Exhibit 10.3

REDEMPTION AGREEMENT

by and between

ENERGY TRANSFER PARTNERS, L.P.

and

CCE HOLDINGS, LLC

Dated as of

September 14, 2006

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

   2

Section 1.1

   Specific Definitions    2 ARTICLE II REDEMPTION OF 50% CCE INTEREST    14

Section 2.1

   Agreement to Redeem 50% CCE Interest    14

Section 2.2

   Time and Place of Closing    14

Section 2.3

   Pre-Closing Matters.    15

Section 2.4

   Post-Closing Adjustment.    16

Section 2.5

   Deliveries by CCE at the Closing    17

Section 2.6

   Deliveries by ETP at the Closing    18 ARTICLE III REPRESENTATIONS AND
WARRANTIES OF CCE    18

Section 3.1

   Organization; Qualification.    18

Section 3.2

   Authority Relative to this Agreement and the CCE Acquisition Agreement    19

Section 3.3

   TPC Interests.    20

Section 3.4

   Consents and Approvals    20

Section 3.5

   No Conflict or Violation    20

Section 3.6

   Financial Information    21

Section 3.7

   Contracts.    21

Section 3.8

   Compliance with Law    22

Section 3.9

   Permits    22

Section 3.10

   Litigation    22

Section 3.11

   Title to Properties    22

Section 3.12

   Employee Matters.    23

Section 3.13

   Labor Relations    26

Section 3.14

   Intellectual Property    26

Section 3.15

   Environmental Matters    27

Section 3.16

   Tax Matters.    28

Section 3.17

   Absence of Certain Changes or Events.    28

Section 3.18

   Absence of Undisclosed Liabilities    29

Section 3.19

   Brokerage and Finders’ Fees    29

Section 3.20

   Affiliated Transactions    29

Section 3.21

   Insurance.    29

Section 3.22

   Regulatory Matters.    29

Section 3.23

   Internal Controls.    30

Section 3.24

   Hedging    31

Section 3.25

   Bank Accounts; Powers of Attorney    31

Section 3.26

   Gas Imbalances    31

Section 3.27

   No Other Representations or Warranties    31 ARTICLE IV REPRESENTATIONS AND
WARRANTIES OF ETP    31

Section 4.1

   Corporate Organization; Qualification    31

Section 4.2

   Authority Relative to this Agreement    32

Section 4.3

   50% CCE Interest    32

 

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Section 4.4

   Consents and Approvals    32

Section 4.5

   No Conflict or Violation    33

Section 4.6

   Litigation    33

Section 4.7

   Availability of Funds    33

Section 4.8

   Brokerage and Finders’ Fees    33

Section 4.9

   Investment Representations.    33

Section 4.10

   No Other Representations or Warranties    34 ARTICLE V COVENANTS OF THE
PARTIES    34

Section 5.1

   Conduct of Business.    34

Section 5.2

   Access to Properties and Records.    37

Section 5.3

   Consents and Approvals.    38

Section 5.4

   Further Assurances    39

Section 5.5

   Employee Matters.    39

Section 5.6

   Tax Covenants.    45

Section 5.7

   Control of Administrative and Regulatory Proceedings    50

Section 5.8

   Maintenance of Insurance Policies.    50

Section 5.9

   Preservation of Records    51

Section 5.10

   Public Statements    51

Section 5.11

   Assignment of Trademarks.    52

Section 5.12

   Commercially Reasonable Efforts    52

Section 5.13

   Financial Statements; Financial Records of CCE.    52

Section 5.14

   Covenants Regarding the 50% CCE Interest.    54

Section 5.15

   No-Hire/Non-Solicitation    54

Section 5.16

   CCE Executive Committee    55

Section 5.17

   Directors’ and Officers’ Indemnification    55

Section 5.18

   TPC Notes    55 ARTICLE VI CONDITIONS    55

Section 6.1

   Mutual Conditions to the Closing    55

Section 6.2

   ETP’s Conditions to the Closing    56

Section 6.3

   CCE’s Conditions to the Closing    57 ARTICLE VII TERMINATION AND ABANDONMENT
   58

Section 7.1

   Termination    58

Section 7.2

   Effect of Termination    59 ARTICLE VIII SURVIVAL; INDEMNIFICATION    59

Section 8.1

   Survival.    59

Section 8.2

   Indemnification.    60

Section 8.3

   Calculation of Damages    63

Section 8.4

   Procedures for Third-Party Claims.    63

Section 8.5

   Procedures for Inter-Party Claims    64 ARTICLE IX MISCELLANEOUS PROVISIONS
   64

Section 9.1

   Interpretation    64

Section 9.2

   Disclosure Letters    65

 

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Section 9.3

   Payments    65

Section 9.4

   Expenses    65

Section 9.5

   Choice of Law    65

Section 9.6

   Assignment    65

Section 9.7

   Notices    65

Section 9.8

   Consent to Jurisdiction    67

Section 9.9

   No Right of Setoff    67

Section 9.10

   Time is of the Essence    67

Section 9.11

   Specific Performance    67

Section 9.12

   Entire Agreement    67

Section 9.13

   Third Party Beneficiaries    67

Section 9.14

   Counterparts    67

Section 9.15

   Severability    68

Section 9.16

   Headings    68

Section 9.17

   Waiver    68

Section 9.18

   Amendment    68

EXHIBITS

 

  A CCE Disclosure Letter

 

  B Terms of TPC Transition Services Agreement

 

  C Form of Second Amended and Restated LLC Agreement

 

  D Resolutions of CCE Executive Committee

 

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REDEMPTION AGREEMENT

This REDEMPTION AGREEMENT, dated as of September 14, 2006 (this “Agreement”), is
made and entered into by and between Energy Transfer Partners, L.P., a Delaware
limited partnership (“ETP”), and CCE Holdings, LLC, a Delaware limited liability
company (“CCE”).

W I T N E S S E T H:

WHEREAS, CCE, through its subsidiaries, owns and operates a network of natural
gas pipelines and is engaged in the business of the interstate transportation of
natural gas;

WHEREAS, an indirect Subsidiary of CCE owns all of the issued and outstanding
membership interests of Transwestern Pipeline Company, LLC, a Delaware limited
liability company (“TPC”);

WHEREAS, EFS-PA, LLC, a Delaware limited liability company, CDPQ Investments
(U.S.) Inc., a Delaware corporation, Lake Bluff Inc., a Delaware corporation,
Merrill Lynch Ventures, L.P. 2001, a Delaware limited partnership, and Kings
Road Holdings I LLC, a Delaware limited liability company (collectively, the
“Other CCE Owners”) own Class B membership interests in CCE that collectively
represent 50% of the outstanding membership interests in CCE (the “50% CCE
Interest”);

WHEREAS, concurrently with the execution and delivery of this Agreement, ETP has
entered into a Purchase and Sale Agreement, dated as of September 14, 2006, with
the Other CCE Owners pursuant to which ETP has agreed, subject to the terms and
conditions thereof, to purchase the 50% CCE Interest from the Other CCE Owners
(the “CCE Acquisition Agreement”);

WHEREAS, subject to the terms and conditions of this Agreement, CCE desires to
redeem the 50% CCE Interest that ETP proposes to acquire pursuant to the CCE
Acquisition Agreement by transferring to ETP all of the membership interests in
TPC (the “TPC Interests”) as a redemption payment;

WHEREAS, in connection with CCE’s redemption of the 50% CCE Interest to be owned
by ETP, CCE intends to cause (i) CrossCountry Energy, LLC, a Delaware limited
liability company that is wholly-owned by CCE (“CC Energy”), or one of its
affiliates, to borrow from lenders that are not Affiliates of CCE an amount
sufficient to enable CC Energy or such affiliate, after paying expenses related
to the incurrence of such debt, to contribute to TW Holdings an amount necessary
to repay all of the outstanding TW Holdings Debt (the “TW Debt Payoff Amount”)
plus the Cash Redemption Amount (as defined in Section 1.1 hereof) (the
“CC Energy Debt Proceeds Amount”), (ii) CC Energy to contribute the TW Debt
Payoff Amount to Transwestern Holding Company, LLC, a Delaware limited liability
company that is wholly-owned by CC Energy (“TW Holdings”), and (iii) cause TW
Holdings to repay all of its existing debt, in each case prior to the redemption
of the 50% CCE Interest, described in the preceding recital;

 

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WHEREAS, each of the Boards of Directors or other governing body of each of CCE
and ETP has approved, and deems it advisable and in the best interests of their
respective shareholders, partners and members to consummate the transactions
contemplated by, this Agreement upon the terms and subject to the conditions set
forth herein;

NOW, THEREFORE, for and in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, CCE and
ETP, intending to be legally bound hereby, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Specific Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:

“Action” shall mean any administrative, regulatory, judicial or other formal
proceeding, action, Claim, suit, investigation or inquiry by or before any
Governmental Authority, arbitrator or mediator.

“Adjustment Amount” shall mean $14,400,000.

“Affected Employees” shall mean the TPC Employees on the Closing Date, including
Transferring Shared Service Employees who become TPC Employees on the date
immediately prior to the Closing Date pursuant to the provisions of
Section 5.5(g).

“Affiliate” shall have the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.

“Agreement” shall mean this Redemption Agreement, together with the CCE
Disclosure Letter and the Exhibits hereto, as the same may be amended or
supplemented from time to time in accordance with the provisions hereof.

“Applicable Law” shall mean any statute, law, ordinance, executive order, rule
or regulation (including a regulation that has been formally promulgated in a
rule-making proceeding but, pending final adoption, is in proposed or temporary
form having the force of law); guideline or notice having the force of law; or
approval, permit, license, franchise, judgment, order, decree, injunction or
writ of any Governmental Authority applicable to a specified Person or specified
property, as in effect from time to time.

“Auditor” shall have the meaning set forth in Section 2.4(b).

“Base Compensation” shall have the meaning set forth in Section 5.5(f).

“Base Debt Amount” shall mean $520,000,000.

“Base Pro Forma Net Working Capital Amount” shall mean zero dollars.

“Benefit Programs or Agreements” shall have the meaning set forth in
Section 3.12(b).

 

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“Burdensome Condition” shall have the meaning set forth in Section 5.3(b).

“Business Day” shall mean a day other than a Saturday, Sunday or other day on
which banks located in New York City are authorized or required by law to close.

“Cap Amount” shall have the meaning set forth in Section 8.2(d).

“Cash Flow” shall have the meaning set forth in the Second Amended and Restated
LLC Agreement, calculated without duplication on a combined basis for CCE and
its Subsidiaries.

“Cash Redemption Amount” shall have the meaning set forth in Section 2.3(d)(iv)
hereof.

“Casualty Insurance Claims” shall have the meaning set forth in Section 5.9(a).

“CC Energy” shall have the meaning set forth in the Recitals to this Agreement.

“CC Energy Debt Proceeds Amount” shall have the meaning set forth in the
Recitals to this Agreement.

“CCE” shall have the meaning set forth in the Recitals to this Agreement.

“CCEA LLC” shall mean CCE Acquisition LLC, a Delaware limited liability company.

“CCEA Corp.” shall mean CCEA Corp., a Delaware corporation.

“CCE Acquisition” shall mean the acquisition of the 50% CCE Interest from the
Other CCE Owners pursuant to the terms and conditions of the CCE Acquisition
Agreement.

“CCE Acquisition Agreement” shall have the meaning set forth in the Recitals to
this Agreement.

“CCE Adjustment” shall have the meaning set forth in Section 2.4(c).

“CCE Annual Financial Statements” shall mean the audited balance sheets at
December 31, 2004 and 2005 and the statements of income, statements of members’
equity and statements of cash flow of CCE for the years ended December 31, 2004
and 2005.

“CCE Cash Flow Amount” shall mean the amount of Cash Flow of CCE for the period
from the date of the CCE Acquisition until the Closing Date (for purposes of
this definition of CCE Cash Flow Amount, the CCE Cash Flow Amount shall be
deemed to include without duplication the amount of Citrus Corp. cash dividends
paid after the Closing Date but relating to any portion of the period from the
date of the CCE Acquisition until the Closing Date; provided, however, that if
no dividends are paid by Citrus Corp. relating to such period, then the CCE Cash
Flow Amount shall be deemed to include without duplication 50% (i.e., CCE’s
share) of Citrus Corp. net income for such period).

“CCE Defined Contribution Plan” shall have the meaning set forth in Section
5.5(i).

 

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“CCE Disclosure Letter” means the letter dated September 14, 2006 from CCE to
ETP in the form attached as Exhibit A to this Agreement.

“CCE FAS 106 Report” shall mean the Southern Union Company Postretirement
Medical and Death Benefits for CrossCountry Energy Employees Application of
Statement of Financial Accounting Standards Nos. 106 and 132(R) to the Fiscal
Year Ending December 31, 2005.

“CCE Financial Statements” means the CCE Annual Financial Statements, the CCE
Six Month Interim Financial Statements, the CCE Nine Month Interim Financial
Statements and the CCE 2006 Financial Statements.

“CCE Flex Plans” shall have the meaning set forth in Section 5.5(h).

“CCE Indemnified Parties” shall have the meaning set forth in Section 8.2(b).

“CCE Medicare Eligible SPD” shall mean the Summary Plan Description Options PPO
Plan for CrossCountry Energy (Medicare Eligible Retired Employees).

“CCE Nine Month Interim Financial Statements” shall mean the unaudited balance
sheets, statements of income, statements of members’ equity and statements of
cash flow for CCE as of, and for the nine months ended, September 30, 2005 and
2006.

“CCE Six Month Interim Financial Statements” shall mean the unaudited balance
sheets, statements of income, statements of members’ equity and statements of
cash flow for CCE as of, and for the six months ended, June 30, 2005 and 2006.

“CCE LLC Agreement” means the Amended and Restated Limited Liability Company
Agreement of CCE, dated as of November 5, 2004, as amended by the First
Amendment thereto, dated as of December 2, 2004.

“CCE Returns” shall have the meaning set forth in Section 5.6(a)(i).

“CCE Stub Period Income Statements” means the unaudited income statements for
CCE for the three months ended December 31, 2005 and for the one month periods
ended December 31, 2004 and 2005.

“CCE S-X Financial Statements” shall mean the CCE Financial Statements, as
modified pursuant to the provisions of Section 5.13(b).

“CCE Under Age 65 SPD” shall mean the Summary Plan Description Options PPO Plan
for CrossCountry Energy (Retired Employees under age 65).

“CCE 2006 Financial Statements” shall mean the audited balance sheet, statement
of income, statement of members’ equity and statement of cash flow of CCE as of,
and for the year ended, December 31, 2006.

“CCES” shall mean CrossCountry Energy Services, LLC.

 

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“Citrus” shall mean CrossCountry Citrus, LLC, a Delaware limited liability
company.

“Citrus S-X Financial Statements” shall mean the Citrus Financial Statements, as
modified pursuant to the provisions of Section 5.13(b).

“Citrus 2006 Financial Statements” shall mean the audited balance sheet,
statement of income, statement of member’s equity and statement of cash flow of
Citrus as of, and for the year ended, December 31, 2006.

“Citrus Annual Financial Statements” shall mean the audited balance sheets at
December 31, 2004 and 2005 and the statements of income, statements of member’s
equity and statements of cash flow of Citrus for the years ended December 31,
2004 and 2005.

“Citrus Financial Statements” means the Citrus Annual Financial Statements, the
Citrus Six Month Interim Financial Statements, the Citrus Nine Month Interim
Financial Statements, and the Citrus 2006 Financial Statements.

“Citrus Nine Month Interim Financial Statements” shall mean the unaudited
balance sheets, statements of income, statements of member’s equity and
statements of cash flow for Citrus as of, and for the nine months ended,
September 30, 2005 and 2006.

“Citrus Six Month Interim Financial Statements” shall mean the unaudited balance
sheets, statements of income, statements of member’s equity and statements of
cash flow for Citrus as of, and for the six months ended, June 30, 2005 and
2006.

“Citrus Stub Period Income Statements” means the unaudited income statements for
Citrus for the three months ended December 31, 2005 and for the one month
periods ended December 31, 2004 and 2005.

“Claims” shall mean any and all claims, lawsuits, demands, causes of action,
investigations and other proceedings (whether or not before a Governmental
Authority).

“Closing Adjustment Amount” shall have the meaning set forth in Section 2.3(c).

“Closing Balance Sheet” shall have the meaning set forth in Section 2.4(a).

“Closing Date” shall have the meaning set forth in Section 2.2.

“Closing” shall have the meaning set forth in Section 2.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall mean the confidentiality agreement entered
into by and between ETP and Southern Union, dated July 25, 2006.

“Consolidated Income Tax Return” shall have the meaning set forth in
Section 5.6(a)(ix) hereof.

“Continuation Period” shall have the meaning set forth in Section 5.5(f).

 

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“Damages” shall mean all demands, Claims, causes of action, suits, judgments,
damages, amounts paid in settlement (with the approval of the Indemnifying Party
where applicable), penalties, Liabilities, losses or deficiencies, costs and
expenses, including reasonable attorney’s fees, court costs, expenses of
arbitration or mediation, and other out-of-pocket expenses incurred in
investigating or preparing the foregoing. “Damages” does not include incidental,
indirect or consequential damages, damages for lost profits or other special
damages or punitive or exemplary damages; provided, however, that in the case of
Third-Party Claims, “Damages” shall be deemed to include all forms of relief,
monetary and otherwise, asserted therein, without any of the foregoing
exceptions.

“Determination Date” shall have the meaning set forth in Section 2.4(b).

“Employee Benefit Plans” shall have the meaning set forth in Section 3.12(b).

“Encumbrances” shall mean any Claims, Liens, conditional and installment sale
agreements or other title retention agreements, activity and use limitations,
easements, deed restrictions, title defects, reservations, encumbrances and
charges of any kind, options, subordination agreements or adverse claim of any
kind.

“Enron Inactive Medical Plan” shall mean the Enron Corp. Medical Plan for
Inactive Participants.

“Enron Plan” shall mean any “employee benefit plan,” as defined in Section 3(3)
of ERISA, or any policy, plan, agreement or arrangement providing for employment
terms, change in control benefits, severance benefits, retention benefits,
insurance coverage (including any self-insured arrangements), workers’
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
or other forms of incentive compensation, or post-retirement insurance,
compensation or benefits (whether or not an ERISA plan) entered into, sponsored,
maintained, or contributed to by Enron Corp. or any of its ERISA Affiliates,
current or former, specifically including the Enron Corp. Cash Balance Plan
(formerly the Enron Corp. Retirement Plan), the Enron Corp. Savings Plan
(formerly the Enron Corp. Savings Plan and Enron Corp. Employee Stock Ownership
Plan, which were merged in August 2002), the Enron Prisma Energy Savings Plan,
the Portland General Electric Company Pension Plan and the Enron Inactive
Medical Plan.

“Enron VEBA” shall mean the Enron Gas Pipelines Employee Benefit Trust, as it
may be amended, which as of the date of this Agreement, is the subject of the
Enron VEBA Motion.

“Enron VEBA Motion” shall mean the Amended and Restated Motion of Enron Corp.,
et al, for an Order Pursuant to Sections 105 and 363 of the Bankruptcy Code,
Authorizing Termination of Employee Benefits Trust and Distribution of Trust
Assets, dated June 17, 2005, as it may be amended, which motion is currently
pending in the United States Bankruptcy Court for the Southern District of New
York.

“Environmental Claim” means any claim, loss, cost, expense, liability, penalty
or Damages arising, incurred or otherwise asserted pursuant to any Environmental
Law.

 

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“Environmental Laws” shall mean all foreign, federal, state and local laws,
regulations, rules and ordinances relating to pollution or protection of human
health or the environment, including laws relating to releases or threatened
releases of Hazardous Substances into the environment (including ambient air,
surface water, groundwater, land, surface and subsurface strata).

“Environmental Permit” shall mean any Permit, formal exemption, identification
number or other authorization issued by a Governmental Authority pursuant to an
applicable Environmental Law.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.

“ERISA Affiliate” shall mean, with respect to any Person, any corporation,
trade, business, or entity under common control with such Person, within the
meaning of Section 414(b), (c) or (m) of the Code or Section 4001 of ERISA.

“ERISA Plans” shall have the meaning set forth in Section 3.12(a).

“Estimated SUG Expansion Project Expenses” shall have the meaning set forth in
Section 2.3(a).

“ETP” shall have the meaning set forth in the recitals to this Agreement.

“ETP 401(k) Plan” shall have the meaning set forth in Section 5.5(i).

“ETP Adjustment” shall have the meaning set forth in Section 2.4(c).

“ETP Indemnified Parties” shall have the meaning set forth in Section 8.2(a).

“ETP Plans” shall have the meaning set forth in Section 5.5(c).

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the Regulations promulgated thereunder.

“Existing TPC Debt” shall mean the existing indebtedness of TPC pursuant to
(x) those certain $270,000,000 5.39% Senior Unsecured Notes due November 17,
2014 and $250,000,000 5.54% Senior Unsecured Notes due November 17, 2016 and
(y) that certain $230,000,000 Amended and Restated Credit Agreement dated as of
December 21, 2005 among TPC and the Lenders, Administrative Agent and Issuing
Bank, Syndication Agent, Co-Documentation Agents and Arrangers parties thereto.

“Existing TW Holdings Debt” shall mean the existing indebtedness of TW Holdings
pursuant to (x) those certain $125,000,000 5.64% Senior Unsecured Notes due
November 17, 2014, and $100,000,000 5.79% Senior Unsecured Notes due
November 17, 2016, and (y) that certain $230,000,000 Amended and Restated Credit
Agreement among TW Holdings, CrossCountry Citrus, LLC, as guarantor, and the
Lenders, Administrative Agent, Syndication Agent, Co-Documentation Agents, and
Arrangers parties thereto.

 

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“FCC” means the Federal Communication Commission.

“FERC” shall mean the Federal Energy Regulatory Commission including any
individual office or department within FERC.

“For Cause” shall have the meaning set forth in Section 5.5(f).

“GAAP” shall mean United States generally accepted accounting principles as in
effect from time to time, applied on a consistent basis.

“Governmental Authority” shall mean any executive, legislative, judicial,
tribal, regulatory, taxing or administrative agency, body, commission,
department, board, court, tribunal, arbitrating body or authority of the United
States or any foreign country, or any state, local or other governmental
subdivision thereof.

“Hazardous Substances” shall mean any chemicals, materials or substances defined
as or included in the definition of “hazardous substances”, “hazardous wastes”,
“hazardous materials”, “hazardous constituents”, “restricted hazardous
materials”, “extremely hazardous substances”, “toxic substances”,
“contaminants”, “pollutants”, “toxic pollutants”, or words of similar meaning
and regulatory effect under any applicable Environmental Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

“Indemnified Party” shall have the meaning set forth in Section 8.2(c).

“Indemnifying Party” shall have the meaning set forth in Section 8.2(c).

“Initial Termination Date” shall have the meaning set forth in Section 7.1(b).

“Insurance Policies” shall have the meaning set forth in Section 3.21(a).

“IRS” shall mean the Internal Revenue Service.

“June 30 TPC Expansion Project Expenses” shall mean $7,750,000.

“Knowledge” shall mean, as to CCE, the actual knowledge, after due inquiry, of
the persons listed on Section 1.1(a) of the CCE Disclosure Letter, or any Person
who replaces any of such listed persons between the date of this Agreement and
the Closing Date.

“Liabilities” shall mean any and all debts, liabilities, commitments and
obligations, whether or not fixed, contingent or absolute, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whether or
not required by GAAP to be reflected in financial statements or disclosed in the
notes thereto.

“Liens” shall mean any lien, mortgage, pledge, charge, claim, assignment by way
of security or similar security interest.

“LIBOR” shall mean the London Interbank Offer Rate.

 

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“Make-Whole Amount” shall have the meaning set forth in the TW Holdings Note
Purchase Agreement.

“Material Adverse Effect” shall mean any change or effect that is materially
adverse to the business, financial condition or assets of the business of TPC;
provided, however, that Material Adverse Effect shall exclude any change or
effect due to (a) the negotiation, execution, announcement and consummation of
this Agreement and the transactions contemplated hereby, including the impact
thereof on relationships, contractual or otherwise, with customers, suppliers,
distributors, partners, joint owners or venturers, or employees, (b) any action
taken by CCE, ETP or any of their respective representatives or Affiliates or
other action required or permitted by the terms of this Agreement or necessary
to consummate the transactions contemplated by this Agreement, (c) the general
state of the industries in which TPC operates (including (i) pricing levels,
(ii) changes in the international, national, regional or local wholesale or
retail markets for natural gas, (iii) changes in the North American, national,
regional or local interstate natural gas pipeline systems, and (iv) rules,
regulations or decisions of the FERC or the courts affecting the interstate
natural gas transmission industry as a whole, or rate orders, motions,
complaints or other actions affecting TPC), except, in all cases for such
effects which disproportionately impact TPC, (d) general legal, regulatory,
political, business, economic, capital market and financial market conditions
(including prevailing interest rate levels), or conditions otherwise generally
affecting the industries in which TPC operates, except, in all cases, for such
effects which disproportionately impact TPC and (e) any condition set forth in
the CCE Disclosure Letter (but only to the extent set forth therein).

“Material Contract” shall have the meaning set forth in Section 3.7(a).

“Minimum Claim Amount” shall have the meaning set forth in Section 8.2(d).

“Net Working Capital Amount” as of a particular date shall mean (a) the current
assets of TPC as of such date minus (b) the current liabilities of TPC as of
such date, with both current assets and current liabilities determined in
accordance with GAAP, applied in a manner consistent with the preparation of the
Pro Forma Adjusted Balance Sheet (subject to the exceptions from GAAP relating
to the adjustments reflected on the Pro Forma Adjusted Balance Sheet).

“NGA” shall have the meaning set forth in Section 3.22.

“NGPA” shall have the meaning set forth in Section 3.22.

“Organizational Documents” shall mean certificates of incorporation, by-laws,
certificates of formation, limited liability company operating agreements,
partnership or limited partnership agreements or other formation or governing
documents of a particular entity.

“Other CCE Owners” shall have the meaning set forth in the Recitals of this
Agreement.

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

 

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“PEPL” shall mean Panhandle Eastern Pipe Line Company, LP, a Delaware limited
partnership.

“Permitted Encumbrances” shall mean (a) zoning, planning and building codes and
other applicable laws regulating the use, development and occupancy of real
property and permits, consents and rules under such laws; (b) encumbrances,
easements, rights-of-way, covenants, conditions, restrictions and other matters
affecting title to real property (other than Liens) which do not materially
detract from the value of such real property or materially restrict the use of
such real property; (c) leases and subleases of real property; (d) all
easements, encumbrances or other matters that are necessary for utilities and
other similar services on real property; (e) Liens to secure indebtedness
reflected on the TPC Financial Statements, (f) Liens to secure indebtedness
incurred after the date thereof, to the extent permitted pursuant to
Section 5.1(b)(xii), (g) Liens for Taxes and other governmental levies not yet
due and payable or, if due, (i) not delinquent or (ii) being contested in good
faith by appropriate proceedings during which collection or enforcement against
the property is stayed and with respect to which adequate reserves have been
established on the books of TPC and are being maintained to the extent required
by GAAP, (h) mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s,
carriers’ or other similar Liens, including all statutory Liens, arising or
incurred in the ordinary course of business; (i) original purchase price
conditional sales contracts and equipment leases with third parties entered into
in the ordinary course of business, (j) Liens that do not materially interfere
with or materially affect the value or use of the respective underlying asset to
which such Liens relate, (k) Encumbrances that are capable of being cured
through condemnation procedures under the NGA at a total cost to TPC of less
than $1,000,000 and (l) Encumbrances that are reflected in any Material
Contract.

“Person” shall mean any natural person, corporation, company, general
partnership, limited partnership, limited liability partnership, joint venture,
proprietorship, limited liability company, or other entity or business
organization or vehicle, trust, unincorporated organization or Governmental
Authority or any department or agency thereof.

“Post-Closing Adjustment Amount” shall have the meaning set forth in
Section 2.4(a).

“Post-Closing Taxes” shall have the meaning set forth in Section 5.6(a)(iv).

“Pre-Closing Taxes” shall have the meaning set forth in Section 5.6(a)(iv).

“Pro Forma Adjusted Balance Sheet” shall mean the pro forma balance sheet of TPC
as of June 30, 2006 derived from the TPC Interim Balance Sheet, adjusted to:

(a) reflect, among the other matters reflected in the adjustments set forth in
Section 1.1(b) of the CCE Disclosure Letter, that current liabilities shall
exclude short term debt and current portions of long term debt; and

(b) reflect as a reduction in cash the payment of a $22,000,000 cash
distribution to the sole member of TPC to be made prior to the Closing.

The Pro Forma Adjusted Balance Sheet, reflecting the adjustments listed above,
is set forth in Section 1.1(b) of the CCE Disclosure Letter.

 

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“Real Property” shall have the meaning set forth in Section 3.11.

“Regulation” shall mean any rule or regulation of any Governmental Authority
having the effect of Law or of any rule or regulation of any self-regulatory
organization, such as the New York Stock Exchange.

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

“Rights-Of-Way” shall have the meaning set forth in Section 3.11.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 and the Regulations
promulgated thereunder.

“SEC” means the Securities and Exchange Commission.

“Second Amended and Restated LLC Agreement” shall mean that certain Second
Amended and Restated Limited Liability Company Agreement of CCE, in the form
attached hereto as Exhibit D to be entered into by and among ETP, CCEA LLC and
CCEA Corp. as of the date of the CCE Acquisition.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
Regulations promulgated thereunder.

“Severance Benefits” shall have the meaning set forth in Section 5.5(f).

“Shared Service Employees” shall have the meaning set forth in Section 5.5(g).

“Southern Union” shall mean Southern Union Company, a Delaware corporation.

“Straddle Period” shall have the meaning set forth in Section 5.6(a)(ii).

“Straddle Period Return(s)” shall have the meaning set forth in
Section 5.6(a)(ii).

“Straddle Statement” shall have the meaning set forth in Section 5.6(a)(ii).

“Subsidiary” of any entity means, at any date, any Person (a) the accounts of
which would be consolidated with and into those of the applicable entity in such
entity’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date or (b) of which securities or
other ownership interests representing more than fifty percent (50%) of the
equity or more than fifty percent (50%) of the ordinary voting power or, in the
case of a partnership, more than fifty percent (50%) of the general partnership
interests or more than fifty percent (50%) of the profits or losses of which
are, as of such date, owned, controlled or held by the applicable entity or one
or more subsidiaries of such entity.

“SUG Expansion Project Expenses” shall mean all expenditures incurred at any
time prior to the Closing Date by Affiliates of TPC (other than TPC), including
Southern Union, Valley Pipeline Company, LP and PEPL, in connection with the TPC
Expansion Projects that have not been reimbursed by TPC on or prior to the
Closing Date.

 

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“Survival Period” shall have the meaning set forth in Section 8.1(c).

“Tax Claim” shall have the meaning set forth in Section 5.6(d)(i).

“Tax Indemnified Party” shall have the meaning set forth in Section 5.6(d)(i).

“Tax Indemnifying Party” shall have the meaning set forth in Section 5.6(d)(i).

“Tax Return” shall mean any report, return, declaration, or other information
required to be supplied to a Governmental Authority in connection with Taxes
including any claim for refund or amended return.

“Taxes” shall mean all taxes, levies or other like assessments, including net
income, gross income, gross receipts, capital gains, profits, environmental,
excise, value added, ad valorem, real or personal property, withholding, asset,
sales, use, transfer, registration, license, payroll, transaction, capital,
business, occupation, corporation, employment, withholding, wage, net worth,
franchise, minimum, alternative minimum, and estimated taxes, or other
governmental taxes imposed by or payable to any foreign, Federal, state or local
taxing authority, whether computed on a separate, consolidated, unitary,
combined or any other basis; and in each instance such term shall include any
interest, penalties or additions to tax attributable to any such Tax.

“Third-Party Claim” shall have the meaning set forth in Section 8.4(a).

“Threshold Amount” shall have the meaning set forth in Section 8.2(d).

“Total Debt” shall mean all short-term and long-term indebtedness of TPC as
reflected on its balance sheet, prepared in accordance with GAAP, of TPC as of a
particular date.

“TPC” shall have the meaning set forth in the Recitals of this Agreement.

“TPC 2006 Financial Statements” shall mean the audited balance sheet, statement
of income, statement of members’ equity and statement of cash flow of TPC as of,
and for the period ended, December 31, 2006.

“TPC Annual Financial Statements” shall mean the audited balance sheets at
December 31, 2004 and 2005 and the statements of income, statements of members’
interests and statements of cash flow for the years ended December 31, 2004 and
2005, in each case for TPC.

“TPC Cash Flow Amount” shall mean the amount of cash flow of TPC included in the
CCE Cash Flow Amount for the period from the date of the CCE Acquisition until
the Closing Date.

“TPC Employees” shall mean all employees employed by TPC, including employees
absent due to vacation, illness or similar circumstance, workers’ compensation,
short-term

 

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disability, military leave, maternity leave or paternity leave, leave under the
Family and Medical Leave Act of 1993 and other approved leaves of absence from
active employment. When the term “TPC Employees” is used herein in reference to
a specific date, “TPC Employees” shall include the employees of TPC referenced
in the preceding sentence as of such date.

“TPC Expansion Project Expenses” shall mean all expenditures incurred at any
time prior to the Closing Date (including amounts properly accrued in accordance
with GAAP and included on the Closing Balance Sheet) by TPC in connection with
the TPC Expansion Projects, including reimbursed SUG Expansion Project Expenses.

“TPC Expansion Projects” shall mean the Phoenix and San Juan expansion projects
as approved by the Executive Committee of CCE by written consent on
September 14, 2006.

“TPC Financial Statements” shall mean the TPC Annual Financial Statements, the
TPC Six Month Interim Financial Statements, the TPC Nine Month Interim Financial
Statements and the TPC 2006 Financial Statements.

“TPC Interests” shall have the meaning set forth in the Recitals of this
Agreement.

“TPC Interests Assignment” means the assignment of the TPC Interests in a form
to be agreed to by ETP and CCE prior to the Closing Date.

“TPC Interim Balance Sheet” shall mean the balance sheet as of June 30, 2006
included in the TPC Six Month Interim Financial Statements.

“TPC Marks” shall have the meaning set forth in Section 5.12.

“TPC Nine Month Interim Financial Statements” shall mean the unaudited balance
sheets, statements of income, statements of members’ equity and statements of
cash flow of TPC as of, and for the nine months ended, September 30, 2005 and
2006.

“TPC Note Purchase Agreement” shall mean the note purchase agreement, dated as
of November 17, 2004, between TPC and the note purchasers listed therein.

“TPC Permits” shall have the meaning set forth in Section 3.9.

“TPC Rate Case” shall mean the Natural Gas Act Section 4 rate case which TPC is
required to file pursuant to the terms and conditions of TPC’s rate settlement
in FERC Docket Nos. RP95-271, et al., together with any proceeding consolidated
with or ancillary thereto.

“TPC Severance Plan” shall mean the Transwestern Pipeline Company Severance Pay
Plan.

“TPC S-X Financial Statements” shall mean the TPC Financial Statements, as
modified pursuant to the provisions of Section 5.13(b).

 

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“TPC Six Month Interim Financial Statements” shall mean the unaudited balance
sheets, statements of income, statements of members’ equity and statements of
cash flow of TPC as of, and for the six months ended, June 30, 2005 and 2006.

“TPC Stub Period Income Statements” means the unaudited income statements for
TPC for the three months ended December 31, 2005 and for the one month periods
ended December 31, 2004 and 2005.

“TPC Transition Services Agreement” shall mean a Transition Services Agreement
to be agreed to by CCE, PEPL and ETP prior to the Closing Date, which shall
include the terms and conditions set forth on Exhibit B to this Agreement.

“TPC VEBA” shall mean the Transwestern Pipeline Company, LLC VEBA to Provide for
Retiree Health Care and Other Benefits.

“Transfer Tax(es)” shall have the meaning set forth in Section 5.6(e).

“Transferring Shared Service Employees” shall have the meaning set forth in
Section 5.5(g).

“Treasury Regulation” shall mean the income Tax regulations, including temporary
and proposed regulations, promulgated under the Code, as amended.

“TW Holdings” shall have the meaning set forth in the Recitals of this
Agreement.

“TW Holdings Note Purchase Agreement” shall mean the Note Purchase Agreement,
dated November 17, 2004, among TW Holdings and the note purchasers named
therein.

“50% CCE Interest” shall have the meaning set forth in the Recitals of this
Agreement.

“50% CCE Interest Assignment” means the assignment of the 50% CCE Interest in a
form to be agreed to by ETP and CCE prior to the Closing Date.

ARTICLE II

REDEMPTION OF 50% CCE INTEREST

Section 2.1 Agreement to Redeem 50% CCE Interest. Subject to the terms and
conditions of this Agreement, at the Closing, (i) CCE shall cause TW Holdings to
convey, assign, transfer and deliver to ETP the TPC Interests, free and clear of
all Encumbrances, and (ii) ETP shall convey, assign, transfer and deliver to CCE
the 50% CCE Interest. At the Closing, if the Cash Redemption Amount is positive,
CCE shall pay to ETP the Cash Redemption Amount by wire transfer of immediately
available funds to an account designated in writing by ETP or, in the event that
the Cash Redemption Amount is negative, then ETP shall pay to CCE the absolute
value of the Cash Redemption Amount by wire transfer of immediately available
funds to an account designated in writing by CCE.

Section 2.2 Time and Place of Closing. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, the closing of the
transactions contemplated by

 

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this Agreement (the “Closing”) shall take place at the offices of Vinson &
Elkins L.L.P., 1001 Fannin Street, 2300 First City Tower, Houston, Texas, at
10:00 a.m., local time, on the next Business Day that is both the first Business
Day of a calendar month and at least five (5) Business Days after the date on
which all of the conditions to the Closing specified in Article VI hereof (other
than the deliveries specified in Section 2.5 and Section 2.6, which deliveries
shall be made at the Closing) have been satisfied or waived, or at such other
place or time as ETP and CCE may mutually agree in writing. The Closing shall be
effective as of 12:01 a.m. The date and time at which the Closing actually
occurs is hereinafter referred to as the “Closing Date.”

Section 2.3 Pre-Closing Matters.

(a) At least three (3) Business Days prior to the Closing Date, CCE shall
deliver to ETP its good faith estimate of the amount of the SUG Expansion
Project Expenses (the “Estimated SUG Expansion Project Expenses”), together with
reasonably detailed support for such estimate.

(b) CCE shall deliver to ETP its calculations of the Closing Adjustment Amount
(as defined in Section 2.3(c)) within three (3) Business Days prior to the
Closing Date and shall provide, upon reasonable advance notice, ETP and ETP’s
accountants prompt and full reasonable access during normal business hours to
the personnel, accountants and books and records of CCE, to the extent
reasonably related to the preparation of the Closing Adjustment Amount (and the
elements of such calculation). ETP and CCE shall in good faith attempt to
resolve any objections of ETP to such calculation of the Closing Adjustment
Amount; if ETP and CCE are in disagreement with respect to the calculation of
the Closing Adjustment Amount as of the Closing Date, the Closing Adjustment
Amount delivered by CCE to ETP pursuant to this Section 2.3, as adjusted to
reflect any changes to the Closing Adjustment Amount agreed to by the parties,
prior to the Closing Date shall be utilized for purposes of determining the Cash
Redemption Amount payable at the Closing.

(c) The “Closing Adjustment Amount” shall mean an amount equal to (i) the
Estimated SUG Expansion Project Expenses plus (ii) 50% of the June 30 TPC
Expansion Project Expenses plus (iii) 50% of the Make-Whole Amount actually paid
by TW Holdings pursuant to the TW Holdings Note Purchase Agreement plus (iv) the
Adjustment Amount.

(d) Prior to the Closing Date, CCE shall cause (i) CC Energy or one of its
affiliates (such entity to be reasonably determined by CCE) to incur debt in an
amount equal to the CC Energy Debt Proceeds Amount plus the amount necessary for
the payment of expenses related to the incurrence of such debt, (ii) CC Energy
to contribute to TW Holdings the CC Energy Debt Proceeds Amount, (iii) TW
Holdings to repay all of the outstanding TW Holdings Debt, (iv) CC Energy to
distribute to CCE an amount equal to $30,000,000 (Thirty Million Dollars) less
the Closing Adjustment Amount (the difference between $30,000,000 (Thirty
Million Dollars) and the Closing Adjustment Amount is referred to herein as the
“Cash Redemption Amount”), (v) TW Holdings to distribute the TPC Interests to CC
Energy, and (vi) CC Energy to distribute the TPC Interests to CCE.

 

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Section 2.4 Post-Closing Adjustment.

(a) No later than 60 days after the Closing Date, CCE shall prepare and deliver
to ETP (i) a balance sheet of TPC as of the close of business on the date
immediately prior to the Closing Date (the “Closing Balance Sheet”), and (ii) a
calculation of the “Post-Closing Adjustment Amount,” which shall mean the amount
equal to (w) 50% of the difference obtained by subtracting (A) the sum of the
Base Pro Forma Net Working Capital Amount, the Total Debt as of the Closing
Date, and the June 30 TPC Expansion Project Expenses from (B) the sum of the Net
Working Capital Amount as of the Closing Date, as reflected on the Closing
Balance Sheet, the Base Debt Amount, and the TPC Expansion Project Expenses,
calculated as of the Closing Date, minus (x) 50% of the difference obtained by
subtracting the TPC Cash Flow Amount from the CCE Cash Flow Amount plus (y) the
SUG Expansion Project Expenses as of the Closing Date minus (z) the Estimated
SUG Expansion Project Expenses, which calculation may result in an amount that
is positive or negative (together with reasonable back-up information providing
the basis for such balance sheet and other calculations). In order for CCE to
prepare the Closing Balance Sheet and calculate the Post-Closing Adjustment
Amount, ETP will provide to CCE and CCE’s accountants prompt and full access to
the personnel, accountants and books and records of TPC (and shall provide
copies of the applicable portions of such books and records as may be reasonably
requested), to the extent reasonably related to the preparation of the Closing
Balance Sheet and the calculation of the Post-Closing Adjustment Amount (and the
elements of such calculation). In order for ETP to review the Closing Balance
Sheet and the calculation of the Post-Closing Adjustment Amount, CCE will
provide to ETP and ETP’s accountants prompt and full access to the personnel,
accountants and books and records of CCE and its Subsidiaries used by CCE (and
shall provide copies of the applicable portions of such books and records as may
be reasonably requested), to the extent reasonably related to the preparation of
the Closing Balance Sheet and the calculation of the Post-Closing Adjustment
Amount (and the elements of such calculation). The Closing Balance Sheet and the
calculation of the Post-Closing Adjustment Amount relating to TPC shall be
prepared in a manner consistent with the preparation of the Pro Forma Adjusted
Balance Sheet (subject to, in the case of the Closing Balance Sheet, the
exceptions from GAAP relating to the adjustments reflected on the Pro Forma
Adjusted Balance Sheet).

(b) Disputes. If ETP disagrees with the calculation of the Post-Closing
Adjustment Amount, it shall notify CCE of such disagreement in writing within
thirty (30) days after its receipt of the last item to be received by ETP
pursuant to the first sentence of Section 2.4(a), which notice shall set forth
in detail the particulars of such disagreement. In the event that ETP does not
provide such a notice of disagreement within such thirty (30) day period, ETP
shall be deemed to have accepted the Closing Balance Sheet and the calculation
of the Post-Closing Adjustment Amount (and each element of such calculation)
delivered by CCE, which shall be final, binding and conclusive for all purposes
hereunder. In the event any such notice of disagreement is timely provided by
ETP, then ETP and CCE shall use their commercially reasonable efforts for a
period of thirty (30) days (or such longer period as they may mutually agree) to
resolve any disagreements with respect to the calculation of the Post-Closing
Adjustment Amount (or any element thereof). If, at the end of such period, they
are unable to resolve such disagreements, then, upon the written request of
either party, an independent accounting firm (not providing services to ETP or
CCE) acceptable to ETP and CCE (the “Auditor”) shall resolve any remaining
disagreements. The Auditor shall determine as promptly

 

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as practicable (but in any event within sixty (60) days) following the date on
which such dispute is referred to the Auditor, based solely on written
submissions, which shall be forwarded by ETP and CCE to the Auditor within
thirty (30) days following the Auditor’s selection, whether the Closing Balance
Sheet was prepared in accordance with the standards set forth in this
Section 2.4 with respect to any items identified as disputed in the notice of
disagreement and not previously resolved by ETP and CCE, and if not, whether and
to what extent (if any) the Post-Closing Adjustment Amount (or any element
thereof) requires adjustment. Each party shall bear its own expenses and the
fees and expenses of its own representatives and experts in connection with the
preparation, review, dispute (if any) and final determination of the Closing
Balance Sheet and the Post-Closing Adjustment Amount. The parties shall share
the costs, expenses and fees of the Auditor in inverse proportion to the extent
to which their respective positions are sustained (e.g., if CCE’s position is
one hundred percent (100%) sustained, it shall bear none of such costs,
expenses, and fees of the Auditor). The determination of the Auditor shall be
final, conclusive and binding on the parties. The Auditor’s determination of the
amount of the Post-Closing Adjustment Amount shall then be deemed to be the
Post-Closing Adjustment Amount for purposes of this Section 2.4. The date on
which such items are accepted or finally determined in accordance with this
Section 2.4 is referred as to the “Determination Date.” As used in this
Agreement, the term “commercially reasonable efforts” shall not include efforts
which require the performing party (i) to do any act that is unreasonable under
the circumstances, (ii) to make any capital contribution not expressly
contemplated hereunder, (iii) to amend or waive any rights under this Agreement,
or (iv) to incur or expend any funds other than reasonable out-of-pocket
expenses incurred in satisfying its obligations hereunder, including the
reasonable fees, expenses and disbursements of accountants, counsel and other
professionals.

(c) ETP and CCE Adjustments. If the Post-Closing Adjustment Amount is positive,
then ETP shall pay to CCE an amount equal to the Post-Closing Adjustment Amount
(the “ETP Adjustment”), and if the Post-Closing Adjustment Amount is negative,
then CCE shall pay to ETP an amount equal to the absolute value of the
Post-Closing Adjustment Amount (the “CCE Adjustment”). The CCE Adjustment, if
any, and the ETP Adjustment, if any, shall bear simple interest at a rate equal
to daily average one month LIBOR plus one percent (1%) per annum measured from
the Closing Date to the date of such payment. Amounts owing by CCE, if any,
pursuant to this Section 2.4 shall be paid by CCE within five (5) Business Days
after the Determination Date by delivery of immediately available funds to an
account designated by ETP. Amounts owing by ETP, if any, pursuant to this
Section 2.4 shall be paid by ETP within five (5) Business Days after the
Determination Date by delivery of immediately available funds to an account
designated by CCE.

(d) CCE Capital Contributions. ETP shall have no obligation to make any capital
contributions pursuant to the CCE LLC Agreement as the owner of the 50% CCE
Interest following the consummation of the transactions contemplated by the CCE
Acquisition Agreement unless this Agreement is terminated in accordance with
Article VII hereof.

Section 2.5 Deliveries by CCE at the Closing. At the Closing, CCE shall deliver,
or cause its appropriate Affiliates to deliver, to ETP:

(a) an executed copy of the TPC Interests Assignment;

 

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(b) a cross-receipt acknowledging receipt of the 50% CCE Interest Assignment;

(c) a certificate from an authorized officer of CCE, dated as of the Closing
Date, to the effect that the conditions set forth in Section 2.3(d),
Section 6.2(a), Section 6.2(c), Section 6.2(g) and Section 6.2(i) of this
Agreement have been satisfied;

(d) all other previously undelivered documents required by this Agreement to be
delivered by CCE or its Affiliates to ETP at or prior to the Closing;

(e) resignations of each of the managers and officers (or persons acting in
similar capacities) of TPC who are not employees of TPC;

(f) the TPC Transition Services Agreement, duly executed by CCE and PEPL; and

(g) all such other instruments of sale, assignment, conveyance and transfer and
releases, consents and waivers as in the reasonable opinion of ETP may be
necessary to effect the sale, transfer, assignment, conveyance and delivery of
the TPC Interests to ETP in accordance with this Agreement, in each case, as is
necessary to effect the transactions contemplated by this Agreement.

Section 2.6 Deliveries by ETP at the Closing. At the Closing, ETP shall deliver
to CCE:

(a) an executed copy of the 50% CCE Interest Assignment;

(b) a cross-receipt acknowledging receipt of the TPC Interests Assignment;

(c) a certificate from an authorized officer of ETP, dated as of the Closing
Date, to the effect that the conditions set forth in Section 6.3(a) and
Section 6.3(c) of this Agreement have been satisfied;

(d) the TPC Transition Services Agreement, duly executed by ETP; and

(e) all other previously undelivered documents required by this Agreement to be
delivered by ETP or its Affiliates to CCE at or prior to the Closing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF CCE

CCE hereby represents and warrants to ETP as follows:

Section 3.1 Organization; Qualification.

(a) CCE is a limited liability company duly organized, validly existing and duly
qualified or licensed and in good standing under the laws of the state or
jurisdiction of its formation and has all requisite corporate power to own,
lease and operate its properties and to

 

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carry on its business as currently conducted. CCE is duly qualified or licensed
to do business as a foreign limited liability company, and is, and has been, in
good standing in each jurisdiction in which the nature of its business or the
property it owns, leases or operates requires it to so qualify, be licensed or
be in good standing, except for such failures to be qualified, licensed or in
good standing that would not have a Material Adverse Effect. The CCE LLC
Agreement is a legal, valid and binding agreement of the parties specified as
parties thereto, enforceable against the parties thereto in accordance with its
terms, except that such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors’ rights generally or general principles of equity.

(b) CC Energy, TW Holdings and TPC are limited liability companies duly
organized, validly existing and duly qualified or licensed and in good standing
under the laws of the state or jurisdiction of their respective formation and
have all requisite limited liability company power, as applicable, to own, lease
and operate their respective properties and to carry on their respective
businesses as currently conducted. True and correct copies of the Organizational
Documents of TPC with all amendments thereto to the date hereof, have been made
available by CCE to ETP or its representatives. CC Energy, TW Holdings and TPC
are each duly qualified or licensed to do business as foreign limited liability
companies and are, and have been, in good standing in each jurisdiction in which
the nature of the respective businesses conducted by them or the property they
own, lease or operate requires them to so qualify, be licensed or be in good
standing except where the failure to be so authorized, qualified or licensed and
in good standing would not have a Material Adverse Effect. Section 3.1(b) of the
CCE Disclosure Letter sets forth all of the jurisdictions in which TPC is
qualified to do business.

Section 3.2 Authority Relative to this Agreement and the CCE Acquisition
Agreement. CCE has full limited liability company power and authority to execute
and deliver this Agreement and the other agreements, documents and instruments
to be executed and delivered by it in connection with this Agreement, and to
consummate the transactions contemplated hereby and thereby. Except as set forth
in Section 3.2 of the CCE Disclosure Letter, the execution, delivery and
performance of this Agreement and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by all the necessary action on the part of CCE, and
no other corporate or other proceedings on the part of CCE or its members are
necessary to authorize this Agreement and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement, to
consummate the transactions contemplated hereby and thereby or to consummate the
transactions contemplated hereby or thereby. The resolutions attached hereto as
Exhibit D have been duly approved and adopted by all of the members of the
Executive Committee of CCE in accordance with the terms of the CCE LLC
Agreement. This Agreement has been, and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement as of
the Closing Date will be, duly and validly executed and delivered by CCE, and
assuming that this Agreement and the other agreements, documents and instruments
to be executed and delivered in connection with this Agreement constitute legal,
valid and binding agreements of each of the other parties hereto and thereto,
are (in the case of this Agreement) or will be as of the Closing Date (in the
case of the other agreements, documents and instruments to be executed and
delivered in connection with this Agreement) enforceable against CCE in
accordance with their respective terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors’ rights generally or general
principles of equity.

 

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Section 3.3 TPC Interests.

(a) The TPC Interests are duly authorized, validly issued, fully paid membership
interests of TPC and were not issued in violation of any preemptive rights.
Except as set forth in Section 3.3(a) of the CCE Disclosure Letter, (i) there
are no membership interests of TPC authorized, issued or outstanding or reserved
for any purpose other than the TPC Interests, and (ii) there are no (A) existing
options, warrants, calls, rights of first refusal, preemptive rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the TPC Interests, obligating CCE, TPC or any of their
respective Affiliates to issue, transfer or sell, or cause to be issued,
transferred or sold, any of the TPC Interests, (B) outstanding securities of
CCE, TPC or any of their respective Affiliates that are convertible into or
exchangeable or exercisable for any of the TPC Interests, (C) options, warrants
or other rights to purchase from CCE, TPC or any of their respective Affiliates
any such convertible or exchangeable securities or (D) other than this
Agreement, contracts, agreements or arrangements of any kind relating to the
issuance of any of the TPC Interests, or any such options, warrants or rights,
pursuant to which, in any of the foregoing cases, CCE, TPC or any of their
respective Affiliates are subject or bound.

(b) Except as set forth in Section 3.3(b) of the CCE Disclosure Letter, TW
Holdings owns all of the issued and outstanding TPC Interests and has good and
valid title to the TPC Interests, free and clear of all Encumbrances or other
defects in title, and the TPC Interests have not been pledged or assigned to any
Person. At the Closing, the TPC Interests will be transferred to ETP free and
clear of all Encumbrances. The TPC Interests are not subject to any restrictions
on transferability or voting agreements other than those imposed by this
Agreement and by applicable securities laws.

(c) Except as set forth in Section 3.3(c) of the CCE Disclosure Letter, TPC does
not have any subsidiaries or any stock or other equity interest (controlling or
otherwise) in any corporation, limited liability company, partnership, joint
venture or other entity.

Section 3.4 Consents and Approvals. Except as set forth in Section 3.4 of the
CCE Disclosure Letter, neither CCE nor any of its Affiliates requires any
consent, approval or authorization of, or filing, registration or qualification
with, any Governmental Authority, or any other Person, as a condition to the
execution and delivery of this Agreement or the performance of its obligations
hereunder, except where the failure to obtain such consent, approval or
authorization of, or filing of, registration or qualification with, any
Governmental Authority, or any other Person would not materially and adversely
impact the operations of TPC as currently conducted.

Section 3.5 No Conflict or Violation. Except as set forth in Section 3.5 of the
CCE Disclosure Letter, the execution, delivery and performance by CCE of this
Agreement does not:

(a) violate or conflict with any provision of the Organizational Documents of
CCE or TPC;

 

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(b) violate any applicable provision of a law, statute, judgment, order, writ,
injunction, decree, award, rule or regulation of any Governmental Authority,
except where such violation would not have a Material Adverse Effect; or

(c) violate, result in a breach of, constitute (with due notice or lapse of time
or both) a default or cause any obligation, penalty or premium to arise or
accrue under any Material Contract, lease, loan, mortgage, security agreement,
trust indenture or other material agreement or instrument to which TPC is a
party or by which it is bound or to which any of its properties or assets is
subject, except as would not have a Material Adverse Effect.

Section 3.6 Financial Information. The CCE Annual Financial Statements and the
CCE Six Month Interim Financial Statements present fairly in all material
respects, in accordance with GAAP consistently applied, the financial condition
and results of operation of CCE as of the dates thereof and for the periods set
forth therein, subject, in the case of the CCE Six Month Interim Financial
Statements, to normal recurring year-end adjustments that are not material,
either individually or in the aggregate, and the absence of full footnote
disclosure. The Citrus Annual Financial Statements and the Citrus Six Month
Interim Financial Statements present fairly in all material respects, in
accordance with GAAP consistently applied, the financial condition and results
of operation of Citrus as of the dates thereof and for the periods set forth
therein, subject, in the case of the Citrus Six Month Interim Financial
Statements, to normal recurring year-end adjustments that are not material,
either individually or in the aggregate, and the absence of full footnote
disclosure. The TPC Annual Financial Statements and the TPC Six Month Interim
Financial Statements present fairly in all material respects, in accordance with
GAAP consistently applied, the financial condition and results of operation of
TPC as of the dates thereof and for the periods set forth therein, subject, in
the case of the TPC Six Month Interim Financial Statements, to normal recurring
year-end adjustments that are not material, either individually or in the
aggregate, and the absence of full footnote disclosure.

Section 3.7 Contracts.

(a) Section 3.7(a) of the CCE Disclosure Letter sets forth a list, as of the
date hereof, of each contract and lease to which TPC is a party that is material
to TPC (each contract set forth in Section 3.7(a) of the CCE Disclosure Letter
being referred to herein as a “Material Contract”); provided, however, that any
purchase or sale order arising in the ordinary course of business and any
contract reasonably expected to involve the payment or receipt of an aggregate
amount of less than $2,000,000 during its term remaining after the date of this
Agreement shall not be deemed to be a Material Contract.

(b) Section 3.7(b) of the CCE Disclosure Letter sets forth a list, as of the
date hereof, of each contract that TPC has with an Affiliate, other than with
respect to any purchases and sales arising in the ordinary course of business.

(c) Except as set forth in Section 3.7(c) of the CCE Disclosure Letter, each
Material Contract is a valid and binding agreement of TPC and, to the Knowledge
of CCE, is in full force and effect.

 

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(d) Except as set forth in Section 3.7(d) of the CCE Disclosure Letter, CCE has
no Knowledge of any default under any Material Contract, other than defaults
that have been cured or that would not have a Material Adverse Effect. TPC and,
to CCE’s Knowledge, the other parties to any Material Contract, have performed
in all respects all obligations required to be performed by them under any
Material Contract, except where the failure so to perform would not have a
Material Adverse Effect. CCE has made available to ETP or its representatives
true and complete originals or copies of all the Material Contracts.

Section 3.8 Compliance with Law. Except for Environmental Laws and Tax Laws,
which are the subject of Section 3.15 and Section 3.16, respectively, and except
as set forth in Section 3.8 of the CCE Disclosure Letter, since November 17,
2004, TPC has complied with all federal, state, local or foreign laws, statutes,
ordinances, rules, regulations, judgments, orders, writs, injunctions or decrees
of any Governmental Authority applicable to its properties, assets and business,
except where such noncompliance would not have a Material Adverse Effect. TPC
has not received written notice of any material violation of any such law,
license, regulation, order or other legal requirement or, to the Knowledge of
CCE, is in material default with respect to any order, writ, judgment, award,
injunction or decree of any Governmental Authority, applicable to TPC or any of
its assets, properties or operations.

Section 3.9 Permits. Except as set forth in Section 3.9(a) of the CCE Disclosure
Letter, TPC has all permits, licenses, certificates of authority, orders and
approvals of, and has made all filings, applications and registrations with,
Governmental Authorities necessary for the conduct of the business operations of
TPC as presently conducted (collectively, the “TPC Permits”), except for those
Permits the absence of which would not, individually or in the aggregate, have a
Material Adverse Effect. Set forth on Section 3.9(b) of the CCE Disclosure
Letter is a list of the material TPC Permits.

Section 3.10 Litigation. Except as identified in Section 3.10 of the CCE
Disclosure Letter, there are no lawsuits, actions, proceedings or
investigations, pending, or, to CCE’s Knowledge, threatened, against CCE or any
of its Affiliates or any executive officer, manager or director thereof relating
to the transactions contemplated hereby or the assets or business of TPC,
except, in the case of lawsuits, actions, proceedings, investigations relating
to the assets or business of TPC, as would not, individually or in the
aggregate, have a Material Adverse Effect. CCE and its Affiliates are not
subject to any outstanding judgment, order, writ, injunction, decree or award
entered in an Action to which CCE or any of its Affiliates was a named party
relating to the transactions contemplated hereby or the assets or business of
TPC, except, in the case of lawsuits, actions, proceedings, investigations
relating to the assets or business of TPC, as would not, individually or in the
aggregate, have a Material Adverse Effect.

Section 3.11 Title to Properties. TPC has good and valid title to all of the
tangible assets and properties that are reflected in the TPC Interim Balance
Sheet (except for assets and properties sold, consumed or otherwise disposed of
in the ordinary course of business since the date of the TPC Interim Balance
Sheet), and such tangible assets and properties are owned free and clear of all
Encumbrances, except for (a) Encumbrances listed in Section 3.11 of the CCE
Disclosure Letter, (b) Permitted Encumbrances, and (c) Encumbrances which will
be discharged on or before the Closing Date. To the Knowledge of CCE, except as
set forth in Section 3.11 of the CCE Disclosure Letter, TPC owns valid and
defeasible fee title to, or holds a valid leasehold

 

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interest in, or a valid right-of-way or easement (all such rights-of-way and
easements collectively, the “Rights-Of-Way”) through, all real property (“Real
Property”) used or necessary for the conduct of business of TPC as presently
conducted, and all such Real Property (other than Rights-Of-Way) is owned or
leased free and clear of all Encumbrances, in each case except for
(a) Encumbrances listed in Section 3.11 of the CCE Disclosure Letter,
(b) Permitted Encumbrances and (c) Encumbrances that will be discharged on or
before the Closing Date.

Section 3.12 Employee Matters.

(a) Except as set forth in Section 3.12(a) of the CCE Disclosure Letter, none of
TPC, CCE or their respective ERISA Affiliates sponsors, maintains, contributes
to or has an obligation to contribute to, any “employee benefit plan,” as
defined in Section 3(3) of ERISA, in which any current or former TPC Employee is
or has been eligible to participate since November 17, 2004 (“ERISA Plans”). For
the avoidance of doubt, (1) the term “ERISA Plans” does not include any Enron
Plan, (2) November 17, 2004 is the date of the closing of the acquisition by CCE
of indirect ownership of TPC from Enron Corp. and certain of its affiliates, and
(3) CCE was formed on May 14, 2004, in connection with such acquisition.

(b) Except as set forth in Section 3.12(b) of the CCE Disclosure Letter, none of
TPC, CCE or any of their respective ERISA Affiliates has established, sponsors,
maintains, or contributes to any policy, plan, agreement or arrangement that is
not set forth in Section 3.12(a) of the CCE Disclosure Letter providing for
employment terms, change in control benefits, severance benefits, retention
benefits, insurance coverage (including any self-insured arrangements), workers’
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
or other forms of incentive compensation, or post-retirement insurance,
compensation or benefits (whether or not an ERISA Plan) that (i) is entered
into, sponsored, maintained, or contributed to, as the case may be, by TPC, or
(ii) has covered any current or former TPC Employee or independent contractor to
TPC since November 17, 2004. The policies, plans, agreements, and arrangements
described in this Section 3.12(b) are hereinafter referred to as the “Benefit
Programs or Agreements.” For the avoidance of doubt, the term “Benefit Programs
or Agreements” does not include any Enron Plan. The Benefit Programs and
Agreements and the ERISA Plans are hereinafter referred to collectively as the
“Employee Benefit Plans.”

(c) True, correct, and complete copies of each of the ERISA Plans sponsored,
maintained or contributed to on behalf of the TPC Employees or in which such
employees are otherwise eligible to participate, and related trusts, if
applicable, including all amendments thereto, have been furnished to ETP. There
has also been furnished to ETP, with respect to each ERISA Plan required to file
such report and description, the most recent report on Form 5500, the summary
plan description and any summaries of material modifications thereto, all
actuarial reports or valuations relating to each ERISA Plan subject to Title IV
of ERISA or required to be accounted for pursuant to Statements of Financial
Accounting Standard Nos. 106 and 132(R), if any, and the most recent
determination letter, if any, issued by the IRS with respect to any ERISA Plan
intended to be qualified under Section 401 of the Code. True, correct, and
complete copies or descriptions of all Benefit Programs and Agreements have also
been furnished to ETP.

 

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(d) Except as set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or
described in Section 5.5(e), with respect to retiree medical benefits, none of
TPC, CCE or any of CCE’s ERISA Affiliates has any legal commitment to create,
incur liability with respect to or cause to exist any other employee benefit
plan, program or arrangement for the benefit of any current or former TPC
Employee or to enter into any contract or agreement to provide compensation or
benefits to any former or current TPC Employee.

(e) Except as set forth in Section 3.12(e) of the CCE Disclosure Letter, with
respect to each Employee Benefit Plan:

(i) the applicable reporting, disclosure and other requirements of ERISA (and
other Applicable Law) have been complied with in all material respects;

(ii) there is no act or omission of TPC or any of its ERISA Affiliates that
would (a) constitute a breach of fiduciary duty under Section 404 of ERISA or a
transaction (including the transactions contemplated by this Agreement) intended
to evade liability under Section 4069 of ERISA, in either case that would
subject TPC to a liability, or (b) constitute a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code that would subject TPC or any
plan fiduciary, directly or indirectly (through indemnification obligations or
otherwise), to an excise Tax or civil penalty under Section 4975 of the Code or
Section 502(i) of ERISA in an amount that would be material;

(iii) no ERISA Plan is subject to Title IV of ERISA;

(iv) all contributions or payments required to be made under each ERISA Plan by
reason of Part 3 of Subtitle B of Title I of ERISA, Section 412 of the Code, or
otherwise prior to the Closing Date have been and will be timely made;

(v) there are no pending or, to CCE’s Knowledge, threatened actions, suits or
claims pending (other than routine claims for benefits);

(vi) to CCE’s Knowledge, there is no matter pending (other than routine
qualification determination filings) with respect to any Employee Benefit Plan
before the IRS, the Department of Labor, the PBGC, or any other Governmental
Authority;

(vii) except to the extent required under Section 601 of ERISA or Section 4980
of the Code, TPC has no present or future obligation to make any payment to or
with respect to any former or current TPC Employee or any dependent of any such
former or current TPC Employee under any retiree medical benefit plan or other
retiree welfare benefit plan;

(viii) there is no Employee Benefit Plan covering any former or current TPC
Employee that provides for the payment by TPC of any amount that is or is
reasonably likely to be (a) not deductible as a result of Section 162(a)(1) or
404 of the Code, (b) an “excess parachute payment” pursuant to Section 280G of
the Code or (c) subject to the additional tax pursuant to Section 409A of the
Code;

 

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(ix) except as otherwise provided in this Agreement, neither the execution of
this Agreement nor the consummation of the transactions contemplated hereby will
(a) entitle any TPC Employee to severance, retention or change in control
payments or benefits to which such employee was not previously entitled, or any
increase in severance retention or change in control payments or benefits upon a
termination of employment or consummation of the transactions contemplated by
this Agreement, (b) require CCE, TPC or any of their respective ERISA Affiliates
to make a larger contribution to, pay greater benefits under, or provide any
additional vesting, service credit or other rights under any Employee Benefit
Plan than it otherwise would, whether or not some subsequent action or event
would be required to cause such payment or provision to be triggered or
(c) trigger any other material obligation pursuant to the Employee Benefit Plans
that would be a liability of ETP or TPC after the Closing Date;

(x) each ERISA Plan intended to qualify under Section 401(a) of the Code has
been determined to be so qualified by the IRS and, to the Knowledge of CCE,
nothing has occurred which has resulted or is likely to result in the revocation
of such determination or which requires or is reasonably likely to require
action under the compliance resolution programs of the IRS to preserve such
qualification;

(xi) as to any ERISA Plan intended to be qualified under Section 401(a) of the
Code, there has been no termination or partial termination of any ERISA Plan
within the meaning of Section 411(d)(3) of the Code;

(xii) all contributions required to be made to or with respect to the Employee
Benefit Plans pursuant to their terms and the provisions of ERISA, the Code, or
any other Applicable Law have been timely made;

(xiii) each trust funding an Employee Benefit Plan, which trust is intended to
be exempt from federal income taxation pursuant to Section 501(c)(9) of the
Code, satisfies the requirements of such section and has received a favorable
determination letter from the IRS regarding such exempt status and has not,
since receipt of the most recent favorable determination letter, been amended or
operated in a way which would adversely affect such exempt status;

(xiv) except as set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter
or described in Section 5.5(e), each ERISA Plan which is an “employee welfare
benefit plan,” as such term is defined in Section 3(1) of ERISA, may be
unilaterally amended or terminated in its entirety without liability except as
to benefits accrued thereunder prior to such amendment or termination; and

(xv) except as set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or
described in Section 5.5(e), no Employee Benefit Plan provides retiree medical
or retiree life insurance benefits to any Person and TPC is not contractually or
otherwise obligated (whether or not in writing) to provide any Person with life
insurance or medical benefits upon retirement or termination of employment,
other than as required by the provisions of Sections 601 through 608 of ERISA
and Section 4980B of the Code.

 

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(f) None of TPC or any of its ERISA Affiliates contributes to or has an
obligation to contribute to, and has not at any time within six years prior to
the Closing Date contributed to or had an obligation to contribute to, a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA), on behalf of a
present or former TPC Employee;

(g) No current circumstance has arisen or future circumstance could arise that
would lead TPC or, after the transaction contemplated by this Agreement, ETP, to
incur any ERISA Title IV liability or suffer the imposition of any Lien on any
of their assets with respect to liabilities relating to any ERISA Plan or any
employee benefit plan subject to Title IV of ERISA that was sponsored,
maintained or contributed to by (A) CCE, (B) an ERISA Affiliate of CCE, or
(C) any corporation, trade, business or entity under common control with CCE or
an ERISA Affiliate of CCE, within the meaning of Section 414(b), (c) or (m) of
the Code or Section 4001 of ERISA, within the six (6) years prior to the Closing
Date, or to which any of them had an obligation to contribute during such
period; and

(h) With respect to circumstances not addressed in Section 3.12(g), except as
set forth in Section 3.12(e)(vii) of the CCE Disclosure Letter or described in
Section 5.5(e), no current circumstance has arisen or future circumstance could
arise that would lead TPC or, after the transaction contemplated by this
Agreement, ETP, to incur any liability directly or indirectly (through
indemnification or otherwise), or suffer the imposition of a Lien on any of
their assets, relating to or arising from the participation of the TPC employees
or former employees in any of the Enron Plans or the status of TPC, during the
period preceding November 17, 2004, as an ERISA Affiliate of Enron Corp.

Section 3.13 Labor Relations. TPC is not a party to any labor or collective
bargaining agreements, and there are no labor or collective bargaining
agreements which pertain to any employees of TPC. Within the preceding eighteen
(18) months, there have been no representation or certification proceedings, or
petitions seeking a representation proceeding, pending or, to the Knowledge of
CCE, threatened in writing to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority with respect
to TPC. Within the preceding eighteen (18) months, to the Knowledge of CCE,
there have been no organizing activities involving TPC with respect to any group
of its employees. Since May 1, 2006, neither TPC nor any Affiliate of TPC has
terminated the employment of any TPC Employee or any employee of any of its
Affiliates who provides services in connection with TPC’s business for reasons
other than misconduct or failure to perform the employee’s duties and no
circumstance has occurred that would give rise to a requirement that TPC give
notice under the Worker Adjustment and Retraining Notification Act or any
similar state law. As of the date of this Agreement, no TPC Employee or Shared
Service Employee has a legal or contractual right to reinstatement with TPC or
any Affiliate of TPC.

Section 3.14 Intellectual Property. Except as set forth in Section 3.14 of the
CCE Disclosure Letter, on the Closing Date TPC will, either in its own name or
by operation of the TPC Transition Services Agreement, own or possess licenses
or other legally enforceable rights to use all patents, copyrights (including
any copyrights in proprietary software), trademarks,

 

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service marks, trade names, logos, and other intellectual property rights,
software object and source code as are necessary to conduct its business as
currently conducted, except those the lack of which would not materially and
adversely affect the operations of TPC as currently conducted; and to CCE’s
Knowledge, there is no conflict by CCE or TPC with the rights of others therein
that would materially and adversely affect the operations of TPC as currently
conducted.

Section 3.15 Environmental Matters. Except as set forth in Section 3.15 of the
CCE Disclosure Letter:

(a) TPC and its properties and operations are, and to CCE’s Knowledge, during
the relevant time periods specified in all applicable statutes of limitation,
have been, in compliance with all applicable Environmental Laws, except for such
noncompliance as would not, individually or in the aggregate, have a Material
Adverse Effect;

(b) TPC possesses all Environmental Permits required in order to conduct its
operations as presently conducted or, where such Environmental Permits have
expired, has applied for a renewal of such Environmental Permits in a timely
fashion and, to CCE’s knowledge, all such Environmental Permits are in the name
of the proper entity and will remain in full force and effect immediately
following the Closing, except where the failure to possess an Environmental
Permit or to have applied for a renewal of an Environmental Permit would not,
individually or in the aggregate, have a Material Adverse Effect;

(c) TPC and its properties and operations are not subject to any pending or, to
CCE’s Knowledge, threatened Environmental Claims, nor has TPC received any
notice of violation, noncompliance, or enforcement or any notice of
investigation or remediation from any Governmental Authority pursuant to
Environmental Laws, except for such matters as would not, individually or in the
aggregate, have a Material Adverse Effect;

(d) Since November 17, 2004, there has been no, and to CCE’s Knowledge, prior to
November 17, 2004, there has been no, Release of Hazardous Substances on or from
the properties of TPC or from or in connection with the operations of TPC in
violation of any Environmental Laws or in a manner that could give rise to any
remedial or corrective action obligations pursuant to Environmental Laws, except
such as would not, individually or in the aggregate, have a Material Adverse
Effect;

(e) Since November 17, 2004, there has been no, and, to CCE’s Knowledge, prior
to November 17, 2004, there has been no exposure of any Person or property to
any Hazardous Substances in connection with the business, properties or
operations of TPC that could reasonably be expected to form the basis for an
Environmental Claim or any other claim for Damages or compensation, except for
such Environmental Claims or other claims for Damages as would not, individually
or in the aggregate, have a Material Adverse Effect; and

(f) CCE has made available for inspection by ETP complete and correct copies of
all environmental assessment and audit reports and studies completed since
January 1, 2003, addressing potentially material environmental matters and all
correspondence completed since January 1, 2003 addressing potentially material
Environmental Claims relating to TPC that are in the possession of CCE or TPC,
except for any such materials as CCE reasonably believes are subject to the
attorney-client privilege.

 

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The representations and warranties set forth in this Section 3.15 are CCE’s sole
and exclusive representations and warranties relating to environmental matters.

Section 3.16 Tax Matters.

(a) Except as set forth in Section 3.16(a) of the CCE Disclosure Letter or as
would not have a Material Adverse Effect, all federal, state and local Tax
Returns required to be filed by or on behalf of TPC, and each consolidated,
combined, unitary, affiliated or aggregate group of which TPC is a member, has
been timely filed (taking into account applicable extensions), and all Taxes
shown as due on such Tax Returns have been paid, or adequate reserves therefor
have been established.

(b) Except as set forth in Section 3.16(b) of the CCE Disclosure Letter or as
would not have a Material Adverse Effect, there is no deficiency, proposed
adjustment, or matter in controversy that has been asserted or assessed in
writing with respect to any Taxes due and owing by TPC that has not been paid or
settled in full.

(c) Except as would not have a Material Adverse Effect, TPC has timely withheld
and timely paid all Taxes required to be withheld by them in connection with any
amounts paid or owing to any employee, creditor, independent contractor or other
third party.

(d) Except as would not have a Material Adverse Effect, there are no liens for
Taxes upon any of the assets of TPC except for liens for Taxes not yet due and
payable.

(e) Except as would not have a Material Adverse Effect, no property of TPC is
required to be treated as “tax-exempt use property” within the meaning of Code
Section 168(h), and no property of TPC is subject to a tax benefit transfer
lease subject to the provisions of former Section 168(f)(8) of the Code.

(f) At all times since its formation, CCE has been treated as a partnership for
federal tax purposes pursuant to Treasury Regulation Section 301.7701-3.

(g) At all times since their formation, each of CC Energy, TW Holdings and TPC
have been disregarded as separate entities for federal tax purposes pursuant to
Treasury Regulation Section 301.7701-3.

(h) CCE has made or will make a valid election under Section 754 of the Code
that will be in effect at the time of the CCE Acquisition.

Section 3.17 Absence of Certain Changes or Events.

(a) Except as set forth in Section 3.17(a) of the CCE Disclosure Letter, since
December 31, 2005, TPC has conducted its business in the ordinary course of
business, consistent with past practice (as such practice existed during the
period of CCE’s ownership of TPC).

 

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(b) Except as set forth in Section 3.17(b) of the CCE Disclosure Letter, since
December 31, 2005, there has not been with respect to TPC any event or
development or change which has resulted or would reasonably be expected to
result in a Material Adverse Effect.

(c) Except as set forth in Section 3.17(c) of the CCE Disclosure Letter, since
June 30, 2006, TPC has not taken any action that would have been prohibited had
Section 5.1(b) been in effect from and after June 30, 2006.

Section 3.18 Absence of Undisclosed Liabilities. Since June 30, 2006, TPC has
incurred no Liabilities (whether absolute, accrued, contingent or otherwise)
that would be required by GAAP to be included in the financial statements of
TPC, except those Liabilities (a) disclosed and reserved against in the TPC
Interim Balance Sheet, (b) set forth in Section 3.18 of the CCE Disclosure
Letter, (c) incurred in the ordinary course of business since June 30, 2006 and
(d) that have not resulted in a Material Adverse Effect.

Section 3.19 Brokerage and Finders’ Fees. None of CCE, TPC or any of their
Affiliates or their respective stockholders, partners, managers, directors,
officers or employees, has incurred, or will incur any brokerage, finders’ or
similar fee in connection with the transactions contemplated by this Agreement.

Section 3.20 Affiliated Transactions. Except as described in Section 3.20 of the
CCE Disclosure Letter, and except for trade payables and receivables arising in
the ordinary course of business for purchases and sales of goods or services
consistent with past practice, TPC has not been a party over the past twelve
(12) months to any material transaction or agreement with CCE or any Affiliate
of CCE (other than TPC) and no director or officer of CCE or its Affiliates
(other than TPC), has, directly or indirectly, any material interest in any of
the assets or properties of TPC.

Section 3.21 Insurance.

(a) Section 3.21 of the CCE Disclosure Letter sets forth a true and complete
list of all current policies of all material property and casualty insurance,
insuring the properties, assets, employees and/or operations of TPC
(collectively, the “Insurance Policies”). To the Knowledge of CCE, all premiums
payable under the Insurance Policies have been paid in a timely manner and TPC
has complied in all material respects with the terms and conditions of all such
Insurance Policies.

(b) As of the date hereof, CCE has not received any written notification of the
failure of any of the Insurance Policies to be in full force and effect. To the
Knowledge of CCE, TPC is not in default under any provision of the Insurance
Policies, and except as set forth in Section 3.21 of the CCE Disclosure Letter,
there is no claim by TPC or any other Person pending under any of the Insurance
Policies as to which coverage has been denied or disputed by the underwriters or
issuers thereof.

Section 3.22 Regulatory Matters.

(a) TPC is a “natural gas company” as that term is defined in Section 2 of the
Natural Gas Act (“NGA”). TPC is in compliance in all material respects with the
provisions of

 

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the NGA, the Natural Gas Policy Act of 1978 (“NGPA”), the Pipeline Safety
Improvement Act of 2002, and the rules and regulations promulgated by FERC
pursuant thereto. TPC is in compliance in all material respects with the terms
and conditions of all tariff provisions, FERC rate and certificate orders, and
other orders and authorizations issued by FERC, in each case as applicable to
TPC. No approval by FERC under the NGA or the Federal Power Act is required in
connection with the execution and delivery of this Agreement by CCE or the
consummation of the transactions contemplated hereby. Except as identified in
Section 3.22 of the CCE Disclosure Schedule, the Form No. 2 Annual Reports filed
by TPC with FERC for the years ended December 31, 2004 and December 31, 2005
were true and correct in all material respects as of the dates thereof, and
since January 1, 2005, TPC has not become subject to any proceeding under
Section 5 of the NGA or, except as otherwise permitted by Section 5.1, any
general rate case proceeding commenced under Section 4 of the NGA by reason of a
filing made with the FERC after January 1, 2005.

(b) Except as identified in Section 3.22 of the CCE Disclosure Letter and except
for general industry proceedings including audits or reviews of individual
companies arising from general industry proceedings such as Order 2004, there
are no pending or, to CCE’s Knowledge, reasonably anticipated FERC
administrative or regulatory proceedings, including without limitation any rate
proceeding under Section 4 or Section 5 of the NGA or any NGA Section 7
certificate proceeding, investigation, complaint, audit, or show cause
proceedings to which TPC is a party. CCE acknowledges that, as a result of a
rate settlement in FERC Docket Nos. RP95-271, et al., TPC is obligated to
prepare and file the TPC Rate Case for rates to be effective November 1, 2006.

Section 3.23 Internal Controls.

(a) The system of internal accounting controls that is applicable to TPC is
sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization and (iv) the recorded accountability for physical
assets is compared with the existing physical assets at reasonable intervals and
appropriate actions are taken with respect to any differences.

(b) Since November 17, 2004, neither TPC nor, to CCE’s Knowledge, any director,
manager, officer, employee, auditor, accountant or representative of TPC, has
received or otherwise had or obtained knowledge of any complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or internal accounting controls of
or for TPC, including any complaint, allegation, assertion or claim that TPC has
engaged in fraudulent accounting or auditing practices. Since November 17, 2004,
no attorney representing TPC, whether or not employed by TPC, has reported
evidence of a violation of securities laws, breach of fiduciary duty or similar
violation by TPC or any of its officers, directors, managers, employees or
agents to TPC’s board of managers (or comparable managing body) or any committee
thereof or to any manager or officer of TPC.

 

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(c) Except as disclosed in Section 3.23(c) of the CCE Disclosure Letter, there
are no off-balance sheet structures or off-balance sheet transactions with
respect to TPC or that would be required to be reported or set forth in the
periodic reports filed by a reporting company under the Exchange Act.

Section 3.24 Hedging. Except as set forth on Section 3.24 of the CCE Disclosure
Letter, TPC is not engaged in any natural gas or other futures or options
trading in respect of which it has any material future liability, or is a party
to any swaps, hedges, futures or similar instruments.

Section 3.25 Bank Accounts; Powers of Attorney. Section 3.25 of the CCE
Disclosure Letter sets forth (a) the name of each financial institution with
which TPC has borrowing or investment agreements, deposit or checking accounts
or safe deposit boxes, (b) the types of those arrangements and accounts
including the names in which the accounts or boxes are held, the account or box
numbers and the name of each Person authorized to draw thereon or have access
thereto and (c) the names of all Persons, if any, holding powers of attorney
(other than powers of attorney incidental to commercial relationships entered
into in the ordinary course of business) from TPC and a summary statement of the
terms thereof. No Contract to which TPC is a party provides for the payment by
the counterparty to any bank account other than those set forth on Section 3.25
of the CCE Disclosure Letter.

Section 3.26 Gas Imbalances. Section 3.26 of the CCE Disclosure Letter sets
forth all gas imbalances on TPC’s pipeline system as of June 30, 2006. All gas
imbalances on TPC’s pipeline system (whether as of June 30, 2006 or thereafter)
are resolved pursuant to the terms of Operational Balancing Agreements (“OBAs”).
The majority of OBAs follow the valuation methodology described in TPC’s tariff,
which calls for imbalances to be resolved using a Monthly Index Price as
calculated under Section 27 of the tariff’s General Terms and Conditions and
Section 5(c) of the tariff’s Operator Balancing Agreement – Form N. TPC has
certain grandfathered volumetric OBAs that do not follow Form N and for which
the revaluation of outstanding volumetric imbalances impacts TPC’s monthly
income statement. Volumetric imbalances are noted in Section 3.26 of the CCE
Disclosure Letter. The values of gas imbalances as determined pursuant to the
imbalance resolution methodology set forth in the OBAs are used in preparing
each balance sheet included in the TPC Annual Financial Statements and the TPC
Six Month Interim Financial Statements.

Section 3.27 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither CCE nor
any other Person makes any other express or implied representation or warranty
on behalf of CCE.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF ETP

ETP hereby represents and warrants to CCE as follows:

Section 4.1 Corporate Organization; Qualification. ETP is a limited partnership
duly organized, validly existing and duly qualified or licensed and in good
standing under the laws of the state or jurisdiction of its formation and has
all requisite limited partnership power to own,

 

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lease and operate its properties and to carry on its business as currently
conducted. ETP is duly qualified or licensed to do business as a foreign limited
partnership and is, and has been, in good standing in each jurisdiction in which
the nature of the business conducted by it or the property it owns, leases or
operates requires it to so qualify, be licensed or be in good standing, except
for such failures to be qualified, licensed or in good standing that would not
materially affect the consummation of the transactions contemplated by this
Agreement.

Section 4.2 Authority Relative to this Agreement. ETP has full limited
partnership power and authority to execute and deliver this Agreement and the
other agreements, documents and instruments to be executed and delivered by it
in connection with this Agreement, including the CCE Acquisition Agreement, and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other agreements, documents
and instruments to be executed and delivered in connection with this Agreement
(including the CCE Acquisition Agreement) and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all the necessary action on the part of ETP, and no other
proceedings on the part of ETP are necessary to authorize this Agreement and the
other agreements, documents and instruments to be executed and delivered in
connection with this Agreement (including the CCE Acquisition Agreement) or to
consummate the transactions contemplated hereby and thereby. This Agreement and
the CCE Acquisition Agreement each have been, and the other agreements,
documents and instruments to be executed and delivered in connection with this
Agreement as of the Closing Date will be, duly and validly executed and
delivered by ETP, and assuming that this Agreement, the CCE Acquisition
Agreement and the other agreements, documents and instruments to be executed and
delivered in connection with this Agreement and the CCE Acquisition Agreement
constitute legal, valid and binding agreements of the other parties thereto are
(in the case of this Agreement) or will be as of the Closing Date (in the case
of the other agreements, documents and instruments to be executed and delivered
in connection with this Agreement), enforceable against ETP in accordance with
their respective terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors’ rights generally or general principles of
equity.

Section 4.3 50% CCE Interest. Effective as of the closing of the transactions
under the CCE Acquisition Agreement, ETP will own all of the issued and
outstanding 50% CCE Interest and will have good, valid and marketable title to
the 50% CCE Interest, free and clear of all Encumbrances or other defects in
title, and the 50% CCE Interest will not have not been pledged or assigned to
any Person. At the Closing, the 50% CCE Interest will be transferred by ETP to
CCE free and clear of all Encumbrances. Effective as of the closing of the
transactions under the CCE Acquisition Agreement, the 50% CCE Interest will not
be subject to any restrictions on transferability or voting agreements other
than those imposed by this Agreement, the limited liability company agreement of
CCE and applicable securities laws.

Section 4.4 Consents and Approvals. Except for any approvals of the transactions
contemplated by the CCE Acquisition Agreement (or expiration of waiting periods)
under the HSR Act and except for approvals required from the FCC, ETP does not
require any consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority, or any other Person as a
condition to the execution and delivery of this Agreement or the performance of
the obligations hereunder, except where the failure to obtain such consent,

 

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approval or authorization of, or filing of, registration or qualification with,
any Governmental Authority, or any other Person would not materially affect the
consummation of the transactions contemplated by this Agreement.

Section 4.5 No Conflict or Violation. The execution, delivery and performance by
ETP of this Agreement does not:

(a) violate or conflict with any provision of the Organizational Documents of
ETP;

(b) violate any applicable provision of a law, statute, judgment, order, writ,
injunction, decree, award, rule or regulation of any Governmental Authority; or

(c) violate, result in a breach of, constitute (with due notice or lapse of time
or both) a default or cause any material obligation, penalty or premium to arise
or accrue under any material contract, lease, loan, agreement, mortgage,
security agreement, trust indenture or other material agreement or instrument to
which ETP is a party or by which it is bound or to which any of its properties
or assets is subject.

Section 4.6 Litigation. There are no lawsuits, actions, proceedings, or, to
ETP’s knowledge, any investigations, pending or, to ETP’s knowledge, threatened,
against ETP or any of its Subsidiaries or any executive officer or director
thereof which would prohibit or impair ETP from undertaking any of the
transactions contemplated by this Agreement, except as would not materially
affect the consummation of the transactions contemplated by this Agreement. ETP
is not subject to any outstanding judgment, order, writ, injunction, decree or
award entered in an Action to which ETP was a named party which would prohibit
or impair ETP from undertaking any of the transactions contemplated by this
Agreement, except as would not materially affect the consummation of the
transactions contemplated by this Agreement.

Section 4.7 Availability of Funds. ETP will have sufficient funds available to
pay the purchase price under the CCE Acquisition Agreement on the closing date
thereof and to consummate the transactions contemplated hereby. The ability of
ETP to consummate the transactions contemplated under the CCE Acquisition
Agreement and this Agreement is not subject to any condition or contingency with
respect to financing.

Section 4.8 Brokerage and Finders’ Fees. Except for Credit Suisse Securities
(USA) LLC, whose fees will be paid by ETP, none of ETP, any of its Affiliates,
or its partners, directors, officers or employees, has incurred, or will incur
any brokerage, finders’ or similar fee in connection with the transactions
contemplated by this Agreement.

Section 4.9 Investment Representations.

(a) ETP is acquiring the TPC Interests to be acquired by it hereunder for its
own account, solely for the purpose of investment and not with a view to, or for
sale in connection with, any distribution thereof in violation of the federal
securities laws or any applicable foreign or state securities law.

 

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(b) ETP is an “accredited investor” as defined in Rule 501(a) promulgated under
the Securities Act.

(c) ETP understands that the acquisition of the TPC Interests to be acquired by
it pursuant to the terms of this Agreement involves substantial risk. ETP and
its officers have experience as an investor in securities and equity interests
of companies such as the ones being transferred pursuant to this Agreement and
ETP acknowledges that it can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that ETP is
capable of evaluating the merits and risks of its investment in the TPC
Interests to be acquired by it pursuant to the transactions contemplated hereby.

(d) ETP understands that the TPC Interests to be acquired by it hereunder have
not been registered under the Securities Act on the basis that the sale provided
for in this Agreement is exempt from the registration provisions thereof. ETP
acknowledges that such securities may not be transferred or sold except pursuant
to the registration and other provisions of applicable securities laws or
pursuant to an applicable exemption therefrom.

(e) ETP acknowledges that the offer and sale of the TPC Interests to be acquired
by it in the transactions contemplated hereby has not been accomplished by the
publication of any advertisement.

Section 4.10 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither ETP nor any
other Person makes any other express or implied representation or warranty on
behalf of ETP.

ARTICLE V

COVENANTS OF THE PARTIES

Section 5.1 Conduct of Business.

(a) Except as expressly provided in this Agreement or as set forth in
Section 5.1(a) of the CCE Disclosure Letter, from and after the date of this
Agreement and until the Closing Date, CCE shall use commercially reasonable
efforts to cause TPC to conduct and maintain its business in the ordinary course
of business, consistent with past practice.

(b) Except as contemplated by this Agreement or as set forth in Section 5.1(b)
of the CCE Disclosure Letter, prior to the Closing Date, without the prior
written consent of ETP (which consent shall not be unreasonably withheld or
delayed), CCE shall cause TPC not to:

(i) Amend its organizational documents or governance documents;

(ii) Issue, sell, pledge, dispose of or encumber, or authorize or propose the
issuance, sale, pledge, disposition or encumbrance of, any shares of, or
securities convertible or exchangeable for, or options, puts, warrants, calls,
commitments or rights of any kind to acquire, any of its membership or ownership
interests or subdivide or in any way reclassify any membership or ownership
interests or change or agree to change in any manner the rights of its
outstanding membership or ownership interests;

 

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(iii) (A) Except for the payment of a distribution of $22,000,000 to the sole
member of TPC, as necessary to meet debt covenants under the Existing TW
Holdings Debt or for the payment of a distribution to the sole member of TPC in
order to make the distributions contemplated by Section 5.1(c) hereof, declare,
set aside or pay any dividend or other distribution with respect to any shares
of any class or series of equity interests of TPC; (B) split, combine or
reclassify any shares of any class or series of capital stock of TPC; or
(C) redeem, purchase or otherwise acquire directly or indirectly any shares of
any class or series of equity interests of TPC, or any instrument or security
which consists of or includes a right to acquire such equity interests;

(iv) Except as may be required by agreements or arrangements identified in
Section 5.1(b)(iv) of the CCE Disclosure Letter:

A. grant any severance or termination payments;

B. enter into or extend or amend any employment, consulting, severance or other
compensation agreement with, or otherwise increase the compensation or benefits
provided to any of its officers or other employees, either individually or as
part of a class of similarly situated employees other than in the ordinary
course of business, consistent with past practice;

C. except as required by Applicable Law, amend or take any other actions,
including, but not limited to, acceleration of vesting and waiver of performance
criteria, with respect to any Employee Benefit Plan; or

D. terminate any TPC Employee other than for cause;

(v) Sell, lease, license, mortgage or otherwise dispose of any properties or
assets material to its business, other than (A) sales made in the ordinary
course of business consistent with past practice or (B) sales of obsolete or
other assets not presently utilized in its business;

(vi) Merge with or into or consolidate with any other Person;

(vii) Make any change in its accounting principles, practices, estimates or
methods, other than as may be required by GAAP, Applicable Law or any
Governmental Authority;

(viii) Organize any new Subsidiary or acquire any capital stock of, or equity or
ownership interest in, any other Person;

(ix) Materially modify or amend or terminate any Material Contract or waive,
release or assign any material rights or Claims under a Material Contract,
except in the ordinary course of business;

(x) Pay, repurchase, discharge or satisfy any of its Claims, Liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in the ordinary course of business and consistent with
past practice;

 

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(xi) Enter into any contract or transaction relating to the purchase of assets
material to TPC, other than in the ordinary course of business consistent with
past practice;

(xii) (A) Incur or assume any short-term debt or long-term debt except for debt
incurred to pay for any TPC Expansion Project Expense, any SUG Expansion Project
Expense, any budgeted capital expenditure or the distributions contemplated by
Section 5.1(c) hereof, (B) modify the terms of any indebtedness or other
liability, other than modifications of short-term debt in the ordinary course of
business, consistent with past practice; (C) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except as described in
Section 5.1(b)(xii)(C) of the CCE Disclosure Letter;

(xiii) Adopt a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization or other reorganization;

(xiv) Make or change any material election in respect of Taxes, adopt or request
permission of any Taxing authority to change any material accounting method in
respect of Taxes, or enter into any closing agreement in respect of Taxes that
would increase the Tax liability of ETP, without ETP’s written consent, which
consent shall not be unreasonably withheld;

(xv) Other than routine compliance filings, make any filings or submit any
documents or information to FERC without prior consultation with ETP;

(xvi) Enter into any settlement agreement related to FERC-regulated tariff rates
without ETP’s written consent, which consent shall not be unreasonably withheld;

(xvii) Fail to use commercially reasonable efforts to pursue the TPC Expansion
Projects; or

(xviii) Fail to use commercially reasonable efforts to prepare, file and defend
the TPC Rate Case; or

(xix) Authorize any of, or commit or agree to take any of, the actions referred
to in the paragraphs (i) through (xviii) above.

(c) On or prior to the Closing Date, CCE shall make cash distributions in the
aggregate amount of $50.0 million plus all Cash Flow for the period beginning
July 1, 2006 until the date of the closing of the CCE Acquisition, of which
$25.0 million shall be distributed to ETP, $25.0 million shall be distributed to
the Class A Members (as defined in the Second Amended and Restated LLC
Agreement) and the balance of such Cash Flow which shall be distributed one-half
to ETP and one-half to the Class A Members (for purposes of this definition of
Cash Flow, Cash Flow shall be deemed to include without duplication the amount
of Citrus Corp. cash dividends actually paid with respect to the period from
July 1, 2006 until September 30, 2006 and an estimated amount of Citrus Corp.
cash dividends with respect to the period from October 1, 2006 until the date of
the closing of the CCE Acquisition using for such estimate 50% (i.e., CCE’s
share) of Citrus Corp. net income for such period).

 

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(d) CCE shall, or shall cause TPC to, provide to ETP copies of any filings made
with any Governmental Entities after the date of this Agreement and prior to the
Closing Date.

(e) CCE shall use its commercially reasonable efforts to cause TPC to have a Net
Working Capital Amount as of the Closing Date that is greater than zero but it
shall not be a condition to closing that this covenant be satisfied.

(f) From the date of this Agreement until the Closing Date, CCE shall not make
any cash distributions to its members except as specified in Section 5.1(c) or
as specified in the Second Amended and Restated LLC Agreement.

Section 5.2 Access to Properties and Records.

(a) CCE shall, and shall cause TPC to, afford to ETP and ETP’s accountants,
counsel and representatives full reasonable access during normal business hours
throughout the period prior to the Closing Date (or the earlier termination of
this Agreement pursuant to Article VII hereof) to all of the properties, books,
contracts, commitments and records (including all environmental studies, reports
and other environmental records and all pipeline cost-of-service and
rate-related studies, reports and records related to TPC and, during such
period, shall furnish to ETP all information concerning the business,
properties, Liabilities and personnel related to TPC as ETP may request,
provided, however, that no investigation or receipt of information pursuant to
this Section 5.2 shall affect any representation or warranty of CCE or the
conditions to the obligations of ETP. To the extent not located at the offices
or properties of TPC as of the Closing Date, as promptly as practicable
thereafter, CCE shall deliver, or cause its appropriate Affiliates to deliver to
ETP all of the books of accounts, minute books, record books and other records
(including safety, health, environmental, maintenance and engineering records
and drawings) pertaining to the business operations of TPC and all financial and
accounting records related to TPC. Such delivery shall include all work papers,
pleadings, testimony, exhibits, spread sheets, research, drafts, memoranda,
correspondence and other documents related to the TPC Rate Case (“TPC Rate Case
Work Product”). TPC Rate Case Work Product has been and will be prepared in
contemplation of litigation, and the use of TPC Rate Case Work Product has been
and will be under the control of TPC’s attorneys. Notwithstanding anything to
the contrary contained in this Agreement, CCE shall not be obligated to provide
to ETP any documents or records relating to litigation and regulatory matters in
which TPC is involved to the extent that CCE reasonably believes such documents
or records are subject to the attorney-client or other applicable privilege in
circumstances in which TPC is not the sole client unless the parties entitled to
such attorney-client or other applicable privilege shall consent thereto and
enter into an appropriate joint defense agreement for the purpose of
preservation of such attorney-client or other applicable privilege.

(b) The information contained herein, in the CCE Disclosure Letter or heretofore
or hereafter delivered to ETP or its authorized representatives in connection
with the transactions contemplated by this Agreement shall be held in confidence
by ETP and its

 

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representatives in accordance with the Confidentiality Agreement until the
Closing Date with respect to information relating to TPC. Following the Closing
Date, CCE shall keep confidential all information related to the business and
properties of TPC to the same extent as ETP is obligated to keep such
information confidential in accordance with the terms of the Confidentiality
Agreement (without regard to the preceding sentence) prior to the Closing Date.

Section 5.3 Consents and Approvals.

(a) Upon the terms and subject to the conditions of this Agreement, each of the
parties hereto agrees to use, and will cause its Affiliates to use its
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary or advisable under Applicable
Law and regulations to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable including the
preparation and filing of all forms, registrations and notices required to be
filed by such party in order to consummate the transactions contemplated by this
Agreement, the taking of all appropriate action necessary, proper or advisable
to satisfy each of the conditions to Closing that are to be satisfied by that
party or any of its Affiliates and the taking of such actions as are necessary
to obtain any approvals, consents, orders, exemptions or waivers of Governmental
Authorities and any other Person required to be obtained by such party in order
to consummate the transactions contemplated by this Agreement.

(b) Each party shall, and shall cause their respective Affiliates to, with
respect to a threatened or pending preliminary or permanent injunction or other
order, decree or ruling or statute, rule, regulation or executive order that
would adversely affect the ability of any party to this Agreement to consummate
the transactions contemplated hereby or those contemplated by the CCE
Acquisition Agreement, use their respective commercially reasonable best efforts
to prevent the entry, enactment or promulgation thereof, as the case may be
(including by pursuing any available appeal process). Each of ETP and CCE shall
use its respective commercially reasonable best efforts to, and shall cause
their respective Affiliates to use their commercially reasonable best efforts
to, promptly take or cause to be taken all actions necessary to comply with any
requests made, or conditions set, by a Governmental Authority to consummate the
transactions contemplated by this Agreement or the CCE Acquisition Agreement.
Each party agrees to use its commercially reasonable best efforts to procure any
third-party consents required in the preceding sentence. Notwithstanding the
foregoing, in no event shall the term “commercially reasonable best efforts”
require a party to agree to any divestiture, agreement, condition, restriction
or requirement requested by any Governmental Entity to avoid the entry,
enactment or promulgation of any threatened preliminary or permanent injunction
or other order, decree or ruling or statute, rule, regulation or executive order
that would constitute a material adverse effect on the financial condition,
results of operations or prospects of such party and its Affiliates (including,
with respect to ETP, TPC), taken as a whole (a “Burdensome Condition”). All
cooperation shall be conducted in such a manner so as to preserve all applicable
privileges.

(c) By the later of (i) the seventh Business Day after the date hereof and
(ii) the fifth Business Day after the approval by the FCC of the transfer of
control contemplated by the CCE Acquisition Agreement, CCE and ETP shall file
applications with the FCC for consent to the transfer of control of CCE and its
Affiliates as contemplated by this Agreement.

 

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(d) For purposes of this Section 5.3, each party shall require their respective
counsel to cooperate to the same extent as each party is required to cooperate
with the other party.

(e) Without limiting the generality of the undertakings pursuant to this
Section 5.3 and subject to appropriate confidentiality protections and
limitations set forth in Section 5.3(b) above, CCE, ETP and their respective
Affiliates shall each furnish to the parties to this Agreement such necessary
information and reasonable assistance a party may request in connection with the
foregoing and, upon reasonable request shall each provide counsel for the other
party with copies of all filings made by such party or such Affiliate, and all
correspondence between such party or such Affiliate (and its advisors) with any
Governmental Authority and any other information supplied by such party and such
party’s Affiliates to a Governmental Authority in connection with this Agreement
and the transactions contemplated hereby, provided, however, that materials may
be redacted (i) to remove references concerning the valuation of TPC, (ii) as
necessary to comply with contractual arrangements and (iii) to remove
information that is proprietary; and provided further, that information
protected by the attorney client, work product privilege, or any other
applicable privilege, shall be exchanged in a manner so as to preserve any such
privilege. CCE and ETP agree to inform each other of all communications with any
Governmental Authority.

Section 5.4 Further Assurances. On and after the Closing Date, CCE and ETP shall
cooperate and use their respective commercially reasonable efforts to take or
cause to be taken all appropriate actions and do, or cause to be done, all
things necessary or appropriate to consummate and make effective the
transactions contemplated hereby, including the execution of any additional
documents or instruments of any kind, the obtaining of consents which may be
reasonably necessary or appropriate to carry out any of the provisions hereof
and the taking of all such other actions as such party may reasonably be
requested to take by the other party hereto from time to time, consistent with
the terms of this Agreement, in order to effectuate the provisions and purposes
of this Agreement and the transactions contemplated hereby.

Section 5.5 Employee Matters.

(a) Except as provided in the following sentence, on the Closing Date, CCE shall
terminate the active participation of the Affected Employees in all of the
Employee Benefit Plans listed in Sections 3.12(a) and 3.12(b) of the CCE
Disclosure Letter, except for (i) the Benefit Programs and Agreements listed as
Items 5 and 6 in Section 3.12(b) of the CCE Disclosure Letter, (ii) the TPC VEBA
and (iii) the life and long term disability insurance coverage contemplated by
Section 5.5(b). Prior to the Closing Date, CCE shall, or shall cause TPC to,
terminate the TPC Severance Plan. CCE shall notify Affected Employees of the
termination of such active participation and the termination of the TPC
Severance Plan prior to the Closing Date. Subject to the provisions of this
Agreement, after the Closing Date, TPC shall be solely responsible for all
obligations and Liabilities with respect to the Benefit Programs and Agreements
listed as Items 5 and 6 in Section 3.12(b) of the CCE Disclosure Letter, the TPC
VEBA, the retiree medical benefits addressed in Section 5.5(e), the accrued
vacation days addressed in Section 5.5(c), the flexible benefit plan accounts
addressed in Section 5.5(h), and each employee benefit policy, plan, agreement
or arrangement that TPC, ETP or an Affiliate of either establishes, maintains or
contributes to with respect to the TPC Employees, on or after the

 

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Closing Date, and no such obligations or Liabilities shall be assumed or
retained by CCE or its Affiliates. ETP shall, or shall cause TPC to, honor any
continuing pay or salary obligations and any applicable legal or contractual
rights to reinstatement with respect to all Affected Employees. Except as
provided in the preceding provisions of this Section 5.5(a) and in
Section 5.5(e), CCE shall retain all obligations or Liabilities and assets with
respect to current and former TPC Employees and any Shared Service Employees who
do not become Transferring Shared Service Employees in accordance with
Section 5.5(g) or otherwise under all of the Employee Benefit Plans listed in
Sections 3.12(a) and 3.12(b) of the CCE Disclosure Letter and all other employee
benefit plans, policies and arrangements of CCE and its ERISA Affiliates, and no
such obligations or Liabilities shall be assumed or retained by ETP or its
Affiliates, including after the transactions contemplated hereby, TPC.

(b) Any Affected Employee who is unable to report to work with TPC as of the
Closing Date due to disability shall continue to be eligible for any applicable
long-term disability and life insurance coverage pursuant to CCE’s or PEPL’s
long-term disability and life insurance plans until such time, if any, as such
Affected Employee returns to active employment with TPC; provided, however, that
in order to be eligible for such benefits, each such Affected Employee, pending
approval for long-term disability benefits or return to active employment, must
continue to pay all applicable long-term disability and life insurance premiums
due following the Closing Date for such coverage. ETP shall, or shall cause TPC
to, pay Affected Employees who are on short-term disability as of the Closing
Date the short-term disability benefits that apply under the short-term
disability program that covers the TPC Employees as of the date of this
Agreement. Any Affected Employees who are on short-term disability as of the
Closing Date but who subsequently transition to long-term disability shall be
eligible for, and covered by, CCE’s or PEPL’s, as applicable, long-term
disability and life insurance coverages but not ETP’s long-term disability and
life insurance coverages, subject to the provisions of this Section 5.5(b).

(c) For no less than one year following the Closing Date, ETP shall, and shall
cause TPC to, provide to Affected Employees those employee benefits that are
provided by ETP to its similarly situated employees except with respect to
short-term disability benefits, as provided in Section 5.5(b). With respect to
those employee benefit plans of TPC, ETP or their Affiliates in which Affected
Employees may participate on or after the Closing Date (“ETP Plans”), ETP shall
cause the ETP Plans to credit prior service of the Affected Employees with TPC,
PEPL and the Affiliates of either, past or present, for purposes of eligibility
and vesting under ETP Plans and for all purposes with respect to any vacation,
sick days, severance and post-retirement medical benefits; provided, however,
that such service need not be credited to the extent it would result in a
duplication of benefits. Following the Closing Date, ETP shall, or shall cause
TPC to, honor the accrued vacation days of the Affected Employees that remain
unused as of the Closing Date to the extent such accruals are shown, either as
accruals for TPC Employees or full-time equivalent employees providing services
to TPC, on the Closing Balance Sheet. Affected Employees shall also be given
credit for any deductible or co-insurance payment amounts payable in respect of
the ETP Plan year in which the Closing Date occurs, to the extent that,
following the Closing Date, they participate in any ETP Plan during such plan
year for which deductibles or co-payments are required. Any preexisting
condition restrictions and waiting period limitations that were deemed satisfied
with respect to a particular person under

 

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any Employee Benefit Plan or any other benefit plan that covered a Transferring
Shared Service Employee immediately prior to the Closing Date shall be deemed
satisfied by ETP and its Affiliates under ETP Plans with respect to such person
on and after the Closing Date. The provisions of this Section 5.5(c) and
Section 5.5(f) shall not alter the status of the Affected Employees as at-will
employees of TPC or its Affiliates. Except as otherwise contemplated by this
Agreement, the provisions of this Section 5.5(c) and Section 5.5(f) shall not
affect the right of TPC, ETP or any of their Affiliates to amend or terminate
any of their employee benefit plans, programs or arrangements with respect to
ETP employees generally.

(d) ETP shall be responsible for all Liabilities and obligations under the
Worker Adjustment and Retraining Notification Act and similar foreign, state and
local rules, statutes and ordinances resulting from the actions of ETP or TPC
after the Closing Date. ETP agrees to hold CCE harmless in accordance with
Article VIII for any breach of such responsibility and ETP’s indemnification of
CCE in this regard specifically includes any Claim by the Affected Employees for
back pay, front pay, benefits or compensatory or punitive damages, any Claim by
any Governmental Authority for penalties regarding any issue of prior
notification (or lack thereof) of any plant closing or mass layoff occurring
after the Closing Date and CCE’s costs, including reasonable attorney’s fees, in
defending any such Claims.

(e) TPC has established the TPC VEBA, the assets and liabilities of which will
be retained by TPC as of the Closing Date. TPC is or will be responsible for
those post-retirement medical benefits described in Section 3.12(e)(vii) of the
CCE Disclosure Letter or described in and/or valued under the CCE FAS 106
Report. In addition to the CCE FAS 106 Report, the Enron Inactive Medical Plan
sets forth eligibility requirements relating to post-retirement medical benefits
available to eligible current and former employees and retirees of TPC (and
their eligible spouses, surviving spouses and dependents). The post-retirement
medical benefits that TPC currently provides to eligible retirees (and their
eligible spouses, surviving spouses and dependents) are described in the CCE
Under Age 65 SPD and the CCE Medicare Eligible SPD. The employer subsidies that
TPC currently makes available under cost sharing arrangements with respect to
post-retirement medical benefits are described in the CCE FAS 106 Report as well
as in a November 9, 2005 letter to then current TPC employees who had satisfied
applicable age, service and hire date eligibility requirements. Both the CCE FAS
106 Report and the November 9, 2005 letter describe fixed dollar per year of
service employer subsidies for eligible post-1989 retirees (and their eligible
spouses, surviving spouses and dependents). The CCE FAS 106 Report describes a
60 percent employer subsidy for eligible pre-1990 retirees (and their eligible
spouses, surviving spouses and dependents). True and complete copies of the CCE
FAS 106 Report, the Enron Inactive Medical Plan, the CCE Under Age 65 SPD and
the CCE Medicare Eligible SPD, as well as the November 9, 2005 letter have been
provided to ETP. Effective as of the Closing Date, ETP shall, or shall cause TPC
to, establish a plan to provide post-retirement medical benefits to eligible
current and former employees and retirees of TPC (and their eligible spouses,
surviving spouses and dependents). The eligibility requirements and employer
subsidies under such plan shall be as described in the CCE FAS 106 Report and/or
the Enron Inactive Medical Plan, and such eligibility requirements and employer
subsidies shall be applied to all Affected Employees, including all Transferring
Shared Service Employees, with such Transferring Shared Service Employees
receiving prior service credit in accordance with the provisions of
Section 5.5(c). Any provision of this

 

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Agreement to the contrary notwithstanding, TPC shall, and ETP shall cause TPC
to, take all actions with respect to the partition and distribution of assets
and liabilities associated with the Enron VEBA as may be required of TPC by, or
contemplated with respect to TPC under, any order of the Bankruptcy Court
relating to the Enron VEBA Motion or any order of any other court of competent
jurisdiction relating to the partition of assets held under the Enron VEBA
and/or the distribution of liabilities associated with the Enron VEBA. For the
avoidance of doubt, pursuant to the preceding sentence, TPC shall assume
liabilities and the TPC VEBA shall receive certain allocated assets with respect
to current and former employees and retirees of TPC, former employees and
retirees of former affiliates of TPC who provided services to TPC, and their
respective eligible spouses, surviving spouses and dependents, all in accordance
with the terms of an order relating to the Enron VEBA Motion or any other order
of a court of competent jurisdiction relating to the partition and distribution
of assets and liabilities under the Enron VEBA, and all such individuals shall
be eligible to participate in the post-retirement medical benefits plan
established by TPC or ETP under this Section 5.5(e). Except as otherwise
indicated in Section 3.12(e)(vii) of the CCE Disclosure Letter or as otherwise
required by Applicable Law or the provisions of a final order entered in
connection with the Enron VEBA Motion or by another court of competent
jurisdiction relating to the partition and distribution of assets and
liabilities under the Enron VEBA, nothing in this Agreement shall prohibit TPC
or CCE from exercising their respective rights as the sponsor of TPC’s
post-retirement medical benefits program to amend, modify or terminate the
benefits provided thereunder, whether before or after the Closing Date;
provided, however, that between the date hereof and the Closing Date, CCE shall
not amend its post-retirement medical benefits program to increase the benefits
provided thereunder, reduce retiree contribution or premium rates for coverage
thereunder or expand eligibility under such programs.

(f) In the event that, on the Closing Date or during the Continuation Period,
(i) the employment of an Affected Employee is terminated by TPC, ETP or an
Affiliate of either other than For Cause, (ii) TPC, ETP or an Affiliate of
either fails to provide an Affected Employee with at least the same level of
Base Compensation as was in effect immediately prior to the Closing Date, or
(iii) without the consent of an Affected Employee, TPC, ETP or an Affiliate of
either changes the primary work location of such Affected Employee to a location
that is more than 50 miles away from the Affected Employee’s primary work
location immediately prior to the Closing Date, ETP shall be responsible for and
shall pay to such Affected Employee, in a lump sum payment, not later than sixty
(60) days following the date of the Affected Employee’s termination of
employment, the following severance benefits (the “Severance Benefits”): two
(2) weeks of the Affected Employee’s Base Compensation for each full or partial
year of service measured from the Affected Employee’s date of hire reflected in
Section 5.5(g) of the CCE Disclosure Letter, not to exceed fifty-two (52) weeks
of such Base Compensation; provided, however, that in no event shall such
Severance Benefits be less than eight (8) weeks of such Base Compensation. The
costs incurred directly or indirectly in connection with the termination of
employment of any Affected Employee on or after the Closing Date shall be borne
exclusively by ETP. ETP’s obligation to provide the Severance Benefits shall be
subject to the Affected Employee’s execution of a release of all claims against
TPC, ETP and the Affiliates of either, and CCE, PEPL and the Affiliates of
either, in a form reasonably satisfactory to ETP and CCE. For purposes of this
Section 5.5(f), “Continuation Period” shall mean the one-year period following
the Closing Date. For purposes of this Section 5.5,

 

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“For Cause” shall mean (i) the commission by the Affected Employee of a criminal
or other act that causes or is reasonably likely to cause substantial economic
damage to TPC or substantial injury to the business reputation of TPC, (ii) the
commission by the Affected Employee of an act of fraud, theft or financial
dishonesty in the performance of the Affected Employee’s duties on behalf of
TPC, (iii) the continuing failure or continuing refusal of the Affected Employee
to satisfactorily perform the duties of the Affected Employee to TPC, (iv) the
material disregard or violation by the Affected Employee of the legal rights of
any employees of TPC or of TPC’s written policies regarding harassment or
discrimination, or (v) any other conduct materially detrimental to TPC’s
business. For purposes of this Section 5.5(f), “Base Compensation” shall mean an
Affected Employee’s base hourly wages or base salary, as applicable, at
termination of employment; provided, however, that in no event shall an Affected
Employee’s Base Compensation for purposes of calculating the Severance Benefits
provided for under this Section 5.5(f) be less than such Affected Employee’s
base hourly wages or base salary, as applicable, in effect as of the date of
this Agreement. For the avoidance of doubt, two weeks of each Affected
Employee’s Base Compensation as of the date of this Agreement is reflected in
the “BiWkly Salary” columns in Section 5.5(g) of the CCE Disclosure Letter.

(g) Section 5.5(g) of the CCE Disclosure Letter sets forth a list of the TPC
Employees as of the date hereof, including each such TPC Employee’s current
annual base compensation, annual bonus, job title, work location, hire date, and
vacation balance as of the date of this Agreement, as well as two weeks of each
such TPC Employee’s Base Compensation as of the date of this Agreement, as
reflected in the “BiWkly Salary” columns, for purposes of Section 5.5(f). Also
listed in Section 5.5(g) of the CCE Disclosure Letter, as it may be amended as
contemplated by this Section 5.5(g), are employees of CCES or PEPL on the date
of this Agreement, who provide services to TPC, and who are being made available
for transfer to TPC on the date immediately preceding the Closing Date pursuant
to the provisions of this Section 5.5(g) (“Shared Service Employees”). With
respect to each Shared Service Employee, Section 5.5(g) of the CCE Disclosure
Letter sets forth, as of the date hereof, such Shared Service Employee’s current
annual base compensation, annual bonus, job title, work location, hire date, and
vacation balance as of the date of this Agreement, as well as two weeks of each
such Shared Service Employee’s Base Compensation as of the date of this
Agreement, as reflected in the “BiWkly Salary” columns, for purposes of
Section 5.5(f). In the event that CCE or ETP requests that the list of Shared
Service Employees be amended, by adding an employee to the list or deleting an
employee from the list within the first thirty (30) days following the execution
of this Agreement, the parties agree to negotiate in good faith to determine if
such request can be accommodated. Not later than thirty (30) days following the
execution of this Agreement, ETP may identify to CCE, in writing, not more than
five (5) Shared Service Employees who shall not be transferred to TPC. Each
Shared Service Employee not so identified by ETP shall be considered a
“Transferring Shared Service Employee” under this Agreement. All of the
Transferring Shared Service Employees shall be transferred to TPC, and become
employees of TPC, on the date preceding the Closing Date. CCE shall pay, or CCE
shall cause CCES or PEPL, as applicable, to pay any severance costs relating to
any Shared Service Employees who do not become Transferring Shared Service
Employees under the preceding provisions of this Section 5.5(g). In accordance
with the provisions of Section 5.5(f), ETP shall pay the Severance Benefits, if
any, relating to any Shared Service Employees who become Transferring Shared
Service Employees under the preceding provisions of this Section 5.5(g). ETP
shall, or shall

 

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cause TPC to, pay each Affected Employee a base hourly wage or base salary, as
applicable, that is not less than his or her base hourly wage or base salary, as
applicable, in effect with TPC, CCES or PEPL, as applicable, immediately prior
to the Closing Date. CCE agrees that, within the thirty (30) day period
following the execution of this Agreement, neither CCES nor PEPL shall terminate
the employment of any Shared Service Employee other than For Cause, without the
written consent of ETP. CCE further agrees that, prior to the Closing Date,
neither CCES nor PEPL shall terminate the employment of any Transferring Shared
Service Employee other than For Cause, without the written consent of ETP.

(h) As soon as administratively feasible after the Closing Date, CCE and PEPL
shall transfer to ETP’s flexible benefits plan, an amount, in cash, equal to any
health care and dependent care balances standing to the credit of Affected
Employees under the CCE and PEPL flexible benefit plans (the “CCE Flex Plans”)
as of the day immediately preceding the Closing Date, and ETP shall, or shall
cause TPC to, reimburse Affected Employees for all eligible health and dependent
care expenses that would otherwise be payable under the terms of the CCE Flex
Plans on or after the Closing Date. As soon as administratively feasible after
the Closing Date, CCE shall provide to ETP a list of those Affected Employees
who have participated in the health or dependent care reimbursement accounts
under the CCE Flex Plans, together with their elections made prior to the
Closing Date with respect to such accounts, and balances standing to their
credit as of the day immediately prior to the Closing Date.

(i) Affected Employees will be eligible to participate in the Energy Transfer
Partners Profit Sharing and 401(k) Plan (the “ETP 401(k) Plan”) following the
Closing Date. ETP shall take reasonable measures designed to facilitate the ETP
401(k) Plan’s acceptance from any Affected Employee of a rollover or direct
rollover of all of his or her account balances under the CrossCountry Energy
Savings Plan 001, the CrossCountry Energy Savings Plan 002 and/or the Southern
Union Savings Plan (each a “CCE Defined Contribution Plan”), including his or
her loan balances and related loan documentation under the CCE Defined
Contribution Plan(s); provided that an Affected Employee shall only be permitted
to roll over his or her loan balances and related loan documentation if the
Affected Employee makes a rollover or direct rollover of all of his or her
account balances under the CCE Defined Contribution Plan or Plans which include
the Affected Employee’s outstanding loan balances. The trustee or recordkeeper
of CCE’s Defined Contribution Plans shall transfer to the trustee or
recordkeeper of the ETP 401(k) Plan any loan documentation for loans to be
rolled over or transferred to the ETP 401(k) Plan pursuant to the provisions of
this Section 5.5(i). The provisions of this Section 5.5(i) shall not be
construed to require that any Affected Employee roll over or otherwise transfer
his or her account balances under a CCE Defined Contribution Plan to the ETP
401(k) Plan. CCE shall, or shall cause PEPL to, fully vest the account balances
of all Affected Employees under the CCE Defined Contribution Plans.

(j) Notwithstanding any provisions of the Southern Union Company Annual
Incentive Plan (the “Annual Incentive Plan”) to the contrary, no payment for the
2006 Plan Year (as defined in the Annual Incentive Plan) shall be made to any
Affected Employee, and including any accelerated payment pursuant to Section VI
of the Annual Incentive Plan), except as provided in this Section 5.5(j). On or
before March 15, 2007, ETP shall, or shall cause TPC to, pay to the Affected
Employees the amount determined by multiplying, the sum of the total of

 

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the amounts reflected in the “Amount at Midpt” column for the TPC Employees as
set forth in Section 5.5(g) of the CCE Disclosure Letter plus the total of the
amounts reflected in the “Amount at Midpt” column for the Shared Service
Employees who become Affected Employees as set forth in Section 5.5(g) of the
CCE Disclosure Letter (as it may be amended pursuant to Section 5.5(g)), by a
fraction, the numerator of which is the number of completed calendar months in
2006 occurring on or before the Closing Date, and the denominator of which is
twelve (12). Each such Affected Employee who is employed by ETP, TPC or an
affiliate of either on the date that the amount determined under the preceding
sentence is paid shall receive a percentage, that is not less than nor greater
than the percentage reflected in the individual Affected Employee’s “Target
Bonus Range,” of such Affected Employee’s “Annual Salary” as reflected in
Section 5.5(g) of the CCE Disclosure Letter (as it may be amended pursuant to
Section 5.5(g)), multiplied by a fraction, the numerator of which is the number
of completed calendar months in 2006 occurring on or before the Closing Date,
and the denominator of which is twelve (12). Notwithstanding the foregoing
provisions of this Section 5.5(j), no payments for the 2006 Plan Year under the
Annual Incentive Plan shall be made to the extent that they are not accrued for
the Annual Incentive Plan on the Closing Balance Sheet.

(k) Until the Closing Date, CCE shall provide ETP an opportunity to participate
with TPC as a participating employer in discussions regarding the Enron VEBA
Motion, including the allocation of assets and liabilities to TPC thereunder,
and in settlement negotiations, if any, relating to any proceeding in another
court of competent jurisdiction relating to the partition and distribution of
assets and liabilities under the Enron VEBA.

Section 5.6 Tax Covenants.

(a) Tax Return Filings, Refunds, and Credits.

(i) CCE shall timely prepare and file (or cause such preparation and filing)
with the appropriate Tax authorities all Tax Returns (including any Consolidated
Income Tax Returns) due on or before the 30th day following the Closing Date
required to be filed by or on behalf of TPC (and make all elections with respect
to such Tax Returns) for Tax periods that end on or before the Closing Date, and
CCE may timely prepare and file (or cause such preparation and filing) with the
appropriate Tax authorities all other Tax Returns (including any Consolidated
Income Tax Returns) required to be filed by or on behalf of TPC (and make all
elections with respect to such Tax Returns) for Tax periods that end on or
before the Closing Date (all such returns required to be prepared and filed or
actually prepared and filed by CCE, the “CCE Returns”).

(ii) ETP shall timely prepare and file (or cause such preparation and filing)
with the appropriate Tax authorities all Tax Returns (the “Straddle Period
Returns”) required to be filed by or on behalf of TPC (and make all elections
with respect to such Tax Returns) for all Tax periods ending after the Closing
Date that include the Closing Date (the “Straddle Period”), and ETP shall timely
prepare and file (or cause such preparation and filing) with the appropriate Tax
authorities all Tax Returns required to be filed by or on behalf of TPC (and
make all elections with respect to such Tax Returns) for Tax periods that end on
or before the Closing Date, other than CCE

 

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Returns (all such returns required to be prepared and filed by ETP, the “ETP
Returns”). All ETP Returns shall be prepared in accordance with past practice to
the extent consistent with applicable law and the operations of TPC. ETP shall
provide CCE with copies of any ETP Returns at least forty-five (45) days prior
to the due date thereof (giving effect to any extensions thereto), accompanied
by a statement (the “Straddle Statement”) setting forth and calculating in
reasonable detail the Pre-Closing Taxes as defined below. If CCE agrees with the
ETP Return and Straddle Statement, the amount of Pre-Closing Taxes shall be as
shown thereon. If, within fifteen (15) days of the receipt of the ETP Return and
Straddle Statement, CCE notifies ETP that it disputes the manner of preparation
of the ETP Return or the amount calculated in the Straddle Statement, and
provides ETP its proposed form of ETP Return, a statement setting forth and
calculating in reasonable detail the Pre-Closing Taxes, and a written or oral
explanation of the reasons for its adjustment, then ETP and CCE shall attempt to
resolve their disagreement within the five (5) days following CCE’s notification
or ETP of such disagreement. If ETP and CCE are unable to resolve their
disagreement, the dispute shall be submitted to a mutually agreed upon
nationally recognized independent accounting firm, whose expense shall be borne
equally by ETP and CCE, for resolution within twenty (20) days of such
submission. The decision of such accounting firm with respect to such dispute
shall be binding upon ETP and CCE.

(iii) From and after the Closing Date, ETP and its Affiliates (including TPC)
will not file any amended Tax Return, carryback claim or other adjustment
request by or on behalf of TPC for any Tax period that includes or ends on or
before the Closing Date unless CCE consents in writing.

(iv) For purposes of this Agreement, in the case of any Taxes of TPC that are
payable with respect to any Straddle Period, the portion of any such Taxes that
constitutes “Pre-Closing Taxes” shall be the excess of (A) (i) in the case of
Taxes that are either (x) based upon or related to income or receipts or
(y) imposed in connection with any sale, transfer or assignment or any deemed
sale, transfer or assignment of property (real or personal, tangible or
intangible) be deemed equal to the amount that would be payable if the Tax
period ended at the close of business on the Closing Date and (ii) in the case
of Taxes (other than those described in clause (i)) imposed on a periodic basis
with respect to the business or assets of TPC, be deemed to be the amount of
such Taxes for the entire Straddle Period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the immediately
preceding Tax period) multiplied by a fraction the numerator of which is the
number of calendar days in the portion of the Straddle Period ending on and
including the Closing Date and the denominator of which is the number of
calendar days in the entire Straddle Period over (B) any prepayment or advances
of Taxes or any payments of estimated Taxes with respect to the Straddle Period.
For purposes of clause (i) of the preceding sentence, any exemption, deduction,
credit or other item that is calculated on an annual basis shall be allocated to
the portion of the Straddle Period ending on the Closing Date on a pro rata
basis determined by multiplying the total amount of such item allocated to the
Straddle Period by a fraction, the numerator of which is the number of calendar
days in the portion of the Straddle Period ending on the Closing Date and the
denominator of which is the number of calendar days in the entire Straddle
Period. In the case of any Tax based upon

 

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or measured by capital (including net worth or long-term debt) or intangibles,
any amount thereof required to be allocated under this Section 5.6(a)(iv) shall
be computed by reference to the level of such items at the close of business on
the Closing Date. The parties hereto will, to the extent permitted by Applicable
Law, elect with the relevant Tax authority to treat a portion of any Straddle
Period as a short taxable period ending as of the close of business on the
Closing Date. For purposes of this Agreement, “Post-Closing Taxes” shall include
any Taxes of TPC that are payable with respect to a Straddle Period, except for
the portion of any such Taxes that constitutes Pre-Closing Taxes. For purposes
of this Agreement, the Texas corporate franchise tax determined based on the
income or capital of any entity for the year during which the Closing Date
occurs shall be considered to be a Tax due with respect to the Straddle Period.

(v) CCE and ETP shall reasonably cooperate in preparing and filing all Tax
Returns required to be filed by or on behalf of TPC, including maintaining and
making available to each other all records reasonably necessary in connection
with Taxes of TPC and in resolving all disputes and audits with respect to all
Tax periods relating to Taxes of TPC.

(vi) For a period of six (6) years after the Closing Date, CCE and its
representatives shall have reasonable access to the books and records (including
the right to make extracts thereof) of TPC to the extent that such books and
records relate to Taxes and to the extent that such access may reasonably be
required by CCE in connection with matters relating to or affected by the
operation of TPC prior to the Closing Date. Such access shall be afforded by ETP
upon receipt of reasonable advance notice and during normal business hours. If
ETP shall desire to dispose of any of such books and records prior to the
expiration of such six-year period, ETP shall, prior to such disposition, give
CCE a reasonable opportunity, at CCE’s expense, to segregate and remove such
books and records as CCE may select.

(vii) If a Tax Indemnified Party receives a refund or credit or other
reimbursement with respect to Taxes for which it was indemnified under this
Agreement, the Tax Indemnified Party shall pay over such refund or credit or
other reimbursement to the Tax Indemnifying Party.

(viii) ETP shall not, and shall cause TPC to not, make, amend or revoke any Tax
election if such action would adversely affect any of CCE or its Affiliates with
respect to any Tax period ending on or before the Closing Date or for the
Pre-Closing Period or any Tax refund with respect thereto unless ETP and its
Affiliates indemnify and make CCE and its Affiliates whole for any detriment or
cost incurred (or to be incurred) by them as a result of such action.

(ix) For purposes of this Agreement a “Consolidated Income Tax Return” is any
income Tax Return filed with respect to any consolidated, combined, affiliated
or unified group provided for under Section 1501 of the Code and the Treasury
regulations under Section 1502 of the Code, or any comparable provisions of
state or local law, other than any income Tax Return that includes only TPC.

 

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(b) Indemnity for Taxes.

(i) CCE hereby agrees to indemnify ETP and its affiliates against and hold them
harmless from and against all liability for (A) all Taxes that are attributable
to CCE or any member of an affiliated, consolidated, combined or unitary Tax
group of which TPC (or any direct or indirect predecessor(s) of TPC) was a
member at any time on or prior to the Closing Date and not after the Closing
Date that is imposed under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Tax law), except to the extent reflected on
the TPC Six Month Interim Financial Statements, (B) any Taxes of TPC incurred as
a transferee or a successor relating to any full or partial Tax period ending on
or before the Closing Date, except to the extent reflected on the TPC Six Month
Interim Financial Statements, (C) CCE’s portion of Transfer Taxes pursuant to
Section 5.6(f), and (D) any Damages arising out of, resulting from, or incurred
in connection with any breach or inaccuracy of any representation or warranty
set forth in Section 3.16; provided, however, that the determination of whether
such a breach or inaccuracy of Section 3.16(c), (d), or (e) occurred will be
made without the Material Adverse Effect qualifications contained therein.

(ii) ETP hereby agrees to indemnify CCE and its Affiliates against and hold them
harmless from all liability for (A) all Taxes of TPC with respect to all Tax
periods beginning after the Closing Date, (B) Post-Closing Taxes with respect to
any Straddle Period, (C) ETP’s portion of Transfer Taxes pursuant to
Section 5.6(f), (D) all Taxes imposed on TPC with respect to Tax periods ending
on or before the Closing Date, and (E) Pre-Closing Taxes with respect to any
Straddle Period.

(iii) The obligation of CCE to indemnify and hold harmless ETP, on the one hand,
and the obligations of ETP to indemnify and hold harmless CCE, on the other
hand, pursuant to this Section 5.6, shall terminate upon the expiration of the
applicable statutes of limitations with respect to the Tax Liabilities in
question (giving effect to any waiver, mitigation or extension thereof) or if a
Claim is brought with respect thereto, until such time as such Claim is
resolved.

(c) Certain Payments. ETP and CCE agree to treat (and cause their Affiliates to
treat) any payment by CCE under Section 5.6(b) as an adjustment to the property
distributed by CCE to ETP in redemption of the 50% CCE Interest for all Tax
purposes.

(d) Contests.

(i) After the Closing Date, CCE and ETP each shall notify the other party in
writing within ten (10) days of the commencement of any Tax audit or
administrative or judicial proceeding affecting the Taxes of TPC that, if
determined adversely to the taxpayer (the “Tax Indemnified Party”) or after the
lapse of time would be grounds for indemnification under this Section 5.6 by the
other party (the “Tax Indemnifying Party” and a “Tax Claim”). Such notice shall
contain factual information describing any asserted Tax liability in reasonable
detail and shall include copies of any notice or other document received from
any Tax authority in respect of any such asserted Tax liability. Failure to give
such notification shall not affect the indemnification

 

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provided in this Section 5.6 except to the extent the Tax Indemnifying Party
shall have been prejudiced as a result of such failure (except that the Tax
Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Tax Indemnified Party failed to give such notice).
Thereafter, the Tax Indemnified Party shall deliver to the Tax Indemnifying
Party, as promptly as possible but in no event later than ten (10) days after
the Tax Indemnified Party’s receipt thereof, copies of all relevant notices and
documents (including court papers) received by the Tax Indemnified Party.

(ii) In the case of an audit or administrative or judicial proceeding involving
any asserted liability for Taxes relating to any Taxable years or periods ending
on or before the Closing Date, CCE shall have the right, at its expense, to
control the conduct of such audit or proceeding; provided, however, that if CCE
does not timely take control of such audit or proceeding, ETP may, at its
expense, control the conduct of the audit or proceeding. In the case of an audit
or administrative or judicial proceeding involving any asserted liability for
Taxes relating to any Straddle Period, ETP shall have the right, at its expense,
to control the conduct of such audit or proceeding; provided, however, that
(A) ETP shall keep CCE reasonably informed with respect to the status of such
audit or proceeding and provide CCE with copies of all written correspondence
with respect to such audit or proceeding in a timely manner and (B) if such
audit or proceeding would be reasonably expected to result in a material
increase in Tax liability of TPC for which CCE would be liable under this
Section 5.6, CCE may participate in the conduct of such audit or proceeding at
its own expense.

(iii) In the case of an audit or administrative or judicial proceeding involving
any asserted liability for Taxes relating to any Taxable years or periods
beginning after the Closing Date, ETP shall have the right, at its expense, to
control the conduct of such audit or proceeding.

(iv) ETP and CCE shall reasonably cooperate in connection with any Tax Claim,
and such cooperation shall include the provision to the Tax Indemnifying Party
of records and information that are reasonably relevant to such Tax Claim and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.

(e) Transfer and Similar Taxes. Notwithstanding any other provisions of this
Agreement to the contrary, all sales, use, transfer, gains, stamp, duties,
recording and similar Taxes, but not including any Federal or state income taxes
(collectively, “Transfer Taxes”) incurred in connection with the transactions
contemplated by this Agreement shall be borne equally by ETP and CCE, and CCE
shall accurately file all necessary Tax Returns and other documentation with
respect to Transfer Taxes and timely pay all such Transfer Taxes. If required by
Applicable Law, ETP will join in the execution of any such Return. CCE shall
provide copies of any Tax Returns with respect to Transfer Taxes to ETP no later
than five (5) days after the due dates of such Tax Returns.

(f) Termination of Tax Sharing Agreements. On or prior to the Closing Date, CCE
shall cause all Tax sharing agreements between CCE or any of its Affiliates (as
determined immediately after the Closing Date) on the one hand, and TPC on the
other hand, to be terminated, and all obligations thereunder shall be settled,
and no additional payments shall be made under any provisions thereof after the
Closing Date.

 

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Section 5.7 Control of Administrative and Regulatory Proceedings. CCE and ETP
agree and acknowledge that, up to the Closing Date, CCE shall be entitled to
control, defend and otherwise conduct any administrative or regulatory
proceeding involving TPC. CCE will use commercially reasonable efforts to, and
will cause TPC to, conduct any administrative or regulatory proceeding in a
manner that is intended to maximize the value of TPC on and after the Closing
Date. The Parties agree and acknowledge that, prior to the Closing Date, ETP
shall be entitled to participate at its expense in any administrative or
regulatory proceeding, meeting, or settlement conference, in administrative or
regulatory proceedings involving or affecting TPC. The Parties agree and
acknowledge that, after the Closing Date, ETP will assume control of any
administrative or regulatory proceeding involving or affecting TPC subject to
the terms of the TPC Transition Services Agreement.

Section 5.8 Maintenance of Insurance Policies.

(a) CCE and ETP agree that to the extent the Insurance Policies provide
coverage, CCE will process the Casualty Insurance Claims relating to the
business of TPC (including reported claims and including incurred but not
reported claims) and that such Casualty Insurance Claims shall remain with TPC
following the Closing. For purposes hereof, “Casualty Insurance Claims” shall
mean workers’ compensation, auto liability, general liability and products
liability claims and claims for damages caused to the facilities of TPC
generally insured under all risk, real property, boiler and mechanical breakdown
insurance coverage all with dates of occurrence prior to the date of Closing.
The Casualty Insurance Claims are subject to the provisions of the Insurance
Policies with insurance carriers and contractual arrangements with insurance
adjusters maintained by CCE or its Affiliates prior to the Closing. With respect
to the Casualty Insurance Claims where coverage is available under the Insurance
Policies, the following procedures shall apply: (i) CCE or its Affiliates shall
continue to administer, adjust, settle and pay, on behalf of TPC, all Casualty
Insurance Claims; provided, however, that CCE will obtain the consent of ETP
prior to adjusting, settling or paying any Casualty Insurance Claim of an amount
greater than $100,000 and provided further, that CCE shall permit ETP to join
CCE in any settlement negotiations with claimants, insurers, or insurance
adjusters and (ii) CCE shall invoice TPC at the end of each month for Casualty
Insurance Claims paid on behalf of TPC. ETP shall cause TPC to pay the invoice
within thirty (30) days of its date. In the event that TPC does not pay CCE
within thirty (30) days of such invoice, interest at the rate of ten percent
(10%) per annum shall accrue on the amount of such invoice. Casualty Insurance
Claims to be paid by CCE hereunder shall include all costs necessary to settle
claims including compensatory, medical, legal and other allocated expenses, net
of insurance proceeds. In the event that any Casualty Insurance Claims exceeds a
deductible or self-insured retention under the Insurance Policies, CCE shall be
entitled to the benefit of any insurance proceeds that may be available to
discharge any portion of such Casualty Insurance Claim.

(b) After the Closing, ETP shall be responsible for, and neither CCE nor any of
its Affiliates shall have any responsibility for, the payment of any deductible
amounts or underlying limits attributable to the Insurance Policies for Casualty
Insurance Claims relating to TPC. ETP acknowledges that certain of the Insurance
Policies may require CCE or any of its

 

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Affiliates to provide an indemnity to the insurance carrier for deductible
amounts and to provide collateral to secure such indemnity obligations. ETP
hereby agrees to indemnify and hold harmless CCE or any of its Affiliates (as
applicable) for any and all of the costs of maintaining such collateral and for
any charges made against such collateral or indemnification payments in
connection with claims arising or alleged to arise from the operations of TPC
required to be paid by CCE of any of its Affiliates (as applicable) under or
with respect to such Insurance Policies from and after the Closing Date.

(c) Other than as set forth in Section 3.21 hereof, CCE makes no representation
or warranty with respect to the applicability, validity or adequacy of any
Insurance Policies, and CCE shall not be responsible to ETP or any of its
Affiliates for the failure of any insurer to pay under any such Insurance
Policy.

(d) Nothing in this Agreement is intended to provide or shall be construed as
providing a benefit or release to any insurer or claims service organization of
any obligation under any Insurance Policies. CCE and ETP confirm that the sole
intention of this Section 5.8 is to divide and allocate the benefits and
obligations under the Insurance Policies between them as of the Closing Date and
not to affect, enhance or diminish the rights and obligations of any insurer or
claims service organization thereunder. Nothing herein shall be construed as
creating or permitting any insurer or claims service organization the right of
subrogation against CCE or ETP or any of their Affiliates in respect of payments
made by one to the other under any Insurance Policy.

(e) If ETP requests a copy of an Insurance Policy relating to a pending or
threatened Casualty Insurance Claim, CCE shall provide a copy of all relevant
insurance policies which insure such Casualty Insurance Claims within five
(5) Business Days, provided, however, that if CCE cannot provide such policy
within five (5) Business Days after exercising commercially reasonable efforts
to locate such policy, CCE shall continue to exercise its commercially
reasonable efforts to provide such policy to ETP as soon as possible thereafter.

(f) Except to the extent specified in this Section 5.8, TPC shall not
participate in any insurance policy or program of CCE or any of its Affiliates
following the Closing.

Section 5.9 Preservation of Records. ETP agrees that it shall, at its own
expense, preserve and keep the records held by it relating to the business of
TPC that could reasonably be required after the Closing by CCE for as long as
may be required for such categories of records by the time periods required by
Applicable Law and in accordance with CCE’s document retention practices. In
addition, ETP shall make such records available to CCE as may reasonably be
required by CCE in connection with, among other things, any insurance claim,
legal proceeding or governmental investigation relating to the respective
businesses of CCE and its Affiliates, including TPC.

Section 5.10 Public Statements. Neither party shall, nor shall permit its
Affiliates to, issue or cause the publication of any press release or other
announcement with respect to this Agreement or the transactions contemplated
hereby without the consent of the other party hereto, unless such disclosure is
required by Applicable Law, or by obligations pursuant to any agreement with any
national securities exchange; provided, however, that the party intending to

 

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make such release shall give the other parties prior notice and shall use its
commercially reasonable efforts consistent with such Applicable Law or
obligation to consult with the other parties with respect to the text thereof.

Section 5.11 Assignment of Trademarks.

(a) Effective upon the Closing Date, CCE shall assign or cause to be assigned to
TPC, the trademarks, service marks, and trade names listed on Section 5.11 of
the CCE Disclosure Letter, together with all slogans, logotypes, designs and
trade dress associated therewith, including all applications and registrations
therefor, which are, in each case, in existence on the Closing Date and
currently being used in the conduct of the business of TPC (collectively, the
“TPC Marks”).

(b) CCE shall use commercially reasonable efforts to assist ETP in protecting
and maintaining the rights of TPC in connection with use of the TPC Marks by
TPC, including preparation and execution of documents necessary or appropriate
in the ordinary course to register TPC Marks and/or record this Agreement. As
between the parties, ETP shall have the sole right to, and in its sole
discretion may, commence, prosecute or defend, and control any action concerning
the TPC Marks.

Section 5.12 Commercially Reasonable Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto will use, and will
cause their respective Affiliates to use, all 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 consistent with Applicable Law to
consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby.

Section 5.13 Financial Statements; Financial Records of CCE.

(a) If Closing does not occur on or prior to September 30, 2006, then CCE shall
(i) no later than November 15, 2006, prepare and deliver to ETP the CCE Nine
Month Interim Financial Statements, (ii) no later than November 15, 2006, cause
TPC to prepare and deliver to ETP the TPC Nine Month Interim Financial
Statements and (iii) no later than December 1, 2006, cause Citrus to prepare and
deliver to ETP the Citrus Nine Month Interim Financial Statements, and CCE shall
cause the financial statements referred to in clauses (i), (ii) and (iii) of
this sentence to present fairly in all material respects, in accordance with
GAAP consistently applied, the financial condition and results of operation of
CCE, Citrus and TPC, respectively, as of and for the periods set forth therein,
subject, in the case of the CCE Nine Month Interim Financial Statements, the
Citrus Nine Month Interim Financial Statements and the TPC Nine Month Interim
Financial Statements, to normal recurring year-end adjustments that are not
material, either individually or in the aggregate, and the absence of full
footnote disclosure. If Closing does not occur on or prior to December 31, 2006,
then CCE (w) no later than March 1, 2007, shall prepare and deliver to ETP the
CCE 2006 Financial Statements and the Citrus 2006 Financial Statements, and
(x) no later than March 1, 2007, cause TPC to prepare and deliver to ETP the TPC
2006 Financial Statements. CCE shall cause the financial statements referred to
in clauses (w) and (x) of the preceding sentence to present fairly in all
material respects, in accordance with GAAP consistently applied, the financial
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operation of CCE, Citrus and TPC, respectively, as of and for the periods set
forth therein. No later than (y) November 1, 2006, CCE shall prepare and deliver
to ETP the CCE Stub Period Income Statements and (z) November 1, 2006, cause TPC
and Citrus to prepare and deliver to ETP the TPC Stub Period Financial
Statements and the Citrus Stub Period Financial Statements, respectively. CCE
shall cause the financial statements for three month periods referred to in
clauses (y) and (z) of the preceding sentence to fairly present in all material
respects, in accordance with GAAP consistently applied, subject to normal
recurring year-end adjustments that are not material, either individually or in
the aggregate, and the absence of full footnote disclosure, and shall cause the
financial statements for one month periods referred to in clauses (y) and (z) of
the preceding sentence to be prepared in a manner not inconsistent with the
financial statements for the quarterly period from which such one month
financial statements were taken.

(b) CCE shall use commercially reasonable efforts, at ETP’s expense, to
(i) cause the CCE Financial Statements, the Citrus Financial Statements and the
TPC Financial Statements to be modified so that the CCE Financial Statements,
the Citrus Financial Statements and the TPC Financial Statements comply in all
material respects with the requirements of Regulation S-X, as adopted by the
SEC, and (ii) deliver such modified financial statements to ETP (A) no later
than November 1, 2006 in the case of the CCE Annual Financial Statements, the
Citrus Annual Financial Statements, the TPC Annual Financial Statements, the CCE
Six Month Interim Financial Statements, the Citrus Six Month Interim Financial
Statements and the TPC Six Month Interim Financial Statements, (B) no later than
December 15, 2006 in the case of the CCE Nine Month Interim Financial
Statements, the Citrus Nine Month Interim Financial Statements and the TPC Nine
Month Interim Financial Statements, (C) no later than March 1, 2007 in the case
of the CCE 2006 Financial Statements and the Citrus 2006 Financial Statements
and (D) no later than March 15, 2007 in the case of the TPC 2006 Financial
Statements; provided, however, that notwithstanding the foregoing, such modified
financial statements shall only be required to be delivered by CCE to ETP to the
extent that the corresponding non-modified financial statements contemplated by
Section 5.13(a) are required to be delivered by CCE to ETP.

(c) CCE consents to the inclusion or incorporation by reference of the CCE S-X
Financial Statements, the Citrus S-X Financial Statements and the TPC S-X
Financial Statements in any registration statement, report or other document of
ETP or any of its Affiliates to be filed with the SEC in which ETP or such
Affiliates reasonably determines that the CCE S-X Financial Statements, the
Citrus S-X Financial Statements and/or the TPC S-X Financial Statements are
required to be included or incorporated by reference to satisfy any rule or
regulation of the SEC or to satisfy relevant disclosure obligations under the
Securities Act or the Exchange Act. CCE shall use commercially reasonable
efforts to cause PricewaterhouseCoopers LLP to consent to the inclusion or
incorporation by reference of its audit opinion with respect to the CCE 2006
Financial Statements, the CCE Annual Financial Statements, the TPC 2006
Financial Statements, the TPC Annual Financial Statements, the Citrus 2006
Financial Statements and the Citrus Annual Financial Statements in any such
registration statement, report or other document. CCE shall execute and deliver
to PricewaterhouseCoopers LLP such representation letters, in form and substance
customary for representation letters provided to external audit firms by
management of the company whose financial statements are the subject of an audit
or are subject of a review pursuant to Statement of Accounting Standards 100

 

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(Interim Financial Information) (or any successor statement related to the topic
of accountants’ comfort letters), as may be reasonably requested by
PricewaterhouseCoopers LLP, with respect to the CCE S-X Financial Statements,
the Citrus S-X Financial Statements and the TPC S-X Financial Statements. CCE
shall use commercially reasonable efforts to cause PricewaterhouseCoopers to
deliver a comfort letter in form and substance customary with respect to
offerings of securities registered under the Securities Act with respect to the
CCE S-X Financial Statements, the Citrus S-X Financial Statements, the TPC S-X
Financial Statements and financial information related to CCE, Citrus and/or TPC
that is included in a prospectus or offering memorandum related to an offering
of securities of the type for which comfort letters are customarily provided to
the underwriters or initial purchasers in connection therewith. Any costs
related to any of the foregoing described in Sections 5.13(b) and (c), including
the preparation of such S-X financial statements, SAS 100 reviews, obtaining any
consent of, or comfort letters from, PricewaterhouseCoopers LLP, shall be borne
by ETP.

(d) CCE shall, and shall cause its Subsidiaries to, afford to ETP and any of its
Affiliates, and their respective accountants, counsel and representatives full
reasonable access during normal business hours for three years following the
Closing Date to all financial and accounting records, and contracts and other
documentation reasonably related thereto, of CCE and its Subsidiaries, including
Citrus, to the extent (i) such records and other information are not part of the
books and records of TPC delivered to ETP pursuant to Section 5.2(a) hereof and
(ii) such records and other information is reasonably necessary for ETP and any
of its Affiliates in connection with (A) the preparation of pro forma financial
statements related to the transactions contemplated by this Agreement, (B) the
preparation of any report or other filing required for compliance with federal
or state securities laws, including prospectuses or offering memoranda relating
to securities offerings, by ETP or any of its Affiliates, (C) a subsequent audit
of the financial statements of CCE or TPC in connection with a change in
external audit firms, (D) a subsequent restatement of the financial statements
of the financial statements of CCE, Citrus or TPC or (E) any inquiry,
investigation or legal proceeding by any Governmental Authority related to the
financial statements of CCE, Citrus or TPC.

Section 5.14 Covenants Regarding the 50% CCE Interest.

(a) From and after the date of this Agreement until the closing of the
transactions contemplated by the CCE Acquisition Agreement, ETP shall undertake
its commercially reasonable efforts to consummate the transactions contemplated
by the CCE Acquisition Agreement.

(b) From and after the closing of the transactions contemplated by the CCE
Acquisition Agreement until Closing, ETP shall not cause or permit the 50% CCE
Interest to be subject to any Encumbrances.

Section 5.15 No-Hire/Non-Solicitation. For a period of twelve (12) months
following the Closing Date, neither ETP, TPC nor any of their Affiliates shall,
directly or indirectly, hire or solicit (with the exception of any general
solicitation of employment through any general advertising medium in the
ordinary course of business for employment as an employee or consultant), any
employee of CCE or any of its Affiliates, unless such employee’s employment is
or has been terminated by CCE and its Affiliates.

 

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Section 5.16 CCE Executive Committee. On or immediately prior to the Closing
Date, ETP shall cause any members of the executive committee of CCE designated
by ETP to have (a) agreed to the appointment of successor members to such
executive committee as designated by CCE to take office upon the Closing and
(b) submitted their resignations as members of such executive committee
effective upon the Closing.

Section 5.17 Directors’ and Officers’ Indemnification. For a period of not less
than six (6) years after the Closing Date, ETP shall cause the certificate of
formation and limited liability company or other organizational documents of TPC
to continue to include the same provisions concerning the exculpation,
indemnification, advancement of expenses to and holding harmless of, all past
and present employees, officers, agents, managers and directors of TPC for acts
or omissions occurring at or prior to the Closing as are contained in such
documents as of the date of execution of this Agreement, and ETP shall cause TPC
to honor all such provisions, including making any indemnification payments and
expense advancements thereunder. In the event that any indemnifiable claim is
asserted or made within such six (6) year period, all rights to indemnification
and advancement of expenses in respect of such claim shall continue to the
extent currently permitted under TPC’s certificate of formation and limited
liability company agreement or other organizational documents until such claim
is disposed of or all orders in connection with such claim are fully satisfied.
CCE agrees to submit any such claims for indemnification for acts or omissions
that occurred at or prior to the Closing by any such person to any of its
applicable directors’ and officers’ insurance policy covering the matters that
give rise to any such claim and CCE shall use reasonable efforts to obtain such
pre-closing insurance coverage on behalf of TPC, if available. CCE makes no
representation or warranty with respect to the applicability, validity or
adequacy of any directors’ and officers’ insurance policy covering the matters
specified in this Section 5.17 and CCE shall not be responsible to ETP or any of
its Affiliates for the failure of any insurer to pay under any such directors’
and officers’ insurance policy.

Section 5.18 TPC Notes. If any of TPC’s $270,000,000 5.39% Senior Unsecured
Notes due November 17, 2014 or $250,000,000 5.54% Senior Unsecured Notes due
November 17, 2016 are required to be prepaid in accordance with the terms of the
TPC Note Purchase Agreement due to a Change of Control (as defined therein) of
TPC (as a result of either the transactions contemplated by this Agreement or
the CCE Acquisition Agreement), ETP shall use its commercially reasonable best
efforts to facilitate TPC’s refinancing of such notes (with the cooperation of
CCE) and ETP shall bear all costs and expenses (including legal fees) associated
with (i) any consent solicitation for amendments to, or waivers under, the TPC
Note Purchase Agreement and (ii) any credit facility, bond offering or other
financing transaction that is effected to raise funds for the repayment of such
notes.

ARTICLE VI

CONDITIONS

Section 6.1 Mutual Conditions to the Closing. The respective obligations of each
party to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver of each of the following conditions at or
prior to the Closing Date:

 

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(a) All waiting periods applicable to the transactions contemplated by this
Agreement under any applicable law shall have expired or been terminated, and
all filings required by law to be made prior to Closing by CCE or ETP with, and
all consents, approvals and authorizations required by law to be obtained prior
to Closing by CCE or by ETP from, any Governmental Authority under any law in
order to consummate the transactions contemplated by this Agreement shall have
been made or obtained (as the case may be), except where the failure to make
such filings, or to obtain any such authorizations, individually or in the
aggregate, would not have a Material Adverse Effect; provided, however, if any
consent, approval or authorization from any Governmental Authority the absence
of which would not have a Material Adverse Effect is not obtained prior to or at
the Closing and, as a result, the transfer of one or more assets, rights or
interests is prevented at the Closing, from and after the Closing, CCE and ETP
shall continue to use their commercially reasonable efforts to obtain such
requisite consent, approval or authorization;

(b) No court of competent jurisdiction or other competent Governmental Authority
shall have issued a statute, rule, regulation, order, decree or injunction or
taken any other action that has the effect of restraining or enjoining the
consummation of the transactions contemplated hereby or imposing a Burdensome
Condition; and

(c) The FCC shall have granted its consent to the transfer of control
contemplated by this Agreement.

Section 6.2 ETP’s Conditions to the Closing. The obligations of ETP to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver of each of the following conditions at or prior to
the Closing Date:

(a) The representations and warranties of CCE contained in this Agreement (A) if
subject to any limitations as to “materiality” or “Material Adverse Effect”
shall be true and correct at and as of the Closing Date as if made at and as of
such time (except to the extent expressly made as of an earlier date, in which
case as of such earlier date), and (B) if not subject to any limitations as to
“materiality” or “Material Adverse Effect,” shall be true and correct at and as
of the Closing Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date)
except where the failure of such representations and warranties to be true and
correct would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect;

(b) CCE and its Affiliates shall have made all deliveries required under
Section 2.5;

(c) CCE shall have performed in all material respects all of its obligations
required to be performed by it under this Agreement at or prior to the Closing
Date, and ETP shall have received a certificate to such effect executed by an
officer of CCE;

(d) ETP shall have received a properly executed statement of CCE dated as of the
Closing Date and conforming to the requirements of Treasury Regulation
Section 1.1445-2(b)(2);

 

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(e) TPC shall have been fully and unconditionally released as a guarantor of any
obligations of CCE or any of its Affiliates (other than TPC);

(f) ETP shall have acquired the 50% CCE Interest pursuant to the CCE Acquisition
Agreement;

(g) CCE shall have made the cash distributions as specified in Section 5.1(c);

(h) CCE and PEPL shall have executed and delivered to ETP the TPC Transition
Services Agreement; and

(i) all of the Existing TW Holdings Debt, including all unpaid interest and
premiums, if any, shall have been repaid.

Section 6.3 CCE’s Conditions to the Closing. The obligations of CCE to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver of each of the following conditions at or prior to
the Closing Date:

(a) The representations and warranties of ETP contained in this Agreement (A) if
subject to any limitations as to “materiality” or “Material Adverse Effect,”
shall be true and correct at and as of the Closing Date as if made at and as of
such time (except to the extent expressly made as of an earlier date, in which
case as of such earlier date), and (B) if not subject to any limitations as to
“materiality” or “Material Adverse Effect,” shall be true and correct at and as
of the Closing Date as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such earlier date)
except where the failure of such representations and warranties to be true and
correct would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of ETP to consummate the
transactions contemplated by this Agreement;

(b) ETP shall have made all deliveries required under Section 2.6;

(c) ETP shall have performed in all material respects all of its obligations
required to be performed by it under this Agreement at or prior to the Closing
Date, and CCE shall have received a certificate to such effect executed by an
officer of ETP;

(d) CCE shall have received a properly executed statement of ETP dated as of the
Closing Date and conforming to the requirements of Treasury Regulation
Section 1.1445-2(b)(2);

(e) CCE shall have obtained all approvals, consents and releases that are listed
in Section 6.3(e) of the CCE Disclosure Letter;

(f) ETP shall have acquired the 50% CCE Interest pursuant to the CCE Acquisition
Agreement; and

(g) CCE shall have made the cash distributions as specified in Section 5.1(c);

 

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ARTICLE VII

TERMINATION AND ABANDONMENT

Section 7.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date by:

(a) mutual written consent of the parties;

(b) by either ETP or CCE, upon written notice to the other parties, if the
Closing shall not have occurred on or before February 1, 2007 (the “Initial
Termination Date”); provided, however, that if on the Initial Termination Date
the conditions to closing set forth in Section 6.1(a) and Section 6.1(b) shall
not have been fulfilled but are reasonably capable of being fulfilled no later
than March 1, 2007, then, if a written notice requesting an extension of the
termination date has been delivered by either ETP to CCE, or by CCE to ETP, at
any time during the ten business day period ending on the Initial Termination
Date, the termination date shall be extended to March 1, 2007;

(c) by either ETP or CCE upon written notice to the other party, if any of the
mutual conditions to the Closing set forth in Section 6.1 shall have become
incapable of fulfillment by February 1, 2007 or March 1, 2007, as the case may
be, and shall not have been waived in writing by the other party;

(d) by ETP, so long as ETP is not then in breach of its obligations under this
Agreement, upon a breach of any covenant or agreement on the part of CCE set
forth in this Agreement, or if any representation or warranty of CCE shall have
been or become untrue, in each case such that the conditions set forth in
Section 6.2 would not be satisfied; provided, however, that ETP may not
terminate this Agreement if such breach or untruth is capable of being cured by
CCE by not later than February 1, 2007 or March 1, 2007, as the case may be,
through the exercise of its commercially reasonable efforts, so long as CCE
continues to exercise such commercially reasonable efforts (until February 1,
2007 or March 1, 2007, as the case may be);

(e) by CCE, so long as CCE is not then in breach of its obligations under this
Agreement, upon a breach of any covenant or agreement on the part of ETP set
forth in this Agreement, or if any representation or warranty of ETP shall have
been or become untrue, in each case such that the conditions set forth in
Section 6.3 would not be satisfied; provided, however, that CCE may not
terminate this Agreement if such breach or untruth is capable of being cured by
ETP by not later than February 1, 2007 or March 1, 2007, as the case may be,
through the exercise of its commercially reasonable efforts, so long as ETP
continues to exercise such commercially reasonable efforts (until February 1,
2007 or March 1, 2007, as the case may be); and

(f) by either CCE or ETP if any Governmental Authority shall have issued an
order, decree or ruling or taken any other action, which permanently restrains,
enjoins or otherwise prohibits the transactions contemplated by this Agreement
or the CCE Acquisition Agreement and which order, decree, ruling or other action
is not subject to appeal; unless failure to consummate closing because of such
action by the Governmental Authority is due to the failure of the party seeking
to terminate to have fulfilled its obligations under Section 5.3 and
Section 5.4.

 

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The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.

Section 7.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 7.1, this Agreement (but not the Confidentiality Agreement) shall become
void and of no effect with no liability on the part of any party (or any member,
stockholder or representative of such party) to the other party hereto;
provided, however, that, if such termination shall result from the willful
(i) failure of a party to fulfill a condition to the performance of the
obligations of the other parties, (ii) failure of a party to perform a material
covenant hereof or (iii) breach by a party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all liabilities and damages incurred or suffered by the other parties as a
result of such willful failure or breach; and provided further, that
notwithstanding the foregoing or anything else in this Agreement to the
contrary, the provisions of this Section 7.2 and Article IX shall survive any
termination hereof.

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

Section 8.1 Survival.

(a) The representations and warranties provided for in this Agreement shall
survive the Closing and remain in full force and effect until the twelve-month
(12) anniversary of this Agreement; provided however, that the representations
and warranties set forth in Section 3.2 (Authority Relative to this Agreement),
Section 3.3 (TPC Interests), Section 3.19 (Brokerage and Finders’ Fees),
Section 4.2 (Authority Relative to this Agreement), Section 4.3 (50% CCE
Interests) and Section 4.8 (Brokerage and Finders’ Fees) shall survive
indefinitely, the representations and warranties set forth in Section 3.16 (Tax
Matters) shall survive for a period equal to the applicable statute of
limitations for each Tax and taxable year, the representations and warranties
set forth in Section 3.15 (Environmental Matters) shall survive until the second
(2nd) anniversary of the Closing Date, and the representations and warranties
set forth in Section 3.12 (Employee Matters) shall survive for a period equal to
the applicable statutes of limitations with respect to the matters described
therein. Each covenant and agreement of CCE and ETP contained in this Agreement
that by its terms requires performance after the Closing Date shall survive the
Closing and shall remain in full force and effect until such covenant or
agreement is fully performed.

(b) No Claim for damages or other relief of any kind (including a Claim for
indemnification under Section 8.2 hereof) arising against an Indemnified Party
out of or relating to this Agreement or the transactions contemplated hereby,
whether sounding in contract, tort, breach of warranty, securities law, other
statutory cause of action, deceptive trade practice, strict liability, product
liability or other cause of action or theory of liability (except, in all cases

 

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Claims alleging fraud, intentional misrepresentation or intentional misconduct),
may be brought unless suit thereon is filed, or a written notice describing the
nature of that Claim, the theory of liability, the nature of the relief sought
and the material factual assertions upon which the Claim is based is given to
the other party, before the termination of the Survival Period.

(c) The survival period of each representation or warranty as provided in this
Section 8.1 is referred to herein as the “Survival Period.” Notwithstanding the
foregoing, any representation or warranty that would otherwise terminate shall
survive with respect to Damages which respect to which suit thereon is filed or
of which notice describing the nature of that Claim, the theory of liability,
the nature of the relief sought and the material factual assertions upon which
the Claim is based is given pursuant to this Agreement prior to the end of the
Survival Period, until the matter is finally resolved and any related Damages
are paid.

Section 8.2 Indemnification.

(a) Subject to the limitations set forth in this Article VIII, subsequent to the
Closing, CCE shall indemnify, defend, save and hold harmless, ETP, TPC, their
respective successors and permitted assigns, and their shareholders, members,
partners (general and limited), officers, directors, managers, trustees,
incorporators, employees, agents, attorneys, consultants and representatives,
and each of their heirs, executors, successors and assigns (collectively, the
“ETP Indemnified Parties”), against and in respect of any and all Damages to the
extent incurred by the ETP Indemnified Party arising out of, resulting from or
incurred in connection with:

(i) any breach or inaccuracy of any representation or warranty of CCE contained
in this Agreement;

(ii) any breach by CCE of any covenant or agreement contained in this Agreement;
and

(iii) any Third Party Claim against ETP arising out of or resulting from ETP’s
indirect ownership interests in CrossCountry Citrus, LLC, Citrus Corp. or any
Subsidiaries of Citrus Corp. other than for actions authorized, or intentional
acts of omission, by ETP in its capacity as the Class B Member or by any Class B
Executive Committee Member under, and as defined in, the CCE LLC Agreement.

(b) Subject to the limitations set forth in this Article VIII, subsequent to the
Closing, ETP shall indemnify, defend, save and hold harmless, CCE and its
Affiliates, their respective successors and permitted assigns, and their
shareholders, members, partners (general and limited), officers, directors,
managers, trustees, incorporators, employees, agents, attorneys, consultants and
representatives, and each of their heirs, executors, successors and assigns
(collectively, the “CCE Indemnified Parties”) against and in respect of any and
all Damages to the extent incurred by the CCE Indemnified Party arising out of,
resulting from or incurred in connection with:

(i) any breach or inaccuracy of any representation or warranty of ETP contained
in this Agreement;

 

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(ii) any breach by ETP of any covenant or agreement contained in this Agreement;
and

(iii) any liability or obligation of TPC, whether arising before or after
Closing, to the extent such liability or obligation (x) cannot be properly
asserted against CCE under Section 8.2(a) or otherwise by ETP, except to the
extent such liability or obligation cannot be properly asserted against CCE
because of limitations under Section 8.2(d), and (y) do not arise as a result of
any other obligation of CCE to any ETP Indemnified Party arising under this
Agreement.

(c) Any Person providing indemnification pursuant to the provisions of this
Section 8.2 is referred to herein as an “Indemnifying Party,” and any Person
entitled to be indemnified pursuant to the provisions of this Section 8.2 is
referred to herein as an “Indemnified Party.”

(d) CCE’s indemnification obligations contained in Section 8.2(a)(i) shall not
apply to any Claim for Damages until the aggregate of all such Damages total
$15,000,000 (the “Threshold Amount”), in which event CCE’s indemnity obligation
contained in Section 8.2(a)(i) shall apply to all Claims for Damages in excess
of the Threshold Amount, subject to a maximum liability to all Indemnified
Parties, in the aggregate, of $75,000,000 (the “Cap Amount”) for all Claims
under Section 8.2(a)(i) in the aggregate; provided, however, that the
limitations set forth in this sentence shall not apply with respect to CCE’s
indemnification obligations related to breaches of the representations and
warranties contained in Section 3.2 (Authority Relative to this Agreement) or
Section 3.3 (TPC Interests); and provided further that, notwithstanding anything
in this Agreement to the contrary, claims for indemnification relating to the
representations and warranties contained in Section 3.12(g) will not be subject
to the Threshold Amount or the Cap Amount and shall be independently determined
without regard to such limitations. Damages relating to any single breach or
series of related breaches of CCE’s representations and warranties shall not
constitute Damages, and therefore shall not be applied towards the Threshold
Amount or be indemnifiable hereunder, unless such Damages relating to any single
breach or series of related breaches exceed $300,000 (the “Minimum Claim
Amount”).

(e) ETP’s indemnification obligations contained in Section 8.2(b)(i) shall not
apply to any Claim for Damages until the aggregate of all such Damages equals
the Threshold Amount, in which event ETP’s indemnification obligation contained
in Section 8.2(b)(i) shall apply to all Claims for Damages in excess of the
Threshold Amount, subject to a maximum liability to all Indemnified Parties, in
the aggregate, of the Cap Amount for all Claims under Section 8.2(b)(i) in the
aggregate; provided, however, that the limitations set forth in this sentence
shall not apply with respect to ETP’s indemnification obligations related to
breaches of the representations and warranties contained in Section 4.2
(Authority Relative to this Agreement) or Section 4.3 (50% CCE Interests).
Damages relating to any single breach or series of related breaches of ETP’s
representations and warranties shall not constitute Damages, and therefore shall
not be applied towards the Threshold Amount or be indemnifiable hereunder,
unless such Damages relating to any single breach or series of related breaches
exceeds the Minimum Claim Amount.

 

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(f) The indemnification obligations of each party hereto under this Section 8.2
shall inure to the benefit of the ETP Indemnified Parties and CCE Indemnified
Parties, and such ETP Indemnified Parties and CCE Indemnified Parties will be
obligated to keep and perform the obligations imposed on an Indemnified Party by
this Section 8.2, on the same terms as are applicable to such other party.

(g) In all cases in which a Person is entitled to be indemnified in accordance
with this Agreement, such Indemnified Party shall be under a duty to take all
commercially reasonable measures to mitigate all losses. Without limiting the
foregoing, each Indemnified Party shall use its commercially reasonable efforts
to collect any amount available under insurance coverage, or from any other
Person alleged to be responsible, for any Damages for which an indemnity claim
is being made; provided, however, that the reasonable costs incurred by the
Indemnified Party in taking such measures shall be included in the amount of any
Claim.

(h) An Indemnified Party shall not be entitled under this Agreement to multiple
recovery for the same losses. If an Indemnified Party receives any amount under
applicable insurance policies, or from any other Person alleged to be
responsible for any Damages, subsequent to an indemnification payment by the
Indemnifying Party, then such Indemnified Party shall promptly reimburse the
Indemnifying Party for any payment made or expense incurred by such Indemnifying
Party in connection with providing such indemnification payment up to the amount
received by the Indemnified Party, net of any expenses incurred by such
Indemnified Party in collecting such amount.

(i) All amounts paid by CCE or ETP, as the case may be, under this Article VIII
shall be treated as adjustments to the property distributed by CCE to ETP in
redemption of the 50% CCE Interest for all Tax purposes.

(j) Notwithstanding any other provision in the Agreement to the contrary, this
Section 8.2 shall not apply to any Claim of indemnification with respect to Tax
matters. Claims for indemnification with respect to Tax matters shall be
governed by Section 5.6.

(k) For purposes of this Article VIII only, the existence of a breach of a
representation or warranty in this Agreement and the calculation of Damages
arising out of a breach of any representation or warranty in this Agreement
shall be determined without giving effect to any exception or qualification of
such representation or warranty as to the materiality of the breach thereof or
the Material Adverse Effect on any Person of such breach.

Except as provided in Section 5.6 hereof, the provisions of this Article VIII
shall constitute the sole and exclusive remedy of any Indemnified Party for
Damages arising out of, resulting from or incurred in connection with any
inaccuracy in any representation or the breach of any warranty made by ETP, on
the one hand, or CCE, on the other hand, in this Agreement; provided, however,
that this exclusive remedy for Damages does not preclude a party from bringing
an Action for specific performance or other equitable remedy to require a party
to perform its obligations under this Agreement; provided further, that this
exclusive remedy for Damages does not preclude a party from bringing an Action
alleging fraud, intentional misrepresentation or intentional misconduct without
reference to the provisions of this Article VIII.

 

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Section 8.3 Calculation of Damages. The Damages suffered by any Indemnified
Party shall be calculated after giving effect to the actual receipt of any
available insurance proceeds paid directly to the Indemnified Party. In
computing the amount of any insurance proceeds, such insurance proceeds shall be
reduced by a reasonable estimate of the present value of future premium
increases attributable to the payment of such Claim.

Section 8.4 Procedures for Third-Party Claims.

(a) In the case of any Claim for indemnification arising from a Claim of a third
party against an Indemnified Party arising under paragraph 8.2(a) or 8.2(b) as
the case may be (a “Third-Party Claim”), an Indemnified Party shall give prompt
written notice to the Indemnifying Party of any Claim or demand of which such
Indemnified Party has knowledge, and as to which it may request indemnification
hereunder, specifying (to the extent known) the amount of such Claim and any
relevant facts and circumstances relating thereto; provided, however, that any
failure to give such prompt notice or to provide any such facts and
circumstances will not waive any rights of the Indemnified Party, except to the
extent that the rights of the Indemnifying Party are actually materially
prejudiced thereby. The Indemnifying Party shall have the right (and, if it
elects to exercise such right, to do so by written notice within thirty
(30) days after receiving notice from the Indemnified Party) to defend and to
direct the defense against any such Third-Party Claim, in its name or in the
name of the Indemnified Party, as the case may be, at the expense of the
Indemnifying Party, and with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party, unless (i) the Indemnifying
Party shall not have taken any action to defend such Third-Party Claim within
such thirty (30) day period, or (ii) the Indemnified Party shall have reasonably
concluded that there is a conflict of interest between the Indemnified Party and
the Indemnifying Party in the conduct of the defense of such Third-Party Claim.
Notwithstanding anything in this Agreement to the contrary (other than the last
sentence of this Section 8.4(a)), the Indemnified Party, at the expense of the
Indemnifying Party (which shall include only reasonable out-of-pocket expenses
actually incurred), shall cooperate with the Indemnifying Party and keep the
Indemnifying Party fully informed in the defense of such Third-Party Claim. The
Indemnified Party shall have the right to participate in the defense of any
Third-Party Claim with counsel employed at its own expense; provided, however,
that in the case of any Third-Party Claim (A) described in clause (ii) above, or
(B) as to which the Indemnifying Party shall not in fact have employed counsel
to assume the defense of such Third-Party Claim within such thirty-day (30-day)
period, or (C) that involves assertion of criminal liability on the Indemnified
Party, or (D) seeks to force the Indemnified Party to take (or prevent the
Indemnified Party from taking) any action, then in each such case the
Indemnified Party shall have the right, but not the obligation, to conduct and
control the defense thereof for the account of, and at the risk of, the
Indemnifying Party, and the reasonable fees and disbursements of such
Indemnified Party’s counsel shall be at the expense of the Indemnifying Party.
Except as provided in the last sentence of Section 8.4(b), the Indemnifying
Party shall have no indemnification obligations with respect to any Third-Party
Claim which shall be settled by the Indemnified Party without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, delayed or conditioned.

(b) The Indemnifying Party, if it has assumed the defense of any Third Party
Claim as provided in this Agreement, shall not consent to a settlement of, or
the entry of any judgment arising from, any such Third-Party Claim without the
Indemnified Party’s prior written

 

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consent (which consent shall not be unreasonably withheld, delayed or
conditioned) unless (i) such settlement or judgment relates solely to monetary
damages, and (ii) prior to consenting to such settlement or such entry of
judgment, the Indemnifying Party delivers to the Indemnified Party a writing (in
form reasonably acceptable to the Indemnified Party) which unconditionally
provides that, subject to the provisions of Section 8.2(d) or Section 8.2(e), as
appropriate, relating to the Minimum Claim Amount, the Threshold Amount and the
Cap Amount, the Damages represented thereby are the responsibility of the
Indemnifying Party pursuant to the terms of this Agreement and that, subject to
the provisions of the Threshold Amount, the Indemnifying Party shall pay all
Damages associated therewith in accordance with the terms of this Agreement. The
Indemnifying Party shall not, without the Indemnified Party’s prior written
consent, enter into any compromise or settlement that (x) commits the
Indemnified Party to take, or to forbear to take, any action or (y) involves a
reasonable likelihood of an imposition of criminal liability on the Indemnified
Party, or (z) does not provide for a complete release by such third party of the
Indemnified Party. With the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld, conditioned or delayed, the
Indemnified Party shall have the sole and exclusive right to settle any
Third-Party Claim, on such terms and conditions as it deems reasonably
appropriate, to the extent such Third-Party Claim involves equitable or other
nonmonetary relief against the Indemnified Party or involves a reasonable
likelihood of an imposition of criminal liability on the Indemnified Party, and
shall have the right to settle any Third-Party Claim involving money damages for
which the Indemnifying Party has not assumed the defense pursuant to this
Section 8.4.

Section 8.5 Procedures for Inter-Party Claims. In the event that an Indemnified
Party determines that it has a Claim for Damages against an Indemnifying Party
hereunder (other than as a result of a Third-Party Claim), the Indemnified Party
shall give prompt written notice thereof to the Indemnifying Party, specifying
the amount of such Claim and any relevant facts and circumstances relating
thereto, and such notice shall be promptly given even if the nature or extent of
the Damages is not then known. The notification shall be subsequently
supplemented within a reasonable time as additional information regarding the
Claim or the nature or extent of Damages resulting therefrom becomes available
to the Indemnified Party. Any failure to give such prompt notice or supplement
thereto or to provide any such facts and circumstances will not waive any rights
of the Indemnified Party, except to the extent that the rights of the
Indemnifying Party are actually materially prejudiced thereby. The Indemnified
Party and the Indemnifying Party shall negotiate in good faith for a thirty-day
(30-day) period regarding the resolution of any disputed Claims for Damages.
Promptly following the final determination of the amount of any Damages claimed
by the Indemnified Party, the Indemnifying Party, subject to the limitations of
the Minimum Claim Amount, Threshold Amount and the Cap Amount, shall pay such
Damages to the Indemnified Party by wire transfer or check made payable to the
order of the Indemnified Party.

ARTICLE IX

MISCELLANEOUS PROVISIONS

Section 9.1 Interpretation. Unless the context of this Agreement otherwise
requires, (a) words of any gender include the other gender; (b) words using the
singular or plural number also include the plural or singular number,
respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or
similar words refer to this entire Agreement; (d) the terms “Article,”

 

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“Section” and “Exhibit” refer to the specified Article, Section and Exhibit of
this Agreement, respectively; and (e) “including,” shall mean “including, but
not limited to.” Unless otherwise expressly provided, any agreement, instrument,
law or regulation defined or referred to herein means such agreement,
instrument, law or regulation as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of a law or regulation) by succession of comparable
successor law and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein.

Section 9.2 Disclosure Letter. The CCE Disclosure Letter is incorporated into
this Agreement by reference and made a part hereof.

Section 9.3 Payments. All payments set forth in this Agreement and Exhibits are
in United States Dollars. Such payments shall be made by wire transfer of
immediately available funds or by such other means as the parties to such
payment shall designate.

Section 9.4 Expenses. Except as expressly set forth in Section 7.2 and in this
Section 9.4, or as agreed upon in writing by the parties, whether or not the
transactions contemplated hereby are consummated, each party shall bear its own
costs, fees and expenses, including the expenses of its Representatives,
incurred by such party in connection with this Agreement and the Related
Agreements and the transaction contemplated hereby and thereby; provided,
however, that CCE shall be solely responsible for all legal, accounting and
other fees, costs and expenses incurred by CCE, and TPC in connection with the
negotiation, execution and closing of this Agreement.

Section 9.5 Choice of Law. This Agreement shall be governed by and construed in
accordance with the law of the State of New York (regardless of the laws that
might otherwise govern under applicable New York principles of conflicts of
law).

Section 9.6 Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party; provided, however, that
without the prior written consent of the other party, each party shall have the
right to assign its rights and obligations under this Agreement to any third
party successor to all or substantially all of its entire business. This
Agreement shall be binding upon and, subject to the terms of the foregoing
sentence, inure to the benefit of the parties hereto and their successors, legal
representatives and assigns.

Section 9.7 Notices. All demands, notices, consents, approvals, reports,
requests and other communications hereunder must be in writing, will be deemed
to have been duly given only if delivered personally or by facsimile
transmission (with confirmation of receipt) or by an internationally-recognized
express courier service or by mail (first class, postage prepaid) to the parties
at the following addresses or telephone or facsimile numbers and will be deemed
effective upon delivery; provided, however, that any communication by facsimile
shall be confirmed by an internationally-recognized express courier service or
regular mail.

 

  (i) If to CCE:

c/o Southern Union Company

5444 Westheimer Road

 

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Houston, Texas 77056

Attention: Julie H. Edwards,

                   SVP and CFO

Facsimile: (713) 989-1166

With a required copy (which shall not constitute notice to CCE) to:

Southern Union Company

5444 Westheimer Road

Houston, Texas 77056

Attention: Monica M. Gaudiosi,

                   SVP and Associate General Counsel

Facsimile: (713) 989-1213

And a required copy (which shall not constitute notice to CCE) to:

Fleischman and Walsh, L.L.P.

1919 Pennsylvania Avenue, NW, Suite 600

Washington, DC 20006

Attention: Seth M. Warner

Facsimile: (202) 265-5706

 

  (ii) If to ETP:

Energy Transfer Partners, L.P.

8801 South Yale Avenue

Tulsa, Oklahoma 74137

Attention: Robert A. Burk

Vice President and General Counsel

Facsimile: (918) 493-7290

And a required copy (which shall not constitute notice to ETP) to:

Vinson & Elkins L.L.P.

1001 Fannin Street

2300 First City Tower

Houston, Texas 77002

Attention: Thomas P. Mason, Esq.

Telephone: (713) 758-4539

Facsimile: (713) 615-5320

or to such other address as the addressee shall have last furnished in writing
in accord with this provision to the addressor.

 

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Section 9.8 Consent to Jurisdiction. Each party shall maintain at all times a
duly appointed agent in the State of New York, which may be changed upon ten
(10) Business Days’ notice to the other party, for the service of any process or
summons in connection with any issue, litigation, action or proceeding brought
in any such court. Any such process or summons may also be served on it by
mailing a copy of such process or summons to it at its address set forth, and in
the manner provided, in Section 9.7. Each party hereby irrevocably consents to
the exclusive personal jurisdiction and venue of any New York State court
located in the Borough of Manhattan or to any United States Federal court of
competent jurisdiction located in the Southern District of the State of New
York, in any action, Claim or proceeding arising out of or in connection with
this Agreement and agrees not to commence or prosecute any action, Claim or
proceeding in any other court. Each of the parties hereby expressly and
irrevocably waives and agrees not to assert the defense of lack of personal
jurisdiction, forum non conveniens or any similar defense with respect to the
maintenance of any such action or proceeding in New York.

Section 9.9 No Right of Setoff. Neither party hereto nor any Affiliate thereof
may deduct from, set off, holdback or otherwise reduce in any manner whatsoever
against any amounts such Persons may owe to the other party hereto or any of its
Affiliates any amounts owed by such Persons to the other party or its
Affiliates.

Section 9.10 Time is of the Essence. Time is of the essence in the performance
of the provisions of this Agreement.

Section 9.11 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity, subject to the limitations set forth in Section 7.2 of
this Agreement.

Section 9.12 Entire Agreement. This Agreement, together with the CCE Disclosure
Letter, the Exhibits hereto and the Confidentiality Agreement constitute the
entire agreement between the parties hereto with respect to the subject matter
herein and supersede all previous agreements, whether written or oral, relating
to the subject matter of this Agreement and all prior drafts of this Agreement,
all of which are merged into this Agreement. No prior drafts of this Agreement
and no words or phrases from any such prior drafts shall be admissible into
evidence in any action or suit involving this Agreement. In case of any material
conflict between any provision of this Agreement and any other such document,
this Agreement shall take precedence.

Section 9.13 Third Party Beneficiaries. Except as expressly provided in Article
VIII hereof, none of the provisions of this Agreement shall be for the benefit
of or enforceable by any third party, including any creditor of any party or any
of their affiliates. Except as expressly provided in Article VIII hereof, no
such third party shall obtain any right under any provision of this Agreement or
shall by reasons of any such provision make any Claim in respect of any
Liability (or otherwise) against either party hereto.

Section 9.14 Counterparts. This Agreement may be executed in two or more
counterparts, which, when executed, shall be deemed to be an original and which
together shall constitute one and the same document.

 

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Section 9.15 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any applicable present or future law,
and if the rights or obligations of either party under this Agreement will not
be materially and adversely affected thereby, (i) such provision shall be fully
severable, (ii) this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

Section 9.16 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.

Section 9.17 Waiver. Any term or condition of this Agreement may be waived at
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party or parties waiving such term or condition. No
waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not alternative.

Section 9.18 Amendment. This Agreement may be altered, amended or changed only
by a writing making specific reference to this Agreement and signed by duly
authorized representatives of each party.

 

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IN WITNESS WHEREOF, CCE and ETP, by their duly authorized officers, have
executed this Agreement as of the date first written above.

 

ENERGY TRANSFER PARTNERS, L.P. By:  

Energy Transfer Partners GP, L.P., its

general partner

By:  

Energy Transfer Partners, L.L.C., its

general partner

  By:  

/s/ Kelcy Warren

 

  Name:   Kelcy Warren   Title:   Co-Chief Executive Officer CCE HOLDINGS, LLC
By:  

/s/ Drew Fossum

 

Name:   Drew Fossum Title:   Sr. VP & CLO

Signature Page to Redemption Agreement

--------------------------------------------------------------------------------

Exhibit A

CCE’S DISCLOSURE SCHEDULES

 

S-1

--------------------------------------------------------------------------------

Section 1.1(a) KNOWLEDGE

Robert O. Bond

Gary W. Lefelar

Shelley A. Corman

Don R. Hawkins

Michael T. Langston

Gary P. Smith

William A. Kendrick

 

S-2

--------------------------------------------------------------------------------

Section 1.1((b)

Pro Forma Adjusted Balance Sheet

See Appendix 1.1(b)

 

S-3

--------------------------------------------------------------------------------

TRANSWESTERN PIPELINE COMPANY, LLC

PRO FORMA ADJUSTED BALANCE SHEET

As of 06/30/06

($000)

Appendix 1.1(b)

 

     June
2006     Remove debt
from
Current (a)    Reflect
Dividend (b)     Total  

Assets

         

Current Assets

         

Cash

   22,141         (22,000 )    141   

Accounts Receivable - Assoc Co’s

   119           119   

Accounts Receivable - Other

   18,722           18,722   

Transportation and Exchange Gas Receivable

   5,418           5,418   

Materials and Supplies

   950           950   

Other Current Assets

   4,949           4,949                           

Total Current Assets

   52,299         (22,000 )    30,299   

Property, Plant & Equipment

         

Property, Plant & Equipment, Gross

   1,084,468           1,084,468   

Accumulated Depreciation

   (33,396 )         (33,396 )                         

Property, Plant & Equipment, Net

   1,051,072           1,051,072   

Other Assets

   113,289           113,289   

Goodwill

         

Regulatory Assets

   62,561           62,561   

Other Long Term Assets

   38,897           38,897                           

Total Other Assets

   214,747           214,747                           

Total Assets

   1,318,118         (22,000 )    1,296,118                           

Liabilities & Membership Interest

         

Current Liabilities

         

Accounts Payable - Assoc Co’s

   3,601           3,601   

Accounts Payable - Other

   1,857           1,857   

Transportation and Exchange Gas Payable

   6,476           6,476   

Accrued Taxes, other than income

   6,477           6,477   

Accrued Interest

   3,415           3,415   

Other Current Liabilities

   10,656           10,656                           

Total Current Liabilities

   32,482           32,482   

Other Liabilities

   520,000           520,000   

Long Term Debt, Senior Notes

         

Long Term Debt, Revolver

         

Other Long Term Liabilities

   11,708           11,708                           

Total Other Liabilities

   531,708           531,708   

Total Liabilities

   564,190           564,190   

Member’s Equity

   753,928         (22,000 )    731,928                           

Total Liabilities & Membership interest

   1,318,118         (22,000 )    1,296,118                           

Pro Forma Working Capital

          (2,183 )               

 

(a) to exclude any short term debt or current portions of long term debt from
Working Capital by reclassifying to non-current

(b) to reflect the Impact of the TWP portion of the payment of an anticipated
$50 million cash distribution to the members of CCE prior to closing

 

S-4

--------------------------------------------------------------------------------

Section 3.1(b)

QUALIFICATION

 

1. Arizona

 

2. Colorado

 

3. New Mexico

 

4. Oklahoma

 

5. Texas

 

S-5

--------------------------------------------------------------------------------

Section 3.2

AUTHORITY RELATIVE TO THIS AGREEMENT

None.

 

S-6

--------------------------------------------------------------------------------

Section 3.3(a)

TPC INTERESTS

The rights contained in the Amended and Restated Limited Liability Company
Agreement of CCE Holdings, LLC, as amended.

 

S-7

--------------------------------------------------------------------------------

Section 33(b)

TPC INTERESTS

None.

 

S-8

--------------------------------------------------------------------------------

Section 3.3(c)

TPC INTERESTS

None.

 

S-9

--------------------------------------------------------------------------------

Section 3.4

CONSENTS AND APPROVALS

 

1. Consent of the Missouri Public Service Commission.

 

2. Consent of the Federal Communications Commission.

 

3. Consent of the Massachusetts Department of Telecommunications and Energy.

 

4. Consent required under the Bridge Loan Agreement, dated as of March 1, 2006,
by and among Southern Union Company and Enhanced Service Systems, Inc., as the
Borrowers, and certain Banks party thereto.

 

5. Consent required under the Fourth Amended and Restated Revolving Credit
Agreement dated as of September 29, 2005, as amended by the First Amendment
effective as of February 27, 2006, by and among Southern Union Company as the
Borrower and the Banks named therein.

 

6. Consents, waivers and/or notices are required under the documents evidencing
the Existing TPC Debt and the Existing TW Holdings Debt.

 

S-10

--------------------------------------------------------------------------------

Section 3.5

NO CONFLICT OR VIOLATION

Section 3.4 of the CCE Disclosure Letter is incorporated herein by reference.

 

S-11

--------------------------------------------------------------------------------

Section 3.7(a)

CONTRACTS

Operational Gas Sales Contracts

 

1. Base Contract for Short Term Sale and Purchase of Natural Gas dated
January 31, 2001 between TPC and Sempra Energy Trading Corp.

 

2. Base Contract for Sale and Purchase of Natural Gas dated March 17, 2005
between TPC and ConocoPhillips Company.

Gas Transportation Contracts - Firm

 

1. FTS-1 Firm Transportation Contract (Contract #27252) effective November 1,
2000, by and between TPC and Southwest Gas Corporation.

 

2. FTS-1 Firm Transportation Contract (Contract # 10281), effective April 1,
2003, by and between TPC and Tenaska Marketing Ventures.

 

3. FTS-1 Firm Transportation Contract (Contract # 10525), effective January 1,
2004, by and between TPC and Encana Marketing (USA), Inc.

 

4. FTS-1 Firm Transportation Contract (Contract # 100622), effective June 1,
2003, by and between TPC and Sacramento Municipal Utility District.

 

5. FTS-1 Firm Transportation Contract (Contract # 101109), effective April 1,
2005), by and between TPC and Agave Energy Co.

 

6. FTS-1 Firm Transportation Contract (Contract # 25924), effective March 1,
1998, by and between TPC and Chevron U.S.A., Inc.

 

7. FTS-4 Firm Transportation Contract (Contract # 101078), effective June 1,
2005, by and between TPC and ConocoPhillips Company.

 

8. FTS-1 Firm Transportation Contract (Contract # 27745), effective June 1,
2002, by and between TPC and Western Gas Resources Inc.

 

9. FTS-1 Firm Transportation Contract (Contract # 100048), effective June 15,
2002, by and between TPC and Frito Lay Inc.

 

10. FTS-1 Firm Transportation Contract (Contract # 101479), effective January 1,
2006, by and between TPC and Sempra Energy Trading Corp.

 

11. FTS-1 Firm Transportation Contract (Contract # 101622), effective May 1,
2007, by and between TPC and Agave Energy Co.

 

12. FTS-1 Firm Transportation Contract (Contract # 101625), effective
November 1, 1998, by and between TPC and Coral Energy Resources, L.P.

 

13. FTS-1 Firm Transportation Contract (Contract # 27566), effective March 1,
2002, by and between TPC and ConocoPhillips Company.

 

14. FTS-1 Firm Transportation Contract (Contract # 100524), effective May 1,
2003, by and between TPC and Cross Timbers Energy Services, Inc.

 

15. FTS-1 Firm Transportation Contract (Contract # 100294), effective
November 1, 2003, by and between TPC and ConocoPhillips Company.

 

16. FTS-1 Firm Transportation Contract (Contract # 101409), effective April 1,
2006, by and between TPC and Astra Power LLC.

 

17. FTS-1 Firm Transportation Contract (Contract # 100583), effective January 1,
2004, by and between TPC and Red Willow Production Company.

 

S-12

--------------------------------------------------------------------------------

18. FTS-1 Firm Transportation Contract (Contract # 101593), effective April 1,
2007, by and between TPC and Sacramento Municipal Utility District.

 

19. FTS-1 Firm Transportation Contract (Contract # 101595), effective March 1,
2007, by and between TPC and Chevron U.S.A., Inc.

 

20. FTS-1 Finn Transportation Contract (Contract # 100051), effective June 15,
2002, by and between TPC and United States Gypsum Company.

 

21. FTS-1 Firm Transportation Contract (Contract # 100303), effective
November 1, 2003, by and between TPC and BP Energy Company.

 

22. FTS-4 Firm Transportation Contract (Contract # 101203), effective
November 1, 2005, by and between TPC and PNM Gas Services.

 

23. FTS-4 Firm Transportation Contract (Contract # 101123), effective May 1,
2005, by and between TPC and Elm Ridge Resources, Inc.

 

24. FTS-1 Firm Transportation Contract (Contract # 101619), effective May 1,
2007, by and between TPC and Tenaska Marketing Ventures.

 

25. FTS-1 Finn Transportation Contract (Contract # 27606), effective October 1,
2001, by and between TPC and PNM Gas Services.

 

26. FTS-1 Firm Transportation Contract (Contract # 100248), effective
November 1, 2003) by and between TPC and Agave Energy Co.

 

27. FTS-1 Firm Transportation Contract (Contract #100749), effective October 1,
2003, by and between TPC and BP Energy Company.

 

28. FTS-1 Firm Transportation Contract (Contract # 21175), effective March 16,
1992, by and between TPC and Pacific Gas and Electric Company.

 

29. FTS-4 Firm Transportation Contract (Contract #101316), effective July 1,
2005, by and between TPC and ConocoPhillips Company.

 

30. FTS-1 Firm Transportation Contract (Contract # 100049), effective July 1,
2005, by and between TPC and Western Gas Resources Inc.

 

31. FTS-1 Firm Transportation Contract (Contract #101578), effective March 1,
2007), by and between TPC and UNS Gas, Inc.

 

32. FTS-1 Firm Transportation Contract (Contract # 100050), effective June 15,
2002, by and between TPC and BP Energy Company.

 

33. FTS-4 Firm Transportation Contract (Contract # 100923), effective May 1,
2005, by and between TPC and Red Willow Production Company.

 

34. FTS-4 Firm Transportation Contract (Contract # 100927), effective May 1,
2005, by and between TPC and SG Interests I, Ltd.

 

35. FTS-1 Firm Transportation Contract (Contract # 25025), effective December 1,
1996), by and between TPC and Burlington Resources Trading, Inc.

 

36. FTS-1 Firm Transportation Contract (Contract # 100052), effective June 15,
2002, by and between TPC and PPL Energyplus, LLC.

 

37. FTS-1 Firm Transportation Contract (Contract # 21165), effective March 16,
1992, by and between TPC and Pacific Gas and Electric Company.

 

38. FTS-1 Firm Transportation Contract (Contract # 25071), effective December 1,
1996, by and between TPC and BP Energy Company.

 

39. FTS-4 Firm Transportation Contract (Contract # 100925), effective May 1,
2005, by and between TPC and Burlington Resources Trading, Inc.

 

40. FTS-1 Firm Transportation Contract (Contract # 101189), effective
November 1, 2005, by and between TPC and Southern California Gas Company.

 

S-13

--------------------------------------------------------------------------------

41. FTS-1 Firm Transportation Contract (Contract # 27642), effective July 1,
2002, by and between TPC and Calpine Energy Services, L.P.

 

42. FTS-1 Firm Transportation Contract (Contract # 101629), effective April 1,
2007, by and between TPC and Pacific Gas and Electric Company.

 

43. FTS-1 Firm Transportation Contract (Contract # 101188), effective
November 1, 2005, by and between TPC and Southern California Gas Company.

 

44. FTS-4 Firm Transportation Contract (Contract # 100922), effective May 1,
2005, by and between TPC and ConocoPhillips Company.

 

45. FTS-4 Firm Transportation Contract (Contract # 100926), effective May 1,
2005, by and between TPC and BP Energy Company.

 

46. FTS-1 Firm Transportation Contract (Contract # 101427), effective
September 1, 2006, by and between TPC and Southwest Gas Corporation.

Certain of these agreements may be supported by parent guarantees or other
financial assurances.

Other Material Contracts

 

1. Section 3.7(b) of the CCE Disclosure Letter is incorporated herein by
reference.

 

2. Phoenix Project Expansion Agreement, dated December 14, 2005, between TPC and
Arizona Public Service Company, as amended.

 

3. Phoenix Project Expansion Agreement, dated December 14, 2005, between TPC and
Salt River Project Agricultural Improvement and Power District, as amended.

 

4. Phoenix Project Expansion Agreement, dated February 14, 2006, between TPC and
Southwest Gas Corporation, as amended.

 

5. Purchase and Sale Agreement, dated February 27, 2006, between TPC, El Paso
Natural Gas Company, and Salt River Project Agricultural Improvement and Power
District.

 

6. Compressor Services Related Agreements

 

  a. Electric Motor Lease Agreements, dated May 28, 2004, by and between Enron
Compression Services Company and TPC for Bisti Compressor Station, Bloomfield
Compressor Station and Gallup Compressor Station.

 

  b. Netting Agreements, dated May 28, 2004, by and between TPC and Enron
Compression Services Company for Bisti Compressor Station, Bloomfield Compressor
Station and Gallup Compressor Station

 

  c. Assignment Agreements, dated May 28, 2004, by and between TPC and Enron
Compression Services Company for Bisti Compressor Station, Bloomfield Compressor
Station and Gallup Compressor Station.

 

  d. Letter Agreement, dated May 28, 2004 between TPC and Enron Compression
Services Company for the Expansion of Gallup, Bisti and Bloomfield Compressor
Stations

 

  e Amended and Restated Compression Services Agreement by and between TPC and
Enron Compression Services Company for Bisti Compressor Station, Bloomfield
Compressor Station and Gallup Compressor Station in accordance with the Letter
Agreement of May 28, 2004.

 

S-14

--------------------------------------------------------------------------------

  f. Amended and Restated Operations and Maintenance Agreement, by and between
TPC and Enron Compression Services Company for Bisti Compressor Station,
Bloomfield Compressor Station and Gallup Compressor Station.

 

  g. Assignment and Bill of Sale for Motor and Drive Systems, dated May 28,
2004, by and between ECS Compression Services, L.L.C. and TPC.

 

  h. Purchase and Sale Agreement, dated as of September 21, 2004, by and among
Enron Compression Services Company and Paragon ECS Holdings, LLC.

 

  i. Purchase and Settlement Agreement and Mutual Release dated as of April 30,
2004, among Enron Compression Services Company, Inc., ECS Compression Company,
LLC, and TPC

 

  j. Purchase and Sale Agreement, dated as of September 21, 2004, by and among
Enron Compression Services Company and Paragon ECS Holdings, LLC.

 

  k. Amendment, dated November 12, 2004, approved by TPC and Paragon ECS
Holdings, LLC, to Letter Agreement, dated May 28, 2004, between Enron
Compression Services Company and TPC.

 

7. Blanco Hub Facilities: Construction and Ownership Agreement dated
November 18, 1991, among Northwest Pipeline Corporation, TPC and Gas Company of
New Mexico.

 

8. LaPlata Facilities: La Plata Facilities Ownership and Operating Agreement
dated November 3, 1995, between Northwest Pipeline Corporation and TPC.

 

9. Extension Agreement between TPC and the Navajo Nation dated May 11, 2001;
Memorandum of Understanding dated October 31, 1984 between TPC and the Navajo
Nation; Memorandum of Understanding dated March 4, 1991 between TPC and the
Navajo Nation and Amendment No. 1 to the Extension Agreement of May 1.1, 2001
between the Navajo Nation and TPC for the Construction of the New San Juan
Lateral 36” Loop Line.

 

10. Right-Of Way Agreement between Southern Ute Indian Tribe, TPC and Northwest
Pipeline Corporation dated May 2006.

 

11. Memorandum of Understanding between TPC and the Pueblo of Laguna dated
September 4, 2001.

 

12. Operating Agreement between Pacific Gas & Electric Company and TPC dated
June 27, 1995.

 

13. Agreement between and TPC and Southern California Gas Company regarding PCB
Claims Post-1990 Costs dated May 15, 1992.

 

14. Work Offer Agreement, No. ESA-60-2003-3833, dated April 24, 2006, by and
between TPC and TRC Environmental Corporation.

 

15. Tasking Letter No. 06TW-PL-5440-003, dated April 24, 2006, between TPC and
AMEC Paragon, Inc. Tasking Letter No. 05-TW-PSA-2385, dated April 11, 2006,
between TPC and Universal Ensco, Inc.

 

16. Work Offer Agreement, No. ROW-60-2004-4222, dated May 9, 2006, between TPC
and Cinnabar Service Company.

 

17. Long Term Service Agreement, LTSA-60-2001-4014, dated October 11, 2001,
between TPC and GE Oil & Gas, Inc.

 

18. Purchase Order, P-20070001 for Phoenix Expansion Project; definitive
agreement is still under negotiation.

 

S-15

--------------------------------------------------------------------------------

19. Construction Contract, by and between Gregory & Cook Construction, Inc. and
TPC for Phoenix Lateral Project; definitive agreement is still under
negotiation. A potentially binding agreement to pay Gregory & Cook Construction,
Inc. one million dollars in the event the Phoenix Lateral Project is cancelled
prior to the end of September and four million dollars in the event the Phoenix
Lateral Project is cancelled during the period of October through December 2006.

 

S-16

--------------------------------------------------------------------------------

Section 3.7(b)

MATERIAL CONTRACTS — AFFILIATE CONTRACTS

 

1. TPC entered into a Cross License Agreement, dated as of March 31, 2004, by
and among Enron Corp., Northern Border Intermediate Limited Partnership, Florida
Gas Transmission Company, Northern Border Pipeline Company, Enron Operations
Services, LLC and Northern Plains Natural Gas Company.

 

2. Guaranty, dated as of November 17, 2004, by and among CrossCountry Energy,
LLC, CrossCountry Energy Services, LLC, CrossCountry Alaska, LLC CrossCountry
Citrus, LLC Transwestern Holding Company, LLC and TPC, and Enron Operations
Services, LLC, Enron Transportation Services, LLC, EOC Preferred, LLC and Enron
Corp.

 

3. Operator Balancing Agreement between TPC and Panhandle Eastern Pipe Line
Company dated October 1, 1994.

 

4. Operator Balancing Agreement, Contract # 21711 between TPC and Panhandle
Eastern Pipe Line Company dated October 1, 1994.

 

5. Interruptible Transportation Contract # 20903 between TPC and Southern Union
Gas Energy, Ltd., dated March 1, 1992.

 

6. Firm Transportation Contract # 101603 between TPC and Southern Union Gas
Energy, Ltd., dated April 1, 2006.

 

7. Firm Transportation Contract # 101604 between TPC and Southern Union Gas
Energy, Ltd., dated April 1, 2006.

 

8. Supply Pooling Service, Contract# 22666 between TPC and Southern Union Gas
Energy, Ltd., dated September 1, 1993.

 

9. Interconnect Agreement, effective February 15, 1996, by and between TPC and
Sid Richardson Pipeline Co.

 

10. Interconnect Agreement, effective July 30, 1996, by and between TPC and Sid
Richardson Pipeline Co.

 

11. Interconnect Agreement, effective December 1, 1996, by and between TPC and
Sid Richardson Pipeline Co.

 

12. Interconnect Agreement, effective January 9, 1996, by and between TPC and
Sid Richardson Pipeline Co.

 

13. Interconnect Agreement, effective October 16, 1995, by and between TPC and
Sid Richardson Pipeline Co.

TPC provides services to its Affiliates and Affiliates of TPC provide services
to TPC in the ordinary course of business and pursuant to the Administrative
Services Agreement dated November 5, 2004, by and between CCE Holdings, LLC and
SU Pipeline Management LP. To the extent that such services are not paid for by
the recipient at the time they are rendered, amounts owing in respect of such
services are accounted for as receivables or payables, as appropriate, by TPC.

 

S-17

--------------------------------------------------------------------------------

Section 3.7(c)

MATERIAL CONTRACTS — BINDING CONTRACTS

By letter dated May 12, 2006, Calpine Energy Services notified TPC that it was
repudiating its transportation services agreement (Contract #27642). TPC has
filed two related claims in Calpine’s bankruptcy proceeding. The first claim
relates to unpaid transportation reservation amounts for the remainder of the
contract through 2017. The second claim relates to the $4.6 million corporate
guarantee which provided credit support for the transportation arrangement.
Calpine’s annual reservation payments per the contract total $5.4 million.
Calpine has not paid its transportation reservation invoices since March 2006.

 

S-18

--------------------------------------------------------------------------------

Section 3.7(d)

MATERIAL CONTRACTS — DEFAULTED CONTRACTS

None.

 

S-19

--------------------------------------------------------------------------------

Section 3.8

COMPLIANCE WITH LAW

None.

 

S-20

--------------------------------------------------------------------------------

Section 3.9(a)

PERMITS

Sections 3.11 and 3.15 of the CCE Disclosure Letter are incorporated herein by
reference.

 

S-21

--------------------------------------------------------------------------------

Section 3.9(b)

TPC PERMITS

Numerous permits, licenses, certificates of authority, orders and approvals are
associated with the ownership and operation of an interstate natural gas
pipeline. Set forth below is a sampling of such Permits that may be material to
TPC for illustrative purposes.

Land Ricks Permits

 

Various    Bureau of Land Management Grants of Right-of Way Various    State of
Arizona Grants of Right-of Way Various    State of California Grants of
Right-of-Way Various    State of New Mexico Grants of Right-of-Way Various   
State of Texas Grants of Right-of-Way Various    United States Forest Service
Grants of Right-of-Way Various    Bureau of Indian Affairs Grants of
Right-of-Way Various    Road Crossing Permits Various    Railroad Licenses
Various    Water Crossing Permits Various    Bureau of Indian Affairs Tower
Grants or Permits

Environmental Permits

TPC maintains various environmental permits issued by agencies which regulate
air emissions or discharges from facility operations. Such permits include, but
are not limited to: 17 Title V air emissions permits issued by states, USEPA or
the Navajo Nation, nine non-Title V air emissions permits issued by states and
six New Mexico Oil Conservation Department (OCD) Discharge Plans.

FERC Permits

See Appendix 3.9(b)

 

S-22

--------------------------------------------------------------------------------

FCC Licenses

 

Call Sign

  

Licensee

   FRM    Radio Service   

Status

   Expiration Date

1 KAP912

   TPC    0011523271    IG    Active    05/30/2011

2 KAW224

   TPC    0011523271    IG    Active    10/13/2013

3 KBP98

   TPC    0011523271    1G    Active    04/06/2013

4 KE4265

   TPC    0011523271    1G    Active    05/23/2011

5 KFY657

   TPC    0011523271    IG    Active    01/13/2012

6 KGL924

   TPC    0011523271    IG    Active    03/05/2013

7 K93697

   TPC    0011523271    IG    Active    12/22/2013

8 KJB725

   TPC    0011523271    IG    Active    08/05/2013

9 IC1E727

   TPC    0011523271    IG    Active    11/06/2014

10 K1G321

   TPC    0011523271    IG    Active    05/30/2011

11 10Q289

   TPC    0011523271    IG    Active    03/24/2012

12 KKZ281

   TPC    0011523271    1G    Active    01/13/2012

13 KK2282

   TPC    0011523271    1G    Active    07/21/2014

14 KKZ284

   TPC    0011523271    IG    Active    06/10/2011

15 KKZ286

   TPC    0011523271    1G    Active    03/16/2014

16 KKZ287

   TPC    0011523271    1G    Active    07/21/2014

17 KKZ304

   TPC    0011523271    IG    Active    05/11/2012

18 KKZ305

   TPC    0011523271    IG    Active    04/19/2011

19 KKZ307

   TPC    0011523271    IG    Active    06/20/2014

20 KLG791

   TPC    0011523271    1G    Active    02/22/2015

21 KNEF590

   TPC    0011523271    IG    Active    11/17/2012

22 KNE I623

   TPC    0011523271    IG    Active    01/25/2013

23 KNGD500

   TPC    0011523271    IG    Active    03/23/2013

24 KNHX4 I 7

   TPC    0011523271    IG    Active    11/29/2013

25 KN1E53 6

   TPC    0011523271    IG    Active    01/11/2014

26 KNJJ855

   TPC    0011523271    IG    Active    06/13/2014

27 KNJJ856

   TPC    0011523271    IG    Active    06/13/2014

28 KNNI500

   TPC    0011523271    IG    Active    01/31/2011

29 KNNR655

   TPC    0011523271    1G    Active    04/15/2011

30 KNNU918

   TPC    0011523271    1G    Active    05/08/2011

31 KOM870

   TPC    0011523271    IG    Active    08/09/2014

32 KOM872

   TPC    0011523271    IG    Active    01/13/2012

33 KOM874

   TPC    0011523271    IG    Active    05/30/2011

34 KPU72

   TPC    0011523271    IG    Active    10/18/2011

35 KTE812

   TPC    0011523271    IG    Active    06/03/2011

36 WCQ69

   TPC    0011523271    IG    Active    03/14/2014

37 WDC561

   TPC    0011523271    IG    Active    01/11/2014

38 WNDX5 05

   TPC    0011523271    IG    Active    04/23/2013

39 WNFQ370

   TPC    0011523271    IG    Active    07/25/2015

40 WNGF772

   TPC    0011523271    IG    Active    04/24/2011

41 WN51212

   TPC    0011523271    1G    Active    05/21/2012

42 WNJ1529

   TPC    0011523271    IG    Active    02/08/2014

43 WNKA363

   TPC    0011523271    IG    Active    01/26/2014

44 WNNM556

   TPC    0011523271    IG    Active    02/02/2014

45 WNP0988

   TPC    0011523271    IG    Active    06/20/2014

46 WNTT239

   TPC    0011523271    MG    Active    04/20/2009

47 WNTT240

   TPC    0011523271    MG    Active    10/28/2008

48 WNTT557

   TPC    0011523271    MG    Active    12/30/2008

49 WNTU3 85

   TPC    0011523271    MG    Active    04/20/2009

50 WNTU634

   TPC    0011523271    MG    Active    01/13/2009

51 WNVX682

   TPC    0011523271    IG    Active    03/27/2011

 

S-23

--------------------------------------------------------------------------------

Cali Sign

  

Licensee

   FRM    Radio Service   

Status

   Expiration Date

52 WNVY471

   TPC    0011523271    IG    Active    03/29/2011

53 WNWA248

   TPC    0011523271    IG    Active    04/08/2011

54 WNWC564

   TPC    0011523271    IG    Active    04/1512011

55 WNWQ551

   TPC    0011523271    IG    Active    06/25/2011

56 WNXT696

   TPC    0011523271    IG    Active    12/01/2014

57 WNXY928

   TPC    0011523271    IG    Active    10/25/2014

58 WNYB559

   TPC    0011523271    IG    Active    12/17/2011

59 WNYC565

   TPC    0011523271    IG    Active    12/31/2011

60 WNYG505

   TPC    0011523271    1G    Active    01/24/2012

61 WNZK694

   TPC    0011523271    IG    Active    10/25/2014

62 WNZR865

   TPC    0011523271    IG    Active    06/09/2012

63 WPBE816

   TPC    0011523271    IG    Active    12/01/2012

64 WPBM528

   TPC    0011523271    IG    Active    01/12/2013

65 WPDA815

   TPC    0011523271    IG    Active    03/05/2013

66 WPDE839

   TPC    0011523271    IG    Active    09/17/2013

67 WPEB947

   TPC    0011523271    IG    Active    01/24/2014

68 WPED468

   TPC    0011523271    IG    Active    02/01/2014

69 WPGB321

   TPC    0011523271    IG    Active    11/30/2014

70 WPGS472

   TPC    0011523271    1G    Active    03/07/2015

71 WPGS532

   TPC    0011523271    1G    Active    03/09/2015

72 WPIS503

   TPC    0011523271    IG    Active    10/18/2015

73 WP3F445

   TPC    0011523271    MG    Active    06/07/2011

74 WP11391

   TPC    0011523271    IG    Active    06/28/2011

75 WPKL233

   TPC    0011523271    IG    Active    03/31/2012

76 WPKV495

   TPC    0011523271    IG    Active    08/04/2012

77 WPLD684

   TPC    0011523271    IG    Active    03/18/2012

78 WPLV278

   TPC    0011523271    1G    Active    03/05/2013

79 WPMS873

   TPC    0011523271    IG    Active    12/04/2013

80 WPMT448

   TPC    0011523271    IG    Active    12/10/2013

81 WPNV836

   TPC    0011523271    IG    Active    07/09/2014

82 WPOQ405

   TPC    0011523271    MG    Active    08/03/2008

83 WPOQ406

   TPC    0011523271    MG    Active    08/03/2008

84 WPOY492

   TPC    0011523271    10    Active    09/01/2014

85 WPR77

   TPC    0011523271    IG    Active    06/18/2012

86 WPXP622

   TPC    0011523271    IG    Active    05/15/2013

87 WPXT315

   TPC    0011523271    IG    Active    06/05/2013

88 WQCB633

   TPC    0011523271    IG    Active    01/25/2015

89 WQCU748

   TPC    0011523271    IG    Active    05/31/2015

90 WQDY871

   TPC    0011523271    IG    Active    12/03/2015

91 WQEA476

   TPC    0011523271    IG    Active    12/13/2015

92 WQET920

   TPC    0011523271    MG    Active    04/13/2016

93 WQH652

   TPC    0011523271    IG    Active    07/31/2015

94 WRM32

   TPC    0011523271    IG    Active    01/25/2013

 

S-24

--------------------------------------------------------------------------------

APPENDIX 3.9(b)

FERC Permits

1958

 

G-14871   

Application filed for certification to construct and operate a natural gas
pipeline system from the Panhandle-Hugoton area of Texas and Oklahoma and the
Permian Basin area of Texas and New Mexico to the California-Arizona border near
Needles, California and to sell and deliver 300,000 Mcf/day to Pacific Lighting
Gas Supply Co for resale in Southern California. Approximately 1.809 miles of
pipeline consisting of: 670 miles of 30” pipe (mainline); 485 miles of 24” pipe;
65 miles of 20” pipe; 45 miles of 16” pipe; 108 miles of 12” pipe; 158 miles of
10” pipe; 116 miles of 8” pipe; 103 miles of 6” pipe; and 59 miles of 4” pipe.

 

Compressor stations: 7,000 HP at Station No. 3, located in Coconino County,
Arizona; 7,000 HP at Station No. 5, located in McKinley County, New Mexico;
7,000 HP at Station No. 7, located in Socorro County, New Mexico; 7,000 HP at
Station No. 9, located in Chaves County, New Mexico, near Roswell, at the
juncture of the 30” mainline with the West Texas and Panhandle lateral systems;
7,000 HP at Station WT-1, located in Eddy County, New Mexico; 1,930 HP at the
Keystone Field Station, located in the vicinity of Keystone Field; 1,320 HP at
the Hugoton Field Station, located in the vicinity of Hugoton Field and 2,640 HP
at Cities Service Field Station, located in the vicinity of Guymon, Beaver
County, Oklahoma.

 

Other facilities include: Metering & regulatory facilities; a carbon dioxide
removal plant located in the Puckett Field in Pecos County, Texas and all
appurtenant facilities necessary for the operation and maintenance of the
foregoing facilities.

 

Amendment filed, 7/21/58, whereby additional contracts and revisions to Exhibits
K, G, G-11, KN, N and P were submitted. Supplement filed 8/30158. Order issued
4/28/59 denying El Paso’s Motion for Determination of Adequacy of Markets. Also
on 4/28/59 an order was issued dismissing Union Oil’s Appeal From Presiding
Examiner’s Ruling On Admissibility of Evidence. Order Dismissing Petition For
Reconsideration Of Commission’s Order Dismissing Appeal From Presiding
Examiner’s Ruling On Admissibility Of Evidence, issued 6/1/59. Opinion And Order
(No. 328) Modifying And Adopting Presiding Examiner’s Decision As Modified,
issued 8/10/59. Order Upon Rehearing Modifying Opinion No. 328 And Order Issued
August 10, 1959, issued 9/23/59. Order Amending Order Upon Rehearing Modifying
Opinion No. 328 And Order Issued August 10, 1959, issued 9129159. Order On
Admissibility of Evidence, issued 4/15/60.

190289_1

--------------------------------------------------------------------------------

1958

Order Modifying And Adopting Presiding Examiner’s Decision As Modified Upon
Reopened Proceedings Determining Price Level For Certificates of Public
Convenience and Necessity, issued 7/11/62. Order Denying Applications for
Rehearing, issued 8/29/62.

 

Filed:

   04/15/58      

Order issued:

   04/28/59    21 FPC 594    (1959 ) 

Order issued:

   04/28/59    21 FPC 592    (1959 ) 

Order issued:

   06/01/59    21 FPC 810    (1959 ) 

Opinion and Order (No. 328):

   08/10/59    22 FPC 391    (1959 ) 

Order issued:

   09/23/59    22 FPC 542    (1959 ) 

Order issued:

   09/29/59    22 FPC 575    (1959 ) 

Order issued:

   04/15/60    23 FPC 605    (1960 ) 

Order issued:

   07/11/62    28 FPC 109    (1962 ) 

Order issued:

   08/29/62    28 FPC 393    (1962 ) 

 

Appendix 3.9(b)

Page 2

--------------------------------------------------------------------------------

1960

 

G-20464   

Application filed for certification to construct and operate facilities in areas
co-existive with its system to enable applicant to receive and deliver natural
gas.

 

Filed:

   04/15/58

Order issued:

   04/28/59 21 FPC 594 (1959)

Order issued:

   04/28/59 21 FPC 592 (1959)

Order issued:

   06/01/59 21 FPC 810 (1959)

Opinion and Order (No. 328):

   08/10/59 22 FPC 391 (1959)

Order issued:

   09/23/59 22 FPC 542 (1959)

Order issued:

   09/29/59 22 FPC 575 (1959)

Order issued:

   04/15/60 23 FPC 605 (1960)

Order issued:

   07/11/62 28 FPC 109 (1962)

Order issued:

   08/29/62 28 FPC 393 (1962)

 

CP60-26    TW’s application for “Budget-Type authority to construct and operate
field facilities to enable the receipt of natural gas during 1960. $3,000,000
total; $500,000 single project limit.

 

Filed:

   02/08/60

Order issued:

   05/04/60 23 FPC 662 (1960)

 

CP60-49   

Application filed for certification to construct and operate gathering
facilities in the

Atoka-Penn Field in Eddy County, New Mexico and to deliver gas to Pacific
Lighting Gas Supply Co. First supplement filed April 4, 1960.

 

Filed:

   03/07/60

Order issued:

   06/11/63 29 FPC 1159 (1963)    (See G-20464)

Order & Opinion No. 472 issued:

   08/31/65 34 FPC 659 (1965)    (See G-20464)

 

CP60-50    Application filed for certification to construct and operate
gathering facilities to receive gas from various producers in Pecos County,
Texas and Chaves County, New Mexico and deliver gas to Pacific Lighting Gas
Supply Company. Facilities include: approximately 7 miles of 6” pipe, with
appurtenances, extending in a northwesterly direction from a point of connection
with its existing 24” Panhandle lateral to a point in the Newmill Field, Chaves
County, New Mexico to purchase and receive natural gas produced by Charles P.
Miller and approximately 18.6 miles of 4” supply pipeline extending in a
northeasterly direction from a point of connection with its existing 20” West
Texas Lateral to a point in the Putnam and Chenot Fields, Pecos County, Texas to
purchase and receive natural gas produced by H.J. Mosser, G.D. Putnam in the
Putnam Field and Texas Crude Oil

 

Appendix 3.9(b)

Page 3

--------------------------------------------------------------------------------

1960

Company in the Chenot Field. Supplement filed 414/60. On 11/22/61, a Commission
letter directed TW to request an amendment to the 10/13/60 Order, to conform
such order with the facilities actually constructed by TW. 1/8/62, filed an
application to amend the order — submitted revised Exhibits F, G, G-I, G—II and
H and a complete explanation for the construction of facilities materially
different from those originally authorized. 6111/63, Order issued.

 

Filed:    03/07/60 Order issued:    10/13/60 24 FPC 876 (1960) Order issued:   
06/11/63 29 FPC 1159 (1963) Order & Opinion No. 472 issued:    08/31/65 34 FPC
659 (1965)    (See G-20464)

 

Appendix 3.9(b)

Page 4

--------------------------------------------------------------------------------

1961

 

CP61-63    Application filed for certification to construct and operate
facilities to take gas from Continental Oil at the tailgate of its El Mar &
Maljamar plants in Lea county, New Mexico. Supplement flied 10/7/60 in response
to the Commission’s letter of 9/20/60, requesting proof of ability to provide
necessary funds as required by Exhibit L. TW

 

  Filed:    09/01/60   Order issued:    06/11/63 29 FPC 1159 (1963)      (See
G-20464)   Order & Opinion No. 472 issued:    08/31/65 34 FPC 659 (1965)     
(See G-20464)

 

CP61-168    TW’s application for “Budget-Type authority to construct and operate
field facilities to enable the receipt of natural gas during 1961. $3,000,000
total; $500,000 single project limit. Amendment filed 9/6/61 requesting
authorization to construct and operate additional well connection facilities.

 

  Filed:    12/21/60   Order issued:    02/28/61 25 FPC 358 (1961)

 

CP61-243    Application filed for certification to construct and operate
gathering facilities to receive gas at the tailgate of a processing plant to be
constructed in Bluitt Field, Roosevelt County, New Mexico and at the wellhead
from various producers in the field.

 

  Filed:    03/15/61   Temporary authorization granted:    05/12/61   Order
issued:    06/11/63 29 FPC 1159 (1963)      (See G-20464)   Order & Opinion No.
472 issued:    08/31/65 34 FPC 659 (1965)      (See G-20464)

 

CP61-299    Application filed for certification to construct and operate
facilities to exchange gas with El Paso. Facilities include: 6.89 miles of 4412”
field lines and appurtenant facilities. Supplement filed 1/22/62 to add 14 wells
in Beaver & Ellis Counties, Oklahoma. Second Supplement & amendment filed
8/19/63 to delete nine wells from the application and reflect change of TW’s
interest in the Jennie 0. Pearson well. Third supplement filed 7/6/64 to install
a tap valve. A petition to amend application was filed 4/23/65 to construct and
operate an additional tap & valve to interconnect El Paso’s Feldman A No. 2 well
and to delete 5 wells from the exchange. Petition to amend order filed to
construct and operate an additional tap & valve to connect the Buzzard No. 1-75
well.

 

  Filed:    05/24/61   Order issued:    01/11/65    29 FPC 1159    (1963)  
Order issued:    02/21/66    29 FPC 1159    (1963)   Order issued:   
04/24/67    29 FPC 1159    (1963)

 

Appendix 3.9(b)

Page 5

--------------------------------------------------------------------------------

1962

 

CP62-185   

Section 7(c) application filed for authorization to sell interruptible natural
gas to Climax Chemical Company in Lea County, New Mexico using the Monument
lateral. Granted temporary authorization on 2/27192.

 

 

Filed:

  02/09/62    

Order issued:

  06/15/62 27 FPC 1357 (1962)  

 

CP62-192

  

Section 7(c) application filed for authorization to use the existing
certificated pipeline facilities to enable a direct industrial sale of natural
gas to Atlantic Refining Co pursuant to an agreement between parties dated
7/5/61. The gas will be delivered to Atlantic at a point on the existing lateral
line in Ward County, Texas. A tap and metering facilities will be installed to
enable the sale. 7W commenced the sale under the “mistaken belief that a
certificate was not required and filed the application to continue the sale?

 

  Filed:   02/15/61     Order issued:   06/09/62 28 FPC 92 (1962)  

 

CP62-293   

Section 7(c) application filed for authorization to sell gas to Pioneer Natural
Gas Company, deliver gas at 8 points where there are existing taps and construct
approximately 5 taps valves on the 24" mainline in 7 Texas counties.

 

  Filed:   06/06/62     Order issued:   01/11/65 28 FPC (1962)  

 

Appendix 3.9(b)

Page 6

--------------------------------------------------------------------------------

1963

 

CP63-143    Section 7(c) application filed for authorization to construct and
operate a tap valve on the transmission line in Curry County, New Mexico and the
transportation and sale of surplus natural gas, on an interruptible basis, to
Southern Union Gas company, for resale through Southern’s distribution
facilities in Portales, New Mexico.

 

  Filed:   11/22/62     Order issued:   04/03/63 29 FPC 702 (1963)  

 

CP63-204    Application filed for a temporary certificate for authorization to
sell gas to Pacific Lighting Gas Supply Company on an emergency basis and to
construct and operate Stations No. 1 & No. 8.

 

  Filed:   04/09/63     Temporary certificate denied:   05/03/63     Motion for
rehearing filed:   05/08/63     Motion for rehearing denied:   06/04/63 29 FPC
1132 (1963)  

 

Appendix 3.9(b)

Page 7

--------------------------------------------------------------------------------

1964

 

CP64-34

   Section 7(c) application filed for authorization to sell natural gas to
Pacific Lighting Gas Supply Company.

 

  Filed:   08/02/63     Order issued:   12/16/63 30 FPC 1520 (1963)  

 

CP64-90    Section 7(c) application filed for authorization to construct and
operate a 650 HP compressor station on the 8" Stratford Lateral and 5.2 miles of
8" pipe along the Strafford Lateral.

 

  Filed:   10/10/63     Supplement filed:   11/13/63     Order issued:  
02/18/64 31 FPC 431 (1964)  

 

CP64-237    TW’s application for *Budget-Type authority to construct and operate
field facilities to enable the receipt of natural gas during 1964. $1,200,000
total; $300,000 single project limit. Amendment filed 6/1/64 adjusting figures
to $1,000,000 total; $250,000 single project.

 

  Filed:   04/14/64     Order issued:   06/21/64 32 FPC 228358 (1961)

 

Appendix 3.9(b)

Page 8

--------------------------------------------------------------------------------

1965

 

CP65-6   

Section 7(c) application filed for authorization to install and operate a 1,000
HP gas turbine compressor at Keystone Station No. 2.

 

  Filed:   07/06/64     Supplement filed:   07/15/64     Order issued:  
09/28/64 32 FPC 864 (1964)  

 

CP65-103   

Application filed for authorization to acquire minor gas facilities which were
installed by producers in Texas, Kansas and Oklahoma (small diameter gathering
lines, dehydrators, metering facilities.).

 

  Filed:   10/15/64     Order issued:   01/13/65 33 FPC 70 (1965)  

 

Appendix 3.9(b)

Page 9

--------------------------------------------------------------------------------

1966

 

CP66-288    Section 7(c) application filed for authorization to install and
operate a 1,000 HP gas turbine compressor at Keystone Station No. 1 and a 660 HP
compressor at Atoka.

 

  Filed:   03/14/66     Order issued:   05/12/66 35 FPC 733 (1966)  

 

Appendix 3.9(b)

Page 10

--------------------------------------------------------------------------------

1967

 

CP67-81    Section 7(c) application filed for authorization to construct
additional facilities on the West Texas Lateral located in Texas and New Mexico;
8 miles of 36" loop adjacent to Compressor Station WT-2 in West Texas and 8
miles of 30" loop adjacent to Compressor WT-1 in Southeast New Mexico.

 

  Filed:   09/26/66     Supplement filed:   12/06/66     Order issued:  
02/28/67 75 FPC 421 (1967)  

 

Appendix 3.9(b)

Page 11

--------------------------------------------------------------------------------

1970

 

CP70-68    Section 7(c) application filed for authorization to interconnect with
El Paso Natural.

 

  Filed:   09/26/69     Order issued;   12/02/69 42 FPC 1052 (1969)  

 

Appendix 3.9(b)

Page 12

--------------------------------------------------------------------------------

1972

 

CP72-49    Section 7(c) application filed for authorization to construct 27.27
miles of 16” loop on the Crawford Lateral and install an additional 1,000 HP
compressor at the Crawford Station.

 

Filed:    08/30/71    Approval date:    11/17/71 46 FPC 1226 (1971)

 

Appendix 3.9(b)

Page 13

--------------------------------------------------------------------------------

1974

 

CP74-252    Section 7(c) application filed for authorization to construct and
install 19 additional compressors totaling 19,640 HP on the supply system in
Beaver County, Oklahoma; Lipscomb, Hemphill, Reeves and Ward Counties, Texas and
Eddy County, New Mexico.

 

Filed:    03/28/74    Supplement filed:    07/05/74    Order issued:    11/27/74
52 FPC 1540 (1974)

 

Appendix 3.9(b)

Page 14

--------------------------------------------------------------------------------

1978

 

CP78-399

   Application filed for authorization to purchase pipeline facilities from
Diamond Shamrock Corp. in Lipscomb County, Texas.

 

Filed:    06/28/78    Order issued:    01/24/79 6 FERC ¶ 161,063

 

(1979)   

 

Appendix 3.9(b)

Page 15

--------------------------------------------------------------------------------

1979

 

CP79-326

   TW/CITIES SERVICE. - Joint application for authorization to exchange up to
75,000 Dth per day. (This gas to be purchased from ONG by TW and delivered to
cities by Oklahoma natural at an existing interconnect between Oklahoma
natural & Cities Service in Woodward county, Ok and cities Service will
concurrently reduce the volumes received by Transwestern at an existing delivery
point between Cities & TW in Hemphill County, TX.

 

Filed:    05/25/79    Order issued:    07/26/79 8 FERC ¶61,067

 

CP79-422

   MICHIGAN-WISCONSIN PIPELINE CO. - Joint application for authority to
construct and operate a bi-directional metering station and to exchange gas at
an interconnect between the two systems, located in Sec. 36, Block B-1, H&GN
Survey, Roberts County, Texas. Authority also requested to exchange gas from
additional wells attached to respective gathering systems of each applicant as
they become available. The gas to be exchanged will be gathered and delivered
from various wells located in Beckham County, Oklahoma.

 

Filed:    07/30/79    Order issued:    01/08/80 10 FERC ¶ 61,020

 

Appendix 3.9(b)

Page 16

--------------------------------------------------------------------------------

1980

 

CP80-9

  

Petitions to amend the order of January 10, 1980 which authorized the
construction of two specified single gas purchase facilities costing in excess
of the single project cost limit of $2,500,000. TW constructed 19.7 miles of
12-inch pipeline and appurtenant facilities to connect gas supplies in the
Southeast Leedy Field, located in Roger Mills County, Ok and approximately
84,500 feet of 12-inch pipeline, the Feldman Lateral, and appurtenant facilities
to connect gas supplies in the Leedy Field located in the same county.

 

The order issued January 10, 1980 was amended to increase the total cost
limitation for gas supply facilities during the calendar year 1981 and further
amended to authorize the construction of two single onshore projects in excess
of the single project cost limitation.

  

    Filed:

   10/12/79      

    Order issued:

   01/10/80 10 FERC ¶62,013    CP80-9-001   

    Amendment filed

   04/06/81      

    Order issued:

   07/22/81 16 FERC ¶62,152      

    Amendment filed

   06/29/82    CP80-9-002    CP80-9-003      

    Order issued:

   09/27/82 20 FERC ¶62,544   

 

CP80-25

  

TW/CITIES SERVICE GAS COMPANY - Joint application with Cities Service for the
exchange of gas which will be gathered by Cities from 9 wells located near their
system in Dewey County, Ok and dedicated to TW, Cities will concurrently reduce
the volumes received from TW by equivalent quantity at the existing delivery
point between Cities and TW located in Hemphill County, TX.

 

Filed:    10/12/79    Certificate issued:    05/23/80 11 FERC ¶61,201

 

CP80-155    TW - Application for authorization to transport natural gas for
other interstate pipelines for periods not to exceed two years.

 

Filed:    12/26/79    Certificate issued:    05/27/80 10 FERC ¶ 61,191

 

CP80-476    TW/OASIS PIPELINE CO. - Applications for authorization to construct
an interconnect in Ward and Reeves Counties, Texas to receive gas from Oasis.

 

Filed:    08/01/80    Certificate issued:    05/27/80 10 FERC ¶ 61,191

 

Appendix 3.9(b)

Page 17

--------------------------------------------------------------------------------

1981

 

CP81-45    BUDGET-TYPE AUTHORIZATION - Application pursuant to Sec. 7 for
authorization to construct, remove and relocated and for permission for and
approval of the abandonment during the calendar year 1981, and operation of
field gas compression and related metering and appurtenant facilities. Amendment
filed for authorization to increase the total and single project cost
limitations during 1981.   

    Filed:

   11/10/80      

    Order issued:

   01/13/81 14 FERC ¶62,024    CP81-45-001   

    Amendment filed:

   04/03/81      

    Order issued:

   08/20/81 16 FERC ¶62,268   

 

CP81-99   

TWIINTRATEX GAS COMPANY - Application for authority to transport natural gas on
behalf of Intratex Gas Company for 10 years, construct, remove and relocate and
for approval of the abandonment during 1982, and operation of field gas
compression and related metering and appurtenant facilities. TW’s application
for rehearing was denied and INGAA’s and Delhi’s petition to intervene was
rejected in an order for rehearing issued Sept. 22, 1982.

  

    Filed:

   12/12/80      

    Notice of withdrawal filed:

   04/27/82      

    Withdrawal Effective:

   05/25/82    CP81-267    TW/ CITIES SERVICE GAS COMPANY - Original application
requested authorization to construct and operate two new 8,000 hp compressor
stations, consisting of two 4,000 hp gas turbine-driven centrifugal compressor
units, one in Roosevelt County, New Mexico and one in Deaf Smith county, Texas,
and 4,000 additional compressor horsepower at an existing compressor station in
Gray County, Texas, all on TW’s Panhandle Lateral in Texas and New Mexico. On
Oct. 22, 1981, Cities Service and on Oct. 23, 1981, Transwestem filed
applications for rehearing of the Sept. 24, 1981 order (16 FERC 1161,224).
Cities Services application for rehearing was dismissed and TW’s application for
rehearing was denied.   

    Filed:

   04/01/81      

    Order issued:

   09/241181 16 FERC ¶61,224      

    Filed for rehearing:

   10/23/81      

    Order issued:

   03/03//82 18 FERC ¶61,205   

 

Appendix 3.9(b)

Page 18

--------------------------------------------------------------------------------

1981

 

CP82-64    FIELD COMPRESSION - Application for authority to construct, remove
and relocate and for approval of the abandonment during 1982, and operation of
field gas compression and related metering and appurtenant facilities.   

    Filed:

   11/10/81      

    Certificate Issued:

   02/05/82 18 FERC ¶62,163      

    Order Approving Abandonment:

   02/05/82 18 FERC ¶62,163      

    Certificate Terminated Effective:

   11/18/82 date of acceptance of Blanket Certificate CP82-534   

BLANKET CERTIFICATE - Application for Blanket Certificate authorizing certain
transactions and abandonments. (Implement Section 157.208 thru 157.218.) CP80-9
(issued 01/10180, 10 FERC 1162,013 and CP82-64 (issued 02/05182, 18 FERC
1162,163) were surrendered upon acceptance of this certificate.

 

Filed:    09/17/82    Certificate Issued:    11/04/82 21 FERC ¶62,190

 

Appendix 3.9(b)

Page 19

--------------------------------------------------------------------------------

1985

 

CP85-441    GREAT PLAINS ABANDONMENT - Application for authority to abandon
sales of gas to Great Plains Gas Co. under Rate Schedule RW-1 (2 Mcf/d to
residence firm and max of 1,675 Mcf/d and 612,000 Mcf/yr), to operate facilities
to make direct sales to Great Plains customers and prior notice to install sales
taps and meters (43) under blanket certificate to continue service. On May 28,
1985, TW filed a supplement submitting signed agreements. On July 29, 1985 TW
filed an amendment to the application requesting permission to construct and
operate a meter station and tap for sales of 3,000 dth/d to Wiley Reynolds &
Sons (to serve a subdivision near Pampa, TX) under Rate Schedule SG-1 and to
either construct new facilities or acquire facilities to make direct sales to
continue service under Rate Schedule RW-1 to Great Plains customers. TW notified
the Commission by letter on April 24, 1987 that no facilities were ever acquired
or constructed, sales to Great Plains were not abandoned and sales to Reynolds
commenced on February 1, 1996.

 

  Filed:    04/16/85      Order issued:    05/28/85 33 FERC ¶61,283     
Amendment filed:    07/29/85      Order issued:    11/27/85      Letter filed:
   04/24/87   

 

Appendix 3.9(b)

Page 20

--------------------------------------------------------------------------------

1986

 

CP86-211   

TW/SOUTHWEST GAS - Section 7(c) application filed for certification of metering
equipment and a tap (installed under NGPA §. 311 (a)) located in Mohave County,
Arizona and to commence sales to South Gas (up to 3,000 MMBtu/d) under Rate
Schedule SG-2.

 

  Filed:    11/21/85      Order issued:    06/04/86   

 

CP86-212    TW/Mojave, Kern River, El Dorado, Northwest, El Paso & Standard
Pacific Gas - Section 7 application to construct and operate gas pipeline
facilities. TW proposes to construct and operate facilities and to provide firm
transportation service per this docket. TW proposes to loop all of the unlooped
portions of its system between West Texas and California, 358 miles of 30”
pipeline to interconnect with Mojave. The new facilities will increase capacity
by 320 MMcf per day for which TW seek authority to offer a new firm
transportation service under a new CDT-1 Rate Schedule, under which it would
recover the incremental costs of the new facilities in addition to fuel use
charges.

 

  Filed:    12/ /85      Order Consolidating Proceedings    05/19/86      Order
Granting Motion for Summary Disposition And Dismissing Application with
Prejudice*    10/27/86   

 

CP86-276    * El Dorado’s application for a certificate of public convenience
and necessity was dismissed with prejudice for failure to prosecute the
application diligently.

 

   ABANDONMENT OF SALES SERVICE - Section 7(b) application requesting permission
and approval to abandon sales services under Rate Schedule CDQ-2 and for partial
abandonment of Rate Schedule CDQ-3 (to reduce CDQ to 127,214 dth/d), both to
Northwest Central.

 

  Filed:    01/16/86      Settlement Filed:    01-16.86      Order issued:   
01/28/87 38 FERC 1161,056   

 

Appendix 3.9(b)

Page 21

--------------------------------------------------------------------------------

1987

 

CP87-112    TW/H.L. BROWN RESTRUCTURING - Section 7(b) and 7(c) application
filed jointly by Transwestem and H.L. Brown requesting permission to abandon gas
supply facilities by sale to Brown and to restructure certain gas purchase
agreements covering properties in Bluitt Field, Roosevelt County, New Mexico.
Transwestern requested permission to abandon 12 meter stations and related
laterals. Brown requested authorization for the abandonment of sales to the
extent Brown’s processing of gas results in decreased sales to Transwestern, and
a finding that the acquired facilities will be non-jurisdictional under the new
arrangement. In addition, Brown requested pre-granted abandonment authorization
so that gas released pursuant to the market-out provision of the contract may be
sold to another purchaser. Order Approving Abandonment, Denying Application in
Part, and Disclaiming Jurisdiction Issued. Request for rehearing filed.

 

  Filed:    12/18/86      Approval date:    10121/87 41 FERC ¶61,055      Order
dismissing request for rehearing:    04/07/88 43 FERC ¶61,028   

 

CP87-134   

ABANDONMENT, RECERTIFICATION, AND INITIAL AUTHORIZATION - Section 7(b)
application requesting permission and approval to abandon certain compressors,
dehydrators, and miscellaneous facilities and for blanket authority to abandon
other miscellaneous auxiliary equipment and for a certificate of public
convenience and necessity to construct and operate certain existing facilities
and to recertify existing compression facilities.

 

  Filed:    12/18/86      Approval date:    01/21/88 42 FERC 1161,040   

 

CP87-135   

PUCKETT PLANT ABANDONMENT - Section 7(b) application requesting permission and
approval to abandon a gas treatment plant in Pecos County, Texas. Request for
clarification filed; order amended.

 

  Filed:    12/18/86      Approval date:    12/15/8741 FERC ¶61,319   
CP87-135-001   Amendment approved:    02/16/88 42 FERC ¶61,203   

 

Appendix 3.9(b)

Page 22

--------------------------------------------------------------------------------

1988

 

CP88-99    INTERRUPTIBLE SALES PROGRAM - Abbreviated application for certificate
authority to implement an off-system and on-system interruptible sales service
(under Rate Schedule IS-1) and for pregranted authority to abandon this service.
Filed an amendment to unbundle sales and transportation services rendered under
Rate Schedule IS-1 in order to be able to make sales at the wellhead and to
transport the gas under Rate Schedule FTS-1 or ITS-1. Order issuing Certificate
subject to certain conditions.

 

  Filed:    12/01/87      Approval date:    05/11/88 43 FERC 161,240   

 

CP88-1333    BLANKET TRANSPORTATION CERTIFICATE - Transwestem’s Application for
a Blanket Certificate of Public Convenience and Necessity Authorizing the
Transportation of Natural Gas Under an “Open Access” Program pursuant to the
terms and conditions of the Commission’s Order No. 436 and Part 284 of the
Commissions’ Regulations.

 

  Filed:    December 17, 1987      Order Issued:    March 1, 1988   

 

Appendix 3.9(b)

Page 23

--------------------------------------------------------------------------------

1989

 

CP89-539   

RATE SCHEDULE CDQ-3 ABANDONMENT - Section 7(b) application for permission and
approval to abandon its firm sales of up to 127,214 Dth equivalent of natural
gas per day to Williams Natural Gas Company under Transwestem’s Rate Schedule
CDQ-3, effective February 1, 1989. Transwestem also requests approval to
eliminate its Rate Schedule CDQ-3 from its FERC Gas Tariff, effective
February 1, 1989. Transwestem also requests the Commission to condition the
proposed abandonments by permitting Transwestern to reserve its right to recover
from Williams, under the alternative pass-through procedures of Order No. 500,
Williams’ equitable share of Transwestem’s take-or-pay buyout, buydown, and
contract reformations costs pursuant to any filing made by Transwestem
subsequent to the effective date of the proposed abandonments. Kansas Power and
Light Company filed a request for clarification or, in the alternative,
rehearing of the October 6, 1989 order.

 

  Filed:    01/05/89      Approval date:    10/06/89 49 FERC ¶ 61,021   
CP89-539-001   Amendment approved:    04/30/91 55 FERC ¶ 61,156   

 

CP89-696   

CHEVRON USA, INC. - Prior notice filing for authorization to transport natural
gas for Chevron USA, Inc. In the same filing, Transwestem requests a waiver of
section 284.223(a) of the Commission’s regulations for the transaction.

 

  Filed:    01/25/89      Approval date:    02/27/89 FERC ¶ 61,261   

 

CP89-886    SoCAL STANDBY SALES SERVICE ABANDONMENT - Section 7(b) application
for permission and approval to abandon, effective February 1, 1989, standby
sales service provided to Southern California Gas Company (SoCal) under Rate
Schedules CDQ-1 and FTS. Request for clarification and/or rehearing filed;
rehearing request denied. Clarified the March 20 order; order did not relieve
SoCal of responsibility for its allocable share of take-or-pay buy-out,
buy-down, and contract reformation costs incurred by Transwestem in standing
ready to perform standby sales service to SoCal.

 

  Filed:    02/23/89      Approval date:    03/20/90 50 FERC ¶61,379   
CP89-886-001   Amendment filed:    04/03/90      Amendment approved:    04/04/91
55 FERC ¶61,026   

 

CP89-2104    TWIPANHANDLE EXCHANGE ABANDONMENT - Joint Section 7(b) application
for permission and approval to abandon an exchange of natural gas between
Transwestern and Panhandle Eastern Pipe Line Company in Roberts, Hemphill, and
Sherman Counties in Texas.

 

  Filed:    09/15/89      Approval date:    03/21/90 FERC ¶62,198   

 

Appendix 3.9(b)

Page 24

--------------------------------------------------------------------------------

1990

 

CP90-14   

IS SALES AND TRANSPORTATION SERVICE UNBUNDLING - Section 7(c) application to
amend a certificate issued in Docket No. CP88-99-000 authorizing Transwestern to
make on-system and off-system interruptible sales of surplus gas. Docket No.
CP88-999-000 authorized Transwestem to institute an interruptible sales service
(13S) pursuant to new Rate Schedule IS-1 (IS). Amendment filed requesting
clarification of the Commission’s March 16, 1990 order; Texaco sought
clarification and rehearing; rehearing granted in part, and dismissed as moot,
in part.

 

  Filed:    10/04/89      Approval date:    03/16/90 50 FERC ¶61,362   
CP90-14-002   Amendment filed:    04/16/90      Amendment approved:    02/05/92
58 FERC ¶61,101   

 

CP90-179    WEST TEXAS LATERAL LOOP LINE - Section 7(c) application for a
certificate of public convenience and necessity authorizing the construction and
operation of a loop line and authorizing the operation of two existing emergency
interconnections with El Paso Natural Gas Company (El Paso) for general service
located in Ward County, Texas. Transwestem also requested authorization to
operate two existing interconnections with El Paso in Cibola County, New Mexico
and Ward County, Texas for general service.

 

  Filed:    10/31/89      Approval date:    05/23/91 55 FERC ¶62,175   

 

CP90-305   

COASTAL GAS MARKETING COMPANY - Sec. 157.205 and 284.223 request for
authorization to transport natural gas on behalf of Coastal. Up to 400,000 MMbtu
per day would be transported from Arizona, New Mexico. Oklahoma and Texas for
redelivery to Arizona, New Mexico, Oklahoma and Texas.

 

  Filed:    12/14/89      Approval date:          ?                    54 FR
52982   

 

CP90-307   

MOBIL NATURAL GAS - Sec. 157.205 and 284.223 request for authorization to
transport natural gas on an interruptible basis on behalf of Mobil. Up to 20,000
MMbtu per day would be transported.

 

  Filed:    12/12/89      Approval date:          ?                    54 FR
52982   

 

CP90-324    ENRON GAS MARKETING, INC. - Sec. 157.205 request for authorization
to transport natural gas on an interruptible basis on behalf of Enron. Up to
100,000 MMbtu per day would be transported from all receipt points listed in
TW’s transportation point catalog and delivered to Arizona, New Mexico, Oklahoma
and Texas.

 

  Filed:    12/14/89      Approval date:          ?                    54 FR
52982   

 

Appendix 3.9(b)

Page 25

--------------------------------------------------------------------------------

1990

 

CP90-325   

CIBOLA CORPORATION - Sec. 157.205 and 283.223 request for authorization to
transport natural gas on an interruptible basis on behalf of Cibola. Up to
50,000 MMbtu per day would be transported from Arizona, New Mexico. Oklahoma and
Texas and deliver equivalent volumes in Arizona, New Mexico, Oklahoma and Texas.

 

  Filed:    12/12/89      Approval date:          ?                    54 FR
52982   

 

 

CP90-388    TEXACO GAS MARKETING, INC. - Sec. 157.205 and 284.223 request for
authorization to transport natural gas on an interruptible basis on behalf of
Texaco. Up to 750,000 MMbtu per day would be transported from various receipt
points on TW’s system and delivered to a delivery point in Mohave County, Texas.

 

  Filed:    12/19/90      Approval date:          ?                    54 FR
53175   

 

CP90-413   

WILLIAMS GAS MARKETING COMPANY - Sec. 157.205 and 284.223 request for
authorization to transport natural gas on an interruptible basis on behalf of
Williams. Up to 50,000 MMbtu per day would be transported.

 

  Filed:    12/26/89      Approval date:          ?                    55 FR 469
  

 

CP90-521   

U.S. ALLEN NO. 1 COMPRESSOR UNIT 809 ABANDONMENT - Section 7(b) application
requesting permission and approval to abandon a skid-mounted field compressor
station in Beaver County, Oklahoma.

 

  Filed:    01/16/90      Approval date:    04/17/90 55 FERC ¶ 61,073   

 

CP90-692    BRIDGEGAS U.S.A., INC. - Sec. 157.205 request for authorization to
transport natural gas on behalf of BridgeGas under Rate Schedule ITS-1. Up to
100,000 MMbtu per day would be transported from all receipt points listed in
TW’s transportation point catalog and delivered to Arizona, New Mexico, Oklahoma
and Texas.

 

  Filed:    02/07/90      Approval date:          ?                    55 FR
5880   

 

CP90-693   

NGC TRANSPORTATION, INC. - Sec. 157.205 request for authorization to transport
natural gas on behalf of NGC. Up to 40,000 MMbtu per day would be transported
from all receipt points listed in TW’s transportation point catalog and
delivered to Arizona, New Mexico, Oklahoma and Texas.

 

  Filed:    02/09/90      Approval date:          ?                    55 FR
6425   

 

Appendix 3.9(b)

Page 26

--------------------------------------------------------------------------------

1990

 

CP90-698    WILLIAMS GAS MARKETING COMPANY - Sec. 157205 request for
authorization to transport natural gas on behalf of Williams under Rate Schedule
ITS-1. Up to 8,000 MMbtu per day would be transported from all receipt points
listed in Dewey and Ellis Counties, Oklahoma and Hemphill County, Texas and
delivered to Dewey County, Oklahoma and Hemphill County, Texas.

 

Filed:    02/08/90    Approval date:    ?    55 FR 5880

 

CP90-741    ADOBE GAS MARKETING COMPANY - Sec. 157.205 and 284.223 request for
authorization to transport natural gas on behalf of Adobe under Rate Schedule
ITS-1. Up to 40,000 MMbtu per day would be transported.

 

Filed:    02/13/90    Approval date:    ?    55 FR 6425

 

CP90-856    PHILLIPS PETROLEUM COMPANY - Sec. 157.205 request for authorization
to transport natural gas on behalf of Phillips under Rate Schedule ITS-1.

 

Filed:    03/02/90    Approval date:    ?    55 FR 9170

 

CP90-926    GASMARK, INC. - Sec. 157.205 and 284.223 request for authorization
to transport natural gas on behalf of GasMark, Inc. under Rate Schedule ITS-1.
Up to 50,000 MMbtu per day would be transported from all receipt points listed
in TW’s transportation point catalog and delivered to Arizona, New Mexico,
Oklahoma and Texas.

 

Filed:    03/06/90    Approval date:    ?    55 FR 10093

 

CP90-927   

ENOGEX SERVICES CORP. - Sec. 157.205 request for authorization to transport
natural gas on behalf of Enogex. Up to 10,000 MMbtu per day would be transported
from all receipt points listed in TW’s transportation point catalog and
delivered to Arizona, New Mexico, Oklahoma and Texas.

 

Filed:    03/06/90    Approval date:    ?    55 FR 10098

 

CP90-1736   

VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to provide
transportation service on behalf of various shippers.

 

Filed:    07/19/90    Approval date:    ?    55 FR 30505 (1990)

 

Appendix 3.9(b)

Page 27

--------------------------------------------------------------------------------

1990

 

CP90-1912    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   08/07/90   

Approval date:

   ?    55 FR 33351 (1990)

 

CP90-1913    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   08/07/90   

Approval date:

   ?    55 FR 33351 (1990)

 

CP90-1914    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   08/07/90   

Approval date:

   ?    55 FR 33351 (1990)

 

CP90-1923    NGC TRANSPORTATION - Sec. 157.205 request for authorization to
construct and operate a new delivery point and to provide interruptible
transportation service to NGC Transportation, Inc. under Rate Schedule ITS-1. Up
to 25,000 Mcf per day would be transported from all receipt points listed in
TW’s transportation point catalog. NGC will deliver gas to Mewbourne Oil to be
used in enhanced oil recovery.

 

Filed:

   08/10/90   

Approval date:

   ?    55 FR 34061 (1990)

 

CP90-2294    SAN JUAN BASIN EXPANSION - Section 7(c) application for a
certificate of public convenience and necessity authorizing the construction and
operation of certain pipeline, compression, and related facilities in New Mexico
and Arizona which will expand the capacity of the mainline system and connect to
that system gas supplies produced in the San Juan Basin. In addition,
Transwestern also requests approval of proposed initial rates for firm and
interruptible transportation services which it will provide through that portion
of the proposed facilities connecting its mainline system to the San Juan Basin.

 

   Filed:    09/25/90      Approval date:    01/17/91   54 FERC ¶61,031

CP90-2294-001

   Amendment filed:    02/19/91      Amendment approved:    08/01/91   56 FERC
¶61,196

CP90-2294-002

   Amendment approved:    03/04/93   62 FERC ¶ 61,209

CP90-2294-003

   Amendment filed:    05/22/92      Amendment approved:    09/18/92   60FERC ¶
62,220

CP90-2294-004

   Amendment filed:    04/05/93      Amendment approved:    04/08/94   67 FERC ¶
61,037    Request to Proceed with Construction    09/09/91      Placed in
Service - Mainline/Lateral on 3/1/92 3/09/92 Commenced    Construction of
Flagstaff Lateral 10/09/92

 

Appendix 3.9(b)

Page 28

--------------------------------------------------------------------------------

1991

 

CP91-29    HADSON GAS SYSTEMS - Sec. 157.205 request for authorization to
provide interruptible transportation service to Hadson Gas under Rate Schedule
ITS-1. Up to 100,000 MMBtu per day would be transported from Arizona, New
Mexico. Oklahoma and Texas for redelivery in New Mexico, Oklahoma and Texas.

 

Filed:

   10/05/90   

Approval date:

   ?    55 FR 41751 (1990)

 

CP91-30    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization
to provide transportation service on behalf of various shippers.

 

Filed:

   10/05/90   

Approval date:

   ?    55 FR 41751 (1990)

 

CP91-31    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization
to provide transportation service on behalf of various shippers.

 

Filed:

   10/05/90   

Approval date:

   ?    55 FR 41751 (1990)

 

CP91-31    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization
to provide transportation service on behalf of various shippers.

 

Filed:

   10/05/90   

Approval date:

   ?    55 FR 41751 (1990)

 

CP91-316    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   11/08/90   

Approval date:

   ?    55 FR 48891 (1990)

 

CP91-494    NGC TRANSPORTATION - Sec. 157.205 request for authorization to
provide interruptible transportation service to NGC Transportation under Rate
Schedule ITS-1. Up to 100,000 Dth per day would be transported from all TW’s
receipt points for redelivery in Texas and New Mexico.

 

Filed:

   11/27/90   

Approval date:

   ?    55 FR 50216 (1990)

 

CP91-507    UNIT 773 ABANDONMENT - Section 7(b) application to abandon by
removal a compressor unit in Woodward County, Oklahoma on the off-system South
Vici gas supply system.

 

Filed:

   11/27/90   

Approval date:

   03/13/91    54 FERC 62,174

 

Appendix 3.9(b)

Page 29

--------------------------------------------------------------------------------

1991

 

CP91-651    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   12/18/90   

Approval date:

   ?    55 FR 53336 (1990)

 

CP91-870    NGC TRANSPORTATION - Sec. 157.205 request for authorization to
provide interruptible transportation service to NGC Transportation under Rate
Schedule ITS-1. Up to 400,000 MMBtu per day would be transported from Arizona,
New Mexico. Oklahoma and Texas for redelivery in New Mexico.

 

Filed:

   01/09/91   

Approval date:

   ?    56 FR 2512 (1991)

 

CP91-1040    SOUTH VICI GATHERING SYSTEM ABANDONMENT - Section 7(b) application
to abandon the South Vici Gathering System and for approval of the proposed
accounting treatment of the sale. Transwestern intended to sell the facilities
to Panda Resources, Inc.

 

Filed:

   01/29/91   

Approval date:

   02/20/92    58 FERC ¶ 61,188

 

CP91-1057    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   02/05/91   

Approval date:

   ?    56 FR 6002 (1991)

 

CP91-1058    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:

   02/05/91   

Approval date:

   ?    56 FR 6002 (1991)

 

CP91-1080    OXY U.S.A. - Sec. 157.205 and 284.223 request for authorization to
provide interruptible transportation service on behalf of Oxy under Rate
Schedule ITS-1. Up to 5,000 MMBtu on a peak day would be transported from
Arizona, New Mexico. Oklahoma and Texas for delivery in New Mexico.

 

Filed:

   012/31/91   

Approval date:

   ?    56 FR 6007 (1991)

1991

 

CP91-1629   

VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to provide
transportation service on behalf of a shipper.

 

Filed:

   03/28/91   

Approval date:

   ?    56 FR 14360 (1991)

 

Appendix 3.9(b)

Page 30

--------------------------------------------------------------------------------

CP91-1683    PUCKETT FIELD COMPRESSOR AND DEHY ABANDONMENT - Section 7(b)
application to abandon four compressor units and two dehydration units in the
Puckett field in Pecos County, Texas.

 

Filed:    04/01/91    Approval date:    08/16/91    56 FERC 1 162,123

 

CP91-1916    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    04/29/91    Approval date:    ?    55 FR 21478 (1991)

 

CP91-1984    YATES PETROLEUM - Sec. 157.205, 157.211 and 284.223 Prior Notice
request for authorization to install and operate a delivery point to transport
natural gas to Yates Petroleum service to NGC Transportation under Rate Schedule
ITS-1. Up to 400,000 MMBtu per day would be transported from Arizona, New
Mexico. Oklahoma and Texas for redelivery in New Mexico.

 

Filed:    05/13/91    Approval date:    ?    56 FR 23562 (1991)

 

CP91-2022    MEWBOURNE OIL - Sec. 157.205 Prior Notice request for authorization
to provide interruptible transportation service to Mewbourne Oil Company under
Rate Schedule ITS-1. Up to 50,000 MMBtu per day would be transported from
Arizona, New Mexico. Oklahoma and Texas for redelivery in Arizona, New Mexico,
Oklahoma and Texas.

 

Filed:    05/13/91    Approval date:    ?    56 FR 23576 (1991)

 

CP91-2087    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    05/24/91    Approval date:    ?    56 FR 25674 (1991)

 

Appendix 3.9(b)

Page 31

--------------------------------------------------------------------------------

1991

 

CP91-2121    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    05/28/91    Approval date:    ?    56 FR 26400 (1991)

 

CP91-2122    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    05/28/91    Approval date:    ?    56 FR 26400 (1991)

 

CP91-2123    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    05/28/91    Approval date:    ?    56 FR 26400 (1991)

 

CP91-2298    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    06/20/91    Approval date:    ?    56 FR 29643 (1991)

 

CP91-2374    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    07/11/91    Approval date:    ?    56 FR 33427 (1991)

 

CP91-2760    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    08/12/91    Approval date:    ?    56 FR 41668 (1991)

 

Appendix 3.9(b)

Page 32

--------------------------------------------------------------------------------

1991

 

CP91-2761    VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for
authorization to provide transportation service on behalf of various shippers.

 

Filed:    08/12/91    Approval date:    ?    56 FR 41668 (1991)

 

CP91-2773

   VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to
provide transportation service on behalf of various shippers.

 

Filed:    08/12/91    Approval date:    ?    56 FR 41668 (1991)

 

CP91-2905

   VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to
provide transportation service on behalf of various shippers.

 

Filed:    08/30/91    Approval date:    ?    56 FR 45948 (1991)

 

CP91-3016

   VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to
provide transportation service on behalf of various shippers.

 

Filed:    09/19/91    Approval date:    ?    56 FR 48782 (1991)

 

CP91-3030

   VARIOUS SHIPPERS - Sec. 157.205 and 284.223 request for authorization to
provide transportation service on behalf of various shippers.

 

Filed:    09/16/91    Approval date:    ?    56 FR 48199 (1991)

 

Appendix 3.9(b)

Page 33

--------------------------------------------------------------------------------

1992

 

CP92-74

   2.55 (b) NOTICE WAIVER AT NEEDLES Filed petition for waiver of the
requirement in Section 2.55(b) of the regulations requiring notification to the
Commission at least 30 days prior to commencing construction activities to
replace existing facilities. This request was necessary in order to upgrade
existing pipeline due to the encroachment of a residential subdivision near the
Needles measurement station in Mohave Valley, Arizona.

 

  Filed:    10/09/91      Approval date:    10/28/91 57 FERC ¶61,114 (1991)

 

CP92-202    BLANCO HUB ABANDONMENT Section 7(b) application to abandon by sale
to Gas Company of New Mexico (GCNM), jointly with Northwest Pipeline
Corporation, equal portions of their undivided interests in the Blanco Hub,
located in San Juan county, New Mexico. Northwest requested authority to abandon
by sale to Transwestem and GCNM a portion of its interest in a meter station
that Northwest constructed for deliveries to GCNM. GCNM was also authorized to
acquire an approximate one-third interest in Northwest’s and Transwesternts
Blanco Hub gas supply facilities.

 

  Filed:    11/20/91      Approval date:    06/29/92 59 FERC ¶61,391 (1992)

 

CP92-207    MOCANE SYSTEM ABANDONMENT Section 7(b) application to abandon by
sale to Continental Natural Gas Company the Mocane Gathering System located in
Beaver County, Oklahoma; to abandon a point of interconnection location in
Beaver County, Oklahoma, used for exchange of natural gas with El Paso Natural
Gas Company; to abandon certificated interstate sales of natural gas to
Transwestem upon sale of the facilities to Continental; and authorization to
account for the sale of the Mocane System as a normal retirement rather than as
a sale of the operation unit or system.

 

  Filed:    11/22/91      Approval date:    08/05/92 60 FERC ¶61,139 (1992)

 

CP92-243    TOPOCK INTERCONNECT Section 7(c) application requesting a
certificate of public convenience and necessity authorizing the operation of
certain pipeline and measurement facilities constructed as Section 311
facilities located in Mojave County, Arizona and San Bernardino County,
California (Topock Interconnect). Facilities were constructed that directly
interconnect with the pipeline systems of PG&E, Southern California Gas Company
(SoCalGas), and Mojave Pipeline Company (Mojave).

 

  Filed:    12/16/91      Approval date:    06/11/92 59 FERC ¶61,305 (1992)

 

Appendix 3.9(b)

Page 34

--------------------------------------------------------------------------------

1992

 

CP92-477    CREE SYSTEM AND RATE SCHEDULE X-10 ABANDONMENT Transwestern and GPM
Gas Corporation (GPM) filed on May 1, 1992 a stipulation and agreement of
settlement that resolved all issues related to a certificated exchange agreement
between Transwestern and GPM. The settlement agreement related to: 1) the
application by Phillips 66 (now GPM) to abandon the certificated exchange
service with Transwestem and 2) the application by Transwestern to abandon its
exchange with GPM; abandon its Cree Flowers Gathering System (Cree System) by
sale to Wallace Oil & Gas, Inc. (Wallace); and to abandon and remove one
skid-mounted compressor unit located on the Cree System. Finally, Transwestern
sought approval of its proposed accounting treatment of the sale of the Cree
System.

 

  Filed:    05/01/92      Approval date:    10/20/92 61 FERC 561,078 (1992)

 

CP92-686    RATE SCHEDULE X-10 ABANDONMENT Section 7(b) application to abandon
the exchange of natural gas between Transwestem and Williams Natural Gas Company
at exchange points in Woodward County, Oklahoma, and Hemphill County, Texas,
pursuant to the terms of Rate Schedule X-10.

 

  Filed:    09/01/92     

Approval date:

   10/22/92 61 FERC 562,063 (1992)

 

Appendix 3.9(b)

Page 35

--------------------------------------------------------------------------------

1993

 

CP93-75    SUNRISE COMPLAINT Complaint filed by Sunrise Energy Company against
Transwestern and a request for an investigation pursuant to rule 206 of the
Commission’s regulations, 18 CFR ¶385.206. Sunrise alleged that Transwestem 1)
did not provide timely access to information relating to the discount on
interruptible rates offered to Transwestem’s affiliate, Enron Marketing; 2) did
not offer a similar discount to nonaffiliated firm shippers, thereby engaging in
undue discrimination; 3) communicated to Enron Marketing information regarding
Sunrise’s financial difficulties; 4) misrepresented the availability of
interruptible capacity on the expansion facilities; 5) engaged in a systematic
effort to remove Sunrise as a competitor of Enron Marketing in the California
market by refusing to amend or modify Sunrise’s firm contracts, and; 6)
facilitated and actively participated in Enron Marketing’s anti-competitive and
predatory behavior toward Sunrise. The complaint was dismissed and the request
to investigate was denied. On March 3, 1993, Sunrise Energy Company, Signal
Fuels Trading Company, Natural Gas Clearinghouse, and Indicated Shippers filed
for rehearing of the “Order of Complaint,” and Meridian Oil Incorporated
requested clarification and/or reconsideration of the order. The requests for
rehearing, clarification and reconsideration were all denied. On March 7, 1994,
Sunrise Energy filed a motion for clarification submitting that the legal effect
was to render moot the allegations and Transwestern’s response to those
allegations on rehearing. Sunrise’s request for clarification was granted and
provided.

 

  Filed:    11/23/92      Approval date:    02/01/93 62 FERC ¶61,087 (1993)
CP93-75-001   Filed:    03/03/93      Rehearing denied:    02/03/94 66 FERC
¶61,170 (1994) CP93-75-002   Filed:    03/07/94      Clarification granted:   
04/20/94 67 FERC ¶61,093 (1994)

 

CP93-367    RATE SCHEDULE X-16 ABANDONMENT Application to abandon a natural gas
exchange service provided pursuant to Williams Natural Gas (WNG) Rate Schedule
X-17 and Transwestem Rate Schedule X-16. WNG and TW were authorized to exchange
gas under an exchange agreement dated August 9, 1979 in Docket No. CP80-25 at a
delivery and balancing point between WNG and Transwestern in Hemphill County,
Texas, and from additional wells in Roger Mill, Ellis, Woodward and Dewey
Counties, Oklahoma and in Hemphill and Lipscomb Counties, Texas.

 

  Filed:    06/01/93      Approval date:    08/19/93 64 FERC ¶62,120 (1993)

 

CP93-529    ABANDONMENT BY TRANSFER TO TRANSWESTERN L.P. Section 7(b)
application to abandon services and facilities by transfer to Transwestem LP.,
and to acquire and operate Transwestern’s facilities, and to transport gas in
interstate commerce pursuant to section 7(c). On August 30,1 994, Transwestem
filed a notice of withdrawal of the application; withdrawal was effective
September 14, 1995.

 

  Filed:    06/30/93      Withdrawal approved:    09/22/94 68 FERC ¶61,415
(1994)

 

Appendix 3.9(b)

Page 36

--------------------------------------------------------------------------------

1994

 

CP94-55   

RATE SCHEDULE X-9 ABANDONMENT Section 7(b) application to abandon a portion of
two exchange services with Caprock Natural Gas Company. Caprock filed a 7(b)
application in Docket No. CP93-306 to abandon certain pipeline and compressor
facilities and related exchange and transportation services. Northern Natural
Gas Company (Northern Natural) filed in Docket No. CP94-302 a related
application to abandon a related firm transportation service for Caprock.
Caprock stated that gas had been delivered by Caprock to Transwestem in Roberts
County, Texas and that Transwestem redelivered the gas to Caprock in Parmer
County, Texas. The gas was then delivered to Westar Transmission Company
(Westar) in Gaines County, Texas. Because gas delivery declined, the parties no
longer desired the exchange services and the facilities were no longer required.
On September 23, 1994, Caprock and Cholla Petroleum Inc. (Cholla) filed a motion
for clarification to determine that the facilities are non-jurisdictional
gathering facilities exempt from the Commission’s NGA jurisdiction and that the
rates for gathering services will not be subject to the Commission’s
jurisdiction under section 4 and 5 of the NGA.

 

  Filed:    11/02/93      Approval date:    08/10/94 68 FERC ¶61,224 (1994)
CP94-55-001   Amendment filed:    09/23/94      Approval date:    11/18/94 69
FERC ¶61,230 (1994)

 

CP94-90    RATE SCHEDULE NO. X-6 ABANDONMENT Section 7(b) application to abandon
a natural gas transportation and exchange service between Transwestern and
American Processing (American). Pursuant to an agreement between Transwestem and
American, the agreement provided that American would deliver gas to Transwestem
in Roberts County, Texas, and Transwestern would redeliver equivalent volumes to
American in Gray or Carson Counties, Texas. In accordance with the terms of the
agreement, Transwestem notified American on June 1, 1993, that it wished to
terminate the agreement effective January 1, 1994. Transwestem stated that all
exchange activity under the agreement ceased, no imbalance existed and no
facilities would be abandoned.

 

  Filed:    11/18/93      Approval date:    03/01/94 66 FERC ¶62,107 (1994)

 

Appendix 3.9(b)

Page 37

--------------------------------------------------------------------------------

1994

 

CP94-211

   VACA LATERAL ABANDONMENT Section 7(b) application to abandon by sale to Enron
Oil & Gas Company (Enron) certain facilities located in Lea County, New Mexico.
Transwestem proposed to abandon by sale to its affiliate Enron the “Vaca
lateral” which included approximately 0.71 mile of 4-inch pipeline, one meter
station and related facilities attached to Transwestem’s 24-inch West Texas
lateral in Lea County, New Mexico. Transwestern filed an amendment seeking to
transfer the Vaca lateral facilities to TGC, which in turn conveyed the Vaca
lateral facilities to Enron Oil and Gas Company

 

  Filed:    02/02/94      Approval date:    11/01/94 69 FERC ¶61 ;130 (1994)
CP94-211-001   Amendment filed:    11/16/94      Approval date:    07/27/95 72
FERC ¶61,085 (1995)

 

CP94-213    SOUTH HIGGINS AND TRENFIELD FACILITIES ABANDONMENT Section 7(b)
application to abandon by sale to Mewbourne Oil Company (Mewboume) certain small
diameter pipelines, meter stations and related facilities located in Lipscomb
County, Texas and Ellis County, Oklahoma. Transwestern proposed to abandon by
sale approximately five miles of 4-inch and 6-inch pipeline, two meter stations
and related facilities (South Higgins facilities). These facilities were
attached to Transwestern’s 12-inch Leedy lateral in Ellis County, Oklahoma.
Transwestern also proposed to abandon approximately seven miles of 4-inch
pipelines, six meter stations, and related facilities (Trenfield facilities).
These facilities were located off the east end of Transwestern’s Mammoth Creek
lateral in Lipscomb County, Texas.

 

  Filed:    02/03/94    CP94-213-001   Filed amendment:    05/27/94     
Approval date:    08/17/94 68 FERC ¶61,236 (1994)

 

CP94-254    REFUNCTIONALIZATION Section 7(b) and 7(c) application for a
certificate of public convenience and necessity and abandonment authorization
relating to proposed refunctionalization of certain facilities from production
and gathering to transmission and from transmission to production and gathering,
respectively. Transwestern filed an amendment requesting to functionalize each
facility individually, and not generically, based on its primary function.

 

  Filed:    02/24/94    CP94-254-001   Filed amendment:    02/25/97     
Approval date:    07/27/95 72 FERC ¶61,085 (1995)

 

Appendix 3.9(b)

Page 38

--------------------------------------------------------------------------------

1994

 

CP94-307    AMOCO’S EMPIRE ABO PLANT - Prior notice filing for authorization to
install and operate a tap and metering facilities at a new point of delivery to
provide natural gas to Amoco Production Company’s Empire Abo Plant in Eddy
County, New Mexico.

 

  Filed    03/24/94      Approval date:      ??        05/19/94 59 FR 15718
(1994)

 

CP94-341    RATE SCHEDULE X-14 ABANDONMENT Section 7(b) application to abandon a
natural gas exchange service requested by Natural Gas Pipeline Company of
America (Natural) and Transwestern Pipeline Company as provided under Natural’s
Rate Schedule X-69 and Transwestern’s Rate Schedule X-14. Under the agreement,
Natural delivered natural gas to Transwestem in Eddy, Lea, and Chaves Counties,
New Mexico and Ward County, Texas. In exchange, Transwestern delivered
equivalent volumes of natural gas to Natural in Roosevelt and Eddy Counties, New
Mexico and in Beckham County, Oklahoma. By a letter agreement dated January 31,
1994, Natural and Transwestern agreed to terminate the exchange service
effective June 15, 1993.

 

  Filed:    04/07/94      Approval date:    05/12/94 67 FERC ¶62,124 (1994)

 

CP94-676    SID RICHARDSON DELIVERY POINT Prior notice filing for authorization
to install and operate a tap and valve at a new point of delivery to provide
interruptible transportation of up to 700 Mcf/d of natural gas to Sid Richardson
Gasoline Company (Richardson), a producer located in Winkler County, Texas.

 

  Filed    07/21/94      Approval date:    07/27195 72 FERC ¶61,085 (1995)

 

CP94-751-000    ABANDONMENT OF FACILITIES - Section 7(b) filing for permission
and approval to abandon and remove certain transmission and gathering
facilities. Filed two (2) Amendments to the application to correct and revised
facilities to be abandoned (CP94-751-001 & 002) in the instant application.
Order issued on July 27, 1995 in Docket No. RP95-271, et al., granted
abandonment by removal as conditioned by Appendix D to the Order. Additional,
Amendment to application filed on November 13, 1995 and is more fully described
below (CP94- 751-004). Initial implementation plan on removal filed January 26,
1996. Revised implementation plan filed March 1, 1996. Director’s Letter issued
March 5, 1996 approved the revised implementation plan.

 

  Filed:    08/30/94    CP94-751-001   Filed Amendment to Application:   
10/03/94    CP94-751-002   Filed Amendment to Application:    05/01/95     
Order Approving Abandonment:    07/27/95 71 FERC ¶61,085 (1995) CP94-751-003  
Request for Rehearing:    08/28/95      Order Denying Rehearing:    10/17/95   

 

Appendix 3.9(b)

Page 39

--------------------------------------------------------------------------------

1994

 

CP94-751-004    751 ABANDONMENT Section 7(b) application to modify the
abandonment authorization of certain facilities owned by Transwestem Pipeline
Company. The Commission’s July, 1995 order addressed separate applications by
Transwestern in Docket No. CP94-751-000 and CP95-70-000 to abandon certain
compressors, treater plants, meters, dehydration units and associated
facilities. The amendment requested modification of the July, 1995 abandonment
authorization to permit some of the facilities originally proposed to abandon in
place, to be abandoned by sale to Agave Energy Company, Conoco, Inc., Enron
Oil & Gas Company, Highlands Gathering and Processing Company, and Mobil
Producing Texas and New Mexico, Inc. This amendment authorized the transfer of
the facilities identified.

 

  Filed:    11/13/95      Approval date:    07/02/96 76 FERC ¶61,018 (1996)

 

CP94-751-005    751 AMENDMENT Amendment to application requests permission to
abandon certain of the facilities in the original application by sale to third
parties rather than removal. This amendment requested modification of the July,
1995 abandonment authorization to permit some of the facilities originally
proposed to abandon in place to be abandoned by sale to Agave Energy Company,
Conoco, Inc., Enron Oil & Gas Company, Highlands Gathering and Processing
Company, and Mobil Producing Texas and New Mexico, Inc.

 

  Filed Amendment to Application:    12/24/96      Order issued:    11/03/97 81
FERC ¶ 61,151 (1997)

 

Appendix 3.9(b)

Page 40

--------------------------------------------------------------------------------

1995

 

CP95-65    RATE SCHEDULE X-7 ABANDONMENT Section 7(b) application to abandon an
exchange service between Transwestem and Natural Gas Pipeline Company of
America. Pursuant to a gas exchange agreement between Transwestern and Natural
Gas Pipeline Company, Transwestern and Natural were authorized to exchange
natural gas during periods of emergency at existing facilities in Eddy County,
New Mexico and Hansford and Gray Counties, Texas. However, neither of their
records indicated whether or not this exchange was ever utilized. Pursuant to a
letter agreement between Transwestern and Natural Gas Pipeline Company dated
October 12, 1997, Transwestern and Natural agreed to terminate the Agreement as
of December 1, 1993.

 

Filed:    11/09/94    Approval date:    01/05/95 70 FERC ¶62,007 (1995)

 

CP95-70   

SPINDOWN ABANDONMENT/RATE SCHEDULES X-1                    AND X-15

ABANDONMENT Section 7(b) application to abandon certain facilities located in
Kansas, New Mexico, Oklahoma, and Texas by sale to its wholly owned subsidiary,
Transwestem Gathering Company (TGC). Transwestern also requested authorization
to abandon (1) certain interruptible service agreements under Rate Schedule
ITS-1, to the extent receipt points on contracts effectuating such service were
located on the facilities to be abandoned; (2) certain firm (i.e., no-notice)
transportation service under Rate Schedule FTS-2 provided to various
right-of-way grantors or agricultural users, and small general customers; and
(3) certain certificated exchange services which are performed under Rate
Schedules X-1 and X-15.

 

Filed:    11/14/94    Approval date:    07/27/95 72 FERC 761,085 (1995)

 

CP95-153    BRILLHART AND KIOWA CREEK SYSTEM ABANDONMENTS Section 7(b)
application to abandon by sale portions of the Brillhart and Kiowa Creek
gathering systems to GPM Gas Corporation. Abandonment consists of approximately
one mile of four-inch pipeline and two meter stations located in Lipscomb
County, Texas.

 

Filed:    01/12/95    Approval date:    07/27/95 72 FERC 761,085 (1995)

 

CP95-327    RIO GRANDE RIVER CROSSING Section 7(c) application to construct and
operate approximately 3,200 feet of 30-inch diameter pipeline under the Rio
Grande River in Valencia County, New Mexico. On August 20, 1994, the northern
most pipeline exploded resulting in the loss of that segment and damage to the
steel structure pipeline bridge. Transwestem replaced one of the pipelines and
the bridge under section 2.55(b) of the Commission’s Regulations. The total cost
of this project to replace the second pipeline was $1,675,000, and was
reimbursed by Transwestem’s insurance carrier.

 

Filed:    04/17/95    Approval date:    08/16/95 72 FERC 762,147 (1995)

 

Appendix 3.9(b)

Page 41

--------------------------------------------------------------------------------

1995

 

CP95-378    NGC/GRAY AND WHEELER COUNTY FACILITIES ABANDONMENT Section 7(b)
application for authorization to abandon: (1) by sale to NGC Intrastate Pipeline
Company (NGC) certain transmission facilities including two meter stations, five
compressors, 6.5 miles of 10-inch pipeline and 17.4 miles of eight- inch
pipeline located in Gray and Wheeler Counties, Texas; (2) by reconveyance to GPM
pursuant to an exchange agreement dated September 18, 1972, six mites of 16-inch
pipeline located in Gray County, Texas; and (3) a FTS-2 Transportation Service
Agreement between Transwestem and the City of LeFlors.

 

Filed:    05/01/95    Approval date:    07/27/95 72 FERC ¶61,085 (1995)

 

Appendix 3.9(b)

Page 42

--------------------------------------------------------------------------------

1996

 

CP94-751-004    CP94-751-004 - Amendment to application requests permission to
abandon certain of the facilities in the original application by sale to third
parties rather than removal. There are five (5) separate closings. Closed are
sale to Conoco, Agave Energy Company, and Enron Oil & Gas. Bills of Sale for
remaining facilities drafted by Legal. Pending sales are Mobil Producing Texas
and New Mexico, Inc. and Highlands Gathering & Processing Company.

 

REMAINING CONDITION: • Notice of abandonment. Filed Amendment to Application:   
11/13/95    Order Approving Abandonment:    07/02/96 76 FERC 1162,006 (1996)

 

CP96-10    SAN JUAN EXPANSION - PHASE I Section 7(c) application to construct
and operate a new 10,000 horsepower compressor station located near Mile Post 36
on Transwestem’s San Juan Lateral, to construct and operate 7,000 hp of
additional compression at the existing Bloomfield compressor station, to adjust
its mainline and San Juan Lateral capacity on a flexible basis by changing the
pressure of its mainline facilities, to operate an existing 4,132 hp back-up
compressor on a flexible basis at the Bloomfield compressor station, and to
purchase from Northwest Pipeline Corporation a 77.7% undivided ownership
interest in Northwest’s mainline LaPlata Facilities.

 

Filed:    10/04/95    Environmental Assessment 3/1/96    03/01/96    Approval
date:    04/29/96 75 FERC IT61,107 (1996) Acceptance Letter    05/29/96   
Implementation Plan    06/19/96    Bloomfield/Bisti In Service at 12/1/96   
12/05/96    Post Construction Bloomfield Noise Survey 01/29/97

 

CP96-33    HALL FARM TAP ABANDONMENT Section 7(b) application to abandon by sale
the S. Gene Hall farm tap located in Gray County, Texas, to NGC Intrastate
Pipeline Company. Transwestem facilities connected to the Hall farm tap were
abandoned by sale to NGC in Docket No. CP95-378. This was initially certificated
in Docket No. CP75-17 and CP75-277.

 

Filed:    10/24/95    Approval date:    11/17/95 73 FERC 1162,115 (1995)

 

Appendix 3.9(b)

Page 43

--------------------------------------------------------------------------------

1996

 

CP96-119    WEST TEXAS LATERAL AND CHENOT PUTNAM LATERAL ABANDONMENT
Section 7(b) application to abandon by sale to Chevron USA, Inc. Certain
pipeline facilities (West Texas Lateral and Chenot Putnam Lateral), including
two farm taps. On January 5, 1997, Chevron filed a request for an order
declaring that the facilities, once acquired and operated by Chevron, would
perform a gathering function, and as such, would be exempt from Commission
regulation under the section 1(b) of the National Gas Act. Closing effective
September 16. Notice of Abandonment filed on September 24.

 

Filed:    12/22/95    Approval date:    08/07/96 76 FERC ¶61,189 (1996)

 

CP96-214   

WEST TEXAS GAS FARM TAPS - Section 7(b) application to abandon 59 farm

taps located in parts of Texas and New Mexico, along with the related service
that Transwestern renders through such facilities, by sale to West Texas Gas,
Inc. On January 8 1997, Transwestern filed a supplement to its application,
removing five of the farm taps in questions from its original application and
the corresponding sale agreement with West Texas. On September 10, 1998 filed
the Notice of Abandonment for 54 farm taps effective September 1, 1998.

 

Filed:    02/27/96    Approval date:    02/26/97 78 FERC ¶61,183 (1997)

 

CP96-370    TEMPORARY COMPRESSION - Section 7(c) application for a blanket
certificate authorizing Transwestern to install, operate, and remove temporary
compressor units during scheduled or unscheduled maintenance. Certificate issued
with environmental conditions. The blanket certificate is limited for the
purpose of maintenance of existing permanent compressor units. The temporary
compressor units shall not be used to increase the volume of service above that
rendered by the involved existing permanent compressor units. Certificate
accepted September 20, 1996. Reporting of temporary compressors will be included
in the Annual Blanket Certificate Report.

 

Filed:    04/30/96    Order issued:    08/21/96 76 FERC ¶61,211 (1996)
Certificate Accepted:    09/20/96   

 

CP96-371    BILBREY COMPRESSION ABANDONMENT Section 7(b) application requesting
abandonment and removal of the Santa Fe Bilbrey Compressor Unit and its Texaco
Bilbrey Compressor Unit, both located on Transwestem’s Monument Lateral in Lea
County, New Mexico.

 

Filed:    04/30/96    Approval date:    07/02/96 76 FERC ¶62,006 (1996)

 

Appendix 3.9(b)

Page 44

--------------------------------------------------------------------------------

1997

 

CP94-751-005    CP94-751-005 - Amendment to application requests permission to
abandon certain of the facilities in the original application by sale to
Continental Natural Gas, Inc. and GPM Gas Corporation rather than remove the
equipment as originally proposed.

 

REMAINING CONDITION:       Notice of abandonment.       Filed Amendment to
Application:    12/24/96    Order issued:    11/03/97 81 FERC ¶61,151 (1997)

 

CP97-159    PANHANDLE P1 and P2 COMPRESSOR MODIFICATIONS - Section 7(c)
application for a certificate of public convenience and necessity to modify the
P1 and P2 compressor units in order increase operational flexibility and
increase capacity of approximately 14 MMcf per day on the Panhandle lateral.

 

Filed:    12/18/96    Notice of Application    01/13/97    Approval date:   
05/08/97 79 FERC ¶62,102 (1997) In-Service      

 

CP97-209    GPM/CACTUS DELIVERY POINT - Prior notice filing to install and
operate a new delivery point in Sherman County, Texas in order to provide
natural gas deliveries to GPM for fuel use.

 

Filed:    01/27/97    Approval date:    03/18/97   

 

CP97-286    BLOOMFIELD COMPRESSOR MODIFICATIONS - Section 7(c) application for a
certificate of public convenience and necessity to modify the Bloomfield
compressor units in order increase operational flexibility and increase capacity
of approximately 25 MMcf per day on the San Juan lateral. The modified
compressors were placed in-service on December 1, 1997. Actual project costs
filed May 20, 1998.

 

Filed:    03/12/97    Order issued:    11/05/97 81 FERC ¶61,172 In-Service   
12/01/97   

 

CP97-349    WTG/HANSFORD DELIVERY POINT - Prior notice filing to operate an
existing side valve located in Hansford County, Texas as a new delivery point in
order to provide natural gas deliveries to West Texas Gas to serve residential
and commercial customers. WIG will own and operate all facilities downstream of
the tap.

 

Filed:    04/17/97    Approval date:    06/10/97   

 

Appendix 3.9(b)

Page 45

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1997

 

CP97-391    ANNUAL 311 REPORT - Annual Report for the construction of facilities
pursuant to §311(a) of the Natural Gas Policy Act of 1978 for calendar year
1996.

 

Filed:

   04/28/97   

 

CP97-393    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission's Regulations for calendar
year 1996.

 

Filed:    04/28/97   

 

CP97-397    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction, operation, and abandonment of eligible facilities under automatic
authorizations for calendar year 1996.

 

Filed:    04/28/97   

 

CP97-516    SAN JUAN EXPANSION - PHASE II - Section 7(c) application for a
certificate of public convenience and necessity to expand capacity of the San
Juan facilities. Facilities include a new 15,000 horsepower compressor station
at Standing Rock and additional 2,000 horsepower at the existing LaPlata "A'
compressor station to increase capacity from Ignacio to Blanco by 115,000 Dth/d
and from Blanco to Thoreau by 130,000 Dth/d. Application amended to install a
7000 ISO rated horsepower unit at the LaPlata compressor station in lieu of the
2000 HP unit originally proposed. On December 18, 1997, notified FERC that
discussions continue with representatives of the Navajo Nation regarding R-O-W
for Standing Rock. Order Granting Clarification issued on February 18, 1998
pursuant to Transwestern's December 17, 1997 request for clarification regarding
locked in rates. The Commission clarified that locked in rates applies to
"Current Customers" only as set forth in Appendix C of the Global Settlement. On
April 8, 1998, Northern filed the notice of an April 1, 1998 in-service date for
the LaPlata "A" facilities. On December 25, 1998, Transwestern notified FERC
that it was unable to reach agreement with the Navajo Nation regarding ROW for
the Standing Rock compressor station. Transwestern filed on September 25, 1998 a
request to vacate the portion of the certificate authorizing the construction
and operation of the Standing Rock station. Notice Vacating in Part Prior Order
was issued March 16, 1999 for the Standing Rock portion of this certificate.

 

   Original Application Filed:    05/19/97 CP97-516-001    Amendment filed:   
08/22/97    Order issued:    11/17/97 81 FERC ¶61,217 (1997)   
Certificate accepted:    11/21/97   

Order Granting Clarification issued: 02/18/98 82 FERC ¶61,164 (1998)

   Notice Vacating in Part at Standing Rock    03/16/99   
In Service of La Plata Modifications    04/01/98

 

Appendix 3.9(b)

Page 46

--------------------------------------------------------------------------------

1988

 

CP98-8    CITIZENS UTILITIES DELIVERY POINT - Prior notice filing for
authorization to operate existing facilities located in Coconino County, Arizona
as a delivery point to accommodate natural gas deliveries to Citizens Utilities
Company.

 

Filed:    10/03/97    Approval date:    11/25/97   

 

CP98-13    PG&E ABANDONMENT - Section 7(b) application for permission and
approval to abandon, by sale to PG&E-TEX, the Gomez lateral located in Ward and
Pecos Counties, Texas and certain service render thereby. PG&E filed its
“Petition for a Declaratory Order” in Docket No. CP98-43. On January 8, 1998,
Transwestern supplemented Exhibit U to the original filing with the First
Amendment to the Purchase and Sale Agreement. Filed to further supplement
Exhibit U of the original application for additional amendments to the Asset
Purchase Agreement. Notice of Withdrawal of Application and Request to cancel
Settlement Conference was filed August 28, 1998.

 

Filed:    10/09/97    Application Withdrawn:    08/28/98    Withdrawal
effective:    09/14/98   

 

CP98-233    KN INTERSTATEILIPSCOMB MOCANE & LEEDY LATERAL SALE - Section 7(b)
application for permission and approval to abandon, by sale to K N Interstate
Transmission Company, Transwestern’s Lipscomb Mocane and Leedy laterals.
Mewbourne withdrew its protest October 1, 1998. Aurora did not withdraw its
protest. On December 22, 1998, the Commission issued an Order Denying Protest
and Approving Abandonment. A Second Amendment to the Asset Purchase Agreement
was executed January 31, 2000 extending the terms of the agreement until
March 31, 2000. An agreement to assign the original Asset Purchase Agreement, as
amended, to OneOk, Inc. was executed April 5, 2000. OneOk has until July 5, 2000
to notify Transwestern of its intent to purchase the subject facilities. By
letter dated June 26, 2000, ONEOK officially exercised its right to terminate
the Asset Purchase Agreement for this transaction.

 

Filed:    02/13/98    Order Issued:    12/22/98    85 FERC ¶61,416 (1998)
Order on Motion to Vacate:    06/04/01    95 FERC ¶ 61,443 (2001) Regulatory
Contact: Michele

 

CP98-413    ANNUAL 311 REPORT - Annual Report for the construction of facilities
pursuant to §311(a) of the Natural Gas Policy Act of 1978 for calendar year
1997.

 

Filed:    04/30/98   

 

Appendix 3.9(b)

Page 47

--------------------------------------------------------------------------------

1998

 

CP98-419    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for calendar
year 1997

 

Filed:    04/30/98

 

CP98-690    PITCO RESTRUCTURING - Joint Petition for Declaratory Order and
Waiver of Tariff Provisions filing pursuant to Section 385207(a)(2) of the
Commission’s Regulations. PG&E Gas Transmission, Northwest Corporation,
Transwestern Pipeline Company, Pacific Interstate Transmission Company and
Pan-Alberta Gas (U.S.) Inc. are the joint petitioners. Specifically, the joint
petitioners seek waiver of the respective capacity release provisions of PGT and
Transwestem’s tariff to the extent necessary to accommodate PITCO’s request in
Docket No. CP98-529 to reassign capacity related to pre-built ANGTS facilities
due to its change in status under the NGA. On September 23, 1998, the parties
filed a Stipulation, Agreement and Settlement in the docket. On December 17,
1998, the Commission issued an Order on Settlement and Authorizing Abandonment,
Acquisition of Facilities, Waiving Tariff Provisions, and Granting Motion for
Consolidation. The Order on Rehearing upholds the original order by denying
DEK’s request for rehearing and allows PGE/Northwest to waive its Tariff to the
extent necessary to permit credit support for PAGUS.

 

          Filed:    07/24/98            Order Issued:    12/17/98 85 FERC
¶61,378 (1998) CP98-690-001       Request for Rehearing Filed:    01/15/99      
   Order on Rehearing Issued:    11/29/99 89 FERC ¶61,246 (1999)

 

CP98-745    SPS/HOBBS DELIVERY POINT - Prior notice filing to operate an
existing delivery point acquired pursuant to §311(a) of the NGPA to provide
non-restricted service to Southwest Public Service Company at its Cunningham
Power Plant. Transwestem will also begin operating the pipeline connected to the
subject delivery point pursuant to the automatic authorization of its blanket
certificate and §157.208(a) of the Commission’s Regulations. Staff is holding
the Notice until Transwestern supplemented its request providing eligible on
behalf of entity, costs to acquire facilities, and certain environmental data.
Supplement filed September 4, 1998. Application withdrawn due to incorrect legal
description and Staffs request that Transwestem include pipeline in its request.
Request may be refiled at a later date.

 

Filed:    08/25/98 Withdrawal Filed:    09/14/98 Withdrawal Effective:   
09/29/98

 

Appendix 3.9(b)

Page 48

--------------------------------------------------------------------------------

1998

 

CP98-795    UPH/BURTON FLATS SALE AND CRAWFORD COMPRESSOR RELOCATION - Section 7
application for permission and approval to abandon by sale to Union Pacific
Highlands Gathering and Processing Company (UPH) approximately 58 miles of
pipeline and request to relocate the Crawford compressor station. On July 8,
notified FERC that the first, of a two-part closing, became effective July 1,
1999. Subsequent negotiations with Duke have resulted in the cancellation of the
second closing. On January 12, 2001, Transwestem filed a letter notifying FERC
that, due to economic reasons, the second closing/abandonment will not take
place. This decision also precluded the need to relocate the Crawford compressor
station. FERC may or may not respond to the letter filed January 12, 2001.

 

Filed:    09/23/98 Order:    04/01/99 87 FERC ¶61,004 (1999) Certificate
Accepted:    04/26/99

 

Appendix 3.9(b)

Page 49

--------------------------------------------------------------------------------

1999

 

CP99-522    GALLUP EXPANSION/SAN JUAN COOLERS - Section 7(c) application to
install and operate additional cooling at the Bloomfield and LaPlata “A”
compressor stations and a new electric drive compressor station near Gallup all
on the San Juan Lateral. The subject facilities will create incremental firm
capacity of approximately 50,000 Mcf/d on the San Juan Lateral downstream of the
Bloomfield compressor station for a total capacity on the San Juan Lateral of
850,000 Mcf/d. The facilities will also allow Transwestern to increase its
mainline operating pressure from Thoreau to California to 950 psig, thereby
allowing Transwestem to operate its mainline west to California at its
certificated capacity of 1,090,000 Mcf/d. The certificate authority for
operational flexibility of the San Juan Lateral and the mainline for deliveries
east of Thoreau received in Docket No. CP96-10 will remain in full force and
effect (this would become an issue if the unit at Gallup is abandoned).

 

Filed: 05/13/99 Order Issued: 01/13/00 90 FERC ¶ 61,032 (2000) Accepted
Certificate: 01/14/00 In Service at Bloomfield Coolers    04/06/00 In Service at
La Plata Coolers    04/20/00 In Service at Gallup Station    05/01/00

 

CP99-534    STATION 8 - Section 7(b) application for permission and approval to
abandon by removal Unit No. 3 (6,500 HP) at Transwestern’s Station 8 located in
Lincoln County, New Mexico. On December 2, 1999, Transwestem filed the Notice of
Abandonment of Unit #3 at Station 8 effective November 30, 1999.

 

Filed:    05/21/99 Order issued:    08/18/99 88 FERC 1162,157 (1999)

 

CP99-447   

ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the

construction of eligible facilities under automatic authorizations for calendar
year 1998

 

Filed:    04/30/99

 

NM   

ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual

Report for construction activity during the year 1998 under Section 284.11(d) of
the Commission’s Regulations.

 

Filed:    (Not Filed)

 

Appendix 3.9(b)

Page 50

--------------------------------------------------------------------------------

1999

 

CP99-443    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission’s Regulations for calendar
year 1998.

 

Filed:    04/30/99   

 

N/A    ANNUAL SYSTEM CAPACITY REPORT - Pursuant to Section 284.13 for the
calendar year 1998.

 

Filed:    03/01/99   

 

N/A    ANNUAL SYSTEM FLOW DIAGRAMS REPORT - FERC Form No. 567 for the calendar
year 1998.

 

Filed:    05/28/99   

 

N/A    QUARTERLY INDEX OF CUSTOMERS REPORT - Pursuant to Section 284.106 for the
calendar year 1999.

 

Filed:       1st Quarter:    12/31/98    2nd Quarter:    04/01/99    3rd
Quarter:    06/29/99    4th Quarter:    10/01/99   

 

Appendix 3.9(b)

Page 51

--------------------------------------------------------------------------------

2000

 

CP00-277    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for calendar
year 1999.

 

Filed:    05/01/00   

 

N/A    ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual Report
for construction activity during the year 1999 under Section 284.11(d) of the
Commission’s Regulations.

 

Filed:    (Not Filed.)   

 

CP00-305    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission’s Regulations for calendar
year 1999.

 

Filed:    05/01/00   

 

N/A    ANNUAL SYSTEM FLOW DIAGRAMS REPORT - FERC Form No. 567 for the calendar
year 1999.

 

Filed:    6/01/00   

 

RM85-1    ANNUAL SYSTEM CAPACITY REPORT - Pursuant to Section 284.13 for the
calendar year 1999.

 

Filed:    3/01/00   

 

N/A    QUARTERLY INDEX OF CUSTOMERS REPORT - Pursuant to Section 284.106 for the
calendar year 2000.

 

Filed:       1st Quarter    12/22/99    2nd Quarter:    03/31/00    3rd Quarter
   06/29/00    4th Quarter:    10/02/00   

 

1 FERRIS gives a 5/01/00 record for a Transwestem 311 Filing. Look to the right
column for a reference to “2.551f. This record is actually Transwestem’s Annual
2.55(b) Replacement Report, not a 311 Report. Transwestem has no files
supporting a 311 Report for the year 1999.

 

Appendix 3.9(b)

Page 52

--------------------------------------------------------------------------------

2001

 

CP01-115    Red Rock Expansion - Section 7(b)/7(c) application requesting
permission and approval to: (1) abandon in-place existing units totaling 49,500
HP at Transwestem’s Stations 1, 2, 3 & 4 and (2) install a 41,500 HP unit at
each station resulting in 150,000 Mcf/d of incremental firm capacity from
Thoreau to the California border. Requested expedited treatment with an Order
issued by August 1, 2001.

 

Application Filed:    03/29/2001

FERC Environmental Assessment

   06/14/2001

Order Issuing Certificate and

   Approving Abandonment:    07/16/2001 Acceptance Letter    07/19/2001

Placed in Service 06/15/02

   06/21/2002

Order Extension of Time

   07/09/2002

Post Construction Noise Survey

   08/06/2002

Notification of Abandonment

   12/16/2002

In-Service (Stations 1-3)

   06/15/2002

 

CP01-272    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for calendar
year 2000.

 

Filed:    05/01/01 Revision Filed:    12/13/01

 

N/A    ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual Report
for construction activity during the year 2000 under Section 284.11(d) of the
Commission’s Regulations.

 

Filed:    (Not Filed?)

 

CP01-238    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission’s Regulations for calendar
year 2000.

 

Filed:    04/30/04

 

2

FERRIS gives a 4/30/01 record for a Transwestem 311 Filing. Look to the right
column for a reference to “2.551f. In other words, this record is actually
Transwestem’s Annual 2.55(b) Replacement Report, not a 311 Report. Transwestem
has no records supporting a 311 Report for the year 2000.

 

Appendix 3.9(b)

Page 53

--------------------------------------------------------------------------------

2001

 

N/A    ANNUAL SYSTEM FLOW DIAGRAMS REPORT - FERC Form No. 567 for the calendar
year 2000.

 

Filed:    5/30/01

 

N/A    ANNUAL SYSTEM CAPACITY REPORT - Pursuant to Section 284.13 for the
calendar year 2000.

 

Filed:    3/01/01

 

N/A    QUARTERLY INDEX OF CUSTOMERS REPORT - Pursuant to Section 284.106 for the
calendar year 2001.

 

Filed:    1st Quarter:    01/02/01 2nd Quarter:    04/02/01 2 Quarter 1st
Revision    05/23/01 3rd Quarter.    07/02/01 4th Quarter:    10/01/01

 

Appendix 3.9(b)

Page 54

--------------------------------------------------------------------------------

2002 CP02-134    San Juan Lateral Capacity (Bloomfield Air Coolers) — Section 7
of the Natural Gas Act (“NGA”), as amended, and Part 157 of the Commission’s
Regulations, requesting the issuance of a certificate of public convenience and
necessity authorizing an additional 10,000 Dth/day of capacity on Transwestern’s
San Juan lateral.

 

  Filed:    04/02/2002      Noticed    04/05/2002     

Order issuing Certificate and

Approving Abandonment:

   04/19/2002      Acceptance of Certificate    05/10/2002      In-Service   
05/10/2002      (Constructed under Section 2.55(a)      W/O No. C.015384.01,
Actual Cost = $288,404)   

 

CP02-255    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for the
calendar year 2001.

 

  Filed:    05/01/02      Revision Filed:    04/21/03   

 

CP02-247    ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual
Report for construction activity during the year 2001 under Section 284.11(d) of
the Commission’s Regulations.

 

  Filed:    05/01/02   

 

CP02-258    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission’s Regulations for calendar
year 2001.

 

  Filed:    05/01/02   

 

N/A    ANNUAL SYSTEM FLOW DIAGRAMS REPORT — FERC Form No. 567 for the calendar
year 2001.

 

  Filed:    05/10/02   

 

N/A    ANNUAL SYSTEM CAPACITY REPORT — Pursuant to Section 284.13 for the
calendar year 2001.

 

  Filed:    02/25/02   

 

N/A    QUARTERLY INDEX OF CUSTOMERS REPORT — Pursuant to Section 284.106 for the
calendar year 2002.

 

  Filed:         1st Quarter:    01/02/02      Revised 1st Quarter:    05/10/02
     2nd Quarter:    04/01/02      3rd Quarter.    07/01/02      4th Quarter:   
10/01/02   

 

Appendix 3.9(b)

Page 55

--------------------------------------------------------------------------------

2003

 

CP03-205   

ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the construction
of eligible facilities under automatic authorizations for the calendar year
2002.

 

  Filed:    05/01/03   

 

CP03-160   

ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual Report for
construction activity during the year 2002 under Section 284.11(d) of the
Commission’s Regulations.

 

  Filed:    05/01/03   

 

CP03-164   

ANNUAL 2.55(b) REPORT - Annual Report for the replacement of facilities pursuant
to §2.55(b) of the Commission’s Regulations for calendar year 2002.

 

  Filed:    05/01/03   

 

N/A   

ANNUAL SYSTEM CAPACITY REPORT — Pursuant to Section 284.13 for the calendar year
2002.

 

  Filed:    02/28/03   

 

N/A   

ANNUAL SYSTEM FLOW DIAGRAMS REPORT — FERC Form No. 567 for the calendar year
2002.

 

  Filed:    05/28/03   

 

N/A   

QUARTERLY INDEX OF CUSTOMERS REPORT — Pursuant to Section 284.106 for the
calendar year 2003.

 

  Filed:         1st Quarter:    01/02/03      2nd Quarter:    04/01/03      2ND
Quarter Revised:    04/10/03      3rd Quarter:    07/01/03      4th Quarter:   
10/01/03   

 

Appendix 3.9(b)

Page 56

--------------------------------------------------------------------------------

2004

 

CPO4-104   

San Juan 2005 Expansion Project - Section 7(b)(c) application for permission and
approval to construct, modify, and operate pipeline looping, and to abandon,
replace, install and modify certain compression, piping, and ancillary
facilities. Transwestern’s proposed Expansion Project facilities will increase
capacity by 375,000 Dth/day on the San Juan Lateral from the Blanco Hub located
in San Juan County, NM to the Gallup area located at the interconnection of the
San Juan Lateral and Transwestern’s mainline.

 

  Filed:    04/08/04      Notice of Application    04/15/04      Order issued:
   08/05/04      In-Service    05/01/05   

 

CP05-04    P-1 and P-2 Compressor Stations Rewheel Project - Section 7(c)
application requesting the issuance of a certificate of public convenience and
necessity authorizing certain modifications at Transwestern’s existing P-1 and
P-2 Compressor Stations, and an additional 10,000 Dth/day of incremental
capacity on Transwestern’s Panhandle Lateral. Transwestem is requesting
Commission authorization to replace the compressor wheels (“rewheel”) at its
existing P-1 and P-2 Compressor Stations that will allow higher flow volumes
that will create an incremental year-round 10,000 Dth/day of gas flow on its
Panhandle Lateral.

 

  Filed:    10/08/04      Notice of Application    10/13/04      Order Issued:
   11/08/04      Commenced Construction    11/15/04      In-Service    11/19/05
     Cost Comparison filed    05/19/05   

 

CP04-196    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for the
calendar year 2003.

 

  Filed:    04/30/04      Revision Filed:    09/09/04   

 

CPO4-203   

ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual Report for
construction activity during the year 2003 under Section 284.11(d) of the
Commission’s Regulations.

 

  Filed:    04/30/04   

 

Appendix 3.9(b)

Page 57

--------------------------------------------------------------------------------

2004

 

CPO4-312    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of
facilities pursuant to §2.55(b) of the Commission’s Regulations for calendar
year 2003.

 

  Filed:    04/30/04   

 

N/A   

ANNUAL SYSTEM CAPACITY REPORT — Pursuant to Section 284.13 for the calendar year
2003.

 

  Filed:    02/26/04   

 

N/A   

ANNUAL SYSTEM FLOW DIAGRAMS REPORT — FERC Form No. 567 for the calendar year
2003.

 

  Filed:    05/28/04   

 

N/A   

QUARTERLY INDEX OF CUSTOMERS REPORT — Pursuant to Section 284.106 for the
calendar year 2004.

 

  Filed:         1st Quarter:    01/02/04      2nd Quarter:    04/01/04      3rd
Quarter:    07/01/04      4th Quarter:    10/01/04   

 

Appendix 3.9(b)

Page 58

--------------------------------------------------------------------------------

2005

 

CP05-294    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for the
calendar year 2004.

 

  Filed:    04/29/05   

 

CP05-259    ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual
Report for construction activity during the year 2004 under Section 284.11(d) of
the Commission’s Regulations.

 

  Filed:    04/29/05   

 

CP05-285   

ANNUAL 2.55(b) REPORT - Annual Report for the replacement of facilities pursuant
to §2.55(b) of the Commission’s Regulations for calendar year 2004.

 

  Filed:    04/29/05   

 

N/A   

ANNUAL SYSTEM CAPACITY REPORT — Pursuant to Section 284.13 for the calendar year
2004.

 

  Filed:    03/01/05   

 

N/A   

ANNUAL SYSTEM FLOW DIAGRAMS REPORT — FERC Form No. 567 for the calendar year
2004.

 

  Filed:    06/01/05   

 

N/A   

QUARTERLY INDEX OF CUSTOMERS REPORT — Pursuant to Section 284.106 for the
calendar year 2005.

 

  Filed:         1st Quarter:    01/01/05      2nd Quarter:    04/01/05      3rd
Quarter:    07/01/05      4th Quarter:    10/01/05   

 

Appendix 3.9(b)

Page 59

--------------------------------------------------------------------------------

2006

 

CP06-59    East of Canadian River Facilities Abandonment by Sale - Section 7(b)
abandonment application requesting authorization to abandon by sale to PVR
Midstream LLC approximately 115 miles of 12 and 16-inch pipeline laterals, one
compressor station, and related appurtenant facilities located in Hemphill and
Lipscomb Counties, Texas, and Beaver, Ellis, and Roger Mills Counties, Oklahoma
(“East of Canadian River Facilities”). Also, Transwestem and PVR jointly request
that the Commission declare the East of Canadian River Facilities, once
abandoned, to be gathering and exempt from the Commission’s regulations pursuant
to Section 1(b) of the NGA.

 

  Filed:    2/03/06      Notice of Application    2119/06      Order Issued:   
5/17/06      Notice of Abandonment    7107/06      Facilities Conveyed to PVR
Midstream    7101/06   

 

N/A    ANNUAL SYSTEM CAPACITY REPORT — Pursuant to Section 284.13 for the
calendar year 2004.

 

  Filed:    03/01/06   

 

N/A    ANNUAL 2.55(b) REPORT - Annual Report for the replacement of facilities
pursuant to §2.55(b) of the Commission’s Regulations for calendar year 2004.

 

  Filed:    04/29/06   

 

N/A    ANNUAL REPORT OF 311 FACILITIES UNDER SECTION 284.11(d) - Annual Report
for construction activity during the year 2004 under Section 284.11(d) of the
Commission’s Regulations.

 

  Filed:    04/29/06   

 

CP82-534    ANNUAL BLANKET REPORT - Annual Blanket Certificate Report for the
construction of eligible facilities under automatic authorizations for the
calendar year 2004.

 

  Filed:    04/29/06   

 

N/A    ANNUAL SYSTEM FLOW DIAGRAMS REPORT — FERC Form No. 567 for the calendar
year 2005.

 

  Filed:    06/01/06   

 

N/A   

QUARTERLY INDEX OF CUSTOMERS REPORT — Pursuant to Section 284.106.

 

  1st Quarter Filed:    01/01/06      2nd Quarter Filed:    04/01/06      3rd
Quarter Filed:    07/01/06      4th Quarter Filed    10/01/06   

 

Appendix 3.9(b)

Page 60

--------------------------------------------------------------------------------

Section 3.10

LITIGATION

 

1. In Re Natural Gas Royalties Qui Tam Litigation previously known as Grynberg
v. Enron, et al. (including many pipeline defendants and TPC), U.S. District
Court of Wyoming; MDL Docket No. 1293, CA. No. 99MD-1640 and 99MD1626.
Associated with the sale of certain assets to Agave Energy Company, TPC agreed
to indemnify Agave Energy Company for any ongoing expenses related to these
proceedings as set forth in the Measurement Indemnification letter agreement of
October 1, 1995 and letter dated August 27, 1999.

 

2. TPC Order to Respond Proceeding, Docket No. 11402-6-000.

 

3. United States Department of Interior, Bureau of Indian Affairs — TPC is
managing two threatened trespass actions related to right of way on Tribal or
allottee land.

 

  (a) The first matter involves an agreement with the United States Department
of Interior, Bureau of Indian Affairs (BIA) covering 44 miles of ROW on a total
of 69 Navajo allotments within Tribal or allottee lands. This ROW agreement
expired on January 1, 2004. One Allottee, Mr. Leon Gibson, sent a letter dated
January 16, 2004 to the BIA claiming TPC is trespassing. Discussions are ongoing
with the BIA to approve the renewal application, which was filed in October
2002.

 

  (b) The second matter involves trespass actions related to 5100 feet of ROW on
private allotments within the Laguna Pueblo that expired on December 28, 2002.
TPC received a letter dated March 19, 2003 from the BIA on behalf of the two
allottees asserting trespass.

 

4. Enron Corp. v. Citigroup, Inc., U.S. Bankruptcy Court, Southern District of
New York,

Adversary Proceeding No. 03-93611 (AJG). Enron Corp. initiated an adversary
proceeding against Citigroup in 2003, seeking return of certain payments made by
Enron to Citigroup shortly before the Enron bankruptcy. Citigroup notified TPC
in December of 2004 that it intended to seek indemnification from TPC under the
provisions of certain loan agreements executed in 2001 between TPC and Citigroup
as to any amount ultimately required to be repaid by Citigroup to Enron. In
January of 2005, Enron gave notice that it would assume the defense as to and
indemnify CCE Holdings, LLC, against any action by Citigroup to collect from
TPC. Discovery is ongoing in the adversary proceeding and TPC has not been
joined in the litigation.

 

S-24

--------------------------------------------------------------------------------

Section 3.11

TITLE TO PROPERTIES

Expiration of Permits

The following New Mexico State Highway Crossing Permits have expired. These
permits are in the process of being renewed.

 

  a. 30” Loopline

 

  1. Chaves County - TPC Tract No. M-1-L-H

 

  2. Lincoln County - TPC Tract Nos. M-92-L-H and M-97-L-H

 

  3. Valencia County - TPC Tract No. M-165-L-H

 

  4. Cibola County - TPC Tract Nos. M-187-L-H.1, M-187-L-H.2, M-

187-L-H.3, M-187-L-H.4, M-187-L-H.5 and M-193-L-H

 

  b. 24” West Texas Loop - Chaves County - TPC Tract Nos. MTL-3-L-H, MTL-5-

L-H, MTL-16B-L-H and MTL-66-L-H

 

  c. 36” West Texas Loop - Eddy County - TPC Tract Nos. MTL-81-L-H, MTL-89-

L-H and MTL-93-L-H

 

  d. 36” West Texas Loop - Lea County - TPC Tract No. MTL-112-L-H

 

  e. 12” Atoka Artesia Lateral - Eddy County - TPC Tract Nos. MTL-0001-L-10-

HX.2 and MTL-0001-L-10-HX.3

 

  f. 16” Crawford Loop Lateral - Eddy County - TPC Tract Nos. MTL-0002-L-20-

HX and MTL-0002-L-21-HX.1

Rentals in arrears

 

  a. 16” Keystone Lateral

 

  1. Winker County, Texas - TPC Tract No. TL-0005-06-RRX.1. Rental last paid to
Texas-New Mexico Railway Co. thru 1988 -Successor in title has never been
identified despite attempts to do so.

 

  2. Winkler County, Texas - TPC Tract No. TL-0005-06-RRX.2. Rental last paid to
Texas-New Mexico Railway Co. thru 1988 -Successor in title has never been
identified despite attempts to do so.

Right-of-Way Exceptions

 

  a. 30” Mainline

 

  1. TPC Tract No. M-134A - SW/4 NW/4, Section 22, Township 2 North, Range 5
East, Torrance County, New Mexico. Pipeline traverses property for a distance of
1,548 feet or 0.293 miles. No Easement or permanent Right-of-Way file has been
located. Owners unknown.

 

  2. TPC Tract No. M-167A - Portion of Belen Grant, Valencia County, New Mexico.
Pipeline traverses property for a distance of approximately 4,000 feet or 0.758
miles. No Easement or permanent Right-of-Way file has been located. Owner(s)
unknown.

 

S-25

--------------------------------------------------------------------------------

  3. TPC Tract No. M-236-R - Portion of S/2, Section 3, Township 13 North, Range
12 West, McKinley County, New Mexico. Pipeline traverses property for a distance
of 2,878 feet or 0.545 miles. No Easement or permanent Right-of-Way file has
been located. The owner in 1959 as reflected on alignment drawing was Electric
Plains Railroad Spur; current owners unknown.

 

  b. 30” Loop of Mainline - TPC Tract No. M-167A - Portion of Belen Grant,
Valencia County, New Mexico. Pipeline traverses property for a distance of
approximately 4,008 feet or 0.759 miles. No Easement or permanent Right-of-Way
file has been located. Owner(s) unknown.

 

  c. 16” Crawford Lateral Loop — The ROW documents related to the following
tracts were inadvertently assigned in a sale to GPM (Assets now owned by Duke
Field Services, successor in title). The pipeline was not conveyed. TPC is in
the process of attempting to have these instruments assigned back to TPC from
Duke.

 

  1. TPC Tract No. MTL-0002-L-01-BX — Road x-ing permit [9 rods]

 

  2. TPC Tract No. MTL-0002-L-08-RRX — Railroad x-ing [13 rods]

 

  3. TPC Tract No. MTL-0002-L-07B — Easement [3 rods]

 

  4. TPC Tract No. MTL-0002-L-16-FIX — Road x-ing permit [1 rod]

Navajo Nation Allotment Renewal - As of January 1, 2004, TPC’s Grant of Right-of
Way by the U.S. Department of Interior (“DOI”), Bureau of Indian Affairs (“BIA”)
for a total of approximately forty-four (44) miles of pipeline on a total of
sixty-nine (69) Navajo allotments expired. These allotments are lands within the
Navajo Nation reservation that are privately held but administered by the B I A.
One allottee has made claims of trespass. The BIA sent a letter dated
January 20, 2004, noting certain alleged deficiencies in the TPC Application for
a Grant of Right-of-Way to renew right-of-way on these allotments and requesting
a revised appraisal based on pipeline corridor valuations.

Southern Ute Tribe - TPC received letters dated May 27, 2003 and September 2,
2003 from the law firm of Maynes, Bradford, Shipps & Sheftek, LLP, on behalf of
the Southern Ute Tribe (“Tribe”) alleging trespass by TPC. The letters
referenced a May 19, 2003 resolution by the Tribal Council of the Tribe, which
revokes a 1996 resolution that granted the Tribe’s Consent to a Partial
Assignment by Northwest Pipeline Company (“Northwest”) to TPC of certain
interests in a 1990 Grant of Easement and Right-of-Way, issued by the Secretary
of the Interior through the BIA. An application by TPC for approval of the
assignment of this interest from Northwest has been in the possession of the BIA
since 1999 with no action taken. The total distance of the right-of-way is
approximately 6.6 miles. There is an approximate 3,100- foot “gap” in the
description of the right-of-way in the BIA grant. The right-of-way for these 6.6
miles expired in September 2005. In addition, an application is pending with the
BIA to renew a meter site and a buried electric cable right-of-way for which the
Tribe has previously consented and which consent has not been revoked. The
original right-of-way for the buried cable expired on November 16, 2000. The
original right-of-way for the meter site expired on

 

S-26

--------------------------------------------------------------------------------

February 21, 2001. Agreement for renewal of right-of way grants, between
Southern Ute, TPC and Northwest, was concluded on June 14, 2006. Application to
BIA was made on August 3, 2006.

Laguna Pueblo Allotments — TPC received a letter dated March 19, 2003 from the
DOIBIA on behalf of two private allotments within the boundaries of the Laguna
Pueblo that TPC has been in trespass on these two allotments since December 28,
2002. TPC’s right-of-way on these two allotments expired on December 28, 2002.
The total distance of the right-of-way is about 5,100 feet.

Navajo Nation Tribal Lands Renewal - As of January 1, 2004, TPC’s grant of
right-of-way by the DOI-BIA for a total of approximately 14 acres of land near
Thoreau, N.M. expired. TPC is conducting remediation activities on this site. An
application for renewal of approximately 7 acres has been submitted.

Other mortgages, liens or other encumbrances may exist which have not been
subordinated to the title of TPC. For example, the majority of the property
rights that acquired for pipelines are in the nature of easements, and upon
taking these easements the fee property may have already been subject to a
variety of encumbrances such as a mortgage. TPC may have taken the easement
subject to the mortgages and may have not subsequently obtained a subordination
from the mortgage company.

Encumbrances

Blanco Hub Facilities: Construction and Ownership Agreement dated November 18,
1991, among Northwest Pipeline Corporation, TPC and Gas Company of New Mexico.

LaPlata Facilities: La Plata Facilities Ownership and Operation Agreement dated
November 3, 1995, between Northwest Pipeline Corporation and TPC.

 

S-27

--------------------------------------------------------------------------------

Section 3.12(a)

EMPLOYEE MATTERS

 

1 Medical (Active and Retired):

 

  a. United Health Care: PPO program under an ASO arrangement with a specific
stop loss ($225,000).

 

  i.

High Option ( 90/70)

 

  ii.

Middle Option ( 80/60 )

 

  iii.

Low Option ( 70/60)

 

  iv. Indemnity Plan (70%)

 

  v. Retiree Under 65 Plan

 

  vi. Retiree 65 and Over Plan

 

2. Dental: Delta Dental of RI — PPO program under an ASO arrangement.

 

3. Vision: Vision Benefits of America — PPO program under an ASO arrangement.

 

4. Life and AD&D: non-contributory with Aetna.

 

5. Voluntary Life: contributory with Aetna.

 

6. Voluntary Spouse & Dependent Life: contributory with Aetna.

 

7. LTD: non-contributory with Aetna.

 

  a. Executive Officers

 

  b. All Other Employees

 

8. STD: advice only program with Prudential.

 

9. Defined Contribution Plans: Cross Country Energy Savings Plans

 

  a. Plan 001 (Main Plan)

 

  b. Plan 002 (Enron Rollover Plan)

 

10. Severance Plan.

 

11. Healthcare Flexible Spending Account under Flex Plan – United Health Care.

 

S-28

--------------------------------------------------------------------------------

Section 3.12(b)

EMPLOYEE MATTERS

 

1. Outstanding Contributor Award Program

 

2. Annual Incentive Plan

 

3. Stock Option Plan:

 

  a. Southern Union Company 2003 Stock and Incentive Plan

 

4. Other Benefits:

 

  a. Sick Days

 

  b. Personal Days

 

  c. Holidays

 

  d. Vacation

 

  e. Employee Assistance Program — Care24 with United Health Care

 

  f. Educational Assistance/Tuition Reimbursement

 

  g. Dependent Care Flexible Spending Account under Flex Plan — United Health
Care

 

  h. Relocation Benefits

 

  i. Bereavement Leave

 

  j. Paternity/Adoption Leave

 

  k. Jury Duty, Witness Duty and Military Leave

 

5. TPC committed to provide a $1,648.39 monthly lifetime annuity to an
individual under the Houston Natural Gas Corporation and Subsidiaries Executive
Supplemental Benefit Agreement.

 

6. TPC committed to provide a total of $295,320 to the spouse of a former
executive upon death of the executive under the Houston Natural Gas Corporation
and Subsidiaries Executive Post-Retirement Salary Continuation Agreement.

 

7. Transwestern Pipeline Company, LLC VEBA to provide for Retiree Health Care
and Other Benefits

 

S-29

--------------------------------------------------------------------------------

Section 3.12(e)(vi)

EMPLOYEE MATTERS

A determination letter request is currently pending with the IRS relating to the
Transwestem. Pipeline Company, LLC VEBA to Provide for Retiree Health Care and
Other Benefits.

 

S-30

--------------------------------------------------------------------------------

Section 3.12(e)(vii)

EMPLOYEE MATTERS

With respect to post-retirement medical benefits, eligible current and former
employees and retirees of TPC (and their eligible spouses, surviving spouses and
dependents) have been covered under the Enron Inactive Medical Plan and the
Medical Plan sponsored by CC Energy, and effective as of the Closing Date, such
eligible individuals, as well as eligible Shared Service Employees who become
Transferring Shared Service Employees (and their eligible spouses, surviving
spouses and dependents) will be covered under the plan established by TPC or ETP
pursuant to Section 5.5(e) of the Agreement. In addition, with respect to
post-retirement medical benefits, and in accordance with an order relating to
the Enron VEBA Motion or any other order of a court of competent jurisdiction
relating to the partition of assets held under the Enron VEBA and/or the
distribution of liabilities associated with the Enron VEBA, such plan
established by TPC or ETP pursuant to Section 5.5(e) of the Agreement will cover
current and former employees and retirees of TPC, former employees and retirees
of former affiliates of TPC who provided services to TPC, and their respective
eligible spouses, surviving spouses and dependents. In the case of individuals
eligible for post-retirement medical benefits under the Enron Inactive Medical
Plan, the Medical Plan sponsored by CC Energy or the plan established by TPC or
ETP pursuant to Section 5.5(e) of the Agreement, or eligible for such benefits
in accordance with an order relating to the Enron VEBA Motion or any other order
of a court of competent jurisdiction relating to the partition of assets held
under the Enron VEBA and/or the distribution of liabilities associated with the
Enron VEBA, references to “former employees and retirees” include eligible
disabled former employees and retirees. Consistent with a Statement of Policy
issued by the Federal Energy Regulatory Commission on December 17, 1992, TPC has
recovered in the past and is currently recovering funds to provide retiree
medical benefits. Funds recovered in this manner were, in the past, contributed
to the Enron VEBA, and are currently being contributed to the TPC VEBA.
Consistent with applicable legal requirements, funds held in the two VEBAs
referred to in the preceding sentence must be used for the purposes for which
the VEBAs were established. In addition, funds recovered in rates may be
required to be returned to the rate payers in the event that retiree medical
benefits for which the funds were recovered are not provided.

 

S-31

--------------------------------------------------------------------------------

Section 3.12(e)(ix)

EMPLOYEE MATTERS

The substantive provisions relating to the severance benefits available under
the Transwestem Pipeline Company Severance Pay Plan are not identical to the
substantive severance provisions set forth in Section 5.5(f) of the Agreement;
however, such Plan will be terminated prior to the employment transfers
contemplated under Section 5.5 (g) of the Agreement

 

S-32

--------------------------------------------------------------------------------

Section 3.12(e)(x)

EMPLOYEE MATTERS

The two CrossCountry Energy Savings Plans are based on prototype documents that
have opinion letters from the IRS. Individual determination letters have not yet
been requested from the IRS with respect to these Plans.

 

S-33

--------------------------------------------------------------------------------

Section 3.12(e)(xi)

EMPLOYEE MATTERS

The CrossCountry Energy Savings Plans may experience a termination or partial
termination.

 

S-34

--------------------------------------------------------------------------------

Section 3.12(e)(xiii)

EMPLOYEE MATTERS

A determination letter request with respect to the Transwestern Pipeline
Company, LLC VEBA to Provide for Retiree Health Care and Other Benefits is
currently pending with the IRS.

 

S-35

--------------------------------------------------------------------------------

Section 3.14

INTELLECTUAL PROPERTY

 

Mark

  

Type

  

Registrant

Hottap    Service Mark    Panhandle Eastern Pipe Line Company, LP Sunburst   
Service Mark    Southern Union Company sug.com    Domain Name    Southern Union
Company

 

1. Third party software that TPC has no ownership rights in are listed below.
CCE is still reviewing the ability to provide software services under a
Transition Services Agreement. CCE may not have the right to utilize third-party
software to provide services to a non-affiliated party.

 

  •  

Hyena Maint

 

  •  

IPSwitch WS FTP 20 user License Pack/Maint.

 

  •  

Sun Maint on Hardware (Silver Support)-Maintech

 

  •  

Configuresoft Maintenance (300 svrs, 2400 wkst)

 

  •  

NetIQ -Security Administration Suite

 

  •  

Legato Tape Backup Solution Maint.

 

  •  

Chg Mgr for MS SQL maint Embarcadero

 

  •  

DBArtisan maint (7 license) Embarcadero

 

  •  

MS Premier Support Agreement

 

  •  

Tidal Software SAN /Sys Admiral

 

  •  

Web Trends Enterprise Edition

 

  •  

Rightfax Server Upgrade (FGT & ET&S &OCC)

 

  •  

MS SQL Server (Houston/25) no maint til 2006

 

  •  

MS Visio

 

  •  

MSDN Universal Subscriptions (7)

 

  •  

MS Project

 

  •  

MS 2000 Server

 

  •  

MS 2000 Wksn

 

  •  

MS FrontPage

 

  •  

Adobe Illustrator

 

  •  

Adobe Photo Shop

 

  •  

SmallTalk

 

  •  

Web Analysis Tool - Webgain Toplink Java (16@1150)

 

  •  

Resin Software - Caucho Technology

 

  •  

Resin Server Licenses - Caucho Technology

 

  •  

Dream Weaver MX

 

  •  

Computer Associates ERWIN

 

  •  

Informatica - PowerMart

 

  •  

Business Objects - Full Client

 

  •  

Business Objects - Broadcast Agent Server

 

  •  

Business Objects - Developer

 

S-36

--------------------------------------------------------------------------------

  •  

Business Objects - Servers

 

  •  

HP Alpha Maint on Hardware - GC

 

  •  

Reflection Licenses (GC)

 

  •  

Multinet by Process Software (GC)

 

  •  

Impact Weather (Universal Weather Service Maint) (Gas Control)

 

  •  

Quillix Maint.

 

  •  

PGAS System Maint

 

  •  

Bass-Trigon Software

 

  •  

Primavera P3

 

  •  

Timberline

 

  •  

WinD.O.T.tm - The Pipeline Safety Reg

 

  •  

Paradigm Plus licenses (4)

 

  •  

Pipeline Toolbox Annual Software Lease

 

  •  

Spectel Maint for Audio Conf Bridge

 

  •  

Map Objects

 

  •  

CAD Maint Renewal

 

  •  

Macromedia Breeze

 

  •  

Oracle Financials

 

  •  

Oracle Financials; iExpense, HR. & Discoverer

 

  •  

PowerPlan Consultants

 

  •  

PowerPlan Consultants

 

  •  

Bottom Line Technologies

 

  •  

Other Misc Software

 

  •  

PHE +

 

  •  

Workforce

 

  •  

Remedy - Change Management Software

 

  •  

Vertex Q Series

 

  •  

Microsoft

 

  •  

Convey 1042-S

 

  •  

Convey 1099 Level C

 

  •  

Convey 1042-S & 1099 Level C

 

  •  

Email - LDC Exchane & Pangea Migration Project

 

  •  

User Friendly Consulting - Quillix & MuWave

 

  •  

Quest Toad

 

  •  

Micro Focus for Net Express Support

 

  •  

BMC Remedy - Help Desk, Asset Mgmt, Change Ctrl

 

  •  

BMC Identity Mgmt & Sigle Sign-On

 

  •  

BMC Discovery Tools

 

  •  

Consolidate Pipeline DR Sites

 

  •  

SANZ-Houston office tape library (HW)

 

  •  

SANZ-Dallas (HW)

 

  •  

SANZ-MJHarden tape backup library (HW)

 

  •  

SANZ - SW support (Legato)

 

  •  

DR Messaging

 

S-37

--------------------------------------------------------------------------------

  •  

Sherpa Software - Discovery Attender

 

  •  

NetIQ -Security Administration Suite

 

  •  

Citrix

 

  •  

Configuresoft ECM Server License

 

  •  

Configuresoft Maintenance (300 svrs, 1,200 wkst)

 

  •  

Verisign - EC Prod & EC Test

 

  •  

Citrix Subscription Advantage

 

  •  

NetIQ-AppManager

 

  •  

OMTool Support (faxing)

 

  •  

MOJO Systems Solaris

 

  •  

MOJO Systems Solaris

 

  •  

Landesk Mgmt - Dell

 

  •  

Landesk Handheld Mgr - ASAP

 

  •  

WinZip

 

  •  

Connected

 

  •  

Symantec Mail Security 8200 Series AntiSpam & AntiVirus

 

  •  

Blackberry

 

  •  

Quest - Spotlight on SQL Server Enterprise

 

  •  

MS SLB SQL SRV ENT 2005 - 32 CPU

 

  •  

Computer Associates (AllFusion)

 

  •  

Oracle - MTHarden, Leasedata

 

  •  

Sybase

 

  •  

Embarcadero — increase for MSR+ lic.

 

  •  

Credit & Management Systems, Inc.

 

  •  

Oracle TopLink Mapping Workbench

 

  •  

AvePoint for SharePoint-DocAve 301 Svc

 

  •  

Macromedia Breeze

 

  •  

Business Objects

 

  •  

Celeritas Public Awareness Hosting

 

  •  

ESRI ArcInfo Floating License

 

  •  

ESRI ArcView single Use Unkeyed License

 

  •  

ESRI MapObjects

 

  •  

FileNet - Email Manager

 

  •  

FileNet - SharePoint Portal

 

  •  

Flow-Cal

 

  •  

Invensys Avantis-Popfax

 

  •  

Precision Products-Low-Volume ScanCare Plus Post Warranty

 

  •  

SpatiaX-sxCAD for AutoCad

 

  •  

TG WEB Direct Purchase

 

  •  

Total CAD Systems

 

S-38

--------------------------------------------------------------------------------

Section 3.15

ENVIRONMENTAL MATTERS

Owing Remediation

 

A. WT-1 Station

 

Location:    Lea County, NM Agency:    New Mexico Oil Conservation Division
(“NMOCD”) Status:   

WT- 1 Station Dehy Area Soil and groundwater in the dehy area are impacted with
natural gas condensate liquid. Off-site soil and groundwater has also been
impacted. Groundwater monitoring occurs semiannually with annual reporting to
the NMOCD.

 

WT-1 Station Engine Room Pit Area — Soil and groundwater in the engine room pit
area are impacted with used lube oil that also contains low concentrations of
halogenated organic compounds. Off-site soil and groundwater has also been
impacted. Groundwater monitoring occurs semiannually with annual reporting to
the NMOCD.

 

B. Roswell Station

 

Location:    Chaves County, NM Agency:    New Mexico Oil Conservation Division
Status:    Soil and groundwater are impacted with natural gas condensate liquid.
Trace concentrations of halogenated organic compounds in soil and groundwater
are present in the area immediately around the former burn pits. Off-site soil
and groundwater has also been impacted. Groundwater monitoring occurs
semiannually with annual reporting to the NMOCD.

 

C. Laguna Station

 

Location:

Agency:

Status:

  

Cibola County, NM

Pueblo of Laguna

Soil and groundwater are impacted with natural gas condensate liquid, used lube
oil containing low concentrations of halogenated organic compounds, and PCBs.
Off-site soil and groundwater has also been impacted. Groundwater monitoring
occurs semiannually with annual reporting to the Pueblo of Laguna. TPC is
currently in the process of removing hydrocarbon impacted soils in the turbo
charger area of the facility.

 

S-39

--------------------------------------------------------------------------------

D. N. Crawar Station

 

Location:

Agency:

Status:

  

Ward County, TX

Texas Railroad Commission (“TRC”)

Soil and groundwater are impacted with natural gas condensate liquid. Off-site
soil and groundwater has also been impacted. TPC was the historical owner and
operator of the site during the period of the release. A public water supply
well owned and operated by the Crane County Water District is located about 1000
feet east of the site but there are no known impacts to this well arising from
contamination at the N. Crawar Station. Groundwater monitoring occurs
semiannually with annual reporting to the TRC.

 

E. Bell Lake Plant

 

Location:

Agency:

Status:

  

Lea County, NM

New Mexico Oil Conservation Division

Soil and groundwater are impacted with natural gas condensate liquid, caustic,
and mercaptans. Off-site soil and groundwater has also been impacted.
Groundwater monitoring occurs semiannually with annual reporting to the NMOCD.

 

F. Thoreau Station

 

Location:

Agency:

Status:

  

McKinley County, NM

New Mexico Oil Conservation Division and Navajo Nation EPA (“NNEPA”)

Soil and groundwater are impacted with natural gas condensate liquid and PCBs.
Off-site soil and groundwater has also been impacted. Groundwater monitoring
occurs semiannually with annual reporting to the NMOCD and NNEPA.

 

G. Ivanhoe Station

 

Location:

Agency:

Status:

  

Beaver County, OK

Oklahoma Corporation Commission (“OCC”)

Soil and groundwater are impacted with natural gas condensate liquid. Soil and
groundwater of property adjacent to the Ivanhoe Station has also been impacted.
The affected property has been acquired by TPC. Groundwater monitoring occurs
semiannually with annual reporting to the OCC.

 

S-40

--------------------------------------------------------------------------------

H. Puckett Plant

 

Location

Agency

Status

  

Pecos County, Texas

Texas Railroad Commission

Status Arsenic was utilized in the natural gas processing at the Puckett Plant.
This resulted in surface soil and equipment contamination with elevated levels
of arsenic. As a result, TPC was issued a permit by the TRC to abandon the plant
by creating several on-site landfills. TPC is required to monitor the condition
of the site and the associated clay caps, operate and service an offsite
groundwater well, maintain the existing monitoring wells and renew the permit in
2017.

Other Matters

TPC received an Information Request from the Texas Commission on Environmental
Quality dated October 15, 2003 regarding the San Angelo Electric Service Company
site in San Angelo Texas. TPC responded to the Request in November 2003 stating
it has been unable to identify any responsive information. There has been no
further communications with the Texas Commission on Environmental Quality on
this matter since November 2003.

TPC has reported deviations from permit conditions under the EPA Title V
air-permitting program but has since addressed the conditions resulting in such
deviations. To TPC’s Knowledge, there are no notices of violation, either
pending or threatened, for such deviations.

TPC recently discovered a leaking oil/water drain line located at the Klagatoh
Compressor Station in Arizona. TPC is in the process of evaluating any potential
impacts as a result of the leaking line.

New v. Georgia Pacific Corporation et al., Case No. 2004-57450 (asbestos MDL
Case, District Court Harris County, Texas). Norma New and the estate of Darrell
New have filed suit against Northern Natural Gas Company (“Northern”) and others
claiming asbestos exposure he allegedly suffered while working as an employee of
TPC and others. By letter dated May 30, 2006 Northern requested TPC assume the
defense of the suit or indemnify Northern for its costs, expenses an attorney’s
fees. TPC declined. TPC has not been named as a defendant in the litigation.

TPC is in the process of removing and disposing of certain PCB impacted
equipment located at the Thoreau Compressor station. TPC is currently making
payments to customers whose facilities have been impacted by PCBs under the
Operating Agreement between Pacific Gas & Electric Company and TPC dated
June 27, 1995 and the agreement between and TPC and Southern California Gas
Company regarding PCB Claims Post-1990 Costs dated May 15, 1992.

 

S-41

--------------------------------------------------------------------------------

Section 3.16(a)

TAX MATTERS

None.

 

S-42

--------------------------------------------------------------------------------

Section 3.16(b)

TAX MATTERS

None.

 

S-43

--------------------------------------------------------------------------------

Section 3.17(a)

ABSENCE OF CERTAIN CHANGES OR EVENTS

 

1. Closing of that certain Purchase and Sale Agreement, dated as of November 18,
2005, by and between TPC and PVR Midstream LLC (sale of Mocane lateral and
appurtenant properties).

 

2. Execution of that certain Purchase and Sale Agreement, dated February 27,
2006, between TPC, El Paso Natural Gas Company, and Salt River Project
Agricultural Improvement and Power District (purchase option on Santan Lateral).

 

S-44

--------------------------------------------------------------------------------

Section 3.17(b)

ABSENCE OF CERTAIN CHANGES OR EVENTS

 

1. Calpine declared bankruptcy in 2005, and repudiated its transportation
contract with TPC in 2006.

 

2. TPC has renegotiated transportation arrangements with certain former global
settlement shippers at rates or volumes that are lower than prior revenue
levels.

 

  a. FTS-1 Firm Transportation Contract (Contract #101629), effective April 1,
2007, by and between TPC and Pacific Gas and Electric Company.

 

  b. FTS-1 Firm Transportation Contract (Contract #101595, effective March 1,
2007, by and between TPC and Chevron U.S.A., Inc.

 

  c. FTS-1 Firm Transportation Contract (Contract #101578), effective March 1,
2007, by and between TPC and UNS Gas, Inc.

 

3. TPC had unsubscribed San Juan-Needles capacity for the period January — March
2006 that is sold at rates and volumes that were less than the prior year.

 

4. 2006 transport capacity value for Permian-west has been below expectations
due to low basis differentials.

 

S-45

--------------------------------------------------------------------------------

Section 3.17(c)

ABSENCE OF CERTAIN CHANGES OR EVENTS

 

1. Certain firm contracts have been extended in the ordinary course of business.

 

2. On July 21, 2006 and again on August 9, 2006, TPC entered into amendments to
the Phoenix Project Expansion Agreements with Salt River Project, Arizona Public
Service Company and Southwest Gas Corporation to extend TPC’s deadline for
providing notice of termination due to certain cost increases.

 

S-46

--------------------------------------------------------------------------------

Section 3.18

ABSENCE OF UNDISCLOSED LIABILITIES

1. In 1992, Argentina granted Transportadora de Gas del Sur S.A. (“TGS”) a
35-year license to operate Argentina’s main natural gas pipeline. Following a
competitive bid process, the Argentine government awarded the bid to own and
operate the TGS pipeline to a consortium that included Enron Corp. (“Enron”). As
part of the bid application, TPC’s net worth was used to satisfy certain net
worth requirements set forth in the bidding rules, and TPC agreed to provide
ongoing technical support to the Enron affiliate, Enron Pipeline
Company-Argentina, S.A. (“EPCA”), serving as the Technical Operator for the TGS
pipeline. In addition, TPC guaranteed the performance of EPCA’s obligations
under certain shareholder and other agreements with its joint venture partner.

Enron entered into a Master Settlement and Mutual Release Agreement (the “MSA”)
with PetrOleo Brasilerio S.A. (“Petrobras”) on April 16, 2004, containing, among
other things, the following provisions: (1) Petrobras fully released Enron and
its affiliates from any liabilities arising from, among other things, the direct
or indirect sale by Enron of TPC, which release includes a release of future
claims; (2) any performance obligation owed by TPC to Petrobras regarding EPCA’s
performance obligations under certain governance agreements was terminated; and
(c) the Enron parties agreed, subject to the consent of Ente Nacional Regulador
de Gas (“ENARGAS”), to the assignment of that certain Technical Assistance
Agreement (the “TAA”) to Petrobras.

On May 27, 2004, EPCA and Petrobras filed an application with ENARGAS seeking
consent to the assignment of the TAA from EPCA to Petrobras. In a resolution,
dated June 11, 2004, ENARGAS declared that it had no objections to the
assignment of the TAA from EPCA to Petrobras on the terms previously disclosed
to ENARGAS. The ENARGAS resolution contained broad language releasing TPC from
its potential joint liability with EPCA. On July 29, 2004, EPCA filed a letter
with ENARGAS stating its understanding that, by virtue of the ENARGAS
resolution, the Enron economic group and the transfer restriction under the
Bidding Rules had terminated. To date, we are not aware of any response from
ENARGAS.

As of the date hereof, although the effectiveness of the release, which is a
matter of Argentine law, could be questioned, TPC does not believe there is
significant risk of any claim in connection with TGS that would lead to
potential liability to TPC given, among other things, (1) ENARGAS has consented
to the assignment of the TAA, (2) ENARGAS would have to prove damages to TGS
from TPC breaking from the Enron economic group and TGS has not suffered any
financial or operational damages, (3) the impact and likelihood of any liability
to TPC resulting from operational upset to the system or a line rupture will
lessen over time, and (4) by virtue of the passage of time without objection,
ENARGAS may be “estopped” from taking a position contrary to the July 29, 2004,
EPCA letter.

2. Evaluation is ongoing of an increase in operation and maintenance costs
associated with the TPC Ivanhoe remediation project. The increase in costs is
attributable to securing an alternate source of fuel to operate the thermal
oxidizer for the duration of the remediation project. The current estimated
increase is a total of approximately $1,000,000 to $2,500,000 over the projected
12 year period.

 

S-47

--------------------------------------------------------------------------------

Section 3.20

AFFILIATED TRANSACTIONS

Section 3.7(b) of the CCE Disclosure Letter is incorporated herein by reference.

 

S-48

--------------------------------------------------------------------------------

Section 3.21

2006 — 2007 POLICY SCHEDULE

 

Coverage Description

  

Limits

  

Company

  

Policy No.

Automobile Coverage          CCE Holdings LLC    $2MM CSL    Travelers Property
Casualty Co. of America    TC2ICAP750G9200 Worker’s          Compensation      
   CCE Holdings LLC    $IMM/$1MM/$1MM    Charter Oak Fire Insurance Company   
TC2OUB749G9945 CCE Holdings LLC (AZ)    $1MM/$1MMAIMM    Travelers Property
Casualty Co. of America    TRJUB749G9933 Excess Liabilities          Primary   
$35MM    AEGIS    X0012A1A06 1st Excess    $100MM xs $35MM    EIM    250162-06GL
2nd Excess    $25MM xs $135MM    Aegis Syndicate (Aon Limited)    WE0600136 3rd
Excess    $150MM xs $160MM    XL (Aon Bermuda) —100mm plo 150mm xs 160mm   
BM00022138L106A       Zurich (Aon Bermuda) —50mm plo 150mm xs 160mm   
ZGEB-0112L 4th Excess    $200MM xs $310MM    OCIL — Bermuda 150mm p/o 200mm xs
310mm    U920032-0705       Zurich (Aon Bermuda) —25mrn plo 200mm xs 310mm   
ZGEB-0 1 12L       Westchester (Swett & Crawford)-25mm p/o 200mm xs 310mm   
G22035265001 Property Program          OIL Property    $250MM    OIL Insurance
Limited    2003-262 Property XS OIL Wrap    $200MM    Birmingham Fire Insurance
Company of PA    ARS4564       SR International Business Insurance Co. Ltd.
through Aon Limited          Commonwealth Insurance Company    Terrorism   
$200MM    Underwriters at Lloyd’s through Aon Limited    E05RQ2598900

 

S-49

--------------------------------------------------------------------------------

Section 3.22

REGULATORY MATTERS

 

(a) The December 31, 2004 and December 31, 2005 balance sheets in the FERC Form
2s require an adjustment to reduce deferred taxes (account 283) and goodwill
(account 186) by $17.3MTVI. These amounts do not affect the GAAP financial
statements

 

(b)   1.      TPC, Docket No. 1NO2-6-000, (Order to Respond arising from TPC’s
2001 financing)

 

  2. TPC, Docket No. RP97-288-000 (negotiated rate filing for Red Rock Expansion
Project contracts)

 

  3. TPC, Docket No. RPO4-214, (Cross Timbers Reservation charge crediting)

 

  4. TPC, Docket No. CP06-59, (Accounting filings regarding PVR Midstream asset
sale)

 

  5. TPC, Docket No. PF06-4-000, Request for Pre-Filing Review Determination
(Phoenix Project)

 

  6. As a result of a rate settlement in FERC Docket No. RP95-271, et al., TPC
is obligated to prepare and file an NGA Section 4 rate case for rates to be
effective November 1, 2006.

 

S-50

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Section 3.23(c)

INTERNAL CONTROLS

None.

 

S-51

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Section 3.24

HEDGING

Section 3.7(a), items #1 and #2 under Gas Contracts of the CCE Disclosure Letter
is incorporated herein by reference.

 

S-52

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Section 3.25

BANK ACCOUNTS; POWERS OF ATTORNEY

 

Bank Accounts

  

Power of Attorney

Chase (Syracuse) - Account ##

Controlled Disbursement

   Bond, Robert Chanley, Earl Geaccone, Tracy Hawkins, Don Kinney, Katherine
Lefelar, Gary Marshall, Richard McEllin, David Murray, Douglas Simon, Mary
Smith, Rick Whippo, Jeffrey

JPMorgan Chase

Right of Way Drafts — Account #

Controlled Disbursement

  

Bond, Robert Ciccariella, Mark Cloud, Richard Fannan, Michael Fuentes, Peter
Fuentes, Rodney Gleffe, Lawrence Kelly, Sheri

Lefelar, Gary

Lyons, Steven Marshall, Richard McNickol, Daniel Piwko II, Ronald Sutherland,
Judy Trepl, Paulette Westbrook, Roger

 

S-53

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JPMorgan Chase    Bond, Robert Working Fund - Account #    Chanley, Edwin
Controlled Disbursement    Hawkins, Don    Kinney, Katherine Lefelar, Gary
Marshall, Richard McEllin, David Murray, Douglas Simon, Mary Whippo, Jeffrey
Wachovia Securities    Bond, Robert Money Market Sales - Account #    Geaccone,
Tracy    Lefelar, Gary    Marshall, Richard    McLaughlin, Michael Wachovia
(BlackRock)    Bond, Robert

Money Market - Account #

   Geaccone, Tracy    Lefelar, Gary    Marshall, Richard    McLaughlin, Michael
JPMorgan Chase    Bond, Robert Wire - Account #    Lefelar, Gary    Marshall,
Richard

 

S-54

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Section 3.26

GAS IMBALANCES

TPC - Summary of OBA Balances

As of June 30, 2006

Receivable Balances

 

Operator

   Dollars    Volume   

Imbalance Type

Frontier Field Services LLC

   $ 340,769       Dollar Valued

Amarillo Nat Gas

   $ 269,072       Dollar Valued

Crosstex Energy Services

   $ 199,798       Dollar Valued

Williams Field Services

   $ 184,024       Dollar Valued - monthly cash out

Red Cedar Gathering

   $ 176,609    30,984    Volumetric **

Panhandle Eastern Pipeline

   $ 164,291    28,823    Volumetric **

Connect Energy Services

   $ 135,633       Dollar Valued - monthly cash out

Jumbo American Petroleum

   $ 120,030       Dollar Valued

TEPPCO Partners, LP

   $ 107,496       Dollar Valued - monthly cash out

Northern Natural Gas

   $ 106,459       Dollar Valued - monthly cash out

New Mexico Nat Gas

   $ 93,917       Dollar Valued - monthly cash out

Southern California Gas Co

   $ 85,865    15,064    Volumetric **

Dominion Gas Ventures

   $ 82,569       Dollar Valued

Plains Gas Farmers Co-Op

   $ 69,883       Dollar Valued - monthly cash out

West Texas Gas Inc

   $ 57,825       Dollar Valued

Northwest Pipeline

   $ 39,541    6,937    Volumetric **

PNM Gas Services

   $ 31,488       Dollar Valued

Lonestar Gas Company

   $ 29,161    5,116    Volumetric **

Seven M Gas

   $ 19,958       Dollar Valued

Southern Star Central Gas PL

   $ 19,146    3,359    Volumetric **

Elm Ridge Resources

   $ 11,760       Dollar Valued

Devon Energy Production

   $ 11,586       Dollar Valued - monthly cash out

Oasis Pipe Line Company

   $ 9,461       Dollar Valued

Mewbourne Oil Company

   $ 8,390       Dollar Valued

Exco Resources

   $ 7,844       Dollar Valued - monthly cash out

Mid-America Pipeline

   $ 4,760    835    Volumetric **

Giant Industries Arizona

   $ 2,373       Dollar Valued

Total Receivable Balances

   $ 2,389,709      

 

S-55

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TPC Summary of OBA Balances

As of June 30, 2006

Payable Balances

 

Operator

   Dollars     Volume    

Imbalance Type

Strat Land Exploration

   $ (260,015 )      Dollar Valued

Duke Energy Field Sery LP

   $ (236,724 )      Dollar Valued

ANR Pipeline

   $ (224,038 )      Dollar Valued

Southern Union Gas Services, LTD

   $ (219,081 )      Dollar Valued

Agave Energy Co

   $ (218,108 )      Dollar Valued

Enterprise Texas Pipeline

   $ (212,793 )      Dollar Valued - monthly cash out

Navajo Tribal Utility Authority

   $ (161,911 )      Dollar Valued

Calpine Energy Services

   $ (132,851 )      Dollar Valued

OneOk Westex Transmission

   $ (127,719 )      Dollar Valued

Enterprise Field Servies LLC

   $ (111,017 )      Dollar Valued - monthly cash out

Regency Gas Services

   $ (89,422 )      Dollar Valued

E New Mexico Gas Accoc

   $ (67,915 )      Dollar Valued

Questar Southern Trails Pipeline

   $ (49,411 )      Dollar Valued - monthly cash out

UNS Gas Inc

   $ (69,803 )      Dollar Valued

TransColorado Gas Transmission

   $ (32,898 )      Dollar Valued

State of Texas

   $ (29,805 )      Dollar Valued

Bettis, Boyle, Stovall

   $ (26,760 )      Dollar Valued

Unocal Keystone Gas

   $ (25,000 )    (4,386 )    Volumetric **

EOG Resources Inc

   $ (17,476 )      Dollar Valued

BP America Production

   $ (17,425 )    (3,057 )    Volumetric **

SW Cheese

   $ (12,101 )      Dollar Valued

Red Willow Mid-Continent LLC

   $ (12,076 )      Dollar Valued - monthly cash out

Natural Gas Pipeline Company

   $ (10,963 )      Dollar Valued

El Paso Natural Gas

   $ (9,730 )    (1,707 )    Volumetric **

SW Gas Transmission

   $ (2,967 )      Dollar Valued - monthly cash out

PPC Energy LP

   $ (1,951 )      Dollar Valued

WTG Gas Marketing

   $ (1,611 )      Dollar Valued

Atmos Energy

   $ (743 )      Dollar Valued - monthly cash out

Pacific Gas and Electric Company

   $ (125 )    (22 )    Volumetric **

Total Payable Balances

   $ (2,382,437 )     

Total Net Imbalances

   $ 7,272       

 

**

The volumetric balances at June 30, 2006 were valued at $5.70.

 

S-56

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Section 5.1(a)

CONDUCT OF BUSINESS

1. As a result of a rate settlement in FERC Docket No. RP95-271, et al., TPC is
obligated to prepare and file an NGA Section 4 rate case for rates to be
effective November 1, 2006.

2. TPC may do all things necessary, including entering into all appropriate
agreements and making all appropriate regulatory filings, for the construction
and completion of the proposed Phoenix Expansion Project, substantially as
approved by the Executive Committee of CCE by written consent on August
            , 2006.

 

3. CCE may pay off all Existing TW Holdings Debt as per this Agreement.

4. TPC intends to sell a group of servers and associated computer equipment that
is shared by TPC and its Affiliates, for the net book value, to one of its
Affiliates. The TPC net book value of the group of servers on June 30, 2006 was
$783,342. This transaction shall not impact the Net Working Capital Amount for
purposes of this Agreement.

 

S-57

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Section 5.1(b)

CONDUCT OF BUSINESS

Section 5.1(a) of the CCE Disclosure Letter is incorporated herein by reference.

 

S-58

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Section 5.1(b)(iv)

CONDUCT OF BUSINESS

Section 3.12(a), Item #10 of the CCE Disclosure Letter is incorporated herein by
reference.

 

S-59

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Section 5.1(b)(xii)(C)

CONDUCT OF BUSINESS

None.

 

S-60

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Section 5.5(g)

SHARED SERVICE EMPLOYEES

See attached Shared Services Chart.

 

S-61

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Section 5.11

TRADEMARKS

 

Mark

  

Registration Serial No.

  

Registration Owner

Transwestem    0750308    Transwestem Pipeline Company    72/112505    Logo (TW
with Flame)    0734713    Transwestem Pipeline Company    72112506   

 

S-62

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Section 6.3(e)

CCE CONSENTS

 

1. Consent of the Missouri Public Service Commission.

 

2. Consent of the Massachusetts Department of Telecommunications and Energy.

 

3. Consent required under the Bridge Loan Agreement, dated as of March 1, 2006,
by and among Southern Union Company and Enhanced Service Systems, Inc., as the
Borrowers, and certain Banks party thereto.

 

4. Consent required under the Fourth Amended and Restated Revolving Credit
Agreement dated as of September 29, 2005, as amended by the First Amendment
effective as of February 27, 2006, by and among Southern Union Company as the
Borrower and the Banks named therein.

 

S-63

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Exhibit B

Transition Services Agreement Term Sheet

CCE Holdings, LLC (“Providing Company”) and Energy Transfer Partners, L.P.,
(“Receiving Company”) shall enter into a Transition Services Agreement (“TSA”)
on the Closing Date, as that term is defined in the Redemption Agreement by and
between Providing Company and Receiving Company. The TSA shall specify terms and
conditions substantially similar to the following:

1. General: The Providing Company agrees to provide, or cause to be provided, to
the Receiving Company the transition services for Transwestern Pipeline Company,
LLC (“TPC”) as set forth in Paragraph 17 below on the terms and conditions
described herein. The Receiving Company agrees to compensate the Providing
Company for the transition services at an agreed upon price, as set forth in
Paragraph 4.

2. Additional Services: The Parties agree to work in good faith to provide any
additional transition services reasonably requested by the other Party.

3. Term of TSA: The TSA shall terminate one year after the Closing Date;
provided, however, that the term may be extended (i) with respect to witness
consulting services related to the TPC Rate Case as contemplated by paragraph
6(c), until such time as an order resolving the TPC Rate Case is determined to
be final and nonappealable and (ii) with respect to the IT services described in
Paragraph 17, until such time with respect to each IT service as specifically
set forth in the migration plan developed by the parties. Following the
execution of the Redemption Agreement, the parties shall meet at mutually
agreeable times and work together in good faith to develop an IT migration plan
in order to transition the IT functions reasonably necessary for TPC to function
independently of [CCES and PEPL] with a goal of completing this IT transition
within 12 months after the Closing Date. Individual transition services may be
terminated by the Receiving Company by providing thirty (30) days prior written
notice to Providing Company.

4. Payment Terms: The Receiving Company shall pay the Providing Company for the
cost of providing all transition services based on the Providing Party’s actual
cost incurred in performing, or causing to be performed, the transition services
specified in Paragraph 17 below; provided that, in the event that the term of
the TSA is extended as provided in Paragraph 3 above, the Receiving Company
shall pay the Providing Party for providing the transition services based on the
Providing Party’s actual cost of providing the transition services. The costs
shall include the fully loaded cost of labor as documented using timesheets, any
third party costs, and all allocated costs consistent with Providing Company’s
internal cost allocation practices, provided that in no event shall costs
include any allocation of federal income taxes. Providing Company shall bill
Receiving Company for transition services on a monthly basis. The Receiving
Company shall pay the Providing Company its calculated costs for all transition
services invoiced within thirty (30) days of receipt of an invoice.

5. Books and Records; Audit Rights: The Providing Company shall keep books and
records that appropriately document charges for transition services rendered
under the TSA. Receiving Company shall have audit rights appropriate to confirm
that all billings are for transition services and are otherwise consistent with
the TSA.

--------------------------------------------------------------------------------

6. Performance Standards; Role of Providing Company:

a. Performance Standards: With respect to any service provided hereunder by
Providing Company, or any service which Providing Company causes to be provided
hereunder, Providing Company will use, or cause to be used, the same degree of
diligence, care and economy as it would in conducting such services for its
interstate pipeline companies.

b. Objectives: Providing Company will cooperate with Receiving Company in the
transition of TPC to new ownership contemplated under the Redemption Agreement.
Providing Company will make reasonable accommodations for training and support
of Receiving Company personnel or their designees to conduct the transition
services set forth in Paragraph 17 below..

c. Regulatory Matters: Providing Company acknowledges that, after the Closing
Date, a number of critical regulatory filings related to the TPC Rate Case must
be made, along with the performance of a number of ancillary duties, including
but not limited to stakeholder meetings, witness preparation, and possible
hearings. After the Closing Date, Providing Company shall make reasonably
available to Receiving Company, upon its written request, any employee of
Providing Company or its Affiliates whose assistance or participation is
reasonably necessary for the TPC Rate Case in order to prepare, prosecute and/or
defend the TPC Rate Case.

d. Witness/consultation services: Providing Company shall make available, to
Receiving Company, Providing Company’s then-current officers, directors and
employees as witnesses and/or consultants to the extent that (i) such persons
may reasonably be required by Receiving Company in connection with the TPC Rate
Case, or in connection with any investigation or complaint involving or
affecting TPC as of the Closing Date and (ii) there is no conflict between
Receiving Company and its Affiliates, on the one hand, and Providing Company and
its Affiliates, on the other hand, in the TPC Rate Case, investigation or
complaint proceedings or in the positions either Party has taken or is
reasonably likely to take in the foreseeable future.

e. [intentionally left blank]

f. Independent Parties: In providing transition services under the TSA,
Providing Company is acting as an independent contractor. Except as expressly
provided in the TSA, neither Party undertakes to perform any obligation of the
other, whether regulatory or contractual, or to assume any responsibility for
the other Party’s business or operations. Notwithstanding any provision of the
TSA to the contrary, the TSA shall only be construed as establishing a contract
between unrelated business entities for the provision and purchase of certain
services and shall not be deemed to create a partnership, joint venture, agency
or any other type of joint relationship between the Parties.

7. Role of Receiving Company: On and after the Closing Date and notwithstanding
the existence of the TSA, Receiving Company shall have controlling authority
over TPC, and will make all material decisions concerning the business and
operations of TPC. Upon consultation with Providing Company, Receiving Company
shall assure that decisions are made, requests are responded to and questions
are resolved on a timely basis such that Providing Company may accomplish its
obligations in a timely manner.

 

- 2 -

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8. Limitation of Liability and Indemnities: Receiving Company shall fully
indemnify Providing Company and its Affiliates as to all third party claims,
costs and liabilities to third parties associated with the transition services.
Providing Company and its Affiliates shall only be liable to Receiving Company
in the event of gross negligence or willful misconduct in providing the
transition services under the TSA and Providing Company’s liability shall in any
event be limited to the actual payments received for transition services.
Neither Providing Company or Providing Company’s Affiliates nor Receiving
Company or Receiving Company’s Affiliates, nor their respective officers,
directors, agents, employees, successors or assigns, shall be liable to the
other Party or their Affiliates and their officers, directors, agents,
employees, successors or assigns, for any incidental, punitive, special,
indirect, multiple or consequential damages connected with or resulting from
performance or non-performance of the TSA.

9. Good Faith Cooperation; Consents: The Parties will use good faith efforts to
cooperate with each other in all matters relating to the provision and receipt
of transition services. Subject to the other provisions of the TSA, such
cooperation shall include exchanging information, providing electronic access to
systems used in connection with the transition services to the extent systems
are designed and configured to permit such access, and obtaining all consents,
licenses, sublicenses or approvals necessary to permit such party to perform its
obligations. The costs of obtaining consents, licenses, sublicenses or approvals
shall be the responsibility of Receiving Company.

10. Proprietary Software: Providing Company will provide, or cause to be
provided, a license to Receiving Company to utilize proprietary software and
applications currently utilized by TPC and owned by Southern Union, CCES or
their wholly-owned Affiliates.

11. Third Party Software Consents: At the expense of the Receiving Company,
Providing Company will cooperate with Receiving Company to seek consents,
waivers or approvals necessary to allow Providing Company to utilize third party
software to provide transition services to Receiving Company during the
transition period. Notwithstanding anything herein to the contrary, if the
consents, waivers, approvals, or standstill agreements are not obtained, or are
not reasonably satisfactory to Providing Company, then Providing Company shall
not be obligated to utilize Providing Company’s third party software for the
benefit of Receiving Company or to provide the related transition services.

12. Force Majeure: The Providing Company shall not be liable for any failure or
delay in performance under the TSA to the extent such failure or delay is caused
by forces beyond the Providing Company’s reasonable control and occurs without
Providing Company’s fault or gross negligence; including, without limitation,
failure of suppliers, failure of vendor to support current software/hardware
version, failure of subcontractors, lack of availability of necessary employee
resources, and failure of carriers, provided that, as a condition to the claim
of non-liability, the Providing Company shall provide the Receiving Company with
prompt written notice, with full details following the occurrence of the cause
relied upon. All obligations to provide a specific transition service that are
delayed under this clause, shall be extended for that specific transition
service only by a period equal to the term of the resultant delay to the extent
the cause for the failure of delay is reasonably subject to remedy.

 

- 3 -

--------------------------------------------------------------------------------

13. Assignment: The TSA may not be assigned (including by operation of law) by
any Party without the prior written consent of the other Party, and any
purported assignment, unless so consented to, shall be void and without effect.
Notwithstanding the foregoing, Providing Company may assign all or part of it
duties under this Agreement to any of its Affiliates without the prior written
consent of the Receiving Company; provided that no assignment or delegation
shall relieve the Providing Company of its obligations hereunder. Providing
Company may, in the ordinary course of business or as may be deemed best
practice under the circumstances, subcontract the performance of certain aspects
of this TSA to a third party consultant acting under the supervision of
Providing Company; provided, however, that any decision to subcontract, to an
Affiliate or third party, any transition service(s) related to the Regulatory
Matters must be reviewed and given prior authorization by the Receiving Party,
which authorization shall not be unreasonably denied.

14. Confidentiality:

a. Possession, degree of care: The TSA and all Confidential Information provided
under or with respect to the services described in the TSA shall be subject to a
comprehensive confidentiality agreement. Each Party acknowledges that the other
possesses and, in carrying out the TSA, will possess information that has been
developed or received by it or its Affiliates that is not in the public domain
and is considered Confidential Information. The term “Confidential Information”
does not include information that (i) is already in the receiving party’s
possession, provided that such information is not known to be subject to another
confidentiality agreement with or other obligation of secrecy, or fiduciary duty
of confidentiality, to or any representative of the party providing such
Confidential Information, (ii) becomes generally available to the public other
than as a result of a disclosure by the receiving party or its representatives,
or (iii) becomes available to the receiving party on a non-confidential basis
from a source other than the providing party or its representatives, provided
that such source is not known by the receiving party to be bound by a
confidentiality agreement with or other obligation of secrecy, or fiduciary duty
of confidentiality, to providing party or any of its representatives. For
purposes of this letter agreement, the term “representatives” shall include
directors, officers, partners, employees, affiliates, agents, advisors,
including, without limitation, counsel, financial advisors, accountants of, or
to, .

Each Party will use at least the same degree of care to prevent disclosing to
third parties the Confidential Information as it employs to avoid unauthorized
disclosure, publication or dissemination of its own information of a similar
nature. Neither Party will make any use or copies of the confidential
information of the other Party except as contemplated by the TSA.

b. Disclosure notice: A Party shall not be considered to have breached its
obligations under the TSA for disclosing confidential information if such
disclosure is required to satisfy any legal requirement of a competent court or
governmental authority, provided that, promptly upon receiving any such request
and to extent that it may legally do so, such Party advises the other Party
promptly and, to the extent reasonably practicable, prior to making such
disclosure in order that the other Party may interpose an objection to such
disclosure, take action to assure confidential handling of the confidential
information, or take such other action as it deems appropriate to protect the
confidential information.

 

- 4 -

--------------------------------------------------------------------------------

c. Destruction of confidential information: Upon the termination or expiration
of the TSA or at any time requested by a Party consistent with its duties under
the TSA and the Redemption Agreement; each Party shall return or destroy (and
certify the destruction) at Receiving Company’s option, all documentation in any
medium that contains, refers, to, or relates to the Confidential Information of
the requesting Party. With respect to the destruction of electronic records, a
Party shall be deemed to be in compliance with this Paragraph if it uses
reasonable efforts to return or destroy such Confidential Information.

15. Compliance with Laws and Regulations: Both Parties shall comply with, and
will use reasonable efforts to require that their Affiliates and subcontractors
comply in all material respects with, applicable laws and regulations relating
to the transition services. In performing their respective obligations under the
TSA, neither Party will be required to undertake any activity that would violate
any applicable laws or regulations.

16. Governing Law: The TSA will be governed by and construed in accordance with
the laws, other than choice of law rules, of the State of New York.

17. List of transition services that will be provided to Receiving Company:

I. Operations & Engineering

 

  A) Technical Expertise – assistance related to pipeline safety, measurement,
compression and prime movers, environmental compliance, right of way,
engineering and construction, and safety

 

  B) Pipeline integrity/corrosion control/engineering records

 

  C) Purchasing/supply management

 

  D) Contract management

II. Accounting/Tax

 

  A) Taxes other than income for calendar year 2006

 

  B) Credit services

 

  C) Oracle financial system support

 

  D) Accounts payable support/vendor maintenance

III. Regulatory & Legal

 

  A) TPC Expansion Projects

 

  B) TPC Rate Case, including witness and/or consultation services

 

  C) General regulatory filings, proceedings or matters

 

  D) Compliance advice

 

- 5 -

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IV. Information Technology

 

  A) Systems – financial, treasury, gas control, SCADA and gas measurement,
billing, customer, asset management, geographic information systems and other
operations systems

 

  B) Telecommunications

 

  C) Hardware

 

  D) Systems/software

 

  E) Network and desktop

 

  F) Disaster recovery

 

  G) Data center, including all hardware, web-site, site administration and IT
support needed to maintain and continually update FERC-required Informational
Postings

 

  H) Electronic Data Interchange support

V. Office space

VI. Data Storage/Retrieval

VII. Intellectual Property

Providing Company and its Affiliates will provide a temporary license to
Receiving Company to use the trademarks currently utilized by TPC.

18. List of services that will not be provided to Receiving Company

Treasury/cash management/lockbox

Financial reporting

Internal controls

Human resources, payroll and benefits

Corporate legal

Governmental affairs

Litigation management

Corporate governance functions

Internal audit

19. Performance Covenant. Panhandle Eastern Pipe Line Company, LP hereby
covenants, to the extent permitted by applicable law, to cause Providing Company
to perform the duties and obligations of Providing Company hereunder.

 

- 6 -

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Exhibit C

 

 

 

SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

CCE HOLDINGS, LLC

dated as of                     , 2006

 

 

 

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SECOND AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

CCE HOLDINGS, LLC

This Second Amended and Restated Limited Liability Company Agreement of CCE
Holdings, LLC, a Delaware limited liability company (the “Company”), is entered
into as of this      day of                     , 2006, by and between Energy
Transfer Partners, L.P., a Delaware limited partnership, CCE Acquisition, LLC, a
Delaware limited liability company, and CCEA Corp., a Delaware corporation.

W I T N E S S E T H:

WHEREAS, the Certificate of Formation of the Company was filed with the
Secretary of State of Delaware on May 14, 2004, in accordance with the Delaware
Limited Liability Company Act;

WHEREAS, the parties hereto are the sole members of the Company; and

WHEREAS, the parties hereto desire to amend and restate the limited liability
company agreement of the Company as set forth herein in order to provide for the
manner in which the Company shall be governed and operated subsequent to the
date hereof; and

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

ARTICLE I.

DEFINITIONS

1.1 Defined Terms. The following terms have the meanings hereinafter indicated
whenever used in this Agreement with initial capital letters:

“Accepting Member” shall have the meaning specified in Section 5.1(b)(i).

“Act” shall mean the Delaware Limited Liability Company Act, at Del. Code Ann.,
Title 6, Section 18-101, et seq., as amended.

“Adjusted Capital Account” shall mean, with respect to any Member, the balance
in such Member’s Capital Account as of the end of the relevant Fiscal Year,
after giving effect to the following adjustments:

(a) Crediting to such Capital Account any amounts that such Member is obligated
to restore pursuant to this Agreement or is deemed to be obligated to restore
pursuant to Regulations Sections 1.704-1(b)(2)(ii)(b)(3), 1.704-1(b)(2)(ii)(c),
1.704-2(g)(1) and 1.704-2(i)(5); and

--------------------------------------------------------------------------------

(b) Debiting to such Capital Account the items described in Regulations Sections
1.704-1(b)(2)(ii) (d)(4), (5) and (6).

The foregoing definition of “Adjusted Capital Account” is intended to comply
with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

“Adjusted Capital Account Deficit” shall mean, with respect to any Member, the
deficit balance, if any, in such Member’s Adjusted Capital Account.

“Administrative Services Agreement” shall mean the Amended and Restated
Administrative Services Agreement substantially in the form of Exhibit C or in
such other form as shall be approved by the Executive Committee.

“Administrative Services Provider” shall mean the Person that from time to time
shall be a party to the Administrative Services Agreement with the Company.

“Affiliate” shall mean, with respect to a Person, another Person that directly
or indirectly controls, is controlled by or is under common control with such
first Person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to vote a majority of the securities having voting
power for the election of directors of such Person or otherwise to direct or
cause the direction of the management and policies of that Person, whether
through ownership of voting securities, by contract or otherwise.

“Aggregate Percentage Interest” shall mean, with respect to each Member, its
proportionate interest, expressed as a percentage, in the residual Profits,
Losses and distributions of the Company to which the Members are entitled. The
Aggregate Percentage Interests of the Members are set forth on Exhibit A.

“Agreement” shall mean this Amended and Restated Limited Liability Company
Agreement, including all exhibits and schedules attached hereto, as amended,
modified or otherwise supplemented, from time to time.

“Asset Value” shall mean, with respect to any asset of the Company (other than
cash), the adjusted basis of such asset as of the relevant date for federal
income tax purposes, except as follows:

(a) the initial Asset Value of any asset (other than cash) contributed by a
Member to the Company shall be the fair market value of such asset (as
determined by the Members) at the time of contribution;

(b) the Asset Values of all Company assets (including intangible assets such as
goodwill) shall be adjusted to equal their respective fair market values as of
the following times:

(i) the acquisition of an additional interest in the Company by any new or
existing Member in exchange for a Capital Contribution;

 

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(ii) the distribution by the Company to a Member of an amount of money or
Company property as consideration for an interest in the Company; or

(iii) the liquidation of the Company within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g);

(c) the Asset Value of any Company asset distributed in kind to any Member shall
be adjusted to equal the gross fair market value of such asset on the date of
distribution, as determined by the Members;

(d) the Asset Values of any Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m); provided that Asset Values shall not
be adjusted pursuant to Code Section 743(b) to the extent that the Members make
a corresponding adjustment under subparagraph (b)(ii); and

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

The foregoing definition of “Asset Value” is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(iv) and shall be interpreted and
applied consistently therewith.

“Bankruptcy Event” shall be deemed to occur with respect to any Person if
(a) such Person shall institute a voluntary case seeking liquidation or
reorganization under Bankruptcy Law, or shall consent to the institution of an
involuntary case thereunder against it; (b) such Person shall file a petition or
consent or shall otherwise institute any similar proceeding under any other
applicable Federal or state law, or shall consent thereto; (c) such Person shall
apply for, or by consent there shall be an appointment of, a receiver,
liquidator, sequestrator, trustee or other officer with similar powers for
itself or any substantial part of its assets; (d) such Person shall make an
assignment for the benefit of its creditors; (e) such Person shall admit in
writing its inability to pay its debts generally as they become due; (f) an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under Bankruptcy Law or any similar proceedings shall be commenced
against such Person under any other applicable Federal or state law and (i) the
petition commencing the involuntary case is not dismissed within 60 days of its
filing, (ii) an interim trustee is appointed to take possession of all or a
portion of the property, and/or to operate all or any part of the business of
such Person and such appointment is not vacated within 60 days, or (iii) an
order for relief shall have been issued or entered therein; (g) a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee or other officer having similar
powers of such Person or all or a part of its property shall have been entered;
or (h) any other similar relief shall be granted against such Person under any
applicable Federal or state law.

 

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“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.

“Business Day” shall mean any day that is neither a Saturday nor a Sunday nor a
legal holiday on which commercial banking institutions are authorized or
required by law, regulation or executive order to be closed in the States of New
York or Texas.

“Capital Account” shall mean, with respect to any Member (and without
duplication), the Capital Account maintained for such Member in accordance with
the following provisions:

(a) From time to time, the Capital Account of each Member shall be increased by
(i) the amount of any cash contributed by the Member to the Company, (ii) the
Asset Value (as determined by the Members) of any property contributed by the
Member to the Company (net of liabilities that the Company is deemed to have
assumed or taken subject to, under and pursuant to Section 752 of the Code), and
(iii) allocations to the Member of Profit (or items thereof) and other income
and gain pursuant to Section 7.1, including income and gain exempt from tax, and
income and gain described in Regulations Section 1.704-1(b)(2)(iv)(g), but
excluding items of income and gain described in Regulations
Section 1.704-1(b)(4)(i).

(b) The Capital Account of each Member shall be decreased by (i) the amount of
any cash distributed to such Member, (ii) the Asset Value (as determined by the
Members) of any property distributed to such Member (net of any liabilities that
such Member is deemed to have assumed or taken subject to, under and pursuant to
Section 752 of the Code), (iii) allocations to the Member of expenditures
described in Section 705(a)(2)(B) of the Code, and (iv) allocations to the
Member of Loss (or items thereof) and other loss and deductions pursuant to
Section 7.1, including loss and deduction described in Regulations
Section 1.704-1(b)(2)(iv)(g), but excluding items described in clause
(iii) above, tax items of loss and deduction described in Regulations
Section 1.704-1(b)(4)(i), and items of deduction described in Regulations
Section 1.704-1(b)(4)(iii).

(c) A single Capital Account shall be maintained for each Member, which Capital
Account shall reflect all allocations, distributions, or other adjustments
required by this definition with respect to the Membership Interest owned by
such Member.

(d) Upon any transfer of all or part of a Membership Interest as permitted by
this Agreement, the Capital Account (or portion thereof) of the transferor that
is attributable to the transferred interest (or portion thereof) shall carry
over to the transferee as prescribed by Regulations
Section 1.704-1(b)(2)(iv)(l).

(e) Notwithstanding anything to the contrary in this definition, it is the
intention of the Members that the Capital Accounts of the Members be maintained
strictly in accordance with the capital account maintenance requirements of
Regulations Section 1.704-1(b)(2)(iv), and that such Capital Accounts be
adjusted to the extent required by the provisions of such Regulations or any
successor provisions thereto.

“Capital Contribution” shall mean the total amount of money and the net fair
market value of property (as determined by the Executive Committee) contributed
by each Member to the Company pursuant to this Agreement.

 

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“Cash Flow” shall mean, with respect to any period, all cash received by the
Company (other than from the liquidation of any assets pursuant to Article X)
plus all cash withdrawn from reserves (as determined to be appropriate by the
Executive Committee or, if the Executive Committee does not approve the amount
of such reserves, no withdrawal from reserves will be made for such period),
less (a) all operating expenses of the Company (including amounts payable under
the Administrative Services Agreement but excluding capital expenditures),
(b) any amounts withheld by the Company in accordance with Section 6.2,
(c) additions to reserves made during such period (as determined to be
appropriate by the Executive Committee or, if the Executive Committee does not
approve the amount of such reserves, no addition to reserves will be made for
such period) and (d) all payments of interest and scheduled principal in respect
of Indebtedness of the Company.

“CCE” shall mean CCE Acquisition, LLC, a Delaware limited liability company, and
any of its Affiliates that are Members.

“Certificate” shall mean the Certificate of Formation of the Company.

“Citrus Corp.” shall mean Citrus Corp., a Delaware corporation.

“Class A Executive Committee Member” shall have the meaning specified in
Section 4.1(c).

“Class A Member” shall mean each Person listed on Exhibit A hereto and indicated
as such, its respective permitted successors and assigns, and any other Person
that is hereafter admitted as a Class A Member pursuant to Article VIII.

“Class A Membership Interest” shall mean a Class A Member’s entire interest in
the Company including such Class A Member’s right to share in the Profits and
Losses and distributions of the Company, and the Class A Member’s right to vote
or consent to, or otherwise participate in, any decision or action of or by the
Class A Members granted pursuant to this Agreement or the Act.

“Class A Percentage Interest” shall mean a Class A Member’s proportionate
interest, expressed as a percentage, in the residual Profits, Losses, and
distributions of the Company to which the Class A Members are entitled. The
Class A Percentage Interests of the Class A Members are set forth on Exhibit A.

“Class A Prohibited Transferee” shall mean any Persons designated on Exhibit B
as a Class A Prohibited Transferee and any Affiliate or successor thereof.

“Class B Executive Committee Member” shall have the meaning specified in
Section 4.1(c).

“Class B Member” shall mean each Person listed on Exhibit A hereto and indicated
as such, its respective permitted successors and assigns, and any other Person
that is hereafter admitted as a Class B Member pursuant to Article VIII.

 

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“Class B Membership Interest” shall mean a Class B Member’s entire interest in
the Company including such Class B Member’s right to share in the Profits and
Losses and distributions of the Company, and the Class B Member’s right to vote
or consent to, or otherwise participate in, any decision or action of or by the
Class B Members granted pursuant to this Agreement or the Act.

“Class B Percentage Interest” shall mean a Class B Member’s proportionate
interest, expressed as a percentage, in the residual Profits, Losses, and
distributions of the Company to which the Class B Members are entitled. The
Class B Percentage Interests of the Class B Members are set forth on Exhibit A.

“Class B Prohibited Transferee” shall mean any Persons designated on Exhibit B
as a Class B Prohibited Transferee and any Affiliate or successor thereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and any successor statutory provisions.

“Company” shall have the meaning assigned thereto in the preamble to this
Agreement.

“Company Minimum Gain” shall mean the amount determined in accordance with
Regulations Section 1.704-2(d) by (a) computing with respect to each Nonrecourse
Liability of the Company the amount of income or gain, if any, that would be
realized by the Company if it disposed of the property securing such Nonrecourse
Liability in full satisfaction thereof, and (b) aggregating all separate amounts
so computed.

“Company Subsidiaries” shall mean CrossCountry, CrossCountry Alaska, LLC,
CrossCountry Energy Services, LLC, Transwestern Holding Company, LLC,
Transwestern and CrossCountry Citrus, LLC; provided, however, that none of the
foregoing shall be considered a “Company Subsidiary” at such time as the Company
shall have disposed of its ownership interests therein.

“Contribution Offer Expiration Date” shall have the meaning specified in
Section 5.1(b)(i).

“Contribution Offer Notice” shall have the meaning specified in Section
5.1(b)(i).

“CrossCountry” shall mean CrossCountry Energy, LLC, a Delaware limited liability
company.

“Credit Facilities” shall mean such loan agreements and instruments to which the
Company or any Company Subsidiary shall be a party from time to time.

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

 

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the federal income tax depreciation, amortization or other cost recovery
deduction for such Fiscal Year or part thereof bears to such adjusted tax basis.
If such asset has a zero adjusted tax basis, the depreciation, amortization or
other cost recovery deduction for each Fiscal Year shall be determined under a
method selected by the Members.

“EBITDA” shall mean for any period the consolidated net income of the Company
determined in accordance with GAAP plus (a) its reported interest expense, plus
(b) its reported income tax expense, plus (c) the amount it reported as
depreciation of assets, plus (d) the amount it reported as the amortization of
intangibles, plus (e) 50% of Citrus Corp.’s reported interest expense, plus
(f) 50% of the amount Citrus Corp. reported as income tax expense, plus (g) 50%
of the amount Citrus Corp. reported as depreciation of assets, plus (g) 50% of
the amount Citrus Corp. reported as the amortization of intangibles, in each
case as determined in accordance with GAAP.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated there under.

“ETP” shall mean Energy Transfer Partners, L.P., a Delaware limited partnership,
and any of its Affiliates that are Members.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Executive Committee” shall have the meaning specified in Section 4.1(a).

“Executive Committee Members” shall have the meaning specified in
Section 4.1(a).

“Fiscal Year” shall mean the taxable year of the Company, which initially shall
be the calendar year.

“GAAP” shall mean United States generally accepted accounting principles
consistently applied.

“Governmental Authority” shall mean any court, tribunal, agency, commission,
official or other instrumentality of the United States or any state or political
subdivision thereof.

“Indebtedness” shall mean, with respect to any Person, (A) all obligations for
borrowed money of the such Person, (B) all obligations for the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered, (C) the capitalized amount (determined in accordance with
GAAP) of all obligations such Person is required to pay or other amounts under
any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP, (D) all obligations for borrowed money secured by any lien upon or
in any property owed by such Person whether or not such Person has assumed or
become liable for the payment of such obligations for borrowed money and (E) all
obligations of the type described in any of clauses (A) through (D) above which
are guaranteed, directly or indirectly, or endorsed (otherwise than for
collection or deposit in the ordinary course of business) or discounted with
recourse by such Person.

 

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“Liquidating Trustee” shall have the meaning specified in the Act.

“Managing Member” shall mean the Member designated pursuant to Section 4.3.

“Material Regulatory Filing” shall mean any filing with any Governmental
Authority which, if determined adversely to the Company, would have a material
adverse effect on the business, assets or financial condition of the Company.

“Member Nonrecourse Debt” shall mean debt of the Company determined in
accordance with the principles of Regulations Section 1.704-2(b)(4).

“Member Nonrecourse Deductions” shall mean any and all items of loss, deduction
or expenditure (described in Section 705(a)(2)(B) of the Code) that, in
accordance with the principles of Regulations Section 1.704-2(i)(2), are
attributable to a Member Nonrecourse Debt.

“Members” shall mean each of the Persons set forth on Exhibit A and any other
Person that hereafter is admitted as a Member pursuant to Article VIII.

“Membership Interest” and “Membership Interests” shall mean, individually the
Class A Membership Interest or the Class B Membership Interest and,
collectively, the Class A Membership Interests and the Class B Membership
Interests, as the context requires.

“Minimum Gain Attributable to Member Nonrecourse Debt” shall mean that amount
determined in accordance with the principles of Regulations Sections
1.704-2(i)(3), (4) and (5).

“Nonrecourse Deductions” shall mean that amount determined in accordance with
Regulations Section 1.704-2(b)(1).

“Nonrecourse Liability” shall mean any liability of the Company treated as a
nonrecourse liability under Regulations Section 1.704-2(b)(3).

“Person” shall mean any individual, partnership, limited liability company,
corporation, trust or other entity.

“Profits” and “Losses” shall mean, for each Fiscal Year or other period, an
amount equal to the Company’s taxable income or loss for such Fiscal Year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

(a) Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profits and Losses shall be added to
such taxable income or loss;

 

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(b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses, shall be subtracted from such taxable income or loss;

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

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

(e) In lieu of depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such Fiscal Year or other period;

(f) To the extent an adjustment to any adjusted tax basis of any Company asset
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of a Member’s Membership Interest in the Company, the amount of the
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the
assets) from the disposition of the asset and shall be taken into account for
purposes of computing Profits and Losses; and

(g) Any items which are specially allocated pursuant to Section 7.1(c) shall not
be taken into account in computing Profits and Losses.

“Prohibited Transferee” shall mean those Persons set forth on Exhibit B and any
Affiliate or successor thereof.

“Rate Filing” shall mean any application, notice or other submission filed with
or otherwise delivered to any Governmental Authority relating to the
establishment of, or modification or supplement to, the rates, tariffs or
charges for services or commodities provided by any Company Subsidiary;
provided, however, that “Rate Filing” shall not include any of the foregoing
unless the intended or expected effect thereof is (i) to increase the revenues
of the applicable Company Subsidiary by more than 10% per annum, (ii) to
increase or decrease the rates chargeable for transportation of natural gas
through the applicable Company Subsidiary’s pipeline facilities by more than
10%, (iii) the offering by the applicable Company Subsidiary of a new service or
(iv) the expansion or addition of capacity of, or the increase in the pressure
of, the applicable Company Subsidiary’s pipeline facilities.

“Redemption Agreement” shall mean the Redemption Agreement, dated as of
September 14, 2006, between the Company and ETP.

 

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“Regulatory Allocations” shall have the meaning set forth in
Section 7.1(c)(vii).

“Regulations” shall mean any and all temporary and final regulations promulgated
under the Code, as amended from time to time (including corresponding provisions
of succeeding regulations).

“Securities Act” shall mean the Securities Act of 1933, as amended.

“SUG” shall mean Southern Union Company, a Delaware corporation.

“Tax Matters Member” shall mean the Member designated to serve as such pursuant
to Section 7.5.

“Third Party Purchaser” shall mean any Person (other than a Member or an
Affiliate of a Member) that has expressed an interest to purchase any of the
Class A Membership Interests or Class B Membership Interests.

“Third Party Purchaser Notice” shall have the meaning specified in Section 8.2.

“Transfer” shall mean any, direct or indirect, sale, assignment, gift,
hypothecation, pledge or other disposition, whether voluntary or by operation of
law (including through the state law conversion of the legal status of a
Member), of a Membership Interest or any portion thereof including as a result
of a sale or transfer of the equity interests in a Member or its direct or
indirect parent, but the term “Transfer” shall not include any sale or transfer
of equity interests in ETP or SUG.

“Transferee” shall mean any Person that receives a Membership Interest as the
result of a Transfer from a Transferring Member.

“Transferring Member” shall have the meaning specified in Section 8.2.

“Transwestern” shall mean Transwestern Pipeline Company, LLC.

1.2 Interpretative Matters. In this Agreement, unless otherwise specified or
where the context otherwise requires:

(a) the headings of particular provisions of this Agreement are inserted for
convenience only and will not be construed as a part of this Agreement or serve
as a limitation or expansion on the scope of any term or provision of this
Agreement;

(b) the singular shall include the plural and the plural shall include the
singular wherever appropriate;

(c) words importing any gender shall include other genders;

(d) the words “include,” “includes” or “including” shall be deemed to be
followed by the words “without limitation”;

 

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(e) the words “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement;

(f) references to “Sections”, “Articles”, “Exhibits” and “Appendices” shall be
to Sections, Articles, Exhibits and Appendices of or to this Agreement;

(g) references to any Person include the successors and permitted assigns of
such Person;

(h) the use of the words “or,” “either” and “any” shall not be exclusive;

(i) wherever a conflict exists between this Agreement and any other agreement,
this Agreement shall control but solely to the extent of such conflict;

(j) references to any agreement or contract, unless otherwise stated, are to
such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof; and

(k) the parties hereto have participated jointly in the negotiation and drafting
of this Agreement; accordingly, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party hereto by virtue of the authorship of any
provisions of this Agreement.

ARTICLE II.

ORGANIZATIONAL MATTERS

2.1 Formation. The Company has been formed and exists for the limited purposes
described herein and shall be governed by and operated in accordance with the
Act. The Members shall execute and the Managing Member shall make, or cause to
be made, all filings required by the Act or other applicable law with respect to
the formation and operation of the Company.

2.2 Name. The name of the Company is CCE Holdings, LLC.

2.3 Principal Place of Business. The principal place of business of the Company
shall be located at 5444 Westheimer Road, Houston, TX 77056. The Members may
change the principal place of business of the Company at any time and from time
to time.

2.4 Registered Office and Agent. The registered office of the Company shall be
located at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801 and
the registered agent for the Company at such office shall be The Corporation
Trust Company. The Executive Committee may change the registered office of the
Company or the registered agent for the Company at any time, and from time to
time.

2.5 Term. The term of the Company shall commence upon the filing of the
Certificate and shall continue until dissolved in accordance with Article X or
the Act.

 

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ARTICLE III.

BUSINESS OF THE COMPANY

3.1 Purpose. The business of the Company shall be to, directly and indirectly,
own and manage ownership interests in the Company Subsidiaries, and their
respective assets, and to engage in any business necessary or incidental
thereto.

ARTICLE IV.

MANAGEMENT OF COMPANY

4.1 Executive Committee.

(a) Establishment. There is hereby established a committee of Member
representatives (the “Executive Committee”) comprised of natural Persons (the
“Executive Committee Members”) having the authority and duties set forth in this
Agreement. Any decisions to be made by the Executive Committee shall require the
unanimous approval of the Executive Committee Members; provided, however, that
in the case of any action or decision by the Executive Committee relating to
(i) the commencement of any legal or arbitration proceedings against a Member or
an Affiliate thereof, (ii) entering into any transaction with a Member or any of
its Affiliates of the type referred to in Section 4.2(g) or (iii) the
enforcement or waiver of any rights of the Company under any material agreement
with a Member or any of its Affiliates, the Executive Committee Members
appointed by the Class of Membership Interests held by such Member (and
respecting which such Member is entitled to exercise voting rights as provided
in Section 4.2(a)(ii) and Section 4.2(a) (iii)) shall not participate in any
decisions by the Executive Committee in respect of such matters and such
Executive Committee Members shall be disregard for purposes of this
Section 4.1(a) and Section 4.2(d)(iv) to the extent of any Executive Committee
meetings or decisions relating to any such matters. Absent authority granted by
the Executive Committee, no Member or Executive Committee Member shall have the
power to act for or on behalf of, or to bind, the Company. At each meeting of
the Executive Committee, the Executive Committee shall designate a person to
preside over such meeting.

(b) Powers. The business and affairs of the Company shall be managed by or under
the direction of the Executive Committee, except as otherwise expressly provided
in this Agreement. The Executive Committee shall have the power on behalf and in
the name of the Company to carry out any and all of the objectives and purposes
of the Company contemplated by Section 3.1 and to perform all acts that the
Executive Committee may deem necessary or advisable in connection therewith.

(c) Composition of the Executive Committee and Appointment of Executive
Committee Members. The Executive Committee shall consist of four members, two of
whom shall be appointed by the Class A Members (the “Class A Executive Committee
Members”), and two of whom shall be appointed by the Class B Members (the “Class
B Executive Committee Members”). In addition, the Class A Members and the Class
B Members may appoint one or more alternates for the Class A Executive Committee
Members and the Class B Executive Committee Members, respectively, and each such
alternate shall have all of the powers of a Executive Committee Member in such
Executive Committee Member’s absence or inability to

 

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serve. The Class A Members shall have the power to remove any Class A Executive
Committee Member, and the Class B Members shall have the power to remove any
Class B Executive Committee Member. Any vacancy on the Executive Committee shall
be filled by the Class A Members if the vacancy shall be in respect of a Class A
Executive Committee Member, or by the Class B Members if the vacancy shall be in
respect of a Class B Executive Committee Member. The Class A Members shall
notify the Class B Members, and the Class B Members shall notify the Class A
Members, of their respective appointments or removals of Executive Committee
Members as provided in this Section 4.1(c). In addition to the Executive
Committee Members, the Class A Members and the Class B Members shall each be
entitled to appoint one individual who shall be entitled to attend each meeting
of the Executive Committee and receive all notices and other information
provided to the Executive Committee Members, but no such observer shall be
entitled to any other rights or privileges granted to the Executive Committee
Members hereunder or pursuant hereto. The Class A Members and the Class B
Members shall be entitled to remove and replace their respective Executive
Committee observers from time to time. The Class A Members shall notify the
Class B Members, and the Class B Members shall notify the Class A Members, of
their respective appointments or removals of their Executive Committee observers
as provided in this Section 4.1(c).

(d) Meetings of the Executive Committee. Regular meetings of the Executive
Committee shall be held at least four times in each Fiscal Year and may be held
at such place, within or without the State of Delaware, as shall from time to
time be determined by unanimous consent of the Executive Committee. Special
meetings of the Executive Committee may be called by or at the request of any
Executive Committee Member. Notice of each such regular or special meeting shall
be mailed to each Executive Committee Member, addressed to such Executive
Committee Member at his or her residence or usual place of business, at least
five days before the date on which the meeting is to be held, or shall be sent
to such Executive Committee Member at such place by personal delivery,
telephone, electronic mail or telecopier, not later than five days (or, in the
case of meetings held by telephone, one day) before the day on which such
meeting is to be held. Each such notice shall state the time and place of the
meeting and, as may be required, the purposes thereof.

(i) Any Executive Committee Member who is present at a meeting shall be
conclusively presumed to have waived notice of such meeting except when such
member attends for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened. Such Executive Committee Member shall be conclusively
presumed to have assented to any action taken unless his or her dissent shall be
entered in the minutes of the meeting or unless his or her written dissent to
such action shall be filed with the person acting as the secretary of the
meeting before the adjournment thereof or shall be forwarded by registered mail
to the Managing Member of the Company immediately after the adjournment of the
meeting. Such right to dissent shall not apply to any Executive Committee Member
who voted in favor of such action.

(ii) Executive Committee Members may participate in and act at any meeting of
the Executive Committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
Section 4.1(d) shall constitute presence in person at the meeting.

 

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(iii) Unless otherwise restricted by this Agreement or the Act, any action
required or permitted to be taken at any meeting of the Executive Committee may
be taken without a meeting if all the Executive Committee Members consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Executive Committee.

(iv) At each meeting of the Executive Committee, the presence of at least one
Class A Executive Committee Member and each Class B Executive Committee Member
shall constitute a quorum and be required for the transaction of business,
subject to the provisions of Section 4.1(a) in respect of decisions to be made
by the Executive Committee.

(e) Compensation of Executive Committee Members. Executive Committee Members
shall not receive any compensation from the Company for their services but may
be reimbursed for any expenses related to attendance at each meeting of the
Executive Committee.

4.2 Actions Requiring Executive Committee Approval The following actions by the
Company shall require the approval of the Executive Committee:

(a) commencing, or any other material action with respect to, a Bankruptcy Event
of the Company or of any Company Subsidiaries;

(b) transferring any assets of the Company to satisfy any liabilities of any of
the Members or their respective Affiliates (or any trade or business, whether or
not incorporated, that is treated as a single employer together with such Member
or its Affiliates (under section 414 of the Code or section 4001(b) of ERISA))
arising from ERISA;

(c) selling, exchanging, licensing as licensor, leasing as lessor, or disposing
of any assets of the Company or any Company Subsidiaries in excess of $30
million;

(d) engaging in, or acquiring any material assets related to, any business other
than the business historically conducted by CrossCountry with a value in excess
of $30 million, other than assets sold or exchanged in the ordinary course;

(e) redeeming any ownership interest in the Company;

(f) making any non-pro rata distribution of cash, income, assets or rights to
any Member, except to the extent permitted under this Agreement, and making any
other distribution not expressly permitted by Article VI hereof (other than the
distribution contemplated by Section 5.1(c) of the Redemption Agreement);

(g) entering into any material transactions (including purchases, sales or
leases of assets) by the Company or any Company Subsidiaries with or for the
benefit of a Member or an Affiliate thereof;

 

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(h) incurring or assuming any Indebtedness by the Company or any Company
Subsidiary in excess of $50 million in the aggregate, excluding the Indebtedness
incurred prior to the date hereof in connection with the acquisition of the
Company Subsidiaries by the Company;

(i) any repayment (other than (i) repayments in accordance with scheduled
maturity or which are otherwise mandatory pursuant to the terms of any document
to which the Company or a Company Subsidiary is a party and (ii) paydowns on any
revolving credit facility), voluntary prepayment or redemption of, or any
refinancing or other modification of the terms of, any indebtedness pertaining
to the Company or a Company Subsidiary;

(j) initiating any material legal proceedings or arbitration on behalf of the
Company or a Company Subsidiary, or agreeing to the settlement of any claim by
or against the Company or a Company Subsidiary with respect to claims in excess
of $3 million, or which includes requests for any material injunction, specific
performance or other equitable relief; provided, however, that if the vote of
the Executive Committee results in a tie, the Class A Executive Committee
Members shall prevail on any such votes relating solely to any Company
Subsidiary (other than Transwestern), or any entity owned by Citrus Corp. and
the Class B Executive Committee Members shall prevail on any such votes relating
solely to Transwestern;

(k) entering into any confession of a judgment in excess of $3 million against
the Company or a Company Subsidiary; provided, however, that if the vote of the
Executive Committee results in a tie, the Class A Executive Committee Members
shall prevail on any such votes relating solely to any Company Subsidiary (other
than Transwestern), or any entity owned by Citrus Corp. and the Class B
Executive Committee Members shall prevail on any such votes relating solely to
Transwestern;

(l) adopting each annual budget for the Company and each Company Subsidiary, and
any amendment or other modification to any such budget; provided, that if the
Executive Committee is unable to agree on the annual budget for any year for the
Company or any Company Subsidiary, the Company or such Company Subsidiary, as
the case may be, shall adopt an annual budget equal to the annual budget in
effect in the immediately preceding year, subject to the discretion of the
Managing Member to increase one or more line items by not more than 5% (and
subject to the limitation that the budgeted EBITDA for the new year shall not be
less than 90% of the budgeted EBITDA for the preceding year);

(m) the making of any Rate Filing or any Material Regulatory Filing with any
Governmental Authority by the Company or any Company Subsidiary, except to the
extent such filing is required to be made by applicable law; provided, however,
that if the vote of the Executive Committee results in a tie, the Class A
Executive Committee Members shall prevail on any such votes relating solely to
any Company Subsidiary (other than Transwestern) or any entity owned by Citrus
Corp. and the Class B Executive Committee Members shall prevail on any such
votes relating solely to Transwestern;

(n) implementing any material change in accounting policies or practices in
respect of the Company or any Company Subsidiary, in each case except to the
extent that such change is required to be made by GAAP or applicable law, or
terminating the engagement of the Company’s principal independent auditors; and

 

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(o) the entry into any new line of business by the Company.

4.3 Management of the Company.

(a) Managing Member. Day-to-day management of the Company in accordance with the
polices established, and direction given, by the Executive Committee from time
to time, and subject to the limitations provided elsewhere in this Agreement,
shall be the responsibility of a managing Member (the “Managing Member”). In
addition, the Managing Member shall provide to any Executive Committee Member
such additional information as such Executive Committee Member may reasonably
request from time to time to the extent that (i) such requested information
relates to the operation of the Company or any Company Subsidiary and (ii) the
Managing Member has such information or can acquire it without unreasonable
effort. Subject to the next following sentence, the Managing Member shall be
CCE. If at any time (x) CCE and its Affiliates shall cease to hold at least 80%
of the Class A Membership Interests, or (y) CCE or any of its Affiliates that is
a Member shall breach in any material respect any of its obligations under this
Agreement, Members holding not less than a majority of the Class B Membership
Interests (taking into the account the provisions of Section 4.4(a)(iii)) shall
have the right (but not the obligation) to designate a replacement Managing
Member by written notice to CCE, which replacement shall be effective
immediately or at such other time as shall be specified in such written notice
to CCE. In the case of any such replacement, CCE shall cooperate fully in the
transition to such new Managing Member.

(b) Administrative Services Agreement. Simultaneously with the execution of this
Agreement, the Company shall enter into the Administrative Services Agreement
with the Administrative Services Provider. Subject to the next following
sentence, the Administrative Services Provider shall be an Affiliate of CCE that
is designated by CCE and is qualified to perform the duties required of it under
the Administrative Services Agreement. Members holding not less than a majority
of the Class B Membership Interests shall have the right (but not the
obligation) to designate a replacement Administrative Services Provider (that
may be an Affiliate of ETP) by written notice to CCE and the then current
Administrative Services Provider, which replacement shall be effective
immediately or at such other time as shall be specified in such written notice
to CCE and the Administrative Services Provider, (i) upon the Administrative
Service Provider’s material breach of its obligations under the Administrative
Services Agreement, and the Administrative Service Provider’s failure to cure
such breach within 60 days following the Administrative Service Provider’s
receipt of written notice from the Company setting forth in reasonable detail
the relevant conduct or failure, (ii) upon any of the representations and
warranties of the Administrative Service Provider contained in the
Administrative Services Agreement proving to be materially false, incomplete or
misleading, and not reasonably subject to cure in a manner that will result in
no material harm to the Company, (iii) upon the Administrative Service Provider
committing a material violation of any law applicable to Company or any Company
Subsidiary, (iv) if SUG, or its Affiliates, cease to own beneficially at least a
majority of the Class A Membership Interests or (v) in the event of a failure by
the Company or any Company Subsidiary to pay principal or interest as and when
due under any credit facility (subject to applicable grace periods). It is
expressly understood and agreed that the foregoing provisions shall be in
addition to, and shall not otherwise limit, any other remedies that may be
available to the Company or any other Member (other than CCE or any of its
Affiliates) upon any breach of the Administrative Services Agreement by the

 

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Administrative Services Provider, CCE or any of its Affiliates. In the case of
any such replacement, CCE shall cause its Affiliate Administrative Services
Provider to cooperate fully in the transition to such new Administrative
Services Provider.

(c) Transwestern Matters. At the request of the Class B Member, representatives
of the Managing Member and the Class B Member shall meet weekly. During such
meetings, the Class B Member shall be entitled to provide guidance to the
Managing Member with respect to material decisions involving, or otherwise
relating to, Transwestern, including decisions with respect to commercial,
financial, regulatory, operational and other general policy matters involving,
or otherwise relating to, Transwestern.

4.4 Member Rights and Obligations.

(a) Voting Rights. Except as provided in this Agreement or as otherwise required
by applicable law;

(i) the Class A Members and the Class B Members shall vote together without
distinction as to class, and any action requiring the approval of the Members
shall require the affirmative vote of the Class A Members and Class B Members
holding a majority of the Class A Membership Interests and the Class B
Membership Interests;

(ii) all actions requiring the approval of the Class A Members, and unless
expressly provided otherwise, all other actions to be taken by the Class A
Members (including, without limitation, any direction to be given to the
Executive Committee Members appointed by the Class A Members),shall require the
affirmative vote of Members holding a majority of the Class A Membership
Interests; provided, however, that in the case of any vote by the Class A
Members, whether pursuant to this Section or any other provision of this
Agreement, ETP and any of its Affiliates holding any Class A Membership
Interests shall not be entitled to participate in such vote and the Class A
Membership Interests held by them shall be disregarded for all purposes of such
vote; and

(iii) all actions requiring the approval of the Class B Members, and unless
expressly provided otherwise, all other actions to be taken by the Class B
Members (including, without limitation, any direction to be given to the
Executive Committee Members appointed by the Class B Members), shall require the
affirmative vote of Members holding a majority of the Class B Membership
Interests; provided, however, that in the case of any vote by the Class B
Members, whether pursuant to this Section or any other provision of this
Agreement, CCE and any of its Affiliates holding any Class B Membership
Interests shall not be entitled to participate in such vote and the Class B
Membership Interests held by them shall be disregarded for all purposes of such
vote.

(b) Actions Requiring Unanimous Approval of Members. The following actions by
the Company shall require the unanimous approval of all of the Members:

(i) amending the Certificate or this Agreement;

 

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(ii) requiring any Member to contribute additional capital; and

(iii) issuing any Membership Interests or other equity securities of the Company
to any Member.

(c) Actions Requiring Approval of Two-Thirds of Class A Members and Class B
Members. The following actions by the Company shall require the approval of
Members holding at least two-thirds of the Class A Membership Interests and
Members holding at least two-thirds of the Class B Membership Interests:

(i) dissolving, terminating or liquidating the Company or any Company
Subsidiary;

(ii) selling all or substantially all of the assets of the Company or any
Company Subsidiary; and

(iii) merging, consolidating or changing the form of entity of the Company or
any Company Subsidiary, whether or not involving a change of control.

(d) Members’ Meetings. Meetings of the Members may be called from time to time
by the affirmative vote of the Executive Committee Members or upon written
request of any Member having an Aggregate Percentage of not less than 20%
delivered to any member of the Executive Committee. If action is to be taken at
a duly called meeting of the Members, notice of the time, date and place of
meeting shall be given by the Managing Member, at the direction of the Executive
Committee, to each other Member by personal delivery, telephone, electronic mail
or telecopier sent to the address of each Member set forth on Exhibit A at least
five business days in advance of the meeting; provided, however, that no notice
need be given to a Member who waives notice before or after the meeting or who
attends the meeting without protesting at or before its commencement the
inadequacy of notice to such Member. The Members may attend a meeting in person
or by proxy. Meetings of the Members shall be held at the Company’s principal
place of business during normal business hours, or at such other place and time
as unanimously agreed by the Members; provided, however, that the Members may
participate in and act at any meeting of the Members through the use of a
conference telephone or other communications equipment by means of which all
individuals participating in the meeting can hear each other, and such
participation in the meeting shall constitute presence in person at the meeting.
Any action required or permitted to be taken at any meeting of the Members may
be taken without a meeting if one or more written consents to such action shall
be signed by Members whose affirmative vote at a meeting would be sufficient to
approve such action. Such written consents shall be delivered to the principal
office of the Company and, unless otherwise specified, shall be effective on the
date when the first consent is delivered.

(e) Limitation of Authority. Except in accordance with the provisions of this
Agreement, no Member shall have any right or authority to act for or bind the
Company.

4.5 Limitation of Liability. No Member, Managing Member, Executive Committee
Member or any Affiliate, agent, officer, partner, employee, member,
representative, director or shareholder of any of the foregoing shall be liable,
responsible or accountable in damages or otherwise to the Company or any Member
for (i) any act performed in good faith within the

 

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scope of the authority conferred by this Agreement, (ii) any failure or refusal
to perform any acts except those required by the terms of this Agreement or
(iii) any performance or omission to perform any acts in reliance in good faith
on the advice of independent accountants or legal counsel for the Company.

4.6 Indemnification. In any threatened, pending or completed action, suit or
proceeding to which a Member, Managing Member, Executive Committee Member or any
Affiliate, agent, officer, partner, employee, member, representative, director
or shareholder of any of the foregoing was or is a party or is threatened to be
made a party by reason of the fact that such Person is or was acting on behalf
of the Company (other than an action by or in the right of the Company), the
Company shall indemnify such Member, Managing Member, Executive Committee Member
or any Affiliate, agent, officer, partner, employee, member, representative,
director or shareholder of any of the foregoing against expenses, including
attorneys’ fees, judgments and amounts paid in settlement actually and
reasonably incurred by such Person in connection with such action, suit or
proceeding to the maximum extent permitted by applicable law, provided that such
Person acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Company, and that the conduct giving rise
to the liability for which indemnification is sought does not constitute fraud,
gross negligence or gross misconduct.

ARTICLE V.

CONTRIBUTIONS

5.1 Capital Contribution. Unless unanimously agreed to by the Members in
writing, no Member shall be required to make additional Capital Contributions to
the Company. In addition, no Member shall be allowed to make additional Capital
Contributions to the Company without the approval of CCE (but only so long as it
shall be a Member) and of ETP (but only so long as it shall be a Member).

5.2 No Right to Interest or Return of Capital. Except as set forth herein, no
Member shall be entitled to any return of, or interest on, Capital Contributions
to the Company. No Member shall have any liability for the return of the Capital
Contribution of any other Member and each Member shall look only to the assets
of the Company for return of its Capital Contribution.

5.3 No Third Party Rights. The obligations or rights of the Company or the
Members to make any Capital Contribution under this Article V shall not grant
any rights to or confer any benefits upon any Person who is not a Member.

ARTICLE VI.

DISTRIBUTIONS

6.1 Cash Flow. Subject to Sections 6.2, 6.3 and 11.2, Cash Flow shall be
distributed at such times as shall be determined by the affirmative vote of the
Executive Committee to each Class A Member and Class B Member in proportion to
their respective Aggregate Percentage Interests. Distributions to each Member
shall be sent via wire transfer to such account identified by such respective
Member in writing to the Managing Member from time to time.

 

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6.2 Amounts Withheld for Taxes. Notwithstanding any provision of this Agreement
to the contrary, if the Company is required to pay, with respect to or on behalf
of any Member or any other Person, any amount required to be withheld by the
Company in respect of taxes based on or measured by income under federal, state,
or local law or any estimated tax or similar amount, such Member or other Person
shall, upon demand of the Company, promptly reimburse the Company for such
amount. To the extent that such Member or other Person has not so reimbursed the
Company, any and all amounts so paid by the Company may be withheld from and
offset against distributions to such Member or other Person and shall be
considered for all purposes of this Agreement to have been distributed to such
Member or other Person pursuant to this Article VI.

6.3 Minimum Distribution for Taxes. To the extent permitted by applicable Credit
Facilities and other obligations of the Company, the Company shall distribute in
accordance with Section 6.1, with respect to each Fiscal Year and during the
period commencing on the first day of such Fiscal Year and ending on the 15th
day of the third month following the end of such Fiscal Year, an amount equal to
the lesser of (a) (i) the Company’s Cash Flow for such Fiscal Year less (ii) the
aggregate amount of all quarterly distributions of Cash Flow previously made
during such Fiscal Year and (b) 40% (or such other percentage as may be
determined by the Executive Committee) of the taxable income of the Company for
such Fiscal Year. For purposes of this Section 6.3, the taxable income of the
Company for each Fiscal Year shall be computed as though the Company were a
corporation which did not file consolidated Federal income tax returns, as
though such corporation did not make any of the elections specified in Code
Section 703(b), as though Code Section 243(a)(1) and Code Section 243(c) (if
applicable), rather than Code Section 243(a)(3), applied to “qualifying
dividends” (as defined in Code Section 243(b)(1)), without regard to any
carryover or carryback of any net operating loss, capital loss, investment
credit, unused foreign tax, excess charitable contribution, passive loss or
credit, or other item from any other year, and without regard to the provisions
of Code Section 703(a).

ARTICLE VII.

ALLOCATIONS

7.1 Book Allocations. Sections 7.1(a) and (b) set forth the general rules for
book allocations to the Members. Section 7.1(c) sets forth various special rules
that supercede the general rules of Sections 7.1(a) and (b).

(a) Profit. Profits for each Fiscal Year shall be allocated to the Members in
the following order of priority:

(i) first, each Class A Member and Class B Member shall be allocated Profits (in
proportion to the aggregate Losses allocated to such Members under
Section 7.1(b)(ii) for all Fiscal Years) until the aggregate allocations made to
each Class A Member and Class B Member pursuant to this Section 7.1(a)(i) is
equal to the aggregate Losses allocated to the Member pursuant to
Section 7.1(b)(ii) for all Fiscal Years; and

(ii) thereafter, each Class A Member and each Class B Member shall be allocated
Profits in proportion to its Aggregate Percentage Interests.

 

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(b) Losses. Losses for each Fiscal Year shall be allocated to the Members in the
following order of priority:

(i) first, to the Class A Members and Class B Members, if any, having positive
balances in their Adjusted Capital Accounts, in proportion to and to the extent
of, such positive balances; and

(ii) thereafter, to the Class A Members and Class B Members in proportion to
their Aggregate Percentage Interests.

(c) Special Rules. Notwithstanding Sections 7.1(a) and (b), the following
special allocation rules shall apply under the circumstances described:

(i) Limitation on Loss Allocations. The Losses allocated to any Member pursuant
to Section 7.1(b) with respect to any Fiscal Year shall not exceed the maximum
amount of Losses that can be so allocated without causing such Member to have an
Adjusted Capital Account Deficit at the end of such Fiscal Year. All items of
loss or deduction in excess of the limitation set forth in this
Section 7.1(c)(i) shall be allocated first, to the Member who will not be
subject to this limitation, and second, any remaining amount to the Members in
the manner required by the Code and the Regulations. To the extent that items of
loss and deduction are allocated pursuant to this Section 7.1(c)(i) to a Member,
such Member shall be allocated a corresponding amount of income and gain as may
be available in the earliest subsequent Fiscal Year to offset such allocation of
loss and deduction.

(ii) Company Minimum Gain. Except as otherwise provided in Regulations
Section 1.704-2(f), if there is a net decrease in Company Minimum Gain during
any Company taxable period, each Member shall be specially allocated items of
Company income and gain for such period (and, if necessary, subsequent periods)
in proportion to and to the extent of, an amount equal to the portion of such
Member’s share of the net decrease in Company Minimum Gain, determined in
accordance with Regulations Section 1.704-2(g). This Section 7.1(c)(ii) is
intended to comply with the charge back of items of income and gain requirement
in Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.

(iii) Minimum Gain Attributable to Member Nonrecourse Debt. Except as otherwise
provided in Regulations Section 1.704-2(i)(4), if there is a net decrease in
Minimum Gain Attributable to Member Nonrecourse Debt during any Company taxable
period, each Member with a share of Minimum Gain Attributable to Member
Nonrecourse Debt shall be specially allocated items of Company income and gain
for such period (and, if necessary, subsequent periods) in proportion to, and to
the extent of, an amount equal to the portion of such Member’s share of the net
decrease in the Minimum Gain Attributable to Member Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(4). This Section 7.1(c)(iii)
is intended to comply with the charge back of items of income and gain
requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.

 

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(iv) Qualified Income Offset. In the event any Member unexpectedly receives any
adjustments, allocations or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4),(5) or (6), and such adjustment, allocation or
distribution causes or increases an Adjusted Capital Account Deficit for such
Member, then before any other allocations are made under this Agreement or
otherwise, such Member shall be allocated items of Company income and gain
(consisting of a pro rata portion of each item of Company income, including
gross income and gain) in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, such Adjusted Capital Account Deficit of
such Member as quickly as possible.

(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall
be allocated to the Members in the same ratios that Profit is allocated for the
taxable year in accordance with Regulations Section 1.704-2(b)(1). If the
Executive Committee determines in its good faith discretion that the Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe harbor
requirements of the Regulations promulgated under Section 704(b) of the Code,
the Executive Committee is authorized to revise the prescribed ratio to the
numerically closest ratio that does satisfy such requirements.

(vi) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Member that bears the economic
risk of loss (as described in Regulations Section 1.704-2(b) with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)). If more than
one Member bears the economic risk of loss with respect to a Member Nonrecourse
Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated
between or among such Members in accordance with the ratios in which they share
such economic risk of loss.

(vii) Curative Allocations. The allocations set forth in Sections 7.1(c)(i)
through 7.1(c)(vi) (the “Regulatory Allocations”) are intended to comply with
certain requirements of Regulations Sections 1.704-1(b) and 1.704-2(b).
Notwithstanding any other provisions of this Section 7.1(c) (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into account
in allocating other items of income, gain, loss, and deduction among the Members
so that, to the extent possible, the net amount of such allocations of other
items and the Regulatory Allocations (including anticipated future Regulatory
Allocations) to each Member shall be equal to the net amount that would have
been allocated to such Member if the Regulatory Allocations had not occurred.

(viii) Change in Regulations. If the Regulations incorporating the Regulatory
Allocations are hereafter changed or if new Regulations are hereafter adopted,
and such changed or new Regulations, in the opinion of independent tax counsel
for the Company, make it necessary to revise the Regulatory Allocations or
provide further special allocation rules in order to avoid a significant risk
that a material portion of any allocation set forth in this Article VII would
not be respected for federal income tax purposes, the Executive Committee shall
make such reasonable amendments to this

 

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Agreement as, in the opinion of such counsel, are necessary or desirable, taking
into account the interests of the Members as a whole and all other relevant
factors, to avoid or reduce significantly such risk to the extent possible
without materially changing the amounts allocable and distributable to any
Member, pursuant to this Agreement.

(ix) Non-Recourse Liabilities. “Excess non-recourse liabilities” of the Company
within the meaning of Regulations Section 1.752-3(a)(3) shall be allocated in
the same ratio that Profit is allocated for the taxable year.

7.2 Tax Allocations.

(a) In General. Allocations for tax purposes of items of income, gain, loss,
deduction and basis therefor, shall be made in the same manner as allocations
for book purposes set forth in Section 7.1. Allocations pursuant to this
Section 7.2 are solely for purposes of federal, state and local income taxes and
shall not affect, or in any way be taken into account in computing, any Member’s
Capital Account or share of Profits, Losses, other items or distributions
pursuant to any provision of this Agreement.

(b) Special Rules.

(i) Elimination of Book/Tax Disparities. In determining a Member’s allocable
share of Company taxable income, the Member’s allocable share of each item of
Profit and Loss shall be properly adjusted to reflect the rules and principles
of Code Section 704(c) and Regulations Section 1.704-3. This Section 7.2(b)(i)
is intended to comply with the requirements of Code Section 704(c) and
Regulations Sections 1.704-1(b)(2)(iv)(d) and (f) and shall be interpreted
consistently therewith. Any elections or other decisions relating to such
allocations shall be made by the Members in any manner that reasonably reflects
the purpose and intention of this Agreement.

(ii) Allocation of Items Among Members. Except as otherwise provided in
Section 7.2(b)(i), each item of income, gain, loss and deduction and all other
items governed by Code Section 702(a) shall be allocated among the Members in
proportion to the allocation of Profits, Losses and other items to the Members
hereunder, provided that any gain recognized from any disposition of a Company
asset that is treated as ordinary income because it is attributable to the
recapture of any depreciation or amortization shall be allocated among the
Members in accordance with Regulations Section 1.1245-1(e), if applicable, or
with any other applicable provision of the Regulations and, if no such provision
is applicable, in the same ratio as the prior allocations of Profits and Losses
and other items that included such depreciation or amortization, but not in
excess of the gain otherwise allocable to each Member.

(c) Conformity of Reporting. The Members are aware of the income tax
consequences of the allocations made by this Section 7.2 and hereby agree to be
bound by the provisions of this Section 7.2 in reporting their shares of Company
profits, gains, income, losses, deductions, credits and other items for income
tax purposes.

7.3 Transferred Interests. If any Membership Interest (or portion thereof) is
sold, assigned or transferred during any Fiscal Year, then Profit, Loss, each
item thereof and all other

 

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items realized by the Company during such Fiscal Year shall be divided and
allocated between the Members by taking into account their varying interests
during the Fiscal Year in accordance with Code Section 706(d), using any
conventions permitted by law and selected by the Members.

7.4 Section 754 Election. In the event of a Transfer of a Membership Interest
permitted under this Agreement, the Company shall, at the request of the
transferee Member, file an election under Section 754 of the Code to adjust the
basis of the assets of the Company in accordance with the provisions of
Section 743 of the Code. Any costs associated with such election (such as
accounting fees) shall be borne by the transferee Member.

7.5 Tax Matters Member.

(a) For purposes of Code Sections 6221 through 6223, the Managing Member from
time to time shall also be, and is hereby designated as, the “tax matters
partner” of the Company (the “Tax Matters Member”).

(b) The Tax Matters Member shall make an election under Code
Section 6231(a)(i)(B)(ii) with the Company’s first tax return to be filed after
the effective date of this Agreement to have Code Sections 6221 to 6234,
inclusive, apply to the Company.

(c) The Tax Matters Member shall, within ten days (or such shorter period of
time as is reasonably practicable) of the receipt of any notice from the
Internal Revenue Service in any administrative proceeding at the Company level
relating to the determination of any Company item of income, gain, loss,
deduction or credit, deliver a copy of such notice to each Member. The Tax
Matters Member shall cooperate with any Member, and shall take such action as
may be required to be taken by the Tax Matters Member, to cause such Member to
become a “notice partner” within the meaning of Section 6231(a)(8) of the Code.
The Tax Matters Member shall inform each Member of all significant matters that
may come to its attention in its capacity as Tax Matters Member by giving
written notice thereof within 10 business days (or such shorter period of time
as is reasonably practicable) after becoming aware thereof and, within that
time, shall forward to each other Member copies of all significant written
communications it may receive in its capacity as Tax Matters Member.

(d) The Tax Matters Member shall not take any action that may be taken by a “tax
matters partner” under Code Section 6221 through 6234 unless (i) it has first
given the other Members written notice of the contemplated action at least ten
business days prior to the applicable due date of such action and (ii) it has
received the unanimous written consent of the other Members to such contemplated
action; provided, however, that unless the Tax Matters Member is notified
otherwise no later than two business days prior to any date by which the Tax
Matters Member must act as set forth in any notice received from the Internal
Revenue Service, the Code or the regulations promulgated thereunder, such other
Members shall be deemed to have given their consent.

(e) At least 20 days prior to the due date for the filing of any federal income
tax return of the Company, the Tax Matters Member shall provide a proposed draft
of such return to the Members for their approval. If the Members approve such
return, the return shall be filed as approved. Failure to provide the Tax
Matters Member with written notice that the

 

24

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Members do not approve such return within 10 days from the receipt thereof by
the Members shall be deemed approval by the Members. In the event the Members do
not approve such return, and the Members and Tax Matters Member are otherwise
unable to resolve their differences with regard to such return, the matter shall
be submitted to an independent, nationally recognized accounting firm, the
decision of which shall be final. The cost of retaining such accounting firm
with respect to resolving such dispute shall be borne by the Company. The Tax
Matters Member shall provide a draft or final copy of any tax return to a Member
upon written request by such Member.

(f) Without limiting and in addition to the foregoing, for tax proceedings,
matters and claims in excess of $3 million, the Tax Matters Member shall not
initiate any legal or administrative proceedings on behalf of the Company or a
Company Subsidiary in respect of or relating to any tax proceedings or other tax
matters, or agree to the settlement of any claims in respect of or relating to
any tax proceedings or other tax matters, without first consulting with the
Executive Committee a reasonable period of time prior to taking any such action.

ARTICLE VIII.

TRANSFER/ADMISSION MATTERS

8.1 Transfer Restrictions. ETP, CCE and any other Person holding, directly or
indirectly, a Class A Membership Interest or Class B Membership Interest may
Transfer all or any portion of its Membership Interest only in accordance with
the provisions of this Article VIII; provided, that ETP, CCE and any other
Person holding, directly or indirectly, a Class A Membership Interest or Class B
Membership Interest may Transfer all or any portion of its Membership Interest
to an Affiliate with prior notice to the Executive Committee and upon
satisfaction of the provisions of Section 8.3. Notwithstanding any provision
hereof to the contrary, no Class A Member may Transfer any Membership Interest
to any person that is a Class A Prohibited Transferee and no Class B Member may
Transfer any Membership Interest to any person that is a Class B Prohibited
Transferee.

8.2 Right of First Offer. If any Class A Member or Class B Member (a
“Transferring Member”) desires to Transfer all or any portion of its Class A
Membership Interest or Class B Membership Interest, as applicable (the
“Specified Interest”), to any Third Party Purchaser, such Transferring Member
shall first give notice thereof (the “Offer Notice”) to the other Class A
Members and Class B Members (the “Non-Transferring Members”), specifying the
price (the “Specified Price”) and other terms (the “Specified Terms”) at and on
which such Transferring Member is willing to sell the Specified Interest. The
delivery of the Offer Notice by the Transferring Member to the Non-Transferring
Members shall constitute an offer by the Transferring Member to negotiate in
good faith to sell to the Non-Transferring Members the Specified Interest at the
Specified Price upon the Specified Terms. The Non-Transferring Members shall
each have 30 Business Days (the “Acceptance Period”) from and including the date
it receives the Offer Notice to accept such offer, which acceptance shall be in
the form of a written notice (the “Acceptance Notice”) to the Transferring
Member. Each Non-Transferring Member wishing to accept such offer (each, an
“Accepting Member”) shall thereafter negotiate in good faith with the
Transferring Member. If more than one Non-Transferring Member shall wish to
purchase the Specified Interest, each such Non-Transferring Member shall be
entitled to purchase a proportionate share of the Specified Interest on the
basis of its Aggregate Percentage

 

25

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Interest. If the Accepting Member(s) and the Transferring Member fail to execute
a definitive purchase agreement within 30 Business Days following receipt by the
Transferring Member of the applicable Acceptance Notice(s), or if the sale of
the Specified Interest to the Non-Transferring Member(s) is not consummated
within 60 days following such receipt of the Acceptance Notice, the offer set
forth in this Section 8.2 shall then automatically expire, and such Transferring
Member may Transfer the Specified Interest, subject to the other terms of this
Agreement, for a price and on terms and conditions substantially no more
favorable to the purchaser than those offered by the Transferring Member;
provided, however, that if the Transferring Member shall fail to sell the
Specified Interest or any portion thereof within 180 days from such expiration,
the Specified Interest or such non-transferred portion of the Specified Interest
shall again be subject to the right of first offer contained in this
Section 8.2.

8.3 Transfer Requirements. Notwithstanding anything to the contrary contained
herein, the Company shall not recognize for any purpose any purported Transfer
of all or any portion of a Member’s Membership Interest unless:

(a) the Company shall have been furnished with the documents effecting such
Transfer executed and acknowledged by both transferor and transferee, together
the written agreement of the transferee to become a party to and be bound by
this Agreement, which shall be in form and substance reasonably satisfactory to
the Executive Committee;

(b) such Transfer shall have been made in accordance with all applicable laws
and regulations and all necessary governmental consents shall have been obtained
and requirements satisfied, including without limitation, compliance with the
Securities Act, and applicable state blue sky and securities laws, and such
Transfer will not cause the Company to breach or violate any applicable law;

(c) such Transfer will not cause the Company to have more than 100 partners
(within the meaning of Regulations Section 1.7704-1(h)) or does not otherwise
cause the Company to be treated as a “publicly traded partnership” within the
meaning of Section 7704 of the Code;

(d) such Transfer will not result in a termination of the Company for purposes
of Section 708 of the Code;

(e) all necessary instruments reflecting such admission shall have been filed in
each jurisdiction in which such filing is necessary in order to qualify the
Company to conduct business or to preserve the limited liability of the Members;
and

(f) such Transfer will not result in the occurrence of an event of default or
similar occurrence (whether immediately or with the giving of notice, the
passage of time or both) under the terms of any of the Credit Facilities;

provided, however, that the foregoing provisions of this Section 8.3 shall not
apply to the Transfers contemplated by the Redemption Agreement.

The Executive Committee may request an opinion of counsel (which counsel shall
be chosen by the non-transferring Member but shall be reasonably satisfactory to
the transferee Member) with

 

26

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respect to any of the foregoing or any other matters that the Executive
Committee reasonably deems appropriate in respect of any such Transfer. In
addition, the Executive Committee, upon unanimous consent, may waive any of the
foregoing provisions. Notwithstanding the foregoing, a Transferring Member need
not comply with Section 8.3(d) if such Transferring Member indemnifies each
other Member in a manner and amount reasonably satisfactory to each such other
Member for any adverse tax effects that would result from such termination.

8.4 Admission of a Member. A Person may be admitted as Class A Member or a Class
B Member upon satisfaction of the relevant requirements of this Article VIII or
with the unanimous written consent of the Class A Members and the Class B
Members. Upon such admission, such Member shall be designated as either a
Class A Member or a Class B Member, and the Managing Member shall amend Exhibit
A appropriately to reflect the admission of such Person as a Member.

8.5 Cooperation by Members. If any Member wishes to Transfer all or a portion of
its Membership Interest in accordance with the provisions of this Article VIII,
each other Member shall use its reasonable efforts to assist the Member seeking
to make such Transfer as such Member may reasonably request.

ARTICLE IX.

BOOKS AND RECORDS; BANK ACCOUNTS

9.1 Books and Records. The books and records of the Company shall, at the cost
and expense of the Company, be kept or caused to be kept by the Managing Member
at the principal place of business of the Company. Such books and records will
be kept on the basis of a calendar year, and will reflect all Company
transactions and be appropriate and adequate for conducting the Company’s
business. By February 28 of each year, the Tax Matters Member shall provide each
Member of Holdings with an estimate of its allocable share of the preceding
year’s taxable income, loss, credit and certain other information necessary for
the Members to file a complete tax return.

9.2 Reporting Requirements.

(a) Members Holding 5% Membership Interests. The Managing Member shall prepare,
or cause to be prepared, and shall deliver a financial report (audited in the
case of a report sent as of the end of a Fiscal Year and unaudited in the case
of a report sent as of the end of a quarter) to each holder of 5% or more of the
outstanding Class A Membership Interests and to each holder of 5% or more of the
outstanding Class B Membership Interests within 120 days after the end of each
Fiscal Year (commencing after the date of this Agreement) and 60 days after the
end of each of the first three quarters of each Fiscal Year (commencing with the
first full quarter after the date of this Agreement), setting forth for such
Fiscal Year or quarter:

(i) the assets and liabilities of the Company and the Company Subsidiaries, on a
consolidated and consolidating basis, as of the end of such Fiscal Year or
quarter;

(ii) the net profit or net loss of the Company and the Company Subsidiaries, on
a consolidated and consolidating basis, for such Fiscal Year or quarter;

 

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(iii) the cash flows of the Company and the Company Subsidiaries, on a
consolidated and consolidating basis, for such Fiscal Year or quarter; and

(iv) in the case of a Fiscal Year only, such Class A Member’s or such Class B
Member’s closing Capital Account balance as of the end of such Fiscal Year.

(b) Members Holding 20% Membership Interests. The Managing Member shall prepare,
or cause to be prepared, and shall deliver to each Member holding 20% or more of
the outstanding Class A Membership Interests and to each Member holding 20% or
more of the outstanding Class B Membership Interests as promptly as practicable
such information regarding the Company and each Company Subsidiary as such
Member shall reasonably request.

9.3 Bank Accounts. All funds of the Company will be deposited in its name in an
account or accounts maintained with such bank or banks selected by the Executive
Committee. The funds of the Company will not be commingled with the funds of any
other Person. Checks will be drawn upon the Company account or accounts only for
the purposes of the Company and shall be signed by authorized representatives of
the Company.

ARTICLE X.

DISSOLUTION AND LIQUIDATION

10.1 Dissolution. The Company shall be dissolved upon the approval of the
Members required by Section 4.4(c)(i).

10.2 Distribution on Dissolution.

(a) Upon dissolution of the Company, no further business shall be conducted
except for the taking of such action as shall be necessary for the winding up of
the affairs of the Company and the distribution of assets pursuant to the
provisions of this Section. So long as it shall then be a Member, CCE shall act
as the Liquidating Trustee. If CCE shall not then be a Member or if it is unable
to act as Liquidating Trustee, then the Members shall appoint another
Liquidating Trustee. The Liquidating Trustee shall have full authority to wind
up the affairs of the Company and to make distributions provided herein.

(b) Upon dissolution of the Company, the Liquidating Trustee shall either sell
the assets of the Company at the best price available, or the Liquidating
Trustee may distribute to the Members all or any portion of the Company’s assets
in kind. If any assets are to be distributed in kind, the Liquidating Trustee
shall ascertain the fair market value (by appraisal or other reasonable means)
of such assets, and each Member’s Capital Account shall be charged or credited,
as the case may be, as if such asset had been sold for cash at such fair market
value and the Profit or Loss recognized thereby had been allocated to and among
the Members in accordance with Article VII.

(c) All assets of the Company shall be applied and distributed in the following
order:

(i) first, to the payment and discharge of all the Company’s debts and
liabilities to creditors, including liabilities to Members who are creditors, to
the extent otherwise permitted by law;

 

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(ii) second, to establish such reserves as the Liquidating Trustee may deem
reasonably necessary (and if the Liquidating Trustee shall be a Member, with the
approval of Members holding at least two-thirds of all Membership Interests) for
contingent or unforeseen liabilities or obligations of the Company; and

(iii) thereafter, to the Class A Members and the Class B Members in accordance
with Section 6.1.

10.3 Cancellation of Certificate. Upon the completion of the distribution of
Company assets as provided in this Article X, the Company shall be terminated,
and the Members shall cause the cancellation of the Certificate and all
amendments thereto, and shall take such other actions as may be necessary or
appropriate to terminate the Company.

ARTICLE XI.

GENERAL

11.1 Title to Company Property. All property owned by the Company, including,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Company as an entity, and no Member, individually, shall have any ownership
of such property. The Company may hold any of its assets in its own name or in
the name of its nominee, which nominee may be one or more Persons.

11.2 Severability. Every provision of this Agreement is intended to be
severable. Any provision of this Agreement which is illegal, invalid, prohibited
or unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity, prohibition or
unenforceability without invalidating or impairing the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction. If any term or provision hereof is illegal or invalid for
any reason whatsoever, such illegality or invalidity will not affect the
validity of the remainder of this Agreement.

11.3 Governing Law. This Agreement and rights and obligations of the parties
hereto with respect to the subject matter hereof will be interpreted and
enforced in accordance with, and governed exclusively by, the law of the State
of Delaware, excluding the conflicts of law provisions thereof.

11.4 Successors and Assigns. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their permitted successors, heirs and
assigns.

11.5 Waiver of Action for Partition. Each of the Members irrevocably waives
during the term of the Company any right that he may have to maintain any action
for partition with respect to any property of the Company.

 

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11.6 Headings. The headings of the Articles, Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.

11.7 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, with the same
effect as if all parties had signed the same documents, each of which will be
considered an original, but all such counterparts together will constitute but
one and the same Agreement. Any facsimile copies hereof or signature hereon
shall, for all purposes, be deemed originals.

11.8 Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. This Agreement and the
exhibits hereto supersede all prior written and all prior and contemporaneous
oral agreements, understandings, negotiations and representations between the
parties with respect to such subject matter.

11.9 Amendment. Except in the case of a modification of Exhibit A to be made by
the Managing Member as expressly contemplated by the terms of this Agreement,
including Section 5.2, this Agreement may be amended only by an instrument in
writing signed by all of the Members. Promptly following any amendment to this
Agreement (including any modification to Exhibit A by the Managing Member), the
Managing Member shall provide a true and complete copy thereof to each other
Member.

11.10 Securities Law Matters. The Members agree and acknowledge that their
Membership Interests are being acquired by them for investment purposes only and
not with a view to any sale thereof; that they have had adequate opportunity to
obtain from representatives of the Company and others all information necessary
for purposes of evaluating the merits and risks of holding a Membership
Interest; that they are able to bear the economic risk of holding their
Membership Interests hereunder for an indefinite period; that the Membership
Interests are illiquid assets and that there is no market in which to effectuate
a resale thereof or any portion thereof; and that, in any event, the resale of
their Membership Interests cannot be effectuated except pursuant to compliance
with the registration requirements under the Securities Act or an exemption
therefrom.

11.11 Notices.

(a) Each notice or other communication required or permitted to be given
pursuant to this Agreement shall be in writing and delivered in person or by
first class United States mail, postage prepaid, to the party to whom addressed
or by any nationally known overnight courier service to the address specified on
Exhibit A or to such other address as the party may advise the Executive
Committee, the Managing Member and the other Members as its address for notice
hereunder.

(b) All notices shall be deemed given upon the earlier to occur of: (i) the date
of actual receipt; (ii) the date of refusal of delivery; and (iii) (A) as to
hand delivery, the date of delivery, (B) as to facsimile, when such facsimile is
transmitted to the facsimile number specified herein and the appropriate
confirmation is provided, (C) as to overnight courier service, the date
following the deposit with the overnight courier service, and (D) as to the US
Mails, three business days after depositing in the US Mails.

 

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11.12 Construction. None of the provisions of this Agreement shall be for the
benefit of, or enforceable by, any creditors of the Company or other third
parties.

11.13 Submission to Jurisdiction; Consent to Service of Process.

(a) Any claims or disputes which may arise or result from, or be connected with,
this Agreement, any breach or default hereunder, or the transactions
contemplated by this Agreement, and any and all Actions related to the foregoing
shall be filed and maintained exclusively in the United States District Court
for the Southern District of New York sitting in New York County or the
Commercial Division, Civil Branch, of the Supreme Court of the State of New York
sitting in New York County and any appellate court from any thereof.

(b) The parties hereby unconditionally and irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of venue of any dispute arising out of or relating
to this Agreement or any of the transactions contemplated by this Agreement
brought in any court specified in paragraph (a) above, or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each of the parties hereto hereby consents to process being served by any
party to this Agreement in any suit, action or proceeding by the mailing of a
copy thereof in accordance with the provisions of Section 11.11.

11.14 No Consequential or Punitive Damages. No party hereto (or its Affiliates)
shall, under any circumstance, be liable to any other party (or its Affiliates)
for any consequential, exemplary, special, incidental or punitive damages
claimed by such other party under the terms of or due to any breach of this
Agreement, including, but not limited to, loss of revenue or income, cost of
capital, or loss of business reputation or opportunity.

11.15 Waiver. No consent or waiver, express or implied, by any Member to or of
any breach or default by any other Member in the performance by such other
Member of its obligations under this Agreement shall be deemed or construed to
be a consent to or waiver of any other breach or default in the performance by
such other Member of the same or any other obligation of such other Member under
this Agreement. Failure on the part of any Member to complain of any act or
failure to act of any other Member or to declare any other Member in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Member of its rights under this Agreement.

11.16 Confidentiality. Each Member shall hold, and shall cause its Affiliates to
hold, in strict confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, the contents of any
reports, financial statements, budgets or other information delivered to any
Member pursuant to Section 9.2 (“Confidential Information), except to the extent
that such Confidential Information (i) has been or has become (A) generally
available to the public other than as a result of disclosure by any party
hereunder or an Affiliate

 

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of a party or (B) available to the public on a non-confidential basis from a
source other than an Affiliate of a party entitled to the protection offered
hereby, or (ii) is required to be disclosed under applicable law or stock
exchange rules; provided, however, the applicable Member shall use, and shall
cause its Affiliates to use, commercially reasonable efforts to give each other
Member prior notice of any such disclosure in sufficient time to enable each
other Member to protect any such information. However, nothing contained in this
Section shall preclude the disclosure of Confidential Information, on the
condition that it remain confidential, to auditors, attorneys, lenders,
financial advisors, members, limited partners and other Persons in connection
with the performance of their duties as delegated or requested by any Member
hereof.

11.17 Public Announcement. The Members shall consult with each other before
issuing any press release relating to the Company or the Company Subsidiaries
and shall not issue any such press release or make any such public statement
without the prior consent of the other Members, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that a Member
may, without consulting with any other Member and without the prior consent of
the other Members, issue such press release or make such public statement as
may, upon the advice of counsel, be required by applicable law or stock exchange
rules if it has used all reasonable efforts to consult with the other Members.

 

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

 

CLASS A MEMBERS

CCE ACQUISITION, LLC

By:

 

 

Name:

 

Title:

 

CCEA CORP.

By:

 

 

Name:

 

Title:

  CLASS B MEMBER

ENERGY TRANSFER PARTNERS, L.P.

By:  

Energy Transfer Partners, GP, L.P.,

its general partner

By:  

Energy Transfer Partners, L.L.C.,

its general partner

  By:  

 

  Name:     Title:  

Signature Page

Second Amended and Restated Limited Liability Company Agreement of CCE Holdings,
LLC

--------------------------------------------------------------------------------

EXHIBIT B

Members

 

Class A Members

   Class A
Percentage
Interest     Class B
Percentage
Interest     Aggregate
Percentage
Interest  

CCE ACQUISITION, LLC

5444 Westheimer Road

Houston, TX 77056

Attn:

   99.9 %    N/A      49.95 % 

CCEA CORP.

5444 Westheimer Road

Houston, TX 77056

Attn:

   .2 %      .1 % 

Class B Member

   Class A
Percentage
Interest     Class B
Percentage
Interest     Aggregate
Percentage
Interest  

ENERGY TRANSFER PARTNERS, L.P.

2828 Woodside Street

Dallas, TX 75204

Attn:

   N/A      100 %    50 % 

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EXHIBIT B

Class A Prohibited Transferees

 

1. Kinder Morgan

 

2. American International Group, Inc.

Class B Prohibited Transferees

 

1. General Electric

 

2. Kinder Morgan

 

3. American International Group, Inc.

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EXHIBIT C

Administrative Services Agreement

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Exhibit D

CCE HOLDINGS, LLC

Unanimous Consent of the

Executive Committee

The undersigned, constituting all of the members comprising the Executive
Committee (the “Committee”) of CCE Holdings, LLC, a Delaware limited liability
company (the “Company”), in accordance with Article IV, Section 4.l(d)(iii) of
the Amended and Restated Limited Liability Company Agreement of the Company
dated as of November 5, 2004 (the “Agreement”), as further amended, hereby
consent to the adoption of the statement and resolutions set forth below and,
upon execution of this consent or a counterpart hereof by each of the members of
the Committee listed below, do hereby adopt such statements and resolutions:

WHEREAS, management of Transwestern Pipeline Company, LLC (“Transwestern”) has
apprised the Executive Committee (the “Committee”) of the Company of
Transwestern’s proposed Phoenix Expansion Project, which is comprised of
approximately 25 miles of looping of Transwestern’s existing San Juan Lateral
system at a projected cost of approximately $71 million and construction of an
approximately 285-mile expansion of the pipeline system connecting
Transwestern’s existing mainline with markets in the Phoenix, Arizona area at a
projected cost of approximately $640 million, all as more specifically described
in the draft “Application for a Certificate of Public Convenience and Necessity
and to Acquire an Undivided Interest in Natural Gas Pipeline Facilities” that is
attached hereto (the “FERC Application”);

WHEREAS, management of Transwestern has apprised the Committee of Transwestern’s
obligation under that order issued July 27, 1995, in docket nos. RP95-271-000,
et al., to file with the FERC by October 1, 2006, a major rate case proposing
new rates to become effective not later than November 1, 2006 (the “Transwestern
Rate Case”); and

WHEREAS, the Company proposes to enter into a Redemption Agreement, of even date
herewith (the “Redemption Agreement”), between the Company and Energy Transfer
Partners, L.P. (“ETP”).

--------------------------------------------------------------------------------

NOW, THEREFORE, IT IS RESOLVED, that the Committee hereby approves proceeding
with the Phoenix Expansion Project on terms and conditions consistent with those
described in the FERC Application, such approval to include specifically, but
not by way of limitation, approval to file the FERC Application, approval to
execute additional expansion agreements with prospective customers of the
Phoenix Expansion Project, approval to waive or decline to exercise contract
termination rights in existing expansion agreements, and approval to make
financial commitments and to execute contracts for materials and services
necessary to complete the Phoenix Expansion Project;

RESOLVED, that the Phoenix Expansion Project shall be financed by internal funds
as well as outside debt and/or equity financing, provided that the approvals set
forth in these resolutions shall not require or constitute a capital
contribution commitment by any member of the Company;

RESOLVED, that the Committee hereby approves Transwestern’s filing of a major
rate case by October 1, 2006, proposing new rates to become effective on
November 1, 2006;

RESOLVED, that the Committee hereby approves the execution and delivery of the
Redemption Agreement and, subject to (i) consummation of the transactions
contemplated under the Purchase and Sale Agreement (“Purchase Agreement”), dated
as of even date herewith, among ETP and the Class B Members of the Company and
(ii) in the event the Closing (as defined in the Purchase Agreement) does not
occur, CCE is not liable for any expenses incurred under the Redemption
Agreement, the performance by the Company of its obligations thereunder and the
transactions contemplated thereby (including, without limitation, the provision
by the Company of notices, and requests for consents and/or waivers, relating to
the change of control resulting from the transactions contemplated by the
Redemption Agreement and the Purchase Agreement, pursuant to the documents
evidencing the Existing TW Holdings Debt and the Existing TPC Debt (in each
case, as defined in the Redemption Agreement)); and

RESOLVED FURTHER, that the proper officers of the Company and Transwestern, and
their respective counsel, be, and each of them hereby is, authorized, empowered,
and directed (any one of them acting alone) to take any and all such further
action, to amend, execute, and deliver all such further instruments and
documents, for and in the name and on behalf of the

 

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Company or Transwestern, as applicable, and to pay all such expenses as in its
discretion appear to be necessary, proper, or advisable to carry into effect the
purposes and intentions of this and the foregoing resolutions.

 

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IN WITNESS WHEREOF, this written consent has been executed to be effective as of
the 14 day of September, 2006.

 

/s/ Robert O. Bond

Robert O. Bond

/s/ Julie H. Edwards

Julie H. Edwards

/s/ Randall F. Hornick

Randall F. Hornick

/s/ Vandana G. McCaw

Vandana G. McCaw