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James B. Holden <br />Page 2 <br />securing the reclamation of the Mid - Continent quarry. <br />5. MCR agreed that it is in the interests of all concerned to <br />pay off the tax sale certificate in order to prevent a deed from <br />issuing on the 158 acre parcel that includes the rockdust plant. <br />You indicated that you would initiate immediate discussions with <br />Sanwa about the use of cash collateral for this purpose. This <br />item is of particular concern to DMG. I will independently con- <br />tact counsel for Sanwa to discuss this issue with them. <br />6. M &E has recently been in contact with two parties that have <br />expressed an interest in purchasing some or all of the rockdust <br />plant. We encourage MCR to continue such negotiations, and to <br />keep us informed of the progress. I recently asked you to con- <br />sider hiring an appraiser to appraise the rockdust plant at the <br />estate's expense. You indicated that you would discuss the mat- <br />ter with Bob Delaney, and that you would let me know his <br />response. This is a matter is particularly important in light of <br />the 1989 tax sale. The appraisal should be performed by a repu- <br />table firm with substantial experience in the appraisal and sale <br />of industrial equipment. In addition, the appraisal firm should <br />be independent and should not attempt to purchase any of the <br />equipment itself. I have enclosed brochures from two prospective <br />firms for your review. <br />7. MCR agreed to provide the DMG with a description of its plan <br />to prepare the site for the winter. The plan should be detailed <br />and the debtor should file a motion for further use of cash col- <br />lateral as necessary to implement the plan. The plan should in- <br />clude funds to deal with unforeseen contingencies. <br />8. You indicated that you would evaluate amending the plan to <br />provide for distributions to the environmental trust and the <br />reclamation account before the payment of §507(a)(7) priority <br />tax claims. I understood from your memorandum of May 17, 1993 <br />that such priority taxes would be paid out of the Creditors' <br />Trust. As indicated in the disclosure statement, to the extent <br />that reclamation and environmental obligations are an ongoing <br />obligation of the estate, they are entitled to a higher priority <br />than the tax claims. <br />9. DMG agrees that the $43,686 lien held by Caterpillar should <br />be paid off before making any distributions to the reclamation <br />account, only to the extent that Caterpillar's lien is on equip- <br />ment that will be retained and used for reclamation. You indi- <br />