Document:

PURCHASE AND SALE AGREEMENT
                           (LOUISIANA GAS OPERATIONS)

                                      among

                           CITIZENS UTILITIES COMPANY,

                             LGS NATURAL GAS COMPANY

                                       and

                            ATMOS ENERGY CORPORATION

                           Dated as of April 13, 2000

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                                TABLE OF CONTENTS
<S>     <C>          <C>                                                                                       <C>

                                                                                                               Page

ARTICLE I            DEFINITIONS                                                                                  1
         Section 1.1       Certain Defined Terms..................................................................1
         Section 1.2       Other Defined Terms....................................................................9
ARTICLE II           PURCHASE AND SALE                                                                           10
         Section 2.1       Purchase and Sale of LGSN Assets......................................................10
         Section 2.2       Purchase and Sale of Division Assets..................................................10
         Section 2.3       Assumed Liabilities...................................................................10
         Section 2.4       Retained Liabilities..................................................................11
         Section 2.5       Condition on Assignment or Assumption of Contracts and Rights.........................12
ARTICLE III          PURCHASE PRICE                                                                              12
         Section 3.1       Purchase Price........................................................................12
         Section 3.2       Calculation of Purchase Price.........................................................13
         Section 3.3       Prorations and Adjustments as of the Closing Date.....................................13
ARTICLE IV           REPRESENTATIONS AND WARRANTIES OF BUYER                                                     14
         Section 4.1       Organization, Existence and Qualification.............................................14
         Section 4.2       Authority Relative to this Agreement and Binding Effect...............................15
         Section 4.3       Governmental and other Required Consents..............................................15
         Section 4.4       Availability of Funds.................................................................15
         Section 4.5       Filings...............................................................................15
         Section 4.6       Brokers...............................................................................15
         Section 4.7       Independent Investigation.............................................................16
         Section 4.8       Public Utility Holding Company Status; Regulation as a Public Utility.................16
         Section 4.9       Buyer's Financial Statements..........................................................16
ARTICLE V            REPRESENTATIONS AND WARRANTIES OF SELLERS                                                   16
         Section 5.1       Organization, Existence and Qualification.............................................16
         Section 5.2       Authority Relative to this Agreement and Binding Effect...............................17
         Section 5.3       Governmental and Other Required Consents..............................................17
         Section 5.4       Filings...............................................................................17
         Section 5.5       Title to Assets; Encumbrances.........................................................17
         Section 5.6       Financial Statements..................................................................18
         Section 5.7       Compliance with Legal Requirements; Governmental Permits;
                             Business Practices..................................................................19
         Section 5.8       Legal Proceedings; Outstanding Orders.................................................19
         Section 5.9       Taxes ................................................................................19
         Section 5.10      Intellectual Property.................................................................20
         Section 5.11      Y2K Compliance........................................................................20
         Section 5.12      Material Contracts....................................................................20
         Section 5.13      Employee Benefit Matters..............................................................21
         Section 5.14      Environmental Matters.................................................................23
         Section 5.15      Labor Matters.........................................................................24
         Section 5.16      State Regulatory Matters..............................................................25
         Section 5.17      Public Utility Holding Company Status; Regulation as a Public Utility.................25
         Section 5.18      Brokers...............................................................................25
         Section 5.19      Insurance.............................................................................25
         Section 5.20      Disclaimer............................................................................25
ARTICLE VI           COVENANTS                                                                                   26
         Section 6.1       Covenants of Sellers..................................................................26
         Section 6.2       Covenants of Buyer....................................................................29
         Section 6.3       Governmental Filings..................................................................30
         Section 6.4       Citizens Marks........................................................................31
         Section 6.5       Transition Plan.......................................................................31
         Section 6.7       Schedule of Easements and Interests...................................................32
         Section 6.8       Rhodes Security.......................................................................32
         Section 6.9       Certain Proceedings...................................................................32
         Section 6.10      Buyer's Insurance.....................................................................32
ARTICLE VII          CONDITIONS PRECEDENT                                                                        32
         Section 7.1       Sellers' Conditions Precedent to Closing..............................................32
         Section 7.2       Buyer's Conditions Precedent to Closing...............................................33
ARTICLE VIII         CLOSING                                                                                     35
         Section 8.1       Closing...............................................................................35
ARTICLE IX           TERMINATION                                                                                 36
         Section 9.1       Termination Rights....................................................................36
         Section 9.2       Limitation on Right to Terminate: Effect of Termination...............................37
ARTICLE X            EMPLOYEE MATTERS                                                                            38
         Section 10.1      Employment of Transferred Employees...................................................38
         Section 10.2      Intentionally Omitted.................................................................38
         Section 10.3      Cessation of Participation in Sellers' Plans; Bonuses.................................38
         Section 10.4      Similarity of Benefit Packages........................................................38
         Section 10.5      Defined Benefit Pension Plan..........................................................39
         Section 10.6      401(k) Plan...........................................................................39
         Section 10.7      Welfare Benefits......................................................................40
         Section 10.8      Flexible Spending Accounts............................................................41
         Section 10.9      Employment Agreements.................................................................41
         Section 10.10     Vacation/Time Off.....................................................................41
         Section 10.11     Severance.............................................................................41
         Section 10.12     Health Care Continuation Coverage.....................................................42
ARTICLE XI           TAX MATTERS                                                                                 42
         Section 11.1      Purchase Price allocation.............................................................42
         Section 11.2      Cooperation with Respect to Like-Kind Exchange........................................43
         Section 11.3      Transaction Taxes.....................................................................43
         Section 11.4      Clearance Certificates................................................................44
ARTICLE XII          ENVIRONMENTAL MATTERS                                                                       44
         Section 12.1      Environmental Due Diligence...........................................................44
ARTICLE XIII         INDEMNIFICATION                                                                             46
         Section 13.1      Indemnification by Sellers............................................................46
         Section 13.2      Indemnification by Buyer..............................................................46
         Section 13.3      Limitations on Liability..............................................................47
         Section 13.4      Claims Procedure......................................................................50
         Section 13.5      Exclusive Remedy......................................................................52
         Section 13.6      Indemnification for Negligence........................................................52
ARTICLE XIV          GENERAL PROVISIONS                                                                          52
         Section 14.1      Expenses..............................................................................52
         Section 14.2      Notices...............................................................................52
         Section 14.3      Assignment............................................................................54
         Section 14.4      Successor Bound.......................................................................54
         Section 14.5      Governing Law.........................................................................54
         Section 14.6      Dispute Resolution....................................................................55
         Section 14.7      Cooperation...........................................................................56
         Section 14.8      Construction of Agreement.............................................................56
         Section 14.9      Publicity.............................................................................57
         Section 14.10     Waiver................................................................................57
         Section 14.11     Parties in Interest...................................................................57
         Section 14.12     Section and Paragraph Headings........................................................57
         Section 14.13     Amendment.............................................................................57
         Section 14.14     Entire Agreement......................................................................57
         Section 14.15     Counterparts..........................................................................57
         Section 14.16     Severability..........................................................................57

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                                    LIST OF EXHIBITS
<S>                             <C>

Exhibit 6.7                         Form of Substitute Agreement
Exhibit 7.1(g)                      Form of Buyer's Opinion of Counsel
Exhibit 7.2(g)                      Form of Sellers' Opinion of Counsel

                                    LIST OF SCHEDULES

Schedule 1.1(a)                     Certain Assets
Schedule 1.1(b)                     Certain Excluded Assets
Schedule 4.3                        Buyer's Governmental Approvals
Schedule 5.2                        Sellers' Authority
Schedule 5.3                        Sellers' Governmental and Other Required Consents
Schedule 5.5                        Encumbrances; Owned Real Property
Schedule 5.6(a)                     Financial Statements
Schedule 5.6(b)                     Certain Liabilities
Schedule 5.6(c)                     Certain Changes
Schedule 5.7                        Compliance with Legal Requirements; Governmental Permits
Schedule 5.8                        Legal Proceedings; Outstanding Orders
Schedule 5.9                        Taxes
Schedule 5.10                       Intellectual Property
Schedule 5.12                       Material Contracts
Schedule 5.13                       Employee Matters
Schedule 5.14                       Environmental Matters
Schedule 5.15                       Labor Matters
Schedule 5.16                       State Regulatory Matters
Schedule 5.19                       Sellers' Insurance
Schedule 6.1                        Conduct of Business Prior to Closing Date
Schedule 6.2(c)                     Citizens' Guarantees and Surety Instruments
Schedule 10.7                       Retirees and "Grandfathered Employees"
Schedule 10.11                      Severance Benefits

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                           PURCHASE AND SALE AGREEMENT
                           (LOUISIANA GAS OPERATIONS)

         This PURCHASE AND SALE AGREEMENT  (this  "Agreement") is made as of the
13th day of April,  2000, by and among CITIZENS  UTILITIES  COMPANY,  a Delaware
corporation  ("Citizens"),  LGS NATURAL  GAS  COMPANY,  a Louisiana  corporation
("LGSN" and, together with Citizens, "Sellers"), and ATMOS ENERGY CORPORATION, a
Texas and Virginia  corporation  ("Buyer").  Capitalized terms used herein shall
have the meanings ascribed to them in Article I, unless otherwise provided.

                              W I T N E S S E T H :

         WHEREAS, Citizens own all of the Division Assets and LGSN  owns all  of
the LGSN Assets; and

         WHEREAS,  Buyer desires to purchase,  and Sellers  desire to sell,  the
Division  Assets and the LGSN Assets,  subject in all respects to the provisions
of this Agreement.

         NOW,  THEREFORE,  in  consideration  of the premises and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 Certain Defined Terms. For purposes of this Agreement,  the
following  terms have the  meanings  specified  or referred to in this Article I
(such definitions to be equally applicable to both the singular and plural forms
of the terms defined):

         "Affiliates"  or  "Affiliated  Entities"  --  entities  shall be deemed
"Affiliated" as to each other to the extent (i) one of the entities  directly or
indirectly  controls the other, or the direct or indirect  control of one of the
entities is exercised by the officers,  directors,  stockholders, or partners of
the other  entity  (whether or not such persons  exercise  such control in their
capacities as officers, directors,  stockholders, or partners) or (ii) is deemed
to be an Affiliate under existing statutes or regulations of the SEC.

         "Assets" -- means, collectively,  all of the Division Assets and all of
the LGSN Assets,  including the following  (except to the extent  included among
the Excluded Assets):

                  (a)  the Real  Property described  in  Schedule  5.5,  and all
buildings,  structures and other improvements,  fixtures and fittings located on
such Real Property,  and all Easements,  appurtenances and other interests owned
or held by a Seller and necessary for or relating to the Business (including all
gas pipes and  pipelines,  and all  facilities  used for storing and  delivering
natural gas or propane);

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                  (b)  all  inventories of natural gas, propane and other fuels,
and all  supplies,  materials  and  critical  spares held by a Seller for use in
connection  with the  Business  and located on, in storage for, or in transit to
the Real Property on the Closing Date;

                  (c)  all machinery,  equipment, tools, vehicles, furniture and
other tangible personal property used in connection with the Business, including
the items of  tangible  personal  property  listed on Schedule  1.1(a);  and all
warranties,  guarantees,  and service and replacement programs of manufacturers,
service providers or other vendors relating thereto,  in each case to the extent
that the same are transferable;

                  (d)  all Contracts relating to the Business;

                  (e)  the franchises, ordinances or  similar agreements  listed
on Schedule 1.1(a) with respect to Citizens' authority to distribute natural gas
and all other licenses, permits and authorizations held by a Seller and relating
to the Business, in each case to the extent the same are assignable;

                  (f)  originals  or copies  of all  records,  books,  operating
records,  operating,  safety and maintenance manuals,  engineering design plans,
blueprints and as-built plans,  specifications,  procedures and similar items of
Citizens  or LGSN  relating  to the  Assets,  including  all  books of  account,
customer lists,  billing records and other customer  correspondence  relating to
the Business,  records relating to the Transferred Employees (to the extent such
transfer is not prohibited by any Legal Requirement), all regulatory filings and
all other  books and  records  relating  to the rates and  services  provided by
Citizens or LGSN in connection with the operation of the Business;

                  (g) all rights or choses in action  arising out of occurrences
before or after the Closing Date and related to any of the Assets, including all
related  claims,  credits,  rights of recovery  and  set-off  and other  similar
contractual  rights  (other  than  with  respect  to  rights  to  insurance  and
condemnation  proceeds  described in clause (h)), as to third parties held by or
in favor of a Seller;  provided,  however,  that  notwithstanding  the foregoing
provisions  of this clause (g), to the extent that a Seller pays or discharges a
liability  related to the  Business or any of the Assets that is related to such
right or chose in  action  (whether  by  reason of  indemnification  under  this
Agreement  or  otherwise),  Buyer will  reassign or reconvey to such Seller such
right or chose in  action  to the  extent  that  such  right or chose in  action
relates to a recovery of amounts paid to Buyer;

                  (h)  all  rights  to  insurance  and   condemnation   proceeds
outstanding  on  the  Closing  Date  to  the  extent  relating  to  the  damage,
destruction, taking or other impairment of the Assets which damage, destruction,
taking or other  impairment  occurs on or prior to the Closing,  but only to the
extent of any proceeds remaining after any repair or replacement of the affected
Assets; and

                  (i)  all accounts  receivable  (including rights to earned but
unbilled revenue) and prepayments,  in each case attributable exclusively to the
Business and accrued or outstanding on the Closing Date.

                                       2
<PAGE>

         "Business" -- means collectively:

                  (a)  the regulated natural gas distribution business conducted
by  Citizens within the  State of Louisiana  through  its  Louisiana Gas Service
division;

                  (b)  the nonregulated  natural gas  transportation  and  sales
business  conducted by Citizens  within the  State of Louisiana  through its LGS
Intrastate Company division;

                  (c)  the nonregulated natural gas supply,  storage and  trans-
mission  activities conducted by LGSN within the State of Louisiana; and

                  (d) the  provision  of related  services  and products and the
engagement in related activities by Citizens,  through its Louisiana Gas Service
division and its LGS  Intrastate  Company  division,  and by LGSN,  in each case
within the State of Louisiana.

         "Claim  Notice" -- means a written  notice of a claim  given by a party
seeking  indemnification  pursuant to the terms of this Agreement that specifies
in reasonable  detail the nature of the Losses and the estimated  amount of such
Losses.

         "Confidentiality  Agreement"  -- means  the  confidentiality  agreement
dated October 20, 1999, between Buyer and Citizens.

         "Consent" -- any  approval,  consent,  ratification,  waiver,  or other
authorization from any Person.

         "Contract"   --  any   agreement,   contract,   document,   instrument,
obligation,  promise or  undertaking  (whether  written or oral) that is legally
binding, including Easements.

         "Division Assets" -- all of the assets, property and interests of every
type and  description,  real,  personal or mixed,  tangible and  intangible,  of
Citizens  and  relating  primarily  to the  Business  as engaged in by  Citizens
through the  Louisiana  Gas Service (also known as LGS Gas) division of Citizens
or the LGS  Intrastate  Company  division of  Citizens,  other than the Excluded
Assets.

         "Easements"-- means all easements,  servitudes, rights of way, permits,
licenses, and other ways of necessity, whether or not of record.

         "Encumbrance" -- any charge,  adverse claim,  lien,  mortgage,  pledge,
security interest,  imperfection in title, limitation,  Easement, restriction or
other encumbrance of any kind.

         "Environmental Law"-- any Order or Legal Requirement,  and any judicial
and administrative  interpretation thereof and related policies,  guidelines and
standards,  relating to pollution or protection of the  environment  and natural
resources,  including those relating to (a) emissions,  discharges,  Releases or
threatened  Releases  of  Hazardous  Material  into the  environment  (including
ambient air,  surface  water,  groundwater  or land),  and (b) the  manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling  of  Hazardous  Material,   each  as  in  effect  as  of  the  date  of
determination.

                                       3
<PAGE>

         "Environmental  Liability" -- means any  liability,  responsibility  or
obligation arising out of or relating to:

                  (a)  the presence of any  Hazardous  Material in the fixtures,
structures,  soils,  groundwater,  surface  water  or air on,  under or about or
emanating from the assets and properties  currently or formerly used,  operated,
owned, leased,  controlled,  possessed,  occupied or maintained by a Person, and
any such Hazardous Material emanating to adjoining or other properties;

                  (b)  the use, generation, production,  manufacture, treatment,
storage,  disposal,  Release,  threatened Release,  discharge,  spillage,  loss,
seepage or  filtration  of  Hazardous  Materials  by a Person or its  employees,
agents  or  contractors  from,  on,  under or about  the  assets  or  properties
currently or formerly used,  operated,  owned,  leased,  controlled,  possessed,
occupied or maintained  by such Person or the presence  therein or thereunder of
any  underground  or  above-ground  tanks for the storage of fuel oil,  gasoline
and/or other petroleum products or by-products or other Hazardous Material;

                  (c)  the  violation or  noncompliance or alleged  violation or
noncompliance  by a  Person  or its  employees,  agents  or  contractors  of any
Environmental  Law arising from or related to its or their  conduct,  actions or
operations  or  the  former  or  current  use,  operation,   ownership,   lease,
possession, control, occupancy, maintenance or condition of any of such Person's
former or current assets or properties;

                  (d)  the  failure  by a Person  or its employees,  agents,  or
contractors to have obtained or maintained in effect any certificate,  permit or
authorization  required  by any  Environmental  Law as a result  of its or their
conduct, actions or operations or the use, operation, ownership, lease, control,
possession,  occupancy,  maintenance  or  condition of such  Person's  assets or
properties;

                  (e)  any  and  all  Proceedings  arising  out  of  any  of the
above-described  matters,  including  Proceedings  by  Governmental  Bodies  for
enforcement, cleanup, removal, treatment, response, remedial or other actions or
damages and  Proceedings  by any third  Person  seeking  damages,  contribution,
indemnification, cost recovery, compensation or injunctive relief; and

                  (f)  any and all  remedial  work and  other corrective  action
(including  investigation  or  monitoring of site  conditions,  or any clean-up,
containment, restoration or removal) taken by, or the costs of which are imposed
upon, a Person arising from any of the above-described matters.

         "ERISA" - the  Employee  Retirement  Income  Security  Act of 1974,  as
amended, or any successor law, and regulations and rules issued pursuant to that
act or any successor law.

         "ERISA  Affiliate" -- any corporation or trade or business  (whether or
not  incorporated)  which  is, as of the date of this  Agreement  or at any time
within  the six years  preceding  the date  hereof  would be treated as a single
employer under IRC Section 414.

         "Excluded  Assets" -- means the  following  assets of Citizens or LGSN,
each of which shall be excluded from the Assets,  and not acquired by Buyer,  at
Closing:

                                       4
<PAGE>

                  (a)  assets  that  Citizens  uses in both the  Business and in
Citizens'  other gas,  electric,  communications  or water  businesses  that are
described  generally in Schedule 1.1(b), and Contracts regarding the procurement
of services or goods by Citizens for use in such other businesses;

                  (b)  cash and cash equivalents in transit, in hand  or in bank
accounts;

                  (c)  except as otherwise set forth  in  Article X,  assets at-
tributable  to or  related  to a Benefit  Plan of Citizens;

                  (d)  the stock  record and minute  books of Citizens and LGSN,
all records prepared in connection with the sale of the Business (including bids
received  from  third  parties  and  analysis  relating  to the  Business),  and
duplicate copies of all books and records transferred to Buyer;

                  (e)  assets disposed of  by Citizens or LGSN after the date of
this  Agreement  to  the extent  such  dispositions are  not prohibited by  this
Agreement;

                  (f)  except to the extent set forth in Section  3.3, rights to
refunds of Taxes  payable with respect to the  Business,  assets,  properties or
operations  of  Citizens,  LGSN or any member of any  affiliated  group of which
either of them is a member;

                  (g)  accounts  owing,  by  and  among Citizens, LGSN and their
Affiliates;

                  (h)  all deferred Tax assets;

                  (i)  any  insurance  policy,  bond,  letter of credit or other
similar item,  any cash  surrender  value in regard  thereto,  and all rights to
insurance or  condemnation  proceeds except to the extent provided in clause (h)
in the definition of Assets set forth in Section 1.1;

                  (j)  the Citizens Marks;

                  (k)  the capital stock of LGSN; and

                  (l)  the other assets listed on Schedule 1.1(b).

         "Final Order" -- an action by a Governmental  Body as to which:  (a) no
request for stay of the action is pending,  no such stay is in effect and if any
time period is  permitted  by statute or  regulation  for filing any request for
such  stay,  such  time  period  has  passed;  (b) no  petition  for  rehearing,
reconsideration  or application for review of the action is pending and the time
for filing any such petition or application  has passed;  (c) such  Governmental
Body does not have the action  under  reconsideration  on its own motion and the
time in which such reconsideration is permitted has passed; and (d) no appeal to
a court, or a request for stay by a court of the  Governmental  Body's action is
pending or in effect and the  deadline for filing any such appeal or request has
passed.

         "GAAP" --  generally  accepted  United  States  accounting  principles,
applied on a consistent basis.

                                       5
<PAGE>

         "General  Order" - means  any Order  applicable  generally  to  Persons
engaged in a business similar to the Business.

         "General Proceeding" - means any Proceeding that is reasonably expected
to result only in a General Order.

         "Governmental  Body" -- any of the following that  possesses  competent
jurisdiction:

                  (a)  foreign, federal, state, county, parish, local, municipal
or other governmental body;

                  (b)  governmental  or   quasi-governmental  authority  of  any
nature  (including any governmental agency,  branch, department, official or en-
tity and any court or other tribunal); or

                  (c)  any   governmental   body   entitled  to   exercise   any
administrative,  executive,  judicial,  legislative,  police,  regulatory or Tax
authority or power of any nature.

         "Hazardous  Materials"  -- any  waste or other  chemical,  material  or
substance that is listed,  defined,  designated,  or classified as, or otherwise
determined  to  be,  hazardous,   radioactive,   toxic,  or  a  pollutant  or  a
contaminant,  or words of similar import, under or pursuant to any Environmental
Law,  including any admixture or solution  thereof,  and specifically  including
oil, natural gas, petroleum and all derivatives thereof or synthetic substitutes
therefor, asbestos or asbestos-containing materials, any flammable substances or
explosives,  any  radioactive  materials,  any toxic wastes of substances,  urea
formaldehyde foam insulation, toluene or polychlorinated biphenyls.

         "HSR Act" -- the Hart-Scott-Rodino  Antitrust Improvements Act of 1976,
as amended,  or any successor law, and  regulations and rules issued by the U.S.
Department  of Justice or the Federal Trade  Commission  pursuant to that act or
any successor law.

         "IRC" - the Internal Revenue Code of 1986, as amended.

         "IRS" -- the Internal Revenue Service or any successor agency.

         "Knowledge" -- means, (i) with respect to Sellers, the actual knowledge
of Citizens' Chief Financial Officer;  President,  Citizens Public Services;  or
the Vice  President  and General  Manager of Louisiana  Gas  Services,  or their
respective   successor,   after  reasonable   investigation   required  for  the
transactions  contemplated  hereby,  and (ii) with respect to Buyer,  the actual
knowledge  of Buyer's  Chief  Financial  Officer;  Executive  Vice  President of
Utility  Operations;  or Vice  President  and  Treasurer,  or  their  respective
successor,   after  reasonable   investigation  required  for  the  transactions
contemplated  hereby;  provided  that no party  shall be  required to perform an
environmental assessment for purposes of this definition.

         "Legal  Requirement"  -- any federal,  state,  county,  parish,  local,
municipal, foreign, international, multinational, or other administrative Order,
constitution, law, ordinance, adopted code, principle of common law, regulation,
rule,  directive,  approval,  notice,  tariff,  franchise agreement,  statute or
treaty.

                                       6
<PAGE>

         "LGSN  Assets" -- means all of the assets,  property  and  interests of
every type and description, real, personal or mixed, tangible and intangible, of
LGSN, other than the Excluded Assets.

         "Losses" -- shall mean all claims, losses, liabilities, damages, causes
of action,  costs and expenses  (including,  involving theories of negligence or
strict  liability and including  court costs and reasonable  attorneys' fees and
disbursements in connection  therewith),  whether or not involving a third party
claim.

         "LPSC" - shall mean the Louisiana Public Service Commission.

         "Material  Adverse  Effect" -- an  occurrence  or condition  that has a
material  adverse  effect  on the  Business,  the  Assets,  or the  liabilities,
operations,  financial  condition or results of operations  of the Business.  In
each  instance,  whether an  occurrence  has a material  adverse  effect will be
determined after taking into account the totality of the facts and circumstances
relating to such occurrence or condition, or to its effect, including mitigating
factors  such as  insurance,  rate or other  regulatory  relief and third  party
contribution  obligations.  For purposes of this  Agreement,  an  occurrence  or
condition  will not  constitute  a  Material  Adverse  Effect if it arises  from
general  business,  economic,  or financial market  conditions;  from conditions
generally  affecting the industries in which the Business competes;  or from the
transactions contemplated by this Agreement.

         "Material  Contract" -- a Contract  relating  primarily to the Business
and involving a total commitment by or to any party thereto of at least $100,000
on an annual  basis and which  cannot be  terminated  by  Citizens  or LGSN with
notice of ninety (90) days or less without penalty to Citizens or LGSN.

         "Order" -- any award, decision, injunction,  judgment, order (including
any rule-making  order),  writ, decree,  ruling,  subpoena,  or verdict entered,
issued,   made,  or  rendered  by  any  court,   administrative   agency,  other
Governmental  Body,  or by any  arbitrator,  each of which  possesses  competent
jurisdiction.

         "Organizational   Documents"   --  the  articles  or   certificate   of
incorporation  and the bylaws of a corporation or the comparable  organizational
and governing documents of other Persons.

         "Permitted Encumbrances" -- means any of the following:

                  (a)  mechanics',  carriers',  workers' and other similar liens
arising in the ordinary  course of business and which in the  aggregate  are not
substantial in amount and do not interfere with the present use of the Assets to
which they apply;

                  (b)  liens for current Taxes  and assessments not yet  due and
payable;

                  (c)  with  respect  to any  parcel of owned  Real  Property or
Easements,  all nonmonetary  Encumbrances (whether or not the same are recorded)
that do not and will not materially interfere with the operation of that portion
of the  Business  currently  conducted  on such real  property  or result in any

                                       7
<PAGE>

absence,  loss  or  reversion  of,  or  inability  to  transfer,  title  or  any
termination of the right of use with respect thereto;

                  (d)  all  applicable  zoning ordinances  and land use restric-
tions;

                  (e)  with respect to any Asset  which consists of a  leasehold
or other  possessory  interest  in  real  property, all Encumbrances, covenants,
imperfections in title, Easements, restrictions and other title matters (whether
or not the same are  recorded) to which the  underlying  fee estate in such real
property  is  subject  that  do not  currently  interfere  materially  with  the
operation of that portion of the Business currently  conducted on such property;
and

                  (f)  any other Encumbrances affecting the Assets that are dis-
closed in Schedule 5.5.

         "Person"  --  any  individual,  corporation  (including  any  nonprofit
corporation),  general or limited partnership,  limited liability company, joint
venture, estate, trust, association, organization or Governmental Body.

         "Proceeding"  --  any  claim,  action,  arbitration,  hearing,  noticed
investigation,   litigation,  suit  or  other  proceeding  commenced,   brought,
conducted, or heard by or before, or otherwise involving,  any Governmental Body
or arbitrator.

         "PUHCA" - the Public Utility  Holding  Company Act of 1935, as amended,
or any successor  law, and  regulations  and rules issued by the SEC pursuant to
that act or any successor law.

         "Real  Property"  -- all real  property  owned or leased by Citizens or
LGSN in the  operation  of the  Business,  together  with all  interests in real
property  (including  Easements) used or held for use by Citizens or LGSN in the
operation of the Business.

         "Related  Documents" -- any Contract  provided for in this Agreement to
be entered  into by one or more of the  parties  hereto in  connection  with the
transactions contemplated by this Agreement.

         "Release" -- any presence,  emission,  dispersal,  disposal,  spilling,
leaking,  emitting,   discharging,   depositing,   pumping,  pouring,  escaping,
leaching, dumping, releasing or migration into the indoor or outdoor environment
(including  the  abandonment  or disposal of any  barrels,  containers  or other
closed receptacles containing any Hazardous Materials),  or in, into or from any
facility,  including  the movement of any Hazardous  Materials  through the air,
soil, surface water, groundwater or property.

         "Representative"  -- with respect to a particular Person, any director,
officer,  employee, agent, consultant,  advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.

         "Rhodes  Investigation" - means the Proceeding of the LPSC  relating to
LPSC Docket No. U-23812,  In Re: An investigation  into the allegation filed  by
the plaintiffs against the defendants in case No. 532-058 in the 24th JDC.

                                       8
<PAGE>

         "Rhodes  Lawsuit" -- means the Proceeding  styled "The Rhodes  Company,
Inc. et al. v. Citizens  Utilities  Company,  et al., Case No.  532-058",  filed
in the 24th JDC, Jefferson Parish, Louisiana, and any additional claims  made or
brought  by any  other claimant or  class of  claimants that  alleges claims  in
respect of the conduct that is the subject  matter of such  Proceeding,  whether
in the periods covered by such Proceeding or in other periods.

         "Rhodes Proceedings" -- means the Rhodes Lawsuit  and the Rhodes Inves-
tigation.

         "SEC" -- the United States  Securities  and Exchange  Commission or any
successor agency.

         "Tax" -- any federal, state, local or foreign tax (including any income
tax,  capital gains tax,  value-added  tax,  sales and use tax,  franchise  tax,
payroll tax,  withholding  tax or property  tax, ad valorem tax,  transfer  tax,
profits tax, license tax, lease tax, service or use tax,  employment tax, excise
tax, severance tax, stamp tax, occupation tax, windfall profits tax, utility tax
or gross receipts tax), levy,  assessment,  tariff,  duty (including any customs
duty), deficiency, franchise fee or payment, any liability in respect of any tax
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar  group,  or other fee or payment,  and any  related  charge or amount
(including any fine, penalty, interest or addition to tax), imposed, assessed or
collected by or under the authority of any Governmental Body.

         "Tax Return" -- any return (including any information return),  report,
statement,  schedule,  notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any  Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.

         "Threatened"  -- a claim,  dispute,  or other  matter will be deemed to
have been  "Threatened"  if any demand or statement has been made, or any notice
has been given, and either Seller has Knowledge of the same.

         Section 1.2 Other  Defined  Terms.  In addition to the terms defined in
Section 1.1,  certain  other terms are defined  elsewhere  in this  Agreement as
indicated below and, whenever such terms are used in this Agreement,  they shall
have their respective defined meanings.

         Term                                            Section
         ----                                            -------
Act                                                      4.10
Active Employees                                         10.1
Antitrust Authorities                                    6.3(a)
Assumed Liabilities                                      2.3
Balance Sheet                                            5.6(a)
Buyer Indemnitees                                        13.1
Buyer's Pension Plan                                     10.5(b)
Buyer Welfare Plans                                      10.7(a)
CERCLA                                                   5.14(e)
Citizens                                                 Preamble
Citizens Marks                                           6.4

                                       9
<PAGE>

Citizens' Pension Plan                                   10.5
Closing                                                  8.1
Closing Date                                             8.1
Employee Plans                                           5.13(a)
Environmental Data                                       12.1(c)
Estimated Purchase Price                                 3.3(a)
Financial Statements                                     5.6(a)
LGSN                                                     Preamble
Purchase Price                                           3.1
Retained Liabilities                                     2.4
Sellers Indemnitees                                      13.2
Sellers' 401(k) Plan                                     10.6(a)
Sellers Welfare Plan                                     10.7(a)
Sellers                                                  Preamble
Transaction Taxes                                        11.3
Transferred Employee                                     10.1

                                   ARTICLE II
                                PURCHASE AND SALE

         Section  2.1  Purchase  and Sale of LGSN  Assets.  Upon the  terms  and
subject to the conditions  contained  herein,  at the Closing,  LGSN shall sell,
transfer,  and deliver to Buyer,  and Buyer shall  purchase and accept  delivery
from LGSN, all of the LGSN Assets free and clear of all Encumbrances  other than
Permitted Encumbrances.

         Section 2.2  Purchase and Sale of Division  Assets.  Upon the terms and
subject to the conditions contained herein, at the Closing, Citizens shall sell,
transfer,  assign,  convey and deliver to Buyer,  and Buyer shall  purchase  and
accept delivery from Citizens,  all of the Division Assets free and clear of all
Encumbrances other than Permitted Encumbrances.

         Section 2.3 Assumed Liabilities.  In further consideration for the sale
of the Division  Assets and the LGSN Assets,  at the Closing,  Buyer will assume
and  agree  to  pay,  perform  and  discharge  when  due,  all  liabilities  and
obligations relating to or arising from the following:

                  (a)  Performance of (i) the Contracts listed on Schedule 5.12,
(ii) the  Contracts  that have been entered  into in the ordinary  course of the
Business  that are not  required  to be listed on  Schedule  5.12 by the express
terms of Section 5.12 or other  Contracts  inadvertently  omitted from  Schedule
5.12 entered into in the ordinary  course of the business to the extent that the
performance  of such contract is reflected in the financial  performance  of the
Business as of the date hereof, (iii) the Contracts that are entered into in the
ordinary  course of the Business  after the date hereof in accordance  with this
Agreement and (iv) franchises, licenses, permits, authorizations, ordinances and
similar  agreements  listed on Schedule 1.1(a) or held in the ordinary course of
the Business to the extent  included  among the Assets  (except that Buyer shall
not assume any liabilities or obligations  for any breach,  default or violation
by, or  payment  obligations  of,  Citizens  or LGSN  under  any such  Contract,
franchise,  license, permit, ordinance or similar agreement occurring or arising
or accruing on or prior to the Closing Date);

                                       10
<PAGE>

                  (b)  Customer advances,  customer  deposits  and  construction
advances,   unperformed  customer  service   obligations,   Easement  relocation
obligations, and continuation of construction work in progress and other capital
expenditure  projects,  in each case  relating to the  Business,  arising in the
ordinary course of business consistent with past practices and outstanding on or
arising  after  the  Closing  Date  (except  that  Buyer  shall not  assume  any
liabilities  or  obligations  for any breach or default by Citizens or LGSN with
respect to any such matters);

                  (c)  Items  addressed in  Section 3.1(a) or (b) to  the extent
resulting in a decrease in the Purchase Price; and

                  (d)  All accounts payable of Sellers relating to the Business,
other than payable to a Seller or any of its  Affiliates,  and outstanding as of
the Closing Date.

The  liabilities,  responsibilities  and  obligations  to be  assumed  by  Buyer
pursuant to this  Section 2.3 are  hereinafter  collectively  referred to as the
"Assumed  Liabilities."  Notwithstanding  anything  in this  Section  2.3 to the
contrary,   "Assumed   Liabilities"   shall   not   include   any   liabilities,
responsibilities  or  obligations  expressly  stated to be Retained  Liabilities
pursuant to Section 2.4.

         Section  2.4  Retained  Liabilities.  Buyer shall not assume and at the
Closing Sellers shall retain,  be responsible for and pay, perform and discharge
when due, all of the liabilities and obligations relating to or arising from the
following (collectively referred to herein as the "Retained Liabilities"):

                  (a)  any indebtedness  for money  borrowed by Citizens or LGSN
(including  items  due  to a  Seller  or  its  Affiliates)  other  than  payment
obligations  arising after the Closing Date (i) under any equipment lease listed
in Part VIII of  Schedule  5.12,  (ii)  under any line  extension  Contracts  or
similar  construction  arrangements and (iii) in respect of customer deposits or
advances, it being understood and agreed that such leases, Contracts,  deposits,
advances and similar arrangements do not create indebtedness for money borrowed;

                  (b)  Taxes of Citizens or LGSN or any of their Affiliates;

                  (c)  Excluded Assets;

                  (d)  Non-Transferred  Employees,  the  Employee  Plans and the
Employee  Agreements  (except in each case to the extent  otherwise  provided in
Article X) and any breach or default  by, or  obligations  of,  Citizens or LGSN
with respect to any Transferred  Employee  occurring,  arising or accruing on or
prior to the Closing Date or occurring,  arising or accruing with respect to any
event which  occurred on or prior to the Closing  Date (except to the extent any
such obligation becomes the obligation of Buyer in accordance with Article X);

                  (e) the  Proceedings  listed  on  Schedule  5.8 and all  other
Proceedings,  other than General  Proceedings,  involving  Citizens or LGSN, the
Assets  or  the  Business  based  on  conduct  (including  Citizens'  or  LGSN's
performance  under any  Contract  included  among the  Assets),  action,  facts,
circumstances  or  conditions  existing,  arising or  occurring on or before the
Closing Date;

                                       11
<PAGE>

                  (f)  Environmental  Liabilities  with  respect to any  action,
fact, circumstance or condition to the extent existing,  arising or occurring on
or  before  the  Closing  Date  other  than with  respect  to the  existence  of
non-friable asbestos and  asbestos-containing  materials (to the extent the same
do not violate existing  Environmental  Law) and any post-Closing  activity that
disturbs asbestos or asbestos-containing materials;

                  (g)  any  obligation or  liability owing  to either  Seller or
any of their Affiliates; and

                  (h)  all other liabilities  or  obligations,  whether known or
unknown, accrued or contingent,  of Citizens or LGSN relating to or arising from
the  ownership or use of the Assets or the  operation or conduct of the Business
by Citizens or LGSN (or their predecessors in interest) on or before the Closing
Date that is not an Assumed  Liability  or that  becomes the  responsibility  of
Buyer as provided in Article X.

         Section 2.5  Condition on  Assignment  or  Assumption  of Contracts and
Rights.  Any  transfer  or  assignment  to Buyer by a Seller of any  property or
property  rights or any Contract  which  requires the Consent of any third party
shall be made subject to such  Consent  being  obtained.  If such Consent is not
obtained,  or if an attempted  assignment  thereof would be ineffective or would
affect the rights of a Seller thereunder so that Buyer would not in fact receive
all such  rights,  such  Seller  will  cooperate  with Buyer in any  arrangement
reasonably  designed  to  provide  for  Buyer,  at  Buyer's  cost (to the extent
commercially  reasonable),  the  benefits  under  any such  Contract  including,
enforcement  for the  benefit  of Buyer  of any and all  rights  of such  Seller
against a third party thereto  arising out of the breach or cancellation by such
third party or otherwise.  To the extent that Buyer does receive the benefits of
any such Contract pursuant to the preceding  sentence,  such Contract shall be a
Contract  deemed to have been  assigned  or  transferred  to Buyer  pursuant  to
Section 2.3. Notwithstanding the foregoing, the provision under this Section 2.5
of benefits of any  Contract  identified  with an asterisk on Schedule 5.3 shall
not  satisfy  the  condition  required  by Section  7.2 (d) for the receipt of a
Consent  with respect  thereto,  unless such  condition  is expressly  waived by
Buyer.

                                   ARTICLE III
                                 PURCHASE PRICE

         Section 3.1       Purchase Price.

         Subject to the terms and  conditions of this  Agreement,  the aggregate
purchase  price for the LGSN  Assets  and the  Division  Assets  (the  "Purchase
Price") shall be an amount equal to $375,000,000 in cash  (representing  the sum
of the purchase price for the LGSN Assets of $19,237,500  and the purchase price
for the Division  Assets of  $355,762,500),  as adjusted in accordance  with the
provisions of this Section 3.1 and with such adjustments  determined pursuant to
Section 3.2.

                  (a)  Such amount will be decreased by the aggregate  amount of
all capitalized  lease obligations under the equipment lease listed as item 2 in
Part VIII of Schedule 5.12 or any other capitalized lease.

                  (b)  Such  amount  will  be   decreased   or   increased,   as
appropriate,  by an aggregate  amount equal to the total amount payable to or by
Buyer pursuant to Section 3.3.

                                       12
<PAGE>

         Section 3.2       Calculation of Purchase Price.

                  (a)  The portion of the Purchase Price  apportioned to the
LGSN Assets  shall be adjusted as provided in clauses (a) and (b) of Section 3.1
to the extent such  adjustments  relate to LGSN, and the portion of the Purchase
Price  apportioned  to the  Division  Assets  shall be  adjusted  as provided in
clauses (a) and (b) of Section 3.1 to the extent such adjustments  relate to the
portion of the Business  conducted  with the Division  Assets.  Any of the items
included in clauses (a) and (b) of Section  3.1 that cannot be  calculated  in a
timely  fashion as of the  Closing  Date shall be  estimated  by Sellers in good
faith  based upon the  account  balance of such item at the end of the month for
which  Sellers'  books are closed next  preceding  the Closing  Date,  with such
adjustments  as may be appropriate  to reflect  changes in such account  balance
occurring  between  such  month-end  and the Closing  Date.  Any such  estimated
amounts  shall be set forth in a  certificate  of Sellers  delivered to Buyer at
least five (5) business days prior to the Closing Date, which  certificate shall
set forth an estimate of the Purchase Price (the  "Estimated  Purchase  Price"),
including such estimated amounts and shall be accompanied by reasonably detailed
supporting documentation.

                  (b)  Within one  hundred  twenty (120) days after the  Closing
Date,  Sellers  shall notify Buyer of the actual  amount as recorded on Sellers'
books and records for the Business of any items that were  estimated in arriving
at the Estimated  Purchase  Price,  as well as the  prorations  and  adjustments
required  to be made  under  Section  3.3.  Buyer  may  dispute  any  amount  so
determined by Sellers,  by written notice to Sellers within forty-five (45) days
after  receipt of Sellers'  notice.  If Buyer does not so dispute any item,  the
party owing the difference between the Estimated Purchase Price and the Purchase
Price shall pay such  difference  to the other party  within ten (10) days after
the expiration of such  forty-five  (45) day period,  plus interest at 8.25% per
annum on such amount from the Closing  Date to (but not  including)  the date of
payment.  If Buyer disputes the actual amount of any item, the undisputed amount
plus  interest at 8.25% per annum on such  amount from the Closing  Date to (but
not including) the date of payment shall be paid promptly by the owing party. If
such  dispute  cannot be  resolved  within  sixty  (60) days after the giving of
Buyer's notice that there exists a disputed amount, then a nationally recognized
independent accounting firm mutually agreeable to Buyer and Citizens shall, upon
written notice from either Buyer or Citizens,  resolve such dispute within sixty
(60)  days  after  receipt  of  such  notice.  The  fees  and  expenses  of such
independent accounting firm shall be allocated between Buyer and Sellers so that
Sellers'  share of such fees and expenses shall be in the same  proportion  that
the aggregate amount of such remaining disputed amounts so submitted by Buyer to
such  accounting  firm that is  unsuccessfully  disputed  by Buyer  (as  finally
determined by such accounting  firm) bears to the total amount of such remaining
disputed   amounts  so  submitted  by  Buyer  to  such   accounting   firm.  Any
determination  by  such  independent   accounting  firm  shall  be  binding  and
conclusive upon the parties without  further appeal  therefrom.  Within ten (10)
days after the independent accounting firm shall have resolved such dispute, the
party owing the determined  amount shall pay such determined amount to the other
party,  plus  interest  at 8.25% per annum on such  determined  amount  from the
Closing Date to (but not including) the date of payment.

         Section 3.3       Prorations and Adjustments as of the Closing Date.

                  (a)  Buyer and Sellers agree that the following items relating
to the Assets and the Business shall be adjusted and allocated as of the Closing
Date,  with Sellers to be responsible for and to receive the benefit of the same

                                       13
<PAGE>

for  the  period  through  and  including  the  Closing  Date  and  Buyer  to be
responsible for and to receive the benefit of the same after the Closing Date;

                           (i)     real and personal property taxes, assessments
and annual registration fees;

                           (ii)    water,  sewer  and  other  similar  types  of
taxes, and installments on special benefit  assessments  and regulatory  assess-
ments;

                           (iii)   electric,  gas,  telephone  and other utility
charges;

                           (iv)    expenses  relating  to Transferred Employees,
including   payroll  expenses,   payroll  Taxes, reimbursable  employee business
expenses and the financial cost of the accrued  vacation time of the Transferred
Employees;

                           (v)     rents under leases transferred  to or assumed
by Buyer to the extent not included in the accounts payable of the Business;

                           (vi)    charges under  maintenance, service and other
Contracts  and fees under  licenses  transferred to  or assumed by Buyer  to the
extent not included in the accounts payable of the Business;

                           (vii)   deposits  of Citizens  or LGSN to the  extent
transferable to Buyer;

                           (viii)  prepaid expenses and prepayments, and accrued
expenses to the extent not included in the accounts payable of the Business;

                           (ix)    sales,  franchise,  gross  receipts and other
similar Taxes based upon revenues; and

                           (x)     petty cash.

                  (b)  The  items  listed  in  Section  3.3(a)  above  shall  be
estimated  item  by  item  by  Sellers  and  reflected  on the  certificate  and
supporting documentation to be delivered to Buyer pursuant to Section 3.2(a) and
finally determined in accordance with Section 3.2(b).

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Sellers as follows:

         Section  4.1  Organization,  Existence  and  Qualification.  Buyer is a
corporation duly incorporated,  validly existing, and in good standing under the
laws of the State of Texas and the Commonwealth of Virginia, with full corporate
power and authority to conduct its business as it is now being conducted, to own
or use the  properties and assets that it purports to own or use, to perform its
obligations  under all  Contracts  to which it is a party,  and to  execute  and
deliver  this  Agreement  and the Related  Documents  to which Buyer is a party.

                                       14
<PAGE>

Buyer is duly qualified to do business as a foreign  corporation  and is in good
standing under the laws of each state in which the failure to be so qualified or
in good standing would materially adversely affect the business or properties of
Buyer. Buyer is, or by Closing will be, duly qualified and in good standing as a
foreign corporation licensed to do business in the State of Louisiana.

         Section 4.2 Authority  Relative to this  Agreement and Binding  Effect.
The  execution,  delivery  and  performance  of this  Agreement  and the Related
Documents  by Buyer have been duly  authorized  by Buyer's  Board of  Directors,
which  constitutes all necessary  corporate action required on the part of Buyer
for  such  authorizations.  The  execution,  delivery  and  performance  of this
Agreement and the Related Documents by Buyer will not result in (a) any conflict
with or breach or violation of or default under the Organizational  Documents of
Buyer, or (b) a violation or breach of any term or provision of, or constitute a
default or accelerate the performance  required under, any indenture,  mortgage,
deed of trust, security agreement, loan agreement, or Contract to which Buyer is
a party or by which its assets are bound, or (c) a violation of any Order of any
Governmental Body. This Agreement  constitutes,  and the Related Documents to be
executed by Buyer when executed and delivered will constitute, valid and binding
obligations  of  Buyer,  enforceable  against  Buyer in  accordance  with  their
respective terms, except as such enforceability may be limited by (i) bankruptcy
or  similar  laws from  time to time in  effect  affecting  the  enforcement  of
creditors'  rights  generally or (ii) the  availability  of  equitable  remedies
generally.

         Section 4.3 Governmental and other Required Consents.  Except for those
Consents  described  in Schedule  4.3 and except as set forth in Schedule 5.3 to
the  extent  (but only to the  extent)  applicable  to Buyer,  no Consent of any
Governmental  Body or  third  Person  is  required  to be  obtained  by Buyer in
connection  with the  execution  and delivery by Buyer of this  Agreement or the
Related  Documents or the consummation of the transactions  contemplated by this
Agreement or the Related Documents.

         Section 4.4 Availability of Funds.  Buyer has available,  and will have
available  on the Closing  Date,  or has written  commitments  from  responsible
financial  institutions to provide,  sufficient funds to enable it to consummate
the transactions contemplated by this Agreement.

         Section 4.5 Filings.  No statement  furnished by Buyer for inclusion in
any  filing  with  any  Governmental  Body in  connection  with  obtaining  such
Governmental   Body's  Consent  for  the   consummation   of  the   transactions
contemplated by this Agreement will contain,  as of the date such information is
so provided,  any untrue  statement of a material fact or will omit to state, as
of the  date  such  information  is so  provided,  any  material  fact  which is
necessary  to  make  the  statements   contained   therein,   in  light  of  the
circumstances under which they were made, not misleading.

         Section 4.6 Brokers.  Except for S.G. Barr Devlin,  no broker or finder
has acted for or on behalf of Buyer or any Affiliate of Buyer in connection with
this Agreement or the transactions  contemplated by this Agreement. No broker or
finder is entitled to any brokerage or finder's fee, or to any commission, based
in any way on agreements, arrangements or understandings made by or on behalf of
Buyer or any  Affiliate of Buyer for which a Seller or any Affiliate of a Seller
has or will have any liability or obligations (contingent or otherwise).

                                       15
<PAGE>

         Section 4.7 Independent Investigation. Buyer is knowledgeable about the
businesses  engaged in by Citizens  through its LGS and LGS  Intrastate  Company
divisions  and by LGSN and of the usual and  customary  practices  of  companies
engaged  in  businesses  similar  to such  businesses  and has had access to the
Assets, the officers and employees of Sellers,  and the books, records and files
of Sellers relating to the Business, the Assets and LGSN. In making the decision
to enter into this  Agreement and to consummate  the  transactions  contemplated
hereby,  Buyer  has  relied  solely  on the  basis  of its own  independent  due
diligence  investigation  of the  Business  and  upon  the  representations  and
warranties  made herein or in any other  document  or  instrument  delivered  by
Sellers pursuant hereto.

         Section 4.8 Public  Utility  Holding  Company  Status;  Regulation as a
Public Utility.  Buyer is a "public utility company" (as such term is defined in
PUHCA).  Neither  Buyer nor any of its  Affiliates  is a "holding  company" of a
"public utility  company" or of a "holding  company," within the meaning of such
terms in PUHCA,  and Buyer is not a "subsidiary" or an "affiliate" of a "holding
company" within the meaning of the PUHCA.

         Section  4.9  Buyer's  Financial   Statements.   Buyer  has  heretofore
delivered  to Sellers  complete  and correct  copies of the  following:  (a) its
annual report to  shareholders  of its most recently  ended fiscal year, (b) its
Annual  Report on Form 10-K for the same fiscal year, as filed with the SEC, (c)
its proxy  statement  relating to its most recent Annual Meeting of Shareholders
and (d) its quarterly  reports on Form 10-Q for any fiscal  quarters ended after
the fiscal year described in clause (a). The consolidated  financial  statements
of Buyer  contained  therein were prepared in accordance  with GAAP applied on a
consistent  basis,  except for changes  concurred in by Buyer's  accountants and
disclosed in said financial  statements,  throughout the periods specified,  and
present fairly in all material  respects the financial  condition and results of
operations  of the  businesses  of Buyer  as of the  dates  thereof  and for the
periods then ended (subject, in the case of unaudited financial  statements,  to
normal year-end adjustments and the omission of footnote disclosure).

                                    ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

         Sellers  jointly  and  severally  represent  and  warrant  to  Buyer as
follows:

         Section 5.1       Organization, Existence and Qualification.

                  (a)  Citizens  is a  corporation  duly  incorporated,  validly
existing,  and in good  standing  under the laws of the State of Delaware,  with
full  corporate  power and  authority to conduct the Business as it is now being
conducted,  to own or use the Division Assets,  to perform its obligations under
all Contracts to which it is a party,  and to execute and deliver this Agreement
and the  Related  Documents  to  which  Citizens  is a party.  Citizens  is duly
qualified to do business as a foreign  corporation and is in good standing under
the laws of the State of Louisiana  and each other state in which the failure to
be so qualified or in good standing would have a Material Adverse Effect.

                  (b) LGSN is a corporation duly organized, validly existing and
in good  standing  under  the laws of the State of  Louisiana.  LGSN is the only

                                       16
<PAGE>

Affiliate  of  Citizens  engaged  in the  Business.  LGSN has all the  requisite
corporate power and corporate authority to own the LGSN Assets which it purports
to own and to own, lease,  and operate its portion of the Business as and in the
place where such  business is now  conducted  and where such LGSN Assets are now
owned or leased or operated. Except for LGSN's 18.6% membership interest in Pine
Pipeline Acquisition Company,  L.L.C., LGSN does not own any equity or ownership
interest of any other Person and has no subsidiaries.  The LGSN Assets purported
to be  owned by LGSN  and the  portion  of the  Business  conducted  by LGSN are
located and conducted only in the State of Louisiana and LGSN is not required to
be  qualified  to do business as a foreign  corporation  in any other state as a
result of its  ownership of the LGSN Assets or its conduct of the portion of the
Business conducted by LGSN.

         Section 5.2 Authority  Relative to this  Agreement and Binding  Effect.
The  execution,  delivery  and  performance  of this  Agreement  and the Related
Documents  by  Sellers  have been duly  authorized  by all  requisite  corporate
action.  Except  as set forth in  Schedule  5.2,  the  execution,  delivery  and
performance  of this  Agreement  and the Related  Documents  by Sellers will not
result in (a) any conflict  with or breach or violation of or default  under the
Organizational  Documents of Citizens or LGSN,  (b) a violation or breach of any
term or provision  of, or  constitute a default or  accelerate  the  performance
required under, any indenture, mortgage, deed of trust, security agreement, loan
agreement,  or other  Contract  listed or that would be required to be listed in
Schedule 5.12 if in existence on the date hereof to which  Citizens or LGSN is a
party or by which any of the Assets are bound,  or (c) a violation  of any Order
of any Governmental  Body. This Agreement  constitutes and the Related Documents
to be executed by Sellers when executed and delivered will constitute  valid and
binding  obligations of Sellers,  enforceable against Sellers in accordance with
their  terms,  except as  enforceability  may be  limited by (i)  bankruptcy  or
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally or (ii) the availability of equitable remedies generally.

         Section 5.3  Governmental  and Other Required  Consents.  Except as set
forth in Schedule  5.3, no material  Consent of any  Governmental  Body,  and no
Consent of any other third  Person  under any  Contract  listed or that would be
required to be listed in Schedule  5.12 if in existence  on the date hereof,  is
required to be obtained by Citizens or LGSN in connection with the execution and
delivery  by  Sellers  of  this  Agreement  or  the  Related  Documents  or  the
consummation  by Sellers of the  transactions  contemplated by this Agreement or
the Related Documents.

         Section 5.4 Filings. No statement furnished by Sellers for inclusion in
any  filing  with  any  Governmental  Body in  connection  with  obtaining  such
Governmental   Body's  Consent  for  the   consummation   of  the   transactions
contemplated by this Agreement will contain,  as of the date such information is
so provided,  any untrue  statement of a material fact or will omit to state, as
of the  date  such  information  is so  provided,  any  material  fact  which is
necessary  to  make  the  statements   contained   therein,   in  light  of  the
circumstances under which they were made, not misleading.

         Section 5.5       Title to Assets; Encumbrances.

                  (a) Except as set forth in Schedule 5.5, Citizens has good and
valid title to the Division Assets and LGSN has good and valid title to the LGSN
Assets, including in each case those reflected in the 1999 Financial Statements,
except, in each case, with respect to Assets disposed of since December 31, 1999
in the ordinary  course of business  consistent  with past practice or otherwise
disposed  of in  accordance  with this  Agreement  and except for any  Permitted

                                       17
<PAGE>

Encumbrances.  None of the Assets is subject to any Encumbrance except Permitted
Encumbrances.  Schedule 5.5 lists each material parcel of Real Property owned in
fee simple  that is a part of the Assets.  Except as set forth in Schedule  5.5,
Citizens or LGSN owns or possesses all material  Easements  necessary to conduct
the Business as now being  conducted  without any known conflict with the rights
of others. Citizens or LGSN enjoys peaceful and undisturbed possession under all
material real property leases included in the Assets,  neither Citizens nor LGSN
is in default,  in any material respect,  under any of such leases, and all such
leases are valid and subsisting and in full force and effect.

                  (b) The Assets,  when taken together with the Excluded Assets,
include  all  assets  and  properties  that are  necessary  for the  supply  and
servicing of the  customers of the Business in  accordance  with the  historical
supply and service  standards of Sellers.  The tangible  assets  included in the
Assets, when taken as a whole, are in good operating condition,  reasonable wear
and tear  excepted,  and are adequate for the use to which they are being put in
the conduct of the Business.

                  (c) No condemnation,  expropriation, eminent domain or similar
Proceeding is pending or, to the Knowledge of Sellers,  Threatened  with respect
to the  Real  Property  or the  Easements.  Sellers  are in  compliance,  in all
material respects, with all Easements and similar realty interests benefiting or
encumbering the Real Property.  The Real Property, and all improvements thereon,
do not violate,  in any material respect,  any applicable  zoning,  construction
code or other restriction of any Governmental Body.

         Section 5.6       Financial Statements.

                  (a) Schedule  5.6(a) sets forth the unaudited  balance  sheets
for the Business as of December  31, 1998 and  December  31, 1999 (the  "Balance
Sheets") and unaudited  statements of income of the Business for the  respective
years then ended (collectively, the "Financial Statements"). Except as set forth
in Schedule  5.6(a),  the Financial  Statements  have been prepared on a pre-tax
basis in  accordance,  in all material  respects,  with the books and records of
Sellers and GAAP applied on a basis consistent with prior periods. Except as set
forth in Schedule  5.6(a),  the Balance  Sheets  present  fairly in all material
respects the financial  condition of the Business as of their  respective  dates
and the income statements included in the Financial Statements present fairly in
all  material  respects  the  results  of  operations  of the  Business  for the
respective periods covered thereby.  The books and records of Sellers from which
the  Financial  Statements  were  prepared  were  complete  and  accurate in all
material respects at the time of such preparation. The 1999 Financial Statements
are presented on a  consolidated  pro-forma  basis as described  therein and the
1998 Financial  Statements are presented on a property-level  pro-forma basis as
described therein.

                  (b) There are no material  liabilities or obligations (whether
known or unknown and whether absolute,  accrued, contingent or otherwise) of the
Business or of Citizens  or LGSN  arising out of or relating to the  Business or
the Assets,  except (i) Retained  Liabilities,  (ii) liabilities and obligations
reflected in the Balance Sheet as of December 31, 1999,  (iii)  liabilities  and
obligations  arising since December 31, 1999, in the ordinary course of business
consistent  with past  practice  that are not  material  or that arise under any
Contract  (including as a result of this Agreement) or Legal Requirement (and as
to which Legal Requirement  Sellers are in compliance in all material respects),
(iv) liabilities and obligations  relating to or arising from matters  disclosed
in  Schedule  5.6(b) or  another  Schedule  hereto,  (v) those  liabilities  and

                                       18
<PAGE>

obligations  that are the  subject of  Article  X, and (vi)  those  liabilities,
which, if outstanding as of the Closing Date,  would result in a decrease to the
Purchase Price in accordance with Section 3.1(b).

                  (c) Except as set forth in Schedule 5.6(c), since December 31,
1999, (i) the Business has been operated only in the ordinary course  consistent
with past practice, except for actions taken in connection with the contemplated
sale of the Business and this Agreement,  which have not been materially adverse
to the  Business,  and  except for  conversion  to the SAP  financial  reporting
system,  (ii) neither  Citizens nor LGSN has  experienced  any material  damage,
destruction  or loss (whether or not covered by  insurance)  with respect to the
Business or the Assets,  (iii)  neither  Citizens  nor LGSN has been  materially
affected by any material  adverse  Order issued by any  Governmental  Body since
such date with respect to the Business other than General Orders or any material
adverse change in the amount or structure of rates or tariffs  applicable to the
Business,  (iv)  Sellers  have not changed  their  accounting  policies or their
collection  or payment  procedures or practices  with respect to their  accounts
receivable  or  their  accounts  payable,  and  (v)  there  has  been  no  fact,
circumstance or event existing or occurring which, either individually or in the
aggregate,  has had or could  reasonably be expected to have a Material  Adverse
Effect.

         Section 5.7 Compliance with Legal Requirements;  Governmental  Permits;
Business  Practices.  Except as set forth in Schedule 5.7: (a) neither  Citizens
nor LGSN is in violation,  in any material respect,  of any Legal Requirement or
Order that is applicable to it, to the conduct or operation of the Business,  or
to the ownership or use of any of the Assets; and (b) Citizens or LGSN possesses
all material franchises, permits, licenses, and authorizations from Governmental
Bodies required by any applicable Legal Requirement or Order necessary to permit
the  operation  of the  Business  in the manner in which it is  currently  being
conducted by Citizens or LGSN.  Neither Citizens,  LGSN nor, to the Knowledge of
Sellers,  any Affiliate  thereof has directly or  indirectly  given or agreed to
give any gift or  similar  benefit  to any  customer,  subcontractor,  supplier,
government  employee,  or other  Person who was or is in a possible  position to
help or hinder  Citizens  or LGSN with  respect to the  Business,  which gift or
benefit  could  reasonably  be  expected to (i)  subject  Citizens,  LGSN or the
Business  or the Assets to any  damages or  penalties  in any civil or  criminal
Proceeding,  or (ii) have,  individually or in the aggregate, a Material Adverse
Effect.

         Section 5.8 Legal Proceedings;  Outstanding Orders. Except as set forth
in Schedule 5.8, there is no pending or Threatened  Proceeding (a) that has been
commenced  against or affecting  either  Seller (with respect to the Business or
the  Assets)  other  than  General  Proceedings,  or (b) as of the  date of this
Agreement, that challenges, or that may have the effect of preventing, delaying,
making illegal,  or otherwise  interfering  with, the transactions  contemplated
hereby.  No  Proceeding  listed in Schedule 5.8 is  reasonably  likely to have a
Material Adverse Effect;  provided that no representation or warranty is made in
this sentence with respect to the  Proceedings set forth in items I.5 or I.23 in
Schedule  5.8.  Except as disclosed  on Schedule  5.8,  there is no  outstanding
material  Order  against  either  Seller  which  relates to or arises out of the
conduct of the Business or the ownership, condition or operation of the Business
or the  Assets,  other than any Orders  relating  to rates,  tariffs and similar
matters  arising in the  ordinary  course of  business  (as to which there is no
allegation of a violation) and other than any General Order.

         Section 5.9 Taxes.  Each of Citizens and LGSN has filed all Tax Returns
required to be filed by Citizens or LGSN or requests for extensions to file such
Tax Returns have been timely filed, such Tax Returns are complete and correct in
all  material  respects,  and Citizens or LGSN has paid and  discharged  or made

                                       19
<PAGE>

adequate  provision  for all Taxes and no other Taxes are payable by Citizens or
LGSN with respect to items or periods covered by such Tax Returns.  There are no
pending  or, to  Sellers'  Knowledge,  Threatened  audits or other  examinations
relating to any Tax  matters,  and no  deficiencies  have been  asserted  or, to
Sellers' Knowledge,  Threatened to be asserted,  except as set forth in Schedule
5.9.  There are no Tax liens on the  Assets.  As of the date of this  Agreement,
neither  Citizens nor LGSN has granted any waiver of any statute of  limitations
with respect to, or any extension of a period for the  assessment of, any Tax or
the filing of any Tax Return  except as set forth in Schedule  5.9.  None of the
Assets (i) secures any debt the interest on which is  tax-exempt  under  Section
103 of the Code, (ii) is "tax-exempt use property" within the meaning of Section
168(h) of the Code,  (iii) is "tax-exempt  bond financing  property"  within the
meaning of Section  168(g)(5) of the Code, (iv) is "limited use property" within
the  meaning of Revenue  Procedure  76-30,  or (v) is  required to be treated as
being owned by any other Person  pursuant to the  provisions  of former  section
168(f)(8) of the Code.

         Section 5.10  Intellectual  Property.  Schedule 5.10 lists all patents,
trademarks,  service  marks and  copyrights  owned by Citizens or LGSN,  and all
material third party intellectual  property in each case used or held for use by
Citizens or LGSN  primarily  in the  operation  of the  Business  other than the
Excluded Assets. Citizens or LGSN either (a) owns all right, title, and interest
in such  intellectual  property  without  any  obligation  to make any  license,
royalty or other payment with respect  thereto,  including,  to the Knowledge of
Sellers,  any license,  royalty or other payment resulting from any infringement
of any third  party  rights,  or (b) has the right to use  pursuant  to license,
sublicense,  agreement,  or permission all such intellectual  property necessary
for the operation of the Business or the Assets. Except as set forth on Schedule
5.10,  such  ownership  rights or  rights to use each item of such  intellectual
property  are valid and in full  force and  effect  and are not  subject  to any
maintenance  fees, due within one year of the date hereof,  and,  except for any
such intellectual  property that is included among the Excluded Assets,  will be
owned or available  for use in the Business on  identical  terms and  conditions
immediately  subsequent to the Closing  hereunder.  Sellers have no Knowledge of
(i) any infringement or claimed  infringement by Citizens or LGSN of any patent,
trademark,  service mark, copyright or other intellectual  property of others or
(ii) any infringement of any patent, trademark, service mark, copyright or other
intellectual property owned by or under license to Citizens or LGSN.

         Section 5.11 Y2K Compliance. The information technology systems used by
Citizens  and LGSN with  respect to the  Business are designed to be used during
and after the  calendar  year 2000,  and will  operate  during such time period,
without  error  relating  to the date  data,  specifically  including  any error
relating  to, or the  product  of,  date data  which  represents  or  references
different  centuries or more than one century,  except to the extent any failure
to operate or any such error would not result in a Material Adverse Effect.

         Section 5.12      Material Contracts; Customers.

                  (a) Except for (i)  Contracts  listed in Schedule  5.12,  (ii)
Easements,  line extension Contracts and similar  construction  arrangements and
(iii)  Contracts  included  among the  Excluded  Assets,  as of the date hereof,
neither  Citizens nor LGSN is a party to any Contract (1) which is a gas supply,
transportation or storage agreement relating to the Business involving a minimal
annual payment by any party thereto of more than $100,000, (2) the loss of which
would have a Material  Adverse  Effect,  (3)  pursuant to which  Citizens  (with
respect to the  Business)  or LGSN is subject to  take-or-pay  obligations  with

                                       20
<PAGE>

respect to gas  purchases or gas  marketing,  (4) which  constitutes  a lease of
material Real Property; (5) which restricts the operation of the Business or the
Assets,  (6) which  constitutes  a guarantee or similar  arrangement  other than
surety  instruments  issued in the  ordinary  course of  business,  or (7) which
otherwise constitutes a Material Contract. Except as disclosed in Schedule 5.12,
each of the Contracts  listed on Schedule 5.12 and each line extension  Contract
and similar construction  arrangement constitutes a valid and binding obligation
of Citizens or LGSN and, to the  Knowledge of Sellers,  constitutes  a valid and
binding  obligation of the other parties  thereto,  is in full force and effect,
and,  subject to obtaining any required Consent of the other parties thereto (as
set forth on  Schedule  5.3 with  respect to the  Contracts  listed on  Schedule
5.12),  may be  transferred  to the Buyer  pursuant to this  Agreement  and will
continue in full force and effect thereafter, in each case without breaching the
terms  thereof  or  resulting  in the  forfeiture  or  impairment  of any rights
thereunder.  Neither Seller has given to or received from any other party to any
of such  Contracts or  arrangements  any notice or other  written  communication
regarding any actual or alleged  material breach of or default under any of such
Contracts  or  arrangements  that has not been  withdrawn,  settled or otherwise
resolved.  Sellers have made available to Buyer copies,  which were accurate and
complete as of the date so made available,  of all Contracts  listed on Schedule
5.12.

                  (b)  Neither   Seller  has  been   involved  in  any  material
controversy  with any group of similarly  situated  customers of the Business or
with any material suppliers of gas or transportation for the Business during the
last three (3) years.

         Section 5.13      Employee Benefit Matters.

                  (a) Schedule 5.13 lists (i) each  "employee  benefit plan," as
such term is defined in Section  3(3) of ERISA,  and any related  trust or other
funding  arrangement,  which is covered by any  provision  of ERISA and which is
maintained by Citizens or LGSN for the benefit of the Active Employees or former
employees  of the  Business,  or for which  Citizens  or LGSN has any  potential
liability ("Employee Benefit Plan"); (ii) each other fringe benefit plan, policy
or  arrangement,  including  any  related  trust or other  funding  arrangement,
currently  maintained by Citizens for the benefit of Active  Employees or former
employees  of  the  Business,   which  provides  for  pension,   profit-sharing,
retirement,  deferred compensation,  bonuses, severance, incentive compensation,
stock purchase, stock options, change in control,  disability,  medical, dental,
life  or  other  employee   insurance  coverage  or  similar  employee  benefits
(collectively,  together with the Employee Benefit Plans, "Employee Plans"); and
(iii) each collective bargaining, union or other employee association agreement,
employment,    managerial   advisory,   and   consulting   agreement,   employee
confidentiality  agreement,  and all other  material  agreements,  policies,  or
arrangements  maintained by Citizens or LGSN for the Active  Employees or former
employees of the Business (collectively,  "Employee  Agreements").  Citizens has
made available to Buyer copies,  which were accurate and complete as of the date
so made  available,  of all such  documents  and (if  applicable)  summary  plan
descriptions  with respect to such Employee  Plans and Employee  Agreements,  or
summary  description(s)  of any  Employee  Plans and  Employee  Agreements,  not
otherwise in writing.  In addition,  Citizens  has  delivered to Buyer,  or will
deliver to Buyer within 30 days of the date of this Agreement:

                           (i)   all  employment  manuals and policies  relating
to Employee  Plans,  Employee  Agreements  or other employment practices; and

                                       21
<PAGE>

                           (ii)  with  respect  to  Citizens'  Pension Plan  and
Citizens' 401(k) Plan, the  most  recent  IRS determination letter for each such
Plan.

                  (b)      Except as set forth in Schedule 5.13:

                           (i)    Other  than claims for benefits  submitted  by
participants or  beneficiaries,  no claim against, or legal proceeding involving
Citizens' 401(k) Plan or any Employee Plan is pending or, to Sellers' Knowledge,
is threatened.

                           (ii)   Neither  Citizens, nor LGSN, nor any ERISA Af-
filiate of Citizens or LGSN has ceased  operations at any facility or has with-
drawn  from any  Employee Benefit Plan  subject to Title IV of ERISA  ("Title IV
Plan") in a manner that would  subject Citizens or LGSN to liability under ERISA
ss.4062(e), ss.4063 or ss.4064.

                           (iii)  Neither  Citizens,  nor  LGSN,  nor  any ERISA
Affiliate  of  Citizens or LGSN has  filed a notice of intent  to terminate  any
Title IV Plan  or has adopted any  amendment to treat any Title IV Plan as  ter-
minated,  and  the PBGC has not  instituted  proceedings  to treat  any Title IV
Plan as terminated, where such termination  could result in potential  liability
to Buyer.  No event  has occurred  or circumstance  exists  that may  constitute
grounds  under  ERISA  ss.4042 for the  termination  of, or the appointment of a
trustee to administer, any Employee Plan.

                           (iv)   No funding deficiency  exists with respect  to
any Employee Plan.

                           (v)    Neither  Citizens  nor LGSN  has  Knowledge of
any facts or  circumstances  that may give rise to any liability of Buyer to the
PBGC under Title IV of ERISA.

                           (vi)   Neither  Citizens  nor LGSN nor any ERISA  Af-
filiate  of  Citizens or LGSN has  withdrawn  from any Employee   Benefit   Plan
within  the  meaning given  in  ERISA   ss.3(37)(A) ("Multi-Employer Plan") with
respect to  which there  is any  outstanding  liability as  of the date  of this
Agreement.  No event has occurred or circumstances exists that  presents a  risk
of the occurrence of  any withdrawal  from,  or the participation,  termination,
reorganization,  or  insolvency  of,  any  Multi-Employer Plan that could result
in any  liability of Buyer to a  Multi-Employer Plan.

                           (vii)  Except to the extent  required  under ERISAss.
601 et seq.  and IRCss.4980B and except with respect to post-retirement benefits
for  Retirees  and  "grandfathered  employees" as  defined in  Section  10.7(b),
neither  Citizens nor LGSN provides  health or  welfare benefits for any retired
or former employee of the Business or is obligated to provide  health or welfare
benefits  to any active  employee of the  Business following such employee's re-
tirement or other termination of service.

                           (viii)  Except   with  respect   to   post-retirement
medical,  dental and  life  insurance  benefits for the LGS Retirees and "grand-
fathered  employees"  as defined in Section 10.7(b),  Citizens has  the right to
modify and terminate such post-retirement  benefits to retirees  with respect to
both retired and active employees of the Business.

                           (ix)    Except   with   respect  to   post-retirement
medical,  dental  and life insurance  benefits for  the LGS Retirees and "grand-
fathered employees" as defined in Section 10.7(b), no commitment or  representa-

                                       22
<PAGE>

tion has been made by Seller or any of its Affiliates to any Person  with regard
to  any plan  providing  post retirement  medical,  dental,  or  life  insurance
benefits or Employee  Agreement that was not in accordance  with
such plan or Employee  Agreement and that could have a material adverse economic
consequence to Buyer.

                  (c) Citizens'  Pension Plan and Citizens'  401(k) Plan are the
only  Employee  Benefit  Plans which are intended to be qualified  under Section
401(a) of the IRC.

                  (d) To the Knowledge of Citizens,  each Employee  Benefit Plan
has been  established and  administered  in all material  respects in accordance
with the terms of ERISA and the applicable provisions of the IRC.

                  (e) LGSN  does not  employ  and has not at any time  since its
acquisition  by Citizens  employed  any  employees or  maintained,  sponsored or
contributed to any Employee Plans.

                  (f) The LPSC Rate Orders applicable to the Business  authorize
the recovery of costs associated with retiree medical, dental and life insurance
benefits  referred to in Section 10.7(b) hereof for the retirees of the Business
and  Transferred  Employees  who are  "grandfathered  employees" as described in
Section  10.7(b) on a  "pay-as-you-go"  method.  True and complete  copy of such
Orders have been previously provided by Citizens to Buyer.

         Section 5.14      Environmental Matters.

                  (a)  Citizens  and LGSN  hold,  and are in  compliance  in all
material  respects with, all permits,  licenses and governmental  authorizations
required  for the conduct of the  Business or the  operation of the Assets under
applicable   Environmental   Laws,  and  Citizens  and  LGSN  are  otherwise  in
compliance,  in all material respects,  with applicable  Environmental Laws with
respect to the Business and the Assets.

                  (b) Except as listed in Schedule  5.14,  neither  Citizens nor
LGSN has received any notice,  demand,  letter, claim or request for information
alleging that either Citizens or LGSN is in violation of or subject to liability
under any Environmental Law arising out of Citizens' or LGSN's ownership, use or
operation  of the Assets or the  operation of the  Business,  which has not been
resolved  or, if  resolved,  as to which any  material  obligation  or liability
remains outstanding.

                  (c)  Except  as  listed  in  Schedule   5.14,   there  are  no
Proceedings pending or Threatened with respect to Citizens' or LGSN's compliance
with Environmental Laws and relating to the Business or the Assets.

                  (d) Except as listed in Schedule  5.14,  neither  Citizens nor
LGSN has received any written notice from any Governmental Body that it does not
have all certificates,  permits and authorizations required by any Environmental
Law for its  ownership,  use or operation of the Assets or the  operation of the
Business  which has not been resolved or, if resolved,  as to which any material
obligation or liability remains outstanding.

                  (e) To Sellers'  Knowledge,  Citizens  has  delivered to Buyer
copies of all environmental assessments, audits, studies and other environmental

                                       23
<PAGE>

reports in Sellers' possession or reasonably available to either Seller relating
to the Real  Property or any of the other Assets or which  concern the existence
or possible existence of Hazardous Materials on, under or adjacent to any of the
Real  Property or relating to potential  Environmental  Liability of Citizens or
LGSN in  connection  with the  Business  or the  Assets.  Except as set forth in
Schedule 5.14, no  environmental  remediation of any Release is occurring on any
Real  Property  included in the Assets nor has Citizens or LGSN issued a request
for proposal or otherwise asked an environmental remediation contractor to begin
plans for any such  environmental  remediation.  Except as set forth in Schedule
5.14,  to Sellers'  Knowledge,  there have been no Releases on any Real Property
included  in the Assets  that could  reasonably  be  expected to have a Material
Adverse Effect.

                  (f)  Except as set forth in  Schedule  5.14,  none of the Real
Property  is  (i)  situated  in a  federal  "Superfund"  site  or,  to  Sellers'
Knowledge,  in any federal  "Superfund"  study area designated under the federal
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
or (ii) to Sellers'  Knowledge,  situated  in any site or study area  designated
under any state statute comparable to CERCLA.

                  (g) Neither  Citizens  nor LGSN has entered  into or agreed to
any Order,  and is not  subject to any  outstanding  Order  other than a General
Order  relating to  compliance  with or liability  under any  Environmental  Law
relating to the Business or the Assets.  Neither Citizens nor LGSN is subject to
any  indemnity  or other  agreement  with any third party  relating to liability
under any  Environmental  Law  relating to the  Business  or the Assets,  except
customary  environmental  indemnity  arrangements  contained  in  the  Contracts
described in Parts I, II, IV through VII and XII of Schedule 5.12.

                  (h) To Sellers' Knowledge, the Real Property (including soils,
groundwater, surface water, buildings and other structures) is not contaminated,
in any material respect,  with any Hazardous Materials,  it being understood and
agreed that, for purposes of this Section 5.14(h), Hazardous Materials shall not
include non-friable asbestos or asbestos-containing materials.

                  (i) To  Sellers'  Knowledge,  there  are no  circumstances  or
conditions  involving  the  Business  or the  Assets  that could  reasonably  be
expected to result in any material claims, liability,  investigations,  costs or
restrictions  on the  ownership,  operation,  use or transfer of any of the Real
Property  pursuant  to any  Environmental  Law other  than with  respect  to any
activity  after the date hereof that  disturbs  asbestos or  asbestos-containing
materials  that  causes  them to become  friable or the  removal of  asbestos or
asbestos-containing  materials in connection  with any  renovation or structural
change to any Asset after the date hereof.

                  Section 5.15 Labor  Matters.  Schedule 5.15 lists with respect
to the Business any labor  disputes  that have arisen  during the three (3) year
period ending on the date hereof through the grievance and arbitration procedure
of any collective  bargaining  agreements,  any  Proceedings  that are presently
pending or have been  resolved  during the three (3) year  period  ending on the
date hereof through the National Labor  Relations  Board,  and any labor matters
that are  presently  pending  or have been  resolved  during  the three (3) year
period ending on the date hereof through any court with  competent  jurisdiction
over  labor  matters.  Except  to the  extent  set forth in  Schedule  5.8 or in
Schedule  5.15,  (a)  Citizens  and  LGSN  are in  compliance,  in all  material
respects,  with  all  Legal  Requirements  applicable  to the  Active  Employees
respecting  employment  and  employment  practices,   terms  and  conditions  of
employment  and wages and hours;  (b)  neither  Citizens  nor LGSN has  received

                                       24
<PAGE>

notice of any pending or Threatened  unfair labor practice  complaint against it
before the  National  Labor  Relations  Board with  respect to any of the Active
Employees;  (c) neither  Citizens  nor LGSN has received  written  notice of any
representation petition or other question concerning  representation  respecting
the Active  Employees  pending or Threatened to be filed with the National Labor
Relations Board; and (d) no arbitration  proceeding  arising out of or under any
collective  bargaining  agreement is pending or Threatened  against  Citizens or
LGSN. No Active Employee is covered by a collective bargaining agreement.

         Section 5.16      State Regulatory Matters.

                  (a) Schedule 5.16  reflects all of the currently  pending rate
filings  relating  to the  Business  heretofore  made by Citizens or LGSN before
state  regulatory   commissions  and  each  other  currently   pending  material
Proceeding  of such  state  regulatory  commissions,  other  than any  currently
pending General Proceeding.

                  (b) All currently  effective  material filings relating to the
Business heretofore made by Sellers with state regulatory  commissions were made
in compliance in all material  respects with Legal  Requirements then applicable
thereto  and the  information  contained  therein  was true and  correct  in all
material respects as of the respective dates of such filings.

         Section 5.17 Public Utility  Holding  Company  Status;  Regulation as a
Public Utility.  Citizens is a "public  utility  company," but is not a "holding
company",  a "subsidiary of a public utility," an "affiliate of a public utility
company" or "an affiliate of a holding  company." LGSN is not a "public  utility
company," a "holding  company" or an "affiliate of a holding company." LGSN is a
"subsidiary"  and an "affiliate"  of Citizens,  a public  utility  company,  but
neither of such relationships requires the registration of Citizens or LGSN as a
holding company under PUHCA. LGSN is not a "subsidiary" or an "affiliate" of any
"public utility company" other than Citizens.  Terms in quotations have the same
meaning as such terms in PUHCA.

         Section 5.18 Brokers. Except for Morgan Stanley & Co. Incorporated,  no
broker or finder has acted for or on behalf of  Citizens or LGSN or any of their
Affiliates in connection with this Agreement or the transactions contemplated by
this  Agreement.  No broker or finder is entitled to any  brokerage  or finder's
fee,  or to any  commission,  based in any way on  agreements,  arrangements  or
understandings  made  by or on  behalf  of  Citizens  or  LGSN  or any of  their
Affiliates  for  which  Buyer  or  LGSN  has or will  have  any  liabilities  or
obligations (contingent or otherwise).

         Section  5.19   Insurance.   Schedule  5.19  identifies  each  material
insurance  casualty  and  property  policy of Citizens  or LGSN  relating to the
Business or the Assets.  All such  insurance  is  sufficient  to comply with all
regulatory and contractual  requirements relating to the Business or the Assets.
Neither  Citizens  nor LGSN has  received  any  refusal of coverage or notice of
cancellation or non-renewal with respect to any such insurance.

         Section 5.20  Disclaimer.  Except as otherwise  expressly  set forth in
this  Agreement  or in any other  document or  instrument  delivered  by Sellers
pursuant hereto, Sellers expressly disclaim any representations or warranties of
any kind or nature, express or implied, as to the condition, value or quality of
the assets or properties  currently or formerly used,  operated,  owned, leased,
controlled,  possessed,  occupied or maintained by Citizens or LGSN, and, except

                                       25
<PAGE>

as so otherwise set forth, Sellers  SPECIFICALLY  DISCLAIM ANY REPRESENTATION OR
WARRANTY OF  MERCHANTABILITY,  USAGE,  SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE WITH RESPECT TO SUCH ASSETS OR PROPERTIES, OR ANY PART THEREOF, OR AS TO
THE CONDITION OR  WORKMANSHIP  THEREOF,  OR THE ABSENCE OF ANY DEFECTS  THEREIN,
WHETHER LATENT OR PATENT.

                                   ARTICLE VI
                                    COVENANTS

         Section 6.1  Covenants of Sellers.  Sellers  jointly  agree to  observe
and perform the following covenants and agreements:

                  (a) Conduct of the Business Prior to the Closing Date.  During
the period from the date hereof to the Closing  Date,  Sellers  will operate the
Assets and the  Business in the usual,  regular and ordinary  course  consistent
with past  practice  and will use all  commercially  reasonable  efforts  to (i)
preserve  intact the Business and preserve the goodwill and  relationships  with
customers, suppliers and others having business dealings with the Business, (ii)
maintain  the  properties,  machinery  and  equipment  included in the Assets in
sufficient  operating  condition  and  repair  (subject  to  retirements  in the
ordinary  course of business  consistent  with past practice) to enable Buyer to
use them as they have been used in conduct of the  Business,  and (iii)  conduct
the Business in such manner that the  representations  and warranties of Sellers
contained  herein to the extent  relating to the Business or the Assets shall be
true and correct in all  material  respects as of the Closing Date as if made on
the Closing Date,  except for  representations  and warranties made as of, or in
respect of, only a specified date or period,  and except to the extent expressly
permitted by the next sentence  hereof.  Without  limiting the generality of the
foregoing,  with respect to the  Business,  except (i) as  contemplated  in this
Agreement or in Schedule 6.1, (ii) as required by any Legal Requirement or Order
or (iii) as  otherwise  expressly  consented to in writing by Buyer prior to the
Closing, Sellers will:

                           (1)   Not make  or permit  any material change in the
general nature of the Business;

                           (2)   Not  enter into  any  material  transaction  or
Contract that would be required to be described on Schedule 5.12 if in existence
on the date hereof, other than (a) pursuant to the Capital Budget, (b) the pur-
chase of gas in accordance with the Asset Management Plan described in item II.2
of  Schedule 5.8 (the "Asset Management Plan") or (c) in the  ordinary course of
business consistent with past practices provided Buyer has  consented thereto in
writing,  which  consent  shall not be  unreasonably withheld or delayed;

                           (3)   Not purchase, sell, lease, dispose of or other-
wise transfer or make any Contract for the purchase, sale, lease, disposition or
transfer of, any  material Assets other than (a) pursuant to the Capital Budget,
(b) the purchase of gas in accordance with  the Asset Management Plan  or (c) in
the ordinary course of business  consistent with past practices  provided Buyer
has consented  thereto in writing, which consent shall not be unreasonably with-
held or delayed;

                                       26
<PAGE>

                           (4)  Not  subject  any of the Assets  to Encumbrances
(other than Permitted Encumbrances);

                           (5)  Not  hire any  new employee unless such employee
is a bona fide replacement for  either a presently-filled position  or a vacancy
     ---- ----
in an authorized position with the Business;

                           (6)  Comply  in  all  material  respects with all ap-
plicable  material  Legal  Requirements  and Orders, including those relating to
the  filing  of  reports and  the payment  of Taxes due  to be paid prior to the
Closing, other than those contested in good faith;

                           (7)  Except  in the ordinary course  of business con-
sistent  with  past  practice or in  accordance with the  terms of any  existing
Contract or Employee Plan, not grant any  material  increase or change  in total
compensation or benefits to any of the Transferred Employees; not enter into any
employment,  severance or  similar Contract  with any  Person or  amend any such
existing  Contracts to increase any amounts payable  thereunder or benefits pro-
vided  thereunder;  and not enter  into any  collective  bargaining agreement;

                           (8)  Not terminate any Material Contract or any other
Contract  described on Schedule 5.12 except in the case of a breach of such Con-
tract by the other party thereto;

                           (9)   Not  create, incur, assume, guarantee or other-
wise  become  liable with  respect to  any  indebtedness for  money  borrowed or
capitalized lease other than in the ordinary course of business consistent  with
past  practice (it being  understood and agreed that customer advances, customer
deposits and  construction advances do  not create  indebtedness  for money bor-
rowed),  except pursuant to advances made by Citizens to LGSN or the Business;

                           (10)  Not make any  material change in  the levels of
storage inventory customarily maintained by Citizens or LGSN with respect to the
Business  and  taking into  account  seasonal  demands  and the  requirements of
the Asset Management  Plan, including pursuant to the Contract described as item
I.4 in Schedule 5.12; or

                           (11)  Not change accounting policies or collection or
payment  procedures or practices with respect to accounts receivable or accounts
payable.

                  (b) Access to the Business, Assets and Records; Updating
                      Information.

                           (1)   From and  after  the date  hereof and until the
         Closing Date, Sellers shall (A) permit Buyer and its Representatives to
         have, on reasonable notice and at reasonable  times,  reasonable access
         to all books,  papers and  records to the extent  that they  reasonably
         relate to the ownership, operation,  obligations and liabilities of the
         Business and the Assets; provided,  however, that such access shall not
         unreasonably   interfere  with  the  operation  of  the  Business;  and
         provided,  further,  that Buyer hereby agrees to defend,  indemnify and
         hold  harmless  Sellers  from and against all Losses  arising out of or
         relating  to the  negligence  or  willful  misconduct  of  Buyer or its
         Representatives  in connection with Buyer's access provided pursuant to
         this Section  6.1(b)(1);  (B) furnish the Buyer with such financial and
         operating  data and other  information  with respect to the Business as

                                       27
<PAGE>

         the Buyer may from time to time reasonably request; and (C) furnish the
         Buyer a copy of each material report,  schedule or other document filed
         or received  by either  Seller with  respect to the  Business  with any
         Governmental   Body.   Without   limiting   the   application   of  the
         Confidentiality  Agreement,  all documents or information  furnished by
         either  Seller  hereunder  shall  be  subject  to  the  Confidentiality
         Agreement.

                           (2)   Sellers   will  notify   Buyer  as  promptly as
         practicable  of any  significant  change  in  the  ordinary  course  of
         business for the Business and of any material  Proceedings  (Threatened
         or pending)  involving  or affecting  the Business or the  transactions
         contemplated  by this  Agreement,  and shall use reasonable  efforts to
         keep Buyer fully informed of such events.

                           (3)   From  and  after the Closing,  so  long  as any
         books, records  and files retained  by Sellers  relating to  the Assets
         remain  in existence and available,  Buyer (at  its expense) shall have
         the right  upon prior notice to inspect and  to make copies  thereof at
         any  time during  business hours for any proper  purpose, including the
         preparation of Tax returns.  For a period of seven (7) years  following
         the Closing Date,  Sellers shall use reasonable efforts  not to destroy
         or allow the destruction of any such books,  records and files  without
         first  offering  in  writing  to  deliver  them  to  Buyer (at  Buyer's
         expense).

                  (c) Consents. Sellers will use commercially reasonable efforts
to obtain all  necessary  Consents from any Person  required  under any Contract
applicable  to  the  Business  in  connection  with  the   consummation  of  the
transactions  contemplated hereby;  provided that nothing in this Section 6.1(c)
shall require any material payment or the incurrence of any material obligation.

                  (d)  Use  of  Certain  Information.   Except  as  required  by
applicable Legal  Requirements,  unless otherwise agreed to in writing by Buyer,
for a period commencing on the Closing Date and terminating five (5) years after
such date,  Sellers shall (i) keep all  information  relating to the Business or
the  Assets  and  all  information   contained  in  the  Assets  (including  all
information with respect to the identities,  purchasing  history and natural gas
requirements of the customers of the Business)  confidential and not disclose or
reveal any such  information  to any Person other than Sellers'  Representatives
who are actively and directly  participating  in the  transactions  contemplated
hereby or who otherwise  need to know such  information  for such purpose and to
cause those  Persons and each of their  Affiliates  to observe the terms of this
Section  6.1(d)  and (ii) not to use,  or  permit  any  Affiliate  to use,  such
information  for  any  other  purpose,   including  the  marketing  or  sale  of
unregulated natural gas to customers of the Business.  Sellers shall continue to
hold all such information according to the same internal security procedures and
with the same  degree of care  regarding  its  secrecy  and  confidentiality  as
currently  applicable  thereto.  Sellers shall notify Buyer of any  unauthorized
disclosure of any such  information to third parties that it discovers and shall
endeavor to prevent any further such  disclosures.  Sellers shall be responsible
for any  breach of the  terms of this  Section  6.1(d)  by either  Seller or any
Sellers' Representatives or any of their Affiliates.  After the Closing Date, in
the event that a Seller is requested  pursuant  to, or required  by,  applicable
Legal  Requirements to disclose any such  information,  or any other information
concerning the Business or the Assets, or the transactions  contemplated hereby,
such  Seller  shall  provide  Buyer  with  prompt  notice  of  such  request  or
requirement in order to enable Buyer to seek an appropriate  protective order or
other remedy, to consult with such Seller with respect to taking steps to resist
or narrow the scope of the request or legal  process (it being  understood  that

                                       28
<PAGE>

any such  efforts  to seek a  protective  order or other  remedy or to resist or
narrow the scope of such request or legal  process shall be at the sole cost and
expense of Buyer), or to waive  compliance,  in whole or in part, with the terms
of this Section 6.1(d).  Such Seller agrees not to oppose any action by Buyer to
obtain any such protective order or other  appropriate  remedy after the Closing
Date. In the event that no such protective order or other remedy is obtained, or
that Buyer waives compliance with the terms of this Section 6.1(d),  such Seller
shall furnish only that portion of such information which such Seller is advised
by its counsel is legally required.  In any such event such Seller shall use its
commercially  reasonable  efforts to ensure that all such information that is so
disclosed will be accorded confidential treatment. Sellers acknowledge and agree
that Buyer shall be entitled,  in addition to all other remedies,  to injunctive
relief and specific performance of this Section 6.1(d).

                  (e) Certain  Financial  Statements.  Sellers  shall furnish to
Buyer, at Buyer's expense,  the following financial statements for the Business:
(i) audited  consolidated  balance sheets as at December 31, 1999 (or such later
calendar year-end date as may be required to be filed by Buyer by Regulation S-X
under  the  Securities  Act  of  1933,  as  amended)  and  related  consolidated
statements  of  income  and cash  flows for the  years  then  ended and (ii) any
unaudited interim consolidated financial statements (including balance sheet and
statements  of income and cash  flows) for such later  interim  period as may be
required by Regulation S-X. Such financial  statements shall: (x) be prepared in
accordance with the books and records of Sellers  relating to the Business;  (y)
be  prepared  in  accordance  with  generally  accepted  accounting   principles
consistently applied (subject, in the case of unaudited financial statements, to
the omission of footnote disclosure) and the requirements of Regulation S-X; and
(z) fairly present,  in all material respects,  the financial  condition and the
results of  operations  and cash flows for the Business as at the dates  thereof
and for the fiscal periods covered thereby.  Buyer shall specify to Sellers such
statements that Buyer will so require.  Sellers shall provide such statements to
Buyer within 90 days  following  such request;  provided that if Closing  occurs
after  December 31, 2000,  Sellers will provide such  statements  within 60 days
after the Closing. Sellers shall cooperate to provide such statements earlier to
the extent reasonably practicable if Buyer shall so request.

         Section 6.2   Covenants of Buyer. Buyer covenants and agrees to observe
and  perform  the  following  covenants  and agreements:

                  (a)  Consents.  Buyer  will  use its  commercially  reasonable
efforts to assist  Sellers in obtaining all  necessary  Consents from any Person
required  under any Contract  applicable to the Business in connection  with the
consummation of the transactions  contemplated hereby; provided that, nothing in
this Section 6.2(a) shall require any material  payment or the incurrence of any
material obligation.

                  (b)  Access to Information.  After Closing,  Buyer  will,  and
will cause its Representatives  to,   afford   to   Sellers,   including   their
Representatives,  reasonable access to all books,  records,  files and documents
related to the Business in order to permit Sellers to prepare and file their Tax
Returns and to prepare for and  participate  in any  investigation  with respect
thereto,  to prepare for and participate in any other  investigation  and defend
any Proceedings  relating to or involving either Citizens,  LGSN or the Business
for which Sellers may be responsible,  to discharge their obligations under this
Agreement  and the other  Related  Documents  to which  they are a party and for
other  reasonable  purposes and will afford  Sellers  reasonable  assistance  in
connection  therewith.  Buyer will cause such records to be  maintained  for not
less than seven (7) years  from the  Closing  Date and will not  dispose of such

                                       29
<PAGE>

records without first offering in writing to deliver them to Sellers;  provided,
however, that in the event that Buyer transfers all or a portion of the Business
to any third party  during such  period,  Buyer may transfer to such third party
all or a portion of the books,  records,  files and documents  related  thereof,
provided  such  third  party  transferee   expressly   assumes  in  writing  the
obligations of Buyer under this Section 6.2(b).  In addition,  after the Closing
Date,  at  Sellers'  request,  Buyer shall make  available  to Sellers and their
Affiliates,  employees,  representatives  and agents,  those  employees of Buyer
requested by Sellers in  connection  with any  Proceeding,  including to provide
testimony,  to be deposed, to act as witnesses and to assist counsel;  provided,
however, that (x) such access to such employees shall not unreasonably interfere
with the  normal  conduct  of the  operations  of Buyer  and (y)  Sellers  shall
reimburse  Buyer  for the  allocated  time  charges  of such  employees  and the
out-of-pocket  costs  reasonably  incurred  by Buyer in  making  such  employees
available to Sellers.

                  (c)  Citizens Guarantees and Surety  Instruments.  Buyer shall
use its  reasonable  efforts to assist  Sellers in  obtaining  full and complete
releases  on  the  guarantees,   letters  of  credit,  bonds  and  other  surety
instruments  listed in Schedule  6.2(c).  For purposes of this  Section  6.2(c),
reasonable efforts shall include: (i) Buyer's assumption of the Contracts on the
terms set forth in this  Agreement;  and (ii) an obligation on the part of Buyer
to provide (A) a guaranty,  letter of credit, bond or other surety instrument at
Closing in lieu of any surety instrument provided by Citizens to any beneficiary
in  connection  with  the  Business  or the  activities  of  LGSN or (B) if such
beneficiary  refuses to accept such replacement  surety instrument from Buyer, a
specific  indemnity  from  Buyer to  Citizens  in respect  of  Citizens'  surety
instrument.

         Section 6.3   Governmental Filings.

                  (a)  HSR Act Filing. Buyer and Citizens shall comply  promptly
with the notice and reporting  requirements  of the HSR Act.  Buyer and Citizens
shall  comply  substantially  with  any  additional  requests  for  information,
including  requests for  production of documents and production of witnesses for
interviews or depositions,  made by the Antitrust  Division of the United States
Department  of  Justice,  the United  States  Federal  Trade  Commission  or the
antitrust  or  competition  law  authorities  of  any  other  jurisdiction  (the
"Antitrust   Authorities").   Buyer  and  Citizens   shall  each   exercise  its
commercially  reasonable efforts,  and each shall cooperate fully with the other
to prevent the entry in any Proceeding brought by an Antitrust  Authority or any
Governmental Body which would prohibit,  make unlawful or delay the consummation
of the transactions contemplated by this Agreement.

                  (b)  Other Regulatory Filings. Buyer and Sellers will, as soon
as reasonably practicable following the execution of this Agreement, prepare and
file with each  Governmental Body requests for such Consents as may be necessary
for the transfer of the Assets in accordance  with, or as  contemplated  by, the
terms of this Agreement  (including  using  commercially  reasonable  efforts to
prepare and file a joint  application,  in a mutually  acceptable form, with the
LPSC by June 1,  2000).  Buyer  and  Sellers  will use  commercially  reasonable
efforts to diligently pursue such Consents and will cooperate with each other in
seeking such  Consents.  To this end, the parties  agree to make  available  the
personnel  and other  resources of their  respective  organizations  in order to
accomplish  actions reasonably  required by them to obtain all such Consents.  A
request in the parties joint application for a rate moratorium or for consent to
amortize  Buyer's  acquisition  premium  account  shall  be  deemed  not  to  be
inconsistent with the parties commercially reasonable efforts.

                                       30
<PAGE>

                  (c)  Efforts.  Nothing  contained  in this  Section  6.3 shall
require  Sellers or Buyer to  institute  or defend  any legal or  administrative
Proceeding,  make any material payment or incur any economic burden,  dispose of
any material asset or business or suffer any material  detriment,  including any
change in the  applicable  rates or tariffs of the Business or the imposition of
any other materially adverse term or condition on the Business or the Assets.

         Section 6.4 Citizens  Marks.  Buyer  acknowledges  and agrees that,  as
between Buyer and Citizens,  Citizens has the absolute and exclusive proprietary
right to all names,  marks,  trade names,  trademarks and corporate  symbols and
logos incorporating "Citizens", and "CZN" (collectively,  the "Citizens Marks"),
all rights to which and the goodwill  represented thereby and pertaining thereto
are being  retained by Citizens.  Within four (4) months after the Closing Date,
Buyer shall cease using any  Citizens  Mark and shall remove from the Assets any
and all Citizens  Marks.  Thereafter,  Buyer shall not use, any Citizens Mark in
connection with the sale of any products or services or otherwise in the conduct
of its businesses.  In the event that Buyer breaches this Section 6.4,  Citizens
shall be entitled to specific  performance of this Section 6.4 and to injunctive
relief against  further  violations,  as well as any other remedies at law or in
equity available to Citizens.

         Section  6.5  Transition  Plan.  Within  thirty  (30)  days  after  the
execution date of this Agreement,  Buyer shall deliver to Citizens a list of its
proposed  representatives  to a  joint  transition  team,  which  shall  include
expertise  from  various  functional   specialties  associated  or  involved  in
providing  billing,  payroll and other support services provided to the Business
by any automated or manual  process using  facilities or employees  that are not
included  among  the  Assets or  Transferred  Employees.  Citizens  will add its
representatives  to such team within  fifteen (15) days after receipt of Buyer's
list.  Such  team  will be  responsible  for  preparing  as  soon as  reasonably
practicable  after the execution  date of this Agreement and at least sixty (60)
days prior to the Closing Date, and timely implementing, a transition plan which
will  identify  and  describe   substantially  all  of  the  various  transition
activities that the parties will cause to occur before and after the Closing and
any other transfer of control matters that any party reasonably  believes should
be  addressed in such  transition  plan.  Transition  services to be supplied by
Citizens  under  such  transition  plan  shall  be  priced  in  accordance  with
inter-company transfer practices consistent with those historically used for the
Business  for a  reasonable  transition  period not to exceed 120 days after the
Closing Date. If requested by any party, the terms and conditions governing such
transition  activities  will be more fully set forth in a  Transition  Agreement
reasonably  satisfactory  to the  parties.  Buyer and  Citizens  shall use their
commercially   reasonable  efforts  to  cause  their   Representatives  on  such
transition  team to  cooperate  in good  faith  and  take all  reasonable  steps
necessary to develop a mutually acceptable  transition plan by no later than 120
days after the date of this Agreement.

         Section 6.6  Substitute  Agreement.  In the event that  Sellers,  after
using their best commercially  reasonable effects,  are unable to obtain each of
the Consents  identified as items IV.F.1  through  IV.F.5 of Schedule 5.3 within
120 days  after the date of this  Agreement,  then  promptly  upon  notice  from
Sellers to Buyer,  Citizens  and Buyer will  enter into a  substitute  agreement
relating to the sale by Citizens of the Division Assets and the capital stock of
LGSN substantially in the form attached as Exhibit 6.6 hereto.

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<PAGE>

         Section  6.7  Schedule  of  Easements  and  Interests.  Within 180 days
following the date of this  Agreement  (but in no event later than 60 days prior
to the  Closing  Date),  Citizens  shall  deliver  to  Buyer a  schedule,  to be
identified  as  Schedule  6.7,  which sets  forth all  Easements  and  ownership
interests  in Real  Property  included in the Assets,  together  with such title
descriptions,  recorded and unrecorded  acts, and other  information as shall be
customary in the State of Louisiana  to identify and convey such  Easements  and
ownership  interests.  All  material  Easements  that,  as a condition  to their
assignment,  require Consent from the grantor thereof, shall be so designated on
Schedule 6.7.

         Section  6.8 Rhodes  Security.  If at any time  Sellers  shall have any
financial  obligation  or  liability  with  respect to the  Rhodes  Proceedings,
whether due to any Order of the LPSC or an appeal therefrom,  that is materially
more than that which is  secured by a bond,  other  surety  instrument  or other
collateral  (including  a  standby  letter of  credit)  previously  provided  by
Citizens (or if no such collateral has been previously provided), Citizens shall
promptly deliver to Buyer (or the appropriate  Governmental Body, if required) a
bond, other surety instrument or other collateral reasonably acceptable to Buyer
(or, if  agreement  is not reached as to the form or  substance  of such bond or
surety  instrument,  Citizens  shall deliver to Buyer a standby letter of credit
from Citibank,  N.A., or other financial  institution  reasonably  acceptable to
Buyer) fully  securing in all material  respects  the  unsecured  amount of such
obligation or liability.  If at any time any bond, other security  instrument or
other  collateral  held by Buyer in respect of the Rhodes  Proceedings  shall be
materially in excess of the amount of such obligation or liability,  Buyer shall
cooperate with Citizens in reducing the amount of such  collateral to the extent
of  such  excess,  including  the  release  of a  surety  instrument  previously
delivered to Buyer in exchange for a substitute  surety instrument in the amount
of such reduced obligation or liability.

         Section 6.9 Certain  Proceedings.  Sellers shall defend the Proceedings
described  in items II.2 and II.3 of Schedule  5.16 at their own  expense,  with
counsel of their own choosing. Sellers shall promptly and diligently pursue to a
settlement or prosecute to a final  conclusion the Proceeding  described in item
II.2 of  Schedule  5.16.  Prior  to  Closing,  Buyer  shall  have  the  right to
intervene,  at Buyer's expense, in the Proceedings listed in items II.2 and II.3
of  Schedule  5.16 to protect  its  interests  as the  prospective  buyer of the
Business,  including any resolution of such  Proceedings that Buyer believes may
adversely  affect  the  Business  or the  Assets  after the  Closing.  If either
Proceeding  listed in items II.2 and II.3 of Schedule 5.16  continues  after the
Closing, Buyer shall take over the prosecution of such Proceeding, provided that
Sellers may continue to participate in such Proceeding,  at Sellers' expense, to
protect their  interests as the former  operators of the Business with the right
to appeal either directly or through Buyer any decision adverse to Sellers.

         Section  6.10  Buyer's  Insurance.  Buyer  shall  deliver  at Closing a
schedule that identifies each material casualty and property insurance policy of
Buyer applicable to its business in Louisiana.

                                   ARTICLE VII
                              CONDITIONS PRECEDENT

         Section 7.1 Sellers' Conditions Precedent to Closing. The obligation of
Sellers to consummate the  transactions  contemplated by this Agreement shall be
subject to fulfillment at or prior to the Closing of the following conditions:

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<PAGE>

                  (a)  Representations  and  Warranties  True as of the  Closing
Date. Buyer's  representations  and warranties in this Agreement shall have been
true and correct in all material  respects as of the date of this  Agreement and
shall be true and correct in all material  respects as of the Closing Date as if
made  on the  Closing  Date,  subject  to  changes  expressly  contemplated  and
permitted by this Agreement,  except that representations and warranties made as
of, or in respect of, only a specified  date or period shall be true and correct
in all material respects as of, or in respect of, such date or period.

                  (b)  Compliance with Agreements. The covenants, agreements and
conditions required by this Agreement to be performed and complied with by Buyer
shall have been performed and complied with in all material respects prior to or
at the Closing Date.

                  (c)  Certificate. Buyer shall execute and deliver to Sellers a
certificate of an authorized  officer of Buyer,  dated the Closing Date, stating
that the conditions specified in Sections 7.1(a) and 7.1(b) have been satisfied.

                  (d)  Governmental   Approvals   and  Other  Consents;   Rhodes
Investigation.  The LPSC shall have issued an Order  approving the  transactions
contemplated  hereby,  the  terms  and  conditions  of such  Order  shall not be
materially  adverse to Citizens in the context of the transactions  contemplated
herein, and such Order shall have become a Final Order.  Sellers also shall have
obtained all other Consents of  Governmental  Bodies and other Persons which are
required in order to  consummate  the  transactions  contemplated  hereby and to
transfer the Assets to Buyer  without  incurring  material  liability  under any
Legal Requirement,  Order or Contract.  The Rhodes Investigation shall have been
resolved  pursuant  to an Order by the LPSC  (which  Order does not have to be a
Final Order).

                  (e)  HSR Act. The  applicable waiting period under the HSR Act
with respect to the transactions  contemplated hereby shall have expired or have
been terminated.

                  (f)  Injunctions.   On  the  Closing Date, there  shall be  no
Orders which operate, to restrain,  enjoin or otherwise prevent the consummation
of the transactions contemplated by this Agreement, and  no Proceeding to obtain
such an Order shall be pending or Threatened.

                  (g)  Opinion of Counsel.  On the Closing  Date,  Sellers shall
have  received  from  counsel  to Buyer an  opinion  to the  effect set forth in
Exhibit  7.1(g);   provided  that  such  opinion  may  contain  limitations  and
exceptions that are customary for the subject matter addressed thereby.

                  (h)  Documents.   Buyer   shall   have   delivered   all   the
certificates,  instruments,  contracts  and  other  documents  specified  to  be
delivered by it hereunder on or before the Closing Date,  including  pursuant to
Section  8.1,  and shall have taken such  actions as Sellers may have  requested
pursuant to Section 11.2.

         Section 7.2 Buyer's Conditions  Precedent to Closing. The obligation of
Buyer to consummate the  transactions  contemplated  by this Agreement  shall be
subject to fulfillment at or prior to the Closing of the following conditions:

                                       33
<PAGE>

                  (a)  Representations  and  Warranties  True as of the  Closing
Date.  Sellers'  representations and warranties in this Agreement (i) shall have
been true and correct in all material  respects as of the date of this Agreement
and (ii)  shall be true and  correct  as of the  Closing  Date as if made on the
Closing Date,  subject to changes  expressly  contemplated and permitted by this
Agreement,  except  (A)  in the  case  of  clauses  (i)  and  (ii)  above,  that
representations  and  warranties  made as of, or in respect of, only a specified
date or period shall be true and correct in all  material  respects as of, or in
respect of, such date or period and (B) in the case of clause (ii) above, to the
extent that any failure of such  representations  and  warranties to be true and
correct on account of events or conditions  arising after the execution  date of
this  Agreement,  without  regard  to any  qualification  as to  materiality  or
Material Adverse Effect set forth therein,  as of the Closing Date as if made on
the Closing Date, when taken in the aggregate, would not have a Material Adverse
Effect.

                  (b)  Compliance with Agreements. The covenants, agreements and
conditions  required by this  Agreement  to be performed  and  complied  with by
Sellers shall have been  performed  and complied  with in all material  respects
prior to or at the Closing Date.

                  (c)  Certificate. Sellers shall execute and deliver to Buyer a
certificate of authorized  officers of Sellers,  dated the Closing Date, stating
that the conditions specified in Sections 7.2(a) and 7.2(b) have been satisfied.

                  (d)  Governmental    Approvals  and  Other  Consents;   Rhodes
Investigation.  The LPSC shall have issued an Order  approving the  transactions
contemplated  hereby; such Order shall not contain any restrictions,  conditions
or other provisions (other than those in effect on the date of this Agreement or
requiring  that  the  regulatory  treatment  with  respect  to the  Business  in
existence as of the date of this  Agreement  applicable  to Sellers be continued
following  the  Closing)  that are  materially  adverse  to the  conduct  of the
Business as operated on the date of this Agreement or on the other operations of
Buyer in the State of Louisiana as operated on the date of this  Agreement;  the
other  terms and  conditions  of such Order shall not be  materially  adverse to
Buyer;  and such Order shall have  become a Final  Order.  For  purposes of this
Section  7.2(d),  Buyer's  failure  to  receive  from the  LPSC  any  regulatory
treatment  requested by Buyer in the parties' joint application to the LPSC that
is  different in any material  respect from the  regulatory  treatment in effect
with  respect  to the  Business  as of the date of this  Agreement  shall not be
considered  materially  adverse to the Business,  to Buyer's other operations in
the State of Louisiana or to Buyer. In addition, Sellers shall have obtained all
other  Consents of  Governmental  Bodies and other Persons which are required by
Sellers in order to consummate the transactions  contemplated  hereby other than
those the  failure  of which to  obtain  would  not  result  in Buyer  incurring
material  liability under any Legal Requirement,  Order or Contract.  The Rhodes
Investigation  shall have been resolved  pursuant to an Order of the LPSC (which
Order  does  not have to be a Final  Order).  If such  LPSC  Order  imposes  any
financial obligation or liability (or any administrative obligation or liability
that could  reasonably  result in a financial  obligation or liability) and such
obligation  or liability  shall not have been  discharged  or settled in full by
Citizens,  then Citizens  shall have  delivered to Buyer (or to the  appropriate
Governmental  Body,  if  required) a bond or other  surety  instrument  or other
collateral, in either case reasonably acceptable to Buyer (or, if such agreement
is not  reached,  a standby  letter of credit  from  Citibank  N.A.,  or another
financial  institution  reasonably  acceptable  to Buyer)  fully  securing  such
obligations or liability with respect to such Order.

                                       34
<PAGE>

                  (e)  HSR Act.  The applicable waiting period under the HSR Act
with respect to the transactions  contemplated hereby shall have expired or have
been terminated.

                  (f)  Injunctions.   On the  Closing Date,  there  shall  be no
Orders which operate to restrain,  enjoin or otherwise  prevent the consummation
of the transactions contemplated by this Agreement,  and no Proceeding to obtain
such an Order shall be pending or Threatened.

                  (g)  Opinion of Counsel.   On  the Closing Date,  Buyer  shall
have received  from L.  Russell  Mitten II, Vice  President and  General Counsel
of Citizens, an opinion in the form of Exhibit 7.2(g) hereto.

                  (h)  Documents.  Citizens and LGSN shall have delivered all of
the  certificates,  instruments,  contracts and other documents  specified to be
delivered by them hereunder,  including  pursuant to Section 8.1, and shall have
made  arrangements  reasonably  satisfactory  to  Buyer to  deliver  to Buyer as
promptly as practicable after the Closing such records  (including  customer and
employee records) necessary to own and operate the Business.

                  (i)  No Material Adverse Change.  Since the date  of execution
of this Agreement, no  Material Adverse  Effect  shall  have  occurred  that has
continuing  effect  as of the  Closing  Date,  it  being  agreed  that no  Order
resolving or other development in the Proceedings referenced in item I.5 or I.23
in Schedule 5.8 shall be  considered,  for  purposes of this  Section  7.2(i) or
Section 7.2(a) with respect to Sellers' representations and warranties set forth
in Section  5.6(c)(v) or Section  7.2(b) with  respect to Sellers'  covenants in
Section  6.1(a)(iii)  (as such  covenant  relates  to such  representations  and
warranties) to have a Material Adverse Effect.

                                  ARTICLE VIII
                                     CLOSING

         Section 8.1 Closing. The closing of the purchase and sale of the Assets
(the "Closing") will take place at the offices of Fleischman and Walsh,  L.L.P.,
1400 Sixteenth  Street,  N.W.,  Suite 600,  Washington,  D.C. 20036, on the last
calendar day of the month in which the conditions  specified in Sections  7.1(d)
and 7.2(d) have been satisfied, unless another time, date and place is agreed to
in writing  by the  parties.  The date of the  Closing  is  referred  to in this
Agreement as the  "Closing  Date." The  transactions  to be  consummated  on the
Closing  Date shall be deemed to have been  consummated  as of 11:59 p.m. on the
Closing Date. At the Closing the following events shall occur,  each event being
deemed to have occurred simultaneously with the other events.

                  (a)  Payment of Purchase  Price.  Buyer will pay to Sellers an
amount equal to the Estimated  Purchase Price by wire  transferring such amount,
in lawful money of the United States of America in immediately  available funds,
to such  account(s) as Sellers shall have  designated by notice to Buyer. If the
Closing Date is not a business day on which financial  institutions are open and
operating,  then  on  or  before  the  last  business  day  on  which  financial
institutions are open and operating before the Closing Date, Buyer shall deliver
the  Estimated  Purchase  Price to  Buyer's  lead bank (the  "Escrow  Agent") in
immediately  available  funds in U.S.  dollars,  and each party shall deliver in
escrow to the other party's designated outside legal counsel the instruments and
other documents to be delivered by such party at the Closing.  Upon receipt, the
Escrow Agent shall invest the Estimated  Purchase  Price in an  interest-bearing
account mutually agreed upon by Sellers and Buyer. At Closing, upon satisfaction

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<PAGE>

of the  conditions  therefor,  (i) Buyer  shall  sign and  deliver  to Sellers a
statement  which confirms that the Closing has occurred and which  instructs the
Escrow  Agent to  transfer  to  Sellers  the funds  representing  the  Estimated
Purchase  Price,  plus an amount  representing  the  interest  earned  after the
Closing  Date  until the date the  funds are  transferred,  to an  account  that
Sellers  shall  designate at least two (2)  business  days prior to the date the
funds are required to be  transferred  hereunder  and (ii) each party shall sign
and deliver to the other  party's  designated  outside legal counsel a statement
which confirms that Closing has occurred and which authorizes the release to the
other party of the  instruments  and other  documents  previously  delivered  in
escrow to such legal  counsel by such party.  The Escrow  Agent shall refund the
balance to Buyer.  If the Closing does not occur on the appointed  Closing Date,
the funds shall be returned to Buyer, together with all interest earned thereon,
and all escrowed  instruments  and documents  shall be returned to the party who
delivered  them. The fees and expenses of Escrow Agent shall be paid one-half by
Sellers and one-half by Buyer.

                  (b)  Other Related Documents.  To the extent  consistent  with
the other provisions of this Agreement,  Sellers (or the  appropriate  Affiliate
of Sellers)  and  Buyer  shall  execute  and deliver acts of  sale, conveyances,
certificates of title, bills of sale, assignment and assumption  instruments and
other  documents  reasonably  requested  by a party that are  necessary  for the
transfer of the Assets to Buyer, or the assumption of the Assumed Liabilities by
Buyer,  or  the  satisfaction  of any  applicable  Legal  Requirements  relating
thereto,  or which are customarily given in the State of Louisiana to accomplish
transfers of assets of the type  involved;  provided,  however,  that nothing in
this clause (b) shall obligate Sellers or any Affiliate of Sellers to execute or
deliver any document  that affects,  in a manner  adverse to Sellers or Sellers'
liability to Buyer, or to Buyer or to Buyer's liability to Sellers, as expressed
herein;  and provided also that all acts of sale with respect to parcels of Real
Property  owned in fee simple  shall be with all legal  warranties  by,  through
and/or under the Seller, but not otherwise,  with such warranty warranting title
to the property from the date such Seller acquired title to such property to the
Closing Date, subject to Permitted Encumbrances,  and with full substitution and
subrogation in and to all rights and actions of warranty that such Seller has or
may have against all preceding owners and venders.

                                   ARTICLE IX
                                   TERMINATION

         Section 9.1   Termination Rights.   This Agreement may be terminated in
its entirety at any time prior to the Closing:

                  (a)  By  the  mutual  written  agreement of Sellers and Buyer;

                  (b)  By Buyer, on the one hand, or Sellers, on the other hand,
in writing if there shall be in effect a  nonappealable  Order  prohibiting  the
transactions contemplated by this Agreement;

                  (c)  By Buyer, upon and during the continuation of a breach in
any material  respect of any of the  representations  and  warranties of Sellers
contained  herein or in the  failure by  Sellers  to  perform  and comply in any
material  respect with any of the  agreements and  obligations  required by this
Agreement to be performed or complied with by Sellers, provided that such breach

                                       36
<PAGE>

or failure is not cured by Sellers in a manner  reasonably  acceptable  to Buyer
within 45 days of  Sellers'  receipt of a written  notice from Buyer that such a
breach or failure has occurred;

                  (d)  By Sellers, upon and during the  continuation of a breach
in any material  respect of any of the  representations  and warranties of Buyer
contained  herein or the failure by Buyer to perform and comply in any  material
respect with any of the agreements and obligations required by this Agreement to
be performed or complied with by Buyer,  provided that such breach or failure is
not cured by Buyer in a manner  reasonably  acceptable to Sellers within 45 days
of  Buyer's  receipt  of a written  notice  from  Sellers  that such a breach or
failure has occurred;

                  (e)  By either  party  in writing  if the Closing  has not oc-
curred  within  twelve (12) months after  the date of this  Agreement;  provided
that if Closing  has not  occurred within such  period of time  because the con-
ditions precedent  to Closing  set forth in  Sections 7.1(d) and 7.2(d) have not
been  fulfilled, then  such period  of time  shall be  automatically extended to
August 1, 2001; or

                  (f)  By Sellers or Buyer, as appropriate, if any  Governmental
Body or other Person whose Consent is required to fulfill a condition  precedent
to Closing set forth in Section  7.1(d) (with  respect to Sellers) or in Section
7.2(d) (with  respect to Buyer) has  affirmatively  indicated  that such Consent
will not be given or will contain terms or  conditions  (or, if such Consent has
been obtained,  contains terms or conditions)  that, in the reasonable  business
judgment  of  Sellers  or Buyer,  as  appropriate,  will  result in a  condition
precedent to Closing set forth in Section 7.1(d) (with respect to Sellers) or in
Section 7.2(d) (with respect to Buyer) not being satisfied.

         Section 9.2   Limitation on  Right to Terminate: Effect of Termination.

                  (a)  A party  shall not be  allowed  to exercise  any right of
termination  pursuant to Section 9.1 if the event giving rise to the termination
right shall be due to the  willful  failure of such party  seeking to  terminate
this  Agreement  to  perform  or  observe  in any  material  respect  any of the
covenants or agreements hereof to be performed or observed by such party.

                  (b)  If this Agreement  is terminated as  permitted under Sec-
tion 9.1,  such  termination  shall be without  liability  of or to any party to
this Agreement, or any shareholder or Representative  of such  party;  provided,
however,  that if such termination  shall result from the willful failure of any
party to fulfill a material  condition to the  performance of any other party or
to perform a material  covenant of this Agreement or from a material and willful
breach by any party to this Agreement (it being  understood  that the failure to
cure a breach shall not, by itself, be a willful breach of this Agreement), then
such party shall  (subject to the  limitation  set forth in the last sentence of
this  Section  9.2(b)) be fully  liable  for any and all  damages  sustained  or
incurred by the other  party.  If prior to Closing  any party to this  Agreement
resorts to legal proceedings to enforce this Agreement,  the prevailing party in
such  proceedings  shall be entitled to recover all costs incurred by such party
including  reasonable  attorney's fees, in addition to any other relief to which
such party may be entitled;  provided,  however, and notwithstanding anything to
the contrary in this Agreement,  in no such event shall any party be entitled to
receive any consequential, exemplary, punitive, or speculative damages.

                                       37
<PAGE>

                                    ARTICLE X
                                EMPLOYEE MATTERS

         Section 10.1      Employment of Transferred Employees.

                  (a)  As of the Closing  Date, Buyer shall employ all employees
actively  employed by  Citizens  whose  primary  duties  relate to the  Business
("Active  Employees")  who as of the Closing  Date are  classified  on Citizens'
payroll  records as 070 employees  ("070 Active  Employees")  and who either are
actively at work or are on vacation, bereavement leave, short-term sick leave or
any other  authorized  leave of absence which is scheduled to last not more than
thirty (30)  business days after the Closing Date at the same wages or salary as
were in effect with Citizens  immediately  prior to the Closing Date. Buyer also
shall  employ any other 070 Active  Employee  who is on an  authorized  leave of
absence  scheduled  to last more than thirty (30) days where there is a legal or
contractual right to reinstatement,  as of the date, if any, within one (1) year
from the  Closing  Date,  on which  such  employee  returns to active  work,  in
compliance with Buyer's return to work policies and practices, at the same wages
or salary as were in effect with Citizens immediately prior to the Closing Date.
Any such 070 Active  Employee  employed  by Buyer as  provided  in this  Section
10.1(a) is referred to herein as a "Transferred Employee".

                  (b)  Prior to the  execution  date of this  Agreement, Sellers
have  delivered  to Buyer a list of the persons who would have been  Transferred
Employees had the Closing Date occurred on March 31, 2000, showing the following
information for each such person:  (i) the name of each employee;  (ii) the name
of his or her current  employer;  (iii) his or her current base pay; (iv) his or
her hire date, any rehire date (if  available) and years of service;  (v) his or
her then-current  position and job title;  (vi) whether such employee is subject
to a collective bargaining agreement or represented by a labor organization and,
if so,  the name of the union and  local,  (vii)  whether  such  employee  is on
authorized leave of absence  scheduled to last more than thirty (30) days with a
legal or  contractual  right to  reinstatement  and the  nature of such leave of
absence.  Sellers shall update such list as of the end of each calendar  quarter
occurring  between the execution  date hereof and the Closing Date, in each case
assuming  the Closing  Date had  occurred on such date,  and shall  deliver such
updated  lists to Buyer within ten (10) days after the end of each such calendar
quarter.

         Section 10.2      Intentionally Omitted.

         Section 10.3 Cessation of  Participation  in Sellers'  Plans;  Bonuses.
From  and  after  the  Closing  Date,  Transferred  Employees  shall  accrue  no
additional  benefits  under  any  employee  benefit  plan,  policy,  program  or
arrangement of Sellers or its Affiliates.  Citizens shall on a pro rata basis or
as  otherwise  determined  by Citizens in its sole  discretion,  pay any bonuses
declared by Sellers  after the Closing  Date that would have been payable to the
Transferred Employees had the Transferred Employees remained employed by Sellers
or its Affiliates throughout the calendar year in which the Closing Date occurs,
in accordance with the provisions of any policy,  plan,  practice or arrangement
of Sellers under which such bonus would have been paid.

         Section 10.4  Similarity of Benefit  Packages.  As of the Closing Date,
and except as  otherwise  expressly  provided  in this  Article  X, Buyer  shall
include each Transferred  Employee in a benefit package providing  benefits that
are identical to those provided by Buyer to its non-union gas utility  employees
(which  are  deemed by Buyer and  Seller  to be in the  aggregate  substantially

                                       38

<PAGE>

similar to those provided by Sellers to such Transferred  Employees).  Except as
otherwise  expressly  provided in this  Article X, Buyer shall treat all service
and compensation  credited to each such Transferred  Employee as if such service
and  compensation  had been  rendered to, and paid by, Buyer for all purposes of
eligibility  and vesting of benefits  but not for  purposes of earning  benefits
under Buyer's benefit plans, arrangements, and policies.

         Section 10.5      Defined Benefit Pension Plan.

                  (a)  At least fifteen days prior to the Closing  Date, Sellers
shall take any and all actions  necessary  to cease  benefit  accruals and fully
vest all  Transferred  Employees in their accrued  benefits  under the Citizens'
Pension Plan  ("Citizens'  Pension Plan").  Sellers shall retain all liabilities
and assets for pension  benefits accrued through the Closing Date by Transferred
Employees and retirees of the Business under Citizens' Pension Plan.

                  (b)  As of the Closing Date, Buyer shall cause all Transferred
Employees  who  are  otherwise  eligible  to be  included  in the  Atmos  Energy
Corporation Pension Account Plan (the "Buyer's Pension Plan").  Buyer shall take
all actions  necessary to cause  Buyer's  Pension Plan to recognize  the service
that all Transferred  Employees had under Citizens' Pension Plan for purposes of
such Employees'  eligibility to participate,  vesting,  attainment of retirement
dates,  eligibility for early retirement benefits under Buyer's Pension Plan and
entitlement to optional forms of payment.

         Section 10.6      401(k) Plan.

                  (a)  Buyer shall take all action  necessary to ensure that, as
of the  Closing  Date,  it  includes  Transferred  Employees  who are  otherwise
eligible in the Atmos Energy Corporation Employee Stock Ownership Plan and Trust
(the "Buyer's  401(k)  Plan").  Buyer shall take all actions  necessary to cause
Buyer's 401(k) Plan to recognize the service that the Transferred  Employees had
in Citizens'  401(k) Savings Plan (the "Citizens'  401(k) Plan") for purposes of
determining such Employees' eligibility to participate,  vesting,  attainment of
retirement  dates and, if applicable,  contribution  levels and  eligibility for
optional  forms of benefit  payments.  Buyer  shall cause the trustee of Buyer's
401(k) Plan to accept transfers and, to the extent legally  permissible,  direct
rollovers  from  Citizens'  401(k)  Plan  of  the  vested  account  balances  of
Transferred  Employees,  including  transfers of  outstanding  loan balances and
related promissory notes, subject to compliance with applicable law.

                  (b)  Citizens  shall vest  Transferred  Employees in their ac-
count balances under Citizens' 401(k) Plan as of the Closing Date.

                  (c)  Citizens  shall direct  the trustee  of Citizens'  401(k)
Plan to transfer to the trustee of Buyer's 401(k)  Plan in a  trustee-to-trustee
transfer  the account  balances of the  Transferred  Employees  under  Citizens'
401(k) Plan with such  transfer  to consist of cash and the shares of  Citizens'
stock  attributable  to the former LGS Savings and Investment  Plans credited to
the accounts of each  Transferred  Employee;  except that to the extent that the
account balances consist of outstanding loans, Citizens shall direct the trustee
of Citizens'  401(k) Plan also to transfer to the trustee of Buyer's 401(k) Plan
the promissory notes, payroll deduction  authorizations for installment payments
and related documents evidencing such loans.

                                       39
<PAGE>

                  (d)  After the transfer of assets and liabilities  pursuant to
this Section,  Buyer shall assume all liabilities for the benefits  payable with
respect to the assets  transferred  with  respect to the  Transferred  Employees
under Citizens'  401(k) Plan, and Citizens and Citizens'  401(k) Plan shall have
no liability for such benefits.

                  (e)  In connection with the transfer of assets and liabilities
under this Section, Citizens and Buyer shall cooperate in making all appropriate
filings,  and providing all  applicable  notices,  required by the IRC or ERISA.
Buyer shall deliver to Citizens a copy of Buyer's 401(k) Plan, and a copy of the
most recent  determination  letter from the IRS with respect to such Plan. Buyer
will submit Buyer's 401(k) Plan to the IRS within the current remedial amendment
period for a determination  that Buyer's Plan satisfies the  requirements of the
Internal Revenue Code of 1986, as amended by the Uniformed  Services  Employment
and  Reemployment  Acts of 1999,  the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997 and the Internal Revenue Services  Restructuring
and Reform Act of 1998.

         Section 10.7      Welfare Benefits.

                  (a)  Buyer shall take all action necessary and  appropriate to
ensure that, as of the Closing Date, Buyer includes the Transferred Employees to
the extent they are  otherwise  eligible in the employee  welfare  benefit plans
(including  retiree  medical  benefits)  applicable  to the other  non-union gas
utility  employees  of Buyer  (the  "Buyer  Welfare  Plans").  For  purposes  of
determining  eligibility to participate,  and  entitlement to benefits,  in each
Buyer Welfare Plan,  each  Transferred  Employee shall be credited with service,
determined  under the terms of the  corresponding  welfare  plans  maintained by
Citizens on the  Closing  Date  (hereinafter  referred  to  collectively  as the
"Citizens  Welfare  Plans").  Any  restrictions  on  coverage  for  pre-existing
conditions, actively at work requirements, waiting periods, and requirements for
evidence  of  insurability  (with  respect  to  life  insurance  and  long  term
disability  coverage) under the Buyer Welfare Plans shall be waived in the Buyer
Welfare  Plans for  Transferred  Employees  to the extent that such  Transferred
Employees are covered by Citizens'  Welfare Plans  immediately prior to Closing,
and Transferred Employees shall receive credit under the Buyer Welfare Plans for
co-payments,   payments  under  a  deductible   limit  made  by  them,  and  for
out-of-pocket  maximums  applicable to them during the plan year of the Citizens
Welfare Plan in which the Closing Date occurs.  As soon as practicable after the
Closing  Date,  Citizens  shall  deliver  to  Buyer  a list  of the  Transferred
Employees who had credited service under a Citizens Welfare Plan,  together with
each  such   Transferred   Employee's   service,   co-payment,   deductible  and
out-of-pocket payment amounts under each such plan.

                  (b)  Buyer  shall  provide  or  cause to be  provided  retiree
medical,  dental and life  insurance  benefits to each  retiree of the  Business
identified in Schedule 10.7 as updated as of the Closing Date (the  "Retirees"),
including  those  Retirees who were  retirees at the time Seller  purchased  LGS
("LGS  Retirees"),  under the same or better terms and  conditions as applied to
such Retirees  immediately prior to the Closing Date, and shall provide or cause
to be provided retiree medical  benefits to each Transferred  Employee under the
same  terms and  conditions  as  otherwise  applied  to  non-union  gas  utility
employees retiring from Buyer at the time such Transferred Employee retires from
the Buyer.  Citizens  shall  have no  obligation  or  liability,  contingent  or
otherwise,  to provide retiree medical, dental or life insurance benefits to any
Retiree or  Transferred  Employee on or after the Closing Date.  For purposes of
this Section  10.7, a  "grandfathered  employee"  is a  Transferred  Employee or
Retiree  who was at least age 55 with at least 10 years of service as defined in

                                       40
<PAGE>

the Citizens'  Pension Plan by December 31, 1997,  and who either  retired on or
after  August 1, 1997 and on or prior to December 31, 1997 or was an employee of
Citizens on December 31, 1997 and retires after December 31, 1997. Schedule 10.7
identifies  each  "grandfathered  employee."  Buyer agrees that, in the event it
ever terminates or materially adversely modifies,  those retiree medical, dental
and  life  insurance  benefits  covering  LGS  Retirees  and  Retirees  who  are
"grandfathered  employees",  their spouses and  dependents  from those in effect
immediately  prior to the  Closing  Date or in the event it ever  terminates  or
materially  adversely  modifies those retiree medical benefits provided to those
Transferred  Employees  who are  "grandfathered  employees",  their  spouses and
dependents  from  those  provided  by Buyer to  Buyer's  non-union  gas  utility
employees  immediately  prior to the Closing Date, Buyer will indemnify and hold
harmless  Sellers  Indemnitees  from any and all Loss in  connection  therewith.
Buyer's  obligations  under this Section  10.7(b) are subject to and conditioned
upon the truth and  accuracy of the  representation  and  warranty  contained in
Section 5.13(f),  and if such  representation  and warranty is determined at any
time not to be true and accurate,  Buyer shall have no further obligations under
this Section 10.7(b).

         Section 10.8 Flexible Spending Accounts.  As soon as possible following
the Closing Date,  Citizens shall transfer to Buyer's flexible benefits plan any
balances  standing  to the  credit  of  Transferred  Employees  under  Citizens'
flexible  benefits plan as of the Closing Date.  Citizens shall provide to Buyer
prior  to the  Closing  Date a list of  those  Transferred  Employees  who  have
participated in the health or dependent care reimbursement accounts of Citizens,
together with their  elections  made prior to the Closing Date,  with respect to
such account,  and balances  standing to their credit or debit as of the Closing
Date, and a statement of aggregate  expenses  reimbursed  from the plan for each
Transferred  Employee  during the plan year.  Buyer  agrees to  administer  such
accounts  (consistent with the terms of the flexible benefits plan applicable to
Buyer's  employees)  such  that  Transferred  Employees  will be  able to  defer
compensation  (in accordance with the terms of the applicable Buyer plan) and to
submit  claims  against  such  accounts  within  the time  period  permitted  by
applicable law.

         Section 10.9 Employment Agreements.  Buyer shall assume all obligations
of each employment  agreement to which Citizens or its Affiliates is a party and
which  covers any  Transferred  Employee  immediately  prior to the Closing Date
other  than any such  employment  agreement  that is  identified  as a  Retained
Liability in Part III of Schedule 5.13.

         Section 10.10  Vacation/Time  Off.  Citizens  shall pay to  Transferred
Employees  any  "banked"  vacation  credited  to them on or prior to the Closing
Date. On or after the Closing Date, each Transferred  Employee shall be eligible
to  participate  in the Buyer's  Time Off  Policy.  Buyer shall take all actions
necessary to cause Buyer's Time Off Policy to recognize  for all purposes  under
said Policy the service,  vacation  and accrued  sick time off that  Transferred
Employees  had with  Citizens.  Citizens  shall provide Buyer with a list of all
vacation,  service and sick time off taken by each Transferred  Employee and the
vacation,  service and sick time off entitlement for each  Transferred  Employee
for the year including the Closing Date.

         Section  10.11  Severance.  In the  event  that  Buyer  terminates  the
services of any  Transferred  Employee  within twelve (12) months  following the
Closing Date without cause, Buyer shall provide to any such Transferred Employee
severance or separation pay benefits in accordance  with Schedule  10.11.  Buyer
will reimburse Seller at Closing for one-half of any severance or separation pay

                                       41
<PAGE>

benefits  provided  by Citizens to any Active  Employee in  connection  with the
termination  of such employee with which Buyer concurs at any time from the date
of this Agreement through and including the Closing Date.

         Section  10.12 Health Care  Continuation  Coverage.  Citizens  shall be
responsible for compliance with all requirements under Section 4980B of the Code
and Section 601 et seq. of ERISA (collectively  "COBRA") with respect to any (a)
Transferred Employee and (b) family member of such Transferred Employee, in each
case who  becomes a  "qualified  beneficiary"  within  the  meaning  of  Section
4980B(g)(1) of the Code as a result of any "qualifying event" within the meaning
of Section 4980B(f)(3) of the Code which occurs on or prior to the Closing Date.
Citizens also shall remain responsible for compliance with COBRA with respect to
any (c) former employee of the Business or current  employee of the Business who
is not a Transferred  Employee and (d) family member of such former  employee or
current employee,  in each case who becomes a qualified  beneficiary as a result
of any  qualifying  event,  whether  such event occurs on, prior to or after the
Closing Date.  Citizens  covenants and agrees that Buyer shall have no liability
or  responsibility  for any of Citizens' COBRA  obligations as described in this
Section 10.12. Buyer shall be responsible for compliance with COBRA with respect
to any (a)  Transferred  Employee  and (b)  family  member  of such  Transferred
Employee,  in each case who becomes a qualified  beneficiary  as a result of any
qualifying  event which occurs after the Closing Date. In the event Seller shall
fail or refuse to provide  COBRA  coverage as described in this Section 10.12 to
the  Transferred  Employees  and  their  family  members  who  become  qualified
beneficiaries,  Seller  shall  immediately  so notify  Buyer of such  failure or
refusal  and  shall  provide  Buyer a list of (a) each  person  employed  in the
Business  within the 36 months  immediately  preceding  the Closing Date and (b)
each such  employee and all  dependents of such  employee,  in each case who had
coverage at any time during such period and the dates during which he or she had
coverage during the 36 months  immediately  preceding the Closing Date. For each
person who had  coverage  from any of Seller's  group health plans and lost such
coverage  at any time  during the 36 months  immediately  preceding  the Closing
Date,  Seller  shall  provide to Buyer a copy of the COBRA  notice and  election
provided to each at the time of his/her  qualifying event (as defined in IRC ss.
4980B(f)),  copies of procedures used to notify each such qualified  beneficiary
of the qualifying event, evidence of any election of COBRA coverage, evidence of
the reason for termination of each such COBRA coverage, evidence of any election
not to take COBRA, and evidence of COBRA premiums paid and any delinquency.  The
foregoing  sentence  shall apply only if Seller  shall fail or refuse to provide
coverage to all  Transferred  Employees and family members who become  qualified
beneficiaries,  and shall not apply  simply  because any one or more  individual
Transferred  Employees and/or family members who become qualified  beneficiaries
may not be provided with the appropriate COBRA coverage.

                                   ARTICLE XI
                                   TAX MATTERS

         Section 11.1  Purchase  Price  Allocation.  Prior to the Closing  Date,
Buyer  and  Sellers  shall  use  their  good  faith  efforts  to agree  upon the
allocation (the  "Allocation") of the Purchase Price for the Division Assets and
the  Purchase  Price for the LGSN  Assets,  the  Assumed  Liabilities  and other
relevant items  (including,  for example,  adjustments to the Purchase Price) to
the individual  assets or classes of Citizens or LGSN,  respectively,  of assets
within the meaning of Section  1060 of the IRC.  If Buyer and  Sellers  agree to
such Allocation prior to Closing,  Buyer and Sellers covenant and agree that (i)
the values  assigned to the assets by the  parties'  mutual  agreement  shall be

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<PAGE>

conclusive  and final for all purposes,  and (ii) neither Buyer nor Sellers will
take any position before any  Governmental  Body or in any Proceeding that is in
any way inconsistent  with such Allocation.  Notwithstanding  the foregoing,  if
Buyer and Sellers cannot agree to an Allocation,  Buyer and Sellers covenant and
agree to file, and to cause their respective Affiliates to file, all Tax Returns
and schedules  thereto  (including,  for example,  amended  returns,  claims for
refund,  and those returns and forms  required under Section 1060 of the IRC and
any Treasury  regulations  promulgated  thereunder)  consistent their respective
good faith  Allocations,  unless  otherwise  required because of a change in any
Legal Requirement.

         Section 11.2  Cooperation  with Respect to  Like-Kind  Exchange.  Buyer
agrees that each Seller may, at its election  prior to the Closing Date,  direct
that all or a  portion  of the  Purchase  Price  apportioned  to its  Assets  be
delivered  to a  "qualified  intermediary"  (as defined in  Treasury  Regulation
Section  1.1031(k) - 1(g)(4)) as to enable its  relinquishment  of its Assets to
qualify as part of a like-kind  exchange of property  covered by Section 1031 of
the IRC, so long as the portion of the Purchase Price delivered to the qualified
intermediary in exchange for such Assets is consistent  with Buyer's  Allocation
under  Section 11.1 with respect to such  Assets.  If a Seller so elects,  Buyer
shall  cooperate  with such Seller (at no cost to Buyer) in connection  with its
efforts to effect such  like-kind  exchange,  which  cooperation  shall  include
taking such actions as such Seller reasonably  requests (but without Buyer being
required  to incur any  out-of-pocket  costs in the course  thereof) in order to
enable such Seller to qualify such  transfer as part of a like-kind  exchange of
property  covered by Section 1031 of the IRC (including any actions  required to
facilitate  the use of a "qualified  intermediary"),  and Buyer agrees that such
Seller may assign  all or part of its  rights  and  delegate  all or part of its
obligations under this Agreement to a Person acting as a qualified  intermediary
to  qualify  the  transfer  of the  Assets as part of a  like-kind  exchange  of
property  covered by Section 1031 of the IRC,  provided,  however,  that no such
assignment or delegation shall relieve Sellers of any of their obligations under
this  Agreement nor shall legal title to any of the Assets  transfer  other than
directly  from a Seller to Buyer.  Buyer and Sellers  agree in good faith to use
reasonable efforts to coordinate the transactions contemplated by this Agreement
with any other  transactions  engaged in by either  Buyer or Sellers in a manner
consistent  with this Section 11.2;  provided that such efforts are not required
to  include  an  unreasonable  delay  in the  consummation  of the  transactions
contemplated by this Agreement.

         Section 11.3 Transaction  Taxes. Buyer and Citizens shall each bear and
be responsible for paying  one-half of any sales,  use,  transfer,  documentary,
registration  (other  than any  annual  registration  fees) , and other  similar
transfer type Taxes (including related penalties, additions to Tax and interest)
imposed  by any  Governmental  Body  with  respect  to the  transfer  of  Assets
(including  the Real  Property) to Buyer  ("Transaction  Taxes"),  regardless of
whether  the ax  authority  seeks to collect  such Taxes from  Sellers or Buyer.
Citizens shall prepare all Tax filings related to any  Transaction  Taxes (other
than  with  respect  to Real  Property  and motor  vehicle  title  transfer  and
registration,  which  shall be  prepared  by Buyer).  Twenty  (20) days prior to
making such filings,  the filing party shall provide to the nonfiling  party the
filing  party's  workpapers  and proposed Tax Return for the  nonfiling  party's
review and  approval.  The  nonfiling  party shall  provide to the filing  party
approval (which  approval shall not be unreasonably  withheld) or disapproval of
such  workpapers and proposed Tax Return within ten (10) days of delivery by the
filing  party.  If the  filing  and  nonfiling  party are unable to agree on the
workpapers and proposed Tax Return, Buyer and Citizens shall engage a nationally
recognized  independent accounting firm mutually satisfactory to both to prepare
the workpapers and proposed Tax Return,  which  preparation shall be binding and

                                       43
<PAGE>

conclusive on the Buyer and Sellers without further appeal therefrom,  and which
fees and expenses  shall be borne equally by the Buyer and Citizens.  The filing
party shall be responsible for (i) administering the payment of such Transaction
Taxes,  (ii) defending or pursuing any Proceedings  related  thereto,  and (iii)
paying any expenses  related  thereto,  in each case subject to reimbursement by
the nonfiling party for one-half of such payments and expenses. Each party shall
give prompt written notice to the other of any proposed adjustment or assessment
of any Transaction Taxes with respect to the transaction,  or of any examination
of said  transaction  in a sales,  use,  transfer or similar  Tax audit.  In any
Proceedings,  whether  formal or informal,  the filing  party shall  control the
defense of such Proceedings, but shall permit the nonfiling party to participate
in the  defense of such  proceeding  and shall take all  actions and execute all
documents required to allow such participation.  Neither party shall negotiate a
settlement  or  compromise  of any  Transaction  Taxes without the prior written
consent of the other, which consent shall not be unreasonably withheld.

         Section 11.4 Clearance Certificates. Sellers shall provide Buyer with a
Tax clearance  certificate or similar  document(s)  which may be required by any
state taxing  authority in order to relieve Buyer of any  obligation to withhold
any portion of the Purchase Price.

                                   ARTICLE XII
                              ENVIRONMENTAL MATTERS

         Section 12.1      Environmental Due Diligence.

                  (a)  Right  to  Conduct   Environmental  Due  Diligence.   All
environmental due diligence  (including  employee interviews and sampling of any
media or  wastewater)  conducted by Buyer shall be conducted in accordance  with
this Section 12.1. All activities of Buyer regarding environmental due diligence
shall be conducted to minimize any  inconvenience  or interruption of the normal
use and enjoyment of the Business and the Assets.

                  (b)  Delivery of Environmental Reports. Buyer shall provide to
Sellers or to Sellers'  counsel,  copies of all reports,  assessments  and other
information composed or compiled by Buyer or Buyer's environmental consultant(s)
promptly  following  Buyer's  receipt  thereof.   Buyer  shall  treat  all  such
information  delivered  to,  or  composed  or  compiled  by,  Buyer  or  Buyer's
environmental  consultant(s)  as  Environmental  Data  in  accordance  with  the
procedures of Section 12.1(c).

                  (c)  Confidentiality of  Environmental Data.   All audits, re-
ports and studies delivered to or prepared by Buyer  and any  other  information
collected  and  generated  as a result of Buyer's  environmental  due  diligence
("Environmental  Data")  will be  subject  to the  terms and  conditions  of the
Confidentiality  Agreement,  except  as  otherwise  expressly  provided  in this
Section  12.1.  Prior  to the  Closing,  neither  Buyer  nor  its  environmental
consultant(s) shall disclose or release any Environmental Data without the prior
written  consent  of Sellers  and all such  information  shall be kept  strictly
confidential.  Buyer  expressly  agrees  that  until  the  Closing,  it will not
distribute  the  Environmental  Data to any third party without  Sellers'  prior
written consent. After the Closing, Buyer agrees that it will not distribute the
Environmental  Data to any third party without  Citizens' prior written consent,
except as required by applicable Legal  Requirements or by express provisions of
Buyer's corporate  compliance  program if Sellers are provided written notice at
least ten (10) days prior to such distribution,  provided,  however,  that after
the Closing Date, Buyer may distribute the  Environmental  Data to any potential

                                       44
<PAGE>

purchaser of any of the Assets but only after first notifying Sellers.

                  (d)  Environmental  Consultants.  Buyer may retain one or more
outside  environmental  consultants to assist in its environmental due diligence
concerning the Assets and shall notify Sellers of the  environmental  consultant
or consultants Buyer intends to retain. Thereafter,  Sellers shall have five (5)
days after receipt of such  notification  to notify Buyer in writing of Sellers'
objection  (which  must be for good cause) and  substantiate  the basis for that
objection.  If  Sellers  do not  object  for good  cause and  substantiate  that
objection  within  said  five (5) day  period,  Sellers  shall be deemed to have
consented to Buyer's selection.

                  (e)  Phase I Reviews.  Buyer may conduct, at its sole expense,
Phase  I  environmental  assessment  activities  with  respect  to  the  Assets,
including reviewing existing environmental reports, correspondence,  permits and
related  materials  regarding the Assets and all other Phase I activities as set
forth in the ASTM protocol regarding Phase I assessments.  Any permitted Phase I
environmental  assessment activities shall not include any sampling or intrusive
testing. All Phase I environmental  assessment  activities shall be conducted in
accordance  with  ASTM  standards  regarding  Phase I  assessments  and shall be
completed  within sixty (60) days after the date of execution of this Agreement.
Upon  completion of such Phase I assessment  activities,  Buyer's  environmental
consultant  shall  prepare  and deliver to Buyer a written  report with  respect
thereto. All reports from Buyer's  environmental  consultants shall be delivered
to Sellers or Sellers'  counsel  within  ninety (90) days after the execution of
this  Agreement.  Buyer shall notify  Sellers in writing within ninety (90) days
after the date of execution of this Agreement if it has concluded,  based on its
environmental due diligence,  that the condition to Closing set forth in Section
7.2(a) will not be satisfied  due to the  discovery of such  potential  material
Environmental  Liabilities  unless  environmental  remediation of such potential
liabilities  occurs prior to Closing.  Buyer's failure to provide such notice by
such date shall preclude Buyer from subsequently declaring that the condition to
Closing set forth in Section 7.2(a) has not been satisfied  based on the results
of  Buyer's   environmental   due   diligence,   but  shall  not   preclude  the
indemnification  or other  rights  of  Buyer  from  Sellers  in  respect  of the
Environmental Liabilities discovered by Buyer.

                  (f)  Phase II Reviews. Prior to Closing, Buyer may not conduct
any Phase II  environmental  assessment  activities  with  respect to the Assets
(including  the taking  and  analysis  of soil,  surface  water and  groundwater
samples,  testing  of  buildings,   drilling  wells,  taking  soil  borings  and
excavating)  without the prior written consent of Sellers,  which consent may be
withheld, conditioned or delayed by Sellers in their sole discretion.

                  (g)  Asbestos.   Buyer may conduct,  at its  sole expense, as-
bestos survey activities with respect to the Assets, including reviewing  exist-
ing reports,  correspondence and  other related documents, inspecting individual
sites and collecting samples of suspected asbestos-containing materials.  These
asbestos survey  activities  shall be completed within sixty (60) days after the
date of execution of this  Agreement and shall be conducted in  accordance  with
the provisions of Section 12.1(e).

                  (h)  Additional Due Diligence.  Notwithstanding the foregoing,
if prior to  Closing  Citizens  or LGSN  receives  notice of any  Proceeding  or
Threatened  Proceeding arising under  Environmental Laws or if Sellers otherwise
acquire  Knowledge  that is  reasonably  likely to require a change to  Schedule

                                       45
<PAGE>

5.14, Sellers promptly shall notify Buyer of the same and Buyer may request that
Sellers  authorize  Buyer  to  conduct  specific  additional  environmental  due
diligence  measures  if and to the extent  that such  measures  are  required to
determine the extent of any potential  Environmental Liability relating thereto.
Such authorization shall not be unreasonably withheld, conditioned or delayed by
Sellers.  Any such additional  environmental due diligence shall be conducted at
Buyer's sole expense.

                  (i)  Indemnity  for Due  Diligence  Activities.  Buyer  hereby
agrees to indemnify and hold harmless  Sellers,  Sellers'  Affiliates  and their
respective officers,  directors,  employees, agents, successors and assigns from
and  against  any and all Losses  with  respect to  personal  injury or property
damage  arising  out of or in  connection  with any  site  visit by Buyer or its
environmental  consultant(s)  and resulting  from an act or omission of Buyer or
its environmental consultant(s) in the course of its environmental inspections.

                                  ARTICLE XIII
                                 INDEMNIFICATION

         Section 13.1  Indemnification  by Sellers.  From and after  Closing and
subject to the other provisions of this Article XIII,  Sellers shall jointly and
severally  indemnify and hold harmless Buyer, its  Representatives,  Affiliates,
successors and permitted assigns  (collectively,  the "Buyer  Indemnitees") from
and against any and all Losses arising out of or resulting from:

                  (a)  any  representations and warranties made by Sellers in or
pursuant to this Agreement not being true and correct when made or when required
by this Agreement to be true and correct, or any breach or default by Sellers in
the  performance  of their  covenants,  agreements,  or  obligations  under this
Agreement required to be performed prior to Closing;

                  (b)  any breach or default  by  Sellers in the performance  of
their covenants,  agreements, or obligations under this Agreement or any Related
Document delivered pursuant hereto required to be performed on or after Closing;

                  (c)  any Retained Liabilities; and

                  (d)  the Rhodes Proceedings.

         Section  13.2  Indemnification  by Buyer.  From and after  Closing  and
subject to the other  provisions of this Article XIII, Buyer shall indemnify and
hold  harmless  Sellers,  their  Representatives,   Affiliates,  successors  and
permitted assigns (collectively, the "Sellers Indemnitees") from and against any
and all Losses arising out of or resulting from:

                  (a)  any  representations  and warranties  made by Buyer in or
pursuant to this Agreement not being true and correct when made or when required
by this  Agreement to be true and correct,  or any breach or default by Buyer in
the  performance  of  its  covenants,  agreements,  or  obligations  under  this
Agreement required to be performed prior to Closing;

                                       46
<PAGE>

                  (b)  any breach or default by Buyer in the performance  of its
covenants,  agreements,  or  obligations  under this  Agreement  or any  Related
Document delivered pursuant hereto required to be performed on or after Closing;
and

                  (c)  any  Assumed  Liabilities  and,  except  as  to  Retained
Liabilities  and except to the extent Buyer is entitled  (without  regard to the
time or amount  limitations  provided in this Article  XIII) to  indemnification
under Section 13.1 with respect thereto, the operation of the Business after the
Closing Date.

         Section 13.3 Limitations on Liability.  Notwithstanding anything to the
contrary  in this  Agreement,  the  liability  of Sellers  and Buyer  under this
Agreement and any documents  delivered in  connection  herewith or  contemplated
hereby shall be limited as follows:

                  (a)  IN  NO  EVENT  SHALL  SELLERS  BE  LIABLE  TO  THE  BUYER
INDEMNITEES,   OR  BUYER  BE  LIABLE  TO  THE  SELLERS   INDEMNITEES,   FOR  ANY
CONSEQUENTIAL  DAMAGES (OTHER THAN  FORESEEABLE  DAMAGES  INCLUDING  FORESEEABLE
DIMINUTION IN VALUE AND  FORESEEABLE  LOST  PROFITS),  EXEMPLARY,  PUNITIVE,  OR
SPECULATIVE DAMAGES;  provided,  however, that if the Indemnified Party (as such
term is  hereafter  defined in Section  13.4(a)) is held liable to a third party
for any of such  damages and the  Indemnifying  Party (as such term is hereafter
defined in Section 13.4(a)), is obligated to indemnify the Indemnified Party for
the matter that gave rise to such damages,  then the Indemnifying Party shall be
liable for, and obligated to reimburse the Indemnified Party for, such damages.

                  (b)  Except as  provided below,  the representations,  warran-
ties, covenants and agreements of Sellers and Buyer set forth  in this Agreement
shall survive the Closing, and  all  representations, warranties, covenants  and
agreements of Sellers and Buyer under this Agreement and the indemnities granted
by Sellers  in Section  13.1 and by Buyer in  Section  13.2  (except  those that
survive  without  time  limit)  shall  terminate  at 5:00  p.m.,  local  time in
Stamford,  Connecticut, on the appropriate anniversary of the Closing Date or on
the  expiration  of the  applicable  statute of  limitations  (or  extensions or
waivers  thereof),  as the  case may be,  as set  forth  below  in this  Section
13.3(b); provided, however, that, except in the case of indemnities that survive
without  time limit,  such  indemnities  shall  survive with respect only to the
specific matters that are the subject of a proper Claim Notice delivered in good
faith in compliance with the requirements of this Section 13.3 until the earlier
to occur of (A) the date on which a final nonappealable resolution of the matter
described  in such Claim  Notice  has been  reached or (B) the date on which the
matter  described in such Claim Notice has otherwise  reached final  resolution,
provided  that in each  case the  Indemnifying  Party has  fully  satisfied  any
indemnity  obligation  arising as a result of such resolution of such matter. In
no event,  except in the case of  indemnities  that survive  without time limit,
shall any amounts be  recovered  from Sellers  under  Section 13.1 or from Buyer
under Section 13.2, respectively,  or otherwise for any matter for which a Claim
Notice is not  delivered  to Sellers or Buyer,  as the case may be, prior to the
close of business on the applicable date set forth below.

                           (1)   All  representations and  warranties of Sellers
and Buyer  contained in or made  pursuant to this Agreement,  and all covenants,
agreements or  obligations of Sellers and Buyer contained  in or  made  pursuant
to  this  Agreement  that  are  required  to be performed prior to Closing,  and
the  related  indemnity  obligations of  Buyer and Sellers contained in Sections
13.1(a) and 13.2(a),  respectively,  shall survive Closing until and  shall ter-

                                       47
<PAGE>

minate on the second anniversary of the Closing Date.

                           (2)   The indemnity  obligations of Sellers contained
in Section 13.1(b) and 13.1(c) with respect to (i) Taxes shall survive until the
expiration  of the applicable  statute of limitations (or extensions or  waivers
thereof); (ii) Environmental  Liabilities shall survive until the fifth anniver-
sary  of the  Closing  Date  except with respect to  Liabilities  arising out of
or  relating  to  non-compliance  with a permit or authorization  requirement of
any Environmental  Law, which shall only survive  until  the second  anniversary
of the Closing  Date;  (iii) the matters described in Sections 2.4(a), (c), (d),
(e) (but  only  with  respect  to  Proceedings  pending or Threatened as of  the
Closing Date),  and (g) shall survive without  limitation  as to time;  (iv) the
other  matters  described  in Section 13.1(b) shall survive  without  limitation
as to time except for any covenant as to title herein  (the survival of which is
addressed  exclusively in clause (vii) of this Section 13.3(b)(2)) and except in
the event any specific post-Closing covenant, agreement or obligation of Sellers
under this  Agreement is expressly limited as to time, in which event such cove-
nant,  agreement  or  obligation  shall survive  until  the  expiration  of such
specified  time  period;  (v)  Retained Liabilities  not otherwise addressed  in
clauses  (i),  (ii) and (iii) of this Section  13.3(b)(2))  shall  survive until
the third  anniversary of the Closing Date; (vi) any  warranty of title included
in the acts of sale with respect to parcels of Real Property owned in fee simple
delivered  pursuant  to Section 8.1(b)  shall  survive  without time limit;  and
(vii) any  covenant  in this Agreement as to title shall only  survive until the
second  anniversary  of the Closing Date.

                           (3)   The indemnity  obligations of Sellers contained
in Section 13.1(d) shall survive for an unlimited period of time. (The indemnity
obligations of Sellers described in this Section 13.3(b)(3)  together  with  the
indemnity  obligations  of Sellers  described in clauses  (i),  (iii)  and  (iv)
of  Section  13.3(b)(2), and  exclusive  of the indemnity obligations of Sellers
described in clauses (ii), (v), (vi), and (vii) of  Section 13.3(b)(2), are col-
lectively  referred  to  hereinafter as  the "Specified Indemnity Obligations.")

                           (4)   The  indemnity  obligations  of Buyer contained
in  Sections  13.2(b) and (c) shall  survive for  an unlimited  period  of time,
except  in the  event  any  post-Closing  covenant,  agreement  or obligation of
Buyer under this Agreement is expressly limited as to time, in which event  such
covenant,  agreement  or obligation  shall survive until the expiration  of such
specified time period.

                           (5)   Notwithstanding   the  foregoing,  the  parties
acknowledge  that  Buyer shall be  entitled to  indemnification  by  Sellers for
Losses  incurred  by Buyer in  respect of any intentional  misrepresentation  or
omission or fraud by Sellers without  any time limitation  (it being  understood
that the failure to cure a breach shall not, by itself, be an intentional act or
omission) (hereinafter referred to as "Sellers' Fraud").

                  (c)  Notwithstanding   anything  to  the   contrary  in   this
Agreement,  Sellers shall not be required to indemnify the Buyer Indemnitees, or
be otherwise liable to the Buyer  Indemnitees  after the Closing with respect to
this Agreement,  the transactions  provided for herein or contemplated hereby or
Sellers'  ownership  or use of the Assets or  operation  of the  Business  on or
before the Closing Date for any Losses (other than Losses  incurred by the Buyer
Indemnitees  in respect of Specified  Indemnity  Obligations  or Sellers'  Fraud
(hereinafter referred to as "First-Dollar  Losses")) until the Buyer Indemnitees

                                       48
<PAGE>

have  suffered  Losses  (determined  after giving  effect to the  provisions  of
Section  13.3(f)  and other than  First-Dollar  Losses)  that are in excess of a
deductible in an amount equal to  $3,000,000,  after which point Sellers will be
obligated  only to  indemnify  the Buyer  Indemnitees  from and against  further
Losses in excess of such deductible.  Buyer shall be entitled to indemnification
for all  First-Dollar  Losses  without  regard to the  foregoing  limitation  on
Sellers' indemnification liability.

                  (d)   Notwithstanding   anything  to  the   contrary  in  this
Agreement,  Sellers shall not be required to indemnify the Buyer Indemnitees, or
be otherwise liable to the Buyer Indemnitees,  after the Closing with respect to
this Agreement,  the transactions  provided for herein or contemplated hereby or
Sellers'  ownership  or use of the Assets or  operation  of the  Business  on or
before the Closing Date for any Losses (other than First-Dollar Losses) that are
in  excess  of an  amount  equal to  $35,000,000.  Buyer  shall be  entitled  to
indemnification  for all  First-Dollar  Losses  without  regard to the foregoing
limitation on Sellers' indemnification liability.

                  (e)  No right to indemnification under this Article XIII shall
be limited by reason of any investigation  conducted by any party at any time or
by the decision by a party to complete the Closing.

                  (f)  Buyer agrees to use  its commercially reasonable  efforts
to give written notice to the appropriate insurance carrier(s) of any occurrence
or  circumstances which, in the judgment  of Buyer consistent with its customary
risk management practices, appear likely to be covered by one or more  insurance
policies of Buyer. Any such notice shall be given in good faith by Buyer without
regard to the possibility of  indemnification  payments by Sellers under Section
13.1,  and shall be processed by Buyer in good faith and in a manner  consistent
with its risk  management  practices  involving  claims for which no third party
contractual   indemnification   is   available.   Sellers  agree  to  use  their
commercially  reasonable  efforts  to give  written  notice  to the  appropriate
insurance  carrier(s) of any occurrences or circumstances which, in the judgment
of Sellers  consistent with their customary risk  management  practices,  appear
likely to be covered by one or more  insurance  policies of  Sellers;  and Buyer
agrees to cooperate  with Sellers in  connection  with  Sellers'  investigation,
submission,  prosecution,  defense  and  settlement  of  claims  under  Sellers'
insurance policies,  at Sellers' expense. Any such notice shall be given in good
faith  by  Sellers  without  regard  to the  possibility  of the  limitation  on
indemnification  payments from Sellers under Sections 13(b) or (c), and shall be
processed  by  Sellers in good  faith and in a manner  consistent  with its risk
management  practices  involving  claims  for  which  no  such  limitations  are
available.  If at any time subsequent to the receipt by a Buyer Indemnitee of an
indemnity  payment  from a  Seller  hereunder,  such  Buyer  Indemnitee  (or any
Affiliate  thereof)  receives any recovery,  settlement or other similar payment
with  respect to the Loss for which it receives  such  indemnity  payment,  such
Buyer  Indemnitee shall promptly pay to Sellers an amount equal to the amount of
such recovery,  less any  out-of-pocket  costs incurred by such Buyer Indemnitee
(or  its  Affiliates)  in  connection  with  claim   preparation,   pursuit  and
settlement;  provided  that if such net  recovery  reduces  the amount of Losses
actually  incurred by the Buyer  Indemnitees to an amount that is then below the
deductible  amount  set  forth  in  Section  13.3(c),  then the  amount  of such
reduction  below such  deductible  amount shall again be available for Losses in
accordance with Section 13.3(c).

                  (g)  Any   limitation  on  indemnification  provided  in  this
Section 13.3 that is expressly applicable to any subsection or clause of Section

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<PAGE>

13.1 or 13.2 shall not be applicable to any indemnification as may be applicable
under  any  other subsection  or clause  of  Section  13.1 or 13.2 to which such
limitation  is not also expressly applicable.

                  (h)  Notwithstanding  any  language  contained  in any Related
Document  (including deeds and other conveyance  documents  relating to the Real
Property),  the  representations  and  warranties  of Sellers  set forth in this
Agreement   will  not  be  merged  into  any  such  Related   Document  and  the
indemnification obligations of Sellers, and the limitations on such obligations,
set forth in this Agreement  shall  control.  No provision set forth in any such
Related  Document  shall be  deemed  to  enlarge,  alter or amend  the  terms or
provisions of this Agreement.

                  (i)  For  the   purposes  of  this   Article   XIII,   once  a
determination  has  been  made  that  a  specific  breach  of a  representation,
warranty, covenant or agreement has occurred for purposes of the indemnification
obligation  hereunder,  the  calculation of Losses with respect to such specific
breach shall be made without  regard to any  limitation or  qualification  as to
materially set forth in such representation, warranty, covenant or agreement.

                  (j)  Notwithstanding   anything   to  the   contrary  in  this
Agreement,  Sellers shall not be required to indemnify the Buyer  Indemnitees or
otherwise be liable to Buyer in respect of the Proceedings  described in Section
2.4(e) for any Losses of any Buyer  Indemnitee  arising out of or resulting from
any regulatory  action  affecting the regulatory  treatment or  requirements  of
Buyer with respect to the Business after the Closing Date except to the extent a
Buyer  Indemnitee  is required  by a  Governmental  Body to refund or  otherwise
credit  directly to customers  revenues  collected by Sellers on or prior to the
Closing Date, together with interest or any other amounts identified therewith.

         Section 13.4      Claims Procedure.

                  (a)  All  claims  for  indemnification  under  Section 13.1 or
13.2, or  any other provision of  this  Agreement except as otherwise  expressly
provided in this Agreement, shall  be  asserted  and resolved  pursuant to  this
Article XIII.  Any Person claiming indemnification hereunder is  referred to  as
the "Indemnified Party"  and any  Person  against  whom such claims are asserted
hereunder  is referred to as the "Indemnifying Party."

                  (b)  Except  in  the case  of the Rhodes Proceedings,  in  the
event that  any  Losses  are asserted  against or sought to be collected from an
Indemnified Party by a third party, said Indemnified Party shall with reasonable
promptness  provide to the Indemnifying  Party a Claim Notice. The obligation of
the  Indemnifying  Party to indemnify the Indemnified  Party with respect to any
such Losses shall be reduced to the extent the Indemnifying  Party is damaged by
the failure of the  Indemnified  Party to provide such  notice.  Any other claim
hereunder shall require the provision of a Claim Notice.  The Indemnifying Party
shall have 30 days from the  personal  delivery  or receipt of the Claim  Notice
(the  "Notice  Period")  to notify the  Indemnified  Party (i) whether or not it
disputes  the  liability  of the  Indemnifying  Party to the  Indemnified  Party
hereunder with respect to such Losses and/or (ii) whether or not it desires,  at
the sole cost and expense of the  Indemnifying  Party, to defend the Indemnified
Party against such Losses;  provided,  however,  that any  Indemnified  Party is
hereby  authorized  prior to and during the  Notice  Period to file any  motion,
answer or other  pleading that it shall deem necessary or appropriate to protect

                                       50
<PAGE>

its  interests  or those of the  Indemnifying  Party (and of which it shall have
given  notice and  opportunity  to comment  to the  Indemnifying  Party) and not
prejudicial to the Indemnifying  Party. In the event that the Indemnifying Party
notifies  the  Indemnified  Party  within the Notice  Period  that it desires to
defend the Indemnified Party against such Losses,  the Indemnifying  Party shall
defend all appropriate Proceedings,  and with counsel of its own choosing, which
Proceedings shall be promptly settled or prosecuted by it to a final conclusion;
provided  that no such  Proceeding  may be  settled  without  the prior  written
consent  of the  Indemnified  Party  unless a full  release is  obtained  by the
Indemnified  Party,  all  amounts  payable  pursuant  thereto  are  paid  by the
Indemnifying  Party and the settlement does not adversely affect the business or
assets of the Indemnified  Party,  including the Business or the Assets.  If the
Indemnified  Party desires to participate in, but not control,  any such defense
or  settlement  it may do so at its sole cost and  expense.  If requested by the
Indemnifying   Party,  the  Indemnified  Party  agrees  to  cooperate  with  the
Indemnifying   Party  and  its  counsel  in  contesting   any  Losses  that  the
Indemnifying Party elects to contest or, if appropriate and related to the claim
in question,  in making any counterclaim  against the Person asserting the third
party Losses, or any  cross-complaint  against any Person. In the event that the
Indemnifying  Party  fails to notify  the  Indemnified  Party  within the Notice
Period that it will defend against such Losses, the Indemnified Party shall have
the right to defend all  appropriate  Proceedings,  and with  counsel of its own
choosing, at the Indemnifying Party's expense,  which Proceedings may be settled
(without  consent  of the  Indemnifying  Party) or  prosecuted  by it to a final
conclusion.

                  (c)  Sellers shall defend the Rhodes Proceedings  at their own
expense,  with counsel of their own choosing,  which Sellers shall  promptly and
diligently pursue to a settlement or prosecute to a final  conclusion;  provided
that  neither of the Rhodes  Proceedings  may be settled  without the consent of
Buyer unless  reasonably  concurrently  therewith any financial  obligations  or
liability  payable pursuant thereto are paid by Sellers or provision for payment
is made in  accordance  with any related  Legal  Requirements  and this  Section
13.4(c)  or  Sections  6.8 or  7.2(d),  as the  case may be.  If  Buyer  becomes
obligated to pay any  financial  compensation  to the  plaintiffs  in the Rhodes
Lawsuit,  then  Citizens  will  pay such  compensation  in  accordance  with all
applicable Legal  Requirements or deliver to Buyer (or to the Judicial  District
Court,  Jefferson  Parish,  Louisiana,  if  appropriate)  a bond or other surety
instrument  reasonably  acceptable  to  Buyer  fully  securing  payment  of such
compensation.  Notwithstanding  the  delivery  of  surety  instruments  pursuant
hereto,  Citizens  shall  remain  liable  for,  and  shall  pay  when  due,  all
obligations  secured thereby. If Citizens fails to pay any such obligations when
due,  and Buyer is  required  to pay,  Buyer  shall be  entitled to draw on such
surety  instruments in accordance with the terms thereof.  Upon  satisfaction of
all of Citizens' obligations secured by any such surety instrument,  Buyer shall
return such surety instrument to Citizens. Citizens' obligation to indemnify the
Buyer Indemnitees in respect of the Rhodes Proceedings shall be paid without any
right of setoff and  notwithstanding  any failure of Buyer to perform any of its
obligations  under the Agreement or any other agreement as instrument  delivered
pursuant hereto.

                  (d)  The  Indemnified Party  shall provide  reasonable  assis-
tance  to the  Indemnifying  Party and  provide access to its books, records and
personnel as the Indemnifying Party reasonably requests in connection  with  the
investigation or defense of the Losses.  The  Indemnifying  Party shall promptly
upon receipt of reasonable  supporting  documentation  reimburse the Indemnified
Party for  out-of-pocket  costs and expenses incurred by the latter in providing
the requested assistance.

                                       51
<PAGE>

                  (e)  With regard to third  party  claims for which Buyer is or
Sellers are entitled to indemnification  under Section 13.1 or 13.2, but subject
to Section 13.4(c), such indemnification shall be paid by the Indemnifying Party
upon: (i) the entry of an Order against the Indemnified Party and the expiration
of any  applicable  appeal  period;  or (ii) a settlement.  Notwithstanding  the
foregoing but subject to Section  13.4(b) and (c), and provided that there is no
dispute as to the applicability of  indemnification,  expenses of counsel to the
Indemnified  Party shall be reimbursed  on a current  basis by the  Indemnifying
Party as if such expenses are a liability of the Indemnifying Party.

         Section 13.5 Exclusive Remedy.  Except as otherwise provided in Article
VI, Article X and this Section 13.5, the rights, remedies and obligations of the
Buyer  Indemnitees  and the Sellers  Indemnitees  set forth in this Article XIII
will be the exclusive rights, remedies and obligations of such Persons after the
Closing with respect to this Agreement,  the transactions provided for herein or
contemplated  hereby or Sellers'  ownership  of the Assets or  operation  of the
Business  on  or  before  the  Closing   Date,   except  for   Sellers'   Fraud.
Notwithstanding  the foregoing,  with respect to  Environmental  Liabilities and
Retained Liabilities referred to in Section  13.3(b)(2)(v),  the indemnification
provisions  set forth in this  Article  XIII are not  exclusive  and shall be in
addition  to any  other  remedies  any Buyer  Indemnitee  may have  pursuant  to
statutory  or common  law,  but subject to the  limitations  provided in Section
13.3(a), (c) and (d).

         Section  13.6  Indemnification  for  Negligence.  WITHOUT  LIMITING  OR
ENLARGING  THE  SCOPE  OF THE  INDEMNIFICATION  OBLIGATIONS  SET  FORTH  IN THIS
AGREEMENT,  AN INDEMNIFIED PARTY SHALL BE ENTITLED TO INDEMNIFICATION  HEREUNDER
IN  ACCORDANCE  WITH THE TERMS  HEREOF,  REGARDLESS OF WHETHER THE LOSS OR CLAIM
GIVING  RISE TO SUCH  INDEMNIFICATION  OBLIGATION  IS THE  RESULT  OF THE  SOLE,
CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY,  VIOLATION OF ANY LAW OR
OTHER LEGAL FAULT OF OR BY SUCH  INDEMNIFIED  PARTY. THE PARTIES AGREE THAT THIS
PARAGRAPH CONSTITUTES A CONSPICUOUS LEGEND.

                                   ARTICLE XIV
                               GENERAL PROVISIONS

         Section  14.1  Expenses.  Except  as  otherwise  specifically  provided
herein,  each party will pay all costs and  expenses of its  performance  of and
compliance  with this  Agreement,  except (i) Buyer will pay all real estate and
motor vehicle title  transfer  recording  fees, and (ii) all  Transaction  Taxes
relating to the  transfer of real  property  and motor  vehicles  will be shared
equally between Buyer, on the one hand, and Sellers, on the other hand.

         Section 14.2 Notices.  All notices,  requests and other  communications
hereunder  shall be in  writing  and shall be deemed  to have  been  given  upon
receipt if either (a)  personally  delivered,  (b) sent by prepaid  first  class
mail,  and  registered or certified and a return  receipt  requested (c) sent by
overnight delivery via a nationally  recognized carrier or (d) by facsimile with
completed transmission acknowledged:

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<PAGE>

                  If to either Seller, to:

                  Citizens Utilities Company/LGS Natural Gas Company
                  High Ridge Park
                  Stamford, CT 06905
                  Attention:   Robert J. DeSantis
                  Telecopier:  (203) 614-4625

                  with a copy to each of:

                  Citizens Utilities Company
                  High Ridge Park
                  Stamford, CT 06905
                  Attention:   L. Russell Mitten, II
                  Telecopier:  (203) 614-4651

                  and:

                  Citizens Utilities Company
                  High Ridge Park
                  Stamford, CT 06905
                  Attention:   J. Michael Love
                  Telecopier:  (203) 614-5201

                  and:

                  Fleischman and Walsh, L.L.P.
                  1400 Sixteenth Street, N.W.
                  Washington, D.C.  20036
                  Attention: Jeffry L. Hardin
                  Telecopier:  (202) 387-3467

                  If to Buyer, to:

                  Atmos Energy Corporation
                  1800 Three Lincoln Centre
                  5430 LBJ Freeway
                  Dallas, TX  75240
                  Attention:  John P. Reddy
                  Telecopier: (972) 855-3793

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<PAGE>

                  with a copy to each of:

                  Atmos Energy Corporation
                  1800 Three Lincoln Centre
                  5430 LBJ Freeway
                  Dallas, TX 75240
                  Attention: Phillip L. Allbritten
                  Telecopier: (972) 855-3080

                  and:

                  Gibson, Dunn & Crutcher LLP
                  2100 McKinney Avenue, Suite 1100
                  Dallas, TX  75201
                  Attention:  Irwin F. Sentilles, III
                  Telecopier: (214) 698-3400

or at such  other  address  or number as shall be given in writing by a party to
the other party.

         Section  14.3  Assignment.  This  Agreement  may  not be  assigned,  by
operation of law or  otherwise,  by any party hereto  without the prior  written
consent of the other party hereto;  provided,  however, in the event of any such
assignment by a party by operation of law without the consent of the other party
as required  above,  such other party may consent in writing to such  assignment
after it has occurred and, in such event,  this Agreement and all the provisions
hereof shall be binding upon the Person  receiving such  assignment by operation
of law.  Notwithstanding the foregoing,  (a) Buyer may assign this Agreement (or
any right or  obligation  hereunder),  without  the  prior  written  consent  of
Sellers,  to any direct or indirect  wholly-owned  subsidiary of Buyer  provided
such  subsidiary  assumes in writing all of the duties and  obligations of Buyer
(or such obligation)  hereunder (provided that no such assignment by Buyer shall
in any way operate to enlarge,  alter or change any obligation due to Sellers or
relieve Buyer of its obligations  hereunder if such subsidiary  fails to perform
such  obligations,  with the  understanding  that  Buyer  shall be  jointly  and
severally liable with such subsidiary for any nonperformance of such obligations
hereunder); and (b) Sellers may assign all or part of its rights or delegate all
or part of their duties under this Agreement,  without the prior written consent
of Buyer, to a qualified intermediary chosen by Sellers to structure all or part
of the  transactions  contemplated  hereby as a  like-kind  exchange of property
covered by Section 1031 of the IRC, (provided that no such assignment by Sellers
shall in any way  operate to  enlarge,  alter or change any  obligations  due to
Buyer or  relieve  Sellers  of their  obligations  hereunder  if such  qualified
intermediary  fails to perform such  obligations,  with the  understanding  that
Sellers shall be jointly and severally  liable with such qualified  intermediary
for any nonperformance of Sellers' obligations hereunder).

         Section 14.4  Successor  Bound.  Subject to the  provisions  of Section
14.3,  this  Agreement  shall be  binding  upon and inure to the  benefit of the
parties hereto and their respective successors and permitted assigns.

         Section 14.5 Governing Law. THE VALIDITY,  PERFORMANCE, AND ENFORCEMENT
OF THIS AGREEMENT AND ALL RELATED  DOCUMENTS,  UNLESS EXPRESSLY  PROVIDED TO THE

                                       54
<PAGE>

CONTRARY,  SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE  PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE THAT WOULD APPLY ANY
OTHER LAW.

         Section  14.6  Dispute  Resolution.  Except as  otherwise  provided  in
Sections 3.3(b),  6.4 and 11.3, and this Section 14.6, any dispute,  controversy
or claim between the parties  relating to, arising out of or in connection  with
this Agreement (or any subsequent  agreements or amendments thereto),  including
as to its existence,  enforceability,  validity, interpretation,  performance or
breach or as to  indemnification  or damages,  including claims in tort, whether
arising  before or after the  termination  of this  Agreement (any such dispute,
controversy or claim being herein  referred to as a "Dispute")  shall be settled
without  litigation  and  only  by  use  of the  following  alternative  dispute
resolution procedure:

                  (a)  At the  written request  of a  party,  each  party  shall
appoint a  knowledgeable,  responsible  representative  to meet and negotiate in
good  faith  to  resolve  any  Dispute.  The  discussions  shall  be left to the
discretion  of  the   representatives.   Upon  agreement  by  the  parties,  the
representatives may utilize other alternative dispute resolution procedures such
as mediation  (including through a mediator upon whom the parties mutually agree
or  selected  or  designated  by the  Washington,  DC  office  of  the  American
Arbitration Association) to assist in the negotiations.  Buyer, on the one hand,
and Sellers,  on the other hand, shall bear one-half of the expenses of any such
mediator.  Discussions and correspondence among the parties' representatives for
purposes  of these  negotiations  shall be treated as  confidential  information
developed for the purposes of settlement,  exempt from discovery and production,
and without the  concurrence  of both  parties  shall not be  admissible  in the
arbitration  described  below,  or in any lawsuit.  Documents  identified  in or
provided  with such  communications,  which are not prepared for purposes of the
negotiations,  are not so exempted and may, if otherwise admissible, be admitted
in the arbitration.

                  (b)  If negotiations  between the representatives  of the par-
ties do not resolve the Dispute within 60 days of the initial  written  request,
the Dispute shall be submitted to binding  arbitration  by a  single  arbitrator
pursuant to the Commercial  Arbitration Rules, as then amended and in effect, of
the American Arbitration Association (the "Rules"). Either party may demand such
arbitration  in  accordance  with  the  procedures  set  out in the  Rules.  The
arbitration shall take place in Washington,  D.C. The arbitration  hearing shall
be  commenced  within  60 days of  such  party's  demand  for  arbitration.  The
arbitrator  shall  have the power to and will  instruct  each  party to  produce
evidence through  discovery (i) that is reasonably  requested by the other party
to the  arbitration in order to prepare and  substantiate  its case and (ii) the
production of which will not materially delay the expeditious  resolution of the
dispute  being  arbitrated;  each  party  hereto  agrees to be bound by any such
discovery  order.  The arbitrator shall control the scheduling (so as to process
the matter  expeditiously)  and any  discovery.  The parties may submit  written
briefs.  At the  arbitration  hearing,  each  party  may make  written  and oral
presentations  to the  arbitrator,  present  testimony and written  evidence and
examine  witnesses.  No party shall be eligible to receive,  and the  arbitrator
shall not have the  authority  to award,  exemplary  or  punitive  damages.  The
arbitrator shall rule on the Dispute by issuing a written opinion within 30 days
after the close of  hearings.  The  arbitrator's  decision  shall be binding and
final.  Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction.

                                      55
<PAGE>

                  (c)  Each  party  will  bear its own  costs  and  expenses  in
submitting  and  presenting  its  position  with  respect to any  Dispute to the
arbitrator;  provided,  however,  that if the  arbitrator  determines  that  the
position  taken in the  Dispute by the  nonprevailing  party taken as a whole is
unreasonable, the arbitrator may order the nonprevailing party to bear such fees
and expenses,  and reimburse the prevailing party for all or such portion of its
reasonable costs and expenses in submitting and presenting its position,  as the
arbitrator shall reasonably  determine to be fair under the circumstances.  Each
party to the  arbitration  shall pay  one-half  of the fees and  expenses of the
arbitrator and the American Arbitration Association.

                  (d)  Notwithstanding  any other provision  of this  Agreement,
(i) either party may commence  an action to compel compliance  with this Section
14.6 and (ii) if any party, as part of a Dispute, seeks injunctive relief or any
other equitable remedy, including specific enforcement, then such party shall be
permitted to seek such  injunctive  or equitable  relief in any federal or state
court or  competent  jurisdiction  before,  during  or after the  pendency  of a
mediation or  arbitration  proceed under this Section 14.6.  Each of the parties
irrevocably and  unconditionally  submits,  for itself and its property,  to the
nonexclusive  jurisdiction  of the United States District Court for the District
of  Delaware  and any state  court  sitting  in the State of  Delaware,  and any
appellate court therefrom, in any action or proceeding permitted by this Section
14.6. Each of the parties hereby  irrevocably  consents to service of process by
registered  or  certified  mail to the address  provided  for notices in Section
14.2.  Nothing  in this  Agreement  will  affect  the right of any party to this
Agreement to serve process in any other manner permitted by law.

         Section 14.7 Cooperation.  Except as otherwise provided herein, each of
the parties hereto agrees to use its commercially  reasonable efforts to take or
cause  to be  taken  all  action,  and to do or  cause  to be  done  all  things
necessary,  proper or advisable under applicable laws, regulations or otherwise,
to  consummate  and to make  effective  the  transactions  contemplated  by this
Agreement,   including  the  timely   performance  of  all  actions  and  things
contemplated  by this  Agreement  to be  taken  or  done by each of the  parties
hereto.

         Section 14.8  Construction  of Agreement.  The terms and  provisions of
this Agreement represent the results of negotiations  between Buyer and Sellers,
each of which has been  represented by counsel of its own choosing,  and neither
of which has acted  under  duress or  compulsion,  whether  legal,  economic  or
otherwise.  Accordingly,  the terms and  provisions of this  Agreement  shall be
interpreted and construed in accordance with their usual and customary meanings,
and Buyer and  Sellers  hereby  waive the  application  in  connection  with the
interpretation  and  construction  of this  Agreement  of any rule of law to the
effect that  ambiguous  or  conflicting  terms or  provisions  contained in this
Agreement  shall be  interpreted  or construed  against the party whose attorney
prepared  the  executed  draft or any  earlier  draft of this  Agreement.  It is
understood and agreed that neither the specification of any dollar amount in the
representations and warranties  contained in this Agreement nor the inclusion of
any  specific  item in the  Schedules or Exhibits is intended to imply that such
amounts or higher or lower amounts, or the items so included or other items, are
or are not  material,  and none of the parties shall use the fact of the setting
of such amounts or the fact of any  inclusion of any such item in the  Schedules
or Exhibits in any dispute or controversy  between the parties as to whether any
obligation,  item or matter is or is not material for purposes hereof.  The word
"including" in this Agreement shall mean including without limitation.  Words in
the singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other genders as the context  requires.  The
terms  "hereof,"  "herein," and  "herewith"  and words of similar  import shall,

                                       56
<PAGE>

unless  otherwise  stated,  be construed  to refer to this  Agreement as a whole
(including  all of the Schedules and Exhibits  hereto) and not to any particular
provision  of this  Agreement,  and  Article,  Section,  paragraph,  Exhibit and
Schedule  references  are to the Articles,  Sections,  paragraphs,  Exhibits and
Schedules to this Agreement unless otherwise specified.

         Section 14.9 Publicity.  No party hereto shall issue, make or cause the
publication  of any press  release or other  announcement  with  respect to this
Agreement  or the  transactions  contemplated  hereby,  or  otherwise  make  any
disclosures  relating  thereto,  without  the consent of the other  party,  such
consent not to be unreasonably withheld or delayed; provided, however, that such
consent shall not be required where such release or  announcement is required by
applicable law or the rules or regulations  of a securities  exchange,  in which
event  the  party so  required  to issue  such  release  or  announcement  shall
endeavor,  wherever possible, to furnish an advance copy of the proposed release
to the other party.

         Section 14.10 Waiver.  Except as otherwise  expressly  provided in this
Agreement,  neither  the  failure  nor any  delay  on the  part of any  party to
exercise  any right,  power or  privilege  hereunder  shall  operate as a waiver
thereof,  nor shall any single or partial  exercise or waiver of any such right,
power or  privilege  preclude  any other or  further  exercise  thereof,  or the
exercise of any other right,  power or privilege  available to each party at law
or in equity.

         Section  14.11  Parties in  Interest.  This  Agreement  (including  the
documents and instruments referred to herein) is not intended to confer upon any
Person,  other  than the  parties  hereto  and their  successors  and  permitted
assigns, any rights or remedies hereunder.

         Section 14.12 Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for reference  purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.

         Section 14.13     Amendment.  This Agreement  may be amended only by an
instrument  in  writing  executed by  duly  authorized  officers of  the parties
hereto.

         Section  14.14  Entire  Agreement.  This  Agreement,  the  Exhibits and
Schedules  hereto  and the  documents  specifically  referred  to herein and the
Confidentiality  Agreement  constitute  the  entire  agreement,   understanding,
representations  and warranties of the parties  hereto,  and supersede all prior
agreements,  both written and oral, between Buyer and Sellers.  All Exhibits and
Schedules  annexed hereto or referred to herein are hereby  incorporated  in and
made a part of this Agreement as if set forth in full herein.  Disclosure of any
fact or item in any Schedule referenced by a particular  paragraph or Section in
this Agreement  shall,  should such fact or item or its contents be expressly or
obviously  related to any other paragraph or Section,  be deemed to be disclosed
with  respect to that other  paragraph  or Section  whether or not any  explicit
cross-reference appears therein.

         Section 14.15 Counterparts.  This Agreement may be executed in multiple
counterparts,  each of  which  shall be  deemed  an  original,  and all of which
together shall constitute one and the same instrument.

         Section  14.16  Severability.  If any term or other  provision  of this
Agreement is invalid,  illegal or incapable of being enforced by any rule of law
or public policy,  all other  conditions and provisions of this Agreement  shall

                                       57
<PAGE>

nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that  transactions  contemplated  hereby are  fulfilled  to the greatest
extent possible.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]

                                       58
<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the date first written above.

                           CITIZENS UTILITIES COMPANY

                           By: --------------------------------------------
                               Robert J. DeSantis, Chief Financial Officer
                               and Vice President

                           LGS NATURAL GAS COMPANY

                           By: --------------------------------------------
                               Robert J. DeSantis, Vice President

                           ATMOS ENERGY CORPORATION

                           By: --------------------------------------------
                               Robert W. Best, Chairman, President and
                               Chief Executive Officer

                                       59Amendment #1 to Change of Control Agreement - GAM

	EXHIBIT 10.1

	AMENDMENT NUMBER ONE

TO THE

CHANGE OF CONTROL AGREEMENT BETWEEN

GEORGIA-PACIFIC CORPORATION 

AND 

GARY A. MYERS, DATED MARCH 15, 1999

	          WHEREAS, the Board of Directors of Georgia-Pacific Corporation (the "Board") desires to amend the Change of Control Agreement between Georgia-Pacific Corporation and Gary A. Myers, dated March 15,
1999 ("Agreement") to expand the definition of "Change in Control."

	
          NOW THEREFORE, the Board hereby amends the Agreement as follows:

	
                    1.    Section 1(c) of the Agreement is amended by adding the following to the end thereof:

		

"(v)    Consummation of the Transaction as defined in the Board Resolution approving Project Forest dated July 18, 2000, and as contemplated in the Agreement and Plan of Merger by and among Plum Creek Timber Company, Inc., Georgia-Pacific
Corporation, and the Spincos (as defined therein) dated July 18, 2000."

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