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to $300,_0.00 of credit from M&E, secured by a senior lien on the <br /> Debtor's equipment except for specifically excluded equipment <br /> securing liens in favor of Caterpillar Financial Services and the <br /> State of Colorado Mined Land Reclamation Board. <br /> Advances from M&E to the Debtor's bankruptcy estate were <br /> for the purpose of keeping the Mine pumped and ventilated during <br /> removal of underground Equipment and to cover other costs of <br /> Equipment removal and preparation. The Debtor was obligated to <br /> reimburse M&E for such advances on a dollar for dollar basis out of <br /> the first net sale proceeds from sale of the Equipment. All such <br /> advances have in fact been reimbursed. <br /> Removal of the Equipment from underground was completed <br /> around the end of September 1992 and the pumping and ventilating <br /> program was terminated. The Mine thus was allowed to flood, making <br /> the Mine and the equipment remaining in the Mine inaccessible. At <br /> that point, the cessation of mining activities became permanent, <br /> and the Debtor began work on final reclamation of the Mine. See <br /> Section II.D, "Reclamation of the Mine Site, " on page _ below. <br /> In September 1992, the Debtor obtained Court <br /> authorization to sell the Equipment free and clear of liens in <br /> accordance with the terms of the M&E Contract. M&E,:hes.::di°stibutel <br /> caulz,gs_ of.::sa :; gu pment:. c�::ht�nc retie 9f:potential :purchasers: <br /> Pursuant --E the"terins`-of: the •M&E Contract; M&E is required to'-sell <br /> the Equipment for no less than certain minimum prices which have <br /> been filed under seal with the Court. The minimum prices are dealt <br /> with as confidential trade information in the Debtor's bankruptcy <br /> case. <br /> All gross sales proceeds are deposited directly into <br /> federally-insured bank trust accounts specifically established <br /> under the terms of the M&E Contract. On or before the tenth of <br /> each month, M&E submits a detailed statement to the Debtor showing <br /> all monies paid out, costs incurred under the M&E Contract during <br /> the previous month, sales during the previous month, and the amount <br /> of M&E's commissions retained pursuant to the M&E Contract. After <br /> deducting its costs, M&E is compensated out of net sales proceeds. <br /> M&E receives 50% of the first $1,000, 000; 20% of the next <br /> $2,000, 000; and 40% of any net sales proceeds in excess of <br /> $3,000, 000. Ten percent of all commissions due to M&E, up to a <br /> maximum of $100,000, are set aside in a separate federally-insured <br /> interest bearing trust account to ensure M&E's satisfactory <br /> performance. Upon completion of on-site dismantling of the surface <br /> structures at the Mine site, M&E will be entitled to 35% of this <br /> account including earned interest. M& :: wi : be tt "':°ao.' Ze <br /> bala �e><>:`:a :;` :: ::; aE:s `acari an <br /> coon Ietit :t� n>' sf:>,:the' wo ir�i ear. > he.: t ;:.Contract .::..'but.: in :<:ao;.,eveitt <br /> ••• •�••• •:••.: •••:K•ii......nA.:v'Dw ..rn/./.rih:4Sirn•i:Si:t'•:i::iSi.iir}%:: n......r A.vii^.:•i.0::••..'.:. :•iii4.•\Y.'i.h ..vr.nv.....n:xv..iv // x..v..n.:.n rr/rrrAr.::/ii/:•.: <br /> C:\WP51\JBH\MIDCON\DISCLOS.STN 1 1 <br /> October 6, 1993 <br />