<PAGE>   1
                                                                     EXHIBIT 2-A



                   PENNZOIL EXPLORATION AND PRODUCTION COMPANY
                         PENNZOIL GAS MARKETING COMPANY
                        PENNZOIL ENERGY MARKETING COMPANY

                                       AND

                      COLUMBIA ENERGY SERVICES CORPORATION



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


                             UNIT PURCHASE AGREEMENT

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

                       Dated effective as of June 2, 1997




                          ----------------------------
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>               <C>                                                                     <C>
ARTICLE I         Purchase and Sale...................................................      1
         1.01     Transfer of Units...................................................      1
         1.02     Purchase Price......................................................      1
         1.03     Purchase Price and Pennzoil Credit Facility Adjustment Mechanism....      2
         1.04     Post-Closing Adjustments and Indebtedness...........................      3
         1.05     Accounts Receivable and Related Matters.............................      5
         1.06     The Closing.........................................................      5
         1.07     Purchase Price Allocation...........................................      5

ARTICLE II        Representations and Warranties of Pennzoil and Sellers..............      6
         2.01     Organization and Good Standing......................................      6
         2.02     Corporate Authority; Authorization of Agreement.....................      6
         2.03     The Company.........................................................      6
         2.04     No Violations.......................................................      7
         2.05     No Default; Compliance with Laws....................................      7
         2.06     Financial Statements................................................      8
         2.07     Bank, Brokerage and Trading Accounts................................      8
         2.08     Accounts Receivable; Guaranties.....................................      8
         2.09     Trade Names and Intellectual Property Rights........................      8
         2.10     Absence of Certain Changes..........................................      8
         2.11     Absence of Undisclosed Liabilities..................................      9
         2.12     Taxes...............................................................     10
         2.13     Title to Properties; Encumbrances...................................     10
         2.14     Subsidiaries........................................................     10
         2.15     Contracts, Agreements, Plans and Commitments........................     10
         2.16     Contracts and Permits...............................................     11
         2.17     Litigation..........................................................     11
         2.18     Environmental Matters...............................................     12
         2.19     Insurance Policies..................................................     12
         2.20     Employment Arrangements.............................................     12
         2.21     Labor Relations; Employees..........................................     12
         2.22     Employee Benefit Matters............................................     12
         2.23     Illegal Payments....................................................     14
         2.24     June and July Gas Sales.............................................     14
         2.25     Public Utility Holding Company......................................     14
         2.26     Books and Records...................................................     15
         2.27     Full Disclosure.....................................................     15
ARTICLE III       Representations and Warranties of Purchaser.........................     15
         3.01     Organization and Good Standing......................................     15
         3.02     Corporate Authority; Authorization of Agreement.....................     15
         3.03     No Violations.......................................................     15
</TABLE>

                                       i
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<TABLE>
<S>               <C>                                                                     <C>
         3.04     Funds Available.....................................................     16
         3.05     Litigation..........................................................     16

ARTICLE IV        Additional Agreements and Covenants.................................     16
         4.01     Covenants of Pennzoil and Sellers...................................     16
         4.02     Covenants of Purchaser..............................................     19

ARTICLE V         Conditions to Closing...............................................     20
         5.01     Conditions to the Obligations of Purchaser..........................     20
         5.02     Conditions to the Obligations of Pennzoil and Sellers...............     21

ARTICLE VI        Taxes...............................................................     22
         6.01     Tax Return..........................................................     22

ARTICLE VII       Termination.........................................................     22
         7.01     Grounds for Termination.............................................     22
         7.02     Effect of Termination...............................................     22

ARTICLE VIII      Survival of Representations and Warranties; Indemnification.........     23
         8.01     Scope of Representations of Pennzoil and Sellers....................     23
         8.02     Indemnification of Purchaser........................................     23
         8.03     Indemnification of Sellers..........................................     24
         8.04     Claims..............................................................     24
         8.05     Limitation on Indemnification.......................................     24
         8.06     Survival............................................................     25
         8.07     Tax Benefits; Insurance Proceeds....................................     25
         8.08     Exclusive Remedy....................................................     25

ARTICLE IX        Notices; Miscellaneous..............................................     25
         9.01     Notices.............................................................     25
         9.02     Brokers.............................................................     26
         9.03     Expenses............................................................     26
         9.04     Books and Records...................................................     26
         9.05     Miscellaneous.......................................................     26

Appendix A        Definitions       ..................................................    A-1
Appendix B        Gas Sales Agreement.................................................    B-1
Appendix C        Assignment and Assumption Agreement.................................    C-1
</TABLE>

Schedule 2.04     Consents, Violations, Etc.
Schedule 2.07     Banks, Brokerage Accounts and Trading Accounts
Schedule 2.08     Accounts Receivable and Guaranties
Schedule 2.09     Trade names and Intellectual Property Rights
Schedule 2.10     Changes


                                       ii
<PAGE>   4
Schedule 2.11     Undisclosed Liabilities
Schedule 2.13     Contested Ad Valorem Taxes Not Delinquent
Schedule 2.14     Subsidiaries
Schedule 2.15     Contracts
Schedule 2.16     Defaults on Contracts and Permits
Schedule 2.17     Litigation
Schedule 2.18     Environmental Claims and Environmental Conditions
Schedule 2.19     Insurance Policies
Schedule 2.20     Employment Arrangements
Schedule 2.21     Employees, Officers, Directors, Etc.
Schedule 2.22     Plans



                                      iii
<PAGE>   5
                             UNIT PURCHASE AGREEMENT


                  This UNIT PURCHASE AGREEMENT (this "Agreement"), dated
effective as of June 2, by and between, (a) on the one hand, (i) Pennzoil
Exploration and Production Company, a Delaware corporation ("Pennzoil") and,
(ii) Pennzoil Gas Marketing Company, a Delaware corporation and Pennzoil Energy
Marketing Company, a Delaware corporation ("Sellers"), and, (b) on the other
hand, Columbia Energy Services Corporation, a Kentucky corporation
("Purchaser");

                              W I T N E S S E T H:

                  WHEREAS, Sellers are the only members of PennUnion Energy
Services, L.L.C., a Delaware limited liability company (the "Company"), pursuant
to that Amended and Restated Limited Liability Company Agreement of the Company
(the "LLC Agreement") dated as of March 21, 1995;

                  WHEREAS, Sellers are the owners of 2,000 Class A Units (as
defined in the LLC Agreement) of the Company (the "Units"), which constitute all
of the Membership Interests (as defined in the LLC Agreement) in the Company;

                  WHEREAS, Purchaser desires to acquire the Units and Sellers
have agreed to sell the Units to Purchaser, upon the terms and subject to the
conditions hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions
contained herein, the parties hereto hereby agree as follows. Unless defined
elsewhere in this Agreement, all capitalized terms used herein shall have the
respective meanings given them in Appendix A hereto, which is incorporated
herein by reference and shall be deemed to be a part of this Agreement for all
purposes.

                                    ARTICLE I

                                Purchase and Sale

         I.1 Transfer of Units. Upon the terms and subject to the conditions of
this Agreement, at the Closing, Sellers will sell and assign the Units and
deliver to Purchaser (and/or Purchaser's designees) certificates representing
the Units, duly registered in Purchaser's (and/or Purchaser's designees) name,
against receipt of payment for such Units as provided in Section 1.02.

         I.2 Purchase Price. Upon the terms and subject to the conditions of
this Agreement, at the Closing, Purchaser will purchase the Units for
$14,750,000 (the "Purchase Price"), subject
<PAGE>   6
to the adjustments provided in Sections 1.03 and 1.04. The Purchase Price shall
be paid to Sellers at the Closing by wire transfer in federal or other
immediately available funds in the amounts and to the accounts to be specified
by Sellers at least two business days prior to the Closing.

         I.3 Purchase Price and Pennzoil Credit Facility Adjustment Mechanism.





                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

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                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

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         I.4 Post-Closing Adjustments and Indebtedness.





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                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

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<PAGE>   8



                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

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                  (f) Within 15 days after the earlier of (i) the expiration of
         Sellers' 30-day review and audit period without delivery of a notice of
         disagreement or (ii) the date on which the parties or the Accounting
         Arbitrator, as applicable, finally determines the disputed matters,
         Purchaser, Sellers and Pennzoil shall make the following adjustments to
         the Purchase Price and the Pennzoil Credit Facility:



                                       4
<PAGE>   9
                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************







         I.5 Accounts Receivable and Related Matters. At Closing, the Company
shall execute and deliver one or more assignments in favor of Sellers of all
rights to the Olympic Receivable and Olympic Payable and gas imbalances related
to the Carthage Plant pursuant to an Assignment and Assumption Agreement in the
form of Appendix C. At the time of the payment pursuant to Section 1.04(f), all
of the Remaining Accounts Receivable and the Remaining Accounts Payable shall be
assigned to Seller pursuant to an Assignment and Assumption Agreement in the
form of Appendix C attached hereto. Purchaser shall use the same efforts during
the 180 day period to collect the Actual Accounts Receivable that Purchaser uses
to collect Purchaser's other accounts receivable; provided, however, Purchaser
shall be under no obligation to initiate any legal proceedings to collect the
Actual Accounts Receivable.

         I.6 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Baker & Botts,
L.L.P., One Shell Plaza, 910 Louisiana, Houston, Texas on or before June 30,
1997 or at such other time and place as the parties may mutually agree following
satisfaction of the conditions precedent as outlined in Sections 5.01 and 5.02.

         I.7 Purchase Price Allocation. The Purchase Price, as adjusted, and the
liabilities of the Company as of the Closing Date, including the Pennzoil Credit
Facility, shall be allocated among the assets represented by the Units in
accordance with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury regulations thereunder. Such allocation shall be
jointly established by Purchaser and Sellers and shall be attached to the
Agreement as Schedule 1.07 at Closing. Schedule 1.07 shall be based on the most
currently available financial statements of the Company and shall be adjusted,
if necessary, by Purchaser and Sellers to reflect the Purchase Price, as
adjusted by application of Sections 1.03 and 1.04, and Actual Closing Financial
Statements, once they have been determined. Such adjusted Schedule 1.07 shall be
delivered to Sellers in accordance with the notice provisions of Section 9.01.
The allocations will be used by Purchaser and Sellers as the basis for reporting
asset values and other items for purposes of all required returns, statements
and reports with respect to taxes,


                                       5
<PAGE>   10
including any reports required to be filed under Section 1060(b) of the Code and
the Treasury regulations promulgated thereunder. Sellers and Purchaser agree not
to assert, in connection with any audit or other proceeding with respect to
taxes, any asset values or other items inconsistent with the allocations set
forth in Schedule 1.07.

                                   ARTICLE II

             Representations and Warranties of Pennzoil and Sellers

                  Except as otherwise provided for or disclosed in this
Agreement or in the Schedules attached hereto, Pennzoil and Sellers hereby
represent and warrant to Purchaser that:

         II.1 Organization and Good Standing. Each Seller and the Company is a
corporation or a limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or formation, and each has all requisite power and
authority to own and lease the properties and assets it currently owns and
leases and to carry on its business as such business is currently conducted. The
Company is duly licensed or qualified to do business as a limited liability
company and is in good standing in all jurisdictions in which the character of
the properties and assets now owned or leased by it or the nature of the
business now conducted by it requires it to be so licensed or qualified except
where the failure so to qualify or to be so licensed would not reasonably be
expected to have a Material Adverse Effect.

         II.2 Corporate Authority; Authorization of Agreement. Pennzoil and each
Seller has all requisite corporate power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform all the terms and conditions hereof to be performed by it. The execution
and delivery of this Agreement by Pennzoil and each Seller, the performance by
Pennzoil and each Seller of all the terms and conditions hereof to be performed
by it and the consummation of the transactions contemplated hereby have been
duly authorized and approved by the Board of Directors of Pennzoil and each
Seller. This Agreement has been duly executed and delivered by Pennzoil and each
Seller and constitutes the valid and binding obligation of Pennzoil and each
Seller, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         II.3 The Company. The authorized membership interests of the Company
consist solely of 2,000 Class A Units, all of which are issued and outstanding
on the date hereof. Sellers own beneficially and of record the Units, free and
clear of all liens, charges, encumbrances, rights of others, mortgages, pledges
or security interests. There are no outstanding subscriptions, options,
convertible securities, warrants or calls of any kind issued or granted by or
binding upon Sellers or the Company to purchase or otherwise acquire any
security of or membership interest in the Company.



                                       6
<PAGE>   11
         II.4 No Violations. Except as set forth on Schedule 2.04, this
Agreement and the execution and delivery hereof by Sellers does not, and the
fulfillment and compliance with the terms and conditions hereof and the
consummation of the transactions contemplated hereby, will not:

                  (a) conflict with, or require the consent of any Person under,
         any of the terms, conditions or provisions of the charter or bylaws or
         other organizational documents of any of Sellers or the Company;

                  (b) violate any provision of, or require any filing, consent,
         authorization or approval under, any Legal Requirement applicable to or
         binding upon Sellers or the Company (assuming receipt of all routine
         governmental consents typically received after consummation of
         transactions of the nature contemplated by this Agreement);

                  (c) conflict with, result in a breach of, constitute a default
         under (without regard to requirements of notice or the lapse of time or
         both), accelerate or permit the acceleration of the performance
         required by, or require any consent, authorization or approval under,
         (i) any mortgage, indenture, loan, credit agreement or other agreement
         or instrument evidencing indebtedness for borrowed money to which any
         of Sellers or the Company is a party or by which any of Sellers or the
         Company is bound or to which any of their respective properties is
         subject or (ii) any lease, license, contract or other agreement or
         instrument to which any of Sellers or the Company is a party or by
         which any of them is bound or to which any of their respective
         properties is subject; or

                  (d) result in the creation or imposition of any lien, charge
         or other encumbrance upon the assets of the Company or upon the Units,

which violation, breach or encumbrance with respect to the matters specified in
clauses (c) through (d) of this Section 2.04 might reasonably be expected to
have a Material Adverse Effect.

         II.5 No Default; Compliance with Laws. To the best of their knowledge:

                  (a) the Company is not in default under, and no condition
         exists that with notice or lapse of time or both would constitute a
         default under, (i) any mortgage, indenture, loan, credit agreement or
         other agreement or instrument evidencing indebtedness for borrowed
         money to which the Company is a party or by which the Company is bound
         or to which any of its properties is subject, (ii) any order, judgment
         or decree of any Governmental Authority or (iii) any other agreement,
         contract, lease, license or other instrument, which default or
         potential default might reasonably be expected to have a Material
         Adverse Effect; and

                  (b) the Company is in compliance with all Legal Requirements
         applicable to


                                       7
<PAGE>   12
         its business and operations, noncompliance with which might reasonably
         be expected to have a Material Adverse Effect;

         II.6 Financial Statements. Sellers have heretofore delivered to
Purchaser true and complete copies of the unaudited financial statements of the
Company as of and for the period ended March 31, 1997 (including a balance
sheet, a statement of income, a statement of cash flows and any notes and
schedules thereto) (the "Financial Statements"). The Financial Statements are
true and complete in all material respects; have been prepared from the books
and records of the Company; have been prepared in accordance with generally
accepted accounting principles that have been consistently applied by the
Company throughout the periods indicated; and fairly represent the financial
position of the Company as at the date thereof and the results of its operations
for the period then ended.

         II.7 Bank, Brokerage and Trading Accounts. Schedule 2.07 sets forth a
complete and correct listing of names and addresses of all banks or other
financial institutions in which Company has bank accounts, brokerage accounts,
deposit or safe-deposit boxes, with the names of all persons authorized to draw
on these accounts or deposits or to these boxes.

         II.8 Accounts Receivable; Guaranties. Schedule 2.08 sets forth a
complete and accurate schedule of (a) the accounts receivable and accounts
receivable - owner, and accounts payable of Company as of April 30, 1997, (b)
gas in storage and gas imbalances to Sellers and Company's knowledge as of April
30, 1997, and (c) Guaranties given by Pennzoil or the Sellers and/or received by
the Company as of the date hereof, together with an accurate aging of such
accounts receivable and accounts payable. These accounts receivable and accounts
payable, and all accounts receivable and accounts payable of Company created
after such date, arose from valid purchases and sales in the ordinary course of
business. To the knowledge of Sellers, except as set forth on Schedule 2.08, all
accounts receivable are collectible at their full amounts without any defense or
right of set off or counterclaim.

         II.9 Trade Names and Intellectual Property Rights. Schedule 2.09 sets
forth all patents, trade names, trademarks, service marks and copyrights and
their registrations, owned by Company or in which it has any rights or licenses,
together with a brief description of each. Company has not infringed, and is not
now infringing, on any trade name, trademark, patent service mark, copyright or
other intellectual property rights belonging to any other person, firm or
corporation. Except as set forth in Schedule 2.09, the Company is not a party to
any license, agreement or arrangement, whether licensor, licensee, or otherwise,
with respect to any patents, trademarks, service marks, trade names or
applications for them, or any copyrights. Company owns, or holds adequate
licenses or other rights to use, all patents, trademarks, service marks, trade
names and copyrights and other intellectual property rights necessary for the
conduct of its businesses as presently conducted. All such licenses and other
rights to use are freely assignable or otherwise transferable, without any fees,
assessments or third party consents following consummation of the transactions
contemplated by this Agreement.



                                       8
<PAGE>   13
         II.10 Absence of Certain Changes. Except as indicated in Schedule 2.10,
since May 8, 1997, there has not been:

                  (a) any material adverse change in the business, financial
         condition or results of operations of the Company taken as a whole,
         including the departure of full-time Company employees necessary to
         carry out each operation of the Company, which change was not the
         result of an industry-wide development affecting other companies in the
         natural gas marketing industry;

                  (b) any damage, destruction or loss to or of any material
         properties of the Company, whether or not covered by insurance, that
         has had, or might reasonably be expected to have, a Material Adverse
         Effect;

                  (c) any issuance or attempted issuance by the Company of any
         Units;

                  (d) any sale, lease or other disposition of properties and
         assets of the Company other than in the ordinary course of business;

                  (e) any merger or consolidation of the Company with any other
         Person or any acquisition by the Company of the stock or business of
         another Person;

                  (f) any borrowing of, or agreement to borrow, funds by the
         Company;

                  (g) any mortgage, pledge or grant of a lien or security
         interest in any property of the Company, other than in the ordinary
         course of business (except any such encumbrance that will be released
         at or before the Closing);

                  (h) any loan by the Company to any Person, other than accounts
         receivable for goods furnished or services rendered which are payable
         in accordance with customary terms, or guaranty by the Company of any
         loan;

                  (i) any written waiver or release of any material right or
         claim of the Company;

                  (j) any increase in the salary or other compensation payable
to or to become payable by the Company to any of its officers, managers,
employees, or the declaration, payment, commitment or obligation of any kind for
the payment of any bonus, award, severance or other salary or compensation to
any Person other than the vesting of employees' benefits under the Company's
qualified plans; or

                  (k) any contract or commitment to do any of the foregoing.

         II.11 Absence of Undisclosed Liabilities. To the knowledge of Sellers,
except as set



                                       9
<PAGE>   14
forth in Schedule 2.11, the Company has no debt, liens, charges, assessments,
demands, liabilities, or obligations of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
or reserved against in the Financial Statements.

         II.12 Taxes. Sellers have (or will have by the Closing Date) caused to
be timely filed with the appropriate Governmental Authorities all Tax Returns,
information returns or statements and reports required to be filed on or before
the Closing Date by or with respect to the Company which, if not so filed, would
have a Material Adverse Effect, and have (or will have by the Closing Date)
caused to be paid or deposited or made adequate provision for the payment of all
Taxes shown to be due on such returns or reports. Sellers have not received and
have no knowledge of any notice of deficiency, statutory notice of deficiency or
notice of partnership administrative proceedings or proposed deficiency or
assessment with respect to the Company or any of its properties from any taxing
authority, and there are no outstanding agreements or waivers by or with respect
to the Company that extend the statutory period of limitations applicable to any
federal, foreign, state or local income or franchise tax returns for any period.
For federal income tax purposes, the Company is characterized as a partnership
and not as an association taxable as a corporation pursuant to Treas. Reg.
Section 301.7701-2. The Company has taken the position on all of its federal
income Tax Returns that it is a partnership. There are no present disputes as to
taxes of any nature payable by Company. The Company is not and will not be
liable for any claim for taxes of the Sellers or any member of any affiliated or
consolidated group of which either Seller is a member.

         II.13 Title to Properties; Encumbrances. The Company has good title to
all the properties and assets (whether real, personal or mixed and whether
tangible or intangible) that it purports to own, including all of the properties
and assets reflected in the Financial Statements (except for assets held under
capitalized leases and personal property sold since the date of the Financial
Statements in the ordinary course of business and consistent with past
practice), and all of the properties and assets purchased or otherwise acquired
by the Company since the date of the Financial Statements (except for personal
property acquired and sold since the date of the Financial Statements in the
ordinary course of business and consistent with past practice). All Material
Properties and assets reflected in the Financial Statements are free and clear
of all Encumbrances other than Permitted Encumbrances. As used herein, the term
"Permitted Encumbrances" means (a) liens for current taxes or securing payments
to mechanics and materialmen that are not yet delinquent or are being contested,
as set forth in Schedule 2.13, in good faith in the ordinary course of business,
and (b) with respect to real property, (i) minor imperfections of title, if any,
none of which is substantial in amount, materially detracts from the value or
impairs the use of the property subject thereto, or impairs the operations of
the Company, (ii) Legal Requirements that do not impair the present or
anticipated use of the property subject thereto, and (iii) utility and similar
easements and rights of way which, individually and in the aggregate, do not
materially interfere with the use of such real property in the business of the
Company.



                                       10
<PAGE>   15
         II.14 Subsidiaries. Except as set forth in Schedule 2.14, the Company
does not own, directly or indirectly, any interest or investment (whether equity
or debt) in any corporation, partnership, business, trust, or other entity.

         II.15 Contracts, Agreements, Plans and Commitments. Schedule 2.15
includes a list of the following contracts, leases, licenses, agreements, plans
and commitments to which the Company is a party or by which the Company or any
of its material properties is bound (the "Contracts"):

                  (a) any contract, commitment or agreement that involves
         expenditures by the Company of more than $10,000 per year, other than
         (i) contracts, commitments or agreements listed pursuant to other
         clauses of this Section 2.15 or 2.19 and (ii) contracts, commitments or
         agreements entered into in the ordinary course of business, which
         collectively involve expenditures by the Company of less than $10,000
         per year;

                  (b) any indenture, trust agreement, loan agreement or note
         under which the Company has outstanding indebtedness, obligations or
         liabilities for borrowed money;

                  (c) any lease, sublease, installment purchase or similar
         arrangement for the use or occupancy of real property that involves
         aggregate expenditures by the Company of more than $50,000 per year,
         together with a list of the location of such leased property, the date
         of termination of such arrangements, the name of the other party and
         the annual rental payments required to be made for such arrangements;

                  (d) any agreement of surety, guaranty or indemnification by
         the Company other than indemnification of managers and officers as
         provided for in the Company's organization documents and guarantees
         resulting from the endorsement, in the ordinary course of business, of
         negotiable instruments for deposit or collection; and

                  (e) any written contract or agreement with either Sellers or
         any Affiliate of either Seller relating to the provision of goods or
         services.

         II.16 Contracts and Permits. Each Contract and each license and permit
issued to the Company by any Governmental Authority is valid and binding upon
each party thereto and is in full force and effect according to its terms, and
there have been no amendments, modifications or supplements thereto other than
in the ordinary course of business or such as are specifically described on
Schedule 2.16. To the knowledge of Sellers, except as set forth on Schedule
2.16, there is no default or claim of default under any such Contract, license
or permit and no event has occurred which, with the passage of time or the
giving of notice (or both), would constitute a default by the Company, or any
other party thereto, under any such Contract, license or permit, or would permit
modifications, acceleration or termination of any such Contract, license or
permit, or result in the creation of any lien or encumbrance on any of the
assets of the Company. Except as indicated on Schedule 2.16, none of the
permits, licenses or Contracts will require the consent of or notice to any
person thereto with respect to any of the transactions contemplated hereby. None
of the licenses or permits requires the payments of any further fees before
Closing except as listed on Schedule 2.16, nor do any facts or circumstances
exist which would indicate



                                       11
<PAGE>   16
that the Company will not be entitled to renew any license or permit upon its
expiration or would be required to pay an extraordinary fee or change in
connection therewith. Except for the licenses or permits listed on Schedule
2.16, no other permit is required for the operation of the properties or
businesses of the Company as presently conducted.

         II.17 Litigation.

                  (a) Except as set forth in Schedule 2.17, there is no action,
         suit or proceeding pending or, to the knowledge of Pennzoil or Sellers,
         threatened against the Company or any of its properties or assets.

                  (b) The Company has not been charged with a violation of, or,
         to the knowledge of Sellers, threatened with a charge of a violation
         of, any Legal Requirement relating to any aspect of its business, which
         violation might reasonably be expected to have a Material Adverse
         Effect.

         II.18 Environmental Matters. Except as specified in Schedule 2.18,
there is no material Environmental Claim or environmental condition with respect
to the properties and assets of the Company or resulting from the operation
thereof.

         II.19 Insurance Policies. Schedule 2.19 hereto sets forth a list of all
material insurance policies, including directors' and officers' liability
policies, by which the Company or any of its properties or assets are covered
against present losses, all of which are now in full force and effect. All these
policies are in the respective principal amounts set forth in Schedule 2.19.

         II.20 Employment Arrangements. Schedule 2.20 attaches a correct and
current list of all contracts with respect to employment and collective
bargaining agreements, to which Company is a party or by which Company is bound;
all these contracts and agreements are in full force and effect, and neither
Company nor, to the knowledge of Sellers, any other party is in default under
any of them.

         II.21 Labor Relations; Employees. Company has paid all salaries, wages,
bonuses and severance, accrued to the present to or for the benefit of its past
and/or present employees and has complied in all respects with all applicable
legal requirements relating to the employment of labor, including those relating
to wages, hours, collective bargaining and the payment and withholding of taxes,
and has withheld and paid to the appropriate governmental authority, or is
holding for payment not yet due to such authority, all amounts required by law
or agreement to be withheld from the wages or salaries of such employees. A
complete and correct list of the names and addresses of all officers, managers,
employees and agents (who are individuals) of Company (and its subsidiaries),
stating the rates of compensation payable to each is set forth in Schedule 2.21.

         II.22 Employee Benefit Matters.

                  (a) Each Plan is listed on Schedule 2.22 hereto. No Plan is or
         has been (A) covered by Title IV of ERISA, (B) a "multi-employer plan"
         as defined in Section 3(37) of ERISA or (D) a voluntary employees'
         beneficiary association within the meaning of Code Section 501(c)(9).
         Each Plan intended to be qualified under Section 401(a) of


                                       12
<PAGE>   17
         the Code is designated as a tax-qualified plan on Schedule 2.22 and is
         so qualified.

                  (b) Sellers have heretofore delivered to Purchaser true and
         correct copies of the following:

                         (i) each written Plan and all amendments thereto as of
                  the date hereof;

                         (ii) a complete description of each other Plan;

                         (iii) all current summary plan descriptions provided to
                  employees regarding the Plans;

                         (iv) the most recent determination letter issued by the
                  Internal Revenue Service with respect to any Plan qualified
                  under Section 401(a) of the Code;

                         (v) the trust agreement or other funding arrangement
                  for each Plan; and

                         (vi)  all contracts or agreements related to each Plan.

                  (c) Except as set forth on Schedule 2.22, each Plan and
         related trust as in effect on the date hereof is, to the extent
         applicable, a duly qualified plan and trust under Section 401 and
         501(a), respectively, of the Code; a favorable determination letter has
         been received from the Internal Revenue Service with respect to each
         such plan and trust; there have been no amendments to the respective
         plan or trust since the date of such determination letter and no
         actions have been taken which would adversely affect such
         qualification.

                  (d) Each Plan and each funding medium which may be attendant
         thereto, including group annuity contracts, has been in all material
         respects operated and administered in accordance with its provisions
         and applicable legal requirements.

                  (e) At or prior to the Closing Date, there will have been
         contributed to each Plan not less than the greater of the amounts
         required pursuant to any applicable union contracts or such amounts
         necessary to comply with the minimum funding standards of Section 412
         of the Code, as the case may be, for all plan years prior to the
         current plan year;

                  (f) As of the Closing Date, the fair market value of assets
         under each Plan will be sufficient to satisfy the liability to
         participants thereunder for benefits accrued through the Closing Date.

                  (g) The Company has made or will have made prior to the
         Closing Date all other contributions or payments required to be paid or
         accrued with respect to such Plan.

                  (h) Other than routine claims or obligations for benefits or
         payments under the Plans in the ordinary course of business, there are
         no actions, suits or claims pending or, to the knowledge of the Company
         threatened against any Plan or any of its assets, and the Company has
         no knowledge of any facts which could give rise to any such actions,
         suits


                                       13
<PAGE>   18
         or claims which if adversely determined would be expected to have a
         material adverse effect on the financial position of any Plan or, to
         the extent applicable, qualified status under the Code or ERISA of any
         Plan.

                  (i) The Company and its respective affiliates, directors,
         officers, representatives and employees have not, with respect to the
         Plans, engaged in any "prohibited transaction" (as such term is defined
         in the Code and ERISA) which has not been exempted under the statutory
         as opposed to administrative provisions of Section 408 of ERISA, and to
         the knowledge of Sellers no such Plan, related trust, trustee,
         administrator or other "party-in-interest" (as defined in ERISA) has
         engaged in any transactions, directly or indirectly, to which
         prohibited transaction, sanctions, taxes or penalties may be imposed
         under the Code or ERISA.

                  (j) The Company and its respective directors, officers,
         representatives and employees, and, to the best of Seller's knowledge,
         any other "fiduciary" (as defined in ERISA), has not, with respect to
         any Plan, committed any breach of fiduciary responsibility imposed by
         ERISA or any other applicable Law which could subject the Company or
         any of its respective directors or officers to liability under ERISA or
         any Legal Requirements.

                  (k) The Company and its subsidiaries do not have any leased
         employees within the meaning of Code Section 414(n).

                  (l) Except for continuation coverage provided pursuant to Code
         Section 4980B, no Plan provides any medical or other welfare benefit
         plan coverage beyond termination of employment and there is no
         obligation to do so.

                  (m) The Company will not have on or after the Closing any
         liability, obligation or responsibility for any Plan (except as to its
         severance plan referred to in Section 4.02(d)), or for any other
         employee benefit or compensation plan, agreement or arrangement
         maintained, sponsored or contributed to by the Company or by any trade
         or business, whether or not incorporated, which is a member of a
         control group of companies or is otherwise treated with the Company as
         a single employer within the meaning of ERISA Section 4001 or Code
         Section 414.

         II.23 Illegal Payments. Neither Sellers, Company, or to the best
knowledge of Sellers and Company have any of their respective Affiliates,
managers, officers, agents, unitholder or employees:

                  (a) made or has agreed to make any contributions, payments, or
         gifts of funds or property through any governmental official, employee
         or agent where either the payment or purpose of such contribution,
         payment or gift was or is illegal under the laws of the United States,
         or any state thereof, or any other jurisdiction (foreign or domestic);

                  (b) established or maintained any unrecorded fund or asset for
         any purpose, or has made any false or artificial entries on any of its
         books or records for any reason; or

                  (c) made or had agreed to make any contribution or
         expenditure, or has


                                       14
<PAGE>   19
         reimbursed any political gift or contribution or any expenditure made
         by any other person to candidates for public office, whether federal,
         state or local (foreign or domestic) where such contributions were or
         would be in violation of applicable Legal Requirement.

         II.24 June and July Gas Sales. All gas purchased by the Company from
Pennzoil during the month of June and July 1997 will be purchased on the
financial terms and conditions set forth in the Gas Sales Agreement attached as
Appendix B hereto.

         II.25 Public Utility Holding Company. The Company does not own or
operate any facilities used for the retail distribution of natural or
manufactured gas for heat, light or power, nor does the Company, directly or
indirectly, own, control or hold with power to vote 10% or more of the
outstanding stock of, or exercise direct or indirect controlling influence over
the management or policies of, such a company or a company so controlling such a
company.

         II.26 Books and Records. To their knowledge, all existing records of
every type and description of the Company and that are in the possession of
Pennzoil or Sellers are, or shall prior to the Closing Date be, located in the
offices of the Company. The books and records of Company accurately reflect in
all material respects the business, financial condition and result of operations
of Company and have been maintained in all material respects in accordance with
good business and bookkeeping practices.

         II.27 Full Disclosure. Except as set forth in the letter dated May 7,
1997, from the Company to Purchaser, none of the representations and warranties
made by Pennzoil or Sellers, or made in any certificate, document, instrument or
other writing furnished or to be furnished by Pennzoil, Sellers or Company or on
any of their behalf, contain or will contain any untrue statement of material
fact, or omit any material fact the omission of which would be misleading.

                                   ARTICLE III

                   Representations and Warranties of Purchaser

                  Except as otherwise provided for or disclosed in this
Agreement or in the Schedules attached hereto, Purchaser hereby represents and
warrants to Sellers that:

         III.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.

         III.2 Corporate Authority; Authorization of Agreement. Purchaser has
all requisite corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform all
the terms and conditions hereof to be performed by it. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of all the
terms and conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized and approved by the
Board of Directors of Purchaser. This Agreement has been duly executed and
delivered by Purchaser and constitutes the valid and binding obligation of
Purchaser, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws relating
to or affecting the enforcement of creditors' rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at



                                       15
<PAGE>   20
law).

         III.3 No Violations. This Agreement and the execution and delivery
hereof by Purchaser do not, and the fulfillment and compliance with the terms
and conditions hereof and the consummation of the transactions contemplated
hereby will not:

                  (a) conflict with, or require the consent of any Person under,
         any of the terms, conditions or provisions of the certificate of
         incorporation or bylaws of Purchaser;

                  (b) violate any provision of, or require any filing, consent,
         authorization or approval under, any Legal Requirement applicable to or
         binding upon Purchaser (assuming receipt of all routine governmental
         consents typically received after consummation of transactions of the
         nature contemplated by this Agreement);

                  (c) conflict with, result in a breach of, constitute a default
         under (without regard to requirements of notice or the lapse of time or
         both), accelerate or permit the acceleration of the performance
         required by, or require any consent, authorization or approval under,
         (i) any mortgage, indenture, loan, credit agreement or other agreement
         or instrument evidencing indebtedness for borrowed money to which
         Purchaser is a party or by which Purchaser is bound or to which any of
         its properties is subject or (ii) any lease, license, contract or other
         agreement or instrument to which Purchaser is a party or by which it is
         bound or to which any of its properties is subject; or

                  (d) result in the creation or imposition of any lien, charge
         or other encumbrance upon the assets of Purchaser;

which violation, breach or encumbrance with respect to the matters specified in
clauses (c) through (d) of this Section 3.03 might reasonably be expected to
have a Material Adverse Effect.

         III.4 Funds Available. Purchaser has, or will have prior to the Closing
Date, sufficient cash, available lines of credit or other sources of immediately
available funds to enable it to make payment of the Purchase Price at the
Closing.

         III.5 Litigation. There is no action, suit, proceeding or governmental
investigation or inquiry pending or, to the knowledge of Purchaser, threatened
against Purchaser or its subsidiaries or any of their respective properties that
might delay, prevent or hinder the consummation of the transactions contemplated
hereby.

                                  ARTICLE IV

                       Additional Agreements and Covenants


         IV.1 Covenants of Pennzoil and Sellers. Pennzoil and Sellers covenant
and agree with Purchaser that from the date of execution of this Agreement until
Closing:

                  (a) New Transactions; Consent. Sellers agree to cause Company
         to carry on its businesses and activities diligently and in
         substantially the same manner as it had


                                       16
<PAGE>   21
         previously been carried out, and shall not make agreements to any
         unusual or novel methods of manufacture, purchase, sale, lease,
         management, accounting or operation that will vary materially from
         those methods previously used by Company.

                  (b) Compliance with and Performance of Agreement and Legal
         Requirements. Sellers shall and shall cause Company to:

                         (i) perform all acts to be performed by it as
                  contemplated by this Agreement and that may be necessary to be
                  performed by it to keep this Agreement and the transactions
                  contemplated by this Agreement from (i) violating any Legal
                  Requirement, or (ii) resulting in the creation of any lien,
                  charge or encumbrance upon any of the properties and assets of
                  the Company;

                         (ii) refrain from taking any action that would in any
                  way prevent or invalidate the consummation of the transactions
                  contemplated by this Agreement, or that would cause or permit
                  this Agreement and the consummation of the transactions
                  contemplated by this Agreement to (a) violate any Legal
                  Requirements or the Company's policies and procedures, or (b)
                  result in the creation of any lien, charge or encumbrance upon
                  any of the properties and assets of the Company; and

                         (iii) notify Purchaser of any inaccuracy of any
                  representation or warranty contained in Article II of this
                  Agreement or the Schedules hereto promptly after receiving
                  notice of the same.

                  (c) Operation of Properties. Except as may be expressly
         permitted hereunder or as set forth in any Schedule hereto, from the
         date hereof until the Closing, without first obtaining the written
         consent of Purchaser (which consent will not be unreasonably withheld,
         conditioned or delayed), Sellers will not permit the Company to:

                         (i) waive any right of material value relating to any
                  of the properties and assets of the Company;

                         (ii) convey, encumber, mortgage, pledge or dispose of
                  properties or assets of the Company with a fair market value
                  exceeding either $50,000 or an individual basis or $50,000 in
                  the aggregate; and

                         (iii) commit itself to do any of the foregoing.

         provided, however, that nothing contained in this Section 4.01(c) or
         elsewhere in this Agreement shall limit the rights of the Company to
         operate the properties and assets of the Company in the ordinary course
         of business.

                  (d) Certain Changes. Except as may be expressly permitted by
         this Agreement or set forth in any Schedule hereto, from the date
         hereof until the Closing, without first obtaining the written consent
         of Purchaser (which consent will not be unreasonably withheld,
         conditioned or delayed), Sellers will not permit the Company to:



                                       17
<PAGE>   22
                         (i) declare or pay any distributions;

                         (ii) make any material change in the conduct of the
                  business or operations, of the Company, including, without
                  limitation, its trading activities and the payment (including
                  the timing of payments) of accounts payable of the Company;

                         (iii) except in the ordinary course of business and
                  consistent with past practices, enter into, assign, terminate
                  or amend in any material respect any contract or agreement
                  required to be disclosed pursuant to Section 2.15;

                         (iv) issue any equity interests, or repurchase, redeem
                  or otherwise acquire any such interests or make or propose to
                  make any other change in its capitalization;

                         (v) merge into or with or consolidate with any other
                  Entity or acquire all or substantially all of the business or
                  assets of any Person;

                         (vi) make any change in the LLC Agreement;

                         (vii) purchase any securities of any Person except for
                  short-term investments made in the ordinary course of business
                  consistent with past practices;

                         (viii) make or cause to be made any amendment to any
                  Plan;

                         (ix) fail to maintain the insurance policies now in
                  force with respect to the Company, its officers, managers and
                  employees (or insurance that is substantially equivalent);

                         (x) fail to perform and comply with all covenants and
                  conditions contained in the Company's contracts, leases,
                  licenses and other agreements in any material respect;

                         (xi) fail to comply, in all material respects, with the
                  legal requirements of any Governmental Authority having
                  jurisdiction over the business and operations of the Company;
                  or

                         (xii) commit itself to do any of the foregoing.

                  (e) Access. Pennzoil and Sellers will cause the Company to
         afford to Purchaser and its authorized representatives, at Purchaser's
         sole expense, risk and cost and upon reasonable notice, reasonable
         access from the date hereof until the Closing Date, during normal
         business hours, to the Company's personnel, properties, books and
         records to the extent that such access and disclosure would not
         unreasonably interfere with the normal operation of the business of the
         Company or violate the terms of any agreement by which Sellers or the
         Company is bound or any applicable Legal Requirement; provided,
         however, that the confidentiality of any data or information so




                                       18
<PAGE>   23
         acquired shall be maintained by Purchaser and its representatives in
         accordance with Section 4.02(f).

                  (f) Reasonable Efforts. Pennzoil and Sellers will use their
         respective Reasonable Efforts to obtain the satisfaction of the
         conditions to Closing set forth in Section 5.02.

                  (g) No Negotiations. Pennzoil and Sellers shall not, and shall
         not permit the Company to, solicit from any Person any proposals or
         offers, or enter into any negotiations relating to the disposition of
         all or substantially all the Company's assets or business, the
         acquisition of the Units or the merger or consolidation of the Company
         with any Entity.

                  (h) Public Announcements. Subject to applicable securities
         laws or stock exchange requirements, at all times until the Closing
         Date, Pennzoil and Sellers shall obtain the written approval of
         Purchaser before issuing, or permitting any of the directors, officers,
         employees or agents or Affiliates of Pennzoil, Sellers or the Company
         to issue, any press release with respect to this Agreement or the
         transactions contemplated hereby.

                  (i) Employee Benefit Plans and Employees. Pennzoil and Sellers
         shall, on or before the Closing Date become plan sponsors of, or
         terminate, the Company's Plans other than the Severance Pay Plan (as
         described on Schedule 2.22), and shall satisfy all obligations and
         liabilities with respect thereto, including but not limited to funding
         all contributions, maintaining a Plan to the extent necessary to
         continue its qualification under appropriate provisions of the Code or
         to otherwise comply with applicable law, and providing COBRA
         continuation benefits under Code Section 4980B for all employees whose
         initial "qualifying event" (within the meaning of Code Section 4980B)
         was on or prior to the Closing Date. Pennzoil and Sellers shall not
         take any action inconsistent with the Purchaser's intent to treat all
         employees of the Company and its subsidiaries who are employed on and
         after the Closing Date as new employees (except as the Purchaser in its
         sole discretion determines otherwise) for the purposes of the
         Purchaser's compensation and employee benefit plans. Effective at
         Closing, employees of the Company who remain in the employ of the
         Company or Purchaser shall be covered by Purchaser's health insurance
         plan.

         IV.2 Covenants of Purchaser. Purchaser covenants and agrees with
Sellers as follows:

                  (a) Reasonable Efforts. Purchaser will use its Reasonable
         Efforts to obtain the satisfaction of the conditions to Closing set
         forth in Section 5.01.

                  (b) Public Announcements. Subject to applicable securities
         laws or stock exchange requirements, at all times until the Closing
         Date, Purchaser shall obtain the written approval of Sellers before
         issuing, or permitting any of Purchaser's directors, officers,
         employees, agents or Affiliates to issue, any press release with
         respect to this Agreement or the transactions contemplated hereby.

                  (c) Tradenames. After the Closing, Purchaser and its
         Affiliates shall not use the name "PennUnion" or "Pennzoil" or any
         tradename incorporating or derivative of the


                                       19
<PAGE>   24
         name "PennUnion" or "Pennzoil," except as to notify the Company's
         customers, suppliers and business associates. Within thirty (30) days
         after the Closing, Purchaser will change the name of the Company so
         that it does not include the name "PennUnion" or "Pennzoil."

                  (d) Severance. Sellers shall be responsible for and shall pay
         to Purchaser all costs and expenses incurred pursuant to the Company's
         current Severance Pay Plan) related to the severance ________________

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         associated with severing such
         employees. Purchaser shall be responsible for, and shall indemnify
         Sellers for, any and all severance costs incurred by Sellers pursuant
         to the Company's currently effective Severance Pay Plan in excess of
         those for which Sellers are responsible as stated above. Within ten
         (10) days after receipt of the notice, Sellers shall pay to Purchaser,
         as designated by Purchaser, the severance costs and expenses associated
         with the designated employees.

                  (e) Guaranties. Seller shall maintain all Guaranties
         outstanding and Purchaser shall use its Reasonable Efforts to obtain
         from the appropriate parties and deliver to Pennzoil, within _______

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         after Closing, releases of any obligations of Pennzoil arising after
         Closing pursuant to the Guaranties and other commitments identified in
         Part III of Schedule 2.10 (the "Guaranties"). Purchaser agrees to
         indemnify and hold harmless Pennzoil from and against any and all
         claims under the Guaranties arising after Closing.

                  (f) Confidential Information. In the event that this Agreement
         is terminated or, if not terminated, until the Closing Date, the
         confidentiality of any data or information received by Purchaser
         regarding the business and assets of the Company shall be maintained by
         Purchaser and its representatives in accordance with the
         Confidentiality Agreement dated December 10, 1996 executed by
         Purchaser.


                                    ARTICLE V

                              Conditions to Closing

         V.1 Conditions to the Obligations of Purchaser. The obligations of
Purchaser to proceed with the Closing contemplated hereby are subject to the
satisfaction on or prior to the Closing Date of all of the following conditions,
any one or more of which may be waived, in whole or in part, in writing by
Purchaser:

                  (a) Compliance. Except for such breaches of representations or
         warranties by and covenants of Pennzoil and/or Sellers made herein as
         would not have a Material Adverse Effect, the representations and
         warranties made herein by Pennzoil and Sellers shall be correct on and
         as of the Closing Date as though such representations and warranties
         were made on and as of the Closing Date, and Pennzoil and Sellers shall
         have complied with all the covenants hereof required by this Agreement
         to be performed by them at or prior to the Closing Date.



                                       20
<PAGE>   25
                  (b) Consents. All consents identified on Schedule 2.04 shall
         have been received.

                  (c) Officer's Certificates. Purchaser shall have received
         certificates dated the Closing Date, of an executive officer of
         Pennzoil and each Seller certifying as to the matters specified in
         Section 5.01(a).

                  (d) No Orders. The Closing hereunder shall not violate any
         order or decree of any Governmental Authority having competent
         jurisdiction over the transactions contemplated by this Agreement;
         provided, however, that if such order or decree is a temporary
         restraining order or other ex parte order or decree and all other
         conditions precedent to Closing have been satisfied or waived, the
         Closing Date shall be extended to a date five business days subsequent
         to the date on which such temporary restraining order or other ex parte
         order or decree ceases to be in effect.

                  (e) Amendment of Pennzoil Credit Facility. Pennzoil shall have
         amended the Pennzoil Credit Facility to provide for the Facilities'
         continued existence as provided for in Section 1.03.

                  (f) Gas Sales Agreement. Pennzoil and the Company shall have
         terminated the gas sales agreement dated April 1, 1995. Pennzoil and
         the Purchaser shall have executed, delivered and closed the Gas Sales
         Agreement in the form of Appendix B (the "Gas Sales Agreement").

                  (g) Resignations. The Company shall have delivered to
         Purchaser, except as otherwise requested by Purchaser, the written
         resignations of the board of managers of the Company, and will cause
         any other actions to be taken with respect to these resignations that
         Purchaser may reasonably request.

                  (h) Purchaser shall have received a release from Sellers, in
         their capacity as members of the Company, releasing the Company from
         all claims and causes of action arising from Sellers' capacity as
         members (except as may arise from this Agreement) including any claim
         that Sellers are owed any sums or are entitled to distributions from
         the Company.

                  (i) All liens on the assets of the Company in favor of
         Canadian Imperial Bank shall have been released.

         V.2 Conditions to the Obligations of Pennzoil and Sellers. The
obligations of Pennzoil and Sellers to proceed with the Closing contemplated
hereby are subject to the satisfaction on or prior to the Closing Date of all of
the following conditions, any one or more of which may be waived, in whole or in
part, in writing by Pennzoil and Sellers:

                  (a) Compliance. The representations and warranties made herein
         by Purchaser shall be correct on and as of the Closing Date as though
         such representations and warranties were made on and as of the Closing
         Date, and Purchaser shall have complied with all the covenants hereof
         required by this Agreement to be performed by it at or prior to the
         Closing Date.



                                       21
<PAGE>   26
                  (b) Officer's Certificate. Sellers shall have received a
         certificate dated the Closing Date of an executive officer of
         Purchaser, certifying as to the matters specified in Section 5.02(a)
         hereof.

                  (c) No Orders. The Closing hereunder shall not violate any
         order or decree of any Governmental Authority having competent
         jurisdiction over the transactions contemplated by this Agreement;
         provided, however, that if such order or decree is a temporary
         restraining order or other ex parte order or decree and all other
         conditions precedent to Closing have been satisfied or waived, the
         Closing Date shall be extended to a date five business days subsequent
         to the date on which the temporary restraining order or such other ex
         parte order or decree ceases to be in effect.

                  (d) Gas Sales Agreement. Pennzoil and the Company shall have
         terminated the gas sales agreement dated April 1, 1995. Pennzoil and
         the Purchaser shall have executed, delivered and closed the Gas Sales
         Agreement and all guarantees and letters of credit called for under the
         Gas Sales Agreement.

                  (e) Assignment and Assumption Agreement. The Company shall
         have executed and delivered to Sellers one or more Assignment and
         Assumption Agreements required to be delivered at Closing pursuant to
         Section 1.05.

                                   ARTICLE VI

                                      Taxes

         VI.1 Tax Return. The tax year of the Company will close effective as of
the end of the Closing Date pursuant to Code Section 708(b)(1)(B). Sellers shall
prepare and file all required federal income Tax Returns of the Company for
periods ending on or before the Closing Date, and pay and discharge all Taxes
resulting from taxable income shown on such Tax Returns. Sellers shall cause the
Company to file an election pursuant to Code Section 754 to adjust the basis of
Company property in the manner provided in Code Sections 734(b) and 743(b) on
the Company's federal income Tax Return for the short taxable year beginning on
January 1, 1997 and ending on the Closing Date. Purchaser and the Company shall
cooperate with Sellers and shall make available to Sellers all information and
timely take any action reasonably necessary to allow Sellers to prepare and file
any such Tax Return and pay and discharge any such taxes. Sellers shall
indemnify and hold Purchaser harmless from any federal income taxes imposed with
respect to the Company for periods prior to the Closing. Purchaser shall
indemnify and hold Sellers harmless from any federal income taxes arising from
any transaction involving the Company (including a liquidation or deemed
liquidation of the Company) occurring at or after the Closing.

                                   ARTICLE VII

                                   Termination

         VII.1 Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing:

                  (a) by the mutual written agreement of all of the parties
         hereto; or



                                       22
<PAGE>   27
                  (b) by either Pennzoil and Sellers or Purchaser if (i) the
         Closing has not occurred by June 30, 1997, or (ii) the consummation of
         the transactions contemplated hereby would violate any nonappealable
         final order, decree or judgment of any Governmental Authority having
         competent jurisdiction enjoining, restraining or otherwise preventing,
         or awarding substantial damages in connection with, the consummation of
         this Agreement or the transactions contemplated hereby; provided,
         however, that a party shall not be allowed to exercise any right of
         termination pursuant to this Section 7.01(b) if the event giving rise
         to such right shall be due to the negligent or willful failure of such
         party to perform or observe in any material respect any of the
         covenants or agreements set forth herein to be performed or observed by
         such party.

         VII.2 Effect of Termination. The following provisions shall apply in
the event of a termination of this Agreement:

                  (a) If this Agreement is terminated as permitted under Section
         7.01 and not as the result of the negligent or willful failure of any
         party to perform its obligations hereunder, such termination shall be
         without liability of any party to this Agreement or any Affiliate,
         shareholder, director, officer, employee, agent or representative of
         such party.

                  (b) If this Agreement is terminated as a result of the
         negligent or willful failure of Purchaser to perform its obligations
         hereunder, Purchaser shall be fully liable for any and all damages,
         costs and expenses (including, but not limited to, reasonable
         attorneys' fees) thereby sustained or incurred by Sellers.

                  (c) If this Agreement shall be terminated as a result of the
         negligent or willful failure of Pennzoil or Sellers to perform their
         respective obligations hereunder, Pennzoil and Sellers shall be fully
         liable for any and all damages, costs and expenses (including, but not
         limited to, reasonable attorneys' fees) thereby sustained or incurred
         by Purchaser.

                  (d) The parties hereto hereby agree that the provisions of
         Section 4.02(f) shall survive any termination of this Agreement.

                                  ARTICLE VIII

                           Survival of Representations
                         and Warranties; Indemnification


         VIII.1 Scope of Representations of Pennzoil and Sellers. Except as and
to the extent expressly set forth in Article II hereof, Pennzoil and Sellers
make no representations or warranties whatsoever, and disclaim all liability and
responsibility for any representation, warranty, statement or information made
or communicated (orally or in writing) to Purchaser (including, but not limited
to, any opinion, information or advice which may have been provided to Purchaser
by any Affiliate, officer, unitholder, director, employee, agent, consultant or
representative of Pennzoil, Sellers or the Company. Purchaser acknowledges and
affirms that Purchaser has made its own independent investigation, analysis and
evaluation of the Company


                                       23
<PAGE>   28
and its properties, assets, business, financial condition, operations and
prospects.

         VIII.2 Indemnification of Purchaser.

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************



         VIII.3 Indemnification of Sellers.

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************



         VIII.4 Claims. If a claim under the indemnities set forth in Sections
8.02 or 8.03 above is to be made by an indemnified party in connection with any
third party claim asserted against such indemnified party, the indemnified party
shall promptly notify the indemnifying party of such claim. The indemnifying
party shall have 30 days after receipt of such notice to undertake, conduct and
control, through counsel of its own choosing (subject to the consent of the
indemnified party, such consent not be unreasonably withheld) and at its
expense, the settlement or defense of such third party claim, and the
indemnified party shall cooperate in connection therewith; provided that (a) the
indemnifying party shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of the indemnified party arising as a result
of such third party claim unless such lien, encumbrance or charge is being
contested in good faith by appropriate proceedings, and (b) the indemnifying
party shall permit the indemnified party to participate in such settlement or
defense through counsel chosen by the indemnified party, provided that the fees
and expenses of such counsel shall be borne by the indemnified party.

         The indemnified party shall not pay or settle any third party claim
without first notifying the indemnifying party and providing the indemnifying
party with the option, for 30 days


                                       24
<PAGE>   29
following receipt of such notice, to (i) admit in writing its liability for such
claim, if it has not already done so, and (ii) if liability is so admitted,
reject, in its reasonable judgment, the proposed settlement. Notwithstanding the
foregoing, the indemnified party shall have the right to pay or settle any such
third party claim to the extent, but only to the extent, that such settlement
provides for payments of money; provided that in such event it shall waive any
right to indemnity therefor by the indemnifying party.

         VIII.5 Limitation on Indemnification.

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************


         VIII.6 Survival. Except for the representations and warranties
contained in Section 2.22 which shall survive in perpetuity, the representations
and warranties set forth in this Agreement and in any certificate or instrument
delivered in connection herewith shall survive until four years after the
Closing Date, following which date none of the parties may bring any action or
present any claim for a breach of such representations and warranties; provided
that there shall be no termination of any representation or warranty as to which
a bona fide claim has been asserted if the Indemnifying Party has received
notice of such claim prior to the fourth anniversary of the Closing Date.

         VIII.7 Tax Benefits; Insurance Proceeds. In determining the amount of
any loss, liability or expense for which any party is entitled to
indemnification under this Article VIII, the gross amount thereof will be
reduced by any correlative tax benefit or insurance proceeds realized or to be
realized by such party (or, in the case of Purchaser, by the Company or its
Subsidiaries), and such correlative insurance benefit shall be net of any
insurance premium that becomes due as a result of such claim.

         VIII.8 Exclusive Remedy. The rights and remedies in this Article VIII
shall, to the fullest extent permitted by applicable law, be the exclusive
rights and remedies of the parties with respect to breaches of the
representations and warranties contained in this Agreement, and the affirmations
of such representations and warranties in the certificates contemplated by
Sections 5.01(c) and 5.02(b), and the covenants and agreements contained in
Sections 4.01 and 4.02(a) and (b) of this Agreement.

                                   ARTICLE IX

                             Notices; Miscellaneous

         IX.1 Notices. All notices and other communications given hereunder
shall be in writing and shall be deemed given if telecopied, delivered
personally or mailed by registered or certified mail, return receipt requested,
to the parties at the following addresses:



                                       25
<PAGE>   30
                  (A)      If to Purchaser to:

                           Columbia Energy Services Corporation
                           121 Hillpointe Drive, Suite 100
                           Canonsburg, PA  15317
                           Attn:    Robert Gustafson
                           Telephone:  412/873-1300
                           Telecopy:   412/873-1411

                  (B)      If to Pennzoil and Sellers to:

                           Pennzoil Company
                           P.O. Box 2967
                           Houston, Texas 77252-2967
                           Attention: John Chapman
                           Telephone:  713/546-8859
                           Telecopy:   713/546-6405

         IX.2 Brokers. Pennzoil and Sellers have retained Lehman Brothers, Inc.
to assist and advise them in connection with the transactions contemplated by
this Agreement. Each of Purchaser and each of Pennzoil and the Sellers
represents to the other parties that, except as set forth in the preceding
sentence, it has not, directly or indirectly, employed any broker, finder or
intermediary in connection with such transactions that might be entitled to a
fee or commission upon the execution of this Agreement or the consummation of
such transactions.

         IX.3 Expenses. The parties agree that Pennzoil and Sellers shall pay
the costs and expenses of the engagement of Lehman Brothers, Inc. to advise them
in connection with the transactions contemplated by this Agreement. Except as
specifically provided herein, all legal and other costs and expenses in
connection with this Agreement and the transactions contemplated hereby shall be
paid by Pennzoil, Sellers (and not the Company) or Purchaser, as the case may
be, depending upon which party incurred such costs and expenses.

         IX.4 Books and Records. Pennzoil and Sellers agree that they will
deliver or cause to be delivered to Purchaser on the Closing Date all books and
records of the Company, to the extent that such books and records are not then
in the possession of the Company, provided that Pennzoil and Sellers may retain
copies of all tax and accounting records and of any matters for which Pennzoil
and Sellers may retain responsibility under the terms of this Agreement.

         IX.5 Miscellaneous.

                  (a) Exclusive Agreement. This Agreement supersedes all prior
         written or oral agreements between the parties with respect to the
         transactions contemplated herein, other than the Confidentiality
         Agreement between Sellers and Purchaser dated December 10, 1996, and,
         except for such Confidentiality Agreement, is intended as a complete
         and exclusive statement of the terms of the agreement between the
         parties with respect to the transactions contemplated herein. Each
         party represents to the other that it is not a party to any agreement
         with any other party relating to the transactions contemplated by this


                                       26
<PAGE>   31
         Agreement.

                  (b) Choice of Law; Amendments; Headings. This Agreement shall
         be governed by the internal laws of the State of Texas, without giving
         effect to principles of conflicts of laws. This Agreement may not be
         changed or terminated orally. The headings contained in this Agreement
         are for reference purposes only and shall not affect in any way the
         meaning or interpretation of this Agreement. Terms such as "herein",
         "hereby", "hereto" and "hereof" refer to this Agreement as a whole. The
         term "include" and derivatives thereof are used in an illustrative
         sense and not a limitative sense.

                  (c) Arbitration. Any issue, controversy, dispute or claim
         arising out of or relating to this Agreement or its alleged breach that
         cannot be resolved by mutual agreement shall be resolved exclusively by
         final and binding arbitration by a panel of three arbitrators in
         Houston, Texas, in accordance with the Commercial Arbitration Rules of
         the American Arbitration Association ("AAA"), and judgment on the award
         rendered by the panel may be entered by any court having jurisdiction
         thereof. The arbitrators shall be selected by mutual agreement of the
         parties (i.e., Pennzoil and Sellers on the one hand, and Purchaser on
         the other), if possible. If the parties fail to reach agreement upon
         appointment of the arbitrators within thirty days after a demand for
         arbitration is made, the arbitrators shall be selected from a list of
         proposed arbitrators submitted by AAA. The selection process shall be
         that which is set forth in the AAA commercial arbitration rules then
         prevailing, except that (1) the number of preemptory strikes shall not
         be limited, and (2), if the parties fail to select the arbitrators from
         one or more lists, AAA shall not have the power to make an appointment
         but shall continue to submit additional lists until the arbitrators
         have been selected. If an arbitrator should die, withdraw, or otherwise
         become incapable of serving, a replacement shall be selected and
         appointed in a like manner. If the arbitrators have not been selected
         following submission of three or more lists by AAA, either party may
         declare the existence of an impasse by giving written notice to the
         other. In that event, the arbitrators shall be selected in the
         following manner: Each party shall designate five proposed arbitrators
         whose names appear on any of the lists previously submitted by AAA. The
         parties shall then eliminate seven of the designated names by
         alternately striking one, and the three persons whose names remain
         shall serve as arbitrators. If necessary, the party to make the first
         strike shall be designated by lot.

                  (d) Modification and Waiver. No supplement, modification or
         amendment of this Agreement shall be binding unless executed in writing
         by all the parties. No waiver of any of the provisions of this
         Agreement shall be deemed, or shall constitute, a waiver of any other
         provision, whether or not similar, nor shall any waiver constitute a
         continuing waiver. No waiver shall be binding unless executed in
         writing by the party making the waiver.

                  (e) Assignments and Third Parties. No party hereto shall
         assign this Agreement or any part hereof without the prior written
         consent of the other parties. Except as otherwise provided herein, this
         Agreement shall be binding upon and inure to the benefit of the parties
         hereto and their respective successors and assigns. No such assignment
         shall release Purchaser of any of its obligations under this Agreement.
         Nothing in this Agreement shall entitle any person other than the
         parties hereto or their


                                       27
<PAGE>   32
         respective permitted successors and assigns to any claim, cause of
         action, remedy or right of any kind.

                  (f) Schedules. Pennzoil and Sellers may revise or supplement
         the Schedules attached to this Agreement at any time on or prior to the
         Closing; provided, however, that no such revision or supplement shall
         revise or supplement any such Schedules so as to reflect any
         information materially adverse to the Company that was not heretofore
         disclosed to Purchaser.

                  (g) Severability. If any term or other provision of this
         Agreement is invalid, illegal or incapable of being enforced by any
         rule of law or public policy, all other conditions and provisions of
         this Agreement shall nevertheless remain in full force and effect so
         long as the economic or legal substance of the transactions
         contemplated hereby is not affected in any manner adverse to any party.
         Upon any binding determination that any term or other provision is
         invalid, illegal or incapable of being enforced, the parties hereto
         shall negotiate in good faith to modify this Agreement so as to effect
         the original intent of the parties as closely as possible in an
         acceptable and legally enforceable manner, to the end that the
         transactions contemplated hereby may be completed to the extent
         possible.

                  (h) Counterparts. This Agreement may be executed in any number
         of counterparts, each of which shall be deemed to be an original and
         all of which together shall constitute but one and the same agreement.

                  (i) Further Assurances. The parties hereto each agree to
         deliver or cause to be delivered to the others on the Closing Date, and
         at such other times thereafter as shall be reasonably requested, any
         additional instrument that the other may reasonably request for the
         purpose of carrying out this Agreement.

                  (j) Preservation of Books and Records. For a period of six (6)
         years after the Closing Date, Purchaser shall (i) preserve and retain
         the corporate, accounting, legal, auditing, contractual and other books
         and records of the Company that relate to the conduct of its businesses
         and operations prior to the Closing Date (including, but not limited
         to, any documents relating to any governmental or nongovernmental
         actions, suits, proceedings or investigations arising out of the
         conduct of the business and operations of the Company prior to the
         Closing Date) and (ii) make such books and records available at the
         then current administrative headquarters of Purchaser to Pennzoil and
         Sellers and their respective partners, officers, employees, agents and
         Affiliates upon reasonable notice and at reasonable times, it being
         understood that Pennzoil and Sellers shall be entitled to make and
         retain copies of any such books and records as it shall deem necessary.
         Purchaser agrees to permit representatives of Sellers to meet with
         employees of Purchaser or the Company on a mutually convenient basis in
         order to enable Sellers to obtain additional information and
         explanations of any materials provided pursuant to this Section
         9.05(j). Additionally, Purchaser shall retain such other records and
         books of the Company that Sellers reasonably request beyond the
         six-year period if Sellers are involved in any dispute or proceeding
         regarding the use of such records if Sellers have notified Purchaser,
         in writing, of the records that need to be maintained beyond the
         six-year period prior to the termination of such six-year period.


                                       28
<PAGE>   33
                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




                                       29
<PAGE>   34
                  IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.

                            PENNZOIL EXPLORATION AND
                               PRODUCTION COMPANY



                            By:      /s/ Michael A. Osborne
                                     --------------------------------------
                            Name:    Michael A. Osborne
                            Title:   Agent & Attorney in Fact

                            PENNZOIL GAS MARKETING COMPANY



                            By:      /s/ Steven J. Dalts
                                     --------------------------------------
                            Name:    Steven J. Dalts
                            Title:   President


                            PENNZOIL ENERGY MARKETING COMPANY



                            By:      /s/ Steven J. Dalts
                                     --------------------------------------
                            Name:    Steven J. Dalts
                            Title:   President

                                                                         SELLERS

                            COLUMBIA ENERGY SERVICES CORPORATION


                            By:      /s/  James C. McDonnell
                                     --------------------------------------
                            Name:    James C. McDonnell
                            Title:   Vice President

                                                                       PURCHASER




                                       30
<PAGE>   35
                                   APPENDIX A

                                   Definitions

                  Capitalized terms used in this Agreement shall have the
meanings ascribed to them in this Appendix A unless such terms are defined
elsewhere in this Agreement. A cross reference sheet of terms defined elsewhere
in this Agreement follows this list of definitions.

         Actual Accounts Receivable: The sum of the "Accounts Receivable" and
"Accounts Receivable-Owner," as identified in the Actual Effective Date
Financial Statements as of the Effective Date,

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Actual Accounts Payable: The sum of "accounts payable" and "Accounts
Payable-Owner" as identified in the Actual Effective Date Financial Statements,
as of the Effective Date, less any accounts payable whose write-off is reflected
in the Actual Operating Loss Amount.

         Actual Closing Date Pennzoil Credit Facility: The balance (including
accrued interest) on the Pennzoil Credit Facility as of the Closing Date.

         Actual Effective Date Pennzoil Credit Facility: The balance (including
accrued interest) on the Pennzoil Credit Facility as of the Effective Date.

         Actual Operating Loss Amount: The actual aggregate change in Total
Member's Equity of the Company calculated from January 31, 1997 through the
Effective Date plus ___________.

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Affiliate: Any Person that is an affiliate within the meaning of the
regulations promulgated under the Securities Act of 1933, as such regulations
are amended or in effect on the date in question.

         Closing: The closing of the transactions contemplated by this
Agreement.

         Closing Date. The date of the Closing.

         Code:  The Internal Revenue Code of 1986, as amended.

         Commission:  The U.S. Securities and Exchange Commission.

         Effective Date:  The effective date shall be May 31, 1997.

         Encumbrance: Any mortgage, lien, security interest, pledge, charge,
encumbrance, easement, claim, restriction, limitation, irregularity, burden or
defect.

         Entity: A corporation, partnership, joint venture, trust or
unincorporated organization or association, Governmental Authority or other
entity.

         Environmental Claim: Any action, suit, investigation, proceeding or
written notice by




                                      A-1
<PAGE>   36
any Person alleging or inquiring as to potential liability arising out of, based
on or resulting from any violation, or alleged violation, of any environmental
Legal Requirement.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         Estimated Operating Loss Amount:

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Governmental Authority: The United States of America, any state,
commonwealth, territory or possession thereof and any political subdivision of
any of the foregoing, including but not limited to courts, departments,
commission, boards, bureaus, agencies or other instrumentalities.

         Legal Requirements: Any law, statute, ordinance, decree, requirement,
order, judgment, rule or regulation of, including the terms of any license or
permit issued by, any Governmental Authority.

         Material Adverse Effect: Any material adverse effect on the business,
financial condition or results of operations of the Company taken as a whole.

         Material Properties: Any property of the Company, real, personal or
intangible with a fair market value greater than $50,000.

         Olympic Payable:

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Olympic Receivable:

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Pennzoil Credit Facility: The credit facility between Pennzoil and the
Company pursuant to that certain Revolving Demand Loan Agreement dated as of
December 1, 1996 between Pennzoil and the Company as amended as of the Closing
Date.

         Person: Any individual or Entity.

         Plan: Each "employee benefit plan", as such term is defined in Section
3(2) of ERISA, which is covered by Title I of ERISA or such other plan or
arrangement, whether written or oral, designated to provide benefits or
remuneration to employees, including, without limitation, any pension, profit
sharing, savings, bonus, incentive, option, insurance, welfare, phantom stock or



                                      A-2
<PAGE>   37
similar arrangement and which is or had been maintained, or otherwise
contributed to, by the Company or its subsidiaries for the benefit of the
employees (or former employees) of the Company or its subsidiaries or to which
the Company or its Subsidiaries has an obligation, responsibility or liability.

         Purchaser Indemnified Loss:

                 ********************************************

                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.

                 ********************************************

         Reasonable Efforts: The standard of performance that is in accordance
with reasonable commercial practices and without the incurrence of unreasonable
expense.

         Realized Accounts Payable: The Actual Accounts Payable which have been
paid or, if applicable, reclassified as "gas held in storage" or "gas
imbalances", by ____ days after the Closing Date.

                 ********************************************
                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.
                 ********************************************

         Realized Accounts Receivable: The Actual Accounts Receivable which have
been received or, if applicable, reclassified as "gas held in storage" or "gas
imbalances", by ____ days after the Closing Date.

                 ********************************************
                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.
                 ********************************************

         Remaining Accounts Payable: The Actual Amounts Payable which have not
been paid or, if applicable, reclassified as "gas held in storage" or "gas
imbalances", by ____ days after the Closing Date.

                 ********************************************
                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.
                 ********************************************

         Remaining Accounts Receivable: The Actual Accounts Receivable which
have not been received or, if applicable, reclassified as "gas held in storage"
or "gas imbalances", by ____ days after the Closing Date.

                 ********************************************
                         Information has been omitted
                 pursuant to a confidential treatment request
                          filed with the Commission.
                 ********************************************

         Securities Act: Securities Act of 1933, as amended.

         Seller Indemnified Loss: Any loss, charge, assessment, damage or
expense (including reasonable attorneys' fees) sustained by Sellers arising out
of or resulting from any act or omission of Purchaser in its operation of the
Company after the Closing Date or any inaccuracy in or breach of any of the
representations, warranties or covenants made by Purchaser in this Agreement.



                                      A-3
<PAGE>   38
         Taxes: All federal, foreign, state or local net or gross income, gross
receipts, petroleum revenue, sales, use, ad valorem, value added, franchise,
withholding, payroll, employment, excise, property, windfall profits or similar
taxes, assessments, duties, fees, levies or other governmental charges, together
with any interest thereon, any penalties, additions to tax or additional amounts
with respect thereto and any interest in respect of such penalties, additions or
additional amounts.

         Tax Return: Any federal or state Tax return filed or to be filed by the
Company or any of its Subsidiaries.

         Total Members' Equity: The sum of the "paid in capital" and "retained
earnings" as identified in the applicable financial statements of the Company.

                              CROSS REFERENCE SHEET


<TABLE>
<CAPTION>
                           TERM                    SECTION
                           ----                    -------
<S>                                                <C>
          AAA...................................   9.05(c)

          Agreement.............................   Preamble

          Closing...............................   1.05

          Company...............................   Recitals

          Contracts.............................   2.10

          Financial Statements..................   2.06

          Guaranties............................   4.02(e)

          Pennzoil..............................   Preamble

          Purchase Price........................   1.02

          Purchaser.............................   Preamble

          Sellers...............................   Preamble

          Units.................................   Recitals
</TABLE>



                                      A-4