Document:

STEAM PURCHASE CONTRACT

         This STEAM  PURCHASE  CONTRACT,  dated as of November 30, 1984,  by and
between  GUILFORD  MILLS,  INC., a corporation  organized and existing under the
laws of the State of Delaware ("Buyer"),  and COGENTRIX LEASING  CORPORATION,  a
corporation organized and existing under the laws of the State of North Carolina
("Cogentrix").

                                    RECITALS:
                                    ---------

         A.  Buyer is a  manufacturer  of  textile  goods and owns and  operates
textile plants  throughout North Carolina,  including a textile plant located at
North Carolina. Highway 11, Kenansville,  North Carolina, known as the "Guilford
East" plant ("Buyer's Plant").

         B.  Cogentrix  is engaged in the  business  of building  and  operating
cogeneration  facilities  which  produce  steam arid thermal  energy for sale to
industrial companies and electricity for sale to regional electric utilities.

         C. Cogentrix  wishes to provide Buyer with all steam and thermal energy
required for use in the  operation of Buyer's Plant and has entered into certain
agreements  for the  construction,  financing and  management of a  cogeneration
plant (the "Cogeneration  Facility") to be located adjacent to Buyer's Plant and
has  entered  into a lease (the  "Lease")  with Buyer of certain  real  property
adjacent  to  Buyer's  Plant  on  which  such  Cogeneration   Facility  will  be
constructed.

<PAGE>

         NOW,  THEREFORE,  in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, Buyer and Cogentrix hereby agree as follows:

         1. Construction of Cogeneration Facility. Cogentrix agrees to construct
the  Cogeneration  Facility,  to  consist  of two  coal-fired  boilers  rated at
approximately  157,500 pounds per hour and a condensing steam turbine  generator
rated at approximately  35,000  kilowatts,  substantially in accordance with the
plans and  specifications  issued for bids on March 12, 1984.  The  Cogeneration
Facility will be located as shown on the plat attached  hereto as Exhibit A. All
costs associated with engineering, licensing, construction, and operation of the
Cogeneration  Facility  will  be  the  responsibility  of  Cogentrix.  Cogentrix
reserves the right to make changes in such plans and  specifications,  provided,
however, Buyer shall have the right to approve any material changes to the plans
and specifications affecting the exterior design of the Cogeneration Facility to
insure that such design is  aesthetically  compatible with Buyer's Plant and the
surrounding  areas, any material changes to the pollution  control  equipment in
the  Cogeneration  Facility,  and. any changes that would  materially  adversely
affect  Cogentrix's  ability  to  supply  the steam and  thermal  fluid  heating
requirements of Buyer's Plant.  The Buyer will cooperate with Cogentrix and take
any actions reasonably requested by Cogentrix, at Cogentrix's expense, to enable
Cogentrix to obtain all necessary  licenses and permits to construct and operate
the  Cogeneration  Facility  and to permit the sale of steam and thermal  energy
under this Agreement.

         2. Sale of Steam. Cogentrix agrees to sell (a) process steam, which may
be  high-pressure  or  low-pressure,  to Buyer for use in Buyer's  plant up to a
maximum  of  400,000,000  pounds of steam per annum and (b) the  amount of steam
required  for use in the hot oil  system  in the  Buyer's  Plant up to a maximum
40,000,000  BTU's per hour.  Cogentrix  will  deliver and Buyer will receive the
process  low-pressure  steam at a volume up to  100,000  lbs.  per hour,  with a
maximum peak delivery of up to 125,000 lbs. per hour for periods up to one hour.
The steam for the hot oil system shall be of sufficient  temperature to maintain
a thermal  oil  temperature  of  550(degree)F  in the hot oil  header in Buyer's
Plant.  All,  steam shall be delivered  with 1 ppm maximum total  solids.  If an
amine system is used for corrosion  control in the Cogentrix piping system,  the
conductivity  of the steam  delivered to the Buyer must not exceed 10 micromhos.
If a nonamine  system is used,  the  conductivity  of  delivered  steam must not
exceed  5  micramhos.  Cogentrix  agrees  to sell to Buyer  at its  option  high
pressure  steam at a volume of up to 30,000 pounds per hour at the boiler outlet
station  at  conditions  not  to  exceed  1500  pounds  per  square  inch  gauge
("p.s.i.g.")  and  950(degree)F,  as may be  required by Buyer.  Cogentrix  will
install  and owe such  meters as shall be  necessary  to measure  and record the
steam  and  BTU's  delivered  and  received  in  accordance  with the  terms and
conditions of this  Agreement.  Meters  utilized for this purpose shall meet the
specifications,  and shall be subject to calibration and testing as set forth in
Exhibit B hereto.  Buyer agrees that beginning with the Initial Delivery Date as
defined  below,  it will  purchase  and use or cause to be used  (other than for
generation of electricity)  from Cogentrix  during each Term Year (as defined in
subparagraph  5(c) hereof)  process  steam  representing  a minimum of 5% of the
"total energy output" of the  Cogeneration  Facility as defined by 18 C.F.R. ss.
292.202.

<PAGE>

         Buyer  agrees  that its  obligation  to purchase a minimum of 5% of the
"total energy  output" of the  Cogeneration  Facility  under this Paragraph 2 is
unconditional,  and shall not be relieved by force majeure (as defined  herein),
transfer  or closing of Buyer's  Plant or  otherwise,  but the  amounts  payable
hereunder shall be determined in accordance with Paragraph 5(e).

         To ensure an available supply of steam to Buyer,  Cogentrix agrees that
in the event its operations are affected by a coal or transportation  strike for
a period of fourteen (14) or more consecutive days,  Cogentrix shall curtail its
operations and reduce  production of steam and the generation of electricity for
parties other than Buyer to the extent  possible and for such periods of time in
order to maintain a supply of coal that will enable Cogentrix to supply steam to
Buyer, for not less than four (4) months.

         3. Initial  Deliverv Date.  Cogentrix agrees to make steam available to
Buyer in accordance with Paragraph 2 above,  and Buyer agrees to accept delivery
of steam under this Agreement, within five (5) business days after Cogentrix has
notified Buyer that the Cogeneration Facility is commercially  operational (such
date of commencement of delivery the "Initial Delivery Date").  Buyer shall have
no obligations  hereunder  unless the Initial  Delivery Date occurs on or before
two (2) years  six (6)  months  from the date of  execution  of this  Agreement,
provided that the Initial  Delivery Date shall be extended by the occurrence and
the  continuation  of an event of force  majeure as  defined  in the  succeeding
sentence. As used in this Agreement,  "force majeure" shall be an event by which
either party shall be prevented from  delivering or receiving steam by reason of
or through strike,  stoppage of labor, riot, fire, flood, ice,  invasion,  civil
war, commotion, insurrection,  military or usurped power, accident, order of any
court or authority granted in any bona fide adverse legal proceedings or action,
order of any civil authority,  explosion,  act of God or public enemies,  or any
other cause reasonably beyond the control of the parties (including  Cogentrix's
failure to obtain all  necessary  licenses and permits to construct  and operate
the  Cogeneration  Facility  after  diligent  effort  by  Cogentrix),   and  not
attributable to negligence. Notwithstanding the foregoing, in no event shall the
Initial  Delivery  Date be extended  beyond four (4) years from the date of this
agreement,  except by mutual  agreement  of the  parties  in  writing.  Upon the
failure by  Cogentrix to commence  such  delivery or failure of Buyer to receive
such steam on or before the Initial Delivery Date (as extended  pursuant to this
Section 3),the  non-breaching  party, at its option and by written notice to the
other party,  may declare this  Agreement,  the Lease and any other  contractual
agreements  or  dealings  between  Cogentrix  and the  Buyer  to be  immediately
terminated and cancelled.

         4. Term;  Breaches and Remedies.  This Agreement shall run concurrently
with the Lease executed by the parties this same date and shall terminate on the
same date as that Lease,  giving effect to any renewals thereof.  Cogentrix,  in
addition  to all other  legal  remedies  available  to it,  may  terminate  this
Agreement or suspend sales of steam and thermal energy hereunder (1) for Buyer's
failure to pay any applicable  bill within 20 days after written notice has been
given that such bill is due and payable,  (2) for fraudulent or unauthorized use
of  Cogentrix's  meters  or (3)  for a  breach  by the  Buyer  of  paragraph  10
hereunder.  In  addition,  Cogentrix  may suspend  sales until any  condition on
Buyer's side of the point of  interconnection  with Buyer's Plant actually known
by  Cogentrix  to be,  or  which  .  Cogentrix  reasonably  anticipates  may be,
dangerous to life or property has been remedied.

<PAGE>

         Failure of Cogentrix to terminate this Agreement or to suspend the sale
of steam or thermal energy at any time after the occurrence of grounds therefor,
or to resort to any other legal  remedy or to  exercise  any one or more of such
alternative remedies,  shall not waive or in any manner affect Cogentrix's right
later to resort to any one or more of such  rights or remedies on account of any
such ground then existing or which may subsequently occur. Any suspension of the
sale of  steam  or the  thermal  energy  by  Cogentrix  or  termination  of this
Agreement upon any  authorized  grounds shall in no way operate to relieve Buyer
of Buyer's  liability  to  compensate  Cogentrix  for  services  and  facilities
previously supplied.

         5. Purchase Price. The price Buyer shall pay Cogentrix for the purchase
of steam and thermal energy shall be determined as follows:

                  (a) During the first five Term Years of this Agreement,

                           (i) the  price  for high  pressure  and Low  Pressure
                  process steam shall be $5.10 per thousand pounds;

                           (ii) the price for the steam used in Buyer's  hot oil
                  system  per  one  million  BTU's  (including  only  the  BTU's
                  actually used in Buyer's process  equipment and the BTU's lost
                  in the  piping  to and from the  process  equipment)  shall be
                  $4.16 per 1,000,000 BTU's.

                  (b) Commencing on the first day of the sixth Term Year, and on
         the  first day of each Term Year  thereafter,  new  purchase  rates for
         steam and BTU's shall be computed based on the percentage increase,  if
         any, in the Delivered Cost of Coal (as hereinafter defined) from August
         1, 1985. The new purchase rats for steam and BTU's shall be computed by
         multiplying the  appropriate  purchase rate set forth in Paragraph 5(a)
         above,  whichever is applicable (the "Base Rate") times a fraction, the
         numerator of which shall be the Delivered Cost of Coal in effect on the
         first day of the Term Year for which such calculation is being made and
         the  denominator of which shall be the Delivered Cost of Coal on August
         1, 1985. As used herein,  the  "Delivered  Cost of Coal" shall refer to
         the total price per ton paid by  Cogentrix to purchase  coal  including
         the  transportation  cost  per ton  for  delivery  to the  Cogeneration
         Facility. In no event shall such purchase prices be less than either of
         the Base Rates.

                  (c) As used herein, the term "Term Year" shall mean the period
         beginning with the initial Delivery Date or any anniversary date of the
         initial Delivery Date and ending twelve months thereafter.

                  (d) During each Term Year, Buyer shall be entitled to a credit
         to be applied against the amounts  payable  hereunder to Cogentrix at a
         rate of S1.50 per  thousand  pounds of steam  (excluding  steam used in
         Buyer's hot oil system)  for the  initia1  100,000,000  pounds of steam
         purchased  per annum,  such that the maximum  aggregate  amount of such
         credit for each Term Year shall be $150,000.00.

                  (e) The parties  hereto  agree that,  if Buyer  should  close,
         sell,  lease or otherwise  transfer Buyer's Plant during any Term Year,
         Buyer shall not be relieved of its  obligations  hereunder  except that
         Buyer shall  thereafter be liable for payment of steam  delivered under
         Paragraph  2 hereof  at the rate of  $20,000.00  per Term Year for that
         period  commencing  with  the  date of  closing  and  ending  on a date
         coinciding  with the date that would have,  absent the  closing,  sale,
         lease or other transfer,  marked the end of the Lease term as in effect
         at  the  time  of  such  closing,   sale,  lease,  or  other  transfer.
         Notwithstanding  the  foregoing,  Buyer  shall  not be  liable  for any
         amounts under this Agreement in the event of force majeure resulting in
         the  total destruction of Buyer's Plant.

<PAGE>

         6. Exclusive  Contract.  Buyer agrees that it will not (a) purchase any
of the steam or thermal fluid  requirements for the Buyer's Plant from any other
person,  nor (b) will it produce such steam or thermal fluid  itself;  provided,
that, if Buyer shall have purchased the minimum amount  required to be purchased
from.,  Cogentrix  during a Term  Year  under  Paragraph  2  hereof,  Buyer  may
thereafter  produce its steam and thermal fluid  requirements  in excess of such
amount for the  remainder of such Term Year if Buyer shall have given  Cogentrix
first option to supply such requirements and Cogentrix shall have been unwilling
or unable to provide such  requirements  at a price  comparable to Buyer's costs
for  producing  such  requirements.  Notwithstanding  anything  to the  contrary
contained  herein,  Buyer  agrees  that it will not  resell any steam or thermal
energy purchased under this Agreement to any other person or entity.

         7. Interconnection  with Buyer's Plant.  Cogentrix shall be responsible
for all required  auxiliary  equipment and systems  required to supply steam and
thermal energy to the point of  interconnection  with Buyer's  Plant.  Cogentrix
will supply and maintain all piping systems between the  Cogeneration  Plant and
the  interconnection  point with  Buyer's  Plant  specified on Exhibit B hereto.
Buyer will be responsible for the construction, operation and maintenance of the
piping and other  equipment  and  apparatus  to be located in Buyer's  Plant and
required  to  receive  the  delivery  of  steam  and  thermal  energy  from  the
Cogeneration Facility to Buyer's Plant. Buyer's interconnection facilities shall
be designed to accepted  engineering  standards.  Buyer shall  submit a facility
description,  including  equipment  specifications,  to Cogentrix for review and
approval  prior  to the  connection  of said  facilities  and  equipment  to the
Cogeneration  Facility.  Cogentrix's review shall not be construed as confirming
or endorsing  Buyer's  design nor as a warranty as to the safety,  durability or
reliability of Buyer's facility or equipment.  Cogentrix shall not, by reason of
its review or failure to review Buyer's facilities, be responsible for strength,
details of design,  adequacy or capacity of Buyer's facility.or  equipment,  nor
shall  Cogentrix's  acceptance be deemed to be an endorsenent of any facility or
equipment.

         8.  Service  Interruptions.  Cogentrix  does not  guaranty a continuous
supply of steam to Buyer but agrees to use reasonable  diligence at all times to
provide  satisfactory  service and to remove the cause or causes in the event of
failure,  interruption,  reduction or suspension of service, but Cogentrix shall
not be liable for any loss or damage resulting from such failure,  interruption,
reduction or  suspension  of service which is due to any accident or other cause
beyond  its  control.  Cogentrix  reserves  the right to suspend  sales  without
liability  on its part at such times and for such  periods and in such manner as
it may reasonably deem advisable for the purpose of making necessary adjustments
to, changes in, or repairs to the Cogeneration  Facility provided that cogentrix
will  endeavor to minimize  such  suspension  for repairs,  or in cases where in
Cogentrix's  opinion the  continuance-of the delivery of steam or thermal energy
from the Cogeneration Facility would endanger persons or property.

<PAGE>

         9.Billings.  Cogentrix will bill Buyer on a monthly basis for the steam
and BTU's  purchased by Buyer.  Payment for such invoices shall be made by Buyer
within  fifteen (15) days after receipt of such bill.  Payments made  thereafter
shall be subject to a late payment  charge on the unpaid  amount of such invoice
of 1 % per month.

         10.  Assignment of Agreement.  This Agreement  shall be transferred and
assigned by Buyer to any person or entity  purchasing  or leasing  Buyer's Plant
and, as a condition to any such purchase or lease of Buyer's  Plant,  Buyer will
cause such purchaser or lessee to agree to be bound in accordance with the terms
hereof;  in  such  event  and  unless  otherwise  agreed,   Buyer  shall  remain
responsible to Cogentrix  with respect to any  successor's  compliance  with the
minimum  purchase  requirements  set forth in Paragraph 2 hereof  subject to the
limitations of Paragraph 5(e).

         Cogentrix  shall have the right to assign  its rights and duties  under
this Agreement  either as  collateral,  security or to another entity created in
connection  with  the  financing  arrangements  entered  into by  Cogentrix,  by
notifying  Buyer  of such  assignment.  In the  event  of any  such  assignment,
Cogentrix shall remain liable for performance hereunder. Buyer agrees to execute
a "Consent and Agreement"  concurrently  with the execution of this Agreement in
form mutually satisfactory to the parties.

         Subject to the  foregoing,  this  Agreement  shall be binding  upon and
shall inure to the benefit of the parties, their successors and assigns.

         11. Access to Premises.  The duly authorized agents of Cogentrix shall,
upon notice to Buyer's  security  personnel have the right of ingress and egress
to Buyer's  Plant at all reason  able hours for the  purpose of reading  meters,
inspecting  Cogeritrix's  apparatus  and  equipment,  changing,  exchanging  or,
repairing  Cogentrix's property in the Buyer's Plant, or removing such apparatus
and equipment at the time of, or any time after,  suspension of purchases under,
or termination of, this Agreement. Buyer shall protect Cogentrix's apparatus and
equipment  in Buyer's  Plant and shall permit no one but  Cogentrix's  agents to
handle such  apparatus and  equipment.  In the event of any loss of or damage to
such  apparatus  or  equipment  of  Cogentrix   caused  by  or  arising  out  of
carelessness,  neglect  or  misuse  by Buyer or its  employees,  contractors  or
agents, any loss or damage resulting to Cogentrix shall be paid by Buyer. In the
event of any loss or damage to equipment owned by the Buyer caused by or arising
out  of  carelessness,   neglect  or  misuse  by  Cogentrix  or  its  employees,
contractors or agents,  any loss or damage  resulting to the Buyer shall be paid
by Cogentrix.

         12. Shutdowns. In the event that any pollution control equipment in the
Cogeneration  Facility  malfunctions,  Cogentrix will shut down the operation of
the boiler  related to such  pollution  control  equipment  if such  malfunction
results in higher than government permitted levels of air-pollutants in the area
of Buyer's Plant.  Cogentrix  will undertake the repairs of such  malfunctioning
equipment as  expeditiously  as possible and will not begin  operations  of such
boiler  until there has been full  compliance  with all  governmental  clean air
regulations.

         13.  Indemnification.   Buyer  hereby  agrees  to  indemnify  and  hold
Cogentrix harmless from any and all liability,  claims, judgments, losses, costs
and  expenses  for  injury,  loss or damage to  person  or  property,  including
personal  injury or property  damage to  Cogentrix or  Cocentrix's  employees or
agents,   on  account  of  defective   construction  or  equipment  (other  than
construction or equipment provided by Cogentrix), or improper or careless use of
steam or thermal energy, on Buyer's side of the point of interconnection between
the  Cogeneration  Facility  and  Buyer's  Plant.  Cogentrix  hereby  agrees  to
indemnify  and hold the  Buyer  harmless  from  any and all  liability,  claims,
judgments,  losses,  costs and expenses for injury,  loss or damage to person or
property,  including  personal  injury  or  property  damage to the Buyer or the
Buyer's employees or agents,  on account of defective  construction or equipment
(other  than  construction  or  equipment  provided  by Buyer),  or  improper or
careless use of steam or thermal  energy,  on  Cogentrix's  side of the point of
interconnection  between  the  Cogeneration  Facility  and  Buyer's  Plant or on
account of any breach by Cogentrix of Paragraph 14 below.

<PAGE>

         14. Covenants. Cogentrix covenants and agrees that it shall:

                  (a) obtain  and keep in full  force and  effect all  necessary
         licenses  and  permits  required  for the conduct of its  business  and
         comply with all applicable laws, rules and regulations;

                  (b) Maintain  environmental  pollution at a level which,  when
         combined with emissions and  discharges  from Buyer's Plant existing as
         of the Initial  Delivery  Date,  will not exceed the maximum air, water
         and other pollution levels then permitted by applicable law; and

                  (c) Maintain  full  responsibility  for all  applicable  laws,
         rules and  regulations  relating to the storage of coal in the vicinity
         of   the   Cogeneration   Facility   including,   without   limitation,
         responsibility for any run-off of coal or coal by-products.

         15.  Taxes.  In the event  that any  severance  of  similar  tax or any
federal,  state or local tax or fee of any kind  measured by the amount of steam
or thermal  energy sold to Buyer or by the gross  receipts or revenues from such
sales of Cogentrix  (other than taxes levied on or measured by the net income of
Cogentrix) shall be levied upon the sale and delivery of steam or thermal energy
to Buyer  pursuant  to this  Agreement,  the  amount of such tax or fee shall be
added to the next billing  statement  rendered to Buyer and Buyer shall pay such
amount in full.

         16.  Governmental  Restrictions.  This  Agreement  is  subject  to  the
jurisdiction of those governmental  agencies having control over either party to
this  Agreement or over this  Agreement.  This  Agreement  shall at all times be
subject to changes  by such  governmental  agencies,  and the  parties  shall be
subject to conditions and obligations,  as such governmental  agencies may, from
time to time, direct in the exercise of their  jurisdiction,  provided no change
may be  made in  rates  or in  other  essential  terms  and  conditions  of this
Agreement except by agreement of the parties hereto. Both parties agree to exert
their best efforts to comply with all of the applicable rules and regulations of
all governmental agencies having control over either party or this Agreement.

<PAGE>

         17.  Counterparts;  Amendments.  This  Agreement may be executed by the
parties  hereto  in  separate  counterparts,  each of which  when  executed  and
delivered shall be an original but all such  counterparts  shall  constitute but
one and the same  instrument.  This  Agreement may not be  terminated,  amended,
supplemented,  waived or modified  except by an instrument in writing  signed by
each of the parties hereto.

         18.  Severabilitv.  Any provision of this Agreement which is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable  such provision in any other  jurisdiction.  If any applicable law
shall  render any  provision of this  Agreement  invalid or  unenforceable,  the
provisions  of such  applicable  law are hereby  waived by Buyer to the  fullest
extent  permitted by applicable  law, to the end that this Agreement  shall be a
legal, valid and binding Agreement enforceable in accordance with its terms.

         19.  Governina  Law.  This  Agreement is executed and  delivered in the
State of North  Carolina and shall in all respects be governed and  construed in
accordance with the laws of the State of*North  Carolina,  including all matters
of construction, validity and performance.

         20. Further Assurances. Each party hereby agrees to execute and deliver
all such  instruments  and  documents  and to take all such actions as the other
party may from time to tine reasonably  request in order to effectuate fully the
purposes of this Agreement.

         21. Notices. All notices and other communications hereunder shall be in
writing  and  shall  become  effective,  is sent by  first  class  certified  or
registered  mail with postage prepaid and return receipt  requested,  three days
after deposit in the mails,  or, if otherwise sent or delivered,  when received,
and shall be directed (a) if to Buyer, at Guilford Mills,  Inc., Post Office Box
U-4,  Greensboro,  North Carolina  27402,  (b) a to Cogentrix,  c/o Cogentrix of
North Carolina,  Inc., Two Parkway Plaza, Suite 290,  Charlotte,  North Carolina
28210 or icy to such other  address as any such person may  designate  by notice
given to the other parties hereto.

         IN WITNESS  WHEREOF,  this Agreement is executed by the duly authorized
officers  of the  parties,  pursuant  to the  authority  invested in them by the
lawful  action of their  Boards of  Directors,  on the date and year first above
written.

                                                   GUILFORD MILLS, INC.

                                                   By: /s/
                                                      --------------------------

                                                   Title:
                                                         -----------------------
Attest:

By: /s/
   --------------------------

Title:
      -----------------------
       [CORPORATE SEAL]

                                                   COGENTRIX LEASING CORPORATICN

                                                   By: /s/ George T. Lewis, Jr.
                                                      --------------------------
                                                      George T. Lewis, Jr.,
                                                      President
ATTEST:

By: /s/
   --------------------------

Title:
      -----------------------
   (CORPORATE SEAL)

<PAGE>

                                    EXHIBIT B
                                    ---------

         Cogentrix  agrees to  provide  and  maintain  a  suitable  steam  flow,
pressure recording and totalizing meter at the point of interconnection referred
to in Paragraph 7 so as to record the steam  delivered to Buyer's  Plant.  Buyer
shall  have  the  right  to  approve  the  meter   installed  at  the  point  of
interconnection  Buyer  shall have the  right,  subject  to its  discretion,  to
provide and maintain its own steam flow, pressure recording and totalizing meter
as close as practicable to the point of interconnection so as to provide its own
independent record of steam used by the Buyer. The interconnection point will be
within five (S) feet of the exterior wall of the Buyer's  present boiler room in
the vicinity of the present steam header.

         Either  party  shall be entitled to  inspect.and  approve any  metering
device installed by the other party for measuring the flow and pressure of steam
as described above.

         Either  party  shall be entitled  to have a  representative  present to
observe the meter or meters each month at the time  consumption  is recorded for
billing and may, in addition, inspect the meter charts at other times with prior
notice to the owner of the meter.

         If either party disputes a meter's  accuracy or condition,  it shell so
advise the owner of the meter in writing.  The owner of the meter shall,  within
thirty (30) days after  receiving  such notice,  advise the  disputing  party in
writing as to its  position  concerning  the  meter's  accuracy  and reasons for
taking such  position.  If the parties are unable to resolve their  disagreement
through  reasonable  negotiations,  then either party may engage an unaffiliated
and qualified  third party to test the meter.  Should the meter be found in good
order, the disputing party shall bear the cost of inspection; otherwise the cost
shall be borne by the  owner.  Any  repair or  replacement  shall be made at the
owner's expense as soon as practicable, based on the third party's report.

         In the event a meter  error is  discovered,  the  following  conditions
shall apply:

         1. If the error in  measurement  does not exceed 2$, no  adjustment  in
previous billing shall be made.

         2. If the meter error exceeds 2%, an  adjustment  in previous  billings
will be made equivalent to one-half (1/2) of the percentage  difference in meter
correction for the second half of the period-since the previous meter check, but
in no case for a period  greater  than three  months prior to the date the error
was discovered.FIRST AMENDMENT TO STEAM PURCHASE CONTRACT
                   ------------------------------------------

         FIRST  AMENDMENT TO STEAM PURCHASE  CONTRACT dated as of August 1, 1991
(the "First  Amendment"),  to the Steam Purchase  Contract (the "Steam  Purchase
Contract") dated as of November 30, 1984, by and between GUILFORD MILLS, Inc., a
Delaware corporation ("Buyer"),  and COGENTRIX OF NORTH CAROLINA,  INC., a North
Carolina  corporation and the successor by merger to Cogentrix  Carolina Leasing
Corporation  ("Cogentrix").  Terms used herein which are not defined are used as
defined in the Steam Purchase Contract.

                               W I T N E S E T H:
                               - - - - - - - - -

         WHEREAS,  the Buyer and  Cogentrix  have  agreed to revise the  pricing
formula for steam purchased by the Buyer from Cogentrix at the Buyer's Plant.

         NOW,  THEREFORE,  in consideration of the mutual  agreements  contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Buyer and Cogentrix hereby agree as follows:

         1.  Amendments  to Steam  Purchase  Contract.  (a) The  Steam  Purchase
Contract is hereby amended by adding an additional  clause (iii) in Section 5(a)
thereof which clause reads as follows:

         (iii)  Cogentrix  and the Buyer agree to work together in good faith to
         explore means by which the Buyer's ,steam cost can be minimized without
         jeopardizing  the  revenues  of  the  Cogeneration  Facility.  Each  of
         Cogentrix and the Buyer further agrees to use best efforts to develop a
         plan no later than August 1, 1992 to achieve this goal.

         (b) The Steam Purchase  Contract is hereby amended by deleting  section
5(b) in its entirety and substituting the following therefor:

         (b) For the period beginning August 1, 1991 and continuing through July
         31, 1992,  the price for low pressure steam shall be $5.20 per thousand
         pounds.  For the period beginning August 1, 1992 and continuing through
         July 31,  1993,  the price for low  pressure  steam  shall be $5.40 per
         thousand pounds. For the period beginning August 1, 1991 and continuing
         through July 31, 1992, the price for high pressure steam shall be $4.24
         per  MMBTU.  For the  period  beginning  August 1, 1992 and  continuing
         through July 31, 1993, the price for high pressure steam shall be $4.41
         per MMBTU.  Commencing on August 1, 1993,  and on the first day of each
         Term Year  thereafter,  new purchase rates for steam and BTU's shall be
         computed  based on the  percentage  increase,  if any, in the Delivered
         Cost of Coal (as  hereinafter  defined)  from  August 1, 1985.  The new
         purchase rates for steam and BTU's shall be computed by multiplying, in
         the case of Paragraph 5 (a) (i) above, $5.10 per thousand pounds,  and,
         in the case of Paragraph 5 (a) (ii) above,  the rate set forth therein,
         whichever  is  applicable  (the  "Base  Rate")  times a  fraction,  the
         numerator of which shall be the Delivered Cost of Coal in effect on the

<PAGE>

         first day of the Term Year for which such calculation is being made and
         the  denominator of which shall be the Delivered Cost of Coal on August
         1, 1985. As used herein,  the  "Delivered  Cost of Coal" shall refer to
         the total price per ton paid by  Cogentrix to purchase  coal  including
         the  transportation  cost  per ton  for  delivery  to the  Cogeneration
         Facility. In no event shall such purchase prices be less than either of
         the Base Rates.

         2. Full Force and Effect. Except as modified hereby, the Steam Purchase
Contract has not been amended  or-modified and is and shall remain in full force
and affect.

         3. Definitions. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Steam Purchase Contract.

         4. Counterparts.  This First Amendment may be executed in any number of
counterparts,  each of which when so executed and  delivered  shall be deemed an
original,  and it shall not be necessary in making proof of this First Amendment
to produce or account for more than one such counterpart.

         5. Governing law. This First Amendment and the Steam Purchase Contract,
as  'amended  hereby,  shall be deemed to be  contracts  made  under and for all
purposes  shall be construed in accordance  with, the laws of the State of North
Carolina.

<PAGE>

IN WITNESS WHEREOF, the undersigned have each caused this First Amendment to be
duly executed by the duly authorized officers and their corporate seal to be
here unto affixed and attached, all as of the year and day first above written.

                                               GUILFORD MILLS, INC.

                                               By: /s/
                                                  ------------------------------

                                               Title /s/
                                                    ----------------------------
ATTEST:

By: /s/
   ------------------------------

Title /s/
     ----------------------------
         [Corporate Seal]                      COGENTRIX OF NORTH CAROLINA, INC.

                                               By: /s/
                                                  ------------------------------

                                               Title /s/
                                                    ----------------------------

ATTEST:

By: /s/
   ------------------------------

Title /s/
     ----------------------------
         [Corporate Seal]

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