<PAGE>
                                                                   EXHIBIT 10.52


                           JOINT DEVELOPMENT AGREEMENT

                                     BETWEEN

                          TE PRODUCTS PIPELINE COMPANY,
                               LIMITED PARTNERSHIP

                                       AND

                       LOUIS DREYFUS PLASTICS CORPORATION




                             DATED FEBRUARY 10, 2000


<PAGE>


                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                       PAGE
<S>                                                                                    <C>
ARTICLE I             DEFINITIONS AND CONSTRUCTION....................................   2
         1.1      DEFINED TERMS.......................................................   2
         1.2      OTHER DEFINITIONS AND PROVISIONS....................................   9
         1.3      HEADINGS............................................................   9

ARTICLE II            OPERATION OF TEPPCO ASSETS......................................  10
         2.1      STORAGE OPERATIONS..................................................  10
         2.2      MARKETING AND DEVELOPMENT ACTIVITIES................................  11
         2.3      BUDGETS.............................................................  12
         2.4      COMMUNICATION.......................................................  12
         2.5      CAPITAL EXPENDITURES................................................  12
         2.6      TEPPCO EXCULPATION..................................................  12
         2.7      DREYFUS EXCULPATION.................................................  13

ARTICLE III           FINANCIAL OPERATIONS AND PAYMENTS...............................  13
         3.1      FINANCIAL RESULTS...................................................  13
         3.2      PAYMENTS TO DREYFUS.................................................  13
         3.3      FUNDING OF MB BUSINESS..............................................  14
         3.4      ACCOUNTS, BOOKS AND RECORDS.........................................  14
         3.5      EXCEPTIONS TO FINANCIAL REPORTS.....................................  15

ARTICLE IV            REPRESENTATIONS AND WARRANTIES OF TEPPCO........................  15
         4.1      CORPORATE MATTERS; ASSET OWNERSHIP..................................  15
         4.2      VALIDITY OF AGREEMENT; NO CONFLICT..................................  15
         4.3      LIABILITIES OF THE MB BUSINESS......................................  15
         4.4      FINANCIAL STATEMENTS................................................  16
         4.5      FINDER'S FEE........................................................  16

ARTICLE V             REPRESENTATIONS AND WARRANTIES OF DREYFUS.......................  16
         5.1      CORPORATE MATTERS; ASSET OWNERSHIP..................................  16
         5.2      VALIDITY OF AGREEMENT; NO CONFLICT..................................  16
         5.3      FINANCIAL STATEMENTS................................................  16
         5.4      FINDER'S FEE........................................................  17

ARTICLE VI            TRANSFER OF TEPPCO ASSETS OR RIGHT TO USE.......................  17
         6.1      PERFORMANCE MILESTONE...............................................  17
         6.2      FAILURE TO MEET MILESTONE...........................................  17
         6.3      CLOSING TIME AND LOCATION FOR TRANSFER..............................  18
         6.4      FORMATION OF NEWCO..................................................  18
         6.5      CLOSING.............................................................  18
         6.6      INABILITY TO TRANSFER ASSETS........................................  19
         6.7      FURTHER ASSURANCE BY THE PARTIES....................................  19
         6.8      THIRD PARTY CONSENTS................................................  19
</Table>


                                       i
<PAGE>

<Table>
<Caption>
                                                                                       PAGE
<S>                                                                                    <C>
ARTICLE VII           CONDITIONS TO CLOSING...........................................  20
         7.1      CONDITIONS TO OBLIGATION OF DREYFUS.................................  20
         7.2      CONDITIONS TO OBLIGATION OF TEPPCO..................................  21

ARTICLE VIII          TRANSFER OF CONTRACT RIGHTS.....................................  22
         8.1      TRANSFER OF CONTRACT RIGHTS PROHIBITED..............................  22
         8.2      FAILURE TO MEET MILESTONE...........................................  23
         8.3      CHANGE OF CONTROL...................................................  23
         8.4      OPERATIONAL DISPUTE.................................................  23
         8.5      CERTAIN TERMINATION PAYMENTS........................................  23
         8.6      RIGHT OF FIRST REFUSAL..............................................  24
         8.7      CLOSING.............................................................  25
         8.8      TRANSFER PROCEDURES.................................................  26

ARTICLE IX            ADDITIONAL AGREEMENTS...........................................  26
         9.1      EFFORTS TO SATISFY CONDITIONS.......................................  26
         9.2      RETENTION OF RECORDS................................................  27
         9.3      NONDISCLOSURE OF PROPRIETARY INFORMATION............................  27
         9.4      TRADEMARK AND TRADE NAME LICENSE....................................  27

ARTICLE X             NONCOMPETITION AGREEMENT........................................  28
         10.1     NONCOMPETITION COVENANT.............................................  28
         10.2     DEFINITIONS.........................................................  30
         10.3     REASONABLENESS OF COVENANT..........................................  30
         10.4     INJUNCTIVE RELIEF...................................................  30

ARTICLE XI            INDEMNIFICATION.................................................  31
         11.1     INDEMNITY OBLIGATION................................................  31
         11.2     PROCEDURE...........................................................  31
         11.3     INDEMNIFICATION THRESHOLD...........................................  33
         11.4     SURVIVAL............................................................  33
         11.5     EXCLUSIVE REMEDY; LIMITATIONS.......................................  33

ARTICLE XII           TERMINATION.....................................................  34
         12.1     TERMINATION PRIOR TO CLOSING........................................  34
         12.2     LIABILITY UPON TERMINATION..........................................  35
         12.3     EFFECTIVE DATE OF TERMINATION.......................................  35
         12.4     TERMINATION OF INTEREST.............................................  35

ARTICLE XIII          EXPENSES........................................................  35

ARTICLE XIV           RESOLUTION OF DISPUTES; CONSENT TO JURISDICTION AND VENUE.......  35

ARTICLE XV            GENERAL PROVISIONS..............................................  36
</Table>

                                       ii
<PAGE>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                                       PAGE
<S>                                                                                    <C>
         15.1     FURTHER ASSURANCES..................................................  36
         15.2     NOTICES.............................................................  36
         15.3     GOVERNING LAW.......................................................  37
         15.4     ENTIRE AGREEMENT....................................................  37
         15.5     ASSIGNMENT..........................................................  37
         15.6     SUCCESSORS..........................................................  37
         15.7     AMENDMENTS; WAIVER..................................................  37
         15.8     COUNTERPARTS........................................................  38
         15.9     SEVERABILITY........................................................  38
         15.10    NO THIRD PARTY BENEFICIARIES........................................  38
         15.11    INDEPENDENT CONTRACTOR; NO PARTNERSHIP..............................  38
         15.12    NEGOTIATED TRANSACTION..............................................  38
         15.13    BUSINESS DAYS.......................................................  38
</Table>



                                      iii
<PAGE>


                           JOINT DEVELOPMENT AGREEMENT

         This JOINT DEVELOPMENT AGREEMENT (this "Agreement") dated as of
February 10, 2000, by and between TE Products Pipeline Company, Limited
Partnership, a Delaware limited partnership ("TEPPCO"), and Louis Dreyfus
Plastics Corporation, a Delaware corporation ("Dreyfus").

                                  WITNESSETH:

         WHEREAS, TEPPCO is engaged in the MB Business in Chambers and Harris
Counties, Texas utilizing the TEPPCO Assets; and

         WHEREAS, Dreyfus is engaged in the merchandising and trading of the
Products, and in connection therewith currently utilizes the TEPPCO Assets; and

         WHEREAS, TEPPCO and Dreyfus desire to achieve certain synergistic
benefits by combining the MB Business and the expertise of Dreyfus in marketing
such business activities to achieve increased utilization of the TEPPCO Assets
during and after the Development Period; and

         WHEREAS, TEPPCO intends to account for the MB Business as a separate
division of TEPPCO during the Term of this Agreement as hereinafter set forth to
better reflect the results of such operations; and

         WHEREAS, upon successful completion of certain objectives during the
Development Period in accordance with the provisions of this Agreement, the
Parties intend to enter into a joint venture regarding the MB Business through
the contribution of the assets and liabilities constituting the MB Business, the
TEPPCO Assets and certain other assets and/or improvements to a newly formed
Delaware limited partnership ("Newco"), which would be jointly owned by TEPPCO
and Dreyfus, such contribution to be in accordance with the terms and conditions
of this Agreement and the other agreements contemplated hereby;

         NOW, THEREFORE, in consideration of the premises and the mutual
promises and obligations contained herein, and intending to be legally bound,
TEPPCO and Dreyfus agree as follows:



                                       1
<PAGE>

                                   ARTICLE I

                          DEFINITIONS AND CONSTRUCTION

         1.1 DEFINED TERMS. The capitalized terms used in this Agreement shall
have the meanings ascribed to them as follows:

                  "Acceptance" shall have the meaning given that term in
         Section 8.6;

                  "Accounting Procedures" shall mean the accounting policies and
         procedures set forth in Annex I to the Operating Procedures;

                  "Acquisition Proposal" shall have the meaning given that term
         in Section 8.6;

                  "Affiliate" means, when used with respect to a specified
         Person, any other Person directly or indirectly controlling or
         controlled by or under direct or indirect common control with the
         specified Person, provided that Newco shall not be deemed to be an
         Affiliate of TEPPCO, Dreyfus or any of their respective subsidiaries or
         Affiliates. For purposes of this definition, "control", when used with
         respect to any specified Person, means the power to direct the
         management and policies of the Person, directly or indirectly, whether
         through the ownership of voting securities, by contract, by family
         relationship or otherwise; and the terms "controlling" and "controlled"
         have the meanings correlative to the foregoing. Notwithstanding the
         foregoing, for purposes of this Agreement, Louis Dreyfus Natural Gas
         Corporation, an Oklahoma corporation, shall not be deemed an Affiliate
         of Dreyfus;

                  "Assumed Liabilities" shall mean the liabilities, debts and
         obligations, whether known or unknown, contingent or liquidated,
         including those set forth on Exhibit A hereto, of or relating to the MB
         Business as of a specific date, including all liabilities, debts and
         obligations related to the MB Business arising during the Term or based
         upon events occurring or facts or circumstances existing prior to the
         Effective Date, but excluding all indebtedness for borrowed money
         except for indebtedness for Discretionary Capital Expenditures
         previously approved by Dreyfus;

                  "Base EBITDA" means, for the MB Business, for any 12 month
         period the lesser of (i) its EBITDA for such period and (ii) $7.3
         Million;

                  "Budgets" shall have the meaning given that term in Section
         2.3 hereof;

                  "Business Day" means any day other than a Saturday, Sunday or
         bank holiday in Houston, Texas;

                                       2
<PAGE>

                  "Capital Budget" shall have the meaning given that term in
         Section 2.3 hereof;

                  "Claim" means any demand, demand letter, claim or notice of
         noncompliance or violation (written or oral) or Proceeding;

                  "Claim Notice" shall have the meaning given that term in
         Section 11.211.2(a) hereof;

                  "Closing" shall have the meaning given that term in Section
         6.3;

                  "Code" means the Internal Revenue Code of 1986, as amended, or
         any amending or superseding tax laws of the United States of America;

                  "Competing Business Transaction" shall have the meaning given
         that term in Section 10.1(c);

                  "Contract Rights" shall have the meaning given that term in
         Section 8.1(a);

                  "Conveyance Document" means the General Conveyance and
         Assumption Agreement in the form set forth in Exhibit B hereto;

                  "Development Period" shall mean the period beginning on
         January 1, 2000 and ending at midnight on December 31, 2002;

                  "Discretionary Capital Expenditures" means any expenditure
         during the Term relating to the TEPPCO Assets or the MB Business that
         is classified under GAAP as a capital expenditure and (i) is not a
         Mandatory Capital Expenditure, or (ii) if classified as a Mandatory
         Capital Expenditure, is associated or is in conjunction with, or is the
         result of, a prior or current Discretionary Capital Expenditure, in
         which case the portion of such Mandatory Capital Expenditure that is
         allocable to such prior or current Discretionary Capital Expenditure
         shall be classified as a Discretionary Capital Expenditure;

                  "Disposition" shall have the meaning given that term in
         Section 8.6;

                  "Dreyfus" shall have the meaning given that term in the
         preamble and any successor or assign permitted by this Agreement;

                  "Dreyfus Change of Control" means an event that causes S. A.
         Louis Dreyfus et Cie., a French societe anonyme, together with its
         Affiliates, to cease to own, directly or indirectly, at least a 50%
         voting interest in (x) Dreyfus or (y) in the event of the transfer of
         Dreyfus' Interest to an Affiliate of Dreyfus, in such Affiliate;

                                       3
<PAGE>

                  "Dreyfus Investment" shall have the meaning given that term in
         Section 8.2;

                  "Dreyfus Storage Agreement" shall mean the Storage and Service
         Agreement in the form attached as Exhibit C hereto;

                  "EBITDA" means, for the MB Business, its earnings for any
         period on a GAAP basis before all charges for such period for
         depreciation and amortization, interest (except as provided below) and
         income taxes. Notwithstanding the foregoing, all interest incurred in
         connection with borrowings the proceeds of which are used for
         Discretionary Capital Expenditures shall be included as an expense in
         calculating EBITDA. As an example only, Exhibit D sets forth a
         calculation of EBITDA for the MB Business based on historical averages
         except as otherwise noted in such Exhibit;

                  "Effective Date" shall have the meaning given that term in
         Section 6.3;

                  "Effective Time" shall have the meaning given that term in
         Section 6.3;

                  "Environmental Liability" means any liability, contingent or
         otherwise (including any liability for damages, costs of environmental
         remediation, fines, or penalties) resulting from or based upon (a) a
         violation of any Environmental Law, (b) the generation, use, handling,
         transportation, storage, treatment or disposal of any Hazardous
         Materials, (c) exposure to any Hazardous Materials, (d) the release or
         threatened release of any Hazardous Materials into the environment; or
         (e) any contract, agreement or other consensual arrangement pursuant to
         which liability is assumed or imposed with respect to any of the
         foregoing.

                  "Environmental Law" or "Environmental Laws" means all laws,
         rules, regulations, statutes, ordinances, decrees or orders of any
         governmental entity relating to (i) the control of any potential
         pollutant or protection of the air, water or land, (ii) solid, gaseous
         or liquid waste generation, handling, treatment, storage, disposal or
         transportation, and (iii) exposure to hazardous, toxic or other
         substances alleged to be harmful, and includes without limitation, (a)
         the terms and conditions of any license, permit, approval, or other
         authorization by any governmental entity, and (b) judicial,
         administrative, or other regulatory decrees, judgments, and orders of
         any governmental entity.

                  "First Party" shall have the definition given that term in
         Section 10.1(c);

                  "Fiscal Year" means the calendar year;

                                       4
<PAGE>


                  "GAAP" means Generally Accepted Accounting Principles in the
         United States of America consistently applied for the time periods
         involved;

                  "General Partner" means a Delaware limited liability company,
         formed by the Parties to serve as the general partner of Newco;

                  "Governmental Authority" means any entity of or pertaining to
         government, including any federal, state, local, other governmental or
         administrative authority, agency, court, tribunal, arbitrator,
         commission, board or bureau;

                  "Hazardous Materials" means any (i) toxic or hazardous
         materials or substances; (ii) solid or hazardous wastes, including
         asbestos, polychlorinated biphenyls, mercury, buried contaminants,
         chemicals, flammable or explosive materials; (iii) radioactive
         materials; (iv) petroleum wastes and spills or releases of petroleum
         products; and (v) any other chemical, pollutant, contaminant, substance
         or waste that is regulated by any governmental entity under any
         Environmental Law.

                  "Indemnified Party" shall have the meaning given that term in
         Section 11.2;

                  "Indemnifying Party" shall have the meaning given that term in
         Section 11.2;

                  "IRS" means the Internal Revenue Service of the United States
         of America;

                  "Lien" means any lien, mortgage, pledge, claim, charge,
         security interest or other encumbrance, option, defect or other rights
         of any third person of any nature whatsoever;

                  "LLC Agreement" means the Limited Liability Company Agreement
         of the General Partner, in the form attached as Exhibit E hereto;

                  "Losses" means any and all damages, losses, liabilities,
         judgments, payments, obligations, penalties, assessments, costs,
         disbursements or expenses (including reasonable fees, disbursements and
         expenses of attorneys, accountants and other professional advisors and
         of expert witnesses and costs of investigation and preparation of any
         kind or nature whatsoever);

                  "Mandatory Capital Expenditure" means all expenditures during
         the Term relating to the TEPPCO Assets or the MB Business that are
         classified under GAAP as a capital expenditure, the primary function of
         which is for regulatory compliance, safety or operational integrity of
         the


                                       5
<PAGE>


         MB Business or TEPPCO Assets or is otherwise the result of actions by
         TEPPCO in emergency situations as provided in the Operating Procedures;

                  "Material Adverse Effect" means, with respect to a Person, a
         material adverse effect on the business, assets, financial condition or
         results of operations of such Person and its subsidiaries, taken as a
         whole;

                  "MB Balance Sheet" shall have the meaning given that term in
         Section 4.4;

                  "MB Business" means the operation, maintenance and marketing
         of the underground storage facility and related operations of shuttle,
         gathering and local delivery pipelines owned by TEPPCO located near
         Mont Belvieu in Chambers and Harris Counties, Texas for the
         transportation of Products to and from such underground storage
         facility and industries located along the Houston Ship Channel and at
         Baytown and Mont Belvieu, Texas;

                  "Milestone" shall have the meaning given that term in Section
         6.1;

                  "Net EBITDA" means, for the MB Business, the amount of EBITDA,
         if any, in excess of the Base EBITDA during any period;

                  "Newco" shall have the meaning given that term in the
         recitals;

                  "Notice Month" shall have the meaning given that term in
         Section 8.3;

                  "Offer" shall have the meaning given that term in Section 8.6;

                  "Offer Period" shall have the meaning given that term in
         Section 8.6;

                  "Operating Budget" shall have the meaning given that term in
         Section 2.3. The initial Operating Budget for the calendar year
         beginning January 1, 2000 is attached as Exhibit F;

                  "Operating Procedures" means the Operating Procedures in the
         form attached as an exhibit to the Partnership Agreement and further
         includes the Accounting Procedures;

                  "Organizational Agreements" means the Partnership Agreement,
         the LLC Agreement and the agreements contemplated thereby;


                                       6
<PAGE>

                  "Parent" shall mean, with respect to TEPPCO, TEPPCO Partners,
         L.P., a Delaware limited partnership, and with respect to Dreyfus, S.
         A. Louis Dreyfus et Cie, a French societe anonyme.

                  "Partnership Agreement" means the Agreement of Limited
         Partnership of Newco, in the form attached as Exhibit G hereto;

                  "Party" means TEPPCO or Dreyfus, as the case may be, and
         "Parties" means TEPPCO and Dreyfus;

                  "Party Indemnitees" shall have the meaning given that term in
         Section 11.1;

                  "Permit" means any license, permit, concession, warrant,
         franchise or other governmental authorization or approval of any
         Governmental Authority;

                  "Permitted Encumbrances" means (a) Liens for current taxes and
         assessments not yet due, (b) inchoate mechanic and materialmen liens
         for construction in progress, (c) inchoate workmen, repairmen,
         warehousemen, customer, employee and carrier liens arising in the
         ordinary course of business, (d) other minor imperfections in title
         that do not affect marketability or use, (e) all validly existing
         restrictions, covenants, agreements, encumbrances, conditions,
         rights-of-way, easements, ordinances, mineral reservations, royalty
         reservations and other matters of record, if any, affecting all or any
         part of the TEPPCO Assets and (f) all of the terms and conditions of
         the instruments creating or evidencing the TEPPCO Assets;

                  "Person" means any individual, corporation, partnership, joint
         venture, association, limited liability company, joint stock company,
         trust, unincorporated organization, Governmental Authority or
         government (or agency or political subdivision thereof);

                  "Pricing Period" shall mean the trailing 12-month period
         ending on a date or month as specified in the Agreement;

                  "Proceeding" means any action, suit, claim, investigation,
         review or other judicial or administrative proceeding, at law or in
         equity, before any Governmental Authority;

                  "Products" means propane, normal butane, isobutane, natural
         gasoline and other commodities as mutually agreed between the Parties,
         and for which products the TEPPCO Assets has at the relevant time all
         necessary Permits;


                                       7
<PAGE>

                  "Records" means all agreements, documents, accounts, books,
         records and files relating to the TEPPCO Assets and the MB Business;

                  "Restricted Affiliate" shall have the meaning given that term
         in Section 10.2;

                  "Second Party" shall have the meaning given that term in
         Section 10.1(c);

                  "Start Date" means January 1, 2000;

                  "TEPPCO" shall have the meaning given that term in the
         preamble and any successor or assign permitted by this Agreement;

                  "TEPPCO Assets" means (i) all of the real property identified
         in pink or blue on the map labeled "Real Property at Mont Belvieu"
         attached to Exhibit H as Attachment 1 (the "Current Real Property") and
         the improvements (other than the TEPPCO Retained Assets) located
         thereon, (ii) equipment, personalty and other assets located at places
         other than on the Current Real Property which are exclusively used in
         the conduct of the MB Business in the ordinary course consistent with
         past practices and (iii) all of TEPPCO's right, title and interest in
         and to the real property interests, permits (to the extent such permits
         are assignable and are required to be held in the name of the owner of
         the TEPPCO Assets as opposed to the operator of the TEPPCO Assets),
         equipment, personalty, contracts and other assets that TEPPCO
         determines, in its reasonable discretion, as being necessary for the
         conduct of the MB Business in the ordinary course consistent with past
         practices (collectively, the "Necessary Assets"), but excluding the
         TEPPCO Retained Assets. The Parties recognize and agree that (a) the
         TEPPCO Assets may change from time to time and may be different at
         Closing than as of the date hereof, and may, for example, include, at
         Closing, all or a portion of the TEPPCO Retained Assets, there being no
         obligation, however, on the part of TEPPCO to include any of the TEPPCO
         Retained Assets in the TEPPCO Assets at Closing and (b) a portion of
         the TEPPCO Retained Assets are located on the Current Real Property;

                  "TEPPCO Retained Assets" means the real property interests,
         equipment, personalty, contracts and other assets described on Exhibit
         H and such other real property interests, permits (other than permits
         that are assignable and are required to be held in the name of the
         owner of the TEPPCO Assets as opposed to the operator of the TEPPCO
         Assets), equipment, personalty, contracts and other assets that TEPPCO
         determines, in its reasonable discretion, are not necessary for the
         conduct of the MB Business in the ordinary course consistent with past
         practices. The Parties recognize and agree that, absent mutual
         agreement by the

                                       8
<PAGE>


         Parties, the Necessary Assets shall never be included within the TEPPCO
         Retained Assets;

                  "TEPPCO Storage Agreement" shall mean the Storage and Service
         Agreement in the form attached as Exhibit I hereto;

                  "Term" or "Term of this Agreement" shall mean the period
         beginning on the Start Date and ending on the termination of this
         Agreement and shall include any extensions of this Agreement;

                  "Territory" shall have the meaning given that term in Section
         10.2; and

                  "Threshold" shall have the meaning given that term in Section
         11.3.

         1.2 OTHER DEFINITIONS AND PROVISIONS.

                  (a) As used in this Agreement, unless expressly stated
otherwise, references to (a) "including" mean "including, without limitation",
and the words "hereof", "herein", and "hereunder", and similar words, refer to
this Agreement as a whole and not to any particular Article, provision, section
or paragraph of this Agreement and (b) "or" mean "either or both". Unless
otherwise specified, all references in this Agreement to Articles, Sections,
paragraphs, Exhibits or Schedules are deemed references to the corresponding
Articles, Sections, paragraphs, Exhibits or Schedules in this Agreement.

                  (b) Whenever a statement is qualified by the term "knowledge,"
"best knowledge" or similar term or phrase, it is intended to indicate the
actual knowledge of the persons identified below gained through the exercise of
such person's normal duties and without investigation or inquiry. As applied to
TEPPCO, such terms or phrases shall be limited to the actual knowledge of
Charles H. Leonard, David L. Langley and Kenneth A. Betts, and as applied to
Dreyfus, such terms or phrases shall be limited to the actual knowledge of
Timothy J. Stuart, William C. Rippe and Michael G. Dowling. If any such Person
is no longer employed by their respective Party at the time in question, there
shall be substituted the employee of such Party fulfilling the same job
responsibilities as the Parties shall agree.

         1.3 HEADINGS. The headings of the Articles and Sections of this
Agreement and of the Schedules and Exhibits are included for convenience only
and shall not be deemed to constitute part of this Agreement or to affect the
construction or interpretation hereof or thereof.



                                       9
<PAGE>

                                   ARTICLE II
                           OPERATION OF TEPPCO ASSETS

         2.1 STORAGE OPERATIONS.

                  (a) Beginning on the Start Date, TEPPCO shall use its
commercially reasonable efforts to continue to operate, manage and maintain the
TEPPCO Assets and to carry on the MB Business during the Term consistent with
its past practices and in the manner provided in the Operating Procedures,
except where the Parties may agree otherwise in writing. In the event the terms
and provisions of the Operating Procedures conflict or are inconsistent with the
terms and provisions of this Agreement, the terms and provisions of this
Agreement shall control. The Parties recognize and agree that all direct,
unallocated (except as provided in the attached Exhibit D) expenses of TEPPCO in
operating the MB Business, including any extraordinary expenses or
nonreoccurring expenses, such as Losses relating to environmental or litigation
matters, shall be charged to the MB Business in accordance with TEPPCO's past
practices and the Accounting Procedures. The Parties acknowledge and agree that
TEPPCO retains ownership of the TEPPCO Assets and the MB Business during the
Term of this Agreement, and will continue to operate such assets and business as
it, in its discretion, deems appropriate except as otherwise specifically
provided herein or as the Parties may otherwise agree in writing. Except as
specifically set forth in this Agreement, no right, title or interest in the
TEPPCO Assets or the MB Business is being conveyed to Dreyfus. Notwithstanding
the foregoing, the operation of the MB Business and the TEPPCO Assets during the
Term of this Agreement shall be for the economic benefit of both TEPPCO and
Dreyfus as and to the extent herein provided.

                  (b) Simultaneously with the execution of this Agreement,
TEPPCO is entering into the Dreyfus Storage Agreement. Additionally, TEPPCO
shall be entitled to utilize during the Term the storage capacity and services
specified in, and in accordance with the terms and provisions of, the TEPPCO
Storage Agreement although the parties are not entering into such agreement at
this time.

                  (c) Notwithstanding any other provision in this Agreement or
the Operating Procedures, Dreyfus recognizes and agrees that deliveries to the
mainline system of TEPPCO and its Affiliates, including all other operational
activities and facilities required to implement such deliveries, take precedence
over all other activities of the MB Business or relating to the TEPPCO Assets,
and that TEPPCO shall be authorized to act accordingly in operating the MB
Business without liability to Dreyfus even if such action shall benefit TEPPCO
to the detriment of Dreyfus or any other Person.

         2.2 MARKETING AND DEVELOPMENT ACTIVITIES.

                  (a) Dreyfus shall have the right (i) to carry out the
marketing of the TEPPCO Assets and other assets that may become part of the MB
Business and manage the personnel involved in those marketing activities, and
(ii) to make proposals

                                       10
<PAGE>


to TEPPCO for Discretionary Capital Expenditures and the development and use of
the TEPPCO Assets and such other assets as may become part of the MB Business,
in each case with the purpose of increasing the EBITDA of the MB Business.
Dreyfus will use commercially reasonable efforts in carrying out such
activities. Dreyfus's activities shall include soliciting new users of the
TEPPCO Assets or increased use by existing customers and investigating and
proposing capital projects for the TEPPCO Assets and the MB Business. At least
120 days prior to the beginning of each Fiscal Year, Dreyfus will provide TEPPCO
with a forecast of revenue for such Fiscal Year starting with the 2001 Fiscal
Year. On or before January 15, April 15, July 15 and October 15 of each Fiscal
Year (beginning with April 15, 2000), Dreyfus will provide a report to TEPPCO on
Dreyfus's activities for the three month period ending on the last day of the
immediately preceding month including, among other things, the status of
contracts entered into during such period, potential contracts being explored,
performance for that period and revisions, if any, to the revenue forecast for
the Fiscal Year in which such three-month period falls. TEPPCO will keep Dreyfus
advised of any storage contracts or renewals thereof entered into by TEPPCO and
will seek Dreyfus' advice with respect thereto. Dreyfus will commit the
equivalent of at least one full-time person to the marketing activities to be
carried out under this Section 2.2(a), and TEPPCO will commit the equivalent of
at least one part-time person to aid Dreyfus in those marketing activities under
Dreyfus' direction. The cost of the compensation and benefits of such employees
shall not be included in the expenses of the MB Business but shall be borne by
Dreyfus or TEPPCO respectively as the employer of that person. TEPPCO and
Dreyfus will agree on whether the cost of the compensation and benefits of any
additional employees of either party who may be engaged in the marketing
activities shall be included in the expenses of the MB Business.

                  (b) The Parties understand and agree that Dreyfus shall not
act as TEPPCO's agent in carrying out its marketing responsibilities. All
storage, service and other agreements relating to the TEPPCO Assets and the MB
Business shall be subject to the approval of, and signed by and in the name of,
TEPPCO or one of its Affiliates. Neither Party shall have the authority, nor
shall it attempt, to bind the other Party in any regard. Dreyfus will keep
TEPPCO informed of its marketing activities and provide to TEPPCO such
information as it may reasonably request with respect to customers and potential
customers of the TEPPCO Assets. TEPPCO will provide all reasonable assistance in
Dreyfus' marketing and sales efforts and shall make available appropriate
authorized representatives to execute any storage agreements developed by
Dreyfus. All such contracts shall become the property of TEPPCO and shall be
included in the definition of "TEPPCO Assets".

         2.3 BUDGETS. At least 30 days prior to the end of each Fiscal Year
during the Term, TEPPCO, as owner of the TEPPCO Assets and the MB Business,
shall prepare and disclose to Dreyfus a proposed operating budget (the
"Operating Budget") for operating the TEPPCO Assets and the MB Business for the
immediately following Fiscal Year. TEPPCO will also prepare and disclose to
Dreyfus a proposed budget for any capital expenditure or capital project
("Capital Budget", collectively, with the Operating Budget, the "Budgets"). Each
Operating Budget and each Capital Budget for

                                       11
<PAGE>

Mandatory Capital Expenditures shall be submitted to Dreyfus for its review and
comment, however, such Budgets as presented by TEPPCO shall be final and binding
for the subject Fiscal Year. Each Capital Budget for Discretionary Capital
Expenditures shall be submitted to Dreyfus for approval, and upon approval, each
Party shall be obligated to make such capital and other contributions as may be
called for by the approved Budget. The Operating Budget for the Fiscal Year
beginning January 1, 2000 has been approved by both Parties and is attached as
Exhibit F.

         2.4 COMMUNICATION. During the Term, TEPPCO shall use its commercially
reasonable efforts to (i) periodically advise Dreyfus regarding the status of
the operation and maintenance of the TEPPCO Assets and the MB Business, except
for marketing activities carried out by Dreyfus, and (ii) respond to inquiries
and information requests for Dreyfus with respect to information available to
TEPPCO. In this regard, TEPPCO agrees that it will obtain Dreyfus' prior
approval of any financing to be entered into relating to Discretionary Capital
Expenditures.

         2.5 CAPITAL EXPENDITURES. During the Term:

                  (a) Discretionary Capital Expenditures approved by the Parties
shall be funded, first by Dreyfus up to an aggregate of $5,000,000, and then by
each of the Parties paying 50% of all such amounts.

                  (b) Mandatory Capital Expenditures that do not relate to
improvements, additions, expansions or other modifications resulting from
Discretionary Capital Expenditures shall be funded by TEPPCO.

                  (c) Mandatory Capital Expenditures that do relate to
improvements, additions, expansions or other modifications resulting from
Discretionary Capital Expenditures shall be funded 50% by each Party.

All improvements, additions, expansions and other modifications to the TEPPCO
Assets, regardless of how funded, shall become the property of TEPPCO and a part
of the TEPPCO Assets subject to this Agreement.

         2.6 TEPPCO EXCULPATION. NEITHER TEPPCO (IN ITS CAPACITY AS OWNER AND
OPERATOR OF THE TEPPCO ASSETS OR THE MB BUSINESS), NOR ITS AFFILIATES, NOR ANY
OWNER, OFFICER, DIRECTOR, PARTNER, MEMBER, EMPLOYEE OR AGENT OF SUCH PARTIES,
SHALL BE LIABLE, RESPONSIBLE OR ACCOUNTABLE IN DAMAGES OR OTHERWISE TO DREYFUS
FOR ANY ACTION TAKEN OR FAILURE TO ACT (EVEN IF SUCH ACTION OR FAILURE TO ACT
CONSTITUTED THE NEGLIGENCE OF SUCH PERSON) IN THE OPERATION OF THE TEPPCO ASSETS
OR THE CONDUCT OF THE MB BUSINESS UNLESS SUCH ACT OR OMISSION WAS PERFORMED OR
OMITTED FRAUDULENTLY OR CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
NOTWITHSTANDING THE FOREGOING, TEPPCO SHALL NOT BE RELIEVED OF ITS OBLIGATIONS
HEREUNDER RELATING TO (I) PAYMENTS TO DREYFUS UNDER SECTION 3.2 OR OF DREYFUS'
INVESTMENT UPON TERMINATION OF THIS AGREEMENT AS


                                       12
<PAGE>


HEREIN PROVIDED, (II) TEPPCO'S OBLIGATIONS UNDER ARTICLE XI HEREOF, OR (III)
TEPPCO'S RESPONSIBILITIES AS SPECIFIED IN THE DREYFUS STORAGE AGREEMENT.

         2.7 DREYFUS EXCULPATION. NEITHER DREYFUS (IN ITS MARKETING CAPACITY),
NOR ITS AFFILIATES, NOR ANY OWNER, OFFICER, DIRECTOR, PARTNER, MEMBER, EMPLOYEE
OR AGENT OF SUCH PARTIES, SHALL BE LIABLE, RESPONSIBLE OR ACCOUNTABLE IN DAMAGES
OR OTHERWISE TO TEPPCO FOR ANY ACTION TAKEN OR FAILURE TO ACT (EVEN IF SUCH
ACTION OR FAILURE TO ACT CONSTITUTED THE NEGLIGENCE OF SUCH PERSON) IN THE
PERFORMANCE OF ITS OBLIGATIONS IN CONNECTION WITH THE CONDUCT OF THE MB BUSINESS
UNLESS SUCH ACT OR OMISSION WAS PERFORMED OR OMITTED FRAUDULENTLY OR CONSTITUTED
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NOTWITHSTANDING THE FOREGOING, DREYFUS
SHALL NOT BE RELIEVED OF ITS OBLIGATIONS (I) UNDER ARTICLE XI HEREOF, OR (II) AS
SPECIFIED IN THE DREYFUS STORAGE AGREEMENT.

                                  ARTICLE III
                        FINANCIAL OPERATIONS AND PAYMENTS

         3.1 FINANCIAL RESULTS.

                  (a) Unaudited financial statements for the MB Business shall
be prepared by or at the direction of TEPPCO on a quarterly and annual basis and
provided to Dreyfus within 45 days of each calendar quarter and 90 days
following the end of each Fiscal Year. Such statements shall be prepared in
accordance with GAAP and shall be consistent, to the extent applicable, with the
calculations of EBITDA set forth on Exhibit D.

                  (b) Within 90 days following the Development Period, TEPPCO
shall prepare and deliver to Dreyfus TEPPCO's determination of whether the MB
Business met both of the requirements of the Milestone specified in Section 6.1
(i) and (ii), together with the financial information and calculations on which
such determination is based. If Dreyfus does not agree with such determination,
the procedures of Section 3.5 shall be followed to obtain a final determination.

         3.2 PAYMENTS TO DREYFUS.

                  (a) For each Fiscal Year during the Term:

                           (i) All Base EBITDA amounts shall be retained by
TEPPCO.

                           (ii) Thereafter, all Net EBITDA shall be divided
equally between TEPPCO and Dreyfus and 50% of Net EBITDA shall be paid to
Dreyfus.

                  (b) Payments to Dreyfus pursuant to Section 3.2(a) shall be
made on an annual basis and shall be made within ninety (90) days following the
end of the applicable Fiscal Year. If approved by the Parties and following
funding by Dreyfus of


                                       13
<PAGE>


$5,000,000 in Discretionary Capital Expenditures, Net EBITDA amounts may be
retained by TEPPCO to fund additional Discretionary Capital Expenditures.

                  (c) In the event this Agreement is terminated during any
Fiscal Year, amounts of Base EBITDA and Net EBITDA shall nevertheless be
retained by TEPPCO or paid to Dreyfus pursuant to Section 3.2(a) in amounts that
are prorated to the portion of the Fiscal Year prior to such termination.
Accordingly, the Base EBITDA amount for such partial Fiscal Year shall be
determined by multiplying $7.3 million by a fraction the numerator of which is
the number of days in the Fiscal Year prior to such termination and the
denominator of which is 365. This amount shall be retained by TEPPCO, and the
remaining EBITDA for that partial Fiscal Year shall be divided equally between
TEPPCO and Dreyfus. Payment of such amount to Dreyfus shall be in accordance
with Section 3.2(b).

         3.3 FUNDING OF MB BUSINESS. Dreyfus will not be responsible for funding
any of the operating or other costs of the MB Business during the Term except
for Discretionary Capital Expenditures in accordance with Section 2.5(a) and, to
the extent provided in Section 2.5(c), Mandatory Capital Expenditures, although
the Parties recognize that operating and other costs may increase in the future,
thereby impacting EBITDA and possibly the resulting payments to Dreyfus.

         3.4 ACCOUNTS, BOOKS AND RECORDS.

                  (a) TEPPCO shall at all times during the Term maintain true
and correct accounts, books and records for the MB Business as if it were a
separate operating division of TEPPCO in accordance with GAAP and sufficient to
determine the financial position and results of operations for the MB Business
and the amounts, if any, of EBITDA available for retention by or payment to the
Parties.

                  (b) Upon notice, the accounts, books and records referred to
in Section 3.4(a) shall be made available for inspection, copying and audit by
Dreyfus and/or its representatives (at Dreyfus' sole cost and expense and no
more frequently than once every calendar quarter) at the offices of TEPPCO
during normal business hours. Dreyfus and its representatives shall make every
effort to conduct such reviews in a manner as to cause the least disruption of
TEPPCO's normal business operations.

         3.5 EXCEPTIONS TO FINANCIAL REPORTS. If Dreyfus shall take exception to
any item or items included in the financial reports and determinations provided
by TEPPCO pursuant to Section 3.1 hereof (collectively, the "reports"), Dreyfus
shall notify TEPPCO in writing within 30 days after receipt of any such report,
setting forth in such notice the specific items to which exception is taken and
the specific charges or credits which should have been made or allowed; and with
respect to such exceptions as are justified, adjustments (including payments or
refunds) shall be promptly made. If Dreyfus shall fail to give written notice of
such exceptions prior to the expiration of such 30 day period, then the reports
for such period as originally rendered by TEPPCO shall be deemed to be correct
as rendered, no adjustment shall be made, and except as


                                       14
<PAGE>


provided below in this Section, Dreyfus shall no longer be entitled to take
exception or otherwise object to such reports, or to audit TEPPCO's accounts,
books and records with respect to such period, and, if applicable, the
determination prepared pursuant to Section 3.1(b) shall be final for purposes of
Section 6.2. Any exceptions as to which written notice is not given within such
30 day period shall be waived. In the event an exception is timely made by
Dreyfus and should the parties disagree on any such exception, such disputes
shall be handled in accordance with the provisions of Article XIV hereof. If the
dispute involves the determination prepared pursuant to Section 3.1(b),
resolution pursuant to Article XIV shall be deemed a final determination for
purposes of Section 6.2. All time periods set forth in this Agreement shall be
extended as necessary to comply with such procedures. Notwithstanding the
foregoing, in the event of fraud or mutual mistake, Dreyfus shall be entitled to
audit such accounts, books and records subsequent to the above stated period or
periods and to make exception to any such report; provided, however, such
extended right to audit and to make exceptions shall terminate 180 days
following the end of the Term, and thereafter, all such reports, accounts, books
and records shall be deemed to be final. Additionally, Dreyfus shall be entitled
to inspect and copy such accounts, books and records in accordance with, and for
the period specified in, Section 9.2. The parties recognize that the information
contained in such reports shall be considered confidential information and
treated as such in accordance with the provisions of Section 9.3 hereof.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES OF TEPPCO

         TEPPCO hereby represents and warrants to, and agrees and covenants
with, Dreyfus as follows:

         4.1 CORPORATE MATTERS; ASSET OWNERSHIP. TEPPCO is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware, having all requisite limited partnership power and authority
to enter into this Agreement and the Organizational Agreements and to perform
its obligations hereunder and thereunder.

         4.2 VALIDITY OF AGREEMENT; NO CONFLICT. This Agreement has been duly
authorized, executed and delivered by TEPPCO and is a legal, valid and binding
obligation of TEPPCO, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations on the
availability of specific remedies.

         4.3 LIABILITIES OF THE MB BUSINESS. Except as set forth on Exhibit J-1,
to the knowledge of TEPPCO, there are no other liabilities or obligations of the
MB Business which would have a material adverse effect on the MB Business.


                                       15
<PAGE>

         4.4 FINANCIAL STATEMENTS. Attached as Schedule 4.4 hereto is a copy of
the unaudited pro forma balance sheet for the MB Business, as of December 31,
1999 (the "MB Balance Sheet") and the unaudited pro forma income statement for
the MB Business for the 12 months then ended, which have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial condition for the MB Business as
of the date thereof and the results of operations for the respective periods set
forth therein, subject to normal interim adjustments, footnotes and other
presentation items. The MB Balance Sheet has been adjusted to (i) reflect
certain correcting adjustments and reclassifications described therein, and (ii)
exclude the TEPPCO Retained Assets.

         4.5 FINDER'S FEE. No investment banker, broker, finder or other Person
is entitled to any brokerage or finder's fee or similar commission in respect of
the transactions contemplated by this Agreement. TEPPCO agrees to indemnify and
hold Dreyfus and its Affiliates harmless from and against any and all claims,
liabilities and obligations with respect to any such fees, commissions or
expenses asserted by any such Person on the basis of any act, statement,
agreement or commitment alleged to have been made by TEPPCO or any of its
Affiliates with respect thereto.

                                   ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF DREYFUS

         Dreyfus hereby represents and warrants to, and agrees and covenants
with, TEPPCO as follows:

         5.1 CORPORATE MATTERS; ASSET OWNERSHIP. Dreyfus is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, having all requisite corporate power and authority to enter into this
Agreement and the Organizational Agreements, as the case may be, and to perform
its respective obligations hereunder and thereunder.

         5.2 VALIDITY OF AGREEMENT; NO CONFLICT. This Agreement has been duly
authorized, executed and delivered by Dreyfus and is a legal, valid and binding
obligation of Dreyfus enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations on the
availability of specific remedies.

         5.3 FINANCIAL STATEMENTS. Attached as Schedule 5.3 hereto is a copy of
the audited consolidated balance sheet of Dreyfus as of May 31, 1999 and the
audited consolidated income statement of Dreyfus for the 12 months then ended,
which have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the consolidated financial
condition of Dreyfus as of the date thereof and the results of operations for
the respective periods set forth therein, subject to normal interim adjustments,
footnotes and other presentation items.


                                       16
<PAGE>


         5.4 FINDER'S FEE. No investment banker, broker, finder or other Person
is entitled to any brokerage or finder's fee or similar commission in respect of
the transactions contemplated by this Agreement. Dreyfus agrees to indemnify and
hold TEPPCO and its Affiliates harmless from and against any and all claims,
liabilities and obligations with respect to any such fees, commissions or
expenses asserted by any such Person on the basis of any act, statement,
agreement or commitment alleged to have been made by Dreyfus or any of its
Affiliates with respect thereto.

                                   ARTICLE VI
                    TRANSFER OF TEPPCO ASSETS OR RIGHT TO USE

         6.1 PERFORMANCE MILESTONE. If EBITDA exceeds:

                           (i) $8.7 million for the Fiscal Year ending on
December 31, 2002; and

                           (ii) $23.5 million for the Development Period (the
provisions of clauses (i) and (ii) are herein collectively referred to as the
"Milestone"), then

TEPPCO shall contribute the TEPPCO Assets and the MB Business to Newco for no
additional consideration. Such contribution shall be through the execution and
delivery by TEPPCO of the Conveyance Document, and TEPPCO shall have no further
obligation with respect thereto except as may be specifically set forth herein
or therein. Solely for the purpose of determining whether the Milestone has been
met, EBITDA, for the period in question, shall be calculated without regard to
amounts that would be classified in accordance with GAAP as extraordinary or
nonrecurring items.

         6.2 FAILURE TO MEET MILESTONE. If either of the requirements of the
Milestone set out in Sections 6.1(i) and (ii) is not met as finally determined
pursuant to Sections 3.1 and 3.5, TEPPCO shall have no obligation to transfer
the TEPPCO Assets or the MB Business, neither Party shall be obligated to close
the transactions contemplated by this Agreement and either Party shall have the
option to terminate this Agreement within the 30 day period following the final
determination of the failure to meet the Milestone. If neither Party exercises
the option to terminate, the Agreement shall automatically terminate on June
30,2003. In the event of termination in accordance with this Section 6.2, TEPPCO
shall pay to Dreyfus a termination fee as provided in Section 8.2.

         6.3 CLOSING TIME AND LOCATION FOR TRANSFER. Subject to the satisfaction
of the conditions set forth in this Agreement, the contribution and transfer of
the TEPPCO Assets and the MB Business to Newco through the execution and
delivery of the Conveyance Document and the assumption by Newco of the Assumed
Liabilities (the "Closing") shall take place at the offices of Fulbright &
Jaworski L.L.P., 1301 McKinney Street, Houston, Texas 77010, or at such other
place as the Parties may mutually agree in writing, at 9:00 a.m. on the later of
(i) March 31, 2003, and (ii) such other date as may be mutually agreed to by the
Parties in writing, to be effective as of 12:01 a.m. on


                                       17
<PAGE>


January 1, 2003 (the "Effective Time"). The date on which the Effective Time
occurs is referred to herein as the "Effective Date".

         6.4 FORMATION OF NEWCO. On or before the Closing, TEPPCO and Dreyfus
shall execute the LLC Agreement and the Partnership Agreement. Following the
formation of Newco, TEPPCO and Dreyfus will cause Newco to make reasonable
arrangements for qualifying Newco to do business in the necessary jurisdictions,
securing insurance and necessary Permits, establishing bank accounts and such
other action as would be appropriate in order for Newco to become the owner of
the TEPPCO Assets in the manner herein contemplated immediately following the
Effective Time.

         6.5 CLOSING. In accordance with the terms and subject to satisfaction
of the conditions set forth in this Agreement, TEPPCO and Dreyfus, as the case
may be, shall undertake, or shall cause Newco to undertake, the following
actions at the Closing:

                  (a) TEPPCO will execute, acknowledge and deliver to Newco the
Conveyance Document and other instruments of transfer, assignment and conveyance
as shall be necessary to vest in Newco the right, title and interest of TEPPCO
and its Affiliates in and to the TEPPCO Assets and the MB Business herein and
therein contemplated, subject only to the representations contained in Exhibit
K.

                  (b) Dreyfus shall contribute to Newco the aggregate Dreyfus
Investment made through the Closing.

                  (c) Each party will have established pursuant to the
Partnership Agreement a Capital Account (as that term is defined in the
Partnership Agreement) which will reflect, in the case of TEPPCO, the net book
value of the TEPPCO Assets for GAAP purposes as of the Effective Date (exclusive
of any basis attributable to capital expenditures made by Dreyfus during the
Term), and, in the case of Dreyfus, the Dreyfus Investment made during the Term.

                  (d) Newco will assume and agree to timely discharge, pay or
perform (as the case may be) the Assumed Liabilities as of the Effective Date
and shall execute and deliver, as appropriate, the Conveyance Document.

                  (e) Newco and TEPPCO or its Affiliate shall execute and
deliver the TEPPCO Storage Agreement. The Dreyfus Storage Agreement shall be
assigned to and assumed by Newco.

                  (f) Simultaneously with the consummation of the transfer of
the TEPPCO Assets and the MB Business, each of the Parties, through its
officers, agents and employees, shall take all action necessary and appropriate
to put Newco into full possession and enjoyment of all of such assets.

                  (g) Upon consummation of the Closing, this Agreement shall
terminate as of the Effective Time except as otherwise specifically provided
herein.


                                       18
<PAGE>

         6.6 INABILITY TO TRANSFER ASSETS. In the event the Milestone has been
met as herein provided but the TEPPCO Assets and the MB Business have not been
transferred to Newco, the Parties will use all commercially reasonable efforts
to:

                  (a) Continue the current structure and operations through
December 31, 2003 so that the economic benefit as specified in Section 3.2 will
continue for the benefit of the Parties. Unless the Parties agree otherwise in
writing, the terms and provisions of this Agreement shall continue in effect,
and the Parties shall continue to be bound thereby, during any extension of this
Agreement.

                  (b) Resolve or remove the impediment that prohibits the
transfer of such assets, although neither Party will be obligated to incur any
liability or obligation or expend funds in conjunction with such efforts.

In the event the transfer of the TEPPCO Assets and the MB Business has still not
occurred by December 31, 2003, this Agreement may be terminated by either Party
giving to the other Party written notice of its election to terminate within 30
days following December 31, 2003. If no notice of termination is given within
such 30 day period, this Agreement shall be automatically extended through
December 31 of 2004 and for each succeeding year thereafter unless and until
either Party gives written notice of its election to terminate within 30 days
following December 31 of any such extended annual period, in which event, this
Agreement shall terminate. In the event such notice of termination is given, the
provisions of Section 8.5(b) shall apply.

         6.7 FURTHER ASSURANCE BY THE PARTIES. Each of the Parties to this
Agreement, at any time or times, on and after the Effective Date, shall, without
further consideration and at its sole expense, execute, acknowledge and deliver
any further bills of sales, assignments, conveyances and other assurances,
documents and instruments of transfer reasonably requested by Newco, and shall
take any other action consistent with the terms of this Agreement that may be
reasonably requested by Newco, for the purpose of assigning, transferring,
granting, conveying and confirming to Newco, or reducing to its possession, any
or all of the TEPPCO Assets as herein contemplated and for effectuating the
transfer of operational control of the MB Business. Each of the Parties shall,
after the Closing, also furnish Newco with such information and documents in
such Party's possession or under such Party's control or which any of the
Parties can execute or cause to be executed, as will enable Newco to prosecute
any and all pending claims, applications and the like which may be assigned
hereunder.

         6.8 THIRD PARTY CONSENTS. Each of TEPPCO and Dreyfus shall use its
commercially reasonable efforts to obtain the consents of third parties as are
necessary for the conveyance of the TEPPCO Assets or rights thereto and the
consummation of the transactions, all as herein contemplated. To the extent that
any of the TEPPCO Assets or rights thereto are not so transferrable by the terms
thereof or consents to the assignment thereof cannot be obtained and the
respective condition to closing has been waived by Dreyfus, subject to the
provisions of Section 6.6, such assets shall be held by TEPPCO in trust for
Newco and shall be performed by Newco in the name of TEPPCO

                                       19
<PAGE>


and all benefits and obligations derived thereunder shall be for the account of
Newco; provided that, where entitlement of Newco to those TEPPCO Assets or
rights is not recognized by any third party, TEPPCO shall, at the request and
expense of Newco, enforce in a reasonable manner, for the account of Newco, any
and all rights of TEPPCO against the third party. All reasonable costs and
expenses incurred by TEPPCO with respect to the performance or enforcement of
the above-described TEPPCO Assets and rights thereto shall be paid or reimbursed
by Newco, and Newco shall indemnify TEPPCO and its Party Indemnitees from any
and all Losses that may arise or be incurred as a result of TEPPCO's undertaking
the foregoing actions.

                                  ARTICLE VII
                              CONDITIONS TO CLOSING

         7.1 CONDITIONS TO OBLIGATION OF DREYFUS. The obligation of Dreyfus to
enter into the agreements and to consummate the transactions contemplated hereby
at the Closing is, at the option of Dreyfus, subject to the satisfaction on or
before the date of Closing of the conditions set forth below, any of which may
be waived by Dreyfus in writing.

                  (a) Satisfaction of Milestone. The Milestone specified in
Section 6.1 shall have been met.

                  (b) Representations, Warranties and Covenant. TEPPCO shall
have performed, satisfied, and complied with, in all material respects, all
covenants and agreements required by this Agreement to be performed, satisfied,
or complied with by it on or before the date of Closing. All representations and
warranties of TEPPCO attached as Exhibit K to this Agreement or in any
certificate, delivered to Dreyfus by or on behalf of TEPPCO under this Agreement
shall be true and correct, in all material respects, on and as of the date of
Closing with the same force and effect as though they had been made on such
date. Dreyfus shall have received a certificate, dated as of the date of
Closing, signed by the President or Vice President of the general partner of
TEPPCO certifying the matters set forth in this subsection.

                  (c) Good Standing. TEPPCO shall have delivered to Dreyfus
certificates issued by appropriate Governmental Authorities evidencing the good
standing and existence of TEPPCO in Texas as of a date not more than ten
calendar days prior to the date of Closing.

                  (d) Approvals. All approvals of Governmental Authorities and
other third parties required for the consummation of the transactions
contemplated by this Agreement shall have been obtained.

                  (e) Closing Actions Taken. The Parties and Newco shall have
executed, acknowledged and delivered the documents, and shall have taken the
respective actions, called for by Sections 6.4 and 6.5.


                                       20
<PAGE>

                  (f) Bring-down Schedules. As of or prior to Closing, TEPPCO
shall have provided Dreyfus: (i) Exhibit J-2 setting forth, as to the knowledge
of TEPPCO, the Assumed Liabilities as of the month end immediately preceding the
month prior to the Effective Date, which shall thereafter be deemed a part of
this Agreement, and the information set forth therein shall not include any
indebtedness for borrowed money except for indebtedness for Discretionary
Capital Expenditures previously approved by Dreyfus, and (ii) Exhibit L setting
forth the financial statements called for by the representations and warranties
of Exhibit K which shall thereafter be deemed a part of this Agreement and the
information contained in those financial statements shall not demonstrate a
material adverse change in the financial condition or results of operations of
the MB Business since the financial statements provided to Dreyfus pursuant to
Section 4.4.

         7.2 CONDITIONS TO OBLIGATION OF TEPPCO. The obligation of TEPPCO to
enter into the agreements and to consummate the transactions contemplated hereby
at the Closing and to transfer the TEPPCO Assets as contemplated hereby is, at
the option of TEPPCO, subject to the satisfaction on or before the date of
Closing of the conditions set forth below, any of which may be waived by TEPPCO
in writing.

                  (a) Satisfaction of Milestone. The Milestone specified in
Section 6.1 shall have been met.

                  (b) Representations, Warranties and Covenants. Dreyfus shall
have performed, satisfied, and complied with, in all material respects, all
covenants and agreements required by this Agreement to be performed, satisfied,
or complied with by it on or before the date of Closing. All representations and
warranties of Dreyfus attached as Exhibit M to this Agreement or in any
certificate, delivered to TEPPCO by or on behalf of Dreyfus under this Agreement
shall be true and correct, in all material respects, on and as of the date of
Closing with the same force and effect as though they had been made on such
date. TEPPCO shall have received a certificate, dated as of the date of Closing,
signed by the President or Vice President of Dreyfus certifying the matters set
forth in this subsection.

                  (c) Good Standing. Dreyfus shall have delivered to TEPPCO
certificates issued by appropriate Governmental Authorities evidencing the good
standing and existence of Dreyfus, and as of a date not more than ten calendar
days prior to the date of Closing, in the state in which it was organized and in
Texas. To the extent provided for under applicable law, Dreyfus shall also have
delivered to TEPPCO certificates or other writings issued by appropriate
Governmental Authorities in such states with respect to Dreyfus evidencing that
all applicable state franchise Taxes have been paid.

                  (d) Approvals. All approvals of Governmental Authorities and
other third parties required for the consummation of the transactions
contemplated by this Agreement shall have been obtained.


                                       21
<PAGE>

                  (e) Closing Actions Taken. The Parties and Newco shall have
executed, acknowledged and delivered the documents, and shall have taken the
respective actions, called for by Sections 6.4 and 6.5.

                  (f) Bring-down Schedules. As of or prior to Closing, Dreyfus
shall have provided to TEPPCO Exhibit N setting forth the financial statements
called for by the representations and warranties of Exhibit M which shall
thereafter be deemed to be a part of this Agreement and the information
contained in those financial statements shall not demonstrate a material adverse
change in the financial condition or results of operations of Dreyfus since the
financial statements provided to TEPPCO pursuant to Section 5.3.

                                  ARTICLE VIII
                           TRANSFER OF CONTRACT RIGHTS

         8.1 TRANSFER OF CONTRACT RIGHTS PROHIBITED.

                  (a) During the Term, Dreyfus and TEPPCO agree that they shall
not transfer, assign or otherwise convey or attempt to transfer, assign or
otherwise convey, to any third party all or any portion of their respective
rights, duties, obligations and other interests in and to this Agreement, any of
the other agreements executed in connection herewith, the TEPPCO Assets or the
MB Business (collectively with respect to each Party, as such rights, duties,
obligations and other interests may exist from time to time, and regardless of
whether held by the Party and/or its permitted Affiliates or assignees, the
"Contract Rights"), except with the written consent of the other Party or as
otherwise provided in this Agreement. Any such transfer, assignment or
conveyance or attempted transfer, assignment or conveyance shall be void and of
no force and effect. The Parties recognize that a sustained period of operation
of the MB Business as herein contemplated is necessary to accurately determine
the results and prospects for such business. Accordingly, the Parties agree that
the foregoing prohibition on transfer of their respective Contract Rights in
such agreements is reasonable for the Term of this Agreement.

                  (b) Notwithstanding the foregoing, each Party may transfer its
Contract Rights in its entirety, but not in part, to an Affiliate that is wholly
owned, directly or indirectly, by its Parent; provided, however, the Contract
Rights remain subject to this Agreement and such Affiliate agrees in writing to
be bound by this Agreement.

         8.2 FAILURE TO MEET MILESTONE. If this Agreement is terminated pursuant
to Section 6.2, TEPPCO shall pay to Dreyfus a termination fee equal to the
aggregate capital expenditures by Dreyfus and its Affiliates in the TEPPCO
Assets (the "Dreyfus Investment") as of the last date of the Term.


                                       22
<PAGE>

         8.3 CHANGE OF CONTROL.

                  (a) If a Dreyfus Change of Control occurs, TEPPCO shall have
the option to terminate this Agreement upon (i) the giving of a written notice
of termination to Dreyfus within 30 days of the effective date of Dreyfus'
notice of consummation given pursuant to Section 8.3(b), and (ii) the payment to
Dreyfus of a termination fee which shall be the greater of (x) 50% of the Net
EBITDA for the Pricing Period immediately preceding the Notice Month times 10.0
and (y) the Dreyfus Investment as of the end of such Pricing Period. "Notice
Month" means the month during which the Dreyfus Change of Control occurs with
respect to Dreyfus or its applicable Affiliate.

                  (b) Dreyfus shall keep TEPPCO promptly advised (subject to
appropriate confidentiality arrangements) of any proposed or threatened Dreyfus
Change of Control, whether voluntary or involuntary, within its knowledge, and
shall provide written notice within one Business Day of the consummation
thereof.

         8.4 OPERATIONAL DISPUTE. In the event the Parties are unable to agree
on a written proposal by either Party for a Discretionary Capital Expenditure
with an estimated cost equal to or greater than $1,000,000 by a date 180 days
after the date on which such proposal was made, then either Party may terminate
this Agreement by giving written termination notice no later than 30 days after
the last day of such 180 day period or a Party's right to exercise the
termination option pursuant to this Section 8.4 is waived with respect to the
Discretionary Capital Expenditure proposal that is the subject of the
disagreement. Upon the giving of such termination notice, the provisions of
Section 8.5 shall apply.

         8.5 CERTAIN TERMINATION PAYMENTS.

                  (a) Should either Party exercise the termination option of
Section 8.4 or 10.1, it shall give written notice of such exercise and the
following provisions shall apply:

                           (i) If these termination provisions are instituted by
Dreyfus pursuant to Section 8.4 or Dreyfus is the First Party in Section 10.1,
TEPPCO shall pay to Dreyfus a termination fee in an amount equal to the greater
of: (x) 50% of the Net EBITDA for the Pricing Period ending with the month
immediately preceding the month in which the written notice is given exercising
the termination option times 7.0 and (y) the Dreyfus Investment at the end of
such Pricing Period.

                           (ii) If these termination provisions are instituted
by TEPPCO pursuant to Section 8.4 or TEPPCO is the First Party in Section 10.1,
TEPPCO shall pay to Dreyfus a termination fee in an amount equal to the greater
of: (x) 50% of the Net EBITDA for such Pricing Period times 13.0 and (y) the
Dreyfus Investment at the end of such Pricing Period.

                  (b) In the event of termination of this Agreement pursuant to
Section 6.6, TEPPCO shall pay to Dreyfus a termination fee equal to:


                                       23
<PAGE>

                           (i) If the termination provisions of Section 6.6 are
instituted by Dreyfus, TEPPCO shall pay to Dreyfus a termination fee in an
amount equal to the greater of: (x) 50% of the Net EBITDA for the Pricing Period
that coincides with the most recently ended Fiscal Year times 7.0, and (y) the
Dreyfus Investment at the end of such Pricing Period.

                           (ii) If the termination provisions of Section 6.6 are
instituted by TEPPCO, TEPPCO shall pay to Dreyfus a termination fee in an amount
equal to the greater of: (x) 50% of the Net EBITDA for such Pricing Period times
13.0, and (y) the Dreyfus Investment at the end of such Pricing Period.

                  (c) In the event of termination of this Agreement pursuant to
Section 12.1(b) or (c), TEPPCO shall pay to Dreyfus a termination fee equal to:

                           (i) If the termination is pursuant to Section
12.1(b), TEPPCO shall pay to Dreyfus a termination fee in an amount equal to the
greater of: (x) 50% of the Net EBITDA for the Pricing Period ending with the
month immediately preceding the thirty day period specified in such section
times 13.0, and (y) the Dreyfus Investment at the end of such Pricing Period.

                           (ii) If the termination is pursuant to Section
12.1(c), TEPPCO shall pay to Dreyfus a termination fee in an amount equal to the
greater of: (x) 50% of the Net EBITDA for the Pricing Period ending with the
month immediately preceding the thirty day period specified in such section
times 7.0, and (y) the Dreyfus Investment at the end of such Pricing Period.

         8.6 RIGHT OF FIRST REFUSAL. If, during the Term, TEPPCO intends to sell
(i) any of the TEPPCO Assets other than assets in any transaction having a book
value of $5,000,000 or less, or (ii) its ownership interest in any Affiliate of
which more than 75% of such entity's EBITDA for the preceding 12 month period is
derived from the MB Business (each a "Disposition"), such Disposition may be
made only if TEPPCO receives with respect thereto a bona fide binding written
proposal for the acquisition of such assets (an "Acquisition Proposal"), and
then only in compliance with the following procedures:

                  (a) Upon receipt of an Acquisition Proposal, TEPPCO shall
offer, by written notice (the "Offer") to Dreyfus, to sell the assets to Dreyfus
on the terms (including price) specified in the Acquisition Proposal pursuant to
the terms of this Section 8.6. Such Offer shall contain a description of and a
copy of the Acquisition Proposal subject to appropriate confidentiality
provisions. In addition, TEPPCO shall provide to Dreyfus all other information
with respect to the Acquisition Proposal and the proposed transferee reasonably
requested by Dreyfus in order for it to evaluate the Acquisition Proposal and to
verify the bona fide nature thereof.

                  (b) Dreyfus shall have the right, to be exercised by written
notice (the "Acceptance") from Dreyfus to TEPPCO on or before the 30th day
following receipt of

                                       24
<PAGE>


the Offer (the "Offer Period"), to elect to purchase such assets pursuant to the
terms of the Offer. Should Dreyfus elect not to exercise the option, it shall
have the option to terminate this Agreement upon the consummation of a sale of
such assets to a third party if Dreyfus gives written notice to TEPPCO of such
election to terminate on or before the end of such 30 day period. If Dreyfus
does not respond during such 30 day period, it shall be deemed to have elected
not to (i) purchase the assets pursuant to the Offer or (ii) terminate this
Agreement.

                  (c) If Dreyfus accepts the Offer, the closing of the
acquisition of the assets shall be consummated on or before the 60th day after
TEPPCO receives the Acceptance but effective at the end of the calendar month
occurring on or immediately prior to such closing. The acquisition shall be
consummated at a closing in accordance with the provisions of Section 8.7, at
which time Dreyfus shall deliver to TEPPCO the purchase price (in the form of
immediately available funds), and TEPPCO shall deliver to Dreyfus such transfer
documentation reasonably acceptable to Dreyfus as shall be required to evidence
the transfer of such assets.

                  (d) If Dreyfus does not accept the Offer, TEPPCO shall be
permitted for a period of six months after expiration of the Offer Period to
sell all (but not less than all) of the subject assets on terms not more
favorable to such transferee than the terms specified in the Acquisition
Proposal and at a price that is not less than the price specified in the
Acquisition Proposal. Should a third party acquire the assets in question and
unless Dreyfus has elected to terminate the Agreement pursuant to Section
8.6(b), it would acquire those assets subject to this Agreement and the Dreyfus
Storage Agreement which would continue in accordance with their respective
terms. If Dreyfus has elected to terminate this Agreement pursuant to Section
8.6(b), this Agreement shall terminate effective as of the closing of such sale
of the subject assets, subject, however, to the obligation to pay to Dreyfus the
termination fee specified below in Section 8.6(e). TEPPCO agrees to give prompt
notice to Dreyfus of such closing.

                  (e) Upon the closing of a sale pursuant to Section 8.6(d) and
termination of this Agreement by Dreyfus pursuant to Section 8.6(b), TEPPCO
shall pay to Dreyfus a termination fee in an amount equal to the greater of (i)
50% of the Net EBITDA for the Pricing Period immediately preceding the month in
which the sale occurred, times 10 and (ii) the Dreyfus Investment at the end of
such Pricing Period.

         8.7 CLOSING.

                  (a) The closing of any transaction pursuant to this Article
VIII shall be held at TEPPCO's principal office on a closing date which shall be
no later than 60 days after, in the case of a termination of this Agreement
pursuant to (i) Section 6.2, the date of the final determination that the
Milestone has not been met, (ii) Section 6.6 or 12.1(b) or (c), the date of the
written notice of termination, (iii) Section 8.3, or 10.1, the end of the
applicable Pricing Period, (iv) Section 8.4, the end of the 30 day period set
forth in such section, and (v) Section 8.6, as specified in that section.


                                       25
<PAGE>

                  (b) At such closing, any transferor Party shall deliver to the
transferee Party such instruments of sale, assignment and transfer of its (and
its transferee's, if any) entire right, title and interest in the Contract
Rights or the subject assets, as may be the case, (including, without
limitation, any rights of the transferor Party to receive repayment of its
advances or payments of EBITDA and/or other payments for periods following such
closing) and shall transfer to the transferee Party title to such Contract
Rights or assets, free and clear of all Liens by or through such Party or its
Affiliates, and shall deliver to the transferee Party such evidence of due
authorization, execution and delivery and of the absence of any such Liens or
competing claims as the transferee Party reasonably may request. The transferee
Party shall pay the purchase price or termination fee, as applicable, as well as
any and all stamp, recording and transactional taxes payable upon the sale,
assignment and transfer (other than taxes imposed on or with respect to the
transferor Party which are payable as result of the sale, assignment or
transfer). The payment of the purchase price or termination fee, as may be the
case, shall in each case be in immediately available funds payable at the
closing and shall be deemed to include and constitute full payment and
satisfaction for the transferring Party's entire right, title and interest in
the Contract Rights or assets, as may be the case. No interest shall be due or
owing on any amounts paid pursuant to the provisions of this Article VIII unless
specifically contracted for in writing.

         8.8 TRANSFER PROCEDURES. Assuming this Agreement is not terminated
pursuant to its provisions, any Party who desires to transfer its Contract
Rights shall arrange for any permitted transferee to be bound by the provisions
of this Agreement, as it may then be amended, by having such transferee execute
two counterparts of an instrument of assignment reasonably satisfactory in form
and substance to the other Party. If and when the consent of the other Party to
such assignment and the substitution of such transferee hereof is secured and
the other requirements of this Article VIII are satisfied, the transferee shall
become a party to this Agreement as to the Contract Rights thus transferred
effective as of the first day of the calendar month during which the other Party
actually receives the aforesaid instrument of assignment executed by both the
transferor and transferee. The transferee shall be required to pay any and all
reasonable out-of-pocket filing and recording fees, legal fees, accounting fees,
and other charges and fees incurred by the other Party and its counsel as a
result of such transfer. If the transferee is an Affiliate of the transferor,
the transferor will continue to be liable for its obligations and liabilities
under this Agreement. However, if the transferee is not an Affiliate of the
transferor, the transferor shall be released from any and all obligations and
liabilities hereunder, and the other Party to this Agreement shall look solely
to the transferee for performance of any such obligations or satisfaction of
such liabilities.

                                   ARTICLE IX
                              ADDITIONAL AGREEMENTS

         9.1 EFFORTS TO SATISFY CONDITIONS. Dreyfus and TEPPCO agree to use
their commercially reasonable efforts to bring about the satisfaction of the
conditions


                                       26
<PAGE>


specified in Section 6.1 and Article VIIVII hereof. The Parties agree to
execute, and shall cause Newco to execute, the other agreements called for by
this Agreement on or prior to the Closing, including the Operating Procedures,
the Dreyfus Storage Agreement and the TEPPCO Storage Agreement.

         9.2 RETENTION OF RECORDS. TEPPCO shall retain all Records, including
computer disks reflecting any books or records, documents or other papers, or
other information or data relating to the operation of the MB Business or the
TEPPCO Assets. Dreyfus and its authorized representatives shall have the right
to inspect and, at its expense, copy, at any time during regular business hours
for any proper purpose, the corporate, accounting, auditing and tax books,
records (including work papers) and other books and records relating to the MB
Business and the TEPPCO Assets in the possession of TEPPCO or its Affiliates.
For a period of seven years following the Effective Date, TEPPCO and Dreyfus
agree that they will not dispose of or destroy any such books and records.

         9.3 NONDISCLOSURE OF PROPRIETARY INFORMATION.

                  (a) Each of TEPPCO and Dreyfus agrees that, for a period
beginning on the date of this Agreement and ending on the second anniversary
date of the earlier to occur of (i) the termination of this Agreement for
whatever reason, or (ii) the disposition by TEPPCO or Dreyfus, respectively (or,
to the extent such Contract Rights have been transferred to an Affiliate of such
Party as permitted hereby, by such Affiliate), of its Contract Rights to a
Person that is not a wholly-owned subsidiary of such Party's Parent, it and its
Affiliates will:

                           (i) maintain the confidentiality of all confidential
and proprietary non-public information relating to TEPPCO, Dreyfus, the MB
Business or the TEPPCO Assets, applying the same standards as it does with
respect to its own similar confidential or proprietary non-public information;
and

                           (ii) not recruit any employees of the other Party
employed in the MB Business.

Notwithstanding the foregoing, each Party and its Affiliates may disclose
information that (x) is required to be disclosed by applicable state or federal
tax or securities laws to the extent, and only to the extent, the laws require
the disclosure and such Party provides the other Party prior written notice of
its intent to provide the disclosure and the general text of the disclosure, or
(y) is required to be disclosed by a court or administrative body of competent
jurisdiction.

                  (b) Notwithstanding any other provision in this Agreement,
Dreyfus recognizes and agrees that it shall not have access to information
regarding inventory levels maintained by customers of the TEPPCO Assets.

         9.4 TRADEMARK AND TRADE NAME LICENSE. Should the Closing occur and the
Parties wish to continue to use any of the tradenames, trademarks or service
marks


                                       27
<PAGE>


used by TEPPCO in the MB Business or in connection with the TEPPCO Assets,
TEPPCO will negotiate in good faith a license for such continued use, subject to
appropriate protections of TEPPCO's rights in and to such names and marks and
its use thereof in its other business operations.

                                   ARTICLE X
                            NONCOMPETITION AGREEMENT

         10.1 NONCOMPETITION COVENANT.

                  (a) Each Party agrees that, for a period beginning on the date
of this Agreement and ending on the earlier to occur of (i) the termination of
this Agreement for whatever reason, or (ii) the disposition, directly or
indirectly, by TEPPCO or Dreyfus, respectively (or, to the extent such interest
has been transferred to an Affiliate of such Party as permitted hereby, by such
Affiliate), of its Contract Rights to a Person that is not a wholly-owned,
direct or indirect, subsidiary of such Party's Parent, no such Party or any of
its Restricted Affiliates will engage or participate in, or carry on, directly
or indirectly, either as proprietor, partner, member, director, stockholder,
agent, consultant, advisor, trustee, Affiliate, or otherwise, whether or not for
compensation, any business that competes with the MB Business in the Territory.
Each Party acknowledges and agrees that the foregoing noncompetition agreement
is given in partial consideration for the other Party's entering into this
Agreement.

                  (b) Each of the Parties or its Affiliates have, pursuant to
Storage Agreements, leased or obtained the right to use storage capacity in the
TEPPCO Assets. Without limiting the generality of the provisions of Section
10.1(a) and in furtherance thereof, each of the Parties agrees that it and its
Affiliates will use such storage capacity solely for its own internal business
operations and will not lease or sublease such storage capacity to third
parties, and will direct to TEPPCO any such third party seeking access to the
TEPPCO Assets so that such additional business shall be for the benefit of both
Parties during the Term. The foregoing shall not be interpreted to prohibit or
restrict the current practices of TEPPCO with respect to such storage capacity.
Additionally, except as otherwise herein specifically provided, the Parties
agree to act in good faith with respect to each other and the MB Business to
maximize the returns from such business throughout the Term.

                  (c) In the event either Party (the "First Party") or any of
its Restricted Affiliates desires to pursue a business opportunity that will
compete with the MB Business in the Territory as prohibited by Section 10.1 (
"Competing Business Transaction"), such Party shall be obligated to promptly
bring such Competing Business Transaction to the attention of the other Party
(the "Second Party"), to fully disclose all details regarding the proposed
opportunity (subject to the execution of appropriate confidentiality
undertakings), and to offer such business opportunity to become part of the MB
Business. The Parties shall negotiate in good faith for a period of forty-five
(45) days (unless the business opportunity dictates a shorter period of time, in
which event,

                                       28
<PAGE>


for such shorter time period as will avoid the loss of such opportunity) to
bring such Competing Business Transaction into the MB Business, either by
contribution or purchase. Should the Parties be unable to agree within such
forty-five (45) day period on the terms and provisions for incorporating the
Competing Business Transaction into the MB Business and the First Party or its
Restricted Affiliate, as may be the case, wishes to pursue the Competing
Business Transaction rather than continue with the MB Business and the
transactions contemplated by this Agreement, subject to the provisions of
Section 10.1(e) below, either Party may terminate this Agreement by giving
written notice to the other Party within 30 days of the consummation of the
Competing Business Transaction, in which event the provisions of Section 8.5(a)
shall apply. The First Party agrees to give written notice within one Business
Day of the consummation of such transaction.

                  (d) In the event the First Party or any of its Restricted
Affiliates desires to pursue a Competing Business Transaction which cannot
become a part of the MB Business or Newco for any reason other than the failure
of the Second Party to consent to such transaction, and the First Party or its
Restricted Affiliate, as may be the case, elects to pursue such Competing
Business Transaction rather than continue with the MB Business and the
transactions contemplated by this Agreement, the First Party shall give written
notice of such election to the Second Party and either Party may terminate this
Agreement by giving written notice to the other Party within 30 days of the
consummation of the Competing Business Transaction, in which event the
provisions of Section 8.5(a) shall apply. The First Party agrees to give written
notice within one Business Day of the consummation of such transaction.

                  (e) Notwithstanding any other provision of this Agreement, the
Second Party may waive the non-competition provision of this Article X as it
applies to any Competing Business Transaction offered by the First Party under
Section 10.1(c). In such event, (i) the First Party or its Restricted Affiliate,
as may be the case, may participate in such Competing Business Transaction
without being in violation of this Agreement; (ii) the Second Party thereby
waives any right to participate in, or to benefit from, such transaction; and
(iii) neither Party shall be entitled to invoke the termination option of
Section 8.5(a) as a result of such transaction. Any such waiver shall apply only
to the specific Competing Business Transaction being presented and shall not be
construed as applicable to any other Competing Business Transaction.

                  (f) Notwithstanding the foregoing or any other provision of
this Agreement:

                           (i) Neither Party nor any of its Affiliates shall be
prohibited from conducting business activities or operations outside the
Territory of a similar nature as are conducted by such Party or Affiliate as of
the date hereof; or

                           (ii) Neither Party nor any of its Affiliates shall be
prohibited from constructing and/or operating other pipelines to, from or
through the Territory so long as

                                       29
<PAGE>

they do not directly compete with the pipelines that comprise a part of the
TEPPCO Assets as of the date hereof, or

                           (iii) Neither Party nor any of its Affiliates shall
be prohibited from operating pipelines to, from or through the Territory which
are currently operated by such Persons, including the servicing of Persons who
are customers of the TEPPCO Assets, or from expanding, improving or otherwise
modifying such pipelines, or

                           (iv) Neither Party nor any of its Affiliates has any
obligation or duty to first offer to the other Party new business ideas that are
outside the scope of the MB Business.

         10.2 DEFINITIONS. For purposes of this Article X:

                  (a) "Restricted Affiliates" shall mean with respect to each
Party, any Person in which such Party's Parent owns, directly or indirectly, at
least a 51% voting or equity interest, or which it otherwise controls. For
purposes of this definition, "control" shall have the definition given that term
in the definition of "Affiliate" and Louis Dreyfus Natural Gas Corporation shall
not be deemed to be a Restricted Affiliate of Dreyfus.

                  (b) "Territory" shall mean Chambers and Harris Counties,
Texas.

         10.3 REASONABLENESS OF COVENANT. Each Party acknowledges that the
covenant provided in Section 10.1 hereof is manifestly reasonable on its face
and is no more restrictive than is required for the protection of the MB
Business, including the interest of the other Party in the MB Business. In the
event that the provisions of Section 10.1 should ever be deemed to exceed the
time and geographic limitations permitted by applicable law, then such
provisions shall be reformed to the maximum time or geographic limitations
permitted by applicable law.

         10.4 INJUNCTIVE RELIEF. It is specifically understood and agreed that
any breach of the provisions of Section 10.1 hereof by a Party is likely to
result in irreparable harm to the other Party and that an action at law for
damages alone will be an inadequate remedy for such breach, and that the
non-breaching Party would suffer irreparable harm in the event a Party fails to
comply with its obligations hereunder. Therefore, in addition to any other
remedy that may be available to it, the non-breaching Party shall be entitled to
enforce the specific performance of Section 10.1 of the breaching Party and to
seek both temporary and permanent injunctive relief (to the extent permitted by
law) without the necessity of proving actual damages, and such other relief as
the court may allow.


                                       30
<PAGE>


                                   ARTICLE XI
                                 INDEMNIFICATION

         11.1 INDEMNITY OBLIGATION. Subject to the provisions of this Agreement,
including without limitation this Article XI and Article XII:

                  (a) Each of TEPPCO and Dreyfus shall indemnify and hold
harmless the other Party, its Affiliates and the officers, directors,
shareholders, agents, employees, representatives, successors and assigns of each
of them (said Persons being sometimes referred to as "Party Indemnitees") in
respect of any and all Losses, relating to matters reasonably incurred by such
other Party to the extent arising from each and all of the following:

                           (i) any breach of a representation or warranty made
by such Party in this Agreement or any Schedule or Exhibit attached hereto or
delivered pursuant hereto; or

                           (ii) the material breach of any covenant, agreement
or obligation of such Party or its Affiliates contained in this Agreement or any
Schedule or Exhibit hereto, the Organizational Agreements or any other
instrument contemplated by this Agreement.

                  (b) TEPPCO shall indemnify and hold harmless Dreyfus and its
Party Indemnitees in respect of any and all Losses relating to matters
reasonably incurred by such parties to the extent arising from:

                           (i) any Liens against the TEPPCO Assets other than
the Permitted Encumbrances or Liens resulting from borrowings for Discretionary
Capital Expenditures; or

                           (ii) (x) any actual or alleged release of any
Hazardous Materials on or from the TEPPCO Assets, (y) any Environmental
Liability related to the TEPPCO Assets, or (z) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing;
provided that such indemnity shall not, as to any indemnitee, be available to
the extent that such Losses are a result of the acts or omissions of Dreyfus or
its Party Indemnitees; and provided further, that the indemnification
obligations of this Section 11.1(b)(ii) shall apply only for Losses resulting
from events specified in clauses (x), (y) and (z) above which occurred during
the Term.

                  (c) Amounts covered by insurance or other proceeds,
reimbursements or contributions paid by Persons not Affiliates of any of the
Parties shall not be included in determining Losses hereunder. To the extent
such amounts are included under this Section 11.1 and are later reimbursed by
such non-Affiliates, equitable adjustments and repayments shall be made.

         11.2 PROCEDURE. All claims for indemnification by a Person under this
Article XI (the party claiming indemnification and the party against whom such
claims are

                                       31
<PAGE>


asserted being hereinafter called the "Indemnified Party" and the "Indemnifying
Party", respectively) shall be asserted and resolved as follows:

                  (a) Whenever any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder (which shall be deemed
to include any claim which exhausts any part of the applicable Threshold
limitation specified in Section 11.3) is asserted against or sought to be
collected from such Indemnified Party by a third party, such Indemnified Party
shall, within 15 days of the receipt thereof, give notice (the "Claim Notice")
to the Indemnifying Party of such claim or demand, specifying the nature of and
specific basis for such claim or demand and the amount or the estimated amount
thereof to the extent then feasible, which estimate shall not be binding upon
the Indemnified Party in its effort to collect the final amount of such claim or
demand. To the extent the Indemnifying Party is prejudiced thereby, the failure
to so notify the Indemnifying Party of any such claims or action shall relieve
the Indemnifying Party from liability that it may have to the Indemnified Party
under the indemnification provisions contained in this Article XI, but only to
the extent of the loss directly attributable to such failure to notify, and
shall not relieve the Indemnifying Party from any liability that it may have to
the Indemnified Party otherwise than under this Article XI. The Indemnifying
Party shall, within 20 days of the receipt of a Claim Notice, notify the
Indemnified Party as to whether it accepts, in whole or in part, its indemnity
obligation, in which case, the Indemnifying Party shall assume and thereafter
conduct the defense thereof; provided that the Indemnified Party shall be
entitled to participate in the defense thereof at its own expense. If the
Indemnifying Party disputes liability under this Section 11.2(a) or otherwise
fails to defend within a reasonable time after notice, the Indemnified Party
will have the right to undertake the defense, compromise or settle such third
party claim, and to compromise or settle such claim on behalf of, and for the
account of the Indemnifying Party, at the expense and risk of the Indemnifying
Party. The consent to the entry of any judgment or settlement of any claim
hereunder by the Indemnifying Party may only be made upon the prior approval by
the Indemnified Party, which approval shall not be unreasonably withheld, unless
the judgment or proposed settlement involves only the payment of money damages
(which would be paid by the Indemnifying Party) and does not impose any
injunction or other equitable relief on the Indemnified Party in which case
consent is not required.

                  (b) If requested by the Indemnifying Party, the Indemnified
Party agrees to cooperate with the Indemnifying Party and its counsel in
contesting any claim or demand that the Indemnifying Party elects to contest,
or, if appropriate and related to the claim in question, in making any
counterclaim against the person asserting the third party claim or demand, or
any cross-complaint against any Person. The Indemnifying Party shall reimburse
such Indemnified Party for reasonable out-of-pocket expenses incurred by the
Indemnified Party in such cooperation.

                  (c) If any Indemnified Party should have a claim against the
Indemnifying Party hereunder that does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to the
Indemnifying Party.

                                       32
<PAGE>

Reimbursement of any Losses incurred by the Indemnified Party pursuant to this
Article XI shall be made within 30 days after documentation is sent to the
Indemnifying Party by the Indemnified Party. If the Indemnifying Party disputes
such claim, such dispute shall be resolved in the manner set forth in Article
XIV hereof and reimbursement shall be withheld pending the outcome of the
proceeding under Article XIV.

         11.3 INDEMNIFICATION THRESHOLD. Except as otherwise specifically
provided herein, the obligation of TEPPCO or Dreyfus to make payments to the
other Party or the Party Indemnitees of the other Party pursuant to Section 11.1
shall be limited to the excess of the aggregate of the amounts of any such
Losses over $500,000 except for the TEPPCO indemnification obligations of:

                           (i) Section 11.1(b)(i) which shall not be subject to
a minimum threshold limitation; and

                           (ii) Section 11.1(b)(ii) which shall be limited to
the excess of the aggregate amount of such Losses over the Dreyfus Investment.
(Each of the Dreyfus Investment and the $500,000 specified above in this Section
11.3 is sometimes herein referred to as the "Threshold.").

         11.4 SURVIVAL. The representations, warranties and indemnities of
TEPPCO or Dreyfus contained in this Agreement shall survive the making of this
Agreement, any investigation of the other party hereto and the Closing and,
except as set forth below, shall terminate on the first anniversary of the
Effective Date; provided that, if a claim or demand for indemnification has been
made or given within the applicable survival period and has not been resolved as
of the expiration of such period, such claim (and, if the claim results from a
breach of a representation or warranty, such representation or warranty) shall
survive until the final resolution of such claim. In the event that the Closing
does not occur and this Agreement is terminated, for whatever reason, effective
upon such termination, all representations, warranties and indemnities shall
terminate other than the indemnification obligation of Section 11.1(b)(ii) which
shall survive such termination.

         11.5 EXCLUSIVE REMEDY; LIMITATIONS.

                  (a) THE PARTIES AGREE THAT ONLY ACTUAL DAMAGES SHALL BE
RECOVERABLE UNDER THIS AGREEMENT AND HEREBY WAIVE ANY RIGHT TO RECOVER SPECIAL,
PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR EXEMPLARY DAMAGES EXCEPT TO THE EXTENT AN
INDEMNIFIED PARTY SUFFERS SUCH DAMAGES TO AN UNAFFILIATED THIRD-PARTY IN
CONNECTION WITH A THIRD-PARTY CLAIM, IN WHICH EVENT SUCH DAMAGES SHALL BE
RECOVERABLE. Notwithstanding anything to the contrary in this Agreement, the
indemnification provisions of this Agreement shall be the exclusive remedies for
any claim based upon this Agreement or the transactions contemplated hereby
(except with respect and to the extent the Parties or their Affiliates are
parties to other agreements, in which case such other agreements shall govern
their obligations

                                       33
<PAGE>


with respect to such agreements). In furtherance of the foregoing and except for
the indemnification provisions of this Agreement, effective upon the execution
hereof, the Parties, on behalf of themselves and their Affiliates, each release,
remise and forever discharge the other Party and its Affiliates, and all such
Parties' stockholders, officers, directors, employees, agents, managers,
advisors and representatives from any and all claims and losses, in law or in
equity, known or unknown, which such parties might now or subsequently may have,
based on, relating to or arising out of this Agreement, the ownership, use or
operation of TEPPCO Assets or the MB Business or the condition, quality, status
or nature of such assets or business, including rights to contribution under
applicable environmental laws, even if caused in whole or in part by the
negligence (whether sole, joint or concurrent), strict liability or other legal
fault of any released Person, excluding, however, any contractual rights arising
under other written agreements entered into by the Parties or their respective
Affiliates.

                  (b) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, an Indemnifying Party's aggregate indemnity
obligation with respect to Losses under or in connection with this Agreement or
the transactions contemplated hereby shall not exceed $5,000,000 except for the
indemnification obligation of TEPPCO under Section 11.1(b) which shall not be
subject to the foregoing limitations.

                                   ARTICLE XII
                                   TERMINATION

         12.1 TERMINATION PRIOR TO CLOSING. This Agreement shall terminate, or
may be terminated, as the case may be, as follows:

                  (a) By mutual agreement of Dreyfus and TEPPCO;

                  (b) By Dreyfus, by written notice if a material default shall
be made in the observance or performance by TEPPCO or of any agreements and
covenants of TEPPCO herein contained, or if there shall have been a material
breach by TEPPCO of any warranties and representations; provided, however, that
Dreyfus shall have given TEPPCO thirty days prior written notice of such default
or breach, and TEPPCO shall not have cured such default or breach within such
thirty day period, in which event the provisions of Section 8.5(c)(i) shall
apply;

                  (c) By TEPPCO, by written notice if a material default shall
be made by Dreyfus in the observance or performance by it of any agreements and
covenants of Dreyfus herein contained, or if there shall have been a material
breach by Dreyfus of any warranties and representations; provided, however, that
TEPPCO shall have given Dreyfus thirty days prior written notice of such default
or breach, and Dreyfus shall not have cured such default or breach within such
thirty day period, in which event the provisions of Section 8.5(c)(ii) shall
apply;

                  (d) Upon the exercise of an option to terminate as provided in
Section 6.2, 6.6, 8.3, 8.4, 8.6 or 10.1; or


                                       34
<PAGE>

                  (e) Automatically, as provided in Section 6.2.

         12.2 LIABILITY UPON TERMINATION. If this Agreement is terminated
pursuant to any provision of Section 12.1 or due to the failure of either Party,
for whatever reason, to satisfy the Closing conditions of Article VII, neither
Party shall have any liability to the other Party hereunder. Notwithstanding the
foregoing provisions or the termination of this Agreement pursuant to this
Article, obligations that by their terms continue in existence or that are
created as a result of such termination, including the obligation to pay a
termination fee or other amounts as a result of such termination and amounts
payable pursuant to Section 3.2, and the provisions of Sections 9.2, 9.3, and
this 12.2 and of Articles XI, XIII, XIV and XV shall continue in effect.

         12.3 EFFECTIVE DATE OF TERMINATION. All notices of termination given
pursuant to this Agreement shall specify the effective date of such termination
which shall not be less than 30 days, nor more than 60 days, from the date of
such notice. Should a Party fail to state a termination date, it shall occur 30
days from the date of such notice unless the Parties agree otherwise.

         12.4 TERMINATION OF INTEREST. Upon the termination of this Agreement
(other than through the exercise by Dreyfus of an Offer pursuant to Section 8.6)
and the payment to Dreyfus of all termination and other amounts due hereunder,
Dreyfus shall (i) convey or release to TEPPCO the Dreyfus' Contract Rights and
the Dreyfus Investment, and (ii) cease to have any ongoing right, interest or
claim in or to the TEPPCO Assets, the MB Business or any income derived
therefrom.

                                  ARTICLE XIII
                                    EXPENSES

         Except as otherwise set forth herein, and whether or not the
transactions contemplated by this Agreement shall be consummated, each Party
agrees to pay, without right of reimbursement from any other Party, the costs
incurred by the Party incident to the preparation and execution of this
Agreement and performance of its obligations hereunder, including the fees and
disbursements of legal counsel, accountants and consultants employed by the
Party in connection with the transactions contemplated by this Agreement. The
pre-formation and pre-organization costs of Newco and the General Partner shall
be shared equally by TEPPCO and Dreyfus.

                                  ARTICLE XIV
            RESOLUTION OF DISPUTES; CONSENT TO JURISDICTION AND VENUE

         The Parties agree that, except as otherwise specifically provided
herein, all disputes under this Agreement shall be resolved in accordance with
the procedures set forth in Exhibit O hereto.



                                       35
<PAGE>

                                   ARTICLE XV
                               GENERAL PROVISIONS

         15.1 FURTHER ASSURANCES. At any time or from time to time at and after
the Effective Time, each of the Parties shall, at the request of the other,
execute and deliver or cause to be executed and delivered all the assignments,
consents, documents and instruments, and take or cause to be taken all the other
reasonable actions as may be necessary or desirable to more fully and
effectively carry out the intent and purposes of this Agreement.

         15.2 NOTICES. All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be deemed to have
been duly given if in writing and delivered personally or sent via first-class,
postage prepaid, registered or certified mail (return receipt requested), or by
overnight delivery service or facsimile transmission addressed as follows:

                  If to TEPPCO:

                          TE Products Pipeline Company, Limited Partnership
                          2929 Allen Parkway, Suite 3200
                          Houston, Texas 77019
                          Attention: President
                          Telephone: (713) 759-3636
                          Facsimile Number: (713) 759-3957

                  and copy to:

                          Texas Eastern Products Pipeline Company
                          2929 Allen Parkway, Suite 3200
                          Houston, Texas 77019
                          Attention: General Counsel
                          Telephone: (713) 759-3968
                          Facsimile Number: (713) 759-3645

                  If to Dreyfus:

                         Louis Dreyfus Plastics Corporation
                         10 Westport Road
                         Wilton, CT 06897
                         Attention: President
                         Telephone: 203/761-8000
                         Facsimile Number: 203/761-8119


                                       36
<PAGE>

                  and copy to:

                         Louis Dreyfus Plastics Corporation
                         10 Westport Road
                         Wilton, CT 06897
                         Attention: General Counsel
                         Telephone: 203/761-8000
                         Facsimile Number: 203/761-8321

         Any Party may change the address to which the communications are to be
directed to it by giving notice to the other in the manner provided in this
Section 15.2. Notice by mail shall be deemed to have been given and received on
the third calendar day after posting. Notice by overnight delivery service,
facsimile transmission or personal delivery shall be deemed given on the date of
actual delivery.

         15.3 GOVERNING LAW. This Agreement and the performance of the
transactions contemplated hereby shall be governed by and construed and enforced
in accordance with the laws of the State of Delaware, without regard to any
conflict-of-laws provision thereof that would otherwise require the application
of the law of any other jurisdiction.

         15.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, together
with the certificates, documents, instruments and writings that are delivered
pursuant hereto, set forth the entire agreement and understanding of the Parties
with respect to the transactions contemplated hereby and supersede all prior
agreements, arrangements and understandings relating to the subject matter
hereof. No representation, promise, inducement or statement of intention with
respect to the subject matter of this Agreement has been made by any Party that
is not embodied in this Agreement and Exhibits hereto, the Organizational
Agreements and the Conveyance Document, the certificates, documents, instruments
and writings that are delivered pursuant hereto, and none of the Parties shall
be bound by or liable for any alleged representation, promise, inducement or
statement of intention not so set forth.

         15.5 ASSIGNMENT. No Party to this Agreement may sell, transfer, assign,
pledge or hypothecate its or his rights, interests or obligations under this
Agreement without the written consent of the other Party except to a transferee
pursuant to Section 8.1(b) or to a transferee of the TEPPCO Assets pursuant to
Section 8.6.

         15.6 SUCCESSORS. This Agreement shall inure to the benefit of, be
binding upon, and be enforceable by the parties hereto and their respective
successors and permitted assigns.

         15.7 AMENDMENTS; WAIVER. This Agreement may be amended, superseded or
canceled, and any of the terms hereof may be waived, only by a written
instrument specifically stating that it amends, supersedes or cancels this
Agreement or waives any of the terms herein, executed by all Parties intended to
be bound thereby or, in the case

                                       37
<PAGE>


of a waiver, by the Party waiving compliance. The failure of any Party at any
time to require performance of any provision herein shall in no manner affect
the right at a later time to enforce the same. No waiver by any Party of any
condition, or of any breach of any term, covenant, representation or warranty,
shall be deemed or constitute a waiver of any other condition, or breach of any
other term, covenant, representation or warranty, nor shall the waiver
constitute a continuing waiver unless otherwise expressly provided.

         15.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

         15.9 SEVERABILITY. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating 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.

         15.10 NO THIRD PARTY BENEFICIARIES. Except for Newco or to the extent
another third Person is expressly given rights herein, any agreement contained,
expressed or implied in this Agreement shall be only for the benefit of the
Parties hereto and their respective legal representatives, successors and
assigns, and such agreements shall not inure to the benefit of the obligees of
any indebtedness of any Party hereto, it being the intention of the Parties
hereto that no Person or entity shall be deemed a third party beneficiary of
this Agreement, except to the extent a third party is expressly given rights
herein.

         15.11 INDEPENDENT CONTRACTOR; NO PARTNERSHIP. In providing the services
called for by this Agreement, each Party and its Affiliates shall be deemed
independent contractors with respect to the other Party and its Affiliates.
Nothing in this Agreement or the transactions contemplated hereby, except as and
when the Partnership Agreement is entered into by the Parties, is intended, nor
should it be construed, to form a partnership, joint venture or other
association.

         15.12 NEGOTIATED TRANSACTION. The provisions of this Agreement were
negotiated by the Parties hereto, and this Agreement shall be deemed to have
been drafted by all of the Parties hereto.

         15.13 BUSINESS DAYS. All references to days contained in this Agreement
shall be to calendar days unless otherwise specified.

               [Remainder of this page left intentionally blank.]


                                       38
<PAGE>


         IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first set forth above.

                                          TE PRODUCTS PIPELINE COMPANY, LIMITED
                                             PARTNERSHIP
                                             By: Texas Eastern Products
                                             Pipeline Company,
                                             its General Partner


                                          By: /s/ DAVID LANGLEY
                                             ----------------------------------
                                          Name: David Langley
                                               --------------------------------
                                          Title: Vice President
                                                -------------------------------

                                          LOUIS DREYFUS PLASTICS CORPORATION



                                          By: /s/ WILLIAM RIPPE
                                             ----------------------------------
                                          Name: William Rippe
                                               --------------------------------
                                          Title: Executive Vice President
                                                -------------------------------


                                       39
<PAGE>
                    EXHIBIT E OF JOINT DEVELOPMENT AGREEMENT


                       LIMITED LIABILITY COMPANY AGREEMENT


                                       OF


                            MONT BELVIEU VENTURE, LLC


                                     BETWEEN


                TE PRODUCTS PIPELINE COMPANY, LIMITED PARTNERSHIP

                                       AND

                       LOUIS DREYFUS ENERGY SERVICES L.P.


                                 AS THE MEMBERS



                          DATED AS OF JANUARY 21, 2003



<PAGE>


                                TABLE OF CONTENTS


<Table>
<S>                                                                                                              <C>
DEFINITIONS.......................................................................................................  1

ARTICLE  I                 FORMATION OF LIMITED LIABILITY COMPANY.................................................  6
        Section 1.1        Formation..............................................................................  6
        Section 1.2        Partnership for Tax Purposes Only......................................................  6

ARTICLE  II                NAME...................................................................................  6

ARTICLE  III               PURPOSE................................................................................  6

ARTICLE  IV                NAMES AND ADDRESSES OF MEMBERS.........................................................  7

ARTICLE  V                 REGISTERED AGENT; REGISTERED OFFICE;
                           PRINCIPAL OFFICE; ADDITIONAL OFFICES...................................................  7

ARTICLE  VI                TERM...................................................................................  7

ARTICLE  VII               ADDITIONAL MEMBERS.....................................................................  7

ARTICLE  VIII              CAPITAL CONTRIBUTIONS..................................................................  8
        Section 8.1        Initial Contributions..................................................................  8
        Section 8.2        Additional Contributions..............................................................  10
        Section 8.3        Capital Accounts......................................................................  10
        Section 8.4        Adjustment of Capital Accounts........................................................  10

ARTICLE  IX                DISTRIBUTIONS.........................................................................  11
        Section 9.1        Amount; Timing........................................................................  11
        Section 9.2        Failure to Withdraw...................................................................  11
        Section 9.3        Transferor/Transferee Allocations.....................................................  11
        Section 9.4        Member Advances.......................................................................  11

ARTICLE  X                 ALLOCATIONS OF INCOME, GAIN, LOSS,
                           DEDUCTION AND CREDIT..................................................................  11
        Section 10.1       General...............................................................................  11
        Section 10.2       Allocations for Tax Purposes..........................................................  12
        Section 10.3       Transferor/Transferee Allocations.....................................................  13
        Section 10.4       Reliance on Advisors..................................................................  13
        Section 10.5       Tax Matters Partner...................................................................  13

ARTICLE  XI                BOOKS OF ACCOUNT, RECORDS AND TAX
                           INFORMATION...........................................................................  13
        Section 11.1       Maintenance of Books and Records......................................................  13
</Table>



                                       -i-

<PAGE>

<Table>
<S>                                                                                                              <C>
        Section 11.2       Reports...............................................................................  14

ARTICLE  XII               FISCAL YEAR...........................................................................  14

ARTICLE  XIII              COMPANY FUNDS.........................................................................  14

ARTICLE  XIV               STATUS OF MEMBERS.....................................................................  14

ARTICLE  XV                MANAGEMENT AND OPERATION OF BUSINESS..................................................  15
        Section 15.1       Member Management.....................................................................  15
        Section 15.2       Management Committee..................................................................  15
        Section 15.3       Compensation and Reimbursement........................................................  17
        Section 15.4       Managing Member.......................................................................  17
        Section 15.5       Marketing Activities..................................................................  19
        Section 15.6       Exculpation...........................................................................  20
        Section 15.7       Indemnification.......................................................................  20
        Section 15.8       Other Activities; Noncompetition......................................................  21

ARTICLE  XVI               TRANSFER OF MEMBERSHIP INTERESTS......................................................  21
        Section 16.1       Restrictions on Transfer..............................................................  21

ARTICLE  XVII              DISSOLUTION OF THE COMPANY............................................................  22

ARTICLE  XVIII             WINDING UP AND TERMINATION OF THE
                           COMPANY...............................................................................  22
        Section 18.1       Liquidator............................................................................  22
        Section 18.2       Reserves..............................................................................  23
        Section 18.3       Sale of Assets; Distribution of Proceeds..............................................  23
        Section 18.4       Final Accounting......................................................................  23
        Section 18.5       Recourse Limited to Company Assets....................................................  23
        Section 18.6       Termination...........................................................................  24

ARTICLE  XIX               NOTICES...............................................................................  24

ARTICLE  XX                AMENDMENTS AND MEETINGS...............................................................  24
        Section 20.1       Amendments............................................................................  24
        Section 20.2       Meetings of the Members...............................................................  24

ARTICLE  XXI               REPRESENTATIONS, WARRANTIES AND
                           COVENANTS.............................................................................  25

ARTICLE  XXII              DISPUTES..............................................................................  25

ARTICLE  XXIII             MISCELLANEOUS.........................................................................  25

        Section 23.1       No Right of Partition.................................................................  25
        Section 23.2       Entire Agreement; Supersedure.........................................................  25
</Table>


                                      -ii-

<PAGE>


<Table>
<S>                                                                                                              <C>

        Section 23.3       Governing Law.........................................................................  26
        Section 23.4       Binding Effect........................................................................  26
        Section 23.5       Construction of Agreement.............................................................  26
        Section 23.6       Captions..............................................................................  26
        Section 23.7       Effect of Invalid Provision...........................................................  26
        Section 23.8       Counterparts..........................................................................  26
        Section 23.9       Waiver................................................................................  26

EXHIBIT A                  MB Assets
</Table>


                                     -iii-
<PAGE>


                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                           MONT BELVIEU VENTURE, LLC


         THIS AGREEMENT is made as of the 21st day of January, 2003, between and
among TE Products Pipeline Company, Limited Partnership, a Delaware limited
partnership, and Louis Dreyfus Energy Services L.P., a Delaware limited
partnership.

         WHEREAS, the parties hereto desire to form a limited liability company
under and pursuant to Delaware law.

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

                                   DEFINITIONS

         The following definitions shall be applicable to the terms set forth
below as used in this Agreement:

         "ACT" means the Delaware Limited Liability Company Act, 6 Del. Code
Section 18-101 et seq., as it may be amended from time to time, and any
successor to said Act.

         "AFFILIATE" means, when used with respect to a specified person, any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with the specified person, provided that the Company
shall not be deemed to be an Affiliate of the Members or the Partnership or any
of their respective subsidiaries or Affiliates. For purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of the person, directly or indirectly,
whether through the ownership of voting securities, by contract, by family
relationship or otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing. Notwithstanding the foregoing, for
purposes of this Agreement, Louis Dreyfus Natural Gas Corporation, an Oklahoma
corporation, shall not be deemed an Affiliate of the LD Member.

         "AGREED VALUE" means, in the case of any contributions or distributions
of property, the fair market value of such property net of any indebtedness or
other liability either assumed or to which such property is subject, as such
fair market value is determined by the Members using such reasonable method of
valuation as they may adopt.

         "ALTERNATE REPRESENTATIVES" has the meaning given such term in Section
15.2(a).

         "APPROVED BUSINESS PLAN" means a Business Plan and any amendments and
revisions thereto that has been approved by the Management Committee pursuant to
Section 15.2(b). In the event the Management Committee fails for any reason to
approve a Business Plan for any fiscal year, the Approved Business Plan for the
immediately preceding fiscal year shall continue in effect


                                      -1-
<PAGE>


but shall be increased by a percentage that is equal to the annualized
percentage change in the most recent GDP Price Deflator over the immediately
preceding GDP Price Deflator until a new Business Plan is approved. In such
event, the Managing Member shall be authorized to adjust the amounts spent on
each budget item so long as the aggregate budget amount is not exceeded. Should
Business Plans not be approved for successive fiscal years, the above-described
adjustment shall be made for each such year.

         "BANKRUPT MEMBER" means any Member (i) that makes a general assignment
for the benefit of creditors; (ii) is declared insolvent in any state insolvency
proceedings; (iii) becomes the subject of an order for relief under Chapter 7 of
the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., or successor
statute (the "BANKRUPTCY CODE"); (iv) becomes a voluntary debtor in a case under
Chapter 11 of the Bankruptcy Code and fails to achieve confirmation of a plan of
reorganization within 180 days; (v) becomes an involuntary debtor in a case
under either Chapter 7 or 11 of the Bankruptcy Code and fails to achieve a
dismissal of the case within 90 days, or, with respect to a Chapter 11 case in
which an order for relief is entered prior to the expiration of 90 days, fails
to achieve confirmation of a plan of reorganization within 180 days of the
commencement of the involuntary case; or (vi) consents to or is subjected to the
appointment of a trustee, receiver or liquidator with respect to all or
substantially all of its properties, and, where such appointment was contested,
there has been a failure to vacate such appointment within 90 days of
appointment.

         "BUILT-IN GAIN" with respect to any Company property means (i) the
excess of the Agreed Value of any Contributed Property over its adjusted basis
for federal income tax purposes as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Company property subject to
depreciation, cost recovery or amortization pursuant to Section 8.4 as a result
of a contribution of cash for a Membership Interest, the Unrealized Gain with
respect to such property.

         "BUILT-IN LOSS" with respect to any Company property means (i) the
excess of its adjusted basis for federal income tax purposes of any Contributed
Property over its Agreed Value as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Company property subject to
depreciation, cost recovery or amortization pursuant to Section 8.4 as a result
of a contribution of cash for a Membership Interest, the Unrealized Loss with
respect to such property.

         "BUSINESS DAY" means any day other than a Saturday, Sunday or bank
holiday in Houston, Texas.

         "BUSINESS PLAN" shall mean the projected operating and capital spending
budgets of the Partnership for each fiscal year (or in the case of the initial
Business Plan the applicable portion thereof) and shall set forth income and
expense projections and planned contributions and financing.

         "CAPITAL ACCOUNT" means the account established for each Member
pursuant to Section 8.3.

         "CAPITAL CONTRIBUTIONS" means the Agreed Value of any property and the
amount of cash contributed by a Member to the Company.

         "CARRYING VALUE" with respect to any Capital Contribution means the
Agreed Value of such property reduced as of the time of determination by all
depreciation, cost recovery and amortization


                                      -2-
<PAGE>

deductions charged to the Capital Accounts with respect to such property and an
appropriate amount to reflect any sales, retirements or other dispositions of
assets included in such property and, with respect to any other Company
property, the adjusted basis of such property for federal income tax purposes as
of the time of determination. The Carrying Values shall be further adjusted as
provided in Section 8.4.

         "CERTIFICATE" means the Certificate of Formation of the Company to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Act, and any and all amendments thereto and restatements thereof.

         "CHANGE OF MEMBER CONTROL" means either a TE Change of Member Control
or a LD Change of Member Control.

         "CODE" means the Internal Revenue Code of 1986, as amended and in
effect on the effective date hereof and, to the extent applicable, as
subsequently amended.

         "COMPANY" means Mont Belvieu Venture, LLC, the limited liability
company heretofore formed and hereby continued hereunder.

         "CONTRIBUTED PROPERTY" means any Capital Contribution of property other
than cash.

         "DEFAULT INTEREST RATE" means a rate per annum equal to the lesser of
(a) __% per annum plus the Prime Rate or (b) the maximum rate permitted by law.

         "DELINQUENT MEMBER" has the meaning given such term in Section 8.1(c).

         "DISCRETIONARY CAPITAL EXPENDITURES" means any expenditure related to
the Partnership's assets that is classified under GAAP as a capital expenditure
and (i) is not a Mandatory Capital Expenditure, or (ii) if classified as a
Mandatory Capital Expenditure, is associated or is in conjunction with, or is
the result of, a prior or current Discretionary Capital Expenditure, in which
case the portion of such Mandatory Capital Expenditure that is allocable to such
prior or current discretionary Capital Expenditure shall be classified as a
Discretionary Capital Expenditure.

         "DISPOSE, DISPOSING OR DISPOSITION" means, with respect to Membership
Interest or any portion thereof, a sale, assignment, transfer, conveyance, gift,
exchange or other disposition of such asset, whether such disposition be
voluntary, involuntary or by operation of law, including but not limited to the
following: (a) in the case of a Membership Interest owned by an entity, a Change
of Member Control and (b) a disposition in connection with, or in lieu of, a
foreclosure of an Encumbrance; but such terms shall not include the creation of
an Encumbrance.

         "DISPUTES" has the meaning assigned to such term in Article XXII.

         "DISTRIBUTABLE CASH" means, at the time of determination, all Company
cash derived from the conduct of the Company's business, other than (i) Capital
Contributions, together with interest earned thereon pending utilization
thereof, (ii) financing proceeds, (iii) amounts required for


                                      -3-
<PAGE>

working capital and (iv) other amounts that the Members reasonably determine to
be necessary for the proper operation of the Company's business and its winding
up and liquidation.

         "EBITDA" means the Partnership's earnings for each fiscal year on a
GAAP basis before all charges for such period, for depreciation and
amortization, interest and income taxes.

         "GAAP" means Generally Accepted Accounting Principles in the United
States of America consistently applied for the time periods involved.

         "INDEMNITEE" has the meaning ascribed thereto in Section 15.7(a).

         "LD MEMBER" means Louis Dreyfus Energy Services L.P., a Delaware
limited partnership, or its successors or assigns.

         "LD MEMBER CHANGE OF CONTROL" means an event that causes S. A. Louis
Dreyfus et Cie., a French societe anonyme, together with its Affiliates to cease
to own, directly or indirectly, at least a 50% voting interest in (i) the LD
Member or any Affiliate of the LD Member owning a partnership interest in the
Partnership or (ii) in the event of the transfer of the LD Member's Membership
Interest to an Affiliate, in such Affiliate.

         "LENDING MEMBER" has the meaning given such term in Section 8.1(c).

         "LIQUIDATOR" has the meaning ascribed thereto in Section 18.1.

         "MANAGEMENT COMMITTEE" has the meaning given such term in Section 15.2.

         "MANAGING MEMBER" has the meaning given such term in Section 15.4.

         "MANDATORY CAPITAL EXPENDITURES" means all expenditures related to the
Partnership's assets that are classified under GAAP as a capital expenditure,
the primary function of which is for regulatory compliance, safety or
operational integrity of the Partnership's assets or is otherwise the result of
actions permitted in emergency situations as provided in the Operating
Procedures.

         "MB ASSETS" means the Mont Belvieu salt cavern storage and Houston area
shuttle system more fully described on Exhibit A hereto and all improvements,
expansions and additions thereto.

         "MEMBERS" means TE Products Pipeline Company, Limited Partnership, a
Delaware limited partnership and Louis Dreyfus Energy Services L.P., a Delaware
limited partnership, or their respective successors or permitted assigns and
"MEMBER" means any one of them.

         "MEMBERSHIP INTEREST" as to any Member means the entire ownership
interest and rights of that Member in the Company, including, without
limitation, its right to a distributive share of the profits and losses of the
Company, its right to a distributive share of the assets of the Company in
accordance with the provisions hereof, and its right to participate in the
management of the affairs of the Company.


                                      -4-
<PAGE>


         "OPERATING PROCEDURES" means the Operating Procedures in the form
attached as Exhibit C to the Partnership Agreement.

         "PARENT" means, with respect to TE Member, TEPPCO Partners, L.P., a
Delaware limited partnership, and with respect to LD Member, S. A. Dreyfus et
Cie., a French societe anonyme.

         "PARTNERSHIP" means Mont Belvieu Storage Partners, L.P., a Delaware
limited partnership in which the Company is the general partner.

         "PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of
the Partnership as the same may be amended, modified or restated from time to
time.

         "PARTNERSHIP BUSINESS" means the operation, maintenance and marketing
of underground storage facilities for Products and the operation of the
pipelines included within the MB Assets to and from their specific points of
delivery and receipt.

         "PRIME RATE" has the meaning ascribed thereto in Section 9.4.

         "PRODUCTS" means propane, normal butane, isobutane, natural gasoline
and other commodities as agreed by the Management Committee.

         "REPRESENTATIVE" has the meaning given such term in Section 15.2(a).

         "RESTRICTED AFFILIATE" means with respect to each Member, any person in
which such person's Parent owns, directly or indirectly, at least a 51% voting
or equity interest, or which it otherwise controls. For purposes of this
definition, "control," has the meaning assigned to such term in the definition
of Affiliate and Louis Dreyfus Natural Gas Corporation shall not be deemed a
Restricted Affiliate of the LD Member.

         "SHARING RATIO" means the percentages described in Section 8.1.

         "TE MEMBER" means TE Products Pipeline Company, Limited Partnership or
its successors or assigns.

         "TE MEMBER CHANGE OF CONTROL" means a Disposition of any entity of
which over 75% of such entity's EBITDA for the preceding 12-month period is
derived from the Membership Interest unless such disposition is to an Affiliate
of the TE Member.

         "TMP" has the meaning ascribed thereto in Section 10.5.

         "UNREALIZED GAIN" attributable to a Company property means, as of the
date of determination, the excess of the fair market value of such property as
of such date of determination over the Carrying Value of such property as of
such date of determination.



                                      -5-
<PAGE>

         "UNREALIZED LOSS" attributable to a Company property means, as of the
date of such determination, the excess of the Carrying Value of such property as
of such date of determination over the fair market value of such property as of
such date of determination.

                                    ARTICLE I

                     FORMATION OF LIMITED LIABILITY COMPANY

SECTION 1.1 FORMATION. The Members hereby form a limited liability company
pursuant to the Act. The rights and liabilities of the Members shall be as
provided in the Act, except as herein otherwise expressly provided. The
Membership Interests of any Member shall be personal property for all purposes.
Each Member shall execute, acknowledge, swear to, and deliver all certificates
and other instruments conforming with this Agreement that are necessary to
qualify, continue, or terminate the Company as a limited liability company under
the laws of the State of Delaware and to qualify the Company to do business in
such other states or other jurisdictions where such qualification is necessary
or desirable.

SECTION 1.2 PARTNERSHIP FOR TAX PURPOSES ONLY. The Members intend that the
Company not be a partnership (including a limited partnership) or joint venture,
and that no Member be a partner or joint venturer of any other Member, for any
purposes other than U.S. federal and state tax purposes, and this Agreement may
not be construed to suggest otherwise.

                                   ARTICLE II

                                      NAME

         The name of the Company shall be, and the business of the Company shall
be conducted under the name of, Mont Belvieu Venture, LLC, or such other name or
names that comply with applicable law as the Members may designate from time to
time. The Managing Member shall take any action that it determines is required
to comply with the Act, assumed name act, fictitious name act, or similar
statute in effect in each jurisdiction or political subdivision in which the
Company proposes to do business.

                                   ARTICLE III

                                     PURPOSE

         The purpose of the Company is to serve as the general partner of the
Partnership and to engage in any and all activities necessary, incidental or
ancillary to the foregoing.


                                      -6-
<PAGE>

                                   ARTICLE IV

                         NAMES AND ADDRESSES OF MEMBERS

         The names and mailing addresses of the Members are as set forth on the
signature pages hereof.

                                    ARTICLE V

                      REGISTERED AGENT; REGISTERED OFFICE;
                      PRINCIPAL OFFICE; ADDITIONAL OFFICES

         The name and address of the registered office of the Company in the
State of Delaware is c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The
principal office of the Company shall be 2929 Allen Parkway, Suite 3200,
Houston, Texas 77019. The name and address of the registered agent for service
of process on the Company in the State of Delaware is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The Members may change the registered agent or the
registered office of the Company and may establish such additional offices of
the Company as they may, from time to time determine.

                                   ARTICLE VI

                                      TERM

         The term of the Company shall be perpetual from the date of the filing
of the Certificate in the Office of the Secretary of State of the State of
Delaware unless extended or sooner liquidated or dissolved in accordance with
this Agreement.

                                   ARTICLE VII

                               ADDITIONAL MEMBERS

         In the event the Management Committee determines that funds in addition
to those acquired pursuant to Section 8.1 are necessary to carry out the
purposes of the Company and the Members do not agree to contribute such funds in
their respective Sharing Ratios, the Management Committee is authorized to offer
and sell additional Membership Interests and admit any purchasers thereof (which
may include existing Members or their Affiliates) as additional Members of the
Company. In such event, the dilution of the then Members shall be pro rata in
accordance with their respective Sharing Ratios prior to the issuance of such
additional Membership Interests and this Agreement shall be amended to reflect
the admissions of such persons as Members of the Company, the revised ownership
and Sharing Ratio of each Member and otherwise to reflect the relative rights
and obligations of the parties.


                                      -7-
<PAGE>


                                  ARTICLE VIII

                              CAPITAL CONTRIBUTIONS

SECTION 8.1 INITIAL CONTRIBUTIONS.

                  (a) The Members shall contribute the amounts of cash set forth
         below.

<Table>
<Caption>
                                 Capital       Sharing
         Member               Contribution      Ratio
         -------              ------------     -------
<S>                           <C>              <C>
         TE Member              $250,000          50%

         LD Member              $250,000          50%
                                --------         ---

         Total                  $500,000         100%
                                ========         ===
</Table>

                  (b) Without creating any rights in favor of any third party,
         each Member shall contribute to the Company, in cash, on or before the
         date specified as described in this Section 8.1(b), that Member's pro
         rata share of all monies that in the judgment of the Management
         Committee are necessary to enable the Company to cause the assets of
         the Company to be properly operated and maintained and to discharge its
         costs, expenses, obligations, and liabilities (including any capital
         expenditures for new assets, businesses or opportunities); provided,
         however, that subject to the nonwaivable requirements of law, a Member
         is not obligated to contribute a total amount during any fiscal year
         that exceeds its pro rata share of the contributions contemplated in
         the Approved Business Plan in effect for such year. The Managing Member
         shall notify each Member of the need for Capital Contributions pursuant
         to this Section 8.1(b), which notice must include a date (which date
         may be no earlier than the second Business Day following each Member's
         receipt of its notice) before which the Capital Contributions must be
         made. Notices for Capital Contributions must be made to all Members in
         accordance with their Sharing Ratios.

                  (c) If a Member does not contribute by the time required all
         or any portion of a Capital Contribution that Member is required to
         make as provided in this Agreement, the Company may exercise, on notice
         to that Member (the "DELINQUENT MEMBER"), one or more of the following
         remedies:

                           (i) taking such action (including court proceedings)
                  as the Management Committee may deem appropriate to obtain
                  payment by the Delinquent Member of the portion of the
                  Delinquent Member's Capital Contribution that is in default,
                  together with interest on that amount at the Default Interest
                  Rate from the date that the Capital Contribution was due until
                  the date that it is made, all at the cost and expense of the
                  Delinquent Member;



                                      -8-
<PAGE>

                           (ii) permitting the other Member (the "LENDING
                  MEMBER") to advance the portion of the Delinquent Member's
                  Capital Contribution that is in default, with the following
                  results:

                                    1. the sum advanced shall constitute a loan
                           from the Lending Member to the Delinquent Member and
                           a Capital Contribution of that sum to the Company by
                           the Delinquent Member under the applicable provisions
                           of this Agreement,

                                    2. the principal balance of the loan and all
                           accrued unpaid interest is due and payable on the
                           tenth day after written demand by the Lending Member
                           to the Delinquent Member,

                                    3. the amount loaned shall bear interest at
                           the Default Interest Rate from the date that the
                           advance is deemed made until the date that the loan,
                           together with all interest accrued on it, is repaid
                           to the Lending Member,

                                    4. all distributions from the Company that
                           otherwise would be made to the Delinquent Member
                           (whether before or after dissolution of the Company)
                           instead shall be paid to the Lending Member until the
                           loan and all interest accrued on it have been paid in
                           full to the Lending Member (with payments being
                           applied first to accrued and unpaid interest and then
                           to principal), but all such payments to the Lending
                           Member shall be treated for all purposes of this
                           Agreement as a distribution by the Company to the
                           Delinquent Member and a payment by the Delinquent
                           Member to the Lending Member,

                                    5. the payment of the loan and interest
                           accrued on it is secured by a security interest in
                           the Delinquent Member's Membership Interest, as more
                           fully set forth in Section 8.1(d), and

                                    6. the Lending Member has the right, in
                           addition to the other rights and remedies granted to
                           it under this Agreement or at law or in equity, to
                           take any action (including court proceedings) that
                           the Lending Member may deem appropriate to obtain
                           payment by the Delinquent Member of the loan and all
                           accrued and unpaid interest on it, at the cost and
                           expense of the Delinquent Member;

                           (iii) exercising the rights of a secured party under
                  the Uniform Commercial Code of the State of Delaware, as more
                  fully set forth in Section 8.1(d); or

                                    (iv) exercising any other rights and
                  remedies available at law or in equity.


                                      -9-
<PAGE>

                  (d) Each Member grants to the Company, and to each Lending
         Member with respect to any loans made by the Lending Member to that
         Member as a Delinquent Member as described in Section 8.1(c), as
         security, equally and ratably, for the payment of all Capital
         Contributions that Member has agreed to make and the payment of all
         loans and interest accrued on them made by Lending Members to that
         Member as a Delinquent Member as described in Section 8.1(c), a
         security interest in and a general lien on its Membership Interest and
         the proceeds of that Membership Interest, all under the Uniform
         Commercial Code of the State of Delaware. On any default in the payment
         of a Capital Contribution or in the payment of such a loan or interest
         accrued on it, the Company or the Lending Member, as applicable, is
         entitled to all the rights and remedies of a secured party under the
         Uniform Commercial Code of the State of Delaware with respect to the
         security interest granted in this Section 8.1(d). Each Member shall
         execute and deliver to the Company and the other Member all financing
         statements and other instruments that the Management Committee or the
         Lending Member, as applicable, may request to effectuate and carry out
         the preceding provisions of this Section 8.1(d). At the option of a
         Lending Member, this Agreement or a photographic or other copy of this
         Agreement may serve as a financing statement.

SECTION 8.2 ADDITIONAL CONTRIBUTIONS. The liability of each Member to the
Company shall be limited to the amount of its Capital Contribution made and to
be made pursuant to Section 8.1, and no Member shall have any further personal
liability to contribute money to, or in respect of, the liabilities or the
obligations of the Company unless it agrees in writing to make additional
Capital Contributions to the Company, nor shall any Member be personally liable
for any obligations of the Company, except as may be provided in the Act. No
Member shall be entitled to the return of any part of its Capital Contribution
or to be paid interest in respect of either its Capital Account or any Capital
Contribution made by such Member. No unrepaid Capital Contribution shall be
deemed or considered to be a liability of the Company or any Member. No Member
shall be required to contribute or lend any cash or property to the Company to
enable the Company to return any Member's Capital Contribution to the Member.

SECTION 8.3 CAPITAL ACCOUNTS. A capital account ("CAPITAL ACCOUNT") shall be
established for each Member and shall be maintained in such a manner as to
correspond with the requirements of Treasury Regulations promulgated from time
to time under section 704(b) of the Code. The respective Capital Accounts of the
Members shall not bear interest.

SECTION 8.4 ADJUSTMENT OF CAPITAL ACCOUNTS. If any Company property is to be
distributed in liquidation of the Company or a Membership Interest, the Capital
Accounts of the Members (and the amounts at which all Company properties are
carried on its books and records) shall, immediately prior to such issuance or
distribution, as the case may be, be adjusted (consistent with the provisions of
section 704(b) of the Code and the Treasury Regulations promulgated thereunder)
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to all Company properties (as if such Unrealized Gain or Unrealized
Loss had been recognized upon actual sale of such properties upon a liquidation
of the Company immediately prior to such issuance). If the Carrying Value of any
property of the Company is properly reflected on the books of the Company at a
value that differs from the adjusted tax basis of such property, this Section
8.4 shall be applied with reference to such value.



                                      -10-
<PAGE>

                                   ARTICLE IX

                                  DISTRIBUTIONS

SECTION 9.1 AMOUNT; TIMING. Except as otherwise provided herein or by the Act,
Distributable Cash shall be distributed among the Members pro rata in accordance
with their Sharing Ratios in such aggregate amounts and at such times as shall
be determined by the Management Committee.

SECTION 9.2 FAILURE TO WITHDRAW. If any Member does not withdraw the whole or
any part of its share of any cash distribution made pursuant to Section 9.1,
such Member shall not be entitled to receive any interest thereon without the
express written consent of the other Member.

SECTION 9.3 TRANSFEROR/TRANSFEREE ALLOCATIONS. Unless otherwise agreed in
writing by a transferor and transferee of a Membership Interest herein,
Distributable Cash distributable with respect to any Membership Interest which
may have been transferred during any year shall be distributed to the holder of
such Membership Interest who was recognized as the owner on the date of such
distribution, without regard to the results of Company operations during the
year.

SECTION 9.4 MEMBER ADVANCES. Notwithstanding the foregoing, if any Member
advances any funds or makes any other payment to or on behalf of the Company,
not required pursuant to the provisions hereof, to cover operating or capital
expenses of the Company which cannot be paid out of the Company's operating
revenues, such advance or payment shall be deemed a loan to the Company by such
Member, bearing interest from the date such advance or payment was made until
such loan is repaid at a floating rate per annum equal to the lesser of (i) two
percent (2%) over the interest rate publicly quoted by The Wall Street Journal
from time to time as the prime rate, with adjustments in such varying rate to be
made on the same date as any change in the aforesaid rate (herein called "PRIME
RATE") or (ii) the maximum rate permitted under applicable law. Notwithstanding
Section 9.1 above, all distributions of Distributable Cash shall first be
distributed to the Members making such loans until all such loans have been
repaid to such Members, together with interest thereon as above provided, and,
thereafter, the balance of such distributions, if any, shall be made in
accordance with the terms of Section 9.1 above. If distributions are
insufficient to repay and return all such loans as provided above, the funds
available from time to time shall first be applied to repay and retire the
oldest loan first and, if any funds thereafter remain available, such funds
shall be applied in a similar manner to remaining loans in accordance with the
order of the dates on which they were made; however, as to loans made on the
same date, each such loan shall be repaid pro rata in the proportion that such
loan bears to the total loans made on said date.

                                    ARTICLE X

                          ALLOCATIONS OF INCOME, GAIN,
                           LOSS, DEDUCTION AND CREDIT

SECTION 10.1 GENERAL. Except as otherwise provided herein or unless another
allocation is required by Treasury Regulations issued under section 704(b) of
the Code (including, but not limited to, provisions pertaining to qualified
income offsets and minimum gain chargebacks) for


                                      -11-
<PAGE>


purposes of maintaining the Capital Accounts, all items of Company income, gain,
loss, deduction and credit shall be allocated among the Members pro rata in
accordance with their Sharing Ratios in effect for the period during which such
items accrue. For purposes of computing the amount of each item of income, gain,
deduction or loss to be charged or credited to the Capital Accounts, the
determination, recognition and classification of such item shall be the same as
its determination, recognition and classification for federal income tax
purposes, provided that:

                  (a) Any deductions for depreciation, cost recovery, or
         amortization attributable to any Company property shall be determined
         as if the adjusted basis of such property were equal to the Carrying
         Value of such property. Upon an adjustment to the Carrying Value of any
         Company property subject to depreciation, cost recovery, or
         amortization pursuant to Section 8.4, any further deductions for such
         depreciation, cost recovery, or amortization attributable to such
         property shall be determined as if the adjusted basis of such property
         were equal to the Carrying Value of such property immediately following
         such adjustment.

                  (b) Any income, gain or loss attributable to the taxable
         disposition of any Company property shall be determined by the Company
         as if the adjusted basis of such property as of such date of
         disposition were equal in amount to the Carrying Value of such property
         as of such date.

                  (c) All fees and other expenses incurred by the Company to
         promote the sale of a Membership Interest that can neither be deducted
         nor amortized under section 709 of the Code shall be treated as an item
         of deduction.

                  (d) Computation of all items of income, gain, loss and
         deduction shall be made without regard to any election under section
         754 of the Code which may be made by the Company and, as to those items
         described in section 705(a)(1)(B) or section 705(a)(2)(B) of the Code,
         without regard to the fact that such items are not includable in gross
         income or are neither currently deductible nor capitalizable for
         federal income tax purposes.

SECTION 10.2 ALLOCATIONS FOR TAX PURPOSES.

                  (a) The Company shall, except to the extent such item is
         subject to allocation pursuant to subsection (b) below, allocate each
         item of income, gain, loss, deduction and credit, as determined for
         federal and other income tax purposes, in the same manner as such item
         was allocated for book purposes; and

                  (b) The Company, for federal and other income tax purposes
         shall, in the case of Contributed Properties, allocate items of income,
         gain, loss, depreciation and cost recovery deductions attributable to
         those properties with a Built-In Gain or a Built-In Loss pursuant to
         section 704(c) of the Code. Similar allocations shall be made in the
         event that the Carrying Value of Company properties subject to
         depreciation, cost recovery or amortization are adjusted pursuant to
         Section 8.4 upon the issuance of Membership Interests for cash. If an
         existing Member acquires additional Membership Interests, such
         allocations shall apply only to the extent of his or its additional
         Membership Interests. No allocation under section 704(c) of the Code
         shall be charged or credited to a Member's Capital Account.


                                      -12-
<PAGE>

SECTION 10.3 TRANSFEROR/TRANSFEREE ALLOCATIONS. Income, gain, loss, deduction or
credit attributable to any Membership Interest which has been transferred shall
be allocated between the transferor and the transferee allocated equally among
the days of the Company's fiscal year without regard to Company operations
during such days.

SECTION 10.4 RELIANCE ON ADVISORS. The Managing Member may rely upon, and shall
have no liability to the Members or the Company if it does rely upon, the
written opinion of tax counsel or accountants retained by the Company from time
to time with respect to all matters (including disputes with respect thereto)
relating to computations and determinations required to be made under this
Article X or other provisions of this Agreement.

SECTION 10.5 TAX MATTERS PARTNER.

                  (a) The Managing Member is designated tax matters partner
         ("TMP") as defined in section 6231(a)(7) of the Code. The TMP and the
         other Member shall use their best efforts to comply with
         responsibilities outlined in this Section 10.5 and in sections 6222
         through 6232 of the Code (including any Treasury Regulations
         promulgated thereunder) and in doing so shall incur no liability to any
         other Member.

                  (b) If any Member intends to file a notice of inconsistent
         treatment under section 6222(b) of the Code, such Member shall, prior
         to the filing of such notice, notify the TMP of such intent and the
         manner in which the Member's intended treatment of a Company item is
         (or may be) inconsistent with the treatment of that item by the
         Company.

                  (c) No Member other than the TMP shall file a request pursuant
         to section 6227 of the Code for an administrative adjustment of
         partnership items for any Company taxable year.

                  (d) No Member other than the TMP shall file a petition under
         Code sections 6226, 6228 or other Code sections with respect to any
         Company item, or other tax matters involving the Company. In the case
         where the TMP files such petition, he shall determine the forum in
         which such petition will be filed.

                                   ARTICLE XI

                  BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION

SECTION 11.1 MAINTENANCE OF BOOKS AND RECORDS. Proper and complete records and
books of account (including those required by the Act) shall be kept by the
Company in which shall be entered all transactions and other matters relative to
the Company's business as are usually entered into records and books of account
maintained by persons engaged in businesses of like character. The Company books
and records necessary for purposes of maintaining the Capital Accounts and
giving effect to the allocations provided in Articles VIII and X shall be
maintained in accordance with the accounting principles described therein, and
shall be kept on the accrual basis and the other books and records shall be kept
on the accrual basis in accordance with GAAP for


                                      -13-
<PAGE>


financial reporting purposes and for purposes of making all other calculations
contemplated herein. The books and records shall at all times be made available
and shall be open to the reasonable inspection and examination of the Members or
their duly authorized representatives during the business hours of the Company
for any purpose reasonably related to the interest of such Member as a member of
the Company.

SECTION 11.2 REPORTS.

                  (a) As soon as reasonably practicable after the end of each
         fiscal year, the Company shall send each person who was a holder of a
         Membership Interest at any time during the fiscal year then ended all
         Company tax information as shall be necessary for the preparation by
         such holder of its federal and any applicable state and local income
         tax returns.

                                   ARTICLE XII

                                   FISCAL YEAR

         The fiscal year of the Company shall end on the thirty-first (31st) day
of December in each year.

                                  ARTICLE XIII

                                  COMPANY FUNDS

         The funds of the Company shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest-bearing accounts,
as shall be designated by the Managing Member. All withdrawals from any such
bank accounts shall be made by Company employees or agents duly authorized by
the Managing Member.

                                   ARTICLE XIV

                                STATUS OF MEMBERS

         No Member shall have any personal liability whatever, whether to the
Company, to any of the Members or to the creditors of the Company, for the debts
of the Company or any of its losses beyond the amount agreed to be contributed
by it to the capital of the Company as set forth in Section 8.1 except to the
extent required by the Act. No Member shall be obligated to restore any deficit
in its Capital Account upon the liquidation of the Company or its Membership
Interest.


                                      -14-
<PAGE>

                                   ARTICLE XV

                      MANAGEMENT AND OPERATION OF BUSINESS

SECTION 15.1 MEMBER MANAGEMENT. Except as otherwise provided herein, the
management of the Company is fully vested in the Members, acting exclusively in
their membership capacities. To facilitate the orderly and efficient management
of the Company, the Members shall act (i) collectively as a "committee of the
whole" (named the Management Committee) pursuant to Section 15.2, and (ii)
through the delegation of certain responsibility and authority to the Managing
Member pursuant to Section 15.4 and the LD Member pursuant to Section 15.5. The
Company will not have "managers," as that term is used in the Act, it being
understood that the Representatives and Alternate Representatives do not
constitute "managers."

SECTION 15.2 MANAGEMENT COMMITTEE. The Members shall act collectively through
meetings as a "committee of the whole," which is hereby named the "MANAGEMENT
COMMITTEE." Decisions or actions taken by the Management Committee in accordance
with the provisions of this Agreement shall constitute decisions or actions by
the Company and shall be binding on each Member of the Company. The Management
Committee shall conduct its affairs in accordance with the following provisions
and the other provisions of this Agreement:

                  (a) Organization of Management Committee:

                           (i) The Management Committee shall be composed of
                  five members.

                           (ii) Each Member shall appoint two individuals to
                  represent it on the Management Committee (individually, such
                  Member's "REPRESENTATIVE" and collectively, such Member's
                  "REPRESENTATIVES"). No individual may serve as the
                  Representative of more than one Member. Each Member shall also
                  appoint one or more individuals ("ALTERNATE REPRESENTATIVES")
                  with the power of substitution and authority to act in place
                  of its Representatives in case of the unavailability thereof.
                  Each Representative and Alternate Representative shall be an
                  officer or agent of the Member appointing him or her and shall
                  be duly authorized to act on behalf of and to bind the
                  appointing Member. Each Member reserves the right to remove
                  any one or more of its Representatives or Alternate
                  Representatives, as the case may be, and to appoint successors
                  and substitutes therefor, from time to time, and any such
                  change shall be effective upon such Member's delivering a
                  written notice of such change to the other Member.

                           (iii) The individual serving as the president/chief
                  executive officer of the Company shall be the fifth member of
                  the Management Committee; however, that individual shall be a
                  nonvoting member.

                           (iv) Notwithstanding the number of Representatives
                  and Alternate Representatives, each Member shall have one vote
                  on all matters to be decided by the Management Committee and
                  the Representatives or Alternate Representatives


                                      -15-
<PAGE>


                  of any Member shall vote as a single bloc on all such matters.
                  Voting may occur by voice vote at a meeting of the committee
                  or by written consent.

                           (v) Any action of the Management Committee shall
                  require the affirmative vote of both Members. Notwithstanding
                  the above, if any Member is a Delinquent Member as described
                  in Section 8.1(c) (or it or its Affiliate is a Delinquent
                  Partner in the Partnership), its Representatives and Alternate
                  Representative(s) may not participate in the Management
                  Committee and all decisions shall be made by the
                  Representatives or Alternate Representative(s) of the other
                  Member.

                  (b) Matters Requiring Management Committee Consent:
         Notwithstanding any other provision of this Agreement, the following
         actions require the unanimous consent of the Management Committee:

                           (i) the annual Business Plan and any amendments to
                  the Approved Business Plan;

                           (ii) the incurrence of, or commitment to incur, any
                  capital cost for any Partnership project that exceeds $250,000
                  (to the extent not covered by the Approved Business Plan) or
                  that would cause the Partnership to exceed its annual capital
                  budget as reflected on the Approved Business Plan;

                           (iii) the sale or divestiture of any asset of the
                  Partnership having a fair market value in excess of $250,000,
                  to the extent not covered in the Approved Business Plan;

                           (iv) borrowings or issuances of debt securities
                  (excluding trade credits and advances under working capital
                  funding facilities) of the Company or the Partnership, to the
                  extent these matters are not covered in the Approved Business
                  Plan;

                           (v) issuances of any new interests in the Company or
                  the Partnership;

                           (vi) entering into or amending contracts between the
                  Company or the Partnership and any Member or its Affiliates;
                  and

                           (vii) the filing or settlement of any lawsuit by the
                  Company or the Partnership involving a claim or settlement
                  payment of more than $500,000.

                  (c) Meetings of the Management Committee:

                           (i) Regular meetings of the Management Committee
                  shall be held periodically, but no less frequently than
                  quarterly, on such dates, at such times and at such locations
                  as the members of such committee shall from time to time
                  determine, taking into account the convenience of all parties.
                  The individual then


                                      -16-
<PAGE>


                  serving as the president/chief executive officer of the
                  Company or any Representative or Alternate Representative may
                  call a special meeting of the Management Committee. Notice of
                  any special meeting shall include a statement of the matters
                  proposed to be considered at such meeting and shall be given
                  to all participants by the Person calling the meeting, under
                  normal circumstances at least ten Business Days prior to the
                  meeting, although shorter notice of a meeting (but not less
                  than 24 hours) may be given if the circumstances of urgency so
                  require. All notices of Management Committee meetings shall be
                  given either in writing, or by telephone if immediately
                  followed by written confirmation, and no Management Committee
                  meeting shall be held unless the president/chief executive
                  officer of the Company and a Representative or Alternate
                  Representative of each Member participates in such meeting.
                  Each Member agrees to use reasonable efforts to cause at least
                  one of its Representatives or an Alternate Representative to
                  participate, in the manner provided for herein, in all
                  Management Committee meetings.

                           (ii) Representatives and Alternate Representatives
                  may participate in any Management Committee meeting by means
                  of telephone conference call or similar communications
                  equipment so long as all Persons participating in the meeting
                  can hear each other simultaneously. If required, the
                  Management Committee may act without a meeting by written
                  consent.

                           (iii) The individual serving as the president/chief
                  executive officer of the Company shall preside at all
                  Management Committee meetings.

SECTION 15.3 COMPENSATION AND REIMBURSEMENT. The Management Committee is not
entitled to compensation for its services. Each Representative and Alternate
Representative shall be reimbursed by their respective Member for out-of-pocket
costs and expenses incurred in serving on the Management Committee.

SECTION 15.4 MANAGING MEMBER. The Members hereby delegate the authority
described in Section 15.4(b) to the Member that is designated as the "MANAGING
MEMBER" in accordance with this Section 15.4. Decisions or actions taken by the
Managing Member in accordance with the provisions of this Agreement and the
Operating Procedures shall constitute decisions or actions by the Company and
shall be binding on each Member. The Managing Member shall be designated, and
shall exercise such delegated authority, in accordance with the following
provisions and the other provisions of this Agreement:

                  (a) Designation and Removal. The initial Managing Member is
         the TE Member. It, and any successor Managing Member that is designated
         in accordance with this Section 15.4(a), shall cease to be the Managing
         Member upon the earlier to occur of the following events: (i) it shall
         Dispose of all of its Membership Interest or (ii) it shall become a
         Bankrupt Member. Upon the occurrence of either of the events described
         in the immediately-preceding sentence, the Management Committee
         (excluding, in the case where the Managing Member is a Bankrupt Member,
         the votes of the Representatives appointed by that Managing Member)
         shall designate another Member (that consents to serve as such) as a
         successor Managing Member.


                                      -17-
<PAGE>


                  (b) Delegation of Authority. Except for situations in which
         the approval of the Management Committee is expressly required by this
         Agreement, the Partnership Agreement, or the Operating Procedures, the
         Managing Member shall have full, complete, and exclusive authority to
         manage and control the business, affairs, and properties of the Company
         and the Partnership, to make all decisions regarding those matters, and
         to perform any and all other acts or activities customary or incident
         to the management of the Company's business, including the following:

                           (i) entering into, making, and performing contracts,
                  agreements, and other undertakings binding the Company and the
                  Partnership that may be necessary, appropriate, or advisable
                  in furtherance of the purposes of the Company and the
                  Partnership and making all decisions and waivers under the
                  foregoing;

                           (ii) opening and maintaining bank accounts and
                  arrangements for the Company and the Partnership, drawing
                  checks and other orders for the payment of money, and
                  designating individuals with authority to sign or give
                  instructions with respect to those accounts and arrangements;

                           (iii) maintaining the assets of the Company and the
                  Partnership in good order;

                           (iv) collecting sums due the Company and the
                  Partnership;

                           (v) to the extent that funds of the Company and the
                  Partnership are available, paying debts and obligations of the
                  Company and the Partnership;

                           (vi) acquiring, utilizing for Company and Partnership
                  purposes, and disposing of any asset of the Company and
                  Partnership;

                           (vii) borrowing money or otherwise committing the
                  credit of the Company and the Partnership for Company and
                  Partnership activities and voluntarily prepaying or extending
                  debt;

                           (viii) selecting, removing, and changing the
                  authority and responsibility of lawyers, accountants, and
                  other advisers and consultants; and

                           (ix) obtaining insurance for the Company and the
                  Partnership.

                  (c) To expedite the handling of Company business, it is
         understood and agreed that any document executed by the Managing Member
         shall, as to any third parties, be deemed to be the action of the
         Company. Further, any person dealing with the Company or the
         Partnership may rely upon a certificate signed by the Managing Member
         as to:

                           (i) the identity of the Members, their
                  Representatives and Alternate Representatives;


                                      -18-
<PAGE>


                           (ii) the existence or nonexistence of any fact or
                  facts that constitute conditions precedent to acts by the
                  Company or the Partnership or are in any other manner related
                  to the affairs of the Company or the Partnership;

                           (iii) the persons who are authorized to execute and
                  deliver any instrument or document of the Company or the
                  Partnership;

                           (iv) any act or failure to act by the Company or the
                  Management Committee; or

                           (v) any other matter whatsoever involving the Company
                  or the Partnership.

SECTION 15.5 MARKETING ACTIVITIES.

                  (a) The LD Member shall have the right (i) to carry out the
         marketing of the Partnership Business and manage the personnel involved
         in those marketing activities, and (ii) to make proposals to the
         Managing Member for Discretionary Capital Expenditures and the
         development and use of the Partnership's assets, in each case with the
         purpose of increasing the EBITDA of the Partnership Business. The LD
         Member will use commercially reasonable efforts in carrying out such
         activities. The LD Member's activities shall include soliciting new
         users of the Partnership's assets or increased use by existing
         customers and investigating and proposing capital projects for the
         Partnership Business. At least 120 days prior to the beginning of each
         Fiscal Year, the LD Member will provide the Managing Member with a
         forecast of revenue for such Fiscal Year. On or before January 15,
         April 15, July 15 and October 15 of each Fiscal Year, the LD Member
         will provide a report to the Managing Member on the LD Member's
         activities for the three month period ending on the last day of the
         immediately preceding month including, among other things, the status
         of contracts entered into during such period, potential contracts being
         explored, performance for that period and revisions, if any, to the
         revenue forecast for the Fiscal Year in which such three-month period
         falls. The Managing Member will keep the LD Member advised of any
         storage contracts or renewals thereof entered into by The Managing
         Member and will seek the LD Member's advice with respect thereto. The
         LD Member will commit the equivalent of at least one full-time person
         to the marketing activities to be carried out under this Section 15.5,
         and the Managing Member will commit the equivalent of at least one
         part-time person to aid the LD Member in those marketing activities
         under the LD Member's direction. The cost of the compensation and
         benefits of all such employees shall not be included in the expenses of
         the Partnership but shall be borne by the LD Member or the Managing
         Member respectively as the employer of that person. The Managing Member
         and the LD Member will agree on whether the cost of the compensation
         and benefits of any additional employees of either party who may be
         engaged in the marketing activities shall be included in the expenses
         of the Partnership.

                  (b) The Members understand and agree all storage, service and
         other agreements relating to the Partnership's assets and the
         Partnership's Business shall be subject to the


                                      -19-
<PAGE>


         approval of, and signed by the Managing Member or one of its
         Affiliates. Neither Member shall have the authority, nor shall it
         attempt, to bind the other Member in any regard. The LD Member will
         keep the Managing Member informed of its marketing activities and
         provide to the Managing Member such information as it may reasonably
         request with respect to customers and potential customers of the
         Partnership. The Managing Member will provide all reasonable assistance
         in the LD Member's marketing and sales efforts and shall make available
         appropriate authorized representatives to execute any storage
         agreements developed by the LD Member. All such contracts shall become
         the property of the Partnership.

SECTION 15.6 EXCULPATION. NEITHER THE MANAGING MEMBER, THE MANAGEMENT COMMITTEE,
THE OTHER MEMBER, THEIR RESPECTIVE AFFILIATES, NOR ANY OWNER, OFFICER, DIRECTOR,
PARTNER, EMPLOYEE OR AGENT OF THE MEMBERS OR THEIR RESPECTIVE AFFILIATES, SHALL
BE LIABLE, RESPONSIBLE OR ACCOUNTABLE IN DAMAGES OR OTHERWISE TO THE COMPANY OR
ANY MEMBER FOR ANY ACTION TAKEN OR FAILURE TO ACT (EVEN IF SUCH ACTION OR
FAILURE TO ACT CONSTITUTED THE NEGLIGENCE OF SUCH PERSON) ON BEHALF OF THE
COMPANY OR THE PARTNERSHIP WITHIN THE SCOPE OF THE AUTHORITY CONFERRED ON SUCH
PERSON PURSUANT TO THIS AGREEMENT OR THE PARTNERSHIP AGREEMENT UNLESS SUCH ACT
OR OMISSION WAS PERFORMED OR OMITTED FRAUDULENTLY OR CONSTITUTED GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. TO THE EXTENT THAT, AT LAW OR IN EQUITY, THE
MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY OWNER,
OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF HAVE DUTIES (INCLUDING
FIDUCIARY DUTIES) AND LIABILITIES RELATING TO THE COMPANY OR TO ANOTHER MEMBER,
THE MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY
OWNER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF ACTING UNDER THE
AGREEMENT, THE PARTNERSHIP AGREEMENT OR THE OPERATING PROCEDURES SHALL NOT BE
LIABLE TO THE COMPANY OR TO ANY OTHER MEMBER OR ITS AFFILIATES FOR THEIR
RELIANCE ON THE PROVISIONS OF THIS AGREEMENT. THE PROVISIONS OF THIS AGREEMENT,
TO THE EXTENT THAT THEY EXPAND OR RESTRICT THE DUTIES AND LIABILITIES OF THE
MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY OWNER,
OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF OTHERWISE EXISTING AT LAW
OR IN EQUITY, ARE AGREED BY THE MEMBERS TO REPLACE SUCH OTHER DUTIES AND
LIABILITIES OF THE MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE
AFFILIATES, OR ANY OWNER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF.

SECTION 15.7 INDEMNIFICATION.

                  (a) TO THE FULLEST EXTENT PERMITTED BY LAW, THE MANAGING
         MEMBER, THE MANAGEMENT COMMITTEE, THE OTHER MEMBER, THEIR RESPECTIVE
         AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, PARTNERS,
         EMPLOYEES AND AGENTS OR ANY PERSON PERFORMING A SIMILAR FUNCTION
         (INDIVIDUALLY, AN "INDEMNITEE") SHALL BE INDEMNIFIED AND HELD HARMLESS
         BY THE COMPANY FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
         JUDGMENTS, LIABILITIES, OBLIGATIONS, PENALTIES, SETTLEMENTS AND
         REASONABLE EXPENSES (INCLUDING LEGAL FEES) ARISING FROM ANY AND ALL
         CLAIMS, DEMANDS, ACTIONS, SUITS OR PROCEEDINGS, CIVIL, CRIMINAL,
         ADMINISTRATIVE OR INVESTIGATIVE, IN WHICH THE INDEMNITEE MAY BE
         INVOLVED, OR THREATENED TO BE INVOLVED, AS A PARTY OR OTHERWISE, BY
         REASON OF ITS STATUS AS (x) A MEMBER OF THE


                                      -20-
<PAGE>

         MANAGEMENT COMMITTEE, A MEMBER OR AN AFFILIATE THEREOF, OR (y) AN
         OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF A MEMBER OR AN
         AFFILIATE THEREOF, REGARDLESS OF WHETHER THE INDEMNITEE CONTINUES TO BE
         A MEMBER OF THE MANAGEMENT COMMITTEE, A MEMBER OR AN AFFILIATE THEREOF
         OR AN OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF A MEMBER OR AN AFFILIATE
         THEREOF AT THE TIME ANY SUCH LIABILITY OR EXPENSE IS PAID OR INCURRED,
         UNLESS THE ACT OR FAILURE TO ACT GIVING RISE TO INDEMNITY HEREUNDER WAS
         PERFORMED OR OMITTED FRAUDULENTLY OR CONSTITUTED GROSS NEGLIGENCE OR
         WILLFUL MISCONDUCT.

                  (b) The Company may purchase and maintain insurance on behalf
         of the Members, the Management Committee and such other persons as the
         Management Committee shall determine against any liability that may be
         asserted against or expense that may be incurred by such Person in
         connection with the Company's activities, regardless of whether the
         Company would have the power to indemnify such person against such
         liability under the provisions of this Agreement.

                  (c) Expenses incurred by any Indemnitee in defending any claim
         with respect to which such Indemnitee may be entitled to
         indemnification by the Company hereunder (including without limitation
         reasonable attorneys' fees and disbursements) shall, to the maximum
         extent permitted by law, be advanced by the Company prior to the final
         disposition of such claim, upon receipt of a written undertaking by or
         on behalf of such Indemnitee to repay the advanced amount of such
         expenses unless it is determined ultimately that the Indemnitee is
         entitled to indemnification by the Company under Section 15.7(a).

                  (d) The indemnification provided in this Section 15.7 is for
         the benefit of the Indemnitees and shall not be deemed to create any
         right to indemnification for any other Persons.

SECTION 15.8 OTHER ACTIVITIES; NONCOMPETITION.

         Each Member agrees that the terms of Section 15.8 of the Partnership
Agreement shall also be applicable to the Members during the term of this
Agreement with respect to the Partnership Business.

                                   ARTICLE XVI

                        TRANSFER OF MEMBERSHIP INTERESTS

SECTION 16.1 RESTRICTIONS ON TRANSFER. No Member shall have the right to Dispose
of its interest in the Company, or any portion thereof, without (i)
simultaneously Disposing of its and any of its Affiliates' entire interest in
the Partnership pursuant to the provisions of Article XVI of the Partnership
Agreement, and (ii) Disposing of its entire Membership Interest to a single
purchaser or transferee. Accordingly, any Disposition of the Member's interest
in the Company shall be in compliance with Article XVI of the Partnership
Agreement, and such Article XVI shall be binding on the parties to this
Agreement as if fully set out herein with application to the Membership
Interests in the Company rather than Partnership Interests in the Partnership.


                                      -21-
<PAGE>


                                  ARTICLE XVII

                           DISSOLUTION OF THE COMPANY

         The happening of any one of the following events shall work an
immediate dissolution of the Company:

                  (a) The resignation, expulsion, bankruptcy or dissolution of a
         Member unless the business of the Company is continued by the written
         consent of the remaining Member within 90 days following the occurrence
         of any such event;

                  (b) The receipt by the Company of the final payment due on the
         sales price of all or substantially all the assets of the Company or
         the Company's business following the Company's sale thereof;

                  (c) The agreement by all of the Members to dissolve; and

                  (d) The entry of a decree of judicial dissolution under
         Section 18-802 of the Act.

Each Member covenants and agrees that it will not retire, resign or voluntarily
dissolve, without the prior written consent of the other Member.

                                  ARTICLE XVIII

                    WINDING UP AND TERMINATION OF THE COMPANY

SECTION 18.1 LIQUIDATOR. If the Company is dissolved for any reason, a
liquidator (the "LIQUIDATOR") shall commence to wind up the affairs of the
Company and to liquidate and sell its assets. The Members shall serve as the
Liquidator unless they appoint another person to serve as the Liquidator. The
Liquidator shall have full right and discretion to determine the time, manner
and terms of sale or sales of Company property pursuant to such liquidation
having due regard to the activity and condition of the relevant market and
general financial and economic conditions. The Liquidator appointed in the
manner provided herein shall have and may exercise, without further
authorization or consent of any of the parties hereto or their legal
representatives or successors in interest, all of the powers conferred upon the
Members under the terms of this Agreement (but subject to all of the applicable
limitations, contractual and otherwise, upon the exercise of such powers) to the
extent necessary or desirable in the good faith judgment of the Liquidator to
carry out the duties and functions of the Liquidator hereunder for and during
such period of time, not to exceed two (2) years after the date of dissolution
of the Company, as shall be reasonably required in the good faith judgment of
the Liquidator to complete the liquidation and dissolution of the Company as
provided for herein, including, without limitation, the following specific
powers:

                  (a) The power to continue to manage and operate any business
         of the Company during the period of such liquidation or dissolution
         proceedings, excluding, however, the power to make and enter into
         contracts which may extend beyond the period of liquidation.


                                      -22-
<PAGE>


                  (b) The power to make sales and incident thereto to execute
         deeds, bills of sale, assignments and transfers of assets and
         properties of the Company; provided, that the Liquidator may not impose
         personal liability upon any of the Members under any such instrument.

                  (c) The power to borrow funds as may, in the good faith
         judgment of the Liquidator, be reasonably required to pay debts and
         obligations of the Company or operating expenses, and to execute and/or
         grant deeds of trust, mortgages, security agreements, pledges and
         collateral assignments upon and encumbering any of the Company
         properties as security for repayment of such loans or as security for
         payment of any other indebtedness of the Company; provided, that the
         Liquidator shall not have the power to create any personal obligation
         on any of the Members to repay such loans or indebtedness other than
         out of available proceeds of foreclosure or sale of the properties or
         assets as to which a lien or liens are granted as security for payment
         thereof.

                  (d) The power to settle, release, compromise or adjust any
         claims asserted to be owing by or to the Company, and the right to
         file, prosecute or defend lawsuits and legal proceedings in connection
         with any such matters.

SECTION 18.2 RESERVES. In making payment or provision for payment of all debts
and liabilities of the Company and all expenses of liquidation, the Liquidator
may set up such cash reserves as the Liquidator may deem reasonably necessary
for any contingent liabilities or obligations of the Company. Upon the
satisfaction or other discharge of such contingency, the amount of the reserves
not retired, if any, will be distributed in accordance with this Article.

SECTION 18.3 SALE OF ASSETS; DISTRIBUTION OF PROCEEDS. Upon the winding up and
termination of the business and affairs of the Company, its assets (other than
cash) shall be sold, its liabilities and obligations to creditors and all
expenses incurred in its liquidation shall be paid (either by payment or the
making of reasonable provision for payment). All items of Company income, gain,
loss or deduction shall be credited or charged to the Capital Accounts of the
Members pro rata in accordance with their Sharing Ratios. Thereafter, the net
proceeds from such sales (after deducting all selling costs and expenses in
connection therewith), together with the reserve account referred to in Section
18.2 above, shall be distributed among the Members in accordance with their
respective positive balances in their Capital Accounts.

SECTION 18.4 FINAL ACCOUNTING. Within a reasonable time following the completion
of the liquidation of the Company's properties, the Liquidator shall supply to
each of the Members a statement prepared by the Company's accountants which
shall set forth the assets and the liabilities of the Company as of the date of
complete liquidation, each Member's pro rata portion of distributions pursuant
to Section 18.3, and the amount retained as reserves by the Liquidator pursuant
to Section 18.2.

SECTION 18.5 RECOURSE LIMITED TO COMPANY ASSETS. Each holder of an interest in
the Company shall look solely to the assets of the Company for all distributions
with respect to the Company and his Capital Contribution thereto (including the
return thereof) and share of profits or


                                      -23-
<PAGE>


losses thereof, and shall have no recourse therefor (upon dissolution or
otherwise) against the Company, the Members or the Liquidator. No holder of an
interest in the Company shall have any right to demand or receive property other
than cash upon dissolution and termination of the Company.

SECTION 18.6 TERMINATION. Upon the completion of the liquidation of the Company
and the distribution of all Company funds, the existence of the Company shall
terminate and the Liquidator shall (and is hereby given the power and authority
to) execute, acknowledge, swear to and record all documents required to
effectuate the dissolution and termination of the Company. No Member shall be
required to restore any deficit balance existing in its Capital Account upon the
liquidation and termination of the Company.

                                   ARTICLE XIX

                                     NOTICES

         To be effective, all notices and demands under this Agreement must be
in writing and must be given (i) by depositing same in the United States mail,
postage prepaid, certified or registered, return receipt requested, (ii) by
telecopier with receipt confirmed by return telecopy, or (iii) by delivering
same in person and receiving a signed receipt therefor. For purposes of notice,
the address of the Company shall be the address of its then principal office and
the addresses of the Members or their respective assigns shall be as set forth
on the signature pages hereof. Notices made in accordance with the foregoing
shall be deemed to have been given and made upon receipt. Any Member or his
assignee may designate a different address or telecopier number to which notices
or demands shall thereafter be directed by written notice given in the manner
hereinabove required and directed to the Company.

                                   ARTICLE XX

                             AMENDMENTS AND MEETINGS

SECTION 20.1 AMENDMENTS. This Agreement may be modified or amended from time to
time by the written agreement of the Members.

SECTION 20.2 MEETINGS OF THE MEMBERS.

                  (a) Meetings of the Members may be called at any time by a
         Member. Notice of any meeting shall be given to all Members not less
         than two (2) Business Days nor more than thirty (30) Business Days
         prior to the date of such meeting. Each Member may authorize any person
         to act for it by proxy on all matters in which a Member is entitled to
         participate, including waiving notice of any meeting, or voting or
         participating at meeting. Every proxy must be signed by the Member or
         its attorney-in-fact.

                  (b) Each meeting of Members shall be conducted by the person
         that the Member calling the meeting shall designate. The Members shall
         establish all other provisions relating to meetings of Members,
         including notice of the time, place or purpose of any meeting at


                                      -24-
<PAGE>

         which any matter is to be voted on by any Members, waiver of any such
         notice, action by consent without a meeting, the establishment of a
         record date, quorum requirements, voting in person or by proxy or any
         other matter with respect to the exercise of any such right to vote.

                                   ARTICLE XXI

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         The Members each hereby respectively represent and warrant to the
others that (i) it is duly organized, validly existing and in good standing
under the jurisdiction of its organization, with full power and authority to
enter into and perform its obligations under this Agreement; (ii) it has validly
executed this Agreement, and upon delivery, this Agreement shall be a binding
obligation of such party, enforceable against such party in accordance with its
terms; and (iii) its entry into this Agreement and the performance of its
obligations hereunder will not require the approval of any governmental body or
regulatory authority and will not violate, conflict with or cause a default
under, any of its organizational documents, any contractual covenant or
restriction by which such party is bound, or any applicable law, regulation,
rule, ordinance, order, judgment or decree.

                                  ARTICLE XXII

                                    DISPUTES

         Except for the injunctive remedies provided by Section 15.8, in the
event of any claims, counterclaims, demands, causes of action, disputes,
controversies, and other matters in question arising out of or relating to this
Agreement, any provision hereof, the alleged breach thereof, or in any way
relating to the subject matter of this Agreement or the relationship between the
Members created by this Agreement or the Partnership Agreement, involving the
Members and/or their respective representatives and/or Affiliates (all of which
are referred to herein as "DISPUTES"), the Members shall promptly seek to
resolve any such Dispute in accordance with the terms and provisions of Article
XXIII of the Partnership Agreement.

                                  ARTICLE XXIII

                                  MISCELLANEOUS

SECTION 23.1 NO RIGHT OF PARTITION. The Members agree that the Company
properties are not and will not be suitable for partition. Accordingly, each of
the Members hereby irrevocably waives any and all rights that he may have to
maintain any action for partition of any of the Company property.

SECTION 23.2 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement and the additional
documents and agreements referred to herein constitute the entire agreement
among the parties. It supersedes any prior agreement or understandings among
them with regard to the subject matter hereof, and it may not be modified or
amended in any manner other than as set forth herein.


                                      -25-
<PAGE>


SECTION 23.3 GOVERNING LAW. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware.

SECTION 23.4 BINDING EFFECT. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the parties and
their legal representatives, heirs, administrators, executors, successors and
assigns.

SECTION 23.5 CONSTRUCTION OF AGREEMENT. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in the masculine, the feminine
or the neuter gender shall include the masculine, feminine and neuter. The term
"person" means any individual, corporation, partnership, trust or other entity.

SECTION 23.6 CAPTIONS. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.

SECTION 23.7 EFFECT OF INVALID PROVISION. If any provision of this Agreement, or
the application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.

SECTION 23.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. It shall not be necessary for all
Members to execute the same counterpart hereof.

SECTION 23.9 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.



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


Address:                                TE Products Pipeline Company, Limited
                                        Partnership, by TEPPCO GP, Inc.,
2929 Allen Parkway, Suite 3200          its general partner
Houston, Texas 77019
Telecopy: 713/759-3645                  By:
                                             --------------------------------
                                        Its:
                                             --------------------------------



                                      -26-
<PAGE>

                                        Louis Dreyfus Energy Services L.P.

10 Westport Road
Wilton, Connecticut 06897               By:
                                             --------------------------------
Telecopy: 203/761-8119                  Its:
                                             --------------------------------


                                      -27-
<PAGE>
                         EXHIBIT G OF JOINT DEVELOPMENT
                                   AGREEMENT

                        AGREEMENT OF LIMITED PARTNERSHIP


                                       OF


                       MONT BELVIEU STORAGE PARTNERS, L.P.





                          DATED AS OF JANUARY 21, 2003




<PAGE>



                                TABLE OF CONTENTS


<Table>
<S>                                                                                                 <C>
DEFINITIONS.........................................................................................  1

ARTICLE  I                  FORMATION OF LIMITED PARTNERSHIP........................................  7

ARTICLE  II                 NAME....................................................................  7

ARTICLE  III                PURPOSE.................................................................  8

ARTICLE  IV                 NAMES AND ADDRESSES OF PARTNERS AND
                            PRINCIPAL OFFICE OF PARTNERSHIP.........................................  8

ARTICLE  V                  REGISTERED AGENT; REGISTERED OFFICE;
                            ADDITIONAL OFFICES......................................................  8

ARTICLE  VI                 TERM....................................................................  8

ARTICLE  VII                ADDITIONAL LIMITED PARTNERS.............................................  9

ARTICLE  VIII               CAPITAL CONTRIBUTIONS...................................................  9
         Section 8.1        Capital Contributions...................................................  9
         Section 8.2        Additional Contributions...............................................  12
         Section 8.3        Capital Accounts.......................................................  12
         Section 8.4        Adjustment of Capital Accounts.........................................  12

ARTICLE  IX                 DISTRIBUTIONS..........................................................  13
         Section 9.1        Frequency..............................................................  13
         Section 9.2        Failure to Withdraw....................................................  13
         Section 9.3        Transferor/Transferee Allocations......................................  13
         Section 9.4        Partner Advances.......................................................  13

ARTICLE  X                  ALLOCATIONS OF INCOME, GAIN, LOSS,
                            DEDUCTION AND CREDIT...................................................  14
         Section 10.1       General................................................................  14
         Section 10.2       Allocations for Tax Purposes...........................................  15
         Section 10.3       Transferor/Transferee Allocations......................................  15
         Section 10.4       Reliance on Advisors...................................................  16
         Section 10.5       Tax Matters Partner....................................................  16

ARTICLE  XI                 BOOKS OF ACCOUNT, RECORDS AND TAX
                            INFORMATION............................................................  16
         Section 11.1       Maintenance of Books and Records.......................................  16
         Section 11.2       Reports................................................................  17
</Table>


                                       -i-

<PAGE>


<Table>
<S>                                                                                                 <C>
ARTICLE  XII                FISCAL YEAR............................................................  17

ARTICLE  XIII               PARTNERSHIP FUNDS......................................................  18

ARTICLE  XIV                STATUS OF LIMITED PARTNERS.............................................  18
         Section 14.1       No Personal Liability..................................................  18
         Section 14.2       Dissolution or Bankruptcy of Limited Partner...........................  18

ARTICLE  XV                 MANAGEMENT AND OPERATION OF BUSINESS...................................  18
         Section 15.1       Management by General Partner..........................................  18
         Section 15.2       No Limited Partner Participation.......................................  19
         Section 15.3       Actions Requiring Limited Partner Consent..............................  19
         Section 15.4       Third Party Reliance...................................................  19
         Section 15.5       Compensation and Reimbursement.........................................  20
         Section 15.6       Exculpation............................................................  20
         Section 15.7       Indemnification........................................................  20
         Section 15.8       Other Activities; Noncompetition.......................................  21

ARTICLE  XVI                TRANSFER OF INTERESTS BY PARTNERS......................................  24
         Section 16.1       Restrictions on Transfer...............................................  24
         Section 16.2       Transfers to Affiliates................................................  24
         Section 16.3       Right of First Refusal.................................................  24
         Section 16.4       Change of Partner Control..............................................  25
         Section 16.5       Procedures.............................................................  25
         Section 16.6       Purchase and Sale in the Event of Maximum Loss Being Exceeded..........  26
         Section 16.7       Compliance with Securities Laws........................................  26

ARTICLE  XVII               DISSOLUTION OF THE PARTNERSHIP.........................................  27

ARTICLE  XVIII              WINDING UP AND TERMINATION OF THE
                            PARTNERSHIP............................................................  27
         Section 18.1       Liquidator.............................................................  27
         Section 18.2       Reserves...............................................................  28
         Section 18.3       Sale of Assets; Distribution of Proceeds...............................  28
         Section 18.4       Final Accounting.......................................................  29
         Section 18.5       Recourse Limited to Assets of the Partnership..........................  29
         Section 18.6       Termination............................................................  29

ARTICLE  XIX                NOTICES................................................................  29

ARTICLE  XX                 AMENDMENT OF LIMITED PARTNERSHIP
                            AGREEMENT..............................................................  30

ARTICLE  XXI                POWER OF ATTORNEY......................................................  30
</Table>


                                                       -ii-

<PAGE>


<Table>
<S>                                                                                                 <C>
ARTICLE  XXII               REPRESENTATIONS, WARRANTIES AND
                            COVENANTS..............................................................  30

ARTICLE  XXIII              DISPUTES...............................................................  31
         Section 23.1       Negotiation............................................................  31
         Section 23.2       Failure to Resolve.....................................................  31
         Section 23.3       Arbitration............................................................  32
         Section 23.4       Recovery of Costs and Attorneys' Fees..................................  33
         Section 23.5       Choice of Forum........................................................  33
         Section 23.6       Jury Waivers...........................................................  33
         Section 23.7       Special Buy-Out Options................................................  34
         Section 23.8       Dispute Under Both this Agreement and LLC Agreement....................  35

ARTICLE  XXIV               MISCELLANEOUS..........................................................  35
         Section 24.1       No Right of Partition..................................................  35
         Section 24.2       Entire Agreement; Supersedure..........................................  35
         Section 24.3       Governing Law..........................................................  35
         Section 24.4       Binding Effect.........................................................  35
         Section 24.5       Construction of Agreement..............................................  35
         Section 24.6       Captions...............................................................  35
         Section 24.7       Effect of Invalid Provision............................................  36
         Section 24.8       Counterparts...........................................................  36
         Section 24.9       Waiver.................................................................  36


EXHIBIT A                   Dreyfus Storage Agreement

EXHIBIT B                   MB Assets

EXHIBIT C                   Operating Procedures

EXHIBIT D                   TE Storage Agreement
</Table>


                                      -iii-

<PAGE>
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                      MONT BELVIEU STORAGE PARTNERS, L.P.


         THIS AGREEMENT is made as of the 21st day of January, 2003, by and
among Mont Belvieu Venture, LLC, a Delaware limited liability company, as the
General Partner, and TE Products Pipeline Company, Limited Partnership, a
Delaware limited partnership, and Louis Dreyfus Energy Services L.P., a Delaware
limited partnership, as the Limited Partners.

         WHEREAS, the parties hereto desire to form a limited partnership under
and pursuant to Delaware law.

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

                                  DEFINITIONS

         The following definitions shall be applicable to the terms set forth
below as used in this Agreement:

         "ACCEPTANCE" has the meaning assigned to such term in Section 16.3.

         "ACCOUNTANTS" has the meaning given such term in Section 11.2(a)(i).

         "ACQUISITION PROPOSAL" has the meaning assigned to such term in Section
16.3.

         "AFFILIATE" means, when used with respect to a specified person, any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with the specified person, provided that the
Partnership shall not be deemed to be an Affiliate of the Partners or any of
their respective subsidiaries or Affiliates. For purposes of this definition,
"control", when used with respect to any specified person, means the power to
direct the management and policies of the person, directly or indirectly,
whether through the ownership of voting securities, by contract, by family
relationship or otherwise; and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing. Notwithstanding the foregoing, for
purposes of this Agreement, Louis Dreyfus Natural Gas Corporation, an Oklahoma
corporation, shall not be deemed an Affiliate of the LD Partner.

         "AGREED VALUE" means, in the case of any contributions or distributions
of property other than the contributions described in Section 8.1(a), the fair
market value of such property net of any indebtedness or other liability either
assumed or to which such property is subject, as such fair market value is
determined by the General Partner using such reasonable method of valuation as
it may adopt.


                                       -1-
<PAGE>
         "AGREEMENT" means the Agreement of Limited Partnership of Mont Belvieu
Storage Partners, L.P. as the same may be amended, modified or restated from
time to time in accordance with Article XX hereof.

         "BUILT-IN GAIN" with respect to any Partnership property means (i) the
excess of the Agreed Value of any Contributed Property over its adjusted basis
for federal income tax purposes as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Partnership property subject
to depreciation, cost recovery or amortization pursuant to Section 8.4 as a
result of a contribution of cash for a Partnership Interest, the Unrealized Gain
with respect to such property.

         "BUILT-IN LOSS" with respect to any Partnership property means (i) the
excess of its adjusted basis for federal income tax purposes of any Contributed
Property over its Agreed Value as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Partnership property subject
to depreciation, cost recovery or amortization pursuant to Section 8.4 as a
result of a contribution of cash for a Partnership Interest, the Unrealized Loss
with respect to such property.

         "BUSINESS DAY" means any day other than a Saturday, Sunday or bank
holiday in Houston, Texas.

         "CAPITAL ACCOUNT" means the account established for each Partner
pursuant to Section 8.3.

         "CAPITAL CONTRIBUTIONS" means the Agreed Value of any property and the
amount of cash contributed to the Partnership.

         "CARRYING VALUE" with respect to any Capital Contribution means the
Agreed Value of such property reduced as of the time of determination by all
depreciation, cost recovery and amortization deductions charged to the Capital
Accounts with respect to such property and an appropriate amount to reflect any
sales, retirements or other dispositions of assets included in such property
and, with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes as of the time of determination. The
Carrying Values shall be further adjusted as provided in Section 8.4.

         "CERTIFICATE OF LIMITED PARTNERSHIP" means the Certificate of Limited
Partnership required to be filed in the Office of the Secretary of State of the
State of Delaware pursuant to the Partnership Act, as the same may be amended,
modified or restated from time to time.

         "CHANGE OF PARTNER CONTROL" means either a TE Change of Partner Control
or a LD Change of Partner Control.

         "CODE" means the Internal Revenue Code of 1986, as amended and in
effect on the effective date hereof and, to the extent applicable, as
subsequently amended.

         "COMPETING BUSINESS TRANSACTION" has the meaning assigned to such term
in Section 15.8(c).

                                      -2-
<PAGE>


         "CONTRIBUTED PROPERTY" means any Capital Contribution of property other
than cash.

         "DEFAULT INTEREST RATE" means a rate per annum equal to the lesser of
(a) 3% per annum plus the Prime Rate or (b) the maximum rate permitted by law.

         "DELINQUENT PARTNER" has the meaning assigned to such term in Section
8.1(d).

         "DISCRETIONARY CAPITAL EXPENDITURES" means any expenditure related to
the Partnership Business that is classified under GAAP as a capital expenditure
and (i) is not a Mandatory Capital Expenditure, or (ii) if classified as a
Mandatory Capital Expenditure, is associated or is in conjunction with, or is
the result of, a prior or current Discretionary Capital Expenditure, in which
case the portion of such Mandatory Capital Expenditure that is allocable to such
prior or current Discretionary Capital Expenditure shall be classified as a
Discretionary Capital Expenditure.

         "DISPOSE, DISPOSING OR DISPOSITION" means, with respect to Partnership
Interest or any portion thereof, a sale, assignment, transfer, conveyance, gift,
exchange or other disposition of such asset, whether such disposition be
voluntary, involuntary or by operation of law, including but not limited to the
following: (a) in the case of a Partnership Interest owned by an entity, a
Change of Partner Control and (b) a disposition in connection with, or in lieu
of, a foreclosure of an Encumbrance; but such terms shall not include the
creation of an Encumbrance.

         "DISPUTES" has the meaning assigned to such term in Section 23.1.

         "DISTRIBUTABLE CASH" means, at the time of determination, all
Partnership cash derived from the conduct of the Partnership's business, other
than (i) Capital Contributions, together with interest earned thereon pending
utilization thereof, (ii) financing proceeds, (iii) amounts required for working
capital and Discretionary and Mandatory Capital Expenditures and (iv) other
amounts that the General Partner reasonably determines to be necessary for the
proper operation of the Partnership's business and its winding up and
liquidation.

         "DREYFUS STORAGE AGREEMENT" shall mean the Storage Agreement in the
form attached as Exhibit A hereto.

         "EBITDA" means for any entity, such entity's earnings for any period on
a GAAP basis before all charges for such period, for depreciation and
amortization, interest (except as provided below) and income taxes.
Notwithstanding the foregoing, all interest incurred in connection with
borrowings by such entity the proceeds of which are used for Discretionary
Capital Expenditures relating to the MB Assets shall be deducted as an expense
in calculating EBITDA.

         "ENCUMBER, ENCUMBERING, OR ENCUMBRANCE" means the creation of a
security interest, lien, pledge, mortgage or other encumbrance, whether such
encumbrance be voluntary, involuntary or by operation of law.

         "EXERCISE PERIOD" has the meaning assigned to such term in Section
23.7(a).


                                       -3-
<PAGE>
         "FIRST PARTY" has the meaning assigned to such term in Section 15.8(c).

         "GAAP" means Generally Accepted Accounting Principles in the United
States of America consistently applied for the time periods involved.

         "GENERAL PARTNER" means Mont Belvieu Venture, LLC, a Delaware limited
liability company or its successors or assigns.

         "INDEMNITEE" has the meaning assigned to such term in Section 15.7.

         "INTEREST" has the meaning assigned to such term in Section 16.3.

         "JOINT DEVELOPMENT AGREEMENT" means that certain Joint Development
Agreement between the LD Partner and the TE Partner dated effective January 1,
2000, as the same may be modified, amended or restated from time to time.

         "LD COMBINED CAPITAL ACCOUNT BALANCE" has the meaning assigned to such
term in Section 16.4(b).

         "LD PARTNER CHANGE OF CONTROL" means an event that causes S. A. Louis
Dreyfus et Cie., a French societe anonyme, together with its Affiliates to cease
to own, directly or indirectly, at least a 50% voting interest in (i) the LD
Limited Partner or any Affiliate of the LD Limited Partner owning a membership
interest in the General Partner or (ii) in the event of the transfer of the LD
Partner's Partnership Interest to an Affiliate, in such Affiliate.

         "LD PARTNER" means Louis Dreyfus Energy Services L.P., a Delaware
limited partnership, or its successors or assigns.

         "LENDING PARTNER" has the meaning assigned to such term in Section
8.1(d).

         "LIMITED PARTNERS" means TE Products Pipeline Company, Limited
Partnership, a Delaware limited partnership and Louis Dreyfus Energy Services
L.P., a Delaware limited partnership, or their respective successors or
permitted assigns, and "LIMITED PARTNER" means either of them.

         "LIQUIDATOR" has the meaning assigned to such term in Section 18.1.

         "LLC AGREEMENT" means the Limited Liability Company Agreement of the
General Partner as the same may be modified, amended or restated from time to
time.

         "LOSS" shall mean on any date the amount, if any, by which the sum of
the Minimum Cash Balance plus any other net requirements for cash to fund the
operations of the Partnership reasonably expected to arise over the following
month exceeds the Partnership's cash balance on that date exclusive of
segregated cash balances.


                                       -4-
<PAGE>


         "MANDATORY CAPITAL EXPENDITURES" means all expenditures related to the
Partnership's assets that are classified under GAAP as a capital expenditure,
the primary function of which is for regulatory compliance, safety or
operational integrity of the Partnership's assets or is otherwise the result of
actions permitted in emergency situations as provided in the Operating
Procedures.

         "MAXIMUM LOSS" shall mean $1 million.

         "MB ASSETS" means the Mont Belvieu salt cavern storage and Houston area
shuttle system more fully described on Exhibit B hereto and all improvements,
expansions and additions thereto.

         "MINIMUM CASH BALANCE" shall mean $100,000 or such larger number as the
General Partner determines is reasonable and necessary to carry out the business
of the Partnership.

         "NET EBITDA" means the amount of EBITDA, if any, in excess of $7.3
million during any period.

         "NOTICE MONTH" has the meaning assigned to such term in Section
16.4(b).

         "OFFER" has the meaning assigned to such term in Section 16.3.

         "OFFER PERIOD" has the meaning assigned to such term in Section 16.3.

         "OFFEREE" has the meaning assigned to such term in Section 16.3.

         "OFFEROR" has the meaning assigned to such term in Section 16.3.

         "OPERATING PROCEDURES" means the Operating Procedures in the form
attached as Exhibit C hereto.

         "OPTION INTEREST" has the meaning assigned to such term in Section
16.4.

         "OPTION PARTNER" has the meaning assigned to such term in Section 16.4.

         "PARENT" means, with respect to TE Partner, TEPPCO Partners, L.P., a
Delaware limited partnership, and with respect to LD Partner, S. A. Louis
Dreyfus et Cie., a French societe anonyme.

         "PARTNERS" means the General Partner and the Limited Partners.

         "PARTNERSHIP" means Mont Belvieu Storage Partners, L.P., the limited
partnership entered into and formed hereunder pursuant to the Partnership Act.

         "PARTNERSHIP ACT" means the Delaware Revised Uniform Limited
Partnership Act, 6 Del. Code Sections 17-101 et seq., as it may be amended from
time to time, and any successor to said Partnership Act.


                                       -5-
<PAGE>


         "PARTNERSHIP BUSINESS" means the operation, maintenance and marketing
of underground storage facilities for Products and the operation of the
pipelines included within the MB Assets to and from their specific points of
delivery and receipt.

         "PARTNERSHIP INTEREST" as to any Partner means the entire ownership
interest and rights of that Partner in the Partnership, including, without
limitation, its right to a distributive share of the profits and losses of the
Partnership, its right to a distributive share of the assets of the Partnership
in accordance with the provisions hereof, and in the case of a General Partner,
its right to participate in the management of the affairs of the Partnership.

         "PRICING PERIOD" means the trailing 12-month period ending on a date or
month as specified in this Agreement.

         "PRIME RATE" means the interest rate as defined in Section 9.4 hereof.

         "PRODUCTS" means propane, normal butane, isobutane, natural gasoline
and any other commodities as determined by the General Partner.

         "PUT/CALL RIGHT" has the meaning assigned to such term in Section
23.7(a).

         "RESTRICTED AFFILIATE" means with respect to each Limited Partner, any
person in which such Limited Partner's Parent owns, directly or indirectly, at
least a 51% voting or equity interest, or which it otherwise controls. For
purposes of this definition, "control," has the meaning assigned to such term in
the definition of Affiliate and Louis Dreyfus Natural Gas Corporation shall not
be deemed a Restricted Affiliate of the LD Partner.

         "SECOND PARTY" has the meaning assigned to such term in Section
15.8(c).

         "SHARING RATIO" means 1% in the case of the General Partner and 49.5%
in the case of each Limited Partner.

         "STORAGE AGREEMENTS" means the Dreyfus Storage Agreement and the TE
Storage Agreement.

         "TE PARTNER CHANGE OF CONTROL" means a Disposition of any entity of
which over 75% of such entity's EBITDA for the preceding 12-month period is
derived from the Partnership unless such disposition is to an Affiliate of the
TE Partner.

         "TE PARTNER" means TE Products Pipeline Company, Limited Partnership or
its successors or assigns.

         "TE STORAGE AGREEMENT" means the Storage Agreement in the form attached
hereto as Exhibit D.

         "TERRITORY" has the meaning assigned to such term in Section 15.8(a).


                                       -6-
<PAGE>


         "TMP" has the meaning assigned to such term in Section 10.5.

         "UNREALIZED GAIN" attributable to a Partnership property means, as of
the date of determination, the excess of the fair market value of such property
as of such date of determination over the Carrying Value of such property as of
such date of determination.

         "UNREALIZED LOSS" attributable to a Partnership property means, as of
the date of such determination, the excess of the Carrying Value of such
property as of such date of determination over the fair market value of such
property as of such date of determination.

         "UNRECOVERED LOSS BALANCE" shall mean for either Limited Partner the
result of (a) the sum of all Capital Contributions under Sections 8.1(b)(iii)
and 8.1(c), minus (b) the sum of all distributions under Section 9.1(a).

         "VALUATION EXPERT" has the meaning assigned to that term in Section
23.7(b).

         "VALUATION MULTIPLE" means the result of dividing the fair market value
of businesses comparable or similar to the business of the Partnership by the
same businesses' EBITDA for the twelve-month period immediately preceding the
date such fair market value was measured.

                                    ARTICLE I

                        FORMATION OF LIMITED PARTNERSHIP

         The parties hereto hereby form a limited partnership pursuant to the
Partnership Act. The rights and liabilities of the Partners shall be as provided
in the Partnership Act, except as herein otherwise expressly provided. The
Partnership Interests of any Partner shall be personal property for all
purposes. On the request of the General Partner, the Limited Partners shall
execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary to qualify,
continue, or terminate the Partnership as a limited partnership under the laws
of the State of Delaware and to qualify the Partnership to do business in such
other states where such qualification is necessary or desirable.

                                   ARTICLE II

                                      NAME

         The name of the Partnership shall be, and the business of the
Partnership shall be conducted under the name of, Mont Belvieu Storage Partners,
L.P. or such other name or names that comply with applicable law as the General
Partner may designate from time to time. The General Partner shall take any
action that it determines is required to comply with the Partnership Act,
assumed name act, fictitious name act, or similar statute in effect in each
jurisdiction or political subdivision in which the Partnership proposes to do
business and the Limited Partners agree to execute any documents requested by
the General Partner in connection with any such action.


                                       -7-
<PAGE>


                                   ARTICLE III

                                     PURPOSE

         The purpose of the Partnership is to acquire, own, operate, maintain,
improve and otherwise deal with the MB Assets, and by means thereof, provide
storage, truck and railcar loading and unloading and pipeline transportation
services to the Partners, their Affiliates and third parties, and any other
business activities necessary, incidental or ancillary to any of the foregoing.

                                   ARTICLE IV

                         NAMES AND ADDRESSES OF PARTNERS
                       AND PRINCIPAL OFFICE OF PARTNERSHIP

         The names and mailing addresses of the Partners are as set forth on the
signature pages hereof. The location of the principal office of the Partnership
where the books and records of the Partnership shall be kept shall be 2929 Allen
Parkway, Suite 3200, Houston, Texas 77019. The General Partner may change the
location of the principal office of the Partnership.

                                    ARTICLE V

                                REGISTERED AGENT;
                      REGISTERED OFFICE; ADDITIONAL OFFICES

         The name and address of the registered office of the Partnership in the
State of Delaware is c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The
name and address of the registered agent for service of process on the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801. The General Partner may change the registered agent or the
registered office of the Partnership and may establish such additional offices
of the Partnership as the General Partner may from time to time determine. The
General Partner shall provide the Limited Partners with written notice of any
change in the Partnership's principal office, registered agent or registered
office.

                                   ARTICLE VI

                                      TERM

         The term of the Partnership shall be perpetual from the date of the
filing of the Certificate of Limited Partnership in the Office of the Secretary
of State of the State of Delaware unless sooner liquidated or dissolved in
accordance with this Agreement.


                                       -8-
<PAGE>


                                   ARTICLE VII

                           ADDITIONAL LIMITED PARTNERS

         In the event the General Partner determines that funds in addition to
those acquired pursuant to Section 8.1 are necessary to carry out the purposes
of the Partnership and the General Partner and the Limited Partners do not agree
to contribute such funds in their respective Sharing Ratios, the General Partner
is authorized to offer and sell additional Partnership Interests and admit any
purchasers thereof (which may include existing Partners or their Affiliates) as
additional limited partners of the Partnership. In such event, the dilution of
the then Partners shall be pro rata in accordance with their respective Sharing
Ratios prior to the issuance of such additional Partnership Interests and this
Partnership Agreement shall be amended to reflect the admissions of such persons
as limited partners of the Partnership, the revised ownership and Sharing Ratio
of each Partner and otherwise to reflect the relative rights and obligations of
the parties.

                                  ARTICLE VIII

                              CAPITAL CONTRIBUTIONS

SECTION 8.1 CAPITAL CONTRIBUTIONS.

                  (a) Each Limited Partner shall make the initial Capital
         Contributions provided in the Joint Development Agreement and the
         General Partner shall contribute $500,000 in cash to the Partnership.
         The Agreed Value of any property included in such Capital Contributions
         shall be its net book value reduced by liabilities assumed by the
         Partnership as reflected on the books of the contributor at the date of
         contribution computed in accordance with GAAP.

                  (b) Without creating any rights in favor of any third party,
         (i) each Partner shall contribute to the Partnership, in cash, on or
         before the date specified as described in this Section 8.1(b), that
         Partner's Sharing Ratio of Discretionary Capital Expenditures shown in
         the current capital expenditure budget adopted for the Partnership by
         the General Partner as being funded by Capital Contributions, (ii) the
         TE Partner shall contribute to the Partnership each quarter an amount
         equal to the actual Mandatory Capital Expenditure for such quarter
         (excluding Mandatory Capital Expenditures attributable to prior
         Discretionary Capital Expenditures), in cash, on the earlier of (x) the
         date needed by the Partnership to pay such expenses or (y) the date of
         the quarterly distribution under Section 9.1(b) for such quarter, and
         (iii) the TE Partner shall contribute to the Partnership, in cash,
         within three days of such balance being known, an amount equal to any
         Loss of the Partnership, except that in the event the TE Partner's
         Unrecovered Loss Balance is equal to or greater than the Maximum Loss,
         then Section 8.1(c) shall apply. Unless otherwise stated herein, the
         General Partner shall notify each Partner of the need for such Capital
         Contributions pursuant to this Section 8.1(b), which notice must
         include a date (which date may be no earlier than the second Business
         Day following each Partner's receipt of its notice) before which the
         Capital Contributions must be made. All Capital Contributions under
         Section 8.1(b)(i) shall be kept


                                       -9-

<PAGE>


         in a segregated account, shall not be commingled with other funds of
         the Partnership, shall be used only for Discretionary Capital
         Expenditures and shall not be included in Distributable Cash.

                  (c)

                           (i) If the TE Partner's Unrecovered Loss Balance is,
                  or with the then current Loss added, will be, equal to or
                  greater than the Maximum Loss then the TE Partner shall have
                  the option to (x) contribute, in cash, to the Partnership an
                  amount equal to the current Loss, or (y) cease to contribute
                  any cash, in which case the LD Partner shall have the option
                  to contribute, in cash, to the Partnership an amount equal to
                  the current Loss.

                           (ii) If, at any time the TE Partner's Unrecovered
                  Loss Balance is equal to or greater than the Maximum Loss and
                  neither Partner chooses to contribute, in cash, to the
                  Partnership an amount equal to the current Loss then the
                  provisions of Section 16.6 shall apply.


                  (d) If a Partner does not contribute by the time required all
         or any portion of a Capital Contribution that Partner is required to
         make as provided in this Agreement, the Partnership may exercise, on
         notice to that Partner (the "DELINQUENT PARTNER"), one or more of the
         following remedies:

                           (i) taking such action (including court proceedings)
                  as the other Partners may deem appropriate to obtain payment
                  by the Delinquent Partner of the portion of the Delinquent
                  Partner's Capital Contribution that is in default, together
                  with interest on that amount at the Default Interest Rate from
                  the date that the Capital Contribution was due until the date
                  that it is made, all at the cost and expense of the Delinquent
                  Partner;

                           (ii) permitting one or more other Partners (the
                  "LENDING PARTNER"), to advance the portion of the Delinquent
                  Partner's Capital Contribution that is in default, with the
                  following results:

                                    1. the sum advanced shall constitute a loan
                           from the Lending Partner to the Delinquent Partner
                           and a Capital Contribution of that sum to the
                           Partnership by the Delinquent Partner under the
                           applicable provisions of this Agreement,

                                    2. the principal balance of the loan and all
                           accrued unpaid interest is due and payable on the
                           tenth day after written demand by the Lending Partner
                           to the Delinquent Partner,


                                      -10-
<PAGE>


                                    3. the amount loaned shall bear interest at
                           the Default Interest Rate from the date that the
                           advance is deemed made until the date that the loan,
                           together with all interest accrued on it, is repaid
                           to the Lending Partner,

                                    4. all distributions from the Partnership
                           that otherwise would be made to the Delinquent
                           Partner (whether before or after dissolution of the
                           Partnership) instead shall be paid to the Lending
                           Partner until the loan and all interest accrued on it
                           have been paid in full to the Lending Partner (with
                           payments being applied first to accrued and unpaid
                           interest and then to principal), but all such
                           payments to the Lending Partner shall be treated for
                           all purposes of this Agreement as a distribution by
                           the Partnership to the Delinquent Partner and a
                           payment by the Delinquent Partner to the Lending
                           Partner,

                                    5. the payment of the loan and interest
                           accrued on it is secured by a security interest in
                           the Delinquent Partner's Partnership Interest, as
                           more fully set forth in Section 8.1(e), and

                                    6. the Lending Partner has the right, in
                           addition to the other rights and remedies granted to
                           it under this Agreement or at law or in equity, to
                           take any action (including court proceedings) that
                           the Lending Partner may deem appropriate to obtain
                           payment by the Delinquent Partner of the loan and all
                           accrued and unpaid interest on it, at the cost and
                           expense of the Delinquent Partner;

                           (iii) exercising the rights of a secured party under
                  the Uniform Commercial Code of the State of Delaware, as more
                  fully set forth in Section 8.1(e); or

                           (iv) exercising any other rights and remedies
                  available at law or in equity.

                  (e) Each Partner grants to the Partnership, and to each
         Lending Partner with respect to any loans made by the Lending Partner
         to that Partner as a Delinquent Partner as described in Section 8.1(d),
         as security, equally and ratably, for the payment of all Capital
         Contributions that Partner has agreed to make and the payment of all
         loans and interest accrued on them made by Lending Partners to that
         Partner as a Delinquent Partner as described in Section 8.1(d), a
         security interest in and a general lien on its Partnership Interest and
         the proceeds of that Partnership Interest, all under the Uniform
         Commercial Code of the State of Delaware. On any default in the payment
         of a Capital Contribution or in the payment of such a loan or interest
         accrued on it, the Partnership or the Lending Partner, as applicable,
         is entitled to all the rights and remedies of a secured party under the
         Uniform Commercial Code of the State of Delaware with respect to the
         security interest granted in this Section 8.1(d). Each Partner shall
         execute and deliver to the Partnership and the other Partners all
         financing statements and other instruments that the other Partners or
         the Lending Partner, as applicable, may request to effectuate and carry
         out the preceding provisions of this


                                      -11-
<PAGE>


         Section 8.1(e). At the option of a Lending Partner, this Agreement or a
         photographic or other copy of this Agreement may serve as a financing
         statement.

SECTION 8.2 ADDITIONAL CONTRIBUTIONS.

                  (a) The liability of each Limited Partner to the Partnership
         shall be limited to the amount of its Capital Contributions to be made
         pursuant to Section 8.1 and no Limited Partner shall have any further
         personal liability to contribute money to, or in respect of, the
         liabilities or the obligations of the Partnership unless it agrees in
         writing to make additional capital contributions to the Partnership,
         nor shall any Limited Partner be personally liable for any obligations
         of the Partnership, except as may be provided in the Partnership Act.

                  (b) Notwithstanding the foregoing provisions of Section
         8.2(a), in the event the MB Assets contributed to the Partnership by
         the TE Partner are Encumbered as collateral for indebtedness that is
         not assumed by the Partnership, the TE Partner shall (i) continue to
         assume responsibility for (A) the payment of such indebtedness, and (B)
         upon payment of such indebtedness, the removal of all Encumbrances, and
         (ii) shall indemnify and hold harmless the Partnership for any cost,
         loss or expense incurred by the Partnership as a result of such
         Encumbrance.

                  (c) No Partner shall be entitled to the return of any part of
         its Capital Contribution or to be paid interest in respect of either
         its Capital Account or any Capital Contribution made by such Partner.
         No unrepaid Capital Contribution shall be deemed or considered to be a
         liability of the Partnership or any Partner. No Partner shall be
         required to contribute or lend any cash or property to the Partnership
         to enable the Partnership to return any Partner's Capital Contributions
         to the Partner.

SECTION 8.3 CAPITAL ACCOUNTS. A capital account ("CAPITAL ACCOUNT") shall be
established for each Partner and shall be maintained in such a manner as to
correspond with the requirements of Treasury Regulations promulgated from time
to time under section 704(b) of the Code.

SECTION 8.4 ADJUSTMENT OF CAPITAL ACCOUNTS. If any additional Partnership
Interests are to be issued in consideration for a contribution of property or
cash or if any Partnership property is to be distributed in liquidation of the
Partnership or a Partnership Interest, the Capital Accounts of the Partners (and
the amounts at which all Partnership properties are carried on its books and
records utilized to maintain the Capital Accounts) shall, immediately prior to
such issuance or distribution, as the case may be, be adjusted (consistent with
the provisions of section 704(b) of the Code and the Treasury Regulations
promulgated thereunder) upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to all Partnership properties (as if such
Unrealized Gain or Unrealized Loss had been recognized upon actual sale of such
properties upon a liquidation of the Partnership immediately prior to such
issuance). If the Agreed Value of any property of the Partnership is properly
reflected on the books of the Partnership at a value that differs from the
adjusted tax basis of such property, this Section 8.4 shall be applied with
reference to such value.


                                      -12-

<PAGE>


                                   ARTICLE IX

                                  DISTRIBUTIONS

SECTION 9.1 FREQUENCY. Except as otherwise provided herein, Distributable Cash
attributable to each fiscal year shall be distributed as follows:

                  (a) First, quarterly all amounts to the Limited Partner or
         Partners who funded Losses under Sections 8.1(b)(iii) or (c) pro rata
         in proportion to their respective Unrecovered Loss Balances until such
         time that such Partners' Unrecovered Loss Balances, if any, are reduced
         to zero.

                  (b) Second, quarterly to the TE Partner in an amount up to the
         result of (i) $1.825 million, minus (ii) Mandatory Capital Expenditures
         for such quarter, minus (iii) any amounts payable in such quarter to a
         third party operator of the Partnership's assets if the General
         Partner, acting by and through its Managing Member, ceases to operate
         such assets, plus (iv) any Capital Contributions made by the TE Partner
         under Section 8.1(b)(ii) in such quarter.

                  (c) Third, for the full fiscal year, to the TE Partner in an
         amount equal to the positive difference, if any, of the result of (i)
         $7.3 million, minus (ii) Mandatory Capital Expenditures for such fiscal
         year, minus (iii) any amounts payable in such fiscal year to a third
         party operator of the Partnership's assets if the General Partner,
         acting by and through its Managing Member, ceases to operate such
         assets, minus (iv) all distributions to the TE Partner pursuant to
         Section 9.1(b) for quarters included in such fiscal year plus (v) any
         Capital Contributions made by the TE Partner under Sections 8.1(b)(ii)
         in such fiscal year.

                  (d) Fourth, for the full fiscal year, the balance, if any,
         among the Partners pro rata in accordance with their Sharing Ratios.

SECTION 9.2 FAILURE TO WITHDRAW. If any Partner does not withdraw the whole or
any part of his share of any cash distribution made pursuant to Section 9.1,
such Partner shall not be entitled to receive any interest thereon without the
express written consent of the other Partner.

SECTION 9.3 TRANSFEROR/TRANSFEREE ALLOCATIONS. Unless otherwise agreed in
writing by a transferor and transferee of a Partnership Interest herein,
Distributable Cash distributable with respect to any Partnership Interest which
may have been transferred during any year shall be distributed to the holder of
such Partnership Interest who was recognized as the owner on the date of such
distribution, without regard to the results of Partnership operations during the
year.

SECTION 9.4 PARTNER ADVANCES. Notwithstanding the foregoing, if any Partner
advances any funds or makes any other payment to or on behalf of the
Partnership, not required pursuant to the provisions hereof, to cover operating
or capital expenses of the Partnership which cannot be paid out of the
Partnership's operating revenues, such advance or payment shall be deemed a loan
to the Partnership by such Partner, bearing interest from the date such advance
or payment was made until


                                      -13-
<PAGE>


such loan is repaid at a floating rate per annum equal to the lesser of (i) two
percent (2%) over the interest rate publicly quoted by The Wall Street Journal
from time to time as the prime rate, with adjustments in such varying rate to be
made on the same date as any change in the aforesaid rate (herein called "PRIME
RATE") or (ii) the maximum rate permitted under applicable law. Notwithstanding
Section 9.1 above, all distributions of Distributable Cash shall first be
distributed to the Partners making such loans until all such loans have been
repaid to such Partners, together with interest thereon as above provided, and,
thereafter, the balance of such distributions, if any, shall be made in
accordance with the terms of Section 9.1 above. If distributions are
insufficient to repay and return all such loans as provided above, the funds
available from time to time shall first be applied to repay and retire the
oldest loan first and, if any funds thereafter remain available, such funds
shall be applied in a similar manner to remaining loans in accordance with the
order of the dates on which they were made; however, as to loans made on the
same date, each such loan shall be repaid pro rata in the proportion that such
loan bears to the total loans made on said date.

                                    ARTICLE X

                          ALLOCATIONS OF INCOME, GAIN,
                           LOSS, DEDUCTION AND CREDIT

SECTION 10.1 GENERAL.

                  (a) Except as otherwise provided herein or unless another
         allocation is required by Treasury Regulations issued under section
         704(b) of the Code (including, but not limited to, provisions
         pertaining to qualified income offsets and minimum gain chargebacks),
         for purposes of maintaining the Capital Accounts, all items of
         Partnership income, gain, loss, deduction and credit shall be allocated
         among the Partners pro rata in accordance with their Sharing Ratios in
         effect for the period during which such items accrue. For purposes of
         computing the amount of each item of income, gain, deduction or loss to
         be charged or credited to the Capital Accounts, the determination,
         recognition and classification of such item shall be the same as its
         determination, recognition and classification for federal income tax
         purposes, provided that:

                           (i) Any deductions for depreciation, cost recovery,
                  or amortization attributable to any Partnership property shall
                  be determined as if the adjusted basis of such property were
                  equal to the Carrying Value of such property. Upon an
                  adjustment to the Carrying Value of any Partnership property
                  subject to depreciation, cost recovery, or amortization
                  pursuant to Section 8.4, any further deductions for such
                  depreciation, cost recovery, or amortization attributable to
                  such property shall be determined as if the adjusted basis of
                  such property were equal to the Carrying Value of such
                  property immediately following such adjustment.

                           (ii) Any income, gain or loss attributable to the
                  taxable disposition of any Partnership property shall be
                  determined by the Partnership as if the adjusted basis of such
                  property as of such date of disposition were equal in amount
                  to the Carrying Value of such property as of such date.


                                      -14-
<PAGE>


                           (iii) All fees and other expenses incurred by the
                  Partnership to promote the sale of a Partnership Interest that
                  can neither be deducted nor amortized under section 709 of the
                  Code shall be treated as an item of deduction.

                           (iv) Computation of all items of income, gain, loss
                  and deduction shall be made without regard to any election
                  under section 754 of the Code which may be made by the
                  Partnership and, as to those items described in the section
                  705(a)(1)(B) or section 705(a)(2)(B) of the Code, without
                  regard to the fact that such items are not includable in gross
                  income or are neither currently deductible nor capitalizable
                  for federal income tax purposes.

                  (b) Notwithstanding the foregoing, (i) each Limited Partner
         shall be allocated Partnership gross income each fiscal year in an
         amount equal to the distribution made to it pursuant to Section 9.1(a),
         9.1(b) and 9.1(c) with respect to such fiscal year and (ii) each
         Partner shall be allocated (x) the depreciation and/or amortization
         deductions attributable to the property, if any, contributed by such
         Partner to the Partnership pursuant to Section 8.1(a) of this Agreement
         and (y) an amount of deductions equal to the Capital Contributions made
         by such Partner to fund Losses pursuant to Sections 8.1(b)(iii) and
         8.1(c).

SECTION 10.2 ALLOCATIONS FOR TAX PURPOSES.

                  (a) The Partnership shall, except to the extent such item is
         subject to allocation pursuant to subsection (b) below, allocate each
         item of income, gain, loss, deduction and credit, as determined for
         federal and other income tax purposes, in the same manner as such item
         was allocated for Capital Account purposes; and

                  (b) The Partnership, for federal and other income tax purposes
         shall, in the case of Contributed Properties, allocate items of income,
         gain, loss, depreciation and cost recovery deductions attributable to
         those properties with a Built-In Gain or Built-In Loss pursuant to
         section 704(c) of the Code and the Treasury Regulations thereunder.
         Similar allocations shall be made in the event that the Carrying Value
         of Partnership properties subject to depreciation, cost recovery or
         amortization are adjusted pursuant to Section 8.4 upon the issuance of
         Partnership Interests for cash. If an existing Partner acquires
         additional Partnership Interests, such allocations shall apply only to
         the extent of his or its additional Interests. No allocation under
         section 704(c) of the Code shall be charged or credited to a Partner's
         Capital Account.

SECTION 10.3 TRANSFEROR/TRANSFEREE ALLOCATIONS. Unless another method permitted
by the Code is agreed to by the General Partner, the transferor and the
transferee, income, gain, loss, deduction or credit attributable to any
Partnership Interest which has been transferred shall be allocated between the
transferor and the transferee allocated equally among the days of the
Partnership's fiscal year without regard to Partnership operations during such
days.

                                      -15-
<PAGE>

SECTION 10.4 RELIANCE ON ADVISORS. The General Partner may rely upon, and shall
have no liability to the Limited Partner or the Partnership if it does rely
upon, the written opinion of tax counsel or accountants retained by the
Partnership from time to time with respect to all matters (including disputes
with respect thereto) relating to computations and determinations required to be
made under this Article X or other provisions of this Agreement.

SECTION 10.5 TAX MATTERS PARTNER.

                  (a) The General Partner is designated tax matters partner
         ("TMP") as defined in section 6231(a)(7) of the Code. The TMP and the
         Limited Partners shall use their best efforts to comply with
         responsibilities outlined in this Section 10.5 and in sections 6222
         through 6232 of the Code (including any Treasury regulations
         promulgated thereunder) and in doing so shall incur no liability to any
         other Partner.

                  (b) If a Limited Partner intends to file a notice of
         inconsistent treatment under section 6222(b) of the Code, such Partner
         shall, prior to the filing of such notice, notify the TMP of such
         intent and the manner in which the Limited Partner's intended treatment
         of a Partnership item is (or may be) inconsistent with the treatment of
         that item by the Partnership.

                  (c) No Partner other than the TMP shall file a request
         pursuant to section 6227 of the Code for an administrative adjustment
         of partnership items for any Partnership taxable year.

                  (d) No Partner other than the TMP shall file a petition under
         Code sections 6226, 6228 or other Code sections with respect to any
         Partnership item, or other tax matters involving the Partnership. In
         the case where the TMP files such petition, it shall determine the
         forum in which such petition will be filed.

                                   ARTICLE XI

                  BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION

SECTION 11.1 MAINTENANCE OF BOOKS AND RECORDS. Proper and complete records and
books of account (including those required by the Partnership Act) shall be kept
by the Partnership in which shall be entered all transactions and other matters
relative to the Partnership's business as are usually entered into records and
books of account maintained by persons engaged in businesses of like character.
The Partnership books and records necessary for purposes of maintaining the
Capital Accounts and giving effect to the allocations provided in Articles VIII
and X shall be maintained in accordance with the accounting principles described
therein, and shall be kept on the accrual basis and the other books and records
shall be kept on the accrual basis in accordance with GAAP for financial
reporting purposes and for purposes of making all other calculations
contemplated herein. The books and records shall at all times be made available
at the principal office of the Partnership and shall be open to the reasonable
inspection and examination of the


                                      -16-
<PAGE>


Partners or their duly authorized representatives during the business hours of
the General Partner for any purpose reasonably related to the interest of such
Partner as a partner in the Partnership.

SECTION 11.2 REPORTS.

                  (a) The Partnership shall

                           (i) appoint a firm of certified public accountants to
                  report on the Partnership's financial statements (the
                  "ACCOUNTANTS"), and

                           (ii) direct the Accountants to render an audit
                  opinion on the Partnership's financial statements within 90
                  days after the end of each fiscal year.

                  (b) As soon as reasonably practicable after the end of each
         fiscal year and after the Accountants have rendered an opinion on the
         Partnership's financial statements, the Partnership shall send each
         person who was a holder of a Partnership Interest at any time during
         the fiscal year then ended:

                           (i) All Partnership tax information as shall be
                  necessary for the preparation by such holder of its federal
                  and any applicable state and local income tax returns; and

                           (ii) A copy of the Partnership's audited financial
                  statements which shall include an income statement, a balance
                  sheet, statement of cash flow and required notes to the
                  financial statements.

                  (c) As soon as practicable after the end of each calendar
         quarter, the Partnership shall send to each Partner:

                           (i) An unaudited income statement and a statement of
                  cash flows for such quarter; and

                           (ii) An unaudited balance sheet as of the end of such
                  quarter and a profit and loss statement and statement of cash
                  flows for the portion of the fiscal year then ended.


                                   ARTICLE XII

                                   FISCAL YEAR

         The fiscal year of the Partnership shall end on the thirty-first (3lst)
day of December in each year.


                                      -17-
<PAGE>


                                  ARTICLE XIII

                                PARTNERSHIP FUNDS

         The funds of the Partnership shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest-bearing accounts,
as shall be designated by the General Partner. All withdrawals from any such
bank accounts shall be made by the General Partner or other agent or agents duly
authorized by the General Partner. Partnership funds shall not be commingled
with those of any other person (including the General Partner or any of its
Affiliates).

                                   ARTICLE XIV

                           STATUS OF LIMITED PARTNERS

SECTION 14.1 NO PERSONAL LIABILITY. No Limited Partner shall have any personal
liability whatever, whether to the Partnership, to any of the Partners or to the
creditors of the Partnership, for the debts of the Partnership or any of its
losses beyond the amount agreed to be contributed by him to the capital of the
Partnership as set forth in Section 8.1 except to the extent required by the
Partnership Act. No Limited Partner shall be obligated to restore any deficit in
its Capital Account upon the liquidation of the Partnership or its Partnership
Interest.

SECTION 14.2 DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER. The dissolution or
bankruptcy of a Limited Partner shall not cause a dissolution of the
Partnership, but the rights of such Limited Partner to share in the profits and
losses of the Partnership, and to receive distributions of Partnership funds,
shall on the happening of such an event, devolve upon such Limited Partner's
legal representatives or successors in interest, as the case may be, subject to
the terms and conditions of this Agreement, and the Partnership shall continue
as a limited partnership. Each Limited Partner's successor in interest shall be
liable for all the obligations of such Limited Partner. In no event, however,
shall such estate, legal representative or other successor in interest become a
substituted Limited Partner, except in accordance with Article XVI hereof.

                                   ARTICLE XV

                      MANAGEMENT AND OPERATION OF BUSINESS

SECTION 15.1 MANAGEMENT BY GENERAL PARTNER.

                  (a) Except as otherwise expressly provided in Section 15.3 of
         this Agreement, all management powers over the business and affairs of
         the Partnership shall be exclusively vested in the General Partner, and
         the Limited Partners shall not have any right of control or management
         power over the business and affairs of the Partnership. The General
         Partner may, from time to time, designate one or more individuals as
         Partnership officers to carry out the day to day operations of the
         Partnership's activities. Such Partnership officers may include a
         president, vice-presidents, a secretary, a treasurer and such other
         officers as the General Partner shall designate.


                                      -18-
<PAGE>


                  (b) Whenever in this Agreement (including the Operating
         Procedures) the General Partner is permitted or required to make a
         decision (i) in its "discretion" or under a similar grant of authority
         or latitude, the General Partner shall be entitled to consider such
         interests and factors as it desires and may consider its own interests
         or (ii) in its "good faith" or under another express standard, the
         General Partner shall act under such express standard and shall not be
         subject to any other or different standards imposed by this Agreement
         or by law. The Limited Partners hereby agrees that any standard of care
         or duty imposed in this Agreement or under the Partnership Act or any
         other applicable law, rule or regulation shall be modified, waived or
         limited in each case as required to permit the General Partner to act
         under this Agreement and to make any decision pursuant to the authority
         prescribed in this Agreement so long as such action or decision was not
         performed or omitted with the intent to defraud or deliberately cause
         injury to the Limited Partners.

SECTION 15.2 NO LIMITED PARTNER PARTICIPATION. No Limited Partner shall
participate in the management or operations of or have any control over the
Partnership's business nor shall any Limited Partner have the power to
represent, act for, sign for or bind the General Partner or the Partnership. The
Limited Partners hereby consent to the exercise by the General Partner of the
powers conferred on it by this Agreement.

SECTION 15.3 ACTIONS REQUIRING LIMITED PARTNER CONSENT. Notwithstanding any
other provision of this Agreement to the contrary, without the consent of the
Limited Partners, the General Partner shall not have the authority to:

                  (a) Admit a person as a General Partner, except as provided in
         this Agreement;

                  (b) Admit a person as a Limited Partner, except as provided in
         this Agreement;

                  (c) Knowingly perform any act that would subject the Limited
         Partners to any liability as a general partner; or

                  (d) Sell or dispose of all or substantially all of the assets
         of the Partnership.

SECTION 15.4 THIRD PARTY RELIANCE. Notwithstanding any other provision of this
Agreement to the contrary, no lender, lessor, lessee, purchaser or any other
person dealing with the Partnership, shall be required to verify any
representation by the General Partner as to the extent of the interest in the
assets of the Partnership that the General Partner is entitled to encumber,
sell, lease or otherwise use or Partnership action that the General Partner is
empowered to authorize and conduct and such person shall be entitled to rely
exclusively on the representations of the General Partner as to its authority to
enter into such arrangements and shall be entitled to deal with the General
Partner as if it were the sole party in interest therein, both legally and
beneficially. Each Limited Partner and each assignee or successor hereby waives
any and all defenses or other remedies that may be available against such
lender, purchaser or other person to contest, negate or disaffirm any such
action of the General Partner. In no event shall any person dealing with the
General Partner or its representative with respect to any business or property
of the Partnership be obligated to


                                      -19-
<PAGE>


ascertain that the terms of this Agreement have been complied with, or to
inquire into the necessity or expediency of any act of the General Partner or
its representative; and every contract, agreement, deed, assignment, lease,
mortgage, security agreement, promissory note or other instrument or document
executed by the General Partner or its representative with respect to any
business or property of the Partnership shall be conclusive evidence in favor of
any and every person relying thereon or claiming thereunder that (i) at the time
of the execution and delivery thereof this Agreement was in full force and
effect, (ii) such instrument or document was duly executed in accordance with
the terms and provisions of this Agreement and is binding upon the Partnership,
and (iii) the General Partner or its representative was duly authorized and
empowered to execute and deliver any and every such instrument or document for
and on behalf of the Partnership.

SECTION 15.5 COMPENSATION AND REIMBURSEMENT. The General Partner shall receive
no compensation for its services hereunder but shall be reimbursed for any
costs, expenses, fees or other disbursements paid or incurred by it for or on
behalf of the Partnership. As more fully provided in the Operating Procedures,
the General Partner may pay with funds of the Partnership or incur for and on
behalf of the Partnership, costs, expenses, fees and other disbursements as it
in its sole discretion deems necessary for the ongoing operations of the
Partnership's business, activities and affairs.

SECTION 15.6 EXCULPATION. Neither the General Partner, its Affiliates, nor any
owner, member, manager, officer, director, partner, employee or agent of the
General Partner or its Affiliates, shall be liable, responsible or accountable
in damages or otherwise to the Partnership or any Partner for any action taken
or failure to act (EVEN IF SUCH ACTION OR FAILURE TO ACT CONSTITUTED THE
NEGLIGENCE OF SUCH PERSON) on behalf of the Partnership within the scope of the
authority conferred on the person described in this Agreement and the LLC
Agreement or by law unless such act or omission was performed or omitted
fraudulently or constituted gross negligence or willful misconduct. To the
extent that, at law or in equity, the General Partner, its Affiliates, or any
owner, manager, officer, director, partner, employee or agent thereof have
duties (including fiduciary duties) and liabilities relating to the Partnership
or to another Partner, the General Partner, its Affiliates, or any owner,
manager, officer, director, partner, employee or agent thereof acting under the
Agreement shall not be liable to the Partnership or to any such other Partner
for their reliance on the provisions of this Agreement. The provisions of this
Agreement, to the extent that they expand or restrict the duties and liabilities
of the General Partner, its Affiliates, or any owner, manager, officer,
director, partner, employee or agent thereof otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties and liabilities
of the General Partner, its Affiliates, or any owner, officer, director,
partner, employee or agent thereof.

SECTION 15.7 INDEMNIFICATION.

                  (a) TO THE FULLEST EXTENT PERMITTED BY LAW, THE GENERAL
         PARTNER, ITS AFFILIATES, THEIR RESPECTIVE OFFICERS, MANAGERS,
         DIRECTORS, PARTNERS, MEMBERS, EMPLOYEES AND AGENTS OR ANY PERSON
         PERFORMING A SIMILAR FUNCTION (INDIVIDUALLY, AN "INDEMNITEE") SHALL BE
         INDEMNIFIED AND HELD HARMLESS BY THE PARTNERSHIP FROM AND AGAINST ANY
         AND ALL LOSSES, CLAIMS, DAMAGES, JUDGMENTS, LIABILITIES, OBLIGATIONS,
         PENALTIES, SETTLEMENTS AND REASONABLE EXPENSES (INCLUDING LEGAL FEES)
         ARISING FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS, SUITS OR
         PROCEEDINGS,


                                      -20-
<PAGE>



         CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE, IN WHICH THE
         INDEMNITEE MAY BE INVOLVED, OR THREATENED TO BE INVOLVED, AS A PARTY OR
         OTHERWISE, BY REASON OF ITS STATUS AS (X) THE GENERAL PARTNER OR AN
         AFFILIATE THEREOF, OR (Y) AN OFFICER, MANAGER, DIRECTOR, PARTNER,
         EMPLOYEE OR AGENT OF THE GENERAL PARTNER OR AN AFFILIATE THEREOF,
         REGARDLESS OF WHETHER THE INDEMNITEE CONTINUES TO BE THE GENERAL
         PARTNER OR AN AFFILIATE OR AN OFFICER, MANAGER, DIRECTOR, EMPLOYEE OR
         AGENT OF THE GENERAL PARTNER OR AN AFFILIATE THEREOF AT THE TIME ANY
         SUCH LIABILITY OR EXPENSE IS PAID OR INCURRED, UNLESS THE ACT OR
         FAILURE TO ACT GIVING RISE TO INDEMNITY HEREUNDER CONSTITUTED FRAUD,
         GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

                  (b) The Partnership through the General Partner may purchase
         and maintain insurance on behalf of the General Partner and such other
         persons as the General Partner shall determine against any liability
         that may be asserted against or expense that may be incurred by such
         person in connection with the Partnership's activities, regardless of
         whether the Partnership would have the power to indemnify such person
         against such liability under the provisions of this Partnership
         Agreement.

                  (c) Expenses incurred by any Indemnitee in defending any claim
         with respect to which such Indemnitee may be entitled to
         indemnification by the Partnership hereunder (including without
         limitation reasonable attorneys' fees and disbursements) shall, to the
         maximum extent permitted by law, be advanced by the Partnership prior
         to the final disposition of such claim, upon receipt of a written
         undertaking by or on behalf of such Indemnitee to repay the advanced
         amount of such expenses unless it is determined ultimately that the
         Indemnitee is entitled to indemnification by the Partnership under
         Section 15.7(a).

                  (d) The indemnification provided in this Section 15.7 is for
         the benefit of the Indemnitees and shall not be deemed to create any
         right to indemnification for any other persons.

SECTION 15.8 OTHER ACTIVITIES; NONCOMPETITION.

                  (a) Each Limited Partner agrees that, for a period beginning
         on the date of this Agreement and ending on the earlier to occur of (i)
         the termination of this Agreement for whatever reason, or (ii) the
         disposition, directly or indirectly, by such Limited Partner,
         respectively (or, to the extent such interest has been transferred to
         an Affiliate of such Partner as permitted hereby, by such Affiliate),
         of its interest in the Partnership to a person that is not a
         wholly-owned, direct or indirect, subsidiary of such Limited Partner's
         Parent, no such Limited Partner or any of its Restricted Affiliates
         will engage or participate in, or carry on, directly or indirectly,
         either as proprietor, partner, member, director, stockholder, agent,
         consultant, advisor, trustee, Affiliate, or otherwise, whether or not
         for compensation, any business that competes with the Partnership
         Business in Chambers and Harris Counties, Texas (the "TERRITORY"). Each
         Limited Partner acknowledges and agrees that the foregoing
         noncompetition agreement is given in partial consideration for the
         other party's entering into this Agreement.


                                      -21-
<PAGE>


                  (b) Each of the Limited Partners or its Affiliates have,
         pursuant to Storage Agreements, leased or obtained the right to use
         storage capacity of the Partnership. Without limiting the generality of
         the provisions of Section 15.8(a) and in furtherance thereof, each of
         the Limited Partners agrees that it and its Affiliates will use such
         storage capacity solely for its own internal business operations and
         will not lease or sublease such storage capacity to third parties, and
         will direct to the Partnership any such third party seeking access to
         the Partnership's storage facility so that such additional business
         shall be for the benefit of the Partnership. The foregoing shall not be
         interpreted to prohibit or restrict the current practices of the TE
         Partner with respect to such storage capacity. Additionally, except as
         otherwise herein specifically provided, the Limited Partners agree to
         act in good faith with respect to each other and the Partnership
         Business to maximize the returns from such business throughout the term
         of the Partnership.

                  (c) In the event either Limited Partner (the "FIRST PARTY") or
         any of its Restricted Affiliates desires to pursue a business
         opportunity that will compete with the Partnership Business in the
         Territory as prohibited by Section 15.8(a) ("COMPETING BUSINESS
         TRANSACTION"), such Limited Partner shall be obligated to promptly
         bring such Competing Business Transaction to the attention of the other
         Limited Partner (the "SECOND PARTY"), to fully disclose all details
         regarding the proposed opportunity (subject to the execution of
         appropriate confidentiality undertakings), and to offer such business
         opportunity to become part of the Partnership Business. The Limited
         Partners shall negotiate in good faith for a period of 45 days (unless
         the business opportunity dictates a shorter period of time, in which
         event, for such shorter time period as will avoid the loss of such
         opportunity) to bring such Competing Business Transaction into the
         Partnership Business, either by contribution or purchase. Should the
         Limited Partners be unable to agree within such 45-day period on the
         terms and provisions for incorporating the Competing Business
         Transaction into the Partnership Business and the First Party or its
         Restricted Affiliate, as may be the case, wishes to pursue the
         Competing Business Transaction rather than continue with the
         Partnership Business and the transactions contemplated by this
         Agreement, subject to the provisions of Section 15.8(e) below, either
         Limited Partner may invoke the special buy-out provisions of Section
         23.7 without first complying with Section 23.1. The First Party agrees
         to give written notice within one Business Day of the consummation of
         such transaction.

                  (d) In the event the First Party or any of its Restricted
         Affiliates desires to pursue a Competing Business Transaction which
         cannot become a part of the Partnership Business for any reason other
         than the failure of the Second Party to consent to such transaction,
         and the First Party or its Restricted Affiliate, as may be the case,
         elects to pursue such Competing Business Transaction rather than
         continue with the Partnership Business, the First Party shall give
         written notice of such election to the Second Party and either Party
         may invoke the special buy-out provisions of Section 23.7 without first
         complying with Section 23.1. The First Party agrees to give written
         notice within one Business Day of the consummation of such transaction.


                                      -22-

<PAGE>


                  (e) Notwithstanding any other provision of this Agreement, the
         Second Party may waive the non-competition provision of this Section
         15.8 as it applies to any Competing Business Transaction offered by the
         First Party under Section 15.8(c). In such event, (i) the First Party
         may participate in such Competing Business Transaction without being in
         violation of this Agreement; (ii) the Second Party thereby waives any
         right to participate in, or to benefit from, such transaction; and
         (iii) neither Limited Partner shall be entitled to invoke the special
         buy-out provisions of Section 23.7 as a result of such transaction. Any
         such waiver shall apply only to the specific Competing Business
         Transaction being presented and shall not be construed as applicable to
         any other Competing Business Transaction.

                  (f) Notwithstanding the foregoing or any other provision of
         this Agreement:

                           (i) Neither Limited Partner nor any of its Affiliates
                  shall be prohibited from conducting business activities or
                  operations outside the Territory of a similar nature as are
                  conducted by such Limited Partner or Affiliate as of the date
                  hereof; or

                           (ii) Neither Limited Partner nor any of its
                  Affiliates shall be prohibited from constructing and operating
                  other pipelines to and from or through the Territory so long
                  as they do not compete with the pipelines that comprise a part
                  of the Partnership's assets as of the date hereof,

                           (iii) Neither Limited Partner nor any of its
                  Affiliates shall be prohibited from operating pipelines to,
                  from or through the Territory which are currently operated by
                  such persons, including the servicing of persons who are
                  customers of the Partnership, or from expanding, improving or
                  otherwise modifying such pipelines, or

                           (iv) Neither Limited Partner, nor any of its
                  Affiliates, has any obligation or duty to first offer to the
                  Partnership new business ideas that are outside the scope of
                  the Partnership Business.

                  (g) Each Limited Partner acknowledges that the covenant
         provided in this Section 15.8 is manifestly reasonable on its face and
         is no more restrictive than is required for the protection of the
         Partnership, including the interest of the other Limited Partner and
         the Partnership. In the event that the provisions of this Section 15.8
         should ever be deemed to exceed the time and geographic limitations
         permitted by applicable law, then such provisions shall be reformed to
         the maximum time or geographic limitations permitted by applicable law.

                  (h) It is specifically understood and agreed that any breach
         of the provisions of this Section 15.8 hereof is likely to result in
         irreparable harm to the Partnership and that an action at law for
         damages alone will be an inadequate remedy for such breach, and that
         the Partnership would suffer irreparable harm in the event either
         Limited Partner or its Restricted Affiliates fail to comply with its
         obligations hereunder. Therefore, in addition to any other remedy that
         may be available to it, the other Limited Partner or the Partnership
         shall be


                                      -23-
<PAGE>


         entitled to enforce the specific performance of Section 15.8 on the
         breaching Limited Partner and its Restricted Affiliates and to seek
         both temporary and permanent injunctive relief (to the extent permitted
         by law) without the necessity of proving actual damages, and such other
         relief as the court may allow.

                                   ARTICLE XVI

                        TRANSFER OF INTERESTS BY PARTNERS

SECTION 16.1 RESTRICTIONS ON TRANSFER. No Partner shall have the right to
Dispose of its interest in the Partnership, or any portion thereof without (a)
complying with the provisions of this Article XVI, (b) Disposing of its entire
Partnership Interest to a single purchaser or transferee, and (c) simultaneously
Disposing of its and any Affiliate's entire membership interest in the General
Partner. Any attempted transfer or assignment of any interest in the Partnership
in violation of the provisions of this Article XVI shall be void and of no force
and effect.

SECTION 16.2 TRANSFERS TO AFFILIATES. A Limited Partner may Dispose of all of
its Partnership Interest to an Affiliate of such Limited Partner provided that
such purchaser or transferee, prior to such Disposition, becomes a party to this
Agreement and agrees to be bound by all applicable terms and conditions
including this Article XVI.

SECTION 16.3 RIGHT OF FIRST REFUSAL. If a Limited Partner ("OFFEROR") desires to
Dispose of its Partnership Interest (other than a sale or other transfer of its
Partnership Interest to an Affiliate or a Change of Partner Control), such
Disposition may be made only by a sale of all of its entire Partnership Interest
and its and any Affiliate's entire membership interest in the General Partner
(collectively, the "INTEREST") for cash (or cash equivalent) and only if the
Offeror receives with respect thereto a bona fide binding written proposal for
the acquisition of such Interest (an "ACQUISITION PROPOSAL"), and then only in
compliance with the following procedures:

                  (a) Upon receipt of an Acquisition Proposal, the Offeror shall
         offer, by written notice (the "OFFER") to the other Limited Partner
         (the "OFFEREE"), to sell the Interest to the Offeree or Affiliates
         thereof on the terms (including price) specified in the Acquisition
         Proposal pursuant to the terms of this Section 16.3. Such Offer shall
         contain a description of and a copy of the Acquisition Proposal subject
         to appropriate confidentiality provisions. In addition, the Offeror
         shall provide to the Offeree all other information with respect to the
         Acquisition Proposal and the proposed transferee reasonably requested
         by the Offeree in order for it to evaluate the Acquisition Proposal, to
         verify the bona fide nature thereof and to evaluate the effect of
         having the person making such Acquisition Proposal as a Partner in the
         Partnership.

                  (b) The Offeree shall have the right, to be exercised by
         notice (the "ACCEPTANCE") from the Offeree to the Offeror on or before
         the 30th day following receipt of the Offer (the "OFFER PERIOD"), to
         elect to purchase all (but not less than all) of the Interest pursuant
         to the terms of the Offer.


                                                       -24-
<PAGE>


                  (c) If the Offeree accepts the Offer, the closing of the
         acquisition of the Interest shall be consummated on or before the 60th
         day after the Offeror receives the Acceptance but effective at the end
         of the calendar month occurring on or immediately prior to such
         closing. The acquisition shall be consummated at a closing held at the
         principal offices of the Partnership (unless otherwise agreed by the
         purchaser of the Partnership Interest and the Offeror), at which time
         the purchaser shall deliver to the Offeror the purchase price (in the
         form of immediately available funds), and the Offeror shall deliver to
         the purchaser such transfer documentation reasonably acceptable to the
         purchaser as shall be required to evidence the transfer of such
         Interest free and clear of all liens and encumbrances, except those
         created under this Agreement.

                  (d) If the Offeree does not accept the Offer, the Offeror
         shall be permitted for a period of 180 days after expiration of the
         Offer Period to sell all (but not less than all) of the Interest on
         terms not more favorable to such transferee than the terms specified in
         the Acquisition Proposal and at a price that is not less than the price
         specified in the Acquisition Proposal.

SECTION 16.4 CHANGE OF PARTNER CONTROL. If a Limited Partner or an Affiliate
desires to Dispose of its Partnership Interest by a Change of Partner Control or
undergoes an involuntary change of Partner Control, the other Limited Partner
("OPTION PARTNER") or its designated Affiliate shall have an option to acquire
the Partnership Interest of the other Limited Partner and it or its Affiliate's
membership interest in the General Partner (collectively, the "OPTION INTEREST")
in accordance with the following procedures:

                  (a) If the Partner undergoing the Change of Partner Control is
         the TE Partner, the terms and provisions of Section 16.3 shall apply.

                  (b) If the Partner undergoing the Change of Partner Control is
         the LD Partner, the option price payable shall be the greater of (i)
         50% of the Net EBITDA for the 12-month period preceding the Notice
         Month (as hereinafter defined) times ten (10.0) and (ii) the LD
         Partner's capital account in the Partnership and in the General Partner
         (or, if applicable, the capital account of its Affiliate in the General
         Partner), in both cases according to GAAP (collectively, the "LD
         COMBINED CAPITAL ACCOUNT BALANCE"). "Notice Month" means the month
         during which the LD Change of Partner Control occurs.

                  (c) The provisions of Sections 16.3(a), (b) and (c), with
         respect to notice, the offer period for the Option Interests,
         acceptance of the offer by the Option Partner and the closing of the
         acquisition shall apply.

SECTION 16.5 PROCEDURES. Any Partner who desires to transfer its Partnership
Interest shall arrange for any permitted transferee to be bound by the
provisions of this Agreement, as it may then be amended, by having such
transferee execute two counterparts of an instrument of assignment satisfactory
in form and substance to the General Partner and by delivering the same to the
General Partner together with any such other information that may be required by
counsel to the Partnership to determine whether the proposed transfer violates
applicable federal or state securities or other laws


                                      -25-
<PAGE>


or regulations. If and when the consent of the other Partners to such assignment
and the substitution of such transferee hereof is secured and the other
requirements of this Article XVI are satisfied, the transferee shall become a
substituted Partner as to the Partnership Interest thus transferred effective as
of the first day of the calendar month during which the General Partner actually
receives the aforesaid instrument of assignment executed by both the transferor
and transferee. The transferee shall be required to pay any and all reasonable
filing and recording fees, legal fees, accounting fees, and other charges and
fees incurred by the Partnership and its counsel as a result of such transfer.

SECTION 16.6 PURCHASE AND SALE IN THE EVENT OF MAXIMUM LOSS BEING EXCEEDED.

                  (a) In the event that the Maximum Loss is exceeded and the
         provisions of Section 8.1(c)(ii) apply, then the TE Partner shall
         acquire the Partnership Interest of the LD Partner and the membership
         interest held by the LD Partner or its Affiliate in the General Partner
         for an amount equal to the LD Combined Capital Account Balance, less
         the product of (i) the sum of the LD Partner's Unrecovered Loss Balance
         and TE Partner's Unrecovered Loss Balance, times (ii) the LD Combined
         Capital Account Balance divided by the total of all GAAP capital
         account balances in the Partnership and the General Partner.

                  (b) The closing of the purchase and sale contemplated
         hereunder shall be consummated within 60 days after the provisions of
         Section 8.1(c)(ii) first become applicable at the principal office of
         the Partnership (unless otherwise mutually agreed by the Limited
         Partners), at which time the purchase price (in the form of immediately
         available funds) shall be delivered to the sellers and the sellers
         shall deliver to the buyer or its designee such transfer documentation
         reasonably acceptable to the buyer and the sellers as shall be required
         to evidence the transfer of such Partnership Interest and membership
         interest in the General Partner, free and clear of all liens and
         encumbrances, except those created under this Agreement.

SECTION 16.7 COMPLIANCE WITH SECURITIES LAWS. All Partners acknowledge that the
Partnership interests have not been registered under (i) the Securities Act of
1933, as amended (the "1933 ACT"), in reliance on the exemptions afforded by
Section 4(2) of the 1933 Act, or (ii) applicable state securities laws in
reliance on exemptions under such laws. Therefore, to preserve said exemptions
and notwithstanding anything contained herein to the contrary, the Partners
hereby agree that interests of the Partners shall be nontransferable and
nonassignable, except in compliance with the registration provisions of the 1933
Act and the Partnership Act, or an exemption or exemptions therefrom, and any
attempted or purported transfer or assignment in violation of the foregoing
shall be void and of no effect. Accordingly, as an additional condition
precedent to any assignment or other transfer of any interest in the
Partnership, the General Partner may require an opinion of counsel satisfactory
to the General Partner that such assignment or transfer will be made in
compliance with the registration provisions of the 1933 Act and applicable state
securities laws or exemption(s) therefrom, and such transferor or assignor shall
be responsible for paying said counsel's fee for the opinion.


                                      -26-
<PAGE>


                                  ARTICLE XVII

                         DISSOLUTION OF THE PARTNERSHIP

         The happening of any one of the following events shall work an
immediate dissolution of the Partnership:

                  (a) An event of withdrawal of the General Partner as defined
         in Section 17-402 of the Partnership Act except that an event described
         in Subsections (a)(4) and (a)(5) of Section 17-402 shall not be an
         event of withdrawal unless within 90 days of such event of withdrawal,
         the remaining Partners agree in writing to continue the business of the
         Partnership and appoint, effective as of the date of withdrawal, a
         successor General Partner of the Partnership who acquires, or enters
         into an agreement to acquire, the Partnership Interest of the prior
         General Partner during such 90-day period;

                  (b) The receipt by the Partnership of the final payment due on
         the sales price of all or substantially all the assets of the
         Partnership or the Partnership's business following the Partnership's
         sale thereof;

                  (c) The agreement by all of the Partners to dissolve;

                  (d) At the time there are no Limited Partners; and

                  (e) Entry of a decree of judicial dissolution under Section
         17-802 of the Partnership Act.

Any withdrawal of the General Partner under Section 17-602 of the Partnership
Act shall be effective on the date specified in a written notice of withdrawal
given by the General Partner to the Limited Partners; provided, however, that
the effective date shall be not less than 60 days following the date of delivery
of such notice.

                                  ARTICLE XVIII

                  WINDING UP AND TERMINATION OF THE PARTNERSHIP

SECTION 18.1 LIQUIDATOR. If the Partnership is dissolved for any reason, a
liquidator (the "LIQUIDATOR") shall commence to wind up the affairs of the
Partnership and to liquidate and sell its assets. The General Partner shall
serve as the Liquidator unless the dissolution occurred as a result of an event
of withdrawal of the General Partner, in which case the person designated by the
Limited Partners shall serve as the Liquidator. The Liquidator shall have full
right and discretion to determine the time, manner and terms of sale or sales of
Partnership property pursuant to such liquidation having due regard to the
activity and condition of the relevant market and general financial and economic
conditions. The Liquidator appointed in the manner provided herein shall have
and may exercise, without further authorization or consent of any of the parties
hereto or their legal representatives or successors in interest, all of the
powers conferred upon the General Partner


                                      -27-
<PAGE>


under the terms of this Agreement (but subject to all of the applicable
limitations, contractual and otherwise, upon the exercise of such powers) to the
extent necessary or desirable in the good faith judgment of the Liquidator to
carry out the duties and functions of the Liquidator hereunder for and during
such period of time, not to exceed two (2) years after the date of dissolution
of the Partnership, as shall be reasonably required in the good faith judgment
of the Liquidator to complete the liquidation and dissolution of the Partnership
as provided for herein, including, without limitation, the following specific
powers:

                  (a) The power to continue to manage and operate any business
         of the Partnership during the period of such liquidation or dissolution
         proceedings, excluding, however, the power to make and enter into
         contracts which may extend beyond the period of liquidation.

                  (b) The power to make sales and incident thereto to make
         deeds, bills of sale, assignments and transfers of assets and
         properties of the Partnership; provided, that the Liquidator may not
         impose personal liability upon any of the Partners under any such
         instrument.

                  (c) The power to borrow funds as may, in the good faith
         judgment of the Liquidator, be reasonably required to pay debts and
         obligations of the Partnership or operating expenses, and to execute
         and/or grant deeds of trust, mortgages, security agreements, pledges
         and collateral assignments upon and encumbering any of the Partnership
         properties as security for repayment of such loans or as security for
         payment of any other indebtedness of the Partnership; provided, that
         the Liquidator shall not have the power to create any personal
         obligation on any of the Partners to repay such loans or indebtedness
         other than out of available proceeds of foreclosure or sale of the
         properties or assets as to which a lien or liens are granted as
         security for payment thereof.

                  (d) The power to settle, release, compromise or adjust any
         claims asserted to be owing by or to the Partnership, and the right to
         file, prosecute or defend lawsuits and legal proceedings in connection
         with any such matters.

SECTION 18.2 RESERVES. After making payment or provision for payment of all
debts and liabilities of the Partnership and all expenses of liquidation, the
Liquidator may set up, for a period not to exceed the aforesaid two (2) years,
such cash reserves as the Liquidator may deem reasonably necessary for any
contingent liabilities or obligations of the Partnership. Upon the satisfaction
or other discharge of such contingency, the amount of the reserves not retired,
if any, will be distributed in accordance with this Article XVIII.

SECTION 18.3 SALE OF ASSETS; DISTRIBUTION OF PROCEEDS. Upon the winding up and
termination of the business and affairs of the Partnership, its assets (other
than cash) shall be sold, its liabilities and obligations to creditors and all
expenses incurred in its liquidation shall be paid (either by payment or the
making of reasonable provision for payment). All items of Partnership income,
gain, loss or deduction shall be credited or charged to the Capital Accounts of
the Partners pro rata in accordance with their Sharing Ratios. Thereafter, the
net proceeds from such sales (after deducting all selling costs and expenses in
connection therewith), together with (at the expiration


                                      -28-
<PAGE>


of the two (2) year period referred to therein) the balance and reserve account
referred to in Section 18.2 above, shall be distributed among the Partners in
accordance with their respective positive balances in their Capital Accounts.

SECTION 18.4 FINAL ACCOUNTING. Within a reasonable time following the completion
of the liquidation of the Partnership's properties, the Liquidator shall supply
to each of the Partners a statement prepared by the Partnership's accountants
which shall set forth the assets and the liabilities of the Partnership as of
the date of complete liquidation, each Partner's pro rata portion of
distributions pursuant to Section 18.3, and the amount retained as reserves by
the Liquidator pursuant to Section 18.2.

SECTION 18.5 RECOURSE LIMITED TO ASSETS OF THE PARTNERSHIP. Each holder of an
interest in the Partnership shall look solely to the assets of the Partnership
for all distributions with respect to the Partnership and its Capital
Contribution thereto (including the return thereof) and share of profits or
losses thereof, and shall have no recourse therefor (upon dissolution or
otherwise) against the Partnership, the General Partner or the Liquidator. No
holder of an interest in the Partnership shall have any right to demand or
receive property other than cash upon dissolution and termination of the
Partnership.

SECTION 18.6 TERMINATION. Upon the completion of the liquidation of the
Partnership and the distribution of all Partnership funds, the Partnership shall
terminate and the Liquidator shall (and is hereby given the power and authority
to) execute, acknowledge, swear to and record all documents required to
effectuate the dissolution and termination of the Partnership. No Partner shall
be required to restore any deficit balance existing in its Capital Account upon
the liquidation and termination of the Partnership.

                                   ARTICLE XIX

                                     NOTICES

         To be effective, all notices and demands under this Agreement must be
in writing and must be given (i) by depositing same in the United States mail,
postage prepaid, certified or registered, return receipt requested, (ii) by
telecopy with receipt confirmed by return telecopy or (iii) by delivering same
in person and receiving a signed receipt therefor. For purposes of notice, the
addresses of the Partners or their respective assigns shall be as set forth on
the signature pages hereof. Notices mailed in accordance with the foregoing
shall be deemed to have been given and made upon receipt. Any Partner or his
assignee may designate a different address to which notices or demands shall
thereafter be directed by written notice given in the manner hereinabove
required and directed to the Partnership at its principal office as hereinabove
set forth.


                                      -29-

<PAGE>

                                   ARTICLE XX

                   AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT

       This Agreement may be modified or amended from time to time by the
written agreement of the General Partner and each of the Limited Partners.


                                   ARTICLE XXI

                                POWER OF ATTORNEY

         Each Limited Partner and any permitted assignee or transferee of its
interest hereunder, does hereby irrevocably constitute and appoint the General
Partner, its true and lawful attorney in fact and agent, to execute,
acknowledge, verify, swear to, deliver, record and file, in such Limited
Partner's or assignee's name, place and stead, all instruments, documents and
certificates which may from time to time be required to effectuate and implement
the terms and provisions of this Agreement including, without limitation, the
power and authority to execute, verify, swear to, acknowledge, deliver, record
and file (i) all certificates and other instruments which the General Partner
deems appropriate to form, qualify or continue the Partnership as a limited
partnership in the State of Delaware and in such other states as the General
Partner deems appropriate, (ii) all instruments which the General Partner deems
appropriate to reflect any amendment to this Agreement, or modification of the
Partnership, made in accordance with the terms of this Agreement, (iii) all
conveyances and other instruments which the General Partner deems appropriate to
reflect the dissolution and termination of the Partnership pursuant to the terms
of this Agreement, including any writing required by the Partnership Act, (iv)
all instruments relating to the admission of any additional or substituted
Limited Partner, (v) a certificate of assumed name and such other certificates
and instruments as may be necessary under any fictitious or assumed name
statutes from time to time in effect in jurisdictions in which the Partnership
conducts or plans to conduct business and (vi) all other instruments that may be
required or permitted by law to be filed on behalf of the Partnership and that
are not inconsistent with this Agreement. The power of attorney granted herein
shall be deemed to be coupled with an interest, shall be irrevocable, shall
survive and not be affected by the subsequent death, dissolution, bankruptcy,
incompetency or legal disability of a Limited Partner and shall extend to such
Limited Partner's successors and assigns; and may be exercised by executing such
instrument acting as attorney in fact for the Limited Partner or in such other
manner as said agent and attorney in fact may deem appropriate. Each Limited
Partner hereby agrees to be bound by any action taken by the General Partner
acting pursuant to such power of attorney, and each Limited Partner and assigns
hereby waives any and all defenses which may be available to contest, negate or
disaffirm any action of the General Partner taken under such power of attorney.

                                  ARTICLE XXII

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         The General Partner and each Limited Partner each hereby respectively
represent and warrant to the others that (i) it is duly organized, validly
existing and in good standing under the jurisdiction


                                      -30-

<PAGE>

of its organization, with full power and authority to enter into and perform its
obligations under this Agreement; (ii) it has validly executed this Agreement,
and upon delivery, this Agreement shall be a binding obligation of such party,
enforceable against such party in accordance with its terms; and (iii) its entry
into this Agreement and the performance of its obligations hereunder will not
require the approval of any governmental body or regulatory authority and will
not violate, conflict with or cause a default under, any of its organizational
documents, any contractual covenant or restriction by which such party is bound,
or any applicable law, regulation, rule, ordinance, order, judgment or decree.


                                  ARTICLE XXIII

                                    DISPUTES

SECTION 23.1 NEGOTIATION. Except for the injunctive remedies provided by Section
15.8, in the event of any claims, counterclaims, demands, causes of action,
disputes, controversies, and other matters in question arising out of or
relating to this Agreement, any provision hereof, the alleged breach thereof, or
in any way relating to the subject matter of this Agreement or the relationship
between the Partners created by this Agreement, involving the Limited Partners
and/or their respective representatives and/or Affiliates (all of which are
referred to herein as "DISPUTES"), the Limited Partners shall promptly seek to
resolve any such Dispute by negotiations between senior executives of the
Limited Partners who have authority to settle the Dispute. When a Limited
Partner believes there is a Dispute under this Agreement, that Limited Partner
will give the other written notice of the Dispute. Within thirty (30) days after
receipt of such notice, the receiving Limited Partner shall submit to the other
a written response. Both the notice and response shall include (i) a statement
of each Limited Partner's position and a summary of the evidence and arguments
supporting its position, and (ii) the name, title, fax number, and telephone
number of the executive who will represent that Limited Partner. In the event
the Dispute involves a claim arising out of the actions of any person or entity
not a signatory to this Agreement, the receiving Limited Partner shall have such
additional time as necessary, not to exceed an additional thirty (30) days, to
investigate the Dispute before submitting a written response. The executives
shall meet at a mutually acceptable time and place within fifteen (15) days
after the date of the response and thereafter as often as they reasonably deem
necessary to exchange relevant information and to attempt to resolve the
Dispute. If one of the executives is an attorney or intends to be accompanied at
a meeting by an attorney, the other executive shall be given at least five (5)
days' notice of such intention and may also be accompanied by an attorney. All
negotiations and communications pursuant to this Article XXIII shall be treated
and maintained by the Limited Partners as confidential information and shall be
treated as compromise and settlement negotiations for the purposes of federal
and state rules of evidence.

SECTION 23.2 FAILURE TO RESOLVE. If the Dispute has not been resolved within
sixty (60) days after the date of the response given pursuant to Section 23.1
above, or such additional time, if any, that the Limited Partners mutually agree
to in writing, or if the Limited Partner receiving such notice denies the
applicability of the provisions of Section 23.1 or otherwise refuses to
participate under the provisions of Section 23.1, either Limited Partner may
initiate arbitration pursuant to the


                                      -31-
<PAGE>


provisions of Section 23.3 below; provided, however, that either Partner may
reject arbitration and trigger the special Buy-Out Option of Section 23.7, all
as provided below.

SECTION 23.3 ARBITRATION. Any Disputes not settled pursuant to the foregoing
provisions shall be resolved as follows:

                  (a) Any Limited Partner desiring to initiate arbitration in
         connection with any Dispute shall send, via certified mail, written
         notice of demand of arbitration to the other Limited Partner and the
         name of the arbitrator appointed by the Limited Partner demanding
         arbitration together with a statement of the matter in controversy.

                  (b) Within fifteen (15) days after receipt of such demand, the
         receiving Limited Partner shall either (i) agree to submit the Dispute
         to arbitration and name its arbitrator or (ii) refuse to submit the
         Dispute to arbitration, in which case the provisions of this Section
         23.3 shall not be applicable to such Dispute. If the receiving Limited
         Partner fails or refuses to name its arbitrator within such 15-day
         period, it shall be deemed to have agreed to submit the Dispute to
         arbitration and the second arbitrator shall be appointed, upon request
         of the party demanding arbitration, by the Chief U.S. District Court
         Judge for the Southern District of Texas or such other person
         designated by such judge. The two arbitrators so selected shall within
         fifteen (15) days after their designation select a third arbitrator;
         provided, however, that if the two arbitrators are not able to agree on
         a third arbitrator within such 15-day period, either Limited Partner
         may request the Chief U.S. District Court Judge for the Southern
         District of Texas or such other person designated by such judge to
         select the third arbitrator as soon as possible. In the event the Judge
         declines to appoint an arbitrator, appointment shall be made, upon
         application of either Limited Partner, pursuant to the Commercial
         Arbitration Rules of the American Arbitration Association. If any
         arbitrator refuses or fails to fulfill his or her duties hereunder,
         such arbitrator shall be replaced by the Limited Partner which selected
         such arbitrator (or if such arbitrator was selected by another person,
         through the procedure which such arbitrator was selected) pursuant to
         the foregoing provisions.

                  (c) Each arbitrator selected by the Limited Partners shall be
         a certified public accountant or licensed attorney with at least
         fifteen (15) years of oil and gas experience as a certified public
         accountant and/or practicing attorney. The arbitrators selected by the
         Limited Partners are not required to be neutral, but the third
         arbitrator shall be neutral and shall be a retired judge.

                  (d) The Limited Partners hereto hereby request and consent to
         the three (3) arbitrators conducting a hearing in Houston, Texas no
         later than sixty (60) days following their selection or thirty (30)
         days after all prehearing discovery has been completed, whichever is
         later, at which the Limited Partners shall present such evidence and
         witnesses as they may choose, with or without counsel.

                  (e) Arbitration shall be conducted in accordance with the
         Commercial Arbitration Rules and procedures of the American Arbitration
         Association.


                                                       -32-
<PAGE>


                  (f) The Federal Rules of Civil Procedure, as modified or
         supplemented by the local rules of civil procedure for the U.S.
         District Court for the Southern District of Texas, shall apply in the
         arbitration. The Limited Partners shall make their witnesses available
         in a timely manner for discovery pursuant to such rules. If a Limited
         Partner fails to comply with this discovery agreement within the time
         established by the arbitrators, after resolving any discovery disputes,
         the arbitrators may take such failure to comply into consideration in
         reaching their decision. All discovery disputes shall be resolved by
         the arbitrators pursuant to the procedures set forth in the Federal
         Rules of Civil Procedure.

                  (g) Adherence to formal rules of evidence shall not be
         required. The arbitrators shall consider any evidence and testimony
         that they determine to be relevant.

                  (h) The Limited Partners hereto hereby request that the
         arbitrators render their decision within thirty (30) calendar days
         following conclusion of the hearing.

                  (i) Any decision by a majority of the arbitration panel shall
         be final, binding and non-appealable. Any such decision may be filed in
         any court of competent jurisdiction and may be enforced by either
         Limited Partner as a final judgment in such court. There shall be no
         grounds for appeal of any arbitration award hereunder.

                  (j) The defenses of statute of limitations and laches shall be
         tolled from and after the date a Party gives the other Limited Partner
         written notice of a Dispute as provided in Section 23.1 above until
         such time as the Dispute has been resolved pursuant to Section 23.1, or
         an arbitration award has been entered pursuant to this Section 23.3.

                  (k) The Partners hereby waive any claim to, and the
         arbitrators are especially divested of any power to award, special,
         consequential, punitive, exemplary, incidental, indirect costs,
         expenses, damages or claims or statutory damages in excess of
         compensatory damages, or any form of damages in excess of compensatory
         damages.

SECTION 23.4 RECOVERY OF COSTS AND ATTORNEYS' FEES. In the event arbitration
(or, despite the Limited Partners' agreement to resolve the Disputes through
binding arbitration, litigation) arising out of this Agreement is initiated by
either Limited Partner, the prevailing Limited Partner, after the entry of a
final non-appealable order, shall be entitled to recover from the other party,
as a part of said order, all court costs, fees and expenses of such arbitration
(or litigation), including, without limitation, reasonable attorneys' fees.

SECTION 23.5 CHOICE OF FORUM. If, despite the Limited Partners' agreement to
submit any Disputes to binding arbitration, there are any court proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby, such proceedings shall be brought and tried in the federal or state
courts situated in the City of Houston, Texas.

SECTION 23.6 JURY WAIVERS. THE LIMITED PARTNERS HEREBY WAIVE ANY AND ALL RIGHTS
TO DEMAND A TRIAL BY JURY.


                                      -33-

<PAGE>

SECTION 23.7 SPECIAL BUY-OUT OPTIONS.

                  (a) Upon the failure of the Limited Partners to resolve or
         submit a Dispute to binding arbitration within seventy-five (75) days
         after the date of the response given pursuant to Section 23.1, either
         Limited Partner shall have the right (the "PUT/CALL RIGHT") for a
         period of 30 days following the expiration of such 75-day period (the
         "EXERCISE PERIOD"), to be exercised by written notice to the other
         Limited Partner within such applicable period, to cause a purchase and
         sale to the TE Partner of the Interest of the LD Partner and its
         Affiliate. Such purchase and sale shall be for cash at a purchase price
         equal to the greater of (i) 50% of the Net EBITDA for the Pricing
         Period ending with the month immediately preceding the month in which
         the written notice is given exercising the Put/Call Right times the
         Valuation Multiple and (ii) the LD Combined Capital Account Balance.

                  (b) If either Limited Partner timely exercises such Put/Call
         Right, the Limited Partners shall consult for the purpose of
         determining the Valuation Multiple and, on or before the 10th day after
         exercise of the Put/Call Right, the non-exercising Limited Partner
         shall select one of four entities proposed by the exercising Limited
         Partner, each of which such entities shall have at least ten years
         experience in valuing similar assets or businesses (the "VALUATION
         EXPERT") if required as contemplated below. If on or before the 30th
         day after exercise of the Put/Call Right, such Limited Partners have
         not reached agreement on the Valuation Multiple, each Limited Partner
         shall submit a proposed Valuation Multiple to the Valuation Expert,
         together with any supporting documentation such Limited Partners deems
         appropriate, on or before the 60th day after the exercise of the
         Put/Call Right. The Valuation Expert shall determine the Valuation
         Multiple by selection of one of the proposed Valuation Multiples
         submitted by the Limited Partners (and shall have no authority beyond
         selection of one of such proposals) as promptly as possible (and in any
         event on or before the 30th day after submittal of the competing
         proposals). The cost of such Valuation Expert shall be paid in equal
         portions by the Limited Partners.

                  (c) The purchase price shall be the amount calculated under
         Section 23.7(a) unless the Put/Call Right has been triggered by either
         Partner pursuant to Section 15.8(c) or (d), in which case the purchase
         price to be paid by the TE Partner shall be the amount computed as
         follows:

                           (i) If the TE Partner is the First Party, the
                  purchase price shall be 115% of the amount calculated under
                  Section 23.7(a); and

                           (ii) if the LD Partner is the First Party, the
                  purchase price shall be 85% of the amount calculated under
                  Section 23.7(a).

                  (d) The closing of the acquisition of the Interests
         contemplated hereunder shall be consummated on or before the 60th day
         after the determination of the Valuation Multiple but effective at the
         end of the calendar month occurring on or immediately prior to such
         closing. The acquisition shall be consummated at a closing held at the
         principal offices of


                                      -34-
<PAGE>


         the Partnership (unless otherwise mutually agreed by the Limited
         Partners), at which time the purchase price (in the form of immediately
         available funds) shall be delivered to the sellers and the sellers
         shall deliver to the buyer such transfer documentation reasonably
         acceptable to the buyer and the seller as shall be required to evidence
         the transfer of such Partnership Interest and membership interest in
         the General Partner, free and clear of all liens and encumbrances,
         except those created under this Agreement.

SECTION 23.8 DISPUTE UNDER BOTH THIS AGREEMENT AND LLC AGREEMENT.
Notwithstanding anything herein to the contrary, it is the intention of the
Partners that any Dispute hereunder that is also subject to the terms and
provisions of the LLC Agreement shall be handled under one unified proceeding
under and pursuant to the terms and provisions of this Agreement and that no
Partner shall be entitled to seek a second resolution of the same Dispute under
the Terms and Provisions of this Article XXIII.

                                  ARTICLE XXIV

                                  MISCELLANEOUS

SECTION 24.1 NO RIGHT OF PARTITION. The Partners agree that the Partnership
properties are not and will not be suitable for partition. Accordingly, each of
the Partners hereby irrevocably waives any and all rights that he may have to
maintain any action for partition of any of the Partnership property.

SECTION 24.2 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement and the additional
documents and agreements referred to herein or contemplated hereunder constitute
the entire agreement among the parties. It supersedes any prior agreement or
understandings among them, and it may not be modified or amended in any manner
other than as set forth herein.

SECTION 24.3 GOVERNING LAW. This Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware.

SECTION 24.4 BINDING EFFECT. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the parties and
their legal representatives, heirs, administrators, executors, successors and
assigns.

SECTION 24.5 CONSTRUCTION OF AGREEMENT. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in the masculine, the feminine
or the neuter gender shall include the masculine, feminine and neuter. The term
"person" means any individual, corporation, partnership, trust or other entity.

SECTION 24.6 CAPTIONS. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof.


                                      -35-
<PAGE>


SECTION 24.7 EFFECT OF INVALID PROVISION. If any provision of this Agreement, or
the application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.

SECTION 24.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. It shall not be necessary for all
Partners to execute the same counterpart hereof.

SECTION 24.9 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

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


                                         GENERAL PARTNER:
Address:
                                         Mont Belvieu Venture, LLC
2929 Allen Parkway, Suite 3200
Houston, TX 77019
Telecopy: 713/759-3645                   By:
                                              ---------------------------------
                                         Its:
                                              ---------------------------------



                                         LIMITED PARTNERS:

                                         TE Products Pipeline Company, Limited
2929 Allen Parkway, Suite 3200           Partnership, by TEPPCO GP, Inc.,
Houston, TX 77019                        its general partner
Telecopy: 713/759-3645
                                         By:
                                              ---------------------------------
                                         Its:
                                              ---------------------------------


                                      -36-
<PAGE>

                                         Louis Dreyfus Energy Services L.P.
10 Westport Road
Wilton, CT 06897
Telecopy: 203/761-8119                   By:
                                              ---------------------------------
                                         Its:
                                              ---------------------------------


                                      -37-