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page 2 LB MD-97-210 5. Pond 1. Pond 1 is a relatively new lined pond designed an constructed as a Class 15 pond. This pond appears to be in excellent condition. With the amount of grading, paving or resurfacing that will be performed on this site, we would like to reserve the right to use the pond as a storm retention pond. This pond does not appear poses a hazard to the environment. It is however, extremely dangerous to anyone that might accidentally enter or fall into it. To date there have been several dogs and at least one person needing assistance and were rescued. A perimeter fence shall be installed for safety reasons. Schedule: 3 months. This overall Phase I effort is expected to take between six months and one year. We believe that none of the above issues are environmental, therefore, we plan to improve the schedule as much as possible. PHASE Ii. Phase 11 will address the environmental issues. 1. Removal of all petroleum underground storage tanks (UST) according to County and State Regulatory Requirements. Schedule: 6 to 12 months. 2. Pond 2 will be regraded, compacted to 90%-95% compaction and crowned to drain away and create an impermeable surface. Schedule: 6 to 12 months. 3. The monitoring of three test wells will be performed annually. 4. Injection well. The injection well will be closed or modified as required by EPA Region 9. We are discussing closure with EPA and are working on preliminary plans. Approved plans will be submitted within 90 days of Indemnification Agreement Approval. Schedule: 6-18 months. This Phase II effort is expected to take between one and three years, dependent upon regulatory and permit requirements. PHASE III. Phase III is tentative at this point and will be dependent upon the economic conditions, County Planning Commission, acceptance of the proposed land use and permitting. 1. We are currently investigating placing a structure over Pond 2 to keep the rain water from percolating into the groundwater. This will be conditional upon identifying an industry or tenant that is environmentally compatible with the site. 2. Mr. Warmerdam currently receives water from the site. It is not our intent to curb or otherwise restrict Mr. Warmerdam's water supply. We may however, request that some form of compensation by Mr. Warmerdam, for the costs associated with maintaining the well and pump. Phase III is expected to take between three to five years, dependent upon the above noted factors, regulatory and permit recluiremews.