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BURNS, FIGA & WILL, P.C. <br /> Cheryl Linden <br /> June 9, 1995 <br /> Page 5 <br /> Response: Please see Section 1.5, Rental of Equipment/Vehicles, in the documentation provided <br /> previously. <br /> As indicated, the following pieces of equipment, owned by Pitkin Iron, were rented to <br /> MCR for use in reclamation and clean-up: <br /> 79 Mack Water truck <br /> 75 Mack #9 Flatbed <br /> Autocar Dump truck <br /> 79 Mack #11 Dump truck <br /> 74 Chevy Fuel truck <br /> 85 Mack Tractor <br /> 64 LDK Lowboy trailer <br /> 77 Tra Float trailer <br /> 87 HMD Rock trailer <br /> 966D Cat Loader <br /> 966C Cat Loader <br /> Hough Loader <br /> 14E Grader <br /> The first nine items were taken to Coal Basin and used extensively for site maintenance <br /> and reclamation. The last four items were retained on a standby, priority basis for MCR's use, <br /> and were used periodically. In addition, two pick-up trucks were rented to MCR to transport <br /> the reclamation crew. <br /> The rental rate of$3,000 for thirteen pieces of equipment is substantially below market <br /> rental rates. Normal practice within the marketplace is for the lessee to pay for maintenance, <br /> fuel, oil, and insurance on the equipment. Maintenance and fuel costs for which Pitkin Iron <br /> seeks reimbursement are those incurred for the equipment rented to MCR during the rental <br /> period. Rental charges were adjusted for decreased use during the winter months of 1994. <br /> Section 1.5 contains a list of all equipment owned by Pitkin Iron as of January 1, 1993. <br /> Pitkin Iron had suspended operations and was then in the process of selling off its equipment, <br /> retaining those pieces used for reclamation. <br /> Charges to MCR for fuel and maintenance costs apply only to equipment used by MCR <br /> during the time it was being rented. As indicated in the documentation provided, the insurance <br /> charge for equipment and vehicles has been apportioned and is confined to the equipment <br /> retained for use by MCR, and adjusted to reflect the level of usage. <br />