Georgia Natural Gas Company
817 West Peachtree St. NW
Atlanta, Georgia 30308

CONFIDENTIAL

February 12, 2016

Via fax:
(704) 731-4097

Via overnight delivery:
Piedmont Energy Company
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
Attn: Karl W. Newlin, Senior Vice President and Chief Financial Officer

Re: Letter Agreement

Dear Karl:

This letter sets forth our mutual agreement to the matters set forth in the
attached Term Sheet. By this letter we both confirm that we have agreed to the
matters set forth in the Term Sheet as described therein and agree to be bound
thereby. Please acknowledge your agreement by countersigning where indicated
below.

Sincerely yours,

GEORGIA NATURAL GAS COMPANY

By: /s/ Andrew W. Evans
Andrew W. Evans
President and COO

Acknowledged and Agreed:

PIEDMONT ENERGY COMPANY

By: /s/ Karl W. Newlin
Name: Karl W. Newlin
Title: Senior Vice President

Term Sheet Between
Georgia Natural Gas Company
And
Piedmont Energy Company
Regarding GNGC’s Proposed Purchase of Piedmont’s Interest in
SouthStar Energy Services LLC

                         
                                                                                                                             
           
 
  1.     Parties  
Georgia Natural Gas Company, a Georgia corporation (“GNGC”) and Piedmont Energy
Company, a North Carolina corporation (“Piedmont”).
           
 
  2.     Reason for Agreement  
Pursuant to that Second Amended and Restated Limited Liability Company Agreement
of SouthStar Energy Services LLC (“SouthStar”) dated as of September 1, 2013
(the “LLC Agreement”), GNGC has elected under Section 12.5(a)(2) to purchase
from Piedmont its 15%
interest in SouthStar (the “Transaction”).
In accordance with Section 12.5(c) of the LLC Agreement, Closing of the
Transaction is expressly subject to consummation of Piedmont’s Change in
Control.
Capitalized terms used herein but not otherwise defined herein shall have the
meaning(s) ascribed to them in the LLC Agreement.
           
 
  3.     Valuation  
GNGC will pay Piedmont $160 million dollars in cash as the Market Value for
Piedmont’s Company Interest at the closing of the Transaction (the “Closing”).
The Parties acknowledge that they have resolved their initial disagreement
regarding the Market Value of Piedmont’s Company Interest to be transferred
pursuant to the Transaction, and that it will not be necessary for either Party
to initiate the Dispute
Resolution Procedures provided in Article XVI of the LLC Agreement with respect
to the Transaction.
           
 
  4.     Distribution of
Company Income  
Concurrently with receiving $160 million dollars in cash for its Company
Interest at Closing, SouthStar will distribute to Piedmont its share of unpaid
and/or accrued Company Income and any other amounts due and owing to Piedmont
through the date of
Closing as indicated in the financial statements prepared by SouthStar in
connection with the Closing (see line item 6 below). No other amounts shall be
paid or distributed to Piedmont at Closing.
           
 
  5.     LLC Agreement
Otherwise In Effect  
Except as directly addressed by this Term Sheet and any subsequent agreement
memorializing its terms, the LLC Agreement shall continue to govern the
relationship of the Parties in SouthStar, including, without limitation,
Section 9.4 “Capital Accounts,
Allocations, and Distributions Attributable to Transferred Interest”,
Section 12.5 (c) “Changes in Control”, and Section 12.7 “Transition Costs.”
           
 
  6.     Financial
Statements
Pertaining to the
Transaction  
SouthStar shall prepare and deliver to Piedmont and GNGC unaudited preliminary
financial Statements for the period from January 1, 2016 through the most recent
calendar month end preceding the Closing to assist with the proper
implementation of the
relevant portions of the LLC Agreement (and as described in this Term Sheet) to
the Transaction, including the Distribution of Company Income described above.
The Parties agree that SouthStar shall cause the final 2016 stub period (January
1 through the Closing date) financial statements to be audited as soon as
reasonably practicable after Closing and to reconcile, and if necessary “true
up,” the distribution
of Company Income to Piedmont.
           
 
  7.     Non-Solicitation of
Employees  
Piedmont agrees, and at Closing will cause its parent company to agree that
neither they nor any of their affiliates will solicit for employment any of
those individuals employed by SouthStar as listed on Exhibit A to this Term
Sheet (the “Covered SSE
Employees”) for a period of thirty (30) months following Closing date, provided
that, this shall not prevent Piedmont or its affiliates from (i) employing any
SouthStar employee whose employment was terminated by SouthStar prior to
commencement of
employment discussions between Piedmont and such employee, and (ii) placing any
public advertisements or conducting any other form of general solicitation for
employment that is not targeted at any of the Covered SSE Employees.
           
 
  8.     Release of Piedmont
Option Under
Section 7.4 of the
LLC Agreement  
At Closing, Piedmont shall irrevocably and completely release and abandon its
option to Purchase C&I Customer retail business as defined in Section 7.4 of the
LLC Agreement and Piedmont shall not exercise its option under Section 7.4 prior
to Closing.

           
 
  9.     Non-Compete  
At Closing, Piedmont will agree and will cause its parent company to agree that
neither they nor any of their affiliates will compete with SouthStar for Target
Customers in the Retail Territory for a period of thirty (30) months following
the Closing date.
With respect to the Transaction and the Closing, “Target Customer(s)” shall have
the same meaning as that set forth in Article I of the LLC Agreement; and the
definition of “Retail Territory” in Article I of the LLC Agreement shall be
revised to mean (i)
the entire States of Georgia and Illinois, and (ii) in the State of Ohio, such
part(s) of Ohio wherein, as of the Closing date, reside Target Customers of
Vectren Energy, Dominion East Ohio, and Columbia Gas – Ohio.
Notwithstanding the foregoing, and as provided in Section 7.1(b) of the LLC
Agreement, the Transaction and Closing shall not preclude Piedmont or any of its
present or future affiliates from engaging in the purchase, transportation,
supply, sale,
marketing, storage and/or infrastructure development of liquefied natural gas,
compressed natural gas and/or natural gas vehicle facilities and/or filling
stations. Provided further, and notwithstanding Section 7.1(d) of the LLC
Agreement, Piedmont and
its present and future affiliates shall not be precluded from acquiring a Person
or entity that has as an ancillary (but not primary) part of its business
operations engaged in the purchase, transportation and sale of natural gas on a
non-regulated basis
for Target Customers located in the Retail Territory.
           
 
  10.     Communications
Program  
The parties will agree on the language of any press release or other public
communication about this Agreement or the Closing of this Transaction.
The Parties acknowledge that each of their parent companies may file a Current
Report on Form 8-K and/or make other necessary disclosures to the SEC regarding
this Transaction and that such filings and/or disclosures require no prior
approval from the
other Party.
           
 
  11.     Regulatory
Consents/Approvals  
Piedmont agrees to cooperate with GNGC and SouthStar in obtaining all regulatory
approvals or consents necessary to consummate the Transaction, including without
limitation approval by the Georgia Public Service Commission.

           
 
  12.     Agreement;  
As required by the LLC Agreement, the Parties will memorialize the Transaction,
including:
        Governing Law  
(i) any agreed upon matters expressly set forth in this Term Sheet,
(ii) Piedmont providing GNGC at Closing a representation and warranty as to good
and clear title to the interest being transferred, and (iii) a mutual release by
each Party in favor of the
other, substantially in the form of the Conveyance and Assignment Agreement
attached to the LLC Agreement as Exhibit H.
           
 
           
Governing law shall be Delaware.