Document:

THIRD AMENDMENT TO COAL SALES AGREEMENT

          THIS THIRD AMENDMENT TO COAL SALES AGREEMENT ("Amendment") is made, entered into and effective as of the first day of January, 2002 to amend that certain Coal Sales Agreement dated as of December 15, 1986, as amended by First Amendment dated as of September 29, 1995 and Second Amendment dated as of April 20, 1999, between ARCH COAL SALES COMPANY, a Delaware corporation ("Seller") and COGENTRIX VIRGINIA LEASING CORPORATION, a Virginia corporation ("Buyer").

WITNESSETH:

          WHEREAS, the parties to the Coal Sales Agreement have determined that certain provisions of the Coal Sales Agreement should be amended; and

          WHEREAS, the Coal Sales Agreement provides that it may be amended only by an instrument in writing signed by all parties.

          NOW, THEREFORE, for good and valuable consideration including the mutual agreements contained herein, the parties to the Coal Sales Agreement do hereby agree as follows:

	Section 3.01 of the Agreement, as heretofore amended, is hereby further amended by deleting the first sentence in its entirety and replacing it with the following:

"Section 3.01  Identification of Supply Source. The principle source of the coal to be purchased and sold hereunder shall be the Holden 22 Complex owned by Falcon Land Company, Inc. and located in Logan County, West Virginia (the "Complex"). Such coal shall be delivered f.o.b. barge from segregated ground storage or railcars at the Dominion Terminal Associates Coal Pier located at Newport News, Virginia ("Dominion Terminal"). These facilities collectively shall be referred to as a source complex."

2.   Section 3.02 of the Agreement, as heretofore amended, is hereby further amended by adding a sentence at the end as follows:

"Subject to the provisions of this section 3.02, Buyer and Seller hereby recognize the Camp Creek Complex owned by Riverton Coal Production, Inc. and located in Wayne County, West Virginia as a substitute supply source."

3.    Section 4.02 of the Agreement is hereby amended by adding an additional paragraph at the end of the present text as follows:

"For coal delivered under this Agreement f.o.b. barge at the Dominion Terminal, Buyer shall pay a transportation charge of $17.85 per ton as of the effective date of this Amendment through the remaining term of the Agreement. This charge will reimburse Seller for all coal transportation charges to include costs to transport the coal from the Complex to Dominion Terminal, and any storage, dumping, docking and handling fees levied at that facility. This transportation charge shall not be subject to the five percent (5.0%) annual adjustment as provided under this Section 4.02."

4.   Section 5.02 of the Agreement is hereby amended by adding a sentence at the end of the current text as follows:

"This Section 5.02 shall not apply to shipments delivered under this Agreement f.o.b. barge at Dominion Terminal. Buyer shall bear the risk of loss of each such shipment after loading into barges at Dominion Terminal."

5.   Section 5.04 of the Agreement is hereby amended by adding a sentence at the end as follows:

"Notwithstanding the preceding sentence, for coal shipments delivered under this Agreement f.o.b. barge at Dominion Terminal, the gross weight of coal shipped, for all purposes, shall be conclusively established by outbound belt scale at time of loading at Dominion Terminal."

6.   All capitalized terms shall have the meaning ascribed to them in the Agreement, as amended, unless otherwise defined in this Amendment.

7.   Except as specifically modified herein, all other terms and provisions of the Agreement, as previously amended, shall remain in full force and effect.

          IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.

BUYER:

COGENTRIX VIRGINIA LEASING CORPORATION

By:            /s/ TONY HALCOMB          

        Title:  Vice President Operations

SELLER:

ARCH COAL SALES COMPANY, INC.

By:            /s/ JOHN EAVES          

        Title:  PresidentAMENDMENT NO. 2 TO BARGE TRANSPORTATION AGREEMENT

THIS AMENDMENT NO. 2 (the "Amendment") is made, entered into and effective as of January 1, 2002 and amends that certain Barge Transportation Contract dated December 23, 1986, as amended, between COGENTRIX VIRGINIA LEASING CORPORATION and  McALLISTER TOWING AND TRANSPORTATION, INC. (f/n/a  McALLISTER BROTHERS, INC.).

RECITALS

WHEREAS, McAllister has provided barge transportation services to Cogentrix under the Contract since June, 1988.

WHEREAS, the designated Loading Port under the Contract is currently a single location and the Parties desire to provide for a second, alternative location, either of which may be the Loading Port on any given dispatch by Cogentrix.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the Parties agree to further amend and modify the Contract as follows:

	
1.
	
All capitalized terms shall have the meaning ascribed to them in the Contract, as amended, unless otherwise defined in this Amendment No. 2

	
2.
	
Section 2. of the Contract, Loading and Discharging Ports, is hereby amended by deleting the first full sentence in its entirety and inserting in its place the following:

"Commencing on the effective date hereof, Cogentrix shall, on a trip by trip basis, dispatch the vessel to a safe berth at either (a) Norfolk Southern Pier Number 6, Norfolk, Virginia, or (b) Dominion Terminal Associates Coal Pier, Newport News, Virginia (each individually referred to hereinafter as "Loading Port"), or so near thereto as she may safely proceed for the loading of coal."

	
3.
	
Section 19. of the Contract, Term, is hereby amended by deleting the date "December 31, 2002" and inserting in its place the date "April 30, 2003."

	
4.
	
Except as specifically modified herein, all other terms and provisions of the Contract, as previously amended, shall remain in full force and effect.

COGENTRIX VIRGINIA LEASING CORPORATION

By:           /s/ C. A. HALCOMB                     

       C.A. Halcomb

       Vice President-Operations

McALLISTER TOWING AND TRANSPORTATION, INC. 

By:           /s/ ARTHUR F. KNUDSEN          

       Arthur F. Knudsen

       Vice President/General Manager

       McAllister Towing of Virginia, Inc.Amendment to Employment Agreement

          THIS AMENDMENT (this "Amendment") to the Employment Agreement (the "Employment Agreement") dated as of January 1, 1999 and amended as of February 16, 2001, by and between Cogentrix Energy, Inc. (the "Company"), and James R. Pagano (the "Executive"), is entered into effective as of November 12, 2001. 

W I T N E S S E T H :

          WHEREAS, the Company believes that, in the event it is confronted with a Change of Control of the Company (as defined in the Employment Agreement), continuity of management will be essential to its ability to evaluate and respond to such change in ownership in the best interests of its shareholders;

          WHEREAS, the Company understands that any such Change of Control may present significant concerns for the Executive with respect to his financial and job security;

          WHEREAS, the Company desires to assure itself of the Executive's services during the period in which it is confronting such Change of Control and to provide the Executive certain financial assurances to enable the Executive to perform the responsibilities of his position without undue distraction and to exercise his judgment without bias due to his personal circumstances; 

          WHEREAS, the Company desires to facilitate an efficient transition during the period following any such Change of Control;

          WHEREAS, the Company wishes to retain for the immediate future the expertise and services of the Executive in order to maintain continuity of the business following a Change of Control; and

          WHEREAS, to achieve these objectives, the Company and the Executive desire to amend the Employment Agreement to provide the Company and the Executive with certain rights and obligations upon the occurrence of a Change of Control.

          NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the Company and the Executive hereby agree to the following:

          1.         Effectiveness and Term of Amendment; Employment. 

          (a)        This Amendment shall only become effective in the event of a Change of Control and, in such event, shall remain in full force and effect from the date of the Change of Control until the end of the Post-Change of Control Employment Period (as defined below).

          (b)        Subject to this Amendment and the Employment Agreement, Executive hereby acknowledges and agrees that it is his intention to remain employed by the Company (or its successor) for the Six-Month Period (as defined below).

          2.        Payment to Executive Upon Change of Control.  In the event of a Change of Control, the Company shall pay to the Executive the amount set forth in Section 4(a) of the Employment Agreement.  Payment shall be made in full on the date of the Change of Control and shall be wired in immediately available funds to the bank account utilized for Executive's monthly payroll.  This payment shall be in lieu of any payment otherwise due under Sections 4(a) and 5(a) of the Employment Agreement.  

          3.        Base Salary During Post-Change of Control Employment Period.  During the Post-Change of Control Employment Period, the Executive's Base Salary shall be not less than the Executive's Base Salary in effect immediately prior to the Change of Control.  The Base Salary may be increased, but shall not be decreased, during such Post-Change of Control Employment Period, in accordance with the Company's (or its successor's) normal practice.

          4.        Certain Payments under Bonus, Incentive Bonus and Profit Sharing Plans.

          (a)        Termination of Employment by the Company Without Cause or by the Executive for Good Reason.  In the event of a termination of the Executive's employment during the Six-Month Period (I) by the Company (or its successor) other than for Willful Misconduct (as defined in the Incentive Bonus Plan) or (II) by the Executive for Good Reason (as defined below) or in the event the Executive's employment has not terminated as of the end of the Six-Month Period, the Company shall pay to the Executive a lump sum payment of an amount equal to:

(i)          the aggregate amount of the Bonus, Incentive Bonus and Profit Sharing Plan Distribution (each of the foregoing terms as defined below) paid or payable to the Executive for services rendered to the Company in respect of the most recently completed fiscal year immediately prior to the year in which the Change of Control occurred; divided by

(ii)         365; multiplied by

(iii)        the number of calendar days in the Post-Change of Control Employment Period.

          In the event of a termination of the Executive's employment by the Company other than for Willful Misconduct during the Six-Month Period, the lump sum payment contemplated by this Section 4(a) shall be computed by adding an additional 30 calendar days to the number of calendar days calculated to be in the Post-Change of Control Employment Period in Section 4(a)(iii) hereof; provided, however, that the addition of these 30 days shall in no event cause the total number of days in the Post-Change of Control Employment Period to exceed 180.  Payment of the amount described in this Section 4(a) shall be made in full within ten business days following the date of termination of employment or following the last business day of the Six-Month Period, as applicable, and shall be wired in immediately available funds to the bank account utilized for Executive's monthly payroll.

          (b)        Payment of Pre-Change of Control Bonus.  In the event of a termination of the Executive's employment during the Window Period (as defined below) for any reason other than Willful Misconduct, the Company shall pay to the Executive, in accordance with the terms and conditions of the Incentive Bonus Plan and the Profit Sharing Plan and in accordance with the past practice of the discretionary bonus policy, a pro rata payment in respect of the period from the beginning of the Plan Year (as defined in such plans) and ending on the date of the Change of Control.  The Executive shall be entitled to receive such pro rata payment as of the applicable dates on which bonuses under the terms and conditions of the Incentive Bonus Plan and the Profit Sharing Plan and in accordance with discretionary bonus policy would ordinarily otherwise be paid.

          (c)        Termination of Employment for Other Reason.  In the event of a termination of the Executive's employment by the Company for Willful Misconduct, the Executive will not be entitled to any bonus payment under this Section 4.

          5.        Effectiveness of Employment Agreement and Incentive Compensation Plans and Policies.  Except as specifically set forth herein, the Employment Agreement and the incentive compensation plans and policies of the Company shall remain in full force and effect in accordance with their terms and conditions; provided, however, that amounts otherwise payable under the incentive plans and policies identified herein, in respect of the Company's financial performance for the year in which the Change of Control occurs, shall be reduced (but not below zero) by the amounts paid or payable under Section 4(a) and Section 4(b) hereof.  

          6.        Inconsistencies.  In the event of any inconsistency between any provision of this Amendment, on the one hand, and the terms of the Employment Agreement or the incentive compensation plans and policies, on the other hand, the provision in this Amendment shall prevail.

          7.        Defined Terms.  Capitalized terms used but not defined or identified herein shall have the meanings set forth in the Employment Agreement. 

          (a)        "Post-Change of Control Employment Period" shall mean that period of time immediately following the Change of Control equal  to the shorter of (i) the period of time the Executive remains  employed by the Company (or its successor) immediately  following the Change of Control and (ii) the Six-Month Period.

          (b)        "Six-Month Period" shall mean the 180-day period beginning on the date on which the Change of Control occurs.

          (c)        "Window Period" shall mean the one year period following the Change of Control.

          (d)        "Good Reason" shall mean (i) a material adverse alteration in the nature or status of the Executive's responsibilities from those provided in the Employment Agreement or the transfer of a significant portion of such responsibilities to one or more other persons, (ii) the failure by the Company to pay or provide to the Executive, within 30 days of a written demand therefore, any amount of compensation or any benefit which is due, owing and payable pursuant to the terms hereof or of any applicable plan, program, arrangement or policy or (iii) the breach in any material respect by the Company of any of its other obligations or agreements set forth herein or in the Employment Agreement and the failure by the Company to cure such breach within 30 days after written notice thereof from the Executive.

          (e)        "Bonus" shall mean the discretionary cash payment made by the Company to the Executive at the sole discretion of the Chief Executive Officer.

          (f)        "Incentive Bonus" shall mean the incentive compensation received by the Executive pursuant to the Incentive Bonus Plan.

          (g)        "Profit Sharing Plan Distribution" shall mean the cash payment Executive is entitled to receive pursuant the Profit Sharing Plan.

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

COGENTRIX ENERGY, INC.

                 /s/ DAVID J. LEWIS                

By:  David J. Lewis

Its:   Chairman & CEO

            /s/  JAMES R. PAGANO               

James R. Pagano

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