NOTICE OF VIOLATION

Via Certified Mail# _______________ Via Certified Mail#_______________

To: Sidney Taurel, President Rebecca O. Kendall, Registered Agent

Eli Lilly and Company Eli Lilly and Company

Lilly Corporate Center Lilly Corporate Center

Indianapolis, IN 46285 Indianapolis, IN 46285

Case No. 2001-10783-A

Based on investigation by designated representatives of the Indiana Department of Environmental Management (IDEM), Eli Lilly and Company's Clinton Laboratories located at 10500 South State Road 63, in Clinton, Indiana, was in violation of the following environmental statute(s), rule(s), and/or permit(s):

A. Pursuant to Permit No. 165-2846, operating condition 4, all conditions of the Experimental Use Order issued to Eli Lilly and Company ("Lilly") on November 27, 1995, shall become part of said permit, with the exception of conditions A, B, E.7, and H. Condition D of this Experimental Use Order requires, in relevant part, that the permittee equip the regenerative thermal oxidizers ("RTO") at this source with continuous emission rate monitoring systems ("CERMS") that measure and record the emissions of carbon monoxide from the RTOs as mass per unit time. According to the quarterly reports, for the carbon monoxide CERMS associated with RTO 1, this monitor was not generating valid data for 6% of the fourth quarter 2000 and 8.67% of the second quarter 2001, violations of Permit No. 165-2846, operating condition 4, and more specifically Condition D of the Experimental Use Order.

In accordance with IC 13-30-3-3, the Commissioner is required to notify an alleged violator in writing that a violation may exist and offer an opportunity to enter into an Agreed Order providing for the actions required to correct the violations and for the payment of a civil penalty. The Commissioner is not required to extend this offer for more than sixty (60) days.

Entering into an Agreed Order will prevent the issuance of a Notice and Order of the Commissioner under IC 13-30-3-4, or the filing of a civil court action under IC 13-14-2-6. IDEM encourages settlement by Agreed Order, thereby saving time and resources. Timely settlement by Agreed Order may result in a reduced civil penalty. Settlement discussions will also allow the opportunity to present any mitigating factors that may be relevant to the violations. In addition, as provided in IC 13-30-3-3, an alleged violator may enter into an Agreed Order without admitting that the violation occurred.

If settlement is not reached within sixty (60) days of receipt of this Notice of Violation, the Commissioner may issue a Notice and Order containing the actions that must be taken to achieve compliance, the required time frames, and an appropriate civil penalty. Pursuant to IC 13-30-4-1, the Commissioner may assess penalties of up to $25,000 per day for each violation.

To discuss this matter further, please contact Matthew Stuckey at (317) 233-1134 within fifteen (15) days after receipt of this Notice to request a conference. If settlement is reached, an Agreed Order will be prepared and sent for review and signature.

For the Commissioner:

Date: _______________ __Signed on 4/17/02_____

Felicia A. Robinson

Deputy Commissioner

for Legal Affairs

cc: Jean Bauer, U. S. EPA Region 5

Vermillion County Health Department

Jay Rodia, Office of Legal Counsel

Jim Thorpe, Office of Air Quality

Matthew Stuckey, Office of Enforcement

Enforcement File

Public File

http://www.ai.org/idem/