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s <br />SHARP,' ,-EINKE, SHERMAN & ENGL- LLC <br />Attorneys and Counselors at Law <br />401 Lincoln Avenue <br />P.O. Box 774608 <br />Steamboat Springs, Colorado 80477 <br />Telephone: (970) 879-7600 FAX: (970) 879-8162 <br />engle@sharpsteinke.com <br />r <br />MARK E. STEINKE <br />MELINDA H. SHERMAN <br />GARY S. ENGLE <br />LYNAIA M. SOUTII <br />THOMAS R. SHARP, <br />orCounsel <br />February 9, 2007 <br />Mr. Fred Duckels <br />Duckels Construction, Inc. <br />3500 Duckels Court <br />Steamboat Springs, CO 80487 <br />HAND DELIVERY <br />Re: My Client - Christopher Brown <br />Dear Mr. Duckels: <br />Please be advised that I represent Chris Brown, who, as you know, owns the real property adjacent <br />to your gravel mining operation at the Bettger Pit. <br />Mr. Brown advises that, unfortunately, the domestic well on his property has ceased production, <br />Preliminary investigation demonstrates that the diminished production of the Brown well is directly <br />related to your ongoing gravel mining operation at the Pit. <br />I have reviewed the 1990 Agreement between you and Gary Kline, the predecessor in interest to Mr. <br />Brown with regard to the subject property (copy enclosed). That Agreement requires Duckels to <br />install a water well that is guaranteed to produce four gallons of water per minute "until one year <br />after the gravel pit area reclamation is completed." In the event the well production falls below that <br />amount, Duckels is obligated to restore production. Further, Duckels agreed to indemnify and hold <br />Kline harmless flom any loss, including attorneys fees, due to a breach of the Agreement, warranty, <br />guarantee, covenant, or representation in the agreement. The Agreement is binding upon each of the <br />parties' heirs, successors, and assigns. Mr. Brown is the successor in interest of Mr. Kline, and the <br />Agreement remains binding on Duckels. <br />Mr. Brown also has common law rights protecting the use of his water well from interference, <br />entitling him bring a claim against Duckels for darnages based in tort, in addition to his contractual <br />rights under the Agreement. <br />Currently, Mr. Brown is hauling water to the property numerous times per week due to the failure <br />of the well. This letter shall serve to put Duckles on notice of the failure of Mr. Brown's well and <br />a demand upon Duckles to "immediately take such action as shall be necessary to increase the water <br />production to the four gallon per minute standard," as required under paragraph 2 of the Agreement.