Document:

EX-10..1

EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of June 1, 2005, by and between SOUTHERN COMMUNITY BANK AND
TRUST, a North Carolina banking corporation (hereinafter referred to as the “Bank”) and DAVID W.
HINSHAW of North Carolina (hereinafter referred to as the “Officer”).

For and in consideration of their mutual promises, covenants and conditions hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged, the parties agree as follows:

1. Employment. The Bank agrees to employ the Officer and the Officer agrees to accept
employment upon the terms and conditions stated herein as an Executive Vice President and Chief
Financial Officer of the Bank. The Officer shall render such administrative and management
services to the Bank as are customarily performed by persons situated in a similar capacity. The
Officer shall promote the business of the Bank, including being active in at least two civic or
community organizations in Forsyth County, and perform such other duties as shall, from time to
time, be reasonably assigned by the Chief Executive Officer of the Bank. Upon the request of the
Chief Executive Officer, the Officer shall disclose all business activities or commercial pursuits
in which Officer is engaged, other than Bank duties.

2. Compensation. The Bank shall pay the Officer during the term of this Agreement, as
compensation for all services rendered by him to the Bank, a base salary at the rate of $175,000
per annum, payable in cash not less frequently than monthly. The rate of such salary shall be
reviewed by the Bank not less often than annually and if increased, shall not be decreased during
the term of this Agreement. Such rate of salary, or increased rate of salary, as the case may be,
may be further increased from time to time in such amounts as the Bank, in its discretion, may
decide. In determining salary increases, the Bank shall compensate the Officer for increases in
the cost of living and may also provide for performance or merit increases. Participation in the
Bank’s incentive compensation, deferred compensation, discretionary bonus, profit-sharing,
retirement and other employee benefit plans and participation in any fringe benefits shall not
reduce the salary payable to the Officer under this Paragraph. In the event of a Change in Control
(as defined in Paragraph 10), the Officer’s rate of salary shall be increased not less than five
percent annually during the term of this Agreement. Any payments made under this Agreement shall
be subject to such deductions as are required by law or regulation or as may be agreed to by the
Bank and the Officer.

3. Discretionary Bonuses. During the term of this Agreement, the Officer shall be
entitled, in an equitable manner with all other key management personnel of the Bank, to such
discretionary bonuses as may be authorized, declared and paid by the Bank to key management
employees. No other compensation provided for in this Agreement shall be deemed a substitute for
the Officer’s right to such discretionary bonuses when and as declared by the Bank.

4. Participation in Retirement and Employee Benefit Plans; Fringe Benefits. The
Officer shall be entitled to participate in any plan relating to deferred compensation, stock
options, stock purchases, pension, thrift, profit sharing, group life insurance, medical coverage,
disability coverage, education, or other retirement or employee benefits that the Bank has adopted,
or may, from time to time adopt, for the benefit of its senior officers and for employees
generally, subject to the eligibility rules of such plans.

The Officer shall also be entitled to participate in any other fringe benefits which are now
or may be or become applicable to the Bank’s senior officers, including the payment of reasonable
expenses for continuing education to maintain professional designations, and any other benefits
which are commensurate with the duties and responsibilities to be performed by the Officer under
this Agreement. Additionally, the Officer shall be entitled to such vacation and sick leave as
shall be established under uniform employee policies promulgated by the Bank. The Bank shall
reimburse the Officer for all out-of-pocket reasonable and necessary business expenses that the
Officer may incur in connection with his services on behalf of the Bank.

5. Term. The initial term of employment under this Agreement shall be for the period
commencing upon the effective date of this Agreement and ending three calendar years from the
effective date of this Agreement. On each anniversary of the effective date of this Agreement, the
term of this Agreement shall automatically be extended for an additional one year period beyond the
then effective expiration date unless written notice from the Bank or the Officer is received 90
days prior to an anniversary date advising the other that this Agreement shall not be further
extended; provided that the Chief Executive Officer shall review the Officer’s performance annually
and make a specific determination pursuant to such review to renew this Agreement prior to the 90
days’ notice.

6. Loyalty; Noncompetition.

(a) The Officer shall devote his full efforts and entire business time to the performance of
his duties and responsibilities under this Agreement.

(b) In consideration for (i) the agreement by the parent corporation of the Bank, Southern
Community Financial Corporation, to grant the Officer 10,000 options to purchase shares of its
common stock and (ii) the Officer’s employment pursuant to the terms stated herein, during the term
of this Agreement, or any renewals thereof, and for a period of two years after termination, the
Officer agrees he will not, within the “Restricted Area,” directly or indirectly, engage in any
business that competes with the Bank or any of its subsidiaries without the prior written consent
of the Bank; provided, however, that the provisions of this Paragraph shall not apply in the event
the Officer’s employment is unilaterally terminated by the Bank for Cause, (as such term is defined
in Paragraph 8(c) hereof) or in the event the Officer terminates his employment with the Bank after
the occurrence of a “Termination Event” (as such term is defined in Paragraph 10(b) hereof)
following a “Change of Control” (as such term is defined in Paragraph 10(d) hereof). The
Restricted Area covers the following divisible list of territories: Forsyth, Guilford, Iredell,
Rockingham, Stokes, Surry and Yadkin Counties, North Carolina, and within 15 miles of any Bank
office operated during the term of this Agreement. The two-year restricted period, however, does
not include any period of violation or period of time required for litigation to enforce the
Officer’s agreement not to compete against the Bank. Notwithstanding the foregoing, the Officer
shall be free, without such consent, to purchase or hold as an investment or otherwise, up to five
percent of the outstanding stock or other security of any corporation that has its securities
publicly traded on any recognized securities exchange or in any over-the counter market.

(c) The Officer agrees he will hold in confidence all knowledge or information of a
confidential nature with respect to the business of the Bank or any subsidiary received by him
during the term of this Agreement and will not disclose or make use of such information without the
prior written consent of the Bank. The Officer agrees that he will be liable to the Bank for any
damages caused by unauthorized disclosure of such information. Upon termination of his employment,
the Officer agrees to return all records or copies thereof of the Bank or any subsidiary in his
possession or under his control, which relate to the activities of the Bank or any subsidiary.

(d) The Officer acknowledges that it would not be possible to ascertain the amount of monetary
damages in the event of a breach by the Officer under the provisions of this Paragraph 6. The
Officer agrees that, in the event of a breach of this Paragraph 6, the Bank will be entitled to the
following remedies: (i) entry by a court having jurisdiction of an order granting specific
performance or temporary injunctive relief, upon the posting of any requisite bond and the filing
with the court of an appropriate pleading and affidavit specifying each obligation breached by the
Officer, but without proof of actual monetary damage or an inadequate remedy at law; (ii) if a
court having jurisdiction determines for any reason that the Bank is not entitled to injunctive
relief, the recovery from the Officer of all profit, remuneration, or other consideration that the
Officer gains from breaching this Paragraph 6; and (iii) reimbursement from the Officer of all
costs, including attorney’s fees, incurred by the Bank in enforcing this Paragraph 6. The Bank may
exercise any of the foregoing remedies concurrently, independently, or successively.

(e) If the scope of any restriction contained in this Paragraph 6 is determined to be too
broad by any court of competent jurisdiction, then such restriction shall be enforced to the
maximum extent permitted by law and the Officer consents that the scope of this restriction may be
modified judicially.

7. Standards. The Officer shall perform his duties and responsibilities under this
Agreement in accordance with such reasonable standards expected of employees with comparable
positions in comparable organizations and as may be established from time to time by the Chief
Executive Officer. The Bank will provide the Officer with the working facilities and staff
customary for similar executives and necessary for him to perform his duties.

8. Termination and Termination Pay.

(a) The Officer’s employment under this Agreement shall be terminated upon the death of the
Officer during the term of this Agreement, in which event, the Officer’s estate shall be entitled
to receive the compensation due the Officer through the last day of the calendar month in which his
death shall have occurred and for a period of one month thereafter.

(b) The Officer’s employment under this Agreement may be terminated at any time by the Officer
upon 60 days’ written notice to the Chief Executive Officer. Upon such termination, the Officer
shall be entitled to receive compensation through the effective date of such termination.

(c) The Bank may terminate the Officer’s employment at any time, but any termination by the
Bank, other than termination for Cause, shall not prejudice the Officer’s right to compensation or
other benefits under this Agreement. The Bank shall provide written notice specifying the grounds
for termination for Cause. The Officer shall have no right to receive compensation or other
benefits for any period after termination for Cause. Termination for Cause shall include
termination because of the Officer’s personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this Agreement.
Notwithstanding such termination, the obligations under Paragraph 6(c) shall survive any
termination of employment.

(d) Subject to the Bank’s obligations and the Officer’s rights under (i) Title I of the
Americans with Disabilities Act, §504 of the Rehabilitation Act, and the Family and Medical Leave
Act, and to (ii) the vacation leave, disability leave, sick leave and any other leave policies of
the Bank, the Officer’s employment under this Agreement automatically shall be terminated in the
event the Officer becomes disabled during the term of this Agreement and it is determined by the
Bank that the Officer is unable to perform the essential functions of his job under this Agreement
for sixty (60) business days or more during any 12-month period. Upon any such termination, the
Officer shall be entitled to receive any compensation the Officer shall have earned prior to the
date of termination but which remains unpaid, and shall be entitled to any payments provided under
any disability income plan of the Bank which is applicable to the Officer.

In the event of any disagreement between the Officer and the Bank as to whether the Officer is
physically or mentally incapacitated such as will result in the termination of the Officer’s
employment pursuant to this Paragraph 8(d), the question of such incapacity shall be submitted to
an impartial physician licensed to practice medicine in North Carolina for determination and who
will be selected by mutual agreement of the Officer and the Bank, or failing such agreement, by two
(2) physicians (one (1) of whom shall be selected by the Bank and the other by the Officer), and
such determination of the question of such incapacity by such physician or physicians shall be
final and binding on the Officer and the Bank. The Bank shall pay the reasonable fees and expenses
of such physician or physicians in making any determination required under this Paragraph 8(d).

9. Additional Regulatory Requirements. Notwithstanding anything contained in this
Agreement to the contrary, it is understood and agreed that the Bank (or any of its successors in
interest) shall not be required to make any payment or take any action under this Agreement if:

(a) the Bank is declared by any governmental agency having jurisdiction over the Bank
(hereinafter referred to as “Regulatory Authority”) to be insolvent, in default or operating in an
unsafe or unsound manner; or,

(b) in the opinion of counsel to the Bank, such payment or action (i) would be prohibited by
or would violate any provision of state or federal law applicable to the Bank, including, without
limitation, the Federal Deposit Insurance Act as now in effect or hereafter amended, (ii) would be
prohibited by or would violate any applicable rules, regulations, orders or statements of policy,
whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise
would be prohibited by any Regulatory Authority.

10. Change in Control.

(a) In the event of a termination of the Officer’s employment in connection with, or within
twenty-four (24) months after, a “Change in Control” (as defined in Subparagraph (d) below) of the
Bank other than for Cause (as defined in Paragraph 8), the Officer shall be entitled to receive the
payment set forth in Subparagraph (c) below. Said sum shall be payable as provided in Subparagraph
(e) below.

(b) In addition to any rights the Officer might have to terminate this Agreement contained in
Paragraph 8, the Officer shall have the right to terminate this Agreement upon the occurrence of
any of the following events (the “Termination Events”) within twenty-four months following a Change
in Control of the Bank:

(i) Officer is assigned any duties and/or responsibilities that are inconsistent with
or constitute a demotion or reduction in his position, duties, responsibilities or status at
the time of the Change in Control or with his reporting responsibilities or titles with the
Bank in effect at such time, regardless of Officer’s resulting position; or

(ii) Officer’s annual base salary rate is reduced below the annual amount in effect as
of the effective date of a Change in Control or as the same shall have been increased from
time to time following such effective date; or

(iii) Officer’s life insurance, medical or hospitalization insurance, disability
insurance, stock options plans, stock purchase plans, deferred compensation plans,
management retention plans, retirement plans or similar plans or benefits being provided by
the Bank to the Officer as of the effective date of the Change in Control are reduced in
their level, scope or coverage, or any such insurance, plans or benefits are eliminated,
unless such reduction or elimination applies proportionately to all salaried employees of
the Bank who participated in such benefits prior to such Change in Control; or

(iv) Officer is transferred to a location, which is an unreasonable distance from his
current principal work location without the Officer’s express written consent.

A Termination Event shall be deemed to have occurred on the date such action or event is
implemented or takes effect.

(c) In the event that the Officer terminates this Agreement pursuant to this Paragraph 10, the
Bank will be obligated to pay or cause to be paid to Officer liquidated damages in an amount equal
to 2.99 times the Officer’s “base amount” as defined in Section 280G(b)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”).

(d) For the purposes of this Agreement, the term Change in Control shall mean any of the
following events:

(i) After the effective date of this Agreement, any “person” (as such term is defined
in Section 7(j)(8)(A) of the Change in Bank Control Act of 1978), directly or indirectly,
acquires beneficial ownership of voting stock, or acquires beneficial ownership of voting
stock, or acquires irrevocable proxies or any combination of voting stock and irrevocable
proxies, representing twenty-five percent (25%) or more of any class of voting securities of
the Bank, or acquires control of, in any manner, the election of a majority of the Board of
Directors of the Bank; or

(ii) The Bank consolidates or merges with or into another corporation, association or
entity, or is otherwise reorganized, where the Bank is not the surviving corporation in such
transaction; or

(iii) All, or substantially all, of the assets of the Bank are sold or otherwise
transferred to or are acquired by any other corporation, association or other person, entity
or group.

Notwithstanding the other provisions of this Paragraph 10, a transaction or event shall not be
considered a Change in Control if, prior to the consummation or occurrence of such transaction or
event, Officer and Bank agree in writing that the same shall not be treated as a Change in Control
for purposes of this Agreement.

(e) Such amounts payable pursuant to this Paragraph 10 shall be paid, at the option of the
Officer, either in one lump sum or in equal monthly payments following termination of this
Agreement.

(f) Following a Termination Event, which gives rise to Officer’s rights hereunder, the Officer
shall have twelve (12) months from the date of occurrence of the Termination Event to terminate
this Agreement pursuant to this Paragraph 10. Any such termination shall be deemed to have
occurred only upon delivery to the Bank (or to any successor corporation) of written notice of
termination that describes the Change in Control and the Termination Event. If Officer does not so
terminate this Agreement within such twelve-month period, he shall thereafter have no further
rights hereunder with respect to that Termination Event, but shall retain rights, if any, hereunder
with respect to any other Termination Event as to which such period has not expired.

(g) It is the intent of the parties hereto that all payments made pursuant to this Agreement
be deductible by the Bank for federal income tax purposes and not result in the imposition of an
excise tax on the Officer. Notwithstanding anything contained in this Agreement to the contrary,
any payments to be made to or for the benefit of the Officer which are deemed to be “parachute
payments” as that term is defined in Section 280G of the Code, shall be modified or reduced to the
extent deemed to be necessary by the Chief Executive Officer to avoid the imposition of excise
taxes on the Officer under Section 4999 of the Code or the disallowance of a deduction to the Bank
under Section 280(a) of the Code.

(h) In the event any dispute shall arise between the Officer and the Bank as to the terms or
interpretation of this Agreement, including this Paragraph 10, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Officer to enforce the terms of this
Paragraph 10 or in defending against any action taken by the Bank, the Bank shall reimburse the
Officer for all costs and expenses, proceedings or actions, in the event the Officer prevails in
any such action.

11. Successors and Assigns.

(a) This Agreement shall inure to the benefit of and be binding upon any corporate or other
successor of the Bank which shall acquire, directly or indirectly, by conversion, merger, purchase
or otherwise, all or substantially all of the assets of the Bank.

(b) Since the Bank is contracting for the unique and personal skills of the Officer, the
Officer shall be precluded from assigning or delegating his rights or duties hereunder without
first obtaining the written consent of the Bank.

12. Modification; Waiver; Amendments. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed
by the Officer and on behalf of the Bank by such officer as may be specifically designated by the
Chief Executive Officer. No waiver by either party hereto, at any time, of any breach by the other
party hereto of, or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No amendment or addition to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise provided.

13. Applicable Law. This Agreement shall be governed in all respects whether as to
validity, construction, capacity, performance or otherwise, by the laws of North Carolina, except
to the extent that federal law shall be deemed to apply.

14. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.

15. Review of Agreement. The Officer agrees that he has carefully read this
Agreement, that the Bank has encouraged him to seek the assistance of counsel in reviewing this
Agreement, that he understands each provision of this Agreement, and that he voluntarily enters
into this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
hereinabove written.

SOUTHERN COMMUNITY BANK AND TRUST

By: /s/ F. Scott Bauer 

F. Scott Bauer

Chairman of the Board

OFFICER

/s/ David W. Hinshaw

David W. HinshawSouthern Union First Amendment

    Exhibit
      10.a

    
 

    FIRST
      AMENDMENT TO

    THIRD
      AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

    

    

    THIS
      FIRST AMENDMENT TO THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (the
      “Amendment”) is made effective as of November 9, 2004, by and among SOUTHERN
      UNION COMPANY, a Delaware corporation (the “Borrower”), the financial
      institutions listed on the signature pages of the Credit Agreement (as
      hereinafter defined) (individually the “Bank” and collectively the “Banks”) and
      JPMORGAN CHASE BANK, a New York banking corporation (“JPMorgan”), in its
      capacity as agent (the “Agent”) for the Banks.

    

    RECITALS:

    

    WHEREAS,
      the Borrower, the Banks and the Agent have executed a certain Third Amended
      and
      Restated Revolving Credit Agreement dated effective May 28, 2004 (the “Credit
      Agreement”); and

    

    WHEREAS,
      the Majority Banks, the Agent and the Borrower desire to amend the Credit
      Agreement in certain respects.

    

    NOW,
      THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
      consideration the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    

    AGREEMENTS:

    

    

    1. Amendment
      of Definitions.
      The
      definitions of “Panhandle Eastern”, “Southern Union Panhandle” and “Subsidiary”
      contained in Section
      1
      of the
      Credit Agreement are hereby amended and restated in their entirety to read
      as
      follows:

    

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

    

    “Southern
      Union Panhandle”
      shall
      mean Southern Union Panhandle LLC, a Delaware limited liability
      company.

    

    “Subsidiary”
      of a
      Person shall mean a corporation, partnership, limited liability company or
      other
      business entity of which a majority of the shares of securities or other
      interests having ordinary voting power for the election of directors or other
      governing body (other than securities or interests having such power only by
      reason of the happening of a contingency) are at the time beneficially owned,
      or
      the management of which is otherwise controlled, directly, or indirectly through
      one or more intermediaries, or both, by such Person.

    

    2. New
      Definitions.
      The
      following additional definitions are hereby added to Section
      1
      of the
      Credit Agreement:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    “Additional
      Offering”
      shall
      mean, collectively, the issuance, offering and sale in (a) any offering or
      issuance of capital stock, Equity-Preferred Securities or any other equity
      interests in the Borrower (to the extent permitted under Section 10.5), so
      long
      as all net cash proceeds thereof are applied in the following order: (i) first,
      (x) if the Southern Union Panhandle Bridge Loan is outstanding, to paying in
      full the Southern Union Panhandle Bridge Loan or (y) if the Southern Union
      Panhandle Bridge Loan is not outstanding (including, for avoidance of doubt,
      a
      funding of the Southern Union Panhandle Bridge Loan substantially simultaneously
      with the consummation of such a public offering), to financing a portion of
      the
      acquisition costs for the Cross Country Acquisition and (ii) second, to repaying
      other Debt of the Borrower, or (b) if all amounts owing under the Southern
      Union
      Panhandle Bridge Loan shall not have been repaid within three months after
      the
      Cross Country Acquisition Closing Date, an offering made pursuant to Rule 144A
      of the Securities Act of debt securities of the Borrower, Southern Union
      Panhandle or Panhandle Eastern, so long as all net cash proceeds from any such
      offering are applied to paying in full the Southern Union Panhandle Bridge
      Loan.

    

    “CCE
      Acquisition”
      shall
      mean CCE Acquisition LLC, a Delaware limited liability company formed by the
      Borrower for the purpose of ultimately owning and holding 50% of all issued
      and
      outstanding equity interest in CCE Holdings.

    

    “CCE
      Group”
      means
      CCE Holdings and its Subsidiaries.

    

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

    

    “CCE
      Holdings LLC Agreement”
      shall
      mean the Limited Liability Company Agreement of CCE Holdings dated as June
      18,
      2004, as amended from time to time, among the members of CCE
      Holdings.

    

    “Cross
      Country”
      shall
      mean CrossCountry Energy, LLC, a Delaware limited liability
      company.

    

    “Cross
      Country Acquisition”
      shall
      mean the acquisition by CCE Holdings of 100% of all issued and outstanding
      equity interest in Cross Country in accordance with the Cross Country
      Acquisition Agreement, so long as such acquisition is in substantial compliance
      with the following specified terms:

    

    (a) immediately
      after the consummation of such acquisition, Cross Country is a wholly-owned
      Subsidiary of CCE Holdings;

    

    (b) the
      aggregate consideration paid for all equity interest in Cross Country shall
      be
      approximately $2,450,000,000 (which amount includes the assumption of
      approximately $461,000,000 of outstanding Debt of Transwestern Pipeline Company
      and is subject to customary purchase price adjustment as set forth in the Cross
      Country Acquisition Agreement);

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) neither
      the Borrower nor any of its Subsidiaries shall have, incur or assume any
      liability with respect to any Debt of Cross Country and its Subsidiaries
      immediately after the consummation of such acquisition; and

    

    (d) all
      material requisite approvals and consents from any Governmental Authority with
      respect to such acquisition shall have been received by the Borrower and its
      Subsidiaries in a form acceptable to the Agent.

    

    “Cross
      Country Acquisition Agreement”
      shall
      mean that certain Purchase Agreement dated as of June 24, 2004 and amended
      by
      Amendment No. 1 dated as of September 1, 2004, by and among Enron Operations
      Services, LLC, Enron Transportation Services, LLC, EOC Preferred, L.L.C. and
      Enron Corp., as sellers, and CCE Holdings, as purchaser, as the same may
      hereafter be amended (the form of any such amendment to be approved by the
      Agent, such approval not to be unreasonably withheld, conditioned or
      delayed).

    

    “Cross
      Country Acquisition Closing Date”
      means
      the date on which the Cross Country Acquisition is consummated.

    

    “Southern
      Union Panhandle Bridge Loan”
      shall
      mean a short-term credit facility to be obtained by Southern Union Panhandle
      for
      purposes of financing a portion of the acquisition costs for the Cross Country
      Acquisition, in an aggregate principal amount not to exceed (i) $590,500,000
      less (ii) the net cash proceeds of the Additional Offering applied to finance
      the acquisition costs for the Cross County Acquisition, so long as such
      short-term credit facility is obtained upon terms and conditions substantially
      similar to the terms and conditions set forth in the term sheet attached hereto
      as Exhibit D with such changes as the Agent reasonably determines are not
      material to the Banks.

    

    3. Pledge
      of CCE Holdings Equity Representation and Warranty.
      A new
Section
      7.18
      is
      hereby added to the Credit Agreement to read as follows:

    

    7.18 No
      Agreements Prohibiting Pledge of CCE Holdings Equity.
      Except
      for the applicable negative covenants of this Agreement, the Term Loan Facility,
      the Southern Union Panhandle Bridge Loan and the CCE Holdings LLC Agreement,
      neither the Borrower nor Southern Union Panhandle nor CCE Acquisition is a
      party
      to any contract or other agreement with any Person that directly or indirectly
      prohibits the Borrower or Southern Union Panhandle or CCE Acquisition from
      granting any Lien against the equity interests in CCE Holdings (whether common,
      preferred or another class of equity ownership) at any time owned and held
      by
      the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
      or any of its Subsidiaries.

    

    4. Additional
      Offering Affirmative Covenant.
      A new
Section
      9.12
      is
      hereby added to the Credit Agreement to read as follows:

    

    9.12 Additional
      Offering.
      Within
      six months after the Cross Country Acquisition Closing Date, the Borrower agrees
      to (a) cause the Additional Offering to be consummated in full, and (b) if
      the
      Southern Union Panhandle Bridge Loan is then 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    outstanding,
      cause the proceeds received by the Borrower from such Additional Offering to
      be
      utilized to fully pay the Southern Union Panhandle Bridge Loan.

    

    5. Amendment
      of Capital Requirements Negative Covenant.
      Sections
      10.1(a)
      and
10.1(b)
      of the
      Credit Agreement are hereby amended and restated in their entirety to hereafter
      be and read as follows:

    

    (a) permit
      its Consolidated Net Worth at the end of any fiscal quarter to be less than
      the
      sum of (i) $1,267,663,000; (ii) 40% of Consolidated Net Income (if positive)
      for
      the period commencing on January 1, 2004 and ending on the date of
      determination, and treated as a single accounting period; (iii) the difference
      between (A) 100% of the net proceeds of any issuance of capital or preferred
      stock or any other Equity-Preferred Securities by the Borrower or any
      consolidated Subsidiary, including without limitation, the Additional Offering,
      received by the Borrower or such consolidated Subsidiary at any time after
      January 1, 2004; and (B) the aggregate amount of all redemption or repurchase
      payments hereafter made, if any, by the Borrower and any such consolidated
      Subsidiary in connection with the repurchase by the Borrower or any such
      consolidated Subsidiary of any of their respective capital or preferred stock;
      (iv) without duplication, the difference between (A) 100% of the net proceeds
      heretofore and hereafter received by the Borrower and any consolidated
      Subsidiary in respect of the issuance by the Borrower or such consolidated
      Subsidiary of the Structured Securities, and (B) the aggregate amount of all
      redemption payments hereafter made, if any, by the Borrower and any such
      consolidated Subsidiary in connection with the redemption of any of the
      Structured Securities; and (v) the minority interests in the Borrower’s
      Subsidiaries; or

    

    (b) permit
      the ratio of its Consolidated Total Indebtedness to its Consolidated Total
      Capitalization to be greater than (i) 0.65 to 1.00 at the end of any fiscal
      quarter ending prior to the Cross Country Acquisition Closing Date; (ii) 0.70
      to
      1.00 at the end of any fiscal quarter ending on or after the Cross Country
      Acquisition Closing Date, but before the consummation of the Additional
      Offering; and (iii) 0.65 to 1.00 at the end of any fiscal quarter ending on
      or
      after the consummation of the Additional Offering.

    

    6. Amendment
      of Liens Negative Covenant.
      Section
      10.2(d)
      of the
      Credit Agreement is hereby amended and restated in its entirety to hereafter
      be
      and read as follows:

    

    (d) (i)
      Liens
      on property existing at the time of acquisition thereof by the Borrower or
      any
      Subsidiary, including without limitation, (A) any property acquired by the
      Borrower in consummating and finalizing any of the Prior Acquisitions, (B)
      any
      Liens existing on any property of Panhandle Eastern or any of its Subsidiaries
      to secure existing Debt of Panhandle Eastern or any of its Subsidiaries as
      of
      the Closing Date and (C) any Liens against any property of Panhandle Eastern
      or
      any of its Subsidiaries to secure Panhandle Eastern Refinancing Debt
      (provided
      such
      Liens are limited to property of Panhandle Eastern or any of its Subsidiaries
      securing the Debt so extended, refinanced, renewed, replaced, defeased or
      refunded), (ii) Liens against (A) the stock and other equity interests in
      Panhandle Eastern, (B) the equity interests in CCE Holdings held by the Borrower
      and its Subsidiaries and (C) Debt owed to Southern Union Panhandle by

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Panhandle
      Eastern and CCE Acquisition, in each case to secure the Southern Union Panhandle
      Bridge Loan, or (iii) purchase money Liens placed on an item of real or personal
      property purchased by the Borrower or any Subsidiary to secure a portion of
      the
      purchase price of such property; provided
      that no
      such Lien may encumber or cover any other property of the Borrower or any
      Subsidiary.

    

    7. Amendment
      of Debt Negative Covenant.
      Sections
      10.3(a)
      and
10.3(g)
      of the
      Credit Agreement are hereby amended and restated in their entirety to hereafter
      be and read as follows:

    

    (a) Debt
      evidenced by the Notes or the Facility Letter of Credit Obligations or
      outstanding under the Term Loan Facility or the Southern Union Panhandle Bridge
      Loan, or issued pursuant to the Additional Offering and any Equity-Preferred
      Securities (to the extent the same constitutes Debt) not in default, as well
      as
      (i) Debt of Panhandle Eastern and/or any of its Subsidiaries outstanding as
      of
      the Closing Date, (ii) any Panhandle Eastern Refinancing Debt, (iii) any working
      capital credit facility or facilities provided directly to Panhandle Eastern
      and/or any of Panhandle Eastern’s Subsidiaries by any party other than the
      Borrower, so long as the principal amount of all such outstanding working
      capital facilities, together with the outstanding principal amount of any
      working capital loans or advances by the Borrower to Panhandle Eastern and/or
      any of Panhandle Eastern’s Subsidiaries, does not exceed (A) $50,000,000 in the
      aggregate at any time that the ratio of Consolidated Total Indebtedness to
      Consolidated Total Capitalization for Panhandle Eastern and Panhandle Eastern’s
      Subsidiaries (excluding the Borrower and all other Subsidiaries of the Borrower
      for purposes of such calculation) is greater than 0.65 to 1.00 and (B)
      $75,000,000 in the aggregate at any time that the ratio of Consolidated Total
      Indebtedness to Consolidated Total Capitalization for Panhandle Eastern and
      Panhandle Eastern’s Subsidiaries (excluding the Borrower and all other
      Subsidiaries of the Borrower for purposes of such calculation) is less than
      or
      equal to 0.65 to 1.00, (iv) Guaranty by Panhandle Eastern of the obligations
      of
      Southern Union Panhandle under the Southern Union Panhandle Bridge Loan, (v)
      any
      loans or advances of proceeds of the Additional Offering by the Borrower (or
      Panhandle Eastern, if applicable) to CCE Acquisition for purposes of financing
      the Cross Country Acquisition and (vi) any loans or advances by the Borrower
      to
      Panhandle Eastern and/or any of the Borrower’s other Subsidiaries permitted
      under Section 10.4(b).

    

    (g) additional
      Debt of the Borrower and Structured Securities of the Borrower and the Southern
      Union Trusts, provided that after giving effect to the issuance thereof, there
      shall exist no Default or Event of Default; and: (i) the ratio of Consolidated
      Total Indebtedness to Consolidated Total Capitalization shall be no greater
      than
      (A) 0.65 to 1.00 at all times prior to the Cross Country Acquisition Closing
      Date, (B) 0.70 to 1.00 at all times on and after the Cross Country Acquisition
      Closing Date, but before the consummation of the Additional Offering and (C)
      0.65 to 1.00 at all times on or after the consummation of the Additional
      Offering; (ii) the ratio of EBDIT for the four fiscal quarters most recently
      ended to pro forma Cash Interest Expense for the following four fiscal quarters
      shall be no less than 2.00 to 1.0 at all times; provided,
      however,
      that if
      the additional Debt for which the determinations required to be made by this
      subparagraph 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (g)
      will
      be used to finance in whole or in part the consideration to be paid by the
      Borrower for the acquisition of any entity otherwise permitted under the terms
      of this Agreement, the determination of EBDIT for purposes of this ratio shall
      include not only the EBDIT of the Borrower and its Subsidiaries for the four
      fiscal quarters most recently ended, but shall also include the EBDIT of such
      entity to be acquired for such four fiscal quarters most recently ended; and
      (iii) (A) such Debt and Structured Securities shall have a final maturity or
      mandatory redemption date, as the case may be, no earlier than the Maturity
      Date
      and shall mature or be subject to mandatory redemption or mandatory defeasance
      no earlier than the Maturity Date (as so extended) and shall be subject to
      no
      mandatory redemption or “put” to the Borrower or any Southern Union Trust
      exercisable, or sinking fund or other similar mandatory principal payment
      provisions that require payments to be made toward principal, prior to such
      Maturity Date (as so extended); or (B) (x) such additional Debt shall have
      a
      final maturity date prior to the Maturity Date, (y) such additional Debt shall
      not exceed Two Hundred Fifty Million Dollars ($250,000,000.00) in the aggregate
      plus Twenty Million Dollars ($20,000,000.00) of reimbursement obligations
      incurred in connection with Non-Facility Letters of Credit issued by a Bank
      or
      Banks or by any other financial institution; provided, however,
      that
      for purposes of determining the aggregate amount of such additional Debt for
      purposes of this subclause (y), the Debt of the Borrower under the Term Loan
      Facility shall not be included and such Debt under the Term Loan Facility shall
      be deemed to be permitted Debt for purposes of this subclause (y), and (z)
      such
      additional Debt shall be borrowed from a Bank or Banks as a loan or loans
      arising independent of this Agreement, or the Term Loan Facility or shall be
      borrowed from a financial institution that is not a Bank under this Agreement
      or
      the Term Loan Facility.

    

    8. Amendment
      of Investment Negative Covenant.
      (a)
Sections
      10.4(a)
      and
10.4(b)
      of the
      Credit Agreement are hereby amended and restated in their entirety to hereafter
      be and read as follows:

    

    (a) stock
      or
      other equity interests of (i) the Subsidiaries named in Section 7.1; (ii) other
      entities that are acquired by the Borrower or any Subsidiary but that are
      promptly merged with and into the Borrower; (iii) Southern Union Panhandle,
      Panhandle Eastern and any Subsidiaries of Panhandle Eastern acquired as a result
      of the Panhandle Eastern Acquisition; (iv) CCE Holdings; and (v) the same
      Qualifying Entities as the Qualifying Entities under subparagraph (ii) of the
      definition of "Qualifying Assets,” provided that at any time the aggregate
      purchase price paid for such stock and other equity interests in such Qualifying
      Entities then held by the Borrower as of the applicable determination date,
      including the aggregate amount of Debt assumed or deemed incurred by the
      Borrower in connection with the purchase of such stock and other equity
      interests, is not more than twenty percent (20%) of the Consolidated Net Worth
      of the Borrower and its Subsidiaries as of the applicable determination
      date.

    

    (b) loans
      or
      advances to a Subsidiary, as well as advances of proceeds of the Additional
      Offering by the Borrower or Panhandle Eastern to CCE Acquisition for purposes
      of
      facilitating the consummation of the Cross Country Acquisition; provided,
      however, that the principal amount of such loans and advances for working
      capital 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    purposes
      at any time outstanding to Panhandle Eastern and/or any of Panhandle Eastern’s
      Subsidiaries, together with the principal amount of any outstanding working
      capital credit facility or facilities provided directly to Panhandle Eastern
      and/or any of Panhandle Eastern’s Subsidiaries by any party other than the
      Borrower, does not exceed $25,000,000 in the aggregate at any time.

    

    (b) Section
      10.4(h)
      of the
      Credit Agreement is hereby renamed as
      Section 10.4(i),
      and a
      new Section
      10.4(h)
      is
      hereby added to the Credit Agreement to read as follows:

    

    (h) loans
      or
      advances to any member of the CCE Group by the Borrower or any Subsidiary not
      otherwise permitted under the other provisions of this Section 10.4, so long
      as
      the sum of such loans and advances does not exceed $25,000,000 in the aggregate
      at any time.

    

    9. No
      Agreements Prohibiting Pledge of CCE Holdings Equity.
      A new
Section
      10.18
      is
      hereby added to the Credit Agreement to read as follows:

    

    10.18 No
      Agreements Prohibiting Pledge of CCE Holdings Equity.
      Neither the Borrower nor Southern Union Panhandle nor CCE Acquisition will
      enter
      into any contract or other agreement with any Person that directly or indirectly
      prohibits the Borrower or Southern Union Panhandle or CCE Acquisition from
      granting any Lien against the equity interests in CCE Holdings (whether common,
      preferred or another class of equity ownership) at any time owned and held
      by
      the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
      or any of its Subsidiaries, other than the applicable negative covenants of
      this
      Agreement, the Term Loan Facility, the Southern Union Panhandle Bridge Loan
      and
      the CCE Holdings LLC Agreement.

    

    10. New
      Exhibit.
      A new
Exhibit
      D
      in the
      form of Exhibit
      D
      attached
      to this Amendment, is hereby added to the Credit Agreement.

    

    11. Other
      Sections.
      Except
      as expressly amended by this Amendment, the provisions of the Credit Agreement
      and the Notes shall remain in full force and effect, and the Borrower
      acknowledges and reaffirms its liability to the Banks thereunder. In the event
      of any inconsistency between this Amendment and the terms of the Credit
      Agreement or the Notes, this Amendment shall govern.

    

    12. Representations
      and Warranties.
      The
      Borrower represents and warrants to the Banks as of the Borrower’s execution of
      this Amendment and as of the effective date hereof that:

    

    (a) Representations
      and Warranties.
      The
      representations and warranties contained in Section
      7
      of the
      Credit Agreement, as amended hereby, are true and correct, and no Default or
      Event of Default has occurred and is continuing.

    

    (b) Corporate
      Power and Authorization.
      The
      Borrower is duly authorized and empowered to execute, deliver and perform its
      obligations under this Amendment and to make the borrowings provided for in
      the
      Credit Agreement, and all requisite corporate 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    action
      on
      the Borrower’s part for the due execution, delivery and performance of this
      Amendment has been duly and effectively taken.

    

    (c) Binding
      Obligations.
      This
      Amendment constitutes the legal, valid and binding obligation of the Borrower,
      enforceable against the Borrower in accordance with its terms, except as limited
      by Debtor Laws.

    

    (d) No
      Conflict or Resultant Lien.
      The
      execution, delivery and performance of this Amendment and the consummation
      of
      the transactions contemplated herein do not and will not violate any provision
      of, or result in a default under, the certificate of incorporation or bylaws
      of
      the Borrower, or any contract, agreement or instrument or any governmental
      requirement to which the Borrower is subject, or result in the creation or
      imposition of any Lien upon any property of the Borrower (other than as
      contemplated or permitted by the Credit Agreement).

    

    (e) No
      Consent.
      The
      Borrower’s execution, delivery and performance of this Amendment does not
      require the consent or approval of any Person.

    

    13. Miscellaneous.

    

    (a) In
      accordance with the terms of Section 13.2 of the Credit Agreement, this
      Amendment shall become effective when executed and delivered by the Borrower,
      the Agent and the Majority Banks. 

    

    (b) No
      Bank,
      by its execution of this Amendment, waives any rights it may have against any
      person not a party hereto.

    

    (c) This
      Amendment may be executed in multiple counterparts, each of which shall
      constitute an original instrument, but all of which shall constitute one and
      the
      same Amendment.

    

    (d) All
      capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed to such terms in the Credit Agreement.

    

    (e) The
      invalidity of any one or more covenants, phrases, clauses, sentences or
      paragraphs of this Amendment shall not affect the remaining portion of this
      Amendment, or any part thereof, and in case of any such invalidity, this
      Amendment shall be construed as if such invalid covenants, phrases, clauses,
      sentences or paragraphs had not been inserted. The section headings in this
      Amendment are for convenience only and shall not limit or in any way affect
      the
      meaning of the terms and provisions of this Amendment.

    

    (f) THIS
      AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF TEXAS AND THE UNITED STATES OF AMERICA.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    THIS
      WRITTEN AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT, THE NOTES AND THE LOAN
      DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
      CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT
      OF THE PARTIES.

    

    THERE
      ARE
      NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective
      as of the date first above written.

    

    

    

    

    
      	 	
               

              SOUTHERN
                UNION COMPANY

            
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    
      	 	
              JPMORGAN
                CHASE BANK, for itself and 

              as
                Agent for the Banks

            
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              FLEET
                NATIONAL BANK

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              WESTLB
                AG, NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              KBC
                BANK N.V.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              WELLS
                FARGO BANK, N.A.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              CALYON
                NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              MERRILL
                LYNCH BANK USA

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              SOVEREIGN
                BANK

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              MANUFACTURERS
                AND TRADERS TRUST COMPANY

            
	
              By:

            	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 

    

    

    

    
      	
              THE
                NORINCHUKIN BANK, NEW YORK BRANCH

            
	
              By:

            	 	 
	
              Name:

            	 	 
	
              Title:

            	 	 

    

    

    

    
      	
              BAYERISCHE
                LANDESBANK,

              CAYMAN
                ISLANDS BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              BANK
                HAPOALIM B.M.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              CREDIT
                SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS
                BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              PNC
                BANK, NATIONAL ASSOCIATION

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              SUMITOMO
                MITSUI BANK CORP., NEW YORK

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              UFJ
                BANK LIMITED, NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              MIZUHO
                CORPORATE BANK (USA)

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              CITIZENS
                BANK OF RHODE ISLAND

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      	
              THE
                BANK OF TOKYO-MITSUBISHI, LTD.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              CHANG
                HWA COMMERCIAL BANK, LTD.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              BANK
                OF CHINA, NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              ROYAL
                BANK OF CANADA

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              UMB
                BANK, N.A.

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              BANK
                OF COMMUNICATIONS, NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              BANK
                OF TAIWAN, NEW YORK AGENCY

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
      	
              CHINATRUST
                COMMERCIAL BANK, NEW YORK BRANCH

            
	
              By:

            	 
	
              Name:

            	 
	
              Title:

            	 

    

    

    

    
       

       

       

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      D

    Summary
      of Terms and Conditions

    Southern
      Union Panhandle Bridge Loan

    

    
      	
              Borrower:

            	
              Southern
                Union Panhandle LLC (the “Borrower”).

            
	
              Guarantor:

            	
              Panhandle
                Eastern Pipe Line Company, LP or its successor (“Panhandle”),
                referred to herein as the “Guarantor”,
                and the Guarantor, together with the Borrower, are sometimes referred
                to
                herein as the “Obligors”.
                If Southern Union Company (the "Parent")
                holds any direct ownership interest in Panhandle, it shall also become
                a
                Guarantor and an Obligor hereunder, provided
                that
                the Parent's guarantee shall be limited to the pledge of its ownership
                interest in Panhandle. 

            
	
              Facility
                Description:

            	
              Up
                to $590,500,000 term loan (the “Facility”)
                with a maturity of six months from the date of closing of the Cross
                Country Acquisition (the “Closing
                Date”),
                but in no event later than June 17, 2005 (the “Maturity
                Date”).
                The Facility will be available for drawdown until the Closing Date,
                but in
                no event later than December 17, 2004.

            
	
              Security:

            	
              The
                Facility will be secured by a perfected first priority security interest
                in (i) all indebtedness owed to the Borrower by Panhandle and CCE
                Acquisition LLC (“CCE
                Acquisition”)
                and (ii) (A) 100% of ownership interest in Panhandle and (B) all
                capital
                stock owned by the Borrower of CCE Acquisition.

            
	
              Purpose:

            	
              The
                Facility will be used (i) to finance a portion of the Cross Country
                Acquisition (as defined in the accompanying Commitment Letter) and
                (ii) to
                pay fees and expenses incurred in connection with the Cross Country
                Acquisition.

            
	
              Joint
                Lead Arrangers and Bookrunners:

            	
              J.P.
                Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc.
                (together, the “Lead
                Arrangers”).

            
	
              Administrative
                Agent:

            	
              JPMorgan
                Chase Bank (“JPMC”
                or the “Administrative
                Agent”).

            
	
              Syndication
                Agent:

            	
              Merrill
                Lynch Capital Corp. 

            
	
               

              Borrowing
                Options:

            	
               

              LIBOR
                and ABR.

               

              ABR
                means the higher of the Administrative Agent’s prime rate and the federal
                funds rate + 0.50%.

               

              LIBOR
                adjustments for Regulation D will be charged by Lenders
                individually.

            
	
              Pricing:

            	
              Pricing
                on the commitments and loans will be at the rates per annum set forth
                in
                the attached Pricing Schedule, expressed in basis points per
                annum.

            
	
              Interest
                Payments:

            	
              At
                the end of each applicable Interest Period.

            
	
              Interest
                Periods:

            	
              1,
                2 or 3 months.

            
	
              Drawdown:

            	
              A
                single drawdown on the Closing Date.

            
	
              Optional
                Prepayments:

            	
              ABR
                Loans may be prepaid at any time on one business day's notice. LIBOR
                Loans
                may be prepaid upon at least three business days’ notice subject to
                funding losses. Amounts prepaid may not be reborrowed.

            
	
              Mandatory
                Commitment Reductions and Prepayments:

            	
              100%
                of the net cash proceeds from the issuance or incurrence after the
                Closing
                Date of debt, equity or equity-like securities by the Parent or the
                Borrower (other than from the issuance of the Parent’s common stock of up
                to $87 million to the extent the proceeds are used for general corporate
                purposes) shall be applied to reduce the commitments under the Facility
                (if still in existence) or to prepay the Facility. 

            
	
              Representations
                and Warranties:

            	
              Customary
                for credit agreements of this nature, with respect to the Obligors
                and
                their subsidiaries (including Cross Country and its subsidiaries),
                including but not limited to:

               

              1. Existence
                and qualification; power; compliance with laws.

              2. Authority;
                no conflict.

              3. No
                governmental approvals required.

              4. Enforceability.

              5. Litigation.

              6. No
                default.

              7. ERISA
                compliance.

              8. Use
                of proceeds; margin regulations.

              9. Tax
                liability.

              10. Financial
                statements; no material adverse change.

              11. Environmental
                compliance.

              12. Public
                Utility Holding Company Act; Investment Company Act.

              13. Disclosure.

              14. Collateral
                matters.

              15. Cross
                Country Acquisition matters.

            
	
              Conditions:

            	
              Customary
                in credit agreements of this nature, including but not limited
                to:

               

              1. Absence
                of default.

              2. Accuracy
                of representations and warranties.

              3. Negotiation
                and execution of satisfactory credit agreement and customary closing
                documentation (including legal opinions and solvency
                certifications).

              4. Payment
                of fees.

              5. Absence
                of (a) material adverse condition or material adverse change in or
                affecting the business, operations, property, condition (financial
                or
                otherwise) or prospects of the Parent and its subsidiaries, taken
                as a
                whole or (b) any event or condition that would result in a closing
                condition under the Purchase Agreement not being satisfied and thereby
                permitting the “Purchaser” thereunder to not consummate the transactions
                contemplated by the Purchase Agreement.

              6. The
                fact that the Cross Country Acquisition shall close simultaneously
                with
                the closing of the Facility, on terms and conditions substantially
                as set
                forth in (i) the Purchase Agreement dated as of June 24, 2004, as
                amended
                by Amendment No.1 dated as of September 1, 2004 relating to the Cross
                Country Acquisition (including without limitation, the closing conditions
                of the entry of specified Bankruptcy Court orders and receipt of
                all
                material requisite governmental consents), modified to require pre-closing
                conversion of corporate subsidiaries of Cross Country to Limited
                Liability
                Companies, and (ii) the September 1, 2004 execution drafts of the
                letter
                agreement and term sheet relating to the joint venture to be formed
                by
                affiliates of the Parent and General Electric Capital Corporation
                in
                connection with the Cross Country Acquisition (the “Joint
                Venture”),
                in each case with such changes thereto as the Lenders may approve
                in their
                sole discretion. 

              7. The
                fact that the Parent shall have received all amendments or consents
                under
                its other existing financing arrangements that are necessary or reasonably
                desirable to permit the consummation of (i) the Cross Country Acquisition
                on the terms contemplated by the Purchase Agreement and the Joint
                Venture
                documents and (ii) the Facility on the terms contemplated hereby
                (including without limitation, the security arrangements contemplated
                hereby), all of which shall be in form and substance satisfactory
                to the
                Lenders.

              8. Execution
                of satisfactory management services agreements.

            
	
              Covenants
                of each Obligor:

            	
              Customary
                in credit agreements of this nature, and applicable to the Obligors
                and
                their subsidiaries (including Cross Country and its subsidiaries)
                including but not limited to:

               

              1. Financial
                statements.

              2. Certificates,
                notice and other information.

              3. Preservation
                of existence; maintenance of corporate separateness.

              4. Merger,
                consolidation, etc.

              5. Sale
                of assets.

              6. Maintenance
                of insurance.

              7. Payment
                of taxes and other potential liens.

              8. Compliance
                with laws.

              9. Environmental
                laws.

              10. Compliance
                with ERISA.

              11. Negative
                pledge

              12. Accounting
                changes.

              13. Limitation
                on debt of the Parent.

              14. Prohibition
                on dividends and other restricted payments (including intercompany
                loans)
                by the Parent while a default exists.

              15. Financial
                covenants TBD.

              16. Satisfactory
                SEC disclosure regarding the loan.

              17. Restriction
                on agreements that limit, directly or indirectly, the Obligors from
                granting a lien on the stock or other equity interests in Cross Country
                as
                security for obligations under the Facility, with exceptions for
                negative
                pledges under existing credit agreements of the Obligors to be
                specified.

              18. Restriction
                on agreements that limit, directly or indirectly, Cross Country and
                its
                subsidiaries (including Citrus Corp. and its subsidiaries) from paying
                dividends on its capital stock, other than those existing at the
                Closing
                Date or contained in the documentations for the debt to be issued
                by Cross
                Country Holdings, LLC (“Holdings”)
                and its subsidiaries for the purpose of financing the acquisition
                costs
                for the Cross Country Acquisition (and any refinancing
                thereof).

              19. Limitation
                on restricted payments.

              20. Limitation
                on acquisitions.

              21. Restriction
                on any amendment of the Joint Venture documents that is materially
                adverse
                to the Lenders.

              22. Collateral
                matters.

            
	
              Events
                of Default:

            	
              Customary
                in credit agreements of this nature, including but not limited to
                the
                following:

               

              1. Failure
                to pay any principal when due.

              2. Failure
                to pay interest and fees within five business days of the due
                date.

              3. Failure
                to meet covenants (with grace periods, where appropriate).

              4. Representations
                or warranties false in any material respect when made.

              5. Cross
                default to Material Debt of the Parent or any of its subsidiaries,
                including Cross Country and its subsidiaries (to be defined as debt
                in a
                principal amount of at least $10 million).

              6. Change
                of ownership or control of the Parent.

              7. (a)
                Failure of the Parent to own 100% of the capital stock of the Borrower,
                (b) failure of an affiliate of the Parent to own at least 50% of
                the
                aggregate ownership interest in Holdings or (c) an affiliate of the
                Parent
                ceasing to be the managing member of Holdings.

              8. Credit
                Agreement or any guarantee shall be unenforceable or invalid.

              9. Other
                usual defaults with respect to the Obligors, including but not limited
                to
                insolvency, bankruptcy, ERISA and judgment defaults.

            
	
              Increased
                Costs/Change of

              Circumstances:

            	
              The
                credit agreement will contain customary provisions protecting the
                Lenders
                in the event of unavailability of funding, illegality, increased
                costs and
                funding losses.

            
	
              Indemnification:

            	
              The
                Obligors will indemnify the Lenders against all losses, liabilities,
                claims, damages, or expenses relating to their loans, the Borrower's
                use
                of loan proceeds or the commitments, including but not limited to
                reasonable attorneys’ fees and settlement costs (except such as result
                from the indemnitee’s gross negligence or willful
                misconduct).

            
	
              Transfers
                and Participations:

            	
              Lenders
                will have the right to transfer or sell participations in their loans
                or
                commitments with the transferability of voting rights in the case
                of
                participations limited to changes in principal, rate, fees and term.
                Assignments, which must be in amounts of at least $5 million,
                will be
                allowed with the consent of the Administrative Agent and (so long
                as no
                Event of Default as to it has occurred and is continuing) the Borrower
                (such consent not to be unreasonably withheld); provided
                that assignments will be allowed within the Lender group and to a
                Lender’s
                affiliates without any consent requirement. In connection with each
                assignment, the assignor Lender will pay the Administrative Agent
                a $3,500
                processing fee.

            
	
              Required
                Lenders:

            	
              Majority
                of the aggregate amount of the commitments.

            
	
              Expenses:

            	
              The
                Obligors will pay all legal and other reasonable out-of-pocket expenses
                of
                the Lead Arrangers and the Administrative Agent to this transaction
                and
                any subsequent amendments or waivers, including the expenses and
                reasonable fees of Davis Polk & Wardwell, special counsel to the
                Administrative Agent. In addition, all costs and expenses of the
                Lenders
                in connection with default and enforcement are to be paid by the
                Borrower.

            
	
              Governing
                Law:

            	
              New
                York.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Pricing
      Schedule

    

    Applicable
      Margins:
      The
“Eurodollar
      Margin”
      applicable to outstanding LIBOR Loans shall be determined in accordance with
      the
      following grid. The “ABR
      Margin”
      applicable to outstanding ABR Loans shall be the Eurodollar Margin reduced
      by
      1.00%.

    

    
      	
              Rating
                of the Borrower’s unsecured,
                non-credit enhanced Senior Funded Debt

            	
              Additional
                Percentage 

              Per
                Annum

            
	
              Level
                1: Equal to or greater than Baa2 by Moody’s and
                equal to or greater than BBB by S&P

            	
              1.00%

            
	
              Level
                2: Equal to or greater than Baa3 by Moody’s and
                equal to or greater than BBB- by S&P, but less than Level
                1

            	
              1.25%

            
	
              Level
                3: Equal to or greater than Ba1 by Moody’s
                and equal
                to or greater than BB+ by S&P, but less than Level 2

            	
              1.75%

            
	
              Level
                4: Equal to or less than Ba2 by Moody’s or
                equal to or less than BB by S&P

            	
              2.25%

            

    

    

    In
      the
      event that the Borrower withdraws from having its unsecured, non-credit enhanced
      Senior Funded Debt being rated by Moody’s Investors Service, Inc. or Standard
& Poor’s Ratings Group, so that one or both of such ratings services fails
      to rate the Borrower’s unsecured, non-credit enhanced Senior Funded Debt, the
      component of pricing from the grid set forth above for purposes of determining
      the applicable Eurodollar Rate for all Rate Periods commencing thereafter shall
      be 2.25% until such time as the Borrower subsequently causes its unsecured,
      non-credit enhanced Senior Funded Debt to be rated by both of said ratings
      services. 

    

    The
      Applicable Margin shall be payable monthly in arrears on each determination
      date
      based on outstanding loans during the period then
      ended.

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