Office of the President
                                                    March 1, 1994




                                                    FifK 9
Members, Board of Trustees:

        AGREEMENTS WITH CYPRUS SOUTHERN REALTY COMPANY AND THE KENTUCKY
      DEPARTMENT OF FISH AND WILDLIFE RESOURCES REGARDING ROBINSON FOREST

Recommendation: (1) that the University's Administration be authorized to
enter into an agreement with Cyprus Southern Realty Company, a wholly-owned
subsidiary of Cyprus Amax Coal Company, resolving without litigation a dispute
concerning the ownership of, and coal royalties, from a 15-acre (+/-) portion
of the Robinson Forest's Bear Branch Tract known as Harbert Knob; (2) that in
connection with this settlement agreement the Board authorize transfer of the
disputed royalties to the Kentucky Department of Fish and Wildlife Resources
for uses that would further development of wildlife management areas on the
Robinson Forest and on contiguous lands owned by Cyprus; (3) that the Board
authorize the University's administration to enter into a new Wildlife
Management Memorandum of Understanding with the Department of Fish and
Wildlife Resources; and (4) that the Board authorize the execution of a
quitclaim deed for a portion of Harbert Knob to Cyprus and the acceptance of a
quitclaim deed for the remaining portion from Cyprus.

Background: On June 16, 1992, the Board authorized the Administration to
execute a coal lease with Arch Mineral Corporation on a portion of the
University's Bear Branch tract known as Harbert Knob. This tract is west of
the main block of the Robinson Forest and is close to those properties under
lease to Addington, Inc. Cyprus-Southern Realty Company, a wholly-owned,
landholding subsidiary of Cyprus Amax Coal Company, one of the world's largest
coal producers, also claims title to Harbert Knob and has a lease with Arch.
Arch has completed mining the coal and is holding royalties of $294,221.27 in
escrow until such time as the University and Cyprus resolve the land ownership
issue.

The University's chain of title is established through Patents 25548 and 40479
issued by the Commonwealth of Kentucky in 1856 and 1867, respectively, and
deeds from one Ira Noble who marked out a boundary which included Harbert Knob
in 1848 and established his ownership through the doctrine of adverse
possession; Cyprus's chain of title to the Harbert Knob tract is through
Patent 40423 issued by the Commonwealth of Kentucky in 1867, based on a survey
made in 1860. There is a dispute, particularly common in old land surveys in
eastern Kentucky, as to which party has superior legal title to the property.
Representatives of Cyprus and the University have been discussing for
approximately two years ways to avoid the expense and uncertainty of
protracted litigation which would otherwise be required to settle the
entitlement to the escrowed royalties and the ownership of Harbert Knob.

Cyprus is the University's largest single "neighbor" in Breathitt, Knott, and
Perry counties. It owns approximately 16,000 acres contiguous to the
University's 15,000 acre Robinson Forest; the parties share approximately 12
miles of common boundaries.