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Mr. Rodney D. Knutson October Z5, 1990 Page 2 Following, there have been telephone conversations between Mrs. Fraser and Mark Steen and between yourself and Mrs. Fraser. There followed a proposal by your letter of March 15, 1990. This was unacceptable because it did not meet company requirements to reliably put the mill into operation at tht time. This requirement to proceed under an acceptable arrangement providing for dispostion of this COM, Inc. asset was not met. Hy our letter of April 16, we reaffirmed it was the interest of the Erasers the mill be placed into production as soon as practicable. We observed then, as we do now, this asset has been allowed to remain Idle far too long. Hy our letter of April 16, we outlined how these assets might be treated within the context of an agreement among all parties. Your May 4 reply described several matters you perceived Herded to be addrtsaed to put the mill into operation. You listed these in your letter paragraphs (a) through (t). At that time (May 4) you expressed a lack of certainty as to how profitable it would be for us to get together in Denver. You suggested we prepaze a draft of what we would advance as an option to extend to Mi Vida to acquire the mill. We did not respond because we had presented the offer to Mt vtda in November which contained our most generous terms. We perceived it no advantage to present a supplemental draft then to accomplish this same purpose. We wrote on July 12 and reaffirmed the willingness of COM, Inc. to sell the mill for the $1,500,000 price, X500,000 cash on closing with the balance paid out of mill operations over a thret-year period. This reaffirmed the November, 1989 offer predicated upon a recognition of the Fraser ffi1,500,000 allocated to the mill with the balance to the limited partnership in Gold Hill Ventures. 1n this letter we again declared Eraser's willingness to Inter into a limited partnership agreement, substantially to the form previously presented. The Hmited partnership interest of Frasera would then be / 696 reflecting the #600,000 allocation to the venture with $1,500,000 allocation to the mill.