Alan, please confirm that you have told Mike that it is required that Legal 
be consulted on such a waiver.  Mark
---------------------- Forwarded by Mark E Haedicke/HOU/ECT on 10/19/99 04:48 
PM ---------------------------
   
	
	
	From:  Michael J Beyer                           10/14/99 11:57 AM
	

To: George McClellan/HOU/ECT@ECT, Alan Aronowitz/HOU/ECT@ECT, Mark E 
Haedicke/HOU/ECT@ECT, Mo Bawa/HOU/ECT@ECT, Cliff Baxter/HOU/ECT@ECT, Greg 
Whalley/HOU/ECT@ECT, Cynthia L Schneider/HOU/ECT@ECT, Don 
Rollins/HOU/ECT@ECT, William Giuliani/PITT/ECT@ECT, David Gorte/HOU/ECT@ECT
cc:  
Subject: Cline/Panther Principal Payment

This memo is being sent to inform you that the September 30 Panther principal 
payment was made today and to clarify the confusion around the delay for the 
payment. Panther is one of the operating subsidiaries in our DPR Holding 
Company relationship with Chris Cline.

As many of you are aware, we are in the process of restructuring the Panther 
loan. Panther has violated certain financial covenants as a result of the 
lack of coal production when the mine was temporarily idled. These covenant 
violations put the loan in default and put us in a position to restructure 
certain aspects of the relationship. (All principal and interest payments 
have been made as scheduled despite the shutdown).

Part of the restructuring may involve deferring certain principal payments 
until 6/30/00 when Panther is expected to resume coal production. Since we 
are in the process of negotiating certain changes and since DPR Holding 
Company was sitting on $2.0 mm to be used for the payment and/or dividend 
distributions, they asked if they could wait until the distribution payment 
date in November before making the principal payment. This would give us a 
few more weeks to finalize the restructuring negotiations and perhaps enable 
them to defer the payment until June. This would also allow DPR to make a 
larger dividend distribution to both us and Cline. 

I told them that this was okay but that it did not constitute a waiver or 
decision to defer the payment. Unfortunately, this was not communicated well 
internally. I felt that this was an acceptable action because the company has 
the money and we are in the process of restructuring the repayment schedule. 
I also viewed it as a minor accomodation to Cline who has personally spent 
over $5 million on equipment for the project since January and has not 
charged the joint venture. 

However, to avoid hurting the relationship or DPR's reputation internally, 
Cline made the payment today.