SETTLEMENT AND RELEASE FOR AND IN CONSIDERATION OF payment of the sum of One Hundred Thousand Dollars the Illinois Department of Natural Resources, Office of Mines and Minerals (the ?Department?) does hereby fully and completely release, discharge and acquit Fifth Third Bank, as successor in interest to Banterra Bank and Harrisburg National Bank of Harrisburg, and its agents, of?cers, directors, executives, attorneys, employees, affiliates, subsidiaries, partners, predecessors, successors and assigns and any individuals associated with this matter (collectively the ?Released Parties?) from any claim arising on account of all sums due and injuries and damages, known and unknown, both to persons and property, which have developed or which in the future may develop with respect to or pertaining to the Irrevocable Letters of Credit 158 and 161 (?Letters of Credit?), issued by Harrisburg National Bank of Harrisburg to the State of Illinois, Department of Mines and Minerals on behalf of Phoenix Mining Company Permit No. 200, as follows: 1. For the sole and only consideration of ONE HUNDRED THOUSAND AND 100 DOLLARS the Department, its agents and representatives, do hereby fully and forever release, remise, acquit, and discharge the Released Parties from all claims, demands, damages, controversies, actions, rights of action, of whatsoever kind or nature, at law or in equity, which the Department now has or may hereafter have, arising out of the Letters of Credit. 2. By agreeing to this Settlement and Release, the Released Parties make no admission of any liability to the Department, but?expressly deny any and all liability of any kind, character and description, claims, demands, damages, actions or causes of action or suits of any kind or nature whatsoever, whether direct or indirect, which the Department may have or assert against the Released Parties. 3. The Parties do hereby DECLARE and AGREE that this release and settlement is intended to cover and does cover all liabilities arising from the Letters of Credit. 4. The Parties do hereby DECLARE and AGREE that the amount above?stated is the sole and only consideration for this release, that all agreements and understandings between the Parties hereto are embodied and expressed herein and that the terms of this release are contractual and not a mere recital. 5. The Parties do hereby DECLARE and AGREE that no promise or agreement not herein expressed has been made between the Parties, and that in executing this Release, the Parties are not relying solely upon any statement or representation made by the Parties hereby released or their agents or attorneys, or any other person concerning the nature or extent of the damages, or concerning any other thing or matter, but each party is relying solely upon his own judgment and the advice of his attorney. 6. The Parties do hereby DECLARE and AGREE that the payment of the above sum is in full accord and satisfaction of a disputed claim, is made to avoid the expense and delay of further investigation and litigation and is not to be construed or used as an admission of any liability whatsoever by or on behalf of either of the Parties, by whom all liability is hereby expressly denied. 7. The Released parties agree to make payment of settlement within ?fteen days after execution of this agreement, Via check or money order payable to: Illinois Department of Natural, Resources - Of?ce of Mines and Minerals, with notation on the check of Phoenix Mining Permit Nos. 200 and 270. FIFTH THIRD BANK ILLINOIS DEPARTMENT OF NATURAL RESOURCES, Of?ce of Mines and Minerals LISA MADIGAN Attorney General of Illinois I . )0 R\05alie H. Lowery 95?: l? l~e i i/em'l? Assistant Attorney GeneralU Date: ii Date: Kan. I, 200,!? OFFICE OF THE ATTORNEY GENERAL STATE OF ILLINOIS Lisa Madigan ENE RAL December 16, 2008 William K. Richardson General Counsel Department of Natural Resources One Natural Resources Way Springfield, Illinois 62702?1271 Re: Phoenix Mining Company - Permit No. 200 Irrevocable Letters of Credit Nos. 158 161 Attorney General File No. 2008-REVEL-7870 Dear Mr. Richardson: Enclosed please find the signed Settlement and Release and a trust account check in the amount of $100,000.00. This check represents the full settlement amount forthis matter. Although the two letters of credit upon which demand was made totaled $122,387.00, believe this is an excellent settlement amount for the Department. The original letters in question were issued some years ago and the bank has changed hands in the intervening years. As neither the Department nor the bank have located documents memorializing extensions to the letters, it is highly questionable that the letters are enforceable. The bank, however, was made aware that extensive discovery would be done, if necessary, to protect the Department?s interest. Counsel for the bank indicated that while he was not convinced that the letters were enforceable, the bank did not wish to be bogged down in litigation to resolve the matter. Our negotiations resulted in an agreement by the Department to accept $100,000.00 as payment in full accord and satisfaction on both letters. The discount on the face value of the letters is reasonable when the cost and time of litigation are factored into the equation. 500 South Second Street, Springfield. Illinois 62706 9 (217) 782-1090 TTY: 8-14-5461 Fax: (217) 782304-6 100 Wes: Randolph Street, Chicago. Illinois 60601 {312) 814-3000 '9 TTY: (800} 964?3013 Fax: {313] 8146800 1on1 Du" hint? Purl-umzlnip mom 9 can ?inn a ?277?. 11.1: 01.20 . m1m can our. Page 2 William K. Richardson December 16, 2008 I appreciate the assistance of Virginia Yang and Scott Fowler with this case. They were able to timely provide the information and documents needed to bring this case to a successful conclusion. if I can be of further assistance, do not hesitate to contact me. ery truly yours, cams?$4, Rosalie H. Lowery Assistant Attorney General Revenue Litigation Bureau Telephone: 217-782?9022 Encls. cc: irginia Yang Scott Fowler RECORD OF THANSMITTAL - N9 @765" FROM: Office of the Attorney General To; VIRGINIA YANG IDNR Name of Debtor Fifth Third Bank 2008-6022 Phoenix Mining Company Claim: 122,387.00 Agency File No. Permit No. 200 Case No? Bank Fifth Third Bank Signature Bamberger, Foreman, Osqald 5: Hahn, LLP Trust Account HAND DELIVERY Transmitted Received .1 .. 2 By: BY: ?Z??Kf?iJ/fl 7 {133? id Date: 12/16f08 Date: Amount 100,000. 00 - Balance Remaining To the receiving agency: Please return one copy of this form, signed and dated bythe appropriate employee of your agency, to the following address: Office of the Attorney General Revenue Litigation Bureau 500 South Second Street Springfield, lilinois 62706 streetcar." me' BFOH osvaLo AND HAHN, LLP TRUST ACCOUNT 700 HULMAN BUILDING no. eox 557 EVANSVILLE. 47704 {rim mas-mic -. . . HUNDRED THOUSAND AND 00/100 DATE . VAMQUNT 1-5 I 12/12/08 PAY I Eggs-IE Illinois Dept of Natural Resources 0F Office of Mines and Minerals I VOID AFTER 90 DAYS nln11E1Eul .Ir?inr' ant-1n: