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G~~~~O ' - R~ ~ 31985 RE~E/VEQ FF-g p\o9y JiQ^/ M~e~a\s~Ge SETTLEMENT AGREEMENT ~~V/S/ 3~ X995 I . PA~~aE~~~ 01 M~7erg~s ~ ~~o%9Y This settlement agreement (Agreement) is entered into between: Kerr Coal Company (Kerr); the Division of Minerals and Geology (DMG), Colorado Department of Natural Resources; and the Office of Surface Mining Reclamation and Enforcement (OSM), U.S. Department of the Interior. II. PURPOSE. The purpose of this Agreement is to settle: 1) the pending litigation before the Office of Hearings and Appeals (OHA), U.S. Department of the Interior, in Kerr v. OSM, Docket Nos. DV 94-12-R, DV 94-18-R, DV 94- 20-R, DV 95-1-P, and DV 95-2-P; 2) the pending litigation before the U.S. District Court for the District of Colorado (the Court) in Kerr v. Babbitt, Civil Action No. 94-Z-2463; 3) the proposed and potential civil penalty assessments by oSM against Kerr and its officers and directors arising from notice of violation (NOV) No. 94-020-352-003, ces- sation order (the CO) No. 94-020-250-1, and NOV No. 94- 020-352-006; and 4) the terms for compliance with the approximate original contour (AOC) requirements of the Pit i area of the Marr Strip Mine (the Mine) near Walden, Colorado. III. Kerr is the permittee under permit No. C-80-006 (the Permit) of the Mine. Kerr is required by the Colorado regulatory program (the Colorado program) approved by OSM under the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C. §§ 1201-1328, to restore Pit 1 at the Mine to AOC. A dispute arose among the parties to this Agreement when repre- sentatives of the OSM Albuquerque Field Office determined that Kerr had failed to achieve AOC at Pit i and, consequently, issued to Kerr: NOV No. 94-020-352-003 (for Kerr's alleged failure to achieve AOC in the portion of Pit 1 containing Federal lands); the Co (for Kerr's alleged failure to timely abate NOv No. 94-020-352-003); and