EXECUTION COPY
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                          SECURITIES PURCHASE AGREEMENT

                                     between

                         GREEN POWER ENERGY HOLDINGS LLC

                                       and

                        COGENTRIX OF NORTH CAROLINA, INC.
                                   dated as of

                                 August 9, 2002




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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page


ARTICLE I DEFINITIONS..........................................................1

   SECTION 1.1    DEFINITIONS..................................................1
   -----------    -----------

ARTICLE II SALE OF INTERESTS...................................................6

   SECTION 2.1    PURCHASE AND SALE OF THE SECURITIES. ........................6
                  -----------------------------------
   SECTION 2.2    PURCHASE PRICE; ADJUSTMENT. .................................6
                  --------------------------
   SECTION 2.3    CLOSING......................................................8
                  -------
   SECTION 2.4    INTERCOMPANY NOTES...........................................9
                  ------------------

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER RELATING TO SELLER AND
CEC...........................................................................10

   SECTION 3.1    ORGANIZATION, STANDING AND POWER............................10
   -----------    --------------------------------
   SECTION 3.2    AUTHORITY RELATIVE TO THIS AGREEMENT........................10
   -----------    ------------------------------------
   SECTION 3.3    NO CONFLICT OR VIOLATION; CONSENTS AND APPROVALS............10
   -----------    ------------------------------------------------
   SECTION 3.4    INTERESTS...................................................11
   -----------    ---------
   SECTION 3.5    TITLE TO PROPERTIES.........................................11
   -----------    -------------------
   SECTION 3.6    CONTRACTS...................................................11
   -----------    ---------
   SECTION 3.7    EMPLOYEE BENEFITS...........................................11
   -----------    -----------------
   SECTION 3.8    LABOR MATTERS...............................................12
   -----------    -------------
   SECTION 3.9    BROKERS AND FINDERS.........................................12
   -----------    -------------------
   SECTION 3.10   LITIGATION..................................................12
   ------------   ----------
   SECTION 3.11   ENVIRONMENTAL ISSUES........................................12
   ------------   --------------------
   SECTION 3.12   REGULATORY MATTERS..........................................13
   ------------   ------------------
   SECTION 3.13   FINANCIAL STATEMENTS........................................13
   ------------   --------------------
   SECTION 3.14   COMPLIANCE WITH LAW.........................................13
   ------------   -------------------

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER............................13

   SECTION 4.1    ORGANIZATION STANDING AND POWER.............................14
   -----------    -------------------------------
   SECTION 4.2    AUTHORITY RELATIVE TO THIS AGREEMENT........................14
   -----------    ------------------------------------
   SECTION 4.3    NO CONFLICT OR VIOLATION; CONSENTS AND APPROVALS............14
   -----------    ------------------------------------------------
   SECTION 4.4    INVESTMENT INTENT...........................................15
   -----------    -----------------
   SECTION 4.5    BROKERS AND FINDERS.........................................15
   -----------    -------------------
   SECTION 4.6    LITIGATION..................................................15
   -----------    ----------

ARTICLE V TAX MATTERS; CERTAIN COVENANTS......................................15

   SECTION 5.1    REPRESENTATIONS, WARRANTIES AND COVENANTS...................15
   -----------    -----------------------------------------
   SECTION 5.2    TAX MATTERS.................................................16
   -----------    -----------
   SECTION 5.3    ALLOCATION OF PURCHASE PRICE................................16
   -----------    ----------------------------

ARTICLE VI COVENANTS..........................................................17

   SECTION 6.1    CONDITION OF THE ASSETS; DISCLAIMERS........................17
   -----------    -------------------------------------
   SECTION 6.2    FEES AND EXPENSES...........................................17
   -----------    -----------------
   SECTION 6.3    ENVIRONMENTAL LIABILITY.....................................17
   -----------    -----------------------
   SECTION 6.4    CONTRACTS...................................................17
   -----------    ---------


                                       i
<PAGE>

   SECTION 6.5    FURTHER ASSURANCES..........................................18
   -----------    ------------------
   SECTION 6.6    ENVIRONMENTAL REPORTS.......................................18
   -----------    ---------------------
   SECTION 6.7    ACCESS TO ASSETS............................................18
   -----------    ----------------
   SECTION 6.8    NOTICE TO GUILFORD MILLS....................................18
   -----------    ------------------------
   SECTION 6.9    NAME CHANGE OF CEC..........................................18
   -----------    ------------------

ARTICLE VII CONDITIONS TO EACH PARTY'S OBLIGATIONS............................19

ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATIONS...............................19

   SECTION 8.1    REPRESENTATIONS AND WARRANTIES OF BUYER.....................19
   -----------    ---------------------------------------
   SECTION 8.2    PERFORMANCE.................................................19
   -----------    -----------
   SECTION 8.3    CERTIFICATES................................................19
   -----------    ------------
   SECTION 8.4    NO INJUNCTION OR PROCEEDING.................................19
   -----------    ---------------------------
   SECTION 8.5    DELIVERIES AT CLOSING.......................................19
   -----------    ---------------------

ARTICLE IX CONDITIONS TO BUYER'S OBLIGATIONS..................................19

   SECTION 9.1    REPRESENTATIONS AND WARRANTIES OF SELLER....................20
   -----------    ----------------------------------------
   SECTION 9.2    PERFORMANCE BY SELLER.......................................20
   -----------    ---------------------
   SECTION 9.3    CERTIFICATES................................................20
   -----------    ------------
   SECTION 9.4    NO INJUNCTION OR PROCEEDING.................................20
   -----------    ---------------------------
   SECTION 9.5    NO MATERIAL ADVERSE CHANGE..................................20
   -----------    --------------------------
   SECTION 9.6    DELIVERIES AT CLOSING.......................................20
   -----------    ---------------------
   SECTION 9.7    DUE DILIGENCE...............................................20
   -----------    -------------

ARTICLE X TERMINATION AND ABANDONMENT; INDEMNIFICATION; ARBITRATION...........20

   SECTION 10.1   TERMINATION.................................................20
   ------------   -----------
   SECTION 10.2   PROCEDURE AND EFFECT OF TERMINATION.........................21
   ------------   -----------------------------------
   SECTION 10.3   SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.......22
   ------------   -----------------------------------------------------
   SECTION 10.4   INDEMNIFICATION.............................................22
   ------------   ---------------
   SECTION 10.5   ARBITRATION.................................................23
   ------------   -----------

ARTICLE XI MISCELLANEOUS......................................................24

   SECTION 11.1   AMENDMENT AND MODIFICATIONS.................................24
   ------------   ---------------------------
   SECTION 11.2   EXTENSION; WAIVER...........................................25
   ------------   -----------------
   SECTION 11.3   ENTIRE AGREEMENT; ASSIGNMENT................................25
   ------------   ----------------------------
   SECTION 11.4   VALIDITY....................................................25
   ------------   --------
   SECTION 11.5   NOTICES.....................................................25
   ------------   -------
   SECTION 11.6   GOVERNING LAW...............................................26
   ------------   -------------
   SECTION 11.7   PUBLICITY...................................................26
   ------------   ---------
   SECTION 11.8   DESCRIPTIVE HEADINGS........................................26
   ------------   --------------------
   SECTION 11.9   COUNTERPARTS................................................27
  ------------   ------------

Exhibit
Letter          Exhibits
------          --------

A               Assignment of Membership Interests
B               Secretary's Certificate of Seller
C               Secretary's Certificate of Buyer
D               Security Agreement
E               Deed of Trust
F               Tax Allocation
G               Legal Description of Sites

                                       ii
<PAGE>

                          SECURITIES PURCHASE AGREEMENT

         THIS  SECURITIES  PURCHASE  AGREEMENT  is made as of  August  9,  2002,
between  COGENTRIX  OF  NORTH  CAROLINA,  INC.,  a  North  Carolina  corporation
("Seller"),  and GREEN POWER ENERGY HOLDINGS LLC, a Delaware  limited  liability
company, or its designee ("Buyer").

                                    RECITALS

         Seller owns 100% of the limited liability company membership  interests
in Cogentrix Eastern  Carolina,  LLC, a North Carolina limited liability company
("CEC").  CEC is the direct  owner of certain  assets  for the  cogeneration  of
electricity and steam,  more  particularly  described in Section 1 of the Seller
Disclosure Schedule, at a facility in Kenansville,  North Carolina and a related
facility in Warsaw,  North Carolina (the "Assets";  the cogeneration  facilities
included in the Assets, shall be referred to herein as the "Facilities").

         Buyer's  Representative  submitted an Offer Letter dated March 15, 2002
(the  "Offer")  to  Seller  regarding  the  purchase  of the  Facilities,  to be
structured as a purchase of 100% of the membership interests in CEC from Seller.

         Pursuant to a Right of First  Refusal  Agreement  (the  "First  Refusal
Agreement")  between Seller (as successor to Cogentrix Leasing  Corporation) and
Guilford Mills,  Inc.  ("Guilford  Mills") dated November 30, 1984 (as amended),
Guilford  Mills has a right of first  refusal (the "Right of First  Refusal") to
acquire the Facilities on the same terms and conditions as were contained in the
Offer. Upon execution of this Agreement by the parties hereto,  CEC shall submit
to Guilford  Mills notice of its Right of First  Refusal and shall seek a waiver
by Guilford Mills of its Right of First Refusal.

         Seller wishes to sell,  transfer and assign to Buyer,  and Buyer wishes
to purchase  and acquire  from  Seller,  all of the  limited  liability  company
membership  interests in CEC (the  "Interests")  on the terms and conditions set
forth herein.

         NOW  THEREFORE,  in  consideration  of the mutual  covenants  contained
herein and of other good and valuable consideration, the receipt and sufficiency
of which are hereby  acknowledged,  the parties hereto,  intending to be legally
bound, agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         Section 1.1 Definitions.  The terms defined in this Article I, whenever
used  herein,  shall  have  the  following  meanings  for all  purposes  of this
Agreement.

         "Actual Knowledge" shall mean, with respect to CECC and Seller,  actual
knowledge  of, or  receipt of  written  notice by, an officer or other  employee
whose  responsibilities  include the administration of environmental  matters or
compliance with laws.

         "Affiliate"  shall have the meaning set forth in Rule 12b-2 promulgated
under the Exchange Act.

<PAGE>

         "Agreement" shall mean this Securities Purchase Agreement together with
the Schedules and Exhibits hereto.

         "Assets"  shall  have the  meaning  set forth in the  Recitals  to this
Agreement.

         "Buyer" shall have the meaning set forth in the preamble hereto.

         "Buyer Disclosure Schedule" shall have the meaning set forth in Article
IV hereof.

         "Buyer Indemnified Parties" shall have the meaning set forth in Section
10.4(a) hereof.

         "CEC"  shall  have  the  meaning  set  forth  in the  Recitals  to this
Agreement.

         "Claim" shall mean any demand, assertion, claim, action, or proceeding,
judicial or otherwise by any Governmental Entity or Person, which gives or would
reasonably  be expected to give rise to a claim under  Section 10.4 or Article V
for Damages.

         "Closing" shall have the meaning set forth in Section 2.2(a) hereof.

         "Closing  Date"  shall have the  meaning  set forth in  Section  2.2(a)
hereof.

         "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time.

         "Confidentiality  Agreement" shall mean the  Confidentiality  Agreement
dated as of December 19, 2001 between Buyer and CEC.

         "Contracts" shall have the meaning set forth in Section 3.6 hereof.

         "CP&L"  shall  have  the  meaning  set  forth in the  Recitals  to this
Agreement.

         "Damages"  shall  mean any cash,  out-of-pocket  liabilities,  costs or
expenses  (including  reasonable  attorneys' fees),  judgments,  fines,  losses,
claims,  damages and amounts paid in settlement,  except to the extent caused by
the negligence,  willful  misconduct or fraud of an Indemnified Party and except
as limited by Section 6.1 hereof.

         "Encumbrances"  shall  have the  meaning  set forth in  Section  3.5(a)
hereof.

         "Environmental Law" shall mean any current Legal Requirement pertaining
to (a) the protection of health,  safety and the indoor or outdoor  environment,
(b) the conservation,  management, or use of natural resources and wildlife, (c)
the  protection or use of surface  water and  groundwater,  (d) the  management,
manufacture, possession, presence, use, generation,  transportation,  treatment,
storage, disposal, Release, threatened Release, abatement,  removal, remediation
or handling of, or exposure to, any hazardous or toxic material or (e) pollution
(including  any Release to air,  land,  surface  water,  and  groundwater),  and
includes,   without  limitation,   the  Comprehensive   Environmental  Response,
Compensation,  and Liability Act of 1980, as amended by the Superfund Amendments
and  Reauthorization Act of 1986, 42 USC 9601 et seq.,  ("CERCLA"),  Solid Waste
Disposal Act, as amended by the Resource  Conservation  and Recovery Act of 1976
and Hazardous and Solid Waste  Amendments of 1984, 42 USC 6901 et seq.,  Federal


                                       2
<PAGE>

Water  Pollution  Control Act, as amended by the Clean Water Act of 1977, 33 USC
1251 et seq.,  Clean Air Act of 1966,  as  amended,  42 USC 7401 et seq.,  Toxic
Substances  Control  Act of  1976,  15 USC  2601 et  seq.,  Hazardous  Materials
Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and Health Act
of 1970, as amended,  29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701
et seq.,  Emergency  Planning and  Community  Right-to-Know  Act of 1986, 42 USC
11001 et seq., National  Environmental  Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any similar,
implementing or successor law, and any amendment,  rule,  regulation,  order, or
directive issued thereunder, whether federal state, or local.

         "Environmental Reports" shall have the meaning set forth in Section 6.6
hereof.

         "Exchange  Act"  shall mean the  Securities  Exchange  Act of 1934,  as
amended.

         "Facilities"  shall have the meaning set forth in the  Recitals to this
Agreement.

         "FERC"  shall mean the Federal  Energy  Regulatory  Commission,  or any
successor agency.

         "Final Payment" shall have the meaning set forth in Section 2.2(b)(iii)
hereof.

         "First  Refusal  Agreement"  shall  have the  meaning  set forth in the
Recitals to this Agreement.

         "Governmental  Approval"  shall  mean any  permit,  license,  variance,
certificate,  consent, letter, clearance, closure, exemption, decision or action
or approval of a Governmental Entity.

         "Governmental  Entity"  shall have the meaning set forth in Section 3.3
hereof.

         "Ground Leases" shall mean those certain ground leases set forth on the
Seller Disclosure Schedule.

         "Guilford  Mills"  shall have the meaning set forth in the  Recitals to
this Agreement.

         "Hazardous  Material"  shall mean any  substance,  chemical,  compound,
product,  solid,  gas, liquid,  waste,  byproduct,  pollutant,  contaminant,  or
material  which is hazardous or toxic,  and includes,  without  limitation,  (a)
asbestos and  polychlorinated  biphenyls and (b) any such material classified or
regulated as  "hazardous" or "toxic"  pursuant to any  applicable  Environmental
Law.

         "Indemnified Party" shall have the meaning set forth in Section 10.4(d)
hereof.

         "Indemnifying  Party"  shall  have the  meaning  set  forth in  Section
10.4(d) hereof.

         "Interests"  shall have the meaning  set forth in the  Recitals to this
Agreement.


                                       3
<PAGE>

         "Legal Requirement" shall mean any treaty,  convention,  statute,  law,
regulation,  ordinance,  Governmental  Approval,  injunction,  judgment,  order,
consent decree, or other requirement of any Governmental Entity.

         "Material  Adverse  Effect" shall have the meaning set forth in Section
3.1 hereof.

         "Mutual Release and Termination  Agreement"  shall have the meaning set
forth in Section 2.2(b)(xi) hereof.

         "Notice of Exercise" shall have the meaning set forth in Section 2.2(b)
hereof

         "NCUC" means the North Carolina Utilities Commission.

         "Offer"  shall  have the  meaning  set  forth in the  Recitals  to this
Agreement.

         "Organizational  Documents"  has the  meaning  set forth in Section 3.1
hereof.

         "Permitted  Encumbrances"  shall have the  meaning set forth in Section
3.5(b) hereof.

         "Person" shall mean any individual,  partnership,  joint-stock company,
joint venture,  corporation,  limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.

         "Plan"  shall mean any  "employee  benefit  plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended.

         "Power  Agreement"  shall have the meaning set forth in the Recitals to
this Agreement.

         "PUHCA" shall mean the Public Utility  Holding  Company Act of 1935, as
amended from time to time.

         "PURPA" shall mean the Public Utility Regulatory Policy Act of 1978, as
amended, and the regulations promulgated by FERC thereunder.

         "Purchase  Price"  shall  have the  meaning  set forth in  Section  2.2
hereof.

         "Qualifying  Facility" shall mean an electric generating plant which is
a "qualifying  small power  production  facility" or a "qualifying  cogeneration
facility" as such terms are defined in PURPA.

         "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging,  injecting, escaping, leaching, dumping or disposing into
the  indoor  or  outdoor  environment,   including,   without  limitation,   the
abandonment  or  discarding  of barrels,  drums,  containers,  tanks,  and other
receptacles containing or previously containing any Hazardous Material.

         "Representative"  shall mean, with respect to any Person,  each of such
Person's directors, officers, employees, representatives and agents, and each of
their heirs, executors and assigns of any of them.


                                       4
<PAGE>

         "Required  Buyer  Consents" shall have the meaning set forth in Section
4.3 hereof.

         "Required  Seller Consents" shall have the meaning set forth in Section
3.3 hereof.

         "Right  of First  Refusal"  shall  have the  meaning  set  forth in the
Recitals to this Agreement.

         "Scheduled Conditions" shall have the meaning set forth in Section 3.10
hereof.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         "Seller" shall have the meaning set forth in the preamble hereto.

         "Seller  Companies" shall have the meaning set forth in the Recitals to
this Agreement.

         "Seller  Disclosure  Schedule"  shall  have the  meaning  set  forth in
Article III hereof.

         "Seller  Indemnified  Parties"  shall  have the  meaning  set  forth in
Section 10.4(b) hereof.

         "Signing" shall have the meaning set forth in Section 2.2(b) hereof.

         "Sites" shall have the meaning set forth in Section 6.3 hereof.

         "Tax" or "Taxes"  shall mean,  all  income,  gross  receipts,  profits,
franchise,  single business,  sales,  use,  occupation,  property  (including in
lieu-of-taxes), capital, environmental,  employment, severance, excise, workers'
compensation,   social   security,   withholding   or  similar  taxes  or  other
governmental fees or charges of a similar nature,  however denominated,  imposed
by any foreign,  federal,  state,  local, or other political  subdivision taxing
authority  (whether  payable  directly  or by  withholding  and  whether  or not
requiring the filing of a Tax Return), together with any interest,  additions or
penalties with respect thereto, and shall include any liability for such amounts
as a result  either of being a member of a  combined,  consolidated,  unitary or
affiliated group or of a contractual obligation to indemnify any person or other
entity.

         "Tax Return" shall mean any return, report,  statement,  information or
other document  including any amendment thereto filed or to be filed or required
to be filed or supplied to any foreign,  federal,  state, or local Tax authority
or any  other  Governmental  Entity  with  respect  to Taxes,  including,  where
permitted  or  required,  combined  or  consolidated  returns  for any  group of
entities.

         "Termination  Date" shall have the meaning set forth in Section 10.1(b)
hereof.

         "Transfer  Taxes"  shall have the meaning  set forth in Section  5.2(a)
hereof.







                                       5
<PAGE>

                                   ARTICLE II
                                SALE OF INTERESTS

         Section 2.1 Purchase and Sale of the Securities. . Subject to the terms
and conditions of this Agreement,  at the Closing, Seller will sell and transfer
the Interests to Buyer, and Buyer will purchase the Interests from Seller.

         Section 2.2 Purchase Price;  Adjustment.  . (a) Buyer and Seller hereby
agree  that  upon the  terms and  subject  to the  satisfaction  or  waiver,  if
permissible, of the conditions set forth herein, Seller shall sell, transfer and
deliver to Buyer,  and Buyer shall  purchase from Seller,  free and clear of all
Encumbrances, the Interests for a purchase price (the "Purchase Price") equal to
the sum of Six Million Five Hundred Thousand U.S. Dollars ($6,500,000),  subject
to adjustment as set forth in  subsections  (c) - (g) below,  and payable as set
forth in subsection (b) below.

         (b) Buyer shall deliver to Seller,  upon the signing of this  Agreement
(the "Signing"),  $200,000 in immediately  available funds (the "Cash Deposit").
In the event the transactions contemplated in this Agreement do not close by the
Termination  Date because either of CEC or Seller  receives notice that Guilford
Mills has  elected  to  exercise  the Right of First  Refusal  (the  "Notice  of
Exercise"), Seller shall refund the Cash Deposit to Buyer, without any interest.
In the event the transactions contemplated in this Agreement do not close by the
Termination  Date for any other  reason,  Seller shall be entitled to retain the
Cash Deposit.  In the event the  transactions  contemplated in this Agreement do
close,  Seller  shall be entitled to retain the Cash Deposit and Buyer shall pay
the balance of the Purchase Price in immediately  available funds (the "Deferred
Purchase Price"), as follows:

                  (i) On the Closing Date, Buyer shall pay to Seller $100,000.

                  (ii) Not later than 210 days  after the  Closing  Date,  Buyer
         shall pay to Seller $400,000.

                  (iii) Not later than 270 days after the  Closing  Date,  Buyer
         shall  pay  to  Seller  $5,800,000,  as  adjusted  in  accordance  with
         subsections (c) - (g) below (the "Final Payment").

         (c) Not later than ten (10) days after the Closing  Date,  Seller shall
deliver to Buyer a statement  ("Seller's  Statement") of the difference  between
(i) the value of the net working  capital,  inventory and fuel on-hand of CEC on
March 15, 2002,  which is set forth in Schedule  2.2(c) to this  Agreement  (the
"Interim  Value") and (ii) the value of the net working  capital,  inventory and
fuel on-hand of CEC as of the Closing Date (the "Closing Value").  To the extent
the Closing Value is less than the Interim  Value,  the Purchase  Price shall be
decreased  dollar-for-dollar by the difference;  to the extent the Closing Value
is greater  than the  Interim  Value,  the  Purchase  Price  shall be  increased
dollar-for-dollar  by the difference.  Any adjustment to Purchase Price pursuant
to this Section shall be effected by a corresponding change to the amount of the
Final Payment.


                                       6
<PAGE>

         (d) Buyer  shall have the  opportunity  to review  Seller's  Statement,
which shall be binding and conclusive upon, and deemed accepted by, Buyer unless
Buyer shall have notified  Seller in writing within ten (10) days after delivery
of Seller's Statement of any good faith objection thereto ("Buyer's Objection").
Buyer's Objection shall set forth a specific description of the basis of Buyer's
Objection  and the  specific  adjustments  to the  Closing  Value  reflected  on
Seller's  Statement  which Buyer believes should be made. Any items not disputed
in Buyer's Objection shall be deemed to have been accepted by Seller.

         (e) Seller's  Statement,  and all other  financial  information  of CEC
required or permitted to be provided hereunder,  shall be prepared in accordance
with United States generally accepted  accounting  principles and the accounting
practices and policies of CEC, consistently applied ("U.S. GAAP").

         (f) If Buyer and Seller are  unable to  resolve  all of their  disputes
with respect to Seller's  Statement within fifteen (15) days following  Seller's
receipt of Buyer's  Objection,  they shall refer their remaining  differences to
Deloitte & Touche LLP or another internationally  recognized firm of independent
public  accountants as to which Buyer and Seller mutually agree (the "CPA Firm")
for  decision,  which  decision  shall be final and binding on the parties  upon
delivery of the written  opinion set forth in  sub-clause  (iii) below.  Each of
Buyer and  Seller  hereby  represents  that  Deloitte  & Touche LLP has not been
retained by Buyer,  Seller or any of their affiliates for a period of five years
prior to the date hereof.  The  procedure  and schedule  under which any dispute
shall be submitted to the CPA Firm shall be as follows:

                  (i) Within fifteen (15) days following  appointment of the CPA
         Firm,  Buyer shall submit any  unresolved  elements of its objection to
         the CPA  Firm in  writing  (with a copy to  Seller),  supported  by any
         documents and/or affidavits upon which it relies.

                  (ii) Within fifteen (15) days following Buyer's  submission of
         the unresolved elements of Buyer's Objection as specified in sub-clause
         (i) above,  Seller shall submit its response to the CPA Firm in writing
         (with a copy to Buyer),  supported by any documents  and/or  affidavits
         upon which it relies.

                  (iii) The CPA Firm shall  deliver its written  opinion  within
         twenty (20) days following its receipt of the information  provided for
         in sub-clause (ii) above, or such longer period of time as the CPA Firm
         determines is necessary,  not to exceed thirty (30) days.  The scope of
         the  disputes  to be  resolved  by  the  CPA  Firm  is  limited  to the
         unresolved portion of Seller's  Objection.  Seller and Buyer shall make
         readily  available to the CPA Firm all  relevant  books and records and
         any  work  papers   (including   those  of  the   parties'   respective
         accountants)  relating  to  the  Closing  Value  and  all  other  items
         reasonably requested by the CPA Firm.

         Any expenses relating to the engagement of the CPA Firm shall be shared
equally  between Seller and Buyer.  Seller and Buyer shall each bear the fees of
their respective  accountants  incurred in connection with the determination and
review of the Closing Value and Seller's Statement.


                                       7
<PAGE>

         (g)  Seller's  Statement  shall become final and binding on the parties
upon the earliest of (i) if no Buyer's  Objection has been given, the expiration
of the period within which Buyer must make its objection  pursuant to Subsection
(d)  hereof,  (ii)  agreement  in  writing  by Buyer and  Seller  that  Seller's
Statement,  together with any modifications  thereto agreed by Buyer and Seller,
shall be final and  binding and (iii) the date on which the CPA Firm shall issue
its  written  determination  with  respect to any  dispute  relating to Seller's
Statement.  Seller's  Statement as submitted  by Seller,  if no timely  Seller's
Objection has been given, or as adjusted  pursuant to any agreement  between the
parties or as  determined  pursuant to the  decision of the CPA Firm,  is herein
referred to as the "Final Closing Statement."

         Section 2.3 Closing.  (a) The closing of the transactions  contemplated
by this  Agreement  (the  "Closing")  shall be held at 10:00  a.m.  on the third
business day  following  the later to occur of (i)  September  12, 2002,  or the
receipt of a waiver by Guilford Mills of its Right of First Refusal and (ii) the
satisfaction  of the  conditions  precedent  to the  purchase  and  sale  of the
Interests,  to be  effective as of such day, at the offices of Moore & Van Allen
PLLC in Charlotte,  North Carolina (or at such other time,  date or place as the
parties may mutually agree, hereinafter referred to as the "Closing Date").

         (b) At the Closing, Seller shall deliver the following to Buyer:

                  (i) A copy of the  Articles  of  Incorporation  and  Bylaws of
         Seller,  together with a certificate  of a duly  authorized  officer of
         Seller,  dated as of the Closing  Date,  certifying  that the documents
         attached  to such  certificate  are true  and  correct  copies  of such
         organizational documents;

                  (ii) A copy  of  the  Articles  of  Organization  and  Limited
         Liability  Company  Agreement of CEC,  together with a certificate of a
         duly  authorized  officer  of  CEC,  dated  as  of  the  Closing  Date,
         certifying that the documents attached to such certificate are true and
         correct  copies  of  such  organizational   documents,  and  that  such
         documents constitute all of the organizational documents of CEC;

                  (iii) Certified  copies of resolutions of the sole director of
         Seller  authorizing  the  execution,  delivery and  performance of this
         Agreement and the performance of its obligations hereunder;

                  (iv) A  Certificate  of  Existence  issued no earlier than one
         week  prior  to the  Closing  Date by the  Secretary  of State of North
         Carolina regarding each of Seller and CEC;

                  (v)  Assignments  transferring  the  Interests to Buyer in the
         form of Exhibit "A", duly executed by Seller;

                  (vi) The certificates contemplated by Section 9.3 hereof;

                  (vii) The resignation of all members and managers of CEC;


                                       8
<PAGE>

                  (viii) A  secretary's  certificate  executed  by Seller in the
         form of Exhibit "B";

                  (ix) The Required Seller Consents;

                  (x) The Environmental Reports; and

                  (xi)  Terminations or releases of the Encumbrances  identified
         in Section 3.5(b) of the Seller Disclosure Schedule.

         (c) At the Closing, Buyer shall deliver to Seller:

                  (i) The  Certificate of Formation and LLC Operating  Agreement
         of Buyer,  together with a certificate of a duly authorized  officer of
         Buyer,  dated as of the  Closing  Date,  certifying  the  accuracy  and
         completeness of such corporate documents as of such date;

                  (ii)  Certified  copies  of  resolutions  or  consents  of the
         manager(s) of Buyer authorizing the execution, delivery and performance
         of this Agreement and the performance of its obligations hereunder;

                  (iii)  Good  standing   certificate   with  respect  to  Buyer
         (including tax good standing)  issued no earlier than one week prior to
         the Closing Date by the Secretary of State of Delaware;

                  (iv) The certificates contemplated by Section 8.3 hereof;

                  (v) A secretary's certificate executed by Buyer in the form of
         Exhibit "C";

                  (vi) The Required Buyer Consents;

                  (vii) A Security  Agreement  executed  by Buyer in the form of
         Exhibit "D" that includes the  authorization  by Buyer of the filing by
         Seller of UCC financing statements; and

                  (viii) A Deed of Trust in favor of Seller with  respect to the
         Sites in the form of Exhibit "E".

         Section 2.4 Intercompany Notes.The obligations of Buyer or of CEC after
the  Closing  shall  exclude  any  intercompany  loan  balances,  and any  other
obligations under intercompany notes, existing prior to the Closing Date.


                                       9
<PAGE>

                                  ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF SELLER RELATING
                                TO SELLER AND CEC

         Except as set forth in the Disclosure  Schedule  delivered by Seller to
Buyer  concurrently  with the execution and delivery by Seller of this Agreement
(the "Seller  Disclosure  Schedule"),  Seller hereby  represents and warrants to
Buyer as follows:

         Section  3.1   Organization,   Standing  and  Power.   Seller  is  duly
incorporated,  validly  existing  and in good  standing  under the laws of North
Carolina, and CEC is duly organized, validly existing and in good standing under
the laws of North  Carolina;  and CEC has all  requisite  power and authority to
conduct its business as it is now being  conducted and to own, lease and operate
its property and assets,  except where the failure to be so organized,  existing
and in good  standing  or to have such  power or  authority  will not have (i) a
material  adverse  effect on the  business,  results  of  operations,  assets or
financial  condition of CEC or (ii)  materially  impair the ability of Seller to
perform its material  obligations  under this Agreement (each of such effects in
clauses (i) and (ii) being a "Material  Adverse  Effect").  CEC has no direct or
indirect  investment  or  interest  in or  control  over any other  corporation,
partnership,  joint venture or other  business  entity.  Seller has delivered to
Buyer true and correct copies of the articles of organization, limited liability
company  agreement and minute books of CEC  (collectively,  the  "Organizational
Documents").

         Section  3.2  Authority  Relative  to this  Agreement.  Seller  has all
requisite  corporate  authority and power to execute and deliver this Agreement,
to  transfer  the  Interests  and to  perform  its  obligations  hereunder.  The
execution and delivery of this Agreement,  the transfer of the Interests and the
performance  by Seller of its  obligations  hereunder have been duly and validly
authorized by all required action on the part of Seller and no other proceedings
on the part of Seller are necessary to authorize this Agreement, the transfer of
the  Interests  or the  performance  of  Seller's  obligations  hereunder.  This
Agreement  has been duly and  validly  executed  and  delivered  by Seller  and,
assuming  this  Agreement  has been duly  authorized,  executed and delivered by
Buyer,  this  Agreement  constitutes  a valid and binding  agreement  of Seller,
enforceable  against Seller in accordance  with its terms,  except as limited by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws now or  hereafter  in effect  relating to or  affecting  creditors'  rights
generally,   and  subject  to  the  limitations  imposed  by  general  equitable
principles  (regardless  of  whether  such  enforceability  is  considered  in a
proceeding at law or in equity).

         Section 3.3 No Conflict or Violation;  Consents and Approvals.  Neither
the execution and delivery of this  Agreement by Seller nor the  performance  by
Seller of its obligations hereunder,  including the sale of the Interests,  will
(a) require the  consent,  waiver or approval of any  Federal,  state,  local or
foreign government,  or regulatory  authority,  agency or commission,  including
courts of competent jurisdiction, domestic or foreign (a "Governmental Entity"),
except for consents  and  approvals  described  in Section  3.3(a) of the Seller
Disclosure Schedule (the "Required Seller Consents"), (b) conflict with, violate
or result in any default under the Articles of Incorporation or Bylaws of Seller
or the  Organizational  Documents  of CEC, or (c) violate any  judgment,  order,
decree, law, statute,  regulation or other judicial or governmental  restriction
to  which  Seller  or CEC is  subject.  Notwithstanding  any  provision  in this


                                       10
<PAGE>

Agreement to the contrary,  (i) in no event shall  obtaining the Required Seller
Consents  require any action by Seller with respect to any Certificate of Public
Convenience and Necessity other than providing the notice referred to in Section
3.3(a) of the Seller Disclosure Schedule.

         Section  3.4  Interests.   The  Interests  were  issued  to  Seller  in
compliance  with the Securities Act and any applicable  state  securities  laws.
There are no outstanding contracts, commitments,  agreements,  understandings or
arrangements of any kind relating to the issuance of any equity interests of CEC
(other than the Interests).

         Section 3.5 Title to Properties.  (a) Interests.  Seller has good title
in and to the Interests,  subject to no charge,  claim,  lien,  option,  pledge,
security interest, mortgage,  restriction on transfer, right of first refusal or
other  encumbrances  (collectively,  "Encumbrances").  Seller  has the  right to
convey to Buyer the Interests. Upon delivery of the Interests against payment of
the Purchase Price by Buyer in accordance with Section 2 of this Agreement, good
title to the Interests, free and clear of any Encumbrances, will pass to Buyer.

         (b) Assets.  Except for any liens for Taxes and assessments not yet due
and payable (collectively,  "Permitted Encumbrances"), the Assets are subject to
no  Encumbrances  other  than as  identified  on  Section  3.5(b) of the  Seller
Disclosure Schedule.  CEC owns and has good title in and to the Assets,  subject
to no Encumbrances other than Permitted Encumbrances.

         Section  3.6  Contracts.  At  Closing,  CEC  will not be a party to any
contracts,  agreements or understandings with any Person other than as set forth
in Section 3.6 of the Seller Disclosure Schedule (the "Contracts").

         Section 3.7 Employee Benefits. (a) Section 3.7 of the Seller Disclosure
Schedule contains a complete and accurate list of all Plans currently maintained
by CEC or to which CEC is currently  obligated to contribute and all employment,
change in  control,  or  consulting  agreements,  and all  bonus,  incentive  or
deferred  compensation,  pension,  retirement,   compensatory,   profit-sharing,
savings,  stock option or other equity-based,  severance,  retention,  and other
material fringe benefit plans,  agreements,  policies and arrangements currently
maintained by CEC for the benefit of any current or former employee,  officer or
independent   contractor  of  CEC,  or  under  which  CEC  has  any  outstanding
obligations (collectively, the "Company Plans").

         (b) Each Company Plan has been operated and  administered in accordance
with its terms and with applicable law, including ERISA and the Code, except for
any  failure  to so  operate  and  administer  any  Company  Plan that would not
reasonably be expected to have a Material Adverse Effect.

         (c)  There  is no  pending  or,  to the  knowledge  of CEC,  threatened
material  legal action,  suit or claim  relating to any Company Plan (other than
routine  claims for  benefits).  Neither CEC nor, to the  knowledge  of CEC, any
other Person, has engaged in a transaction with respect to any Company Plan that
would  reasonably  be  expected  to subject  CEC to a tax or penalty  imposed by
either section 4975 of the Code or section 502(i) of ERISA that would reasonably
be expected to have a Material Adverse Effect.


                                       11
<PAGE>

         (d) No Company  Plan is subject to section  302 of ERISA or section 412
of the Code.  No Company Plan is a  "multiemployer  plan," within the meaning of
section 3(37) of ERISA.

         (e) All  contributions  required  under  ERISA or the Code to have been
made by CEC to each Company Plan have been timely made.

         (f)  With  respect  to each  Company  Plan,  CEC has  provided  or made
available to Buyer true and complete copies of the following  documents,  to the
extent applicable: (i) the most recent plan documents and all amendments thereto
or a  summary  of any  unwritten  Company  Plan;  (ii)  the  most  recent  trust
instrument and insurance  contracts;  (iii) the most recent Form 5500 filed with
the IRS; (iv) the most recent summary plan description;  and (v) the most recent
determination letter issued by the IRS.

         Section  3.8  Labor  Matters.  Section  3.8  of the  Seller  Disclosure
Schedule  sets forth a true and complete  list of the employees of CEC as of the
date of this  Agreement.  Except  as set  forth  in  Section  3.8 of the  Seller
Disclosure Schedule:

         (a) there is no labor strike, material labor dispute, or concerted work
stoppage  pending as of the date of this  Agreement or, to the knowledge of CEC,
threatened, and, since January 1, 1991, CEC has not experienced any labor strike
or material concerted labor dispute;

         (b)  CEC  has  complied  with  all  applicable  laws  relating  to  the
employment  relationship  in connection  with the  employment of its  employees,
except for any failure to comply that would not reasonably be expected to have a
Material Adverse Effect; and

         (c) CEC is not a party to or bound by any  Contract or other  agreement
with any labor union representing its employees.

         Section 3.9 Brokers and Finders. No broker, finder or investment banker
is entitled to any brokerage,  finder's or other fee or commission in connection
with the  transactions  contemplated by this Agreement  based upon  arrangements
made by or on behalf of Seller.

         Section  3.10  Litigation.  There  is no  action,  suit  or  proceeding
pending,  or, to the knowledge of Seller,  threatened,  against Seller or CEC or
any properties or rights of either Seller or CEC before any Governmental Entity,
except,  with respect to Seller,  actions,  suits or proceedings (i) the adverse
determination  of  which,  individually  or  in  the  aggregate,  would  not  be
reasonably  likely to have a  Material  Adverse  Effect  or (ii) that  would not
prevent  or delay the  consummation  of the  transactions  contemplated  by this
Agreement  and, to the knowledge of Seller,  there is no other  action,  suit or
proceeding  pending  against Seller or CEC or any properties or rights of either
Seller or CEC before any Governmental Entity.

         Section 3.11 Environmental  Issues. Except as set forth on Section 3.11
of  the  Seller  Disclosure  Schedule  (the  "Scheduled   Conditions"),   Seller
represents  and  warrants as of the Closing  Date,  to the Actual  Knowledge  of
Seller, that:

         (a) the  operations  and use of the Assets by CEC complied  with, as of
the Closing Date, all  applicable  material  Environmental  Laws in all material
respects;


                                       12
<PAGE>

         (b)  CEC has  obtained  all  Governmental  Approvals  required  for its
operations and the operation of the Assets by any applicable  Environmental Law,
except where the failure to obtain such a Governmental Approval would not have a
Material Adverse Effect; and

         (c) CEC has not caused any Release, threatened Release, or disposal of,
any Hazardous  Material at the Facilities in any material  quantity,  except for
Releases of any Hazardous Material permitted by applicable Environmental Laws or
Governmental Approvals.

         Section  3.12  Regulatory  Matters.  The  Facilities  are a  Qualifying
Facility. CEC is not (i) subject to regulation as an "electric utility company,"
"public  utility  company" or "holding  company"  under  PUHCA;  (ii) subject to
regulation under the Federal Power Act of the United States, as amended,  except
as  provided  in 18  C.F.R.  ss.292.601(c);  or (iii)  subject  to state  law or
regulation  respecting  the rates of electric  utilities  and the  financial and
organizational  regulation  of  electric  utilities.  CEC is not an  "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment  Company Act of 1940 of the United States,  as amended,  or an
"investment advisor."

         Section 3.13 Financial Statements.  The financial statements of CEC set
forth on  Section  3.13 of the Seller  Disclosure  Schedule  (collectively,  the
"Company Financial Statements") for the years ended December 31, 2000, and 2001,
and the balance sheet and income statement for the periods  beginning January 1,
2002 and ending March 15, 2002,  and  beginning  January 1, 2002 and ending June
30,  2002,  delivered  to Buyer prior to the date  hereof have been  prepared in
accordance with generally accepted accounting  principles  consistently  applied
throughout the periods indicated and present fairly in all material respects the
financial  condition of CEC, at the  respective  dates  indicated.  Although the
historical  financial  statements  of CEC for periods  ending  prior to June 30,
2002,  include  references to intercompany  notes, those notes have been paid in
full.

         Section 3.14  Compliance  with Law. To the Actual  Knowledge of Seller,
CEC and Seller have complied with all applicable laws and  regulations  relating
to the Assets unless  failure to comply could not reasonably be expected to have
a Material Adverse Effect on the business or operations of the Assets;  provided
that no  representation or warranty is made in this Section 3.12 with respect to
any of the matters covered by or referred to in Section 3.10 hereof.



                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER


         Except as set forth in the  Disclosure  Schedule  delivered by Buyer to
Seller  concurrently  with the execution and delivery by Buyer of this Agreement
(the "Buyer  Disclosure  Schedule"),  Buyer represents and warrants to Seller as
follows:


                                       13
<PAGE>

         Section 4.1 Organization  Standing and Power.  Buyer is duly organized,
validly  existing  and in good  standing  under the laws of Delaware and has all
requisite  power  and  authority  to  conduct  its  business  as it is now being
conducted and to own, lease and operate its property and assets except where the
failure to be so organized,  existing and in good standing or to have such power
or authority  would not, in the  aggregate,  either (i) have a material  adverse
effect on the business, results of operations,  assets or financial condition of
Buyer or (ii) impair, hinder or adversely affect the ability of Buyer to acquire
the Interests as contemplated  hereby or to perform its  obligations  under this
Agreement.

         Section  4.2  Authority  Relative  to  this  Agreement.  Buyer  has all
requisite  authority  and power to execute and  deliver  this  Agreement  and to
perform its obligations hereunder.  The execution and delivery of this Agreement
and the  performance  by Buyer of its  obligations  hereunder have been duly and
validly  authorized  by all  required  action  on the part of Buyer and no other
proceedings on the part of Buyer are necessary to authorize this Agreement or to
perform Buyer's obligations hereunder.  This Agreement has been duly and validly
executed  and  delivered by Buyer and,  assuming  this  Agreement  has been duly
authorized, executed and delivered by Seller, this Agreement constitutes a valid
and binding agreement of Buyer, enforceable against Buyer in accordance with its
terms.

         Section 4.3 No Conflict or Violation;  Consents and Approvals.  Neither
the execution  and delivery of this  Agreement by Buyer nor the  performance  by
Buyer of its  obligations  hereunder  will (a)  require the  consent,  waiver or
approval of any Governmental Entity, except for consents and approvals described
in Section  4.3(a) of the Buyer  Disclosure  Schedule,  (b) require the consent,
waiver or  approval  of any Person  other than a  Government  Entity  except the
consents,  waivers  or  approvals  described  in  Section  4.3(b)  of the  Buyer
Disclosure Schedule (collectively with (a), the "Required Buyer Consents"),  (c)
conflict  with,  violate  or  result  in  any  default  under  the  Articles  of
Organization,  Operating  Agreement,  or other  similar  governing  documents of
Buyer,  (d) result in a violation or breach of, or  constitute  (with or without
notice  or lapse  of time or  both) a  default  (or  give  rise to any  right of
termination,  cancellation  or  acceleration or any obligation to repay) or give
rise to any  preferential  right to purchase or similar right under,  any of the
terms, conditions or provisions of any material indenture, mortgage, note, bond,
encumbrance,  license,  contract,  lease, franchise,  permit, agreement or other
material  instrument or  obligations to which Buyer is a party or by which Buyer
or any of its  properties  or assets may be bound,  or (e) violate any judgment,
order,  decree,  law,  statute,  regulation  or other  judicial or  governmental
restriction to which Buyer is subject.















                                       14
<PAGE>

         Section 4.4  Investment  Intent.  Buyer is not  acquiring the Interests
with a view to the  distribution  of the  Interests in a manner that would cause
Buyer to be an  "underwriter" as such term is defined in Section 2(a)(11) of the
Securities  Act. Buyer  understands  that the Interests have not been registered
under the Securities Act or other  applicable  Federal or state securities laws,
and  the  rules  and  regulations  promulgated  thereunder,  by  reason  of  the
contemplated sale of the Interests in a transaction exempt from the registration
requirements of the Securities Act and state  securities laws, and the rules and
regulations promulgated  thereunder.  Buyer represents that it is fully informed
as to  the  applicable  limitations  upon  any  distribution  or  resale  of the
Interests  under the  Securities  Act and  other  applicable  Federal  and state
securities laws, and the rules and regulations promulgated thereunder, and Buyer
agrees  that  it will  refrain  from  transferring,  distributing  or  otherwise
disposing  of the  Interests,  or any  interest  therein,  in such  manner as to
violate the registration requirements of the Securities Act or of any applicable
Federal  or state  securities  law,  and the rules and  regulations  promulgated
thereunder.  Buyer is an  "accredited  investor"  as defined  in Rule  501(a) of
Regulation D promulgated under the Securities Act.

         Section 4.5 Brokers and Finders. No broker, finder or investment banker
is entitled to any brokerage,  finder's or other fee or commission in connection
with the  transactions  contemplated by this Agreement  based upon  arrangements
made by or on behalf of Buyer.

         Section  4.6  Litigation.  Except as  otherwise  set forth in the Buyer
Disclosure Statement, there is no action, suit or proceeding pending, or, to the
knowledge of Buyer,  threatened,  against  Buyer or any  properties or rights of
Buyer before any Governmental Entity,  except actions,  suits or proceedings (i)
the adverse determination of which, individually or in the aggregate,  would not
be reasonably likely to have a material adverse effect on the business,  results
of operations,  assets or financial  condition of Buyer or materially impair the
ability of Buyer to perform its  material  obligations  under this  Agreement or
(ii)  that  would not  prevent  or delay the  consummation  of the  transactions
contemplated by this Agreement.



                                   ARTICLE V
                         TAX MATTERS; CERTAIN COVENANTS

         Section  5.1   Representations,   Warranties  and   Covenants.   Seller
represents, warrants and covenants to Buyer as follows:

         (a) There have been properly  completed and filed on a timely basis and
in  correct  form all Tax  Returns  required  to be filed on or before  the date
hereof with respect to the Assets.  As of the time of filing,  the foregoing Tax
Returns  correctly  reflected the facts regarding the income,  business,  assets
operations,  activities, status or other matters of CEC or any other information
required to be shown thereon.  An extension of time within which to file any Tax
Return  with  respect  to the  Assets  which  has not  been  filed  has not been
requested or granted.

         (b) For all taxable periods prior to and including the date hereof, all
Taxes shown as due on the Tax Returns referenced in Section 5.1(a) for which CEC
is or was liable have been paid.


                                       15
<PAGE>

         (c) CEC will not be required to file any Tax Returns as a result of the
transactions contemplated herein.

         (d) CEC is treated and taxable as a  disregarded  entity  under  Treas.
Reg. ss. 301.7701-3 and no election has been made by Seller or CEC for CEC to be
classified  as an  association  taxable as a  corporation  for  federal or state
income Tax purposes.

         (e) Neither  Seller nor CEC is a "United  States real property  holding
corporation"  within the meaning of Section  897(c)(2) of the Code and Seller is
not a person other than a United  States  person  within the meaning of the Code
and the transactions  contemplated herein are not subject to the Tax withholding
provisions of the Code.

         (f) Neither CEC nor the  property of CEC is subject to any tax liens or
Encumbrances  (other  than  Permitted  Encumbrances)  and  the  transfer  of the
Interests  to  Buyer  will not  subject  either  CEC or Buyer to any  transferee
liability for any Taxes that may be owing by Seller or its successors.

         (g)  The  sale  and  purchase  of the  Interests  will  not  terminate,
invalidate  or cause the  recapture  of any Tax  abatements,  Tax  credits,  Tax
exemptions, Tax rebates and/or deferred or excluded Taxes which are in effect or
pending for CEC or the Assets.

         (h) Other than as provided in Section 5.3 below, (i) CEC is not a party
to nor liable to make any payments  under any type of Tax  indemnity  agreement,
Tax  allocation  agreement or Tax sharing  agreement  and (ii) there shall be no
liability of CEC on or after the Closing Date under any such agreement.

         Section 5.2 Tax Matters.  (a) Transfer  Taxes.  Buyer shall pay all pay
all sales, use, transfer, real property transfer,  recording, stock transfer and
other similar taxes and fees ("Transfer  Taxes"),  if any,  arising out of or in
connection  with the transfer of the  Interests to Buyer,  and shall  indemnify,
defend and hold harmless Seller with respect to such Transfer Taxes.

         (b)  Income  Taxes  Arising  from   Transaction.   Subject  to  Buyer's
obligation  to pay certain  Transfer  Taxes  pursuant to Section  5.2(a)  above,
Seller shall be liable for all other Taxes, including without limitation, income
Tax, which may become due, as a result of the various transactions  contemplated
by Section 2.2 of this Agreement.

         (c) Section 1445 Certificate.  If required,  Seller shall furnish Buyer
on or before the Closing Date a certification of Seller's  non-foreign status as
set forth in Section 1445 of the Code and the Treasury  Regulations  promulgated
thereunder.

         Section 5.3 Allocation of Purchase  Price.  Seller and Buyer agree that
the Purchase Price shall be allocated  among the Assets  consistent with Exhibit
"F" hereto, which has been prepared in accordance with Section 1060 of the Code,
and the regulations promulgated thereunder.  Buyer and Seller agree to adopt and
utilize the amounts so allocated for purposes of filing Internal Revenue Service
Form 8594 and all federal,  state and other Tax Returns  filed by it and it will
not voluntarily take any position inconsistent therewith upon examination of any
such Tax Return,  in any claim,  in any  litigation or otherwise with respect to
such Tax Returns. Seller and Buyer each agree to provide the other promptly with
any other information required to complete Form 8594.  Notwithstanding any other
provisions of this Agreement,  the foregoing agreement shall survive the Closing
without limitation.


                                       16
<PAGE>

                                   ARTICLE VI
                                    COVENANTS

         Section  6.1   Condition   of  the  Assets;   Disclaimers.   Except  as
contemplated by this Agreement,  as set forth in the Seller Disclosure  Schedule
or with the prior written  consent of Buyer,  during the period from the date of
this Agreement to the Closing,  Seller will not, and will not permit CEC to, (i)
amend,  supplement  or otherwise  modify any of the  Contracts in any respect or
(ii)  issue,  or enter  into any  agreement  to  issue  or grant  rights  to the
membership  interests in CEC, including,  without  limitation,  the Interests to
anyone  other than Seller.  In  connection  with the  transfer of the  Interests
contemplated by this Agreement,  Buyer acknowledges that it, or its agents, have
had an opportunity to inspect the Assets. Subject to the terms and conditions of
this Agreement,  Buyer hereby accepts as of the date hereof the condition of the
Assets on an "AS IS" basis.  SELLER MAKES NO REPRESENTATIONS OR WARRANTIES OTHER
THAN AS  EXPRESSLY  SET  FORTH  IN  ARTICLE  III OF THIS  AGREEMENT  AND  HEREBY
DISCLAIMS ANY OTHER  REPRESENTATION OR WARRANTY INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF FITNESS FOR ANY PARTICULAR  PURPOSE OR INTENDED USE AND ANY WARRANTY
AS TO THE  CONDITION  OF THE ASSETS.  IN NO EVENT SHALL SELLER BE LIABLE FOR ANY
SPECIAL,  CONSEQUENTIAL,  INCIDENTAL  OR  INDIRECT  DAMAGES  ARISING OUT OF THIS
AGREEMENT OR THE OWNERSHIP AND OPERATION OF THE ASSETS.

         Section 6.2 Fees and Expenses.  Except as otherwise  expressly provided
herein,  Seller and Buyer shall each bear their own expenses in connection  with
the  negotiation  and  preparation  of this  Agreement  and the  transfer of the
Interests  contemplated  hereby,  including  without  limitation  the  fees  and
expenses of their respective counsel, accountants, bankers and consultants. Such
obligations shall survive any termination of this Agreement.  It is acknowledged
and agreed  that the fees and  expenses  of O'Brien & Gere  Engineers,  Inc.  in
connection  with  the  preparation  of  the   Environmental   Reports  shall  be
exclusively payable by Seller.

         Section 6.3 Environmental Liability. Upon Closing, Seller shall have no
liability to Buyer with  respect to any  environmental  matters  relating to the
sites at which the Assets are located (as more specifically described in Exhibit
"G" hereto, the "Sites").

         Section 6.4  Contracts.  CEC shall not enter into,  or be subject to or
bound by, any contracts, agreements or understandings with any Person other than
the Contracts.




                                       17
<PAGE>

         Section  6.5  Further  Assurances.  Upon the terms and  subject  to the
conditions  herein  provided,  each of the parties  hereto agrees to execute and
deliver such  instruments  as the other party hereto may  reasonably  request in
order to transfer the Interests.

         Section  6.6  Environmental  Reports.  Prior to the  execution  of this
Agreement,  Buyer  has  delivered  to  Seller  two  (2)  copies  of the  Phase I
environmental  assessments with respect to each of the Sites prepared by O'Brien
& Gere Engineers,  Inc.; such Phase I environmental assessment did not recommend
additional  testing or other examination (the Phase I environmental  assessments
being the "Environmental Reports").

         Section 6.7 Access to Assets. Prior to Closing,  Seller shall (a) cause
Buyer and its authorized representatives to have reasonable access to the Assets
and (b) furnish to Buyer such other information relating to the Assets as it may
reasonably request.

         Section 6.8 Notice to Guilford Mills.  Not later than 10 days after the
execution of this  Agreement  by the parties  hereto,  CEC will provide  written
notice (which shall include a copy of this  Agreement) to Guilford  Mills of its
Right of First Refusal pursuant to the terms of the First Refusal Agreement.

         Section 6.9 Name Change of CEC. (a)  Effective as of the Closing  Date,
Buyer shall take all steps necessary or appropriate to change the name of CEC to
a name that does not include the word "Cogentrix",  including without limitation
filing with the North  Carolina  Secretary of State an amendment to the articles
of organization of CEC changing its name.

         (b) Buyer hereby acknowledges and agrees that nothing in this Agreement
grants or shall be deemed to grant to Buyer the right to use or any  interest in
the name "Cogentrix" or any trademark, trade name, service mark or other similar
mark or similar  right which is a derivative  of, or  confusingly  similar to or
dilutive of, the name "Cogentrix" (the "Seller Mark").  The prohibitions in this
Section  6.9(b) shall apply to any and all uses  whatsoever  of the Seller Mark.
including,  without  limitation,  the use of the Seller Mark on any  identifying
signs on any properties of the Business.

         (c)  Neither  Buyer  nor any of its  Affiliates  shall use any signs or
stationery,  purchase  order forms,  packaging or other  similar  paper goods or
supplies,  advertising and promotional materials,  product, training and service
literature and materials, or computer programs or like materials  (collectively,
the  "Specified  Supplies")  that  include the word  "Cogentrix"  or contain any
trademarks,  trade names,  service marks or corporate or business names, derived
from or including the words  "Cogentrix"  (in logotype design or any other style
or design) in whole or in part.  Buyer shall not  reorder,  produce or reproduce
any  Specified  Supplies that include the word  "Cogentrix"  or contain any such
trademarks, trade names, service marks or corporate or business names.





                                       18
<PAGE>

                                  ARTICLE VII
                     CONDITIONS TO EACH PARTY'S OBLIGATIONS

         The  obligation of each party to effect the  transactions  contemplated
hereby  shall be  subject  to the  receipt,  or  written  waiver  by each of the
parties, at or prior to the Closing of all Required Seller Consents and Required
Buyer Consents.

                                  ARTICLE VIII
                       CONDITIONS TO SELLER'S OBLIGATIONS

         The  obligations  of  Seller to effect  the  transactions  contemplated
hereby shall be subject to the fulfillment,  or written waiver by Seller,  at or
prior to the Closing, of each of the following conditions:

         Section   8.1    Representations   and   Warranties   of   Buyer.   The
representations  and  warranties  of Buyer  contained  herein  shall be true and
correct as of the date hereof and at and as of the  Closing  Date as though such
representations  and warranties  were made at and as of such date unless limited
by their terms to a prior date.

         Section 8.2 Performance. Buyer shall have performed and complied in all
material  respects with all  agreements,  obligations,  covenants and conditions
required by this Agreement to be performed or complied with by Buyer on or prior
to the Closing.

         Section 8.3  Certificates.  Buyer shall have furnished Seller with such
certificates  to evidence its  compliance  with the conditions set forth in this
Article VIII in such form as Seller may reasonably request.

         Section 8.4 No Injunction or Proceeding.  No statute, rule, regulation,
executive  order,  decree,  preliminary  or permanent  injunction or restraining
order  shall  have  been  enacted,  entered,  promulgated  or  enforced  by  any
Governmental  Entity which  prohibits or restricts the transfer of the Interests
as contemplated hereby.

         Section 8.5 Deliveries at Closing. Buyer shall have delivered to Seller
the documents to be delivered at Closing pursuant to Section 2.3(c) hereof.

                                   ARTICLE IX
                        CONDITIONS TO BUYER'S OBLIGATIONS

         The obligation of Buyer to effect the transactions  contemplated hereby
shall be subject to the fulfillment,  or written waiver by Buyer, at or prior to
the Closing, of each of the following conditions:





                                       19
<PAGE>

         Section   9.1   Representations   and   Warranties   of   Seller.   The
representations  and  warranties  of Seller  shall be true and correct as of the
date hereof and at and as of the Closing Date as though such representations and
warranties  were made at and as of such date unless  limited by their terms to a
prior date.

         Section 9.2  Performance  by Seller.  Seller shall have  performed  and
complied in all material  respects with all agreements,  obligations,  covenants
and  conditions  required by this  Agreement to be performed or complied with by
Seller on or prior to the Closing.

         Section 9.3  Certificates.  Seller shall have furnished Buyer with such
certificates  to evidence its  compliance  with the conditions set forth in this
Article IX in such form as Buyer may reasonably request.

         Section 9.4 No Injunction or Proceeding.  No statute, rule, regulation,
executive  order,  decree,  preliminary  or permanent  injunction or restraining
order  shall  have  been  enacted,  entered,  promulgated  or  enforced  by  any
Governmental  Entity which  prohibits or restricts the transfer of the Interests
as contemplated hereby.

         Section  9.5 No  Material  Adverse  Change.  Since  the  date  of  this
Agreement,  there shall have been no material adverse change in the condition of
the Assets in the aggregate.

         Section 9.6 Deliveries at Closing. Seller shall have delivered to Buyer
the documents to be delivered at Closing pursuant to Section 2.3(b) hereof.

         Section 9.7 Due Diligence. Buyer shall have completed its inspection of
each  of CEC  and the  Assets  and the  results  of  such  inspection  shall  be
satisfactory  to Buyer in its sole  discretion,  including  without  limitation,
title to the Facilities,  the terms of the Contracts, the operating condition of
the Assets and all records  related thereto and the existence of all appropriate
permits.

                                   ARTICLE X
            TERMINATION AND ABANDONMENT; INDEMNIFICATION; ARBITRATION

         Section 10.1 Termination.  This Agreement may be terminated at any time
prior to the Closing:

         (a) by mutual consent of Buyer and Seller;

         (b) by  Seller if the  Closing  shall  not have  occurred  on or before
September 17, 2002 (the "Termination Date");

         (c) by  Buyer or  Seller  if any of the  Required  Seller  Consents  or
Required  Buyer  Consents,  the  receipt of which is a  condition  precedent  to
consummating  the  Closing,  shall  have  been  denied  (and,  in the  case of a
governmental  consent,  a petition for  rehearing or refiling of an  application
initially denied without prejudice shall also have been denied);

         (d) by Buyer or Seller, if any Governmental Entity shall have issued an
order,  decree or ruling or taken any other  action  restraining,  enjoining  or
otherwise  prohibiting  a transfer of the Interests as  contemplated  hereby and
such  order,  decree,  ruling  or other  action  shall  have  become  final  and
nonappealable;


                                       20
<PAGE>

         (e) by Buyer if it is not in material breach of its  obligations  under
this  Agreement  and  there  has been a breach in any  material  respect  of any
material  representation,  warranty,  covenant or  agreement  contained  in this
Agreement  on the part of Seller and as a result of such  breach the  conditions
set forth in Article VII or IX, as the case may be, would not then be satisfied;
provided,  however, that if such breach is curable by Seller or CEC prior to the
Termination  Date through the exercise of its or their  commercially  reasonable
efforts,  then  for  so  long  as  Seller  or  CEC  continue  to  exercise  such
commercially  reasonable  efforts,  Buyer may not terminate this Agreement under
this Section  10.1(e)  unless such breach is not cured prior to the  Termination
Date (but no cure  period  shall be  required  for a breach  which by its nature
cannot be cured); or

         (f) by Seller if  neither it nor CEC are in  material  breach of its or
their  obligations  under  this  Agreement  and  there  has been a breach in any
material respect of any material representation, warranty, covenant or agreement
contained in this  Agreement on the part of Buyer and as a result of such breach
the  conditions  set forth in Article VII or VIII, as the case may be, would not
then be satisfied;  provided,  however,  that if such breach is curable by Buyer
prior  to  the  Termination  Date  through  the  exercise  of  its  commercially
reasonable  efforts,  then  for so long as  Buyer  continues  to  exercise  such
commercially  reasonable efforts,  Seller may not terminate this Agreement under
this Section  10.1(f)  unless such breach is not cured prior to the  Termination
Date (but no cure  period  shall be  required  for a breach  which by its nature
cannot be cured).

         (g) by  Seller  if  either  of CEC or  Seller  receives  the  Notice of
Exercise.

         Section  10.2  Procedure  and  Effect of  Termination.  In the event of
termination  of this  Agreement  pursuant to Section 10.1 hereof,  by one party,
written notice thereof shall forthwith be given to the other party,  and, except
for the second and third sentences of Section 2.2(b), Section 6.2 and Article XI
of  this  Agreement  (each  of  which  shall  survive  the  termination  of this
Agreement), and except as set forth below, this Agreement shall terminate and be
void  and have no  effect  and the  transactions  contemplated  hereby  shall be
abandoned. If this Agreement is terminated as provided herein:

         (a)  All  information,  documents,  work  papers  and  other  materials
received by Buyer with respect to the business,  operations, assets or financial
condition  of  Seller,   CEC  or  the  Assets   shall  remain   subject  to  the
Confidentiality Agreement; and

         (b) Except as otherwise  expressly set forth  herein,  no party to this
Agreement shall have any liability  hereunder to any other party,  except (i) as
stated in the second and third  sentences of Section  2.2(b) of this  Agreement,
(ii) for any breach by such party of the terms and provisions of this Agreement,
(iii) as stated in paragraph (a) of this Section  10.2,  and (iv) as provided in
the Confidentiality Agreement.


                                       21
<PAGE>

         Section 10.3 Survival of Representations, Warranties and Covenants.

         (a) The  representations  and warranties  contained in this  Agreement,
other than those set forth in Section  3.11 and in Article V, shall  survive the
Closing and remain in full force and effect for a period of one year thereafter.
The representations  and warranties  contained in Section 3.11 shall not survive
the Closing.  The representations and warranties  contained in Article V of this
Agreement  shall  survive the Closing and remain in full force and effect  until
the  expiration  of  the  applicable  statutes  of  limitation,   including  any
extensions  thereof.  All covenants and agreements  made by either party in this
Agreement  shall  survive the Closing  indefinitely  or such lesser period as is
provided  with  respect  thereto  in this  Agreement.  No claim may be made with
respect to the breach of any  representation  or warranty  under this  Agreement
after the expiration of the survival period of such  representation and warranty
as provided herein.

         (b) The sole and exclusive remedy for any breach of any representation,
warranty,  covenant or  agreements  shall be pursuant  to Section  10.4  hereof,
except in the case of fraud.  Under no  circumstances  shall  Seller or Buyer be
liable  to the  other  party or any  Affiliate  or  Representative  thereof  for
consequential, incidental or punitive damages in connection with this Agreement.

         Section  10.4  Indemnification.  (a) Seller  shall  indemnify  and hold
harmless  Buyer and its  Affiliates and  Representatives  (collectively,  "Buyer
Indemnified Parties") from and against any Damages arising from or in connection
with (i) any material inaccuracy in any representation or the material breach of
any  warranty of Seller under this  Agreement  and (ii) any failure of Seller to
duly perform or observe any material term,  provision,  covenant or agreement to
be performed or observed by Seller pursuant to this Agreement.

         (b) Buyer shall  indemnify and hold harmless  Seller and its Affiliates
and Representatives  (collectively,  the "Seller Indemnified  Parties") from and
against  any  Damages  to the  extent  they are the  result of (i) any  material
inaccuracy in any representation or the material breach of any warranty of Buyer
under this Agreement or (ii) any failure of Buyer to duly perform or observe any
material term,  provision,  covenant or agreement to be performed or observed by
Buyer pursuant to this Agreement.

         (c)  Notwithstanding  anything  herein to the  contrary,  none of Buyer
Indemnified  Parties  shall be  entitled  to  indemnification  by Seller for any
Damages arising from any breach of any covenant or warranty or inaccuracy of any
representation  of which Buyer had  specific  knowledge  at or prior to Closing,
including,  without limitation,  any such breach or inaccuracy known to Buyer by
reason of Seller having delivered written notice thereto, either in a disclosure
schedule or a supplemented  disclosure schedule or an officer's certificate,  at
or prior to Closing.

         (d) No action,  claim or setoff for Damages subject to  indemnification
under this  Section  10.4  shall be  brought or made with  respect to claims for
Damages  resulting from a breach of any covenant or agreement  contained in this
Agreement  after the date on which such  representation,  warranty,  covenant or
agreement shall terminate  pursuant to Section 10.3 hereof;  provided,  however,
that any  claim  made with  reasonable  specificity  by the party  hereto or its
Affiliates or Representatives  seeking indemnification (the "Indemnified Party")
to the party from which  indemnification  is sought (the  "Indemnifying  Party")
within  the time  periods  set forth  above  shall  survive  (and be  subject to
indemnification) until it is finally and fully resolved.


                                       22
<PAGE>

         (e) An  Indemnified  Party shall give notice to an  Indemnifying  Party
promptly after such Indemnified  Party has received written notice of any actual
or threatened  Claim as soon as reasonably  practical (but in no event more than
10 business days of such receipt),  and shall permit the  Indemnifying  Party to
assume the defense of any such Claim;  provided that (A) the  Indemnified  Party
may participate in such defense at its own expense (unless the Indemnified Party
shall  have  reasonably  concluded,  based  upon a written  opinion  of  outside
counsel, that there is a reasonable likelihood of a conflict of interest between
the Indemnifying  Party and the Indemnified  Party in such action, in which case
the fees and expenses of one separate firm of counsel shall be at the expense of
the Indemnifying  Party); (B) the Indemnifying Party must notify the Indemnified
Party  in  writing  within  45  days of the  receipt  of such  notice  from  the
Indemnified Party of its intent to assume the defense of any Claim; and (C) that
the failure of the Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations hereunder, unless, and only to
the extent that, the  Indemnifying  Party is actually and materially  prejudiced
thereby.  The  Indemnifying  Party shall have full  authority to  determine  all
action to be taken  with  respect  thereto;  provided,  however,  that,  (i) the
Indemnified  Party will not  consent to the entry of any  judgment or enter into
any  settlement  with respect to the Claim without the prior written  consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),  (ii)
the  Indemnifying  Party will not consent to the entry of any  judgment or enter
into any  settlement  with  respect to the Claim  unless a written  agreement is
obtained  releasing the Indemnified Party from all liability  thereunder,  (iii)
the  Indemnifying  Party will not consent to the entry of any  judgment or enter
into any  settlement  with respect to a Claim,  which  involves an injunction or
other  equitable  relief,  without the consent of the Indemnified  Party,  which
consent will not be unreasonably  withheld, and (iv) the Indemnifying Party will
not  consent  to the entry of any  judgment  or enter into any  settlement  with
respect to a 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.  If the  Indemnifying
Party does not elect to contest any such claim, the Indemnifying  Party shall be
bound by the result obtained with respect  thereto by the Indemnified  Party. An
Indemnified  Party shall furnish such information  regarding itself or the Claim
in question as such Indemnifying  Party may reasonably request in writing and as
shall be  reasonably  required  in  connection  with  defense  of such Claim and
litigation resulting therefrom.

         Section  10.5  Arbitration.  (a) The  parties  agree  that  any and all
disputes,  controversies  or claims among the parties arising out of or relating
to this  Agreement  (whether or not the  specific  subject  matter is  otherwise
expressly  herein  stated to be subject to or resolved in  accordance  with this
Section 10.5) shall be resolved by consultation  and agreement among the parties
or, if notice is given by either  party as provided  below and the matter is not
settled  within  five  (5) days  thereafter,  by  reference  to  arbitration  in
accordance with the Commercial  Arbitration Rules (as amended from time to time)
of the American Arbitration Association and the following provisions;  provided,
the  provisions  of this Section 10.5 shall prevail in the event of any conflict
with such rules.

         (b) The party requesting arbitration shall serve upon the other party a
written demand for arbitration stating the substance of the controversy, dispute
or claim and the contention of the party requesting arbitration and the name and
address of the  arbitrator  appointed by it. The recipient of such demand shall,


                                       23
<PAGE>

within  thirty  (30) days after  such  receipt,  by written  notice to the party
requesting  arbitration,  either agree to the appointment of such arbitrator (in
which event such arbitrator shall promptly  arbitrate the dispute and his or her
decision  shall be final  and  binding  upon the  parties)  or  appoint a second
arbitrator,  and the two  arbitrators  shall appoint a third (in which event the
decision or award of any two  arbitrators  shall be final and  binding  upon the
parties).  In the  event  that  the  two  arbitrators  fail to  appoint  a third
arbitrator within thirty (30) days of the appointment of the second  arbitrator,
either arbitrator, or either party to the arbitration, may apply to the American
Arbitration  Association for  appointment of the third  arbitrator in accordance
with the Rules.  Should the party upon whom the demand for  arbitration has been
served fail or refuse to appoint an  arbitrator  within  thirty  (30) days,  the
single  arbitrator shall have the right to decide alone,  and such  arbitrator's
decision or award shall be final and binding upon the parties.

         (c) Each  arbitrator  shall be  chosen  from the  American  Arbitration
Association's  Large and  Complex  Case  Panel for the  Southeast  Region of the
United States, have at least fifteen years experience in the United States as an
attorney in private practice or in a corporate legal department and shall not be
a past or present  officer,  director or employee of, or have any interest in or
material  relationship  with,  any party  hereto or any  Affiliate  of any party
hereto.

         (d) If any person  appointed as an  arbitrator  shall die, fail to act,
resign, become disqualified,  or be removed by the person, entity, or persons or
entities,  appointing  him, the person or entity,  or persons or  entities,  who
appointed him shall, within fifteen (15) days after such death,  failure to act,
resignation,  disqualification or removal,  appoint a substitute arbitrator.  If
such substitute  appointment is not made within fifteen (15) days, any party may
apply to the American Arbitration Association for appointment of such substitute
arbitrator,  and such  appointment  shall be  binding on the  parties.  Any such
arbitration proceeding shall be held in the English language in Charlotte, North
Carolina.  Any  arbitral  award  shall be in  writing  in the form of a reasoned
opinion,  including  findings of fact and conclusions of law, which law shall be
the law of the State of North Carolina, and confirmation and enforcement thereof
may be rendered thereon by any court having jurisdiction upon application of any
party to the  arbitration  proceeding.  The costs and  expenses  incurred in the
course of such  arbitration  (including  reasonable  attorney's  fees and costs)
shall be borne by the party against whom the decisions  and  conclusions  of the
arbitration  panel are rendered;  provided,  if the arbitration panel determines
that its decisions are not rendered  wholly against the favor of one party,  the
arbitration  panel shall be authorized  to apportion  such costs and expenses in
the manner it may deem fair and just in light of the merits of the  dispute  and
its resolution.

                                   ARTICLE XI
                                  MISCELLANEOUS

         Section  11.1  Amendment  and  Modifications.  This  Agreement  may  be
amended,  modified or supplemented  at any time by the parties hereto,  provided
that any such  amendment,  modification  or  supplement  shall be set forth in a
writing duly executed by Seller and Buyer.


                                       24
<PAGE>

         Section 11.2 Extension;  Waiver. At any time prior to the Closing,  the
parties hereto  entitled to the benefits of the respective term or provision may
(i) extend the time for the  performance of any of the obligations or other acts
of the other parties hereto,  (ii) waive any inaccuracies in the representations
and  warranties  contained  herein or in any  document,  certificate  or writing
delivered  pursuant  hereto  or (iii)  waive  compliance  with  any  obligation,
covenant,  agreement or condition contained herein. Any agreement on the part of
any party to any such extension or waiver shall be valid only if set forth in an
instrument in writing  signed on behalf of the parties  entitled to the benefits
of such extended or waived term or provision.  Notwithstanding the foregoing, in
no event shall the Closing be extended beyond the Termination Date.

         Section  11.3  Entire   Agreement;   Assignment.   This  Agreement  (a)
constitutes  the entire  agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral,  between the parties with respect to the subject matter hereof
(other  than the  Confidentiality  Agreement)  and (b) may not be  assigned by a
party hereto  without the consent of the other party;  provided,  however,  that
after the Closing, Buyer may assign its rights under this Agreement to an entity
wholly-owned  by Buyer upon written  notice of such  assignment to Seller and an
express written assumption by such entity of the obligations of Buyer hereunder.
Such  assignment and assumption  shall not release Buyer from any obligations it
may have  hereunder.  This  Agreement  shall be  binding  and will  inure to the
benefit of the parties hereto and their  respective  successors,  nominees,  and
assignees.

         Section  11.4  Validity.  The  invalidity  or  unenforceability  of any
provision of this Agreement shall not affect the validity or  enforceability  of
any other provision of this Agreement,  each of which shall remain in full force
and effect.

         Section 11.5 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given:

         (a)      If to Buyer, to:

                  Green Power Energy Holdings LLC
                  3212 Wickford Road
                  Wilmington, NC 28409
                  Attention:  President, CEO
                  Facsimile:  (910) 392-7689


                  with a copy to:

                  Stewart & Associates
                  Suite 1400
                  Nemours Building
                  1007 Orange Street
                  Wilmington, Delaware 19801
                  Attention: Carl J. Fernandes
                  Facsimile: (302) 652-7211



                                       25
<PAGE>

         (b)      if to Seller, to:

                  Cogentrix of North Carolina, Inc.
                  9405 Arrowpoint Boulevard
                  Charlotte, North Carolina 28273
                  Attention: General Counsel
                  Facsimile: (704) 529-1006

                  with a copy to:

                  Moore & Van Allen PLLC
                  100 North Tryon Street, Suite 4700
                  Charlotte, North Carolina 28202
                  Attention:  Stephen D. Hope
                  Facsimile: (704) 331-1159


or such other address or facsimile  number as a party may  hereafter  specify by
like notice to the other party. Each such notice, request or other communication
shall be effective (i) if given by facsimile, when such facsimile is transmitted
to the facsimile  number  specified  herein and the appropriate  confirmation is
provided,  (ii) if given via United States mail, three days after such notice is
deposited  in the mail in a postage  pre-paid  envelope or (iii) if given by any
other means, when delivered at the address  specified herein;  provided that any
such  transmittal  or delivery  after 5 p.m.  local time of the recipient on any
business  day of the  recipient  shall  not be  deemed  received  until the next
business day.

         Section 11.6  Governing  Law. This  Agreement  shall be governed by and
construed in accordance  with the laws of the State of North  Carolina,  without
regard to principles of conflicts of laws.

         Section 11.7  Publicity.  Except as  otherwise  required by law, for so
long as this  Agreement is in effect,  neither  Seller nor Buyer or any of their
respective  affiliates shall issue or cause the publication of any press release
or other public  announcement  with respect to the transactions  contemplated by
this Agreement  without the express prior written approval of the other parties.
To the extent any press release or other public announcement is required by law,
the entity seeking to make such press release or announcement  shall consult the
other party hereto  prior  thereto and give such other party an  opportunity  to
comment thereon.

         Section 11.8 Descriptive Headings.  The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.


                                       26
<PAGE>

         Section 11.9 Counterparts. This Agreement may be executed in any number
of  counterparts,  each of which shall be deemed to be an  original,  but all of
which shall constitute one and the same agreement.



         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

































                                       27
<PAGE>

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



                                           GREEN POWER ENERGY HOLDINGS LLC



                                             By:    /S/
                                                --------------------------------

                                             Name:  Wayne Coverdale
                                                  ------------------------------

                                             Title: President
                                                   -----------------------------



                                           COGENTRIX OF NORTH CAROLINA, INC.



                                             By:    /S/
                                                --------------------------------

                                             Name:  Gerard B. Mack
                                                  ------------------------------

                                             Title: Vice President Development
                                                   -----------------------------

















                                       28
<PAGE>

                                                              EXHIBIT G
                                                              ---------
                                                              To the Securities
                                                              Purchase Agreement

                           LEGAL DESCRIPTIONS OF SITES
                           ---------------------------

Kenansville:
------------

         BEGINNING  at a  point  designated  "J" on  map  entitled  "Survey  for
Cogentrix of North Carolina,  Inc.  "Kenansville Plant" dated November 15, 1984,
by Lloyd R. Walker,  Registered  Land  Surveyor,  said point of BEGINNING  being
located S 51(degree) 54' 00" E 103.05 feet from a point marked by an iron in the
center of the pavement of N.C. Hwy. No. 11, designated "A" on aforesaid map, and
being the westernmost corner of the original 12.00 acre tract of which this is a
part,  as set out in Deed  Book 873 page 281 (with  point  "A"  being  located N
55(degree)  29' 10" E 655.69 feet from an old spike at the  intersection  of the
centerline of the right of way of N.C.  Highway No. 11 and the centerline of the
right of way of N.C.  State Road 1300);  and  running  thence from said point of
BEGINNING a new line N 38(degree) 06' 00" E 163.00 feet to a new point; thence a
new line N 58(degree) 05' 43" E 406.50 feet to a new point;  thence a new line S
78(degree)  02' 38" E 142.59  feet to a new point in the  northeast  line of the
original  12.00 acre tract;  thence with said line S 51(degree) 56' 25" E 634.08
feet to a point  marked  by an old iron  pipe,  the  easternmost  corner of said
original  12.00 acre tract;  thence with the  southeast  line of said 12.00 acre
original  tract S  50(degree)  10' 15" W 622.08 feet to a point marked by an old
iron pipe, the  southernmost  corner of said 12.00 acre original  tract;  thence
with the southwest line of said 12.00 acre original tract N 51(degree) 54' 00" W
771.00 feet to the point of  BEGINNING,  containing  10.76 acres,  more or less,
shown as tract No. 1 on map entitled  "Survey for  Cogentrix of North  Carolina,
Inc.  "Kenansville  Plant,  " and  being a  portion  of that  12.00  acre  tract
described in a deed to GUILFORD  MILLS,  INC.;  dated  September  25, 1980,  and
recorded in Deed Book 873, page 281 of the Duplin County Registry.

Warsaw:
-------

                     (Warsaw, Duplin County, North Carolina)
                                   (1.05 acre)

Property situated in Warsaw,  Duplin County,  North Carolina,  more particularly
described as follows:

All that certain tract or parcel of land lying in the township of Warsaw, Duplin
County,  North Carolina and being approximately a 1.05 acre tract bounded on the
North by the property owned,  now or formerly,  by John Jenkins and on the South
and West by the property owned, now or formerly, by Clyde Bradshaw,  recorded in
Deed Book 546, Page 330, and on the East by the property owned,  now or formerly
by C.S.X.  Transportation  Railroad  and being more  particularly  described  as
follows:

BEGINNING  at an old iron rebar  located in the  westerly  line of the  property
owned, now or formerly by C.S.X.  Transportation Railroad, said point also being
the  southerly  line of the  property  owned,  now or formerly by John  Jenkins;
thence running along the westerly line of the property owned, now or formerly by

<PAGE>

C.S.X.  Transportation  Railroad and running  approximately  parallel  with N.C.
Highway  117,  South  13-15-00  East  443.82  feet to an iron  rebar  set in the
northerly  line of the  property  owned,  now or  formerly,  by Clyde  Bradshaw,
recorded in Book 546, Page 330;  thence running with a ditch South 61-00-00 West
103.90 feet to an iron rebar set;  thence with the easterly line of the property
owned, now or formerly by Clyde Bradshaw,  recorded in Book 546, Page 330, North
13-15-00 West 472.20 feet to an old iron rebar located in the southerly  line of
the property  owned,  now or formerly,  by John Jenkins;  thence  running with a
ditch  North  76-51-06  East  100.00  feet to the POINT AND PLACE OF  BEGINNING.
Containing  1.05  acres,  more  or  less,  as  shown  on the  Survey  for  ReUse
Technology, Inc. prepared by Lloyd R. Walker, R.L.S. No. L-1333, dated August 7,
1992, last revised May 11, 1993.

And being the same property conveyed by Cumberland  Elkhorn Coal & Coke, Inc. to
Oxbow Carbon & Minerals, Inc., by deed dated March 10, 1988 and recorded in Deed
Book 998, Page 169, Duplin County Registry.

























                                       2
<PAGE>

                           SELLER DISCLOSURE SCHEDULE
                           --------------------------


Section 1.        Assets.
----------        -------

See attached list.


<PAGE>


Asset ID       Asset Description                           Asset Category
--------       -----------------                           --------------
00000047       Warsaw Motors PTL Truck                     Autos & Trucks
00000059       Jim Russ Chevy Truck                        Autos & Trucks
00000046       Vanstar Cpter Inv#4982611                   Computer Hardware
00000053       Global Linking Solut Inv#1020               Computer Hardware
00000055       Dell Computer Equip                         Computer Hardware
00000056       Dell 450k GX/L                              Co mputer Hardware
00000058       3 Cable Drops For Cpters                    Computer Hardware
00000068       Dell Performance Monitoring                 Computer Hardware
00000069       Dell 800 GX 110/L 133MHZ Cache              Computer Hardware
00000070       Dell Poweredge 1300 Base 800MH              Computer Hardware
00000107       Dell PIII 866                               Computer Hardware
00000045       Ricker Tech Inv#9800105                     Computer Software
00000005       Coal Facility                               Coal Facility
00000004       Electric Plant                              Electric Plant
00000003       Car Tel & Tel                               Office Equipment
00000038       Forms&Supply Phone Answer Mach              Office Equipment
00000039       Forms & Supply Vertical File                Office Equipment
00000040       Forms&Supply Desk Chair Bookcase            Office Equipment
00000041       Forms & Supply Desk Bookcase                Office Equipment
00000042       JD Chambers Bookcases                       Office Equipment
00000043       Forms & Supply File                         Office Equipment
00000044       Mop & Bucket Floor Buffer                   Office Equipment
00000060       Contren Filing Cabinet                      Office Equipment
00000101       Reclass Office Furniture                    Office Equipment
00000002       Tarheel Tractor                             Machinery & Equipment
00000027       MMR/Wallace Lab Equipment                   Machinery & Equipment
00000029       MMR/Wallace Workbenches                     Machinery & Equipment
00000030       MMR/Wallace Speedomax 100                   Machinery & Equipment
00000031       Fischer/Porter Chlorinatior                 Machinery & Equipment
00000033       Holmes Crusher Riffle Hopper                Machinery & Equipment
00000034       Industrial Supply                           Machinery & Equipment
00000035       Power Handling Lift Truck ACC               Machinery & Equipment
00000036       Fairbank Scales60x10Link Steel              Machinery & Equipment
00000037       Fairbanks Scales Pit Install                Machinery & Equipment
00000061       Panasonic Copier                            Machinery & Equipment
00000062       Detroit Stocker Ultrafd Dist                Machinery & Equipment
00000063       United Conveyor Mixer/Unloader              Machinery & Equipment
00000065       Pug Mill Additions                          Machinery & Equipment
00000066       Coal Feeders & Graters for TDF              Machinery & Equipment
00000067       Printer from EHS                            Machinery & Equipment
00000074       LB Smith L90 Loader                         Machinery & Equipment
00000076       Dataprint                                   Machinery & Equipment
00000086       Water Weights                               Machinery & Equipment



                                       2
<PAGE>


Asset ID       Asset Description                           Asset Category
--------       -----------------                           --------------
00000087       Progressive Crane                           Machinery & Equipment
00000094       Dataprint                                   Machinery & Equipment
00000095       Drayton Corp Acoustic Cleaner               Machinery & Equipment
00000096       Drayton Corp Acoustic Cleaner               Machinery & Equipment
00000097       AC Controls Inc Rosemont Analy              Machinery & Equipment
00000098       AC Controls Inc Rosemont Analy              Machinery & Equipment
00000099       Vanstar Laserjet Printer                    Machinery & Equipment
00000100       Western Carolina Forklift                   Machinery & Equipment
00000105       Machine & Welding Supply                    Machinery & Equipment
00000106       Automated External Defibrillat              Machinery & Equipment
00000051       Coal Facility Retention Basin               Plant Improvements
00000108       International Chimmney-CEM                  Plant Improvements
00000109       CEMS HARDWR,SOFTWR,                         Plant Improvements
               REGULATOR
00000110       CEMS INSTALLATION                           Plant Improvements
00000111       CEMS SYSTEM                                 Plant Improvements
00000112       CEMS INSTALLATION                           Plant Improvements
00000113       Cdt for asset#00000111 (CEMS)               Plant Improvements





















                                       3
<PAGE>


                                                                        Quantity
Item           Spare Part Description                                    On Hand
----           ---------- -----------                                   --------
014830         SHOES, THRUST BEARING, ACTIVE,                               1.00
014831         SHOES, THRUST BEARING, INACTIV                               1.00
015964         BEARING, GEAR BOX, MODEL 175,                                1.00
019            BEARING, LEVER LINK, TURBINE C                              12.00
02407          BELT, DRIVE, CARMAN BRUTE FORCE FEEDER.                      2.00
032            TRIPPING DEVICE, LOW VOLTAGE B                               3.00
072407         BOARD, CONTROL, ROSEMOUNT SYST                               1.00
072408         BOARD, REGULATOR, LV, ROSEMOUN                               1.00
072731         MODULE, OUTPUT, 120V, FOR PROG                               3.00
072732         MODULE, INPUT, 120V, FOR PROGR                               7.00
072734         POWER SUPPLY, RACK, PROGRAMMAB                               4.00
072735         MODULE, OUTPUT, CONTACT, PROGR                               5.00
072736         MODULE, OUTPUT, ISOLATED, PROG                               3.00
074649         MODULE, OUTPUT, PROGRAMMABLE C                               2.00
074671         BOARD, POWER SUPPLY, GE STC CA                               3.00
074680         BOARD, MONITOR, POWER SUPPLY,                                1.00
074827         MODULE, INPUT, GE SERIES THREE                               1.00
074849         MODULE, OUTPUT, GE SERIES 1, 3                               1.00
074850         BOARD, CPU, PROGRAMMER UNIT GE                               1.00
074851         POWER SUPPLY, GE SERIES THREE                                1.00
074858         MODULE, INPUT, GE SERIES 1                                   1.00
074859         MODULE, ISOLATED, GE SERIES 1,                               1.00
074860         MODULE, INPUT, GE SERIES 3                                   2.00
074874         POWER SUPPLY, GE STC CABINET,                                1.00
076282         BOARD, CIRCUIT, TRANSMITTER, M                               1.00
076283         BOARD, CIRCUIT, TRANSMITTER, M                               2.00
076284         BOARD, CIRCUIT, TRANSMITTER, M                               2.00
076285         BOARD, CIRCUIT, TRANSMITTER, M                               2.00
076292         MODULE, SENSOR, TRANSMITTER, MODEL 1151 DP                   1.00
076341         BOARD, CIRCUIT, BASE, WITH COM                               1.00
07708          BOARD, SCAN, ROSSEMOUNT SYSTEM                               1.00
10686          KEYBOARD, ROTATING, ROSEMOUNT                                1.00
141000         WASHER, INSULATING, GENERATOR                                4.00
141006         NUT, COVERED, 2.000-8 HJ, TURB                               4.00
141007         NUT, 1.875-8 HJ, HIGH PRESSURE                               5.00
141008         NUT, 1.750-8 HJ, HIGH PRESSURE                              10.00
141010         NUT, 3.000-8 HJ, TURBINE H.P. HEAD, 35 MW.                   3.00
141011         NUT, 3.500-8 HJ, TURBINE H.P.                                2.00
141012         NUT, 4.000-8 HJ, TURBINE H.P.                                1.00
141013         STUD, HIGH PRESSURE HEAD, 35 M                               1.00
141014         NUT, HIGH PRESSURE HEAD, 35 MW                               3.00
141015         STUD, HIGH PRESSURE HEAD, 35 M                               3.00
141016         NUT, 2.250-8 HJ, HIGH PRESSURE                               3.00



                                       4
<PAGE>


                                                                        Quantity
Item           Spare Part Description                                    On Hand
----           ---------- -----------                                   --------
141017         STUD, 2.250-8 HJ, HIGH PRESSUR                               1.00
141022         PIN, VALVE GEAR ASSEMBLY, 35 M                               6.00
141023         PIN, VALVE GEAR                                             12.00
141025         NUT, LOCK, 1.00-8, VALVE GEAR                               12.00
144901         PIN, 1.0 X 3.50, VALVE GEAR ASSEMBLY, 35 MW                  1.00
144902         PIN, .75 X 3.38, VALVE GEAR ASSEMBLY, 35 MW                  1.00
15120          FILTER, ELEMENT, TURBINE LUBE                                6.00
151293         FILTER, BAG, CLOTH, TURBINE LU                              16.00
153439         CAGE, COLLECTOR BAG, GALVANIZE                              33.00
154910         CAGE, FILTER BAG, GALVANIZED,                               24.00
15827          FILTER, ELEMENT, PUMP, VACUUM,                               6.00
158281         BAG, FILTER, 100% RYTON, NEEDL                              80.00
166137         VENTURI, CINDER RETURN, 2 1/2"                               8.00
171            NOZZLE, EJECTOR, STEAM JET AIR                               2.00
172            NOZZLE, EJECTOR, STEAM JET AIR                               1.00
21210          GASKET, MONEL, SILVER PLATED,                                1.00
212121         GASKET, COPPER, CORRUGATED                                  18.00
2140           GASKET, VALVE, FISHER.                                       1.00
225822         INDICATOR, ITT BARTON, USED ON                               1.00
226307         GAUGE, PRESSURE, DIFFERENTIAL, MAIN TURBINE                  1.00
24172          RING, PISTON, FOR 3" TYPE EHD FISHER VALVE                   2.00
2433           RING, BACKUP, 8" V100 BALL VAL                               1.00
244056         RING, SEAL, VALVE, CROSBY PARV                               1.00
244896         RETAINER, DU, VALVE GEAR ASSEM                               1.00
2483           RING SEGMENT, SPILL STRIP, STA                              16.00
2484           RING SEGMENT, SPILL STRIP, STA                              16.00
2485           RING SEGMENT, SPILL STRIP, STA                              18.00
2486           RING SEGMENT, SPILL STRIP, STA                              20.00
2487           RING SEGMENT, SPILL STRIP, STA                              22.00
2810           GEARBOX, COOLING TOWER, DOUBLE                               2.00
284604         REDUCER, SHAFT MOUNT, 20 HP, H                               1.00
284605         REDUCER, SHAFT MOUNT, 25 HP, H                               2.00
286            COUPLING, GEARFLEX,  I D FAN TO MOTOR                        1.00
3341           PIPE, 1", SCH. 80, A-106, GRADE B                            5.00
3342           PIPE, 1/2", SCH. 80, A-106, GRADE B                         10.00
3343           PIPE, 1/2", SCH. 160, SA-335, GRADE P-22                    22.00
33450          TUBE, REAR WATERWALL, 3" ODX.2                               1.00
33452          TUBE, REAR WATERWALL, 3" ODX.2                               2.00
33453          TUBE, REAR WATERWALL, 3" ODX.2                               3.00
33454          TUBE, REAR WATERWALL, 3" ODX.2                               1.00
33455          TUBE, REAR WATERWALL, 4" ODX.2                               1.00



                                       5
<PAGE>


                                                                        Quantity
Item           Spare Part Description                                    On Hand
----           ---------- -----------                                   --------
33457          TUBE, REAR WATERWALL, 3"ODX.20                               1.00
33460          TUBE, REAR WATERWALL, 3" ODX.2                               3.00
3360           REDUCER, CINDER RETURN, 3" TO                                1.00
33660          TUBE, WATERWALL SIDEWALLS, 3"                                1.00
33661          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33662          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33663          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33664          TUBE, WATERWALL, 3" ODX.203 MW                               3.00
33665          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33666          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33667          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33668          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33669          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33670          TUBE, WATERWALL, 3" ODX.203 MW                               1.00
33671          TUBE, WATERWALL SIDEWALLS, 3"                                1.00
35207          PUMP, MAIN LUBE OIL, BOILER FE                               1.00
353321         PUMP KIT, 3X10 DAH-14 & D4X10                                3.00
354753         KOPKIT, PULSAFEEDER PUMP, 880                                1.00
355806         PUMP KIT, MINOR KIT, #B6B-106,                               2.00
3560           PUMP KIT, LUBE OIL PUMP, IMP T                               3.00
3566           PUMP, TURBINE, HYDRAULIC, 35M                                1.00
391053         SHAFT, VIBRATOR, 34" LONG.                                   7.00
               REFRENCE DRAWING # 25B28454
3913           ELEMENT, FEED PUMP, BOILER, 3X                               1.00
392276         SHAFT, CONVEYOR, CARMAN, SERIA                               6.00
392330         SHAFT, BOILER MASTER, 1-7/16"                                1.00
392738         SHAFT, TAIL, CONVEYOR, BUNKER,                               1.00
39575          GROMMET, DRIVESHAFT, COOLING TOWER                          12.00
395872         SHAFT, WORM, PUMP, 7120 SE PUL                               3.00
396201         DRIVESHAFT, VALVE, 2" V100, HO                               1.00
396449         SHAFT, DAMPER, BAGHOUSE, GEESI                               2.00
397222         SLEEVE, RUBBER, 3/8"X8-5/8" I.                               1.00
4011           CYLINDER, HYDRAULIC, TURBINE S                               1.00
404885         ROD KIT, HYDRAULIC CYLINDER, S                               3.00
404906         SEAL KIT, ROD, HYDRAULIC CYLIN                               4.00
404929         POSITIONER, DAMPER DRIVES, WIT                               1.00
404948         ACTUATOR, UNIVERSAL, BAILEY DA                               1.00
416226         CELL,CONDUCTIVITY, MODEL #411,                               1.00
416227         CELL, CONDUCTIVITY, BECKMAN #4                               2.00
4514           TRANSFORMER, LOAD CENTERS, MOD                               2.00
482706         VALVE, SAFETY, SUPERHEATER, CR                               1.00



                                       6
<PAGE>

                                                                        Quantity
Item           Spare Part Description                                    On Hand
----           ---------- -----------                                   --------
482707         VALVE, SAFETY, DRUM, 1-1/2" H4                               1.00
482708         VALVE, SAFETY, DRUM, 1-1/2" H4                               1.00
485799         CHARGING ASSEMBLY, BLADDERS, E                               1.00
491018         PLUG, VALVE, 2.00, VALVE ASSEMBLY,                           2.00
               35 MW TURBINE.
491019         PLUG, VALVE, 2.25, VALVE ASSEMBLY,                           1.00
               35 MW TURBINE.
494869         GATE, KNIFE, 10" FABRI DUMP VA                               2.00
494887         PLATE, CLAMP, VALVE GEAR ASSEM                               3.00
494899         STEM, VALVE, VALVE GEAR ASSEMBLY, 35 MW                      1.00
495576         VALVE KIT, 1-1/2" FISHER TYPE                                2.00
522817         CABLE, LOAD CELL, SCALE MOD. 2                               2.00
5424           SPRING, SPILL STRIP, STAGE 2,8                               2.00
5425           SPRING, SPILL STRIP, STAGE 3,                               15.00
5426           SPRING, SPILL STRIP, STAGE 3,                                1.00
5427           SPRING, SPILL STRIP, STAGE 6,                               17.00
5428           SPRING, SPILL STRIP, STAGE 11,                               1.00
586001         DRUM, PULLEY, CONVEYOR BELT,                                 2.00
621            SHIM, INSULATING, GENERATOR BE                               4.00
622            SHIM, THRUST, ACTIVE, 35 MW TU                               1.00
623            SHIM, THRUST, INACTIVE, 35 MW                                1.00
638669         DEFLECTOR. OIL. #1 BEARING, G.                               1.00
638670         DEFLECTOR, OIL, #2 BEARING, TU                               1.00
677184         MODULE, HOPPER HEATER, 460V, 1                               1.00
686241         SWITCH, PRESSURE, RANGE 0-200                                2.00
695801         DIAPHRAGM, RELIEF, ATM ASSEMBL                               1.00
696058         DIAPHRAGM, VALVE, SIZE 60 NBR/NYL 17E44,                     4.00
               FEED REGULATOR
696503         DIAPHRAGM, NEOPRENE, FISHER TY                               1.00
713228         THERMOCOUPLE,BOILER FEEDPUMP,                                1.00
71666          PROBE, VIBRATION, 8MM, REVERSE MOUNT,                        1.00
               .5 METER
75754          SEAL, MECHANICAL, PUMP, INGERS                               1.00
7810474        MOTOR, 125 HP, 1800 RPM, 405TS FRAME                         1.00
783067         MOTOR, 350 HP, 1200 RPM, S449SS FRAME                        1.00
784040         MOTOR, 3 HP, 1800 RPM, 182T FRAME                            1.00
784113         MOTOR,  7.5 HP, 1800 RPM, 213T FRAME                         1.00
785978         MOTOR, 200 HP, 900 RPM, FRAME 509 UP, 460 VOLT               1.00
786576         MOTOR, CHART DRIVE, SECOND, FA                               1.00
787200         MOTOR, 3 HP, 3600 RPM, L182T FRAME                           1.00
787888         MOTOR, 60/15 HP, 1800/900 RPM, FRAME 365-T,                  2.00
               460 VOLT, TYPE T



                                       7

<PAGE>

Section 2.2(c)             Interim Value
--------------             -------------

See attached.






























                                       8
<PAGE>


Section 3.3                Seller Consents
-----------                ---------------

         1.  Prior to the  date  hereof,  Seller  has  notified  the NCUC of the
transfers of the Interests  contemplated  in this  Agreement.  Buyer may need to
contact the NCUC regarding a Certificate of Public Convenience and Necessity.

         2.  Waiver  of  Right  of  First  Refusal  signed  by  Guilford  or the
expiration  of thirty  (30) days from the date of receipt by  Guilford  Mills of
notice of the proposed  transaction  contemplated  herein without an exercise by
Guilford Mills of its Right of First Refusal.



























                                       9
<PAGE>
<TABLE>
<CAPTION>


Section 3.5(b)             Encumbrances
--------------             ------------

1.       UCC Liens:

----------------------------------------------------------------------------------------------------------------------------------
                                        Jurisdiction - North Carolina Secretary of State
----------------------------------------------------------------------------------------------------------------------------------
  Filing # of     Original or     Date of Filing           Debtor             Secured Party          Collateral Description
   Financing      Continuation
   Statement
----------------------------------------------------------------------------------------------------------------------------------
<C>              <C>             <C>               <C>                     <C>                  <C>
0926912          Original        9/24/1992         Cogentrix Eastern       Carolina Power &     Fixtures  and all other  tangible
                                                   Carolina Corporation    Light Company        personalty    located    on   the
                                                                                                property  described  on Exhibit A
                                                                                                to the Financing Statement.
----------------------------------------------------------------------------------------------------------------------------------
001500212        Continuation    9/15/1997         Cogentrix Eastern       Carolina Power &     Fixtures  and all other  tangible
                 of   Filing  #                    Carolina Corporation    Light Company        personalty    located    on   the
                 0926912                                                                        property  described  on Exhibit A
                                                                                                to the Financing Statement
----------------------------------------------------------------------------------------------------------------------------------
                                 Jurisdiction - Duplin County, North Carolina Register of Deeds
----------------------------------------------------------------------------------------------------------------------------------
  Filing # of     Original or     Date of Filing           Debtor             Secured Party          Collateral Description
   Financing      Continuation
   Statement
----------------------------------------------------------------------------------------------------------------------------------
92-1381          Original        11/24/1992        Cogentrix Eastern       Carolina Power &     Fixtures  and all other  tangible
                                                   Carolina Corporation    Light Company        personalty    located    on   the
                                                                                                property  described  on Exhibit A
                                                                                                to the Financing Statement
----------------------------------------------------------------------------------------------------------------------------------
97-2145          Continuation    9/16/1997         Cogentrix Eastern       Carolina Power &     Fixtures  and all other  tangible
                 of   Filing  #                    Carolina Corporation    Light Company        personalty    located    on   the
                 92-1381                                                                        property  described  on Exhibit A
                                                                                                to the Financing Statement
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


2. Deed of Trust and Security Agreement dated as of August 17, 1992, executed by
Cogentrix Eastern Carolina Corporation,  a North Carolina corporation,  Grantor,
Carolina Power & Light Company, a North Carolina corporation,  Beneficiary,  and
David T. Conley,  Trustee,  and recorded in Book 1087,  Page 413,  Duplin County
Registry.


3. Property  taxes became due and payable in Duplin  County,  North  Carolina on
September 1, 2002.


<PAGE>

Section 3.6                Contracts
-----------                ---------

Organization

   1. Operating  Agreement of Cogentrix Eastern Carolina,  LLC dated December 8,
      2000,  between  Cogentrix of North  Carolina,  Inc. and Cogentrix  Eastern
      Carolina, LLC.

Power Sales

   2. Electric Power Purchase  Agreement  dated June 13, 1984 between  Cogentrix
      Leasing Corporation and Carolina Power & Light Company.

   3. Consent and Agreement  dated  December 16, 1991 between  Carolina  Power &
      Light  Company,  Cogentrix  of  North  Carolina,  Inc.  Cogentrix  Eastern
      Carolina  Corporation,  General  Electric  Capital  Corporation and United
      States Trust Company of New York. ("First Amendment")

   4. Second Amendment to Electric Power Purchase Agreement dated August 5, 1996
      between  Carolina  Power & Light  Company and Cogentrix  Eastern  Carolina
      Corporation.

   5. Memorandum  of Right of First  Refusal  dated  February  27, 2001  between
      Carolina Power & Light Company and Cogentrix Eastern Carolina, LLC.

   6. Third  Amendment to Electric Power Purchase  Agreement dated July 24, 2001
      between  Carolina  Power & Light Company and Cogentrix  Eastern  Carolina,
      LLC.

   7. Waiver of Certain Rights Under Electric  Power  Purchase  Agreement  dated
      July 24, 2001 between Carolina Power & Light Company and Cogentrix Eastern
      Carolina, LLC.

   8. Waiver of Duty of First Offer dated May 15, 2002 between  Carolina Power &
      Light Company and Cogentrix Eastern Carolina, LLC.

   9. Non-Firm Call Option  Agreement  dated February 11, 2002 between  Carolina
      Power & Light Company and Cogentrix Eastern Carolina, LLC.

   10.Facility  Interconnection  and Operating  Agreement dated January 18, 2002
      between  Carolina  Power & Light Company and Cogentrix  Eastern  Carolina,
      LLC.  Letter dated January 23, 2002 from Carolina Power & Light Company to
      Cogentrix Eastern Carolina, LLC regarding generator imbalance.

Steam Sales

   11.Steam Purchase  Contract dated November 30, 1984 between  Guilford  Mills,
      Inc. and Cogentrix Leasing Corporation.

   12.First  Amendment to Steam  Purchase  Contract dated August 1, 1991 between
      Guilford Mills, Inc. and Cogentrix of North Carolina, Inc.


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<PAGE>

   13.Consent and  Agreement  dated  December 16, 1991 between  Guilford  Mills,
      Inc.,  Cogentrix  of  North  Carolina,  Inc.  Cogentrix  Eastern  Carolina
      Corporation,  General Electric Capital Corporation and United States Trust
      Company of New York.

   14.Settlement  and  Release  Agreement  dated July 6, 2000  between  Guilford
      Mills, Inc. and Cogentrix Eastern Carolina Corporation.

   15.Right of First Refusal  Agreement dated November 30, 1984 between Guilford
      Mills, Inc. and Cogentrix Leasing Corporation.

Fuel Supply

   16.Coal  Purchase/Sale  Agreement  dated October 23, 2001 between James River
      Coal Sales, Inc. and Cogentrix Eastern Carolina, Inc.

Transportation

   17.Railroad  Transportation  Contract  effective December 1, 2001 between CSX
      Transportation, Inc. and Cogentrix Eastern Carolina, Inc.

   18.Agreement for Material  Handling  Services  dated December 1, 2001 between
      ReUse Technology, Inc. and Cogentrix Eastern Carolina, Inc.

Real Estate

   19.Ground  Lease dated  November 3, 1984  between  Guilford  Mills,  Inc. and
      Cogentrix Leasing Corporation.

   20.First  Amendment to Ground Lease dated December 16, 1991 between  Guilford
      Mills,  Inc.,  Cogentrix of North  Carolina,  Inc. and United States Trust
      Company of New York.

   21.Second  Amendment  to Ground  Lease  dated July 6, 2000  between  Guilford
      Mills, Inc. and Cogentrix Eastern Carolina Corporation.

   22.Third  Amendment to Ground Lease dated December 29, 2000 between  Guilford
      Mills, Inc. and Cogentrix Eastern Carolina, LLC.

   23.Track  Lease SBD 8074  dated  October  4,  1985  between  Seaboard  System
      Railroad, Inc. and Cumberland Elkhorn Coal & Coke, Inc.

   24.First  Amendment  to Track Lease SBD 8074 dated May 19,  1993  between CSX
      Transportation, Inc. and Cogentrix Eastern Carolina Corporation.

   25.Land  Lease SBD 9284 dated  December  17,  1985  between  Seaboard  System
      Railroad, Inc. and Cumberland Elkhorn Coal & Coke, Inc.

   26.First  Amendment  to Land Lease SBD 9284 dated June 25,  1991  between CSX
      Transportation, Inc. and Oxbow Carbon & Minerals, Inc.


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<PAGE>

   27.Second  Amendment  to Land Lease SBD 9284 dated May 19,  1993  between CSX
      Transportation, Inc. and Cogentrix Eastern Carolina Corporation.

   28.Unloading Pit  Agreement  SBD 8801 dated October 2, 1985 between  Seaboard
      System Railroad, Inc. and Cumberland Elkhorn Coal & Coke, Inc.

   29.First  Amendment to Unloading  Pit  Agreement  SBD 8801 dated May 19, 1992
      between  CSX   Transportation,   Inc.  and  Cogentrix   Eastern   Carolina
      Corporation.

Easements

   30.Easement  Agreement dated November 30, 1984 between  Guilford Mills,  Inc.
      and Cogentrix Leasing Corporation.

   31.Letter Agreement dated December 10, 1984 between Guilford Mills,  Inc. and
      Cogentrix Leasing Corporation.

   32.First  Amendment  to  Easement  Agreement  dated  April 23,  1986  between
      Guilford Mills, Inc. and Cogentrix Leasing Corporation.

   33.Right of Way  Encroachment  Agreement dated July 3, 1985 between the North
      Carolina Department of Transportation and Cogentrix Leasing Corporation.

   34.Easement  Agreement  dated January 14, 1986 between  Alice H. Dorsett,  J.
      Dewey Dorsett and Cogentrix Leasing Corporation.

   35.Easement  Agreement  dated May 19, 1993 between CSX  Transportation,  Inc.
      and Cogentrix Eastern Carolina Corporation.

   36.Grant of Easement  dated  September  24, 1998  between  Cogentrix  Eastern
      Carolina Corporation and North Carolina natural Gas Corporation.














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