Exhibit 10.1

Confidential materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

INTEREST PURCHASE AGREEMENT

BY AND BETWEEN

LG&E ROANOKE VALLEY L.P.

AS SELLER,

AND

WESTMORELAND-ROANOKE VALLEY, L.P.

AS BUYER

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TABLE OF CONTENTS

      Page         ARTICLE 1. DEFINITIONS AND CONSTRUCTION 1           1.1
Defined Terms 1   1.2 Construction 12         ARTICLE 2. PURCHASE AND SALE 12  
        2.1 Purchase and Sale; Other Transactions 12   2.2 Purchase Price 12  
2.3 Closing 13   2.4 Deliveries at Closing 13   2.5 Casualty Losses 14   2.6
Payments 16         ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER 16      
    3.1 Organization 16   3.2 Enforceability 16   3.3 Seller's Consents and
Approvals; No Violation or Conflict by Seller 17   3.4 Title to the Interest 17
  3.5 Ownership 17   3.6 Organization 18   3.7 Financial Statements 18   3.8
Absence of Undisclosed Liabilities 18   3.9 Company's Consents and Approvals; No
Violation or Conflict by Company 18   3.10 No Adverse Change 19   3.11 No
Litigation 19   3.12 Title to and Condition of Assets 19   3.13 Real Property 20
  3.14 Books and Records 21   3.15 Contracts 21   3.16 Insurance 22   3.17
Employees; Labor Matters 22   3.18 Compliance with Law 24   3.19 Permits 24  
3.20 Transactions with Affiliates 24   3.21 Tax Matters 25   3.22 Environmental
Matters 27   3.23 Intellectual Property Rights 28   3.24 Bank Accounts; Powers
of Attorney 29   3.25 Brokers' Fees 29   3.26 Regulatory Status 29   3.27
Solvency 29

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          3.28 Disclosure 29         ARTICLE 4. REPRESENTATIONS AND WARRANTIES
OF BUYER 30           4.1 Organization and Qualification 30   4.2 Enforceability
30   4.3 Buyer's Consents and Approvals; No Violation or Conflict by Buyer 30  
4.4 No Litigation 31   4.5 Brokers' Fees 31   4.6 Investment Intention 31   4.7
Accredited Investor 31   4.8 Financial Resources 31   4.9 Lender Consent 31    
    ARTICLE 5. COVENANTS OF SELLER AND BUYER 31           5.1 FERC Transaction
Authorization 31   5.2 Conduct of Business Pending the Closing 32   5.3 Access
to Information 35   5.4 Public Announcements 36   5.5 Intentionally Omitted 36  
5.6 Commercially Reasonable Efforts 36   5.7 Consents 37   5.8 Substitute
Letters of Credit; Cash Deposit 37   5.9 Further Assistance 38   5.10 Use of
LG&E Name 38   5.11 Guaranties 38   5.12 Interim Financial Statements 38   5.13
Replacement Insurance 38   5.14 Pre-Closing Claims 38   5.15 Preservation of
Company Status 39   5.16 LPS Staff Transfers 39   5.17 Exclusive Rights for LPS
39         ARTICLE 6. CONDITIONS PRECEDENT TO CLOSING 39           6.1
Conditions Precedent to Obligations of Buyer 39   6.2 Conditions Precedent to
Obligations of Seller 41         ARTICLE 7. INDEMNITIES AND ADDITIONAL COVENANTS
42           7.1 Survival 42   7.2 Seller's Indemnity 42   7.3 Buyer's Indemnity
45   7.4 Indemnification Procedure 46   7.5 Post-Closing Tax Matters 48

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          7.6 No Additional Representations 50   7.7 Exclusivity of Remedies 50
        ARTICLE 8. TERMINATION 51         8.1 Termination 51   8.2 Effect of
Termination 52         ARTICLE 9. MISCELLANEOUS 52           9.1 Expenses 52  
9.2 Transfer Taxes, Recording Fees and Real Estate Taxes 52   9.3 Waiver and
Amendment 52   9.4 Assignment 53   9.5 Notices 53   9.6 Dispute Resolution;
Arbitration; Governing Law 54   9.7 Severability 54   9.8 Counterparts 54   9.9
No Third Party Beneficiaries 54   9.10 Entire Agreement; Exhibits and Schedules
54   9.11 Disclosure 55   9.12 Closing Over Breaches 55   9.13 WEL Partner 55  
9.14 Board Approval 55

SCHEDULES:           Schedule 1.1(b) Easement Property   Schedule 1.1(d) Owned
Property   Schedule 1.1(e) Permitted Encumbrances   Schedule 1.1(f) Title
Insurance Commitments   Schedule 1.1(g) Surveys   Schedule 1.1(i) Seller and
Company Required Consents   Schedule 1.1(j) Buyer Required Consents   Schedule
2.6 Payment Instructions         EXHIBITS:           Exhibit 2.4(a)(vi) Form of
Interest Assignment and Assumption Agreement   Exhibit 2.4(a)(vii) Form of VMA
Assignment and Assumption Agreement   Exhibit 5.11(a) Form of Buyer Guaranty  
Exhibit 5.11(b) Form of Seller Guaranty   Exhibit 6.1(m) Transition Services
Agreement

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INTEREST PURCHASE AGREEMENT

        THIS INTEREST PURCHASE AGREEMENT, dated as of August 25, 2004, is by and
between LG&E ROANOKE VALLEY L.P., a California limited partnership (“Seller”)
and [**] (“Buyer”) and joined in by Westmoreland-Roanoke Valley, L.P., a
Delaware limited partnership (“WEL Partner”). Seller and Buyer are referred to
herein collectively as the “Parties” and each of them individually as a “Party.”

RECITALS

        WHEREAS, Seller owns a 50% partnership interest in Westmoreland – LG&E
Partners, a Virginia general partnership (the “Company”), that owns and operates
two (2) individual coal-fired generating facilities, including a 165 MW (net)
pulverized coal reheat unit (“ROVA I”), and a 44 MW (net) pulverized Coal
non-reheat unit (“ROVA II”), both located in Weldon Township, Halifax County,
North Carolina, together known as The Roanoke Valley Energy Facility (the
“Facility”);

        WHEREAS, WEL owns the other 50% partnership interest in the Company and
is joining in this Agreement for the purpose of agreeing to the provisions of
Section 8.2 of this Agreement as it pertains to it and to consent to the
transactions contemplated by this Agreement and to waive its Purchase Rights to
the extent necessary to enable the transactions contemplated by this Agreement
to be consummated.

        WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, a 50% general partnership interest in the Company;

        NOW THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the Parties agree as
follows:

ARTICLE 1.
DEFINITIONS AND CONSTRUCTION

        1.1    Defined Terms.

                Capitalized terms not otherwise defined in this Agreement shall
have the meanings given to them as follows:

        “Affiliate” shall mean, with respect to any Person, any other Person
that, directly or indirectly, controls, is controlled by, or is under a common
control with, such Person. The term “control” (including the terms “controlled
by” and “under common control with”) as used in the preceding sentence means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of a Person, whether through the ownership
of voting securities, by contract, or otherwise.

        “Agent” shall mean Dexia Credit Local, New York Agency, in its capacity
as agent under the Credit Agreement.

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        “Agreement” shall mean this Interest Purchase Agreement and the Exhibits
and Schedules referred to herein and attached hereto.

        “Ancillary Agreements” shall mean the agreements and certificates
required or contemplated to be delivered pursuant to this Agreement in
connection with the Closing.

        “Applicable Period” shall have the meaning given to such term in Section
7.2(b).

        “Assets” shall mean all of the assets owned or leased by the Company
used by the Company in connection with its operations including, without
limitation, the Books and Records, Real Property and Equipment of the Company.

        “Assume the Defense” shall have the meaning given to such term in
Section 7.4.

        “Authorizing Documents” shall mean the resolutions, minutes, consents or
other documents documenting the action taken by any of Seller, Seller Guarantor,
Buyer or Buyer Guarantor to authorize this Agreement, the Seller Guaranty (in
the case of the Seller Guarantor), the Buyer Guaranty (in the case of the Buyer
Guarantor), the Ancillary Agreements and the transactions contemplated hereby
and thereby.

        “Base Rate” shall mean 4.71%.

        “Basis for Indemnification” shall have the meaning given such term in
Section 9.12.

        “Basis Point” means one one-hundredth of one percent (.0001 or .01%)
with one percentage point being equivalent to one hundred (100) Basis Points.

        “Books and Records” shall mean all original books, records, data and
information owned or possessed by the Company and all books, records, data and
information with respect to the operation of the Facility possessed by the
Company or Seller, including minute books, financial and accounting records,
purchase orders and invoices, sales orders and sales order log books, credit and
collection records with respect to customers and supply sources, and all other
general correspondence, records, books and files, including all records
(maintenance and otherwise), drawings and warranties relating to Equipment.

        “Buyer” shall have the meaning given such term in the Preamble to this
Agreement.

        “Buyer Cash Flows” shall have the meaning given such term in Section
7.5(c).

        “Buyer Guarantor” shall mean Westmoreland Coal Company, a Delaware
corporation.

        “Buyer Guaranty” shall mean the duly executed guaranty dated as of the
Effective Date of the Buyer Guarantor of the obligations of Buyer under this
Agreement in substantially the form of Exhibit 5.11(a) attached hereto.

        “Buyer Indemnified Parties” shall have the meaning given such term in
Section 7.2(a).

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        “Buyer Material Adverse Effect” shall mean any materially adverse effect
on any of (i) the authority or ability of the Buyer to perform its obligations
under or consummate the transactions contemplated by this Agreement or (ii) the
business, financial condition or results of operation of the Buyer, taken as a
whole.

        “Buyer Required Consents” shall mean those consents, approvals, notices
and waivers, each of which is set forth on Schedule 1.1(j) on the part of Buyer
Company that are required in connection with the consummation of the
transactions contemplated by the Agreement.

        “Buyer Supplemental Disclosure” means any written supplements or
amendments to the Disclosure Schedules or enumerated schedules attached hereto
or referencing and qualifying any of the representations of Buyer set forth in
Article 4, which supplements and amendments are delivered by Buyer to Sellers
subsequent to the Representation Date and prior to the Closing.

        “Cash Protection Amount” means an amount, but not less than zero, equal
to $9,850,000 minus the amount available to be drawn under the Existing Letters
of Credit.

        “Casualty Loss” means any physical damage to, or destruction or
condemnation of, all or a portion of the Facility by fire, the elements, theft,
vandalism, eminent domain, any other casualty or any other cause other than
damage that constitutes ordinary wear and tear or similar immaterial damage (not
involving more than $100,000 in the aggregate) occurring in the ordinary course
of business.

        “Claim” shall mean all demands, claims, written notices, actions,
investigations, causes of action, proceedings and arbitrations, regardless of
whether ultimately determined to be valid.

        “Clean-Up” shall mean all actions required or necessary under
Environmental Laws to: (1) contain, clean-up, remove, treat or remediate
Hazardous Materials so that they do not migrate, endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; (2)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; or (3) respond to any government requests for information or documents in
any way relating to clean-up, removal, treatment or remediation or potential
clean-up, removal, treatment or remediation of Hazardous Material in the indoor
or outdoor environment.

        “Closing” shall have the meaning given such term in Section 2.3.

        “Closing Date” shall have the meaning given such term in Section 2.3.

        “Company” shall have the meaning given such term in the Recitals to this
Agreement.

        “Company Budget” means the annual budget of the Company as adopted by
the Management Committee of the Company as amended from time to time.

        “Contracts” shall mean all contracts, agreements, leases and licenses,
as amended from time to time, to which the Company is a party or by which the
Company or any of its respective Assets is bound.

-3-

        “Credit Agreement” shall mean the Amended and Restated Construction and
Term Loan Agreement dated as of December 1, 1993 among the Company, the Agent
and the lenders, institutional lender, issuing bank and co-agents party thereto
(the “Lenders”), as amended from time to time.

        “Current Balance Sheet” shall mean the balance sheet of the Company
included in the Financial Statements.

        “Debt Protection Account” shall mean the account established and
maintained pursuant to Section 6.1(f) of the Credit Agreement.

        “Disclosure Schedules” shall mean the Schedules attached hereto
corresponding to the representations and warranties of Seller set forth in
Article 3 or Buyer set forth in Article 4.

        “Easement Property” shall mean the real property described in Schedule
1.1(b).

        “Effective Date” means the date as of which this Agreement is dated in
the Preamble to this Agreement.

        “Encumbrance” shall mean any right, option, right of refusal,
restriction, covenant, condition, agreement, lien, pledge, security interest,
mortgage or encumbrance of title.

        “Environmental Claim” shall mean any Claim arising, filed or made, or,
to the Knowledge of Seller, threatened, either before or after the Closing Date,
by a Person (other than Buyer or an Affiliate of Buyer) alleging potential
Environmental Liability against Buyer or the Company or against any person or
property for whom Buyer or the Company may be responsible by law or contract
(including potential liability for investigatory costs, Clean-Up costs, Remedial
Action, governmental response costs, natural resources damages, property damages
(including diminution in value), personal injuries, or penalties) under any
Environmental Law arising out of, based on or resulting from (a) the presence,
or Release, prior to the Closing Date, of any Hazardous Material at any
location, whether or not owned, leased or operated by the Company, and caused by
or arising out of any operations on the Real Property, or (b) circumstances
relating to the Company or the Real Property existing prior to the Closing Date
forming the basis of any violation, or alleged violation, of or failure to
comply with Environmental Law in effect as of the Closing Date or Environmental
Permits in effect as of the Closing Date.

        “Environmental Law” shall mean all applicable Laws relating to
pollution, contaminants or protection of human health or the environment,
including Laws relating to Releases or threatened Releases of Hazardous Material
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, disposal, transport or handling of Hazardous
Material and all Laws with regard to record keeping, notification, disclosure
and reporting requirements respecting Hazardous Material; provided, however,
that Environmental Law does not include the federal Occupational Safety and
Health Law or any other similar Law.

-4-

        “Environmental Liability” shall mean any Liability or Losses arising out
of, based on or resulting from any of the following circumstances, conditions or
events: (a) the presence, storage, treatment, use, disposal or Release of any
Hazardous Material at any location, whether or not owned, leased or operated by
the Company, and caused by or arising out of any operations on the Real
Property, (b) circumstances relating to the Company or the Real Property forming
the basis of any violation, alleged violation, of or failure to comply with
Environmental Law in effect as of the Closing Date or Environmental Permits in
effect as of the Closing Date, (c) failure to obtain or comply with or secure,
when legally mandated, a modification of any required Environmental Permit, (d)
a Clean-Up or Remedial Action, or (e) harm or injury to any person, public
health, property, natural resources or to the environment as a result of actual
or threatened exposure to Hazardous Materials.

        “Environmental Permits” shall mean all Permits required under any
applicable Environmental Law.

        “Equipment” shall mean all machinery, vehicles, equipment, furniture,
fixtures, furnishings, parts, tools, engineering and other items of tangible
personal property owned or leased by the Company and used in the operation of
the Facility.

        “Equity Interests” shall mean stock, general or limited partnership
interests, limited liability company membership interests or any other form of
equity interest.

        “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

        “Existing Letters of Credit” means the letter of credit dated April 4,
2003 currently having a face amount of $5,000,000 issued by Bank One, N.A for
the benefit of the Agent and which has been delivered to the Agent pursuant to
Section 6.1(f) of the Credit Agreement, as such letter of credit may be amended
prior to the Closing, together with any additional or substitute letters of
credit delivered by Seller or any of its Affiliates to the Agent pursuant to
Section 6.1(f) of the Credit Agreement.

        “Facility” shall have the meaning given such term in the Recitals of
this Agreement.

        “FERC” shall mean the Federal Energy Regulatory Commission or any
successor thereto.

        “FERC Transaction Approvals” shall have the meaning given such term in
Section 5.1.

        “Final Loss Adjustment” shall have the meaning given to such term in
Section 2.5(a)(iv).

        “Financial Statements” shall mean the audited financial statements of
the Company, including the notes thereto, for the year ended December 31, 2003.

        “Financial Statement Date” shall mean December 31, 2003.

        “Fundamental Indemnification” shall mean Indemnification to which a
Buyer Indemnified Party is entitled pursuant to Section 7.2(a) with respect to
(a) representations and warranties made in Sections 3.1, 3.2, 3.4, 3.5, 3.6,
3.9, 3.13(f), 3.17(d) and 3.25, the second sentence of Section 3.12, and the
second, third and fourth sentences of Section 3.13, and (b) the covenants under
Section 5.14.

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        “GAAP” shall mean generally accepted accounting principles as in effect
in the United States of America as of the date and period covered by the subject
Financial Statements, consistently applied.

        “General Indemnification” shall mean Indemnification other than
Fundamental Indemnification or Seller Fundamental Indemnification.

        “General Indemnification Limit” shall have the meaning given such term
in Section 7.2(c).

        “Governing Instruments” shall mean the certificate or articles of
incorporation, by-laws, limited partnership certificate, partnership agreement,
limited liability company agreement or equivalent instruments of any Person that
is an entity.

        “Governmental Authority” shall mean: (a) any federal, state, regional or
local government; (b) any governmental, regulatory, legislative, judicial or
administrative agency, board, commission, body, instrumentality or other
authority exercising or entitled to exercise any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power; and (c)
any court or governmental tribunal.

        “Halifax Amount” shall have the meaning given such term in Section
7.5(c).

        “Halifax Reserve” means the reserve segregated by the Agent under
Section 6.17 of the Credit Agreement with respect to the Halifax Amount.

        “Hazardous Material” means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which
is classified or regulated as (A) a “hazardous substance” or “extremely
hazardous substance” as those terms are defined in the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601
et seq., and under the Emergency Planning and Community Right-To-Know Act of
1986, 42 U.S.C. Section 11000 et seq., (B) petroleum (including crude oil or any
fraction thereof), asbestos and polychlorinated biphenyls, (C) a “hazardous
waste” as that term is defined in 40 C.F.R. § 261.3(a)(2)(ii), and (D) toxic or
hazardous (or words of similar meaning and regulatory effect) under any
Environmental Law or for which exposure is prohibited, limited or regulated
under any Environmental Law.

        “Indebtedness” shall mean, of any Person, without duplication, (i) all
obligations of such Person for borrowed money or in respect of loans or advances
or for deferred purchase price of property or services (other than trade
payables on terms of ninety (90) days or less but only to the extent paid on
such terms), (ii) all obligations of such Person evidenced by a note, bond,
debenture or similar instrument or debt securities, (iii) all obligations of
such Person under any leases which in accordance with GAAP are required to be
capitalized on the balance sheet of such Person, (iv) all obligations of such
Person in respect of letters of credit and bankers’ acceptances issued for the
account of such Person, (v) all obligations of such Person in respect of
sale-leaseback arrangements, (vi) all obligations of such Person in respect of
any guaranty of the Indebtedness of another Person, (vii) all obligations of any
other Person secured by any Encumbrance on any property owned by such Person,
and (viii) all obligations of such Person for accrued interest, prepayment
premiums or penalties related to any of the foregoing.

-6-

        “Indemnification” shall mean the right of a Buyer Indemnified Party to
indemnification pursuant to Section 7.2(a) or the right of a Seller Indemnified
Party to indemnification pursuant to Section 7.3(a).

        “Indemnified Party” shall have the meaning given such term in Section
7.4.

        “Indemnifying Party” shall have the meaning given such term in Section
7.4.

        “Index Rate” shall mean the 10-year USD swap rate as published by
Bloomberg, ticker symbol USSW10, as of the close of business on the date that is
the last Business Day prior to the Closing Date.

        “Insurance Policies” shall have the meaning given such term in Section
3.16(a).

        “Intellectual Property Rights” shall have the meaning given such term in
Section 3.23(a).

        “Interest” shall mean Seller’s 50% general partnership interest in the
Company.

        “Interim Loss Adjustment” shall have the meaning given to such term in
Section 2.5(a)(iii).

        “Knowledge of Buyer” and “to Buyer’s Knowledge” mean, and shall be
limited to, the actual knowledge of those individuals involved in the
transactions contemplated by the Agreement on behalf Buyer and those individuals
involved in the administration of Buyer’s relationship with the Company.

        “Knowledge of Seller” and “to Seller’s Knowledge” mean, and shall be
limited to, the actual knowledge of Bruce Hamilton, Chris Ganley, Glen French,
Dan Arbough, Maggie Estrada, Dave Smith and Don Keisling (or their respective
replacements, as applicable).

        “Laws” shall mean any constitution, law, statute, code, regulation,
rule, injunction, judgment, order, ordinance, decree, directive, ruling, charge,
permit, license, approval, determination or other authorization or restriction
of any applicable Governmental Authority.

        “Liabilities” means liabilities, debts or obligations, absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown.

        “Loss Threshold” shall have the meaning given such term in Section
7.2(c).

        “Losses” shall mean all debts, liabilities, obligations, losses,
damages, costs and expenses (including, interest including prejudgment interest
in any litigated matter), penalties, fines, court costs and reasonable
consultants’ and attorneys’ fees and expenses, judgments, settlements and
assessments.

        “LPO” means LG&E Power Operations Inc., a California corporation.

        “LPS” means LG&E Power Services LLC, a Delaware limited liability
company.

-7-

        “Material Adverse Effect” shall mean any material and adverse effect on
any of (i) the ownership of the Interest, or the authority or ability of Seller
or the Seller Guarantor to perform its respective obligations under or
consummate the transactions contemplated by this Agreement, the Ancillary
Agreements and the Seller Guaranty (as the case may be), (ii) the Assets,
business, condition (financial or otherwise) or results of operations of the
Company, taken as a whole, (iii) the condition, use or operation of the Facility
or (iv) the payments due from Virginia Power under the ROVA I PPA and the ROVA
II PPA; provided, that (x) any effect that would reasonably be expected to
result in an aggregate diminution in value of the Interest in excess of one
million dollars ($1,000,000) shall be deemed a “Material Adverse Effect”, and
(y) any effect described in clauses (ii) through (iv) above that would not
reasonably be expected to result in an aggregate diminution in value of the
Interest in excess of one million dollars ($1,000,000) shall be deemed not to be
a “Material Adverse Effect”.

        “Material Contracts” shall mean all Contracts (other than, in the case
of Contracts described in clauses (A) through (D), (F) through (J) and (L),
Contracts that were entered into in the ordinary course of business consistent
with past practice and would not reasonably be expected to obligate the Company
to incur, for any individual contract, in excess of $50,000 in payments or
liabilities during any calendar year) that constitute: (A) a lease of any real
or personal property; (B) an agreement to purchase or sell a capital asset or
Equipment; (C) an agreement relating to the borrowing or lending of money other
than accounts payable or accounts receivable arising in the ordinary course of
business consistent with past practice; (D) a guaranty, contribution agreement,
support, indemnity, letter of credit, performance bond or other agreement that
includes any guaranty, contribution, support, surety or indemnity obligation;
(E) an agreement limiting in any respect the ability of the Company (or an
Affiliate of the Company after the Closing Date) to compete in any line of
business or with any person; (F) a license or franchise agreement involving
payments by, on behalf, to or with respect to the Company; (G) an agreement
pursuant to which the Company may be expected to supply goods or to perform
services; (H) an agreement pursuant to which the Company may be obligated to pay
for goods and services to be delivered or performed (including without
limitation the O&M Agreement); (I) a collective bargaining agreement or other
labor agreement or employment agreement (other than at will employment
agreements) or consulting agreement pursuant to which services are rendered to
the Company or at or in connection with the Facility; (J) an agreement other
than this Agreement pursuant to which the Company may become obligated to pay
any amount in respect of indemnification obligations, purchase price adjustments
or otherwise; (K) any powers of attorney; or (L) any other Contract that is
material to the Company or the Facility or the conduct of the business or
operations of the Company or the Facility.

        “O&M Agreement” shall mean the Amended and Restated Facility Operating
Agreement dated December 1, 1993 between the Company and LPS as successor to UC
Operating Services.

        “Owned Property” shall mean the real property described in Schedule
1.1(d).

        “Partnership Agreement” shall mean the Amended and Restated General
Partnership Agreement dated as of December 1, 1993 between Seller and [**].

        “Party” and “Parties” shall have the meanings given such terms in the
Preamble to this Agreement.

-8-

        “Pending Arbitration” shall mean the arbitration now pending between an
Affiliate of LPS and the Republic of Argentina.

        “Permits” shall mean all licenses, identification numbers, permits,
certificates, orders, consents, approvals, registrations, authorizations,
qualifications and filings required under all applicable Laws.

        “Permitted Encumbrances” shall mean those:

        (i)       Encumbrances set forth on Schedule 1.1(e);

        (ii)      Encumbrances for Taxes which are not yet due and payable;

        (iii)     Exceptions to title which are contained in the title insurance
commitments referred to in Schedule 1.1(f);

        (iv)     Any matters shown on the surveys referred to in Schedule
1.1(g);

        (v)      Purchase money security interests for payment obligations less
than $10,000 individually or $50,000 in the aggregate; and

        (vi)     Encumbrances in respect of leases of Equipment by third parties
to the Company identified on Schedule 3.15 or not required to be so identified.

        “Person” shall mean any natural person, firm, partnership, association,
corporation, limited liability company, trust, Governmental Authority or other
entity.

        “PUHCA” shall mean the Public Utility Holding Company Act of 1935, as
amended.

        “Purchase Price” shall have the meaning given such term in Section 2.2.

        “Purchase Rights” shall mean any right of [**] to purchase the Interest
pursuant to the Partnership Agreement and any right of Virginia Electric and
Power Company (“Virginia Power”) to purchase the Interest pursuant to the Third
Amendment and Restatement of the Power Purchase and Operating Agreement by and
between the Company and Virginia Power effective as of December 1, 2000 (the
“ROVA I PPA”), the First Refusal Agreement between the Company and Virginia
Power dated November 19, 1991, or the Second Amendment and Restatement of the
Power Purchase and Operating Agreement by and between the Company and Virginia
Power dated November 21, 2000 (the “ROVA II PPA”).

        “PURPA” shall mean the Public Utility Regulatory Policies Act of 1978,
as amended.

        “Real Property” shall mean the Owned Property and the Easement Property.

        “Release” shall mean any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration of
Hazardous Material into the indoor or outdoor environment (including ambient
air, surface water, groundwater and surface or subsurface strata), or into or
out of any property.

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        “Remedial Action” shall mean any action or proceeding initiated by a
Governmental Authority or third party to (a) cause the removal of any Hazardous
Material, or (b) correct or prevent or remediate an environmental problem or
condition resulting from the prior treatment, storage, use or disposal of
Hazardous Material or to recover the cost of either.

        “Replacement Insurance” shall have the meaning given to such term in
Section 5.14.

        “Representation Date” means the Effective Date.

        “Required Consents” shall mean the Seller Required Consents and the
Buyer Required Consents.

        “ROVA I” and “ROVA II” shall have the meanings given such terms in the
Recitals to this Agreement.

        “Securities Act” shall have the meaning given such term in Section 4.6.

        “Seller” shall have the meaning given such term in the Preamble to this
Agreement.

        “Seller Fundamental Indemnification” shall have the meaning given such
term in Section 7.3(c).

        “Seller Guarantor” shall mean LG&E Energy LLC, a Kentucky limited
liability company, as guarantor under the Seller Guaranty.

        “Seller Guaranty” shall mean the duly executed guaranty dated as of the
Effective Date of the Seller Guarantor of the obligations of Seller under this
Agreement in substantially the form of Exhibit 5.11(b) attached hereto.

        “Seller Indemnified Parties” shall have the meaning given such term in
Section 7.3(a).

        “Seller Required Consents” shall mean those consents, approvals, notices
and waivers, each of which is set forth on Schedule 1.1(i) on the part of Seller
or the Company that are required in connection with the consummation of the
transactions contemplated by the Agreement.

        “Seller Supplemental Disclosure” means any written supplements or
amendments to the Disclosure Schedules or enumerated schedules attached hereto,
which supplements and amendments are delivered by Seller to Buyer subsequent to
the Representation Date and prior to the Closing.

        “Settlement Date” shall have the meaning given such term in Section
2.5(a)(iv).

        “Substitute Letters of Credit” means one or more letters of credit
satisfying the requirements of Section 6.1(f) of the Credit Agreement that are
issued by an Affiliate of Buyer or another issuer which, in either case,
satisfies the requirements of Section 6.1(f) of the Credit Agreement, and are
delivered by Buyer to the Agent in accordance with Section 6.1(f) of the Credit
Agreement.

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        “Tax” or “Taxes” shall mean any federal, state, county, local, or
foreign taxes, charges, levies, imposts, duties, other assessments, or similar
charges of any kind whatsoever, including any interest, penalties and additions
imposed thereon or with respect thereto.

        “Tax Indemnification” shall mean the right of a Buyer Indemnified Party
to Indemnification pursuant to Section 7.2(a) with respect to representations
and warranties made in Section 3.21.

        “Tax Return” shall mean any report, return, information return or other
information required to be supplied by the Company to a taxing authority in
connection with Taxes.

        “Termination Date” means November 30, 2004.

        “Venture Management Agreement” shall mean the Amended and Restated
Venture Management Agreement dated December 1, 1993 between the Company, WEL and
LPO.

        “WEL” shall mean Westmoreland Energy, LLC, a Delaware limited liability
company.

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        1.2 Construction. All article, section, subsection, schedule and exhibit
references herein are to this Agreement unless otherwise specified. All
schedules and exhibits attached to this Agreement constitute a part of this
Agreement and are incorporated herein. Unless the context of this Agreement
clearly requires otherwise, (i) the singular shall include the plural and the
plural shall include the singular wherever and as often as may be appropriate,
(ii) the words “includes” or “including” shall mean “including without
limitation,” and (iii) the words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Agreement shall refer to this Agreement as a whole and not
any particular section or article in which such words appear.

ARTICLE 2.
PURCHASE AND SALE

        2.1     Purchase and Sale; Other Transactions. Upon and subject to the
terms and conditions of this Agreement, at the Closing (i) Seller agrees to
sell, assign, transfer and convey to Buyer all of its right, title and interest
in and to the Interest, and Buyer agrees to (x) purchase and accept the
assignment, transfer and conveyance of all such right, title and interest in and
to the Interest pursuant to the assignment and assumption agreement in
substantially the form of Exhibit 2.4(a)(vi) attached hereto, and (y) pay the
Purchase Price to Seller in accordance with Section 2.2, (ii) Seller agrees to
cause LPO to assign and transfer the Venture Management Agreement to Buyer, and
Buyer agrees to accept such assignment and assume the obligations of LPO under
the Venture Management Agreement pursuant to the assignment and assumption
agreement in substantially the form of Exhibit 2.4(a)(vii) attached hereto, and
(iii) Buyer agrees to deliver or cause to be delivered to the Agent Substitute
Letters of Credit or cash, at Buyer’s option, in an aggregate amount not
exceeding the difference of $9,850,000 minus the Cash Protection Amount, to the
Agent and/or the Lenders under the Credit Agreement. Except for the obligations
of Seller under the Partnership Agreement and the Venture Management Agreement
assumed pursuant to the Assignment and Assumption Agreements delivered pursuant
to Sections 2.4(b)(iv) and (v), Buyer is not assuming any Liabilities of Seller.

        2.2     Purchase Price. Subject to the terms and conditions of this
Agreement, and in consideration of the transactions described in Section 2.1,
Buyer shall pay to Seller at Closing the total purchase price for the Interest
(the “Purchase Price”) in an amount equal to:

                (a)     THIRTY-ONE MILLION EIGHT HUNDRED EIGHTY-FIVE THOUSAND
UNITED STATES DOLLARS (US $31,885,000);

                (b)     minus, if the Index Rate is greater than the Base Rate
plus 25 Basis Points (the "Decrease Threshold"), an amount equal to $20,000 for
each Basis Point by which the Index Rate exceeds the Decrease Threshold;

                (c)     plus, if the Index Rate is less than the Base Rate minus
25 Basis Points (the "Increase Threshold"), an amount equal to $20,000 for each
Basis Point by which the Increase Threshold exceeds the Index Rate;

                (d)     minus the amount, if any, available under the Existing
Letters of Credit immediately prior to the Closing; and

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                (e)     minus 100% of the amount, if any, of any distributions
or dividends made by the Company to Seller after February 2, 2004.

        2.3     Closing. The closing of the transactions contemplated hereby
(the “Closing”) shall occur at 10:00 a.m. EST on the date (the “Closing Date”)
which is (i) within three (3) business days following the satisfaction of the
conditions precedent to the Closing set forth in Article 6 (other than those
designated to be satisfied at the Closing) at the offices of Nixon Peabody LLP
located at Suite 900, 401 9th Street, N.W., Washington, D.C., or (ii) such other
time, date or place as the Parties may otherwise agree.

        2.4     Deliveries at Closing..

                (a)     By Seller to Buyer. At the Closing, Seller shall
deliver, or cause to be delivered, to Buyer the following items, each properly
executed and dated as of the Closing Date:

                         (i)          Copies of the Governing Instruments and
Authorizing Documents of each of Seller and the Seller Guarantor, certified by
an appropriate officer, partner, manager, member or other representative of each
of Seller or Seller Guarantor, as the case may be;

                         (ii)         Copies of the Governing Instruments of the
Company certified by an appropriate officer, partner, manager, member or other
representative of the Company or Seller;

                         (iii)        The certificate required pursuant to
Section 6.1(d) hereof;

                         (iv)        A statement, in the form set forth in
Treasury Regulationss. 1.1445-2(b)(2) and made under penalties of perjury by
Seller, that (among other things) Seller is not a foreign person;

                         (v)         An IRS Form W-9 completed by Seller;

                         (vi)        An Assignment and Assumption Agreement with
respect to the Interest, duly executed by Seller in substantially the form of
Exhibit 2.4(a)(vi) attached hereto;

                         (vii)       An Assignment and Assumption Agreement with
respect to the Venture Management Agreement, duly executed by LPO, in
substantially the form of Exhibit 2.4(a)(vii) attached hereto; and

                         (viii)     A Transition Services Agreement, duly
executed by Seller, in the form of Exhibit 6.1(m).

                (b)     By Buyer to Seller. At the Closing, Buyer shall deliver,
or cause to be delivered, to Seller the following items, each (where applicable)
properly executed and dated as of the Closing Date:

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                         (i)          The Purchase Price calculated in
accordance with Section 2.2;

                         (ii)         A Certificate of an appropriate officer,
partner, manager, member or other representative of Buyer as to the Governing
Instruments and Authorizing Documents of Buyer;

                         (iii)        The Certificate required pursuant to
Section 6.2(c) hereof;

                         (iv)        An Assignment and Assumption Agreement with
respect to the Interest duly executed by Buyer in substantially the form of
Exhibit 2.4(a)(vi) attached hereto; and

                         (v)        An Assignment and Assumption Agreement with
respect to the Venture Management Agreement, duly executed by an Affiliate of
Buyer reasonably acceptable to WEL in substantially the form of Exhibit
2.4(a)(vii) attached hereto.

                (c)     Other Documents. Buyer and Seller shall execute and
deliver to each other at Closing such other documents and agreements as may be
reasonably necessary and desirable to consummate the transactions contemplated
hereby.

        2.5     Casualty Losses..

                (a)     If, before the Closing Date, a Casualty Loss occurs and
the estimated cost to repair or restore the damage related to such Casualty Loss
(or the diminution in value of the Facility attributable to a Casualty Loss if
such Casualty Loss is a condemnation or taking by eminent domain) is less than
$2,000,000, then such Casualty Loss shall not affect the obligation of the
Parties to close the transactions contemplated by this Agreement and:

                         (i)     each representation or warranty affected by
such Casualty Loss shall be deemed to be true for all purposes under this
Agreement (including Sections 6.1(b) and 7.2(a)) to the same extent that it
would have been true if such Casualty Loss had not occurred; provided, however,
for the avoidance of doubt, the occurrence of a Casualty Loss shall not cause a
representation or warranty to be deemed to be true to the extent that such
representation or warranty would not have been true if the Casualty Loss had not
occurred;

                         (ii)     the estimated cost to repair or restore the
damage related to such Casualty Loss (or the diminution in value of the Facility
attributable to a Casualty Loss if such Casualty Loss is a condemnation or
taking by eminent domain), but not any other impact or consequences of such
Casualty Loss, shall not be taken into account in determining whether the
condition in Section 6.1(c) has been satisfied;

                         (iii)     the Purchase Price payable at the Closing
shall be reduced by an amount (the "Interim Loss Adjustment") equal to fifty
percent (50%) of the difference of (x) the estimated cost to repair or restore
the damage (or the diminution in value of the Facility attributable to a
condemnation or taking by eminent domain) related to such Casualty Loss, minus
(y) the estimated net insurance or condemnation proceeds (other than insurance
proceeds, if any, in respect of business interruption insurance) that will be
received by the Company in respect of such Casualty Loss; and

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                         (iv)     a post-Closing adjustment shall be made to
account for the difference between the Interim Loss Adjustment and an amount
(the "Final Loss Adjustment") equal to fifty percent (50%) of the difference of
(x) the actual cost to repair or restore the damage (or the diminution in value
of the Facility attributable to a condemnation or taking by eminent domain)
related to such Casualty Loss, minus (y) the actual net insurance or
condemnation proceeds (other than insurance proceeds, if any, in respect of
business interruption insurance) that are received by the Company in respect of
such Casualty Loss. Buyer shall give Seller notice of the Final Loss Adjustment,
together with reasonable documentation supporting the basis for and calculation
of the Final Loss Adjustment, within thirty (30) days after the later of (A) the
completion of the repair or restoration of the damage related to such Casualty
Loss, or (B) the receipt by the Company of all insurance or condemnation
proceeds to which it is entitled as a result of the Casualty Loss, but no later
than one year following the date specified in clause (A) (such date, as
applicable, the "Settlement Date"). If the Interim Loss Adjustment was less than
the Final Loss Adjustment (determined as of the Settlement Date), Seller shall
pay the amount of such difference to the Buyer, and if the Interim Loss
Adjustment was greater than the Final Loss Adjustment (determined as of the
Settlement Date), Buyer shall pay the amount of such difference to Seller. Such
payment shall be paid by the applicable Party within fifteen (15) days after (1)
if payment is owed by Seller to Buyer, the date Buyer has given Seller the
notice required by this clause (iv), or (2) if payment is owed by Buyer to
Seller, the date Buyer is required to give Seller the notice required by this
clause (iv). If, after the Settlement Date, the Company receives any insurance
or condemnation proceeds (other than insurance proceeds, if any, in respect of
business interruption insurance) in respect of such Casualty Loss, then Buyer
shall pay to Seller an amount equal to fifty percent (50%) of the actual net
insurance or condemnation proceeds (other than insurance proceeds, if any, in
respect of business interruption insurance) that are received by the Company
after the Settlement Date in respect of such Casualty Loss. Buyer shall pay such
amount to Seller within fifteen (15) days after the applicable insurance or
condemnation proceeds are received by the Company and shall be accompanied by a
statement of out-of-pocket expenses deducted to determine the amount of net
proceeds.

For purposes of clauses (iii) and (iv) of this Section 2.5(a), “net insurance or
condemnation proceeds” shall mean the amount of insurance or condemnation
proceeds received (or in the case of clause (iii) estimated to be received)
minus the amount of out-of-pocket costs reasonably incurred (or in the case of
clause (iii) estimated to be reasonably incurred) in collecting such insurance
or condemnation proceeds; provided, costs of collecting proceeds of business
interruption insurance shall in no event be deducted.

                (b)     If, before the Closing Date, a Casualty Loss occurs and
the estimated cost to repair or restore the damage related to such Casualty Loss
(or the diminution in value of the Facility attributable to a Casualty Loss if
such Casualty Loss is a condemnation or taking by eminent domain) is equal to or
greater than $2,000,000, then Buyer may elect to terminate this Agreement by
delivering written notice of such termination to Seller within thirty (30) days
after receipt by Buyer of Seller's written notice that a Casualty Loss covered
by this Section 2.5(b) has occurred; provided, however, if Buyer does not
terminate this Agreement under such circumstances and the Closing occurs despite
such Casualty Loss then:

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                         (i)     each representation or warranty affected by
such Casualty Loss shall be deemed to be true for all purposes under this
Agreement (including Sections 6.1(b) and 7.2(a)) to the same extent that it
would have been true if such Casualty Loss had not occurred; provided, however,
for the avoidance of doubt, the occurrence of a Casualty Loss shall not cause a
representation or warranty to be deemed to be true to the extent that such
representation or warranty would not have been true if the Casualty Loss had not
occurred;

                         (ii)     the estimated cost to repair or restore the
damage related to such Casualty Loss (or the diminution in value of the Facility
attributable to a Casualty Loss if such Casualty Loss is a condemnation or
taking by eminent domain), but not any other impact or consequences of such
Casualty Loss, shall not be taken into account in determining whether the
condition in Section 6.1(c) has been satisfied;

                         (iii)     no adjustment to the Purchase Price shall be
made with respect to such Casualty Loss; and

                         (iv)     Seller shall not be entitled to receive any
insurance or condemnation proceeds with respect to such Casualty Loss.

        2.6     Payments. All payments required by this Agreement shall be made
by wire transfer or delivery of immediately available funds in accordance with
the payment instructions set forth on Schedule 2.6 hereto or in accordance with
other payment instructions given by the recipient by written notice to the payor
a reasonable period of time prior to the date the payment must be made or, if
the payment must be made within a particular number of days, prior to the first
day of such period.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLER

        Seller hereby represents and warrants to Buyer on and as of the
Representation Date and the Closing Date (provided that all representations and
warranties which are made as of a specific date are made only as of such date)
that, except as set forth in the section of the Disclosure Schedules
corresponding to the Section of this Article 3 containing such representation or
warranty or as otherwise provided in Section 9.11:

        3.1     Organization. Seller is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of California,
is duly qualified to transact business in the State of North Carolina and has
all requisite limited partnership power and authority to own, lease and operate
its properties and to carry on its business as currently conducted.

        3.2     Enforceability. (i) The execution, delivery and performance of
this Agreement and the Ancillary Agreements is within Seller’s limited
partnership power and authority; and (ii) the execution and delivery by Seller
of this Agreement and the Ancillary Agreements and the consummation by it of the
transactions contemplated hereby and thereby has been duly and validly
authorized and no other internal proceedings on its part are necessary to
authorize its execution and delivery of this Agreement and the Ancillary
Agreements or its consummation of the transactions contemplated hereby or
thereby, (iii) this Agreement has been, and all of the Ancillary Agreements to
which Seller is a party will be, duly and validly executed and delivered by it,
and (iv) Seller’s obligations under this Agreement are, and its obligations
under the Ancillary Agreements to which it is a party will be, when executed and
delivered by the Parties hereto and thereto, its legal, valid and binding
obligations, enforceable against it in accordance with their respective terms
subject to (A) applicable bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium or other similar laws relating
to creditors’ rights or creditors’ remedies generally; and (B) general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).

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        3.3     Seller's Consents and Approvals; No Violation or Conflict by
Seller.

                (a)     Except for the FERC Transaction Approvals and the
Required Consents, no notice to, filing or registration with, and no Permit of
any Governmental Authority or any consent or approval of any other Person is
necessary or is required to be made or obtained by Seller or the Seller
Guarantor in connection with the execution and delivery of this Agreement, the
Seller Guaranty or the Ancillary Agreements by Seller or Seller Guarantor or for
the consummation by Seller or Seller Guarantor of the transactions contemplated
hereby and thereby.

                (b)     The execution and delivery of the this Agreement, the
Seller Guaranty and the Ancillary Agreements by Seller and Seller Guarantor, the
performance of this Agreement, the Seller Guaranty and the Ancillary Agreements
by Seller and Seller Guarantor (as applicable) and the consummation of the
transactions contemplated hereby do not (i) conflict with or result in any
breach of any provision of the Governing Instruments of Seller or Seller
Guarantor, (ii) conflict with or violate any Law applicable to Seller or Seller
Guarantor or any of their respective properties or assets, or (iii) subject to
obtaining all Seller Required Consents, conflict with or result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions
of any contract, agreement, lease, license, mortgage, indenture, instrument or
other arrangement to which Seller or Seller Guarantor is a party or by which
Seller or Seller Guarantor or any of their respective properties or assets may
be bound, or (iv) subject to obtaining all Seller Required Consents, result in
the creation of any material lien, charge or encumbrance of any kind whatsoever
upon the Interest.

        3.4     Title to the Interest. Seller owns the Interest beneficially and
of record and free and clear of any and all Encumbrances. Except for the
Purchase Rights, there are no outstanding contracts, agreements, options or
commitments of any nature obligating Seller to transfer all or any portion of
the Interest. Upon Closing, including assignment of the Interest to Buyer at the
Closing and Buyer’s payment of the Purchase Price, Buyer will be the sole
beneficial owner of the Interest, free and clear of all Encumbrances other than
any Encumbrances created by Buyer.

        3.5     Ownership. The Interest represents a 50.0% general partnership
interest in the Company. The Interest has been duly and validly issued and was
not issued in violation of any preemptive or other similar right. Assuming the
accuracy of the representations contained in Sections 4.6 and 4.7, the Interest
was offered and sold in compliance with all applicable federal and state
securities laws and regulations. Except for the Purchase Rights, there are no
outstanding or authorized options, warrants, purchase rights, conversion rights,
exchange rights, or other contracts or commitments to subscribe for or purchase,
or other rights of any kind (preemptive or otherwise) to acquire, any Equity
Interest in the Company. Except as set forth in the Governing Instruments of the
Company, there are no voting trusts, proxies or other agreements or
understandings applicable to the Interest or any other Equity Interest in the
Company. The Company does not hold and has not held any Equity Interest in any
Person. The Company has no assets or Liabilities other than assets or
Liabilities related to the Facility or the development, financing or current or
past operation thereof.

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        3.6     Organization. The Company is duly formed, validly existing and
in good standing under the laws of the jurisdiction of its organization, and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as currently conducted. The Company is duly qualified
or licensed to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary. Schedule 3.6(a) sets forth a list of
all jurisdictions in which the Company is qualified to do business.

        3.7     Financial Statements. The Financial Statements have been
prepared in accordance with GAAP, consistently applied throughout the periods
indicated, and fairly present in accordance with GAAP throughout the periods
involved (except to the extent required by changes in GAAP or as described in
the notes thereto) the financial position as of the respective dates thereof or
for the respective periods set forth therein and the results of operations and
cash flow for the periods set forth therein.

        3.8     Absence of Undisclosed Liabilities. The Company and its Assets
are not subject to (a) any Liability required by GAAP to be reflected in its
balance sheet or disclosed in the notes thereto, other than Liabilities (i)
reflected on the Current Balance Sheet or disclosed in the notes thereto, or
(ii) incurred in the ordinary course of business since the date of the Current
Balance Sheet, or (b) any Liability known to Seller that is not of a nature
required by GAAP to be reflected in its balance sheet or disclosed in the notes
thereto, other than any such Liability which (i) Seller would not reasonably
expect, individually or in the aggregate (excluding Liabilities covered by
clause (ii) of this clause (b)), to have a Material Adverse Effect, or (ii)
arises under a Contract that is identified in the Disclosure Schedules or is not
required to be so identified.

        3.9     Company's Consents and Approvals; No Violation or Conflict by
Company.

                (a)     Except for the FERC Transaction Approvals and the
Required Consents, no notice to, filing or registration with, and no Permit of
any Governmental Authority or any consent or approval of any other Person is
necessary or is required to be made or obtained by the Company in connection
with the transactions contemplated by this Agreement or the Ancillary
Agreements.

                (b)     The execution, delivery and performance of this
Agreement, the Seller Guaranty and the Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby, in each case by Seller and
the Seller Guarantor, do not (i) conflict with or result in any breach of any
provision of the Governing Instruments of the Company, (ii) conflict with or
violate any Law binding on the Company or any of its Assets or (iii) subject to
obtaining all Seller Required Consents, conflict with or result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation,
modification or acceleration) under, any of the terms, conditions or provisions
of (x) any Material Contract, or (y) any Intellectual Property Right or other
instrument or obligation to which the Company is a party or by which the Company
or any of its Assets may be bound except, in the case of this clause (y), for
any conflict, violation, breach or default that would not reasonably be expected
to result in a Material Adverse Effect, (iv) result in the creation of any
material lien, charge or encumbrance of any kind whatsoever upon the Assets, or
(v) result in the cancellation, modification, revocation or suspension of any
Permit of the Company.

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        3.10     No Adverse Change. Since the Financial Statement Date there has
not been: (a) any change in the business, condition (financial or otherwise) or
results of operations of the Company or the physical condition of the Facility
that would reasonably be expected to result in a Material Adverse Effect; (b)
any loss, damage, condemnation or destruction to any of the properties of the
Company that has caused or would reasonably be expected to cause a Material
Adverse Effect (whether covered by insurance or not); (c) any labor dispute or
disturbance, litigation, work stoppage or other event or condition that could
have an effect similar to a labor dispute, disturbance, work stoppage or
litigation and that has had or would reasonably be expected to have a Material
Adverse Effect; (d) incurrence of any Indebtedness by the Company in excess of
$100,000 individually or in the aggregate, (e) any Encumbrance made on any of
the Assets of the Company, except for Permitted Encumbrances; (f) any sale,
transfer or other disposition of Assets of the Company other than in the
ordinary course of business consistent with past practice; (g) any capital
expenditures by the Company other than in the ordinary course of business
consistent with past practice; (h) any change in the methods of accounting or
accounting practices of the Company, except as required by Law and disclosed in
writing to Buyer; or (i) to the Knowledge of Seller, any agreement (oral or
written) by the Company that would reasonably be expected to result in a
transaction covered by clauses (d) through (h) of this Section 3.10.

        3.11     No Litigation. There is no Claim pending or, to the Knowledge
of Seller, any Claim threatened (i) against the Company; (ii) against Seller or
any of its Affiliates relating to the business of the Company, the Assets, or
the operation, maintenance or development of the Facility; or (iii) that seeks
restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby; in the
case of clause (i) or clause (ii), except for any Claim that would not
reasonably be expected to result in a Material Adverse Effect.

        3.12     Title to and Condition of Assets. Schedule 3.12 lists each item
of personal property with a book value of $10,000 or greater owned by the
Company. The Company has good and valid title to the Assets of the Company
(excluding, for purposes of this sentence, Real Property and Assets held under
leases or licenses that are identified in Schedule 3.15 or are not required to
be so identified), free and clear of any and all Encumbrances except Permitted
Encumbrances. The Assets constitute all assets that are used by the Company in
the operation of the Facility in the manner in which it is operated on the
Representation Date. The Facility and its mechanical systems and equipment are
in good working order, normal wear and tear excepted, have been operated in
accordance with prudent utility practices, and, to the Knowledge of Seller,
there are no structural defects or deficiencies with respect thereto.

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        3.13     Real Property. Except for the Real Property, the Company does
not own or lease any tract or parcel of real property or have the right to
occupy or use any parcel or tract of real property. The Company has good,
marketable and insurable fee title to the Owned Property and the improvements on
the Owned Property that constitute the Facility. The Company has a perpetual,
non-exclusive easement with respect to the Easement Property. Except for
Permitted Encumbrances, no Persons other than the Company have any right to
occupy the Owned Property or any part thereof and no Persons other than the
Company occupy or are in possession of the Owned Property or any portion
thereof. With respect to the Real Property:

                (a)     there are no pending or, to the Knowledge of Seller,
threatened condemnation or other proceedings, lawsuits, or administrative
actions relating to the Real Property or any part thereof, or the rights, title
or interests of the Company therein;

                (b)     (i) To Seller's Knowledge, except for the Permitted
Encumbrances, no improvements have been located outside areas for which rights
have been obtained as set forth in the title commitments described in the
definition of Permitted Encumbrances; (ii) except for the Permitted
Encumbrances, no building or improvement on any adjacent land encroaches on the
Real Property; and (iii) the buildings and improvements on each parcel of Real
Property comply in all material respects with all applicable Permits relating to
real property and zoning laws and other applicable statutes, codes, ordinances
and regulations relating to real property, except to the extent compliance
therewith is not required (as, for example, a pre-existing non-conforming
setback requirement);

                (c)     (i) To Seller's Knowledge, the zoning and Permits in
place for the Real Property are sufficient to permit the uses presently being
made of such Real Property; (ii) there is no pending, and to the Knowledge of
Seller no threatened, challenge to any zoning designation or Permit affecting
any parcel of Real Property or the use thereof that could adversely affect
operations on or, except for the Permitted Encumbrances, affect the rights of
the Company to occupy or use the Real Property;

                (d)     To Seller's Knowledge, except for any matters set forth
in the title commitments described in the definition of Permitted Encumbrances,
no improvements have been made within any wetlands without obtaining all
necessary Permits;

                (e)     To Seller's Knowledge, all certificates of occupancy and
all other required real property approvals permitting the operation of the
Facility have been obtained to the extent that they are required as of the
Representation Date;

                (f)     except for any matters set forth in the title
commitments described in the definition of Permitted Encumbrances, the Company
has not granted any options or rights of refusal that remain executory to the
purchase or sale of any interest in any of the Real Property or any portion
thereof, and to the Knowledge of Seller, there are no restrictions, covenants,
conditions, or agreements affecting the Real Property which are unrecorded or
not a matter of public record;

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                (g)     the Facility is supplied with all utilities and other
services necessary for the present operation thereof, including as applicable,
gas, electricity, water, telephone, sanitary sewer or septic system and storm
water management, all of which services are adequate for the present operation
thereof, and, to the Knowledge of Seller, except for Permitted Encumbrances, all
such utilities and other services are provided on, over and across public roads
or permanent, irrevocable, appurtenant easements benefiting the Facility; and

                (h)     the Facility has direct vehicular access to a public
road, or has access to a public road on, over and across a permanent,
irrevocable, appurtenant easement benefiting the Facility (except to the extent
that any such easement may be terminated upon the termination of any Contract),
and access to the Real Property is provided by rights-of-way approved (if
required) by the local planning and/or zoning boards or other administrative
agency of the municipality, and, if relevant, state.

        3.14      Books and Records. The Books and Records of the Company are
complete and correct in all material respects.

        3.15      Contracts.

                (a)     Schedule 3.15 sets forth a list of all of the Material
Contracts. Seller has made available to Buyer true and complete copies of each
Material Contract. Each Material Contract: (i) is in full force and effect, and
(ii) is legal, valid and binding and is enforceable by the Company in accordance
with its terms, subject to (A) applicable bankruptcy, insolvency, fraudulent
conveyance, fraudulent transfer, reorganization, moratorium or other similar
laws relating to creditors' rights or creditors' remedies generally; and (B)
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Each of the Company and, if applicable, Seller
has performed each term, covenant and agreement of each of the Material
Contracts that is to be performed by it except where the failure to perform such
obligations would not reasonably be expected to have a Material Adverse Effect,
and neither Seller nor, to the Knowledge of Seller, the Company has any present
expectation or intention of not fully performing all such obligations. No event
has occurred that constitutes, or, with the passage of time or compliance with
any applicable notice requirements, would constitute, a default by the Company
or Seller under any of the Material Contracts except where such default would
not reasonably be expected to have a Material Adverse Effect. No Material
Contract has been modified, amended, supplemented, cancelled or terminated in
any material respect by any oral or written agreement except for any
modification, amendment, supplement, cancellation or termination after the
Representation Date permitted by Section 5.2 because Buyer has consented
thereto.

                (b)     To the Knowledge of Seller, each of the parties to the
Material Contracts other than Seller and the Company has performed each material
term, covenant and condition of each of the Material Contracts that is to be
performed by such party. To the Knowledge of Seller, no event has occurred that
constitutes, or with the passage of time or compliance with any applicable
notice requirements, would constitute a default by any party (other than the
Company or Seller) under any of the Material Contracts. No party to any of the
Material Contracts has advised Seller or, to the Knowledge of Seller, the
Company of its intention to amend, modify, cancel, terminate or exercise any
option under any of the Material Contracts.

-21-

        3.16      Insurance.

                (a)     Schedule 3.16(a) sets forth a complete and correct list
of all current insurance policies (the "Insurance Policies") under which the
Company is an insured, including policies providing property, casualty and
liability coverage, bond and surety arrangements, self-insurance policies or
arrangements and business interruption insurance policies in respect thereof.
Seller has delivered to Buyer copies of (i) the Insurance Policies and (ii)
certificates of insurance as evidence that such Insurance Policies are in effect
and have the coverages, limits and deductibles (or, as applicable, self-insured
retentions) specified. To the Knowledge of Seller, no event has occurred that,
with notice or lapse of time, would permit the suspension or termination of any
Insurance Policy listed or required to be listed on Schedule 3.16(a).

                (b)     Each Insurance Policy is in full force and effect and no
notice of termination or cancellation or nonrenewal of any such Insurance Policy
has been received by Seller, any of its Affiliates or, to the Knowledge of
Seller, the Company.

                (c)     All policy premiums due and payable in respect of the
Insurance Policies prior to the Closing have been, or will be on or prior to the
Closing Date, paid up to and through the Closing.

                (d)     Since January 1, 1999, to the Knowledge of Seller, the
Company has been continuously insured against risks and losses, with insurers
and in amounts comparable to those of the policies set forth in Schedule
3.16(a), and there is no claim currently pending under any of such policies as
to which coverage has been questioned, denied or disputed by the underwriters of
such policies or in respect of which such underwriters have reserved their
rights.

                (e)     To the Knowledge of Seller, Schedule 3.16(e) contains a
complete list of all open and closed property claims, fidelity claims and other
first party claims under any of the Insurance Policies since January 1, 1999,
the value of each claim and the amount of settlement, as well as a complete list
of all open and closed third party liability claims, workers compensation and
other similar claims brought against the Company since January 1, 2002. To
Seller's Knowledge, no events have occurred prior to the Representation Date
that would reasonably be expected to give rise to any claim under an Insurance
Policy in excess of $100,000.

        3.17      Employees; Labor Matters.

                (a)     The Company does not have, and has never had, any
employees. Except for obligations under the O&M Agreement, the Company does not
have any liabilities relating to employees, employee benefits or any other
employment related matters.

                (b)     With respect to the employees engaged by LPS to operate
the Facility pursuant to the O&M Agreement:

                         (i)       there is no unfair labor practice charge or
complaint against the Company or LPS pending or, to the Knowledge of Seller,
threatened against the Company or LPS before the National Labor Relations Board
or any other comparable federal, state or municipal authority;

-22-

                         (ii)       there is no litigation, arbitration
proceeding, governmental investigation, administrative charge, or action of any
kind pending or, to the Knowledge of Seller, proposed or threatened against the
Company or LPS relating to employment, employment practices, terms and
conditions of employment, wages and hours, or the safety and health of
employees;

                         (iii)     LPS has complete form I-9 paperwork for all
individuals providing services at the Facility and has complied with applicable
immigration Laws with respect to such individuals; and

                         (iv)     No individual who provides services to the
Company and the Facility through LPS is a common law employee of the Company or
the Facility.

                (c)     Neither the Company nor LPS has any collective
bargaining relationship or existing duty to bargain with any labor organization,
and neither the Company nor LPS has recognized any labor organization as the
collective bargaining representative of any of the personnel that operate the
Facility.

                (d)     With respect to each employee benefit plan covered by
Section 412 of the Internal Revenue Code of 1986, as amended (the "Code"),
Section 302(f) of ERISA or Title IV of ERISA which is sponsored, maintained or
contributed to by any Person, trade, business or organization (whether or not
incorporated) that is treated with the Company as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each plan, a "Plan", and the group
of organizations, a "Controlled Group"): (i) no Plan is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA or a "multiple employer plan" as
defined in Section 413(c) of the Code; (ii) no "reportable event" as defined at
Section 4043 of ERISA has occurred with respect to any Plan; (iii) no Plan has
unfunded benefit liabilities (as defined in Section 4001 of ERISA) and each Plan
could be terminated in a "standard termination" under Section 4041(b) of ERISA
on or before the Closing Date without any additional contribution from any
contributing employer (but disregarding any other prerequisites for terminating
such Plan); (iv) there is no accumulated funding deficiency (whether or not
waived) under such Plan; and (v) all contributions and premium payments have
been made and there are no contributions or premium payments that are past due
and owing. Within the six-year period immediately preceding the Closing Date,
none of the Company or any member of the Controlled Group has terminated,
spun-off, merged or transferred assets or liabilities from any Plan or has
incurred any withdrawal liability from any Plan.

                (e)     At no time has the Company or a member of the Controlled
Group maintained any employee pension benefit plan (as defined in Section 3(2)
of ERISA) that is not or has not been administered and operated in compliance
with the applicable requirements of ERISA, the Code and other applicable local,
state and federal law. Such requirements include, but are not limited to, the
tax qualification requirements of Code section 401(a) and the fiduciary duty,
prohibited transaction, reporting, disclosure, and notice requirements of ERISA.

                (f)     At no time has the Company or a member of the Controlled
Group maintained or had any obligation under any Employee Benefit Plan which is
a "group health plan" (as such term is defined in Section 5000 of the Code) that
is not or has not been administered and operated in compliance with the
applicable requirements of ERISA, the Code, the Health Insurance Portability and
Accountability Act ("HIPAA") and other applicable local, state and federal law.
Such requirements include, but are not limited to, the following:

-23-

                         (i)          The continuation coverage requirements of
the Consolidated Omnibus Reconciliation Act ("COBRA");

                         (ii)         The COBRA notice requirements;

                         (iii)        The fiduciary duty, prohibited
transaction, reporting, disclosure, and notice requirements of ERISA;

                         (iv)        The health factor nondiscrimination
requirements of HIPAA;

                         (v)         The special enrollment requirements of
HIPAA;

                         (vi)        The preexisting condition exclusion
limitations of HIPAA;

                         (vii)       The health information privacy standards of
HIPAA;

                         (viii)      The mothers and newborns coverage
requirements of ERISA;

                         (ix)         The mental health parity requirements of
ERISA;

                         (x)          The reconstruction following mastectomy
coverage requirements of ERISA; and

                         (xi)         The nondiscrimination and reporting
requirements of the Code.

        3.18     Compliance with Law. The conduct of the business of the Company
as currently conducted does not violate or conflict with, and has not violated
or conflicted with, any Law, except for such violations which would not
reasonably be expected to result in a Material Adverse Effect, it being
understood that nothing in this Section 3.18 addresses any matter that is the
subject of any representation or warranty in Sections 3.13, 3.17, 3.19, 3.21 or
3.22.

        3.19     Permits. Schedule 3.19 lists all Permits currently held by the
Company for the conduct of the business of the Company or the ownership or
operation of the Facility, including Environmental Permits. The Permits held by
the Company are all those that are required for the operation of the Facility as
presently operated. The Company is not in default (or with the giving of notice
or lapse of time or both, would be in default) under any Permit. Each such
Permit is in full force and effect and not subject to a pending appeal or
administrative or judicial review, and the Company is not in violation of or in
non-compliance with any material obligation under any Permit to which it is
subject. To the Knowledge of Seller, no event has occurred that permits, or upon
the giving of notice or the lapse of time or otherwise would permit, the
revocation, termination or adverse modification of any such Permit.

        3.20     Transactions with Affiliates. Except for the transactions under
the O&M Agreement and the Venture Management Agreement, the Company has not, in
the ordinary course of business or otherwise, purchased, leased or otherwise
acquired any material property or assets or obtained any material services from,
or sold, leased or otherwise disposed of any material property or assets or
provided any material services to, (i) Seller or any Affiliate of Seller, or
(ii) any member of the immediate family of any Affiliate of Seller who is an
individual. The Material Contracts do not include any obligation or commitment
between the Company on the one hand and any of the persons included in clauses
(i) or (ii) of the preceding sentence on the other hand (except for Contracts
with agents and representatives for services rendered in the ordinary course at
regular wage rates).

-24-

        3.21      Tax Matters.

                (a)     The Company has filed or caused to be filed on a timely
basis all Tax Returns required to have been filed by or for it (other than those
for which extensions were requested and obtained in a timely manner), and all
such Tax Returns are true, correct and complete in all material respects. The
Company has no outstanding requests for any extension of time within which to
pay its Taxes or file its Tax Returns. The Company has paid, accrued for payment
or made provision for payment of all Taxes due and payable by it. There are no
unpaid Taxes due and payable by the Company or by any other Person that are or
could become a Lien on any Asset, or otherwise materially adversely affect the
business, properties or financial condition of the Company. The Company is not
liable to any taxing authority for any unpaid Taxes in respect of any taxable
period or any portion thereof ending on or before the Closing Date, which Taxes
are required to be paid on or prior to the date this representation is made. The
Company is in material compliance with, and its records contain all material
information and documents (including, without limitation, properly completed IRS
Forms W-9) necessary to comply with, all applicable Tax information reporting
and Tax withholding requirements. The Company has collected or withheld all
amounts required to be collected or withheld by it for any Taxes, and all such
amounts have been paid to the appropriate Governmental Authorities or set aside
in appropriate accounts for future payment when due. The Financial Statements
fully and properly reflect, as of their dates, all liabilities for Taxes for all
periods ending on or before the date thereof. The unpaid Taxes of the Company
did not, as of the Financial Statement Date, exceed the accrued Taxes (other
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the face of the Current Balance Sheet.

                (b)     The Company has not granted (nor is it subject to) any
waiver currently in effect of the period of limitations for the assessment of
Tax. No unpaid Tax deficiency has been asserted by any taxing authority against
the Company or against Seller in respect of the Interest. There is no pending
examination, administrative or judicial proceeding, or deficiency or refund
litigation, with respect to any Taxes of the Company or with respect to Seller
in respect of the Interest, and, to the Knowledge of Seller, there is no basis
upon which any Tax deficiency or adjustment would reasonably be expected to be
asserted against the Company or Seller in respect of the Interest. No issue
involving any Tax item of the Company has been raised or resolved by any taxing
authority in any audit or examination in a manner which, by application of the
same principles, would reasonably be expected to result in a deficiency for
Taxes of the Company or Seller for any other period. Seller has not reported any
Tax item of the Company on any Tax Return in a manner inconsistent with a
Schedule K-1 (or equivalent state or local form) issued by the Company in
respect of the Interest.

-25-

                (c)     There are no outstanding rulings of, or requests for
rulings by, any taxing authority addressed to the Company that are, or if issued
would be, binding on the Company or any of its partners for any full or partial
Tax period beginning on or after the Closing Date.

                (d)     The Company is not a party to any Tax sharing, Tax
allocation or Tax indemnity agreement or similar arrangement. The Company is not
presently liable, nor does the Company have any potential liability for, the
Taxes of another Person (i) under Treasury Regulations Section 1.1502-6 (or any
comparable provision of state, local or foreign law), (ii) as a transferee or
successor, or (iii) by contract or indemnity or otherwise.

                (e)     The Company is, and at all times has been, treated as a
"partnership" for federal income tax purposes within the meaning of Section
761(a) of the Internal Revenue Code and, as such, is not, and has never been, a
"publicly traded partnership" within the meaning of Section 7704 of the Internal
Revenue Code or otherwise subject to any liability for income Taxes, whether
federal, state, local or foreign. The Company has never made any election to be
excluded from all or any part of Subtitle A, Chapter 1, Subchapter K of the
Internal Revenue Code.

                (f)     The Company is not party to any contract, agreement,
plan or other arrangement covering any person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by the Company by reason of Section 280G of the Internal Revenue
Code.

                (g)     No written claim has been made by any taxing authority
in a jurisdiction where the Company does not currently file Tax Returns that the
Company is or may be subject to Tax by such jurisdiction or that partners of the
Company, by reason of their status as such, are or may be subject to Tax by such
jurisdiction, nor to Seller's Knowledge has any taxing authority threatened to
make such an assertion.

                (h)     None of the assets or properties of the Company (i) is
or will be required to be treated as tax-exempt use property within the meaning
of Section 168(h)(1) of the Internal Revenue Code; or (ii) directly or
indirectly secures any debt the interest on which is tax-exempt under Section
103(a) of the Internal Revenue Code. The Company has not agreed to, nor is the
Company required to, make any adjustments under Section 481(a) of the Internal
Revenue Code by reason of a change in accounting method or otherwise. The
Company does not have any application pending with any taxing authority
requesting permission to change any accounting method, and no taxing authority
has, to Seller's Knowledge, proposed in writing any such adjustment or change in
accounting method.

                (i)     No Person that is treated for federal income Tax
purposes as owning an interest in the Company is a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code.

                (j)     Buyer has been provided true copies of all Tax Returns
filed by or with respect to the Company for the last three years for which such
Tax Returns have been filed, and the Company has made available to Buyer all
relevant documents and information with respect to such Tax Returns, including
without limitation work papers, records, examination reports, and statements of
deficiencies or adjustments proposed, assessed against or agreed to by the
Company.

-26-

                (k)     There has been no direct, indirect or deemed sale or
exchange within the meaning of Section 708(b)(1)(B) of the Code of any capital
or profits interests in the Company within the twelve (12) months immediately
preceding the Closing Date by or in respect of Seller or, to Seller's Knowledge,
by or in respect of any other partner of the Company.

                (l)     At the time of the Closing, Seller's 704(b) capital will
be equal to or less than 50% of the total combined partners' 704(b) capital of
the Company even if, at or prior to the Closing, either or both of the following
events have occurred: (i) all or any portion of the Existing Letters of Credit
have been drawn, or (ii) the Existing Letters of Credit, or any portion thereof,
have been replaced with cash contributed to the Company by Seller or any of its
Affiliates.

        3.22      Environmental Matters.

                (a)     To the Knowledge of Seller, each of the Company and the
Facility is, and at all relevant times in the past, has been in compliance with
all applicable Environmental Laws and Environmental Permits described in Section
3.19. Neither the Company nor the Facility has received any written or, to the
Knowledge of Seller, verbal communications from any Person alleging that the
Company or the Facility is not in such compliance. All Environmental Permits
currently held by the Company and the Facility are identified in Schedule 3.19,
all such Environmental Permits are in full force and effect and are not subject
to a pending appeal, and there are no proceedings pending or to the Knowledge of
Seller anticipated that would reasonably be expected to result in the
suspension, revocation, termination or adverse modification of any such
Environmental Permits.

                (b)     The Company has not (i) to the Knowledge of Seller,
generated, used, treated, stored, disposed of, or caused a Release of any
Hazardous Material on, under, at, from or in any way affecting any Real Property
or the Facility except in compliance with all applicable Environmental Laws and
Environmental Permits, or (ii) received any written notice that the shipment of
any Hazardous Material generated on the Real Property to any other place for
use, storage, treatment or disposal has resulted in an Environmental Claim
against the Company which, in the case of clause (i) or (ii) would reasonably be
expected to give rise to any Environmental Liability.

                (c)     There are no Environmental Claims pending or, to
Seller's Knowledge, threatened against the Company or, to Seller's Knowledge,
against any Person or entity whose liability for any Environmental Claim the
Company has retained or assumed, either contractually or by operation of law,
which would reasonably be expected to have a Material Adverse Effect.

                (d)     Neither the Company nor, to Seller's Knowledge, any
other Person has caused any Release of Hazardous Material on, from or beneath
the Facility or Real Property.

                (e)     Without in any way limiting the generality of the
foregoing, to Seller's Knowledge, no properties owned, operated or leased by the
Company contain any: underground storage tanks, asbestos, polychlorinated
biphenyls ("PCBs"), underground injection wells, radioactive material, or sites
in which any Hazardous Material has been disposed of or Released.

-27-

                (f)     The Company and the Facility are not subject to any
outstanding consent decree, compliance order, or administrative order pursuant
to Environmental Laws, and there are no Liens imposed or, to Seller's Knowledge,
in the process of being imposed on the Facility or the Real Property pursuant to
any Environmental Law and no notices or deed restrictions relating to the
presence of Hazardous Material at any Real Property have been filed pursuant to
any Environmental Law.

                (g)     To Seller's Knowledge, there are no Hazardous Materials
present on, at, under, migrating from, or Released from, the Facility or any
Real Property or that have been Released at any other location that would
subject the Company to any material Environmental Liability, including but not
limited to any order or agreement requiring the Clean-Up or Remedial Action of
any condition resulting from the Release or threatened Release of Hazardous
Materials.

                (h)     The Company is not a party to any contract, lease or
other agreement with any Person pursuant to which the Company has any continuing
obligation with respect to the Clean-Up or Remedial Action of any known or
suspected condition resulting from the treatment, storage, use, or Release of
Hazardous Materials.

                (i)     The Company holds all rights to emission allowances or
emission reduction credits that have been allocated or otherwise acquired for
2004 and future years under Environmental Laws. The Company has not entered into
any agreement either to purchase or sell such allowances or credits except for
agreements reasonably necessary for the operation of the Facility.

        3.23      Intellectual Property Rights.

                (a)     Except for (i) the intellectual property rights
identified in Schedule 3.23(a), (ii) commercially available books or computer
software with a value not in excess of $3,000 individually, or (iii)
intellectual property rights granted or obtained under any Material Contract
(such Intellectual Property Rights described in the foregoing clauses (i)
through (iii), the "Company Intellectual Property Rights"), the Company does not
own, hold, utilize, or license for its use any material patent, patent
application, trademark, service mark, trade name, trade secret, copyright, or
other material intellectual property (collectively, such types of intellectual
property are referred to as the "Intellectual Property Rights"). The Company
owns or has a valid and enforceable right to use pursuant to written license or
other agreement all of the Company Intellectual Property Rights. The Company has
not received any notice from any person or entity asserting that the Company in
the conduct of its business and use of its Intellectual Property Rights has
infringed or is infringing on any such rights of a third party and, to the
Knowledge of Seller, the Company has not directly infringed or misappropriated
any intellectual property rights of others. To Seller's Knowledge, no Person is
infringing, or has infringed on, any Intellectual Property Rights of the
Company.

-28-

                (b)     The Intellectual Property Rights listed on Schedule
3.23(a) represent all of the material Intellectual Property Rights other than
Intellectual Property Rights described in clauses (ii) and (iii) of subsection
(a) of this Section 3.23 used in the operation of the Facility.

        3.24     Bank Accounts; Powers of Attorney. Schedule 3.24 contains a
list of all bank accounts maintained by the Company and identifies each
individual having signature authority with respect to each such account. The
Company has not granted any outstanding power of attorney to any person with
respect to any matter.

        3.25     Brokers’ Fees. None of Seller, the Company or any Affiliate of
Seller or the Company has engaged with respect to the transactions contemplated
by this Agreement a broker, finder or other Person serving a similar function,
which engagement will or may result in any liability or obligation of Buyer or
any of its Affiliates or to which any of their assets (including, if the
transactions contemplated by this Agreement are consummated, the Interest or the
Assets of the Company) would be subject.

        3.26      Regulatory Status.

                (a)     Neither the Company nor Seller is subject to regulation
as a "public utility company" or a "holding company," or a "subsidiary company"
or "affiliate" of a "holding company" under the Public Utility Holding Company
Act of 1935, as amended.

                (b)     Neither the Company nor Seller is subject to regulation
as an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

                (c)     Each of ROVA I and ROVA II has been certified by FERC as
an "exempt wholesale generator" within the meaning of Section 32 of PUHCA and
FERC's implementing regulations and is currently operated in compliance with
PUHCA Section 32 and FERC's implementing regulations regarding "exempt wholesale
generator" status. The covenant contained in clause (x) of Section 7.1(h) of the
Partnership Agreement has been waived by each of Seller and Buyer to permit ROVA
II to surrender its status as a Qualifying Facility (as such term is defined in
the Partnership Agreement).

        3.27     Solvency. Both before and after giving effect to the
transactions contemplated by this Agreement, Seller (a) has capital (or access
to immediately available capital), sufficient to carry on its business and is
able to pay its debts as they mature, (b) owns assets having a value, both at
fair valuation and at present fair saleable value, greater than the amount
required to pay its probable liabilities (including contingencies), (c) does not
believe that it will incur debts or liabilities beyond its ability to pay such
debts or liabilities as they mature and (d) in consummating the transactions
contemplated by this Agreement does not intend to hinder, delay, or defraud
either its present or future creditors.

        3.28     Disclosure. No representation or warranty made to Buyer by
Seller herein or in any document delivered hereunder, when taken as a whole and
taking into account all of the information set forth in the Disclosure Schedules
attached hereto, contains any untrue statement of material fact or, to Seller’s
Knowledge, omits to state a material fact which is necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading.

-29-

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BUYER

                Buyer hereby represents and warrants to Seller on and as of the
Effective Date and the Closing Date (provided that all representations and
warranties which are made as of a specific date are made only as of such date)
that, except as set forth in the section of the Disclosure Schedules
corresponding to the Section of this Article 4 containing such representation or
warranty or as otherwise provided in Section 9.11:

        4.1     Organization and Qualification. [**] is a [**] duly organized,
validly existing and in good standing under the laws of [**], and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as currently conducted.

        4.2     Enforceability. (a) The execution, delivery and performance by
Buyer of this Agreement and the Ancillary Agreements required thereby from it is
within its power; and (b) the execution and delivery by Buyer of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized, and no other internal proceedings on its part are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby,
(c) this Agreement has been, and the Ancillary Agreements required hereby to
which Buyer is a party will be, duly and validly executed and delivered by it,
and (d) its obligations under this Agreement are, and its obligations under the
Ancillary Agreements required hereby from it will be, when executed and
delivered by the parties hereto and thereto, its valid and binding obligations,
enforceable against it in accordance with their respective terms subject to (i)
applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium or other similar laws relating to creditors’ rights
or creditors’ remedies generally; and (ii) general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

        4.3     Buyer's Consents and Approvals; No Violation or Conflict by
Buyer.

                (a)     Except for the FERC Transaction Approvals and the
Required Consents, no notice to, filing or registration with, and no permit,
authorization, consent or approval of, any Governmental Authority is necessary
or is required to be made or obtained by Buyer in connection with the execution
and delivery of this Agreement by Buyer or for the consummation by Buyer of the
transactions contemplated hereby.

                (b)     The execution and delivery of the this Agreement, the
Buyer Guaranty and the Ancillary Agreements by Buyer, WEL Partner and Buyer
Guarantor (as applicable), the performance of this Agreement, the Buyer Guaranty
and the Ancillary Agreements by Buyer and Buyer Guarantor (as applicable) and
the consummation of the transactions contemplated hereby do not (i) conflict
with or result in any breach of any provision of the Governing Instruments of
Buyer or Buyer Guarantor, (ii) conflict with or violate any Law applicable to
Buyer or Buyer Guarantor or any of their respective properties or assets, or
(iii) subject to obtaining all Buyer Required Consents, conflict with or result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation, modification or acceleration) under, any of the terms, conditions
or provisions of any contract, agreement, lease, license, mortgage, indenture,
instrument or other arrangement to which Buyer or Buyer Guarantor is a party or
by which Buyer or Buyer Guarantor or any of their respective properties or
assets may be bound, or (iv) subject to obtaining all Buyer Required Consents,
result in the creation of any material lien, charge or encumbrance of any kind
whatsoever upon the Interest.

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        4.4     No Litigation. There is no Claim pending or, to the Knowledge of
Buyer, any Claim threatened (a) against Buyer or any of its Affiliates relating
to the business, assets or properties of Buyer or any of its Affiliates except
for any claim that would not reasonably be expected to result in a Buyer
Material Adverse Effect, or (b) that seeks restraint, prohibition, damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.

        4.5     Brokers’ Fees. Neither Buyer nor any Affiliate of Buyer has
engaged with respect to the transactions contemplated by this Agreement a
broker, finder or other Person serving a similar function, which engagement will
or may result in any liability or obligation of Seller or any of its Affiliates
or to which any of its assets would be subject.

        4.6     Investment Intention. Buyer is acquiring the Interest for its
own account for investment purposes only and not with a view to the distribution
(as such term is defined in Section 2(a)(11) of the Securities Act of 1933, as
amended (the “Securities Act”)) thereof, it being understood that the right to
dispose of the Interest shall be entirely within the discretion of Buyer;
provided, however, Buyer understands that the Interest has not been registered
under the Securities Act or any applicable state securities laws and cannot be
sold unless subsequently registered under the Securities Act and any applicable
state securities laws or an exemption from such registration is available.

        4.7      Accredited Investor. Buyer is an "accredited investor" as such
term is defined in Rule 501(a) under the Securities Act.

        4.8     Financial Resources. Buyer or its Affiliates have financial
resources sufficient to satisfy Buyer’s obligations under this Agreement without
resort to any third-party financing other than committed third-party financing
that is not subject to any condition or contingency other than the acquisition
of the Interest by Buyer.

        4.9     Lender Consent. Buyer has no reason to believe that, based on
its and its Affiliates’ financial resources, the Lenders would refuse to consent
to the transactions contemplated by this Agreement as required by the Credit
Agreement.

ARTICLE 5.
COVENANTS OF SELLER AND BUYER

        5.1     FERC Transaction Authorization. As promptly as possible after
the Effective Date, but no later than September 17, 2004, Seller shall, or shall
cause the Company to, file with the FERC an application seeking the
authorization of the FERC in connection with Buyer’s acquisition of Seller’s
jurisdictional facilities (as defined in the Federal Power Act) (the “FERC
Transaction Approvals”) subject to the terms and conditions of the Agreement.
Seller may file or cause to be filed an application for the FERC Transaction
Approvals prior to the Effective Date. From and after the Effective Date, Buyer
shall cooperate with Seller in connection with filing the application for the
FERC Transaction Approvals and shall use commercially reasonable efforts to
provide to Seller, at a time and in a manner that will permit the Seller to file
the application for the FERC Transaction Approvals within the time period
provided above, all information concerning Buyer necessary for the filing of the
application for the FERC Transaction Approvals. Without limiting the generality
of the foregoing, Buyer shall provide Seller or the Company with any market
power survey, analysis, testimony, report or similar market power related
documentation or information required for the FERC Transaction Approvals at
Buyer’s sole cost and expense. Following the initial filing, Buyer and Seller
shall use their commercially reasonable efforts (which shall not include the
payment of money other than fees and expenses of professional advisors and
filing fees) to secure FERC orders containing such approval as promptly as
possible. Buyer and Seller shall undertake all commercially reasonable efforts
(which shall not include the payment of money other than fees and expenses of
professional advisors and filing fees) to cooperate with and assist the other by
filing with the FERC (or, in the case of Seller, by causing the Company to file
with the FERC), if requested by the other, within any time period established by
FERC order, regulation or notice, an intervention or other pleading urging
approval of the applications for the FERC Transaction Approvals. Seller shall
cause the Company, prior to the Closing Date, to file a notice with the FERC of
a change in structure, if any, and direct and indirect ownership of the Company
as necessary to maintain the Company’s market-based rate authorization;
provided, Seller shall have no obligation to pursue any order or determination
of the FERC or participate in any proceeding of the FERC, in each case relating
to or initiated in response to such notice.

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        5.2     Conduct of Business Pending the Closing. Seller agrees that,
from the Effective Date until the Closing Date or the earlier termination of
this Agreement pursuant to Article 8, unless otherwise agreed to by Buyer in
writing or expressly contemplated by this Agreement:

                (a)     Seller shall cause the Company, to the extent that it is
entitled to do so, to conduct its operations in the ordinary and usual course of
business and consistent with past practice, and Seller shall cause the Company,
to the extent that it is entitled to do so, to exercise its commercially
reasonable efforts to (i) maintain the Material Contracts in accordance with
their terms, (ii) maintain the Permits, including Environmental Permits, in full
force and effect, and obtain any renewals of such Permits required prior to the
Closing Date, (iii) preserve intact its business organization and (iv) cause the
Facility to be operated and maintained and repaired, as the case may be, in all
material respects in accordance with the ordinary course of business consistent
with past practices and in accordance with prudent utility practices, applicable
Laws and Permits and the applicable requirements of the ROVA I PPA and the ROVA
II PPA. Without limiting the generality of the foregoing, Seller shall exercise
its rights to prevent the Company from (unless, in each case, Buyer provides
prior written consent):

                         (i)        amending its Governing Instruments, except
as required by this Agreement;

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                         (ii)        authorizing for issuance or issuing,
selling or delivering (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
Equity Interests in the Company;

                         (iii)       participating in any merger, consolidation
or other business combination, or sale of all or substantially all the assets of
the Company;

                         (iv)       (A)   incurring, assuming or otherwise
becoming liable or responsible for any Indebtedness not currently outstanding
(except in the ordinary course of business and consistent with past practice);
(B) making any loans, advances or capital contributions to, or investments in,
any other Person; (C) entering into any power purchase agreement, tolling
agreement or other Contract obligating the Company to sell any electricity
generated by the Facility; (D) entering into any Contract other than in the
ordinary course of business consistent with past practice, in accordance with
the Company Budget, or in connection with the transactions contemplated by this
Agreement; (E) entering into any Contract with Seller or any Affiliate of Seller
which is not terminated or terminable at will by the Company as of the Closing
without any payment, penalty or other liability in connection therewith
(provided, that Seller shall provide Buyer with written notice thereof); or (F)
authorizing any single capital expenditure which is in excess of $100,000 other
than capital expenditures required by any Material Contract or made in
accordance with the Company Budget;

                         (v)        adopting or amending (except as may be
required by Law) any bonus, profit sharing, compensation, severance,
termination, pension, retirement, deferred compensation, employment, severance
or other employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any present or former director, officer or
employee or the dependent or beneficiary of any present or former director,
officer or employee, or (except for normal increases in the ordinary course of
business that are consistent with past practices and that, in the aggregate, do
not result in a material increase in benefits or compensation expense)
increasing in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any existing plan and
arrangement (including the granting of stock options, stock appreciation rights,
shares of restricted stock or performance units) or entering into any contract,
agreement, commitment or arrangement to do any of the foregoing;

                         (vi)       modifying, amending, supplementing,
canceling, terminating or renewing any Material Contract as in effect on the
Effective Date, except for the renewal of a Material Contract that would
otherwise expire and be required to be replaced with another Material Contract
provided such renewal is in the ordinary course of business and on terms that
are not materially more onerous to the Company than in such Material Contract
prior to renewal except for price adjustments provided for in such Material
Contract;

                         (vii)      except as contemplated by the Company
Budget, acquiring, selling, leasing or disposing of any Assets other than in the
ordinary course of business consistent with past practice;

                         (viii)     making any Tax election (other than
elections that are made consistently with past practice) or settling or
compromising any Tax liability that would reasonably be expected to create or
otherwise cause any liability of the Company that will exist or become due on or
after the Closing;

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                         (ix)        incurring any trade accounts payable or
other expenses other than in the ordinary course of business consistent with
past practice or pursuant to the Company Budget;

                         (x)         except with respect to Indebtedness as
permitted pursuant to Section 5.2(a)(iv)(A) and Permitted Encumbrances, pledging
or hypothecating any of the Assets to secure Indebtedness;

                         (xi)        making any distribution or dividend other
than cash distributions by the Company in the ordinary course of business
consistent with past practice;

                         (xii)       waiving or releasing any right of material
value;

                         (xiii)      changing financial or accounting methods or
accounting practices prior to Closing unless required by GAAP or applicable Law;

                         (xiv)     changing the business it conducts in any
material respect;

                         (xv)      taking any action other than in the ordinary
course of business;

                         (xvi)     settling or compromising any actual, pending
or threatened Claim, action or proceeding involving, or otherwise resulting in
an economic cost of, more than $100,000 individually or $250,000 in the
aggregate with any Governmental Authority or other Person other than the
resolution of the pending business personal property tax dispute between the
Company and the County of Halifax, State of North Carolina; provided that the
resolution of such business personal property tax dispute does not contain an
agreement by the Company to (x) an assessment of the Company's property for any
period after December 31, 2003 of more than $147 million, or (y) any rate
increase, surcharge or special assessment that applies only to the property of
the Company; or

                         (xvii)    agreeing (in writing or otherwise) to take
any of the foregoing actions.

                 (b)     Seller shall give notice to Buyer, as soon as
practicable but in no event more than five (5) days from the date notice is
received by Seller or, to Seller's Knowledge, the Company, of (i) any notice of
violation or threatened action by any Governmental Authority against the
Company, or (ii) any default notice or actual, pending or threatened Claim
against the Company by any other Person.

                 (c)     Seller will not sell, transfer, pledge, hypothecate,
divide, assign or otherwise alienate any portion of the Interest.

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                 (d)     Seller shall cause the Company, to the extent that it
is entitled to do so, to: (i) keep full and complete Books and Records,
consistent with past practice; (ii) maintain in full force and effect the
insurance policies heretofore maintained for the benefit of the Company (or
policies providing substantially the same coverage); (iii) take such action as
may be reasonably necessary to preserve its Assets in good working condition,
ordinary wear and tear excepted (and subject to repairs contemplated by the
Company Budget); (iv) promptly advise Buyer in writing of any material reduction
or, to the Knowledge of Seller, threatened change in the business prospects,
properties or condition, financial or otherwise, of the Company that has
occurred or that Seller reasonably believes will occur; (v) promptly advise
Buyer in writing of any change in methods of accounting or accounting practices
implemented by the Company as required by GAAP or applicable Law; and (vi)
conduct the business of the Company in compliance in all material respects with
all applicable Laws.

                 (e)     Seller shall provide notice to Buyer as soon as is
reasonably practicable of the payment, discharge or satisfaction by the Company
of any material Claims or Losses (whether absolute, accrued or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction of
liabilities (i) reflected or reserved against in the Current Balance Sheet, (ii)
incurred in the ordinary course of business since the Financial Statement Date,
(iii) incurred in accordance with the Company Budget, or (iv) arising in the
ordinary course of business under any existing Contract.

                 (f)     Seller shall provide notice to Buyer of the occurrence
of any Casualty Loss as soon as is reasonably practicable after Seller obtains
Knowledge of such Casualty Loss; provided, however, such notice shall be given
in any event within five (5) days after Seller obtains such Knowledge.

                 (g)     Notwithstanding anything to the contrary in paragraphs
(a) or (d) of this Section 5.2, Seller shall have no obligation to take any
action, or refrain from taking any action, if Seller, acting in good faith, has
determined that the taking or refraining from the taking of such action will
result in a breach by Seller of any fiduciary duty or contractual duty under the
Partnership Agreement or any breach by the Company of any contractual duty;
provided, however, this provision shall not apply to clauses (i) through (iii)
of paragraph (a) of this Section 5.2. Nothing in this Section 5.2(g), or the
action or inaction of Seller pursuant to this Section 5.2(g), shall amend,
supplement, modify or otherwise qualify any of the representations or warranties
set forth in Article 3 or otherwise impair Buyer's rights under Section 6.1(b).
Seller shall give Buyer prompt written notice of any action taken or not taken
in reliance on this Section 5.2(g).

        5.3     Access to Information. Between the Effective Date and Closing or
earlier termination of the Agreement pursuant to Article 8, Buyer and its
authorized representatives will be given access on reasonable notice during
normal business hours to: (i) Company and Seller accountants; (ii) the Books and
Records of the Company (including the right to make copies thereof), regardless
of the form or medium in which such Books and Records are maintained, provided
that the Parties contemplate that such Books and Records will be made available
in a manner intended to preserve the confidentiality of the transactions
contemplated hereby prior to Closing; (iii) inspect, during normal business
hours, all of the Assets; (iv) review all plans, specifications, designs, and
other information related to the Facility; and (v) conduct such other reviews
and inspections as Buyer may reasonably request, subject to Seller’s and the
Company’s reasonable requirements; provided, however, that any such access shall
be conducted in a mutually satisfactory manner that (A) is intended to preserve
the confidentiality of the transactions contemplated hereby prior to Closing,
(B) is consistent with this Agreement, and (C) does not interfere with the
operation of the Facility. In addition, Seller shall cause LPS to give Buyer and
its authorized representatives reasonable access, upon reasonable notice and
during normal business hours, to personnel who operate the Facility. Nothing in
this Section 5.2 shall entitle Buyer or its representatives to conduct any
environmental investigation or testing at the Facility, except for any such
environmental investigation as is capable of being conducted solely by an
inspection of the Facility.

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        5.4     Public Announcements. Each of Buyer and Seller shall, to the
extent practicable, consult with and obtain the approval (which approval will
not be unreasonably withheld) of the other Party before issuing any press
release or making any other public statement with respect to this Agreement or
any of the transactions contemplated hereby, except as may be required by Law or
by obligations pursuant to any listing agreement with any national securities
exchange or inter-dealer quotation system or as required in connection with the
FERC Transaction Approvals (and, in the reasonable judgment of the Party making
such announcement or public statement, based upon advice of counsel, prior
consultation with and approval of the other Party, despite reasonable efforts to
obtain same, would prevent dissemination of such announcement or public
statement in a timely enough fashion to comply with such applicable Law, listing
agreement provision or exchange policy or requirement in connection with the
FERC Transaction Approvals), and, in such event, each Party agrees to give
prompt notice to the other Party prior to any such written release or statement
and, to the extent possible, seek confidential treatment of such information or
filing.

        5.5     Intentionally Omitted.

        5.6     Commercially Reasonable Efforts.

                 (a)     From the Effective Date until the earlier of the
Closing Date or the date on which this Agreement is terminated pursuant to
Article 8, each of the Parties shall use its commercially reasonable efforts to
obtain in an expeditious manner the satisfaction of all conditions precedent to
the obligations of the other Party to consummate the purchase and sale of the
Interest. Nothing in this paragraph shall obligate any Party to pay money to any
Person or to contribute money or other capital to the Company (other than for
fees and expenses of its professional advisors and filing fees).

                 (b)     If the Company receives any notice from any
Governmental Authority after the Representation Date and prior to the earlier of
the Closing Date and the date on which this Agreement is terminated pursuant to
Article 8, that changes the requirements or conditions of any Permit, Seller
shall promptly deliver a copy of such notice to Buyer.

                 (c)     Seller shall use commercially reasonable efforts (which
shall not include the payment of money, other than fees and expenses of its
professional advisors and filing fees and that which is currently due and
payable to the party providing such consent) to obtain, or to cause the Company,
or cooperate with Buyer, to obtain, all Required Consents prior to the Closing.
After the Effective Date, Buyer shall use commercially reasonable efforts (which
shall not include the payment of money other than fees and expenses of its
professional advisors and filing fees), to obtain, or cooperate with Seller or
the Company to obtain, all Required Consents prior to the Closing.

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                 (d)     The Parties shall cooperate and use commercially
reasonable efforts (which shall not include agreeing to any modifications of the
terms of the underlying obligations and shall not require the payment of any
money other than fees and expenses of its professional advisors and filing fees)
in order that, effective on or prior to the Closing Date, the Existing Letters
of Credit shall be returned to Seller or cancelled and terminated and all
Liabilities, if any, of Seller or its Affiliates related thereto shall be fully,
completely and unconditionally released. Without limiting what would otherwise
constitute commercially reasonable efforts (which shall not include agreeing to
any modifications of the terms of the underlying obligations and shall not
require the payment of any money other than fees and expenses of its
professional advisors and filing fees), Buyer shall deliver Substitute Letters
of Credit or deposit cash as described in Section 5.8.

        5.7     Consents.

                 (a)     From the Effective Date to the earlier of the Closing
Date or the date on which this Agreement is terminated pursuant to Article 8,
each Party will use its commercially reasonable efforts (which shall not require
the payment of any money other than fees and expenses of its professional
advisors and filing fees) to obtain the consents, approvals, authorizations,
waivers, permits, certificates and orders of Governmental Authorities and any
other third parties that may be or become necessary or advisable for the
performance of its obligations under this Agreement and the consummation of the
transactions contemplated hereby and will cooperate in all reasonable respects
with the other Party in promptly seeking to obtain such consents, approvals,
authorizations, waivers, permits, certificates and orders as may be necessary or
advisable for the performance of their respective obligations pursuant to this
Agreement. None of the Parties will take any action for the purpose of delaying,
impairing or impeding the receipt of any required approvals, and each Party will
use its commercially reasonable efforts (which shall not require the payment of
any money other than fees and expenses of its professional advisors and filing
fees) to secure such approvals as promptly as possible.

                 (b)     To the extent that Permits are required to be
transferred to Buyer, each of the Parties will use its commercially reasonable
efforts (which shall not require the payment of any money other than fees and
expenses of its professional advisors and filing fees) to facilitate such
transfers of Permits by the Closing, without any material change in the terms
thereof.

        5.8     Substitute Letters of Credit; Cash Deposit. At the Closing,
Buyer shall, at its option, either (a) deliver to the Agent Substitute Letters
of Credit, or (b) deposit with the Agent cash, in each case, in an amount equal
to the undrawn amount of the Existing Letters of Credit (but not more than
$9,850,000) so that, subject to the terms and provisions of the Credit Agreement
and the consent and cooperation of the Agent, upon delivery of such Substitute
Letters of Credit to, or deposit of cash with, the Agent, the Existing Letters
of Credit shall be released and returned to Seller at the Closing.

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        5.9     Further Assistance. After the Closing Date, each Party shall
take, without additional consideration, such further reasonable action
(including the execution and delivery of such further instruments and documents
and the grant of access to any individuals, premises, books or records) as any
other Party reasonably may request as may be necessary or desirable to carry out
the purposes of this Agreement.

        5.10     Use of LG&E Name. Buyer acknowledges that the Company has no
claim or rights in or to the name “LG&E”. Buyer agrees that as soon as
practicable after the Closing, but in any event within thirty (30) days
following the Closing, it will, to the extent it is entitled to do so, cause the
Company to file, register or submit such documents as are necessary to change
its name to remove the name “LG&E” and any variation thereof and to amend each
certificate, partnership agreement or other Governing Instrument of the Company
to reflect such name change. Buyer further agrees that within thirty (30) days
following the Closing it shall use its commercially reasonable efforts to remove
the name “LG&E” from all signs, stationery, Assets and other items owned or used
by the Company and shall thereafter, to the extent that it is entitled to do so,
cause the Company not to use the name “LG&E” or any variation thereof for any
purpose or reason whatsoever. Nothing in this paragraph shall obligate Buyer to
pay money to any Person or to contribute money or other capital to the Company
(other than for fees and expenses of its professional advisors and filing fees).

        5.11     Guaranties. Simultaneously with the execution of this
Agreement, (a) Buyer shall cause Buyer Guarantor to execute the Buyer Guaranty
and deliver it to Seller, and (b) Seller shall cause Seller Guarantor to execute
the Seller Guaranty and deliver it to Buyer.

        5.12     Interim Financial Statements. Seller agrees to deliver to Buyer
prior to the Closing Date interim financial statements of the Company with
respect to periods after the Financial Statement Date for which the Company
would prepare financial statements in accordance with past practice. Each set of
such interim financial statements shall be delivered by Seller to Buyer within a
reasonable period of time after Seller receives the final version of such
interim financial statements. Seller agrees to deliver to Buyer prior to the
Closing Date copies of all federal income tax returns and property tax filings
promptly after Seller receives copies of such returns and filings from the
Company.

        5.13     Replacement Insurance. Buyer agrees to obtain or cause to be
obtained as of the Closing replacement insurance arrangements (“Replacement
Insurance”) for the Company providing replacement coverage equivalent to the
existing coverage maintained by or on behalf of the Company as of the Effective
Date or, if such replacement coverage cannot be obtained on a commercially
reasonable basis, replacement coverage that is as close to equivalent to the
existing coverage as can be obtained on a commercially reasonable basis.

        5.14     Pre-Closing Claims. Seller agrees that in the event Seller is
entitled to indemnification, payment, reimbursement or contribution under
Section 4.8 or 4.14 of the Partnership Agreement, in each case relating to any
circumstance, condition or event in existence or occurring prior to the Closing,
Seller will seek such indemnification, payment, reimbursement or contribution
with respect to such circumstances conditions or events only from or against
partners of the Partnership prior to the Closing and their successors, and if
Seller receives any indemnification, payment reimbursement or contribution from
the Company with respect to such circumstances, conditions or events, Seller
will pay to Buyer 50.0% of the amount collected by Seller from the Company with
respect to such circumstances, conditions or events. Nothing in this Section
5.14 shall apply to any rights of Seller under Section 4.8 or 4.14 of the
Partnership Agreement with respect to any circumstance, condition or event not
in existence or occurring prior to the Closing.

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        5.15     Preservation of Company Status. Each of Buyer and Seller agrees
that if the transactions contemplated by the Agreement would result in a
termination of the Company for federal income tax purposes, it will take all
actions reasonably within its control to cause the transactions contemplated by
the Agreement to nonetheless be effective and to waive (and to cause the Company
to waive) any Claims or Losses in connection with such termination. Without
limiting the generality of the foregoing, each of Buyer and Seller agrees to
vote its interest in the Company (and cause its representative on the Company’s
Management Committee to vote) to take such actions and to agree to amend the
Partnership Agreement as necessary and appropriate to permit the transactions to
occur and to effect such waiver.

        5.16     LPS Staff Transfers. From the Effective Date through the date
that the Pending Arbitration is completed or all of the underlying claims in the
Pending Arbitration are otherwise settled or resolved, Buyer shall cause LPS not
to transfer Don Keisling, Fred Silva, Doug Henshaw or Chris Hews from the
Facility to any other facility operated or maintained by LPS without the prior
written consent of Buyer.

        5.17     Exclusive Rights for LPS. If the Interest is sold to Buyer
pursuant to this Agreement, (i) Seller shall give Buyer notice prior to the sale
of LPS or the O&M Agreement, upon which notice Buyer shall have 30 days to
conduct due diligence on LPS and the O&M Agreement and (ii) Buyer shall have the
exclusive right to negotiate the purchase of LPS or some or all of its assets
for a period of 30 days after the 30 day due diligence period. If Buyer elects
not to exercise this right or if Buyer and LPS (and/or the owner of LPS) do not
agree on terms and conditions for a sale during the 30 day period, the
provisions of this Section 5.17 shall expire with no further obligations to
Buyer and the sale of the O&M Agreement or LPS or its assets may be negotiated
and closed at any time thereafter with any other Person. Notwithstanding
anything to the contrary in this Section 5.17, the provisions of this Section
5.17 shall not amend or modify the provisions of the O&M Agreement.

ARTICLE 6.
CONDITIONS PRECEDENT TO CLOSING

        6.1      Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the purchase and sale of the Interest as contemplated hereby
is subject to the satisfaction or waiver at or prior to the Closing of the
following conditions precedent:

                 (a)     Seller shall have performed and complied in all
material respects with all obligations and covenants that are to be performed or
complied with or necessary to be performed or complied with by Seller on or
before the Closing Date;

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                 (b)     the representations and warranties of Seller set forth
in Article 3 and of Seller Guarantor set forth in the Seller Guaranty that are
qualified with respect to materiality (whether by reference to Material Adverse
Effect or otherwise) shall be true and correct, and the representations and
warranties of Seller set forth in Article 3 and of Seller Guarantor set forth in
the Seller Guaranty that are not so qualified, taken as a whole, shall be true
and correct in all material respects, in each case, on and as of the Closing
Date; provided, however, that such representations and warranties which are made
as of a specific date need only be true as of such specific date as so
qualified; provided, further, that no Seller Supplemental Disclosure or similar
supplement or disclosure shall amend, modify, qualify or otherwise have any
effect on this Section 6.1(b) and for the purposes of determining whether
Buyer's conditions set forth in this Section 6.1(b) have been fulfilled, any and
all of the Disclosure Schedules shall be deemed to include only information
contained therein on the Representation Date and shall be deemed to exclude any
information or matter contained in any Seller Supplemental Disclosure or similar
supplement or disclosure;

                 (c)     since the Representation Date, no Material Adverse
Effect shall have occurred and be continuing, other than to the extent arising
from an adverse change affecting the North American electric utilities industry
in general and not specifically relating to the Company;

                 (d)     Buyer shall receive at the Closing a certificate
executed by Seller, in form reasonably satisfactory to Buyer, certifying that,
to the knowledge of the officer executing such certification, the matters
referred to in paragraphs (a), (b) and (c) of this Section 6.1 have been
satisfied;

                 (e)     all Required Consents including the FERC Transaction
Approvals shall have been obtained;

                 (f)     no investigation, suit, action or other proceeding
shall be threatened or pending before any Governmental Authority that seeks
constraint, prohibition, damages or other relief in connection with the purchase
and sale of the Interest or the consummation of the other transactions
contemplated hereby or that would reasonably be expected to have a Material
Adverse Effect;

                 (g)     the Agent shall have acknowledged in form and substance
reasonably acceptable to Buyer that the Replacement Insurance satisfies the
insurance requirements of the Credit Agreement;

                 (h)     Seller shall have delivered to Buyer a legal opinion
from counsel to Seller, Seller Guarantor and LPS reasonably satisfactory to
Buyer in form and substance reasonably satisfactory to Buyer;

                 (i)     the Index Rate shall not be less than 3.11% unless
Seller shall have agreed in writing that the Purchase Price adjustment
contemplated by Section 2.2(c) shall be calculated on the assumption that the
Index Rate is 3.11%;

                 (j)     neither Party shall have exercised any termination
rights which it is entitled to exercise pursuant to Sections 2.5(b) or 8.1;

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                 (k)     Seller shall have tendered to Buyer all of the
documents, instruments and other items related to the Company which Seller is
required to deliver at Closing pursuant to Section 2.4(a), subject only to the
delivery by Buyer of the Purchase Price and the documents, instruments and other
items which Buyer is obligated to deliver at Closing pursuant to Section 2.4(b);

                 (l)     there shall be no material default by the Company
existing under the Credit Agreement, the ROVA I PPA or the ROVA II PPA, and no
event shall have occurred that constitutes, or, with the passage of time or
compliance with any applicable notice requirements, would constitute, a material
default by the Company under the Credit Agreement, the ROVA I PPA or the ROVA II
PPA; and

                 (m)     Seller shall have entered into a Transition Services
Agreement with Buyer in the form of Exhibit 6.1(m).

        6.2     Conditions Precedent to Obligations of Seller. The obligation of
Seller to consummate the purchase and sale of the Interest as contemplated by
the Agreement is subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions precedent:

                 (a)     Buyer shall have performed and complied in all material
respects with all obligations and covenants that are to be performed or complied
with or necessary to be performed or complied with by it on or before the
Closing Date;

                 (b)     the representations and warranties of Buyer set forth
in Article 4 and of Buyer Guarantor set forth in the Buyer Guaranty that are
qualified with respect to materiality (whether by reference to Material Adverse
Effect or otherwise) shall be true and correct, and the representations and
warranties of Buyer set forth in Article 4 and of Buyer Guarantor set forth in
the Buyer Guaranty that are not so qualified, taken as a whole, shall be true
and correct in all material respects, in each case, on and as of the Closing
Date; provided, however, that such representations and warranties which are made
as of a specific date need only be true as of such date as so qualified;
provided, further, that no Buyer Supplemental Disclosure or similar supplement
or disclosure shall amend, modify, qualify or otherwise have any effect on this
Section 6.2(b) and for the purposes of determining whether Seller's conditions
set forth in this Section 6.2(b) have been fulfilled, no information or matter
contained in any Buyer Supplemental Disclosure or similar supplement or
disclosure shall be taken into account;

                 (c)     Seller shall have received a certificate of an officer
of the Buyer, in form reasonably satisfactory to Seller, certifying that, to the
knowledge of the officer making such certification, the matters referred to in
paragraphs (a) and (b) of this Section 6.2 have been satisfied;

                 (d)     since the Effective Date, no Buyer Material Adverse
Effect shall have occurred and be continuing;

                 (e)     all Required Consents and the FERC Transaction
Approvals shall have been obtained;

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                 (f)     Seller and all of its Affiliates shall have been fully,
completely and unconditionally released from all of their respective Liabilities
(if any) in respect of the Existing Letters of Credit, no amounts shall have
been drawn under the Existing Letters of Credit, and the Existing Letters of
Credit shall have been returned to Seller at the Closing;

                 (g)     no investigation, suit, action or other proceeding
shall be threatened or pending before any Governmental Authority that seeks
constraint, prohibition, damages or other relief in connection with the purchase
and sale of the Interest or the consummation of the other transactions
contemplated hereby and that would reasonably be expected to have a Buyer
Material Adverse Effect;

                 (h)     Buyer shall have delivered to Seller a legal opinion
from counsel to Buyer and Buyer Guarantor reasonably satisfactory to Seller in
form and substance reasonably satisfactory to Seller;

                 (i)     the Index Rate shall not be greater than 5.11% unless
Buyer shall have agreed in writing that the Purchase Price adjustment
contemplated by Section 2.2(d) shall be calculated on the assumption that the
Index Rate is 5.11%;

                 (j)     neither Party shall have exercised any termination
rights which it is entitled to exercise pursuant to Sections 2.5(b) or 8.1; and

                 (k)     Buyer shall have tendered to Seller the Purchase Price
and all of the documents, instruments and other items which Buyer is required to
deliver at Closing pursuant to Section 2.4(b), subject only to the delivery by
Seller of the documents, instruments and other items which Seller is obligated
to deliver at Closing pursuant to Section 2.4(a).

ARTICLE 7.
INDEMNITIES AND ADDITIONAL COVENANTS

        7.1     Survival. All representations, warranties, covenants, and
obligations in this Agreement, the Schedules, Exhibits, and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing until the termination of the applicable indemnification provisions
contained in Sections 7.2 and 7.3 hereof with respect to such representation,
warranty, covenant or obligation.

        7.2     Seller’s Indemnity.

                 (a)     General. Seller hereby agrees to indemnify and hold
harmless Buyer, its Affiliates and their respective officers, directors and
shareholders and their successors and permitted assigns ("Buyer Indemnified
Parties") from and against, any and all Losses or Claims that any Buyer
Indemnified Party may suffer or incur, or become subject to, as a result of or
arising from: (i) subject to paragraph (f) of this Section 7.2, any breach or
inaccuracy of any of the representations and warranties made by Seller in or
pursuant to this Agreement; (ii) any failure of Seller or its Affiliates to
carry out, perform, satisfy and discharge any of their covenants, agreements,
undertakings, liabilities or obligations under this Agreement or under any of
the documents and instruments delivered by Seller pursuant to this Agreement;
(iii) except to the extent that such Environmental Liability or the
circumstance, condition or event giving rise thereto is disclosed in Schedule
3.22, any Environmental Liability arising from any circumstance, condition or
event occurring or existing prior to the Closing, including Environmental
Liability due to the continuation after the Closing of any such circumstance,
condition or event and regardless of whether or not such circumstance, condition
or event is or was discovered prior to the Closing; provided, that Seller shall
not be responsible for any additional aggravation of any such circumstance,
condition or event resulting from the operation of the Facility after the
Closing Date without due regard to environmental considerations. Subject to
paragraph (f) of this Section 7.2 and Section 9.12, disclosure after the
Representation Date of a breach or inaccuracy of a representation or warranty
made by Seller pursuant to the Agreement shall not affect Seller's liability
under the Agreement with respect to such breach or inaccuracy.

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                 (b)     Survival of Remedies. Seller shall not be required to
indemnify and hold the Buyer Indemnified Parties harmless with respect to any
claim for Indemnification made pursuant to Section 7.2(a) unless such claim is
asserted (whether or not Losses have actually been incurred) by written notice
to Seller within the Applicable Period describing with reasonable specificity
the facts giving rise to the claim. The "Applicable Period" shall be two (2)
years after the Closing Date except for (i) Tax Indemnification for which the
Applicable Period shall be until 90 days after the end of the fiscal year of the
Company in which the applicable statute of limitations relating to the
applicable Tax expires, (ii) Fundamental Indemnification for which the
Applicable Period shall survive perpetually, or (iii) the Indemnification
provided for by Section 7.2(a)(i) based on a breach or inaccuracy of the
representation contained in Section 3.22 and by Section 7.2(a)(iii), in each
case with respect to third party claims only, for which the Applicable Period
shall be three (3) years. The provisions in this Section 7.2(b) shall not apply
to Seller's obligations under Section 7.5(c).

                (c)     Thresholds; Limitations on Liability. Seller shall not
be required to indemnify the Buyer Indemnified Parties unless and until the
amount of all Losses and Claims actually incurred by the Buyer Indemnified
Parties shall exceed, in the aggregate, an amount equal to $500,000 (the "Loss
Threshold"); provided, however, that the Loss Threshold shall not apply to any
right of a Buyer Indemnified Party for Fundamental Indemnification, and,
thereafter, Seller shall indemnify the Buyer Indemnified Parties only for Losses
and Claims in excess of the Loss Threshold or, in the case of any right of a
Buyer Indemnified Party for Fundamental Indemnification, the full amount of all
such Losses and Claims. The Buyer Indemnified Parties shall not be entitled to
General Indemnification for any Losses or Claims that, when added to all Losses
and Claims for which Indemnification has already been made by Seller (whether
for General Indemnification or Fundamental Indemnification), would exceed an
amount equal to fifty percent (50%) of the Purchase Price as adjusted by any
refunds or payments actually made pursuant to Section 2.5 (the "General
Indemnification Limit"). The Buyer Indemnified Parties shall not be entitled to
Fundamental Indemnification for any Losses or Claims that, when added to all
Losses and Claims for which Indemnification has already been made by Seller
(whether for General Indemnification or Fundamental Indemnification), would
exceed an amount equal to the Purchase Price as adjusted by any refunds or
payments actually made pursuant to Section 2.5. Seller shall have no obligation
to indemnify the Buyer Indemnified Parties for any Losses or Claims arising from
the failure to obtain any Required Consent waived in writing by Buyer pursuant
to Section 6.1. The provisions in this Section 7.2(c) shall not apply to
Seller's obligations under Section 7.5(c).

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                 (d)     [INTENTIONALLY OMITTED]

                 (e)     Derivative Losses. The Company shall not be treated as
an Affiliate of Buyer or a Buyer Indemnified Party for purposes of this Section
7.2, and Seller shall have no obligations to the Company pursuant to any
provision of the Agreement. If the Company suffers or incurs, or becomes subject
to, any Losses or Claims that it would not have suffered, incurred or become
subject to if (i) the representations and warranties made by Seller in the
Agreement were not breached or inaccurate, or (ii) Seller and its Affiliates did
not fail to carry out, perform, satisfy and discharge any of their covenants,
agreements, undertakings, liabilities or obligations under the Agreement or
under any of the documents and instruments delivered by Seller pursuant to the
Agreement, then Buyer shall be entitled to indemnification pursuant to Section
7.2(a) for Losses indirectly incurred by it as a result of such circumstances;
provided, however, that the amount of such indemnification shall in no event
exceed the after-tax economic impact on the value of the Interest, as determined
by a discounted cash-flow methodology based on the actual and projected cash
flows to Buyer, resulting from such Losses and Claims that the Company suffered
or incurred or to which it became subject. Except as provided in this Section
7.2(e), neither Buyer nor any Buyer Indemnified Party shall have any right to
indemnification under this Section 7.2 as a result of Losses or Claims suffered
or incurred by the Company or to which the Company becomes subject. The
provisions in this Section 7.2(e) shall not apply to Seller's obligations under
Section 7.5(c). Without limiting the generality of the foregoing, no Buyer
Indemnified Party shall be entitled to Indemnification for any Claims or Losses
incurred by such Buyer Indemnified Party which relate to or are in any way
derived from any interest in the Partnership other than the Interest.

                 (f)     Supplemental Disclosure by Seller. Seller shall be
entitled to deliver to Buyer prior to the Closing the Seller Supplemental
Disclosure. Solely for purposes of Section 7.2(a), whether or not any
representation or warranty of Seller is inaccurate shall be determined taking
into account the additional Seller Supplemental Disclosure as if the Seller
Supplemental Disclosure was part of the Disclosure Schedules. Notwithstanding
the foregoing, no Seller Supplemental Disclosure shall affect, modify,
supplement or qualify in any manner any of the representations and warranties
set forth in Article 3 for the purposes of the requirement set forth in Section
6.1(b).

                 (g)     Losses Covered by Insurance. The amounts for which
Seller shall be liable under Section 7.2(a) shall be reduced by any insurance
proceeds actually received by the Company in connection with the facts and
circumstances giving rise to the right of Indemnification. If, after a Buyer
Indemnified Party has been indemnified for any Losses or Claims, insurance
proceeds are received by the Company in connection with the facts and
circumstances giving rise to such Losses or Claims, then the Buyer Indemnified
Party who has received such Indemnification shall refund to Seller the amount of
such Indemnification that was paid to the extent that it would not have been
payable if such insurance proceeds had been received by the Company prior to the
payment of such Indemnification. Such refund shall be paid within ten (10) days
following the receipt by the Company of the insurance proceeds giving rise to
such refund. If any Buyer Indemnified Party other than Buyer fails to make such
refund during such period, Buyer shall make such refund within five (5) days
after the end of such period.

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        7.3     Buyer’s Indemnity.

                (a)     General. Buyer hereby agrees to indemnify and hold
harmless Seller, its Affiliates and their respective officers, directors and
shareholders and their successors and permitted assigns ("Seller Indemnified
Parties") from and against, any and all Losses or Claims that the Seller
Indemnified Parties may at any time suffer or incur, or become subject to, as a
result of or arising from: (i) subject to paragraph (f) of this Section 7.3, any
breach or inaccuracy of any of the representations and warranties made by the
Buyer in or pursuant to this Agreement; (ii) any failure by the Buyer to carry
out, perform, satisfy and discharge any of its covenants, agreements,
undertakings, liabilities or obligations under this Agreement or under any of
the documents and instruments delivered by the Buyer pursuant to this Agreement;
(iii) any Environmental Liability arising from any circumstance, condition or
event occurring or existing after the Closing, other than Environmental
Liability due to the continuation after the Closing of any circumstance,
condition or event occurring or existing prior to the Closing; provided, that
Buyer shall be responsible for any additional aggravation of any circumstance,
condition or event occurring or existing prior to the Closing that results from
the operation of the Facility without due regard to environmental considerations
after the Closing; (iv) after the Closing has occurred, the Company's failure to
pay and discharge when and as it becomes due and payable any Liability of the
Company other than those (x) with respect to which Buyer is entitled to
Indemnification pursuant to Section 7.2(a) or 7.5(c) hereof, or (y) existing as
of the Closing that are not known to Seller as of the Closing, the
non-disclosure of which would have constituted a breach of Section 3.8 had
Seller known of such Liabilities as of the Closing; and (v) Buyer's or any of
its Affiliates' failure to pay, discharge or perform when required any Liability
under the Venture Management Agreement required to be paid, discharged or
performed after the Closing. Subject to paragraph (f) of this Section 7.3 and
Section 9.12, disclosure after the Representation Date of a breach or inaccuracy
of a representation or warranty made by Buyer pursuant to this Agreement shall
not affect Buyer's liability under this Agreement with respect to such breach or
inaccuracy.

                 (b)     Survival of Remedies. Buyer shall not be required to
indemnify and hold the Seller Indemnified Parties harmless pursuant to Section
7.3(a) unless such claim is asserted (whether or not Losses have actually been
incurred) by written notice to the Buyer describing with reasonable specificity
the facts giving rise to the asserted claim (i) in the case of claims pursuant
to Section 7.3(a)(i) or (ii) (other than claims for Fundamental Indemnification)
within two (2) years after the Closing Date, (ii) in the case of claims pursuant
to Section 7.3(a)(iii) or (iv), within three (3) years after the Closing Date.
There shall be no limitation on when a claim may be asserted pursuant to Section
7.3(a)(i) for Fundamental Indemnification or pursuant to Section 7.3(a)(v).

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                 (c)     Thresholds; Limitations on Liability. Buyer shall not
be required to indemnify the Seller Indemnified Parties unless and until the
amount of all Losses and Claims actually incurred by the Seller Indemnified
Parties shall exceed, in the aggregate, an amount equal to $500,000 (the "Seller
Loss Threshold"); provided, however, that the Seller Loss Threshold shall not
apply to any right of a Seller Indemnified Party for Indemnification with
respect to representations and warranties made in Sections 4.1, 4.2 and 4.5
("Seller Fundamental Indemnification"), and, thereafter, Buyer shall indemnify
the Seller Indemnified Parties only for Losses and Claims in excess of the
Seller Loss Threshold or, in the case of any right of a Seller Indemnified Party
for Seller Fundamental Indemnification, the full amount of all such Losses and
Claims. The Seller Indemnified Parties shall not be entitled to General
Indemnification for any Losses or Claims that, when added to all Losses and
Claims for which Indemnification has already been made by Buyer (whether for
General Indemnification or Seller Fundamental Indemnification), would exceed the
General Indemnification Limit. The Seller Indemnified Parties shall not be
entitled to Seller Fundamental Indemnification for any Losses or Claims that,
when added to all Losses and Claims for which Indemnification has already been
made by Buyer (whether for General Indemnification or Seller Fundamental
Indemnification), would exceed an amount equal to the Purchase Price as adjusted
by any refunds or payments actually made pursuant to Section 2.5. Buyer shall
have no obligation to indemnify the Seller Indemnified Parties for any Losses or
Claims arising from the failure to obtain any Required Consent waived in writing
by Seller pursuant to Section 6.2.

                 (d)     [INTENTIONALLY OMITTED]

                 (e)     Derivative Losses. The Company shall not be treated as
an Affiliate of Seller or a Seller Indemnified Party for purposes of this
Section 7.3, and Buyer shall have no obligations to the Company pursuant to any
provision of the Agreement.

                 (f)     Supplemental Disclosure by Buyer. Buyer shall be
entitled to deliver to Seller prior to the Closing the Buyer Supplemental
Disclosure. Solely for purposes of Section 7.3(a), whether or not any
representation or warranty of Buyer is inaccurate shall be determined taking
into account the additional Buyer Supplemental Disclosure as if the Buyer
Supplemental Disclosure was part of the Disclosure Schedules. Notwithstanding
the foregoing, no Buyer Supplemental Disclosure shall affect, modify, supplement
or qualify in any manner any of the representations and warranties set forth in
Article 4 for the purposes of the requirement set forth in Section 6.2(b).

        7.4     Indemnification Procedure.

                 (a)     If a claim against Seller or Buyer (each, an
"Indemnifying Party") for Indemnification pursuant to the provisions of Sections
7.2(a) or 7.3(a) is to be made by any Buyer Indemnified Party or Seller
Indemnified Party (each, an "Indemnified Party"), such Indemnified Party shall
give notice of such claim to the Indemnifying Party promptly after such
Indemnified Party becomes aware of any fact, condition or event which may give
rise to Claims or Losses for which Indemnification may be sought under Sections
7.2(a) or 7.3(a); provided, that, failure to timely give notice shall not
relieve the Indemnifying Party from any obligation under this Agreement except
to the extent, if any, the Indemnifying Party is materially prejudiced thereby.

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                 (b)     In the case of a claim for Indemnification involving
the assertion of a Claim by a third party against such Indemnified Party,
provided that the Indemnifying Party (i) admits in writing to the Indemnified
Party that such Claim is covered by the indemnity provisions of Section 7.2(a)
or 7.3(a) hereof, as applicable, (ii) the Indemnifying Party has and provides
reasonable evidence that the Indemnifying Party (taking into account, in the
case of Seller, the financial capacity and resources of the Seller Guarantor)
has the financial capacity and resources to be fully responsible for all such
liabilities and obligations relating to such Claim and (iii) the Indemnifying
Party thereafter conducts the defense of such third party Claim as actively and
diligently as is reasonably appropriate, the Indemnifying Party shall have the
right to contest and defend by all appropriate legal proceedings such Claim and
to control all settlements (unless the Indemnified Party agrees to assume the
cost of settlement and to forego such indemnity) and to select a recognized and
reputable lead counsel acceptable to Indemnified Party to defend any and all
such Claims at the sole cost and expense of the Indemnifying Party ("Assume the
Defense"); provided, however, that the Indemnifying Party shall not be entitled
to Assume the Defense and shall pay the cost and expense of counsel retained by
the Indemnified Party if (1) the Claim relates to or arises in connection with
any criminal or quasi-criminal proceedings, action, indictment, allegation or
investigation of or against the Indemnified Party or its Affiliates, (2) Buyer,
if it is the Indemnified Party, reasonably believes an adverse determination
with respect to the assertion of the Claim by the third party would be
materially detrimental to or materially injure Buyer Guarantor's reputation or
future business prospects or otherwise would establish a custom or practice
adverse to the continuing business interests of Buyer Guarantor; (3) the Claim
asserted by the third party seeks an injunction or equitable relief against
Buyer Guarantor; (4) the Indemnified Party has been advised by counsel that a
reasonable likelihood exists of a conflict of interest between defenses to the
Claim available to the Indemnifying Party and the Indemnified Party; or (5) upon
petition by the Indemnified Party, the appropriate court rules that the
Indemnifying Party failed or is failing to defend the Claim as actively and
diligently as is reasonably appropriate; provided, further, that the
Indemnifying Party may not effect any settlement that could result in any cost,
expense or liability to, or have any material adverse effect upon, any
Indemnified Party unless such Indemnified Party consents in writing to such
settlement and the Indemnifying Party agrees to indemnify such Indemnified Party
therefor.

                 (c)     In the case of a claim for Indemnification under
Section 7.2(a) made pursuant to Section 7.2(e) and involving the assertion of a
Claim by a third party against the Company, provided that (i) Seller admits in
writing to the Buyer Indemnified Party that such Claim is covered by the
indemnity provisions of Section 7.2(a) and 7.2(e), (ii) Seller has and provides
reasonable evidence that Seller (together with the Seller Guarantor) has the
financial capacity and resources to be fully responsible for all such
liabilities and obligations relating to such Claim and (iii) Seller thereafter
conducts the defense of such third party Claim as actively and diligently as is
reasonably appropriate, Seller shall have the right to Assume the Defense of
such Claim to the extent that any Buyer Indemnified Party has the right to
contest and defend such Claim, to control any settlement of such Claim, or to
select counsel to defend such Claim; provided, however, that Seller shall not be
entitled to Assume the Defense and shall pay the cost and expense of counsel
retained by the Buyer Indemnified Party if (1) the Claim relates to or arises in
connection with any criminal or quasi-criminal proceedings, action, indictment,
allegation or investigation of or against the Indemnified Party or its
Affiliates, (2) the Indemnified Party reasonably believes an adverse
determination with respect to the assertion of the Claim by the third party
would be materially detrimental to or materially injure Buyer Guarantor's
reputation or future business prospects or otherwise would establish a custom or
practice adverse to the continuing business interests of Buyer Guarantor; (3)
the Claim asserted by the third party seeks an injunction or equitable relief
against Buyer Guarantor; (4) the Indemnified Party has been advised by counsel
that a reasonable likelihood exists of a conflict of interest between defenses
to the Claim available to Seller and the Buyer Indemnified Party; and (5) upon
petition by the Buyer Indemnified Party, the appropriate court rules that Seller
failed or is failing to defend the Claim as actively and diligently as is
reasonably appropriate, and; provided, further, that Seller may not effect any
settlement that could result in any cost, expense or liability to, or have any
material adverse effect upon, any Buyer Indemnified Party unless such Buyer
Indemnified Party consents in writing to such settlement and Seller agrees to
indemnify such Buyer Indemnified Party therefor.

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                 (d)     In the event the Indemnifying Party does not admit in
writing to the Indemnified Party seeking Indemnification that such Claim is
covered by the indemnity provisions of Section 7.2(a) or 7.3(a) hereof, as
applicable, such Indemnified Party shall take such actions as it deems necessary
to defend such Claim; provided, however, that the Indemnified Party may not
effect any settlement that could result in any cost, expense, liability to, or
have any material adverse effect upon, the Indemnifying Party without consent of
the Indemnifying Party, which consent shall not be unreasonably withheld and
which consent or objection thereto must be provided in a timely manner as the
circumstances dictate and in any event within ten (10) business days of such
request. Once an Indemnifying Party Assumes the Defense with respect to a claim,
an Indemnified Party may select a recognized and reputable counsel satisfactory
to Indemnified Party to participate in any defense of that third party Claim, in
which event such Indemnified Party's counsel shall be at the sole cost and
expense of such Indemnified Party; provided, however, that the cost and expense
of Indemnified Party's counsel that were incurred prior to the date the
Indemnifying Party Assumes the Defense in connection with responding to the
third party Claim shall be borne by the Indemnifying Party.

                 (e)     In connection with any such third party Claim, the
Parties shall cooperate with each other (at the Indemnifying Party's cost and
expense) and provide each other with access to relevant books and records in
their possession. Seller and Buyer shall cause the Seller Indemnified Parties
and the Buyer Indemnified Parties, respectively, to comply with the provisions
of this Section 7.4.

        7.5     Post-Closing Tax Matters.

                 (a)     Review of Tax Returns; Proration of Income and Loss.
With respect to Tax Returns not yet filed as of the Closing Date which cover
periods ending on or before or including the Closing Date, Seller or Buyer, as
the case may be, shall reasonably cooperate with the other Party in permitting
the other Party to review and comment on such Tax Returns made available
pursuant to Section 12.1 of the Partnership Agreement. The Parties agree that
for purposes of allocating items of Company income, gain, loss and deduction
between Seller and Buyer for any taxable periods that include but do not end on
the Closing Date (a "Straddle Tax Period") Seller and Buyer will, to the extent
permitted by applicable Law and the Partnership Agreement, elect with the
relevant taxing authority to treat such taxable period for all purposes as a
short taxable period ending as of the Closing Date. In any case where applicable
Law does not permit such an election to be made, all items of Company income,
gain, loss and deduction shall be allocated between the period before the
Closing Date and the period beginning the day after the Closing Date using a
closing-of-the-books method assuming that the Straddle Period consisted of two
taxable periods, one ending at the close of the Closing Date and the other
beginning at the start of the day after the Closing Date, except that (i)
exemptions, allowances or deductions that are calculated on an annual basis
(such as the deduction for depreciation) and (ii) deductions relating to real
property, personal property, intangibles and other similar Taxes relating to
assets shall, in each case, be allocated on a per-diem basis taking into account
the period for which the asset was held. If the election or allocation provided
above is not permitted by the Partnership Agreement, all items of Company
income, gain, loss and deduction shall be allocated in accordance with the
provisions of the Partnership Agreement; provided, each of Seller and Buyer
agrees to exercise any of its rights under the Partnership Agreement to permit,
and to cause its representative or representatives on the management committee
to permit and approve, the election and allocation provided for above and/or to
put into effect such allocation as between Seller and Buyer.

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                 (b)     Cooperation on Tax Matters. Buyer and Seller shall
cooperate fully, as and to the extent reasonably requested by the other Party,
in connection with the filing of Tax Returns of the Company and any audit,
litigation or other proceeding with respect to Taxes of the Company. Such
cooperation shall include the retention and (upon the other Party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Buyer and Seller agree (i) to retain all books
and records with respect to Tax matters pertinent to the Company relating to any
taxable period beginning before the Closing until the expiration of the statute
of limitations (and, to the extent notified by Buyer or Seller, any extensions
thereof) of the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (ii) to give the other
Party reasonable written notice prior to destroying or discarding any such books
and records and, if the other Party so requests, Buyer or Seller, as the case
may be, shall allow the other Party to take possession of such books and
records.

                 (c)     Halifax County Tax Dispute. Seller agrees to indemnify
Buyer for fifty percent (50%) of Halifax Amount. The "Halifax Amount" shall be
the sum of (i) the unpaid business personal property taxes, interest and
penalties due by the Company to the County of Halifax, State of North Carolina,
for all periods ending on or prior to December 31, 2003, (ii) the amount of
reasonable consultants' and attorneys' fees and expenses incurred by the Company
in settling or otherwise resolving the currently ongoing property tax dispute
between the Company and the County of Halifax, State of North Carolina with
respect to the taxes, penalties and interest described in clause (i), and (iii)
any business personal property tax penalties actually paid by the Company to the
County of Halifax, State of North Carolina with respect to business personal
property taxes for periods after December 31, 2003 to the extent that such
penalties accrued prior to the Closing Date; provided, however, that the Halifax
Amount shall include unpaid taxes, interest and penalties due pursuant to, and
fees and expenses incurred in connection with, (x) a settlement only if that
settlement is consented to in writing by Seller, which consent shall not be
unreasonably withheld, conditioned or delayed, or (y) an order, decision or
determination that becomes binding and non-appealable only if Buyer complies
with the following sentence. If an order, decision or determination is issued in
connection with the items set forth in clauses (i) and/or (iii), above, and
neither the Company nor Buyer intends to appeal such order, decision or
determination, Buyer shall give Seller prompt written notice thereof and shall,
at the request of Seller, take any necessary actions to entitle Seller to appeal
such order, decision or determination on behalf of the Company (or, if such
entitlement is not possible, to cause the Company, to the extent Buyer is
entitled to do so, to appeal such order decision or determination at the sole
cost and expense of Seller) and shall cooperate with Seller in connection with
any such appeal. Seller's obligation under this Section 7.5(c) shall not be
subject to any of the limitations contained in Section 7.2 including, without
limitation Sections 7.2(b) - (e). Seller shall pay any amounts owed under this
Section 7.5(c) from time to time as and when the payment of a portion of the
Halifax Amount adversely affects (but not in excess of the amount by which it
affects) Buyer's cash flows to or from the Company with respect to the Interest
("Buyer Cash Flows") (for example, if and when Buyer makes a contribution to the
Company with respect to the Interest for the purpose of paying a portion of the
Halifax Amount or when the payment of the Halifax Amount adversely affects the
amount of distributions paid by the Company to Buyer with respect to the
Interest). When any portion of the Halifax Amount is paid from the Halifax
Reserve, such payment will be deemed to affect Buyer Cash Flows by an amount
equal to the difference between the actual Buyer Cash Flows and the amount the
Buyer Cash Flows would thereafter have been had that portion of Halifax Amount
not been payable but instead was released to the Project Control Account (as
defined in the Credit Agreement) from the Halifax Reserve. Buyer shall give
Seller notice and supporting information whenever an amount is payable under
this Section 7.5(c) and Seller shall pay Buyer such amount within 5 days
thereafter. The rights of Buyer under this Section 7.5(c) shall be the sole and
exclusive remedy of Buyer with respect to any taxes, penalties, interest, fees
and expenses, and any impact on the value of the Interest resulting from such
taxes, penalties, interests, fees and expenses, in each case relating to
business personal property taxes due by the Company to the County of Halifax,
State of North Carolina, and Buyer shall have no rights under Section 7.2 with
respect thereto.

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        7.6     No Additional Representations. Buyer acknowledges that it and
its representatives have been permitted access to the Books and Records,
Facility, Assets, Tax Returns, Contracts, Insurance Policies and other
information relating to the Company that it and its representatives have desired
or requested to see or review, and that it and its representatives have had a
full opportunity to meet with the officers and employees of Seller and the
Company to discuss the business, operations and development of the Company and
the Facility. Buyer acknowledges that none of Seller, the Company or any other
Person has made any representation or warranty, expressed or implied, as to, and
none of Buyer or any of its Affiliates has relied upon, the accuracy or
completeness of any information regarding the Company furnished or made
available to Buyer and its representatives, except as expressly set forth in
this Agreement, and neither Seller nor any other Person shall have or be subject
to any liability to Buyer or any other Person resulting from the distribution to
Buyer, or Buyer’s use of, any such information, including the Offering
Memorandum dated April 2003, and any information, documents or material made
available to Buyer or its representatives in any “data rooms”, management
presentations or in any other medium in expectation of the transactions
contemplated hereby. Buyer acknowledges that, should the Closing occur, Buyer
shall acquire the Interest and the interest in the Assets represented thereby
without any representation or warranty as to merchantability or fitness for any
particular purpose, in an “as is” condition and on a “where is” basis, except as
otherwise expressly set forth in this Agreement.

        7.7     Exclusivity of Remedies. Notwithstanding anything to the
contrary in this Agreement, no Party shall be liable to the other Party or any
Indemnified Party for (i) any consequential, special, indirect or incidental
damages sustained by any other Party or Indemnified Party or (ii) punitive or
exemplary damages. The Indemnification provided for in Sections 7.2, 7.3 and
7.5(c) shall constitute the exclusive remedy for the Parties with respect to any
Losses and Claims arising under or related to this Agreement except that either
Party may seek specific performance with respect to any breaches or threatened
breaches of the covenants set forth in this Agreement. Nothing in Section
7.2(a)(iii) Section 7.3(a)(iii), or this Section 7.7, or any limitation
contained therein, shall be interpreted as a waiver of any right or remedy
available to Buyer or Seller, as the case may be, under any applicable
Environmental Law.

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ARTICLE 8.
TERMINATION

        8.1     Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned as follows:

                 (a)     By the written consent of Buyer and Seller at any time
prior to the Closing;

                 (b)     By written notice of Buyer or Seller to the other if a
final, non-appealable order to restrain, enjoin or otherwise prevent the
consummation of the transactions contemplated hereby shall have been entered;

                 (c)     By written notice of Buyer to Seller at any time on or
after the Termination Date if the Closing shall not have occurred by reason of a
failure of any condition precedent under Section 6.1 unless the failure results
primarily from a material breach by Buyer of any representation, warranty or
covenant contained in this Agreement;

                 (d)     By written notice of Seller to Buyer at any time on or
after the Termination Date if the Closing shall not have occurred by reason of a
failure of any condition precedent under Section 6.2, unless the failure results
primarily from a material breach by Seller of any representation, warranty or
covenant contained in this Agreement;

                 (e)     By written notice of Buyer to Seller if the FERC
Transaction Approvals or any other consent or approval to be obtained from any
Governmental Authority in order to effect the transactions contemplated in this
Agreement shall be subject to any condition that would (1) require Buyer or any
of its Affiliates to dispose of any significant portion of its assets or lines
of business, or (2) would reasonably be expected to result in a Material Adverse
Effect or a Buyer Material Adverse Effect; provided, however, before Buyer shall
have the right to terminate this Agreement pursuant to this Section 8.1(e),
Buyer shall, and shall cause its Affiliates, to use commercially reasonable
efforts to have the applicable Governmental Authority remove such condition from
the transaction approval, including seeking rehearing or reconsideration of such
condition;

                 (f)     By written notice of Buyer to Seller in the event there
has been a breach by Seller or the Seller Guarantor of their respective
agreements, covenants, representations or warranties contained in this Agreement
or the Seller Guaranty, as the case may be, that would reasonably be expected to
result in a Material Adverse Effect (without taking into account, for this
purpose only, any materiality or Material Adverse Effect qualifier in any
representation or warranty) if (i) such breach has not been cured within ten
(10) days after Buyer's written notice thereof to Seller, or (ii) if such breach
is not curable within ten (10) days, Seller has not taken reasonable actions
within ten (10) days after such written notice designed to cure such breach, has
not diligently pursued such cure thereafter or, in any event, has not effected
such cure prior to the Termination Date;

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                 (g)     By written notice of Seller to Buyer in the event there
has been a breach by Buyer of its agreements, covenants, representations or
warranties contained in this Agreement that would reasonably be expected to
result in a Buyer Material Adverse Effect (without taking into account, for this
purpose only, any materiality or Material Adverse Effect qualifier in any
representation or warranty) if (i) such breach has not been cured within ten
(10) days after Seller's written notice thereof to Buyer, or (ii) if not curable
within ten (10) days, Buyer has taken reasonable actions within ten (10) days
after Seller's written notice thereof to Buyer designed to cure such breach
during a reasonable period of time (but in any event prior to the Termination
Date) and Buyer continues to take reasonable actions to cure such breach until
it is cured; or

                 (h)     By written notice of Buyer to Seller pursuant to
Section 2.5(b).

        8.2     Effect of Termination. Notwithstanding any termination of this
Agreement pursuant to Section 8.1, the provisions of Sections 3.25, 4.5, 5.4 and
5.5 and Articles 7, 8 and 9 shall survive any such termination. Upon any
termination of this Agreement pursuant to Section 8.1, Seller and Buyer shall
have no obligation or liability to each other except with respect to (i) any
breaches of covenants, representations or warranties made in this Agreement
prior to such termination and (ii) those provisions that survive the termination
pursuant to the first sentence of this Section 8.2. If and only if the
transactions contemplated by this Agreement are not consummated because of a
material breach of this Agreement by Buyer, the terms of this Agreement shall be
deemed to constitute an “Offering Notice” for which the “Offering Period” has
expired without being exercised for purposes of, and with the meanings ascribed
to those terms, in Section 8.3 of the Partnership Agreement.

ARTICLE 9.
MISCELLANEOUS

        9.1     Expenses. Except as otherwise set forth herein, each of Seller
and Buyer shall bear and pay all costs and expenses incurred by it in connection
with the transactions contemplated by the Agreement.

        9.2     Transfer Taxes, Recording Fees and Real Estate Taxes. All sales,
use or other taxes normally imposed on a buyer or imposed on a seller that are
properly chargeable to a buyer (other than taxes on gross income, net income or
gross receipts) and duties, levies on other governmental charges incurred by or
imposed with respect to the transactions contemplated by this Agreement and all
recording fees shall be shared equally by Buyer and Seller.

        9.3     Waiver and Amendment. Any provision of this Agreement may be
waived only in writing at any time by the Party that is entitled to the benefits
thereof. This Agreement may not be amended or supplemented at any time, except
by an instrument in writing signed on behalf of each Party hereto. The waiver by
any Party hereto of any breach of a provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.

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        9.4     Assignment. This Agreement shall not be assignable by any Party
without the prior written consent of the other Party. This Agreement shall inure
to the benefit of and will be binding upon the Parties and their respective
legal representatives, successors and permitted assigns.

        9.5     Notices. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement must
be in writing and shall be deemed to have been duly given when received if (a)
delivered in person or by courier, (b) sent by telecopy or facsimile
transmission, or (c) mailed, by registered or certified mail, postage prepaid
return receipt requested, to the intended recipient at following addresses:

  if to Seller:           LG&E Roanoke Valley L.P.
C/o LG&E Energy LLC
220 West Main Street
Louisville, Kentucky   40202
Attn: President
Fax: (502) 627-4622         with copies to:           LG&E Energy LLC
220 West Main Street
Louisville, Kentucky   40202
Attn: General Counsel
Fax: (502) 627-4622           and           Nixon Peabody LLP
Clinton Square
P.O. Box 31051
Rochester, New York   14603-1051
Attn: Roger Byrd, Esq.
Fax: (585) 263-1600         if to Buyer, to:           Westmoreland-Roanoke
Valley, L.P.
14th Floor
2 North Cascade Avenue
Colorado Springs, CO   80903
Attn: W. Michael Lepchitz
Fax: (719) 448-5824

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or to such other address as any Party shall have furnished to the other by
notice given in accordance with this Section 9.5. Such notices shall be
effective upon actual receipt at the addresses above.

        9.6     Dispute Resolution; Arbitration; Governing Law. All
controversies, disputes, differences or questions relating to or in connection
with this Agreement shall be referred by any Party to binding arbitration in
accordance with the then-prevailing Commercial Arbitration Rules of the American
Arbitration Association. Such arbitration shall be the exclusive method for
resolution of the dispute, and the determination of the arbitrator shall be
final and binding on the Parties (except to the extent that there exist grounds
for vacation of an award under applicable arbitration statutes). In the event of
any disagreement between the Parties arising out of any provision of this
Agreement and prior to its referral to arbitration, the Parties shall use their
respective good faith efforts to resolve such disagreement. In the event that
the representatives of the Parties responsible for administering this Agreement
are unable to resolve any disagreement relating to any provision of this
Agreement within thirty (30) days, then upon the request of either Buyer or
Seller, the Parties shall refer the disagreement to the Chief Financial Officer
of Seller Guarantor and the Chief Financial Officer of Buyer Guarantor, in each
case who shall attempt in good faith to resolve the disagreement in question;
provided that no disagreement shall be referred to such executives if both of
such executives have participated in meetings with the other regarding the
disagreement. If such executives fail to resolve such disagreement within thirty
(30) days of such referral (or if such disagreement shall not be subject to
being referred to such executives), either Buyer or Seller may submit such
matter for arbitration in accordance with this Section 9.6. The arbitration
shall be conducted in the English language and shall take place in Washington,
D.C. under the auspices of the American Arbitration Association and in
accordance with its Commercial Arbitration Rules. The costs of such arbitration
shall be determined and allocated between the Parties, by the arbitrator in its
decision. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia, excluding any conflict of law rules
that may direct the application of the laws of another jurisdiction.

        9.7     Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated unless such an interpretation
would materially alter the rights and privileges of any Party or materially
alter the terms of the transactions contemplated hereby.

        9.8     Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.

        9.9     No Third Party Beneficiaries. Except as provided in Article 7,
neither this Agreement nor any document delivered in connection with this
Agreement, confers upon any Person not a Party any rights or remedies hereunder
or thereunder.

        9.10     Entire Agreement; Exhibits and Schedules. This Agreement,
including the Exhibits and Disclosure Schedules hereto and any other documents
executed and delivered pursuant to this Agreement, constitute the entire
agreement and supersede all other prior agreements and understandings, both oral
and written, among the Parties or any of them, with respect to the subject
matter hereof. No representation, promise, inducement or statement of intention
has been made by any Party which is not embodied in or superseded by this
Agreement or in the documents referred to herein, and no Party shall be bound by
or liable for any alleged representation, promise, inducement or statement of
intention not so set forth.

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        9.11     Disclosure. Any fact, circumstance or condition disclosed by
Seller or Buyer in a Disclosure Schedule corresponding to the representations
and warranties in a particular section of Article 3 or 4 shall be deemed
disclosed in the Disclosure Schedule corresponding to the representations and
warranties in another section of Article 3 or 4 (or in a new Disclosure Schedule
that corresponds to such section if no Disclosure Schedule exists that
corresponds to such section) if the relevance of such fact, circumstance or
condition to a representation or warranty in such other section is reasonably
apparent from the disclosure made in the Disclosure Schedule in which the
disclosure is made.

        9.12     Closing Over Breaches. Notwithstanding anything in Sections 7.2
or 7.3 to the contrary, if either Party elects to proceed with the Closing with
Knowledge by such Party of any (a) breach or inaccuracy of any representation or
warranty by the other Party, or (b) any circumstance, condition or event that
would otherwise provide such Party a right to indemnification under Section
7.2(a)(iii) or 7.3(a)(iii), as applicable, and the other Party can demonstrate
that such Party had Knowledge of such breach, inaccuracy, circumstance,
condition or event (each, a “Basis for Indemnification”), then the Basis for
Indemnification will be deemed waived by such Party that elects to proceed with
the Closing, and such Party shall be deemed to have fully released and forever
discharged the other Party with respect to any indemnification or other claims
with respect to such Basis for Indemnification of which such Party had
Knowledge.

        9.13     WEL Partner. WEL Partner joins in this Agreement for the
purpose of agreeing to the provisions of Section 8.2 of this Agreement as it
pertains to WEL and to consent to the transactions contemplated by this
Agreement and to waive its Purchase Rights to the extent necessary to enable the
transactions contemplated by this Agreement to be consummated. .

        9.14     Board Approval. Notwithstanding anything in this Agreement or
the Buyer Guaranty to the contrary, neither this Agreement nor the Buyer
Guaranty have been approved by the board of directors of the Buyer Guarantor.
Buyer will submit for approval this Agreement and the Buyer Guaranty to a duly
called meeting of board of directors of the Buyer Guarantor held no later than
September 8, 2004. If this Agreement and the Buyer Guaranty are not approved by
the board of directors of the Buyer Guarantor on or before September 8, 2004,
without amendment or any other modification, this Agreement, the Buyer Guaranty
and the Seller Guaranty shall each be immediately terminated and void ab initio
and neither party shall have any liability under this Agreement, the Buyer
Guaranty or the Seller Guaranty.

         .

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[Signatures begin on the next page]

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                IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.

SELLER:     LG&E ROANOKE VALLEY L.P.     By: LG&E Power 16 Incorporated
Its General Partner     By:    /s/ SB Rives                 Name: S. Bradford
Rives Title: Vice President and Controller     BUYER:     [**]     By:    /s/
[**]                     Name: [**] Title: [**]     WEL PARTNER:    
WESTMORELAND-ROANOKE VALLEY, L.P.     By:  WEI-Roanoke Valley, Inc.
        General Partner     By:    /s/ Gregory S. Woods      Name: Gregory S.
Woods Title: President