Document:

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                                                                   Exhibit 10.58

                               FIRM TRANSPORTATION
                          CARDINAL INTRASTATE PIPELINE

         This Service Agreement, entered into this the 26th day of June, 1998,
by and between Cardinal Extension Company, LLC, a North Carolina limited
liability company, hereinafter referred to as "Transporter," and Piedmont
Natural Gas Company, Inc., a North Carolina corporation, hereinafter referred to
as "Shipper."

                                   WITNESSETH

         WHEREAS, Transporter is the owner of an intrastate natural gas pipeline
which interconnects with the interstate pipeline system of Transcontinental Gas
Pipe Line Corporation ("Transco") in Rockingham County, North Carolina;

         WHEREAS, Transporter has sufficient capacity available on its pipeline
system to provide firm transportation service for Shipper pursuant to the terms
specified herein;

         NOW, THEREFORE, in consideration of the mutual covenants herein
assumed, Transporter and Shipper agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

1.01 As used herein, the following terms shall have meanings defined below:

         (a)      "British Thermal Unit" or "BTU" -- The amount of heat required
                  to raise the temperature of 1 pound of water 1 degree
                  Fahrenheit at 60 degrees Fahrenheit.

         (b)      "Contract Year" -- The year beginning with the date that
                  service shall commence as set forth in Paragraph 13.01 hereof,
                  or any anniversary thereof. Provided, however, that in the
                  event firm service commences on a day other than the first day
                  of the month, the Contract Year shall be considered to
                  commence on the first day of the month following the day on
                  which service has commenced.

         (c)      "Cubic Foot" -- The volume of gas which occupies one cubic
                  foot when such gas is at a temperature of 60 degrees
                  Fahrenheit and an absolute pressure of 14.73 pounds per square
                  inch.

         (d)      "Day" -- A period of 24 consecutive hours beginning as nearly
                  as practicable at 10:00 a.m. Eastern Standard Time or Eastern
                  Daylight Time, as appropriate, or at such other hour as
                  Transporter and Shipper mutually agree.

         (e)      "Dekatherm" or "dt" -- The quantity of heat energy which is
                  1,000,000 British Thermal Units.

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         (f)      "Equivalent Quantity" -- The volume of gas measured in Mcf
                  received by Transporter at the Point of Receipt during any
                  given period of time, adjusted for any variations in Btu
                  content, it being the intent of the parties that the volumes
                  of gas delivered hereunder at the Point of Delivery be the
                  thermal equivalent of the volumes of gas received at the Point
                  of Receipt less any amounts attributable to fuel and line
                  losses.

         (g)      Excess Rate Schedule CFT Service -- The service shall be
                  available on any Day when the total quantity of gas taken by
                  all firm shippers in Zone 1 is less than the dekatherm
                  equivalent of 130,000 Mcf per day and/or the total quantity of
                  gas taken by all Shippers in Zone 2 is less than the dekatherm
                  equivalent of 140,000 Mcf per day provided that such service
                  has been scheduled by Shipper and allocated by Transporter on
                  such Day.

         (h)      "Force Majeure" means acts of God, strikes, lockouts or other
                  industrial disturbances, acts of the public enemy or
                  terrorists, wars, blockades, insurrections, riots, epidemics,
                  landslides, lighting, earthquakes, fires, storms, floods,
                  washouts, arrests, the order of any court or governmental
                  authority having jurisdiction while the same is in force and
                  effect, civil disturbances, explosions, breakage, accidents to
                  machinery or pipelines, freezing of or damage to receipt or
                  delivery facilities, National Weather Service warnings or
                  advisories, whether official or unofficial, that result in the
                  evacuation of facilities, inability to obtain or unavoidable
                  delays in obtaining material or equipment, a Force Majeure
                  event or Operating Conditions on the pipeline system of
                  Transco or any other event, condition or incident which
                  prevents Transco from tendering gas to Transporter for
                  transportation hereunder, and any other cause whether of the
                  kind herein enumerated or otherwise, not reasonably within the
                  control of either party claiming suspension and which by the
                  exercise of due diligence such party is unable to prevent or
                  overcome.

         (i)      "Heating Value" -- Gross heating value on a dry basis which is
                  the number of British Thermal Units produced by the complete
                  combustion at constant pressure of the amount of dry gas which
                  would occupy a volume of one cubic foot at 14.73 Psia and 60
                  degrees Fahrenheit with combustion air at the same temperature
                  and pressure as the gas, the products of combustion being
                  cooled to the initial temperature of the gas and air and the
                  water formed by combustion condensed to the liquid state.

         (j)      "Mcf" -- 1,000 cubic feet of gas.

         (k)      "Month" -- A period beginning as nearly as practicable at
                  10:00 a.m. Eastern Standard Time or Eastern Daylight time, as
                  appropriate, or at such other hour as Transporter and Shipper
                  agree upon on the first day of a calendar month and shall end
                  at the aforesaid time on the first day of the next succeeding
                  calendar month.

         (l)      "Operating Conditions" means the necessity to make
                  modifications, tests or repairs to Transporter's pipeline
                  system. Transporter shall exercise reasonable diligence to

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                  schedule maintenance so as to minimize disruption of service
                  to Shipper and shall provide reasonable notice of the same.

         (m)      "Psia" -- Pounds per square inch absolute.

         (n)      "Psig" -- Pounds per square inch gauge.

         (o)      "Scheduled Daily Delivery Quantity" -- The daily quantity of
                  gas requested in advance by Shipper electronically or
                  otherwise to Transporter covering a specific period of time.

         (p)      "Transportation Contract Quantity" or "TCQ" -- The quantity of
                  gas specified in Article 2, Paragraph 2.01, which shall be the
                  maximum quantity that Transporter is obligated to deliver
                  hereunder on any day, at the Point(s) of Delivery set forth in
                  Article 4 hereof.

         (q)      "Year" -- A period of three hundred and sixty-five (365)
                  consecutive days beginning on the date of initial delivery of
                  gas under this Service Agreement, or on any anniversary
                  thereof, provided, however, that any such year which contains
                  a date of February 29, shall consist of three hundred and
                  sixty-six (366) consecutive days.

                                    ARTICLE 2
                           GAS TRANSPORTATION SERVICE

2.01     Subject to the terms and provisions of this Service Agreement,
         Transporter agrees to receive, transport and redeliver, on a firm
         basis, for Shipper's account up to the dekatherm equivalent of a
         Transportation Contract Quantity ("TCQ") of 60,000 Mcf per day of
         natural gas from the Point of Receipt specified in Article 3 hereof to
         the Point(s) of Delivery specified in Article 4 hereto.

2.02     Transportation service rendered hereunder shall be firm and shall not
         be subject to interruption or curtailment except as provided in Article
         17 hereof.

                                    ARTICLE 3
                                POINT OF RECEIPT

3.01     Shipper shall deliver or cause to be delivered gas for transportation
         hereunder and Transporter shall receive gas quantities up to Shipper's
         TCQ, plus any applicable fuel and line loss makeup, at the existing
         point of interconnection between Transporter and the pipeline system of
         Transco in Rockingham County, North Carolina ("Point of Receipt").
         Transporter shall accept deliveries at the Point of Receipt at a
         pressure sufficient to allow the gas to enter Transporter's pipeline
         system at the varying pressures that may exist in such system from
         time-to-time; provided, however, that such pressure(s) of the gas
         delivered or caused to be delivered by Shipper shall not exceed the
         maximum operating pressure(s) specified by Transporter for the Point of
         Receipt.

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3.02     Shipper shall make any necessary arrangements with Transco so as to be
         able to deliver gas to Transporter at the Point of Receipt; provided,
         however, that such arrangements are compatible with the operating
         conditions on Transporter's pipeline system.

                                    ARTICLE 4
                              POINT(S) OF DELIVERY

         Transporter shall deliver to Shipper, or for the account of Shipper,
         Equivalent Quantities hereunder at the existing Point of Delivery
         between Transporter and Shipper on the southeast side of Burlington,
         North Carolina, and any future upstream points of delivery within
         Shipper's TCQ capacity entitlements. Transporter shall design its
         pipeline facilities and use reasonable efforts to deliver gas at the
         Point(s) of Delivery at a minimum pressure of not less than 550 psig.
         The maximum pressure at the Point(s) of Delivery shall not exceed the
         maximum operating pressure of Transporter's pipeline at such point(s).

                                    ARTICLE 5
                    DETERMINATION OF RECEIPTS AND DELIVERIES

5.01     Receipts and deliveries shall be allocated by Transporter according to
         a predetermined methodology administered by Transporter for the
         allocation among shippers each Day of each dt of gas which is delivered
         by Transporter at the Point(s) of Delivery. Under the current
         allocation methodology, the quantity of gas allocated each Day to each
         Shipper at the Point of Receipt shall be deemed to be, to the maximum
         extent possible, the quantities of gas delivered for such Shipper's
         account at the Point(s) of Delivery hereunder adjusted for any
         quantities attributable to fuel and line loss makeup.

5.02     Shipper shall cause Transco to provide Transporter with a predetermined
         daily allocation methodology in writing, or electronically (by
         electronic data transfer) for measured quantities based on scheduled
         quantities in advance of service each Day and prior to any intra-day
         changes pursuant to Section 7.02 below. The daily allocation
         methodology provided by Transco shall consist of rankings for
         allocation among all shippers nominating service such that receipts are
         equivalent to the quantities delivered by Transporter plus any
         quantities applicable for fuel or line loss makeup.

                                    ARTICLE 6
              DETERMINATION OF ALLOWABLE DAILY DELIVERY VARIATIONS
                              AND OVERRUN PENALTIES

6.01     Allowable daily delivery variations shall be the quantity computed as
         follows:

         (a)    During each Day of the period beginning May 1 of any Year and
                extending through the next succeeding September 30, 5 percent of
                Shipper's TCQ under this Service Agreement.

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         (b)    During each Day of the period beginning on October 1 of any Year
                and extending through the next succeeding April 30, 3.5 percent
                of Shipper's TCQ under this Service Agreement.

6.02     Any quantity of gas taken by Shipper on any Day from Transporter in
         excess of Shipper's TCQ under this Service Agreement shall, as adjusted
         by the allowable daily delivery variations above, be an unauthorized
         daily overrun unless:

         (a)    Shipper is utilizing the firm capacity entitlements of another
                firm shipper that is not using that capacity entitlement and
                Shipper has provided prior notice to Transporter, or

         (b)    Shipper is utilizing Excess Rate Schedule CFT Service which has
                been scheduled by Shipper and allocated by Transporter on such
                Day.

6.03     In the event of a Force Majeure, Shipper's revised TCQ pursuant to
         Article 17 below shall be utilized to determine the allowable daily
         delivery variation and unauthorized daily overrun quantity and any
         penalties thereon. Notice shall be provided by Transporter to Shipper
         of such revised TCQ by telephone or telecopy. Such notice shall be
         confirmed in writing as soon as reasonably possible.

6.04     In the event on any Day Shipper takes unauthorized daily overrun
         quantities, Shipper shall pay Transporter:

         (a)    an overrun charge equal to the 100 percent load factor FT rate
                per dt for quantities up to, but not exceeding, the daily
                allowable delivery variation set forth in Section 6.01 above,
                and

         (b)    an overrun penalty of $25 per dt for each dt of unauthorized
                daily overrun quantities in excess of the daily delivery
                variation set forth in Section 6.01 above.

6.05     All overrun penalties collected by Transporter during any calendar
         year, less an amount equal to the 100 percent load factor FT rate per
         dt multiplied by the total volume of overruns, shall be directly
         refunded to each non-overrunning firm transportation shipper for the
         Month(s) in which such penalties were incurred based on each such
         non-overrunning shipper's fixed cost contribution under its service
         agreement with Transporter as a percentage of the total fixed cost
         contributions of all non-overrunning shippers under all firm service
         agreements. Such refunds shall be made by January 31 of each calendar
         year.

6.06     The payment of a penalty for an unauthorized overrun quantity shall
         under no circumstances be considered as giving Shipper the right to
         take such unauthorized overrun quantity nor shall such payment be
         considered as a substitute for any other remedy available to
         Transporter or any other shipper against the offending shipper for such
         unauthorized overrun.

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                                    ARTICLE 7
                            SCHEDULING AND BALANCING

7.01     Shipper shall nominate service under this Service Agreement in advance
         of each Month or in advance of each Day in accordance with the
         nomination deadlines of Transco. Transporter, in its sole judgement,
         may waive any nomination deadlines, on a non-discriminatory basis, if
         Transporter determines that operating conditions permit. Such nominated
         quantities shall be subject to confirmation by Transporter which shall
         be based on the best operating information available to Transporter.
         Such confirmed quantity shall be deemed the scheduled quantity. Shipper
         and Transporter shall have scheduling personnel available to be
         contacted seven days a week, twenty-four hours a day.

7.02     During any Day, Shipper may request to reschedule, on a prospective
         basis, quantities scheduled pursuant to Section 7.01 above, provided
         that such quantities are consistent with rescheduled quantities and
         deadlines on Transco.

7.03     Shipper shall endeavor to balance receipts and deliveries as reasonably
         as practicable so that the quantities delivered by Transco to
         Transporter are consistent with the actual quantities taken by Shipper
         at the Point(s) of Delivery. Shipper shall have the responsibility to
         monitor daily receipts and deliveries during the Month based on the
         best information available.

7.04     Transporter shall provide its latest estimated allocation data on
         receipts and deliveries to all parties requesting such data. These
         allocated quantities will be subject to change and the data is offered
         for informational purposes only, and should not be relied on by Shipper
         for any purposes whatsoever.

                                    ARTICLE 8
                           SHIPPER'S RESPONSIBILITIES

Shipper recognizes that, as between it and Transporter, Shipper has sole control
over its physical takes of gas from Transporter's system and therefore has a
duty to refrain from taking delivery of unauthorized overrun quantities. Shipper
further recognizes that Shipper may cause hardship and economic damage to other
shippers in the event Shipper takes delivery of unauthorized overrun quantities
for which Shipper may be held accountable either through a direct cause of
action by such other shippers or as an impleaded or third party defendant in a
suit by such other shippers. In no event shall the payment of a penalty for an
overrun quantity pursuant to this Service Agreement be considered as giving
Shipper the right to take such unauthorized overrun quantity nor shall such
payment be considered as a substitute for all other rights and remedies
(including but not limited to consequential damages) available to any other
shipper against Shipper.

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                                    ARTICLE 9
                         TRANSPORTER'S RESPONSIBILITIES

Transporter recognizes that it has a duty to use reasonable care and prudent
operating procedures to allow Shipper to schedule for delivery within its TCQ,
as adjusted pursuant to a Force Majeure situation or Operating Conditions, the
gas quantities available to Shipper up to the amount verified and confirmed by
Transporter based on the best operating information available to Transporter.
Transporter also recognizes that unless forces beyond Transporter 's control
(including, but not limited to, Force Majeure, or the failure of Shipper or
Shipper's gas supplier to deliver scheduled gas quantities into Transporter's
system) cause interference with Transporter's ability to redeliver, Transporter
has a duty to tender to Shipper for redelivery the gas quantities which
Transporter has verified and confirmed as available to Shipper. Transporter
further recognizes that a breach of its duties herein may cause hardship and
economic damage to Shipper, for which Shipper reserves all rights and remedies
(including but not limited to consequential damages), and for which Transporter
may be held accountable.

                                   ARTICLE 10
                                RATES AND CHARGES

10.01    For firm transportation service provided to Shipper hereunder, Shipper
         shall pay to Transporter each month the sum of the following charges:

         (a)      Reservation Charge: Shipper's TCQ multiplied by the
                  reservation rate applicable to deliveries in the rate zone in
                  which the gas is delivered and as set forth on currently
                  effective Sheet No. 1 of Transporter's tariff.

         (b)      Commodity Charge: The applicable commodity rate set forth on
                  currently effective Sheet No. 1 multiplied by the quantities
                  of gas (dts) delivered.

         (c)      Excess CFT Charge: The applicable rate set forth on currently
                  effective Sheet No. 1 multiplied by the excess CFT quantity
                  delivered during that month.

10.02    Transporter shall retain from the quantities of gas received on behalf
         of Shipper hereunder any applicable fuel and line loss make-up
         associated with the transportation service provided hereunder.
         Transporter will evaluate any fuel retention percentages applicable to
         Shipper's service on an annual basis and will make any necessary
         filings with the NCUC to reflect any changes at least thirty (30) days
         prior to April 1 of each calendar year.

10.03    Transporter shall have the right, from time-to-time, through filings
         with the governmental agency having jurisdiction to seek to change the
         rates or allowance for fuel, and to change the other terms and
         conditions of this Service Agreement, without limitation or
         reservation; provided, however, that (a) the character of firm service,
         (b) the term, (c) the quantities, (d) the Point(s) of Receipt and
         Delivery, and (e) the delivery pressure shall not be subject to change
         hereunder without mutual agreement of the parties. Shipper shall have
         the right to

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         oppose any of the foregoing and to seek other changes to the terms and
         conditions of this Service Agreement to the extent that Shipper is
         legally permitted to do so under applicable provision(s) of law.
         Notwithstanding the foregoing, Transporter agrees to propose in any
         subsequent rate cases a cost allocation and/or rate design for firm
         deliveries upstream of Burlington, North Carolina that reasonably
         approximate the rates Shipper would have paid if the costs of the
         existing firm service had remained in the utility rate bases of PSNC
         and Piedmont and in the absence of the merger of Transporter and
         Cardinal Pipeline Company, LLC.

                                   ARTICLE 11
                                 QUALITY OF GAS

11.01    The parties hereto recognize that the natural gas delivered for
         transportation hereunder will necessarily be commingled in
         Transporter's pipeline system with gas received from other sources, and
         that the specific gas delivered to Transporter cannot be redelivered
         for Shipper's account. It is further agreed that the natural gas
         delivered to and by Transporter hereunder shall be merchantable natural
         gas.

11.02    All gas delivered to Transporter for Shipper and redelivered by
         Transporter to Shipper shall meet the quality standards for
         transportation on the interstate pipeline system of Transco as amended
         from time-to-time.

                                   ARTICLE 12
                       MEASUREMENT AND MEASURING EQUIPMENT

12.01    The unit of the natural gas deliverable hereunder shall be a Dekatherm
         of gas on the measurement basis hereinafter set forth.

12.02    The quantity and the Heating Value of the natural gas delivered by
         Transporter to or for the account of Shipper or delivered by Shipper to
         Transporter for redelivery shall be determined as follows:

         (i)      The unit of volume for the purpose of measurement shall be one
                  (1) Cubic Foot of gas at a temperature of 60 degrees
                  Fahrenheit and at an absolute pressure of fourteen and
                  seventy-three hundredths (14.73) pounds per square inch.

         (ii)     The unit of weight for the purpose of measurement shall be one
                  (1) pound mass of gas.

         (iii)    The average absolute atmospheric pressure shall be assumed to
                  be 14.73 pounds per square inch.

         (iv)     The temperature of the gas flowing through the meters, when
                  necessary for computing gas quantities, shall be determined by
                  the use of a recording thermometer or other temperature
                  measuring device. The arithmetic average of the temperature
                  recorded each 24-hour day, or so much of the 24 hours as gas
                  has been flowing, shall be used

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                  in computing gas quantities or instantaneous temperature
                  measurements may be applied to metering instruments to provide
                  the quantity computation.

         (v)      The specific gravity of the gas flowing through the meters,
                  when necessary for computing gas quantities, shall be, unless
                  otherwise agreed upon, determined by the use of a recording
                  gravitometer or an online process type gas chromatograph. The
                  arithmetic average of the 24-hour record, or so much of the 24
                  hours as gas has been flowing, or continuous instantaneous
                  specific gravity measurement may be applied to metering
                  instruments to provide the quality computation.

         (vi)     The deviation of the gas from Ideal Gas Laws shall be
                  calculated following the recommendations of the ANSI/API 2530
                  "Orifice Metering of Natural Gas and Other Related Hydrocarbon
                  Fluids" (A.G.A. Report No. 3) including the A.G.A. Manual for
                  Determination of Supercompressibility Factors of natural Gas
                  or the A.G.A. Transmission Measurement Committee Report No. 8
                  "Compressibility and Supercompressibility for Natural Gas and
                  Other Hydrocarbon Gases." If the composition of the gas is
                  such as to render the above procedure inapplicable, other
                  methods for determination of the deviation factors, mutually
                  agreed upon by Shipper and Transporter, shall be used.

         (vii)    The Heating Value shall be determined by either (1) the use of
                  a suitably located and acceptable make gas chromatograph or
                  (2) calculation from a fractional analysis, or (3) methods
                  outlined in A.G.A. Gas Measurement Committee Report No. 5,
                  latest edition, or (4) other methods mutually acceptable.
                  Dekatherms delivered shall be determined by either (1)
                  multiplying the Mcf delivered by a fraction the numerator of
                  which is the Btu per cubic foot and the denominator of which
                  is 1,000 or (2) multiplying the pounds mass delivered by a
                  fraction the numerator of which is the Btu per pound mass and
                  the denominator of which is 1,000,000.

12.03    Unless otherwise agreed to, Transporter will install, maintain, own and
         operate, at its own expense, at or near each Point of Receipt and each
         Point of Delivery, measuring stations properly equipped with standard
         orifice meters, flange connections, orifice plates and other necessary
         measuring equipment or other standard type meter suitable for the
         purpose by which the quantity of natural gas shall be measured and
         determined. The Heating Value of natural gas received or delivered
         shall be measured and determined as provided above. Orifice meters
         where used shall be installed and operated in accordance with ANSI/API
         "Orifice Metering of Natural Gas and Other Related Hydrocarbon Fluids,"
         latest revision, and shall include the use of straightening vanes.

12.04    Shipper acting jointly with Transporter may install, maintain and
         operate, at its own expense, such check measuring equipment as desired,
         provided that such equipment shall be so installed as not to interfere
         with the operation of Transporter 's measuring equipment.

12.05    Each party shall have the right to be present at the time of
         installing, reading, cleaning, changing, repairing, inspecting,
         testing, calibrating, or adjusting done in connection with

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         measuring equipment involved in billing and used in measuring or
         checking the measurement of receipts and deliveries. The records from
         such measuring equipment shall remain the property of their owner, but
         upon request, each will submit to the other its records and charts,
         together with calculations therefrom for inspection and verification,
         subject to return within ten (10) days after receipt thereof.

12.06    All installations of measurement equipment applying to or affecting
         receipts and deliveries shall be made in such manner as to permit an
         accurate determination of the quantity of natural gas delivered and
         ready verification of the accuracy of measurement. Care shall be
         exercised by Transporter and Shipper in the installation, maintenance
         and operation of pressure regulating equipment so as to prevent any
         inaccuracy in the determination of the quantity of gas received or
         delivered hereunder.

12.07    In the event a meter is out of service, or registering inaccurately,
         the quantity of natural gas received or delivered shall be determined,

         (i)    By using the registration of any check meter or meters if
                installed and accurately registering, or, in the absence of (i),

         (ii)   By correcting the error or the percentage of error if
                ascertainable by calibration, test, or mathematical calculation,
                or in the absence of both (i) and (ii), then

         (iii)  By estimating the quantity of receipts or deliveries during
                periods under similar conditions when the meter was registering
                accurately.

12.08    The accuracy of Transporter 's measurement equipment shall be verified
         by Transporter at reasonable intervals, and, if requested, in the
         presence of representatives of Shipper, but Transporter shall not be
         required as a matter of routine to verify the accuracy of such
         equipment more frequently than once in any thirty (30) day period.

12.09    If, upon test, any measurement equipment, including recording gas
         chromatograph, is found to be in error not more than two percent (2%),
         previous recording of such equipment shall be considered accurate in
         computing receipts and deliveries; but such equipment shall be adjusted
         at once to record correctly. If, upon test, any measurement equipment
         shall be found to be inaccurate by an amount exceeding two percent (2%)
         at a recording corresponding to the average hourly rate of flow for the
         period since the last preceding test, then any previous recordings of
         such equipment shall be corrected to zero error for any period which is
         definitely known, but, in case the period is not known definitely or
         agreed upon, such correction shall be for a period extending over
         one-half of the time elapsed since the date of the last test, not
         exceeding a correction period of 16 days.

12.10    Transporter and Shipper shall preserve all original or equivalent
         electronic test data, charts, or other similar records for a period
         required by the applicable rules of regulatory agencies having
         jurisdiction.

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                                   ARTICLE 13
                                TERM OF AGREEMENT

13.01    This Agreement shall be effective as of the date hereof and shall
         continue in effect until the expiration of the twentieth (20th)
         Contract Year, and year-to-year thereafter, subject to termination by
         either party at the end of the Contract Year or any year thereafter
         upon two years advance written notice to the other party.

13.02    Firm transportation service hereunder shall commence at the Effective
         Time of the Merger between Transporter and Cardinal Pipeline Company,
         LLC as defined in the Agreement and Plan of Merger, as amended.

                                   ARTICLE 14
                               BILLING AND PAYMENT

14.01    Transporter shall render its bill on or before the first Day of each
         Month for the Reservation Charges due for service rendered hereunder
         during the preceding calendar Month. On or before the 10th day of each
         Month, Transporter shall render its bill for any remaining charges for
         gas services rendered during the preceding calendar Month. Such bill
         shall include any Commodity Charges, Excess CFT Charges, any
         adjustments to the charges billed on the first day of the Month, and
         any penalties for unauthorized overruns applicable to the Month for
         which the bill is rendered.

14.02    Transporter and Shipper shall each, upon request of the other, deliver
         to the other for examination such pertinent records and charts as shall
         be necessary to verify the accuracy of any statement, chart, or
         computation made by either of them under or pursuant to any of the
         provisions hereof.

14.03    Shipper, except as otherwise hereinafter provided, shall pay to
         Transporter by wire transfer of immediately available funds on or
         before the 10th day of each Month for the Reservation Charges due for
         service rendered by Transporter hereunder during the preceding month
         and billed by Transporter in the statement for such month, and on or
         before the 20th day for each Month for any remaining charges for
         services which are due hereunder. If the normal payment due date is a
         Saturday, Sunday or holiday, this payment is due the following business
         Day.

14.04    Should Shipper fail to pay all of the amount of any bill for service
         hereunder when such amount is due, interest on the unpaid portion of
         such amount shall accrue at the rate equal to the prime rate of
         CitiBank, N.A. or its successor, calculated from the due date until the
         date of payment. If such failure to pay continues for thirty (30) days
         after payment is due, Transporter, in addition to any other remedy it
         may have hereunder, may suspend further transportation of natural gas
         hereunder until such amount is paid; provided, however, that if Shipper
         in good faith shall dispute the amount of any such bill or any part
         hereof, and shall pay to Transporter such amount as it concedes to be
         correct, and at any time thereafter within thirty (30) days of a demand
         made by Transporter, shall furnish good and sufficient surety

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         bond, guaranteeing payment to Transporter of the amount ultimately
         found to be due under such bill after a final determination, which may
         be reached either by agreement between the parties, arbitration or
         judgment for a court or by any regulatory authority having
         jurisdiction, then Transporter shall not be entitled to suspend further
         delivery of natural gas unless and until default be made in the
         conditions of such bond.

14.05    If within twelve (12) months of the date of payment, it shall be found
         that Shipper has been overcharged or undercharged in any form
         whatsoever under the provisions hereof, and Shipper shall have actually
         paid the bill(s) containing such overcharge or undercharge, then within
         thirty (30) days after the final determination thereof, Transporter
         shall refund the amount of any such overcharge with interest thereon at
         the prime rate of the CitiBank N.A. or its successor from the time such
         overcharge was paid to the date of refund, and Shipper shall pay the
         amount of any such undercharge but without interest.

14.06    In the event an error is discovered in the amount billed in any
         statement rendered by Transporter, such error shall be adjusted within
         thirty (30) days of the determination thereof, provided that claim
         therefor shall have been made within sixty (60) days from the date of
         discovery of such error, but in any event, within twelve (12) months
         from the date of payment.

14.07    If rendition of a bill to Shipper by Transporter is delayed beyond the
         date specified herein, then Shipper shall pay such bill by wire
         transfer within ten (10) days after rendition thereof.

                                   ARTICLE 15
                               ASSUMPTION OF RISK

15.01    As between the parties hereto, Shipper shall be deemed to be in control
         and possession of the gas to be transported hereunder until it shall
         have been delivered to Transporter at the Point of Receipt; and Shipper
         shall be deemed to be in control and possession of the gas to be
         transported hereunder after delivery for Shipper's account at the Point
         of Delivery. Transporter shall be deemed to be in control and
         possession of such gas after the delivery thereof to Transporter at the
         Point of Receipt and prior to delivery thereof for Shipper's account at
         the Point of Delivery.

15.02    Transporter shall have no responsibility with respect to any gas to be
         transported hereunder or on account of anything which may be done,
         happen or arise with respect thereto until it is delivered into its
         facilities at the Point of Receipt and after it is received for
         Shipper's account at the Point of Delivery. Shipper shall have no
         responsibility with respect to such gas or on account of anything which
         may be done, happen or arise with respect thereto after causing the
         delivery thereof to Transporter at the Point of Receipt and prior to
         delivery thereof for Shipper's account at the Point of Delivery.

                                       12
<PAGE>   13

                                   ARTICLE 16
                                   WARRANTIES

Shipper warrants for itself, its successors and assigns, that it will at the
time of delivery to Transporter for transportation have good and merchantable
title to or the legal right to tender all gas delivered hereunder free and clear
of all liens, encumbrances and claims. Shipper shall indemnify Transporter and
save it harmless from all suits, actions, debts, accounts, damages, costs,
losses and expenses arising from or out of adverse claims of any or all persons
to said gas, including claims for any royalties, taxes, license fees or charges
applicable to such gas or to the delivery thereof to Transporter for
transportation under this Service Agreement.

                                   ARTICLE 17
                                  FORCE MAJEURE

17.01    In the event of either party being rendered unable, wholly or in part,
         by Force Majeure or Operating Conditions to carry out its obligations
         other than (i) the obligation of Shipper to pay the monthly Reservation
         Charge due Transporter (except as provided in 17.03 below), and (ii)
         the obligation to make payment of amounts accrued and due at the time
         thereof, it is agreed that on such party's giving notice and full
         particulars of such Force Majeure or Operating Conditions in writing or
         by telecopy to the other party within a reasonable time after the
         occurrence of the cause relied on, the obligation of both parties, so
         far as they are affected by such Force Majeure or Operating Conditions,
         shall be suspended during the continuance of any inability so caused,
         but for no longer period, and such cause shall so far as possible be
         remedied with all reasonable dispatch. Neither party shall be liable in
         damages to the other for any act, omission or circumstance occasioned
         by, or in consequence of, Force Majeure or Operating Conditions, as
         herein defined in this Service Agreement.

17.02    If, due to Force Majeure or Operating Conditions, Transporter is unable
         to receive, transport or redeliver gas tendered by Shipper for
         transportation or if Shipper is unable to deliver gas to Transporter,
         then Transporter, upon providing as much notice as possible under all
         of the circumstances, shall order reduction of Shipper's TCQ to the
         extent necessary depending upon the type and location of the
         occurrence, in accordance with the following procedures: Transporter
         shall order allocation, to the extent necessary, of affected
         transportation service to all shippers proportionate to each shipper's
         TCQ. Where Transporter's ability to render service is impaired in a
         particular segment of Transporter's system, then such allocation shall
         be effected only in that segment of Transporter's system in which
         service has been impaired.

17.03    Such causes or contingencies affecting the performance by either party,
         however, shall not relieve it of liability unless such party shall give
         notice and full particulars of such cause or contingency in writing or
         by telecopy to the other party within a reasonable time after the
         occurrence relied upon, nor shall such causes or contingencies
         affecting the performance by either party relieve it of liability in
         the event of its failure to use due diligence to remedy the situation
         and remove the cause with all reasonable dispatch, provided that the
         resolution of strikes, lockouts or other labor disputes shall be within
         the sole discretion of the parties involved therein. Such causes or
         contingencies affecting the performance by either party

                                       13
<PAGE>   14

         shall not relieve Shipper from its obligations to make payments of
         monthly Reservation Charge except to the extent of Transporter's
         negligence or willful misconduct.

                                   ARTICLE 18
                                     NOTICES

Notice to either party shall be in writing and shall be considered as duly
delivered when mailed to the other party at the following address:

         If to Shipper:

                Piedmont Natural Gas Company, Inc.
                P. O. Box 33068
                Charlotte,  North Carolina   28233
                Attention: Senior Vice President - Gas Supply and Services
                Facsimile number: (704) 364-8320

         If to Transporter:

                Cardinal Extension Company, LLC
                c/o Cardinal Operating Company
                P. O. Box 1396
                Houston, Texas 77251
                Attention: Vice President, Customer Service
                Facsimile number: _________________

Such addresses may be changed from time-to-time by mailing appropriate notice
thereof to the other party by certified or registered mail.

                                   ARTICLE 19
                                  MISCELLANEOUS

19.01    Transporter grants the right to Shipper to direct tie-ins between its
         distribution system and Transporter's intrastate pipeline for the
         purpose of serving its franchise area subject to the negotiation of
         mutual agreeable terms and conditions (including reimbursement
         arrangements and/or incremental charges and the construction, operation
         and maintenance specifications for such tie-ins) which will be set
         forth in an Interconnect and Reimbursement Agreement to be negotiated
         and executed by Shipper and Transporter.

19.02    This Agreement reflects the entire agreement between the parties with
         respect to the subject matter hereof and supersedes all prior
         agreements and understandings, oral and written, among the parties with
         respect to the subject matter hereof. This Agreement can be amended,
         restated or supplemented only by the written agreement of Transporter
         and Shipper.

                                       14
<PAGE>   15

19.03    No waiver by either party of any default by the other party in the
         performance of any provision, condition or requirement herein shall be
         deemed to be a waiver of, or in any manner release the other party
         from, performance of any other provision, condition or requirement
         herein, nor shall such waiver be deemed to be a waiver of, or in any
         manner a release of, the other party from future performance of the
         same provision, condition or requirement. Any delay or omission of
         either party to exercise any right hereunder shall not impair the
         exercise of any such right, or any like right, accruing to it
         thereafter. No waiver of a right created by this Agreement by one party
         shall constitute a waiver of such right by the other party except as
         may otherwise be required by law with respect to persons not parties
         hereto. The failure of one party to perform its obligations hereunder
         shall not release the other party from the performance of such
         obligations.

19.04    This Agreement may be assigned by Shipper without the prior consent of
         Transporter provided that Shipper remains responsible for any and all
         obligations under this Agreement.

19.05    This Agreement and the obligations of the parties hereunder are subject
         to all applicable laws, rules, orders and regulations of any
         governmental authorities having jurisdiction, and to the extent of
         conflict, such laws, rules, orders and regulations of governmental
         authorities having jurisdiction shall control.

19.06    Any provision of this Agreement that is prohibited or unenforceable
         shall be ineffective to the extent of that prohibition or
         unenforceability without invalidating the remaining provisions hereof
         or affecting the validity or enforceability of that provision in any
         other jurisdiction.

19.07    This Agreement may be executed in counterparts, each of which shall be
         deemed an original, but all of which together shall constitute one and
         the same instrument.

19.08    THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
         THE LAWS OF THE STATE OF NORTH CAROLINA. EXCLUDING, HOWEVER, ANY
         CONFLICT OF LAWS RULES OR PRINCIPLES WHICH MIGHT REFER THE CONSTRUCTION
         OR OPERATION OF THE TERMS OF THIS AGREEMENT TO THE LAWS OF ANOTHER
         STATE.

                                       15
<PAGE>   16

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

                                            CARDINAL OPERATING COMPANY,
                                            as Operator of
                                            Cardinal Extension Company, LLC

                                            By: /s/ Frank J. Ferazzi
                                                --------------------
                                                Frank J. Ferazzi
                                                Vice President

                                            PIEDMONT NATURAL GAS COMPANY, INC.

                                            By: /s/ Thomas E. Skains
                                                --------------------
                                                Thomas E. Skains
                                                Senior Vice President
                                                Gas Supply and Services

                                       16EXHIBIT 10.1

                      EMPLOYEE AND CONSULTANT SERVICES PLAN

         THIS EMPLOYEE AND CONSULTANT SERVICES PLAN ("Plan") is made effective
as of the 7th day of January, 2000, by OAK TREE MEDICAL SYSTEMS, INC., a
Delaware corporation ("Company"), for various employees and consultants as
designated by the Board ("Participants").

                                R E C I T A L S:

         Pursuant to a Special Meeting of the Board of Directors, the Company
wishes to grant, and the Employees and Consultants wish to receive as
compensation for employment and consultation services to the Company, a total of
862,500 shares of the common stock of the Company, all pursuant to the
provisions set forth herein;

         NOW, THEREFORE, in consideration of the sum of Ten ($10.00) Dollars,
premises, mutual promises, covenants, terms and conditions herein, and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged by the parties, the parties agree as follows:

         1. Grant of Shares. The Company hereby grants to the Employees and
Consultants shares of common stock (the "Shares") in the Company.

         2. Services. Employees and Consultants have been employed and/or
engaged by the Company and the Company has received services and promises of
additional services, none of which have been or will be in connection with the
direct or indirect promotion or maintenance of the Company's market.

         3. Compensation. The Employees and Consultants agree the Shares are
valued at $2.12 each. The services rendered by the employees and consultants are
deemed to be equal in value to the Shares received hereby. Simon Boltuch,
however, will receive 20,000 options exercisable at $1.50; 20,000 options
exercisable at $2.00, in addition to the initial 20,000 Shares received for
services rendered as of the date hereof.

         4. Registration or Exemption. Notwithstanding anything to the contrary
contained herein, the Shares may not be issued unless the Shares are registered
pursuant to the Securities Act of 1933, as amended ("Act").

         5. Delivery of Shares. The Company shall deliver, subject to the terms
and conditions of this Plan, to each Employee and Consultant, as soon as
practicable, a Certificate representing the Shares. Each Employee and Consultant
agrees to be bound by the terms and conditions under the Plan by accepting
delivery of the Shares and any other terms individually agreed to in writing by
the parties.

         6. Company's Rights. The existence of the Shares and/or this Plan shall
not affect in any way the rights of the Company to conduct its business.

         7. Disclosure. Each Employee and Consultant agrees to having read and
fully considered the disclosures under Exhibit "A" attached hereto and
incorporated herein by reference.

<PAGE>

         8. Amendments. This Plan may not be amended unless by the written
consent of Board.

         9. Governing Law. This Plan shall be governed by the laws of the State
of Florida, and the sole venue for any action arising hereunder shall be Broward
County, Florida.

         10. Binding Effect. This Plan shall be binding upon and for the benefit
of the parties hereto and their respective heirs, permitted successors, assigns
and/or delegates.

         11. Captions. The captions herein are for convenience and shall not
control the interpretation of this Plan.

         12. Cooperation. The parties agree to execute such reasonable necessary
documents upon advice of legal counsel in order to carry out the intent and
purpose of this Plan as set forth hereinabove.

         13. Gender and Number. Unless the context otherwise requires,
references in this Plan in any gender shall be construed to include all other
genders, references in the singular shall be construed to include the plural,
and references in the plural shall be construed to include the singular.

         14. Severability. In the event any one or more of the provisions of
this Plan shall be deemed unenforceable by any Court of competent jurisdiction
for any reason whatsoever, this Plan shall be construed as if such unenforceable
provision had never been contained herein.

         By Order of the Board of Directors this 7TH day of JANUARY 2000.
                                                 ---        -------

                                       2
<PAGE>

                                   EXHIBIT "A"

Plan Information

A.       General Plan Information

         1. The title of the Plan is: Employee and Consultant Services Plan
("Plan") and the name of the registrant whose securities are to be offered
pursuant to the Plan is Oak Tree Medical Systems, Inc. ("Company").

         2. The general nature and purpose of the Plan is to grant Consultants a
total of 862,500 shares of the common stock of the Company as compensation for
employment and consultation services which were rendered and are to be rendered
in the future to the Company.

         3. To the best of Company's knowledge, the Plan is not subject to any
of the provisions of the Employee Retirement Income Security Act of 1974.

         4. The Company shall act as Plan Administrator. The Company's address
and telephone number are: 2797 Ocean Parkway, Brooklyn, New York 11235; (718)
769-6042. The Company, as administrator of the Plan, will merely issue to the
Employees and Consultants shares of common stock pursuant to the terms of the
Plan.

B.       Securities to be Offered. Pursuant to the terms of the Plan, 862,500
shares of the Company's common stock will be offered.

C.       Employees and Consultants Who May Participate in the Plan. Employees
and Consultants are the participants in this Plan. Employees and Consultants are
eligible to receive the securities provided the securities have been registered
or are exempt from registration under the Securities Act of 1933, as amended
(the "Act").

D.       Purchase of Securities Pursuant to the Plan. The Company shall issue
and deliver the underlying securities to Employees and Consultants as soon as
practicable.

E.       Resale Restrictions. Employees and Consultants, after receipt of the
Shares, may assign, sell, convey or otherwise transfer the securities received,
subject to the requirements of the Act.

F.       Tax Effects of Plan Participation. The Employee and Consultant Services
Plan is not qualified under Sec. 401 of the Internal Revenue Code of 1986, as
amended.

G.       Investment of Funds.  Not applicable

H.       Withdrawal from the Plan; Assignment of Interest. Withdrawal or
termination as to the Plan may occur upon mutual written consent of the parties.
Employees and Consultants have the right to assign or hypothecate their
respective interests in the Plan subject to Plan provisions.

I.       Forfeitures and Penalties.  Not applicable

                                       3
<PAGE>

J.       Charges and Deductions and Liens Therefore.  Not applicable

Registrant Information and Employee Plan Annual Information.

Registrant, upon oral or written request by Employees or Consultants, shall
provide, without charge, the documents incorporated by reference in Part II,
Item 3 of Company's Form S-8 Registration Statement for the securities as well
as any other documents required to be delivered pursuant to SEC Rule 428(b) (17
CFR Section 230.428(b)). All requests are to be directed to the Company at the
address provided in paragraph A.4. above.

                                       4

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