Document:

<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

                                       67
<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/
   --------------------------------            ---------------------------------
Name: Raymond J. McElhaney                 Name: _______________________________
Title: President                           Title: ______________________________
Date: 4/20/2005                            Date: _______________________________

                                       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/
   --------------------------------            ---------------------------------
Name: Raymond J. McElhaney                 Name: _______________________________
Title: President                           Title: ______________________________
Date: 4/20/05                              Date: _______________________________

                                       2<PAGE>

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

                                                                   EXHIBIT 10.27

                              COAL SALES AGREEMENT

      THIS COAL SALES AGREEMENT (this "Agreement"), dated the 17th day of
February, 2005, between ANKER WEST VIRGINIA MINING COMPANY, INC., a West
Virginia corporation with principal offices at 2708 Cranberry Square,
Morgantown, West Virginia 26508 ("Seller"), and ALLEGHENY ENERGY SUPPLY COMPANY,
LLC, a Delaware limited liability company with its principal offices at 4350
Northern Pike, Monroeville, Pennsylvania 15146-2841 and MONONGAHELA POWER
COMPANY, an Ohio corporation with its principal offices at 1310 Fairmont Avenue,
Fairmont, WV 26554 (hereinafter collectively referred to as "Buyer"). Allegheny
Energy Service Corporation is referred to in this Agreement as "Buyer's Agent".

                                   WITNESSETH:

      WHEREAS, Anker Energy Corporation ("Anker Energy"). The Sycamore Group,
LLC ("Sycamore") and Buyer are parties to that certain Coal Sales Agreement
dated May 25, 2004 (the "Sycamore Agreement") relating to the supply of coal
from Sycamore's Sycamore No. 1 Mine, located in Harrison County, West Virginia,
in U.S.B.M. Mine District No. 3, to Buyer's Harrison Power Station (the
"Station") at the rate of 50,000 tons per month, subject to periodic upward or
downward quarterly adjustments by Buyer within certain limits specified therein
(as so adjusted, the "Sycamore Adjusted Base Amount"), for a two year term
ending on April 30, 2006; and

      WHEREAS, Seller desires to sell, and Buyer desires to purchase additional
tons of coal from Seller's Harrison Division Sycamore No. 2 Mine (the "Source
Mine"), located in Harrison County, West Virginia, in U.S.B.M. Mine District No.
3, and accordingly Seller and Buyer desire to enter into this Agreement;

      NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, and intending to be legally bound, Seller and Buyer
hereby agree as follows:

1.0   TERM AND QUANTITY

      1.1   The term of this Agreement (the "Term") shall be the period
            commencing on the date hereof and ending on the date of exhaustion
            of the Reserve Commitment (as hereinafter defined) (the "Expiration
            Date").

      1.2   During the Term, Buyer agrees to buy, and Seller agrees to sell,
            [_ _ _ _] produced by the Source Mine from existing reserves, as
            identified on Schedule 1.2 hereto, currently estimated to be not
            less than [_ _ _ _], and from all additional reserves assigned to
            Seller for purposes of this Agreement by mutual consent of the
            parties (collectively, the "Reserve Commitment"), at the following
            annual rates (the "Annual Base Amount"):

<TABLE>
<CAPTION>
CALENDAR YEAR                        ANNUAL BASE AMOUNT
<S>                       <C>
    2005                      Actual production from the Source
                                Mine, estimated to be [_ _ _ _] tons

    2006                      Actual production from the Source
                                Mine, estimated to be [_ _ _ _] tons,
                          but at a production rate of not less than
</TABLE>

<PAGE>

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

                                           [_ _ _ _] by October 1, 2006

2007-Expiration Date                       [_ _ _ _]

            Buyer shall have the option, upon not less than six (6) months'
            prior notice to Seller, to increase the Annual Base Amount (for
            calendar years occurring after 2005) by [_ _ _ _] (prorated in the
            case of the portion of the calendar year remaining after such
            increase takes effect) so as to increase the Annual Base Amount to
            [_ _ _ _], subject to availability of equipment at the Source Mine
            required by Seller to produce coal to be sold hereunder in such
            quantities ("Increased Production Equipment"). If Seller is unable
            to produce the increased Annual Base Amount due to unavailability of
            the Increased Production Equipment, Seller shall use commercially
            reasonable efforts to obtain the Increased Production Equipment
            (including, without limitation, by diverting equipment from other
            mines to the extent not currently in use or anticipated to be used
            in such other mines) prior to the expiration of such six month
            period, and in any event shall obtain the Increased Production
            Equipment prior to the expiration of eighteen (18) months after
            receipt of Buyer's notice. Once the Annual Base Amount is increased
            pursuant to this Section 1.2, it may not be decreased without the
            mutual consent of the parties. Seller shall not change the source of
            the coal supplied hereunder (the "Base Source Coal") without the
            prior written consent of Buyer's Agent. Seller represents to Buyer
            that the current assigned reserves of the Source Mine comprising the
            Reserve Commitment are as set forth in Schedule 1.2 hereto. Seller
            shall not reduce the assigned reserves of the Source Mine below that
            reflected in Schedule 1.2 without the prior written consent of
            Buyer's Agent.

      1.3   The Sycamore Adjusted Base Amount remaining to be delivered to Buyer
            under the Sycamore Agreement from the date hereof through April 30,
            2006, currently scheduled in the monthly quantities set forth in
            Schedule 1.3 hereto (the "Sycamore Monthly Scheduled Amounts"),
            shall continue to be delivered to the Station until the tonnage
            commitment under the Sycamore Agreement has been satisfied. If
            Sycamore fails to deliver the Sycamore Monthly Scheduled Amounts
            under the Sycamore Agreement (for any reason other than force
            majeure or a default by Buyer thereunder) for more than three months
            (consecutive or otherwise) in any six month period, or if the
            Sycamore Agreement is terminated for any reason other than Buyer's
            unexcused failure to accept deliveries of the Sycamore Adjusted Base
            Amount thereunder (including, without limitation, by reason of the
            rejection of such contract by Anker Energy or Sycamore (or any
            trustee on its or their behalf) in any case or proceeding commenced
            by or against Anker Energy or Sycamore under the United States
            Bankruptcy Code, 11 U.S.C. Section 101 et seq.), Buyer, at its
            option, may make up any deficiency in deliveries of the Sycamore
            Adjusted Base Amount under this Agreement. In such event, the
            applicable monthly quantities to be delivered by Seller hereunder in
            any month shall be determined based on the sum of the Sycamore
            Monthly Scheduled Amount for such month and the monthly scheduled
            quantity of coal to be delivered to Buyer for such month established
            pursuant to Section 2.1 of this Agreement, and Buyer will credit any
            tonnage (the "Sycamore Makeup Amount") delivered by Seller hereunder
            in any month up to the Sycamore Monthly Scheduled Amount for such
            month against Sycamore's tonnage commitment under the Sycamore
            Agreement, with any tonnage delivered by Seller hereunder in excess
            of the Sycamore Monthly Scheduled Amount being credited to the
            monthly scheduled quantity of coal to be delivered to Buyer for such
            month

                                        2
<PAGE>

            established pursuant to Section 2.1. The Sycamore Makeup Amount
            delivered by Seller hereunder shall be invoiced and paid for by
            Buyer in accordance with Section 7.4 at the applicable base price
            (expressed in cents/MMBtu) at the time of delivery set forth in the
            Sycamore Agreement (or, in the case of deliveries after April 30,
            2006, at the applicable base price in effect under the Sycamore
            Agreement on April 30, 2006).

      1.4   If, during any calendar year, Seller fails to deliver, or Buyer
            fails to accept, other than by reason of force majeure, the Annual
            Base Amount to be delivered during such calendar year, the party not
            at fault shall have the right to schedule the shortfall for delivery
            in the following calendar year. Such party shall provide written
            notice to the other party within thirty (30) days after the end of
            such calendar year of the shortfall tonnage it elects to deliver or
            accept in such following calendar year; provided, however, that in
            no event shall Seller be obligated to produce and deliver, nor shall
            Buyer be obligated to accept, aggregate deliveries of coal as a
            result of such rescheduled deliveries in excess of the applicable
            limitation set forth in Section 2.1.

2.0   DELIVERY AND BILLING WEIGHT

      2.1   Buyer's Agent and Seller shall develop monthly and weekly delivery
            schedules for each calendar year which are consistent with the
            Annual Base Amount for such calendar year and the Station's annual
            scheduled maintenance outages. No later than 30 days in advance of
            each calendar year, Buyer's Agent will provide Seller with the
            monthly delivery schedule for each month of such calendar year for
            the Annual Base Amount to be delivered; provided, however, that in
            no event shall Seller be obligated to produce and deliver an
            aggregate quantity of coal in such calendar year in excess of the
            Annual Base Amount if such excess production is greater than what
            the Source Mine can reasonably accommodate based on existing Source
            Mine equipment and existing permits, nor shall Buyer be obligated to
            schedule or accept delivery of an aggregate quantity of coal in
            excess of the annual tonnage commitment under both the Sycamore
            Agreement and this Agreement if such excess deliveries are greater
            than what the Station can reasonably accommodate based on existing
            Station equipment and existing permits. In the event of any
            conflict, the tonnage to be delivered under the Sycamore Agreement
            shall have priority.

      2.2   Buyer reserves the right to designate a destination other than
            Harrison Power Station for delivery of coal to be supplied by Seller
            hereunder and to consign shipments to such alternate destination. In
            the event Buyer's Agent designates an alternate destination for
            delivery of any coal supplied by Seller hereunder, Buyer's Agent
            shall designate the method of delivery to such alternate
            destination. Arrangements and charges for transportation and
            delivery of the coal from the applicable delivery point to the
            destination designated by Buyer shall be the sole responsibility of
            Buyer. Buyer shall not be required to ship tonnage to an alternate
            destination. Seller shall not be responsible for any transportation
            arrangements to an alternate destination.

      2.3   Buyer reserves the right, at any time, and from time to time, at its
            sole discretion, to sell any or all coal purchased by Buyer under
            this Agreement to any person, firm, or corporation designated by
            Buyer (a "Third Party Purchaser"): provided, however, that Buyer's
            Agent shall give Seller not less than ten (10) days' notice of any
            proposed sale to a Third Party Purchaser (including the terms of
            such sale) and Seller shall have the right, at any time prior to the
            expiration of such ten (10)

                                        3
<PAGE>

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

            day period, to either release Buyer from its commitment to purchase
            such coal from Seller or to repurchase such coal from Buyer at the
            same price offered by the Third Party Purchaser. Buyer's Agent will
            designate the destination and method of delivery to any Third Party
            Purchaser and Buyer shall be responsible for any additional
            transportation arrangements or costs associated therewith.

      2.4   Seller shall deliver the coal to be sold hereunder by truck, unless
            otherwise agreed by Buyer and Seller. Title to and risk of loss of
            any coal delivered to Buyer pursuant to this Agreement shall pass to
            Buyer when such coal has been delivered to Buyer F.O.B. the Station,
            or if Buyer designates an alternate destination for delivery of coal
            pursuant to Section 2.2 or 2.3, when such coal has been delivered to
            Buyer F.O.B. such other delivery point as Seller and Buyer may
            agree.

3.0   QUALITY AND SPECIFICATIONS

      3.1   The coal to be supplied by Seller hereunder shall meet the following
            specifications on a composite "as-received" basis averaged over each
            Sample Period specified in Article 4.0:

<TABLE>
<S>                              <C>
Btu (Btu/#) .................    Not less than [_ _ _ _]
Total Moisture (%) ..........    Not to exceed [_ _ _ _]
Ash (#Ash/MMBtu) ............    Not to exceed [_ _ _ _]
Sulfur (#/MMBtu) ............    Not less than [_ _ _ _], and
                                 not to exceed [_ _ _ _]
Volatile Ranking ............    [_ _ _ _]
Grindability ................    Not less than [_ _ _ _]
Size ........................    Not to exceed [_ _ _ _]
</TABLE>

            If the quality specifications specified above are to be met by the
            blending of coals with different characteristics, such blending must
            take place off Station property.

      3.2   In addition, the coal shall not contain a prohibitive amount of
            fines and shall be free of other extraneous materials or any other
            matter affecting coal quality, including earth, rock, wood, bone,
            metal, sulfur balls or other impurities which would adversely affect
            the operation of Buyer's equipment.

4.0   WEIGHING, SAMPLING AND ANALYSIS

      4.1   The final determination of the actual quantity of coal delivered to
            Buyer hereunder shall be made by Buyer's weighing of the coal on the
            truck scales at the Station or any alternate destination designated
            by Buyer's Agent, or such other method as the parties may mutually
            agree upon. Buyer shall record such weights in Buyer's transaction
            receipt and report or weight ticket for each shipment. Absent
            manifest error, the scale weights recorded in the transaction
            receipt and report or weight ticket prepared by Buyer shall be
            controlling as to the quantity of coal delivered.

      4.2   Except as otherwise provided in Section 4.5, sampling and analysis
            of coal delivered pursuant to this Agreement shall be determined by
            analyses of representative samples collected by Buyer of the coal
            supplied by Seller, which analyses shall be performed by Buyer's
            Agent in accordance with methods and standards approved by the
            American Society for Testing and Materials

                                        4

<PAGE>

            ("ASTM"), or such other methods and standards as the parties may
            mutually agree upon. If the results of the analyses performed to
            determine compliance with the quality specifications set forth in
            Article 3.0 indicate concentration levels for any specification that
            are within the precision and bias limits applicable for the ASTM
            test method utilized, then the coal shall be deemed to comply with
            such specification.

      4.3   Each calendar month during the Term shall be divided into three
            sample periods. The first period shall be the 1st through the 10th
            day of the month; the second period the 11th through 20th day of the
            month; and the third period the 21st through the last day of the
            calendar month (each such period being referred to herein as a
            "Sample Period"). Buyer's Agent shall separately determine a
            weighted average "as-received" analysis of the coal delivered over
            each Sample Period based on daily samples taken during such Sample
            Period (calculated as the weighted average results of the daily "as
            received" analyses and the associated weights of the samples
            analyzed). As soon as practicable after the end of each Sample
            Period, Buyer's Agent shall advise Seller in writing of the results
            of the analysis for such Sample Period. Seller may observe the
            collection and preparation of samples, and, upon written request of
            Seller, Buyer shall make available to Seller a representative
            portion of each daily sample.

      4.4   In the event Buyer's Agent designates an alternate destination for
            any coal supplied by Seller hereunder, then, unless otherwise agreed
            by the parties, said coal shall be weighed on scales at the
            alternate destination designated by Buyer's Agent, or by such other
            method as the parties may mutually agree upon, and shall be sampled
            and analyzed in accordance with the procedures set forth in Sections
            4.2 and 4.3 based on samples taken at such alternate destination.

      4.5   In the event of any sale by Buyer of any coal purchased by Buyer
            hereunder to a Third Party Purchaser, Seller's weights and analyses
            shall govern for the purpose of determining the quantity of such
            coal, its compliance with the quality specifications and any
            adjustments to the purchase price payable by Buyer to Seller based
            therein, provided such weights and analyses shall be performed in
            compliance with ASTM methods and standards or such other methods and
            standards as the parties may agree upon, and shall be subject to
            Buyer's rights to examine Seller's weight and analysis records and
            to have a representative present when such weighing, sampling and
            analyses are performed.

5.0   REJECTION OF SHIPMENTS

      5.1   Buyer shall have the right, in its sole discretion, to reject
            individual shipments of coal which it or Buyer's Agent judges to be:

            5.1.1 Oversize, or

            5.1.2 Finer or wetter than that which existing station equipment is
                  capable of handling or burning efficiently, or

            5.1.3 Considered to contain excess amounts of rock, wood, bone,
                  metal, sulfur balls, or other impurities which would adversely
                  affect the operation of Buyer's equipment, or

                                        5

<PAGE>

            5.1.4 Not homogeneously blended in each delivery in a manner that
                  will ensure reasonably uniform consistency as to size and
                  quality.

      5.2   If Buyer rejects any coal shipment in accordance with Section 5.1,
            Buyer or Buyer's Agent shall notify Seller of its rejection and
            Seller, at its expense, shall remove such rejected coal within seven
            (7) calendar days after rejection and reimburse Buyer for all
            transportation, demurrage and handling charges, if any, incurred by
            Buyer associated with such rejected shipment. The provisions of this
            Section 5.2 shall survive termination of this Agreement.

      5.3   Tonnage deficiencies in any calendar year resulting from Buyer's
            rejection of any coal shipment may, at Buyer's option, be deducted
            from the Annual Base Amount for such calendar year.

6.0   SUSPENSION AND TERMINATION

      6.1   Buyer may, at its option, immediately suspend deliveries hereunder
            until such time as Seller can provide Buyer's Agent with assurances
            satisfactory to Buyer's Agent that Seller will fully perform its
            obligations hereunder if:

            6.1.1 The coal delivered fails to meet any of the quality
                  specifications or ratios set forth in Article 3.0 on a
                  composite "as-received" basis averaged over each Sample Period
                  for two (2) Sample Periods (consecutive or otherwise) during
                  any two (2) month period, or

            6.1.2 The coal delivered on any two days (consecutive or otherwise)
                  during any Sample Period exceeds by 10% or more the maximum
                  permitted ratios for sulfur and/or ash content set forth in
                  Article 3.0, or

            6.1.3 The quantity of coal delivered during any two consecutive
                  calendar months does not approximate, other than by reason of
                  force majeure, the delivery schedule mutually agreed to by
                  Buyer's Agent and Seller as provided in Section 2.1.

      6.2   Should inventories of coal at the Station or other applicable
            destination, in the judgment of Buyer's Agent, increase beyond
            desired levels, Buyer may reduce or suspend scheduled deliveries
            until such time as inventories return to acceptable levels, provided
            Seller is given an opportunity to make up deliveries within the
            following calendar year, subject to the limitation set forth in
            Section 2.1. Subject to Buyer's obligations under contracts in
            existence on the date hereof, Buyer shall reduce or suspend spot
            purchases before reducing or suspending scheduled deliveries by
            Seller under this Section 6.2, and shall reduce or suspend
            deliveries by Seller under this Section 6.2 proportionally with all
            other suppliers of coal to the Station based on Seller's and such
            other suppliers' respective tonnage commitments.

      6.3   If within ten (10) calendar days of suspension Seller does not
            provide assurances, in writing, reasonably satisfactory to Buyer's
            Agent that it will fully perform its obligations hereunder, or if
            Seller fails to meet either the required specification criteria or
            delivery schedule at any time during the next thirty-day delivery
            period after Buyer's Agent's authorization to resume deliveries
            (except for de minimus noncompliance), Buyer may terminate this
            Agreement.

                                        6

<PAGE>

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

      6.4   During periods of suspension pursuant to Section 6.1, Buyer shall
            have the right to buy replacement coal of similar quality and in
            such quantities (not exceeding the suspended quantities) as Buyer
            deems necessary to maintain operations and desired levels of
            inventories, and Seller shall be responsible for all additional
            costs Incurred by Buyer associated therewith.

      6.5   Except as provided in Section 6.2, tonnage deficiencies in any
            calendar year resulting from any suspension of deliveries may, at
            Buyer's option, be deducted from the Annual Base Amount for such
            calendar year.

7.0   PRICING AND PAYMENT

      7.1   Buyer shall pay to Seller, subject to the quality adjustments
            contained herein, a base purchase price per million BTU for all coal
            delivered hereunder (the "Base Price") at the rate of [_ _ _ _]. If
            Buyer exercises its option to increase the Annual Base Amount
            pursuant to Section 1.2, then the Base Price less the transportation
            cost allowance set forth in Section 8.5 (as each may be adjusted in
            accordance with Article 8.0) (such remainder, the "Base Mine Price")
            applicable to all coal delivered to Buyer thereafter shall be
            reduced by an amount equal to [_ _ _ _] of the Base Mine Price then
            in effect.

      7.2   The Base Price is based on such coal meeting the individual quality
            specifications set forth in Article 3.0 as received by Buyer.
            Whenever the coal delivered during any Sample Period does not
            conform to such quality-specifications, the Base Price shall be
            adjusted as follows:

            7.2.1 Moisture Content. If the weighted average moisture content
                  of the coal received for any Sample Period exceeds [_ _ _ _],
                  the Base Price payable for such coal shall be reduced by
                  [_ _ _ _].

            7.2.2 Ash/Btu Content. If the weighted average ash content of
                  the coal received for any Sample Period exceeds [_ _ _ _],
                  the Base Price payable for such coal shall be reduced
                  by [_ _ _ _].

            7.2.3 Sulfur/Btu Content. If the weighted average sulfur content of
                  the coal received for any Sample Period exceeds the ratios
                  specified below, the Base Price payable for such coal shall be
                  reduced according to the following schedule:

<TABLE>
<CAPTION>
# Sulfur/MMBtu                Adjustment
--------------                ----------
<S>                           <C>
[_ _ _ _]                     [_ _ _ _]
[_ _ _ _]                     [_ _ _ _]
[_ _ _ _]                     [_ _ _ _]
</TABLE>

      7.3   Each of the adjustments set forth in Section 7.2 are independent of
            one another, and the applicable Base Price for any Sample Period
            shall be reduced by the cumulative total of all applicable quality
            adjustments for such Sample Period (the Base Price, as so adjusted,
            being referred to herein as the "Adjusted Base Price").

                                        7

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

      7.4   Buyer shall, on a [_ _ _ _] basis, calculate the cumulative payment
            due Seller for each of the [_ _ _ _] Sample Periods which comprise
            such [_ _ _ _] in accordance with the provisions of this Agreement,
            and shall submit an invoice to Seller for all coal delivered and
            accepted hereunder during such [_ _ _ _], showing the quantity of
            coal purchased for each Sample Period to which it relates
            (accompanied by supporting documentation which shall include a
            detailed log of daily delivery transactions) and the Adjusted Base
            Price applicable thereto. Payment to Seller will be made on or
            before [_ _ _ _]. Absent manifest error, the invoices prepared by
            Buyer shall be controlling as to the amounts due Seller hereunder.
            Seller shall not readdress or object to a payment issued by Buyer
            after [_ _ _ _] days has elapsed from the date of the original
            invoice.

8.0   BASE PRICE ESCALATION ADJUSTMENTS

      8.1   As of the date hereof, the Base Price is comprised of the following
            base dollar amounts (the "Base Dollar Amounts") of the following
            components and subcomponents of Seller's cost to mine and produce
            coal. The Base Price and the Base Dollar Amounts shall be adjusted
            to reflect changes in such components and subcomponents, such that
            the resulting Base Price applicable to any coal consigned for
            shipment on and after the effective date of any such adjustment
            shall remain in effect until the Base Price is again adjusted
            pursuant to this Section. All such adjustments shall be accompanied
            by appropriate documentation (which shall be furnished by Seller to
            Buyer) and shall be subject to verification by Buyer.

<TABLE>
<CAPTION>
                                     Base Dollar
                        Sub-          Amount Per
   Component         component      Ton(as(1/1/05)         Index or Method
---------------     ------------    --------------    ---------------------------
<S>                 <C>             <C>               <C>
Labor               Esc.- Ref.        $ [_ _ _ _]     Bituminous coal and lignite
                    Benchmark                         surface mining, Average
                                                      Hourly Earnings of
                                                      Production Workers (CEU
                                                      Series ID: CEU1021211106)

Medical             Esc.- Ref.        $ [_ _ _ _]     CPI -- All Urban Wage
                    Benchmark                         Earners Medical Care
                                                      (CPI Series ID:
                                                      CWUR0000SAM)

Steel Supplies      Esc.- Ref.        $ [_ _ _ _]     Fabricated Metal
                    Benchmark                         Products (PPI Series
                                                      ID: PCU331--331--

Fuel &              Esc.- Ref.        $ [_ _ _ _]     Petroleum Products,
Lubricants          Benchmark                         Refined (PPI Series ID:
                                                      WPU057)

Subtotal                              $ [_ _ _ _]     Subject to Supplemental
(Variable Cost                                        Adjustment
Components)

Supplies            Esc. - Index      $ [_ _ _ _]     Industrial Commodities,
                    Based                             Less Fuels and Related
                                                      Products and Power (PPI
                                                      Series ID: WPU03T15M05)

Repairs &           Esc. - Index      $ [_ _ _ _]     Mining Machinery Equipment
Maintenance         Based                             (PPI Series ID: WPU1192)

Electric Power      Esc. - Index      $ [_ _ _ _]     Industrial Power (PPI
                    Based                             Series ID: WPU0543)

Subtotal (All                         $ [_ _ _ _]
Escalating
Components)
</TABLE>

                                        8

<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>            <C>
Governmental        Pass               $   [_ _ _ _]  Federal Black Lung Excise Tax
Assessment          Through
Components                             $   [_ _ _ _]  Federal Reclamation Fees

                                       $   [_ _ _ _]  WV Severance Tax

                                       $   [_ _ _ _]  WV Workers Comp

Fixed Component                        $   [_ _ _ _]  Fixed for the Term and not
                                                      subject to adjustment

Total-All                              $   [_ _ _ _]  Base Mine Price
Components

Trucking                               $   [_ _ _ _]  Base Transportation Cost

                                       $   [_ _ _ _]  Base Price (FOB Station)
</TABLE>

      8.2   The Labor, Medical, Steel Supplies and Fuel & Lubricants components
            of the Base Mine Price set forth above (collectively, the "Variable
            Cost Components"), as well as the Supplies, Repairs & Maintenance
            and Electric Power components of the Base Price set forth above,
            shall be adjusted [_ _ _ _] effective [_ _ _ _] (each such date, an
            "Adjustment Date"), commencing [_ _ _ _]. The first adjustment
            effective as of [_ _ _ _] shall be determined by comparing the
            average value of each respective index for [_ _ _ _] to the average
            value of each respective index for [_ _ _ _]. As of each Adjustment
            Date thereafter, the average value of each respective index for the
            [_ _ _ _] preceding such Adjustment Date shall be compared to the
            average value of each such index for the [_ _ _ _] preceding such
            Adjustment Date. For example, the [_ _ _ _] adjustment shall compare
            the average value of each respective index for [_ _ _ _] to the
            average value of each such index for [_ _ _ _]. In each such case,
            [_ _ _ _] of the respective change (carried out to four decimal
            places, e.g., 6.124% shall be 0.0612) in each such index shall be
            multiplied by the last previously effective Base Dollar Amount of
            the component or subcomponent correlative thereto. The net amounts
            of increase or decrease so obtained shall be added to or subtracted
            from, as the case may be, such last previously effective Base Dollar
            Amount of the component or subcomponent correlative thereto and the
            resulting amount per ton (rounded to the nearest whole cent) shall
            become the then effective Base Dollar Amount of such component or
            subcomponent of the Base Mine Price. A sample calculation of
            adjustments to such components and subcomponents of the Base Mine
            Price pursuant to this Section 8.2 is attached hereto as Schedule
            8.2.

      8.3   If the Base Mine Price is reduced pursuant to the last sentence of
            Section 7.1, such reduction shall be applied to all components and
            subcomponents of the Base Mine Price then in effect (other than the
            Governmental Assessment Components portion thereof), pro rata in
            accordance with the respective Base Dollar Amounts of such
            components and subcomponents then in effect, so as to reduce the
            aggregate Base Dollar Amounts of all of such components and
            subcomponents by an amount equal to [_ _ _ _] of the Base Mine Price
            then in effect (before giving effect to such reduction). A sample
            calculation of adjustments to such components and subcomponents of
            the Base Mine Price pursuant to this Section 8.3 is attached hereto
            as Schedule 8.3.

                                        9

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

      8.4   The Base Dollar Amounts of the Governmental Assessment Components of
            the Base Mine Price set forth above shall be adjusted for changes in
            federal black lung excise tax, federal reclamation fees, West
            Virginia severance tax and West Virginia workers' compensation
            (which for this purpose shall be limited to base rates, exclusive of
            experience premiums and other adjustments not applicable to
            employers in the mining industry generally) occurring after
            [_ _ _ _], effective as of [_ _ _ _] following the effective date of
            any such change (except when such change is effective on the first
            day of a month, in which case such adjustment shall be effective as
            of such date). The parties agree that the proposed West Virginia
            severance tax, regardless of the form in which it is enacted, will,
            if enacted, be deemed to constitute an additional item of the
            Governmental Assessment Components for purposes of this Section.
            Such amounts shall be adjusted for any related tax credits or other
            credits allowed to Seller. For the purpose of calculating
            adjustments to the Base Mine Price pursuant to this Section 8.4, all
            such adjustments shall be deemed to be based on those governmental
            assessments applicable to underground mining. A sample calculation
            of adjustments to the Governmental Assessment Components of the Base
            Mine Price pursuant to this Section 8.4 is attached hereto as
            Schedule 8.4.

      8.5   The Base Price is also subject to adjustments to the Base
            Transportation Cost (as hereinafter defined) based on changes in
            trucking costs. Such adjustments, if applicable, shall be determined
            and computed in accordance with the methodology set forth in
            Schedule 8.5 attached hereto, shall be paid separately and shall not
            be taken into account in computing any other adjustments to the Base
            Price hereunder. As of the date hereof, the Base Price includes an
            allowance of [_ _ _ _] for truck transportation costs (the "Base
            Transportation Cost"). [_ _ _ _]

      8.6   If upon agreement or final determination, an adjustment to the cost
            per ton is found to be appropriate in accordance with Section 8.2,
            8.3, 8.4 or 8.7, an appropriate credit for such amount (converted to
            an equivalent delivered cents/MMBtu basis), for all coal delivered
            hereunder on and after the effective date of any such adjustment,
            shall be made to the party to whom the benefit of such credit is
            due.

      8.7   [_ _ _ _]

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

      8.8   The indices utilized in calculations made pursuant to this Agreement
            shall be the indices as they are first published. In the event that
            the current base or any index referred to in Section 8.1 or 8.3 is
            converted to a new base, or should the United States Department of
            Labor convert an index from the Standard Industrial Classification
            System to the North American Industry Classification System, then
            conversion tables published by the United State Department of Labor,
            Bureau of Labor Statistics, or the United State Department of
            Commerce, Bureau of Economic Analysis, as the case may be, shall be
            used in re-computing the level of any such index. Should publication
            of any index be discontinued, an index which is as nearly as
            practicable equivalent shall be substituted by mutual agreement of
            the parties. In the event that supervening events or circumstances
            shall render inapplicable any of the methods set forth in this
            Article 8.0 for computing adjustments to the Base Price, the parties
            shall meet promptly to consider and agree upon new or revised
            methods appropriate to the circumstances then prevailing.

      9.0   RE-OPENER

      9.1   [_ _ _ _] during any calendar year after [_ _ _ _] shall exceed
            [_ _ _ _] of the Base Mine Price then in effect (as the same may
            have been adjusted in accordance with Article 8.0), then Seller
            shall have the right at any time within ninety (90) days after the
            end of such calendar year to give Buyer written notice of its
            election to negotiate an adjustment to the Base Price pursuant to
            this Article 9.0; provided, however, that if any such

                                       11
<PAGE>
                                          * CONFIDENTIAL MATERIAL HAS BEEN
                                            OMITTED AND FILED SEPARATELY WITH
                                            THE SECURITIES AND EXCHANGE
                                            COMMISSION. BRACKETS AND UNDERSCORES
                                            DENOTE SUCH OMISSIONS.

             increase occurs prior to [_ _ _ _] as a result of a change in law
             described in Section 12.2, Seller may give a notice to Buyer
             pursuant to this Section within ninety (90) days after the end of
             the calendar year in which such increase occurs. Seller shall
             furnish to Buyer, upon request therefor, sufficient information
             [_ _ _ _] (other than information the disclosure of which would
             breach any confidentiality agreement or other legal requirement by
             which Seller may be bound) to enable Buyer to verify whether such
             condition has been met. Subject to such limitations, Buyer shall
             have the right at its expense to examine, or cause an audit to be
             made of, the records and books of account of Seller with respect to
             its [_ _ _ _].

       9.2   If the market price of coal available to Buyer (F.O.B. Station)
             during any calendar year after [_ _ _ _], as determined by
             responses to Buyer's bid solicitations pursuant to Qualifying Bids
             for coal of similar quality to that required by this Agreement,
             shall be less than [_ _ _ _]% of the Base Price then in effect (as
             the same may have been adjusted in accordance with Article 8.0),
             then Buyer shall have the right at any time within ninety (90) days
             after the end of such calendar year to give Seller written notice
             of its election to negotiate an adjustment to the Base Price
             pursuant to this Article 9.0. Buyer's Agent shall determine a
             weighted average annual price per ton of coal (converted to an
             equivalent delivered cents/MMBtu basis) based on all Qualifying
             Bids received. For purposes of this Section 9.2, "Qualifying Bids"
             must meet the following criteria:

            9.2.1 Each bid must be submitted by a single coal producer (or one
                  or more affiliates of such producer), or direct sales agent
                  of such a coal producer (who possesses reasonably
                  satisfactory evidence of its right to sell such coal), or a
                  coal marketer, who is not an affiliate of Buyer;

            9.2.2 The quality of the coal must meet the quality specifications
                  set forth in Article 3.0 on a composite "as-received" basis,
                  or the bid price shall be appropriately adjusted to take into
                  account differentials between the average Btu, ash and sulfur
                  content per pound, and moisture content, of coal under the bid
                  and the corresponding specifications set forth in Section 3.1
                  and the additional costs (including, but not limited to,
                  emission allowance costs), if any, to Buyer of utilizing such
                  coal; and

            9.2.3 The bids submitted must be for an aggregate tonnage of not
                  less than [_ _ _ _].

            Buyer's Agent shall furnish to Seller, upon request therefor,
            sufficient information concerning its bid solicitations and
            Qualifying Bids (other than information that would fail to maintain
            confidentiality of the bidders, or the disclosure of which would
            breach any confidentiality agreement or other legal requirement by
            which Buyer or Buyer's Agent may be bound) to enable Seller to
            verify whether such condition has been met. Subject to such
            limitations, Seller shall have the right at its expense to examine,
            or cause an audit to be made of, the records and books of account of
            Buyer and Buyer's Agent with respect to the calculation of the
            weighted average price per ton of coal available to Buyer under this
            Section 9.2.

      9.3   If Seller gives a notice to Buyer pursuant to Section 9.1, or Buyer
            gives a notice to Seller pursuant to Section 9.2, the parties shall
            negotiate in good faith to reach agreement on an appropriate
            adjustment to the Base Price, taking into

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

            consideration all relevant factors, [_ _ _ _]

      9.4   If, within ninety (90) days after receipt by Buyer of Seller's
            notice pursuant to Section 9.1 or Seller's receipt of Buyer's notice
            pursuant to Section 9.2, as the case may be, the parties have been
            unable to reach agreement on a new Base Price in accordance with
            Section 9.3, then either party shall have the right to terminate
            this Agreement upon not less than [_ _ _ _] prior written
            notice to the other party.

10.0  RESERVES AND SOURCES

      Seller represents and warrants to Buyer that Seller now owns, leases or
      controls mining and/or processing operations with sufficient reserves of
      coal to enable Seller to supply Buyer with the total quantity of coal
      specified in this Agreement for the Term of this Agreement. Seller will
      not sell or agree to sell to others coal from such reserves which would
      jeopardize Seller's ability to supply the total Reserve Commitment during
      the Term of this Agreement. At Buyer's Agent's reasonable request, Seller
      shall continue to demonstrate throughout the term of the Agreement the
      availability of these quantities, qualities or capacities.

11.0  CONFIDENTIALITY AND NON-DISCLOSURE

      11.1  The terms and conditions of this Agreement shall only be disclosed
            to Buyer's and/or Seller's employees and representatives on a "need
            to know" basis and shall not be disclosed to any third party. Such
            terms and conditions shall under no circumstances be disclosed to a
            competitor of Seller or Buyer.

      11.2  Except as provided below, neither party shall, without the express
            written permission of the other, disclose this Agreement or the
            terms hereof to any third party, provided, however, that each party
            may disclose information related to this Agreement to any Federal,
            state or local governmental agency, authority or commission, or any
            court, tribunal or arbitrator (collectively, "Official Bodies") as
            required by law, including those which regulate Buyer's business.
            With respect to such disclosure to Official Bodies, the parties each
            agree: (1) to appropriately limit their respective requests and/or
            requirements for the disclosure or delivery of such confidential
            information to the minimum necessary to comply with applicable law;
            (2) to provide to the other timely notice of any Official Body's
            disclosure requirement so that the party seeking protection of such
            information can contest such disclosure requirement to the fullest
            extent allowed by law, and (3) to undertake such steps as may be
            available pursuant to law or regulation to provide for the
            confidentiality of any such confidential information released or
            disclosed to any Official Body. To the extent that the disclosure of
            any such confidential information to a third party (other than to
            Official Bodies, as described above) is necessary, each of the
            parties agrees to give notice thereof to the other party and request
            that the party seeking protection of such information shall have the
            right to obtain from such third parties any enforceable

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

            confidentiality agreements providing for protection at least as
            stringent as those provided hereby. Except as to information which
            may become public through means other than the action or inaction of
            the party charged with improper disclosure, this Agreement shall
            remain in effect for a period of five years after the term of this
            Agreement expires

      11.3  Any reference to Buyer, this Agreement, the quantities of coal
            purchased by Buyer hereunder or other data relating to such
            purchases or the Station for Seller's advertising or reporting
            purposes shall be promptly reviewed by Buyer prior to release and
            shall not be released without the prior written consent of Buyer,
            which consent shall not be unreasonably withheld or delayed. Any
            reference to Seller, this Agreement, the quantities of coal sold to
            Buyer hereunder or other data relating to such sales or the Source
            Mines for Buyer's advertising or reporting purposes shall be
            promptly reviewed by Seller prior to release and shall not be
            released without the prior written consent of Seller, which consent
            shall not unreasonably be withheld or delayed.

12.0  LEGISLATION, REGULATIONS AND ORDERS

      12.1  Seller shall comply with the provisions of all Federal, State and
            other governmental laws and any applicable orders and/or regulations
            or any amendments or supplements thereto relating to the sale of
            coal hereunder which have been or may at any time during the Term of
            this Agreement be issued by a governmental agency having appropriate
            jurisdiction. Seller warrants that it and its subcontractors are in
            compliance with all such laws, orders and/or regulations now in
            effect.

             12.2  If the cost to Seller of producing, processing and delivering
             coal hereunder shall have increased (or decreased) as a result of
             any new or amended, or a change in the interpretation or
             enforcement of any, Federal, state or local law, rule, regulation,
             order or tax occurring after the date hereof (each, a "regulatory
             change"), Seller shall notify Buyer of such event promptly after
             Seller becomes aware thereof and shall specify in such notice the
             amount of any increase (or decrease) to the Base Price payable
             under this Agreement necessary as a result of such regulatory
             change. Buyer shall notify Seller within twenty (20) days after
             receipt of such notice from Seller whether Buyer agrees to Seller's
             proposed adjustment to the Base Price. If Buyer agrees to such
             adjustment, the Base Price shall be changed accordingly. If Buyer
             does not agree to such adjustment, the Base Price shall be adjusted
             by [_ _ _ _] as a result of such regulatory change, as verified by
             supporting documentation to be submitted by Seller as hereinafter
             provided. Seller shall furnish to Buyer, upon request therefor,
             sufficient information concerning Seller's costs to enable Buyer to
             verify Seller's calculation of any change in Seller's costs
             incurred as a result of such regulatory change and the resulting
             new Base Price. Buyer shall have the right at its expense to
             examine, or cause an audit to be made of, the records and books of
             account of Seller with respect to any change in Seller's costs as a
             result of such regulatory change and the calculation of any
             adjustment to the Base Price pursuant to this Section 12.2.
             Notwithstanding the foregoing, the Base Price shall not be changed
             pursuant to this Section 12.2 as a result of any change in
             corporate net income taxes or taxes, fees or other impositions
             levied on or measured by, in whole or in part, capital, retained
             earnings or any other similar measure, or any business privilege,
             value added, general franchise or other similar taxes imposed on
             Seller or its properties or assets, or as a result of any change
             for which Seller has already

                                       14
<PAGE>

            received a transportation cost adjustment pursuant to Section 8.5 or
            a Supplemental Adjustment pursuant to Section 8.7. For the purpose
            of calculating adjustments to the Base Price pursuant to Article
            8.0, any adjustment to the Base Price pursuant to this Section 12.2
            shall be subtracted from the corresponding Base Dollar Amounts of
            the components or subcomponents of the Base Price affected by such
            regulatory change (pro rata in accordance with the respective Base
            Dollar Amounts of such components or subcomponents).

      12.3  In the event of the enactment after the date hereof of any Federal,
            State or other governmental law, regulation or order which may
            prohibit, make economically unfeasible, or restrict so as to
            effectively prohibit Buyer's use of the coal specified in this
            Agreement, Buyer shall notify Seller of such event promptly after
            Buyer becomes aware thereof and this Agreement shall no longer be
            binding after the effective date of such law, regulation, or order;
            provided, however, that Buyer shall exert good faith efforts to
            secure relief from such governmental restrictions. In the event of a
            conflict in interpretation of applicable governmental laws,
            regulations, and orders, then, for purposes of this Agreement, any
            reasonable interpretation which prohibits, makes economically
            unfeasible, or restricts so as to effectively prohibit Buyer's use
            of the coal specified herein shall be sufficient to permit Buyer to
            cancel this Agreement.

      12.4  In the event of the enactment after the date hereof of any Federal,
            State, or other governmental law, regulation or order which may
            prohibit or restrict so as to effectively prohibit Seller's mining,
            processing, or shipping of the coal specified in this Agreement,
            Seller shall notify Buyer of such event promptly after Seller
            becomes aware thereof and this Agreement shall no longer be binding
            after the effective date of such law, regulation, or order to the
            extent that such legislation has affected the production,
            processing, or shipping of coal under this Agreement; provided,
            however, that Seller shall exert good faith efforts to secure relief
            from such governmental restrictions. An increase in Seller's
            economic costs alone and which are not addressed in this Agreement
            shall not be sufficient cause to modify or terminate this Agreement
            or to suspend deliveries hereunder. In the event of a conflict in
            interpretation of applicable governmental laws, regulations, and
            orders, then, for purposes of this Agreement, any reasonable
            interpretation which prohibits or restricts so as to effectively
            prohibit Seller's mining, processing, or shipping of the coal
            specified herein shall be sufficient to permit Seller to cancel this
            Agreement.

13.0  FORCE MAJEURE

      13.1  As used herein, "force majeure" means any causes or circumstances
            beyond the reasonable control and without fault or negligence of the
            party affected thereby or of its subcontractors or carriers, such
            as, acts of God, governmental regulation, war, acts of terrorism,
            weather, floods, fires, accidents, strikes, major breakdowns of
            equipment, shortages of carrier's equipment, accidents of
            navigation, interruptions to transportation, embargoes, orders of
            civil or military authority, or other causes, whether of the same or
            different nature, existing or future, foreseen or unforeseeable,
            which wholly or partly prevent the mining, processing, shipment
            and/or loading of the coal by Seller, or the receiving, transporting
            and/or delivery of the coal by any carrier, or the accepting,
            utilizing and/or unloading of the coal by Buyer, but specifically
            excluding economic factors alone.

      13.2  If, by reason of force majeure, either party is unable, wholly or
            partially, to perform its obligations under this Agreement, the
            affected party shall promptly

                                       15
<PAGE>

            give the other party notice of such force majeure and full
            information concerning the causes or circumstances claimed to
            constitute such force majeure and, if such notice is given, the
            obligations of the party giving such notice shall be suspended (or
            reduced to the extent made necessary by such force majeure) during
            the continuance of such force majeure or its effects. The party
            claiming such force majeure shall exert due diligence to remove the
            causes or circumstances constituting such force majeure as soon as
            and to the extent reasonably practicable, and shall promptly notify
            the other party when the causes or circumstances constituting such
            force majeure have terminated. The other party shall have the right
            to investigate the causes or circumstances claimed by the affected
            party to constitute such force majeure.

      13.3  The requirement that the causes or circumstances constituting force
            majeure shall be removed by the affected party with all reasonable
            dispatch shall not require the settlement of strikes, lockouts or
            other labor disputes.

      13.4  No suspension or reduction for reason of force majeure shall
            invalidate the remainder of this Agreement, but, on removal of the
            causes or circumstances constituting such force majeure, deliveries
            of coal hereunder shall resume at the applicable Annual Base Amount
            rate; provided, however, that if either party suffers an extended
            period of force majeure, whether whole or partial, lasting six (6)
            months or longer, the other party shall have the right to terminate
            this Agreement upon thirty (30) days' prior notice. Tonnage
            deficiencies caused by force majeure shall not be made up, except by
            mutual consent.

14.0  EMPLOYMENT STANDARDS

      Seller shall (and shall cause its subcontractors, if any, to) comply with
      all applicable federal, state and local rules and regulations governing
      labor or employee relations, including Sections 6, 7,12 and 14 of the Fair
      Labor Standards Act, as amended. Seller agrees that Seller shall be
      subject to all applicable contract clauses required by federal, state or
      local law, rule or regulation to be included in this Agreement, including
      but not limited to the following clauses, which are incorporated by
      reference herein: Equal Opportunity Clause (41 C.F.R. Section60-1.4);
      Affirmative Action Clause for Disabled Veterans and Veterans of the
      Vietnam Era (41 C.F.R. Section60-250.4); Affirmative Action Clause for
      Handicapped Workers (41 C.F.R. Section60-741.4); the Certification of
      Nonsegregated Facilities Clause (41 C.F.R. Section60-1.8; 41 C.F.R.
      Section1-12.803.10); and the Nondiscrimination Clause (16 Pa. Code
      Section49.101). In addition, Seller certifies, if applicable, that it has
      developed a written affirmative action compliance program [41 C.F.R.
      Section60-1.40(a)] and will annually file Standard Form 100 (EEO-1) [41
      C.F.R. Section60-1.7(a)].

15.0  DRUG AND ALCOHOL ABUSE

      Seller shall be solely responsible for its employees and subcontractors,
      and their employees, regarding drug and alcohol abuse. Controlled
      substances and alcohol are prohibited on Buyer's properties. The use,
      possession or sale of controlled substances or alcohol while on Buyer's
      properties will result in disciplinary action, including removal from the
      job site. The use of controlled substances and/or alcohol while off
      Buyer's property in a manner that adversely affects an employee's job
      performance or public perception of Buyer is not acceptable and will
      result in disciplinary action, including removal from the job site. Cost
      of testing shall be borne by Seller.

                                       16
<PAGE>

16.0  GOVERNING LAW

      This Agreement and the rights and obligations of the parties hereto shall
      be governed by the laws of the State of West Virginia.

17.0  ASSIGNMENT

      No party hereto may assign this Agreement or any portion hereof without
      the advance written consent of the other party, except that no such
      consent shall be required for (a) an assignment is made to any subsidiary
      or affiliate of Buyer, (b) an assignment in connection with a sale of
      Buyer's Harrison Power Station or other destination designated by Buyer or
      of all or substantially all of the assets or business of Buyer, or (c) an
      indirect assignment by reason of a change in control of Seller's parent,
      Anker Coal Group, Inc. In addition, Buyer may assign this Agreement
      without the consent of Seller to a third party for the purpose of
      manufacturing synthetic fuel for use at the applicable destination, but no
      such assignment shall relieve Buyer of its obligations under this
      Agreement unless such assignee provides Seller with security reasonably
      satisfactory to Seller to secure performance of all of the obligations of
      the purchaser of coal under this Agreement. Sale or lease of Seller's
      property, coal processing, or loadout facilities which service this
      Agreement is considered an assignment and therefore requires the prior
      written consent of Buyer. In all instances in which consent of the other
      party to any assignment is required, such consent shall not be
      unreasonably withheld or delayed.

18.0  NON-WAIVER

      The failure of any party to insist in any one or more instances upon
      strict performance of any obligation of another party under this Agreement
      shall not be deemed to be a waiver of the performance of any such
      obligation or a relinquishment of any rights hereunder for the future.
      Without limiting the foregoing, Buyer's acceptance of any coal that does
      not meet the quality specifications specified in this Agreement shall not
      be deemed a waiver of any right Buyer may have hereunder. The respective
      rights and remedies of the parties hereunder are cumulative and not
      exclusive of any rights or remedies which any party would otherwise have.

19.0  INDEMNIFICATION AND DAMAGES

      19.1  Seller shall indemnify, save harmless, and defend Buyer(s), Buyer's
            Agent, and their respective employees, agents and representatives
            (collectively "Buyer Indemnified Parties") from and against all
            claims, losses, liabilities, costs, settlements, awards, and
            expenses (including attorneys' fees and expenses) growing out of
            personal injury, death, or damage to property (including property of
            any Buyer Indemnified Party) arising out of or in any way connected
            with Seller's, its or their respective subcontractors' and/or
            carriers' performance or non-performance hereunder (negligent or
            otherwise), suffered or claimed to have been suffered by any person,
            corporation or entity (including any Buyer Indemnified Party) except
            to the extent due to the negligence or willful misconduct of any
            Buyer Indemnified Party.

      19.2  Under no circumstances, whether arising in contract, equity, or tort
            (including negligence), shall Seller be responsible for or liable to
            Buyer for consequential, incidental, punitive, exemplary or indirect
            damages, including lost profits.

                                       17
<PAGE>

20.0  INSURANCE

      20.1  Prior to rendering any service hereunder, Seller shall, at its own
            expense, procure and thereafter keep in effect until service has
            been performed:

            20.1.1 Worker's Compensation Insurance for its employees engaged in
                   this work, sufficient to comply fully with requirements and
                   coverages specified by laws of each jurisdiction in which
                   work shall be performed.

            20.1.2 Employer's Liability insurance with limits of not less than
                   $1,000,000 per occurrence.

            20.1.3 Comprehensive automobile liability with limits of not less
                   than $1,000,000 combined single limits.

            20.1.4 Commercial General Liability with limits of not less than
                   $5,000,000 combined single limits per occurrence, including
                   Pollution Liability, liabilities arising under the Federal
                   Employees Liability Act (FELA), Protection and Indemnity
                   Insurance as may be applicable, and Contractual Liability
                   covering all liability of Seller under this Agreement.

            20.1.5 Such other specific insurances and/or limits determined to
                   Buyer's Agent to be appropriate for work to be performed.

      20.2  All insurance required to be provided under Section 20.1 shall be
            issued by insurers rated A-/XI or better by A. M. Best Company (or
            A-/IX or better in the case of insurers whose parent companies are
            rated A-/XI or better) or who maintain comparable ratings assigned
            by another reputable and recognized rating agency approved by
            Buyer's Agent.

      20.3  Allegheny Energy Supply Company, LLC, Monongahela Power Company, and
            Allegheny Energy Service Corporation shall be named as additional
            insureds for each of the insurance coverages listed in items 20.1.3
            and 20.1.4 above. These are "minimum" required limits and are in no
            way intended to be a limitation of Seller's liability. Seller shall
            furnish Buyer's Agent (Attention: Event Risk Manager) with
            certificates of insuring companies showing such insurance to be in
            effect and the expiration dates and agreeing to give thirty (30)
            days written notice to Buyer's Agent in advance of any change in or
            cancellation of such insurance.

21.0  CERTAIN REMEDIES OF BUYER

      It is expressly recognized and understood between the parties that prompt
      and full deliveries by Seller in accordance with this Agreement are
      essential to Buyer. Time is of the essence with respect to such
      deliveries. Therefore, the parties agree that in addition to, and not in
      limitation of, any and all other remedies to which Buyer may be entitled
      by law, Buyer shall have the right to require specific performance of this
      Agreement by Seller, and Buyer shall have the right, if necessary, to
      enter any appropriate judicial forum and, without bond or other security,
      to obtain injunctions and/or other appropriate relief against Seller to
      prevent deliveries of any Source Mine coal by Seller to any third parties
      while Seller is in default of or threatens default in the delivery of coal
      to Buyer that conforms to the specifications required under this
      Agreement.

                                       18
<PAGE>

22.0  NOTICES

      All notices under this Agreement shall be in writing and shall be deemed
      to have been given or made when sent by facsimile transmission (telecopy),
      recognized overnight delivery service, or first class United States mail
      postage prepaid, addressed to Seller, Buyer or Buyer's Agent, as the case
      may be, at its address specified below, or at such other address as any
      such party may specify by notice to the other parties:

       If to Seller:                Anker West Virginia Mining Company, Inc.
                                    2708 Cranberry Square
                                    Morgantown, West Virginia 26508
                                    Attn: President

       If to Buyer or Buyer's       Allegheny Energy Service Corporation
       Agent:                       4350 Northern Pike
                                    Monroeville, Pennsylvania 15146-2841
                                    Attn: Attention: General Manager, Fuel
                                          Logistics and Operations

                                    with copies to:

                                    Allegheny Energy Service Corporation
                                    4350 Northern Pike
                                    Monroeville, Pennsylvania 15146-2841
                                    Attn: Attention: General Manager, Fuel
                                          Procurement

                                    and:

                                    Allegheny Energy Supply
                                    800 Cabin Hill Drive
                                    Greensburg, Pennsylvania 15601
                                    Attn: Attention: General Counsel

23.0  AUTHORITY OF BUYER'S AGENT

      Whenever any action or determination under this Agreement is permitted or
required to be taken or made by Buyer, or any right or remedy may be exercised
by Buyer under this Agreement, such action or determination may be taken or
made, and such right or remedy may be exercised, on behalf of Buyer by Buyer's
Agent. Any such action or determination communicated by Buyer's Agent to Seller
shall be binding on Buyer as fully as if such action or determination had been
taken or made directly by Buyer.

24.0  COUNTERPARTS

      This Agreement may be executed in counterparts, which shall, in the
aggregate, when signed by all parties constitute one and the same instrument,
and, thereafter, each counterpart shall be deemed an original instrument as
against any party who has signed it. Facsimile signatures shall be enforceable
as original signatures.

                         [Signatures begin on next page]

                                       19
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.

                                       ANKER WEST VIRGINIA MINING
                                       COMPANY, INC.
                                       (Seller)

                                       By: /s/ D. LYNN SHANKS
                                           -------------------------------------
                                       Name:  D. LYNN SHANKS
                                       Title: PRESIDENT, ANKER WEST VIRGINIA
                                              MINING COMPANY, INC.

                                       ALLEGHENY ENERGY SUPPLY
                                       COMPANY, LLC
                                       (Buyer)

                                       By: /s/ John P. Campbell /DGF
                                           -------------------------------------
                                       Name:  John P. Campbell
                                       Title: President, Allegheny Energy Supply

                                       MONONGAHELA POWER COMPANY
                                       (Buyer)

                                       By: /s/ Joseph H. Richardson /DGF
                                           -------------------------------------
                                       Name:  Joseph H. Richardson
                                       Title: President, Allegheny Power

<PAGE>

                                    GUARANTEE

      ANKER COAL GROUP, INC., a Delaware corporation ("ACGI"), hereby guarantees
the full and timely payment and performance by Anker West Virginia Mining
Company, Inc., a West Virginia corporation ("Anker Mining"), and its successors
and assigns, of all duties, obligations and liabilities of Anker Mining under or
arising from the Coal Sales Agreement dated the 17th day of February, 2005,
between Anker Mining, as Seller, and Allegheny Energy Supply Company, LLC, a
Delaware limited liability company ("AESC"), and Monongahela Power Company, a
West Virginia corporation ("MPC"), as Buyer (the "Agreement"), and agrees that
AESC and MPC shall have the right to demand payment and performance of Seller's
obligations, duties and liabilities under the Agreement directly from ACGI as
fully as if ACGI were a party to the Agreement, it being understood that this
Guarantee shall bind ACGI and it successors and assigns, and inure to the
benefit of AESC and MPC and their respective successors and assigns.

                                          ANKER COAL GROUP, INC.

                                          By: /s/ Raymond J. McElhaney
                                              ---------------------------------
                                          Name:  Raymond J. McElhaney
                                          Title: President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]