Document:

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                                                                   Exhibit 10.48
                    AMENDED AND RESTATED OPERATING AGREEMENT
                                       OF
                        GREENBRIER PIPELINE COMPANY, LLC

                          Dated as of September 1, 2001

THE MEMBERSHIP INTERESTS REPRESENTED BY THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND WERE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE. MEMBERSHIP INTERESTS MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED AT ANY TIME EXCEPT (I) IN ACCORDANCE WITH THE RESTRICTIONS CONTAINED
IN THIS AGREEMENT, AS AMENDED FROM TIME TO TIME AND (II) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS UNLESS AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
WITH THE TRANSFER.

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                    AMENDED AND RESTATED OPERATING AGREEMENT
                                       OF
                        GREENBRIER PIPELINE COMPANY, LLC

                                TABLE OF CONTENTS

<TABLE>
<S>    <C>                                                                                                                <C>
1      DEFINITIONS AND CONSTRUCTION........................................................................................1
  1.1            Definitions...............................................................................................1
  1.2            Construction.............................................................................................12
2      FORMATION AND PURPOSE OF THE COMPANY...............................................................................12
  2.1            Formation................................................................................................12
  2.2            Name.....................................................................................................12
  2.3            Registered Office, Registered Agent......................................................................12
  2.4            Offices..................................................................................................12
  2.5            Purposes.................................................................................................13
  2.6            Foreign Qualification....................................................................................13
  2.7            Term.....................................................................................................13
  2.8            No State Law Partnership.................................................................................13
3      MEMBERSHIP; DISPOSITION OF INTERESTS...............................................................................13
  3.1            Members. Before the date hereof, Dominion Greenbrier was the sole Member of the
                 Company, having contributed assets to the Company with an initial Gross
                 Asset Value of $1,000. Effective as of the date hereof, Piedmont
                 Greenbrier became a Member of the Company, and in consideration of the
                 Capital Commitments detailed on Appendix B hereto, the Company issued 33%
                 of its Membership Interests to Piedmont Greenbrier, which
                 effectively diluted Dominion Greenbrier's Sharing Ratio to 67%...........................................13
  3.2            Restrictions on the Disposition of an Interest...........................................................14
  3.3            Additional Members.......................................................................................18
  3.4            Limit on Encumbrances....................................................................................18
  3.5            Sale of VPSC's Fractional Interest. The Company is undertaking development of the
                 Facilities with VPSC, a wholly-owned subsidiary of Dominion Greenbrier
                 that owns a fractional interest in the Facilities and the development
                 rights thereto. At any time, such fractional interest (the "Fractional
                 Interest") shall be equal to a fraction, the numerator of which is the
                 capital of VPSC at such time and the denominator of which is the sum of
                 the total Capital Commitments of the Members at such time plus the capital
                 of VPSC at such time.....................................................................................19
4      COVENANTS, REPRESENTATIONS AND WARRANTIES; INFORMATION.............................................................19
  4.1            Commitment to Construct the Initial Facilities...........................................................19
  4.2            Development of a Modification............................................................................21
  4.3            Commitment to Construct a Modification...................................................................21
  4.4            General Representations and Warranties...................................................................22
  4.5            Regulatory Status........................................................................................24
  4.6            [INTENTIONALLY OMITTED]..................................................................................24
  4.7            Governmental Applications................................................................................24
  4.8            Information..............................................................................................24
  4.9            Liability to Third Parties...............................................................................25
  4.10           Withdrawal...............................................................................................25
  4.11           Lack of Authority........................................................................................25
</TABLE>

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<TABLE>
<S>    <C>                                                                                                                <C>
  4.12           Reasonable and Necessary Efforts.........................................................................25
  4.13           No Personal Gain to Members..............................................................................25
5.     CAPITAL CONTRIBUTIONS..............................................................................................26
  5.1            Pre-Execution Date Expenditures..........................................................................26
  5.2            Required Capital Contributions...........................................................................26
  5.3            Failure of a Member to Make Required Capital Contributions...............................................28
  5.4            Loans....................................................................................................30
  5.5            Voluntary Contributions..................................................................................31
  5.6            Return of Contributions..................................................................................31
  5.7            Capital Accounts.........................................................................................31
6      ALLOCATIONS AND DISTRIBUTIONS......................................................................................31
  6.1            Allocations of Profits and Losses........................................................................31
  6.2            Tax Allocations..........................................................................................34
  6.3            Withholding..............................................................................................35
  6.4            Distributions............................................................................................35
7.     MANAGEMENT.........................................................................................................36
  7.1            Voting by Members and Management Committee...............................................................36
  7.2            Removal, Resignation and Replacement of Managers.........................................................40
  7.3            Meetings by the Management Committee.....................................................................40
  7.4            Action by Written Consent or Telephone Conference........................................................40
  7.5            Compensation.............................................................................................41
  7.6            Operating Budgets........................................................................................41
  7.7            Financing Committee......................................................................................41
  7.8            Conflicts of Interest....................................................................................42
  7.9            Management of VPSC.......................................................................................42
8      [INTENTIONALLY OMITTED]............................................................................................43
9      OPERATION OF THE FACILITIES........................................................................................43
  9.1            Operator.................................................................................................43
10.    INDEMNIFICATION....................................................................................................43
  10.1           Right to Indemnification.................................................................................43
  10.2           Advance Payment..........................................................................................44
  10.3           Indemnification of Agents................................................................................44
  10.4           Indemnification by the Members...........................................................................44
  10.5           Appearance as a Witness..................................................................................44
  10.6           Nonexclusivity of Rights.................................................................................45
  10.7           Insurance................................................................................................45
  10.8           Member Notification......................................................................................45
  10.9           Savings Clause...........................................................................................45
11.    TAXES..............................................................................................................45
  11.1           Tax Returns..............................................................................................45
  11.2           Tax Status...............................................................................................46
  11.3           Tax Matters..............................................................................................46
  11.4           Tax Elections............................................................................................46
12.    BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS.........................................................................47
  12.1           Maintenance of Books and Records.........................................................................47
  12.2           Accounting Basis.........................................................................................47
</TABLE>

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<TABLE>
<S>    <C>                                                                                                                <C>
  12.3           Financial Reports........................................................................................47
  12.4           Fiscal Year..............................................................................................48
  12.5           Accounts.................................................................................................48
  12.6           Other Notices............................................................................................48
  12.7           Governmental Reports.....................................................................................49
  12.8           Cost of Preparing and Distributing Reports...............................................................49
  12.9           Accounts.................................................................................................49
13.    INSPECTION.........................................................................................................49
  13.1           Inspection of Facilities and Records.....................................................................49
14.    BANKRUPTCY OF A MEMBER.............................................................................................50
  14.1           Bankruptcy Members.......................................................................................50
15     DISSOLUTION, LIQUIDATION, AND TERMINATION..........................................................................50
  15.1           Dissolution..............................................................................................50
  15.2           Liquidation and Termination..............................................................................50
  15.3           Deficit Capital Accounts.................................................................................51
  15.4           Certificate of Cancellation..............................................................................51
16.    GENERAL PROVISIONS.................................................................................................52
  16.1           Offset...................................................................................................52
  16.2           Notices..................................................................................................52
  16.3           Entire Agreement.........................................................................................52
  16.4           Effect of Waiver or Consent..............................................................................52
  16.5           Amendment or Modification................................................................................53
  16.6           Binding Effect...........................................................................................53
  16.7           Specific Performance and Injunctive Relief...............................................................53
  16.8           Governing Law; Severability..............................................................................53
  16.9           No Third Party Beneficiaries.............................................................................53
  16.10          Creditors................................................................................................54
  16.11          Further Assurances.......................................................................................54
  16.12          Notice to Members of Provisions of this Agreement........................................................54
  16.13          Press Releases...........................................................................................54
  16.14          Counterparts.............................................................................................54
  16.15          Supercedes...............................................................................................55
APPENDIX D.................................................................................................................1
  PHASE I CAPITAL BUDGET...................................................................................................1
       Pipelines...........................................................................................................1
  Total....................................................................................................................1
</TABLE>

Appendix A - Certificate of Formation
Appendix B - Sharing Ratios
Appendix C - Description of Initial Facilities
Appendix D - Pre-Execution Date Expenditures
Appendix E - Phase I Capital Budget
Appendix F - CO&M Agreement

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         This Amended and Restated Operating Agreement (this "Agreement") of
Greenbrier Pipeline Company, LLC, a Delaware limited liability company (the
"Company"), is executed and agreed to by the Members (as defined below) as of
September 1, 2001.

                                    RECITALS

A.       The Company was formed as a limited liability company pursuant to a
         Certificate of Formation filed with the Secretary of State of the State
         of Delaware on July 12, 2001 with Dominion Greenbrier, Inc. as its sole
         Member.

B.       The Company and Dominion Greenbrier desire to admit Piedmont Greenbrier
         Pipeline Company, L.L.C. as a Member of the Company and Piedmont
         Greenbrier desires to be admitted as a Member of the Company, and the
         parties desire to restate the Company's Operating Agreement as set
         forth herein.

1.       DEFINITIONS AND CONSTRUCTION.

         The terms defined in this Section 1 shall, for all purposes of this
         Agreement, have the meaning set forth below:

         1.1      DEFINITIONS

                  1.1.1.   "ACT" means the Delaware Limited Liability Company
                           Act, as amended, or any successor or replacement
                           statute.

                  1.1.2.   "ADDITIONAL MEMBER" means any Person who becomes a
                           Member upon the issuance of a Membership Interest
                           directly from the Company after the date hereof.

                  1.1.3.   "ADDITIONAL NECESSARY REGULATORY APPROVALS" means all
                           Authorizations (but excluding Authorizations of a
                           nature not customarily obtained prior to commencement
                           of construction of facilities similar to the
                           Modification in question) as may be required in
                           connection with (a) the ownership, construction and
                           operation of a Modification and (b) the
                           transportation of the natural gas in connection with
                           such Modification.

                  1.1.4.   "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with
                           respect to any Member, the deficit balance, if any,
                           in such Member's Capital Account as of the end of the
                           relevant Fiscal Year, after giving effect to the
                           following adjustments:

                           (a)      such Capital Account shall be deemed to be
                                    increased by any amounts that such Member is
                                    obligated to restore to the Company
                                    (pursuant to this Agreement or otherwise) or
                                    is deemed to be obligated to restore
                                    pursuant to (i) the penultimate sentence of
                                    Treasury Regulations Section 1.704-2(g)(l),
                                    or (ii) the penultimate sentence of Treasury
                                    Regulations Section 1.704-2(i)(5); and

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                           (b)      such Capital Account shall be deemed to be
                                    decreased by the items described in Treasury
                                    Regulations Sections
                                    1.704-l(b)(2)(ii)(d)(4), (5) and (6).

                  1.1.5.   "AFFILIATE" means with respect to a Member, any
                           Person which is (a) a Parent of such Member; or (b) a
                           corporation as to which the majority of the voting
                           securities are (directly or through any number of
                           wholly- owned subsidiaries) owned by such Member or a
                           Parent of such Member.

                  1.1.6.   "AFUDC" means allowance for funds used during
                           construction.

                  1.1.7.   "AGREEMENT" has the meaning set forth in the
                           Preamble.

                  1.1.8.   "AUTHORIZATIONS" means all licenses, certificates,
                           permits, orders, approvals, determinations and
                           authorizations from Governmental Authorities having
                           jurisdiction.

                  1.1.9.   "AVAILABLE INTEREST" has the meaning set forth in
                           Section 3.2.3.

                  1.1.10.  "BANKRUPT MEMBER" means a Member who shall take or be
                           subject to any of the actions described in Section
                           18-304 of the Act.

                  1.1.11.  "BASE RATE" means an interest rate per annum equal to
                           the lesser of (a) the prime rate of Chase Manhattan
                           Bank, N.A. (or its successor) as then in effect, or
                           (b) the maximum interest rate allowed pursuant to
                           Delaware law.

                  1.1.12.  "BUSINESS DAY" means a day, other than Saturday or
                           Sunday, on which commercial banks are open for the
                           transaction of business in New York, New York.

                  1.1.13.  "CAPITAL ACCOUNT" means a book account to be
                           established and maintained by the Company for each
                           Member as computed from time to time in accordance
                           with the capital account maintenance rules set forth
                           in Treasury Regulations Section 1.704-l(b)(2)(iv) and
                           the following provisions:

                           (a)      to each Member's Capital Account there shall
                                    be credited (i) such Member's Capital
                                    Contributions, (ii) such Member's
                                    distributive share of Profits and any items
                                    in the nature of income or gain which are
                                    allocated to such Member pursuant to Section
                                    6.1 hereof, and (iii) the amount of any
                                    Company liabilities assumed by such Member
                                    or which are secured by any asset of the
                                    Company distributed to such Member;

                           (b)      to each Member's Capital Account there shall
                                    be debited (i) the amount of money and the
                                    Gross Asset Value of any asset of the

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                                    Company distributed to such Member, (ii)
                                    such Member's distributive share of Losses
                                    and any items in the nature of expenses or
                                    losses which are allocated to such Member
                                    pursuant to Section 6.1 hereof, and (iii)
                                    the amount of any liabilities of such Member
                                    assumed by the Company or which are secured
                                    by any asset contributed by such Member to
                                    the Company;

                           (c)      in the event that any Membership Interest is
                                    Disposed of or transferred in accordance
                                    with the terms of this Agreement, the
                                    transferee shall succeed to the Capital
                                    Account of the transferor to the extent it
                                    relates to the Membership Interest involved;
                                    and

                           (d)      in determining the amount of any liability
                                    for purposes of subparagraphs (a) and (b)
                                    above, there shall be taken into account
                                    Section 752(c) of the Code and any other
                                    applicable provisions of the Code and
                                    Treasury Regulations.

                           The foregoing provisions and the other provisions of
                           this Agreement relating to the maintenance of Capital
                           Accounts are intended to comply with Treasury
                           Regulations Section 1.704-l(b), and shall be
                           interpreted and applied in a manner consistent with
                           such Treasury Regulations. In the event the
                           Management Committee shall determine that it is
                           prudent to modify the manner in which the Capital
                           Accounts, or any debits or credits thereto, are
                           computed in order to comply with such Treasury
                           Regulations, the Management Committee may make such
                           modification, provided that it is not likely to have
                           a material effect on the amounts distributed to any
                           Person pursuant to Section 15 hereof upon the
                           dissolution of the Company.

                  1.1.14   "CAPITAL COMMITMENT" means, in the case of a Member
                           executing this Agreement as of the date of this
                           Agreement or a person acquiring that Membership
                           Interest, the amount calculated pursuant to the
                           formula specified on Appendix B for that Member as
                           its Capital Commitment to the Company, and in the
                           case of a Membership Interest issued directly by the
                           Company, the Capital Commitment established pursuant
                           thereto, in each case, subject to adjustments on
                           account of Dispositions of Membership Interests
                           permitted by this Agreement.

                  1.1.15.  "CAPITAL CONTRIBUTION" means, with respect to any
                           Member, the amount of money and the initial Gross
                           Asset Value of any property (other than money)
                           contributed to the Company with respect to the
                           Membership Interest held by such Member pursuant to
                           the terms of this Agreement.

                  1.1.16.  "CAPITAL DEFAULTING MEMBER" has the meaning set forth
                           in Section 5.3.

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                  1.1.17.  "CAPITAL NON-DEFAULTING MEMBER" has the meaning set
                           forth in Section 5.3.

                  1.1.18.  "CERTIFICATE" means the Certificate(s) of public
                           convenience and necessity issued by the FERC pursuant
                           to the FERC Application.

                  1.1.19.  "CERTIFICATE OF CANCELLATION" has the meaning set
                           forth in Section 15.4.

                  1.1.20.  "CERTIFICATE OF FORMATION" means the Certificate of
                           Formation filed with the Delaware Secretary of State
                           pursuant to the Act on July 12, 2001, and attached to
                           this Agreement as Appendix A.

                  1.1.21.  "CERTIFIED PUBLIC ACCOUNTANTS" means the firm(s) of
                           nationally recognized independent certified public
                           accountants selected from time to time by the
                           Operator on behalf of the Company.

                  1.1.22.  "CODE" means the Internal Revenue Code of 1986, as
                           amended, or any successor or replacement statute.

                  1.1.23.  "COMPANY" means Greenbrier Pipeline Company, LLC, a
                           Delaware limited liability company.

                  1.1.24.  "COMPANY MINIMUM GAIN" has the meaning ascribed to
                           the term "partnership minimum gain" in Section
                           1.704-2(b)(2) and (d) of the Treasury Regulations.

                  1.1.25.  "CO&M AGREEMENT" means the Construction, Operating
                           and Maintenance Agreement between the Company and the
                           Operator.

                  1.1.26.  "CONFIDENTIAL INFORMATION" means unique and specific
                           information about the Facilities, this Agreement, a
                           Member, the Company, rate strategies or marketing
                           strategies that is not generally available to the
                           public and, in the case of a Member or the Company,
                           that such Member or the Company has designated as
                           confidential. Upon the filing of the FERC
                           Application, the terms and conditions of this
                           Agreement and any information about the Facilities
                           disclosed in the FERC Application (except for any
                           terms and conditions or information for which
                           confidential treatment may have been requested and
                           not refused by the FERC) shall be deemed to be
                           generally available to the public and shall not be
                           considered Confidential Information.

                  1.1.27.  "CONTROL NOTICE" has the meaning set forth in Section
                           3.2.5.

                  1.1.28.  "COST OF INITIAL FACILITIES" means all costs and
                           expenses, including without limitation AFUDC and
                           Pre-Execution Date Expenditures, borne by the
                           Operator or the Company for (a) the acquisition,
                           planning, design, engineering, financing,
                           administration, construction and start-up of the

                                        4
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                           Initial Facilities, and (b) securing all
                           Authorizations required for the foregoing.

                  1.1.29.  "COST OF MODIFICATION" means, with respect to any
                           Modification, all costs and expenses, including
                           without limitation AFUDC, borne by the Operator or
                           the Company for the (a) acquisition, planning,
                           design, engineering, financing, administration,
                           construction and start-up of such Modification, and
                           (b) securing all Authorizations required for the
                           foregoing.

                  1.1.30.  "CUSTOMER" means a Person who has entered into a
                           Service Agreement with the Company (or, where
                           applicable, a precedent agreement relating thereto)
                           for the receipt, transportation, and delivery of
                           natural gas by means of the Facilities.

                  1.1.31.  "DEFAULT RATE" means an interest rate equal to the
                           lesser of (a) two percent (2%) per annum over the
                           prime rate of Chase Manhattan Bank, N.A. (or its
                           successor) as in effect from time to time while such
                           default is outstanding; or (b) the maximum interest
                           rate allowed for this purpose pursuant to the law of
                           Delaware.

                  1.1.32.  "DEPRECIATION" means, for each Fiscal Year or part
                           thereof, an amount equal to the depreciation,
                           amortization, or other cost recovery deduction
                           allowable for federal income tax purposes with
                           respect to an asset for such Fiscal Year or part
                           thereof, except that if the Gross Asset Value of an
                           asset differs from its adjusted basis for federal
                           income tax purposes at the beginning of such Fiscal
                           Year, the depreciation, amortization, or other cost
                           recovery deduction for such Fiscal Year or part
                           thereof shall be an amount which bears the same ratio
                           to such Gross Asset Value as the federal income tax
                           depreciation, amortization, or other cost recovery
                           deduction for such Fiscal Year or part thereof bears
                           to such adjusted tax basis.

                  1.1.33.  "DISPOSE, DISPOSING OR DISPOSITION" means a sale,
                           assignment, transfer, exchange or other disposition
                           (including, without limitation, by operation of law),
                           or the acts thereof.

                  1.1.34.  "DOMINION GREENBRIER" means Dominion Greenbrier,
                           Inc., a Delaware corporation.

                  1.1.35.  "ESTIMATED COST OF INITIAL FACILITIES" means the
                           estimated total Cost of Initial Facilities as
                           determined by the Operator from time to time.

                  1.1.36.  "ESTIMATED COST OF MODIFICATION" means, with respect
                           to any Modification, the estimated total Cost of
                           Modification as determined by the Operator from time
                           to time.

                  1.1.37.  "EXECUTION DATE" means September 1, 2001.

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<PAGE>

                  1.1.38.  "FACILITIES" means the Initial Facilities together
                           with any and all Modifications.

                  1.1.39.  "FERC" means the Federal Energy Regulatory Commission
                           or any commission, agency or other governmental body
                           succeeding to the powers of such commission.

                  1.1.40.  "FERC APPLICATION" means the documents pursuant to
                           which application for a certificate(s) of public
                           convenience and necessity is made to FERC by the
                           Company for authority to construct, own, lease and
                           operate the Initial Facilities and to receive,
                           transport and deliver natural gas by means of the
                           Initial Facilities.

                  1.1.41.  "FERC REHEARING DATE" means the date upon which the
                           order issuing the Certificate is no longer subject to
                           rehearing before FERC.

                  1.1.42.  "FINANCING COMMITMENT" means the agreements between
                           one or more financial institutions or other Persons
                           and the Company or the Financing Corporation pursuant
                           to which such financial institutions or other Persons
                           agree, subject to the conditions set forth therein,
                           to lend money to, or purchase securities of, the
                           Company or the Financing Corporation, the proceeds of
                           which shall be used to finance all or a portion of
                           the Facilities.

                  1.1.43.  "FINANCING COMMITTEE" means the Committee of Member
                           representatives established pursuant to Section 7.7.

                  1.1.44.  "FINANCING CORPORATION" means a corporation or trust
                           wholly owned by the Company that may be organized for
                           the purpose of issuing securities, the proceeds from
                           which are to be advanced directly or indirectly to
                           the Company to finance all or a portion of the
                           Facilities.

                  1.1.45.  "FISCAL YEAR" means the fiscal year adopted by the
                           Company from time to time.

                  1.1.46.  "FRACTIONAL INTEREST" has the meaning set forth in
                           Section 3.5.

                  1.1.47.  "GAAP" means generally accepted accounting principles
                           as applied in the United States.

                  1.1.48.  "GOVERNMENTAL AUTHORITY" means any court, agency,
                           authority, board, bureau, commission, department,
                           office or instrumentality of any nature whatsoever of
                           any governmental or quasi-governmental unit, whether
                           federal, state, parish, county, district,
                           municipality, city, political subdivision or
                           otherwise, domestic or foreign whether now or
                           hereafter in existence.

                                        6
<PAGE>

                  1.1.49.  "GROSS ASSET VALUE" means, with respect to any asset
                           of the Company, the adjusted tax basis of such asset
                           as of the relevant date for federal income tax
                           purposes, except as follows:

                           (a)      the initial Gross Asset Value of any asset
                                    contributed by a Member to the Company shall
                                    be the gross fair market value of such asset
                                    as determined by the Management Committee;

                           (b)      the Gross Asset Values of all Company assets
                                    (including intangible assets such as
                                    goodwill) shall be adjusted to equal their
                                    respective gross fair market values (taking
                                    into account Section 770l(g) of the Code) as
                                    determined by the Management Committee as of
                                    the following times:

                                    (i)      the acquisition after the date
                                             hereof of an additional Membership
                                             Interest in the Company by any new
                                             or existing Member in exchange for
                                             more than a de minimis Capital
                                             Contribution;

                                    (ii)     the distribution by the Company to
                                             a Member of more than a de minimis
                                             amount of money or Company property
                                             as consideration for a Membership
                                             Interest in the Company; and

                                    (iii)    the liquidation of the Company
                                             within the meaning of Treasury
                                             Regulations Section
                                             1.704-l(b)(2)(ii)(g);

                                    provided that an adjustment pursuant to
                                    clauses (i) and (ii) above shall be made
                                    only if the Management Committee reasonably
                                    determines that such adjustment is necessary
                                    to reflect the relative economic interests
                                    of the Members in the Company;

                           (c)      the Gross Asset Value of any item of Company
                                    assets distributed to any Member shall be
                                    adjusted to equal the gross fair market
                                    value (taking into account Section 770l(g)
                                    of the Code) of such asset on the date of
                                    distribution as determined by the Management
                                    Committee;

                           (d)      the Gross Asset Values of all Company assets
                                    (including intangible assets such as
                                    goodwill) shall be adjusted to reflect any
                                    adjustments to the adjusted basis of such
                                    assets pursuant to Sections 734(b) or 743(b)
                                    of the Code, but only to the extent that
                                    such adjustments are required to be taken
                                    into account in determining Capital Accounts
                                    pursuant to Treasury Regulations Section
                                    1.704-l(b)(2)(iv)(m) and subparagraph (d) of
                                    the definition of "Profits" and "Losses"
                                    provided that Gross Asset Values shall
                                    not be adjusted pursuant to this
                                    subparagraph (d) to the extent that

                                        7
<PAGE>

                                    the Management Committee determines that an
                                    adjustment pursuant to subparagraph (b) is
                                    required in connection with a transaction
                                    that would otherwise result in an adjustment
                                    pursuant to this subparagraph (d); and

                           (e)      if the Gross Asset Value of an asset has
                                    been determined or adjusted pursuant to
                                    subparagraphs (b) or (d) above, such Gross
                                    Asset Value shall thereafter be adjusted by
                                    the Depreciation taken into account with
                                    respect to such asset for purposes of
                                    computing Profits and Losses and other items
                                    allocated pursuant to Section 6.1 of this
                                    Agreement.

                  1.1.50.  "INITIAL FACILITIES" means the real, personal, mixed
                           and contractual property (whether tangible or
                           intangible) to be owned and operated by the Company
                           for the receipt, transportation and delivery of
                           natural gas, all as more fully described in Appendix
                           C (not including any Modification but including any
                           changes in size, design capacity and location as may
                           be approved prior to the date of filing of the FERC
                           Application).

                  1.1.51.  "IN-SERVICE DATE" means the date on which the Initial
                           Facilities have been constructed and placed in
                           service.

                  1.1.52.  "LOAN" means any loan made by a Member to the
                           Company.

                  1.1.53.  "MANAGER" has the meaning set forth in Section 7.1.2.

                  1.1.54.  "MANAGEMENT COMMITTEE" has the meaning set forth in
                           Section 7.1.2.

                  1.1.55.  "MEMBER" means any Person executing this Agreement as
                           of the date of this Agreement or who is hereafter
                           admitted to the Company as a Member as provided in
                           this Agreement, but does not include any Person who
                           has ceased to be a Member of the Company.

                  1.1.56.  "MEMBERSHIP INTEREST" means all of a Member's rights
                           in the Company, including, without limitation, the
                           Member's share of profits and losses of the Company,
                           the right to receive distributions of the Company's
                           assets, any right to vote, and any right to
                           participate in the management of the Company.

                  1.1.57.  "MEMBER NONRECOURSE DEBT" has the meaning ascribed to
                           the term "partner nonrecourse debt" in Treasury
                           Regulations Section 1.704-2(b)(4).

                  1.1.58   "MEMBER NONRECOURSE DEBT MINIMUM GAIN" has the
                           meaning ascribed to the term "partner nonrecourse
                           debt minimum gain" in Section 1.704-2(i)(2) and (3)
                           of the Treasury Regulations.

                                        8
<PAGE>

                  1.1.59.  "MEMBER NONRECOURSE DEDUCTIONS" has the meaning
                           ascribed to the term "partner nonrecourse deductions"
                           in Sections 1.704-2(i)(l) and 1.704-2(i)(2) of the
                           Treasury Regulations.

                  1.1.60.  "MEMBER TRANSFEREE" has the meaning set forth in
                           Section 3.2.4.

                  1.1.61.  "MODIFICATION" means any additions or modifications
                           to the Facilities approved after the filing of the
                           FERC Application installed (a) to modify, improve,
                           expand, extend or increase the design capacity or
                           scope of the Facilities or any portion thereof
                           (except in connection with customary maintenance) or
                           (b) to provide a new point of delivery or receipt of
                           natural gas for the Facilities.

                  1.1.62.  "NECESSARY REGULATORY APPROVALS" means all
                           Authorizations (but excluding Authorizations of a
                           nature not customarily obtained prior to commencement
                           of construction of pipeline facilities similar to the
                           Initial Facilities) as may be required in connection
                           with (a) the construction and operation of the
                           Initial Facilities, (b) the formation of the Company,
                           and (c) the receipt, transportation and delivery of
                           natural gas under the Service Agreements.

                  1.1.63.  "NON-OFFERING MEMBER" has the meaning set forth in
                           Section 3.2.3.

                  1.1.64.  "NONRECOURSE LIABILITY" has the meaning set forth in
                           Treasury Regulations Section 1.704-2(b)(3).

                  1.1.65.  "OFFERING MEMBER" has the meaning set forth in
                           Section 3.2.3.

                  1.1.66.  "OFFER NOTICE" has the meaning set forth in Section
                           3.2.3.

                  1.1.67.  "OFFER PERIOD ONE" has the meaning set forth in
                           Section 3.2.3.

                  1.1.68.  "OFFER PERIOD TWO" has the meaning set forth in
                           Section 3.2.3.

                  1.1.69.  "OPERATING BUDGET" has the meaning set forth in
                           Section 7.6.

                  1.1.70.  "OPERATOR" means Dominion Transmission, Inc., a
                           Delaware corporation, and any of its successors or
                           assigns, pursuant to the CO&M Agreement.

                  1.1.71.  "PARENT" means any Person who directly or indirectly
                           owns more than fifty percent (50%) of the outstanding
                           voting stock of a Member.

                  1.1.72.  "PERSON" means an individual, a trust, an estate, a
                           domestic corporation, a foreign corporation, a
                           professional corporation, a partnership, a limited
                           partnership, a limited liability company, a foreign
                           limited liability company, an unincorporated
                           association, or another entity.

                                        9
<PAGE>

                  1.1.73.  "PHASE I CAPITAL BUDGET" means the capital budget for
                           the period from the Execution Date until the filing
                           of the FERC Application, as set forth in Appendix E.

                  1.1.74.  "PHASE II CAPITAL BUDGET" means the capital budget
                           for the period from the filing of the FERC
                           Application to the issuance of the Certificate.

                  1.1.75.  "PHASE III CAPITAL BUDGET" means the capital budget
                           for the period from the issuance of the Certificate
                           to the In-Service Date.

                  1.1.76.  "PIEDMONT GREENBRIER" means Piedmont Greenbrier
                           Pipeline Company, LLC, a North Carolina limited
                           liability company.

                  1.1.77.  "PRE-EXECUTION DATE EXPENDITURES" means expenditures
                           and costs made by any Member or any of its Affiliates
                           prior to the Execution Date, if approved by the
                           Members pursuant to Section 5 if required to be so
                           approved, including, but not limited to, expenditures
                           made in the course of activities reasonably related
                           to preparing this Agreement, the CO&M Agreement, the
                           precedent agreements, and other agreements related to
                           the formation of the Company, marketing, planning and
                           designing the Facilities, acquiring rights of way,
                           preparing the FERC Application and obtaining the
                           Necessary Regulatory Approvals. Pre-Execution Date
                           Expenditures include only internal and external
                           expenditures and costs made on behalf of the Company
                           and do not include any internal and external
                           expenditures or costs made by a Member or any of its
                           Affiliates for the purpose of (i) evaluating the
                           Member's investment in the Company or its use of any
                           services to be provided by the Company, (ii)
                           obtaining the permission of any Governmental
                           Authority or other Person to participate as a Member
                           or as a subscriber to any such services, (iii) or any
                           other expenditures or costs made by a Member or its
                           Affiliates for the benefit of a Member and not for
                           the direct benefit of the Company, except that legal
                           fees incurred by each Member in connection with the
                           preparation of this Agreement, the CO&M Agreement and
                           other agreements related to the formation of the
                           Company and the organization of its activities shall
                           be Pre-Execution Date Expenditures.

                  1.1.78.  "PROCEEDING" means any threatened, pending or
                           completed action, suit or proceeding, whether civil,
                           criminal, administrative, arbitrative or
                           investigative.

                  1.1.79.  "PROFITS" and "LOSSES" mean, for each Fiscal Year or
                           part thereof, the taxable income or loss of the
                           Company for such Fiscal Year determined in accordance
                           with Section 703(a) of the Code (for this purpose,
                           all items of income, gain, loss or deduction required
                           to be stated separately pursuant to Section 703(a)(l)
                           of the Code shall be included in taxable income or
                           loss), with the following adjustments (without
                           duplication):

                                       10
<PAGE>

                           (a)      any income of the Company that is exempt
                                    from federal income tax shall be added to
                                    such taxable income or loss;

                           (b)      any expenditures of the Company described in
                                    Section 705(a)(2)(B) of the Code or treated
                                    as such pursuant to Treasury Regulations
                                    Section 1.704-l(b)(2)(iv)(i) shall be
                                    subtracted from such taxable income or loss;

                           (c)      in the event the Gross Asset Value of any
                                    Company asset is adjusted pursuant to
                                    subparagraphs (b) or (c) of the definition
                                    of Gross Asset Value, the amount of such
                                    adjustment shall be taken into account as
                                    gain (if the adjustment increases the Gross
                                    Asset Value of the asset) or loss (if the
                                    adjustment decreases the Gross Asset Value
                                    of the asset) from the disposition of such
                                    asset for purposes of computing Profits and
                                    Losses;

                           (d)      gain or loss resulting from any disposition
                                    of Company property with respect to which
                                    gain or loss is recognized for federal
                                    income tax purposes shall be computed with
                                    reference to the Gross Asset Value of the
                                    property disposed of, rather than the
                                    adjusted tax basis of such property;

                           (e)      in lieu of the depreciation, amortization or
                                    other cost recovery deductions taken into
                                    account in computing such taxable income or
                                    loss, there shall be taken into account
                                    Depreciation for such Fiscal Year or part
                                    thereof, computed in accordance with the
                                    definition of Depreciation; and

                           (f)      to the extent an adjustment to the adjusted
                                    tax basis of any Company asset pursuant to
                                    Sections 734(b) or 743(b) of the Code is
                                    required to be taken into account in
                                    determining Capital Accounts pursuant
                                    Treasury Regulations Section 1.704-
                                    l(b)(2)(iv)(m)(4) as a result of a
                                    distribution other than in liquidation of a
                                    Member's Interest, the amount of such
                                    adjustment shall be treated as an item of
                                    gain (if the adjustment increases the basis
                                    of the asset) or loss (if the adjustment
                                    decreases such basis) from the disposition
                                    of the asset and shall be taken into account
                                    for purposes of computing Profits or Losses.

                  1.1.80.  "PURCHASE NOTICE" has the meaning set forth in
                           Section 5.3.5.

                  1.1.81.  "REGULATORY ALLOCATIONS" has the meaning set forth in
                           Section 6.1.2(h).

                  1.1.82.  "SERVICE AGREEMENTS" means the service agreement(s)
                           by and between the Company and the Customers for the
                           receipt, transportation and delivery of natural gas
                           by means of the Facilities.

                                       11
<PAGE>

                  1.1.83.  "SHARING RATIO" means with respect to any Member, the
                           fraction (expressed as a percentage), the numerator
                           of which is that Member's Capital Commitment and the
                           denominator of which is the sum of all Capital
                           Commitments of all Members, as such fraction may be
                           adjusted pursuant to any other Section of this
                           Agreement (including, without limitation, Sections
                           4.1, 4.3, 5.3 and 7.7).

                  1.1.84.  "SUPERMAJORITY VOTE" means the affirmative vote of
                           those Members representing not less than seventy-five
                           percent (75%) of the Sharing Ratios of all Members.

                  1.1.85.  "TAX DISTRIBUTION" has the meaning set forth in
                           Section 6.4.1.

                  1.1.86.  "TAX MATTERS PARTNER" has the meaning set forth in
                           Section 11.1.

                  1.1.87.  "TREASURY REGULATIONS" means the Treasury Regulations
                           issued and in effect under the Code.

                  1.1.88.  "VPSC" means Dominion Pipeline-Greenbrier, Inc., a
                           Virginia public service company.

         1.2      CONSTRUCTION.

                  Whenever the context requires, the gender of all words used in
                  this Agreement includes the masculine, feminine and neuter.
                  All references to Sections refer to sections of this Agreement
                  (unless the context clearly indicates otherwise), and all
                  references to Appendices are to Appendices attached to this
                  Agreement, each of which is made a part hereof for all
                  purposes.

2.       FORMATION AND PURPOSE OF THE COMPANY.

         2.1      FORMATION.

                  The Company has been organized as a Delaware limited liability
                  company by the filing of the Certificate of Formation pursuant
                  to the Act with the Delaware Secretary of State.

         2.2      NAME.

                  The name of the Company is "Greenbrier Pipeline Company, LLC."

         2.3      REGISTERED OFFICE, REGISTERED AGENT.

                  The registered agent and office shall be as set forth in the
                  Certificate of Formation or as subsequently designated by the
                  Company, subject to the requirements of the Act.

         2.4      OFFICES.

                                       12
<PAGE>

                  The principal offices of the Company shall be at such place as
                  the Members may from time to time determine. Notice of any
                  change in such offices shall be given to each Member by the
                  Managers. The Company may have such other offices as the
                  Members may designate from time to time.

         2.5      PURPOSES.

                  The purposes of the Company shall be to plan, design, develop,
                  construct, own, lease and provide for the operation and
                  maintenance of the Facilities and conduct such business
                  activities that are necessary or incidental in connection
                  therewith.

         2.6      FOREIGN QUALIFICATION.

                  To the extent required by law, the Members shall cause the
                  Company to qualify to transact business in North Carolina,
                  Virginia and West Virginia and any other jurisdictions in
                  which such qualification may be required. At the request of
                  the Management Committee, each Member shall execute,
                  acknowledge, swear to, and deliver all certificates and other
                  instruments conforming with this Agreement that are necessary
                  or appropriate to qualify, continue, and terminate the Company
                  as a foreign limited liability company in all such
                  jurisdictions.

         27       TERM.

                  The Company commenced on July 12, 2001 and shall continue in
                  existence until the latest date on which the Company is to
                  dissolve as may be provided in the Certificate of Formation or
                  until such earlier date as the Company may be dissolved as
                  provided in this Agreement.

         2.8      NO STATE LAW PARTNERSHIP.

                  The Members intend that (a) the Company shall not be a
                  partnership (including, without limitation, a limited
                  partnership) or joint venture other than for federal or state
                  income tax purposes, (b) no Member or Manager shall be a
                  partner or joint venturer of any other Member or Manager as a
                  result of this Agreement for any purposes other than federal
                  and state tax purposes, and (c) this Agreement shall not be
                  construed to suggest otherwise.

3.       MEMBERSHIP; DISPOSITION OF INTERESTS.

         3.1      MEMBERS. Before the date hereof, Dominion Greenbrier was the
                  sole Member of the Company, having contributed assets to the
                  Company with an initial Gross Asset Value of $1,000. Effective
                  as of the date hereof, Piedmont Greenbrier became a Member of
                  the Company, and in consideration of the Capital Commitments
                  detailed on Appendix B hereto, the Company issued 33% of its
                  Membership Interests to Piedmont Greenbrier, which effectively
                  diluted Dominion Greenbrier's Sharing Ratio to 67%.

                                       13
<PAGE>

                  As of the date hereof, the Members of the Company are Dominion
                  Greenbrier and Piedmont Greenbrier.

         3.2      RESTRICTIONS ON THE DISPOSITION OF AN INTEREST.

                  3.2.1.   SUPER MAJORITY VOTE. Except as specifically provided
                           below in this Section 3.2, a Disposition of a
                           Membership Interest shall not occur without a
                           Supermajority Vote of the Members. Any attempted
                           Disposition of a Membership Interest, or a part
                           thereof, other than in accordance with Section 3.2 of
                           this Agreement shall be null and void ab initio.

                  3.2.2.   TRANSFER TO AFFILIATE. Notwithstanding any other
                           provisions of Section 3.2, a Member may Dispose of a
                           Membership Interest without the consent of the other
                           Members if the Disposition is to an Affiliate of such
                           Member.

                  3.2.3.   TRANSFERS GENERALLY.

                           (a)      Subject to Section 3.2.4, if a Member wishes
                                    to Dispose of all or any portion of its
                                    Membership Interest (the "Available
                                    Interest") to a Person other than an
                                    Affiliate of such Member, the following
                                    procedures shall apply. After receiving a
                                    bona fide purchase offer from such Person
                                    for the Available Interest, the Member
                                    holding the Available Interest (the
                                    "Offering Member") shall give a written
                                    notice to each of the other Members (the
                                    "Non-Offering Members") stating the terms of
                                    the offer and the Offering Member's intent
                                    to accept the offer unless the Available
                                    Interest is purchased as provided below (the
                                    "Offer Notice").

                           (b)      Each Non-Offering Member shall have the
                                    right, exercisable by giving joint written
                                    notice to all Members within thirty (30)
                                    calendar days after receipt of the Offer
                                    Notice ("Offer Period One"), to purchase a
                                    pro rata portion of the entire Available
                                    Interest, based on the respective Sharing
                                    Ratios of all Non-Offering Members.

                           (c)      If at least one, but less than all, of the
                                    Non-Offering Members exercises its
                                    respective purchase right during Offer
                                    Period One each of the Non-Offering Members
                                    who exercised such right shall have the
                                    further right, exercisable by giving joint
                                    written notice to all Members within thirty
                                    (30) calendar days after the end of Offer
                                    Period One ("Offer Period Two"), to purchase
                                    a pro rata portion of the entire remaining
                                    Available Interest, based on the respective
                                    Sharing Ratios of those Non-Offering Members
                                    who actually exercise such purchase right.

                                       14
<PAGE>

                           (d)      If a Member elects to purchase an Available
                                    Interest or portion thereof pursuant to
                                    Section 3.2.3(b) or (c), but does not
                                    receive Authorization to purchase all of the
                                    Available Interest or portion thereof, then
                                    such Member shall be allowed to purchase the
                                    maximum amount of the Available Interest
                                    which it is permitted to purchase hereunder
                                    and under such Authorization, in which case
                                    the portion of such Available Interest which
                                    such Member is unable to purchase shall be,
                                    within 30 days after such Authorization is
                                    denied, offered to the other Non-Offering
                                    Members in accordance with Section 3.2.3(c).

                           (e)      Any purchase under the preceding paragraphs
                                    shall occur on the terms and conditions set
                                    forth in the bona fide offer, except as set
                                    forth below. At closing, each purchasing
                                    Member shall make a cash payment for its
                                    proportionate amount of the total purchase
                                    price for the Available Interest, which
                                    total price shall be the lesser of the price
                                    set forth in the bona fide offer or the
                                    balance in the Offering Member's Capital
                                    Account on the date of the closing. Closing
                                    on all purchases shall occur on a date and
                                    at the location mutually agreed by the
                                    purchasing Members, but shall be no later
                                    than thirty (30) calendar days after the
                                    expiration of the final offer period.

                           (f)      If no purchase rights are exercised at all
                                    during Offer Period One or if Offer Period
                                    Two occurs and no purchase rights are
                                    exercised during Offer Period Two or the
                                    offers received during Offer Period Two do
                                    not cover all of the Available Interest,
                                    then the Offering Member shall be free to
                                    complete the Disposition of the entire
                                    Available Interest to the Person making the
                                    bona fide offer on the terms and conditions
                                    thereof. If the Disposition to the Person
                                    making the bona fide offer is not
                                    consummated within ninety (90) calendar days
                                    after the expiration of the Offer Period,
                                    such Disposition by the Offering Member
                                    shall not be made without again complying
                                    with the procedures of this Section 3.2.3.

                  3.2.4.   TRANSFERS BY MEMBER TRANSFEREES.

                           (a)      Notwithstanding the terms of Section 3.2.3,
                                    if a Member who has received its Membership
                                    Interest through a Disposition from another
                                    Member (the "Member Transferee") wishes to
                                    Dispose of an Available Interest to a Person
                                    other than its Affiliate, the following
                                    procedures shall apply. After receiving a
                                    bona fide purchase offer from such Person,
                                    the Member Transferee shall give an Offer
                                    Notice to the Member from whom it received
                                    its Membership Interest (the "Original
                                    Transferring Member"). The terms of this
                                    Section 3.2.4 shall not apply if the
                                    Original Transferring Member is no longer a
                                    Member of the Company.

                                       15
<PAGE>

                           (b)      Upon receipt of the Offer Notice, the
                                    Original Transferring Member shall have the
                                    first right, exercisable by giving written
                                    notice to all Members within thirty (30)
                                    calendar days after receipt of the Offer
                                    Notice, to purchase the entire Available
                                    Interest. Any decision by the Original
                                    Transferring Member not to exercise this
                                    right shall not limit its rights under the
                                    following provisions.

                           (c)      If the Original Transferring Member does not
                                    give written notice to exercise its purchase
                                    right as provided in Section 3.2.4(b), each
                                    Member (including the Original Transferring
                                    Member) shall have the right, exercisable by
                                    giving joint written notice to all Members
                                    within thirty (30) calendar days after the
                                    end of the Original Transferring Member's
                                    first right of offer period, to purchase a
                                    pro rata portion of the entire Available
                                    Interest, based on the respective Sharing
                                    Ratios of all the Members.

                           (d)      If at least one, but less than all, of the
                                    Members exercises its purchase right
                                    according to Section 3.2.4(c) above, such
                                    Member(s) shall have the further right,
                                    exercisable by giving joint written notice
                                    to all Members within thirty (30) calendar
                                    days after the end of the offer period
                                    provided in Section 3.2.4(c) above, to
                                    purchase a pro rata portion of the entire
                                    remaining Available Interest, based on the
                                    respective Sharing Ratios of those Members
                                    who actually exercise such purchase right.

                           (e)      If a Member elects to purchase the Available
                                    Interest or portion thereof pursuant to
                                    Sections 3.2.4(b), (c) or (d), but does not
                                    receive Authorization to purchase the entire
                                    Available Interest, then such Member shall
                                    be allowed to purchase the maximum amount of
                                    the Available Interest which it is permitted
                                    to purchase hereunder and under such
                                    Authorization, in which case the portion of
                                    such Available Interest which such Member is
                                    unable to purchase shall be, within 30 days
                                    after such Authorization is denied, offered
                                    to the other Members in accordance with
                                    Section 3.2.4(d).

                           (f)      Any purchase under the preceding paragraphs
                                    shall occur on the terms and conditions set
                                    forth in the bona fide offer, except as set
                                    forth below. At closing, each purchasing
                                    Member shall make a cash payment for its
                                    proportionate amount of the total purchase
                                    price for the Available Interest, which
                                    total price shall be the lesser of the price
                                    set forth in the bona fide offer or the
                                    balance in the Member Transferee's Capital
                                    Account on the date of the closing. Closing
                                    on all purchases shall occur on a date and
                                    at the location mutually agreed by the
                                    purchasing Members, but shall be no later
                                    than thirty (30) calendar days after the
                                    expiration of the final offer period.

                                       16
<PAGE>

                           (g)      If no purchase rights are exercised at all
                                    under Section 3.2.4(b)-(d), or the offers do
                                    not cover all of the Available Interest,
                                    then the Member Transferee shall be free to
                                    complete the Disposition of the entire
                                    Available Interest to the Person making the
                                    bona fide offer on the terms and conditions
                                    thereof. If the Disposition to the Person
                                    making the bona fide offer is not
                                    consummated within ninety (90) calendar days
                                    after the expiration of the final offer
                                    period, such Disposition by the Member
                                    Transferee shall not be made without again
                                    complying with the procedures of this
                                    Section 3.2.4.

                           (h)      The provisions of this Section 3.2.4 shall
                                    only apply to a transfer by a Member
                                    Transferee. Any subsequent transfer by the
                                    transferee of a Member Transferee shall be
                                    governed by Section 3.2.3.

                  3.2.5.   CHANGE IN CONTROL. If a Member shall cease to be
                           controlled directly or indirectly by the same Persons
                           who control it as of the date of that Member's
                           admission to the Company, the Member shall provide
                           written notice thereof to each of the other Members
                           (the "Control Notice"). On or before the expiration
                           of the thirty (30) day period after the Control
                           Notice is received by the other Members, such other
                           Members shall have the option to buy the Membership
                           Interest of the Member affected by the change of
                           control at a purchase price equal to the balance in
                           that Member's Capital Account on the date the option
                           is exercised, according to the procedures set forth
                           in Section 3.2.3 above. If more than one of such
                           other Members wishes to exercise such option, they
                           shall exercise such option on the same date and share
                           in such purchase on a pro rata basis based on their
                           respective Sharing Ratios. This paragraph shall not
                           apply to a change in control that results from the
                           merger or consolidation of a Parent of a Member with
                           another corporation or the sale of all or
                           substantially all of the assets of such Parent if, in
                           each such case, (a) such Parent shall not have been
                           formed for the principal purpose of directly or
                           indirectly controlling the Member, (b) the Membership
                           Interest does not represent substantially all of the
                           assets of such Parent, and (c) either (i) such Parent
                           shall be the continuing corporation and shall
                           continue to directly or indirectly control the
                           Member, or (ii) the successor corporation (if other
                           than such Parent) shall be a corporation organized
                           and existing under the laws of the United States of
                           America or a state thereof or the District of
                           Columbia and such successor corporation shall
                           continue to be in substantially the same business as
                           such Parent.

                  3.2.6.   GENERAL ADMISSION REQUIREMENTS. No Person (who is not
                           already a Member) shall be admitted to the Company as
                           a Member, whether through issuance of a Membership
                           Interest by the Company or Disposition of a
                           Membership Interest by a Member, unless all of the
                           following occur: (a) such Person executes this
                           Agreement, makes any

                                       17
<PAGE>

                           required Capital Contributions in full, and provides
                           all information reasonably requested by the Company
                           in connection with its identity and the terms of any
                           Disposition of a Membership Interest to such Person;
                           (b) if required by law, such issuance or Disposition
                           of a Membership Interest is registered under the
                           Securities Act of 1933, as amended, and any
                           applicable state securities laws; and (c) the Company
                           receives an opinion of its legal counsel,
                           satisfactory to the Company in form and substance,
                           confirming that such issuance or Disposition is
                           exempt from registration under those laws and would
                           not result in the termination of the Company for tax
                           or other purposes. The Company may waive the
                           requirements of an opinion from legal counsel, or may
                           limit the scope and subject matter of such opinion,
                           based upon the determination of the Management
                           Committee.

                  3.2.7.   REIMBURSEMENT UPON ADMISSION. The Member effecting a
                           Disposition and any Person admitted to the Company in
                           connection therewith shall pay, or reimburse the
                           Company for, all costs incurred by the Company in
                           connection with the Disposition or admission
                           (including, without limitation, the legal fees
                           incurred in connection with the legal opinions
                           referred to in Section 3.2.6) on or before the 30th
                           day after the receipt by such Member or transferee of
                           the Company's invoice for the amount due. If payment
                           is not made by the date due, the Person owing that
                           amount shall pay interest on the unpaid amount from
                           the date due at the Default Rate.

         3.3      ADDITIONAL MEMBERS.

                  Any Person who receives a Membership Interest pursuant to
                  Sections 3.2.2, 3.2.3 or 3.2.4 shall be admitted to the
                  Company as a Member upon consummation of such transfer. Except
                  as set forth in the previous sentence, no Person shall be
                  admitted to the Company as a Member or Additional Member, and
                  Membership Interests shall not be created or issued for such
                  purpose, unless such admission is approved by the
                  Supermajority Vote of all then existing Members and is
                  followed by compliance with Section 3.2.6 above. Any admission
                  shall become effective only after the new Member has executed
                  and delivered to the other Members a document including the
                  new Member's notice address, its agreement to be bound by this
                  Agreement and its representation and warranty that the
                  representations and warranties in Section 4.4 are true and
                  correct with respect to the new Member.

         3.4      LIMIT ON ENCUMBRANCES.

                  Except as provided in this Section 3 and except as may be
                  required by the lenders in connection with the Financing
                  Commitment, each Member shall be prohibited from pledging,
                  granting a security interest in, or otherwise encumbering its
                  Membership Interest or granting any option or contingent right
                  of purchase with respect thereto, whether in whole or in part,
                  without the prior written approval of the Members by
                  Supermajority Vote.

                                       18
<PAGE>

         3.5      SALE OF VPSC'S FRACTIONAL INTEREST. The Company is undertaking
                  development of the Facilities with VPSC, a wholly-owned
                  subsidiary of Dominion Greenbrier that owns a fractional
                  interest in the Facilities and the development rights thereto.
                  At any time, such fractional interest (the "Fractional
                  Interest") shall be equal to a fraction, the numerator of
                  which is the capital of VPSC at such time and the denominator
                  of which is the sum of the total Capital Commitments of the
                  Members at such time plus the capital of VPSC at such time.

                  Dominion Greenbrier shall cause VPSC to sell the Fractional
                  Interest to the Company, and the Members shall cause the
                  Company to purchase the Fractional Interest from VPSC, as soon
                  after the issuance of the Certificate as approval can be
                  obtained from the Virginia State Corporation Commission (if
                  such approval is necessary) unless some other time is mutually
                  agreed upon by the Members. The purchase price for the
                  Fractional Interest shall be equal to the amount necessary to
                  fully reimburse VPSC for all reasonable expenditures VPSC made
                  or is reasonably obligated to make as of the date of the sale
                  in connection with activities related to the Company or the
                  development of the Facilities. Upon payment of such purchase
                  price by the Company, the Members shall make such additional
                  Capital Commitments and related Capital Contributions in
                  accordance with their Sharing Ratios as are necessary to
                  enable the Company to pay the purchase price for the
                  Fractional Interest.

                  If the Fractional Interest is not sold to the Company for any
                  reason (including, without limitation, lack of Virginia State
                  Corporation Commission approval of such sale or any alternate
                  structure that may be agreed upon by the Members), then,
                  promptly after written request by VPSC, the Company shall
                  reimburse VPSC for all reasonable expenditures made by VPSC in
                  connection with activities related to the Company or the
                  development of the Facilities, and the Company shall assume
                  any unpaid obligations of VPSC incurred in connection with
                  VPSC's activities with respect to the Company or the
                  development of the Facilities. Upon such reimbursement by the
                  Company, the Members shall make such additional Capital
                  Commitments and related Capital Contributions in accordance
                  with their Sharing Ratios as are necessary to enable the
                  Company to reimburse VPSC for all expenditures made by VPSC in
                  connection with activities related to the Company or the
                  development of the Facilities and to assume any unpaid
                  obligations of VPSC incurred in connection with VPSC's
                  activities with respect to the Company or the development of
                  the Facilities.

4        COVENANTS, REPRESENTATIONS AND WARRANTIES; INFORMATION.

         4.1      COMMITMENT TO CONSTRUCT THE INITIAL FACILITIES.

                  4.1.1.   Not less than thirty (30) days prior to the filing of
                           the FERC Application, the Management Committee or any
                           Member shall submit to the Members a Phase II Capital
                           Budget and a Phase III Capital Budget. Within thirty
                           (30) days after delivery of the Phase II and Phase
                           III Capital Budgets, the Members shall vote on
                           whether to accept and fund

                                       19
<PAGE>

                           the Phase II Capital Budget (which acceptance shall
                           also be deemed authorization to file the FERC
                           Application) and on whether to accept the Phase III
                           Capital Budget. If the Members do not agree by a
                           Supermajority Vote to accept and fund the Phase II
                           Capital Budget and to accept the Phase III Capital
                           Budget, the Member(s) that voted for acceptance may
                           purchase, in proportion to their respective Sharing
                           Ratios, the entire Membership Interest(s) of the
                           Member(s) who voted against acceptance. The Members
                           desiring to exercise such purchase right shall so
                           notify all of the other Members within ten (10)
                           calendar days after such vote. The aggregate price
                           for the Membership Interests to be purchased shall be
                           paid in cash at closing and, unless the selling and
                           purchasing Members otherwise agree, shall be the sum
                           of the Capital Account balances, on the date of such
                           vote, of the Member(s) who voted against acceptance,
                           and such price shall be allocated to the purchasing
                           Member(s) in proportion to their respective Sharing
                           Ratios. Closing on such purchase shall occur on the
                           date and at the location mutually agreed by the
                           purchasing Member(s), but in no event more than
                           twenty-one (21) calendar days after such vote. The
                           Sharing Ratios of the Members shall be adjusted
                           accordingly, and a revised Appendix B shall be sent
                           to the Members. If the Members who voted for
                           acceptance do not purchase the entire Membership
                           Interest(s) of the Member(s) who voted against
                           acceptance, the Company shall be dissolved as soon as
                           reasonably practicable in accordance with Section 15,
                           subject to any necessary approvals from any
                           Governmental Authority.

                  4.1.2.   Within the time requirements specified in the FERC's
                           regulations for acceptance of the Certificate, the
                           Members shall vote on whether the Company shall (a)
                           accept the Certificate and commit to construct the
                           Initial Facilities, (b) reject the Certificate and/or
                           (c) seek rehearing of the order issuing the
                           Certificate. Within thirty (30) calendar days after
                           the FERC Rehearing Date, if applicable, the Members
                           shall vote on whether the Company shall either accept
                           the Certificate and commit to construct the Initial
                           Facilities, reject the Certificate, appeal the order
                           issuing the Certificate or to take other legal
                           action. A Member may vote to reject the Certificate
                           only if a condition of the Certificate is
                           unacceptable in the Member's reasonable opinion. A
                           vote to accept the Certificate shall also be a vote
                           to fund the Phase III Capital Budget. In the event
                           the Certificate is not ultimately accepted by a
                           Supermajority Vote of the Members, the Member(s) that
                           voted to accept the Certificate may accept the
                           Certificate and commit to construct the Initial
                           Facilities and purchase, in proportion to their
                           respective Sharing Ratios, the entire Membership
                           Interest(s) of the Member(s) who voted against
                           acceptance of the Certificate. The Members desiring
                           to exercise such purchase right shall so notify all
                           of the other Members within ten (10) calendar days
                           after such vote. The aggregate price for the
                           Membership Interests to be purchased shall be paid in
                           cash at closing and, unless the selling and
                           purchasing Members otherwise agree, shall be the sum
                           of the Capital

                                       20
<PAGE>

                           Account balances, on the date of such vote, of the
                           Member(s) who voted against acceptance of the
                           Certificate, and such price shall be allocated to the
                           purchasing Member(s) in proportion to their
                           respective Sharing Ratios. Closing on such purchase
                           shall occur on the date and at the location mutually
                           agreed by the purchasing Member(s), but in no event
                           more than twenty-one (21) calendar days after such
                           vote. The Sharing Ratios of the Members shall be
                           adjusted accordingly, and a revised Appendix B shall
                           be sent to the Members. If the Members who voted to
                           accept the Certificate do not purchase the entire
                           Membership Interest(s) of the Member(s) who voted
                           against acceptance as provided above, the Company
                           shall be dissolved as soon as reasonably practicable
                           in accordance with Section 15, subject to any
                           necessary approvals from any Governmental Authority.

         4.2      DEVELOPMENT OF A MODIFICATION.

                  4.2.1.   Any Member who desires the Company to construct a
                           Modification shall notify the other Members and the
                           Operator of the nature of the proposed Modification,
                           including such details as are then available, and
                           shall provide a detailed explanation of the reasons
                           why such Modification is being requested. Promptly,
                           but in no event later than one hundred fifty (150)
                           calendar days from the date requested to do so by
                           such Member, the Operator shall prepare and provide
                           to each Member a detailed description of the proposed
                           Modification and an estimate of the cost thereof,
                           appropriate rate information and the proposed
                           financing therefor.

                  4.2.2.   Within sixty (60) calendar days after the information
                           described in Section 4.2.1 has been received by each
                           Member, the Members shall vote on whether to proceed
                           with the development of such proposed Modification.
                           Upon the Supermajority Vote to proceed with the
                           development of such proposed Modification, the
                           Company shall proceed with such development,
                           including, but not limited to, the acquisition of
                           Additional Necessary Regulatory Approvals and the
                           Financing Commitment. A vote to proceed with the
                           development of a Modification shall be without
                           prejudice to the vote on whether the Company shall be
                           committed to construct such Modification under
                           section 4.3.2.

         4.3      COMMITMENT TO CONSTRUCT A MODIFICATION.

                  4.3.1.   Except upon approval by a Supermajority Vote, the
                           Company shall not incur material costs or obligations
                           with respect to a Modification or be obligated under
                           any Financing Commitment relating to a Modification
                           until (a) the Additional Necessary Regulatory
                           Approvals have been obtained and accepted, (b) such
                           Financing Commitment, if any, as may be required in
                           the opinion of the Members for such Modification has
                           been negotiated and is ready for acceptance by the
                           Company (with the Management Committee to decide
                           whether such Financing Commitment

                                       21
<PAGE>

                           utilizes a Financing Corporation), (c) if applicable,
                           the Service Agreements for the use of substantially
                           all of the capacity created by the Modification have
                           been executed by the Company and by one or more
                           Customers pursuant to the Company's FERC gas tariff,
                           (d) the Estimated Cost of Modification has been
                           determined and (e) the Management Committee has
                           approved a commitment to construct such Modification
                           as provided in Section 4.3.2.

                  4.3.2.   Immediately following the last to occur of the events
                           referred to in Section 4.3.1 (a), (b) and (d)
                           (provided that the condition that the event referred
                           to in Section 4.3.1 (a) shall have occurred may be
                           waived by the Supermajority Vote of the Members), and
                           if the Modification will create additional capacity,
                           the satisfaction or waiver by the applicable
                           Customers of all conditions set forth in the
                           precedent agreements for execution of the Service
                           Agreements by substantially all of the Customers that
                           will utilize the capacity to be created by the
                           Modification (other than the vote of the Members to
                           commit to construct the Modification), or at such
                           later time as agreed by the Members, the Members
                           shall vote on whether the Company shall be committed
                           to construct the Modification (which commitment to
                           construct shall constitute an acceptance of the
                           Financing Commitment, if any).

                  4.3.3.   If the proposal to construct the Modification
                           receives Supermajority approval by the Members, the
                           costs of such Modification and related Capital
                           Contribution requirements shall be divided among all
                           Members in proportion to their respective Sharing
                           Ratios.

                  4.3.4.   After the Members vote to commit the Company to
                           construct a Modification, except with the approval by
                           a Supermajority Vote, the Company shall not incur any
                           material costs or obligations with respect to such
                           Modification until all conditions precedent to the
                           obtaining by the Company of funds pursuant to a
                           Financing Commitment (if any) relating to such
                           Modification have been satisfied or waived.

         4.4      GENERAL REPRESENTATIONS AND WARRANTIES.

                  Each Member hereby represents and warrants to the Company and
                  to each other Member that as of the date of its admission as a
                  Member:

                           (a)      if such Member is an organization, it is
                                    duly organized, validly existing, and in
                                    good standing under the law of its state of
                                    incorporation or organization and that it
                                    has full organizational power to execute and
                                    agree to this Agreement and to perform its
                                    obligations under this Agreement;

                                       22
<PAGE>

                           (b)      such Member is acquiring its Membership
                                    Interest for such Member's own account as an
                                    investment and without an intent to
                                    distribute the interest,

                           (c)      such Member acknowledges that such
                                    Membership Interests have not been
                                    registered under the Securities Act of 1933
                                    or any state securities laws and may not be
                                    resold or transferred by the Member without
                                    appropriate registration or the availability
                                    of an exemption from such requirements;

                           (d)      such Member, by itself or together with its
                                    advisors, is experienced in making
                                    investments comparable to its investment in
                                    the Company and is capable of judging for
                                    itself the risks inherent in such
                                    investment;

                           (e)      such Member has the financial capacity to
                                    hold its investment in the Company for an
                                    indefinite period of time and to meet its
                                    obligations to make Capital Contributions
                                    under this Agreement, and acknowledges that
                                    the disposition of such investment is
                                    restricted both pursuant to federal and
                                    state securities laws and pursuant to the
                                    terms of this Agreement;

                           (f)      such Member acknowledges that it has
                                    received access to all information that it
                                    deems necessary in order to make its
                                    decision to invest in the Company;

                           (g)      this Agreement has been duly executed and
                                    delivered by it and constitutes its valid
                                    and binding obligation, enforceable in
                                    accordance with its terms;

                           (h)      neither the execution and delivery of this
                                    Agreement nor the consummation of the
                                    transactions contemplated hereby nor
                                    compliance by it with any provisions hereof
                                    (1) conflicts with, or results in a breach
                                    or contravention of, or in a default or the
                                    creation of any lien under, any of the
                                    terms, conditions or provisions of any note,
                                    bond, mortgage, indenture, license,
                                    agreement, or other instrument or obligation
                                    to which it is a party or by which it or its
                                    properties are bound, or (2) violates any
                                    law, order, writ, injunction or decree
                                    applicable to it or any of its properties;

                           (i)      except for the Necessary Regulatory
                                    Approvals, no consent, approval or other
                                    action by any court, governmental authority
                                    or third party is required in connection
                                    with its execution, delivery and performance
                                    of this Agreement;

                           (j)      as to Piedmont Greenbrier, there are no
                                    lawsuits or contested administrative
                                    proceedings against Piedmont Greenbrier that

                                       23
<PAGE>

                                    would have a material adverse affect on
                                    Piedmont Greenbrier' s ability to perform
                                    its obligations as a member under this
                                    Agreement;

                           (k)      as to Dominion Greenbrier, there are no
                                    lawsuits or contested administrative
                                    proceedings against Dominion Greenbrier that
                                    would have a material adverse affect on
                                    Dominion Greenbrier's ability to perform its
                                    obligations as a member under this
                                    Agreement.

         4.5      REGULATORY STATUS.

                  Each Member acknowledges that the Company will be a "natural
                  gas company" under the Natural Gas Act and that the Company
                  will be subject to all applicable laws, rules, regulations and
                  orders of any regulatory authority having jurisdiction.

         4.6      [INTENTIONALLY OMITTED]

         4.7      GOVERNMENTAL APPLICATIONS.

                  Each Member agrees to support the Company in securing the
                  Necessary Regulatory Approvals, including, without limitation,
                  preparing, filing and prosecuting the FERC Application.

         4.8      INFORMATION.

                  4.8.1.   In addition to the other rights specifically set
                           forth in this Agreement, each Member is entitled to
                           all information to which that Member is entitled to
                           have access pursuant to Section 18-305 of the Act
                           under the circumstances and subject to the conditions
                           therein stated. The Members agree, however, that the
                           Management Committee from time to time may determine,
                           due to contractual obligations, business concerns, or
                           other considerations, that certain information
                           regarding the business, affairs, properties, and
                           financial condition of the Company should be kept
                           confidential and disclosed to a Member only with the
                           understanding that such information constitutes
                           Confidential Information under Section 4.8.2.

                  4.8.2.   Each Member acknowledges that, from time to time, it
                           may receive Confidential Information for or regarding
                           the Company or a Member the release of which may be
                           damaging to the Company, Persons with whom the
                           Company does business or to the Member. Each Member
                           will hold in strict confidence any Confidential
                           Information it receives and may not disclose such
                           Confidential Information to any Person other than
                           another Member, except for disclosures (a) compelled
                           by law (but the Member must notify the other Members
                           promptly of any request for that information, before
                           disclosing it, if practicable), (b) to advisers or
                           Managers of the Member or Persons to which that
                           Member's

                                       24
<PAGE>

                           Membership Interest may be Disposed as permitted by
                           this Agreement, but only if the recipients have
                           agreed to be bound by the provisions of this Section
                           4.8.2, or (c) of information that Member also has
                           received from a source independent of the Company or
                           a Member that the Member reasonably believes obtained
                           that information without breach of any obligation of
                           confidentiality. Each Member acknowledges that breach
                           of the provisions of this Section 4.8.2 may cause
                           irreparable injury to the Company for which monetary
                           damages are inadequate, difficult to compute, or
                           both. Accordingly, each Member agrees that provisions
                           of this Section 4.8.2 may be enforced by specific
                           performance.

                  4.8.3.   A Member that subsequently ceases to be a Member
                           shall promptly destroy (and provide a certificate of
                           destruction to the Company with respect to), or
                           return to the Company, all Confidential Information
                           in its possession.

         4.9      LIABILITY TO THIRD PARTIES.

                  No Member or Manager shall be liable for the debts,
                  obligations or liabilities of the Company by reason of being a
                  Member or Manager or both, and does not become so liable by
                  participating, in whatever capacity, in the management or
                  control of the business of the Company.

         4.10     WITHDRAWAL.

                  A Member does not have the right or power to unilaterally
                  withdraw from the Company.

         4.11     LACK OF AUTHORITY.

                  Except as otherwise specifically provided herein, no Member or
                  Manager has the authority or power to act for or on behalf of
                  the Company, to do any act that would be binding on the
                  Company, or to incur any expenditures on behalf of the
                  Company.

         4.12     REASONABLE AND NECESSARY EFFORTS.

                  Each Member shall devote such efforts as shall be reasonable
                  and necessary to develop and promote the business of the
                  Company, taking into account its respective Sharing Ratio,
                  resources and expertise.

         4.13     No PERSONAL GAIN TO MEMBERS.

                  The credit and the assets of the Company shall be used solely
                  for the benefit of the Company and shall not be used to
                  further the personal gain of any Member. No asset of the
                  Company shall be transferred or encumbered for, or in payment
                  of, any individual obligation of a Member.

                                       25
<PAGE>

5        CAPITAL CONTRIBUTIONS.

         5.1      PRE-EXECUTION DATE EXPENDITURES.

                  5.1.1.   Set forth on Appendix D are the amounts of
                           Pre-Execution Date Expenditures that have been
                           incurred with respect to each Member, all of which
                           are hereby approved.

                  5.1.2.   If any Member, or Affiliate thereof, has made
                           Pre-Execution Date Expenditures during the period
                           preceding the Execution Date that are not set forth
                           in Appendix D. such Member shall have the right to
                           request approval thereof by Supermajority Vote as
                           soon as practicable after the Execution Date (but not
                           later than ninety (90) calendar days after the
                           Execution Date).

                  5.1.3.   After all Pre-Execution Date Expenditures to be
                           considered under Section 5.1.2 have been approved or
                           disapproved by the Members, the applicable Members
                           shall, within fifteen (15) days after such approval
                           or disapproval, make cash Capital Contributions to
                           the Company pro rata in proportion to their Sharing
                           Ratios, in an amount equal to the Pre-Execution Date
                           Expenditures approved under Sections 5.1.1 or 5.1.2,
                           provided that to the extent one or more Member's
                           Pre-Execution Date Expenditures are treated as
                           Capital Contributions, no such Member shall be
                           required to make any such cash Capital Contributions
                           to the Company until such time as all other Members
                           have made cash Capital Contributions (or
                           Pre-Execution Date Expenditures that are treated as
                           Capital Contributions) to the Company that are
                           initially pro rata to their Sharing Ratios.

                  5.1.4.   The assets, if any, acquired by means of the
                           Pre-Execution Date Expenditures of the Members shall
                           be and are hereby contributed to the Company. All
                           applicable Members agree to execute and deliver any
                           and all assignments and conveyances as may be
                           necessary or appropriate to evidence such
                           contribution.

         5.2      REQUIRED CAPITAL CONTRIBUTIONS.

                  5.2.1.   (a) The Members hereby agree and obligate themselves
                           to the Phase I Capital Budget set forth on Appendix
                           E. On the first day of each month during each Fiscal
                           Year covered by the Phase I Capital Budget, each
                           Member shall make a Capital Contribution equal to the
                           sum of (x) its Sharing Ratio of the amount due under
                           the Phase I Capital Budget on such date, plus (y)
                           amounts as are incurred by the Company or the
                           Operator in implementing the actions identified in
                           the Phase I Capital Budget provided the sum of all
                           such additional amounts do not exceed by more than
                           ten percent (10%) the sum of the amounts budgeted
                           through such date in the Capital Budget. All amounts
                           received by the

                                       26
<PAGE>

                           Company pursuant to this Section 5.2.1 (a), whether
                           received prior to, on or after the first day of each
                           quarter, shall be credited to the respective Member's
                           Capital Account as of the first day of each quarter.

                           (b) If the Members approve the Phase II Capital
                           Budget pursuant to Section 4.1.1, then, on the first
                           day of each month during each Fiscal Year covered by
                           the Phase II Capital Budget, each Member shall make a
                           Capital Contribution equal to the sum of (x) its
                           Sharing Ratio of the amount due under the Phase II
                           Capital Budget on such date plus (y) amounts as are
                           incurred by the Company or the Operator in
                           implementing the actions identified in the Phase II
                           Capital Budget provided the sum of all such
                           additional amounts do not exceed by more than ten
                           percent (10%) the sum of the amounts budgeted through
                           such date in the Phase II Capital Budget. All amounts
                           received by the Company pursuant to this Section 5.2.
                           l(b), whether received prior to, on or after the
                           first day of each quarter, shall be credited to the
                           respective Member's Capital Account as of the first
                           day of each quarter.

                           (c) If the Members approve the Phase III Capital
                           Budget pursuant to Section 4.1.1, then, on the first
                           day of each month during each Fiscal Year covered by
                           the Phase III Capital Budget, each Member shall make
                           a Capital Contribution equal to the sum of (x) its
                           Sharing Ratio of the amount due under the Phase III
                           Capital Budget on such date plus (y) amounts as are
                           incurred by the Company or the Operator in
                           implementing the actions identified in the Phase III
                           Capital Budget provided the sum of all such
                           additional amounts do not exceed by more than ten
                           percent (10%) the sum of the amounts budgeted through
                           such date in the Phase III Capital Budget. All
                           amounts received by the Company pursuant to this
                           Section 5.2. l(c), whether received prior to, on or
                           after the first day of each quarter, shall be
                           credited to the respective Member's Capital Account
                           as of the first day of each quarter.

                           (d) With respect to any Capital Contributions not
                           provided for in Sections 5.2.1(a), (b) or (c), the
                           Members by Supermajority Vote shall issue or cause to
                           be issued a written request to each Member for the
                           making of Capital Contributions at such times and in
                           such amounts as the Members shall so approve. All
                           amounts received by the Company pursuant to this
                           Section 5.2, whether received prior to, on or after
                           the date specified in Section 5.2.2(d), shall be
                           credited to the respective Member's Capital Account
                           as of such specified date (and the Pre-Execution
                           Date Expenditures approved pursuant to Sections 5.1.1
                           and 5.1.2 shall be so credited as of the date
                           specified in Section 5.2.2(d)). All amounts received
                           from a Member after the date specified in Section
                           5.2.2(d) by the Company pursuant to this Section 5.2
                           shall be accompanied by interest on such overdue
                           amounts (and the default shall not be cured unless
                           such interest is also received by the Company), which
                           interest shall be payable to the Company and shall
                           accrue from

                                       27
<PAGE>

                           and after such specified date at the Default Rate.
                           Any such interest paid with respect to a Capital
                           Contribution shall be credited to the respective
                           Capital Accounts of the Members, on a pro rata basis
                           in proportion to their respective Sharing Ratios as
                           of the date such payment is made to the Company after
                           giving effect to the payment of that Capital
                           Contribution with respect to which such interest
                           accrued.

                  5.2.2.   Each written request issued pursuant to Section
                           5.2.l(d) shall include the following information:

                           (a)      The total amount of Capital Contributions
                                    requested from all Members;

                           (b)      The amount of Capital Contribution requested
                                    from the Member to whom the request is
                                    addressed, such amount to be in accordance
                                    with the Sharing Ratio of such Member;

                           (c)      The purpose for which the funds are to be
                                    applied in such reasonable detail as the
                                    Management Committee shall direct;

                           (d)      The date on which payments of the Capital
                                    Contribution shall be made (which date shall
                                    not be less than thirty (30) calendar days
                                    following the date the request is given,
                                    unless an earlier date is approved by the
                                    Members) and the method of payment, provided
                                    that such date and method shall be the same
                                    for each of the Members; and

                           (e)      Evidence that the Members have approved the
                                    request in accordance with Section 5.2.1(d).

         5.3      FAILURE OF A MEMBER TO MAKE REQUIRED CAPITAL CONTRIBUTIONS.

                  If there are any Members (collectively, the "Capital
                  Defaulting Members") who fail to make any required Capital
                  Contribution to the Company when due (including without
                  limitation any Loan in lieu of a Capital Contribution as
                  determined by the Management Committee), the Company, the
                  Operator or any Member who has made all of its respective
                  Capital Contributions when due (a "Capital Non-Defaulting
                  Member") shall be entitled to give written notice of default
                  to the Capital Defaulting Members, with a copy to all Capital
                  Non-Defaulting Members. If there are any Capital Defaulting
                  Members who do not pay all amounts due within ten (10)
                  calendar days after such notice is given, the Operator (who
                  shall be deemed to have authority from the Management
                  Committee), if the Operator's Affiliate is not the Capital
                  Defaulting Member, or any Capital Non-Defaulting Member, if
                  the Operator's Affiliate is the Capital Defaulting Member,
                  shall be entitled to take any of the following actions
                  (separately or in combination, to the extent that combination
                  of actions is not inconsistent):

                                       28
<PAGE>

                  5.3.1.   Cause the Company to apply any distributions
                           otherwise payable to the Capital Defaulting Members
                           hereunder to the payment of unpaid Capital
                           Contributions, plus interest thereon at the Default
                           Rate;

                  5.3.2.   Transfer any and all voting and approval rights of
                           the Capital Defaulting Members to the Capital
                           Non-Defaulting Members in proportion to the
                           respective Sharing Ratios of the Capital
                           Non-Defaulting Members.

                  5.3.3.   With the approval of Members representing a majority
                           of the Sharing Ratios of the Capital Non-Defaulting
                           Members, cause the Capital Non-Defaulting Members to
                           make aggregate Loans to the Company in the amount of
                           such required and unpaid Capital Contributions in
                           proportion to the respective Sharing Ratios of the
                           Capital Non-Defaulting Members. In such event, (a)
                           such Loans shall accrue interest at the Default Rate
                           from the date of the Loans; (b) repayment of the
                           Loans to the Capital Non-Defaulting Members shall
                           have priority over any other distributions to be made
                           hereunder; and (c) the amount of interest paid by the
                           Company for any such Loans shall be deducted from any
                           distribution otherwise owed to the Capital Defaulting
                           Members. Upon the making of any such Loans to the
                           Company, the Company shall be deemed to have
                           simultaneously made loans in the same aggregate
                           amount and at the same interest rate to the Capital
                           Defaulting Members, and such loans by the Company
                           shall be due and payable upon demand by the Operator;

                  5.3.4.   With the approval of Members representing a majority
                           of the Sharing Ratios of the Capital Non-Defaulting
                           Members, cause the Capital Non-Defaulting Members to
                           Contribute to the Company the required and unpaid
                           portion of the Capital Contributions due from the
                           Capital Defaulting Members. In such case the Sharing
                           Ratios of the Capital Defaulting Members shall be
                           reduced, as to each Capital Defaulting Member, by the
                           percentage equivalent of a fraction, the numerator of
                           which is twice the amount of the required and unpaid
                           Capital Contribution due from such Capital Defaulting
                           Member, and the denominator of which is the sum of
                           all previous Capital Contributions made by such
                           Capital Defaulting Member. The Sharing Ratios of the
                           Capital Non-Defaulting Members shall be
                           proportionately increased, provided such reduction
                           and increase do not violate any law or regulatory
                           requirement. The Members shall be sent a revised
                           Appendix B reflecting the adjusted Sharing Ratios;

                  5.3.5.   With the approval of a majority of the Capital
                           Non-Defaulting Members, upon written notice (a
                           "Purchase Notice") to any Capital Defaulting Member,
                           which notice may be given at any time before the
                           default is fully cured by such Capital Defaulting
                           Member or any Loans are made in accordance with
                           Section 5.3.3, purchase the entire Membership
                           Interest of such Capital Defaulting Member in
                           proportion to the respective Sharing Ratios of the
                           Capital Non-Defaulting Members. The purchase

                                       29
<PAGE>

                           price shall be equal to seventy five percent (75%) of
                           the Capital Account of such Capital Defaulting Member
                           as of the date of such default. If such purchase
                           right is exercised, the closing shall take place on
                           the date specified by the Capital Non-Defaulting
                           Members, which date shall be not sooner than fifteen
                           (15) calendar days and not later than thirty (30)
                           calendar days after the date the Purchase Notice is
                           given. At such closing, the purchase price shall be
                           payable in cash. The Members shall be sent a revised
                           Appendix B reflecting the adjusted Sharing Ratios; or

                  5.3.6.   Sue to enforce the obligations of the Capital
                           Defaulting Members to pay the required and unpaid
                           portion of their Capital Contributions, together with
                           interest thereon at the Default Rate.

         5.4      LOANS.

                  5.4.1.   At any time after the Capital Contributions referred
                           to in Section 5.1.3 have been made that the Members
                           determine that the Company needs funds, rather than
                           calling for Capital Contributions, the Members may
                           issue or cause to be issued a written request to each
                           Member for the making of Loans or advances to the
                           Company at such times and in such amounts as the
                           Members shall approve by a Supermajority Vote,
                           provided that the Members shall not call for Loans or
                           advances rather than Capital Contributions if doing
                           so would breach any Financing Commitment or other
                           agreement of the Company. All amounts received from a
                           Member after the date specified in Section 5.4.2(d)
                           by the Company pursuant to this Section 5.4 shall be
                           accompanied by interest on such overdue amounts (and
                           the default shall not be cured unless such interest
                           is also received by the Company), which interest
                           shall be payable to the Company and shall accrue from
                           and after such specified date at the Default Rate.
                           Any such interest paid shall be credited to the
                           respective Capital Accounts of all the Members, on a
                           pro rata basis in proportion to their respective
                           Sharing Ratios as of the date such payment is made to
                           the Company, but shall not be considered part of the
                           principal of the loan.

                  5.4.2.   Each written request issued pursuant to Section 5.4.1
                           shall include the following information:

                           (a)      The total amount of Loans or advances
                                    requested from all Members;

                           (b)      The amount of the Loans or advances
                                    requested from the Member to whom the
                                    request is addressed, such amount to be in
                                    accordance with the Sharing Ratio of such
                                    Member;

                           (c)      The purpose for which the funds are to be
                                    applied in such reasonable detail as the
                                    Members shall direct;

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<PAGE>

                           (d)      The date on which the Loans or advances to
                                    the Company shall be made (which date shall
                                    not be less than thirty (30) calendar days
                                    following the date the request is given,
                                    unless a sooner date is approved by the
                                    Members) and the method of payment, provided
                                    that such date and method shall be the same
                                    for each of the Members;

                           (e)      All terms relating to such Loans, including
                                    the terms of repayment, provided that such
                                    terms shall be the same for each of the
                                    Members; and

                           (f)      Evidence that the Members have approved the
                                    request in accordance with Section 5.4.1.

         5.5      VOLUNTARY CONTRIBUTIONS.

                  No Member shall be required or permitted to make any Capital
                  Contributions or Loans to the Company except pursuant to this
                  Section 5.

         5.6      RETURN OF CONTRIBUTIONS.

                  A Member is not entitled to the return of any part of its
                  Capital Contributions or to be paid interest in respect of
                  either its Capital Account or its Capital Contributions. An
                  unreturned Capital Contribution is not a liability of the
                  Company or of any Member. A Member is not required to
                  contribute or to lend any cash or property to the Company to
                  enable the Company to return a Member's Capital Contributions.

         5.7      CAPITAL ACCOUNTS.

                  A Capital Account shall be established and maintained for each
                  Member in accordance with the Code and the Treasury
                  Regulations. A Member that has more than one Membership
                  Interest shall have a single Capital Account that reflects all
                  of its Membership Interests, regardless of any class of
                  Membership Interests owned by that Member and regardless of
                  the time or manner in which those Membership Interests were
                  acquired.

6        ALLOCATIONS AND DISTRIBUTIONS.

         6.1      ALLOCATIONS OF PROFITS AND LOSSES.

                  6.1.1.   IN GENERAL. Profits and Losses shall be allocated
                           among the Members ratably in proportion to their
                           respective Sharing Ratios.

                  6.1.2.   SPECIAL RULES. Notwithstanding the general allocation
                           rules set forth in Sections 6.1.1, the following
                           special allocation rules shall apply under the
                           circumstances described:

                                       31
<PAGE>

                           (a)      LIMITATION ON LOSS ALLOCATIONS. The Losses
                                    allocated to any Member pursuant to Section
                                    6.1.1 with respect to any Fiscal Year shall
                                    not exceed the maximum amount of Losses that
                                    can be so allocated without causing such
                                    Member to have an Adjusted Capital Account
                                    Deficit at the end of such Fiscal Year. All
                                    Losses in excess of the limitation set forth
                                    immediately above shall be allocated (i)
                                    first, to those Members who will not be
                                    subject to this limitation, in the ratio
                                    that their Sharing Ratio bear to each other,
                                    and (ii) second, any remaining amount to the
                                    Members in the manner required by the Code
                                    and Treasury Regulations.

                           (b)      QUALIFIED INCOME OFFSET If in any Fiscal
                                    Year a Member unexpectedly receives an
                                    adjustment, allocation or distribution
                                    described in Treasury Regulations Section
                                    1.704-l(b)(2)(ii)(d)(4), (5), or (6), and
                                    such adjustment, allocation or distribution
                                    causes or increases an Adjusted Capital
                                    Account Deficit for such Member, then,
                                    before any other allocations are made under
                                    this Agreement or otherwise, such Member
                                    shall be allocated items of income and gain
                                    (consisting of a pro rata portion of each
                                    item of Company income, including gross
                                    income and gain) in an amount and manner
                                    sufficient to eliminate such Adjusted
                                    Capital Account Deficit as quickly as
                                    possible, provided that an allocation
                                    pursuant to this Section 6.1.2(b) shall be
                                    made if and only to the extent that the
                                    Member has an Adjusted Capital Account
                                    Deficit after all other allocations provided
                                    in this Section 6.1 have been tentatively
                                    made as if this Section 6.1.2(b) were not in
                                    this Agreement.

                           (c)      COMPANY MINIMUM GAIN CHARGEBACK. If there is
                                    a net decrease in Company Minimum Gain
                                    during any Fiscal Year, then, except as
                                    provided in Treasury Regulations Section
                                    1.704-2(f), each Member shall be allocated
                                    items of income and gain for such Fiscal
                                    Year (and, if necessary, for subsequent
                                    Fiscal Years) in proportion to, and to the
                                    extent of, such Member's share of the net
                                    decrease in Company Minimum Gain during such
                                    Fiscal Year as determined in accordance with
                                    Section 1.704-2(g). This Section 6.1.2(c) is
                                    intended to comply with the minimum gain
                                    chargeback requirement in Treasury
                                    Regulations Section 1.704-2(f) and shall be
                                    applied and interpreted in accordance with
                                    such Treasury Regulations.

                           (d)      MEMBER NONRECOURSE DEBT MINIMUM GAIN
                                    CHARGEBACK. If there is a net decrease in
                                    Member Nonrecourse Debt Minimum Gain during
                                    any Fiscal Year, then, except as provided in
                                    Treasury Regulations Section 1.704-2(i)(4),
                                    each Member shall be allocated items of
                                    income and gain for such Fiscal Year (and,
                                    if necessary, for subsequent Fiscal Years)
                                    in proportion to, and to the extent of, such
                                    Member's share of the net decrease in Member
                                    Nonrecourse

                                       32
<PAGE>

                                    Debt Minimum Gain during such Fiscal Year.
                                    This Section 6.1.2(d) is intended to comply
                                    with the minimum gain chargeback requirement
                                    in Treasury Regulations Section
                                    1.704-2(i)(4) and shall be applied and
                                    interpreted in accordance with such Treasury
                                    Regulations.

                           (e)      MEMBER NONRECOURSE DEDUCTIONS. Member
                                    Nonrecourse Deductions shall be allocated
                                    among the Members in accordance with the
                                    ratios in which the Members share the
                                    economic risk of loss for the Member
                                    Nonrecourse Debt that gave rise to those
                                    deductions. This allocation is intended to
                                    comply with the requirements of Treasury
                                    Regulations Section 1.704-2(i) and shall be
                                    interpreted and applied consistent
                                    therewith.

                           (f)      COMPANY NONRECOURSE DEDUCTIONS. Nonrecourse
                                    deductions that are not related to Member
                                    Nonrecourse Debt shall be allocated to the
                                    Members in proportion to their Sharing
                                    Ratios.

                           (g)      CURATIVE ALLOCATIONS. Any allocations of
                                    items of income, gain, or loss pursuant to
                                    Sections 6.1.2(a)-(f) hereof shall be taken
                                    into account in computing subsequent
                                    allocations pursuant to this Section 6, so
                                    that the net amount of any items so
                                    allocated and the income, losses, and other
                                    items allocated to each Member pursuant to
                                    this Section 6 shall, to the extent
                                    possible, be equal to the net amount that
                                    would have been allocated to each Member had
                                    no allocations ever been made pursuant to
                                    Sections 6.1.2(a)-(f).

                           (h)      CHANGE IN TREASURY REGULATIONS. If the
                                    Treasury Regulations incorporating the
                                    allocations set forth in Sections
                                    6.1.2(a)-(g) (the "Regulatory Allocations")
                                    are hereafter changed or if new Treasury
                                    Regulations are hereafter adopted, and such
                                    changed or new Treasury Regulations, in the
                                    opinion of tax counsel for the Company, make
                                    it necessary to revise the Regulatory
                                    Allocations or provide further special
                                    allocation rules in order to avoid a
                                    significant risk that a material portion of
                                    any allocation set forth in this Section 6
                                    would not be respected for federal income
                                    tax purposes, the Members shall make such
                                    reasonable amendments to this Agreement as,
                                    in the opinion of such counsel, are
                                    necessary or desirable, taking into account
                                    the interests of the Members as a whole and
                                    all other relevant factors, to avoid or
                                    reduce significantly such risk to the extent
                                    possible without materially changing the
                                    amounts allocable and distributable to any
                                    Member pursuant to this Agreement.

                           (i)      CHANGE IN MEMBERS' INTERESTS. In the event
                                    of a Disposition of a Membership Interest or
                                    a change in a Member's Sharing Ratio during
                                    any Fiscal Year, allocations among the
                                    Members shall be

                                       33
<PAGE>

                                    made in accordance with their Sharing Ratios
                                    from time to time during such Fiscal Year in
                                    accordance with Code Section 706, provided
                                    that in the event of a sale or other
                                    Disposition of a Member's entire Membership
                                    Interest, allocations of income, gain, loss,
                                    deductions and credits with respect to such
                                    Member shall be computed precisely by an
                                    interim closing of the Company's books as of
                                    the date of such sale or other Disposition
                                    in accordance with Treasury Regulations
                                    Section 1.706-l(c)(2)(ii).

                           (j)      EXCESS NONRECOURSE LIABILITIES. For purposes
                                    of calculating Members' shares of "excess
                                    nonrecourse liabilities" of the Company
                                    (within the meaning of Treasury Regulations
                                    Section 1.752-3), the Members intend that
                                    they be considered as sharing profits of the
                                    Company in proportion to their respective
                                    Sharing Ratios.

         6.2      TAX ALLOCATIONS.

                  6.2.1.   IN GENERAL. Except as set forth in Section 6.2.2,
                           allocations for tax purposes of items of income,
                           gain, loss, deduction, and credits, shall be made in
                           the same manner as the applicable allocation of
                           Profit or Loss set forth in Section 6.1. Allocations
                           pursuant to this Section 6.2 are solely for purposes
                           of federal, state and local income taxes and shall
                           not affect, or in any way be taken into account in
                           computing, any Member's Capital Account or share of
                           Profits, Losses, other items or other distributions
                           pursuant to any provision of this Agreement.

                  6.2.2    SPECIAL RULES

                           (a)      ELIMINATION OF BOOK/TAX DISPARITIES. In
                                    determining a Member's allocable share of
                                    Company taxable income or tax loss, the
                                    Member's allocable share of each item of
                                    income, gain, loss and deduction shall be
                                    properly adjusted to reflect the difference
                                    between such Member's share of the adjusted
                                    tax basis and the Gross Asset Value of each
                                    of the Company assets used in determining
                                    such item. With respect to depreciation, for
                                    example, in determining the taxable income
                                    or tax loss allocable to a Member, Profits
                                    and Losses allocable to that Member shall be
                                    adjusted by eliminating Depreciation
                                    allocable to that Member and substituting
                                    therefor tax depreciation, amortization or
                                    other cost recovery deduction allocable to
                                    that Member determined by reference to that
                                    Member's share of the tax basis of Company
                                    assets. This provision is intended to comply
                                    with the requirements of Code Section 704(c)
                                    and Treasury Regulations Section
                                    1.704-l(b)(2)(iv)(f)(4) and shall be
                                    interpreted in conformity therewith. Any
                                    elections or other decisions relating to
                                    such tax allocations shall be made by the
                                    Management Committee.

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<PAGE>

                           (b)      TAX CREDITS. Any tax credits shall be
                                    allocated among the Members in accordance
                                    with Treasury Regulations Section
                                    1.704-l(b)(4)(ii), unless the applicable
                                    Code provision shall otherwise require.

                  6.2.3.   CONFORMITY OF REPORTING. The Members are aware of the
                           income tax consequences of the allocations made by
                           this Section 6.2 and hereby agree to be bound by the
                           provisions of this Section 6.2 in reporting their
                           shares of Company profits, gains, income, losses,
                           deductions, credits and other items for income tax
                           purposes.

         6.3      WITHHOLDING.

                  The Company is authorized to withhold from distributions to a
                  Member, or with respect to allocations to a Member, and to pay
                  over to a federal, state or local government, any amounts
                  required to be withheld pursuant to the Code, or any
                  provisions of any other federal, state or local law. Any
                  amounts so withheld shall be treated as having been
                  distributed to such Member pursuant to this Section 6 for all
                  purposes of this Agreement, and shall be offset against the
                  current or next amounts otherwise distributable to such
                  Member.

         6.4      DISTRIBUTIONS.

                  From time to time (but at least once each calendar quarter)
                  the Managers shall determine in their reasonable judgment to
                  what extent (if any) the Company's cash on hand exceeds its
                  current and anticipated needs, including, without limitation,
                  for operating expenses, debt service, acquisitions, and a
                  reasonable contingency reserve. If such an excess exists, the
                  Managers, by majority vote, shall cause the Company to
                  distribute to the Members, in accordance with their Sharing
                  Ratios, an amount in cash equal to that excess, excluding,
                  however, any cash from revenues derived from the Company's
                  collection, through its rates and charges, of federal and
                  state income taxes, which shall be distributed (subject to the
                  terms of this Section 6.4) to all Members in accordance with
                  their Sharing Ratios.

                  6.4.1.   The Company shall also distribute, to the extent
                           funds are available, to each Member, with respect to
                           each Fiscal Year within seventy-five (75) days after
                           the end of such Fiscal Year, an amount of cash or
                           cash equivalents equal to (i) the amount of the
                           Company's federal taxable income allocated to such
                           Member for such Fiscal Year, multiplied by (ii) 35%
                           (the "Tax Distribution"); provided; however, that the
                           Tax Distribution for any Fiscal Year may be reduced
                           or eliminated on a pro rata basis among the Members
                           if and to the extent determined by all of the
                           Members.

                  6.4.2.   From time to time the Members also may cause property
                           of the Company other than cash to be distributed to
                           the Members, which distribution must

                                       35
<PAGE>

                           be made in accordance with their Sharing Ratios and
                           may be made subject to existing liabilities and
                           obligations.

7.       MANAGEMENT.

         7.1      VOTING BY MEMBERS AND MANAGEMENT COMMITTEE.

                  7.1.1.   Except as otherwise provided in this Agreement, the
                           vote of the Members necessary for a matter to be
                           approved by Members shall be a majority of the total
                           Sharing Ratios of the Members. If the requisite
                           majority of Sharing Ratios is not voted in favor of a
                           matter being voted on, then the matter shall be
                           deemed to be denied. Furthermore, unless otherwise
                           provided herein, if the matter being voted on
                           provides for more than two alternatives and no
                           alternative receives the requisite majority approval
                           then no alternative shall be selected.

                  7.1.2.   The Members shall manage the Company's business
                           through a management committee (the "Management
                           Committee") in accordance with this Agreement. The
                           acts of the Management Committee in accordance with
                           its authority shall be binding upon all of the
                           Members and the Company. The Management Committee
                           shall consist of one individual manager appointed by
                           each Member (collectively, the "Managers"). Each
                           Member shall also designate an alternate for its
                           Manager. Each alternate shall have all of the powers
                           of the regular Manager in the regular Manager's
                           absence, declination or inability to serve from time
                           to time. On all matters decided by the Management
                           Committee, each Manager or its alternate shall have
                           voting power equal to the Sharing Ratio of the Member
                           represented by such Manager. Whenever in this
                           Agreement action by the Members as a group is
                           contemplated, action by the Management Committee
                           shall constitute the action of the Members as a
                           group.

                  7.1.3.   Subject to the other terms of this Agreement, the
                           Management Committee, by majority vote of the
                           Managers, may make all decisions and take all actions
                           for the Company not otherwise provided for in this
                           Agreement or in the CO&M Agreement, including,
                           without limitation, the following:

                           (a)      Delegating management authority to the
                                    Operator under the CO&M Agreement; provided,
                                    however, that the Management Committee may
                                    not delegate to the Operator the right to
                                    take any action that would require a
                                    Supermajority Vote under Section 7.1.4
                                    unless such action has been approved by a
                                    Supermajority Vote or is provided for in the
                                    CO&M Agreement;

                           (b)      Entering into, making and performing
                                    contracts, agreements, and other
                                    undertakings binding the Company that may be
                                    necessary,

                                       36
<PAGE>

                                    appropriate, or advisable in furtherance of
                                    the purposes of the Company and making all
                                    decisions and waivers thereunder;

                           (c)      Opening and maintaining bank and investment
                                    accounts and arrangements, drawing checks
                                    and other orders for the payment of money,
                                    and designating individuals with authority
                                    to sign or give instructions with respect to
                                    those accounts and arrangements;

                           (d)      Maintaining the assets of the Company in
                                    good order;

                           (e)      Collecting sums due the Company;

                           (f)      To the extent that funds of the Company are
                                    available therefor, paying debts and
                                    obligations of the Company;

                           (g)      Subject to the provisions of Section
                                    7.1.4(t), acquiring, utilizing for Company
                                    purposes, and disposing of any asset of the
                                    Company;

                           (h)      Selecting, removing and changing the
                                    authority and responsibility of accountants,
                                    contractors and other advisers and
                                    consultants;

                           (i)      Obtaining insurance for the Company;

                           (j)      Determining distributions of Company cash
                                    and other property as provided in Section
                                    6.4;

                           (k)      Establishing a seal for the Company;

                           (1)      Appointing and removing any officers of the
                                    Company and establishing the authority and
                                    duties thereof;

                           (m)      Investing funds of the Company;

                           (n)      Determining the accounting methods and
                                    conventions to be used in preparation of the
                                    Company's financial statements (consistent
                                    with GAAP) and tax returns and making any
                                    and all elections under any applicable tax
                                    laws (consistent with the requirements of
                                    this Agreement);

                           (o)      Obtaining all necessary permits and
                                    governmental approvals regarding the
                                    business or operations of the Company; and

                           (p)      Engaging in any other activity and
                                    performing and carrying out contracts of any
                                    kind which may be necessary or appropriate
                                    to conduct the Company's business and
                                    accomplish its purposes, as may be lawfully
                                    carried on or performed by a limited
                                    liability company under the laws of the
                                    State of Delaware and the laws of

                                       37
<PAGE>

                                    the states and municipalities in which the
                                    Company conducts business.

                  7.1.4.   Notwithstanding anything in Section 7.1.3 above, the
                           Management Committee may not cause the Company to do
                           any of the following without the Supermajority Vote
                           of the Members:

                           (a)      Filing the FERC Application or filing an
                                    application with FERC in connection with any
                                    Modification;

                           (b)      Approving a sale or abandonment of the
                                    Facilities;

                           (c)      Amending, modifying, changing or otherwise
                                    altering this Agreement or taking any action
                                    in contravention of this Agreement;

                           (d)      Electing to dissolve the Company;

                           (e)      Borrowing money or otherwise committing the
                                    credit of the Company for Company activities
                                    and voluntary prepayments or extensions of
                                    debt;

                           (f)      Approving any matter pursuant to Section
                                    3.3;

                           (g)      Approving any matter pursuant to Sections
                                    4.1;

                           (h)      Approving any matter pursuant to Section
                                    5.1.2;

                           (i)      Selecting, removing and changing lawyers
                                    under Section 7.1.3.(h);

                           (j)      Entering into, amending, modifying, or
                                    terminating any contract or commitment to
                                    acquire or transfer any asset not provided
                                    for in an approved Phase I or Phase II or
                                    Phase III Capital Budgets, the cost of which
                                    exceeds by more than ten percent (10%) the
                                    amount budgeted therefor;

                           (k)      Requesting that Loans (rather than Capital
                                    Contributions) be made to the Company
                                    pursuant to Section 5.4.1;

                           (1)      Delegating any authority to any committee,
                                    Manager or agent of the Company to take any
                                    action that requires more than a majority
                                    vote of Members under this Section 7.1.4;

                           (m)      Approving any Financing Commitment or
                                    causing any financing (whether or not
                                    pursuant to a Financing Commitment) to be
                                    issued on which there is recourse to a
                                    Person other than the Company;

                                       38
<PAGE>
                           (n)      Approving the Phase II or Phase III Capital
                                    Budgets or making any capital expenditures
                                    in excess of $200,000 in the aggregate in
                                    any calendar year that are not included in
                                    an approved Capital Budget;

                           (o)      Indemnifying any officer, employee, agent
                                    or any other Person except as specifically
                                    provided herein or in the CO&M Agreement;

                           (p)      Executing or otherwise entering into, or
                                    amending, modifying, or terminating, any
                                    employment agreement with an officer of the
                                    Company or similarly compensated person,
                                    the election or removal of any officer or
                                    the hiring or firing of other similarly
                                    compensated person with or without cause;

                           (q)      Setting or amending the compensation level
                                    of any officer of the Company or other
                                    similarly compensated person employed by
                                    the Company;

                           (r)      Revaluing any property or asset outside of
                                    the normal course of business;

                           (s)      Executing or otherwise entering into, or
                                    amending, modifying, or terminating (other
                                    than in accordance with, or pursuant to,
                                    the terms of such agreement), any agreement
                                    with a Member, an officer or employee of
                                    the Company, an Affiliate of a Member, or a
                                    person related by blood or marriage to an
                                    Officer or employee of the Company,
                                    involving aggregate consideration
                                    (including assumed actual and contingent
                                    liabilities) or fair market value or actual
                                    or contingent liability in excess of
                                    $100,000;

                           (t)      Transferring all or substantially all of
                                    the assets of the Company;

                           (u)      The filing of a petition as debtor in a
                                    United States Bankruptcy Court or taking
                                    any material affirmative act that would
                                    result in the Company's Bankruptcy;

                           (v)      Merging or consolidating the Company with
                                    or into any other Person;

                           (w)      Changing the name of the Company;

                           (x)      Changing the designation or the terms of
                                    Membership Interests which the Company has
                                    authorized or is authorized to issue;

                           (y)      Increasing the size of the Management
                                    Committee and changing the provisions of
                                    Section 7.1.2 regarding the composition of
                                    the Management Committee;

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<PAGE>

                           (z)      Authorizing any non-cash distribution,
                                    dividend or transfer of Company assets;

                           (aa)     Any agreement by the Tax Matters Partner to
                                    an extension of the statute of limitations
                                    for making assessments on behalf of the
                                    Company or changing any tax election
                                    provided for in Section 11.4;

                           (bb)     Voting at a meeting of the Management
                                    Committee on a matter not on the agenda for
                                    the meeting referred to in Section 7.3 or
                                    shortening the ten (10) day notice
                                    requirement of Section 7.3;

                           (cc)     Amending, modifying, changing or otherwise
                                    altering the CO&M Agreement; or

                           (dd)     Taking any other action as to which a
                                    Supermajority Vote is required under this
                                    Agreement.

         7.2      REMOVAL, RESIGNATION AND REPLACEMENT OF MANAGERS.

                  Each Member, in its sole discretion, may remove or replace
                  any Manager (including an alternate) appointed by it at any
                  time and for any reason. Each Manager shall hold office for
                  the term for which he is appointed and thereafter until his
                  successor shall have been appointed and qualified, or until
                  his earlier death, resignation or removal. A Manager may
                  resign at any time. Such resignation shall be made in writing
                  and shall take effect at the time specified therein, or if no
                  time be specified, at the time of its receipt by the
                  remaining Manager. The acceptance of a resignation shall not
                  be necessary to make it effective, unless expressly so
                  provided in the resignation. Upon the resignation of a
                  Manager, the Member appointing that Manager shall have the
                  right to appoint and designate another Manager. Managers need
                  not be residents of Delaware.

         7.3      MEETINGS BY THE MANAGEMENT COMMITTEE.

                  The Management Committee shall meet at least quarterly.
                  Special meetings of the Management Committee may be called
                  from time to time by any Manager or Member acting through its
                  Manager, and the Manager who does so shall be responsible for
                  the agenda and minutes of such meeting. Except as otherwise
                  provided in this Agreement, or as waived in writing by the
                  Managers, each Manager shall be given at least ten (10)
                  calendar days prior written notice of any meeting of the
                  Management Committee. Such notice shall contain the time and
                  place of such meeting, along with an agenda of items to be
                  discussed and/or voted on at such meeting. A quorum shall
                  consist of Managers or their alternates representing at least
                  two (2) Members and a majority of the Sharing Ratios of the
                  Members.

         7.4      ACTION BY WRITTEN CONSENT OR TELEPHONE CONFERENCE.

                                       40
<PAGE>

                  Any action permitted or required by the Act, the Certificate
                  of Formation or this Agreement to be taken at a meeting of
                  the Members or the Management Committee may be taken without
                  a meeting if a consent in writing, setting forth the action
                  to be taken is signed by all the Members or the Managers, as
                  the case may be. Such consent shall have the same force and
                  effect as a unanimous consent at a meeting and may be stated
                  as such in any document or instrument filed with the
                  Secretary of State of Delaware, and the execution of such
                  consent shall constitute attendance or presence in person at
                  a meeting of the Members or Management Committee, as the case
                  may be. Subject to the requirements of the Act, the
                  Certificate of Formation or this Agreement for notice of
                  meetings, unless otherwise restricted by the Certificate of
                  Formation, Members or the Management Committee, may
                  participate in and hold a meeting of the Members or
                  Management Committee, as the case may be, by means of a
                  conference telephone or similar communications equipment by
                  means of which all Persons participating in the meeting can
                  hear each other, and participation in such meeting shall
                  constitute attendance and presence at such meeting, except
                  where a Person participates in the meeting for the express
                  purpose of objecting to the transaction of any business on
                  the ground that the meeting is not lawfully called or
                  convened.

         7.5      COMPENSATION.

                  A Manager shall receive no compensation for services rendered
                  to the Company in that capacity. Officers and agents of the
                  Company shall receive such compensation as approved by the
                  Management Committee.

         7.6      OPERATING BUDGETS.

                  The Management Committee shall cause the Operator, under the
                  CO&M Agreement, to direct the preparation of an annual
                  operating budget and related operating plan, which shall
                  include, for each Fiscal Year, one and three year projections
                  showing (a) projected capital expenditures of the Company,
                  (b) projected working capital and reserves that will be
                  maintained or funded, (c) projected revenues, (d) projected
                  operating expenses broken down in reasonable detail
                  satisfactory to the Management Committee and the Members, (e)
                  projected general and administrative expenses of the Company,
                  and (f) projected capitalization and indebtedness of the
                  Company and the debt service payable thereon (the "Operating
                  Budget"). In the event that a subsequent Operating Budget is
                  not approved in its entirety, any approved expense line items
                  of such Operating Budget shall go in effect, all other
                  expense line items shall be deemed to be increased by the
                  lesser of the percentage that is agreed upon by the
                  Management Committee or three percent (3%) from the level
                  specified in the prior Operating Budget with the exception of
                  Capital Contributions which shall not automatically increase
                  and such prior Operating Budget, as so adjusted pursuant to
                  the terms of this sentence, shall be effective until the end
                  of the Fiscal Year to which it applies.

         7.7      FINANCING COMMITTEE.

                                       41
<PAGE>

                  Within 30 days after the execution of this Agreement, each
                  Member shall designate a representative to serve on the
                  Financing Committee. The Financing Committee shall arrange
                  for the Financing Commitment and present it to the Management
                  Committee for consideration. Within 30 days after the
                  presentation of the proposed Financing Commitment, the
                  Management Committee shall vote on whether to accept or
                  reject it. In the event the Members do not agree by a
                  Supermajority Vote to accept the Financing Commitment, the
                  Member(s) that voted for acceptance may purchase, in
                  proportion to their respective Sharing Ratios, the entire
                  Membership Interest(s) of the Member(s) who voted against
                  acceptance. The Members desiring to exercise such purchase
                  right shall so notify all of the other Members within ten
                  (10) calendar days after such vote. The aggregate price for
                  the Membership Interests to be purchased shall be paid in
                  cash at closing and, unless the selling and purchasing
                  Members otherwise agree, shall be the sum of the Capital
                  Account balances, on the date of such vote, of the Member(s)
                  who voted against acceptance, and such price shall be
                  allocated to the purchasing Member(s) in proportion to their
                  respective Sharing Ratios. Closing on such purchase shall
                  occur on the date and at the location mutually agreed by the
                  purchasing Member(s), but in no event more than twenty-one
                  (21) calendar days after such vote. The Sharing Ratios of the
                  Members shall be adjusted accordingly, and a revised Appendix
                  B shall be sent to the Members. If the Member(s) who voted
                  for acceptance do not purchase the entire Membership
                  Interest(s) of the Member(s) who voted against acceptance,
                  the Company shall be dissolved as soon as reasonably
                  practicable in accordance with Section 15, subject to any
                  necessary approvals from any Governmental Authority.

         7.8      CONFLICTS OF INTEREST.

                  Except as otherwise provided in this Agreement, each Member
                  at any time and from time to time may engage in and possess
                  interests in other business ventures of any and every type
                  and description, independently or with others, including
                  business ventures in competition with the Company, with no
                  obligation to offer to the Company or any other Member the
                  right to participate therein. The Company may transact
                  business with any Member or Affiliate thereof, provided the
                  terms of those transactions are no less favorable than those
                  the Company could obtain from unrelated third parties.

         7.9      MANAGEMENT OF VPSC.

                  Notwithstanding that Dominion Greenbrier is the sole
                  shareholder of VPSC, Dominion Greenbrier agrees that it shall
                  not cause or permit VPSC to take any actions except with the
                  approval of the Management Committee, and that the percentage
                  approval of the Management Committee required with respect to
                  any such actions shall be the percentage approval that would
                  be required under Section 7.1 hereof if the Company was
                  taking the action in question.

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<PAGE>

8.       [INTENTIONALLY OMITTED]

9.       OPERATION OF THE FACILITIES.

         9.1      OPERATOR.

                  The Company intends to enter into a CO&M Agreement with the
                  Operator in the form attached hereto as Appendix F. The
                  Members may, at any time, upon a Supermajority Vote, agree to
                  an amendment to the CO&M Agreement, provided that the
                  Operator concurs therewith. In the event that such CO&M
                  Agreement is terminated pursuant to the terms thereof or the
                  Operator ceases to serve as Operator in accordance with the
                  terms of the CO&M Agreement, Piedmont Greenbrier, if it is
                  still a Member, may designate its Affiliate the successor
                  Operator. If neither Dominion Greenbrier or its Affiliate,
                  nor Piedmont Greenbrier or its Affiliate is still a Member,
                  the Members may, upon a Supermajority Vote, appoint a
                  successor Operator. Any successor Operator selected pursuant
                  to this Agreement shall execute and be bound by an agreement
                  substantially in the form of the CO&M Agreement existing
                  immediately prior to such execution.

10.      INDEMNIFICATION.

         10.1     RIGHT TO INDEMNIFICATION.

                  Subject to the limitations and conditions as provided in
                  Section 10 of this Agreement, each person who was or is made
                  a party or is threatened to be made a party to or is involved
                  in any Proceeding, or any appeal in such a Proceeding or any
                  inquiry or investigation that could lead to such a
                  Proceeding, by reason of the fact that he or she, or a Person
                  of whom he or she is legal Manager, is or was a Manager of
                  the Company or while Manager of the Company is or was serving
                  at the request of the Company as a Manager, director,
                  officer, partner, venturer, proprietor, trustee, employee,
                  agent, or similar functionary of another foreign or domestic
                  limited liability company, corporation, partnership, joint
                  venture, sole proprietorship, trust, employee benefit plan or
                  other enterprise shall be indemnified by the Company to the
                  fullest extent permitted by the Act, as the same exists or
                  may hereafter be amended (but, in the case of any such
                  amendment, only to the extent that such amendment permits the
                  Company to provide broader indemnification rights than said
                  law permitted the Company to provide prior to such amendment)
                  against judgments, penalties (including excise and similar
                  taxes and punitive damages), fines, settlements and
                  reasonable expenses (including, without limitation,
                  attorneys' fees) actually incurred by such Person in
                  connection with such Proceeding, and indemnification under
                  Section 10 of this Agreement shall continue as to a Person
                  who has ceased to serve to the capacity which initially
                  entitled such Person to indemnity hereunder. The rights
                  granted pursuant to Section 10 of this Agreement shall be
                  deemed contract rights and no amendment, modification or
                  repeal of Section 10 of this Agreement shall have the effect
                  of limiting or denying any such rights with respect to
                  actions taken

                                       43
<PAGE>

                  or Proceedings arising prior to any such amendment,
                  modification or repeal. It is expressly acknowledged that the
                  indemnification provided in Section 10 of this Agreement
                  could involve indemnification for negligence or under
                  theories of strict liability.

         10.2     ADVANCE PAYMENT.

                  The right to indemnification conferred in Section 10 of this
                  Agreement shall include the right to be paid or reimbursed by
                  the Company the reasonable expenses incurred by a Person of
                  the type entitled to be indemnified under Section 10.1 who
                  was, is or is threatened to be made a named defendant or
                  respondent in a Proceeding in advance of the final
                  disposition of the Proceeding and without any determination
                  as to the Person's ultimate entitlement to indemnification,
                  provided that the payment of such expenses incurred by any
                  such Person in advance of the final disposition of a
                  Proceeding, shall be made only upon delivery to the Company
                  of a written affirmation by such Manager of his or her good
                  faith belief that he or she has met the standard of conduct
                  necessary for indemnification under Section 10 of this
                  agreement and a written undertaking, by or on behalf of such
                  Person, to repay all amounts so advanced if it shall
                  ultimately be determined that such indemnified Person is not
                  entitled to be indemnified under Section 10 of this Agreement
                  or otherwise.

         10.3     INDEMNIFICATION OF AGENTS.

                  The Company, by adoption of a resolution of the Management
                  Committee, may indemnify and advance expenses to an agent of
                  the Company to the same extent and subject to the same
                  conditions under which it may indemnify and advance expenses
                  to Managers under Section 10 of this Agreement; and, the
                  Company may indemnify and advance expenses to Persons who are
                  not or were not Managers or agents of the Company but who are
                  or were serving at the request of the Company as a Manager,
                  director, officer, partner, venturer, proprietor, trustee,
                  employee, agent or similar functionary of another foreign or
                  domestic limited liability company, corporation, partnership,
                  joint venture, sole proprietorship, trust, employee benefit
                  plan or other enterprise against any liability asserted
                  against him or her and incurred by him or her in such a
                  capacity or arising out of his status as such a Person to the
                  same extent that it may indemnify and advance expenses to
                  Managers under Section 10 of this Agreement.

         10.4     INDEMNIFICATION BY THE MEMBERS.

                  To the fullest extent permitted by law, each Member shall
                  indemnify the Company, each Manager and each other Member and
                  hold them harmless from and against all losses, costs,
                  liabilities, damages, and expenses (including, without
                  limitation, costs of suit and attorney's fees) they may incur
                  on account of any breach by that Member of this Agreement.

         10.5     APPEARANCE AS A WITNESS.

                                       44
<PAGE>

                  Notwithstanding any other provisions of Section 10 of this
                  Agreement, upon approval by the Members, the Company shall
                  pay or reimburse expenses incurred by a Member in connection
                  with that Member or Member's Manager or other employee's
                  appearance as a witness or other participation in a
                  Proceeding at a time when that Member or Member's Manager is
                  not a named defendant or respondent in the Proceeding.

         10.6     NONEXCLUSIVITY OF RIGHTS.

                  The right to indemnification and the advancement and payment
                  of expenses conferred in Section 10 of this Agreement shall
                  not be exclusive of any other right which a Manager or other
                  Person indemnified pursuant to Section 10.3 may have or
                  hereafter acquired under any law (common or statutory),
                  provision of the Certificate of Formation or this agreement,
                  agreements, vote of Members or otherwise.

         10.7     INSURANCE.

                  Unless the Members otherwise determine by Supermajority Vote,
                  each Member shall maintain its own insurance for the benefit
                  of any Member or any Manager acting in their capacity as a
                  Member or Manager, and the Company shall not be required to
                  obtain any such insurance for the benefit of any Member or
                  any Manager acting in their capacity as a Member or Manager.

         10.8     MEMBER NOTIFICATION.

                  To the extent required by law, any indemnification of or
                  advance of expenses to a Manager in accordance with Section
                  10 of this Agreement shall be reported in writing to the
                  Members with or before the notice or waiver of notice of the
                  next Members' meeting or with or before the next submission
                  to Members of a consent to action without a meeting and, in
                  any case, within the 12 month period immediately following
                  the date of the indemnification or advance.

         10.9     SAVINGS CLAUSE.

                  If Section 10 of this Agreement or any portion hereof shall
                  be invalidated on any ground by any court of competent
                  jurisdiction, then the Company shall nevertheless indemnify
                  and hold harmless each Manager or any other Person
                  indemnified pursuant to Section 10 of this Agreement as to
                  costs, charges and expenses (including attorneys' fees),
                  judgments, fines and amounts paid in settlement with respect
                  to any action, suit or proceedings, whether civil, criminal,
                  administrative or investigative to the full extent permitted
                  by any applicable portion of Section 10 of this Agreement
                  that shall not have been invalidated and to the full extent
                  permitted by applicable law.

11.      TAXES.

         1l.l     TAX RETURNS.

                                       45
<PAGE>

                  Dominion Greenbrier is hereby designated as the Company's
                  "Tax Matters Partner" under Section 6231(a)(7) of the Code,
                  and such Member shall supervise the preparation and filing of
                  all tax and information returns which the Company may be
                  required to file and shall, on behalf of the Company, make
                  such tax elections and determinations as are reasonably
                  necessary, appropriate or desirable and consistent with
                  Section 11.4. Each Member shall furnish to the Company all
                  pertinent information that is in the possession of such
                  Member and is necessary to enable such returns to be prepared
                  and filed. Copies of the tax returns, together with any
                  schedules or other information that each Member may require
                  in connection with preparation of such Member's own tax
                  affairs, shall be furnished to the Members within ninety (90)
                  calendar days after the end of each Fiscal Year. The Company
                  shall bear the costs of preparing, filing and distributing
                  any tax returns.

         11.2     TAX STATUS.

                  Without a Supermajority Vote of the Members, neither the
                  Company nor anyone acting on its behalf shall be permitted to
                  make any filing or election that would terminate the
                  Company's classification as a partnership for federal income
                  tax purposes.

         11.3     TAX MATTERS.

                  The Tax Matters Partner shall provide each Member with prompt
                  notice of the initiation of all tax examinations or
                  proceedings, shall thereafter promptly provide copies of all
                  written information issued by or delivered to governmental
                  authorities in connection with any such examinations or
                  proceedings, and shall further provide each Member with
                  prompt, reasonable, and continuous opportunity to review and
                  provide comment with respect to the subject matter of each
                  such examination or proceedings. Each Member agrees to
                  cooperate fully with the Tax Matters Partner and to do or
                  refrain from doing any and all things reasonably required by
                  the Tax Matters Partner to conduct such proceedings. Subject
                  to the terms hereof, the Tax Matters Partner shall not have
                  the right to settle any audit or examination without first
                  consulting with and receiving approval of a majority of the
                  Members.

         11.4     TAX ELECTIONS.

                  The Company shall make the following elections on the
                  appropriate tax returns:

                           (a)      to adopt the calendar year as the Company's
                                    tax year for federal and state income tax
                                    purposes;

                           (b)      to adopt the accrual method of accounting
                                    and to keep the Company's books and records
                                    on the income-tax method; and

                           (c)      and any other elections not inconsistent
                                    with the above that the Management
                                    Committee may deem appropriate.

                                       46
<PAGE>

12.      BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS.

         12.1     MAINTENANCE OF BOOKS AND RECORDS.

                  The Company shall maintain the following accurate and
                  complete records at the Principal Office or at such other
                  locations as may be provided by the Members:

                           (a)      a current list of the full name and last
                                    known business address of each Member;

                           (b)      a copy of the Certificate of Formation and
                                    all amendments thereto;

                           (c)      copies of each of the Company's Federal,
                                    state and local tax returns and reports, as
                                    filed, for the last seven taxable periods;

                           (d)      copies of this Agreement, including all
                                    amendments thereto;

                           (e)      Company audited financial statements for
                                    the last seven Fiscal Years;

                           (f)      books and records of the Company; and

                           (g)      minutes of meetings of the Management
                                    Committee.

         12.2     ACCOUNTING BASIS.

                  Books and records of the Company shall be maintained on an
                  accrual accounting basis, and the Company's net profit or net
                  loss shall be determined on the basis of the Fiscal Year and
                  in accordance with GAAP as consistently applied.

         12.3     FINANCIAL REPORTS.

                  The Management Committee shall cause the following financial
                  statements to be prepared, in each case in accordance with
                  GAAP as consistently applied on a consolidated and
                  consolidating (i.e., by line of business) basis, but
                  unaudited except in the case of the reports called for in
                  Section 12.3(d), and shall cause to be delivered to each
                  Person who was a Member during the applicable period
                  described below:

                           (a)      a balance sheet and statement of income,
                                    statement of cash flow and Member's capital
                                    account as of the end of or for, as the
                                    case may be, each month, each within thirty
                                    (30) days after the end of each month;

                           (b)      (i) a balance sheet as of the end of each
                                    fiscal quarter of the Company; (ii) an
                                    income statement for such quarters and
                                    year-to-date; (iii) a statement of each
                                    Member's Capital Account as of the end of
                                    such quarters; and (iv) a statement of cash
                                    flows for such

                                       47
<PAGE>

                                    quarter and year-to-date (including
                                    sufficient information to permit the
                                    Members to calculate their tax accruals),
                                    each within forty-five (45) days after the
                                    end of such quarters (or more frequently if
                                    agreed by the Management Committee);

                           (c)      (i) a balance sheet as of the end of each
                                    Fiscal Year of the Company; (ii) an income
                                    statement for such fiscal years; (iii) a
                                    statement of each Member's Capital Account
                                    as of the end of such fiscal years; and
                                    (iv) a statement of cash flows for such
                                    fiscal years, each within ninety (90) days
                                    after the end of such fiscal years; and

                           (d)      audited annual financial statements
                                    prepared by a national CPA firm selected by
                                    the Management Committee within ten (10)
                                    days after such statements are issued to
                                    the Company but in no event later than
                                    ninety (90) days after the end of each
                                    Fiscal Year of the Company. These financial
                                    statements shall be accompanied by a report
                                    of the Certified Public Accountants
                                    certifying the statements and stating that
                                    (a) their examination was made in
                                    accordance with generally accepted auditing
                                    standards and, in their opinion, the
                                    financial statements present fairly the
                                    financial position, financial results of
                                    operations, and changes in Members' capital
                                    in accordance with GAAP and (b) in making
                                    the examination and reporting on the
                                    financial statements described above,
                                    nothing came to their attention that caused
                                    them to believe that (i) the income and
                                    revenues were not paid or credited in
                                    accordance with the financial and
                                    accounting provisions of their Agreement,
                                    (ii) the costs and expenses were not
                                    charged in accordance with the financial
                                    and accounting provisions of this
                                    Agreement, or (iii) the Members or any
                                    Member failed to comply in any material
                                    respect with the financial and accounting
                                    provisions of this Agreement, or if they do
                                    conclude that a Member so failed,
                                    specifying the nature and period of
                                    existence of the failure.

         12.4     FISCAL YEAR.

                  The fiscal year of the Company (the "Fiscal Year") shall end
                  on December 31 unless otherwise required by the Code or
                  approved by a Supermajority Vote of the Members.

         12.5     ACCOUNTS.

                  The Company shall maintain a record of each Member's Capital
                  Account in accordance with Section 5.7.

         12.6     OTHER NOTICES.

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<PAGE>

                  The Company shall notify each Member in writing of any of the
                  following immediately upon learning of the occurrence
                  thereof, describing the same and, if applicable, the steps
                  being taken by the Company with respect thereto:

                           (a)      the occurrence of the default by the
                                    Company under any material note, indenture,
                                    loan agreement, mortgage, lease, deed or
                                    other material similar agreement to which
                                    the Company is a party or by which it is
                                    bound;

                           (b)      the institution of any litigation,
                                    arbitration proceeding or governmental
                                    proceeding affecting the Company, whether
                                    or not considered to be covered by
                                    insurance, if the damages being sought in
                                    such litigation exceed $100,000 or, if not
                                    specified in such litigation, could
                                    reasonably be expected to exceed $100,000;
                                    and

                           (c)      the entry of any judgment or decree against
                                    the Company, if the amount of such judgment
                                    exceeds $10,000.

         12.7     GOVERNMENTAL REPORTS.

                  The Operator shall prepare and file, or cause to be prepared
                  and filed, all reports prescribed or required by the FERC or
                  any other Governmental Authority having jurisdiction over the
                  Company.

         12.8     COST OF PREPARING AND DISTRIBUTING REPORTS.

                  The Company shall bear the costs of (1) preparing and
                  distributing the tax returns described in Section 11.1 and
                  any reports required or permitted in Sections 12.3 and 12.7,
                  and (2) legal, accounting, and other fees and expenses
                  reasonably incurred by Dominion Greenbrier in the capacity as
                  Tax Matters Partner.

         12.9     ACCOUNTS.

                  The Members shall cause to be established and maintained one
                  or more separate bank and investment accounts and arrangement
                  for Company funds in the Company' name with financial
                  institutions and firms that the Members determine. The
                  Company's funds may not be commingled with the funds of any
                  Member.

13.      INSPECTION.

         13.1     INSPECTION OF FACILITIES AND RECORDS.

                  Subject to the provisions of Section 4.8, each Member shall
                  have the right at all reasonable times during usual business
                  hours upon providing reasonable notice to the Operator to
                  inspect the Facilities and other properties of the Company
                  and to audit, examine and make copies of the books of account
                  and other records of the company. Such right may be exercised
                  through any agent or employee of such

                                       49
<PAGE>

                  Member designated in writing by it or by an independent
                  public accountant, engineer, attorney or other consultant so
                  designated. The Member making the request shall bear all
                  reasonable costs and expenses incurred by such Member, the
                  Company or the Operator in connection with any inspection,
                  examination or audit made on such Member's behalf.

14.      BANKRUPTCY OF A MEMBER.

         14.1     BANKRUPTCY MEMBERS.

                  If any Member becomes a Bankrupt Member, that Person ceases
                  to be a Member of the Company. The successor in interest to
                  that Person holds that Person's Membership Interest in the
                  capacity of a non-Member with none of the rights and powers
                  of a Member, except the right to such Person's Profits,
                  Losses and Distributions.

15.      DISSOLUTION, LIQUIDATION, AND TERMINATION.

         15.1     DISSOLUTION.

                  The Company shall dissolve and its affairs shall be wound up
                  on the first to occur of the following:

                           (a)      the unanimous written consent of the
                                    Members;

                           (b)      the time, if any, specified in the
                                    Certificate of Formation;

                           (c)      under the circumstances specified in
                                    Section 4.1.1 and 4.1.2;

                           (d)      pursuant to Section 7.1.4(d); and

                           (e)      entry of a decree of judicial dissolution
                                    of the Company under Section 18-802 of the
                                    Act.

         15.2     LIQUIDATION AND TERMINATION.

                  On dissolution of the Company, the Members shall act as
                  liquidator or may appoint one or more Members as liquidator.
                  The liquidator shall proceed diligently to wind up the
                  affairs of the Company and make final distributions as
                  provided herein and in the Act. The costs of liquidation
                  shall be borne as a Company expense. Until final
                  distribution, the liquidator shall continue to operate the
                  Company properties with all of the power and authority of the
                  Members. The steps to be accomplished by the liquidator are
                  as follows:

                  (a)      as promptly as possible after dissolution and again
                           after final liquidation, the liquidator shall cause
                           a proper accounting to be made by the Certified
                           Public Accountants of the Company's assets,
                           liabilities, and operations

                                       50
<PAGE>

                           through the last day of the calendar month in which
                           the dissolution occurs or the final liquidation is
                           completed, as applicable;

                  (b)      Profit or Loss from the sale or distribution of
                           Company property incurred upon or during liquidation
                           and termination of the Company shall be allocated
                           among the Members as provided in Section 6 of this
                           Agreement; and

                  (c)      the liquidator shall distribute the Company's assets
                           in the following manner, subject to the Act:

                           (i)      First, to satisfy debts and obligations of
                                    the Company, including those owed to
                                    Members or their Affiliates;

                           (ii)     Second, to fund any reserves deemed
                                    appropriate by the Management Committee;
                                    and

                           (iii)    Third, to the Members in accordance with
                                    the positive balance in their Capital
                                    Accounts, after giving effect to all
                                    contributions, distributions and
                                    allocations for all periods.

         The distribution of cash and/or property to a Member in accordance
         with the provisions of this Section 15.2 constitutes a complete return
         to the Member of its Capital Contributions and a complete distribution
         to the Member of its Membership Interest and all the Company's
         property and constitutes a compromise to which all Members have
         consented. To the extent that a Member returns funds to the Company,
         it has no claim against any other Member for those funds.

         15.3     DEFICIT CAPITAL ACCOUNTS.

                  Notwithstanding anything to the contrary contained in this
                  Agreement, and notwithstanding any custom or rule of law to
                  the contrary, to the extent that the deficit, if any, in the
                  Capital Account of any Member results from or is attributable
                  to deductions and Losses of the Company (including non-cash
                  items such as depreciation), or distributions of money
                  pursuant to this Agreement to all Members in proportion to
                  their respective Sharing Ratios, upon dissolution of the
                  Company such deficit shall not be an asset of the Company and
                  such Members shall not be obligated to contribute such amount
                  to the Company to bring the balance of such Member's Capital
                  Account to zero.

         15.4     CERTIFICATE OF CANCELLATION.

         On completion of the distribution of Company assets as provided
         herein, the Company is terminated, and the Members (or such other
         Person or Persons as the Act may require or permit) shall cause to be
         filed a Certificate of Cancellation with the Delaware Secretary of
         State as required by Section 18-203 of the Act,

                                       51
<PAGE>

         cancel any other filing made pursuant to Sections 2.3 or 2.6, and take
         such other actions as may be necessary to terminate the Company.

16.      GENERAL PROVISIONS.

         16.1     OFFSET.

                  Whenever the Company is to pay any sum to any Member, any
                  amounts that Member owes the Company may be deducted from
                  that sum before payment.

         16.2     NOTICES.

                  Except as expressly set forth to the contrary in this
                  Agreement, all notices, requests, or consents provided for or
                  permitted to be given under this Agreement must be in
                  writing. Notices and other communications will be deemed to
                  have been given (a) on the date when delivered by hand or by
                  means of electronic transmission (and followed by electronic
                  confirmation of receipt), (b) on the date after the day when
                  deposited for delivery with a nationally recognized air
                  courier, or (c) on the third Business Day after being
                  deposited in the United States mail, postage prepaid return
                  receipt requested. All notices, requests, and consents to be
                  sent to a Member must be sent to or made at the addresses
                  given for that Member on the signature pages of this
                  Agreement, or such other address as that Member may specify
                  by notice to the other Members. Any notice, request, or
                  consent to the Company must be given to the Management
                  Committee at the address designated by the Company pursuant
                  to Section 2.4. Whenever any notice is required to be given
                  by law, the Certificate of Formation or this Agreement, a
                  written waiver thereof, signed by the Person entitled to
                  notice, whether before or after the time stated therein,
                  shall be deemed equivalent to the giving of such notice.

         16.3     ENTIRE AGREEMENT.

                  This Agreement constitutes the entire agreement of the
                  Members and their Affiliates relating to the Company and
                  supersedes all prior contracts or agreements with respect to
                  the Company, whether oral or written.

         16.4     EFFECT OF WAIVER OR CONSENT.

                  A waiver or consent, express or implied, to or of any breach
                  or default by any Person in the performance by that Person of
                  its obligations with respect to the Company is not a consent
                  or waiver to or of any other breach or default in the
                  performance by that Person of the same or any other
                  obligations of that Person with respect to the Company.
                  Failure on the part of a Person to complain of any act of any
                  Person or to declare any Person in default with respect to
                  the Company, irrespective of how long that failure continues,
                  does not constitute a waiver by that Person of its rights
                  with respect to that default until the applicable
                  statute-of-limitations period has run.

                                       52
<PAGE>

         16.5     AMENDMENT OR MODIFICATION.

                  This Agreement may be amended or modified from time to time
                  only by a written instrument adopted by at least a
                  Supermajority Vote of the Members, provided that no amendment
                  or modification having a material affect on the rights or
                  obligations of a Member shall be adopted without the written
                  consent of such Member. No amendment or modification of this
                  Agreement shall be deemed to exist as the result of any oral
                  statement, action, waiver or delay by a Member or group of
                  Members on any occasion(s).

         16.6     BINDING EFFECT.

                  Subject to the restrictions on Dispositions set forth in this
                  Agreement, this Agreement is binding on and inures to the
                  benefit of the Members and their respective heirs, legal
                  Managers, successors and assigns.

         16.7     SPECIFIC PERFORMANCE AND INJUNCTIVE RELIEF.

                  The parties acknowledge and agree that any breach or
                  violation of this Agreement has the potential to cause
                  irreparable and continuing harm that cannot be adequately
                  cured or remedied by monetary damages alone. In recognition
                  of the foregoing, the parties hereby agree that the remedies
                  for breach or violation of this Agreement shall include,
                  without limitation, the remedies of specific performance and
                  injunctive relief. In any action, suit or other proceeding
                  involving the enforcement of this Agreement, each party
                  hereby waives all rights to claim or assert that monetary
                  damages alone constitute a sufficient remedy, or that
                  specific performance or injunctive relief should be denied.
                  Each party agrees that the preceding waiver is irrevocable
                  and unconditional, and shall have the broadest possible scope
                  and application.

         16.8     GOVERNING LAW; SEVERABILITY.

                  THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
                  ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING
                  ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE
                  GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW
                  OF ANOTHER JURISDICTION. In the event of a direct conflict
                  between the provisions of this Agreement and (a) any
                  provision of the Certificate of Formation, or (b) any
                  mandatory provision of the Act, the application provision of
                  the Certificate of Formation or the Act shall control. If any
                  provision of this Agreement or the application thereof to any
                  Person or circumstance is held invalid or unenforceable to
                  any extent, the remainder of this Agreement and the
                  application of that provision to other Persons or
                  circumstances is not affected thereby and that provision
                  shall be enforced to the greatest extent permitted by law.

         16.9     NO THIRD PARTY BENEFICIARIES.

                                       53
<PAGE>

                  Nothing in this Agreement shall provide any benefit to any
                  third party or entitle any third party to any claim, cause of
                  action, remedy or right of any kind, it being the intent of
                  the Members that this Agreement shall not be construed as a
                  third party beneficiary contract.

         16.10    CREDITORS.

                  None of the provisions of this Agreement shall be for the
                  benefit of, or shall be enforceable by, any creditor of the
                  Company.

         16.11    FURTHER ASSURANCES.

                  In connection with this Agreement and the transactions
                  contemplated hereby, each Member shall execute and deliver
                  any additional documents and instruments and perform any
                  additional acts that may be necessary or appropriate to
                  effectuate and perform the provisions of this Agreement and
                  those transactions.

         16.12    NOTICE TO MEMBERS OF PROVISIONS OF THIS AGREEMENT.

                  By executing this Agreement, each Member acknowledges that it
                  has actual notice of (a) all of the provisions of this
                  Agreement, including, without limitation, the restrictions on
                  the transfer or Disposition of Membership Interests set forth
                  in Section 3 and (b) all of the provisions of the Certificate
                  of Formation. Each Member hereby agrees that this Agreement
                  constitutes adequate notice of all such provisions, and each
                  Member hereby waives any requirement that any further notice
                  thereunder be given.

         16.13    PRESS RELEASES.

                  Prior to the filing of the FERC Application, without first
                  obtaining the agreement of the other Members by Supermajority
                  Vote, no Member shall make any press release or public
                  statement about the Company, the business of the Company, or
                  the transactions or operations contemplated hereby, unless
                  legal counsel for such Member determines that such statement
                  is required by applicable law. At any time subsequent to the
                  filing of the FERC Application, no Member may make a press
                  release or public statement disclosing Confidential
                  Information without first obtaining the agreement of the
                  Company unless legal counsel for such Member determines that
                  such statement is required by applicable law, in which event,
                  such Member may issue a statement to the extent legally
                  required, provided, however, prior to the In-Service Date,
                  the disclosing Member shall give the other Members the
                  opportunity to review a copy of such statement and consult
                  with such Member prior to the release thereof.

         16.14    COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts
                  with the same effect as if all signing parties had signed the
                  same document. All counterparts shall be construed together
                  and constitute the same instrument.

                                       54
<PAGE>

         16.15    SUPERCEDES.

                  This Agreement amends and supercedes in all respects that
                  certain Operating Agreement for Greenbrier Pipeline Company,
                  LLC dated as of July 12, 2001 between Greenbrier Pipeline
                  Company, LLC and Dominion Greenbrier, Inc., which shall have
                  no further force or effect.

         IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.

                                        MEMBERS:

                                        DOMINION GREENBRIER INC.

                                        By: /s/ Thomas Farrell
                                           ------------------------------------
                                        Name: Thomas F. Farrell, II
                                        Title: Chief Executive Officer

                                        PIEDMONT GREENBRIER PIPELINE COMPANY,
                                        LLC

                                        By: /s/ Ware F. Schiefer
                                           ------------------------------------
                                        Name:  Ware F. Schiefer
                                        Title: President

                                       55
<PAGE>

                                   APPENDIX A

                           (CERTIFICATE OF FORMATION)

                                      A-l
<PAGE>

                               STATE OF DELAWARE
                        OFFICE OF THE SECRETARY OF STATE

         I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
FORMATION OF "GREENBRIER PIPELINE COMPANY, LLC", FILED IN THIS OFFICE ON THE
TWELFTH DAY OF JULY, A.D. 2001, AT 3 O'CLOCK P.M.

                           [SEAL] /s/ Harriet Smith Windsor
                                  ----------------------------------------------
                                  HARRIET SMITH WINDSOR, SECRETARY OF STATE

                                         AUTHENTICATION: 1243122
                                                   DATE: 07-16-01

<PAGE>

                            CERTIFICATE OF FORMATION
                                       OF
                        GREENBRIER PIPELINE COMPANY, LLC

         This Certificate of Formation of Greenbrier Pipeline Company, LLC (the
"LLC") dated as of July 12, 2001, is being duly executed and filed by E. J.
Marks, III, as an authorized person, to form a limited liability company under
the Delaware Limited Liability Company Act.

         FIRST. The name of the limited liability company formed hereby is
Greenbrier Pipeline Company, LLC.

         SECOND. The address of the registered office of the LLC in the State
of Delaware is c/o The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, County of New Castle, Wilmington, Delaware 19801.

         THIRD. The name and address of the registered agent for service of
process on the LLC in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, County of New Castle, Wilmington,
Delaware 19801.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation as of the date first written above.

                                     /s/ E. J. Marks, III
                                     ----------------------------------------
                                     E. J. Marks, III
                                     Authorized Person

<PAGE>

                                   APPENDIX B

                                (SHARING RATIOS)

<TABLE>
<CAPTION>
          Member                  Capital Commitment      Sharing Ratio
          ------                  ------------------      -------------
          <S>                     <C>                     <C>
          Dominion Greenbrier     $    *                       67%

          Piedmont Greenbrier     $    *                       33%
</TABLE>

* Each Member's Capital Commitment shall equal such Member's Sharing Ratio,
multiplied by the Estimated Cost of the Initial Facilities set forth on
Appendix C hereto, as such estimate may be adjusted with respect to the Initial
Facilities and the inclusion of any Modification (i) in the Phase I Capital
Budget, the Phase II Capital Budget and the Phase III Capital Budgets approved
pursuant to this Agreement; and (ii) under Sections 5.2.1(a)(y), 5.2.1(b)(y)
and 5.2.1(c)(y).

                                      B-l
<PAGE>

                                   APPENDIX C

                       DESCRIPTION OF INITIAL FACILITIES

         The Initial Facilities will consist of approximately 200 miles of
30-inch diameter natural gas pipeline extending from proposed points of
interconnection with the Operator's facilities and the facilities of Tennessee
Gas Pipeline in Kanawha County, West Virginia to a point in Rockingham County,
North Carolina. A 24-inch diameter pipeline will extend 44 miles from
Rockingham County to a point in Person County, North Carolina, and a 20-inch
diameter pipeline will extend approximately 18 miles from Person County to a
point in Granville County, North Carolina. Approximately 37,500 horsepower of
compression will be required at appurtenant facilities along the route. The
estimated cost of the Initial Facilities is $480,000,000 plus AFUDC.

         The pipeline will have the capacity to transport 600,000 dekatherms
per day. It will have a maximum allowable operating pressure of 1250 pounds per
square inch (psi) and a minimum operating pressure of 650 psi.

<PAGE>

                                   APPENDIX D

             PRE-EXECUTION DATE EXPENDITURES THROUGH JULY 31, 2001

                           DOMINION GREENBRIER, INC.

                   CATEGORY                      COSTS
                   --------                  -------------
              Labor/Benefits/etc.            $  358,596.16
              Materials/supplies                 58,089.70
              Other Costs                        57,636.02
              Outside Services                1,873,207.38
                                             -------------

                 Total                       $2,347,529.26

                   PIEDMONT GREENBRIER PIPELINE COMPANY, LLC

              Outside Services               $   26,674.60
                                             -------------

                                      D-l

<PAGE>

                                   APPENDIX E

                             PHASE I CAPITAL BUDGET
                               (excluding AFUDC)

<TABLE>
<CAPTION>
                                                COMPRESSOR
                                  PIPELINES      STATIONS        TOTAL
                                  ----------    ----------    ----------
         <S>                      <C>           <C>           <C>

         September 2001           $1,558,000     $ 40,000     $1,598,000
         October 2001              2,425,000       40,000      2,465,000
         November 2001               551,000       40,000        591,000
         December 2001               505,000       35,000        540,000
         January 2002                471,000       10,000        481,000
                                                              ----------

               Total              $5,510,000     $165,000     $5,675,000
</TABLE>

                                   E-l
<PAGE>

                                                                     APPENDIX F

               CONSTRUCTION, OPERATION AND MAINTENANCE AGREEMENT

                                 BY AND BETWEEN

                          DOMINION TRANSMISSION, INC.

                                      AND

                       GREENBRIER PIPELINE COMPANY, LLC

                            DATED SEPTEMBER 1, 2001

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>             <C>                                                              <C>

1.       Definitions and Construction                                              1

                1.1      Definitions                                               1
                1.2      Construction                                              5

2.       Relationship of the Parties                                               5
                2.1      Appointment as Operator                                   5
                2.2      Operator's Authority to Execute Contracts                 6

3.       Operation of the Facilities                                               6
                3.1      Operator's Responsibilities                               6
                3.2      Reasonable Efforts                                        9
                3.3      Claims                                                    9

4.       Employees, Consultants and Subcontractors                                 9
                4.1      Operator's Employees, Consultants and Subcontractors      9
                4.2      Use of Affiliates or Independent Contractors             10
                4.3      Standards for Operator and its Employees                 10
                4.4      Non-Discrimination and Drugs                             10

5.       Financial and Accounting                                                 11
                5.1      Accounting and Compensation                              11
                5.2      Budgets and Reports                                      11
                5.3      Disputed Charges                                         12
                5.4      Rate and Tariff Reviews                                  12
                5.5      Audit and Examination                                    12

6.       Intellectual Property; License to Operator                               12

7.       Indemnification                                                          13

8.       Insurance                                                                14

9.       Term                                                                     15

10.      Survival of Obligations                                                  15

11.      Law of the Contract and Arbitration                                      16
                11.1     Law of the Contract                                      16
                11.2     Arbitration                                              16

12.      Special and Consequential Damages                                        18

13.      General                                                                  18
                13.1     Effect of Agreement; Amendments                          18
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>             <C>                                                               <C>
                13.2     Notices                                                  18
                13.3     Counterparts                                             19
                13.4     Waiver                                                   19
                13.5     Assignability; Successors                                19
                13.6     Third Persons                                            19
                13.7     Laws and Regulatory Bodies                               20
                13.8     Section Numbers; Headings                                20
                13.9     Severabilitv                                             20
                13.10    Further Assurances                                       20

Exhibit A - Accounting Procedure
</TABLE>

                                      iii
<PAGE>

               CONSTRUCTION, OPERATION AND MAINTENANCE AGREEMENT

         This agreement ("CO&M Agreement"), made and entered into as of the
first day of September, 2001, is by and between Dominion Transmission, Inc., a
Delaware corporation ("Operator"), and Greenbrier Pipeline Company, LLC, a
Delaware limited liability company ("Company").

1.       DEFINITIONS AND CONSTRUCTION.

         1.1.     DEFINITIONS.

         The definitions used in the Amended and Restated Operating Agreement
         of the Company, dated September 1, 2001 ("Operating Agreement"),
         shall, except as otherwise specifically provided below, have the same
         meanings in this CO&M Agreement.

                  1.1.1.   "ACCOUNTING PROCEDURE" means the accounting
                           procedure set forth in Exhibit A.

                  1.1.2.   "AFFILIATE" means with respect to a Member, any
                           Person which is (a) a Parent of such Member; or (b)
                           a corporation as to which the majority of the voting
                           securities are (directly or through any number of
                           wholly-owned subsidiaries) owned by such Member or a
                           Parent of such Member.

                  1.1.3.   "AUTHORIZATIONS" means all licenses, certificates,
                           permits, orders, approvals, determinations and
                           authorizations from Governmental Authorities having
                           jurisdiction.

                  1.1.4.   "BUSINESS DAY" means a day, other than Saturday or
                           Sunday, on which commercial banks are open for the
                           transaction of business in New York, New York.

                  1.1.5.   "CERTIFICATE" means the Certificate(s) of public
                           convenience and necessity issued by the FERC
                           pursuant to the FERC Application.

                  1.1.6.   "CERTIFICATE OF FORMATION" means the Certificate of
                           Formation filed with the Delaware Secretary of State
                           pursuant to the Delaware Limited Liability Act on
                           July 12, 2001 and attached to the Operating
                           Agreement as Appendix A.

                  1.1.7.   "COMPANY" means Greenbrier Pipeline Company, LLC, a
                           Delaware limited liability company.

                  1.1.8.   "CO&M AGREEMENT" means this Construction, Operating
                           and Maintenance Agreement between the Company and
                           the Operator.

                                       1
<PAGE>

                  1.1.9.   "CONFIDENTIAL INFORMATION" means unique and specific
                           information about the Facilities, the Operating
                           Agreement, this CO&M Agreement, a Member, the
                           Company, rate strategies or marketing strategies
                           that is not generally available to the public, and
                           in the case of a Member or the Company, that such
                           Member or the Company has designated as
                           confidential, Upon the filing of the FERC
                           Application, the terms and conditions of this CO&M
                           Agreement and any information about the Facilities
                           disclosed in the FERC Application (except for any
                           terms and conditions or information for which
                           confidential treatment may have been requested and
                           not refused by the FERC) shall be deemed to be
                           generally available to the public and shall not be
                           considered Confidential Information.

                  1.1.10.  "CUSTOMER" means a Person who has entered into a
                           Service Agreement with the Company (or, where
                           applicable, a precedent agreement relating thereto)
                           for the receipt, transportation, and delivery of
                           natural gas by means of the Facilities.

                  1.1.11.  "DECISION NOTICE" has the meaning set forth in
                           Section 11.2.

                  1.1.12.  "DEFAULT RATE" means an interest rate equal to the
                           lesser of (a) two percent (2%) per annum over the
                           prime rate of Chase Manhattan Bank, N.A. (or its
                           successor) as in effect from time to time while such
                           default is outstanding; or (b) the maximum interest
                           rate allowed for this purpose pursuant to the law of
                           Delaware.

                  1.1.13.  "DOMINION GREENBRIER" means Dominion Greenbrier,
                           Inc., a Delaware corporation.

                  1.1.14.  "EXECUTION DATE" means September 1, 2001.

                  1.1.15.  "FACILITIES" means the Initial Facilities together
                           with any and all Modifications.

                  1.1.16.  "FERC" means the Federal Energy Regulatory
                           Commission or any commission, agency or other
                           governmental body succeeding to the powers of such
                           commission.

                  1.1.17.  "FERC APPLICATION" means the documents pursuant to
                           which application for a certificate(s) of public
                           convenience and necessity is made to FERC by the
                           Company for authority to construct, own, lease and
                           operate the Initial

                                       2
<PAGE>

                           Facilities and to receive, transport and deliver
                           natural gas by means of the Initial Facilities.

                  1.1.18.  "FINANCING COMMITMENT" means the agreements between
                           one or more financial institutions or other Persons
                           and the Company or the Financing Corporation
                           pursuant to which such financial institutions or
                           other Persons agree, subject to the conditions set
                           forth therein, to lend money to, or purchase
                           securities of, the Company or the Financing
                           Corporation, the proceeds of which shall be used to
                           finance all or a portion of the Facilities.

                  1.1.19.  "FISCAL YEAR" means the fiscal year adopted by the
                           Company from time to time.

                  1.1.20.  "GOVERNMENTAL AUTHORITY" means any court, agency,
                           authority, board, bureau, commission, department,
                           office or instrumentality of any nature whatsoever
                           of any governmental or quasi-governmental unit,
                           whether federal, state, parish, county, district,
                           municipality, city, political subdivision or
                           otherwise, domestic or foreign whether now or
                           hereafter in existence.

                  1.1.21.  "INITIAL FACILITIES" means the real, personal, mixed
                           and contractual property (whether tangible or
                           intangible) to be owned and operated by the Company
                           for the receipt, transportation and delivery of
                           natural gas, all as more fully described in Appendix
                           C to the Operating Agreement (not including any
                           Modification but including any changes in size,
                           design capacity and location as may be approved
                           prior to the date of filing of the FERC
                           Application).

                  1.1.22.  "LIABILITIES" means actions, claims, settlements,
                           judgments, demands, costs, expenses (including,
                           without limitation, expenses attributable to the
                           defense of any actions or claims), attorneys' fees
                           and liabilities related to the Operation of the
                           Facilities.

                  1.1.23.  "MANAGER" has the meaning set forth in Section 7.1.2
                           of the Operating Agreement.

                  1.1.24.  "MANAGEMENT COMMITTEE" has the meaning set forth in
                           Section 7.1.2 of the Operating Agreement.

                  1.1.25.  "MEETING" has the meaning set forth in Section 11.2.

                  1.1.26.  "MEMBER" means any Person executing the Operating
                           Agreement as of the date of the Operating Agreement
                           or who is hereafter admitted to the Company as a
                           Member as provided in the Operating Agreement, but
                           does not include

                                       3
<PAGE>

                           any Person who has ceased to be a Member of the
                           Company.

                  1.1.27.  "MODIFICATION" means any additions or modifications
                           to the Facilities approved after the filing of the
                           FERC Application installed (a) to modify, improve,
                           expand, extend or increase the design capacity or
                           scope of the Facilities or any portion thereof
                           (except in connection with customary maintenance) or
                           (b) to provide a new point of delivery or receipt of
                           natural gas for the Facilities.

                  1.1.28.  "MONTH" means a period of time beginning on the
                           first day of a calendar month and ending at the same
                           time on the first day of the next succeeding
                           calendar month.

                  1.1.29.  "OPERATE THE FACILITIES" means to plan, design,
                           construct, test, maintain, repair, replace, improve,
                           expand and/or operate the Facilities, including,
                           without limitation, the duties identified in Section
                           3.1 of this CO&M Agreement. Where used in noun form,
                           such term shall be "OPERATION OF THE FACILITIES."

                  1.1.30.  "OPERATOR" means Dominion Transmission, Inc., a
                           Delaware corporation, and any of its successors or
                           assigns, pursuant to this CO&M Agreement.

                  1.1.31.  "PARTY" means the Company or the Operator.

                  1.1.32.  "PERSON" means an individual, a trust, an estate, a
                           domestic corporation, a foreign corporation, a
                           professional corporation, a partnership, a limited
                           partnership, a limited liability company, a foreign
                           limited liability company, an unincorporated
                           association, or another entity.

                  1.1.33.  "PHASE II CAPITAL BUDGET" means the capital budget
                           for the period from the filing of the FERC
                           Application to the issuance of the Certificate.

                  1.1.34.  "PHASE III CAPITAL BUDGET" means the capital budget
                           for the period from the issuance of the Certificate
                           to the In-Service Date.

                  1.1.35.  "PIEDMONT GREENBRIER" means Piedmont Greenbrier
                           Pipeline Company, LLC, a North Carolina limited
                           liability company.

                  1.1.36.  "PRE-COMPLETION PERIOD" means the period between the
                           Execution Date and the date that the Facilities are
                           placed into service, which latter date shall be
                           certified in writing by the Operator.

                                       4
<PAGE>

                  1.1.37.  "PROCEEDING" means any threatened, pending or
                           completed action, suit or proceeding, whether civil,
                           criminal, administrative, arbitrative or
                           investigative.

                  1.1.38.  "PROHIBITED CONDUCT" means any action by the
                           Operator that constitutes bad faith, gross
                           negligence or willful misconduct.

                  1.1.39.  "REQUIRED ACCOUNTING PRACTICE" means the accounting
                           rules and regulations, if any, at the time
                           prescribed by the regulatory bodies under the
                           jurisdiction of which the Company is at the time
                           operating and, to the extent of matters not covered
                           by such rules and regulations, generally accepted
                           accounting principles applied on a consistent basis
                           as practiced in the United States at the time
                           prevailing for companies engaged in a business
                           similar to that of the Company.

                  1.1.40.  "SERVICE AGREEMENTS" means the service agreement(s)
                           by and between the Company and the Customers for the
                           receipt, transportation and delivery of natural gas
                           by means of the Facilities.

                  1.1.41.  "YEAR" means each twelve (12) Month period beginning
                           on the first day of a calendar year and ending at
                           the beginning of the first day of the next calendar
                           year, provided that the first year hereunder shall
                           begin on the date hereof, and shall end at the
                           beginning of the first day of the following calendar
                           year, and further provided that the last contract
                           year shall end at the expiration of the term of this
                           CO&M Agreement pursuant to Section 9 hereof.

         1.2.     CONSTRUCTION. Whenever the context requires, the gender of
                  all words used in this CO&M Agreement includes the masculine,
                  feminine and neuter. All references to Sections refer to
                  sections of this CO&M Agreement (unless the context clearly
                  indicates otherwise), and all references to Exhibits are to
                  Exhibits attached to this CO&M Agreement, each of which is
                  made a part hereof for all purposes.

2.       RELATIONSHIP OF THE PARTIES.

         2.1.     APPOINTMENT AS OPERATOR. Subject to the terms and conditions
                  of this CO&M Agreement, the Company hereby appoints the
                  Operator to act hereunder, and the Operator hereby accepts
                  such appointment and agrees to act pursuant to the provisions
                  of this CO&M Agreement and the applicable provisions of the
                  Operating Agreement. In performing services pursuant to this
                  CO&M Agreement, the Operator shall be an agent of the
                  Company.

                                       5
<PAGE>

         2.2.     OPERATOR'S AUTHORITY TO EXECUTE CONTRACTS. Subject to the
                  terms of this CO&M Agreement, contracts in connection with
                  Operation of the Facilities may be negotiated and executed or
                  amended by the Operator as agent for the Company. Copies of
                  all contracts entered into by the Operator on behalf of the
                  Company shall be provided to the Company. All contracts and
                  permits, if any, relating to Company business and executed by
                  the Operator prior to the Execution Date shall be assigned by
                  the Operator to the Company as soon as practicable after the
                  Execution Date.

3.       OPERATION OF THE FACILITIES.

         3.1.     OPERATOR'S RESPONSIBILITIES. The Operator shall be
                  responsible for the Operation of the Facilities, and, subject
                  to the provisions of the Operating Agreement, the Operator is
                  authorized to undertake all activities reasonably necessary
                  to fulfill such responsibilities, including, but not limited
                  to:

                  3.1.1.   Prepare, file, execute and prosecute applications
                           for the Authorizations required by the Company and
                           make periodic filings required of the Company by
                           Governmental Authorities having jurisdiction,
                           including, without limitation, the preparation,
                           filing, execution and prosecution of the FERC
                           Application (and any amendments thereto) and the
                           Company's FERC tariff (and any amendments thereto).

                  3.1.2.   Provide or cause to be provided the day-to-day
                           operating and maintenance services, administrative
                           liaison and related services to the Members,
                           Managers, Management Committee and the Company,
                           including, but not limited to, Customer support,
                           regulatory matters (including rate, tariff and
                           Certificate filings), legal, accounting, electronic
                           bulletin board design and maintenance, capacity and
                           informational postings, engineering, construction,
                           repair, replacement, inspection, operational
                           planning, budgeting, tax and technical services, and
                           insurance and regulatory administration and
                           compliance.

                  3.1.3.   Prepare and/or cause to be prepared the engineering
                           design and specifications for the Facilities.

                  3.1.4.   Negotiate and execute contracts for the purchase of
                           materials, equipment and supplies necessary for the
                           Operation of the Facilities.

                  3.1.5.   Prepare, negotiate and execute in the name of the
                           Company rights-of-way, land in fee, permits and
                           contracts, and initiate and prosecute eminent domain
                           Proceedings,

                                       6
<PAGE>

                           necessary for the Operation of the Facilities, and
                           resist the perfection of any involuntary liens
                           against Company property.

                  3.1.6.   Construct and/or install, or cause to be constructed
                           and/or installed, the Facilities.

                  3.1.7.   Maintain accurate and itemized accounting records
                           for the Operation of the Facilities, together with
                           any information reasonably required by the Company
                           relating to such records, consistent with the
                           applicable provisions of Section 12 of the Operating
                           Agreement.

                  3.1.8.   Prepare the financial and other reports set forth in
                           Section 12 of the Operating Agreement.

                  3.1.9.   Cause the Operation of the Facilities to be in
                           accordance with the requirements of all Governmental
                           Authorities having jurisdiction, including, but not
                           limited to, the requirements of the United States
                           Department of Transportation set forth in 49 CFR
                           Parts 190, 191, 192 and 199 and in accordance with
                           sound and prudent natural gas pipeline industry
                           practices, and provide or cause to be provided such
                           appropriate supervisory, audit, administrative,
                           technical and other services as may be required for
                           the Operation of the Facilities.

                  3.1.10.  Prepare, or cause to be prepared, and file all
                           necessary federal and state income tax returns and
                           all other tax returns and filings for the Company
                           (including making the elections set forth in Section
                           11.4 of the Operating Agreement). Each Member shall
                           furnish to the Operator all pertinent information in
                           its possession relating to Company operations that
                           is necessary to enable such returns to be prepared
                           and filed. The Operator shall pay on behalf of the
                           Company such taxes as are required to be paid by the
                           Company.

                  3.1.11.  On behalf of the Company, maintain and administer
                           bank and investment accounts and arrangements for
                           receipt of Company funds, draw checks and other
                           orders for the payment of money, and designate
                           individuals with authority to sign or give
                           instructions with respect to those accounts and
                           arrangements. The Company's funds shall not be
                           commingled with funds belonging to the Operator.

                  3.1.12.  On behalf of the Company, market the Company's
                           services, including, but not limited to, conducting
                           open seasons for new services, receiving and
                           responding to requests for new services or changes
                           in existing services, the negotiation,

                                       7
<PAGE>

                           execution and administration of Precedent Agreements
                           and Service Agreements in accordance with FERC's
                           policies, rules and Orders and the Company's FERC
                           Gas Tariff, and the preparation and collection of
                           all bills to the Customers for services rendered
                           thereunder.

                  3.1.13.  On behalf of the Company, negotiate, execute and
                           administer contracts with other pipelines and
                           service providers, including, but not limited to,
                           Operational Balancing Agreements, Capacity Leases,
                           Storage and Transportation Agreements and Balancing
                           Agreements and to undertake such emergency measures
                           with third parties necessary to protect the
                           reliability and safety of the Company's services.

                  3.1.14.  Receive nominations for service, schedule service,
                           issue confirmations, and administer Customer
                           contracts, including capacity release, in accordance
                           with the Company's FERC tariff and FERC policies,
                           rules and orders.

                  3.1.15.  Establish such procedures as may be reasonable and
                           appropriate to comply with or to obtain an exemption
                           from the marketing affiliate rules set forth in the
                           FERC Order No. 497 as the same may be amended or
                           superseded.

                  3.1.16.  Dispatch and allocate daily scheduled nominations
                           for natural gas quantities to be received,
                           transported and redelivered by means of the
                           Facilities.

                  3.1.17.  Utilize electronic flow measurement equipment for
                           volume determinations and natural gas
                           chromatographs, as deemed appropriate by the
                           Operator, for heating value determinations as
                           described in the Company's FERC tariff.

                  3.1.18.  Except as otherwise provided by applicable laws or
                           governmental regulations or as otherwise directed by
                           the Company, retain all records, books of account,
                           Company tax returns, plans, designs, studies,
                           reports and other documents related to the Operation
                           of the Facilities for three (3) years from the date
                           of completion of the activity to which such records
                           relate (or such longer period as may be required by
                           law or the Operating Agreement).

                  3.1.19.  Report to the Company as soon as practicable all
                           non-routine occurrences that the Operator
                           determines may have a significant adverse impact
                           upon the Operation of the Facilities, make any
                           necessary repairs as a result of such occurrences as
                           the Operator reasonably deems necessary, and make a
                           follow-up report at an appropriate time on the

                                       8
<PAGE>

                           Operator's response to each non-routine occurrence;
                           provided, however, that the Operator shall obtain
                           the prior approval of the Company prior to
                           performing repairs with an estimated cost of over
                           $250,000 unless the non-routine occurrence is of a
                           nature that immediate repair is required, in which
                           event the Operator may make such repair without such
                           prior approval but shall provide a complete and
                           accurate report to the Company of such repair as
                           soon as practicable thereafter.

                  3.1.20.  Perform any required major equipment overhaul and
                           replacement; provided, however, that unless already
                           previously approved by the Company in a budget
                           submitted by the Operator, the Operator shall obtain
                           the prior approval of the Company prior to
                           performing such overhaul or replacement with an
                           estimated cost of over $250,000 unless such overhaul
                           or replacement is of a nature that immediate action
                           must be taken, in which event the Operator may
                           perform such overhaul or replacement without such
                           prior approval but shall provide a complete and
                           accurate report to the Company of all such actions
                           as soon as practicable thereafter.

                  3.1.21.  Perform such other duties as are reasonably
                           necessary or appropriate and enter into such other
                           arrangements as reasonably requested by the Company
                           to discharge the Operator's responsibilities under
                           this CO&M Agreement and the Operating Agreement.

         3.2.     REASONABLE EFFORTS. Operator agrees to design the Facilities
                  and to use reasonable efforts to operate the Facilities in
                  such a manner to provide services as required in the
                  Shipper's Service Agreements, the Company's FERC Gas Tariff,
                  and FERC's policies, rules and orders.

         3.3.     CLAIMS. Any and all claims against the Company instituted by
                  anyone other than the Operator arising out of the Operation
                  of the Facilities that are not covered by insurance in
                  accordance with Section 8 of this CO&M Agreement shall be
                  settled or litigated and defended by the Operator in
                  accordance with its best judgment and discretion except when
                  (a) the amount involved is stated to be (or estimated to be,
                  as the case may be) greater than $100,000, or (b) criminal
                  sanction is sought. The settlement or defense of any claim
                  described in (a) or (b) above shall be decided by the Members
                  pursuant to the Operating Agreement.

4.       EMPLOYEES, CONSULTANTS AND SUBCONTRACTORS.

         4.1.     OPERATOR'S EMPLOYEES, CONSULTANTS AND SUBCONTRACTORS. The
                  Operator shall employ or retain and have supervision over the

                                       9
<PAGE>

                  Persons (including consultants and professional service or
                  other organizations) required or deemed advisable by the
                  Operator to perform its duties and responsibilities hereunder
                  in an efficient and economically prudent manner. The Operator
                  shall pay all reasonable expenses in connection therewith,
                  including compensation, salaries, wages, overhead and
                  administrative expenses incurred by the Operator, and if
                  applicable, social security taxes, workers' compensation
                  insurance, retirement and insurance benefits and other such
                  expenses. The compensation for the Operator's employees shall
                  be determined by the Operator, provided that the amount and
                  terms of such compensation shall be comparable to those
                  prevailing in the natural gas industry where Operator's
                  employees are located for similar work. Subject to the other
                  provisions of this CO&M Agreement, all authorized expenses
                  pursuant to this Section 4.1 shall be reimbursed to the
                  Operator by the Company as provided in the Accounting
                  Procedure.

         4.2.     USE OF AFFILIATES OR INDEPENDENT CONTRACTORS. The Operator
                  may utilize, as it reasonably deems necessary or appropriate,
                  the services of any independent contractors or of its or any
                  Member's Affiliates; provided, however, that such services of
                  the Operator's or any Member's Affiliates must be utilized on
                  terms no less favorable to the Company than those prevailing
                  at the time for comparable services of nonaffiliated
                  independent parties.

         4.3.     STANDARDS FOR OPERATOR AND ITS EMPLOYEES. The Operator shall
                  perform its services and carry out its responsibilities
                  hereunder, and shall require all of its employees and
                  contractors, subcontractors and materialmen furnishing labor,
                  material or services for the Operation of the Facilities to
                  carry out their respective responsibilities in accordance
                  with sound, workmanlike and prudent practices of the natural
                  gas pipeline industry and in compliance with the Company's
                  FERC Gas Tariff, FERC's policies, rules and orders and with
                  all relevant laws, statutes, ordinances, safety codes,
                  regulations, rules and Authorizations of Governmental
                  Authorities having jurisdiction applicable to the Facilities.

         4.4.     NON-DISCRIMINATION AND DRUGS. In performing under this CO&M
                  Agreement, the Operator shall not discriminate against any
                  employee or applicant for employment because of race, creed,
                  color, religion, sex, national origin, age or disability, and
                  will comply with all provisions of Executive Order 11246 of
                  September 24, 1965 and any successor order thereto, to the
                  extent that such provisions are applicable to the Operator or
                  the Company. The Company and the Operator do not condone in
                  any way the use of illegal drugs or controlled substances.
                  Any Person known by the Operator to be in possession of any
                  illegal drug or controlled substance will be removed by the
                  Operator and not permitted to

                                       10

<PAGE>

                  work on or with respect to the Facilities. In addition, the
                  Operator shall meet all the applicable requirements imposed
                  by the Department of Transportation as specified in 49
                  C.F.R., Parts 40 and 199. Furthermore, upon request and to
                  the extent permitted by law, the Operator will furnish the
                  Company copies of the records of employee drug test results
                  required to be kept under the provisions of 49 C.F.R. Part
                  199. The provisions of this Section 4.4 shall be applicable
                  to any contractors, consultants and subcontractors retained
                  in connection herewith, and the Operator shall cause the
                  agreements with any contractor, consultant or subcontractor
                  to contain similar language.

5.       FINANCIAL AND ACCOUNTING.

         5.1.     ACCOUNTING AND COMPENSATION.

                  5.1.1.   The Operator shall maintain accounts for the Company
                           in accordance with the FERC Uniform System of
                           Accounts and other Required Accounting Practices and
                           shall keep a full and complete account of all costs,
                           expenses and expenditures incurred by it in
                           connection with its obligations hereunder in the
                           manner set forth in the Accounting Procedure.

                  5.1.2.   The Operator shall be reimbursed by the Company at
                           the rate and in the manner set forth in the
                           Accounting Procedure for all costs and expenses of
                           the Operator subject only to Operator's
                           demonstration that such costs and expenses were
                           incurred in connection with the Operation of the
                           Facilities or otherwise to fulfill the Operator's
                           duties under this CO&M Agreement and the Operating
                           Agreement; provided, however, that the Company shall
                           not be required to reimburse the Operator for costs
                           and expenses arising out of Prohibited Conduct or
                           claims for non-payment of any and all contributions,
                           withholding deductions or taxes measured by the
                           wages, salaries or compensation paid to Persons
                           employed by the Operator or any of its Affiliates in
                           connection herewith. The fact that such costs and
                           expenses exceed any budget approved by the Company
                           shall not be sole grounds to deny reimbursement
                           otherwise required under this CO&M Agreement,
                           provided the Operator can demonstrate such costs are
                           reasonably necessary.

         5.2.     BUDGETS AND REPORTS. The Operator shall, on a timely basis,
                  prepare and deliver to the Company for approval the following
                  budgets and reports: (a) The Phase II Capital Budget and Phase
                  III Capital Budget pursuant to Section 4.1.1 of the Operating
                  Agreement; and (b) an annual Operating Budget pursuant to
                  Section 7.6 of the Operating Agreement. Such budgets shall be

                                      11
<PAGE>

                  prepared in sufficient detail to satisfy the requirements of
                  any lending institution providing financing for the
                  Facilities.

         5.3.     DISPUTED CHARGES. The Company may, within the audit period
                  referred to in Section 5.5 hereof, take written exception to
                  any bill or statement rendered by the Operator for any
                  expenditure or any part thereof on the ground that the same
                  was not appropriate for reimbursement under the terms of
                  Section 5.1.2 above. The Company shall nevertheless pay in
                  full when due the amount of all statements submitted by the
                  Operator. Such payment shall not be deemed a waiver of the
                  right of the Company to recoup any contested portion of any
                  bill or statement; provided, however, that if the amount as
                  to which such written exception is taken or any part thereof
                  is ultimately determined in accordance with Section 11.2 of
                  this CO&M Agreement not to be appropriate for reimbursement
                  under the terms of Section 5.1.2 of this CO&M Agreement, such
                  amount or portion thereof (as the case may be) shall be
                  refunded by the Operator to the Company, together with
                  interest thereon at the Default Rate.

         5.4.     RATE AND TARIFF REVIEWS. The Operator shall review from time
                  to time the rates and fees charged for natural gas
                  transportation services, and the terms and conditions for
                  such services and any new services deemed appropriate by the
                  Operator and, subject to the receipt of any required
                  Regulatory Approvals and the terms of any Service Agreement,
                  revise such rates, fees, terms and conditions as the Operator
                  may deem appropriate for the Company.

         5.5.     AUDIT AND EXAMINATION. The Company or any Member, after
                  thirty (30) days' notice in writing to the Operator, shall
                  have the right during normal business hours to audit or
                  examine, at the expense of the Company or the requesting
                  Member, as the case may be, all books and records maintained
                  by the Operator, as well as the relevant books of account of
                  the Operator's contractors, relating to the Operation of the
                  Facilities; provided, however, that the total number of full
                  audits commenced in any Year pursuant to this Section 5.5
                  shall not exceed two. Such right shall include the right to
                  meet with the Operator's internal and independent auditors to
                  discuss matters relevant to the audit or examination. The
                  Company shall have two Years after the close of a Year in
                  which to make an audit of the Operator's records for such
                  Year; provided, however, that any audits relating to
                  construction costs may be made up to twenty four (24) Months
                  after the in-service date of the Facilities (not including
                  any Modifications) or after the date that construction of the
                  Modification in question was completed, as certified in
                  writing by the Operator, in the case of a Modification.

6.       INTELLECTUAL PROPERTY; LICENSE TO OPERATOR. Each Member hereby grants
         to the operator an irrevocable, royalty-free, non-exclusive and
         non-assignable license to use, during the term of this

                                       12
<PAGE>

         CO&M Agreement, any Confidential Information provided to the Company
         or the Operator by said Member and designated as such by said Member.
         For purposes of this section 6, Confidential Information shall
         include, but shall not be limited to, inventions (whether patented or
         not) and copyrighted or copyrightable material. As a condition
         precedent to the effectiveness of such license to use, the Operator
         hereby expressly agrees that it will utilize such Confidential
         Information solely in connection with the performance of its duties
         hereunder and further expressly agrees that it will be subject to and
         bound by the provisions set forth in Section 4.8.2 of the Operating
         Agreement as if it were a Member. Upon termination of this CO&M
         Agreement or its removal as Operator, such license shall terminate
         and, upon the request of the Company, the Operator shall either return
         all Confidential Information that has been provided to it, together
         with all reproductions thereof in the Operator's possession, pursuant
         to such license to use, to the Member from whom it obtained such
         Confidential Information or certify to such Member that it has been
         destroyed.

7.       INDEMNIFICATION. The Company agrees to indemnify, hold harmless and
         defend the Operator and its Affiliates and their respective officers,
         directors, employees and agents (but not including any Member of the
         Company, in its capacity as such) from and against, and the
         indemnified parties shall have no liability to the Company for, any
         and all Liabilities incurred arising out of or relating to this CO&M
         Agreement or the Operation of the Facilities, regardless of cause;
         provided, however, that the Company shall not be required to indemnify
         or hold harmless the indemnified parties from or against any
         Liabilities attributable to the actions or omissions of Operator in
         maintaining and administering accounts and arrangements as set forth
         in Section 3.1.11 of this CO&M Agreement; provided, further, that the
         Company shall not be required to indemnify or hold harmless the
         indemnified parties from or against any Liabilities attributable to
         Prohibited Conduct or claims for non-payment of any and all
         contributions, withholding deductions or taxes measured by the wages,
         salaries or compensation paid to Persons employed by the Operator or
         any of its Affiliates in connection herewith. In the event applicable
         law limits in any way the extent to which indemnification may be
         provided to an indemnitee, this Section 7 shall be automatically
         amended, in keeping with the express intent of the parties hereto, as
         necessary to render all the remainder of this CO&M Agreement valid and
         enforceable and to provide that the indemnifications provided herein
         shall extend and be effective only to the maximum extent permitted by
         such law. Upon notice therefor, the Company shall advance to the
         indemnified party the costs of any Liabilities for which
         indemnification is to be sought hereunder upon the execution by the
         indemnified party of a written undertaking to repay any costs for
         which indemnification pursuant to this Section 7 is determined to be
         improper by mutual agreement or pursuant to the procedures set forth
         in Section 11.2 of this CO&M Agreement, together with interest thereon
         at the Default Rate. With respect to any claim against any indemnified
         party for which indemnification may be

                                       13
<PAGE>

         sought hereunder, the Company shall not, without the indemnified
         party's prior written consent, settle or compromise such claim or
         consent to entry of any judgment in respect thereof which imposes any
         future obligation on the indemnified party or which does not include,
         as an unconditional term thereof, the giving by the claimant or the
         plaintiff to the indemnified party a release from all liability in
         respect of such claim. The Company (a) shall have the right to defend,
         at its cost and expense, such claim in all appropriate Proceedings,
         and (b) shall have full control (including choice of counsel) of such
         defense and Proceedings, including any compromise or settlement
         thereof (subject to the foregoing provisions of this Section 7), and
         the indemnified parties shall cooperate in such defense in all
         reasonable ways. The Company shall not be required to provide
         indemnification pursuant to this Section 7 to the extent, if any, that
         the Liabilities in question are not borne or incurred by the
         indemnified parties because of the availability of insurance proceeds
         from the insurance required in Section 8.2 of this CO&M Agreement to
         the indemnified parties.

8.       INSURANCE.

         8.1.     During the construction of the Facilities, the Operator shall
                  cause to be carried and maintained, either directly or
                  through the contractor(s) building the Facilities, the
                  equivalent of all-risk builders risk insurance, including the
                  perils of Flood and Earthquake, if available and deemed
                  affordable, and including mutually acceptable sublimits of
                  Offsite Storage and Transit for the full replacement value of
                  the work with all coinsurance waived and "permission to
                  occupy" granted. The insurance shall name the Operator and
                  the Company as insureds, as their respective interests may
                  appear.

         8.2.     At all times during the Operation of the Facilities, the
                  Operator shall provide (a) workers' compensation insurance
                  granting full compensation under the worker's compensation
                  law of any state in which operations are conducted, and (b)
                  employer's liability insurance with limits of not less than
                  $2,000,000 per occurrence for all of the Operator's employees
                  engaged in work on the Facilities, and (c) automobile
                  liability insurance for all vehicles owned or used by the
                  Operator, covering injuries to or death of Persons and damage
                  to property, with a combined single limit of not less than
                  $2,000,000 per occurrence.

         8.3.     If permitted by applicable law, the Operator may self-insure
                  the workers' compensation, employer's liability insurance,
                  and automobile liability insurance required above and, up to
                  $1,000,000 per occurrence or such other amounts as the
                  Company authorizes by Supermajority Vote, the general
                  liability insurance required in section 8.4 below.

                                       14
<PAGE>

         8.4.     To be effective as of the Execution Date, Operator shall
                  procure and maintain for the benefit of Company and Operator
                  general liability and/or excess liability insurance with
                  limits of not less than $10,000,000 per occurrence for bodily
                  injury and property damage combined. The Company and the
                  Operator will be the named insureds under such insurance
                  policy(ies). The Operator's parent and Affiliates and the
                  Members will be named as additional insureds under such
                  insurance policy(ies). Such insurance policy(ies) will be
                  worded to provide primary insurance to the named insureds and
                  the above additional insureds with respect to the Operation
                  of the Facilities, and to waive any rights of subrogation
                  against the above additional insureds. Within 15 days after
                  execution of this CO&M Agreement, and annually thereafter,
                  Operator will have a certificate of insurance issued
                  evidencing this insurance upon the specific request of the
                  Company or any of its Members.

         8.5.     The Operator will procure and maintain for the benefit of and
                  on behalf of the Company and the Operator all-risk property
                  insurance covering the Facilities with no co-insurance,
                  including coverage for boiler and machinery, business
                  interruption (at the Company's option) and natural gas in the
                  possession of the Company. This insurance will be placed into
                  effect simultaneously with the termination of the builder's
                  risk insurance the Operator is required to maintain under
                  Section 8.1 of this CO&M Agreement. The Company and the
                  Operator will be the named insureds and loss payees under
                  such insurance policy. This insurance policy will provide a
                  waiver of any rights of subrogation against the Operator's
                  Parent and Affiliates and the Members. Any insurance proceeds
                  for any losses under this policy will be applied against the
                  cost to repair or replace the Facilities.

         8.6.     All policies of insurance shall be written with carriers
                  holding a current Best's rating of at least A (or if not so
                  rated, has a creditworthiness comparable to such an A rated
                  carrier), and shall afford at least 60-days written notice in
                  the event of cancellation, non-renewal or material reduction
                  in the coverage required hereunder. The costs for premiums,
                  deductibles and self-insured retentions for the insurance
                  maintained by the Operator pursuant to this CO&M Agreement
                  shall be reimbursable costs pursuant to Section 5 of this
                  CO&M Agreement. In addition, in the event the Operator
                  self-insures the general liability insurance required above
                  as herein permitted, the Operator shall be reimbursed as
                  provided in Section 2.9 of the Accounting Procedures.

9.       TERM. This CO&M Agreement shall be effective as of the date hereof and
         shall continue for the term of the Company as provided in the
         Company's Certificate of Formation; provided, however, that this CO&M
         Agreement shall be terminated earlier upon the first to occur of the
         following: (a) the Operator's Affiliates (or any successor Affiliate
         of the

                                      15
<PAGE>

         Operator) that is a Member ceases to be a Member; or (b) the Operator
         commits a material default under this CO&M Agreement and such material
         default continues for a period of 120 days after notice thereof by the
         Company to the Operator (provided, however, that no termination shall
         occur if the Operator has initiated action to cure such material
         default but, despite its good faith efforts, it has been unable to
         complete such cure within such 120 day period).

10.      SURVIVAL OF OBLIGATIONS. The termination of this CO&M Agreement shall
         not discharge any Party from any obligation that it owes to any other
         Party by reason of any transaction, commitment or agreement entered
         into, or any Liabilities that shall occur or arise (or the
         circumstances, events or basis of which shall occur or arise) prior to
         such termination. It is the intent of the Parties that any obligation
         owed by a Party to the other Party (whether the same shall be known or
         unknown at the time of termination hereof, or whether the
         circumstances, events or basis of the same shall be known or unknown
         at the termination hereof) shall survive the time of termination of
         this CO&M Agreement.

11.      LAW OF THE CONTRACT AND ARBITRATION.

         11.1.    LAW OF THE CONTRACT. THIS CO&M AGREEMENT IS GOVERNED BY AND
                  SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
                  OF DELAWARE, EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE
                  THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS
                  CO&M AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

         11.2.    ARBITRATION.

                  11.2.1.  In the event that the Parties are unable to agree on
                           any matter relating to this CO&M Agreement, the
                           Company or the Operator may upon notice given to the
                           other call for submission of such matter to
                           arbitration. The Party requesting arbitration shall
                           set forth in such notice in adequate detail the
                           issues to be arbitrated, and within ten (10) days
                           from the receipt of such notice, the other Party may
                           set forth in adequate detail additional related
                           issues to be arbitrated. Within ten (10) days after
                           the giving of such latter notice, each Party shall
                           furnish to the other Party a notice ("Decision
                           Notice") setting forth the decision (on a
                           word-for-word basis) that such Party wishes the
                           arbitrator(s) to make with respect to the issues to
                           be arbitrated. Within ten (10) days after the giving
                           of the latter of the two Decision Notices, the
                           Parties shall attend a meeting ("Meeting") at a
                           mutually acceptable time and place to discuss fully
                           the content of such Decision Notices

                                       16
<PAGE>

                           and based thereon determine whether either or both
                           wish to modify their Decision Notices in any way.
                           Any such modifications shall be discussed with each
                           other, so that when each Party finalizes its
                           Decision Notice, it shall do so with full knowledge
                           of the content of the other Party's final Decision
                           Notice. The finalization of such Decision Notices
                           and the delivery of same by each Party to the other
                           shall occur at the Meeting unless by mutual
                           agreement they agree to have one or more additional
                           Meetings for such purposes. If arbitration is
                           invoked by either Party, the decision of the
                           arbitrators shall be final and binding upon all
                           Parties, and neither Party shall seek to have the
                           applicable issues litigated rather than arbitrated
                           (except as may be otherwise required by law).

                  11.2.2.  It is the intent of the Parties that, to the extent
                           practicable, such binding arbitration shall be
                           conducted by a Person knowledgeable and experienced
                           in the type of matter that is the subject of the
                           dispute. In the event the Parties are unable to
                           agree upon such Person within ten days after the
                           last Meeting held pursuant to Section 11.2.1 above,
                           then each Party shall select a Person that it
                           believes has the qualifications set forth above as
                           its designated arbitrator (which selection shall be
                           accomplished by notifying the other Party of the
                           identity of such Person), and such arbitrators so
                           designated shall mutually agree upon a similarly
                           qualified third Person to complete the arbitration
                           panel; provided, however, that if one of the Parties
                           fails to select its designated arbitrator as
                           specified herein within ten (10) days of receiving
                           notice from the other Party that such other Party
                           has selected its designated arbitrator then the
                           arbitration provided for herein shall be conducted
                           by the one arbitrator so designated. In the event
                           that the Persons selected by the Parties are unable
                           to agree on a third member of the panel within ten
                           (10) days after the selection of the latter of the
                           two arbitrators, such Person shall be designated by
                           the American Arbitration Association. Upon final
                           selection of the entire panel, such panel shall, as
                           expeditiously as possible (and if possible, within
                           ninety (90) days after the selection of the last
                           arbitrator), render a decision on the matter
                           submitted for arbitration. Such panel shall be
                           required to adopt either the decision set forth in
                           the Operator's final Decision Notice or the decision
                           set forth in the Company's final Decision Notice and
                           shall have no power whatsoever to reach any other
                           result. Such panel shall adopt the decision that in
                           its judgement is the more fair, equitable and in
                           conformity with this CO&M Agreement. The arbitration
                           shall be conducted in Charlotte, North Carolina in
                           accordance with the

                                       17
<PAGE>
                           commercial arbitration rules of the American
                           Arbitration Association.

                  11.2.3.  Upon the determination of any such dispute, the
                           arbitrators shall bill the costs attributable to
                           such binding arbitration to the losing Party;
                           provided, however, that the arbitrators shall be
                           empowered to apportion such costs between the
                           Parties if they deem it appropriate.

                  11.2.4.  It is the intent of the Parties that, once
                           arbitration is invoked by either Party pursuant to
                           the provisions of this Section 11, the matters set
                           for arbitration shall be decided as set forth
                           herein, and they shall not seek to have this Section
                           11 rendered unenforceable or to have such matter
                           decided in any other way; provided, however, that
                           nothing herein shall prevent the Parties from
                           negotiating a settlement of any issue at any time.

                  11.2.5.  Without limiting any of the foregoing, for purposes
                           of this CO&M Agreement an independent determination
                           of whether an action or failure to act constitutes
                           Prohibited Conduct shall be made by arbitration
                           pursuant to this Section 11, without regard to the
                           findings of any court or administrative body or the
                           settlement or compromise of any claim (other than a
                           settlement of the type referred to in Section 11.2.4
                           above).

12.      SPECIAL AND CONSEQUENTIAL DAMAGES. The indemnification provided in
         Section 7 of this CO&M Agreement shall include without limitation
         claims made by any Person for special, indirect, consequential or
         punitive damages; otherwise, neither Party shall have any liability
         hereunder to the other Party for any special, indirect, consequential
         or punitive damages.

13.      GENERAL.

         13.1.    EFFECT OF AGREEMENT; AMENDMENTS. This CO&M Agreement,
                  together with the Operating Agreement, constitutes the entire
                  agreement among the Parties with respect to the subject
                  matter hereof and supersedes all prior agreements and
                  understandings, oral and written, among the Parties with
                  respect to the subject matter hereof. This CO&M Agreement can
                  be amended, restated or supplemented only by the written
                  agreement of the Operator and the Company.

         13.2.    NOTICES. Except as expressly set forth to the contrary in
                  this CO&M Agreement, all notices, requests, or consents
                  provided for or permitted to be given under this CO&M
                  Agreement must be in writing. Notices and other
                  communications will be deemed to have been given (a) on the
                  date when delivered by hand or by

                                                18
<PAGE>

                  means of electronic transmission (and followed by electronic
                  confirmation of receipt), (b) on the date after the day when
                  deposited for delivery with a nationally recognized air
                  courier, or (c) on the third Business Day after being
                  deposited in the United States mail, postage prepaid return
                  receipt requested. All notices, requests, and consents to be
                  sent to the Operator must be given to the Operator at the
                  following addresses: Dominion Transmission, Inc., 445 West
                  Main Street, Clarksburg WV 26301 Attn: Gary L. Sypolt, if by
                  mail or Dominion Transmission, Inc. Fax number (304) 627-3323
                  Attn: Gary L. Sypolt if by facsimile transmission and if
                  regarding billing and invoicing matters to Dominion
                  Transmission, Inc., 445 West Main Street, Clarksburg WV 26301
                  Attn: Diane Logue if by mail or Dominion Transmission, Inc.
                  Fax number (304) 627-3253 Attn: Diane Logue if by facsimile
                  transmission. All notices, requests, and consents to be sent
                  to the Company must be given to the Management Committee at
                  the following addresses: Greenbrier Pipeline Company, LLC,
                  120 Tredegar Street, Richmond, VA 23219 Attn: Joseph J.
                  Kienle, if by mail or Greenbrier Pipeline Company, LLC, Fax
                  number (804) 819-2705 Attn: Joseph J. Kienle if by facsimile.
                  Whenever any notice is required to be given by law or this
                  CO&M Agreement, a written waiver thereof, signed by the
                  Person entitled to notice, whether before or after the time
                  stated therein, shall be deemed equivalent to the giving of
                  such notice.

         13.3.    COUNTERPARTS. This CO&M Agreement may be executed in any
                  number of counterparts with the same effect as if all Parties
                  had signed the same document. Each counterpart shall be
                  deemed an original, but all of which together shall
                  constitute one and the same instrument.

         13.4.    WAIVER. A waiver or consent, expressed or implied, to or of
                  any breach or default by any Person in the performance by the
                  Person of its obligations with respect to the Company or the
                  Operator is not a consent or waiver to or of any other breach
                  or default in the performance by that Person of the same or
                  any other obligations of that Person with respect to the
                  Company or the Operator. Failure on the part of a Person to
                  complain of any act of any Person or to declare any Person in
                  default with respect to the Company or the Operator,
                  irrespective of how long that failure continues, does not
                  constitute a waiver by the Person of its rights with respect
                  to that default until the applicable statute-of-limitations
                  period has run.

         13.5.    ASSIGNABILITY; SUCCESSORS. This CO&M Agreement may not be
                  assigned by either Party without the written consent of the
                  other Party; provided, however, that such consent shall not
                  be withheld unreasonably; provided, further, that this CO&M
                  Agreement may be pledged by the Company without the consent
                  of the Operator in connection with any Financing Commitment.
                  This CO&M Agreement and all of the obligations and rights
                  herein established

                                      19
<PAGE>

                  shall extend to and be binding upon and shall inure to the
                  benefit of the respective successors and permitted assigns of
                  the respective Parties hereto. Unless otherwise agreed, any
                  assignment of this CO&M Agreement shall not relieve the
                  assigning Party of any of its obligations hereunder.

         13.6.    THIRD PERSONS. Except as expressly provided in this CO&M
                  Agreement, nothing in this CO&M Agreement shall provide any
                  benefit to any third party or entitle any third party to any
                  claim, cause of action, remedy or right of any kind, it being
                  the intent of the Parties that this CO&M Agreement shall not
                  be construed as a third party beneficiary contract. Nothing
                  in this subsection 13.6 is intended to limit in any way the
                  right of a Member to bring a derivative action in the right
                  of the Company under Subchapter X of the Act. Further, in the
                  specific event that Operator's affiliates own more than fifty
                  (50) percent of the Membership Interests in the Company, then
                  any other Member of the Company that holds more than twenty
                  (20) percent of the Membership Interests in the Company may
                  independently pursue a cause of action against the Operator
                  regarding any breach of this CO&M Agreement by Operator if
                  such Member first makes written demand on the Company to
                  bring an action with respect to the breach of this CO&M
                  Agreement by Operator specified in such demand letter and
                  within thirty (30) days after such demand, the Company fails
                  to commence action to cause Operator to cure such breach of
                  this CO&M Agreement or to enforce the Company's rights
                  against Operator for such breach of this CO&M Agreement.

         13.7.    LAWS AND REGULATORY BODIES. This CO&M Agreement and the
                  obligations of the Parties hereunder are subject to all
                  applicable laws, rules, orders and regulations of
                  Governmental Authorities having jurisdiction, and to the
                  extent of conflict, such laws, rules, orders and regulations
                  of governmental authorities having jurisdiction shall
                  control.

         13.8.    SECTION NUMBERS; HEADINGS. Unless otherwise indicated,
                  references to Section numbers are to Sections of this CO&M
                  Agreement. Headings and captions are for reference purposes
                  only and shall not affect the meaning or interpretation of
                  this CO&M Agreement.

         13.9.    SEVERABILITY. If any provision of this CO&M Agreement or the
                  application thereof to any Person or circumstance is held
                  invalid or unenforceable to any extent, the remainder of this
                  CO&M Agreement and the application of that provision to other
                  Persons or circumstances is not affected thereby and that
                  provision shall be enforced to the greatest extent permitted
                  by law.

         13.10.   FURTHER ASSURANCES. In connection with this CO&M Agreement
                  and the transactions contemplated hereby, each Party shall
                  execute

                                       20
<PAGE>

                  and deliver any additional instruments and documents and
                  perform any acts and things as may be necessary or
                  appropriate to effectuate and perform the terms and
                  provisions of this CO&M Agreement and those transactions.

                                       21
<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this CO&M Agreement to be
executed by their duly authorized representatives as of the date first above
written.

OPERATOR:                          COMPANY:

Dominion Transmission, Inc.            Greenbrier Pipeline Company, LLC
                                       By each of its Members:

By:                                    DOMINION GREENBRIER, INC.
   -----------------------------
   Gary L. Sypolt
   Senior Vice President -
        Transmission

                                       By:
                                          -----------------------------------
                                          Georgia B. Carter
                                          Vice President - Tariff Services

                                       PIEDMONT GREENBRIER
                                         PIPELINE COMPANY, LLC

                                       By:
                                          -----------------------------------
                                          Ware F. Schiefer
                                          President

                                       22
<PAGE>

1.

2.

3.

4.

5.

6.

7.

8.       INSURANCE.

                  8.1.     During the construction of the Facilities, the
                           Operator shall cause to be carried and maintained,
                           either directly or through the contractor(s) building
                           the Facilities, the equivalent of all-risk builders
                           risk insurance, including the perils of Flood and
                           Earthquake, if available and deemed affordable, and
                           including mutually acceptable sublimits of Transit,
                           Offsite Storage and Transit for the full replacement
                           value of the work with all coinsurance waived and
                           "permission to occupy" granted. The insurance shall
                           name the Operator and the Company as insureds, as
                           their respective interests may appear.

                  8.2.     At all times during the Operation of the Facilities,
                           the Operator shall provide (a) workers' compensation
                           insurance granting full compensation under the
                           worker's compensation law of any state in which
                           operations are conducted, and (b) employer's
                           liability insurance with limits of not less than
                           $2,000,000 per occurrence for all of the Operator's
                           employees engaged in work on the Facilities, and (c)
                           automobile liability insurance for all vehicles
                           owned or used by the Operator, covering injuries to
                           or death of Persons and damage to property, with a
                           combined single limit of not less than $2,000,000
                           per occurrence.

                  8.3.     If permitted by applicable law, the Operator may
                           self-insure the workers' compensation, employer's
                           liability insurance, and automobile liability
                           insurance required above and, up to $1,000,000 per
                           occurrence or such other amounts as the Company
                           authorizes by Supermajority Vote, the general
                           liability insurance required in section 8.4 below.

                  8.4.     To be effective as of the Execution Date, Operator
                           shall procure and maintain for the benefit of
                           Company and Operator general liability and/or

<PAGE>

                           excess liability insurance with limits of not less
                           than $10,000,000 per occurrence for bodily injury
                           and property damage combined. The Company and the
                           Operator will be the named insureds under such
                           insurance policy(ies). The Operator's parent and
                           Affiliates and the Members will be named as
                           additional insureds under such insurance
                           policy(ies). Such insurance policy(ies) will be
                           worded to provide primary insurance to the named
                           insureds and the above additional insureds with
                           respect to the Operation of the Facilities, and to
                           waive any rights of subrogation against the above
                           additional insureds. Within 15 days after execution
                           of this CO&M Agreement and annually thereafter,
                           Operator will have a certificate of insurance issued
                           evidencing this insurance upon the specific request
                           of the Company or any of its Members.

                  8.5.     The Operator will procure and maintain for the
                           benefit of and on behalf of the Company and the
                           Operator all-risk property insurance covering the
                           Facilities with no co-insurance, including coverage
                           for boiler and machinery, business interruption (at
                           the Company's option) and natural gas in the
                           possession of the Company. This insurance will be
                           placed into effect simultaneously with the
                           termination of the builder's risk insurance the
                           Operator is required to maintain under Section 8.1
                           of this CO&M Agreement. The Company and the Operator
                           will be the named insureds and loss payees under
                           such insurance policy. This insurance policy will
                           provide a waiver of any rights of subrogation
                           against the Operator's Parent and Affiliates and the
                           Members. Any insurance proceeds for any losses under
                           this policy will be applied against the cost to
                           repair or replace the Facilities.

                  8.6.     All policies of insurance shall be written with
                           carriers holding a current Best's rating of at least
                           A (or if not so rated, has a creditworthiness
                           comparable to such an A rated carrier), and shall
                           afford at least 60-days written notice in the event
                           of cancellation, non-renewal or material reduction
                           in the coverage required hereunder. The costs for
                           premiums, deductibles and self-insured retentions
                           for the insurance maintained by the Operator
                           pursuant to this CO&M Agreement shall be
                           reimbursable costs pursuant to Section 5 of this
                           CO&M Agreement. In addition, in the event the
                           Operator self-insures the general liability
                           insurance required above as HEREIN PERMITTED, the
                           Operator shall be reimbursed as provided in Section
                           2.9 of the Accounting Procedures.

<PAGE>

                                   EXHIBIT A

                                       TO

               CONSTRUCTION, OPERATING AND MAINTENANCE AGREEMENT

                              ACCOUNTING PROCEDURE

1.       GENERAL PROVISIONS

         1.1.     STATEMENTS AND BILLINGS. Commencing on the first Business Day
                  after the Execution Date, the Operator shall bill the Company
                  on the first Business Day of each Month or as soon as
                  practicable thereafter for the estimated costs and expenses
                  for the Month, including any adjustment that may be necessary
                  to correct prior estimated billings to actual costs. If
                  requested by the Company, the Operator will promptly provide
                  reasonably sufficient support for the estimated costs and
                  expenses to be incurred for the Month. Actual bills will be
                  summarized by appropriate classifications indicative of the
                  nature thereof and will be accompanied by such detail and
                  supporting documentation as the Company may reasonably
                  request.

         1.2.     PAYMENT BY COMPANY. The Company shall pay all bills presented
                  by the Operator as provided in the CO&M Agreement and the
                  Operating Agreement on or before the fifteenth (15th) Day
                  after the bill is received. If payment is not made within
                  such time, the unpaid balance shall bear interest until paid
                  at the Default Rate.

         1.3.     FINANCIAL RECORDS. The Operator shall maintain accurate books
                  and records in accordance with Required Accounting Practice
                  covering all of the Company's activities and the Operator's
                  actions under this CO&M Agreement.

         1.4.     PURCHASE OF MATERIALS. It is contemplated that most material,
                  equipment and supplies will be owned by the Company and
                  purchased or furnished for its account. So far as is
                  reasonably practical and consistent with efficient, safe and
                  economical operation as determined by the Operator, only such
                  material shall be obtained for the Facilities as may be
                  required for immediate use, and the accumulation of surplus
                  stock shall be avoided. To the extent reasonably possible,
                  the Operator shall take advantage of discounts available by
                  early payments and pass such benefits on to the Company.

         1.5.     INTEREST-BEARING ACCOUNT. To the extent practicable, the
                  funds of the Company will be held in one or more
                  interest-bearing accounts.

                                      A-l
<PAGE>

2.       COSTS AND EXPENSES

Subject to the limitations hereafter prescribed and the provisions of the CO&M
Agreement, the Operator shall charge the Company for all costs and expenses
provided for in Section 5.1.2 of the CO&M Agreement, including, but not limited
to, the following items

         2.1.     Rentals. All rentals paid by the Operator.

         2.2.     Labor Costs. All applicable personnel generating the
                  following labor costs shall keep time sheets so that the
                  portion of their salaries and wages chargeable under the CO&M
                  Agreement may be supported and calculated, and only such
                  proportionate part of such labor costs shall be charged
                  pursuant to this Section 2.2:

                  2.2.1.   Salaries and wages of employees of the Operator and
                           its Affiliates, engaged in connection with the
                           Operation of the Facilities and, in addition,
                           amounts paid as salaries and wages of others
                           temporarily employed in connection therewith. Such
                           salaries and wages shall be loaded to include the
                           Operator's actual costs of bonuses, holiday,
                           vacation, sickness and jury service benefits and
                           other customary allowances for time not worked paid
                           to Persons whose salaries and wages are chargeable
                           under this Section 2.2.1. Direct labor charges shall
                           be billed so far as costs can be identified and
                           related to the performance of the Operator's duties
                           under this CO&M Agreement. As used in this CO&M
                           Agreement, "Direct Labor" shall include labor costs
                           in Sections 2.2.1, 2.2.2, and 2.2.3 of this CO&M
                           Agreement.

                  2.2.2.   Expenditures or contributions made pursuant to
                           assessments imposed by Governmental Authority that
                           are applicable to salaries, wages and costs
                           chargeable under Section 2.2.1 above, including, but
                           not limited to, FICA taxes and federal and state
                           unemployment taxes.

                  2.2.3.   The costs of plans incurred by or on behalf of the
                           Operator for workers' compensation, employers' group
                           life insurance, hospitalization, disability,
                           pension, retirement, savings and other benefit
                           plans, that are applicable to salaries and wages
                           chargeable under Section 2.2.1 above. Such costs
                           shall be charged on the basis of a percentage
                           assessment on the amount of salaries and wages
                           chargeable under Section 2.2.1 above.

                                      A-2
<PAGE>

                  2.2.4    All other administrative and general expenditures,
                           including salaries and wages, bonuses, related
                           benefits and expenses of personnel of the Operator
                           and/or the Operator's Affiliates (excluding the
                           personnel who have direct billed in Section 2.2.1)
                           who render services for the benefit of the Operator
                           (in the performance of its obligations hereunder) or
                           the Company, shall be charged from the Execution
                           Date at five percent (5%) of Direct Labor costs
                           charged under this CO&M Agreement

         2.3.     REIMBURSABLE EXPENSES OF EMPLOYEES. Reasonable personal
                  expenses of Operator's and Operator's Affiliate's employees
                  reasonably incurred in connection with the performance of the
                  Operator's duties under this CO&M Agreement. As used herein,
                  the term "personal expenses" shall mean out-of-pocket
                  expenditures incurred by Operator's or Operator's Affiliate's
                  employees in the performance of their duties and for which
                  such employees are reimbursed. The Operator shall maintain
                  documentation for such expenses in accordance with the
                  standards of the Internal Revenue Service.

         2.4.     MATERIAL, EQUIPMENT AND SUPPLIES. Material, equipment and
                  supplies purchased or furnished from the warehouse or other
                  properties of the Operator or Operator's Affiliates, priced
                  at cost plus the Operator's or Affiliate's appropriate
                  purchasing and stores overhead ordinarily in use by the
                  Operator or Affiliate.

         2.5.     TRANSPORTATION. Transportation of employees, equipment and
                  material and supplies necessary for the Operation of the
                  Facilities.

         2.6.     SERVICES. The cost of contract services and utilities
                  procured from outside sources.

         2.7.     LEGAL EXPENSES AND CLAIMS. All costs and expenses of
                  handling, investigating and settling litigation or claims
                  arising by reason of the Operation of the Facilities or
                  necessary to protect or recover any Facilities or property,
                  including, but not limited to, attorney's fees, court costs,
                  costs of investigation or procuring evidence and any
                  judgments paid or amounts paid in settlement or satisfaction
                  of any such litigation or claims. All judgments received or
                  amounts received in settlement of litigation with respect to
                  any claim asserted on behalf of the Company shall be for the
                  benefit of and shall be remitted to the Company.

         2.8.     TAXES. All taxes (except those measured by income) of every
                  kind and nature assessed or levied upon or incurred in
                  connection with the Operation of the Facilities or on the
                  Facilities or other property of the Company and which taxes
                  have been paid by the Operator for the benefit of the
                  Company, including charges for late payment arising from

                                      A-3
<PAGE>

                  extensions of the time for filing that are caused by the
                  Company, or that result from the Operator's good faith
                  efforts to contest the amount or application of any tax.

         2.9.     INSURANCE. Net of any returns, refunds or dividends, all
                  premiums, deductibles and self-insured retentions paid and
                  expenses incurred for insurance required to be carried under
                  this CO&M Agreement, provided, however, the insurance
                  required to be carried under Section 8.2 of this CO&M
                  Agreement shall be reimbursed through the five percent A&G
                  charge in Section 2.2.4 of this Exhibit A.

         2.10.    PERMITS, LICENSES AND BOND. Cost of permits, licenses and
                  bond premiums necessary in the performance of the Operator's
                  duties.

                                           A-4<PAGE>
                                                                   Exhibit 10.49
                               PRECEDENT AGREEMENT
                         FOR FIRM TRANSPORTATION SERVICE
                          (GREENBRIER PIPELINE PROJECT)

         THIS PRECEDENT AGREEMENT dated as of this 1st day of September 2001, by
and between GREENBRIER PIPELINE COMPANY, LLC ("Pipeline") and PIEDMONT NATURAL
GAS COMPANY, INC. ("Customer"), sometimes jointly called "the Parties."

         WHEREAS, Pipeline is proposing to construct a large-diameter, high
pressure natural gas pipeline that would stretch from a proposed interconnection
with Dominion Transmission, Inc. in central West Virginia to markets in north
central North Carolina (the "Greenbrier Pipeline Project").

         WHEREAS, an "open season" was conducted in the fall of last year
seeking customer interest in the Greenbrier Pipeline Project and Customer has
indicated an interest in entering into an arrangement for the firm
transportation of natural gas pursuant to the terms and conditions as fully
described in this Precedent Agreement.

         WHEREAS, subject to the terms and conditions of this Precedent
Agreement, Pipeline is willing to provide such firm transportation service for
Customer as part of the Greenbrier Pipeline Project commencing as soon as all
necessary rights and regulatory approvals are received and accepted by Pipeline
and as the necessary facilities are constructed and ready for service.

         NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, and intending to be legally bound, Pipeline and Customer agree
as follows:

<PAGE>

         1.       REGULATORY AUTHORIZATIONS

         Pipeline shall proceed with due diligence to obtain the governmental
and regulatory authorizations required for the construction and operation of
project facilities, leasing of capacity rights on other pipelines, if necessary,
and the provision of the services contemplated herein. Pipeline, however,
reserves the right to file and prosecute applications for such authorizations,
any supplements or amendments thereto, and, if necessary, any court review, in
such manner as it deems to be in its best interest. Customer agrees to support
all applications for such governmental and regulatory authorizations to the
extent such governmental and regulatory authorizations are consistent with the
terms of this Precedent Agreement.

         2.       PREPARATIONS FOR CONSTRUCTION

         Upon the Parties' execution of this Precedent Agreement, Pipeline
shall, with due diligence and in timely fashion, proceed to seek such contract
rights, property rights, financial arrangements and regulatory approvals and
make other necessary preparations in order to enable Pipeline to provide to
Customer the firm transportation service contemplated by this Precedent
Agreement. Notwithstanding anything to the contrary set forth in this Precedent
Agreement, Pipeline may make contractual arrangements to order or acquire
equipment, materials, and properties, design, construct, and/or lease
facilities, and incur other costs to provide such firm transportation service,
but shall not be under any obligation to do so until Pipeline receives all
necessary certificates and other authorizations required by the FERC and any
other governmental authority.

                                       2
<PAGE>

         3.        TRANSPORTATION SERVICE AGREEMENT

         Within thirty (30) days after fulfillment of the conditions precedent
in Paragraph 4, Pipeline and Customer shall enter into a firm transportation
agreement ("Transportation Service Agreement"), provided that this Precedent
Agreement shall not have been previously terminated pursuant to Paragraph 7,
below. The Transportation Service Agreement shall substantially conform to the
form of service agreement that the FERC will approve as part of its action in
granting the necessary authorizations to Pipeline, as referenced in Paragraph 1,
above. The Transportation Service Agreement shall provide for:

         a.       The maximum quantities of natural gas that Pipeline shall
                  transport for Customer including the quantities that Pipeline
                  will receive from Customer at the primary receipt point(s) and
                  the quantities that Pipeline shall be obligated to redeliver
                  to Customer at the primary delivery point(s) as set forth in
                  Exhibit A, attached hereto.

         b.       Customer to pay the agreed-to negotiated, levelized rate, plus
                  fuel retention and applicable surcharges (e.g., ACA) all as
                  described on Exhibit A, attached hereto, and any other
                  applicable charges, surcharges and penalties set forth in the
                  approved FERC Gas Tariff.

         c.       The term of service shall commence on the November 1 or
                  December 1 first following the date that Pipeline notifies
                  Customer that it is prepared to transport gas for Customer
                  under the Transportation Service Agreement ("Commencement
                  Date"). Service shall not commence earlier than November 1,
                  2005, nor later than December 1, 2006. Service pursuant to the
                  Transportation Service Agreement shall continue for the
                  primary term as set forth in Exhibit A, and from year to year
                  thereafter; provided

                                       3
<PAGE>

         however, that either Party may terminate the Transportation Service
         Agreement after the primary term, by giving written notice to the other
         at least twenty-four (24) months prior to the start of a contract year.

         4.       CONDITIONS PRECEDENT

         Pipeline's and Customer's rights and obligations under this Precedent
Agreement and the Transportation Service Agreement are expressly made subject to
satisfaction or waiver of the following conditions precedent:

                  A.       Only Pipeline shall have the right to determine, in
its reasonable opinion, that the conditions set forth below in this Paragraph
4.A. are satisfactory to it and/or whether to waive any such condition:

                  (i)      the receipt by Pipeline on or before September 1,
                           2003, of all necessary certificates and other
                           authorizations from the FERC, and any other
                           governmental authorities having jurisdiction, to (i)
                           own, construct, operate and maintain the Greenbrier
                           Pipeline Project facilities and any necessary related
                           facilities and (ii) to render the firm transportation
                           service to Customer pursuant to the rates, terms and
                           conditions reflected in the proposed tariff,
                           including the tariff provisions necessary to
                           authorize the negotiated rates reflected in this
                           Precedent Agreement, which authorizations are in form
                           and substance satisfactory to Pipeline;

                  (ii)     the receipt by Pipeline, within thirty days of
                           Pipeline's acceptance of a Certificate of Public
                           Convenience and Necessity from the FERC, of the
                           approval of its Management Committee, to make the
                           expenditures necessary to enable Pipeline to
                           construct, own, operate and maintain the necessary
                           facilities to render the firm transportation service
                           as contemplated in this Precedent Agreement; and,

                   (iii)   execution by Pipeline of sufficient precedent
                           agreements and service agreements with customers to
                           economically justify, in Pipeline's sole opinion,
                           construction of the Greenbrier Pipeline Project.

                                       4
<PAGE>

                  B.       Only Customer shall have the right to determine, in
its reasonable opinion, that the conditions set forth below in this Paragraph
4.B. are satisfactory to it and/or whether to waive any such condition:

                  (i)      the receipt by Customer, on or before January 1,
                           2002, of any necessary approvals of its Board of
                           Directors, the Board of Directors of its parent, or
                           the applicable equivalent management body to enter
                           into the Transportation Service Agreement upon the
                           satisfaction or waiver of the other conditions
                           precedent contained in this Precedent Agreement;

                  (ii)     the receipt by Customer of such approvals, if any,
                           requested by it from any state regulatory commissions
                           having jurisdiction over it or this Precedent
                           Agreement and the ability to recover its costs under
                           the Transportation Service Agreement in its rates,
                           any such approvals to be received not later than July
                           1, 2002, in a form consistent with the terms of this
                           Precedent Agreement and satisfactory to Customer in
                           its reasonable opinion; and,

                  (iii)    the approval by the FERC prior to September 1, 2003,
                           as part of the order granting Pipeline a Certificate
                           of Public Convenience and Necessity, of Pipeline's
                           proposal to render firm transportation service to
                           Customer pursuant to the rates, terms and conditions
                           reflected in the proposed tariff, including the
                           tariff provisions necessary to authorize the
                           negotiated rates reflected in this Precedent
                           Agreement, which authorizations are in form and
                           substance satisfactory to Customer.

         If any of the conditions precedent set forth in this Paragraph 4 have
not been satisfied or waived by the applicable date set forth herein, either
party shall have the right to provide written notice to the other party of its
intention to terminate this Precedent Agreement. Such notice shall designate all
conditions precedent that have not been satisfied. Unless all such conditions
are satisfied within 30 days after the receipt of such notice, this Precedent
Agreement shall terminate effective upon the expiration of said 30-day period
and shall thereafter be of no further force and effect; provided, however, that
in no event shall a party have the right to terminate this Precedent Agreement
if the failure to satisfy a condition precedent is caused by the failure of such
party to act in a timely manner and/or to use reasonable efforts to satisfy the
condition precedent. If this Precedent Agreement is terminated pursuant to this
Paragraph 4, such termination shall be

                                       5
<PAGE>

without liability for damages, costs or expenses of either party to the other
party, or to any of its shareholders, directors, officers, employees, agents,
consultants, representatives, and neither Pipeline nor Customer shall have any
further rights or obligations whatsoever pursuant to this Precedent Agreement.

         5.         COMMENCEMENT OF TRANSPORTATION SERVICE

         After execution of the Transportation Service Agreement by Customer and
Pipeline pursuant to Paragraph 3 above, and Pipeline's receipt and acceptance of
all other necessary contract rights, property rights, financing arrangements and
regulatory approvals, in a form and substance satisfactory to Pipeline in its
sole opinion, Pipeline shall proceed with the construction of the facilities so
as to begin firm transportation service on November 1, 2005. If Pipeline is
unable to complete such construction and place such facilities into operation by
such proposed in service date despite its exercise of due diligence, Pipeline
shall continue to proceed with due diligence to complete such construction,
place such facilities in operation and commence service for Customer at the
earliest practicable date thereafter (but no later than December 1, 2006).
Pipeline shall not be liable in any manner to Customer if despite Pipeline's
exercise of due diligence, Pipeline is unable to complete the construction of
such facilities and commence firm transportation service contemplated herein by
December 1, 2006. Pipeline agrees to provide advance written notice of the
projected in-service date and inform the Customer of its best estimate of any
revisions to the in-service date for the Greenbrier Pipeline Project.
Notwithstanding the foregoing, if the Management Committee shall not have
accepted the FERC Certificate of Public Convenience and Necessity on or before
November 1, 2004, Customer shall have no obligation to take or to pay for any
service prior to November 1, 2006.

                                       6
<PAGE>

          6.        CUSTOMER REIMBURSEMENT OBLIGATION

          Should Customer terminate this Precedent Agreement or refuse to sign
the Transportation Service Agreement as provided by Paragraph 3, above, in
either case for any reason other than the failure of the conditions precedent
described in Section 4.B., above, then Customer shall, at the option of
Pipeline, reimburse Pipeline for 17.19% of the actual and verifiable costs
incurred prior to such termination by Pipeline in its efforts to provide the
services proposed as part of the Greenbrier Pipeline Project and not previously
reimbursed. Costs to be incurred by Pipeline shall include, but shall not be
limited to, costs associated with engineering, environmental, regulatory, legal
activities, and internal overhead and administration, and incurred costs
related to pipeline, compression, measurement and regulation material and
equipment, and construction supplies and labor. Pipeline shall use all
reasonable efforts to mitigate any costs incurred, including but not limited
to, reselling any capacity created to which Customer has subscribed in this
Precedent Agreement and employing any assets or work products generated as a
part of the Greenbrier Pipeline Project for other business purposes. The
Parties understand and agree that this provision is intended to reimburse
Pipeline for actual and verifiable costs incurred by Pipeline to meet its
obligation hereunder and is not intended to penalize Customer or otherwise
provide Pipeline with additional revenue or profit above such actual costs
incurred for the Greenbrier Pipeline Project. If this Precedent Agreement is
terminated because of Pipeline's failure to satisfy a condition precedent as
described in Paragraph 4.A., then Customer shall not be obligated to reimburse
Pipeline for any costs incurred to provide the services proposed as part of the
Greenbrier Pipeline Project. Customer's reimbursement obligation to Pipeline
pursuant to this Paragraph 6 shall not exceed the cumulative amount shown on
Exhibit B (attached hereto and made a part hereof for

                                       7
<PAGE>

all purposes) for the calendar quarter corresponding to the date on which
Customer terminates the Agreement.

         7.      CREDITWORTHINESS

         Pipeline may terminate this Precedent Agreement if, at any time, it has
a reasonable basis to determine that Customer is no longer creditworthy and may
not be able to carry out its obligations under this Precedent Agreement or the
Transportation Service Agreement. At Pipeline's request, Customer shall provide
Pipeline with financial information relevant to the Pipeline's determination of
creditworthiness.

         8.      NOTICE

         Any notice that either party may desire to give to the other, shall be
in writing and sent to the attention of the appropriate person to the applicable
post office address or telephone fax number set forth below:

         Pipeline:         Greenbrier Pipeline Company, LLC
                           120 Tredegar Street
                           Richmond, Virginia 23219
                           Attention: Joseph Kienle
                           Phone: (804) 819-2114
                           Fax: (804) 819-2705

          CUSTOMER:        Piedmont Natural Gas Company, Inc.
                           1915 Rexford Road
                           Charlotte, North Carolina 28211
                           Attention: Director-Federal Regulatory & Supply
                           Planning
                           Phone:(704) 364-3120
                           Fax: (704) 364-8320

or any such other address as either party shall designate by formal written
notice.

         9.         AUTOMATIC TERMINATION

                                       8
<PAGE>

         This Precedent Agreement shall terminate by its express terms on the
date of commencement under the Transportation Service Agreement, and thereafter
Pipeline's and Customer's respective rights and obligations related to the
transactions contemplated herein shall be determined pursuant to the terms and
conditions of the Transportation Service Agreement and Pipeline's FERC Gas
Tariff as amended from time to time.

         10.     ASSIGNMENTS

         Any individual or entity that shall succeed by purchase, merger or
consolidation of the properties of Pipeline or Customer shall be entitled to the
rights and shall be subject to the obligations of its predecessor in interest
under this Precedent Agreement. Either Party may, without prior consent of the
other Party, pledge, mortgage or assign its rights hereunder as security for its
indebtedness. With respect to the foregoing sentence, Customer and Pipeline
hereby agree to execute and deliver to any pledgee or mortgagee of the other
Party a consent to assignment to the extent such consent does not materially
alter any of the terms and conditions of this Precedent Agreement. Customer may
assign this Precedent Agreement or any of the rights and obligations hereunder
provided that (i) the assignee meets Pipeline's creditworthiness standards and
any other applicable requirements set forth in Pipeline's FERC Gas Tariff as
approved by the FERC, or (ii) Customer remains liable for any and all financial
obligations arising under this Agreement. Any assignment hereof shall be subject
to the receipt and acceptance by Pipeline of any necessary regulatory or
governmental authorizations. This Precedent Agreement shall be binding upon and
shall inure to the benefit of the respective authorized successors and assigns.

         11.     JOINTLY PREPARED AGREEMENT

                                       9
<PAGE>

          Every provision of this Precedent Agreement shall be considered as
prepared through the joint efforts of the Parties and shall not be construed
against either Party as a result of the preparation or drafting thereof. It is
expressly agreed that no consideration shall be given or presumption made on the
basis of who drafted this Precedent Agreement or any particular provision
hereof.

         12.     NO THIRD-PARTY BENEFICIARY

         Except as expressly provided in this Precedent Agreement, nothing
herein expressed or implied is intended or shall be construed to confer upon or
to give any person not a Party hereto any rights, remedies or obligations under
or by reason of this Precedent Agreement.

         13.     RELATED DOCUMENTS

         Each Party agrees to execute and deliver all such other and additional
instruments and documents and to do such other acts as may be reasonably
necessary to effectuate the terms and provisions of this Precedent Agreement.

         14.     GOVERNING LAW

         The interpretation and performance of this Precedent Agreement shall be
in accordance with the laws of the State of Delaware.

         15.     PRECEDENT AGREEMENT IS NOT AN OFFER

         The delivery of this Precedent Agreement to Customer for execution does
not constitute an offer. This Precedent Agreement requires execution by both
parties to create a binding contractual commitment. This Precedent Agreement can
be modified only by a written agreement of the parties.

                                       10

<PAGE>

         16.     AGREEMENT SUBJECT TO APPLICABLE LAWS

         This Precedent Agreement and the obligations of the parties hereunder
are subject to all applicable laws, rules, orders and regulations of
governmental authorities having jurisdiction and, in the event of a conflict
between the provisions of this Precedent Agreement and such laws, rules, orders
and regulations, such laws, rules, orders and regulations shall control.

         17.     WAIVER

         No waiver of either party of any default by the other party in the
performance of any provision, condition or requirement herein shall be deemed to
be a waiver of, or in any manner release the other party from, future
performance of any other provision, condition or requirement herein, nor shall
such waiver be deemed to be a waiver of, or in any manner release the other
party from, future performance of the same provision, condition or requirement.
Any delay or omission of either party to exercise any right hereunder shall not
impair the exercise of any such right, or any like right, accruing to it
thereafter.

         18.     REFLECTS THE WHOLE AGREEMENT OF THE PARTIES

         This Precedent Agreement reflects the whole and entire agreement of the
parties hereto and supersedes all prior agreements related to the subject matter
hereof.

                                       11
<PAGE>

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

ATTEST                              GREENBRIER PIPELINE COMPANY, LLC

/s/ Todd B. Rhoads                  By:   /s/ Georgia B. Carter
-----------------------------             -------------------------------------
                                             Georgia B. Carter

                                    Title:  Vice President-Tariff Services
                                          -------------------------------------

                                    PIEDMONT NATURAL GAS COMPANY, INC.

/s/ K. T. Valentine                 By:   /s/ Thomas E. Skains
-----------------------------             -------------------------------------
                                             Thomas E. Skains

                                    Title:  Senior Vice President
                                          -------------------------------------

                                       12
<PAGE>

                                    EXHIBIT A

                 To The Firm Transportation Precedent Agreement
                            Dated September 1, 2001

                    Between Greenbrier Pipeline Company, LLC
                     And Piedmont Natural Gas Company, Inc.

A.       Quantities

         The maximum quantities of gas that Pipeline shall transport for
Customer shall be a Maximum Daily Transportation Quantity ("MDTQ") of 150,000
Dekatherms ("Dt") per day for the period from November 1 to March 31 of each
year.

B.       Point(s) of Receipt

         The Primary Point(s) of Receipt and the maximum quantities for such
point shall be as set forth below. Each of the parties will use due care and
diligence to ensure that pressures will be maintained within normal operating
tolerances at the Point(s) of Receipt as reasonably may be required to render
service hereunder. In addition to the quantities specified below, Customer may
increase the quantities furnished to Pipeline at the Point(s) of Receipt, so
long as such quantities, when reduced by the fuel retention percentage specified
in Pipeline's then-effective FERC Gas Tariff, do not exceed the quantity
limitation specified below for the Primary Point(s) of Receipt.

         1.       Up to 150,000 Dt per day at Pipeline's Cornwell Receipt Point,
                  which shall include points of interconnection between the
                  facilities of Pipeline and Dominion Transmission, Inc. ("DTI")
                  and between Pipeline and Tennessee Gas Pipeline Company
                  ("Tennessee"), both in Kanawha County, West Virginia.

                                       13
<PAGE>

C.       Point(s) of Delivery

         Each of the parties will use due care and diligence to ensure that
pressures will be maintained within normal operating tolerances at the Point(s)
of Delivery as reasonably may be required to render service hereunder, but
Pipeline shall not be required to deliver gas (or to cause gas to be delivered)
at greater than 850 pounds per square inch gauge. The Primary Point(s) of
Delivery shall be as follows:

         Up to 150,000 Dt per day, at a pressure sufficient to enable deliveries
at an existing connection between the facilities of Pipeline and
Transcontinental Gas Pipe Line Corporation in Rockingham County, North Carolina,
known as the Rockingham Connection.

D.       Term

         The primary term shall be for fifteen (15) years starting on the
Commencement Date.

E.       Rates

         1.       Customer shall pay Pipeline the rates, charges, surcharges,
penalties, and fuel retention percentages pursuant to its approved FERC Gas
Tariff, except that, for service within Customer's MDTQ, Customer shall be
entitled to a negotiated rate consisting of:

                  a.       A reservation charge payable in five monthly
                           installments of $16.61 per Dt payable over each of
                           the five winter months (November through March) over
                           the contract term (equivalent to 55 cents per Dt on a
                           100% load factor basis).

                  b.       The commodity charge for ACA and other FERC-mandated
                           surcharges, now $0.0022 per Dt of throughput.

                  c.       Fuel retention: 1.1% of quantities received by
                           Pipeline.

                                       14
<PAGE>

         2.       The rates in Items a. and c., above, and the overall
negotiated rate structure shall not be subject to change by either Pipeline or
Customer during the primary term of the Transportation Service Agreement, except
as follows:

         a.       Pipeline agrees to reduce Customer's firm winter-period
                  reservation charge of $16.61 per Dt if the FERC approves a
                  year-round firm transportation service recourse reservation
                  charge for Pipeline that is lower than $9.2572 per Dt. In such
                  event, Customer's $16.61 per Dt firm winter-period reservation
                  charge shall be reduced by the same proportion as the
                  FERC-approved reduction in the year-round firm transportation
                  service recourse reservation charge from $9.2572 per Dt.
                  Nothing in this paragraph shall be construed to require
                  Pipeline to accept a certificate that includes a FERC-mandated
                  reduction in its filed recourse rate(s).

         b.       Pipeline agrees to reduce Customer's firm winter-period
                  reservation charge of $16.61 per Dt if, in any year during the
                  primary term of the Transportation Service Agreement, a new
                  shipper, sponsored by Customer, agrees to purchase summer-
                  period firm capacity from Pipeline for a reservation charge
                  greater than $4.0049 per Dt. In such event, Customer's firm
                  winter-period reservation charge for that year, for an MDTQ
                  equal to that subscribed to by the sponsored summer-period
                  shipper, shall be reduced to a firm winter-period reservation
                  charge that would allow Pipeline to collect annual revenues
                  from such combined winter-period and summer-period MDTQs
                  equivalent to annual revenues based on a year-round
                  reservation charge of $9.2572 per Dt. To determine whether the
                  summer-period firm transportation shipper is "sponsored by
                  Customer," Pipeline must receive, prior to the start of any
                  contract year, a written affidavit, executed by such shipper,
                  attesting that absent the consideration provided by Customer,
                  shipper would not have paid the reservation charge that it
                  agreed to for summer-period firm transportation service.

         c.       Customer shall have a one-time right to convert all or a
                  portion of its service from a 151-day firm transportation
                  service to a year-round firm transportation service. The
                  conversion right may be exercised by Customer at any time
                  prior to the date that the Parties execute the Transportation
                  Service Agreement in accordance with Paragraph 3 of this
                  Precedent Agreement, but the right is contingent upon Pipeline
                  having the year-round capacity available for sale. The
                  reservation rate payable for such service shall be $9.2572 per
                  Dt or 30.43 cents per Dt stated on a 100 percent load factor
                  basis.

         d.       Pipeline agrees to reduce Customer's negotiated rates to match
                  the rates payable by any similarly situated local distribution
                  company customer if such customer and Pipeline have agreed to
                  lower rates than reflected in Paragraph E of this Exhibit A.

                                       15
<PAGE>

                                    EXHIBIT B
      TO THE FIRM TRANSPORTATION PRECEDENT AGREEMENT DATED SEPTEMBER 1,2001
                    BETWEEN GREENBRIER PIPELINE COMPANY, LLC
                                       AND
                       PIEDMONT NATURAL GAS COMPANY, INC.
   SCHEDULE OF CUSTOMER'S MAXIMUM REIMBURSEMENT OBLIGATION INCLUSIVE OF AFUDC

<TABLE>
<CAPTION>
If Customer terminates on or      Total Cumulative Greenbrier          Piedmont's Maximum
   before the end of the:          Pipeline Estimated Capital        Reimbursement Obligation
                                             Costs                   (17.19% of total costs)
----------------------------      ---------------------------        ------------------------
<S>                               <C>                                <C>

     Third Quarter 2001                   $  4,513,391                    $   775,852
    Fourth Quarter 2001                   $  8,400,853                    $ 1,444,107
     First Quarter 2002                   $ 11,103,482                    $ 1,908,689
    Second Quarter 2002                   $ 12,858,029                    $ 2,210,295
     Third Quarter 2002                   $ 14,113,130                    $ 2,426,047
    Fourth Quarter 2002                   $ 16,284,963                    $ 2,799,385
     First Quarter 2003                   $ 17,441,688                    $ 2,998,226
    Second Quarter 2003                   $ 19,642,709                    $ 3,376,582
     Third Quarter 2003                   $ 25,105,263                    $ 4,315,595
    Fourth Quarter 2003                   $ 28,187,342                    $ 4,845,404
     First Quarter 2004                   $ 35,563,358                    $ 6,113,341
    Second Quarter 2004                   $ 68,652,188                    $11,801,311
     Third Quarter 2004                   $118,310,297                    $20,337,540
    Fourth Quarter 2004                   $134,192,028                    $23,067,610
     First Quarter 2005                   $140,547,531                    $24,160,121
    Second Quarter 2005                   $272,812,043                    $46,896,390
     Third Quarter 2005                   $422,060,959                    $72,552,278
    Fourth Quarter 2005                   $494,803,846                    $85,056,781
   And Following Quarters                 $497,100,000                    $85,451,490
</TABLE>

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