**Exhibit 10.19**

 

**STATE OF MINNESOTA**

**MINNESOTA POLLUTION CONTROL AGENCY**

 
| **IN THE MATTER OF:** | **American Crystal** | ** ** | **STIPULATION AGREEMENT** |
|-----------------------|----------------------|------------|---------------------------|
|                  | **Sugar Company**    |       |                      |

 

**Part 1. PARTIES.** This Stipulation Agreement (“Agreement”)applies to and is binding upon the following parties:

 

a.     American Crystal SugarCompany (“Regulated Party”); and

 

b.     The Minnesota PollutionControl Agency (“MPCA”).

 

Unlessspecified otherwise in this Agreement, where this Agreement identifies actionsto be taken by the MPCA, the Commissioner or the Commissioner’s designees shallact on the MPCA’s behalf.

 

**Part 2. PURPOSE AND SCOPE OF STIPULATION AGREEMENT.** The purpose of this Agreement is to resolvethe alleged violations set out in Part 6 of this Agreement by specifyingactions the Regulated Party agrees to undertake. By entering into thisAgreement, the Regulated Party is settling a disputed matter between itself andthe MPCA and does not admit that the alleged violations set out in Part 6of this Agreement occurred. However, the Regulated Party agrees that the MPCAmay rely upon the alleged violations set out in Part 6 as provided in Part 11of this Agreement. Except for the purposes of implementing and enforcing thisAgreement, nothing in this Agreement constitutes an admission by either Party,or creates rights, substantive or procedural, that can be asserted or enforced with respect to anyclaim of or legal action brought by a person who is not a party to this Agreement.

 

**Part 3. AUTHORITY.** This Agreement is entered under theauthority vested in the MPCA by Minnesota Statutes Chapters 115 and 116.

 

**Part 4. DEFINITIONS.** Unless otherwise explicitly stated, thedefinitions in Minnesota Statutes Chapters 115, 115A, 115B, 115C, 116, 116B andin Minnesota Rules Chapters 7000 to 7151 apply, as appropriate, to theterms used in this Agreement.

 

1

----

 

**Part 5. BACKGROUND.** The following is the background of thisAgreement:

 

a.     Minn. R. 7009.0080establishes a hydrogen sulfide (H2S)ambient air standard of 0.05 parts per million (ppm) measured as a half-houraverage which is not to be exceeded more than two times per year.

 

b.     Minn. R. 7009.0080 alsoestablishes a H2S ambient air standard of 0.03 ppm measuredas a half-hour average which is not to be exceeded more than two times in anyfive consecutive days.

 

c.     The Regulated Party is aMinnesota corporation and operates three sugar beet processing facilitieslocated in Moorhead, E. Grand Forks, and Crookston, Minnesota.

 

d.On July 1, 2003, Air Emission Permit No. 11900001-002 was issued tothe Regulated Party for operation of the sugar beet processing facility locatedin Crookston, Minnesota (Crookston Facility).

 

e.     On March 30, 2005, AirEmission Permit No. 11900002-004 was issued to the Regulated Party foroperation of the sugar beet processing facility located in E. Grand Forks,Minnesota (E. Grand Forks Facility).

 

f.      On March 10, 2005,Air Emission Permit No. 02700001-007 was issued to the Regulated Party foroperation of the sugar beet processing facility located in Moorhead, Minnesota(Moorhead Facility).

 

g.     On June 6, 2006, AirEmission Permit No. 02700001-009 was issued to the Regulated Party foroperation of the Moorhead Facility. Air Emission Permit No. 02700001-009amended and replaced Air Emission Permit No. 02700001-007 for the MoorheadFacility. Permit Action No. 02700001-008 was initiated on September 12,2005, but was dropped at the request of the Regulated Party resulting in abreak in the sequence of issued permit numbers.

 

h.     The permits require theRegulated Party to operate an ambient air H2Smonitoring network at each facility to measure the ambient concentration of H2S at the property line of each facility from April 1 through October 31annually.

 

i.      The data the RegulatedParty collects is due to the MPCA by November 30 of each year.

 

2

----

 

j.      The Regulated Partycollected H2S data from the ambient air monitoringnetwork at each facility from: April 1, 2005, through October 31,2005, April 1, 2006 through October 31, 2006; and April 1, 2007,through October 31, 2007.

 

k.     The following tablessummarize the readings above the standards from the 2005, 2006 and 2007monitoring periods:

 

**Crookston H****2****S Violations of 30 ppbStandard 2005**

 
| ** **                | ** ** | **No. of Readings** | ** ** | **Avg. of Readings**   | ** ** |
|---------------------------|------------|-------------------------------|------------|----------------------------------|------------|
| **Dates**                 | ** ** | **in Violation**         | ** ** | **in Violation (ppb)** | ** ** |
| 10/14/05 –  10/17/05 |       | 5                             |       | 34                               |       |

 

**Crookston H****2****S Violations of 50 ppbStandard 2005**

 
| **Dates** | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-----------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 8/26/05   |       | 1                                                |       | 58                                                           |       |

 

**Moorhead H****2****S Violations of 30 ppbStandard 2005**

 
| ** **              | ** ** | **No. of Readings** | ** ** | **Avg. of Readings**   | ** ** |
|-------------------------|------------|-------------------------------|------------|----------------------------------|------------|
| **Dates**               | ** ** | **in Violation**         | ** ** | **in Violation (ppb)** | ** ** |
| 7/23/05 –  7/26/05 |       | 9                             |       | 42                               |       |

 

**Moorhead H****2****S Violations of 50 ppbStandard 2005**

 
| ** **              | ** ** | **No. of Readings** | ** ** | **Avg. of Readings**   | ** ** |
|-------------------------|------------|-------------------------------|------------|----------------------------------|------------|
| **Dates**               | ** ** | **in Violation**         | ** ** | **in Violation (ppb)** | ** ** |
| 7/24/05                 |       | 2                             |       | 67                               |       |
| 7/25/05 –  7/26/05 |       | 4                             |       | 57                               |       |

 

**E. Grand Forks H****2****S Violations of 30 ppbStandard 2005**

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/3/05 –  4/6/05   |       | 4                                                |       | 35                                                           |       |
| 4/11/05 –  4/12/05 |       | 7                                                |       | 40                                                           |       |
| 5/4/05 –  5/9/05   |       | 18                                               |       | 39                                                           |       |
| 5/9/05 –  5/14/05  |       | 25                                               |       | 39                                                           |       |
| 5/16/05 –  5/18/05 |       | 14                                               |       | 38                                                           |       |
| 5/21/06 –  5/25/05 |       | 17                                               |       | 36                                                           |       |
| 6/10/05 –  6/11/05 |       | 2                                                |       | 42                                                           |       |
| 6/15/05 –  6/20/05 |       | 4                                                |       | 37                                                           |       |
| 6/29/05 –  7/1/05  |       | 15                                               |       | 39                                                           |       |
| 7/21/05 –  7/23/05 |       | 3                                                |       | 37                                                           |       |

 

3

----

 

**E. Grand Forks H****2****S Violations of 50 ppbStandard 2005**

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 5/6/05 –  5/8/05   |       | 9                                                |       | 64                                                           |       |
| 5/9/05                  |       | 2                                                |       | 52                                                           |       |
| 5/16/05 –  5/19/05 |       | 25                                               |       | 69                                                           |       |
| 5/21/05                 |       | 1                                                |       | 69                                                           |       |
| 5/23/05                 |       | 2                                                |       | 56                                                           |       |
| 6/10/05                 |       | 2                                                |       | 66                                                           |       |
| 6/15/05 –  6/16/05 |       | 2                                                |       | 60                                                           |       |
| 6/19/05                 |       | 2                                                |       | 68                                                           |       |
| 6/29/05                 |       | 9                                                |       | 67                                                           |       |
| 7/21/05                 |       | 3                                                |       | 64                                                           |       |
| 8/9/05                  |       | 1                                                |       | 59                                                           |       |
| 10/31/05                |       | 1                                                |       | 71                                                           |       |

 
| **Crookston H****2S Violations of  30 ppb Standard 2006** |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|

 
| **Dates**             | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-----------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 6/4/06 –  6/6/06 |       | 2                                                |       | 39                                                           |       |
| 9/4/06 –  9/7/06 |       | 5                                                |       | 39                                                           |       |

 
| **Crookston H****2S Violations of  50 ppb Standard 2006** |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|

 
| **Dates** | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-----------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 9/5/06    |       | 1                                                |       | 52                                                           |       |
| 9/6/06    |       | 1                                                |       | 57                                                           |       |

 
| **Moorhead H****2S Violations of  30 ppb Standard 2006** |   |   |   |
|----------------------------------------------------------|--------|--------|--------|

 
| **Dates** | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-----------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 6/2/06    |       | 1                                                |       | 35                                                           |       |
| 8/29/06   |       | 1                                                |       | 35                                                           |       |

 
| **E. Grand Forks H****2S Violations of  30 ppb Standard 2006** |   |   |   |
|----------------------------------------------------------------|--------|--------|--------|

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/10/06 –  4/14/06 |       | 7                                                |       | 36                                                           |       |
| 4/16/06 –  4/21/06 |       | 15                                               |       | 41                                                           |       |
| 4/28/06 –  5/1/06  |       | 25                                               |       | 42                                                           |       |
| 5/4/06 –  5/7/06   |       | 4                                                |       | 36                                                           |       |
| 5/9/06 –  5/10/06  |       | 14                                               |       | 41                                                           |       |
| 5/15/06 –  5/20/06 |       | 12                                               |       | 39                                                           |       |
| 5/23/06 –  5/26/06 |       | 14                                               |       | 41                                                           |       |
| 5/28/06 –  6/1/06  |       | 11                                               |       | 38                                                           |       |
| 6/2/06 –  6/7/06   |       | 17                                               |       | 39                                                           |       |
| 6/9/06 –  6/14/06  |       | 16                                               |       | 37                                                           |       |
| 6/14/06 –  6/19/06 |       | 27                                               |       | 39                                                           |       |
| 6/19/06 –  6/24/06 |       | 13                                               |       | 39                                                           |       |
| 6/25/06 –  6/28/06 |       | 5                                                |       | 46                                                           |       |
| 6/30/06                 |       | 1                                                |       | 31                                                           |       |

 

4

----

 
| **E. Grand Forks H****2S Violations of  30 ppb Standard 2006 continued** |   |
|--------------------------------------------------------------------------|--------|

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 8/19/06 –  8/20/06 |       | 2                                                |       | 45                                                           |       |
| 8/24/06 –  8/29/06 |       | 5                                                |       | 39                                                           |       |
| 8/29/06 –  9/2/06  |       | 4                                                |       | 42                                                           |       |
| 9/9/06 –  9/13/06  |       | 3                                                |       | 45                                                           |       |

 
| **E. Grand Forks H****2S Violations of  50 ppb Standard 2006** |   |
|----------------------------------------------------------------|--------|

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/13/06                 |       | 7                                                |       | 74                                                           |       |
| 4/16/06                 |       | 8                                                |       | 65                                                           |       |
| 4/18/06 –  4/20/06 |       | 24                                               |       | 72                                                           |       |
| 4/22/06                 |       | 1                                                |       | 60                                                           |       |
| 4/26/06                 |       | 1                                                |       | 55                                                           |       |
| 4/28/06 –  4/29/06 |       | 23                                               |       | 73                                                           |       |
| 5/1/06                  |       | 6                                                |       | 74                                                           |       |
| 5/6/06                  |       | 1                                                |       | 58                                                           |       |
| 5/7/06                  |       | 2                                                |       | 58                                                           |       |
| 5/10/06                 |       | 2                                                |       | 58                                                           |       |
| 5/18/06 –  5/19/06 |       | 5                                                |       | 81                                                           |       |
| 5/24/06 –  5/28/06 |       | 24                                               |       | 69                                                           |       |
| 5/31/06 –  6/3/06  |       | 23                                               |       | 73                                                           |       |
| 6/5/06                  |       | 2                                                |       | 53                                                           |       |
| 6/6/06 -  6/7/06        |       | 8                                                |       | 80                                                           |       |
| 6/9/06 –  6/11/06  |       | 41                                               |       | 82                                                           |       |
| 6/12/06 –  6/13/06 |       | 5                                                |       | 56                                                           |       |
| 6/14/06 –  6/17/06 |       | 48                                               |       | 80                                                           |       |
| 6/19/06 –  6/21/06 |       | 21                                               |       | 73                                                           |       |
| 6/23/06 –  6/25/06 |       | 18                                               |       | 72                                                           |       |
| 6/27/06 -  6/28/06      |       | 15                                               |       | 74                                                           |       |
| 6/30/06                 |       | 3                                                |       | 68                                                           |       |
| 8/18/06 –  8/20/06 |       | 22                                               |       | 80                                                           |       |
| 8/22/06                 |       | 2                                                |       | 63                                                           |       |
| 8/24/06                 |       | 1                                                |       | 64                                                           |       |
| 8/26/06                 |       | 2                                                |       | 74                                                           |       |
| 8/29/06                 |       | 13                                               |       | 87                                                           |       |
| 9/2/06                  |       | 2                                                |       | 56                                                           |       |

 
| **Crookston  H****2S  Violations of 30 ppb Standard 2007**  |   |
|------------------------------------------------------------------|--------|

 
| **Dates**               | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|-------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/29/07                 |       | 2                                                |       | 31                                                           |       |
| 7/3/07 -  7/7/07        |       | 12                                               |       | 40                                                           |       |
| 8/14/07 –  8/16/07 |       | 12                                               |       | 41                                                           |       |
| 8/23/07 –  8/28/07 |       | 2                                                |       | 44                                                           |       |
| 8/29/07 –  9/2/07  |       | 1                                                |       | 34                                                           |       |

 

5

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| **Crookston H****2S Violations of  50 ppb Standard 2007** |   |
|-----------------------------------------------------------|--------|

 
| **Dates**              | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 7/4/07 – 7/5/07   |       | 8                                                |       | 78                                                           |       |
| 7/7/07                 |       | 2                                                |       | 66                                                           |       |
| 7/22/07                |       | 1                                                |       | 53                                                           |       |
| 8/15/07 – 8/16/07 |       | 4                                                |       | 58                                                           |       |
| 8/25/07                |       | 1                                                |       | 72                                                           |       |
| 8/28/07 – 8/29/07 |       | 4                                                |       | 67                                                           |       |

 
| **Moorhead H****2S Violations of  30 ppb Standard 2007** |   |
|----------------------------------------------------------|--------|

 
| **Dates**              | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/27/07 – 6/2/07  |       | 8                                                |       | 39                                                           |       |
| 6/2/07 – 6/6/07   |       | 21                                               |       | 37                                                           |       |
| 6/13/07 – 6/18/07 |       | 15                                               |       | 38                                                           |       |
| 6/19/07 – 6/22/07 |       | 2                                                |       | 31                                                           |       |
| 8/12/07 – 8/13/07 |       | 2                                                |       | 39                                                           |       |
| 8/18/07 – 8/20/07 |       | 4                                                |       | 38                                                           |       |
| 8/31/07 – 9/3/07  |       | 1                                                |       | 34                                                           |       |

 
| **Moorhead H****2S Violations of  50 ppb Standard 2007** |   |
|----------------------------------------------------------|--------|

 
| **Dates**              | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 6/1/07 – 6/4/07   |       | 5                                                |       | 61                                                           |       |
| 6/13/07                |       | 1                                                |       | 59                                                           |       |
| 6/14/07                |       | 1                                                |       | 64                                                           |       |
| 6/16/07 – 6/17/07 |       | 11                                               |       | 69                                                           |       |
| 7/23/07                |       | 2                                                |       | 68                                                           |       |
| 8/18/07                |       | 1                                                |       | 71                                                           |       |

 
| **E. Grand Forks H****2S Violations of  30 ppb Standard 2007** |   |
|----------------------------------------------------------------|--------|

 
| **Dates**              | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 4/17/07 – 4/19/07 |       | 6                                                |       | 36                                                           |       |
| 6/13/07 – 6/17/07 |       | 6                                                |       | 45                                                           |       |
| 6/20/07 – 6/25/07 |       | 7                                                |       | 37                                                           |       |
| 6/29/07 – 7/3/07  |       | 7                                                |       | 39                                                           |       |
| 7/6/07 – 7/10/07  |       | 7                                                |       | 35                                                           |       |
| 7/13/07 – 7/18/07 |       | 6                                                |       | 39                                                           |       |
| 7/19/07 – 7/23/07 |       | 7                                                |       | 39                                                           |       |
| 7/27/07 – 7/31/07 |       | 5                                                |       | 41                                                           |       |

 
| **E. Grand Forks H****2S Violations of  50 ppb Standard 2007** |   |
|----------------------------------------------------------------|--------|

 
| **Dates**              | ** ** | **No. of Readings  in Violation** | ** ** | **Avg. of Readings  in Violation (ppb)** | ** ** |
|------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------|------------|
| 6/16/07 – 6/17/07 |       | 5                                                |       | 66                                                           |       |
| 6/29/07 – 7/2/07  |       | 11                                               |       | 61                                                           |       |
| 7/6/07                 |       | 6                                                |       | 74                                                           |       |
| 7/9/07 – 7/10/07  |       | 3                                                |       | 62                                                           |       |
| 7/17/07 – 7/18/07 |       | 5                                                |       | 66                                                           |       |
| 7/27/07                |       | 1                                                |       | 54                                                           |       |

 

6

----

 

1.     Air Emission Permit No. 11900002-005contains an emission limit of 0.25 pounds per hour (lb/hr) for particulatematter with an aerodynamic diameter less than or equal to ten microns (PM10) from the E. Grand Forks Facility’s West Pellet Cooler (EU006).

 

m.    On October 2, and 4,2007, the Regulated Party conducted performance stack testing for EU006 PM10 emissions. The October 2,and 4, 2007, performance test documented the EU006 PM10 emission rate at 0.36 lb/hr. The EU006 PM10 emission rate exceeded the PM10 emission limit by 30 percent.

 

n.     On November 28, and29, 2007, the Regulated Party conducted a retest for EU006 PM10 emissions. The November 28,and 29, 2007, performance test documented the EU006 PM10 emission rate at 0.11 lb/hr.

 

o.     On May 10, 2007, theRegulated Party submitted a minor permit amendment application to modify theSouth Pulp Dryer (EU007) to accept and combust biogas.

 

p.     On January 8, 2008,the MPCA determined that the modification to convert EU007 to combust biogaswould require a major permit amendment.

 

q.     On February 5, 2008,the MPCA conducted a compliance evaluation of the Facility. At the time of theevaluation, the MPCA staff documented that the Regulated Party had alreadyinstalled the piping and valves required to direct biogas to EU007. TheRegulated Party stated that, while the piping and valves had already beeninstalled, no biogas had yet been combusted in EU007.

 

r.      Air Emission Permit No. 027000001-009contains a PM10 emission limit of 5.0 lb/hr and a particulatematter (PM) emission limit of 5.0 lb/hr for the Lime Kiln (EU004) at theMoorhead Factory.

 

s.     On November 27, 2007,the Regulated Party conducted performance stack testing for EU004 PM10 and PM emissions. The November 27,2007, performance test documented the EU004 PM10 emission rate at 8.7 lb/hr and the PM emissionrate at 12.0 lb/hr. The EU004 PM10 emission rate exceeded the PM10 emission limit by 74 percent andthe PM emission rate exceeded the PM limit by 140 percent.

 

7

----

 

t.      On February 6, 14,and 15, 2008, the Regulated Party conducted a retest for EU004 PM10 and PM emissions. The February 6,14, and 15, 2008, performance test documented the EU004 PM10 emission rate at 3.5 lb/hr.

 

**Part 5A.****STATEMENT OF THE REGULATED PARTY****.** The Regulated Party has provided thefollowing statement. The MPCA takes no position on this Statement.

 

TheRegulated Party states the following:

 

TheRegulated Party seeks continually to improve its environmental performance andto become a better neighbor. In this regard, it has made substantialinvestments in money, time, and effort not only to comply with environmentalregulations, but to exceed regulatory requirements and move beyond compliance.

 

Specifically,in accordance with the requirements of a 2003 Stipulation Agreement with theMPCA, the Regulated Party spent a total of $13,716,924 – including $7,272,973in capital investments and $6,443,951 in chemical expenses – in order tocontrol H2S emissions and associated odors at its threeMinnesota facilities.

 

Afterfulfilling the requirements of the 2003 Stipulation Agreement, the RegulatedParty spent almost two and a half times that amount – including $18,918,688 incapital investments and $14,305,004 in chemical expenses, for a total of$33,223,692 – in voluntarily undertaking further steps to control H2S.

 

Theseadditional steps included, but were not limited to:

 

a.     The installation of a pre-acidification wastewater treatmentunit at the E. Grand Forks facility.

 

b.              The installation of a permeable pond coverover the high-strength wastewater pond at the Moorhead facility.

 

c.               The installation of mini-clarifiers on eachmud press at the E. Grand Forks and Moorhead facilities.

 

d.              Improved pulp press performance at all threefacilities.

 

e.               Improved management of beet pile runoff atall three facilities.

 

f.                 Improved by-products management.

 

8

----

 

g.              Improved beet storage management at all threefacilities through the use of ice mats and insulation membranes.

 

h.              The use of odor neutralizers at all threefacilities.

 

Inaddition, the Regulated Party created an internal Odor Control Task Force toidentify and evaluate additional potential measures to improve performance withrespect to H2S, including, but not limited to, measures toreduce sources of wastewater generation, measures to increase wastewatertreatment efficiency, and measures to improve wastewater storage.

 

TheCapital Project Completion Dates set forth in the 2008 H2S Management Strategies are based on the assumption that the MPCA willreview and approve all necessary submittals within 60 days and that allrequired permits for a capital project have been identified.

 

**Part 6. ALLEGED VIOLATIONS.** The MPCA alleges that the Regulated Partyhas violated the following requirements of statute, rule and/or permitcondition:

 

**a.**     **Minn. R.7009.0080 STATE AMBIENT AIR QUALITY STANDARDS.**

** **

The following table contains the state ambient airquality standards.

 
| **Pollutant/**  | ** ** | ** **      | ** ** | ** **    | ** ** | ** **            |
|-----------------|------------|-----------------|------------|---------------|------------|-----------------------|
| **Air**         | ** ** | **Primary**     | ** ** | **Secondary** | ** ** | ** **            |
| **Contaminant** | ** ** | **Standard**    | ** ** | **Standard**  | ** ** | **Remarks**           |
| Hydrogen        |       | 0.05  ppm by    |       |          |       | 1/2  hour average not |
| Sulfide         |       | volume  (70.0   |       |          |       | to  be exceeded over  |
|            |       | micrograms  per |       |          |       | 2  times per year     |
|            |       | cubic  meter)   |       |          |       |                  |
|            |       |            |       |          |       |                  |
|            |       | 0.03  ppm by    |       |          |       | 1/2  hour average not |
|            |       | volume  (42.0   |       |          |       | to  be exceeded over  |
|            |       | micrograms  per |       |          |       | 2  times in any 5     |
|            |       | cubic  meter)   |       |          |       | consecutive  days     |

 

**Crookston Facility**

 

Duringthe period of April 1, 2005, through October 31, 2005, the Crookstonmonitoring network recorded exceedance events which demonstrated fiveviolations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2006, through October 31, 2006, the Crookstonmonitoring network recorded exceedance events which demonstrated sevenviolations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

9

----

 

Duringthe period of April 1, 2007, through October 31, 2007, the Crookstonmonitoring network recorded exceedance events which demonstrated 29 violationsof the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2005, through October 31, 2005, the Crookstonmonitoring network recorded an exceedance event which demonstrated oneviolation of the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2006, through October 31, 2006, the Crookstonmonitoring network recorded exceedance events which demonstrated two violationsof the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2007, through October 31, 2007, the Crookstonmonitoring network recorded exceedance events which demonstrated 20 violationsof the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

**Moorhead Facility**

 

Duringthe period of April 1, 2005, through October 31, 2005, the Moorheadmonitoring network recorded exceedance events which demonstrated nineviolations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2006, through October 31, 2006, the Moorheadmonitoring network recorded exceedance events which demonstrated two violationsof the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2007, through October 31, 2007, the Moorheadmonitoring network recorded exceedance events which demonstrated fifty-53violations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2005, through October 31, 2005, the Moorheadmonitoring network recorded exceedance events which demonstrated six violationsof the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1,2007, through October 31, 2007, the Moorhead monitoring network recorded exceedance events whichdemonstrated 21 violations of the 0.05 ppm standard contained in Minn. R.7009.0080.

 

**E. Grand Forks Facility**

 

Duringthe period of April 1, 2005, through October 31, 2005, the E. GrandForks monitoring network recorded exceedance events which demonstrated 109violations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

During the period of April 1,2006, through October 31, 2006, the E. Grand Forks monitoring networkrecorded exceedance events which demonstrated 195 violations of the 0.03 ppmstandard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2007, through October 31, 2007, the E. GrandForks monitoring network recorded exceedance events which demonstrated 53violations of the 0.03 ppm standard contained in Minn. R. 7009.0080.

 

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Duringthe period of April 1, 2005, through October 31, 2005, the E. GrandForks monitoring network recorded exceedance events which demonstrated 59violations of the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2006, through October 31, 2006, the E. GrandForks monitoring network recorded exceedance events which demonstrated 330violations of the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

Duringthe period of April 1, 2007, through October 31, 2007, the E. GrandForks monitoring network recorded exceedance events which demonstrated 31violations of the 0.05 ppm standard contained in Minn. R. 7009.0080.

 

**b.****              ****Air Emission Permit No. 11900002****-****005**

** **

Subject Item: EU006 Pellet Cooler

 
| **What to  do**                                                                                              | ** ** | **Why  to do it**                                              |
|--------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------|
| Particulate  matter < 10 microns: less than or equal to 0.25 lbs/hour for each  stack (SV 006 and SV 007) |       | Title  I condition: 40 CFR § 52.21(k); Minn. R. 7007.3000 |

 

OnOctober 2, and 4, 2007, the Regulated Party conducted performance stacktesting for EU006 PMl0 emissions. The October 2, and 4, 2007,performance test documented the EU006 PM10 emission rate at 0.36 lb/hr. The EU006 PM10 emission rate exceeded thepermitted PMl0 emissionlimit by 30 percent.

 

**c.****              ****Minn. R. 7007.0150 PERMITREQUIRED.**

 

Subpart1. Prohibition. No person may construct, modify, reconstruct, or operate anemissions unit, emission facility, or stationary source except in compliancewith an air emission permit from the agency. Exceptions to the requirement toobtain a permit are located in part 7007.0300. Exceptions to the requirement toobtain a permit amendment are located in parts 7007.1250and 7007.1350.A person violates this subpart when the person begins actual construction on anew source, reconstruction, or modification prior to obtaining the permit oramendment, except as allowed in parts 7007.0750, subpart 7, 7007.1450, subpart7, and 7007.1500, subpart 3a.

 

**Minn. R. 7007.1500 MAJOR PERMIT AMENDMENTS.**

 

Subpart1. Major permit amendment required. A “major permit amendment” is required forany change to permit conditions or any modification at a permitted stationarysource that is not allowed under parts 7007.1250 and 7007.1350 and for which anamendment cannot be obtained under the administrative permit amendmentprovisions of part 7007.1400, or the minor or moderate permit amendmentprovisions of part 7007.1450. The following always require major permitamendments:

 

...

 

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B.**   **any amendment to establish or amend a permitcondition that is required to be based on a case-by-case determination of anemission limitation or other standard, on a source-specific determination ofambient impacts, or on a visibility or increment analysis;

 

OnMay 10, 2007, the Regulated Party submitted a minor permit amendmentapplication to modify the South Pulp Dryer (EU007) to accept and combustbiogas. On January 8, 2008, the MPCA determined that the modification toconvert EU007 to combust biogas would require a major permit amendment underMinn. R. 7007.1500. On February 5, 2008, the MPCA conducted a complianceevaluation of the Facility. At the time of the evaluation, the MPCA staffdocumented that the Regulated Party had installed the piping and valvesrequired to direct biogas to EU007. The Regulated Party failed to obtain amajor permit amendment prior to modifying EU007 as required by Minn. R.7007.0150 and Minn. R. 7007.1500.

 

d. **Air Emission Permit No. 02700001-009**

** **

SubjectItem: EU 004 Vertical Lime Kiln

 
| **What to  do**                                                                                   | ** ** | **Why  to do it**                                                    |
|---------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------|
| Particulate  Matter < 10 microns: less than or equal to 5.0 lbs/hour during normal  operation. |       | Title  I Condition: 40 CFRSection 52.21(k);  Minn. R. 7007.3000 |
| Total  Particulate Matter: less than or equal to 5.0 lbs/hour during normal  operation.           |       | Title  I Condition: 40 CFRSection 52.21(k);  Minn. R. 7007.3000 |

 

OnNovember 27, 2007, the Regulated Party conducted performance stack testingfor EU004 PM10 and PM emissions. The November 27,2007, performance test documented the EU004 PM10 emission rate at 8.7 lb/hr and the PM emissionrate at 12.0 lb/hr. The EU004 PM10 emission rate exceeded the PM10 emission limit by 74 percent andthe PM emission rate exceeded the PM limit by 140 percent.

 

**Part 7.****CIVIL PENALTY****.**The Regulated Party agrees to pay One Hundred and Eighty-Five Thousand Dollars($185,000) to the MPCA as a civil penalty for the violations alleged in Part 6within 30 days after the effective date of this Agreement. Payment of thepenalty amount of $185,000 is to be by check or money order payable to theMinnesota Pollution Control Agency. The check must be mailed to: EnforcementPenalty Coordinator, Minnesota Pollution Control Agency, 520 Lafayette RoadNorth, St. Paul, Minnesota 55155-4194.

 

Ifthe Regulated Party fails to make the required payment on time, the MPCA mayassess and the Regulated Party agrees to pay a late payment charge, in additionto the civil penalty, to be assessed as follows. Forty-five days after theeffective date of this Agreement, the Regulated Party is obligated to pay alate charge in an amount equal to ten percent of the unpaid civil penalty.Sixty days after the effective date of this Agreement, the Regulated Party isobligated to pay an additional late charge in an amount equal to twenty percentof the unpaid civil penalty.

 

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** **

**Part 8. REGULATED PARTY REQUIREMENTS.** The Regulated Party agrees to the followingrequirements:

 

a.        The Regulated Partyshall implement the 2008 Hydrogen Sulfide Management Strategies for itsMoorhead, E. Grand Forks and Crookston facilities. The Strategies are attachedas Exhibits A, B and C and are hereby incorporated into and made enforceableparts of this Agreement. If the Regulated Party submits monthly monitoringreports, for a facility, that show three consecutive months of exceedancesthat, after validation, may constitute violations of the ambient hydrogensulfide standards, the MPCA may require that the Regulated Party prepare andsubmit an evaluation of the applicable H2SManagement Strategy for that facility. The parties shall meet and confer aboutthe monitored exceedances and the hydrogen sulfide evaluation. The parties mayagree to revise the H2S Management Strategy or Strategies.

 

b.       Prior to any of theconstruction or modifications required by any of the Strategies, the RegulatedParty shall determine, under applicable rules, whether such construction ormodification requires a permit or approval from the MPCA and shall obtain suchpermit or approval as provided for by the rules.

 

c.        By January 31 ofeach year, while the Agreement is in effect, the Regulated Party shall submit awritten report that documents all activities completed, under the 2008 HydrogenSulfide Management Strategies, during the previous calendar year and outlinesthe activities the Regulated Party expects to complete during the currentcalendar year.

 

**Part 9. PENALTIES FOR VIOLATIONS OF THIS AGREEMENT.**

 

a.        If the Regulated Partyfails to comply with a Capital Project Completion Date, as listed in Table 1 ofthe Moorhead, E. Grand Forks or Crookston 2008 Hydrogen Sulfide ManagementStrategies, the Regulated Party shall pay to the MPCA a penalty in the amountof $500 per capital project for each day beyond the proposed completion date.If the Regulated Party fails to comply with a By-products Management Plan forremoval of by-products from the facilities, as described in Section 2.1(3) ofthe Moorhead, E. Grand Forks and Crookston 2008 Hydrogen Sulfide ManagementStrategies, the Regulated Party shall pay to the MPCA a penalty in the amountof $500 per day for each day of failure. If the Regulated Party fails tocommence implementation of the corrective

 

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actionscontained in the Straw Management Plan as described in Attachment E, AppendixF, or Appendix D of the Moorhead, E. Grand Forks or Crookston 2008 HydrogenSulfide Management Strategies respectively, within 24 hours of identifying anoncompliant straw-cover, the Regulated Party shall pay to the MPCA a penaltyin the amount of $500 per day for each day of failure. If the Regulated Partyfails to submit reports as required by Part 9.c., the Regulated Partyshall pay to the MPCA a penalty in the amount of $100 per day for each day offailure.

 

b.     Penalties for failure to comply withrequirements of Part 9 of this Agreement shall accrue from the date theRegulated Party was to have fulfilled the requirement until the Regulated Partyfulfills the requirement. Penalties shall not accrue while the MPCA considers atimely extension request under Part 15 or during dispute resolution under Part 13,unless the MPCA determines that the Regulated Party filed the request orinitiated dispute resolution solely for purposes of delay. If the RegulatedParty does not pursue dispute resolution under Part 13 for denial of atimely extension request, penalties shall accrue from the date the extensionrequest is denied by the MPCA Case Contact. If the Regulated Party pursuesdispute resolution for denial of an extension request and does not file atimely challenge in a court of competent jurisdiction as provided by Part 13,penalties shall accrue from the date of a Commissioner’s dispute resolutiondecision against the Regulated Party until the Regulated Party fulfills therequirement that is the subject of the extension request.

 

c.     The Regulated Party shall pay a penaltyunder this Part within 30 days after receiving written notice from theMPCA that the penalty is due. The written notice shall specify the provision ofthe Agreement that the Regulated Party has not fulfilled and indicate the datepenalties began to accrue. If the Regulated Party fails to make timely payment,the MPCA may assess and the Regulated Party agrees to pay a late paymentcharge, in addition to the stipulated penalty, to be assessed as follows.Forty-five days after receipt of written notice, the Regulated Party shall beobligated to pay a late charge in an amount equal to ten percent of the unpaidstipulated penalty. Sixty days after receipt of written notice, the RegulatedParty shall be obligated to pay an additional late charge in an amount equal totwenty percent of the unpaid stipulated penalty.

 

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d.     In dispute resolutionbefore the Commissioner under Part 13, the Regulated Party can contest thefactual basis for the MPCA’s determination that the Regulated Party has notfulfilled a requirement of this Agreement covered by this Part. However, theRegulated Party waives its right to challenge, on legal grounds, therequirement that it pay penalties under this Part.

 

e.     The Regulated Party shallnot be liable for payment of penalties for failure to comply with requirementsof Part 9 of this Agreement covered by this Part if it has submittedto the MPCA a timely request for an extension of schedule under Part 15and the MPCA has granted the request. The MPCA’s grant of an extension ofschedule waives the payment of penalties covered by this Part only on therequirements for which the MPCA granted an extension of schedule and only forthe time period specified by the MPCA in the grant of an extension. Anextension of schedule for one requirement of Part 9 does not extend theschedule for any other requirement of Part 9.

 

f.      Any requirement of thisAgreement may be enforced as provided in Minn. Stat. § 115.071 (2004). Paymentof a stipulated penalty does not relieve the Regulated Party of its obligationto fulfill and complete requirements under the Agreement and to otherwisecomply with the terms and conditions of the Agreement.

 

**Part 10.COVENANT NOT TO SUE AND RESERVATION OF REMEDIES.** So long as the Regulated Party performsaccording to and has complied with the terms, covenants, and agreementscontained in this Agreement, the MPCA agrees not to exercise anyadministrative, legal, or equitable remedies available to the MPCA with respectto the Regulated Party to address the violations alleged and described in Part 6,the violations alleged in the MPCA Notice of Violation issued to the RegulatedParty dated July 17, 2007, or any other violations related to hydrogensulfide, which the MPCA could have pleaded in a civil action based on writteninformation in the possession of the MPCA at the time this Agreement becomeeffective. In addition, for so long as the Regulated Party is in compliancewith the provisions of Part 9 of this Agreement, the MPCA agrees not toexercise any administrative, legal, or equitable remedies available to the MPCAto address future violations of the state ambient air quality standards forhydrogen sulfide set forth in Minn. Rule 7009.0080 until after the requirementsof Part 9 are complete for each facility. The MPCA reserves theright to enforce this Agreement or takeany action authorized by law, if the Regulated Party fails to comply with the

 

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termsand conditions of this Agreement. Further, the MPCA reserves the right to seekto enjoin violations of this Agreement and to exercise its emergency powerspursuant to Minn. Stat. § 116.11 (2004) in the event conditions or theRegulated Party’s conduct warrant such action. Nothing in this Agreement shallprevent the MPCA from exercising these rights and nothing in this Agreementconstitutes a waiver of these rights.

 

TheRegulated Party agrees to waive all claims it may now have, as of the effectivedate of this Agreement, under Minn. Stat. § 15.472 for fees and expensesarising out of matters leading up to and addressed in this Agreement.

 

**Part 11.****REPEAT VIOLATIONS****.** Federal and state environmental programsestablish harsher penalties for violations of environmental laws or rules thatconstitute repeat violations. In a proceeding to resolve alleged violations bythe Regulated Party, if any, occurring after the date of the alleged violationsset out in Part 6 of this Agreement, the Regulated Party may argue aboutthe extent to which the violations alleged in Part 6 of this Agreementshould affect the penalty amount for the later violations, but waives theright: (1) to contend that the violations alleged in Part 6 of thisAgreement did not occur as alleged; and (2) to require the MPCA to provethe violations alleged in Part 6 of this Agreement.

 

**Part 12.****RESOLUTION OF DISPUTES****.** The parties to this Agreement shall resolvedisputes that arise as to any part of the Agreement as follows:

 

a.     Either party, acting throughits Case Contact (as named in Part 16 below), may initiate disputeresolution by providing to the Case Contact of the other party an initialwritten statement setting forth the matter in dispute, the position of theparty, and the information the party is relying upon to support its position.The other party, acting through its Case Contact, shall provide a writtenstatement of its position and supporting information to the Case Contact of theinitiating party within 14 calendar days after receipt of the initial writtenstatement.

 

b.     If the parties, actingthrough their Case Contacts, do not reach a resolution of the dispute andreduce such resolution to writing in a form agreed upon by the parties within21 calendar days after the initiating party receives the statement of positionfrom the responding party, the Commissioner shall issue a written decisionresolving the dispute. The written decision may address

 

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stipulatedpenalties assessed pursuant to Part 10. The Commissioner’s decision shallbe considered a final decision of the MPCA for purposes of judicial review.

 

c.     The Commissioner’s decisionshall become an integral and enforceable part of this Agreement unless theRegulated Party timely challenges the decision in a court of competentjurisdiction. Failure to timely challenge means the Regulated Party agrees tocomply with the MPCA Commissioner’s decision on the matter in dispute and topay any penalties that accrue pursuant to Part 10 for failure to fulfillrequirements of this Agreement that are the subject of the dispute resolution.Further, if the Commissioner’s decision assesses penalties pursuant to Part 10of this Agreement, the Regulated Party agrees to and shall pay the amount ofpenalty determined by the Commissioner within 60 days after receiving theCommissioner’s decision.

 

d.     Throughout any disputeresolution, the Regulated Party shall comply with all portions of the Agreementthat the MPCA determines are not in dispute.

 

**Part 13.****VENUE****.** Actions brought by the MPCA to enforcerequirements and terms of this Agreement shall be venued in Ramsey CountyDistrict Court.

 

**Part ****14.****EXTENSION OF SCHEDULES****.** If the Regulated Party wants an extension ofa deadline included in a schedule set out in Part 9, the Regulated Partymust request the extension in writing at least ten days before the scheduleddeadline, or as soon as possible before that date if the reason for theextension request arises less than ten days before the deadline. Each deadlineextension request shall separately specify the reason why the extension isneeded. No requested extension shall be effective until approved in writing bythe MPCA, acting through the MPCA Case Contact or the Commissioner. The MPCAshall grant an extension only for the period of time the MPCA determines isreasonable under the circumstances. The written approval or grant of anextension request shall be considered an enforceable part of the Agreement.

 

TheRegulated Party has the burden of demonstrating to the satisfaction of the MPCAthat the request for the extension is timely, and that good cause exists forgranting the extension. Good cause can include, but is not limited to, thefollowing:

 

a.        Circumstances beyond thereasonable control of the Regulated Party; and

 

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b.       Delays caused by the MPCAin reviewing timely submittals required by this Agreement, the Regulated Partysubmitted in complete and approvable form, which make it not feasible for theRegulated Party to meet the required schedules.

 

Goodcause does not include unanticipated costs, increases in the cost of controlequipment, or delays in MPCA review of submittals when the submittals are notin complete and approvable form.

 

TheRegulated Party may challenge a decision by the MPCA to deny a request for anextension under Part 13.

 

**Part 15.CASE CONTACT.**The MPCA and the Regulated Party shall each designate a Case Contact for thepurpose of overseeing the implementation of this Agreement. The MPCA CaseContact is Rachel Peters. The Regulated Party’s Case Contact is PatriciaHansen. Either party may change its designated Case Contact by notifying theother party in writing, within five days of the change. To the extent possible,communications between the Regulated Party and the MPCA concerning the termsand conditions of this Agreement shall be directed through the Case Contacts.The address, telephone number, and email address of the MPCA’s Case Contact is:7678 College Road, Suite 105, Baxter, Minnesota, 56425; 218-825-2120;rachel.peters@pca.state.mn.us. The address, telephone number, and email addressof the Regulated Party’s Case Contact is: 101 North Third Street, Moorhead,Minnesota 56560; 218-236-4347; phansen@crystalsugar.com.

 

**Part 16.REGULATED PARTY INFORMATION.** The Regulated Party shall not knowingly make any false statement,representation or certification in any record, report, plan or other documentfiled or required to be submitted to the MPCA under this Agreement. TheRegulated Party shall immediately upon discovery report to the MPCA any errorsin such record, report, plan or other document.

 

**Part 17.REVIEW OF SUBMITTALS.** The MPCA, acting through its Commissioner, Case Contact, or otherdesignated MPCA staff, shall review all submittals made by the Regulated Partyas required by this Agreement and shall notify the Regulated Party in writingof the approval or disapproval of each submittal, if applicable. The MPCA andthe Regulated Party shall consult with each other upon the request of eitherparty during the review of submittals or modifications. If any

 

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submittalis disapproved in whole or in part, the MPCA Commissioner or designated MPCAstaff shall notify the Regulated Party of the specific inadequacies and shallindicate the necessary amendments or reviews. Within 15 calendar days afterreceipt of any notice of disapproval, the Regulated Party shall submitrevisions and take actions to correct the inadequacies.

 

**Part 18.****ACCESS****.**During the term of this Agreement, the Regulated Party agrees to provide theMPCA and its staff access to Regulated Party’s facilities and its records anddocuments related to the implementation of this Agreement to the extentprovided under Minn. Stat. § 116.091 (2004) or other law, conditioned only uponthe presentation of credentials.

 

**Part 19.****SAMPLING AND DATA AVAILABILITY****.** The Regulated Party shall make available tothe MPCA the results of any sampling, tests, or other data generated by theRegulated Party, or on its behalf, to implement the requirements of thisAgreement. Nothing in this paragraph is intended to waive or alter anyprotection afforded by statute to data that qualifies for an exception topublic disclosure.

 

**Part 20.****RETENTION OF RECORDS****.** The Regulated Party shall retain in itspossession all records, documents, reports and data related to this Agreement.The Regulated Party shall preserve these records, documents, reports and datafor a minimum of three years after the termination of this Agreement despiteany document retention policy of the Regulated Party to the contrary, and shallpromptly make all suchdocumentation available for review upon request by the MPCA.

 

**Part 21.****APPLICABLE LAWS AND PERMITS****.** The Regulated Party shall undertake allactions required to be taken pursuant to this Agreement in accordance with therequirements of all applicable state and federal laws and regulations. Exceptwhen the MPCA has specified and authorized a different compliance method in Part 9,the Regulated Party must also comply with all applicable permits, orders,stipulation agreements and schedules of compliance. Nothing in this Agreementexempts or relieves the Regulated Party of its obligation to comply with localgovernmental requirements.

 

**Part 22.****OTHER CLAIMS****.**Nothing herein shall release the Regulated Party from any claims, causes ofaction or demands in law or equity by any person, firm, partnership orcorporation not a signatory to this Agreement for any liability it may havearising out of or relating to the release of

 

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anypollutant or contaminant from its operations or from a facility. Neither theRegulated Party nor the MPCA shall be held as a party to any contract enteredinto by the other party to implement the requirements of this Agreement.

 

**Part 23.****HOLD HARMLESS AGREEMENT****.** The Regulated Party agrees to indemnify,save and hold the MPCA, its agents and employees harmless from any and allclaims or causes of action arising from or on account of acts or omissions ofthe Regulated Party, its officers, employees, agents, or contractors inimplementing the activities conducted pursuant to this Agreement; provided,however, that the Regulated Party shall not indemnify the MPCA or save or holdits employees and agents harmless from any claims or causes of action arisingout of the acts or omissions of the MPCA, or its employees and agents. When theRegulated Party is required to hold the MPCA harmless, the MPCA shall give theRegulated Party notice of any claim or cause of action subject to this Part andthe Regulated Party has the right to participate in the defense against anyclaim or cause of action. No settlement shall be effective against theRegulated Party unless the Regulated Party agrees to the settlement. Nothingherein waives or modifies the provisions of the Minnesota Tort Claims Act,Minn. Stat. §§ 3.732, et seq., and other applicable law.

 

**Part 24.****SUCCESSORS, AGENTS ANDCONTRACTORS****.** This Agreement shallbe binding upon the Regulated Party and its successors and assigns and upon theMPCA, its successors and assigns. If the Regulated Party sells or otherwiseconveys or assigns any of its right, title or interest in the Facility, theconveyance shall not release the Regulated Party from any obligation imposed bythis Agreement, unless the party to whom the right, title or interest has beentransferred or assigned agrees in writing to fulfill the obligations of thisAgreement and the MPCA approves the transfer or assignment. The Regulated Partyshall ensure that the Regulated Party’s agents, contractors and subsidiariescomply with the terms and conditions of this Agreement.

 

**Part 25.****AMENDMENTS****.** Except with respect to extensions ofschedules granted under Part 15 and approved submittals under Part 18,this Agreement may be amended only by written agreement between the parties.The provisions of the attached Hydrogen Sulfide Management Strategies may beamended as provided in each Strategy.

 

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**Part 26.EFFECTIVE DATE.**This Agreement shall be effective on the date it is signed by the MPCA.

 

**Part 27.TERMINATION.**The provisions of this Agreement shall be deemed satisfied and terminated whenthe Regulated Party receives written notice from the MPCA that the RegulatedParty has demonstrated, to the satisfaction of the MPCA, that all terms of theAgreement have been completed.

 

**Part 28.SURVIVAL.** Theprovisions of Parts 2, 11, 12, 17, 20, 21, 22, 23, 24, 25, and 29 of thisAgreement and the rights, duties and obligations of the MPCA and the RegulatedParty created in those provisions shall survive termination of this Agreement.

 

**BY THEIR SIGNATURES BELOW, THE UNDERSIGNED REPRESENT THAT THEYHAVE AUTHORITY TO BIND THE PARTIES THEY REPRESENT**

 

| **American  Crystal Sugar Company** | ** **              | **STATE  OF MINNESOTA**       |
|-------------------------------------|-------------------------|-------------------------------|
| ** **                          | ** **              | **POLLUTION  CONTROL AGENCY** |
| ** **                          | ** **              | ** **                    |
| ** **                          | ** **              | ** **                    |
| By:                                 | /s/ Joseph James Talley |                          | By: | /s/ Brad  Moore |
| Name:                               | Joseph  James Talley    |                          |   | Brad  Moore |
| Title:                              | Chief Operating Officer |                          |   | Commissioner |
|                                |                    |                          |   |
| Date:                               | 11/25/08                |                          | Date: | 11/25/08 |
|                                     |                         |                               |  |  |  |

 

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