Exhibit 10.1


 


BEFORE THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT


 


	
  IN
  THE MATTER OF:

  	
  Case
  No. 04-E-0034

  



 


MGP
Ingredients, Inc.


1300
Main Street


P.O. Box
130


Atchison,
Kansas  66002


 


Source
ID No. 0050002


 


AMENDMENT 2 OF CONSENT AGREEMENT AND FINAL ORDER OF THE SECRETARY


 


Roderick
L. Bremby, Secretary, Kansas Department of Health and Environment (KDHE) and
MGP Ingredients, Inc. (MGP) hereby state and agree:


 


1.             On January 11, 2006, KDHE and MGP entered into
Consent Agreement and Final Order (CAO) for Case No. 04-E-0034, attached
and incorporated herein by reference.


 


2.             Within paragraph 29 of the CAO, MGP agreed to accept
a source-wide Volatile Organic Compound (“VOC) cap of 95 tons based on a 12
month rolling average.  MGP has failed to
maintain continuous compliance with the VOC cap.  On November 23, 2009 KDHE and MGP
entered in to an amendment of the CAO to address the non-compliance with the
VOC cap.


 


3.             On February 23, 2010 MGP and KDHE held a
meeting to address increased production at MGP’s facility.  MGP noted that the increased production has
caused more VOCs to enter into the cooling tower water and could cause MGP to
exceed the VOC cap.  MGP has agreed to
amend paragraph 29 of the CAO and develop a compliance plan, which includes a
specific timeline to replace the existing cooling towers with a new water
cooling system.


 


4.             Paragraph 29 shall be amended to read; Source-wide
VOC Emission Cap:  MGP shall accept
source-wide allowable emission caps for the facility equivalent to 95 TPY for
VOCs for a period of twenty-four months or until termination of this CAO
whichever is later.  Beginning April 1,
2007, MGP shall continually operate the Facility so as not to exceed the
source-wide allowable emission cap of 95 TPY for VOCs based on a 12-month
rolling sum, rolled monthly, and recorded monthly.  For the first eleven months, beginning April 1,
2007, compliance with the 12-month rolling sum will be demonstrated based on a
schedule to meet applicable emission caps as set forth in the approved
CTP.  To demonstrate compliance with the
VOC cap, MGP shall replace the existing cooling towers, resulting in a
significant VOC reduction.  MGP shall
follow the timeline and submit monthly progress reports.  The monthly progress reports shall be
postmarked no later than 30 days after the last day of the month.  The first report is due May 30, 2010
covering April 1, 2010 to April 30, 2010.  MGP may discontinue the monthly reports upon
written notification from KDHE.  The
progress report shall contain information regarding the VOC cap and the
construction progress (e.g. VOC calculations, pictures, explanation of delays
etc.)  The timeline to be followed is:


 


1

















 


A.            Obtain project funding no later than June 30,
2010;


 


B.            Obtain a construction contract no later than July 30,
2010;


 


C.            Break ground on project no later than September 30,
2010;


 


D.            Begin commissioning new cooling system no later than
June 30, 2011; and


 


E.             Finish project and begin full-time operation no
later than September 30, 2011.


 


5.             No other requirements or conditions contained within
the CAO for Case No. 04-E-0034 are amended or changed by this Amendment 2.


 


6.             Nothing in this Amendment 2 to the CAO shall be
considered an admission of any fact or an acknowledgement of any liability by
MGP.


 


STIPULATED PENALTIES


 


7.             MGP shall be liable for stipulated penalties for the
failure to comply with the terms of the CAO, as provided herein.  For the purposes of this section, compliance
shall mean timely and complete performance in accordance with the CAO.  If for any reason the compliance with
emission limits, or submission of any documents is delayed beyond the dates set
forth in this CAO, then upon written demand by KDHE, MGP agrees to pay
additional penalties as follows:


 


A.            For failure to submit or maintain compliance with
the source-wide allowable emission cap of 95 TPY for VOCs based on a 12-month
rolling sum, rolled monthly, and recorded monthly in paragraph 4 of this CAO
Amendment 2, will result in a $5,000 civil penalty for each month the 12-month
rolling average exceeds the 95 ton VOC cap.


 


B.            For failure to meet the dates as specified outlined
in the timeline or submit monthly reports by the end of each month in paragraph
4 of this Amendment 2 of the CAO, every day past the due date a $1,000 penalty
will be assessed.


 


8.             The Secretary of Health and Environment has reviewed
Amendment 2 to the CAO and finds that the action of this Amendment 2 is
consistent with the Kansas Air Quality Act and rules and regulations.  An executed copy will be provided to MGP upon
signature of the Secretary and the signed agreement will constitute the Final
Order of the Secretary in this manner.


 


	
  /s/
  Roderick L. Bremby

  	
   

  	
  /s/
  David E. Rindom

  
	
  Roderick
  L. Bremby, Secretary

  	
   

  	
  David
  E. Rindom, VP of HR

  
	
  Kansas
  Department of Health

  	
   

  	
  MGP
  Ingredients, Inc.

  
	
  And
  Environment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  5/20/2010

  	
   

  	
  Date:
  5/14/10

  



 


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