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Exhibit 10.1
 

Southern Union Company
417 Lackawanna Avenue
Scranton, PA 18503

November 7, 2005

Thomas F. Karam
103 Stonegate Road
Waverly, PA 18471

Dear Mr. Karam:
 
This will confirm the agreement (the “Agreement”) that has been reached with you
in connection with your separation of employment from Southern Union Company
(the “Company”).
 
1.  Effective immediately, the Company hereby amends the Employment Agreement
dated as of December 28, 1999 (the “Employment Agreement”) between you and the
Company to terminate your participation in all arrangements under the Employment
Agreement and, subject to your consent to the General Release set forth in
paragraph 9 hereof and provided that you execute and do not revoke this
Agreement within the time period and in the manner specified herein, to
distribute all amounts of compensation provided for under the Employment
Agreement in such a way that all such amounts, all such amounts subject to
termination of your participation and the full amount of the distribution under
the Employment Agreement are includable in your income in calendar year 2005.
Such distribution shall be subject to applicable federal, state and local
withholding taxes and deductions. By your execution and delivery of this
Agreement, you hereby consent to the Company’s amendment of the Employment
Agreement as provided for in the first sentence of this paragraph 1.
 
2.  You hereby confirm that your last day of employment with the Company is
November 8, 2005 and waive any notice period otherwise applicable under the
Employment Agreement. Moreover, you hereby confirm your resignations from any
and all of your positions as officer or director of the Company, including but
not limited to President and Chief Operating Officer of the Company, and any of
its subsidiaries, divisions, joint ventures or other affiliates, effective as of
November 8, 2005, and agree that you shall take such further actions as may be
necessary or desirable to effectuate the foregoing.
 
3.  In consideration of your obligations set forth in this Agreement, including,
but not limited to, your consent to the General Release set forth in paragraph
9 below, and provided that you execute and do not revoke this Agreement within
the time period and in the manner specified herein, the Company and you have
agreed as follows:
 

(a)  
The Company accepts your resignation effective November 8, 2005.

 
 
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(b)  
The Company agrees to pay you severance in the amount of Three Million Three
Hundred Thousand dollars ($3,300,000.00), less all applicable federal, state and
local withholding taxes and deductions, which amount shall be paid in a lump sum
no later than ten (10) business days after the Effective Date (as defined below
in paragraph 14) of this Agreement.

 

(c)  
The Company agrees to pay you a special discretionary bonus in respect of work
performed in calendar year 2005 in the amount of Four Hundred Twelve Thousand
dollars ($412,000.00), less all applicable federal, state and local withholding
taxes and deductions, which amount shall be paid in a lump sum no later than ten
(10) business days after the Effective Date.

 

(d)  
You, your spouse and your dependent children who are covered under any of the
Company’s group health plans (collectively, the “Plan”) at the time of your
termination will lose coverage under the Plan on November 30, 2005. This loss of
coverage will entitle you, your spouse and dependent children to elect to
receive continuation coverage in the Plan pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
for eighteen (18) months following the date that coverage under the Plan is lost
(i.e., through May 31, 2007). As described in more detail in the COBRA notice
that you will receive when you lose coverage under the Plan, this eighteen-month
period may be extended upon the occurrence of certain events that occur during
such eighteen-month period. In the event that you, your spouse or dependent
children elect to receive COBRA continuation coverage under the Plan, the
Company agrees to reimburse you for the required premium that you pay for such
COBRA continuation coverage for the eighteen-month period ending May 31, 2007.
Any COBRA continuation coverage to which you, your spouse or dependent children
may be entitled after May 31, 2007 shall be at your own expense. If you, your
spouse or a dependent child first becomes eligible to be covered under another
group health plan (as an employee or otherwise) or first becomes entitled to
benefits under Title XVIII of the Social Security Act during such eighteen-month
period (as such period may be extended), you agree to report such eligibility
for coverage to the Company and the Company’s reimbursement obligation shall
cease permanently with respect to coverage under any group health plan,
including the Plan, with respect to such individual. Except as set forth herein,
continuation coverage shall in all respects be subject to the requirements,
conditions and limitations of COBRA and the Plan, which may be amended from time
to time.

 

(e)  
The Company agrees to pay you for any unused vacation time that has accrued as
of November 8, 2005, less all applicable federal, state and local withholding
taxes and deductions, which amount shall be paid in a lump sum no later than ten
(10) business days after the Effective Date, and the Company agrees to reimburse
you for any legitimate unreimbursed business expenses incurred by you prior to
November 8, 2005, promptly following your submission of proper documentation of
such expenses to the Company. As of the date hereof, the value of accrued but
unused vacation totaled $160,437.

 
 
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(f)  
Effective ten (10) business days following the Effective Date, the Company
agrees to amend the Southern Union Company Supplemental Deferred Compensation
Plan (the “Shadow Plan”) to terminate your participation, and all of your
deferred compensation arrangements, under the Shadow Plan, and to distribute all
amounts of your deferred compensation under the Shadow Plan, in kind to the
extent provided under the terms of the Shadow Plan, no later than December 31,
2005, in such a way that all such deferred amounts, all such amounts subject to
termination of your participation, and the full amount of the distribution under
the Shadow Plan are includable in your income in calendar year 2005. Such
distribution shall be subject to applicable federal, state and local withholding
taxes and deductions. By your execution and delivery of this Agreement, you
hereby consent to the Company’s amendment of the Shadow Plan as provided for in
the preceding sentence. As of October 26, 2005, your account balance under the
Shadow Plan totaled 77,088.9147 shares of Southern Union common stock.

 

(g)  
Not later than ten (10) business days after the Effective Date, you agree to
prepay in full the outstanding balance, together with any accrued but unpaid
interest (but otherwise without any premium or penalty), under that certain
Secured Promissory Note dated December 20, 1999 and made by you in favor of the
Company in the original principal amount of Four Million dollars ($4,000,000.00)
(the “Note”), upon which prepayment that certain Security Agreement dated as of
December 20, 1999 made by you in favor of the Company shall be deemed released
and of no further force or effect. As of the date hereof, the outstanding
principal balance under the Note totaled $2,383,486.51.

 

(h)  
The Company agrees to engage you as a consultant, and you agree to accept such
engagement, to perform services as the Company may reasonably request and to
provide reasonable assistance in transitioning your duties to other employees at
the Company for approximately fifteen (15) hours per week, as needed, including
but not limited to business development and strategic growth initiatives, for a
period of twenty-four (24) months commencing January 1, 2006 (the “Consulting
Period”). As compensation for your agreement and availability to provide the
foregoing services as a consultant during the Consulting Period, you shall be
paid a rate of Sixty-Six Thousand One Hundred Sixty-Six and 67/100 dollars
($66,166.67) per month, in arrears; provided, however, that the foregoing
payments for consulting services shall cease permanently if and to the extent
that you obtain other employment with, or otherwise provide services as a
consultant to, any business, entity or individual during the Consulting Period
other than Permitted Services (as defined below). For purposes of this
Agreement, “Permitted Services” shall mean your provision of services to (1) an
educational, not-for-profit or charitable organization, (2) a governmental
organization that does not have any regulatory or oversight function with
respect to the Company or any of its subsidiaries or affiliates, or (3) a
company whose principal business does not include the operation of an interstate
natural gas pipeline or natural gas local distribution company and/or does not
otherwise compete in any way, directly or indirectly, with the businesses of the
Company, its subsidiaries or affiliates as of November 8, 2005 (“Category 3”),
and provided that your provision of such services does not adversely affect your
availability to provide consulting services to the Company as required herein.
The parties agree that in the event you seek a limited waiver of this provision,
you will notify the Company in writing and the Company will attempt to respond
promptly to your request. You agree to promptly notify the Company in writing
upon securing any other employment or consultancy engagements (whether or not
they involve Permitted Services) and the Company shall have the right to stop
any payment not yet due and recoup payments already made in the event that you
fail to notify the Company of any Category 3 employment or consultancy
engagements as provided herein. The Company acknowledges that from time to time
you may have personal commitments (e.g., travel, vacation) during the Consulting
Period and the Company agrees to work with you to accommodate any such
commitments in scheduling or otherwise requesting your consulting services.

 
 
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(i)  
You agree not to obtain other employment with, or otherwise provide services as
a consultant to, any business, entity or individual from and after the date
hereof through the last day of the Consulting Period other than Permitted
Services. You further agree that during such period you shall not, directly or
indirectly, on your own behalf or on behalf of any other person or entity,
solicit, or attempt to solicit, or hire any employee, agent or contractor of the
Company or any of its subsidiaries, divisions, joint ventures or other
affiliates, known by you to be such, to leave the employ of or cease doing
business with the Company or any of its subsidiaries, divisions, joint ventures
or other affiliates for any reason whatsoever. You additionally agree that
during such period you shall not, directly or indirectly, on your own behalf or
on behalf of any other person or entity, interfere with or induce any customer
or prospective customer to discontinue any business relationship with the
Company or any of its subsidiaries, divisions, joint ventures or other
affiliates or to refrain from entering into a business relationship or
transaction with the Company or any of its subsidiaries, divisions, joint
ventures or other affiliates. As compensation for the foregoing non-competition
and non-solicitation agreements, the Company agrees to pay you the amount of
Five Hundred Forty Thousand dollars ($540,000.00), less all applicable federal,
state and local withholding taxes and deductions, which amount shall be paid in
a lump sum no later than ten (10) business days after the Effective Date of this
Agreement.

 

(j)  
Nothing herein shall be construed to constitute an employer/employee
relationship during the Consulting Period or to authorize you to act as an agent
on behalf of the Company, at any time following November 8, 2005 without the
express written consent of the Company. Your relationship with the Company
during the Consulting Period shall only be that of an independent contractor and
you shall not receive or be entitled to any unemployment, disability, workers’
compensation or medical insurance or any other employee benefits (including but
not limited to vacation or pension benefits) as a result of your performing
consulting services for the Company pursuant to this Agreement. You shall also
be responsible for payment of any taxes, fees, interest or penalties that may be
imposed or incurred as a result of the consulting fees paid to you under
paragraph 3(h) above. You shall be entitled to reimbursement, upon receipt by
the Company of suitable documentation, for reasonable and necessary travel and
other expenses that you may incur during the Consulting Period at the specific
request of the Company and as approved by the Company in advance, in accordance
with its policies and procedures established from time to time.

 
 
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(k)  
You and the Company each agrees that neither shall be liable to the other for
any claims, liabilities or expenses (other than expenses as expressly provided
herein) arising out of or relating to your provision of consulting services to
the Company during the Consulting Period, except for violation of any of the
representations, warranties or covenants made in this Agreement where such
violation results from a party’s bad faith, gross negligence, intentional
misconduct or violation of law. In no event shall you or the Company ever be
liable to the other for consequential, special, indirect, incidental, punitive
or exemplary loss, damage or expense with respect to your provision of
consulting services to the Company during the Consulting Period, except to the
extent finally judicially determined to have resulted primarily from a party’s
intentional misconduct. The provisions of this paragraph shall apply to the
fullest extent of the law, whether in contract, statute, tort (such as
negligence) or otherwise.

 

(l)  
You agree that the Company shall be entitled to net against any amounts payable
by the Company to you under this Agreement amounts payable by you to the Company
hereunder.

 
4.  You acknowledge that the payments and benefits referred to in paragraph 3(a)
through (f) above are in lieu of and in full satisfaction of any amounts that
might otherwise be payable under any contract, plan, policy or practice, past or
present, of the Company, or any of its subsidiaries and affiliates, including
but not limited to the Employment Agreement, the Southern Union Company
Severance Plan, the Southern Union Company Severance Pay Plan and the Southern
Union Company Corporate Reorganization Plan. You shall not be eligible to
receive benefits under any employee benefit plans or compensation arrangements
of the Company, or any of its subsidiaries or affiliates, subsequent to November
8, 2005, with the exception of (a) your right to elect COBRA continuation
coverage as described above, and (b) any vested benefits you may have, as of
November 8, 2005, in the Southern Union Savings Plan, the Employees’ Retirement
Plan of Southern Union Company Pennsylvania Division and/or the Southern Union
Company Employee Stock Purchase Plan.
 
5.  You hereby relinquish and convey to the Company any and all rights and
interests you have or may have with respect to options to purchase shares of
stock of the Company or any of its subsidiaries or affiliates under any plan or
other arrangement, including but not limited to the Pennsylvania Enterprises,
Inc. Stock Incentive Plan, the Pennsylvania Enterprises, Inc. 1992 Stock Option
Plan, the Southern Union 1992 Long Term Stock Incentive Plan and the Southern
Union Company 2003 Stock and Incentive Plan (as amended or restated from time to
time, the “Option Plans”), and acknowledge and agree that such options shall be
forfeited as of November 8, 2005; provided, however, that with respect to any
option that has vested on or before November 8, 2005, you may, from and after
November 8, 2005, exercise any such options in accordance with the terms of the
applicable Option Plan or, if different, as specified in respect of any specific
option grant. Any vested options that have not been exercised on or before their
expiration date as determined in accordance with the immediately preceding
sentence shall thereafter expire and be forfeited. Nothing contained in this
paragraph 5 shall be deemed to amend the terms of the Option Plans or any
specific option grant.
 
 
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6.  You agree that in the course of your employment with the Company you have
had access, and during the Consulting Period you may have access, to
confidential and proprietary information (“Confidential Information”) relating
to the Company, its subsidiaries and affiliates, and their respective
businesses, clients, finances, operations, strategic or other plans, employees,
trade practices, trade secrets, know how or other matters that are not publicly
known outside the Company, which are integral to the operations and success of
the Company, and that such Confidential Information has been disclosed or will
be disclosed to you in confidence and only for the use of the Company. You
hereby represent and warrant that you have not disclosed any such Confidential
Information to date to anyone other than your counsel and that your counsel has
not disclosed any such Confidential Information to any third party. You further
understand and agree that (a) you will keep such Confidential Information
confidential at all times during and after your employment with the Company, (b)
you will not make use of such Confidential Information on your own behalf, or on
behalf of any third party, and (c) you have returned or will return to the
Company any and all copies, duplicates, reproductions or excerpts of such
Confidential Information within your possession, custody or control on or before
November 8, 2005 (or, to the extent provided to you during the Consulting
Period, on or before expiration of the Consulting Period). Until such time as
the Company may be required by applicable law or regulation to publicly disclose
this Agreement, you further agree to keep the terms of this Agreement
confidential and not to disclose the Agreement or the terms thereof to any
person, except (a) to your immediate family and as may be required for obtaining
legal or tax advice; (b) for the filing of income tax returns or required
financial disclosures; or (c) as may be required by law or in any proceeding to
enforce this Agreement. In the case of any disclosure to immediate family or a
legal or tax advisor, you shall require any person receiving such information to
maintain its confidentiality.
 
7.  All documents (electronic, paper or otherwise), records (electronic, paper
or otherwise), materials, software, equipment, and other physical property, and
all copies of the foregoing, whether or not otherwise containing Confidential
Information, that have come into your possession or been produced by you in
connection with your employment (“Property”), have been and remain the sole
property of the Company or its subsidiaries or affiliates, as applicable. You
agree that you have returned all such Property to the Company (or, to the extent
that you have not, that you will do so on or before November 8, 2005).
 
8.  You agree not to make, or knowingly cause to be made, any statement or
communication, written or oral, with the intention of disparaging or otherwise
impugning the business or management of the Company or any of its subsidiaries
or affiliates, or any of their respective officers, directors, agents,
representatives or employees. You further agree not to make, or knowingly cause
to be made, any statement or communication, written or oral, with the intention
of damaging the business or reputation of the Company or any of its subsidiaries
or affiliates, or the personal or business reputations of any of their
respective officers, directors, agents, representatives or employees, or of
interfering with, impairing or disrupting the normal operations of the Company
or any of its subsidiaries or affiliates. The Company agrees that it will not
knowingly permit its senior officers and directors to make, or knowingly cause
to be made, any statement or communication, written or oral, with the intention
of disparaging or otherwise impugning you, your business or your reputation. You
acknowledge and agree that the Company will issue a press release in a mutually
agreed form and shall make such other filings and disclosures relating to this
Agreement as may be required by law, regulation or the rules of any national
stock exchange.
 
 
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9.  You, your heirs, successors, and assigns, hereby knowingly and voluntarily
remise, release and forever discharge the Company and its subsidiaries and
affiliates, together with all of their respective current and former officers,
directors, agents, representatives and employees, and each of their
predecessors, successors and assigns (collectively, the "Releasees"), from any
and all debts, demands, actions, causes of actions, accounts, covenants,
contracts, agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known or unknown,
suspected or unsuspected, both in law and equity (“Claims”), which you ever had,
now have, or may hereafter claim to have against the Releasees by reason of any
matter, cause or thing whatsoever arising from the beginning of time to the time
you sign this Agreement (the "General Release"). This General Release of Claims
shall apply to any Claim of any type, including, without limitation, any and all
Claims of any type that you may have arising under the common law, under Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the Americans With Disabilities Act of 1990, the Rehabilitation Act of
1973, the Family and Medical Leave Act of 1993, the Worker Adjustment Retraining
and Notification Act, the Employee Retirement Income Security Act of 1974, the
Sarbanes-Oxley Act of 2002, or the Pennsylvania Human Relations Act, each as
amended, and any other federal, state or local statutes, regulations, ordinances
or common law, or under any plan, program, policy, agreement, contract,
understanding or promise, written or oral, formal or informal, between any of
the Releasees and you, including but not limited to the Employment Agreement,
the Southern Union Company Severance Plan, the Southern Union Company Severance
Pay Plan, the Southern Union Company Corporate Reorganization Plan, any Claim
for bonus or incentive compensation, attorneys’ fees, costs, and/or any other
fringe benefit of the Company or any of the other Releasees, and shall further
apply, without limitation, to any and all Claims in connection with, related to
or arising out of your employment, or the termination of your employment, with
the Company, and all Claims for alleged tortious, defamatory or fraudulent
conduct; provided, however, that nothing contained in this Agreement shall (i)
impair any vested benefits you may have, as of November 8, 2005, in the Southern
Union Savings Plan, the Employees’ Retirement Plan of Southern Union Company
Pennsylvania Division and/or the Southern Union Company Employee Stock Purchase
Plan; (ii) impair your continuing rights to indemnification by the Company, if
any, to the same extent currently available to you pursuant to the Company’s
by-laws and other organizational documents, any insurance policies maintained by
or on behalf of the Company, or under applicable law for actions taken or
omissions made as an employee, officer or director of the Company; or (iii) be
construed to prohibit you from bringing appropriate proceedings to enforce this
Agreement. You hereby represent and warrant that you have not filed or caused to
be filed any complaints, charges or lawsuits against the Company or any of the
other Releasees, and that no such complaints, charges or lawsuits are pending.
By signing this General Release, you further represent that you will not be
entitled to any personal recovery in any action or proceeding that may be
commenced on your behalf arising out of the matters released hereby. 
 
 
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10.  You hereby represent and warrant that you are not aware of any illegal or
unlawful actions or omissions by any current or former officer, director,
employee, agent, attorney, consultant or representative of the Company
(including yourself) through the date of the execution of this Agreement that
were (individually or collectively) in any way knowingly or intentionally
harmful or detrimental to the Company, its business and/or its shareholders,
including, without limitation, violations of any laws, regulations or accounting
policies or principles, the taking of unreasonable tax positions, or the
furnishing of inaccurate statements, invoices or other reports to any person or
entity.
 
11.  During, and after the termination of, your employment, you agree to
cooperate fully with the Company and its subsidiaries and affiliates concerning
reasonable requests for information about the business of the Company or its
subsidiaries or affiliates or your involvement and participation therein; the
defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company or its subsidiaries or
affiliates which relate to events or occurrences that transpired while you were
employed by the Company; and in connection with any investigation or review by
any federal, state or local regulatory, quasi-regulatory or self-governing
authority (including, without limitation, the Securities and Exchange
Commission) as any such investigation or review relates to events or occurrences
that transpired while you were employed by the Company. Your full cooperation
shall include, but not be limited to, being available to meet and speak with
officers or employees of the Company and/or its counsel at reasonable times and
locations, executing accurate and truthful documents and taking such other
actions as may reasonably be requested by the Company and/or its counsel to
effectuate the foregoing. In requesting such services, the Company will consider
other commitments that you may have at the time of the request and agrees to
work with you to accommodate any such commitments. The Company further agrees to
reimburse you for any reasonable, out-of-pocket travel, hotel and meal expenses
incurred in connection with your performance of obligations pursuant to this
paragraph for which you have obtained prior, written approval from the Company.
 
12.  Nothing in this Agreement is intended to or shall preclude you from
providing truthful testimony on any non-privileged subject matter in response to
a valid subpoena, court order, regulatory request or other judicial,
administrative or legal process or otherwise as required by law, in which event
you shall notify the Company in writing as promptly as practicable after
receiving any such request of the anticipated testimony and at least ten (10)
business days prior to providing such testimony (or, if such notice is not
possible under the circumstances, with as much prior notice as is possible) so
that the Company may seek a protective order or other appropriate remedy, and
you agree to cooperate with the Company in any effort the Company undertakes to
obtain a protective order or other remedy. If such a protective order or other
remedy is not obtained, or the Company waives compliance with this Agreement,
you shall furnish only that portion of such subject matter that is legally
required and shall exercise all reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded to the subject matter to be
disclosed.
 
 
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13.  The Company advises you to consult with an attorney of your choosing prior
to signing this Agreement. You understand and agree that you have the right and
have been given the opportunity to review this Agreement and, specifically, the
General Release in paragraph 9 above, with an attorney. You also understand and
agree that the Company is offering you the payments and benefits set forth in
paragraph 3(a) through (f) in lieu of satisfaction of any obligations of the
Company under Section 6 of the Employment Agreement and you accept such payments
and benefits in full satisfaction therefor, and that you are under no obligation
to consent to the General Release. You acknowledge and agree that the payments
and benefits offered by the Company and set forth in paragraph 3 above are
sufficient consideration to require you to abide by your obligations under this
Agreement, including but not limited to the General Release. You represent that
you have read this Agreement, including the General Release set forth in
paragraph 9 above, and understand its terms and that you enter into this
Agreement freely, voluntarily, and without coercion.
 
14.  You acknowledge and represent that you have been given at least twenty-one
(21) days during which to review and consider the provisions of this Agreement
and, specifically, the General Release set forth in paragraph 9 above, although
you may sign and return it sooner if you so desire. You further acknowledge and
represent that you have been advised by the Company that you have the right to
revoke this Agreement for a period of seven (7) days after signing it. You
acknowledge and agree that, if you wish to revoke this Agreement, you must do so
in a writing, signed by you and received by the Company no later than 5:00 p.m.
Eastern Time on the seventh (7th) day of the revocation period. If no such
revocation occurs, the General Release and this Agreement shall become effective
on the eighth (8th) day following your execution of this Agreement (the
“Effective Date”). You further acknowledge and agree that, in the event that you
revoke this Agreement, it shall have no force or effect, and you shall have no
right to receive any of the payments or benefits provided for hereunder.
 
15.  It is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. Moreover, if any one or more of the provisions contained in
this Agreement shall be held to be excessively broad as to duration, scope,
activity or subject, such provisions shall be construed by limiting or reducing
them so as to be enforceable to the maximum extent compatible with applicable
law.
 
16.  No waiver by either party of any breach by the other party of any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of any other provision or condition at the time or at any prior
or subsequent time. This Agreement and the provisions contained in it shall not
be construed or interpreted for or against either party because that party
drafted or caused that party's legal representative to draft any of its
provisions.
 
 
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17.  The terms described in this Agreement set forth the entire agreement and
understanding of the parties and supersede all prior agreements, arrangements
and understandings, written or oral, between the parties, including but not
limited to the Employment Agreement. You acknowledge and agree that you are not
relying on any representations or promises by any representative of the Company
concerning the meaning or any aspect of this Agreement. This Agreement may not
be altered or modified other than in writing signed by you and an authorized
representative of the Company, and shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to its choice of law rules.
 
18.  The Company’s offer to you of this Agreement is not, and shall not be
construed as, any admission of liability or of any improper conduct on the part
of the Company or any of the other Releasees, all of which the Company
specifically denies.
 
19.  This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
 
20.  Any notice, demand or other communication which is required or permitted by
this Agreement to be given or made by a party hereto shall be in writing to the
following addresses:
 

(a)  
to the Company at:

 
Southern Union Company
c/o Monica M. Gaudiosi, Esq.
5444 Westheimer Road
Houston, Texas 77056

(b)  
to you at the address listed above

or at such other address as any party may from time to time advise the other
party by notice in writing.

 
 
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If the above sets forth our agreement as you understand it and consent to it,
please so signify by executing the enclosed copy of this letter and return it to
me at the address listed above.
 
Very truly yours,
Southern Union Company

/s/ George L. Lindemann  
By: George L. Lindemann
Title: Chairman & Chief Executive Officer

Agreed to and Accepted:

/s/ Thomas F. Karam  
Thomas F. Karam
Dated: November 7, 2005
 
 
 

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