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EXHIBIT
<br />OBLIGATION TO ANSWER AND REQUEST FOR HEARING
<br />Pursuant to § 25-8-603, C.R.S., and 5 CCR 1002, § 21.11 you are required to submit to the Division an answer
<br />affirming or denying each paragraph of the Findings of Fact and responding to the Notice of Violation. The
<br />answer shall be filed no later than thirty (30) calendar days after receipt of this action.
<br />Section 25-8-603, C.R.S., and 5 CCR 1002, § 21.11 also provide that the recipient of a Notice of Violation
<br />may request the Division to conduct a public hearing to determine the validity of the Notice, including the
<br />Findings of Fact. Such request shall be filed in writing with the Division and include the information specified
<br />in 5 CCR 1002, § 21.4(B)(2). Absent a request for hearing, the validity of the factual allegations and the
<br />Notice of Violation shall be deemed established in any subsequent Department proceeding. The request for
<br />hearing, if any, shall be filed no later than thirty (30) calendar days after issuance of this action. The filing of
<br />an answer does not constitute a request for hearing.
<br />FALSIFICATION AND TAMPERING
<br />Be advised, in accord with § 25-8-610, C.R.S., that any person who knowingly makes any false statement,
<br />representation, or certification in any application, record, report, plan, or other document filed or required to
<br />be maintained under the Colorado Water Quality Control Act or who falsifies, tampers with, or knowingly
<br />renders inaccurate any monitoring device or method required to be maintained under this article is guilty of a
<br />misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than ten thousand dollars,
<br />or by imprisonment in the county jail for not more than six months, or by both such fine and imprisonment.
<br />POTENTIAL CIVIL AND CRIMINAL PENALTIES
<br />You are also advised that any person who violates any provision of the Colorado Water Quality Control Act
<br />(the "Act"), §§ 25-8-101 to 803, C.R.S., or of any permit issued under the Act, or any control regulation
<br />promulgated pursuant to the Act, or any final cease and desist order or clean-up order issued by the Division
<br />shall be subject to a civil penalty of not more than ten thousand dollars per day for each day during which such
<br />violation occurs. Further, any person who recklessly, knowingly, intentionally, or with criminal negligence
<br />discharges any pollutant into any state waters commits criminal pollution if such discharge is made without a
<br />permit, if a permit is required by the Act for such discharge, or if such discharge is made in violation of any
<br />permit issued under the Act or in violation of any Cease and Desist Order or Clean-up Order issued by the
<br />Division. By virtue of issuing this Notice of Violation / Cease and Desist Order, the State has not waived its
<br />right to bring an action for penalties under §§ 25-8-608 and 609, C.R.S, and may bring such action in the
<br />future.
<br />RELEASE OR DISCHARGE NOTIFICATION
<br />Pursuant to § 25-8-601, C.R.S., you are further advised that any person engaged in any operation or activity
<br />which results in a spill or discharge of oil or other substance which may cause pollution of the waters of the
<br />state, shall notify the Division of the discharge. If said person fails to so notify, said person is guilty of a
<br />misdemeanor, and may be fined or imprisoned or both.
<br />Peabody Sage Creek Mining, LLC
<br />f/k/a Sage Creek Coal Company, LLC
<br />Notice of Violation/Cease and Desist Order
<br />Page 10 of II
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