1992-08-13_GENERAL DOCUMENTS - C1981017

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J. Work. That to be performed as the Contractor's obligations under the Contract Documents. II. SCOPE OF THE WORK A. Removal. Dismantling and Preparation of Equipment for Sale. Contractor will remove and dismantle from the underground and surface facilities at the Mine Site and Load -Out Site, all mining machines, rolling stock, conveyors, copper wire, electrical substations and transmission lines, connectors, mine ventilating fans, and all other economically salvageable materials specifically excluding the long wall in place, unless a buyer can be found for the same on reasonable terms, and will clean, paint, replace broken glass, and perform minimum maintenance on the removed Equipment as Contractor deems reasonably necessary and appropriate for preservation or to enhance salability of the Equipment. Such work is described more specifically as the "Cost of the Work" in Section III infra. Contractor shall use its best efforts to avoid damage to Equipment during removal but does not warrant against damage caused by removal. Contractor shall store equipment in a manner that will protect the Equipment against the elements pending sale. B. Financing Equipment Removal, Dismantling, and Preparation. Contractor estimates that it will cost Three Hundred Thousand Dollars ($300,000.00) to recover, dismantle and prepare for sale the underground equipment at the Mine Site, including the cost of ventilating the Mine and maintenance of the mine ventilating system while such work is in progress. Such cost, together with any other similar costs for the surface equipment at the Jobsites have been and will be advanced by Contractor. Such advances shall be reimbursed by Mid - Continent to Contractor on a dollar for dollar ($1.00 - $1.00) basis out of the first Net Sales Proceeds from sales of the Equipment as hereinafter set forth. To secure such advances, Mid - Continent will provide to Contractor, with approval of the Bankruptcy Court, a first secured lien on all of the Equipment, pursuant to 11 U.S.C. §364(d)(1), superior to all existing encumbrances thereupon, including, but not limited to, any and all existing liens, (encompassing the liens presently in favor of Sanwa Business Credit Corporation), but excepting (i) two items of Equipment, (i.e. a tractor and back -hoe as hereinafter described), subject to a lien in favor of Caterpillar Financial Services Corporation, and (ii) all Equipment located at Mid - Continent's separate Rock Dust Plant, which is subject to a lien in favor of the State of Colorado Mined Land Reclamation Board. C. Exclusive Sales Agency. Contractor will be the exclusive sales agent in negotiating, marketing, and selling all of the salvageable and salvaged Equipment and will use its best efforts to do so but does not guarantee that it will be able to sell all of such Equipment. Except as herein specified to the contrary, all Equipment, as that term is herein defined, at the foregoing locations is represented by Mid - Continent to Contractor as owned by Mid- Continent, on which representation Mid- Continent has and does intend Contractor to rely, and pursuant to which representation and reliance Contractor has been induced to, and will advance funds 08/13/92(12) - 3 -