Document:

exv10w3

 

Exhibit 10.3

NORTH AMERICA AND UNITED KINGDOM

PARTNERS’ OPERATING AGREEMENT

     THIS NORTH AMERICA AND UNITED KINGDOM PARTNERS’ OPERATING AGREEMENT (this
“Agreement”) is entered into as of the 13th day of November 2003, among
DIAMONDCLUSTER INTERNATIONAL, INC., a Delaware corporation (the “Company”) and
those individuals designated by the Company or any “Affiliate” as a Partner
affiliated with the operations in North America and the United Kingdom (“NA/UK
Operations”) said individuals and all other persons who may hereafter be
designated by the Company or any Affiliate as “Partners” pursuant to the
provisions hereof, are referred to herein collectively as the “Partners” and
individually as a “Partner.” For purposes of this Agreement, the term
“Affiliate” shall mean any affiliate, subsidiary, or parent of, or any other
entity controlling, controlled by, or under common control of, the Company.

WITNESSETH:

     WHEREAS, the parties to this Agreement entered into that certain Partners’
Operating Agreement dated as of March 22, 1994, as amended by: (i) a certain
First Amendment to Diamond Technology Partners, Inc. Partners’ Operating
Agreement dated June 24, 1994; (ii) a certain Second Amendment to Diamond
Technology Partners, Inc. Partners’ Operating Agreement dated as of November
30, 1994; and (iii) a certain Third Amendment to Diamond Technology Partners,
Inc. Partners’ Operating Agreement dated as of April 27, 1995, whereby the
parties established a set of procedures relating to the utilization of the
combined voting power of the Partners’ shares of stock of the Company,
including internal governance and compensation provisions to be realized
through the strength of said combined voting power and whereby the parties
granted a proxy to the person holding the position of Chairman of the Board and
Chief Executive Officer of the Company and provided for the selection of any
successors to such Chief Executive Officer (“CEO”); (iv) a certain fourth
amendment and restatement of the Partners’ Operating Agreement dated as of
November 16, 2001 (collectively, the “Prior Partners’ Operating Agreement”);
and

     WHEREAS, the Board of Directors of the Company, having completed a
detailed review of the Company’s system of internal corporate governance in
light of the Sarbanes-Oxley Act and the corporate governance standards being
adopted for listed companies, has concluded that the Prior Partners’ Operating
Agreement needs to be superceded by this Agreement to assure continued
independence of the Board and to more closely align with best practices for
publicly-traded companies;

     WHEREAS, the parties wish to enter into this Agreement to incorporate the
corporate governance changes recommended by the Board and to reflect a new
geographic and strategic business unit (“SBU”) structure.

     NOW, THEREFORE, for and in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I

SUCCESSOR CEO

1.1. Selection of Successor.

     Upon any CEO of the Company ceasing to hold the office of CEO, his or her
successor shall be selected by the Board of Directors, upon recommendation of
the Nominating & Governance Committee of the Board. The Nominating & Governance
Committee may seek input from the CEO Nominating Commission (as constituted
pursuant to Section 1.2 below) in identifying potential CEO candidates.

1.2 Establishment of CEO Nominating Commission.

     In the event the Nominating & Governance Committee elects to seek input
from the Partners and any other partners affiliated with any other SBU of the
Company, such partners (collectively referred to herein as the “Global
Partners”), shall, as expeditiously as possible after receiving notice thereof
from such Committee, elect a five partner commission known as the CEO
Nominating Commission by means of the following procedures:

     (a) The Executive Committee (as constituted pursuant to Section 2.1
hereof) shall slate ten Global Partners as candidates for election to
the CEO Nominating Commission. Neither the current CEO nor any other
member of the Executive Committee shall be slated as a candidate for the
Commission. The five Global Partners receiving the highest number of
votes shall be deemed elected to the Commission. Once elected, the
members of the Commission shall designate a member to act as its
Chairman.

     (b) The CEO Nominating Commission shall gather input from the
remaining Global Partners as to potential candidates for a successor CEO
and shall act as a liaison between the Nominating & Governance Committee
and the Global Partners. The Commission shall consult with the Nominating
& Governance Committee upon request and provide input on the relative
strengths and weaknesses of the proposed CEO candidates.

     (c) Upon consideration of input from the CEO Nominating Commission,
if any is requested, and such other factors as it shall deem appropriate,
the Nominating & Governance Committee shall recommend a candidate as
successor CEO to the entire Board, who, upon receiving the affirmative
vote of a majority of the Board, shall become the successor CEO.

1.3. Removal of CEO.

     Notwithstanding the foregoing, the then current CEO shall be subject to
removal by the Board of Directors from said position at any time. In addition,
the Board of Directors shall consider the removal of, but shall not be
obligated to remove, the then current CEO upon the recommendation of each of
the following: (i) the Management Compensation Committee (as constituted
pursuant to Section 2.2 hereof), by a unanimous vote of its members, (ii) the

 

 

Nominating & Governance Committee, by a two-thirds (2/3) vote of its
members, and (iii) eighty percent (80%) of the Partners.

ARTICLE II

COMMITTEE STRUCTURE; ELECTION AND REMOVAL OF PARTNERS

2.1. Executive Committee

     There shall be an Executive Committee, consisting of the CEO and such
Global Partners as the CEO shall appoint from time to time (each of whom shall
be appointed for an indefinite term and who may be removed from such position
at any time by the CEO). The Executive Committee is a committee of the Global
Partners and may take any action within its authority for the Company and any
of its Affiliates.

2.2 Management Committee

     There shall be a Management Committee (“Management Committee”),
consisting of Partners appointed by the CEO (each of whom shall be appointed
for an indefinite term and who may be removed from such position at any time by
the CEO). The Management Committee is a committee of the Partners and may take
any action within its authority for the Company and any of the Affiliates as it
relates to the NA/UK Operations.

2.3 Management Compensation Committee

     There shall be a Management Compensation Committee, consisting of three
Partners, unless the CEO shall determine that a greater or lesser number is
appropriate. The members of the Committee shall be elected by the Partners to
serve staggered terms of three years each, with one member elected each year
(except for the three initial members of the committee, who shall be elected
for terms of one, two, and three years, respectively, with the Partner
receiving the most votes deemed elected to the longest term). The Management
Committee shall slate three nominees each year, and the Partner receiving the
highest number of votes shall be deemed elected to the committee (except with
respect to the initial members of the committee for whom the Management
Committee shall slate six nominees from which three shall be elected by the
Partners as indicated above). Except with respect to the selection of the
initial members of the committee, no member may serve consecutive terms.
Neither the CEO nor any Executive Committee or Management Committee member is
eligible to serve on the Committee. In the case of tie votes, death of a
Partner, the inability of a Partner to continue to serve, or a Partner’s
resignation from a committee or the Company, the CEO shall break the tie or
specify the replacement for such Partner. No Partner may serve simultaneously
on both the Management Compensation Committee and the Nominating Committee.

2.4 Nominating Committee

     There shall be a nominating committee (“Nominating Committee”), consisting
of three Partners. The members of the Committee will serve staggered terms of
three years each, with one member elected by the Partners each year (except for
the three initial members of the committee, who shall be elected for terms of
one, two, and three years, respectively, with the Partner receiving the most
votes deemed elected to the longest term). The Management Committee shall
annually

 

 

slate three candidates for the Nominating Committee from which the
Partners shall elect one candidate to replace the member whose term has expired
(except with respect to the initial members of the Committee for whom the
Management Committee shall slate six nominees from which the Partners shall
elect three as indicated above). In the event of a vacancy on the Nominating
Committee, the CEO shall specify the replacement for such Partner.

2.5 Duties of the Executive Committee

     The Executive Committee shall meet regularly as determined by the CEO.
The duties of the Executive Committee include, but are not limited to, the
following: managing the strategic direction and operations of the Company and
its Affiliates, including, but not limited to: recommending to the Board of
Directors the Company’s annual operating plan; reviewing and approving of all
budgets and forecasts for each SBU; appointing all members and the chairman of
any management committee of an SBU; slating candidates for the CEO Commission;
approving the election and removal of any Partner; and approving all
compensation proposed by any SBU.

2.6 Duties of the Management Committee

     The Management Committee shall meet regularly as determined by the CEO.
The duties of the Management Committee include, but are not limited to:
ensuring the effective and efficient operation of the NA/UK Operations
regarding such matters as growth, clients, staffing and pipeline; slating
Partners for the Management Compensation Committee and the Nominating
Committee; overseeing training and recruiting for NA/UK Operations; and
developing and recommending to the Executive Committee’s the annual operating
plan with respect to NA/UK Operations.

2.7 Duties of the Nominating Committee

     The Nominating Committee’s responsibilities are to screen thoroughly all
internal Partner candidates for the NA/UK Operations and to present those
internal candidates it deems appropriate to the Partners for a vote of
admittance in accordance with Section 2.9 (a) below. The Nominating Committee
shall work within the guidelines developed with the Management Committee and
approved by the Executive Committee regarding the need for and limitations on
the number of new Partners.

2.8 Duties of the Management Compensation Committee

     The functions of the Management Compensation Committee, and related
functions of the other committees, are set forth in Article III.

2.9 Partner Elections

     (a) An internal Partner candidate shall be admitted when he or she has the
endorsement of the Nominating Committee and the affirmative vote of (i) all the
members of the Executive Committee and the Management Committee, and (ii)
eighty percent (80%) of the Partners.

 

 

     (b) An external Partner candidate shall be admitted when he or she has
the affirmative vote of eighty percent (80%) of the Management Committee and
approval by the Executive Committee.

     (c) Once admitted in accordance with the foregoing procedures, all new
internal and external Partners shall be submitted for election by the Board of
Directors as an officer of the Company or an Affiliate employing such Partner,
as the case may be.

2.10 Removal of Partners

     Any Partner may be removed from his or her position as a Partner and have
his or her employment relationship with the Company and/or an Affiliate
terminated, at any time and without any reason or cause or the need to assert
or demonstrate any reason or cause, if such removal shall be approved by the
affirmative vote of at least a majority of the members of the Management
Compensation Committee, eighty percent (80%) of the Management Committee and
all of the members of the Executive Committee (in each case, other than such
Partner, if a member).

ARTICLE III

ANNUAL COMPENSATION PLAN

3.1. Aggregate Compensation

     The Board of Directors shall be the final arbiters of any compensation
determined in accordance with the procedures outlined herein and in Exhibit A.
During the last quarter of each fiscal year, the Executive Committee, with the
advice of the Management Committee, in conjunction with recommending an annual
operating plan to the Board of Directors, shall commence deliberations and
determine recommendations concerning the aggregate amount of bonuses (if any)
and the aggregate value of equity (if any) to be granted to all employees,
based on their performance during said fiscal year, and the aggregate amount of
base compensation to be payable to such employees for the coming fiscal year.
These recommendations shall then be submitted to the Board of Directors for
review and approval as part of the Company’s preliminary fiscal year plan.

3.2 Executive Committee and Management Committee Members’ Compensation

     During the last quarter of each fiscal year, the CEO shall prepare
recommendations concerning the individual compensation (base, bonus and equity,
if any) of the members of the Executive Committee and the Management Committee
based on their individual and the Company’s performance during said fiscal
year, for review and approval by the Board of Directors of the Company as
described in Section 3.3 below.

3.3. Board of Directors’ Approval

     The Board of Directors of the Company, after receiving the recommendations
referred to in Sections 3.1 and 3.2, shall make a final decision regarding
these amounts.

 

 

3.4 Allocations to Remaining Partners and Staff

     (a) After the Board of Directors has approved the recommendations referred
to in Sections 3.1 and 3.2, the Management Committee, with the advice of the
Management Compensation Committee, shall recommend specific allocations to the
remaining Partners and staff of the aggregate amounts of bonuses, equity and
base compensation set forth in the recommendations, and shall submit such
recommendations to the Executive Committee for its approval. After approval by
the Executive Committee, the recommendations as to the specific allocations to
the remaining Partners shall be submitted to the Board for its approval. If
the Board approves such allocations, they will be submitted to the Partners for
their approval as provided in Section 3.5.

3.5 Approval by Partners

     After the Board of Directors shall have approved the recommendations for
individual partner allocations referred to in Sections 3.2 and 3.4, such
recommendations shall be submitted to the Partners for a vote. If fewer than
seventy (70%) of the Partners shall approve the recommendations, the matter
shall be referred back to the Executive Committee (under Section 3.1 of this
Agreement) and the entire process of this Article III shall be repeated until
concluded.

3.6 Implementation

     The recommendations shall be implemented if approved by the Board of
Directors of the Company.

ARTICLE IV

PARTNERS’ COMPENSATION PROGRAM

4.1. Adoption of Program

     The Partners’ hereby adopt the compensation program (the “Program”),
substantially in the form attached as Exhibit A hereto, and shall hold all
shares of common stock of the Company subject to the terms of the Program. No
individual can become a Partner unless they agree to be bound by the terms of
this Agreement, including the Program, as if they were an original party
hereto.

4.2. Amendment

     Except as may be provided in the Program, the Program may be amended from
time to time by recommendation of the Executive Committee and the Management
Compensation Committee to the Board of Directors and by action of the Board of
Directors, subject to approval of a majority of all of the Partners. All of
the Partners agree to be bound by the terms of any amendments to the Program
approved according to the foregoing procedures.

 

 

ARTICLE V

MISCELLANEOUS

5.2 Entire Agreement

     This Agreement and Exhibits hereto constitute the entire agreement between
the Company and the Partners with respect to the subject matter hereof and
supersedes any and all other prior or contemporary oral or written
representations or agreements.

5.1. Termination

     This Agreement shall terminate upon the dissolution of the Company or at
such earlier time as only one Partner owns Common Stock.

5.2. Amendment

     This Agreement may be amended in any manner by a written instrument duly
executed by the Company and two-thirds (2/3) of the Partners.

5.3. Successors and Assigns

     All of the terms, provisions and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, executors, successors and assigns.

5.4. Severability

     If any portion or provision of this Agreement shall be held to be invalid
or unenforceable for any reason, the remaining provisions hereof shall
nevertheless be deemed valid, enforceable and carried into effect, unless the
effect thereof would clearly violate the manifest present intention of the
parties hereto.

5.5. Governing Law.

     This Agreement shall be subject to and governed by the laws of the State
of Illinois irrespective of the fact that any of the parties hereto may be or
become a resident of a different state.

 

 

     IN WITNESS WHEREOF, the parties have caused this Partners’ Operating
Agreement to be executed as of the date first written above.

DIAMONDCLUSTER INTERNATIONAL, INC.

By: /s/ Melvyn E. Bergstein

Title: Chairman & C.E.O.

PARTNERS: [Signatures on File]

 

 

EXHIBIT A

DiamondCluster International, Inc

Partner Compensation Program

(as amended through November 13, 2003)

	 	1.	 	Purpose. The purpose of the Company’s Partner Compensation Program (the
“Program”) is to retain and motivate the Company’s Partners (as defined
below), provide incentives directly linked to the achievement of the
Company’s financial and strategic goals, maintain equity ownership in the
Company by the Partners, and ensure the orderly and disciplined sale of
the Company’s shares by the Partners. Any changes to this Program shall
be reviewed and approved by the Board of Directors as provided in Section
9 hereof.
	 
	 	2.	 	Eligibility. Participation in the Program is limited to all individuals
who at the time of such participation have been admitted as Partners (the
“Partners”) pursuant to the procedures set forth in the Amended and
Restated Partners’ Operating Agreement, dated the date hereof (the
“Partners’ Operating Agreement”). The term “Partners” shall mean all
Partners affiliated with North America/UK operations.

3. Annual Compensation.

	 	3.1	 	Base Salary. Each Partner will receive a base salary that is
commensurate with his or her experience and contribution to the Company.
In general, the base salary levels established for the Partners will fall
within the levels set forth on Exhibit A hereto, as amended from time to
time.
	 
	 	3.2	 	Bonus. The Executive Committee (the “Executive Committee”), with advice
from the Management Committee and , subject to approval by the Board of
Directors or its compensation committee, will determine the amount of any
annual cash bonus available to be distributed to the Partners. Such bonus
will be based on a combination of the Company’s and the individual
Partner’s performance (“Bonus”).
	 
	 	3.3	 	Target Bonus. Set forth on Appendix A are the target bonuses as a
percentage of base salary and the relative percentages of Company and
individual performance upon which such bonuses will be based established
for each of the Partner levels. The Executive Committee, with the advice
of the Management Committee and subject to approval by the Board of
Directors or its compensation committee, may change the Target Bonus set
forth on Appendix A; provided, that the Partners shall be notified of the
change prior to the beginning of the fiscal year in which such change will
take effect; and provided, further, that any change that is more than ten
percentage points (10%) higher or lower than the previous Target Bonus
shall be approved by a majority of the Partners.
	 
	 	3.4	 	Bonus Pool. Subject to adjustment by the Executive Committee as described
below, the amounts allocated towards payment of the Partners’ Bonuses (the
“Bonus Pool”) will generally be funded

 

 

	 	 	 	on a quarterly basis in accordance with the achievement of the following
pre-tax and pre-bonus returns on revenue:

	 	 	 
	Pre-tax and Pre-bonus	 	 
	Return on Revenue
	 	Bonus Pool Funding

	up to 10%

	 	None
	>10% — 30%

	 	1/2 of pre-tax pre-Partner Bonus earnings
	>30%

	 	2/3 of pre-tax pre-Partner Bonus earnings

	 	 	 	The Executive Committee, with advice from the Management Committee and,
subject to approval by the Board of Directors or its compensation
committee, may adjust the funding of the formula described above based on
the Company’s financial performance in any given quarter.
	 
	 	3.5	 	Bonus Payments. Any Bonuses paid to the Partners will be based on the
actual funds available in the Bonus Pool, regardless of whether such
amount is less than the Target Bonus. A Partner who commences employment
with the Company or becomes a Partner after the start of the Company’s
fiscal year will receive a prorated Bonus, if any is paid, based on the
number of days such Partner is actually employed by Diamond during such
fiscal year. An individual must be an employee and Partner of the Company
on the last day of the fiscal year to which a Bonus relates in order to
qualify for and receive such Bonus.
	 
	 	3.6	 	Shares. Each Partner is eligible to receive an annual grant of Shares,
based on individual performance. The actual amount of base salary, Bonus
and Shares to be granted to each Partner annually will be determined in
accordance with the procedures set forth in Article III of the Partners’
Operating Agreement.

     For purposes of this Program, the term “Shares” means Restricted Stock,
Units and Options. Such Shares shall be issued under the Company’s then
current employee stock plan.

4. Equity

	 	4.1	 	Restricted Stock. The Company may issue to Partners, in accordance with
Section 5 below, restricted shares of Common Stock, $.001 par value (the
“Common Stock”), at or after the time an individual becomes a Partner
(“Restricted Stock”).
	 
	 	4.2	 	Restricted Stock Units. The Company may issue to Partners appreciation
rights that derive their value from the underlying Restricted Stock
(“Units”), but that do not possess any other attributes of such Stock such
as voting rights.
	 
	 	4.3	 	Stock Options. The Company may grant options (“Options”) to Partners
giving them the right to purchase common stock of the Company in
accordance with the terms set forth below and in any stock option
agreement delivered to them in connection with such grant.

 

 

5. Equity Issuance and Ownership.

	 	5.1	 	Partner Promotion Shares . Upon promotion to Partner, such Partner will
be granted an Option for thirty thousand shares or such other equity as
the Executive Committee shall determine is appropriate from time to time.
	 
	 	5.2	 	Issue Date. The issue date will be the effective date of an
individual’s promotion as a Partner. As set forth below in Section 5.3.1,
the vesting date (“Vesting Date”) will be based on the issue date.
	 
	 	5.3	 	Vesting.

     5.3.1 Unless otherwise specified in the notice of grant for an award, for
vesting purposes, Shares will have a Vesting Date as follows:

	 	 	 
	Issue Date
	 	Vesting Date

	April 1 — September 30
	 	April 1
	October 1 — March 31
	 	October 1

     5.3.2 Except as otherwise determined by the Executive Committee, each
grant of Shares will vest over five years, in accordance with the table set
forth below, and will expire six months from the date on which 100% of the
Shares have vested.

	 	 	 
	Period from Vesting Date
	 	Shares Vested

	1 year
	 	20%
	2 years
	 	40%
	3 years
	 	60%
	4 years
	 	80%
	5 years
	 	100%

     5.3.3 Shares acquired upon the exercise of Options will be fully vested.
Any unvested Shares will fully vest immediately upon a Partner’s Retirement,
death or disability (as defined in the Company’s then current employee stock
plan or stock option agreement). “Retirement” shall mean voluntarily ceasing
to work at or after (i) age 62, or (ii) age 50, provided that such Partner
shall have been a Partner for at least five years.

     5.3.4 Except as otherwise provided in the last sentence of this Section
5.3.4, in the event of a Change of Control, the Executive Committee may,
subject to approval by the Board of Directors or its compensation committee,
accelerate the vesting of the Shares. A “Change of Control” shall have the
meaning set forth on Appendix B. In the event a Partner is terminated within
eighteen (18) months following a Change of Control, other than a termination
for Cause

 

 

	 	 	 	 (as defined in Section 7) or one that is voluntary and unprovoked, such
Partner’s unvested Shares shall be immediately and automatically vested.
	 
	 	5.4	 	Minimum Ownership Requirements. As a general guideline, each Partner
should own throughout the period in which he or she is a Partner a minimum
number of shares of common stock of the Company having an aggregate market
value at least equal to 10% of his or her then current base salary times
the number of years such individual has been a Partner.

	 	6.	 	Partners’ Equity Sales Program.

	 	6.1	 	Objective. The objective of the Partners’ Equity Sales Program (the
“Sales Program”) is to provide an orderly and disciplined market for the
sale of Partners’ Shares. The Sales Program allows Partners to sell their
Shares quarterly in conjunction with the Company’s policy of permitting
trades only during specified periods occurring after the public release of
quarterly earnings.
	 
	 	6.2	 	Affiliates and Non-Affiliates. In order to facilitate compliance with
Rule 144 of the Securities Act of 1933, as amended (the “Act”) for
purposes of the Sales Program the Partners are classified as either
affiliates or non-affiliates within the meaning of Rule 144 of the Act.
The Board of Directors will designate from time to time those Partners who
will be classified as affiliates for these purposes. All other Partners
and former Partners shall be deemed non-affiliates for purposes of Rule
144 of the Act and the Sales Program.
	 
	 	6.3	 	Sales Limitations for Affiliates. All shares of Common stock, including
Pre-Partner Shares (as defined in Section 6.10), owned by Partners who are
classified as affiliates are subject to the Sales Program. The aggregate
amount of such shares that can be sold as part of the Sales Program shall
not exceed (i) any internal limits set by the Company, or (ii) the time
and volume limitations imposed by Rule 144(e)(1) of the Act.
	 
	 	6.4	 	Sales Limitations for Non-Affiliates. For non-affiliate partners, only
            shares of Common Stock, not including any Pre-Partner Shares or open
market purchase shares (which include Employee Stock Purchase Plan shares),
are subject to the Sales Program. Any such shares sold through
the Sales Program must either be registered with the Securities and
Exchange Commission or held for at least two years in order to qualify for
sales pursuant to Rule 144(k) of the Act. The aggregate amount of Shares
that can be sold as part of the Sales Program shall not exceed any
internal limits set by the Company.
	 
	 	6.5	 	Sales Procedure. Prior to the commencement of the Company’s quarterly
trading window, any Partner interested in selling Shares through the Sales
Program shall indicate his or her interest in writing, via e-mail, to the
Chief Financial Officer, or such other employee of the Company as may be
designated from time to time, stating the amount of Shares and the minimum
sales price for which that Partner would be interested in selling such
Shares. After public announcement of the Company’s earnings press
release, such Partner will be required to confirm, reduce, increase or
decline his or her participation in the Sales Program and indicate the
number of Shares, if any, such Partner is interested in selling. In the
event the aggregate participation level indicated by the Partners is in
excess of the internal limits established by the Company for either the
affiliates and non-affiliates as a single group or as two separate groups
(in each case, a “Group”), such Partners will participate pro rata based
on the percentage derived by dividing the number of Shares such Partner
desires to sell by the aggregate number of Shares all

 

 

	 	 	 	participating Partners in a Group desire to sell. In the event the aggregate
participation level indicated by Partners who are affiliates is in excess of
the time and volume limitations set forth in Rule 144 (e)(1) of the Act, such
Partners will participate pro rata among the affiliate group.

	 	6.6	 	Manner of Sale. All Shares sold through the Sales Program will be sold
over a period of up to six-weeks in “brokers’ transactions” in compliance
with Rule 144(f) of the Act through a broker or brokers designated by the
Company. The sales price attributed to each Share sold will be the
average price received for all Shares sold during such six-week period.
	 
	 	6.7	 	Transfer Restrictions; Gifts. No Partner shall transfer, assign, pledge
or hypothecate any of his or her Shares in any way, except that a Partner
may transfer any vested Shares (other than Options) by way of gift, will
or trust to a spouse, lineal descendant or ancestor (an “Estate
Transfer”); provided, that any Estate Transfer shall, unless otherwise
determined by the Executive Committee, be made in accordance with and
subject to the limitations of the Sales Program with the Estate Transferee
agreeing to be bound by the terms of the Sales Program.
	 
	 	6.8	 	Death or Disability of a Partner. Upon the death or permanent disability
of a Partner, such Partner’s Shares will cease to be subject to the terms
of the Sales Program.
	 
	 	6.9	 	Termination. Upon termination of a Partner’s employment for any reason,
vested Shares will continue to be subject to the terms of the Sales
Program, except that any unvested Options and Units will expire
immediately. A Partner that was required to purchase Restricted Shares
upon his or her promotion to partner will be reimbursed for all such
unvested Restricted Stock at the lower of (i) the purchase price paid for
such Restricted Stock pursuant to Section 5.1, together with interest, or
(ii) the average of the closing price of one share of Common Stock on the
NASDAQ National Market System for the ten trading days immediately
preceding such Partner’s last day of employment.
	 
	 	6.10	 	Pre-Partner and Open Market Purchase Shares. Any shares owned by a
Partner and acquired prior to such individual becoming a Partner or
through the exercise of Options received prior to such individual becoming
a Partner (“Pre-Partner Shares”) and any shares purchased by a Partner in
an open market transaction (including for these purposes shares purchased
under the Company’s Employee Stock Purchase Plan), are not, unless
otherwise specified, subject to the terms of the Sales Program.
	 
	 	6.11	 	Exemption for De Minimus Amounts held by Former Partners. Any Partner
who has ceased to be a Partner of the Company or an Affiliate for at least
three years (“Former Partner”), will no longer be subject to the Sales
Program if he or she satisfies the following de minimus holding
thresholds:

	 	 	 
	Number of years not a Partner
	 	Number of Shares Held

	3 years
	 	<50,000
	4 years
	 	<75,000
	5 years
	 	<100,000

     In addition, any Former Partner holding less than 10,000 shares shall no
longer be subject to the Sales Program.

 

 

	 	6.12	 	Rule 10b5-1 Plans. Any Partner may enter into a sales plan with his or
her broker that complies with the requirements of Rule 10b5-1(c)(1)(i)(B)
under the Securities Exchange Act of 1934, provided that such plan is
approved by the Executive Committee and establishes sales volumes in any
given quarterly period that are in accordance with and subject to the
limitations required by the Sales Program.
	 
	 	7.	 	Involuntary Termination. Upon involuntary termination of a Partner’s
employment (as hereinafter defined), in addition to the terms set forth in
Section 6.9 above, such Partner’s vesting schedule for any unvested Shares
that were issued upon election as a Partner will be accelerated by one
year as of the date of notice of termination. For purposes of the
Program, “involuntary termination” means termination for reasons other
than resignation or Cause. A Partner will be deemed to have been
terminated for Cause if terminated for: (i) gross insubordination or a
policy violation that is not cured within 15 days after such Partner’s
having received notice from the Chief Executive Officer, (ii) criminal
acts relating to the Company or its client affairs, or (iii) intentional
acts which are materially injurious to the Company, including disclosing
confidential information to an unauthorized third party.
	 
	 	8.	 	Administration. The Program shall be administered and interpreted by
the Management Committee. The Management Committee shall be responsible
for the management, operation and administration of the Program. The
Management Committee may designate persons who are Company employees to
oversee the day to day administration of the Program.
	 
	 	9.	 	Amendment. The Program may be amended from time to time by
recommendation of the Executive Committee to the Board of Directors and by
action of the Board of Directors, subject to approval of a majority of the
Partners. All of the Partners shall be bound by the terms of any
amendments to the Program approved according to the foregoing procedures.
	 
	 	10.	 	Governing Law. The Program and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the
laws of the State of Delaware.
	 
	 	11.	 	No Employment Rights. Nothing contained herein shall constitute a
contract of employment or of continuing service or in any manner obligate
the Company to continue the services of any Partner, obligate any Partner
to continue in the service of the Company, or serve as a limitation of the
right of the Company to discharge any of its Partners pursuant to the
procedures set forth in the Partners’ Operating Agreement. Nothing herein
shall be construed as fixing or regulating the compensation payable to the
Partners.

 

 

ADDENDUM No 1.

     This Addendum No. 1 dated January 29, 2004, is entered into by and between
DiamondCluster International, Inc. (the “Company”) and the partners affiliated
with the Company’s strategic business unit (“SBU”) relating to the Company’s
European and Latin American operations (“EULA Operations”) whose names appear
on the signature pages hereto (the “EULA Partners”).

     The terms and conditions of the North America and United Kingdom Partners’
Operating Agreement dated November 13, 2003, including Sections 4, 5, 6 and 7
of Exhibit A thereto (the “NA/UK POA”), are hereby incorporated herein in their
entirety and made a part hereof, except as modified by the following:

	 	1.	 	The term “Management Committee” each time it appears in the NA/UK
POA shall be deemed to refer to and be substituted with the term “EULA
Management Committee.”
	 
	 	2.	 	The term “NA/UK Operations” shall be deemed to refer to and be
substituted with the term “EULA Operations.”
	 
	 	3.	 	The term “Partners” each time it appears in the NA/UK POA shall be
deemed to refer to and be substituted with the term “EULA Partners.”
	 
	 	4.	 	For purposes of this Addendum as it relates to EULA Operations, no
Management Compensation Committee or Nominating Committee will be
elected by the EULA Partners and the duties of such Committees shall be
carried out by the EULA Management Committee, and all references to
actions taken by the Management Compensation Committee and the
Nominating Committee will be deemed to be actions taken by the EULA
Management Committee.
	 
	 	5.	 	Only Section 4 (Equity), 5 (Equity Issuances) Section 6 (Partner
Equity Sales Program) and Section 7 (Involuntary Termination) of
Exhibit A to the NA/UK POA shall be applicable to and binding upon the
EULA Partners, and all other Sections of Exhibit A shall apply only to
the NA/UK Partners.
	 
	 	6.	 	The parties acknowledge that neither the NA/UK POA nor this
Addendum addresses or shall govern any existing or future employment
agreement of any EULA Partner. All terms and conditions of any
employment agreement concluded between any EULA Partner and any
Affiliate shall remain in full force and effect. Any severance
agreements that may become applicable to any EULA Partner upon his
termination shall not be effected by the NA/UK POA or this Addendum.

Except as modified by the foregoing, all terms and conditions of the NA/UK POA
and Sections 4, 5, 6 and 7 of Exhibit A thereto shall be fully enforceable
against and applicable to the EULA Operations and the EULA Partners, and any
discrepancies as to the

 

 

administration of this Addendum shall be resolved by the Executive Committee,
subject where appropriate to the Board of Directors’ review and/or approval.

     IN WITNESS WHEREOF, the parties have caused this EULA Partners’ Operating
Agreement to be executed as of the date first written above.

DIAMONDCLUSTER INTERNATIONAL, INC.

By: /s/ Melvyn E. Bergstein

Title: Chairman & C.E.O.

PARTNERS: [Signatures on File]

PARTNERS:

	 	 	 
	
 

	 	
 
	Aguirre, Raul

	 	Kuhn, Ulrich
	 
	 	 
	
 

	 	
 
	Arias Miguel, José Francisco

	 	McClayton, R. William
	 
	 	 
	
 

	 	
 
	Baigorri Insa, Francisco Javier

	 	Moitry, Jerome
	 
	 	 
	
 

	 	
 
	Bensoussan, Laurent

	 	Oliveros, Fernando
	 
	 	 
	
 

	 	
 
	Font Manté, Victor

	 	Pamias Romero, Alberto
	 
	 	 
	
 

	 	
 
	Goette, Thomas

	 	Puelinckx, Kristoff
	 
	 	 
	
 

	 	
 
	Gutstein, J. Adam

	 	Terfloth, Christian
	 
	 	 
	
 

	 	
 
	Jaspert, Till

	 	Tesch, Markus
	 
	 	 
	
 

	 	
 
	Jaugey, Etienne

	 	Theilmann, Olaf<PAGE>

                                                                    Exhibit 10.1

                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                          SOUTHSTAR ENERGY SERVICES LLC

                     (A Delaware Limited Liability Company)

                                (Member Managed)

<PAGE>

                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                          SOUTHSTAR ENERGY SERVICES LLC

         This Amended and Restated Limited Liability Company Agreement of
SouthStar Energy Services LLC, a limited liability company organized pursuant to
the Delaware Limited Liability Company Act, is effective as of the 1st day of
January, 2004, by and between Georgia Natural Gas Company ("GNGC") and Piedmont
Energy Company ("Piedmont") (referred to jointly herein as "Current Members,").

                                   WITNESSETH

         WHEREAS, the Current Members had previously entered into a limited
liability company agreement relating to the formation and operation of the
Company, which agreement and related Operating Policy and all schedules,
exhibits and amendments thereto, the Current Members intend to be superceded by
and terminated pursuant to the terms hereof;

         WHEREAS, GNGC and Piedmont desire to maintain the Company as a limited
liability company pursuant to the Delaware Limited Liability Company Act, for
the purpose of selling on a non-regulated basis natural gas to target retail
customers, providing non-regulated products and services related to such sales,
and engaging in all other activities permitted by law and agreed to by the
Members pursuant to the terms of this Company Agreement;

         NOW THEREFORE, in consideration of the mutual agreements, promises and
undertakings hereinafter set forth, the Members agree as follows:

                                    ARTICLE I
                                   Definitions

         The following terms, as used herein, shall have the following meanings:

Act means the Delaware Limited Liability Company Act and all amendments to the
Act, as in effect from time to time.

Additional Member means a Person other than a Current Member who has acquired a
Company Interest from the Company or from another Member in accordance with
Article XII of this Company Agreement pursuant to an Admission Agreement.

                                       2

<PAGE>

Admission Agreement means the Agreement between an Additional Member and the
Company described in Section 9.1(b) substantially in the form set forth as
Exhibit E.

Affiliate means, with respect to any Person, (a) each entity that such Person
Controls: (b) each Person that Controls such Person, including, in the case of a
Member, such Person's parent, and (c) each entity that is under common Control
with such Person, including, in the case of a Member, each entity that is
Controlled by such Member's parent.

AGLR means AGL Resources Inc.

Allocable Share means, as to any Member, the percentage by which such Member
shall share in the distribution of any Company Income, which percentage may
change in proportion to which a change in the Member's Capital Account may bear
to the concurrent change in the Capital Account of the other Member(s). As of
the date hereof, each Member's Allocable Share is listed on Exhibit D.

Bankruptcy means, with respect to a Person: (i) the commencement against such
Person of proceedings for any relief under any bankruptcy or insolvency law, or
any law relating to the relief of debtors, readjustment of indebtedness,
reorganization, arrangement, composition, or extension of debts, provided such
proceeding shall not have been dismissed, nullified, stayed, or otherwise
rendered ineffective (but only so long as such ineffectiveness shall continue in
force) within ninety (90) days after the commencement of such proceedings; (ii)
the commencement by such Person of proceedings for any relief under any
bankruptcy or insolvency law, or any law relating to the relief of debtors,
readjustment of indebtedness, reorganization, arrangement, composition, or
extension of debts; (iii) a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, or trustee or
assignee in bankruptcy or insolvency of such Person or of a substantial part of
such Person's property, or for the winding up or liquidation of its affairs,
which decree or order remains in force undischarged and unstayed for a period of
ninety (90) days; or (iv) a general assignment by such Person for the benefit of
creditors or the admission by such Person in writing of its inability to pay its
debts generally as they become due.

Business Plan means the plan by which the Members agree to conduct the business
of the Company, which plan may be adopted and amended by the Members from time
to time pursuant to Section 8.1(2).

Capital Account means the account maintained for a Member determined in
accordance with Section 9.4.

                                       3

<PAGE>

Capital Contribution means the value of Property contributed, from time to time,
to the Company by any one Member, or provided that such value, in the case of
Property other than cash, shall be the fair market value of such Property as
reasonably determined by the Member contributing such Property and the Executive
Committee or by the Dispute Resolution Procedures provided in Article 16 hereof.

Certificate of Formation shall mean the certificate of formation of the Company
as filed with the Delaware Secretary of State's Office.

Change in Control means: (a) with respect to Piedmont, the acquisition by any
single Person or group of Affiliates, of Control of PNG; or (b) with respect to
GNGC, the acquisition by any single Person or group of Affiliates, of Control of
AGLR.

Code means the Internal Revenue Code of 1986, as amended from time to time, or
any successor thereto; any reference to a section of the Code or the Regulations
shall mean such section or any successor thereto as in effect at the time or
times in question.

Company means SouthStar Energy Services LLC, a limited liability company formed
under the laws of Delaware.

Company Agreement means this Amended and Restated Limited Liability Company
Agreement of SouthStar Energy Services LLC, including all amendments adopted in
accordance with this Company Agreement and the Act, and together with all
Exhibits and Schedules hereto.

Company Income means profit and loss of the Company for any Fiscal Year as
determined in accordance with generally accepted accounting principles
consistently applied.

Company Interest means as to any Member, the percentage by which such Member
shall share in distributions of the Company's assets upon any liquidation of the
Company's Property, which percentage may change in proportion to the amount by
which such Member's Capital Account then bears to the total of the Capital
Accounts of all Members. The Company Interests of each of the Members as of the
date hereof is set forth on Exhibit D.

Company Property means all Property owned of record or beneficially by the
Company.

                                       4

<PAGE>

Control means the possession, directly or indirectly, through one or more
intermediaries, of (i) in the case of a corporation, more than fifty percent
(50%) of the outstanding voting securities of the corporation; (ii) in the case
of a limited liability company, partnership, limited partnership or venture, the
right to more than fifty percent (50%) of the distributions from such entity
(including liquidating distributions); and (iii) in the case of any other
entity, more than fifty percent (50%) of the economic or beneficial interest in
such entity.

Current Members has the meaning set forth in the preamble.

Delinquent Member shall have the meaning set forth in Section 9.3

Disposition (Dispose) means any sale, assignment, transfer, exchange, mortgage,
pledge, grant, hypothecation, or other transfer, absolute or as security or
encumbrance (including dispositions by operation of law).

Dissolution Event shall have the meaning set forth in Section 13.1.

Executive Committee shall have the meaning set forth in Section 8.1.

Executive Committee Representative or Representative means the representative
appointed by a Member to serve on the Executive Committee.

Fiscal Year shall have the meaning set forth in Section 4.4.

Liquidating Trustee means the Member or such other Person as all Members agree
(or, in the absence of such agreement, the Executive Committee), charged with
carrying out the winding up of the Company.

Majority Vote means approval by greater than fifty percent (50%) of the votes
cast by the voting Representatives on the Executive Committee, subject to the
provisions of Section 8.2 and 8.6 hereof.

Market Value means, with respect to a Company Interest of a Member: (i) the
Company's value as an on-going enterprise multiplied by (ii) the percentage of
the respective Member's Company Interest as of the date of such Disposition or
any other applicable date indicated by this Company Agreement.

                                       5

<PAGE>

Member means any Current Member or any Additional Member.

"Net Taxable Income" and "Net Tax Losses" mean the Company's taxable income or
loss determined in accordance with Code Section 703(a) for each of its Fiscal
Years (for this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code Section 703(a)(l) will be included in
taxable income or loss) with the following adjustments: (i) such Net Taxable
Income and Net Tax Losses will be computed as if items of tax-exempt income and
nondeductible, non-capital expenditures (under Code Section 705(a)(l)(B) and
705(a)(2)(B)) were included in the computation of taxable income or loss; (ii)
that any items specially allocated pursuant to Article 6 hereof shall not be
taken into account in computing Net Taxable Income or Net Tax Losses; (iii) if
any Member contributes property to the Company with an initial book value to the
Company different from its adjusted basis for federal income tax purposes to the
Company, or if Company property is revalued in accordance with Treasury
Regulations Section 1.704-1 (b)(2)(iv)(f) or as otherwise required by the
Regulations, Net Taxable Income and Net Tax Losses will be computed as if the
initial adjusted basis for federal income tax purposes to the Company of such
contributed or revalued property equaled its initial book value to the Company
as of the date of contribution or revaluation; and (iv) credits or debits to
Capital Accounts due to a revaluation of Company assets in accordance with
Treasury Regulations Section 1 .704-l(b)(2)(iv)(f), or due to a distribution of
non-cash assets as provided in Section 12.2 hereof, will be taken into account
as gain or loss from the disposition of such assets for purposes of computing
Net Taxable Income and Net Tax Losses.

NG means Nashville Gas Company, a division of PNG.

Officer shall have the meaning set forth in Section 8.9(a).

Operating Budget shall have the meaning set forth in Section 8.l (a)(7).

Operating Policy shall mean that policy attached hereto as Exhibit F and adopted
hereby, as may be amended by the Members from time to time.

Person means an individual, trust, governmental authority, estate, or any
incorporated or unincorporated company, corporation, limited liability company,
partnership or other organization.

Piedmont means Piedmont Energy Company, a North Carolina corporation.

                                       6

<PAGE>

PNG means Piedmont Natural Gas Company, Inc., a North Carolina corporation.

Principal Office shall have the meaning set forth in Section 2.7.

Proceeding means any administrative or judicial adversary proceeding or hearing,
civil, criminal or investigative, the result of which may be that a court,
arbitrator, mediator or governmental agency may enter a judgment, order, decree,
or other determination which, if not appealed and reversed, would be binding.

Property means any property, real or personal, tangible or intangible, including
cash and any legal or equitable interest in such property.

Regulations means, except where the context indicates otherwise, the permanent
and temporary regulations of the United States Department of the Treasury under
the Code, including any amendments thereto.

Representative or Executive Committee Representative shall have the meaning set
forth in Section 8.2(a).

Retail Territory shall mean the states of Georgia, North Carolina, South
Carolina, and Tennessee or such other area designated by the Executive
Committee.

Selling Member shall have the meaning set forth in Section 12.4.

Services Agreement shall mean that certain agreement between the Company and AGL
Services Company, or its successors and assigns, dated the date hereof, a form
of which is attached hereto as Exhibit A.

Target Customer means retail residential, commercial and industrial customers of
natural gas in the Retail Territory.

Taxable Year shall mean the Fiscal Year unless changed by the Executive
Committee.

Tax Matters Member shall have the meaning Set forth in Section 11.3

Unanimous Vote means the approval by one hundred percent (100%) of the votes
cast by the voting Representatives on the Executive Committee.

                                       7

<PAGE>

Withdrawing Member has the meaning set forth in Section 12.6.

                                   ARTICLE II
                                    Formation

         2.1 Organization. The Current Members agree to jointly operate, a
Delaware limited liability company pursuant to the provisions of the Act. The
Current Members intend that the Company not be deemed a partnership (including a
limited partnership) or joint venture, and that no Member be deemed a partner or
joint venturer of any other Member, for any purpose other than federal and state
tax purposes, and this Company Agreement may not be construed to suggest
otherwise.

         2.2 Termination of Prior Agreements. The Current Members agree that
this Company Agreement hereby terminates, supercedes and restates the prior
Limited Liability Company Agreement of the Company, dated July 1, 1998 as may
have been amended; the Company's Operating Policy, dated July 14, 1998, as may
have been amended and the Interim Exceptions to Delegation of Authority Levels
related thereto.

         2.3 Agreement. For and in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree to the
terms and conditions of this Company Agreement, as it may from time to time be
amended according to its terms. It is the express intention of the Members that
this Company Agreement, as it may be amended from time to time in accordance
with its terms, except to the extent a provision of this Company Agreement
expressly incorporates federal income tax rules by reference to sections of the
Code or Regulations or is expressly prohibited or ineffective under the Act,
shall govern with respect to the subject matter hereof, even when inconsistent
with, or different than, the provisions of the Act or any other law or rule. To
the extent any provision of this Company Agreement is prohibited or ineffective
under the Act, this Company Agreement shall be considered amended to the
smallest degree possible in order to make this Company Agreement effective under
the Act. In the event the Act is subsequently amended or interpreted in such a
way to make any provision of this Company Agreement that was formerly invalid
valid, such provision shall be considered to be valid from the effective date of
such interpretation or amendment.

         2.4 Name. The name of the Company is "SouthStar Energy Services LLC".

         2.5 Effective Date. This Company Agreement shall be deemed effective as
of January 1, 2004.

         2.6 Term. The Company commenced its existence upon the filing of its
Certificate of Formation and shall continue in existence until it is dissolved
and terminated by the affirmative action of the Members.

         2.7 Registered Agent, Registered Office and Principal Office. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Delaware Certificate or such other office (which need not be a place of
business of the Company) as the Executive Committee may designate in the manner
provided by Law. The registered agent of the

                                       8

<PAGE>

Company in the State of Delaware shall be the initial registered agent named in
the Delaware Certificate or such other Person or Persons as the Executive
Committee may designate in the manner provided by Law. The principal office (the
"Principal Office") of the Company in the United States shall be at such place
as the Executive Committee may designate, which need not be in the State of
Delaware, and the Company shall maintain records there or such other place as
the Executive Committee shall designate and shall keep the street address of
such principal office at the registered office of the Company in the State of
Delaware. The Company may have such other offices as the Executive Committee may
designate.

         2.8 Governmental Applications. The Members agree to cooperate and
exercise due diligence in securing any necessary regulatory approvals and such
other matters as may be necessary or appropriate for purposes of effectuating
the business of the Company. Notwithstanding the foregoing, in the event any
Member is a regulated entity, as defined below, or has an Affiliate that is a
regulated entity, nothing in this Section 2.8 shall be construed to obligate
that Member to seek, or join in, any regulatory approval if that Member
reasonably concludes that such action may have a material adverse impact on that
Member or any Affiliate, or to accept any issued approval if such issued
approval contains conditions not requested by such Member and reasonably
unacceptable to such Member. For purposes of this Section 2.8 a regulated entity
is one whose ongoing business is subject to review, approval or oversight by a
federal or state regulatory body or agency.

                                   ARTICLE III
                               Nature of Business

         The Company is empowered to (a) engage in the purchase, transportation
and sale of natural gas on a non-regulated basis for Target Customers of such
products located in the Retail Territory; (b) provide risk management
instruments, associated with the products and services set forth in subpart (a)
of this Article 3 to Target Customers located in the Retail Territory in
accordance with the Operating Policy and this Company Agreement; (c) provide
non-regulated products and services related to the efficient use of natural gas
to Target Customers located in the Retail Territory; (d) engage in all other
activities permitted by law if approved by the Executive Committee; and (e)
engage in any and all activities incidental to the foregoing, including the sale
of the Company's under-utilized gas transportation and gas storage assets (and
commodities attendant to such assets) pursuant to the risk management guidelines
of the Operating Policy, regardless of whether the sale or use of such assets is
to the Target Customers or within the Retail Territory; provided however, that
the Company must have initially acquired such assets for service to the Target
Customers in the Retail Territory. The Company is empowered to take any and all
action necessary, appropriate, or convenient for the accomplishment of its
purposes, and for the benefit of the Company and its Property, including, but
not limited to:

         (a) Entering into and performing contracts of any kind;

                                       9

<PAGE>

         (b) Acquiring, selling, conveying, pledging, constructing, operating,
         maintaining, owning, transferring, renting, or leasing any Property;

         (c) Applying for and obtaining governmental authorizations and
         approvals; and

         (d) Bringing and defending actions at law or equity.

                                   ARTICLE IV
                         Accounting, Records and Reports

         4.1 Records to be Maintained. 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 Company 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 the Executive Committee.

         4.2 Accounting. 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 generally
accepted accounting principles consistently applied.

         4.3 Financial Reports. The Executive Committee shall cause the
following financial statements to be prepared, in each case in accordance with
generally accepted accounting principles consistently applied on a consolidated
and consolidating (i.e., by line of business) basis, 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 and as of the fiscal quarter of each Member; (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 quarter and year-to-date (including
         sufficient information to permit the Members to calculate their tax
         accruals), each within thirty (30) days after the end of such quarters
         (or more frequently if agreed by the Executive Committee);

                                       10

<PAGE>

         (c) (i) a balance sheet as of the end of each Fiscal Year of the
         Company and as of the end of the fiscal year of each Member; (ii) an
         income statement for such fiscal years; (iii) a statement of each
         Members Capital Account as of the end of such fiscal years; (iv) such
         federal, state and local income tax returns and such other accounting
         tax information and schedules as shall be necessary for the preparation
         by each Member of its income tax return for such fiscal years; and (v)
         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 Executive Committee within ten (10) days after such
         statements are furnished to the Company but in no event later than
         sixty (60) days after the end of each Fiscal Year of the Company and
         each fiscal year of each Member.

         4.4 Fiscal Year. The fiscal year of the Company shall end on December
31 unless otherwise required by the Code.

         4.5 Accounts. The Company shall maintain a record of each Member's
Capital Account in accordance with Section 9.4

         4.6 Access to Records and Audit Reports. Each Member or its authorized
representative shall have unrestricted, but reasonable, access at the Company's
principal place of business and other appropriate locations, during ordinary
business hours, to all properties, books, records, personnel, vendor agreements,
accounts and information regarding the Company for such review and audit as the
examining Member deems appropriate in its sole discretion reasonably exercised.
A Member's review and audit rights shall extend to goods and services furnished
by a Member or its Affiliate to the Company and such furnishing Member shall
exercise best efforts to provide materials reasonably required by the examining
Member in order to perform its review and audit. All reviews and audits by a
Member pursuant to this Section 4.6 shall be at the expense of the Member
conducting such review or audit.

         4.7 Other Notices. 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;

         (c) the entry of any judgment or decree against the Company, if the
         amount of such judgment exceeds $100,000; and

         (d) the occurrence of a material adverse change in the business,
         operations, assets, condition (financial or otherwise) or prospects of
         the Company resulting in a liability or loss to the Company in excess
         of $100,000.

                                       11

<PAGE>

                                    ARTICLE V
                    Representations and Warranties of Members

         Each Member hereby represents and warrants to the Company and each
other Member that:

         (a) if such Member is an organization, that 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 Company Agreement and to perform its
         obligations under this Company Agreement;

         (b) except as provided in Section 12.3 such Member is acquiring its
         Company Interest for such Members own account as an investment and
         without an intent to distribute the interest;

         (c) such Member acknowledges that such Company 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 Company 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 Company 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 Company 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 Company 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) 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 Company Agreement;

         (j) the name and address of each such Member is as reflected on
         Exhibit C attached hereto;

                                       12

<PAGE>

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

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

                                   ARTICLE VI
                          Rights and Duties of Members

         6.1 Member Requirements. A Member must remain a Member during the term
of the Company and may dispose of all or any portion of its Company Interest
only in strict accordance with the terms and conditions of this Company
Agreement (including, without limitation, Article XII). Any attempted
Disposition of all or any portion of its Company Interest, other than in strict
accordance with this Company Agreement, shall be, and is hereby declared, null
and void ab initio. The Members agree that breach of the provisions of this
Section 6.1 may cause irreparable injury to the Company for which monetary
damages (or other remedy at law) are inadequate in view of (i) the complexities
and uncertainties in measuring the actual damages that would be sustained by
reason of the failure of a Member to comply with such provisions and (ii) the
uniqueness of the Company business and the relationship among the Members.
Accordingly, the Members agree that the provisions of this Section 6.1 may be
enforced by specific performance.

         6.2 [Intentionally Left Blank]

         6.3 [Intentionally Left Blank]

         6.4 Unauthorized Expenses or Contracts. A Member may not, without the
prior approval of the Executive Committee, cause the Company to enter into or
make any contract, security agreement, financing statement, note or similar
instrument, mortgage or guaranty, incur any obligation, or expend any money,
except and unless an expenditure is required by the terms of a contract or
instrument theretofore duly entered into by the Company and authorized in
accordance with this Company Agreement. Should a Member breach this Section 6.4,
such Member will indemnify, defend and hold the other Members harmless from all
liabilities, costs, and damages resulting from such breach.

         6.5 Authority of Members to Bind the Company. The Members hereby agree
that no individual Member or Members can bind the Company unless such Member or
Members are acting with the express written authority of the Executive
Committee.

         6.6 Limitation of Liability of Members. Except as provided for in
Section 6.4 no Member shall be liable for the debts, obligations or liabilities
of the Company, including under a judgment, decree or order of court, except as
may be otherwise expressly agreed to in writing by such Member directly to the
applicable third Person.

         6.7 Contracts to Limit Members' Liabilities. Unless approved by the
Executive Committee, no contract, lease, sublease, note, deed or other agreement
or

                                       13

<PAGE>

instrument shall be executed and delivered by or on behalf of the Company if
there is contained therein any provision whatsoever that states or suggests that
the claims of any party thereto and other beneficiaries thereunder are not
limited solely to the assets of the Company, and any contract, lease, sublease,
note, deed or other agreement or instrument containing any such provision shall
be null and void and shall not constitute a valid obligation of the Company.

         6.8 Liability of Members for Certain Acts or Omissions. Any act or
omission by a Member when acting as an authorized representative of the Company
and within the scope of such authorization, the effect of which may cause or
result in loss or damage to the Company, shall not subject the Member to any
liability to the Company or any other Member so long as such act or omission was
not done fraudulently or in bad faith or as a result of willful and wanton
misconduct or gross negligence. Nothing in this Section 6.8 shall limit the
liability of a Member for any loss or damages to the Company resulting from (a)
the failure of such Member to perform any obligation of such Member under this
Company Agreement or (b) any act or omission to act of the Member under any
contractual arrangement with the Company, which limitations will be governed
pursuant to the terms of any such contractual arrangement.

         6.9 Indemnification.

         (a) The Company to the fullest extent permitted by the Act shall
         defend, indemnify and hold harmless any Member, Executive Committee
         Representative (or alternate), or Company officer, employee or agent,
         who was or is a party to, or is threatened to be made a party to, or is
         involved in, any threatened, pending or completed Proceeding, by a
         third party (including any action by or in the right of the Company) by
         reason of any acts, omissions or alleged acts or omissions by such
         Member, Executive Committee Representative (or alternate), or Company
         officer, employee or agent undertaken on behalf of the Company and with
         the authorization of the Company, against and from losses, damages,
         claims and expenses for which such Member, Executive Committee
         Representative (or alternate), or Company officer, employee or agent
         has not otherwise been reimbursed (including (i) reasonable attorneys
         fees, judgments, and fines in all cases and (ii) amounts paid in
         settlement if agreed to by the Executive Committee) actually and
         reasonably incurred in connection with such Proceeding, so long as such
         act or omission was not done fraudulently or in bad faith or as a
         result of willful and wanton misconduct or gross negligence or, with
         respect to any criminal Proceeding, such Person had no reasonable cause
         to believe his conduct was unlawful.

         (b) Subject to limitations and conditions as provided in this Article
         VI, each Person who was or is a party to, or is threatened to be made a
         party to, or is involved in, any threatened, pending or completed
         Proceeding by reason of the fact that such Person is or was serving at
         the request of the Company as a member, officer, employee, or agent of
         another foreign or domestic limited liability company, corporation.
         partnership, joint venture, sole proprietorship, or other enterprise,
         shall be defended, indemnified and held harmless by the Company to the
         fullest extent permitted by the Act, against and from losses, damages,
         claims and expenses for which such Person has not otherwise been

                                       14

<PAGE>

         reimbursed (including (i) reasonable attorneys' fees, judgments, and
         fines in all cases and (ii) amounts paid in settlement if agreed to by
         the Executive Committee) actually and reasonably incurred in connection
         with such Proceeding, so long as the acts or omissions or alleged acts
         or omissions forming the basis for such Proceeding were not done
         fraudulently or in bad faith or as a result of willful and wanton
         misconduct or gross negligence or, with respect to any criminal
         Proceeding, such Person had no reasonable cause to believe his conduct
         was unlawful.

         (c) Indemnification under this Article VI shall continue as to a Person
         who has ceased to serve in the capacity that initially entitled such
         Person to indemnity under this Company Agreement. The rights granted
         pursuant to this Article VI shall be deemed contract rights, and no
         amendment, modification or repeal of this Article VI shall have the
         effect of limiting or denying any such rights with respect to actions
         taken or Proceedings arising prior to any such amendment, modification
         or repeal. It is expressly acknowledged that the indemnification
         provided in this Article VI could involve indemnification for
         negligence but cannot involve indemnification for any act or omission
         done fraudulently or in bad faith or as a result of willful and wanton
         misconduct or gross negligence or, with respect to any criminal
         Proceeding, if such Person had reasonable cause to believe his conduct
         was unlawful.

         (d) The right to indemnification conferred in this Article VI shall not
         be exclusive of any other right which a Member or other Person
         indemnified pursuant to this Section 6.9 may have or hereafter acquire
         under any law, any provision of the Certification of Formation, this
         Company Agreement, any agreement, any vote of Members or otherwise.

         6.10 Credit Support. Subject to the execution and effectiveness of the
Indemnification Agreement among the Members, dated and executed the date hereof
and in the form attached hereto as Exhibit G, GNGC, acting alone or through its
Affiliates, agrees to exercise commercially reasonable efforts to provide credit
support on acceptable terms, and in an amount not to exceed a ceiling
established by the Executive Committee, to the extent required to support the
Company's commercial operations. Such credit support shall be in a form and in
amounts acceptable to the Executive Committee and to the GNGC Affiliate
providing the credit support, and may include, without limitation, comfort
letters, a guaranty of the Company's performance or a letter of credit. In the
event the Company must post a letter of credit as a result in a reduction of the
credit rating of AGLR the Company shall pay one hundred percent (100%) of the
cost of obtaining the letter of credit.

         6.11 Insurance. To the extent not inconsistent with the Act and other
laws and public policies of the State of Delaware, the Company will purchase and
maintain its own policies of insurance of such types and in such amounts and
containing such terms and conditions as is customary for a company that is
similarly situated to the Company; provided, however, that unless the Executive
Committee determines otherwise, the Company shall not be required to obtain any
insurance for the benefit of any Member or any Representative acting in their
capacity as a Member or Representative.

                                       15

<PAGE>

         6.12 Services Obligation. Each of the Members agrees to provide the
services of certain personnel to the Company in the manner established by the
Executive Committee and as further set forth in the Operating Policy or the
Services Agreement.

                                   ARTICLE VII
                      Competition and Conflicts of Interest

         7.1 Company Opportunity and Non-Competition.

                  (a) The assets of the Company shall at all times be dedicated
         exclusively to the benefit of the Company. Subject to the foregoing and
         except as otherwise set forth herein, any Member or Affiliate of any
         Member may participate in other business activities, whether or not any
         such activities are competitive with the business of the Company. No
         Officer, Executive Committee Representative or employee of the Company,
         so long as such individuals remain in such capacity, shall participate
         in business in competition with the business of the Company unless such
         activity is undertaken exclusively as Officer, employee or agent of a
         Member or Affiliate of a Member. No transaction with the Company shall
         be voidable solely because a Member has a direct or indirect interest
         in the transaction if either the transaction is arms-length and fair to
         the Company or the disinterested Members (knowing the material facts of
         the transaction and the Member's interest) or their Representatives on
         the Executive Committee specifically authorize, approve, or ratify the
         transaction.

                  (b) Notwithstanding the foregoing and except as provided in
         paragraph (d) of this Section, in the absence of the approval of the
         Executive Committee, no Member or Affiliate (resulting from a "Change
         in Control" or otherwise) of any Member shall (i) engage in the
         purchase, transportation and sale of natural gas on a non-regulated
         basis for Target Customers of such products located in the Retail
         Territory; provided, however, that with respect to this Section 7.1(b),
         "Target Customers" shall not include (a) those customers listed on
         Schedule A hereto, as amended from time to time by agreement of the
         Members or (b) those industrial customers of either Member with whom
         such Member has a national account relationship that originated outside
         of the Retail Territory, but which customer might have ancillary
         business within the Retail Territory (a "Non-Competing Customer"),
         which customers the Current Members have agreed (or may agree after the
         date hereof) shall be excepted from the provisions; or (ii) sell or
         otherwise permit any non-Affiliate to use any trade name, trademark or
         service mark licensed to the Company by such Member in connection with
         a non-Affiliate's purchase, transportation and sale of natural gas in
         the Retail Territory. Nor shall anything in this Section restrict, or
         be construed to apply to, (i) sales, services (including the
         transportation of Gas) or the sale of products of the type provided at
         the time of execution of this Company Agreement, or mandated directly
         or indirectly by a regulatory body, including, but not limited to, the
         imputation of revenues, expenses or rate base, the effect of which is
         to create a penalty, economic or otherwise, for the failure to provide
         such sales, services or

                                       16

<PAGE>

         products, by PNG and NG in their respective certificated service
         territories, or AGL and Chattanooga Gas Company in their respective
         certificated service territories.

                  (c) Further, the Members acknowledge and agree that each
         Members' assets, businesses, interests in joint ventures, partnerships
         and other entities existing as of the date hereof ("Grandfathered
         Assets"), and the ownership and operation of such Grandfathered Assets,
         shall not, subject to the terms of this Section 7.1(c) be deemed in
         violation of the provisions of Section 7.1(b). The Members further
         acknowledge and agree that the provisions of Section 7.1(b) are not
         intended to prohibit the good-faith business activities of a Member
         after the date hereof that involve assets and interests similar in
         nature to the Grandfathered Assets, so long as such activities are not
         engaged in for the purpose of, and/or such activities do not have the
         principal effect of, circumventing the provisions of Section 7.1(b). In
         this regard, the Members hereby affirm and agree that notwithstanding
         the language set forth in this paragraph, each of the Members is
         committed to conducting its business in compliance with the provisions
         of Section 7.1(b), is committed to the success of the Company with
         respect to Target Customers in the Retail Territory, and will otherwise
         avail itself of the language set forth in this paragraph in good faith
         consistent with such acknowledgments and affirmations.

                  (d) No Member or Affiliate shall acquire, directly or
         indirectly, a Person, which Person's primary business is the purchase,
         transportation and sale of natural gas on a non-regulated basis for
         Target Customers located in the Retail Territory. In the event a Member
         or Affiliate acquires, directly or indirectly, a Person, which has as
         an on-going ancillary business that is engaged in the purchase,
         transportation and sale of natural gas on a non-regulated basis for
         Target Customers located in the Retail Territory with the exception of
         any business such Person may have with any Non-Competing Customer (an
         "Acquisition") whether through the ownership of assets, a division, a
         subsidiary, or otherwise (such assets being referred to herein as the
         "Competing Assets"), the acquiring Member or Affiliate shall either:

                  (1) consummate the sale of such Competing Assets to a third
                  party or affirmatively discontinue such ancillary business
                  within 180 days of the date of such Acquisition; or

                  (2) contribute such Competing Assets to the Company, thereby
                  increasing the amount of such Member's Capital Account at the
                  then current fair market value of the Competing Assets as
                  proposed in good faith by the contributing Member. The
                  contributing Member shall provide the non-contributing Members
                  notice (an "Assessment Notice") of its intent to make such
                  contribution, which notice shall contain (i) information and
                  details relating to the Competing Assets; (ii) the
                  contributing Member's determination of the fair market value
                  for the assets; and (iii) the basis for such determination.

                                       17

<PAGE>

         The non-contributing Member may elect to (i) make a capital
         contribution (a "Matching Contribution") to the Company, which
         contribution shall be equal to the amount necessary to maintain such
         Member's Company Interest in the same proportion to the contributing
         Member's Company Interest prior to taking into account the effect of
         either contribution or (ii) not make any capital contribution in which
         case such Member's Company Interest and Allocable share shall be
         diluted in proportion to the contributing Member's adjusted Membership
         Interest and Allocable Share . The non-contributing Member shall give
         the contributing Member notice of its intent to make a Matching
         Contribution and the amount of such Matching Contribution within thirty
         (30) days of its receipt of the Assessment Notice. The consummation of
         such a Matching Contribution shall be conditioned upon the contribution
         of the Competing Assets to the Company.

         Each Member's Company Interest and Allocable Share shall be adjusted to
         reflect the proportionate change to their Capital Accounts as such
         change bears to concurrent change in the other Members' Capital
         Accounts (if any) after taking into effect the contribution(s)
         contemplated hereby. In the event any non-contributing Member disagrees
         on the appropriate fair market value for the Competing Assets, the
         non-contributing Member shall give notice of such disagreement within
         thirty (30) days of such Member's receipt of the Assessment Notice (or
         concurrent with such non-contributing Member's notice regarding its
         Matching Contribution), at which point, either Member shall submit the
         issue to the Dispute Resolution Procedures as provided in Article 16
         hereof.

         The exercise of either Member's right to contribute Competing Assets or
         a Matching Contribution in accordance with this Section shall be
         irrevocable.

         7.2 Survival of Non-Competition Provisions. The provisions of Section
7.1 shall remain in effect, with respect to each Member and its Affiliates or
former Member and its Affiliates of the Company until the first anniversary of
the date upon which any such Member becomes a Withdrawing Member pursuant to a
sale of 100% of its Company Interest pursuant to this Agreement; provided
however, that from and after the date that is six months following such date a
Member becomes a withdrawing Member, the provisions of Section 7.1 shall have no
effect with respect to Affiliates of the Withdrawing Member to the extent such
Affiliates result from a Change in Control transaction of such Withdrawing
Member announced and consummated subsequent to the date such Member sold 100% of
its Company Interest.

         7.3 Competition between Members. Except as specifically provided in
this Article VII, nothing shall limit or restrict the ability of Members or
their Affiliates to compete with each other.

                                  ARTICLE VIII
                                   Management

         8.1 Management by Members and the Executive Committee.

                                       18

<PAGE>

         (a) Except as described below in this Article VIII, the management of
the Company is fully vested in the Members, acting exclusively in their
membership capacities or otherwise through the Executive Committee as
established hereby. To facilitate the orderly and efficient management of the
Company, the Members shall act (a) collectively as a "committee of the whole"
(named the Executive Committee), (b) through the delegation of responsibility
and authority to the Officers pursuant to Section 8.9 and (c) through the
delegation from time to time of certain responsibility and authority to
particular Members pursuant to Section 8.11. No Member has the right, power or
authority 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,
except in accordance with the immediately preceding sentence or as otherwise
specifically provided herein. Decisions or actions taken in accordance with the
provisions of this Company Agreement shall constitute decisions or actions by
the Company and shall be binding on each Member, Representative, Officer and
employee of the Company. Except as otherwise provided in this Company Agreement,
the property, business and affairs of the Company shall be under the direction
of the Executive Committee and the Officers acting pursuant to Section 8.9.
Except for matters requiring the action of the Members under the terms of this
Company Agreement, the Executive Committee shall have the power to take any
action that the Members may take under law, subject to any restrictions set
forth in this Company Agreement.

The approval by a Unanimous Vote of the Executive Committee shall be required
before any of the following acts involving the Company may be taken:

                  1. approving and adopting or amending any written policy
                  between the Members and the Company contemplated in this
                  Company Agreement, including the Operating Policy;

                  2. approving and adopting the Company's written Business Plan,
                  and amending or modifying any provision of the Business Plan;

                  3. entering into, amending, modifying, or terminating a
                  material agreement with a term in excess of the term set forth
                  in the Operating Policy or involving aggregate consideration
                  (including assumed actual and contingent liabilities) or
                  receipts, or delivery or receipt of goods or services having a
                  value, in excess of the amount set forth in the Operating
                  Policy, over the term of the agreement;

                  4. entering into, amending, modifying, or terminating any
                  contract or commitment to acquire or transfer any asset, the
                  fair market value or aggregate consideration (including
                  assumed actual and contingent liabilities) of which exceeds
                  the amount set forth in the Operating Policy;

                  5. filing any claim or lawsuit against any Person where the
                  amount claimed is in excess of the amount set forth in
                  Operating Policy, or settling any claim or lawsuit where the
                  fair market value of the settlement amount is in excess of
                  such amount;

                  6. borrowing any principal amount in excess of the amount set
                  forth in the Operating Policy, incurring any future borrowing
                  liability whatsoever

                                       19

<PAGE>

                  in excess of such amount, lending or guaranteeing any material
                  amount of third party indebtedness (including, without
                  limitation, under any contract or arrangement referred to in
                  this Section 8.1) it being understood that such limitation
                  shall not be a limitation on the amount or type of trade
                  payables that may be incurred in the ordinary course of
                  business consistent in all respects with past practices by the
                  Company;

                  7. approving or modifying any fiscal year capital budget or
                  operating budget (the "Operating Budget") and contributions to
                  the Operating Fund for each Fiscal Year, which shall not be
                  exceeded without the express consent of a Unanimous Vote of
                  the Executive Committee;

                  8. the indemnification of any Officer, employee, agent or any
                  other Person except as specifically provided herein;

                  9. executing or otherwise entering into, or amending,
                  modifying, or terminating, any employment agreement with the
                  President or a Vice President or similarly compensated person,
                  the election or removal of the President or any Vice President
                  or the hiring or firing of other similarly compensated person
                  with or without cause;

                  10. setting or amending the compensation level of the
                  President or any Vice President or other similarly compensated
                  person;

                  11. revaluing any property or asset outside of the normal
                  course of business;

                  12. taking any action in the Company's capacity as a
                  shareholder, partner or member of any Person to the extent
                  such action would require a Unanimous Vote if taken under this
                  Company Agreement;

                  13. taking action that will result in any material Company
                  Property being burdened by a material lien or other
                  encumbrance it being understood that such limitation shall not
                  be a limitation on the Company's ability to incur trade
                  payables in the ordinary course of business consistent in all
                  respects with past practices by the Company;

                  14. except as otherwise required by Section 10.1 hereof
                  approving the distribution of Company Property to Members;

                  15. except as contemplated in the Operating Policy, 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
                  $10,000;

                  16. the admission of an Additional Member;

                  17. transferring all or substantially all of the assets of the
                  Company;

                                       20

<PAGE>

                  18. dissolving the Company to the extent that Section 12.4 and
                  Article XIII of this Company Agreement requires Unanimous
                  Consent to dissolve the Company;

                  19. 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;

                  20. merging or consolidating the Company with or into any
                  other Person;

                  21. a change in the name of the Company;

                  22. entering into any modification or amendment of this
                  Company Agreement;

                  23. approving and adopting the written Company compensation
                  plan for the Company's Officers;

                  24. extension of the term of the Company;

                  25. hiring of outside attorneys (except in instances where (i)
                  the President of the Company concludes that the delay
                  associated with Executive Committee approval of the hiring of
                  outside legal counsel could have an adverse impact on the
                  Company, or (ii) the President of the Company believes that
                  the total legal fees associated with the matter requiring
                  outside legal counsel will not exceed $15,000, in which cases
                  the President shall be authorized to hire outside counsel),
                  auditors and financial consultants; and

                  26. approving significant Company regulatory filings and
                  material public announcements (which shall in no event include
                  advertising undertaken in the ordinary course and consistent
                  with the Operating Policy) or to the extent such filings or
                  announcements may relate principally to such Member or its
                  Affiliates or business.

         (b) Any other action required or permitted to be taken by the act of
         the Executive Committee under this Company Agreement and not
         specifically identified as a Unanimous Consent matter may be taken by a
         Majority Vote of the Executive Committee.

         (c) If the matter being voted on does not receive the requisite vote,
         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 vote no
         alternative shall be selected.

         (d) Prior to the admission of a new Member, the Executive Committee
         shall review and revise this Agreement (including but not limited to
         this Section 8.1 and make such changes in the approval procedure as the
         Executive Committee agrees are required to govern the operation of the
         Company after the admission of the new Member; and, further, the
         provisions of Article XII hereof which make reference to "per-capita"
         shall all automatically be deemed to references to `pro-rata" (unless
         the Current Members shall otherwise agree).

                                       21

<PAGE>

         (e) The Executive Committee may create subcommittees and delegate to
         such subcommittees the authority and responsibility to act on behalf of
         the Executive Committee, including the consent to, and action upon,
         those items listed under Section 8.1 above as requiring the Unanimous
         Consent of the Executive Committee, and may rescind any such
         delegations, as it may deem appropriate.

         8.2 Composition, Term and Duties.

         (a) The Executive Committee shall be comprised of three representatives
         for each Member (such Member's "Representative(s)"). All
         Representatives shall be entitled to receive notices and agendas of
         upcoming Executive Committee meetings, attend all Executive Committee
         meetings and participate in all discussions, and receive minutes from
         previous Executive Committee meetings. With the approval of the other
         Members, a Member may bring support staff to Executive Committee
         meetings. Such staff shall be subject to confidentiality requirements
         deemed appropriate by the Executive Committee. The Representatives
         selected by each Member shall cast their votes as a single voting
         block. Each voting block shall be entitled to cast the following number
         of votes on matters requiring the approval of the Executive Committee:
         each voting block shall have one vote, or fractional part thereof, for
         each percentage point, or fractional part thereof, of Company Interest
         credited to the Member.

         (b) Each Representative shall be entitled to hold office until death,
         resignation or removal. A Member may replace the Representative
         appointed by such Member in the event of a vacancy. Any Representative
         may be removed at any time, with or without cause, by the Member
         entitled to appoint such Representative, but not otherwise. Any
         Representative on the Executive Committee may appoint a proxy
         (including another Representative, the Chairman, or the Secretary of
         such meeting) to attend meetings and vote (including, without
         limitation, voting on any matter before the Executive Committee).
         Without limiting the generality of the foregoing, in determining if a
         quorum is present, all Representatives in attendance by means of a
         proxy shall be included in the count of a quorum.

         8.3 Annual and Regular Meetings. The Executive Committee shall hold an
annual meeting, and may hold regular meetings, at such time and place as the
Executive Committee determines by resolution but in any event the Executive
Committee shall, unless the Executive Committee otherwise agrees, hold regular
meetings at sites selected by the Executive Committee during the months of
February, May, August and November of each year.

         8.4 Special Meetings. Special meetings of the Executive Committee may
be called by the Chairman, the Executive Committee or any Member, upon no less
than ten (10) days prior written notice to all Representatives on the Executive
Committee.

         8.5 Notice of Meetings. Notice of special, annual and regular meetings
must be given in writing to each Representative on the Executive Committee at
least ten days in advance of such meeting and shall state the purpose of the
meeting. Notice of such meeting may be waived by the Executive Committee.

                                       22

<PAGE>

         8.6 Quorum and Manner of Acting. The presence of at least one
Representative of each Member shall constitute a quorum. No action may be taken
at a meeting of the Executive Committee in the absence of a quorum. In the event
all Representatives of a Member receive notice of an annual, regular or special
meeting in accordance with this Agreement and do not participate in such meeting
either in person or by proxy, such Representatives shall be deemed to have
attended such meeting and voted as a block not to take action submitted to the
Executive Committee for approval at such meeting. In the event a Member or all
Representatives of a Member abstain from voting (without granting a proxy with
respect to such vote) on a matter presented to the Executive Committee for
approval, such abstention shall be noted in the Company's records and the votes
of such Member or Representative shall be disregarded for purposes of
determining whether or not the matter before the Executive Committee receives
unanimous or majority approval. Restated, with respect to any unanimous consent
matter, if one Member abstains from casting its votes, that abstention shall be
noted and, notwithstanding such abstention, the affirmative vote of each of the
other Members for the matter in question shall constitute unanimous approval for
purposes hereof. As further example, and with respect to a majority approval
matter, if one Member abstains from casting its votes, that abstention shall be
noted and, notwithstanding such abstention, the affirmative vote of a Member or
Members holding a majority of the votes, determined without regard to the votes
held by the abstaining Member, shall constitute majority approval for purposes
hereof. Any action the Executive Committee may take may be taken without a
meeting by unanimous written consent of the Representatives. For purposes of the
immediately preceding sentence, the signature of only one Member's
Representative shall be deemed to constitute written consent of all of that
Member's Representatives. Meetings of the Executive Committee may take place by
telephone or any means where any persons attending can hear and speak to each
other.

         8.7 No Compensation. No Representative on the Executive Committee shall
be entitled to compensation for his/her services, or any reimbursement of
expenses incurred, as a Representative on the Executive Committee.

         8.8 Disclaimer of Duties; Indemnification. EXCEPT AS OTHERWISE PROVIDED
SECTION 7.1 AND SUCH DUTIES TO THE COMPANY AS ARE IMPOSED BY APPLICABLE LAW,
EACH REPRESENTATIVE SHALL REPRESENT, AND OWE DUTIES TO, ONLY THE MEMBER THAT
DESIGNATED SUCH REPRESENTATIVE (THE NATURE AND EXTENT OF SUCH DUTIES BEING AN
INTERNAL CORPORATE AFFAIR OF SUCH MEMBER), AND NOT TO THE COMPANY, ANY OTHER
MEMBER OR REPRESENTATIVE, OR ANY OFFICER OR EMPLOYEE OF THE COMPANY.

         8.9 Officers

         (a) Generally. The Company shall have agents, referred to as "Officers"
         of the Company. An Officer shall not be entitled to serve as a
         Representative and vice versa. These agents (whose authority is limited
         pursuant to the following sentence) shall be appointed in the manner
         specified below and shall have the titles and authority specified in
         this Section 8.9. Each Officer shall have only the authority specified
         below, and shall, subject to the general control of the

                                       23

<PAGE>

         Executive Committee, be responsible for the day-to-day operations and
         direction of the affairs and business of the Company.

         (b) Officers. The elected Officers shall be the President and as
         appointed from time to time, in accordance with subsection (c) below,
         Vice Presidents as the Executive Committee may approve.

         (c) Election and Term of Office. The President and Vice President(s),
         if any shall be elected annually upon the Unanimous Vote of the
         Executive Committee at the annual meeting If a new President or Vice
         President is not elected at an annual meeting of the Executive
         Committee, the incumbent Officer shall continue to serve until such
         Officer is removed, and a replacement elected, all upon the unanimous
         vote of each of the Members at the following annual meeting of the
         Executive Committee. Notwithstanding the foregoing, any Officer may be
         removed by the Executive Committee with or without cause upon the
         unanimous vote of each the Members. Vacancies in any office shall be
         filled by the Executive Committee.

         (d) Chairman of the Executive Committee. A Chairman shall preside at
         meetings of the Executive Committee, and shall exercise such powers and
         perform such duties as may be assigned to him/her by this Company
         Agreement or the Executive Committee. The Chairman shall serve for a
         term of one year and the office of Chairman shall rotate annually among
         the Charter Members.

         (e) President. The President, subject to the general control of the
         Executive Committee, shall be responsible for the day-to-day operation
         and direction of the affairs of the Company, employees and agents,
         shall supervise generally the affairs of the Company, and, subject to
         the limitations imposed by this Company Agreement, any employment
         agreement, any employee plan, or any resolution of the Executive
         Committee, shall have full authority to execute all documents and to
         take all actions that the Company may legally take. Except for such
         meetings or portions thereof during which the Executive Committee shall
         declare itself to be in "executive session," the President shall attend
         all meetings of the Executive Committee (but as President shall not be
         entitled to vote on matters before the Executive Committee) and
         exercise such other powers and perform such other duties as may be
         assigned to him/her by this Company Agreement or the Executive
         Committee, including such duties and powers stated in any employment
         agreement.

         (f) Vice Presidents. In the absence of the President, the Vice
         Presidents designated by the Executive Committee shall, except as
         hereinafter provided, have all of the powers and duties conferred upon
         the President. Each of the Vice Presidents shall, subject to the
         limitations imposed by this Company Agreement, any employment
         agreement, any employee plan, or any resolution of the Executive
         Committee, have the same power as the President to sign certificates,
         contrasts and other instruments of the Company. Any Vice President
         shall perform such other duties and may exercise such other powers as
         may from time to time be assigned to him by this Company Agreement, the
         Executive Committee, the Chairman, or the President.

                                       24

<PAGE>

         (g) Secretary and Assistant Secretaries. The Secretary shall attend and
         record or cause to be recorded in books provided for that purpose the
         minutes of the meetings or actions of the Members and the meetings or
         actions of the Executive Committee or any subcommittees thereof, shall
         see that all notices are duly given in accordance with the provisions
         of this Company Agreement and as required by law, shall be custodian of
         all records (other than financial), shall see that the books, reports,
         statements, certificates and all other documents and records required
         by law are properly kept and filed, and, in general, shall perform all
         duties incident to the office of Secretary.

         (h) Powers of Attorney. The Executive Committee may grant powers of
         attorney or other authority as appropriate to establish and evidence
         the authority of the Officers.

         (i) Borrowed Employees. Subject to approval by the Company's President,
         the Company may borrow a Member's employees on a full or part time
         basis, or a Member's Affiliate's employees, with that Member or
         Affiliate's consent, from time to time on a temporary basis for
         purposes associated with the Company's business. Out-of-pocket expenses
         and reasonable salaries and benefits associated with such borrowed
         employees shall be addressed in the Operation Policy. The Members
         acknowledge and agree that part-time borrowed employees may continue to
         perform services for the lending Member or its Affiliates.

         (j) Leased Employees. The Company may lease a Member's employees on a
         full or part time basis, or a Member's Affiliate's employees, with that
         Member or Affiliate's consent, from time to time on a temporary basis
         for purposes associated with the Company's business. Out-of-pocket
         expenses and reasonable salaries and benefits associated with such
         leased employees shall be addressed in an agreement between the loaning
         Member or Affiliate and the Company. The Members acknowledge and agree
         that part-time leased employees may continue to perform services for
         the lending Member or its Affiliates.

         (k) Employee Transfers. With the prior approval of the affected Member,
         the Company, with Executive Committee approval if required by Section
         8.1(a)(15) or if not, approval by the Company's President, shall be
         entitled to hire employees of any Member (including its Affiliates) to
         fill vacancies within the Company. With the prior approval of the
         Executive Committee, a Member (including its Affiliates) shall be
         entitled to hire employees of the Company to fill vacancies with such
         Member; provided however, that no such approval shall be necessary to
         allow GNGC or an Affiliate thereof to hire any personnel acting as a
         Service Personnel under the terms of the Services Agreement. The
         granting of credit for past service with the prior employer for
         purposes of the hired employee's compensation and benefit plans shall
         be at the discretion of the new employer.

         8.10 Expenses. The Company shall pay only those expenses incurred by
the Officers and employees that are directly attributable to the Company's
business.

         8.11 Delegation to Particular Member. The Executive Committee may
delegate to one or more Members, in writing, such authority and duties as the
Executive Committee may deem advisable, including its authority under Section
8.1 hereof.

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<PAGE>

Decisions or actions taken by any such Member in accordance with the provisions
of this Agreement shall constitute decisions or actions by the Company and shall
be binding on each Member, Representative, Officer and employee of the Company.
Any delegation pursuant to this Section 8.11 may be revoked at any time by the
Executive Committee. With respect to duties discharged hereunder by a Member (a)
such Member may discharge such duties through the personnel of an Affiliate of
such Member, and (b) unless the Members otherwise agree, the Company shall
compensate such Member (or its Affiliate, as applicable) for the performance of
such duties as set forth in the Operating Policy.

                                   ARTICLE IX
                       Contributions and Capital Accounts

         9.1 Capital Contributions.

         (a) As of the Effective Date, the Current Members agree hereby that
         each and the other has made capital contributions to the Company in
         consideration for such Member's Company Interest and the Company
         Interest of each Current Member in proportion with the other and the
         balance of each Member's Capital Account is reflected on Exhibit D
         hereto, as may be amended from time to time.

         (b) Any Additional Member shall make the Capital Contribution described
         in such Additional Member's Admission Agreement ("Admission
         Agreement"). The amount of the Additional Member's initial Capital
         Contributions, the time for making such contributions, and any changes
         in the other Members' Capital Accounts, Allocable Shares and Company
         Interests that result, shall be set forth in such Additional Member's
         Admission Agreement.

         9.2 Additional Capital Contributions. As and when the Executive
Committee determines that the Company needs cash from time to time, each Member
agrees that it shall make Capital Contributions to the Company in an amount in
accordance with its respective Company Interest for the purposes determined by
the Unanimous Vote of the Executive Committee authorizing such Capital
Contributions in accordance with Section 8.1. The Capital Accounts of the
contributing Members shall be adjusted pro rata to reflect the amount of such
contribution in proportion with the other Members.

         9.3 Failure to Contribute. If a Member (a "Delinquent Member") does not
contribute, within 3 days of the date required, all or any portion of a Capital
Contribution that Member is required to make as provided in this Company
Agreement the remaining Members in proportion to their Allocable Shares or in
such other percentages as they may agree may make the Capital Contribution that
the Delinquent Member failed to make and the Allocable Shares of the Members,
including the Delinquent Member, shall be adjusted to reflect the Delinquent
Member's failure to make the Capital Contribution and the resulting increase in
the Capital Accounts of the remaining Members and appropriate adjustments in the
Members' Company Interests.,

         9.4 Capital Accounts, Allocations, and Distributions Attributable to
Transferred Interest. A Capital Account is and shall be maintained for each
Member. Each Member's Capital Account shall be increased by (a) the amount of
money contributed by that Member to the Company, (b) the fair market value of
property

                                       26

<PAGE>

contributed by that Member to the Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to
under Section 752 of the Code), and (c) allocations to that Member of Company
Net Taxable Income and Net Tax Losses (or items thereof), including income and
gain exempt from tax and income and gain described in Treasury Regulation
Section l.704-l(b)(2)(iv)(g), but excluding income and gain described in
Treasury Regulation Section 1.704-1(b)(4)(i), and shall be decreased by (d) the
amount of money distributed to that Member by the Company, (e) the fair market
value of property distributed to that Member by the Company (net of liabilities
secured by such distributed property that such Member is considered to assume or
take subject to under Section 752 of the Code), (f) allocations to that Member
of expenditures of the Company described (or treated as described) in Section
705(a)(2)(B) of the Code, and (g) allocations of Company loss and deduction (or
items thereof), including loss and deduction described in Treasury Regulation
Section 1.704-1 (b)(2)(iv)(g), but excluding items described in (f) above and
loss or deduction described in Treasury Regulation Section 1.704-1 (b)(4)(i) or
1.704-I (b)(4)(iii). The Members' Capital Accounts shall also be maintained and
adjusted as permitted by the provisions of Treasury Regulation Section 1.704- I
(b)(2)(iv)(f) and as required by the other provisions of Treasury Regulation
Sections 1.704- 1(b)(2)(iv) and I .704-1(b)(4), including adjustments to reflect
the allocations to the Members of depreciation, depletion, amortization, and
gain or loss as computed for book purposes rather than the allocation of the
corresponding items as computed for tax purposes, as required by Treasury
Regulation Section 1.704-1(b)(2)(iv)(g). Thus, the Members' Capital Accounts
shall be increased or decreased to reflect a revaluation of the Company's
property on its books based on the fair market value of the Company's property
on the date of adjustment immediately prior to (A) the contribution of money or
other property to the Company by a new or existing Member as consideration for a
Membership Interest, (B) the distribution of money or other property by the
Company to a Member as consideration for a Membership Interest, or (C) the
liquidation of the Company. A Member that has more than one Membership Interest
shall have a single Capital Account that reflects all such Membership Interests,
regardless of the class of Membership Interests owned by such Member and
regardless of the time or manner in which such Membership Interests were
acquired. Upon the Disposition of all or a portion of a Membership Interest, the
Capital Account of the Disposing Member that is attributable to such Membership
Interest shall carry over to the Assignee in accordance with the provisions of
Treasury Regulation Section 1.704-1 (b)(2)(iv)(l).

         9.5 Withdrawal of Capital. Except as otherwise provided herein, no
Member shall be entitled to withdraw all or any portion of its Capital
Contribution or receive interest on its contributed capital or Capital Account.

                                    ARTICLE X
                          Allocations and Distributions

         10.1 Allocations of Company Income. As of the end of each Fiscal Year
(or any other, shorter period selected by the Executive Committee), the Company
Income shall be determined in accordance with generally accepted accounting
principles, as provided in Section 4.2. No later than 90 days after the end of
the Fiscal Year, the

                                       27

<PAGE>

Company shall make an annual distribution to its Members equal to no less than
75% of its Company Income for that immediately preceding Fiscal Year, unless
otherwise determined by a Unanimous Vote of the Members. The distribution shall
be allocated among the Members in accordance with their Allocable Share as of
the end of the Fiscal Year for which the Company Income has been calculated;
provided however, that the allocation of any cash distribution between the
Current Members shall be adjusted as necessary to maintain the Current Members'
Company Interest as reflected in the Capital Accounts of each Member in
proportion with the other as of the end of the prior Fiscal Year, which
adjustment may include a distribution of cash to maintain such proportions in
the event of the Company's loss of earnings for any Fiscal Year.

         10.2 General Tax Allocations. As of the end of each Fiscal Year, Net
Taxable Income and Net Taxable Losses shall be allocated among the Members
according to their respective Allocable Share.

         10.3 Special Allocations. At the end of each Fiscal Year and
notwithstanding any provision of Section 10.2, the following special allocations
shall be made for both Capital Account and for federal income tax purposes
unless otherwise provided:

         (a) In accordance with the ordering rules of Treasury Regulation
         Section 1.704-2(j), items of gross income and realized gain first shall
         be allocated in an amount and in a manner that complies with the
         "chargeback" requirement of Treasury Regulation Section 1.704-2(i)(4),
         the `qualified income offset" requirement of Treasury Regulation
         Section 1.704-1 (b)(2)(ii)(d), and the "minimum gain chargeback"
         requirement of Treasury Regulation Section 1.704-2(f). Further, any
         "partner non-recourse deductions" within the meaning of Treasury
         Regulation Section 1 .704-2(i)(2) attributable to "partner non-recourse
         debt" shall be allocated to the Member who bears the "economic risk of
         loss" for such debt in accordance with Treasury Regulation Section
         1.704-2(i). Any losses in excess of the losses allowable to the Members
         pursuant to the Treasury Regulations promulgated under Code Section
         704(b) shall first be allocated to the extent allowable hereunder to
         Members who are not precluded from receiving such allocations by the
         preceding provisions of this subparagraph (a), if any, and shall
         thereafter be allocated as provided in Section 10.2.

         (b) If a taxing authority ignores the characterization of any amounts
         paid to a Member (or an Affiliate thereof) as salaries, management
         fees, commissions, interest or other compensation for services
         ("Compensation"), and refuses to treat such payments as either
         guaranteed payments within the meaning of Code Section 707(c) or
         payments made to such Member other than in such Member's capacity as a
         "partner" within the meaning of Code Section 707(a), and such taxing
         authority ultimately treats such amounts paid to a Member (or an
         affiliate thereto) as a distribution to such Member for federal income
         tax purposes which reduces such Member's Capital Account, then the
         Compensation shall be treated as an allocation of an item of income or
         gain of the Company to the recipient Member so that, consistent with
         the intent of the Members, the Compensation shall not be treated as a
         distribution which reduces the recipient Member's Capital Account.
         Accordingly, such Member shall be allocated the first available items
         of Company

                                       28

<PAGE>

         income and gain (including in a succeeding year) in an amount equal to
         the Compensation.

         (c) If the Company owns (x) any property contributed by a Member that
         had a fair market value different from its adjusted basis for federal
         income tax purposes on the date of the contribution, or (y) any
         property that has been revalued pursuant to Treasury Regulation Section
         1.704-I (b)(2)(iv)(f), then for federal income tax purposes only and
         not for Capital Account purposes, any income, gain, loss or deduction
         with respect to such property shall be allocated among the Members in
         accordance with Code Section 704(c) and the Treasury Regulations
         thereunder. Pursuant to the "traditional method" of making Code Section
         704(c) allocations described in Treasury Regulation Section ss.
         1.704-3(b).

                                   ARTICLE XI
                                      Taxes

         11.1 Tax Elections. Upon written request of a Member, the Company shall
file an election under Section 754 of the Code and the treasury regulations
thereunder to adjust the basis of the Company assets under Section 734(b) or
743(b) of the Code, and shall cause the Company to file a corresponding election
under the applicable sections of state and local law.

         11.2 Tax Returns. The Executive Committee shall cause federal, state
and local tax returns for the Company to be prepared and filed with the
appropriate authorities in a timely manner. In compliance with applicable
regulations, the Company shall cause to be delivered to each Person who was a
Member at any time during such Fiscal Year all information concerning the
Company necessary for the preparation of such Person's tax returns, including a
statement showing such Person's share of taxable gain or taxable loss (or items
thereof) for such year for federal, state and local tax purposes.

         11.3 Tax Matters Member.

         (a) GNGC, or an Affiliate of GNGC, is hereby appointed the "Tax Matters
         Partner" (herein sometimes referred to as the "Tax Matters Member") of
         the Company for all purposes pursuant to Sections 6221 and 6231 of the
         Code. The Tax Matters Member, or its designee, shall (i) furnish to
         each Member a copy of each notice or other communication received from
         the Internal Revenue Service or applicable state authority (except such
         notices or communications as are sent directly to each such Member),
         (ii) keep each Member informed of any administrative or judicial
         Proceeding, as required by Section 6223(g) of the Code, (iii) allow
         each Member an opportunity to participate in all administrative and
         judicial Proceedings involving the tax matters of the Company, and (iv)
         advise and consult with each Member as to proposed adjustments to the
         federal or state income tax returns of the Company. At least fifteen
         (15) days prior to the filing of the Company's U.S. Partnership Tax
         Return, a draft of such return shall be circulated to each other Member
         for its review. The Tax Matters Member shall circulate to each other
         Member a draft of any state income tax return promptly

                                       29

<PAGE>

         after it is available, and, in any event, at least fifteen (15) days
         prior to the filing of any such return. Prior to the filing of any
         other federal, state or local tax return, the Tax Matters Member shall
         cause a draft of such tax return to be circulated to each other Member
         for its review promptly after it is available. The Company shall not be
         obligated to pay any fees or other compensation to the Tax Matters
         Member in its capacity as such, provided that the Company shall
         reimburse the Tax Matters Member for any and all out-of-pocket costs
         and expenses (including reasonable attorneys' and other professional
         fees) incurred by it in its capacity as Tax Matters Member. The Company
         shall indemnify, defend and hold the Tax Matters Member harmless from
         and against any loss, liability, damage, cost or expense (including
         reasonable attorneys' fees) sustained or incurred as a result of any
         act or decision concerning Company tax matters and within the scope of
         such Member's responsibility as Tax Matters Member, so long as such act
         or decision was not done fraudulently or in bad faith or as a result of
         willful and wanton misconduct or gross negligence or, with respect to
         any criminal Proceeding against the Tax Matters Member, such Member had
         no reasonable cause to believe its conduct was unlawful. The Tax
         Matters Member shall consult with each other Member concerning the cost
         of legal services. The Tax Matters Member may resign upon thirty (30)
         days written notice to the Company. Notwithstanding the foregoing, the
         Tax Matters Member is not authorized to take any action with regard to
         the foregoing matters which would be binding on either the Company or
         the Member without the approval of the Executive Committee.

         (b) If a Member objects to the tax treatment of an item on any income
         tax return, such Member shall promptly inform the Tax Matters Member of
         its objection and the grounds upon which the objection is based. If the
         Tax Matters Member, after due consideration of a Members objection, is
         of the view that the tax treatment of the item in question on the
         return as originally submitted is reasonable, then the Tax Matters
         Member shall cause the Company to file the return reporting the item in
         question in the manner originally submitted.

         11.4 Tax Controversies. The Members shall comply with the
responsibilities outlined in this Section and in Sections 6222 through 6231 and
6050K of the Code (including any Treasury Regulations promulgated thereunder)
and in doing so shall incur no liability to any other Member. The Tax Matters
Member shall not agree to any extension of the statute of limitations for making
assessments of tax on behalf of the other Members without first obtaining the
written consent of the other Members. The Tax Matters Member shall not bind the
other Member to a settlement agreement in respect of taxes without obtaining the
written consent of the other Member. Any Member who enters into a settlement
agreement with the Secretary of the Treasury with respect to any "partnership
items", as defined in Section 6231 (a)(3) of the Code, shall notify the other
Member of such settlement agreement and its terms within 90 days from the date
of settlement. The Tax Matters Member shall not, in its capacity as Tax Matters
Member, file a petition under Code Sections 6226, 6228 or any other Code
Sections with respect to any Company item, or other tax matters involving the
Company, without the consent of the other Members. The Company shall retain its
records with respect to each fiscal year until the expiration of 90 days after
the period within which additional federal or state income tax may be assessed
for such year. The provisions of this Section will survive the

                                       30

<PAGE>

termination of the Company and the transfer of either Member's Company Interest
and will remain binding on the Members for a period of time necessary to resolve
any and all matters regarding the federal and, if applicable, state income
taxation of the Company.

                                   ARTICLE XII
                        Disposition of Company Interests

         12.1 Right of Disposition. Each Member agrees not to Dispose of its
Company Interest, in whole or in part, or to withdraw from the Company, except
as provided in this Article. In connection with any Disposition, each Member
party to such Disposition (including any Additional Member admitted as a Member
as a result of such Disposition) shall provide to the Company the information
required to revise Exhibits B and C only as to such Members, and Exhibit D shall
be so revised and distributed to Members. Nothing in this Article XII shall be
construed to limit a Member's ability to transfer its entire Company Interest to
an entity that is wholly owned, directly or indirectly, by such Member or is
wholly-owned, directly or indirectly, by the entity that owns one hundred
percent of such Member. Such a transfer to a wholly-owned Person will be
recognized by the Company upon receipt of written notice from the transferor
Member.

         12.2 Dispositions not in Compliance with this Article Void. Any
attempted Disposition of a Company Interest, or any part thereof, not in
compliance with this Article XII is null and void ab initio.

         12.3 Disposition Between Members.

         (a) Except as provided in this Section 12.3, unless the Executive
         Committee provides otherwise by Unanimous Vote, a Member shall not be
         permitted to Dispose of less than one hundred percent (100%) of its
         Company Interest. In the event a Member desires to Dispose of all of
         its Company Interest, it shall first offer such Company Interest to the
         remaining Member at Market Value. In the case of a Disposition of all
         of the Company Interest of a Member (whether occurring pursuant to this
         Section 12.3 or otherwise), the other Member may designate a third
         party or parties to purchase all or part of such Company Interest and
         continue the business of the Company without dissolution. Should the
         remaining Member elect not to purchase such Company Interest or to
         designate a third-party purchaser or the Members are unable to agree
         upon the terms upon which a sale shall take place, the Member desiring
         to sell its Company Interest shall be entitled to attempt to sell to a
         third party in accordance with Section 12.4.

         (b)

                  (1) GNGC is hereby granted three options to purchase
                  Piedmont's Membership Interest ("Annual Purchased Interest"),
                  which options shall vest on January 1st of each of the 2008,
                  2009 and 2010 Fiscal Years (respectively the "2008 Option,
                  "2009 Option" and "2010 Option" or collectively referred to as
                  the "Options"). The 2008 Option shah entitle GNGC to purchase
                  33.3% of Piedmont's then current Company Interest; the 2009
                  Option shall entitle GNGC to purchase 50% of Piedmont's

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<PAGE>

                  Company Interest; and the 2010 Option shall entitle GNGC to
                  purchase 100% of Piedmont's Company Interest. Upon GNGC's
                  exercise of either of the 2008 Option or the 2009 Option.
                  Piedmont may cause GNGC to purchase 100% of its remaining
                  Company Interest (the "Put Option"), which, when exercised,
                  will be included in the Annual Purchase Interest. The purchase
                  and corresponding increases and decreases in the Member's
                  Company Interest whether by exercise of an Option or the Put
                  Option shall be proportionately reflected in each Member's
                  Capital Account and Allocable Share.

                  (2) The effective date of any purchase made pursuant to an
                  Option or the Put Option shall be 12:01 AM, January 1st of the
                  Fiscal Year in which the option is exercised (the "Option
                  Effective Date"). The purchase price for the Annual Purchased
                  Interest upon the exercise of any Option or Put Option shall
                  be the Market Value of the Annual Purchased Interest as of the
                  Option Effective Date. Piedmont and GNGC agree that any
                  purchase made pursuant to this Section 12.3 shall be made
                  pursuant to the Conveyance and Assignment Agreement and LLC
                  Interest Power in the form attached hereto as Exhibit I and
                  the purchase price for the Annual Purchased Interest shall be
                  paid in cash simultaneously with the execution and delivery of
                  such agreements.

                  (3) By November 1st in the year preceding the exercise of any
                  Option, GNGC shall deliver a written signed notice (the
                  "Initial Notice") to Piedmont specifying (A) whether GNGC
                  intends to exercise its Option and (B) the anticipated Market
                  Value of the Annual Purchased Interest subject to such Option.
                  By or before the immediately following December 15th, Piedmont
                  shall deliver a written signed notice (the "Response Notice")
                  to GNGC indicating either: (A) it accepts and agrees to the
                  Market Value proposed by the Initial Notice and consequently,
                  whether it intends to exercise its Put Option at the proposed
                  Market Value (aggregated for the entire Company Interest
                  subject to such Put Option); or (B) it disagrees with the
                  Market Value proposed in the Initial Notice and
                  counter-proposes an alternative Market Value, which
                  alternative Market Value must be provided therein. GNGC has 20
                  days from receipt of the Response Notice to respond by written
                  notice to Piedmont regarding whether it accepts Piedmont's
                  alternative Market Value. If GNGC does not accept Piedmont's
                  alternative Market Value, either GNGC or Piedmont may invoke
                  the Dispute Resolution Procedures of Article 16 hereof to
                  determine the appropriate Market Value for the Annual
                  Purchased Interest.

                  Upon the date of either (A) GNGC's notice of acceptance of
                  Piedmont's alternative Market Value or (B) the determination
                  of an appropriate Market Value pursuant to the Dispute
                  Resolution Procedures, Piedmont shall have 10 days to provide
                  written signed notice to GNGC stating that it intends to
                  exercise its Put Option at the then-determined Market Value
                  (aggregated for the entire Company Interest subject to such
                  Put Option).

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<PAGE>

                  Failure to provide such notice shall constitute a waiver of
                  the Put Option (as applicable for such Option). Notice of the
                  exercise of the Options or the Put Option as expressed in
                  signed writing by either Member is irrevocable.

                  (5) The consummation of any purchase pursuant to the exercise
                  of any Option or Put Option granted by this Section may
                  necessarily be conditioned on the consent of the Georgia
                  Public Service Commission (GaPSC) or such other conditions of
                  other governmental authorities having jurisdiction over the
                  Company or either of the Members. Each Member hereby agrees to
                  act in good faith and to use all commercially reasonable
                  efforts to consummate the purchases contemplated hereby,
                  including the execution of any Conveyance and Assignment
                  Agreement, LLC Interest Power or similar documents and actions
                  necessary and reasonable to obtain the consent of the GaPSC
                  before the closing of any such purchase proposed hereby.

                  (6) Upon the consummation of the purchase of all of Piedmont's
                  Membership Interest, Piedmont will withdraw from the Company
                  and become a "Withdrawing Member" as defined under Section
                  12.6 hereof.

         12.4 Third Party Disposition Procedures. A Member (the "Selling
Member") may sell all of its Company Interest to any bona fide third party
purchaser permitted to be a member of a limited liability company under the Act,
for cash or other consideration, provided that (i) such Member first complies in
good faith with the provisions of Section 12.3(a) above (ii) the Selling Member
allows the remaining Member to match the bona fide third party offer, and (iii)
each Member approves the sale of such Company Interest to such third party
purchaser and such third party becoming an Additional Member, which approval may
be by such Member at its sole discretion reasonably exercised. No such third
party purchaser may become an Additional Member without execution of an
Admission Agreement. To satisfy clause (ii) above, the Selling Member shall
present a written offer to the remaining Member, through the Executive
Committee, stating the name of the proposed third party purchaser (the
"Purchaser") and all the terms and conditions of the proposed offer, including
sales price. The non-selling Member shall have the right for a period of sixty
(60) days from receipt of such written offer to elect to accept such written
offer on the same terms and conditions applicable to such proposed purchaser In
the event the remaining Member does not elect to purchase the Company Interest
from the Selling Member, the remaining Member does not approve the sale of such
Company Interest to the Original Purchaser, the Selling Member elects to
continue its attempt to sell such Company Interest, and the date of such
rejection or failure to approve a sale hereunder is after December 31, 2010
(otherwise the Selling Member shall have no right to sell its interest
hereunder) the following procedure shall apply:

         (a) The Selling Member may present a bona fide written offer from a
         different third party purchaser (the "Purchaser") to the remaining
         Member in accordance with this Section 12.4 provided that the
         Replacement Purchaser offer must be presented to the remaining Members
         on or before 5:00 p.m. Central Time on the fifth business day following
         the Selling Member's receipt of notice that the sale of

                                       33

<PAGE>

         its Company Interest to the Original Purchaser was not approved. The
         remaining Member shall have the right for a period of sixty (60) days
         from receipt of such written offer to elect to accept such written
         offer on the same terms and conditions applicable to such Replacement
         Purchaser.

         (b) In the event the Selling Member does not present a written offer
         from a Replacement Purchaser, the remaining Member does not elect to
         purchase the Selling Member's Company Interest or a sale of the Selling
         Member's Company Interest to the Replacement Purchaser is not approved
         and the Selling Member elects to continue its attempt to sell its
         Company interest, the Selling Member and the remaining Member will
         engage a third party appraiser ("Appraiser") to determine the Market
         Value of the Selling Member's Company Interest. In the event the
         Members do not agree on the Market Value of the Selling Member's
         Company Interest, either Member may elect to resolve the dispute in
         accordance with Article 16 hereof.

         (c) The remaining Member shall have the option to either: (i) purchase
         the Selling Member's Company Interest for a purchase price equal to
         such remaining Member's per capita share of the lesser of (x) the fair
         Market Value determined by the Appraiser or (y) the lowest third party
         written offer previously presented to the remaining Member by the
         Selling Member; or (ii) dissolve the Company. Unless the remaining
         Member elects to purchase the Selling Member's Company Interest
         pursuant to Section 1 2.4(c)(i) hereof, or the Selling Member elects to
         discontinue the sale of its Company Interest pursuant to Section
         12.4(d)below, the Members unanimously agree in advance to dissolve the
         Company pursuant to Section 12.4(c)(ii).

         (d) A Selling Member that (i) elects to sell its Company Interest
         pursuant to this Section 12.4 and presents a third party offer shall be
         entitled to discontinue its effort to sell its Company Interest at any
         time. However, in the event of discontinuance of its attempt to sell
         its Company Interest, such Member shall not be entitled to attempt to
         sell its Company Interest again pursuant to this Section 12.4 during a
         period beginning on the day it elects to discontinue its attempt to
         sell its Company Interest and ending on the 180th day following such
         election.

         12.5 Changes In Control.

         (a) In the event a Member experiences a Change in Control ("affected
         Member"), each of the other Members (each a "non-affected Member")
         shall have the following options:

                  (1) if the affected Member is GNGC, Piedmont shall have the
                  option to (A) acknowledge the Change in Control and remain a
                  Member or (B) cause GNGC to purchase its entire Company
                  Interest, each in accordance with the procedure provided in
                  this Section 12.5.

                  (2) if the affected Member is Piedmont, GNGC shall have the
                  option to either: (A) acknowledge the Change in Control and
                  remain a Member,(B) purchase Piedmont's entire Company
                  Interest or (C) Piedmont shall have

                                       34

<PAGE>

                  the right to cause GNGC to purchase its entire Company
                  Interest, each in accordance with the procedure provided in
                  this Section 12.5.

         (b) Each non-affected Member may exercise its options independently
         of the other non-affected Member, if any. The affected Member shall
         give signed written notice of the proposed Change of Control
         transaction to the non-affected Member(s) no later than
         contemporaneously with public announcement of the Change in Control,
         and in no event less than 30 days prior to consummation of such Change
         in Control. The non-affected Member(s) (or the affected Member in the
         event of Piedmont's option pursuant to paragraph 2(C) above) shall give
         the other Member (or the acquirer of the affected Member, as
         applicable) signed written notice (the "Option Notice") of the option
         it has chosen pursuant to Section 12.5(a) within 45 days of the date of
         notice of the Change of Control. If the non-affected Member(s) (or the
         affected Member in the event of Piedmont's option pursuant to paragraph
         2(C) above) has chosen option (B) in paragraph (1) above, or options
         (B) or (C) in paragraph (2) above, each as applicable, the Option
         Notice must contain the sale/purchase price for the Member's entire
         Company Interest, which purchase price shall be equal to the Market
         Value of such Company Interest determined as of the date of the
         announcement of any such Change in Control. If there is a disagreement
         regarding the Market Value proposed as the purchase/sale price for the
         respective Company Interest, either Member, within twenty (20) days
         from its receipt of the Option Notice, may initiate the Dispute
         Resolution Procedures provided in Article 16 hereof to determine the
         appropriate Market Value for the respective Company Interest. Any sale
         of the Member's Company Interest shall be made pursuant to a Conveyance
         and Assignment Agreement substantially in the form of Exhibit I hereto.

         Any election by a non-affected Member made pursuant to this Section
         12.5 (signed and written as specified above) is irrevocable.

         (c) The consummation of any agreement or exercise of right to sell or
         purchase a Member's Company Interest shall be subject to the
         consummation of the Change in Control. In the event that a disposition
         pursuant to this Section is terminated because the Change in Control
         was not consummated, the affected Member shall bear (and refund and
         reimburse the Company and the other Members as appropriate) one hundred
         percent (100%) of all third party costs incurred by Company and the
         Members in connection with the terminated disposition.

         (d) In the event the non-affected Member elects to consent to the
         Change in Control, the affected Member, or any successor Person created
         as a result of the Change in Control, shall retain its Company
         Interest.

         12.6 Withdrawal from Company. Upon a transfer of a Member's entire
Company Interest in accordance with this Article XII, such Member (the
"Withdrawing Member") shall be deemed to have withdrawn as a Member and shall
have no further rights or obligations as a Member under this Company Agreement,
except those obligations set forth under Section 7.2, Section 15.9 and Section
12.7. Nothing in this Section 12.6 shall alter a Member's obligations set forth
in Section 6.1 Other than as set forth herein; no Member shall be entitled to
withdraw from the Company.

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<PAGE>

         12.7 Transition Costs. In the event of a transfer of a Member's entire
Company Interest in accordance with this Article XII, and the Company's use of
service marks and trade names licensed by the Withdrawing Member or an Affiliate
to the Company ceases upon the Member's withdrawal from the Company, the
Withdrawing Member shall reimburse the Company for all direct costs reasonably
incurred by the Company in connection with its discontinuance of use of the
service marks and trade names, including, for example, costs incurred in
connection with the changing of signs and Company stationary and revising
existing advertisements.

                                  ARTICLE XIII
                           Dissolution and Winding Up

         13.1 Dissolution. The Company shall be dissolved and its affairs wound
up upon the first to occur of the following events ("Dissolution Event")

         (a) the unanimous written consent of all of the Members;

         (b) an event which makes it unlawful for the Company business to be
         continued;

         (c) the sale or disposition of all or substantially all of the
         Company's assets and properties; and

         (d) the entry of a decree of judicial dissolution under ss.18-802 of
         the Act.

         13.2 Effect of Dissolution.

         (a) Upon dissolution, the Company shall cease carrying on as
         distinguished from winding up the Company business; however, the
         Company is not terminated, but continues until the winding up of the
         affairs of the Company is completed and the certificate of cancellation
         has been issued by the Secretary of the State of Delaware. The
         Liquidating Trustee shall in an orderly manner wind up the affairs of
         the Company and make an accounting of the Capital Account of each
         Member and of the Company assets, liabilities and operations from the
         date of the last previous accounting to the date of such dissolution.

                  (b) In the event of dissolution, the Members shall in good
                  faith, and for a period of no less than 30 days, attempt to
                  negotiate and agree upon a method of dissolution of the
                  Company in an effort to minimize the losses or other adverse
                  effects normally attendant to such an event (the "Negotiated
                  Dissolution"). In such efforts, and without limiting all other
                  appropriate considerations, the Members acknowledge and agree
                  that they shall consider the costs and benefits (tax-related
                  and otherwise) of no fewer than the following two
                  alternatives:

                  (1) selling the Company (or its assets) in whole, thereby
                  converting the Company (or its assets) to cash for the
                  purposes of winding-up the Company and distributing the
                  remaining cash to the Members (a "Company Sale");

                  (2) distributing the Company's assets to the Members in such a
                  manner as the Members may agree, and in so doing, cause such
                  distributions to be tax-free, or tax favorable, under 1R
                  Section 731, and other applicable law

                                       36

<PAGE>

                  (a "Tax Advantaged Distribution"). In connection with a Tax
                  Advantaged Distribution, the Members shall consider
                  distributing the Company's assets to the Members on such basis
                  as is appropriate, including on a state-by-state basis,
                  relative to the principal service territory of the Members'
                  Affiliates (e.g. North Carolina with respect to Piedmont and
                  Georgia with respect to GNGC).

         (c) If the Members are unable to agree upon an Negotiated Dissolution,
         the Members shall engage an Investment Bank agreeable to each Member
         (or, in the absence of such agreement, each Member shall select an
         Investment Bank and the Banks so selected shall agree upon a third
         party Bank) to serve as Liquidating Trustee hereunder (such Investment
         Bank being referred required to herein as the "Auctioneer"). The
         Auctioneer shall be obligated to auction the Company, in an "open"
         auction (the "Auction") in compliance with the principles and
         mechanism/procedure set forth below (the "Auction Procedures").
         Consistent with the Auction Procedures the Auctioneer shall be
         instructed to maximize the value of the distributions that ultimately
         will be made to the Members upon completion of the dissolution (the
         "Value Maximization Principle"). In attempting to achieve the Value
         Maximization Principle, the Auctioneer may, in its professional
         judgment, auction the Company in its totality or, alternatively,
         auction the Company's constituent components on a state-by-state (or
         territory-by-territory) basis.

         (d) To the extent a Member or any Affiliate of a Member desires to
         participate, directly or indirectly, as a bidder in the Auction, notice
         of such intent shall be given to each Member as well as to each
         participant in the Auction. Proper notice of such participation shall
         be a condition to a Member's (or Affiliate's) participation in the
         Auction. The Auctioneer shall be charged with taking such steps as it
         deems appropriate to ensure that all bidders are bona fide bidders with
         the financial resources (or financing) available to consummate the
         acquisition. Except as provided in Section 13.2(f), the consideration
         offered in all bids considered by the Auctioneer shall be cash or cash
         equivalents payable in immediately available funds, and such bids shall
         offer a firm purchase price which is not contingent on "earn-out" or
         related concepts.

         (e) The Auction shall be structured as a "sequential" auction with each
         bidder given an opportunity, and a finite period of time (e.g., 6
         hours) to exceed the then current highest bid. When any participant
         makes a bid in the auction, the amount and identity of such bidder
         shall be made known by the Auctioneer to each other participant. Once a
         bid is made, it shall be irrevocable unless and until a higher bidder
         is thereafter made. All participants will always be given the
         opportunity to make a higher bid and notice that (with respect to each
         bid that may be accepted by the Auctioneer), unless a higher bid is
         tendered within a finite period of time, the Company will be sold at
         the then current highest bid.

         (f) If a Member is a successful bidder, it may, at its option, either
         (i) elect to pay the purchase price amount offered in the successful
         bid to the Company in cash or cash equivalents, or (ii) elect to
         receive the assets for which it has successfully bid as an in-kind
         distribution from the Company pursuant to Section 13.3 hereof.

                                       37

<PAGE>

         13.3 Distribution of Assets on Dissolution. Upon the winding up of the
Company, the Company Property shall be distributed:

         (a) to creditors, including Members who are creditors (other than by
         reason of the operation and effect of ss.18-60 1 or ss.18-604 of the
         Act) to the extent otherwise permitted by law, in satisfaction of the
         Company's liabilities; and then

         (b) to the establishment of any reserves which the Liquidating Trustee
         may deem reasonably necessary for any contingent or unforeseen
         liabilities or obligations of the Company arising out of or in
         connection with the Company. Such reserves may be paid over by the
         Liquidating Trustee to an agent, as escrowed, to be held by him for the
         purpose of disbursing such reserves in payment of any of the
         aforementioned contingencies, and, at the expiration of such period as
         the Liquidating Trustee shall deem advisable, for distributing the
         balance thereafter remaining in the manner hereinafter provided; and
         then

         (c) to Members in satisfaction of liabilities for distributions; and
         then

         (d) to Members to the extent of and in proportion with their respective
         positive Capital Account; and then

         (e) the remainder, if any, to the Members in proportion to their
         respective Company Interest as in effect at the moment of the event
         giving rise to such dissolution.

Distributions under this Section 13.3 shall be in cash or in-kind as determined
by the provisions set forth in Article XIII hereof. All of the Members shall
endeavor to facilitate Tax Advantaged Distributions to each of the other
Members.

         13.4 Winding Up and Cert of Cancellation. The winding up of the Company
shall be completed when all debts, liabilities, and obligations of the Company
have been paid and discharged or reasonably adequate provision therefore has
been made, and all of the remaining property and assets of the Company have been
distributed to the Members. Upon the completion of winding up of the Company, a
certificate of cancellation shall be delivered to the Secretary of the State of
Delaware for filing. The certificate of cancellation shall set forth the
information required by the Act.

         13.5 Termination. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of liabilities to
creditors so as to enable the Executive Committee (or other Person winding up
the Company's affairs) to minimize the normal losses attendant upon a
liquidation. Each of the Members shall be furnished, by the Executive Committee,
with a statement setting forth the assets and liabilities of the Company as of
the date of complete liquidation. Upon compliance with the distribution plan set
forth in Section 13.3 (including payment over to the agent-escrowee if there are
sufficient funds therefore), the Company terminates.

         13.6 Use of Company Identity.

         (a) In the event of the dissolution of the Company, any Member shall be
         entitled to purchase from the Company the exclusive rights to all
         Company-owned trade names, trademarks or service marks, as well as all
         related logos, addresses, telephone numbers and similar forms of
         identification (such items referred to

                                       38

<PAGE>

         collectively as the "Trade Name") in accordance with the following
         procedure. In the event only one Member desires to purchase the Trade
         Name, the Members shall attempt to negotiate acceptable terms and
         conditions. If the Members are unable to reach agreement, the Members
         shall initiate the Dispute Resolution Process detailed in Article 16.
         The proceeds of the purchase of the Trade Name shall be distributed in
         accordance with Section 13.3 of this Company Agreement.

         (b) In all other cases relating to dissolution, unless the Members
         agree otherwise in a signed written agreement approved by the Executive
         Committee, no Member or Affiliate shall use the Company owned
         trademarks, trade names, service marks (or any deceptively similar
         trademarks, trade names or service marks), telephone number or address,
         for twenty-four (24) months after the dissolution of the Company.

                                   ARTICLE XIV

         14.1 Amendment. This Company Agreement may be amended or modified from
tune to time only by a written instrument (including, without limitation, any
Admission Agreement) adopted by the Members. No Member shall have any vested
rights in this Company Agreement which may not be modified through an amendment
to this Company Agreement.

                                   ARTICLE XV
                            Miscellaneous Provisions

         15.1 Entire Agreement. This Company Agreement along with the exhibits
attached hereto as may be amended from time to time, represents the entire
agreement with respect to the subject matter hereof among all the Members and
between the Members and the Company.

         15.2 Successors and Assigns. Subject to the provisions on Disposition
set forth herein, this Company Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.

         15.3 Governing Law. THIS COMPANY AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. WITH RESPECT
TO ANY PROCEEDING RELATING TO THIS COMPANY AGREEMENT, EACH MEMBER IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND
THE UNITED STATES DISTRICT COURT LOCATED IN THE STATE OF DELAWARE, AND WAIVES
ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT
IN ANY SUCH COURT AND WAIVES ANY CLAIM THAT SUCH PROCEEDING HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

         15.4 Notices. All notices required or permitted to be given or made
under this Company Agreement shall be given or made in writing. Such notices
shall be delivered by hand delivery, by facsimile or similar electronic means,
by nationally recognized overnight courier, or by certified or registered mail,
return receipt requested, addressed as

                                       39

<PAGE>

set forth in Exhibit B or any amendment thereto. Any party may change its
address for the purpose of this Section 15.4 by notice to the other(s) given in
the manner set forth above.

         15.5 Right of Creditors and Third Parties under Company Agreement. This
Company Agreement is entered into among the Company and the Members for the
exclusive benefit of the Company, its Members, and their successors and
permitted assignees. This Company Agreement is expressly not intended for the
benefit of any creditor of the Company or any other Person (other than any
Person with a right to indemnification under Section 6.9) Except and only to the
extent provided by applicable statute, no such creditor or third party shall
have any rights under this Company Agreement or any agreement between the
Company and any Member with respect to any Capital Contribution or otherwise.

         15.6 No Action for Partition. No Member shall have any right to
maintain any action for partition with respect to the property of the Company.

         15.7 Title to Company Property. Title to Company Property shall be held
in the name of the Company or its nominee.

         15.8 Company Funds. Company funds shall be deposited in one or more
accounts with a bank or banks located within the United States and approved by
the Executive Committee. Pending use in the business of the Company or
distribution to the Members, the funds of the Company may, in the discretion of
the Executive Committee, be deposited in a bank account or accounts, or invested
in such interest-bearing taxable or nontaxable investments, including without
limitation, checking and savings accounts, certificates of deposit and time or
demand deposits in commercial banks, U.S. government securities, securities
guaranteed by U.S. Government agencies, bankers' acceptances, Eurodollar
deposits and notes, both fixed rate and floating securities issued by money
market mutual funds, savings and loan association deposits, deposits in members
of the Federal Home Loan Bank System, or commercial paper, rated A-i or better
by Standard & Poor's Corporation or Prime-i or better by Moody's Commercial
Paper Division of Moody's Investor Services, Inc., or the successor to either of
them, provided that the Executive Committee shall not cause the Company to make
any such deposits or Investments that have a remaining maturity of more than one
year or that would require registration of the Company under the Investment
Company Act of 1940. Such funds shall not be commingled with funds of any other
Person.

         15.9 Confidentiality. Except as hereinafter provided, the Company and
each Member (a) shall treat as confidential and not disclose to any unauthorized
third party (including a Member's employees or Affiliates who have no need to
know) any confidential information obtained either directly or indirectly from
any other Member pursuant to this Company Agreement, or confidential information
developed or acquired on behalf of the Company by the Executive Committee or the
Company's Officers or employees (collectively "Confidential Information"), and
(b) shall not use any such Confidential Information for any purpose other than
in connection with the activities of the Company pursuant to this Company
Agreement. The limitations in this Section 15.9 shall not apply to the extent
Confidential Information: (i) was already in the possession of the receiving
Member, or its Affiliate, at the time it obtained such Confidential

                                       40

<PAGE>

Information; (ii) was or is published or otherwise is or becomes generally
available to the public through no fault of such receiving Member, or its
Affiliate, (iii) was or is lawfully made available to such Member or its
Affiliate without restriction by any Person which is not bound by an obligation
of confidentiality or use with respect to the information; (iv) was or is
independently developed by such Member or its Affiliate; or (v) is required to
be disclosed by operation of law or regulation, required in any Proceeding,
requested by a regulatory body and the disclosing Member deems it advisable, in
its discretion, to comply with the request, or is deemed advisable to be
disclosed in the good faith judgment of the disclosing Member in any Proceeding.
In the event disclosure is required or requested the disclosing Member shall
exercise all reasonable efforts to disclose such Confidential Information
pursuant to a confidentiality agreement or protective order. The Members and the
Executive Committee shall establish and enforce reasonable procedures for the
protection of Confidential Information and shall restrict disclosure of such
Confidential Information to those of the Company's employees, Officers, agents,
and Affiliates of each Member and the Company who need to know such Confidential
Information in connection with their functions and the purposes of the Company
as set forth herein. Each Member and the Executive Committee shall take such
reasonable and prudent steps and precautionary measures as may be required to
ensure compliance with this Section 15.9 by such of their or the Company's
employees, Officers, agents, Affiliates and other Persons as shall be given
access to such Confidential Information and shall be responsible for compliance
by its employees, officers, agents and Affiliates. Nothing in this Section 15.9
shall be construed to prohibit a Member's disclosure to its attorneys, auditors,
or other consultants, provided such attorneys, auditors or other consultants are
advised of this Section 15.9 and agree to be bound thereby.

         15.10 Transaction Costs. Each Member shall bear and pay its own
transaction costs relating to the negotiation and execution of this Company
Agreement.

         15.11 Severability. If any provision of this Company Agreement is
determined to be invalid, illegal or otherwise unenforceable for any reason by a
court of competent jurisdiction, the remaining terms and conditions of this
Company Agreement shall remain in full force and effect to the fullest extent
permitted by law. In such an event, the Members agree to make a good faith
effort to renegotiate the affected provisions.

                                   SECTION 16
                          DISPUTE RESOLUTION PROCEDURES

         16.1 Process

         (a) In the event of any dispute or controversy arising under the
         Company Agreement ("Dispute") as to the "fair market value" of any
         property or asset or the Market Value of the Company Interest of any
         Member or the Company (the "Disputed Asset") or other value, such
         Dispute shall be resolved pursuant to the terms hereof (the "Dispute
         Resolution Procedures"). Such process shall be initiated by written
         notice from one Member involved in the Dispute to the other Members.

                                       41

<PAGE>

         (b) Within ten (10) business days of notice of initiation of the
         Dispute Resolution Process, each disputing Member shall simultaneously
         disclose to the other in writing the amount in dollars representing the
         amount it believes is the appropriate value of the Disputed Asset (the
         "Fair Market Amount") as established by the terms hereof or any other
         agreement between the parties, if any. Each Member shall determine its
         Fair Market Amount on the assumption that it would be paid or pay the
         other Member, the Company or any third party, as applicable, in cash on
         the first day of the first calendar month which is at least ten days
         after the date that such Fair Market Amounts are simultaneously
         exchanged (such assumed date of payment being hereinafter called the
         "Assumed Payment Date"). During the fifteen-day period following the
         exchange of Fair Market Amounts as aforesaid, the Members shall attempt
         to resolve the difference between their respective Fair Market Amounts
         so as to avoid the delay and expense of the arbitration procedure
         hereinafter set forth.

         16.2 If the Members are unable to agree to a settlement within the
aforesaid fifteen-day period, then copies of both Fair Market Amounts, exactly
as originally exchanged by the parties, with no improvement, adjustment or
amendment whatsoever, shall be placed in one sealed envelope to be held by an
appointed party for ultimate submission to an unaffiliated accounting firm,
investment banking firm or other valuation expert (the "Appraiser") selected in
accordance with the procedure set forth in Paragraph 3 below.

         16.3 At the option of any Member involved in the Dispute, the Dispute
may be submitted to resolution to an Appraiser. The Members shall have 10 days
upon the exercise of this option to mutually agree on the identity of the
Appraiser for the Dispute. If the Appraiser initially selected declines to
accept such engagement, the Members shall agree on another third party as the
Appraiser. If the Members are unable to agree upon an Appraiser to so act within
10 Business Days, either Member may elect that the CPR Institute for Dispute
Resolution make such a selection.

         16.4 The Appraiser shall be instructed to independently determine the
proper amount, (the "Proper Amount") for the appropriate value of the Disputed
Asset on the assumption that such Proper Amount was paid or contributed in cash
on the Assumed Payment Date. The Proper Amount shall be determined by the
Appraiser based on his or her findings of facts and conclusions of law
applicable to the Dispute without any knowledge of the Fair Market Amounts,
which amounts each Member agrees to keep confidential. Neither Member shall,
prior to the Appraiser's determination of the Proper Amount, directly or
indirectly disclose to the Appraiser, in its submissions to the Appraiser or
otherwise, its or the other Member's Fair Market Amount (although each Member
may submit to the Appraiser evidence and other support for the amount which such
Member claims to be the Proper Amount so long as it does not disclose to the
Appraiser the extent to which such claimed Proper Amount differs from its or the
other Member's Fair Market Amount). Each Member agrees that it shall, and shall
cause the Company to, make available to the Appraiser all relevant books and
records relating to the Disputed Asset and all other information requested by
the Appraiser.

                                       42

<PAGE>

         16.5 The Appraiser shall notify the parties in writing of his or her
determination of the Proper Amount within thirty days or such later practicable
date of the receipt of the Dispute. Promptly thereafter the Members shall
deliver to the Appraiser the Fair Market Amounts held by them and authorize the
Appraiser to review the Fair Market Amount of each Member. The Appraiser will
promptly thereafter deliver to each Member his or her written report (the
Appraiser's Report) containing (a) the Appraiser's determination of which of the
two Fair Market Amounts is closer to the Proper Amount, which closer Fair Market
Amount is the awarded amount, and (b) a certification that the Appraiser did
not, before determining the Proper Amount, (i) obtain from either Member,
directly or indirectly, knowledge of either Member's Fair Market Amount or (ii)
obtain from any other source knowledge of either Member's Fair Market Amount.
The Members hereby agree that the Appraiser's conclusion shall be conclusive and
binding on the Members. Any purchase, sale, contribution or other action related
to or conditioned upon the resolution of the Dispute shall be consummated within
5 Business Days or the Appraiser's decision or such later date as the Members
may mutually agree and shall be based upon the awarded amount selected by the
Appraiser.

         16.6 The fees of the Appraiser and the other costs and expenses,
including attorneys' and other similar expenses, of the arbitration proceeding
shall be borne by the Member which submitted the Fair Market Amount which
differs the most from the Proper Amount determined by the Appraiser.

                                       43

<PAGE>

IN WITNESS WHEREOF, the Current Members have caused their authorized officers to
sign this Company Agreement as of the date first written above.

PIEDMONT ENERGY COMPANY

                                              By: /s/  Kevin M. O'Hara
                                                  ------------------------------
                                              Title: Vice President

GEORGIA NATURAL GAS COMPANY

                                              By: /s/  Richard T. O'Brien
                                                  ------------------------------
                                              Title: Executive Vice President
                                                     and Chief Financial Officer

                                       44

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