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C18.21 . 97 01 : 42 PM *MID— CONTINENT CBDL P03 <br /> Contract at the end of 1996 . At the present level of effort, it is <br /> apparent that you will not finish the work during the construction <br /> season of 1997, thus aggravating the problem. <br /> The Division of Minerals and Geology have expressed concern <br /> that your failure to perform will seriously interfere with their <br /> reclamation scheduling. This, in turn, is likely to put our <br /> sale/exchange program with the U.S. Forest service in jeopardy. The <br /> failure to complete timely liquidation of the Preparation Plant tract <br /> will disrupt disbursement to Creditors under the Bankruptcy <br /> Liquidation Plan. <br /> it is apparent that with a serious effort, this work could <br /> be completed this Fall, thus avoiding these problems. <br /> On the other hand, continuation of the current token <br /> efforts with the work remaining incomplete when the construction <br /> season closes will necessitate further legal proceedings including <br /> damages for breach of Contract, and claims for consequential damages <br /> arising from your failure to perform. <br /> we further call attention to the requirement in Paragraph <br /> 14 of the Settlement Agreement that equipment is not to be stored at <br /> the Unit Train Loadout beyond December 31, 1997. <br /> As part of the Settlement Agreement under Paragraph 6 MCR <br /> was to be paid $30, 000 in settlement of counter claims subject to <br /> deferrals provided in Paragraph B. <br /> Paragraph S provided a funding mechanism to induce <br /> compliance with the 1996 clean up and salvage requirement with <br /> collection to be deferred by "withholding contract distributions that <br /> would normally occur." Payment is now due on the $30, 000 and demand <br /> is hereby made that it be paid immediately. <br /> Sincerely, <br /> r <br /> _ h <br /> f LOUYS aGIGI,IA <br /> As Creditors' Trustee <br /> MID-CONTINENT RESOURCES, INC. <br /> By <br /> President <br />