Document:

<PAGE>

                                                                   EXHIBIT 10.22

                                    SUBLEASE

            THIS SUBLEASE is made and entered into as of the 10th day of April,
1997, by and between DUPECH, INC., a Delaware corporation herein referred to as
"Dupech", and RESERVE COAL PROPERTIES COMPANY, a Delaware corporation herein
referred to as "Reserve" (Dupech and Reserve are referred to collectively as
"Sublessor"), and PATRIOT MINING COMPANY, INC., a West Virginia corporation
having a business address of P.O. Box 4360, Star City, West Virginia 26504,
herein referred to as "Sublessee".

            WHEREAS, by Agreement and Lease dated March 30, 1959, of record in
the office of the Clerk of the County Commission of Harrison County, West
Virginia in Deed Book No. 920, at page 49 (and also of record in the Marion
County Clerk's office in Deed Book No. 697, at page 98, and in the Doddridge
County Clerk's office in Deed Book No. 147, at page 318) (which Agreement and
Lease is hereinafter referred to as "the Original Lease", a copy of which has
been provided to Sublessee and is made a part hereof by this reference), Guy
Corporation, a West Virginia corporation, Virginia A. Tetrick, a widow, Willis
G. Tetrick, Jr. and Helen V. Tetrick, his wife, Margaret Anne Tetrick, single,
and Catherine Tetrick Sutton and M.Y. Sutton, her husband ("the Original
Lessors" who, together with their successors-in-interest, are sometimes referred
to collectively as "the Lessors") leased unto Consolidation Coal Company ("the
Original Lessee") certain tracts of the Pittsburgh or Nine Foot vein or seam of
coal situate in Harrison, Doddridge and Marion Counties, West Virginia ("the
Leased Premises"), all as more particularly described in the Original Lease;

            WHEREAS, by virtue of various supplemental agreements and
assignments (including but not necessarily limited to those instruments
identified on Exhibit A, copies of

                                       1

<PAGE>

which have been provided to Sublessee, which, together with the Original Lease,
are collectively referred to as "the Lease"), the Original Lease has been
expanded so as to include additional coal properties, and the leasehold estate
originally vested in the Original Lessee is now vested in Sublessor; and

            WHEREAS, Sublessor and Sublessee have agreed to a sublease of a
portion of the Leased Premises and have entered into this Sublease in order to
memorialize their agreements.

            NOW, THEREFORE, WITNESSETH: That for and in consideration of the
premises and other good and valuable consideration, Sublessor and Sublessee
hereby covenant and agree as follows:

            1. GRANT. Subject to the receipt of written consent of the Lessors,
if such consent is required under the Original Lease as supplemented or amended,
(the responsibility for diligently pursuing and obtaining which is hereby
assumed by Sublessee) (which consent, if required under the Original Lease as
supplemented or amended, must be provided in writing to Sublessor within one
year from the date of this Sublease and which consent shall not be given by the
Lessors upon conditions which change or affect the Sublessor's rights or
obligations under the Original Lease as supplemented or amended or this
Sublease), Sublessor hereby grants, demises, subleases and sublets unto
Sublessee, for the term(s) hereinafter specified, all of Sublessor's right,
title and interest in and to the Pittsburgh seam or vein of coal which is
mineable and removable from those certain tracts or parcels of land containing
3694 acres, more or less, situate in Harrison County, West Virginia, ("the
Sublease Premises") and which are shown in yellow on the map attached hereto as
Exhibit B, together with any and all mining rights and privileges vested in
Sublessor pursuant to the Lease. Sublessor further grants to Sublessee the right
to transport through the Sublease Premises coal

                                       2

<PAGE>

mined from other properties; provided that all wheelage payments owing to the
Lessors under the Lease for the exercise of such right shall be paid to
Sublessor by Sublessee, without right of recoupment.

            There is expressly excepted from this Sublease, and reserved to
Sublessor, all of the coal and mining rights and other minerals, if any, not
specifically subleased herein ("the Reserved Minerals"), together with the right
to mine and remove the Reserved Minerals by operations which do not materially
interfere with Sublessee's mining operations to be performed hereunder. It is
understood and agreed by Sublessee that the rights and privileges hereby granted
to Sublessee shall be construed and limited to such rights and privileges as
Sublessor possesses and has the lawful right to sublease; and no other rights
and privileges are subleased or granted hereby.

            2. SUBLESSEE'S OPERATIONS. Sublessee covenants and agrees that it
will, at its expense, apply for and diligently pursue all permits, licenses and
approvals required by law to mine and remove the coal hereby subleased; and,
subject to matters beyond the control of Sublessee, Sublessee will have secured
all requisite permits for such mining by the end of the Initial Term as
hereinafter provided. Once all requisite permits have been obtained, Sublessee
shall expeditiously commence and diligently conduct mining operations on and in
the Sublease Premises in a good and workmanlike manner and in such a manner as
will recover the maximum quantity of merchantable and mineable coal therefrom.
Sublessee's operations will, at all times, comply with the duties and
obligations of the lessee under the Lease. Subject to market conditions beyond
the control of Sublessee, Sublessee's mining operations will achieve a minimum
annual production of 250,000 tons of Pittsburgh coal from the Sublease Premises,
or from adjacent property owned, leased or controlled by Sublessee.

                                       3

<PAGE>

            Sublessee shall, prior to commencement of mining hereunder, submit
in triplicate to Sublessor for approval, which approval shall not be
unreasonably withheld, Sublessee's proposed mining plans. If no specific
objection to such proposed plan is made by Sublessor within 30 days, then the
plan shall be deemed to have been approved by Sublessor.

            3. TERM. The term of this Sublease shall be for Five (5) years,
commencing upon the date of execution of this Sublease ("the Initial Term"),
subject to extension or termination as hereinafter provided. If, at the end of
the Initial Term, Sublessee has secured all requisite mining permits and has
commenced mining operations hereunder, or on adjacent property owned, leased or
controlled by Sublessee, but all merchantable and mineable coal contained in the
Sublease Premises has not been removed, and provided that Sublessee has achieved
and is maintaining a minimum annual production of 250,000 tons of Pittsburgh
coal, then Sublessee, at its option, may extend the term of this Sublease from
year to year thereafter ("the Extended Term") until all of the mineable and
merchantable Pittsburgh coal has been mined and removed from the Sublease
Premises, or until expiration of the Lease, whichever first occurs. If Sublessee
desires to extend this Sublease for an Extended Term, Sublessee shall give
notice in writing to Sublessor of its intent to extend at least sixty (60) days
prior to the expiration of the Initial Term or the then current Extended Term.
If Sublessee is unable to obtain all requisite mining permits within one year
from the date of execution of this Sublease, which requisite permits Sublessee
covenants and agrees to diligently pursue, and Sublessee notifies Sublessor in
writing of its intent to terminate this Sublease, then this Sublease shall
terminate.

            4. ADVANCE MINIMUM ROYALTY PAYMENTS. During the Initial Term of this
Sublease, Sublessee shall pay to Sublessor a total recoupable Advance Minimum
Royalty of $1,500,000, payable as follows: a) upon execution of this Sublease,
the sum of

                                       4

<PAGE>

$100,000; b) upon the first anniversary date of this Sublease, the sum of
$200,000; c) upon the second anniversary date of this Sublease, the sum of
$300,000; d) upon the third anniversary date of this Sublease, the sum of
$400,000; e) and upon the fourth anniversary date of this Sublease, the sum of
$500,000. Such recoupable Advance Minimum Royalty payments due during the
Initial Term shall not be delayed or avoided because of force majeure or
surrender or termination of the Sublease, unless this Sublease is terminated
pursuant to Section 3 above.

            During the Extended Term of this Sublease, Sublessee shall pay unto
Sublessor, beginning on the first day of the Extended Term and continuing on
each anniversary date thereafter, an annual recoupable Advance Minimum Royalty
in the amount of $300,000 for each year of the Extended Term that this Sublease
continues in effect.

            Upon commencement of mining operations hereunder, Sublessee shall
have the right to reimburse itself, from the applicable Earned Royalty (but not
from wheelage payments due to the Lessors under the Lease), for all such
recoupable Advance Minimum Royalty payments theretofore accumulated and carried
forward, by mining free from Earned Royalty, a sufficient quantity of coal so as
to recoup all such Advance Minimum Royalty payments. It is understood that
Sublessee shall not be entitled to a refund of Advance Minimum Royalty payments
if for any reason Sublessee does not exhaust its credit for Advance Minimum
Royalty hereunder.

            If, at any time prior to the expiration or termination of this
Sublease, Sublessee shall have paid unrecouped Advance Minimum Royalty in an
aggregate amount which exceeds the Earned Royalty which would be due on the
merchantable and mineable Pittsburgh coal then remaining in place in the
Sublease Premises, then Sublessee shall be relieved from the obligation of
continuing to make Advance Minimum Royalty payments for so long as the aggregate

                                       5

<PAGE>

unrecouped Advance Minimum Royalty payments exceed the Earned Royalty due, at
their applicable rates, on the remaining unmined merchantable and mineable
Pittsburgh coal.

            5. EARNED ROYALTY PAYMENTS. Sublessee also agrees to pay, or credit
against Advance Minimum Royalty payments made, to Sublessor for all coal mined
and removed by Sublessee from the Sublease Premises: (a) an Earned Royalty of
Three and One-Half percent (3.5%) of the gross sales price per ton, F.O.B. mine;
and (b) the earned royalty payable by Sublessor to the successors-in-interest of
the Original Lessors under the Lease (which earned royalty is equal to
twenty-five cents (25(cent)) per ton prior to January 1, 2003, and thrEe percent
(3.0%) of the gross sales price per ton thereafter). Sublessor and Sublessee
covenant and agree that the term "gross sales price", as used in this Sublease,
shall have the same meaning as it has in the Lease. Sublessor and Sublessee
agree that neither Sublessor, Consolidation Coal Company nor any subsidiary may
purchase any coal mined hereunder or control the operations of Sublessee
hereunder. If Sublessor gives notice to Sublessee in writing that, in
Sublessor's reasonable judgment, a particular purchaser is not a bona fide
purchaser of coal mined by Sublessee from the Sublease Premises, Sublessor may
elect to substitute for the gross selling price reported by Sublessee the
prevailing market price of such coal, F.O.B. mine, based upon recent sales by
Sublessee of coat of comparable quality to bona fide purchasers. For any coal
consumed on or off the premises without sale by Sublessee, the gross selling
price for the purpose of computing the royalty shall be the prevailing market
price, F.O.B. mine, as described above, of such coal at the time of shipment
from the Sublease Premises, or, if used on the Sublease Premises, at the time of
use.

            6. PAYMENT OF EARNED ROYALTY.Earned Royalty shall be accounted for
and paid to Sublessor (50% to Dupech and 50% to Reserve as provided below)

                                       6

<PAGE>

without the necessity for previous demand therefor on or before the twenty-fifth
(25th) day of the month next following the calendar month during which the coal
was mined and removed by Sublessee. Interest shall accrue at the rate of 1-1/2%
per month on each late payment of Earned Royalty and Advance Minimum Royalty due
to Sublessor hereunder; provided that in no event shall the interest rate
applicable to late payments exceed the maximum rate permissible by law.

            Sublessee shall also furnish to each Sublessor or Sublessor's agent,
with each payment of Earned Royalty, a report showing (i) the quantity of coal
mined from the Sublease Premises during the preceding calendar month, using
certified scale weights or such other method acceptable to Sublessor, (ii) the
gross sales price received by Sublessee for such coal, and (iii) such other
documentation that may be reasonably requested by Sublessor to confirm any
payment or calculation hereunder. The additional methods used to calculate
weights may include, but are not limited to, determining by planimeter tonnage
from 6 month mine maps as submitted by Sublessee, or measurements by Sublessee
using prudent engineering practices for areas mined, volume displacement,
surveys of coal pits, measurements of coal density, and sales books and accounts
of the Sublessee. Sublessor shall have the right, at its expense and risk,
during normal business hours to audit such books or records of Sublessee as
necessary to confirm the accuracy of such Earned Royalty payments. All such
books and records which are made available to Sublessor by Sublessee shall be
maintained as confidential by Sublessor. Sublessee shall not be required to pay
Earned Royalty to Sublessor with respect to any portion of the Sublease Premises
which a court of last resort determines is owned or controlled by a third party
rather than Sublessor.

            In the event any party (exclusive of the Lessor or a party claiming
under the Lessor asserts any claim or title to the Sublease Premises superior to
Sublessor, the Sublessor

                                       7

<PAGE>

shall cooperate with Sublessee in Sublessee's prosecution of an action to quiet
title until resolution thereof. The Sublessee may pay all royalties into an
escrow account jointly established by Sublessor and Sublessee until such
resolution is confirmed. Any sums paid in escrow by Sublessee together with any
interest earned shall be deemed payment of royalties or other sums due
hereunder. In the event that the Sublessor's ownership interest in Sublease
Premises is less than the interest represented, then the actual interest owned
shall be used to calculate the royalties; and the Sublessor shall reimburse
Sublessee for any amount previously paid which exceeds the amount which would
have been paid had the royalties been based on the actual interest.

            All payments of Advance Minimum Royalty, Earned Royalty and wheelage
payments due from Sublessee to Sublessor hereunder shall be made to Sublessor as
follows:

                    (a)   Fifty percent (50%) to Dupech at
                          P. O. Box 371508M
                          Pittsburgh, PA 15251

                                       and

                    (b)   Fifty percent (50%) to Reserve at
                          Dept L1088P
                          Pittsburgh, PA 15264-1088

            Copies of all payments, reports and accountings made to either
Sublessor shall be contemporaneously furnished to Supervisor of Leased Mineral
Resources, Consol Inc., 1800 Washington Road, Pittsburgh, Pennsylvania 15241.

            7. RECLAMATION OF PREMISES. Sublessee shall reclaim the Sublease
Premises in such a manner as shall satisfy the laws of the State of West
Virginia, as well as the laws of the United States of America, in force at the
time of termination of the mining; and,

                                       8

<PAGE>

Sublessor also shall comply with any specific reclamation requirements of the
Lease and this Sublease.

            8. PAYMENT OF TAXES.Upon commencement of the Initial Term, and
thereafter for the duration of the Sublease, Sublessee shall pay all real estate
taxes on the Sublease Premises, and all taxes on its equipment and facilities on
the Sublease Premises, as well as all other taxes, assessments, impositions or
charges incurred by Sublessee as a result of its mining operations hereunder.
Sublessee shall reimburse to Sublessor, within ten (10) days of receipt of an
invoice for same, all real estate taxes paid by Sublessor on the Sublease
Premises for periods which include any portion of the term of this Sublease.

            9. SURVEY AND MAPPING. Sublessee shall have a survey of the mine
workings made by or under the supervision of a registered professional mining
engineer promptly as the work progresses; and Sublessee shall keep an accurate
and complete map of the Sublease Premises and mine workings, which map shall be
on a scale of 1 inch = 100 feet and shall conform in all respects with the
requirements of the mining laws of the State of West Virginia. Such map shall
show all property lines. Such map, certified to accuracy by a registered
professional engineer or licensed surveyor, shall at all times be accessible to
Sublessor, its agents or representatives, for inspection; and a true, complete
and correct copy of the same, clearly showing the mining progress during the
preceding three-month period, shall be furnished in duplicate each three months
to Sublessor without demand. Such map shall also include such additional
information which Sublessor may require.

            10. PRESERVATION OF RECORDS. Sublessee shall keep and preserve, for
a period of two (2) years from and after the mining, books and accounts of the
mining, selling and shipping of coal mined hereunder, and said books shall be
open at all reasonable times for

                                       9

<PAGE>

the inspection of the authorized agent of the Sublessor for the purpose of
comparing and verifying the reports rendered by Sublessee.

            11. LESSEE INDEPENDENT; EMPLOYEES OF SUBLESSEE. Sublessee shall mine
coal under this Sublease according to its own means and methods. It is
understood and agreed that Sublessee is an independent lessee and that all
persons working for Sublessee in connection with its mining operations shall be
its employees subject only to its orders and supervision and shall be paid
directly by Sublessee. Sublessee shall be responsible in all respects for the
hiring, employment and working conditions of all individuals engaged to carry on
the operations herein contemplated. Neither Sublessor nor any of its agents,
servants or employees shall have the right to direct, supervise or control the
manner or methods in which the work is to be performed, or the manner or method
in which the assets or resources of Sublessee are dedicated, used or spent;
provided, however, that Sublessor reserves the right unto itself and its agent
or representative to inspect, at its and their risk, at all reasonable times the
mining operations of Sublessee on the Sublease Premises for the purpose of
determining whether it is being done in conformity with this Sublease and the
mine plan provided to the Sublessor, to sample the coal, to check the weights,
measures, accounts and methods of Sublessee in order to verify the accuracy of
the payments made by Sublessee hereunder. Sublessee agrees to pay persons
employed by it in accordance with the requirements of the Fair Labor Standards
Act of 1938, as amended, and to keep all such records as are required by said
Act. Sublessee shall pay all social security and unemployment insurance taxes,
black lung benefits and other compensatory assessments in respect of its work
force, and shall comply with all State and Federal laws and regulations, and any
other applicable laws and regulations pertaining to employment in the coal
mining industry (including without limitation the obligations owed to

                                       10

<PAGE>

Sublessee's employees under Title IV of the Federal Coal Mine Health and Safety
Act of 1969, as amended.)

            12. INDEMNIFICATION OF SUBLESSOR; INSURANCE.

                  (A) Sublessee agrees to and shall hold Sublessor harmless
from, and shall defend and indemnify Sublessor against, any and all claims,
damages, actions, liabilities, loss, cost or expense arising out of or in
connection with Sublessee's operations under this Sublease, including the
performance of Sublessee's covenants and obligations hereunder. This indemnity
shall include, but not be limited to, indemnity against liability by reason of
any injuries (including death) sustained by servants, agents or employees of
Sublessee or of Sublessor or by other persons or for damage done to property
(including loss of the use thereof) of Sublessee or of Sublessor or of other
persons in the performance of this Sublease or in connection with anything
incidental thereto, caused by the negligence of Sublessee or of the servants,
agents or employees of Sublessee or by the negligence of other persons under the
control of Sublessee, and whether said loss, damage or injury was sustained by
Sublessee or by Sublessor or by the servants, agents or employees of Sublessee
or of Sublessor or by both Sublessee and Sublessor or by other persons; and in
the event that any suits, actions or proceedings shall be brought in any court
against Sublessor to enforce any liability, or alleged liability arising
hereunder, Sublessee shall defend said suits, actions and proceedings, and, if
any judgments shall be rendered therein against Sublessor, Sublessee shall
satisfy and discharge the same and all the costs and expenses thereof, including
reasonable attorneys' fees, to the full and complete exoneration of Sublessor.
Sublessee shall not be responsible for any damages resulting from the negligence
of Sublessor, its servants, agents or employees.

                                       11

<PAGE>

                  (B) Sublessee shall carry comprehensive General Liability
Insurance in bodily injury limits of not less than Two Million Dollars each
person and Three Million Dollars each occurrence, and Property Damage Liability
in limits of not less than Two Million Dollars per occurrence. This insurance
shall include Comprehensive Automobile Liability Insurance, including both owned
and non-owned automobiles and trucks, premises and operations, including
completed operations and contractual liability coverage. Sublessee shall furnish
to Sublessor, before the operations or work herein contemplated is commenced,
certificates showing such insurance coverage, and evidence that such coverage
will not be cancelled without notice to Sublessor.

                  (C) Sublessee shall carry workmen's compensation insurance or
participate in a qualified self-insurance program approved by the appropriate
governmental authorities in, and occupational disease insurance and shall pay
all unemployment, social security, Black Lung, and reclamation taxes and all
other charges and taxes which may be levied or assessed because of its
operations hereunder.

            13. RIGHTS OF THIRD PARTIES. Sublessee shall so conduct its
operations hereunder as not to violate any applicable rights of subjacent or
adjacent support and if there shall arise any question of damage to any such
person as a result of mining operations of Sublessee hereunder, Sublessee shall
and does assume all responsibility therefor, between the parties hereto, without
claim upon Sublessor except to its assistance in the property defense of its
title to the Sublease Premises.

            14. DEFAULT AND TERMINATION. The Sublessee shall be held in default
under this Sublease when:

                                       12

<PAGE>

                  i)    Sublessee shall fail to make payments of the royalties,
                        taxes, or any other monies herein provided to be paid by
                        Sublessee when they are due and payable.

                  ii)   Sublessee shall fail to keep, observe or perform any of
                        the covenants, agreements or conditions in this Sublease
                        contained by or on the part of said Sublessee to be
                        kept, observed or performed;

                  iii)  Sublessee shall make an assignment for the benefit of
                        creditors;

                  iv)   Sublessee shall be adjudicated a bankrupt or file an
                        application seeking bankruptcy; and/or

                  v)    Sublessee shall suffer or permit a receivership of
                        Sublessee's property;

            Upon the occurrence of one or more events of default, Sublessor may,
at its option, forthwith declare this Sublease forfeited and thereupon the same
shall be forfeited and all rights hereunder of Sublessee shall immediately cease
and determine; provided, however, that said option may only be exercised under
(i) and/or (ii) above if any such event(s) of default shall continue for a
period of ten (10) days after written notice from Sublessor requiring the curing
or remedying of such default. All of the rights and remedies of Sublessor shall
be cumulative, and shall not be deemed to exclude Sublessor from any other legal
or equitable remedy or remedies which it may have. Failure on the part of
Sublessor to enforce any of the rights herein reserved by it on default for a
period shall not operate as an estoppel or as a waiver against Sublessor or
prevent it at any subsequent time from electing to exercise all or any of such
rights for any subsequent default. Notwithstanding any provision in this
Sublease to the contrary, Sublessee shall be and at all times shall remain
liable for mine closing and reclamation costs, including the cost of any
perpetual or temporary treatment of water discharges; and Sublessee shall hold
Sublessor harmless therefrom.

                                       13

<PAGE>

            15. SUBLESSOR'S OBLIGATION TO MAINTAIN LEASE. Sublessor shall,
subject to faithful performance by Sublessee of its obligations hereunder, keep
and maintain the Lease in full force and effect insofar as, but only insofar as,
the Sublease Premises are concerned. Sublessor will not intentionally take or
fail to take any action which would constitute a default or surrender, or give
rise to a termination, of the Lease insofar as the Sublease Premises are
concerned. In the event Sublessor takes or fails to take any action required to
maintain the Lease in effect with respect to the Sublease Premises, which action
or inaction does not relate to an obligation of Sublessee hereunder, and the
Lessor declares the Lease is in default as a result of such action or inaction
on the part of Sublessor, then Sublessee may, at its option, if the default
continues longer than an applicable cure period in the Lease, cure such default
and deduct the expense of doing so from the Earned Royalty payments thereafter
due to Sublessor.

            16. BANKRUPTCY AND OTHER ACTION. If Sublessee becomes a debtor in a
bankruptcy or insolvency proceeding, or its business or assets are taken over by
an assignee for the benefit of the creditors or by a receiver or otherwise, then
Sublessor may at its option and without notice terminate this Sublease. Neither
this Sublease, the leasehold estate hereby created, nor the right of Sublessee
hereunder shall be subject to sale or disposition or possession thereof, in
whole or in part, by or under any judgment or decree of any court or by or
through any judicial process of law, equity or bankruptcy, except for the
purpose of enforcing, at the instance of Sublessor, its rights hereunder, in one
or more transactions during the term of this Sublease. This Sublease provides
Sublessor with the benefit of Sublessee's "personal services," a Sublessee whom
Sublessor considers to be uniquely competent and qualified to perform the
services required under this Sublease. Those services are essential to the
achievement of the

                                       14

<PAGE>

maximum recovery of coal and of the highest gross sales price for such extracted
coal, both of which are necessary elements in allowing Sublessor the greatest
benefit of its bargain. Accordingly, in the event of Sublessee's bankruptcy, the
assignment of Sublessee's interest under this Sublease to another person or
entity which did not possess Sublessee's competence, qualification, skill,
credit, character and substance, would be extremely injurious to Sublessor.
Sublessor and Sublessee have therefore agreed that, except as may be otherwise
provided herein, this Sublease is not to be assigned, transferred or subleased.
If, notwithstanding such agreement, a bankruptcy court were to determine that
this Sublease is assignable, Sublessor and Sublessee acknowledge and agree that
there are certain elements which are essential to a determination of whether the
prospective assignee has provided adequate assurance of future performance.
These elements include the prospective assignee's ability to make the investment
necessary to mine the subleased coal, its record and reputation in the coal
mining industry, its Applicant Violator System history (including cure of
violations), its demonstrated competence to mine, and its experience in
Appalachian mining of coal of a magnitude, and under mining conditions, similar
to the mining operations conducted on the Sublease Premises. Sublessor and
Sublessee acknowledge and agree that the failure to consider such factors which
are clearly appropriate in the coal mining lease context, and the injudicious
application of an adequate assurance test, would result in substantial injury to
the Sublessor.

            17. NOTICES. All deliveries, notices, demands, instructions,
communications and requests which may or are required to be given by either
party to the other party shall be in writing (except in the case of emergency,
in which case appropriate verbal communications shall be followed by confirming
written communications) and shall be deemed

                                       15

<PAGE>

to have been properly given if sent by registered or certified United States
mail, postage prepaid, addressed as follows:

                  (a)   If to Sublessor:

                        (i)   To Dupech, Inc.
                              1800 Washington Road
                              Pittsburgh, PA 15241
                              ATTN: Supervisor Leased Mineral Resources

                                       and

                       (ii)   Reserve Coal Properties Company
                              1800 Washington Road
                              Pittsburgh, PA 15241
                              ATTN: Supervisor Leased Mineral Resources

or such other address as Sublessor may, from time to time, designate by notice
to Sublessee; and

                  (b)   If to Sublessee, to:

                        Patriot Mining Company
                        2708 Cranberry Square
                        Morgantown, WV 26505
                        ATTN: Land Manager

or such other address as Sublessee may, from time to time, designate by notice
to Sublessor.

            18. LANDLORD'S LIEN AND OTHER SECURITY. Sublessee shall remain
current with all its financial obligations in connection with improvements on
the Sublease premises or equipment used therein.

            Sublessee grants to Sublessor a statutory landlord's lien to secure
the payment of all royalties or other monies of every character occurring or
becoming due at any time under the Sublease and the performance by Sublessee of
all its obligations hereunder.

                                       16

<PAGE>

            19. ASSIGNMENT. In recognition of the fact that Sublessor has relied
upon the business reputation and mining skills possessed by Sublessee in
entering into this Sublease, and in further recognition of the fact that
Sublessee's business reputation and mining skills constitute a portion of the
consideration for this Sublease, it is hereby agreed that Sublessee shall not
assign or transfer this Sublease nor sublease the Sublease Premises (nor any
rights therein, including, without limitation, the right to obtain future mining
permits for the Sublease Premises), except as provided hereinbelow, nor create,
suffer or permit any lien or encumbrance thereon, without the prior written
consent of Sublessor to such assignment, transfer or Sublease. Sublessor shall
be under no obligation to give such consent regardless of the reasonableness of
any request. If such consent be granted: (i) it shall not be construed to be a
waiver of the foregoing covenant as to any future assignment, transfer,
sublease, lien or encumbrance and each successive assignment, transfer, sublease
or instrument creating a lien or encumbrance shall so stipulate; and (ii) it
shall be a condition to the effectiveness of any such assignment or sublease
that Sublessee shall have first delivered to Sublessor a copy of such assignment
or sublease, together with a written and legally binding covenant made by the
assignee or sublessee, on behalf of itself and its heirs, personal
representatives, successors and assigns, in favor of Sublessor and its
successors and assigns, that such assignee or sublessee will faithfully keep and
perform all of the terms, obligations and conditions of this Sublease and of the
assignment or sublease. Unless the written consent of Sublessor thereto is first
had and obtained, any assignment, transfer, sublease, lien or encumbrance,
either voluntary, involuntary or by operation of law, of this Sublease or any
rights therein, shall cause, at the option of Sublessor, an immediate forfeiture
of this Sublease, and the rights and interests of Sublessee shall forthwith
cease and terminate. Any transfer of a controlling interest (a "Controlling
Interest") in

                                       17

<PAGE>

Sublessee, whether such transfer is voluntary, involuntary or by operation of
law, unless such transfer is by reason of death, shall be deemed an assignment
of this Sublease. The term "Controlling Interest" shall mean the ownership or
control of 50% or more of the stock of Sublessee or the ownership or control of
substantially all of the assets of Sublessee.

            Notwithstanding any provision of this section 19 to the contrary,
Sublessee may assign this Sublease to a subsidiary or affiliated corporation or
entity (a "Permitted Assignee") without obtaining the prior consent of
Sublessor, provided that Sublessee shall give Sublessor prompt written notice of
such assignment, and, provided further that no assignment to a Permitted
Assignee will relieve Sublessee of its obligations to Sublessor hereunder.

            20. ACCEPTANCE OF PREMISES "AS-IS". Sublessee takes and accepts this
Sublease with the knowledge and understanding that coal may have been mined and
removed from the Sublease Premises, that Sublessor makes no guarantee or
warranty with respect to the quantity or quality of the coal hereby subleased,
and that the coal being subleased in its present condition and circumstances.

            21. MEMORANDUM OF SUBLEASE. A memorandum of this Sublease will be
executed by the parties upon the execution of this agreement; and such
memorandum may be placed of record upon the commencement of the Initial Term.

            22. GOVERNING LAW. This Sublease shall be governed by and construed
under the laws and judicial decisions of the State of West Virginia.

                                       18

<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused their corporate
name to be signed to duplicate originals hereof, by their property officers,
hereunto duly authorized, all as of the day and year first hereinabove written.

ATTEST:                                          DUPECH, INC.

/s/                                              By  /s/
-----------------------------------                  ---------------------
         SECRETARY                                      Its Vice President

ATTEST:                                          RESERVE COAL PROPERTIES COMPANY

/s/                                              By  /s/
-----------------------------------                  ---------------------
         SECRETARY                                      Its Vice President

ATTEST:                                          PATRIOT MINING COMPANY

/s/                                              By  /s/
-----------------------------------                  ---------------------
         SECRETARY                                      Its Treasurer

                                       19

<PAGE>

                                    EXHIBIT A

                                    THE LEASE

-     Agreement and Lease dated March 30, 1959, between Guy Corporation, et
      als., and Consolidation Coal Co.

-     Letter Agreement dated March 30, 1959 re: wheelage payments

-     Letter Agreement dated March 30, 1959 re: Section 6 properties

-     Supplemental Agreement and Lease dated November 2, 1960 between Guy
      Corporation, et als., and Consolidation Coal Co. (Deed book 845, Page 135)

-     Second Supplemental Agreement and Lease dated January 6, 1961 between Guy
      Corporation, et als., and Consolidation Coal Co. (Deed Book 871, Page 354)

-     Consent to Assignment and Covenant of Assumption dated June 30, 1966
      between Continental Oil Co. and Guy Corporation, et als.

-     Supplemental Agreement and Lease dated September 15, 1966 between Guy
      Corporation, et als., and Consolidation Coal Co.

-     Fourth Supplemental Agreement and Lease dated March 30, 1969 between Guy
      Corporation, et als., and Consolidation Coal Company

-     Fifth Supplemental Agreement and Lease dated November 20, 1978 between Guy
      Corporation, et als., and Consolidation Coal Company

                                       20<PAGE>

                                                                   EXHIBIT 10.24

                                                         [SOUTHERN COMPANY LOGO]

SOUTHERN COMPANY GENERATION
Post Office Box 2641
Birmingham, Alabama 35291

Tel 205.992.6011

April 10, 2003

Mr. Marc Merritt
President
Horizon Natural Resources Sales Company
2000 Ashland Drive
Ashland, Kentucky  41101-7058

Mr. Christopher C. Womack
Senior Vice President - Fossil & Hydro Power
Georgia Power Company
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia  30308-3374

Re:   Agreement for Purchase and Sale of Coal between Horizon Natural Resources
      Sales Company and Georgia Power Company

Gentlemen:

Horizon Natural Resources Sales Company, a Kentucky corporation ("Seller"), and
Georgia Power Company, a Georgia corporation ("Purchaser"), have entered into a
new agreement for the purchase and sale of coal from 2004 through 2010 ("New
Agreement"). (Seller and Purchaser are sometimes hereinafter referred to
collectively as the "Parties" or separately as a "Party.") The terms and
conditions of the New Agreement are as follows:

1.    Definitions. In addition to other terms defined elsewhere in this letter
      agreement, the following terms shall have the following meanings whenever
      such terms are used in the New Agreement:

      (a) "Coal Price" means the price for coal supplied under the New
      Agreement, which shall be determined from time to time as provided in
      paragraphs 6, 7, and 8 of this letter agreement.

      (b) "Coal Property" means the real property, mineral interests,
      preparation facilities, loading facilities, and related improvements that
      are located in Knott, Perry, or Leslie Counties, Kentucky, and are owned
      or controlled by Seller or its affiliates.

      (c) "Contract Year" means each period of twelve calendar months beginning
      on January 1 and ending on December 31 during the term of the New
      Agreement. The first Contract Year shall begin on January 1, 2004, and end
      on December 31, 2004.

      (d) "Monthly Quantity" means the quantity of coal scheduled to be supplied
      by Seller to Purchaser under the New Agreement during a calendar month.

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

      (e) "Semiannual Period" means each period of six calendar months during a
      Contract Year. The first Semiannual Period of each Contract Year shall
      begin on January 1 and end on June 30, and the second Semiannual Period of
      each Contract Year shall begin on July 1 and end on December 31.

      (f) "Semiannual Quantity" means the quantity of coal scheduled to be
      supplied by Seller to Purchaser under the New Agreement during a
      Semiannual Period.

      (g) "Shipment" means one lot of coal, in sufficient quantities to fill a
      unit train, loaded into railcars for delivery to Purchaser.

      (h) "Ton" or "ton" means an avoirdupois weight of 2,000 pounds.

      (i) "Typo Facility" means Seller's loading facility located near Hazard,
      Kentucky.

2.    Term. The New Agreement shall become effective as of April 1, 2003, and
      shall remain in effect through December 31, 2010, unless earlier
      terminated as hereinafter provided. Shipments under the New Agreement
      shall begin in January, 2004.

3.    General Provisions. During each Contract Year while the New Agreement
      remains in effect, Seller shall sell to Purchaser, and Purchaser shall
      purchase from Seller, [_ _ _ _] tons of coal produced from the Coal
      Property. Seller's obligation to sell and Purchaser's obligation to
      purchase such coal are subject to the termination provisions set forth in
      paragraphs 7(d) and 12 of this letter agreement. The New Agreement
      consists of the following documents: (i) this letter agreement; (ii) the
      document entitled "Computation of SO2 Allowance Transfers," which is
      attached hereto as Exhibit A and made a part of the New Agreement; (iii)
      the document entitled "Changes in Environmental-Related Requirements,"
      which is attached hereto as Exhibit B and made a part of the New
      Agreement; and (iv) the document entitled "Terms and Conditions of Coal
      Purchase," as revised February 7, 2003 (hereinafter referred to as
      "Additional Terms"), which is attached hereto as Exhibit C and made a part
      of the New Agreement. All references to "the Agreement" in the Additional
      Terms shall be deemed to refer to the New Agreement. In the event of any
      conflict between the terms of this letter agreement and the Additional
      Terms, the terms of this letter agreement shall control and take
      precedence over the Additional Terms.

4.    Quantity. Except as otherwise provided in this letter agreement, Seller
      shall supply to Purchaser [_ _ _ _] tons of coal during each Contract
      Year, which shall be supplied at the rate of [_ _ _ _] tons during each
      Semiannual Period and in [_ _ _ _] Shipments during each Semiannual
      Period. Notwithstanding the foregoing provisions of this paragraph 4,
      Purchaser may elect, in its sole discretion, to adjust the quantity of
      coal to be supplied under the New Agreement by increasing the Semiannual
      Quantity as follows:

      (a) For each Semiannual Period of each Contract Year, Purchaser may
      increase the Semiannual Quantity to [_ _ _ _] tons; provided, however,
      that the total quantity of coal supplied under the New Agreement during
      each Contract Year shall [_ _ _ _] tons. As a result, the Monthly Quantity
      for each calendar month during a Semiannual Period shall [_ _ _ _] tons
      and [_ _ __] tons.

      (b) If Purchaser elects to increase the Semiannual Quantity for any
      Semiannual Period, Purchaser shall give Seller written notice thereof,
      which shall specify (i) the Semiannual Quantity for such Semiannual Period
      and (ii) the Monthly Quantity for each calendar month during such
      Semiannual period. Such notice shall be given [_ _ _ _] days prior to
      the beginning of the Semiannual Period to which such increase applies.

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

5.    Source of Coal. All coal supplied under the New Agreement shall be
      produced from the Coal Property and shall be shipped from the Typo
      Facility. In the event that Seller desires to supply coal under the New
      Agreement from a source other than the Coal Property, Seller shall first
      obtain Purchaser's written consent, which shall not be unreasonably
      withheld, but in no event shall such consent be withheld if the following
      conditions are satisfied: (i) such source is owned or controlled by Seller
      or its affiliates; (ii) the quality of coal from such source shall comply
      with the specifications set forth in paragraph 10 of this letter
      agreement; (iii) the weighing and sampling systems associated with such
      source are acceptable to Purchaser; and (iv) the delivered cost (stated in
      cents/MMBtu) of coal from such source shall not exceed the then-current
      delivered cost (stated in cents/MMBtu) of Shipments from the Typo
      Facility.

6.    Coal Price. The Coal Price for each Contract Year shall be determined as
      provided in this paragraph 6 and paragraphs 7 and 8 of this letter
      agreement. The Coal Price for each Contract Year shall be stated in
      dollars per ton f.o.b. railcar at the Typo Facility and shall become
      effective as of January 1 of such Contract Year and remain fixed through
      December 31 of such Contract Year but shall be subject to adjustments for
      calorific value, excess moisture, excess ash, and ash fusion temperature
      as provided in Section 11 of the Additional Terms. All such adjustments
      shall be calculated to six decimal places and then rounded to four decimal
      places. The Coal Price for the first Contract Year shall be set forth in
      each purchase order issued by Purchaser with respect to the New Agreement;
      and from time to time thereafter, Purchaser shall issue change orders to
      such purchase order(s) to reflect the Coal Price for each subsequent
      Contract Year that occurs while the New Agreement remains in effect. Such
      purchase order(s) and change orders are for administrative purposes only
      and shall not constitute, nor be deemed to result in, any amendment,
      change, or modification of the terms and conditions of the New Agreement.

7.    Determination of Coal Price for 2004. At any time during the period
      between May 1, 2003, and December 1, 2003, but not more than once during
      such period, Purchaser shall determine the Coal Price for 2004 ("2004
      Price") pursuant to a market price review conducted by Purchaser. The
      following provisions shall apply to such review and to the determination
      of the 2004 Price:

      (a) Purchaser shall give Seller written notice that Purchaser intends to
      conduct a market price review and shall give such notice at least
      five days before soliciting bids from other suppliers.

      (b) In soliciting bids from other suppliers, Purchaser shall request
      offers to supply [_ _ _ _] tons of coal annually during the then-current
      remaining term of the New Agreement and under terms and conditions similar
      to the terms and conditions of the New Agreement (including, without
      limitation, provisions related to annual market price reviews); provided,
      however, that if Purchaser changes its strategy for compliance with
      environmental-related requirements after May 1, 2003, Purchaser may
      decide, in the exercise of its reasonable judgment, to use fuel with
      specifications different from the specifications set forth in paragraph 10
      of this letter agreement and may consider fuel with such different
      specifications in conducting the market price review. Purchaser shall
      consider only bona fide offers received from viable suppliers ("Qualifying
      Offers") in evaluating bids with respect to the market price review.

      (c) Based on Qualifying Offers, Purchaser shall determine the lowest
      weighted average delivered cost of coal as of the date on which bids are
      due ("Lowest Delivered Cost") [_ _ _ _] tons of coal that Purchaser
      could purchase from one or more suppliers who have submitted Qualifying
      Offers; and in making such determination, Purchaser shall take into
      account then-current costs for transportation, taxes, sulfur dioxide
      allowances, nitrogen oxide allowances, and other applicable emission
      allowances related to each Qualifying Offer. After Purchaser has
      determined the Lowest Delivered

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

      Cost, Purchaser shall next calculate an equivalent price f.o.b. railcar at
      the Typo Facility ("Typo Equivalent Price") based on the Lowest Delivered
      Cost.

      (d) Purchaser shall promptly notify Seller, by fax transmission with
      written confirmation mailed immediately thereafter, of the Typo Equivalent
      Price. Within fifteen days after such notice has been transmitted to
      Seller by fax, Seller shall notify Purchaser, by fax transmission with
      written confirmation mailed immediately thereafter, either (i) that Seller
      has decided to accept the Typo Equivalent Price or (ii) that Seller has
      decided to terminate the New Agreement.

      (e) If Seller decides to accept the Typo Equivalent Price, it shall become
      the 2004 Price; and the New Agreement shall continue in effect. If Seller
      decides to terminate the New Agreement, the New Agreement shall terminate
      effective as of December 31 of the Contract Year in which the market price
      review is conducted and shall have no force and effect after such date.

8.    Determination of Coal Price for Subsequent Years. If the New Agreement
      remains in effect on January 1, 2005, Purchaser shall determine annually
      thereafter a new Coal Price for the next Contract Year ("Next Year Price")
      pursuant to a market price review conducted by Purchaser. The following
      provisions shall apply to each such review and to the determination of
      each Next Year Price:

      (a) The Next Year Price shall be determined at any time during the period
      between January 1 and December 1 of the Contract Year immediately prior to
      the Contract Year for which the Next Year Price is determined, but not
      more than once during each such period. The Parties shall comply with the
      provisions set forth in paragraphs 7(a), 7(b), 7(c), and 7(d) of this
      letter agreement in determining the Typo Equivalent Price for the Contract
      Year involved and in giving notices with respect to such review.

      (b) If Seller decides to accept the Typo Equivalent Price for the Contract
      Year involved, it shall become the Next Year Price; and the New Agreement
      shall continue in effect. If Seller decides to terminate the New
      Agreement, the New Agreement shall terminate effective as December 31 of
      the Contract Year in which the market price review is conducted and shall
      have no force and effect after such date.

9.    Performance Incentive. During each calendar month of each Contract Year,
      Purchaser shall pay Seller [_ _ _ _] of the Coal Price for such Contract
      Year on all Shipments under the New Agreement during such calendar month
      and shall withhold, as a performance incentive, [_ _ _ _] of such Coal
      Price ("Withheld Amount") for such Shipments. With respect to each
      calendar month in which Seller supplies at least the Monthly Quantity for
      such calendar month, Purchaser shall pay the Withheld Amount to Seller in
      a lump sum promptly after the end of such calendar month. Purchaser shall
      have no obligation to pay, and may retain permanently, the Withheld Amount
      related to Shipments during any calendar month in which Seller fails to
      supply at least the Monthly Quantity for such calendar month; provided,
      however, that if such failure results from an event of force majeure under
      Section 13 of the Additional Terms or from a cause or circumstance within
      Purchaser's control, then Purchaser may not retain the Withheld Amount and
      shall pay the Withheld Amount to Seller promptly after the end of such
      calendar month.

10.   Quality Requirements. Each Shipment under the New Agreement shall conform
      to the requirements set forth in Section 7-A of the Additional Terms. In
      addition, each Shipment shall conform to the following analysis on an "as
      received" basis:

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

<TABLE>
<CAPTION>
                                                      Requirement
           Specification                             (per Shipment)
           -------------                             --------------
<S>                                                  <C>
Maximum Moisture                                         [_ _ _ _]%
Maximum Ash                                              [_ _ _ _]%
Maximum Sulfur                                           [_ _ _ _]%
Minimum Volatile Matter                                  [_ _ _ _]%
Minimum Ash Fusion Temperature
         Softening (H=W Reducing Atmosphere)             [_ _ _ _]degrees F
Minimum Grindability (Hardgrove
         Grindability Index ("HGI"))                     [_ _ _ _] HGI
Minimum Calorific Value                                  [_ _ _ _] Btu/lb.
</TABLE>

11.   Sulfur Adjustments. Notwithstanding the provisions of Section 11.D of the
      Additional Terms, excess sulfur adjustments regarding Shipments under the
      New Agreement shall be determined as follows:

      (a) With respect to Shipments during the first, second, third, and fourth
      Contract Years (2004 through 2007), Purchaser shall furnish to Seller, at
      the end of each Contract Year, a statement of the annual weighted average
      SO(2) content (stated in lbs./MMBtu) of all Shipments under the New
      Agreement during such Contract Year. If the annual weighted average SO(2)
      content of all Shipments during a Contract Year exceeds [_ _ _ _], then
      Seller shall provide to Purchaser, within ten working days after Seller
      has received such statement, a completed EPA Allowance Transfer Form
      authorizing transfer of a sufficient number of SO(2) allowances, from
      Seller's EPA account to an EPA account designated by Purchaser, to bring
      the actual annual weighted average SO(2) content of such Shipments into
      compliance with the limit of [_ _ _ _] lbs./MMBtu. No other remedy shall
      apply with respect to the annual weighted average SO(2) content of such
      Shipments. The method for calculating the number of SO(2) allowance
      transfers pursuant to this paragraph 11(a) is illustrated in Exhibit A.

      (b) With respect to Shipments during the fifth, sixth, and seventh
      Contract Years (2008 through 2010), excess sulfur adjustments shall be
      determined pursuant to Section 11.D of the Additional Terms; provided,
      however, that the monetary rate used in calculating such adjustments shall
      be [_ _ _ _], rather than the monetary rate stated in Section 11.D.

12.   Termination. In addition to Purchaser's other rights and remedies under
      the New Agreement, Purchaser may cancel the remaining Shipments to be
      supplied under the New Agreement and may terminate the New Agreement under
      one or more the following conditions:

      (a) Purchaser may terminate the New Agreement in the event that (i) Seller
      fails to supply, during a calendar month, at least the Monthly Quantity
      for such calendar month and (ii) such failure does not result from an
      event of force majeure under Section 13 of the Additional Terms or from a
      cause or circumstance within Purchaser's control. If Purchaser elects to
      terminate the New Agreement pursuant to this paragraph 12(a), Purchaser
      shall give Seller written notice thereof, which shall specify the
      effective date of termination and shall be given at least thirty days
      prior to such date.

      (b) Purchaser may terminate the New Agreement as provided in paragraphs
      (e) and (f) of Exhibit B.

      (c) Purchaser may terminate the New Agreement as provided in Section 12.C
      of the Additional Terms.

<PAGE>

13.   Access to Seller's Records. Seller shall maintain accurate records
      relating to Shipments under the New Agreement in accordance with generally
      accepted accounting principles and shall retain such records for at least
      three years after the New Agreement is terminated or expires. Seller shall
      make such records available to Purchaser, its accountants, auditors, or
      other authorized representatives, who shall be given access to and be
      permitted to examine such records at reasonable times. If an audit
      determines that any payments previously made under the New Agreement
      ("Previous Payments") were not properly calculated, adjustments shall be
      promptly made in amounts to be paid in the future for Shipments under the
      New Agreement ("Future Payments") to reflect the proper amounts of such
      adjustments; or if no Future Payments are then due, payments shall be
      promptly made to reflect the difference between the Previous Payments and
      the proper amounts determined by audit. The provisions of this paragraph
      13 shall survive the termination or expiration of the New Agreement.

14.   Access to Coal Property. Purchaser or its representative, at any time
      during normal Coal Property operation, may enter upon the Coal Property,
      at Purchaser's sole risk and expense, for any of the following purposes:
      (i) to inspect and examine the method and manner of, and equipment used
      in, mining, producing, washing, loading, unloading, transporting,
      sampling, weighing, analyzing, or handling of coal to be supplied under
      the New Agreement; (ii) to take samples of coal for Purchaser's analyses;
      or (iii) in connection with any accounting, audit, or examination of
      Seller's records. Prior to entering the Coal Property, Purchaser's
      representative shall check in with appropriate personnel at the entrance
      to the Coal Property. No such inspection by Purchaser shall be deemed a
      waiver of any of Purchaser's rights or relieve Seller of any obligations
      under the New Agreement.

15.   Confidentiality. The Parties shall treat the terms and conditions of the
      New Agreement and the Coal Prices determined pursuant to the New Agreement
      as confidential and proprietary information. Neither Party shall disclose
      any such information to any third party without the other Party's prior
      written consent, which consent shall not be unreasonably withheld;
      provided, however, that no such consent shall be needed where such
      disclosure (i) is required by law, regulation, or regulatory agencies
      having jurisdiction over one of the Parties or (ii) is made in connection
      with a Party's assertion of a claim or defense in a legal proceeding, and
      that in either of these events, the Party intending to make such
      disclosure shall advise the other Party in advance and cooperate to
      minimize the disclosure of any such information. Notwithstanding the
      foregoing provisions of this paragraph 15, either Party may disclose such
      information to a prospective purchaser of the stock or assets of that
      Party or to a lender in connection with a financing transaction; provided,
      however, that any such prospective purchaser or lender shall be bound by
      the provisions of this paragraph 15. For purposes of this paragraph 15,
      the term "third party" shall not include (i) a Party's parent, subsidiary,
      or affiliate or (ii) the Parties' respective officers, directors,
      employees, legal advisers, accountants, or consultants.

16.   Revision of Additional Terms. From time to time during the term of the New
      Agreement, Purchaser or its agent may revise the Additional Terms. With
      respect to each revision of the Additional Terms, Purchaser shall provide
      a copy of the Additional Terms, as revised, to Seller at least thirty days
      before they become applicable to the New Agreement. The Additional Terms,
      as revised, shall be attached to this letter agreement as Exhibit C, shall
      replace the then-current version of the Additional Terms, and shall become
      a part of the New Agreement; provided, however, that if Seller objects to
      any provisions of the Additional Terms, as revised, Seller may terminate
      the New Agreement by giving Purchaser written notice thereof, which shall
      specify the effective date of termination and shall be given at least
      ninety days before such date.

17.   Notices. Except for shipping notices and "as loaded" coal quality analyses
      (to be provided as required by the Additional Terms) and except as
      otherwise provided in this letter agreement, any notice, request, consent,
      demand, report, or statement (collectively, "Notice") given by one Party
      to

<PAGE>

      the other Party shall be in writing and shall be sent by overnight courier
      (in which case the Notice shall be deemed to have been received on the
      next business day after it is sent) or by certified mail (in which case
      the Notice shall be deemed to have been received 72 hours after it is
      sent) to the appropriate addresses listed in this paragraph 17.

      (a) Each Notice to Purchaser       Vice President
          shall be sent to:              Fuel Services 14N-8160
                                         Southern Company Services, Inc.
                                         P.O. Box 2641
                                         Birmingham, Alabama 35291-8160

                         with a copy to: Manager, Fuel Services
                                         Southern Company Services, Inc.
                                         Bin 10171
                                         241 Ralph McGill Boulevard, N.E.
                                         Atlanta, Georgia  30308-3374

          or to such other addresses as Purchaser designates by Notice to
          Seller.

      (b) Each Notice to Seller          Vice President, Contract Administration
          shall be sent to:              Horizon Natural Resources Sales Company
                                         2000 Ashland Drive
                                         Ashland, Kentucky  41101-7058

                         with a copy to: Crimson Coal Corporation
                                         166 Prosperous Place
                                         Suite 200
                                         Lexington, Kentucky  40509

          or to such other addresses as Seller designates by Notice to
          Purchaser.

18.   Prior Agreements. The Parties have previously entered into the following
      contracts, which are currently in effect: (i) that certain Amended and
      Restated Agreement for the Sale and Purchase of Coal dated July 22, 1999
      ("Marrowbone Agreement"); (ii) that certain Agreement for Purchase and
      Sale of Coal dated January 24, 2001 ("Pike County Agreement"); and (iii)
      that certain Amended and Re-stated Agreement for Sale and Purchase of Coal
      dated October 1, 2001 ("Typo Agreement"). (The Marrowbone Agreement, the
      Pike County Agreement, and the Typo Agreement are hereinafter referred to
      collectively as the "Prior Agreements.") Nothing contained in the New
      Agreement shall affect the Parties' respective rights, duties,
      obligations, and interests under the Prior Agreements, all of which shall
      remain in effect, according to their respective terms, after this letter
      agreement is signed by the Parties.

19.   Other Provisions. The headings to paragraphs of this letter agreement and
      to sections of the Additional Terms are for convenience only and shall not
      be considered in determining the intent of the Parties. Time is of the
      essence in the performance of the New Agreement. The New Agreement
      contains the entire agreement between the Parties with respect to the
      subject matter hereof; and all prior agreements, promises,
      representations, understandings, negotiations, and communications, whether
      oral or in writing, between the Parties with respect to the subject matter
      hereof (other than the Prior Agreements) are merged into and superseded by
      the New Agreement.

<PAGE>

If you concur with the provisions of this letter agreement as set forth above,
please have an authorized officer sign in the appropriate space provided on the
next page and return three counterpart originals of this letter agreement to me.
Upon execution of this letter agreement by the Parties, we will forward a fully
executed counterpart original for your files.

Sincerely,

/s/    Deborah J. Rouse by DWJ
Deborah J. Rouse
Manager, Coal and Transportation Procurement

Attachments (Exhibits A, B, and C)

<PAGE>

ACCEPTED AND AGREED TO:

HORIZON NATURAL RESOURCES                       GEORGIA POWER COMPANY
    SALES COMPANY

By: /s/  Marc Merritt                           By: /s/  Christopher C. Womack
    --------------------------------                ----------------------------
Its: President                                  Its: Senior Vice President

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

                                    EXHIBIT A

                     COMPUTATION OF SO(2) ALLOWANCE TRANSFERS

      With respect to Shipments during the first, second, third, and fourth
Contract Years (2004 through 2007), a transfer of SO(2) allowances is made for
each Contract Year in which the annual weighted average SO(2) content (stated in
lbs./MMBtu) of all Shipments during such Contract Year exceeds [_ _ _ _]
lbs./MMBtu ("SO(2) Guarantee"). An example of the method of calculating the
number of SO(2) allowances to be transferred is as follows:

   (a) Assume that the following Shipments are received during a Contract Year:

<TABLE>
<S>                                                                    <C>
[_ _ _ _]                                                       =     [_ _ _ _] tons
[_ _ _ _]                                                       =     [_ _ _ _] Btu/lb.
[_ _ _ _]                                                       =     [_ _ _ _]%
</TABLE>

   (b) Based on the foregoing, the following calculations would be made:

      Step 1: Calculate (to six decimal places) the [_ _ _ _] of all Shipments
              received during the Contract Year:

<TABLE>
<S>                  <C>                 <C>                 <C>
[_ _ _ _]             [_ _ _ _]           [_ _ _ _]
---------       x    ----------    x      ---------       =  [_ _ _ _]
[_ _ _ _]             [_ _ _ _]           [_ _ _ _]
</TABLE>

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

      Step 2: Calculate (to six decimal places) the [_ _ _ ] of all
              Shipments received during the Contract Year:

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

              Thus, the actual [_ _ _ _]

      Step 3: Calculate the total amount of [_ _ _ _] received during the
              Contract Year:

<TABLE>
<S>                   <C>                <C>                <C>             <C>
                      [_ _ _ _]           [_ _ _ _]          [_ _ _ _]
[_ _ _ _]      x      ---------   x       ---------    x     ---------    =  [_ _ _ _]
                      [_ _ _ _]           [_ _ _ _]          [_ _ _ _]

</TABLE>

      Step 4: Calculate the amount of [_ _ _ _] resulting from the excess
              determined in Step 2 and then round to the nearest whole unit:

<TABLE>
<S>                        <C>                  <C>                <C>
                            [_ _ _ _]           [_ _ _ _]
[_ _ _ _]            x      ---------    x      ---------       =  [_ _ _ _]
                            [_ _ _ _]           [_ _ _ _]

</TABLE>

      Because [_ _ _ _] tons SO(2) equates to [_ _ _ _] SO(2) allowances,
      [_ _ _ _] is the number of [_ _ _ _]to be transferred from Seller's EPA
      Account to an EPA account designated by Purchaser.

<PAGE>

                                    EXHIBIT B

                  CHANGES IN ENVIRONMENTAL-RELATED REQUIREMENTS

      (a) The term "Environmental-Related Requirement," whether in the singular
or the plural, means the following:

            (1)   any environmentally related prohibition, restriction, or
                  limitation regarding the burning of coal at one or more of the
                  electric-generating plants designated by Purchaser as a
                  destination for Shipments under the New Agreement ("Designated
                  Plants");

            (2)   any prohibition, restriction, or limitation regarding (i) the
                  quality of coal that may be burned (including, without
                  limitation, any constituent specification) at one or more of
                  the Designated Plants or (ii) the type or amount of emissions
                  from such plant(s);

            (3)   any rule or requirement affecting the permissible means for
                  complying with any such prohibition, restriction, or
                  limitation; or

            (4)   any imposition of a cost, fee, tax, or other economic burden
                  on Purchaser related to (i) the production of electricity
                  (either generally or by means of coal-fired electric
                  generation), (ii) the quantity of coal purchased or burned by
                  Purchaser at one or more of the Designated Plants, (iii) any
                  constituent specification of coal purchased or burned by
                  Purchaser at such plant(s), (iv) the type or amount of
                  emissions from such plant(s), or (v) the installation of any
                  type of environmental-related equipment required by any
                  regulatory authority to which Purchaser is subject.

In addition, the term shall be deemed to include Purchaser's strategy, as
determined by Purchaser in its reasonable judgment, for compliance with
Environmental-Related Requirements.

      (b) A change in Environmental-Related Requirements shall be deemed to have
occurred in any one or more of the following circumstances: (i) there is any
increase or decrease in existing Environmental-Related Requirements; (ii)
Purchaser decides, in its reasonable judgment, to change its strategy for
compliance with any existing Environmental-Related Requirements; or (iii) a new
Environmental-Related Requirement is imposed on Purchaser as a result of any
federal or state law, administrative regulation or ruling, local ordinance,
court order or decision, or any revision in the interpretation or implementation
of such law, regulation, ruling, ordinance, order, or decision. The Parties
acknowledge and agree that a change in Environmental-Related Requirements may
occur even though (i) such requirement is stated as a restriction, limitation,
or obligation imposed on Purchaser and its affiliates or some other group of
utilities or (ii) such requirement affects Purchaser in a general way and is not
directed at specific plants, fuels, fuel supplies, or other operating
conditions.

      (c) The Parties acknowledge and agree that the provisions of this Exhibit
B are intended to provide rights in addition to the rights provided in the
Additional Terms and that the price, specifications, quantity, and
destination(s) of coal to be supplied under the New Agreement are predicated on
Environmental-Related Requirements that are known and in effect as of April 1,
2003. For purposes of this paragraph (c), an Environmental-Related Requirement
shall not be deemed to be "known" if it relates to any federal or state law,
administrative regulation or ruling, local ordinance, or court order or decision
or interpretation of such law, regulation, ruling, ordinance, order, or decision
(collectively, "Legal Requirements") that is being challenged in any
administrative or judicial proceeding ("Legal Proceeding") as of April 1, 2003.
Upon the final resolution of the Legal Proceeding (including any appeals related
to the Legal Proceeding), Purchaser shall determine, in its reasonable judgment,
if the

                                      B-1
<PAGE>

Legal Requirements (whether changed or unchanged as a result of the Legal
Proceeding) constitute a change in Environmental-Related Requirements.

      (d) In the event that a change in Environmental-Related Requirements
occurs after April 1, 2003, then Purchaser shall determine, in its reasonable
judgment, (i) how to comply with such change and (ii) whether such change has
had or may have an adverse impact on Purchaser's use of coal to be supplied
under the New Agreement at one or more of the Designated Plants. Any change in
Environmental-Related Requirements that has one or more of the following effects
shall be deemed to have an adverse impact on Purchaser's use of coal to be
supplied under the New Agreement at such plant(s), even though such requirements
may allow Purchaser a choice of options for complying with such requirement
(which choice may include, for example, the payment of a fee or tax in lieu of
the installation of equipment, the use of coal of different constituent
specifications, or the reduction in the overall use of coal at such plant(s)):

            (1)   the change imposes a cost, fee, tax, or other economic burden
                  on Purchaser concerning (i) the constituent specifications of
                  coal purchased for or burned at such plant(s) or (ii) the type
                  or amount of emissions from such plant(s);

            (2)   the change directly prevents or restricts Purchaser from using
                  coal to be supplied under the New Agreement at such plant(s);

            (3)   the change requires Purchaser to install equipment (including,
                  without limitation, flue gas desulfurization equipment,
                  selective catalytic reduction equipment, selective
                  non-catalytic reduction equipment, equipment for co-firing
                  with natural gas, or particulate removal equipment) at such
                  plant(s) in order to comply with such change; or

            (4)   the change requires or permits Purchaser to use coal of a
                  quality (including, without limitation, sulfur) different from
                  the specifications set forth in paragraph 10 of the letter
                  agreement.

      (e) If Purchaser determines that a change in Environmental-Related
Requirements has had or may have, at a future date, an adverse impact on the use
of coal to be supplied under the New Agreement, Purchaser shall so notify Seller
in writing. Upon receipt of such notice, Seller shall have the option to
propose, within thirty days after receipt of such notice, any steps available to
Seller in its mining and processing of the coal, in the supply of substitute
coal, or other measure that would result in as low a delivered cost of fuel at
the Designated Plants as Purchaser could obtain by purchasing reasonably
available substitute fuel, taking into consideration any fees, taxes, costs, or
other economic burdens imposed on the use of coal at the Designated Plants. In
the event that Purchaser determines, in its reasonable judgment, that Seller
cannot achieve this result, then Purchaser may terminate the New Agreement by
giving Seller written notice thereof, which shall specify the effective date of
termination and shall be given at least ninety days prior to such date.
Purchaser may give such notice either before or after a change in
Environmental-Related Requirements becomes effective.

      (f) If, at any time during the term of the New Agreement and regardless of
whether a change in Environmental-Related Requirements has occurred, Purchaser
determines, in its reasonable judgment, that any operational or environmental
compliance problem has resulted from the components or characteristics of
Seller's coal or the products of its combustion (including, without limitation,
nitrogen oxide emissions, mercury emissions, chlorine emissions, particulate
emissions, and carbon emissions) or any other constituent or property of the
coal not otherwise specified herein, the Parties shall immediately enter into
discussions in a good-faith effort to resolve the problem. If such discussions
fail to resolve such problem in a manner that, in Purchaser's judgment, is
reasonable and would not impose an

                                      B-2
<PAGE>

unreasonable additional expense on Purchaser, then Purchaser may terminate the
New Agreement by giving Seller written notice thereof, which shall specify the
effective date of termination and shall be given at least ninety days prior to
such date. No expense contemplated by this paragraph (f) or any other provision
of this Exhibit B shall be deemed reasonable if it would result in a delivered
cost of coal under the New Agreement that exceeds the delivered cost of
competitive fuels or sources then available to Purchaser.

                                      B-3
<PAGE>

                                                                  REVISED 2/7/03

                                    EXHIBIT C

                      TERMS AND CONDITIONS OF COAL PURCHASE

1.    GOVERNING DOCUMENTS

      Listed in order of governance, the Purchase Order, these Terms and
      Conditions, and the executed Producer-Broker Statement (where applicable),
      shall constitute the entire Agreement (hereinafter the "Agreement")
      between Purchaser and Seller as to coal produced and sold under the
      Purchase Order. No additional or different terms stated by Seller in an
      acceptance or written confirmation of the Agreement shall be effective
      unless such terms shall be specifically accepted in writing by Purchaser.
      No modification of the Agreement shall be effective unless the same shall
      be reduced to writing and signed by the duly authorized agents of the
      parties. There are no representations, understandings, or agreements,
      either oral or written, which are not included as part of the Agreement.

2.    SELLER'S ACCEPTANCE

      Acknowledgment of the Purchase Order or shipment of coal under the
      Agreement shall constitute Seller's acknowledgment and acceptance of all
      provisions herein and all provisions of the Purchase Order.

3.    BROKERS

      Any Seller who does not mine or produce the coal to be delivered under the
      Agreement shall be deemed a Broker. Broker shall be responsible for
      providing a copy of these Terms and Conditions and the Purchase Order
      (with optional deletion of price) to the Producer designated in the
      Producer-Broker Statement from whom Broker purchases or acquires coal to
      be delivered hereunder. Broker shall, in its agreement with Producer, bind
      Producer to all of the terms of the Purchase Order and to all of these
      Terms and Conditions and shall be responsible for compliance therewith by
      Producer; provided, however, that failure of Producer to comply therewith
      shall not relieve Broker from performance of all its obligations under the
      Agreement. The liability of Producer and Broker shall be joint and
      several. Any reference herein to "Seller" shall be deemed to refer to
      Producer and Broker.

4.    WARRANTY

      Seller represents and warrants that it, or the Producer identified in the
      Producer-Broker Statement, owns or controls the Coal Property described in
      the Purchase Order; that all coal shipped pursuant to the Agreement is
      shipped free and clear of all liens, encumbrances, and claims of all third
      parties; that the Coal Property contains commercially recoverable coal of
      a quality and in quantities sufficient to satisfy the requirements of the
      Agreement; that coal will not be used or sold from the Coal Property so as
      to result in an inability of Seller to deliver to Purchaser the coal in
      the quantities and quality and at the times provided in the Agreement; and
      that the coal shipped under the Agreement will be mined and produced from
      the Coal Property; and that no substitute coal shall be shipped by Seller
      to Purchaser under the Agreement without prior written approval of
      Purchaser.

5.    INSPECTION

      Purchaser or its designated agent shall have the right at all reasonable
      times to enter upon the Coal Property and/or other appropriate location
      and to inspect and examine the method, equipment, and manner of mining,
      producing, storing, washing, blending, crushing, loading, unloading,
      transporting, sampling, analyzing, and other handling of coal to be sold
      and delivered under the Agreement, and to take samples of coal for
      Purchaser's analyses. No inspection by

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

      Purchaser shall be deemed a waiver of any of Purchaser's rights or relieve
      Seller of any obligation or duty imposed by the Agreement.

6.    QUANTITY

      Seller shall sell and deliver to Purchaser, and Purchaser shall purchase
      and receive, the quantity of coal within the period of time specified in
      the Purchase Order. All coal sold under the Agreement shall be delivered
      in reasonably equal shipments and at regular intervals over the term of
      the Purchase Order or in such other manner as may be specifically stated
      in the Purchase Order. Unless Seller is excused from delivery by force
      majeure (as hereinafter defined) and in addition to any other remedies at
      law or equity, Purchaser shall have the right immediately to terminate the
      Agreement should Seller at any time (a) fail to ship the quantity of coal
      agreed to be shipped in any monthly period or (b) deliver more than the
      monthly quantity of coal stated in the Purchase Order without prior
      approval of Purchaser.

7-A.  COAL SIZE AND EXTRANEOUS MATERIAL

      Unless otherwise specified in the Purchase Order, all coal shipped
      pursuant to the Agreement shall not exceed a [_ _ _ _] in any dimension,
      shall contain no more than [_ _ _ _] of particles [_ _ _ _] and shall be
      the [_ _ _ _] (or whole washed product) with [_ _ _ _]. Purchaser may
      reject any shipment which, in Purchaser's reasonable judgment, does not
      comply with the aforesaid requirements, which judgment may be based upon
      visual inspection.

7-B.  COAL QUALITY SPECIFICATIONS

      The coal specifications pertaining to the coal to be delivered shall be
      stated in the Purchase Order.

7-C.  SYNTHETIC FUEL

      No coal shipped pursuant to the Agreement shall be treated with chemicals,
      heat, binders, petroleum products or other substances, whether or not
      treated with the intent to qualify the coal under the Internal Revenue
      Code Section 29 (Credit for producing fuel from a non-conventional
      source). Purchaser may reject any shipment that does not comply with the
      aforesaid requirements and Purchaser may terminate the Agreement
      immediately with no liability to Seller. Seller shall be liable for all
      costs incurred as a result of shipping coal that does not comply with the
      aforesaid requirements.

8.    TRANSPORTATION

      Purchaser at its sole discretion may direct that coal purchased under the
      Agreement be delivered by the carrier to the plant or location specified
      in the Purchase Order or to any other location specified by Purchaser;
      provided, however, that Purchaser shall remain liable for payment of the
      purchase price of the coal directed to such other location.

      A.    Scheduling of Shipments

            Before the first shipment is scheduled and prior to the beginning of
            each subsequent calendar month while the Purchase Order is in
            effect, Seller shall telephone Southern Company Services' Production
            Support Analyst for shipping instructions. Seller's failure to
            comply with the shipping instructions may result in rejection of
            shipments or other sanctions. Seller shall be responsible for all
            monetary charges this rejection or other action may cause, be it
            carrier imposed or otherwise.

                                      C-1
<PAGE>

      B.    Delivery by Rail

            All shipments of coal under the Agreement shall be f.o.b. railcar at
            the loading point specified in the Purchase Order and the loading
            facility shall be available to load shipments on a 24 hour/day
            basis, seven (7) days per week. Seller agrees not to permit coal to
            be loaded in railcars that contain foreign material. Seller shall
            bear all expenses and costs associated with delivery of the coal
            f.o.b. railcar and shall fully defend and indemnify Purchaser
            against any claim made against Purchaser for any cost, expenses or
            damage (either liquidated or unliquidated) which may be asserted
            against Purchaser arising out of or resulting from the delivery by
            Seller to Purchaser of any coal under this Agreement. In the event
            Seller should fail to deliver coal in the quantity or at the rate as
            provided in the Agreement, or in the event Purchaser cancels the
            Agreement or suspends further shipments pursuant to the Agreement,
            Seller shall pay Purchaser any freight charges (including without
            limitation, demurrage, car lease costs, storage fees, etc.) incurred
            by Purchaser. All coal shipped to Plants Bowen, Daniel, Miller,
            Scherer, and Wansley must be loaded into electro-pneumatic Rapid
            Discharge hopper cars.

            1.    Shipping Notice and "As Loaded" Coal Quality Analysis

                  A shipping notice (404 Bill of Lading) shall be electronically
                  transmitted, and at Purchaser's option, transmitted by telefax
                  to the destination plant and other locations as outlined in
                  the attached page entitled "Facsimile Numbers for Shipping
                  Notices and As Loaded Coal Quality Analysis."

                  Seller shall utilize Automatic Equipment Identification (AEI)
                  to correctly identify and list all cars in a computer system
                  during the loading process. The weight for each car or total
                  train weight shall be automatically entered into the computer
                  system if mine govern weights apply. Upon completion of
                  loading and prior to the train leaving, a 404 Bill of Lading
                  must be transmitted to the railroad via computer generating
                  Electronic Data Interchange (EDI).

                  The 404 Bill of Lading must provide the Carrier Name, Coal
                  Supplier, Loadout Name, Fuel P.O. Number, Destination, Tons
                  Shipped (if applicable), Number of Cars with quantity of Steel
                  and Aluminum, Transportation Contract, SES Train Number,
                  Loadout FSAC Number, Train Arrival Date/Time, Load Start
                  Date/Time, Load Finish Date/Time, Total Loading Time,
                  Bill-of-Lading (BOL) Release to Railroad Date/Time and Total
                  Train Consist including reporting marks and car numbers. "As
                  loaded" coal quality analysis of each train and such other
                  pertinent information about the shipment must be telefaxed or
                  telephoned to Purchaser within twenty-four (24) hours
                  following the loading of each train. Purchaser shall not be
                  obligated to unload any train unless the shipping notice and
                  "as loaded" coal quality analysis have been received. Seller
                  shall reimburse Purchaser for any demurrage or expenses
                  incurred as a result of failure to provide a shipping notice
                  and "as loaded" coal quality analysis to Purchaser as provided
                  herein. Shipping notices and "as loaded" coal quality analysis
                  shall be directed to the destination plant and other locations
                  as outlined in the attached page entitled "Facsimile Numbers
                  for Shipping Notices and As Loaded Coal Quality Analysis."

            2.    Passage of Title; Risk of Loss

                  Risk of loss shall pass from Seller to Purchaser when the rail
                  carrier accepts consignment, and passage of title shall occur
                  upon Purchaser's acceptance at destination plant from the rail
                  carrier except that Seller shall remain liable for coal bought
                  on a delivered basis until it is accepted at destination for
                  unloading.

                                      C-2
<PAGE>

            3.    Demurrage Liability and Other Costs

                  Seller shall be liable for and shall defend, indemnify, and
                  hold harmless Purchaser from any demurrage charges, excess
                  freight charges, deficiency freight charges, or other
                  transportation costs incurred by Purchaser as a result of
                  Seller's failure to satisfy loading and/or shipping
                  requirements.

            4.    Overloaded Railcars

                  It is the sole obligation and responsibility of Seller to be
                  aware of and conform to all rail carrier restrictions relating
                  to maximum allowable gross railcar weights. If cars are found
                  to be overloaded, Seller shall be responsible for any
                  associated costs for reducing the weight of cars to comply
                  with the applicable rail carrier's restrictions and shall be
                  obligated to provide Purchaser with corrected governing weight
                  documentation. Seller shall be responsible for any damage
                  resulting from overloaded cars. Maximum weight restrictions by
                  carrier are provided in the attached page entitled "Railcar
                  Weight Matrix."

            5.    Underloaded Railcars

                  It is the sole obligation and responsibility of Seller to load
                  trains to the minimum train weight as directed by and in
                  compliance with the applicable transportation contract. It
                  shall be Seller's responsibility to verify minimum weight from
                  Purchaser's transportation coordinator before loading train.
                  Railcars that are loaded for movement on Norfolk Southern
                  Railway under the Agreement shall be loaded to not less than
                  94% of UMLER capacity from non-batch-weigh Origins and 97% of
                  UMLER capacity from batch-weigh flood-load Origins.

      C.    Delivery by Barge

            For coal purchased f.o.b. shipping point, Seller shall provide or
            designate loading points which have adequate and accessible mooring
            and barge loading facilities sufficient to load the coal properly
            and within the appropriate loading time. Seller shall pay all costs
            of transportation of coal from the mine to the barge loading
            facility, including barge-loading charges. Purchaser shall pay cost
            of barge freight from the loading point to the unloading point.
            Purchaser shall arrange for the necessary barges and have such
            barges available at the loading point so as to permit loading by
            Seller in an orderly manner. Purchaser shall coordinate the arrival
            of barge at the loading point with Seller. Purchaser shall arrange
            for the barge operator to give Seller reasonable notice, either
            orally or in writing, of the expected arrival date of empty barges
            at the loading point. Seller shall be liable for and shall pay
            Purchaser for any transportation costs or demurrage charges incurred
            by Purchaser which may be occasioned by the breakdown or failure of
            the barge loading facilities or by the failure of Seller to furnish
            and load coal at the loading point at the proper times and in the
            proper quantities. Purchaser shall designate the carrier to tow the
            barge to the designated delivery point.

            For coal purchased f.o.b. shipping point, Seller shall bear all risk
            of loss until the carrier's barges have left the loading point and
            entered interstate commerce. Passage of title shall occur upon
            Purchaser's acceptance at destination plant from the barge carrier.
            Claims for coal lost en route shall be filed by Purchaser for the
            carrier's account. For coal purchased f.o.b. destination, Seller
            shall bear all risk of loss and retain title to the coal until the
            coal has been received at the delivery point specified in the
            purchase order.

            1.    Shipping Notice and "As Loaded" Coal Quality Analysis

                  Seller shall utilize Automatic Equipment Identification (AEI)
                  to correctly identify each barge in a computer system during
                  the loading process. The total net weight for each

                                      C-3
<PAGE>

                  barge shall be automatically entered into the computer system
                  from mine govern scales or an estimated weight if enroute or
                  destination weights apply. Data for each barge loaded shall be
                  retained in the computer system and upon completion of
                  loading, a computer generated shipping notice (approved by
                  Purchaser) shall be immediately transmitted by modem to
                  Purchaser.

                  The shipping notice must provide Shipment Number, P. O.
                  Number, Vendor, Dock, Carrier name, Carrier Contract Number,
                  Operating Company, Destination, Load to Maximum Draft, Barge
                  Number, Estimated or Actual Tons, Arrival Date, Arrival Time,
                  Load Start Date, Load Start Time, Load Finish Date, Load
                  Finish Time and Condition of Barge Prior to Loading.

                  A copy of the shipping notice shall also be telefaxed to the
                  destination plant and other locations as outlined in the
                  attached page entitled "Facsimile Numbers for Shipping Notices
                  and As Loaded Coal Quality Analysis."

            2.    Demurrage Liability

                  Seller shall be liable for and shall defend, indemnify, and
                  hold harmless Purchaser from any demurrage charges, excess
                  freight charges, deficiency freight charges, or other similar
                  transportation charges incurred by Purchaser under any
                  applicable transportation agreement as a result of Seller's
                  failure to satisfy loading and/or shipping and/or tonnage
                  requirements stated in the Purchaser Order. Seller shall load
                  barges in accord with any special loading provisions stated in
                  the Purchase Order and shall pay or reimburse Purchaser for
                  any charges incurred by Purchaser as a result of Seller's
                  failure to abide by such special loading provisions.

      D.    Delivery by Ocean Vessel

            Where delivery of coal is by ocean vessel, Purchaser may elect to
            deliver the coal loaded into an acceptable type vessel at a loading
            port of safe berth or may elect to have coal delivered to a
            discharge port to be designated by Purchaser.

            Payments for coal delivered shall be made on the "as received"
            calorific value expressed in Btu/lb less deduction made for quality
            adjustments if applicable. Purchaser will pay 90% to Seller's
            account within 15 days of unloading cargo at port of discharge.
            Purchaser shall pay the balance of ten percent (10%) within 30 days,
            less any cost incurred by Purchaser, i.e. demurrage liability or
            other determined costs identified.

            1.    For coal purchased at origin

                  Seller shall arrange for representative samples of the coal
                  delivered to be taken by an independent laboratory approved by
                  Purchaser and analyzed in accordance with applicable
                  procedures or equivalent of the American Society for Testing
                  and Materials ("ASTM"). Such analysis shall govern for
                  calorific price adjustments, ash adjustments, sulfur
                  adjustments, and for compliance with other specifications for
                  coal quality set forth in the Purchase Order.

                  Each sample shall be divided into three parts and put into
                  airtight containers, properly labeled, and sealed to protect
                  against any change in coal characteristics.

                  Part #1 shall be Seller's sample for purposes of analysis.
                  Part #2 shall be sent to Purchaser's designated laboratory in
                  accordance with Purchaser's instructions. Part #3 shall be
                  retained for ninety (90) days as a referee sample.

                                      C-4
<PAGE>

                  Notification of the results of Seller's analysis shall be
                  provided to Purchaser as soon as practical by facsimile or
                  other rapid communication within three (3) days after
                  completion of loading. Written verification of these results
                  shall follow as soon as possible. Purchaser may have an
                  authorized representative present at the taking of any
                  samples.

                  Purchaser reserves the right to question the accuracy of
                  Seller's analysis within thirty (30) days of receipt of
                  written analysis report. If such accuracy is questioned,
                  Purchaser shall have the right to have the Part #3 sample
                  (referee sample) analyzed by a mutually acceptable commercial
                  testing laboratory in accordance with ASTM or equivalent
                  procedures; and the results of such commercial laboratory's
                  analysis shall be accepted as determinative of the coal
                  quality and characteristics of such coal. The cost of this
                  referee analysis shall be shared equally by the Seller and
                  Purchaser. The results of Seller's analysis shall prevail if
                  the referee analysis differs by less than ASTM tolerances for
                  reproducibility.

                  Seller shall arrange for weights of the coal delivered to be
                  determined by an independent certified marine surveyor
                  acceptable to Purchaser. Notification of the results of such
                  determination of weights shall be communicated to Purchaser by
                  facsimile or other rapid communication within one (1) day of
                  completion of loading. The weights thus determined shall be
                  accepted as the quantity of coal for which payments are made.
                  Purchaser reserves the right to draft any vessel using a
                  certified marine surveyor at the discharge port. Should any
                  discrepancy between the loading point and the discharge port
                  of greater than 2.5% occur, then the average of the two draft
                  weights shall be used for payment. Purchaser shall have the
                  right to have an authorized representative present at any and
                  all times that measurements and calculations are made in the
                  drafting of a vessel.

            2.    For coal purchased at destination

                  Representative samples of coal will be taken by Purchaser from
                  each vessel upon delivery at the destination or other delivery
                  point. Such samples will be analyzed by Purchaser or its
                  designated lab in accordance with current ASTM procedures.
                  Purchaser's analyses of the samples taken at the generating
                  plant or other delivery point shall govern for price
                  adjustments for coal quality and for compliance with
                  specifications for coal quality. Should Purchaser not obtain a
                  sample for analysis of any vessel shipment, then for the
                  purposes of this Agreement the analysis of such shipment shall
                  be deemed to be the average of the analysis of all other
                  shipments received under the Agreement from Seller during the
                  preceding thirty day period.

                  Splits of each composite sample shall be retained for a period
                  of thirty (30) days for use in the event of a dispute
                  regarding the results of analyses. In the event Seller
                  disputes the accuracy of an analysis by giving written notice
                  to Purchaser within thirty (30) days from the date of delivery
                  of the coal being analyzed, that portion of the sample of such
                  coal retained for settlement of disputes shall be sent to a
                  qualified independent laboratory (selected jointly by
                  Purchaser and Seller) which shall conduct an analysis in
                  accordance with ASTM standards. The determination of such
                  independent laboratory shall be binding on both parties. The
                  cost for the analysis by such independent laboratory shall be
                  shared equally by the parties. The results of Purchaser's
                  analysis shall prevail if the referee analysis differs by less
                  than ASTM tolerances for reproducibility.

                  Weights of coal delivered hereunder shall be determined, for
                  all purposes, by the methods and devices employed at the
                  destination plant or other delivery point to which such coal

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

                  is delivered. Should Purchaser be prevented from obtaining the
                  unloaded weight of any vessel of coal under the Agreement,
                  then the weights for such vessel shall be the "as loaded"
                  weight.

      E.    Delivery by Truck

            1.    Where delivery of coal is by truck, dump trucks and dump
                  trailers shall be used to transport the coal to the
                  destination specified in the Purchase Order. Such dump trucks
                  and dump trailers shall not have cross beams installed in the
                  cargo area that could damage the sampling auger. All trucks
                  and trailers operated on Purchaser's properties shall comply
                  with all applicable federal and state safety standards. If
                  required by Purchaser, each vehicle shall be furnished an
                  identification number, which must be affixed to the vehicle,
                  to gain admittance to the designated destination. Seller shall
                  employ or utilize only competent commercially licensed truck
                  drivers and shall be responsible for compliance by such
                  drivers with Purchaser's rules and requirements, including
                  speed limits and weight limits on roads within Purchaser's
                  properties. Such drivers shall comply with the requirements
                  for loading, transporting, weighing, sampling, and unloading
                  of coal delivered hereunder, in the manner and at locations on
                  Purchaser's properties as given by the manager of the
                  designated destination or his representative, and such drivers
                  will cooperate with Purchaser's coal-receiving employees and
                  other suppliers in a manner so as not to interfere with any of
                  Purchaser's operations. Coal may be delivered to the
                  designated destination according to the then-current operating
                  schedule for coal receipts in effect at the destination. It
                  shall be Seller's responsibility to determine the schedule in
                  effect and comply therewith in all respects.

            2.    The operation of vehicles that are excessively heavy in weight
                  has an adverse effect on roads within Purchaser's properties.
                  Coal shall be delivered on Purchaser's properties (state of
                  Alabama only) in dump trucks or dump trailers having gross
                  vehicle weights including cargo not exceeding 44,000 pounds
                  for two axles; 66,000 pounds for three axles; 82,500 pounds
                  for four axles; 88,000 pounds for five axles; and 92,400
                  pounds for six axles. Purchaser may reject any truck shipment
                  exceeding the applicable gross vehicle weight.

            3.    Seller shall bear all risk of loss and retain title to the
                  coal to be delivered hereunder until the coal is unloaded and
                  received by Purchaser at the destination specified in the
                  Purchase Order. Purchaser may direct delivery of coal to a
                  destination other than that specified therein; provided,
                  however, that any additional cost incurred by Seller as a
                  result of such direction shall be paid by Purchaser.

            4.    Seller shall provide properly completed shipping notices with
                  each truck delivery on forms furnished by Purchaser. Purchaser
                  shall return a copy of the shipping notice and issue a weight
                  ticket to the driver of the truck.

9.    WEIGHING, SAMPLING AND ANALYSIS

      Purchaser or its designated representative may observe any loading where
      the governing weighing, sampling, or sample preparation is performed by
      Seller. Purchaser's representative shall have the right to delay or stop
      coal loading in the event that Seller's weighing or sampling system
      malfunctions. Seller shall pay all costs or expenses incurred by Purchaser
      as a result of any weighing or sampling system malfunction. Loading will
      be resumed when weighing or sampling system repairs are completed or when
      mutually agreed by Purchaser and Seller.

                                      C-6
<PAGE>

      Purchaser agrees to work in a reasonable and expeditious manner to
      facilitate resumption of loading.

9-A.  WEIGHING

      Unless otherwise specified in the Purchase Order, weights of coal
      purchased and delivered hereunder shall be determined by a certified scale
      system located at the delivery point specified in the Purchase Order or
      other destination to which such coal is delivered and shall be final and
      not subject to dispute. In the event Purchaser's weighing system is
      unavailable, the net weight for any shipment of coal shall be determined
      by certified scales located at the point of origin, by certified scales
      located en route, or by other methods mutually agreed to by all parties.
      Any scale designated for payment purposes shall be maintained and operated
      in accordance with procedures acceptable to Purchaser. Seller shall bear
      the expense of weighing and all associated costs of testing and
      certification for systems located at the point of origin. Purchaser shall
      have the right to inspect and verify the weighing systems, procedures and
      testing of any weighing system not owned or maintained by Purchaser. In
      the event the weight of any shipment is unavailable from the designated
      weighing system, the weight of such shipment shall be determined by mutual
      agreement. No subsequent shipments shall be made, without Purchaser's
      consent, when the designated weighing system is unavailable.

9-B.  SAMPLING AND SAMPLE PREPARATION

      a.    Unless Purchaser and Seller otherwise agree, each shipment of coal
            supplied under the Agreement shall be sampled by Seller and analyzed
            by Purchaser's designated laboratory. Seller shall bear all costs
            related to obtaining acceptable samples of shipments at each loading
            facility applicable to the Agreement. Purchaser shall have the
            option, at any time during the term of the Agreement, to elect to
            sample, for governing purposes, at the destination plant or other
            points specified by Purchaser.

      b.    At each loading facility applicable to the Agreement, Seller shall
            provide a mechanical sampling system which shall be used to collect
            a representative sample of each shipment of coal under the Agreement
            at such loading facility. The following provisions shall apply to
            such sampling system:

            1.    The design and operation of such sampling system and the
                  procedures used for sample preparation shall, at a minimum,
                  meet the requirements of ASTM D-2234 "Standard Practice for
                  Collection of a Gross Sample of Coal" and ASTM D-2013
                  "Standard Method of Preparing Coal Samples for Analysis." Such
                  sampling system shall be enclosed to minimize moisture loss
                  and shall be designed for one stage of sample crushing to the
                  No. 4 sieve size (as determined by Purchaser based on ASTM
                  D-4749 "Standard Test Method for Performing the Sieve Analysis
                  of Coal and Designating Coal Size"). The sample flow rates
                  through such sampling system shall be sufficient to minimize
                  moisture loss. Purchaser and Seller shall use their best
                  efforts to agree on modification of procedures and equipment
                  to meet future revisions of ASTM D-2234 and ASTM D-2013.

            2.    All sample increments collected at all stages of sampling in
                  such sampling system shall cut the full stream of coal
                  presented. The values of current measurements of sampling
                  system cutter openings, cutter velocities, and sample flow
                  rates shall be made available to Purchaser upon request and
                  shall be acceptable to Purchaser.

            3.    Seller shall monitor the sampling ratio of such sampling
                  system in a manner that is acceptable to Purchaser and shall
                  make sampling ratio data available to Purchaser upon request.

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

            4.    Using bias test procedures approved by Purchaser, Seller shall
                  cause such sampling system to be tested periodically, at
                  Seller's expense, for bias against stopped-belt reference
                  samples. Such testing shall be scheduled such that when each
                  shipment of coal is sampled, the most recent bias test results
                  are dated by no more than two previous years. Seller shall
                  give Purchaser written notice of each bias test; and Purchaser
                  or its representative shall have the right to be present
                  during such test and to observe and inspect sample collection,
                  sample preparation, and laboratory analysis of bias test
                  samples. If a bias is detected by such test, Seller shall
                  immediately take all reasonable measures to remove the source
                  of such bias; and Purchaser shall have the right to suspend
                  shipments of coal under the Agreement until the source of such
                  bias is removed and such sampling system is re-tested for
                  bias.

            5.    Prior to the installation of any new sampling system or a
                  modification of an existing sampling system, Seller shall
                  submit design drawings, specifications, and sample extraction
                  parameters for the new or modified sampling system to
                  Purchaser for its approval, which shall not be unreasonably
                  withheld.

      c.    Using an enclosed riffle and following the procedures of ASTM D-2013
            with respect to each shipment of coal under the Agreement, Seller
            shall divide the final sample of No. 4 sieve size into at least four
            laboratory sample splits, with each split weighing 4,000 grams.
            Seller shall within 24 hours send one laboratory sample to
            Purchaser's designated laboratory and shall promptly analyze one
            laboratory sample to provide the "as loaded" coal quality analysis
            as required by the Agreement. Seller shall retain the remaining two
            laboratory samples for thirty days from the date of the shipment as
            reserve samples.

      d.    Purchaser or its representative may observe any sampling or sample
            preparation performed by Seller, and Seller or its representative
            may observe any sampling or sample preparation performed by
            Purchaser's designated laboratory. In the event that Seller's
            sampling system ceases to operate properly, then Seller shall
            immediately notify Purchaser or its representative to determine the
            course of action to be taken concerning shipments of coal under the
            Agreement. If such sampling system malfunctions during the loading
            of any shipment of coal under the Agreement, Purchaser may, at its
            option, use a weighted average analysis of the last two shipments
            loaded prior to such malfunction to determine the analysis of the
            shipment being loaded at the time of such malfunction. Purchaser's
            representative shall have the right to direct Seller to delay or
            stop the loading of any one or more shipments of coal under the
            Agreement if such sampling system ceases to operate in accordance
            with the requirements of the Agreement. After any such direction is
            given, the following provisions shall apply:

            1.    Seller shall immediately delay or stop, as the case may be,
                  the loading of such shipment(s); and Seller shall pay all
                  resulting costs or expenses charged to or incurred by
                  Purchaser as a result of such delay or stoppage in the loading
                  of such shipment(s).

            2.    Seller shall repair such sampling system as soon as practical
                  and shipments of coal under the Agreement shall not resume
                  until such repair is completed.

9-C.  ANALYSIS

      a.    Purchaser shall analyze the laboratory samples sent to Purchaser's
            designated laboratory in accordance with current ASTM standards, and
            the results of such analyses shall be used for the governing
            purposes of the Agreement. If Purchaser elects to employ an
            independent coal-testing laboratory, Seller shall not be liable for
            any costs incurred by Purchaser except as otherwise provided in the
            Agreement.

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

      b.    Should Seller dispute the accuracy of Purchaser's analysis of a
            given shipment, Seller shall notify Purchaser in writing within
            thirty (30) days following unloading of the shipment.

      c.    If a dispute arises between Purchaser and Seller over the results of
            such analyses, one of the reserve samples shall be sent to a
            qualified independent laboratory (selected jointly by Purchaser and
            Seller) which shall conduct a referee analysis of such reserve
            sample in accordance with current ASTM standards. The cost of any
            such analysis shall be borne equally by Purchaser and Seller. With
            respect to a dispute pertaining to a calorific value analysis,
            Purchaser's analysis shall be deemed to have been confirmed, and no
            further adjustment in billing calculations shall be made, if the dry
            basis calorific value analysis by such independent laboratory
            differs from Purchaser's analysis by 100 Btu/lb. With respect
            to disputes involving other items of analysis, Purchaser's
            analysis shall be deemed to have been confirmed if the analysis by
            such independent laboratory differs from Purchaser's analysis by no
            more than the applicable tolerances as follows:

<TABLE>
<CAPTION>
Item of Analysis                      Tolerance
----------------                      ---------
<S>                             <C>          <C>
Moisture                        [_ _ _ _]    Moisture
Ash                             [_ _ _ _]    Dry Ash
Volatile Matter                 [_ _ _ _]    Dry Volatile Matter
Sulfur < 2.0%                   [_ _ _ _]    Dry Sulfur
Sulfur >= 2.0%                  [_ _ _ _]    Dry Sulfur
AFT (H=W Reducing)              [_ _ _ _]
Grindability                    [_ _ _ _]
</TABLE>

10.   PRICE, BILLING AND PAYMENT

      The price per ton stated in the Purchase Order is fixed and is not subject
      to adjustment except as provided herein or except as otherwise provided in
      the Purchase Order. The price per ton paid by Purchaser for coal delivered
      under the Agreement includes all sums to be borne by Seller for all
      federal, state, and local taxes of every nature (but not including sales
      and use taxes to be paid by Purchaser) which are assessed or may be
      assessed as a result of the production, shipment, or sale of coal pursuant
      to the Agreement. Seller's acceptance of the amounts paid by Purchaser for
      coal delivered under the Agreement shall constitute full and final
      settlement of any and all claims by Seller for costs or expenses
      (including, without limitation, taxes, fees, governmental impositions,
      assessments, premiums, and penalties) incurred or paid by Seller, either
      while the Agreement is in effect or at any time in the future, with
      respect to the production, shipment, or sale of coal pursuant to the
      Agreement. Seller agrees to defend, indemnify, and hold Purchaser harmless
      from and against any claim or liability for any such taxes, fees,
      governmental impositions, assessments, premiums, or penalties.

      Seller shall report to Purchaser all shipments of coal at the delivery
      point specified in the Purchase Order. Initially, Purchaser shall pay,
      normally within thirty days after shipment, at [_ _ _ _] of the price per
      ton stated in the Purchase Order if Purchaser has received the coal, the
      required shipping documentation, and the samples, if required, of coal
      collected by Seller. Seller shall not submit invoices for payment.
      Purchaser shall pay any balance due, based upon the determination of
      quality adjustments, as soon as practical after such determinations are
      made for coal shipped during each month. In the event the total amount
      payable resulting from these determinations is less than the amount
      previously paid by Purchaser, the overpayment shall be deducted from
      subsequent payments to Seller; or if no subsequent payments become due,
      Seller shall reimburse Purchaser promptly upon receipt of such
      overpayment. Purchaser shall have the

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

      right to deduct or set-off against payments due Seller hereunder any sum
      of money due to Purchaser from Seller, whether or not such sums are
      related to the Agreement.

11.   PRICE ADJUSTMENTS FOR QUALITY

      A.    Calorific Value Adjustment

            Bituminous Coal

            The Calorific Value Adjusted Price for coal received from Seller and
            accepted by Purchaser for each shipment shall be calculated as
            follows: The [_ _ _ _] shall be divided by the [_ _ _ _] specified
            in the Purchase Order. If the resulting quotient is equal to or
            greater than [_ _ _ _], the quotient shall be multiplied by
            [_ _ _ _] per ton stated in the Purchase Order. If the resulting
            quotient is less [_ _ _ _] price and transportation charge paid by
            Purchaser. The resulting product, less the price per ton stated in
            the Purchase Order, shall constitute the Calorific Value Adjustment
            ("CVA").

            EXAMPLE: [_ _ _ _] f.o.b. mine @ [_ _ _ _] Btu/lb. and [_ _ _ _] for
            freight

<TABLE>
<S>                                          <C>
Shipment A = [_ _ _ _].                      Shipment B = [_ _ _ _] Btu/lb.

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

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

therefore:                                   therefore:

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

            Sub-Bituminous Coal

            The Calorific Value Adjusted Price for coal received from Seller and
            accepted by Purchaser for each shipment shall be calculated as
            follows: The [_ _ _ _] shall be divided by the [_ _ _ _] specified
            in the Purchase Order. The resulting quotient shall be multiplied by
            [_ _ _ _] to arrive at Calorific Value Adjusted Price. The amount to
            be paid by Purchaser for coal purchased hereunder shall be the
            Calorific Value Adjusted Price less any other price adjustments
            provided for in the Agreement.

      B.    Excess Moisture Adjustment

            The price per ton paid by Purchaser for coal delivered under the
            Agreement shall be [_ _ _ _] to the moisture content in excess of
            the moisture specification stated in the Purchase Order. This
            adjustment shall be subtracted from the payment for coal delivered
            and unloaded and shall be based upon the "as received" moisture
            content for each shipment or portion thereof. The amount per ton for
            this Excess Moisture Adjustment shall be calculated as follows:

            Bituminous Coal

            The adjustment shall be [_ _ _ _] ton for each [_ _ _ _] or portion
            thereof, by which the "as received" moisture content for each coal
            delivery, which exceeds the moisture specification,

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

            stated in the Purchase Order. No credits shall be given if the "as
            received" moisture content is less than the moisture specification
            stated in the Purchase Order.

            EXAMPLE: "As received" moisture content of the shipment is [_ _ _ _]
            and the moisture specification stated in the Purchase Order is Max.
            [_ _ _ _].

            Excess moisture adjustment: [_ _ _ _] per ton reduction

            Sub-Bituminous Coal

            The adjustment shall be [_ _ _ _] or portion thereof by which the
            "as received" moisture content for each coal delivery, which exceeds
            the moisture specification stated in the Purchase Order. No credits
            shall be given if the "as received" moisture content is less than
            the moisture specification stated in the Purchase Order.

            EXAMPLE: "As received" moisture content of the shipment is [_ _ _ _]
            and the moisture specification stated in the Purchase Order is
            [_ _ _ _].

            Excess moisture adjustment: [_ _ _ _] per ton reduction

      C.    Excess Ash Adjustment

            The price per ton paid by Purchaser for coal delivered under the
            Agreement shall be [_ _ _ _] to the ash content in excess of the ash
            specification stated in the Purchase Order. This adjustment shall be
            subtracted from the payment for coal delivered and unloaded and
            shall be based upon the "as received" ash content for each shipment
            or portion thereof delivered and unloaded. The amount of this
            adjustment shall be calculated as follows: The adjustment shall be
            [_ _ _ _] percent or portion thereof per ton over the ash
            specification in the Purchase Order. No credits shall be given if
            the "as received" ash content is less than the ash specification
            stated in the Purchase Order.

            EXAMPLE: "As received" ash content of the shipment is [_ _ _ _] and
            the ash specification stated in the Purchase Order is Max.
            [_ _ _ _].

            Excess ash adjustment: [_ _ _ _] per ton reduction

      D.    Excess Sulfur Adjustment

            The Purchase Order shall specify a maximum sulfur content for each
            shipment. In the event that the monthly average sulfur content for
            all shipments in any calendar month exceeds the specified maximum
            sulfur content, a downward price adjustment [_ _ _ _] or portion
            thereof, above such specification shall apply.

<TABLE>
<CAPTION>
              GUARANTEE       MONTHLY
               MONTHLY       AVERAGE AS
                SULFUR        RECEIVED
EXAMPLE     SPECIFICATION     % SULFUR                ADJUSTMENT CALCULATION
-------     -------------    ----------               ----------------------
<S>         <C>              <C>            <C>
   A            [_ _ _ _]      [_ _ _ _]    [_ _ _ _] per ton reduction

   B            [_ _ _ _]      [_ _ _ _]    [_ _ _ _] per ton reduction
</TABLE>

            Plants Daniel, Miller and Scherer are New Source Performance
            Standards plants that mandate a [_ _ _ _] pounds sulfur per million
            Btu's. Purchaser shall reject any shipment to these plants, which
            exceeds [_ _ _ _] sulfur/million Btu's. Seller shall be

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

            liable for all costs incurred as a result of exceeding the [_ _ _ _]
            pounds sulfur per million Btu's maximum.

            For shipments intended for Plants Daniel, Miller and Scherer,
            Purchaser may deduct [_ _ _ _] from the f.o.b. mine price in
            liquidation of administration costs for shipments exceeding
            [_ _ _ _] pounds of sulfur per million Btu; provided, however,
            Seller shall remain responsible for incidental damages arising out
            of Purchaser's acceptance of shipments exceeding [_ _ _ _] pounds of
            sulfur per million Btu. Such amount is a reasonable pre-loss
            estimate of Purchaser's damages, which are difficult to measure; and
            this provision is not intended as a penalty. Such adjustments in the
            price of coal shall be made if such shipments are accepted by
            Purchaser, provided, however, Purchaser shall be under no obligation
            to accept such shipments.

            In addition, some plants in the system, including but not limited
            to, Plants Arkwright and Mitchell, shall require a minimum sulfur
            specification, which shall be stated in the Purchase Order. Analysis
            performed on any size sample lot which indicates an "as received"
            sulfur content less than the minimum sulfur specification stated in
            the Purchase Order shall result in a downward price adjustment of
            [_ _ _ _] sulfur, or portion thereof, below such specification.

      E.    Ash Fusion Temperature Adjustment

            Bituminous Coal

            Analysis performed on any size sample which indicates an ash fusion
            temperature (H=W) within [_ _ _ _] degrees of the ash fusion
            specification stated in the Purchase Order shall not result in any
            price adjustment for ash fusion temperature. Analysis of any
            shipment or portion of a shipment which falls more than [_ _ _ _]
            degrees below the ash fusion temperature specification stated in the
            Purchase Order shall result in a downward price adjustment based on
            a ratio [_ _ _ _] degree below such specification.

            EXAMPLE A: Ash fusion temperature is within [_ _ _ _] degree
            deadband.

<TABLE>
<S>                                         <C>
Ash fusion temperature specification:       [_ _ _ _] degrees
Ash fusion temperature of shipment:         [_ _ _ _] degrees
Ash fusion temperature adjustment:          [_ _ _ _]
</TABLE>

            EXAMPLE B: Ash fusion temperature is outside [_ _ _ _]-degree
            deadband.

<TABLE>
<S>                                         <C>
Ash fusion temperature specification:       [_ _ _ _] degrees
Ash fusion temperature of shipment:         [_ _ _ _] degrees
Ash fusion temperature adjustment:          [_ _ _ _] per ton reduction
</TABLE>

            Sub-Bituminous Coal

            Analysis performed on any size sample which indicates an ash fusion
            temperature (H=W) within [_ _ _ _] degrees of the ash fusion
            temperature specification stated in the Purchase Order shall not
            result in any price adjustment for ash fusion temperature. Analysis
            of any shipment or portion of a shipment which falls more than
            [_ _ _ _] degrees below the ash fusion temperature specification
            stated in the Purchase Order shall result in a downward price
            adjustment based on a ratio of [_ _ _ _] per degree below such
            specification.

            EXAMPLE A: Ash fusion temperature is within [_ _ _ _] -degree
            deadband.

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

<TABLE>
<S>                                         <C>
Ash fusion temperature specification:       [_ _ _ _] degrees
Ash fusion temperature of shipment:         [_ _ _ _] degrees
Ash fusion temperature adjustment:          [_ _ _ _]
</TABLE>

            EXAMPLE B: Ash fusion temperature is outside [_ _ _ _] degree
            deadband.

<TABLE>
<S>                                         <C>
Ash fusion temperature specification:       [_ _ _ _] degrees
Ash fusion temperature of shipment:         [_ _ _ _] degrees
Ash fusion temperature adjustment:          [_ _ _ _] per ton reduction
</TABLE>

      F.    Adjustments in General

            The adjustments provided in this Section 11 are in addition to
            Purchaser's other rights and remedies provided in Section 12, by
            other provisions of the Agreement, or by law or equity. Any
            adjustment pursuant to this Section 11 with respect to any shipment
            of coal under the Agreement shall not waive such other rights and
            remedies with respect to that shipment or any future shipment of
            coal under the Agreement.

12.   REJECTION, SUSPENSION, CANCELLATION

      A.    Rejection

            Purchaser shall have the right to refuse and reject: (1) any
            shipment that contains excessive amounts of extraneous material; (2)
            any shipment containing coal that was mined or produced from a seam
            or source other than the Coal Property without securing Purchaser's
            prior written approval; (3) any shipment that does not conform to
            the size specifications stated herein; (4) any shipment that is
            delivered in equipment other than as specified herein; (5) any
            shipment that does not conform to any of the specifications for coal
            quality stated in the Purchase Order; or (6) any shipment or portion
            thereof that is treated with chemicals, heat, binders, petroleum
            products or other substances, whether or not treated with the intent
            to qualify the coal under the Internal Revenue Code Section 29
            (credit for producing fuel from a non-conventional source).

            If a shipment or portion of a shipment is rejected, Purchaser shall
            receive a credit from Seller for freight costs and any other costs
            borne by Purchaser for such rejected shipment. If, however, for any
            reason Purchaser unloads any such coal shipment, Seller shall pay
            for all extra costs for the unloading and handling.

      B.    Suspension

            In addition to the rejection rights set forth above, Purchaser shall
            have the right to suspend coal shipments immediately by giving
            verbal or written notice to Seller in the event that: (1) any
            shipment contains excessive amounts of extraneous material; (2) any
            shipment contains coal that was mined or produced from a seam or
            source other than the Coal Property without securing Purchaser's
            prior written approval; (3) any shipment does not conform to the
            size specifications stated herein; (4) any shipment or portion
            thereof fails to conform to any of the specifications for coal
            quality stated in the Purchase Order; or (5) any shipment or portion
            thereof is treated with chemicals, heat, binders, petroleum products
            or other substances, whether or not treated with the intent to
            qualify the coal under the Internal Revenue Code Section 29 (credit
            for producing fuel from a non-conventional source). After receipt of
            such notice, Seller shall immediately take action to correct the
            deficiencies stated. After Seller has determined that coal is in
            compliance with the Agreement, Seller shall so notify Purchaser; and
            an inspection and/or a test shipment of coal may be scheduled or
            other determination of compliance provided, at Purchaser's option.
            If compliance is not demonstrated, Purchaser

                                      C-13
<PAGE>

            shall have the option to allow further determination of compliance
            or to cancel the Agreement and seek remedies as provided herein.

      C.    Cancellation

            In addition to the rejection and suspension rights set forth above,
            Purchaser shall have the right to cancel remaining coal to be
            delivered under the Agreement by giving written notice to Seller in
            the event that: (1) any shipment contains excessive amounts of
            extraneous material; (2) any shipment contains coal that was mined
            or produced from a seam or source other than the Coal Property
            without securing Purchaser's prior written approval; (3) any
            shipment does not conform to the specifications for coal quality
            stated in the Purchase Order; (4) any coal shipment does not conform
            to the size specifications stated herein; (5) Seller engages in any
            fraudulent or illegal conduct in connection with its performance
            under the Agreement; or (6) any shipment or portion thereof is
            treated with chemicals, heat, binders, petroleum products or other
            substances, whether or not treated with the intent to qualify the
            coal under the Internal Revenue Code Section 29 (credit for
            producing fuel from a non-conventional source). In the event
            Purchaser cancels the Agreement or suspends deliveries, Seller shall
            pay Purchaser any excess freight charges thereby caused under the
            applicable tariff or transportation contract as a result of reduced
            shipments by Seller to Purchaser during the then current term of the
            applicable tariff or transportation contract. Any such payment shall
            be made without prejudice to such other rights as may be provided to
            either party in other portions of the Agreement and by law or
            equity.

            In addition to the other provisions of the Agreement, if Purchaser
            experiences operational difficulties in the unloading, storage, or
            burning of Seller's coal which, in Purchaser's sole judgment,
            impedes the efficient utilization of Purchaser's facilities, then
            Purchaser shall have the right to cancel remaining coal to be
            delivered under the Agreement by giving written notice to Seller. If
            cancellation of the Agreement occurs as a result of operational
            problems, then Seller will not be held liable for excess freight
            charges as referenced above.

13.   FORCE MAJEURE

      Force majeure as used herein shall mean a cause reasonably beyond the
      control of Seller or Purchaser, as the case may be, which wholly or in
      substantial part prevents the mining, loading, or delivery of coal at or
      from the Coal Property or the transportation to or the unloading, storing,
      or burning of coal by Purchaser at the destination plant or other delivery
      point. Examples (without limitation) of force majeure, but only if
      reasonably beyond the control of Seller or Purchaser, as the case may be,
      are the following: acts of God, acts of the public enemy, insurrections,
      riots, strikes, labor disputes, work stoppages, fires, explosions, floods,
      electric power failures, interruptions to or contingencies of
      transportation, coal frozen to railcar, embargoes, and orders or acts of
      any government (including, without limitation, a city or county ordinance,
      an administrative regulation or ruling, an act of a state legislature, an
      act of the United States Congress, and a final judicial decision, order,
      or decree based upon orders or acts of governmental authorities) or
      military; provided, however, that force majeure, for the purposes of the
      Agreement, shall not include the development or existence of economic
      conditions which may adversely affect the anticipated profitability of the
      mining activities of Seller hereunder, acts of omissions of Seller
      constituting negligence or mismanagement on the part of Seller, geologic
      conditions affecting mining, or reduced productivity of labor.

      If because of force majeure either Purchaser or Seller is unable to carry
      out its obligations under the Agreement, and if such party promptly gives
      the other party written notice of the conditions giving rise to such force
      majeure, the obligations and liabilities of the party giving such notice
      and the corresponding obligations of the other party shall be suspended to
      the extent made

                                      C-14
<PAGE>

      necessary by and during the continuance of such force majeure; provided,
      however, that the party suffering the disabling effects of such force
      majeure shall make reasonable efforts to eliminate, as soon as and to the
      extent possible, the events giving rise to such force majeure, except that
      either party may settle any of its own labor disputes or strikes or
      terminate any of its own lockouts in its sole discretion. Purchaser, in
      its sole discretion, shall determine whether shipments not made because of
      force majeure or suspended because of force majeure shall be canceled
      without liability to either party or shall be made up; but the Agreement
      shall otherwise remain in full force and effect; provided, however, that
      if a condition of force majeure occurs which causes a suspension of
      obligations under the Agreement for a continuous period equal to 30% or
      more of the term of the Agreement, Purchaser may terminate the Agreement
      by giving written notice of termination to Seller.

14.   INDEPENDENT CONTRACTOR

      It is understood and agreed that Seller is an independent contractor and
      not an agent or employee of Purchaser. It is further agreed that Seller
      shall employ, direct, control, manage, supervise, discharge, and pay its
      own employees and that Purchaser shall have no control of or supervision
      over any such employees.

15.   INDEMNIFICATION

      Seller agrees to defend, indemnify, and hold harmless Purchaser, The
      Southern Company, any subsidiary of The Southern Company, and any of their
      agents, employees and representatives from and against any and all
      liability or alleged liability to which any of them may be subject due to
      the destruction or damage to any property or due to the injury to or death
      of any person, which destruction, damage, injury, or death arises out of
      or is related to the performance of the Agreement by Seller, Producer, any
      subcontractor of Seller or Producer, or any of their agents, employees, or
      representatives.

16.   APPLICABLE LAW, CHOICE OF FORUM, AND WAIVER

      All questions relating to the execution, construction, performance,
      non-performance, or breach of the Agreement shall be resolved under the
      substantive laws of the State in which the destination power plant is
      located. Any action, suit, or legal proceeding of any nature by one party
      hereto against the other party shall be brought in the state or federal
      courts located in such State; and the parties hereto shall submit to, and
      accept the exclusive jurisdiction of, such courts for the purpose of any
      such action, suit, or legal proceeding. The remedies provided under the
      Agreement shall be cumulative and in addition to other remedies provided
      by law or equity. Failure of Purchaser or Seller to insist upon strict
      performance of any provision of the Agreement, or to take advantage of any
      right under the Agreement, shall not be construed as a waiver of such
      provision or right.

17.   BREACH BY SELLER

      At the time of Purchaser's final payment under the Agreement or in the
      event of breach by Seller of any of the terms and conditions of the
      Agreement, Purchaser, in addition to any other remedies provided by law or
      equity, has the right immediately to cancel the Agreement, to suspend
      Purchaser's performance, and to offset any and all sums owed by Seller to
      Purchaser or any liquidated or unliquidated damages occasioned by the
      breach and cancellation against any sums owed to Seller by Purchaser.

      In the event Seller does not deliver the amount of coal required under the
      Agreement, at Purchaser's option, Seller shall be liable to Purchaser for
      the difference in Seller's delivered cost and the delivered cost of
      replacement tons (including, without limitation, the cost of freight and
      sulfur emission allowances). Purchaser, in its sole judgment, shall
      determine the delivered replacement cost and apply this cost differential
      to the number of tons Seller fails to deliver under

                                      C-15
<PAGE>
                                       * CONFIDENTIAL MATERIAL HAS BEEN
                                         OMITTED AND FILED SEPARATELY WITH
                                         THE SECURITIES AND EXCHANGE
                                         COMMISSION. BRACKETS AND UNDERSCORES
                                         DENOTE SUCH OMISSIONS.

      the Agreement. Purchaser shall have the right to offset any and all sums
      owed to Purchaser as a result of tonnage shortfall against any sums owed
      to Seller by Purchaser.

      Unless Purchaser gives prior approval by a written Change Order, shipments
      from an origin point other than that specified in the Purchase Order shall
      constitute a breach of the Agreement, for which Purchaser may deduct from
      the f.o.b. mine price for each ton of coal in such shipments the
      following:

      a.    Any excess freight charges over those that Purchaser would have paid
            if Seller had shipped from the origin point specified in the
            Purchase Order; and

      b.    Any excess freight and handling charges over those that Purchaser
            would have paid if Seller had shipped to designated plant(s) stated
            in the Purchase Order; and

      c.    [_ _ _ _] of the f.o.b. mine price in liquidation of
            administration and other incidental damages due to such shipments.

      If Seller makes shipments that are materially in excess of the tonnage
      stated in the Purchase Order without Purchaser's prior approval, Purchaser
      may deduct from the f.o.b. mine price, for each ton of coal in excess of
      the tonnage stated in the Purchase Order, [_ _ _ _] of the f.o.b.
      mine price in liquidation of administration and other incidental damages
      due to such shipments.

      The amounts to be paid by Seller or to be deducted from payments are
      reasonable pre-loss estimates of Purchaser's damages, which are difficult
      to measure; and these provisions are not intended as penalties.

18.   SPECIAL TERMS AND CONDITIONS

      Any special terms and conditions stated in the Purchase Order shall take
      precedence when in conflict with other provisions included herein.

19.   COMPLIANCE WITH LAWS

      A. Purchaser is a government contractor under an Area-Wide Utilities
      Service Contract with the General Services Administration of the United
      States Government. Seller agrees that each of the clauses contained in the
      Federal Acquisition Regulation referred to below shall, as if set forth
      herein in full text, be incorporated into and form a part of this Contract
      and Seller shall comply therewith, if the amount of the Contract and the
      circumstances surrounding its performance require Purchaser to include
      such clause in contracts between Purchaser and others: (1) 52.203-6
      Restrictions on Subcontractor Sales to the Government; (2) 52.203-7
      Anti-Kickback Procedures; (3) 52.219-8 Utilization of Small, Small
      Disadvantaged and Women-Owned Small Business Concerns; (4) 52.219-9 Small,
      Small Disadvantaged and Women-Owned Small Business Subcontracting; (5)
      52.222-26 Equal Opportunity; (6) 52.223-2 Clean Air and Water; and (7)
      52-223-14 Toxic Chemical Release Reporting. Upon request, Purchaser will
      provide the full text of any of the above clauses incorporated herein by
      reference.

      B. Seller hereby warrants that Seller is not debarred, suspended or
      proposed for debarment as a contractor or subcontractor to any department,
      agency or other division of the U. S. Government.

20.   ASSIGNMENT

      The obligations to be performed by Seller under the Agreement may not be
      assigned without prior written consent of Purchaser, which consent shall
      not be unreasonably withheld. Failure to obtain Purchaser's written
      consent prior to assignment shall result in immediate cancellation of

                                      C-16
<PAGE>

      the Agreement. Assignment of payments only are permitted; provided,
      however, that Seller shall give Purchaser written notice of such
      assignment and provided further that an additional 45-day delay in
      payment, from the next normally scheduled payment date, shall be required
      for verification and subsequent processing.

21.   AGENCY

      Purchaser hereby designates Southern Company Services, Inc. as Purchaser's
      agent for receiving copies of notices required or permitted by the
      Agreement and for administration of the Agreement.

                                      C-17
<PAGE>

                              FACSIMILE NUMBERS FOR
             SHIPPING NOTICES AND "AS LOADED" COAL QUALITY ANALYSIS

<TABLE>
<CAPTION>
               PLANT                                         SCS                            OPERATING COMPANY
      Attention: Plant Manager                   Attention: Production Support           Attention: Fuel Services
---------------------------------------          -----------------------------           ------------------------
<S>                                              <C>                                     <C>
ALABAMA POWER

Barry                     (334) 829-2029
Gaston                    (205) 669-8084
Gadsden                   (205) 257-1645
Gorgas                    (205) 257-1165                  (205) 257-7288                       not applicable
Greene County             (334) 289-6105
Miller                    (205) 257-3238

GEORGIA POWER
Arkwright                 (912) 757-7200
Bowen                     (770) 387-9800
Branch                    (706) 485-2391
Hammond                   (706) 290-6255                                                       Fuel Services
McDonough                 (404) 792-5354                  (205) 257-7288                       (404) 506-6948
Mitchell                  (912) 438-3129
Scherer                   (912) 784-5079
Wansley                   (770) 854-8570
Yates                     (770) 252-0568

GULF POWER
Crist                     (904) 420-2349                                                    Fuel & Environmental
Scholz                    (904) 444-6826                  (205) 257-0410                       (904) 444-6217
Smith                     (904) 420-2470

MISSISSIPPI POWER
Daniel, X5301             (228) 474-3029                  (205) 257-7288                       Manager, Fuels.
Watson, X5231             (228) 897-6302                  (205) 257-0410                       (228) 865-5286
                                                          (205) 257-7288

SAVANNAH ELECTRIC & POWER
Kraft                     (912) 966-3657                  (205) 257-7288                        Fuel Services
McIntosh                  (912) 754-2793                                                       (404) 506-6948
</TABLE>

                                      C-18
<PAGE>
                             RAILCAR WEIGHT MATRIX

Weight limitations on railcars must meet two criteria; design limitations and
track standards. Railcars should be loaded to full visible capacity, if
possible, but must not exceed the lesser of the two criteria below:

1.    - All private aluminum railcars are designed to withstand a maximum of
      286,000 pounds gross weight on rail (GWR).

      - All private steel railcars are designed to withstand a maximum of
      272,000 pounds GWR.

      - Railroad owned railcars must be loaded in accordance with stenciled
      weights on railcars unless otherwise specified by Rail Carrier.

2.    In addition to the general constraints of Item 1, all railcars shall be
      loaded to full visible capacity but within each rail carrier's load limits
      for maximum GWR. The maximum GWR for the originating rail carrier for each
      of the generating plants in the Southern electric system is specified
      below.

ALABAMA POWER COMPANY

<TABLE>
<CAPTION>
                             Burlington Northern                            Norfolk Southern
 Generating Plant              Santa Fe (BNSF)             CSXT                   (NS)
 ----------------              ---------------             ----                   ----
<S>                            <C>                        <C>                <C>
Gaston                               N/A                  286,000               286,000
Miller                             286,000                286,000                 N/A
</TABLE>

GEORGIA POWER COMPANY

<TABLE>
<CAPTION>
                               Norfolk Southern    Union Pacific    Illinois Central
Generating Plant      CSXT           (NS)               (UP)              (IC)
----------------      ----           ----               ----              ----
<S>                  <C>         <C>                 <C>             <C>
Arkwright              N/A         286,000              N/A               N/A
Bowen                286,000         N/A                N/A               N/A
Branch               286,000       286,000              N/A               N/A
Hammond                N/A         286,000              N/A               N/A
McDonough            286,000       286,000              N/A               N/A
Mitchell             286,000         N/A                N/A               N/A
Scherer                N/A         286,000            286,000             N/A
Wansley              286,000       286,000              N/A             286,000
Yates                  N/A         286,000              N/A               N/A
</TABLE>

                                      C-19
<PAGE>

GULF POWER COMPANY

<TABLE>
<CAPTION>
Generating Plant               CSXT
----------------               ----
<S>                          <C>
Scholz                       286,000
</TABLE>

MISSISSIPPI POWER COMPANY

<TABLE>
<CAPTION>
                                                    Canadian National
                   Burlington Northern               Illinois Central   Union Pacific
Generating Plant     Santa Fe (BNSF)      CSXT             (IC)             (UP)
----------------     ---------------      ----             ----             ----
<S>                <C>                   <C>          <C>                 <C>
Daniel                   286,000          286,000       286,000           286,000
</TABLE>

SAVANNAH ELECTRIC AND POWER COMPANY

<TABLE>
<CAPTION>
                                  Norfolk Southern
Generating Plant        CSXT           (NS)
----------------        ----           ----
<S>                    <C>        <C>
Kraft                    N/A          286,000
McIntosh               286,000        286,000
</TABLE>

                                      C-20

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"}]]