1993-05-17_GENERAL DOCUMENTS - C1981017 (2)

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Plan Outline May 17 , 1993 Page 5 arbitrarily assume that the cost of clearing property taxes can be limited to $500, 000 . Class Two: Environmental claimants . Environmental claimants include the Colorado Mined Land Reclamation Board (the "MLRB" ) , the U.S. Dept. of Interior, Bureau of Mines, Office of Surface Management (the "OSM" ) , and the Colorado Dept. of Health. The claims of the MLRB and the OSM for reclamation of the mine permit area will be satisfied from the Reclamation Trust. The Reclamation Trust will be funded from the following: ( i) net sales proceeds of the rockdust plant, including real property and fixtures or equipment located therein, which shall not be sold without the consent of the MLRB; (ii) the Mid- Continent Quarry and the Marblehead Quarry; and (iii) certain proceeds from sale of the Mine Site (i.e. , excluding the Carbondale Industrial Park and the Fabrication Shop, but including the Unit Train Load-Out Facility, the Mine Site proper, and the undeveloped property around the Mine Site that requires access through the Mine Site) in an amount to be negotiated. The cost of reclamation is estimated to be about $2 . 2 million. I have somewhat arbitrarily estimated the value of the rockdust plant and associated assets to be $700, 000 . For purposes of estimating distribution to creditors, I have arbitrarily assumed a transfer of $1.5 million from the Creditors ' Trust to the Reclamation Trust. As noted under the discussion of property taxes, a portion of this amount may be able to be realized from tax savings. The Environmental Trust will be funded from certain proceeds of the Mine Site, in an amount to be negotiated. For purposes of estimating distribution to creditors, I have arbitrarily assumed a transfer of $250, 000 from the Creditors ' Trust to the Environmental Trust. The theory behind augmenting the Reclamation Trust and the Environmental Trust with proceeds of the Mine Site is that Sanwa could foreclose on its equipment and real property outside the mine permit area without reference to the reclamation problem. At the same time, it is unlikely, as a practical matter, that Sanwa would foreclose on the Mine Site so long as reclamation of the site is unresolved. Moreover, it is reasonable to assume that any purchaser of the Mine Site will deduct the cost of reclamation from the price it is willing to pay for the property. One way or the other, the cost of reclamation and environmental cleanup represents a cost of sale