<PAGE>


January 7, 2000

Mr. William Kraemer
MCNIC Pipeline & Processing Company
170 West Jefferson, Suite 1900
Detroit, MI 48226

         RE: ELECTION TO PROCEED WITH ADDITIONAL PILOT PLANT

Dear Bill:

Pursuant to our recent discussions, both MCNIC Pipeline & Processing Company
("MCNIC") and Crown Asphalt Corporation ("Crown"), as all of the members of
Crown Asphalt Ridge L.L.C. ("CAR"), have agreed that CAR should proceed with the
construction and operation of the pilot plant for the purposes of assessing the
process modifications made to CAR's tar sands facility in Vernal, Utah. The
purpose of this letter is to set forth the agreement of the parties with regard
to the present funding of the pilot plant without otherwise affecting the
parties' respective rights under the LLC Agreement, as defined below, other than
as expressly set forth herein. The estimated cost of such pilot plant is as set
forth in the Authorization for Expenditure attached hereto as Exhibit A (the
"Pilot Plant AFE"). Both MCNIC and Crown have agreed to and, simultaneously with
the execution of this Letter Agreement will, execute the Pilot Plant AFE. The
Pilot Plant AFE authorizes CAR, or either member on behalf of CAR, to expend the
sums set forth on the Pilot Plant AFE for the benefit of CAR.

While Crown has authorized CAR, or MCNIC on behalf of CAR, to make the
expenditures set forth on the Pilot Plant AFE, Crown, in its capacity as a
member of CAR, has stated that it is not able at this time to make its
proportionate share of the Additional Capital Contributions required in order to
satisfy the payment of any such expenditures in accordance with the Pilot Plant
AFE. Therefore, MCNIC and Crown agree that Crown will be considered a Delinquent
Member solely with regard to its proportionate amount of the Additional Capital
Contributions actually made by MCNIC and expended by CAR for payment of the
amounts under the Pilot Plant AFE. As provided in Section 3.6(a)(ii) of the
Crown Asphalt Ridge L.L.C. Operating Agreement, dated as of August 1, 1997 (the
"LLC Agreement"), MCNIC, as the Non-Defaulting Member, will advance Crown's
proportionate share of the Additional Capital Contributions from time to time
required for the payment of the expenditures set forth on the Pilot Plant AFE,
but shall be deemed not to be in breach of the LLC Agreement as a result of such
status. Such Additional Capital Contributions advanced by MCNIC will be

<PAGE>

Mr. William Kraemer
January 7, 2000
Page 2

designated as a Capital Contribution by MCNIC and will be subject to the terms
and conditions of Section 3.6(a)(ii)(B) of the LLC Agreement. As a result, as
provided in Section 3.6(a)(ii)(B), Crown, as the Delinquent Member will have its
Sharing Ratio reduced and MCNIC, as the Non-Defaulting Member will have its
Sharing Ratio increased to reflect the fact that MCNIC has made an Additional
Capital Contribution as agreed by the parties on the Pilot Plant AFE. MCNIC will
provide documentation to Crown evidencing the payment of such Additional Capital
Contribution.

For purposes of this Letter Agreement, terms used but not defined, shall have
the meaning assigned to them in the LLC Agreement. Except as specifically
provided in this Letter Agreement, the LLC Agreement will remain in full force
and effect with no changes, amendments or revisions. If the foregoing accurately
reflects our understanding, please execute both originals in the space provided
below. Please return one original to me and retain the other for your files.

Sincerely,

Crown Asphalt Corporation

---------------------------------
         Jay Mealey
         President

Accepted and agreed to
This ___ day of January, 2000.

MCNIC Pipeline & Processing Company

---------------------------------
         William Kraemer
         Vice President