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                                     FORM OF

                                    LEASE AND

                               OPERATING AGREEMENT

                                     BETWEEN

                          WESTERN KENTUCKY ENERGY CORP.

                                       AND

                         BIG RIVERS ELECTRIC CORPORATION

                                  July 15, 1998



         [* REDACTED=Omitted pursuant to confidential treatment request.
            Material filed separately with PSC.]


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                     CONFIDENTIAL - SUBJECT TO COURT ORDER

                          LEASE AND OPERATING AGREEMENT

                                     PARTIES

            THIS LEASE AND OPERATING AGREEMENT ("Agreement") is dated this 15th
day of July, 1998 (the "Lease Execution Date") between WESTERN KENTUCKY ENERGY
CORP., a Kentucky corporation ("WKEC") and BIG RIVERS ELECTRIC CORPORATION, a
Kentucky rural electric cooperative ("Big Rivers" and together with WKEC, the
"Parties").

RECITALS

            A. Pursuant to the New Participation Agreement dated as of April 6,
1998, among Big Rivers, WKEC and certain of WKEC's Affiliates (the
"Participation Agreement"), the parties thereto have entered into various
arrangements for the operation and maintenance of the Assets and the sale of
electricity produced therefrom. This Agreement is one of the Phase II Agreements
described in the Participation Agreement.

            B. This Agreement is intended to be an operating lease, and is
intended to establish during the term hereof the respective obligations of WKEC
and Big Rivers with respect to the ownership, lease and operation of the Assets
and all existing and future additions to those Assets, and to govern the
day-to-day operation of the Assets by WKEC.

            NOW, THEREFORE, in consideration of the mutual covenants set forth
below, the Parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

            For purposes of this Agreement, capitalized terms not otherwise
defined herein shall have the meaning set forth in Exhibit X to the
Participation Agreement.

                                    ARTICLE 2

                                      LEASE

      2.1. Lease Grant. Subject to the terms and conditions of this Agreement,
on the Phase II Effective Date, Big Rivers shall, on an exclusive basis, lease
to WKEC, and WKEC shall lease from Big Rivers (and, with respect to the property
subject to the Real Property Leases, shall sublease), the Tangible Assets during
Phase II, except to the extent such assets are Excluded Assets, Personal
Property or Inventory.
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      2.2. Term. The term of the lease contemplated by Section 2.1 ("Term")
shall commence on the Phase II Effective Date and end on the earliest of (i) the
December 31st that is closest to the twenty-fifth anniversary of the Effective
Date and (ii) the date of any termination of this Agreement pursuant to Article
11 hereof or pursuant to the relevant provisions of the Guaranty or the Station
Two Agreement.

      2.3. Rental and Margin Payments

            2.3.1. Initial Rental Payment. In the event that the Phase II 
Effective Date occurs prior to the Phase I Effective Date, WKEC shall pay to 
Big Rivers on the Phase II Effective Date, as an initial rental payment (the 
"Initial Rental Payment"), an amount equal to $[REDACTED], subject to 
adjustment as set forth in Section 9.3 of the Participation Agreement (PP 
Price adjustment). In the event that the Phase II Effective Date occurs 
following the Phase I Effective Date but prior to the second anniversary of 
the Phase I Effective Date, an amount equal to the amount actually refunded 
by Big Rivers to LEM pursuant to Section 3.3(a) of the Power Purchase 
Agreement shall be due and payable hereunder by WKEC to Big Rivers on the 
Phase II Effective Date. For the avoidance of doubt, the parties acknowledge 
that, except as set forth in this Section 2.3.1 and Section 10.7(d) of the 
Station Two Agreement, no rental shall be due for the period from the 
Effective Date until the second anniversary of such date.

            2.3.2. Annual Rental; Monthly Installment Payments; Monthly Margin
Payments. (a) On the later to occur of (x) the Phase II Effective Date and (y)
the second anniversary of the Effective Date, and for each subsequent year
during Phase II, after taking into account all applicable Phase I Adjustments,
if any, and any reduction effected pursuant to Section 10.1.2, 10.2.2 or 11.6
hereof, WKEC shall pay Big Rivers an annual rental payment of $[REDACTED],
subject to adjustment pursuant to Section 9.3 of the Participation Agreement (PP
Price adjustment), as follows: WKEC shall pay the annual rental in equal monthly
installments of $[REDACTED] (subject to adjustment as set forth in this Article
2), with the first monthly installment to be paid on the later of (x) the Phase
II Effective Date and (y) the second anniversary of the Effective Date, and each
remaining monthly installment to be paid on the first day of each calendar month
through the December 1st that is closest to the twenty-fifth anniversary of the
Effective Date; provided, that if the Phase II Effective Date occurs after the
second anniversary of the Effective Date, WKEC shall not be obligated hereunder
to pay rent with respect to any month, or portion thereof, prior to the Phase II
Effective Date, and all rental payments on an annual basis as well as a monthly
basis shall be pro rated to reflect this understanding; and provided, further,
that if the first monthly installment of the rental payment under this Section
2.3.2 is due on a day other than the first day of the month, WKEC shall pro rate
that installment by the ratio that the remaining number of days in the month
bears to the total number of days in that month. After taking into account all
applicable Phase I Adjustments, if any, if Big Rivers elects to reduce the
Contract Limits pursuant to Subsection 4.3(e) of the Power Purchase Agreement,
the total annual rental payment provided for in this Subsection 2.3.2 shall be
increased effective on January 1 of the Year in which the reduction becomes
effective to an amount equal to the product of $[REDACTED] (subject to
adjustment pursuant to Section 9.3 of the Participation Agreement) multiplied by
the sum of one (1) plus the CCAP. The monthly installment due on such


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January 1 and on the first day of each month during the remainder of Phase II
shall be adjusted accordingly. The Parties acknowledge that Big Rivers may elect
to reduce the Contract Limits under Subsection 4.3(e) of the Power Purchase
Agreement on more than one occasion, and that the annual rental payment and
associated monthly installments shall be adjusted as provided in this Subsection
2.3.2 on each such occasion.

      (b) WKEC shall also pay to Big Rivers a Monthly Margin Payment as follows:
In the event the Phase II Effective Date occurs prior to the Phase I Effective
Date, the first Monthly Margin Payment under this Agreement shall be due on the
second occurrence of a 25th day of the month after the Effective Date, and a
Monthly Margin Payment will be due from WKEC to Big Rivers on each 25th day of
the month thereafter until and including January 25, [REDACTED], at which time 
no additional Monthly Margin Payments will accrue. In the event the Phase I
Effective Date occurs prior to the Phase II Effective Date, the first Monthly
Margin Payment under this Agreement shall be due on the first 25th day of the
month immediately following the Phase II Effective Date (or on the Phase II
Effective Date, if the Phase II Effective Date occurs on the 25th day of the
Month), and a Monthly Margin Payment will be due from WKEC to Big Rivers on each
25th day of the month thereafter until and including January 25, [REDACTED]. 
Each Monthly Margin Payment is due in the amount set forth in the Schedule of 
Monthly Margin Payments attached to this Agreement as Schedule 2.3; provided 
that if the Phase II Effective Date occurs prior to the Phase I Effective 
Date and on other than the first day of a month, then the first Monthly 
Margin Payment (due at the relevant time described above) will be the amount 
designated on Schedule 2.3 for the month in which the Effective Date 
occurred, multiplied by the ratio of (i) the number of days between the 
Effective Date and the last day of the month and (ii) the total number of 
days in that month. In the event the Term shall end prior to January 25, 
[REDACTED], but on a date other than the last day of a month, then WKEC shall 
pay to Big Rivers a prorated share of the Monthly Margin Payment for the 
month in which the Term ended based on the ratio by which the number of days 
in that month through and including the date on which the Term ended bears to 
the total number of days in that month.

      (c) Notwithstanding any provisions of this Section 2.3 to the contrary: 
(i) in the event this Agreement shall be terminated but the Station Two 
Agreement shall thereafter continue in effect, then so long as the Station 
Two Agreement shall continue in effect (and through January 25, [REDACTED] in 
accordance with Schedule 2.3), WKEC shall continue to pay to Big Rivers a 
portion of the Monthly Margin Payments equal to (x) the relevant Monthly 
Margin Payment, multiplied by (y) a fraction, the numerator of which is the 
amount determined by subtracting from [REDACTED] the total number of 
megawatts of capacity from Station Two that are reserved for use by HMP&L 
during that month, and the denominator of which is the amount determined by 
subtracting from [REDACTED] the total number of megawatts of capacity from 
Station Two that are reserved for use by HMP&L during that month, and (ii) in 
the event the Station Two Agreement shall be terminated but this Agreement 
shall thereafter continue in effect, then the Monthly Margin Payments that 
shall thereafter be owing by WKEC to Big Rivers shall be reduced by the 
amount established by multiplying (x) by (y) as described in Subclause 
(c)(i), above. No cessation or modification of the Monthly Margin Payments 
pursuant to this Subsection (c) shall constitute or be construed as a waiver 
or bar to any right of Big Rivers to seek to

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recover any damages resulting from any breach or default by WKEC hereunder, or
by any other LG&E Party under any of the other Operative Documents, to which Big
Rivers otherwise would be entitled.

      (d) Notwithstanding anything contained in Section 2.3.2(c)(ii) of this
Agreement to the contrary, upon any termination of the Station Two Agreement
that would otherwise result in a reduction in the Monthly Margin Payments
pursuant thereto such reduction shall nonetheless be suspended, and the relevant
Monthly Margin Payments shall once again become payable by WKEC hereunder, if,
within 60 days after the termination of the Station Two Agreement, Big Rivers
shall have taken such actions, in compliance with Section 13.8 of the Station
Two Agreement, as shall be necessary to prevent the LG&E Parties (or any of
them) from having the right, pursuant to Section 13.8 of that agreement, to an
abatement against the Annual Fixed Payments or the rental payments (as
applicable, due by them to Big Rivers, to a reimbursement of the Initial Fixed
Payment or Initial Rental Payment, to a reduction in the Contract Limits, or to
terminate any of the Operative Documents other than the Station Two Agreement,
each as contemplated in Section 13.8 of that agreement; provided, that in the
event those LG&E Parties shall at any time thereafter have the immediate right
to take any of the foregoing actions or exercise any of the foregoing rights or
remedies in accordance with Section 13.8, then the provisions of this Subsection
2.3.2(d) shall no longer suspend operation of Subsection 2.3.2(c)(ii).

      (e) Big Rivers agrees with WKEC that WKEC shall have the right, on behalf
of its Affiliate, LEM, to set-off against the Monthly Margin Payments that may
become due and owing to Big Rivers hereunder, at any time following the second
anniversary of the Effective Date, the monthly installments of principal and
interest that may be due and owing by Big Rivers to LEM under the Promissory
Note (LEM Advances) in accordance with the terms and conditions of such note,
and any such set-off by WKEC shall be deemed to satisfy its obligations to Big
Rivers hereunder with respect to the Monthly Margin Payments (or any portions
thereof) so set-off.

      (f) (i) If the Monthly Margin Payment has been adjusted pursuant to
Section 2.3.2.(c)(ii) of this Agreement and Big Rivers is permitted pursuant to
the Station Two Power Sales Agreement (as defined in the Station Two Agreement)
to purchase energy or capacity from Station Two, then: (A) Big Rivers will sell
to LEM and LEM will buy Bundled Ancillary Services (as defined in section
(f)(iii) below) for resale to [REDACTED] for the benefit of [REDACTED] and (B)
the Monthly Margin Payment will be reduced by an amount equal to the amount due
to Big Rivers from LEM for such services during that month; provided, however,
that WKEC will continue to make payments to Big Rivers in the same amount as the
regularly scheduled Monthly Margin Payment that is otherwise due pursuant to the
Operative Documents (taking into consideration, inter alia, any adjustment
required by Section 2.3.2.(c)) and Big Rivers will accept such payment as
payment, in full, of the amount owed to Big Rivers by WKEC for the Monthly
Margin Payment then due and by LEM for the services described above for such
month. Pursuant to this paragraph, Big Rivers must provide such services to LEM
in the same quantities as LEM is required to provide such services to 
[REDACTED] to meet the requirements of [REDACTED].


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            (ii) If the Monthly Margin Payment has been adjusted pursuant to 
Section 2.3.2.(c)(i) of this Agreement, then (A) Big Rivers will sell to LEM 
and LEM will buy Bundled Ancillary Services (as defined below) for resale to 
[REDACTED] for the benefit of [REDACTED] and (B) the Monthly Margin Payment 
will be reduced by an amount equal to the amount due to Big Rivers from LEM 
for such services during that month; provided, however, that WKEC will 
continue to make payments to Big Rivers in the same amount as the regularly 
scheduled Monthly Margin Payment that is otherwise due pursuant to the 
Operative Documents (taking into consideration, inter alia, any adjustment 
required by Section 2.3.2.(c)) and Big Rivers will accept such payment as 
payment, in full, of the amount owed to Big Rivers by WKEC for the Monthly 
Margin Payment then due and by LEM for the services described above for such 
month. Pursuant to this paragraph, Big Rivers must provide such services to 
LEM in the same quantities as LEM must provide such services to [REDACTED] to 
meet the power requirements of [REDACTED].

            (iii) The Bundled Ancillary Services are (A) those services
described by Big Rivers in Schedules 3, 4, 5, and 6 of the Open Access
Transmission Service Tariff attached as Exhibit 1 to the Transmission Services
and Interconnection Agreement, or (B) such services that the FERC determines
transmission providers must provide in lieu of or as extensions of the services
described in subpart (A) of this sentence.

            2.3.3. Adjustment for Incremental Environmental O&M. WKEC shall 
include Incremental Environmental O&M within the Annual O&M Budget(s). After 
taking into account all applicable Phase I Adjustments, if any, pursuant to 
the payment terms described in this Section 2.3.3, Big Rivers shall directly 
pay a share of all Incremental Environmental O&M incurred by WKEC each year 
during Phase II, as and when incurred by WKEC, as follows (in each case "Big 
Rivers' Incremental Environmental O&M Share"): (i) Big Rivers' share of 
Incremental Environmental O&M incurred during the period from the Effective 
Date until December 31, [REDACTED], inclusive, is [REDACTED]; (ii) Big 
Rivers' share of Incremental Environmental O&M incurred during the period 
from January 1, [REDACTED] to December 31, [REDACTED], inclusive, is 
[REDACTED]%; and (iii) Big Rivers' share of Incremental Environmental O&M 
incurred during the period from January 1, [REDACTED] until the Termination 
Date, inclusive, is [REDACTED]%. Big Rivers' payments shall be made by 
reducing each monthly installment of rent by an amount equal to Big Rivers' 
Incremental Environmental O&M Share based on the Incremental Environmental 
O&M estimated by WKEC to be incurred in such month by WKEC consistent with 
the Annual O&M Budget (including all modifications thereto approved by the 
Parties in accordance with this Agreement). Within 120 days after the end of 
each year, WKEC shall compute the actual Incremental Environmental O&M for 
the year ("Actual Environmental O&M") and shall compare the Actual 
Environmental O&M with the aggregate payments made by Big Rivers (through 
reductions in the rent) pursuant to the immediately preceding sentence of 
this Section 2.3.3 during such year ("Environmental Rent Reduction"). If Big 
Rivers' Incremental Environmental O&M Share of the Actual Environmental O&M 
is more than the Environmental Rent Reduction, Big Rivers shall promptly pay 
such difference to WKEC. If Big Rivers' Incremental Environmental O&M

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Share of the Actual Environmental O&M is less than the Environmental Rent
Reduction, WKEC shall promptly pay such difference to Big Rivers. Except as
expressly provided in this Section 2.3.3, elsewhere in this Agreement or in any
other Operative Document to the contrary, Big Rivers shall have no obligation or
liability to the LG&E Parties for any operating or maintenance costs relating to
the Assets.

            2.3.4. [RESERVED.]

      2.4. Covenant of Quiet Enjoyment. Subject to the terms, covenants,
conditions and provisions of this Agreement and the other Phase II Agreements,
WKEC shall have the exclusive use and enjoyment of the Tangible Assets and the
Energy output of the Tangible Assets during the Term, without interference from
Big Rivers.

      2.5. No Other Interest. Except as expressly provided in Section 9 of the
Participation Agreement, this Agreement is intended as and shall constitute an
agreement of lease and nothing herein or elsewhere contained shall be construed
as conveying to WKEC any right, title or interest in or to the Tangible Assets,
except as lessee only.

      2.6. Return of the Tangible Assets. Upon the expiration or other 
termination of the Term, WKEC will immediately return the Tangible Assets to 
Big Rivers by surrendering the same into the possession of Big Rivers, in 
good condition and state of repair consistent with Prudent Utility Practice 
subject only to ordinary wear and tear, including any replacements, 
improvements or additions to the Tangible Assets. WKEC acknowledges and 
agrees that it does not have the right to hold over at any time and Big 
Rivers may exercise any and all remedies at law or in equity to recover 
possession of the Tangible Assets, as well as any damages incurred by Big 
Rivers, due to WKEC's failure to return and surrender possession of the 
Tangible Assets as required by this Agreement. If WKEC holds over after the 
expiration or earlier termination of the Term without Big Rivers' prior 
written consent, WKEC will be deemed a tenant at sufferance, at a daily 
rental rate equal to the sum of (i) [REDACTED]% of the daily rent payable 
pursuant to Section 2.3.2 during the last year of the Term, and (ii) the 
quotient of (x) the relevant Monthly Margin Payment divided by (y) the number 
of days in that month, and WKEC will be bound by all of the other terms, 
covenants and agreements of this Agreement as the same may apply to a tenancy 
at sufferance.

                                    ARTICLE 3

                  DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

            THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE 5 OF THE
PARTICIPATION AGREEMENT AND IN SECTION 6 OF THE STATION TWO AGREEMENT ARE IN
LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES OF BIG RIVERS, WHETHER WRITTEN,
ORAL, OR IMPLIED, WITH RESPECT TO THIS AGREEMENT AND ANY OTHER OPERATIVE
DOCUMENT, OR THE ASSETS. WKEC HEREBY ACKNOWLEDGES AND AGREES THAT, SUBJECT TO
THE PROVISIONS OF


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ARTICLE 5 OF THE PARTICIPATION AGREEMENT, BIG RIVERS LEASES AND WKEC TAKES THE
ASSETS AS IS AND WHERE IS AND BIG RIVERS SHALL NOT BE DEEMED TO HAVE MADE ANY
OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE ASSETS
OR ANY PART THEREOF, THE MERCHANTABILITY THEREOF OR THE FITNESS THEREOF FOR ANY
PARTICULAR PURPOSE. THE PROVISIONS OF THIS ARTICLE 3 HAVE BEEN NEGOTIATED AND,
EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE 5 OF THE PARTICIPATION AGREEMENT AND IN
SECTION 6 OF THE STATION TWO AGREEMENT, ARE INTENDED TO BE A COMPLETE EXCLUSION
AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES BY BIG RIVERS, EXPRESS OR
IMPLIED, WITH RESPECT TO THE TANGIBLE ASSETS.

                                   ARTICLE 4

                      ADDITIONAL OBLIGATIONS OF BIG RIVERS

            In addition to all other obligations of Big Rivers set forth herein,
Big Rivers shall, during Phase II, upon WKEC's reasonable request, make
available to WKEC, to the extent not previously provided to WKEC, the original
or a copy of any and all information in Big Rivers' possession related to the
operation and maintenance of the Tangible Assets, including but not limited to
reports, drawings, instructions or manuals, warranties, recall notices,
protocols, testing results, etc. provided to Big Rivers by equipment
manufacturers or other sources.

                                   ARTICLE 5

                               WKEC AND OPERATIONS

      5.1. Designation. WKEC shall be the operator of the Tangible Assets during
Phase II.

      5.2. Powers and Duties of WKEC

            5.2.1. Use. WKEC agrees to use the Assets only for the generation of
electric Energy and uses incidental thereto, so long as such incidental use does
not decrease the Capacity or increase the cost of electric Energy generated from
the Assets.

            5.2.2. Maintenance and Operation. Subject to Section 10.2 with
respect to WKEC's right to determine whether or not to restore an Enhancement or
a Major Capital Improvement, WKEC, solely at its own expense, except as
otherwise expressly contemplated by this Agreement, shall at all times,
maintain, operate, service and repair the Tangible Assets, Enhancements and
Major Capital Improvements and any additions, alterations or improvements
thereto in accordance with Prudent Utility Practice. In addition to, and not in
any way limiting the foregoing, WKEC shall, subject to Section 10.2 with respect
to its right to determine whether or not to restore an Enhancement or a


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Major Capital Improvement, operate and maintain the Tangible Assets,
Enhancements and Major Capital Improvements and any additions, alterations or
improvements thereto:

                  (a) In substantial compliance with any and all Laws or as
otherwise provided in Item 137 of Schedule 5.1.19 of the Participation
Agreement; and

                  (b) In substantial compliance with any standards imposed by
any insurance policies required to be maintained by WKEC hereunder, under the
Participation Agreement, or under any other Operative Document. 

WKEC shall be responsible for overseeing the design, construction and placing in
service of each Capital Asset authorized in any Annual Capital Budget or any
modification to such budget approved by the Operating Committee pursuant to
Article 7.

      5.3. Marketing of Energy. Subject to the terms and conditions of this
Agreement and the other Phase II Agreements, WKEC shall control the output of
the Facilities in its sole discretion and shall have the right to market and
dispatch Energy generated by the Facilities in its sole discretion and for its
own account.

      5.4. Cooperation Between Big Rivers and WKEC

            5.4.1. System Dispatch. WKEC shall not be responsible for
dispatching Big Rivers' Transmission System, it being agreed that Big Rivers
shall be responsible for such dispatch consistent with the Transmission Service
and Interconnection Agreement. WKEC shall cooperate with Big Rivers' requests in
this connection if such cooperation is required in order for Big Rivers to
perform its obligations under the Transmission Service and Interconnection
Agreement.

            5.4.2. Permits; Reports. Big Rivers shall cooperate with WKEC in
timely preparing, submitting and executing such information, records, statements
or other materials required to obtain and continue in effect any Permits
required in connection with the Tangible Assets and any changes to those Permits
deemed necessary or desirable, in the reasonable discretion of WKEC consistent
with Prudent Utility Practice, to operate the Tangible Assets during Phase II in
accordance with Prudent Utility Practice; provided, however, that Big Rivers
shall not be required to incur any out-of-pocket expenses to fulfill its
obligations under this Section 5.4.2 unless WKEC agrees to reimburse Big Rivers
for such out-of-pocket expenses. In addition, Big Rivers agrees to provide WKEC,
upon its request, with any and all information to be included in any report,
notice or filing which WKEC is obligated to make with respect to the operation
of the Facilities with governmental or other regulatory authorities, which
information Big Rivers possesses and which is not otherwise available to WKEC.

            5.4.3. Access to Facilities; Inspection. Big Rivers shall have
access to, and ingress and egress from, the Facilities and the Real Property at
all times for the purposes of (a) expanding, maintaining, operating, repairing,
renewing, replacing and upgrading Excluded Assets (including, without
limitation, constructing new transmission facilities) and (b) upon prior written
notice to WKEC, examining and observing the operation of the Tangible Assets,
provided such activity does not unreasonably interfere


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with WKEC's operation of the Facilities or its ability to otherwise fulfill its
responsibilities under this Agreement. In addition, upon prior written notice to
WKEC, Big Rivers and its authorized representatives may visit and inspect the
Tangible Assets and obtain copies (at Big Rivers' expense) of any documents or
instruments evidencing any Intangible Assets, and the books and records WKEC is
required to keep, or cause to be kept, pursuant to this Agreement, and make
copies and extracts therefrom, and may discuss any matters relating to this
Agreement or any other Phase II Agreement with the officers and employees of
WKEC and, in the presence of any officer of WKEC with WKEC's independent
accountants. Each such inspection and review shall be conducted at the expense
and risk of Big Rivers during normal business hours upon reasonable prior notice
to WKEC. Big Rivers shall have no duty to make any such inspection or inquiry
and shall not waive any rights hereunder or incur any liability or obligation by
reason of not making such inspection or inquiry. 

                                   ARTICLE 6

                               OPERATING COMMITTEE

      6.1. Establishment and Purpose. Each of Big Rivers and WKEC hereby
establish an Operating Committee consisting of not more than two representatives
appointed by each such Party. Each such Party shall promptly designate its
representatives on the Operating Committee by notice given to the other such
Party. Each such Party may appoint one or more alternates to act in the absence
of a regular member or members. The chair of the Operating Committee shall be a
representative of WKEC. The chair shall be responsible for calling meetings and
establishing agendas in consultation with the other such Party.

            The purpose of the Operating Committee shall be to serve as a means
of securing effective cooperation and interchange of information and of
providing consultation on a prompt and orderly basis among all parties to the
various Operative Documents in connection with various administrative and
technical matters which may arise from time to time in connection with the
obligations of the parties thereunder. The Operating Committee shall have the
following responsibilities:

            (a) Provide liaison among the parties with respect to their
obligations under the Operative Documents.

            (b) Establish such other ad hoc committees which may be necessary
from time to time pursuant to this Section 6.1 and exercise general supervision
over such ad hoc committees.

            (c) Attempt to resolve disputes among the parties arising under the
Operative Documents.

            (d) Review and approve the Annual O&M Budget and the Annual Capital
Budget (including deviations therefrom) as provided in Article 7 hereof.


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                  (e) Review and confirm the Environmental Rent Reduction and
the Actual Environmental O&M.

                  (f) Review and confirm WKEC's analysis of the total
expenditures caused by any Operating Emergency.

                  (g) Perform any other responsibility established for it under
any Operative Document.

      6.2. Decisions. WKEC shall make recommendations to Big Rivers with respect
to all matters taken under consideration by the Operating Committee. With
respect to all matters other than budget approval (which are addressed in
Section 7 hereof) considered by the Operating Committee, each of Big Rivers and
WKEC shall have one vote on the Operating Committee. Each Party's vote may be
exercised by the representatives appointed by the Party or, in the absence of
one or both, by an alternate(s). The members or alternates voting on behalf of a
Party shall cast that Party's vote as a single unit and shall not have the right
to vote separately. Decisions made by the Operating Committee shall be by
unanimous vote of the Parties. If the Operating Committee is unable to reach a
decision in accordance with the terms of this Section 6, the matter shall be
resolved in accordance with Article 15 of the Participation Agreement.

      6.3. Meetings. The Operating Committee shall meet at least twice annually
including in November or December (for review and approval of the Annual O&M
Budget and the Annual Capital Budget) or more often by mutual agreement.
Meetings shall be held at Henderson, Kentucky or any other mutually agreed
place.

      6.4. Notice. WKEC shall give not less than ten days' notice to Big Rivers
of regular meetings. Each meeting notice shall include an agenda prepared by
WKEC. Notice may be waived by written consent of both Big Rivers and WKEC.

      6.5. Quorum. A quorum for any meeting shall exist if each of Big Rivers
and WKEC is represented by at least one of its two members.

      6.6. Minutes. WKEC shall maintain minutes of Operating Committee meetings
and telephone conference calls. WKEC's representative shall prepare and
distribute the minutes to Big Rivers' representatives within 45 days after each
meeting or telephone conference call of the Operating Committee. The minutes,
when signed by Big Rivers and WKEC, shall be the official record of the
decisions made by the Operating Committee and shall bind WKEC and Big Rivers.

      6.7. Action Without Meeting. In lieu of meetings, the Operating Committee
may hold telephone conference calls with WKEC and Big Rivers simultaneously and
in which each such Party shall be represented by at least one of its two
representatives. The Operating Committee, in lieu of deciding any matter at a
meeting or by telephone conference, may act by instrument in writing signed by
each such Party's representatives on the Operating Committee.


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      6.8. Costs. Each of WKEC and Big Rivers shall bear for its own account all
expenses incurred by such Party's representatives on the Operating Committee in
connection with their duties on the Operating Committee. The Operating Committee
may condition its approval of any Annual O&M Budget or Annual Capital Budget
hereunder (or modification of either) upon receipt of such studies and other
information as they may deem appropriate.

      6.9. No Modification of Agreement. The Operating Committee may not modify
any of the terms, covenants or conditions of any Operative Document.

      6.10. Cooperation of the Parties. The Parties agree to cooperate and to
provide the Operating Committee with such information as is reasonably necessary
for the Operating Committee to perform its responsibilities.

                                    ARTICLE 7

                                 ANNUAL BUDGETS

      7.1. Operations Pursuant to Budgets. During the partial Year following the
Effective Date, if any, and during the two full Years immediately following that
partial Year or the Effective Date, as applicable, (collectively, the "Initial
Budget Period"), the Annual O&M Budgets and the Annual Capital Budgets attached
hereto as Schedule 7.1 shall govern (the "Initial Period Budgets"). The Parties
may review and modify such Initial Period Budgets by mutual agreement. WKEC
shall, for each Year following the Initial Budget Period during the remainder of
Phase II, prepare an Annual O&M Budget and an Annual Capital Budget pursuant to
this Article 7. Operations shall be conducted and expenses shall be incurred
pursuant to the Annual O&M Budget and the Annual Capital Budget approved by the
Operating Committee. WKEC shall also provide the Operating Committee with 5-year
plan projections of the Annual O&M Budget and the Annual Capital Budget for
information purposes only.

      7.2. Content of Annual Capital Budget and Annual O&M Budget. The Annual
O&M Budget for each Year shall include details of all anticipated costs and
expenses relating to the operation and maintenance of the Tangible Assets for
the Year and shall separately identify all Incremental Environmental O&M for the
period. The Annual Capital Budget shall describe each Capital Asset in detail
(including, but not limited to, equipment or construction specifications), shall
specify whether expenses related to that Capital Asset are Incremental Capital
Costs or Non-Incremental Capital Costs and shall include cash flow forecasts,
cost estimates, and proposed dates for installation and/or replacement in
reasonable detail.

      7.3. Review and Approval of Annual Capital Budget and Annual O&M Budget.
On or before September 1 of the last year of the Initial Budget Period and each
subsequent Year, WKEC shall submit in writing to each member of the Operating
Committee a proposed Annual O&M Budget and a proposed Annual Capital Budget in
each case for the next calendar year. Within 60 days after receipt of WKEC's
proposed Annual O&M Budget and proposed Annual Capital Budget, Big Rivers may
propose


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modifications thereto. The Operating Committee shall meet to consider any
proposed modifications and to approve the Annual O&M Budget and the Annual
Capital Budget. The Operating Committee shall approve each calendar year's
Annual O&M Budget and the Annual Capital Budget so long as such budgets are
consistent with Prudent Utility Practice and this Agreement, subject to the
limitations set forth in Section 8.1. Unless the Operating Committee unanimously
approves a proposed modification, subject to the requirements of this paragraph,
the Operating Committee must approve the Annual O&M Budget and the Annual
Capital Budget without such modification if such unmodified budgets are
consistent with Prudent Utility Practice and this Agreement, subject to the
limitations set forth in Section 8.1.

      7.4. Deadlock. In the absence of an approved Annual O&M Budget, WKEC shall
operate and maintain the Assets in accordance with Prudent Utility Practice. In
the absence of an approved Annual Capital Budget or an approved acquisition of a
Capital Asset, WKEC may (but shall not be obligated to, as a condition of
mediation or arbitration of the disputed budget or Capital Asset) install or
cause a disputed Capital Asset to be installed; provided, however, that WKEC
shall bear the full cost of such Capital Asset for its own account unless the
Parties otherwise agree or mediation or arbitration under Article 15 of the
Participation Agreement finds that WKEC is entitled to reimbursement from Big
Rivers because Big Rivers was obligated to pay for the Capital Asset pursuant to
Article 8. If the Operating Committee fails to approve an Annual O&M Budget or
an Annual Capital Budget for the following calendar year on or before December
15th the Parties will proceed with the dispute resolution procedures set forth
in Article 15 of the Participation Agreement.

      7.5. Budget Deviations. WKEC shall immediately notify the Operating 
Committee of any anticipated departure of [REDACTED] or more from an approved 
Annual Capital Budget or Annual O&M Budget. WKEC shall use reasonable efforts 
to (a) operate within [REDACTED] percent to [REDACTED] percent of the total 
approved Annual Capital Budget and (b) spend at least [REDACTED] percent of 
the total approved Annual O&M Budget (not including the fuel and reagent 
budget). Subject to the provisions set forth below, any increase of [REDACTED]
% or more proposed by WKEC to either budget shall be subject to review and 
approval by the Operating Committee; provided, that such review and approval 
shall not apply to the Annual O&M Budgets that are included in the Initial 
Period Budgets, it being understood that increases of [REDACTED]% or more 
proposed by WKEC to those budgets shall be permissible without that review 
and approval if the relevant expenditures are consistent with Prudent Utility 
Practice, in which case the additional costs will be borne by WKEC unless 
they constitute Incremental Environmental O&M required to be borne solely by 
WKEC and Big Rivers in the manner provided for in Section 2.3.3. If WKEC 
exceeds the total budget for Non- Incremental Capital Costs (exclusive of 
such costs as are for Major Capital Repairs) that are included in an approved 
Annual Capital Budget, the additional cost of those Non-Incremental Capital 
Costs shall be borne by WKEC unless the Parties otherwise agree, or unless 
remaining portions of the Big Rivers Contribution for that Year that were not 
included in the approved Annual Capital Budget are available as contemplated 
in Section 20.6.2 of the Participation Agreement (in which event such amounts 
will be applied as contemplated in that Section). Subject to the next 
succeeding sentence, if WKEC exceeds [REDACTED] percent of the total budget 
for Incremental Capital Costs,

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or for Non-Incremental Capital Costs for Major Capital Repairs, in either 
case that are included in an approved Annual Capital Budget, the additional 
costs of those Capital Assets shall be borne by WKEC unless the Parties 
otherwise agree, or unless the dispute resolution procedure under Article 15 
of the Participation Agreement determines that at the time WKEC proposed the 
applicable portions of the Annual Capital Budget (or modification thereof) 
relating to those expenditures WKEC acted consistent with Prudent Utility 
Practice, in which case the additional costs shall be borne by WKEC and Big 
Rivers in accordance with Sections 8.3 and 8.4. Notwithstanding the 
provisions of the immediately preceding sentence, if WKEC exceeds [REDACTED] 
percent of the total of any budget for Incremental Capital Costs, or for 
Non-Incremental Capital Costs for Major Capital Repairs, that are included in 
an approved Annual Capital Budget that is a part of the Initial Period 
Budgets, the additional cost of those Capital Assets shall be borne by WKEC 
unless the Parties otherwise agree, or unless the dispute resolution 
procedure under Article 15 of the Participation Agreement determines that the 
purchase and installation of those Capital Assets, and the costs thereof, are 
consistent with Prudent Utility Practice, regardless of whether the relevant 
Initial Period Budget, or WKEC's actions in connection with the same, were 
consistent with Prudent Utility Practice at the time that budget was 
prepared, in which case the additional costs shall be borne by WKEC and Big 
Rivers in accordance with Sections 8.3 and 8.4. If WKEC fails or refuses to 
use reasonable efforts to spend at least [REDACTED] percent of the total 
approved Annual Capital Budget or the total approved Annual O&M Budget 
(excluding that portion relating to Incremental Environmental O&M) and 
pursuant to the dispute resolution procedure under Article 15 of the 
Participation Agreement it is determined that such failure or refusal is 
inconsistent with Prudent Utility Practice, WKEC shall make the omitted 
expenditure as required pursuant to the applicable dispute resolution 
procedure.

      7.6. Operating Emergency. Notwithstanding any other provision of this
Agreement, in the event of an Operating Emergency, WKEC may take such action as
in its sole discretion it may deem prudent or necessary to terminate the
Operating Emergency, to preserve and maintain the safety, integrity and
operability of the Tangible Assets and to maintain Capacity and the availability
of the Tangible Assets to the maximum extent. Additional capital expenditures
incurred by WKEC in response to an Operating Emergency which are not already
included in an approved Annual Capital Budget shall be paid for by WKEC unless
(a) the same represents an Incremental Capital Cost or expenditures for a Major
Capital Repair, in which case such expenditures shall be paid by WKEC and Big
Rivers in accordance with Article 8 of this Agreement, or (b) Big Rivers shall
not have paid the entire Big Rivers Contribution for that year toward funding of
one or more Non- Incremental Capital Costs (other than costs for Major Capital
Repairs) and/or Henderson Non-Incremental Capital Costs (other than costs for
Henderson Major Capital Repairs) in accordance with Article 7 of the Cost
Sharing Agreement, Article 8 of the Lease and/or Section 8.17 or 9.10 of the
Station Two Agreement (as applicable), then that remaining amount will be
allocated to any Non-Incremental Capital Costs resulting from that Operating
Emergency as contemplated in Section 20.6.2 of the Participation Agreement.


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                                    ARTICLE 8

                            PAYMENT OF CAPITAL ASSETS

      8.1. Annual Capital Budget. Capital Assets included in an Annual 
Capital Budget or any modification of that budget approved by the Operating 
Committee shall be paid for or reimbursed in accordance with this Article 8. 
Notwithstanding anything to the contrary in this Agreement or in any other 
Operative Document, Big Rivers shall have no obligation to (a) authorize the 
acquisition or construction of or pay for any Capital Assets unless such 
Capital Assets are necessary, consistent with Prudent Utility Practice, to 
maintain the Capacity of the Facilities that is physically available and can 
be legally utilized at [REDACTED] net MW or to comply with any requirement of 
applicable Laws or administrative or judicial interpretation of an applicable 
Law (including without limitation, Environmental Laws) or any regulatory 
authority (including for the avoidance of doubt, and without regard for the 
actual time for the enactment or implementation of the same, without 
limitation, the Proposed SIP Call and any Laws that may be enacted or 
implemented pursuant thereto or in connection therewith), in which case Big 
Rivers shall be obligated to so authorize the acquisition or construction of 
and pay for such Capital Assets in accordance with the terms of this Article 
8, (b) make any expenditure for Capital Assets which would not be capitalized 
pursuant to the Accounting Practices (as interpreted, modified or 
supplemented by the Capitalization Guidelines), or (c) make any expenditure 
in connection with any personal property or other asset which does not 
constitute a Capital Asset (other than such expenditures as may be required 
by Big Rivers as a result of any breach or default by Big Rivers under any of 
the Operative Documents, or pursuant to any indemnification or hold harmless 
covenant of Big Rivers under any of the Operative Documents) (unless such 
expenditure for such personal property or other asset is part of Incremental 
Environmental O&M, in which case the provisions of Section 2.3.3 shall 
govern, or unless such expenditure involves Big Rivers' repurchase of 
personal property on the Termination Date pursuant to Section 9.3 of the 
Participation Agreement). Big Rivers shall not be required to make any 
expenditure for Capital Assets which does not meet the foregoing criteria, 
including, without limitation, any expenditures for Capital Assets, the 
principal purpose of which is to increase Capacity above [REDACTED] net MW or 
to improve the efficiency of any Facility. WKEC shall provide written notice 
to Big Rivers of its intention to make any capital expenditure (an 
"Enhancement") the principal purpose of which is to increase Capacity above 
[REDACTED] net MW or to improve the efficiency of any Facility. Big Rivers 
shall have no approval rights with respect to such Enhancement, provided that 
such Enhancement (i) is consistent with Prudent Utility Practice, (ii) causes 
no physical damage to the Facilities, (iii) does not constitute a Major 
Capital Improvement (as hereinafter defined) and (iv) does not adversely 
affect the fair market value of the Facilities (using as a basis of 
comparison the fair market value of the Facilities on the Effective Date). 
The capital costs incurred prior to the Termination Date which are associated 
with any Enhancement or Major Capital Improvement shall at all times remain 
exclusively with WKEC, including, without limitation, following the 
termination of this Agreement and the other Operative Documents. All 
Enhancements and Major Capital Improvements shall (i) become part of the 
Facilities and owned by Big Rivers (subject to the provisions of Article 24 
of the Participation Agreement), (ii) be maintained by WKEC in accordance

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with Prudent Utility Practice as provided herein and (iii) subject to Section
10.2 with respect to WKEC's right to determine whether or not to restore an
Enhancement or a Major Capital Improvement, be turned over to Big Rivers with
the Tangible Assets on the Termination Date. WKEC shall not undertake any
significant structural expansion of the Facilities or to construct any new
generating plants on the Real Property (in each case, a "Major Capital
Improvement"), without Big Rivers' and the RUS' prior written consent thereto.
To the extent that there has been any Enhancement or Major Capital Improvement
to the Facilities during either Phase I or Phase II, Big Rivers' funding
obligations hereunder with respect to both Capital Assets and Incremental
Environmental O&M shall not be increased as a result thereof; Big Rivers'
obligations shall remain subject to the standard described in Section 8.1(a)
above.

      8.2. Forecasts. WKEC shall submit to Big Rivers a forecast of cash
requirements for each Capital Asset subject to the dollar limitations with
respect to such Capital Asset set forth in an Annual Capital Budget or any
modification of that budget approved by the Operating Committee. This forecast
shall set forth cash requirements with respect to such Capital Asset (i) for
each quarterly period commencing on the first day of January, April, July and
October in which costs for such Capital Asset shall become due and (ii) for each
month of the first two quarterly periods immediately following the issuance of
the forecast. WKEC shall revise the forecast and furnish it to Big Rivers no
less often than every three months thereafter until completion of the Capital
Asset.

      8.3. Payment for Capital Assets. WKEC shall maintain an interest-bearing
account (the "Capital Account") into which Big Rivers and WKEC shall pay amounts
as provided in this Section 8.3 and from which WKEC shall be permitted to
withdraw funds to pay when due the cost of Capital Assets. On the first day of
each month during the Term, WKEC and Big Rivers shall each deposit sufficient
funds into the Capital Account based on their Capital Asset Sharing Ratios
(defined in Section 8.4 below), but limited in the case of Big Rivers to the
remaining Big Rivers Contribution (as defined in Section 20.6 of the
Participation Agreement) for that Year with respect to Non- Incremental Capital
Costs that are not for Major Capital Repairs (i) to cover all cash requirements
forecast under Section 8.2 for that month for all Capital Assets (less any
excess between funds deposited and interest accrued thereon and funds actually
required for Capital Asset expenditures during the previous month) and (ii) to
cover any shortfall between funds deposited and actual expenditures required for
Capital Assets during the previous month. With respect to funds deposited in the
prior month, which are remaining in the present month, and shortfalls in funds
deposited in the prior month relative to that month's expenditures, each Party's
obligation in the present month shall be adjusted proportionally based on that
Party's deposit during the prior month and the Party's relative share of
responsibility in that prior month for the Capital Assets for which funds were
withdrawn or not used. An illustration of the operation of this Section is set
forth in Schedule 8.3. On the Termination Date, all funds remaining in the
Capital Account shall be immediately distributed to Big Rivers and WKEC in
accordance with the same methodology as used in the prior sentence.


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      8.4. Capital Asset Sharing Ratios. Subject to the provisions of Section
8.1, WKEC and Big Rivers shall directly contribute to the payment of each
Capital Asset in accordance with its respective Capital Asset Sharing Ratio,
which will be as follows:

                  (a) Each capital expenditure made for a Capital Asset in 
accordance with Section 8.1 and to comply with a new Law or any revision or 
change to an existing Law, including but not limited to a new or revised 
Environmental Law (including for the avoidance of doubt, and without regard 
for the actual time for the enactment or implementation of the same, without 
limitation, the Proposed SIP Call and any Laws that may be enacted or 
implemented pursuant thereto or in connection therewith), or to comply with 
any change in applicable judicial or administrative interpretation of a Law, 
occurring after the Effective Date shall be deemed an Incremental Capital 
Cost. Big Rivers' share of each Incremental Capital Cost, determined as of 
the date payment for such Incremental Capital Asset is required to be made to 
the Capital Account pursuant to the forecast prepared by WKEC pursuant to 
Section 8.2, shall be as follows: (i) from the Effective Date until December 
31,[REDACTED], inclusive, [REDACTED]%; (ii) from January 1, [REDACTED] to 
December 31, [REDACTED], inclusive, [REDACTED]%; (iii) from January 1, 
[REDACTED] until the Termination Date, inclusive, [REDACTED]%. WKEC's share 
of each Incremental Capital Cost, determined as of the date payment for such 
Capital Asset is required, shall be as follows: (i) from the Effective Date 
until December 31, [REDACTED], inclusive, [REDACTED]%; (ii) from January 1, 
[REDACTED] to December 31, [REDACTED], inclusive, [REDACTED]%; and (iii) from 
January 1, [REDACTED] until the Termination Date, inclusive, [REDACTED].

                  (b) Each capital expenditure made for a Capital Asset in 
accordance with Section 8.1, but which does not constitute an Incremental 
Capital Cost as determined in accordance with Section 8.4(a), shall be deemed 
a Non- Incremental Capital Cost. Big Rivers' share of each Non- Incremental 
Capital Cost, determined as of the date payment for such Non-Incremental 
Capital Asset is required to be made to the Capital Account pursuant to the 
forecast prepared by WKEC pursuant to Section 8.2, shall be as follows: (i) 
from the Effective Date until December 31, [REDACTED], inclusive, 
[REDACTED]%; (ii) from January 1, [REDACTED] to December 31, [REDACTED], 
inclusive, [REDACTED]%; and (iii) from January 1, [REDACTED] until the 
Termination Date, inclusive, [REDACTED]%. WKEC's share of each 
Non-Incremental Capital Cost shall be as follows: (i) from the Effective Date 
until December 31, [REDACTED], inclusive, [REDACTED]%; (ii) from January 1,
[REDACTED] to December 31, [REDACTED], inclusive, [REDACTED]% and (iii) from 
January 1, [REDACTED] until the Termination Date, inclusive, [REDACTED]%.

                  (c) Nothing in this Section 8.4 shall require Big Rivers to
pay any portion of an Enhancement or Major Capital Improvement. Further nothing
in this Section 8.4 shall require WKEC, or any of its Affiliates, to assume any
responsibility related to opacity compliance at the Green or Wilson facilities
other than as contemplated in Section 8.1.

      8.5. [RESERVED]

      8.6. Facilities Retired From Service. Facilities retired from service,
whether considered original construction or Capital Assets, shall be disposed of
by WKEC in


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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

accordance with Prudent Utility Practice as soon as practicable. The net 
proceeds, if any, shall be first applied to the costs of any replacement 
Capital Assets and the remainder, if any, paid to Big Rivers.

      8.7. Title to Assets. Title to each new Capital Asset and any additions,
alterations or improvements to the Tangible Assets (including without
limitation, Enhancements and Major Capital Improvements) shall, without any
action on the part of either Party, automatically vest in Big Rivers.

                                    ARTICLE 9

                                   [RESERVED]

                                   ARTICLE 10

             CONDEMNATION: DAMAGE OR DESTRUCTION OF TANGIBLE ASSETS

      10.1. Condemnation.

            10.1.1. Taking of All or Substantially All of the Tangible Assets.
If all or substantially all of the Tangible Assets are condemned, this Agreement
shall terminate when possession of the Tangible Assets is taken by the
condemning authority. Upon such termination, WKEC shall have no further
liability or obligation under this Agreement (other than liabilities accrued
under this Agreement before the date of such condemnation). Payment from the
condemnation proceeds shall be as follows: (i) first, in the event that any
Enhancements or Major Capital Improvements were included in the Tangible Assets
condemned, to WKEC, an amount equal to the LG&E Parties' Residual Value Payment
regarding those Enhancements or Major Capital Improvements, determined by
reference to Section 24.1(e)(ii) of the Participation Agreement (which shall be
deemed to be owing under that Section as if the condemnation were a "Triggering
Transfer"), but after defining "M" in that calculation as the total amount of
the condemnation proceeds received with respect to all Tangible Assets that were
condemned; (ii) second, in full payment of all priority claims of holders of
Permitted Liens, in the priority order in which their respective claims appear
(including the priority claims held by the LG&E Parties (x) under the Settlement
Mortgage and (y) under the Mortgage and Security Agreement, but only to the
extent that the LG&E Parties' claims thereunder relate to matters other than any
Residual Value Payment for Enhancements or Major Capital Improvements due as
result of such condemnation, WKEC's loss of the use and enjoyment of the
Tangible Assets (including Enhancements and Major Capital Improvements)
associated with the period of time remaining prior to the December 31st that is
closest to the twenty-fifth anniversary of the Effective Date or, with respect
to Enhancements and Major Capital Improvements, the lesser of the remaining
weighted average useful life of the Enhancements and Major Capital Improvements,
or the time remaining prior to the December 31st that is closest to the
twenty-fifth anniversary of the


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Effective Date, as applicable, by reason of the condemnation, for which WKEC's
compensation is as described in clause (i) and in clause (iii) of this Section
10.1.1); and (iii) third, WKEC shall then be entitled to share in the
condemnation award (net of the payments described in clauses (i) and (ii) of
this Section 10.1.1) in the proportion that the net present value of the use and
enjoyment of the Assets (other than Enhancements and Major Capital Improvements)
by WKEC over the period of time remaining prior to the December 31st that is
closest to the twenty-fifth anniversary of the Effective Date bears to the fair
market value of the Tangible Assets on the date of the taking, determined on the
basis that such taking had not occurred.

            10.1.2. Partial Condemnation. If less than substantially all of the
Tangible Assets are condemned, then this Agreement shall not terminate but the
rent payable by WKEC under Section 2.3.2 shall be reduced proportionately after
possession is taken by the condemning authority based upon the ratio of the fair
market value of the specific Tangible Assets taken to the fair market value of
all Generating Plants at the time of the taking (exclusive of HMP&L's interests
in and rights to the value of Station Two not allocated to Big Rivers or Station
Two subsidiary pursuant to the Station Two Contracts at the time of the taking),
determined on the basis that said taking had not occurred.

      10.2. Damage or Destruction; Abatement.

            10.2.1. Damage or Destruction. If at any time during Phase II the
Tangible Assets are damaged or destroyed and such damage or destruction was
caused by a casualty covered by an insurance policy required by Article 13 of
the Participation Agreement, WKEC shall, to the extent insurance proceeds are
made available to WKEC and to the extent consistent with the Prudent Utility
Practice, use such proceeds to restore the Tangible Assets as soon as reasonably
possible to substantially the same general condition, character or use as
existed before the damage and this Agreement shall remain in effect; provided,
however, that to the extent that any Enhancement or Major Capital Improvement
has been damaged or destroyed as a result of a casualty covered by an insurance
policy, (i) all insurance proceeds associated with such damage or destruction
shall belong to WKEC to be applied by WKEC as it may determine in its sole
discretion and (ii) WKEC shall be under no obligation to restore such
Enhancement or Major Capital Improvement. In the event that WKEC determines that
it will not restore such Enhancement or Major Capital Improvement, WKEC agrees
that (i) it shall, prior to the Termination Date, continue to maintain the
Tangible Assets (including the remains of such Enhancement or Major Capital
Improvement) in accordance with Prudent Utility Practice, all Laws and
requirements of all insurance policies in effect pursuant to Article 13 of the
Participation Agreement and (ii) remove from the Real Property, at its sole
expense, the remains of such Enhancement or Major Capital Improvement, no later
than the Termination Date (or within a reasonable period thereafter in the event
such termination occurs prior to the December 31st that is closest to the
twenty-fifth anniversary of the Effective Date). To the extent the capital cost
of such restoration of Tangible Assets, other than Enhancements and Capital
Improvements (determined in accordance with Accounting Practices) (i) is not
covered by the proceeds of insurance and (ii) is not covered by LG&E
Self-Insurance proceeds, then such capital cost shall, to the extent consistent
with Section 8.1, be deemed payments for Capital Assets pursuant to


                                       18
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an approved modification of the Annual Capital Budget and shall be paid for in
accordance with the provisions of Sections 8.3 and 8.4, provided that the
Capital Asset Sharing Ratios applied to such restoration shall be those
appropriate based on whether it is a Non-Incremental Capital Cost or Incremental
Capital Cost, and further provided that these costs will be paid for by WKEC and
Big Rivers unless such damage or destruction resulted from (a) the gross
negligence or willful misconduct of WKEC or its Affiliates, in which case WKEC
shall bear such additional costs alone or (b) from the gross negligence or
willful misconduct of Big Rivers, in which case Big Rivers shall bear such
additional cost alone. WKEC agrees that it shall, upon Big Rivers' request on
the Termination Date (or reasonable period thereafter in the event such
termination occurs prior to the December 31st that is closest to the
twenty-fifth anniversary of the Effective Date), remove any Enhancement or Major
Capital Improvement from the Real Property, which removal shall be effected in a
manner such that it will not adversely affect the value or utility of the
remaining Assets.

            10.2.2. Abatement. If the Tangible Assets are destroyed or damaged,
other than as set forth in the following sentence, the fixed rental payments and
the Monthly Margin Payments payable by WKEC pursuant to Section 2.3.2 of this
Agreement (but subject to the limitations set forth therein), for the period
during which said damage, repair or restoration continues shall not be abated,
nor shall they be abated if the Tangible Assets are not restored because such
restoration is determined to be inconsistent with Prudent Utility Practice. In
the event that any of the Tangible Assets are destroyed or damaged by reason of
the gross negligence or willful misconduct of Big Rivers, the fixed rental
payments and the Monthly Margin Payments payable by WKEC under Section 2.3.2
will be abated only for the period during which said damage, repair or
restoration continues and only in the event the amount of electrical capacity
available to LEM from the Generating Plants (exclusive of the capacity reserved
by HMP&L from Station Two from time-to-time) is thereby reduced, and then only
in proportion with the reduction in such electric capacity below [REDACTED] MW
(exclusive of the capacity reserved by HMP&L from Station Two from time to
time).

            10.2.3. Insurance Proceeds. Notwithstanding anything contained in
this Agreement or any other Operative Document to the contrary, but subject to
the provisions of Section 10.2.1, above, in the event any Capital Asset
(exclusive of Enhancements and Major Capital Improvements) is damaged or
destroyed and any insurance proceeds are paid or payable to Big Rivers and/or
any LG&E Party as a result thereof, and in the event such Capital Asset is not
repaired or replaced in compliance with the Operative Documents (or is so
repaired or replaced using only a portion of such insurance proceeds), then all
such insurance proceeds that are not so used for the repair or replacement of
such Capital Asset or so budgeted for that use shall be divided between Big
Rivers and WKEC (with appropriate payments between those Parties) within 30 days
after the later of (a) the decision is made not to repair or replace the Capital
Assets or (b) insurance proceeds have been received (in the case of (a) and (b),
together with any interest that may have accrued on those proceeds since their
receipt), based on the respective Capital Asset Sharing Ratio of Big Rivers and
WKEC that applied to the relevant Capital Asset at the time of its original
construction, purchase or installation.


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                                   ARTICLE 11

                             DEFAULT AND TERMINATION

      11.1. Events of Default. Subject to the terms and conditions of this
Section 11, the occurrence of any of the following events shall constitute a
default under this Agreement:

                  (1) Failure by either Party to pay when due any and all
amounts payable to the other Party in accordance with the terms of this
Agreement;

                  (2) Any attempt by a Party to transfer an interest in this
Agreement or in the Assets in breach of Section 16 of the Participation
Agreement;

                  (3) [RESERVED];

                  (4) Failure of a Party to perform any material obligation set
forth in this Agreement;

                  (5) Except with respect to the Chapter 11 Case, any filing of
a petition in bankruptcy or insolvency, or for reorganization or arrangement
under any bankruptcy or insolvency laws, or voluntarily taking advantage of any
such laws by answer or otherwise or the commencement of involuntary proceedings
under any such laws if such proceedings are not withdrawn or dismissed within 60
days after such institution;

                  (6) Assignment by a Party for the benefit of creditors;

                  (7) Allowance by a Party of the appointment of a receiver or
trustee of all or a material part of its property if such receiver or trustee is
not discharged within 60 days after appointment; or

                  (8) Failure, inability or refusal of a Party or a Party's
Affiliate to cure a default or breach by such Party or such Party's Affiliate
under the Power Purchase Agreement, the Participation Agreement or the
Transmission Service and Interconnection Agreement which gives rise to a
termination of such other Phase II Agreement or any termination by that Party of
any of the foregoing agreements in breach or in default thereof.

            The Party in default under any provision of this Agreement shall be
referred to as the "Defaulting Party" and the other Party shall be referred to
as the "Non- Defaulting Party"

      11.2. Notice of Default. The Non-Defaulting Party shall have the right to
give the Defaulting Party a written notice of default ("Notice of Default"),
which shall describe the default in reasonable detail and state the date by
which the default must be cured, which shall be at least 30 days after receipt
of the notice, except as to a default under Subsection (1) of Section 11.1 which
shall be three days after receipt of notice, and


                                       20
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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

under Subsections (2), (5), (6), (7) or (8) of Section 11.1, as to which there
will be no cure right.

      11.3. Opportunity to Cure. If within the three day period with respect to
a default under Subsection (1) of Section 11.1 the Defaulting Party cures the
default, or if within the 30 day period with respect to defaults under
Subsection (4) (which is not also a default under Subsection (2), (5), (6), (7)
or (8) of Section 11.1), the Defaulting Party cures the default or if the
failure is one that cannot in good faith be corrected within such period and the
Defaulting Party certifies to the Non-Defaulting Party that it agrees to cure
such default, certifies a reasonable date by which the cure will be effected,
and begins to correct the default within the 30 day period and continues
corrective efforts with diligence until a cure is effected, the notice of
default shall be inoperative and the rights of the Non- Defaulting Party under
Section 11.5 shall not be triggered. Subject to the Defaulting Party's right to
contest under Section 11.4, if the Defaulting Party does not cure or begin (and
diligently continue) to cure the default as provided above, the Non-Defaulting
Party shall have the rights specified in Section 11.5. A Non-Defaulting Party's
right to damages or other relief resulting from a breach by a Defaulting Party
hereunder shall begin to accrue as of the first day of the breach without regard
to the availability of any cure periods hereunder, and without regard to whether
the breach or default is cured.

      11.4. Contest. If the Defaulting Party disputes the existence or nature of
a default asserted in a Notice of Default, then the Defaulting Party shall pay
the disputed payment or perform the disputed obligation, but may do so under
protest. The protest shall be in writing, shall accompany the disputed payment
or precede the performance of the disputed obligation, and shall specify the
reasons upon which the protest is based. The Defaulting Party shall deliver
copies of the protest to the Non-Defaulting Party. If it is later determined
pursuant to the dispute resolution, mediation or arbitration procedure under
Article 15 of the Participation Agreement that a protesting party is entitled to
a refund of all or any portion of a disputed payment or payments or is entitled
to the reasonable equivalent in money of non-monetary performance of a disputed
obligation theretofore made, then, upon such determination, the nonprotesting
Party shall pay such amount to the protesting Party, together with interest
thereon at a rate equal to the Prime Rate from the date of payment or from the
date of completion of performance of a disputed obligation to the date of
reimbursement.

      11.5. Remedies. If the Defaulting Party's default is one for which there
is no cure right, or if the Defaulting Party fails or refuses to cure the
default under Section 11.3 for which a cure right is available within the time
described hereunder, the Non-Defaulting Party shall have, in addition to any
rights a Party may have by law or otherwise, the following remedies:

                  (i) If Big Rivers, on the one hand, or WKEC, on the other
hand, ("X") shall fail to make any payment or shall fail to perform any
obligation under this Agreement, then the other Party ("Y") or any of its
Affiliates will have the right (but not the obligation) without prior notice to
X to perform such obligations and set-off the costs of such performance or the
amount of any such past due payment owing to Y against any


                                       21
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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

obligation of Y or any of its Affiliates owing to X or any of its Affiliates
hereunder or under any other Phase II Agreement (whether or not matured).

                  (ii) The Non-Defaulting Party may terminate this Agreement
upon 30 days' notice to the Defaulting Party of its intent to do so. The
termination rights provided for in this Section 11.5 are in addition to, and not
in lieu of, any rights to terminate this Agreement as are set forth in the
Guaranty and the Station Two Agreement, which termination rights shall be
cumulative.

                  (iii) Notwithstanding anything contained herein or in any
Operative Document to the contrary, Big Rivers may also terminate this Agreement
at any time that the Guaranty provides Big Rivers with the right to terminate
this Agreement. No provision of this Agreement or any other Operative Document
purporting to limit special, incidental and consequential damages that may be
recoverable by Big Rivers shall bar or constitute any waiver of any claim by Big
Rivers for any Monthly Margin Payments as its damages arising by reason of a
default by WKEC under this Agreement; provided, that nothing contained herein
shall be deemed to be an admission by WKEC that the loss of such payments by Big
Rivers is or shall be an actual or direct damage incurred by Big Rivers arising
out of such a default by WKEC.

      11.6. Special Abatement. The annual rental payments payable by WKEC
pursuant to Section 2.3.2 hereunder shall be reduced in accordance with the
provisions of Section 16.3 of the Transmission Service and Interconnection
Agreement, and in accordance with the provisions of the Station Two Agreement.

                                   ARTICLE 12

                               SEVERAL OBLIGATIONS

            Nothing contained in this Agreement shall ever be construed to
create an association, joint venture, trust or partnership, or to impose a trust
or partnership covenant, obligation or liability on or with regard to either of
the Parties. Each Party shall be individually responsible for its own covenants,
obligations and liabilities as herein provided.

                                   ARTICLE 13

                               GENERAL PROVISIONS

      13.1. Notices. All provisions set forth in the Participation Agreement
with respect to Notices shall apply hereto.

      13.2. Waiver. The failure of a Party to insist on the strict performance
of any provision of this Agreement or to exercise any right, power or remedy
upon a breach of any provision of this Agreement shall not constitute a waiver
of any provision of this Agreement or limit the Party's right thereafter to
enforce any provision or exercise any right.


                                       22
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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

      13.3. Amendment and Modification. No amendment or modification of this
Agreement shall be valid unless made in writing and duly executed by the
Parties.

      13.4. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the internal laws of the Commonwealth of Kentucky but without
giving effect to the conflict of law rules of such jurisdiction.

      13.5. Further Assurances. Each Party shall take from time to time, for no
additional consideration, such actions and execute such additional instruments
as may be reasonably (a) necessary to implement and carry out the intent and
purpose of this Agreement or (b) desirable but not necessary to implement and
carry out the intent and purpose of this Agreement without incurring material
cost.

      13.6. Survival of Terms and Conditions. The provisions of this Agreement
related to the recovery of damages sustained hereunder and the exercise of
remedies generally shall survive its termination to the full extent necessary
for their enforcement and the protection of the Party in whose favor they run.

      13.7. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the Parties and their respective successors and permitted assigns.

      13.8. Recordation. WKEC shall prepare a short form of this Agreement in
form and substance satisfactory to Big Rivers, which shall be executed and
acknowledged by the Parties and recorded by WKEC. WKEC may, in its sole
discretion, elect to record this entire Agreement.

      13.9. Time of the Essence. A material consideration of the Parties
entering into this Agreement is that the Parties will make all required payments
as and when due and will perform all other obligations under this Agreement in a
timely manner. Except as otherwise specifically provided in this Agreement, time
is of the essence of each and every provision of this Agreement.

      13.10. Counterparts. This Agreement may be executed in counterparts, both
of which taken together shall constitute a single agreement.

      13.11. Entire Agreement. This Agreement, including all attached Schedules,
together with the other Operative Documents, contain the entire and final
understanding of the Parties, are intended fully to integrate the Parties'
agreement, and supersede all prior agreements and understandings between the
Parties related to the subject matter of those agreements.

      13.12. Schedules. Any matter disclosed by a Party on any schedule hereto
shall be deemed to be disclosed by such Party on all other applicable schedules,
provided that such Party has attempted in good faith to disclose such matter on
all schedules wherein such disclosure is appropriate to make such schedules true
and correct.


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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

      13.13. Construction. This Agreement was the product of negotiations
between the Parties, and therefore the rule of contract construction that an
agreement shall be construed against the drafter shall not be applied to this
Agreement.

      13.14. Continuation of Agreement.

            13.14.1. Big Rivers recognizes and acknowledges that the RUS, the
Members and the LG&E Parties have in good faith entered into the transactions to
which this Agreement and the other Operative Documents relate, and have agreed
to consummate those transactions, in specific reliance upon the fact that the
transactions contemplated in the Operative Documents shall continue for the
stated Term (i.e., approximately 25 years). Big Rivers has informed the RUS, the
Members and the LG&E Parties that Big Rivers has in good faith entered into this
Agreement in reliance upon and with the specific intent of continuing this
transaction through the stated Term (i.e., approximately 25 years). In order to
enable Big Rivers to comply with certain requirements of the KPSC related to
approval of its proposed rates, and to provide additional assurances of its good
faith and commitment, and without in any way intending to reduce or otherwise
avoid abiding by this Agreement throughout its stated Term (i.e., approximately
25 years), and without any implication by any of the Parties that Big Rivers is
or would be entitled to attempt to reduce or otherwise avoid the terms of this
Agreement, Big Rivers additionally commits and undertakes that for the period
prior to January 1, 2012, in the event of any filing by Big Rivers of a petition
or similar filing for bankruptcy or reorganization or arrangement under any
federal or state bankruptcy or insolvency or similar Law, or the commencement of
involuntary proceedings against Big Rivers under any such Law, neither Big
Rivers nor its successors or assigns, if any, shall file, direct the filing of,
join in, consent to, or otherwise support any other party to any such
proceedings in a motion, complaint, pleading, statement, testimony or otherwise
make any attempt to terminate, reject or modify this Agreement (other than in
accordance with its terms) under Section 365 of the United States Bankruptcy
Code, 11 U.S.C. ss. 101, et seq., as it subsequently may be amended, modified or
supplemented or any other similar, applicable federal or state bankruptcy or
insolvency Laws (the "Insolvency Assurance"). Thereafter, Big Rivers shall
continue the Insolvency Assurance unless and until the RUS, in the exercise of
its discretion, were to consent to any of the foregoing. In all events and
throughout the Term, each of the RUS, the Members and the LG&E Parties shall be
entitled to rely upon the specific provisions of this Agreement, including but
not limited to the stated Term (i.e., approximately 25 years), and shall be
entitled to take whatever actions may prove to be necessary or appropriate to
maintain the benefit of their bargain in the event that Big Rivers ever attempts
to cause the rejection or termination of this Agreement (other than in
accordance with its specific terms) in a subsequent bankruptcy or reorganization
proceeding or otherwise.

            13.14.2. WKEC recognizes and acknowledges that the RUS, the Members
and Big Rivers have in good faith entered into the transactions to which this
Agreement and the other Operative Documents relate, and have agreed to
consummate those transactions, in specific reliance upon the fact that the
transactions contemplated in the Operative Documents shall continue for their
stated Term (i.e., approximately 25 years). WKEC has informed the RUS, the
Members and Big Rivers that WKEC has in good faith entered into this Agreement
in reliance upon and with the specific intent of continuing this transaction
through the stated Term (i.e., approximately 25 years). In order to facilitate
approval of the proposed rates of Big Rivers and provide additional assurances
of its good faith and commitment, and without in any way intending to reduce or
otherwise avoid abiding by this Agreement throughout its stated Term (i.e.,
approximately 25


                                       24
<PAGE>

                      CONFIDENTIAL - SUBJECT TO COURT ORDER

years), and without any implication by any of the Parties that WKEC is or would
be entitled to attempt to reduce or otherwise avoid the terms of this Agreement,
WKEC additionally commits and undertakes that for the period prior to January 1,
2012, in the event of any filing by WKEC of a petition or similar filing for
bankruptcy or reorganization or arrangement under any federal or state
bankruptcy or insolvency or similar Law, or the commencement of involuntary
proceedings against WKEC under any such Law, neither WKEC nor its successors or
assigns, if any, shall file, direct the filing of, join in, consent to, or
otherwise support any other party to any such proceedings in a motion,
complaint, pleading, statement, testimony or otherwise make any attempt to
terminate, reject or modify this Agreement (other than in accordance with its
terms) under Section 365 of the United States Bankruptcy Code, 11 U.S.C. ss.
101, et seq., as it subsequently may be amended, modified or supplemented or any
other similar, applicable federal or state bankruptcy or insolvency Laws (the
"Insolvency Assurance"). Thereafter, WKEC shall continue the Insolvency
Assurance unless and until the RUS, in the exercise of its discretion, were to
consent to any of the foregoing. In all events and throughout the Term, each of
the RUS, the Members and Big Rivers shall be entitled to rely upon the specific
provisions of this Agreement, including but not limited to the stated Term
(i.e., approximately 25 years), and shall be entitled to take whatever actions
may prove to be necessary or appropriate to maintain the benefit of their
bargain in the event that WKEC ever attempts to cause the rejection or
termination of this Agreement (other than in accordance with its specific terms)
in a subsequent bankruptcy or reorganization proceeding or otherwise.

            13.14.3. Nothing in this Section 13.14 shall modify, reduce or
diminish: (i) the rights of the RUS under the New RUS Loan Documents (as defined
in that certain New RUS Loan Agreement between Big Rivers and the RUS to be
executed and delivered on the Effective Date); or (ii) the rights of the
mortgagees under the New RUS Mortgage (as defined in said New RUS Loan
Agreement); including without limitation, any right to withhold consent with
respect to any sale or disposition of Big Rivers' property except on terms
acceptable to the RUS and/or such mortgagees; but subject, in the case of (i)
and (ii) above, in all cases to the Non-Disturbance Agreement of even date
herewith among Big Rivers, RUS, AMBAC Assurance Corporation and the LG&E
Parties.

            13.14.4. The provisions of this Section 13.14 shall survive the
expiration or termination of this Agreement for any reason, and shall continue
to be binding on the Parties.


                                       25
<PAGE>

                      CONFIDENTIAL - SUBJECT TO COURT ORDER

            IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of this 15th day of July, 1998.


                                        BIG RIVERS ELECTRIC CORPORATION

                                        By /s/ Michael H. Core
                                          --------------------------------------
                                        Printed Name: Michael H. Core
                                                     ---------------------------
                                        Title: President and CEO
                                              ----------------------------------


                                        WESTERN KENTUCKY ENERGY CORP.

                                        By /s/ George Basinger
                                          --------------------------------------
                                        Printed Name: George W. Basinger
                                                     ---------------------------
                                        Title: President
                                              ----------------------------------

                                        [*All Schedules and Exhibits REDACTED]

                                       26
                                     
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE 1 DEFINITIONS.........................................................1
ARTICLE 2 LEASE...............................................................1
  2.1.  Lease Grant...........................................................1
  2.2.  Term..................................................................2
  2.3.  Rental and Margin Payments............................................2
    2.3.1.  Initial Rental Payment............................................2
    2.3.2.  Annual Rental; Monthly Installment Payments; Monthly
               Margin Payments................................................2
    2.3.3.  Adjustment for Incremental Environmental O&M......................5
    2.3.4.  [RESERVED]........................................................6
  2.4.  Covenant of Quiet Enjoyment...........................................6
  2.5.  No Other Interest.....................................................6
  2.6.  Return of the Tangible Assets.........................................6
ARTICLE 3 DISCLAIMER OF REPRESENTATIONS AND WARRANTIES........................6
ARTICLE 4 ADDITIONAL OBLIGATIONS OF BIG RIVERS................................7
ARTICLE 5 WKEC AND OPERATIONS.................................................7
  5.1.  Designation...........................................................7
  5.2.  Powers and Duties of WKEC.............................................7
    5.2.1.  Use...............................................................7
    5.2.2.  Maintenance and Operation.........................................7
  5.3.  Marketing of Energy...................................................8
  5.4.  Cooperation Between Big Rivers and WKEC...............................8
    5.4.1.  System Dispatch...................................................8
    5.4.2.  Permits; Reports..................................................8
    5.4.3.  Access to Facilities; Inspection..................................8
ARTICLE 6 OPERATING COMMITTEE.................................................9
  6.1.  Establishment and Purpose.............................................9
  6.2.  Decisions............................................................10
  6.3.  Meetings.............................................................10
  6.4.  Notice...............................................................10
  6.5.  Quorum...............................................................10
  6.6.  Minutes..............................................................10
  6.7.  Action Without Meeting...............................................10
  6.8.  Costs................................................................11
  6.9.  No Modification of Agreement.........................................11
  6.10.  Cooperation of the Parties..........................................11
ARTICLE 7 ANNUAL BUDGETS.....................................................11
  7.1.  Operations Pursuant to Budgets.......................................11
  7.2.  Content of Annual Capital Budget and Annual O&M Budget...............11
  7.3.  Review and Approval of Annual Capital Budget and
          Annual O&M Budget..................................................11
  7.4.  Deadlock.............................................................12
  7.5.  Budget Deviations....................................................12
  7.6.  Operating Emergency..................................................13
ARTICLE 8 PAYMENT OF CAPITAL ASSETS..........................................14
  8.1.  Annual Capital Budget................................................14


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                      CONFIDENTIAL - SUBJECT TO COURT ORDER

                                                                            Page
                                                                            ----

  8.2.  Forecasts............................................................15
  8.3.  Payment for Capital Assets...........................................15
  8.4.  Capital Asset Sharing Ratios.........................................16
  8.5.  [RESERVED]...........................................................16
  8.6.  Facilities Retired From Service......................................16
  8.7.  Title to Assets......................................................17
ARTICLE 9 [RESERVED].........................................................17
ARTICLE 10 CONDEMNATION: DAMAGE OR DESTRUCTION OF TANGIBLE
              ASSETS.........................................................17
  10.1. Condemnation.........................................................17
    10.1.1.  Taking of All or Substantially All of the
               Tangible Assets...............................................17
    10.1.2.  Partial Condemnation............................................18
  10.2. Damage or Destruction; Abatement.....................................18
    10.2.1.  Damage or Destruction...........................................18
    10.2.2.  Abatement.......................................................19
    10.2.3.  Insurance Proceeds..............................................19
ARTICLE 11 DEFAULT AND TERMINATION...........................................20
  11.1.  Events of Default...................................................20
  11.2.  Notice of Default...................................................20
  11.3.  Opportunity to Cure.................................................21
  11.4.  Contest.............................................................21
  11.5.  Remedies............................................................21
  11.6.  Special Abatement...................................................22
ARTICLE 12 SEVERAL OBLIGATIONS...............................................22
ARTICLE 13 GENERAL PROVISIONS................................................22
  13.1.  Notices.............................................................22
  13.2.  Waiver..............................................................22
  13.3.  Amendment and Modification..........................................23
  13.4.  Governing Law.......................................................23
  13.5.  Further Assurances..................................................23
  13.6.  Survival of Terms and Conditions....................................23
  13.7.  Successors and Assigns..............................................23
  13.8.  Recordation.........................................................23
  13.9.  Time of the Essence.................................................23
  13.10. Counterparts........................................................23
  13.11. Entire Agreement....................................................23
  13.12. Schedules...........................................................23
  13.13. Construction........................................................24
  13.14. Continuation of Agreement...........................................24

                    SCHEDULES [*All Schedules REDACTED]

Description                                                       Schedules
Monthly Margin Payment                                                  2.3
Initial Period Budgets                                                  7.1
Illustration of Operation of Section 8.3                                8.3


                                       ii