3) include all plans and procedures completed under the Work Plan during the previous period (4) describe all actions, data, and plans which are scheduled for the next period and provide other information relating to the progress of construction as is customary in the industry; (5) include information regarding percentage of completion, unresolved delays encountered or anticipated that may affect the future schedule for implementation of Scope of Work or Work Plan, and a description of efforts made to mitigate those delays or anticipated delays. ++EP++

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Previous period shall be defined as that period of time subsequent to the submittal of the Final Work Plan or subsequent to submittal of the previous progress report, whichever is appropriate. These progress reports are to be submitted to U.S. EPA within the time frames set forth in the SOW. Where required in the SOW, bi-monthly progress reports are to be submitted to U.S. EPA by the tenth day of the month.

B. Upon the occurrence of any event during performance of the Work which, pursuant to Section 103 of CERCLA, requires reporting to the National Response Center, Settling Defendant shall promptly orally notify the U.S. EPA Project Manager ("RPM"), or in the event of the unavailability of the U.S. EPA RPM, the Emergency Response Section, Region 10, United States Environmental Protection Agency, in addition to the reporting required by Section 103. Within twenty (20) days of the onset of such an event, Settling Defendant shall furnish to Plaintiff a written report setting forth the events which occurred and the measures taken, and to be taken, in response thereto. Within sixty (60) days of the conclusion of such an event, Settling Defendant shall submit a report setting forth all actions taken to respond thereto. ++EP++

Page 26 XII. REMEDIAL PROJECT MANAGER (RPM)/PROJECT COORDINATOR

A. U.S. EPA shall designate an RPM for the Facility, and the Plaintiff may designate other representatives, including U.S. EPA and state employees, and federal and state contractors and consultants, to observe and monitor the progress of any activity undertaken pursuant to this Consent Decree. The RPM shall have the authority lawfully vested in an RPM or an On-Scene Coordinator (OSC) by the National Contingency Plan, 40 C.F.R. Part 300. In addition, the RPM shall have authority to halt, conduct, or direct any work required by this Consent Decree and to take any necessary response action when conditions at the Facility present an imminent and substantial endangerment to public health or welfare or the environment. Settling Defendant shall also designate a Project Coordinator who shall have primary responsibility for implementation of the Work at the Facility.

B. To the maximum extent possible, except as specifically provided in the Consent Decree, communications between Settling Defendant and U.S. EPA concerning the terms and conditions of this Consent Decree shall be made between the Project Coordinator and the RPM.

C. Within ten (10) calendar days of the date of entry of this Consent Decree, Settling Defendant and U.S. EPA shall notify each other, in writing, of the name, address, and telephone number of the designated Project Coordinator and an Alternate Project Coordinator or RPM and Alternate RPM. ++EP++

Page 27 XIII. FORCE MAJEURE

A. "Force Majeure" for purposes of this Consent Decree is defined as any event arising from causes beyond the control of Settling Defendant which delays or prevents the performance of any obligation under this Consent Decree, and which its could not avoid or overcome through the exercise of due diligence. "Force Majeure" shall not include changed financial conditions, increased costs, or expenses.

B. When circumstances occur which may delay performance of any obligation under this Consent Decree or delay access to the Facility or to any property on which any part of the Work is to be performed, Settling Defendant shall promptly notify the RPM by telephone, or in the event of his unavailability, the Director of the Waste Management Division of U.S. EPA. Within ten (10) working days after the event which Settling Defendant contends is responsible for the delay, Settling Defendant shall supply to Plaintiff in writing the reason(s) for and anticipated duration of such delay, the measures taken or planned to mitigate the delay, and the timetable for implementation of such measures. Failure to give oral notice to the RPM and to give written explanation to Plaintiff in a timely manner may, in the discretion of the U.S. EPA, constitute a waiver of any claim of force majeure. The U.S. EPA's determination that failure to give oral notice to the RPM constitutes a waiver of a claim of force majeure shall not be subject to the Dispute Resolution provisions of this Consent Decree. ++EP++

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C. If U.S. EPA agrees that a delay is or was attributable to a "force majeure" event, the Parties shall modify the Work Plan to provide such additional time as may be necessary to allow the completion of the specific phase of Work and/or any succeeding phase of the Work affected by such delay, with such additional time not to exceed the actual duration of the delay.

D. If U.S. EPA and Settling Defendant cannot agree whether the reason for the delay was a "force majeure" event, or whether the duration of the delay is or was warranted under the circumstances, the Parties shall resolve the dispute according to the Dispute Resolution provisions of this Consent Decree. Settling Defendant has the burden of proving "force majeure" as a defense to compliance with this Consent Decree.

XIV. DISPUTE RESOLUTION

A. Except as otherwise specifically provided for in this Consent Decree, these dispute resolution procedures shall apply to all disputes between the Settling Defendant and the Plaintiff arising out of this Consent Decree. Except as otherwise specifically provided for in this Consent Decree, any dispute which arises out of this Consent Decree shall in the first instance be the subject of informal negotiations between the Settling Defendant and Plaintiff.

B. In the event that any dispute arising under this Consent Decree is not resolved within fourteen (14) days through informal means, any party desiring Dispute Resolution under this Paragraph shall give written notice to the other parties to the Consent Decree within ten (10) days after the conclusion of the informal negotiation period. ++EP++

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C. Within twenty (20) days of the service of notice of dispute pursuant to Paragraph XIV.B, the party who gave the notice shall serve on the other parties to this Consent Decree a written statement of the issues in dispute, the relevant facts upon which the dispute is based, any factual data, analysis, or opinion supporting its position, and all supporting documentation on which such party relies (hereinafter the "Statement of Position"). Opposing parties shall serve their Statements of Position, including supporting documentation, no later than twenty (20) days after receipt of the complaining Party's Statement of Position. In the event that these 20-day time periods for exchange of Statements of Position may cause a delay in the Work, they shall be shortened upon and in accordance with notice by the U.S. EPA.

D. Any documents regarding a dispute under this Paragraph shall be part of the administrative record maintained by the U.S. EPA in this matter. The record shall be available for review by all parties. Settling Defendant may assert business confidentiality claims covering part or all of the information provided in connection with this Consent Decree in accordance with Section 104(e)(7) of CERCLA, 42 U.S.C. Section 9604(e)(7), and pursuant to 40 C.F.R. Section 2.203(b) and applicable State law. ++EP++

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E. Upon review of the administrative record, the Director of Waste Management Division, U.S. EPA, Region 10, shall issue a final decision and order resolving the dispute. Said order shall be followed unless Settling Defendant file a petition for review pursuant to Paragraph XIV.F below. This order shall be enforceable administratively pursuant to Section 121(e)(2) of CERCLA, subject to the rights of judicial review set forth below.

F. Any decision and order of U.S. EPA pursuant to the preceding Paragraph XIV.E shall be reviewable by the Court, provided that a petition for review is filed within ten (10) days of receipt of the U.S. EPA's decision and order, until the date of termination of this Consent Decree. Thereafter, judicial review will be available only by instituting new action(s) to the extent permitted by law.

G. The invocation of the procedures stated in this Paragraph shall not extend or postpone Settling Defendant's obligations under this Consent Decree with respect to the disputed issue unless agreed by the Parties, or until the U.S. EPA finds, or the Court orders, otherwise. Payment of stipulated civil penalties shall not be made during Settling Defendant's participation in Dispute Resolution. Except as specified in Paragraph XVII infra, upon completion of Dispute Resolution, said penalties shall be paid by the Settling Defendant or excused by the U.S. EPA. ++EP++

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H. The standard of review for dispute resolution shall be determined by the Court in accordance with the provisions of CERCLA. With respect to disputes involving the selection and implementation of the remedy, the Settling Defendant shall bear the burden of proof. In all other disputes, the moving party shall bear the burden of proof.

I. The Court's determination shall bind all signatories to this Consent Decree. Each party shall bear its own attorney's fees or legal costs resulting from utilization of the judicial review provisions of these dispute resolution procedures.

XV. RETENTION AND AVAILABILITY OF INFORMATION

A. Settling Defendant shall make available to U.S. EPA and the State and shall retain, during the pendency of this Consent Decree and for a period of six (6) years after its termination, all records and documents in their possession, custody, or control which relate to the performance of this Consent Decree, including, but not limited to, documents reflecting the results of any sampling, tests, or other data or information generated or acquired by any of them, or on their behalf, with respect to the Facility. After the six (6) year period of document retention, Settling Defendant shall notify U.S. DOJ and the U.S. EPA at least ninety (90) calendar days prior to the destruction of any such documents, and upon request by the U.S. EPA, Settling Defendant shall relinquish custody of the documents to the U.S. EPA. ++EP++

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B. Settling Defendant may assert business confidentiality claims covering part or all of the information provided in connection with this Consent Decree in accordance with Section 104(e)(7) of CERCLA, 42 U.S.C. Section 9604(e)(7), and pursuant to 40 C.F.R. Section 2.203(b).

C. Information determined to be confidential by U.S. EPA will be afforded the protection specified in 40 C.F.R. Part 2, Subpart B. If no such claim accompanies the information when it is submitted to the U.S. EPA the public may be given access to such information without further notice to Settling Defendant.

D. Information acquired or generated by Settling Defendant in performance of the Work that is subject to the provisions of Section 104(e) (7) (F) of CERCLA, 42 U.S.C. Section 9604 (e) (7) (F), shall not be claimed as confidential by Settling Defendant.

XVI. STIPULATED CIVIL PENALTIES

In consideration of the work schedule agreed to in this Consent Decree and Scope of Work, stipulated civil penalties shall be as described below.

A. Settling Defendant shall pay stipulated civil penalties of $100 per day for their submission of a deficient resubmittal progress report unless such failure is excused under the Force Majeure provisions of the Consent Decree. ++EP++

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B. Except for the stipulated civil penalties specified in paragraph A, the Settling Defendant shall pay the following stipulated civil penalties for each failure to comply with the requirements of this Decree, including but not limited to all implementation schedules and performance and submission dates:

Period of Failure to Comply Penalty Per Violation

lst through 5th day

$ 100

6th through 20th day

$ 500

21st day and beyond

$1,000

Settling Defendant shall pay all stipulated penalties upon demand by U.S. EPA unless Settling Defendant invokes the dispute resolution procedures set forth in Paragraph XIV of this Consent Decree.

C. Stipulated civil penalties shall accrue from the date scheduled for performance of a specific task unless excused, and will continue until the completion of the task.

D. Stipulated civil penalties shall accrue but need not be paid during the dispute resolution period. If the District Court becomes involved in the resolution of the dispute the period of dispute shall end upon the rendering of a decision by the District Court regardless of whether any party appeals such decision. If the Settling Defendant does not prevail upon resolution, the Plaintiff has the right to collect all penalties which accrue prior to and during the period of dispute. ++EP++

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If the Settling Defendant prevail upon resolution, no penalties shall be payable.

E. If Settling Defendant fails to pay stipulated civil penalties, the Plaintiff may institute proceedings to collect the penalties. Notwithstanding the stipulated civil penalties provision of this Paragraph, U.S. EPA may elect to assess civil penalties and/or bring an action in U.S. District Court pursuant to Section 109 of CERCLA, as amended by SARA, to enforce the provisions of this Consent Decree, provided that Settling Defendant's total penalty exposure to U.S. EPA for violations shall be limited to $25,000 per day per violation of this Consent Decree. Payment of stipulated civil penalties shall not preclude the U.S. EPA from electing to pursue any other remedy or sanction to enforce this Consent Decree, and nothing shall preclude U.S. EPA from seeking statutory penalties against Settling Defendant for violations of statutory or regulatory requirements. Any assessed stipulated civil penalties shall be credited toward any statutory penalties awarded by the Court.

XVII. COVENANT NOT TO SUE

A. Except as provided in Paragraph XVIII.C, the Settling Defendant shall receive no release from liability as a result of any action performed pursuant to this Decree. The United States reserves the right to institute proceedings in a new action or to issue an Order seeking to compel the Settling Defendant to remediate any release from the Facility. ++EP++

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B. Nothing in this Consent Decree shall constitute or be construed as a release or a covenant not to sue regarding any claim or cause of action against any person, firm, trust, joint venture, partnership, corporation, or other entity not signatory to this Consent Decree for any liability it may have arising out of or relating to the Facility.

C. In consideration of actions which will be performed and payments which will be made by the Settling Defendant under the terms of the Consent Decree, and except as otherwise specifically provided in this Decree, the United States covenants not to sue the Settling Defendant or its officers, directors, employees, or agents for "Covered Matters." "Covered Matters" shall include any and all claims available to Plaintiff for work performed or payments made by the Settling Defendant pursuant to this Consent Decree under Sections 106 and 107 of CERCLA and Section 7003 of RCRA and any and all claims available under common law authority arising out of the facts surrounding the transactions or occurrences as described in the Compliant.

D. "Covered Matters" as defined in Paragraph XVIII.C of this Consent Decree are "matters addressed" in the Consent Decree within the meaning of Section 113 (f)(2) of CERCLA as to which Settling Defendant has resolved its liability to the United States. ++EP++

Page 36 XVIII. OTHER CLAIMS

A. Settling Defendant agrees to indemnify, save, and hold harmless the U.S. EPA and/or its representatives from any and all claims or causes of action arising from negligent acts or omissions of Settling Defendant and/or its representatives in carrying out the activities pursuant to this Consent Decree. The U.S. EPA shall notify Settling Defendant of any such claims or actions within sixty (60) working days of receiving notice that such a claim or action is anticipated or has been filed. The U.S. EPA agrees not to act with respect to any such claim or action without first providing Settling Defendant an opportunity to participate.

B. The U.S. EPA is not to be construed as a party to, and does not assume any liability for, any contract pursuant to this Consent Decree. The proper completion of the Work under this Consent Decree is solely the responsibility of Settling Defendant. Settling Defendant agrees to indemnify, save, and hold harmless U.S. EPA from any and all claims arising from contracts entered in to between Settling Defendant and its contractors pursuant to this Consent Decree.

C. Settling Defendant waives its rights to assert any claims against the Hazardous Substances Trust Fund under CERCLA that are related to any past costs or costs incurred in the Work performed pursuant to this Consent Decree, and nothing in this Consent Decree shall be construed as the U.S. EPA's preauthorization of a claim against the Hazardous Substance Trust Fund. ++EP++

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Settling Defendant reserves its right to bring an action for contribution and/or indemnification against any person, firm, trust, joint venture, partnership, corporation, or other entity not signatory to this Consent Decree for any liability such person, firm, trust, joint venture, partnership, corporation, or other entity may have arising out of or relating to the Facility.

XIX. FINANCIAL RESPONSIBILITY

Settling Defendant shall provide financial assurance for completion of the Pre-Design Studies in accordance with 40 C.F.R. Part 264, Subpart H.

XX. NOTICES

A. Whenever, under the terms of this Consent Decree, a report or other document is required to be forwarded by one party to another such correspondence shall be directed to the following individuals at the addresses specified below: As to the United States or U.S. EPA:

Director, Waste Management Division

Attn: Gould Site Remedial Project Manager

U.S. Environmental Protection Agency

1200 Sixth Avenue

Seattle, Washington 98101

As to Settling Defendant: Janet D. Smith and to Jay F. Young Associate General Counsel Principal Environmental NL Industries, Inc. Engineer 445 Park Ave, Suite 1500 NL Industries, Inc. New York, New York 10022 P.O. Box 1090 Wyckoff Mills Road Hightstown, New Jersey 08520 ++EP++ Page 38

B. Whenever, under the terms of this Consent Decree, notice is required to be given or service of any papers or process is necessitated by the Dispute Resolution provisions hereof, such correspondence shall be directed to the following individuals at the addresses specified below: As to the United States or U.S. EPA:

Director, Waste Management Division

Attn: Gould Site Remedial Project Manager

U.S. Environmental Protection Agency

1200 Sixth Avenue

Seattle, Washington 98101

Assistant Attorney General

Land & Natural Resources Division

U.S. Department of Justice

10th and Pennsylvania Avenue, N.W.

Washington, D.C. 20530

As to Settling Defendant: Janet D. Smith and to Jay F. Young Associate General Counsel Principal Environmental NL Industries, Inc. Engineer 445 Park Ave, Suite 1500 NL Industries, Inc. New York, New York 10022 P.O. Box 1090 Wyckoff Mills Road Hightstown, New Jersey 08520

XXI. CONSISTENCY WITH NATIONAL CONTINGENCY PLAN

The Parties agree that the Scope of Work, if properly performed as set forth in Paragraphs VII and VIII herein, is consistent with the provisions of the National Contingency Plan pursuant to 42 U.S.C. Section 9605. ++EP++

Page 39 XXII. RESPONSE AUTHORITY

Except as provided for in Paragraph XVIII of this Consent Decree, nothing in this Consent Decree shall be deemed to limit the response authority of the United States under 42 U.S.C. Sub-Section 9604 and 9606.

XXIII. MODIFICATION

Except as provided for herein, there shall be no modification of this Consent Decree without written approval of all Parties to this Consent Decree. If all Parties do not approve, the Party seeking the modification shall petition the Court and shall have the burden of establishing the necesssity of the modification.

XXIV. PUBLIC PARTICIPATION

The United States shall publish a notice of this Consent Decree and the availability for review and comment upon its lodging with the United States District Court as a proposed settlement in this matter.

The United States will provide interested persons with the opportunity to file written comments during at least a thirty (30) day period following such notice. In addition, the United States intends to hold an informal public meeting in Portland, Oregon, during this period to receive either written or oral comments. Settling Defendant shall have the right to provide information at such meeting. The United States will file with the Court a copy of any comments received and the responses of the United States to such comments. ++EP++

Page 40

After the closing of the public comment period, the United States will review such comments and determine whether the comments disclose facts or considerations which indicated that the proposed Consent Decree is inappropriate, improper, or inadequate, and that the Consent Decree should therefore be withdrawn. Should the Consent Decree be withdrawn, the United States shall inform the other parties as to the basis for the withdrawal and any modifications necessary for consent to a settlement.

XXV. COMMUNITY RELATIONS

Settling Defendant shall cooperate with U.S. EPA in providing information to the public. As requested by U.S. EPA, Settling Defendant shall participate in the preparation of all appropriate information disseminated to the public and in public meetings which may be held or sponsored by the U.S. EPA to explain activities at or concerning the Facility.

XXVI. NON-ADMISSION

Entry into this Consent Decree shall not constitute an admission, adjudication, or waiver of any right or defense of Settling Defendant with respect to any present or future liability for conditions at or near the Site; or of any fact or conclusion of law arising out of any present or future alleged liability for conditions at or near the Site; or evidence of any wrongdoing or misconduct or liability to any person on the part of Settling Defendant, its officers, directors, agents, servants, employees, successors, contractors and assigns, and any persons, firms, subsidiaries, divisions, and corporations acting under or for them. ++EP++

Page 41

Nothing in this Consent Decree shall constitute an admission of liability by Settling Defendant for any purpose.

XXVII. EFFECTIVE AND TERMINATION DATES

A. This Consent Decree shall be effective upon the date of its entry by the Court.

B. When Settling Defendant determines that it has completed the Work required pursuant to this Decree by Settling Defendant, it shall submit to U.S. EPA a Notice of Completion and a final report as required by the Work Plan. The final report must summarize the Work performed, any modification to the Work Plan, and the performance levels achieved. The summary shall include or reference any supporting documentation.

Upon receipt of the Notice of Completion, the U.S. EPA shall review the accompanying report and any other supporting documentation. The U.S. EPA shall issue a Certification of Completion upon its determination that (1) Settling Defendant has satisfactorily completed the Work, required pursuant to this Decree by Settling Defendant, and (2) all stipulated civil penalties required to be paid under this Consent Decree have been paid in full by Settling Defendant or excused by the U.S. EPA. ++EP++

Page 42

By the signatures below Plaintiff's consents to this Consent Decree is hereby given:

UNITED STATES OF AMERICA on behalf of the

ENVIRONMENTAL PROTECTION AGENCY

By: /s/ ILLEGIBLE SIGNATURE

ROBIE G. RUSSELL

Regional Administrator

Date: Mar 22, 1989

UNITED STATES OF AMERICA

By: /s/ Donald Carr

DONALD CARR

Date: April 6, 1989

By: /s/ ILLEGIBLE SIGNATURE

Its: Attorney, Land & Natural Resources

Division

Date: April 11, 1989

UNITED STATES ATTORNEY

By: /s/ ILLEGIBLE SIGNATURE

Its: Assistant United States Attorney

Date: April 13, 1989 ++EP++

Page 43

The undersigned represents that she is authorized to sign this Consent Decree on behalf of NL Industries, Inc., the Settling Defendant. The undersigned Settling Defendant hereby consents to the foregoing Consent Decree in U.S. v. NL Industries, Inc.

NL Industries, Inc.

By: /s/ Janet D. Smith

Janet D. Smith

Associate General Counsel

Date: 3/20/89 ++EP++

HYGRADE FOOD PRODUCTS

DOC 01 OF 01

CONSENT DECREE

10-85-C006

CAA

FOOD

19850910

19850910

WAD099034977

HYGRADE FOOD PRODUCTS CORP

TACOMA, WA

85-551(C-T)

10

CONSENT DECREE, USA. V HYGRADE FOOD PRODUCTS CORPORATION,

Page 1 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA

UNITED STATES OF AMERICA,

Plaintiff,

v.

HYGRADE FOOD PRODUCTS CORPORATION,

Defendant.

WHEREAS, the United States of America ("United States"), on behalf of the United States Environmental Protection Agency ("EPA"), filed a Complaint against Hygrade Food Products Corporation ("Hygrade") on June 21, 1985 alleging that Hygrade violated the Washington State Implementation Plan ("Washington SIP") and the Federal Clean Air Act, 42 U.S.C. Section 7401, et seq. ("Act") by allowing its Gladd smokehouses to exceed WAC 173-400-040(1); and

WHEREAS, the Complaint sought, inter alia, injunctive relief and civil penalties against Hygrade for alleged violations of the federally enforceable Washington SIP pursuant to Section 113(b) of the Act, 42 U.S.C. Section 7413(b); and

WHEREAS, the United States and Hygrade have agreed that the settlement of this case without further litigation is in the public interest and that entry of this Decree is the most appropriate means of resolving this matter; and ++EP++

Page 2

WHEREAS, neither Hygrade's Consent to the entry of this Decree nor the entry of the Judgment on the Decree itself shall constitute an acknowledgment or admission by Hygrade that it, its officers, agents, or employees have failed in any way to comply with any of the laws or regulations or standards upon which this Decree is based;

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

I. JURISDICTION

The Court has jurisdiction over the subject matter herein pursuant to 42 U.S.C. Section 7413 and 28 U.S.C. Section 1345 and the parties hereto for the purposes of entering this Consent Decree. The Complaint states claims upon which relief may be granted against defendant under the Act, 42 U.S.C. Sections 7401, et seq.

II. APPLICABILITY

The provisions of this Decree shall apply to and be binding upon the plaintiff and Hygrade, their officers, directors, agents, servants, employees, as well as successors in interest to the ownership or operation of Hygrade's Tacoma, Washington, facility. Hygrade shall give notice of this Consent Decree to any prospective operator or prospective successor to its interest in the facility prior to the transfer of ownership or operation of the Tacoma facility and shall simultaneously notify EPA Region 10 that such notice has been given. ++EP++

Page 3 III. FACILITY ACCESS

Any authorized representative or contractor of EPA, State of Washington, Department of Ecology or the Puget Sound Air Pollution Control Agency ("PSAPCA") shall, upon presentation of credentials, have access to the Hygrade facility during normal working hours to evaluate Hygrade's compliance with this Decree.

IV. COMPLIANCE PROGRAM

Emissions from Hygrade's Tacoma facility Gladd smokehouses shall not exceed the applicable emissions limitations set forth in WAC-173-400-040(1). In addition, Hygrade shall ensure compliance with WAC-173-400-040(1) by complying with the schedule set forth in the Appendix concerning Hygrade's conversion of its' Gladd smokehouses to a liquid smoke process. By entering into this Consent Decree, Hygrade does not jeopardize or release its right to utilize processes other than liquid smoke in its bacon smoking process; including, but not limited to, natural smoke, as long as smoke emissions, if any are in compliance with all applicable local, state, and federal air emission regulations, including but not limited to WAC-173-400-040(1). Hygrade agrees to notify the Puget Sound Air Pollution Control Authority (PSAPCA) in writing of its intent to change the process no less than thirty (30) days prior to instituting such change.

V. REPORTING ADDRESSES

Unless otherwise specified, all notifications, submittals, and reports required by this Consent Decree and its Appendix shall be made to the Chief, Air Programs Branch, Air and Toxics Division, EPA, Region 10, 1200 Sixth Avenue, Seattle, Washington 98101. ++EP++

Page 4 VI. PENALTIES

1) The United States recognizes that Hygrade has agreed to pay to the United States a noncompliance penalty pursuant to Section 120 of the Act, 42 U.S.C. Section 7420, which arises from the same subject matter as this litigation in the amount of Eight Thousand Five Hundred Dollars ($8,500); and 2) in settlement of this action brought pursuant to Section 113 of the Act, 42 U.S.C. Section 7413, the United States and Hygrade agree that Hygrade shall pay to the United States within thirty (30) days after entry of judgment a civil penalty in the amount of Five Thousand Three Hundred Dollars ($5,300) for alleged past opacity violations of the Act.

VII. VIOLATION & STIPULATED PENALTIES

The United States and Hygrade agree that each failure by Hygrade to comply with the schedules, emission standards, notification and other requirements set out in this Decree and its Appendix shall constitute a separate violation of this Decree. Hygrade and the United States agree that Hygrade shall pay Five Thousand Dollars ($5,000) for each future violation of the Washington SIP resulting from emissions of either of the Gladd smokehouses occurring during the life of this Decree. Further, Hygrade agrees to pay Five Thousand Dollars ($5,000) for failure to meet any of the compliance schedule deadlines set forth in the Appendix. For purposes of this Paragraph, each day of violation of the Washington SIP shall constitute a separate violation; each day of failure to meet a date of the compliance schedule shall constitute a separate violation. ++EP++

Page 5 VIII. PAYMENTS

The provisions of this paragraph shall not be construed to limit any other remedies, including but not limited to, institution of civil or criminal proceedings for contempt, available to Plaintiff for violations of this consent decree or any other provisions of law. All payments required to be made pursuant to Paragraph VI(2), and Paragraph VII, if any, shall be by check made payable to the Treasurer of the United States, delivered to the United States Attorney for the Western District of Washington.

IX. FORCE MAJEURE

If any event occurs which causes delay in the achievement of the requirements of this Decree, or may prevent timely compliance therewith, the defendant shall promptly notify EPA orally and shall, within seven (7) days of oral notification to the agency, notify EPA in writing of the delay or anticipated delay, describing in detail the precise cause or causes of the delay, the measures taken and to be taken by the defendant to prevent or minimize the delay, and the timetable by which those measures will be implemented. The defendant will adopt all reasonable measures to avoid or minimize any such delay.

If Hygrade demonstrates to the satisfaction of the U.S. EPA that the delay or anticipated delay has been or will be caused by circumstances beyond the control and despite the due diligence of Hygrade, the time for performance hereunder shall be extended for a period equal to the delay resulting from such circumstances. Extension of time for any one date of the compliance schedule shall not affect the other dates. In the event the parties cannot agree, defendant shall submit the matter to this Court for resolution. ++EP++

Page 6

The burden of proving that any delay is caused by circumstances beyond the control of defendant shall rest with defendant. Costs associated with implementing the measures required by this Decree or changed economic circumstances do not constitute circumstances beyond the control of defendant for purposes of this paragraph. Failure by defendant to provide notice as set forth above shall render this paragraph void and of no effect as to the particular incident involved.

X. CONFIDENTIALITY

Hygrade may, if it desires, assert a business confidentiality claim covering part or all of the information requested by this Decree to the extent permitted by 40 C.F.R. Part 2, Subpart B.

XI. TERMINATION OF DECREE

Jurisdiction is retained by this Court to issue such further orders, directions or relief as may be appropriate to interpret, construe, enforce or otherwise effectuate the purposes of this Decree or any provisions hereof. After Hygrade's final conversion of the Gladd smokehouses to a liquid smoke process and Hygrade's final shutdown of the wood smoke process of the Gladd smokehouses, Hygrade shall certify in writing to EPA that the conversion and shutdown have occurred. This Consent Decree shall terminate upon EPA's written certification to this Court that the conversion and shutdown have occurred and that Hygrade has made full payment of the civil penalty. Hygrade shall have no further obligations under this Consent Decree after its termination as described above, provided that nothing herein shall preclude Plaintiff from seeking appropriate relief from the Court for any violation of this Order occurring prior to termination of the Order./*/

((/*/ If for any reason, Hygrade needs to switch back to a natural smoke operation, as in COMPLIANCE Section IV. above, the Company agrees to comply with the applicable smoke emission regulations.)) ++EP++

Page 7 XII. RELATIONSHIP TO OTHER LAWS

This Decree does not alter or affect defendant's responsibility to comply with any requirement of the Washington State Implementation Plan ("SIP") as currently constituted or as it may be revised, including any applicable emission limitation set forth in such existing or revised plan, or any rights plaintiff may have with respect to violations thereof. This Decree further does not affect defendant's obligation to comply with any other State, Federal or local law or regulation, or any order pursuant to Section 303 of the Act, 42 U.S.C. Section 7603.

XIII. FUTURE REVISIONS TO SIP

In the event EPA approves a revision to the SIP which modifies any emission limitation applicable to defendant's Gladd smokehouses, either party to this Decree may petition the Court for a modification of this Decree.

XIV. CONDITIONAL CONSENT OF UNITED STATES

The consent of the United States is conditional as set forth in 28 C.F.R. Section 50.7. In the event the conditional consent of the United States is withdrawn or this Consent Decree is not entered, this Consent Decree shall be null and void and shall not be admissible as evidence upon trial of this action. ++EP++

Page 8

The United States and Hygrade consent to this Decree by their duly authorized representatives as follows:

FOR: THE UNITED STATES OF AMERICA

/s/ ILLEGIBLE SIGNATURE

F. HENRY HABICHT II

Assistant Attorney General

Land and Natural Resources Division

Department of Justice

Washington, D.C. 20530

Dated 6/15/85

/s/ Courtney M. Price

COURTNEY M. PRICE

Richard H Mays

Asst. Administrator for Enforcement and

Compliance Monitoring

U.S. Environmental Protection Agency

401 M Street, S. W.

Washington, D.C. 20460

Dated 6/7/85

/s/ Jackson L. Fox

JACKSON L. FOX

Assistant United States Attorney

Western District of Washington

800 Fifth Avenue Plaza

Seattle, WA 98104

Dated 6/21/85

/s/ David Dabroski

DAVID DABROSKI

Assistant Regional Counsel

U.S. Environmental Protection Agency

1200 Sixth Avenue, M/S 613

Seattle, WA 98101

Dated 5.10.85 ++EP++

Page 9

FOR: HYGRADE FOOD PRODUCTS CORPORATION

/s/ SIGNATURE ILLEGIBLE

Frank L. Kirk

Vice President, General Manager

Dated May 7, 1985

DATED AND ENTERED this 10th day of September, 1985.

/s/ Jack E. Turner

UNITED STATES DISTRICT JUDGE ++EP++

APP A-1 APPENDIX

SCHEDULE FOR HYGRADE'S CONVERSION OF THE GLADD SMOKEHOUSES TO A LIQUID PROCESS

DATE MILESTONE IN PROGRESS OBTAIN BIDS FROM CONTRACTORS AND CONSTRUCTION MATERIALS ORDERED FEBRUARY 28, 1985 CONSTRUCTION AND INSTALLATION OF LIQUID SMOKEHOUSE CABINETS MARCH 30, 1985 INITIAL CONSTRUCTION OF LIQUID SMOKE PROCEDURE COMPLETE AND TESTING UNDER WAY JUNE 22, 1985 OR BEFORE FINAL CONVERSION OF THE GLADD SMOKEHOUSES TO A LIQUID SMOKE PROCESS, HYGRADE'S FINAL SHUTDOWN OF THE WOOD SMOKE PROCESS OF THE GLADD SMOKEHOUSES, AND HYGRADE'S CERTIFICATION IN WRITING TO EPA THAT THESE TWO EVENTS HAVE OCCURRED. ++EP++

VR VAN DYK

DOC 01 OF 01

CONSENT DECREE

10-84-C004

CAA

METAL

19840419

19840419

WAD078204021

INLAND FOUNDRY CO INC

MEAD, WA

82-979(C-RJM)

10

CONSENT DECREE, USA V. V.R. VAN DYK

Page 1

F. HENRY HABICHT, II

Assistant Attorney General

BRUCE J. BERGER, Attorney

Land and Natural Resources Division

Department of Justice

Tenth and Pennsylvania Avenue, Northwest

Washington, D. C. 20530

Telephone: (202) 633-5272

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WASHINGTON

UNITED STATES OF AMERICA,

Plaintiff,

v.

V. R. VAN DYK, individually and

doing business as INLAND FOUNDRY

COMPANY, and INLAND FOUNDRY COMPANY,

INC., a Washington corporation,

Defendants.

Plaintiff, United States of America, instituted this action on behalf of the United States Environmental Protection Agency (EPA) against Defendant V. R. Van Dyk, individually and doing business as Inland Foundry Company (IF), by filing a Complaint on December 17, 1982. The United States filed its First Amended and Supplemental Complaint ("First Amended Complaint") on January 4, 1984. The Complaint and First Amended Complaint sought injunctive relief and civil penalties for alleged violations of the federally enforceable Washington State Implementation Plan including Section 173-400-040(1) of the Washington Administrative Code, which prohibits emissions in excess of 20% opacity for a given period of time. The Complaint and First Amended Complaint also sought to require Defendant V. R. Van Dyk to supply information requested by the EPA pursuant to Section 114(a)(2) of the Clean Air Act, 42 U.S.C. Section 7414(a)(2). ++EP++

Page 2

V. R. Van Dyk denied and continues to deny any violation of laws or regulations.

The United States and V. R. Van Dyk, doing business as Inland Foundry Company, hereby stipulate and agree that the settlement of this action insofar as it concerns V. R. Van Dyk without further litigation is in the public interest and that entry of this Consent Decree is the most appropriate means of resolving this matter.

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

I. JURISDICTION

This Court has jurisdiction over the subject matter herein pursuant to 42 U.S.C. Section 7413, and 28 U.S.C. Section 1345 and the parties hereto for the purposes of entering this order. The Complaint and First Amended Complaint state claims upon which relief may be granted against Defendant Van Dyk under the Clean Air Act, 42 U.S.C. Section 7401, et seq.

II. APPLICABILITY

The provisions of this Consent Decree shall apply to and be binding upon the United States and V. R. Van Dyk, individually, and d/b/a Inland Foundry Company (hereinafter "V. R. Van Dyk"). The United States and V. R. Van Dyk agree that the conditions and obligations set forth in this Decree are to be complied with, and that each failure to do so shall be deemed a violation of this Decree that shall be enforceable within this action. ++EP++

Page 3 III. PROHIBITION FROM FUTURE OPERATIONS

The United States and V. R. Van Dyk agree that V. R. Van Dyk shall be, and he is hereby, prohibited from conducting, managing or directing any future operation of a cupola furnace and is further prohibited from allowing or causing any emissions in violation of applicable law from any cupola furnace. V. R. Van Dyk is also prohibited from owning any legal or equitable interest in any entity which operates a cupola furnace except that V. R. Van Dyk's retention of a security interest in the assets formerly owned by him d/b/a Inland Foundry Company in Mead, Washington shall not be subject to this prohibition.

IV. CIVIL PENALTIES

In compromise and settlement of the United States' civil claims, based on Notices of Violation, V. R. Van Dyk and the United States agree that total penalties payable to government enforcement agencies in the amount of Twelve Thousand Five Hundred Dollars ($12,500.00) are appropriate as follows: (1) The United States recognizes that V. R. Van Dyk, d/b/a Inland Foundry Company, has agreed to compromise and settle claims and counterclaims with the Spokane County Air Pollution Control Agency (SCAPCA) which arise from the same subject matter as this litigation for the sum of Six Thousand Five Hundred Dollars ($6,500.00) and other valuable consideration; and (2) in recognition of and contingent upon this related settlement, the United States and V. R. Van Dyk agree that V. R. Van Dyk shall pay the Treasurer of the United States the sum of Six Thousand Dollars ($6,000.00) in settlement of this litigation by cashier's check or certified funds, delivered to the Chief, Air Programs Branch, Air and Waste Management Division, EPA Region 10, 1200 Sixth Avenue, Seattle, Washington 98101, within five (5) days after entry of this Decree by the Court. The United States shall promptly file a total or partial satisfaction of judgment for this Consent Decree as and when its terms are complied with. ++EP++

Page 4 V. EFFECT ON OTHER CLAIMS

This Consent Decree does not address or resolve any claims against Inland Foundry Company, Inc. or any claims against V. R. Van Dyk other than those alleged in the Complaint and First Amended Complaint herein which arise under the Clean Air Act.

VI. CONDITIONAL CONSENT OF UNITED STATES

The Consent of the United States of America is conditional as set forth in 28 C.F.R. Section 50.7. In the event the conditional consent of the United States is withdrawn or this Consent Decree is not entered, this Consent Decree shall be null and void and shall not be admissible as evidence upon trial of this action.

For Plaintiff, UNITED STATES OF AMERICA

By/s/ F H Habicht

F. HENRY HABICHT, II

Assistant Attorney General

Land and Natural Resources Division

United States Department of Justice

By/s/ Bruce J Berger

BRUCE J. BERGER, Attorney

Land and Natural Resources Division

Department of Justice

By/s/ Richard H. Marp for Courtney M. Price

COURTNEY M. PRICE

Assistant Administrator

Office of Enforcement and Compliance Monitoring

U.S. Environmental Protection Agency ++EP++

Page 5

By/s/ James Merrill

JAMES L. MERRILL

Assistant Regional Counsel

U. S. Environmental Protection Agency

Dated Dec 23, 1983

For Defendant V. R. Van Dyk

By/s/ Michael J. Casey

MICHAEL J. CASEY

Reed & Giesa, P.S.

222 North Wall Street

Spokane, Washington 99201

Dated Dec 20, 1983

Pursuant to F.R.C.P. 54(b), the Court finds that there is no reason for delay of the entry of final judgment on the claims described herein and, therefore, ORDERS and directs that, pursuant to F.R.C.P. 58, the Clerk of this Court shall immediately enter this final judgment on the journal of the Court.

IT IS SO ORDERED this 19th day of April, 1984.

BY THE COURT:

/s/ SIGNATURE ILLEGIBLE

UNITED STATES DISTRICT JUDGE

Entered in Civil Docket on 4/19/84 ++EP++

^Z

VR VAN DYK/INLAND FOUNDRY

DOC 01 OF 01

CONSENT JUDGMENT

10-85-C008

CAA

METAL

19850930

WAD078204021

INLAND FOUNDRY

MEAD, WA

82-979(C-RJM)

10

CONSENT JUDGMENT, USA V. V.R. VAN DYK., INLAND FOUNDRY COMPANY AND INLAND FOUNDRY COMPANY INC.

Page 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON

UNITED STATES OF AMERICA,

Plaintiff,

vs.

V. R. VAN DYK, individually

and doing business as

INLAND FOUNDRY COMPANY; and

INLAND FOUNDRY COMPANY, INC.,

Defendants.

WHEREAS, the United States of America, on behalf of the Environmental Protection Agency ("EPA"), on January 5, 1984, filed a First Amended and Supplemental Complaint ("the Amended Complaint") against the Inland Foundry Company, Inc., ("IFCO"), et al., in the case of United States of America v. V. R. Van Dyk, et al., No. C-82-979-RJM (E.D. Wash.), alleging violations of the Washington State Implementation Plan (Washington SIP) adopted pursuant to the Clean Air Act. 42 U.S.C. Section 7401 et seq. ("Act"); and

WHEREAS, IFCO is a Washington corporation, operating a grey iron foundry in Mead, Washington; and

WHEREAS, IFCO answered the Amended Complaint and has denied the averments thereof and all liability of any nature whatsoever; and ++EP++

Page 2

WHEREAS, the United States and IFCO have agreed that settlement of this matter without further litigation is in the public interest and that entry of this Consent Judgment is the most appropriate means of resolving this matter in full settlement for alleged past violations of and noncompliance with applicable Washington SIP limitations caused by emissions from IFCO's cupola furnace and baghouse;

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

1 JURISDICTION

The Court has jurisdiction over the subject matter herein pursuant to 42 U.S.C. Section 7413 and 28 U.S.C. Section 1345 and the parties hereto for the purposes of entering this Consent Judgment.

2 SCOPE OF APPLICABILITY

The provisions of this Judgment shall apply to and be binding upon the United states and IFCO, their officers, officials, directors, agents, servants, employees, successors and assigns.

3 CIVIL PENALTY FOR ALLEGED PAST VIOLATIONS

For alleged violations of and noncompliance with applicable Washington SIP limitations caused by emissions from IFCO's cupola furnace and baghouse and which were alleged in the Amended Complaint, IFCO shall pay, without the