AMENDED AND RESTATED

PURCHASE AGREEMENT

AMONG

COGENTRIX OF OKLAHOMA, INC.,

GREEN COUNTRY ENERGY, LLC,

and

GREEN COUNTRY HOLDING LLC

Dated as of April 11, 2003

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND INTERPRETATION

  1

1.1

Definitions.

  1

1.2

Cross-Reference Table.

  7

1.3

Interpretation.

  7

     

ARTICLE II SALE AND PURCHASE

  8

2.1

Sale and Purchase of the Acquired Interest.

  8

2.2

Closing.

  8

     

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLER

  9

3.1

Corporate Status, etc.

  9

3.2

Capitalization

  9

3.3

Conflicts; Consents

10

3.4

Brokers and Finders

10

3.5

Company Permits; Compliance With Laws.

10

3.6

Taxes.

11

3.7

ERISA.

11

3.8

Litigation.

12

3.9

Property.

12

3.10

Contracts.

13

3.11

Insurance.

14

3.12

Environmental Matters.

14

3.13

Intellectual Property.

14

3.14

Financial Statements; Absence of Undisclosed Liabilities; Absence of Changes.

15

3.15

Books and Records.

15

3.16

Representations Complete.

15

3.17

Solvency.

15

3.18

Technical Information.

15

3.19

Financing Representations Complete.

16

     

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

16

4.1

Corporate Status, etc.

16

4.2

Capitalization.

16

4.3

Conflicts; Consents.

17

4.4

Financing.

17

4.5

Brokers and Finders.

17

4.6

Purchase for Investment.

17

4.7

Business of Purchaser.

18

4.8

Information and Investigation.

18

4.9

Litigation.

18

4.10

Taxes.

18

4.11

Representations Complete.

18

     

ARTICLE V COVENANTS

19

5.1

Conduct of Business.

19

5.2

Efforts to Consummate Transaction.

20

5.3

Access and Information.

21

5.4

Publicity.

22

5.5

Transfer Taxes.

22

5.6

Notification of Certain Matters.

22

5.7

Tax Matters.

22

5.8

Refinancing.

22

5.9

Conversion Services Agreement Consent.

22

5.10

Transfer of Seller's membership interests in Operator.

22

     

ARTICLE VI CONDITIONS TO CLOSING

23

6.1

Conditions to the Obligations of the Seller and the Purchaser.

23

6.2

Conditions to the Obligations of the Purchaser.

23

6.3

Conditions to the Obligation of the Seller.

25

6.4

Condition Subsequent

26

     

ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

26

7.1

Survival of Representations, Warranties and Covenants.

26

7.2

Indemnification by the Seller.

27

7.3

Indemnification by Purchaser.

27

7.4

Matters Involving Third Parties.

28

     

ARTICLE VIII TERMINATION

29

8.1

Termination.

29

8.2

Effect of Termination.

29

   

ARTICLE IX GENERAL PROVISIONS

30

9.1

Expenses.

30

9.2

Further Action.

30

9.3

Certain Limitations and Waiver.

30

9.4

Notices.

30

9.5

Parties in Acquired Interest; Assignment.

31

9.6

Third-Party Beneficiaries.

32

9.7

Amendment; Waivers, etc.

32

9.8

Entire Agreement

32

9.9

Exclusive Remedies; Enforcement.

32

9.10

Severability.

32

9.11

Counterparts.

32

9.12

Governing Law.

33

9.13

Consent to Jurisdiction, etc.

33

9.14

Waiver of Punitive and Other Damages and Jury Trial.

33

9.15

Confidentiality.

34

9.16

Amendment and Restatement.

34

     

SCHEDULES AND ANNEXES

Schedule 3.4

Brokers and Finders

Schedule 3.5(a)

Company Permits

Schedule 3.5(b)

Certain Disclosures Regarding Company Permits

Schedule 3.5(c)

Certain Disclosures Regarding Company Permits Liabilities

Schedule 3.6(a)

Taxes

Schedule 3.7

Employee Benefit Plans

Schedule 3.8

Litigation

Schedule 3.9(a)

Real Property

Schedule 3.10(a)

Contracts

Schedule 3.10(b)

Certain Disclosures Regarding Contracts

Schedule 3.11

Insurance Policies and Fidelity Bonds

Schedule 3.12(a)

Certain Disclosures Regarding Environmental Matters

Schedule 3.12(b)

Certain Disclosures Regarding Hazardous Materials Activities

Schedule 3.12(c)

Certain Disclosures Regarding Material Compliance Issues Relating to
Environmental Laws

Schedule 3.14(b)

Liabilities

Schedule 3.18

Technical Information

Schedule 6.1(d)

Consents of Third Parties

Schedule 6.1(e)

Consents and Notifications with respect to the Company Permits

Schedule 6.2(h)

Refinancing Terms

Schedule 6.2(o)

Methods and Practices Regarding Working Capital

Schedule 6.2(t)

Separateness Covenants and Independent Director Provisions

Schedule 6.2(v)

Settlement Term Sheet

Annex I

Form of Amended & Restated Operating Agreement

Annex II

Reserved

Annex III

Form of Purchase Guaranty

Annex IV

Form of Seller Guaranty

Annex V

Form of Seller Indemnification Agreement

Annex VI

Form of Seller Indemnification Guaranty

Annex VII

Form of First Amendment to O&M Agreement

 

Exhibit I

Form of Legal Opinion of Latham & Watkins LLP, special transactional counsel to
Seller, the Company and Seller Guarantor

Exhibit II

Form of Legal Opinion of Moore & Van Allen PLLC, counsel to Seller, the Company
and Seller Guarantor

Exhibit III

Form of Legal Opinion of Van Ness Feldman, regulatory counsel to Seller and the
Company

Exhibit IV

Form of Legal Opinion of Moore & Van Allen PLLC, tax counsel to Seller and the
Company

Exhibit V

Form of Legal Opinion of Boesche, McDermott & Eskridge, LLP, local counsel to
Seller and the Company

Exhibit VI

Form of Legal Opinion of Chadbourne & Parke LLP, special counsel to Purchaser
and Purchaser Guarantor

Exhibit VII

Form of Legal Opinion of Bond K. Koga, counsel to Purchaser and Purchaser
Guarantor

 

AMENDED AND RESTATED PURCHASE AGREEMENT

          AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of April 11, 2003
(this "Agreement"), among COGENTRIX OF OKLAHOMA, INC., a Delaware corporation
(the "Seller"), GREEN COUNTRY ENERGY, LLC, a Delaware limited liability company
(the "Company") and GREEN COUNTRY HOLDING LLC, a Delaware limited liability
company (the "Purchaser"), relating to the purchase and sale of the Acquired
Interest (as defined below).

W I T N E S S E T H:

          WHEREAS, the Seller directly owns one-hundred percent (100%) of the
issued and outstanding membership interests (the "Membership Interests") of the
Company and as a result thereof, prior to the Closing Date (as defined below)
the Seller has had and will have exclusive control of the operation and
management of the Company;

          WHEREAS, the Purchaser is a Delaware limited liability company
presently wholly owned by Aircraft Services Corporation, a Nevada corporation
("ASC") and General Electric Credit Corporation of Tennessee, a Tennessee
corporation ("GECCT");

          WHEREAS, subject to the terms and conditions set forth herein, the
Seller wishes to sell the Acquired Interest (as defined below) to the Purchaser,
and the Purchaser wishes to purchase the Acquired Interest from the Seller in
exchange for consideration comprised of the Cash Purchase Price and the Seller's
Interest (as such terms are defined below);

          WHEREAS, the Seller and Purchaser entered into two amendments dated
May 14, 2003 and May 21, 2003, respectively, to the Original Purchase Agreement
dated as of April 11, 2003;

          WHEREAS, this Agreement amends and restates the Original Purchase
Agreement.

          NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in this Agreement and of the mutual benefits
to be derived therefrom, the parties agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

          1.1     Definitions.

          As used in this Agreement and the Schedules, the following terms have
the following meanings:

          Acquired Interest:  one-hundred percent (100%) of the Membership
Interests issued and outstanding on the Closing Date, including all rights and
interests associated therewith, to be sold to the Purchaser by the Seller
pursuant to this Agreement.

          Affiliate:  (a) with respect to any Person or group of Persons, a
Person that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with such Person or group of
Persons, (b) with respect to any natural person: a parent, immediate family
member or lineal descendant of any of the foregoing, and a trust of which such
natural person or any of the foregoing is a settlor or beneficiary or trustee,
and (c) with respect to any trust:  a settlor or beneficiary or trustee of such
trust, and a Person that is an Affiliate of such settlor or beneficiary or
trustee under clauses (a) or (b) of this paragraph.

          Amended & Restated Operating Agreement:  the operating agreement of
the Purchaser, as modified as described herein, in the form of Annex I hereto.

          Ancillary Documents:  the Amended & Restated Operating Agreement and
the certificates delivered pursuant to Sections 6.2(c) and 6.3(c).

          Authorized Officer:  a president, chairman, vice chairman, vice
president or other officer of the applicable Person that is authorized pursuant
to the by-laws or other governing instruments of such Person to bind such
Person.

          Bankruptcy Event:  the occurrence and continuation of any of the
following events:

          (a)     Insolvency or Voluntary Proceedings:  a Person (i) commences
any case, proceeding or other action (A) under any existing or future law or any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeks to have an order for relief entered
with respect to it, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeks appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets; (ii) makes, or proposes to make a general assignment for the benefit of
its creditors; (iii) admits or proposes to admit in writing its inability to pay
its debts as they become due; (iv) files or proposes to file any plan of
reorganization pursuant to 11 U.S.C. Section 301 et seq. or consents to the
filing of an involuntary petition pursuant to 11 U.S.C. Section 303 et seq.; or
(v) takes, or proposes to take any action in furtherance of, or indicates its
consent to, approval of or acquiescence in, any of the acts set forth in clause
(i) or (ii) above; or

          (b)     Involuntary Proceedings:  (i) an involuntary petition is filed
against a Person under any existing or future law or any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors or a receiver, trustee, custodian or other similar official is appointed
to take possession, custody or control of any property of such Person, as
applicable, and (A) such petition or appointment is not dismissed, set aside or
withdrawn or otherwise ceases to be in effect within sixty (60) days from the
date of said filing or appointment, or (B) an order for relief is entered
against such Person, with respect thereto, or (C) such Person shall take any
action indicating its consent to, approval of, or acquiescence in, any such
petition or appointment.

          Business Day:  any day other than a Saturday, a Sunday, or a day on
which commercial banks in New York, New York or the State of Oklahoma are
required or authorized by law to remain closed.

          Code:  the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

          Cogentrix:  Cogentrix Energy, Inc., a North Carolina corporation.

          Company L/C Proceeds Reserve:  means the reserve of $25,000,000 that
has been established by the Company for use solely in connection with the
satisfaction of any judgments entered in connection with, or settlement of, the
L/C Litigation, subject to release upon final judgment or final settlement of
the L/C Litigation.

          Consent:  any consent, approval, authorization, notification, waiver,
order, application, filing, license, registration, declaration or qualification
of or with any Person.

          Contract:  any agreement, lease, license, evidence of indebtedness,
bond, mortgage, indenture, indemnity, instrument or other binding contract.

          Control (including the terms "controlled by" and "under common control
with"):  the possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of a Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.

          Conversion Services Agreement:  the Amended and Restated Dependable
Capacity and Conversion Services Agreement between the Company and PECO Energy
Company, dated August 25, 1999, as assigned to Exelon Generating Company, LLC,
as the same may be amended, modified or supplemented from time to time

          Environmental Law:  any federal, state, regional or local law
(including common law), statute, rule, code, regulation, ordinance, judicial or
administrative decision, requirement or order relating to (a) manufacture,
transport, use, treatment, storage, disposal, release or threatened release of
Hazardous Materials or (b) the protection of human health, safety or the
environment (including, without limitation, natural resources, cultural
resources, air, and surface or subsurface land and waters).

          ERISA:  the Employee Retirement Income Security Act of 1974, as
amended and the regulations promulgated thereunder.

          ERISA Affiliate:  means any trade or business which is treated as a
single employer with any Person pursuant to Section 414(b), (c), (m) or (o) of
the Code.

          Facility:  the approximately 795-megawatt dispatchable, combined cycle
natural gas-fired generating facility located in Jenks, Oklahoma.

          FERC:  the Federal Energy Regulatory Commission, or its successor.

          First Amendment to O&M Agreement:  the First Amendment to O&M
Agreement in substantially the form of Annex VII hereto.

          FPA:  the Federal Power Act, as amended, and the rules and regulations
promulgated thereunder.

          GAAP:  United States generally accepted accounting principles as in
effect from time to time.

          Governmental Entity:  any supranational, national, federal, state,
regional, municipal or local governmental or quasi-governmental or regulatory
authority, agency, court, commission or other entity, domestic or foreign.

          Hazardous Material:  any substance or material that has been
designated by any Governmental Entity or by applicable Law to be radioactive,
toxic, hazardous, acutely hazardous, a contaminant, a hazardous or toxic
pollutant or otherwise a danger or threat to health or the environment,
including, without limitation, PCBs, asbestos, petroleum, urea-formaldehyde and
all substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the federal Resource Conservation and
Recovery Act of 1976, as amended, and the regulations promulgated pursuant to
applicable Environmental Law

          HSR Act:  the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

          Insurance Side Letter: the Insurance Side Letter from ASC and GECCT
addressed to the Seller, to be executed on the Closing Date.

          Knowledge:  with respect to a Person, the actual (and not constructive
or imputed) knowledge of such Person, and, if such Person is not a natural
person, that of any of the officers, directors, partners, members or managers of
such Person.

          Law:  any foreign, federal, state or local law (including
Environmental Laws), statute, ordinance, decree, requirement, directive, order,
judgment, rule, regulation or code.

          L/C Litigation:  means, collectively, those claims against the Company
in (a) the complaint filed by JPMorgan Chase Bank in the action styled JPMorgan
Chase Bank v. Green Country Energy, LLC, Cogentrix of Oklahoma, Inc., and
Cogentrix Energy, Inc., Case No. 02-CV-10232, District Court of the Southern
District of New York, State of New York, and (b) the complaint filed by
Bayerische Landesbank in the action styled Bayerische Landesbank v. Banca
Nazionale del Lavora, Index No. 605870/01, New York Supreme Court, Commercial
Part, and any successor or subsequent cause of action arising out of the same
subject matter.

          L/C Proceeds:  the amounts drawn by the Company under the letters of
credit provided by or on behalf of National Energy Production Corporation and
its affiliates pursuant to the engineering, procurement and construction
agreements between the Company and such Persons.

          L/C Reserve:  means the $26,824,483.51 reserved by the Seller and
pledged to the Company as collateral to secure the Seller's obligations under
the Project Indemnity Agreement to reimburse the Company for payments of all
damages, losses, claims, judgments, liabilities, fines, penalties and
settlements suffered by, levied against or payable by the Company arising out of
the L/C Litigation after all amounts in the Company L/C Proceeds Reserve have
been applied by the Company to the payment to third parties of amounts owing
with regard to such damages, losses, claims, judgments, liabilities, fines,
penalties and settlements; provided that the L/C Reserve shall be released to
the Seller without restriction upon the earlier of final settlement of, or final
payment of, all claims arising in connection with the L/C Litigation. 

          Liability:  any and all debts, liabilities, obligations and
commitments, whether asserted or unasserted, fixed, absolute or contingent,
matured or unmatured, accrued or unaccrued, liquidated or unliquidated, due or
to become due, whenever or however arising (including, without limitation,
whether arising out of any Contract or tort based on negligence, strict
liability or otherwise) and whether or not the same would be required by GAAP to
be reflected as a liability in financial statements or disclosed in the notes
thereto.

          Lien:  any charge, claim, proxy, voting trust or agreement, mortgage,
pledge, deed of trust, hypothecation, security interest, title defect, option,
easement, encroachment, obligation, understanding or arrangement which provides
for restrictions on title or transfer of any nature whatsoever.

          Loan Agreement:  that certain Loan and Reimbursement Agreement, dated
as of December 15, 1999, among the Company, the financial institutions from time
to time party thereto as Lenders, Bank of America, N.A. as Lender, Issuing Bank
and Administrative Agent, Banc of America Securities LLC as Syndication Agent
and Arranger, and Cobank, ACB as Documentation Agent and Arranger, as amended,
supplemented, or otherwise modified from time to time.

          Losses:  any costs, expenses, fees (including fees of attorneys,
accountants, and other experts), Liabilities, losses, deficiencies, obligations,
claims, damages, judgments, awards, fines, or penalties including any amounts
paid or incurred in defense or settlement of any of the foregoing or in
connection with any action, suit or proceeding, in each case net of applicable
insurance proceeds if and when received.

          Membership Interest Pledge Agreement:  a Membership Interest Pledge
Agreement in form customary for transactions similar to the Refinancing, to be
delivered by Purchaser to the Seller and the Security Agent, pledging the
ownership interests in the Company to the Security Agent, as security for the
obligations of the Company under the Refinancing.

          O&M Agreement:  the Operation and Maintenance Agreement between the
Company and the Operator, dated as of October 5, 1999.

          Operator:  Green Country Operating Services, LLC, a Delaware limited
liability company.

          Organizational Documents:  with respect to any corporation, its
articles or certificate of incorporation and by-laws; with respect to any
limited liability company, its articles or certificate of organization or
formation and its operating agreement or limited liability company agreement or
documents of similar substance; with respect to any limited partnership, its
certificate of limited partnership and partnership agreement or documents of
similar substance; and with respect to any other entity, documents of similar
substance to any of the foregoing.

          Original Purchase Agreement:  means that certain Purchase Agreement,
as amended, among the Seller, the Company and the Purchaser, dated as of
April 11, 2003.

          Permits:  any permit, license, grant, certification, approval,
exemption, waiver, application, consent, variance, order, decree, franchise,
registration, authorization, or other action taken, entered or issued by or with
any Governmental Entity.

          Permitted Liens:  (a) Liens with respect to obligations under any
applicable Project Operative Agreement, including the Lien established pursuant
to the Membership Interest Pledge Agreement, (b) Liens created by or at the
request of the Purchaser, and (c) Liens that constitute "permitted liens" under
and as defined in the Loan Agreement.

          Person:  any natural person, firm, partnership, association,
corporation, company, limited liability company, trust, business trust,
Governmental Entity or other entity.

          Project:  the collective reference to the Facility, the Site, and all
Permits, easements, servitudes and other real property interests and rights
relating to the Facility or the Site that are owned or leased by the Company or
in which the Company has any rights.

          Project Indemnity Agreement: means that certain Project Indemnity and
Security Deposit Agreement, among the Seller, the Company and the Depositary
Agent to be executed on the Closing Date, pursuant to which (a) the Seller shall
agree, subject to the terms and conditions thereof, to reimburse the Company for
certain claims arising from the L/C Litigation in an aggregate amount not to
exceed $26,195,516.49 if amounts available in the Company L/C Proceeds Reserve
are insufficient to fulfill any settlement or judgment relating to the L/C
Litigation, and (b) the Seller shall have established a reserve of 26,195,516.49
and shall have pledged such reserve as collateral to the Company to secure such
obligations.

          Project Operative Agreements:  any loan agreement entered into in
connection with a refinancing of the indebtedness under the Loan Agreement,
together with each of the Contracts listed in Schedule 3.10(a).

          Purchase Guaranty:  a guaranty in substantially the form of Annex III
hereto.

          Purchaser Guarantor:  General Electric Capital Corporation, the
guarantor of Purchaser's obligations hereunder.

          Purchaser Membership Interests:  one-hundred percent (100%) of the
issued and outstanding membership interests of Purchaser.

          Securities Act:  the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

          Security Agent:  any trustee, bailee or security agent acting on
behalf of lenders or institutions providing debt financing to the Company for
the ownership, operation, maintenance, improvement or leasing of the Project in
connection with the Refinancing (as defined in Section 6.2(h).

          Seller Guaranty:  a guaranty in substantially the form of Annex IV
hereto.

          Seller Guarantor:  Cogentrix Energy, Inc., the guarantor of Seller's
obligations hereunder.

          Seller Indemnification Agreement:  the Seller Indemnification
Agreement in substantially the form of Annex V hereto.

          Seller Indemnification Guaranty:  the Seller Indemnification Guaranty
in substantially the form of Annex VI hereto.

          Seller Material Adverse Effect:  the result of one or more facts,
events, occurrences, changes or effects which, individually or in the aggregate,
has had or could reasonably be expected to have a material adverse effect on (a)
the business, properties, assets, results of operations or financial condition
of the Company, or (b) the ability of the Seller to consummate the Transaction
or perform any of its obligations hereunder or under any Ancillary Documents.

          Seller's Advisor:  Babcock & Brown Financial, L.P.

          Seller's Interest:  the membership interests in the Purchaser to be
issued to the Seller at the Closing as part of consummation of the Transaction,
comprising, after giving effect to such issuance, ten percent (10%) of all of
the issued and outstanding membership interests in the Purchaser.

          Settlement Term Sheet:  means the term sheet attached hereto as
Schedule 6.2(v) setting forth the terms of the settlement between City of Jenks,
Oklahoma and the Company with regard to the litigation described on Part III of
Schedule 3.8.

          Site:  the land on which the Facility is located.

          Solvent:  with respect to any Person, that the value of the assets of
such Person (both at fair value and present fair saleable value) is, on the date
of determination, greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of such date and
that, as of such date, such Person is able to pay all liabilities of such Person
as such liabilities mature and does not have unreasonably small capital. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities shall be computed at the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

          Subsidiary:  with respect to any Person (for the purposes of this
definition, the "parent"), any other Person (other than a natural person),
whether incorporated or unincorporated, of which at least ten percent of the
securities or ownership interests are directly or indirectly owned or controlled
by the parent or by one or more of its respective Subsidiaries or by the parent
and any one or more of its respective Subsidiaries.

          Tax:  any federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative, minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, intangibles, social security,
unemployment, disability, payroll, license, employee or other tax or levy, of
any kind whatsoever, including any interest, penalties, or additions to tax in
respect of the foregoing.

          Tax Return:  any return, declaration, report, claim for refund,
information return or other document (including any related or supporting
estimates, elections, schedules, statements or information) filed or required to
be filed in connection with the determination, assessment, or collection of any
Tax or the administration of any Laws relating to any Tax.

          Transaction:  (a) the purchase by the Purchaser and sale by the Seller
of the Acquired Interest, (b) the effectiveness of the Amended and Restated
Operating Agreement, and (c) the issuance to Seller of the Seller's Interest, so
that, upon consummation thereof, 90%, in the aggregate, of the membership
interests in the Purchaser will be owned by ASC and GECCT and 10% of the
membership interests in the Purchaser will be owned by Seller in accordance with
the Amended and Restated Operating Agreement, and Purchaser will own 100% of the
issued and outstanding Membership Interests in the Company, all as provided for
in this Agreement.

          Uncovered Loss:  the amount of loss (net of tax benefit) suffered
after December 31, 2002 but prior to Closing by the Company as a result of
damage to, or destruction or loss of, any asset or property, which is not
covered by insurance maintained by the Company or which has not been paid in
full to Seller by any other Person.

          1.2     Cross-Reference Table.

          The following terms are defined in the indicated Sections of this
Agreement:

 

Defined Term

Section Reference

 

Affiliate

Section 3.7 (for purposes of Section 3.7 only)

 

Agreement

Preamble

 

Antitrust Division

Section 6.1(a)

 

ASC

Preamble

 

Audits

Section 3.6(a)

 

Cash Purchase Price

Section 2.1(a)

 

Closing

Section 2.2

 

Closing Date

Section 2.2

 

Company

Preamble

 

Company Permits

Section 3.5(a)

 

Easement Property

Section 3.9(a)

 

Employee Benefit Plan

Section 3.7

 

Exelon

Section 6.2(p)

 

Financial Statements

Section 3.14

 

FTC

Section 6.1(a)

 

GECCT

Preamble

 

Hazardous Materials Activities

Section 3.12(b)

 

Indemnified Party

Section 7.4(a)

 

Indemnifying Party

Section 7.4(a)

 

Leased Real Property

Section 3.9(a)

 

Membership Interests

Recitals

 

Moody's

Section 6.2(p)

 

Owned Real Property

Section 3.9(a)

 

Partsco

Section 6.2(t)

 

PECO

Section 6.2(p)

 

Purchaser

Preamble

 

Purchaser Indemnified Party

Section 7.2(a)

 

Real Property

Section 3.9(d)

 

Revised Calculations

Section 6.4

 

Refinancing

Section 6.2(h)

 

Report

Section 5.2(b)(i)

 

S&P

Section 6.2(p)

 

Seller

Preamble

 

Seller Indemnified Party

Section 7.3(a)

 

Title Policy

Section 3.9(a)

 

Third Party Claim

Section 7.4(a)

 

Third Party Expenses

Section 9.1

          1.3     Interpretation.

          In this Agreement, unless otherwise specified, the following rules of
interpretation apply:

          (a)  references to Sections, Schedules, and Annexes and parties are
references to sections or sub-sections, schedules, and annexes of, and parties
to, this Agreement;

          (b)  the section and other headings contained in this Agreement are
for reference purposes only and do not affect the meaning or interpretation of
this Agreement;

          (c)  references to any Law include references to such Law as modified,
codified, re-enacted or replaced;

          (d)  references to any Person include references to such Person's
successors and permitted assigns;

          (e)  words importing the singular include the plural and vice versa;

          (f)  words importing one gender include the other gender;

          (g)  references to the words "include" and "including" or any
iteration thereof do not imply any limitation;

          (h)  references to months are to calendar months;

          (i)  the words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not
to any particular provision of this Agreement;

          (j)  references to "$" or "dollars" refer to U.S. dollars; and

          (k)  unless the context otherwise requires: use of any of "action,"
"claim," "suit," "proceeding," "arbitration," or "mediation" includes any and
all of such terms.

ARTICLE II

SALE AND PURCHASE

          2.1     Sale and Purchase of the Acquired Interest.

          (a)  Closing Date Consideration.  Subject to the terms and conditions
of this Agreement, at the Closing, the Seller shall sell, and the Purchaser
shall simultaneously purchase, the Acquired Interest. The consideration for the
Acquired Interest shall be (i) Ninety-Seven Million Seven Thousand Five Hundred
Dollars ($97,007,500) (the "Cash Purchase Price") plus (ii) the Seller's
Interest.

          (b)  Cash Purchase Price Adjustment.  The Cash Purchase Price shall
be:

 

          (i)      adjusted, upward or downward, on the Closing Date by $150,000
for each decrease or increase, respectively, of one (1) basis point in the
interest rate for the Refinancing from 7.75%;

 

          (ii)     reduced on the Closing Date by an amount equal to any
Uncovered Loss;

 

          (iii)    reduced on the Closing Date by an amount equal to $47,500
multiplied by the number of days elapsed between April 15, 2003 and the Closing
Date;

 

          (iv)    increased on the Closing Date by an amount equal to ninety
percent (90%) of the amount of current receivables (less than thirty (30) days
past due) together with ninety percent (90%) of the amount of accrued revenue,
in each case arising under the Conversion Services Agreement, which amount shall
not exceed Five Million Five Hundred Thousand Dollars ($5,500,000), in the
aggregate;

 

          (v)     increased on the Closing Date by an amount equal to ninety
percent (90%) of any pre-paid expenses as of the Closing Date;

 

provided, that

, the Cash Purchase Price shall not exceed One Hundred and Twelve Million
Dollars ($112,000,000).

          2.2     Closing.

          The closing of the sale and purchase of the Acquired Interest (the
"Closing") shall take place at the offices of Latham & Watkins LLP, 885 Third
Avenue, New York, New York, at 9:00 a.m., New York time, as soon as practicable,
but in any event not later than five (5) Business Days after the satisfaction or
waiver of the conditions contained in Article VI, or at such other place, time
and date as the parties may agree (the "Closing Date"). At the Closing, (a) the
Seller shall deliver or cause to be delivered to the Purchaser evidence of
transfer of the Acquired Interest, (b) the Purchaser shall deliver to the Seller
by wire transfer, in immediately available funds, an amount of cash equal to the
Cash Purchase Price, and (c) the Purchaser shall deliver or cause to be
delivered the Seller's Interest to the Seller. Upon execution hereof, the
Purchaser shall deliver to the Seller the Purchase Guaranty.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE SELLER

          The Company and the Seller jointly and severally, represent and
warrant to the Purchaser as follows:

          3.1     Corporate Status, etc.

          (a)  Organization.  The Seller is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware,
and it has full corporate power and authority to own, lease and operate its
properties and to carry on its business as presently conducted. The Company is
duly organized, validly existing and in good standing under the Laws of the
State of Delaware, and has full limited liability company power and authority to
own, lease and operate its assets and properties and to carry on its business as
presently conducted. The Company is duly qualified, licensed or admitted to
transact business, and is in good standing, in all of the jurisdictions in which
the ownership, leasing or operation of its assets and properties, or the conduct
or nature of its business, makes such qualification, licensing or admission
necessary, except where the failure to be so qualified, licensed or admitted has
not had or could not, individually or in the aggregate, reasonably be expected
to have a Seller Material Adverse Effect.

          (b)  Authorization, etc.  Each of the Company and the Seller has full
corporate power and authority (i) to enter into this Agreement and the Ancillary
Documents to which it is or will be a party, (ii) to consummate the Transaction,
(iii) to consummate all other transactions contemplated by this Agreement or any
Ancillary Document to which it is or will be a party, and (iv) to perform its
obligations hereunder and thereunder. The execution, delivery and performance by
the Company and the Seller of this Agreement and each Ancillary Document to
which it is or will be a party, and the consummation by the Company and the
Seller of the Transaction and all other transactions contemplated hereby and
thereby, have been duly authorized by all requisite corporate action on the part
of the Company and the Seller, and no other corporate proceedings on the part of
the Company and the Seller are necessary to authorize this Agreement or any of
the Ancillary Documents or to consummate the Transaction or any other
transaction contemplated hereby or thereby.

          (c)  Validity.  This Agreement has been, and each Ancillary Document
to which the Company and the Seller is or will be a party has been or will be,
duly executed and delivered by the Company and the Seller, and, subject to the
satisfaction of the conditions set forth in Sections 6.1 and 6.3(e), this
Agreement constitutes, and each such Ancillary Document will constitute when
duly executed and delivered by the Seller, the valid and binding obligation of
the Company and the Seller, enforceable against the Company and the Seller in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or
hereinafter in effect relating to creditors' rights generally, and general
equitable principles (whether considered in a proceeding in equity or at law).

          3.2     Capitalization.

          (a)  Valid Title and Issuance.  The Seller directly owns, and
immediately prior to the Closing will own, one-hundred percent (100%) of the
issued and outstanding Membership Interests of the Company pursuant to valid
title, free and clear of Liens, other than Permitted Liens, and all such
Membership Interests have been validly issued and are fully paid and
nonassessable. The Seller is the sole beneficial and record owner of all such
interests, and the Company has no outstanding membership or other ownership
interests other than those owned by the Seller.

          (b)  Agreements with Respect to the Acquired Interest.  Except as
provided by the Project Operative Agreements, and except as contemplated by this
Agreement, there is no (i) voting trust or agreement, membership agreement,
pledge agreement, buy-sell agreement, right of first refusal, preemptive right,
stock appreciation right, redemption or repurchase right, antidilutive right or
proxy relating to the Acquired Interest, (ii) Contract restricting the transfer
of, or requiring the registration for sale of, the Acquired Interest (except as
to which the conditions to any transfer of the Acquired Interest will be
satisfied on or prior to the Closing Date), or (iii) option, warrant, call,
right or other Contract to issue, deliver, grant, convert, exchange, sell,
subscribe for, purchase, redeem or acquire any equity securities of the Company
or agreement to enter into any Contract with respect thereto. On and as of the
Closing Date, upon the consummation of the Transaction as provided for herein,
the Seller will deliver to the Purchaser the Acquired Interest free and clear of
any Liens, except for Permitted Liens.

          (c)  Subsidiaries.  The Company has no Subsidiaries nor any other
equity or other ownership interest in any Person, directly or indirectly.

          3.3     Conflicts; Consents.

          (a)  Conflicts.  Subject to receipt of the Consents provided for in
Sections 6.1(a), 6.1(c), 6.1(d) and 6.1(e), and satisfaction of the condition
set forth in Section 6.3(d), neither the execution and delivery by the Company
and the Seller of this Agreement or any Ancillary Document, nor the consummation
by the Company and the Seller of the Transaction,

 

          (i)     will conflict with or result in any violation of or default
under (or constitute an event that, with notice or lapse of time or both, would
constitute a default under), or give rise to a right of termination,
cancellation, modification or acceleration of any obligation, to any put or call
or similar rights, or to loss of a benefit under, any provision of:

 

          (A)     the Organizational Documents of the Seller or the Company; or

 

          (B)     any material Contract by the Company or the Seller or by which
any of its assets is bound;

 

          (ii)     will, except as provided in the Membership Interest Pledge
Agreement, result in the creation of any Lien upon the Acquired Interest or any
Lien upon any material asset or property of the Company; or

 

          (iii)     will violate in any material respect any Law to which the
Company or the Seller is subject, or by which any of the Acquired Interest, or
any of the assets of the Company or the Seller is bound.

          (b)  Consents.  No Consent of or with any Governmental Entity or third
Person is required to be obtained by the Seller or the Company prior to the
consummation of the Transaction in connection with the execution and delivery of
this Agreement by the Seller or the consummation by the Seller of the
Transaction, except (i) for the Consents provided for in Sections 6.1(a),
6.1(c), 6.1(d) and 6.1(e), and (ii) as may be required due to the regulatory
status of the Purchaser.

          3.4     Brokers and Finders.

          Except for the engagement of the Seller's Advisor with respect to the
Transaction, and as set forth in Schedule 3.4, none of the Company, the Seller
or any of their Affiliates has incurred, nor will incur, directly or indirectly,
any Liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or the Transaction.

          3.5     Company Permits; Compliance With Laws.

          (a)  Schedule 3.5(a) accurately lists each material Permit issued to
the Company by a Governmental Entity which is required for the operation or
conduct of the Company's business (including, but not limited to the Facility),
the holding of any interest in its properties and assets by the Company or the
holding of any interest in the Company by the Seller (herein collectively
referred to as the "Company Permits"). The Company Permits were duly and validly
obtained and issued and are in full force and effect, are not subject to appeal
or any other administrative or judicial review and constitute all Permits
required for the Company to operate or conduct its business or hold interest in
its properties and assets. No event has occurred and no fact exists with respect
to the Company Permits that allows, or after notice or lapse of time or both
would allow, modification, revocation or termination of any of the Company
Permits, or would result in any other impairment of the rights of the holder of
any of the Company Permits; subject in all cases to required renewals and
reissuances of Permits in accordance with their terms.

          (b)  Except as set forth in Schedule 3.5(b), the Company (i) has been
at all relevant times in the past in compliance with all applicable Laws and
Company Permits, except for any non-compliance that could not reasonably be
expected to have a Seller Material Adverse Effect, and (ii) is currently in
material compliance with all applicable Laws and Company Permits.

          (c)  Except as set forth in Schedule 3.5(c), as of the date of this
Agreement, to the Company's and Seller's Knowledge, the Company, the Seller and
the Facility have not (i) received from any Governmental Entity or other Person
any written notice of a violation, alleged violation, non-compliance, liability
or potential liability, or investigation or inquiry with respect to the
foregoing or (ii) entered into any material order or settlement with any
Governmental Entity or Person. No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Company and Seller,
threatened, under any applicable Law with respect to any property owned,
operated, occupied or leased at any time by the Seller or the Company.

          (d)  This Section 3.5 does not relate to litigation matters which are
instead the subject of Section 3.8 hereof, or property matters which are instead
the subject of Section 3.9 hereof.

          3.6     Taxes.

          (a)  The Company has timely filed (or has had timely filed on its
behalf) or will file or cause to be filed, all federal Tax Returns and all other
material Tax Returns required by applicable Law to be filed by it prior to or as
of the Closing Date. All such Tax Returns and amendments thereto are or will be
true, complete and correct in all material respects. The Company has timely paid
(or has had timely paid on its behalf) all material Taxes falling due prior to
the Closing Date. There are no Liens for Taxes upon any property or assets of
the Company, except for Liens for Taxes not yet due. No federal, state, local or
foreign audits, examinations, investigations or other administrative proceedings
(such audits, examinations, investigations and other administrative proceedings
being referred to collectively as "Audits") or court proceedings are presently
pending with regard to any Taxes or Tax Returns filed by or on behalf of the
Company, except as set forth in Schedule 3.6(a). There are no outstanding
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any Taxes or deficiencies against
the Company.

          (b)  Seller has been the sole member of the Company at all times since
the formation of the Company. The Company has not made (and has not had to make
on its behalf) any election to be treated as an association taxable as a
corporation for federal, state or local income tax purposes, and, therefore, the
Company has been disregarded as an entity separate from the Seller for federal
income tax purposes and for all relevant state and local income tax purposes at
all times since its formation.

          (c)  Immediately after consummation of the Transaction the Company's
depreciable property otherwise constituting 20-year property under Section
168(c) of the Code is "qualified Indian reservation property" within the meaning
of Code Section 168(j)(4) which pursuant to Section 168(j)(2) of the Code
qualifies for a 12-year recovery period.

          3.7     ERISA.

          Except as provided in Schedule 3.7 hereto, the Company does not
currently maintain, sponsor, participate in, or contribute to, and is not
required to contribute to, nor it ever, maintained, sponsored, participated in,
or contributed to, or been required to contribute to, any "employee benefit
plan" within the meaning of Section 3(3) of ERISA ("Employee Benefit Plan"), for
the benefit of any employee, officer or director of the Company. Except as
provided in Schedule 3.7 hereto, the Company has not incurred nor is reasonably
expected to incur any Liability under ERISA or the Code with respect to any
Employee Benefit Plan or an Affiliate which could reasonably be expected to
become a Liability of Purchaser. "Affiliate" (for purposes of this Section 3.7
only) shall mean any Person under common control with the Company within the
meaning of Section 414(b), (c), (m) or (o) of the Code. No ERISA Affiliate of
the Company or the Seller currently maintains, sponsors, participates in,
contributes to or has any liability to or obligation to contribute to, nor,
within the five year period preceding the date hereof, has any such ERISA
Affiliate or former ERISA Affiliate maintained, sponsored, participated in,
contributed to, or been required to contribute to, any Employee Benefit Plan
subject to Title IV of ERISA.

          3.8     Litigation.

          Except as set forth in Schedule 3.8, there is no action, suit, claim
or proceeding of any nature pending or to the Company's or Seller's Knowledge
threatened against the Company, the Seller, or their respective properties and
assets (including the Facility) or any of their respective officers. Except as
set forth in Schedule 3.8, the Company, the Seller and the Facility have not
entered into any material order or material settlement with any Governmental
Entity or Person. There is no investigation or inquiry pending or, to the
Company's or Seller's Knowledge, threatened against the Company, its properties
and assets (including the Facility) or any of its officers or employees by or
before any Governmental Entity. No Governmental Entity is challenging or
questioning any Company Permit or the legal right of the Company to own, operate
and maintain the Facility or conduct its operations as presently or previously
conducted. Except as set forth in Schedule 3.8, there is no pending or, to the
Knowledge of the Seller and the Company, threatened, action, suit, claim,
proceeding application, petition, objection, or other pleading with any
Governmental Entity that challenges or questions the validity of any rights of
the holder under any Company Permit.

          3.9     Property.

          (a)  Schedule 3.9(a) sets forth a list and the location of all real
property owned by the Company (the "Owned Real Property"). Schedule 3.9(a) sets
forth a list of all real property currently leased by the Company (the "Leased
Real Property"), the name of the lessor and the date of the lease and each
amendment thereto and all material easements which benefit the Owned Real
Property and the Leased Real Property (the "Easement Property"). All such leases
and easements are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such
leases or easements, any existing default or event of default as defined in such
leases (or event which with notice or lapse of time, or both, would constitute a
default) or any other encumbrance other than encumbrances scheduled on the
existing policy of title insurance issued by Fidelity National Title Insurance
Company as policy 1312-92670 (the "Title Policy"). True and complete copies of
all deeds, easements, leases, title insurance policies and surveys in possession
of the Company relating to any real property have heretofore been furnished to
the Purchaser.

          (b)  The Company has (i) good and legal title to each item of its
respective Owned Real Property, free and clear of all Liens, including Liens
arising under or pursuant to any Environmental Law, except for Permitted Liens
and (ii) valid leasehold estates in each item of Leased Real Property, free and
clear of all Liens, including Liens arising under or pursuant to any
Environmental Law on such leasehold estates, except for Permitted Liens, and
(iii) valid easement estates in each material easement which benefits the Owned
Real Property or Leased Real Property, free and clear of all Liens, except
Permitted Liens.

          (c)  The Company has good and valid title to, or in the case of leased
assets, a valid leasehold interest in, free and clear of all Liens, except
Permitted Liens, (i) all of the material tangible and intangible personal
property and assets currently used in the business of the Company and (ii) the
tangible and intangible personal property and assets reflected in the balance
sheet of the Company dated December 31, 2002, except for assets, properties and
rights disposed of in the ordinary course of business, consistent with past
practice.

          (d)  Schedule 3.9(a) sets forth the Owned Real Property, Leased Real
Property and Easement Property (collectively, the "Real Property"), which
includes all of the owned real property, leases and easements necessary or used
or held for use in connection with the business of the Company. All of the
tangible personal property used or held for use in the Company's business is,
adequate, in all material respects, for the purposes for which it is presently
being used, subject to normal wear and tear and generally accepted industry
practice with respect to maintenance. All leased personal property is, in all
material respects in the condition required of such property by the terms of the
lease applicable thereto during the term of the lease and will be upon
expiration thereof.

          (e)  The Company has not received written notice of a material
proceeding in eminent domain or other similar material proceedings affecting any
material portion of the Real Property and, to the Company's and the Seller's
Knowledge, no such proceeding is threatened.

          (f)  To the Company's and the Seller's Knowledge, (i) the improvements
located on the Real Property do not violate in any material respect any
applicable material building code, zoning requirement or classification, (ii)
the use and operation of the Real Property in conduct of the business of the
Company, as currently conducted, does not violate in any material respect any
instrument of record or agreement affecting such property, and (iii) there is no
material violation of any covenant, condition, restriction, easement or
agreement or order or law of any Governmental Entity that affects the Real
Property or the ownership, operation, use or occupancy thereof.

          3.10     Contracts.

          (a)  Except as set forth in Schedule 3.10(a), the Company is not a
party to or bound by:

 

          (i)     any material agreement, contract or commitment with any
officer, employee or member of the Company or officer, employee, director or
shareholder of the Seller or any Affiliate of the Company, the Seller or the
Seller Guarantor;

 

          (ii)     any fidelity or surety bond or completion bond;

 

          (iii)     any lease of personal property having a value individually
in excess of $200,000 per annum or $500,000 in the aggregate for all leases or
which is not cancelable by the Company without penalty within ninety (90) days;

 

          (iv)     any agreement of indemnification or guaranty;

 

          (v)     any agreement containing any covenant limiting the freedom of
the Company to engage in any line of business or compete with any Person;

 

          (vi)     any agreement relating to capital expenditures and involving
future payments in excess of $500,000, individually or $500,000, in the
aggregate;

 

          (vii)     any agreement relating to the disposition of material
assets, other than in the ordinary course of the Company's business;

 

          (viii)     any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit;

 

          (ix)     any construction contracts;

 

          (x)     any dependable capacity and conversion services agreements;

 

          (xi)     any agreements for the purchase of fuel or sale of the
Facility's output;

 

          (xii)     any operations and maintenance agreements;

 

          (xiii)     any fuel supply agreements; or

 

          (xiv)     any other agreement, contract or instrument that involves
$50,000 or more and is not cancelable by the Company without penalty within
ninety (90) days and any other material agreement that is not cancelable by the
Company without penalty within one (1) year following the Closing Date.

          (b)  Except for alleged breaches, violations and defaults, and events
that would constitute a breach, violation or default with the lapse of time,
giving of notice, or both, set forth in Schedule 3.10(b), the Company is not in
breach, violation or default under, and has not received notice that it is in
breach, violation or default under, any of the material terms or conditions of
any Project Operative Agreement or any other agreement, contract or commitment
required to be set forth in Schedule 3.10(a). Each such agreement, contract or
commitment is in full force and effect and, except as otherwise disclosed in
Schedule 3.10(b), neither the Company nor the Seller has Knowledge of any
continuing material default thereunder by any third party.

          (c)  The Seller has delivered to Purchaser true and correct copies of
all Contracts listed in Schedule 3.10(a), including all Project Operative
Agreements.

          3.11     Insurance.

          Schedule 3.11 sets forth a complete list of all insurance policies and
fidelity bonds covering the respective assets, business, equipment, properties,
operations, employees and officers of the Company, and each such policy is in
full force and effect. Since January 1, 1996, 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 3.11. Each insurance program
described as being part of a "master program" on Schedule 3.11 is part of such
program as of the date of this Agreement. There have been no claims by the
Company past or pending under any of such policies or bonds. All premiums due
and payable under all such policies and bonds have been paid to the extent due
and payable and the Company is otherwise in material compliance with the terms
of such policies and bonds (or other policies and bonds providing substantially
similar insurance coverage). Except as set forth in Schedule 3.11, no insurance
policy relating to the Company has been terminated, nor has the Company or the
Seller received any notice denying coverage under any such policy, and neither
the Company nor the Seller has any Knowledge of any threatened termination of
any of such policies.

          3.12     Environmental Matters.

          (a)  Except as set forth in Schedule 3.12(a), the Company has not:
(i) operated any underground storage tanks at any property that the Company has
at any time owned, operated, occupied or leased; or (ii) released any material
amount of any Hazardous Material, except for process, office and janitorial
supplies and other such materials utilized at, and in the operation and
maintenance of, the Facility in the ordinary course of business, in each case
properly and safely maintained in all material respects. Except as could not
reasonably be expected to result in material liability, no Hazardous Materials
are present, as a result of the actions of the Company or, to the Company's or
the Seller's Knowledge, as a result of any actions of any third party or
otherwise during the Company's ownership or occupancy of such property, in, on,
under or emanating from any property, including the land and the improvements,
ground water and surface water thereof, that the Company has at any time owned,
operated, occupied or leased, except for process, office and janitorial supplies
and other such materials utilized at, and in the operation and maintenance of,
the Facility in the ordinary course of business, in each case properly and
safely maintained in all material respects.

          (b)  Except as set forth in Schedule 3.12(b), the Company has not
transported, stored, used, manufactured, disposed of or released Hazardous
Materials (any or all of the foregoing being collectively referred to as
"Hazardous Materials Activities") in violation of any Environmental Law or
Company Permit in such manner as to result in material liability or potential
liability under any Environmental Law.

          (c)  Except as set forth in Schedule 3.12(c), to the Company's and the
Seller's Knowledge, the Company, the Seller and the Facility, are, and at all
relevant times in the past have been, in material compliance with all applicable
Environmental Laws and Company Permits except where such non-compliance could
not reasonably be expected to have a Seller Material Adverse Effect, and, to the
Company's and the Seller's Knowledge, there are no material capital expenditures
by the Company or the Seller currently required under applicable Environmental
Laws in order to maintain such compliance.

          3.13     Intellectual Property.

          To the Company's and the Seller's Knowledge, the Company owns or has
the right to use all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights which, in each case, are necessary for the
operation of its business. Nothing has come to the attention of the Company to
the effect that (a) any material product, process, method, substance, part or
other material presently contemplated to be sold by or employed by the Company
in connection with its business will infringe any patent, trademark, service
mark, trade name, copyright, license or other right owned by any other Person,
(b) there is, or there is pending or proposed, any patent, invention, device,
application or principle or any statute, law, rule, regulation, standard or code
relating to the use of technology or intellectual property by the Company which
could reasonably be expected to have a Seller Material Adverse Effect.

          3.14     Financial Statements; Absence of Undisclosed Liabilities;
                      Absence of Changes.

          (a)  The Seller has made available to the Purchaser the Company's
unaudited financial statements for the year ended December 31, 2002 (the
"Financial Statements"). The Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated, are true and correct and fairly present the Company's financial
condition as of such date and the results of operation and cash flows of the
Company for the periods ended thereby, and no material change in the Company's
financial condition has occurred since the day before the most recent balance
sheet delivered pursuant to this Agreement.

          (b)  The Company has no Liabilities other than (i) Liabilities
reflected or reserved against in the Financial Statements (or included in the
notes to the Financial Statements), (ii) Liabilities incurred in the ordinary
course of business consistent with past practice since December 31, 2002, or any
Liabilities incurred in connection with the Refinancing and satisfied in
connection with the Refinancing prior to or concurrently with Closing, and (iii)
Liabilities listed in Schedule 3.14(b).

          (c)  The Company has not suffered any Uncovered Loss in excess of
$100,000. As of the date hereof, the Company has not taken any action or omitted
to take any action since the date of the most recent balance sheet delivered
pursuant to this Agreement of the type specified in clauses (a) through (u) of
Section 5.1. Since the date of such balance sheet, there has been no change in
the Company's business that would have a Seller Material Adverse Effect.

          3.15  Books and Records.

          (a)  The books of account and minute book of the Company which have
been made available to the Purchaser (i) are accurate and complete in all
material respects and have been maintained in accordance with good business
practices and on a basis materially consistent with prior years, and (ii) are
stated in reasonable detail and accurately and fairly reflect the material
transactions and material dispositions of the respective assets of the Company.

          (b)  The minute book of the Company has been made available to counsel
for Purchaser prior to the Closing and is the only minute book of the Company
and contains an accurate summary, in all material respects, of all resolutions
of the sole member since the time of formation of the Company.

          3.16     Representations Complete.

          None of the representations or warranties made by the Seller in this
Agreement, nor any statement made in any Schedule attached hereto or certificate
furnished by the Seller pursuant to this Agreement, when taken together,
contains any untrue statement of a material fact, or omits to state any material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.

          3.17     Solvency.

          The Seller is a Solvent entity. The Seller is not subject to or
contemplating either the filing of a petition by it under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
its respective assets or property, and the Seller has no Knowledge of any Person
contemplating the filing of any such petition against it.

          3.18     Technical Information.

          To the Company's and Seller's Knowledge, the information contained in
each document identified in Schedule 3.18 was accurate in all material respects
as of the date such document was initially created.

          3.19     Financing Representations Complete.

          The representations or warranties made by the Company in the Indenture
(as defined in the Amended and Restated Operating Agreement) (a) that are
qualified as to materiality shall be true and correct, and (b) that are not so
qualified shall be true and correct in all material respects, except to the
extent that (i) any failure of such representation or warranty contained in the
Indenture to be true and correct in all material respects does not constitute an
"Event of Default" as defined in the Indenture, or (ii) the representations and
warranties made by the Company in the Indenture (A) pertain to the "Owner" as
defined in the Indenture, and (B) are inaccurate as a direct or indirect result
of (y) the ownership, direct or indirect, of the Purchaser by ASC or GECCT, or
(z) an act or omission of ASC, GECCT or any Affiliate thereof, other than the
Company.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The Purchaser represents and warrants to the Seller as follows:

          4.1     Corporate Status, etc.

          (a)  Organization.  The Purchaser is a limited liability company, duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, and has full limited liability company power and authority to own,
lease and operate its properties and to carry on its business as presently
conducted.

          (b)  Authorization, etc.  The Purchaser has full limited liability
company power and authority (i) to enter into this Agreement and each Ancillary
Document to which it is or will be a party, (ii) to consummate the Transaction
at the time specified therefor herein, (iii) to consummate all other
transactions contemplated by this Agreement or such Ancillary Document at the
time specified herein and therein and (iv) to perform its obligations hereunder
and thereunder. The execution, delivery and performance by the Purchaser of this
Agreement and each Ancillary Document to which it is or will be a party, and the
consummation by the Purchaser of the Transaction and all other transactions
contemplated hereby and thereby, have been duly authorized by all requisite
limited liability company action on the part of the Purchaser and no other
limited liability company proceedings on the part of the Purchaser, are
necessary to authorize this Agreement or any of the Ancillary Documents or to
consummate the Transaction or any other transaction contemplated hereby or
thereby.

          (c)  Organizational Documents.  The Purchaser has made available to
the Seller complete and correct copies of its Organizational Documents, as in
full force and effect on the date of this Agreement.

          (d)  Validity.  This Agreement has been, and each Ancillary Document
to which the Purchaser is or will be a party will be, duly executed and
delivered by the Purchaser, and this Agreement constitutes, and each such
Ancillary Document to which it is or will be a party will constitute when so
duly executed by the Purchaser, the valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar Laws now or hereinafter in effect
relating to creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law).

          4.2     Capitalization.

          (a)  Valid Title and Issuance. ASC and GECCT directly own, and
immediately prior to the Closing will own, one hundred percent (100%) of the
issued and outstanding membership interests of the Purchaser pursuant to valid
title, free and clear of Liens, and all such membership interests have been
validly issued and are fully paid and non-assessable. As of the date hereof, ASC
and GECCT are, and immediately prior to the Closing ASC and GECCT will be, the
sole beneficial and record owner of all such interests, and the Purchaser has,
and immediately prior to the Closing will have, no outstanding membership or
other ownership interests other than those owned by ASC and GECCT.

          (b)  Agreements With Respect to the Seller's Interest. Except as
contemplated by this Agreement, there is no (i) voting trust or agreement,
membership agreement, pledge agreement, buy-sell agreement, right of first
refusal, preemptive right, stock appreciation right, redemption or repurchase
right, antidilutive right or proxy relating to the Seller's Interest or any
interest in the Purchaser, (ii) Contract restricting the issuance of, or
requiring the registration for sale of, the Seller's Interest (except as to
which the conditions to the issuance of the Seller's Interest will be satisfied
on or prior to the Closing Date), or (iii) option, warrant, call, right or other
Contract to issue, deliver, grant, convert, exchange, sell, subscribe for,
purchase, redeem or acquire any equity interest of the Company or agreement to
enter into any Contract with respect thereto. On and as of the Closing Date,
upon the consummation of the Transaction as provided for herein, the Purchaser
will issue and deliver to the Seller the Seller's Interest free and clear of any
Liens.

          4.3     Conflicts; Consents.

          (a) Conflicts.  Neither the execution and delivery by the Purchaser of
this Agreement or any Ancillary Document to which it is or will be a party, nor
the consummation by the Purchaser of the Transaction,

 

          (i)      will conflict with or result in any violation of or default
under (or constitute an event that, with notice or lapse of time or both, would
constitute a default under), or give rise to a right of termination,
cancellation, modification or acceleration of any obligation, to any put or call
or similar rights, or to loss of a benefit under, any provision of:

 

                    (A)     the Organizational Documents of the Purchaser, or

 

                    (B)     any Contract by which the Purchaser or any of its
assets is bound, except for such conflicts, violations, defaults, rights of
termination, cancellation, modification or acceleration, or losses of benefits,
that would not, individually or in the aggregate, reasonably be expected to have
a material adverse effect on the Purchaser; or

 

          (ii)     will violate any Law to which the Purchaser is subject,
except for violations which could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the Purchaser.

          (b) Consents.  Except for the Consents provided for in Sections 6.1(a)
and 6.1(c), no Consent of or with any Governmental Entity or third Person is
required to be obtained by the Purchaser prior to the consummation of the
Transaction in connection with the execution and delivery of this Agreement or
any Ancillary Document by the Purchaser or the consummation by the Purchaser of
the Transaction.

          4.4     Financing.

          The Purchaser currently has access to sufficient immediately available
funds in cash or cash equivalents and at the Closing will have sufficient
immediately available funds, in cash, to pay the Cash Purchase Price and to pay
all other amounts payable pursuant to this Agreement.

          4.5     Brokers and Finders.

          None of the Purchaser or any of its Affiliates has engaged any broker,
finder or agent in connection with the Transaction so as to give rise to any
claim against the Seller, any of its Affiliates, or the Company, for any
brokerage or finder's commission, fee or similar compensation.

          4.6     Purchase for Investment.

          (a)  The Purchaser is acquiring the Acquired Interest for investment
and not with a view toward, or for sale in connection with, any resale or
distribution thereof, nor with any present intention of distributing or selling
the Acquired Interest except in compliance with the Securities Act.

          (b)  The Purchaser is able to bear the economic risk of holding the
Acquired Interest for an indefinite period, and has knowledge and experience in
financial and business matters such that it is capable of evaluating the risks
of the investment in the Acquired Interest.

          4.7     Business of Purchaser.

          The Purchaser has been formed for the purpose of engaging in the
transactions contemplated hereby and by the Ancillary Documents and to own
directly the Company following the Closing. The Purchaser has not engaged in any
business or activity of any type or kind other than in connection with this
Agreement, the transactions contemplated hereby or the Ancillary Agreements, and
activities in connection with or in furtherance thereof. At the time of Closing,
the Purchaser will have no assets or liabilities except in connection with or in
furtherance of the foregoing.

          4.8     Information and Investigation.

          The Purchaser acknowledges that it has conducted to the extent it
deems it necessary, an independent investigation, review and analysis of the
business, operations, assets, liabilities, results of operations, financial
condition, software, technology and prospects of the Company which
investigation, review and analysis was done by Purchaser and its Affiliates and,
to the extent Purchaser deemed appropriate, by Purchaser's representatives.
Purchaser acknowledges that it and its representatives have had the opportunity
to receive such information as, in its judgment, are necessary for it to make an
informed investment decision. In entering into this Agreement, Purchaser
acknowledges that it has relied solely upon its investigation, review and
analysis and not on any factual representations or opinions of the Seller or any
of Seller's representatives (except the specific representations and warranties
of Seller and the Company set forth in Article III of this Agreement and the
schedules thereto), and Purchaser further acknowledges that, except for the
representations and warranties of Seller and the Company set forth herein,
neither Seller, the Company nor any of their respective directors, officers,
shareholders, members, employees, Affiliates, controlling persons, agents,
advisors or representatives makes or has made any oral or written representation
or warranty, either express or implied, as to the accuracy or completeness of
any of the information (including any estimates, projections, forecasts,
operating plans or budgets concerning financial or other information relating to
the Company) provided or made available to the Purchaser or their respective
directors, officers, employees, Affiliates, controlling persons, agents or
representatives (including (i) in the Confidential Equity Information Memorandum
dated August 2002 relating to the Company, (ii) in materials furnished in
Seller's data room, (iii) in presentations by the Seller's or the Company's or
their respective Affiliates' management or (iv) otherwise).

          4.9     Litigation.

          There is no action, suit, claim or proceeding of any nature pending or
to the Purchaser's Knowledge threatened against the Purchaser by or before any
Governmental Entity that would reasonably be expected to impede the ability of
the Purchaser to consummate the Transaction.

          4.10     Taxes.

          The Purchaser has not made (and has not had made on its behalf) any
election to be treated as an association taxable as a corporation for federal,
state or local income tax purposes, and, therefore, the Purchaser has been a
partnership for federal income tax purposes and for all relevant state and local
income tax purposes at all times since its formation.

          4.11     Representations Complete.

          None of the representations or warranties made by the Purchaser in
this Agreement, nor any statement made in any Schedule attached hereto or
certificate furnished by the Purchaser pursuant to this Agreement, when taken
together, contains any untrue statement of a material fact, or omits to state
any material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.

ARTICLE V

COVENANTS

          5.1     Conduct of Business.

          From the date of this Agreement to the earlier of the termination of
this Agreement or the Closing, except (a) for entering into and performing this
Agreement, (b) for the effect of the consummation of the Transaction or any
other transaction contemplated by this Agreement and the Ancillary Documents, or
(c) as otherwise consented to by the Purchaser in writing, which consent shall
not be unreasonably withheld or delayed, the Seller shall cause the Company to,
and the Company shall, conduct its business, including the operation,
maintenance and repair of its assets and properties, in the ordinary course and
substantially consistent with past practices. In furtherance of the foregoing
provisions of this Section 5.1, but without limiting the foregoing, except as
expressly contemplated by this Agreement or the Project Operative Agreements,
the Seller shall not permit the Company, without the prior written consent of
Purchaser (except to the extent any such action is required or permitted under
the Contracts identified in Schedule 3.10(a)), to:

          (a)  Modify or amend in any material respect, or terminate, or assign
any of the Project Operative Agreements or any other material Contract to which
the Company is a party, or waive, release or assign any material rights or
claims thereunder, except in the ordinary course of business, or violate any
material term of any such material Contract unless any such violation shall be
cured on or prior to the Closing Date without material liability to the Company;

          (b)  Declare, set aside or pay any distributions (whether in cash,
stock or property) in respect of any Membership Interests, except for cash
distributions permitted pursuant to the Project Operative Agreements and cash
available to be distributed to the Seller subject to Section 6.2(v),
simultaneously with the Closing, or as otherwise provided pursuant to the terms
of this Agreement, or split, combine or reclassify any Membership Interests or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for any Membership Interests;

          (c)  Issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase, redeem or otherwise acquire
or propose the purchase, redemption or acquisition of, any Membership Interests
or options, warrants, calls, rights, exchangeable or convertible securities,
commitments or agreements of any character, written or oral, obligating the
Company to issue, deliver, sell, repurchase, redeem or otherwise acquire, or
cause to be issued, delivered, sold, repurchased, redeemed or otherwise
acquired, any Membership Interests;

          (d)  Cause or permit any material amendments to its Organizational
Documents;

          (e)  Acquire or agree to acquire by merging or consolidating with, or
by purchasing any assets or equity securities of, or by any other manner, any
business or any Person or other business organization or division thereof, or
otherwise acquire or agree to acquire outside of the ordinary course of business
and materially consistent with past practices any assets in any material amount;

          (f)  Sell, lease, license or otherwise dispose of any of its
properties or assets, except in the ordinary course of business;

          (g)  Incur any indebtedness for borrowed money (other than trade
payables incurred in the ordinary course of business) or guarantee any such
indebtedness or issue or sell any debt securities of the Company or guarantee
any debt securities of others;

          (h)  Grant any severance or termination pay in excess of $50,000
(i) to any director or officer or (ii) to any other employee except, in each
case, payments made pursuant to written agreements outstanding on the date
hereof disclosed in Schedule 3.10(a);

          (i)  Pay or commit to pay any bonus or other incentive compensation to
any officer, director or other employee or grant (or commit to grant) to any
officer, director or employee any other increase in compensation or benefits,
except salary, incentive compensation, and profit sharing participation
increases all in the ordinary course of business consistent with past practices;

          (j)  Enter into, adopt or amend (or commit to enter into, adopt or
amend) any employment, retention, change in control, collective bargaining,
deferred compensation, severance, retirement, bonus, profit-sharing, stock
option or other equity, pension or welfare plan or agreement maintained for the
benefit of any officer, director or employee, except as required by law;

          (k)  Except as required by GAAP, make any material change in its
accounting principles or the methods by which such principles are applied for
financial accounting purposes;

          (l)  Pay, discharge or satisfy any claim, Liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business;

          (m)Make or change any material election in respect of Taxes (including
without limitation, any election to be treated as an association taxable as a
corporation for federal, state or local tax purposes), adopt or change any
accounting method or period in respect of Taxes, enter into any tax-sharing,
allocation, compensation or like agreement, settle any claim or assessment in
respect of Taxes, request or any tax ruling or consent to any extension or
waiver of the limitation period applicable to any claim or assessment in respect
of Taxes;

          (n)  Enter into any strategic alliance or joint venture;

          (o)  Repay any indebtedness for borrowed money, except as required by
existing debt instruments;

          (p)  Except as disclosed in the budgets provided to the Purchaser
prior to the date hereof, make capital expenditures;

          (q)  Loan money to any Person unless the amount of such loan, together
with all such loans made, taken as a whole, is less than $50,000 or forgive or
extend the date for payment or otherwise modify any material terms of any
material loan;

          (r)  Agree or consent to any matter in connection with any proceeding
by or before any Governmental Entity other than in the ordinary course of
business;

          (s)  (i) Enter into any agreement or arrangement with any director or
officer of the Seller or the Company or any direct or indirect Affiliate of any
one or a group of the foregoing, or (ii) modify any such arrangement;

          (t)  Change its methods or practices in managing working capital in a
manner inconsistent with the methods and practices disclosed by Seller to
Purchaser prior to the execution and delivery of this Agreement; or

          (u)  Enter into any agreement or otherwise commit to take any actions
described in the foregoing clauses.

          5.2     Efforts to Consummate Transaction.

          Each of the parties hereto shall use commercially reasonable efforts
to take or cause to be taken all actions required to be taken by it to
consummate the Transaction and all other transactions contemplated by this
Agreement and the Ancillary Documents, including the following:

          (a)  Each of the parties hereto shall file or supply, or cause to be
filed or supplied, as soon as reasonably practicable following the execution of
this Agreement, all material applications, notifications and information
required to be filed or supplied by it pursuant to applicable Law or this
Agreement in connection with the Transaction and all other transactions
contemplated by this Agreement or any Ancillary Document.

          (b)  In furtherance of Section 5.2(a), but without limitation:

 

          (i)     the Purchaser and the Seller shall prepare and file, or cause
to be filed, any notification and report form (each, a "Report") required to be
filed by it under the HSR Act with respect to the consummation of the
Transaction, as soon as reasonably practicable following the execution of this
Agreement;

 

          (ii)     each party hereto shall, as soon as reasonably practicable
following the execution of this Agreement, cooperate with the other parties in
making any filings required for the Company (a) to dispose of
FERC-jurisdictional facilities under section 203 of the FPA, and (b) to reflect
a change in status under section 205 of the FPA.

 

          (iii)     each party hereto shall promptly inform the other parties of
any communications from any Governmental Entity regarding the Transaction and,
following consultation with the other parties regarding an appropriate response,
promptly comply in good faith with any request for additional information or
documentary material, and each such other party shall cooperate with and assist
such party in complying with any such request; and

 

          (iv)     each party hereto shall contest, to the extent commercially
reasonable, any action, claim or suit seeking to have imposed any order, decree,
judgment, injunction, ruling or order (whether temporary, preliminary, or
permanent) that would prevent or materially delay the consummation of the
Transaction.

          (c)  Each of the parties hereto shall use its commercially reasonable
efforts to promptly obtain, and shall cooperate with each other in obtaining,
all Consents from Governmental Entities and third Persons required to be
obtained as a condition to consummation of the Transaction, including those
Consents set forth in Schedule 6.1(d).

          (d)  None of the parties hereto shall enter into or complete any
transactions that could reasonably be expected to delay, hinder or prohibit the
consummation of the Transaction, including failure of the condition contained in
Section 6.1(a) to be satisfied.

          (e)  The Seller and the Company shall use commercially reasonable
efforts to maintain any and all currently existing Company Permits and shall
obtain any necessary renewals of Company Permits or reissuance of Company
Permits in connection with the ordinary course of business, and the Company
shall be responsible for any applicable fees associated with such renewals or
reissuance of any Company Permits prior to Closing.

          5.3     Access and Information.

          (a)  Prior to the Closing, the Seller shall, and shall cause the
Company to, (i) provide the Purchaser, upon reasonable notice, with access,
during regular business hours, to the offices, properties, employees,
consultants, and books and records of or relating to the Company and its
business as the Purchaser may reasonably request, subject to Purchaser's
compliance with all safety rules and regulations in effect at the Facility,
(ii) respond to the Purchaser's reasonable requests for information and
documentation regarding the Company, and (iii) provide Purchaser promptly after
they become available, the monthly operating reports of the Company; provided,
that, (1) the Purchaser shall not conduct any environmental site assessment,
compliance evaluation or investigation with respect to the Company without prior
written approval from the Seller and without ongoing consultation with the
Seller with respect to any such approved activity and (2) the Seller shall
provide to the Purchaser information with respect to any proposed regulatory
filing and shall consult with the Purchaser with respect thereto.

          (b)  The Purchaser, its agents and Affiliates and any of their
respective employees, directors and officers shall not contact or communicate
with the customers, suppliers, lenders and licensors of the Seller and its
Affiliates in connection with the Transaction other than with the prior written
consent of the Seller which shall not be unreasonably withheld or delayed.

          5.4     Publicity.

          (a)  Except as required by applicable Law or rules of any relevant
securities exchange, none of the parties shall, directly or indirectly, make or
cause to be made any public announcement or issue any public notice in respect
of this Agreement or the Transaction without the prior written consent of the
other parties.

          (b)  Prior to the Closing, the parties shall consult with each other
prior to issuing any press release or otherwise making any public statement with
respect to the Transaction and prior to making any filings with any Governmental
Entity or with any relevant securities exchange with respect to the Transaction.

          5.5     Transfer Taxes.

          The Purchaser shall be liable for 50% and the Seller shall be liable
for 50% of all transfer, stamp, documentary, sales, use and similar Taxes
arising from the Transaction. The Purchaser shall file in a timely fashion all
Tax Returns relating to such Taxes, unless the Seller is otherwise required by
Law to do so (in which case the Seller shall file such Tax Returns in a timely
fashion).

          5.6     Notification of Certain Matters.

          Each party shall give prompt notice to the other parties of (a) the
occurrence or non-occurrence of any event that has caused or is reasonably
likely to cause, with the passage of time, giving of notice, or otherwise, any
representation or warranty of such party contained in this Agreement to be
untrue or inaccurate at or prior to the Closing and (b) any failure of such
party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided that the delivery of notice
pursuant to this Section 5.6 shall not limit or otherwise affect the rights or
obligations hereunder of, or remedies available hereunder to, any party.

          5.7     Tax Matters.

          Any refunds or credits of Taxes of the Company relating to the period
prior to the Closing Date (plus any interest received with respect thereto and
including, without limitation, refunds or credits arising from amended returns
filed on or after the Closing Date), shall be for the account of the Seller and,
if received by the Purchaser or its Affiliates, shall be paid to the Seller
within ten days after received by the Purchaser or such Affiliate.

          5.8     Refinancing.

          The Purchaser shall make itself available to, and reasonably cooperate
with, the Seller in connection with effecting the Refinancing (as defined in
Section 6.2(h)); provided that the obligations of the Purchaser under this
Section 5.8 shall not reduce or otherwise affect the Purchaser's rights under
Section 6.2(h).

          5.9     Conversion Services Agreement Consent.

          The Purchaser's execution of this Agreement shall constitute its
consent to be bound by the confidentiality provisions contained in Section 21.9
of the Conversion Services Agreement as of the Closing Date.

          5.10     Transfer of Seller's membership interests in Operator.

          The Seller shall not transfer all its membership interests in the
Operator to any other Person for so long as the O&M Agreement remains in effect,
unless concurrently with such transfer the Seller causes the Operator to
(i) execute and deliver to the Company covenants regarding the Operator's
separate existence in a manner consistent with those set forth on
Schedule 6.2(t), (ii) amend its Organizational Documents in accordance with
Schedule 6.2(t), and (iii) elect an Independent Director (as defined in its
Organizational Documents, as so amended) upon such transfer. The Seller hereby
agrees that a transfer of membership interests in violation of this Section 5.10
shall render such transfer null and void.

ARTICLE VI

CONDITIONS TO CLOSING

          6.1     Conditions to the Obligations of the Seller and the Purchaser.

          The obligations of the parties hereto to consummate the Transaction
shall be subject to the satisfaction or waiver by the benefiting party, on or
prior to the Closing, of each of the following conditions:

          (a)  The Purchaser and the Seller shall have filed any Report required
under the HSR Act to be filed by it with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the United States Department of Justice
(the "Antitrust Division"), and the waiting period required by the HSR Act shall
have expired or been terminated by the FTC and/or the Antitrust Division or a
consent order shall have been issued by the FTC and/or the Antitrust Division.

          (b)  There shall not have been issued and be in effect any applicable
Law that prohibits the consummation of the Transaction or makes the consummation
of the Transaction illegal.

          (c)  A FERC order, pursuant to Section 203 of the FPA, for changes in
control over FERC-jurisdictional facilities permitting the consummation of the
transactions contemplated by this Agreement shall have been obtained.

          (d)  All Consents from each of the Persons set forth in Schedule
6.1(d) hereto shall have been obtained.

          (e)  All Consents and notifications with respect to the Company
Permits set forth in Schedule 6.1(e) hereto shall have been obtained.

          (f)  No preliminary or permanent injunction, temporary restraining
order or other decree of any Governmental Entity and no action, suit or
proceeding by, or before, any Governmental Entity shall have been instituted
that challenges this Agreement or seeks to prohibit or materially restrain the
consummation of the Transaction.

          6.2     Conditions to the Obligations of the Purchaser.

          The obligations of the Purchaser to consummate the Transaction shall
be subject to the satisfaction or waiver by the Purchaser on or prior to the
Closing Date of each of the following conditions:

          (a)  Each of the representations and warranties of the Company and the
Seller contained in Article III (i) that are qualified as to materiality shall
be true and correct and (ii) that are not so qualified shall be true and correct
in all material respects when made and as of the Closing Date (except to the
extent that any such representation or warranty relates to a specified date, in
which case such representation or warranty shall be true and correct as of such
date).

          (b)  Each of the covenants and agreements of the Seller contained
herein and in the Ancillary Documents to be performed on or prior to the Closing
Date shall have been performed in all material respects.

          (c)  The Purchaser shall have received at the Closing a certificate
certifying as to the matters set forth in Sections 6.2(a) and (b), dated as of
the Closing Date and executed on behalf of the Seller and the Company by an
Authorized Officer of the Seller and the Company.

          (d)  The Purchaser shall have received at the Closing a certificate
certifying as to (i) the Organizational Documents of the Seller and the Company,
(ii) resolutions of the board of directors of the Seller approving the sale of
the Acquired Interest, and (iii) the incumbency of relevant officers of the
Seller and the Company.

          (e)  The Seller shall have executed and delivered to the Purchaser the
Amended and Restated Operating Agreement.

          (f)  The Seller shall have delivered to the Purchaser a certificate or
certificates, evidencing the Acquired Interest, duly endorsed in blank or
accompanied by appropriate instruments of transfer in proper form for transfer,
accompanied by any requisite transfer stamps (at the Purchaser's expense), which
certificate or certificates shall be delivered by the Purchaser to the Security
Agent pursuant to Section 6.3(d).

          (g)  All Company Permits and any then-necessary renewals or
reissuances of such Company Permits shall be in full force and effect.

          (h)   All of the conditions precedent to the refinancing of the Loan
Agreement upon the terms set forth in Schedule 6.2(h) (the "Refinancing") shall
have been fulfilled, and upon such other terms as are satisfactory to the
Purchaser in its sole discretion, it being understood that terms set forth on
Schedule 6.2(h) that are referred to as "usual", "customary", "standard", "in
form and substance satisfactory," "to be agreed in the Financing Documents" or
"to be agreed to by the senior lenders" or the like shall be satisfactory to the
Purchaser in its sole discretion, and the Refinancing shall take effect
immediately after consummation of the Transaction.

          (i)  No event, condition or circumstance shall have occurred since the
date of this Agreement and shall exist that, individually or in the aggregate,
has a Seller Material Adverse Effect.

          (j)  No action or proceeding by or before any court or other
Governmental Entity shall have been commenced and be pending, and no such action
or proceeding shall be threatened by a Governmental Entity, that in the
reasonable judgment of the senior management of the Purchaser is reasonably
likely to lead to an action or proceeding to restrain or challenge the
Transaction or to result in the imposition of material Liability on the
Purchasers or the Acquired Interest if the transaction is consummated.

          (k)  At least one business day prior to Closing, the Company and the
Seller shall have delivered to the Purchaser the unaudited balance sheet of the
Company as of the most recent practicable date preceding the Closing, prepared
in accordance with GAAP, except for non-material period-end adjustments (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be accompanied by an
officer's certificate of the chief financial officer of the Company certifying
that such balance sheet was prepared on a basis consistent with the balance
sheets for the Company delivered to the Purchaser at the time of execution and
delivery of this Agreement.

          (l)  The Seller shall have contributed at least 10% of the difference
between the amounts outstanding under the Loan Agreement on the Closing Date
immediately prior to the Refinancing and the net proceeds received from the
Refinancing.

          (m)  The Seller shall have (i) delivered to the Purchaser the Seller
Guaranty executed by the Seller Guarantor, (ii) delivered to the Purchaser the
Seller Indemnification Agreement executed by the Seller, (iii) delivered to the
Purchaser the Seller Indemnification Guaranty executed by Cogentrix, (iv)
delivered to the Purchaser the Undertaking Agreement executed by the Purchaser
and the Company, and (v) established the L/C Reserve.

          (n)  The Seller shall have delivered to the Purchaser a legal opinion
dated the Closing Date from (i) Latham & Watkins LLP, special transactional
counsel to Seller, the Company and Seller Guarantor, substantially in the form
attached as Exhibit I hereto, (ii) Moore & Van Allen PLLC, counsel to Seller,
the Company and Seller Guarantor, substantially in the form attached as Exhibit
II hereto, (iii) Van Ness Feldman, regulatory counsel to the Seller and the
Company, substantially in the form attached as Exhibit III hereto, (iv) Boesche,
McDermott & Eskridge LLP, local counsel to the Seller and the Company,
substantially in the form attached as Exhibit IV hereto and (v) Moore & Van
Allen PLLC, tax counsel to Seller and the Company, substantially in the form
attached as Exhibit V hereto.

          (o)  The Company shall not have changed its methods or practices in
managing or accounting for working capital in a manner inconsistent with its
methods or practices except as set forth in Schedule 6.2(o) prior to execution
of this Agreement.

          (p)   The senior unsecured credit rating of PECO Energy Company
("PECO") shall be at least BBB by Standard & Poor's, a division of the
McGraw-Hill Companies, Inc. ("S&P") and PECO's long-term issuer rating shall be
at least Baa1 by Moody's Investors Service ("Moody's") and the senior unsecured
credit rating of Exelon Generating Company, LLC ("Exelon") shall be at least
BBB+ by S&P and at least Baa2 by Moody's.

          (q)  The Company shall have entered into the First Amendment to O&M
Agreement.

          (r)  The Company shall have delivered to the Purchaser all monthly
bank statements for its revenue account and operating account since October 1,
2002, including the last reasonably available such bank statement before the
Closing Date.

          (s)  None of the Seller, Cogentrix or Cogentrix Parts Company, Inc.
("Partsco") shall have become subject to a Bankruptcy Event.

          (t)  Each of the Seller and Partsco shall have (i) amended their
respective Organizational Documents in accordance with Schedule 6.2(t) and (ii)
elected an Independent Director (as defined in their respective Organizational
Documents as so amended); and Seller shall have executed and delivered to the
Company covenants regarding the Seller's separate existence as set forth on
Schedule 6.2(t),

          (u)  The litigation described on Part III of Schedule 3.8 shall have
been settled pursuant to a settlement agreement substantially in accordance with
the terms of the Settlement Term Sheet.

          (v)  The Company shall have retained cash sufficient to cover payables
and accrued liabilities as of the Closing Date (excluding liabilities relating
to the L/C Proceeds and any claims with respect thereto).

          (w)  The Company shall have delivered to the Purchaser audited
financial statements for the year ended December 31, 2002 and such audited
financial statements shall be consistent with the Financial Statements in all
material respects.

          (x)  On or prior to June 6, 2003, an agreement shall have been reached
by Cogentrix and Purchaser Guarantor regarding the restructuring of the debt and
equity of Caledonia Generating, LLC in a manner satisfactory to Purchaser
Guarantor in its sole discretion; provided that if agreement regarding such
satisfactory restructuring has not been reached and Seller has not received from
Purchaser on or before June 6, 2003, a written notice that this condition will
not be waived, this condition shall be deemed waived by Purchaser; provided,
further, that any failure to reach a satisfactory agreement as required by this
Section 6.2(x) shall not be deemed a failure by Seller or Purchaser, pursuant to
Section 9.1, to diligently pursue the satisfaction of the closing conditions of
this Agreement, and shall not give rise to an obligation for the payment of
expenses by Purchaser or Seller thereunder.

          6.3     Conditions to the Obligation of the Seller.

          The obligation of the Seller to consummate the Transaction shall be
subject to the satisfaction or waiver by the Seller on or prior to the Closing
Date of each of the following conditions:

          (a)  Each of the representations and warranties of the Purchaser
contained in Article IV (i) that are qualified as to materiality shall be true
and correct and (ii) that are not so qualified shall be true and correct in all
material respects when made and as of the Closing Date (except to the extent
that any such representation or warranty relates to a specified date, in which
case such representation or warranty shall be true and correct as of such date).

          (b)  Each of the covenants and agreements of the Purchaser contained
herein and in each of the Ancillary Documents to be performed on or prior to the
Closing Date shall have been performed in all material respects.

          (c)  The Seller shall have received at the Closing a certificate
certifying as to the matters set forth in Sections 6.3(a) and (b), dated as of
the Closing Date and executed on behalf of the Purchaser by an Authorized
Officer of the Purchaser.

          (d)  The Purchaser shall have executed and delivered to the Seller and
the Security Agent the Membership Interest Pledge Agreement and shall, pursuant
to the terms thereof, simultaneously with the Closing, deliver the membership
certificate evidencing the Acquired Interest to the Security Agent.

          (e)  The Purchaser shall have paid the Cash Purchase Price in
accordance with Section 2.1.

          (f)  The Purchaser shall have delivered to the Seller a certificate or
certificates, evidencing the Seller's Interest, duly endorsed in blank or
accompanied by appropriate instruments of transfer in proper form for transfer,
accompanied by any requisite transfer stamps (at the Seller's expense).

          (g)  ASC and GECCT shall have contributed to the Purchaser, in the
aggregate, the lesser of (i) 90% of the difference between the amounts
outstanding under the Loan Agreement on the Closing Date immediately prior to
the Refinancing and the net proceeds received from the Refinancing and
(ii) $31,433,000, which contribution shall have, in turn, been contributed by
the Purchaser to the Company in connection with the Refinancing.

          (h)  No action or proceeding by or before any court or Governmental
Entity shall have been commenced and be pending, and no such action or
proceeding shall be threatened by a Governmental Entity, and, that in the
reasonable judgment of the Board of Directors of Seller is reasonably likely to
lead to an action or proceeding to restrain or challenge the Transactions or to
result in the imposition of material Liability on Seller if such transactions
are consummated.

          (i)  The Purchaser shall have delivered to the Seller a legal opinion
dated the Closing Date from (i) Chadbourne & Parke LLP, special counsel to
Purchaser and Purchaser Guarantor, substantially in the form attached as Exhibit
VI hereto and (ii) Bond K. Koga, counsel to Purchaser and Purchaser Guarantor,
substantially in the form attached as Exhibit VII hereto.

          (j)  The amount of equity the Seller is obligated to contribute
pursuant to Section 6.2(l) shall not have exceeded Four Million Dollars
($4,000,000).

          (k)  ASC and GECCT shall have executed and delivered to the Seller (i)
the Amended and Restated Operating Agreement, (ii) the Seller Indemnification
Agreement, and (iii) the Insurance Side Letter.

          6.4     Condition Subsequent.

          On or prior to the date that is thirty (30) days following the Closing
Date, the Seller shall deliver to Purchaser revised calculations of the amounts
set forth in Sections 2.1(b)(iv), 2.1(b)(v) and 6.2(v) together with reasonable
backup financial information for such calculations (the "Revised Calculations").
ASC and GECCT shall review the Revised Calculations and unless ASC and GECCT,
dispute the accuracy of the Revised Calculations or request additional
information with respect thereto in a written notice addressed to the Seller
within ten (10) Business Days after receipt of the Revised Calculations, the
Revised Calculations shall be deemed final. If ASC and GECCT dispute the
accuracy of the Revised Calculations, such dispute shall be resolved in
accordance with the dispute resolution provisions set forth in Article 10 of the
Amended and Restated Operating Agreement. Once the Revised Calculations have
become final in accordance with the provisions set forth above, within three (3)
Business Days the Seller shall pay ASC and GECCT, or ASC and GECCT shall pay
Seller, as applicable, the lesser of (x) the net-amount owed pursuant to the
Revised Calculations and (y) $250,000; provided that, to the extent that, as a
result of manifest error in the initial calculations of amounts set forth in
Sections 2.1(b)(iv), 2.1(b)(v) and 6.2(v), the Revised Calculations result in a
net payment owed by ASC and GECCT or Seller, as applicable, pursuant to the
Revised Calculations which exceeds $250,000, the limitation in clause (y) of the
foregoing sentence shall not apply.

ARTICLE VII

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

          7.1     Survival of Representations, Warranties and Covenants.

          (a)     All of the Purchaser's and the Seller's representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Closing Date and continue until 5:00 p.m., Eastern
Standard Time, on the date which is twenty one months following the Closing
Date, and not thereafter, provided that (i) the Seller's representations with
regard to the representation contained in Section 3.6(c) shall survive following
the Closing Date until the expiration of all statutes of limitations with
respect to claims brought by the relevant taxing authorities with respect to the
fourth full fiscal year of the Company following the Closing Date, and not
thereafter and (ii) the Seller's representation in Section 3.2 and the
provisions of Section 5.4 will survive without limitation; provided, however,
that if a claim is properly made under this Article VII with respect to any
representation or warranty prior to the applicable expiration date, if any, such
claim may be pursued to resolution notwithstanding expiration of the
representation or warranty under which the claim was brought.

          7.2     Indemnification by the Seller.

          (a)  Subject to Section 7.2(b), the Seller hereby agrees to indemnify,
defend and hold harmless the Purchaser, its officers, directors, agents and
Affiliates (other than the Company) (each, a "Purchaser Indemnified Party") from
and against any Losses incurred by such Purchaser Indemnified Party directly or
indirectly as a result of:

 

          (i)  any inaccuracy in, or breach of, a representation or warranty of
the Seller or the Company contained herein (or in any certificate, instrument,
schedule or document attached to this Agreement and delivered by the Seller or
the Company pursuant to this Agreement); and

 

          (ii)  any failure by the Seller or the Company to perform or comply
with any of its covenants contained herein or in any Ancillary Document.

          (b)  The Seller shall have no Liability in the case of a claim by any
Purchaser Indemnified Party under Section 7.2(a) unless and until, and then only
to the extent that, such Purchaser Indemnified Party has suffered or incurred
Losses consisting of actual damages aggregating in excess of one percent (1%) of
the Cash Purchase Price, whereupon such Purchaser Indemnified Party shall be
entitled to claim indemnification for the amount of all Losses, including those
less than and in excess of such amount. In no event shall the aggregate
liability of the Seller under Section 7.2(a) exceed seventy-five percent (75%)
of the Cash Purchase Price, provided that any indemnity amount payable as a
result of a breach of the representation or warranty of the Company or Seller
contained in Section 3.2(a) and (b) hereof shall not exceed 100% of the Cash
Purchase Price, provided, further, that no Purchaser Indemnified Party shall
make an indemnity claim, either individually or together with other indemnity
claims, that does not exceed $10,000.

          7.3     Indemnification by Purchaser.

          (a)  The Purchaser hereby agrees to indemnify, defend and hold
harmless the Seller, its officers, directors, agents and Affiliates (other than
the Company) (each, a "Seller Indemnified Party") from and against any Losses
incurred by such Seller Indemnified Party directly or indirectly as a result of:

 

          (i)  any inaccuracy in, or breach of, a representation or warranty of
Purchaser contained herein (or in any certificate, instrument, schedule or
document attached to this Agreement and delivered by Purchaser pursuant to this
Agreement); and

 

          (ii)  any failure by Purchaser to perform or comply with any material
covenants of Purchaser contained herein or in the Ancillary Documents.

          (b)  The Purchaser shall have no liability in the case of a claim by
any Seller Indemnified Party under Section 7.2(a) unless and until, and then
only to the extent that, such Seller Indemnified Party has suffered or incurred
Losses consisting of actual damages aggregating in excess of one percent (1%) of
the Cash Purchase Price, whereupon such Seller Indemnified Party shall be
entitled to claim indemnification for the amount of all Losses, including those
less than and in excess of such amount. In no event shall the aggregate
liability of the Purchaser under Section 7.3(a) exceed seventy-five percent
(75%) of the Cash Purchase Price, provided that any indemnity amount payable as
a result of a breach of the representation or warranty of the Company or Seller
contained in Section 4.2(a) and (b) hereof shall not exceed 100% of the Cash
Purchase Price, provided, further, that no Seller Indemnified Party shall make
an indemnity claim, either individually or together with other indemnity claims,
that does not exceed $10,000.

          7.4     Matters Involving Third Parties.

          (a)  If any third party shall notify a party entitled to
indemnification under Sections 7.2 or 7.3 (the "Indemnified Party") with respect
to any matter (a "Third Party Claim") that may give rise to a claim for
indemnification against the other party hereto (the "Indemnifying Party") under
this Article VII, then the Indemnified Party shall promptly notify (and in any
event by the sooner to occur of (i) ten days after receipt of notice by it, and
(ii) five days prior to the date a responsive pleading is due (which
notification shall be made by either facsimile or overnight delivery pursuant to
Section 9.4 hereof)) the Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party is
materially prejudiced thereby.

          (b)  The Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying
Party promptly notifies the Indemnified Party in writing that the Indemnifying
Party will indemnify the Indemnified Party, to the extent indemnification is
provided for under Sections 7.2 or 7.3, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party claim and fulfill its indemnification obligations hereunder, and
(iii) the Indemnifying Party thereafter conducts the defense of the Third Party
Claim as actively and diligently as is reasonably appropriate.

          (c)  So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 7.4(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (ii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (which consent shall not unreasonably be withheld), (iii) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim unless a written agreement
is obtained releasing the Indemnified Party from all liability thereunder, (iv)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim, which involves an
injunction or other equitable relief, without the consent of the Indemnified
Party, which consent will not be unreasonably withheld, and (v) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to a Third Party Claim which will, in the good faith judgment of
the Indemnified Party, likely establish a precedential custom or practice
adverse to the continuing business interests of the Indemnified Party.

          (d)  In the event that the Indemnifying Party at any time fails to
satisfy any of the conditions in Section 7.4(b) above, (i) the Indemnified Party
may defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may
reasonably deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection therewith), (ii)
the Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim (including
attorneys' fees and expenses) as other such costs are incurred, provided that
the Third Party Claim is subject to indemnification under Sections 7.2 or 7.3
and (iii) the Indemnifying Party will remain responsible for any Losses the
Indemnified Party may incur to the extent provided in Sections 7.2 or 7.3, as
applicable.

          (e)  In the event the Seller is required to indemnify any Purchaser
Indemnified Party as a result of a breach of the representation contained in
Section 3.6(c), the computation of the Losses incurred by any Purchaser
Indemnified Party as a result of such breach shall be made by determining the
sum of the present value of the additional Taxes paid or payable by any
Purchaser Indemnified Party for any tax year due to the loss of depreciation
deductions for such tax year resulting solely from a breach or inaccuracy of the
representation contained in Section 3.6(c), reduced by the sum of the present
value of the tax benefits to any Purchaser Indemnified Party for any tax year
due to correspondingly increased depreciation deductions realized or to be
realized by any Purchaser Indemnified Party in subsequent years. The present
value of such amounts shall be determined by using a tax rate of 38.55%, and a
discount rate of 12%. If, at any time subsequent to an indemnification payment
under this Section 7.4(e), any Purchaser Indemnified Party engages in a sale or
other transaction that accelerates the use of future deductions, and immediately
after consummation of such transaction the Company's depreciable property
otherwise constituting 20-year property under Section 168(c) of the Code
qualifies for a 12-year recovery period, the net present value computation
described above shall be redetermined taking into account such acceleration of
future deductions and such Purchaser Indemnified Party shall pay to Seller any
reduction that results from such recomputation. Notwithstanding anything to the
contrary in this Agreement, recovery of the indemnifiable Losses of each
Purchaser Indemnified Party under this Section 7.4(e) shall be Purchaser's and
each Purchaser Indemnified Party's sole and exclusive remedy, at law, equity or
otherwise, for a breach or inaccuracy of the representation contained in Section
3.6(c).

ARTICLE VIII

TERMINATION

          8.1     Termination.

          This Agreement may be terminated at any time prior to the Closing
Date:

          (a)  By the mutual written agreement of the Purchaser and the Seller;

          (b)  By either the Purchaser, on the one hand, or the Seller, on the
other hand, by written notice to the other party if: (i) the other party has
(and the terminating party shall not have) failed to perform and comply with, in
all material respects, any agreement, covenant or condition hereby required to
have been performed or complied with by such party prior to the time of such
termination, and such failure shall not have been cured within thirty (30)
calendar days following notice of such failure by the terminating party; or (ii)
any event occurs after the date of this Agreement that makes it impossible to
satisfy a condition precedent to the terminating party's obligations to
consummate the transactions contemplated by this Agreement, unless the
occurrence of such event is due to the failure of the terminating party to
perform or comply with any of the agreements, covenants or conditions of this
Agreement to be performed or complied with by such party prior to the Closing;
provided, however that such thirty (30) day period shall be extended to ninety
(90) calendar days if such failure to perform or comply by its nature is
susceptible to being cured and the party attempting to cure such failure is
using and continues to use commercially reasonable efforts to effect a cure;

          (c)  By either the Purchaser or the Seller upon notice to the other
sent after June 30, 2003, if the Closing Date has not occurred by such date
(provided that the right to terminate this Agreement under this Section 8.1(c)
shall not be available to any party whose failure to fulfill any obligation
hereunder has been the cause of, or resulted in, the failure of the Closing Date
to occur on or before such date and such action or failure constitutes a breach
of this Agreement); or

          (d)  By either the Purchaser or the Seller upon receipt by the Seller
from the Purchaser of a notice of non-waiver of the condition set forth in
Section 6.2(x).

          8.2     Effect of Termination.

          (a)  In the event of the termination of this Agreement under
Section 8.1, this Agreement shall be of no further force or effect, except as
set forth in this Section 8.2, and in Sections 7.2 and 7.3, 9.1 and 9.15,
provided that nothing herein shall relieve any party from Liability for breach
of this Agreement.

          (b)  If this Agreement is terminated under Section 8.1, the Purchaser
shall return to the Seller all documents and other materials received from the
Seller, its Affiliates or their respective agents (including all copies of or
materials developed from any such documents or other materials) relating to the
Transaction, whether obtained before or after the execution of this Agreement
(or, if requested by the Seller, destroy such documents and materials and
certify to the Seller their destruction).

ARTICLE IX

GENERAL PROVISIONS

          9.1     Expenses.

          Seller shall bear all fees and expenses incurred by it or the Company
in connection with the transactions contemplated in this Agreement (excluding
the Refinancing) including, without limitation, all legal, accounting, financial
advisory, consulting and all other fees and expenses of third parties ("Third
Party Expenses") incurred by such party in connection with the negotiation and
effectuation of the terms and conditions of this Agreement (excluding the
Refinancing) and the transactions contemplated hereby, and Purchaser shall bear
all fees and expenses incurred by it in connection with the transactions
contemplated by this Agreement. Notwithstanding the foregoing, in the event the
transactions contemplated by this Agreement are not consummated as a result of
the failure of a party to diligently pursue the satisfaction of the closing
conditions contained herein, then in addition to all other remedies at law and
in equity, such party will reimburse to the other party all such Third Party
Expenses incurred in connection with such transactions immediately upon demand
therefor. Any Third Party Expenses reimbursed pursuant to this Section 9.1 shall
be limited to $750,000.

          9.2     Further Actions.

          Each party shall execute, deliver, acknowledge and file, or shall
cause to be executed, acknowledged, delivered and filed, all such further deeds,
transfers, conveyances, assignments, assurances, certificates and other
documents and take, or cause to be taken, such other actions as may reasonably
be requested by any other party in order to consummate the Transaction or any
other transaction contemplated by this Agreement or any Ancillary Document.

          9.3     Certain Limitations and Waiver.

          (a)  It is the explicit intent and understanding of each of the
parties that no party nor any of its Affiliates, representatives or agents is
making any representation or warranty whatsoever, oral or written, express or
implied, at common law, statutory or otherwise, other than those set forth in
Articles III and IV, with respect to the accuracy or completeness of the
information, records, and data now, heretofore, or hereafter made available to
the Purchaser in connection with this Agreement (including any description of
the Company, or its respective facilities or equipment, revenue, price and
expense assumptions, forecasts, or environmental information, or any other
information furnished to the Purchaser by the Seller or any Affiliate of the
Seller or any director, officer, employee, counsel, agent, or advisor thereof,
including that certain Confidential Equity Information Memorandum for the Sale
of Certain Ownership Interests in Green Country Energy, LLC, dated August 2002).

          (b)  The parties agree that this is an arm's-length transaction in
which the parties' undertakings and obligations are limited to the performance
of their obligations under this Agreement and the Ancillary Documents.

          9.4     Notices.

          All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed,
certified or registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by fax or telegram, as follows:

           (a)  if to the Seller:

                    Cogentrix of Oklahoma, Inc.
                    9405 Arrowpoint Boulevard
                    Charlotte, North Carolina 28273

                    Fax:                    (704) 529-1006
                    Telephone:         (704) 525-3800
                    Attention:           General Counsel

                    with a copy to:

                    Latham & Watkins LLP
                    885 Third Avenue
                    New York, New York 10022
                    Fax:                    (212) 751-4864
                    Telephone:         (212) 906-1200
                    Attention:           Warren H. Lilien, Esq.

           (b)  if to the Purchaser:

                    Manager, Energy Portfolio
                    Green Country Holding LLC
                    120 Long Ridge Road
                    Stamford, Connecticut 06927

                    Fax:                     (203) 961-5345
                    Telephone:          (203) 357-4890
                    Attention:            Kevin McCarthy

                    with a copy to:

                    Green Country Holding LLC
                    120 Long Ridge Road
                    Stamford, Connecticut 06927

                    Fax:                    (203) 357-6632
                    Telephone:         (203) 357-5600
                    Attention:           Bond K. Koga, Esq.

                    and to:

                    Chadbourne & Parke LLP
                    30 Rockefeller Plaza
                    New York, New York 10112

                    Fax:                    (212) 541-5369
                    Telephone:          (212) 408-5100
                    Attention:          J. Allen Miller, Esq.

or, in each case, at such other address as may be specified in writing to the
other parties.

          All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery, on the day of
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered or (z) if by fax or telegram, upon receipt of electronic
confirmation of such transmission, if followed promptly by certified or
registered mail.

          9.5     Parties in Acquired Interest; Assignment.

          This Agreement shall be binding upon and inure to the benefit of, and
be binding on and enforceable against, the parties and their respective
successors and permitted assigns, whether or not so expressed. This Agreement is
not assignable by any party hereto without the prior written consent of all of
the other parties hereto and any attempt to assign this Agreement without such
consent shall be void and of no effect; provided, that, the Purchaser may assign
this Agreement to an Affiliate without obtaining prior written consent of the
Seller.

          9.6     Third-Party Beneficiaries.

          Except for Article VII, nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any Person other than
the parties hereto and the successors and assigns permitted by Section 9.5, any
right, remedy or claim under or by reason of this Agreement.

          9.7     Amendment; Waivers, etc.

          (a)  No amendment, modification or discharge of this Agreement, and no
waiver under this Agreement, shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. The waiver by any of the parties of a
breach of or a default under any of the provisions of this Agreement or to
exercise any right or privilege under this Agreement, shall not be construed as
a waiver of any other breach or default of a similar nature, or as a waiver of
any of such provisions, rights or privileges under this Agreement. No failure by
any party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof.

          (b)  The rights and remedies in this Agreement are cumulative and,
except as otherwise expressly provided herein, none is exclusive of any other.

          9.8     Entire Agreement.

          This Agreement (including the Schedules referred to in or delivered
under this Agreement), the Ancillary Documents and the other agreements executed
by the Seller on the one hand and the Purchaser on the other hand and that
reference this Agreement, constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to their subject matters.

          9.9     Exclusive Remedies; Enforcement.

          Subject to Section 8.1, the remedies provided in Article VII
constitute the sole and exclusive remedies available to each party hereto for
recovery against the other party hereto for breach of, failure to comply with,
or other failure to fulfill the representations, warranties, covenants,
obligations and agreements set forth in this Agreement or in any schedule or
certificate furnished hereunder, except that nothing in this Agreement shall
limit the availability to a party of any remedy at equity, including specific
performance for breach of any of the covenants of the other party contained
herein, or rescission or any other remedy based upon allegations of fraud or
willful misconduct in connection with this Agreement.

          9.10     Severability.

          If any provision, including any phrase, sentence, clause, section or
subsection, of this Agreement is invalid, inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering such
provisions in question invalid, inoperative or unenforceable in any other case
or circumstance, or of rendering any other provision in this Agreement contained
invalid, inoperative, or unenforceable to any extent whatsoever; provided, that
if any of the provisions hereof are determined to be illegal, invalid or
unenforceable, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties to the fullest
extent possible.

          9.11     Counterparts.

          This Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall together constitute one and
the same instrument. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart to this Agreement.

          9.12     Governing Law.

          THIS AGREEMENT SHALL BE CONSTRUED, PERFORMED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES
WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

          9.13     Consent to Jurisdiction, etc.

          (a)  Each of the parties hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any court
of the State of New York or any Federal court of the United States of America
sitting in the Southern District of New York and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or the Transaction or any other transaction contemplated by this
Agreement or for recognition or enforcement of any judgment relating to the
Transaction any other transaction contemplated by this Agreement, and each of
the parties hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
court of the State of New York or, to the extent permitted by Law, in such
Federal court. Each of the parties agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.

          (b)  Each of the parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the
Transaction in any New York State or Federal court sitting in the Southern
District of New York. Each of the parties hereby irrevocably waives, to the
fullest extent permitted by Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

          (c)  Each of the parties hereby irrevocably and unconditionally
consents to service of process in the manner provided for notices in
Section 9.4. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by Law.

          9.14     Waiver of Punitive and Other Damages and Jury Trial.

          (a)  THE PARTIES TO THIS AGREEMENT EXPRESSLY WAIVE AND FOREGO ANY
RIGHT TO RECOVER PUNITIVE, EXEMPLARY, LOST PROFITS, CONSEQUENTIAL OR SIMILAR
DAMAGES IN ANY ARBITRATION, LAWSUIT, LITIGATION OR PROCEEDING ARISING OUT OF OR
RESULTING FROM ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

          (b)  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.

          (c)  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF THE FOREGOING WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND
(IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.14.

          9.15     Confidentiality.

          Each party agrees to, and to cause its Affiliates to, treat in a
confidential manner all information it receives from another party concerning
such other party. Each party shall not, and shall cause its Affiliates not to,
disclose such information to any Person other than: (a) to its employees,
attorneys or agents and then only to the extent such disclosure, in the good
faith determination of the disclosing party is necessary for the performance of
the duties or responsibilities of such Person in connection with the
Transaction; (b) to existing and potential lenders, investors and assignees,
subject to customary confidentiality requirements; (c) in connection with any
action, litigation or proceeding arising out of or in connection with this
Agreement or the other documents delivered hereunder or the enforcement hereof
and thereof (provided, however, no information concerning a party received by
the another party hereunder may be used or furnished in connection with any
other contemplated litigation, proceeding or any governmental investigation,
except as permitted by subsection (d) of this Section); or (d) as may be
required by applicable Law, in which case the disclosing party, to the extent
practicable, shall notify promptly the other party of such disclosure.
Notwithstanding anything to the contrary set forth herein or in any other
agreement to which the parties hereto are parties or by which they are bound,
the obligations of confidentiality contained herein and therein, as they relate
to the transactions contemplated by this Agreement, shall not apply to the
federal tax structure or federal tax treatment of such transactions, and each
party hereto (and any employee, representative, or agent of any party hereto)
may disclose to any and all persons, without limitation of any kind, the federal
tax structure and federal tax treatment of each of such transactions. The
preceding sentence is intended to cause such transactions not to be treated as
having been offered under conditions of confidentiality for purposes of
Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the tax structure of the
transactions contemplated by this Agreement or any tax matter or tax idea
related to such transactions.

          9.16     Amendment and Restatement.

          This Agreement shall supercede the Original Purchase Agreement in its
entirety. The parties hereto acknowledge and agree that from and after June 4,
2003, all references in the Ancillary Documents to the "Purchase Agreement"
shall be deemed to refer without further amendment to this Agreement.

(the remainder of this page intentionally left blank)

 

 

                    IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.

COGENTRIX OF OKLAHOMA, INC.

By:    /s/  James R. Pagano                                                     
         Name:  James R. Pagano
         Title:    Senior Vice President

GREEN COUNTRY ENERGY, LLC

By:     Cogentrix of Oklahoma, Inc.,
           its sole member

By:    /s/  James R. Pagano                                                     
         Name:  James R. Pagano
         Title:    Senior Vice President

GREEN COUNTRY HOLDING LLC

By:     Aircraft Services Corporation,
           its managing member

By:    /s/  Sushil K Verma                                                     
         Name:  Sushil K Verma
         Title:    Vice President