1994-01-18_GENERAL DOCUMENTS - C1981017 (3)

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The New Plan conditions the release of corporate r, affiliates on receipt of a 5% distribution by unsecured creditors by December 31, 1995. Pending receipt of such distribution, the Debtor's corporate affiliates are required to execute an agreement tolling any statute of limitations with respect to the assertion of claims by unsecured creditors, to the extent that such statute has not expired before December 1, 1993. 3. Funds Allocated for Mine Reclamation. The New Plan fully funds the Debtor's Reclamation Bond, in the amount of $3 million, which represents the cost of performing the Debtor's approved Reclamation Plan as estimated by the MLRB and the Colorado Division of Minerals and Geology (the "DMG" ) in late 1991 . The amounts to be provided under the New Plan are reduced by the proceeds of the Rockdust Plant on which the MLRB holds a senior lien, the value of contractual services by the Debtor's equipment liquidator, and the value of reclamation work performed prior to confirmation by the Debtor. Relative to the former plan, the New Plan increases the funds allocated for reclamation by about $600,000. 4 . Treatment of Sanwa. The foregoing enhancements of the treatment of unsecured creditors and reclamation claims are achieved through a voluntary subordination of the senior secured claim of Sanwa, whose distribution under the New Plan is limited to the residual value in the estate after other distributions are completed. 5. Implementation of Reclamation Plan. The New Plan eliminates the "Environmental Trust" which, under the former plan, would have been used to supervise reclamation of the Debtor's mine and administer the funds made available for mine reclamation under the plan. Instead, the New Plan distributes all funds for mine reclamation to the Colorado Mined Land Reclamation Board (the "MLRB" ) , which will supervise mine reclamation pursuant to its statutory authority under state law. Distributions to the MLRB are to be made in accordance with a reclamation schedule to be negotiated by the Debtor with the MLRB and the DMG. 6. Subrogation Provision. The Debtor believes that the liquidation value of its estate will yield the amounts which the Debtor would be required to distribute to all creditors other than Sanwa. However, it is possible that there could be gaps between scheduled distributions and the realization of proceeds from asset sales. Equipment sales, for example, remain very slow. The New Plan permits the Debtor to bridge any possible gaps by borrowing funds from lenders, affiliates, or other persons. If any person advances funds which are used to make any distribution provided under the New Plan, the person advancing such funds is subrogated to the position of the class or classes of creditors receiving such -2-