Charles A. Greene and Christine J. Greene - Page 17

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          sell Terra-Drills in return for an advance license fee of                   
          $1,600,000.  Mitchell thereafter sublicensed its rights to the              
          Terra-Drill to nine different partnerships, including Mid                   
          Continent.  The aggregate sublicense fee of the six partnerships            
          involved in Webb was $225 million.  Pursuant to its sublicense              
          agreement with Mitchell dated December 31, 1981, Mid Continent              
          was obligated to pay annual license fees of $8 million in the               
          first 3 fiscal years commencing October 1, 1982, 1983, and 1984.            
               The Mid Continent offering memorandum set forth significant            
          warnings regarding the risk of the investment.  It also indicated           
          that the anticipated tax losses to be incurred by each investor             
          in the first 3 years would be $40,000 for each $10,000 cash                 
               The offering memorandum stated that the partnership was                
          formed to:  (1) Exploit the Terra-Drill; (2) conduct exploratory            
          drilling in the Overthrust Belt in Utah; and (3) develop a                  
          drilling program in Oklahoma and Tennessee.  Since a functional             
          Terra-Drill was never developed, no orders were ever taken by the           
          limited partnership for the Terra-Drill.  No drilling was ever              
          conducted by the partnership on leases in the Utah Overthrust               
          Belt.  The partnership never developed a drilling program for oil           
          and gas in Oklahoma and Tennessee.                                          

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