### Exhibit 3 

# STATE OF CONNECTICUT DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of The StateofConnecticut and Stone Container Corporation ) ) ) Trading Agreement and Order No. 8124



### Whereas, the CommissionerofEnvironmental Protection ("Commissioner") and Stone ContainerCorporation ("Sec') 

### agree that it

### is in thepublic interestthat they work cooperatively to improve the air quality within the State ofCOImecticut and that the use of emission reduction trading will achieve this result in atimely and cost-effective manner: A. At the request and with the agreement of

## sec, the Commissioner finds the following: 1. 

# sec is acorporation thatoperates apapermill facility at 125 Depot Road, Uncasville, Connecticut ("facility"). 2. At the facility, 

## see operates a Riley Boiler(''Boiler'') with a maximum rated capacity of99.5 Million British Thermal Units ("MMBTl.r) per hour. The 1990 

### DepartmentofEnvirorunental Protection ("DEP") Emissions Inventory, using emission factors from AP-42,lists a total of79.2 tons ofNOx from the Boiler 

### when firing residual oil. The most representative year for establishing abasis for historical emissions is 1992, when the Boiler fired natural gas and residual oiL The 1992 NOx emission, based on the lower

# oractual or allowable emissions, actual fuel data, and stack test was 40.9 tons. The Boiler is subject to Section 22a-174-22, Regulations ofConnecticut State Agencies ("Regulations') pertaining to the control ofNitrogen Oxides (NOJ. 3. In April 1995, 

# sec removed the airpreheater, and installed a flue gas 

### recirculation system, a**lo~-NOJ;** 

### burner, and an economizer on the boiler.
4. Official U.S. Environmental Protection Agency ("EPA'') Reference Method 7E stack testing perfonned on the dates indicated in Table 1, resulted in NOx emission rates set forth in Table 1.

1 (Prim:d on R:cycJed Paper) 79 Elm Streel • Hartford. CT 06106· SI27 hllp:lldep. slate.CI.us An Equo! Opporrunil)' Emp/nyu**n.~._.,**

# ....... Date J/3/02

### Stone Container Corporation Trading Agreement and Order #8124

Table I NOx Emission Rates and RACT limits (IbslMMBtu) Emission: Rates Boiler Fuel Stack TestDale StackTest 

### FLER 

### RAer Residual Oil August 13, 1995 .318 .363 .150 Natural G" August 13,1995 .072 .086 .200 Riley Residual Oil September 12, 2000 .342 .389 .250 Natural G" September 12, 2000 .055 .066 .200

5. The Boilerhas dual-fuel capability; residual oil and natural gas. When firing residual oil, the Boiler exceeds the NOx Reasonably Available Control Technology ("RACT") limit as specified in Table 22-1, Section 22a-174-22 of the Regulations. \¥hen burning natural gas, the Boiler complies with the 

### NOx RACT limit as specified in table 22-1, Section**22a~174·22** ofthe Regulations. 6. The full load emission rate ("FLER") includes a self-imposed bufferof20 %for natural gas and J4% for residual oil. From the May 31,1995 through September II, 2000 tlie FLERs shall be .363 iblMMBtu for residual oil and .086 IblMMBtu for natural gas. On and after September 12, 2000 the FLERs shall be .389 Ib/MMBtu for residual oil and .066 IblMMBtu for natural gas. 7. Pursuant to Section 22a-174-'22(j) ofthe Regulations, 

# see proposes to comply by creating discrete emission reduction credits ("DERCs") while burning natural gas and using aportion ofthe DERCs while burning residual oil.

. 

# . 8. SCC shall discount DERCs as follows: (a) Ten (10) percent ofthe DERCs generated by the facility will be permanently removed from all calculations to assure a benefit to the envirorunent. (b) Twenty (20) percent ofthe DERCs generated will be permanently removed

Initials 

# ,/hf,} 2 Date 1/3/02Stone Container Corporation

from all calculations for uncertainties. Trading Agreement and Order #8124



### 9. When properly documented by SCC, and approved by the Commissioner, the emission reductions identified above 

### will conform to therequirements of 

### Section 22a-174-220)(3) ofthe Regulations. SpecificalIy, the reductions \ViII be: Real: because they willresult 

### in areduction ofactual emissions released into the air, net ofany consequential increase in actual emissions resulting from shifting demand. The emission reductions will be properly measured, recorded 

### and reported. Quantifiable: because they arebased on Stack Test Data as applied in an**appropriat~** reliable and replicable protocol, providing the rate and total mass amount ofreduction. Surplus: becausethey are not required by a.."1Y Connecticut statute orregulation mandated by a current State Implementation Plan (SIP), and are not currently relied upon 

### in any applicable attainment plan, any reasonable further progress plan ormilestone demonstration. Perma.'1ent: becausethe flue gas recirculation system and low-NO" burner will be 

### in place and operating, and an appropriate tracking system is in place to monitor all data required to verify and quantify the creation ofDERCs. Enforceable: because the DERCs are approved by the Commissioner retrospectively after the submission by

# sec ofthe seasonal or annual report that will document theircreation. 

### 10. For the period ofJanuary 1995 through December2000, SCC emitted 4.4 tons ofexcess 

### NOx emissions from the Boilerwhileburning residual oil. In the that timeperiod, 

# sec created 24.3 non-ozone season nERCs and 6.1 ozone season DERCs from the Boiler while buming natural gas. Ten (l0) percent ofthese DERCs are retired and permanently removed from all calculations to assure a benefit to the environment, and twenty (20) percent areremoved for uncertainties; leaving 27.4 ,approved DERCs (21.9**non~ozone** season, and 5.5 ozone season) available for use.

3 

### Date 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124

11. Approved DERCs are defmed for the purpose ofthis order as those, which the Commissionerhas provided written authorization for use in compliance with Section 22a·174-22 ofthe Regulations.

8.1. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, and pursuantto Section 22a-174-22(d)(3) ofthe Regulations, hereby allows 

# sec, and approved sources within Connecticut, to use 

### 5.5 tons ofozone season

### NOx DERCs and 

### 21.9 tons ofnon-ozone season 

### NOx DERCs for purposes ofcompliance under Section 22a-174-22(j) ofthe Regulations to achieve all or a portion ofthe nitrogen oxide emission reductions required by Section 22a-174-22 

### and/or as emission offsets for new sources for compliance with the requirements ofSection 22a-174-3(1)(5) ofthe Regulations. DERC creation serial numbers assigned by the Department to these approved reductions of

### NO

### x emissions are provided in Table 

### 2 ofthis Trading Agreement and Order:

Table 2: NOx DERC Serial Numbers

Year Ozone Season Non-Ozone Season 1995 CT95/8124(DC)NOxozl-3 CT95/8124(DC)Noxnonozl-6 1996 CT96/8124(DC)Noxozl CT96/8124(DC)Noxnonozl-3 1997 N/A CT97/8124(DC)Noxnonoz1 1998 CT98/8124(DC)Noxozl CT98/8124(DC)Noxnonozl-3 1999 CT99/8124(DC)Noxozl CT99/8124(DC)Noxnonoz1-6 2000 CTOO/8124(DC)NOxozl CTOO/8124(DC)Noxnonoz1

8.2. Upon sufficient documentation as described below, the Commissionermay provide written approval ofthe generation ofadditional DERCs by

# see retrospectively. Approved DERCs generated by SCC may beheld by SCC or transferred to other persons in accordance with this Trading Agreement and Order.



### Initials

# ,~~ 4 

### Date 1/3/02

### Stone Container Corporation 

### Trading Agreement and Order #8124

B.3. The Commissioner, in accordance with the provisions ofthis Trading Agreement and Order, pursuant to Section 22a-174-22(d)(3) ofthe Regulations, hearby allows 

# see to comply with Section 22a-174-22(d)(l) ofthe Regulations through use ofDERC trading.

C. With the agreement ofSCC, the Commissioner, acting under Sections 22a-6, 22a-17J, 22a-174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders SCC as follows: I. Upon issuance ofthis Trading Agreement and Order SCC shall comply with the FLER's shown in table 1 above during operation ofthe Boiler. 2. On and after the date ofissuance ofthis consent order, and priorto May 1,2003 or until SCC achieves compliance with the emission standards 

### in Section 22a· I74-22(e) ofthe Regulations, whicheveroccurs earlier, 

# see shall have in its possession required, approved DERCs. 3. On and after the date ofissuance ofthis consent order, and priorto May I, 2003 oruntil 

# sec achieves compliancewith the emission standards in Section 22a174-22(e) ofthe Regulations, whicheveroccurs earlier, SCC shall document and record the amounts of natural gas and number 6 oil (collectively referred to as "fuel") and DERCs used by the Boiler each month, and provide such records 

### in accordance with the following and Section 22a-174-22 ofthe Regulations:

a. Before the first day ofeach month, calculate projected DERCs required for the nextcalendar month for the Boiler as follows: DERCs (tons) EstimatedFuel Use inMMBtu x (FLER in IbsIMMBtu

- (0.95 x .25 IbslMMBtu)) 2000lbhon

. b. Document that sufficient approved DERCs are available for the Boilerno later than the first ofeach calendar month to assure compliance for, at a minimum, that calendarmonth. DERCs required shall be adjusted upwards by 100% 

### ifapproved DERCs are not 

### in seC's possession prior to use. However, based on the gravity ofthe noncompliance. the Commissioner may require additional upward adjustment;



### Initials

# I~~ 5 

### Date 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124

c. No later than the tenth day ofeach month, calculateDERCs used in the preceding calendar month for the Boiler as foIIows: DERCs (tons)

- Actual Fuel Use in MMBtu x(FLER in IbsIMMBtu

- (0.95 x .25 IbsIMMBtu)) 2000 Iblton

d. Document and record monthly consumption offuel and DERCs;

e. No laterthan March I ofeach year this Consent Order is in effect, include with its annual emissions report to the Commissioner, the monthly r:ate offuel conswnption for the Boiler and DERCs used by the Boiler for the previous calendar year; 

### f. Retain records and supporting docwnentation as described in this section for a minimum offive years, commencing on the date such records were created; 

### g. Maintain documentation to attest to the fact thatDERCs used during the ozone season were generated during the ozone season. The ozone season is from May 

### 1 through September 

### 30 in any calendaryear. Generator certification ofthis fact shall be sufficient; and; h. Provide the records specified above to the Commissioner within thirty (30) days ofreceipt ofa written request from the Commissioner. 4. When operating the Riley Boileron natural gas, Stone Container shall calculate the amount·ofDERCs generated, as follows: DERCs generated (tons) Actual Fuel Use in MMBtu x(.20 IbsIMMBtu

-FURin IbsIMMBtu) x.70 2000lblton 5. rn requesting DERC approval, Stone Container shall provide documentation containing monthly operating reports ofactual fuel useage and DERCs generated net ofthe thirty (30) percentdiscount.



### Initials 

# f?l1 6 

### Date 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124

6. No later than May I, 2003, SCC shall comply with the requirements ofSection 22a-174-22(d)(I) ofthe Regulations. However, after full program review ofthis and other Trading Agreements and Orders and, ifdeteITIlined to be appropriate, the Commissionermay grant a written extension ofthis Trading Agreement and Order. 7. TheFLER's may be adjusted upon satisfactory demonstration to the Department and written approval by the·Commissioner. 

### 8. Pursuant to Section 22a.174-22(k) ofthe Regulations, SCC shall conduct NOx emission testing ofthe Boiler at least once every five years commencing from the later date identified in Table I ofthis Trading Agreement and Order. 9. Noncompliance with the established FLER shall subject SCC to make restitution by matching.lhe quantity ofemissions ("true up") caused by the exceedance plus a 100% premium. The true up in tons ofDERCs shall be equal to the FLER exceedance 

### in lbsIMMBtu, multiplied by the total heat input during the period of noncompliance divided by 2000 Ibslton. Ifthe period ofnon-compliance is not known, the time period from completion ofthe last/previous Department witnessed stack test through the date the FLERcompliance is achieved as approved by the Commissioner shall be used. However, nothing in this trading Agreement and Order shall effect the Commissioner's authority to institute any proceeding or take any other action to require additional upward adjustment, based on the gravity ofany alleged noncompliance or violation oflaw. 10. Approvals. 

# sec shall use best efforts to submit to the Commissioner all documents required by this Trading Agreement and Order in a complete and approvable fOITI1. Ifthe Commissioner notifies 

# sec that any document or other action is deficient, and does not approve it with conditions ormodifications, it is deemed disapproved, and

# sec shall correct the deficiencies and resubmit it within the time specified by the Commissioneror, ifno tiJ?e is specified by the Commissioner, within 30 days ofthe**Commission~'s** notice ofdeficiencies. In approving any document orother action under this Trading Agreement and Order, the Commissionermay approve the document or other action as submitted or performed orwith such conditions or modifications as the Commissionerdeems necessary to cany out the purposes ofthis Trading Agreement and Order. Nothing in this paragraph shall excuse noncompliance or delay.

rnitialSf;

# j 7 

### Date 1/3/0'

### Stone Container Corporation Trading Agreement and Order #8124

11. Definitions. As used in this order, "Commissioner" means the Commissionerof Environmental Protection or an agent ofthe Commissioner. ''Residual oil" means any fuel oil ofNe. 4, 10. 5, orNo.6 grades, as defined by Commercial Standard C.S. 12-48. "Ozone season" means the periodfrom May 1 through September 30 in any given calendaryear. ''Issuance'' means the date this Trading Agreement and Orderis deposited in theU.S. Mail or the date it is personally delivered, whichever is earlier. 12. Dates. The date ofsubmission to the Commissionerofany document required by this Trading Agreement and Order shall be the date such document is received by the Commissioner. The date ofany notice by the Commissioner under this Trading Agreement and Order, including but not limited to notice of approval or disapproval ofany document orother action, shall be the date such notice is deposiled in the U.S. mail or is personally delivered, whichever is earlier. Except as otherwise specified in this Trading Agreement and Order, the word "day" as used 

### in this Trading Agreement and Ordermeans calendarday. Any document or action which is required by this Trading Agreement and Order to be submitted orperfonned. by a date which falls on a Saturday, Sunday or a Connecticut or federal holiday shall be submitted orperfonnedby the next day which is not a Saturday, Sunday or Connecticut or federal holiday. 13. Certification ofdocuments. Any document, including butnot limited to any notice, which is required to be submitted to the Commissionerunder this Trading Agreement and Order shall be signed by the responsible corporate officer of

# sec or aduly authorized representative ofsuch officer, as those tenns are defined in Section 22a-430-3(b)(2) ofthe Regulations, andby the individual orindividuals responsible for actually preparing such document, each ofwhom shall examine andbe familiar with the information submitted in the document and all attachments thereto, and shall make inquiry ofthose individuals responsible for obtain0g the infonnation to determine that the information is true,.accurate, and complete, and each ofwhom shall**c~rtify** 

### in writing as foHows: "I have personally examined and am familiar with lhe information submitted in this document and all attachments thereto, and I certify thatbased on reasonable investigation, including my inquiry ofthose individuals responsible for obtaining the infonnation, the submitted information is true, accurate and complete to the best ofmy knowledge and belief. I understand that any false

Initials 

# ,rJ 8 

### Date 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124

statement made in the submitted infonnatiol1 may be punishable as a criminal offense wlder Section 22a·175 ofthe Connecticut General Statutes or, in accordance with Section 22a·6 ofthe Connecticut General Statutes, under Section 53a·157b ofthe Connecticut General Statutes, and in accordance with any other applicable statute." 14. Noncompliance. This Trading Agreement and Order is afinal order ofthe Commissioner 

### with respect to the matters addressed herein, and is nonappealable and immediately enforceable. Failure to comply with this Trading Agreement and Order may subject

# sec to an injunction and penalties. 15. False statements. Any false statement in any infonnation submitted pursuant to this Trading Agreement and Order may be punishable as a criminal offense under Section 22a-175 ofthe Connecticut General Statutes or, in al:curdauce with Section 22a·6, under Section 53a-157b ofthe Connecticut General Statutes. 

### 16. Notice oftransfer; liability of

# sec and others. Until 

# sec has fully complied with this Trading Agreement and Order, SCC shall notify the Commissioner in writing no later than fifteen (15) days after transferring all or any portion ofthe facility, the operations, the site orthe business which are the subject of!:his Trading Agreement and Order, or obtaining a new mailing or location address. Any license transfer shall be conducted in accordance with Section 22a-60 afthe Connecticut General Statutes. SCC's obligations under this Trading Agreement 

### and Order shall not be affected by the passage oftitle to any property to any other person or municipality. 17. Commissioner's powers. Nothing in this Trading Agreement and Order shall affect the Commissioner's authority to institute any proceeding or take any other action to prevent or abateviolations oflaw, prevent or abate pollution, recover costs and natural resource damages, and to imposepenalties for violations oflaw which are willful or criminallynegligent or for whichpenalties have not been specifically.provided in this Trading Agreement and Order, including butnot limited to violations ofany permit issued by the Commissioner. 

### Ifat any time the Commissioner detennines that the actions taken by SCC pursuant to this Trading Agreement and Order have not fully achieved compliance ,\lith Section 22a·174-22 ofthe Regulations, the Commissioner may institute any proceeding against SCC andlor require SCC to undertake further investigation or further action.



### InitialS-'!J

# I 9 Date 1(3/02

### Stone Container Corporation Trading Agreement and Order #8124

18. seC's obligations under law. Nothing in this Trading Agreement and Order shall relieve

## sec ofother obligations under applicable federal, state and local law. 19. No assurance by Commissioner. No provision ofthis Trading Agreement and Orderand no action or inaction by the Commissioner shall be construed to constitute an assurance by the Commissioner that the actions taken by

# sce pursuant to this Trading Agreement and Orderwill result in complianceor prevent orabatepollution. 

### 20. Access to records and facility. AIJ.y representative ofthe Department of Environmental Protection may enter and inspect the facility and inspect and copyrecords within normal business hours without priornotice for the purposes ofmonitoring. and.enforcing. the actions required or- allowed by this Trading Agreement and Order. 21. No effecton rights ofotherpersons. This Trading Agreement and Order shall neither create nor affectany rights ofpersons who ormunicipalities which are not parties to this Trading Agreement and Order. 22. No Creation ofProperty Rights. This Trading Agreement and Order does not create any property rights with respect to these DERCs. 23. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date

# sec becomes aware ofa change in any information submitted to the Commissioner underthis Trading Agreement and Order, or that any such information was inaccurate ormisleading or that any relevant infoITIlation was omitted,

# sec shan submit the correct or omitted infonnation to the Commissioner. 24. otification ofnoncompliance. In the event that SCC becomes aware that it did not ormay not comply, or cijd not ormay not comply on time, with any requirement ofthis Trading AgreeJ;Ilent and Orderor ofany document required' 

### hereunder, 

# see shall bytelephone immediately notifY theBureau ofAir Management and shall take all reasonable steps to ensure that any noncompliance or delay is avoided or, ifunavoidable, is minimized to the greatest extent possible. 

# sec shall also notify the Commissioner in writing within ten days ofbecoming aware ofthe noncompliance orpotential noncompliance stating the date, time, and duration ofthe noncompliance, the reasons for the noncompliance ordelay and all activities which

# sec and its 

# P,c7! Initials!J 

### T 10 Date 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124


### agents, employees and representatives took to avoid orrepair the results ofthe noncompliance and preventthe noncompliance, and propose, for the review and written approval ofthe Commissioner, dates by which compliance will be achieved. SCC shall comply with any dates, which may be approved in writing by the Commissioner. Notification by 

### SCC shall not excuse noncompliance or delay, a...,d the Commissioner's approval ofanycompliance dates proposed shall not excuse noncomplianceor delay unless specifically so stated by 

### the Commissionerin writing. Submission ofdocuments. Any documentrequired to be submitted to the Commissionerunderthis Trading Agreement and Order shall, unless otheiWise specified in writing by the Commissioner, be directed to: Mr. Michael LaFleur Department ofEnvironmental Protection Bureau ofAirManagement Compliance and Field Operations Emission and Credit Trading Section 79 Elm Street Hartford, Connecticut 06106



# 4/1 InitialsL 

### 11**Dat~** 1/3/02

### Stone Container Corporation Trading Agreement and Order #8124

SCC consents to the issuance ofthis 

### Trading Agreement and Order without further notice. The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement and Order and 

### to legally bind

# s.ec to the tenns and conditions ofthe 

### Trading Agreement and Order.

Stone Container Corporation Signature:

# ~l-tr Type Name: Paul H. Haves 

### Type 

### Title: _.cG",",,",,"

### """-',--,",,,a,,"-,-,",S"'",",-

__ 

### Date: 1/3/02



### Issued as afinal consent orderofthe 

### Commissioner ofEnvironmental 

### Protection on

# 1)5**20~**

Commissioner



### TOWN OF MONTVILLE LAND RECORDS MAILED CERTIFIED MAIL, RETIJRN RECEIPT REQUESTED Certified DocumentNo.



### 12