Purchase and Sale Agreement

Attached is the latest draft of the Purchase and Sale Agreement, in both Word
Perfect and PDF formats. It still does not cover a number of items several
of us have discussed, including certain insurance matters. These items are
part of an ongoing list of issues. That list also includes the practical
applicability of the infamous Section 5.07(b).

The Disclosure Schedules remain critical. Please continue to review both the
parent disclosures and the regional disclosures for gaps, inconsistencies,
and duplications. For example, while Corp. Risk Management is scheduling the
various insurance handled by it, that group is not aware of insurance
obtained at the local level. Those policies at the regional level need to be
listed, as well as checked to confirm that they are not implicated by a
change of control. The parent level policies have been reviewed for change
of control implications. Also, please confirm that the schedules include all
claims against the involved entities; for example, there appear to be many
claims made under the various insurance policies that have not yet become a
litigation matter.

Timing of the deal could soon become quite ugly. Thanks for all of the
help. Lance.

- Houston_290706_1.WPD
- Houston_296564_1.WPD

- PSA.8.11.00.pdf
- CMP.PSA.8.11.00.pdf