Exhibit 10.2

REDEMPTION AGREEMENT

by and between

ENERGY TRANSFER PARTNERS, L.P.

and

CCE HOLDINGS, LLC

Dated as of

September 14, 2006

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

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

 

- i -

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

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

 

- ii -

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

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

 

- iii -

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

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;

 

1

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

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).

 

2

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

“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).

 

3

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

“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.

 

4

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

“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).

 

5

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

“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.

 

6

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

“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.

 

7

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

“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.

 

8

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

“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.

 

9

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

“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.

 

10

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

“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.

 

11

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

“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

 

12

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

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).

 

13

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

“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

 

14

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

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.

 

15

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

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

 

16

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

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;

 

17

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

(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

 

18

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

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.

 

19

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

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;

 

20

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

(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.

 

21

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

(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

 

22

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

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.

 

23

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

(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;

 

24

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

(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.

 

25

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

(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,

 

26

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

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.

 

27

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

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).

 

28

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

(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

 

29

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

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.

 

30

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

(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,

 

31

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

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,

 

32

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

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.

 

33

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

(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;

 

34

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

(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;

 

35

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

(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).

 

36

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

(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

 

37

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

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.

 

38

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

(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

 

39

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

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

 

40

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

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

 

41

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

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,

 

42

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

“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

 

43

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

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

 

44

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

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

 

45

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

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

 

46

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

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.

 

47

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

(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

 

48

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

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.

 

49

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

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

 

50

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

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

 

51

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

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
condition and results of

 

52

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

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

 

53

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

(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.

 

54

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

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:

 

55

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

(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);

 

56

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

(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);

 

57

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

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.

 

58

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

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

 

59

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

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;

 

60

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

(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.

 

61

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

(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.

 

62

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

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

 

63

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

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,”

 

64

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

“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

 

65

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

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.

 

66

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

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.

 

67

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

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.

 

68

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

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