<PAGE>
                                                                    EXHIBIT 10.8
--------------------------------------------------------------------------------



                      INTERCREDITOR AND SECURITY AGREEMENT



                                      among

                   EOTT ENERGY OPERATING LIMITED PARTNERSHIP,

                     EOTT ENERGY CANADA LIMITED PARTNERSHIP,

                           EOTT ENERGY LIQUIDS, L.P.,

                                       and

                    EOTT ENERGY PIPELINE LIMITED PARTNERSHIP

    as debtors and debtors in possession and as joint and several Borrowers,

                                       and

                           EOTT ENERGY PARTNERS, L.P.

                                       and

                       EOTT ENERGY GENERAL PARTNER, L.L.C.

    as debtors and debtors in possession and as joint and several Guarantors,

                                       and

                            STANDARD CHARTERED BANK,

                              LEHMAN BROTHERS INC.

                                       and

                  STANDARD CHARTERED TRADE SERVICES CORPORATION

                       AND VARIOUS OTHER SECURED PARTIES,

                                       and

                             STANDARD CHARTERED BANK
                               as Collateral Agent



                          Dated as of October 18, 2002

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



<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                       Page
                                                                                       ----
<S>                                                                                    <C>
SECTION 1. DEFINITIONS ..................................................................2

        1.1.    Defined Terms ...........................................................2

        1.2.    Other Definitional Provisions ...........................................9

SECTION 2. COLLATERAL AND ACTIONABLE DEFAULTS ...........................................9

        2.1.    Security Interests and Liens in the Collateral ..........................9

        2.2.    General Authority of the Collateral Agent over the Collateral ..........11

        2.3.    Notices of Actionable Defaults; Directions as to Enforcement
                Actions ................................................................12

        2.4.    Right to Initiate Judicial Proceedings; Appointment of Receiver ........13

        2.5.    Exercise of Powers; Instructions of Required Secured Parties ...........13

        2.6.    Remedies Not Exclusive .................................................15

        2.7.    Waiver and Estoppel ....................................................16

        2.8.    Limitation on Collateral Agent's Duty in Respect of Collateral .........17

        2.9.    Limitation by Law ......................................................17

SECTION 3. COLLECTIONS AND ACCOUNTS ....................................................17

        3.1.    Authorized Accounts ....................................................17

        3.2.    Payments from Debt Service Payment Account .............................19

        3.3.    Special Payments .......................................................21

        3.4.    Other Agreements about Authorized Accounts .............................22

SECTION 4. AGREEMENTS WITH COLLATERAL AGENT ............................................23

        4.1.    Delivery of Credit Documents ...........................................23

        4.2.    Indemnification by Debtors .............................................23

        4.3.    Filing Fees, Excise Taxes, Etc. ........................................24

SECTION 5. THE COLLATERAL AGENT ........................................................24

        5.1.    Appointment ............................................................24

        5.2.    Exculpatory Provisions .................................................24

        5.3.    Delegation of Duties ...................................................25

        5.4.    Reliance by Collateral Agent ...........................................25

        5.5.    Limitations on Duties of Collateral Agent ..............................26

        5.6.    Resignation and Removal of the Collateral Agent ........................26

        5.7.    Status of Successor ....................................................28

        5.8.    Merger of the Collateral Agent .........................................28

        5.9.    Treatment of Payee or Indorsee by Collateral Agent .....................28

        5.10.   Non-Reliance on Collateral Agent .......................................28

        5.11.   Indemnification ........................................................29

SECTION 6. ASSIGNMENTS .................................................................29

        6.1.    Agreement Binding on Assignees .........................................29
</Table>



                                        i
<PAGE>

<Table>
<S>                                                                                    <C>
        6.2.    Limited Restriction on Assignments or Resignation of Term Lender
                Agent ..................................................................29

SECTION 7. MISCELLANEOUS ...............................................................29

        7.1.    Notices ................................................................29

        7.2.    No Waivers .............................................................30

        7.3.    Amendments, Supplements and Waivers ....................................30

        7.4.    Headings ...............................................................31

        7.5.    Severability ...........................................................31

        7.6.    Successors and Assigns .................................................31

        7.7.    GOVERNING LAW ..........................................................31

        7.8.    Counterparts ...........................................................31

        7.9.    SUBMISSION TO JURISDICTION; WAIVERS ....................................31

        7.10.   Termination ............................................................32

        7.11.   Acknowledgements .......................................................33
</Table>



SCHEDULE A  --  ADDRESSES FOR NOTICES



                                       ii
<PAGE>

                       INTERCREDITOR AND SECURITY AGREMENT

                  THIS INTERCREDITOR AND SECURITY AGREEMENT (this "Agreement"),
dated as of October 18, 2002, is made by and among:

     o        EOTT Energy Operating Limited Partnership, a Delaware limited
              partnership ("EOTT OLP"),

     o        EOTT Energy Canada Limited Partnership, a Delaware limited
              partnership ("EOTT Canada"),

     o        EOTT Energy Liquids, L.P., a Delaware limited partnership ("EOTT
              Liquids"),

     o        EOTT Energy Pipeline Limited Partnership, a Delaware limited
              partnership ("EOTT Pipeline") (each of the foregoing entities a
              debtor and a debtor in possession and, on a joint and several
              basis, the "Borrowers"),

     o        EOTT Energy Partners, L.P., a Delaware limited Partnership ("EOTT
              MLP"),

     o        EOTT Energy General Partner, L.L.C., a Delaware limited liability
              company ("EOTT GP" and together with EOTT MLP, each a "Guarantor"
              and collectively, the "Guarantors"),

     o        Standard Chartered Bank, in its capacity as Collateral Agent
              hereunder,

     o        Standard Chartered Bank, in its capacity as LC Agent under the SCB
              DIP LC Agreement referred to below, acting on behalf of the LC
              Issuer and the LC Participants,

     o        Standard Chartered Bank, in its capacity as an LC Participant
              under the SCB DIP LC Agreement,

     o        Lehman Brothers Inc., in its capacity as Term Lender Agent under
              the Term Loan Agreement referred to below, acting on behalf of the
              Term Lenders,

     o        each of the Persons signing below as a Term Lender, and

     o        Standard Chartered Trade Services Corporation ("SCTSC").

                                    RECITALS:

                  WHEREAS, the Borrowers, the Guarantors, Standard Chartered
Bank, as LC Issuer and LC Agent, and the letter of credit participants from time
to time party thereto are parties to that certain Debtor in Possession Letter of
Credit Agreement dated of even date herewith (as from time to time amended in
accordance herewith, the "LC Agreement"), pursuant to which the LC Issuer has
agreed to issue Letters of Credit to the Borrowers on the terms and conditions
set forth therein;



                                       1
<PAGE>

                  WHEREAS, the Borrowers, the Guarantors, Lehman Brothers Inc.,
as Term Lender Agent, and the other lenders from time to time party thereto are
parties to that certain Debtor in Possession Term Loan Agreement dated of even
date herewith (as from time to time amended in accordance herewith, the "Term
Loan Agreement"), pursuant to which the Term Lenders have agreed to make loans
to the Borrowers on the terms and conditions set forth therein;

                  WHEREAS, EOTT OLP and SCTSC are parties to (a) that certain
Amended and Restated Commodities Repurchase Agreement dated of even date
herewith (as from time to time amended in accordance herewith, the "Crude Oil
Purchase Agreement"), pursuant to which SCTSC has agreed to purchase and resell
to EOTT OLP certain commodities on the terms and conditions set forth therein
and (b) that certain Amended and Restated Receivables Purchase Agreement dated
of even date herewith (as from time to time amended in accordance herewith, the
"Receivables Purchase Agreement"), pursuant to which SCTSC has agreed to
purchase certain qualified receivables from EOTT OLP on the terms and conditions
set forth therein; and

                  WHEREAS, the parties hereto desire to provide, among other
things, for their respective rights in respect of the Collateral and the
distribution of the proceeds thereof;

                  NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:

                             SECTION 1. DEFINITIONS

                  1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

                  "Acceleration Notice" means either (a) a formal notice given
by the LC Agent on behalf of the LC Participants stating that an "Event of
Default" has occurred under the LC Agreement that has not been remedied and that
the LC Agent has exercised its acceleration remedy under the LC Agreement or (b)
by the Term Lender Agent on behalf of the Term Lenders stating that an "Event of
Default" has occurred under the Term Loan Agreement that has not been remedied
and that the Term Lender Agent has exercised its acceleration remedy under the
Term Loan Agreement.

                  "Actionable Default" means either (a) an "Event of Default",
as defined in the LC Agreement or (b) an "Event of Default", as defined in the
Term Loan Agreement, which, in either case, has neither been cured nor waived at
the time in question.

                  "Administrative Agents" means the LC Agent and the Term Lender
Agent.

                  "Authorized Accounts" means the Collection Accounts, the
Concentration Account, the Debt Service Payment Account, the LC Collateral
Account, the Funding Account, and the Disbursement Accounts.

                  "Bankruptcy Court" means the United States Bankruptcy Court
for the Southern District of Texas, Corpus Christi Division.



                                       2
<PAGE>

                  "Business Day" means any day, other than a Saturday, Sunday or
day which shall be in the State of New York a legal holiday or day on which
banking institutions are required or authorized to close.

                  "Canadian Accounts" means the following accounts maintained by
EOTT Canada with Bank of Montreal: account number 00109-010 (U. S. dollars) and
account number 1185-710 (Canadian dollars).

                  "Cash Equivalents" means "Cash Equivalents" as defined in the
LC Agreement.

                  "Cash Waterfall" means the payment, priority and other
provisions of Sections 3.1, 3.2 and 3.3 hereof.

                  "Collateral" means all of the assets, properties and rights of
each Debtor, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, real, personal or mixed, including but not limited to: all assets
included in Property, Plant and Equipment as reflected in the Debtors' financial
statements, all real property, all fixtures, all goods (including inventory,
equipment and any accessions thereto), all instruments (including promissory
notes), all documents, all documents of title (as such term is defined in the
Alberta Personal Property Security Act), all accounts (including
health-care-insurance receivables), all chattel paper (whether tangible or
electronic), the Authorized Accounts and all other deposit accounts and all
investments and balances therein, all money (as such term is defined in the
Alberta Personal Property Security Act), all letter-of-credit rights (whether or
not the letter of credit is evidenced by a writing), all commercial tort claims,
all securities and all other investment property (including without limitation,
(i), in the case of EOTT MLP, its entire limited partner interest in EOTT OLP
and its entire membership interest in EOTT GP; (ii) in the case of EOTT OLP, its
entire limited partner interest in each of EOTT Canada, EOTT Liquids and EOTT
Pipeline; and (iii) in the case of EOTT GP, its entire general partner interest
in each of EOTT OLP, EOTT Canada, EOTT Liquids and EOTT Pipeline), all general
intangibles, all payment intangibles, all software, all tax refund claims, all
supporting obligations, all Proceeds of any of the foregoing, and all other
personal property. Notwithstanding the foregoing, however, the term "Collateral"
shall not include (a) any avoidance actions or other assets expressly excluded
from the "Postpetition Liens" granted to the Collateral Agent pursuant to the
DIP Financing Orders, and (b) the receivables and contract rights purchased by
SCTSC under the Receivables Purchase Agreement or any proceeds thereof.

                   "Collateral Agent" means Standard Chartered Bank, acting in
its capacity as collateral agent hereunder and under the DIP Financing Orders,
and any successor collateral agent appointed under Section 5 hereof to act on
behalf of the Secured Parties with respect to the Collateral.

                  "Collection Accounts" means the following bank accounts: the
Canadian Accounts, account number 314994 of EOTT OLP with Southwest Bank,
account number 315001 of EOTT Pipeline with Southwest Bank, and account number
316423 of EOTT Liquids with Southwest Bank.



                                       3
<PAGE>

                  "Concentration Account" means account number 3582-058765-001
of EOTT OLP with SCB into which the funds in the Collection Accounts shall be
transferred.

                  "Control Agreement" means any lock-box agreement, control
agreement, or agency agreement among any of the Debtors, the Collateral Agent,
and the banks with which the Authorized Accounts are maintained (including
without limitation the Bank Agency and Control Agreement dated December 21,
2001, among EOTT OLP, EOTT Liquids, EOTT Pipeline, SCB and Southwest Bank), as
each of the same may be amended, supplemented or otherwise modified from time to
time. Promptly after the execution hereof, SCB and the Debtors shall cause such
Bank Agency and Control Agreement to be amended to reflect SCB's rights and
duties hereunder as Collateral Agent.

                   "Credit Documents" means collectively, the following
agreements as the same may be amended, restated, supplemented or otherwise
modified from time to time: the LC Agreement, the other "Credit Documents" as
defined therein, the Term Loan Agreement, the other "Credit Documents" as
defined therein, the Purchase Agreements and the documents and agreements
entered into pursuant thereto, this Agreement, and all Security Documents and
Orders, in each case whether now existing or hereafter executed and delivered.

                  "Debt Service Payment Account" means a new bank account to be
established promptly after the date hereof with SCB, to be used to pay amounts
owing to the Secured Parties.

                  "Debtors" means the Borrowers and the Guarantors.

                  "Default" means the occurrence of any event or condition,
which with the giving of notice or the lapse of time, or both, would constitute
an Actionable Default.

                  "Designated Assets" means the following assets: (a) the MTBE
Facility in Harris County, Texas, (b) the Mont Belvieu Storage Facility and Grid
in Chambers, Harris and Galveston Counties, Texas, and (c) the gas processing,
storage and transportation facilities at Tupman, Kern County, California.

                  "DIP Financing Orders" means the "Second Interim Order" and
the "Final Order", as such terms are defined in the LC Agreement and the Term
Loan Agreement.

                  "Disbursement Accounts" means the Canadian Accounts and the
following controlled disbursement accounts established by one or more of the
Debtors with Southwest Bank:

                                    888802226
                                    888802239
                                    888802242
                                    888802255
                                    888802320
                                    888802918

                  "Enforcement Action" means (a) any action that the Collateral
Agent may take, whether hereunder or under any of the Security Documents and
Orders, to exercise remedies or



                                       4
<PAGE>

other rights against Collateral following the occurrence of an Actionable
Default or (b) any action that SCTSC may take to enforce its rights and remedies
against the Linefill under the Crude Oil Purchase Agreement following the
occurrence of a default thereunder by EOTT OLP, provided that none of the
following shall constitute Enforcement Actions: (i) actions taken by the
Collateral Agent with respect to the Authorized Accounts pursuant to Section 3
hereof, (ii) acceleration of any of the Secured Obligations, (iii) actions taken
by SCTSC to exercise its rights and remedies under the Receivables Purchase
Agreement, and (iv) actions taken by any of the Secured Parties to seek specific
performance of any covenant in any of the Credit Documents.

                  "Funding Account" means account number 336041 established by
EOTT OLP with Southwest Bank.

                   "GAAP" means generally accepted accounting principles in the
United States of America from time to time in effect.

                   "Koch Payment" means each payment made by Koch Petroleum
Group L.P. or any of its affiliates with respect to any account owed by Koch
Petroleum Group L.P. or its affiliates to EOTT LLP or the other Debtors that is
sold to SCTSC pursuant to the Receivables Purchase Agreement.

                  "LC Agent" means Standard Chartered Bank, in its capacity as
LC Agent under the LC Agreement, and any successor LC Agent appointed
thereunder.

                  "LC Collateral Account" means a new bank account to be
established promptly after the date hereof with SCB, to be used to hold cash
collateral as provided herein.

                  "LC Exposure" means, at any time in question, the sum of all
amounts paid by LC Issuer on drafts or demands for payment drawn or made under
or purported to be under any Letter of Credit plus the maximum amounts LC Issuer
might then or thereafter be called upon to advance under all Letters of Credit
then outstanding.

                  "LC Issuer" means Standard Chartered Bank, in its capacity as
LC Issuer under the LC Agreement, and any successor LC Issuer appointed
thereunder.

                  "LC Obligations" means, at any time in question, any and all
indebtedness, liabilities and obligations of every kind, nature and description
owing by any Debtor to the LC Issuer, the LC Agent, or any LC Participant, or
any of them (however evidenced) under or pursuant to the LC Agreement or the
other "Credit Documents" (as defined in the LC Agreement), whether now existing
or hereafter arising, whether direct or indirect, absolute or contingent, joint
and/or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, or on original, renewed or extended terms
and whether arising directly or acquired by the LC Issuer, the LC Agent, or any
LC Participant from any other party to such "Credit Documents" (including,
without limitation, participations or interests in the obligations of any Debtor
to others), whether for principal, interest, fees, expenses, indemnities or
other amounts and whether incurred by any Debtor as principal, surety, endorser,
guarantor, accommodation party, indemnitor or otherwise.



                                       5
<PAGE>

                  "LC Participants" means the Persons that from time make up the
"LC Participants" under the LC Agreement.

                  "Letters of Credit" means the letters of credit issued under
and in compliance with the LC Agreement, in an aggregate face amount not to
exceed $325,000,000 at any time.

                  "Linefill" means the inventory of crude oil, refined petroleum
products or natural gas liquids sold by EOTT OLP to SCTSC under the Crude Oil
Purchase Agreement.

                  "Linefill Sales" means (a) any sales and delivery from time to
time of the Linefill pursuant to the permanent shutdown and purging of pipeline
or storage assets, (b) any sales by the Debtors that reduce the crude oil,
refined petroleum products or natural gas liquids in the Debtors' pipeline and
storage assets to amounts below those required in the Crude Oil Purchase
Agreement, (c) any sales of the Linefill in conjunction with the sale of the
pipelines or storage assets in which the Linefill is stored, and (d) any sales
of the Linefill by SCTSC pursuant to the Crude Oil Repurchase Agreement.

                  "Matured LC Obligations" means all amounts paid by LC Issuer
on drafts or demands for payment drawn or made under or purposed to be under any
Letter of Credit.

                  "Maturity Date" means the earlier to occur of (i) March 31,
2003 and (ii) the effective date of a reorganization plan of the Debtors that
has been confirmed by an order of the Bankruptcy Court.

                  "Monthly Payment Date" means the first Business Day of each
month.

                  "Notice of Actionable Default" means (a) a written notice
stating that an Actionable Default has occurred that has not been remedied, sent
by either the LC Agent or the Term Lender Agent to the other and to the
Collateral Agent, or (b) a written notice stating that a default that has not
been remedied has occurred under the Crude Oil Purchase Agreement and that any
applicable grace period has expired, sent by SCTSC to both LC Agent and the Term
Lender Agent.

                  "Overdraft Obligations" means any obligations or liabilities
of any Debtor to pay to SCB the amount of any amounts advanced to such Debtor by
SCB on account of any overdraft or similar extension of credit honored by SCB in
its capacity as depository bank for such Debtor or in its capacity as Collateral
Agent, along with any interest, fees, expenses, and other amounts due by the
Debtors to SCB in connection therewith.

                  "Percentage of Exposure" means, at the time in question, with
respect to any Term Lender or LC Participant or SCTSC, its percentage share of
the total Tier-A Obligations and Tier-B Obligations at such time.

                  "Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or entity of
whatever nature.



                                       6
<PAGE>

                  "Proceeds" means "proceeds", as defined in the UCC, and, in
any event, shall include, but not be limited to, (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any of the Debtors from
time to time with respect to any of the Collateral, (b) any and all payments (in
any form whatsoever) made or due and payable to any of the Debtors from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
and (c) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.

                  "Purchase Agreements" means the Crude Oil Purchase Agreement
and the Receivables Purchase Agreement.

                  "Required Secured Parties" means at any date of determination
(a) at any time prior to the Maturity Date when no Actionable Default exists or,
when an Actionable Default exists, at any time prior to the 61st day following
the sending of a Notice of Actionable Default with respect thereto, both of the
Administrative Agents, and (b) at any time after the Maturity Date, or at any
time prior to the Maturity Date whenever an Actionable Default has continued to
exist for at least 60 days following the sending of a Notice of Actionable
Default with respect thereto, either of the Administrative Agents.

                  "SCB" means Standard Chartered Bank.

                  "SCTSC Collection Account" means the account established by
SCTSC with SCB for the purpose of collecting the Koch Payments and any payments
from Linefill Sales.

                  "SCTSC Shortfall Obligations" means (a) any unpaid amounts
owing to SCTSC for recovery of its purchase price paid under either of the
Purchase Agreements that remain after SCTSC has made all efforts customary in
the industry (consistent with applicable restrictions under this Agreement) to
collect the amounts owing to it under such Purchase Agreement, and (b) any other
amounts owing to SCTSC under either or both of the Purchase Agreements that
remain unpaid after SCTSC has made such customary collection efforts.

                  "Secured Obligations" means all LC Obligations, all Term Loan
Obligations, all SCTSC Shortfall Obligations, all Overdraft Obligations, and all
obligations owed by any of the Debtors under this Agreement or any of the
Security Documents and Orders to any of the Secured Parties in their capacity as
such.

                  "Secured Parties" means all of the following: the LC
Participants, the LC Issuer, the LC Agent, the Term Lenders, the Term Lender
Agent, SCTSC, and the Collateral Agent.

                  "Security Documents and Orders" means this Agreement, the DIP
Financing Orders, any additional orders from time to time given by the
Bankruptcy Court to implement and enforce the preceding orders, the Lockbox
Agreements, and any mortgage, security agreement, pledge agreement or other
collateral security agreement from time to time executed and delivered to or for
the benefit of the Collateral Agent to secure or assure payment of the Secured
Obligations.



                                       7
<PAGE>

                  "Southwest Bank" means Southwest Bank of Texas, N.A. or any
successor bank from time to time approved by the Bankruptcy Court.

                  "Term Lender Agent" means Lehman Brothers Inc, in its capacity
as Term Lender Agent under the Term Loan Agreement, and any successor Term
Lender Agent appointed thereunder.

                  "Term Lenders" means the Persons that from time make up the
"Term Lenders" under the Term Loan Agreement.

                  "Term Loan Obligations" means, at any time in question, any
and all indebtedness, liabilities and obligations of every kind, nature and
description owing by any Debtor to the Term Lender Agent or any Term Lender, or
any of them (however evidenced) under or pursuant to the Term Loan Agreement or
the other "Credit Documents" (as defined in the Term Loan Agreement), whether
now existing or hereafter arising, whether direct or indirect, absolute or
contingent, joint and/or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, or on original, renewed or
extended terms and whether arising directly or acquired by the Term Lender Agent
or any Term Lender from any other party to such "Credit Documents" (including,
without limitation, participations or interests in the obligations of any Debtor
to others), whether for principal, interest, fees, expenses, indemnities or
other amounts and whether incurred by any Debtor as principal, surety, endorser,
guarantor, accommodation party, indemnitor or otherwise.

                  "Tier-A Obligations" means, at any time, the Tier-A Standard
Chartered Exposure at such time and the Tier-A Term Loan Exposure at such time.

                  "Tier-A Standard Chartered Exposure" means, at any time, the
product of the following formula:

                  [(A + B) - C] + D

where "A" is the amount of the unpaid Overdraft Obligations at such time
(excluding any interest, fees, expenses, and amounts other than advances that
are due by the Debtors to SCB in connection therewith), "B" is the amount of the
LC Exposure at such time, "C" is $300,000,000, and "D" is the product of (i) the
sum of that portion of the Overdraft Obligations consisting of interest, fees,
expenses, and amounts other than advances plus that portion of the LC
Obligations other than the LC Exposure, multiplied by (ii) a fraction whose
numerator is (A + B) - C and whose denominator is A + B.

                  "Tier-A Term Loan Exposure" means, at any time, the unpaid
principal balance of the Tier-A Term Loans at such time, plus any interest,
fees, expenses and other Term Loan Obligations accrued at such time with respect
to the Tier-A Term Loans.

                  "Tier-A Term Loans" means the Term Loans in the original
aggregate principal amount of $50,000,000 that are designated as such pursuant
to the Term Loan Agreement.

                  "Tier-B Obligations" means, at any time, the Tier-B Standard
Chartered Exposure at such time and the Tier-B Term Loan Exposure at such time.



                                       8
<PAGE>

                  "Tier-B LC Exposure" means, at any time, the amount of the LC
Obligations as such time, excluding the amount of LC Obligations included in the
Tier-A Standard Chartered Exposure.

                  "Tier-B Standard Chartered Exposure" means, at any time, the
Tier-B LC Exposure plus the SCTSC Shortfall Obligations.

                  "Tier-B Term Loan Exposure" means, at any time, the amount of
the Term Loan Obligations at such time, excluding the Tier-A Term Loan Exposure.

                  "Tier-B Term Loans" means the Term Loans in the original
aggregate principal amount of $25,000,000 that are designated as such pursuant
to the Term Loan Agreement.

                  "Triggering Event" means any of the following: (a) the giving
of an Acceleration Notice, (b) the giving of a written notice by the LC Agent on
behalf of the LC Participants stating that an "Event of Default" has occurred
under the LC Agreement that has not been remedied and that the LC Agent has
terminated the obligation of the LC Issuer to issue Letters of Credit
thereunder, and (c) the giving of a written notice by the Term Lender Agent
pursuant to Section 3.2(d) below, electing to designate as a Triggering Event
drawings on Letters of Credit in excess of $15,000,000 in a particular calendar
month.

                  "UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time.

                  1.2. Other Definitional Provisions.

                  (a) As used herein, and any certificate or other document made
or delivered pursuant hereto, accounting terms relating to any of the Debtors
not defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.

                  (b) The words "hereof', "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.

                  (c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                  SECTION 2. COLLATERAL AND ACTIONABLE DEFAULTS

                  2.1. Security Interests and Liens in the Collateral.

                  (a) The Bankruptcy Court has, pursuant to the DIP Financing
Orders, ordered the grant of the "Postpetition Liens", as defined in each DIP
Financing Order, to the Collateral Agent to secure the Secured Obligations. To
further secure the payment, performance and observance in full of all of the
Secured Obligations, each Debtor hereby ratifies and confirms such action by the
Bankruptcy Court and grants to the Collateral Agent for the benefit of all
Secured Parties a continuing security interest in, a lien upon, and a right of
set-off against, and



                                       9
<PAGE>

each such Debtor hereby assigns, transfers, pledges and sets over to the
Collateral Agent, all of such Debtor's Collateral. All such Collateral shall be
security for the payment, performance and observance of all Secured Obligations,
and the liens and security interests of the Collateral Agent shall have the
priority provided in the DIP Financing Orders. In addition, any liens and
security interests that have been granted in the Security Documents and Orders
to any Secured Party other than the Collateral Agent shall be deemed transferred
to and held by the Collateral Agent, for the benefit of all of the Secured
Parties to secure the Secured Obligations.

                  (b) The DIP Financing Orders provide that the liens and
security interests granted thereunder to the Collateral Agent are fully
perfected, and each Debtor hereby acknowledges and agrees that this is correct.
Nonetheless, the Collateral Agent is hereby specifically authorized by the
Debtors to file financing statements describing the Collateral provided for in
the Security Documents and Orders in each jurisdiction that it deems
appropriate. Each of the Debtors further acknowledges and agrees that (a) any
and all financing statements filed in connection with any other previously or
now existing credit facilities (including, without limitation, the Prepetition
Credit Agreement referred to in the DIP Financing Orders) naming Standard
Chartered Bank, as administrative agent (or otherwise as a representative for
itself and other financial institutions), as secured party, and such Debtor, as
debtor, shall be effective to perfect the Collateral Agent's security interest
granted by such Debtor pursuant to this Agreement to the extent that such
security interest may be perfected by the filing of financing statements and
(ii) such prior filings represent pre-filings of financing statements for
purposes of so perfecting the security interests granted by the Debtors
hereunder. Until all of the Secured Obligations have been finally paid and
satisfied in full, the provisions of this section shall continue to apply, and
such pre-filings shall continue to be effective to the fullest extent permitted
by law and shall not be subject to any right of termination in respect of the
security interests granted herein, whether any such other credit facilities are
to be discharged with the proceeds of any of the Loans, or are to continue
independently.

                  (c) To further secure the Secured Obligations, whenever
requested by the Collateral Agent, the LC Agent, or the Term Lender Agent, each
acting in its sole and absolute discretion, the Debtors will deliver - to or for
the benefit of the Collateral Agent - Control Agreements, mortgages, deeds of
trust, security agreements, financing statements, continuation statements,
extension agreements, acknowledgements, other Security Documents, and amendments
to any of the foregoing, in each case in form and substance satisfactory to the
Person requesting the same and to the Collateral Agent, for the purpose of
granting, evidencing of record, confirming, or perfecting liens and security
interests in favor of the Collateral Agent in any Collateral now owned or
hereafter acquired by any Debtor. Without limiting the foregoing, the Debtors
will, if so requested, deliver amendments to the mortgages previously given to
Standard Chartered Bank and presently of record in order to confirm that such
mortgages, deeds of trust, and other similar instruments evidence the liens and
security interests granted under the DIP Financing Orders and hereunder, and if
any Debtor shall at any time acquire a commercial tort claim that such Debtor
reasonably believes based upon then-current information could result in a
judgment in favor of such Debtor in excess of $25,000, such Debtor shall
promptly notify the Collateral Agent in a writing signed by such Debtor of the
brief details thereof and confirm to the Collateral Agent in such writing that
such commercial tort claim (and the Proceeds thereof) is subject to the security
interests provided herein, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.



                                       10
<PAGE>

                  (d) To further secure the repayment of the Secured
Obligations, each Debtor hereby grants to the Collateral Agent a security
interest, a lien and a right of offset, each of which shall be in addition to
all other interests, liens and rights of the Collateral Agent at common law,
under the Credit Documents or otherwise, and each of which shall be upon and
against (i) any and all moneys, securities or other property (and the proceeds
therefrom) of such Debtor now or hereafter held or received by or in transit to
the Collateral Agent from or for the account of such Debtor, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, (ii) any
and all deposits (general or special, time or demand, provisional or final) of
such Debtor with the Collateral Agent, including without limitation all deposits
in the Authorized Accounts, and (iii) any other credits and claims of such
Debtor at any time existing against the Collateral Agent. The remedies of
foreclosure and offset are separate and cumulative, and either may be exercised
independently of the other without regard to procedures or restrictions
applicable to the other.

                  (e) Certain Credit Documents may permit other liens or
security interests to exist on the Collateral, but no such permission shall be
construed as an agreement to subordinate the liens and security interests in
favor of the Collateral Agent to such other liens and security interests.

                  2.2. General Authority of the Collateral Agent over the
Collateral. Each of the Debtors hereby irrevocably constitutes and appoints the
Collateral Agent for the benefit of the Secured Parties and any officer or agent
thereof, with full power of substitution as among such officers and agents, as
its true and lawful attorney-in-fact with full power and authority in the name
of such Debtor or in its own name, from time to time in the Collateral Agent's
discretion to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to carry out the
terms of this Agreement and the Security Documents and Orders and to accomplish
the purposes hereof and thereof, including without limitation the right and
power to: (a) receive, take, endorse, assign, deliver, accept, and deposit, in
the name of the Collateral Agent or such Debtor, any and all cash, checks,
commercial paper, drafts, remittances and other instruments and documents
relating to the Collateral, (b) receive, open and dispose of all mail addressed
to such Debtor and notify postal authorities to change the address for delivery
thereof to such address as the Collateral Agent may designate, (c) transmit to
account debtors and any bailees notice of the interest of the Collateral Agent
in the Collateral or request from account debtors or such bailees at any time,
in the name of such Debtor or the Collateral Agent or any designee of the
Collateral Agent, information concerning the Collateral and any amount owing
with respect thereto, (d) notify account debtors to make payment directly to the
Collateral Agent for deposit into the Concentration Account, (e) take or bring,
in the name of the Collateral Agent or such Debtor, all steps, actions, suits or
proceedings deemed by the Collateral Agent necessary or desirable to effect
collection of the Collateral, (f) enter such Debtor's premises for the purpose
of inspecting, verifying, auditing, maintaining, preserving, protecting and
removing the Collateral, (g) obtaining, adjusting, compromising, settling and
canceling insurance policies on the Collateral and any claims thereunder, and
(h) otherwise exercise, without notice to or further assent by the Debtors, all
remedies provided for by the Security Documents and Orders. Each Debtor hereby
releases the Collateral Agent, its officers, employees and designees from any
Liability arising from any act or acts under the authorizations granted under
this Agreement, the other Credit Documents or in furtherance hereof or thereof,
whether by omission or commission, and whether based upon any error of



                                       11
<PAGE>

judgment or mistake of law or fact, and the Debtors hereby ratify all that the
Collateral Agent shall lawfully do or cause to be done by virtue hereof. This
power of attorney is a power coupled with an interest and is irrevocable.

                  2.3. Notices of Actionable Defaults; Directions as to
Enforcement Actions.

                  (a) Prior to the LC Agent and SCTSC declaring pursuant to the
terms of the LC Agreement or the Purchase Agreements, as applicable, that any
and all of the Debtors' obligations thereunder are to become due and payable
prior to the maturity thereof, each of the LC Agent and SCTSC will give five
days' prior notice of its intention to do so to the Term Lender Agent. In
addition, prior to the Term Lender Agent declaring pursuant to the terms of the
Term Loan Agreement that any and all of the Debtors' obligations thereunder are
to become due and payable prior to the maturity thereof, the Term Lender Agent
will give five days' prior notice of its intention to do so to the LC Agent.
Upon receipt of such notice, the LC Agent, the Term Lender Agent or SCTSC, as
applicable, shall have the right to declare, pursuant to the terms of the LC
Agreement, the Term Loan Agreement or the Purchase Agreements, as applicable,
that any and all of the Debtors' obligations thereunder are also to become
immediately due and payable at the same time.

                  (b) Promptly upon receipt by the Collateral Agent of a Notice
of Actionable Default, the Collateral Agent shall simultaneously notify the LC
Agent (if other than the Collateral Agent), SCTSC, and the Term Lender Agent of
the receipt and the contents thereof, and the LC Agent and the Term Lender Agent
shall promptly send copies of such notice to the LC Participants and the Term
Lenders, respectively. So long as such Notice of Actionable Default is in
effect, the Collateral Agent shall exercise the rights and remedies provided in
this Agreement and in the Security Documents and Orders as directed by the
Required Secured Parties, except as otherwise provided herein. Unless otherwise
expressly authorized, herein or in any of the DIP Financing Orders, the
Collateral Agent is not authorized to take any Enforcement Action unless a
Notice of Actionable Default is in effect and the Collateral Agent has obtained
the requisite consent of the Required Secured Parties as provided herein and the
Collateral Agent and the Administrative Agents have complied with any applicable
notice requirements of paragraph 24 of the DIP Financing Orders.

                  (c) A Notice of Actionable Default delivered by an
Administrative Agent shall become effective upon actual receipt thereof by the
Collateral Agent and the other Administrative Agent. A Notice of Actionable
Default, once effective, shall remain in effect unless and until the Collateral
Agent actually receives a written notice of cancellation as provided in Section
2.1(d).

                  (d) The Administrative Agent giving a Notice of Actionable
Default shall be entitled to cancel it by delivering a written notice of
cancellation to the Collateral Agent and the other Administrative Agent. The
Collateral Agent shall immediately notify the Debtors of the cancellation of any
Notice of Actionable Default.

                  (e) Unless the Term Lender Agent consents thereto, SCTSC shall
not take any Enforcement Action with respect to the Linefill prior to the
earliest of (i) the Maturity Date, (ii) the 61st day following the sending of a
Notice of Actionable Default by SCTSC to the Term



                                       12
<PAGE>

Lender Agent, and (iii) the date on which the Collateral Agent is directed by
Required Lenders to take any Enforcement Action against the Collateral.

                  2.4. Right to Initiate Judicial Proceedings; Appointment of
Receiver. If a Notice of Actionable Default is in effect, the Collateral Agent,
subject to the provisions of Section 2.3(b) and of the Security Documents and
Orders, (a) shall have the right and power to institute and maintain such suits
and proceedings as it may deem appropriate to protect and enforce the rights
vested in it by this Agreement and each of the Security Documents and Orders and
(b) may either after entry, or without entry, proceed by suit or suits at law or
in equity to enforce such rights and to foreclose upon the Collateral and to
sell all or, from time to time, any of the Collateral under the judgment or
decree of a court of competent jurisdiction.

                  2.5. Exercise of Powers; Instructions of Required Secured
Parties.

                  (a) All of the powers, remedies and rights of the Collateral
Agent as set forth in this Agreement may be exercised by the Collateral Agent in
respect of any of the Security Documents and Orders as though set forth in full
therein, and, upon the direction of the Required Secured Parties, all of the
powers, remedies and rights of the Collateral Agent and the Secured Parties as
set forth in any of the Security Documents and Orders may be exercised by the
Collateral Agent from time to time as herein and therein provided. In the event
of any inconsistency between this Agreement and any of the Security Documents
and Orders, the provisions of the DIP Financing Orders first, and then this
Agreement second, shall prevail.

                  (b) The Required Secured Parties shall have the right, by one
or more instruments in writing executed and delivered to the Collateral Agent,
to direct the time, method and place of conducting any proceeding for taking or
refraining from taking any Enforcement Action available to the Collateral Agent;
provided that (i) such direction shall not conflict with any provision of law or
of this Agreement or of any of the Security Documents and Orders, and (ii) the
Collateral Agent shall be adequately secured and indemnified as provided in
Section 5.11 and (iii) the written consent of all of the Secured Parties shall
be required before the Collateral Agent may foreclose on any real property owned
by any Debtor that the Collateral Agent knows is contaminated with materials
that could reasonably be expected to give rise to any environmental liability in
excess of $50,000. At any time when either Administrative Agent acting alone
constitutes the Required Secured Parties, the Administrative Agents shall
attempt to coordinate their directions to the Collateral Agent, but each
Administrative Agent shall nonetheless be entitled to direct the Collateral
Agent to take specific affirmative actions to realize upon the Collateral and
neither Administrative Agent shall be entitled to direct the Collateral Agent to
cease taking any such affirmative action to realize upon the Collateral that the
Collateral Agent has been directed to take by the other Administrative Agent.
Nothing in this Section 2.4(b) shall impair the right of the Collateral Agent in
its discretion to take any action which it deems proper and which is not
inconsistent with the written instructions of the Required Secured Parties. In
the absence of such direction, the Collateral Agent shall have no duty to take
or refrain from taking any action unless explicitly required herein.

                  (c) Upon the occurrence and during the continuance of any
Actionable Default with respect to which the Required Secured Parties have
requested the Collateral Agent to take one or more Enforcement Actions, the
Collateral Agent shall provide both the Debtors



                                       13
<PAGE>

and the Official Creditors Committee in the Debtors' bankruptcy proceedings with
five (5) days prior notice of its intention to take such Enforcement Actions,
which such notice shall specify the Actionable Default and the basis therefor
and will be given by the Collateral Agent via facsimile or messenger service to
counsel to both the Debtors and such Creditors' Committee. During such five day
notice period, the Debtors have the right to seek an emergency hearing before
the Bankruptcy Court for the sole purpose of determining whether an Actionable
Default has occurred. Unless during such five day notice period the Bankruptcy
Court determines that an Actionable Default has not occurred, the Collateral
Agent shall upon the expiration of such five day notice period have relief from
the automatic stay and may take such Enforcement Action, including without
limitation any of the following:

                  (i) The Collateral Agent, at its discretion and without
         limitation, may enter upon any premises on or in which the Collateral
         may be located and take possession thereof and remove all or any of the
         Collateral from such premises for the purposes of effecting the sale,
         foreclosure or other disposition thereof or for any other purpose. Each
         Debtor shall, at the request of the Collateral Agent, assemble the
         Collateral at such place or places as the Collateral Agent designates
         in its request. The Collateral Agent shall have the right to take
         possession of the Collateral or any portion thereof pursuant to the UCC
         or other applicable law. In the event the Collateral Agent institutes
         an action to recover any Collateral, or seeks recovery of any
         Collateral by way of prejudgment remedy, each Debtor waives the posting
         of any bond which might otherwise be required.

                  (ii) The Collateral Agent may, at its discretion and without
         limitation, (1) collect, foreclose, receive, appropriate, set off and
         realize upon any and all Collateral, or (2) sell, lease, transfer,
         assign, deliver or otherwise dispose of any and all Collateral
         (including, without limitation, entering into contracts with respect
         thereto and by public or private sales at any exchange, broker's board,
         premises of any Debtor, office of the Collateral Agent or elsewhere) at
         such prices or terms as the Collateral Agent may deem reasonable, for
         cash, upon credit or for future delivery, with any Secured Party having
         the right to purchase the whole or any part of the Collateral at any
         such public sale, all of the foregoing being free from any right or
         equity of redemption of any Debtor, which right or equity of redemption
         is hereby expressly waived and released by each Debtor. If any of the
         Collateral is sold or leased by the Collateral Agent upon credit terms
         or for future delivery, the Secured Obligations shall not be reduced as
         a result thereof until indefeasible payment therefor is finally
         collected by the Collateral Agent. Ten (10) days prior notice by the
         Collateral Agent to the Debtor owning any Collateral, designating the
         time and place of any public auction of such Collateral or the time
         after which any private sale or other disposition of such Collateral
         may take place, shall be deemed to be reasonable notice thereof, and
         each Debtor waives any other notice.

                  (d) The Debtors shall reimburse the Collateral Agent, on
demand, for all of its out-of-pocket costs and expenses in carrying out its
duties hereunder. The costs and expenses incurred or paid by the Collateral
Agent with respect to any Enforcement Action may include, without limitation,
(i) expenses of retaking, holding, assembling, preparing for sale or lease,
advertising, storing, repairing, completing, selling, leasing, foreclosing or
otherwise disposing of the Collateral, (ii) premiums on bonds and undertakings,
(iii) sales, use and other taxes, (iv) fees and expenses of custodians,
warehousemen, brokers, appraisers, auctioneers, sheriffs and others,



                                       14
<PAGE>

(v) legal expenses and attorneys' fees, (vi) travel and hotel expenses, and
(vii) all other expenses that may be incurred or paid by the Collateral Agent in
attempting to collect the Secured Obligations and to foreclose upon the
Collateral.

                  (e) Subject to the directions of the Required Secured Parties,
the Collateral Agent shall have the right at its sole discretion to determine
which Enforcement Actions to exercise and the order of their exercise, and the
Collateral Agent may at any time pursue, relinquish, subordinate, modify or take
any other action with respect thereto, without in any way modifying or affecting
any of the Secured Obligations. The Collateral Agent may, at any time or times,
proceed directly against any or all Debtors or any other guarantor or other
obligor on or in respect of the Secured Obligations to enforce payment of the
Secured Obligations and shall not be required to take any action of any kind to
preserve, collect or protect any Debtor's rights in the Collateral.

                  (f) Section 9-320 of the UCC provides for certain releases of
Collateral constituting personal property upon the sale thereof, and Sections
10(f)(i) and (ii) of the Term Loan Agreement and the LC Agreement authorize the
Debtors to make certain sales of equipment and inventory without the further
consent of the Secured Parties; such assets shall upon such sale be free of any
liens or security interests held by the Collateral Agent. In addition, if the
assets subject to the Purchase Agreements are sold by SCTSC to unaffiliated
third parties pursuant to the exercise of its rights thereunder, such assets
shall upon such sale be free of any liens or security interests held by the
Collateral Agent. If a Debtor requests the Collateral Agent to confirm that any
of the foregoing sales was made free of the Collateral Agent's liens and
security interests, the Collateral Agent may give a release of such Collateral
without the need for any additional authorization from the Secured Parties. All
other releases of Collateral must be given in writing by the Collateral Agent
and may be given only with the consent of the LC Agent and the Term Lender
Agent; provided that the Debtors may, without such consent, sell the Designated
Assets for cash in arm's length transactions with Persons that are not their
affiliates.

                  (f) The Collateral Agent shall deposit into the Concentration
Account all Proceeds and other cash that it obtains in any manner with respect
to the Collateral.

                  2.6. Remedies Not Exclusive.

                  (a) No remedy conferred upon or reserved to the Collateral
Agent herein on its behalf or on behalf of the Secured Parties or in the
Security Documents and Orders is intended to be exclusive of any other remedy or
remedies, but every such remedy shall be cumulative and shall be in addition to
every other remedy conferred herein or in any of the Security Documents and
Orders or now or hereafter existing at law or in equity or by statute.

                  (b) No delay or omission by the Collateral Agent to exercise
any right, remedy or power hereunder or under any of the Security Documents and
Orders shall impair any such right, remedy or power or shall be construed to be
a waiver thereof, and every right, power and remedy given by this Agreement or
any of the Security Documents and Orders to the Collateral Agent may be
exercised from time to time and as often as may be deemed expedient by the
Collateral Agent.



                                       15
<PAGE>

                  (c) If the Collateral Agent shall have proceeded to enforce
any right, remedy or power under this Agreement or any of the Security Documents
and Orders and the proceeding for the enforcement thereof shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then the Debtors, the Collateral Agent and the Secured
Parties shall, subject to any determination in such proceeding, severally and
respectively be restored to their former positions and rights hereunder or
thereunder and in all other respects, and thereafter all rights, remedies and
powers of the Collateral Agent shall continue as though no such proceeding had
been taken.

                  (d) All rights of action and of asserting claims upon or under
this Agreement and the Security Documents and Orders may be enforced by the
Collateral Agent without the possession of any document or instrument evidencing
or relating to any Secured Obligation or the production thereof at any trial or
other proceeding relative thereto; any suit or proceeding instituted by the
Collateral Agent shall be, subject to Section 5.5(c), brought in its name as
Collateral Agent on behalf of the Secured Parties; and any recovery of judgment
shall be held as part of the Collateral and distributed in accordance with the
terms of this Agreement.

                  2.7. Waiver and Estoppel.

                  (a) Each of the Debtors agrees, to the extent it may lawfully
do so, that it will not at any time in any manner whatsoever claim or take the
benefit or advantage of, any appraisement, valuation, stay, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement or any of the Security Documents and Orders and
hereby waives all benefit or advantage of all such laws and covenants, to the
extent that it may lawfully do so, that it will not hinder, delay or impede the
execution of any power granted to the Collateral Agent in this Agreement or any
of the Security Documents and Orders but will suffer and permit the execution of
every such power as though no such law were in force.

                  (b) Each of the Debtors, to the extent it may lawfully do so,
on behalf of itself and all who claim through or under it, including, without
limitation, any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale granted herein or
in any of the Security Documents and Orders or pursuant to judicial proceedings
or upon any foreclosure or any enforcement of this Agreement or any of the
Security Documents and Orders and consents and agrees that all the Collateral
may at any such sale be offered and sold as an entirety.

                  (c) Each of the Debtors waives, to the extent permitted by
applicable law, presentment, demand, protest and any notice of any kind
(including, without limitation, notice of intent to accelerate maturity or
notice of acceleration of maturity) in connection with this Agreement and the
Credit Documents and any action taken by the Collateral Agent with respect to
the Collateral. Each of the Debtors acknowledges that all of the Secured Parties
are relying on all documents, certificates and opinions that are delivered to
the Collateral Agent under this Agreement.



                                       16
<PAGE>

                  2.8. Limitation on Collateral Agent's Duty in Respect of
Collateral. Beyond its duties as to the custody thereof expressly provided
herein or in any of the Security Documents and Orders and to account to the
Secured Parties for Proceeds and other property received by it hereunder or
under any of the Security Documents and Orders, the Collateral Agent shall not
have any duty to the Debtors or to the Secured Parties as to any Collateral in
its possession or control or in the possession or control of any of its agents
or nominees, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto.

                  2.9. Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions hereof
are intended to be subject to all applicable mandatory provisions of law which
may be controlling and to be limited to the extent necessary so that they will
not render this Agreement invalid, unenforceable in whole or in part or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.

                  SECTION 3. COLLECTIONS AND ACCOUNTS

                  3.1. Authorized Accounts.

                  (a) Establishment of Accounts. The Authorized Accounts have
been established or will be established within two Business Days after the date
hereof. Borrower will have no other bank accounts unless the Collateral Agent
consents and such other accounts are put under the control of the Collateral
Agent.

                  (b) Collateral Agent Control. From and after the Closing Date
and for so long as any LC shall be outstanding and until all amounts due or to
become due in respect of any of the Secured Obligations have been paid in full
in cash, each Authorized Account shall be maintained in the name of and under
the sole dominion and control of the Collateral Agent, except to the extent
otherwise contemplated herein. The Debtors' sole rights in the Authorized
Accounts will be (i) to permit automatic clearinghouse debits to the Collection
Accounts for the benefit of various taxing jurisdictions and payroll, but only
until the Collateral Agent notifies the Debtors to transfer all such deposits to
the Concentration Account, (ii) to make withdrawals from the Funding Account for
deposit into any of the Disbursement Accounts and to make payments out of the
Disbursement Accounts in compliance with the terms of the DIP Financing
Documents and the requirements of all applicable orders of the Bankruptcy Court
and (iii) to direct the Collateral Agent as to the investment of moneys held in
certain Authorized Accounts as permitted by Section 3.4(a). In no event shall
any amounts or Permitted Investments deposited into, or credited to, any
Authorized Account, be registered in the name of any Debtor, payable to the
order of any Debtor, or specially endorsed to any Debtor.

                  (c) Collection Accounts. Concurrently with the execution
hereof (or promptly thereafter), each Debtor shall instruct all account debtors
and other persons or entities that make payments to such Debtor on any accounts
or other rights to payment (including all proceeds of each purchase by SCTSC
pursuant to the Receivables Purchase Agreement and excluding only the Koch
Payments to be made to SCTSC and all purchase price payments for any Designated
Assets) to make such payments directly to one of the Collection Accounts or to
the Concentration Account. In addition to the foregoing, each Debtor agrees that
if any such



                                       17
<PAGE>

payments, or any proceeds of any Collateral, are nonetheless received by it,
such Debtor shall as promptly as possible deposit such proceeds into one of the
Collection Accounts or the Concentration Account. Until so deposited, all such
proceeds shall be held in trust by such Debtor for the Collateral Agent and
shall not be commingled with any other funds or property of such Debtor, and
such Debtor will not adjust, settle or compromise the amount or payment of any
such account or other right to payment or release wholly or partly any account
debtor or obligor thereof or allow any credit or discount thereon.

                  (d) Concentration Account. Except for the automatic
clearinghouse debits to the Collection Accounts as authorized under subsection
(b)(i) above, all collected amounts in the Collections Accounts shall be removed
and transferred to the Concentration Account on a nightly basis (provided that
(i) the Canadian Accounts may be swept on a monthly basis until the Collateral
Agent otherwise requests, (ii) Southwest Bank shall not be required to make any
such transfer of less than $10,000 and (iii) Southwest Bank may, from time to
time, withhold its reasonable and agreed fees for its services in connection
with such accounts). All such transfers to the Collateral Agent shall be made by
wire transfer of immediately available funds.

                  (e) Debt Service Payment Account. Each Administrative Agent
may direct the Collateral Agent to transfer funds from the Concentration Account
to the Debt Service Payment Account in amounts not exceeding (i) all payments
then due and payable on the Secured Obligations or expected to become due and
payable by the next Monthly Payment Date, plus (without duplication) (ii) any
excess of the LC Obligations over the Borrowing Base. To the extent of the
available funds in the Concentration Account, the Collateral Agent shall make
all such requested transfers into the Debt Service Payment Account. The
Collateral Agent shall apply all funds deposited into the Debt Service Payment
Account as provided in Section 3.2. Any funds on deposit in the Debt Service
Payment Account after such applications shall continue to be held in the Debt
Service Payment Account, if less than $1,000,000, and shall be transferred to
the Funding Account if $1,000,000 or more. Each Administrative Agent will
promptly furnish EOTT OLP with a copy of any direction to the Collateral Agent
given as provided above, specifying the amount and date of the transfer of funds
to the Debt Service Account.

                  (f) LC Collateral Account. The LC Collateral Account will be
funded with deposits from the Debt Service Payment Account, as provided in
Section 3.2. Upon the occurrence of any Triggering Event, all amounts then on
deposit in the LC Collateral Account shall be used to make distributions in
accordance with clauses FIRST, SECOND, and THIRD of Section 3.2(b) and all
amounts thereafter deposited in the LC Collateral Account shall be used as
provided in Section 3.2(b)(ii). Prior to the occurrence of any Triggering Event,
all amounts from time to time deposited in the LC Collateral Account shall be
held by the Collateral Agent and used from time to time to make payments on
account of Matured LC Obligations as described in the last sentence of Section
3.2(a). Any funds not so used shall continue to be held in the LC Collateral
Account, provided that on the first Business Day after each Monthly Payment
Date, if there are no Matured LC Obligations then outstanding and if the LC
Obligations do not then exceed the Borrowing Base, the Collateral Agent shall
transfer to the Concentration Account any funds remaining in the LC Collateral
Account.

                  (g) Funding and Disbursement Accounts. After making all
payments into the Debt Service Payment Account that are required above, the
Collateral Agent will transfer the



                                       18
<PAGE>

funds remaining in the Concentration Account into the Funding Account as
requested by the Borrowers. The Borrowers will transfer such funds from the
Funding Account to the various Disbursement Accounts and will use the funds in
the Disbursement Accounts to pay their accounts payable (including any payments
on the Secured Obligations that may be required due to shortfalls in the Debt
Service Payment Account), in accordance with the requirements of the Credit
Documents and all applicable orders of the Bankruptcy Court.

                  3.2. Payments from Debt Service Payment Account.

                  (a) Prior to Triggering Event.

                           (i) So long as no Triggering Event shall have
         occurred, the Collateral Agent shall on each Monthly Payment Date,
         based on the instructions it has received from each Administrative
         Agent, distribute all funds then on deposit in the Debt Service Payment
         Account in the following manner and order of priority:

                  FIRST, to the payment of expense reimbursements and
         indemnities then due and owing to the Secured Parties under this
         Agreement or the Credit Documents, with any partial payments being
         allocated to the Secured Parties in proportion to the amounts so due
         and owing;

                  SECOND, to the payment of all amounts then due and owing with
         respect to the Tier-A Term Loan Exposure and the Tier-A Standard
         Chartered Exposure, allocated in accordance with the amounts so due and
         owing;

                  THIRD, to the payment of all other Term Loan Obligations, LC
         Obligations, Overdraft Obligations, and SCTSC Shortfall Obligations
         then due and owing, allocated in accordance with the amounts so due and
         owing; and

                  FOURTH, for deposit in the LC Collateral Account, an amount
         equal to the excess, if any, of the LC Exposure over the Borrowing Base
         on such Monthly Payment Date (determined after giving effect to the
         payments described in clauses SECOND and THIRD above).

                  (ii) In addition, and notwithstanding the foregoing, to the
         extent that drawings are made on any Letters of Credit, the Collateral
         Agent may from time to time, but subject to Section 3.2(d) below,
         distribute funds from the Debt Service Payment Account (or any other
         Authorized Account) to the LC Agent, for the account of the LC Issuer,
         as needed to allow the Debtors to reimburse the LC Issuer for such
         drawings.

                  (b) After a Triggering Event.

                  (i) After any Triggering Event has occurred, the Collateral
         Agent shall (subject to the special applications provided for in
         Section 3.3), at each time that it distributes funds for application to
         the Secured Obligations, apply such funds in the following manner and
         order of priority:



                                       19
<PAGE>

                  FIRST, to the payment or reimbursement of the Collateral Agent
         for all reasonable costs, expenses, disbursements and losses which
         shall have been incurred by the Collateral Agent (i) in connection with
         the collection of such funds by the Collateral Agent and the
         administration of this Agreement, or (ii) for the exercise, protection
         or enforcement by the Collateral Agent of all or any of the rights,
         remedies, powers and privileges of the Collateral Agent under this
         Agreement and the other Credit Documents or in respect of the
         Collateral;

                  SECOND, to the payment of all Tier-A Term Loan Exposure and
         all Tier-A Standard Chartered Exposure at such time, allocated in
         accordance with the proportionate amounts of Tier-A Term Loan Exposure
         and Tier-A Standard Chartered Exposure that existed as of the effective
         time of such Triggering Event; and

                  THIRD, to the payment of all Tier-B Term Loan Exposure and all
         Tier-B Standard Chartered Exposure, allocated in accordance with the
         proportionate amounts of Tier-B Term Loan Exposure and Tier-B Standard
         Chartered Exposure that existed as of the effective time of such
         Triggering Event (provided that SCTSC may, by notice to the Collateral
         Agent and both Administrative Agents, elect to defer all of such
         payments on the Tier-B Obligations (or any portion of such payments
         acceptable to both Administrative Agents) for a period of up to 120
         days while SCTSC eliminates any contingencies in the calculation of the
         SCTSC Shortfall Obligations.

                  (ii) To the extent that any portion of the Tier-A Standard
         Chartered Exposure referred to in the foregoing clause SECOND consists
         of amounts that the LC Issuer might be called upon to advance under
         undrawn Letters of Credit rather than amounts actually owing, then the
         Collateral Agent shall deposit all amounts otherwise payable on account
         of such contingent advances into the LC Collateral Account and, if
         drawings are thereafter actually made on such undrawn Letters of
         Credit, the Collateral Agent shall distribute such funds to the LC
         Agent to be used to reimburse the LC Issuer for such drawings. To the
         extent that any portion of the Tier-B Standard Chartered Exposure
         referred to in the foregoing clause THIRD consists of amounts that the
         LC Issuer might be called upon to advance under undrawn Letters of
         Credit rather than amounts actually owing, then the Collateral Agent
         shall deposit all amounts otherwise payable on account of such
         contingent advances into the LC Collateral Account and, if drawings are
         thereafter actually made on such undrawn Letters of Credit, the
         Collateral Agent shall distribute such funds to the LC Agent to be used
         to reimburse the LC Issuer for such drawings. To the extent that any
         such Letters of Credit terminate without being drawn, the Collateral
         Agent shall use such funds to make distributions in accordance with the
         foregoing clauses FIRST, SECOND, and THIRD of this subsection (b).

                  (c) Payment Obligations Absolute. Payments on the Secured
Obligations must be made in accordance with the foregoing priorities whether or
not there are sufficient funds on deposit in the Debt Service Payment Account to
make all payments due on the Secured Obligations at the time in question, but
compliance with such priorities do not relieve Borrowers of their duty to
provide funds sufficient to make all payments of the Secured Obligations
whenever they become due.



                                       20
<PAGE>

                  (d) Matured LC Obligations; Optional Triggering Event. The LC
Issuer will notify the Borrowers, in accordance with its customary practices
(and will provide the Term Lender Agent with a copy of each such notice) of any
drawings made on Letters of Credit. If, during any calendar month, drawings are
made on Letters of Credit in an aggregate amount that exceeds $15,000,000, then
the Collateral Agent will suspend making distributions in excess of $15,000,000
to the LC Agent as provided in Section 3.2(a)(ii) and will instead retain in the
Debt Service Account the funds in excess of $15,000,000 that would have
otherwise been distributed to the LC Agent. The Collateral Agent will give
written notice of such suspension to each Administrative Agent, and the Term
Lender Agent (as instructed by the "Majority Term Lenders", as defined in the
Term Loan Agreement) will have up to ten Business Days from the receipt of such
notice to elect to designate such drawings in excess of $15,000,000 as a
Triggering Event or to elect not to designate such drawings in excess of
$15,000,000 as a Triggering Event. Any such election must be made in writing
given to the Collateral Agent, with copies given to the Debtors. (Failure to
give any such notice within such ten Business Day period will be deemed an
election not to designate such drawings as a Triggering Event.) Notwithstanding
anything herein or in the Credit Documents to the contrary, from the time such
suspension occurs until the Term Lender Agent (as directed by the Majority Term
Lenders) elects (or is deemed to have elected) whether or not to designate such
a Triggering Event: (i) the LC Issuer shall not be obligated to issue any
Letters of Credit or allow any Overdraft Obligations to be created, (ii) SCTSC
shall not be obligated to advance any funds under the Receivables Purchase
Agreement or remit to the Debtors any amounts then due by SCTSC to the Debtors,
(iii) the Debtors will not be obligated to reimburse such drawings in excess of
$15,000,000, and (iv) to the extent not in conflict with any applicable
bankruptcy law or orders of the Bankruptcy Court, the Debtors' rights to use
funds in the Disbursement Accounts shall be suspended; provided that if the Term
Lender Agent (as directed by the Majority Term Lenders) elects (or is deemed to
have elected) not to designate such drawings as a Triggering Event, then all
such obligations shall be restored and shall be promptly performed. The Debtors
will pay interest to the LC Issuer at the "Default Rate" provided for in the LC
Agreement on any reimbursement obligations for such drawings in excess of
$15,000,000 for the period of time that such reimbursements are deferred.

                  3.3. Special Payments. Notwithstanding the foregoing
provisions of Sections 3.1 and 3.2:

                  (a) Sales of Designated Assets. Borrower shall cause all
proceeds (net of costs of sale) from the sale of the Designated Assets to be
paid directly to the Collateral Agent for deposit into the Debt Service Payment
Account. Upon receipt, the Collateral Agent shall, on behalf of EOTT OLP,
provide the first $75,000,000 of cumulative proceeds to SCTSC (or as much
thereof as is needed) to (i) first, repay and retire the Crude Oil Purchase
Agreement in full (including associated interest, yield, fees and collection
costs or other costs under the Crude Oil Purchase Agreement), and (ii) second,
repay and retire the Receivables Purchase Agreement in full (including
associated repurchase obligations, interest, yield, fees and collection costs or
other costs under the Receivables Purchase Agreement). To the extent that any
portion of such $75,000,000 remains, and to the extent there are any additional
cumulative proceeds in excess of $75,000,000, the Collateral Agent shall pay
such remaining or additional cumulative proceeds so received to the Term
Lenders, as directed by the Term Lender Agent, as prepayments on the Tier-A Term
Loans.



                                       21
<PAGE>

                   (b) Koch Payments. On or before the date hereof, EOTT LP and
SCTSC shall have instructed Koch Petroleum Group L.P. to make all Koch Payments
directly to the SCTSC Collection Account. The SCTSC Collection Account is not an
account of Borrower but an account of SCTSC. Funds in the SCTSC Collection
Account shall be applied to the payments required by the Receivables Purchase
Agreement. After collecting each Koch Payment and applying such payment to the
payments then required under the Receivables Purchase Agreement (including
associated interest, yield, fees and collection costs or other costs under the
Receivables Purchase Agreement), SCTSC shall, if a Triggering Event has
occurred, apply the remainder of such payment to repay and retire the Crude Oil
Purchase Agreement in full (including associated interest, yield, fees and
collection costs or other costs under the Crude Oil Purchase Agreement). To the
extent that there are any remaining funds from such Koch Payment, SCTSC shall
promptly transfer such remaining funds to the Concentration Account, whereupon
the funds so transferred shall constitute Collateral for all purposes.

                  (c) Linefill Sales. Upon any default by Borrower in making the
repurchase payments required under the Crude Oil Purchase Agreement, Borrower
and SCTSC and the Collateral Agent will cause all proceeds from any Linefill
Sales (and all proceeds from any hedging contract purchased by the Debtors for
the benefit of SCTSC pursuant to the Crude Oil Purchase Agreement) to be
deposited directly into the SCTSC Collection Account. The funds so deposited
shall be applied (i) first, to repay and retire the Crude Oil Purchase Agreement
in full (including associated interest, yield, fees and collection costs or
other costs under the Crude Oil Purchase Agreement), and (ii) second, to repay
and retire the Receivables Purchase Agreement in full (including associated
interest, yield, fees and collection costs or other costs under the Receivables
Purchase Agreement). SCTSC shall then promptly transfer any remaining portion of
such funds to the Concentration Account, whereupon the funds so transferred
shall constitute Collateral for all purposes. (The provisions of this subsection
(c) do not modify the provisions of Section 2.3(b) that require the Collateral
Agent to obtain the consent of the Required Secured Parties before taking any
Enforcement Action to cause Linefill Sales to occur.)

                  3.4. Other Agreements about Authorized Accounts.

                  (a) Investments of Balances in Authorized Accounts. All
amounts on deposit in each Authorized Account (other than the Collections
Account) shall, until applied as provided above, be invested and re-invested
from time to time in such Cash Equivalents as the Borrower Representative (or,
if an Actionable Default has occurred and is continuing, the Collateral Agent)
shall determine, which Cash Equivalents shall be held in the name and be under
the control of the Collateral Agent until liquidated and applied. Any income
received by the Collateral Agent with respect to the balance from time to time
standing to the credit of any Authorized Accounts, including any interest on or
proceeds of such Cash Equivalents, shall also remain, or be deposited, in the
same Authorized Account.

                  (b) Authorized Accounts Part of Collateral. All of the
Debtors' right, title and interest in and to the amounts on deposit from time to
time in the Authorized Accounts, together with any investments thereof in Cash
Equivalents and any interest thereon or other proceeds thereof, shall be
included in the Collateral and shall be subject in all respects to the Liens and
security interests created under this Agreement.



                                       22
<PAGE>

                  (c) Agreement to Honor Waterfall. Should any Debtor or Secured
Party receive any funds to be applied to the Secured Obligations from any source
whatsoever which funds have not been distributed to the Secured Parties in
accordance with the provisions of this Section 3, such Debtor or Secured Party
shall immediately deposit such funds into the appropriate account in accordance
with the provisions of this Section 3 (and shall, prior to such deposit, hold
such funds in trust for the benefit of the Secured Parties). Each Secured Party
agrees not to vote for any plan of reorganization in any of the Cases that would
not give effect to the payment provisions in this Section 3. The parties hereto
irrevocably consent and direct that all Tier-A Obligations shall be paid in full
prior to any payment on any Tier-B Obligations, except such payments as are
expressly permitted by this Section 3, and the Borrowers and the Guarantors
agree not make, and the Secured Parties agree not to accept or receive, any
payment or benefit in cash, by setoff or otherwise, directly or indirectly, on
account of principal, interest or any other amounts owing on any of the Tier-B
Obligations except such payments as are expressly permitted herein.

                  (d) Collateral Agent's Calculations. In making the
determinations and allocations required hereunder, the Collateral Agent may rely
upon information supplied by SCB as to the amounts payable with respect to the
LC Obligations and upon information supplied by the Term Lender Agent as to the
amounts payable with respect to the Term Loans, and upon information supplied by
SCTSC as to the amounts payable with respect to the Purchase Agreements. The
Collateral Agent shall have no duty to inquire as to the application by the LC
Agent, the Term Lender Agent or SCTSC of any amounts distributed to them by the
Collateral Agent.

                  SECTION 4. AGREEMENTS WITH COLLATERAL AGENT

                  4.1. Delivery of Credit Documents. The Debtors have delivered
to the Collateral Agent and the Term Lender Agent true and complete copies of
all Credit Documents as in effect on the date hereof (including all amendments,
supplements and other modifications thereto). The Debtors shall deliver to the
Collateral Agent and the Term Lender Agent, promptly upon the execution thereof,
a true and complete copy of all amendments, modifications or supplements to any
Credit Document entered into after the date hereof. Upon the request of any
Secured Party, the Debtors shall deliver such copies to such Secured Party.

                  4.2. Indemnification by Debtors. Without in any way limiting
any of its indemnification obligations under the LC Agreement, each of the
Debtors agrees to indemnify the Collateral Agent (in its capacity as such, but
not otherwise), jointly and severally, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever (in this section, "Losses")
which may at any time (including, without limitation, at any time following the
payment of the Secured Obligations) be imposed on, incurred by or asserted
against the Collateral Agent in any way relating to or arising out of this
Agreement or any of the Security Documents and Orders, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated thereby or any action taken or omitted by the Collateral Agent
hereunder or thereunder or in connection therewith (whether arising in contract
or in tort or otherwise and including any violation or noncompliance with
environmental laws by any Person or any liabilities or duties of any Person with
respect to hazardous materials found in or released into the environment),



                                       23
<PAGE>

provided that no Debtor shall be liable for the payment of any portion of such
Losses to the extent resulting from the gross negligence or willful misconduct
of the Collateral Agent. The agreements in this Section 4.2 shall survive the
payment of the Secured Obligations and all other amounts payable hereunder and
the termination of this Agreement.

                  4.3. Filing Fees, Excise Taxes, Etc. The Debtors jointly and
severally agree to pay or to reimburse the Collateral Agent and each other
Secured Party for any and all payments made by the Collateral Agent in respect
of all search, filing, recording and registration fees, taxes, excise taxes and
other similar imposts which may be payable or determined to be payable in
respect of the execution and delivery of this Agreement and any of the Security
Documents and Orders. The obligations of the Debtors under this section shall
survive the termination of the other provisions of this Agreement and the
repayment of the Secured Obligations.

                  SECTION 5. THE COLLATERAL AGENT

                  5.1. Appointment. Each of the Secured Parties hereby
designates and appoints SCB as the Collateral Agent for such Secured Party under
this Agreement and the Security Documents and Orders and authorizes SCB, as the
Collateral Agent, to take such action on its behalf under the provisions of this
Agreement and the Security Documents and Orders and to exercise such powers and
perform such duties as are expressly delegated to the Collateral Agent by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary or
trustee relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Collateral Agent.

                  5.2. Exculpatory Provisions.

                  (a) The Collateral Agent shall not be responsible in any
manner whatsoever for the correctness of any recitals, statements,
representations or warranties herein, all of which are made solely by the
Debtors. The Collateral Agent makes no representations as to the value or
condition of the Collateral or any part thereof, or as to the title of any
Debtor thereto or as to the security afforded by this Agreement or any of the
Security Documents and Orders, or as to the validity, execution, enforceability,
legality or sufficiency of this Agreement, the Security Documents and Orders or
the Secured Obligations, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. The Collateral Agent shall not be
responsible for insuring the Collateral or for the payment of taxes, charges or
assessments or discharging of liens upon the Collateral or otherwise as to the
maintenance of the Collateral.

                  (b) The Collateral Agent shall not be required to ascertain or
inquire as to performance by any Debtor of any of the covenants or agreements
contained herein or in any of the Security Documents and Orders or Credit
Document. Whenever it is necessary, or in the opinion of the Collateral Agent
advisable, for the Collateral Agent to ascertain the amount of Secured
Obligations then held by the Secured Parties, the Collateral Agent may rely on a
certificate of the LC Agent, in the case of the LC Obligations, of the Term
Lender Agent, in the



                                       24
<PAGE>

case of the Term Loan Obligations, and of SCTSC, in the case of the SCTSC
Shortfall Obligations.

                  (c) The Collateral Agent shall be under no obligation or duty
to take any action under this Agreement or any of the Security Documents and
Orders if taking such action (i) would subject the Collateral Agent to a tax in
any jurisdiction where it is not then subject to a tax or (ii) would require the
Collateral Agent to qualify to do business in any jurisdiction where it is not
then so qualified, unless the Collateral Agent receives security or indemnity
satisfactory to it against such tax (or equivalent liability), or any liability
resulting from such qualification, in each case as results from the taking of
such action under this Agreement or any of the Security Documents and Orders.

                  (d) Notwithstanding any other provision of this Agreement, the
Collateral Agent shall not be liable for any action taken or omitted to be taken
by it in accordance with this Agreement or the Security Documents and Orders
except for its own gross negligence or willful misconduct.

                  (e) The parties hereto acknowledge that the Collateral Agent
is an LC Participant and the LC Issuer under the LC Agreement and shall have the
same rights with respect to any Secured Obligation owed to it as any other
Secured Party and may exercise such rights as though it were not the Collateral
Agent hereunder, and may accept deposits from, lend money to, and generally
engage in any kind of business or conduct with any Debtor or any of its
subsidiaries or affiliates as if it were not the Collateral Agent.

                  5.3. Delegation of Duties. The Collateral Agent may execute
any of the powers hereof and perform any duty hereunder either directly or by or
through agents or attorneys-in-fact who may include officers or employees of any
Debtor. The Collateral Agent shall be entitled to advice of counsel concerning
all matters pertaining to such powers and duties. The Collateral Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it provided that such selection occurs without
gross negligence or willful misconduct.

                  5.4. Reliance by Collateral Agent.

                  (a) Whenever in the administration of this Agreement or the
Security Documents and Orders the Collateral Agent shall deem it necessary or
desirable that a factual matter be proved or established in connection with the
Collateral Agent taking, suffering or omitting to take any action hereunder or
thereunder, such matter (unless other evidence in respect thereof is herein
specifically prescribed) may be deemed to be conclusively proved or established
by a certificate of an officer of any Debtor delivered to the Collateral Agent,
and such certificate shall be full warrant to the Collateral Agent for any
action taken, suffered or omitted in reliance thereon, subject, however, to the
provisions of Section 5.5.

                  (b) The Collateral Agent may consult with counsel, and any
advice or statements of legal counsel (including, without limitation, counsel to
any Debtor) shall be full and complete authorization and protection in respect
of any action taken or suffered by it



                                       25
<PAGE>

hereunder or under any of the Security Documents and Orders in good faith in
accordance therewith.

                  (c) The Collateral Agent may rely, and shall be fully
protected in acting, upon any resolution, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties or, in the case of cables, telecopies and telexes,
to have been sent by the proper party or parties. In the absence of its gross
negligence or willful misconduct, the Collateral Agent may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Collateral Agent and
conforming to the requirements of this Agreement.

                  (d) The Collateral Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Agent by this
Agreement and the Security Documents and Orders at the request or direction of
the Required Secured Parties or otherwise unless the Collateral Agent shall have
been provided adequate security and indemnity against the costs, expenses and
liabilities which may be incurred by it in taking such action or in compliance
with such request or direction.

                  5.5. Limitations on Duties of Collateral Agent.

                  (a) The Collateral Agent shall be obligated to perform such
duties and only such duties as are specifically set forth in this Agreement and
the Security Documents and Orders, and no implied covenants or obligations shall
be read into this Agreement or any of the Security Documents and Orders against
the Collateral Agent. If and so long as a Notice of Actionable Default is in
effect, the Collateral Agent shall, subject to the provisions of Section 2.3(b),
exercise the rights and powers vested in it by this Agreement and the Security
Documents and Orders, and shall not be liable with respect to any action taken
by it, or omitted to be taken by it, in accordance with the direction of the
Required Secured Parties.

                  (b) Except as herein otherwise expressly provided, the
Collateral Agent shall not be under any obligation to take any action which is
discretionary with the Collateral Agent under the provisions hereof or of any of
the Security Documents and Orders except upon the written request of the
Required Secured Parties.

                  (c) No provision of this Agreement or of any of the Security
Documents and Orders shall be deemed to impose any duty or obligation on the
Collateral Agent to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it, in any jurisdiction in which it shall
be illegal, or in which the Collateral Agent shall be unqualified or
incompetent, to perform any such act or acts or to exercise any such right,
power, duty or obligation or if such performance or exercise would constitute
doing business by the Collateral Agent in such jurisdiction or impose a tax on
the Collateral Agent by reason thereof.

                  5.6. Resignation and Removal of the Collateral Agent.

                  (a) The Collateral Agent may at any time, by giving written
notice to the Debtors, the LC Agent, and the Term Lender Agent, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of



                                       26
<PAGE>

a successor Collateral Agent, (ii) the acceptance of such appointment by such
successor Collateral Agent and (iii) the delivery to the successor Collateral
Agent of any documents in the possession of the Collateral Agent that it is
holding in such capacity. As promptly as practicable after the giving of any
such notice, the LC Agent and the Term Lender Agent, acting together, shall
appoint a successor Collateral Agent. If no successor Collateral Agent shall be
appointed and shall have accepted such appointment within 90 days after the
Collateral Agent gives the aforesaid notice of resignation, the Collateral Agent
may apply to the Bankruptcy Court to appoint a successor Collateral Agent to act
until such time, if any, as a successor shall have been appointed as provided in
this subsection. Any successor so appointed by the Bankruptcy Court shall
immediately and without further act be superseded by any successor Collateral
Agent appointed by the LC Agent and the Term Lender Agent, acting together, as
provided in this Section 5.6. The LC Agent and the Term Lender Agent, acting
together, may at any time, after giving 5 Business Days' prior written notice
thereof to the Debtors, remove the Collateral Agent and appoint a successor
Collateral Agent, such removal to be effective upon the acceptance of such
appointment by the successor; provided, however, that the Collateral Agent shall
not be released from any liability hereby created until such time as it shall
deliver to the successor Collateral Agent any documents in its possession that
it is holding in its capacity as Collateral Agent. The Collateral Agent that has
resigned or been removed shall be entitled to fees, costs and expenses to the
extent incurred or arising, or relating to events occurring, before its
resignation or removal.

                  (b) If at any time the Collateral Agent shall resign or be
removed or otherwise become incapable of acting, or if at any time a vacancy
shall occur in the office of the Collateral Agent for any other cause, a
successor Collateral Agent may be appointed by the LC Agent and the Term Lender
Agent, acting together. The powers, duties, authority and title of the
predecessor Collateral Agent shall be terminated and canceled without procuring
the resignation of such predecessor and without any formality, except as may be
required by applicable law and other than appointment and designation of a
successor in writing duly acknowledged and delivered to the predecessor and the
Debtors. Such appointment and designation shall be full evidence of the right
and authority to make the same and of all the facts therein recited, and the
rights and duties of the "Collateral Agent" under this Agreement and the
Security Documents and Orders shall vest in such successor, without any further
act, deed or conveyance, all the estates, properties, rights, powers, trust,
duties, authority and title of its predecessor; but such predecessor shall,
nevertheless, on the written request of either the Term Lender Agent, the LC
Agent, any Debtor or the successor execute and deliver an instrument
transferring to such successor all the estates, properties, rights, powers,
trusts, duties, authority and title of such predecessor hereunder and under the
Security Documents and Orders and shall deliver all Collateral held by it or its
agents to such successor. Should any deed, conveyance or other instrument in
writing from the Debtors be required by any successor Collateral Agent for more
fully and certainly vesting in such successor the estates, properties, rights,
powers, trusts, duties, authority and title vested or intended to be vested in
the predecessor Collateral Agent any and all such deeds, conveyances and other
instruments in writing shall, on request of such successor, be executed,
acknowledged and delivered by the Debtors. If any Debtor shall not have executed
and delivered any such deed, conveyance or other instrument within 10 days after
it receives a written request from the successor Collateral Agent to do so, or
if a Notice of Actionable Default is in effect, the predecessor Collateral Agent
may execute the same on behalf of such Debtor.



                                       27
<PAGE>

Each Debtor hereby appoints any successor Collateral Agent as its agent and
attorney-in-fact to act for it as provided in the immediately preceding
sentence.

                  5.7. Status of Successor. Every successor Collateral Agent
appointed pursuant to Section 5.6 shall be a bank or trust company in good
standing and having power to act as Collateral Agent hereunder, incorporated
under the laws of the United States of America or any State thereof or the
District of Columbia and having its principal office within the 48 contiguous
States and shall also have capital, surplus and undivided profits of not less
than $500,000,000 if there be such an institution with such capital, surplus and
undivided profits willing, qualified and able to accept the agency hereunder
upon the same terms as contained herein.

                  5.8. Merger of the Collateral Agent. Any corporation into
which the Collateral Agent may be merged, or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, shall be the Collateral Agent under this
Agreement and the Security Documents and Orders without the execution or filing
of any paper or any further act on the part of the parties hereto.

                  5.9. Treatment of Payee or Indorsee by Collateral Agent. The
Collateral Agent may treat the registered holder or, if none, the payee or
indorsee of any promissory note or debenture evidencing a Secured Obligation as
the absolute owner thereof for all purposes and shall not be affected by any
notice to the contrary, whether such promissory note or debenture shall be past
due or not.

                  5.10. Non-Reliance on Collateral Agent. Each Secured Party
expressly acknowledges that neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to such Secured Party and that no act by it
hereinafter taken, including any review of the affairs of the Debtors, shall be
deemed to constitute any representation or warranty by the Collateral Agent to
any Secured Party. Each Secured Party represents to the Collateral Agent that it
has or will, independently and without reliance upon the Collateral Agent, and
based on such documents and information as it has deemed or will deem
appropriate, made and will make its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Debtors and has made and will make its own decision to
extend credit to the Debtors. Each Secured Party also represents that it will,
independently and without reliance upon the Collateral Agent, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under the Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Debtors. Except for notices,
reports and other documents expressly required to be furnished to the Secured
Parties by the Collateral Agent hereunder or under any of the Security Documents
and Orders, the Collateral Agent shall not have any duty or responsibility to
provide any Secured Party with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of any Debtor which may come into its possession or the
possession of any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.



                                       28
<PAGE>

                  5.11. Indemnification. Each of the Secured Parties agrees to
indemnify the Collateral Agent (in its capacity as such, but not otherwise), to
the extent not paid or reimbursed by the Debtors and without limiting the
obligation of the Debtors to do so, ratably according to its Percentage of
Exposure on the date of occurrence of any action or failure to act which gives
rise to any claim by the Collateral Agent for indemnity under this subsection,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever (in this section, "Losses") which may at any time (including,
without limitation, at any time following the payment of the Secured
Obligations) be imposed on, incurred by or asserted against the Collateral Agent
in any way relating to or arising out of this Agreement or any of the Security
Documents and Orders, or any documents contemplated by or referred to herein or
therein or the transactions contemplated thereby or any action taken or omitted
by the Collateral Agent hereunder or thereunder or in connection therewith
(whether arising in contract or in tort or otherwise and including any violation
or noncompliance with environmental laws by any Person or any liabilities or
duties of any Person with respect to hazardous materials found in or released
into the environment), provided that no such Secured Party shall be liable for
the payment of any portion of such Losses to the extent resulting from the gross
negligence or willful misconduct of the Collateral Agent. The agreements in this
Section 5.11 shall survive the payment of the Secured Obligations and all other
amounts payable hereunder and the termination of this Agreement.

                             SECTION 6. ASSIGNMENTS

                  6.1. Agreement Binding on Assignees. Each Secured Party agrees
that it shall be a condition to assignment of any of its Secured Obligations
that any assignee of such Secured Obligations shall agree in writing to be bound
by the terms of this Agreement.

                  6.2. Limited Restriction on Assignments or Resignation of Term
Lender Agent. Until the termination of the LC Agreement and the payment of all
Matured LC Obligations, (a) any assignments of Term Loans made by a Term Lender
must be made pro rata, so that every Term Lender owns both Tier-A Term Loans and
Tier-B Term Loans in the same proportions, and (b) Lehman Brothers Inc. shall
not voluntarily resign as Term Lender Agent. In addition, until the 15th day
after the date hereof, the original Term Lenders may not assign the Term Loans
to any Persons other than those who are "Bondholders" (as defined in the LC
Agreement) or affiliates of such "Bondholders".

                            SECTION 7. MISCELLANEOUS

                  7.1. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications given to any Debtor, the Collateral
Agent, the LC Issuer, the Term Lender Agent, or SCTSC shall be given in writing
(including facsimile transmission) and shall be deemed to have been duly given
either (a) when personally delivered, or (b) three Business Days after being
duly deposited in the mails, registered or certified mail postage prepaid, or
(C) when transmitted by facsimile transmission, in each case addressed to such
party at its address specified on Schedule A hereto or any other address which
such party shall have specified as its address for the purpose of communications
hereunder, by notice given in accordance with this Section 7.1 to the party
sending such communication.



                                       29
<PAGE>

                  7.2. No Waivers. No failure on the part of the Collateral
Agent or any Secured Party to exercise, no course of dealing with respect to,
and no delay in exercising, any right, power or privilege under this Agreement
or any of the Security Documents and Orders shall operate as a waiver thereof
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

                  7.3. Amendments, Supplements and Waivers.

                  (a) This Agreement may not be amended or modified except by a
written instrument executed by each party hereto, provided that, with the
written consent of the LC Agent and the Term Lender Agent, the Collateral Agent
may, from time to time, enter into written agreements supplemental hereto or to
any of the Security Documents and Orders for the purpose of adding to, or
waiving any provisions of, this Agreement or any of the Security Documents and
Orders or changing in any manner the rights of the Collateral Agent, the Secured
Parties or the Debtors hereunder or thereunder. Any such supplemental agreement
shall be binding upon the Debtors, the Secured Parties and the Collateral Agent
and their respective successors and assigns.

                  (b) The Debtors, the LC Agent, the LC Issuer and the LC
Participant will not - without the consent of the Term Lender Agent and SCTSC -
enter into any amendment to the LC Agreement or the "Credit Documents", as
defined therein, that (i) reduces the size of the Letter of Credit Facility that
is provided thereunder, (ii) increases the fees, interest, and other per annum
charges payable thereunder by more than two percent per annum, (iii) accelerates
the maturity date under the LC Agreement, (iv) creates any additional mandatory
prepayment obligations or modifies the application of the Cash Waterfall, or (v)
makes any covenants or events of default thereunder materially more restrictive
or burdensome on the Debtors.

                  (c) The Debtors and SCTSC will not - without the consent of
the LC Agent and the Term Lender Agent - enter into any amendment to the
Purchase Agreements that (i) reduces the size of the financing facilities that
are provided thereunder, (ii) increases the fees, interest, and other per annum
charges payable thereunder by more than two percent per annum, (iii) accelerates
the maturity date under either Purchase Agreement, (iv) creates any additional
mandatory prepayment obligations or modifies the application of the Cash
Waterfall, or (v) makes any covenants or events of default thereunder materially
more restrictive or burdensome on the Debtors.

                  (d) The Debtors, the Term Lender Agent, and the Term Lenders
will not - without the consent of the LC Agent and SCTSC - enter into any
amendment to the Term Loan Agreement or the "Credit Documents", as defined
therein, that (i) reduces the size of the credit facility that is provided
thereunder, (ii) increases the fees, interest, and other per annum charges
payable thereunder by more than two percent per annum, (iii) accelerates the
maturity date under the Term Loan Agreement or the Term Notes, (iv) creates any
additional mandatory prepayment obligations or modifies the application of the
Cash Waterfall, or (v) makes any covenants or events of default thereunder
materially more restrictive or burdensome on the Debtors.



                                       30
<PAGE>

                  (e) On any date (in this section, the "Extension Date") that
is no earlier than the effective date of a reorganization plan of the Debtors
that has been confirmed by an order of the Bankruptcy Court and no later than
March 31, 2003, the Borrowers may extend the terms of both the Term Loan
Agreement and the LC Agreement until a date no later than September 30, 2004 and
the terms of both of the Purchase Agreements until a date no later than
September 30, 2003, in each case upon payment of the extension fees described
below and on terms substantially similar to the terms of such Credit Documents
in effect at such times and such other terms as are satisfactory to the parties
thereto, with details to be negotiated. If the Borrowers exercise such extension
right with respect to any such agreement they must exercise such right with
respect to all such agreements. The fees for so extending will be as follows:
(1) for the Term Loan Agreement: $750,000, payable to the Term Loan Agent on the
Extension Date for the account of the Term Lenders; (2) for the LC Facility:
$1,250,000, payable to the LC Agent on the Extension Date for the account of the
LC Participants; and (3) for each Purchase Agreement: 1.0% per annum of the
maximum commitment under such Purchase Agreement as so extended, payable to
SCTSC on the Extension Date.

                  7.4. Headings. The table of contents and the headings of
Sections and subsections have been included herein for convenience only and
should not be considered in interpreting this Agreement.

                  7.5. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

                  7.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and shall inure to
the benefit of each of the Secured Parties and their respective successors and
assigns, and nothing herein is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement or
any Collateral.

                  7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  7.8. Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.

                  7.9. SUBMISSION TO JURISDICTION; WAIVERS. (A) EACH OF THE
DEBTORS AND THE SECURED PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY:

                  (A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY SECURITY DOCUMENTS OR ANY OTHER
DOCUMENTS EXECUTED IN RELATION TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY



                                       31
<PAGE>

JUDGMENT IN RESPECT THEREOF, TO THE JURISDICTION OF THE BANKRUPTCY COURT AND TO
THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK,
THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND APPELLATE COURTS FROM ANY THEREOF;

                  (B) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;

                  (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY REGISTERED OR
CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL) POSTAGE PREPAID, TO
SUCH COMPANY, AT ITS ADDRESS REFERRED TO IN SUBSECTION 7.1 OR AT SUCH OTHER
ADDRESS OF WHICH THE COLLATERAL AGENT AND THE SECURED PARTIES SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO;

                  (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE COLLATERAL
AGENT'S OR ANY SECURED PARTY'S RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION, IF PERMITTED BY THE BANKRUPTCY COURT; AND

                  (E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED
TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

                  (F) EACH OF THE DEBTORS AND SECURED PARTIES AND THE COLLATERAL
AGENT HEREBY WAIVES TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW IN ANY ACTION
OR PROCEEDING REFERRED TO IN SECTION 7.9(A) HEREOF, AND FOR ANY COUNTERCLAIM
THEREIN.

                  7.10. Termination.

                  (a) Upon (i) receipt by the Collateral Agent from each of the
LC Agent, the Term Lender Agent, and SCTSC of a written direction to cause the
liens created by the Security Documents and Orders to be released and discharged
and (ii) payment in full of all fees and expenses owing to the Collateral Agent
hereunder, the Collateral Agent shall promptly proceed to release the liens and
security interests created by the Security Documents and Orders and to deliver
or cause to be delivered to the Debtors all property of the Debtors then held by
the Collateral Agent or any agent or nominee thereof.

                  (b) This Agreement shall terminate when the liens and security
interests granted under the Security Documents and Orders have terminated and
the Collateral has been released and all Collateral held by the Collateral Agent
has been delivered to the Persons



                                       32
<PAGE>

lawfully entitled thereto in accordance with the provisions of this Agreement;
provided that the provisions of this Agreement which are expressly stated to
survive the termination of other provisions of this Agreement shall not be
affected by any such termination and shall remain in full force and effect.

                  7.11. Acknowledgements.

                  Each Debtor hereby acknowledges that it has been advised by
counsel in the negotiation, execution and delivery of this Agreement and the
other Credit Documents to which such Debtor is a party; that neither the
Collateral Agent nor any other Secured Party has any fiduciary relationship to
such Debtor, and the relationship between the Secured Parties, on one hand, and
the Debtors, on the other hand, is solely that of debtor and creditor; and that
no joint venture exists among the Secured Parties or among any Debtor and the
Secured Parties.



                                       33
<PAGE>
         IN WITNESS WHEREOF, the parties have caused this Intercreditor and
Security Agreement to be duly executed as of the date first written above.



                        STANDARD CHARTERED BANK,
                        as Collateral Agent, as LC Agent and as an LC
                        Participant


                        By:      /s/ Allan J. Lee
                            ----------------------------------------
                        Name:    Allan J. Lee
                        Title:   Senior Vice President



                        By:      /s/ Neil McCauley
                            ----------------------------------------
                        Name:    Neil McCauley
                        Title:   Senior Vice President




<PAGE>




                        STANDARD CHARTERED TRADE SERVICES
                        CORPORATION



                        By:      /s/ Allen J. Lee
                            ----------------------------------------
                                 Name:  Allen J. Lee
                                 Title:   Chief Executive Officer


                        By:      /s/ Daniel Carambot
                            ----------------------------------------
                                 Name:    Daniel Carambot
                                 Title:   President




<PAGE>




                        EOTT ENERGY OPERATING LIMITED PARTNERSHIP

                        By:      EOTT Energy General Partner, L.L.C., its
                                 general partner



                        By:      /s/ Susan Ralph
                            ----------------------------------------
                                 Name:    Susan Ralph
                                 Title:   Treasurer


<PAGE>




                        EOTT ENERGY CANADA LIMITED
                        PARTNERSHIP

                        By:      EOTT Energy General Partner, L.L.C., its
                                 general partner



                        By:      /s/ Susan Ralph
                            ----------------------------------------
                                 Name:  Susan Ralph
                                 Title: Treasurer

<PAGE>



                        EOTT ENERGY LIQUIDS, L.P.

                        By:      EOTT Energy General Partner, L.L.C., its
                                 general partner

                        By:      /s/ Susan Ralph
                            ----------------------------------------
                                 Name:  Susan Ralph
                                 Title:   Treasurer



<PAGE>




                        EOTT ENERGY PIPELINE LIMITED
                        PARTNERSHIP

                        By:      EOTT Energy General Partner, L.L.C., its
                                 general partner



                        By:      /s/  Susan Ralph
                            ----------------------------------------
                                 Name:  Susan Ralph
                                 Title: Treasurer

<PAGE>



                        EOTT ENERGY PARTNERS, L.P.

                        By:      EOTT Energy Corp., its general partner



                        By:      /s/  Susan Ralph
                             ---------------------------------------
                                 Name:    Susan Ralph
                                 Title:   Treasurer


<PAGE>


                        EOTT ENERGY GENERAL PARTNER, L.L.C.



                        By:      /s/  Susan Ralph
                             ---------------------------------------
                                 Name:    Susan Ralph
                                 Title:   Treasurer


<PAGE>


                        LEHMAN BROTHERS INC.,
                        as Term Lender Agent



                        By:      /s/ J. Robert Chambers
                            ----------------------------------------
                             Name:  J. Robert Chambers
                             Title: Managing Director



<PAGE>


                         LEHMAN COMMERCIAL PAPER, INC., as a
                         Term Lender



                        By:      /s/ J. Robert Chambers
                            ----------------------------------------
                            Name:  J. Robert Chambers
                            Title: Authorized Signatory



<PAGE>


                        FARALLON CAPITAL PARTNERS, L.P., a
                        California limited partnership, as a Term Lender

                        By:      Farallon Partners, L.L.C., as General Partner



                                 By:      /s/ Not Legible
                                    --------------------------------
                                     Managing Member
                                     Farallon Partners, L.L.C



<PAGE>


                        FARALLON CAPITAL INSTITUTIONAL
                        PARTNERS, L.P., a California limited partnership,
                        as a Term Lender

                        By:      Farallon Partners, L.L.C., as General Partner



                                 By:    /s/ [ILLEGIBLE]
                                     -------------------------------
                                     Managing Member
                                     Farallon Partners, L.L.C.



<PAGE>


                        FARALLON CAPITAL INSTITUTIONAL
                        PARTNERS II, L.P., a California limited
                        partnership, as a Term Lender

                        By:      Farallon Partners, L.L.C., as General Partner



                                 By:    /s/ [ILLEGIBLE]
                                     -------------------------------
                                     Managing Member,
                                     Farallon Partners, L.L.C.



<PAGE>


                        FARALLON CAPITAL INSTITUTIONAL
                        PARTNERS III, L.P., a Delaware limited
                        partnership, as a Term Lender

                        By:      Farallon Partners, L.L.C., as General Partner



                                 By:    /s/ [ILLEGIBLE]
                                     -------------------------------
                                      Managing Member,
                                      Farallon Partners, L.L.C.



<PAGE>


                        TINICUM PARTNERS, L.P., a New York limited
                        partnership, a Term Lender

                        By:      Farallon Partners, L.L.C., as General Partner




                                 By:    /s/ [ILLEGIBLE]
                                     -------------------------------
                                     Managing Member,
                                     Farallon Partners, L.L.C.,



<PAGE>


                        HIGH YIELD PORTFOLIO, a series of Income
                        Trust



                        By:      /s/ Timothy J. Masek
                             ---------------------------------------
                             Name:        Timothy J. Masek
                             Title:       Assistant Vice President
                                          Income Trust


<PAGE>


                        AXP VARIABLE PORTFOLIO-EXTRA
                        INCOME FUND, a series of AXP Variable
                        Portfolio Income Series, Inc.



                        By:      /s/ Timothy J. Masek
                             ---------------------------------------
                             Name:        Timothy J. Masek
                             Title:       Assistant Vice President
                                          AXP Variable Portfolio Income
                                          Series, Inc.

<PAGE>
                                   SCHEDULE A

                             ADDRESSES FOR NOTICES

EOTT Energy Operating, L.P.
EOTT Energy Canada, L.P.
EOTT Energy Liquids, L.P.
EOTT Energy Pipeline, L.P.
EOTT Energy Partners, L.P.
EOTT Energy General Partner, L.L.C.

Address for each Debtor:
By courier:
2000 W. Sam Houston Parkway, Suite 400
Houston, Texas  770042
By mail:
Post Office Box 4666
Houston, Texas  77210-4666
Telecopy:  (713) 993-5813




Standard Chartered Bank
Special Assets Division
One Madison Avenue
New York, New York 10010-3603
Attn:  Neil McCauley
Telecopy: 212-667-0797




Standard Chartered Trade Services
One Madison Avenue
New York, New York  10010-3603
Attention:  Allan J. Lee
Telecopy: 212-667-0120









Lehman Brothers Inc.
Lehman Commercial Paper Inc.
745 Seventh Avenue
New York, New York  10019
Attention:  Francis Chang/Diane Albanese
Telecopy:  (212) 526-0242/(212) 526-6643

with a copy (excluding financial reports and information) to:

John W. Rain
Thompson & Knight LLP
1700 Pacific Avenue, Suite 3300
Dallas, Texas  75201
Telecopy:  (214) 969-1751




High Yield Portfolio
AXP Variable Portfolio - Extra Income Fund

c/o Kris Robinson
Assistant Manager - Legal Affairs
General Counsel's Office
American Express Financial Advisors
50592 AXP Financial Center
Minneapolis, Minnesota  55474
Telecopy:  612) 671-3767




Farallon Capital Partners, L.P.
Farallon Capital Institutional Partners, L.P.
Farallon Capital Institutional Partners II, L.P.
Farallon Capital Institutional Partners III, L.P.
Tinicum Partners, L.P.

c/o Derek Schrier and Mark C. Wehrly
Farallon Capital Management, L.L.C.
One Maritime Plaza, Suite 1325
San Francisco, California  94111
Telecopy:  (415) 421-2133