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HOLLAND&HARTo ~ January 16,2004 THE LAW OUT W E 5 T Page 2 this agreement was entered into, it was anticipated by each of the parties that Denver Water would eventually line the gravel pit to produce a water storage reservoir. The construction of a slurry wall was one possible method of lining. Section 7.6 of the Purchase and Sale Agreement on page 14 addresses this issue. That section provides that Denver Water (as Buyer) "will secure all necessary permits and approvals for such activities, including, but not limited to amendment of the mined land reclamation plan and special use permit." Section 7.13 on page 16 provides that Denver Water will indemnify Campbell's/Suburban for any penalties, fines, costs, or liabilities incurred under and/or pursuant to all applicable environmental laws, regulations and ordinances arising because of environmental conditions caused by or resulting from any activities or inaction of Denver Water on the Roadrunners property. Pursuant to this Agreement, Suburban is obligated to allow Denver Water to line the Roadrunners gravel pit if it does not interfere with Suburban's mining of the property. Denver Water was required to secure any necessary permit amendments to allow these activities to go forward. Suburban is not in control of the construction of the slurry wall and has no ability to modify it, slow it down, or terminate it. The contractor responsible for construction of the slurry wall is not subject to Suburban's control. Suburban is perfectly willing to cooperate with Denver Water and the Division of Minerals and Geology in the submission of an amendment to the existing mining permit to address the slurry wall activity, together with a change to the post-mining land use. Suburban is not in violation of its mining permit or its associated reclamation plan. It is my understanding that the "reason to believe" letter dated January 5, 2004 from Ronald Cattany concerning the Roadrunners mining permit was directed to Suburban because it is the permitted operator for this site. It must be recognized, however, that Suburban's activities on the Roadrunners site are in compliance with the mining permit. The alleged permit violations are all activities being conducted by, or under the direction of, Denver Water. While Suburban is the operator under this mining permit, it is not a "violator" pursuant to C.R.S. § 34-32.5-124, and any order issued or penalty imposed should not be directed to Suburban but to the alleged violator. It is our understanding that Denver Water has waived the 30-day notice requirement and intends to appear at a hearing with the Mined Land Reclamation Board on January 20, 2004. Suburban does not waive its right to a 30-day notice. This letter will constitute Suburban's written request to review any draft order relating to the Roadrunners gravel pit. The draft order should be provided to: