<PAGE>

                                                                   EXHIBIT 10.15

                           Master Services Agreement

                                   between

                        Bellwether Exploration Company

                                      and

                           Torch Operating Company,
                         Torch Energy Marketing, Inc.,
                      Torch Energy Advisors Incorporated
                              and Novistar, Inc.



                        Effective as of October 1, 1999




                               - CONFIDENTIAL -
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                           MASTER SERVICES AGREEMENT
                           -------------------------


     This Master Services Agreement (this "Master Agreement") is entered into
among Bellwether Exploration Company ("Customer"), and Torch Operating Company
("TOC"), Torch Energy Marketing, Inc. ("TEMI"), Torch Energy Advisors
Incorporated ("TEAI") and Novistar, Inc. ("Novistar") (TOC, TEMI, TEAI and
Novistar are herein referred to individually as a Torch Party and collectively
as "Torch" and Each Torch Party and Customer are herein individually referred to
as a Party and collectively referred to as the "Parties"), effective as of
October 1, 1999 (the "Effective Date").

     For and in consideration of the mutual promises and covenants contained
herein, the receipt, sufficiency, and adequacy of which are hereby acknowledged,
the Parties agree as follows:

                            BACKGROUND AND PURPOSE

     TEAI and other Torch Parties currently provide certain administrative,
operations, and marketing services to Customer pursuant to the Management
Agreement between TEAI and Customer dated January 1, 1994, as amended, the
Contract Operations Agreement between TOC and Customer dated November 11, 1991
and the Marketing Letter Agreement between TEMI and Customer dated May 1, 1997.

     This Master Agreement sets forth the general terms and conditions
applicable to each Service Agreement.  The Parties may, from time to time, enter
into one or more additional Service Agreements setting forth the specific terms
and conditions applicable to specific services to be contracted for by Customer
and one or more Torch Parties.

                                   ARTICLE 1
                                  DEFINITIONS

Section 1.1  Certain Definitions

     In this Master Agreement, the following terms shall have the indicated
meanings:

     "Affiliate" means, with respect to any specified person or entity, any
other person or entity that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common Control with,
the specified person or entity.

     "Business Day" means any day during which the New York Stock Exchange is
generally conducting business.

     "Business Records and Data" means a Party's contracts, leases, accounting
documents, invoices, checks, statements, invoices, receipts, correspondence,
vouchers and all files, records,
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data, information, and maps related to such leases and contracts, including,
without limitation, computer-readable copies of all computer records pertaining
to the leases, files, contracts, division order files, title opinions and other
title information (including abstracts, evidence of rental payments, land maps,
surveys, and data sheets), production records and other technical data,
geological and geophysical information and maps, well logs and related data, or
seismic data, including basic field tapes, observers' logs, survey notes, base
maps and all other business records relating to the business operations of such
Party, but in any event excluding documents that constitute another Party's
contracts, leases, accounting documents, invoices, checks, statements, invoices,
receipts, correspondence, vouchers and including all files, records, data,
information, and maps related to such leases and contracts, including, without
limitation, computer-readable copies of all computer records pertaining to the
leases, files, contracts, division order files, title opinions and other title
information (including abstracts, evidence of rental payments, land maps,
surveys, and data sheets), production records and other technical data,
geological and geophysical information and maps, well logs and related data, or
seismic data, including basic field tapes, observers' logs, survey notes, base
maps and all other business records relating to the business operations of such
Party.

     "Change Order" has the meaning ascribed to it in Section 4.3(a).

     "Confidential Information" means information designated as confidential or
which ought to be considered as confidential from its nature or from the
circumstances surrounding its disclosure.  Confidential Information includes,
without limiting the generality of the foregoing, work product, the terms of
each Service Agreement (other than its term and general scope), and information:

          (a)  relating to the Disclosing Party's software or hardware products
or services, or to its research and development projects or plans;

          (b)  relating to the Disclosing Party's business, policies,
strategies, operations, finances, plans or opportunities, including the identity
of, or particulars about, the Disclosing Party's clients or customers;

          (c)  marked or otherwise identified as confidential, restricted,
secret or proprietary, including, without limiting the generality of the
foregoing, information acquired by inspection or oral disclosure provided such
information was identified as confidential at the time of disclosure or
inspection; and

          (d)  that the Receiving Party should have, without any exercise of due
diligence, known was obtained as a result of or subject to a confidentiality
agreement between Disclosing Party and a third party.

Notwithstanding the foregoing, Confidential Information does not include
information that the Receiving Party can establish:

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          (w)  has become generally available to the public or commonly known in
either Party's industry other than as a result of a breach by the Receiving
Party of any obligation to the Disclosing Party;

          (x)  was known to the Receiving Party prior to disclosure to the
Receiving Party by the Disclosing Party by reason other than having been
previously disclosed to the Receiving Party: (A) in confidence by the Disclosing
Party, or (B) in the course of the Receiving Party acting as agent of the
Disclosing Party;

          (y)  was disclosed to the Receiving Party by a third party who did not
owe an obligation of confidence to the Disclosing Party with respect to the
disclosed information; or

          (z)  was independently developed by the Receiving Party without any
reference to any part of the Confidential Information.

     "Confidential Materials" means the part of any tangible media upon or
within which any part of the Confidential Information is recorded or reproduced
in any form, excluding any storage device which forms a part of computer
hardware.

     "Contract Executive" means the individual representatives of Torch Parties
and Customer who are assigned the primary responsibility of managing a Service
Agreement.

     "Contract Year" with respect to a Service Agreement, means each annual
period beginning on the Service Agreement Effective Date unless defined
otherwise within a Service Agreement.

     "Control" and its derivatives means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether through the ownership of voting securities, by
contract, or otherwise.

     "Disclosing Party" means the Party furnishing Confidential Information or
Confidential Materials (or having beneficial ownership of, Confidential
Information or Confidential Materials in the possession of another Party).

     "Effective Date" means the date of this Master Agreement.

     "Indemnitees" shall mean, with respect to a Party entitled to
indemnification hereunder, such Party and its Affiliates, officers, directors,
employees, agents, successors, and assigns.

     "Insurance Policy Limit" shall mean (i) the amount ultimately paid by an
insurer of a Party with respect to a covered claim; but if such claim is not
ultimately paid, then (ii) zero.

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     "Master Agreement" means this Master Agreement, all Schedules, Exhibits and
Appendices hereto and, when the meaning so requires, all Service Agreements.

     "Pass-Through Expenses" means the actual invoiced amounts (excluding any
Torch Party's profit, administrative fee or overhead charges) charged to the
Torch Party by third parties that Customer has agreed to pay directly or for
which Customer has agreed to reimburse the Torch Party.

     "Performance Deposit" means a payment by Customer to each Torch Party in an
amount equal to the sum of the two highest months' fees earned by such Torch
Party under an agreement being terminated under Article 16, within the 12-month
period ending at the time termination notice is given.

     "Receiving Party" means a Party other than the Disclosing Party.

     "Schedules" means any schedule attached to this Master Agreement or a
Service Agreement, if such document is initialed by Customer and the applicable
Torch Party(ies) and states that it is a schedule to such agreement.

     "Service Agreement" means any Service Agreement entered into between
Customer and a Torch Party(ies) pursuant to Section 2.1.

     "Service Agreement Effective Date" means the date indicated in the Service
Agreement as the date upon which such agreement becomes effective.

     "Service Agreement Term" means the term of the applicable Service
Agreement, as defined in each Service Agreement.

     "Service Credits" means any Service Level Credits issued pursuant to a
Service Level provision of a Service Agreement or Change Order.

     "Service Level" shall mean a performance metric related to the Services.

     "Services" means the services provided by Torch Party(ies) to Customer
pursuant to Section 4.1.

     "Term" means the Term of this Master Agreement as provided in Article 3.
When used herein in the context of a Service Agreement, "Term" refers to the
applicable Service Agreement Term.

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Section 1.2  Other Definitions

     Other terms used in this Master Agreement, the Schedules, Exhibits and
Appendices hereto and the Service Agreements are defined where they first appear
and have the respective meanings there indicated.


                                   ARTICLE 2
                               MASTER AGREEMENT

Section 2.1  Master Agreement

     This Master Agreement contains general contractual terms for Services to be
provided to Customer.  Services will be provided by Torch Party(ies) pursuant to
Service Agreements and Change Orders (as defined) entered into by Customer and
Torch Party(ies).  Separate Service Agreements may be entered into for discrete
Services.  Each Service Agreement shall describe the Services covered by the
Service Agreement, the provisions for payment, the term for performance, any
applicable Service Levels and other provisions that are specific to the Service
Agreement.  No Service Agreement Term shall extend beyond the Term of this
Master Agreement.

     Except as otherwise expressly set forth in this Master Agreement, the
obligations of a Party under this Master Agreement, except (i) unsatisfied
obligations under Article 7 and/or (ii) other obligations covered by Section
18.10, shall be suspended during any period in which no Service Agreement is in
effect with respect to such Party.

Section 2.2  Interpretation and Precedence

     This Master Agreement, the Schedules, Exhibits and Appendices hereto, the
Service Agreements, any Schedules that may be added to the Service Agreements,
and any Change Orders, are to be interpreted so that all of the provisions are
given as full effect as possible.  In the event of a conflict among this Master
Agreement or a Schedule, Exhibit or Appendix hereto and any Service Agreement or
Change Order, the order of precedence shall be: first, Sections 2.2, 5.1, 6.4,
and 7.5 of this Master Agreement, and Articles 8, 9, and 14 through 18 of this
Master Agreement, next, the Change Order, next, the Service Agreement, next, any
exhibit or Schedule to the Service Agreement; next, the remaining sections of
this Master Agreement; and last, any other Exhibits, Schedules or appendices to
this Master Agreement.  Otherwise, the terms of this Master Agreement shall
apply to each Service Agreement and Change Order.

Section 2.3  No Implied Agreement

     Except as expressly set forth in a Service Agreement or Change Order,
nothing in this Master Agreement requires Customer to purchase products or
services from a Torch Party or requires a Torch Party to provide products or
services to Customer.  Customer may request

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information, proposals, or competitive bids from third parties on the same or
different terms than provided in this Master Agreement.

Section 2.4  Agreed Termination of Prior Agreements

     The Parties hereby agree that the Contract Operations Agreement dated
November 11, 1991 and the Management Agreement dated January 1, 1994 and the
Marketing Letter Agreement dated May 1, 1997 (collectively the "Prior
Agreements") are terminated as of the Effective Date and the Parties further
agree that no termination fees shall be due as a result of such terminations.
The Parties further agree that all of the indemnification provisions contained
in the Prior Agreements shall survive the termination of the Prior Agreements
and shall apply to any and all claims for indemnification based upon events
occurring prior to the Effective Date.  All indemnification claims among the
Parties based upon events occurring on or after the Effective Date shall be
governed by the indemnification provisions of this Agreement.


                                   ARTICLE 3
                                     TERM

Section 3.1  Term

     The term of this Master Agreement (the "Term") shall begin as of the
Effective Date and shall continue with respect to a Party, for so long as any
Service Agreement is in effect with respect to such Party unless earlier
terminated or renewed in accordance with the provisions of this Master
Agreement.

     Each Service Agreement shall set forth the applicable Service Agreement
Term.  A Change Order shall terminate, except with respect to any payment
obligation thereunder, if no Service Agreement is in effect among the parties to
the Change Order.


                                   ARTICLE 4
                                   SERVICES

Section 4.1  General; Service Agreements

     Throughout each Service Agreement Term, each Party shall perform such
obligations as it may have under the Services Agreements and Change Orders, as
such Service Agreements and Change Orders may be amended and supplemented from
time to time by written amendments thereto or pursuant to the Change Order
Procedures (collectively, the "Services").  Each Party shall perform its
obligations in accordance with the terms of this Master Agreement, the
Schedules, Exhibits and Appendices hereto, the Service Agreements to which it is
a party and Change Orders to which it is a party.

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     The specific Services to be supplied by a Torch Party to Customer, the
compensation to be paid and other related matters shall be expressed in Service
Agreements and Change Orders.  Each Service Agreement shall be subject to the
terms and conditions of this Master Agreement.  No Torch Party shall have an
obligation to provide any Services, and no amounts will become due from
Customer, unless and until the appropriate Service Agreement has been duly
signed and delivered by authorized officers of Customer and any applicable Torch
Parties.

     The Parties further agree that, while the applicable Service Agreement is
in effect, any service (other than those services identified in Schedule 4.1,
which may be amended if and when a Service Agreement is terminated) that was
customarily and routinely performed by a Torch Party for Customer at no
additional charge during the year prior to the Effective Date and is related to
the Services under in-effect Services Agreement(s), but is neither listed as an
included Service nor listed as an excluded Service or separately charged Service
in the Services Schedules to the applicable Service Agreement, shall be
performed by the Torch Party at no additional charge.  With respect to assets
Customer acquires after the Effective Date: (i) Customer may, before closing the
acquisition, make an election to exclude such assets from the scope of any
Service Agreement; (ii) Customer may, upon reasonable notice to the Torch Party,
revoke such election under (i), which revocation shall be permanent and
effective on a date as mutually agreed (iii) a Torch Party may elect to exclude
such assets from the scope of such Service Agreement if Customer has on at least
one occasion made an election that remains in effect under (i); (iv) a Torch
Party may elect to exclude such assets from the scope of this Agreement if the
Torch Party in its sole discretion determines (in good faith) that it has a non-
trivial environmental, health or safety issue with respect to such assets.

     Customer and various Torch Parties contemplate entering into the following
Service Agreements:

Service Agreement
-----------------
Oil and Gas Administration
Field Operating
Corporate Administration
Crude Oil and Natural Gas Marketing
Midstream Asset Management
Land Leasing

     The Service Agreements will be entered into among Customer and the
individual Torch Parties; no Torch Party shall be responsible for the
obligations of another Torch Party under this Master Agreement, any Service
Agreement or any Change Order, except that if at any time an Affiliate of TEAI
fails to perform obligations including payment obligations the Affiliate has
under this Master Agreement or any Service Agreement or any Change Order, then
TEAI shall be responsible for performance of such obligations.  Except as
expressly provided in the preceding sentence, notwithstanding any other
provision of this Agreement, a Torch Party shall have no liability to Customer
with respect to (i) any Service Agreement (unless the Torch Party is a party

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thereto); (ii) any Change Order (unless the Torch Party is a party thereto);
(iii) any act (or failure to act) other than an act (or failure to act) on the
part of such Torch Party.


Section 4.2  Performance of Out-Of-Scope Services

     Notwithstanding any request made to a Torch Party or the submission of any
proposal by a Torch Party pursuant to Section 4.3, Customer shall have the right
to contract with a third party to perform any services which are in addition to,
or outside the scope of, the Services.  If Customer makes a decision to perform
for itself or to contract with a third party to perform any such service, the
Torch Parties shall cooperate with Customer and such third party to the extent
reasonably required for the provision of services by Customer or such third
party, at Customer's expense and only to the extent specified in a Change Order,
except to the extent included specifically in the scope of the Services.

     The Parties acknowledge and agree that this Master Agreement and the
Service Agreements shall not apply to properties located outside the United
States and its territorial waters and owned or operated by Customer, except to
the extent provided in a Change Order.

Section 4.3  Change Order Procedure

     (a)  From time to time during the Term, Customer or Torch Party(ies) may
propose changes in or additions to or deletions from the Services or other
aspects of this Master Agreement or a Service Agreement.  No such changes,
additions or deletions shall be effective or binding on the Parties unless a
written change order (a "Change Order") is signed by authorized representatives
of both Customer and the Torch Party(ies) to be bound thereby.  Subject to
clause (e) below, all such Change Orders shall be implemented pursuant to the
procedures set forth in this Section (the "Change Order Procedures").

     (b)  Any change to any of Article 1 through 18 of this Master Agreement
must be approved by a majority of each Party's Management Board members and
memorialized in a written amendment to this Master Agreement.

     (c)  If Customer desires to propose a change in or addition to or deletion
from the Services under a Service Agreement, it shall deliver at Customer's
expense a written notice to the Torch Contract Executive describing the
proposal.  A Torch Party, in a timely manner, may decline such a proposal or may
respond to such a proposal at the Torch Party's expense (except as otherwise
agreed) by delivering to the Customer Contract Executive a written proposal
("Change Order Proposal").  If a Torch Party desires to propose a change in or
addition to or deletion from the Services or other aspects of this Master
Agreement or a Service Agreement, it may do so by preparing at its expense and
delivering a Change Order Proposal to the Customer Contract Executive.  A Change
Order Proposal shall not constitute an offer but shall instead be deemed to be a
proposal given for discussion purposes.

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     (d)  No change in or addition to or deletion from the Services or any other
aspect of a Service Agreement shall become effective without the written
approval (which may be withheld or delayed in a Party's sole and absolute
discretion) of the affected Parties' Contract Executive(s).  If Customer and the
applicable Torch Party approve a Torch Party's Change Order Proposal, as
evidenced by the written approval of the Contract Executives, any changes in or
additions to or deletions from the Services described in the Change Order
Proposal shall thereafter be deemed "Services," any other changes described in
the Change Order Proposal shall be deemed to have amended the applicable Service
Agreement, and the Parties thereto shall agree on any further modifications to
the applicable Service Agreement required to reflect the Change Control
Proposal.

     (e)  Changes made by a Torch Party in the ordinary course of providing the
Services, that are performed within the then-existing resources used to provide
the Services and that do not cause non-compliance with Service Levels (such as
changes to operating procedures, schedules and equipment configurations) need
not comply with the procedures set forth in this Section 4.3, provided that they
do not involve any additional unreimbursed cost to a Party.

Section 4.4  Resources

     Except as otherwise expressly provided in a Service Agreement or Change
Order, each Party shall provide, at its expense, all of the facilities,
personnel, equipment, software, services and other resources necessary for it to
perform its obligations under this Agreement.

Section 4.5  Licenses and Permits

     Each Party shall be responsible for obtaining all applicable licenses,
authorizations, and permits required for such Party to carry out its obligations
under this Master Agreement, and each Service Agreement (or Change Order) to
which it is a party, and shall have financial responsibility for, and shall pay,
all fees and taxes associated with such licenses, authorizations, and permits,
except as otherwise expressly provided in this Master Agreement or a Service
Agreement or Change Order.


                                   ARTICLE 5
                                SERVICE LEVELS

Section 5.1  Failure to Meet Service Levels

     (a)  If a Torch Party fails to meet a Service Level for reasons other than
those specified in Section 5.1(b) below, Customer shall, as its sole remedy for
any such failure, have the right to credits in the applicable amount as
specified, or other Service Level remedy as specified, in the applicable Service
Agreement ("Service Level Remedy") as liquidated damages.

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The Parties acknowledge that actual damage to Customer from such a failure would
be impracticable to determine and that each Service Level Remedy is reasonable
under the circumstances existing as of the date of this Master Agreement and any
Service Agreement's effective date. If an applicable Service Level Remedy is a
credit then the Torch Party shall deduct the Service Level Remedy from its next
succeeding invoice or other amount due to it.

     (b)  To the extent any failure to meet a Service Level is attributable to
(i) a Force Majeure Event, or (ii) a failure of Customer to satisfy its
obligations under this Master Agreement or a Service Agreement, such Service
Level shall be deemed not to have been failed.

Section 5.2  Baseline Customer Satisfaction Survey

     Upon the request of Customer, not more than once each year and as part of
the Services, Torch (or if Customer elects, a third party selected by Customer
but then at Customer's expense) shall, if requested by Customer, conduct a
baseline Customer satisfaction survey as approved by the Parties for affected
end-users of the Services as designated by Customer. This survey shall be of the
content and scope reasonably determined by the Parties, administered in
accordance with the procedures agreed upon by the Parties.

                                   ARTICLE 6
                             CHARGES FOR SERVICES

Section 6.1  Charges in General

     Customer shall pay to the Torch Parties thereto the amounts due as set
forth in each Service Agreement and each Change Order as well as amounts due in
connection with any matters identified as at Customer's expense under this
Agreement, or Service Agreement(s) or Change Order(s). Except for costs and
expenses that this Master Agreement, or a Service Agreement or a Change Order,
states are Customer's responsibility, a Torch Party shall be solely responsible
for, and shall indemnify Customer against, all third-party claims for costs and
expenses incurred by such Torch Party to perform its obligations under this
Master Agreement and the Service Agreements and Change Orders. Except as
otherwise expressly provided in this Master Agreement or a Service Agreement or
Change Order, or as otherwise mutually agreed in writing by the Parties,
Customer will not pay the Torch Parties any additional fees, charges,
assessments, or reimbursements.

Section 6.2  Taxes

     Payment of federal, state, local, foreign, and other taxes based on the
Services shall be the responsibility of Customer, which will reimburse the
applicable Torch Party for any federal, state, local, or foreign excise, sales,
use, business privilege, gross receipts, value-added, single business, or other
similar tax (excluding federal, state, or local taxes based on income or profits
of a Torch Party, or any franchise taxes assessed against a Torch Party) based
on the Services. Each Party shall reasonably cooperate with the other in
minimizing any applicable tax and, in

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connection therewith, Customer shall provide the Torch Parties any resale
certificates, information regarding out-of-state use of materials, services or
sales, or other exemption certificates or information reasonably requested by a
Torch Party.

Section 6.3  Benchmarking

     Customer may, not more frequently than annually, at its expense, engage an
independent qualified consultant for the purpose of performing a review of the
costs to Customer of the Services, the Torch Parties' performance of the
Services, and use by Customer and Torch of new technologies and techniques, as
measured by industry norms. The Torch Parties shall reasonably cooperate with
Customer and Customer's consultant but as "out-of-scope services" (as defined)
except to the extent specified in a Change Order and/or to the extent involving
tasks included in the scope of the Services.

Section 6.4  Out-of-Scope Services

     Customer shall pay for any "out-of-scope services" (i.e., ancillary
services that are not a part of Services), in accordance with the terms and
conditions stated in a written Change Order signed by an authorized Customer
representative. Customer shall reimburse Torch Parties for reasonable out-of-
pocket expenses incurred by Torch Parties in the performance of out-of-scope
services, such as reasonable travel and living expenses, provided such expenses
are invoiced with reasonable supporting documentation.

Section 6.5  Recordkeeping

     Torch Parties shall maintain commercially reasonable records for the
amounts billed to and payments made by Customer under this Master Agreement and
all Service Agreements and Change Orders. Such records shall include data and
documentation of third party charges invoiced to and paid by Torch Parties.
Torch Parties shall retain such records for at least three years (including any
records received by a Torch Party maintained by Customer prior to the applicable
Service Agreement Effective Date). Torch Parties shall provide Customer, at
Customer's request, with paper and electronic copies of documents and
information reasonably necessary to verify Torch Parties' compliance with this
Master Agreement. Customer and its authorized agents and representatives shall
have reasonable access to such records for inspection purposes during normal
business hours for the period during which the Torch Parties are required to
maintain such records. Upon termination or expiration of this Master Agreement,
the Torch Parties, in any event and notwithstanding the provisions of Sections
9.2, 9.4, and 16.5, may retain, subject to other applicable confidentiality
obligations under this agreement, an archive copy of any record.

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                                   ARTICLE 7
                             INVOICING AND PAYMENT

Section 7.1  Invoices

     A Torch Party shall issue to Customer, on a monthly basis: (i) a
consolidated invoice billing in advance for base charges due, (ii) a
consolidated invoice billing in arrears for variable amounts due other than time
and materials charges, and (iii) a consolidated invoice billing in arrears for
time and materials charges (which shall include detail for each Service
Agreement and remaining balance information for time and materials services
included as part of base charges, substantially in the form of Schedule 7.1
hereto), all with respect to each Service Agreement. If out-of-scope Services
are provided under one or more Change Orders, Torch Party(ies) will invoice the
applicable charges in a separate, composite invoice for such services. Each
Torch Party agrees to waive any charges that it fails to invoice within six
months of the time such charges were due to be invoiced to Customer under this
Master Agreement, each Service Agreement and any Change Order.

Section 7.2  Payment

     (a)  Subject to Section 7.5, each invoice for variable amounts delivered
pursuant to Section 7.1 shall be due and payable within thirty (30) days after
the date such invoice is delivered to Customer; provided, however, that each
invoice for variable amounts with respect to Termination/Expiration Assistance
under Section 16.5 shall be due and payable within ten (10) days after such
invoice is delivered to Customer. Subject to Section 7.5, fifty percent (50%) of
each invoice for base amounts delivered pursuant to Section 7.1 shall be due and
payable on the later of five (5) days after the date such invoice is delivered
to Customer or the first of the month in which the Services covered by such
invoice are to be provided and the remaining fifty percent (50%) of each invoice
for base amounts delivered pursuant to Section 7.1 shall be due and payable on
the later of five (5) days after the date such invoice is delivered to Customer
or the fifteenth of the month in which the Services covered by such invoice are
to be provided.

     (b)  To the extent Customer is entitled to a credit from a Torch Party
pursuant to this Master Agreement or any Service Agreement, the Torch Party
shall provide Customer with such credit on the first invoice delivered after
such credit is earned. If the amount of any credits on an invoice exceeds the
amount owing to the Torch Party reflected on such invoice, the Torch Party shall
pay the balance of the credit to Customer within ten (10) days after the invoice
date.

Section 7.3  Proration

     All periodic charges under this Master Agreement or the Service Agreements
(excluding charges based upon actual usage or consumption of Services) shall be
computed on a calendar month basis and shall be prorated for any partial month.

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Section 7.4  Refunds

     If either Party receives from a third party a credit or refund or other
rebate for goods or services paid for by another Party, such other Party shall
be entitled to receive the same, and if it is in an amount that exceeds $25,000,
the recipient of a payment of such refund, credit or rebate shall promptly
notify the other Party and shall promptly pay to it the amount it receives
therefor (and if such amount is not so paid within 45 days of its receipt then
the recipient shall also pay interest, from the date of receipt, at the then-
current prime rate of Citibank of New York (or its successor), to the other
Party.

Section 7.5  Setoff and Withholding

     (a)  Notwithstanding any other provision of this Master Agreement, a Party
who is owed any undisputed amount by the other Party may, at its option, set off
that amount as a credit against any undisputed amounts it otherwise owes to the
other Party.

     (b)  If Customer reasonably disputes in good faith any portion of an
invoice delivered pursuant to Section 7.1, Customer shall nevertheless pay the
full dollar amount of such invoice when due. If Customer reasonably disputes in
good faith any other claim by a Torch Party for reimbursement of any amount,
Customer shall pay the dollar amount due that is not so disputed and may, at its
option, withhold such disputed portion pending resolution of the dispute by
mutual agreement or pursuant to Article 17 of this Master Agreement. If Customer
withholds any amount pursuant to the preceding sentence, Customer shall notify
the Torch Party of the basis for such withholding in accordance with Section
18.9. Upon resolution of the dispute, Customer shall pay to the Torch Party such
portion, if any, of such disputed amount determined to be owing to the Torch
Party. If the dispute with respect to a disputed item is not resolved within 90
days and the amount reasonably in dispute exceeds $50,000 then the reasonably
disputed amounts will, upon request, be deposited by the Parties into an escrow
account within five business days. If the invoice amounts reasonably in dispute
aggregate more than $250,000 then the reasonably disputed amounts will, on
request, be deposited by the Parties into an escrow account within five business
days. In either case the escrow account shall be with a third party escrow agent
that shall be a United States National Bank selected by the Party making the
escrow deposit, pending resolution of the dispute by mutual agreement or
pursuant to Article 17 of this Master Agreement.

     (c)  If a Torch Party reasonably disputes in good faith any request for
issuance of a credit or other claim by Customer for reimbursement of any amount,
the Torch Party shall pay or credit the dollar amount due that is not so
disputed and may, at its option, withhold such disputed portion pending
resolution of the dispute by mutual agreement or pursuant to Article 17 of this
Master Agreement. If the Torch Party withholds any payment or credit pursuant to
this Section 7.5(c), the Torch Party shall notify Customer of the basis for such
withholding in accordance with Section 18.9. Upon resolution of the dispute, the
Torch Party shall pay (in the case of a payment dispute) or credit (in the case
of a credit dispute) to Customer such portion, if any, of such disputed amount
determined to be owing to Customer. If the dispute with respect to a

                                      -13-
<PAGE>

disputed item is not resolved within 90 days and the amount reasonably in
dispute exceeds $50,000 then the reasonably disputed amounts will, upon request,
be deposited by the Torch Party into an escrow account within five business
days. If the amounts reasonably in dispute withheld by the Torch Party aggregate
more than $250,000, then the reasonably disputed amounts will, upon request, be
deposited by the Torch Party into an escrow account within five business days.
In either case the escrow account shall be with a third party escrow agent that
shall be a United States National Bank selected by the Party making the escrow
deposit, pending resolution of the dispute.

     (d)  The phrase "reasonably in dispute" shall mean that the parties to the
dispute are in compliance with Section 18.14.


                                   ARTICLE 8
                 INTELLECTUAL PROPERTY RIGHTS AND OBLIGATIONS

Section 8.1  Non-Infringement

     Each Party agrees that it shall perform its obligations under this Master
Agreement and all Service Agreements and Change Orders in a manner that does not
constitute an infringement or misappropriation of any United States patent,
copyright, trademark, trade secret or other intellectual property right of any
third party.


                                   ARTICLE 9
                        CONFIDENTIALITY AND COMPETITION

Section 9.1  Rights, Restrictions and Obligations of the Receiving Party

     (a)  During the Term, the Receiving Party may:

          (i)   disclose Confidential Information received from the Disclosing
Party to its employees, officers and directors and Affiliates who have a need to
know such information exclusively for the purpose of executing obligations or
exercising rights under this Master Agreement or any Service Agreement or Change
Order;

          (ii)  reproduce the Confidential Information received from the
Disclosing Party as required to perform its obligations or exercise its rights
under this Master Agreement or any Service Agreement;

          (iii) disclose Confidential Information as required by law, provided
the Receiving Party, to the extent practicable, gives the Disclosing Party
reasonable notice prior to

                                      -14-
<PAGE>

such disclosure to allow the Disclosing Party to make an effort to obtain a
protective order or otherwise protect the confidentiality of such information;
and

          (iv) disclose the terms of a Service Agreement to a third party who is
not a competitor of the Disclosing Party, but only if: (A) such third party
agrees in writing that it shall comply with the confidentiality obligations
applicable to the Receiving Party under this Article 9 and (B) such writing
provides that the Disclosing Party is an intended third party beneficiary
thereof.

     (b)  Except as otherwise specifically provided in this Master Agreement or
any Service Agreement, the Receiving Party shall not:

          (i)  disclose, in whole or in part, any Confidential Information
received directly or indirectly from the Disclosing Party; or

          (ii) sell, rent, lease, transfer, encumber, pledge, reproduce,
publish, transmit, translate, modify, reverse engineer, decompile, disassemble
or otherwise use the Confidential Information in whole or in part.

     (c)  The Receiving Party shall exercise the same care in preventing
unauthorized disclosure or use of the Confidential Information that it takes to
protect its own information of a similar nature, but in no event less than
reasonable care.  Reasonable care includes, without limiting the generality of
the foregoing:

          (i)  informing its directors, officers, employees and Affiliates and,
where applicable, their respective directors, officers and employees (and agents
and subcontractors, who have access to Disclosing Party's Confidential
Information), of the confidential nature of the Confidential Information and the
terms of this Master Agreement, directing them to comply with these terms, and
obtaining their written acknowledgment that they have been so informed and
directed, and their written agreement to abide by reasonable terms and that the
Disclosing Party is an intended third party beneficiary of such agreement; and

          (ii) notifying the Disclosing Party promptly upon discovery of any
loss, unauthorized disclosure or use of Confidential Information, or any other
breach of this Article by the Receiving Party, and assisting the Disclosing
Party in every reasonable way to help the Disclosing Party regain possession of
the Confidential Information and to prevent further unauthorized disclosure or
use.

     (d)  The Receiving Party acknowledges that:

          (i)  the Disclosing Party possesses and will continue to possess
Confidential Information that has been created, discovered or developed by or on
behalf of the Disclosing Party, or otherwise provided to the Disclosing Party by
third parties, which information has commercial value and is not in the public
domain;

                                      -15-
<PAGE>

          (ii)  unauthorized use or disclosure of Confidential Information is
likely to cause injury not readily measurable in monetary damages, and therefore
irreparable;

          (iii) in the event of an unauthorized use or disclosure of
Confidential Information, the Disclosing Party shall be entitled, without
waiving any other rights or remedies, to such injunctive or equitable relief as
may be deemed proper by a court of competent jurisdiction;

          (iv)  subject to the rights expressly granted to the Receiving Party
in this Master Agreement or in any Service Agreement, the Disclosing Party and
its licensors retain all right, title and interest in and to the Confidential
Information, including without limiting the generality of the foregoing, title
to all Confidential Materials regardless of whether provided by or on behalf of
the Disclosing Party or created by the Receiving Party; and

Section 9.2  Rights and Remedies of the Disclosing Party

     (a)  At the expiration or earlier termination of this Master Agreement or
any applicable Service Agreement, the Receiving Party shall:

          (i)   return all Confidential Materials (other than those covered by
Section 9.2(a)(ii), including, without limitation, all originals, copies,
reproductions and summaries of Confidential Information; and

          (ii)  destroy all copies of Confidential Information in its
possession, power or control, which are present on magnetic media, optical disk,
volatile memory or other storage device, in a manner that assures the
Confidential Information is rendered unrecoverable.

Upon completion of those tasks an officer of the Receiving Party shall provide
written confirmation to the Disclosing Party that the requirements of this
Section have been complied with.

     (b)  The Disclosing Party may visit the Receiving Party's premises, upon
reasonable prior notice and during normal business hours, to review the
Receiving Party's compliance with the terms of this Section.

     (c)  In the event of an unauthorized disclosure of Confidential Information
by the Receiving Party, the Disclosing Party shall have the right to: (i) seek
appropriate injunctive relief to prevent any further disclosure where there
exists reasonable grounds to believe that the unauthorized disclosure may
continue; and/or (ii) pursue the dispute resolution procedure pursuant to
Article 17 to recover damages related to the disclosure.  A material breach of
the confidentiality provisions of this Article 9 that is not fully cured within
30 days after notice to the breaching party shall then give rise to a right of
the non-breaching party(ies) to terminate immediately this Master Agreement
and/or each Service Agreement for cause.  In the event of a

                                      -16-
<PAGE>

termination for cause resulting from a breach of confidentiality obligations
owed to a Torch Party, Torch shall not be required to provide the
Termination/Expiration Assistance specified in Section 16.7.

Section 9.3  Ownership of Business Records and Data

     Each Party's Business Records and Data shall remain its property. A Party's
Business Records and Data shall not without its consent (which may be withheld
or delayed in such Party's sole and absolute discretion) be: (i) used by another
Party other than in connection with obligations hereunder, (ii) disclosed, sold,
assigned, leased or otherwise provided to third parties by another Party, or
(iii) commercially exploited by or on behalf of another Party. All Business
Records and Data obtained solely for Customer's benefit and separately paid for
by Customer shall be acquired in Customer's name.

Section 9.4  Return of Business Records and Data

     A Party shall upon request by another Party at any time (if such requesting
Party reimburses related out-of-pocket costs and, in the case of a request by
Customer, pays related data processing charges at the Torch Party's published
rates) promptly return to such other Party such other Party's Business Records
and Data.

Section 9.5  Security

     (a)  Each Party will establish and comply with commercially reasonable
security procedures during the Term of this Master Agreement and any Service
Agreement for the security of each other Party's Business Records, Confidential
Information and Data. Each Party may periodically, at reasonable frequencies and
times, inspect other Parties' facilities to ensure compliance with this Section.

     (b)  Since a Party's personnel may have access to another Party's financial
information and other information that, if utilized or disclosed could lead to
violations of the applicable securities laws, each Party covenants that it (i)
will not trade in securities of another Party in violation of applicable
securities laws and (ii) will maintain a policy that its employees will not
trade in securities of another Party in violation of any applicable securities
laws.

Section 9.6  Destroyed or Lost Business Records or Data

     No Party will delete or destroy another Party's Business Records or Data
without prior written authorization except in accordance with a records
retention policy agreed by the Parties.  In the event any Party's Business
Records or Data are lost or destroyed due to any act or omission of another
Party in breach of the security procedures described in this Article 9 and/or
any Service Agreement, such other Party shall use all commercially reasonable
efforts to regenerate or replace such Business Records or Data and the Parties
agree to cooperate to provide

                                      -17-
<PAGE>

any available information, files or raw data needed for the regeneration of the
Business Records or Data.

Section 9.7  Non-Competition and Business Opportunities

     (a)  Customer agrees that it shall not compete with Novistar for the
provision of services, in Novistar's lines of business (as operated on the
Effective Date), to third parties, during the term of any Service Agreement to
which Novistar is a party, and for three years after such term; provided,
however, that Customer may: (i) provide services to third parties in the
ordinary course of its business as an operator to Customer's Affiliates and to
Customer's venture partners; and (ii) provide services that are merely
incidental to good practice and efficient management of the services Customer
provides in the ordinary course of business otherwise conducted in compliance
with this Section 9.7.

     (b)  Each Torch Party agrees, that, during the term of any Service
Agreement to which it is a party and for three years after such term, the Torch
Party shall act in good faith to determine which business opportunities arising
during such term rightfully belong to Customer and shall refrain from usurping
such business opportunities.


                                  ARTICLE 10
                         MANAGEMENT AND SUBCONTRACTING

Section 10.1 Contract Executives and Personnel

     Section 10.1.1   Contract Executives

     Each of the Service Agreements shall identify a Contract Executive for each
Party thereto, which such Party may change from time to time by written notice
to the other Parties.  The Customer Contract Executive shall have the authority
to act on behalf of Customer with respect to all matters relating to the
services included in the applicable Service Agreement, and the Contract
Executive for any Torch Party shall have the authority to act on behalf of such
Torch Party with respect to all matters relating to the services included in the
applicable Service Agreement.

     Section 10.1.2   Workplace Rules

     All personnel of another Party while at any Party's facility shall abide by
the workplace rules and regulations applicable to such Party's own employees.

                                      -18-
<PAGE>

     Section 10.1.3  Torch Services to Third Parties

     Customer recognizes that Torch personnel providing Services to Customer
under this Master Agreement may perform similar services from time to time for
other persons, including competitors of Customer. This Master Agreement shall
not prevent Torch from using such personnel (or any Torch equipment) for the
purpose of performing such similar services for such other persons provided
that: Torch complies with its obligations concerning Customer's Confidential
Information.

Section 10.2  Management Board

     The Parties shall establish and maintain a Management Board, which shall be
composed of three representatives of each Party including at least one senior
executive of each Party. The initial representatives and their positions with
Customer and Torch Parties are set forth in Schedule 10.2. The Management Board
will meet at least quarterly. The general responsibilities of the Management
Board shall be: (i) to monitor the general progress of the performance of this
Master Agreement and the Service Agreements; (ii) to analyze and attempt to
resolve problems referred by the Contract Executives; (iii) subject to the last
sentence of this Section, to approve and implement Change Orders (including
material changes in the Services); and (iv) resolve disputed invoice amounts
where possible. No Change Order resulting in charges in excess of $50,000.00
will be binding without the express written consent (which may be withheld or
delayed in a Party's sole and absolute discretion) of a majority of each
affected Party's Management Board members.

Section 10.3  Subcontracting

     Except as provided herein or in a Service Agreement or Change Order, each
Torch Party shall be solely responsible for paying any subcontractors it uses to
provide Services under this Master Agreement or any Service Agreement.
Subcontracting shall not relieve a Torch Party of its obligations under this
Master Agreement or any Service Agreement.

Section 10.4  Hiring of Employees

     Customer shall not (without the written consent of the affected Torch Party
which the Torch Party may withhold or delay in its sole and absolute
discretion), during the term of any Service Agreement and for a period of twelve
(12) months thereafter, solicit or hire any person who is an employee of a Torch
Party, except that upon termination of a Service Agreement (i) Customer may
extend offers to "Dedicated Employees" (as defined) who are not "Restricted
Employees" (as defined), and (ii) Customer may extend offers to employees whom
the Torch Party has identified in an officer's certificate delivered pursuant to
the provisions of this Section 10.4 and/or Section 16.2. A "Dedicated Employee"
is any employee of a Torch Party to the terminating Service Agreement who has
worked on Customer matters for more than three-fourths of that person's reported
time in the Torch Parties' timekeeping system(s) during the previous six (6)
months (or during the period since the Effective Date, if such period is less
than six (6)

                                      -19-
<PAGE>

months). A "Restricted Employee" is an employee, other than an hourly field
employee, that a Torch Party designates as such not to exceed thirty percent of
its "Dedicated Employees" but not to be less than three (3) employees for each
Service Agreement. In connection with each termination of this Agreement or any
Service Agreement, each affected Torch Party shall as soon as practicable
provide notice in writing to Customer identifying (i) each affected employee who
is a Dedicated Employee for purposes of such agreement and (ii) whether the
employee is a Restricted Employee. As soon as practicable thereafter Customer
shall provide written notice to the appropriate Torch Party specifying by name
each Dedicated non-Restricted employee that Customer intends in good faith to
hire as its own permanent employee under the provisions of this Section 10.4. As
soon as practicable thereafter the Torch Party shall deliver an officer's
certificate attesting to the identity of persons whose employment is being
terminated as a result of such agreement's termination (and that the agreement's
termination was the predominant reason for the employee's termination) with
respect to whom the Torch Party intends to require reimbursement from Customer
of severance costs pursuant to Section 16.2. Customer shall not, in any event,
assist another service provider in recruiting employees of a Torch Party;
provided, however, that merely providing a reference or other similar routine
information shall not be treated as assistance for purposes of this sentence.

Section 10.5  Key Personnel

     Up to six persons may be designated as Key Personnel in Schedule 10.5. The
applicable Torch Party shall consult with Customer on any removal of any such
person from the person's position (or any substantial change in such person's
duties in providing Service to Customer) and on the selection of any replacement
for any such person, who shall in any event be appropriately qualified. Customer
may amend Schedule 10.5 from time to time; provided, however, that: (i) any such
amendment may only designate Dedicated Employees or replacements for persons
designated as Key Personnel who have left the employ of the Torch Party (except
with the applicable Torch Party's consent which may be withheld or delayed in
the Torch Party's sole and absolute discretion); and (ii) the number of Key
Persons shall not exceed six at any time; and (iii) any such amendment shall
have only prospective effect.


                                  ARTICLE 11
                                    AUDITS

Section 11.1  Audit Rights

     The applicable Torch Party shall maintain records and supporting
documentation of all financial and non-financial transactions under this Master
Agreement and all Service Agreements and all Change Orders, sufficient to
reasonably permit an audit thereof in accordance with this Section 11.1. Each
Torch Party shall at no charge provide reasonable access for one audit each
calendar year to Customer's contract and financial statement auditors, who have
signed confidentiality agreements reasonably satisfactory to the applicable
Torch Party, to examine the Torch Parties' charges and performance of the
Services under this Master Agreement and any

                                      -20-
<PAGE>

Service Agreement and to perform audits and inspections of Customer and its
business and of the systems that process, store, support and transmit Customer's
Data, solely so that its financial statement auditors can verify the integrity
of Customer's Business Records and Data. Each Torch Party shall, at Customer's
expense in accordance with a Change Order, provide access at reasonable times
agreed by the Parties: (i) to all such records and supporting documentation
relating to the Services to Customer necessary for its joint venture auditors or
regulatory auditors solely to perform audits and inspections of Customer and its
business and (ii) to Customer's financial statement auditors to the systems that
process, store, support and transmit Customer's Data solely so that its auditors
can verify the integrity of Customer's Business Records and Data. Torch Parties
shall provide reasonable cooperation to such auditors, inspectors, regulators
and representatives, including the installation and operation of audit software.
The applicable Torch Parties shall, at their own expense, provide Customer with
an annual SAS 70 (type II) audit regarding the Torch Party; provided, however,
Customer shall be given the opportunity to participate in determining the scope
of the audit.

Section 11.2  Payments

     If an audit reveals that a Torch Party has overcharged Customer for
Services during either of the two (2) then-preceding calendar years, the Torch
Party promptly shall reimburse the undisputed amount of any overcharges.

Section 11.3  Survival

     Sections 11.1 through 11.3 shall (i) apply with respect to a Torch Party
while a Service Agreement to which the Torch Party is a party and (ii) continue
to the third (3d) anniversary thereafter, after which time Sections 11.1 through
11.3 shall no longer apply to the Torch Party.

Section 11.4  TEAI Financial Statements

     While a Service Agreement to which a Torch Party is a party remains in
effect, TEAI shall make available to Customer at no additional charge TEAI's
annual audited financial statements, within ninety (90) days after the end of
the year that the statements cover, as well as its quarterly unaudited financial
statements, within forty-five (45) days after the end of the quarter that the
statements cover.  TEAI shall make available its appropriate personnel to answer
reasonable questions related to the financial condition of TEAI.

                                      -21-
<PAGE>

                                  ARTICLE 12
                            INSURANCE; RISK OF LOSS

Section 12.1  Required Insurance Coverages

     Throughout the Term, each Party (except with respect to a coverage
identified as Torch only) shall maintain in force, at minimum, the insurance
coverages described below. Additional insurance coverage(s) may be required
under a Service Agreement.  Each Torch Party may satisfy its insurance
requirements as a named insured on a policy that covers other parties within the
same policy limit, which limit shall conform to the requirements set forth
below.

     (a)  Commercial General Liability Insurance with a minimum combined single
limit of $3 million per occurrence and minimum general aggregate limit of $5
million;

     (b)  Umbrella Liability Insurance with a minimum limit of $50 million per
occurrence and minimum aggregate amount of $50 million;

     (c)  Worker's Compensation Insurance or any alternative plan or coverage as
permitted or required by applicable law and employers liability insurance with a
minimum occurrence limit of $500,000;

     (d)  Except with respect to Customer, Comprehensive Errors and Omissions
Insurance, for Torch only, covering the liability for financial loss due to
error, omission or negligence, by Torch, with a minimum amount of $5 million;

     (e)  Automotive Liability Insurance covering use of all owned, non-owned
and hired automobiles with a minimum combined single limit of $3 million per
occurrence for bodily injury and property damage liability;

     (f)  "All Risk" Property Insurance, for Torch only, in an amount equal to
the replacement value of the equipment used to provide the Services;

     (g)  Employee Dishonesty and Computer Fraud Insurance for loss arising out
of or in connection with fraudulent or dishonest acts committed by the employees
of a Party, acting alone or in collusion with others, in a minimum amount of $5
million per occurrence.

     (h)  Employment Practice Liability Insurance in a minimum amount of $5
million.

Section 12.2  General Insurance Requirements

     All insurance policies a Party is required to carry pursuant to this
Article shall: (i) be primary as to its negligence and non-contributing with
respect to any other insurance or self-insurance another Party may maintain;
(ii) name the other Parties, its Affiliates, subsidiaries and their respective
officers, directors and employees as additional insureds, as such parties'
interests

                                      -22-
<PAGE>

may appear with respect to this Master Agreement; (iii) be provided by reputable
and financially responsible insurance carriers with a Best's minimum rating of
"A-" (or any future equivalent) and minimum Best's financial performance rating
of "6" (or any future equivalent); (iv) require the insurer to notify the other
Parties in writing at least forty-five (45) days in advance of cancellation or
modification; and (v) include a waiver of all rights of subrogation against each
other Party and its Affiliates. Each Party shall cause its insurers to issue to
the other Parties on or before the Effective Date and each policy renewal date
certificates of insurance evidencing that the coverages and policy endorsements
required by this Article are in effect.


                                  ARTICLE 13
                    CERTAIN REPRESENTATIONS AND WARRANTIES

Section 13.1  Mutual Representations and Warranties

     Each Party represents and warrants that, as of the Effective Date and
continuing throughout the Term:

     (a)  It is a corporation duly incorporated, validly existing and is in good
standing under the laws of the state in which it is incorporated, and is
qualified as a foreign corporation and in good standing in each other
jurisdiction where the failure to be so would have a material adverse effect on
its business or its ability to perform its obligations under this Master
Agreement or any Service Agreement to which it is a party.

     (b)  It has all necessary corporate power and authority to own, lease and
operate its assets and to carry on its business as presently conducted and as it
will be conducted pursuant to this Master Agreement and each Service Agreement
to which it is a party.

     (c)  It has all necessary corporate power and authority to enter into this
Master Agreement and each Service Agreement to which it is a party and to
perform its obligations hereunder and thereunder, and the execution and delivery
of this Master Agreement and each Service Agreement to which it is a party, and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate actions on its part.

     (d)  This Master Agreement and each Service Agreement to which it is a
party constitutes a legal, valid and binding obligation of such Party,
enforceable against it in accordance with its terms.

     (e)  It has not violated and it will not violate any applicable laws or
regulation regarding the offering of unlawful inducement in connection with this
Master Agreement or any Service Agreement.

     (f)  It has and shall have the right and authority to use any software or
other intellectual property provided by it in connection with the Services.

                                      -23-
<PAGE>

     (g)  It is not a party to, and is not bound or affected by or subject to,
any instrument, agreement, charter or by-law provision, law, rule, regulation,
judgment or order which would be contravened or breached as a result of the
execution of this Master Agreement, consummation of the transactions
contemplated by this Master Agreement, or execution of, and consummation of the
transaction contemplated by, any fully executed Service Agreement.


                                  ARTICLE 14
                                INDEMNIFICATION

Section 14.1   Indemnification by Customer.

     (a)  Customer hereby agrees to indemnify, defend and hold harmless each
Torch Party's Indemnitees from and against all liability, expense (including
without limitation court costs, attorneys' fees and related expenses) and claims
for damage of any nature whatsoever, whether known or unknown and whether direct
or indirect, as though expressly set forth and described herein, which the
indemnified party may incur, suffer, become liable for or which may be asserted
or claimed against the indemnified party to the extent resulting from the
negligent acts, willful misconduct or statutory violations of Customer.

     (b)  Customer shall, except to the extent a Torch Party acts in a non-
operator capacity or with gross negligence or willful misconduct, indemnify,
defend and hold harmless each Torch Party's Indemnitees from and against all
liability, expense (including without limitation court costs, attorneys' fees
and related expenses) and claims for damage of any nature whatsoever, whether
known or unknown and whether direct or indirect, as though expressly set forth
and described herein, which the indemnified party may incur, suffer, become
liable for or which may be asserted or claimed against the indemnified party, to
the extent arising from or in connection with the performance (or non-
performance) of obligations, under this Master Agreement, the Service Agreements
and the Change Orders, by a Torch Party.

Section 14.2  Indemnification by Torch.

     Except to the extent a Torch Party is entitled to indemnification by
Customer under Section 14.1(b) for such claim or has merely followed Customer's
instructions, each Torch Party hereby agrees to indemnify, defend and hold
harmless the Customer's Indemnitees from and against all liability, expense
(including without limitation court costs, attorneys' fees and related expenses)
and claims for damage of any nature whatsoever, whether known or unknown and
whether direct or indirect, as though expressly set forth and described herein,
which the indemnified party may incur, suffer, become liable for or which may be
asserted or claimed against the indemnified party to the extent resulting from
the negligent acts, willful misconduct or statutory violations of the Torch
Party.

                                      -24-
<PAGE>

Section 14.3  Joint and Concurrent Negligence.

     Customer and the Torch Parties expressly agree that the provisions of this
Article 14 shall not be limited to the sole negligence, willful misconduct or
statutory violation of one of them, but shall also apply to matters in which
more than one of them has committed: (i) negligent acts, (ii) acts of willful
misconduct and/or (iii) statutory violations.  In such event(s), if any of them
advances funds, in connection with such a matter that is otherwise subject to
this Article 14, in excess of its pro rata share, with due regard for the
allocation of risks and responsibilities and duties of indemnification to it set
forth in this Article 14, such party shall be indemnified by each other
committing party not to exceed such other committing party's pro rata share,
with due regard for the allocation of risks and responsibilities and duties of
indemnification to it set forth in this Article 14.

Section 14.4  Intellectual Property Indemnification

     Each Party agrees to defend the other Parties against any action to the
extent that such action is based on a claim that any software or other
intellectual property provided by the indemnitor or the Confidential Information
provided by the indemnitor: (a) infringes a copyright perfected under applicable
law, (b) infringes a United States patent granted under applicable law or (c)
constitutes an unlawful disclosure, use or misappropriation of another party's
trade secret.  The indemnitor will bear the expense of such defense and pay any
damages and attorneys' fees that are attributable to such claim finally awarded
by a court of competent jurisdiction.  If any software, other intellectual
property or Confidential Information becomes the subject of a claim under this
Section, or in the indemnitor's opinion is likely to become the subject of such
a claim, then the indemnitor may, at its option, (a) modify the software, other
intellectual property or Confidential Information to make it noninfringing or
cure any claimed misuse of another's trade secret, provided such modification
does not adversely affect functionality used by the indemnitee, or (b) procure
for the indemnitee the right to continue using the software, other intellectual
property or Confidential Information, pursuant to the applicable Service
Agreement, or (c) replace the software or other intellectual property or
Confidential Information with a substantial equivalent that is noninfringing or
that is free of claimed misuse of another's trade secret.  Any costs associated
with implementing any of the above alternatives shall be borne by the
indemnitor.

Section 14.5  Indemnification Procedures

     (a)  Promptly after receipt by an indemnitee of any written claim or notice
of any action giving rise to a claim for indemnification by the indemnitee, the
indemnitee shall so notify the indemnitor and shall provide copies of such claim
or any documents relating to the action.  No failure to so notify an indemnitor
shall relieve the indemnitor of its obligations under this Master Agreement
except to the extent that the failure or delay is prejudicial.  Within thirty
(30) days following receipt of such written notice, but in any event no later
than ten (10) days before the deadline for any responsive pleading, the
indemnitor shall notify the indemnitee in writing (a

                                      -25-
<PAGE>

"Notice of Assumption of Defense") if the indemnitor elects to assume control of
the defense and settlement of such claim or action (and in the event of such
election shall be deemed to have waived any right it may have to later assert
that the claim or action is not subject to indemnification hereunder).

     (b)  If the indemnitor delivers a Notice of Assumption of Defense with
respect to a claim within the required period, the indemnitor shall have sole
control over the defense and settlement of such claim; provided, however, that
(i) the indemnitee shall be entitled to participate in the defense of such claim
and to employ counsel at its own expense to assist in the handling of such claim
and (ii) the indemnitor shall obtain the prior written approval (which may be
withheld or delayed in indemnitee's sole and absolute discretion) of the
indemnitee before entering into any settlement of such claim or ceasing to
defend against such claim.  After the indemnitor has delivered a timely Notice
of Assumption of Defense relating to any claim, the indemnitor shall not be
liable to the indemnitee for any legal expenses incurred by such indemnitee in
connection with the defense of such claim; provided, that the indemnitor shall
pay for separate counsel for the indemnitee to the extent that conflicts or
potential conflicts of interest between the Parties so require.  In addition,
the indemnitor shall not be required to indemnify the indemnitee for any amount
paid by such indemnitee in the settlement of any claim for which the indemnitor
has delivered a timely Notice of Assumption of Defense if such amount was agreed
to without prior written consent of the indemnitor, which shall not be
unreasonably withheld or delayed in the case of monetary claims.  An indemnitor
may withhold or delay consent to settlement of claims of infringement affecting
its proprietary rights in its sole and absolute discretion.

     (c)  If the indemnitor does not deliver a Notice of Assumption of Defense
relating to a claim within the required notice period, the indemnitee shall have
the right to defend the claim in such a manner as it may deem appropriate, at
the cost and expense of the indemnitor.  The indemnitor shall promptly reimburse
the indemnitee for all such costs and expenses upon written request therefor.

Section 14.6  Subrogation

     In the event an indemnitor indemnifies an indemnitee pursuant to this
Article, the indemnitor shall, upon payment in full of such indemnity, be
subrogated to all of the rights of the indemnitee with respect to the claim to
which such indemnity relates.

Section 14.7  Express Negligence

     THE INDEMNIFICATION PROVISIONS IN THIS AGREEMENT SHALL BE APPLICABLE
WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY
OR IN PART FROM THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, OTHER THAN THOSE
LOSSES, COSTS, EXPENSES AND DAMAGES ATTRIBUTABLE TO THE GROSS NEGLIGENCE AND/OR
WILLFUL MISCONDUCT OF A PARTY.  CUSTOMER AND THE TORCH PARTIES

                                      -26-
<PAGE>

ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS
CONSPICUOUS.


                                  ARTICLE 15
                          LIABILITY AND FORCE MAJEURE

Section 15.1  Liability

     Subject to the limitations set forth in this Article, a Party that breaches
any obligation under this Master Agreement or a Service Agreement or Change
Order (except for any obligation to which a Service Level Credit or other
liquidated damages provision applies, under this Master Agreement or a Service
Agreement or a Change Order) shall be liable to each other Party except that
with respect to TOC or Novistar in performance of operator responsibilities: (a)
if under any joint operating agreement, TOC or Novistar, as the case may be,
shall only be liable for damages attributable to gross negligence or willful
misconduct in the performance of such responsibilities; and (b) if not under any
joint operating agreement, Customer shall be deemed to have entered into a joint
operating agreement having the provisions set forth on the attached Exhibit 15.1
(1).

Section 15.2  Limit on Types and Amounts of Damages Recoverable

     (a)  EXCEPT AS SET FORTH IN CLAUSE (b) BELOW, NO PARTY SHALL BE LIABLE FOR
CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST REVENUE
AND/OR PROFITS) OR ANY EXEMPLARY OR PUNITIVE DAMAGES, REGARDLESS OF THE FORM OF
ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE, AND EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

     (b)  The exclusion set forth in clause (a) shall not apply to (i) Losses
otherwise recoverable by an indemnitee pursuant to Article 14 (Indemnification),
(ii) breach by a Party of its obligations for intentional acts with respect to
Confidential Information, or (iii) damages caused by a Party's willful
misconduct.

     (c)  The total liability under this Master Agreement, Service Agreements
and Change Orders, of each Torch Party shall be limited to six (6) months' fees
under the Service Agreements to which it is a party; provided, however, that the
total liability (including without limitation liability under indemnification
provisions under this Agreement) of the Torch Parties (aggregated) for gross
negligence or willful misconduct shall be limited to $5.0 million.

                                      -27-
<PAGE>

Section 15.3  Force Majeure

     (a)  Subject to clause (b) below, neither Party shall be liable for any
failure or delay in the performance of its obligations, other than payment
obligations, under this Master Agreement or any Service Agreement or Change
Order, to the extent such failure or delay is caused, directly or indirectly,
without fault by such Party, by any cause beyond the reasonable control of such
Party.

     Events meeting the criteria set forth in the next preceding paragraph are
referred to collectively as "Force Majeure Events." The Parties expressly
acknowledge that, except as otherwise expressly provided in a Service Agreement,
Force Majeure Events do not include third party non-performance except to the
extent caused by an event that would be a Force Majeure Event with respect to a
Party; provided, however, that Force Majeure Events shall include disruptions
caused by third party failures of public utilities, building facilities,
communications facilities or public safety functions.

     (b)  Upon the occurrence of a Force Majeure Event, the non-performing Party
shall be excused from any further performance or observance of the affected
obligation(s) for as long as such circumstances prevail and such Party continues
to attempt to recommence performance or observance whenever and to whatever
extent possible without delay. Any Party so delayed in its performance will
immediately notify the other by telephone or by the most timely means otherwise
available (to be confirmed in writing within two (2) Business Days of the
inception of such delay) and describe in reasonable detail the circumstances
causing such delay.

Section 15.4  Actions of Other Party

     Neither Party shall be liable for any failure or delay in the performance
of its obligations under this Master Agreement or any Service Agreement if and
to the extent such failure or delay is caused by the actions or omissions of the
other Party or breaches of this Master Agreement, or a Service Agreement or
Change Order, by the other Party, provided that the Party which is unable to
perform has provided the other Party with reasonable notice of such non-
performance.

                                  ARTICLE 16
                                  TERMINATION

Section 16.1  Termination for Cause

     (a)  A party to a Service Agreement shall have the option, but not the
obligation, to terminate any Service Agreement for cause for a material breach
of such Service Agreement by another party thereto that is not cured by the
other party within thirty (30) days of the date on which such Party was provided
written notice of such breach;

     (b)  A Party shall exercise its termination option under this Section 16.1
by delivering to the affected Party(ies) written notice of such termination
identifying the termination date.

                                      -28-
<PAGE>

     (c)  Each Torch Party shall have the option, but not the obligation, to
terminate for cause any or all Service Agreements and/or this Master Agreement,
if Customer fails to pay when due amounts Customer owes to a Torch Party under a
Change Order and/or a Service Agreement and/or this Master Agreement, if
Customer fails to cure such failure within ten (10) days after delivery to
Customer of written notice of exercise of rights under this Section 16.1(c).

Section 16.2  Termination for Convenience

     (a)  Customer shall have the option, but not the obligation, to terminate
for convenience this Master Agreement (together with all Service Agreements) or,
from time to time, one or more Service Agreements. Customer shall exercise its
termination option by delivering to the applicable Torch Party written notice of
such termination identifying the agreement(s) being terminated and identifying
the termination date (which, except as provided in a Service Agreement, shall be
at least ninety (90) days after the delivery to the Torch Party of such notice).

     (b)  Customer shall pay the Torch Party thereto a termination fee, with
respect to each Service Agreement terminated under this Section 16.2, equal to
the greater of: (i) 0.50 multiplied by the number of months remaining in the
agreement's term multiplied by the previous calendar year's fees and incentives
earned divided by 12 or (ii) 0.50 multiplied by the number of months remaining
in the agreement's term multiplied by the current calendar year's fees earned
(together with estimated incentive fees) annualized to 12 months equivalent
divided by 12 ("current" and "previous" to be determined with reference to such
notice delivery date); provided, however, that in no event shall such
termination fee, if with respect to a Service Agreement being terminated under
this Section 16.2 after the end of the first third of its initial term, exceed
the greater of: (i) the previous calendar year's fees and incentives earned or
(ii) the current calendar year's fees earned (together with estimated incentive
fees) annualized to 12 months equivalent.

     (c)  In connection with each termination of an agreement pursuant to this
Section 16.2, Customer shall be responsible, upon delivery of an officer's
certificate pursuant to Section 10.4, for the severance costs incurred pursuant
to the applicable Torch Party's then-current severance policies in connection
with the termination of each employee identified on such certificate, except for
each employee who (i) Customer offers a comparable position at Customer that the
employee does not accept; or (ii) Customer employs in a comparable position for
at least 12 months after such termination; or (iii) Customer employs in a
comparable position until such person's voluntary termination or termination for
cause.

     Customer may seek to withdraw certain assets or services from a Service
Agreement, not to exceed an aggregate over the term of such agreement of twenty
percent (20%) of the annualized base and variable fees (based on the most recent
three months billings under such agreement), by Change Order delivered to the
related Torch Party, whereupon the Torch Party shall propose a reasonable credit
or reduction in charges for the withdrawn assets or services, which credit or
reduction shall bear a reasonable relation to the Torch Party's costs associated

                                      -29-
<PAGE>

with the assets or services. As soon as practicable thereafter, Customer shall
advise the Torch Party whether Customer will proceed with such withdrawal. As
soon as practicable thereafter the Torch Party shall deliver an officer's
certificate attesting to the identity of persons whose employment is being
terminated as a result of such withdrawal (and that the withdrawal is the
predominant reason for the employee's termination) with respect to whom the
Torch Party intends to require reimbursement from Customer of severance costs
pursuant to this Section 16.2. In connection with each such withdrawal, Customer
shall be responsible, upon delivery of such officer's certificate, for the
severance costs incurred pursuant to the applicable Torch Party's then-current
severance policies in connection with the termination of each employee
identified on such certificate, except for each employee who (i) Customer offers
a comparable position at Customer that the employee does not accept; or (ii)
Customer employs in a comparable position for at least 12 months after such
termination; or (iii) Customer employs in a comparable position until such
person's voluntary termination or termination for cause.

Section 16.3  Termination for Insolvency

     A Party shall have the option, but not the obligation, to terminate this
Master Agreement in its entirety (including all Service Agreements) without
payment of any applicable termination fees if a Party (i) becomes insolvent or
is unable to meet its debts as they mature, (ii) files a voluntary petition in
bankruptcy or seeks reorganization or to effect a plan or other arrangement with
creditors, (iii) files an answer or other pleading admitting, or fails to deny
or contest, the material allegations of an involuntary petition filed against it
pursuant to any applicable statute relating to bankruptcy, arrangement or
reorganization, (iv) shall be adjudicated a bankrupt or shall make an assignment
for the benefit of its creditors generally, (v) shall apply for, consent to or
acquiesce in the appointment of any receiver or trustee for all or a substantial
part of its property, or (vi) any such receiver or trustee shall be appointed
and shall not be discharged within thirty (30) days after the date of such
appointment; provided, however, that in the event of a termination under Section
16.3(i) by reason of Customer's insolvency, the Customer shall have the right to
purchase the terminated Services on a prepaid basis on otherwise substantially
the same terms as applicable under this Agreement, but only if it has previously
satisfied all of its payment obligations under this Agreement.

Section 16.4  Limitation on Effect of Termination

     Termination of this Master Agreement or any Service Agreement or categories
of Services for any reason under this Article shall not affect (i) any
liabilities or obligations of a Party arising before such termination or out of
the events causing such termination, or (ii) any damages or other remedies to
which a Party may be entitled under this Master Agreement or any Service
Agreement or any Change Order, at law or in equity, arising from any breaches of
such liabilities or obligations.

                                      -30-
<PAGE>

Section 16.5  Termination/Expiration Assistance

     Concurrently with the expiration or termination of the Master Agreement or
any Service Agreement hereunder for any reason other than by reason of a failure
by Customer to satisfy a payment obligation, at the request of Customer, Torch
shall provide at Customer's expense, on a time and materials basis in accordance
with Torch's then-current published pricing, the Termination/Expiration
Assistance described in this Section 16.5. Such Termination/Expiration
Assistance may not be withheld by Torch provided that Customer has satisfied and
continues to satisfy all of its payment obligations to each Torch Party and
provided that Customer has paid to each Torch Party a "Performance Deposit":

          (a)  Torch shall deliver to Customer all Business Records and Data,
     Customer Confidential Information and Customer Confidential Materials, in
     Torch's possession, and shall, at Customer's request, destroy all
     electronic copies thereof not turned over to Customer; provided that Torch
     shall have no obligation to provide or destroy any of its intellectual
     property, Business Records and Data, Confidential Information, Confidential
     Materials, or any other of its property;

          (b)  Torch shall take such additional actions and perform such
     additional tasks as may be reasonably necessary to facilitate a timely
     disengagement in compliance with the provisions of this Section 16.5,
     including performance on or before the date of expiration or termination of
     the Term of all of Torch's obligations under this Section 16.5.


                                  ARTICLE 17
                              DISPUTE RESOLUTION

Section 17.1  General

     Any dispute or controversy between the Parties with respect to the
interpretation or application of any provision of this Master Agreement, and/or
any Service Agreement(s) and/or any Change Order(s) or the performance by Torch
or Customer of their respective obligations hereunder or findings of any audit
or any other dispute in connection with this Master Agreement or the Service
Agreements or Change Orders, shall be resolved as provided in this Article.

Section 17.2  Informal Dispute Resolution

     The Parties may, by mutual agreement, attempt to resolve their dispute
informally in the following manner:

     (a)  Either Party may submit the dispute to the Management Board, which
shall meet as often as the Parties reasonably deem necessary to gather and
analyze any information relevant

                                      -31-
<PAGE>

to the resolution of the dispute. The Management Board shall negotiate in good
faith in an effort to resolve the dispute.

     (b)  If the Management Board determines in good faith that resolution
through continued discussions by such Management Board does not appear likely,
the matter shall be referred to binding arbitration.

     (c)  During the course of negotiations, all reasonable requests made by one
Party to the other for non-privileged information, reasonably related to the
dispute, shall be honored in order that each of the Parties may be fully advised
of the other's position.

     (d)  The specific format for the discussions shall be determined at the
discretion of the Management Board, but may include the preparation of agreed
upon statements of fact or written statements of position.

     (e)  Proposals and information exchanged during the informal proceedings
described in this Article between the Parties shall be privileged, confidential
and without prejudice to a Party's legal position in any subsequent proceedings.
All such proposals and information, as well as any conduct during such
proceedings, shall be considered settlement discussions and proposals, and shall
be inadmissible in any subsequent proceedings.

Section 17.3  Arbitration

     (a)  Except as set forth in clause (b) below, any controversy or claim
arising out of or relating to this Master Agreement or any Service Agreement, or
any alleged breach hereof, including any controversy regarding the arbitrability
of any dispute, shall be settled at the request of either Party by binding
arbitration in Houston, Texas before and in accordance with the then existing
Commercial Arbitration Rules of the American Arbitration Association (the
"Rules"). In any dispute in which the amount in controversy is less than Two
Hundred Fifty Thousand Dollars ($250,000), there shall be one (1) arbitrator
agreed to by the Parties or, if the Parties are unable to agree within thirty
(30) days after demand for arbitration is made, selected in accordance with the
Rules. In all other cases there shall be three (3) arbitrators, one (1) of whom
shall be selected by Customer within thirty (30) days after demand for
arbitration is made, one (1) of whom shall be selected by Torch within thirty
(30) days after demand for arbitration is made, and one (1) of whom shall be
selected by the two Party-appointed arbitrators within thirty (30) days after
their selection. If one or more arbitrator(s) is not selected within the time
period stated in the preceding sentence, such arbitrator(s) shall be selected
pursuant to Rule 13 of the Rules. Any arbitrator(s) proposed by the American
Arbitration Association shall have at least ten (10) years of experience in
complex, commercial matters in the area that is generally the same as the matter
that is the subject of the dispute. Each Party shall pay its own attorneys' fees
and one-half (1/2) of the other arbitration costs, subject to final
apportionment by the arbitrators. The arbitrators shall apply the law set forth
herein to govern this Master Agreement and any Service Agreement and shall have
the power to award any remedy available at law or in equity; provided, however,
that the arbitrators shall have no power to amend this Master Agreement or

                                     -32-
<PAGE>

any Service Agreement. The Party prevailing in arbitration shall be entitled to
recover its reasonable and necessary attorneys' fees and expenses incurred in
the arbitration proceeding. Any award rendered pursuant to such arbitration
shall be final and binding on the Parties, and judgment on such award may be
entered in any court having jurisdiction thereof. A Party may recover its
attorneys' fees incurred in any such enforcement action.

     (b) Notwithstanding clause (a) above, a Party may request a court of
competent jurisdiction to grant provisional injunctive relief to such Party
until an arbitrator can render an award on the matter in question and such award
can be confirmed by a court having jurisdiction thereof.

Section 17.4  Continued Performance

     Subject to Section 7.5, both Parties shall continue performing their
respective obligations and responsibilities under this Master Agreement and any
Service Agreements and any Change Orders while any dispute, other than a dispute
or dispute(s) with respect to breach of confidentiality obligations.

Section 17.5  Applicable Law

     All questions concerning the validity, interpretation and performance of
this Master Agreement and any Service Agreement shall be governed by and decided
in accordance with the laws of the State of Texas, as such laws are applied to
contracts between Texas residents and without regard to the choice of law rules
of the State of Texas.

Section 17.6  Jurisdiction and Venue

     The Parties hereby submit and consent to the exclusive jurisdiction of any
state or federal court located within Harris County of the State of Texas and
irrevocably agree that all actions or proceedings relating to this Master
Agreement and any Service Agreement, other than any action or proceeding
required by this Article to be submitted to arbitration, shall be litigated in
such courts, and each of the Parties waives any objection which it may have
based on improper venue or forum non conveniens to the conduct of any such
action or proceeding in such court. Nothing in this Section shall affect the
obligation of the Parties with respect to the arbitration of disputes pursuant
to Section 17.3.

                                      -33-
<PAGE>

Section 17.7  Equitable Remedies

     The Parties agree that in the event of any breach or threatened breach of
any provision of this Master Agreement or any Service Agreement concerning (i)
Confidential Information, (ii) intellectual property rights or (iii) other
matters for which equitable rights may be granted, money damages would be an
inadequate remedy. Accordingly, such provisions may be enforced by the
preliminary or permanent, mandatory or prohibitory injunction or other order of
a court of competent jurisdiction.


                                  ARTICLE 18
                                 MISCELLANEOUS

Section 18.1  Interpretation

       (a)    In this Master Agreement and in any Service Agreement or Change
Order, words importing the singular number include the plural and vice versa and
words importing gender include all genders. The word "person" includes, subject
to the context in which it appears, an individual, partnership, association,
corporation, other legal entity, trustee, executor, administrator or legal
representative.

       (b)    The division of this Master Agreement, any Appendix hereto and any
Service Agreement or Change Order into Articles, Sections, subsections and
Schedules and the insertion of any captions or headings are for convenience of
reference only and shall not affect its construction or interpretation.

       (c)    In this Master Agreement and in any Service Agreement or Change
Order, unless otherwise specifically provided:

              (i)   In the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."

              (ii)  References to a specified Article, Section, subsection,
Schedule or other subdivision shall be construed as references to that specified
Article, Section, subsection, Schedule or other subdivision of this Master
Agreement or the applicable Service Agreement or Change Order, unless the
context otherwise requires.

              (iii) The word "dollar" and the symbol "$" refer to United States
       dollars.

              (iv)  References to "days" means calendar days unless "business
       days" are specified.

                                      -34-
<PAGE>

         (v) The term "including" means "including, without limitation," or
"including, but not limited to."

     (d) The Parties are sophisticated and have been represented by counsel
during the negotiation of this Master Agreement and each Service Agreement. As a
result, the Parties agree that the presumption of any laws or rules relating to
the interpretation of contracts against the drafter thereof should not apply,
and hereby waive any such presumption.

Section 18.2  Binding Nature and Assignment

     Except as otherwise provided in this Master Agreement, neither Party may
assign (other than by operation of law) any of its rights or obligations under
this Master Agreement without the other Parties' consent. Subject to the
foregoing, this Master Agreement and each Service Agreement shall be binding on
the Parties and their respective successors and assigns.

Section 18.3  Expenses

     In this Master Agreement and each Service Agreement or Change Order, unless
otherwise specifically provided, all costs and expenses (including the fees and
disbursements of legal counsel) incurred in connection with this Master
Agreement or the applicable Service Agreement or Change Order, and the
completion of the transactions contemplated by this Master Agreement or the
applicable Service Agreement shall be paid by the Party incurring such expenses.

Section 18.4  Amendment and Waiver

     Without limiting Section 4.3(b), this Master Agreement may not be modified,
amended, or in any way altered except by written document duly executed by the
affected Parties hereto. No waiver of any provision of this Master Agreement,
nor of any rights or obligations of any Party hereunder, will be effective
unless in writing and signed by the Party waiving compliance, and such waiver
will be effective only in the specific instance, and for the specific purpose,
stated in such writing. No waiver of breach of, or default under, any provision
of this Master Agreement will be deemed a waiver of any other provision, or of
any subsequent breach or default of the same provision, of this Master
Agreement.

Section 18.5  Further Assurances; Consents and Approvals

     Each Party shall provide such further documents or instruments required by
the other Party as may be reasonably necessary or desirable to give effect to
this Master Agreement and to carry out its provisions.

Section 18.6  Publicity

     All media releases, public announcements and other disclosures by either
Party relating to this Master Agreement or any Service Agreement or Change Order
or the subject matter hereof

                                      -35-
<PAGE>

or thereof, including promotional or marketing materials, but excluding
announcements intended solely for internal distribution or to meet legal or
regulatory requirements, shall be coordinated with and approved by the other
Party prior to release.

Section 18.7  Severability

     Any provision in this Master Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions or affecting the validity or enforceability of such provision in any
other jurisdiction.

Section 18.8  Entire Agreement

     This Master Agreement and each of the Service Agreements and Change Orders,
including the Appendices, Exhibits and Schedules hereto and thereto, constitute
the entire agreement among the Parties pertaining to the subject matter hereof
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties pertaining
to the subject matter hereof.

Section 18.9  Notices

     Except as expressly otherwise stated herein, all notices, requests,
consents, approvals, or other communications provided for, or given under, this
Master Agreement, shall be in writing, and shall be deemed to have been duly
given to a Party if delivered personally, or transmitted by facsimile to such
Party at its telecopier number set forth below, or sent by first class mail or
overnight courier to such Party at its address set forth below, or at such other
telecopier number or address, as the case may be, as shall have been
communicated in writing by such Party to the other Party in accordance with this
Section. All notices will be deemed given when received in the case of personal
delivery or delivery by mail or overnight courier, or when sent in the case of
transmission by facsimile upon electronic confirmation of receipt.

     Notices to Customer shall be addressed as follows:

          Attention: Robert J. Bensh
          Bellwether Exploration Company
          1331 Lamar St. Suite 1455
          Houston, TX 77010-3039
          Telephone No.: (713) 652-1025

                                      -36-
<PAGE>

          with a copy to:

          Attention: Corporate Secretary
          Bellwether Exploration Company
          1331 Lamar St., Suite 1455
          Houston, TX 77010-3039
          Telephone No.: (713) 652-1025

     Notices to a Torch Party shall be addressed as follows:

          Attention: President [Torch Party Name]
          c/o Torch Energy Advisors Incorporated
          1221 Lamar St. Suite 1600
          Houston, TX  77010-3039
          Telephone No.:  (800) 324-8672

     with a copy to the attention of the Torch Party's general counsel at:

          Attention:  General Counsel [Torch Party Name]
          c/o Torch Energy Advisors Incorporated
          1221 Lamar St. Suite 1600
          Houston, TX  77010-3039
          Telephone No.:  (800) 324-8672

Section 18.10  Survival

     Any provision of this Master Agreement or of any Service Agreement which
contemplates performance or observance subsequent to any termination or
expiration of this Master Agreement or of any Service Agreement shall survive
expiration or termination of this Master Agreement or any Service Agreement.

Section 18.11  Independent Contractors

     This Master Agreement will not be construed to (nor shall any Service
Agreement or Change Order be construed to) constitute either Party as a
representative, agent, employee, partner, or joint venturer of the other. The
Parties will be independent contractors for the performance under this Master
Agreement.

Section 18.12  Third Party Beneficiaries

     Except as set forth in Article 16 (Indemnification) of this Master
Agreement, nothing in this Master Agreement or in any Service Agreement, express
or implied, is intended to confer on rights, benefits, remedies, obligations or
liabilities on any person (including, without limitation,

                                      -37-
<PAGE>

any employees of the Parties) other than the Parties or their respective
successors or permitted assigns.

Section 18.13  Counterparts

     This Master Agreement and each Service Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
taken together shall constitute one and the same instrument.

Section 18.14  Duty to Act Reasonably

     Whenever a provision of this Master Agreement or any Service Agreement or
Change Order hereunder requires or contemplates any action, consent, or
approval, the Parties shall act reasonably and in good faith and (unless the
provision expressly allows exercise of a Party's sole, or sole and absolute
discretion) may not unreasonably withhold or delay such action, consent, or
approval.

Section 18.15  Year 2000 Compliance

     As of the Effective Date and continuing throughout the Term, each Torch
Party agrees that all assets and information systems owned or leased by such
Torch Party and used to provide the Services from and after December 31, 1999
will be and shall remain Year 2000 Compliant; provided, however, that Torch
Parties shall not be required to bear the cost of replacing or repairing any of
Customer's assets to correct any Year 2000 problems. In the event that a Torch
Party fails to achieve Year 2000 compliance for any assets or information
systems owned or leased by the Torch Party and used to provide Services to
Customer, and such failure materially harms Customer and continues to do so for
a period of ninety (90) days after written notice is provided by Customer, then
Customer may terminate any and all Service Agreements with such Torch Party that
are materially affected by such failure. Upon any such termination hereunder,
Customer shall pay to the Torch Party a termination fee equal to one-half of the
termination for convenience fee that is applicable to such Service Agreement.


     IN WITNESS WHEREOF the Parties have executed this Master Agreement as of
the date first above written.

                              BELLWETHER EXPLORATION COMPANY


                              By:-----------------------------
                                  Robert J. Bensh
                                  Sr. Vice President, Finance

                                      -38-
<PAGE>

                              TORCH ENERGY ADVISORS INCORPORATED


                              By:-------------------------------------
                                  Michael Smith, Managing Director and
                                  Chief Financial Officer


                              TORCH OPERATING COMPANY


                              By:-------------------------------------
                                  Michael B. Smith, Vice President


                              TORCH ENERGY MARKETING, INC.


                              By:---------------------------------------
                                  Douglas B. Chapman, President


                              NOVISTAR, INC.


                              By:---------------------------------------
                                 Thomas M. Ray, III, President

                                      -39-
<PAGE>

                                 SCHEDULE 4.1

                               EXCLUDED SERVICES

                           MASTER SERVICES AGREEMENT

1.   Acquisition services, including deal generation, screening, analysis,
     evaluation, due diligence, negotiation, closing and final accounting.

2.   Divestiture services, including preparation of sales package and/or data
     room, bid analysis and screening, sale negotiation, closing and final
     accounting.

3.   Scientific (engineering, geological and geophysical) information
     technology, including all hardware, software and systems support.

4.   Geological and geophysical interpretation and analysis.

5.   Reservoir and exploitation engineering.

6.   Office space, lease negotiation and lease management.

7.   Phone systems and related maintenance.

8.   Office security systems and related maintenance.

9.   The cost of the following items and related maintenance will no longer be
     borne by Torch, though Torch Parties will continue to provide services
     related to selecting, purchasing and arranging for maintenance of such
     items:

     (a) Desktop computer systems and related software;

     (b) Office supplies, equipment and furniture;

     (c) Kitchen equipment and supplies; and

     (d)  Office services, such as pest control, plant maintenance, coffee
          service, water filter replacement and similar items.
<PAGE>

                                 SCHEDULE 10.2

                       MANAGEMENT BOARD REPRESENTATIVES

                           MASTER SERVICES AGREEMENT



                                 Torch Parties

1.   Douglas B. Chapman
     President, TEMI and Managing Director, TEAI

2.   Michael B. Smith
     Chief Financial Officer and Managing Director, TEAI

3.   Thomas M. Ray III
     Chief Executive Officer and President, Novistar



                        Bellwether Exploration Company

1.   J.P. Bryan
     Chief Executive Officer

2.   Robert J. Bensh
     Sr. Vice President-Finance

3.   Cliff M. West, Jr.
     Sr. Vice President-Exploration and Explotation
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                                 SCHEDULE 10.5

                                 KEY PERSONNEL

                           MASTER SERVICES AGREEMENT



1.   Ann Kaeserman: Controller, TEAI

2.   Carol Cooley:  Landman, TEAI

3.   Randy A. Bailey:  Senior Vice President, TOC

4.   Wayne Penello:  Vice President, Risk Management, TEMI

5.   Kim Yates:  Senior Financial Analyst, TEAI

6.   Jim Abney:  Director, Land, TEAI