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BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

RECEIVE

LERK'S

OFFICE

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

Board

PCB NO. 00-104

(Enforcement)

THE HIGHLANDS, LLC, an Illinois limited

liability corporation, and MURPHY

FARMS, LLC,

Respondents.

NOTICE OF FILING

To:

Mr. Charles M. Gering

Foley & Lardner

321 N. Clarke St.

Suite 2800

Chicago, IL 60610-4764

PLEASE TAKE NOTICE that on June 12, 2008, I mailed for filing with the Clerk of the

Pollution Control Board of the State of Illinois, a MOTION FOR RELIEF FROM HEARING

REQUIREMENT and STIPULATION AND PROPOSAL FOR SETTLEMENT WITH RESPONDENT

MURPHY FARMS, LLC, copies of which are attached hereto and herewith served upon you.

Respectfully submitted,

PEOPLE OF THE STATE OF ILLINOIS

LISA MADIGAN

Attorney General of the

State of Illinois

MATTHEW J. DUNN, Chief

Environmental Enforcement/Asbestos

Litigation Division

BY:7

ANE E. McBRIDE

Assistant Attorney General

Environmental Bureau

500 South Second Street

Springfield, Illinois 62706

217/782-9031

Dated: June 12, 2008

CERTIFICATE OF SERVICE

I hereby certify that I did on June 12, 2008, send by First Class Mail, with postage thereon

fully prepaid, by depositing in a United States Post Office Box a true and correct copy of the

following instruments entitled NOTICE OF FILING, MOTION FOR RELIEF FROM HEARING

REQUIREMENT and STIPULATION AND PROPOSAL FOR SETTLEMENT WITH

RESPONDENT MURPHY FARMS, LLC,

To:?

Mr. Charles M. Gering

Foley & Lardner

321 N. Clarke St.

Suite 2800

Chicago, IL 60610-4764

and the original and ten copies by First Class Mail with postage thereon fully prepaid of the

same foregoing instrument(s)

To:?

Dorothy Gunn, Clerk

Illinois Pollution Control Board

State of Illinois Center

Suite 11-500

100 West Randolph

Chicago, Illinois 60601

A copy was also sent by First Class Mail with postage thereon fully prepaid

To:

Mr. Brad Halloran, Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center, Ste. 11-500

100 West Randolph

Chicago, IL 60601

ane E. McBride

Assistant Attorney General

This filing is submitted on recycled paper.

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

PEOPLE OF THE STATE OF ILLINOIS,

Complainant,

PCB NO. 00-104

(Enforcement)

THE HIGHLANDS, LLC, an Illinois limited

liability corporation, and MURPHY

FARMS, LLC,

RECEIVED

LERK'S OFFICE

JUN 1 6 2008

STATE OF ILLINOIS

Pollution Control Board

Respondents.

MOTION FOR RELIEF FROM HEARING REQUIREMENT

NOW COMES Complainant, PEOPLE OF THE STATE OF ILLINOIS, by LISA

MADIGAN, Attorney General of the State of Illinois, and pursuant to Section 31(c)(2) of the

Illinois Environmental Protection Act ("Act"), 415 ILCS 5131(c)(2) (2006), moves that the Illinois

Pollution Control Board grant the parties in the above-captioned matter relief from the hearing

requirement imposed by Section 31(c)(1) of the Act, 415 ILCS 5/31(c)(1) (2006). In support of

this motion, Complainant states as follows:

The parties have reached agreement on all outstanding issues in this matter.

This agreement is presented to the Board in a Stipulation and Proposal for

Settlement, filed contemporaneously with this motion.

All parties agree that a hearing on the Stipulation and Proposal for Settlement is

not necessary, and respectfully request relief from such a hearing as allowed by Section

31(c)(2) of the Act, 415 ILCS 5/31(c)(2) (2006).

WHEREFORE, Complainant, PEOPLE OF THE STATE OF ILLINOIS, hereby requests

that the Board grant this motion for relief from the hearing requirement set forth in Section

31(c)(1) of the Act, 415 ILCS 5/31(c)(1) (2006).

Respectfully submitted,

PEOPLE OF THE STATE OF ILLINOIS

LISA MADIGAN

ATTORNEY GENERAL

MATTHEW J. DUNN, Chief

Environmental Enforcement/Asbestos

Assistant Attorney General

500 South Second Street

Springfield, Illinois 62706

217/782-9031

Dated: June 12, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

REC

CLERK'S

OFFICE

VED

PEOPLE OF THE STATE OF ILLINOIS?

JUN 1 6 2008

STATE OF ILLINOIS

Complainant,

Pollution Control Board

v.?

PCB No. 00-104

(Enforcement)

THE HIGHLANDS, LLC, an Illinois limited

)

liability corporation, and MURPHY

FARMS, LLC.?

)

Respondents.

STIPULATION AND PROPOSAL FOR SETTLEMENT

WITH RESPONDENT MURPHY FARMS, LLC

Complainant, PEOPLE OF THE STATE OF ILLINOIS, by LISA MADIGAN, Attorney

General of the State of Illinois, the Illinois Environmental Protection Agency ("Illinois EPA"), and

Murphy Farms, LLC ("Respondent", "Respondent Murphy", or "Respondent Murphy Farms,

LLC"), have agreed to the making of this Stipulation and Proposal for Settlement ("Stipulation")

and submit it to the Illinois Pollution Control Board ("Board") for approval. The parties agree

that the statement of facts contained herein represents a fair summary of the evidence and

testimony which would be introduced by the parties if a hearing were held. The parties further

stipulate that this statement of facts is made and agreed upon for purposes of settlement only

and that neither the fact that a party has entered into this Stipulation, nor any of the facts

stipulated herein, shall be introduced into evidence in any other proceeding regarding the

claims asserted in the Complaint. If the Board approves and enters this Stipulation,

Respondent agrees to be bound by the Stipulation and Board Order and not to contest their

validity in any subsequent proceeding to implement or enforce their terms.

JURISDICTION

The Board has jurisdiction of the subject matter herein and of the parties consenting

hereto pursuant to the Illinois Environmental Protection Act ("Act"), 415 ILCS 5/1 et seq. (2004).

II. AUTHORIZATION

The undersigned representatives for each party certify that they are fully authorized by

the party whom they represent to enter into the terms and conditions of this Stipulation and to

legally bind them to it.

III. STATEMENT OF FACTS

Parties

On December 21, 1999, a Complaint was filed on behalf of the People of the

State of Illinois by Lisa Madigan, Attorney General of the State of Illinois, on her own motion

and upon the request of the Illinois EPA, pursuant to Section 31 of the Act, 415 ILCS 5/31

(2004), against the Respondent.

On August 20, 2002, the Complainant filed an amended complaint in this matter.

On October 8, 2002, the amended complaint was entered pursuant to Hearing Officer Order.

On February 18, 2004, the Complainant filed a second amended complaint in

this matter. On May 6, 2004, the second amended complaint was entered pursuant to Board

Order.

On June 7, 2005, Respondent filed its Answer and Affirmative Defenses to

Complainant's Second Amended Complaint.

The Illinois EPA is an administrative agency of the State of Illinois, created

pursuant to Section 4 of the Act, 415 ILCS 5/4 (2004).

At all times relevant to the Complaint, Respondent was and is a corporation that

is authorized to transact business in the State of Illinois. At the time of filing of the original

Complaint in this matter, Respondent Murphy Farms, Inc., a/k/a Murphy Family Farms

("Murphy"), was a North Carolina corporation registered to do business in the State of Illinois in

good standing. The registered agent, at the time of the filing of the original complaint, was

Gerald W. Shea, 547 S. LaGrange Rd., LaGrange, IL 60525. Some time later, the registered

agent became Charles Gering, Esq., formerly of McDermott, Will & Emery, 227 West Monroe

Street, Chicago, Illinois 60606-5096. Since the time of filing of the original Complaint in this

matter, Murphy Farms, Inc. merged into Respondent Murphy Farms LLC, which is a subsidiary

of Murphy-Brown, LLC, which is the hog production group for and a subsidiary of Smithfield

Foods, Inc. Murphy-Brown, LLC is located at 4134 Highway 117 South, Rose Hill, North

Carolina 28458.

7. Respondent The Highlands, LLC ("Highlands") is a limited liability corporation,

registered and in good standing in the State of Illinois. Highlands is a member-managed LLC.

The members of the LLC are Douglas B. Baird, 1124 Knox Highway 18, Williamsfield, Illinois

61489; James R. Baird, 2218 Knox Road 100N, Yates City, IL 61572; and Patricia A. Baird,

2218 Knox Road 100N, Yates City, IL 61572. The registered agent is John J. Hattery, Suite

402, Hill Arcade, Galesburg, IL 61401.

Site Description

At all times relevant to the original and first amended Complaint, The Highlands

swine facility was operated and located just south of Williamsfield in the NE 1/4, Section 10,

T.10N, R.4E, Elba Township, Knox County, Illinois (the "facility" or "site"). The facility's offices

are located at 1122 Knox Highway 18, Williamsfield, IL 61489.

The facility is a 3,650 sow farrow-to-wean operation which includes a gestation

building, a breeding building, a farrowing building, a nursery and a finishing building. In terms

of animal units, 3,650 sows represents approximately 1,460 animal units.

Respondent Highlands LLC owns and operates the property and buildings.

Plaintiff contends that Respondents Highlands and Murphy shared in the operation of the

wastewater treatment facility, which Murphy denies, and Respondent Highlands provided labor

for operation of the facility.

At all times relevant to the original and first amended Complaint, Respondent

Murphy owned all of the hogs at the facility. Respondent Murphy had a contractual

arrangement with The Highlands. That contractual relationship ended and Murphy removed its

hogs from the facility as of January 1, 2003.

Construction of the facility began in the fall of 1997. Sows were first brought

into the facility on December 21, 1997. Livestock waste was first diverted to the multiple lagoon

system on December 28, 1997. At that time, four lagoons had been constructed and the

majority of the transfer piping had been installed.

The first count of the second amended complaint in this matter alleges that (1)

on numerous occasions, beginning in January 1998 and continuing through the present, the

Respondents have caused or allowed the emission of offensive hog odors from the facility; (2)

these odors have unreasonably interfered with the enjoyment of life and property by

neighboring residents by preventing or disrupting outdoor activities and by invading or

penetrating their homes and vehicles causing physical discomfort, including in some cases

gagging, nausea, sore and/or burning nose and throat, and headache; and (3) such physical

discomfort has also included the physical and emotional revulsion an individual might

experience when subjected to highly offensive odors. Murphy disputes that it controlled, or had

the ability to control, operation of the facility, and denies each of these allegations.

On June 19, 2002, Respondent Highlands reported a release of livestock waste

to the Illinois Emergency Management Agency ("IEMA") . Respondent Highlands reported that

the release occurred on June 18, 2002. The release resulted from the land application of waste

from the facility.

The waste discharged to an unnamed tributary of French Creek. The waste

entered the unnamed tributary at the outlet of two field tiles south of Interstate Highway

1-74.

In the course of the investigation, the Illinois EPA inspectors were informed by

the operator of the Highlands facility that no actions were taken to pump out, barricade or

otherwise stop the release once the facility became aware of the release, which was at

approximately 4:45 P.M. on June 18, 2002. The release was not reported to IEMA until

approximately 9:15 A.M. on June 19, 2002. The owner and operator of the Highlands reported

the waste had dissipated and there was nothing to contain. The Illinois EPA received

notification from IEMA at approximately 9:55 A.M. on June 19, 2002. Upon arrival at the

release site, Illinois EPA inspectors recognized that the unnamed tributary had suffered a fish

kill and they immediately contacted the Illinois Department of Natural Resources ("Illinois DNR")

to conduct a fish kill investigation.

10.

An Illinois DNR fisheries biologist conducted a fish kill investigation on Juny 19,

2002. The biologist estimated that approximately 6,600 fish were killed by the release. The

species killed included seven minnow species, two species of darter, and green sunfish. The

biologist observed that the liquid swine manure spill was sufficient in quantity to kill all fish and

crayfish in the 1.54 mile length of the tributary and that the dead fish observed at the five count

stations were killed in an estimated time period of 6 to 24 hours prior to his investigation.

11.

Murphy denies that it had any role in the land application of waste from the

facility at any time.

C.?

Allegations of Non-Compliance

Complainant contends that Respondent Murphy has violated the following provisions of

the Act and Board regulations:

Count I

Complainant alleges that the facility has been a continuous source of offensive

odors both from the confinement buildings and the lagoon system. Complainant further alleges

that these two odor sources are related to the Respondents' choice 'and design of the buildings

and waste treatment system. Murphy denies that it had any role in Highlands' choice and

design of the buildings and waste treatment system, and that the facility has been a continuous

source of offensive odors.

Complainant alleges that Respondent Murphy has caused the emission of

strong, persistent and unreasonably offensive hog waste odors from the Highlands facility so as

to cause unreasonable interference with the use and enjoyment of the neighbors' property, and

that Respondent Murphy has caused air pollution, thereby violating Section 9(a) of the Act, 415

ILCS 5/9(a)(1998). Murphy denies each of these allegations.

Count II

Complainant alleges that by failing to follow the Illinois EPA rules which require

immediate reporting of releases to surface waters, set forth at 35 III. Adm. Code 580.105, the

Respondents failed to exercise proper due diligence in mitigating this release. Complainant

further alleges that early notification may have allowed the Illinois EPA to investigate the

release a day earlier which, in turn, may have allowed for implementation of corrective action to

minimize the impact of the release. Murphy denies that it had any role in the land application of

waste from the facility at any time, and that it violated any provision of the Act relating to water

pollution.

Complainant alleges that by causing or allowing the discharge of livestock waste

to the unnamed tributary of French Creek so as to cause or tend to cause water pollution,

Respondent Murphy has violated Section 12(a) of the Act, 415 ILCS 5/12(a) (2002), and 35 III.

Adm. Code 302.203. Murphy denies that it had any role in the land application of waste from

the facility at any time, and that it violated any provision of the Act relating to water pollution.

Complainant alleges that by causing or allowing the discharge of livestock waste

to the unnamed tributary of French Creek so as to cause total ammonia levels to exceed 15

mg/L and unionized ammonia nitrogen levels to exceed the acute standard of 0.33 mg/L,

Respondent Murphy has violated Section 12(a) of the Act, 415 ILCS 5112(a)(2002), and 35 III.

Adm. Code 302.212(a) and (b). Murphy denies that it had any role in the land application of

waste from the facility at any time, and that it violated any provision of the Act relating to water

pollution.

Complainant alleges that by causing or allowing the deposit of livestock waste

upon the land in such place and manner so as to create a water pollution hazard, Respondent

Murphy has violated Section 12(d) of the Act, 415 ILCS 5/12(d) (2002), and 35 III. Adm. Code

501.405(a). Murphy denies that it had any role in the land application of waste from the facility

at any time, and that it violated any provision of the Act relating to water pollution.

Complainant alleges that by causing, threatening or allowing the discharge of a

contaminant into the waters of the State without an NPDES permit, Respondent Murphy has

violated Section 12(f) of the Act, 415 ILCS 5/12(f) (2002). Murphy denies that it had any role in

the land application of waste from the facility at any time, and that it violated any provision of

the Act relating to water pollution.

No Admission of Violations

Respondent Murphy Farms LLC neither admits nor denies that the facility was the

source of unreasonably offensive odors in 1999, 2000 and 2001, as alleged in the Second

Amended Complaint. Murphy disputes that it controlled, or had the ability to control, operation

of the facility and denies that it had any role in Highlands' choice and design of the buildings

and waste treatment system. Respondent Murphy denies each and every violation alleged

against Respondent Murphy in the Second Amended Complaint filed in this matter and

referenced herein.

Compliance Activities to Date

Respondent Murphy has terminated its contractual obligations at the Highlands' facility.

IV. APPLICABILITY

This Stipulation shall apply to and be binding upon the Complainant and the

Respondent, and any officer, director, agent, or employee of the Respondent, as well as any

successors or assigns of the Respondent. The Respondent shall not raise as a defense to any

enforcement action taken pursuant to this Stipulation the failure of any of its officers, directors,

agents, employees or successors or assigns to take such action as shall be required to comply

with the provisions of this Stipulation.

V. COMPLIANCE WITH OTHER LAWS AND REGULATIONS

This Stipulation in no way affects the responsibilities of the Respondent to comply with

any other federal, state or local laws or regulations including, but not limited to, the Act and the

Board regulations, 35 III. Adm. Code, Subtitles A through H.

VI. IMPACT ON THE PUBLIC RESULTING FROM ALLEGED NON-COMPLIANCE

Section 33(c) of the Act, 415 ILCS 5/33(c)(2004), provides as follows:

In making its orders and determinations, the Board shall take into

consideration all the facts and circumstances bearing upon the

reasonableness of the emissions, discharges, or deposits involved

including, but not limited to:

the character and degree of injury to, or interference with the

protection of the health, general welfare and physical property of

the people;

the social and economic value of the pollution source;

the suitability or unsuitability of the pollution source to the area in

which it is located, including the question of priority of location in

the area involved;

the technical practicability and economic reasonableness of

reducing or eliminating the emissions, discharges or deposits

resulting from such pollution source; and

any subsequent compliance.

In response to these factors, Complainant asserts as follows:

1.?

The violations of the Act alleged in the Second Amended Complaint adversely

impacted the environment. Specifically, Complainant contends that the emission of offensive

livestock odors caused air pollution and the release of livestock waste to the unnamed tributary

of French Creek caused water pollution. Murphy denies each of these allegations.

Complainant contends that (1) between January 1998 and December 1998, the Illinois

EPA received approximately 110 complaints submitted by neighbors of the facility alleging odor

coming from the facility that unreasonably interfered with life and/or property, (2) between

January 1999 and November 1999, the Illinois EPA received approximately 120 complaints

submitted by neighbors of the facility alleging odor coming from the facility that unreasonably

interfered with life and/or property, (3) throughout 2000 and 2001, the Illinois EPA continued to

receive complaints alleging odor emanating from the facility which unreasonably interfered with

life and/or property, (4) during the spring of 2001, the frequency, duration and number of

households filing complaints regarding nuisance odors emanating from the Highlands facility

increased, (5) complainant has not received continuous odor complaints regarding the facility

since 2002, and has not received a single neighbor complaint against the facility since April

2003, and (6) respondents Murphy and Highlands settled a private nuisance suit with two

neighbors who live within a quarter mile of the facility early in 2002. Murphy denies that odors

emanating from the facility unreasonable interfered with the life and/or property of any of the

facility's neighbors at any time.

Complainant further contends that (1) a June 18, 2002 release of livestock waste from

the Highlands' facility into an unnamed tributary of French Creek resulted in a fish kill, (2) an

Illinois DNR fisheries biologist estimated that approximately 6,600 fish were killed by the

release, (3), the biologist observed that the liquid swine manure spill was sufficient in quantity to

kill all fish and crayfish in the 1.54 mile length of the tributary and that the dead fish observed at

the five count stations were killed in an estimated time period of 6 to 24 hours prior to his

investigation, (4) by failing to follow the Illinois EPA rules which require immediate reporting of

releases to surface waters, set forth at 35 III. Adm. Code 580.105, the Respondents failed to

exercise proper due diligence in mitigating this release, and (5) early notification may have

allowed the Illinois EPA to investigate the release a day earlier which, in turn, may have allowed

for implementation of corrective action to minimize the impact of the release. Murphy denies

that it had any role in the land application of waste from the facility at any time, and that it

violated any provision of the Act relating to water pollution.

Complainant contends that the Highlands' facility can only be of economic and

social value to the surrounding community, to the Highlands' employees, and to the Highlands'

customers, if it is operated in a fashion that does not violate Illinois environmental laws and

regulations.

Complainant contends that the Highlands' facility as designed and operated is

not suitable to the site where it is located, and that given the size and design of the facility, it

was sited and constructed in a location too close to neighboring residents. Murphy denies each

of these allegations.

Complainant contends that: (1) alternate waste treatment facility designs were

available at the time of construction of the facility that are capable of minimizing the release of

odors, including the following: provide a cover for the lagoons to prevent the escape of odorous

gases; capture and flare (and/or utilize) gas from the entire waste management system; install

a system utilizing an enclosed, temperature controlled anaerobic digester and provide sufficient

aeration to the storage basin receiving the digester effluent to maintain aerobic conditions;

provide for twice weekly draining of the underfloor manure storage pits and re-filling with odor

free water with a dissolved oxygen concentration in excess of 2.0 mg/I; provide adequate

filtration for exhaust air generated at the swine confinement buildings; reduce organic loading

on the treatment system by reducing the population of hogs in the facility; (2) it was and

continues to be economically reasonable to have originally installed or to modify the existing

system utilizing one or more of the alternatives listed immediately above; (3) if the Highlands

facility does not incur the cost of adequate odor controls, the alternative is for the neighbors to

be burdened with costs associated with attempting to treat, screen and otherwise avoid air

pollution emissions from this facility; and (4) the neighbors are further burdened with the

inevitable injury to general welfare that results from continual exposure to air pollution. Murphy

denies each of these allegations.

Complainant further contends that the release of livestock waste to the unnamed

tributary of French Creek could have been prevented by exercising continuous monitoring

during wastewater irrigation activities at all fields. Further, Complainant contends that by failing

to follow the Illinois EPA rules which require immediate reporting of releases to surface waters,

set forth at 35 III. Adm. Code 580.105, the Respondents failed to exercise proper due diligence

in mitigating this release. Complainant asserts that early notification may have allowed the

Illinois EPA to investigate the release a day earlier which, in turn, may have allowed for

implementation of corrective action to minimize the impact of the release. Murphy denies that it

had any role in the land application of waste from the facility at any time, and that it violated any

provision of the Act relating to water pollution.

5.?

Complainant contends that Respondents have failed to bring the facility into

compliance. It is the Complainant's position that implementation of a BioSun system did not

provide sufficient reduction in odor emissions and may have, in fact, resulted in increased

emissions during the spring of 2001. Respondents installed an air dam at the east end of the

facility's building during the spring of 2001. No analysis has been conducted as to the

effectiveness of the air dam in averting air flows and odor emissions. Practical experience

indicates that the dam may have been effective during the day, during times of unstable

atmospheric conditions. However, Complainant contends that during times of stable

atmospheric conditions and temperature inversions, the odor conditions at a neighbor residence

a quarter mile from the facility were actually worse and more penetrating. Inspectors observed

that quite a bit of dust from the facility settled out of the air when it hit the air dams. Since

odor-causing particles typically adhere to dust particles in the air, this suggests that odor

removal was taking place as a result of the placement of the air dams. Murphy admits that an

air dam was installed during the spring of 2001, but denies each of the remaining allegations

set forth in this paragraph.

With regard to the alleged June 18, 2002 release of livestock waste to an unnamed

tributary of French Creek, Complainant contends that Respondents' failure to immediately

report the release to surface waters constitutes a failure to exercise proper due diligence in

mitigating this release. Murphy denies that it had any role in the land application of waste from

the facility at any time, and that it violated any provision of the Act relating to water pollution.

In response to these Section 33(c) factors, Murphy states as follows:

Murphy denies that any injury to, or interference with the protection of the health,

general welfare and physical property of the people occurred.

Murphy asserts that Highlands' facility has significant value to the surrounding

community, to Highlands' employees and to Highlands' customers, and that its value is not

diminished by the presence of odors commonly associated with raising livestock, especially

given that the General Assembly recognized at 35 Illinois Administrative Code Section 501.102

that the presence of such odors is an inherent characteristic of such facilities.

Murphy asserts that Highlands' facility is suitable to the agricultural area in which

it is located,'and that it was sited by Highlands consistently with all applicable statutes and

regulations:,

Murphy further asserts that Highlands' land application of livestock waste is a

suitable and, indeed, beneficial means of using such waste.

Murphy asserts that the odor control technology used at Highlands' facility has,

at all times, been state-of-the-art, that such technology has adequately controlled odors

generated at the facility, and that at no time was it technically practicable or economically

reasonable for Highlands to reduce or eliminate emissions from its facility.

Murphy asserts that it had no ability to control, and that it did not control, the

operation of Highlands' facility at any time.

Murphy asserts that it complied with all applicable state, federal and local

environmental laws and regulations, including all applicable reporting requirements, throughout

its relationship with Highlands.

VII. TERMS OF SETTLEMENT

A.?

Monetary Payment

1.?

The Respondent shall make a monetary payment in the sum of Thirty-Five

Thousand Dollars ($ 35,000.00) to the University of Illinois, College of Agriculture, Consumer

and Environmental Sciences, for the college's Discovery Farms research project. Said

payment shall be made within thirty (30) days from the date the Board adopts and accepts this

Stipulation. The Respondent stipulates that payment has been tendered to Respondent's

attorney of record in this matter in a form acceptable to that attorney. Further, Respondent

stipulates that said attorney has been directed to make the payment on behalf of Respondent,

within thirty (30) days from the date the Board adopts and accepts this Stipulation, in the

manner prescribed below. The payment described in this Stipulation shall be paid by certified

check, money order or electronic funds transfer to the University of Illinois, designated for the

Discovery Farms research project, and submitted to:

University of Illinois, Urbana-Champaign

Office of Sponsored Programs & Research Administration

1901 South First Street

Suite A - MC685

Champaign, IL 61820

The name and number of the case and Respondent's Federal Employer Identification Number

("FEIN") shall appear on the check. A copy of the certified check, money order or record of

electronic funds transfer and any transmittal letter shall be sent to:

Jane E. McBride

Assistant Attorney General

Environmental Bureau

500 South Second Street

Springfield, Illinois 62702

and

Charles Gunnarson

Assistant Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

The parties agree that interest shall accrue on any payment not paid within the

time period prescribed above at the maximum rate allowable under Section 1003(a) of the

Illinois Income Tax Act, 35 ILCS 5/1003 (2004). Interest on any unpaid payment shall begin to

accrue from the date the payment is due and continue to accrue until the date payment is

received. When partial payment(s) are made, such partial payment shall be first applied to any

interest on unpaid payment then due and owing. All interest on payment owed shall be paid by

certified check, money order or electronic funds transfer, payable to the Illinois EPA, designated

to the Illinois Environmental Protection Trust Fund and delivered to the address and in the

manner described above.

For purposes of payment and collection, Respondent may be reached at the

321 North Clark Street

Suite 2800

Chicago, Illinois 60610

In the event of default of this Section VIII.A, the Complainant shall be entitled to

all available relief including, but not limited to, reasonable costs of collection and reasonable

attorney's fees.

Agreement Not to Violate

Respondent Murphy hereby agrees not to and shall not violate the Act and Board

Regulations that were the subject matter of the Complaint as outlined in Section III.0

("Allegations of Non-Compliance") of this Stipulation.

Release from Liability

In consideration of the Respondent's monetary payment of $35,000.00 and agreement

not to violate the Act and Board regulations in the future, upon the Pollution Control Board's

acceptance and approval of the terms of this Stipulation and Proposal for Settlement, the

Complainant releases, waives and discharges the Respondent from any further liability or

penalties for the alleged violations of the Act and Board Regulations that were the subject

matter of the Second Amended Complaint herein. The release set forth above does not extend

to any matters other than those expressly specified in Complainant's Second Amended

Complaint filed on May 6, 2004. The Complainant reserves, and this Stipulation is without

prejudice to, all rights of the State of Illinois against the Respondent with respect to all other

matters, including but not limited to, the following:

criminal liability;

liability for future violation of state, federal, local, and common laws and/or regulations;

liability for natural resources damage arising out of the alleged violations; and

liability or claims based on the Respondent's failure to satisfy the requirements of this

Stipulation.

Nothing in this Stipulation is intended as a waiver, discharge, release, or covenant not to

sue for any claim or cause of action, administrative or judicial, civil or criminal, past or future, in

law or in equity, which the State of Illinois or the Illinois EPA may have against any person, as

defined by Section 3.315 of the Act, 415 ILCS 5/3.315, or entity other than the Respondent.

Modification of Stipulation

The parties may, by mutual written consent, agree to extend any compliance dates or

modify the terms of this Stipulation. A request for any modification shall be made in writing and

submitted to the contact persons identified in Section VIII.A. Any such request shall be made

by separate document, and shall not be submitted within any other report or submittal required

by this Stipulation. Any such agreed modification shall be in writing, signed by authorized

representatives of each party, and shall accompany a joint motion to the Illinois Pollution

Control Board seeking a modification of the prior order approving and the Stipulation to

approve and accept the Stipulation as amended.

Enforcement of Board Order

Upon the entry of the Board's Order approving and accepting this Stipulation and

Proposal for Settlement, that Order is a binding and enforceable order of the Illinois Pollution

Control Board and may be enforced as such through any and all available means.

Respondent Murphy agrees that notice of any subsequent proceeding to enforce

the Board Order approving and accepting this Stipulation and Proposal for Settlement may be

made by mail and waives any requirement of service of process.

The parties agree that, if the Board does not approve and accept this Stipulation

and Proposal for Settlement, then neither party is bound by the terms herein.

It is the intent of the Complainant and Respondent Murphy that the provisions of

this Stipulation and Proposal for Settlement and any Board Order accepting and approving such

shall be severable, and should any provision be declared by a court of competent jurisdiction to

be inconsistent with state or federal law, and therefore unenforceable, the remaining clauses

shall remain in full force and effect.

WHEREFORE, Complainant and Respondent Murphy Farms, LLC request that the

Board adopt and accept the foregoing Stipulation and Proposal for Settlement as written.

PEOPLE OF THE STATE OF ILLINOIS,

LISA MADIGAN

Attorney General

State of Illinois

MATTHEW J. DUNN, Chief

Environmental Enforcement/

Asbestos Litigation Division

Assistant Attorney General

NameZ

ILLINOIS ENVIRONMENTAL