Document:

EXHIBIT 10.4

 

Exhibit
10.4

ADOPTION AGREEMENT

1.01
PREAMBLE

	 	 	 	 	 	 	 
	 

	 	By the execution of this Adoption Agreement the Plan Sponsor hereby (complete a. or b.)

	 
	 

	 	a.
	 	þ
	 	
adopts a new plan as of September 1, 2005 [month, day, year]
	 
	 	 	 	 	 	 
	 

	 	b.
	 	o
	 	amends and restates its existing plan as of                                          [month,
day, year] which is the Amendment Restatement Date.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Original Effective Date:                                          [month, day, year]
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Pre-409A Grandfathering: r Yes r No (If yes, complete Appendix B,
“Summary of Grandfathered Provisions”)

1.02 PLAN

	 	 	 	 	 	 	 	 	 
	 	 	Plan Name: Computer Associates International, Inc. Executive Deferred Compensation Plan
	 
	 	 	 	 	 	 	 	 
	 	 	Plan Year: April 1
— March 31

1.03 PLAN SPONSOR

	 	 	 	 	 	 	 
	 	 	Name:	 	Computer Associates International, Inc.
	 
	 	 	 	 	 	 
	 	 	Address:	 	One Computer Associates Plaza, Islandia, NY 11749
	 
	 	 	 	 	 	 
	 	 	Phone # :	 	631-342-6000
	 
	 	 	 	 	 	 
	 	 	EIN:	 	13 2847434
	 
	 	 	 	 	 	 
	 	 	Fiscal Yr:	 	March 31 — April 1
	 
	 	 	 	 	 	 
	 	 	Form of Entity:	 	Corporation

	 	 	If Plan Sponsor is a Corporation is stock publicly traded?

	 	 	þ Yes r No

1.04 EMPLOYER

	 	 	The following entities have been authorized by the Plan Sponsor to participate in and have
adopted the Plan:

	 	 	 	 	 	 	 
	 	 	Entity	 	Publicly Traded Corporation
	 	 	 	 	Yes	 	No
	 

	 	CA Think
	 	r
	 	þ
	 
	 	 	 	 	 	 
	 

	 	Computer Associates Inc.
	 	r
	 	þ
	 
	 	 	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 

	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 

	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 

	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 

	 	 	 	 

- 1 -

 

1.05 ADMINISTRATOR

	 	 	The Employer has designated the following to be responsible for the Administration of the
Plan:
	 
	 	 	VP, Compensation, Benefits & HRIS (Lisa Chekimoglou)
	 
	 	 	                                                                                                                                                                                                                                                

	 	Note: The Administrator is the person or persons designated by the Employer to be
responsible for the administration of the Plan. This is not Fidelity Investments
Institutional Operations Company, Inc. nor any other Fidelity affiliate.

- 2 -

 

2.01
PARTICIPATION

	 	 	 	 	 	 	 	 	 
	 	 	a.	 	þ	 	Employees
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	i.
	 	þ
	 	Eligible Employees are selected by
the Employer as identified in
Appendix C which may be periodically
updated by the Employer.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ii.
	 	o
	 	Eligible Employees are those
employees of the Employer who satisfy the following criteria:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 
	 	 	b.	 	r	 	Directors
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	i.
	 	o
	 	All Directors are eligible to participate.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	ii.
	 	o
	 	Only Directors selected by the Employer and identified in Appendix C are eligible to
participate.

- 3 -

 

3.01 COMPENSATION

	 	 	 	 	 	 	 
	 	 	For purposes of determining Participant contributions under Article 4 and Employer
contributions under Article 5, Compensation shall be defined in the following manner
[complete a. or b. and c., if applicable]:
	 
	 	 	 	 	 	 
	 

	 	a.
	 	þ	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Compensation, for purposes of the April 1, 2005-March 31,
2006 deferral period, shall mean only an employee’s
Annual Performance Bonus (paid in cash) for fiscal 2006,
under the Plan Sponsor’s 2002 Incentive Plan, as amended.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	b.
	 	r
	 	Compensation as defined in                                                                                                                         
[insert name of
qualified plan] without regard to the limitation captured
in Section 401(a)(17) of the Code for such Plan Year:
	 
	 	 	 	 	 	 
	 

	 	c.
	 	r
	 	Director Compensation shall have the meaning specified in
Section 2.9 except that:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	d.
	 	r
	 	Compensation shall, for all Plan purposes, be limited to
$                                        .
	 
	 	 	 	 	 	 
	3.02 BONUSES
	 
	 	 	 	 	 	 
	 	 	Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following
type of bonuses:

	 	 	 	 	 	 	 
	 	 	 	 	Will be treated as Performance
	 	 	Type	 	Based Compensation
	 	 	 	 	Yes	 	No
	 

	 	Annual Performance Bonus for
fiscal 2006 under the Plan
Sponsor’s 2002 Incentive Plan,
as amended
 

	 	þ
	 	r
	 
	 	 	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 
	 	 	 	 

- 4 -

 

	 	 	 	 	 	 	 
	 	 	 	 	Will be treated as Performance
	 	 	Type	 	Based Compensation
	 	 	 	 	Yes	 	No
	 

	 	 	 	r
	 	r
	 

	 	 
	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 
	 	 	 	 
	 

	 	 	 	r
	 	r
	 

	 	 
	 	 	 	 

- 5 -

 

4.01 PARTICIPANT CONTRIBUTIONS

	 	a.	 	Amount of Deferrals
	 
	 	 	 	A Participant may elect within the period specified in Section 4.01b of the Adoption
Agreement to defer the following amounts of Compensation (select i. and ii. or iii.):

	 	i.	 	Compensation Other than Bonuses (for each type of remuneration listed,
complete “dollar amount” or “percentage amount,” but not both))

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	 	% Amount	 	 	 	 
	Type of Remuneration	 	Min	 	 	Max	 	 	Min	 	 	Max	 	 	Increment	 
	a.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	b.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	c.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	Note: The increment is required to determine the permissible deferral amounts. For
example, a minimum of 0% and maximum of 20% with a 5% increment would allow an
individual to defer 0%, 5%, 10%, 15% or 20%.

	 	ii.	 	Bonuses (choose one)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	% Amount	 	 
	Type of Bonus	 	Min	 	Min	 	Min	 	Max	 	Increment
	a. Annual
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance Bonus
	 	 	 	 	 	 	 	 	 	 	1	%	 	 	90	%	 	 	 	 
	b.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	c.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

iii. Compensation (do not complete if you completed i. and ii.)

	 	 	 	 	 	 	 	 
	Dollar Amount	 	% Amount	 	 
	Min	 	Max	 	Min	Max	 	Increment
	 
	 	 	 	 	 	 	 

	iv.	 	Director Compensation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Dollar Amount	 	 	% Amount	 	 	 	 
	Type of Remuneration	 	Min	 	 	Max	 	 	Min	 	 	Max	 	 	Increment	 
	Annual Retainer
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Meeting Fees
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

- 6 -

 

b. Election Period

	 	i.	 	Performance Based Compensation
	 
	 	 	 	A special election period

	 	 	 	a.     þ     Does          b.     r     Does Not

	 	 	 	apply to each eligible type of performance based compensation referenced in Section
3.02 of the Adoption Agreement.
	 
	 	 	 	The special election period, if applicable, will be determined by the Employer.

	 	ii.	 	Newly Eligible Participants
	 
	 	 	 	An employee who is classified or designated as an Eligible Employee during a Plan
Year

	 	 	 	a.     þ     May          b.     r     May Not

	 	 	 	elect to defer Compensation otherwise payable during the remainder of the Plan
Year by completing a deferral agreement within the 30 day period beginning on the
date he is eligible to participate in the Plan.

- 7 -

 

5.01 EMPLOYER CONTRIBUTIONS

	 	 	 	 	 	 	 	 	 
	 	 	a.	 	Matching Contributions
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	i.	 	Amount
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For each Plan Year, the Employer shall make a Matching Contribution on behalf of
each Participant who defers Compensation for the Plan Year and satisfies the
requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to (Complete
one):
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	r                                          [insert percentage] of the Compensation
the Participant has elected to defer for the Plan Year
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	r An amount determined by the Employer in its sole discretion
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	r Matching Contributions for each Participant shall be
limited to $                     and/or                     % of Compensation.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(D)
	 	r Other:	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ii.	 	 Eligibility for Matching Contribution
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	A Participant who defers Compensation for the Plan Year shall receive an allocation
of Matching Contributions determined in accordance with Section 5.01(a)(i) provided
he satisfies the following requirements (complete the ones that are applicable):
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	 r
	 	Is employed on the last day of the Plan Year
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	 r
	 	Completes                      [insert number] of hours of service during the Plan Year
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	 r
	 	Is selected by the Employer in its sole discretion to receive
an allocation of Matching Contributions
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(D)
	 	 r
	 	No requirements
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(E)
	 	 r
	 	Other
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

- 8 -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	iii.	 	 Time of Allocation
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Matching Contributions, if made, shall be treated as allocated [select one]:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	 r
	 	As of the last day of the Plan Year
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	 r
	 	At such times as the Employer shall determine in it sole discretion
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	 r
	 	At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(D)
	 	 r
	 	Other:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	b.	 	Other Contributions
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	i.	 	Amount
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Employer shall make a contribution on behalf of each Participant who satisfies
the requirements of Section 5.01(b)(ii) equal to [check one]:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	 r
	 	An amount equal to ___[insert number] % of the Participant’s Compensation
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	 r
	 	An amount determined by the Employer in its sole discretion
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	 r
	 	Contributions for each Participant shall be limited to $___
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(D)
	 	 r
	 	Other:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

- 9 -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ii.	 	Eligibility for Other Contributions
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	A Participant shall receive an allocation of other Employer contributions for the
Plan Year if he satisfies the following requirements:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	 r
	 	Describe requirements:                                                                                
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	r
	 	Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	r
	 	No requirements
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	iii.	 	Time of Allocation
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Employer contributions, if made, will be allocated:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(A)
	 	r
	 	As of the last day of the Plan Year
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(B)
	 	r
	 	At such time or times as the Employer shall determine in its sole discretion
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(C)
	 	r
	 	Other:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	 

- 10 -

 

	6.01	 	DISTRIBUTIONS
	 
	 	 	The timing and form of payment of distributions made from the Participant’s vested Account
shall be made in accordance with the elections made in this Section 6.01 of the Adoption
Agreement.

	 	a.	 	Timing of Distributions
	 
	 	 	 	All distributions shall commence in accordance with the following (choose one):

	 	 	 	 	 	 	 
	 

	 	(i)
	 	þ
	 	As soon as administratively practicable
	 
	 	 	 	 	 	 
	 

	 	(ii)
	 	o
	 	Monthly on specified day                                          (insert day)
	 
	 	 	 	 	 	 
	 

	 	(iii)
	 	o
	 	Annually on specified month and day                                          (insert
month and day)
	 
	 	 	 	 	 	 
	 

	 	(iv)
	 	o
	 	Calendar quarter on specified day                                          (insert day)

	 	 	 	Note: A six month delay for certain distributions to Key Employees of publicly
traded companies will apply.

	 	b.	 	In addition to the distributions that will occur under the terms of the Plan
(e.g., upon death or disability or six months from a separation from service),
distributions can occur upon the following Distribution Events (If multiple events are
chosen, the earliest to occur will trigger payment.)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Lump Sum	 	Installments
	 

	 	(i)
	 	þ
	 	Specified Date [5 years, 10 years or
15 years from end of deferral
period]
	 	X
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(ii)
	 	o
	 	Specified Age
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(iii)
	 	o
	 	Separation from Service
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(iv)
	 	o
	 	Separation from Service plus 6 months
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(v)
	 	o
	 	Separation from Service plus
___months (not to exceed ___months)
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(vi)
	 	o
	 	Retirement
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(vii)
	 	o
	 	Retirement plus 6 months
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(viii)
	 	o
	 	Retirement plus ___months (not to
exceed ___months)
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(ix)
	 	o
	 	Later of Separation from Service or
Specified Age
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(x)
	 	o
	 	Later of Separation from Service or
Specified Date
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(xi)
	 	o
	 	Later of Retirement or Specified Age
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(xii)
	 	o
	 	Later of Retirement or Specified Date
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(xiii)
	 	o
	 	Disability
	 	                    
	 	___years to ___years

- 11 -

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Lump Sum	 	Installments
	 

	 	(xiv)
	 	o
	 	Death
	 	                    
	 	___years to ___years
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	(xv)
	 	o
	 	Change in Control
	 	                    
	 	___years to ___years

	 	c.	 	Specified Date and Specified Age elections may not commence beyond age ___.
	 
	 	d.	 	Separation from Service (if this is elected, do not select “Separation from
Service” under b. above)
	 
	 	 	 	A Separation from Service override

	 	 	þ	 Shall apply.

	 	 	 	A Separation from Service override provides that a Participant, whose Separation from
Service occurs before Retirement, shall receive the vested amount credited to his
Account as a lump sum payment.
	 
	 	e.	 	Involuntary Cashouts (Leave blank if not applicable)

	 	(i)	o	 If the Participant’s vested Account at the time of his
Separation from Service does not exceed $___
(insert dollar amount) distribution of the vested Account shall
automatically be made in the form of a single lump sum as soon
as administratively practicable but in no event later than 60
days after the Separation of Service.

	 	f.	 	Retirement

	 	 	 	 

	 	 	 	Retirement shall be defined as a Separation from Service that occurs on or after the
Participant                                                                                                                                                                
                                                                                                                         (insert description of requirements)

	 	g.	 	Redeferrals
	 
	 	 	 	A Participant

	 	(i)	þ	Shall
	 
	 	(ii)	o	Shall Not

	 	 	 	be permitted to modify a scheduled distribution date in accordance with Section 9.2 of
the Plan.
	 
	 	 	 	A Participant shall generally be permitted to elect such modification
one(1) number of times.
	 
	 	 	 	Administratively, allowable distribution events will be modified to reflect all
options necessary to fulfill the redeferrals provision.

- 12 -

 

	7.01	 	VESTING

	 	a.	 	Matching Contributions
	 
	 	 	 	The Participant’s vested interest in the amount credited to his Account attributable to
Matching Contributions shall be based on the following schedule:

	 	 	 	 	 
	Years of Service	 	Vesting %	 	 
	0

	 	                    	 	 
	1

	 	                    	 	 
	2

	 	                    	 	 
	3

	 	                    	 	 
	4

	 	                    	 	 
	5

	 	                    	 	 
	6

	 	                    	 	 
	7

	 	                    	 	 
	8

	 	                    	 	 
	9

	 	                    	 	 

	 	b.	 	Other Employer Contributions
	 
	 	 	 	The Participant’s vested interest in the amount credited to his Account attributable to
Employer contributions other than Matching Contributions shall be based on the following
schedule:

	 	 	 	 	 
	Years of Service	 	Vesting %	 	 
	0

	 	                    	 	 
	1

	 	                    	 	 
	2

	 	                    	 	 
	3

	 	                    	 	 
	4

	 	                    	 	 
	5

	 	                    	 	 
	6

	 	                    	 	 
	7

	 	                    	 	 
	8

	 	                    	 	 
	9

	 	                    	 	 

	 	c.	 	Acceleration of Vesting
	 
	 	 	 	A Participant’s vested interest in his Account will automatically be 100% upon the
occurrence of the following events: (select the ones that are applicable)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	(i)	 	o	 	Death	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(ii)	 	o	 	Disability	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(iii)	 	o	 	Change in Control	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(iv)	 	o	 	Eligibility for Retirement	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	(v)	 	o	 	Other:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

- 13 -

 

	 	d.	 	Years of Service

	 	i.	 	A Participant’s Years of Service shall include all service performed
for the Employer and

	 	 	 	 	 	 	 
	 

	 	(A)
	 	o
	 	Shall
	 
	 	 	 	 	 	 
	 

	 	(B)
	 	o
	 	Shall Not

	 	 	 	 	 
	 

	 	 	 	include service performed for the Related Employer.
	 
	 	 	 	 
	 

	 	ii.
	 	Years of Service shall also include service performed for the following
entities:
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	iii.	 	Years of Service shall be determined in accordance with: (select one)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(A)	 	o	 	The elapsed time method in Treas. Reg. Sec. 1.410(a)(7)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(B)	 	o	 	The general method in DOL Reg. Sec. 2530.200b-1 through b-4
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(C)	 	o	 	The Participant’s Years of Service credited under
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	(insert name of plan)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	(D)
	 	o
	 	Other:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

- 14 -

 

	8.01	 	UNFORESEEABLE EMERGENCY
	 
	 	 	A withdrawal due to an Unforeseeable Emergency as defined in Section 2.2:

	 	 	 	 	 	 	 
	 

	 	a.
	 	þ
	 	Will
	 

	 	b.
	 	o
	 	Will Not

	 	 	be allowed.

- 15 -

 

	9.01	 	INVESTMENT DECISIONS
	 
	 	 	Investment decisions regarding the hypothetical amounts credited to a Participant’s Account
shall be made by: (select one)

	 	 	 	 	 	 	 
	 

	 	a.
	 	þ
	 	The Participant (or his Beneficiary)
	 
	 	 	 	 	 	 
	 

	 	b.
	 	o
	 	The Employer

	 	 	Investment options are set forth in Appendix A.

- 16 -

 

	10.01	 	GRANTOR TRUST
	 
	 	 	The Employer: (select one)

	 	 	 	 	 	 	 
	 

	 	a.
	 	o
	 	Does
	 

	 	b.
	 	þ
	 	Does Not

	 	 	intend to establish a grantor trust in connection with the Plan, however it reserves the
right to do so in its discretion.

- 17 -

 

	11.01	 	TERMINATION UPON CHANGE IN CONTROL
	 
	 	 	The Plan Sponsor

	 	 	 	 	 	 	 
	 

	 	a.
	 	þ
	 	Reserves
	 

	 	b.
	 	o
	 	Does Not Reserve

	 	 	the right to terminate the Plan and distribute all vested amounts credited to Participant
Accounts upon a Change in Control as described in Section 9.7.
	 
	11.02	 	CHANGE IN CONTROL
	 
	 	 	A Change in Control for Plan purposes includes the following:

	 	 	 	 	 
	 

	 	þ
	 	A change in the ownership of the Employer
	 

	 	þ
	 	A change in the effective control of the Employer
	 

	 	þ
	 	A change in the ownership of a substantial portion of the assets of the Employer

- 18 -

 

	12.01	 	GOVERNING STATE LAW
	 
	 	 	The laws of New York (insert name of state) shall apply in the administration of the
Plan to the extent not preempted by ERISA.

- 19 -

 

EXECUTION PAGE

The Plan Sponsor has caused this Adoption Agreement to be executed this ___day
of ___, 20___.

	 	 	 	 	 
	 

	 	PLAN SPONSOR:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

- 20 -

 

APPENDIX A

INVESTMENT OPTIONS

	 	 	 	 	 	 	 
	Fund Name	 	Fund Number	 	 	 	 
	Ø Fidelity Puritan	 	Ø Dodge & Cox Stock Fund
	 	 	 	 	 
	 	 
	Ø Fidelity Magellan Fund	 	Ø American Funds Growth Fund of America
	 	 	 	 	 
	 	 
	Ø Fidelity Growth and Income Fund	 	Ø Hotchkis & Wiley Mid Cap Value-Class I
	 	 	 	 	 
	 	 
	Ø Fidelity Intermediate Bond Fund	 	Ø Artisan Mid Cap Fund
	 	 	 	 	 
	 	 
	Ø Fidelity Diversified International Fund	 	Ø American Beacon Small Cap Value- PA
	 	 	 	 	 
	 	 
	Ø Fidelity Retirement Money Market Portfolio	 	Ø Fidelity Small Cap Stock
	 	 	 	 	 
	 	 
	Ø Spartan US Equity Index Portfolio	 	Ø 
	 	 	 	 	 
	 	 
	 	 	Ø 
	 	 	 	 	 
	 	 
	Ø 	 	Ø 
	 	 	 	 	 
	 	 
	Ø 	 	Ø 
	 	 	 	 	 
	 	 
	Ø 	 	Ø 

	 	 	 	Note: The Plan may not select a common/collective trust fund or a self-directed brokerage option
as an investment option.

- 21 -

 

APPENDIX B

SUMMARY OF GRANDFATHERED PROVISIONS

- 22 -

 

APPENDIX C

ELIGIBLE PARTICIPANTS – For Fiscal 2006 Annual Performance Bonus

	 	 	 
	 	 	Name
	Russ Artzt
	 	 
	 
	 	 
	Mark Barrenechea
	 	 
	 
	 	 
	Joan Blackwood
	 	 
	 
	 	 
	Chris Broderick
	 	 
	 
	 	 
	Mike Christenson
	 	 
	 
	 	 
	Jeff Clarke
	 	 
	 
	 	 
	Mark Combs
	 	 
	 
	 	 
	Greg Corgan
	 	 
	 
	 	 
	Bob Davis
	 	 
	 
	 	 
	George Fischer
	 	 
	 
	 	 
	Donald Friedman
	 	 
	 
	 	 
	Patrick Gnazzo
	 	 
	 
	 	 
	Andrew Goodman
	 	 
	 
	 	 
	Sam Greenblatt
	 	 
	 
	 	 
	Yogesh Gupta
	 	 
	 
	 	 
	Kenneth Handal
	 	 
	 
	 	 
	Guy Harrison
	 	 
	 
	 	 
	Dan Kaferle
	 	 
	 
	 	 
	Kevin Kern
	 	 
	 
	 	 
	Jacob Lamm
	 	 
	 
	 	 
	Jeffrey Livingston
	 	 
	 
	 	 
	Marc Loupe
	 	 
	 
	 	 
	Alan Nugent
	 	 
	 
	 	 
	Una O’Neill
	 	 
	 
	 	 
	Claude Pumilia
	 	 
	 
	 	 
	Gary Quinn
	 	 
	 
	 	 
	Vince Re
	 	 
	 
	 	 
	Doug Robinson
	 	 
	 
	 	 
	Mary Stravinskas
	 	 
	 
	 	 
	John Swainson
	 	 
	 
	 	 
	Toby Weiss
	 	 

- 23 -

 

APPENDIX D

SPECIAL EFFECTIVE DATES

- 24 -

 

COMPUTER ASSOCIATES INTERNATIONAL, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

June 2005

 

TABLE OF CONTENTS

PREAMBLE

	 	 	 
	ARTICLE 1 – GENERAL
	1.1

	 	Plan
	1.2

	 	Effective Dates
	1.3

	 	Grandfathering of Amounts Not Subject to Code Section 409A
	 
	 	 
	ARTICLE 2 – DEFINITIONS
	2.1

	 	Account
	2.2

	 	Administrator
	2.3

	 	Adoption Agreement
	2.4

	 	Beneficiary
	2.5

	 	Board or Board of Directors
	2.6

	 	Bonus
	2.7

	 	Change in Control
	2.8

	 	Code
	2.9

	 	Compensation
	2.10

	 	Disabled
	2.11

	 	Eligible Employee
	2.12

	 	Employer
	2.13

	 	ERISA
	2.14

	 	Key Employee
	2.15

	 	Participant
	2.16

	 	Plan
	2.17

	 	Plan Sponsor
	2.18

	 	Plan Year
	2.19

	 	Related Employer
	2.20

	 	Retirement
	2.21

	 	Separation from Service
	2.22

	 	Unforeseeable Emergency
	2.23

	 	Valuation Date
	2.24

	 	Years of Service
	 
	 	 
	ARTICLE 3 – PARTICIPATION
	3.1

	 	Participation
	3.2

	 	Termination of Participation

i

 

	 	 	 
	ARTICLE 4 – PARTICIPANT CONTRIBUTIONS
	4.1

	 	Deferral Agreement
	4.2

	 	Amount of Deferral
	4.3

	 	Timing of Election to Defer
	4.4

	 	Election of Payment Schedule and Form of Payment
	 
	 	 
	ARTICLE 5 – EMPLOYER CONTRIBUTIONS
	5.1

	 	Matching Contributions
	5.2

	 	Other Contributions
	 
	 	 
	ARTICLE 6 – ACCOUNTS AND CREDITS
	6.1

	 	Establishment of Account
	6.2

	 	Credits to Account
	 
	 	 
	ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS
	7.1

	 	Investment Options
	7.2

	 	Adjustment of Accounts
	 
	 	 
	ARTICLE 8 – RIGHT TO BENEFITS
	8.1

	 	Vesting
	8.2

	 	Death
	8.3

	 	Disability
	 
	 	 
	ARTICLE 9 – DISTRIBUTION OF BENEFITS
	9.1

	 	Amount of Benefits
	9.2

	 	Method and Timing of Distributions
	9.3

	 	Unforeseeable Emergency
	9.4

	 	Termination Before Retirement
	9.5

	 	Cashouts of Amounts Not Exceeding Stated Limit
	9.6

	 	Key Employees
	9.7

	 	Change in Control

ii

 

	 	 	 
	ARTICLE 10 – AMENDMENT AND TERMINATION
	10.1

	 	Amendment by Employer
	10.2

	 	Retroactive Amendments
	10.3

	 	Plan Termination
	10.4

	 	Distribution Upon Termination of the Plan
	 
	 	 
	ARTICLE 11 – THE TRUST
	11.1

	 	Establishment of Trust
	11.2

	 	Grantor Trust
	11.3

	 	Investment of Trust Funds
	 
	 	 
	ARTICLE 12 – PLAN ADMINISTRATION
	12.1

	 	Powers and Responsibilities of the Administrator
	12.2

	 	Claims and Review Procedures
	12.3

	 	Plan Administrative Costs
	 
	 	 
	ARTICLE 13 – MISCELLANEOUS
	13.1

	 	Unsecured General Creditor of the Employer
	13.2

	 	Employer’s Liability
	13.3

	 	Limitation of Rights
	13.4

	 	Acceleration of Benefits
	13.5

	 	Facility of Payment
	13.6

	 	Notices
	13.7

	 	Tax Withholding
	13.8

	 	Indemnification
	13.9

	 	Governing Law

iii

 

PREAMBLE

The Computer Associates International, Inc. Executive Deferred Compensation Plan is intended to
promote the interests of the Plan Sponsor and its shareholders by encouraging certain Eligible
Employees to remain in the employ of the Plan Sponsor and its subsidiaries by providing them with a
means by which they may request to defer receipt of a portion of their compensation.

 

 

ARTICLE 1 – GENERAL

	1.1	 	Plan. The Plan will be referred to by the name specified in the Adoption Agreement.

	1.2	 	Effective Dates.

	 	(a)	 	Original Effective Date. The Original Effective Date is the date as
of which the Plan was initially adopted.
	 
	 	(b)	 	Amendment Effective Date. The Amendment Effective Date is the date
specified in the Adoption Agreement as of which the Plan is amended and restated.
	 
	 	(c)	 	Special Effective Date. A Special Effective Date may apply to any
given provision if so specified in Appendix D. A Special Effective Date will control
over the Original Effective Date or Amendment Effective Date, whichever is applicable,
with respect to such provision of the Plan.

	1.3	 	Grandfathering of Amounts Not Subject to Code Section 409A

If the Plan Sponsor has elected to treat amounts deferred before January 1, 2005 that are
earned and vested on December 31, 2004 as subject to the provisions of the Plan as in
effect on December 31, 2004, such grandfathered amounts will be separately accounted for
and administered in accordance with the terms of the Plan as in effect on such date, except
as otherwise provided in this Plan document. A summary of the grandfathered provisions is
set forth in Appendix B.

Article 1-1

 

ARTICLE 2 – DEFINITIONS

Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the
context clearly indicates otherwise. Wherever used herein, the following terms have the meanings
set forth below, unless a different meaning is clearly required by the context:

	2.1	 	“Account” means an account established for the purpose of recording amounts credited on
behalf of a Participant and any income, expenses, gains, losses or distributions included
thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a
device for the measurement and determination of the amounts to be paid to a Participant
pursuant to the Plan.
	 
	2.2	 	“Administrator” means the person or persons designated by the Employer in Section 1.05 of the
Adoption Agreement to be responsible for the administration of the Plan. If no Administrator
is designated in the Adoption Agreement, the Administrator is the Employer.
	 
	2.3	 	“Adoption Agreement” means the agreement adopted by the Plan Sponsor that establishes the
Plan.
	 
	2.4	 	“Beneficiary” means the persons, trusts, estates or other entitities entitled under Section
8.2 to receive benefits under the Plan upon the death of a Participant.
	 
	2.5	 	“Board” or “Board of Directors” means the Board of Directors of the Plan Sponsor.
	 
	2.6	 	“Bonus” means an amount of incentive remuneration payable by the Employer to a Participant.
	 
	2.7	 	“Change in Control” means the occurrence of an event involving the Employer that is described
in Section 9.7.
	 
	2.8	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	2.9	 	“Compensation” means the total cash and non-cash remuneration provided to a Participant by
the Employer for services rendered in respect of a Plan Year, whether or not includible in the
gross income of the Participant for Federal income tax purposes, including bonuses but
excluding reimbursements or other expense allowances, fringe benefits (cash and non-cash),
moving expenses, deferred compensation and welfare benefits.

Article 2-1

 

	2.10	 	“Disabled” means a determination by the Administrator that the Participant is either (1)
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (2) is, by reason of any medically
determinable physical or mental impairment which can be expected to last for a continuous
period of not less than twelve months, receiving income replacement benefits for a period of
not less than three months under an accident and health plan covering employees of the
Employer.
	 
	2.11	 	“Eligible Employee” means an employee of the Employer who is determined by the Administrator
to be a member of a select group of management or highly compensated employees within the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and who satisfies the
requirements in Section 2.01 of the Adoption Agreement.
	 
	2.12	 	“Employer” means the Plan Sponsor and any other entity which is authorized by the Plan
Sponsor to participate in and, in fact, does adopt the Plan.
	 
	2.13	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	2.14	 	“Key Employee” means a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of
the Code.
	 
	2.15	 	“Participant” means an Eligible Employee who commences participation in the Plan in
accordance with Article 3.
	 
	2.16	 	“Plan” means the unfunded plan of deferred compensation set forth herein, including the
Adoption Agreement and any trust agreement, as adopted by the Employer and as amended from
time to time.
	 
	2.17	 	“Plan Sponsor” means the entity specified in the Adoption Agreement.
	 
	2.18	 	“Plan Year” means the period specified in the Adoption Agreement.
	 
	2.19	 	“Related Employer” means the Employer and (a) any corporation that is a member of a
controlled group of corporations as defined in Section 414(b) of the Code that includes the
Employer, (b) any trade or business that is under common control as defined in Section 414(c)
of the Code that includes the Employer, (c) any member of an affiliated service group as
defined in Section 414(m) of the Code that includes the Employer, and (d) any entity required
to be aggregated with the Employer by Section 414(o) of the Code.

Article 2-2

 

	2.20	 	“Retirement” has the meaning specified in 6.01f of the Adoption Agreement.
	 
	2.21	 	“Separation from Service” is a “separation of service” within the meaning of Section 409A of
the Code.
	 
	2.22	 	“Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from
an illness or accident of the Participant, the Participant’s spouse, or the Participant’s
dependent (as defined in Code Section 152(a)); loss of the Participant’s property due to
casualty; or other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.
	 
	2.23	 	“Valuation Date” means each business day of the Plan Year and such other date(s) as
designated by the Plan Sponsor.
	 
	2.24	 	“Years of Service” means a one year period for which the Participant receives service credit
in accordance with the provisions of Section 7.01d of the Adoption Agreement.

Article 2-3

 

ARTICLE 3 – PARTICIPATION

	3.1	 	Participation. The Participants in the Plan shall be those “management” or “highly
compensated” employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA who satisfy the requirements of Section 2.01 of the Adoption Agreement.

	3.2	 	Termination of Participation. A Participant’s participation in the Plan shall cease upon the
distribution to him of his vested Account or upon his death prior to such distribution. In
addition, the Administrator may terminate a Participant’s eligibility to participate in the
Plan but any such termination at the direction of the Administrator shall not take effect
until the first day of the next Plan Year.

Article 3-1

 

ARTICLE 4 – PARTICIPANT CONTRIBUTIONS

	4.1	 	Deferral Agreement. Each Eligible Employee may elect to defer his Compensation within the
meaning of Section 3.01 of the Adoption Agreement by executing in writing or electronically, a
deferral agreement in accordance with rules and procedures established by the Administrator
and the provisions of this Article 4.
	 
	 	 	A new deferral agreement must be timely executed for each Plan Year for which the Eligible
Employee desires to defer Compensation. An Eligible Employee who does not timely execute a
deferral agreement shall be deemed to have elected zero deferrals of Compensation for such
Plan Year.
	 
	 	 	A deferral agreement may be changed or revoked during the period specified by the
Administrator. A deferral agreement becomes irrevocable at the close of the specified
period.
	 
	 	 	An Eligible Employee must have an executed deferral agreement in effect for each year
during which an Employer contribution pursuant to Article 5, if any, may be made on his
behalf.
	 
	4.2	 	Amount of Deferral. An Eligible Employee may elect to defer Compensation in any amount
permitted by Section 4.01a of the Adoption Agreement.
	 
	4.3	 	Timing of Election to Defer. Each Eligible Employee who desires to defer Compensation
otherwise payable in respect of a Plan Year must execute a deferral agreement within the
period preceding the Plan Year specified by the Administrator. Each Eligible Employee who
desires to defer Compensation that is a Bonus must execute a deferral agreement within the
period preceding the Plan Year during which the Bonus is earned that is specified by the
Administrator, except that if the Bonus can be treated as performance based compensation as
described in Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within
the period specified by the Administrator, which period, in no event, shall end after the date
which is six months prior to the end of the period during which the Bonus is earned.
	 
	 	 	An employee who is classified or designated as an Eligible Employee during a Plan Year who
is designated as eligible to participate during a Plan Year may elect to defer Compensation
(as specified in Section 3.01 of the Adoption Agreement) otherwise earned in respect of the
remainder of such Plan Year in accordance with the rules of this Section 4.3 by

Article 4-1

 

	 	 	executing a deferral agreement within the thirty (30) day period beginning on the date the
employee is classified or designated as an Eligible Employee, if permitted by Section 2.01
of the Adoption Agreement.
	 
	4.4	 	Election of Payment Schedule and Form of Payment.
	 
	 	 	At the time an Eligible Employee completes a deferral agreement, the Eligible Employee must
elect a time and a form of payment for the Compensation subject to the deferral agreement
from among the options the Administrator has made available for this purpose and which are
specified in 6.01b of the Adoption Agreement.
	 

Article 4-2

 

ARTICLE 5 – EMPLOYER CONTRIBUTIONS

	5.1	 	Matching Contributions. If specified in Section 5.01a of the Adoption Agreement, the
Employer will credit the Participant’s Account with a matching contribution determined in
accordance with the formula specified therein. The matching contribution will be credited to
the Participant’s Account at the time specified therein.
	 
	5.2	 	Other Contributions. If specified in Section 5.01b of the Adoption Agreement, the Employer
will credit the Participant’s Account with a contribution determined in accordance with the
formula or method specified in Section 5.01b of the Adoption Agreement. The contribution will
be credited to the Participant’s Account at the time specified in Section 5.01b(iii) of the
Adoption Agreement.

Article 5-1

 

ARTICLE 6 – ACCOUNTS AND CREDITS

	6.1	 	Establishment of Account. For accounting and computational purposes only, the Administrator
will establish and maintain an Account for each Participant which will reflect the credits
made pursuant to Section 6.2 along with the earnings, expenses, gains and losses allocated
thereto, attributable to the hypothetical investments made with the amounts in the
Participant’s Account as provided in Article 7. The Administrator will establish and maintain
such other records and accounts, as it decides in its discretion to be reasonably required or
appropriate to discharge its duties under the Plan.
	 
	6.2	 	Credits to Account. A Participant’s Account will be credited for each Plan Year with the
amount of his elective deferrals under Section 4.1 at the time the amount subject to the
deferral election would otherwise have been payable to the Participant and the amount of
Employer contributions made on his behalf under Article 5. Such amounts will be credited to
the Participant’s Account at the times specified, respectively, in Sections 5.01a(iii) and
5.01b(iii) of the Adoption Agreement.

Article 6-1

 

ARTICLE 7 – INVESTMENT OF CONTRIBUTIONS

	7.1	 	Investment Options. The amount in a Participant’s Account shall be treated as invested in
the investment options designated for this purpose by the Administrator and set forth in
Appendix A to the Adoption Agreement.
	 
	7.2	 	Adjustment of Accounts. The amount in a Participant’s Account shall be adjusted for
hypothetical investment earnings, expenses, gains or losses in an amount equal to the
earnings, expenses, gains or losses attributable to the investment options selected by the
party designated in Section 9.01 of the Adoption Agreement from among the investment options
provided in Section 7.1. If permitted by Section 9.01 of the Adoption Agreement, a
Participant may, in accordance with rules and procedures established by the Administrator,
select the investments from among the options provided in Section 7.1 to be used for the
purpose of calculating future hypothetical investment adjustments to the Participant’s Account
or to future credits to the Account under Section 6.2 effective as the Valuation Date
coincident with or next following notice to the Administrator. The Account of each
Participant shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical
earnings, expenses, gains and losses described above; (b) amounts credited pursuant to Section
6.2; and (c) payments. In addition, the Account of each Participant may be adjusted for its
allocable share of the hypothetical costs and expenses associated with the maintenance of the
hypothetical investments provided in Section 7.1.

Article 7-1

 

ARTICLE 8 – RIGHT TO BENEFITS

	8.1	 	Vesting. A Participant, at all times, has a 100% nonforfeitable interest in the amounts
credited to his Account attributable to his elective deferrals made in accordance with Section
4.1.
	 
	 	 	A Participant’s right to the amounts credited to his Account attributable to Employer
contributions made in accordance with Article 5 shall be determined in accordance with the
relevant schedule specified in Section 7.01 of the Adoption Agreement.
	 
	8.2	 	Death. The balance or remaining balance credited to a Participant’s vested Account shall be
paid to his estate in a single lump sum payment as soon as practicable following the
Participant’s date of death.
	 
	8.3	 	Disability. The balance or remaining balance credited to a Participant’s vested Account
shall be paid to the Participant in a single lump sum cash payment as soon as practicable
following the date a Participant incurs a Disability as defined in Section 2.11, unless
additional forms of payment have been made available for this purpose in Section 6.01b of the
Adoption Agreement. If additional forms have been made available, payment shall be made at
the time and in the form elected by the Participant in accordance with the provisions of
articles 4 and 6. The Administrator, in its sole discretion, shall determine whether a
Participant has experienced a disability for purposes of this Section 8.3.

Article 8-1

 

ARTICLE 9 – DISTRIBUTION OF BENEFITS

	9.1	 	Amount of Benefits. The vested amount credited to a Participant’s Account as determined
under Articles 6, 7 and 8 shall determine and constitute the basis for the value of benefits
payable to the Participant under the Plan.
	 
	9.2	 	Method and Timing of Distributions. Except as otherwise provided in this Article 9,
distributions under the Plan shall be made at the time and in the manner specified by the
Participant in accordance with the provisions of Article 4. If permitted by Section 6.01g of
the Adoption Agreement, a Participant may elect, at least twelve months before a scheduled
date of distribution, to delay the payment date for a minimum period of sixty months from the
originally scheduled date of payment and such election may not take effect until at least 12
months after the date on which the election is made. The re-deferral election must be made in
accordance with procedures and rules established by the Administrator. The Participant may,
at the same time the date of payment is deferred, change the form of payment but such change
in the form of payment may not affect an acceleration of payment.
	 
	9.3	 	Unforeseeable Emergency. If permitted by Section 8.01 of the Adoption Agreement, a
Participant may request a distribution due to an Unforeseeable Emergency. The request must be
in writing and must be submitted to the Administrator along with evidence that the
circumstances constitute an Unforeseeable Emergency. The Administrator has the discretion to
require whatever evidence it deems necessary to determine whether a distribution is warranted.
Whether a Participant has incurred an Unforeseeable Emergency will be determined by the
Administrator on the basis of the relevant facts and circumstances in its sole discretion,
but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be
relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by
liquidation of the Participant’s assets to the extent such liquidation would not itself cause
severe financial hardship, or (c) by cessation of deferrals under the Plan. A distribution
due to an Unforeseeable Emergency must be limited to the amount reasonably necessary to
satisfy the emergency need and may include any amounts necessary to pay any federal, state or
local income taxes reasonably anticipated to result from the distribution. The distribution
will be made in the form of a single lump sum cash payment.

Article 9-1

 

	9.4	 	Termination Before Retirement. If the Employer has elected a Separation from Service
override in accordance with Section 6.01d of the Adoption Agreement, the following provisions
apply. Subject to the provisions in Section 9.6, a Participant who experiences a Separation
from Service before Retirement for any reason other than death shall receive the vested amount
credited to his Account in a single lump sum payment as soon as practicable following such
termination or cessation of service regardless of whether the Participant had made different
elections of time or form of payment as to the vested amounts credited to his Account or
whether the Participant was receiving installment payouts at the time of such termination.
	 
	9.5	 	Cashouts Of Amounts Not Exceeding Stated Limit. If the vested amount credited to the
Participant’s Account does not exceed the limit established for this purpose by the Employer
in Section 6.01e of the Adoption Agreement at the time he separates from service with the
Employer for any reason, the Employer shall distribute such amount to the Participant in a
single lump sum cash payment as soon as practicable following such termination regardless of
whether the Participant had made different elections of time or form of payment as to the
vested amount credited to his Account or whether the Participant was receiving installments at
the time of such termination.
	 
	9.6	 	Key Employees. In no event shall a distribution made to a Key Employee from his Account by
reason of his Separation from Service (other than as a result of such Key Employee’s death or
Disability) occur before the date which is six months after the date of such Separation from
Service with the Employer except in the case of (i) any distribution that occurs in connection
with a Change in Control pursuant to Section 10.3 of this Plan or (ii) a distribution on a
“specified date”, as elected by a Key Employee in accordance with Section 409A of the Code if
specified in Section 6.01b of the Adoption Agreement.
	 
	9.7	 	Change in Control. If the Employer has elected to permit distributions upon a Change in
Control, the following provisions shall apply. A distribution made upon a Change in Control
will be made in the form elected by the Participant in accordance with the procedures
described in Article 4. A Change in Control will occur upon a change in the ownership of the
Employer, a change in the effective control of the Employer or a change in the ownership of a
substantial portion of the assets of the Employer. The Employer, for this purpose, includes
any corporation identified in this Section 9.7.
	 
	 	 	If a Participant continues to make deferrals in accordance with Article 4 after he has
received a distribution due to a Change in Control, the residual amount payable to the
Participant shall be paid at the time and in

Article 9-2

 

	 	 	the form specified in the elections he makes in accordance with Article 4 or upon his Death
or Disability as provided in Article 8.
	 
	 	 	Whether a Change in Control has occurred will be determined by the Administrator in
accordance with the rules and definitions set forth in this Section 9.7. A distribution to
the Participant will be treated as occurring upon a Change in Control if the Plan Sponsor
terminates the Plan and distributes the Participant’s benefits within twelve months of a
Change in Control as provided in Section 10.3.

	 	a)	 	Relevant Corporations. To constitute a Change in Control for purposes of the
Plan, the event must relate to (i) the corporation for whom the Participant is
performing services at the time of the Change in Control, (ii) the corporation that is
liable for the payment of the Participant’s benefits under the Plan (or all
corporations liable if more than one corporation is liable), or (iii) a corporation
that is a majority shareholder of a corporation identified in (i) or (ii), or any
corporation in a chain of corporations in which each corporation is a majority
corporation of another corporation in the chain, ending in a corporation identified in
(i) or (ii). A majority shareholder is defined as a shareholder owning more than
fifty percent (50%) of the total fair market value and voting power of such
corporation.
	 
	 	b)	 	Stock Ownership. Code Section 318(a) applies for purposes of determining
stock ownership. Stock underlying a vested option is considered owned by the
individual who owns the vested option (and the stock underlying an unvested option is
not considered owned by the individual who holds the unvested option). If, however, a
vested option is exercisable for stock that is not substantially vested (as defined by
Treasury Regulation Section 1.83-3(b) and (j)) the stock underlying the option is not
treated as owned by the individual who holds the option. Mutual and cooperative
corporations are treated as having stock for purposes of this Section 9.7.
	 
	 	c)	 	Change in the Ownership of a Corporation. A change in the ownership of a
corporation occurs on the date that any one person or more than one person acting as a
group, acquires ownership of stock of the corporation that, together with stock held
by such person or group, constitutes more than fifty percent (50%) of the total fair
market value or total voting power of the stock of such corporation. If any one
person or more than one person acting as a proxy is considered to own more than fifty
percent (50%) of the total fair market value or total voting power of the stock of a
corporation, the acquisition of additional stock by the same person or persons is not
considered to cause a change in the ownership of the corporation (or to cause a change
in the effective control of the corporation as

Article 9-3

 

	 	 	 	discussed below in Section 9.7(d)). An increase in the percentage of stock owned by
any one person, or persons acting as a group, as a result of a transaction in which
the corporation acquires its stock in exchange for property will be treated as an
acquisition of stock. Section 9.7(c) applies only when there is a transfer of stock
of a corporation (or issuance of stock of a corporation) and stock in such
corporation remains outstanding after the transaction. For purposes of this Section
9.7(c), persons will not be considered to be acting as a group solely because they
purchase or own stock of the same corporation at the same time or as a result of a
public offering. Persons will, however, be considered to be acting as a group if
they are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with the corporation. If a
person, including an entity, owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a group with other shareholders in a
corporation prior to the transaction giving rise to the change and not with respect
to the ownership interest in the other corporation.

	 	d)	 	Change in the effective control of a corporation. A change in the effective
control of a corporation occurs on the date that either (i) any one person, or more
than one person acting as a group, acquires (or has acquired during the twelve month
period ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the corporation possessing thirty-five (35%) or more of the
total voting power of the stock of such corporation, or (ii) a majority of members of
the corporation’s board of directors is replaced during any twelve month period by
directors whose appointment or election is not endorsed by a majority of the members
of the corporation’s board of directors prior to the date of the appointment or
election, provided that for purposes of this paragraph (ii), the term corporation
refers solely to the relevant corporation identified in Section 9.7(a) for which no
other corporation is a majority shareholder for purposes of Section 9.7(a). In the
absence of an event described in Section 9.7(d)(i) or (ii), a change in the effective
control of a corporation will not have occurred. A change in effective control may
also occur in any transaction in which either of the two corporations involved in the
transaction has a change in the ownership of such corporation as described in Section
9.7(c) or a change in the ownership of a substantial portion of the assets of such
corporation as described in Section 9.7(e). If any one person, or more than one
person acting as a group, is considered to effectively control a corporation within
the meaning of this Section 9.7(d), the acquisition of additional control of the
corporation by the same person or persons is not considered to cause a change in the
effective control of the corporation or to cause

Article 9-4

 

	 	 	 	a change in the ownership of the corporation within the meaning of Section 9.7(c).
For purposes of this Section 9.7(d), persons will or will not be considered to be
acting as a group in accordance with rules similar to those set forth in Section
9.7(c) with the following exception. If a person, including an entity, owns stock
in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to be
acting as a group with other shareholders in a corporation only with respect to the
ownership in that corporation prior to the transaction giving rise to the change and
not with respect to the ownership interest in the other corporation.
	 
	 	e)	 	Change in the ownership of a substantial portion of a corporation’s assets.
A change in the ownership of a substantial portion of a corporation’s assets occurs on
the date that any one person, or more than one person acting as a group (as determined
in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or
has acquired during the twelve month period ending on the date of the most recent
acquisition by such person or persons) assets from the corporation that have a total
gross fair market value equal to or more than forty percent (40%) of the total gross
fair market value of all of the assets of the corporation immediately prior to such
acquisition or acquisitions. For this purpose, gross fair market value means the
value of the assets of the corporation of the value of the assets being disposed of
determined without regard to any liabilities associated with such assets. There is no
Change in Control event under this Section 9.7(e) when there is a transfer to an
entity that is controlled by the shareholders of the transferring corporation
immediately after the transfer. A transfer of assets by a corporation is not treated
as a change in ownership of such assets if the assets are transferred to (i) a
shareholder of the corporation (immediately before the asset transfer) in exchange for
or with respect to its stock, (ii) an entity, fifty percent (50%) or more of the total
value or voting power of which is owned, directly or indirectly, by the corporation,
(iii) a person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of all the
outstanding stock of the corporation, or (iv) an entity, at least fifty (50%) of the
total value or voting power of which is owned, directly or indirectly, by a person
described in Section 9.7(e)(iii). For purposes of the foregoing, and except as
otherwise provided, a person’s status is determined immediately after the transfer of
assets.

Article 9-5

 

ARTICLE 10 – AMENDMENT AND TERMINATION

	10.1	 	Amendment by Employer. The Plan Sponsor reserves the right to amend the Plan (for itself and
each Employer) through action of the Compensation and Human Resource Committee of the Board of
Directors (the “Compensation Committee”). Each amendment shall be effective as determined by
the Compensation Committee in its resolution. No amendment can directly or indirectly deprive
any current or former Participant or Beneficiary of all or any portion of his Account which
had accrued prior to the amendment.
	 
	10.2	 	Retroactive Amendments. An amendment made by the Plan Sponsor in accordance with Section
10.1 may be made effective on a date prior to the first day of the Plan Year in which it is
adopted if such amendment is necessary or appropriate to enable the Plan to satisfy the
applicable requirements of the Code or ERISA or to conform the Plan to any change in federal
law or to any regulations or ruling thereunder. Any retroactive amendment by the Plan Sponsor
shall be subject to the provisions of Section 10.1.
	 
	10.3	 	Plan Termination. If specified in 11.01 of the Adoption Agreement, the Plan Sponsor reserves
the right to terminate the Plan and distribute all amounts credited to all Participant
Accounts as soon as administratively feasible, but in no event later than twelve months,
following a Change in Control as determined in accordance with the rules set forth in Section
9.7. In addition, the Plan Sponsor reserves the right to terminate the Plan to the extent
permitted by Code Section 409A, including a termination at any time with respect to any
deferrals made after the effective date of such termination.
	 
	10.4	 	Distribution Upon Termination of the Plan. Except as provided in Section 10.3, the Plan may
not be terminated before the date on which all amounts credited to all Participant Accounts
have been distributed in accordance with Articles 8 and 9.

Article 10-1

 

ARTICLE 11 – THE TRUST

	11.1	 	Establishment of Trust. The Plan Sponsor may but is not required to establish a trust to
hold amounts to which the Employers may contribute from time to time to correspond to some or
all amounts credited to Participants under Section 6.2. If the Plan Sponsor elects to
establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions
of Sections 11.2 and 11.3 shall become operative.
	 
	11.2	 	Grantor Trust. Any trust established by the Plan Sponsor shall be between the Plan Sponsor
and a trustee pursuant to a separate written agreement under which assets are held,
administered and managed, subject to the claims of the Employer’s creditors in the event of
the Employer’s insolvency, until paid to the Participant and/or his Beneficiaries specified in
the Plan. The trust is intended to be treated as a grantor trust under the Code, and the
establishment of the trust shall not cause the Participant to realize current income on
amounts contributed thereto. The Plan Sponsor must notify the trustee in the event of a
lawsuit, bankruptcy or insolvency.
	 
	11.3	 	Investment of Trust Funds. Any amounts contributed to the trust shall be invested by the
trustee in accordance with the provisions of the trust and the instructions of the
Administrator. Trust investments need not reflect the hypothetical investments selected by
Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or
investment results of the trust shall not affect the hypothetical investment adjustments to
Participant Accounts under the Plan.

Article 11-1

 

ARTICLE 12 – PLAN ADMINISTRATION

	12.1	 	Powers and Responsibilities of the Administrator. The Administrator has the full power and
the full responsibility to administer the Plan in all of its details, subject, however, to the
applicable requirements of ERISA. The Administrator’s powers and responsibilities include,
but are not limited to, the following:

	 	(a)	 	To make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;
	 
	 	(b)	 	To interpret the Plan, its interpretation thereof in good faith to be final
and conclusive on all persons claiming benefits under the Plan;
	 
	 	(c)	 	To decide all questions concerning the Plan and the eligibility of any person
to participate in the Plan;
	 
	 	(d)	 	To administer the claims and review procedures specified in Section 12.2;
	 
	 	(e)	 	To compute the amount of benefits which will be payable to any Participant,
former Participant or Beneficiary in accordance with the provisions of the Plan;
	 
	 	(f)	 	To determine the person or persons to whom such benefits will be paid;
	 
	 	(g)	 	To authorize the payment of benefits;
	 
	 	(h)	 	To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
	 
	 	(i)	 	To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan;
	 
	 	(j)	 	By written instrument, to allocate and delegate its responsibilities,
including the formation of an Administrative Committee to administer the Plan.

Article 12-1

 

12.2 Claims and Review Procedures.

	 	(a)	 	Claims Procedure. If any person believes he is being denied any
rights or benefits under the Plan, such person may file a claim in writing with the
Administrator. If any such claim is wholly or partially denied, the Administrator
will notify such person of its decision in writing. Such notification will contain
(i) specific reasons for the denial, (ii) specific reference to pertinent Plan
provisions, (iii) a description of any additional material or information necessary
for such person to perfect such claim and an explanation of why such material or
information is necessary, and (iv) information as to the steps to be taken if the
person wishes to submit a request for review. Such notification will be given within
90 days after the claim is received by the Administrator (or within 180 days, if
special circumstances require an extension of time for processing the claim, and if
written notice of such extension and circumstances is given to such person within the
initial 90-day period). If such notification is not given within such period, the
claim will be considered denied as of the last day of such period and such person may
request a review of his claim.
	 
	 	(b)	 	Review Procedure. Within 60 days after the date on which a person
receives a written notification of denial of claim (or, if written notification is not
provided, within 60 days of the date denial is considered to have occurred), such
person (or his duly authorized representative) may (i) file a written request with the
Administrator for a review of his denied claim and of pertinent documents and (ii)
submit written issues and comments to the Administrator. The Administrator will
notify such person of its decision in writing. Such notification will be written in a
manner calculated to be understood by such person and will contain specific reasons
for the decision as well as specific references to pertinent Plan provisions. The
decision on review will be made within 60 days after the request for review is
received by the Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by the Administrator
to hold a hearing, and if written notice of such extension and circumstances is given
to such person within the initial 60-day period). If the decision on review is not
made within such period, the claim will be considered denied.

Article 12-2

 

	12.3	 	Plan Administrative Costs. All reasonable costs and expenses (including legal, accounting,
and employee communication fees) incurred by the Administrator in administering the Plan shall
be paid by the Employer.

Article 12-3

 

ARTICLE 13 – MISCELLANEOUS

	13.1	 	Unsecured General Creditor of the Employer. Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests or claims in any
property or assets of any Employer. For purposes of the payment of benefits under the Plan,
any and all of the Employer’s assets shall be, and shall remain, the general, unpledged,
unrestricted assets of the Employer. Each Employer’s obligation under the Plan shall be
merely that of an unfunded and unsecured promise to pay money in the future.
	 
	13.2	 	Employer’s Liability. Each Employer’s liability for the payment of benefits under the Plan
shall be defined only by the Plan and by the deferral agreements entered into between a
Participant and the Employer. An Employer shall have no obligation or liability to a
Participant under the Plan except as provided by the Plan and a deferral agreement or
agreements. An Employer shall have no liability to Participants employed by other Employers.
	 
	13.3	 	Limitation of Rights. Neither the establishment of the Plan, nor any amendment thereof, nor
the creation of any fund or account, nor the payment of any benefits, will be construed as
giving to the Participant or any other person any legal or equitable right against the
Employer or Administrator, except as provided herein; and in no event will the terms of
employment or service of the Participant be modified or in any way affected hereby.
	 
	13.4	 	Acceleration of Benefits. None of the benefits or rights of a Participant or any Beneficiary
of a Participant shall be subject to the claim of any creditor. In particular, to the fullest
extent permitted by law, all such benefits and rights shall be free from attachment,
garnishment, or any other legal or equitable process available to any creditor of the
Participant and his or her Beneficiary. Neither the Participant nor his or her Beneficiary
shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the
payments which he or she may expect to receive, contingently or otherwise, under this Plan,
except the right to designate a Beneficiary to receive death benefits provided hereunder. A
distribution made to comply with Federal conflict of interest requirements shall be permitted,
notwithstanding any elections made by the Participant to the contrary.
	 
	13.5	 	Facility of Payment. If the Administrator determines, on the basis of medical reports or
other evidence satisfactory to the Administrator, that the recipient of any benefit payments
under the Plan is incapable of handling his affairs by reason of minority, illness, infirmity
or other incapacity, the Administrator may direct the Employer to disburse such payments to a
person or institution designated by a court which has jurisdiction over such recipient or a
person or institution otherwise having the legal authority under State law for the care

 

 

	 	 	and control of such recipient. The receipt by such person or institution of any such
payments therefore, and any such payment to the extent thereof, shall discharge the
liability of the Employer for the payment of benefits hereunder to such recipient.
	 
	13.6	 	Notices. Any notice or other communication in connection with the Plan shall be deemed
delivered in writing if addressed as provided below and if either actually delivered at said
address or, in the case or a letter, 5 business days shall have elapsed after the same shall
have been deposited in the United States mails, first-class postage prepaid and registered or
certified:

	 	(a)	 	If it is sent to the Employer or Administrator, it will be at the address
specified by the Employer; or
	 
	 	(b)	 	In each case at such address as the addressee shall have specified by written
notice delivered in accordance with the foregoing to the addressor’s then effective
notice address.

	13.7	 	Tax Withholding. The Employer shall have the right to deduct from all payments or deferrals
made under the Plan any tax required by law to be withheld. If the Employer concludes that
tax is owing with respect to any deferral or payment hereunder, the Employer shall withhold
such amounts from any payments due the Participant, as permitted by law, or otherwise make
appropriate arrangements with the Participant or his Beneficiary for satisfaction of such
obligation. Tax, for purposes of this Section 13.7 means any federal, state, local or any
other governmental income tax, employment or payroll tax, excise tax, or any other tax or
assessment owing with respect to amounts deferred, any earnings thereon, and any payments made
to Participants under the Plan.
	 
	13.8	 	Indemnification. Each Employer shall indemnify, to the full extent permitted by law, each
employee, officer or director made or threatened to be made a party to any civil or criminal
action or proceeding by reason of the fact that he, or his testator or intestate, is or was
delegated duties, responsibilities, and authority with respect to the Plan.
	 
	13.9	 	Governing Law. The Plan shall be construed, administered and governed in all respects under
and by the laws of the State of New York, without reference to the principles of conflicts of
law (except if and to the extent preempted by applicable Federal law). It is the intent of
the Plan Sponsor that this Plan be considered and interpreted in all respects as part of a
bonus plan within the meaning of U. S. Department of Labor Regulation Section 2510.3-2(c) and
not in any respect as an employee pension plan for purposes of ERISA. If and to the extent
that any portion of this Plan shall be determined to be an employee pension benefit plan
subject to ERISA, then such portion shall be considered a separate plan covering only those
Participants as to whom this Plan is determined to be a pension plan. Such pension plan shall
in all

 

 

	 	 	respects be considered and interpreted as a plan which is unfunded and maintained primarily
for the purpose of providing deferred compensation for a select group of management or
highly compensated employees and exempt from coverage of Parts 1, 2, 3 and 4 of Subtitle B
of Title I of ERISA to the maximum extent permissible under the provisions thereof.
Further, it is the intent of the Plan Sponsor that this Plan be considered and interpreted
in all respects as a nonqualified deferred compensation plan satisfying the requirements of
Section 409A of the Code and deferring the recognition of income by Participants in respect
of amounts credited to Participant Accounts until amounts are actually paid to them
pursuant to the Plan.<PAGE>

                                                                   EXHIBIT 10.26

                              COAL SUPPLY AGREEMENT

                                     Between

                            ANKER ENERGY CORPORATION
                                    as seller

                                       and

                      KEYSTONE ENERGY SERVICE COMPANY, L.P.
                                  as purchaser.

                              Dated April 1 , 1992

                              Cogeneration Facility
                           Logan Township, New Jersey

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                     Page
<S>                                                                                                  <C>
ARTICLE I
DEFINED TERMS...................................................................................       2
    1.1   Calendar Periods......................................................................       3
    1.2   Singular and Plural...................................................................       3
    1.3   Sections of the Agreement.............................................................       3
    1.4   Terms of Art..........................................................................       3
    1.5   Certain Defined Terms.................................................................       4

ARTICLE II
TERM AND COMMENCEMENT OF DELIVERIES.............................................................       7
    2.1   Initial Term..........................................................................       7
    2.2   Extension of Term.....................................................................       8
    2.3   Commencement of Deliveries............................................................       9
    2.4   Conditions Precedent..................................................................      10
    2.5   Satisfaction of Conditions Precedent..................................................      11

ARTICLE III
SOURCE OF COAL..................................................................................      11
    3.1   Source................................................................................      11
    3.2   Dedication of Coal....................................................................      12
    3.3   Substitution..........................................................................      13

ARTICLE IV
QUANTITY, ESTIMATES AND ORDERS..................................................................      13
    4.1   Coal Requirements.....................................................................      13
    4.2   Estimates of Requirements.............................................................      13
    4.3   Monthly Orders........................................................................      14
    4.4   First Delivery of Coal................................................................      15
    4.5   Stockpiles............................................................................      15
    4.6   Coordination of Maintenance Periods...................................................      16
    4.7   Testing Quantities and Burn Tests.....................................................      17

ARTICLE V
POINT OF DELIVERY: METHOD OF DELIVERY...........................................................      17
    5.1   Point of Delivery.....................................................................      17
    5.2   Method of Delivery....................................................................      18
    5.3   Lay Time..............................................................................      18
    5.4   Demurrage.............................................................................      19
    5.5   Tie-Up Time...........................................................................      20
    5.6   Time of Delivery......................................................................      20
    5.7   Docking and Undocking.................................................................      20
    5.8   Notices of Shipments..................................................................      21
    5.9   Notice of Insurance...................................................................      23
</TABLE>

                                       -i-
<PAGE>

                                 TABLE OF CONTENTS
                                    (continued)

<TABLE>
<CAPTION>
                                                                                                    Page
<S>                                                                                                 <C>
ARTICLE VI
QUALITY.........................................................................................      23
    6.1   General Quality Provisions............................................................      23
    6.2   Rejection, Suspension and Contract Specifications.....................................      24
    6.3   Rejection of Coal.....................................................................      25
    6.4   Suspension of Shipments...............................................................      26
    6.5   Replacement Coal......................................................................      27
    6.6   Coal Handling or Operating Problems...................................................      28
    6.7   Adjustment of Price for New Specifications............................................      30
    6.8   Corrective Actions....................................................................      31
    6.9   Change in Law.........................................................................      31
    6.10  Testing of Coal with Volatility Less than 20 Percent..................................      31
    6.11  EXCLUSIONS AND WARRANTIES.............................................................      32

ARTICLE VII
PRICE...........................................................................................      32
    7.1   Base Price............................................................................      32
    7.2   Escalation of Base Price..............................................................      34
    7.3   Base Escalator........................................................................      34
    7.4   Adjustment of Price for Sulfur Content................................................      35
    7.5   Bituminous Coal.......................................................................      35
    7.6   New Base Escalator....................................................................      36
    7.7   Government Imposition.................................................................      38

ARTICLE VIII
PREMIUMS AND PENALTIES FOR VARIATIONS IN QUALITY................................................      38
    8.1   Calculation and Billing of Premiums and Penalties.....................................      38
    8.2   Premiums and Penalties for Calorific Value............................................      38
    8.3   Premiums and Penalties for Ash........................................................      39
    8.4   Premiums and Penalties for Sulfur.....................................................      40

ARTICLE IX
BILLING AND PAYMENT.............................................................................      41
    9.1   Billing...............................................................................      41
    9.2   Payment...............................................................................      43
    9.3   Disputed Invoices.....................................................................      43
    9.4   Records of Seller.....................................................................      44

ARTICLE X
WEIGHING, SAMPLING AND ANALYSIS.................................................................      44
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<S>                                                                                                   <C>
    10.1  Weighing..............................................................................      44
    10.2  Sampling..............................................................................      45
    10.3  Analysis..............................................................................      46
    10.4  Referee Analysis......................................................................      48

ARTICLE XI
FORCE MAJEURE,..................................................................................      48
    11.1  Definition of Force Majeure...........................................................      48
    11.2  Consequence of Force Majeure..........................................................      50
    11.3  Events Beyond Control of a Party......................................................      52
    11.4  Termination for Force Majeure.........................................................      53

ARTICLE XII
DEFAULTS AND REMEDIES...........................................................................      53
    12.1  Events of Default.....................................................................      53
    12.2  Remedies for Default..................................................................      55
    12.3  Waiver of Default.....................................................................      56
    12.4  Cumulative Remedies...................................................................      56
    12.5  No Consequential Damages..............................................................      56

ARTICLE XIII
REPRESENTATIONS, WARRANTIES AND COVENANTS.......................................................      57
    13.1  Seller's Representations and Warranties...............................................      57
    13.2  Representations and Warranties of Keystone............................................      58
    13.3  Special Covenants of Seller...........................................................      60
    13.4  Special Covenants of Keystone.........................................................      60

ARTICLE XIV
INDEMNIFICATION.................................................................................      62
    14.1  Seller Indemnity......................................................................      62
    14.2  Keystone Indemnity....................................................................      63
    14.3  Indemnity for Warranties and Other Matters............................................      63
    14.4  Effect of Indemnification.............................................................      64
    14.5  Notice and Legal Defense..............................................................      64
    14.6  Failure to Defend Claim...............................................................      65
    14.7  Joint Cause...........................................................................      66
    14.8  Survival..............................................................................      66

ARTICLE XV
NOTICES.........................................................................................      66
    15.1  Notices...............................................................................      66

ARTICLE XVI
ASSIGNMENT......................................................................................      67
    16.1  Assignments...........................................................................      67
    16.2  Assignment to Financing Parties.......................................................      68
    16.3  Successors and Assigns................................................................      70
</TABLE>

                                      -iii-
<PAGE>

<TABLE>
<S>                                                                                                  <C>
ARTICLE XVII
INSURANCE.......................................................................................      71
    17.1  Seller Coverages......................................................................      71
    17.2  Restrictions on Seller Coverages......................................................      71
    17.3  Seller Subcontractor Coverages........................................................      72
    17.4  Keystone Coverages....................................................................      72
    17.5  Restrictions on Keystone Coverages....................................................      73
    17.6  Endorsements..........................................................................      73
    17.7  Certificates..........................................................................      74

ARTICLE XVIII
ARBITRATION.....................................................................................      74
    18.1  Arbitration...........................................................................      74
    18.2  Price and Payment During Arbitration..................................................      75
    18.3  Survival of Provisions................................................................      76

ARTICLE XIX
MISCELLANEOUS PROVISIONS........................................................................      76
    19.1  Rounding..............................................................................      76
    19.2  Consequences of Termination...........................................................      76
    19.3  Amendments; Waiver....................................................................      77
    19.4  Severability..........................................................................      77
    19.5  Governing Law.........................................................................      77
    19.6  Independent Contractor:  No Partnership...............................................      78
    19.7  Captions, Exhibits and the Table of Contents..........................................      78
    19.8  Entire Agreement......................................................................      78
    19.9  Counterparts..........................................................................      79
    19.10 Confidentiality.......................................................................      79
    19.11 Attorney Fees.........................................................................      80
    19.12 Right to Visit........................................................................      80
    19.13 Further Assurances....................................................................      80
</TABLE>

                                      -iv-
<PAGE>

                                TABLE OF EXHIBITS

<TABLE>
<CAPTION>
Exhibit   Description
-------   -----------
<S>       <C>
   A      Description of the Facility

   B      Description of the Mines

   C      Typical Coal Specifications

   D      Article 5.1B(ii) of the Agreement for Purchase of Electric Power

   E      Billing and Premium Calculation Examples
</TABLE>

                                       -v-
<PAGE>

                              COAL SUPPLY AGREEMENT

            This COAL SUPPLY AGREEMENT (the "Agreement"), entered into this 1st
day of April, 1992, is by and between ANKER ENERGY CORPORATION, a Delaware
corporation referred to herein as "Seller" and KEYSTONE ENERGY SERVICE COMPANY,
L.P., a Delaware limited partnership referred to herein as "Keystone."

                                    RECITALS

            WHEREAS, Keystone intends to cause a cogeneration facility to be
financed, designed, constructed, owned, operated, maintained and to be located
on a site owned by Keystone in Logan Township, New Jersey (the "Facility");

            WHEREAS, it is contemplated that the Facility will produce steam and
electricity and will burn coal with the specifications set forth in this
Agreement as a source of fuel;

            WHEREAS, Seller and its affiliates are engaged in the mining and
selling of coal for use as fuel in boilers to produce steam;

            WHEREAS, Keystone desires to purchase 100% of the coal requirements
of the Facility from Seller, and Seller desires to supply, sell, and deliver
100% of the Facility's coal requirements for testing, start-up and operation on
the terms and conditions set forth herein;

<PAGE>

            WHEREAS, Keystone will sell electricity generated at the Facility to
Atlantic City/Electric Company ("Atlantic Electric") under an Agreement for
Purchase of Electric Power dated as of August 25, 1988, as amended, and Keystone
will sell steam and electricity produced at the Facility to Monsanto Chemical
Company ("Monsanto") under a Steam Supply Agreement dated as of November 22,
1988 and an Electric Power Sales Agreement dated as of November 22, 1988, and
the coal requirements will depend upon the quantity of steam and electricity
purchased pursuant to those agreements; and

            WHEREAS, Seller will contract for necessary rail and waterborne
transportation of the coal from the Mines (as defined in Section 3.1) to the
Point of Delivery at the Facility.

            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, Seller and Keystone hereby agree as follows:

                                    ARTICLE I

                                  DEFINED TERMS

            Some of the terms used in this Agreement are defined in this Article
I. Other terms are defined in the opening paragraph and in the recitals.
Additional terms are defined at

                                       2
<PAGE>

the points where such terms are first used. Except for the defined terms set
forth in Sections 1.1 and 1.4 below, the first letter of a defined term is
capitalized.

             1.1 Calendar Periods. The terms "day", "week", "month", and
"quarter" shall mean, respectively, a period of 24 hours commencing at 12:01
a.m. local time, a period of seven days beginning at 12:01 a.m. on Sunday, a
calendar month, a calendar quarter. The term "year" shall mean a period of 365
days, except that if February has 29 days during any such period, the term
"year" shall mean a period of 366 days.

            1.2 Singular and Plural. The singular of a defined term shall
include the plural and the plural shall include the singular as the context
requires.

            1.3 Sections of the Agreement. The term "Section" when used in
combination with a section number refers to that Section of this Agreement.
Numbered Sections of this Agreement do not include the word "Section"
immediately prior to such number.

            1.4 Terms of Art. Certain terms used in this Agreement are terms of
art in the coal and electric generation industries and have commonly understood
meanings. Examples include, but are not limited to, terms such as "Btu," "as

                                       3
<PAGE>

received," "steam," "ash" and other terms of this nature. The parties hereto
agree that such terms shall have such commonly understood meanings and that it
is not necessary to define such terms.

            1.5 Certain Defined Terms: "Applicable Law" means any valid law,
rule, regulation, ordinance, order, statute, code, judgment, directive, decree,
injunction, Permit or similar norm of decision of any Federal, state or local
government, authority, agency, court or other body having jurisdiction over the
matter in question including interpretation or enforcement thereof.

            "Affiliate", as applied to any entity, means any other entity
directly or indirectly controlling, controlled by, or under common control with,
that entity.

            "ASTM" means the American Society for Testing Materials.

            "Commercial Operation Date" means the date which is the initial date
of commercial operation of the Facility.

            "Facility" means the cogeneration facility described in Exhibit A
attached hereto, including all additions, replacements and substitutions
thereto, which Keystone shall cause to be built and operated on the Site.

                                       4
<PAGE>

            "Financial Closing Date" means the date on which Keystone first has
access but for conditions to continued funding contained in the Financing
Documents, to funds provided by the Financing Parties sufficient for the purpose
of constructing and completing the Facility.

            "Financing Documents" means any and all loan agreements, notes,
indentures, security agreements, subordination agreements, mortgages,
partnership agreements, subscription agreements, participation agreements and
other documents relating to the construction, interim and long-term financing
(both debt and equity) of the Facility and any refinancing of the Facility
(including a leveraged lease), including any and all modifications, extensions,
renewals and replacements of any such financing or refinancing.

            "Financing Parties" means any and all equity participants (other
than Keystone and its affiliates), lenders and lessors providing funds for the
construction, interim or long-term financing (including any refinancing thereof,
including a leveraged lease) of the Facility, and any trustee or agent acting on
their behalf.

            "GDP Deflator" means the preliminary (i.e., second published) Gross
Domestic Product Implicit Price Deflator for a

                                       5
<PAGE>

calendar quarter as currently published in the United States Department of
Commerce, Bureau of Economic Analysis publication entitled Survey of Current
Business. Adjustments to rates, fees, prices, premiums and penalties which are
to be made annually based on the GDP Deflator shall be calculated as follows:
The existing rate, fee, price premium or penalty shall be increased or decreased
as of January 1 of each year of the Term hereof commencing on January 1, 1994 by
the percentage change in the index number of the GDP Deflator for the calendar
quarter immediately preceding such January 1 from the index number of the GDP
Deflator for the fourth quarter of the preceding calendar year. If the GDP
Deflator ceases to exist or becomes unavailable, the parties shall agree to a
substitute index that reasonably measures inflation for all goods and services
within the United States.

            "Independent Laboratory" shall mean Commercial Testing and
Engineering Company.

            "Operating Year" shall mean the period beginning with the Commercial
Operation Date and ending one year thereafter, and thereafter shall mean each
one-year period beginning with each anniversary of the Commercial Operation
Date.

                                       6
<PAGE>

            "Permit" means any valid waiver, exemption, variance, franchise,
permit, authorization, license or similar order of or from any Federal, state or
local government, authority, agency, court or other body having jurisdiction
over the matter in question, as in effect from time to time.

            "Preliminary Operation Date" means the date that the Facility
commences preliminary operations for testing.

            "Shipment" shall mean a quantity of not less than 7,000 Tons nor
more than 7,500 Tons of coal delivered to Keystone, as described in Section
5.2.

            "Site" means the tract of land owned by Keystone on which the
Facility will be constructed.

            "Term" means the Initial Term and any Extended Terms.

            "Ton" means a short Ton of 2,000 pounds avoirdupois weight.

                                   ARTICLE II

                       TERM AND COMMENCEMENT OF DELIVERIES

            2.1 Initial Term. This Agreement shall be effective from the date
hereof (the "Effective Date") and, unless earlier terminated in accordance with
the provisions hereof, shall

                                       7
<PAGE>

continue for an initial term which shall end 20 Operating Years after the
Commercial Operation Date (the "Initial Term").

            2.2 Extension of Term. Upon the expiration of the Initial Term and,
if applicable, any Extended Term, this Agreement shall automatically extend for
a term of five Operating Years (an "Extended Term") unless, at least eighteen
months prior to such expiration, either party shall have given notice to the
other party that it desires to renegotiate or terminate the Agreement.
Negotiations for an Extended Term will be limited to the following subjects: (i)
price to be paid for the coal; (ii) changes in the Base Escalator or "bituminous
coal" (as defined in Section 7.5) to reflect changes in market prices for coal
of the quality specified in Sections 6.1 and 6.2; and (iii) such other subjects
as either party shall have given notice to the other party prior to the
commencement of such negotiations that it desires to include in such
negotiations. Except as otherwise mutually agreed, all other terms and
provisions of this Agreement shall remain in effect during any such Extended
Term. Unless otherwise mutually agreed, if no agreement is reached by the
beginning of the ninth month prior to the expiration of the Term, or if a party
has given notice that it desires to terminate, this Agreement shall terminate at
the expiration of the Term.

                                       8
<PAGE>

            2.3 Commencement of Deliveries. (a) Seller shall commence deliveries
of coal hereunder pursuant to the first monthly Order of Keystone sent to Seller
pursuant to Section 4.3 in order to meet the anticipated testing coal and
stockpile needs and in order to meet the anticipated Preliminary Operation Date
during the first calendar quarter of 1994. Seller shall subsequently commence
deliveries of coal hereunder pursuant to the monthly Orders of Keystone sent to
Seller pursuant to Section 4.3 in order to meet the anticipated Commercial
Operation Date during the last calendar quarter of 1994. Keystone agrees to
provide notices to Seller at least quarterly beginning as of the first day of
the first calendar quarter beginning after the Financial Closing Date, as to the
status of the construction of the Facility and promptly to provide notices to
Seller of the estimated specific dates of, and any changes in, either the
anticipated Preliminary Operation Date or the anticipated Commercial Operation
Date. Keystone shall notify Seller of the Preliminary Operation Date and the
Commercial Operation Date immediately upon the determinations of such dates.

            (b) In the event that delivery of the first Shipment of coal shall
not have occurred by July 1, 1994, then upon the written request of Seller to
Keystone, Sections 7.1, 7.4 and 8.4

                                       9
<PAGE>

shall be renegotiated by Seller and Keystone in good faith to reflect any cost
increases to Seller as a result of such delay. If, after 30 days of negotiations
the parties are unable to agree, Seller shall be entitled to submit the dispute
to arbitration pursuant to Article XVIII. In the event that the Commercial
Operation Date shall not have occurred by January 1, 1996, Seller or Keystone
may terminate this Agreement upon notice to the other party, and neither party
shall have any further obligation to the other party pursuant to this Agreement,
except obligations to make payments of money already due to the other party.

            2.4 Conditions Precedent. The obligations of Keystone under this
Agreement are subject to the following conditions precedent:

            (a) Keystone's obtaining of all Permits deemed necessary or
desirable by Keystone on terms satisfactory to Keystone;

            (b) Keystone's obtaining binding commitments from the Financing
Parties for financing for the construction and operation of the Facility on
terms satisfactory to Keystone. In this connection, Seller will provide such
financial information as the Financing Parties may reasonably request concerning

                                      10
<PAGE>

Seller's financial condition and its ability to perform its obligations under
this Agreement;

            (c) The final execution of all agreements, leases, licenses and
other undertakings of any kind between Keystone and third parties deemed
necessary or desirable by Keystone on terms satisfactory to Keystone.

            2.5 Satisfaction of Conditions Precedent. Keystone shall provide
Seller notice of satisfaction of the conditions precedent specified in Section
2.4 (a), (b) and (c) within 5 days of the Financial Closing Date. Failure to
satisfy any condition precedent shall be grounds for termination of this
Agreement by Keystone.

                                   ARTICLE III

                                 SOURCE OF COAL

            3.1 Source. Subject to Seller's right of substitution pursuant to
Section 3.4, the coal to be supplied hereunder shall be processed and delivered
from Seller's affiliates' Sentinel and Patriot mine complexes (the "Mines")
located in Barbour County, West Virginia and Preston County, West Virginia,
respectively, which coal shall meet the quality specifications of this
Agreement. Attached as Exhibit B is a description of the Mines listed above by
name.

                                      11
<PAGE>

            3.2 Dedication of Coal. Seller represents and warrants that it will
own, lease or otherwise control a sufficient number of Tons of recoverable coal
from the Mines or other mines reasonably acceptable to Keystone (the "Coal
Reserves") to supply coal in accordance with the provisions of this Agreement.
Seller covenants that it will not lease, convey, assign, sell, transfer or
otherwise dispose of or agree to dispose of any of its interests in the Coal
Reserves in any quantity which would jeopardize Seller's ability to perform
under this Agreement; provided that Seller and its affiliates may grant a
security interest in the Coal Reserves to any parties which provide financing to
Seller or any parent, subsidiary or affiliate of Seller, upon notice to but
without further consent of Keystone. Prior to the Financial Closing Date, and
during the Term of this Agreement, Seller agrees to provide such information as
Keystone may reasonably request, and, upon reasonable prior notice, to permit
Keystone, its consultants, or representatives of any Financing Parties to
inspect the Mines, to verify the representations and warranties contained in
this Section 3.2. Any such inspection of the Mines shall be at the risk of the
parties performing such inspection and shall be conducted under the supervision
and authority of representatives of the Seller.

                                      12
<PAGE>

            3.3 Substitution. Seller shall have the right to deliver coal to
Keystone Under this Agreement from another source or sources if the following
two conditions are met: (i) the coal shall meet the quality specifications set
forth in this Agreement, and (ii) either (A) Keystone shall have given its
written consent to such substitution which consent shall not be unreasonably
withheld, or (B) Keystone shall have previously given its written consent and,
thereafter confirmed its approval of substitution from such source. Deliveries
of coal hereunder from any source other than the Mines shall comply with and be
subject to all terms and conditions of this Agreement.

                                   ARTICLE IV

                         QUANTITY, ESTIMATES AND ORDERS

            4.1 Coal Requirements. Seller agrees to sell and deliver coal to
Keystone, pursuant to Orders sent by Keystone to Seller in accordance with
Section 4.3, and Keystone agrees to purchase from Seller, 100% of the coal
requirements of the Facility for the production of steam and generation of
electricity including sufficient quantities for testing, start-up and stockpile
purposes on the terms and conditions set forth in this Agreement.

            4.2 Estimates of Requirements. For Seller's planning purposes,
Keystone estimates the Facility will require

                                      13
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

approximately [_ _ _ _] to [_ _ _ _] Tons of coal of the quality specified
herein per Operating Year. Keystone has no obligation hereunder to purchase any
minimum quantity. Such requirements will vary by seasons and may change over
time. At least 60 days prior to the beginning of each Operating Year, Keystone
will provide Seller with a non-binding estimate of the quantity of coal to be
delivered by Seller hereunder during each month of the ensuing Operating Year.
Keystone will promptly provide Seller with a revised non-binding forecast for
the balance of any Operating Year if Keystone becomes aware of material changes
in its pre-Operating Year forecast previously given to Seller. At least
[_ _ _ _] days prior to each calendar quarter beginning with the calendar
quarter in which the first delivery of coal is required hereunder, Keystone will
provide Seller with a non-binding estimate of the delivery dates for all
Shipments of coal which Keystone expects to Order during such calendar quarter.
Keystone will provide Seller with a non-binding estimate of the quantity of coal
required during each month of the period between the first delivery of coal
hereunder and the Commercial Operation Date at least three months prior to the
date when the first delivery of coal is required hereunder.

            4.3 Monthly Orders. On or before the 15th day of each month
beginning with the month preceding the month when the

                                      14
<PAGE>

first delivery of coal is required hereunder, Keystone shall give to Seller an
order ("Order") setting forth (i) the number of Shipments of coal to be
delivered by Seller during each week which begins during the following month,
not to exceed two Shipments in any week and (ii) the specific dates for delivery
of such Shipments which shall be spaced at least 60 hours apart. Keystone may
increase by one Shipment, and decrease without limitation, the number of
Shipments of coal to be delivered during any week by notifying Seller at least
seven days in advance of the beginning of such week, but the total number of
Shipments during any week shall not exceed two unless mutually agreed to by the
parties. Subject to seasonal variations in fuel requirements of the Facility,
Keystone will submit Orders for Shipments of coal in substantially equal numbers
of Shipments each month.

            4.4 First Delivery of Coal. Keystone may submit an Order for the
first delivery of coal hereunder and subsequent monthly Orders prior to the
first Operating Year for the purpose of the stockpiles described in Section 4.5
hereof, and for testing and startup purposes.

            4.5 Stockpiles. Keystone expects to establish a dead storage
stockpile of approximately 50,000 Tons of coal (in addition to a live storage
stockpile of approximately 10,000

                                      15
<PAGE>

Tons of coal) at the Facility. Keystone shall have the right to purchase, and
upon request Seller agrees to deliver, approximately 50,000 Tons of coal for
the dead storage stockpile pursuant to monthly Orders of Keystone pursuant to
Section 4.3.

            4.6 Coordination of Maintenance Periods. Keystone and Seller

acknowledge that the barge arranged for by Seller will not be available for coal
deliveries hereunder for up to four weeks during each Operating Year for
routine, annual maintenance and repair. Seller agrees to coordinate such
maintenance of the barge with the planned outages of the Facility. To facilitate
such coordination, Keystone agrees that each calendar year it will provide the
following periods of planned outages of the Facility for such maintenance: (i)
one period of not less than two consecutive weeks (a "Two-Week Outage") and
(ii) two additional periods of not less than one week (each a "One-Week
Outage") which need not be consecutive weeks. Keystone agrees to provide Seller
with at least six months' prior written notice of the specific dates of each
Two Week Outage and at least 60 days' prior written notice of the specific
dates of each One-Week Outage. Keystone and Seller agree that Seller shall have
no obligation to supply coal hereunder during any Two-Week Outage or any
One-Week Outage. Seller agrees, however, to use its best efforts to supply coal

                                      16
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

to the Facility during such periods if requested by Keystone, and Keystone
agrees to pay any incremental costs of supplying such coal (including, but not
limited to, the incremental costs associated with hiring a substitute barge to
deliver such coal).

            4.7 Testing Quantities and Burn Tests. Keystone shall have the right
to purchase between the Effective Date of this Agreement and the date upon which
the delivery of coal for Commercial Operation of the Facility actually
commences, and upon request Seller shall supply, up to [_ _ _ _] Tons of coal as
testing coal pursuant to monthly Orders of Keystone pursuant to Section 4.3.
Seller shall provide Keystone, without charge, up to [_ _ _ _] Tons of coal of
the quality to be supplied by Seller hereunder, delivered by truck within
300 miles of the Mines, for Keystone to conduct burn tests.

                                    ARTICLE V

                      POINT OF DELIVERY: METHOD OF DELIVERY

            5.1 Point of Delivery. The Point of Delivery shall be in barge or
vessel safely moored at Keystone's pier located in the Delaware River, available
for unloading. Title to the coal shall pass to Keystone immediately at the Point
of Delivery, and risk of loss shall follow passage of title.

                                      17
<PAGE>

            5.2 Method of Delivery. The coal shall be delivered to the Point of
Delivery by barge or vessel not to exceed 10,000 dead weight Tons in capacity
and a deepest draft of 20 feet, and compatible with Keystone's berthing and
unloading facilities as such facilities are represented and warranted by
Keystone pursuant to Section 13.2(d). Seller and its subcontractors shall be
responsible for arranging for all transportation from the mine mouth to the
Point of Delivery, shall pay all freight charges incurred and shall assume all
liability in connection with such transportation and delivery. Keystone will be
responsible for providing a safe berth and mooring equipment in accordance with
normal standards of the marine industry. Receiving and unloading facilities at
the Site shall be in accordance with the representations and warranties of
Keystone pursuant to Section 13.2(d). Keystone will be responsible for unloading
the coal pursuant to a discharge plan to be provided by the barge owner and
subject to the reasonable approval of Keystone.

            5.3 Lay Time. Seller shall allow Keystone Lay Time of one hour
for each 500 Tons of coal delivered. Lay Time shall commence upon the earlier of
(i) when Seller's barge or vessel is safely moored at Keystone's berth and the
barge operator gives notice of readiness to Keystone for unloading or (ii) when

                                      18
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

Seller's barge or vessel has arrived in the vicinity of Keystone's berth, and
the barge operator has given notice of readiness to Keystone, but is unable to
safely moor due to an obstruction at Keystone's berth not caused by Seller or
its subcontractors. Lay Time shall end when Keystone has (i) unloaded Seller's
barge or vessel so that no more coal, practicably recoverable by "bobcat" type
unloading machinery typically used for this purpose, remains in such barge or
vessel; and (ii) cleaned any spillage of coal on the exterior of such barge or
vessel which occurred during the unloading operations; and (iii) notified the
representative of the barge or vessel owner that the unloading operation is
complete.

            5.4 Demurrage. Demurrage at the rate of [_ _ _ _] per hour (as of
January 1, 1993) shall accrue for all time that exceeds the allowable Lay Time
as provided herein. The demurrage rate shall be reduced by [_ _ _ _] for that
period of time when a tug is not accompanying Seller's barge or vessel during
unloading operations; provided that if (a) Keystone has given notice to the
barge owner of the time when the barge will be unloaded, (b) the tug is ordered
to sail the barge from the Facility and (c) Keystone has not unloaded the barge
by the later of (i) the time stated in Keystone's notice to the barge owner and
(ii) the time that the tug arrives at the Facility,

                                      19
<PAGE>

then full demurrage shall apply unless Keystone shall have given Seller notice
to cancel the tug at least 24 hours prior to the tug's original sailing orders.
The demurrage rate shall be escalated each calendar year commencing January l,
1994, by the GDP Deflator provided however, that such escalation shall not be
more than 5% per year and any excess shall not be reflected in the price
adjustment in any succeeding year.

            5.5 Tie-Up Time. Keystone shall provide Seller's barge or vessel
additional tie-up time at the pier on a "mutually convenient" basis. Such
additional tie-up time shall not impede or make unsafe other dockside
activities. Seller shall be responsible for any additional costs and liabilities
as a result of the actions of Seller's employees, agents or subcontractors
associated with such additional tie-up time.

5.6 Time of Delivery. Keystone will make its delivery facilities available for
off loading of coal 24 hours per day, 7 days per week.

            5.7 Docking and Undocking. Keystone's personnel shall not be
required to board the barge or vessel at any time during docking or undocking of
the barge or vessel, however, Keystone's personnel or its agent will handle
mooring lines on dockside, under the direction of the tug's personnel, for

                                      20
<PAGE>

Seller's barge or vessel. Seller shall be liable for any damages to Keystone's
property as a result of the actions of Seller's employees, agents or
subcontractors and Keystone shall be liable for any damages to the barge or
vessel as a result of the actions of its employees, agents or subcontractors.

            5.8 Notices of Shipments. (a) On or before the 25th day of each
month beginning with the month preceding the month when the first delivery of
coal is required hereunder, Seller shall give to Keystone a schedule (a "Seller
Loading Notice") setting forth the dates for loading into rail cars each
Shipment of coal to be shipped to Keystone during such month (the "Load Dates").
At least 24 hours prior to each Load Date, Keystone may send to Seller a notice
instructing Seller either to proceed or not to proceed with the scheduled
loading of such Shipment (a "Keystone Loading Notice"). In the event that (i)
Keystone shall fail to deliver in a timely manner a Keystone Loading Notice
which instructs Seller not to proceed with a Shipment and (ii) an event of Force
Majeure shall delay the unloading of such Shipment by Keystone, then Keystone
shall be liable to Seller for all demurrage attributable to such delay, as
determined pursuant to Section 5.4. In the event that (i) Keystone shall fail to
deliver in a timely manner a Keystone Loading Notice which instructs Seller not
to proceed with a Shipment and (ii)

                                      21
<PAGE>

an event of Force Majeure shall prevent the unloading of such Shipment by
Keystone, then Keystone may cancel such Shipment and shall reimburse Seller for
all costs incurred by Seller in the transportation and discharge of such
Shipment, including but not limited to any rail or barge demurrage charges. If
within 72 hours of the arrival of a Shipment at the Facility, the unloading of
such Shipment by Keystone has not commenced or has commenced but has ceased
before completion due to Force Majeure at the Facility and Keystone has not
cancelled such Shipment, then Keystone shall advise Seller of its intended
disposition of such Shipment. If Keystone fails to notify Seller of such
disposition within 72 hours of the arrival of such shipment at the Facility, the
Shipment shall be deemed to have been cancelled by Keystone. If Keystone shall
cancel any Shipment pursuant to this Section 5.8(a), Seller shall cooperate with
Keystone and use all due diligence to mitigate costs of disposition of such
Shipment.

            (b) For each Shipment, Seller shall send Keystone a shipping notice
within 36 hours following loading thereof into rail cars at the Mines. The
shipping notice shall include the identification number, mine from which
supplied, estimated tonnage shipped, shipping date, scheduled date of delivery,
Rail Sample analysis pursuant to Section 10.3(a), and other

                                      22
<PAGE>

information reasonably required by Keystone. Bills of Lading shall include name
of Seller, contract number, identification number, date loaded and Seller's
shipped weights.

            (c) All notices pursuant to this Section 5.8 shall be sent by
telecopy or by other mutually agreed upon means.

            5.9 Notice of Insurance. Prior to commencing the first delivery of
coal, Seller shall provide Keystone with appropriate certificates of insurance
evidencing that Seller has obtained the insurance required pursuant to Section
17.1 hereunder, and that such insurance remains in effect. Prior to submitting
the first Order for delivery of coal, Keystone shall provide Seller with
appropriate certificates of insurance evidencing that Keystone has obtained the
insurance required pursuant to Section 17.4 hereunder, and that such insurance
remains in effect.

                                   ARTICLE VI

                                    QUALITY

            6.1 General Quality Provisions. Seller shall cause the mining and
loading of the coal to be conducted so that all coal loaded into rail cars at
the Mines shall be substantially free from impurities and extraneous materials
related to the mining and processing of coal. Seller represents and warrants

                                      23
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

that the quality of each Shipment of coal hereunder shall satisfy each Mine
Mouth Rejection Specification set forth in Section 6.2 and that the weighted
average quality of all coal delivered during any month hereunder shall satisfy
each Semi-Monthly Average Contract Specification set forth in Section 6.2.

            6.2 Rejection, Suspension and Contract Specifications. The "as
received" Mine Mouth Rejection Specifications, Semi-Monthly Average Suspension
Specifications, and Semi-Monthly Average Contract Specifications for coal
delivered hereunder shall be as follows:

<TABLE>
<CAPTION>
                                                         Semi-               Semi-
                                  Mine                  Monthly             Monthly
                                  Mouth                 Average             Average
                                Rejection             Suspension            Contract
      Characteristic              Specs                  Specs               Specs
---------------------------     ----------            -----------          ----------
<S>                             <C>                   <C>                  <C>
Calorific Value Btu/lb (HHV)    [_ _ _ _]             [_ _ _ _]            [_ _ _ _]

Sulfur (% wt.)                  [_ _ _ _]             [_ _ _ _]            [_ _ _ _]

Ash (% wt.)                     [_ _ _ _]             [_ _ _ _]            [_ _ _ _]

Moisture (% wt.)                [_ _ _ _]             [_ _ _ _]            [_ _ _ _]

Volatile Matter (% wt.)         [_ _ _ _]             [_ _ _ _]            [_ _ _ _]
</TABLE>

            Suspension Specifications for additional characteristics are set
forth in Section 6.6(a). A non-binding

                                      24
<PAGE>

example of the typical specification of the coal to be delivered under this
Agreement is set forth in Exhibit C. The typical coal specification set forth in
Exhibit C has been established for the purpose of determining the performance of
the Facility.

            6.3 Rejection of Coal. Any Shipment of coal which does not conform
to each Mine Mouth Rejection Specification as set forth in Section 6.2 shall be
deemed to be Rejection Point Coal. Seller shall take all practical precautions
to prevent delivering Rejection Point Coal to Keystone and shall not knowingly
deliver Rejection Point Coal to Keystone unless Keystone consents thereto on
terms mutually agreeable. Keystone may reject any Shipment of coal which is
Rejection Point Coal by notice to Seller by telephone, confirmed in writing. Any
such notice of rejection shall be given within 24 hours after receipt of the
Independent Laboratory's Rail Sample analysis of the Shipment of coal in
question pursuant to Section l0.3(a). In the event of a delay in the delivery of
the Independent Laboratory's Rail Sample analysis of a Shipment, Seller may
elect to proceed with the delivery of such Shipment on the basis of Seller's
Rail Sample analysis pursuant to Section 10.3(a); provided that the Independent
Laboratory's Rail Sample analysis of such Shipment shall be determinative of
Keystone's right to reject such Shipment. Keystone is not obligated to unload a

                                      25
<PAGE>

Shipment of coal until either (i) Keystone has received the Independent
Laboratory's Rail Sample analysis and such analysis satisfies the Rejection
Specifications set forth in Section 6.2, or (ii) Keystone has accepted such
Shipment. Keystone may not reject any Shipment of coal after it has accepted or
unloaded such Shipment. If a Shipment of Rejection Point Coal has reached the
Point of Delivery and has not been accepted or unloaded by Keystone, then Seller
shall cause such Shipment of Rejection Point Coal to be removed from the Point
of Delivery within three days after notice of such rejection, and Seller shall
be responsible for all costs of removal. If a Shipment of Rejection Point Coal
is rejected by Keystone, then Seller shall use its reasonable best efforts to
deliver a replacement Shipment of coal within seven days and be responsible for
all costs of delivery.

            6.4 Suspension of Shipments. If the weighted semimonthly average
quality analysis of all coal delivered during any month hereunder, as reported
by Seller to Keystone pursuant to Section 10.3(b), fails to conform to each
Semi-Monthly Average Suspension Specification as set forth in Section 6.2,
Keystone may suspend further Shipments by notice to Seller given within ten days
following receipt of Seller's report on quality pursuant to Section 10.3(b).
Such suspension shall apply to all

                                      26
<PAGE>

Shipments not in transit on the date of the notice of suspension and shall
continue until Seller provides adequate assurances that future Shipments will
conform to the quality specifications set forth in Section 6.2. If Seller has
not provided such adequate assurances within 10 days after receiving notice from
Keystone of the suspension of Shipments, then Seller shall have committed an
Event of Default as specified in Section 12.1(d) hereof.

            6.5 Replacement Coal. Keystone may purchase replacement coal in
reasonable purchase quantities to cover suspended or rejected Shipments under
the following circumstances, and in each case, Seller shall reimburse Keystone
for the excess of the costs reasonably incurred by Keystone in connection with
the purchase of replacement coal over the costs that otherwise would have been
incurred in connection with the purchase of coal under the terms of this
Agreement: (a) Seller fails to replace a Shipment of coal which has been
rejected by Keystone pursuant to Section 6.3 because it is Rejection Point Coal,
(b) Keystone has suspended further shipments by Seller pursuant to Section 6.4
or 6.6(a), or (c) Seller fails to deliver any Shipment of coal for reasons other
than Force Majeure within three days of the delivery date specified for such
Shipment pursuant to Section 4.3, provided that if Seller

                                      27
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

notifies Keystone of its intent to provide a replacement shipment of coal
pursuant to Section 6.3, such failure period shall be 7 days.

            6.6 Coal Handling or Operating Problems. (a) If Keystone experiences
any coal handling or operating problem at the Facility which Keystone reasonably
concludes is the result of Seller's delivering coal hereunder which has any of
the following characteristics: (i) [_ _ _ _] or more of coal delivered has a top
size greater than [_ _ _ _] inches, (ii) contains, on a semi-monthly average
basis, in excess of [_ _ _ _] coal of less than [_ _ _ _], (iii) a minimum
grindability (HGI) of [_ _ _ _], or (iv) a minimum ash fusion temperature of
[_ _ _ _](Degree)F (I.D. - Reducing), then Keystone may notify Seller of the
nature of such problem and the particular specification(s) which Keystone
reasonably concludes to be causing such problem. Unless Seller has provided
adequate assurances to Keystone within [_ _ _ _] days following receipt of such
notice that future deliveries hereunder will conform to the specifications set
forth in this Section 6.6(a), Keystone may, immediately upon a second notice to
Seller, suspend further Shipments including those in transit until Seller can
provide such adequate assurances. If Shipments are suspended, Seller shall
advise Keystone weekly of progress made toward correcting the deficiency. If
Seller has not provided such adequate

                                      28
<PAGE>

assurances to Keystone within 60 days following receipt of such notice of
suspension of Shipments, then Seller shall have committed an Event of Default as
specified in Section 12.1(d).

            (b) If Seller provides coal in compliance with this Agreement, and
such coal causes operating, mechanical or handling problems in the Facility,
Keystone and Seller agree to work together in good faith to resolve such
problems. Keystone shall notify Seller of the specific nature of such problems.
Seller agrees to provide advice and consultation on solutions for such problems
to the extent it can do so. Keystone agrees to make modifications to the
material handling or feed system of the Facility to minimize or eliminate such
problems to the extent it can do so at reasonable cost. In the event that
Keystone is unable to make reasonable cost modifications to the Facility to
resolve such problems, Seller agrees to modify the coal supplied hereunder to
minimize or eliminate such problems to the extent it can do so. If such problems
cannot be resolved to the reasonable satisfaction of Keystone within 150 days of
Keystone's notice to Seller concerning such problems, either party shall have
the right to terminate this Agreement upon 30 days' prior written notice of
termination to the other party.

            (c) If Seller provides coal in compliance with this Agreement, and
such coal causes Keystone to be unable to dispose

                                      29
<PAGE>

of ash due to constituents in the coal which results in the ash having
constituents which exceed the permitted levels set forth in Keystone's disposal
permits, Keystone and Seller agree to work together in good faith to resolve
such problem. Keystone shall notify Seller of the specific nature of such
problem, including the relevant permitted levels set forth in Keystone's
disposal permits. Seller agrees to provide advice and consultation on solutions
for such problem to the extent it can do so. Keystone agrees to make
modifications to the Facility to resolve such problem to the extent it can do so
at reasonable cost. If such problem cannot be resolved to the reasonable
satisfaction of Keystone within 120 days of Keystone's notice to Seller
concerning such problem, either party shall have the right to terminate this
Agreement upon 30 days' prior written notice of termination to the other party.

            6.7 Adjustment of Price for New Specifications. If Seller is to
provide coal conforming to new specifications agreed to by Seller and Keystone
as a result of adjustments made pursuant to Sections 6.6(b), 6.6(c) or
otherwise, the Base Price of coal shall be negotiated by Seller and Keystone in
good faith to reflect such adjustment to the new specifications. If the parties
are unable to reach agreement on a price adjustment, either party may terminate
this Agreement.

                                      30
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            6.8 Corrective Actions. Promptly following any suspension of
deliveries hereunder pursuant to Section 6.4 or Section 6.6(a), Seller shall
undertake corrective actions diligently and in good faith in order to provide
Keystone adequate assurances as required under such Sections. During the
continuance of any such suspension, Seller shall no less frequently than
once every week advise Keystone of Seller's determinations as to the nature of
the conditions causing such noncompliance with such specifications, all efforts
underway by Seller to correct such conditions, and the results of such efforts.

            6.9 Change in Law. If Keystone is unable to burn the coal supplied
hereunder without significant alteration of the Facility due to a change in
Applicable Laws resulting in a Force Majeure event, the parties shall negotiate
in good faith to agree upon a solution, but if no solution can be agreed upon
within 120 days, either party shall have the right to terminate this Agreement
upon 30 days' prior written notice to the other party.

            6.10 Testing of Coal with Volatility Less than [_ _ _ _]. During the
initial twelve months of Commercial Operation, or such longer period as may be
necessary to maintain boiler warranties in effect, Seller shall supply coal to

                                      31
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

Keystone having a volatility of not less than [_ _ _ _]. Thereafter, the parties
agree to conduct a testing program using coal having a volatility of less than
[_ _ _ _], but in no event less than [_ _ _ _], with a view to determining
whether the boiler can be satisfactorily operated using such coal. Keystone
shall consult with Seller during such tests, and shall promptly report the
results of the tests to Seller. Keystone shall determine the lowest volatility
coal [_ _ _ _] at which the boiler can be satisfactorily operated, and shall
promptly notify Seller of its determination, in which event the coal
specification in this Agreement shall be deemed modified to reflect the results
of the tests.

            6.11 EXCLUSIONS OF WARRANTIES. THE AGREEMENT AND EXPRESS WARRANTIES
CONTAINED IN SECTIONS 3.2, 6.1 AND 6.2 SHALL BE IN LIEU OF ANY OTHER WARRANTIES
BY SELLER, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                                   ARTICLE VII

                                      PRICE

            7.1 Base Price. The Base Price for coal with the quality defined as
Semi-Monthly Average Contract Specifications in Section 6.2 and delivered by
Seller to the Point of Delivery

                                      32
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

subsequent to the Commercial Operation Date is [_ _ _ _] per Ton, effective
January 1, 1993, for annual quantities of [_ _ _ _] Tons or less, and [_ _ _ _]
per Ton, effective January 1, 1993, for annual quantities greater than or equal
to [_ _ _ _] Tons. For annual quantities between [_ _ _ _] and [_ _ _ _] Tons,
the Base Price for coal shall be an amount per Ton determined by linear
interpolation between [_ _ _ _] and [_ _ _ _], effective January 1 1993. For
annual quantities between [_ _ _ _] and [_ _ _ _] Tons, the Base Price for coal
shall be an amount per Ton determined by linear interpolation between [_ _ _ _]
and [_ _ _ _], effective January 1, 1993. The Base Price for all coal delivered
prior to the Commercial Operation Date shall be [_ _ _ _] per Ton, effective
January 1, 1993. Commencing with the first full Operating Year and continuing
with each Operating Year thereafter, for annual quantities less than [_ _ _ _]
Tons, Keystone shall pay Seller a dedication fee (the "Dedication Fee") for each
Ton of the shortfall amount, unless such shortfall is a result of suspension or
rejection of deliveries pursuant to Sections 6.3, 6.4 or 6.6(a), an event of
Force Majeure, or termination of this Agreement in accordance with its terms.
Effective as of January 1, 1993, the Dedication Fee shall be [_ _ _ _] per Ton
of the shortfall amount and shall be escalated each calendar year thereafter by
the GDP Deflator, provided however, that such escalation shall not be more than
[_ _ _ _] per year and any excess

                                      33
<PAGE>

shall not be reflected in the price adjustment in any succeeding year.

            7.2 Escalation of Base Price. From January 1, 1993 through the
expiration of the Initial Term or any Extended Term of this Agreement, the Base
Price for Coal delivered by Seller to the Point of Delivery shall be adjusted on
an annual basis by the Base Escalator pursuant to Section 7.3 or, if applicable,
the New Base Escalator or other escalator determined pursuant to Section 7.6.

            7.3 Base Escalator. The Base Escalator is defined in Article
5.1B(ii) of the Agreement for Purchase of Electric Power between Atlantic
Electric and Keystone attached hereto as Exhibit D; provided that the term
"bituminous coal" referred to therein shall have the meaning set forth in
Section 7.5 hereof. Pursuant to the provisions of the Agreement for Purchase of
Electric Power, the Base Escalator will be established by Atlantic Electric and
reported to Keystone in the first quarter of each calendar year. The first Base
Escalator adjustment shall occur in 1994. The value of the Base Escalator
established for a calendar year will be applied to all coal delivered during
that calendar year.

                                       34
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            7.4 Adjustment of Price for Sulfur Content. The Base Price of coal
shall be adjusted for changes in the annual average of the sulfur content of
bituminous coal (as defined in Section 7.5) used by New Jersey utilities as
follows:

<TABLE>
<CAPTION>
Annual Average          Price             Price
Sulfur Content      Reduction/Ton     Increase/Ton
--------------      -------------     ------------
<S>                 <C>               <C>
0-0.5%                  [_ _ _ _]        [_ _ _ _]
0.5-0.6%                [_ _ _ _]        [_ _ _ _]
0.6-0.7%                [_ _ _ _]        [_ _ _ _]
0.7-0.8%                [_ _ _ _]        [_ _ _ _]
0.8-0.9%                [_ _ _ _]        [_ _ _ _]
0.9-1.5%                [_ _ _ _]        [_ _ _ _]
1.5-1.6%                [_ _ _ _]        [_ _ _ _]
1.6-1.7%                [_ _ _ _]        [_ _ _ _]
1.7-1.8%                [_ _ _ _]        [_ _ _ _]
1.8-1.9%                [_ _ _ _]        [_ _ _ _]
1.9% and greater        [_ _ _ _]        [_ _ _ _]
</TABLE>

The Price Reduction and Price Increase rates for changes in the average annual
sulfur content in the coal shall be effective as of January 1, 1993 and shall be
adjusted each calendar year by the GDP Deflator, provided however, that such
adjustment shall not be more than [_ _ _ _] per year and any excess shall not be
reflected in the price adjustment in any succeeding year.

            7.5 Bituminous Coal. The annual average cost of bituminous coal (for
purposes of the Base Escalator) and sulfur content (for purposes of Section 7.4)
shall be based on the Form 423 reports filed with FERC by New Jersey utilities
reporting the annual average cost of bituminous coal used by such New Jersey
utilities. For purposes of this Agreement "bituminous

                                       35
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

coal" as reported by New Jersey utilities on FERC Form 423 shall mean bituminous
coal with the following quality specifications:

<TABLE>
<CAPTION>
Bituminous Coal Parameter     As Received Ranges
-------------------------     ------------------
<S>                           <C>
Heating Value, Btu/Lb         [_ _ _ _]
Ash Content, %                [_ _ _ _]
Sulfur Content, %             [_ _ _ _]
</TABLE>

            7.6 New Base Escalator. (a) If during the Initial Term or any
Extended Term of this Agreement the Base Escalator as defined in Article
5.1B(ii) of the Agreement for Purchase of Electric Power between Atlantic
Electric and Keystone is no longer effective and a new Base Escalator is
established by Atlantic Electric and agreed to by Keystone as the new Base
Escalator (the "New Base Escalator") applicable to the Agreement for Purchase of
Electric Power, then, subject to the provisions of Section 7.6(b) below, such
New Base Escalator shall apply to this Agreement for the calculation of the Base
Price of coal. Subject to Section 7.6(b) below, the New Base Escalator shall
apply from the date the existing Base Escalator is no longer effective.

            (b) Keystone agrees to notify Seller promptly of the
non-effectiveness or significant risk of non-effectiveness of the existing Base
Escalator. Keystone further agrees to keep Seller informed as to the status and
content of its negotiations with Atlantic Electric to establish the New Base
Escalator.

                                       36
<PAGE>

Keystone shall give good faith consideration to any suggestions or objections
raised by Seller concerning the proposed terms of the New Base Escalator. In the
event that Keystone and Atlantic Electric agree to a New Base Escalator and
Seller believes that it will suffer a gross inequity because of the adverse
effect such New Base Escalator will have on determining the escalations of the
Base Price, then, within 10 days of receipt of a written notice from Seller,
Keystone shall negotiate in good faith with Seller to establish a basis other
than the New Base Escalator for providing reasonable escalation to the Base
Price for the remaining term of this Agreement from the date that the Base
Escalator is no longer effective. The new basis for providing a reasonable
escalation to the Base Price as agreed to by the parties shall be a 100%
bituminous coal (as defined in Section 7.5) based escalator. If after 30 days of
negotiations the parties are unable to agree on a new basis for providing a
reasonable escalation, Seller may submit such matter to arbitration pursuant to
Article XVIII and the arbitrator shall be directed to develop a 100% bituminous
coal (as defined in Section 7.5) based escalator comparable to such escalators
used by utilities in the New Jersey region for coal fired power plants.

                                       37
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            7.7 Government Imposition. If any change in any current non-federal
Applicable Law or the existence of a new non-federal Applicable Law (any such
change or new non-federal Applicable Law is referred to herein as a "Government
Imposition") shall result in an increase in the cost to Seller of the mining,
processing or transporting of coal hereunder, then Keystone shall reimburse
Seller for 50% of Seller's increased costs resulting from such Government
Imposition. Such extra costs will be billed separately and shall be accompanied
by reasonable documentary evidence supporting the extra costs.

                                  ARTICLE VIII

                PREMIUMS AND PENALTIES FOR VARIATIONS IN QUALITY

            8.1 Calculation and Billing of Premiums and Penalties. Premiums and
penalties shall apply to all coal delivered under this Agreement based upon the
semi-monthly average analysis of coal as determined pursuant to Section 10.3(b).
Premiums and penalties shall be calculated at the end of each Billing Period
based upon a comparison with the Semi-Monthly Average Contract Specifications
set forth in Section 6.2.

            8.2 Premiums and Penalties for Calorific Value. The Base Price is
based on coal with a calorific value of [_ _ _ _] Btu

                                       38
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

per pound. If the actual semi-monthly average calorific value of all coal
delivered in any Billing Period is greater or less than [_ _ _ _] Btu per pound,
then a premium or penalty shall be determined in accordance with the following
formulae:

                     [_ _ _ _]
            Penalty = ----- [_ _ _ _]
                     [_ _ _ _]

                     [_ _ _ _]
            Premium = ----- [_ _ _ _]
                     [_ _ _ _]

            Where:

            [_ _ _ _]

            [_ _ _ _]

            [_ _ _ _]

            [_ _ _ _]

            8.3 Premiums and Penalties for Ash. The Base Price is based on coal
with an ash content of [_ _ _ _]. If the actual semimonthly average ash content
of all coal delivered in any Billing Period is [_ _ _ _], then a premium or
penalty shall be determined in accordance with the following formula:

                                       39
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                     [_ _ _ _]
            Penalty = ----- [_ _ _ _]
                     [_ _ _ _]

                     [_ _ _ _]
            Premium = ----- [_ _ _ _]
                     [_ _ _ _]

            Where:

            [_ _ _ _]

            [_ _ _ _]

            [_ _ _ _]

            [_ _ _ _]

            8.4 Premiums and Penalties for Sulfur. Seller expects to deliver
coal with a sulfur content of approximately [_ _ _ _]. If the average
semi-monthly sulfur content of the delivered coal during any billing period is
[_ _ _ _], Keystone shall pay Seller a premium of [_ _ _ _] per Ton [_ _ _ _]
that the average semi-monthly sulfur content is [_ _ _ _] during such billing
period. If the sulfur content of any delivered coal is [_ _ _ _], Keystone may
reject the coal in accordance with Section 6.3 of this Agreement. The [_ _ _ _]
Ton premium shall be effective as of January 1, 1993 and shall be escalated each
calendar year by the GDP Deflator provided however, that such escalation shall
not exceed [_ _ _ _] per year and

                                       40
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

any excess shall not be reflected in the price adjustment in any succeeding
year. The [_ _ _ _] per Ton premium is based upon an estimated Ash Disposal
Price of not less than [_ _ _ _]Ton effective January 1, 1991. An example of the
calculation used to determine the adjustment of the premium is attached hereto
as Exhibit E.

                                   ARTICLE IX

                               BILLING AND PAYMENT

            9.1 Billing. For purposes of this Agreement, Seller shall submit
invoices for coal delivered to Keystone on the basis of a semi-monthly Billing
Period. A Billing Period shall consist of that period of days from the [_ _ _ _]
to the [_ _ _ _] of each month, or the [_ _ _ _] to the [_ _ _ _] of each month.
Seller shall submit to Keystone an invoice by the [_ _ _ _] and [_ _ _ _] of
each month for all coal delivered to the Point of Delivery at the Facility and
accepted by Keystone during the preceding Billing Period. Seller may submit
invoices to Keystone by fax. Each semi-monthly invoice shall be itemized by
Shipment and show (i) the quantity of coal delivered during the Billing Period,
(ii) the Base Price (including any adjustments pursuant to Sections 7.4, or
7.6), (iii) the semi-monthly average analysis of coal delivered during the
Billing Period as determined pursuant to Section 10.3(b), (iv) premiums and
penalties for variations in

                                       41
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

quality as provided for in Article VIII, and (v) the supporting calculations. If
any revision of the Base Price is in process, invoicing shall be made on the
basis of the existing Base Price, and appropriate retroactive adjustments shall
be made when the new Base Price has been calculated. For invoicing purposes, the
parties agree that the Base Price during the initial Operating Year shall be
calculated on the basis of [_ _ _ _] tons; for each subsequent Operating Year,
the Base Price shall be calculated on the basis of the greater of an annual
quantity of [_ _ _ _] tons or the previous year's quantity until the earlier of
(i) the date on which Seller shall have delivered [_ _ _ _] tons of coal in such
Operating Year or (ii) the end of such Operating Year (the earlier of such dates
being the "Annual Quantity Determination Date"). As soon as practicable
following the Annual Quantity Determination Date, (i) Seller shall credit
Keystone for the aggregate amount, if any, by which the Base Price actually
invoiced by Seller during such Operating Year exceeded the Correct Base Price,
or (ii) Keystone shall pay to Seller the aggregate amount, if any, by which the
Correct Base Price exceeded the amount actually paid by Keystone pursuant to
invoice from Seller. An example of the calculations used for the computation of
the Base Price and any premiums or penalties is attached hereto as Exhibit E.

                                       42
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            9.2 Payment. Keystone shall pay Seller amounts due as shown on
invoices rendered pursuant to Section 9.1 hereof no later than [_ _ _ _] days
after receipt of an invoice. If the payment due date falls on a Saturday, Sunday
or holiday, the payment will be due on the preceding business day. Payments
shall be made by wire transfer in immediately available funds to Seller's
account at a bank designated by Seller. In the event part or all of a payment is
not made when due, interest shall accrue and be payable on the overdue amount at
a rate equal to the daily Prime Rate Plus [_ _ _ _], as published by the Mellon
Bank (East) in Philadelphia, for the number of days that payment is late.

            9.3 Disputed Invoices. Keystone shall pay the full amount of each
invoice except for disputed amounts. Subject to Section 18.2, Keystone shall not
be obligated to pay any portion of an invoice which it, in good faith, believes
is in dispute. In such case, on or before that payment is due, Keystone shall
notify Seller in writing of its reasons for disputing an invoice amount, or its
reason for believing such portion of an invoice to be in dispute. If Keystone is
determined to be in error regarding a disputed amount, Keystone shall pay such
withheld amount immediately upon such determination, together with interest at
the rate specified in Section 9.2.

                                       43
<PAGE>

            9.4 Records of Seller. Seller shall maintain complete and accurate
records to support all invoices submitted pursuant to Section 9.1 hereof.
Keystone shall have the right, upon reasonable prior notice, to inspect and
review at Seller's offices any such records at any reasonable time for the
purpose of verifying the correctness of any invoice submitted by Seller to
Keystone, any adjustment to the Coal Price and any calculation of premiums and
penalties for variations in quality.

                                    ARTICLE X

                         WEIGHING, SAMPLING AND ANALYSIS

            10.1 Weighing. The weights of coal delivered hereunder shall be
determined by the use of certified scales maintained by the railroad
transporting the coal to Seller's barge or vessel loading facility. Seller shall
arrange with the transporting railroad to weigh the coal pursuant to a procedure
developed by Seller and the railroad and approved by Keystone. Seller and
Keystone may be present during such weighings, and the railroad weights shall be
final and binding on both Seller and Keystone. In the event Seller installs
certified scales which meet the railroad's requirements and the railroad no
longer weighs Seller's shipments to Keystone, the weights of coal delivered
hereunder shall be determined by the use of Seller's certified scales so long as
Seller weighs the coal

                                       44
<PAGE>

pursuant to a procedure approved by Keystone which approval shall not be
unreasonably withheld. The weights that are determined in the manner set forth
above will be binding on both Keystone and Seller.

            10.2 Sampling. Seller shall take a representative sample of coal
contained in each shipment at the time the coal is loaded into rail cars (the
"Rail Sample") and the Independent Laboratory shall take a representative sample
at the time the coal is transferred from the rail cars into the barge or vessel
(the "Barge Sample"). Each Rail Sample and Barge Sample shall be taken using a
mechanical sampling system taking full stream increments. Each Rail Sample and
Barge Sample for a Shipment from the mechanical sampler shall be divided into
three parts, and each part shall be placed into an airtight container and
suitably labeled. With respect to each Rail Sample, one part shall be delivered
to the Independent Laboratory for analysis by the Independent Laboratory in
accordance with ASTM Methods D-2234 and D-2013 or such other methods as may
reasonably be agreed upon by the parties; one part shall be retained by Seller
for its own analysis; and the third part shall be delivered to and retained by
the Independent Laboratory for a period of 45 days from the date of sampling for
referee analysis pursuant to Section 10.4. With respect to each Barge Sample,
one part shall

                                       45
<PAGE>

be retained by the Independent Laboratory for analysis by the Independent
Laboratory in accordance with ASTM Methods D-2234 and D-2013 or such other
methods as may reasonably be agreed upon by the parties; one part shall be
retained by the Independent Laboratory for analysis upon the request of either
party at the expense of the requesting party; and the third part shall be
retained by the Independent Laboratory for a period of 45 days from the date of
sampling for referee analysis pursuant to Section 10.4. Either party shall have
the right to have a representative present at any and all times to observe the
sampling and sample preparation hereunder and to obtain sample splits for check
purposes.

            10.3 Analysis. (a) The Independent Laboratory shall analyze its part
of each Rail Sample at the expense of Seller. The analysis of each Rail Sample
for moisture, ash, sulfur, volatile matter and calorific value shall be reported
by the Independent Laboratory to Keystone and Seller by telecopier within
36 hours following the loading of such Shipment. If Seller or Keystone disputes
any Rail Sample analysis made by the Independent Laboratory, then the
Independent Laboratory shall perform a referee analysis of such Rail Sample
pursuant to Section 10.4. The Independent Laboratory's Rail Sample analysis

                                       46
<PAGE>

shall be used to determine Keystone's right to reject coal pursuant to Section
6.3.

            (b) The Independent Laboratory shall analyze its part of each Barge
Sample at the equal and shared expense of Seller and Keystone. The analysis of
such Barge Sample for moisture, ash, sulfur, volatile matter and calorific value
shall be reported by the Independent Laboratory by telecopier to Keystone and
Seller within 24 hours following the loading of such Shipment. If Seller or
Keystone disputes any Barge Sample analysis made by the Independent Laboratory,
then the Independent Laboratory shall perform a referee analysis of such Barge
Sample pursuant to Section 10.4. The Independent Laboratory's Barge Sample
analysis shall be determinative of coal quality under this Agreement and shall
govern for billing and payment purposes unless superseded pursuant to the
provisions of Section 10.4.

            As soon as practicable following the end of each Billing Period,
Seller shall provide to Keystone a report of the semi-monthly average analysis
of each of the characteristics listed in Section 6.2 for all coal delivered
hereunder during each Billing Period, which analysis shall be based upon the
Independent Laboratory's Barge Sample analysis of such coal.

                                       47
<PAGE>

            10.4 Referee Analysis. The Independent Laboratory shall perform the
referee analysis of any disputed Rail Sample analysis or Barge Sample analysis
made by the Independent Laboratory or by Seller. The parties will agree to
designate an alternate Independent Laboratory if for any reason the first named
Independent Laboratory is unavailable or becomes unacceptable to either party.
With respect to the characteristics of the coal in dispute, the analysis in
dispute shall be deemed to have been confirmed if the difference between the
referee analysis of the Independent Laboratory and the disputed analysis is
within the tolerance as specified within the applicable ASTM standards. If the
disputed analysis is so confirmed, then all costs of such referee analysis shall
be borne by the party initiating the referee analysis. If a disputed analysis is
not so confirmed, then such analysis shall be superseded by the referee analysis
of the Independent Laboratory, and all costs of such referee analysis shall be
shared equally by the parties.

                                   ARTICLE XI

                                  FORCE MAJEURE

            11.1 Definition of Force Majeure. The term "Force Majeure" shall
mean any cause or event beyond the reasonable control of either party causing a
failure or delay of that party

                                       48
<PAGE>

in performing any obligation hereunder, which events shall include, but are not
limited to: drought, flood, earthquake, storm, fire or lightning; epidemic; acts
or failure to act of local, state, federal or civil government; war or its
cessation; riot, disturbance or sabotage; acts of terrorism; nuclear emergency
or other cataclysmic occurrences; labor shortage, strikes or similar labor
difficulty and interruptions; area-wide rail, barge or vessel shortage, or other
interruptions to transportation (including obstruction of the Chesapeake and
Delaware Canal); authorized diversion or confiscation of coal; accidents;
breakdowns of or damage to plant, equipment or facilities; forced outages at the
Facility; failure of Atlantic City Electric Company to perform its obligations
under the Agreement for Purchase of Electric Power; failure of Monsanto Chemical
Company to perform its obligations under the Electric Power Sales Agreement or
Steam Supply Agreement; failure of a third party to perform under any material
contract related to the Facility and to which Keystone is a party; perils of the
sea; or other such causes, whether of like or dissimilar nature, whether or not
foreseen or foreseeable by either or both of the parties, which wholly or
partially hinders, prevents, interrupts or delays (i) the production, loading,
unloading, transportation, sampling, analysis or delivery of the coal by Seller
or its subcontractors, (ii) the receiving, unloading,

                                       49
<PAGE>

storing or burning of the coal by Keystone or its subcontractors, or (iii)
otherwise prevents, interrupts, hinders or delays the performance of a party's
obligations hereunder. The term Force Majeure shall specifically include the
inability of Keystone to burn the coal supplied hereunder in the Facility
without significant alteration of the Facility or installation of additional
significant equipment in order to comply with changes in Applicable Laws. The
term Force Majeure shall not include any market driven forces such as: scarcity
of commodities; increased transportation cost; costs of inventory; outages at
Keystone's Facility resulting from economic dispatch; or other economic factors
faced by Seller or Keystone.

            11.2 Consequence of Force Majeure. A party's performance of its
obligations hereunder, except obligations to make payments of money already due
to the other party hereunder prior to the occurrence of the Force Majeure event,
shall be excused to the extent prevented, interrupted, hindered or delayed by a
Force Majeure event. In case of reduction of Seller's output and consequent
inability to deliver or reduction of Keystone's ability to accept delivery of,
or to consume coal, resulting from an event of Force Majeure, Seller and
Keystone shall endeavor, upon request of the other, to continue the delivery and
acceptance, respectively, of substantially the same

                                       50
<PAGE>

proportion of their respective production and consumption as so reduced.
Deficiencies in the quantity of coal delivered hereunder due to a Force Majeure
event shall not be made up except by mutual agreement of Keystone and Seller.
The party claiming excuse because of a Force Majeure event shall give notice by
telephone to the other party immediately upon becoming aware of such event, with
such notice confirmed in writing as soon as practicable thereafter under the
circumstances. Such notice to the other party shall describe the circumstances
of the event or cause giving rise to the claim of Force Majeure and the
anticipated duration thereof. During the existence of any Force Majeure event
preventing delivery of coal by Seller, Keystone shall have the right to purchase
and utilize replacement coal from other suppliers in a quantity which bears a
commercially reasonable relation to the quantity which would have been delivered
to Keystone but for such Force Majeure event. Keystone, at its sole discretion,
shall give Seller the opportunity to bid on the supply of such replacement coal
and, within fifteen days, to match the terms offered by such other suppliers.
During the existence of any Force Majeure event preventing utilization of coal
by Keystone, Seller shall have the right to sell coal dedicated to Keystone to
third parties in a quantity which bears a commercially reasonable relation to
the

                                       51
<PAGE>

quantity which would have been delivered to Keystone but for such Force Majeure
event.

            11.3 Events Beyond Control of a Party. As used in Section 11.1, an
event shall be deemed to be beyond the control of the party claiming excuse if
such party is unable to avoid or overcome such event despite the exercise of due
diligence. A strike or other labor dispute shall be deemed to be beyond the
control of the party whose performance is interrupted or prevented by such
strike or labor dispute, and the settlement of such strike or labor dispute
shall be at the sole discretion of such party. Economic hardship, by itself,
experienced by a party in carrying out its obligations hereunder shall not be
deemed to be an event beyond the control of such party. Subject to the
foregoing, a party claiming excuse by reason of a Force Majeure event shall
exercise commercially reasonable good faith efforts to remedy or overcome such
event as soon as practicable under all the circumstances. In the event that the
parties are unable in good faith to agree that a Force Majeure event has
occurred, the parties shall submit the dispute for arbitration pursuant to
Article XVIII, and the burden of proof as to whether an event of Force Majeure
has occurred shall be upon the party claiming an event of Force Majeure.

                                       52
<PAGE>

            11.4 Termination for Force Majeure. If either party believes an
event of Force Majeure which excuses performance of either party hereunder is
likely to be permanent (i.e., it is likely to continue for a period exceeding
one year), such party may notify the other party of such belief. Such notice
shall state the reasons for the belief that the event of Force Majeure will be
permanent and why there are no steps which can be taken at a commercially
reasonable cost to eliminate such Force Majeure event. The party receiving such
notice shall respond within ten days stating either (i) that it concurs that the
Force Majeure event is likely to be permanent, or (ii) that it disagrees that
such Force Majeure event is likely to be permanent and its reasons therefor.
Unless otherwise mutually agreed, this Agreement shall be terminated if both
parties concur that the Force Majeure event is likely to be permanent.

                                   ARTICLE XII

                              DEFAULT AND REMEDIES

            12.1 Events of Default. An event of default ("Default") under this
Agreement shall be deemed to exist upon the occurrence of any one or more of the
following events:

            (a) Failure by either party to make payment of any amount due the
other party under this Agreement, which failure

                                       53
<PAGE>

continues for a period of five days after receipt of written notice of such
nonpayment (unless Payment of such amount is contested or otherwise disputed in
accordance with the provisions of this Agreement);

            (b) Subject to the following sentence, failure by Seller to deliver
to Keystone during any month two or more Shipments of coal within five days of
the dates specified in the Order(s) for such Coal, unless excused by Force
Majeure. A Default shall be deemed to have occurred if, after a Notice of
Default, Seller has failed to deliver such coal within ten days and has failed
to provide adequate assurances to Keystone within such cure period that such
failure will not be repeated.

            (c) Failure by Seller to meet Orders from Keystone aggregating
20,000 Tons or more in any one month, unless excused by Force Majeure.

            (d) Failure by Seller to provide adequate assurances as required in
connection with any provision of this Agreement within ten days after notice of
such failure.

            (e) Failure of either party to perform any other covenant, agreement
or undertaking provided for in this Agreement or breach of any representation or
warranty of either party which has a material adverse effect on the other party,

                                       54
<PAGE>

and (i) such failure or breach continues for 30 days after notice of such
failure or breach or (ii) if the nonperforming party shall commence within such
30 days and shall thereafter proceed with all due diligence to cure such failure
or breach, such failure or breach is not cured within such longer period (not to
exceed 30 days) as shall be necessary for such party to cure the same with all
due diligence.

            (f) An assignment of this Agreement which is not permitted or
consented to pursuant to Section 16.1.

            (g) The bankruptcy or insolvency of either party.

            12.2 Remedies for Default. Upon the occurrence and during the
continuance of Default hereunder, the party not in Default shall be entitled,
without limitation, to any of the following remedies:

            (a) To terminate this Agreement by written notice upon the
expiration of any applicable cure period or period prescribed for provision of
adequate assurances.

            (b) Upon a showing that its remedy at law is inadequate, to obtain
an order compelling specific performance of this Agreement and injunctive relief
restraining any actual or threatened breach of any material obligation of the
other

                                       55
<PAGE>

party under this Agreement without the necessity for filing any bond.

            (c) To purchase replacement coal as provided in Section 6.5.

            12.3 Waiver of Default. Either party may waive a Default by the
other party, provided that no such waiver shall be binding unless reduced to
writing, and any such waiver shall be deemed to extend only to the particular
occurrence of Default waived and shall not limit or otherwise affect any rights
that either party may have with respect to any prior or subsequent Default.

            12.4 Cumulative Remedies. None of the remedies provided in this
Agreement is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to herein or otherwise available to either
party at law or in equity.

            12.5 No Consequential Damages. Notwithstanding anything in this
Agreement to the contrary, neither party shall be liable for consequential
damages by virtue of its breach of any of its obligations, representations or
warranties hereunder.

                                       56
<PAGE>

                                  ARTICLE XIII

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

            13.1 Seller's Representations and Warranties. In addition to the
representations and warranties set forth elsewhere in this Agreement, Seller
hereby represents and warrants to Keystone as follows:

            (a) Seller is a corporation duly organized and in good standing
under the laws of the State of Delaware and has been duly authorized by all
requisite corporation action to execute and deliver this Agreement. Seller
further represents that it is not involved in any litigation with any party
which would jeopardize or impair Seller's ability to perform this Agreement.

            (b) The person executing and delivering this Agreement on Seller's
behalf is acting pursuant to proper authorization, and this Agreement is the
valid and binding obligation of Seller and is enforceable in accordance with its
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).

                                       57
<PAGE>

            (c) Neither the execution and delivery by Seller of this Agreement
nor the consummation by Seller of the transactions contemplated hereby is an
event which, of itself or with the giving of notice or the passage of time or
both, constitutes a violation of or will conflict with or result in any material
breach of or any default under the terms, conditions or provisions of any
judgement, law, rule or regulation to which Seller is subject, or of Seller's
organizational documents, or of any agreement or instrument to which Seller is a
party or by which it is bound.

            13.2 Representations and Warranties of Keystone. In addition to the
representations and warranties set forth elsewhere in this Agreement, Keystone
hereby represents and warrants to Seller as follows:

            (a) Keystone is a limited partnership organized, validly existing
and in good standing under the laws of Delaware with full power and authority to
enter into this Agreement. Keystone further represents that it is not involved
in any litigation with any party which would jeopardize or impair its ability to
perform this Agreement.

            (b) The persons executing and delivering this Agreement on
Keystone's behalf are acting pursuant to proper

                                       58
<PAGE>

authorization and this Agreement is the valid and binding obligation of Keystone
and is enforceable in accordance with its terms.

            (c) Neither the execution and delivery by Keystone of this Agreement
nor the consummation by Keystone of the transactions contemplated hereby is an
event which, of itself or with the giving of notice or the passage of time or
both, constitutes a violation of or will conflict with or result in any material
breach of or any default under the terms, conditions or provisions of any
judgment, law, rule or regulation to which Keystone is subject, or of Keystone's
organizational documents, or of any agreement or instrument to which Keystone is
a party or by which it is bound.

            (d) The berthing and unloading facilities at the Facility will not
require specially designed barges and will be located where a tug and a barge up
to 450 feet in length laden to a draft of 20 feet can approach, lie alongside
and depart always safely afloat under extreme low tide conditions or in adverse
weather. The berthing and unloading facilities will be designed and constructed
to withstand the normal forces occurring during the docking, mooring, shifting
and unloading of barges carrying no more than 10,000 short tons of coal. The
berthing and unloading facilities shall have a barge haul system

                                       59
<PAGE>

of sufficient size to move and stop barges safely beneath the unloader and
controlled by Keystone.

            13.3 Special Covenants of Seller. In addition to all other covenants
of Seller made herein, Seller hereby covenants and agrees as follows:

            (a) Seller covenants and agrees with Keystone that all coal sold by
Seller pursuant to this Agreement will be delivered by Seller free from all
liens (except carriers' liens) and adverse claims.

            (b) Seller will own, lease or control sufficient quantities of
specified coal to meet the delivery requirements of this Agreement over the
specified Term.

            (c) Seller's affiliates will obtain and maintain all Permits
necessary to mine and deliver the quantity of coal required to meet its
obligations for the Term of this Agreement.

            13.4 Special Covenants of Keystone. In addition to all other
covenants of Keystone made herein, Keystone hereby covenants and agrees as
follows:

            (a) Keystone will pay Seller for coal delivered and accepted and no
longer subject to dispute, before payment by Keystone on senior debt.

                                       60
<PAGE>

            (b) Keystone shall obtain and have in effect all Permits necessary
for the delivery, off-loading and utilization of coal.

            (c) Keystone shall give representatives of the barge owner
reasonable access to all engineering plans and drawings for the berthing and
unloading facilities at the Facility and all such plans shall be subject to the
reasonable approval of such representatives for compatibility with the barges
and the requirements of safe navigation.

            (d) Keystone will maintain the berthing and unloading facilities at
the Facility as warranted in this Agreement, and will not alter such facilities
without prior notice to Seller and the barge owner.

            (e) In the event that (i) Keystone shall have failed to notify
Seller prior to January 1, 1993 that Seller should direct its barge carrier not
to proceed with modifications to the barge which will transport coal to be
delivered hereunder and (ii) either the Commercial Operation Date shall not have
occurred by January 1, 1996 or Keystone shall have notified Seller to direct its
barge carrier to stop the modifications to the barge (the earlier of such dates
is referred to herein as the "Stop Date"), then Keystone shall reimburse Seller
for all

                                       61
<PAGE>

costs to Seller of such barge modifications, together with the cost of returning
the barge to serviceable condition using the least expensive alternative. If the
Stop Date shall occur prior to the completion of the barge modifications, as
evidenced by the barge carrier's cancellation schedule (a copy of which shall be
delivered to Keystone prior to commencement of the barge modifications), then
Keystone's reimbursement obligation to Seller hereunder shall be limited to the
barge modification costs to Seller through the next cancellation date following
the Stop Date as indicated on such cancellation schedule, together with the cost
of returning the barge to serviceable condition using the least expensive
alternative. Seller shall provide Keystone with reasonable documentary evidence
of all barge modification costs for which it claims reimbursement.

                                   ARTICLE XIV

                                 INDEMNIFICATION

            14.1 Seller Indemnity. Seller agrees to defend, indemnify and hold
harmless Keystone, its partners and affiliates and all officers, directors,
employees and agents thereof, from and against any and all liabilities
(including third party liabilities), lawsuits, claims, damages, losses, fines,
penalties and assessments by any public agency, costs and expenses (including
costs and expenses of defense, settlement

                                       62
<PAGE>

and reasonable attorneys' fees), which are incurred or brought as a result of
any negligent or willful act or omission of Seller, its agents, employees,
representatives, contractors or subcontractors associated with, or arising from,
the performance by Seller of its obligations under this Agreement, including
such matters arising in connection with the docking, unloading or undocking of
the vessel.

            14.2 Keystone Indemnity. Keystone agrees to defend, indemnify and
hold harmless Seller and its affiliates and all officers, directors, employees
and agents thereof, from and against any and all liabilities (including third
party liabilities), lawsuits, claims, damages, losses, property damage, fines,
penalties and assessments by any public agency, costs and expenses (including
costs and expenses of defense, settlement and reasonable attorneys' fees), which
are incurred or brought as a result of any negligent or willful act or omission
of Keystone, its agents, employees, representatives, contractors or
subcontractors associated with, or arising from, the performance by Keystone of
its obligations under this Agreement, including such matters arising in
connection with the docking, unloading or undocking of the vessel.

            14.3 Indemnity for Warranties and Other Matters. With respect to or
arising out of any breach by a party of its

                                       63
<PAGE>

warranties, representations or covenants hereunder, such party shall indemnify
and hold the other party and its successors, assigns, partners, employees,
contractors, subcontractors and agents harmless from and against all damages,
losses or expenses suffered or paid as a result of any and all claims, demands,
suits, penalties, causes of action, proceedings, judgments, administrative and
judicial orders and liabilities (including costs of defense, settlement and
reasonable attorneys' fees) assessed, incurred or sustained by or against such
other party and its successors, assigns, partners, employees, contractors,
subcontractors and agents.

            14.4 Effect of Indemnification. The indemnification provided for in
this Article XIV shall not provide an alternative remedy for any deficiencies in
the quality of coal delivered hereunder or for any liabilities, damage or losses
which are expressly addressed in any other Article or Section of this Agreement;
the remedies expressly provided for in such other Article or Section of this
Agreement shall, to the extent applicable, govern the rights and obligations of
the parties instead of the remedies provided for in this Article XIV.

            14.5 Notice and Legal Defense. Promptly upon receipt by a party
entitled to indemnification under this Article XIV (the "Indemnified Party") of
any claim as to which such

                                       64
<PAGE>

indemnification may be applicable ("Claim"), the Indemnified Party shall notify
the other party (the "Indemnifying Party") of such fact in writing with the
details of such Claim. The Indemnifying Party shall assume the defense thereof
with counsel of its choice, subject to the reasonable approval of the
Indemnified Party. If the parties against whom the Claim is asserted include
both the Indemnified Party and the Indemnifying Party, and the Indemnified Party
shall have reasonably concluded that there may be legal defenses available to it
which are different from, additional to or inconsistent with, those available to
the Indemnifying Party, the Indemnified Party shall have the right to select
separate counsel to participate in the defense of such Claim on behalf of such
Indemnified Party, at the Indemnifying Party's expense. The Indemnified Party
shall retain authority, in the reasonable exercise of its discretion, to approve
any and all communications with, and to prevent the submission of any documents
to, any court or governmental authority having jurisdiction over the Claim.

            14.6 Failure to Defend Claim. Should the Indemnified Party be
entitled to indemnification under this Article XIV as a result of a Claim by a
third party, and should the Indemnifying Party fail to assume the defense of
such Claim, having received notice as required by Section 14.5, the Indemnified
Party may at

                                       65
<PAGE>

the expense of the Indemnifying Party contest (or, with the prior written
consent of such Indemnifying Party, not to be unreasonably withheld, settle)
such Claim; provided, that no such contest need be made, and settlement or full
payment of any such Claim may be made upon seven days' prior written notice to
but without consent of the Indemnifying Party (with such Indemnifying Party
remaining obligated to indemnify the Indemnified Party under this Article XIV)
if, in the written opinion of the Indemnified Party's counsel, such Claim is
meritorious.

            14.7 Joint Cause. If any Claims for indemnity arising out of Section
14.1 or Section 14.2 are caused by joint and concurring acts or omissions of
Seller and Keystone, the liability of Seller and Keystone therefor shall be
apportioned according to their respective degrees of fault.

            14.8 Survival. The provisions of this Article XIV shall survive the
termination, cancellation or expiration of this Agreement, subject to applicable
statutes of limitation.

                                   ARTICLE XV

                                     NOTICES

            15.1 Notices. Any notice required or permitted under this Agreement
shall be in writing, shall be deemed to have been

                                       66
<PAGE>

duly given on the date of receipt, and shall be either served personally on the
party to whom notice is to be given, delivered by any recognized courier
service, sent by telecopy or fax, or mailed to the party to whom notice is to be
given, by first class registered or certified mail, return receipt requested,
postage prepaid. Notices shall be addressed to the addressee at the address
stated below, or at the most recent address specified by written notice given to
the other party in the manner provided in this Section 15.1:

                  If to Keystone:

                        Keystone Energy Service Company, L.P.
                        7475 Wisconsin Avenue
                        Bethesda, MD 20814
                        Attention: President
                        Tel. 301/718-6800
                        Fax 301/718-6910

                  If to Seller:

                        Anker Energy Corporation
                        Route 12, Box 245
                        Morgantown, West Virginia 26505
                        Attention: Vice President of Sales
                        Tel. (304) 296-1616
                        Fax (304) 291-3692

                                   ARTICLE XVI

                                   ASSIGNMENT

            16.1 Assignment. This Agreement may be assigned by either party to a
successor to substantially all of the assets of a party hereto by way of merger,
consolidation or sale of

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<PAGE>

assets, or to a parent, subsidiary or affiliate provided that (i) unless
released by the other party, the assignor shall remain fully liable for all
warranties, representations and covenants hereunder, and (ii) the assignee shall
assume in writing all warranties, representations and covenants hereunder.
Except as provided above and in Section 16.2, any transfer, assignment,
delegation, or attempted transfer, assignment or delegation under this Agreement
or of any of the rights or duties herein granted or imposed, whether voluntary,
by operation of law or otherwise, without consent of the other party in writing,
(which consent shall not be unreasonably withheld) shall be an event of Default
under this Agreement.

            16.2 Assignment to Financing Parties. (a) The parties acknowledge
that Keystone intends to finance the construction of the Facility by
non-recourse "project financing," and that the Financing Parties will require
such financing to be secured by a first lien upon the Facility and other assets
of Keystone, including a collateral assignment of this Agreement and all rights
and obligations of Keystone hereunder. Accordingly, this Agreement may be
assigned as collateral by Keystone to any Financing Parties and their successors
and assigns without further consent of Seller. In order to facilitate the
obtaining of such financing, Seller hereby confirms its agreement that in

                                       68
<PAGE>

the event of any Default on the part of Keystone of any provision of this
Agreement or the occurrence of any other event which Seller may claim as grounds
for cancelling this Agreement, Seller (having received prior written notice of
the name and address of the Financing Parties) will give written notice thereof
to such Financing Parties. The Financing Parties shall have 60 days following
the receipt of such notice within which to effect, or commence and diligently
pursue the completion of, a cure of such Default and to exercise their rights
and remedies under the Financing Documents, except that the applicable cure
period for the payment of amounts due to Seller for coal delivered hereunder
shall be 30 days. Seller shall also execute such consent and agreement or
similar documents with respect to a collateral assignment hereof, as the
Financing Parties may reasonably request in connection with the Financing
Documents. Seller agrees to cooperate with Keystone in the negotiation and
execution of any reasonable amendment or addition to this Agreement required by
the Financing Parties which does not result in an adverse change in Seller's
rights or obligations hereunder in the good faith judgment of Seller.

            (b) Seller may assign the right to payments under this Agreement as
collateral to any parties which provide financing to Seller or any parent,
subsidiary or affiliate of

                                       69
<PAGE>

Seller ("Seller Financing Parties") and their successors and assigns upon notice
to, but without further consent of Keystone. In order to facilitate the
obtaining of any such financing, Keystone hereby confirms its agreement that in
the event of any Default on the part of Seller of any provision of this
Agreement or the occurrence of any other event which Keystone may claim as
grounds for cancelling this Agreement, Keystone (having received prior written
notice of the name and address of the Seller Financing Parties) will give
written notice thereof to such Seller Financing Parties. Keystone shall execute
such consent and agreement or similar documents with respect to such collateral
assignment, as the Seller Financing Parties may reasonably request. Keystone
agrees to cooperate with Seller in the negotiation and execution of any
reasonable amendment or addition to this Agreement required by the Seller
Financing Parties which does not result in an adverse change in Keystone's
rights or obligations hereunder in the good faith judgment of Keystone.

            16.3 Successors and Assigns. Subject to the provisions of Sections
16.1 and 16.2 hereof, this Agreement and the respective rights and obligations
of the parties shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the parties hereto.

                                       70
<PAGE>

                                  ARTICLE XVII

                                    INSURANCE

            17.1 Seller Coverages. Seller shall obtain and maintain, or cause to
be obtained and maintained, at its expense, and which shall name Keystone as an
"Additional Insured", the following insurance during the term of this Agreement:

            (a) Comprehensive general liability insurance with bodily injury and
property damage combined single limits of at least $1,000,000 per occurrence.
Such insurance shall include, but shall not necessarily be limited to,
automobile liability, worker's compensation as necessary, specific coverage for
contractual liability encompassing the indemnification provisions in Sections
14.1 and 14.3 hereof, broad form property damage liability, personal injury
liability and, where applicable, watercraft protection and indemnity liability.

            (b) Umbrella, excess or other insurance policy which provides
$20,000,000 of additional coverage for any liability in excess of liability
limits provided above.

                                       71
<PAGE>

            17.2 Restrictions on Seller Coverages.

            (a) Seller may not materially change, cancel or allow insurance
policies required under this Agreement to lapse without giving thirty days'
written notice to Keystone.

            (b) The failure to comply with the insurance provisions of this
Agreement shall not limit or relieve Seller from indemnifying and holding
harmless Keystone as provided by any provision of this Agreement.

            17.3 Seller Subcontractor Coverages. Seller shall cause any
subcontractor(s) with which Seller contracts to provide barge or vessel
transportation of coal to fulfill its obligations under this Agreement to obtain
and maintain the following insurance, and which shall name Seller and Keystone
as "Additional Insured" during the term of the Agreement:

            (a) Marine protection and indemnity insurance with limits of
$30,000,000 per occurrence; and

            (b) Water pollution coverage insurance with limits of at least
$30,000,000 per occurrence.

            17.4 Keystone Coverages. Keystone shall obtain and maintain, or
cause to be obtained and maintained, at its

                                       72
<PAGE>

expense, and which shall name Seller as an "Additional Insured", the following
insurance during the term of this Agreement:

            (a) Comprehensive general liability insurance with bodily injury and
property damage combined single limits of at least $2,000,000 per occurrence.
Such insurance shall include, but shall not necessarily be limited to,
automobile liability, specific coverage for contractual liability encompassing
the indemnification provisions in Sections 14.1 and 14.3 hereof, broad form
property damage liability, worker's compensation as necessary, personal injury
liability.

            (b) Umbrella, excess or other insurance policy which provides
$18,000,000 of additional coverage for any liability in excess of liability
limits provided above.

            17.5 Restrictions on Keystone Coverages.

            (a) Insurance policies may not be cancelled, allowed to lapse, or
materially changed without giving thirty days' written notice to Seller.

            (b) The failure to comply with the insurance provisions of this
Agreement shall not limit or relieve Keystone from indemnifying and holding
harmless Seller as provided by any provision of this Agreement.

                                       73
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            17.6 Endorsements. If either party purchases insurance to satisfy
part or all of its obligations under this Article XVII, such party shall cause
its insurers to amend its comprehensive general liability and, if applicable,
umbrella or excess liability policies and comprehensive automobile liability
insurance with an endorsement to the effect that, notwithstanding any provision
of the policy, this policy may not be cancelled, allowed to lapse or materially
changed by the insurer without giving thirty (30) days prior written notice to
the other party.

            17.7 Certificates. Each party shall provide the other party with
certificates of insurance pertaining to any insurance policies purchased to
satisfy such party's obligations under this Article XVII.

                                  ARTICLE XVIII

                                   ARBITRATION

            18.1 Arbitration. The parties shall negotiate in good faith and
attempt to resolve any dispute which may develop under this Agreement; however,
if the parties are unable to resolve a dispute hereunder, either party may serve
upon the other a demand that such matter be arbitrated, in which case the same
shall be resolved by arbitration conducted in accordance with

                                       74
<PAGE>

the rules of the American Arbitration Association. In the event of such a
dispute, the parties shall endeavor to appoint an arbitrator agreeable to both
of them, who shall be the sole arbitrator. In the event that the parties are
unable to agree upon an arbitrator within twenty (20) days of the filing of a
demand for arbitration by the initiating party, then either party may request
the American Arbitration Association to appoint a individual in good standing of
such Association's Commercial Arbitration Panel as the sole arbitrator. Unless
the parties otherwise agree, the arbitration will be held in Washington, D.C.
The parties will proceed with the arbitration expeditiously and will conclude
all proceedings thereunder, including any hearing, in order that a decision may
be rendered within one hundred twenty (120) days from the filing of the demand
for arbitration by the initiating party. The award of the arbitrator will be
final and binding on both parties and may be enforced in any court having
jurisdiction of the party against which enforcement is sought. Each party shall
bear its own expenses, including but not limited to counsel fees, except that
all expenses of the arbitration shall be apportioned in the award of the
arbitrator based upon the respective merit of the positions of the parties.

                                       75
<PAGE>

            18.2 Price and Payment During Arbitration. Whenever a decision has
not been rendered within the 120-day period provided by Section 18.1 hereof in
an arbitration which relates to a Base Price increase proposed by Seller or to a
disputed payment withheld by Keystone, Keystone shall, upon the expiration of
such 120-day period, commence paying to Seller such proposed Base Price or pay
to Seller such withheld payment, as the case may be. Upon the rendering of the
arbitral decision, all overpayments shall be refunded and all underpayments
shall be paid, with interest thereon in each case at the rate specified in
Section 9.2.

            18.3 Survival of Provisions. The provisions of this Article XVIII
shall survive the termination, cancellation or expiration of this Agreement,
subject to applicable statutes of limitations.

                                   ARTICLE XIX

                            MISCELLANEOUS PROVISIONS

            19.1 Rounding. For purposes of all calculations pursuant to this
Agreement, (i) amounts per Ton shall be rounded to the nearest one-tenth of one
cent, (ii) all other amounts shall be rounded to the nearest fourth place after
the decimal.

                                       76
<PAGE>

            19.2 Consequences of Termination. In the event of a termination of
this Agreement pursuant to Section 2.2, Section 2.5, Section 6.6, Section 6.9,
Section 11.4 or Section 12.2, neither party shall have any further obligation to
perform hereunder, but no such termination shall excuse the payment of any
amount due and owing by one party to the other hereunder prior to such
termination, nor shall such termination affect the survival provisions of
Section 13.4(e), Section 14.8 and Section 18.3.

            19.3 Amendments; Waiver. This Agreement may not be amended,
supplemented, or modified except by an instrument in writing signed by both of
the parties hereto. Any failure by either party to enforce any provisions hereof
shall not constitute a waiver by that party of its right subsequently to enforce
the same or any other provision hereof.

            19.4 Severability. 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.

                                       77
<PAGE>

            19.5 Governing Law. This Agreement shall in all respects be governed
and construed in accordance with the laws of the State of New Jersey including
all matters of construction, validity and performance.

            19.6 Independent Contractor: No Partnership. Seller shall be an
independent contractor with respect to the sale of the coal and to the
performance of its obligations hereunder. Nothing in this Agreement or the
arrangement for which it is written shall constitute or create a joint venture,
partnership, agency or any other similar arrangement between the parties, and
neither party is authorized to act as agent for the other party.

            19.7 Captions, Exhibits and the Table of Contents. Titles or
captions of Sections contained in this Agreement are inserted only as a matter
of convenience and for reference, and in no way define, limit, extend, describe
or otherwise affect the scope or meaning of this Agreement or the intent of any
provision hereof. All Exhibits attached hereto shall be considered a part hereof
as though fully set forth herein.

            19.8 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. All previous and
collateral agreements, representations, warranties, promises and conditions of
sale are

                                       78
<PAGE>

superseded by this Agreement. Any representation, promise or condition not
incorporated in this Agreement shall not be binding on either party.

            19.9 Counterparts. The parties may execute this Agreement in two or
more counterparts, which shall, in the aggregate, be signed by both the parties;
and each counterpart shall be deemed an original instrument as against any party
who has signed it.

            19.10 Confidentiality. Each party shall retain in confidence the
contents of this Agreement and any information obtained as a result of
negotiation and performance of this Agreement which either party identifies to
the other as being proprietary or confidential in nature, except that (i)
Keystone may, upon receipt of equivalent assurances of confidentiality, disclose
such information to any proposed Financing Parties, equity investors, or
operators of the Facility (if other than Keystone) and to consultants employed
by Keystone or Monsanto and (ii) Seller may, upon receipt of equivalent
assurances of confidentiality, disclose such information to any parties
proposing to provide financing to or acquire an equity interest in Seller or any
of its affiliates. Further, such information may be disclosed when requested by
a court or government agency, or to the extent required by state regulatory
agencies, the

                                       79
<PAGE>

Federal Energy Regulatory Commission, the U.S. Environmental Protection Agency
or other Federal regulatory agencies.

            19.11 Attorney Fees. The parties agree that if one party brings an
action against the other with respect to this Agreement, including the
resolution of disputes pursuant to arbitration under Article XVIII hereof, the
parties' reasonable legal fees and other related expenses will be apportioned
between the parties by the arbitrator or judge based upon the respective merits
of the parties' positions.

            19.12 Right to Visit. Each party grants to the other (including its
agents) the right to visit its facilities, from time to time, upon reasonable
notice and subject to the applicable rules and regulations of the facilities, in
order to witness and review operations related to this Agreement. If Keystone
determines under Section 6.6 hereof that the coal deliveries have caused
operating problems, Keystone and Seller shall cooperate in arranging for Seller
to review the specific problem area.

            19.13 Further Assurances. The parties shall execute and deliver such
additional documents and shall cause such additional action to be taken as may
be reasonably necessary to carry out the purposes and intent of this Agreement.

                                       80
<PAGE>

            IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have caused this Agreement to be executed on the date hereof by their
respective representatives heretofore duly authorized.

                                           ANKER ENERGY CORPORATION, as
                                             Seller

                                           By: /s/ John J. Faltis
                                               -------------------------------

                                           KEYSTONE ENERGY SERVICE
                                           COMPANY, L.P.

                                           By: /s/ Joseph Kearney
                                               -------------------------------

                                       81
<PAGE>

                                    EXHIBIT A

                               PROJECT DESCRIPTION

The project is a conventional pulverized coal-fired electricity and steam
generating plant with a net electrical output of 202 MW. The Project is
comprised of a coal-fired steam generator producing 1,575,000 lbs/hr of
superheated steam at nominal conditions of 2,500 psig, 1005F and reheat steam at
nominal conditions of 1005F and a steam turbine generator with a gross
electrical output of 235 MW.

Exhaust gases exiting the boiler will pass through a dry scrubber to remove 93%
of SOx emissions and through a baghouse to remove particulate matter. NOx
emissions will be controlled by the combination of a low NOx combustion process
and a selective non-catalytic reduction system which uses ammonia injection into
the flue gas at a prescribed flue gas temperature. The superheated and reheated
steam will be used to power a steam turbine generator with a single extraction
point for process steam to Monsanto and seven stages of extraction for feedwater
heating.

Steam exhausting from the steam turbine will be condensed in a water-cooled
condenser and returned to the boiler for reuse through the feedwater heating
system. Water for make-up to the various plant systems will be drawn from the
Delaware River and passed through filters, a reverse osmosis system and a
demineralizer prior to use in the steam cycle. Heat removed from the condenser
by the cooling water will be released to the atmosphere through an induced draft
multi-cell cooling tower. Make-up water to the cooling tower to compensate for
evaporation, draft and blowdown will come from the Delaware River. The cooling
water will be chemically treated for pH, scale and biofouling control.

Coal for the Project will be delivered by barge to the Project's unloading pier
and unloaded by dock mounted unloading equipment. The coal will be delivered by
conveyor to the enclosed active storage area or to the outdoor dead storage. The
active storage area holds 10,000 tons (approximately 5 days at full load) and
the dead storage holds 60,000 tons (an approximate 30-day supply at full load).
Coal is retrieved from the active storage area using a scraper/reclaimer and
routed onto a conveyor for delivery to the coal bunkers located in the boiler
house. From

<PAGE>

here the coal is fed at a controlled rate into pulverizers, and then into the
boiler for combustion.

The ashes produced by the combustion process will be withdrawn from the bottom
of the boiler by a drag chain for outdoor storage until removed off-site. Fly
ash collected in the gas path hoppers and the baghouse will be pneumatically
conveyed to a silo sized for three days' operation for storage until removed
from the site by pneumatic tanker. Lime will be delivered by pneumatic tanker
and stored on site in a silo sized for 7 days' operation. The lime will be
slaked with water to a controlled concentration and then fed into the atomizers
of the spray dryer absorber. The SOx removal is achieved by direct contact of
the hot flue gases with the lime slurry.

A waste water collection and treatment system will be installed to process all
of the plant's waste water for reuse as demineralizer make-up or as a source for
the lime slaker. The system will utilize a reverse osmosis process which will be
sized to permit full operation during high salinity conditions in the Delaware
River. Discharge to the Delaware River will be limited to storm water.

Electricity generated by the Project will be transformed to 230 KV by the
Project's step-up transformer and fed to the adjacent switching station
installed by Atlantic City Electric. Electricity to Monsanto will be supplied
through the service transformer at 13.2 KV. Steam will be supplied to Monsanto
through a dedicated and monitored steam line.

Other balance-of-plant systems which will be installed to support the operations
will include an integrated distributed digital control and monitoring system,
administration building housing the control room, warehouse and offices, a 430
foot concrete chimney, fire fighting system for the whole plant, auxiliary
boiler to meet Monsanto's needs in the event of a shutdown and necessary support
electrical and mechanical systems.

                                      A-2
<PAGE>

                                    EXHIBIT B
                            DESCRIPTION OF THE MINES

<TABLE>
<CAPTION>
                                                   W. VA DOE
MINE NAME               PERMIT HOLDER          PERMIT NUMBER (1)       LATITUDE              LONGITUDE
<S>             <C>                            <C>                 <C>               <C>
Fairfax         Patriot Mining Company, Inc.     U-87-84           39(Degrees 27' 30"  79(Degrees 47' 07"
Squires Creek   Patriot Mining Company, Inc.     U-1041-86         39(Degrees 28' 16"  79(Degrees 48' 16"
T & T           T & T Energy, Inc.               EM-41             39(Degrees 30' 02"  79(Degrees 46' 51"
DeCondor        Patriot Mining Company, Inc.     U-1080-86         39(Degrees 27' 59"  79(Degrees 47' 24"
Birds Creek     Patriot Mining Company, Inc.     S-1022-88         39(Degrees 25' 42"  79(Degrees 47' 08"
Irish Ridge     Patriot Mining Company, Inc.     Not yet issued    39(Degrees 26' 16"  79(Degrees 47' 58"
Smith Farm      Patriot Mining Company, Inc.     S-1033-89         39(Degrees 29' 19"  79(Degrees 43' 27"
Kanes Creek     Patriot Mining Company, Inc.     Not yet issued    39(Degrees 29' 51"  79(Degrees 46' 30"
Sentinel        Philippi Development, Inc.       U-15-83           39(Degrees 13' 29"  80(Degrees 03' 17" Top
                                                                   39(Degrees 13' 26"  80(Degrees 03' 51" Bottom
</TABLE>

-----------------
(1) U and EM designate deep mines; S designates surface mines.

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                    EXHIBIT C
                           TYPICAL COAL SPECIFICATIONS

<TABLE>
<CAPTION>
Performance Coal
----------------
<S>                  <C>
HHV, Btu/lb          [_ _ _ _]
Volatiles, %         [_ _ _ _]
Fixed carbon, %      [_ _ _ _]
</TABLE>

<TABLE>
<CAPTION>
               Ultimate Analysis
                       %
               -----------------
<S>            <C>
Carbon               [_ _ _ _]
Hydrogen             [_ _ _ _]
Nitrogen             [_ _ _ _]
Chlorine             [_ _ _ _]
Sulfur               [_ _ _ _]
Ash                  [_ _ _ _]
Oxygen               [_ _ _ _]
Moisture             [_ _ _ _]
</TABLE>

<TABLE>
<CAPTION>
Grindability
--------------
<S>               <C>
Hargrove Index    [_ _ _ _]
</TABLE>

<TABLE>
<CAPTION>
Ash Analysis,     % (Average)
-------------     -----------
<S>               <C>
SiO(2)              [_ _ _ _]
Al(2)O(3)           [_ _ _ _]
TiO(2)              [_ _ _ _]
Fe(2)O(3)           [_ _ _ _]
CaO                 [_ _ _ _]
MgO                 [_ _ _ _]
Na(2)O              [_ _ _ _]
K(2)O               [_ _ _ _]
Other               [_ _ _ _]
</TABLE>

<TABLE>
<CAPTION>
Ash Fusion      Temperature
----------    ---------------
<S>           <C>
IDT           [_ _ _ _] (Degrees)F
</TABLE>

Size (as received)

[_ _ _ _]
No more than [_ _ _ _]
No more than [_ _ _ _]
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                    EXHIBIT D

                      ARTICLE 5.1B(ii) OF THE AGREEMENT FOR
                           PURCHASE OF ELECTRIC POWER

(ii)  a. For all energy delivered during each of the first eight (8) Contract
      Years, the price shall be: [_ _ _ _]/KWH + [_ _ _ _]/KWH x 1, Where 1 is
      the Base Escalator.

      NOTE:

      Base Escalator shall be the cost of coal as defined by the annual average
      cost of bituminous coal by New Jersey utilities as reported by FERC Form
      423. The Index is tonnage weighted.

      1 (for year N) = Cost of fuel as defined above, for the preceding year
      (N-1) [_ _ _ _]; cost of coal in (N-1) [_ _ _ _] x 1.

      i.e., For year N, 1 then becomes

            Indices in year (N-1)/Indices in 1992

            Values of 1 will be established in the first quarter of each year
      based on available published values of the indices.

      b. For all energy delivered during each of Contracts Years nine (9)
      through fifteen (15), the price shall be: [_ _ _ _]/KWH + [_ _ _ _]/KWH x
      1, where 1 is the Base Escalator.

      c. For all energy delivered during each of the final fifteen (15) Contract
      Years, the price shall be: [_ _ _ _]/KWH x 1, where 1 is the Base
      Escalator.

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                                                       EXHIBIT E

                             ESCALATION OF COAL BASE

                          PRICE AND OTHER BASE VALUES;

                          BILLING CALCULATION EXAMPLES

I.    Coal Base Price and Other Base Values

      A.    All Base Values are as of January 1, 1993 (except the Ash Disposal
            Price which shall not be less than [_ _ _ _] per ton of ash,
            effective January 1, 1991)

      B.    Coal Base Price (CBP)

            1.    Prior to Commercial Operation Date (COD) = [_ _ _ _]

            2.    Post COD Tonnage Adjustment

                  a.    Annual Tons [_ _ _ _]: CBP = [_ _ _ _]

                  b.    Annual Tons [_ _ _ _]: CBP = [_ _ _ _]
                        by linear interpolation

                  c.    Annual Tons [_ _ _ _] CBP = [_ _ _ _] by
                        linear interpolation

                  d.    Annual Tons [_ _ _ _] or more: CBP = [_ _ _ _]

            3.    Post COD Sulfur Content Adjustment

                  a.    Based on weighted annual average sulfur content of
                        bituminous coal used by New Jersey Utilities as reported
                        on FERC Form 423 for the 12-month period immediately
                        preceding the year to be adjusted

                  b.    Base values of Sulfur Content Adjustment

<TABLE>
<CAPTION>
Sulfur Content                  Adjustment to CBP
--------------                  -----------------
<S>                             <C>
   0 - 0.49%                         [_ _ _ _]
0.50 - 0.59%                         [_ _ _ _]
0.60 - 0.69%                         [_ _ _ _]
0.70 - 0.79%                         [_ _ _ _]
0.80 - 0.89%                         [_ _ _ _]
0.90 - 1.50%                         [_ _ _ _]
1.51 - 1.60%                         [_ _ _ _]
1.61 - 1.70%                         [_ _ _ _]
1.71 - 1.80%                         [_ _ _ _]
1.81 - 1.90%                         [_ _ _ _]
1.91% and greater                    [_ _ _ _]
</TABLE>

      C.    Dedication Fee

            1.    Based on annual tonnage delivered commencing with first full
                  Operating Year

            2.    For annual tonnages less than [_ _ _ _] the Base Dedication
                  Fee is [_ _ _ _] per Ton of shortfall

      D.    Ash Disposal Price (ADP)

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            1.    Actual cost of Ash Disposal for Keystone as reported by
                  Keystone

            2.    ADP is based upon [_ _ _ _] per ton of ash, effective January
                  l, 1991

      E.    Billing Period Sulfur Premium

            1.    Base Sulfur Premium of [_ _ _ _]/Ton for each [_ _ _ _] that
                  the weighted average semi-monthly sulfur content is less than
                  [_ _ _ _]

II.   Escalation of Coal Base Price and Other Base Values

      A.    Escalators

            1.    Base Escalator

                  a.    Weighted annual average cost of bituminous coal used by
                        New Jersey Utilities as reported on FERC Form 423 for
                        the 12 month period immediately preceding the year to be
                        adjusted

                  b.    Base Value of the Base Escalator is the weighted average
                        cost of bituminous coal used by New Jersey Utilities
                        during the period 1/01/92 thru 12/31/92

                  c.    Bituminous coal is bituminous coal having the following
                        quality specifications:

                        Ash Content between [_ _ _ _] inclusive Sulfur Content
                        between [_ _ _ _] inclusive Btu Value between [_ _ _ _]
                        inclusive

            2.    Gross Domestic Product - Implicit Price Deflator (GDP-IPD )

                  a.    Values to be escalated by GDP-IPD will be increased or
                        decreased as of January 1 of each year commencing
                        January 1, 1994 by the percentage change in the index
                        number of the GDP-IPD for the calendar quarter
                        immediately preceding such January 1 from the index
                        number of the GDP-IPD for the fourth quarter of the
                        preceding calendar year.

                  b.    Maximum adjustment for GDP-IPD on an annual basis is
                        [_ _ _ _] increase or decrease from prior year.

      B.    Escalations

            1.    Base Coal Price - Escalated annually by Base Escalator
                  commencing January 1, 1994

            2.    Base Sulfur Content Adjustment - Escalated annually by GDP-IPD
                  commencing January 1, 1994

            3.    Base Dedication Fee - Escalated annually by GDP-IPD commencing
                  January 1, 1994

                                      E-2
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            4.    Base ADP escalated annually by GDP-IPD commencing January 1,
                  1992, but shall not be less than [_ _ _ _] per ton of ash

            5.    Actual ADP is the reported actual cost per ton of ash incurred
                  by Keystone; provided that if the Actual ADP is less than
                  [_ _ _ _] per ton of ash then the actual ADP shall be deemed
                  to be [_ _ _ _] per ton of ash

            6.    Base Sulfur Premium

                  a.    Escalated annually by GDP-IPD commencing January 1,
                        1994. In no event shall the Base Sulfur Premium (as
                        escalated) be less than [_ _ _ _] per Ton.

                  b.    If the Actual ADP during the relevant period is greater
                        than the Base ADP (as escalated) for such period, then
                        the Sulfur Premium (as escalated) is further adjusted
                        by multiplying the Base Sulfur Premium (as escalated)
                        by the Actual ADP over the Base ADP (as escalated)

                  c.    If the actual ADP during the relevant period is less
                        than the Base ADP (as escalated) for such period, then
                        no further

III.  Billing Period Premium and Penalty Adjustments

      A.    All premiums and penalties based upon the semi-monthly weighted
            average analysis of coal delivered to the plant during a Billing
            Period.

      B.    BTU Premiums and Penalties

            1.    If actual Btu > [_ _ _ _] then Premium = [_ _ _ _]

            2.    If actual Btu < [_ _ _ _] then Penalty = [_ _ _ _]

      C.    Ash Premiums and Penalties

            1.    If actual Ash > [_ _ _ _] then Penalty = [_ _ _ _]

            2.    If actual Ash < [_ _ _ _] then Premium = [_ _ _ _]

      D.    Sulfur Premium

            1.    Premium adjustment only because sulfur in excess of [_ _ _ _]
                  may be rejected by Keystone

                                      E-3
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            2.    Premium base rate = [_ _ _ _] for each [_ _ _ _] sulfur below
                  [_ _ _ _]. This base rate is based upon a base ADP of
                  [_ _ _ _] per ton of ash, effective January 1, 1991

            3.    If Actual ADP is greater than the Base ADP (as escalated) then
                  the base sulfur premium rate (as escalated) will be adjusted
                  as provided in II.B.6.b. above

IV.   Base Price and Base Value Calculation Examples

      A.    Assumptions

            1.    Operating Year = 1/01/95 to 12/31/95

            2.    Bituminous coal price for base period (1/01/92- 12/31/92) =
                  [_ _ _ _]

            3.    Bituminous coal price for previous Operating Year
                  (1/01/94-12/31/94) = [_ _ _ _]

            4.    Average NJ Utilities sulfur content = [_ _ _ _]

            5.    Keystone's reported Ash Disposal Price during Operating Year =
                  [_ _ _ _]

            6.    GDP-IPD values: 4th quarter 1990 = [_ _ _ _]; 4th quarter 1991
                  = [_ _ _ _]; 4th quarter 1992 = [_ _ _ _]; 4th quarter 1993 =
                  [_ _ _ _]; 4th quarter 1994 = [_ _ _ _]

      B.    Base Price and Base Value Adjustment

            1.    Coal Base Price

                  a.    Prior to Commercial Operations: [_ _ _ _]

                  b.    Post COD Base Price:

                        1)    Tons of [_ _ _ _]:
                              [_ _ _ _]

                        2)    Tons of [_ _ _ _]: [_ _ _ _] via linear
                              interpolation

                              *  [_ _ _ _]

                        3)    Tons of [_ _ _ _]:

                              [_ _ _ _] via linear interpolation

                              [_ _ _ _]

                        4)    Tons of [_ _ _ _] and above:
                              [_ _ _ _]

                  c.    Post COD Sulfur Adjustment

                                      E-4
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                        1)    Base Adjustment =

                              [_ _ _ _]

                              [_ _ _ _]

                        2)    Note: limitation on annual adjustment of no
                              greater than [_ _ _ _] above or below the prior
                              adjustment period

                  d.    Total Adjusted Base Price = Adjustment Coal Base Price +
                                                    Sulfur Adjustment

            2.    Dedication Fee

                  a.    [_ _ _ _]

                        [_ _ _ _]

                  b.    Note: limitation on annual adjustment of no greater than
                        [_ _ _ _] above or below the prior adjustment period

            3.    Billing Period Sulfur Premium

                  a.    Base ADP Escalation

                        [_ _ _ _]

                        [_ _ _ _]

                        [_ _ _ _]

                        [_ _ _ _]

                  b.    Base Sulfur Premium Escalation:

                        [_ _ _ _]

                        [_ _ _ _]

                  c.    Note: Because the Actual ADP [_ _ _ _] was less than the
                        escalated Base ADP [_ _ _ _], no further adjustment
                        shall be made to the escalated Base Sulfur Premium
                        [_ _ _ _]

                  d.    Note: limitation on annual escalation adjustment of no
                        greater than [_ _ _ _] above or below the prior
                        adjustment period

V.    Billing Period Premium/Penalty Calculation Examples

      A.    Billing Period Calculation

            1.    Assumptions

                  a.    Billing period 3/01/95 = 3/15/96 (Mid-year)

                  b.    Prior Operating Year tonnage = [_ _ _ _]

                  c.    Billing period tonnage = [_ _ _ _]

                                      E-5
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                  d.    Billing period weighted average coal quality:

<TABLE>
<S>                       <C>
Ash                        [_ _ _ _]
Sulfur                     [_ _ _ _]
Btu                        [_ _ _ _]
</TABLE>

            2.    Calculations

                  a.    Adjusted Coal Base Price for billing period

                        1)    [_ _ _ _] Ton Adjustment Coal Price + Sulfur
                              Adjustment: = [_ _ _ _] + [_ _ _ _]
                                          = [_ _ _ _]

                  b.    Coal Quality Premium Payments

                        1)    BTU = [_ _ _ _]

                        2)    Sulfur = [_ _ _ _]

                        3)    Ash = [_ _ _ _]

VI.   Correction for Actual Quantity

      During the Operating Year the Coal Base Price shall be calculated, for
invoicing purposes, on the basis of the greater of an annual quantity of
[_ _ _ _] Tons or the previous Operating Year's quantity until the earlier of
(i) the date on which Seller shall have delivered [_ _ _ _] Tons in such
Operating Year or (ii) the end of such Operating Year.

      A.    Assumptions

            1.    Operating Year = 1/1/95-12/31/95

            2.    Operating Year Quantity = [_ _ _ _] Tons

            3.    1/1/94-12/31/94 Quantity = [_ _ _ _] Tons

            4.    Operating Year Coal Base Price (for invoicing purposes) =
                  [_ _ _ _] (see V.A.2.a. above)

            5.    Operating Year Weighed Average BTU Content = [_ _ _ _]

      B.    Correction Calculation

            1.    Corrected Coal Base Price + Sulfur Adjustment = [_ _ _ _]

                                      E-6
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            2.    Total BTU Adjustment

                  a.    As Billed Using Coal Base Price
                        [_ _ _ _]

                  b.    Based on Corrected Coal Base Price
                        [_ _ _ _]

            3.    Overpayment Calculation

                  a.    (Coal Base Price - Corrected CBP) * Tons =

                        [_ _ _ _]

                  b.    BTU Adjustment =
                        [_ _ _ _]

                  c.    Total Overpayment =
                        [_ _ _ _]

                                      E-7
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                   SCHEDULE A

                      Rates for Coal Transported in Barges
                           From Baltimore, Maryland to
                  Bridgeport, New Jersey Co-Generation Station
                           Effective February 15, 1991

<TABLE>
<CAPTION>
 Tonnage Carried Per Coal Year                           Rate
--------------------------------             -----------------------------
<S>                                          <C>
Between [_ _ _ _] tons                       [_ _ _ _]

Between [_ _ _ _] tons                       [_ _ _ _]

Between [_ _ _ _] tons                       [_ _ _ _]

[_ _ _ _] tons and above                     [_ _ _ _]
</TABLE>

                                       E-8
<PAGE>

                               FIRST AMENDMENT TO
                              COAL SUPPLY AGREEMENT

      THIS FIRST AMENDMENT TO COAL SUPPLY AGREEMENT (the "First Amendment"), is
entered into effective as of September 1, 1995, by and between ANKER ENERGY
CORPORATION, a Delaware corporation ("Seller"), and LOGAN GENERATING COMPANY,
L.P. (formerly Keystone Energy Service Company, L.P.), a Delaware limited
partnership ("Logan").

                                    RECITALS

      WHEREAS, Seller and Logan entered into a certain Coal Supply Agreement,
dated April 1, 1992 (the "Agreement"); and

      WHEREAS, the coal requirements for Logan's Facility are directly related
to the amount of time the Facility is dispatched; and

      WHEREAS, Seller is willing to provide a lower delivered price of coal to
Logan for a certain period of time and on other conditions hereinafter set
forth; and

      WHEREAS, Seller and Logan wish to amend certain of the provisions of the
Agreement.

      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, Seller and Logan, intending to be legally bound, hereby
agree as follows:

      1. Capitalized terms not otherwise defined in this First Amendment shall
have the meaning for such term set forth in the Agreement; provided that
anywhere "Keystone" is used in the Agreement shall mean "Logan" from and after
the effective date of this First Amendment.

<PAGE>

      2. A. Logan and Seller have agreed to: (i) reconcile all matters related
to the pricing and invoicings for all coal delivered under the Agreement from
its beginning through and including September 30, 1995; (ii) the Base Price to
be applied for all coal delivered under the Agreement for the period beginning
September 1, 1995 and ending December 31, 1995; and (iii) the procedures to be
applied for pricing and invoicing purposes for all coal deliveries under the
Agreement for the period beginning January 1, 1996 and continuing thereafter.

      With respect to the reconciliation of all matters related to the pricing
and invoicing for all coal delivered under the Agreement from its beginning
through and including September 30, 1995, Logan and Seller agree that Logan owes
Seller the additional sum of Three Hundred Thousand Dollars ($300,000.00). Logan
agrees to pay Seller such sum by certified check or by wire transfer of funds
within 30 days after the final execution of this First Amendment; provided, that
if Logan has not paid such sum within such time frame, then Seller, in addition
to all of its other legal rights to collect such sum, may by written notice to
Logan, sent anytime after the due date of such payment, elect that the pricing
for all purchases of Specification Coal made on or after January 1, 1996 shall
be determined in accordance with Section 7.1 of the Agreement rather than
subparagraph A of numbered paragraph 9 of this First Amendment.

      Logan and Seller agree that such reconciliation shall operate as a
complete settlement of all matters related to coal pricing for all coal
deliveries under the Agreement from its beginning through and including
September 30, 1995. Logan hereby releases Seller from any and all claims and
demands for coal deliveries and pricing therefor during the stated period and
once the payment to Seller as set forth above has been made in full, Seller
releases Logan from

                                       2
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

any and all claims and demands for any such matters for coal deliveries and
pricing therefor during the stated period.

      B. As part of the parties' complete reconciliation of all matters under
the Agreement related to the change in definition of "Operating Year" as set
forth below, Logan and Seller agree that for all coal delivered by Seller to the
Point of Delivery from September 1, 1995 through and including December 31,
1995, the Base Price for coal with the quality defined as Semi-Monthly Average
Contract Specifications in Section 6.2 of the Agreement shall be [_ _ _ _] per
Ton, subject to premiums and penalties calculated at the rate of [_ _ _ _] for
each [_ _ _ _], pro rata, over or under [_ _ _ _] of sulfur and at the rate of
+ or - [_ _ _ _] for each [_ _ _ _], pro rata, over or under [_ _ _ _] ash, for
the weighted average sulfur and ash content for the subject Billing Period. In
the event the CSX Transportation, Inc. ("CSXT") Guaranty Agreement, referred to
in numbered paragraph 17 of this First Amendment is not terminated on or before
March 29, 1996, then, notwithstanding the provisions of numbered paragraph 17 of
this First Amendment, Logan agrees to pay Seller an additional [_ _ _ _] per Ton
for each Ton of Specification Coal (as hereinafter defined) delivered by Seller,
to the Point of Delivery under the Agreement, during the period beginning
September 1, 1995 and ending December 31, 1995.

      3. Effective as of January 1, 1996, the fifth Recital Clause of the
Agreement is deleted in its entirety and replaced with the following language:

            "WHEREAS, Logan will sell electricity generated at the Facility to
            Atlantic City Electric Company ("Atlantic Electric" or "Power
            Purchaser") under an Agreement for Purchase of Electric Power dated
            as of August 25, 1988, as amended, and Logan will sell steam and
            electricity produced at the Facility to Monsanto Chemical Company
            ("Monsanto") under a Steam Supply

                                       3
<PAGE>

            Agreement dated as of November 22, 1988, as amended, and the coal
            requirements will depend upon the quantity of steam and electricity
            purchased pursuant to those agreements; and".

      4. Effective as of January 1, 1996, the definition of "GDP Deflator" in
Section 1.5 of the Agreement shall be deleted in its entirety and the following
shall be inserted in its place:

            "GDP Deflator" means the preliminary (i.e., second published) Gross
            Domestic Product Implicit Price Deflator for a calendar quarter as
            currently published in the United States Department of Commerce,
            Bureau of Economic Analysis publication entitled Survey of Current
            Business. The base index for the GDP Deflator shall be the fourth
            quarter of 1992 for all adjustment purposes hereunder. Adjustments
            to rates, fees, prices, premiums and penalties which are to be made
            annually based on the GDP Deflator shall be calculated as follows:
            the existing rate, fee, price, premium or penalty shall be increased
            or decreased as of January 1, of each year of the Term hereof
            commencing on January 1, 1996 by the percentage change in the index
            number of the GDP Deflator for the third calendar quarter of the
            year immediately preceding such January 1 from the index number of
            the GDP Deflator for the fourth quarter of 1992 (i.e., the index
            number of the GDP Deflator for the third quarter of 1995 shall be
            compared to the index number of the GDP Deflator for the fourth
            quarter of 1992 for January 1, 1996, adjustments). If the GDP
            Deflator ceases to exist or becomes unavailable, the parties shall
            agree to a substitute index that

                                       4
<PAGE>

            reasonably measures inflation for all goods and services within the
            United States."

      5. Effective as of January 1, 1996, the definition of "Operating Year" in
Section 1.5 of the Agreement shall be deleted in its entirety and the following
shall be inserted in its place:

            "Operating Year" shall mean a Calendar Year

            (January 1 to December 31).

      6. Effective as of January 1, 1996, the following definitions shall be
added to Section 1.5 of the Agreement:

            "Specification Coal" shall have the meaning set forth in
subparagraph A of numbered Paragraph 9 of the First Amendment to Coal Suppy
Agreement.

      "Incentive Period" shall mean, as applicable, each six (6) month period of
each calendar year beginning January 1, 1996, and beginning each July 1 and
January 1 thereafter, during the period of time commencing January 1, 1996 and
ending December 31, 1999.

      7. Effective as of January 1, 1996, Section 2.1 of the Agreement shall be
deleted in its entirety and the following shall be inserted in its place:

            "2.1 Initial Term. This Agreement shall be effective from April 1,
            1992 (the "Effective Date") and, unless earlier terminated in
            accordance with the provisions hereof, shall continue for an initial
            term which shall end on December 31, 2014 (the "Initial Term")."

      8. A. Effective as of January 1, 1996, the first sentence of Section 5.3
of the Agreement is deleted in its entirety and replaced with the following
sentence:

            "Seller shall allow Logan Lay Time of one hour for each

                                       5
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            450 Tons of coal delivered."

      B. Effective as of January 1, 1996, the first sentence of Section 5.4 of
the Agreement is deleted in its entirety and replaced with the following
sentence:

            "Demurrage at the rate of [_ _ _ _] per hour (as of January 1, 1993)
            shall accrue for all time that exceeds the allowable Lay Time
            provided herein."

      9. A. Except as otherwise provided in subparagraph C of this paragraph 9
below, for the period commencing on January 1, 1996 and continuing through
December 31, 1999, the Base Price for coal with the quality defined as
Semi-monthly Average Contract Specifications in Section 6.2 of the Agreement
("Specification Coal") and delivered by Seller to the Point of Delivery on and
after January 1, 1996, shall be determined as follows:

            On or before January 1 and July 1 of each incentive Period, Logan
shall provide Seller with Power Purchaser's annualized estimate of the quantity
of Specification Coal to be delivered by Seller to the Point of Delivery during
the applicable Incentive Period. Except as otherwise provided m subparagraph C,
below, the Base Price for Specification Coal for such Incentive Period shall be
calculated pursuant to the formula:

        [_ _ _ _]

                        [_ _ _ _]

                                       6
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                        [_ _ _ _]

                        [_ _ _ _]

      Calculation examples for the above formula are set forth on an Exhibit
labeled, "Incentive Period Pricing" attached hereto as a part hereof.

      B. In the event that for the period commencing on January 1, 1996 and
continuing through December 31, 1999, Logan purchases less than [_ _ _ _] Tons
of coal from Seller in any calendar year, then, in addition to the Base Price
paid by Logan pursuant to subparagraph A above, Logan shall pay to Seller an
amount equal to [_ _ _ _] per Ton for all "shortfall tons". For purposes of this
First Amendment, "shortfalls tons" shall mean the difference between [_ _ _ _]
Tons and the Tons of coal actually purchased by Logan from Seller during any
such calendar year; but reduced to the extent such shortfall is a result of
suspension or rejection of deliveries pursuant to Sections 6.3, 6.4 or 6.6(a) of
the Agreement, an event of Force Majeure (which does not include outages
resulting from economic dispatch or any planned outages), the or termination of
the Agreement in accordance with its terms; PROVIDED, HOWEVER, that during the
period commencing on January 1, 1996 and continuing through December 31, 1999,
any such [_ _ _ _] per Ton payment for shortfall tons shall be in lieu of and
not in addition to the Dedication Fee set forth in Section 7.1 of the Agreement.

                                       7
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

      C. If during any Incentive Period, Logan fails to purchase at least
[_ _ _ _] of the Power Purchaser's estimate of the quantity of Specification
Coal to be delivered by Seller to the Point of Delivery for such Incentive
Period, then Seller, by written notice to Logan delivered within [_ _ _ _] days
following the end of such period, may elect that, commencing on the first day
following the end of the Incentive Period in which Logan fails to purchase at
least [_ _ _ _] of the Power Purchaser's estimate of the quantity of
Specification Coal to be delivered by Seller to the Point of Delivery during
such Incentive Period, the pricing for all subsequent purchases of
Specification Coal shall be determined in accordance with Section 7.1 of the
Agreement rather than subparagraph A of this paragraph 9 above.

      D. If Seller elects under subparagraph C of this paragraph 9 to have the
Base Price determined pursuant to Section 7.1 of the Agreement, then for the
period beginning on the date that the Base Price begins to be determined
pursuant to Section 7.1 through December 31, 1999, if the total cost of
transportation paid by Seller to CSXT pursuant to any Amendment to the April 10,
1992 Rail Transportation Contract between Seller and CSXT ("Base Rail Contract")
to deliver Specification Coal purchased by Logan from Seller to the Point of
Delivery during any Operating Year is less than the total transportation cost
that would have been incurred under the Base Rail Contract, then Seller and
Logan shall share any such savings equally.

      E. In the event that for any calendar year for which the Base Price is
determined in accordance with subparagraph A of this paragraph 9 for the period
beginning September 1, 1995 and ending December 31, 1995, as provided below,
Logan earns and is paid a Dispatch Incentive pursuant to the terms of Paragraph
2 of Exhibit C to Amendment No. 009 to Agreement for Purchase of Electric Power,
dated as June 9, 1993, between Power Purchaser and Logan, within [_ _ _ _] days
of the receipt of the final installment of the Dispatch Incentive

                                       8
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

payment for such year from the Power Purchaser, Logan shall pay to Seller an
amount equal to the sum of the Annual Dispatch Incentives shown in the table
below that corresponds to the level that the Facility was actually dispatched by
Power Purchaser during such calendar year:

<TABLE>
<CAPTION>
                           Actual Dispatch Level                                 Annual Dispatch Incentive
----------------------------------------------------------------------           -------------------------
<S>                                                                              <C>
[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]

[_ _ _ _]                                                                                   [_ _ _ _]
</TABLE>

provided, that in no event shall Logan be required to pay Seller in excess of
[_ _ _ _] in any calendar year pursuant to this subparagraph E; provided,
further, that for the period commencing on September 1, 1995 and ending December
31, 1995, Logan shall pay to Seller an amount equal to [_ _ _ _] of the sum of
the Annual Dispatch Incentives shown on the table above that correspond to the
level that the Facility was actually dispatched by Power Purchaser during
calendar year 1995 up to a [_ _ _ _].

                                       9
<PAGE>

      In the event that during the period that the Incentive Period Pricing is
in effect under numbered paragraph 9, of the First Amendment the terms of
Paragraph 2 of Exhibit C to Amendment No. 009 to Agreement for Purchase of
Electric Power, dated as of June 9, 1993, between Power Purchaser and Logan are
amended in a manner that adversely affects the payments, if any, to be made to
Seller in accordance with subparagraph E of this paragraph 9, then Seller, by
written notice to Logan, may elect that the pricing for all purchases of
Specification Coal made on or after the effective date of such amendment to
Paragraph 2 of Exhibit C to Amendment No. 009 to Agreement for Purchase of
Electric Power shall be determined in accordance with Section 7.1 of the
Agreement rather than subparagraph A of this paragraph 9 above.

      F. Logan shall maintain complete and accurate records to support any
Dispatch Incentive it earns and is paid, as referenced in subparagraph E of this
paragraph 9 above, during any time the Base Price is determined in accordance
with subparagraph A of this paragraph 9 above. Seller shall have the right, upon
reasonable prior notice, to inspect and review at Logan's offices any such
records at any reasonable time for the purpose of verifying the correctness of
any information related to any such Dispatch Incentive earned by Logan.

      10. Effective as of January 1, 1996, Section 7.3 of the Agreement shall be
deleted in its entirety and the following shall be inserted in its place:

            "7.3 Base Escalator. For purposes of this Agreement, the "Base
Escalator" shall be the cost of coal as defined by the annual average cost
of "bituminous coal" used by New Jersey utilities, on a tonnage-weighted
basis, as reported on FERC Form 423, (in dollars per ton) where "bituminous
coal" shall have the definition set forth in Section 7.5 of this Agreement.
The first Base Escalator adjustment shall occur in 1994. The value of the Base
Escalator

                                       10
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

established for a calendar year will be applied to all coal delivered during
that calendar year. The base value of the Base Escalator is the weighted
average cost of bituminous coal used by New Jersey utilities during calendar
year [_ _ _ _]. Adjustments to prices which are to be made annually based on
the weighted average cost of bituminous coal used by New Jersey utilities shall
be calculated as follows:

     The Base Coal Price shall be increased or decreased as of January 1 of each
year of the term hereof commencing on January 1, 1996 by the percentage change
in the index number of the weighted annual average cost of bituminous coal used
by New Jersey utilities as reported on FERC Form 423 for the twelve (12) month
period (September 1 to August 31) ending four (4) months prior to the year to be
adjusted, compared to such index number for calendar year 1992 (i.e., the
percentage change from the September 1, 1994 to August 31, 1995 weighted annual
average cost compared to the calendar year 1992 weighted annual average cost
shall be used for the January 1, 1996 adjustments).

     If New Jersey utilities discontinue the development of the data providing
the weighted average cost of bituminous coal used by New Jersey utilities, the
parties shall agree to a substitute index or other set of data that would most
closely approximate the weighted average cost of bituminous coal used by New
Jersey utilities.  If after thirty (30) days of negotiations the parties are
unable to agree on a new basis for providing a reasonable escalation, either
party may submit such matter to arbitration pursuant to Article XVIII and the
arbitrator shall be directed to develop a 100% bituminous coal (as defined in
Section 7.5) based escalator comparable to such escalators used by utilities in
the New Jersey region for coal fired power plants or if that is not possible due
to the unavailability of supporting data, an escalator that the arbitrator
determines

                                       11
<PAGE>
would most closely approximate the weighted average cost of bituminous coal
used by New Jersey utilities."

      The parties also agree that anywhere "Base Escalator" is used in the
Agreement shall mean the definition set forth in this First Amendment rather
than as defined in Article 5.1B(ii) of the Agreement for Purchase of Electric
Power between Atlantic Electric and Logan, from and after January 1, 1996. The
parties further agree that Exhibit D to the Agreement is hereby deleted in
entirety and not replaced.

      11. Effective as of January 1, 1996, Exhibit E to the Agreement shall be
deleted in its entirety and replaced with "Amended Exhibit E" attached hereto as
a part hereof and of the Agreement. The parties agree that anywhere "Exhibit E"
is used in the Agreement shall mean "Amended Exhibit E" from and after January
1, 1996. The parties further agree that in the event there is an inconsistency
between the terms of the Agreement, as amended, and Amended Exhibit E, the terms
of the Agreement, as amended, shall govern.

      12. Effective as of January 1, 1996 Section 7.5 of the Agreement is hereby
amended by including the following language as the new second sentence thereof:

      "The Form 423 reports for the twelve (12) month period beginning September
1, two (2) years prior to the year to be adjusted, and ending August 31 of the
year immediately prior to the year to be adjusted, shall be used for adjustment
purposes (i.e., September 1, 1994 to August 31, 1995 Form 423 reports for
January 1, 1996 adjustments)."

      13. Effective as of September 1, 1995, Section 7.6 of the Agreement is
hereby deleted in its entirety.

      14. Effective as of January 1, 1996, Section 8.3 of the Agreement shall be
deleted in its entirety and the following shall be inserted in its place:

                                       12
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                  "8.3 Premiums and Penalties for Ash. If the average
                  semi-monthly ash content of the delivered coal during any
                  billing period is less than [_ _ _ _], Logan shall pay Seller
                  a premium of [_ _ _ _] (which is [_ _ _ _] of the Ash Disposal
                  Price [ADP] of [_ _ _ _] per Ton of Ash effective as of
                  January 1, 1993) per Ton for each [_ _ _ _], pro rata, that
                  the average semi-monthly ash content is below [_ _ _ _] during
                  such Billing Period. If the average semi-monthly ash content
                  of the delivered coal during any Billing Period is greater
                  than [_ _ _ _] percent, the price for such Billing Period
                  shall be reduced by [_ _ _ _] per Ton for each [_ _ _ _], pro
                  rata, that the average semi-monthly ash content is above
                  [_ _ _ _] during such Billing Period. The [_ _ _ _] per Ton
                  adjustment shall be effective as of January 1, 1993 and shall
                  be escalated each calendar year by the GDP Deflator provided
                  however, that such escalation shall not exceed [_ _ _ _] per
                  year and any excess shall not be reflected in the price
                  adjustment in any succeeding year. Notwithstanding the
                  foregoing, if the ash content of any Shipment of coal is
                  greater than [_ _ _ _], Logan may reject the coal in
                  accordance with Section 6.3 of this Agreement. An example of
                  the calculation used to determine the adjustment of the
                  premium and penalty is attached hereto as Amended Exhibit E."

      15. Effective as of January 1, 1996, Section 8.4 of the Agreement shall be
deleted in its entirety and the following shall be inserted in its place:

            "8.4 Premiums and Penalties for Sulfur.

                                       13
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

               Seller expects to deliver coal with a sulfur content of
approximately [_ _ _ _] or less by weight. If the average semi-monthly sulfur
content of the delivered coal during any Billing Period is less than [_ _ _ _],
Logan shall pay Seller a premium of [_ _ _ _] per Ton for each [_ _ _ _], pro
rata, that the average semi-monthly sulfur content is below [_ _ _ _] during
such Billing Period. If the sulfur content of any Shipment of coal is [_ _ _ _],
Logan may either (i) reject the coal in accordance with Section 6.3 of this
Agreement, or (ii) accept delivery of coal and if the average semi-monthly
sulfur content of all delivered coal during such Billing Period is greater that
[_ _ _ _], the price for such Billing Period shall be reduced by [_ _ _ _] per
Ton for each [_ _ _ _], pro rata, that the average semi-monthly sulfur content
is above [_ _ _ _] during such Billing Period. The [_ _ _ _] per Ton premium and
penalty shall be effective as of January 1, 1993 and shall be escalated each
calendar year by the GDP Deflator provided however, that such escalation shall
not exceed [_ _ _ _] per year and any excess shall not be reflected in the price
adjustment in any succeeding year. An example of the calculation used to
determine the adjustment of the premium and penalty is attached hereto as
Amended Exhibit E."

      16. The addresses for notices set forth in Section 15.1 of the Agreement
shall be deleted and the following substituted in their place:

            "If to Logan:

                    Logan Generating Company, L.P.
                    Attention:  General Counsel
                    7500 Old Georgetown Road
                    Bethesda, MD  20814-6161
                    Tel:  (301) 718-6800
                    Fax:  (301) 718-6913

                                       14
<PAGE>

            With a copy to:

                    Logan Generating Company, L.P.
                    Plant Director
                    Box 169-c
                    Route 130 South
                    Swedesboro, NJ  08085-9300
                    Tel:  (609) 467-2128
                    Fax:  (609) 467-5256

            If to Seller

                    Anker Energy Corporation
                    2708 Cranberry Square
                    Morgantown, WV  26505
                    Attention:  Vice President of Sales
                    Tel:  (304) 594-1616
                    Fax:  (304) 594-3695

      17. Seller and Logan agree that this First Amendment shall not become
effective unless on or before March 29, 1996: (i) Logan shall have obtained all
required consents and approvals from the Financing Parties to: (a) enter into
this First Amendment, (b) terminate the Supplemental Coal Supply Contract, dated
as of April 13, 1992, between Energy Resources and Logistics, Inc. and Logan and
(c) terminate the Guaranty, dated May 4, 1992, between CSX Transportation, Inc.
and Union Bank of Switzerland, and (ii) the Supplemental Coal Supply Contract,
dated as of April 13, 1992, between Energy Resources and Logistics, Inc. and
Logan and the Guaranty, dated May 4, 1992, between CSX Transportation, Inc. and
Union Bank Of Switzerland shall have been so terminated.

      18. Except as set forth in this First Amendment, the Agreement shall
remain in full force and effect.

      19. The parties may execute this First Amendment in counterparts, which
shall, in the aggregate, when signed by both parties constitute one and the same
instrument. Each

                                       15
<PAGE>

counterpart shall be deemed an original instrument as against any party that has
executed such counterpart.

      IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed by their duly authorized representatives on the dates set forth
below but to be effective as of the date first set forth above.

                                        ANKER ENERGY CORPORATION

                                             By: /s/ John J. Faltis
                                                 ----------------------------
                                             Name: John J. Faltis
                                             Title: President
                                             Date: March 29, 1996

                                        LOGAN GENERATING COMPANY, L.P.

                                             By: /s/ E. K. Hauser
                                                ----------------------------
                                             Name: E. K. Hauser
                                             Title: President & CEO
                                             Date: March 29, 1996

                                       16
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                AMENDED EXHIBIT E
                                 January 1, 1996

                             ESCALATION OF COAL BASE
                          PRICE AND OTHER BASE VALUES;
                          BILLING CALCULATION EXAMPLES

I.    Coal Base Price and Other Base Values

      A.    All Base Values are as of January 1, 1993

      B.    Coal Base Price (CBP)

            1.    Post Commercial Operation Date (COD) Tonnage Adjustment

                  a.    Annual Tons [_ _ _ _]: CBP = [_ _ _ _]

                  b.    Annual Tons [_ _ _ _]: CBP= [_ _ _ _]

                  c.    Annual Tons [_ _ _ _] CBP = [_ _ _ _]

                  d.    Annual Tons [_ _ _ _]: CBP = [_ _ _ _]

            2.    Post COD Sulfur Content Adjustment

                  a.    [_ _ _ _]

                  b.    Base values of Sulfur Content Adjustment

<TABLE>
<CAPTION>
Sulfur Content           Adjustment to CBP
--------------           -----------------
<S>                      <C>
0    - 0.49%                 [_ _ _ _]
0.50 - 0.59%                 [_ _ _ _]
0.60 - 0.69%                 [_ _ _ _]
</TABLE>

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

<TABLE>
<CAPTION>
Sulfur Content           Adjustment to CBP
--------------           -----------------
<S>                      <C>
0.70 - 0.79%                  [_ _ _ _]
0.80 - 0.89%                  [_ _ _ _]
0.90 - 1.50%                  [_ _ _ _]
1.51 - 1.60%                  [_ _ _ _]
1.61 - 1.70%                  [_ _ _ _]
1.71 - 1.80%                  [_ _ _ _]
1.81 - 1.90%                  [_ _ _ _]
1.91% and greater             [_ _ _ _]
</TABLE>

      C.    Dedication Fee

            1.    Based on annual tonnage delivered commencing with first full
                  Operating Year

            2.    For annual tonnages less than [_ _ _ _], the Base Dedication
                  Fee is [_ _ _ _] per Ton of shortfall

      D.    Billing Period Ash Premium/Penalty

            1.    The Billing Period ash premium/penalty is based upon an Ash
                  Disposal Price (ADP) of [_ _ _ _] per ton of ash, effective
                  January 1, 1993

            2.    Base Ash Premium of [_ _ _ _]/Ton for each [_ _ _ _], pro
                  rata, that the weighted average semi-monthly ash content is
                  less than [_ _ _ _]

            3.    Base Ash Penalty of [_ _ _ _]/Ton for each [_ _ _ _], pro
                  rata, that the weighted average semi-monthly ash content is
                  greater than [_ _ _ _].

      E.    Billing Period Sulfur Premium/Penalty

            1.    Base Sulfur Premium of [_ _ _ _]/Ton for each [_ _ _ _], pro
                  rata, that the weighted average semi-monthly sulfur content is
                  less than [_ _ _ _]

            2.    Base Sulfur Penalty of [_ _ _ _]/Ton for each [_ _ _ _], pro
                  rata, that the weighted average semi-monthly sulfur content is
                  greater than [_ _ _ _].

                                      E - 2
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

II.   Escalation of Coal Base Price and Other Base Values

      A.    Escalators

            1.    Base Escalator

                  a.    Weighted annual average cost of bituminous coal used by
                        New Jersey utilities as reported on FERC Form 423 for
                        the 12-month period (September 1 - August 31) ending
                        four (4) months prior to the year to be adjusted (i.e.,
                        September 1994 to August 1995 FERC data for January 1,
                        1996 adjustment)

                  b.    Base Value of the Base Escalator is the weighted average
                        cost of bituminous coal used by New Jersey utilities
                        during the period 1/01/92 thru 12/31/92 [_ _ _ _]

                  c.    Bituminous coal is bituminous coal having the following
                        quality specifications:

                        [_ _ _ _]

            2.    Gross Domestic Product - Implicit Price Deflator (GDP-IPD)

                  a.    Values to be escalated by GDP-IPD will be increased or
                        decreased as of January 1 of each year commencing
                        January 1, 1996 by the percentage change in the index
                        number of the GDP-IPD for the third calendar quarter of
                        the year immediately preceding such January 1 from the
                        index number of the GDP-IPD for the fourth quarter of
                        1992.

                                      E - 3
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                  b.    Maximum adjustment for GDP-IPD on an annual basis is
                        [_ _ _ _] increase or decrease from prior year.

      B.    Escalations

            1.    Base Coal Price - Escalated annually by Base Escalator
                  commencing January 1, 1994

            2.    Base Sulfur Content Adjustment - Escalated annually by GDP-IPD
                  commencing January 1, 1994

            3.    Base Dedication Fee - Escalated annually by GDP-IPD commencing
                  January 1, 1994

            4.    Base Ash Premium/Penalty - Escalated annually by GDP-IPD
                  commencing January 1, 1994. In no event shall the Base Ash
                  Premium/Penalty (as escalated) [_ _ _ _]

            5.    Base Sulfur Premium/Penalty - Escalated annually by GDP-IPD
                  commencing January 1, 1994. In no event shall the Base Sulfur
                  Premium/Penalty (as escalated) [_ _ _ _]

III.  Billing Period Premium and Penalty Adjustments

      A.    All premiums and penalties based upon the semi-monthly weighted
            average analysis of coal delivered to the plant during a Billing
            Period.

      B.    BTU Premiums and Penalties

            1.    If actual Btu > [_ _ _ _] then Premium = [_ _ _ _]
                    [_ _ _ _]
                  -------------
                    [_ _ _ _]

                                      E - 4
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            2.    If actual Btu < [_ _ _ _] then Penalty =
                  [_ _ _ _]
                  -----------------
                  [_ _ _ _]

      C.    Ash Premiums and Penalties

            1.    Ash premium base rate = [_ _ _ _] for each [_ _ _ _], pro
                  rata, ash is less than [_ _ _ _]

            2.    Ash penalty base rate = [_ _ _ _] for each [_ _ _ _], pro
                  rata, ash is greater than [_ _ _ _]

      D.    Sulfur Premiums and Penalties

            1.    Sulfur premium base rate = [_ _ _ _] for each [_ _ _ _], pro
                  rata, sulfur less than [_ _ _ _].

            2.    Sulfur penalty base rate =  [_ _ _ _] for each [_ _ _ _], pro
                  rata, sulfur greater than [_ _ _ _]

IV.   Base Price and Base Value Calculation Examples

      A.    Assumptions (although in some instances actual figures are used,
            these figures should be considered hypothetical and for example
            calculations only)

            1.    Operating Year = 1/01/96 to 12/31/96

            2.    Base Escalator reference period for Operating Year (1/01/96 to
                  12/31/96) = 9/1/94 to 8/31/95

            3.    Bituminous coal price for base period (1/01/92 - 12/31/92) =
                  [_ _ _ _]

            4.    Bituminous coal price for previous Operating Year (1/01/95 -
                  12/31/95) = [_ _ _ _]

            5.    Average NJ utilities sulfur content (derived from data for
                  period beginning 9/1/94 and ending 8/31/95) = [_ _ _ _]

            6.    GDP-IPD reference period for Operating Year (1/01/96 to
                  12/31/96) = 3rd Quarter 1995

            7.    GDP-IPD Values: 4th quarter 1992 = 121.8; 3rd quarter 1995 =
                  [_ _ _ _]

                                      E - 5
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

      B.    Base Price and Base Value Adjustment

            1.    Coal Base Price

                  a.    Post COD Base Price:

                        1)    Tons of [_ _ _ _]
                              [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                        2)    Tons of [_ _ _ _]
                              [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                        3)    Tons of [_ _ _ _]
                              [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                        4)     Tons of [_ _ _ _]
                               [_ _ _ _]
                                        -----
                                       [_ _ _ _]

                  b.    Post COD Sulfur Adjustment

                        1)    Base Adjustment
                              [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                        2)    Note: limitation on annual adjustment of no
                              greater than [_ _ _ _] above or below the prior
                              adjustment period

                  c.    Total Adjusted Base Price = [_ _ _ _]

            2.    Dedication Fee

                  a.    [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                  b.    Note: limitation on annual adjustment of no greater than
                        [_ _ _ _] above or below the prior adjustment period

                                      E - 6
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            3.    Billing Period Sulfur Premium/Penalty

                  a.    Base Sulphur Premium/Penalty Escalation:
                        [_ _ _ _]
                                        -----
                                      [_ _ _ _]

            b.    Note: limitation on annual escalation adjustment of no greater
                  than [_ _ _ _] above or below the prior adjustment period

            4.    Billing Period Ash Premium/Penalty

                  a.    Base Ash Premium/Penalty Escalation
                        [_ _ _ _]
                                        -----
                                      [_ _ _ _]

                  b.    Note: limitation on annual escalation adjustment of no
                        greater than [_ _ _ _] above or below the prior
                        adjustment period

V.    Billing Period Premium/Penalty Calculation Examples

      A.    Billing Period Calculation

            1.    Assumptions

                  a.    Billing period 3/01/96 - 3/15/96

                  b.    Prior Operating Year tonnage = [_ _ _ _]

                  c.    Billing period tonnage = [_ _ _ _]

                  d.    Billing period weighted average coal quality:

                               Ash            [_ _ _ _]
                               Sulfur         [_ _ _ _]
                               Btu            [_ _ _ _]

                  e.    Note rounding requirements of Section 19.1 of Article
                        XIX of the Coal Supply Agreement

            2.    Calculations

                  a.    Adjusted Coal Base Price for billing period

                                      E - 7
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                        1)    [_ _ _ _] Tons Adjusted Coal Base Price + Sulfur
                              Adjustment:

                                      =  [_ _ _ _]
                                      =  [_ _ _ _]

                  b.    Coal Quality Premium Payments

                        1)    BTU =
                         [_ _ _ _]
                         -----------
                         [_ _ _ _]

                        2)    Sulfur =
                        [_ _ _ _]
                                     [_ _ _ _]

                        3)    Ash =
                        [_ _ _ _]
                                    [_ _ _ _]

VI.   Correction For Actual Quantity

            During any Operating Year the Coal Base Price shall be calculated,
for invoicing purposes, on the basis of the greater of the annual quantity of
[_ _ _ _] Tons or the previous Operating Year's quantity until the earlier of
(i) the date on which Seller shall have delivered [_ _ _ _] Tons in such
Operating Year or (ii) the end of such Operating Year.

      A.    Assumptions

            1.    Operating Year = 1/1/96-12/31/96

            2.    Operating Year Quantity = [_ _ _ _] Tons

            3.    1/1/95-12/31/95 Quantity = [_ _ _ _] Tons

            4.    Operating Year Coal Base Price (for invoicing purposes =
                  [_ _ _ _]

            5.    Operating Year Weighed Average BTU Content = [_ _ _ _]

      B.    Correction Calculation

                                      E - 8
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

            1.    Corrected Coal Base Price =
                  [_ _ _ _]
                             ---------------------------------------
                                         [_ _ _ _]

                  [_ _ _ _]
                  [_ _ _ _]

            2.    Total BTU Adjustment

                  a.    As Billed Using Coal Base Price
                        [_ _ _ _]
                         ---------------
                             [_ _ _ _]
                         [_ _ _ _]

                  b.    Based on Corrected Coal Base Price
                        [_ _ _ _]
                         ---------------
                             [_ _ _ _]
                         [_ _ _ _]

            3.    Overpayment Calculation

                  a.    (Coal Base Price - Corrected CBP) * Tons
                        = [_ _ _ _]
                        = [_ _ _ _]

                  b.    BTU Adjustment
                        = [_ _ _ _]
                        = [_ _ _ _]

                  c.    Total Overpayment
                        = [_ _ _ _]

                                      E - 9
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

               EXHIBIT TO FIRST AMENDMENT TO COAL SUPPLY AGREEMENT

                            INCENTIVE PERIOD PRICING

EXAMPLE 1:

      Assume the PPT for the Incentive Period beginning January 1, 1996 and
      ending June 30, 1996 is [_ _ _ _] Tons

      Assume the Base Contract Price, per Ton, from Section 7.1 of the
      Agreement, as escalated as of January 1, 1996 for annualized quantities of
      less than [_ _ _ _] Tons = [_ _ _ _]

      Assume the Base Contract Price, per Ton, from Section 7.1 of the
      Agreement, as escalated as of January 1, 1996, for annual quantities of
      [_ _ _ _] Tons = [_ _ _ _]

      Utilizing the formula set forth at subparagraph A of numbered paragraph 9
      of the First Amendment to the Coal Supply Agreement results in the
      following calculations:

        [_ _ _ _]                                =   [_ _ _ _]
      + [_ _ _ _]                                =   [_ _ _ _]
      --------------------------------------         ----------

      [_ _ _ _]    = [_ _ _ _] per Ton as Incentive Period Base Price

-     Note that Example 1 is based on hypothetical figures for the stated
      Incentive Period.

EXAMPLE 2

      Assume the PPT for the Incentive Period beginning July 1, 1996 and ending
      December 31, 1996 is [_ _ _ _] Tons

      Assume the Base Contract Price, per Ton, from section 7.1 of the
      Agreement, as escalated as of July 1, 1996 for the annual quantities of
      less than [_ _ _ _] Tons = [_ _ _ _]

      Assume the Base Contract Price, per Ton, from section 7.1 of the
      Agreement, as escalated as of July 1, 1996 for annual quantities of
      [_ _ _ _] Tons = [_ _ _ _]

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

               EXHIBIT TO FIRST AMENDMENT TO COAL SUPPLY AGREEMENT

                            INCENTIVE PERIOD PRICING
                                    (Page 2)

EXAMPLE 2 (cont.):

      Utilizing the formula set forth at subparagraph A of numbered paragraph 9
      of the First Amendment to the Coal Supply Agreement results in the
      following calculations:

        [_ _ _ _]
      + [_ _ _ _]
      --------------------------------------            ----------

      [_ _ _ _] per Ton as Incentive Period Base Price

-     Note that Example 2 is based on hypothetical figures for the stated
      Incentive Period.

      In Examples 1 and 2, PPT = Power Purchaser's annualized estimate of the
      quantity of Specification Coal to be delivered by Seller to the Point of
      Delivery during the applicable Incentive Period.

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                SECOND AMENDMENT
                          TO THE COAL SUPPLY AGREEMENT

      This Second Amendment to the Coal Supply Agreement (the "Second
Amendment"), is entered into effective March 15, 2002, by and between Anker
Energy Corporation, a Delaware corporation ("Anker"), and Logan Generating
Company, L.P. (formerly Keystone Energy Service Company, L.P.), a Delaware
limited partnership ("Logan").

      In consideration of the mutual promises of the parties contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

      1. New Escalator Provisions.

      Anker and Logan hereby agree that, effective on the date this Agreement is
entered into, the following provisions of the Coal Supply Agreement dated April
1, 1992, by and between Anker and Logan (the "Agreement"), as amended, shall be
amended, as follows.

      (a) Section 7.1 of the Agreement shall be deleted in its entirety and the
following shall be inserted in its place:

      "7.1 Base Price. The Base Price for coal with the quality defined as
Semi-Monthly Average Contract Specifications in Section 6.2 and delivered by
Seller to the Point of Delivery is [_ _ _ _] per Ton, effective March 16, 2002,
for annual quantities of [_ _ _ _], and [_ _ _ _] per Ton, effective March 16,
2002, for annual quantities [_ _ _ _] Tons. For annual quantities between [_ _ _
_] Tons, the Base Price for Coal shall be an amount per Ton determined by linear
interpolation between [_ _ _ _], effective March 16, 2002. For annual quantities
between [_ _ _ _] and [_ _ _ _] Tons, the Base Price for coal shall be an amount
per Ton determined by linear interpolation between [_ _ _ _], effective March
16, 2002. Commencing with the first full Operating Year and continuing with each
Operating Year thereafter, for annual quantities less than [_ _ _ _] Tons,
Keystone shall pay Seller a dedication fee (the "Dedication Fee") for each Ton
of the shortfall amount, unless such shortfall is a result of suspension or
rejection of deliveries pursuant to Sections 6.3, 6.4 or 6.6(a), an event of
Force Majeure, or termination of this Agreement in accordance with its terms.
Effective as of January 1, 1993, the Dedication Fee shall be [_ _ _ _] per Ton
of the shortfall amount and shall be escalated each calendar year thereafter by
the GDP Deflator, provided however, that such escalation shall not be more than
[_ _ _ _] per year and any excess shall not be reflected in the price adjustment
in any succeeding year."

      (b) Section 7.3 of the Agreement shall be deleted in its entirety and the
following shall be inserted in its place:

      "7.3 Base Escalator. For purposes of this Agreement, the "Base Escalator"
shall be the cost of coal as defined by the annual average cost of "bituminous
coal" used by the coal-fired plants identified on Exhibit F, on a
tonnage-weighted basis, as reported on FERC Form 423, (in dollars per ton) where
"bituminous coal" shall have the definition set forth in Section 7.5 of this
Agreement. The value of the Base Escalator established for a calendar year will
be applied to all
<PAGE>

coal delivered during that calendar year. The base value of the Base Escalator
is the weighted average cost of bituminous coal used by the coal-fired plants
identified on Exhibit F during the twelve month period from September 1, 2000
through August 31, 2001 [_ _ _ _]. Adjustments to prices which are to be made
annually based on the weighted average cost of bituminous coal used by the
coal-fired plants identified on Exhibit F shall be calculated as follows:

             The Base Price for coal shall be increased or decreased as of
January 1 of each year of the term hereof commencing on January 1, 2003 by the
percentage change in the index number of the weighted average cost of bituminous
coal used by the coal-fired plants identified on Exhibit F as reported on FERC
Form 423 for the twelve (12) month period (September 1 to August 31) ending four
(4) months prior to the year to be adjusted, compared to such index number for
the twelve (12) month period from September 1, 2000 through August 31, 2001
(e.g., the percentage change from the September 1, 2001 to August 31, 2002
weighted annual average cost compared to the weighted annual average cost for
the period September 1, 2000 through August 31, 2001 shall be used for January
1, 2003 adjustments).

             If plants among those identified on Exhibit F discontinue the
reporting of bituminous coal costs on FERC Form 423, such that for any one year
period (September 1 through August 31) the total volume of bituminous coal
reported on FERC Form 423 by the plants identified in Exhibit F is less than
[_ _ _ _] of the total volume reported by those plants during the period from
September 1, 2000 through August 31, 2001 (i.e., [_ _ _ _] tons), the parties
shall agree to a substitute index or other set of data to calculate the Base
Escalator beginning in the next contract year. If after thirty (30) days of
negotiations the parties are unable to agree on a new basis for providing a
reasonable escalation, either party may submit such matter to arbitration
pursuant to Article XVIII and the arbitrator shall be directed to develop a
reasonable 100% bituminous coal (as defined in Section 7.5) based escalator.

      (c) Section 7.4 of the Agreement shall be deleted in its entirety.

      (d) Section 7.5 of the Agreement shall be deleted in its entirety and the
following shall be inserted in its place:

      "7.5 Bituminous Coal. The annual average cost of bituminous coal (for
purposes of the Base Escalator) shall be based on the Form 423 reports filed
with FERC by the coal-fired plants identified in Exhibit F reporting the annual
average cost of bituminous coal used by such plants. For purposes of this
Agreement "bituminous coal" shall mean bituminous coal with the following
quality specifications:

<TABLE>
<CAPTION>
Bituminous Coal Parameter         As Received Ranges
-------------------------         ------------------
<S>                               <C>
Heating Value, Btu/Lb             [_ _ _ _]
Ash Content, %                    [_ _ _ _]
Sulfur Content, %                 [_ _ _ _]
Mine Source (States)              Maryland, West Virginia, Virginia, Pennsylvania, Kentucky
</TABLE>

                                       2
<PAGE>

      (e) Exhibit F shall be added to the Coal Supply Agreement, in the form of
Exhibit F attached to this Second Amendment.

      2. The parties may execute this Second Amendment in counterparts, which
shall, in the aggregate, when signed by both parties constitute one and the same
instrument. Each counterpart shall be deemed an original as against any party
that has executed that counterpart.

            IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their duly authorized representatives on the dates
set forth below.

ANKER ENERGY CORPORATION                         LOGAN GENERATING COMPANY, L.P.

By: /s/ Gerald Peacock                           By: /s/ E. K. Hauser
   ----------------------------                     ----------------------------
Name: Gerald Peacock                             Name: Ernest K. Hauser
Title: President                                 Title: President and CEO
Date: April 5, 2002                              Date: April 5, 2002

                                       3
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                    EXHIBIT F
                COAL-FIRED PLANTS INCLUDED IN THE BASE ESCALATOR
                AND WEIGHTED AVERAGE COST OF COAL BY THOSE PLANTS
                          AS REPORTED ON FERC FORM 423

<TABLE>
<CAPTION>
                                                            SEPTEMBER 2000 - AUGUST 2001
                   PLANT                                    TONS (000S)   DELIVERED $/TON
                   -----                                    -----------   ---------------
<S>                                                         <C>           <C>
Albright                                                      [_ _ _ _]       [_ _ _ _]
Allen (DUPC)                                                  [_ _ _ _]       [_ _ _ _]
Amos                                                          [_ _ _ _]       [_ _ _ _]
Arkwright                                                     [_ _ _ _]       [_ _ _ _]
Asheville                                                     [_ _ _ _]       [_ _ _ _]
Bailly                                                        [_ _ _ _]       [_ _ _ _]
Beckjord                                                      [_ _ _ _]       [_ _ _ _]
Belews Creek                                                  [_ _ _ _]       [_ _ _ _]
Big Bend Transfer Facility @ Davant Terminal                  [_ _ _ _]       [_ _ _ _]
Big Sandy (KPC)                                               [_ _ _ _]       [_ _ _ _]
Bowen                                                         [_ _ _ _]       [_ _ _ _]
Bremo Bluff                                                   [_ _ _ _]       [_ _ _ _]
Brown (KUC)                                                   [_ _ _ _]       [_ _ _ _]
Buck (DUPC)                                                   [_ _ _ _]       [_ _ _ _]
Bull Run (TVA)                                                [_ _ _ _]       [_ _ _ _]
Campbell (CEC)                                                [_ _ _ _]       [_ _ _ _]
Canadys                                                       [_ _ _ _]       [_ _ _ _]
Cape Fear                                                     [_ _ _ _]       [_ _ _ _]
Cardinal                                                      [_ _ _ _]       [_ _ _ _]
Carlson                                                       [_ _ _ _]       [_ _ _ _]
Chesapeake Energy Center                                      [_ _ _ _]       [_ _ _ _]
Chesterfield                                                  [_ _ _ _]       [_ _ _ _]
Cliffside                                                     [_ _ _ _]       [_ _ _ _]
Clifty Creek                                                  [_ _ _ _]       [_ _ _ _]
Clinch River                                                  [_ _ _ _]       [_ _ _ _]
Clover                                                        [_ _ _ _]       [_ _ _ _]
Cobb                                                          [_ _ _ _]       [_ _ _ _]
Colbert                                                       [_ _ _ _]       [_ _ _ _]
Cooper                                                        [_ _ _ _]       [_ _ _ _]
Cope                                                          [_ _ _ _]       [_ _ _ _]
Crist                                                         [_ _ _ _]       [_ _ _ _]
Cross                                                         [_ _ _ _]       [_ _ _ _]
Crystal R@ Int Marine Terminal                                [_ _ _ _]       [_ _ _ _]
Crystal River                                                 [_ _ _ _]       [_ _ _ _]
Cumberland (TVA)                                              [_ _ _ _]       [_ _ _ _]
Dale (EKPC)                                                   [_ _ _ _]       [_ _ _ _]
Dan River                                                     [_ _ _ _]       [_ _ _ _]
Deerhaven                                                     [_ _ _ _]       [_ _ _ _]
East Bend                                                     [_ _ _ _]       [_ _ _ _]
Eckert                                                        [_ _ _ _]       [_ _ _ _]
</TABLE>

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

<TABLE>
<S>                                                           <C>             <C>
Edgewater (WPL)                                               [_ _ _ _]       [_ _ _ _]
Edwards                                                       [_ _ _ _]       [_ _ _ _]
Erickson                                                      [_ _ _ _]       [_ _ _ _]
Gallagher                                                     [_ _ _ _]       [_ _ _ _]
Gannon                                                        [_ _ _ _]       [_ _ _ _]
Gaston (ALAP)                                                 [_ _ _ _]       [_ _ _ _]
Gavin                                                         [_ _ _ _]       [_ _ _ _]
Ghent                                                         [_ _ _ _]       [_ _ _ _]
Glen Lyn                                                      [_ _ _ _]       [_ _ _ _]
Grainger                                                      [_ _ _ _]       [_ _ _ _]
Grand Rivers Terminal (BRT Transfer Facility)                 [_ _ _ _]       [_ _ _ _]
Green River (KUC)                                             [_ _ _ _]       [_ _ _ _]
Hamilton (HAMI)                                               [_ _ _ _]       [_ _ _ _]
Hammond (GPCO)                                                [_ _ _ _]       [_ _ _ _]
Harbor Beach                                                  [_ _ _ _]       [_ _ _ _]
Harlee Branch                                                 [_ _ _ _]       [_ _ _ _]
Hutchings                                                     [_ _ _ _]       [_ _ _ _]
James De Young                                                [_ _ _ _]       [_ _ _ _]
Jefferies                                                     [_ _ _ _]       [_ _ _ _]
John Sevier                                                   [_ _ _ _]       [_ _ _ _]
Kammer                                                        [_ _ _ _]       [_ _ _ _]
Kanawha River                                                 [_ _ _ _]       [_ _ _ _]
Kingston                                                      [_ _ _ _]       [_ _ _ _]
Kyger Creek                                                   [_ _ _ _]       [_ _ _ _]
Lee (CPLC)                                                    [_ _ _ _]       [_ _ _ _]
Lee (DUPC)                                                    [_ _ _ _]       [_ _ _ _]
Lowman (Tombigbee)                                            [_ _ _ _]       [_ _ _ _]
Manitowoc                                                     [_ _ _ _]       [_ _ _ _]
Marshall (DUPC)                                               [_ _ _ _]       [_ _ _ _]
Marysville                                                    [_ _ _ _]       [_ _ _ _]
Mayo                                                          [_ _ _ _]       [_ _ _ _]
McDonough                                                     [_ _ _ _]       [_ _ _ _]
McIntosh (LALW)                                               [_ _ _ _]       [_ _ _ _]
McIntosh (SAEP)                                               [_ _ _ _]       [_ _ _ _]
McMeekin                                                      [_ _ _ _]       [_ _ _ _]
Merrimack                                                     [_ _ _ _]       [_ _ _ _]
Miami Fort                                                    [_ _ _ _]       [_ _ _ _]
Mill Creek (LG&E)                                             [_ _ _ _]       [_ _ _ _]
Mitchell (GPCO)                                               [_ _ _ _]       [_ _ _ _]
Mitchell (OPC)                                                [_ _ _ _]       [_ _ _ _]
Monroe (DETED)                                                [_ _ _ _]       [_ _ _ _]
Morrow (SOMI)                                                 [_ _ _ _]       [_ _ _ _]
Mountaineer                                                   [_ _ _ _]       [_ _ _ _]
Muskingum River                                               [_ _ _ _]       [_ _ _ _]
Oak Creek South                                               [_ _ _ _]       [_ _ _ _]
Port Washington (Wep)                                         [_ _ _ _]       [_ _ _ _]
Possum Point                                                  [_ _ _ _]       [_ _ _ _]
Presque Isle                                                  [_ _ _ _]       [_ _ _ _]
River Rouge                                                   [_ _ _ _]       [_ _ _ _]
</TABLE>

                                      F-2
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

<TABLE>
<S>                                                           <C>          <C>
Riverbend                                                   [_ _ _ _]      [_ _ _ _]
Robinson                                                    [_ _ _ _]      [_ _ _ _]
Rochester 7 (Russell Station)                               [_ _ _ _]      [_ _ _ _]
Rockport (INMI)                                             [_ _ _ _]      [_ _ _ _]
Roxboro                                                     [_ _ _ _]      [_ _ _ _]
Schahfer                                                    [_ _ _ _]      [_ _ _ _]
Scherer                                                     [_ _ _ _]      [_ _ _ _]
Scholz                                                      [_ _ _ _]      [_ _ _ _]
Seminole (SECI)                                             [_ _ _ _]      [_ _ _ _]
Sims                                                        [_ _ _ _]      [_ _ _ _]
Sporn                                                       [_ _ _ _]      [_ _ _ _]
Spurlock                                                    [_ _ _ _]      [_ _ _ _]
St. Clair                                                   [_ _ _ _]      [_ _ _ _]
St. Johns River Power                                       [_ _ _ _]      [_ _ _ _]
Stanton Energy Center                                       [_ _ _ _]      [_ _ _ _]
Stuart                                                      [_ _ _ _]      [_ _ _ _]
Sutton                                                      [_ _ _ _]      [_ _ _ _]
Tanners Creek                                               [_ _ _ _]      [_ _ _ _]
Trenton Channel                                             [_ _ _ _]      [_ _ _ _]
Tyrone (KUC)                                                [_ _ _ _]      [_ _ _ _]
Urquhart - SCEG                                             [_ _ _ _]      [_ _ _ _]
W.H. Zimmer                                                 [_ _ _ _]      [_ _ _ _]
Wansley                                                     [_ _ _ _]      [_ _ _ _]
Wateree (SOCG)                                              [_ _ _ _]      [_ _ _ _]
Weadock                                                     [_ _ _ _]      [_ _ _ _]
Weatherspoon                                                [_ _ _ _]      [_ _ _ _]
Whitewater                                                  [_ _ _ _]      [_ _ _ _]
Whiting (CEC)                                               [_ _ _ _]      [_ _ _ _]
Widows Creek                                                [_ _ _ _]      [_ _ _ _]
Williams-ST                                                 [_ _ _ _]      [_ _ _ _]
Willow Island                                               [_ _ _ _]      [_ _ _ _]
Winyah                                                      [_ _ _ _]      [_ _ _ _]
Wyandotte (WYAN)                                            [_ _ _ _]      [_ _ _ _]
Yates                                                       [_ _ _ _]      [_ _ _ _]
Yorktown                                                    [_ _ _ _]      [_ _ _ _]

Total Tons/Weighted Avg. $ per Ton                          [_ _ _ _]      [_ _ _ _]
</TABLE>

                                      F-3
<PAGE>

                                          * CONFIDENTIAL MATERIAL HAS BEEN
                                            OMITTED AND FILED SEPARATELY WITH
                                            THE SECURITIES AND EXCHANGE
                                            COMMISSION. BRACKETS AND UNDERSCORES
                                            DENOTE SUCH OMISSIONS.

                                                                  EXECUTION COPY

                                 THIRD AMENDMENT
                          TO THE COAL SUPPLY AGREEMENT

      This Third Amendment to the Coal Supply Agreement (the "Third Amendment"),
is entered into effective October 1, 2004, by and between Anker Energy
Corporation, a Delaware corporation ("Anker"), and Logan Generating Company,
L.P. (formerly Keystone Energy Service Company, L.P.), a Delaware limited
partnership ("Logan").

      In consideration of the mutual promises of the parties contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:

      1. Quarterly Escalation.

      Anker and Logan hereby agree that, effective on the date this Third
Amendment is entered into, the following provisions of the Coal Supply Agreement
dated April 1,1992, by and between Anker and Logan (the "Agreement"), as
amended, shall be further amended, as follows.

      (a) Section 7.2 of the Agreement shall be deleted in its entirety and the
following shall be inserted in its place:

      "7.2 Escalation of Base Price. From January 1, 1993 through September 30,
2004, the Base Price for Coal delivered by Seller to the Point of Delivery shall
be adjusted on an annual basis, and from October 1, 2004 through the expiration
of the Initial Term or any Extended Term of this Agreement the Base Price for
Coal delivered by Seller to the Point of Delivery shall be adjusted on a
quarterly basis (effective January 1, April 1, July 1 and October 1 of each
calendar year), by the Base Escalator pursuant to Section 7.3 or, if applicable,
the New Base Escalator or other escalator determined pursuant to Section 7.6."

      (b) Section 7.3 of the Agreement shall be deleted in its entirety and the
following shall be inserted in its place:

      "7.3 Base Escalator. For purposes of this Agreement, the "Base Escalator"
shall be the cost of coal as defined by the annual average cost of "bituminous
coal" used by the coal-fired plants identified on Exhibit F, on a
tonnage-weighted basis, as reported on FERC Form 423, (in dollars per ton) where
"bituminous coal" shall have the definition set forth in Section 7.5 of this
Agreement. The value of the Base Escalator established for a calendar year will
be applied to all coal delivered during that calendar year; provided, however,
that for periods from October 1, 2004, the value of the Base Escalator
established for a quarter will be applied to all coal delivered during that
quarter. The base value of the Base Escalator is the weighted average cost of
bituminous coal used by the coal-fired plants identified on Exhibit F during the
twelve month period from September 1, 2000 through August 31, 2001 [_ _ _ _].
Adjustments to prices which are to be made annually or quarterly based on the
weighted average cost of bituminous coal used by the coal-fired plants
identified on Exhibit F shall be calculated as follows:

      "The Base Price for coal shall be increased or decreased as of January 1
of each year of the term hereof commencing on January 1, 2003, and shall be
increased or decreased as of each January 1, April 1, July 1 and October 1 of
each year commencing with October 1, 2004, by the

                                       1
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                                                  EXECUTION COPY

percentage change in the index number of the weighted average cost of bituminous
coal used by the coal-fired plants identified on Exhibit F as reported on FERC
Form 423 for the twelve (12) month period ending four (4) months prior to the
period to be adjusted, compared to such index number for the twelve (12) month
period from September 1, 2000 through August 31, 2001 (e.g., the percentage
change from the September 1, 2001 to August 31, 2002 weighted annual average
cost compared to the weighted annual average cost for the period September 1,
2000 through August 31, 2001 shall be used for January 1, 2003 adjustments; the
percentage change from the September 1, 2001 to August 31, 2002 weighted annual
average cost compared to the weighted annual average cost for the period June 1,
2003 through May 31, 2004 shall be used for the quarter commencing October 1,
2004).

"If plants among those identified on Exhibit F discontinue the reporting of
bituminous coal costs on FERC Form 423, such that for any one year period
(September 1 through August 31) the total volume of bituminous coal reported on
FERC Form 423 by the plants identified in Exhibit F is less than [_ _ _ _]) of
the total volume reported by those plants during the period from October 1, 2004
through December 31, 2004 (i.e., [_ _ _ _] tons), the parties shall agree to a
substitute index or other set of data to calculate the Base Escalator beginning
in the next contract year. If after thirty (30) days of negotiations the parties
are unable to agree on a new basis for providing a reasonable escalation, either
party may submit such matter to arbitration pursuant to Article XVIII and the
arbitrator shall be directed to develop a reasonable 100% bituminous coal (as
defined in Section 7.5) based escalator."

      2. Coal Requirements.

      (a) The following provision shall be added to the Agreement and inserted
as Section 4.8.

      "4.8 Reduction/Release of Requirements. Notwithstanding anything to the
contrary in this Agreement, Logan will be released from its obligations to
purchase its full coal requirements from Seller, and Seller will be released
from its obligations to supply coal to Logan, on the basis set forth in this
Section 4.8. Logan may reduce its obligation to purchase coal from Seller for a
time by providing Seller with written notification of such reduction, including
the number of tons by which Logan's obligation will be reduced during that
period and the calendar term during which Logan will be excused from its full
coal requirements obligation, which term shall be for a period of at least one
year unless otherwise agreed by Seller; provided that the term of reduced
obligation may not begin less than 90 days after written notification is
provided by Logan unless otherwise agreed by Seller. Except during the term of
and to the extent of any reduced obligation as provided in this Section 4.8,
Seller will continue its obligation to reserve and supply, and Logan will
continue its obligation to take, up to Logan's full coal requirements for the
term of this Agreement. If in each of two consecutive years or more Logan
reduces its obligation to purchase coal from Seller below sixty percent (60%) of
its total annual requirements, then for the remainder of the term of this
Agreement, Seller will be released from the annual obligation to supply the
number of tons of coal by which Logan reduced its obligation during each of
those two years, and will be released from the obligation to reserve the number
of tons of coal by which Logan reduced its obligation during each of those two
years multiplied by the number of years remaining in the term of this Agreement.
If in each of three consecutive years Logan reduces its obligation to purchase
less than all of its coal requirements from Seller, then Seller shall be
released from its annual obligation to supply the number of tons of coal by

                                       2
<PAGE>

                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                                                  EXECUTION COPY

which Logan reduced its obligation during each of the three years, and will be
released from the obligation to reserve the number of tons of coal by which
Logan reduced its obligation during each of those three years multiplied by the
number of years remaining the term of this Agreement."

      IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be executed by their duly authorized representatives on the dates set forth
below.

ANKER ENERGY CORPORATION                   LOGAN GENERATION COMPANY, L.P.

By: /s/ Raymond J. McElhaney               By:  /s/ Thomas J. Bonner
   --------------------------------            ---------------------------------
Name: Raymond J. McElhaney                 Name: Thomas J. Bonner
Title: President                           Title: President
Date: 4/20/2005                            Date: 6/27/2005

                                       3
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                                                  EXECUTION COPY

                         COAL PRICE ADJUSTMENT AGREEMENT

            This Coal Price Adjustment Agreement (the "Agreement"), is entered
into effective October 1, 2004, by and between Anker Energy Corporation, a
Delaware corporation ("Anker"), and Logan Generating Company, L.P. (formerly
Keystone Energy Service Company, L.P.), a Delaware limited partnership
("Logan").

      In consideration of the mutual promises of the parties contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree to supplement the price paid
for coal delivered under the Coal Supply Agreement dated April 1,1992, by and
between Anker and Logan (the "CSA"), as amended, according to the following
terms:

      1. Term. This Agreement will remain in effect during the Initial Term and
any Extension Periods permitted according to the provisions hereof, unless
terminated according to paragraphs 3 or 4 hereof. The Initial Term of this
Agreement will be October 1, 2004 through December 31, 2004. The Term may be
extended for additional three month periods ("Extension Periods") pursuant to
the options available to Anker, as described in paragraph 3 hereof.

      2. Performance Payments. During each month of the Term, a Performance
Payment will be available to Anker in an amount equal to [_ _ _ _], after giving
effect to the provisions of the Third Amendment to the Coal Supply Agreement
providing for quarterly adjustment of the Base Escalator. The Performance
Payment available to Anker will be payable to Anker after the end of each month
if Anker has fully performed its obligations for that month in accordance with
the terms of the CSA and this Agreement. In any month in which Anker has not
fully performed its obligations under the CSA and this Agreement, the
Performance Payment otherwise available under the terms of this Agreement will
be forfeited.

      3. Renewable Options. At the conclusion of the Initial Term and each
Extension Period thereafter, Anker will be granted an option to renew the
availability of Performance Payments for an additional three-month period if
Anker has fully performed its obligations in accordance with the terms of the
CSA and this Agreement during the most recent three-month period, but not
otherwise. To the extent the option is otherwise available, Anker shall be
deemed to automatically exercise each option to renew the availability of
Performance Payments for an Extension Period unless Anker affirmatively notifies
Logan in writing to the contrary at least 5 days prior to the expiration of the
Initial Term or any Extension Period. If during the Initial Term or any
Extension Period Anker has failed to fully perform its obligations under the
terms of the CSA and this Agreement, this Agreement shall not be renewable;
provided, however, that Anker shall have the option to renew the availability of
Performance Payments for an additional three-month period if such failure to
make full performance of the CSA or this Agreement is excused by Force Majeure
(as defined in Sections 11.1 through 11.3 of the CSA); and further provided,
however, that if a continuation of Force Majeure based on the same events or
conditions shall exceed 90 days, this Agreement may be terminated by Logan.

<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

                                                                  EXECUTION COPY

      4. Termination. The Price Adjustment Agreement may be terminated by either
party upon any of the following occurrences: (a) the failure by Anker to perform
under or to exercise (for any reason) an option to renew the terms of this
Agreement as stated above; (b) the date upon which the Base Price for coal under
the CSA for any period (as calculated without the Performance Payment) equals or
exceeds the sum of [_ _ _ _]; or (c) the Base Escalator index under the CSA
decreases for two quarters.

      5. Miscellaneous Provisions.

      (a) Each of the parties represents and warrants that the undersigned
representative is duly authorized to enter into this Agreement and bind that
party with respect to the terms hereof.

      (b) This Agreement may not be amended, supplemented, modified or extended
except by an instrument in writing signed by both of the parties hereto. Any
failure by either party to enforce any provisions hereof shall not constitute a
waiver by that party of its right subsequently to enforce the same or any other
provision hereof.

      (c) For purposes of any calculations required under this Agreement,
amounts per ton shall be rounded to the nearest one-tenth of one cent, and all
other amounts shall be rounded to the nearest fourth place after the decimal,
provided; however, that the amount of any Performance Payment available and/or
payable in any month pursuant to Section 2 shall be rounded to the nearest cent.

      (d) This Agreement will be governed and interpreted according to the laws
of the state of New Jersey, without giving effect to any conflict of law
principles.

      (e) The parties both acknowledge that they have jointly participated in
the preparation of this Agreement, and its terms shall be interpreted without
regard to which of the parties drafted the Agreement or any of its provisions.

      (f) The parties may execute this Agreement in counterparts, which shall
together constitute a single document, and each counterpart shall be deemed an
original and enforceable against the party who signed it.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the dates set forth below.

ANKER ENERGY CORPORATION                   LOGAN GENERATION COMPANY, L.P.

By: /s/ Raymond J. McElhaney               By: /s/ Thomas J. Bonner
   --------------------------------            ---------------------------------
Name: Raymond J. McElhaney                 Name: Thomas J. Bonner
Title: President                           Title: President
Date: 4/20/05                              Date: 6/27/2005

                                       2

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