?Agreement

The Company accepts your resignation effective November 8, 2005.

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

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

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

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

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

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

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

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

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

You and the Company each agrees that neither shall be liable to the other for any claims, liabilities or expenses (other than expenses as expressly provided herein) arising out of or relating to your provision of consulting services to the Company during the Consulting