<PAGE>   1
                                                                   EXHIBIT 10.14











                            ASSET PURCHASE AGREEMENT


                                     BETWEEN


                        DUKE ENERGY FIELD SERVICES, INC.


                                       AND


                              TEPPCO COLORADO, LLC










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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


                                                                                                               PAGE
<S>               <C>                                                                                            <C>
Article I
                                           Definitions and Construction.........................................  1
         1.1      DEFINED TERMS.................................................................................  1
         1.2      OTHER DEFINITIONAL PROVISIONS.................................................................  6
         1.3      HEADINGS......................................................................................  6
         1.4      OTHER TERMS...................................................................................  6

Article II
                                            Purchase and Sale of Assets.........................................  7
         2.1      PURCHASE AND SALE OF ASSETS...................................................................  7
         2.2      THERE IS NO SECTION 2.2 TO THIS AGREEMENT.....................................................  7
         2.3      PURCHASE PRICE................................................................................  7
         2.4      PRORATIONS OF EXPENSES AND CERTAIN PROPERTY TAXES.............................................  7
         2.5      TAXES AND RECORDING FEES......................................................................  8
         2.6      ALLOCATION OF PURCHASE PRICE..................................................................  8
         2.7      TITLE AND RISK OF LOSS........................................................................  9

Article III
                                               Retained Obligations.............................................  9

Article IV
                                          Closing Date and Effective Time.......................................  9

Article V
                                     Representations and Warranties of Seller................................... 10
         5.1      CORPORATE MATTERS............................................................................. 10
         5.2      VALIDITY OF AGREEMENT; NO CONFLICT............................................................ 10
         5.3      GOVERNMENTAL CONSENTS, APPROVALS AND AUTHORIZATIONS........................................... 11
         5.4      TITLE TO AND CONDITION OF PROPERTIES.......................................................... 11
         5.5      CONTRACTS AND COMMITMENTS..................................................................... 12
         5.6      OPERATING DATA AND INFORMATION................................................................ 14
         5.7      TAXES......................................................................................... 14
         5.8      NO VIOLATIONS OR LITIGATION................................................................... 14
         5.9      NO ADVERSE CHANGES OR EVENTS.................................................................. 14
         5.10     ENVIRONMENTAL MATTERS......................................................................... 15
         5.11     PRODUCT LIABILITY............................................................................. 16
         5.12     NO UNTRUE STATEMENTS.......................................................................... 16
         5.13     SELLER'S EMPLOYEE BENEFIT LIABILITIES......................................................... 16
         5.14     FINDER'S FEES................................................................................. 16
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<TABLE>

<S>               <C>                                                                                            <C>
Article VI
                                      Representations and Warranties of Buyer................................... 17
         6.1      CORPORATE MATTERS............................................................................. 17
         6.2      VALIDITY OF AGREEMENT; NO CONFLICT............................................................ 17
         6.3      FINDER'S FEE.................................................................................. 17

Article VII
                                               Conditions Precedent............................................. 17
         7.1      CONDITIONS TO OBLIGATIONS OF BUYER AT CLOSING................................................. 17
         7.2      CONDITIONS TO OBLIGATIONS OF SELLER AT CLOSING................................................ 18

Article VIII
                        HSR FILING; Access to Information by Buyer; Matters Pending Closing..................... 20
         8.1      HSR Filing.................................................................................... 20
         8.2      PRIOR TO CLOSING.............................................................................. 20
         8.3      PUBLIC ANNOUNCEMENTS.......................................................................... 20
         8.4      ACTIONS PENDING CLOSING....................................................................... 20

Article IX
                                             Noncompetition Agreement........................................... 22
         9.1      NONCOMPETITION COVENANT....................................................................... 22
         9.2      REASONABLENESS OF COVENANT.................................................................... 22
         9.3      INJUNCTIVE RELIEF............................................................................. 22

Article X
                                               Additional Agreements............................................ 22
         10.1     DELIVERY OF CORPORATE DOCUMENTS............................................................... 22
         10.2     FURTHER ASSURANCES............................................................................ 22
         10.3     COOPERATION AFTER CLOSING..................................................................... 23
         10.4     CONTINUATION OF OPERATIONS; RIGHT OF FIRST REFUSAL............................................ 24
         10.5     Additional Undertakings....................................................................... 25
         10.6     Identification of Buyer's Property............................................................ 25
         10.7     Interim Operations............................................................................ 25

Article XI
                                                  Indemnification............................................... 25
         11.1     SELLER'S INDEMNITY............................................................................ 25
         11.2     ENVIRONMENTAL INDEMNIFICATION................................................................. 25
         11.3     BUYER'S INDEMNITY............................................................................. 26
         11.4     PROCEDURE..................................................................................... 26
         11.5     INDEMNIFICATION THRESHOLD..................................................................... 28
         11.6     EXPRESS NEGLIGENCE............................................................................ 28
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<TABLE>

<S>               <C>                                                                                            <C>
Article XII
                                                    Termination................................................. 28
         12.1     Efforts to Satisfy Conditions................................................................. 28
         12.2     Termination................................................................................... 28
         12.3     LIABILITY UPON TERMINATION.................................................................... 28

Article XIII

NATURE OF STATEMENTS AND SURVIVAL
OF COVENANTS, REPRESENTATIONS,
WARRANTIES AND AGREEMENTS....................................................................................... 29

Article XIV
                                                    Expenses.................................................... 29

Article XV

                                                    Disputes ................................................... 29
         15.1     Negotiation................................................................................... 29
         15.2     Failure to Resolve............................................................................ 30
         15.3     Arbitration................................................................................... 30
         15.4     Recovery of Costs and Attorneys' Fees......................................................... 31
         15.5     Choice of Forum............................................................................... 31
         15.6     Jury Waivers.................................................................................. 31
         15.7     Limitation of Damages......................................................................... 31
         15.8     Governing Law................................................................................. 32
         15.9     .............................................................................................. 32

Article XVI
                                                    General Provisions.......................................... 32
         16.1     FURTHER ASSURANCES............................................................................ 32
         16.2     NOTICES....................................................................................... 32
         16.3     GOVERNING LAW................................................................................. 33
         16.4     ENTIRE AGREEMENT.............................................................................. 33
         16.5     ASSIGNMENT.................................................................................... 34
         16.6     SUCCESSORS.................................................................................... 34
         16.7     AMENDMENTS; WAIVER............................................................................ 34
         16.8     COUNTERPARTS.................................................................................. 34
         16.9     WAIVER........................................................................................ 34
         16.10    SEVERABILITY.................................................................................. 34
         16.11    NO THIRD PARTY BENEFICIARIES.................................................................. 34
         16.12    NEGOTIATED TRANSACTION........................................................................ 34
</TABLE>




                                     -iii-

<PAGE>   5


                            ASSET PURCHASE AGREEMENT


         This ASSET PURCHASE AGREEMENT (this "Agreement") entered into and
effective as of March 31, 1998, by and between Duke Energy Field Services, Inc.,
a Colorado corporation ("Seller") and TEPPCO Colorado, LLC, a Delaware limited
liability company ("Buyer").

                              W I T N E S S E T H:


         WHEREAS, Seller is engaged in the fractionation of natural gas liquids
through the operation of certain fractionation assets located in Weld County,
Colorado as hereinafter more specifically described; and

         WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the Transferred Assets (as herein defined) upon the terms and
subject to the conditions set forth in this Agreement;

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


                                   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:

                  "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. 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 or otherwise;
         and the terms "controlling" and "controlled" have the meanings
         correlative to the foregoing. Notwithstanding the foregoing, the term
         "Affiliate" when applied to the Seller shall not include Duke Energy
         Trading and Marketing, L.L.C., a Delaware limited liability company
         ("DETM"), the Buyer, Texas Eastern Products Pipeline Company, a
         Delaware corporation ("TEPPCO"), TEPPCO Partners L.P., a Delaware
         limited partnership (the "Partnership") or any entities owned, directly
         or indirectly by the Partnership (collectively, with TEPPCO and the
         Partnership, but excluding DETM, the "TEPPCO Entities); and as applied
         to the Buyer, shall not include the Seller, Duke Energy Corporation, a
         Delaware corporation, or any entities owned, directly or indirectly by
         Duke Energy Corporation other than the TEPPCO Entities;


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<PAGE>   6




                  "Business Day" means any day on which federal commercial banks
         are open for business for the purpose of sending and receiving wire
         transfers in Houston, Texas;

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

                  "Buyer's Damages" shall have the meaning given such term in
         Section 11.1 hereof;

                  "Buyer Indemnitees" shall have the meaning given such term in
         Section 11.1 hereof;

                  "CERCLA" means the Comprehensive Environmental Response,
         Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et 
         seq.;

                  "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 such term in
         Section 11.4 hereof;

                  "Closing" shall have the meaning given to that term in Article
         IV;

                  "Closing Date" shall have the meaning given to that term in
         Article IV;

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

                  "Conveyance Documents" means all bills of sale, assignments
         and other good and sufficient instruments of transfer, conveyance and
         assignment, to effect or evidence the sale, conveyance, assignment,
         transfer and delivery of the Transferred Assets to Buyer and to vest in
         Buyer title to the Transferred Assets in accordance with this
         Agreement;

                  "Dedicated Lands" shall have the meaning given such term in
         the Frac Agreement.

                  "Disclosure Letter" shall mean the disclosure schedule of even
         date with this Agreement prepared and delivered to Buyer by Seller.

                  "Effective Time" shall mean 11:59 p.m. (Denver, Colorado Time)
         on March 31, 1998.

                  "Environmental Laws" shall mean all federal, state, or
         municipal laws, rules, regulations, statutes, ordinances, or orders of
         any Governmental Authority relating to (a) the control of any potential
         pollutant or protection of the air, water, or land, (b) solid, gaseous
         or liquid waste generation, handling, treatment,


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<PAGE>   7




         storage, disposal or transportation and (c) exposure to hazardous,
         toxic or other substances alleged to be harmful. "Environmental Laws"
         shall include, but not be limited to, the Clean Air Act, 42 U.S.C.
         Section 7401 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et
         seq., RCRA, the Superfund Amendments and Reauthorization Act, 42 U.S.C.
         Section 11001, et seq., the Toxic Substances Control Act, 15 U.S.C.
         Section 2601 et seq., the Water Pollution Control Act, 33 U.S.C.
         Section 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. Section
         300f et seq. and CERCLA. The term "Environmental Laws" shall also
         include all state, local and municipal laws, rules, regulations,
         statutes, ordinances and orders dealing with the same subject matter or
         promulgated by any governmental or quasi-governmental agency thereunder
         or to carry out the purposes of any federal, state, local and municipal
         law;

                  "Environmental Liabilities" shall mean any and all
         liabilities, responsibilities, claims, suits, losses, costs (including
         remedial, removal, response, abatement, clean-up, investigative, or
         monitoring costs and any other related costs and expenses), other
         causes of action recognized now or at any later time, damages,
         settlements, expenses, charges, assessments, liens, penalties, fines,
         pre-judgment and post-judgment interest, attorneys' fees and other
         legal fees (a) pursuant to any agreement, order, notice, or
         responsibility, directive (including directives embodied in
         Environmental Laws), injunction, judgment, or similar documents
         (including settlements), or (b) pursuant to any claim by a Governmental
         Authority or other Person for personal injury, property damage, damage
         to natural resources, remediation, or payment or reimbursement of
         response costs incurred or expended by the Governmental Authority or
         Person pursuant to common law or statute;

                  "Environmental Losses" shall have the meaning given to that
         term in Section 11.2;

                  "Environmental Permit" shall mean any permit, license,
         approval, registration, identification number or other authorization
         with respect to the ownership or operation of the Transferred Assets or
         the Plants under any applicable law, regulation or other requirement of
         the United States or any other country or of any state, municipality or
         other subdivision thereof relating to the control of any pollutant or
         protection of health or the environment, including laws, regulations or
         other requirements relating to emissions, discharges, releases or
         threatened releases of pollutants, contaminants or hazardous or toxic
         materials or wastes into ambient air, surface water, groundwater or
         land, or otherwise relating to the manufacture, processing,
         distribution, use, treatment, storage, disposal, transport, or handling
         of chemical substances, pollutants, contaminants or hazardous or toxic
         materials or wastes;

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended;

                  "Frac Agreement" shall mean the Fractionation Agreement in the
         form attached hereto as Exhibit A.



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                  "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" shall mean any (a) petroleum or
         petroleum products, (b) hazardous substances as defined by Section
         101(14) of CERCLA and (c) any other chemical, substance or waste that
         is regulated by any Governmental Authority under any Environmental Law;

                  "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
         Improvement Act of 1976.

                  "Indemnified Party" shall have the meaning given to that term
         in Section 11.4;

                  "Indemnifying Party" shall have the meaning given that term in
         Section 11.4;

                  "Intellectual Property" means any and all technical
         information, know-how, trade secrets, shop rights, designs, plans,
         manuals, computer software (to the extent transferrable at no cost to
         Seller), specifications and other proprietary and nonproprietary
         technology, data and information used in connection with the operation
         of the Transferred Assets;

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

                  "Lease Agreement" means that certain Lease Agreement between
         Buyer and Seller in the form attached hereto as Exhibit B, which
         relates to the Greeley fractionation facility;

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

                  "Losses" means any and all damages, losses, liabilities,
         demands, payments, obligations, penalties, assessments, costs,
         disbursements or expenses (including interest, awards, judgments,
         settlements, fines, costs of remediation, diminutions in value, 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);

                  "Material Adverse Effect" shall mean a single event,
         occurrence or fact that, alone or together with all other events,
         occurrences and facts, could reasonably be expected to result in a
         material loss to or material diminution in value of the Transferred
         Assets to a purchaser thereof or prohibit or delay the consummation of
         the transactions contemplated hereby; provided that the term



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         "Material Adverse Effect" shall not include changes in general
         economic, industry or market conditions, or changes in law,
         Environmental Laws or regulatory policy.

                  "O&M Agreement" shall mean the Operation and Maintenance
         Agreement in the form attached hereto as Exhibit C.

                  "Offer Notice" shall have the meaning given such term in
         Section 10.4.

                  "Party" means Seller or Buyer; and "Parties" means Seller and
         Buyer;

                  "Permit" means any license, permit or authority granted by any
         Governmental Authority;

                  "Permitted Encumbrances" means (a) Liens for current taxes and
         assessments not yet due or which Seller is contesting in good faith,
         (b) inchoate mechanic and materialmen liens for construction in
         progress, (c) inchoate workmen, repairmen, warehousemen, customer,
         employee and carriers liens arising in the ordinary course of business,
         (d) Liens created by Buyer and (e) Liens and imperfections of title
         that, singly or in the aggregate, would not have a Material Adverse
         Effect;

                  "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);

                  "Plants" means Seller's Greeley Natural Gas Processing Plant
         and Spindle Natural Gas Processing Plant, including all improvements
         and fixtures, located in the SW1/4 of Section 25, T5N, R66W and the
         SW1/4 of Section 34, T2N, R67W in Weld County, Colorado, respectively,
         but excluding the Transferred Assets;

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

                  "Producer Contracts" shall mean those contracts listed in
         Section 5.5(b) of the Disclosure Letter.

                  "Project Agreements" shall have the meaning given such term in
         Section 10.4.

                  "Purchase Document" means any of this Agreement, the Lease
         Agreement, the Sublease Agreement the O&M Agreement and the Frac
         Agreement, and "Purchase Documents" means all of the foregoing
         agreements.

                  "Purchase Price" shall have the meaning given to that term in
         Section 2.3;


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                  "RCRA" means the Resource Conservation and Recovery Act, as
         amended, 42 U.S.C. Section 6901 et seq.;

                  "Records" means all agreements, documents, books, records and
         files relating to the Transferred Assets, including without limitation,
         accounting records, operating records, charts, maps, surveys, drawings,
         prints and any physical embodiment of the Intellectual Property,
         however, Records shall not include the corporate, financial, tax and
         legal files and records, and gas purchase, processing and/or gathering
         agreements of Seller;

                  "Retained Liabilities" shall have the meaning given to that
         term in Article III;

                  "Seller" shall have the meaning given to that term in the
         preamble;

                  "Seller's Damages" shall have the meaning given such term in
         Section 11.3 hereof;

                  "Seller Indemnitees" shall have the meaning given such term in
         Section 11.3 hereof;

                  "Sublease Agreement" means that certain Sublease Agreement
         between Buyer and Seller in the form attached hereto as Exhibit D,
         which relates to the Spindle fractionation facility;

                  "Tax" or "Taxes" means any United States or foreign federal,
         state or local income tax, ad valorem tax, excise tax, sales tax, use
         tax, franchise tax, real or personal property tax, transfer tax, gross
         receipts tax or other tax, assessment, duty, fee, levy or other
         governmental charge, together with and including, any and all interest,
         fines, penalties, assessments, and additions to Tax resulting from,
         relating to, or incurred in connection with any of those or any contest
         or dispute thereof;

                  "Tax Consideration" shall have the meaning given to that term
         in Section 2.6;

                  "Tax Return" means any report, statement, form, return or
         other document or information required to be supplied to a taxing
         authority in connection with Taxes; and

                  "Transfer Documents" shall have the meaning given to that term
         in Section 16.4; and

                  "Transferred Assets" shall mean all of the equipment and other
         tangible assets which are located within the areas outlined in red and
         the equipment listed in red print on the attached Exhibits E and F;.


                                      -6-
<PAGE>   11

         1.2      OTHER DEFINITIONAL 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 Sections, paragraphs,
Exhibits or Schedules are deemed references to the corresponding 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 actual
knowledge on the part of a Person or its officers, directors, plant managers and
department heads.

         1.3      HEADINGS. The headings of the 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.

         1.4      OTHER TERMS. Other terms may be defined elsewhere in the text
of this Agreement and shall have the meaning indicated throughout this
Agreement.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS


         2.1      PURCHASE AND SALE OF ASSETS.

                  (a) At the Closing, but effective for all purposes as of the
Effective Time, Seller shall sell, transfer, assign, convey, set over, grant,
bargain and deliver to Buyer free and clear of all Liens (other than Permitted
Encumbrances), and Buyer shall purchase and acquire from Seller, all right,
title and interest in and to the Transferred Assets.

                  (b) Seller shall use its best efforts to obtain the consents
of third parties as are necessary for the assignment of the Transferred Assets.
To the extent that any of the Transferred Assets are not assignable by the terms
thereof or consents to the assignment thereof cannot be obtained, the
Transferred Assets shall be held by Seller in trust for Buyer and shall be
performed by Buyer in the name of Seller and all benefits and obligations
derived thereunder shall be for the account of Buyer, provided that where
entitlement of Buyer to those Transferred Assets hereunder is not recognized by
any third party, Seller shall, at the request of Buyer, enforce in a reasonable
manner, at the cost of Seller, any and all rights of Seller against the third
party.

         2.2      THERE IS NO SECTION 2.2 TO THIS AGREEMENT.

         2.3      PURCHASE PRICE. The purchase price for the Transferred Assets
shall be $40,000,000 (Forty Million Dollars) (the "Purchase Price"), payable as
set forth below by check or wire transfer in immediately available funds to an
account or accounts designated in writing by Seller to Buyer prior to the
respective date of payment.

                  (a) $2,000,000 (Two Million Dollars) (the "Initial Payment")
         shall be paid to Seller simultaneously with the execution of this
         Agreement. The Initial



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<PAGE>   12




         Payment will be promptly returned by Seller to Buyer by wire transfer
         in immediately available funds to an account or accounts designated by
         Buyer to Seller, together with interest thereon at a per annum rate of
         5.75% for the period beginning on the date the Initial Payment is made
         by Buyer to Seller and ending on the date such amount is returned to
         Buyer by Seller, if and only if, one or more of the conditions set
         forth in Section 7.1 is not satisfied and this Agreement is terminated.

                  (b) $38,000,000 (Thirty-Eight Million Dollars) shall be
         payable at Closing, together with interest thereon at a per annum rate
         of 5.75% for the period beginning on the date on which the Effective
         Time occurs and ending on the Closing Date.

         2.4      PRORATIONS OF EXPENSES AND CERTAIN PROPERTY TAXES.

                  (a) Seller warrants to Buyer that the Transferred Assets are
         not, and on the Effective Time will not be, subject to or liable for
         any special assessments or similar types of impositions. Any general
         property Tax assessed against or pertaining to the Transferred Assets
         for the taxable period that includes the Effective Time shall be
         prorated between Buyer and Seller as of the Effective Time. For
         purposes of this proration, such taxes for 1998 shall be assumed to be
         $45,000.

                  (b) Except as otherwise provided in this Agreement, Seller and
         Buyer agree that amounts payable with respect to utility charges and
         other items of expense attributable to the operation of the Transferred
         Assets shall be prorated as of the Effective Time to the extent the
         charges and expenses cannot be identified as to the Party who received
         the benefits to which the charges and expenses relate. To the extent
         the amounts are estimated at Closing and the prorations are inaccurate,
         Seller and Buyer agree to make such payment to the other after the
         amounts are correctly computed, that is necessary to allocate the
         charges properly between Seller and Buyer as of the Effective Time.

         2.5      TAXES AND RECORDING FEES.

                  (a) Seller shall be responsible for all transfer, sales, use,
         excise, stamp and similar Taxes arising out of or with respect to the
         transactions contemplated by this Agreement. Seller and Buyer each
         agree (i) to report the federal, state and local income Tax and other
         Tax consequences of the transactions contemplated herein, and in
         particular, to report information required by Code Section 1060(b), in
         a manner consistent with the allocation or the Purchase Price in
         accordance with Section 2.6 and (ii) that neither Party will take any
         position inconsistent therewith upon examination of any Tax Return, in
         any refund claim, in any litigation, investigation, or otherwise.

                  (b) Buyer and Seller acknowledge and agree that the Purchase
         Price includes and is inclusive of any and all sales, use, transfer or
         other similar Taxes imposed as a result of the consummation of the
         transactions contemplated by



                                      -8-
<PAGE>   13




         this Agreement, and Seller hereby agrees to indemnify Buyer against,
         and agrees to protect, save and hold Buyer harmless from, any loss,
         liability, obligation or claim (whether or not ultimately successful)
         for sales, use, transfer or other similar Taxes (and any interest,
         penalties, additions to Tax and fines thereon or related thereto)
         imposed as a result of the consummation of the transactions
         contemplated by this Agreement, but not including any income, franchise
         or similar tax of Buyer.

                  (c) Buyer shall pay any and all recording, filing or other
         fees relating to the conveyance or transfer of the Transferred Assets
         from Seller to Buyer.

         2.6      ALLOCATION OF PURCHASE PRICE. For federal income Tax purposes
(including Buyer's and Seller's compliance with the reporting requirements of
Section 1060 of the Code), each of Seller and Buyer shall agree within thirty
(30) calendar days following the Closing as to the allocation of the
consideration (including the Purchase Price) deemed to have been paid for
federal income Tax purposes by Buyer to Seller pursuant to this Agreement (the
"Tax Consideration") among the Transferred Assets (the "Allocation"), which
allocation shall be final and binding on Seller and Buyer. Seller and Buyer
agree to cooperate in good faith with each other in connection with the
preparation and filing of any information required to be furnished to the IRS
under Section 1060 of the Code (including Section 1060(b) and (e) of the Code)
and any applicable regulations thereunder. Without limiting the generality of
the preceding sentence, Buyer and Seller agree to (i) report the allocations to
the IRS on Form 8594 and, if required, supplemental Forms 8594, in accordance
with the instructions to Form 8594 and the provisions of Section 1060 of the
Code and the applicable regulations thereunder and (ii) coordinate their
respective preparation and filing of each the Form 8594 and any other forms or
information statements or schedules required to be filed under Section 1060 of
the Code and the applicable regulations thereunder so that the allocations and
information reflected on the forms, statements and schedules shall be
consistent.

         2.7      TITLE AND RISK OF LOSS. Title and risk of loss with respect to
the Transferred Assets shall pass to Buyer at the Effective Time; provided,
however, that should the Closing not occur, title and risk of loss shall be
deemed to remain in Seller for all purposes and for all periods of time.

                                   ARTICLE III
                              RETAINED OBLIGATIONS

         LIABILITIES NOT ASSUMED BY BUYER. Seller shall pay and discharge in due
course all of its liabilities, debts and obligations, whether known or unknown,
now existing or hereafter arising, contingent or liquidated as the same relate
to the Transferred Assets for all periods of time prior to the Effective Time
(the "Retained Liabilities"), and neither Buyer nor any of its Affiliates shall
assume, or in any way be liable or responsible for, any of the Retained
Liabilities. Without limiting the generality of the foregoing, the Retained
Liabilities shall include, without limitation, the following:

                  (a) any liability or obligation of Seller arising out of or in
         connection with the negotiation and preparation of this Agreement and
         the consummation and performance of the transactions contemplated
         hereby, whether or not the



                                      -9-
<PAGE>   14




         transactions are consummated, including any Tax liability so arising
         (excluding income, franchise or similar Taxes of Buyer);

                  (b) any liability or obligation for any and all Taxes of, or
         pertaining or attributable to, (i) Seller or (ii) the ownership or
         operation of the Transferred Assets for any period or portion thereof
         that ends on or before the Effective Time (including any and all Taxes
         described in clauses (i) and (ii) of this paragraph (b) for which
         liability is or may be sought to be imposed on Buyer under any
         successor liability, transferee liability or similar provision of any
         applicable federal, foreign, state or local law (including Section
         111.020 of the Texas Tax Code));

                  (c) any liability or obligation relating to any
         indemnification or warranty obligation of Seller created by it on or
         before the Effective Time and any obligation for product liability for
         products manufactured or produced or for services rendered by Seller,
         in whole or in part, on or prior to the Effective Time;

                  (d) any liability to which any of the Parties may become
         subject as a result of any failure to effect the transactions
         contemplated by this Agreement in compliance with the bulk sales
         provisions of the Uniform Commercial Code as in effect in any state or
         any similar statute as enacted in any jurisdiction; and

                  (e) all other liabilities and obligations of Seller to any
         Person related to the Transferred Assets.


                                   ARTICLE IV
                         CLOSING DATE AND EFFECTIVE TIME

         The closing of the purchase and sale of the Transferred Assets (the
"Closing") shall take place at the offices of Fulbright & Jaworski L.L.P., 1301
McKinney Street, Suite 5100, Houston, Texas, or at such other place as the
Parties may mutually agree to in writing. The Closing shall take place at 10:00
a.m. on the latter of (i) five (5) Business Days after the date Seller and Buyer
obtain all necessary regulatory approvals, if any, required by each of them
respectively, pursuant to this Agreement or (ii) thirty (30) calendar days after
the date hereof. The date of the Closing is referred to herein as the "Closing
Date". Regardless of the actual Closing Date, the transactions contemplated by
this Agreement shall be effective as of the Effective Time.


                                    ARTICLE V
                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Except as set forth in the Disclosure Letter (whereunder disclosure
under any Section thereof shall constitute disclosure under all other Sections
thereof provided appropriate cross-references are included to such other
Sections) delivered to Buyer herewith, Seller represents and warrants to, and
agrees and covenants with, Buyer as follows:



                                      -10-
<PAGE>   15




         5.1      CORPORATE MATTERS. Seller is a corporation duly organized, 
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own, operate and lease
its properties and assets and to carry on its business in the places and in the
manner currently conducted. Buyer has been provided with a true and correct copy
of Seller's Articles of Incorporation and Bylaws as currently in effect. Seller
owns directly all of the Transferred Assets and has all requisite corporate
power and authority to enter into this Agreement and to perform its obligations
hereunder.

         5.2      VALIDITY OF AGREEMENT; NO CONFLICT.

                  (a) This Agreement has been duly authorized, executed and
         delivered by Seller and is a legal, valid and binding obligation of
         Seller, 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.

                  (b) The execution, delivery and performance of this Agreement
         by Seller and the other agreements and documents to be delivered by
         Seller to Buyer hereunder, the consummation of the transactions
         contemplated hereby or thereby, and the compliance with the provisions
         hereof or thereof, by Seller will not, with or without the passage of
         time or the giving of notice or both:

                      (i) conflict with, constitute a breach, violation or
                  termination of any provision of, or give rise to any right of
                  termination, cancellation or acceleration, or loss of any
                  right or benefit or both, under, any or agreement to which
                  Seller is a party or by which it or the Transferred Assets are
                  bound;

                      (ii) conflict with or violate the Articles of
                  Incorporation or Bylaws of Seller;

                      (iii) result in the creation or imposition of any Lien on
                  any of the Transferred Assets; or

                      (iv) to Seller's knowledge, violate any law, statute,
                  ordinance, regulation, judgment, writ, injunction, rule,
                  decree, order or any other restriction of any kind or
                  character applicable to Seller or its properties or assets.

         5.3      GOVERNMENTAL CONSENTS, APPROVALS AND AUTHORIZATIONS.

                  (a) Except as set forth in Section 5.3(a) of the Disclosure
         Letter, no order, license, consent, waiver, authorization or approval
         of, or exemption by, or the giving of notice to, or the registration
         with, or the taking of any other action in respect of, any Person not a
         Party, including any Governmental Authority, and no filing, recording,
         publication or registration in any public office or any other place is
         now, or under existing law in the future will be, necessary on



                                      -11-
<PAGE>   16




         behalf of Seller to authorize the execution, delivery and performance
         of this Agreement or any other agreement contemplated hereby to be
         executed and delivered by it and the consummation of the transactions
         contemplated hereby or thereby (including assignment of the Transferred
         Assets), or to effect the legality, validity, binding effect or
         enforceability thereof, other than any requirement that is applicable
         to Buyer or as a result of any other facts that specifically relate to
         the business or activities in which Buyer is or proposes to be engaged.

                  (b) Except for items that will not have a Material Adverse
         Effect, all licenses, permits, concessions, warrants, franchises and
         other governmental authorizations and approvals, of all Governmental
         Authorities required or necessary for Seller to own and operate the
         Transferred Assets in the places and in the manner currently conducted
         have been duly obtained, are in full force and effect and are set forth
         truly, correctly and completely in Section 5.3(b) of the Disclosure
         Letter, which Section 5.3(b) shall be attached to this Agreement on its
         execution or delivered to Buyer sufficiently prior to the Closing Date
         for Buyer to adequately review the same. Seller has received no
         notification concerning, and Seller has no knowledge of, violations
         that are in existence or that have been recorded with respect to those
         licenses, permits or other authorizations and no proceeding is pending
         or, to the knowledge of Seller, threatened with respect to the
         revocation or limitation of any of the licenses, permits or other
         authorizations. To Seller's knowledge, Seller has complied with all
         laws, rules, regulations and orders applicable to the ownership and
         operation of the Transferred Assets.

         5.4      TITLE TO AND CONDITION OF PROPERTIES.

                  (a) The real property described in the Lease Agreement and the
         Sublease Agreement constitutes the only interest in real property
         included in or required for the continued operation of the Transferred
         Assets.

                  (b) A complete listing of the Transferred Assets is set forth
         in Exhibits E and F, and all of the Transferred Assets are located on
         the lands covered by the Lease Agreement and the Sublease Agreement and
         is in Seller's possession and control. Seller has good and marketable
         title to all the Transferred Assets, free and clear of all Liens.

                  (c) Seller has not received any notice of infringement,
         misappropriation or conflict from any other Person with respect to the
         operation of the Plants or the Transferred Assets except as noted in
         Section 5.4(c) of the Disclosure Letter, and the operation of the
         Transferred Assets has not infringed, misappropriated or otherwise
         conflicted with any patents, patent applications, patent rights,
         trademarks, trademark applications, service marks, service mark
         applications, copyrights, trade names, unregistered copyrights, trade
         secrets or know-how of any other Person.


                                      -12-
<PAGE>   17




                  (d) The operation of the Transferred Assets in the ordinary
         course of business is not dependent upon the right to use the property
         of Persons other than Seller, except such property as is leased or
         licensed to Seller and to Buyer pursuant to any of the Transferred
         Assets, which leases and licenses are disclosed in Section 5.5(a) of
         the Disclosure Letter. No Person, other than Seller, owns or has any
         interest in any Transferred Asset or any asset currently used by Seller
         in the operation of the Transferred Assets or the Plants, except such
         assets as are leased or licensed to Seller pursuant to any of the
         Transferred Assets.

                  (e) The Transferred Assets are in good operating condition and
         repair, in accordance with standards generally acceptable in the
         industry, ordinary wear and tear accepted, are free of material
         defects, are adequate and sufficient for the operations of such Seller
         as currently conducted and have maximum aggregate operating capacity of
         504,000 Gallons (as defined in the Frac Agreement) per day. Such
         structures, equipment and other properties and their use conform in all
         respects to all applicable laws, except for such noncompliance as will
         have no Material Adverse Effect.

                  (f) Upon consummation of the transactions contemplated by this
         Agreement, Buyer shall have a nonexclusive right to use the
         Intellectual Property in connection with its ownership and operation of
         the Transferred Assets, including the operation of such assets by third
         parties.

         5.5      CONTRACTS AND COMMITMENTS.

                  (a) Except as set forth in Section 5.5(a) of the Disclosure
         Letter and for the Retained Liabilities, none of the Transferred Assets
         are subject to:

                      (i) any agreement, contract or commitment requiring the
                  expenditure or series of related expenditures of funds in
                  excess of $10,000;

                      (ii) any agreement, contract or commitment requiring the
                  payment for goods or services whether or not the goods or
                  services are actually provided or the provision of goods or
                  services at a price less than Seller's cost of producing the
                  goods or providing the services;

                      (iii) any loan or advance to, or investment in, any Person
                  or any agreement, contract, commitment or understanding
                  relating to the making of any loan, advance or investment;

                      (iv) any contract, agreement, indenture, note or other
                  instrument relating to the borrowing of money or any guarantee
                  or other contingent liability in respect of any indebtedness
                  or obligation of any Person (other than the endorsement of


                                      -13-
<PAGE>   18




                  negotiable instruments for deposit or collection in the
                  ordinary course of business);

                       (v) any management service, union, employment, consulting
                  or other similar type contract or agreement;

                       (vi) any agreement, contract or commitment that would
                  limit the freedom of Buyer or any Affiliate thereof following
                  the Effective Time to own, operate, sell, transfer, pledge or
                  otherwise dispose of or encumber any of the Transferred Assets
                  or to compete with any Person or to engage in any business or
                  activity in any geographic area;

                       (vii) any agreement, lease, contract or commitment or
                  series of related agreements, leases, contracts or commitments
                  not entered into in the ordinary course of business or, except
                  for agreements to purchase or sell goods and services entered
                  into in the ordinary course of business of Seller, not
                  cancelable by Seller without penalty to Seller or within 30
                  days;

                       (viii) any agreement or contract that would obligate or
                  require Buyer or any subsequent owner of any of the
                  Transferred Assets to provide for indemnification or
                  contribution with respect to any matter;

                       (ix) any license, royalty or similar agreement; or

                       (x) any other agreement, contract or commitment that
                  might reasonably be expected to have a Material Adverse
                  Effect.

                  (b) Section 5.5(b) of the Disclosure Letter lists, and
         identifies as such, all contracts between Seller or its Affiliates and
         producers of natural gas from the Dedicated Lands (the "Producer
         Contracts"). Pursuant to these Producer Contracts, Seller fractionated
         through the Transferred Assets no less than 120,000,000 Gallons (as
         defined in the Frac Agreement) of liquids in 1997. Seller has provided
         Buyer complete access to all such Producer Contracts.

                  (c) Seller is not in breach of any material provision of, or
         is not in default (or knows of any event or circumstance that with
         notice, or lapse of time or both, would constitute an event of default)
         under the terms of any of the contracts listed in Section 5.5(a) and
         (b) of the Disclosure Letter and all of such contracts are in full
         force and effect. Seller is not aware of any pending or threatened
         disputes with respect to any of such contracts..

                  (d) Except as set forth in Section 5.5(d) of the Disclosure
         Letter, the enforceability of the contracts listed in Section 5.5(a)
         and (b) of the Disclosure Letter will not be affected in any manner by
         the execution and delivery of this Agreement or the consummation of the
         transactions contemplated hereby and



                                      -14-
<PAGE>   19




         none of the contracts require the consent or waiver of any Person or
         Governmental Authority prior to the sale, assignment, transfer,
         conveyance or delivery thereof pursuant to this Agreement.

         5.6      OPERATING DATA AND INFORMATION. Attached as Section 5.6 of the
Disclosure Letter are historical operating data and information for the periods
January 1, 1993 through December 31, 1997 relating to the Transferred Assets,
and including volumes of liquids fractionated through the Transferred Assets for
the periods indicated. Such operating data and information are accurate and
complete with respect to such periods. Subsequent to such periods, there have
been no adverse changes in the volumes of liquids fractionated in the
Transferred Assets and Seller has no knowledge of any fact or circumstance which
would result in a material decrease in such volumes.

         5.7      TAXES.  Except as set forth in Section 5.7 of the Disclosure 
Letter:

                  (a) all Taxes assessed and due and owing against the
         Transferred Assets or the operation thereof on or before the Effective
         Time have been or will be timely paid in full on or before the Closing
         Date; and

                  (b) all withholding Tax and Tax deposit requirements imposed
         on Seller and applicable to the Transferred Assets or the operation
         thereof for any and all periods prior to and including the Effective
         Time have been or will be timely satisfied in full on or before the
         Closing Date.

         5.8      NO VIOLATIONS OR LITIGATION.

                  (a) Seller has not violated, and the consummation of the
         transactions contemplated hereby will not cause any violation of, any
         order of any Governmental Authority or any law, ordinance, regulation,
         order, requirement, statute, rule, permit, concession, grant,
         franchise, license or other governmental authorization relating or
         applicable to the ownership or operation of any of the Transferred
         Assets or that would have a Material Adverse Effect.

                  (b) Except as set forth in Section 5.8(b) of the Disclosure
         Letter, there is no Claim, including no governmental investigation or
         examination, or any change in any zoning or building ordinance pending
         or, to Seller's knowledge, threatened against or affecting any of the
         Transferred Assets or the ownership or operation of such assets, at law
         or in equity, before or by any Governmental Authority and no basis
         exists for any such Claim.

         5.9      NO ADVERSE CHANGES OR EVENTS. Since December 31, 1997, the
Transferred Assets have been consistently operated only in the ordinary course,
consistent with past practices, and there has not been:

                  (a) any adverse change in the financial condition, assets,
         liabilities (contingent or otherwise), results of operations or
         prospects of the Transferred Assets except for the changes that in the
         aggregate have not had a Material Adverse Effect, or any occurrence,
         circumstance or combination thereof that


                                      -15-
<PAGE>   20




         might reasonably be expected to have a Material Adverse Effect before
         or after the Effective Time;

                  (b) any damage, destruction or loss, whether or not covered by
         insurance, adversely affecting the Transferred Assets;

                  (c) any mortgage, pledge or creation of any Lien (other than a
         Permitted Encumbrance) with respect to any of the Transferred Assets;

                  (d) any sale, transfer or other disposition of any of the
         Transferred Assets ;

                  (e) any material change in the customary methods used in
         operating the Transferred Assets;

                  (f) any change in the data required to be set forth on any
         Exhibit or Schedule to this Agreement, or any other event or condition
         of any character whatsoever pertaining to the Transferred Assets that
         has had or reasonably may be expected to have a Material Adverse
         Effect; or

                  (g) any adverse change in the Producer's Contracts which, in
         the aggregate, might reasonably be expected to have a Material Adverse
         Effect.

         5.10     ENVIRONMENTAL MATTERS.  Except as set forth in Section 5.10 of
the Disclosure Letter:

                  (a) There are no prior owners of the Transferred Assets.
         Seller has not caused or allowed the generation, use, treatment,
         storage, or disposal of Hazardous Materials at any site or facility
         owned, leased or operated in connection with the ownership or operation
         of the Transferred Assets except in accordance with all applicable
         Environmental Laws or except to the extent the same would not have a
         Material Adverse Effect or would not result in any liability,
         contingent or otherwise, to Buyer or its Affiliates;

                  (b) To its knowledge, Seller does not own or lease any real
         property, improvements or related assets that form a part of the
         Transferred Assets that have been subject to the release of any
         Hazardous Materials;

                  (c) To its knowledge, Seller has secured all Environmental
         Permits necessary for the ownership or operation of the Transferred
         Assets, and Seller is in compliance with the Environmental Permits;

                  (d) To its knowledge, Seller has not received any notice, nor
         is it aware, of any proposal to amend, revoke or replace any
         Environmental Permit relating to any of the Transferred Assets, or
         requiring the issuance of any additional Environmental Permit in
         connection therewith;


                                      -16-
<PAGE>   21




                  (e) To its knowledge, Seller has not received inquiry or
         notice nor does it have any reason to suspect or believe it will
         receive inquiry or notice of any actual or potential Proceedings or
         losses related to or arising under any Environmental Law;

                  (f) To its knowledge, Seller is not currently operating or
         required to be operating under any compliance order, schedule, decree
         or agreement, any consent decree, order or agreement, or corrective
         action decree, order or agreement issued or entered into under any
         federal, state or local statute, regulation or ordinance regarding the
         environment or health or safety in the work place;

                  (g) Seller has not transported, arranged for the
         transportation of or disposed of any substance in a manner that may
         lead to claims against Buyer for clean-up costs, remedial work, damages
         to natural resources or for personal injury claims, nor does it have
         any knowledge of any other Person who has undertaken such activities
         which may lead to such claims against Buyer; and

                  (h) Seller has conducted the operations of the Transferred
         Assets in compliance with all applicable limitations, restrictions,
         conditions, standards, prohibitions, requirements and obligations
         established under Environmental Laws, except where such non-compliance
         would not, either individually or in the aggregate, have a Material
         Adverse Effect.

         5.11     PRODUCT LIABILITY. To Seller's knowledge and except as
disclosed in Section 5.11 of the Disclosure Letter there are no facts or events
forming the basis of any present claim against Seller not fully covered by
insurance, except for deductibles and self-insurance retentions, for personal
injury or property damage alleged to be caused by products produced or services
rendered by or on behalf of Seller in connection with its ownership or operation
of the Transferred Assets.

         5.12     NO UNTRUE STATEMENTS. This Agreement, the Exhibits and 
Schedules hereto, and all other documents and certificates delivered to Buyer
and its representatives in connection with this Agreement or the transactions
contemplated hereby, do not and will not contain when delivered any untrue
statement of any material fact and do not and will not omit to state a material
fact necessary to make the statements contained herein or therein not
misleading. There is no material fact that has not been disclosed in writing to
Buyer by Seller that has or will have a Material Adverse Effect.

         5.13     SELLER'S EMPLOYEE BENEFIT LIABILITIES. Buyer shall not be 
liable or obligated under any employee benefit plan or for any other employee
benefits that may have been established by Seller for its employees. Without
limiting the generality of the foregoing, Seller acknowledges and agrees that
Buyer does not assume the sponsorship of, the responsibility of contributions
to, or any liabilities in connection with any employee benefit plan maintained
by Seller for active employees, retirees, former employees, their beneficiaries
or any other person, including any employee pension benefit plan within the
meaning of section 3(2) of ERISA, employee welfare plan within the meaning of
section 3(1) of ERISA and any personnel policy, stock option plan, bonus plan or
arrangement, incentive award plan or arrangement, vacation



                                      -17-
<PAGE>   22




policy, severance pay plan, policy or agreement, deferred compensation
agreement, executive compensation or supplemental income arrangement, consulting
agreement, employment agreement and each other employee benefit plan, agreement,
arrangement, program, practice or understanding.

         5.14     FINDER'S FEES. No investment banker, broker or finder has 
acted directly or indirectly for Seller or any Affiliate of Seller in connection
with this Agreement or the transactions contemplated hereby. No other investment
banker, broker, finder or other Person is entitled to any brokerage or finder's
fee or similar commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Seller or any of its
Affiliates. Seller agrees to indemnify and hold Buyer harmless from and against
any and all claims, liabilities or obligations with respect to all fees,
commissions or expenses asserted by any Person on the basis of any act,
statement, agreement or commitment alleged to have been made by Seller or any of
its Affiliates with respect to any such fee, expense or commission.


                                   ARTICLE VI
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         6.1      CORPORATE MATTERS. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite limited liability company power and authority
to enter into this Agreement and to perform its obligations under this
Agreement.

         6.2      VALIDITY OF AGREEMENT; NO CONFLICT. This Agreement has been
duly authorized, executed and delivered by Buyer and is a legal, valid and
binding obligation of Buyer, 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. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
by Buyer will not violate any provision of, or constitute a default under, any
contract or other agreement to which Buyer is a party or by which it is bound,
or conflict with its Limited Liability Company Agreement.

         6.3      FINDER'S FEE. No investment banker, broker or finder has acted
directly or indirectly for Buyer or any Affiliate of Buyer in connection with
this Agreement or the transactions contemplated hereby. No other investment
banker, broker, finder or other Person is entitled to any brokerage or finder's
fee or similar commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Buyer or any of its
Affiliates. Buyer agrees to indemnify and hold Seller harmless from and against
any and all claims, liabilities or obligations with respect to all fees,
commissions or expenses asserted by any Person on the basis of any act,
statement, agreement or commitment alleged to have been made by Buyer or any of
its Affiliates with respect to any such fee, expense or commission.


                  
                                      -18-

<PAGE>   23


                                   ARTICLE VII

                              CONDITIONS PRECEDENT

         7.1      CONDITIONS TO OBLIGATIONS OF BUYER AT CLOSING. The obligation 
of Buyer to purchase the Transferred Assets as contemplated hereby is, at the
option of Buyer, subject to the satisfaction on or before the Closing Date of
the conditions set forth below, any of which may be waived by Buyer in writing;
provided, that Buyer's election to proceed with the Closing of the transactions
contemplated hereby shall not be deemed a waiver of any breach of any
representation, warranty, covenant or agreement herein, whether or not known to
Seller or existing on the Closing Date, and the action shall not prejudice
Buyer's right to recover damages for any breach.

                  (a) Representations, Warranties and Covenants. Seller shall
         have performed, satisfied, and complied in all material respects with
         all covenants, agreements, and conditions required by this Agreement to
         be performed, satisfied, or complied with by it on or before the
         Closing, and all representations and warranties of Seller contained in
         this Agreement or in any certificate, document, instrument or writing
         delivered to Buyer by or on behalf of Seller under this Agreement shall
         be true and correct on and as of the Closing Date with the same force
         and effect as though they had been made on the Closing Date, and Buyer
         shall have received a certificate, dated as of the Closing Date, signed
         by a duly authorized officer of Seller certifying the same.

                  (b) Resolutions. Buyer shall have received a certificate,
         dated as of the Closing Date, signed by Seller's Secretary or Assistant
         Secretary certifying (i) the accuracy and completeness of the copies
         of, as well as the current effectiveness of, the resolutions to be
         attached thereto of the Board of Directors of Seller authorizing the
         execution, delivery and performance of this Agreement and the
         consummation of the transactions contemplated herein, (ii) the
         incumbency of the officers executing this Agreement on behalf of Seller
         and any documents to be executed and delivered by Seller at the
         Closing, and (iii) that attached to the certificate are true and
         correct copies of the charter documents and Bylaws of Seller, as in
         force and effect on the Closing Date.

                  (c) Good Standing. Seller shall have delivered to Buyer
         certificates issued by appropriate Governmental Authorities evidencing
         the good standing and existence of Seller, as of a date not more than
         thirty (30) calendar days prior to the Closing Date, in Colorado.

                  (d) Instruments of Transfer. Seller shall have executed,
         acknowledged and delivered to Buyer the Conveyance Documents, in form
         and substance reasonably satisfactory to Buyer, as shall be necessary
         or reasonably desirable to vest in Buyer all right, title and interest
         in and to the Transferred Assets.

                  (e) No Adverse Effect. There shall have been no Material
         Adverse Effect .



                                      -19-
<PAGE>   24




                  (f) Consents. All consents, licenses and approvals from all
         third Persons necessary or appropriate for Buyer to consummate the
         transactions contemplated by this Agreement, including those listed in
         Section 5.3(a) of the Disclosure Letter, shall have been received.

                  (g) Delivery of Other Agreements. Seller shall have executed
         and delivered to Buyer all other Purchase Documents to which it is a
         party.

                  (h) No Litigation. No Proceeding that is meritorious in the
         opinion of counsel to Buyer shall have been instituted or threatened
         relating to this Agreement or the transactions contemplated hereby, and
         no Governmental Authority shall have taken any other action to
         challenge or delay the transactions contemplated hereby.

                  (i) HSR Act. Any required waiting period under the HSR Act
         shall have expired or early termination shall have been granted with
         respect to such periods.

         7.2      CONDITIONS TO OBLIGATIONS OF SELLER AT CLOSING. The obligation
of Seller to transfer the Transferred Assets as contemplated hereby is, at the
option of Seller, subject to the satisfaction on or before the Closing Date of
the conditions set forth below, any of which may be waived by Seller in writing;
provided, however, Seller's election to proceed with the Closing of the
transactions contemplated hereby shall not be deemed a waiver of any breach of
any representation, warranty or covenant herein, whether or not known to Seller
or existing on the Closing Date, and the action shall not prejudice Seller's
right to recover damages for any breach.

                  (a) Representations, Warranties and Covenants. Buyer shall
         have performed, satisfied, and complied in all material respects with
         all covenants, agreements, and conditions required by this Agreement to
         be performed, satisfied, or complied with by it on or before the
         Closing, and the representations and warranties of Buyer in this
         Agreement or in any certificate, document, instrument or writing
         delivered to Seller by or on behalf of Buyer under this Agreement shall
         be true and correct on and as of the Closing Date with the same force
         and effect as though they had been made on the Closing Date, and Seller
         shall have received a certificate, dated as of the Closing Date, signed
         by the President or a Vice President of Buyer certifying the same.

                  (b) Resolutions. Seller shall have received a certificate,
         dated as of the Closing Date, signed by Buyer's Secretary or Assistant
         Secretary certifying (i) the accuracy and completeness of the copies
         of, as well as the current effectiveness of, the resolutions to be
         attached thereto of the Board of Directors of Buyer authorizing the
         execution, delivery and performance of this Agreement and the
         consummation of the transactions contemplated herein, (ii) the
         incumbency of the officers executing this Agreement on behalf of Buyer
         and any documents to be executed and delivered by Buyer at the Closing,
         and (iii) that attached to the certificate are true and correct copies
         of the charter documents of Buyer, as in force and effect on the
         Closing Date.


                                      -20-
<PAGE>   25




                  (c) Good Standing. Buyer shall have delivered to Seller
         certificates issued by appropriate Governmental Authorities evidencing
         the good standing and existence of Buyer, as of a date not more than
         thirty (30) calendar days prior to the Closing Date, in Colorado and
         Delaware. To the extent provided for under applicable law, Buyer shall
         also have delivered to Seller certificates or other writings issued by
         appropriate Governmental Authorities evidencing that all applicable
         state franchise Taxes have been paid.

                  (d) Delivery of Other Agreements. Buyer shall have executed
         and delivered to Seller all other Purchase Documents to which it is a
         party.

                  (e) No Litigation. No Proceeding that is meritorious in the
         opinion of counsel to Seller shall have been instituted or threatened
         relating to this Agreement or the transactions contemplated hereby, and
         no Governmental Authority shall have taken any other action to
         challenge or delay the transactions contemplated hereby.

                  (f) Consents. All consents, licenses and approvals from all
         third Persons necessary or appropriate for Seller to consummate the
         transactions contemplated by this Agreement, including those listed in
         Section 5.3(a) of the Disclosure Letter, shall have been received.

                  (g) HSR Act. Any required waiting period under the HSR Act
         shall have expired or early termination with respect to such period
         shall have been granted.

                  (h) Purchase Price. Buyer shall have delivered to Seller on
         the Closing Date the Purchase Price in accordance with Section 2.3.


                                  ARTICLE VIII
       HSR FILING; ACCESS TO INFORMATION BY BUYER; MATTERS PENDING CLOSING

         8.1      HSR Filing. Each Party shall (i) file on or before March 31, 
1998 with the Department of Justice ("DOJ") and the Federal Trade Commission
("FTC") the notification and report form required for the transactions
contemplated hereunder by the HSR Act, requesting early termination of the
waiting period thereunder, (ii) respond promptly to any inquiries from the DOJ
or the FTC in connection with such filings and (iii) comply in all material
respects with the requirements of the HSR Act. Subject to regulatory
constraints, Seller and Buyer shall cooperate with each other and promptly
furnish all information to the other Party that is necessary in connection with
the Parties' compliance with the HSR Act. Seller and Buyer shall coordinate
their initial filing of the notification and report form so that such filings
are made simultaneously. Seller and Buyer shall each keep the other Party fully
advised with respect to any requests from or communications with the DOJ or FTC
and shall consult with the other Party with respect to all filings and responses
thereto.

         8.2      PRIOR TO CLOSING. Until the Closing, during normal business 
hours, Seller will allow Buyer and its employees, officers, accountants,
attorneys, agents, investment bankers and


                                      -21-
<PAGE>   26




other authorized representatives to examine all financial, operating and other
data and information relating to the ownership and operation of the Transferred
Assets as Buyer shall from time to time reasonably request and will afford Buyer
and its employees, officers, accountants, attorneys, agents and other authorized
representatives access to Seller's offices, properties, books, records,
contracts and documents and will be given the opportunity to ask questions of,
and receive answers from, representatives of Seller with respect to the Business
and the Transferred Assets. No investigations by Buyer or its employees,
representatives or agents shall reduce or otherwise affect the obligation or
liability of Seller with respect to any representations, warranties, covenants
or agreements made herein or in any Exhibit, Schedule or other certificate,
instrument, agreement or document executed and delivered in connection with this
Agreement. Each Party will cooperate with the other Party and its employees,
officers, accountants, attorneys, agents and other authorized representatives in
the preparation of any documents or other materials that may be required by any
Governmental Authority.

         8.3      PUBLIC ANNOUNCEMENTS. Until the Closing or termination hereof,
Buyer and Seller will consult in advance on the necessity for, and the timing
and content of, any communications to be made to the public and, subject to
legal constrains, to the form and content of any application or report to be
made to any Governmental Authority that relates to the transactions contemplated
by this Agreement and, except with respect to public announcements or
disclosures that are, in the opinion of the Party proposing to make the
announcement or disclosure, legally required to be made, all public
announcements and disclosures shall require the consent of Buyer and Seller,
which consent shall not be unreasonably withheld.

         8.4      ACTIONS PENDING CLOSING. From the date hereof until the 
Closing, except as contemplated by this Agreement, Seller represents, warrants
and covenants that, unless the prior written consent of Buyer is obtained, it
will not take any direct or indirect action that would result in a violation of
any of the following:

                  (a) Seller will operate the Transferred Assets diligently and
         in the usual, regular and ordinary manner.

                  (b) Seller will not enter into or modify any contract or
         commitment not in the usual and ordinary course of its business
         consistent with past business practices, including without limitation,
         the Producer Contracts, or engage in any transaction not in the usual
         and ordinary course of its business consistent with past business
         practices that would have an adverse effect on the throughput of
         volumes through the Transferred Assets.

                  (c) Seller will not enter into any contract or commitment for
         the purchase of merchandise that would require any payment by Buyer
         after the Closing.

                  (d) Seller will not:

                      (i) create, assume or permit to exist any Lien upon any of
                  the Transferred Assets, whether now owned or hereafter
                  acquired;



                                      -22-
<PAGE>   27




                      (ii) sell, assign, lease or otherwise transfer or dispose
                  of any of the Transferred Assets; or

                      (iii) enter into any transaction, contract or commitment
                  that, by reason of its size or otherwise, affects the
                  Transferred Assets and is not in the ordinary course of
                  business as customarily and now conducted.

                  (e) All tangible property of Seller that constitute part of
         the Transferred Assets will be maintained in good working order,
         condition and repair, ordinary wear and tear excepted, in accordance
         with past practice, and in compliance with all applicable agreements,
         laws and regulations.

                  (f) Seller will maintain insurance on the Transferred Assets
         in accordance with Seller's past practices and will not permit any
         insurance policy naming it as a beneficiary or a loss payee to be
         canceled or terminated or any of the coverage thereunder to lapse
         unless simultaneously with such termination or cancellation replacement
         policies providing substantially the same coverage are in full force
         and effect.

                  (g) To the extent related to the ownership and operation of
         the Transferred Assets, Seller will maintain its books, accounts and
         records in the usual, regular and ordinary manner, on a basis
         consistent with prior years and in a businesslike manner in accordance
         with sound commercial practice, and will not introduce any method of
         accounting inconsistent with that used in prior periods, and will
         comply with all laws applicable to it and to the conduct of its
         business.

                  (h) To the extent related to the ownership and operation of
         the Transferred Assets, Seller will timely file all Tax Returns and all
         reports required to be filed with any federal, state or local
         governmental agency or regulatory body.

                  (i) Seller will not enter into any transaction, make any
         agreement or commitment or take any other action that would result in
         any of the representations or warranties contained in this Agreement
         not being true and correct as of the Closing Date.


                                   ARTICLE IX
                            NONCOMPETITION AGREEMENT

         9.1      NONCOMPETITION COVENANT. Seller agrees that, for a period 
beginning on the Effective Time and ending on the earlier of termination of the
Frac Agreement or the twentieth (20th) anniversary of the Effective Time,
neither it nor any of its Affiliates will engage or participate in, or carry on,
directly or indirectly, either as proprietor, partner, stockholder, agent,
consultant, advisor, trustee, Affiliate or otherwise, whether or not for
compensation, the ownership or operation of any natural gas liquid fractionation
facilities (other than the Transferred Assets pursuant to the O&M Agreement)
which frac natural gas liquids produced from the Dedicated Lands.



                                      -23-
<PAGE>   28




         9.2      REASONABLENESS OF COVENANT. Seller acknowledges that the 
covenant provided in Section 9.1 hereof is manifestly reasonable on its face and
is no more restrictive than is required for the protection of Buyer in its
acquisition and operation of the Transferred Assets in that such covenant is
given in consideration for Buyer's performance of its obligations under this
Agreement and the other agreements called for herein. In the event the
provisions of Section 9.1 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.

         9.3      INJUNCTIVE RELIEF. It is specifically understood and agreed 
that any breach or threatened breach of the provisions of Section 9.1 hereof is
likely to result in irreparable harm to Buyer and that an action at law for
damages alone will be an inadequate remedy for such breach or threatened breach,
and that Buyer would suffer irreparable harm in the event Seller fails to comply
with its obligations hereunder. Therefore, in addition to any other remedy that
may be available to it, Buyer shall be entitled to enforce the specific
performance of Section 9.1 by Seller 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. The
provisions of Article XV shall not be applicable to this Article IX or to the
enforcement of its provisions.


                                    ARTICLE X
                              ADDITIONAL AGREEMENTS

         10.1     DELIVERY OF CORPORATE DOCUMENTS. Seller shall deliver to Buyer
a copy of all Records, including computer disks reflecting any books or records,
documents or other papers, or other information or data relating to the
ownership or operation of the Transferred Assets stored on any electronic media,
including computers. Seller agrees that, Buyer and its authorized
representatives, upon the execution of Seller's standard confidentiality
agreement, shall have the right to inspect and, at Buyer's 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 ownership and operation of the Transferred
Assets as are retained by Seller or its Affiliates.

         10.2     FURTHER ASSURANCES. Seller shall execute, acknowledge and 
deliver or cause to be executed, acknowledged and delivered to Buyer at Closing
the Conveyance Documents and other instruments of transfer, assignment and
conveyance, in form and substance satisfactory to counsel for Buyer, as shall be
necessary or desirable to vest in Buyer all the right, title and interest in and
to the Transferred Assets free and clear of all Liens (including the release of
all Liens of record) and shall use commercially reasonable efforts to cause to
be taken the other action as Buyer reasonably may require to more effectively
implement and carry into effect the transactions contemplated by this Agreement.

         10.3     COOPERATION AFTER CLOSING.

                  (a) Seller and Buyer shall cooperate with each other during
         the period ending twenty (20) years after the Closing in clearing the
         title to any of the Transferred Assets to Buyer pursuant hereto if
         Seller's title to any such property


                                      -24-
<PAGE>   29




         as of the Closing Date, shall be defective, not marketable or
         nonassignable. In this connection, Seller shall take all commercially
         reasonable action, including the furnishing of documents and evidences
         of title and assistance in the preparation and trial of any necessary
         litigation, to clear title to any the property, all of which shall be
         at the expense of Seller.

                  (b) For the greater of five years from the Closing Date and
         the period as may be required by any statute, regulation or
         Governmental Authority or any then pending litigation, Buyer shall
         permit Seller and its representatives reasonable access to the Records
         that are transferred to Buyer in connection herewith in anticipation
         of, or preparation for, existing or future litigation or any Tax audit
         which Seller or any of its Affiliates is involved and which is related
         to the Business or the Transferred Assets, during regular business
         hours and upon reasonable notice at Buyer's principal places of
         business or at any location where the Records are stored; provided that
         (i) any access shall be had or done in a manner so as to not interfere
         with the normal conduct of the Business, (ii) Buyer shall not be
         required to provide access to any confidential record or records, the
         disclosure of which would violate any statute or regulation or
         applicable confidentiality agreement with any Person, and (iii) Buyer
         shall not be required to provide access to any confidential record or
         records, the disclosure of which would cause Buyer or any of its
         Affiliates to waive its attorney-client privilege or attorney work
         product privilege.

                  (c) For the greater of five years from the Closing Date and
         the period as may be required by any statute, regulation or
         Governmental Authority or any then pending litigation, Seller shall
         permit Buyer and its representatives reasonable access to the general
         business records and files of Seller in anticipation of, or preparation
         for, existing or future litigation or any Tax audit in which Buyer or
         any of its affiliates is involved and which is related to the Business
         or the Transferred Assets, during regular business hours and upon
         reasonable notice at Seller's principal places of business or at any
         location where the records or files are stored; provided that (i) any
         access shall be had or done in a manner so as to not interfere with the
         normal conduct of Seller's business, (ii) Seller shall not be required
         to provide access to any confidential record or records, the disclosure
         of which would violate any statute or regulation or applicable
         confidentiality agreement with any Person, and (iii) Seller shall not
         be required to provide access to any confidential records or files, the
         disclosure of which would cause Seller or any of its Affiliates to
         waive its attorney-client privilege or attorney work product privilege.

         10.4     CONTINUATION OF OPERATIONS; RIGHT OF FIRST REFUSAL.

                  (a) Nothing in this Agreement, in any Exhibit or Schedule
         hereto, or in any agreement, instrument or other document executed or
         delivered in connection with this Agreement shall require Buyer to
         continue its business or operations or to manage and operate the
         Transferred Assets. Seller acknowledges and agrees that Buyer, in its
         sole discretion, may continue, manage, modify or discontinue its
         operations, liquidate or otherwise change or cease its operations.



                                      -25-
<PAGE>   30




                  (b) Notwithstanding the foregoing, should Buyer elect to
         discontinue, liquidate, materially change or cease operation of the
         Transferred Assets, it will give Seller at least ninety (90) days prior
         written notice thereof, and Seller shall have a period of thirty (30)
         days after receipt of Buyer's notice to deliver a written notice to
         Buyer that it elects to acquire the Transferred Assets. If Seller
         elects to acquire the Transferred Assets, Buyer shall, upon receipt of
         payment from Seller of the fair market value (as defined below) of the
         Transferred Assets, convey the same to Seller free and clear of all
         Liens and Claims created by, through or under Buyer. For purposes of
         this Section 10.4, "fair market value" shall be the fair market value
         of the Transferred Assets as of the date of the notice from Buyer and
         as determined by an independent appraiser acceptable to both parties,
         such acceptance not to be unreasonably withheld. Such independent
         appraiser shall be someone with at least ten years experience in the
         gas processing industry.

                  (c) Should Buyer wish to sell or otherwise transfer the
         Transferred Assets or to sell or otherwise transfer such assets
         together with the Frac Agreement, the O&M Agreement, the Lease
         Agreement and/or the Sublease Agreement (collectively the "Project
         Agreements") either directly or indirectly through a merger,
         consolidation, amalgamation or otherwise, or should Buyer receive an
         offer, to purchase any of the Transferred Assets and/or the Project
         Agreements, whether directly or indirectly through a merger,
         consolidation, amalgamation or otherwise, which offer Buyer wishes to
         accept, Buyer shall furnish to Seller in writing the material
         provisions of such proposed sale, transfer or purchase (the "Offer
         Notice"). Seller shall have thirty (30) days after receipt of the Offer
         Notice to give written notice of its election to acquire such assets
         and/or agreements described in the Offer Notice for the consideration
         and subject to the terms and conditions set forth in the Offer Notice.
         If Seller fails to respond within such thirty (30) day period or elects
         not to acquire such assets and/or agreements, Buyer shall be free for a
         period of six (6) months from the end of such thirty (30) day period to
         transfer the Transferred Assets and/or the Project Agreements, as may
         be the case, for consideration and under terms and conditions no less
         favorable to Buyer than those set forth in the Offer Notice.

                  (d) Notwithstanding the foregoing provisions of this Section
         10.4, Buyer shall be free to sell or otherwise transfer the Transferred
         Assets and/or the Subject Agreements to any Affiliate of either Buyer
         or Seller with no obligation to advise Seller of such sale or transfer
         and without the creation of the rights provided Seller in this Section
         10.4.

                  (e) Any purchase by Seller under this Section 10.4 shall close
         within sixty (60) days of Seller's notice of acceptance. Such period of
         time shall be extended as reasonably necessary to obtain all required
         regulatory approvals, if any. Buyer and Seller shall use all reasonable
         efforts to effectuate any such transfer. The failure of Seller to close
         within such time period, unless due to the fault of Buyer, shall permit
         Buyer to sell or transfer the assets in question without obligation to
         Seller.

                  (f) In the event of a sale or transfer to Seller pursuant to
         10.4(b) or (c), both Parties will be released from all obligations
         under the Project Documents except for



                                      -26-
<PAGE>   31




         those that continue beyond termination of their respective agreement,
         and Seller shall be released from the obligations of Article IX hereof.

         10.5     Additional Undertakings. Seller will deliver to Buyer,
sufficiently prior to the Closing Date so that Buyer may have reasonable
opportunity to inspect same, a true and correct, detailed list of (i) all
permits and other items described in Section 5.3(b), and (ii) all items
comprising the Transferred Assets, each list providing such information as Buyer
may reasonably request. Additionally, Seller will deliver to Buyer within six
(6) months of the Closing Date a list of all Producer Contracts in effect as of
the Effective Date, including accurate and complete information with respect to
the contract number, date, contract parties, term of agreement and whether such
Producer Contract provides for fractionation of liquids by Seller or an
Affiliate for each such contract.

         10.6     Identification of Buyer's Property. Seller will cooperate with
Buyer in permitting Buyer to place appropriate signs or other notices on the
Transferred Assets to indicate ownership of such assets by Buyer. Such signs or
other notices shall be reasonable in terms of size and location.

         10.7     Interim Operations. During the period beginning on the 
Effective Date and ending on the Closing Date, Seller agrees that it will
operate the Transferred Assets as called for by the O&M Agreement as if such
agreement were in effect. The Parties agree that during this interim operating
period the Parties will receive the economic benefit of such operations of the
Transferred Assets as fully and completely as if the Purchase Documents were in
effect. Should the Closing not occur, however, the operations of the Transferred
Assets during this interim period shall be solely for the account of Seller.

                                   ARTICLE XI
                                 INDEMNIFICATION

         11.1     SELLER'S INDEMNITY. Assuming the Closing occurs and subject to
the provisions of this Article XI, Seller agrees to indemnify, defend and hold
Buyer and its Affiliates and their respective officers, directors, shareholders,
unitholders, members, managers, agents, employees, representatives, successors
and assigns (said persons being sometimes referred to in this Section 11.1 as
"Buyer Indemnitees") harmless from and against and in respect of any Claims and
Losses (collectively the "Buyer's Damages"), arising out of or resulting from,
and shall pay the Buyer Indemnitees the full amount of Buyer's Damages that
Buyer Indemnitees may be obligated to pay on account of:

                  (a) any misrepresentation, breach of warranty or failure to
         perform any covenant or agreement made or undertaken by Seller in this
         Agreement or any misrepresentation in or omission from any other
         agreement, certificate, Schedule, Exhibit or writing delivered to Buyer
         pursuant to this Agreement;

                  (b) the Retained Liabilities; or

                  (c) The ownership or operation of the Transferred Assets , or
         the creation, existence or occurrence of any fact or event on or prior
         to the Effective Time related to the operation of the Transferred
         Assets.


                                      -27-
<PAGE>   32




         11.2     ENVIRONMENTAL INDEMNIFICATION. Assuming the Closing occurs, 
Seller agrees to indemnify, defend and hold each Buyer Indemnitee harmless from
and against and in respect of any and all Environmental Liabilities that may be
imposed upon or incurred by Buyer, arising out of or in connection with (a) the
acts or omissions of any Person prior to the Effective Time relating to the
ownership or operation of the Transferred Assets, or any business conducted at
the Plants; (b) any act or omission of Seller relating to the Plants (other than
an act or omission by Buyer in the operation of the Transferred Assets after the
Effective Time, but excluding Buyer's failure to detect or remedy any existing
environmental conditions or any Environmental Liabilities existing on or prior
to the Effective Time); or (c) any breach by Seller of a representation or
warranty contained in Section 5.10 (collectively, "Environmental Losses").

         11.3     BUYER'S INDEMNITY. Assuming the Closing occurs and subject to
the provisions of this Article XI and the provisions of the other Purchase
Documents (the indemnification provisions of which shall control over the
provisions of this Section 11.3), Buyer agrees to indemnify, defend and hold
Seller and its Affiliates and their respective officers, directors,
shareholders, unitholders, members, managers, agents, employees,
representatives, successors and assigns (said persons being sometimes referred
to in this Section 11.3 as the "Seller Indemnitees") harmless from and against
any Claims and Losses (collectively "Seller's Damages"), arising out of or
resulting from, and shall pay the Seller Indemnitees the full amount of Seller's
Damages that the Seller Indemnitees may be obligated to pay on account of:

                  (a) any misrepresentation, breach of warranty or failure to
         perform any covenant or agreement made or undertaken by Buyer in this
         Agreement or any misrepresentation in or omission from any other
         agreement, certificate, Schedule, Exhibit or writing delivered to
         Seller pursuant to this Agreement;

                  (b) The ownership or operation of the Transferred Assets, or
         the creation, existence or occurrence of any fact or event subsequent
         to the Effective Time related to the operation of the Transferred
         Assets; or

                  (c) Any and all Environmental Liabilities that may be imposed
         upon or incurred by Seller, arising out of or in connection with the
         acts or omissions of any Person (other than Seller) on and after the
         Effective Time relating to the Transferred Assets,

         11.4     PROCEDURE. All claims for indemnification by a party under
this Article XI (the party claiming indemnification and the party against whom
such claims are asserted being hereinafter called the "Indemnified Party" and
the "Indemnifying Party", respectively) shall be asserted and resolved as
follows:

                  (a) In the event that any Claim for which an Indemnifying
         Party would be liable to an Indemnified Party hereunder is asserted
         against or sought to be collected from such Indemnified Party by a
         third party, such Indemnified Party shall, within 45 calendar days of
         the receipt thereof, give notice (the "Claim Notice") to the
         Indemnifying Party of such Claim, specifying the nature of and specific
         basis for such Claim and the amount or the estimated amount thereof to
         the extent then feasible, which estimate shall not be binding upon the
         Indemnifying Party in its effort to collect the final amount of such
         Claim. The failure to give any such notice shall not affect the


                                      -28-
<PAGE>   33




         rights of the Indemnified Party to indemnification hereunder unless the
         Indemnified Party has proceeded to contest, defend or settle the Claim
         with respect to which it has failed to give prior notice to the
         Indemnifying Party. Additionally, to the extent the Indemnifying Party
         is prejudiced thereby, the failure to so notify the Indemnifying Party
         of any such Claims 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.

                  (b) The Indemnifying Party shall be given the opportunity, at
         its cost and expense, to contest and defend by all appropriate legal
         proceedings any Claim with respect to which it is called upon to
         indemnify the Indemnified Party under the provisions of this Agreement;
         provided, however, that notice of the intention so to contest and
         defend shall be delivered by the Indemnifying Party to the Indemnified
         Party within thirty (30) days following receipt of the notice provided
         for in Section 11.4(a) above. If the Indemnifying Party does not give
         notice to the Indemnified Party of its election to contest and defend
         any such Claim within such period then the Indemnifying Party shall be
         bound by the result obtained with respect thereto by the Indemnified
         Party and shall be responsible for all costs incurred in connection
         therewith. The Claim which the Indemnifying Party elects to contest and
         defend may be conducted in the name and on behalf of the Indemnifying
         Party or the Indemnified Party as may be appropriate. Such Claim shall
         be conducted by counsel employed by the Indemnifying Party who shall be
         reasonably satisfactory to the Indemnified Party, and the Indemnified
         Party shall have the right to participate in such Claim and to be
         represented by counsel of its own choosing at its cost and expense. If
         the Indemnified Party joins in any such Claim, the Indemnifying Party
         shall have full authority to determine all action to be taken with
         respect thereto; provided that if the Indemnifying Party reserves its
         rights with respect to its indemnification obligations under this
         Agreement as to such Claim, then the Indemnified Party shall have the
         full authority to determine all action to be taken with respect
         thereto. At any time after the commencement of defense of any Claim,
         the Indemnifying Party may request the Indemnified Party to agree in
         writing to the abandonment of such contest or to the payment or
         compromise by the Indemnifying Party of the asserted Claim, provided
         the Indemnifying Party agrees in writing to be solely liable for all
         losses relating to such Claim; whereupon such action shall be taken
         unless the Indemnified Party determines that the contest should be
         continued and notifies the Indemnifying Party in writing within fifteen
         (15) days of such request from the Indemnifying Party. In the event
         that the Indemnified Party determines that the contest should be
         continued, the amount for which the Indemnifying Party would otherwise
         be liable hereunder shall not exceed the amount which the Indemnifying
         Party had agreed to pay in payment or consideration of such Claim,
         provided the other party to the contested Claim had agreed in writing
         to accept such amount in payment or compromise of the Claim as of the
         time the Indemnifying Party made its request therefor to the
         Indemnified Party, and further provided that, under such proposed
         compromise, the Indemnified Party would be fully and completely
         released from any further liability or obligation with respect to the
         matters which are the subject of such contested Claim.




                                      -29-
<PAGE>   34




                  (c) If requested by the Indemnifying Party, the Indemnified
         Party agrees, at the Indemnifying Party's expense, to cooperate with
         the Indemnifying Party and its counsel in contesting any Claim 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 any cross-complaint against any
         person other than an affiliate of the Indemnified Party.

                  (d) If any Indemnified Party should have a Claim against the
         Indemnifying Party hereunder that does not involve a Claim 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. If the Indemnifying Party disputes
         such Claim, such dispute shall be resolved in the manner set forth in
         Article XV hereof.

                  (e) The Indemnified Party agrees to afford the Indemnifying
         Party and its counsel the opportunity, at the Indemnifying Party's
         expense, to be present at, and to participate in, conferences with all
         Persons, asserting any Action against the Indemnified Party and
         conferences with representatives of or counsel for such Persons.

         11.5     INDEMNIFICATION THRESHOLD. Neither Seller nor Buyer shall be
obligated to indemnify the other Party until the Buyer's Damages or Seller's
Damages, as may be the case, have exceeded in the aggregate $100,000, and then
such Indemnifying Party's obligation to indemnify shall apply only to such
excess amounts.

         11.6     EXPRESS NEGLIGENCE. TO THE EXTENT A PARTY HEREUNDER IS
ENTITLED TO INDEMNIFICATION UNDER THIS ARTICLE XI, SUCH INDEMNIFICATION SHALL
APPLY NOTWITHSTANDING THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL OR OTHER ACT BY
THE PARTY TO BE SO INDEMNIFIED AND NOTWITHSTANDING SUCH ACT MAY OCCUR IN THE
FUTURE, IT BEING THE INTENT OF THE PARTIES HERETO THAT SUCH INDEMNIFICATION
SHALL APPLY TO ALL SUCH ACTS.


                                   ARTICLE XII
                                   TERMINATION

         12.1     Efforts to Satisfy Conditions. Buyer and Seller agree to use 
their commercially reasonable efforts to bring about the satisfaction of the
conditions specified in Article VII hereof.

         12.2     Termination. The obligations to close the transactions
contemplated by this Agreement may be terminated by:

                  (a) mutual agreement of Buyer and Seller;

                  (b) Buyer, if a material default shall be made in the
         observance or performance by Seller of any agreements and covenants of
         Seller herein contained, or if there shall have been a breach by Seller
         of any warranties and representations and the same is not cured within
         thirty days after receipt of notice from Buyer;


                                      -30-
<PAGE>   35




                  (c) Seller, if a material default shall be made by Buyer in
         the observance or performance by Buyer of any agreements and covenants
         of Buyer herein contained, or if there shall have been a breach by
         Buyer of any warranties and representations and the same is not cured
         within thirty days after receipt of notice from Seller;

                  (d) Buyer, if Seller has been unable to satisfy all conditions
         to the Closing set forth in Section 7.1 by June 1, 1998; or

                  (e) Seller, if Buyer has been unable to satisfy all conditions
         to the Closing set forth in Section 7.2 by June 1, 1998.

         12.3     LIABILITY UPON TERMINATION. If the obligation to close the
transactions contemplated by this Agreement is terminated pursuant to any
provision of Section 12.2, then neither party shall be under any liability to
the other party hereto other than as provided in Section 2.3(a) hereof;
provided, however, that nothing herein shall relieve any party from liability
for any breach of or default under this Agreement occurring prior to such
termination. Except as set forth in this Section 12.3, the rights of the parties
shall not terminate upon the failure to close the transactions contemplated
hereby. Buyer shall have the right to specific performance if the Agreement is
not otherwise terminated.


                                  ARTICLE XIII

                        NATURE OF STATEMENTS AND SURVIVAL
                         OF COVENANTS, REPRESENTATIONS,
                            WARRANTIES AND AGREEMENTS

         All statements of fact contained in any written statement, certificate,
instrument or document delivered by or on behalf of Seller or Buyer pursuant to
this Agreement or in connection with the transactions contemplated hereby shall
be deemed representations and warranties of Seller or Buyer, respectively. All
representations, warranties, covenants and agreements made by the Parties in
this Agreement or pursuant hereto shall survive the Closing without limit,
except as hereinafter provided, notwithstanding any investigation heretofore or
hereafter made by or on behalf of any of them and shall not be deemed merged
into any instruments or agreements delivered at Closing. All representations and
warranties of the Parties shall survive until the tenth anniversary of the
Effective Time.


                                   ARTICLE XIV
                                    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.



                                      -31-
<PAGE>   36




Notwithstanding the foregoing, each Party agrees to share equally the filing fee
for filings made pursuant to the HSR Act.

                                   ARTICLE XV
                                    DISPUTES

         15.1     Negotiation. In the event of any controversy or claim, whether
based in contract, tort or otherwise, arising out of or relating to this
Agreement or the scope, breach, termination or validity of this Agreement (a
"Claim"), the Parties shall promptly seek to resolve any such Claim by
negotiations between senior executives of the Parties who have authority to
settle the Claim. When a Party believes there is a Claim under this Agreement,
that Party will give the other Party written notice of the Claim. Within thirty
(30) days after receipt of such notice, the receiving Party shall submit to the
other a written response. Both the notice and response shall include (i) a
statement of each Party'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 Party. In the event the Claim
involves a claim arising out of the actions of any person or entity not a
signatory to this Agreement, the receiving Party shall have such additional time
as necessary, not to exceed an additional thirty (30) days, to investigate the
Claim 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 Claim. If one of the
executives intends to be accompanied at a meeting by an attorney, the other
executive shall be given at least five (5) working days' notice of such
intention and may also be accompanied by an attorney. All negotiations and
communications pursuant to this Article 15 shall be treated and maintained by
the Parties as confidential information and shall be treated as compromise and
settlement negotiations for the purposes of the Federal and State Rules of
Evidence .

         15.2     Failure to Resolve. If the Claim has not been resolved within
sixty (60) days after the date of the response given pursuant to Section 15.1
above, or such additional time, if any, that the Parties mutually agree to in
writing, or if the Party receiving such notice denies the applicability of the
provisions of Section 15.1 or otherwise refuses to participate under the
provisions of Section 15.1, either Party may initiate binding arbitration
pursuant to the provisions of Section 15.3 below.

         15.3     Arbitration. Any Claims not settled pursuant to the foregoing
provisions shall be submitted to binding arbitration in accordance with the
following provisions. Arbitration shall be the sole and exclusive remedy of the
Parties in connection with any Claims hereunder.

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

         (b)      Within fifteen (15) days after receipt of such demand, the
                  receiving Party shall name its arbitrator. If the receiving
                  Party fails or refuses to name its arbitrator within such
                  15-day period, the second arbitrator shall be appointed, upon
                  request of the Party demanding arbitration, by the Chief U.S.
                  District Court



                                      -32-
<PAGE>   37




                  Judge for the District of Colorado 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 Party may request the Chief U.S.
                  District Court Judge for the District of Colorado 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 Party, 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 Party
                  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.

         (d)      Each arbitrator selected by the Parties 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 Parties are not required to be neutral, but
                  the third arbitrator shall be neutral and shall be a certified
                  public accountant. If neither of the arbitrators appointed by
                  or on behalf of the Parties is a retired judge, then the third
                  arbitrator shall be a retired judge.

         (e)      The Parties hereto hereby request and consent to the three (3)
                  arbitrators conducting a hearing in Denver, Colorado 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 Parties shall present such
                  evidence and witnesses as they may choose, with or without
                  counsel.

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

         (g)      The Federal Rules of Civil Procedure, as modified or
                  supplemented by the local rules of civil procedure for the
                  U.S. District Court of Colorado, shall apply in the
                  arbitration. The Parties shall make their witnesses available
                  in a timely manner for discovery pursuant to such rules. If a
                  Party 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.

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

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


                                      -33-
<PAGE>   38




         (j)      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 any Party as a final judgment in such court. There
                  shall be no grounds for appeal of any arbitration award
                  hereunder.

         (k)      The defenses of statute of limitations and laches shall be
                  tolled from and after the date a Party gives the other Party
                  written notice of a Claim as provided in Section 15.1 above
                  until such time as the Claim has been resolved pursuant to
                  Section 15.1 , or an arbitration award has been entered
                  pursuant to Section 15.3.

         15.4     Recovery of Costs and Attorneys' Fees. In the event 
arbitration (or, despite the Parties agreement to the Claims through binding
arbitration, litigation) arising out of this Agreement is initiated by either
Party, the prevailing Party, 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.

         15.5     Choice of Forum. If, despite the Parties' agreement to submit 
any Claims 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 and County of Denver, Colorado.

         15.6     Jury Waivers.  THE PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO
DEMAND A TRIAL BY JURY.

         15.7     Limitation of Damages. WHETHER OR NOT OCCASIONED BY A DEFAULT 
OR OTHER BREACH OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY FOR SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, LOSS OF PROFITS, OR
CONSEQUENTIAL DAMAGES.

         15.8     Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF COLORADO, WITHOUT REGARD TO ANY CONFLICT-OF-LAWS PROVISION
THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.

         15.9     LIMITATION OF DAMAGES. WHETHER OR NOT OCCASIONED BY A DEFAULT
OR OTHER BREACH OF THIS FRAC AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR SPECIAL DAMAGES, EXEMPLARY OR PUNITIVE DAMAGES, LOSS OF PROFITS, OR
CONSEQUENTIAL DAMAGES.

                                   ARTICLE XVI
                               GENERAL PROVISIONS

         16.1     FURTHER ASSURANCES. At any time or from time to time at and 
after the Closing, each of the Parties shall, at the request of the other,
execute and deliver or cause to



                                      -34-
<PAGE>   39




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
intents and purposes of this Agreement.

         16.2     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 Seller:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Telephone: (303) 595-3331
                           Facsimile: (303) 893-2613
                           Attn:  President

                  and copy to:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Telephone: (303) 595-3331
                           Facsimile: (303) 893-8902
                           Attn: General Counsel

                  If to Buyer:

                           TEPPCO Colorado, LLC
                           2929 Allen Parkway, Suite 3200
                           Houston, Texas  77019
                           Attention:  President
                           Telephone:  (713) 759-3636
                           Facsimile:  (713) 759-3957





                                      -35-
<PAGE>   40



                  and copy to:

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


         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 16.2. 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.

         16.3     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 Colorado, without regard to any
conflict-of-laws provision thereof that would otherwise require the application
of the law of any other jurisdiction.

         16.4     ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, 
together with the other agreements, conveyance documents and other transfer
documents pursuant to which the Transferred Assets are to be transferred (the
"Transfer Documents"), the other Purchase Agreements and all certificates,
documents, instruments and writings that are delivered pursuant hereto and
thereto sets forth the entire agreement and understanding of the Parties with
respect of 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 other Purchase
Agreements, the Transfer Documents, the certificates, documents, instruments and
writings that are delivered pursuant hereto and thereto, 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.

         16.5     ASSIGNMENT. Neither Party to this Agreement may sell, 
transfer, assign, pledge or hypothecate its rights, interests or obligations
under this Agreement without the consent of the other Party.

         16.6     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.


                                      -36-
<PAGE>   41




         16.7     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 or, in the
case 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.

         16.8     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.

         16.9     WAIVER. The waiver of any breach of any term or condition of 
this Agreement shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition.

         16.10    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.

         16.11    NO THIRD PARTY BENEFICIARIES. Except to the extent a third 
party 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.

         16.12    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.



                                      -37-
<PAGE>   42



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


                                     SELLER:

                                     DUKE ENERGY FIELD SERVICES, INC.




                                     By: /s/ DAVID G. THOMPSON
                                        --------------------------------------
                                     Name:   David G. Thompson
                                          ------------------------------------  
                                     Title:  Senior Vice President
                                           -----------------------------------  





                                     BUYER:

                                     TEPPCO COLORADO, LLC.



                                     By: /s/ CHARLES H. LEONARD
                                        --------------------------------------
                                     Name:   Charles H. Leonard
                                          ------------------------------------
                                     Title:  Manager
                                           -----------------------------------  




                                      -38-

<PAGE>   43

                               Disclosure Letter

                                       to

                            Asset Purchase Agreement

                                    between

                        Duke Energy Field Services, Inc.

                                      and

                              TEPPCO Colorado, LLC

                                 March 31, 1998
<PAGE>   44

                                 Section 5.3(a)
                 To the Disclosure Letter dated March 31, 1998

         1.      Hart-Scott-Rodino Antitrust Improvement Act of 1976.
<PAGE>   45

                                 Section 5.3(b)
                 To the Disclosure Letter dated March 31, 1998

         To be completed prior to Closing Date.
<PAGE>   46

                                 Section 5.4(c)
                 To the Disclosure Letter dated March 31, 1998

                This Section 5.4(c) is Intentionally left blank.
<PAGE>   47

                                 Section 5.5(a)
                 To the Disclosure Letter dated March 31, 1998

         1.      Spindle Lease Agreement.

         2.      Award of Arbitration between Nordic Petroleums, Inc.
                 (Claimant) and Natural Gas Associates, Inc, dated July 18,
                 1986.
<PAGE>   48
                                 SECTION 5.5(b)
                 To the Disclosure Letter dated March 31, 1998

WELD SYSTEM

     GPA.001.K           Acelte Oil
     GPA.002.K           Snyder Oil Company (was JRC)
     GPA.003.K           Buck Ltd.
     GPA.005.K           Sovereign Oil Co.
     GPA.006.K           Cody/Nordell
     GPA.007.K           Golden Buckeye (Combined w/GPA.001.L)
     GPA.008.KP          MGF Oil (A1)
     GPA.010.KP          Kauffman & Weinberger
     GPA.013.KP          Rocky Mountain Production Co.
     GPA.016.K           Great Western Oil Co., Inc.
     GPA.017.K           Energy Minerals Corp.
     GPA.028.K           CDM Oil & Gas
     GPA.029.KP          Centennial Petroleum, Inc.
     GPA.029.KP          Decalta International Corp.
     GPA.032.K           Machil-Ross Petroleum
     GPA.034.KPT         Noarko Resources, Inc.
     GPA.035             Shepler & Thomas, Inc.
     GPA.038.K           Discovery Oil, Ltd.
     GPA.039.K           Blue Chip Oil, Inc.
     GPA.042.K           H&C Colton Company
     GPA.043.K           H&C Colton Company
     GPA.044.K           Colton & Colton
     GPA.045.KP          Morgan Energy Corp.
     GRA.045.KP          Sunshine Valley Petroleum
     GPA.049.KPT         Rex Monahan
     GPA.057.K           Basin Exploration, Inc.
     GPA.062.K           Martinex Corporation
     GPA.064.K           Weeks Energy Minerals Corp.
     GPA.066.K           Martinex Corporation
     GPA.068.K           Morgan Energy
     GPA.069.K           Eddy Oil Company
     GPA.070.K           Universal Oil & Gas
     GPA.071.K           Snyder Oil Company (was JRC)
     GPA.072.K           Amoco Production Company
     GPA.073.KP          HELMMCO, Private & Gary-Williams
     GPA.076.K           Snyder Oil Company (was Energy Oil, Inc.)
     GPA.078.K           Richardson Oil
     GPA.079.K           Basin Exploration
     GPA.081.K           Richardson Oil
     GPA.083.K           Clark Energy Corporation
     GPA.094.K           Sunshine Valley Petroleum
     GPA.095.K           Conquest Oil Company
     GPA.096.K           Mizel Petro Resources
     GPA.099.K           Lyco Energy
     GPA.101.K           Universal Oil & Gas, Inc.
     GPA.102.KP          Kauffman & Weinberger
     GPA.103.K           Rock Oil Corporation
     GPA.105.K           Universal Oil & Gas
     GPA.106.K           Sunshine Valley Petroleum
     GPA.107.KP          Shenandoah Production Co.
     GPA.108.K           Bataa Oil, Inc.
     GPA.110.K           Blue Chip Oil, Inc.
<PAGE>   49
WELD SYSTEM (Continued)

     GPA.111.KP          Basin Exploration, Inc.
     GPA.113.K           Morgan Energy Corp.
     GPA.114.K           Decalta International
     GPA.117.K           Bataa Oil, Inc.
     GPA.119.K           Barrett Energy Co.
     GPA.120.K           Mission Oil Corporation (replaces GPA.030.K)
     GPA.121.K           Gerrity Drilling
     GPA.123.K           Golden Buckeye (Combined with GPA.001.L)
     GPA.124.K           Amoco Production Co.
                         (Residue Gas Trans/Purchase)
     GPA.125.K           Kersey Limited Pshp.
     GPA.127.K           Eddy Oil Company
     GPA.128.K           Lyco Energy
     GPA.130.K           Barrett Energy Co.
     GPA.132.K           Lyco Acquisition 1984-1
     GPA.135.K           Eddy Oil Company
     GPA.137.K           Energy Search & Mgmt.
     GPA.138.K           The Gerrity Company, Inc.
     GPA.139.K           Eagle Oil & Gas
     GPA.141.K           Richardson Oil Company
     GPA.142.KP          Barrett Energy Company
     GPA.143.KP          The Quinoco Companies
     GPA.144.K           Basin Exploration, Inc.
     GPA.145.K           Elk Exploration
     GPA.146.K           Bataa, Inc.
     GPA.149.K           Conquest Oil Company
     GPA.154.K           Bellwether Expl. Co.
     GPA.156.K           Eagle Oil & Gas, Inc.
     GPA.157.K           Cimmarron Oil Inc.
     GPA.158.K           Misahar Investments, Inc.
     GPA.160.K           High Country Resources
     GPA.161.KP          Nielson Enterprises, Inc.
     GPA.162.KP          Boomer-Sooner Field
     GPA.163.K           Brown Investment Company
     GPA.164.K           Morgan Richardson Oper.
     GPA.165.K           Intermountain Oil Co.
     GPA.168.K           Berthoud Gas Company
     GPA.167.K           Bataa Oil, Inc.
     GPA.168.K           B.E.A. Johnson, Inc.
     GPA.169.K           Diamond A Corporation
     GPA.170.K           Basic Earth Science Systems
     GPA.175.K           Pacific Midland Prod.
     GPA.176.K           Parker & Parsley
     GPA.178.K           The Robert W. Gerrity Co.
     GPA.179.K           Francis Energy, Inc.
     GPA.180.K           Bataa Oil, Inc.
     GPA.183.K           Colorado Plains Mgmt. & Invest.
     GPA.185.K           Mandell-Denver Corporation
     GPA.186.K           Mazuma Turnkey Contractors, Inc.
     GPA.187.K           Mazuma Turnkey Contractors, Inc.
     GPA.188.K           Francis Energy, Inc.
     GPA.189.K           Francis Energy, Inc.
     GPA.193.K           Acelte Energy Corporation
     GPA.195.K           Macey & Mershon Oil Inc.
     GPA.197.K           Freedom Energy, Inc.
     GPA.198.KP          Omimex Petroleum, Inc. (Renegade)
     GPA.202.K           Industrial Gas Associates, Inc.
     GPA.210.K           K.P. Kauffman Company, Inc.


                                -2-
<PAGE>   50
WELD SYSTEM (Continued)
                         
     GPA.211.K           Western Gas Supply Company
     GPA.212.K           Elk Exploration, Inc.
     GPA.213.KP          Geo-Tech Production, Inc.
     GPA.214.KP          Omimex Petroleum, Inc.
     GPA.216.K           Fountainhead Resources, Ltd.
     GPA.217.K           Lyco Energy Corporation
     GPA.223.K           Go Pumping and Consulting, Inc.
     GPA.224.K           Kloxin Energy, Inc.
     GPA.227.K           The Robert Gerrity Company
     GPA.228.K           The Robert Gerrity Company
     GPA.229.K           Mendell-Denver Corporation
     GPA.230.K           K.P. Kaufman Company, Inc.
     GPA.231.K           K.P. Kaufman Company, Inc.
     GPA.232.K           Basin Exploration, Inc. (Nielson acreage)
     GPA.233.K           Basin Exploration, Inc. (Byron "J" Sand acreage)
     GPA.235.K           The Gerrity Oil and Gas Corp.
     GPA.236.K           Bataa Oil, Inc.
     GPA.238.K           Greeley Gas Company
     GPA.239.K           Francis Energy, Inc. (Lesser/Spomer Wells)
     GPA.240.K           Francis Energy, Inc. (Plumb No. 1 Well)
     GPA.241.K           Farmoil, Inc.
     GPA.242.K           Unioil, Inc.
     GPA.243.K           Martin Exploration Mgmt. Corp. 
     GPA.244.K           Mendell-Denver Corporation
     GPA.246.K           Western Production Company
     GPA.247.K           Timka Resources, Ltd.
     GPA.248.K           Diamondback Oil Corporation
     GPA.249.K           Blue Chip Oil, Inc.
     GPA.250.K           Francis Energy, Inc.
     GPA.251.K           Snyder Oil Company
     GPA.253.K           Snyder Operating Partnership
                         (Natural Gas Exchange Agr.)
     GPA.255.K           Elk Exploration, Inc.
     GPA.257.K           Morning Fresh Farms, Inc.
     GPA.258.K           Western Production Company
     GPA.260.K           Valley Operating, Inc.
     GPA.264.K           Gerrity Oil & Gas Corporation
     GPA.269.K           Richardson Operating Company
     GPA.267.K           K.P. Kauffman Company, Ltd.
     GPA.268.K           Habersham Energy Company
     GPA.269.K           Oaks Resources Management, Inc.
     GPA.270.K           Sandlin Oil Corporation
     GPA.271.K           Martin Exploration Mgmt. Corp.
     GPA.272.K           North American Resources
     GPA.273.K           Credo Petroleum Corporation
     GPA.274.K           EFTS II, Inc.
     GPA.275.K           CFG Energy, Inc.
     GPA.276.K           Vessels
     GPA.277.K           Parker & Parsley Petroleum Co.
     GPA.278.K           Cache Exploration
     GPA.279.K           Basin Exploration, Inc.
     GPA.280.K           Mendell Petroleum Corporation
     GPA.281.K           Mineral Resources, Inc.
     GPA.283.K           Basin Exploration, Inc.
     GPA.284.K           Barrett Resources Corporation
     GPA.285.K           Byron Oil Industries, Inc.
     GPA.286.K           Markus Production, Inc.
     GPA.287.K           Phil Shepardson
     GPA.288.K           Freedom Energy, Inc.


                                      -3-


<PAGE>   51
     GPA.289.K           Basin Exploration, Inc.
     GPA.290.K           Stephen B. Evans & Co., Alarado Resources Limited and
                         Alarado Resources Corp.
     GPA.291.K           Snyder Oil Corporation
     GPA.292.K           Gusoil-1981, Gusoil-1982 &
                         K.P. Kaufman Company, Inc.
     GPA.293.K           Heflin Energy Corporation
     GPA.294.K           Suzanne D. Bucy
     GPA.295.K           HS Resources, Inc.
     GPA.296.K           Blue Chip Oil, Inc.
     GPA.297.K           Kaiser-Francis Oil Company
     GPA.298.K           Lyco Energy Corporation
     GPA.299.K           Prima Energy
     GPA.300.K           Bataa Oil, Inc.
     GPA.301.K           Unioil, Inc.
     GPA.303.K           Basin Exploration
     GPA.304.K           Bataa Oil, Inc.
     GPA.305.K           Patina Oil & Gas Corporation (formerly Gerrity)
     GPA.306.K           Patina Oil & Gas Corporation (formerly Gerrity)
     GPA.307.K           Prima Oil & Gas Company
     GPA.308.K           Matrix Energy, L.L.C.
     GPA.309.K           CDM Oil & Gas
     GPA.003.E           WEDCO Resources Corp.
     GPA.005.E           Sentry Oil Corp.
     GPA.006.E           CWI Oil and Gas
     GPA.007.E           Trailblazer Oil and Gas (FILES I, II, III) 
     GPA.010.E           Hershey Oil
     GPA.011.E           Emerald Corporation (f/k/a Petromax)
     GPA.013.E           PRC Oil and Gas Company
     GPA.014.E           Catamount Exploration, Inc. (Replaced GPA.069.E)
     GPA.015.E           Hershey Oil Corporation
     GPA.017.E           Decalta International Corp.
     GPA.020.E           Frizzell Oil Company
     GPA.021.E           R.A. Resource, Inc.
     GPA.023.E           SHF Partnership
     GPA.024.E           Bellwether Exploration Co.
     GPA.025.E           HI-TEC Energy, Inc.
     GPA.026.E           Frontier Oil & Gas
     GPA.027.E           Snyder Oil Company
     GPA.028.E           R.A. Resources, Inc.
     GPA.029.E           Frizzell Oil Company
     GPA.030.E           Vantage Oil, Inc.
     GPA.032.E           R.A. Resources, Inc.
     GPA.034.E           Vantage Oil, Inc.
     GPA.035.E           Snyder Oil Company
     GPA.037.E           Sunset Hill Oil Co., Inc.
     GPA.038.E           Energex, Inc.
     GPA.039.E           Gusher Oil & Gas Co., Inc.
     GPA.040.E           Maze Expl./Golden Buckeye (Combined w/GPA.001.L)
     GPA.041.E           Barrett Energy Resources
     GPA.043.E           Aztec Resources Corp.
     GPA.044.E           Morgan Energy Corp.
     GPA.045.E           Cache Exploration
     GPA.046.E           Conquest Oil
     GPA.047.E           Sunshine Valley Petroleum
     GPA.049.E           Blue Chip Oil Co.
     GPA.052.E           Conquest Oil Co.
     GPA.053.E           Sunshine Valley Petroleum Corporation
     GPA.054.E           Lone Star Oil Company


                                      -4-
<PAGE>   52
WELD SYSTEM (Continued)
                         
     GPA.055.E           Sunshine Valley Corp.
     GPA.059.E           Bellwether Exploration
     GPA.063.E           Cowan Oil Company
     GPA.064.E           Grady Oil Company
     GPA.065.E           Jenex Petroleum Corp. (First City Wells)
     GPA.067.E           Blue Chip Oil, Inc.
     GPA.068.E           Jenex Petroleum Corporation (Metro Wells)
     GPA.069.E           Nautilus Equipment, Inc. (Replaces GPA.014.E)
     GPA.071.E           Energy Minerals Corporation
     GPA.072.E           Elwood Oil Company
     GPA.073.E           Lysander Resources
     GPA.074.E           Blue Chip Oil, Inc.
     GPA.076.E           Pantera Energy Corporation
     GPA.078.E           Blue Chip Oil, Inc.
     GPA.080.E           Brooks Exploration Inc.
     GPA.081.E           Brooks Exploration Inc.
     GPA.082.E           Kauffman & Weinberger, Inc.
     GPA.083.E           H&R Well Service
     GPA.084.E           Mendell-Denver Corporation
     GPA.085.E           Francis Energy, Inc.
     GPA.086.E           Rico Resources
     GPA.001.BT          Meco Operating Corporation
     GPA.002.BT          Reider Oil Corporation
     GPA.003.BT          Discovery Oil, Ltd.
     GPA.004.BT          Shepler & Thomas
     GPA.005.BT          Monfort of Colorado
     GPA.006.BT          Sovereign Oil Company
     GPA.008.BT          Jenex Petroleum Corporation (was Petromax)
     GPA.009.BT          Morning Fresh Farm
     GPA.010.BT          Duke L. Phillips, Indiv.
     GPA.011.BT          Elmer E. & Roy Lundvall
     GPA.012.BT          Rex Monahan, Individual
     GPA.014.BT          Power Energy Resources
     GPA.015.BT          Valley View Exploration
     GPA.016.BT          Belwether Exploration Co.
     GPA.019.BT          Martin Exploration Mgmt.
     GPA.020.BT          R.A. Resources
     GPA.024.BT          Morgan Energy Corporation
     GPA.027.BT          Sunshine Valley Petroleum
     GPA.028.BT          Morgan Energy Corporation
     GPA.029.BT          Richardson Oil Company
     GPA.030.BT          Lundvall and Associates
     GPA.032.BT          Bataa Oil, Inc.
     GPA.033.BT          Martinex Corporation
     GPA.034.BT          Morgan Energy Corp.
     GPA.035.BT          Basin Exploration
     GPA.036.BT          Gerrity Drilling
     GPA.037.BT          L.M.S. American Holdings
     GPA.038.BT          BP-34 Limited
     GPA.043.BT          The Gerrity Company, Inc.
     GPA.044.BT          Mayers & Company (replaced GPA.018.BT)
     GPA.046.BT          Lundvall and Associates
     GPA.047.BT          R.A. Resources, Inc.
     GPA.048.BT          Oxford Ltd. Partnership
     GPA.049.BT          Colo. Energy Resources
     GPA.051.BT          HS Resources, Inc. (Successor to Elk Exploration)
     GPA.053.BT          Conquest Oil Company
     GPA.054.BT          Cannon Resources, Inc.
     GPA.058.BT          New London Oil


                                      -5-
<PAGE>   53
WELD SYSTEM (Continued)
                         
     GPA.059.BT          Cache Exploration, Inc.
     GPA.060.BT          New London Oil, Inc.
     GPA.061.BT          New London Oil, Inc.
     GPA.062.BT          Eddy Oil Company
     GPA.063.BT          Lundvall and Associates
     GPA.001.EV          Elk Exploration, Inc. FILE I & II  (Wal-Mart)
     GPA.004.EV          Eddy Oil Company
     GPA.005.EV          Unioil
                         (Unioil Agreements dtd 11/24/84, combined)
     GPA.006.EV          R.A. Resources, Inc.
     GPA.007.EV          Barrett Energy Company
     GPA.001.L           Prima Oil & Gas Company
     GPA.002.L           Cache Resources/Cache Exp.
     GPA.003.L           Bellwether Exploration
     GPA.004.L           Sovereign Oil Company
     GPA.005.L           Clark Energy Corporation
     GPA.006.L           R.A. Resources, Inc.
     GPA.007.L           Coors Energy Company
     GPA.008.L           Unioil
     GPA.009.L           Andrau Enterprises, Inc.
     GPA.010.L           Greeley Gas Company
     GPA.011.L           Sentry Oil Corporation
     GPA.012.L           Petro Noel, Inc.
     GPA.013.L           Eddy Oil
     GPA.014.L           Elwood Oil Company
     GPA.015.L           Vantage Oil, Inc.
     GPA.016.L           Calvin Petroleum Corp.
     GPA.017.L           Wichita Industries, Inc.
     GPA.018.L           Andrau Enterprises, Inc.
     GPA.019.L           Calvin Petroleum Corp.
     GPA.020.L           Conquest Oil, Inc.
     GPA.021.L           Basin Exploration, Inc.
     GPA.022.L           Jason Exploration, Inc.
     GPA.024.L           Pantera
     GPA.025.L           Sunshine Valley
     GPA.026.L           North Colorado Medical Center
     GPA.027.L           University of Northern Colorado
     GPA.028.L           Reider Oil
     GPA.029.L           Lyco Energy
     GPA.030.L           Snyder Oil Company (f/k/a Energy Oil)
     GPA.031.L           Four Star Exploration
     GPA.032.L           Mountain Industrial Gas
     GPA.033.L           Ideal Basic Industries
     GPA.034.L           H&C Colton
     GPA.035.L           Thompson Valley Gas, Inc.
     GPA.036.L           Cannon Resources, Inc.
     GPA.037.L           Bristol Production, Inc.
     GPA.038.L           Energy Minerals Corp.
     GPA.039.L           Jenex Petroleum Corp.
     GPA.040.L           Silverado Oil, Inc.
     GPA.041.L           Eddy Oil Company
     GPA.041.L           Parker & Parsley
     GPA.043.L           Cannon Resources, Inc.
     GPA.044.L           Eagle Oil & Gas, Inc.
     GPA.045.L           New London Oil
     GPA.049.L           Elwood Oil Company
     GPA.050.L           Cache Exploration
     GPA.051.L           Cowan Oil Company
     GPA.053.L           Simmons Energy Company


                                -6-
<PAGE>   54
WELD SYSTEM (Continued)

     GPA.056.L           Jenex Petroleum Corporation
     GPA.057.L           Silverado Oil, Inc.
     GPA.058.L           Coors Energy Company
     GPA.059.L           Cache Exploration, Inc.
     GPA.060.L           Prima Exploration
     GPA.003BGC          Morgan Energy Corporation
     GPA.013.BGC         Howard Buehler
     GPA.015.BGC         Sovereign Oil Company
     GPA.016.BGC    DJ Energy, Inc.
     GPA.002.FR     San Juan Consortium
     GPA.001.PAN    Energy Minerals Corporation
     GPA.002.PAN    Petroleum Energy Corporation
     GPA.003.PAN    Aexco Petroleum, Inc.
     GPA.004.PAN    Shepler & Thomas
     GPA.005.PAN    Davis Oil Company
     GPA.006.PAN    Polfam Exploration Company
     GPA.007.PAN    Schmid Properties
     GPA.008.PAN    Bellwether Exploration Company
     GPA.009.PAN    Jubilee Pipeline
     GPA.010.PAN    D&S Oilfield
     GPA.012.PAN    Colorado Interstate Gas Company
     GPA.013.PAN    Energy Minerals
     GPA.014.PAN    Agland, Incorporated
     GPA.015.PAN    Vessels Oil and Gas Company
     GPA.016.PAN    Industrial Gas Services, Inc.
     GPA.017.PAN    Industrial Gas Services, Inc.
     GPA.018.PAN    Sentry Oil Corporation
     GPA.019.PAN    Pipeline Corporation of Colorado
     GPA.020.PAN    Sun Exploration and Production Co.
     GPA.021.PAN    Classic Petroleum Corp.
     GPA.022.PAN    Energy Minerals Corporation
     GPA.023.PAN    Lynx Exploration Company
     GPA.024.PAN    Regal Petroleum, Ltd.
     GPA.025.PAN    Regal Petroleum, Ltd.
     GPA.026.PAN    Petroleum Energy Corporation
     GPA.027.PAN    Sunset Hill Oil Co.
     GPA.028.PAN    Colorado Gathering and Processing
     GPA.029.PAN    Diversified Operating Corporation
     GPA.030.PAN    Cache Exploration, Inc.
     GPA.031.PAN    Lysander Resources, Inc.
     GPA.032.PAN    Diversified Operating Corporation
     GPA.033.PAN    Jenex Petroleum Corp.
     GPA.034.PAN    Pan Western 1986 Drilling Program
     GPA.035.PAN    Alfred Ward & Son
     GPA.037.PAN    Eagle Energy, Inc.
     GPA.037.PAN    Merrion Oil & Gas Corporation
     GPA.038.PAN    Bristol Production, Inc.
     GPA.039.PAN    Red Wave, Ltd.
     GPA.040.PAN    American Penn Energy, Inc.
     GPA.041.PAN    MGF Oil Corporation
     GPA.043.PAN    Fina Oil & Chemical Company
     GPA.044.PAN    Energy Minerals/Merrion Oil
     GPA.045.PAN    Benton Petroleum Company
     GPA.046.PAN    Weldmor Limited Partnership
     GPA.047.PAN    Energy Minerals Corporation
     GPA.048.PAN    Walsh Production, Inc.
     GPA.049.PAN    Aexco Petroleum, Inc.
     GPA.050.PAN    Damson Gas Processing Corp.
     GPA.053.PAN    Pan Western Energy
     

                                      -7-
<PAGE>   55
WELD SYSTEM (Continued)

     GPA.057.PAN    Randy Hrvek, Individual
     GPA.064.PAN    Fina Oil and Chemical Company
     GPA.065.PAN    Walsh Production, Inc.
     GPA.067.PAN    Walsh Production, Inc.
     GPA.069.PAN    Walsh Production, Inc.
     GPA.071.PAN    Lomita Operating
     GPA.072.PAN    Cache Exploration, Inc.
     GPA.074.PAN    Lomita Operating Company
     GPA.075.PAN    Fina Oil and Chemical Company
     GPA.076.PAN    Arllan, Inc.
     GPA.078.PAN    Walsh Production, Inc.
     GPA.079.PAN    DeClar Oil & Gas, Inc.
     GPA.080.PAN    Lander Petroleum Co.
     GPA.081.PAN    Everett Frerichs Oil Properties
     GPA.082.PAN    H&R Well Services, Inc.
     GPA.083.PAN    Jenex Petroleum
     GPA.084.PAN    Petcon Associates Ltd.
     GPA.085.PAN    Diversified Operating Corporation
     GPA.086.PAN    Petcon Associates Ltd.
     GPA.087.PAN    OM Shree Investment Group
     GPA.088.PAN    Jerry Pettyjohn d/b/a Rocket Petroleum
     GPA.089.PAN    Tindal Operating Company
     GPA.090.PAN    Rex Monahan
     GPA.091.PAN    Diversified Operating Corporation
     
SPINDLE SYSTEM
     GPA.001.S      Basin Operating Company
     GPA.002.S      Colorado Interstate Gas Company
     GPA.002.S      Colorado Interstate Gas Company
     GPA.004.S      North American Resources Company
     GPA.005.S      Martin Oil Services, Inc. (CIG No. 681)
     GPA.006.S      Martin Oil Services, Inc. (CIG No. 679)
     GPA.007.S      Machil-Ross Petroleum Company (CIG No. 1047)
     GPA.008.S      Energy Minerals Corporation (CIG No. 408)
     GPA.009.S      Kenneth A. Ross, Jr. (CIG No. 402)
     GPA.010.S      Energy Minerals Corporation (CIG No. 1079)
     GPA.011.S      Ray O. Brownlle (CIG No. 539)
     GPA.012.S      Energy Minerals Corporation (CIG No. 1078)
     GPA.013.S      Snyder Oil Corporation (Amoco/Calvin)
     GPA.014.S      Vessels Oil & Gas Company
                    (Natural Gas Exchange Agreement)
     GPA.015.S      North American Resources Company
     GPA.016.S      Oaks Resources Management, Inc.
     GPA.017.S      Meyer Oil Company
     GPA.018.S      Energy Minerals Corporation
     GPA.020.S      Basin Exploration
     GPA.022.S      Amoco Production Company
     GPA.024.S      Martin Exploration Management Co.
     GPA.025.S      Heflin Energy Corporation
     GPA.026.S      Crystal Oil Co.
     GPA.027.S      K.P. Kaufman Company, Inc. (duplicate file B.8.15.5)
     GPA.028.S      Top Operating Company
     GPA.029.S      Machil-Ross Petroleum Company
     
ROGGEN SYSTEM

     GPA.001.R      Snyder Oil Corporation
     GPA.002.R      Basin Exploration, Inc.
     GPA.003.R      Bataa Oil


                                      -8-
<PAGE>   56
ROGGEN SYSTEM (Continued)

     GPA.004.R           Bataa Oil
     GPA.005.R           Churchill Energy, Inc.
     GPA.006.R           Freedom Energy, Inc.
     GPA.007.R           Gerrity Oil & Gas Corporation
     GPA.008.R           Homestead Oil, Inc. (Prima)
     GPA.009.R           HS Resources
     GPA.010.R           HS Resources
     GPA.011.R           Parker and Parsley Devel/Costilla
     GPA.012.R           Prima Oil & Gas Company
     GPA.013.R           Prima Oil & Gas Company
     GPA.014.R           Prima Oil & Gas Company
     GPA.015.R           Churchill Energy, Inc.
     GPA.001.RP     Argonex Company
     GPA.002.RP     Arlian Inc.
     GPA.003.RP     Arlian Inc.
     GPA.004.RP     Bolling Oil Properties Inc.
     GPA.005.RP     Bolling Oil Properties Inc.
     GPA.006.RP     Cascade Oil & Gas, Inc.
     GPA.007.RP     Cascade Oil & Gas, Inc.
     GPA.008.RP     Diversified Operating
     GPA.009.RP     Diversified Operating
     GPA.010.RP     Geotech Productions Inc.
     GPA.011.RP     Geotech Productions Inc.
     GPA.012.RP     H & R Well Service
     GPA.013.RP     H & R Well Service (Robin)
     GPA.014.RP     Habersham Energy
     GPA.015.RP     HS Resources
     GPA.016.RP     HS Resources
     GPA.017.RP     HS Resources
     GPA.018.RP     Jerry Pettyjohn
     GPA.019.RP     KP Kaufman
     GPA.020.RP     Kaiser Francis Oil Company/Welp King
     GPA.021.RP     Kaiser Francis Oil Company
     GPA.022.RP     Kaiser Francis Oil Company
     GPA.023.RP     Larry Brandly
     GPA.024.RP     Omimex Petroleum
     GPA.025.RP     Overland Resources
     GPA.026.RP     P & M Petroleum Management
     GPA.027.RP     Pozo Resources
     GPA.028.RP     Prospect Oil, Inc.
     GPA.029.RP     Prospect Oil, Inc.
     GPA.030.RP     RC Qualls
     GPA.031.RP     Resource Technology/Rochester
     GPA.032.RP     Smith Energy Corp.
     GPA.033.RP     Smith Energy Corp.
     GPA.034.RP     Smith Energy Corp.
     GPA.035.RP     Smith Oil Properties/H & R (Robin)
     GPA.036.RP     Smith Oil Properties
     GPA.037.RP     Smith Oil Properties
     GPA.038.RP     Southmark Acquisitions/P & P
     GPA.039.RP     T.P. Operating, Inc.
     GPA.040.RP     Thorofare Resources, Inc.
     GPA.041.RP     Thorofare Resources, Inc.
     GPA.042.RP     Thorofare Resources, Inc.
     GPA.043.RP     Union Pacific Resources Co.
     GPA.044.RP     DJ Production Services, Inc.
     GPA.045.RP     Diversified Operating Corporation
     GPA.046.RP     R.C. Qualls Operating
     GPA.047.RP     T.P. Operating, Inc.


                                      -9-
     
<PAGE>   57
ROGGEN SYSTEM (Continued)

     GPA.048.RP     Diversified Operating Corporation
     GPA.049.RP     Thorofare Resources, Inc.
     GPA.050.RP     Arlian, Inc.
     GPA.051.RP     Arlian, Inc.
     GPA.052.RP     Omimex International Corp.
     GPA.053.RP     P&M Petroleum Management
     GPA.054.RP     Smith Oil Properties, Inc.
     GPA.055.RP     Smith Oil Properties, Inc.
     GPA.056.RP     Smith Energy Corporation
     
     GPA.057.RP     Cascade Oil & Gas, Inc.
     GPA.058.RP     Larry Brandly
     GPA.059.RP     G & R Oil Properties, Inc. (Smtih Energy Corp.)
     GPA.060.RP     Overland Resources, Ltd.
     GPA.061.RP     Sovereign Energy L.L.C.
     GPA.062.RP     Kaiser-Francis Oil Company
     GPA.063.RP     K.P. Kauffamn Company, Inc.
     GPA.064.RP     Blue Creek, Inc.
     GPA.065.RP     Argonex Company
     GPA.001RW      Frank H. Walsh
     GPA.002RW      Roggen/Redwave Ltd
     GPA.001.RPD         Geotech Productions, Inc.
     GPA.002.RPD         Termo Co.
     GPA.001.REG         Freedom Energy, Inc.
     GPA.002.REG         Gerrity Oil & Gas Company
     GPA.003.REG         Windsor Gas Processing















                                      -10-
<PAGE>   58


                                 Section 5.5(d)

                 To the Disclosure Letter dated March 31, 1998




          This Section 5.5(d) is intentionally left blank.

<PAGE>   59


                                  Section 5.6

                 To the Disclosure Letter dated March 31, 1998



          See attached.

<PAGE>   60
DUKE ENERGY FIELD SERVICES
Weld County Frac / Teppco

                                       Gallons thru
                                       Weld/Spindle
                                          Fracs
                                          -----
1993:
          31    1/93                     10,280,494
          28    2/93                      9,810,378
          31    3/93                     11,903,376
          30    4/93                     11,400,414
          31    5/93                     10,241,436
          30    6/93                     11,278,513
          31    7/93                     11,331,309
          31    8/93     Spindle Frac    11,952,113
          30    9/93                     12,955,751
          31   10/93                     13,335,863
          30   11/93                     12,159,365
          31   12/93                     12,841,199
                                        -----------
         365                            139,490,053


1994:
          31    1/94                     12,729,734
          28    2/94                     11,462,719
          31    3/94                     13,482,514
          30    4/94                     13,031,809
          31    5/94                     13,511,928
          30    6/94                     12,767,841
          31    7/94                     13,246,825
          31    8/94                     13,182,141
          30    9/94                     12,311,183
          31   10/94                     13,144,135
          30   11/94                     13,273,861
          31   12/94                     13,173,023
                                        -----------
         365                            155,317,713


1995:
          31    1/95                     12,460,977
          28    2/95                     11,162,928
          31    3/95                     12,694,270
          30    4/95                     12,593,754
          31    5/95                     12,866,513
          30    6/95                     11,437,069
          31    7/95                     11,632,921
          31    8/95                     11,765,828
          30    9/95                     11,075,157
          31   10/95     Roggen Purch    11,668,519
          30   11/95                     11,946,479
          31   12/95                     12,317,301
                                        -----------
         365                            143,621,716
<PAGE>   61

                                       Gallons thru
                                       Weld/Spindle
                                          Fracs
                                          -----
1996:
          31    1/96                     11,280,575
          28    2/96                     10,512,118
          31    3/96                     11,165,131
          30    4/96                     10,326,611
          31    5/96                     11,274,169
          30    6/96                     10,966,910
          31    7/96                     11,240,743
          31    8/96                     11,200,899
          30    9/96                     11,036,549
          31   10/96                     11,431,839
          30   11/96                     10,738,358
          31   12/96                     11,170,282
                                        -----------
         365                            132,344,184


1997:
          31    1/97                     10,691,615
          28    2/97                     10,689,315
          31    3/97                     11,969,680
          30    4/97                     11,203,803
          31    5/97                     11,616,822
          30    6/97                     11,502,882
          31    7/97                     12,253,532
          31    8/97                     13,401,847
          30    9/97                     12,539,071
          31   10/97                     12,918,550
          30   11/97                     12,380,471
          31   12/97                     13,524,823
                                        -----------
         365                            144,692,411
<PAGE>   62

                                  Section 5.7

                 To the Disclosure Letter dated March 31, 1998



     This Section 5.7 is intentionally left blank.

<PAGE>   63

                                 Section 5.8(b)

                 To the Disclosure Letter dated March 31, 1998



#1   OSHA Stipulation dated March 1998.

#2   Pending Claim of the OCAW before the NLRB claiming unfair labor practices
     in connection with information requests.
<PAGE>   64

                                  Section 5.10

                 To the Disclosure Letter dated March 31, 1998



     This Section 5.10 is intentionally left blank.
<PAGE>   65

                                  Section 5.11

                 To the Disclosure Letter dated March 31, 1998



     This Section 5.11 is intentionally left blank.
<PAGE>   66

                                                                       EXHIBIT A
================================================================================


                             FRACTIONATION AGREEMENT


                                     BETWEEN



                        DUKE ENERGY FIELD SERVICES, INC.,


                                       AND


                              TEPPCO COLORADO, LLC





                                 MARCH 31, 1998


================================================================================

<PAGE>   67


                                TABLE OF CONTENTS


<TABLE>
<S>                  <C>                                                                                         <C>
ARTICLE I             DEFINITIONS...............................................................................  1
         1.1          Certain Defined Terms.....................................................................  1
                      A.      "Adjustment Period" ..............................................................  1
                      B.      "Affiliate" ......................................................................  1
                      C.      "Asset Purchase Agreement" .......................................................  2
                      D.      "Claims" .........................................................................  2
                      E.      "Compensable Amendment" ..........................................................  2
                      F.      "Components" .....................................................................  2
                      G.      "Day" ............................................................................  2
                      H.      "Dedicated Assets" ...............................................................  2
                      I.      "Dedicated Gas" ..................................................................  2
                      J.      "Dedicated Gathering Pipelines" ..................................................  3
                      K.      "Dedicated Lands" ................................................................  3
                      L.      "Dedicated Plants" ...............................................................  3
                      M.      "Dedicated Producer Contracts" ...................................................  3
                      N.      "Delivery Points" ................................................................  3
                      O.      "Disputed Claims" ................................................................  3
                      P.      "Duke Energy Indemnified Parties" ................................................  3
                      Q.      "Force Majeure" ..................................................................  3
                      R.      "Fractionation Fee" ..............................................................  3
                      S.      "Fractionators" ..................................................................  3
                      T.      "Gallon" .........................................................................  3
                      U.      "Governmental Authority" .........................................................  4
                      V.      "Greeley Fractionator" ...........................................................  4
                      W.      "Greeley Plant" ..................................................................  4
                      X.      "Initial Period" .................................................................  4
                      Y.      "Lease" ..........................................................................  4
                      Z.      "Liquidated Damages Formula" .....................................................  4
                      AA.     "Lost Specification Products" ....................................................  4
                      BB.     "O&M Agreement" ..................................................................  4
                      CC.     "O&M Fee" ........................................................................  4
                      DD.     "Person" .........................................................................  4
                      EE.     "Project Agreements" .............................................................  4
                      FF.     "Raw Product" ....................................................................  5
                      GG.     "Receipt Points" .................................................................  5
                      HH.     "Sale" ...........................................................................  5
                      II.     "Sale Notice" ....................................................................  5
                      JJ.     "Specification Products" .........................................................  5
                      KK.     "Spindle Fractionator" ...........................................................  5
                      LL.     "Spindle Plant" ..................................................................  5
                      MM.     "Sublease" .......................................................................  5

</TABLE>


                                      -ii-
<PAGE>   68

<TABLE>
<S>                                                                                                               <C>
                      NN.     "TEPPCO Indemnified Parties" .....................................................  5
                      OO.     "Year" ...........................................................................  5
         1.2          References................................................................................  5
         1.3          Headings..................................................................................  6

ARTICLE II            TERM AND TERMINATION......................................................................  6
         2.1          Term......................................................................................  6
         2.2          Termination by TEPPCO.....................................................................  6
         2.3          Termination by Duke Energy................................................................  7
         2.4          Payment of Liquidated Damages.............................................................  7

ARTICLE III           DUKE ENERGY'S RIGHTS AND OBLIGATIONS......................................................  7
         3.1          Commitment to Process Dedicated Gas and Deliver Raw
                      Product...................................................................................  7
         3.2          Exclusions................................................................................  8
         3.3          Delivery of Raw Product...................................................................  8
         3.4          No Reduction of Raw Product Volume........................................................  8
         3.5          Obligation to Obtain Right to Fractionate.................................................  9
         3.6          Sale or Conveyance of Dedicated Assets by Duke Energy.....................................  9

ARTICLE IV            TEPPCO'S RIGHTS AND OBLIGATIONS........................................................... 11
         4.1          Commitment to Fractionate................................................................. 11
         4.2          Delivery of Specification Products........................................................ 11
         4.3          Installation of Equipment, Improvements and Modifications................................. 11

ARTICLE V             TITLE; RISK OF LOSS....................................................................... 12

ARTICLE VI            MEASUREMENT, QUALITY AND DELIVERY PRESSURE OF
                      RAW PRODUCT............................................................................... 12
         6.1          Measurement............................................................................... 12
         6.2          Quality................................................................................... 12
         6.3          Delivery Pressure......................................................................... 12
         6.4          Greeley Frac Measurement.................................................................. 13
         6.5          Spindle Frac Measurement.................................................................. 13

ARTICLE VII           COMPENSATION TO TEPPCO.................................................................... 14
         7.1          Fractionation Fee for Initial Period...................................................... 14
         7.2          Fractionation Fee for Remainder of Term................................................... 14

ARTICLE VIII          TAXES AND OTHER PAYMENTS.................................................................. 14

ARTICLE IX            ACCOUNTING PROCEDURE...................................................................... 14
         9.1          Billing................................................................................... 14
         9.2          Audit Rights.............................................................................. 15
</TABLE>


                                     -iii-
<PAGE>   69
<TABLE>
<S>                   <C>                                                                                        <C>
ARTICLE X             PAYMENT AND INTEREST ON LATE PAYMENTS..................................................... 15
         10.1         Payment................................................................................... 15
         10.2         Interest on Late Payments................................................................. 15

ARTICLE XI            FORCE MAJEURE............................................................................. 15
         11.1         Effect of Force Majeure................................................................... 15
         11.2         Definition of Force Majeure............................................................... 16
         11.3         Exceptions to Force Majeure............................................................... 16
         11.4         Strikes and Lockouts...................................................................... 16

ARTICLE XII           INDEMNIFICATION........................................................................... 16

ARTICLE XIII          DISPUTES.................................................................................. 17
         13.1         Dispute Resolution; Arbitration........................................................... 17
         13.2         Failure to Resolve Through Negotiations................................................... 17
         13.3         Arbitration............................................................................... 17
         13.4         Recovery of Costs and Attorneys' Fees..................................................... 19
         13.5         Choice of Forum........................................................................... 19
         13.6         Jury Waivers.............................................................................. 19
         13.7         Limitation of Damages..................................................................... 19
         13.8         Governing Law............................................................................. 19

ARTICLE XIV           REPRESENTATIONS AND WARRANTIES............................................................ 20
         14.1         Representations and Warranties of Duke Energy............................................. 20
         14.2         Representations and Warranties of TEPPCO.................................................. 21

ARTICLE XV            GENERAL PROVISIONS........................................................................ 22
         15.1         Notices................................................................................... 22
         15.2         Waiver.................................................................................... 23
         15.3         Entire Agreement.......................................................................... 23
         15.4         Successors and Assigns.................................................................... 23
         15.5         Conflicts................................................................................. 23
         15.6         Laws and Regulations...................................................................... 23
         15.7         Recording................................................................................. 24
         15.8         Severability.............................................................................. 24
         15.9         Time of Essence........................................................................... 24
         15.10        Captions.................................................................................. 24
         15.11        Schedules and Exhibits.................................................................... 24
         15.12        No Partnership............................................................................ 24
         15.13        No Third Party Beneficiaries.............................................................. 24
         15.14        Mutual Cooperation; Further Assurances.................................................... 24
         15.15        Survival.................................................................................. 24
         15.16        Other Project Agreements.................................................................. 24
         15.17        Amendments; Changes; Modifications........................................................ 25
</TABLE>




                                      -iv-

<PAGE>   70



                             FRACTIONATION AGREEMENT


         THIS FRACTIONATION AGREEMENT (this "Agreement") is made and entered
into this 21st day of April, 1998, but effective 11:59 p.m. (Denver, Colorado
time) on the 31st day of March 1998 (the "Effective Date"), by and between Duke
Energy Field Services, Inc., a Colorado corporation ("Duke Energy") and TEPPCO
Colorado, LLC, a Delaware limited liability company ("TEPPCO"). Each of TEPPCO
and Duke Energy are sometimes referred to individually as a "Party" and
collectively as the "Parties."

                                    RECITALS

A.       Duke Energy has quantities of Raw Product (as defined herein) which are
         available for fractionation.

B.       TEPPCO is the owner of the Fractionators (as defined herein).

C.       It is the mutual desire of Duke Energy and TEPPCO that TEPPCO receive
         Duke Energy's Raw Product at the Receipt Points (as defined herein) and
         deliver to Duke Energy, Specification Products (as defined herein) at
         the Delivery Points (as defined herein).

D.       Simultaneously with the execution of this Agreement, Duke Energy and
         TEPPCO have entered into that certain Operation and Maintenance
         Agreement dated of even date herewith (the "O&M Agreement"), pursuant
         to which Duke Energy shall operate and maintain the Fractionators in
         accordance with the terms thereof.

         FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1 Certain Defined Terms. Unless the context otherwise requires, the
following terms shall have the respective meanings set forth in this Section
1.1:

         A.    "Adjustment Period" shall have the meaning given such term in
               Section 3.4 hereof.

         B.    "Affiliate" shall mean, when used with respect to a specified 
               Person, any other Person directly controlled by or under the
               specified Person. 




<PAGE>   71

               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 whether through the ownership of
               voting securities or by contract; and the term "controlled" have
               the meanings correlative to the foregoing. Notwithstanding the
               foregoing, the term "Affiliate" when applied to Duke Energy shall
               not include Duke Energy Trading & Marketing, L.L.C. ("DETM"),
               TEPPCO, Texas Eastern Products Pipeline Company, a Delaware
               corporation ("Texas Eastern"), TEPPCO Partners L.P., a Delaware
               limited partnership (the "Partnership") or any entities owned,
               directly or indirectly by the Partnership (collectively with
               Texas Eastern and the Partnership but excluding DETM, the "TEPPCO
               Entities"); and as applied to TEPPCO, shall not include Duke
               Energy, Duke Energy Corporation, a Delaware corporation, or any
               entities owned, directly or indirectly by Duke Energy Corporation
               other than the TEPPCO Entities.

         C.    "Asset Purchase Agreement" shall mean that certain Asset Purchase
               Agreement dated March 31, 1998, by and between Duke Energy, as 
               "Seller," and TEPPCO, as "Buyer".

         D.    "Claims" shall have the meaning given such term in Article VIII 
               hereof.

         E.    "Compensable Amendment" shall mean an amendment or modification 
               to a Dedicated Producer Contract that could cause a reduction in
               the volume of Specification Product delivered by TEPPCO to Duke
               Energy hereunder for which TEPPCO would have, if not for such
               amendment or modification, received a Fractionation Fee
               hereunder.

         F.    "Components" shall mean the individual hydrocarbon constituents 
               of ethane, propane, isobutane, normal butane, isopentane, normal
               pentane, hexanes and other heavier hydrocarbons.

         G.    "Day" shall mean a period of time commencing at 8:00 a.m. 
               (Denver, Colorado time) on a calendar day and ending at 8:00 a.m.
               (Denver, Colorado time) on the next succeeding calendar day.

         H.    "Dedicated Assets" shall have the meaning given such term in 
               Section 3.6 hereof.

         I.    "Dedicated Gas" shall mean all natural gas that Duke Energy or 
               any of its Affiliates now or hereafter owns or has the
               contractual right to 


<PAGE>   72

               fractionate the natural gas liquids derived therefrom and which
               is (i) produced from the Dedicated Lands, (ii) transported
               through any of the Dedicated Gathering Pipelines, (iii) subject
               to the Dedicated Producer Contracts or (iv) processed in any of
               the Dedicated Plants.

         J.    "Dedicated Gathering Pipelines" shall mean all present and
               future natural gas gathering pipelines which are now or hereafter
               owned or controlled, in whole or in part, by Duke Energy or any
               of its Affiliates and located on the Dedicated Lands.

         K.    "Dedicated Lands" shall mean the lands described on the attached
               Exhibit A.

         L.    "Dedicated Plants" shall mean all present and future natural gas 
               processing plants which are now or hereafter owned or controlled,
               in whole or in part, by Duke Energy or any of its Affiliates and
               located on the Dedicated Lands, including, without limitation,
               the natural gas processing plants described on the attached
               Exhibit B.

         M.    "Dedicated Producer Contracts" shall mean all present and future 
               contracts under which Duke Energy or any of its Affiliates has
               the right to fractionate natural gas liquids derived from natural
               gas insofar as it is produced from any of the Dedicated Lands,
               including without limitation, the contracts more particularly
               described on the attached Exhibit C.

         N.    "Delivery Points" shall mean the points identified as the 

               Delivery Points on the drawings set forth on the attached
               Exhibits D-1, D-2, D- 3, D-4, E-1 and E-2, being the points at
               which the Specification Products are delivered from the
               Fractionators into Duke Energy's facilities.

         O.    "Disputed Claims" shall have the meaning given such term in 
               Section 13.1 hereof.

         P.    "Duke Energy Indemnified Parties" shall have the meaning given 
               such term in Section 12.2 hereof.

         Q.    "Force Majeure" shall have the meaning given such term in Section
               11.2 hereof.



                                      -3-
<PAGE>   73


         R.    "Fractionation Fee" shall have the meaning given such term in 
               Section 7.1 hereof.

         S.    "Fractionators" shall mean the Greeley Fractionator and the 
               Spindle Fractionator.

         T.    "Gallon" shall mean the unit of volume used for the purpose of 
               measurement of liquid. One U.S. liquid gallon contains 231 cubic
               inches when the liquid is at a temperature of sixty degrees
               Fahrenheit (60(degree)F) and at the equilibrium vapor pressure of
               the liquid being measured.

         U.    "Governmental Authority" shall mean 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.

         V.    "Greeley Fractionator" shall mean the fractionation facilities 
               located within Area 1 and Area 2 identified in red on the
               attached Exhibit D and all piping connecting the equipment listed
               in red on the attached Exhibit D, which are located within the
               Greeley Plant, which fractionation facilities are used for the
               purpose of fractionation of Raw Product into Specification
               Products.

         W.    "Greeley Plant" shall mean Duke Energy's Greeley Natural Gas
               Processing Plant located in the SW1/4 of Section 25, Township 5
               North, Range 66 West, Weld County, Colorado.

         X.    "Initial Period" shall mean the period of time beginning on the
               Effective Date through and including March 31, 2008.

         Y.    "Lease" shall mean that certain Lease Agreement dated of even 
               date herewith by and between Duke Energy, as "Lessor," and
               TEPPCO, as "Lessee."

         Z.    "Liquidated Damages Formula" shall have the meaning given such 
               term in Section 3.6 hereof.

         AA.   "Lost Specification Products" shall mean those volumes of 
               Specification Products that are not delivered by TEPPCO to Duke
               Energy hereunder because of a Compensable Amendment or a Sale of
               all or any part of the Dedicated Assets, as the case maybe.



                                      -4-
<PAGE>   74

         BB.   "O&M Agreement" shall have the meaning given such term in the
               Recitals hereof.

         CC.   "O&M Fee" shall have the meaning given such term in the O&M
               Agreement.

         DD.   "Person" shall mean 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).

         EE.   "Project Agreements" shall mean collectively, this Agreement, the
               Lease, the Sublease and the O&M Agreement.

         FF.   "Raw Product" shall mean the mixture of Components remaining 
               after the processing of the Dedicated Gas.

         GG.   "Receipt Points" shall mean the points identified as the Receipt 
               Points on the drawings set forth on the attached Exhibits D-1,
               D-3 and E-1, being the inlet of the Fractionators.

         HH.   "Sale" shall have the meaning given such term in Section 3.6 
               hereof.

         II.   "Sale Notice" shall have the meaning given such term in Section 
               3.6 hereof.

         JJ.   "Specification Products" shall mean the Components fractionated 
               from the Raw Product delivered to the Fractionators.

         KK.   "Spindle Fractionator" shall mean the fractionation facilities 
               identified in red on the attached Exhibit E, which are located
               within the Spindle Plant, which fractionation facilities are used
               for the purpose of fractionation of Raw Product into
               Specification Products.

         LL.   "Spindle Plant" shall mean Duke Energy's Spindle Natural Gas
               Processing Plant located in the SW1/4 of Section 34, Township 2
               North, Range 67 West, Weld County, Colorado.

         MM.   "Sublease" shall mean that certain Sublease Agreement dated of 
               even date herewith by and between Duke Energy, as "Sublessor,"
               and TEPPCO, as "Sublessee."




                                      -5-
<PAGE>   75

         NN    "TEPPCO Indemnified Parties" shall have the meaning given such
               term in Article VIII hereof.

         OO.   "Year" shall mean a period of 365 consecutive Days; provided,
               however that any year which contains the date of February 29
               shall consist of 366 consecutive Days.

         1.2 References. 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 Sections, paragraphs,
Exhibits or Schedules are deemed references to the corresponding Sections,
paragraphs, Exhibits or Schedules in this Agreement.

         1.3 Headings. The headings of the 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.

                                   ARTICLE II
                              TERM AND TERMINATION

         2.1 Term. This Agreement shall be effective as of March 31, 1998 at
11:59 p.m. (Denver, Colorado time), and shall continue in effect for a primary
term ending March 31, 2018 at 11:59 p.m. (Denver, Colorado time), and shall
continue in effect from Year to Year thereafter; provided that either Party
shall have the right to terminate this Agreement effective March 31, 2018 at
11:59 p.m. (Denver, Colorado time), or any anniversary of such date by giving
the other Party at least six (6) months prior written notice.

         2.2 Termination by TEPPCO. At the option of TEPPCO, the Project
Agreements shall all, but not less than all, terminate upon the happening of one
or more of the following events:

         A.  Proceedings shall be commenced by or against Duke Energy for any
             relief under any bankruptcy or insolvency law, or any law relating
             to the relief of debtors, readjustment of indebtedness,
             reorganization, arrangement, composition, or extension; and, if
             such proceedings have been commenced by a Person other than Duke
             Energy, such proceeding shall not have been dismissed, nullified,
             stayed, or otherwise rendered 


                                      -6-
<PAGE>   76

             ineffective (but then only so long as such stay shall continue in
             force or such ineffectiveness shall continue) within ninety (90)
             days after such proceedings shall have been commenced.

         B.  A decree or order of a court having jurisdiction in the premises 
             for the appointment of a receiver or liquidator or trustee or
             assignee in bankruptcy or insolvency of Duke Energy or of a
             substantial part of Duke Energy's property, or for the winding up
             or liquidation of its affairs, shall have been entered, and such
             decree or order shall have remained in force undischarged and
             unstayed for a period of ninety (90) days, or any substantial part
             of the property of Duke Energy shall be sequestered or attached and
             shall not be returned to the possession of Duke Energy or released
             from such attachment within ninety (90) days thereafter.

         C.  Duke Energy shall make a general assignment for the benefit of 
             creditors or shall admit in writing its inability to pay its debts
             generally as they become due.

         D.  The filing of a certificate of dissolution by Duke Energy under the
             laws of the state of its incorporation, or the entering of a final
             order dissolving Duke Energy by any court of competent
             jurisdiction.

         E.  There is a material default (other than the payment of money) by 
             Duke Energy under any of the Project Documents and such default
             remains uncured for a period of thirty (30) days after the receipt
             by Duke Energy from TEPPCO of written notice describing such
             default in reasonable detail, or if the default is such that it
             cannot be cured within such thirty (30) day period, Duke Energy
             fails to commence action within such thirty (30) day period which
             is calculated to cure such default and thereafter diligently pursue
             such action to completion.

         F.  Duke Energy fails to make any payment when due under any of the 
             Project Agreements and such failure continues for thirty (30) days
             after the receipt by Duke Energy from TEPPCO of written notice
             thereof.

         2.3 Termination by Duke Energy. At the option of Duke Energy, the
Project Agreements shall all, but not less than all, terminate upon the
happening of the following event:




                                      -7-
<PAGE>   77

         A.  TEPPCO fails to make any payment when due under any of the Project 
             Agreements and such failure continues for thirty (30) days after
             the receipt by TEPPCO from Duke Energy of written notice thereof.

         2.4 Payment of Liquidated Damages. Upon termination of the Project
Agreements by TEPPCO pursuant to Section 2.2 hereof, (i) Duke Energy shall pay
to TEPPCO within ten (10) days after any such termination, liquidated damages
calculated in accordance with the Liquidated Damages Formula and (ii) TEPPCO
shall convey the Fractionators to Duke Energy, free of all liens and
encumbrances created by, through or under TEPPCO. The Parties agree that the
actual damages to TEPPCO in the event of the breach of any of the Project
Documents by Duke Energy are impractical to ascertain and the amount of the
liquidated damages as determined in accordance with this Section 2.4 is a
reasonable estimate thereof and TEPPCO's sole and exclusive remedy with respect
thereto.

                                   ARTICLE III
                      DUKE ENERGY'S RIGHTS AND OBLIGATIONS

         3.1 Commitment to Process Dedicated Gas and Deliver Raw Product. Duke
Energy shall cause the Dedicated Gas to be processed and all Raw Product to be
delivered to TEPPCO at the Receipt Points for fractionation under the terms of
this Agreement, except as excluded pursuant to Section 3.2; provided, however,
if due to legitimate operational constraints or restrictions Duke Energy is
unable to process certain volumes of Dedicated Gas and deliver the Raw Product
derived therefrom to TEPPCO, then, provided that Duke Energy (i) notifies TEPPCO
of the occurrence of such operational constraints or restrictions as soon as
reasonably possible and (ii) uses commercially reasonable efforts to remove such
operational constraints and/or restrictions as soon as reasonably possible, Duke
Energy shall be relieved of its obligation to deliver such volumes of Raw
Product to TEPPCO for fractionation hereunder to the extent, and only to the
extent, that such operational constraints or restrictions exist and prevent such
delivery. TEPPCO acknowledges that as of the date hereof, Duke Energy is
diverting certain volumes of Dedicated Gas to Amoco's Wattenberg Natural Gas
Processing Plant due to legitimate operational constraints.

         3.2 Exclusions. Any volumes of Raw Product in excess of those which
TEPPCO is able to physically accept for delivery and fractionate pursuant to
Article IV, are excepted from Duke Energy's commitment in Section 3.1.

         3.3 Delivery of Raw Product. Duke Energy shall use commercially
reasonable efforts to deliver Raw Product to TEPPCO at the Receipt Points at a
flow rate that the Fractionators are physically capable of handling.





                                      -8-
<PAGE>   78

         3.4 No Reduction of Raw Product Volume.

         (a) If Duke Energy enters into a Compensable Amendment, then Duke
Energy shall keep TEPPCO whole for any loss of Specification Products
attributable thereto by paying to TEPPCO, within thirty (30) days after any such
loss first occurs, liquidated damages calculated in accordance with the
Liquidated Damages Formula, assuming that (i) V is equal to the annual
Specification Product volume (in Gallons) that would have been lost during the
immediately preceding Year if such loss had occurred one Year earlier, (ii) N is
equal to the Fractionation Fee that would have been paid on the Lost
Specification Products attributable to such Compensable Amendment and (iii) A is
equal to the contract Year in which such loss occurs; provided, however, if the
cumulative effect of all losses occurring during any twelve (12) month period
(an "Adjustment Period") attributable to Compensable Amendments is a reduction
in the volumes of Specification Products delivered by TEPPCO to Duke Energy
during the Adjustment Period by an amount in excess of twenty-five percent (25%)
of the volumes of Specification Products delivered by TEPPCO to Duke Energy in
the twelve (12) month period immediately preceding such Adjustment Period, then
TEPPCO shall have the right, at its option, to terminate the Project Agreements
and Duke Energy shall pay to TEPPCO within ten (10) days after any such
termination, liquidated damages calculated in accordance with the Liquidated
Damages Formula; and further provided, and except as provided in (c) below Duke
Energy shall not be required to pay a Fractionation Fee to TEPPCO on Lost
Specification Products on which Duke Energy had previously paid liquidated
damages to TEPPCO. The Parties agree that the actual damages to TEPPCO in the
event of a Compensable Amendment are impractical to ascertain and the amount of
the liquidated damages as determined in accordance with this Section 3.4 is a
reasonable estimate thereof and TEPPCO's sole and exclusive remedy with respect
thereto.

         (b) Duke covenants and agrees to deliver to TEPPCO (i) copies of all
Compensable Amendments promptly after execution thereof and (ii) upon TEPPCO's
request, copies of other amendments to the Dedicated Producer Contracts.

         (c) If, subsequent to a loss attributable to a Compensable Amendment,
the volumes of Raw Product attributable to such Compensable Amendment are later
delivered by Duke Energy to TEPPCO for fractionation in the Fractionators, then
Duke Energy shall pay to TEPPCO a Fractionation Fee on the amount, if any, by
which (i) the actual volumes of Lost Specification Products attributable to such
Compensable Amendment in each Year during the remainder of the term hereof
exceeds (ii) the volumes of Lost Specification Products attributable to such
Compensable Amendment on which TEPPCO was paid liquidated damages pursuant to
the Liquidated Damages Formula for each such Year.



                                      -9-
<PAGE>   79

         3.5 Obligation to Obtain Right to Fractionate. With respect to any
future agreement that Duke Energy or any of its Affiliates enters into
pertaining to natural gas that (i) is produced from the Dedicated Lands, (ii) is
transported through any of the Dedicated Gathering Pipelines, (iii) becomes
subject to a Dedicated Producer Contract or (iv) is processed in any of the
Dedicated Plants, Duke Energy shall use commercially reasonable efforts to
obtain, or cause its Affiliate to obtain, the right to process such natural gas
and fractionate the natural gas liquids derived therefrom.

         3.6 Sale or Conveyance of Dedicated Assets by Duke Energy. If, during
the term of this Agreement, Duke Energy or any of its Affiliates desires to
sell, assign, convey or otherwise transfer (a "Sale") any of their respective
control, rights, titles or other interests in and to all or any part of any of
this Agreement, the Dedicated Gas, Dedicated Producer Contracts, the Dedicated
Gathering Pipelines and/or the Dedicated Plants (collectively, the "Dedicated
Assets") then Duke Energy shall notify TEPPCO in writing of any such Sale (a
"Sale Notice") and the identity of the purchaser at least sixty (60) days prior
to the proposed closing of any such sale. The rights of TEPPCO with respect to
any such Sale shall then be determined by the nature of such Sale as follows:

         A.  If such Sale involves all or a material part of (i) the Dedicated 
             Assets and/or (ii) Duke Energy's interest in this Agreement, upon
             the receipt of a Sale Notice, TEPPCO shall have the right to
             terminate this Agreement effective as of the closing of such Sale
             by delivering written notice of termination to Duke Energy within
             thirty (30) days after receipt of the Sale Notice. If TEPPCO elects
             to terminate this Agreement pursuant to the immediately preceding
             sentence, then Duke Energy and TEPPCO shall be relieved of all
             further obligations and liabilities under the Project Agreements as
             of the closing of the Sale, except for those obligations and
             liabilities that survive termination, and within ten (10) days
             after such termination, (i) Duke Energy shall pay to TEPPCO
             liquidated damages calculated in accordance with the formula set
             forth on the attached Exhibit F (the "Liquidated Damages Formula")
             and (ii) TEPPCO shall convey the Fractionators to Duke Energy, free
             of all liens and encumbrances created by, through or under TEPPCO.
             If TEPPCO fails to timely respond to a Sale Notice or responds and
             elects to not terminate this Agreement:

             (1)    if such Sale involves an assignment of all of Duke Energy's
                    interest in this Agreement, then, as of the closing of such
                    Sale, Duke Energy shall be relieved of all further 
                    obligations and 





                                      -10-
<PAGE>   80

                    liabilities under this Agreement accruing after the date of 
                    any such assignment, and

                    (a)   if such Sale also includes the Greeley Plant, then, as
                          of the closing, Duke Energy shall be relieved of all
                          further obligations and liabilities accruing after the
                          date of assignment under (1) the Lease and (2) the O&M
                          Agreement to the extent applicable to the Greeley
                          Fractionator; and

                    (b)   if such Sale also includes the Spindle Plant, then, as
                          of the closing, Duke Energy shall be relieved of all
                          further obligations and liabilities accruing after the
                          date of assignment under (1) the Sublease and (2) the
                          O&M Agreement to the extent applicable to the Spindle
                          Fractionator as of the closing of the Sale; or

             (2)     if such Sale does not involve an assignment of Duke 
                     Energy's interest in this Agreement, and as a result of 
                     such Sale, there are Lost Specification Products, then
                     Duke Energy shall keep TEPPCO whole for such loss by
                     paying to TEPPCO, within thirty (30) days after the closing
                     of such Sale, liquidated damages calculated in accordance 
                     with the Liquidated Damages Formula, assuming that (i) V is
                     equal to the annual Specification Product volume (in 
                     Gallons) attributable to the Dedicated Assets sold for
                     the Year immediately preceding the date of closing of such 
                     Sale, (ii) N is equal to the Fractionation Fee that would 
                     have been paid on the Lost Specification Products 
                     attributable to such Sale and (iii) A is equal to the 
                     contract Year in which the date of closing of such Sale 
                     occurs.

         B.  If such Sale does not involve a material part of the Dedicated 
             Assets or Duke Energy's interest in this Agreement, and as a result
             of such Sale, there are Lost Specification Products, then Duke
             Energy shall keep TEPPCO whole for such loss by paying to TEPPCO,
             within thirty (30) days after the closing of such Sale, liquidated
             damages calculated in accordance with the Liquidated Damages
             Formula, assuming that (i) V is equal to the annual Specification
             Product volume (in Gallons) attributable to the Dedicated Assets
             sold for the Year immediately preceding the date of closing of such
             Sale, (ii) N is equal to the Fractionation Fee that would have been
             paid on the Lost Specification Products attributable to such Sale
             and (iii) A is equal to the contract Year in which the date of
             closing of such Sale occurs.



                                      -11-



<PAGE>   81




As used in this Section 3.6, the term "material" shall mean, individually or in
the aggregate, any Sale or Sales of Dedicated Assets which produce, gather,
transport and/or process natural gas and/or natural gas liquids which contribute
more than ten percent (10%) of the Raw Product volumes as reasonably estimated
at the time of the Sale. The Parties agree that the actual damages to TEPPCO in
the event of a Sale are impractical to ascertain and the amount of the
liquidated damages as determined in accordance with this Section 3.6 is a
reasonable estimate thereof and TEPPCO's sole and exclusive remedy with respect
thereto.

                                   ARTICLE IV
                         TEPPCO'S RIGHTS AND OBLIGATIONS

         4.1 Commitment to Fractionate. Subject to the physical capacity and
capabilities of the Fractionators, TEPPCO shall accept delivery of and provide
fractionation on a firm basis for (i) up to a maximum of 378,000 Gallons per Day
of Raw Product delivered by Duke Energy to TEPPCO at the Receipt Point for the
Greeley Fractionator and (ii) up to a maximum of 126,000 Gallons per Day of Raw
Product delivered by Duke Energy to TEPPCO at the Receipt Point for the Spindle
Fractionator. Volumes of Raw Product in excess of such amounts per Day will be
accepted by TEPPCO for fractionation on a space available basis at the
Fractionators. With respect to Lost Specification Products for which Duke Energy
has previously paid liquidated damages to TEPPCO, TEPPCO will fractionate such
Lost Specification Products should they again be delivered to TEPPCO but will
not be obligated to pay an O&M Fee to Duke Energy pursuant to the terms of the
O&M Agreement except on volumes for which a Fractionation Fee is paid pursuant
to Section 3.4(c) hereof.

         4.2 Delivery of Specification Products. Subject to the physical
capacity and capabilities of the Fractionators and normal processing and
measurement gains and losses, TEPPCO shall deliver to Duke Energy at the
Delivery Points the Specification Products which Duke Energy requests to be
fractionated.

         4.3 Installation of Equipment, Improvements and Modifications. TEPPCO
shall have the right to install additional equipment and/or make improvements or
modifications to the Fractionators, provided that the same shall not
unreasonably interfere with Duke Energy's operations at the Greeley Plant and/or
Spindle Plant or reduce past operating efficiencies of the Fractionators.

                                    ARTICLE V
                               TITLE; RISK OF LOSS

         Duke Energy represents and warrants to TEPPCO that it has the right to
cause to be fractionated the Raw Product delivered hereunder. Prior to delivery
of the Raw Product to TEPPCO at the Receipt Points, custody and risk of loss to
the Raw Product shall remain with Duke Energy. Custody and risk of loss of the
Raw Product shall transfer to TEPPCO at the Receipt Points, subject to Duke
Energy's right to receive Specification Products attributable thereto at the
Delivery Points. 






                                      -12-
<PAGE>   82
Custody and risk of loss of the Product shall transfer back to Duke Energy when
the Specification Products are delivered to Duke Energy at the Delivery Points.
Title to the Raw Product and the Specification Products shall remain in Duke
Energy at all times. TEPPCO shall at no time take title to the Raw Product or
the resulting Specification Products. TEPPCO shall not encumber or cause to be
encumbered Specification Products returned to Duke Energy.

                                   ARTICLE VI
            MEASUREMENT, QUALITY AND DELIVERY PRESSURE OF RAW PRODUCT

         6.1 Measurement. Volumes of Specification Products shall be measured
according to one of the following procedures:

         (a) By scaled weight based on GPA Standard 8186-86 (Measurement of
Liquid Hydrocarbons by Truck Scales);

         (b) By mass measurement based on Chapter 4 (Proving Systems), Chapter 5
(Liquid Metering) and Chapter 14.7 (Mass Measurement of Natural Gas Liquids) of
the American Petroleum Institute Manual of Petroleum Measurement Standards and
(ii) calculated based on Chapter 14.4 (Converting Mass of Natural Gas Liquids
and Vapors to Equivalent Liquid Volumes) of the American Petroleum Institute
Manual of Petroleum Measurement Standards; or

         (c) Ethane (C2) shall be measured in a vapor phase by orifice
measurement based on API Chapter 21 (Flow Measurement Using Electronic Metering
Systems) and API Chapter 14-3 (Natural Gas Fluids Measurement, Concentric,
Square-Edged Orifice Meters).

         6.2 Quality. Raw Product delivered by Duke Energy to TEPPCO at the
Receipt Points shall not be deleterious to the operation of, or otherwise cause
damage to, the Fractionators. TEPPCO shall have the right to reject, and refuse
to fractionate, any Raw Product which does not meet such standards.

         6.3 Delivery Pressure. Raw Product shall be delivered by Duke Energy to
TEPPCO at the Receipt Points at sufficient pressure to maintain the Raw Product
in a liquid state at all times. TEPPCO shall have the right to reject, and
refuse to fractionate, any Raw Product which is not in a liquid state.

         6.4 Greeley Frac Measurement. Gallons of Specification Products
delivered by TEPPCO at the Greeley Fractionator shall be measured and calculated
as follows:

         (a)  With respect to ethane recovered as a vapor, the vapors shall be 
              measured to determine the volume measured in thousand cubic feet 
              ("MCF") and sampled to determine the gallons per MCF ("GPM"); then
              the gallons are determined by 


                                      -13-
<PAGE>   83

              multiplying the number of MCF's contained in the vapor stream 
              times the GPM's which are attributable to C2 (ethane) and heavier 
              components of the vapor.

         (b)  The Specification Product recovered as a liquid shall be measured 

              as follows: the ending tankage inventory minus beginning tankage
              inventory plus sales of the Specification Product less the
              Specification Product delivered to the Greeley Fractionator from 
              the Spindle Plant.

         (c)  The formula for the foregoing calculations is set forth on the 
              attached Exhibit H.

         6.5 Spindle Frac Measurement. Gallons of Specification Products
delivered by TEPPCO at the Spindle Fractionator shall be measured and calculated
as follows:

         (a)  With respect to ethane recovered as a vapor, the vapors shall be 
              measured to determine the volume measured in thousand cubic feet 
              ("MCF") and sampled to determine the gallons per MCF ("GPM"); then
              the gallons are determined by multiplying the number of MCF's 
              contained in the vapor stream times the GPM's which are 
              attributable to C2 (ethane) and heavier components of the vapor.

         (b)  The Specification Product recovered as a liquid shall be measured 
              as follows: the ending tankage inventory minus beginning tankage 
              inventory plus sales of the Specification Product (including 
              deliveries to the Greeley Fractionator) plus sales of 
              Specification Product delivered to the Amoco Pipeline.

         (c)  The formula for the foregoing calculations is set forth on the 
              attached Exhibit I.

                                   ARTICLE VII
                             COMPENSATION TO TEPPCO

         7.1 Fractionation Fee for Initial Period. As full consideration for the
fractionation services provided hereunder, Duke Energy shall pay to TEPPCO a fee
(the "Fractionation Fee") for each Gallon of Specification Product delivered to
Duke Energy by TEPPCO at the Delivery Points (as measured in accordance with
Article VI herein) during the Initial Period as follows:





                                      -14-
<PAGE>   84


<TABLE>
<CAPTION>
Gallons/Year Ending on Each                                      Fractionation
Anniversary of the Effective Date                                 Fee/Gallon
---------------------------------                                ------------
<S>                                                              <C>
first 25 million Gallons                                            $0.0825
next 25 million Gallons (25,000,001 to 50,000,000)                  $0.0725
next 25 million Gallons (50,000,001 to 75,000,000)                  $0.0675
next 25 million Gallons (75,000,001 to 100,000,000)                 $0.0600
next 35 million Gallons (100,000,001 to 135,000,000)                $0.0000
over 135 million Gallons                                            $0.0100
</TABLE>


         7.2 Fractionation Fee for Remainder of Term. As full consideration for
the fractionation services provided hereunder, Duke Energy shall pay to TEPPCO a
Fractionation Fee of $0.0425 for each Gallon of Specification Product delivered
to Duke Energy by TEPPCO at the Delivery Points (as measured in accordance with
Article VI herein) during the period of time beginning on the day after the
expiration of the Initial Period through and including the last day of the term
of this Agreement.

                                  ARTICLE VIII
                            TAXES AND OTHER PAYMENTS

         Duke Energy shall be responsible for the payment of all royalties,
overriding royalties, and other payments due or to become due on the Dedicated
Gas, Raw Product and/or Specification Products. Any tax (except any future tax
on the fractionation of natural gas liquids which shall be borne and paid
equally by the Parties) applicable to the Dedicated Gas, the Raw Product or the
Specification Products, including but not limited to, any tax applicable to
stored volumes of Raw Product or Specification Products, shall be borne and paid
by Duke Energy unless such tax is by law imposed upon TEPPCO, in which event,
such tax shall be paid by TEPPCO and charged to and reimbursed by Duke Energy.

                                   ARTICLE IX
                              ACCOUNTING PROCEDURE

         9.1 Billing. Statements shall be prepared by Duke Energy and furnished
to TEPPCO before the 20th day of each month for volumes of Specification
Products delivered to Duke Energy at the Delivery Points (as measured in
accordance with Article VI herein) during the prior month, which volumes shall
serve as an estimate of the volumes of Specification Products that will be
delivered to Duke Energy at the Delivery Points during such current month.
Within five (5) days after TEPPCO's receipt of such statement, TEPPCO shall
deliver to Duke Energy an invoice for the Fractionation Fee payable by Duke
Energy to TEPPCO using the volumes of estimated Specification Products covered
by such statement, as adjusted to correct for the effect of the estimate of
volumes contained in the statement delivered during the immediately preceding
month.




                                      -15-
<PAGE>   85



         9.2 Audit Rights. In accordance with the Confidentiality Agreement of
even date herewith between the Parties, each Party shall have, at its expense,
the right at all times to examine the books and records of the other Party,
during normal working hours, to the extent necessary to verify the accuracy of
any invoice, statement, charge, computation or demand made under or pursuant to
this Agreement. Each Party agrees to keep records and books of account in
accordance with generally accepted accounting principles in the industry. The
Parties agree that the sole and exclusive remedy and measure of damages for any
improper payments under this Agreement shall be the payment of the amount of
underpayment or the recovery of the amount of overpayment, as the case may be,
during the two (2) year period immediately preceding the date on which a Party
notifies the other Party in writing of an error, mistake, inaccuracy or other
claim with respect to any such invoice, statement, charge, computation or
demand.

                                    ARTICLE X
                      PAYMENT AND INTEREST ON LATE PAYMENTS

         10.1 Payment. Payment for all invoices delivered hereunder will be due
within ten (10) days after receipt.

         10.2 Interest on Late Payments. All past due payments hereunder shall
bear interest from the date due until paid at a rate equal to the lesser of (a)
a per annum rate equal to the prime rate of interest charged by Citibank, N.A.
plus five percent (5%) or (b) the maximum non-usurious rate of interest
permitted to be charged under applicable law.

                                   ARTICLE XI
                                  FORCE MAJEURE

         11.1 Effect of Force Majeure. In the event of Duke Energy or TEPPCO
being rendered unable, wholly or in part, by Force Majeure (as defined herein)
to carry out its obligations under this Agreement, other than to make payments
due hereunder, it is agreed that on such Party's giving notice and full
particulars (including all supporting documentation) of such Force Majeure to
the other Party as soon as practicable after the occurrence of the cause relied
on, then the obligations of the Parties, so far as they are affected by such
Force Majeure, shall be suspended during the continuance of any inability so
caused but for no longer period. The non-performing Party shall use commercially
reasonable efforts to mitigate the effects of the Force Majeure and remedy its
inability to perform as soon as reasonably possible.

         11.2 Definition of Force Majeure. The term "Force Majeure" shall mean
any circumstances beyond the reasonable control of the Party experiencing such
inability to perform, whether of the kind enumerated herein or not, including
but not limited to, acts of God, strikes, lockouts or industrial disputes or
disturbances, civil disturbances, arrest and restraint of rulers or people,
interruptions by government or court orders, necessity for compliance with any
present and future valid orders of court, or any law, statute, ordinance or 
regulation promulgated by any



                                      -16-
<PAGE>   86



Governmental Authority having proper jurisdiction, acts of the public enemy,
wars, riots, blockades, insurrections, including inability to secure materials
by reason of allocations promulgated by any authorized Governmental Authority,
epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts,
inclement weather which necessitates extraordinary measures and expense to
construct facilities and/or maintain operations, explosions, partial or entire
failure of gas supply, breakage or accident to machinery or lines of pipe,
freezing or excessive heating of wells or pipelines, inability to obtain or
delays in obtaining easements or rights-of-way, the shutting in of facilities
for the making of repairs, alterations or maintenance to wells, pipelines or
plants.

         11.3 Exceptions to Force Majeure. Neither Party shall be entitled to
the benefit of the provisions of this Article XI under either or both of the
following circumstances:

         (a)      To the extent that the inability to perform was caused by the
                  Party claiming Force Majeure having failed to remedy the
                  condition by taking all reasonable acts, short of litigation,
                  if such remedy requires litigation, and having failed to
                  resume performance of such commitments or obligations with
                  reasonable dispatch; or

         (b)      If the inability to perform was caused by lack of funds, or
                  with respect to the payment of any amount or amounts then due
                  hereunder.

         11.4 Strikes and Lockouts. Settlement of strikes and lockouts shall be
entirely within the discretion of the Party affected, and the duty that any
event of Force Majeure shall be remedied with all reasonable dispatch shall not
require the settlement of strikes and lockouts by acceding to the demands of the
Parties directly or indirectly involved in such strikes or lockouts when such
course is inadvisable in the discretion of the Party having such difficulty.

                                   ARTICLE XII
                                 INDEMNIFICATION

         Indemnification provisions pertaining to this Agreement are set forth
in the O&M Agreement.

                                  ARTICLE XIII
                                    DISPUTES

         13.1 Dispute Resolution; Arbitration. In the event of any controversy
or claim, whether based in contract, tort or otherwise, arising out of or
relating to this Agreement or the scope, breach, termination or validity of this
Agreement (a "Disputed Claim"), the Parties shall promptly seek to resolve any
such Disputed Claim by negotiations between senior executives of the Parties who
have authority to settle the Disputed Claim. When a Party believes there is a
Disputed Claim under this Agreement, that Party will give the other Party
written notice of the Disputed Claim. Within thirty (30) days after receipt of
such notice, the receiving Party shall submit to the other a written response.



                                      -17-
<PAGE>   87

Both the notice and response shall include (i) a statement of each Party'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 Party. In the event the Disputed Claim involves a claim
arising out of the actions of any Person not a signatory to this Agreement, the
receiving Party shall have such additional time as necessary, not to exceed an
additional thirty (30) Days, to investigate the Disputed Claim 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 Disputed Claim. If one of the executives intends to be
accompanied at a meeting by an attorney, the other executive shall be given at
least five (5) working Days' notice of such intention and may also be
accompanied by an attorney. All negotiations and communications pursuant to this
Article XIII shall be treated and maintained by the Parties as confidential
information and shall be treated as compromise and settlement negotiations for
the purposes of the Federal and State Rules of Evidence.

         13.2 Failure to Resolve Through Negotiations. If the Disputed Claim has
not been resolved within sixty (60) days after the date of the response given
pursuant to Section 13.1 above, or such additional time, if any, that the
Parties mutually agree to in writing, or if the Party receiving such notice
denies the applicability of the provisions of Section 13.1 or otherwise refuses
to participate under the provisions of Section 13.1, either Party may initiate
binding arbitration pursuant to the provisions of Section 13.3 below.

         13.3 Arbitration. Any Disputed Claims not settled pursuant to the
foregoing provisions shall be submitted to binding arbitration in accordance
with the following provisions. Arbitration shall be the sole and exclusive
remedy of the Parties in connection with any Disputed Claims hereunder.

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

         (b)  Within fifteen (15) days after receipt of such demand, the 
              receiving Party shall name its arbitrator. If the receiving Party
              fails or refuses to name its arbitrator within such fifteen (15)
              day period, the second arbitrator shall be appointed, upon request
              of the Party demanding arbitration, by the Chief U.S. District
              Court Judge for the District of Colorado 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 fifteen (15) day
              period, either Party may request the Chief U.S. District Court
              Judge for the District of Colorado or such other person
              designated by such judge to select the third arbitrator as soon
              as possible. In the event the Judge declines


                                      -18-
<PAGE>   88



              to appoint an arbitrator, appointment shall be made, upon
              application of either Party, 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 Party 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 Parties 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
              Parties are not required to be neutral, but the third arbitrator
              shall be neutral and shall be a certified public accountant. If
              neither of the arbitrators appointed by or on behalf of the
              Parties is a retired judge, then the third arbitrator shall be a
              retired judge.

         (d)  The Parties hereto hereby request and consent to the three (3)
              arbitrators conducting a hearing in Denver, Colorado, 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 Parties 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.

         (f)  The Federal Rules of Civil Procedure, as modified or supplemented 
              by the local rules of civil procedure for the U.S. District Court
              of Colorado, shall apply in the arbitration. The Parties shall
              make their witnesses available in a timely manner for discovery
              pursuant to such rules. If a Party 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 Parties hereto hereby request that the arbitrators render 
              their decision within thirty (30) 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



                                      -19-
<PAGE>   89

              and may be enforced by any Party 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 Party written
              notice of a Disputed Claim as provided in Section 13.1 above until
              such time as the Disputed Claim has been resolved pursuant to
              Section 13.1, or an arbitration award has been entered pursuant to
              Section 13.3.

         13.4 Recovery of Costs and Attorneys' Fees. In the event arbitration or
(despite the Parties agreement to resolve the Disputed Claims through binding
arbitration) litigation arising out of this Agreement is initiated by either
Party, the prevailing Party, 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.

         13.5 Choice of Forum. If, despite the Parties' agreement to submit any
Disputed Claims 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 and County of Denver, Colorado.

         13.6 Jury Waivers. THE PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO
DEMAND A TRIAL BY JURY.

         13.7 Limitation of Damages. WHETHER OR NOT OCCASIONED BY A DEFAULT OR
OTHER BREACH OF THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, LOSS OF PROFITS, OR CONSEQUENTIAL
DAMAGES EXCEPT FOR LIQUIDATED DAMAGES PAID BY DUKE ENERGY TO TEPPCO PURSUANT TO
SECTION 3.6 HEREOF.

         13.8 Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the Parties shall be governed by, the law of
the state of Colorado, without regard to any conflict-of-laws provision thereof
that would otherwise require the application of the law of any other
jurisdiction.

                                   ARTICLE XIV
                         REPRESENTATIONS AND WARRANTIES

         14.1 Representations and Warranties of Duke Energy. Duke Energy
represents and warrants to TEPPCO as follows:

              (a) Organization and Qualification. Duke Energy is a corporation 
duly organized and validly existing in good standing under the laws of the state
of Colorado, is duly qualified to do business in each jurisdiction where its
failure to so qualify would have a material adverse effect on 




                                      -20-
<PAGE>   90

its business, operations or financial condition, and has the corporate power and
authority to execute and deliver this Agreement and enter into and perform its
obligations hereunder.

              (b) Authority; Enforceability. The execution, delivery and
performance hereof by Duke Energy have been duly authorized by all necessary
corporate action on the part of Duke Energy, are not inconsistent with Duke
Energy's articles of incorporation, bylaws or other similar governing documents,
do not and will not contravene any law or governmental rule, regulation or order
now in effect applicable to it, do not and will not contravene any provision of,
or constitute a default under, or result in the creation of any lien under, any
indenture, mortgage, contract or other instrument to which Duke Energy is a
party or by which it is bound or any judgment, injunction, order or decree
applicable to it, and do not and will not require the approval or consent of any
trustee or holder of indebtedness or obligations of Duke Energy. This Agreement
has been duly executed and delivered by Duke Energy. Assuming due authorization,
execution and delivery hereof by TEPPCO, upon execution and delivery hereof,
this Agreement will constitute the legal, valid and binding agreement of Duke
Energy, enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, reorganization, insolvency or similar
laws generally affecting the enforcement of creditors' rights and by the
availability of equitable remedies.

              (c) Consents. No consents or approval of, giving of notice to,
registration with, or taking of any other action in respect of or by any
Governmental Authority is required with respect to the execution, delivery or
performance hereof by Duke Energy or, if any such approval, notice, registration
or action is required, it has been duly given or obtained.

              (d) Actions. There are no actions, suits or proceedings pending
or, to the knowledge of Duke Energy, threatened against or affecting Duke Energy
in any court or before any governmental commission, board or authority or
arbitration board or tribunal which in the reasonable judgment of Duke Energy
would materially adversely affect Duke Energy's financial condition or business
or the transactions contemplated hereby.

              (e) Dedicated Producer Contracts. The list of contracts described
on the attached Exhibit C is a complete, true and correct list of all Dedicated
Producer Contracts in effect as of the date hereof.

         14.2 Representations and Warranties of TEPPCO. TEPPCO represents and
warrants to Duke Energy as follows:

              (a) Organization and Qualification. TEPPCO is a limited liability
company duly organized and validly existing under the laws of the state of
Delaware, is duly qualified to do business in each jurisdiction where its
failure to so qualify would have a material adverse effect on its business,
operations or financial condition, and has the limited liability company power
and authority to execute and deliver this Agreement and enter into and perform
its obligations hereunder.


                                      -21-
<PAGE>   91

              (b) Authority; Enforceability. The execution, delivery and
performance hereof by TEPPCO have been duly authorized by all necessary limited
liability company action on the part of TEPPCO, are not inconsistent with
TEPPCO's governing documents, do not and will not contravene any law or
governmental rule, regulation or order now in effect applicable to it, do not
and will not contravene any provision of, or constitute a default under, or
result in the creation of any lien under, any indenture, mortgage, contract or
other instrument to which TEPPCO is a party or by which it is bound or any
judgment, injunction, order or decree applicable to it, and do not and will not
require the approval or consent of any trustee or holder of indebtedness or
obligations of TEPPCO. This Agreement has been duly executed and delivered by
TEPPCO. Assuming due authorization, execution and delivery hereof by Duke
Energy, upon execution and delivery hereof, this Agreement will constitute the
legal, valid and binding agreement of TEPPCO, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency or similar laws generally affecting the enforcement
of creditors' rights and by the availability of equitable remedies.

              (c) Consents. No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of or by any
Governmental Authority is required with respect to the execution, delivery or
performance hereof by TEPPCO or, if any such approval, notice, registration or
action is required, it has been duly given or obtained.

              (d) Actions. There are no actions, suits or proceedings pending
or, to the knowledge of TEPPCO, threatened against or affecting TEPPCO in any
court or before any governmental commission, board or authority or arbitration
board or tribunal which in the reasonable judgment of TEPPCO would materially
adversely affect TEPPCO's financial condition or business or the transactions
contemplated hereby.

                                   ARTICLE XV
                               GENERAL PROVISIONS

         15.1 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 Duke Energy:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention:  President
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-2613




                                      -22-
<PAGE>   92

                  and copy to:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention: General Counsel
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-8913

                  If to TEPPCO:

                           TEPPCO Colorado, LLC
                           2929 Allen Parkway, Suite 3200
                           Houston, Texas  77019
                           Attention:  President
                           Telephone:  (713) 759-3636
                           Facsimile:  (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:  (713) 759-3645

         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 15.1. 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.

         15.2 Waiver. No course of dealing and no delay on the part of either
Party in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such Party's rights, powers or remedies. No term or
condition of this Agreement shall be deemed to have been waived nor shall there
be any estoppel to enforce any provision of this Agreement except by written
instrument of the Parties charged with such waiver or estoppel. The waiver of
any breach of any term, condition or provision of this Agreement shall not be
construed as a waiver of any prior, concurrent or subsequent breach of the same
or any other term, condition or provision hereof.



                                      -23-
<PAGE>   93

         15.3 Entire Agreement. The Project Agreements and any related documents
between the Parties of even date herewith, including exhibits and schedules
attached thereto, constitute the final and entire agreement between the Parties
concerning the subject matter thereof, and supersedes all prior and
contemporaneous agreements and undertakings of the Parties in connection
therewith. The Project Agreements may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the Parties. There are no oral
agreements between the Parties.

         15.4 Successors and Assigns. Assignment provisions pertaining to this
Agreement are set forth in the O&M Agreement.

         15.5 Conflicts. In the event of any conflict between the provisions of
this Agreement and any exhibits or schedules attached hereto, the provisions of
this Agreement shall prevail.

         15.6 Laws and Regulations. This Agreement and the performance hereof
shall be subject to all valid and applicable federal and state laws and to the
valid and applicable orders, laws, rules, and regulations of any state or
federal authority having jurisdiction, but nothing contained herein shall be
construed as a waiver of any right to question or contest any such order, law,
rule, or regulation in any forum having jurisdiction.

         15.7 Recording. Duke Energy and TEPPCO shall execute, acknowledge,
deliver and record a "short form" memorandum of this Agreement in the form of
the attached Exhibit G, which shall be placed of record in the counties in which
the Dedicated Lands are situated. Promptly upon request by either Party at any
time following the expiration or earlier termination of this Agreement, however
such termination may be brought about, Duke Energy and TEPPCO shall execute and
deliver to each other an instrument, in recordable form, evidencing the
termination of this Agreement.

         15.8 Severability. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of any
other provision hereof.

         15.9 Time of Essence. Time is of the essence in the performance of all
obligations falling due hereunder.

         15.10 Captions. The headings to Articles, Sections and other
subdivisions of this Agreement are inserted for convenience of reference only
and will not affect the meaning or interpretation of this Agreement.

         15.11 Schedules and Exhibits. All schedules and exhibits hereto which
are referred to herein are hereby made a part hereof and incorporated herein by
such reference.

         15.12 No Partnership. The relationship between Duke Energy and TEPPCO
at all times shall not be deemed a partnership or joint venture.





                                      -24-
<PAGE>   94

         15.13 No Third Party Beneficiaries. Subject to the provisions of
Section 15.4 hereof, this Agreement inures to the sole and exclusive benefit of
Duke Energy and TEPPCO, their respective successors, legal representatives and
assigns, and confers no benefit on any third party.

         15.14 Mutual Cooperation; Further Assurances. Upon request by either
Party from time to time during the term of this Agreement, each Party agrees to
execute and deliver all such other and additional instruments, notices and other
documents and do all such other acts and things as may be necessary to carry out
the purposes of this Agreement and to more fully assure the Parties' rights and
interests provided for hereunder. Duke Energy and TEPPCO each agree to cooperate
with the other on all matters relating to required permits and regulatory
compliance by either Duke Energy or TEPPCO in respect of the Fractionators so as
to ensure continued full operation of the Fractionators by TEPPCO pursuant to
the terms of this Agreement.

         15.15 Survival. Survival provisions pertaining to this Agreement are
set forth in the O&M Agreement.

         15.16 Other Project Agreements. In the event of any conflict between
the provisions of any of the Project Agreements with each other or with the
Asset Purchase Agreement, the provisions of the O&M Agreement shall control over
the inconsistent provisions of any of the other Project Documents or the Asset
Purchase Agreement.

         15.17 Amendments; Changes; Modifications. This Agreement may not be
effectively amended, changed, modified, altered or terminated, except as
provided herein, without the written consent of the Parties and such consent
shall be effective only in the specific instance and for the specific purpose
for which it is given.

         The Parties hereto have executed this Agreement to be effective as of
the day first hereinabove written.

                                               DUKE ENERGY:

                                               DUKE ENERGY FIELD SERVICES, INC.


                                               By:
                                                  ------------------------------
                                               Name:
                                                     ---------------------------
                                               Title:
                                                     ---------------------------



                                               TEPPCO:

                                               TEPPCO COLORADO, LLC


                                               By:
                                                  ------------------------------
                                               Name:
                                                     ---------------------------
                                               Title:
                                                     ---------------------------



                                      -25-
<PAGE>   95



                                    EXHIBIT A


                                 DEDICATED LANDS

The lands within the following townships are dedicated to the Frac Agreement

Township 9 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 9 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 9 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 9 North, Range 68 West, 6th P.M., Larimer County, Colorado;
Township 9 North, Range 69 West, 6th P.M., Larimer County, Colorado;
Township 8 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 8 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 8 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 8 North, Range 68 West, 6th P.M., Larimer County, Colorado;
Township 8 North, Range 69 West, 6th P.M., Larimer County, Colorado;
Township 7 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 7 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 7 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 7 North, Range 68 West, 6th P.M., Larimer County, Colorado;
Township 7 North, Range 69 West, 6th P.M., Larimer County, Colorado;

<PAGE>   96

Township 6 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 6 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 6 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 6 North, Range 68 West, 6th P.M., Larimer County, Colorado;
Township 6 North, Range 69 West, 6th P.M., Larimer County, Colorado;
Township 5 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 5 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 5 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 5 North, Range 68 West, 6th P.M., Larimer County, Colorado;
Township 5 North, Range 69 West, 6th P.M., Larimer County, Colorado;
Township 4 North, Range 58 West, 6th P.M., Morgan County, Colorado;
Township 4 North, Range 59 West, 6th P.M., Morgan County, Colorado;
Township 4 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 68 West, 6th P.M., Weld County, Colorado;
Township 4 North, Range 69 West, 6th P.M., Boulder County, Colorado;
Township 3 North, Range 58 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 59 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 62 West, 6th P.M., Weld County, Colorado;


                                      A-2
<PAGE>   97

Township 3 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 68 West, 6th P.M., Weld County, Colorado;
Township 3 North, Range 69 West, 6th P.M., Boulder County, Colorado;
Township 2 North, Range 58 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 59 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 68 West, 6th P.M., Weld County, Colorado;
Township 2 North, Range 69 West, 6th P.M., Boulder County, Colorado;
Township 1 North, Range 58 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 59 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 60 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 61 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 62 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 63 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 64 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 65 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 66 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 67 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 68 West, 6th P.M., Weld County, Colorado;
Township 1 North, Range 69 West, 6th P.M., Boulder County, Colorado;
Township 1 South, Range 58 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 59 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 60 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 61 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 62 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 63 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 64 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 65 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 66 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 67 West, 6th P.M., Adams County, Colorado;
Township 1 South, Range 68 West, 6th P.M., Adams County, Colorado;

                                      A-3
<PAGE>   98

Township 1 South, Range 60 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 58 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 59 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 60 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 61 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 62 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 63 West, 6th P.M., Adams County, Colorado;
Township 2 South, Range 64 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 58 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 59 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 60 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 61 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 62 West, 6th P.M., Adams County, Colorado;
Township 3 South, Range 63 West, 6th P.M., Adams County, Colorado.








                                     A-4
<PAGE>   99




                                    EXHIBIT B


                                DEDICATED PLANTS


<TABLE>
<CAPTION>
PLANT NAME          LEGAL DESCRIPTION (ALL LOCATED WITHIN WELD COUNTY, COLORADO)
<S>                 <C>
Eaton Plant         Section 34, Township 7 North, Range 66 West

Mewbourn Plant      Section 35, Township 4 North, Range 66 West

Greeley Plant       Section 25, Township 5 North, Range 66 West

Lucerne Plant       Section 28, Township 6 North, Range 65 West

Spindle Plant       Section 34, Township 2 North, Range 67 West
</TABLE>






<PAGE>   100
                                    EXHIBIT C

                          DEDICATED PRODUCER CONTRACTS


WELD SYSTEM

           GPA.001.K                          Aceite Oil

           GPA.002.K                          Snyder Oil Company (was JRC)

           GPA.003.K                          Buck Ltd.

           GPA.005.K                          Sovereign Oil Co.

           GPA.006.K                          Cody/Nordell

           GPA.007.K                          Golden Buckeye (Combined
                                              w/GPA.001.L)

           GPA.008.KP                         MGF Oil  (AI)

           GPA.010.KP                         Kauffman & Weinberger

           GPA.013.KP                         Rocky Mountain Production Co.

           GPA.016.K                          Great Western Oil Co., Inc.

           GPA.017.K                          Energy Minerals Corp.

           GPA.028.K                          CDM Oil & Gas

           GPA.029.KP                         Centennial Petroleum, Inc.

           GPA.029.KP                         Decalta International Corp.

           GPA.032.K                          Machii-Ross Petroleum

           GPA.034.KPT                        Noarko Resources, Inc.

           GPA.035                            Shepler & Thomas, Inc.

           GPA.038.K                          Discovery Oil, Ltd.






<PAGE>   101

            GPA.039.K                          Blue Chip Oil, Inc.

            GPA.042.K                          H&C Colton Company

            GPA.043.K                          H&C Colton Company

            GPA.044.K                          Colton & Colton

            GPA.045.KP                         Morgan Energy Corp.

            GPA.045.KP                         Sunshine Valley Petroleum

            GPA.049.KPT                        Rex Monahan

            GPA.057.K                          Basin Exploration, Inc.

            GPA.062.K                          Martinex Corporation

            GPA.064.K                          Weeks Energy Minerals Corp.

            GPA.066.K                          Martinex Corporation

            GPA.068.K                          Morgan Energy

            GPA.069.K                          Eddy Oil Company

            GPA.070.K                          Universal Oil & Gas

            GPA.071.K                          Snyder Oil Company (was JRC)

            GPA.072.K                          Amoco Production Company

            GPA.073.KP                         HELMMCO, Private & Gary-Williams

            GPA.076.K                          Snyder Oil Company 
                                               (was Energy Oil, Inc.

            GPA.078.K                          Richardson Oil

            GPA.079.K                          Basin Exploration

            GPA.081.K                          Richardson Oil




                                       C-2




<PAGE>   102
            GPA.083.K                          Clark Energy Corporation

            GPA.094.K                          Sunshine Valley Petroleum

            GPA.095.K                          Conquest Oil Company

            GPA.096.K                          Mizel Petro Resources

            GPA.099.K                          Lyco Energy

            GPA.101.K                          Universal Oil & Gas, Inc.

            GPA.102.KP                         Kauffman & Weinberger

            GPA.103.K                          Rock Oil Corporation

            GPA.105.K                          Universal Oil & Gas

            GPA.106.K                          Sunshine Valley Petroleum

            GPA.107.KP                         Shenandoah Production Co.

            GPA.108.K                          Bataa Oil, Inc.

            GPA.110.K                          Blue Chip Oil, Inc.

            GPA.111.KP                         Basin Exploration, Inc.

            GPA.113.K                          Morgan Energy Corp.

            GPA.114.K                          Decalta International

            GPA.117.K                          Bataa Oil, Inc.

            GPA.120.K                          Mission Oil Corporation 
                                               (replaces GPA.030.K)

            GPA.121.K                          Gerrity Drilling

            GPA.123.K                          Golden Buckeye 
                                               (Combined with GPA.001.L)

            GPA.124.K                          Amoco Production Co.
                                               (Residue Gas Trans/Purchase)



                                       C-3

<PAGE>   103
            GPA.125.K                          Kersey Limited Pshp.

            GPA.127.K                          Eddy Oil Company

            GPA.128.K                          Lyco Energy

            GPA.130.K                          Barrett Energy Co.

            GPA.132.K                          Lyco Acquisition 1984-1

            GPA.135.K                          Eddy Oil Company

            GPA.137.K                          Energy Search & Mgmt.

            GPA.138.K                          The Gerrity Company, Inc.

            GPA.139.K                          Eagle Oil & Gas

            GPA.141.K                          Richardson Oil Company

            GPA.142.KP                         Barrett Energy Company

            GPA.143.KP                         The Quinoco Companies

            GPA.144.K                          Basin Exploration, Inc.

            GPA.145.K                          Elk Exploration

            GPA.146.K                          Bataa, Inc.

            GPA.149.K                          Conquest Oil Company

            GPA.154.K                          Bellwether Expl. Co.

            GPA.156.K                          Eagle Oil & Gas, Inc.

            GPA.157.K                          Cimmarron Oil Inc.

            GPA.158.K                          Misahar Investments,Inc.



                                       C-4


<PAGE>   104
             GPA.160.K                          High Country Resources

             GPA.161.KP                         Nielson Enterprises, Inc.

             GPA.162.KP                         Boomer-Sooner Field

             GPA.163.K                          Brown Investment Company

             GPA.164.K                          Morgan Richardson Oper.

             GPA.165.K                          Intermountain Oil Co.

             GPA.166.K                          Berthoud Gas Company

             GPA.167.K                          Bataa Oil, Inc.

             GPA.168.K                          B.E.A. Johnson, Inc.

             GPA.169.K                          Diamond A Corporation

             GPA.170.K                          Basic Earth Science Systems

             GPA.175.K                          Pacific Midland Prod.

             GPA.176.K                          Parker & Parsley

             GPA.178.K                          The Robert W. Gerrity Co.

             GPA.179.K                          Francis Energy, Inc.

             GPA.18O.K                          Bataa Oil, Inc.

             GPA.183.K                          Colorado Plains Mgmt. & Invest.

             GPA.185.K                          Mendell-Denver Corporation

             GPA.186.K                          Mazuma Turnkey Contractors,Inc.

             GPA.187.K                          Mazuma Turnkey Contractors,Inc.

             GPA.188.K                          Francis Energy, Inc.



                                      C-5


<PAGE>   105
             GPA.189.K                        Francis Energy, Inc.

             GPA.193.K                        Aceite Energy Corporation

             GPA.195.K                        Macey & Mershon Oil Inc.

             GPA.197.K                        Freedom Energy, Inc.

             GPA.198.KP                       Omimex Petroleum, Inc. (Renegade)

             GPA.202.K                        Industrial Gas Associates, Inc.

             GPA.210.K                        K.P. Kauffman Company, Inc.

             GPA.211.K                        Western Gas Supply Company

             GPA.212.K                        Elk Exploration, Inc.

             GPA.213.KP                       Geo-Tech Production, Inc.

             GPA.214.KP                       Omimex Petroleum, Inc.

             GPA.216.K                        Fountainhead Resources, Ltd.

             GPA.217.K                        Lyco Energy Corporation

             GPA.223.K                        Go Pumping and Consulting, Inc.

             GPA.224.K                        Kloxin Energy, Inc.

             GPA.227.K                        The Robert Gerrity Company

             GPA.228.K                        The Robert Gerrity Company

             GPA..229.K                       Mendell-Denver Corporation

             GPA.230.K                        K.P. Kauffman Company, Inc.

             GPA.231.K                        K.P. Kauffman Company, Inc.

             GPA.232.K                        Basin Exploration, Inc.
                                              (Nielson acreage)


                                       C-6
<PAGE>   106

             GPA.233.K                        Basin Exploration, Inc. 
                                              (Byron "J" Sand acreage)

             GPA.235.K                        The Gerrity Oil and Gas Corp.

             GPA.236.K                        Bataa Oil, Inc.

             GPA.238.K                        Greeley Gas Company

             GPA.239.K                        Francis Energy, Inc. 
                                              (Lesser/Spomer Wells)

             GPA.240.K                        Francis Energy, Inc. 
                                              (Plumb No. 1 Well)

             GPA.241.K                        Farmoil, Inc.

             GPA.242.K                        Unioil, Inc.

             GPA.243.K                        Martin Exploration Mgmt. Corp.

             GPA.244.K                        Mendell-Denver Corporation

             GPA.246.K                        Western Production Company

             GPA.247.K                        Timka Resources, Ltd.

             GPA.248.K                        Diamondback Oil Corporation

             GPA.249.K                        Blue Chip Oil, Inc.

             GPA.250.K                        Francis Energy, Inc.

             GPA.251.K                        Snyder Oil Company

             GPA.253.K                        Snyder Operating Partnership
                                              (Natural Gas Exchange Agr.)

             GPA.255.K                        Elk Exploration, Inc.

             GPA.257.K                        Morning Fresh Farms, Inc.

             GPA.258.K                        Western Production Company



                                      C-7
<PAGE>   107

             GPA.260.K                        Valley Operating, Inc.

             GPA.264.K                        Gerrity Oil & Gas Corporation

             GPA.269.K                        Richardson Operating Company

             GPA.267.K                        K. P. Kauffman Company, Ltd.

             GPA.268.K                        Habersham Energy Company

             GPA.269.K                        Oaks Resources Management, Inc.

             GPA.270.K                        Sandlin Oil Corporation

             GPA.271.K                        Martin Exploration Mgmt. Corp.

             GPA.272.K                        North American Resources

             GPA.273.K                        Credo Petroleum Corporation

             GPA.274.K                        EFTS II, Inc.

             GPA.275.K                        CFG Energy, Inc.

             GPA.276.K                        Vessels

             GPA.277.K                        Parker & Parsley Petroleum Co.

             GPA.278.K                        Cache Exploration

             GPA.279.K                        Basin Exploration, Inc.

             GPA.280.K                        Mendell Petroleum Corporation

             GPA.281.K                        Mineral Resources, Inc.

             GPA.283.K                        Basin Exploration, Inc.

             GPA.284.K                        Barrett Resources Corporation

             GPA.285.K                        Byron Oil Industries, Inc.



                                      C-8
<PAGE>   108


             GPA.286.K                          Markus Production, Inc.

             GPA.287.K                          Phil Shepardson

             GPA.288.K                          Freedom Energy, Inc.

             GPA.289.K                          Basin Exploration, Inc.

             GPA.290.K                          Stephen B. Evans & Co., 
                                                Alarado Resources Limited and 
                                                Alarado Resources Corp.

             GPA.291.K                          Snyder Oil Corporation

             GPA.292.K                          Gusoil-1981, Gusoil-1982 &
                                                K.P. Kauffman Company, Inc.

             GPA.293.K                          Heflin Energy Corporation

             GPA.294.K                          Suzanne D. Bucy

             GPA.295.K                          HS Resources, Inc.

             GPA.296.K                          Blue Chip Oil, Inc.

             GPA.297.K                          Kaiser-Francis Oil Company

             GPA.298.K                          Lyco Energy Corporation

             GPA.299.K                          Prima Energy

             GPA.300.K                          Bataa Oil, Inc.

             GPA.301.K                          Unioil, Inc.

             GPA.303.K                          Basin Exploration

             GPA.304.K                          Bataa Oil, Inc.

             GPA.305.K                          Patina Oil & Gas Corporation
                                                (formerly Gerrity)




                                      C-9
<PAGE>   109



             GPA.306.K                      Patina Oil & Gas Corporation 
                                            (formerly Gerrity)

             GPA.307.K                      Prima Oil & Gas Company

             GPA.308.K                      Matrix Energy, L.L.C.

             GPA.309.K                      CDM Oil & Gas

             GPA.003.E                      WEDCO Resources Corp.

             GPA.005.E                      Sentry Oil Corp.

             GPA.006.E                      CWI Oil and Gas

             GPA.007.E                      Trailblazer Oil and Gas 
                                           (FILES I, II, III)

             GPA.010.E                      Hershey Oil

             GPA.011.E                      Emerald Corporation (f/k/a Petromax)

             GPA.013.E                      PRC Oil and Gas Company

             GPA.014.E                      Catamount Exploration, Inc. 
                                            (Replaced GPA.069.E)

             GPA.015.E                      Hershey Oil Corporation

             GPA.017.E                      Decalta International Corp.

             GPA.020.E                      Frizzell Oil Company

             GPA.021.E                      R.A. Resources, Inc.

             GPA.023.E                      SHF Partnership

             GPA.024.E                      Bellwether Exploration Co.

             GPA.025.E                      HI-TEC Energy, Inc.

             GPA.026.E                      Frontier Oil & Gas





                                      C-10
<PAGE>   110

             GPA.027.E                    Snyder Oil Company

             GPA.028.E                    R.A. Resources, Inc.

             GPA.029.E                    Frizzell Oil Company

             GPA.030.E                    Vantage Oil, Inc.

             GPA.032.E                    R.A. Resources, Inc.

             GPA.034.E                    Vantage Oil, Inc.

             GPA.035.E                    Snyder Oil Company

             GPA.037.E                    Sunset Hill Oil Co., Inc.

             GPA.038.E                    Energex, Inc.

             GPA.039.E                    Gusher Oil & Gas Co., Inc.

             GPA.040.E                    Maze Expl./Golden Buckeye (Combined
                                          w/GPA.001.L)

             GPA.041.E                    Barrett Energy Resources

             GPA.043.E                    Aztec Resources Corp.

             GPA.044.E                    Morgan Energy Corp.

             GPA.045.E                    Cache Exploration, Inc.

             GPA.046.E                    Conquest Oil

             GPA.047.E                    Sunshine Valley Petroleum

             GPA.049.E                    Blue Chip Oil, Inc.

             GPA.052.E                    Conquest Oil Co.

             GPA.053.E                    Sunshine Valley Petroleum Corporation

             GPA.054.E                    Lone Star Oil Company



                                      C-11
<PAGE>   111

            GPA.055.E                  Sunshine Valley Corp.

            GPA.059.E                  Bellwether Exploration

            GPA.063.E                  Cowan Oil Company

            GPA.064.E                  Grady Oil Company

            GPA.065.E                  Jenex Petroleum Corp. (First City Wells)

            GPA.067.E                  Blue Chip Oil, Inc.

            GPA.068.E                  Jenex Petroleum Corporation (Metro Wells)

            GPA.069.E                  Nautilus Equipment, Inc. (Replaces
                                       GPA.014.E)

            GPA.071.E                  Energy Minerals Corporation

            GPA.072.E                  Elwood Oil Company

            GPA.073.E                  Lysander Resources

            GPA.074.E                  Blue Chip Oil, Inc.

            GPA.076.E                  Pantera Energy Corporation

            GPA.078.E                  Blue Chip Oil, Inc.

            GPA.080.E                  Brooks Exploration Inc.

            GPA.081.E                  Brooks Exploration Inc.

            GPA.082.E                  Kauffman & Weinberger, Inc.

            GPA.083.E                  H&R Well Service

            GPA.084.E                  Mendell-Denver Corporation

            GPA.085.E                  Francis Energy, Inc.

            GPA.086.E                  Rico Resources



                                      C-12
<PAGE>   112



             GPA.001.BT                  Meco Operating Corporation

             GPA.002.BT                  Reider Oil Corporation

             GPA.003.BT                  Discovery Oil, Ltd.

             GPA.004.BT                  Shepler & Thomas-

             GPA.005.BT                  Monfort of Colorado

             GPA.006.BT                  Sovereign Oil Company

             GPA.008.BT                  Jenex Petroleum Corporation 
                                        (was Petromax)

             GPA.009.BT                  Morning Fresh Farm

             GPA.010.BT                  Duke L. Phillips, Indiv.

             GPA.011.BT                  Elmer E. & Roy Lundvall

             GPA.012.BT                  Rex Monahan, Individual

             GPA.014.BT                  Power Energy Resources

             GPA.015.BT                  Valley View Exploration

             GPA.016.BT                  Belwether Exploration Co.

             GPA.019.BT                  Martin Exploration Mgmt.

             GPA.020.BT                  R.A. Resources

             GPA.024.BT                  Morgan Energy Corporation

             GPA.027.BT                  Sunshine Valley Petroleum

             GPA.028.BT                  Morgan Energy Corporation

             GPA.029.BT                  Richardson Oil Company

             GPA.030.BT                  Lundvall and Associates




                                      C-13
<PAGE>   113


             GPA.032.BT                         Bataa Oil, Inc.

             GPA.033.BT                         Martinex Corporation

             GPA.034.BT                         Morgan Energy Corp.

             GPA.035.BT                         Basin Exploration

             GPA.036.BT                         Gerrity Drilling

             GPA.037.BT                         L.M.S. American Holdings

             GPA.038.BT                         BP-34 Limited

             GPA.043.BT                         The Gerrity Company, Inc.

             GPA.044.BT                         Mayers & Company 
                                                (replaced GPA.018.BT)

             GPA.046.BT                         Lundvall and Associates

             GPA.047.BT                         R.A. Resources, Inc.

             GPA.048.BT                         Oxford Ltd. Partnership

             GPA.049.BT                         Colo. Energy Resources

             GPA.051.BT                         HS Resources, Inc. 
                                                (Successor to Elk Exploration)

             GPA.053.BT                         Conquest Oil Company

             GPA.054.BT                         Cannon Resources, Inc.

             GPA.058.BT                         New London Oil

             GPA.059.BT                         Cache Exploration, Inc.

             GPA.060.BT                         New London Oil, Inc.

             GPA.061.BT                         New London Oil, Inc.

             GPA.062.BT                         Eddy Oil Company





                                      C-14
<PAGE>   114



             GPA.063.BT                         Lundvall and Associates

             GPA.001.EV                         Elk Exploration, Inc. 
                                                FILE I & II (Wal-Mart)

             GPA.004.EV                         Eddy Oil Company

             GPA.005.EV                         Unioil (Unioil Agreements dtd 
                                                11/24/84, combined)

             GPA.006.EV                         R.A. Resources, Inc.

             GPA.007.EV                         Barrett Energy Company

             GPA.001.L                          Prima Oil & Gas Company

             GPA.002.L                          Cache Resources/Cache Exp.

             GPA.003.L                          Bellwether Exploration

             GPA.004.L                          Sovereign Oil Company

             GPA.005.L                          Clark Energy Corporation

             GPA.006.L                          R.A. Resources, Inc.

             GPA.007.L                          Coors Energy Company

             GPA.008.L                          Unioil

             GPA.009.L                          Andrau Enterprises, Inc.

             GPA.010.L                          Greeley Gas Company

             GPA.011.L                          Sentry Oil Corporation

             GPA.012.L                          Petro Noel, Inc.

             GPA.013.L                          Eddy Oil

             GPA.014.L                          Elwood Oil Company



                                      C-16
<PAGE>   115

             GPA.015.L                   Vantage Oil, Inc.

             GPA.016.L                   Calvin Petroleum Corp.

             GPA.017.L                   Wichita Industries, Inc.

             GPA.018.L                   Andrau Enterprises, Inc.

             GPA.019.L                   Calvin Petroleum Corp. 

             GPA.020.L                   Conquest Oil, Inc.
 
             GPA.021.L                   Basin Exploration, Inc.

             GPA.022.L                   Jason Exploration, Inc.

             GPA.024.L                   Pantera

             GPA.025.L                   Sunshine Valley

             GPA.026.L                   North Colorado Medical Center

             GPA.027.L                   University of Northern Colorado

             GPA.028.L                   Reider Oil

             GPA.029.L                   Lyco Energy

             GPA.030.L                   Snyder Oil Company (f/k/a Energy Oil)

             GPA.031.L                   Four Star Exploration

             GPA.032.L                   Mountain Industrial Gas

             GPA.033.L                   Ideal Basic Industries

             GPA.034.L                   H&C Colton

             GPA.035.L                   Thompson Valley Gas, Inc.

             GPA.036.L                   Cannon Resources, Inc.



                                      C-16
<PAGE>   116

             GPA.037.L                          Bristol Production, Inc.

             GPA.038.L                          Energy Minerals Corp.

             GPA.039.L                          Jenex Petroleum Corp.

             GPA.040.L                          Silverado Oil, Inc.

             GPA.041.L                          Eddy Oil Company

             GPA.041.L                          Parker & Parsley

             GPA.043.L                          Cannon Resources, Inc.

             GPA.044.L                          Eagle Oil & Gas, Inc.

             GPA.045.L                          New London Oil

             GPA.049.L                          Elwood Oil Company

             GPA.050.L                          Cache Exploration

             GPA.051.L                          Cowan Oil Company

             GPA.053.L                          Simmons Energy Company

             GPA.056.L                          Jenex Petroleum Corporation

             GPA.057.L                          Silverado Oil, Inc.

             GPA.058.L                          Coors Energy Company

             GPA.059.L                          Cache Exploration, Inc.

             GPA.060.L                          Prima Exploration

             GPA.003BGC                         Morgan Energy Corporation

             GPA.013.BGC                        Howard Buehler

             GPA.015.BGC                        Sovereign Oil Company



                                      C-17
<PAGE>   117

             GPA.016.BGC                   DJ Energy, Inc.

             GPA.002.FR                    San Juan Consortium

             GPA.001.PAN                   Energy Minerals Corporation

             GPA.002.PAN                   Petroleum Energy Corporation

             GPA.003.PAN                   Aexco Petroleum, Inc.

             GPA.004.PAN                   Shepler & Thomas

             GPA.005.PAN                   Davis Oil Company

             GPA.006.PAN                   Polfam Exploration Company

             GPA.007.PAN                   Schmid Properties

             GPA.008.PAN                   Bellwether Exploration Company

             GPA.009.PAN                   Jubilee Pipeline

             GPA.010.PAN                   D&S Oilfield

             GPA.012.PAN                   Colorado Interstate Gas Company

             GPA.013.PAN                   Energy Minerals

             GPA.014.PAN                   Agland, Incorporated

             GPA.015.PAN                   Vessels Oil and Gas Company

             GPA.016.PAN                   Industrial Gas Services, Inc.

             GPA.017.PAN                   Industrial Gas Services, Inc.

             GPA.018.PAN                   Sentry Oil Corporation

             GPA.019.PAN                   Pipeline Corporation of Colorado

             GPA.020.PAN                   Sun Exploration and Production Co.

                                      C-18
<PAGE>   118

             GPA.021.PAN                     Classic Petroleum Corp.

             GPA.022.PAN                     Energy Minerals Corporation

             GPA.023.PAN                     Lynx Exploration Company

             GPA.024.PAN                     Regal Petroleum, Ltd.

             GPA.025.PAN                     Regal Petroleum, Ltd.

             GPA.026.PAN                     Petroleum Energy Corporation

             GPA.027.PAN                     Sunset Hill Oil Co.

             GPA.028.PAN                     Colorado Gathering and Processing

             GPA.029.PAN                     Diversified Operating Corporation

             GPA.030.PAN                     Cache Exploration, Inc.

             GPA.031.PAN                     Lysander Resources, Inc.

             GPA.032.PAN                     Diversified Operating Corporation

             GPA.033.PAN                     Jenex Petroleum Corp.

             GPA.034.PAN                     Pan Western 1986 Drilling Program

             GPA.035.PAN                     Alfred Ward & Son

             GPA.037.PAN                     Eagle Energy, Inc.

             GPA.037.PAN                     Merrion Oil & Gas Corporation

             GPA.038.PAN                     Bristol Production, Inc.

             GPA.039.PAN                     Red Wave, Ltd.

             GPA.040.PAN                     American Penn Energy, Inc.

             GPA.041.PAN                     MGF Oil Corporation



                                      C-19
<PAGE>   119

             GPA.043.PAN                        Fina Oil & Chemical Company

             GPA.044.PAN                        Energy Minerals/Merrion Oil

             GPA.045.PAN                        Benton Petroleum Company

             GPA.046.PAN                        Weldmor Limited Partnership

             GPA.047.PAN                        Energy Minerals Corporation

             GPA.048.PAN                        Walsh Production, Inc.

             GPA.049.PAN                        Aexco Petroleum, Inc.

             GPA.050.PAN                        Damson Gas Processing Corp.

             GPA.053.PAN                        Pan Western Energy

             GPA.057.PAN                        Randy Hrvek, Individual

             GPA.064.PAN                        Fina Oil and Chemical Company

             GPA.065.PAN                        Walsh Production, Inc.

             GPA.067.PAN                        Walsh Production, Inc.

             GPA.069.PAN                        Walsh Production, Inc.

             GPA.071.PAN                        Lomita Operating

             GPA.072.PAN                        Cache Exploration, Inc.

             GPA.074.PAN                        Lomita Operating Company

             GPA.075.PAN                        Fina Oil and Chemical Company

             GPA.076.PAN                        Arlian, Inc.

             GPA.078.PAN                        Walsh Production, Inc.

             GPA.079.PAN                        DeClar Oil & Gas, Inc.



                                      C-20
<PAGE>   120
                                       
           GPA.080.PAN                   Lander Petroleum Co.
                                       
           GPA.081.PAN                   Everett Frerichs Oil Properties
                                       
           GPA.082.PAN                   H&R Well Services, Inc.
                                       
           GPA.083.PAN                   Jenex Petroleum
                                       
           GPA.084.PAN                   Petcon Associates Ltd.
                                       
           GPA.085.PAN                   Diversified Operating Corporation
                                       
           GPA.086.PAN                   Petcon Associates, Ltd.
                                       
           GPA.087.PAN                   OM Shree Investment Group
                                       
           GPA.088.PAN                   Jerry Pettyjohn d/b/a Rocket Petroleum
                                       
           GPA.089.PAN                   Tindal Operating Company
                                       
           GPA.090.PAN                   Rex Monahan
                                       
           GPA.091.PAN                   Diversified Operating Corporation
                                       
                                       
SPINDLE SYSTEM

          GPA.001.S                      Basin Operating Company

          GPA.002.S                      Colorado Interstate Gas Company

          GPA.002.S                      Colorado Interstate Gas Company

          GPA.004.S                      North American Resources Company

          GPA.005.S                      Martin Oil Service, Inc. (CIG No. 681)

          GPA.006.S                      Martin Oil Service, Inc. (CIG No. 679)

          GPA.007.S                      Machii-Ross Petroleum Company (CIG
                                         No. 1047)



                                      C-21
<PAGE>   121

             GPA.008.S               Energy Minerals Corporation (CIG No. 408)

             GPA.009.S               Kenneth A. Ross, Jr. (CIG No. 402)

             GPA.010.S               Energy Minerals Corporation (CIG No. 1079)

             GPA.011.S               Ray O. Brownlie (CIG No. 539)

             GPA.012.S               Energy Minerals Corporation (CIG No. 1078)

             GPA.013.S               Snyder Oil Corporation (Amoco/Calvin)

             GPA.014.S               Vessels Oil & Gas Company
                                     (Natural Gas Exchange Agreement)

             GPA.015.S               North American Resources Company

             GPA.016.S               Oaks Resources Management, Inc.

             GPA.017.S               Meyer Oil Company

             GPA.018.S               Energy Minerals Corporation

             GPA.020.S               Basin Exploration

             GPA.022.S               Amoco Production Company

             GPA.024.S               Martin Exploration Management Co.

             GPA.025.S               Heflin Energy Corporation

             GPA.026.S               Crystal Oil Co.

             GPA.027.S               K.P. Kauffman Company, Inc. (duplicate
                                     file B.8.15.5)

             GPA.028.S               Top Operating Company

             GPA.029.S               Machii-Ross Petroleum Company


ROGGEN SYSTEM

             GPA.001.R               Snyder Oil Corporation

             GPA.002.R               Basin Exploration, Inc.



                                     C-22
<PAGE>   122

             GPA.003.R                   Bataa Oil

             GPA.004.R                   Bataa Oil

             GPA.005.R                   Churchill Energy, Inc.

             GPA.006.R                   Freedom Energy, Inc.

             GPA.007.R                   Gerrity Oil & Gas Corporation

             GPA.008.R                   Homestead Oil Inc. (Prima)

             GPA.009.R                   HS Resources

             GPA.010.R                   HS Resources

             GPA.011.R                   Parker and Parsley Devel/Costilla

             GPA.012.R                   Prima Oil & Gas Company

             GPA.013.R                   Prima Oil & Gas Company

             GPA.014.R                   Prima Oil & Gas Company

             GPA.015.R                   Churchill Energy, Inc.

             GPA.001.RP                  Argonex Company

             GPA.002.RP                  Arlian Inc.

             GPA.003.RP                  Arlian Inc.

             GPA.004.RP                  Bolling Oil Properties Inc.

             GPA.005.RP                  Bolling Oil Properties Inc.

             GPA.006.RP                  Cascade Oil & Gas, Inc.

             GPA.007.RP                  Cascade Oil & Gas, Inc.

             GPA.008.RP                  Diversified Operating

             GPA.009.RP                  Diversified Operating

             GPA.010.RP                  Geotech Productions Inc.

             GPA.011.RP                  Geotech Productions Inc.

             GPA.012.RP                  H & R Well Service

             GPA.013.RP                  H & R Well Service (Robin)

             GPA.014.RP                  Habersham Energy

             GPA.015.RP                  HS Resources

             GPA.016.RP                  HS Resources

             GPA.017.RP                  HS Resources

             GPA.018.RP                  Jerry Pettyjohn

             GPA.019.RP                  KP Kaufman

             GPA.020.RP                  Kaiser Francis Oil Company/Weip King

             GPA.021.RP                  Kaiser Francis Oil Company

             GPA.022.RP                  Kaiser Francis Oil Company

             GPA.023.RP                  Larry Brandly

             GPA.024.RP                  Omimex Petroleum

             GPA.025.RP                  Overland Resources

             GPA.026.RP                  P & M Petroleum Management

             GPA.027.RP                  Pozo Resources

             GPA.028.RP                  Prospect Oil, Inc.

             GPA.029.RP                  Prospect Oil, Inc.



                                      C-23
<PAGE>   123

             GPA.030.RP                  RC Qualls

             GPA.031.RP                  Resource Technology/Rochester

             GPA.032.RP                  Smith Energy Corp.

             GPA.033.RP                  Smith Energy Corp.

             GPA.034.RP                  Smith Energy Corp.

             GPA.035.RP                  Smith Oil Properties/H & R (Robin)

             GPA.036.RP                  Smith Oil Properties

             GPA.037.RP                  Smith Oil Properties

             GPA.038.RP                  Southmark Acquisitions/P & P

             GPA.039.RP                  T.P. Operating, Inc.

             GPA.040.RP                  Thorofare Resources, Inc.

             GPA.041.RP                  Thorofare Resources, Inc.

             GPA.042.RP                  Thorofare Resources, Inc.

             GPA.043.RP                  Union Pacific Resources Co.

             GPA.044.RP                  DJ Production Services, Inc.

             GPA.045.RP                  Diversified Operating Corporation

             GPA.046.RP                  R.C. Qualls Operating

             GPA.047.RP                  T.P. Operating, Inc.

             GPA.048.RP                  Diversified Operating Corporation

             GPA.049.RP                  Thorofare Resources, Inc.

             GPA.050.RP                  Arlian, Inc.

             GPA.051.RP                  Arlian, Inc.

             GPA.052.RP                  Omimex International Corp.

             GPA.053.RP                  P&M Petroleum Management

             GPA.054.RP                  Smith Oil Properties, Inc.

             GPA.055.RP                  Smith Oil Properties, Inc.

             GPA.056.RP                  Smith Energy Corporation

             GPA.057.RP                  Cascade Oil & Gas, Inc.

             GPA.058.RP                  Larry Brandly

             GPA.059.RP                  G & R Oil Properties, Inc. (Smith
                                         Energy Corp.)

             GPA.060.RP                  Overland Resources, Ltd.

             GPA.061.RP                  Sovereign Energy, L.L.C.

             GPA.062.RP                  Kaiser-Francis Oil Company

             GPA.063.RP                  K.P. Kauffman Company, Inc.

             GPA.064.RP                  Blue Creek, Inc.

             GPA.065.RP                  Argonex Company

             GPA.001RW                   Frank H. Walsh

             GPA.002RW                   Roggen/Redwave Ltd

             GPA.001.RPD                 Geotech Productions, Inc.

             GPA.002.RPD                 Termo Co.

             GPA.001.REG                 Freedom Energy, Inc.

             GPA.002.REG                 Gerrity Oil & Gas Company

             GPA.003.REG                 Windsor Gas Processing



                                      C-24
<PAGE>   124
                                    EXHIBIT D


                      [Plot Plan of Greeley Fractionator]






<PAGE>   125



                                   EXHIBIT E


                      [Plot Plan of Spindle Fractionator]




                                        
                                      D-2
<PAGE>   126



                                    EXHIBIT F

                           LIQUIDATED DAMAGES FORMULA


  L                 (X+1-A)                      (X-A)
(Sigma)  Y  =   (V x (0.98)          ) x N x (1/(1.135)      )
  A    (X)




Where:

         A = The Contract Year during which termination of the Agreement occurs.

         L = 20 (the last Contract Year of the Agreement).

         Y = Discounted annual liquidated damages for Contract Year X.

         X = The particular Contract Year for which liquidated damages are being
             calculated.

         V = The Specification Product volume (in Gallons) delivered by TEPPCO 
             to Duke Energy during the Contract Year immediately preceding 
             Contract Year A.

         N = The Fractionation Fee in Contract Year X minus $0.005 (in $ per 
             Gallon).

         Contract Year = Any Year during the term of the Agreement that begins 
                         on an anniversary date of the Effective Date.

         Capitalized terms used but not defined in this Exhibit F have the
definitions given those terms in the Agreement.






<PAGE>   127

                                                                       EXHIBIT F

                         EXAMPLE OF LIQUIDATED DAMAGES
                               (FOR SECTION 3.4)

NOTE:  This example assumes Total Specification Products in Year 4 of 150 MMG.


<TABLE>

<S>                                <C>  <C>       <C>                    <C>         <C>
CONTRACT YEAR OF TERMINATION:      5    A         LIQUIDATED DAMAGES($MM)  1.072
LAST YEAR OF CONTRACT:            20    L         
                                                  CONTRACT FEE($/g)       0.0100
                                                  NET FEE($/g):           0.0050     N    =Fee in Years 1-10; Years 11-20=0.0375

VOLUME(MM/GAL) LOST IN CONT. YFL   4    =  10 V(A-1)
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
CONTRACT YEAR             0        1         2         3         4         5         6         7         8         9      10
----------------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>       <C>       <C>       <C>    <C>      <C>       <C>        <C>      <C>      <C>
VOLUME(MM/GAL)                     0         0         0         0     9.800     9.608     9.419     9.235     9.054   8.876
----------------------------------------------------------------------------------------------------------------------------
PROTECTED NET FEE ($MM)            0         0         0         0     0.049     0.048     0.047     0.046     0.045   0.044
----------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------------------
UNDISC. CASH FLOW ($MM)            0         0         0         0     0.049     0.048     0.047     0.046     0.045   0.044
----------------------------------------------------------------------------------------------------------------------------
CUM. CASH FLOW ($MM)               0         0         0         0     0.049     0.097     0.144     0.190     0.236   0.280
----------------------------------------------------------------------------------------------------------------------------
DISC. CASH FLOW ($MM)              0         0         0         0     0.049     0.042     0.037     0.032     0.027   0.024
----------------------------------------------------------------------------------------------------------------------------
CUM. DISC. CASH FLOW ($MM)         0         0         0         0     0.049     0.091     0.128     0.159     0.187   0.210
----------------------------------------------------------------------------------------------------------------------------
VALUE OF Y(X) ($MM)                0         0         0         0     0.049     0.042     0.037     0.032     0.027   0.024
----------------------------------------------------------------------------------------------------------------------------

<CAPTION>

--------------------------------------------------------------------------------------------------------------------------------  
CONTRACT YEAR                      11        12        13        14        15        16        17        18        19         20  
--------------------------------------------------------------------------------------------------------------------------------  
<S>                            <C>     <C>       <C>        <C>       <C>        <C>       <C>      <C>        <C>        <C>  
VOLUME(MM/GAL)                  8.702     8.531     8.364     8.200     8.039     7.882     7.727     7.576     7.427      7.282
--------------------------------------------------------------------------------------------------------------------------------  
PROTECTED NET FEE ($MM)         0.326     0.320     0.314     0.308     0.301     0.296     0.290     0.284     0.279      0.273
--------------------------------------------------------------------------------------------------------------------------------  

--------------------------------------------------------------------------------------------------------------------------------  
UNDISC. CASH FLOW ($MM)         0.326     0.320     0.314     0.308     0.301     0.296     0.290     0.284     0.279      0.273
--------------------------------------------------------------------------------------------------------------------------------  
CUM. CASH FLOW ($MM)            0.606     0.926     1.240     1.547     1.849     2.144     2.434     2.718     2.997      3.270
--------------------------------------------------------------------------------------------------------------------------------  
DISC. CASH FLOW ($MM)           0.153     0.132     0.114     0.098     0.085     0.073     0.063     0.055     0.047      0.047
--------------------------------------------------------------------------------------------------------------------------------  
CUM. DISC. CASH FLOW ($MM)      0.363     0.495     0.609     0.707     0.792     0.865     0.929     0.984     1.031      1.072
--------------------------------------------------------------------------------------------------------------------------------  
VALUE OF Y(X) ($MM)             0.020     0.018     0.015     0.013     0.011     0.010     0.008     0.007     0.006      0.005
--------------------------------------------------------------------------------------------------------------------------------  
</TABLE>


                                      F-2
<PAGE>   128



                                    EXHIBIT G

                      MEMORANDUM OF FRACTIONATION AGREEMENT


         THIS MEMORANDUM OF FRACTIONATION AGREEMENT (this "Memorandum") is made
and entered into this 21st day of April, 1998, but effective 11:59 p.m. (Denver,
Colorado time) on the 31st day of March 1998 (the "Effective Date"), by and
between Duke Energy Field Services, Inc., a Colorado corporation ("Duke Energy")
and TEPPCO Colorado, LLC, a Delaware limited liability company ("TEPPCO"). Each
of TEPPCO and Duke Energy are sometimes referred to individually as a "Party"
and collectively as the "Parties."

         WHEREAS, Duke Energy and TEPPCO entered into that certain Fractionation
Agreement on April 21, 1998, but effective as of the Effective Date (the
"Agreement"); and

         WHEREAS, any capitalized term used but not defined in this Memorandum
shall have the meaning ascribed to such term in the Agreement;

         WHEREAS, the Parties desire to file this Memorandum of record in the
real property records of Weld County, Colorado, to give notice of the existence
of the Agreement and certain provisions contained therein;

         NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

         1. Notice. Notice is hereby given of the existence of the Agreement and
certain provisions contained therein which are summarized in Sections 2 through
5 below.

         2. Certain Defined Terms. Unless the context otherwise requires, the
following terms shall have the respective meanings set forth in this Section 1:

         A.       "Dedicated Gas" shall mean all natural gas that Duke Energy or
                  any of its Affiliates now or hereafter owns or has the
                  contractual right to fractionate the natural gas liquids
                  derived therefrom and which is (i) produced from the Dedicated
                  Lands, (ii) transported through any of the Dedicated Gathering
                  Pipelines, (iii) subject to the Dedicated Producer Contracts
                  or (iv) processed in any of the Dedicated Plants.

         B.       "Dedicated Gathering Pipelines" shall mean all present and
                  future natural gas gathering pipelines which are now or
                  hereafter owned or controlled, in whole or in part, by Duke
                  Energy or any of its Affiliates and located on the Dedicated
                  Lands.

         C.       "Dedicated Lands" shall mean the lands described on the 
                  attached Exhibit A.



<PAGE>   129



         D.       "Dedicated Plants" shall mean all present and future natural
                  gas processing plants which are now or hereafter owned or
                  controlled, in whole or in part, by Duke Energy or any of its
                  Affiliates and located on the Dedicated Lands, including,
                  without limitation, the natural gas processing plants
                  described on the attached Exhibit B.

         E.       "Dedicated Producer Contracts" shall mean all present and
                  future contracts under which Duke Energy or any of its
                  Affiliates has the right to fractionate natural gas liquids
                  derived from natural gas insofar as it is produced from any of
                  the Dedicated Lands, including without limitation, the
                  contracts more particularly described on the attached Exhibit
                  C.

         F.       "Fractionators" shall mean the Greeley Fractionator and the 
                  Spindle Fractionator.

         G.       "Greeley Fractionator" shall mean the fractionation facilities
                  owned by TEPPCO and located within Duke Energy's Greeley
                  Natural Gas Processing Plant located in the SW1/4 of Section
                  25, Township 5 North, Range 66 West, Weld County, Colorado.

         H.       "Spindle Fractionator" shall mean the fractionation facilities
                  owned by TEPPCO and located within Duke Energy's Spindle
                  Natural Gas Processing Plant located in the SW1/4 of Section
                  34, Township 2 North, Range 67 West, Weld County, Colorado.

         3. Term. The Agreement shall be effective as of March 31, 1998 at 11:59
p.m. (Denver, Colorado time), and shall continue in effect for a primary term
ending March 31, 2018 at 11:59 p.m. (Denver, Colorado time), and shall continue
in effect from Year to Year thereafter; provided that either Party shall have
the right to terminate the Agreement effective March 31, 2018 at 11:59 p.m.
(Denver, Colorado time), or any anniversary of such date by giving the other
Party at least six (6) months prior written notice.

         4. Commitment to Process Dedicated Gas and Deliver Raw Product. Subject
to the terms and conditions of the Agreement, Duke Energy shall cause the
Dedicated Gas to be processed and all Raw Product to be delivered to TEPPCO at
the Receipt Points for fractionation under the terms of the Agreement.

         5. Commitment to Fractionate. Subject to the payment of the
Fractionation Fee by Duke Energy to TEPPCO, the other terms and conditions of
the Agreement and the physical capacity and capabilities of the Fractionators,
TEPPCO shall accept delivery of and provide fractionation on a firm basis for
(i) up to a maximum of 378,000 Gallons per Day of Raw Product delivered by Duke
Energy to TEPPCO at the Receipt Point for the Greeley Fractionator and (ii) up
to a maximum of 126,000 Gallons per Day of Raw Product delivered by Duke Energy
to TEPPCO at the Receipt Point for the Spindle Fractionator.



                                       G-2




<PAGE>   130





         6. No Amendment to Agreement. This Memorandum is executed and recorded
solely for the purpose of giving notice and shall not amend nor modify the
Agreement in any way.

         7. Further Information. Further information concerning the Agreement is
available from either (i) Duke Energy Field Services, Inc., 370 Seventeenth
Street, Suite 900, Denver, Colorado 80202 or (ii) TEPPCO Colorado, LLC, 2929
Allen Parkway, Suite 3200, Houston, Texas 77019.

         The Parties hereto have executed this Memorandum to be effective as of
the day first hereinabove written.

                                         DUKE ENERGY:

                                         DUKE ENERGY FIELD SERVICES, INC.


                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                         TEPPCO:

                                         TEPPCO COLORADO, LLC


                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------




                                       G-3




<PAGE>   131



STATE OF TEXAS                              )
                                            )
COUNTY OF HARRIS                            )

         Before me, , a Notary Public in and for the State of Texas, on this
______ day of April, 1998, personally appeared , known to me to be the of Duke
Energy Field Services, Inc., a Colorado corporation, on behalf of said
corporation and acknowledged to me that he executed this Memorandum for the
considerations and purposes therein set forth.

         Given under my hand and seal of office this ______ day of April, 1998.



                                    --------------------------------------------
                                    Notary Public in and for the State of Texas



                                    --------------------------------------------
                                    Printed or Typed Name of Notary



                                    My Commission Expires:


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







                                       G-4




<PAGE>   132



STATE OF TEXAS                              )
                                            )
COUNTY OF HARRIS                            )

         Before me, _______ , a Notary Public in and for the State of Texas, on
this ______ day of April, 1998, personally appeared __________ , known to me 
to be the __________ of TEPPCO Colorado, LLC, a Delaware limited liability 
company, on behalf of said limited liability company and acknowledged to me
that he executed this Memorandum for the considerations and purposes therein
set forth.

         Given under my hand and seal of office this ______ day of April, 1998.




                                    --------------------------------------------
                                    Notary Public in and for the State of Texas



                                    --------------------------------------------
                                    Printed or Typed Name of Notary



                                    My Commission Expires:


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






                                      G-5
<PAGE>   133

                                    EXHIBIT H


    ATTACHED TO AND MADE PART OF THAT CERTAIN FRACTIONATION AGREEMENT DATED
APRIL 21, 1998 BETWEEN TEPPCO COLORADO LLC AND DUKE ENERGY FIELD SERVICES, INC.


Components Used For Calculating Delivered Specification Product at Greeley
Fractionator:

A - Vaporized ethane in mcf delivered through an orifice meter to the Greeley
Gas Plant residue gas stream

B - GPM of ethane and heavier components, as determined by samples obtained from
the vaporized ethane stream delivered during the month

C - Ending Specification Product inventory stored in the tankage at the Greeley
Plant, as determined by a month-end guaging of the tanks

D - Beginning Specification Product inventory stored in the tankage at the
Greeley Plant, as determined by a month-end guaging of the tanks conducted
during the prior month

E - Specification Product sales for the month which have been measured using the
certified scales at the Greeley Plant

F - Specification Product delivered to the Greeley Fractionator from the Spindle
Fractionator, as measured using the certified scales at the Greeley Plant

EXAMPLE OF MONTHLY TOTAL PRODUCTION REPORT TO BE PROVIDED:

                                          Total Fractionator Production:

<TABLE>
<CAPTION>
BEGINNING INVENTORY:                           Y-Grade     C2         C3           IC4       NC4        IC5        NC5   
                                               -------   -------   ----------  ---------  --------- ---------   -------  
<S>                                           <C>         <C>          <C>      <C>         <C>       <C>        <C>     
Greeley Frac                                   176,100                163,800    32,313     65,487    15,890     15,034  
Spindle Frac                                    67,414                 31,000     6,322     12,406     3,822      3,454  
                                                        ---------   ---------   -------  ---------   -------    -------  
                                                                0     194,800    38,635     77,893    19,712     18,488  
PRODUCTION:
Eaton Plant(Tkd In)                                       341,024     427,593    88,979    194,608    47,159     50,563    
Lucerne Plant(Tkd In)                                     324,183     431,577    99,015    207,411    57,944     58,402  
Mewbourne "A"                                             566,798     722,833   184,385    325,072   121,716     99,334  
Mewbourne "B"                                             640,911   1,004,335   186,752    354,781    87,375     74,173  
Spindle Plant                                           1,532,445   1,201,601   215,722    415,605   120,770    107,558  
Greeley                                                   752,173     623,881   159,017    385,978   148,873    129,945  
                                                        ---------   ---------   -------  ---------   -------    -------  
Production Gallons:                                     4,157,534   4,411,820   933,870  1,883,455   583,837    519,975  

OTHER SOURCES:
Stabilizer - Liquids to Ygrade                              7,062      53,080    42,715    122,108    87,139    103,769  
Walsh Lilli Plant                                               0           0         0          0         0          0  
KN Silo                                                     3,102       6,469     1,706      4,387     1,052      1,303  
Bear Paw                                                        0           0         0          0         0          0  
Roggen B/G                                                      0           0         0          0         0          0  
                                                        ---------   ---------   -------  ---------   -------    -------  
TOTAL RECEIPT:                                          4,167,698   4,471,369   978,291  2,009,950   672,028    625,047  

TOTAL DELIVERIES & SALES:
Cogen/CIG/WestGas                                       4,150,992                                                        
Sales - Sold Locally(Greeley)                           2,525,705                          643,417   611,504    589,737  
Sales - Sold Locally(Isopentane)                                                                           0         0   

Exchanges                                                           1,626,790  
Greeley Heat                                                            1,918  
Refrigeration                                                           8,380  
Propane for Trucks                                          27,946             
Conway Sales - Gre/Spindle(Amoco)                           12,105    207,408    18,695     36,683    13,145    12,004   
Roggen Storage                                                   0    123,420         0          0         0         0   
Frontier - (Butane Mix)                                      2,431     15,183   518,699  1,057,753     8,210       883   
Coastal - (Butane Mix)                                       1,633     10,515   350,049    711,000     5,864       644   
Centennial - (Butane Mix)                                       40        108     6,285     12,260       180        25   
Ultramar Diamond Shamrock - (Butane Mix)                       497      3,196   105,638    214,164     1,694       184   
Frontier/Coastal - (Butane Mix)                                  0          0         0          0         0         0   
                                                         4,167,698  4,550,569   999,366  2,031,860   672,510   625,244
                                                         ---------  ---------   -------  ---------   -------   -------  


ENDING INVENTORY:                                                                                                        
Greeley Frac                                               201,900     83,100    14,846     50,554    17,579    16,708   
Spindle Frac                                                56,651     32,500     2,714      5,429     1,651     1,583   
                                                                    ---------   -------  ---------   -------    ------   
                                                                      115,600    17,560     55,983    19,230    18,290   

<CAPTION>

BEGINNING INVENTORY:                                    C6+        Total  
                                                      -------     ------    
<S>                                                   <C>       <C>         
Greeley Frac                                           14,076     306,600   
Spindle Frac                                            2,996      60,000   
                                                      -------  ----------   
                                                       17,072     366,600   
PRODUCTION:                                                                 
Eaton Plant(Tkd In)                                    47,519   1,197,445   
Lucerne Plant(Tkd In)                                  52,727   1,231,259   
Mewbourne "A"                                         100,613   2,120,751   
Mewbourne "B"                                          47,528   2,395,855   
Spindle Plant                                          80,594   3,674,294   
Greeley                                               116,554   2,316,421   
                                                      -------  ----------   
Production Gallons:                                   445,535  12,936,025   
                                                                            
OTHER SOURCES:                                                              
Stabilizer - Liquids to Ygrade                        153,432     569,305   
Walsh Lilli Plant                                           0           0   
KN Silo                                                 1,474      19,493   
Bear Paw                                                    0           0   
Roggen B/G                                                  0           0   
                                                      -------  ----------   
TOTAL RECEIPT:                                        600,441  13,524,823   
                                                                            
TOTAL DELIVERIES & SALES:                                                   
Cogen/CIG/WestGas                                               4,150,992   
Sales - Sold Locally(Greeley)                       4,370,364               
Sales - Sold Locally(Isopentane)                            0           0  

Exchanges                                                       1,626,790  
Greeley Heat                                                        1,918  
Refrigeration                                                       8,380  
Propane for Trucks                                     27,946              
Conway Sales - Gre/Spindle(Amoco)                      10,478     310,518 
Roggen Storage                                              0     123,420 
Frontier - (Butane Mix)                                    33   1,603,192 
Coastal - (Butane Mix)                                     25   1,079,730 
Centennial - (Butane Mix)                                   0      18,898 
Ultramar Diamond Shamrock - (Butane Mix)                    4     325,377 
Frontier/Coastal - (Butane Mix)                             0           0 
                                                      -------  ---------- 
                                                      600,277  13,647,525 
                                                                           
ENDING INVENTORY:                                                          
Greeley Frac                                           16,113     198,899 
Spindle Frac                                            1,123      44,999 
                                                      -------  ---------- 
                                                       17,235     243,898 
</TABLE>


                                      H-2
 

<PAGE>   134


                                    EXHIBIT I

    ATTACHED TO AND MADE PART OF THAT CERTAIN FRACTIONATION AGREEMENT DATED
APRIL 21, 1998 BETWEEN TEPPCO COLORADO LLC AND DUKE ENERGY FIELD SERVICES, INC.

Components Used For Calculating Delivered Specification Product at Spindle
Fractionator:

A - Vaporized ethane in mcf delivered through an orifice meter to the Spindle
Gas Plant residue gas stream

B - GPM of ethane and heavier components, as determined by samples obtained from
the vaporized ethane stream delivered during the month

C - Ending Specification Product inventory stored in the tankage at the Spindle
Plant, as determined by a month-end guaging of the tanks

D - Beginning Specification Product inventory stored in the tankage at the
Spindle Plant, as determined by a month-end guaging of the tanks conducted
during the prior month

E - Specification Product sales for the month which have been measured using the
certified scales at the Spindle Plant

F - Specification Product delivered to the Greeley Fractionator, as measured
using the certified scales at the Greeley Plant

G - Specification Product delivered to the Amoco Products Pipeline for the
month, as measured by Amoco Products Pipeline

MONTHLY DETAIL TO BE PROVIDED:

Spindle allocated gallons to producers:

<TABLE>
<CAPTION>
                                                C2          C3         IC4       NC4        IC5        NC5        C6+        Total
                                               ------     -------   -------    -------    -------    -------    ------      --------
<S>                                            <C>        <C>       <C>        <C>        <C>        <C>        <C>         <C>    
Propane trucked out to customers               15,655     936,400     4,735      5,895      1,353      1,353       966      966,357
BG trucked to North Fractionator                3,417      39,519   208,630    405,854    118,320    105,225    78,854      959,819
Product sent down APL                           2,788     166,779       843      1,050        241        241       172      172,115
B/G sent down APL                                 921      29,868     4,951      9,597      2,846      2,504     1,926       52,613
Plant Refrigeration                               136       8,120        41         51         12         12         8        8,380
Vehicle Usage                                     180      10,789        55         68         16         16        11       11,134

Storage @ Spindle Plant
C3 Beginning                    31,000
     Ending                     32,500
                                ------
                                 1,500             24       1,454         7          9          2          2         2        1,500

BG Beginning                    29,000
      Ending                    12,500
                                ------
                               (16,500)           (59)       (679)   (3,587)    (6,977)    (2,034)    (1,809)   (1,356)     (16,501)
Storage @ Amoco Unloading
C3 Beginning                    16,802
     Ending                     26,451
                                ------
                                 9,649            156       9,350        47         59         14         14        10        9,649
                                            ---------   ---------   -------    -------    -------    -------    ------    ---------
                                               23,218   1,201,601   215,722    415,605    120,770    107,558    80,594    2,165,066
                  STABILIZER                        0           0         0          0          0          0
                  ETHANE                    1,509,227                                                                     1,509,227
                                            ---------   ---------   -------    -------    -------    -------    ------    ---------
    Total Spindle Production                1,532,445   1,201,601   215,722    415,605    120,770    107,558    80,594    3,674,293
 (included on Total schedule @ Greeley)

</TABLE>




<PAGE>   135

                                                                       EXHIBIT B
================================================================================

                                 LEASE AGREEMENT


                                     BETWEEN



                        DUKE ENERGY FIELD SERVICES, INC.,
                                    AS LESSOR


                                       AND


                              TEPPCO COLORADO, LLC,
                                    AS LESSEE




                                 MARCH 31, 1998

================================================================================

<PAGE>   136



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>            <C>                                                                                        <C>
ARTICLE I      DEFINITIONS AND CONSTRUCTION..............................................................  1
  1.1          Certain Defined Terms.....................................................................  1
               "Day" ....................................................................................  1
               "Frac Agreement" .........................................................................  1
               "Fractionation Plant" ....................................................................  1
               "Governmental Authority" .................................................................  1
               "O&M Agreement" ..........................................................................  2
               "Permitted Encumbrances" .................................................................  2
               "Premises" ...............................................................................  2
               "Project Agreements" .....................................................................  2
               "Purchase Agreement" .....................................................................  2
               "Rent" ...................................................................................  2
               "Sublease" ...............................................................................  2
               "Year" ...................................................................................  2
  1.2          References................................................................................  2
  1.3          Headings..................................................................................  2

ARTICLE II     DEMISE OF PREMISES AND TERM...............................................................  2
  2.1          Demise of Premises and Term...............................................................  2

ARTICLE III    RENT......................................................................................  3
  3.1          Rent......................................................................................  3
  3.2          Place of Payment..........................................................................  3

ARTICLE IV     CONDUCT OF BUSINESS.......................................................................  3
  4.1          Use of Premises...........................................................................  3
  4.2          Surrender of Premises.....................................................................  3

ARTICLE V      TAXES, ASSESSMENTS........................................................................  3
  5.1          Duke Energy's Obligation to Pay...........................................................  3
  5.2          Manner of Payment.........................................................................  4

ARTICLE VI     REPRESENTATIONS AND WARRANTIES............................................................  4
  6.1          Representations and Warranties of Duke Energy.............................................  4

ARTICLE VII    EMINENT DOMAIN............................................................................  4
  7.1          Total Condemnation of Premises............................................................  4
  7.2          Partial Condemnation......................................................................  4
  7.3          Damages...................................................................................  5

ARTICLE VIII   GENERAL PROVISIONS........................................................................  5
  8.1          Estoppel Certificates.....................................................................  5
  8.2          Warranty of Peaceful Possession...........................................................  5
</TABLE>

<PAGE>   137

<TABLE>
<S>            <C>                                                                                        <C>
  8.3          Recording.................................................................................  5
  8.4          Notice.  .................................................................................  6
  8.5          Waiver....................................................................................  7
  8.6          Entire Agreement..........................................................................  7
  8.7          Successors and Assigns....................................................................  7
  8.8          Conflicts.................................................................................  7
  8.9          Laws and Regulations......................................................................  7
  8.10         Severability..............................................................................  7
  8.11         Time of Essence...........................................................................  8
  8.12         Captions..................................................................................  8
  8.13         Schedules and Exhibits....................................................................  8
  8.14         No Partnership............................................................................  8
  8.15         No Third Party Beneficiaries..............................................................  8
  8.16         Mutual Cooperation; Further Assurances....................................................  8
  8.17         Survival..................................................................................  8
  8.18         Other Project Agreements..................................................................  8
</TABLE>



                                      -ii-
<PAGE>   138

                                 LEASE AGREEMENT


         THIS LEASE AGREEMENT (this "Lease") is made and entered into this 21st
day of April, 1998, but effective 11:59 p.m. (Denver, Colorado time) on the 31st
day of March, 1998, between Duke Energy Field Services, Inc., a Colorado
corporation (herein called "Duke Energy") and TEPPCO Colorado LLC, a Delaware
limited liability company (herein called "TEPPCO"). Each of TEPPCO and Duke
Energy are sometimes referred to individually as a "Party" and collectively as
the "Parties."


                              W I T N E S S E T H:


         WHEREAS, Duke Energy owns the Premises (hereinafter defined); and

         WHEREAS, Duke Energy desires to lease the Premises to TEPPCO, and
TEPPCO desires to lease the Premises from Duke Energy upon the terms and
conditions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and of the mutual agreements hereinafter set forth, Duke Energy
and TEPPCO covenant and agree as follows:

                                    ARTICLE I
                          DEFINITIONS AND CONSTRUCTION

         1.1      Certain Defined Terms. Unless the context otherwise requires,
the following terms shall have the respective meanings set forth in this
Section 1.1:

                  "Day" shall mean a period of time commencing at 8:00 a.m.
(Denver, Colorado time) on a calendar day and ending at 8:00 a.m. (Denver,
Colorado time) on the next succeeding calendar day.

                  "Frac Agreement" means that certain Fractionation Agreement
dated of even date herewith by and between Duke Energy and TEPPCO.

                  "Fractionation Plant" means TEPPCO's fractionation plant
located on the Premises.

                  "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.

                  "O&M Agreement" means that certain Operation and Maintenance
Agreement dated of even date herewith by and between Duke Energy and TEPPCO.

<PAGE>   139

                  "Permitted Encumbrances" shall have the meaning ascribed to
such term in Section 6.1.

                  "Premises" means that certain tract or parcel of land located
in Weld County, Colorado, more particularly described on Exhibit A attached
hereto and made a part hereof for all purposes.

                  "Project Agreements" shall mean collectively, this Lease, the
O&M Agreement, the Frac Agreement and the Sublease.

                  "Purchase Agreement" shall mean that certain Asset Purchase
Agreement dated March 31, 1998, by and between Duke Energy, as "Seller," and
TEPPCO, as "Buyer".

                  "Rent" shall have the meaning ascribed to such term in
Section 3.1.

                  "Sublease" means that certain Sublease Agreement dated of even
date herewith by and between Duke Energy and TEPPCO.

                  "Year" shall mean a period of 365 consecutive Days; provided,
however that any year which contains the date of February 29 shall consist of
366 consecutive Days.

         1.2      References. As used in this Lease, 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 Lease as a whole and not to any particular Article, provision, section or
paragraph of this Lease and (b) "or" mean "either or both". Unless otherwise
specified, all references in this Lease to Sections, paragraphs, Exhibits or
Schedules are deemed references to the corresponding Sections, paragraphs,
Exhibits or Schedules in this Lease.

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

                                   ARTICLE II
                           DEMISE OF PREMISES AND TERM

         2.1      Demise of Premises and Term. In consideration of the rents,
covenants, and agreements set forth herein and subject to the terms and
conditions hereof, Duke Energy hereby leases to TEPPCO and TEPPCO hereby leases
from Duke Energy, the Premises for a term commencing on March 31, 1998 at 11:59
p.m. (Denver, Colorado time) and, unless terminated in accordance with Article
II of the Frac Agreement, continue in effect for a primary term ending March 31,
2018 at 11:59 p.m. (Denver, Colorado time), and shall continue in effect from
Year to Year thereafter; provided that either Party shall have the right to
terminate this Lease effective March 31, 2018 at 11:59 p.m. or any anniversary
of such date by giving the other Party at least six (6) months prior written
notice.



                                       -2-
<PAGE>   140

                                   ARTICLE III
                                      RENT

         3.1      Rent. As rental for the Premises during the term of this
Lease, TEPPCO agrees to pay to Duke Energy for each month of the term of this
Lease One Thousand and 00/100 ($1,000.00) (the "Rent") on or before the first
(1st) day of each month of the term of this Lease. Rent shall be prorated for
any partial month during the term of this Lease.

         3.2      Place of Payment. All Rent shall be payable in lawful money of
the United States of America, at Duke Energy's address set forth in Section 8.4
herein.

                                   ARTICLE IV
                               CONDUCT OF BUSINESS

         4.1      Use of Premises. TEPPCO shall have the right to use the
Premises for the purpose of fractionating natural gas liquids.

         4.2      Surrender of Premises. TEPPCO shall at the expiration of the
term of this Lease, or at any earlier termination of this Lease, surrender the
Premises to Duke Energy in as good condition as it received the same; provided,
however, TEPPCO shall deliver written notice to Duke Energy prior to termination
of the Lease if TEPPCO will remove the Fractionation Plant and any other
alterations, additions, improvements or other changes to the Premises made by
TEPPCO during the term of this Lease; provided that TEPPCO shall have the right
to, and must remove, the Fractionation Plant, if at all, within one (1) year
after termination of this Lease, but no earlier than one (1) year after delivery
of written notice as provided above. If TEPPCO fails to deliver notice as
provided in the preceding sentence, TEPPCO shall surrender the Fractionation
Plant and any such alterations, additions, improvements or other changes to Duke
Energy upon termination of this Lease.

                                    ARTICLE V
                               TAXES, ASSESSMENTS

         5.1      Duke Energy's Obligation to Pay. Duke Energy shall pay during
the term of this Lease, all federal, state and local real and personal property
ad valorem taxes, assessments, and other governmental charges, general and
special, ordinary and extraordinary, including but not limited to assessments
for public improvements or benefits assessed against the Premises, or
improvements situated thereon, including, without limitation, the Fractionation
Plant, that are payable to any lawful authority assessed against or with respect
to the Premises or the use or operation thereof, including, but not limited to,
any federal, state or local income, gross receipts, withholding, franchise,
excise, sales, use, value added, recording, transfer or stamp tax, levy, duty,
charge or withholding of any kind imposed or assessed by any federal, state or
local government, agency or authority, together with any addition to tax,
penalty, fine or interest thereon, other than state or U.S. federal income tax
imposed upon the taxable income of TEPPCO and any franchise taxes imposed upon
TEPPCO (such taxes and assessments being hereinafter called "Taxes"). In the
event Duke Energy fails to pay such Taxes prior to the time the same become
delinquent, TEPPCO may pay the same and (provided



                                       -3-
<PAGE>   141

TEPPCO shall have delivered to Duke Energy evidence of such payment) deduct the
amount of such payment from the Rent owed hereunder.


         5.2      Manner of Payment. Duke Energy shall pay all Taxes directly 
to the applicable taxing authority prior to delinquency and shall promptly
thereafter provide TEPPCO with evidence of such payment. The certificate issued
or given by the appropriate officials authorized or designated by law to issue
or give the same or to receive payment of such Taxes shall be prima facie
evidence of the existence, payment, nonpayment and amount of such Taxes. Duke
Energy, if Duke Energy shall so desire, may contest the validity or amount of
any such Taxes, at Duke Energy's sole cost and expense, by appropriate
proceedings, diligently conducted in good faith. Duke Energy may defer payment
of such Taxes during the pendency of such contest, provided that nothing herein
contained shall be construed to allow such Taxes to remain unpaid for such
length of time as shall permit the Premises, or any part thereof, to be sold by
any Governmental Authority or a lien with respect thereto foreclosed for the
nonpayment of the same.

                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

         6.1      Representations and Warranties of Duke Energy. Duke Energy
represents and warrants to TEPPCO that Duke Energy has good and marketable title
to the Premises subject only to: (a) liens for current taxes and assessments not
yet due or which Duke Energy is contesting in good faith, (b) inchoate mechanic
and materialmen liens for construction in progress, (c) inchoate workmen,
repairmen, warehousemen, customer, employee and carriers liens arising in the
ordinary course of business and (d) liens created by TEPPCO (collectively, the
"Permitted Encumbrances").

                                   ARTICLE VII
                                 EMINENT DOMAIN

         7.1      Total Condemnation of Premises. If the whole of the Premises
are acquired or condemned by eminent domain for any public or quasi-public use
or purpose, then this Lease shall terminate as of the date title vests in any
public agency. All rentals and other charges owing hereunder shall be prorated
as of such date.

         7.2      Partial Condemnation. If any part of the Premises is acquired
or condemned as set forth in Section 5.1, and if in TEPPCO's reasonable opinion
such partial taking or condemnation renders the Premises unsuitable for the
business of TEPPCO, then this Lease shall terminate at TEPPCO's election as of
the date title vests in any public agency, provided TEPPCO delivers to Duke
Energy written notice of such election to terminate within thirty (30) days
following the date title vests in such public agency. In the event of such
termination, all rentals and other charges owing hereunder shall be prorated as
of such effective date of termination.

         7.3      Damages. Duke Energy shall be entitled to any award and all 
damages payable as a result of any condemnation or taking of the fee of the
Premises. TEPPCO shall have the right to claim and recover from the condemning
authority, but not from Duke Energy, such compensation



                                       -4-
<PAGE>   142

as may be separately awarded or recoverable by TEPPCO in TEPPCO's own right on
account of any and all damage to the Fractionation Plant and/or TEPPCO's
business by reason of the condemnation, including loss of value of any unexpired
portion of the term of the Lease, and for or on account of any cost or loss to
which TEPPCO might be put in removing TEPPCO's personal property, fixtures,
leasehold improvements and equipment, including, without limitation, the
Fractionation Plant, from the Premises.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

         8.1      Estoppel Certificates. TEPPCO and Duke Energy shall, at any
time and from time to time upon not less than ten (10) days prior written
request from the other Party, execute, acknowledge and deliver to the other a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which Rent and other charges are paid, and (ii) acknowledging that there
are not, to the executing Party's knowledge, any uncured defaults on the part of
the other Party hereunder (or specifying such defaults, if any are claimed). Any
such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises or the leasehold.

         Duke Energy's or TEPPCO's failure to deliver such statement within such
ten (10) day period shall be conclusive upon that Party (i) that this Lease is
in full force and effect without modification, except as may be represented by
the other Party, and (ii) that there are not uncured defaults in performance by
the other Party.

         Nothing in this Section 8.1 shall be construed to waive the conditions
elsewhere contained in this Lease applicable to assignment or subletting of the
Premises by TEPPCO.

         8.2      Warranty of Peaceful Possession. Duke Energy covenants and
warrants that TEPPCO, upon paying the Rent reserved hereunder and observing and
performing all of the covenants, conditions and provisions on TEPPCO's part to
be observed and performed hereunder, may peaceably and quietly have, hold,
occupy, use and enjoy, and shall have the full, exclusive and unrestricted use
and enjoyment of, all the Premises during the term of the Lease for the purposes
permitted herein, and Duke Energy agrees to warrant and forever defend title to
the Premises against the claims of any and all persons whomsoever lawfully
claiming or to claim the same or any part thereof, subject only to the Permitted
Encumbrances and the provisions of this Lease.

         8.3      Recording. Duke Energy and TEPPCO shall execute, acknowledge,
deliver and record a "short form" memorandum of this Lease in the form of
Exhibit B attached hereto and made a part hereof for all purposes. Promptly upon
request by Duke Energy at any time following the expiration or earlier
termination of this Lease, however such termination may be brought about, TEPPCO
shall execute and deliver to Duke Energy an instrument, in recordable form,
evidencing the termination of this Lease and the release by TEPPCO of all of
TEPPCO's right, title and interest in and to the Premises existing under and by
virtue of this Lease.



                                       -5-
<PAGE>   143

         8.4      Notice. All notices, requests, demands and other
communications required or permitted to be given under this Lease 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 Duke Energy:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention:  President
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-2613

                      and copy to:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention: General Counsel
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-8913

                      If to TEPPCO:

                           TEPPCO Colorado, LLC
                           2929 Allen Parkway, Suite 3200
                           Houston, Texas  77019
                           Attention:  President
                           Telephone:  (713) 759-3636
                           Facsimile:  (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:  (713) 759-3645

         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 8.4. Notice by mail shall be deemed to have been given and received on
the third calendar day after posting. Notice by overnight delivery



                                       -6-
<PAGE>   144

service, facsimile transmission or personal delivery shall be deemed given on
the date of actual delivery.

         8.5      Waiver. No course of dealing and no delay on the part of
either Party in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such Party's rights, powers or remedies. No term
or condition of this Lease shall be deemed to have been waived nor shall there
be any estoppel to enforce any provision of this Lease except by written
instrument of the Parties charged with such waiver or estoppel. The waiver of
any breach of any term, condition or provision of this Lease shall not be
construed as a waiver of any prior, concurrent or subsequent breach of the same
or any other term, condition or provision hereof.

         8.6      Entire Agreement. The Project Agreements and any related
documents between the Parties of even date herewith, including exhibits and
schedules attached thereto, constitute the final and entire agreement between
the Parties concerning the subject matter thereof, and supersedes all prior and
contemporaneous agreements and undertakings of the Parties in connection
therewith. The Project Agreements may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the Parties. There are no oral
agreements between the Parties.

         8.7      Successors and Assigns. Assignment provisions pertaining to
this Lease are set forth in the O&M Agreement.

         8.8      Conflicts. In the event of any conflict between the provisions
of this Lease and any exhibits or schedules attached hereto, the provisions of
this Lease shall prevail.

         8.9      Laws and Regulations. This Lease and the performance hereof
shall be subject to all valid and applicable federal and state laws and to the
valid and applicable orders, laws, rules, and regulations of any state or
federal authority having jurisdiction, but nothing contained herein shall be
construed as a waiver of any right to question or contest any such order, law,
rule, or regulation in any forum having jurisdiction.

         8.10     Severability. The invalidity or unenforceability of any
provision of this Lease shall in no way affect the validity or enforceability of
any other provision hereof.

         8.11     Time of Essence. Time is of the essence in the performance of
all obligations falling due hereunder.

         8.12     Captions. The headings to Articles, Sections and other
subdivisions of this Lease are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Lease.

         8.13     Schedules and Exhibits. All schedules and exhibits hereto
which are referred to herein are hereby made a part hereof and incorporated
herein by such reference.

         8.14     No Partnership. The relationship between Duke Energy and
TEPPCO at all times shall not be deemed a partnership or joint venture.



                                      -7-
<PAGE>   145

         8.15     No Third Party Beneficiaries. Subject to the provisions of
Section 8.7 hereof, this Lease inures to the sole and exclusive benefit of Duke
Energy and TEPPCO, their respective successors, legal representatives and
assigns, and confers no benefit on any third party.

         8.16     Mutual Cooperation; Further Assurances. Upon request by either
Party from time to time during the term of this Lease, each Party agrees to
execute and deliver all such other and additional instruments, notices and other
documents and do all such other acts and things as may be necessary to carry out
the purposes of this Lease and to more fully assure the Parties' rights and
interests provided for hereunder. Duke Energy and TEPPCO each agree to cooperate
with the other on all matters relating to required permits and regulatory
compliance by either Duke Energy or TEPPCO in respect of the Premises.

         8.17     Survival. Survival provisions pertaining to this Lease are set
forth in the O&M Agreement.

         8.18     Other Project Agreements. In the event of any conflict between
the provisions of any of the Project Agreements with each other or with the
Purchase Agreement, the provisions of the O&M Agreement shall control over the
inconsistent provisions of any of the other Project Documents or the Purchase
Agreement.

         8.19     Amendments; Changes; Modifications. This Lease may not be
effectively amended, changed, modified, altered or terminated, except as
provided herein, without the written consent of the Parties and such consent
shall be effective only in the specific instance and for the specific purpose
for which it is given.

         The parties hereto have executed this Lease to be effective as of the
day first hereinabove written.

                                             Duke Energy:

                                             DUKE ENERGY FIELD SERVICES, INC.


                                             By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------



                                      -8-
<PAGE>   146

                                             TEPPCO:

                                             TEPPCO COLORADO, LLC


                                             By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------



                                      -9-
<PAGE>   147

                                    EXHIBIT A

                                    PREMISES


A portion of the Southwest Quarter (SW1/4) of Section 25 (Sec. 25), Township
Five North (T5N), Range Sixty Six (R66W) West of the Sixth Principal Meridian
(6th P.M.), County of Weld, State of Colorado, more particularly described as
follows:

Commencing at the Southwest corner (SW Crn) of said Section 25 and assuming the
West line of said section as bearing North 00(degrees)00'00" East with all
other bearings contained herein relative thereto;
Thence North 00(degrees)00'00" East a distance of 348.27 feet;
Thence North 90(degrees)00'00" East a distance of 957.61 feet to the True Point
of Beginning;

Thence North 00(degrees)43'56" East a distance of 55.11 feet;
Thence South 88(degrees)55'04" East a distance of 129.52 feet;
Thence South 00(degrees)26'43" West a distance of 53.09 feet;
Thence North 89(degrees)48'39" West a distance of 129.79 feet back to the True
Point of Beginning;

Containing 7,015 square feet (0.161 acres), more or less.


[SEAL]


/s/ KENNETH A. PERRY                         4-6-98
-------------------------------------------------------
Kenneth A. Perry, P.L.S. 25961
For and on behalf of Henkels & McCoy, Inc.


A portion of the Southwest Quarter (SW1/4) of Section 25 (Sec. 25), Township
Five North (T5N), Range Sixty Six (R66W) West of the Sixth Principal Meridian
(6th P.M.), County of Weld, State of Colorado, more particularly described as
follows:

Commencing at the Southwest corner (SW Crn) of said Section 25 and assuming the
West line of said section as bearing North 00(degrees)00'00" East with all
other bearings contained herein relative thereto;
Thence North 00(degrees)00'00" East a distance of 272.25 feet;
Thence North 90(degrees)00'00" East a distance of 986.44 feet to the True Point
of Beginning;

Thence North 00(degrees)51'22" East a distance of 60.45 feet;
Thence South 89(degrees)45'12" East a distance of 117.12 feet;
Thence South 00(degrees)31'05" West a distance of 61.40 feet;
Thence North 89(degrees)17'15" West a distance of 117.47 feet back to the True
Point of Beginning;

Containing 7,146 square feet (0.164 acres), more or less.


[SEAL]


/s/ KENNETH A. PERRY                         4-6-98
-------------------------------------------------------
Kenneth A. Perry, P.L.S. 25961               Date
For and on behalf of Henkels & McCoy, Inc.
<PAGE>   148

                                    EXHIBIT B


                          MEMORANDUM OF LEASE AGREEMENT


         THIS MEMORANDUM OF LEASE AGREEMENT (this "Memorandum") is made and
entered into this 21st day of April, 1998, but effective 11:59 p.m. (Denver,
Colorado time) on the 31st day of March 1998 (the "Effective Date"), by and
between Duke Energy Field Services, Inc., a Colorado corporation ("Duke Energy")
and TEPPCO Colorado, LLC, a Delaware limited liability company ("TEPPCO"). Each
of TEPPCO and Duke Energy are sometimes referred to individually as a "Party"
and collectively as the "Parties."

         WHEREAS, Duke Energy and TEPPCO entered into that certain Lease
Agreement on April 21, 1998, but effective as of the Effective Date (the
"Agreement"); and

         WHEREAS, any capitalized term used but not defined in this Memorandum
shall have the meaning ascribed to such term in the Agreement;

         WHEREAS, the Parties desire to file this Memorandum of record in the
real property records of Weld County, Colorado, to give notice of the existence
of the Agreement and certain provisions contained therein;

         NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

         1.       Notice. Notice is hereby given of the existence of the
Agreement and certain provisions contained therein which are summarized in
Section 2 below.

         2.       Demise of Premises and Term. In consideration of the rents,
covenants, and agreements set forth in the Agreement and subject to the terms
and conditions of the Agreement, Duke Energy has leased to TEPPCO and TEPPCO has
leased from Duke Energy, that certain tract or parcel of land located in Weld
County, Colorado, more particularly described on Exhibit A attached hereto and
made a part hereof for all purposes for a term commencing on March 31, 1998 at
11:59 p.m. (Denver, Colorado time) and, unless terminated in accordance with the
terms and conditions of the Agreement, shall continue in effect for a primary
term ending March 31, 2018 at 11:59 p.m. (Denver, Colorado time), and shall
continue in effect from Year to Year thereafter; provided that either Party has
the right to terminate the Agreement effective March 31, 2018 at 11:59 p.m. or
any anniversary of such date by giving the other Party at least six (6) months
prior written notice.

         3.       No Amendment to Agreement. This Memorandum is executed and
recorded solely for the purpose of giving notice and shall not amend nor modify
the Agreement in any way.

<PAGE>   149

         4.       Further Information. Further information concerning the
Agreement is available from either (i) Duke Energy Field Services, Inc., 370
Seventeenth Street, Suite 900, Denver, Colorado 80202 or (ii) TEPPCO Colorado,
LLC, 2929 Allen Parkway, Suite 3200, Houston, Texas 77019.

         The Parties hereto have executed this Memorandum to be effective as of
the day first hereinabove written.

                                             DUKE ENERGY:

                                             DUKE ENERGY FIELD SERVICES, INC.


                                             By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------


                                             TEPPCO:

                                             TEPPCO COLORADO, LLC


                                             By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------



                                       B-2

<PAGE>   150

STATE OF TEXAS         )
                       )
COUNTY OF HARRIS       )

         Before me, ____________, a Notary Public in and for the State of Texas,
on this ______ day of April, 1998, personally appeared ___________, known to me
to be the ____________ of Duke Energy Field Services, Inc., a Colorado
corporation, on behalf of said corporation and acknowledged to me that he
executed this Memorandum for the considerations and purposes therein set forth.

         Given under my hand and seal of office this ______ day of April, 1998.


                                   ---------------------------------------------
                                   Notary Public in and for the State of Texas


                                   ---------------------------------------------
                                   Printed or Typed Name of Notary
 
                                   My Commission Expires:

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

STATE OF TEXAS         )
                       )
COUNTY OF HARRIS       )

         Before me, ____________, a Notary Public in and for the State of Texas,
on this ______ day of April, 1998, personally appeared ____________, known to me
to be the ____________ of TEPPCO Colorado, LLC, a Delaware limited liability
company, on behalf of said limited liability company and acknowledged to me that
he executed this Memorandum for the considerations and purposes therein set
forth.

         Given under my hand and seal of office this ______ day of April, 1998.



                                   ---------------------------------------------
                                   Notary Public in and for the State of Texas


                                   ---------------------------------------------
                                   Printed or Typed Name of Notary

                                   My Commission Expires:

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

                                       B-3
<PAGE>   151

                                                                       EXHIBIT C
================================================================================

                       OPERATION AND MAINTENANCE AGREEMENT



                                 BY AND BETWEEN



                        DUKE ENERGY FIELD SERVICES, INC.




                                       AND




                              TEPPCO COLORADO, LLC





                                 MARCH 31, 1998

================================================================================

<PAGE>   152



                                TABLE OF CONTENTS

<TABLE>
<S>       <C>                                                                                   <C>
ARTICLE 1 DEFINITIONS..........................................................................  2
  1.1     Definitions .........................................................................  2
  1.2     References...........................................................................  6
  1.3     Headings.............................................................................  6

ARTICLE 2 SERVICES AND RELATIONSHIP............................................................  6
  2.1     Services.............................................................................  6
  2.2     Other Agreements.....................................................................  6
  2.3     Independent Contractor...............................................................  7
  2.4     TEPPCO's Access......................................................................  7
  2.5     Obligation to Provide Associated Services and Facilities.............................  7

ARTICLE 3 EMPLOYEES, CONSULTANTS, AND SUBCONTRACTORS...........................................  7
  3.1     Employees, Consultants, and Subcontractors...........................................  7
  3.2     Affiliates...........................................................................  8
  3.3     Standards for Performance of Duke Energy, its Employees, and
          Contractors..........................................................................  8

ARTICLE 4 OPERATION AND MAINTENANCE COSTS......................................................  8
  4.1     Operating and Other Costs............................................................  8
  4.2     O&M Fee..............................................................................  8
  4.3     Insurable Loss to the Fractionators..................................................  8
  4.4     Capital Expenditures.................................................................  9
  4.5     Insurance............................................................................  9

ARTICLE 5 INDEMNIFICATION......................................................................  9
  5.1     Indemnification by Duke Energy.......................................................  9
  5.2     Indemnification by TEPPCO............................................................ 10

ARTICLE 6 TERM AND TERMINATION................................................................. 11
  6.1     Term................................................................................. 11
  6.2     Termination.......................................................................... 11

ARTICLE 7 BILLING AND PAYMENT.................................................................. 11
  7.1     Statements and Billings.............................................................. 11
  7.2     Audit Rights......................................................................... 11

ARTICLE 8 SURVIVAL OF OBLIGATIONS.............................................................. 12

ARTICLE 9 WARRANTY............................................................................. 12
  9.1     Warranty............................................................................. 12
  9.2     Consequence of Breach................................................................ 12
  9.3     Vendor Warranties.................................................................... 13
</TABLE>



<PAGE>   153

<TABLE>
<S>       <C>                                                                                   <C>
ARTICLE 10         DISPUTES.................................................................... 13
  10.1    Dispute Resolution; Arbitration...................................................... 13
  10.2    ..................................................................................... 13
  10.3    ..................................................................................... 13
  10.4    Recovery of Costs and Attorneys' Fees................................................ 15
  10.5    Choice of Forum...................................................................... 15
  10.6    Jury Waivers......................................................................... 15
  10.7    Limitation of Damages................................................................ 16
  10.8    Governing Law........................................................................ 16

ARTICLE 11         MISCELLANEOUS............................................................... 16
  11.1    Notices.............................................................................. 16
  11.2    Waiver............................................................................... 17
  11.3    Amendments; Changes; Modifications................................................... 17
  11.4    Successors and Assigns............................................................... 17
  11.5    Conflicts............................................................................ 17
  11.6    Entire Agreement..................................................................... 18
  11.7    Laws and Regulations................................................................. 18
  11.8    Severability......................................................................... 18
  11.9    Time of Essence...................................................................... 18
  11.10   Captions............................................................................. 18
  11.11   Schedules and Exhibits............................................................... 18
  11.12   No Partnership....................................................................... 18
  11.13   No Third Party Beneficiaries......................................................... 18
  11.14   Mutual Cooperation; Further Assurances............................................... 18
  11.15   Other Project Agreements............................................................. 19
</TABLE>


                                      -ii-
<PAGE>   154

                       OPERATION AND MAINTENANCE AGREEMENT


         THIS OPERATION AND MAINTENANCE AGREEMENT (the "O&M Agreement") is made
and entered into this 21st day of April, 1998, but effective as of the 31st day
of March, 1998, by and between Duke Energy Field Services, Inc. ("Duke Energy"),
a Colorado corporation and TEPPCO Colorado, LLC, a Delaware limited liability
company ("TEPPCO"). Each of TEPPCO and Duke Energy are sometimes referred to
individually as a "Party" and collectively as the "Parties."


                                    RECITALS

A.       Duke Energy owns and operates the Greeley Natural Gas Processing Plant
         located in the SW1/4 of Section 25, T5N, R66W (the "Greeley Plant") and
         the Spindle Natural Gas Processing Plant located in the SW1/4 of
         Section 34, T2N, R67W (the "Spindle Plant"), both of which are located
         in Weld County, Colorado.

B.       Pursuant to an Asset Purchase Agreement dated March 31, 1998 (the
         "Purchase Agreement"), between the Parties, TEPPCO has acquired from
         Duke Energy a fractionation facility located at the Greeley Plant and a
         fractionation facility located at the Spindle Plant (collectively, the
         "Fractionators").

C.       As contemplated in the Purchase Agreement, the Parties have entered
         into (i) a Fractionation Agreement of even date herewith (the "Frac
         Agreement") whereby TEPPCO will fractionate natural gas liquids for
         Duke Energy for the consideration expressed therein, (ii) a Lease
         Agreement of even date herewith (the "Lease Agreement") whereby TEPPCO
         will lease certain real property on which the Fractionator at the
         Greeley Plant site is located, and (iii) a Sublease Agreement of even
         date herewith (the "Sublease Agreement") whereby TEPPCO will lease
         certain real property on which the Fractionator at the Spindle Plant
         site is located.

D.       Prior to the execution of the Project Agreements Duke Energy owned and
         operated and currently operates the Fractionators, and represents that
         it is qualified and capable to continue to operate and maintain the
         Fractionators.

E.       The Parties desire for Duke Energy to operate and maintain the
         Fractionators in accordance with this O&M Agreement.

         FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

<PAGE>   155

                                    ARTICLE 1
                                   DEFINITIONS

1.1      Except as otherwise defined herein, capitalized terms used in this O&M
         Agreement shall have the same meanings as in the Frac Agreement. In
         addition, the following words and terms shall have the meanings set
         forth herein:

                  "Affiliate" shall mean, when used with respect to a specified
         Person, any other Person directly controlled by or under the specified
         Person. 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 whether through the ownership of
         voting securities or by contract; and the term "controlled" have the
         meanings correlative to the foregoing. Notwithstanding the foregoing,
         the term "Affiliate" when applied to Duke Energy shall not include Duke
         Energy Trading & Marketing, L.L.C. ("DETM"), TEPPCO, Texas Eastern
         Products Pipeline Company, a Delaware corporation ("Texas Eastern"),
         TEPPCO Partners L.P., a Delaware limited partnership (the
         "Partnership") or any entities owned, directly or indirectly by the
         Partnership (collectively with Texas Eastern and the Partnership but
         excluding DETM, the "TEPPCO Entities"); and as applied to TEPPCO, shall
         not include Duke Energy, Duke Energy Corporation, a Delaware
         corporation, or any entities owned, directly or indirectly by Duke
         Energy Corporation other than the TEPPCO Entities.

                  "Associated Equipment and Services" shall have the meaning
         given such term in Section 2.5.

                  "CERCLA" shall mean the Comprehensive Environmental Response,
         Compensation and Liability Act, as amended, 42 U.S.C. ss. 9601 et seq.

                  "Claims" shall have the meaning given such term in Section
         5.1.

                  "Disputed Claims" shall have the meaning given such term in
         Section 10.1.

                  "Duke Energy Indemnified Parties" shall have the meaning given
         such term in Section 5.2.

                  "Emergencies" shall mean the occurrence, condition, or
         reasonable anticipation of an occurrence or condition, which might (1)
         threaten life, property, or the environment, (2) render a Fractionator
         incapable of



                                      -2-
<PAGE>   156

         normal operation, or (3) be required in order to comply with law or an
         order of a Governmental Authority with jurisdiction over a
         Fractionator.

                  "Employees" shall mean those persons who are hired as
         employees to perform Duke Energy's Services under this O&M Agreement on
         either a full-time or part-time basis, whether or not any such person
         is hired directly by Duke Energy or made available by an Affiliate of
         Duke Energy on either a full-time or part-time basis.

                  "Environmental Laws" shall mean all federal, state, or
         municipal laws, rules, regulations, statutes, ordinances, or orders of
         any Governmental Authority relating to (a) the control of any potential
         pollutant or protection of the air, water, or land, (b) solid, gaseous
         or liquid waste generation, handling, treatment, storage, disposal or
         transportation and (c) exposure to hazardous, toxic or other substances
         alleged to be harmful. "Environmental Laws" shall include, but not be
         limited to, the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Clean
         Water Act, 33 U.S.C. ss. 1251 et seq., RCRA, the Superfund Amendments
         and Reauthorization Act, 42 U.S.C. ss. 11001, et seq., the Toxic
         Substances Control Act, 15 U.S.C. ss. 2601 et seq., the Water Pollution
         Control Act, 33 U.S.C. ss. 1251 et seq., the Safe Drinking Water Act,
         42 U.S.C. ss. 300f et seq. and CERCLA. The term "Environmental Laws"
         shall also include all state, local and municipal laws, rules,
         regulations, statutes, ordinances and orders dealing with the same
         subject matter or promulgated by any governmental or quasi-governmental
         agency thereunder or to carry out the purposes of any federal, state,
         local and municipal law.

                  "Environmental Liabilities" shall mean any and all
         liabilities, responsibilities, claims, suits, losses, costs (including
         remedial, removal, response, abatement, clean-up, investigative, or
         monitoring costs and any other related costs and expenses), other
         causes of action recognized now or at any later time, damages,
         settlements, expenses, charges, assessments, liens, penalties, fines,
         pre-judgment and post-judgment interest, attorneys' fees and other
         legal fees (a) pursuant to any agreement, order, notice, or
         responsibility, directive (including directives embodied in
         Environmental Laws), injunction, judgment, or similar documents
         (including settlements), or (b) pursuant to any claim by a Governmental
         Authority or other Person for personal injury, property damage, damage
         to natural resources, remediation, or payment or reimbursement of
         response costs incurred or expended by the Governmental Authority or
         Person pursuant to common law or statute.



                                      -3-
<PAGE>   157

                  "Frac Agreement" shall have the meaning given such term in the
         recitals hereof.

                  "GAAP" shall mean generally accepted accounting principles
         consistently applied.

                  "Governmental Authority" shall mean 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.

                  "Greeley Plant" shall have the meaning given such term in the
         recitals hereof.

                  "Lease Agreement" shall have the meaning given such term in
         the recitals hereof.

                  "O&M Fee" shall have the meaning given such term in Section
         4.2.

                  "Permit" shall mean any license, permit or authority granted
         by any Governmental Authority.

                  "Person" shall mean 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).

                  "Premises" shall mean collectively, the "Premises" as defined
         in the Lease Agreement and the "Premises" as defined in the Sublease
         Agreement.

                  "Project Agreements" shall mean collectively, this O&M
         Agreement, the Frac Agreement, the Lease Agreement and the Sublease
         Agreement.

                  "Purchase Agreement" shall have the meaning given such term in
         the recitals hereof.

                  "Representatives" shall have the meaning given such term in
         Section 2.4.

                  "Services" shall mean all management, operations and
         maintenance services necessary or advisable in order to safely,
         dependably and efficiently manage, operate and maintain the



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         Fractionators. Without limiting the generality of the foregoing,
         "Services" shall include each of the following being performed in a
         manner consistent with good industry practice:

                           (a) Comply with all local, state and federal rules,
                  regulations and laws, including the Environmental Laws, and
                  obtain and maintain all Permits required for the maintenance
                  and operation of the Fractionators.

                           (b) Maintain adequate and sufficient records and
                  provide all data and/or reports reasonably required by TEPPCO,
                  and as required by all federal, state and local agencies with
                  jurisdiction over a Fractionator.

                           (c) Maintain current revisions of all drawings and
                  specifications, technical documents, instruction books,
                  equipment diagrams and other information relating to the
                  Fractionators.

                           (d) Maintain appropriate levels of spare parts and
                  materials required for the maintenance and proper operation of
                  the Fractionators.

                           (e) Take all actions as may be necessary or
                  appropriate to maintain the Fractionators in good operating
                  condition and repair.

                           (f) In the event of Emergencies, perform all actions
                  reasonable and appropriate to protect the Fractionators and
                  all related facilities, equipment, supplies and personnel and
                  notify TEPPCO as soon as reasonably possible at the telephone
                  number for Emergencies set forth in Section 11.1 hereof.

                           (g) Establish and maintain an effective work force
                  required for the management, operation and maintenance of the
                  Fractionators through proper hiring, training, supervising and
                  qualifying procedures, and administer all matters pertaining
                  to labor relations, working conditions, employee benefits,
                  safety and all related matters in connection with these duties
                  in accordance with applicable laws.

                           (h) Subject to Section 2.4 herein, provide reasonable
                  access to the Fractionators and all records relating to the
                  operation and maintenance of the Fractionators to all agents,
                  representatives and inspectors of TEPPCO and, if required by



                                      -5-
<PAGE>   159

                  applicable law or otherwise approved by Duke Energy,
                  Governmental Authorities.

                           (i) Keep and maintain the Fractionators free and
                  clear of, or discharge in the ordinary course of business, all
                  liens and encumbrances resulting from performance of services
                  by Duke Energy or its contractors and subcontractors.

                           (j) Keep TEPPCO informed of the operating status of
                  the Fractionators through reports as may be reasonably
                  requested and agreed upon from time to time. In addition to
                  the foregoing, Duke Energy will immediately notify TEPPCO by
                  telephone within 48 hours of any shutdown, bring down or
                  scheduled or unscheduled maintenance occurrence which impacts
                  the capacity or operations of the Fractionators and which is
                  reasonably anticipated to exceed 24 hours.

                           (k) Take such actions as shall be necessary to
                  maintain the aggregate capacity of the Fractionators to as
                  close as possible to its current estimated maximum capacity of
                  504,000 Gallons per day.

                           (l) Fully perform and comply with all duties,
                  obligations and liabilities of TEPPCO under (i) Sections 4.1
                  and 4.2 and Article V of the Frac Agreement, (ii) Sections 4.1
                  and 4.2 (except for any obligations to send notices under
                  Section 4.2) of the Lease Agreement and (iii) Sections 4.1 and
                  4.2 (except for any obligations to send notices under Section
                  4.2) of the Sublease Agreement.

                           (m) Carry out the other obligations of Duke Energy as
                  set forth in this O&M Agreement.

                  "Spindle Plant" shall have the meaning given such term in the
         recitals hereof.

                  "Sublease Agreement" shall have the meaning given such term in
         the recitals hereof.

         "TEPPCO Indemnified Parties" shall have the meaning given that term in
Section 5.1.

1.2      References. 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



                                      -6-
<PAGE>   160

         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 Sections,
         paragraphs, Exhibits or Schedules are deemed references to the
         corresponding Sections, paragraphs, Exhibits or Schedules in this
         Agreement.

1.3      Headings. The headings of the 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.

                                    ARTICLE 2
                            SERVICES AND RELATIONSHIP

2.1      Services. Duke Energy shall perform the Services in such a way as to
         safely, dependably and efficiently operate and maintain the
         Fractionators in a prudent manner, consistent with good, industry
         practices.

2.2      Other Agreements. Notwithstanding any provision to the contrary in any
         of the Project Agreements, Duke Energy agrees that is shall have sole
         responsibility to fully perform and comply with all duties, obligations
         and liabilities of TEPPCO under (i) Sections 4.1 and 4.2 and Article V
         of the Frac Agreement, (ii) Sections 4.1 and 4.2 (except for any
         obligations to send notices under Section 4.2) of the Lease Agreement
         and (iii) Sections 4.1 and 4.2 (except for any obligations to send
         notices under Section 4.2) of the Sublease Agreement.

2.3      Independent Contractor. In performing the Services, Duke Energy shall
         be an independent contractor and not an employee, agent, or servant of
         TEPPCO, and this O&M Agreement does not create any partnership or joint
         venture between Duke Energy and TEPPCO.

2.4      TEPPCO's Access. This Section 2.4 shall be the sole governing provision
         of this O&M Agreement and Other Agreements pertaining to TEPPCO, its
         employees, agents and other representatives' (the "Representatives")
         access to the Fractionators. Notwithstanding any provision in this O&M
         Agreement and Other Agreements to the contrary, TEPPCO and the
         Representatives shall only have the right to access to the
         Fractionators, the Spindle Plant site and the Greeley Plant site in
         accordance with this Section 2.4. TEPPCO and the Representatives shall
         have access to the Fractionators, Plant site and the Greeley Plant site
         only during normal business hours, when accompanied by the
         representative of Duke Energy who has been so designated by Duke
         Energy, and upon at least 24 hours advance notice to Duke Energy,
         except in the event of an Emergency, in which case Duke Energy shall
         provide to TEPPCO and its Representatives access to the Fractionators,
         the Spindle



                                      -7-
<PAGE>   161

         Plant site and/or the Greeley Plant site, as the case may be, at any
         time of the day and as soon as reasonably possible. TEPPCO and the
         Representatives shall comply with all of Duke Energy's safety rules and
         procedures during any such access.

2.5      Obligation to Provide Associated Services and Facilities. The Parties
         hereto acknowledge that (i) the equipment that comprises the
         Fractionators is insufficient to fully complete the fractionation
         process and (ii) the Fractionators must be used in conjunction with
         other equipment owned by Duke Energy to enable TEPPCO to fractionate
         the Raw Product in accordance with the terms of the Frac Agreement.
         Accordingly, Duke Energy agrees to provide, as part of the O&M Fee,
         such additional equipment and services as are reasonably necessary to
         enable TEPPCO to fractionate the Raw Product in accordance with the
         terms hereof, including, without limitation, the furnishing of
         electricity, hot oil circulation, refrigeration and control systems
         (collectively, the "Associated Equipment and Services"). Duke Energy
         shall, at all times during the term of this Agreement, maintain the
         assets necessary to provide the Associated Equipment and Services in
         good working order and repair. If Duke Energy fails to provide any
         Associated Equipment and Services in accordance with the terms of this
         Agreement, then in addition to any other rights or remedies TEPPCO may
         have for any such failure, TEPPCO shall have the right to obtain
         specific performance of the provision of such Associated Equipment and
         Services.

                                    ARTICLE 3
                   EMPLOYEES, CONSULTANTS, AND SUBCONTRACTORS

3.1      Employees, Consultants, and Subcontractors. Duke Energy shall hire,
         employ, and have supervision over such persons as may be required to
         enable Duke Energy to perform the Services required hereunder
         (including consultants, professionals, subcontractors, services, or
         other organizations). Duke Energy shall pay all expenses in connection
         therewith, including, but not limited to compensation, salaries, wages,
         bonuses, benefits, social security taxes, workers' compensation
         insurance, retirement, and insurance benefits and other such expenses.

3.2      Affiliates. Notwithstanding Section 3.1 above, Duke Energy is
         authorized to utilize, as it deems necessary, the services of any
         Affiliate.

3.3      Standards for Performance of Duke Energy, its Employees, and
         Contractors. Duke Energy shall perform the Services and carry out its
         responsibilities, devoting appropriate time and talents to the
         operations of the Fractionators in a good and businesslike manner and
         in accordance with good and prudent practices within the industry. In
         connection therewith, Duke Energy shall provide supervisory,
         administrative, and technical services to TEPPCO and shall perform such
         services with the same degree of diligence and care that it would
         exercise if the Fractionators were owned solely by Duke Energy. All
         persons engaged by Duke Energy hereunder shall be duly trained,
         qualified and experienced to perform such responsibilities. Duke Energy
         shall require all contractors, and such contractors shall use
         reasonable efforts to require all subcontractors, to carry insurance of
         the types and amounts



                                      -8-
<PAGE>   162

         set forth in the attached Schedule 3.3. All materials and workmanship
         used or provided in performing the Services shall be in accordance with
         applicable governmental standards and regulations.

                                    ARTICLE 4
                         OPERATION AND MAINTENANCE COSTS

4.1      Operating and Other Costs. Duke Energy shall pay and be responsible for
         all costs, expenses, expenditures and fees incurred in connection with
         the provision of the Services or otherwise required for the management,
         operation and maintenance of the Fractionators, except as otherwise
         provided in Section 4.5 below. In this regard, any loss of products due
         to operations or measurement shall be the responsibility of Duke
         Energy.

4.2      O&M Fee. TEPPCO shall pay to Duke Energy, each month, a fee equal to
         $0.005 times the number of Gallons of Specification Product (as
         calculated pursuant to the Frac Agreement) which is delivered by TEPPCO
         to Duke Energy at the Delivery Points each month pursuant to the terms
         of the Frac Agreement (the "O&M Fee") except as otherwise provided in
         Section 4.1 of the Frac Agreement. Except as otherwise provided in this
         Article 4, the O&M Fee shall constitute payment by TEPPCO to Duke
         Energy for all costs, expenses, expenditures, and fees incurred in
         connection with the provision of the Services.

4.3      Insurable Loss to the Fractionators. Except to the extent covered by
         the insurance carried by Duke Energy pursuant to Section 4.5 below or
         any insurance carried by TEPPCO, TEPPCO shall be responsible for all
         costs and expenses necessary for the repair or replacement of all or
         portions of the Fractionators made necessary because of an insurable
         loss, including, without limitation, losses incurred by fire, flood,
         storm, theft or accident; provided, however, in the event that the
         Fractionators are damaged because of the negligent act or omission of
         any of the Duke Energy Indemnified Parties, then Duke Energy shall be
         responsible for any deductible under any such insurance, whether
         carried by Duke Energy or TEPPCO. TEPPCO may carry at its own expense
         such insurance as it deems necessary or appropriate to protect against
         such potential losses.

4.4      Capital Expenditures. Duke Energy shall be responsible for any single
         item of capital expenditure (as determined by GAAP) which is less than
         $100,000. With respect to any capital expenditure (as determined by
         GAAP) which exceeds $100,000, TEPPCO shall be liable for the total
         amount of such expenditures from the first dollar thereof; provided,
         however, before incurring any such expenditures, Duke Energy shall
         obtain TEPPCO's written approval of such expenditures, such approval
         not to be unreasonably withheld. The Parties acknowledge and agree that
         notwithstanding any provision in the other Project Agreements to the
         contrary, that TEPPCO shall not increase the capacity of the
         Fractionators without Duke Energy's prior written consent.

4.5      Insurance. Duke Energy shall carry the insurance described on the
         attached Schedule 4.5 and such other insurance as it may consider
         necessary or appropriate and shall be responsible for all costs and
         expenses of premiums payable for such insurance. Under no circumstances



                                      -9-
<PAGE>   163

         shall Duke Energy be required to carry insurance for business
         interruption or be liable to TEPPCO for damages attributable to
         business interruption or loss of profits. With respect to the insurance
         policies carried by each Party hereunder, such insurance policies shall
         provide (i) that the other Party shall be named as an additional
         insured, (ii) for a waiver of rights of subrogation from the insurer,
         (iii) that the other Party shall be given thirty (30) days' notice
         prior to cancellation, (iv) that the other Party receive notice in the
         event of non-payment of premiums and (v) that the other Party be named
         as a loss payee as its interest may appear.

                                    ARTICLE 5
                                 INDEMNIFICATION

5.1      Indemnification by Duke Energy. Duke Energy agrees to indemnify,
         protect, save and keep harmless TEPPCO and its Affiliates and their
         respective officers, directors, shareholders, unitholders, members,
         managers, agents, employees, representatives, contractors and
         subcontractors (other than any of the Duke Energy Indemnified Parties),
         successors and assigns (collectively, the "TEPPCO Indemnified Parties")
         from and against any and all liabilities, obligations, losses, damages,
         penalties, claims (including, without limitation, claims involving
         strict or absolute liability in tort), actions, suits, costs, expenses
         and disbursements (including, without limitation, reasonable legal fees
         and expenses) of any kind and nature whatsoever (collectively, the
         "Claims") which may be imposed on, incurred by or asserted against any
         of the TEPPCO Indemnified Parties, in any way relating to or arising
         out of:

                  (a) the possession, custody, processing or use of the
         Dedicated Gas, the Raw Product and/or the Specification Products,
         including, without limitation, the payment of any taxes, royalties,
         overriding royalties or other payments due or to become due thereon;

                  (b) any misrepresentation or breach of warranty made by Duke
         Energy in any of the Project Agreements;

                  (c) any failure to perform any covenant or agreement made or
         undertaken by Duke Energy in any of the Project Agreements, including,
         without limitation, the performance of any covenant or agreement of
         TEPPCO under any of the Project Agreements which has been expressly
         assumed by Duke Energy under this O&M Agreement;

                  (d) the possession, use or operation of the Fractionators or
         the Premises prior to the date hereof or during the term of any of the
         Project Agreements or any accident or occurrence in connection
         therewith prior to the date hereof or during the term of any of the
         Project Agreements;

                  (e) the possession, use or operation of the Greeley Plant, the
         Spindle Plant, the Greeley Plant site and/or the Spindle Plant site or
         any accident or occurrence in connection therewith both before and
         after the date hereof; or



                                      -10-
<PAGE>   164

                  (f) any Environmental Liabilities relating to the Premises,
         the Fractionators, the Greeley Plant, the Spindle Plant, the Greeley
         Plant site or the Spindle Plant site or the operation or use thereof
         prior to the date hereof or during the term of any of the Project
         Agreements, or resulting from any facts existing or events occurring
         prior to the date hereof or during the term of any of the Project
         Agreements, regardless of when such liability arises;

         provided, however, Duke Energy shall not be required to indemnify the
         TEPPCO Indemnified Parties for any Claim resulting from the willful
         misconduct or negligence of any of the TEPPCO Indemnified Parties. To
         the extent that the TEPPCO Indemnified Parties in fact receive full
         indemnification payments from Duke Energy under the indemnification
         provisions hereof, Duke Energy shall be subrogated to the TEPPCO
         Indemnified Parties' rights with respect to the transaction or event
         requiring or giving rise to such indemnity.

5.2      Indemnification by TEPPCO. TEPPCO agrees to indemnify, protect, save
         and keep harmless Duke Energy and its Affiliates and their respective
         officers, directors, shareholders, unitholders, members, managers,
         agents, employees, representatives, contractors, subcontractors,
         successors and assigns (collectively, the "Duke Energy Indemnified
         Parties") from and against any and all Claims which may be imposed on,
         incurred by or asserted against any of the Duke Energy Indemnified
         Parties, in any way relating to or arising out of:

                  (a) any misrepresentation or breach of warranty made by TEPPCO
         in any of the Project Agreements;

                  (b) any failure to perform any covenant or agreement made or
         undertaken by TEPPCO in any of the Project Agreements to the extent
         that compliance with or performance of any such covenant or agreement
         has not been expressly assumed by Duke Energy in this O&M Agreement; or

                  (c) the willful misconduct or negligence of any of the TEPPCO
         Indemnified Parties in connection with any matter pertaining to the
         Premises, the Fractionators, the Raw Product or the Product;

         provided, however, TEPPCO shall not be required to indemnify the Duke
         Energy Indemnified Parties for any Claim resulting from the willful
         misconduct or negligence of any of the Duke Energy Indemnified Parties.
         To the extent that the Duke Energy Indemnified Parties in fact receive
         full indemnification payments from TEPPCO under the indemnification
         provisions hereof, TEPPCO shall be subrogated to the Duke Energy
         Indemnified Parties' rights with respect to the transaction or event
         requiring or giving rise to such indemnity.

                                    ARTICLE 6
                              TERM AND TERMINATION

6.1      Term. This O&M Agreement shall be effective as of March 31, 1998 at
         11:59 p.m. (Denver, Colorado time) and, unless terminated in accordance
         with Section 6.2, continue in effect for



                                      -11-
<PAGE>   165

         a primary term ending March 31, 2018 at 11:59 p.m. (Denver, Colorado
         time), and shall continue in effect from Year to Year thereafter;
         provided that either Party shall have the right to terminate this O&M
         Agreement effective March 31, 2018 at 11:59 p.m. or any anniversary of
         that date by giving the other Party at least six (6) months prior
         written notice.

6.2      Termination. Termination provisions pertaining to this O&M Agreement
         are set forth in the Frac Agreement.

                                    ARTICLE 7
                               BILLING AND PAYMENT

7.1      Statements and Billings. Duke Energy shall invoice TEPPCO by the 25th
         day of each month for amounts due Duke Energy under this O&M Agreement
         for the prior month. Each such invoice shall contain a detailed
         description of the monthly charges to TEPPCO and will indicate whether
         or not such amount has been deducted from amounts owed to TEPPCO under
         the Frac Agreement. If such amounts are not deducted from amounts owed
         to TEPPCO under the Frac Agreement, payment will be due within twenty
         (20) days after receipt of the invoice.

7.2      Audit Rights. In accordance with the Confidentiality Agreement of even
         date herewith between the Parties, each Party shall have, at its
         expense, the right at all times to examine the books and records of the
         other Party, during normal working hours, to the extent necessary to
         verify the accuracy of any invoice, statement, charge, computation or
         demand made under or pursuant to this O&M Agreement. Each Party agrees
         to keep records and books of account in accordance with generally
         accepted accounting principles in the industry. The Parties agree that
         the sole and exclusive remedy and measure of damages for any improper
         payments under this agreement shall be the payment of the amount of
         underpayment or the recovery of the amount of overpayment, as the case
         may be, during the two (2) year period immediately preceding the date
         on which a Party notifies the other Party in writing of an error,
         mistake, inaccuracy or other claim with respect to any such invoice,
         statement, charge, computation or demand.

                                    ARTICLE 8
                             SURVIVAL OF OBLIGATIONS

         Any obligation owed by a Party to the other Party under any of the
Project Agreements (whether the same shall be known or unknown at the
termination hereof, or whether the circumstances, events, or basis of the same
shall be known or unknown at the termination hereof), including indemnification
obligations, shall survive termination of any of the Project Agreements.

                                    ARTICLE 9
                                    WARRANTY

9.1      Warranty. Duke Energy warrants that the Services shall be performed in
         accordance with the terms and conditions of this Agreement, including
         all standards set forth herein. Except



                                      -12-
<PAGE>   166

         as otherwise provided in this O&M Agreement, TEPPCO agrees that there
         are no warranties, either express or implied, made with respect to Duke
         Energy's performance under this O&M Agreement or the Other Agreements
         and TEPPCO expressly recognizes and agrees that Duke Energy does not
         promise that the Services and work will be performed in a perfect
         manner. Duke Energy SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED
         WARRANTIES THAT MAY RESULT FROM ANY RELATIONSHIP BETWEEN TEPPCO AND
         DUKE ENERGY OR FROM THE DRAWINGS OR MODELS OF THE WORK OR OTHERWISE,
         INCLUDING, BUT NOT LIMITED TO, ANY AND ALL IMPLIED WARRANTIES OF
         MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. TEPPCO ALSO HEREBY
         WAIVES THE PROVISIONS OF ANY DECEPTIVE TRADE PRACTICE ACT OR SIMILAR
         ACT IN ALL APPLICABLE JURISDICTIONS.

9.2      Consequence of Breach. In the event Duke Energy breaches any warranty
         described in Section 9.1 above, Duke Energy shall re-perform any
         defective service, replace any unfit or unqualified personnel and train
         new personnel, and repair or replace any components of the
         Fractionators damaged as a consequence of such breach. Any such
         re-performance, training, repair or replacement by Duke Energy pursuant
         to this Section 9.2 shall be at Duke Energy's sole cost and expense.

9.3      Vendor Warranties. Duke Energy will extend to TEPPCO the benefit of all
         warranties of any kind, whether express or implied, which arise out of
         or are given to Duke Energy by other persons in connection with the
         sale of goods and services to Duke Energy with respect to the
         Fractionators.

                                   ARTICLE 10
                                    DISPUTES

10.1     Dispute Resolution; Arbitration. In the event of any controversy or
         claim, whether based in contract, tort or otherwise, arising out of or
         relating to this O&M Agreement or the scope, breach, termination or
         validity of this O&M Agreement (a "Disputed Claim"), the Parties shall
         promptly seek to resolve any such Disputed Claim by negotiations
         between senior executives of the Parties who have authority to settle
         the Disputed Claim. When a Party believes there is a Disputed Claim
         under this O&M Agreement, that Party will give the other Party written
         notice of the Disputed Claim. Within thirty (30) days after receipt of
         such notice, the receiving Party shall submit to the other a written
         response. Both the notice and response shall include (i) a statement of
         each Party'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 Party. In the
         event the Disputed Claim involves a claim arising out of the actions of
         any person or entity not a signatory to this O&M Agreement, the
         receiving Party shall have such additional time as necessary, not to
         exceed an additional thirty (30) days, to investigate the Disputed
         Claim 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 Disputed Claim.



                                      -13-
<PAGE>   167

         If one of the executives intends to be accompanied at a meeting by an
         attorney, the other executive shall be given at least five (5) working
         days' notice of such intention and may also be accompanied by an
         attorney. All negotiations and communications pursuant to this Article
         10 shall be treated and maintained by the Parties as confidential
         information and shall be treated as compromise and settlement
         negotiations for the purposes of the Federal and State Rules of
         Evidence .

10.2     If the Disputed Claim has not been resolved within sixty (60) days
         after the date of the response given pursuant to Section 10.1 above, or
         such additional time, if any, that the Parties mutually agree to in
         writing, or if the Party receiving such notice denies the applicability
         of the provisions of Section 10.1 or otherwise refuses to participate
         under the provisions of Section 10.1, either Party may initiate binding
         arbitration pursuant to the provisions of Section 10.3 below.

10.3     Any Disputed Claims not settled pursuant to the foregoing provisions
         shall be submitted to binding arbitration in accordance with the
         following provisions. Arbitration shall be the sole and exclusive
         remedy of the Parties in connection with any Disputed Claims hereunder.

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

         (b)      Within fifteen (15) days after receipt of such demand, the
                  receiving Party shall name its arbitrator. If the receiving
                  Party fails or refuses to name its arbitrator within such
                  15-day period, the second arbitrator shall be appointed, upon
                  request of the Party demanding arbitration, by the Chief U.S.
                  District Court Judge for the District of Colorado 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 Party may request
                  the Chief U.S. District Court Judge for the District of
                  Colorado 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 Party, 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 Party 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 Parties 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 Parties are not required to be neutral, but
                  the third arbitrator shall be neutral and shall be a certified
                  public accountant. If neither of the arbitrators appointed by
                  or on



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                  behalf of the Parties is a retired judge, then the third
                  arbitrator shall be a retired judge.

         (d)      The Parties hereto hereby request and consent to the three (3)
                  arbitrators conducting a hearing in Denver, Colorado 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 Parties 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.

         (f)      The Federal Rules of Civil Procedure, as modified or
                  supplemented by the local rules of civil procedure for the
                  U.S. District Court of Colorado, shall apply in the
                  arbitration. The Parties shall make their witnesses available
                  in a timely manner for discovery pursuant to such rules. If a
                  Party 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 Parties 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 any Party 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 Party
                  written notice of a Disputed Claim as provided in Section 10.1
                  above until such time as the Disputed Claim has been resolved
                  pursuant to Section 10.1 , or an arbitration award has been
                  entered pursuant to Section 10.3.

10.4     Recovery of Costs and Attorneys' Fees. In the event arbitration (or,
         despite the Parties agreement to the Disputed Claims through binding
         arbitration, litigation) arising out of this O&M Agreement is initiated
         by either Party, the prevailing Party, 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.



                                      -15-
<PAGE>   169

10.5     Choice of Forum. If, despite the Parties' agreement to submit any
         Disputed Claims to binding arbitration, there are any court proceedings
         arising out of or relating to this O&M Agreement or the transactions
         contemplated hereby, such proceedings shall be brought and tried in the
         federal or state courts situated in the City and County of Denver,
         Colorado.

10.6     Jury Waivers. THE PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO DEMAND A
         TRIAL BY JURY.

10.7     Limitation of Damages. WHETHER OR NOT OCCASIONED BY A DEFAULT OR OTHER
         BREACH OF THIS O&M AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE
         OTHER PARTY FOR SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, LOSS OF
         PROFITS, OR CONSEQUENTIAL DAMAGES.

10.8     Governing Law. This O&M Agreement shall be construed and enforced in
         accordance with, and the rights of the Parties shall be governed by,
         the law of the state of Colorado, without regard to any
         conflict-of-laws provision thereof that would otherwise require the
         application of the law of any other jurisdiction.

                                   ARTICLE 11
                                  MISCELLANEOUS

11.1     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 Duke Energy:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention:  President
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-2613

                  and copy to:

                           Duke Energy Field Services, Inc.
                           370 - 17th Street, Suite 900
                           Denver, Colorado 80202
                           Attention: General Counsel
                           Telephone:  (303) 595-3331
                           Facsimile:  (303) 893-8913



                                      -16-
<PAGE>   170

                  If to TEPPCO:

                           TEPPCO Colorado, LLC
                           2929 Allen Parkway, Suite 3200
                           Houston, Texas  77019
                           Attention:  President
                           Telephone:  (713) 759-3636
                           Emergency Telephone:  (713) 759-3636
                           Facsimile:  (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:  (713) 759-3645

         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 11.1. 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.

11.2     Waiver. No course of dealing and no delay on the part of either Party
         in exercising any right, power or remedy shall operate as a waiver
         thereof or otherwise prejudice such Party's rights, powers or remedies.
         No term or condition of this O&M Agreement shall be deemed to have been
         waived nor shall there be any estoppel to enforce any provision of this
         O&M Agreement except by written instrument of the Parties charged with
         such waiver or estoppel. The waiver of any breach of any term,
         condition or provision of this O&M Agreement shall not be construed as
         a waiver of any prior, concurrent or subsequent breach of the same or
         any other term, condition or provision hereof.

11.3     Amendments; Changes; Modifications. This O&M Agreement may not be
         effectively amended, changed, modified, altered or terminated, except
         as provided herein, without the written consent of the Parties and such
         consent shall be effective only in the specific instance and for the
         specific purpose for which it is given.



                                      -17-
<PAGE>   171

11.4     Successors and Assigns. The Project Agreements shall inure to the
         benefit of and be binding upon the Parties and their respective
         successors and permitted assigns, whether so expressed or not.
         Notwithstanding, neither Party may assign any of the Project Agreements
         or any rights, duties or obligations thereunder, provided, however, in
         the event of any assignment or proposed assignment of any of the
         Project Agreements by TEPPCO, Duke Energy shall have the right to
         exercise its right to purchase the Fractionators pursuant to Section
         10.4 of the Purchase Agreement between the Parties and in the event of
         any assignment of any of the Project Agreements by Duke Energy, Duke
         Energy shall remain liable for its obligations under the Project
         Agreements in the same manner as provided under Section 3.6 of the Frac
         Agreement.

11.5     Conflicts. In the event of any conflict between the provisions of this
         O&M Agreement and any exhibits or schedules attached hereto, the
         provisions of this O&M Agreement shall prevail.

11.6     Entire Agreement. The Project Agreements and any related documents
         between the Parties of even date herewith, including exhibits and
         schedules attached thereto, constitute the final and entire agreement
         between the Parties concerning the subject matter thereof, and
         supersedes all prior and contemporaneous agreements and undertakings of
         the Parties in connection therewith. The Project Agreements may not be
         contradicted by evidence of prior, contemporaneous or subsequent oral
         agreements of the Parties. There are no oral agreements between the
         Parties.

11.7     Laws and Regulations. This O&M Agreement and the performance hereof
         shall be subject to all valid and applicable federal and state laws and
         to the valid and applicable orders, laws, rules, and regulations of any
         state or federal authority having jurisdiction, but nothing contained
         herein shall be construed as a waiver of any right to question or
         contest any such order, law, rule, or regulation in any forum having
         jurisdiction.

11.8     Severability. The invalidity or unenforceability of any provision of
         this O&M Agreement shall in no way affect the validity or
         enforceability of any other provision hereof.

11.9     Time of Essence. Time is of the essence in the performance of all
         obligations falling due hereunder.

11.10    Captions. The headings to Articles, Sections and other subdivisions of
         this O&M Agreement are inserted for convenience of reference only and
         will not affect the meaning or interpretation of this O&M Agreement.



                                      -18-
<PAGE>   172

11.11    Schedules and Exhibits. All schedules and exhibits hereto which are
         referred to herein are hereby made a part hereof and incorporated
         herein by such reference.

11.12    No Partnership. The relationship between Duke Energy and TEPPCO at all
         times shall not be deemed a partnership or joint venture.

11.13    No Third Party Beneficiaries. Subject to the provisions of Section 11.4
         hereof, this O&M Agreement inures to the sole and exclusive benefit of
         Duke Energy and TEPPCO, their respective successors, legal
         representatives and assigns, and confers no benefit on any third party.

11.14    Mutual Cooperation; Further Assurances. Upon request by either Party
         from time to time during the term of this O&M Agreement, each Party
         agrees to execute and deliver all such other and additional
         instruments, notices and other documents and do all such other acts and
         things as may be necessary to carry out the purposes of this O&M
         Agreement and to more fully assure the Parties' rights and interests
         provided for hereunder. Duke Energy and TEPPCO each agree to cooperate
         with the other on all matters relating to required permits and
         regulatory compliance by either Duke Energy or TEPPCO in respect of the
         Fractionators so as to ensure continued full operation of the
         Fractionators by Duke Energy pursuant to the terms of this O&M
         Agreement.

11.15    Other Project Agreements. In the event of any conflict between the
         provisions of any of the Project Agreements with each other or with the
         Purchase Agreement, the provisions of this O&M Agreement shall control
         over the inconsistent provisions of any of the other Project Documents
         or the Purchase Agreement.

         The Parties hereto have executed this O&M Agreement as of the date
first hereinabove written.

                                        DUKE ENERGY:

                                        DUKE ENERGY FIELD SERVICES, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------



                                      -19-
<PAGE>   173

                                        TEPPCO:

                                        TEPPCO COLORADO, LLC


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------



                                      -20-
<PAGE>   174


                                                                       EXHIBIT D
================================================================================



                               SUBLEASE AGREEMENT


                                    BETWEEN



                       DUKE ENERGY FIELD SERVICES, INC.,
                                  AS SUBLESSOR


                                      AND


                             TEPPCO COLORADO, LLC,
                                  AS SUBLESSEE




                                 MARCH 31, 1998





================================================================================
<PAGE>   175
                               SUBLEASE AGREEMENT

                               TABLE OF CONTENTS


<TABLE>
<S>                  <C>                                                                                                <C>
ARTICLE I            DEFINITIONS AND CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

         1.1         Certain Defined Terms  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         1.2         References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         1.3         Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

ARTICLE II           ASSIGNMENT AND SUBLEASE AND TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

         2.1         Demise of Premises and Term  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

ARTICLE III          RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

         3.1         Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         3.2         Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

ARTICLE IV           CONDUCT OF BUSINESS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

         4.1         Use of Premises  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         4.2         Surrender of Premises  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

ARTICLE V            TAXES, ASSESSMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

         5.1         Duke Energy's Obligation to Pay  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         5.2         Manner of Payment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

ARTICLE VI           REPRESENTATIONS, WARRANTIES AND COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

         6.1         Representations and Warranties of Duke Energy  . . . . . . . . . . . . . . . . . . . . . . . . .   4
         6.2         Covenants of Duke Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

ARTICLE VII          EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

         7.1         Total Condemnation of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         7.2         Partial Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         7.3         Damages  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

ARTICLE VIII         GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

         8.1         Estoppel Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         8.2         Warranty of Peaceful Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         8.3         Recording. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         8.4         Notice.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         8.5         Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.6         Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.7         Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.8         Conflicts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.9         Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.10        Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
</TABLE>
<PAGE>   176
<TABLE>
         <S>         <C>                                                                                                <C>
         8.11        Time of Essence  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.12        Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.13        Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
         8.14        No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         8.15        No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         8.16        Mutual Cooperation; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         8.17        Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         8.18        Other Project Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
</TABLE>





                                      -ii-
<PAGE>   177
                               SUBLEASE AGREEMENT

         THIS SUBLEASE AGREEMENT (this "Sublease") is made and entered into to
this 21st day of April, 1998, but effective 11:59 p.m. (Denver, Colorado time)
on the 31st day of March, 1998, between Duke Energy Field Services, Inc., a
Colorado corporation (herein called "Duke Energy"), and TEPPCO Colorado, LLC, a
Delaware limited liability company (herein called "TEPPCO").  Each of TEPPCO
and Duke Energy are sometimes referred to individually as a "Party" and
collectively as the "Parties."

                              W I T N E S S E T H:

         WHEREAS, Duke Energy is the lessee under the Sickler Lease
(hereinafter defined), which covers, among other lands, the Premises
(hereinafter defined); and

         WHEREAS, Duke Energy desires to sublease the Premises to TEPPCO, and
TEPPCO desires to sublease the Premises from Duke Energy upon the terms and
conditions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the premises, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and of the mutual agreements hereinafter set forth, Duke
Energy and TEPPCO covenant and agree as follows:

                                   ARTICLE I
                          DEFINITIONS AND CONSTRUCTION

         1.1         Certain Defined Terms.  Unless the context otherwise
requires, the following terms shall have the respective meanings set forth in
this Section 1.1:

                     "Day" means a period of time commencing at 8:00 a.m.
(Denver, Colorado time) on a calendar day and ending at 8:00 a.m. (Denver,
Colorado time) on the next succeeding calendar day.

                     "Frac Agreement" means that certain Fractionation
Agreement dated of even date herewith by and between Duke Energy and TEPPCO.

                     "Fractionation Plant" means TEPPCO's fractionation plant
located on the Premises.

                     "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.
<PAGE>   178
                     "Lease" means that certain Lease Agreement dated of even
date herewith by and between Duke Energy and TEPPCO.

                     "O&M Agreement" means that certain Operation and
Maintenance Agreement dated of even date herewith by and between Duke Energy
and TEPPCO.

                     "Permitted Encumbrances" shall have the meaning ascribed
to such term in Section 6.1.

                     "Premises" means that certain tract or parcel of land
located in Weld County, Colorado, more particularly described on Exhibit A
attached hereto and made a part hereof for all purposes.

                     "Project Agreements" means collectively, this Sublease,
the O&M Agreement, the Frac Agreement and the Lease.

                     "Purchase Agreement" shall mean that certain Asset
Purchase Agreement dated March 31, 1998, by and between Duke Energy, as
"Seller," and TEPPCO, as "Buyer".

                     "Rent" shall have the meaning ascribed to such term in
Section 3.1.

                     "Sickler Lease" means that certain Lease dated December 9,
1977, by and between Sheldon R. Sickler and Anna Mae Sickler, as "lessor," and
Amoco Production Company, as "lessee," which was recorded on May 22, 1978, in
Book 832 at Reception No. 1754168 in the real estate records of Weld County,
Colorado, as amended by that certain Lease Amendment dated August 28, 1992, by
and between Anna Mae Sickler, as "lessor," and Associated Natural Gas, Inc., as
"lessee."

                     "Taxes" shall have the meaning ascribed to such term in
Section 5.1.

                     "Year" shall mean a period of 365 consecutive Days;
provided, however that any year which contains the date of February 29 shall
consist of 366 consecutive Days.

         1.2         References.  As used in this Sublease, 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 Sublease as a whole and not to any particular Article,
provision, section or paragraph of this Sublease and (b) "or" mean "either or
both".  Unless otherwise specified, all references in this Sublease to
Sections, paragraphs, Exhibits or Schedules are deemed references to the
corresponding Sections, paragraphs, Exhibits or Schedules in this Sublease.





                                      -2-
<PAGE>   179
         1.3         Headings.  The headings of the Sections of this Sublease
and of the Schedules and Exhibits are included for convenience only and shall
not be deemed to constitute part of this Sublease or to affect the construction
or interpretation hereof or thereof.

                                   ARTICLE II
                        ASSIGNMENT AND SUBLEASE AND TERM

         2.1         Demise of Premises and Term.  In consideration of the
rents, covenants, and agreements set forth herein and subject to the terms and
conditions hereof and the Sickler Lease, Duke Energy hereby assigns and
subleases to TEPPCO and TEPPCO hereby subleases from Duke Energy, the Premises
for a term commencing on March 31, 1998 at 11:59 p.m.  (Denver, Colorado time)
and, unless terminated in accordance with Article II of the Frac Agreement,
continue in effect for a primary term ending March 31, 2018 at 11:59 p.m.
(Denver, Colorado time), and shall continue in effect from Year to Year
thereafter; provided that either Party shall have the right to terminate this
Sublease effective March 31, 2018 at 11:59 p.m. or any anniversary of such date
by giving the other Party at least six (6) months prior written notice.

                                  ARTICLE III
                                      RENT

         3.1         Rent.  As rental for the Premises during the term of this
Sublease, TEPPCO agrees to pay to Duke Energy for each month of the term of
this Sublease One Thousand and 00/100 ($1,000.00) (the "Rent") on or before the
first (1st) day of each month of the term of this Sublease.  Rent shall be
prorated for any partial month during the term of this Sublease.

         3.2         Place of Payment.  All Rent shall be payable in lawful
money of the United States of America, at Duke Energy's address set forth in
Section 8.4 herein.

                                   ARTICLE IV
                              CONDUCT OF BUSINESS

         4.1         Use of Premises.  Subject to the provisions of the Sickler
Lease, TEPPCO shall have the right to use the Premises for the purpose of
fractionating natural gas liquids.

         4.2         Surrender of Premises.  TEPPCO shall at the expiration of
the term of this Sublease, or at any earlier termination of this Sublease,
surrender the Premises to Duke Energy in as good condition as it received the
same; provided, however, TEPPCO shall deliver written notice to Duke Energy
prior to termination of the Sublease if TEPPCO will remove the Fractionation
Plant and any other alterations, additions, improvements or other changes to
the Premises made by TEPPCO during the term of this Sublease; provided that
TEPPCO shall have the right to, and must remove, the Fractionation Plant, if at
all, within one (1) year after termination of this Sublease, but no earlier
than one (1) year after delivery of written notice as provided above.  If
TEPPCO fails to





                                      -3-
<PAGE>   180
deliver notice as provided in the preceding sentence, TEPPCO shall surrender
the Fractionation Plant and any such alterations, additions, improvements or
other changes to Duke Energy upon termination of this Sublease.

                                   ARTICLE V
                               TAXES, ASSESSMENTS

         5.1         Duke Energy's Obligation to Pay.  Duke Energy shall pay
during the term of this Sublease, all federal, state and local real and
personal property ad valorem taxes, assessments, and other governmental
charges, general and special, ordinary and extraordinary, including but not
limited to assessments for public improvements or benefits assessed against the
Premises, or improvements situated thereon, including, without limitation, the
Fractionation Plant, that are payable to any lawful authority assessed against
or with respect to the Premises or the use or operation thereof, including, but
not limited to, any federal, state or local income, gross receipts,
withholding, franchise, excise, sales, use, value added, recording, transfer or
stamp tax, levy, duty, charge or withholding of any kind imposed or assessed by
any federal, state or local government, agency or authority, together with any
addition to tax, penalty, fine or interest thereon, other than state or U.S.
federal income tax imposed upon the taxable income of TEPPCO and any franchise
taxes imposed upon TEPPCO (such taxes and assessments being hereinafter called
"Taxes").  In the event Duke Energy fails to pay such Taxes prior to the time
the same become delinquent, TEPPCO may pay the same and (provided TEPPCO shall
have delivered to Duke Energy evidence of such payment) deduct the amount of
such payment from the Rent owed hereunder.

         5.2         Manner of Payment.  Duke Energy shall pay all Taxes
directly to the applicable taxing authority prior to delinquency and shall
promptly thereafter provide TEPPCO with evidence of such payment.  The
certificate issued or given by the appropriate officials authorized or
designated by law to issue or give the same or to receive payment of such Taxes
shall be prima facie evidence of the existence, payment, nonpayment and amount
of such Taxes.  Duke Energy, if Duke Energy shall so desire, may contest the
validity or amount of any such Taxes, at Duke Energy's sole cost and expense,
by appropriate proceedings, diligently conducted in good faith.  Duke Energy
may defer payment of such Taxes during the pendency of such contest, provided
that nothing herein contained shall be construed to allow such Taxes to remain
unpaid for such length of time as shall permit the Premises, or any part
thereof, to be sold by any Governmental Authority or a lien with respect
thereto foreclosed for the nonpayment of the same.

                                   ARTICLE VI
                   REPRESENTATIONS, WARRANTIES AND COVENANTS

         6.1         Representations and Warranties of Duke Energy.  Duke
Energy represents and warrants to TEPPCO that (i) Duke Energy has good and
marketable title to the leasehold interest under the Sickler Lease, (ii) Duke
Energy has the right to enter into this Sublease without obtaining the consent
of the lessor under the Sickler Lease and (iii) TEPPCO shall have the right to
the quiet,





                                      -4-
<PAGE>   181
peaceful and undisturbed use of the Premises subject only to: (a) liens for
current taxes and assessments not yet due or which Duke Energy is contesting in
good faith, (b) inchoate mechanic and materialmen liens for construction in
progress, (c) inchoate workmen, repairmen, warehousemen, customer, employee and
carriers liens arising in the ordinary course of business and (d) liens created
by TEPPCO (collectively, the "Permitted Encumbrances").

         6.2         Covenants of Duke Energy.  Duke Energy covenants and
agrees with TEPPCO that Duke Energy shall observe and timely perform all of the
obligations and liabilities of the lessor under the Sickler Lease.

                                  ARTICLE VII
                                 EMINENT DOMAIN

         7.1         Total Condemnation of Premises.  If the whole of the
Premises are acquired or condemned by eminent domain for any public or
quasi-public use or purpose, then this Sublease shall terminate as of the date
title vests in any public agency.  All rentals and other charges owing
hereunder shall be prorated as of such date.

         7.2         Partial Condemnation.  If any part of the Premises is
acquired or condemned as set forth in Section 7.1, and if in TEPPCO's
reasonable opinion such partial taking or condemnation renders the Premises
unsuitable for the business of TEPPCO, then this Sublease shall terminate at
TEPPCO's election as of the date title vests in any public agency, provided
TEPPCO delivers to Duke Energy written notice of such election to terminate
within thirty (30) days following the date title vests in such public agency.
In the event of such termination, all rentals and other charges owing hereunder
shall be prorated as of such effective date of termination.

         7.3         Damages.  Duke Energy shall be entitled to any award and
all damages payable as a result of any condemnation or taking of its leasehold
interest in the Premises.  TEPPCO shall have the right to claim and recover
from the condemning authority, but not from Duke Energy, such compensation as
may be separately awarded or recoverable by TEPPCO in TEPPCO's own right on
account of any and all damage to the Fractionation Plant and/or TEPPCO's
business by reason of the condemnation, including loss of value of any
unexpired portion of the term of the Sublease, and for or on account of any
cost or loss to which TEPPCO might be put in removing TEPPCO's personal
property, fixtures, leasehold improvements and equipment, including, without
limitation, the Fractionation Plant, from the Premises.

                                  ARTICLE VIII
                               GENERAL PROVISIONS

         8.1         Estoppel Certificates.  TEPPCO and Duke Energy shall, at
any time and from time to time upon not less than ten (10) days prior written
request from the other Party, execute, acknowledge and deliver to the other a
statement in writing (i) certifying that this Sublease is





                                      -5-
<PAGE>   182
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Sublease, as so modified, is in full
force and effect) and the date to which Rent and other charges are paid, and
(ii) acknowledging that there are not, to the executing Party's knowledge, any
uncured defaults on the part of the other Party hereunder (or specifying such
defaults, if any are claimed).  Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises or the
leasehold.

         Duke Energy's or TEPPCO's failure to deliver such statement within
such ten (10) day period shall be conclusive upon that Party (i) that this
Sublease is in full force and effect without modification, except as may be
represented by the other Party, and (ii) that there are not uncured defaults in
performance by the other Party.

         Nothing in this Section 8.1 shall be construed to waive the conditions
elsewhere contained in this Sublease applicable to assignment or subletting of
the Premises by TEPPCO.

         8.2         Warranty of Peaceful Possession.  Duke Energy covenants
and warrants that TEPPCO, upon paying the Rent reserved hereunder and observing
and performing all of the covenants, conditions and provisions on TEPPCO's part
to be observed and performed hereunder, may peaceably and quietly have, hold,
occupy, use and enjoy, and shall have the full, exclusive and unrestricted use
and enjoyment of, all the Premises during the term of the Sublease for the
purposes permitted herein, and Duke Energy agrees to warrant and forever defend
title to the Premises against the claims of any and all persons whomsoever
lawfully claiming or to claim the same or any part thereof, subject only to the
Permitted Encumbrances and the provisions of this Sublease.

         8.3         Recording.  Duke Energy and TEPPCO shall execute,
acknowledge, deliver and record a "short form" memorandum of this Sublease in
the form of Exhibit B attached hereto and made a part hereof for all purposes.
Promptly upon request by Duke Energy at any time following the expiration or
earlier termination of this Sublease, however such termination may be brought
about, TEPPCO shall execute and deliver to Duke Energy an instrument, in
recordable form, evidencing the termination of this Sublease and the release by
TEPPCO of all of TEPPCO's right, title and interest in and to the Premises
existing under and by virtue of this Sublease.

         8.4         Notice.  All notices, requests, demands and other
communications required or permitted to be given under this Sublease 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:





                                      -6-
<PAGE>   183


                     If to Duke Energy:

                          Duke Energy Field Services, Inc.
                          370 - 17th Street, Suite 900
                          Denver, Colorado 80202
                          Attention:  President
                          Telephone:  (303) 595-3331
                          Facsimile:  (303) 893-2613

                     and copy to:

                          Duke Energy Field Services, Inc.
                          370 - 17th Street, Suite 900
                          Denver, Colorado 80202
                          Attention: General Counsel
                          Telephone:  (303) 595-3331
                          Facsimile:  (303) 893-8913

                     If to TEPPCO:

                          TEPPCO Colorado, LLC
                          2929 Allen Parkway, Suite 3200
                          Houston, Texas  77019
                          Attention:  President
                          Telephone:  (713) 759-3636
                          Facsimile:  (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:  (713) 759-3645

         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 8.4.  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.





                                      -7-
<PAGE>   184
         8.5         Waiver.  No course of dealing and no delay on the part of
either Party in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such Party's rights, powers or remedies.  No
term or condition of this Sublease shall be deemed to have been waived nor
shall there be any estoppel to enforce any provision of this Sublease except by
written instrument of the Parties charged with such waiver or estoppel.  The
waiver of any breach of any term, condition or provision of this Sublease shall
not be construed as a waiver of any prior, concurrent or subsequent breach of
the same or any other term, condition or provision hereof.

         8.6         Entire Agreement.  The Project Agreements and any related
documents between the Parties of even date herewith, including exhibits and
schedules attached thereto, constitute the final and entire agreement between
the Parties concerning the subject matter thereof, and supersedes all prior and
contemporaneous agreements and undertakings of the Parties in connection
therewith.  The Project Agreements may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the Parties.  There are
no oral agreements between the Parties.

         8.7         Successors and Assigns.  Assignment provisions pertaining
to this Sublease are set forth in the O&M Agreement.

         8.8         Conflicts.  In the event of any conflict between the
provisions of this Sublease and any exhibits or schedules attached hereto, the
provisions of this Sublease shall prevail.

         8.9         Laws and Regulations.  This Sublease and the performance
hereof shall be subject to all valid and applicable federal and state laws and
to the valid and applicable orders, laws, rules, and regulations of any state
or federal authority having jurisdiction, but nothing contained herein shall be
construed as a waiver of any right to question or contest any such order, law,
rule, or regulation in any forum having jurisdiction.

         8.10        Severability.  The invalidity or unenforceability of any
provision of this Sublease shall in no way affect the validity or
enforceability of any other provision hereof.

         8.11        Time of Essence.  Time is of the essence in the
performance of all obligations falling due hereunder.

         8.12        Captions.  The headings to Articles, Sections and other
subdivisions of this Sublease are inserted for convenience of reference only
and will not affect the meaning or interpretation of this Sublease.

         8.13        Schedules and Exhibits.  All schedules and exhibits hereto
which are referred to herein are hereby made a part hereof and incorporated
herein by such reference.

         8.14        No Partnership.  The relationship between Duke Energy and
TEPPCO at all times shall not be deemed a partnership or joint venture.





                                      -8-
<PAGE>   185
         8.15        No Third Party Beneficiaries.  Subject to the provisions
of Section 8.7 hereof, this Sublease inures to the sole and exclusive benefit
of Duke Energy and TEPPCO, their respective successors, legal representatives
and assigns, and confers no benefit on any third party.

         8.16        Mutual Cooperation; Further Assurances.  Upon request by
either Party from time to time during the term of this Sublease, each Party
agrees to execute and deliver all such other and additional instruments,
notices and other documents and do all such other acts and things as may be
necessary to carry out the purposes of this Sublease and to more fully assure
the Parties' rights and interests provided for hereunder.  Duke Energy and
TEPPCO each agree to cooperate with the other on all matters relating to
required permits and regulatory compliance by either Duke Energy or TEPPCO in
respect of the Premises.

         8.17        Survival.  Survival provisions pertaining to this Sublease
are set forth in the O&M Agreement.

         8.18        Other Project Agreements.  In the event of any conflict
between the provisions of any of the Project Agreements with each other or with
the Purchase Agreement, the provisions of the O&M Agreement shall control over
the inconsistent provisions of any of the other Project Documents or the
Purchase Agreement.

         8.19        Amendments; Changes; Modifications.  This Sublease may not
be effectively amended, changed, modified, altered or terminated, except as
provided herein, without the written consent of the Parties and such consent
shall be effective only in the specific instance and for the specific purpose
for which it is given.

         The parties hereto have executed this Sublease to be effective as of
the day first hereinabove written.



                                     DUKE ENERGY:
                                     

                                     DUKE ENERGY FIELD SERVICES, INC.


                                     By:  
                                        ---------------------------------------
                                     Name:
                                          -------------------------------------
                                     Title:
                                           ------------------------------------



[Signatures continued on page 10]





                                      -9-
<PAGE>   186


                                     TEPPCO:
                                     

                                     TEPPCO COLORADO, LLC


                                     By:   
                                        ---------------------------------------
                                     Name: 
                                          -------------------------------------
                                     Title:
                                           ------------------------------------






                                      -10-
<PAGE>   187
                                   EXHIBIT A

                                    PREMISES


A portion of the Southwest Quarter (SW1/4) of Section 34 (Sec. 34), Township
Two North (T2N), Range Sixty Seven (R67W) West of the Sixth Principal Meridian
(6th P.M.), County of Weld, State of Colorado, more particularly described as
follows:

Commencing at the Southwest corner (SW Crn) of said Section 34 and assuming the
West line of said section as bearing North 00(degrees)00'00" East with all
other bearings contained herein relative thereto;
Thence North 00(degrees)00'00" East a distance of 232.9 feet;
Thence North 90(degrees)00'00" East a distance of 455.67 feet to the True Point
of Beginning;

Thence North 00(degrees)30'50" West a distance of 16.84 feet;
Thence North 89(degrees)26'35" East a distance of 20.39 feet;
Thence North 00(degrees)36'48" West a distance of 71.37 feet;
Thence North 89(degrees)44'50" East a distance of 63.22 feet;
Thence South 00(degrees)11'42" East a distance of 88.39 feet;
Thence South 89(degrees)47'50" West a distance of 82.92 feet back to the True
Point of Beginning;

Containing 5,906 square feet (0.136 acres), more or less.


[SEAL]


/s/ KENNETH A. PERRY                         4-6-98
-------------------------------------------------------
Kenneth A. Perry, P.L.S. 25961                Date
For and on behalf of Henkels & McCoy, Inc.
<PAGE>   188
                                   EXHIBIT B


                        MEMORANDUM OF SUBLEASE AGREEMENT


         THIS MEMORANDUM OF SUBLEASE AGREEMENT (this "Memorandum") is made and
entered into this 21st day of April, 1998, but effective 11:59 p.m. (Denver,
Colorado time) on the 31st day of March 1998 (the "Effective Date"), by and
between Duke Energy Field Services, Inc., a Colorado corporation ("Duke
Energy") and TEPPCO Colorado, LLC, a Delaware limited liability company
("TEPPCO").  Each of TEPPCO and Duke Energy are sometimes referred to
individually as a "Party" and collectively as the "Parties."

         WHEREAS, Duke Energy and TEPPCO entered into that certain Sublease
Agreement on April 21, 1998, but effective as of the Effective Date (the
"Agreement"); and

         WHEREAS, any capitalized term used but not defined in this Memorandum
shall have the meaning ascribed to such term in the Agreement;

         WHEREAS, the Parties desire to file this Memorandum of record in the
real property records of Weld County, Colorado, to give notice of the existence
of the Agreement and certain provisions contained therein;

         NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

         1.      Notice.  Notice is hereby given of the existence of the
Agreement and certain provisions contained therein which are summarized in
Sections 2 and 3 below.

         2.      Certain Defined Terms.  Unless the context otherwise requires,
the following terms shall have the respective meanings set forth in this
Section 2:

         A.      "Sickler Lease" means that certain Lease dated December 9,
                 1977, by and between Sheldon R. Sickler and Anna Mae Sickler,
                 as "lessor," and Amoco Production Company, as "lessee," which
                 was recorded on May 22, 1978, in Book 832 at Reception No.
                 1754168 in the real estate records of Weld County, Colorado,
                 as amended by that certain Lease Amendment dated August 28,
                 1992, by and between Anna Mae Sickler, as "lessor," and
                 Associated Natural Gas, Inc., as "lessee."

         3.      Demise of Premises and Term.  In consideration of the rents,
covenants, and agreements set forth in the Agreement and subject to the terms
and conditions of the Agreement and the Sickler Lease, Duke Energy has assigned
and subleased to TEPPCO and TEPPCO has subleased from Duke Energy, that certain
tract or parcel of land located in Weld County, Colorado, more
<PAGE>   189
particularly described on Exhibit A attached hereto and made a part hereof for
all purposes for a term commencing on March 31, 1998 at 11:59 p.m. (Denver,
Colorado time) and, unless terminated in accordance with the terms and
conditions of the Agreement, shall continue in effect for a primary term ending
March 31, 2018 at 11:59 p.m. (Denver, Colorado time), and shall continue in
effect from Year to Year thereafter; provided that either Party has the right
to terminate the Agreement effective March 31, 2018 at 11:59 p.m. or any
anniversary of such date by giving the other Party at least six (6) months
prior written notice.

         4.      No Amendment to Agreement.  This Memorandum is executed and
recorded solely for the purpose of giving notice and shall not amend nor modify
the Agreement in any way.

         5.      Further Information.  Further information concerning the
Agreement is available from either (i) Duke Energy Field Services, Inc., 370
Seventeenth Street, Suite 900, Denver, Colorado 80202 or (ii) TEPPCO Colorado,
LLC, 2929 Allen Parkway, Suite 3200, Houston, Texas 77019.

         The Parties hereto have executed this Memorandum to be effective as of
the day first hereinabove written.



                                    DUKE ENERGY:
                                    

                                    DUKE ENERGY FIELD SERVICES, INC.


                                    By:   
                                       ----------------------------------------
                                    Name: 
                                         --------------------------------------
                                    Title:
                                          -------------------------------------




                                    TEPPCO:
                                    

                                    TEPPCO COLORADO, LLC


                                    By:   
                                       ----------------------------------------
                                    Name: 
                                         --------------------------------------
                                    Title:
                                          -------------------------------------






                                      B-2
<PAGE>   190


STATE OF TEXAS                    )
                                  )
COUNTY OF HARRIS                  )

         Before me, ____________________________, a Notary Public in and for
the State of Texas, on this ______ day of April, 1998, personally appeared
________________________________, known to me to be the
________________________________ ___ of Duke Energy Field Services, Inc., a
Colorado corporation, on behalf of said corporation and acknowledged to me that
he executed this Memorandum for the considerations and purposes therein set
forth.

         Given under my hand and seal of office this ______ day of April, 1998.


                                                                       
                                -----------------------------------------------
                                Notary Public in and for the State of Texas


                                
                                -----------------------------------------------
                                Printed or Typed Name of Notary

                                My Commission Expires:
                                
                                -----------------------------------------------




STATE OF TEXAS                    )
                                  )
COUNTY OF HARRIS                  )

         Before me, ____________________________, a Notary Public in and for
the State of Texas, on this ______ day of April, 1998, personally appeared
________________________________, known to me to be the
________________________________ ___ of TEPPCO Colorado, LLC, a Delaware
limited liability company, on behalf of said limited liability company and
acknowledged to me that he executed this Memorandum for the considerations and
purposes therein set forth.

         Given under my hand and seal of office this ______ day of April, 1998.



                                                                               
                                -----------------------------------------------
                                Notary Public in and for the State of Texas

                                
                                -----------------------------------------------
                                Printed or Typed Name of Notary

                                My Commission Expires:
                                
                                -----------------------------------------------






                                      B-3